UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 21, 2011
(Exact name of Registrant as specified in its charter)
Delaware |
0-14187 |
94-2940208 |
(State or other jurisdiction |
(Commission |
(I.R.S. Employer |
of incorporation) |
File Number) |
Identification Number) |
55 Beattie Place
Post Office Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Consolidated Capital Institutional Properties/3, LP, a Delaware limited partnership (the Registrant or Partnership), owns Lamplighter Park Apartments (Lamplighter Park), a 174-unit apartment complex located in Bellevue, Washington. On March 21, 2011 (the Effective Date), the Partnership entered into a Purchase and Sale Contract (the Purchase Agreement) with a third party, The Ezralow Company, LLC a Delaware limited liability company (the Purchaser), to sell Lamplighter Park to the Purchaser for a total sales price of $25,100,000.
The following is a summary of the terms and conditions of the Purchase Agreement, which summary is qualified in its entirety by reference to the Purchase Agreement, a copy of which is attached hereto as an exhibit.
PURCHASE PRICE. The total purchase price is $25,100,000, subject to certain prorations and adjustments at the closing. Within two business days following the effective date, the Purchaser agreed to deliver an initial deposit of $250,000 to the escrow agent. On or before the day that the feasibility period expires on April 22, 2011, the Purchaser agreed to deliver an additional deposit of $250,000 to the escrow agent.
CLOSING. The expected closing date of the transaction is May 17, 2011. The Partnership has the right to extend the closing date to June 16, 2011 by delivering a written notice to the Purchaser no later than three business days prior to the then-scheduled closing date. The closing is also subject to customary closing conditions and deliveries.
COSTS AND FEES. The Partnership will pay the real estate excise tax related to the transfer of Lamplighter Park, the base premium related to the title policy, one-half of the customary closing costs of the escrow agent and all fees to record mortgage releases for Lamplighter Park. The Purchaser will pay any sales, use, gross receipts or similar taxes, any premiums or fees related to the title policy (other than the base premium), one-half of the customary closing costs of the escrow agent and fees to record the deed and Purchasers loan and security documents.
REPRESENTATIONS AND WARRANTIES. The Partnership and the Purchaser each made limited representations and warranties to the other.
RISK OF LOSS. The risk of loss or damage to Lamplighter Park by reason of any insured or uninsured casualty during the period through and including the closing date equal to or less than $2,510,000 will be borne by the Partnership. The Partnership must maintain in full force and effect until the closing date all existing insurance coverage on Lamplighter Park.
ASSIGNMENT. With the exception of an assignment to an affiliate of the Purchaser, the Purchase Agreement is not assignable by the Purchaser without the prior written approval of the Partnership.
DEFAULTS AND REMEDIES. If the Purchaser defaults on its obligations to deliver when required any required deposits, the purchase price or any other specified deliveries, the Purchaser will forfeit its deposits to the Partnership, and neither the Purchaser nor the Partnership will be obligated to proceed with the purchase and sale of Lamplighter Park. The Partnership expressly waived the remedies of specific performance and additional damages for defaults by the Purchaser.
(c) Exhibits
10.99 Purchase and Sale Contract between Consolidated Capital Institutional Properties/3, LP, a Delaware limited partnership, and The Ezralow Company, LLC, a Delaware limited liability company, dated March 21, 2011.
The agreement included as an exhibit to this Form 8-K contains representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:
· should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
· have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;
· may apply standards of materiality in a way that is different from what may be viewed as material to an investor; and
· were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.
Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. The Registrant acknowledges that, notwithstanding the inclusion of the foregoing cautionary statements, it is responsible for considering whether additional specific disclosures of material information regarding material contractual provisions are required to make the statements in this Form 8-K not misleading. Additional information about the Registrant may be found elsewhere in this Form 8-K and the Registrants other public filings, which are available without charge through the SECs website at http://www.sec.gov.
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3, LP
By: ConCap Equities, Inc.
General Partner
By: /s/Stephen B. Waters
Stephen B. Waters
Senior Director of Partnership Accounting
Date: March 25, 2011
Exhibit 10.99
PURCHASE AND SALE CONTRACT
BETWEEN
CONSOLIDATED CAPITAL
INSTITUTIONAL PROPERTIES/3, LP,
a Delaware limited partnership
AS SELLER
AND
a Delaware limited liability company
AS PURCHASER
LAMPLIGHTER PARK
825 156th Avenue, NE
Bellevue, Washington 98007
Page
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ARTICLE I |
DEFINED TERMS |
1 | ||||
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ARTICLE II |
PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT |
2 | ||||
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2.1 |
Purchase and Sale |
2 | ||||
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2.2 |
Purchase Price and Deposit |
2 | ||||
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2.3 |
Escrow Provisions Regarding Deposit |
3 | ||||
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ARTICLE III |
FEASIBILITY PERIOD |
5 | ||||
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3.1 |
Feasibility Period |
5 | ||||
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3.2 |
Expiration of Feasibility Period |
5 | ||||
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3.3 |
Conduct of Investigation |
6 | ||||
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3.4 |
Purchaser Indemnification |
6 | ||||
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3.5 |
Property Materials |
8 | ||||
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3.6 |
Property Contracts |
9 | ||||
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ARTICLE IV |
TITLE |
11 | ||||
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4.1 |
Title Documents |
11 | ||||
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4.2 |
Survey |
11 | ||||
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4.3 |
Objection and Response Process |
12 | ||||
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4.4 |
Permitted Exceptions |
13 | ||||
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4.5 |
Existing Deed of Trust |
13 | ||||
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4.6 |
Subsequently Disclosed Exceptions |
14 | ||||
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4.7 |
Purchaser Financing |
15 | ||||
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4.8 |
Housing Assistance Program Vouchers |
16 | ||||
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ARTICLE V |
CLOSING |
16 | ||||
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5.1 |
Closing Date |
16 | ||||
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5.2 |
Seller Closing Deliveries |
17 | ||||
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5.3 |
Purchaser Closing Deliveries |
19 | ||||
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5.4 |
Closing Prorations and Adjustments |
20 | ||||
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5.5 |
Post Closing Adjustments |
26 | ||||
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ARTICLE VI |
REPRESENTATIONS AND WARRANTIES OF SELLER AND |
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PURCHASER |
27 | ||||
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6.1 |
Sellers Representations |
27 | ||||
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6.2 |
AS-IS |
29 | ||||
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6.3 |
Survival of Sellers Representations |
31 | ||||
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6.4 |
Definition of Sellers Knowledge |
32 | ||||
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6.5 |
Representations and Warranties of Purchaser |
33 | ||||
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ARTICLE VII |
OPERATION OF THE PROPERTY |
35 | ||||
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7.1 |
Leases and Property Contracts |
35 | ||||
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7.2 |
General Operation of Property |
36 | ||||
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7.3 |
Liens |
36 | ||||
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Tax Appeals |
37 | |||||
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ARTICLE VIII |
CONDITIONS PRECEDENT TO CLOSING |
38 | ||||
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8.1 |
