Exhibit 10.77

PURCHASE AND SALE CONTRACT

BETWEEN

CCIP/3 WILLIAMSBURG MANOR, LLC,
a Delaware limited liability company

AS SELLER

AND

THE EMBASSY GROUP LLC,
a New York limited liability company

AS PURCHASER

 

 

 

 

 

WILLIAMSBURG MANOR APARTMENTS
1248 DONALDSON DRIVE
CARY, NORTH CAROLINA 27511

TABLE OF CONTENTS

 

Page

 

	ARTICLE I			DEFINED TERMS			1
	ARTICLE II			PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT			12
			2.1			Purchase and Sale	12
			2.2			Purchase Price and Deposit	12
			2.3			Escrow Provisions Regarding Deposit	13
	ARTICLE III			FEASIBILITY PERIOD			15
			3.1			Feasibility Period	15
			3.2			Expiration of Feasibility Period	16
			3.3			Conduct of Investigation	17
			3.4			Purchaser Indemnification	18
			3.5			Property Materials	19
			3.6			Property Contracts	21
			3.7			Purchaser’s Financing Contingency	23
	ARTICLE IV			TITLE			24
			4.1			Title Documents	24
			4.2			Survey	25
			4.3			Objection and Response Process	25
			4.4			Permitted Exceptions	26
			4.5			Existing Deed of Trust	27
			4.6			Subsequently Disclosed Exceptions	27
			4.7			Purchaser Financing	28
	ARTICLE V			CLOSING			29
			5.1			Closing Date	29
			5.2			Seller Closing Deliveries	30
			5.3			Purchaser Closing Deliveries	31
			5.4			Closing Prorations and Adjustments	33
			5.5			Post Closing Adjustments	39
	ARTICLE VI			REPRESENTATIONS AND WARRANTIES OF SELLER AND
				PURCHASER			40
			6.1			Seller’s Representations	40
			6.2			AS-IS	42
			6.3			Survival of Seller’s Representations	43
			6.4			Definition of Seller’s Knowledge	44
			6.5			Representations and Warranties of Purchaser	44
	ARTICLE VII			OPERATION OF THE PROPERTY			46
			7.1			Leases and Property Contracts	46
			7.2			General Operation of Property	47
			7.3			Liens	48
	ARTICLE VIII				CONDITIONS PRECEDENT TO CLOSING		48
		8.1				Purchaser’s Conditions to Closing	48
		8.2				Seller’s Conditions to Closing	49
	ARTICLE IX				BROKERAGE		51
		9.1				Indemnity	51
		9.2				Broker Commission	52
		9.3				Broker Signature Page	52
	ARTICLE X				DEFAULTS AND REMEDIES		52
		10.1				Purchaser Default	52
		10.2				Seller Default	53
	ARTICLE XI				RISK OF LOSS OR CASUALTY		55
		11.1				Major Damage	55
		11.2				Minor Damage	55
		11.3				Closing	55
		11.4				Repairs	56
	ARTICLE XII				EMINENT DOMAIN		57
		12.1				Eminent Domain	57
	ARTICLE XIII				MISCELLANEOUS		57
		13.1				Binding Effect of Contract	57
		13.2				Exhibits and Schedules	58
		13.3				Assignability	58
		13.4				Binding Effect	58
		13.5				Captions	58
		13.6				Number and Gender of Words	58
		13.7				Notices	58
		13.8				Governing Law and Venue	62
		13.9				Entire Agreement	62
		13.10				Amendments	62
		13.11				Severability	63
		13.12				Multiple Counterparts/Facsimile Signatures	63
		13.13				Construction	63
		13.14				Confidentiality	63
		13.15				Time of the Essence	64
		13.16				Waiver	64
		13.17				Attorneys’ Fees	64
		13.18				Time Periods	65
		13.19				Intentionally Omitted	65
		13.20				No Personal Liability of Officers, Trustees or Directors of
						Seller’s Partners	65
		13.21				No Exclusive Negotiations	65
		13.22				ADA Disclosure	65
		13.23				No Recording	66
		13.24				Relationship of Parties	66
		13.25				Dispute Resolution	66
		13.26				AIMCO Marks	67
		13.27				Non-Solicitation of Employees	68
		13.28				Survival	68
		13.29				Multiple Purchasers	68
ARTICLE XIV						LEAD-BASED PAINT DISCLOSURE	68
		14.1				Disclosure	68
		14.2				Consent Agreement	69

