-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NGwwmWTcoAC73kfF9GbrY8cgeiguDDZNCKxXwmvWXLmA4OMMLH/4HFpDNSM9oM+i zeIVsSPZT48XJUlhU3DADQ== 0000711642-99-000333.txt : 19991117 0000711642-99-000333.hdr.sgml : 19991117 ACCESSION NUMBER: 0000711642-99-000333 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991115 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JOHNSTOWN CONSOLIDATED INCOME PARTNERS CENTRAL INDEX KEY: 0000787621 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 943004963 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-16010 FILM NUMBER: 99754162 BUSINESS ADDRESS: STREET 1: 1873 SOUTH BELLAIRE STREET STREET 2: 17TH FLOOR CITY: DENVER STATE: CO ZIP: 80222 BUSINESS PHONE: 3037578101 MAIL ADDRESS: STREET 1: 1873 SOUTH BELLAIRE STREET STREET 2: 17TH FLOOR CITY: DENVER STATE: CO ZIP: 80222 FORMER COMPANY: FORMER CONFORMED NAME: CONSOLIDATED CAPITAL INCOME GROWTH PARTNERS DATE OF NAME CHANGE: 19860401 10QSB 1 FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 QUARTERLY OR TRANSITIONAL REPORT U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1999 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________to _________ Commission file number 0-16010 JOHNSTOWN/CONSOLIDATED INCOME PARTNERS (Exact name of small business issuer as specified in its charter) California 94-3004963 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 55 Beattie Place, PO Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (864) 239-1000 (Issuer's telephone number) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No PART I _ FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS a) JOHNSTOWN/CONSOLIDATED INCOME PARTNERS BALANCE SHEET (Unaudited) (in thousands, except unit data) September 30, 1999 Assets Cash and cash equivalents $ 1,827 Receivables and deposits, net of allowance of $129 296 Restricted escrows 241 Other assets 409 Investment properties: Land $ 1,571 Buildings and related personal property 12,325 13,896 Less accumulated depreciation (7,065) 6,831 $ 9,604 Liabilities and Partners' (Deficit) Capital Accounts payable $ 32 Tenant security deposit liabilities 75 Accrued property taxes 116 Other liabilities 99 Mortgage note payable 2,325 Partners' (Deficit) Capital General partner $ (177) Corporate limited partner on behalf of the Unitholders - (128,810 units issued and outstanding) 7,134 6,957 $ 9,604 See Accompanying Notes to Financial Statements b) JOHNSTOWN/CONSOLIDATED INCOME PARTNERS STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data) Three Months Ended Nine Months Ended September 30, September 30, 1999 1998 1999 1998 Revenues: Rental income $ 615 $ 553 $ 1,832 $ 1,688 Other income 31 39 93 183 Casualty gain -- 11 -- 226 Total revenues 646 603 1,925 2,097 Expenses: Operating 224 234 643 678 General and administrative 54 61 208 200 Depreciation 144 133 456 397 Interest 47 46 139 138 Property taxes 38 43 82 128 Total expenses 507 517 1,528 1,541 Net income $ 139 $ 86 $ 397 $ 556 Net income allocated to general partner (1%) $ 1 $ 1 $ 4 $ 6 Net income allocated to limited partners (99%) 138 85 393 550 $ 139 $ 86 $ 397 $ 556 Net income per Unit of Depositary Receipt $ 1.07 $ .66 $ 3.05 $ 4.27 Distributions per Unit of Depositary Receipt $ 4.42 $ -- $ 4.42 $ 7.69 See Accompanying Notes to Financial Statements c) JOHNSTOWN/CONSOLIDATED INCOME PARTNERS STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (Unaudited) (in thousands, except unit data) Unitholders Units of Units of Depositary Depositary General Receipt Units Partner (Note A) Total Original capital contributions 129,266 $ 1 $32,317 $32,318 Partners' (deficit) capital at December 31, 1998 128,810 $ (175) $ 7,310 $ 7,135 Net income for the nine months ended September 30, 1999 -- 4 393 397 Distribution to partners -- (6) (569) (575) Partners' (deficit) capital at September 30, 1999 128,810 $ (177) $ 7,134 $ 6,957 See Accompanying Notes to Financial Statements d) JOHNSTOWN/CONSOLIDATED INCOME PARTNERS STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Nine Months Ended September 30, 1999 1998 Cash flows from operating activities: Net income $ 397 $ 556 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 456 397 Amortization of lease commissions and loan costs 58 47 Casualty gain -- (226) Change in accounts: Receivables and deposits (118) (123) Other assets (20) (167) Accounts payable 18 (380) Tenant security deposit liabilities 3 2 Accrued property taxes 67 128 Other liabilities 1 21 Net cash provided by operating activities 862 255 Cash flows from investing activities: Property improvements and replacements (176) (530) Net (deposits to) receipts from restricted escrows (27) 68 Lease commissions paid (11) -- Net insurance proceeds from casualty -- 254 Net cash used in investing activities (214) (208) Cash flows used in financing activities: Distribution to partners (575) (1,000) Net increase (decrease) in cash and cash equivalents 73 (953) Cash and cash equivalents at beginning of period 1,754 2,770 Cash and cash equivalents at end of period $ 1,827 $ 1,817 Supplemental disclosure of cash flow information: Cash paid for interest $ 128 $ 128 See Accompanying Notes to Financial Statements e) JOHNSTOWN/CONSOLIDATED INCOME