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Exhibit
10.59
PURCHASE AND SALE CONTRACT
BETWEEN
CCIP PALM LAKE, L.L.C.,
a Delaware limited liability company
AS SELLER
AND
CAMPUSCAL, LLC,
a Delaware limited liability company
AS PURCHASER
PALM LAKE
TABLE OF CONTENTS
ARTICLE I DEFINED TERMS 1
ARTICLE II PURCHASE AND SALE, PURCHASE PRICE
& DEPOSIT 7
2.1
Purchase and Sale
7
2.2
Purchase Price and Deposit
7
2.3
Escrow Provisions Regarding Deposit
7
ARTICLE III FEASIBILITY
PERIOD
9
3.1
Feasibility Period
9
3.2
Expiration of Feasibility Period
9
3.3
Conduct of Investigation
9
3.4
Purchaser Indemnification
10
3.5
Property Materials
11
3.6
Property Contracts
12
ARTICLE IV
TITLE
12
4.1
Title Documents
12
4.2
Survey
12
4.3
Objection and Response Process
13
4.4
Permitted Exceptions
13
4.5
Existing Deed of Trust
14
4.6
Purchaser Financing
14
ARTICLE V
CLOSING
17
5.1
Closing Date
17
5.2
Seller Closing Deliveries
18
5.3
Purchaser Closing Deliveries
18
5.4
Closing Prorations and Adjustments
19
5.5
Post Closing Adjustments
23
ARTICLE VI REPRESENTATIONS AND WARRANTIES
OF SELLER AND
PURCHASER
23
6.1
Seller's Representations
23
6.2
AS-IS
24
6.3
Survival of Seller's Representations
25
6.4
Definition of Seller's Knowledge
25
6.5
Representations And Warranties Of Purchaser
26
ARTICLE VII OPERATION OF THE
PROPERTY
27
7.1
Leases and Property Contracts
27
7.2
General Operation of Property
27
7.3
Liens
27
ARTICLE VIII CONDITIONS PRECEDENT TO
CLOSING
27
8.1
Purchaser's Conditions to Closing
28
8.2
Seller's Conditions to Closing
28
ARTICLE IX
BROKERAGE
29
9.1
Indemnity
29
9.2
Broker Commission
30
9.3
Broker Signature Page
30
ARTICLE X DEFAULTS AND
REMEDIES
30
10.1
Purchaser Default
30
10.2
Seller Default
30
ARTICLE XI RISK OF LOSS OR
CASUALTY
31
11.1
Major Damage
31
11.2
Minor Damage
32
11.3
Repairs
32
ARTICLE XII EMINENT
DOMAIN
32
12.1
Eminent Domain
32
ARTICLE XIII
MISCELLANEOUS
33
13.1
Binding Effect of Contract
33
13.2
Exhibits And Schedules
33
13.3
Assignability
33
13.4
Binding Effect
33
13.5
Captions
33
13.6
Number And Gender Of Words
33
13.7
Notices
33
13.8
Governing Law And Venue
35
13.9
Entire Agreement
35
13.10
Amendments
36
13.11
Severability
36
13.12
Multiple Counterparts/Facsimile Signatures
36
13.13
Construction
36
13.14
Confidentiality
36
13.15
Time Of The Essence
36
13.16
Waiver
36
13.17
Attorneys Fees
37
13.18
Time Periods
37
13.19
1031 Exchange
37
13.20
No Personal Liability of Officers, Trustees or Directors of
Seller's Partners
38
13.21
[Intentionally left blank]
38
13.22
ADA Disclosure
38
13.23
No Recording
38
13.24
Relationship of Parties
38
13.25
Dispute Resolution
38
13.26
AIMCO Marks
39
13.27
Non-Solicitation of Employees
39
13.28
Survival
39
13.29
Multiple Purchasers
39
ARTICLE XIV LEAD–BASED PAINT
DISCLOSURE
40
14.1
Disclosure
40
14.2
Consent Agreement
40
PURCHASE AND SALE CONTRACT
THIS PURCHASE AND SALE CONTRACT
(this " Contract ") is entered into as of the 30
th day of November, 2007, by and between CCIP PALM
LAKE, L.L.C. , a Delaware limited liability company, having
an address at 4582 South Ulster Street Parkway, Suite 1100,
Denver, Colorado 80237 (" Seller "), and
CAMPUSCAL, LLC , a Delaware limited liability company,
having a principal address at 110 Wild Basin Road, Suite 365,
Austin, Texas 78746 (" Purchaser ").
NOW, THEREFORE, in consideration of mutual
covenants set forth herein, Seller and Purchaser hereby agree as
follows:
RECITALS
A.
Seller owns the real estate located in
Hillsborough County, Florida, as more particularly described in
Exhibit A attached hereto and made a part hereof, and the
improvements thereon, commonly known as Palm Lake.
B.
Purchaser desires to purchase, and Seller
desires to sell, such land, improvements and certain associated
property, on the terms and conditions set forth below.
ARTICLE I
DEFINED TERMS
1.1
Unless otherwise defined herein, any term with
its initial letter capitalized in this Contract shall have the
meaning set forth in this ARTICLE 1 .
1.1.1
" ADA " shall have the meaning set
forth in Section 13.22 .
1.1.2
" Additional Deposit " shall have
the meaning set forth in Section 2.2.2 .
1.1.3
" AIMCO " shall have the meaning
set forth in Section 14.2 .
1.1.4
" AIMCO Marks " means all words,
phrases, slogans, materials, software, proprietary systems,
trade secrets, proprietary information and lists, and other
intellectual property owned or used by Seller, the Property
Manager, or AIMCO in the marketing, operation or use of the
Property (or in the marketing, operation or use of any other
properties managed by the Property Manager or owned by AIMCO or
an affiliate of either Property Manager or AIMCO).
