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PURCHASE AND SALE CONTRACT

Purchase and Sale Agreement

PURCHASE AND SALE CONTRACT | Document Parties: CONSOLIDATED CAPITAL PROPERTIES IV | AIMCO HILLMEADE, LLC | AMBASSADOR VII, LP | BRANDERMILL-OXFORD ASSOCIATES LIMITED PARTNERSHIP | HERMITAGE, LLC | OXFORD-COLUMBIA ASSOCIATES | SHELTER PROPERTIES II LIMITED PARTNERSHIP | ST MARY'S OXFORD ASSOCIATES LIMITED PARTNERSHIP | STANDARD PORTFOLIOS LLC You are currently viewing:
This Purchase and Sale Agreement involves

CONSOLIDATED CAPITAL PROPERTIES IV | AIMCO HILLMEADE, LLC | AMBASSADOR VII, LP | BRANDERMILL-OXFORD ASSOCIATES LIMITED PARTNERSHIP | HERMITAGE, LLC | OXFORD-COLUMBIA ASSOCIATES | SHELTER PROPERTIES II LIMITED PARTNERSHIP | ST MARY'S OXFORD ASSOCIATES LIMITED PARTNERSHIP | STANDARD PORTFOLIOS LLC

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Title: PURCHASE AND SALE CONTRACT
Date: 10/1/2009
Law Firm: Bryan Cave    

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Exhibit 10.151

PURCHASE AND SALE CONTRACT

AMONG

CCP IV ARBOURS OF HERMITAGE, LLC,

OXFORD-COLUMBIA ASSOCIATES, A MARYLAND LIMITED PARTNERSHIP

AIMCO HILLMEADE, LLC,

BRANDERMILL-OXFORD ASSOCIATES LIMITED PARTNERSHIP,

LAZY HOLLOW PARTNERS,

SHELTER PROPERTIES II LIMITED PARTNERSHIP,

AMBASSADOR VII, L.P.,

WOODS OF INVERNESS CPF 16, L.P. and

ST. MARY’S OXFORD ASSOCIATES LIMITED PARTNERSHIP

 

AS SELLERS

AND

Standard Portfolios LLC ,

a Delaware limited liability company

 

AS PURCHASER


TABLE OF CONTENTS

Page

 

 

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

4

 

3.1

Feasibility Period

4

 

3.2

Expiration of Feasibility Period

5

 

3.3

Conduct of Investigation

5

 

3.4

Purchaser Indemnification

5

 

3.5

Property Materials

7

 

3.6

Property Contracts

8

 

ARTICLE IV

TITLE

9

 

4.1

Title Documents

9

 

4.2

Survey

10

 

4.3

Objection and Response Process/Permitted Exceptions

10

 

4.4

Subsequently Disclosed Exceptions

11

 

4.5

Existing Deed of Trust or Mortgage

12

 

4.6

Assumed Loans

12

 

4.7

Purchaser’s Financing Contingency

15

 

4.8

AIMCO Loan

16

 

4.9

Purchaser Financing

19

 

4.10

Housing Assistance Program Vouchers

19

 

4.11

HUD Approval

19

 

ARTICLE V

CLOSING

25

 

5.1

Closing Date

25

 

5.2

Seller Closing Deliveries

26

 

5.3

Purchaser Closing Deliveries

28

 

5.4

Closing Prorations and Adjustments

29

 

5.5

Post Closing Adjustments

35

 

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF SELLER AND

 

 

 

PURCHASER

35

 

6.1

Seller’s Representations

35

 

6.2

AS-IS

37

 

6.3

Survival of Seller’s Representations

39

 

6.4

Definition of Seller’s Knowledge

39

 

6.5

Representations and Warranties of Purchaser

39

 

ARTICLE VII

OPERATION OF THE PROPERTY

42

 

7.1

Leases and Property Contracts

42

 

7.2

General Operation of Property

42

 

7.3

Liens and Title Defects

42

 

7.4

Tax Appeals

43

 

7.5

Westway Village Repair Work

44

 

ARTICLE VIII

CONDITIONS PRECEDENT TO CLOSING

45

 

8.1

Purchaser’s Conditions to Closing

45

 

8.2

Seller’s Conditions to Closing

46

 

ARTICLE IX

BROKERAGE

47

 

9.1

Indemnity

47

 

9.2

Broker Commission

48

 

9.3

Texas Real Estate License Act

48

 

ARTICLE X

DEFAULTS AND REMEDIES

48

 

10.1

Purchaser Default

48

 

10.2

Seller Default

49

 

ARTICLE XI

RISK OF LOSS OR CASUALTY

50

 

11.1

Major Damage

50

 

11.2

Minor Damage

50

 

11.3

Closing

51

 

11.4

Repairs

51

 

ARTICLE XII

EMINENT DOMAIN

51

 

12.1

Eminent Domain

51

 

ARTICLE XIII

MISCELLANEOUS

52

 

13.1

Binding Effect of Contract

52

 

13.2

Exhibits and Schedules

52

 

13.3

Assignability

52

 

13.4

Captions

52

 

13.5

Number and Gender of Words

52

 

13.6

Notices

52

 

13.7

Governing Law and Venue

55

 

13.8

Entire Agreement

55

 

13.9

Amendments

55

 

13.10

Severability

55

 

13.11

Multiple Counterparts/Facsimile Signatures

55

 

13.12

Construction

56

 

13.13

Confidentiality

56

 

13.14

Time of the Essence

56

 

13.15

Waiver

56

 

13.16

Attorneys’ Fees

56

 

13.17

Time Zone/Time Periods

57

 

13.18

1031 Exchange

57

 

13.19

No Personal Liability of Officers, Trustees or Directors of

 

 

 

Seller’s Partners

57

 

13.20

No Exclusive Negotiations

57

 

13.21

ADA Disclosure

58

 

13.22

No Recording

58

 

13.23

Relationship of Parties

58

 

13.24

Dispute Resolution

58

 

13.25

AIMCO Marks

59

 

13.26

Non-Solicitation of Employees

59

 

13.27

Survival

59

 

13.28

Multiple Purchasers

59

 

13.29

Sellers’ Several Obligations

59

 

13.30

Obligation to Close on all Properties

60

 

13.31

Texas Statutory Utility District Notice for the Woods of

60

 

 

Inverness Property

60

 

13.32

Maryland Critical Area Notice

61

 

13.33

Effect of Partial Termination of Contract

62

ARTICLE XIV

LEAD-BASED PAINT DISCLOSURE

62

 

14.1

Disclosure

62

 