PARTNERS NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE A _ BASIS OF PRESENTATION The accompanying unaudited financial statements of the Johnstown/Consolidated Income Partners (the "Partnership" or "Registrant") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of ConCap Equities, Inc. (the "General Partner"), all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine month periods ended September 30, 1999, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1999. For further information, refer to the financial statements and footnotes thereto included in the Partnership's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1998. Certain reclassification have been made to the 1998 balances to conform to the 1999 presentation. Units of Depositary Receipt Johnstown/Consolidated Depositary Corporation (the "Corporate Limited Partner"), an affiliate of the General Partner, serves as a depositary of certain units of depositary receipt ("Units"). The Units represent economic rights attributable to the limited partnership interests in the Partnership and entitle the unitholders thereof ("Unitholders") to certain economic benefits, allocations and distributions of the Partnership. For this reason, partners' (deficit) capital is herein represented as an interest of the Unitholder. NOTE B _ TRANSFER OF CONTROL Pursuant to a series of transactions which closed on October 1, 1998 and February 26, 1999, Insignia Financial Group, Inc. and Insignia Properties Trust merged into Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust, with AIMCO being the surviving corporation (the "Insignia Merger"). As a result, AIMCO acquired 100% ownership interest in the General Partner. The General Partner does not believe that this transaction will have a material effect on the affairs and operations of the Partnership. NOTE C - RELATED PARTY TRANSACTIONS The Partnership has no employees and is dependent on the General Partner and its affiliates for the management and administration of all Partnership activities, as provided for in the Partnership Agreement. The Partnership Agreement provides for (i) certain payments to affiliates for services and (ii) reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. The following expenses were paid or accrued to an affiliate of the General Partner during the nine months ended September 30, 1999 and 1998: 1999 1998 (in thousands) Asset management fees (included in general and administrative expense) $ 70 $ 68 Property management fees (included in operating expenses) 75 86 Reimbursement for services of affiliates (included in operating and general and administrative expenses, and investment properties) 33 87 The Partnership Agreement provides that the Partnership shall pay in monthly installments to the General Partner, or an affiliate, a yearly asset management fee equal to: (i) 3/8 of 1% of the original principal balance of mortgage loans outstanding at the end of the month preceding the installment payment; (ii) 1/8 of 1% of the market value of guaranteed mortgage-backed securities as of the end of the Partnership quarter immediately preceding the installment payment; and (iii) 5/8 of 1% of the purchase price of the properties plus improvements for managing the Partnership's assets. In the event the property was not owned at the beginning or end of the year, such fee shall be pro-rated for the short-year period of ownership. Under this provision, fees of approximately $70,000 and $68,000 were paid to the General Partner and its affiliates for the nine months ended September 30, 1999 and 1998, respectively. During the nine months ended September 30, 1999 and 1998, affiliates of the General Partner were entitled to receive 5% of gross receipts from the Partnership's residential property for providing property management services. The Partnership paid to such affiliates approximately $41,000 and $38,000 for each of the nine months ended September 30, 1999 and 1998, respectively. For the nine months ended September 30, 1999 and 1998, affiliates of the General Partner were entitled to receive varying percentages of gross receipts from the Partnership's Florida #11 Min-Warehouse commercial property for property management services. The Partnership paid to such affiliates approximately $34,000 and $33,000 for the nine months ended September 30, 1999 and 1998, respectively. Effective October 1, 1998 (the effective date of the Insignia Merger) these services for the Phoenix Business Campus commercial property were provided by an unrelated party. For the nine months ended September 30, 1998, the Partnership paid approximately $15,000 to an affiliate of the Managing General Partner for providing property management services for Phoenix Business Campus. An affiliate of the General Partner received reimbursement of accountable administrative expenses amounting to approximately $33,000 and $87,000 for the nine months ended September 30, 1999 and 1998, respectively. Included in these expenses for the nine months ended September 30, 1998, is approximately $17,000 in reimbursements for construction oversight costs. No construction oversight costs were paid during the nine months ended September 30, 1999. The