1.1.5
[Intentionally left blank].
1.1.6
[Intentionally left blank].
1.1.7
[Intentionally left blank].
1.1.8
" Broker " shall have the meaning
set forth in Section 9.1 .
1.1.9
" Business Day " means any day
other than a Saturday or Sunday or Federal holiday or legal
holiday in the States of Colorado, California, Texas or
Florida.
1.1.10
" Closing " means the consummation
of the purchase and sale and related transactions contemplated
by this Contract in accordance with the terms and conditions of
this Contract.
1.1.11
" Closing Date " means the date on
which date the Closing of the conveyance of the Property is
required to be held pursuant to Section 5.1 .
1.1.12
" Code " shall have the meaning
set forth in Section 2.3.6 .
1.1.13
" Consent Agreement " shall have
the meaning set forth in Section 14.2 .
1.1.14
" Consultants " shall have the
meaning set forth in Section 3.1 .
1.1.15
" Damage Notice " shall have the
meaning set forth in Section 11.1 .
1.1.16
" Deed " shall have the meaning
set forth in Section 5.2.1 .
1.1.17
" Deed of Trust " shall have the
meaning set forth in Section 4.5 .
1.1.18
" Deposit " means, to the extent
actually deposited by Purchaser with Escrow Agent, the Initial
Deposit and the Additional Deposit.
1.1.19
" Effective Date " shall mean the
date on which this Contract is executed by the later to sign of
Purchaser or Seller, as indicated on the signature page of this
Contract.
1.1.20
" Escrow Agent " shall have the
meaning set forth in Section 2.2.1 .
1.1.21
" Excluded Permits " means those
Permits which, under applicable law, are nontransferable and
such other Permits, if any, as may be designated as Excluded
Permits on Schedule 1.1.21.
1.1.22
" Existing Survey " shall have the
meaning set forth in Section 4.2 .
1.1.23
" Feasibility Period " shall have
the meaning set forth in Section 3.1 .
1.1.24
" FHA " shall have the meaning set
forth in Section 13.22 .
1.1.25
" Final Response Deadline " shall
have the meaning set forth in Section 4.3 .
1.1.26
" Fixtures and Tangible Personal
Property " means all fixtures, furniture, furnishings,
fittings, equipment, machinery, apparatus, appliances and other
articles of tangible personal property located on the Land or in
the Improvements as of the Effective Date and used or usable in
connection with the occupation or operation of all or any part
of the Property, but only to the extent transferable. The
term " Fixtures and Tangible Personal Property "
does not include (a) equipment leased by Seller and the interest
of Seller in any equipment provided to the Property for use, but
not owned or leased by Seller, or (b) property owned or leased
by any Tenant or guest, employee or other person furnishing
goods or services to the Property, or (c) property and equipment
owned by Seller, which in the ordinary course of business of the
Property is not used exclusively for the business, operation or
management of the Property, or (d) the property and equipment,
if any, expressly identified in Schedule 1.1.26.
1.1.27
" General Assignment " shall have
the meaning set forth in Section 5.2.3 .
1.1.28
" Good Funds " shall have the
meaning set forth in Section 2.2.1 .
1.1.29
" Improvements " means all
buildings and improvements located on the Land taken "as
is."
1.1.30
" Initial Deposit " shall have the
meaning set forth in Section 2.2.1 .
1.1.31
" Land " means all of those
certain tracts of land located in the State of Florida described
on Exhibit A , and all rights, privileges and
appurtenances pertaining thereto.
1.1.32
" Lease(s) " means the interest of
Seller in and to all leases, subleases and other occupancy
contracts, whether or not of record, which provide for the use
or occupancy of space or facilities on or relating to the
Property and which are in force as of the Closing Date for the
applicable Property.
1.1.33
" Leases Assignment " shall have
the meaning set forth in Section 5.2.4 .
1.1.34
" Lender " means Federal Home Loan
Mortgage Corporation, assignee of GMAC Commercial Mortgage
Corporation.
1.1.35
[Intentionally left blank].
1.1.36
" Loan " means the indebtedness
owing to Lender evidenced by the Note.
1.1.37
[Intentionally left blank].
1.1.38
[Intentionally left blank].
1.1.39
" Loan Payoff " shall have the
meaning set forth in Section 5.4.7 .
1.1.40
" Losses " shall have the meaning
set forth in Section 3.4.1 .
1.1.41
" Materials " shall have the
meaning set forth in Section 3.5 .
1.1.42
" Miscellaneous Property Assets "
means all contract rights, leases, concessions, warranties,
plans, drawings and other items of intangible personal property
relating to the ownership or operation of the Property and owned
by Seller, excluding, however, (a) receivables, (b) Property
Contracts, (c) Leases, (d) Permits, (e) cash or other funds,
whether in petty cash or house "banks," or on deposit in bank
accounts or in transit for deposit, (f) refunds, rebates or
other claims, or any interest thereon, for periods or events
occurring prior to the Closing Date, (g) utility and similar
deposits, (h) insurance or other prepaid items, (i) Seller's
proprietary books and records, or (j) any right, title or
interest in or to the AIMCO Marks. The term "
Miscellaneous Property Assets " also shall include
all of Seller's rights, if any, in and to the name " PALM
LAKE " as it relates solely to use in connection with
the Property (and not with respect to any other property owned
or managed by Seller, Property Manager, AIMCO, or their
respective affiliates).