 

 

 

EXHIBITS AND SCHEDULES

 

 

EXHIBITS

 

Exhibit A	Description of Land
Exhibit B	Form of Special Warranty Deed
Exhibit C	Form of Bill of Sale
Exhibit D	Form of General Assignment
Exhibit E	Form of Assignment of Leases and Security Deposits
Exhibit F	Form of Vendor Termination Notice
Exhibit G	Form of Tenant Notice Letters
Exhibit H	Lead Paint Disclosure

 

 

SCHEDULES

 

Schedule 1	List of Excluded Permits
Schedule 2	Excluded Fixtures and Tangible Personal Property
Schedule 3	List of Materials

 

 

PURCHASE AND SALE CONTRACT

THIS PURCHASE AND SALE CONTRACT (this “ Contract ”) is entered into as of the 14 ^th day of July, 2009 (the “ Effective Date ”), by and between CCIP/3 WILLIAMSBURG MANOR, LLC , a Delaware limited liability company, having an address at c/o AIMCO, 4582 South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237 (“ Seller ”), and THE EMBASSY GROUP LLC , a New York limited liability company, having an address at 3 College Road, Suite 203, Airmont, New York 10952 (“ 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 Wake County, North Carolina, as more particularly described in Exhibit A attached hereto and made a part hereof, and the improvements thereon, commonly known as The Williamsburg Manor Apartments. 

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 I.

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         “ Adjournment Deposit ” shall have the meaning set forth in Section 5.1 .

1.1.4         “ AIMCO ” means the Apartment Investment and Management Company.

1.1.5         “ 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).

1.1.6         “ Broker ” shall have the meaning set forth in Section 9.1 .

1.1.7         “ Business Day ” means any day other than a Saturday or Sunday or Federal holiday or legal holiday in the States of Colorado, New York or North Carolina.

1.1.8         “ 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.

1.1.9         “ Closing Date ” means the date on which the Closing of the conveyance of the Property is required to be held pursuant to Section 5.1 .

1.1.10     “ Code ” shall have the meaning set forth in Section 2.3.6 .

1.1.11     “ Consent Agreement ” shall have the meaning set forth in Section 14.2 .

1.1.12     “ Consultants ” shall have the meaning set forth in Section 3.1 .

1.1.13     “ Damage Notice ” shall have the meaning set forth in Section 11.1 .

1.1.14     “ Deed ” shall have the meaning set forth in Section 5.2.1 .

1.1.15     “ Deed of Trust ” shall have the meaning set forth in ­ Section 4.5 .

1.1.16     “ Deposit ” means, to the extent actually deposited by Purchaser with Escrow Agent, the Initial Deposit and the Additional Deposit.

1.1.17     “ Escrow Agent ” shall have the meaning set forth in Section 2.2.1 .

1.1.18     “ 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 .

1.1.19     “ Existing Survey ” shall have the meaning set forth in Section 4.2 .

1.1.20     “ Feasibility Period ” shall have the meaning set forth in Section 3.1 .

1.1.21     “ FHA ” shall have the meaning set forth in Section 13.22 .

1.1.22     “ Final Response Deadline ” shall have the meaning set forth in Section 4.3 .

1.1.23     “ Financing Contingency Period ” shall have the meaning set forth in Section 3.7 .

1.1.24     “ 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 2 .

1.1.25     “ General Assignment ” shall have the meaning set forth in Section 5.2.3 .

1.1.26     “ Good Funds ” shall have the meaning set forth in Section 2.2.1 .

1.1.27     “ Improvements ” means all buildings and improvements located on the Land taken “as is.”

1.1.28     “ Information Statement ” shall have the meaning set forth in Section 8.2.4 .

1.1.29     “ Initial Deposit ” shall have the meaning set forth in Section 2.2.1 .

1.1.30     “ Land ” means all of those certain tracts of land located in the State of North Carolina described on Exhibit A , and all rights, privileges and appurtenances pertaining thereto.

1.1.31     “ Lease(s) ” means the interest of Seller in and to all leases, subleases and other occupancy contracts, whether or not of record, which provide for the use or occupancy of space or facilities on or relating to the Property and which are in force as of the Closing Date for the applicable Property.

1.1.32     “ Leases Assignment ” shall have the meaning set forth in Section 5.2.4 .

1.1.33     “ Lender ” means New York Life Insurance Company.