Purchasers Conditions to Closing |
38 | ||||
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8.2 |
Sellers Conditions to Closing |
39 | ||||
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ARTICLE IX |
BROKERAGE |
41 | ||||
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9.1 |
Indemnity |
41 | ||||
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9.2 |
Broker Commission |
41 | ||||
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ARTICLE X |
DEFAULTS AND REMEDIES |
42 | ||||
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10.1 |
Purchaser Default |
42 | ||||
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10.2 |
Seller Default |
43 | ||||
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ARTICLE XI |
RISK OF LOSS OR CASUALTY |
45 | ||||
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11.1 |
Major Damage |
45 | ||||
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11.2 |
Minor Damage |
46 | ||||
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11.3 |
Closing |
46 | ||||
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11.4 |
Repairs |
47 | ||||
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ARTICLE XII |
EMINENT DOMAIN |
47 | ||||
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12.1 |
Eminent Domain |
47 | ||||
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ARTICLE XIII |
MISCELLANEOUS |
48 | ||||
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13.1 |
Binding Effect of Contract |
48 | ||||
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13.2 |
Exhibits and Schedules |
48 | ||||
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13.3 |
Assignability |
48 | ||||
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13.4 |
Captions |
49 | ||||
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13.5 |
Number and Gender of Words |
49 | ||||
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13.6 |
Notices |
49 | ||||
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13.7 |
Governing Law and Venue |
53 | ||||
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13.8 |
Entire Agreement |
53 | ||||
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13.9 |
Amendments |
53 | ||||
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13.10 |
Severability |
53 | ||||
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13.11 |
Multiple Counterparts/Facsimile Signatures |
54 | ||||
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13.12 |
Construction |
54 | ||||
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13.13 |
Confidentiality |
54 | ||||
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13.14 |
Time of the Essence |
55 | ||||
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13.15 |
Waiver |
55 | ||||
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13.16 |
Attorneys Fees |
55 | ||||
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13.17 |
Time Zone/Time Periods |
56 | ||||
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13.18 |
1031 Exchange |
56 | ||||
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13.19 |
No Personal Liability of Officers, Trustees or Directors |
56 | ||||
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13.20 |
ADA Disclosure |
57 | ||||
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13.21 |
No Recording |
57 | ||||
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13.22 |
Relationship of Parties |
58 | ||||
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13.23 |
AIMCO Marks |
58 | ||||
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13.24 |
Non-Solicitation of Employees |
58 | ||||
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Survival |
58 | |||||
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13.26 |
Multiple Purchasers |
59 | ||||
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13.27 |
WAIVER OF JURY TRIAL |
59 | ||||
ARTICLE XIV |
LEAD-BASED PAINT DISCLOSURE |
60 | |||||
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14.1 |
Disclosure |
60 | ||||
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14.2 |
Consent Agreement |
60 | ||||
EXHIBITS
Exhibit A Legal Description
Exhibit B Form of Special Warranty Deed
Exhibit C Form of Bill of Sale
Exhibit D Form of General Assignment and Assumption
Exhibit E Form of Assignment and Assumption of Leases and Security Deposits
Exhibit F Form of Notice to Vendor regarding Termination of Contract
Exhibit G Form of Tenant Notification
Exhibit H Form of Lead Paint Disclosure
Exhibit I List of Materials
SCHEDULES
Schedule 1 Defined Terms
THIS PURCHASE AND SALE CONTRACT (this "Contract") is entered into as of the 21st day of March, 2011 (the "Effective Date"), by and between CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3, LP, a Delaware limited partnership, having an address at 4582 South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237 ("Seller"), and THE EZRALOW COMPANY, LLC, a Delaware limited liability company, having a principal address at 23622 Calabasas Rd, Suite 200, Calabasas, CA 91302.
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 King County, Washington, as more particularly described in Exhibit A attached hereto and made a part hereof, and the improvements thereon, commonly known as Lamplighter Park 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.
Unless otherwise defined herein, any term with its initial letter capitalized in this Contract shall have the meaning set forth in Schedule 1 attached hereto and made a part hereof.
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.
The total purchase price ("Purchase Price") for the Property shall be an amount equal to Twenty-Five Million One Hundred Thousand Dollars ($25,100,000.00), payable by Purchaser, as follows:
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 April 22, 2011 (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 to conduct and make any and all customary studies, tests, examinations, inquiries, inspections and investigations of or concerning the Property, review the Materials and otherwise confirm any and all matters which Purchaser may reasonably desire to confirm with respect to the Property and Purchasers intended use thereof (collectively, the "Inspections").
If any of the matters in Sections 3.1, 3.5 or 3.6 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 by giving written notice to that effect to Seller and Escrow Agent no later than 5:00 p.m. on or before the date of expiration of the Feasibility Period. If Purchaser provides such notice, this Contract shall terminate and be of no further force and effect subject to and except for the Survival Provisions, and Escrow Agent shall return the Initial Deposit to Purchaser. If Purchaser fails to provide Seller with written notice of termination prior to the expiration of the Feasibility Period, Purchaser's right to terminate under this Section 3.2 shall be permanently waived and this Contract shall remain in full force and effect, the Deposit then on deposit with the Escrow Agent shall be non-refundable except as otherwise expressly set forth in this Contract, including without limitation Section 4.6, and Purchaser's obligation to purchase the Property shall be conditioned only as provided in Section 8.1.
Purchaser shall not permit any mechanics' 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 reasonable advance notice to Seller prior to any 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 Inspections, and all equipment, materials and substances generated, used or brought onto the Property pose no material threat to the safety of persons, property or the environment.
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, (b) if any such Property Contract cannot by its terms be terminated at Closing and Purchaser shall fail to terminate this Agreement prior to the expiration of the Feasibility Period, 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, or to the extent any Property Contract assumed by Purchaser cannot be terminated and there is a penalty, premium or damages, including liquidated damages, Seller shall be solely responsible for the payment of any such cancellation fees, penalties, or damages, including liquidated damages. If Purchaser fails to deliver the Property Contracts Notice on or before the expiration of the Feasibility Period, then there shall be no Terminated Contracts and Purchaser shall assume all Property Contracts at the Closing. If Purchaser delivers the Property Contracts Notice to Seller on or before the expiration of the Feasibility Period, then Seller shall execute and deliver, on or before Closing, 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"). To the extent that any Property Contract to be assigned to Purchaser requires vendor consent, then, prior to the Closing, Purchaser and Seller shall attempt to obtain from each applicable vendor a consent (each a "Required Assignment Consent") to such assignment, and if such consent is not obtained, the Property Contract shall be deemed terminated at Closing, and Seller shall be solely responsible for the payment of any such cancellation fees, penalties, or damages, including liquidated damages.