1.1.43
" Note " means that certain
Multifamily Note in the modified original principal amount of
$3,000,000.00, pursuant to that certain Extension and
Modification Agreement dated September 28, 2000, executed by
Consolidated Capital Equity Partners, L.P., and later assumed by
Seller, and payable to the order of GMAC Commercial Mortgage
Corporation, as assigned to Federal Home Loan Mortgage
Corporation, which Extension and Modification Agreement modified
the original Multifamily Note dated November 30, 1995 in the
original principal amount of $1,750,000.00 with Lehman Brothers
Holdings, Inc. as lender, as subsequently assigned to GMAC
Mortgage Corporation.
1.1.44
" Objection Deadline " shall have
the meaning set forth in Section 4.3 .
1.1.45
" Objection Notice " shall have
the meaning set forth in Section 4.3 .
1.1.46
" Objections " shall have the
meaning set forth in Section 4.3 .
1.1.47
" Permits " means all licenses and
permits granted by any governmental authority having
jurisdiction over the Property owned by Seller and required in
order to own and operate the Property.
1.1.48
" Permitted Exceptions " shall
have the meaning set forth in Section 4.4 .
1.1.49
" Prohibited Person " means any of
the following: (a) a person or entity that is listed in
the Annex to, or is otherwise subject to the provisions of,
Executive Order No. 13224 on Terrorist Financing (effective
September 24, 2001) (the " Executive Order "); (b)
a person or entity owned or controlled by, or acting for or on
behalf of any person or entity that is listed in the Annex to,
or is otherwise subject to the provisions of, the Executive
Order; (c) a person or entity that is named as a "specially
designated national" or "blocked person" on the most current
list published by the U.S. Treasury Department's Office of
Foreign Assets Control (" OFAC ") at its official
website, http://www.treas.gov/offices/enforcement/ofac; (d) a
person or entity that is otherwise the target of any economic
sanctions program currently administered by OFAC; or (e) a
person or entity that is affiliated with any person or entity
identified in clause (a), (b), (c) and/or (d) above.
1.1.50
" Property " means (a) the Land
and Improvements and all rights of Seller, if any, in and to all
of the easements, rights, privileges, and appurtenances
belonging or in any way appertaining to the Land and
Improvements, (b) the Property Contracts, Leases, Permits (other
than Excluded Permits), Fixtures and Tangible Personal Property,
and (c) the Miscellaneous Property Assets.
1.1.51
" Property Contracts " means all
contracts, agreements, equipment leases, purchase orders,
maintenance, service, or utility contracts and similar
contracts, excluding Leases, regardless of whether entered into
by Seller, Property Manager, or an affiliate of either, which
relate to the ownership, maintenance, equipment leasing,
construction or repair and/or operation of the Property, whether
or not assignable by their terms, but not including (a) any
national contracts entered into by Seller, Property Manager, or
AIMCO with respect to the Property (i) which terminate
automatically upon transfer of the Property by Seller, or (ii)
which Seller, in Seller's sole discretion, elects to terminate
with respect to the Property effective as of the Closing Date,
or (b) any property management contract for the Property.
Property Contracts shall not include forward or similar
long-term contracts to purchase electricity, natural gas, or
other utilities, which contracts shall be " Utility
Contracts " governed by the provisions of Section
5.4.11 .
1.1.52
" Property Contracts Notice "
shall have the meaning set forth in Section 3.6 .
1.1.53
" Property Manager " means the
current property manager of the Property.
1.1.54
" Proration Schedule " shall have
the meaning set forth in Section 5.4.1 .
1.1.55
" Purchase Price " means the
consideration to be paid by Purchaser to Seller for the purchase
of the Property pursuant to Section 2.2 .
1.1.56
" Records Disposal Notice " shall
have the meaning set forth in Section 5.4.12 .
1.1.57
" Records Hold Period " shall have
the meaning set forth in Section 5.4.12 .
1.1.58
" Regional Property Manager "
shall have the meaning set forth in Section 6.4 .
1.1.59
" Rent-Ready Condition " means the
physical condition to which Seller, in the ordinary course of
its business, would prepare Tenant Units in anticipation of
renting such Tenant Units to prospective Tenants.
1.1.60
" Report " shall have the meaning
set forth in Section 14.2 .
1.1.61
" Required Assignment Consent "
shall have the meaning set forth in Section 3.6 .
1.1.62
" Response Deadline " shall have
the meaning set forth in Section 4.3 .
1.1.63
" Response Notice " shall have the
meaning set forth in Section 4.3 .
1.1.64
" Seller's Indemnified Parties "
shall have the meaning set forth in Section 3.4.1 .
1.1.65
" Seller's Property-Related Files and
Records " shall have the meaning set forth in Section
5.4.12 .
1.1.66
" Seller's Representations " shall
have the meaning set forth in Section 6.1 .
1.1.67
" Survey " shall have the meaning
ascribed thereto in Section 4.2 .
1.1.68
" Survival Period " shall have the
meaning set forth in Section 6.3 .
1.1.69
" Survival Provisions " shall have
the meaning set forth in Section 13.28 .
1.1.70
" Tenant " means any person or
entity entitled to occupy any portion of the Property under a
Lease.
1.1.71
" Tenant Deposits " means all
security deposits, prepaid rentals, cleaning fees and other
refundable deposits and fees collected from Tenants, plus any
interest accrued thereon, paid by Tenants to Seller pursuant to
the Leases. Tenant Deposits shall not include any
non-refundable deposits or fees paid by Tenants to Seller,
either pursuant to the Leases or otherwise.
1.1.72
" Tenant Security Deposit Balance
" shall have the meaning set forth in Section 5.4.6.2
.
