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Exhibit
10.15
PURCHASE AND SALE CONTRACT
AMONG
BENT TREE-OXFORD ASSOCIATES LIMITED
PARTNERSHIP,
an Indiana limited partnership,
BENT TREE II-OXFORD ASSOCIATES LIMITED
PARTNERSHIP,
an Indiana limited partnership,
AIMCO BENT TREE III, L.P.,
a Delaware limited partnership,
BROOKWOOD LIMITED PARTNERSHIP,
an Illinois limited partnership,
CHESWICK-OXFORD LIMITED PARTNERSHIP,
an Indiana limited partnership,
AIMCO GREENSPRING, L.P.,
a Delaware limited partnership,
AIMCO WINCHESTER VILLAGE, LLC,
a Delaware limited partnership
AS SELLERS
AND
ARDIZZONE ENTERPRISES, INC.,
an Indiana corporation
AS PURCHASER
ARTICLE I
DEFINED TERMS
1
ARTICLE II
PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT
1
2.1
Purchase and Sale
1
2.2
Purchase Price and Deposit
1
2.3
Escrow Provisions Regarding Deposit
2
ARTICLE III
FEASIBILITY PERIOD
3
3.1
Feasibility Period
3
3.2
Expiration of Feasibility Period
4
3.3
Conduct of Investigation
4
3.4
Purchaser Indemnification
4
3.5
Property Materials
5
3.6
Property Contracts
6
ARTICLE IV
TITLE
7
4.1
Title Documents
7
4.2
Survey
7
4.3
Objection and Response Process
7
4.4
Permitted Exceptions
8
4.5
Existing Deed of Trust
8
4.6
Subsequently Disclosed Exceptions
8
4.7
[Intentionally Omitted.]
9
4.8
Purchaser Financing
9
4.9
Housing Assistance Program (HAP) Voucher Contracts
9
ARTICLE V
CLOSING
9
5.1
Closing Date
9
5.2
Seller Closing Deliveries
10
5.3
Purchaser Closing Deliveries
11
5.4
Closing Prorations and Adjustments
12
5.5
Post Closing Adjustments
17
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER
18
6.1
Seller's Representations
18
6.2
AS-IS
19
6.3
Survival of Seller's Representations
20
6.4
Definition of Seller's Knowledge
20
6.5
Representations and Warranties of Purchaser
20
ARTICLE VII
OPERATION OF THE PROPERTIES
22
7.1
Leases and Property Contracts
22
7.2
General Operation of Property
22
7.3
Liens
22
ARTICLE VIII
CONDITIONS PRECEDENT TO CLOSING
22
8.1
Purchaser's Conditions to Closing
22
8.2
Sellers' Conditions to Closing
24
ARTICLE IX
BROKERAGE
25
9.1
Indemnity
25
9.2
Broker Commission
25
ARTICLE X
DEFAULTS AND REMEDIES
25
10.1
Purchaser Default
25
10.2
Seller Default
26
ARTICLE XI
RISK OF LOSS OR CASUALTY
27
11.1
Major Damage
27
11.2
Minor Damage
27
11.3
Repairs
28
ARTICLE XII
EMINENT DOMAIN
28
12.1
Eminent Domain
28
ARTICLE XIII
MISCELLANEOUS
29
13.1
Binding Effect of Contract
29
13.2
Exhibits and Schedules
29
13.3
Assignability
29
13.4
Captions
29
13.5
Number and Gender of Words
29
13.6
Notices
29
13.7
Governing Law and Venue
32
13.8
Entire Agreement
32
13.9
Amendments
32
13.10
Severability
32
13.11
Multiple Counterparts/Facsimile Signatures
32
13.12
Construction
32
13.13
Confidentiality
32
13.14
Time of the Essence
33
13.15
Waiver
33
13.16
Attorneys Fees
33
13.17
Time Zone/Time Periods
33
13.18
1031 Exchange
33
13.19
No Personal Liability of Officers, Trustees or Directors of
Seller's Partners
34
13.20
No Exclusive Negotiations
34
13.21
ADA Disclosure
34
13.22
No Recording
34
13.23
Relationship of Parties
34
13.24
[Intentionally Omitted.]