Purchaser acknowledges that, prior to the Effective Date, Purchaser has received from Title Insurer, a commitment for owner's title insurance, file no. 11330163 with regard to the Property ("Title Commitment") to provide a standard American Land Title Association owner's title insurance policy for the Land and Improvements, using the current policy jacket customarily provided by the 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"). 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. Seller shall be responsible only for payment of the base premium for the Title Policy and the cost of any endorsements which may be obtained by Seller at its sole option (and which would not otherwise be addressed through Extended Coverage) in order to cure or insure over a title matter that is the subject of an Objection raised under Section 4.3 or a New Exception under Section 4.6.
Purchaser acknowledges that, prior to the Effective Date, Purchaser has received from Seller the existing survey of the Property dated June 29, 2001 and prepared by Van Cleave and Associates (the "Existing Survey"). Seller shall promptly following the Effective Date order and provide to Purchaser an updated ALTA/ACSM survey of the Property to be prepared by a surveyor previously approved by the parties (such updated survey, together with the Existing Survey, is referred to herein as the "Survey").
On or before April 12, 2011 (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 and 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 April 18, 2011 (the "Response Deadline"), Seller may, in Seller's sole discretion, give Purchaser notice (the "Response Notice") of those Objections which Seller is willing to cure, if any. Seller shall be entitled to reasonable adjournments of the Closing Date to cure the Objections, not to exceed 30 days in the aggregate. 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 the lack of 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. In the event Purchaser has not received the Survey at least 7 days prior to the Objection Deadline, any Objection based on the Survey shall be treated as a New Exception under Section 4.6 if made by Purchaser not later than 5 Business Days after Purchasers receipt of the Survey.
The Deed delivered pursuant to this Contract shall be subject to the following, all of which shall be deemed "Permitted Exceptions":
It is understood and agreed that, whether or not Purchaser gives an Objection Notice with respect thereto, any deeds of trust and/or mortgages (collectively, the "Deed of Trust") shall not be deemed Permitted Exceptions, 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.
With respect to the Survey, if at any time within 5 Business Days after Purchasers receipt of the Survey, or, with respect to any update to the Title Commitment or Survey after the expiration of the Feasibility Period, the Survey or such update, as the case may be, discloses any additional item that materially adversely affects title to the Property which was not disclosed on any version of or update to the Title Commitment delivered to Purchaser during the Feasibility Period (the "New Exception"), Purchaser shall have a period of 5 Business Days from the date of its receipt of such Survey or 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, not to exceed 30 days in the aggregate. If Seller fails to deliver a notice to Purchaser within 3 days after the expiration of the New Exception Review Period, Seller shall be deemed to have elected not to cure the New Exception. If Purchaser is dissatisfied with Seller's response, or lack thereof, Purchaser may, as its exclusive remedy elect either: (i) to terminate this Contract, in which event the Deposit shall be promptly returned to Purchaser or (ii) to waive the New Exception and proceed with the transactions contemplated by this Contract, in which event Purchaser shall be deemed to have approved the New Exception. If Purchaser fails to timely elect either of the options provided in clause (i) or (ii) above within 5 Business Days after the expiration of the New Exception Review Period, Purchaser shall be deemed to have elected to disapprove the New Exceptions and this Contract shall be terminated, in which event the Deposit shall be promptly returned to Purchaser.
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.
Purchaser acknowledges that the HAP Tenant Based Voucher Contracts require 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 assumption of the HAP Tenant Based Voucher Contracts. The HAP Tenant Based Voucher Contracts shall be subject to Purchasers due diligence rights pursuant to Section 3.1 above. Purchaser agrees that, at the Closing, either (a) Purchaser shall assume all obligations under the HAP Tenant Based Voucher Contracts and accept title to the Property subject to the same, or (b) the existing HAP Tenant Based Voucher Contracts shall be terminated, and Purchaser shall enter into replacement HAP Tenant Based Voucher Contracts which are acceptable to the Housing Authority (collectively, the foregoing (a) and (b) referred to herein as the "HAP Tenant Based Voucher Assumption"). Purchaser shall indemnify and hold the Seller and the Sellers Indemnified Parties harmless from and against any and all claims, losses, damages, and expenses (including reasonable attorneys fees) that may be incurred by Seller and/or any of the Sellers Indemnified Parties from and after the Closing Date, in connection with the HAP Tenant Based Voucher Assumption.
The Closing shall occur on May 17, 2011 (the "Closing Date") through an escrow with Escrow Agent, whereby Seller, Purchaser and their attorneys need not be physically present at the Closing and may deliver documents by overnight air courier or other means. Notwithstanding the foregoing to the contrary, in the event Seller shall elect to file an Information Statement (as defined in Section 8.2.4) Seller shall have the option, by delivering written notice to Purchaser not later than 3 Business Days prior to the then-scheduled Closing Date to extend the Closing Date to June 16, 2011.
Except for the closing statement (which shall be delivered on or before the Closing Date), Seller shall deliver to Escrow Agent, each of the following items no later than 1 Business Day prior to the Closing Date:
Except for: (i) the closing statement which shall be delivered on or before the Closing Date, and (ii) the balance of the Purchase Price which is to be delivered at the time specified in Section 2.2.3, Purchaser shall deliver to Escrow Agent, each of the following items no later than 1 Business Day prior to the Closing Date:
Purchaser or Seller may request that Purchaser and Seller undertake to re-adjust any item on the Proration Schedule (or any item omitted therefrom), with the exception of real property taxes which shall be final and not subject to readjustment, in accordance with the provisions of Section 5.4 of this Contract; provided, however, that neither party shall have any obligation to re-adjust any items (a) after the expiration of 120 days after Closing, or (b) subject to such 120-day period, unless such items exceed $2,500.00 in the aggregate.
Except, in all cases, for any fact, information or condition disclosed in the Title Documents, the Permitted Exceptions, the Property Contracts, or the Materials, or which is otherwise disclosed in writing to Purchaser prior to Closing, Seller represents and warrants to Purchaser the following (collectively, the "Seller's Representations") as of the Effective Date and as of the Closing Date; provided that Purchaser's remedies if any such Seller's Representations are untrue as of the Closing Date are limited to those set forth in Section 8.1.
Except as otherwise expressly set forth in Seller's Representations:
Seller and Purchaser agree that Seller's Representations shall survive Closing for a period of 9 months (the "Survival Period"). Seller shall have no liability after the Survival Period with respect to Seller's Representations contained herein except to the extent that Purchaser has requested arbitration against Seller during the Survival Period for breach of any of Seller's Representations. Under no circumstances shall Seller be liable to Purchaser for more than $750,000 in any individual instance or in the aggregate for all breaches of Seller's Representations, nor shall Purchaser be entitled to bring any claim for a breach of Seller's Representations unless the claim for damages (either in the aggregate or as to any individual claim) by Purchaser exceeds $5,000. In the event that Seller breaches any representation contained in Section 6.1 and Purchaser had knowledge of such breach prior to the Closing Date, and elected to close regardless, Purchaser shall be deemed to have waived any right of recovery, and Seller shall not have any liability in connection therewith. In the event that Sellers breach under Section 6.1 shall fail to satisfy the condition set forth in Section 8.1 and Purchaser, prior to the scheduled Closing Date, notifies Seller in writing that it will not close due to such failure, and if Purchaser thereafter does not close, then Purchaser, as its sole and exclusive remedy against Seller, shall be entitled to recover on account of such failure and Purchasers refusal to close, its actual and verifiable third party costs and expenses incurred in connection with its performance of its obligations under this Contract for its negotiation of this Contract, conduct of due diligence, loan commitment fees and closing preparations, if applicable, not to exceed $100,000 in the aggregate.