1.1.73
" Tenant Unit " means each
apartment in the Property which is leased by Seller to Tenants
in the ordinary course of Seller's business.
1.1.74
" Terminated Contracts " shall
have the meaning set forth in Section 3.6 .
1.1.75
" Testing " shall have the meaning
set forth in Section 14.2 .
1.1.76
" Third-Party Reports " means any
reports, studies or other information prepared or compiled for
Purchaser by any Consultant or other third-party in connection
with Purchaser's investigation of the Property.
1.1.77
" Title Commitment " shall have
the meaning ascribed thereto in Section 4.1 .
1.1.78
" Title Documents " shall have the
meaning set forth in Section 4.1 .
1.1.79
" Title Insurer " shall have the
meaning set forth in Section 2.2.1 .
1.1.80
" Title Policy " shall have the
meaning set forth in Section 4.1 .
1.1.81
" Uncollected Rents " shall have
the meaning set forth in Section 5.4.6.1 .
1.1.82
" Utility Contract " shall have
the meaning set forth in Section 5.4.11 .
1.1.83
" Vendor Terminations " shall have
the meaning set forth in Section 5.2.5 .
ARTICLE II
PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT
2.1
Purchase and Sale . Seller
agrees to sell and convey the Property to Purchaser and
Purchaser agrees to purchase the Property from Seller, all in
accordance with the terms and conditions set forth in this
Contract.
2.2
Purchase Price and Deposit .
The total purchase price (" Purchase Price
") for the Property shall be an amount equal to $12,850,000.00,
which amount shall be paid by Purchaser, as follows:
2.2.1
On or before five (5) Business Days after the
Effective Date, Purchaser shall deliver to LandAmerica Financial
Group, Inc., One Market, Spear Tower, Suite 1850, San Francisco,
California 94105, Attention: Carol Carozza (" Escrow
Agent " or " Title Insurer ") an initial
deposit (the " Initial Deposit ") of $128,500.00
by wire transfer of immediately available funds (" Good
Funds "). The Initial Deposit shall be held and
disbursed in accordance with the escrow provisions set forth in
Section 2.3 .
2.2.2
In the event that this Contract is not
terminated on or before the expiration of the Feasibility
Period, then on the day that the Feasibility Period expires,
Purchaser shall deliver to Escrow Agent an additional deposit
(the " Additional Deposit ") of $221,500.00 by
wire by transfer of Good Funds. The Additional Deposit
shall be held and disbursed in accordance with the escrow
provisions set forth in Section 2.3 .
2.2.3
[Intentionally left blank].
2.2.4
The balance of the Purchase Price for the
Property shall be paid to and received by Escrow Agent by wire
transfer of Good Funds no later than 10:00 a.m. (in the time
zone in which Escrow Agent is located) on the Closing Date.
2.3
Escrow Provisions Regarding
Deposit .
2.3.1
Escrow Agent shall hold the Deposit and make
delivery of the Deposit to the party entitled thereto under the
terms of this Contract. Escrow Agent shall invest the
Deposit in such short-term, high-grade securities,
interest-bearing bank accounts, money market funds or accounts,
bank certificates of deposit or bank repurchase contracts as
Purchaser may from time to time instruct, and all interest and
income thereon shall become part of the Deposit and shall be
remitted to the party entitled to the Deposit pursuant to this
Contract.
2.3.2
Escrow Agent shall hold the Deposit until the
earlier occurrence of (i) the Closing Date, at which time the
Deposit shall be applied against the Purchase Price, or (ii) the
date on which Escrow Agent shall be authorized to disburse the
Deposit as set forth in Section 2.3.3 . The tax
identification numbers of the parties shall be furnished to
Escrow Agent upon request.
2.3.3
If the Deposit has not been released earlier in
accordance with Section 2.3.2 , and either party makes a
written demand upon Escrow Agent for payment of the Deposit,
Escrow Agent shall give written notice to the other party of
such demand. If Escrow Agent does not receive a written
objection from the other party to the proposed payment within
three (3) Business Days after the giving of such notice, Escrow
Agent is hereby authorized to make such payment (subject to
Purchaser's obligation under Section 3.5.2 to return or
certify the destruction of all Third-Party Reports and
information and Materials provided to Purchaser as a
pre-condition to the return of the Deposit to Purchaser).
If Escrow Agent does receive such written objection within
such three (3) 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. However, Escrow Agent shall have the right at
any time to deposit the Deposit and interest thereon, if any,
with a court of competent jurisdiction in the state in which the
Property is located. Escrow Agent shall give written
notice of such deposit to Seller and Purchaser. Upon such
deposit, Escrow Agent shall be relieved and discharged of all
further obligations and responsibilities hereunder.
2.3.4
The parties acknowledge that Escrow Agent is
acting solely as a stakeholder at their request and for their
convenience, and that Escrow Agent shall not be deemed to be the
agent of either of the parties for any act or omission on its
part unless taken or suffered in bad faith in willful disregard
of this Contract or involving gross negligence. Seller and
Purchaser jointly and severally shall indemnify and hold Escrow
Agent harmless from and against all costs, claims and expenses,
including reasonable attorney's fees, incurred in connection
with the performance of Escrow Agent's duties hereunder, except
with respect to actions or omissions taken or suffered by Escrow
Agent in bad faith, in willful disregard of this Contract or
involving gross negligence on the part of the Escrow Agent.
2.3.5
The parties shall deliver to Escrow Agent an
executed copy of this Contract, which shall constitute the sole
instructions to Escrow Agent. Escrow Agent shall execute
the signature page for Escrow Agent attached hereto with respect
to the provisions of this Section 2.3 ; provided,
however, that (a) Escrow Agent's signature hereon shall not be a
prerequisite to the binding nature of this Contract on Purchaser
and Seller, and the same shall become fully effective upon
execution by Purchaser and Seller, and (b) the signature of
Escrow Agent will not be necessary to amend any provision of
this Contract other than this Section 2.3 .