1.1.34     “ Loan ” means the indebtedness owing to Lender evidenced by the Note.

1.1.35     “ Loan Payoff ” shall have the meaning set forth in Section 5.4.7 .

1.1.36     “ Losses ” shall have the meaning set forth in Section 3.4.1 .

1.1.37     “ Materials ” shall have the meaning set forth in Section 3.5 .

1.1.38     “ 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 “The Williamsburg Manor Apartments” 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).

1.1.39     “ Mortgage Loan Application ” shall have the meaning set forth in Section 3.7 .

1.1.40     “ New Exception ” shall have the meaning set forth in Section 4.6 .

1.1.41     “ New Exception Review Period ” shall have the meaning set forth in Section 4.6 .

1.1.42     “ Note ” means that certain promissory note executed by Seller and payable to the order of Lender relating to the Loan.

1.1.43     “ Objection Deadline ” shall have the meaning set forth in Section 4.3 .

1.1.44     “ Objection Notice ” shall have the meaning set forth in Section 4.3 .

1.1.45     “ Objections ” shall have the meaning set forth in Section 4.3 .

1.1.46     “ 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.

1.1.47     “ Permitted Exceptions ” shall have the meaning set forth in Section 4.4 .

1.1.48     “ 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.

1.1.49     “ Property ” means (a) the Land and Improvements and all rights of Seller, if any, in and to all of the easements, rights, privileges, and appurtenances belonging or in any way appertaining to the Land and Improvements, (b) the right, if any and only to the extent transferable, of Seller in the Property Contracts, Leases, Permits (other than Excluded Permits), and the Fixtures and Tangible Personal Property, and (c) the Miscellaneous Property Assets owned by Seller which are located on the Property and used in its operation.

1.1.50     “ Property Contracts ” means all contracts, agreements, equipment leases, purchase orders, maintenance or service contracts and similar contracts, excluding Leases, which relate to the ownership, maintenance, construction or repair and/or operation of the Property, but only to the extent assignable by their terms or applicable law (including any contracts that are assignable with the consent of the applicable vendor), and not including (a) any national contracts entered into by Seller, Property Manager, or AIMCO with respect to the Property (i) which terminate automatically upon transfer of the Property by Seller, or (ii) which Seller, in Seller’s sole discretion, elects to terminate with respect to the Property effective as of the Closing Date, or (b) any property management contract for the Property.  Property Contracts shall not include forward or similar long-term contracts to purchase electricity, natural gas, or other utilities.

1.1.51     “ Property Contracts List ” shall have the meaning set forth in Section 3.5.4 .

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     “ Purchaser’s Lender ” shall have the meaning set forth in Section 3.7 .

1.1.57     “ Purchaser’s Loan ” shall have the meaning set forth in Section 3.7 .

1.1.58     “ Records Disposal Notice ” shall have the meaning set forth in Section 5.4.11 .

1.1.59     “ Records Hold Period ” shall have the meaning set forth in Section 5.4.11 .

1.1.60     “ Regional Property Manager ” shall have the meaning set forth in Section 6.4 .

1.1.61     “ Rent-Ready Condition ” shall have the meaning set forth in Section 7.2 .

1.1.62     “ Repairs ” shall have the meaning set forth in Section 11.1 .

1.1.63     “ Report ” shall have the meaning set forth in Section 14.2 .

1.1.64     “ Required Assignment Consent ” shall have the meaning set forth in Section 3.6 .

1.1.65     “ Response Deadline ” shall have the meaning set forth in Section 4.3 .

1.1.66     “ Response Notice ” shall have the meaning set forth in Section 4.3 .

1.1.67     “ SEC ” shall have the meaning set forth in Section 8.2.4.

1.1.68     “ Seller’s Indemnified Parties ” shall have the meaning set forth in Section 3.4.1 .

1.1.69     “ Seller’s Property-Related Files and Records ” shall have the meaning set forth in Section 5.4.11.

1.1.70     “ Seller’s Representations ” shall have the meaning set forth in Section 6.1 .

1.1.71     “ Survey ” shall have the meaning ascribed thereto in Section 4.2 .

1.1.72     “ Survival Period ” shall have the meaning set forth in Section 6.3 .

1.1.73     “ Survival Provisions ” shall have the meaning set forth in Section 13.28 .

1.1.74     “ Tenant ” means any person or entity entitled to occupy any portion of the Property under a Lease.