Any representations and warranties made "to the knowledge of Seller" shall not be deemed to imply any duty of inquiry. For purposes of this Contract, the term Seller's "knowledge" shall mean and refer only to actual knowledge of the Regional Property Manager and the Community Manager (whom Seller represents are the individuals primarily responsible for the day-to-day management of the Property) and shall not be construed to refer to the knowledge of any other partner, officer, director, agent, employee or representative of Seller, or any affiliate of Seller, or to impose upon such Regional Property Manager and Community Manager any duty to investigate the matter to which such actual knowledge or the absence thereof pertains, or to impose upon such Regional Property Manager and Community Manager any individual personal liability. As used herein, the term "Regional Property Manager" shall refer to Douglas MacArthur who is the regional property manager handling this Property and the term "Community Manager" shall refer to Marita Stampfli who is the community manager handling this Property.
For the purpose of inducing Seller to enter into this Contract and to consummate the sale and purchase of the Property in accordance herewith, Purchaser represents and warrants to Seller the following as of the Effective Date and as of the Closing Date:
During the period of time from the Effective Date to the Closing Date, in the ordinary course of business Seller may enter into new Property Contracts, new Leases, renew existing Leases or modify, terminate or accept the surrender or forfeiture of any of the Leases, modify any Property Contracts, or institute and prosecute any available remedies for default under any Lease or Property Contract without first obtaining the written consent of Purchaser; provided, however, Seller agrees that, without the prior written consent of Purchaser, which consent shall not be unreasonably withheld, conditioned or delayed, any new or renewed Leases: (i) shall be on terms consistent with Sellers current leasing practices and (ii) shall not have a term in excess of 14 months and any new Property Contract shall be terminable upon not more than 30 days notice without penalty.
Except as specifically set forth in this Article VII, Seller shall operate the Property after the Effective Date in the ordinary course of business, and except as necessary in Seller's sole discretion to address (a) any life or safety issue at the Property or (b) any other matter which in Seller's reasonable discretion materially adversely affects the use, operation or value of the Property, Seller will not make any material alterations to the Property or remove any material Fixtures and Tangible Personal Property without the prior written consent of Purchaser which consent shall not be unreasonably withheld, denied or delayed.
Other than utility easements and temporary construction easements granted by Seller in the ordinary course of business, Seller covenants that it will not voluntarily create or cause any lien or encumbrance to attach to the Property between the Effective Date and the Closing Date (other than Leases and Property Contracts as provided in Section 7.1) unless Purchaser approves such lien or encumbrance, which approval shall not be unreasonably withheld, conditioned or delayed. If Purchaser approves any such subsequent lien or encumbrance, the same shall be deemed a Permitted Encumbrance for all purposes hereunder. Without limiting the generality of this Section 7.3, Purchaser acknowledges that (i) Seller has agreed to grant King County Metro Transit a temporary construction license for the purpose of upgrading a bus shelter located on the Property (at the sole cost and expense of King County Metro Transit) and (ii) such temporary construction license shall be deemed a Permitted Exception for all purposes hereunder, subject to Purchasers due diligence rights under Section 3.1 above.
If any tax reduction proceedings, tax protest proceedings or tax assessment appeals for the Property, relating to any Tax Year through and including the Tax Year in which the Closing occurs, are pending at the time of Closing, Seller reserves and shall have the right to continue to prosecute and/or settle the same without the consent of Purchaser including, without limitation, instituting any tax reduction proceeding, tax protest proceeding or tax assessment appeal for the Property with respect to property values determined during the Tax Year that the Closing occurs, but attributable to Tax Years after the Closing. Seller hereby reserves and shall have the exclusive right, at any time after the Closing Date, to institute a tax reduction proceeding, tax protest proceeding or tax assessment appeal for the Property with respect to real estate taxes attributable to the Tax Years prior to and including the Tax Year in which the Closing occurs and Seller shall have the right to prosecute and/or settle the same without the consent of Purchaser. Purchaser agrees that it shall not independently institute any tax reduction proceedings, tax protest proceedings, or tax assessment appeals for the Property with respect to the Tax Years prior to and including the Tax Year in which the Closing occurs. Purchaser shall cooperate with Seller in connection with the prosecution and/or settlement of any such tax reduction proceedings, tax protest proceedings or tax assessment appeals, including executing such documents as Seller may reasonably request in order for Seller to prosecute and/or settle any such proceedings. Any refunds or savings in the payment of taxes resulting from any tax reduction proceedings, tax protest proceedings or tax assessment appeals applicable to the period prior to the Closing Date shall belong to Seller and any refunds or savings in the payment of taxes applicable to the period from and after the Closing Date shall belong to Purchaser. All attorneys fees and other expenses incurred in obtaining such refunds or savings shall be apportioned between Seller and Purchaser in proportion to the gross amount of such refunds or savings payable to Seller and Purchaser, respectively. For purposes of this Section 7.4, Tax Year shall mean each 12-month period for which the applicable taxing authority assesses property taxes or other similar taxes or assessments, which may or may not be a calendar year.
Purchaser's obligation to close under this Contract shall be subject to and conditioned upon the fulfillment of the following conditions precedent:
Notwithstanding anything to the contrary, there are no other conditions to Purchaser's obligation to Close except as expressly set forth in this Section 8.1. If any condition set forth in this Section 8.1 is not met, Purchaser may (a) waive any of the foregoing conditions and proceed to Closing on the Closing Date with no offset or deduction from the Purchase Price, (b) terminate this Contract and receive a return of the Deposit from the Escrow Agent, or (c) if such failure constitutes a default by Seller of its covenants hereunder, exercise any of its remedies pursuant to Section 10.2.
Without limiting any of the rights of Seller elsewhere provided for in this Contract, Seller's obligation to close with respect to conveyance of the Property under this Contract shall be subject to and conditioned upon the fulfillment of the following conditions precedent:
If any of the foregoing conditions to Seller's obligations to close with respect to the conveyance of the Property under this Contract are not met, Seller may (a) waive any of the foregoing conditions and proceed to Closing on the Closing Date, (b) terminate this Contract, or (c) if such failure constitutes a default by Purchaser, exercise any of its remedies pursuant to Section 10.1. If Seller terminates this Contract due to a failure of the condition set forth in Section 8.2.4, then Seller shall reimburse Purchaser for Purchasers actual and verifiable third party costs and expenses incurred in connection with its performance of its obligations under this Contract for its negotiation of this Contract, conduct of due diligence, loan commitment fees and closing preparations, if applicable, not to exceed $100,000 in the aggregate.