Partnership paid leasing commissions of approximately $80,000 to an affiliate of the General Partner during the nine months ended September 30, 1998. No leasing commissions were paid to affiliates during the nine months ended September 30, 1999. Leasing commissions are capitalized and amortized over the lives of the respective leases. Unamortized leasing commissions are included in other assets. On December 19, 1997, an affiliate of the General Partner (the "Purchaser") commenced a tender offer for Units in the Partnership. The Purchaser offered to purchase up to 39,000 units of the outstanding Units of the Partnership, at $68.00 per Unit, net to the seller in cash. During February 1998, the tender offer was completed and the Purchaser acquired 13,985.5 Units (approximately 10.86%) in the Partnership at $68.00 per Unit. On May 19, 1999, AIMCO Properties, L.P., an affiliate of the General Partner commenced a tender offer to purchase up to 44,521.76 (approximately 34.56% of the total outstanding units) Units in the Partnership for a purchase price of $86.00 per unit. The offer expired on July 30, 1999. Pursuant to the offer, AIMCO Properties, L.P. acquired 7,214 units. As a result, AIMCO and its affiliates currently own 38,045.50 Units in the Partnership representing approximately 29.54% of the total outstanding Units. It is possible that AIMCO or its affiliates will make one or more additional offers to acquire additional units in the Partnership for cash or in exchange for Units in the operating partnership of AIMCO (see "Note G - Legal Proceedings"). NOTE D - COMMITMENT The Partnership is required by the Partnership Agreement to maintain working capital reserves for contingencies of not less than 5% of Net Invested Capital as defined in the Partnership Agreement. In the event expenditures are made from these reserves, operating revenue shall be allocated to such reserves to the extent necessary to maintain the foregoing level. Reserves, including cash and cash equivalents and tenant security deposits, totaling approximately $1,902,000 at September 30, 1999, exceed the Partnership's reserve requirement of approximately $1,338,500. NOTE E - DISTRIBUTIONS During the nine months ended September 30, 1999, the General Partner declared and paid a distribution attributable to cash flow from operations of approximately $575,000 (approximately $569,000 to the limited partners, $4.42 per unit of depository receipt). In March of 1998, the Partnership paid a distribution attributable to cash flow from operations of approximately $1,000,000 (approximately $990,000 to the limited partners, $7.69 per unit of depository receipt). NOTE F - SEGMENT REPORTING Description of the types of products and services from which the reportable segment derives its revenues: The Partnership has two reportable segments: residential properties and commercial properties. The Partnership's residential property segment consists of one apartment complex located in Independence, Missouri. The Partnership rents apartment units to tenants for terms that are typically twelve months or less. The commercial property segment consists of an office building located in Atlanta, Georgia, and a self-storage mini-warehouse located in Davie, Florida. The office building leases space to a mortgage lender, construction company, travel agency, computer software company and various other businesses at terms ranging from 12 months to 5 years. The self- storage mini-warehouse leases its space to individual and commercial customers for terms that are typically twelve months or less. Measurement of segment profit or loss: The Partnership evaluates performance based on net income. The accounting policies of the reportable segments are the same as those of the Partnership as described in the Partnership's Annual Report on Form 10-KSB for the year ended December 31, 1998. Factors management used to identify the enterprise's reportable segment: The Partnership's reportable segments consist of investment properties that offer different products and services. The reportable segments are each managed separately because they provide distinct services with different types of products and customers. Segment information for the nine months ended September 30, 1999 and 1998 is shown in the tables below. The "Other" column includes Partnership administration related items and income and expense not allocated to the reportable segments. 