1.1.75     “ 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.

1.1.76     “ Tenant Notification ” shall have the meaning set forth in Section 5.2.6 .

1.1.77     “ Tenant Security Deposit Balance ” shall have the meaning set forth in Section 5.4.6.2.

1.1.78     “ Tenant Unit ” means each apartment in the Property which is leased by Seller to Tenants in the ordinary course of Seller’s business.

1.1.79     “ Terminated Contracts ” shall have the meaning set forth in Section 3.6 .

1.1.80     “ Testing ” shall have the meaning set forth in Section 14.2 .

1.1.81     “ 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.

1.1.82     “ Title Commitment ” shall have the meaning ascribed thereto in Section 4.1 .

1.1.83     “ Title Documents ” shall have the meaning set forth in Section 4.1 .

1.1.84     “ Title Insurer ” shall have the meaning set forth in Section 2.2.1 .

1.1.85     “ Title Policy ” shall have the meaning set forth in Section 4.1 .

1.1.86     “ Uncollected Rents ” shall have the meaning set forth in Section 5.4.6.1 .

1.1.87     “ Vendor Terminations ” shall have the meaning set forth in Section 5.2.5 .

1.1.88     “ Work ” shall have the meaning set forth in Schedule 4 .

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 $10,350,000 , which amount shall be paid by Purchaser, as follows:

2.2.1    Within two (2) Business Days after the Effective Date, Purchaser shall deliver to First American Title Insurance Company of New York, c/o Linda J. Isaacson, 633 Third Avenue, New York, New York 10017 (“ Escrow Agent ” or “ Title Insurer ”) an initial deposit (the “ Initial Deposi t ”) of $125,000 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    Within one Business Day after the day that the Feasibility Period expires, Purchaser shall deliver to Escrow Agent an additional deposit (the “ Additional Deposit ”) of $125,000 by wire 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 3:00 p.m. (in the time zone in which Escrow Agent is located) on the Closing Date (or such earlier time as required by Seller’s lender).

2.3       Escrow Provisions Regarding Deposit .

2.3.1    Escrow Agent shall hold the Deposit and make delivery of the Deposit to the party entitled thereto under the terms of this Contract.  Escrow Agent shall invest the Deposit in such short-term, high-grade securities, interest-bearing bank accounts, money market funds or accounts, bank certificates of deposit or bank repurchase contracts as Escrow Agent, in its discretion, deems suitable, and all interest and income thereon shall become part of the Deposit and shall be remitted to the party entitled to the Deposit pursuant to this Contract.

2.3.2    Escrow Agent shall hold the Deposit until the earlier occurrence of (i) the Closing Date, at which time the Deposit shall be applied against the Purchase Price, or (ii) the date on which Escrow Agent shall be authorized to disburse the Deposit as set forth in Section 2.3.3 .  The tax identification numbers of the parties shall be furnished to Escrow Agent upon request.

2.3.3    If the Deposit has not been released earlier in accordance with Section 2.3.2 , and either party makes a written demand upon Escrow Agent for payment of the Deposit, Escrow Agent shall give written notice to the other party of such demand.  If Escrow Agent does not receive a written objection from the other party to the proposed payment within five (5) Business Days after the giving of such notice, Escrow Agent is hereby authorized to make such payment (subject to Purchaser’s obligation under Section 3.5.2 to return or certify the destruction of all Third-Party Reports and information and Materials provided to Purchaser as a pre-condition to the return of the Deposit, or the applicable portion thereof, to Purchaser).  If Escrow Agent does receive such written objection within such 5-Business Day period, Escrow Agent shall continue to hold such amount until otherwise directed by written instructions from the parties to this Contract or a final judgment or arbitrator’s decision.  However, Escrow Agent shall have the right at any time to deposit the Deposit and interest thereon, if any, with a court of competent jurisdiction in the state in which the Property is located.  Escrow Agent shall give written notice of such deposit to Seller and Purchaser.  Upon such deposit, Escrow Agent shall be relieved and discharged of all further obligations and responsibilities hereunder.  Any return of the Deposit 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 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.  Escrow Agent shall execute the signature page for Escrow Agent attached hereto, which shall confirm Escrow Agent’s agreement to comply with the terms of Seller’s and Purchaser’s closing instruction letter delivered at Closing and 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 Sections 3.3 and 3.4 and the rights of Tenants under the Leases, from the Effective Date to and including August 4, 2009 (the “ Feasibility Period ”), Purchaser, and its agents, contractors, engineers, surveyors, attorneys, and employees (collectively, “ Consultants ”) shall, at no cost or expense to Seller, 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 no later than 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 Initial Deposit and the Additional Deposit when delivered in accordance with Section 2.2.2 shall be non-refundable except as expressly provided for herein to the contrary and Purchaser’s obligation to purchase the Property shall be non-contingent and unconditional except only for satisfaction of the conditions expressly stated in Section 8.1.