Seller represents and warrants to Purchaser that it has dealt only with Jon Hallgrimson of CB Richard Ellis, Multi-Housing Properties Group, located at 1420 Fifth Avenue, Suite 1700, Seattle, Washington 98101 ("Broker") in connection with this Contract. Seller and Purchaser each represents and warrants to the other that, other than Broker, it has not dealt with or utilized the services of any other real estate broker, sales person or finder in connection with this Contract, and each party agrees to indemnify, hold harmless, and, if requested in the sole and absolute discretion of the indemnitee, defend (with counsel approved by the indemnitee) the other party from and against all Losses relating to brokerage commissions and finder's fees arising from or attributable to the acts or omissions of the indemnifying party.
If Closing occurs, Seller agrees to pay Broker a commission according to the terms of a separate contract. Broker shall not be deemed a party or third party beneficiary of this Contract. As a condition to Seller's obligation to pay the commission, Broker shall execute the signature page for Broker attached hereto solely for purposes of confirming the matters set forth therein.
If Purchaser defaults in its obligation hereunder to deliver the Initial Deposit this Agreement shall be null and void, and neither party shall have any further obligation or liability to the other, except for Purchaser's indemnity and confidentiality obligations hereunder. If Purchaser defaults in its obligation hereunder to (a) deliver the Additional Deposit (or any other deposit or payment required of Purchaser hereunder), (b) deliver to Seller the deliveries specified under Section 5.3 on the date required thereunder, or (c) deliver the Purchase Price in accordance with Article II and do all things required of Purchaser under this Agreement to close on the purchase of the Property on the Closing Date, then, immediately and without the right to receive notice or to cure pursuant to Section 2.3.3, Purchaser shall forfeit the Deposit on deposit with the Escrow Agent, and the Escrow Agent shall deliver the Deposit to Seller, and neither party shall be obligated to proceed with the purchase and sale of the Property. If Purchaser defaults on any of its representations, warranties or other obligations under this Contract in any material adverse way, and such default continues for more than 10 days after written notice from Seller, then Purchaser shall forfeit the Deposit on deposit with the Escrow Agent, and the Escrow Agent shall deliver the Deposit to Seller, and neither party shall be obligated to proceed with the purchase and sale of the Property. The Deposit is liquidated damages and recourse to the Deposit is, except for Purchaser's indemnity and confidentiality obligations hereunder, Seller's sole and exclusive remedy for Purchaser's failure to perform its obligation to purchase the Property or breach of a representation or warranty. Seller expressly waives the remedies of specific performance and additional damages for such default by Purchaser. AS AUTHORIZED BY RCW 64.04.005, IN THE EVENT PURCHASER FAILS, WITHOUT LEGAL EXCUSE, TO COMPLETE PURCHASE OF THE PROPERTY, THE EARNEST MONEY DEPOSIT MADE BY PURCHASER SHALL BE FORFEITED TO SELLER AS THE SOLE AND EXCLUSIVE REMEDY AVAILABLE TO SELLER FOR SUCH FAILURE.. SELLER AND PURCHASER ACKNOWLEDGE THAT SELLER'S DAMAGES WOULD BE DIFFICULT TO DETERMINE, AND THAT THE DEPOSIT ON DEPOSIT WITH ESCROW AGENT IS A REASONABLE ESTIMATE OF SELLER'S DAMAGES RESULTING FROM A DEFAULT BY PURCHASER IN ITS OBLIGATION TO PURCHASE THE PROPERTY. SELLER AND PURCHASER FURTHER AGREE THAT THIS SECTION 10.1 IS INTENDED TO AND DOES LIQUIDATE THE AMOUNT OF DAMAGES DUE SELLER, AND SHALL BE SELLER'S EXCLUSIVE REMEDY AGAINST PURCHASER, BOTH AT LAW AND IN EQUITY, ARISING FROM OR RELATED TO A BREACH BY PURCHASER OF ITS OBLIGATION TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS CONTRACT, OTHER THAN WITH RESPECT TO PURCHASER'S INDEMNITY AND CONFIDENTIALITY OBLIGATIONS HEREUNDER.
If Seller (i) defaults in its obligations hereunder to deliver to Escrow Agent the deliveries specified under Section 5.2 on the date required thereunder, or to close on the sale of the Property on the Closing Date, or (ii) prior to the Closing defaults on its covenants or obligations under this Contract in any material way, and such default continues for more than 10 days after written notice from Purchaser, then, at Purchaser's election and as Purchaser's exclusive remedy, Purchaser may either (a) terminate this Contract, and all payments and things of value, including the Deposit, provided by Purchaser hereunder shall be returned to Purchaser and Purchaser may recover, as its sole recoverable damages (but without limiting its right to receive a refund of the Deposit), its direct and actual out-of-pocket expenses and costs (documented by paid invoices to third parties) in connection with this transaction, which damages shall not exceed $100,000 in the aggregate, or (b) subject to the conditions below, seek specific performance of Sellers obligation to close on the sale of the Property pursuant to this Contract (but not damages), including injunctive and equitable relief and lis pendens to prevent the sale of the Property to a third party. Purchaser may seek specific performance of Seller's obligation to close on the sale of the Property pursuant to this Contract only if, as a condition precedent to initiating such litigation for specific performance, Purchaser shall (x) not otherwise be in default under this Contract in any material way; and (y) file suit therefor with the court on or before the 90th day after the Closing Date. If Purchaser fails to file an action for specific performance within 90 days after the Closing Date, then Purchaser shall be deemed to have elected to terminate the Contract in accordance with subsection (a) above. Purchaser agrees that it shall promptly deliver to Seller an assignment of all of Purchaser's right, title and interest in and to (together with possession of) all plans, studies, surveys, reports, and other materials, exclusive of attorneys files and documents, legally privileged documents and internal or proprietary documents of Purchaser, paid for with the out-of-pocket expenses reimbursed by Seller pursuant to the foregoing sentence. SELLER AND PURCHASER FURTHER AGREE THAT THIS SECTION 10.2 IS INTENDED TO AND DOES LIMIT THE AMOUNT OF DAMAGES DUE PURCHASER AND THE REMEDIES AVAILABLE TO PURCHASER, AND SHALL BE PURCHASER'S EXCLUSIVE REMEDY AGAINST SELLER, BOTH AT LAW AND IN EQUITY ARISING FROM OR RELATED TO A BREACH BY SELLER OF ITS COVENANTS OR ITS OBLIGATION TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS CONTRACT. UNDER NO CIRCUMSTANCES MAY PURCHASER SEEK OR BE ENTITLED TO RECOVER ANY SPECIAL, CONSEQUENTIAL, PUNITIVE, SPECULATIVE OR INDIRECT DAMAGES, ALL OF WHICH PURCHASER SPECIFICALLY WAIVES, FROM SELLER FOR ANY BREACH BY SELLER, OF ITS COVENANTS OR ITS OBLIGATIONS UNDER THIS CONTRACT. PURCHASER SPECIFICALLY WAIVES THE RIGHT TO FILE ANY LIS PENDENS OR ANY LIEN AGAINST THE PROPERTY UNLESS AND UNTIL IT HAS IRREVOCABLY ELECTED TO SEEK SPECIFIC PERFORMANCE OF THIS CONTRACT AND HAS FILED AND IS DILIGENTLY PURSUING AN ACTION SEEKING SUCH REMEDY.