2.3.6
Escrow Agent, as the person responsible for
closing the transaction within the meaning of Section
6045(e)(2)(A) of the Internal Revenue Code of 1986, as amended
(the " Code "), shall file all necessary
information, reports, returns, and statements regarding the
transaction required by the Code including, but not limited to,
the tax reports required pursuant to Section 6045 of the Code.
Further, Escrow Agent agrees to indemnify and hold
Purchaser, Seller, and their respective attorneys and brokers
harmless from and against any Losses resulting from Escrow
Agent's failure to file the reports Escrow Agent is required to
file pursuant to this section.
2.3.7
The provisions of this Section 2.3 shall
survive the termination of this Contract, and if not so
terminated, the Closing and delivery of the Deed to
Purchaser.
ARTICLE III
FEASIBILITY PERIOD
3.1
Feasibility Period . Subject
to the terms of Section 3.3 and 3.4 and the right
of Tenants under the Leases, from the Effective Date to and
including December 27, 2007 (the " Feasibility
Period "), and from the date the Feasibility Period
expires up until the Closing Date with the prior approval of
Seller, which approval shall not be unreasonably withheld,
Purchaser, and its agents, contractors, engineers, surveyors,
attorneys, and employees (collectively, "
Consultants ," and each individually a "
Consultant ") shall have the right from time to
time to enter onto the Property:
3.1.1
To conduct and make any and all customary
studies, tests, examinations, inquiries, and inspections, or
investigations (collectively, the " Inspections ")
of or concerning the Property (including, without limitation,
engineering and feasibility studies, evaluation of drainage and
flood plain, soil tests for bearing capacity and percolation and
surveys, including topographical surveys);
3.1.2
To confirm any and all matters which Purchaser
may reasonably desire to confirm with respect to the
Property;
3.1.3
To ascertain and confirm the suitability of the
property for Purchaser's intended use of the Property; and
3.1.4
To review the Materials at Purchaser's sole cost
and expense.
3.2
Expiration of Feasibility Period .
If the results of any of the matters referred to in
Section 3.1 appear unsatisfactory to Purchaser for any
reason or if Purchaser elects not to proceed with the
transaction contemplated by this Contract for any other reason,
or for no reason whatsoever, in Purchaser's sole and absolute
discretion, then Purchaser shall have the right to terminate
this Contract by giving written notice to that effect to Seller
and Escrow Agent on or before 5:00 p.m. (in the time zone in
which the Escrow Agent is located) on the date of expiration of
the Feasibility Period. If Purchaser exercises such right
to terminate, this Contract shall terminate and be of no further
force and effect subject to and except for the Survival
Provisions, and Escrow Agent shall forthwith return the Initial
Deposit to Purchaser (subject to Purchaser's obligation under
Section 3.5.2 to return or certify the destruction of all
Third-Party Reports and information and Materials provided to
Purchaser as a pre-condition to the return of the Initial
Deposit). If Purchaser fails to provide Seller with
written notice of termination prior to the expiration of the
Feasibility Period in strict accordance with the notice
provisions of this Contract, Purchaser's right to terminate
under this Section 3.2 shall be permanently waived and
this Contract shall remain in full force and effect, the Deposit
(including both the Initial Deposit and, when delivered in
accordance with Section 2.2.2 , the Additional Deposit)
shall be non-refundable, except as expressly provided otherwise
herein, and Purchaser's obligation to purchase the Property
shall be non-contingent and unconditional except only for
satisfaction of the conditions expressly stated in Section
8.1 and except as otherwise provided in Section 10.2
, Article XI and Article XII .
3.3
Conduct of Investigation .
Purchaser shall not permit any mechanic's or materialmen's
liens or any other liens to attach to the Property by reason of
the performance of any work or the purchase of any materials by
Purchaser or any other party in connection with any Inspections
conducted by or for Purchaser. Purchaser shall give notice
to Seller a reasonable time prior to entry onto the Property and
shall permit Seller to have a representative present during all
Inspections conducted at the Property. Purchaser shall
take all reasonable actions and implement all protections
necessary to ensure that all actions taken in connection with
the investigations and inspections of the Property, and all
equipment, materials and substances generated, used or brought
onto the Property pose no material threat to the safety of
persons or the environment and cause no damage to the Property
or other property of Seller or other persons. All
information made available by Seller to Purchaser in accordance
with this Contract or obtained by Purchaser in the course of its
Inspections shall be treated as confidential information by
Purchaser, and, prior to the purchase of the Property by
Purchaser, Purchaser shall use its commercially reasonable
efforts to prevent its Consultants from divulging such
information to any unrelated third parties except as reasonably
necessary to third parties engaged by Purchaser for the limited
purpose of analyzing and investigating such information for the
purpose of consummating the transaction contemplated by this
Contract. The provisions of this Section 3.3 shall
survive the termination of this Contract, and if not so
terminated shall survive (except for the confidentiality
provisions of this Section 3.3 ) the Closing and delivery
of the Deed to Purchaser.
3.4
Purchaser Indemnification .