1999 Residential Commercial Other Totals (in thousands) Rental income $ 762 $ 1,070 $ -- $ 1,832 Other income 32 28 33 93 Interest expense 139 -- -- 139 Depreciation 168 288 -- 456 General and administrative expense -- -- 208 208 Segment profit (loss) 132 440 (175) 397 Total assets 2,215 6,474 915 9,604 Capital expenditures for investment properties 100 76 -- 176 1998 Residential Commercial Other Totals (in thousands) Rental income $ 713 $ 975 $ -- $ 1,688 Other income 37 74 72 183 Casualty gain 226 -- -- 226 Interest expense 138 -- -- 138 Depreciation 127 270 -- 397 General and administrative expense -- -- 200 200 Segment profit (loss) 309 375 (128) 556 Total assets 2,249 6,041 1,365 9,655 Capital expenditures for investment properties 441 89 -- 530 NOTE G - LEGAL PROCEEDINGS In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, the General Partner and several of their affiliated partnerships and corporate entities. The complaint purports to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) which are named as nominal defendants, challenging the acquisition by Insignia Financial Group, Inc. ("Insignia") and entities which were, at one time, affiliates of Insignia ("Insignia Affiliates") of interests in certain general partner entities, past tender offers by Insignia Affiliates to acquire limited partnership units, the management of partnerships by Insignia Affiliates and the Insignia Merger (see "Note B - Transfer of Control"). The complaint seeks monetary damages and equitable relief, including judicial dissolution of the Partnership. On June 25, 1998, the General Partner filed a motion seeking dismissal of the action. In lieu of responding to the motion, the plaintiffs have filed an amended complaint. The General Partner filed demurrers to the amended complaint which were heard February 1999. Pending the ruling on such demurrers, settlement negotiations commenced. On November 2, 1999, the parties executed and filed a Stipulation of Settlement ("Stipulation"), settling claims, subject to final court approval, on behalf of the Partnership and all limited partners who own units as of November 3, 1999. The Court has preliminarily approved the Settlement and scheduled a final approval hearing for December 10, 1999. In exchange for a release of all claims, the Stipulation provides that, among other things, an affiliate of the General Partner will make tender offers for all outstanding limited partnership interests in 49 partnerships, including the Registrant, subject to the terms and conditions set forth in the Stipulation, and has agreed to establish a reserve to pay an additional amount in settlement to qualifying class members (the "Settlement Fund"). At the final approval hearing, Plaintiffs' counsel will make an application for attorneys' fees and reimbursement of expenses, to be paid in part by the partnerships and in part from the Settlement Fund. The General Partner does not anticipate that costs associated with this case will be material to the Partnership's overall operations. The Partnership is unaware of any other pending or outstanding litigation that is not of a routine nature arising in the ordinary course of business. NOTE H - SUBSEQUENT EVENT On November 4, 1999, the Partnership sold the Florida #11 Mini-Warehouse to an unaffiliated third party for net sales proceeds of approximately $4,428,000 after payment of closing costs. The Partnership anticipates realizing a gain of approximately $2,482,000 on the sale during the fourth quarter of 1999. The sales transaction is summarized as follows (amounts in thousands): Net sale price, net of selling costs $ 4,428 Net real estate (2) (1,946) Gain on sale of real estate $ 2,482 (1) Net of accumulated depreciation of approximately $813,000. The following pro-forma information reflects the operations of the Partnership for the nine months ended September 30, 1999 and 1998, as if Florida #11 Mini- Warehouse had been sold January 1, 1998. 1999 1998 (in thousands, except per unit data) Revenues $ 1,367 $ 1,546 Net income 107 270 Net income per Unit of Depositary Receipt $ .82 $ 2.08 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS The matters discussed in this Form 10-QSB contain certain forward-looking statements and involve risks and uncertainties (including changing market conditions, competitive and regulatory matters, etc.) detailed in the disclosures contained in this Form 10-QSB and the other filings with the Securities and Exchange Commission made by the Partnership from time to time. The discussion of the Partnership's business and results of operations, including forward-looking statements pertaining to such matters, does not take into account the effects of any changes to the Partnership's business and results of operation. Accordingly, actual results could differ materially from those projected in the forward-looking statements as a result of a number of factors, including those identified herein. The Partnership's investment property consists of one apartment complex and two commercial properties. The following table sets forth the average occupancy of the properties for each of the nine month periods ended September 30, 1999 and 1998. Average Occupancy Property 1999 1998 Cedar Brooke Apartments 97% 94% Independence, Missouri Florida #11 Mini-Warehouse 96% 96% Davie, Florida (1) Phoenix Business Campus 87% 71% College Park, Georgia (2) (1) Property was sold November 4, 1999. (2) Property is currently under contract for sale. The sale, which is subject to the purchaser's due diligence and other customary conditions, is expected to close either in the fourth quarter of 1999 or the first quarter of 2000. However, there can be no assurance that the sale will be consummated. The General Partner attributes the increase in occupancy at Phoenix Business Campus to the addition of several tenants in the third quarter of 1998 and in 1999. Results of Operations The Partnership's net income for the nine months