If that the Property is damaged or destroyed by fire or other casualty prior to Risk of Loss Transfer, and the cost for demolition, site cleaning, restoration, replacement, or other repairs (collectively, the "Repairs") is more than $2,510,000.00 (a "Major Damage"), then Seller shall have no obligation to make such Repairs, and shall notify Purchaser in writing of such damage or destruction (the "Damage Notice"). If there is a Major Damage, then Purchaser may elect, by delivering written notice to Seller on or before the earlier of (x) Closing and (y) the date which is ten (10) days after Purchaser's receipt of the Damage Notice (the Closing Date being adjourned to permit such election, if necessary), to terminate this Contract, in which event the Deposit shall be returned to Purchaser. In the event Purchaser fails to timely terminate this Contract pursuant to this Section 11.1, this transaction shall be closed in accordance with Section 11.3 below.
If the Property is damaged or destroyed by fire or other casualty prior to Risk of Loss Transfer, and the cost of Repairs is equal to or less than $2,510,000.00, then this transaction shall be closed in accordance with Section 11.3, notwithstanding such casualty. In such event, Seller may at its election endeavor to make such Repairs to the extent of any recovery from insurance carried on the Property, if such Repairs can be reasonably effected before the Closing. Regardless of Seller's election to commence such Repairs, or Seller's ability to complete such Repairs prior to Closing, this transaction shall be closed in accordance with Section 11.3 below.
If Purchaser fails to terminate this Contract following a casualty as set forth in Section 11.1, or in the event of a casualty as set forth in Section 11.2, then this transaction shall be closed in accordance with the terms of the Contract, for the full Purchase Price, notwithstanding any such casualty, in which case Purchaser shall, at Closing, execute and deliver an assignment and assumption (in a form reasonably required by Seller) of Seller's rights and obligations with respect to the insurance claim related to such casualty, and thereafter Purchaser shall receive all insurance proceeds pertaining to such claim, including loss of rents coverage, less any amounts which may already have been spent by Seller for Repairs (plus a credit against the Purchase Price at Closing in the amount of any deductible payable by Seller in connection therewith); provided, however, that if the insurer refuses for any reason to approve the assignment of loss proceeds to Purchaser, then Purchaser shall close and pay the full Purchase Price less a credit to Purchaser in the amount necessary to complete such Repairs (less any amounts which may already have been spent by Seller for Repairs), including, if applicable, loss of rents for the estimated repair period through issuance of all applicable certificates of occupancy.
To the extent that Seller elects to commence any Repairs prior to Closing, then Seller shall be entitled to receive and apply available insurance proceeds to any portion of such Repairs completed or installed prior to Closing, with Purchaser being responsible for completion of such Repairs after Closing. To the extent that any Repairs have been commenced prior to Closing, then the Property Contracts shall include, and Purchaser shall assume at Closing, all construction and other contracts entered into by Seller in connection with such Repairs; provided however, that (except in the event of emergency, as determined in Sellers sole discretion) Seller will consult with Purchaser prior to entering into any such contract if Purchaser will likely have to assume such Contract. Notwithstanding the foregoing to the contrary, Seller retains the sole right and authority to enter into any such contract, subject to Sellers obligations provided in this Section 11.4.
If, at the time of Closing, any material part of the Property is (or previously has been) acquired, or is about to be acquired, by any governmental agency by the powers of eminent domain or transfer in lieu thereof (or in the event that at such time there is any notice of any such acquisition or intent to acquire by any such governmental agency), Seller shall provide prompt written notice thereof to Purchaser and Purchaser shall have the right, at Purchaser's option, to terminate this Contract by giving written notice within 10 days after Purchaser's receipt from Seller of notice of the occurrence of such event (and the Closing shall be adjourned as necessary to permit same). If Purchaser so terminates this Contract, Purchaser shall recover the Deposit hereunder. If Purchaser fails to terminate this Contract within such 10-day period, this transaction shall be closed in accordance with the terms of this Contract for the full Purchase Price and Purchaser shall receive the full benefit of any condemnation award. It is expressly agreed between the parties hereto that this section shall in no way apply to customary dedications for public purposes which may be necessary for the development of the Property.
This Contract shall not be binding on either party until executed by both Purchaser and Seller. Neither the Escrow Agent's nor the Broker's execution of this Contract shall be a prerequisite to its effectiveness. Subject to Section 13.3, this Contract shall be binding upon and inure to the benefit of Seller and Purchaser, and their respective successors and permitted assigns.
All Exhibits and Schedules, whether or not annexed hereto, are a part of this Contract for all purposes.
Except to the extent required to comply with the provisions of Section 13.18 related to a 1031 Exchange and as otherwise provided hereinbelow, this Contract is not assignable by Purchaser without first obtaining the prior written approval of Seller. Notwithstanding the foregoing, Purchaser may assign this Contract, without first obtaining the prior written approval of Seller, to one or more entities so long as (a) Purchaser is an affiliate of the purchasing entity(ies), (b: (i) any member, principal, officer, director, partner or affiliate of Purchaser, singly or in any combination or to any trust established by any of the foregoing for tax or estate planning purposes, (ii) any corporation, general or limited partnership, limited liability company, limited liability partnership, trust, or other entity owned or controlled by Purchaser or any one or more of the individuals or entities described in clause (i) above (control being defined for these purposes as either (A) ownership or the ability to vote or direct the vote of no less than a majority of the ownership interest or voting shares of an entity or (B) designation as manager, managing member, general partner or equivalent), (iii) any corporation, partnership, limited liability company, limited liability partnership, or other entity as to which Bryan Ezralow, Marc Ezralow, David Leff, Gary Freedman, and/or any member, principal, officer, director, or partner of Purchaser, singly or in any combination or to any trust established by any of the foregoing for tax or estate planning purposes, or entity owned or controlled by any of the foregoing, is the managing member, manager, general partner, controlling shareholder or equivalent of such entity; (iv) Purchaser is not released from its liability hereunder in the absence of performance by it assignee, and (c) Purchaser provides written notice to Seller of any proposed assignment no later than three (3) Business Days prior to the Closing Date. As used herein, an affiliate is a person or entity controlled by, under common control with, or controlling another person or entity.
The captions, headings, and arrangements used in this Contract are for convenience only and do not in any way affect, limit, amplify, or modify the terms and provisions hereof.