3.3       Conduct of Investigation.

  Purchaser shall not permit any mechanic’s or materialmen’s liens or any other liens to attach to the Property by reason of the performance of any work or the purchase of any materials by Purchaser or any other party in connection with any Inspections conducted by or for Purchaser.  Purchaser shall give notice to Seller a reasonable time prior to entry onto the Property and shall permit Seller to have a representative present during all Inspections conducted at the Property.  Purchaser shall take all reasonable actions and implement all protections necessary to ensure that all actions taken in connection with the investigations and inspections of the Property, and all equipment, materials and substances generated, used or brought onto the Property pose no material threat to the safety of persons or the environment and cause no damage to the Property or other property of Seller or other persons.  All information made available by Seller to Purchaser in accordance with this Contract or obtained by Purchaser in the course of its Inspections shall be treated as confidential information by Purchaser, and, prior to the purchase of the Property by Purchaser, Purchaser shall use 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 transactions 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 or its Consultants 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 (as opposed to the exacerbation 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 commercially reasonable efforts to minimize disruption to Tenants in connection with Purchaser’s or its Consultants’ activities pursuant to this Section.  No consent by the Seller to any such activity shall be deemed to constitute a waiver by Seller or assumption of liability or risk by Seller.  Purchaser hereby agrees to restore, at Purchaser’s sole cost and expense, the Property to the same condition existing immediately prior to Purchaser’s exercise of its rights pursuant to this Article 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 in which the Property is located.  Purchaser shall deliver proof of the insurance coverage required pursuant to this Section 3.4.2 to Seller (in the form of a certificate of insurance) prior to the earlier to occur of (i) Purchaser’s or Purchaser’s Consultants’ entry onto the Property, or (ii) the expiration of five (5) calendar days after the Effective Date.  The provisions of this Section 3.4 shall survive the termination of this Contract, and if not so terminated, the Closing and delivery of the Deed to Purchaser.

3.5       Property Materials .

3.5.1    Within three (3) calendar 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 ) and have not been heretofore provided by Seller to Purchaser, Seller agrees to make the documents set forth on Schedule 3 (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 3-day period, Seller may deliver some or all of the Materials to Purchaser, or make the same available to Purchaser on a secure web site (Purchaser agrees that any item to be delivered by Seller under this Contract shall be deemed delivered to the extent available to Purchaser on such secured web site).  To the extent that Purchaser determines that any of the Materials have not been made available or delivered to Purchaser pursuant to this Section 3.5.1 , Purchaser shall notify Seller and Seller shall use commercially reasonable efforts to deliver the same to Purchaser within three (3) Business Days after such notification is received by 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 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.  Purchaser shall not in any way be entitled to rely upon the accuracy of such information and Materials.  Purchaser recognizes and agrees that the Materials and other documents and information delivered or made available by Seller pursuant to this Contract may not be complete or constitute all of such documents which are in Seller’s possession or control, but are those that are readily available to Seller after reasonable inquiry to ascertain their availability.  Purchaser understands that, although Seller will use commercially reasonable efforts to locate and make available the Materials and other documents required to be delivered or made available by Seller pursuant to this Contract, Purchaser will not rely on such Materials or other documents as being a complete and accurate source of information with respect to the Property, and will instead in all instances rely exclusively on its own Inspections and Consultants with respect to all matters which it deems relevant to its decision to acquire, own and operate the Property.

3.5.3    In addition to the items set forth on Schedule 3, not later than three (3) calendar days after the Effective Date, Seller shall deliver to Purchaser (or otherwise make available to Purchaser as provided under Section 3.5.1) the most recent 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 5.2.11 .

3.5.4    In addition to the items set forth on Schedule 3 , no later than three (3) calendar days after the Effective Date, Seller shall deliver to Purchaser (or otherwise make available to Purchaser as provided under Section 3.5.1 ) a list of all current Property Contracts (the “ Property Contracts List ”).  Seller makes no representations or warranties regarding the Property Contracts List other than the express representations set forth in Section 6.1.8 .   Seller shall update the Property Contracts List in accordance with Section 5.2.12 .