34
13.25
AIMCO Marks
34
13.26
Non-Solicitation of Employees
35
13.27
Survival
35
13.28
Multiple Purchasers
35
13.29
Sellers' Several Obligations
35
13.30
Obligation to Close on all Properties
35
ARTICLE XIV
LEAD–BASED PAINT DISCLOSURE
35
14.1
Disclosure
35
14.2
Consent Agreement – Pre-1978 – Not Certified
36
14.3
Consent Agreement – Pre-1978 Certified
36
14.4
Consent Agreement – Pre-1978-LBP, But No LBP Hazards
37
PURCHASE AND SALE CONTRACT
THIS PURCHASE AND SALE CONTRACT
(this " Contract ") is entered into as of the 22
nd day of May, 2008 (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 ARDIZZONE
ENTERPRISES, INC., an Indiana corporation, having a
principal address at 4101 Cashard Avenue, Suite 100,
Indianapolis, IN 46203 (" 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-7 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
Unless otherwise defined herein, any term with
its initial letter capitalized in this Contract shall have the
meaning set forth in Schedule 1 attached hereto
and made a part hereof.
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 payable
by Purchaser as follows:
2.2.1
On the Effective Date, Purchaser shall deliver
to LandAmerica Commercial Services, One Market Plaza, Spear
Street Tower, Suite 1850, San Francisco, California 94105,
Attention: Carol Carozza (" Escrow Agent " or "
Title Insurer ") an initial deposit (the "
Initial Deposit ") of $807,500.00 by wire transfer
of immediately available funds (" Good Funds ").
An amount equal to $209,500.00 of the Initial
Deposit (the " Non-Refundable Initial Deposit
Component ") shall, immediately upon delivery, be
non-refundable under all circumstances other than as provided in
Sections 3.4.2, 4.3, 4.6, 8.1, 8.2, 10.2, 11.1 and 12.1,
or if Purchaser terminates this Contract pursuant to Section
3.2 because hazardous or toxic materials or other substances
regulated by applicable federal or state environmental laws
(collectively " Environmental Laws ") are located
on, in or under a Property in violation of Environmental Laws,
in which event the entire Initial Deposit shall be returned to
Purchaser (the remaining $598,000.00 of the Initial Deposit is
referred to herein as the " Refundable Initial Deposit
Component "). 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 or before the day that the Feasibility Period
expires, Purchaser shall deliver to Escrow Agent an additional
deposit (the " Additional Deposit ") of
$807,500.00 by wire transfer of Good Funds. 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 10:00 a.m. on the Closing
Date.
2.2.5
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 earned thereon shall be for the benefit of
Purchaser, and Purchaser shall be entitled to the same
regardless of who is entitled to the Deposit. Purchaser's
federal tax identification number is 35-1805237.
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 according to its Applicable Share, or released to
Sellers pursuant to Section 10.1 , 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 prior to the Closing Date, Purchaser or
Sellers' Representative makes a written demand upon Escrow Agent
(with a copy to the other party) for payment of the Deposit,
Escrow Agent shall give written notice to the other party of
such demand. If Escrow Agent does not receive a written
objection from the other party to the proposed payment within 5
Business Days after the giving of such notice by Escrow Agent,
Escrow Agent is hereby authorized to make such payment. If
Escrow Agent does receive such written objection within such 5
Business Day period, Escrow Agent shall continue to hold such
amount until otherwise directed by written instructions from the
parties to this Contract or a final judgment or arbitrator's
decision. However, Escrow Agent shall have the right at
any time to deliver 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 Sellers' Representative and Purchaser.
Upon such deposit, Escrow Agent shall be relieved and
discharged of all further obligations and responsibilities
hereunder. Sellers hereby appoint Sellers' Representative
to give and receive notices to Escrow Agent regarding the
Deposit. Any return of the Deposit (less the
Non-Refundable Initial Deposit Component) to Purchaser provided
for in this Contract shall be subject to Purchaser’s
obligations set forth in Section 3.5.2 .
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 solely with
respect to the provisions of 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.
ARTICLE III
FEASIBILITY PERIOD
3.1
Feasibility Period . Subject
to the terms of Section 3.3 and 3.4 and the rights
of Tenants under the Leases, from the Effective Date to and
including May 30, 2008 (the " Feasibility Period
"), Purchaser, and its agents, contractors, engineers,
surveyors, attorneys, and employees (collectively, "
Consultants ") shall, at no cost or expense to any
Seller, have the right from time to time to enter onto the
Properties to conduct and make any and all customary studies,
tests, examinations, inquiries, inspections and investigations
of or concerning the Properties, review the Materials and
otherwise confirm any and all matters which Purchaser may
reasonably desire to confirm with respect to the Properties and
Purchaser’s intended use thereof (collectively, the
“ Inspections ”).
3.2
Expiration of Feasibility Period .