14.2

Consent Agreement

63

 

 


 EXHIBITS AND SCHEDULES

 

EXHIBITS

 

Exhibit A-1 - A-9         Description of Land

Exhibit B-1                   Form of MD Deed

Exhibit B-2                   Form of TN Deed

Exhibit B-3                   Form of TX Deed

Exhibit B-4                   Form of VA Deed

Exhibit C                      Form of Bill of Sale

Exhibit D                      Form of General Assignment

Exhibit E                       Form of Lease Assignment

Exhibit F                       Form of Vendor Terminations

Exhibit G                      Form of Tenant Notice Letters

Exhibit H                      Lead Paint Disclosure

Exhibit I                        AIMCO Loan Note

Exhibit J                       AIMCO Loan Security Instrument

Exhibit K                      AIMCO Loan Assignment of Lease and Rents

Exhibit L                       AIMCO Loan Non-Recourse Carveout Guaranty

Exhibit M                     AIMCO Loan Environmental Indemnity Agreement

Exhibit N                      Intentionally Omitted

Exhibit O                      Assignment of HAP Contract

 

SCHEDULES

 

Schedule 1                   Seller Information Schedule

Schedule 2                   Defined Terms

Schedule 3                   Excluded Fixtures and Tangible Personal Property

Schedule 4                   List of Materials

 

 


PURCHASE AND SALE CONTRACT

THIS PURCHASE AND SALE CONTRACT (this “ Contract ”) is entered into as of the 25 th day of September, 2009 (the “ Effective Date ”), by the selling parties identified on Schedule 1 (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 Standard Portfolios LLC , a Delaware limited liability company, having an address c/o Grant, Genovese & Baratta, LLP, Attention: Michael J. Genovese, 2030 Main Street, Suite 1600, Irvine, California 92614 (“ 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-9 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 this Schedule 2 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      Concurrently with the execution of this Contract, Purchaser shall deliver to Stewart Title Guaranty Company, c/o Wendy Howell, National Commercial Closing Specialist, 1980 Post Oak Boulevard, Suite 610, Houston, TX 77056, (tel) 800-729-1906, (fax) (713) 552-1703 (“ Escrow Agent ” or “ Title Insurer ”) an initial deposit (the “ Initial Deposit ”) of Two Million Five Hundred Thousand  Dollars ($2,500,000.00) by wire transfer of immediately available funds (“ Good Funds ”).   The Allocated Initial Deposit Amount for each Property is set forth in the Seller Information Schedule.  Further, Sellers and Purchaser agree that the amount of One Hundred Dollars ($100.00) (the " Independent Contract Consideration ") has been paid by Purchaser to Seller concurrently with the deposit into escrow of the Initial Deposit, as consideration for Sellers' execution and delivery of this Contract and for Purchaser's rights of review, inspection and termination set forth herein.  The Independent Contract Consideration is independent of any other consideration or payment provided for in this Contract and, notwithstanding anything to the contrary herein, is non-refundable in all events whatsoever.

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 Seven Hundred Thousand  Dollars ($700,000.00) by wire transfer of Good Funds.  The Allocated Additional Deposit Amount for each Property is set forth in the Seller Information Schedule.

2.2.3      Provided that the Loan Assumption and Release has occurred for a particular Assumption Property, then at the Closing Purchaser shall, with respect to such Assumption Property, receive a credit against the Purchase Price for such Assumption Property in the amount of the outstanding principal balance of the Note applicable to such Assumption Property, together with all accrued but unpaid interest (if any) thereon, as of the Closing Date (the " Loan Balance ").

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 1:00 p.m. on the Closing Date applicable to each such Property or at such earlier time if required by the Seller’s lender for the applicable Property.

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 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 Allocated Deposit Amount for each Property until the earlier to occur of (i) the date on which Purchaser terminates this Contract in accordance with the terms of Section 3.2 hereof, (ii) the Closing Date for the applicable Property, at which time, the Allocated Deposit Amount for such Property shall be applied against the Purchase Price for such Property or (iii) the date on which Escrow Agent shall be authorized to disburse such Allocated Deposit Amount for such Property in accordance with the terms hereof.  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 for payment of the Deposit or any part thereof, Escrow Agent shall give written notice to the other parties of such demand.  If Escrow Agent does not receive a written objection from another party to the proposed payment within ten (10) days after the giving of such notice, Escrow Agent is hereby authorized to make such payment.  If Escrow Agent does receive such written objection within such ten (10) 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 (or the portion thereof in question, as the case may be) and interest thereon, if any, with a court of competent jurisdiction in the state or commonwealth 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 with respect to the Deposit (or the portion thereof so deposited into court, as the case may be).  Sellers hereby appoint Sellers' Representative to give and receive notices to Escrow Agent regarding the Deposit.

2.3.4      The parties acknowledge that Escrow Agent is acting solely as a stakeholder at their request and for their convenience, and that Escrow Agent shall not be deemed to be the agent of any of the parties for any act or omission on its part unless taken or suffered in bad faith in willful disregard of this Contract or involving gross negligence.  Sellers and Purchaser jointly and severally shall indemnify and hold Escrow Agent harmless from and against all costs, claims and expenses, including reasonable attorney’s fees, incurred in connection with the performance of Escrow Agent’s duties hereunder, except with respect to actions or omissions taken or suffered by Escrow Agent in bad faith, in willful disregard of this Contract or involving gross negligence on the part of the Escrow Agent.

2.3.5      The parties shall deliver to Escrow Agent an executed copy of this Contract.  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 closing instruction letter delivered at Closing and the provisions of this Section 2.3 .   Notwithstanding the foregoing, Escrow Agent's signature hereon shall not be a prerequisite to the binding nature of this Contract on Purchaser and Sellers, and the same shall become fully effective upon execution by Purchaser and Sellers, and the signature of Escrow Agent will not be necessary to amend any provision of this Contract, other than this Section 2.3 .

2.3.6      Escrow Agent, as the person responsible for closing the transaction within the meaning of Section 6045(e)(2)(A) of the Internal Revenue Code of 1986, as amended (the “ Code ”), shall file all necessary information, reports, returns, and statements regarding the transaction required by the Code including, but not limited to, the tax reports required pursuant to Section 6045 of the Code.  Further, Escrow Agent agrees to indemnify and hold Purchaser, Sellers, and their respective attorneys and brokers harmless from and against any Losses resulting from Escrow Agent’s failure to file the reports Escrow Agent is required to file pursuant to this section.