3.5.5    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 on or 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 at Closing, it shall be assumed by Purchaser and not be a Terminated Contract, and (c) to the extent that any such Terminated Contract requires payment of a penalty or premium for cancellation, Purchaser shall be solely responsible for the payment of any such cancellation fees or penalties.  If Purchaser fails to deliver the Property Contracts Notice on or before the expiration of the Feasibility Period, there shall be no Terminated Contracts and Purchaser shall assume all Property Contracts at the Closing.  To the extent that any Property Contract to be assumed by Purchaser (including any Property Contract that, because of advance notice requirements, will be temporarily assumed by Purchaser pending the effective date of termination after the Closing Date) is assignable but requires the applicable vendor to consent to the assignment or assumption of the Property Contract by Seller to Purchaser, then, prior to the Closing, Purchaser shall be responsible for obtaining from each applicable vendor a consent (each a “ Required Assignment Consent ”) to the assignment of the Property Contract by Seller to Purchaser (and the assumption by Purchaser of all obligations under such Property Contract).  Seller agrees to reasonably cooperate, at no material cost to Seller, with Purchaser in obtaining such Required Assignment Consent  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.

3.7       Purchaser’s Financing Contingency.

  The obligations of Purchaser under this Contract are conditioned upon an institutional mortgage lender (“ Purchaser’s Lender ”) agreeing to make a first mortgage loan to Purchaser (“ Purchaser’s Loan ”), which loan shall (i) be in the amount of not more than $7,762,500, (ii) have a fixed interest rate not to exceed seven percent (7.0%), (iii) be secured by a first mortgage on the Property, (iv) not require personal guaranty other than in connection with traditional non-recourse carve-outs and environmental indemnity and (v) otherwise be on such terms and conditions reasonably acceptable to Purchaser.   Purchaser shall (a) make application to Purchaser’s Lender for such first mortgage loan (the “ Mortgage Loan Application ”), (b) furnish accurate and complete information on Purchaser and any guarantor, as required, (c) pay all fees, points and charges required in connection with such application and loan, (d) pursue such application in good faith and with reasonable diligence, (e) cooperate in good faith with Purchaser’s Lender to the end of securing Purchaser’s Loan, and (f) if required by Purchaser’s Lender, cause (x) such person or entity reasonably acceptable to Purchaser’s Lender to execute and deliver a “non-recourse carve-out” guaranty and environmental indemnity in favor of Purchaser’s Lender and (y) such funds to be escrowed for real estate taxes, insurance and replacement reserves in amounts reasonably determined by Purchaser’s Lender for loans on multi-family property in Wake County, North Carolina which are similar in type, age and condition as the Property.   Purchaser acknowledges and agrees that Purchaser is solely responsible for the preparation and submittal of the Mortgage Loan Application, including the collection of all materials, documents, certificates, financials, signatures, and other items required to be submitted to Purchaser’s Lender in connection with the Mortgage Loan Application; provided, however, that Seller agrees to reasonably cooperate with Purchaser to provide information specific to the current operation of the Property to the extent requested by Purchaser’s Lender.  Purchaser shall be responsible at its sole cost and expense for correcting and re-submitting any deficiencies reasonably noted by Purchaser’s Lender in connection with the Mortgage Loan Application no later than three (3) Business Days after notification from Purchaser’s Lender of such deficiency.  Provided that Purchaser’s Lender issues a commitment in accordance with the terms of this Section 3.7, Purchaser shall execute and accept the commitment of Purchaser’s Lender when issued, shall comply with all reasonable requirements of such commitment and shall promptly notify Seller upon Purchaser’s execution of such commitment.   If, notwithstanding Purchaser’s compliance with the provisions of this Section 3.7, Purchaser’s Lender fails to issue a loan commitment in accordance with the terms of this Section 3.7 on or before August 13, 2009 (the “ Financing Contingency Period ”), then Purchaser shall have the right to terminate this Contract by delivering written notice to Seller on or before the expiration of the Financing Contingency Period and the Deposit shall be returned to Purchaser.  Thereafter, this Contract shall be of no further force and effect subject to and except for the Survival Provisions.  If Purchaser fails to deliver to Seller a written notice of termination on or before the expiration of the Financing Contingency Period in accordance with the terms of this Section 3.7, then the Purchaser's right to terminate this Contract under this Section 3.7 shall be permanently waived, this Contract shall remain in full force and effect, and Purchaser shall have no further right to terminate this Contract on account of Purchaser’s inability or failure to obtain Purchaser's Loan.