If any of the matters in Section 3.1 or any other
title or survey matters are unsatisfactory to Purchaser for any
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 Sellers'
Representative and Escrow Agent no later than 5:00 p.m. on or
before the date of expiration of the Feasibility Period.
If Purchaser provides such notice, this Contract shall
terminate and be of no further force and effect subject to and
except for the Survival Provisions, and Escrow Agent shall
return the Refundable Initial Deposit Component to Purchaser.
If Purchaser fails to provide Sellers' Representative with
written notice of termination prior to the expiration of the
Feasibility Period, 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 entire Deposit
(including both the Refundable Initial Deposit Component and the
Non-Refundable Initial Deposit Component of the Initial Deposit,
and, when delivered in accordance with Section 2.2.2 ,
the Additional Deposit) shall be non-refundable except as
otherwise provided in Section 2.2.1 , and Purchaser's
obligation to purchase the Properties shall be conditional only
as provided in Section 8.1 .
3.3
Conduct of Investigation .
Purchaser shall not permit any mechanics’ or
materialmens’ 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 reasonable advance notice to the
applicable Seller prior to any 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 Inspections, and all equipment, materials and substances
generated, used or brought onto each Property pose no material
threat to the safety of persons, property or the
environment.
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 acts by Purchaser or
Purchaser’s Consultants with respect to such Property
under this Contract 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 Sellers' Representative's
prior written consent, which consent may be withheld in Sellers'
Representative's reasonable discretion. Further, Sellers'
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
Sellers' 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. If Sellers' Representative
disapproves such invasive testing requested by Purchaser and as
a result Purchaser terminates this Contract pursuant to
Section 3.2 , Purchaser shall be entitled to a refund of
the entire Deposit, including the Non-Refundable Initial Deposit
Component. Purchaser shall use reasonable efforts to
minimize disruption to Tenants in connection with Purchaser's or
its Consultants' activities pursuant to this Section. No
consent by Sellers' 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 III . 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' Representative (in the
form of a certificate of insurance) prior to Purchaser's or
Purchaser's Consultants' entry onto any of the Properties.
3.5
Property Materials .
3.5.1
To the extent the same exist and are in a
Seller's possession or reasonable control (subject to Section
3.5.2 ), each Seller has made the documents set forth on
Schedule 3.5 (together with any other documents or
information provided by Sellers or their agents to Purchaser
with respect to the Property, the " Materials ")
relating to its Property available at its Property for review
and copying by Purchaser at Purchaser's sole cost and expense.
To the extent that Purchaser determines that any of the
Materials have not been made available or delivered to Purchaser
pursuant to this Section 3.5.1 , Purchaser shall notify
the applicable Seller and such Seller shall use commercially
reasonable efforts to deliver the same to Purchaser within 5
Business Days after such notification is received by such
Seller; provided, however, that under no circumstances will the
Feasibility Period be extended and Purchaser's sole remedy will
be to terminate this Contract pursuant to Section 3.2
.
3.5.2
In providing the Materials to Purchaser, other
than Sellers' 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. All
Materials are provided for informational purposes only and,
together with all Third-Party Reports, shall be returned by
Purchaser to all applicable Sellers or the destruction thereof
shall be certified in writing by Purchaser to Sellers'
Representative as a condition to return of the Deposit (less the
Non-Refundable Initial Deposit Component) to Purchaser if this
Contract is terminated for any reason. Recognizing that
the Materials 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 and reasonably available to such Seller,
Purchaser shall not in any way be entitled to rely upon the
completeness or accuracy of the Materials 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 , each Seller has delivered to Purchaser (or
has otherwise make available to Purchaser as provided under
Section 3.5.1 ) the most recent rent roll for the
applicable Property listing the move-in date, monthly base rent
payable, lease expiration date and unapplied security deposit
for each Lease (the " Rent Rolls "). Sellers
make no representations or warranties regarding the Rent Rolls
other than the express representation set forth in Section
6.1.6 .
3.5.4
In addition to the items set forth on
Schedule 3.5 , each Seller has delivered to Purchaser (or
has otherwise make available to Purchaser as provided under
Section 3.5.1 ) a list of all current Property Contracts
for the applicable Property (the " Property Contracts
Lists "). Sellers make no representations or
warranties regarding the Property Contracts Lists other than the
express representations set forth in Section 6.1.7 .