Whenever herein the singular number is used, the same shall include the plural where appropriate, and words of any gender shall include each other gender where appropriate.
All notices, demands, requests and other communications required or permitted hereunder shall be in writing, and shall be (a) personally delivered with a written receipt of delivery; (b) sent by a nationally-recognized overnight delivery service requiring a written acknowledgement of receipt or providing a certification of delivery or attempted delivery; (c) sent by certified or registered mail, return receipt requested; or (d) sent by confirmed facsimile transmission or electronic delivery with an original copy thereof transmitted to the recipient by one of the means described in subsections (a) through (c) no later than 3 Business Days thereafter. All notices shall be deemed effective when actually delivered as documented in a delivery receipt; provided, however, that if the notice was sent by overnight courier or mail as aforesaid and is affirmatively refused or cannot be delivered during customary business hours by reason of the absence of a signatory to acknowledge receipt, or by reason of a change of address with respect to which the addressor did not have either knowledge or written notice delivered in accordance with this paragraph, then the first attempted delivery shall be deemed to constitute delivery. Each party shall be entitled to change its address for notices from time to time by delivering to the other party notice thereof in the manner herein provided for the delivery of notices. All notices shall be sent to the addressee at its address set forth following its name below:
To Purchaser:
The Ezralow Company, LLC
23622 Clabasas Rd., Suite 200
Calabasas,
CA 91302
Attention: David Leff
Telephone:
818-223-3535
Facsimile: 818-223-3536
Email: dleff@ezralow.com
James C. Hughes, a Professional Corporation
23622 Calabasas Rd., Suite 110
Calabasas, California 91302
Attention: James C. Hughes, Esq.
Telephone: 818-429-0188
Facsimile: 818-225-9513
Email: jhughes@jimhugheslaw.com
To
Seller:
c/o AIMCO
4582 South Ulster Street Parkway
Suite
1100
Denver, Colorado 80237
Attention: Mark
Reoch
Telephone: 303-691-4337
Facsimile: 303-300-3261
Email: mark.reoch@aimco.com
And:
c/o
AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver,
Colorado 80237
Attention: John Bezzant
Telephone: 303-793-4774
Email:
john.bezzant@aimco.com
with
copy to:
AIMCO
4582 South Ulster Street Parkway
Suite
1100
Denver, Colorado 80237
Attention: John Spiegleman,
Esq.
Telephone: 303-691-4303
Facsimile: 720-200-6882
Email:
john.spiegleman@aimco.com
and a copy to:
Bryan Cave LLP
1290 Avenue of
the Americas
New York, New York 10104
Attention: Sandor A. Green,
Esq.
Telephone: 212-541-2049
Facsimile: 212-541-1449
Email: sagreen@bryancave.com
Any notice required hereunder to be delivered to the Escrow Agent shall be delivered in accordance with above provisions as follows:
Stewart Title Guaranty Company
1980 Post Oak Boulevard, Suite 610
Houston, TX 77056
Attention: Wendy Howell
Telephone: 800-729-1906
Facsimile: 713-552-1703
Email: Whowell@stewart.com
Unless specifically required to be delivered to the Escrow Agent pursuant to the terms of this Contract, no notice hereunder must be delivered to the Escrow Agent in order to be effective so long as it is delivered to the other party in accordance with the above provisions.
The laws of the State of Washington shall govern the validity, construction, enforcement, and interpretation of this Contract, unless otherwise specified herein except for the conflict of laws provisions thereof. All claims, disputes and other matters in question arising out of or relating to this Contract, or the breach thereof, shall be decided by proceedings instituted and litigated in a court of competent jurisdiction in the state in which the Property is situated, and the parties hereto expressly consent to the venue and jurisdiction of such court.
This Contract embodies the entire Contract between the parties hereto concerning the subject matter hereof and supersedes all prior conversations, proposals, negotiations, understandings and contracts, whether written or oral.
This Contract shall not be amended, altered, changed, modified, supplemented or rescinded in any manner except by a written contract executed by all of the parties; provided, however, that, (a) the signature of the Escrow Agent shall not be required as to any amendment of this Contract other than an amendment of Section 2.3, and (b) the signature of the Broker shall not be required as to any amendment of this Contract.
In the event that any part of this Contract shall be held to be invalid or unenforceable by a court of competent jurisdiction, such provision shall be reformed, and enforced to the maximum extent permitted by law. If such provision cannot be reformed, it shall be severed from this Contract and the remaining portions of this Contract shall be valid and enforceable.
This Contract may be executed in a number of identical counterparts. This Contract may be executed by facsimile signatures or electronic delivery of signatures which shall be binding on the parties hereto, with original signatures to be delivered as soon as reasonably practical thereafter.
No provision of this Contract shall be construed in favor of, or against, any particular party by reason of any presumption with respect to the drafting of this Contract; both parties, being represented by counsel, having fully participated in the negotiation of this instrument.
Seller and Purchaser shall not disclose the terms and conditions contained in this Contract and shall keep the same confidential, provided that each may disclose the terms and conditions of this Contract (a) as required by law, (b) to consummate the terms of this Contract, or any financing relating thereto, or (c) to its lenders, brokers, attorneys, accountants, consultants, investors, property managers, insurers, and others required to consummate the Closing (the Disclosure Parties). Furthermore, Seller may disclose the terms and conditions of this Contract as is necessary, in Seller's sole discretion, in order for Seller to make any public disclosures required under federal or state securities laws or regulations. Any information obtained by Purchaser in the course of its inspection of the Property, and any Materials provided by Seller to Purchaser hereunder, shall be confidential and Purchaser shall be prohibited from making such information public to any other person or entity other than the Disclosure Parties, without Seller's prior written authorization, which may be granted or denied in Seller's sole discretion. In addition, each party shall use its reasonable efforts to prevent its Disclosure Parties from divulging any such confidential information to any unrelated third parties except for the limited purpose of analyzing and investigating such information for the purpose of consummating the transaction contemplated by this Contract. Unless and until the Closing occurs, or, as to Seller, unless and until any earlier termination of this Contract, neither Seller nor Purchaser shall market the Property (or any portion thereof) to any prospective purchaser or lessee, except for Sellers right to lease the Property in the ordinary course of business as provided in this Contract, without the prior written consent of the other, which consent may be withheld in such other partys sole discretion.
It is expressly agreed by the parties hereto that time is of the essence with respect to this Contract and any aspect thereof.
No delay or omission to exercise any right or power accruing upon any default, omission, or failure of performance hereunder shall impair any right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. No waiver, amendment, release, or modification of this Contract shall be established by conduct, custom, or course of dealing and all waivers must be in writing and signed by the waiving party.
In the event either party hereto commences any legal action or proceeding or arbitration against the other to enforce its rights hereunder, the prevailing party in such action, proceeding or arbitration shall be entitled to recover from the other party its reasonable attorneys' fees and expenses incidental thereto, including the cost of in-house counsel and any appeals.