3.4.1
Purchaser shall indemnify, hold harmless and, if
requested by Seller (in Seller's sole discretion), defend (with
counsel approved by Seller) Seller, together with Seller's
affiliates, parent and subsidiary entities, successors, assigns,
partners, managers, members, employees, officers, directors,
trustees, shareholders, counsel, representatives, agents,
Property Manager, Regional Property Manager, and AIMCO
(collectively, including Seller, " Seller's Indemnified
Parties "), from and against any and all damages,
mechanics' liens, liabilities, losses, demands, actions, causes
of action, claims, costs and expenses (including reasonable
attorneys' fees, including the cost of in-house counsel and
appeals) (collectively, " Losses ") arising from
or related to Purchaser's or its Consultants' entry onto the
Property, and any Inspections or other matters performed by
Purchaser with respect to the Property during the Feasibility
Period or otherwise. Purchaser shall, however, not be
liable for any damages incurred by Seller resulting from the
mere discovery by Purchaser of a pre-existing condition at or
with regard to the Property; provided, however, that, if
Purchaser proceeds with acquisition of the Property after the
expiration of the Feasibility Period, Purchaser shall accept the
Property with such pre-existing condition and assume any
liabilities associated therewith.
3.4.2
Notwithstanding anything in this Contract to the
contrary, Purchaser shall not be permitted to perform any
invasive tests on the Property without Seller's prior written
consent, which consent may be withheld in Seller's sole
discretion. Further, Seller shall have the right, without
limitation, to disapprove any and all entries, surveys, tests
(including, without limitation, a Phase II environmental study
of the Property), investigations and other matters that in
Seller's reasonable judgment could result in any injury to the
Property or breach of any contract, or expose Seller to any
Losses or violation of applicable law, or otherwise adversely
affect the Property or Seller's interest therein.
Purchaser shall use best efforts to minimize disruption to
Tenants in connection with Purchaser's or its Consultants'
activities pursuant to this Section. No consent by the
Seller to any such activity shall be deemed to constitute a
waiver by Seller or assumption of liability or risk by Seller.
Purchaser hereby agrees to restore, at Purchaser's sole
cost and expense, the Property to materially 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 $2,000,000.00 for injury or death to
more than one person and $500,000.00 with respect to property
damage, and (b) worker's compensation insurance for all of their
respective employees in accordance with the law of the state in
which the Property is located. Purchaser shall deliver
proof of the insurance coverage required pursuant to this
Section 3.4.2 to Seller (in the form of a certificate of
insurance) no later than two (2) Business Days before
Purchaser's or each Purchaser's Consultant's entry onto the
Property, covering the then anticipated entry. The
provisions of this Section 3.4 shall survive the
termination of this Contract, and if not so terminated, the
Closing and delivery of the Deed to Purchaser.
3.5
Property Materials .
3.5.1
Within 5 days after the Effective Date, and to
the extent the same exist and are in Seller's possession or
reasonable control (subject to Section 3.5.2 ), Seller
agrees to make the documents set forth on Schedule 3.5 (the "
Materials ") available at the Property for review
and copying by Purchaser at Purchaser's sole cost and expense.
In the alternative, at Seller's option and within the
foregoing 5-day period, Seller may deliver some or all of the
Materials to Purchaser, or make the Materials available to
Purchaser on a secure web site (Purchaser agrees that any item
to be delivered by Seller under this Contract shall be deemed
delivered to the extent available to Purchaser on such secured
web site). To the extent that Purchaser determines that
any of the Materials have not been made available or delivered
to Purchaser pursuant to this Section 3.5.1 , Purchaser
shall notify Seller and Seller shall use commercially reasonable
efforts to deliver the same to Purchaser within 5 Business Days
after such notification is received by Seller; provided,
however, that under no circumstances will the Feasibility Period
be extended and Buyer's sole remedy will be to terminate this
Contract pursuant to Section 3.2 .
3.5.2
In providing such information and Materials to
Purchaser, other than Seller's Representations, Seller makes no
representation or warranty, express, written, oral, statutory,
or implied, and all such representations and warranties are
hereby expressly excluded and disclaimed. Any information
and Materials provided by Seller to Purchaser under the terms of
this Contract is for informational purposes only and, together
with all Third-Party Reports, shall be returned by Purchaser to
Seller (or the destruction thereof shall be certified in writing
by Purchaser to Seller) as a condition to return of the 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. Other than as expressly
provided in the Seller Representations, Purchaser shall not in
any way be entitled to rely upon the accuracy of such
information and Materials. Purchaser recognizes and agrees
that the Materials and other documents and information delivered
or made available by Seller pursuant to this Contract may not be
complete and are those that are readily available to Seller
after reasonable inquiry to ascertain their availability.
Purchaser understands that, although Seller will use
commercially reasonable efforts to locate and make available the
Materials and other documents required to be delivered or made
available by Seller pursuant to this Contract, Purchaser will
not rely on such Materials or other documents as being a
complete and accurate source of information with respect to the
Property other than as expressly provided in the Seller
Representations, and will instead rely exclusively on its own
Inspections and Consultants with respect to all matters which it
deems relevant to its decision to acquire, own and operate the
Property.
3.5.3
In addition to the items set forth on
Schedule 3.5 , no later than 5 Business Days after the
Effective Date, Seller shall deliver to Purchaser (or otherwise
make available to Purchaser as provided under Section
3.5.1 ) a rent roll for the Property listing the move-in
date, monthly base rent payable, lease expiration date and
unapplied security deposit for each Lease (the " Rent
Roll "). The Rent Roll shall be part of the
Materials for all purposes under this Contract and Seller makes
no representations or warranties regarding the Rent Roll other
than the express representation set forth in Section
6.1.7 . Seller shall update the Rent Roll in
accordance with Section 5.2.10 .
3.5.4
The provisions of this Section 3.5 shall
survive the Closing and delivery of the Deed to Purchaser.