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 on or after Closing shall
be subject to the express terms of such Terminated Contracts,
and (b) if any such Property Contract cannot by its terms be
terminated at Closing, it shall be assumed by Purchaser and not
be a Terminated Contract. To the extent that any such
Terminated Contract requires payment of a penalty or premium for
cancellation, Purchaser and Seller shall agree on which party
shall be responsible for the payment of any such cancellation
fees or penalties on or before the expiration of the Feasibility
Period. If Purchaser and Seller fail to agree on or before the
expiration of the Feasibility Period regarding which party must
pay any such cancellation fees or penalties, and Purchaser does
not terminate this Contract on or before the expiration of the
Feasibility Period, then Purchaser shall be deemed to have
agreed to pay any and all such cancellation fees or penalties.
At Closing, Seller shall terminate any Property Contracts
with any of Seller's Indemnified Parties. 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 assigned to Purchaser requires vendor
consent, then, prior to the Closing, Purchaser may attempt to
obtain from each applicable vendor a consent (each a "
Required Assignment Consent ") to such assignment.
ARTICLE IV
TITLE
4.1
Title Documents . Each
Seller has caused to be delivered to Purchaser a standard form
commitment 2006 version (" Title Commitment ") to
provide a standard American Land Title Association owner’s
title insurance policy for such Seller's Property, using the
current policy jacket customarily provided by the Title Insurer,
in an amount equal to that Property's Purchase Price (the "
Title Policy "), 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, and the cost, if any, for deletion of the standard
pre-printed exceptions. 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.
4.2
Survey . Subject to
Section 3.5.2 , each Seller has delivered to Purchaser or
has made available at such Seller's Property any existing survey
of such Property (each, an " Existing Survey ").
Purchaser shall, at its sole cost and expense, order a new
or updated survey for each Property promptly following receipt
of the Title Commitment for each Property (each such new or
updated survey, together with each Existing Survey, is referred
to herein as a " Survey ").
4.3
Objection and Response Process .
On or before the date which is 1 Business Day after the
Effective Date (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 2 Business Days after the Effective Date (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;
provided, however, that each Seller shall be obligated to cure
any prior mortgage liens, mechanics liens and judgment liens of
a specific and ascertainable amount created by such Seller by
causing the Title Insurer to either delete or insure over such
liens in the Title Policy. 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 or lack of any Response
Notice, Purchaser may, as its exclusive remedy, exercise its
right to terminate this Contract prior to the expiration of the
Feasibility Period in accordance with the provisions of
Section 3.2 ; provided, however, that in such event
Purchaser shall be entitled to a return of the entire Initial
Deposit (and not just the Refundable Initial Deposit Component).
If Purchaser fails to timely exercise such right,
Purchaser shall be deemed to accept the Title Documents and
Survey with resolution, if any, of the Objections 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.
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
non-delinquent 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
Applicable zoning and governmental regulations
and ordinances; and
4.4.5
Any defects in or objections to title to such
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, any deeds of trust and/or mortgages which
secure a Note for a 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 be paid off, satisfied, discharged and/or
cured from proceeds of the Purchase Price at Closing.
4.6
Subsequently Disclosed Exceptions
. If at any time after the expiration of the Feasibility
Period, an update to any Title Commitment discloses any
additional item that materially adversely affects title to the
applicable Property which was not disclosed on any version of
the Title Commitment delivered to Purchaser during the
Feasibility Period (the " New Exception "),
Purchaser shall have a period of 5 days from the date of its
receipt of such update (the " New Exception Review
Period ") to review and notify the applicable Seller in
writing of Purchaser's approval or disapproval of the New
Exception. If Purchaser disapproves of the New Exception,
the applicable Seller may, in that Seller's sole discretion,
notify Purchaser as to whether it is willing to cure the New
Exception. If such Seller elects to cure the New
Exception, that Seller shall be entitled to reasonable
adjournments of the Closing Date to cure the New Exception.
If such Seller fails to deliver a notice to Purchaser
within 3 days after the expiration of the New Exception Review
Period, that Seller shall be deemed to have elected not to cure
the New Exception. If Purchaser is dissatisfied with such
Seller's response, or lack thereof, Purchaser may, as its
exclusive remedy elect either: (i) to terminate this
Contract by notice to Sellers' Representative, in which event
the Deposit (including the Non-Refundable Initial Deposit
Component), shall be promptly returned to Purchaser or (ii) to
waive the New Exception and proceed with the transactions
contemplated by this Contract, in which event Purchaser shall be
deemed to have approved the New Exception. If Purchaser
fails to notify the Sellers' Representative of its election to
terminate this Contract in accordance with the foregoing clause
within 6 days after the expiration of the New Exception Review
Period, Purchaser shall be deemed to have elected to approve and
irrevocably waive any objections to the New Exception.