article IV
TITLE

4.1       Title Documents .

  Purchaser acknowledges that it has received a commitment  (“ Title Commitment ”) for owner’s title insurance issued by Title Insurer and identified as File No. 3020-385501NC43, issued on July 6, 2009, to provide a standard American Land Title Association’s owner’s title insurance policy for the Property, using the customary policy jacket customarily provided by Title Insurer, in an amount equal to the 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 ”).  Seller shall be responsible only for payment of the basic premium for the Title Policy.  Purchaser shall be solely responsible for payment of all other costs relating to procurement of the Title Commitment, the Title Policy, and any requested endorsements.

4.2       Survey .

  Purchaser acknowledges that it has received an existing survey of the Property, dated July 7, 2005, prepared by Triangle Surveyors (the “ Existing Survey ”) from Seller, subject to Section 3.5.2.  Purchaser may, at its sole cost and expense, order a new or updated survey of the Property either before or after the Effective Date (such new or updated survey, together with the Existing Survey, referred to herein as the “ Survey ”).

4.3       Objection and Response Process .

  On or before the date which is ten (10) calendar 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 fifteen (15) calendar 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 (or cause the Title Company to omit as an exception to title insurance coverage or otherwise insure against collection against the Property, provided such insurance is acceptable to Purchaser’s Lender), if any.  Seller shall be entitled to reasonable adjournments of the Closing Date to cure the Objections, but not beyond the expiration of Purchaser’s mortgage loan commitment or rate lock unless Seller agrees to pay for an extension of such commitment or rate lock.  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 or lack of Response Notice, Purchaser may, as its exclusive remedy, elect by written notice given to Seller on or before twenty (20) calendar 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 by giving written notice to that effect to Seller, in which case, the Escrow Agent shall deliver to Purchaser the Initial Deposit (subject to Purchaser’s obligation to deliver all Third-Party Reports and to return all information and Materials provided by Seller to Purchaser, or the destruction of such Materials certified in writing by Purchaser and Seller) in accordance with the terms and conditions of Section 3.2.  If Purchaser fails to give notice to terminate this Contract on or before the Final Response Deadline, Purchaser shall be deemed to have elected to approve and irrevocably waived any objections to any matters covered by the Title Documents or the Survey, 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 (or otherwise resolve) pursuant to the Response Notice under Section 4.3 , (b) mechanics’ liens and taxes due and payable with respect to the period preceding Closing, (c) the standard exception regarding the rights of parties in possession, which shall be limited to those parties in possession pursuant to the Leases, and (d) the standard exception pertaining to taxes, which shall be limited to taxes and assessments payable in the year in which the Closing occurs and subsequent taxes and assessments;

4.4.2    All Leases;

4.4.3    [Intentionally left blank];

4.4.4    Applicable zoning and governmental regulations and ordinances;

4.4.5    Any defects in or objections to title to the Property, or title exceptions or encumbrances, arising by, through or under Purchaser; and

4.4.6    The terms and conditions of this Contract.

4.5       Existing 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 ”) or any other monetary liens voluntarily caused or created by Seller after the Effective Date 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       Subsequently Disclosed Exceptions .

  If at any time after the expiration of the Feasibility Period, any update to the Title Commitment or Survey discloses any additional item that materially adversely affects title to the Property which was not disclosed on any version of the Title Commitment or Survey delivered to Purchaser during the Feasibility Period (the “ New Exception ”), Purchaser shall have a period of five (5) calendar days from the date of its receipt of such update (the “ New Exception Review Period ”) to review and notify Seller in writing of Purchaser's approval or disapproval of the New Exception.  If Purchaser disapproves of the New Exception, Seller may, in Seller's sole discretion, notify Purchaser as to whether it is willing to cure the New Exception.  If Seller elects to cure the New Exception, Seller shall be entitled to reasonable adjournments of the Closing Date to cure the New Exception, but not beyond the expiration of Purchaser’s mortgage loan commitment or rate lock unless Seller agrees to pay for an extension of such commitment or rate lock.  If Seller fails to deliver a notice to Purchaser within three (3) calendar d