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 November 16, 2009 (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 delivering a Termination Notice 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 Termination 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 Initial Deposit to Purchaser.  If Purchaser fails to provide Sellers’ Representative with such Termination Notice 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 Deposit shall be non-refundable, except as otherwise provided herein, 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 not less than forty-eight (48) hours’ advance notice to Seller’s Representative 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 reasonably 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 reasonably 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, materialmen’s 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 during the Feasibility Period or otherwise; provided, however, such indemnity shall not cover any Loss to the extent arising from Seller’s Indemnified Parties’ negligence or willful misconduct or any preexisting latent physical or environmental conditions discovered by Purchaser in connection with its investigations as long as Purchaser immediately ceases its investigations upon discovering such latent condition and takes reasonable steps not to exacerbate such condition.

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 sole 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; provided, however, each Seller hereby expressly consents to Purchaser's performance of a Phase I environmental study of the applicable Property (to be conducted by an environmental engineer reasonably acceptable to Seller's Representative) and an ACM (asbestos containing material) study (to be conducted by an environmental engineer reasonably acceptable to Seller's Representative) in connection therewith, but only to the extent customarily performed in connection with a Phase I environmental study; and, provided, further, however, if the Phase I for any Property concludes that a Phase II is recommended, but the applicable Seller refuses permission for such Phase II (in such Seller's sole and absolute discretion), Purchaser may terminate this Contract pursuant to Section 3.2 prior to the expiration of the Feasibility Period.  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 substantially 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 One Million Dollars ($1,000,000.00) for injury or death to any one person and Three Million Dollars ($3,000,000.00) for injury or death to more than one person and One Million Dollars ($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) or commonwealth(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      Within ten (10) days after the Effective Date, and to the extent the same exist and are in a Seller’s possession or reasonable control (subject to Section 3.5.2 ), and have not been heretofore provided by a Seller to Purchaser, Seller agrees to make the documents set forth on Schedule 4 (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.  In the alternative, at a Seller’s option and within the foregoing time period, such Seller may deliver some or all of its Materials to Purchaser, or make the same available to Purchaser on a secure web site (Purchaser agrees that any item to be delivered by a Seller under this Contract shall be deemed delivered to the extent available to Purchaser on such secured web site).  To the extent that Purchaser determines that any of the Materials have not been made available or delivered to Purchaser pursuant to this Section 3.5.1 , Purchaser shall notify Sellers’ Representative and Sellers’ Representative shall use commercially reasonable efforts to deliver the same to Purchaser within five (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 Seller’s Representations, each Seller makes no representation or warranty, express, written, oral, statutory, or implied, and all such representations and warranties are hereby expressly excluded and disclaimed.  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 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 4 , no later than five (5) Business Days after the Effective Date, each Seller shall deliver to Purchaser (or otherwise make available to Purchaser as provided under Section 3.5.1 ) the most recent rent roll and security deposit ledger for the applicable Property, which rent roll and security deposit ledger shall list the monthly base rent, Lease expiration date and unapplied security deposit for such Property and is that which each Seller uses in the ordinary course of operating its Property (collectively, the “ Rent Rolls ”). Sellers make no representations or warranties regarding the Rent Rolls other than the express representation set forth in Section 6.1.10

3.5.4      In addition to the items set forth on Schedule 4 , no later than 5 Business Days after the Effective Date, and to the extent same have not been heretofore provided by a Seller to Purchaser, 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 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 6.1.11 .

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, (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, premium, or damages, including liquidated damages, for cancellation, Purchaser shall be solely responsible for the payment of any such cancellation fees, penalties, or damages, including liquidated damages.  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.  If Purchaser delivers the Property Contracts Notice to Seller on or before the expiration of the Feasibility Period, then simultaneously therewith, Purchaser shall deliver to Seller a vendor termination notice (in the form attached hereto as Exhibit F) for each Terminated Contract informing the vendor(s) 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 ”).  Seller shall sign the Vendor Terminations prepared by Purchaser, and deliver them to all applicable vendors.  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.  Purchaser shall indemnify, hold harmless and, if requested by the applicable Seller (in such Seller’s sole discretion), defend (with counsel approved by such Seller) such Seller’s Indemnified Parties from and against any and all Losses arising from or related to Purchaser’s failure to obtain any Required Assignment Consent.  Notwithstanding the foregoing, at Closing, each Seller shall, at its sole cost and expense, terminate any property management contract affecting such Seller’s Property.

ARTICLE IV
TITLE

4.1       Title Documents .

4.1.1      Purchaser acknowledges that prior to the Effective Date, Purchaser has received from Escrow Agent, and has reviewed, a commitment for owner’s title insurance for each Property, as more specifically identified with regard to each Property on the Seller Information Schedule (each, a " Title Commitment "), to provide an 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 such 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 ").  

4.1.2      With respect to the Chimneys of Cradlerock Property, the Lazy Hollow Property, the Spyglass Property and the Hunter’s Chase Property, Purchaser shall be solely responsible for payment of all title insurance premiums and all other costs relating to procurement of the Title Commitment, the Title Policy and any requested endorsements. 

4.1.3      With respect to the Arbours of Hermitage Property, the Hillmeade Property, the Parktown Townhouse Property, the Westway Village Property and the Woods of Inverness Property, (i) Seller shall be responsible only for payment of the base premium for the Title Policy and (ii) 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 prior to the Effective Date, each Seller has delivered to Purchaser a copy of the existing survey of each Property as more specifically identified with regard to each Property on the Seller Information Schedule (each, an " Existing Survey ").  At Purchaser's request, Sellers have ordered new or updated surveys for the Properties (the " New Surveys ", and together with the Existing Surveys, the " Surveys ").  Purchaser and the Sellers shall split evenly the costs for the New Surveys.

4.3       Objection and Response Process/Permitted Exceptions .

4.3.1      On or before November 1, 2009 (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 and 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 November 10, 2009 (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 (or cause the Title Insurer to omit as an exception to title insurance coverage), if any, Sellers shall be entitled to reasonable adjournments of the Closing Date to cure any Objections applicable to any Seller.  If a Seller fails to deliver a Response Notice by the Response Deadline, such Seller shall be deemed to have elected not to cure or otherwise resolve any matter set forth in the Objection Notice.  If Purchaser is dissatisfied with any Response Notice 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 .  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.