4.7
[Intentionally Omitted.]
4.8
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.
4.9
Housing Assistance Program (HAP) Voucher
Contracts .
4.9.1
HAP Voucher Contract Materials .
Purchaser recognizes and agrees that the HAP
Properties presently are benefited by HAP Voucher Contracts.
Each applicable HAP Seller has made 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 each of the HAP Voucher Contracts which
are in such HAP Seller's possession or reasonable control
(subject to Section 3.5.2).
4.9.2
New HAP Voucher Contracts .
Purchaser agrees that, at the Closing, Purchaser shall
accept title to the HAP Properties subject to all terms,
conditions and requirements of the Housing Authority.
Purchaser acknowledges that each of the HAP Voucher
Contracts requires the satisfaction by Purchaser of certain
requirements as set forth therein and established by the
applicable Housing Authority. Purchaser further
acknowledges that within 30 days after the Closing Date,
Purchaser shall at its sole cost and expense, meet with the
Housing Authority to both terminate the existing HAP Voucher
Contracts and enter into replacement HAP Voucher Contracts which
are acceptable to the applicable Housing Authority. In
connection with the foregoing, 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.
Within 30 days after the Closing Date, Purchaser shall
provide written evidence to each applicable HAP Seller that the
existing HAP Voucher Contracts have been terminated and that the
replacement HAP Voucher Contracts have been entered into between
the Housing Authority and Purchaser.
ARTICLE V
CLOSING
5.1
Closing Date . Subject to
the conditions precedent under Article VIII, the Closing shall
occur on June 25, 2008 (the " Closing Date ")
through an escrow with Escrow Agent, whereby the Sellers,
Purchaser and their attorneys need not be physically present at
the Closing and may deliver documents by overnight air courier
or other means. Notwithstanding the foregoing to the
contrary, any Seller shall have the option, by delivering
written notice to Purchaser, to extend the Closing Date to the
last Business Day of the month in which the Closing Date
otherwise would occur pursuant to the preceding sentence, in
connection with any Seller's payment in full of its Note (the "
Loan Payoff "), and the exercise of such option
shall extend the Closing Date for all Properties. Further,
the Closing Date may be extended without penalty at the option
of any Seller to a date not later than 45 days following the
Closing Date specified in the first sentence of this paragraph
above (or, if applicable, as extended by any Seller pursuant to
the second sentence of this paragraph). Provided that
Purchaser is not in default under the terms of this Contract,
Purchaser shall be permitted a one-time 15 - day
extension of the Closing Date specified in the first sentence of
this Section 5.1 by (i) delivering written notice to
Sellers' Representative no later than five (5) days prior to the
scheduled Closing Date, and (ii) simultaneously with such notice
to Sellers' Representative, delivering to Escrow Agent the
amount of $607,000.00, which amount when received by Escrow
Agent shall be added to the Deposit hereunder and allocated
among the Sellers of the Properties pursuant to the Applicable
Share attributable to each of their respective Properties, shall
be non-refundable (except as otherwise expressly provided herein
with respect to the Deposit), and shall be held, credited and
disbursed in the same manner as provided hereunder with respect
to the Deposit.
5.2
Seller Closing Deliveries .
No later than 1 Business Day prior to the Closing Date,
each Seller shall, with respect to each Property to be conveyed
by such Seller hereunder, deliver to Escrow Agent, each of the
following items:
5.2.1
Limited Warranty Deed (the " Deed
") in the form attached as Exhibit B-1 to
Purchaser, or for any Property to which title vested in Seller
pursuant to a quit claim deed (or other form of deed without
warranties), provided Title Insurer is willing to insure the
Purchaser for such Property, a quit claim deed from Seller to
Purchaser in the form attached as Exhibit B-2 , in
each case 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 and addressed by Purchaser
and countersigned by such Seller to each of the vendors under
the Terminated Contracts informing them of the termination of
such Terminated Contract as of the Closing Date (subject to any
delay in the effectiveness of such termination pursuant to the
express terms of each applicable Terminated Contract) (the "
Vendor Terminations ").
5.2.6
The applicable Seller’s closing
statement.
5.2.7
A title affidavit or an indemnity form
reasonably acceptable to such Seller, which is sufficient to
enable Title Insurer to delete the standard pre-printed
exceptions to the title insurance policy to be issued pursuant
to the Title Commitment.
5.2.8
A certification of such 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 such Seller's authority to
consummate this transaction.