Any reference in this Contract to a specific time shall refer to the time in the time zone where the Property is located. (For example, a reference to 3:00 p.m. refers to 3:00 p.m. PST, or, if applicable, PDT if the Property is located in Seattle, Washington.) Should the last day of a time period fall on a weekend or legal holiday, the next Business Day thereafter shall be considered the end of the time period.
Seller and Purchaser acknowledge and agree that the purchase and sale of the Property may be part of a tax-free exchange for either Purchaser or Seller pursuant to Section 1031 of the Code, the regulations promulgated thereunder, revenue procedures, pronouncements and other guidance issued by the Internal Revenue Service. Each party hereby agrees to cooperate with each other and take all reasonable steps on or before the Closing Date to facilitate such exchange if requested by the other party, provided that (a) no party making such accommodation shall be required to acquire any substitute property, (b) such exchange shall not affect the representations, warranties, liabilities and obligations of the parties to each other under this Contract, (c) no party making such accommodation shall incur any material additional cost, expense or liability in connection with such exchange (other than expenses of reviewing and executing documents required in connection with such exchange), and (d) no dates in this Contract will be extended as a result thereof, except as specifically provided herein.
Purchaser acknowledges that this Contract is entered into by Seller which is a Delaware limited partnership, and Purchaser agrees that none of Seller's Indemnified Parties shall have any personal liability under this Contract or any document executed in connection with the transactions contemplated by this Contract. Seller acknowledges that this Contract is entered into by Purchaser which is a Delaware limited liability company and Seller agrees that none of Purchaser, or Purchasers partners, managers, members, investors, employees, officers, directors, trustees, shareholders, counsel, representatives, or agents shall have any personal liability under this Contract or any document executed in connection with the transactions contemplated by this Contract.
Purchaser acknowledges that the Property may be subject to the federal Americans With Disabilities Act (the "ADA") and the federal Fair Housing Act (the "FHA"). The ADA requires, among other matters, that tenants and/or owners of "public accommodations" remove barriers in order to make the Property accessible to disabled persons and provide auxiliary aids and services for hearing, vision or speech impaired persons. Seller makes no warranty, representation or guarantee of any type or kind with respect to the Property's compliance with the ADA or the FHA (or any similar state or local law), and Seller expressly disclaims any such representations.
Purchaser shall not cause or allow this Contract or any contract or other document related hereto, nor any memorandum or other evidence hereof, to be recorded or become a public record without Seller's prior written consent, which consent may be withheld at Seller's sole discretion. If Purchaser records this Contract or any other memorandum or evidence thereof, Purchaser shall be in default of its obligations under this Contract. Purchaser hereby appoints Seller as Purchaser's attorney-in-fact to prepare and record any documents necessary to effect the nullification and release of the Contract or other memorandum or evidence thereof from the public records. This appointment shall be coupled with an interest and irrevocable.
Purchaser and Seller acknowledge and agree that the relationship established between the parties pursuant to this Contract is only that of a seller and a purchaser of property. Neither Purchaser nor Seller is, nor shall either hold itself out to be, the agent, employee, joint venturer or partner of the other party.
Purchaser agrees that Seller, the Property Manager or AIMCO, or their respective affiliates, are the sole owners of all right, title and interest in and to the AIMCO Marks (or have the right to use such AIMCO Marks pursuant to license agreements with third parties) and that no right, title or interest in or to the AIMCO Marks is granted, transferred, assigned or conveyed as a result of this Contract. Purchaser further agrees that Purchaser will not use the AIMCO Marks for any purpose.
Prior to the expiration of the Feasibility Period, Purchaser acknowledges and agrees that, without the express written consent of Seller, neither Purchaser nor any of Purchaser's employees, affiliates or agents shall solicit any of Seller's employees or any employees located at the Property (or any of Seller's affiliates' employees located at any property owned by such affiliates) for potential employment.
Except for (a) all of the provisions of this Article XIII (other than Section 13.18); (b) Sections 2.3, 3.3, 3.4, 3.5, 3.6, 4.8, 5.4, 5.5, 6.2, 6.3, 6.5, 7.4, 9.1, 11.4, and 14.2; (c) any other provisions in this Contract, that by their express terms survive the termination of this Contract or the Closing; and (d) any payment or indemnity obligation of Purchaser under this Contract (the foregoing (a), (b), (c) and (d) referred to herein as the "Survival Provisions"), none of the terms and provisions of this Contract shall survive the termination of this Contract, and if the Contract is not so terminated, all of the terms and provisions of this Contract (other than the Survival Provisions, which shall survive the Closing) shall be merged into the Closing documents and shall not survive Closing.
As used in this Contract, the term "Purchaser" includes all entities acquiring any interest in the Property at the Closing, including, without limitation, any assignee(s) of the original Purchaser pursuant to Section 13.3 of this Contract. In the event that "Purchaser" has any obligations or makes any covenants, representations or warranties under this Contract, the same shall be made jointly and severally by all entities being a Purchaser hereunder.
THE PARTIES HERETO WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY ON ANY MATTER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS CONTRACT.
13.28 WAIVER OF DISCLOSURE STATEMENT. Purchaser hereby waives (a) the receipt of the disclosure statement described in RCW Chapter 64.06, and (b) the right to rescind this Agreement based on Purchaser's lack of receipt of such disclosure statement.
Seller and Purchaser hereby acknowledge delivery of the Lead Based Paint Disclosure attached as Exhibit H hereto.
Testing (the "Testing") has been performed at the Property with respect to lead-based paint. Law Engineering and Environmental Services, Inc. performed the Testing and reported its findings in the Multifamily Component Type Report dated May 14, 2001, a copy of which has been provided to Purchaser (the "Report"). The Report certifies the Property as lead-based paint free. By execution hereof, Purchaser acknowledges receipt of a copy of the Report and the Lead-Based Paint Disclosure Statement attached hereto as Exhibit H, and acknowledges receipt of that certain Consent Agreement (the "Consent Agreement") by and among the United States Environmental Protection Agency (executed December 19, 2001), the United States Department of Housing and Urban Development (executed January 2, 2002), and AIMCO (executed December 18, 2001). Because the Property has been certified as lead based paint free, Seller is not required under the Consent Agreement to remediate or abate any lead-based paint condition at the Property prior to the Closing. Purchaser acknowledges and agrees that (1) after Closing, Purchaser and the Property shall be subject to the Consent Agreement and the provisions contained herein related thereto and (2) that Purchaser shall not be deemed to be a third party beneficiary to the Consent Agreement.
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NOW, THEREFORE, the parties hereto have executed this Contract as of the date first set forth above.
Seller:
CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3, LP, a Delaware limited partnership
By: CONCAP EQUITIES, INC., Delaware corporation, its general partner
By: /s/John Spiegleman
Name: John Spiegleman
Title: Senior Vice President
Purchaser:
THE ERZALOW COMPANY, LLC,
A Delaware limited liability company
By: /s/Cristina Agra-Hughes
Name: Cristina Agra-Hughes
Title: Senior Vice President