4.3.2      Purchaser shall purchase and accept title to the Properties subject to the following, all of which shall be deemed Permitted Exceptions ”:

4.3.2.1   (i) All matters shown in the Title Documents and the Survey for such Property, other than those Objections, if any, which (a) the applicable Seller has agreed to cure (or otherwise resolve) pursuant to the Response Notice under Section 4.3.1 , or (b) the Title Insurer shall be willing to omit as exceptions to coverage or except with affirmative insurance (at no cost to Purchaser) against collection out of or enforcement against the Property with respect to any lender’s mortgage insurance policy, (ii) the standard exceptions and provisions contained in the form of insuring agreement employed by the Title Insurer, (iii) the standard exception regarding the rights of parties in possession which shall be limited to those parties in possession pursuant to the Leases, (iv) 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 and (v) any exceptions and matters that are approved, waived or deemed to have been approved or waived by Purchaser under this Contract;

                                                4.3.2.2 All Leases;

4.3.2.3 With respect to any Assumption Property, its Assumed Encumbrances;

4.3.2.4 With respect to the Chimneys of Cradlerock Property, the HAP Contract;

4.3.2.5 Applicable zoning and governmental regulations and ordinances; and

4.3.2.6 Any defects in or objections to title to such Property, or title exceptions or encumbrances, arising by, through or under Purchaser.

4.4       Subsequently Disclosed Exceptions .

  If at any time after the expiration of the Feasibility Period, an update to any Title Commitment or Existing Survey discloses any additional item that materially adversely affects title to the applicable Property which was not disclosed on any version of, or update to, the Title Commitment or Existing Survey delivered to Purchaser prior to the expiration of the Feasibility Period (the “ New Exception ”), Purchaser shall have a period of five (5) Business 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 (or cause the Title Insurer to omit as an exception to title insurance coverage) 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 three (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 with respect to the Property subjected to such New Exception only by delivering a Termination Notice to Sellers’ Representative 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 sentence by the later of (a) the end of the Feasibility Period and (b) the date which is six (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.  If Sellers’ Representative receives a Termination Notice pursuant to this Section 4.4 , then the provisions of Section 13.33 shall apply to the Property with respect to which this Contract has been so terminated. 

4.5       Existing Deed of Trust or Mortgage .

  It is understood and agreed that, other than the Assumed Deeds of Trust, any deeds of trust and/or mortgages which encumber the Properties (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       Assumed Loans .

  This Section 4.6 applies only to the Assumption Properties.

4.6.1      Purchaser recognizes and agrees that, in connection with the Loan on an Assumption Property made by Lender, such Assumption Property is encumbered by the Assumed Deed of Trust and the Assumed Encumbrances.  The Loan is evidenced by the Note applicable to such Assumption Property.  Prior to the Effective Date and subject to the provisions of Section 3.5.2 , each Seller of an Assumption Property has made available to Purchaser copies of the Assumed Loan Documents which are in such Seller’s possession or reasonable control.

4.6.2      Purchaser agrees that, at the Closing, (a) Purchaser shall assume the applicable Seller’s obligations under the Note and all of the other applicable Assumed Loan Documents and accept title to each Assumption Property subject to the Assumed Deed of Trust and the Assumed Encumbrances applicable to such Assumption Property, and (b) the applicable Lender shall release the applicable Seller, as well as any guarantors and other obligated parties under the Assumed Loan Documents, from all obligations under the Assumed Loan Documents (and any related guarantees or letters of credit), including, without limitation, any obligation to make payments of principal and interest under the applicable Note (collectively, the foregoing (a) and (b) referred to herein as the “ Loan Assumption and Release ”).  Purchaser acknowledges and agrees that (x) certain of the provisions of the Assumed Loan Documents may have been negotiated for the exclusive benefit of the applicable Seller, AIMCO or their respective affiliates (the “ Specific AIMCO Provision ”), and (y) unless the Lender otherwise agrees in such Lender’s sole and arbitrary discretion, Purchaser will not be permitted to assume the benefit of the Specific AIMCO Provisions and the same shall be of no further force or effect from and after the Closing Date.

4.6.3      Purchaser further acknowledges that the Assumed Loan Documents require the satisfaction by Purchaser of certain requirements as set forth therein to allow for the Loan Assumption and Release.  Accordingly, Purchaser, at its sole cost and expense and within 20 days after the Effective Date, but in no event later than October 1, 2009 (the “ Submittal Deadline ”), shall use commercially reasonable efforts to satisfy the requirements set forth in the Assumed Loan Documents to allow for each Loan Assumption and Release, including, without limitation, submitting a substantially complete application to the applicable Lender for assumption of each Loan together with all documents and information required in connection therewith (the “ Loan Assumption Application ”).  Purchaser agrees to provide Sellers’ Representative with a copy of each Loan Assumption Application no later than the Submittal Deadline and shall provide evidence of its submission to each Lender on or before the Submittal Deadline.  Purchaser acknowledges and agrees that Purchaser is solely responsible for the preparation and submittal of each Loan Assumption Application, including the collection of all materials, documents, certificates, financials, signatures, and other items required to be submitted to such Lender in connection with each Loan Assumption Application.

4.6.4      Purchaser shall comply with Lender’s assumption guidelines in connection with the Loan Assumption and Release and, if required by the Lender, Purchaser shall cause such person or entity reasonably acceptable to the Lender, to execute and deliver a “non-recourse carve-out” guaranty and environmental indemnity in favor of Lender.  Purchaser shall be responsible, at its sole cost and expense, for correcting and re-submitting any deficiencies noted by such Lender in connection with a Loan Assumption Application no later than five (5) Business Days after notification from such Lender of such deficiency.  Purchaser also shall provide Sellers’ Representative with a copy of any correspondence from a Lender with respect to a Loan Assumption Application no later than five (5) Business Days after receipt of such correspondence from such Lender.  Purchaser acknowledges that a Lender’s assumption guidelines may not be consistent with the provisions of the applicable Assumed Loan Documents concerning the Loan Assumption and Release.  Purchaser shall coordinate with such Lender to comply with the appropriate provisions of both the applicable Assumed Loan Documents and such Lender’s assumption guidelines in order to allow for the Loan Assumption and Release.

4.6.5      Purchaser shall pay all fees and expenses (including, without limitation, all servicing fees and charges, transfer fees, indebtedness taxes, assumption fees, title fees, endorsement fees, and other fees to release each Seller of all liability under a Loan) imposed or charged by the Lender or its counsel (such fees and expenses collectively being referred to as the “ Assumption Lender Fees ”), in connection with each Loan Assumption Application and each Loan Assumption and Release.  The provisions of this Section 4.6.5 shall survive the termination of this Contract and the Closing.