5.2.10
Updated Rent Rolls from each Seller effective as
of a date no more than 3 Business Days prior to the Closing
Date, in both hard copy and in each Seller's electronic format;
provided, however, that the content of such updated Rent Rolls
shall in no event expand or modify the conditions to Purchaser's
obligation to close as specified under Section 8.1 .
5.2.11
Updated Property Contracts Lists from each
Seller effective as of a date no more than 3 Business Days prior
to the Closing Date; provided, however, that the content of such
updated Property Contracts Lists shall in no event expand or
modify the conditions to Purchaser's obligation to close as
specified under Section 8.1 .
5.2.12
[Intentionally omitted.]
5.2.13
A Sales Information Disclosure Form in the form
promulgated by the Indiana Department of Revenue executed by
each Seller.
5.2.14
Notification letters to all Tenants at such
Property prepared by Purchaser in the form attached hereto as
Exhibit G and executed by each applicable
Seller.
5.3
Purchaser Closing Deliveries .
No later than 1 Business Day prior to the Closing Date
(except for the balance of the Purchase Price which is to be
delivered at the time specified in Section 2.2.4 ),
Purchaser shall deliver to the Escrow Agent (for disbursement to
the applicable Seller upon the Closing) the following items with
respect to each Property being conveyed at the Closing:
5.3.1
The full Purchase Price for such Property (with
credit for the Applicable Share of the Deposit), plus or minus
the adjustments or prorations required by this Contract.
5.3.2
If required by the Title Insurer, a title
affidavit or an indemnity form (pertaining to Purchaser's
activity on the applicable Property under this Contract prior to
Closing), reasonably acceptable to Purchaser, which is
sufficient to enable Title Insurer to delete the standard
pre-printed exceptions to the title insurance policy 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.
5.3.4
Purchaser’s closing statement.
5.3.5
A countersigned counterpart of the General
Assignment.
5.3.6
A countersigned counterpart of the Leases
Assignment.
5.3.7
A countersigned counterpart of the notification
letters to all Tenants at such Property prepared and executed by
Purchaser in the form attached hereto as
Exhibit G .
5.3.8
The Vendor Terminations.
5.3.9
Any cancellation fees or penalties due to any
vendor under any Terminated Contract as a result of the
termination thereof.
5.3.10
Resolutions, certificates of good standing, and
such other organizational documents as Title Insurer shall
reasonably require evidencing Purchaser's authority to
consummate this transaction.
5.3.11
[Intentionally Omitted.]
5.3.12
[Intentionally omitted.]
5.3.13
[Intentionally omitted.]
5.3.14
A Sales Information Disclosure Form in the form
promulgated by the Indiana Department of Revenue executed by
Purchaser.
5.4
Closing Prorations and Adjustments
. The prorations set forth in this Section 5.4
shall be on a Property-by-Property basis and not among, or
between, Properties, and shall not be allocated on an Applicable
Share basis.
5.4.1
General . With respect to
each Property, all normal and customarily proratable items,
including, without limitation, collected rents, operating
expenses, personal property taxes, other operating expenses and
fees, shall be prorated as of the Closing Date, the applicable
Seller being charged or credited, as appropriate, for all of the
same attributable to the period up to the Closing Date (and
credited for any amounts paid by the applicable Seller
attributable to the period on or after the Closing Date, if
assumed by Purchaser) and Purchaser being responsible for, and
credited or charged, as the case may be, for all of the same
attributable to the period on and after the Closing Date.
Each Seller shall prepare and submit to Purchaser a
proration schedule (the " Proration Schedule ") of
the adjustments described in this Section 5.4 at least 3
Business Days prior to Closing.
5.4.2
Operating Expenses . With
respect to each Property, all of the operating, maintenance,
taxes (other than real estate taxes), and other expenses
incurred in operating such Property that such Seller customarily
pays, and any other costs incurred in the ordinary course of
business for the management and operation of such Property,
shall be prorated on an accrual basis. Each Seller shall
pay all such expenses that accrue prior to the Closing Date and
Purchaser shall pay all such expenses that accrue from and after
the Closing Date.
5.4.3
Utilities . With respect to
each Property, the final readings and final billings for
utilities will be made if possible as of the Closing Date, in
which case each Seller shall pay all such bills as of the
Closing Date and no proration shall be made at the Closing with
respect to utility bills. Otherwise, a proration shall be
made based upon the parties' reasonable good faith estimate.
Each Seller shall be entitled to the return of any
deposit(s) posted by it with any utility company, and such
Seller shall notify each utility company serving its Property to
terminate its account, effective as of noon on the Closing
Date.