3.6
Property Contracts . On or
before the expiration of the Feasibility Period, Purchaser may
deliver written notice to Seller (the " Property Contracts
Notice ") specifying any Property Contracts which
Purchaser desires to terminate at the Closing (the "
Terminated Contracts "); provided that (a) the
effective date of such termination after Closing shall be
subject to the express terms of such Terminated Contracts (and,
to the extent that the effective date of termination of any
Terminated Contract is after the Closing Date, Purchaser shall
be deemed to have assumed all of Seller's obligations under such
Terminated Contract as of the Closing Date), (b) if any such
Property Contract cannot by its terms be terminated, it shall be
assumed by Purchaser and not be a Terminated Contract, and (c)
to the extent that any such Terminated Contract requires payment
of a penalty or premium for cancellation, Purchaser shall be
solely responsible for the payment of any such cancellation fees
or penalties. If Purchaser fails to deliver the Property
Contracts Notice on or before the expiration of the Feasibility
Period, there shall be no Terminated Contracts and Purchaser
shall assume all Property Contracts at the Closing. To the
extent that any Property Contract to be assumed by Purchaser
(including any Property Contract that, because of advance notice
requirements, will be temporarily assumed by Purchaser pending
the effective date of termination after the Closing Date) is
either (i) assignable but requires the applicable vendor to
consent to the assignment or assumption of the Property Contract
by 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 Seller to
Purchaser (and the assumption by Purchaser of all obligations
under such Property Contract). From and after Closing,
Purchaser shall indemnify, hold harmless and, if requested by
Seller (in Seller's sole discretion), defend (with counsel
approved by Seller) Seller's Indemnified Parties from and
against any and all Losses arising from or related to
Purchaser's failure to obtain any Required Assignment
Consent.
ARTICLE IV
TITLE
4.1
Title Documents . Within 5
calendar days after the Effective Date, Seller shall cause to be
delivered to Purchaser a standard form commitment for title
insurance (" Title Commitment ") for the Property
in an amount equal to the Purchase Price from Title Insurer for
an owner's extended coverage title insurance policy (the "
Title Policy ") on the 2006 standard American Land
Title Association form, together with copies of all instruments
identified as exceptions therein (together with the Title
Commitment, referred to herein as the " Title
Documents "). Seller and Purchaser shall split the
cost of the basic premium for the Title Policy, and Purchaser
shall be solely responsible for payment of all other costs
relating to procurement of the Title Commitment, the Title
Policy, and any requested endorsements.
4.2
Survey . Within 3 Business
Days after the Effective Date, Seller shall deliver to Purchaser
or make available at the Property an existing survey of the
Property (the " Existing Survey ") which to
Seller's knowledge is in Seller's possession or reasonable
control (subject to Section 3.5.2 ). Purchaser
acknowledges and agrees that delivery of the Existing Survey is
subject to Section 3.5.2 . To the extent that
Purchaser desires that a new survey of the Property be prepared
(or that the Existing Survey be updated), Purchaser may obtain a
new or updated survey of the Property (such new or updated
survey, if any, together with the Existing Survey, is referred
to herein as the " Survey "). Seller and
Purchaser shall split the cost and expense of the preparation of
any new or updated survey obtained by Purchaser pursuant to the
terms of this Section 4.2 . The cost and expense of
any further updates or revisions to the new or updated survey
ordered pursuant to the terms of this Section 4.2 shall
solely be the responsibility of Purchaser.
4.3
Objection and Response Process .
On or before the date which is 15 days after the Effective
Date (the " Objection Deadline "), Purchaser shall
give written notice (the " Objection Notice ") to
the attorneys for Seller of any matter set forth in the Title
Documents or the Survey to which Purchaser objects (the "
Objections "). If Purchaser fails to tender
an Objection Notice on or before the Objection Deadline,
Purchaser shall be deemed to have approved and irrevocably
waived any objections to any matters covered by the Title
Documents and the Survey. On or before 20 days after the
Effective Date (the " Response Deadline "), Seller
may, in Seller's sole discretion, give Purchaser notice (the "
Response Notice ") of those Objections which
Seller is willing to cure, if any. Seller shall be
entitled to reasonable adjournments of the Closing Date upon no
less than five (5) Business Days prior written notice to cure
the Objections, so long as the Closing Date as extended is not
later than January 31, 2008 and does not fall between January 1,
2008 and January 15, 2008. If Seller fails to deliver a
Response Notice by the Response Deadline, Seller shall be deemed
to have elected not to cure or otherwise resolve any matter set
forth in the Objection Notice. If Purchaser is
dissatisfied with the Response Notice, Purchaser may, as its
exclusive remedy, elect by written notice given to Seller on or
before 25 days after the Effective Date (the " Final
Response Deadline ") either (a) to accept the Title
Documents and Survey with resolution, if any, of the Objections
as set forth in the Response Notice (or if no Response Notice is
tendered, without any resolution of the Objections) and without
any reduction or abatement of the Purchase Price, or (b) to
terminate this Contract, in which event the Initial Deposit
shall be returned to Purchaser (subject to Purchaser's
obligation under Section 3.5.2 to return or certify the
destruction of all Third-Party Reports and information and
Materials provided to Purchaser as a pre-condition to the return
of the Initial Deposit). If Purchaser fails to give notice
to terminate this Contract on or before the Final Response
Deadline, Purchaser shall be deemed to have elected to approve
and irrevocably waived any objections to any matters covered by
the Title Documents or the Survey, subject only to resolution,
if any, of the Objections as set forth in the Response Notice
(or if no Response Notice is tendered, without any resolution of
the Objections).