4.6.6      There are currently no reserves, impounds and other accounts held by a Lender in connection with each Loan.  Purchaser shall be responsible for funding any new or additional reserves, impounds or accounts required by a Lender to be maintained by Purchaser in connection with each Loan after the Loan Assumption and Release (the “ Required Loan Fund Amounts ”).

4.6.7      Purchaser agrees promptly to deliver to each Lender all documents and information required by the Assumed Loan Documents, and such other information or documentation as such Lender reasonably may request, including, without limitation, financial statements, income tax returns and other financial information for Purchaser and any required guarantor.  Each Seller agrees that it will cooperate with Purchaser and the applicable Lender, at no cost or expense to such Seller, in connection with Purchaser’s application to Lender for approval of each applicable Loan Assumption and Release.

4.6.8      No later than ten (10) days after the Effective Date, Purchaser shall order a Phase I Environmental study and property condition report for each Assumption Property (each prepared by engineers and/or consultants reasonably acceptable to Sellers’ Representative and Lender), and covenants that such Phase I Environmental study and property condition report shall be delivered to Sellers’ Representative and Lender no later than ten (10) days prior to the Closing Date in connection with and as a precondition to a Loan Assumption and Release for each Assumption Property.

4.6.9      If (a) Purchaser complies in all material respects with its obligations under this Contract (including this Section 4.6 ) and the requirements of each of the Assumed Loan Documents in connection with obtaining the Loan Assumption and Release for each Assumption Property, (b) Purchaser uses commercially reasonable efforts to diligently obtain the Loan Assumption and Release for each Assumption Property, and (c) prior to the Closing Date, Purchaser does not obtain the consent of the Lender to the Loan Assumption and Release for an Assumption Property, then Purchaser shall promptly deliver a Termination Notice to Sellers’ Representative stating that Purchaser has been unable to obtain the Loan Assumption and Release for one or more of the Assumption Properties identified in such Termination Notice. Upon receipt by Sellers’ Representative of such Termination Notice, the Contract shall automatically be deemed terminated with respect to each Assumed Property identified in such Termination Notice.  The provisions of Section 13.33 shall apply to each Assumption Property with respect to which this Contract has been so terminated.

4.6.10    Purchaser shall be in default hereunder if, after the expiration of the Feasibility Period, Purchaser fails to use commercially reasonable efforts to diligently obtain Lender's consent to the Loan Assumption and Release for each Assumption Property.  If such event occurs, then Sellers may terminate this Contract and the Deposit shall be immediately released by the Escrow Agent to Sellers.

4.7       Purchaser’s Financing Contingency.

  The terms of this Section 4.7 apply only to the Lazy Hollow Property and the Hillmeade Property (collectively, the “ Purchaser’s Loan Properties ” and, each a “ Purchaser Loan Property ”).  The obligations of Purchaser under this Contract are conditioned upon an institutional mortgage lender (“ Purchaser’s Lender ”) agreeing to make (A) a second mortgage loan to Purchaser on the Lazy Hollow Property in the amount of Four Million Four Hundred Thousand  Dollars ($4,400,000.00) and (B) a second mortgage loan to Purchaser on the Hillmeade Property in the amount of One Million Four Hundred Thousand  Dollars ($1,400,000.00) (each a “ Purchaser’s Loan ” and collectively “ Purchaser’s Loans ”).  Each Purchaser’s Loan shall (i) be secured by a second mortgage on such Property Loan Property, (ii) have a fixed interest rate not to exceed six and three quarters percent (6.75%), (iii) be co-terminus with the first mortgage loan securing such Property Loan Property and (iv) otherwise be on commercially reasonably terms.   Purchaser shall (a) make one or more applications to Purchaser’s Lender for Purchaser’s Loans (collectively, the “ Mortgage Loan Application ”), (b) furnish accurate and complete information on Purchaser and any guarantor, as required, (c) pay all reasonable fees, points and charges required in connection with such Mortgage Loan Application and loans, (d) pursue such Mortgage Loan Application in good faith and with reasonable diligence, (e) cooperate in good faith with Purchaser’s Lender to the end of securing Purchaser’s Loans, and (f) if required by Purchaser’s Lender, cause (x) such person or entity reasonably acceptable to Purchaser’s Lenderto 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 the County and State which are similar in type, age and condition as such Purchaser Loan 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.  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 (5) 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 4.7 , 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 4.7 , Purchaser’s Lender fails to issue a loan commitment for a Purchaser Loan Property in accordance with the terms of this Section 4.7 on or before the Closing Date, then Purchaser shall have the right to terminate this Contract for such Purchaser Loan Property only by delivering a Termination Notice to Sellers’ Representative.  If Purchaser elects to terminate this Contract with respect to such Purchaser Loan Property, then the provisions of Section 13.33 shall apply with respect to such Purchaser Loan Property.

 

4.8       AIMCO Loan .

  Subject to the terms of Section 4.8.6 below, the terms of this Section 4.8 apply only to the Hillmeade Property and the Lazy Hollow Property (each an “ AIMCO Loan Property ”, and collectively, the “ AIMCO Loan Properties ”).

4.8.1      At the Closing, and subject to the provisions of Section 4.8.5 below, Seller shall make, or cause one or more Affiliates of Seller (the entity(ies) making the AIMCO Loans being herein called, collectively, AIMCO Lender ) to make two (2) loans to Purchaser in the aggregate amount of $3,500,000 (collectively, the “ AIMCO Loans ”, each an “ AIMCO Loan ”), which AIMCO Loans shall be used as follows: (i) a portion of the AIMCO Loans shall be used to fund a portion of the Purchase Price for the Lazy Hollow Property and shall be secured by a third mortgage on such Property and (ii) a portion of the AIMCO Loans shall be used to fund a portion of the Purchase Price for the Hillmeade Property and shall be secured by a third mortgage on such Property.  Prior to the expiration of the Feasibility Period, Seller and Purchaser shall mutually agree on the allocation of the AIMCO Loans among the AIMCO Loan Properties.

4.8.2      Each AIMCO Loan shall be made by the AIMCO Lender to Purchaser on the following terms: (a) monthly payments of interest only shall be due at an interest rate of six percent (6.0%) per annum during the term of the Aimco Loan, and  (b) shall have a term of five (5) years .