5.4.4
Real Estate Taxes .
5.4.4.1
Purchaser and Sellers acknowledge and agree that
Sellers have paid the Property Taxes (as hereinafter defined)
due for Tax Year 2005 and Tax Year 2006, and that the Property
Taxes have not yet been assessed, nor paid, for Tax Year 2007
and Tax Year 2008. Sellers shall be responsible for (i)
paying any Property Tax reassessment for Tax Year 2006, and (ii)
the payment of the Property Taxes for Tax Year 2007. With
respect to Tax Year 2008, Purchaser will assume and agree to be
responsible for the Property Taxes as shall be allocable for the
period on and after the Closing; and Sellers shall be
responsible for the Property Taxes as shall be allocable for the
period up to the Closing. To the extent required by Escrow
Agent, to insure title in Purchaser to all of the Properties
free and clear of any lien for Property Taxes for Tax Year,
2005, Tax Year 2006, Tax Year 2007, and for the period prior to
Closing for Tax Year 2008, Sellers shall escrow the estimated
reassessment of Property Taxes for Tax Year 2006 and the
estimated Property Taxes for Tax Year 2007, and Sellers'
allocable share of the estimated Property Taxes for Tax Year
2008, pursuant to an escrow agreement to be agreed upon by
Sellers, Purchaser and Escrow Agent prior to the expiration of
the Feasibility Period.
5.4.5
Property Contracts .
Purchaser shall assume at Closing the obligations under
the Property Contracts assumed by Purchaser; however, operating
expenses shall be prorated under Section 5.4.2 .
5.4.6
Leases .
5.4.6.1
With respect to each Property, all collected
rent (whether fixed monthly rentals, additional rentals,
escalation rentals, retroactive rentals, operating cost
pass-throughs or other sums and charges payable by Tenants under
the Leases), income and expenses from any portion of a Property
shall be prorated as of the Closing Date. Purchaser shall
receive all collected rent and income attributable to dates from
and after the Closing Date. Each Seller shall receive all
collected rent and income attributable to dates prior to the
Closing Date. Notwithstanding the foregoing, no prorations
shall be made in relation to either (a) non-delinquent rents
which have not been collected as of the Closing Date, or (b)
delinquent rents existing, if any, as of the Closing Date (the
foregoing (a) and (b) referred to herein as the "
Uncollected Rents "). In adjusting for
Uncollected Rents, no adjustments shall be made in a Seller's
favor for rents which have accrued and are unpaid as of the
Closing, but Purchaser shall pay to such Seller such accrued
Uncollected Rents as and when collected by Purchaser.
Purchaser agrees to bill Tenants of the Properties for all
Uncollected Rents and to take reasonable actions to collect
Uncollected Rents. Notwithstanding the foregoing,
Purchaser's obligation to collect Uncollected Rents shall be
limited to Uncollected Rents of not more than 90 days past due,
and Purchaser's collection of rents shall be applied, first,
towards current rent due and owing under the Leases, and,
second, to Uncollected Rents. After the Closing, each
Seller shall continue to have the right, but not the obligation,
in its own name, to demand payment of and to collect Uncollected
Rents owed to such Seller by any Tenant, which right shall
include, without limitation, the right to continue or commence
legal actions or proceedings against any Tenant and the delivery
of the Leases Assignment shall not constitute a waiver by any
Seller of such right; provided however, that the foregoing right
of each Seller shall be limited to actions seeking monetary
damages and, in no event, shall any Seller seek to evict any
Tenants in any action to collect Uncollected Rents.
Purchaser agrees to cooperate with each Seller in
connection with all efforts by such Seller to collect such
Uncollected Rents and to take all steps, whether before or after
the Closing Date, as may be necessary to carry out the intention
of the foregoing, including, without limitation, the delivery to
each Seller, within 7 days after a written request, of any
relevant books and records (including, without limitation, rent
statements, receipted bills and copies of tenant checks used in
payment of such rent), the execution of any and all consents or
other documents, and the undertaking of any act reasonably
necessary for the collection of such Uncollected Rents by such
Seller; provided, however, that Purchaser's obligation to
cooperate with a Seller pursuant to this sentence shall not
obligate Purchaser to terminate any Tenant Lease with an
existing Tenant or evict any existing Tenant from a
Property.