4.4
Permitted Exceptions . The
Deed delivered pursuant to this Contract shall be subject to the
following, all of which shall be deemed " Permitted
Exceptions ":
4.4.1
All matters shown in the Title Documents and the
Survey, other than (a) those Objections, if any, which Seller
has agreed to cure pursuant to the Response Notice under
Section 4.3 , (b) mechanics' liens and taxes due and
payable with respect to the period preceding Closing, (c) the
standard exception regarding the rights of parties in
possession, which shall be limited to those parties in
possession pursuant to the Leases, and (d) the standard
exception pertaining to taxes, which shall be limited to taxes
and assessments payable in the year in which the Closing occurs
and subsequent taxes and assessments;
4.4.2
All Leases; and
4.4.3
Any defects in or objections to title to the
Property, or title exceptions or encumbrances, arising by,
through or under Purchaser.
4.5
Existing Deed of Trust . It
is understood and agreed that, whether or not Purchaser gives an
Objection Notice with respect thereto, any deeds of trust and/or
mortgages which secure the Note (collectively, the " Deed
of Trust ") shall not be deemed Permitted Exceptions,
whether Purchaser gives further written notice of such or not,
and shall, pursuant to Section 5.4.7 , be paid off,
satisfied, discharged and/or cured from proceeds of the Purchase
Price at Closing.
4.6
Purchaser Financing .
Purchaser assumes full responsibility to obtain the funds
required for settlement, and Purchaser's acquisition of such
funds shall not be a contingency to the Closing.
ARTICLE V
CLOSING
5.1
Closing Date . The Closing
shall occur on December 28, 2007, or an earlier date if mutually
agreed to by Seller and Purchaser (the " Closing
Date "), through an escrow with Escrow Agent, whereby
the Seller, Purchaser and their attorneys need not be physically
present at the Closing and may deliver documents by overnight
air courier or other means. Notwithstanding the foregoing
to the contrary, Seller shall have the option, by delivering
five (5) Business Days written notice to Purchaser, to extend
the Closing Date to another date (either in the same month or
the next) as Seller reasonably determines is desirable in
connection with the Loan Payoff, so long as such date is not
later than January 31, 2008 and does not fall between
January 1, 2008 and January 15, 2008. Further, the
Closing Date may be extended without penalty at the option of
Seller to satisfy any condition to Closing, by delivering five
(5) Business Days written notice to Purchaser, so long as the
Closing Date as extended does not fall between January 1, 2008
and January 15, 2008 and is not later than January 31, 2008, or
the Closing Date may be extended to such later date as is
mutually acceptable to Seller and Purchaser.
5.2
Seller Closing Deliveries .
No later than 1 Business Day prior to the Closing Date,
Seller shall deliver to Escrow Agent, each of the following
items:
5.2.1
Limited Warranty Deed (the " Deed
") in the form attached as Exhibit B to Purchaser,
subject to the Permitted Exceptions.
5.2.2
A Bill of Sale in the form attached as
Exhibit C .
5.2.3
A General Assignment in the form attached as
Exhibit D (the " General Assignment ").
5.2.4
An Assignment of Leases and Security Deposits in
the form attached as Exhibit E (the " Leases
Assignment ").
5.2.5
A letter in the form attached hereto as
Exhibit F prepared by Purchaser and countersigned by
Seller to each of the vendors under the Terminated Contracts
informing them of the termination of such Terminated Contract as
of the Closing Date (subject to any delay in the effectiveness
of such termination pursuant to the express terms of each
applicable Terminated Contract) (the " Vendor
Terminations ").
5.2.6
A closing statement executed by Seller.
5.2.7
A title affidavit or at Seller's option an
indemnity, as applicable, in the customary form reasonably
acceptable to Seller to enable Title Insurer to delete the
standard exceptions to the title insurance policy set forth in
this Contract (other than matters constituting any Permitted
Exceptions and matters which are to be completed or performed
post-Closing) to be issued pursuant to the Title Commitment.
5.2.8
A certification of Seller's non-foreign status
pursuant to Section 1445 of the Internal Revenue Code of 1986,
as amended.
5.2.9
Resolutions, certificates of good standing, and
such other organizational documents as Title Insurer shall
reasonably require evidencing Seller's authority to consummate
this transaction.
5.2.10
An updated Rent Roll reflecting the information
required in Section 3.5.3 ; provided, however, that the
content of such updated Rent Roll shall in no event expand or
modify the conditions to Purchaser's obligation to close as
specified under Section 8.1 .
5.2.11
Notification letters to all Tenants prepared and
executed by Seller in the form attached hereto as Exhibit
G .
5.3
Purchaser Closing Deliveries .
No later than 1 Business Day prior to the Closing Date
(except for the balance of the Purchase Price which is to be
delivered at the time specified in Section 2.2.4 ),
Purchaser shall deliver to the Escrow Agent (for disbursement to
Seller upon the Closing) the following items with respect to the
Property being conveyed at such Closing:
5.3.1
The full Purchase Price (with credit for the
Deposit), plus or minus the adjustments or prorations required
by this Contract.
5.3.2
A title affidavit (or at Purchaser's option an
indemnity) pertaining to Purchaser's activity on the Property
prior to Closing, in the customary form reasonably acceptable to
Purchaser, to enable Title Insurer to delete the standard
exceptions to the title insurance policy set forth in this
Contract (other than matters constituting any Permitted
Exceptions and matters which are to be completed or performed
post-Closing) to be issued pursuant to the Title Commitment.
5.3.3
Any declaration or other statement which may be
required to be submitted to the local assessor with respect to
the terms of the sale of the Property.
5.3.4
A closing statement executed by Purchaser.
5.3.5
A countersigned counterpart of the General
Ass
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