4.8.3      At the Closing Purchaser shall, with respect to each AIMCO Loan, execute and deliver to the AIMCO Lender the following loan documents (herein collectively called the “ AIMCO Loan Documents ”):

(a)      a promissory note executed by Purchaser in the form attached hereto as Exhibit I , evidencing such AIMCO Loan;

(b)      a security instrument executed by the Purchaser in the form attached hereto as Exhibit J , securing such AIMCO Loan (the “ AIMCO Loan Security Instrument ”);

(c)      an assignment of leases and rents executed by the Purchaser in the form attached hereto as Exhibit K ;

(d)      a non-recourse carveout guaranty executed by such person or entity reasonably acceptable to AIMCO Lender (the “ Guarantor ”) in the form annexed hereto as Exhibit L ;

(e)      an environmental indemnity agreement executed by the Guarantor in the form annexed hereto as Exhibit M ;

(f)       an opinion letter from counsel to Purchaser, in a form reasonably acceptable to AIMCO Lender, which shall opine to, among other things, the following matters: (i) the due formation, existence and organization of Purchaser and Guarantor (if Guarantor is an entity) for such AIMCO Loan, (ii) the power and authority of Purchaser and Guarantor (if Guarantor is an entity) to execute, deliver, and perform its obligations under the AIMCO Loan Documents which it is a party to, (iii) the due execution and delivery by Purchaser and Guarantor of the AIMCO Loan Documents which it is a party to, (iv) the AIMCO Loan Documents are enforceable against Purchaser and Guarantor (as applicable) in accordance with their terms, (v) the execution, delivery and performance by Purchaser and Guarantor of the AIMCO Loan Documents which it is a party to does not conflict with or violate any law, rule, regulation or ordinance applicable to Purchaser and Guarantor (as applicable) and (vi) such AIMCO Loan does not violate the provisions of the usury laws of the State in which such AIMCO Loan Property is located; and

(g)      such other consents or authorizing documents as the AIMCO Lender may reasonably request to evidence that the AIMCO Loan Documents have been duly authorized by Purchaser and the Guarantor. 

4.8.4      At the Closing Purchaser shall pay all mortgage recording, transfer and grantor taxes and fees incident to the recording of each AIMCO Loan Security Instrument, if any, and the filing fees for any financing statements delivered in connection therewith.  In addition, Purchaser, at its expense, shall at the Closing obtain for the AIMCO Lender a lender’s policy of title insurance from the Title Insurer, insuring each AIMCO Loan Security Instrument as a thrid priority lien on each AIMCO Loan Property (subject only to the Permitted Exceptions).  Purchaser shall be responsible for all fees and expenses charged by Lender in connection with the AIMCO Loans (including, without limitation, all fees charged by the Lender pursuant to the Assumed Loan Documents).  The provisions of this Section 4.8.4 shall survive the termination of this Contract and the Closing. 

4.8.5      From and after the Effective Date, (i) Purchaser, at its sole cost and expense, shall use commercially reasonable efforts to obtain the consent of the Lender for each AIMCO Loan Property to the applicable AIMCO Loan and (ii) Seller, at its sole cost and expense, shall cause AIMCO Lender to use commercially reasonable efforts to agree with the Lender of each AIMCO Loan Property on a form of intercreditor agreement (on such terms as are reasonably acceptable to AIMCO Lender) to be entered into at the Closing of such AIMCO Loan Property.  If, on or before the expiration of the Feasibility Period, the AIMCO Lender and the Lender of an AIMCO Loan Property shall fail to agree on the terms of an intercreditor agreement (which requirement may be waived by the AIMCO Lender in its sole discretion), then the Seller of such AIMCO Loan Property, by notice to Purchaser given on or before three (3) Business Days after the expiration of the Feasibility Period, may elect not to cause the AIMCO Lender to make the AIMCO Loan for such AIMCO Loan Property to Purchaser.  In such event, Purchaser may, within five (5) Business Days after the expiration of the Feasibility Period, terminate this Contract only with respect to such AIMCO Loan Property by delivering a Termination Notice to Seller’s Representative and the Escrow Agent.  Further, Seller and Purchaser acknowledge and agree that AIMCO Lender’s making the AIMCO Loans are expressly conditioned on the following occurring on or before the Closing of an AIMCO Loan Property (which conditions may be waived by the AIMCO Lender in its sole discretion):  (A) the Lender for each AIMCO Loan Property has given its written consent to the applicable AIMCO Loan, and (B) the Lender is not requiring AIMCO Lender to enter into a so-called “standstill agreement” (or other agreement of similar import) with such Lender.  If either (x) such consent of Lender has not been obtained by the Closing for such AIMCO Loan Property or (y) such Lender is requiring the AIMCO Lender to enter into a “standstill agreement” (or other agreement of similar import), then, unless the AIMCO Lender agrees to waive such conditions precedent set forth in the foregoing clauses (A) and (B), Seller shall not have any further obligation to cause the AIMCO Lender to make the AIMCO Loans to Purchaser.  In such event, Purchaser may terminate this Contract only with respect to such AIMCO Loan Property by delivering a Termination Notice to Seller’s Representative and the Escrow Agent.  If Purchaser so elects to terminate this Contract with respect to such AIMCO Loan Property in accordance with this Section 4.8.5 , then (i) this Contract shall terminate for such AIMCO Loan Property only, and the provisions of Section 13.33 shall apply with respect to such AIMCO Loan Property.

4.8.6      Notwithstanding anything to the contrary contained in this Section 4.8 , prior to the expiration of the Feasibility Period, Seller shall have the right, in Seller’s sole discretion, to replace either AIMCO Loan Property with the Hunter’s Chase Property.  In such event, (i) the Hunter’s Chase Property shall be deemed to be an AIMCO Loan Property and (ii) a portion of the AIMCO Loans shall be used to fund a portion of the Purchase Price for the Hunter’s Chase Property and shall be secured by a second mortgage on such Property.

4.9       Purchaser Financing .

  Except as otherwise provided in (i) Section 4.6.9 above with respect to the Loan Assumption and Release for the Assumed Properties, (ii) Section 4.7 above with respect to the Purchaser Loans for the Lazy Hollow Property and the Hillmeade Property and (iii) Section 4.8 with respect to the AIMCO Loans for the AIMCO Loan Properties, 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.