5.4.6.2
At Closing, with respect to each Property,
Purchaser shall receive a credit against the applicable Purchase
Price in an amount equal to the received and unapplied balance
of all cash (or cash equivalent) Tenant Deposits, including, but
not limited to, security, damage or other refundable deposits
paid by any of the Tenants to secure their respective
obligations under the Leases, together, in all cases, with any
interest payable to the Tenants thereunder as may be required by
their respective Tenant Lease or state law (the " Tenant
Security Deposit Balance "). Any cash (or cash
equivalents) held by a Seller which constitutes the Tenant
Security Deposit Balance shall be retained by the applicable
Seller in exchange for the foregoing credit against the
applicable Purchase Price and shall not be transferred by such
Seller pursuant to this Contract (or any of the documents
delivered at Closing), but the obligation with respect to the
Tenant Security Deposit Balance nonetheless shall be assumed by
Purchaser. The Tenant Security Deposit Balance shall not
include any non-refundable deposits or fees paid by Tenants to
any Seller, either pursuant to the Leases or otherwise.
5.4.7
Loan Payoff . On the Closing
Date, a sufficient amount of the proceeds of the Purchase Price
will be used to pay the outstanding principal balance of each
applicable Note together with all interest accrued under such
Note(s) prior to the Closing Date. Any existing reserves,
impounds and other accounts maintained in connection with each
applicable Loan shall be released in Good Funds to the
applicable Seller unless credited by the Lender against the
amount due under the Note.
5.4.8
Insurance . No proration
shall be made in relation to insurance premiums and insurance
policies will not be assigned to Purchaser. Seller shall
have the risk of loss of the Properties until 11:59 p.m. the day
prior to the Closing Date, after which time the risk of loss
shall pass to Purchaser and Purchaser shall be responsible for
obtaining its own insurance thereafter.
5.4.9
Employees . Each Seller and
such Seller's manager's and on-site employees for all Properties
shall have their employment at the applicable Property
terminated as of the Closing Date, and each Seller shall be
liable for all vacation, compensation and other benefits of such
Seller's employees.
5.4.10
Closing Costs . With respect
to each Property, Purchaser shall pay any fees required to
be paid by Purchaser with respect to the applicable Title Policy
pursuant to Section 4.1 , and one-half of the customary
closing costs of the Escrow Agent. Each Seller shall pay
any sales, use, gross receipts or similar taxes with respect to
such Seller's Property, the base premium for its Title Policy,
the cost, if any, to delete the standard pre-printed exceptions,
one-half of the customary closing costs of the Escrow Agent, the
cost of recording any instruments required to discharge any
liens or encumbrances against such Property, and any transfer
taxes.
5.4.11
[Intentionally Omitted.]
5.4.12
Possession . Possession of
each Property, subject to the Leases, Property Contracts, other
than Terminated Contracts, and Permitted Exceptions, shall be
delivered to Purchaser at the Closing upon release from escrow
of all items to be delivered by Purchaser pursuant to Section
5.3 . To the extent reasonably available to each
Seller, originals or copies of its Leases and Property
Contracts, lease files, warranties, guaranties, plans and
specifications, operating manuals, keys to the property, and
such Seller's books and records relating to its Property to be
conveyed by such Seller (other than proprietary information)
(collectively, " Seller's Property-Related Files and
Records ") regarding the applicable Property shall be
made available to Purchaser at such Property after the Closing.
Purchaser agrees, for a period of not less than 3 years
after the Closing (the " Records Hold Period "),
to (a) provide and allow the applicable Seller reasonable access
to Seller's Property-Related Files and Records for purposes of
inspection and copying thereof, and (b) reasonably maintain and
preserve Seller's Property-Related Files and Records. If
at any time after the Records Hold Period, Purchaser desires to
dispose of any Seller's Property-Related Files and Records,
Purchaser must first provide the applicable Seller prior written
notice (the " Records Disposal Notice ").
Such Seller shall have a period of 30 days after receipt
of the Records Disposal Notice to enter the applicable Property
(or such other location where such records are then stored) and
remove or copy those of Seller's Property-Related Files and
Records that such Seller desires to retain.
5.4.13
Tax Appeals . Purchaser
acknowledges that the Tax Appeal Sellers have filed appeals or
may in the future file appeals (each, an " Appeal
") with respect to real estate ad valorem or other similar
property taxes applicable to the Tax Appeal Properties (the "
Property Taxes ").
5.4.13.1
If such Appeal relates to or affects the
Property Taxes for any Tax Year (defined below) prior to the Tax
Year in which the Closing occurs, each Tax Appeal Seller shall
be entitled, in such Tax Appeal Seller's sole discretion, to
pursue such Appeal after the Closing Date, and, in
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