4.10     Housing Assistance Program Vouchers.

  The terms of this Section 4.10 apply only to the Chimneys of Cradlerock Property and the Lazy Hollow Property.  Purchaser acknowledges that the HAP Voucher Contract(s) require(s) the satisfaction by Purchaser of certain requirements as set forth therein and established by the local housing authorities (collectively, the “ Housing Authority ”) to allow for the HAP Voucher Assumption. Purchaser agrees that, at the Closing, either (a) Purchaser shall assume all obligations under the HAP Voucher Contracts and accept title to the applicable Property subject to the same, or (b) the existing HAP Voucher Contracts shall be terminated, and Purchaser shall enter into replacement HAP Voucher Contracts which are acceptable to the Housing Authority (collectively, the foregoing (a) and (b) referred to herein as the " HAP Voucher Assumption ").  Purchaser shall indemnify and hold the Seller of the Chimneys of Cradlerock Property and the Seller of the Lazy Hollow Property and the Seller’s Indemnified Parties of such Seller harmless from and against any and all claims, losses, damages, and expenses (including reasonable attorneys’ fees) that may be incurred by any of such Seller and/or any of such Seller’s Indemnified Parties from and after the Closing Date, in connection with Purchaser’s assumption of the HAP Voucher Contracts or the failure of Purchaser to enter into a replacement HAP Voucher Contracts as aforesaid. The terms and provisions of this Section 4.10 shall survive the Closing.

 

4.11     HUD Approval .

  The terms of this Section 4.11 apply only to the Chimneys of Cradlerock Property. 

4.11.1    Purchaser recognizes and agrees that the Chimneys of Cradlerock Property presently is benefited by the HAP Contract, which shall be deemed a Permitted Exception for all purposes under this Contract.  Purchaser hereby acknowledges receipt of a copy of the HAP Contract (subject to Section 3.5.2 ).

4.11.2    Purchaser agrees that at the Closing, the Seller of the Chimneys of Cradlerock Property shall assign and Purchaser shall assume Seller’s rights and obligations under the HAP Contract (the " HAP Assumption "), and, at the Closing, the Seller of the Chimneys of Cradlerock Property and Purchaser shall execute and deliver the Assignment of HAP Contract.  Purchaser further acknowledges that the HAP Contract requires the satisfaction by Purchaser of certain requirements as set forth therein and established by HUD to allow for the sale of the Chimney of Cradlerock Property and the HAP Assumption.

4.11.3    Prior to the Closing, Purchaser, at its sole cost and expense, shall (i) use commercially reasonable efforts to diligently obtain HUD Approval and DHCD Approval and (ii) shall use commercially reasonable efforts to obtain from HUD and/or DHCD (as applicable) a renewal of the HAP Contract under Option 2 of the Section 8 Renewal Guide in accordance with the requirements of HUD Handbook 4350.1, Chapter 7 and Attachment 5 of the Section 8 Renewal Guide (the “ Budget Base Rent Increase Procedure ) to the maximum rents that can be supported by such Budget Based Rent Increase Procedure.  In connection with the foregoing, Purchaser, at its sole cost and expense and no later than the Submittal Deadline, shall submit (i) a substantially complete HUD Application in order to request HUD Approval and DHCD Application in order to request DHCD Approval, including, without limitation, all application documents, certificates, agreements, information and fees required by HUD and DHCD to allow for each of their approval of the Seller the Chimney of Cradlerock Property's assignment and Purchaser's assumption of the HAP Contract and (ii) a substantially complete application to HUD and/or DHCD (as applicable) requesting a renewal of the HAP Contract under the Budget Base Rent Increase Procedure. In connection with seeking a renewal of the HAP Contract under the Budget Base Rent Increase Procedure, Purchaser agrees that it will agree to such a renewal for a period of up to five (5) years.  In addition to the foregoing, (x) Purchaser shall obtain 2530 approval from HUD, and, in addition to such 2530 approval, shall satisfy all other requirements imposed by HUD field offices in connection with any other process imposed as a prerequisite to obtaining HUD Approval, and (y) if the Chimney of Cradlerock Property's Real Estate Assessment Center physical inspection score is a fifty-nine (59) or below and the Chimney of Cradlerock Property is involved in an assignment of the HAP Contract, then the Purchaser shall enter into an agreement with HUD whereby the Purchaser will hire an independent professional inspector (if an in-house HUD inspector is unavailable) to inspect all of the Chimney of Cradlerock Property's units to determine if they meet the Uniform Physical Condition Standards.

4.11.4    Purchaser agrees promptly to deliver to HUD and DHCD (i) all documents and information required in order to obtain (x) HUD Approval and DHCD Approval and (y) a renewal of the HAP Contract under the Budget Base Rent Increase Procedure and (ii) such other information or documentation as HUD and DHCD reasonably may request, including, without limitation, financial statements, income tax returns and other financial information for Purchaser and any required guarantor, materials, documents, certificates, signatures, and other items.  Purchaser aggress that it shall be responsible at its sole cost and expense for obtaining (i) a letter from HUD and DHCD approving the transfer of the Chimneys of Cradlerock Property and providing final approval of the assignment of the HAP Contract and (ii) the documents necessary to effectuate a renewal of the HAP Contract under the Budget Base Rent Increase Procedure. Purchaser agrees to provide Sellers’ Representative with copies of the HUD Application, the DHCD Application and the application requesting a renewal of the HAP Contract no later than two (2) Business Days prior to the Submittal Deadline and shall provide evidence of Purchaser's submission of the HUD Application to HUD, the DHCD Application to DHCD and the application requesting a renewal of the HAP Contract under the Budget Base Rent Increase Procedure to HUD and/or DHCD (as applicable) on or before the Submittal Deadline.  Purchaser shall be responsible at its sole cost and expense for correcting and re-submitting any deficiencies noted by HUD or DHCD in connection with their respective applications no later than five (5) Business Days after notification from HUD or DHCD of such deficiency (as the case may be).  Purchaser also shall provide Sellers’ Representative with a copy of any correspondence from HUD with respect to the HUD Application, from DHCD with respect to the DHCD Application and from HUD and/or DHCD (as applicable) with respect to the application requesting a renewal of the HAP Contract under the Budget Base Rent Increase Procedure no later than five (5) Business Days after receipt of such correspondence from HUD or DHCD (as the case may be).  Purchaser shall pay all fees and expenses (including, without limitation, transfer fees, assumption fees, title fees, endorsement fees, and other fees) imposed or charged by HUD, DHCD or their counsel in connection with the HUD Application, the HUD Approval, the DHCD Application and the DHCD Approval and the application requesting a renewal of the HAP Contract and the approval thereof (which obligation shall survive the termination of this Contract and the Closing).  Without limiting the generality of the foregoing, Purchaser shall pay the cost of any physical inspection report required in connection with obtaining HUD Approval.  The foregoing obligations of Purchaser shall survive the Closing.

4.11.5    Notwithstanding anything in this Contract to the contrary, if any residual receipts account is maintained by the Seller of the Chimneys of Cradlerock Property (a " Residual Receipts Account ") in connection with the HAP Contract, then the Residual Receipts Account will remain with the Chimneys of Cradlerock Property following the Closing and Purchaser shall reimburse the Seller of the Chimneys of Cradlerock Property at the Closing for the amount of such Residual Receipts Accoun t. There is currently no Residual Receipts Account maintained by the Seller of the Chimneys of Cradlerock Property in connection with the HAP Contract.

4.11.6    No transfer of any interest in the Chimneys of Cradlerock Property shall be effective prior to HUD Approval and DHCD Approval.  Purchaser will not take possession of the Chimneys of Cradlerock Property or assume benefits of ownership of the Chimneys of Cradlerock Property prior to HUD Approval and DHCD Approval.  Purchaser, its heirs, executors, administrators or assigns, shall have no right upon any breach by the Seller of the Chimneys of Cradlerock Property hereunder to seek damages, directly or indirectly, from the Chimneys of Cradlerock Property, including from any assets, rents, issues or profits thereof, and Purchaser shall have no right to effect a lien upon the Chimneys of Cradlerock Property or the rents, issues or profits thereof.

4.11.7    Purchaser recognizes and agrees that HUD may require that the Assignment of HAP Contract contain a provision, in accordance with the Memorandum of Beverly J. Miller, Director, Asset Management, Office of Housing, dated January 6, 2005, that amends the HAP Contract to include the following additional provisions:

Physical Conditions Standards and Inspection Requirements.   The Owner shall comply with the Physical Condition Standards and Inspection Requirements of 24 CFR Part 5, Subpart G, including any changes in the regulation and related Directives.  In addition, the Owner shall comply with HUD's Physical Condition Standards of Multifamily Properties of 24 CFR Part 200, Subpart P, including any changes in the regulation and related Directives.  This obligation shall apply both during the current term of the HAP Contract and during each successive renewal term.

Financial Reporting Standards.  The Owner shall comply with the Uniform Financial Reporting Standards of 24 CFR Part 5, Subpart H, including any changes in the regulation and related Directives.  This obligation shall apply both during the current term of the HAP Contract and during each successive renewal term.

4.11.8    Purchaser acknowledges and agrees that, in connection with HUD Approval, HUD may require the funding of additional escrows and reserves, including without limitation, additional repair escrows (collectively, the " Additional Required Escrows ").  Purchaser agrees that, at the Closing, Purchaser shall fund all Additional Required Escrows in Good Funds and in addition to the Purchase Price for the Chimneys of Cradlerock Property or any other amount Purchaser is required to pay pursuant to this Contract. 

4.11.9    Purchaser and Seller agree to cooperate and to work with HUD and/or DHCD, as required, to ensure that there is a HAP Contract in place as of Closing.  Further, Purchaser, for itself and its successors and assigns, covenants to and agrees with the Seller of the Chimneys of Cradlerock Property that Purchaser shall maintain the HAP Contract in full force and effect for the term of the HAP Contract remaining from and after Closing. Purchaser additionally covenants to use commercially reasonable efforts to diligently obtain approval from HUD and/or DHCD (as applicable) for the renewal of the HAP Contract assumed by Purchaser at Closing for at least one (1) year after Closing.  Purchaser shall promptly provide Seller with copies of any application and correspondence with HUD or DHCD relating to the renewal or extension of the HAP Contract and covenants to comply with all HUD and DHCD regulations required to obtain such renewal or extension, including, but not limited to, undertaking any rent comparability studies, appraisals or other third party evaluations or analysis required to renew the HAP Contract.  Purchaser shall indemnify and hold the Seller of the Chimneys of Cradlerock Property and the Seller’s Indemnified Parties of the Seller of the Chimneys of Cradlerock Property harmless from and against any and all claims, losses, damages, and expenses (including reasonable attorneys’ fees) that may be incurred by the Seller of the Chimneys of Cradlerock Property and/or any of such Seller’s Indemnified Parties from and after the Closing Date, in connection with Purchaser’s failure to renew the HAP Contract assumed by Purchaser at Closing for at least one (1) year after Closing.  The terms and provisions of this Section 4.11.9 shall survive the Closing.

4.11.10  Provided that (a) Purchaser fully complies with its obligations under this Contract (including this Section 4.11 ) and (b) prior to the Closing Date, Purchaser has been unable to obtain HUD Approval and DHCD Approval, then either Purchaser or Seller shall have the right to give the other party and Escrow Agent written notice terminating this Contract with respect to the Chimneys of Cradlerock Property only based solely on the fact that HUD Approval and DHCD Approval has not been obtained.  If either party elects to terminate this Contract with respect to the Chimneys of Cradlerock Property pursuant to this Section 4.11.10 , then the provisions of Section 13.33 shall apply with respect to the Chimneys of Cradlerock Property.  To the extent necessary and reasonable, the Seller of the Chimneys of Cradlerock Property will provide authorization to HUD, DHCD or to any other appropriate federal or state agency, to release to Purchaser copies of the HAP Contract, or other documents or agreement with HUD or DHCD for Purchaser’s reference in connection with obtaining HUD Approval and the DHCD Approval.

4.11.11  (a)  Provided that (i) Purchaser fully complies with its obligations under this Contract (including this Section 4.11 ) and the requirements of HUD and/or DHCD (as applicable in connection with Purchaser’s efforts to obtain a renewal of the HAP Contract under the Budget Base Rent Increase Procedure), (ii) Purchaser uses commercially reasonable efforts to diligently obtain a renewal of the HAP Contract under the Budget Base Rent Increase Procedure and (iii) on or prior to the Closing Date, Purchaser has not obtained a renewal of, or a commitment from HUD to renew, the HAP Contract, under the Budget Base Rent Increase Procedure or otherwise, which renewal does or will result in an increase in the annual contract rents for Section 8 units at the Chimneys of Cradlerock Property (the “ Chimneys Section 8 Units ”) over the annual contract rents for the Chimneys Section 8 Units in effect as of the Effective Date, then and in such events, at the Closing Purchaser shall receive a credit (the “ Chimneys Section 8 Credit ”) against the Allocated Purchase Price for the Chimneys of Cradlerock Property in an amount equal to $530,000.00.

(b)        If on or prior to the Closing Date HUD issues, or commits to issue, a renewal of the HAP Contract, under the Budget Base Rent Increase Procedure or otherwise, which renewal does or will result in an increase in the annual contract rents for the Chimneys Section 8 Units over the annual contract rents for the Chimneys Section 8 Units in effect as of the Effective Date (such renewal, a “ HAP Contract Renewal ”), then at the Closing Purchaser shall receive a credit against the Allocated Purchase Price for the Chimneys of Cradlerock Property (which credit shall b


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