ended September 30, 1999, was approximately $397,000 versus net income of approximately $556,000 for the nine months ended September 30, 1998. The Partnership reported net income for the three months ended September 30, 1999, of approximately $139,000 as compared to net income of approximately $86,000 for the corresponding period in 1998. The decrease in net income for the nine months ended September 30, 1999, is primarily attributable to an overall decrease in total revenues slightly offset by an overall decrease in total expenses. The increase in net income for the three months ended September 30, 1999 is primarily attributable to an increase in total revenues and a decrease in total expenses. The decrease in overall revenues for the nine month period is attributable to a decrease in interest income due to lower average cash balances held in interest-bearing accounts for such periods in 1999 as compared to the same periods in 1998 and to the fact that there was recognition of a casualty gain in 1998 and no such gain was recognized in 1999. The decrease in revenues was partially offset by an increase in rental income as a result of an increase in average rental rates at all of the Partnership's investment properties, as well as an increase in the average occupancy rate at both Cedar Brooke Apartments and Phoenix Business Campus. The slight decrease in overall expenses for both the three and nine months ended September 30, 1999 is the result of decreases in property tax and operating expense which was almost entirely offset by an increase in depreciation expense. The decrease in property tax expense is the result of refunds received during the first quarter of 1999 on behalf of Phoenix Business Campus for 1997 and 1998 taxes. Operating expense decreased due to decreases in insurance and maintenance expense. Insurance expense decreased at all of the investment properties due to a change in insurance carriers late in 1998 which has resulted in lower premiums. Maintenance expense decreased due to parking lot improvements made at Cedar Brook Apartments during 1998. The increase in depreciation expense was caused mainly by a significant amount of fixed assets placed into service over the past twelve months. General and administrative expense increased slightly during the nine months ended September 30, 1999, as a result of an increase in legal costs associated with the settlement of a litigation case against the Partnership during the first nine months of 1999 as disclosed previously in prior quarters. Included in general and administrative expense for the nine months ended September 30, 1999 and 1998, are reimbursements to the General Partner allowed under the Partnership Agreement associated with its management of the Partnership. In addition, costs associated with the quarterly and annual communications with investors and regulatory agencies and the annual audit required by the Partnership Agreement are also included. On November 4, 1999, the Partnership sold the Florida #11 Mini-Warehouse to an unaffiliated third party for net sales proceeds of approximately $4,428,000 after payment of closing costs. The Partnership anticipates realizing a gain of approximately $2,482,000 on the sale during the fourth quarter of 1999. As part of the ongoing business plan of the Partnership, the General Partner monitors the rental market environment of its investment properties to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Partnership from increases in expenses. As part of this plan, the General Partner attempts to protect the Partnership from the burden of inflation-related increases in expenses by increasing rents and maintaining a high overall occupancy level. However, due to changing market conditions, which can result in the use of rental concessions and rental reductions to offset softening market conditions, there is no guarantee that the General Partner will be able to sustain such a plan. Liquidity and Capital Resources At September 30, 1999, the Partnership had cash and cash equivalents of approximately $1,827,000 as compared to approximately $1,817,000 at September 30, 1998. For the nine months ended September 30, 1999, cash and cash equivalents increased by approximately $73,000 from the Partnership's year ended December 31, 1998. The increase in cash and cash equivalents is due to approximately $862,000 of cash provided by operating activities which was partially offset by approximately $214,000 of cash used in investing activities and approximately $575,000 of cash used in financing activities. Cash used in investing activities consisted primarily of property improvements and replacements, and, to a lesser extent, net deposits to escrow accounts maintained by the mortgage lender and the payment of lease commissions. Cash used in financing activities consisted of distributions to partners. The Partnership invests its working capital reserves in a money market account. The Partnership is required by the Partnership Agreement to maintain working capital reserves for contingencies of not less than 5% of Net Invested Capital as defined in the Partnership Agreement. In the event expenditures are made from these reserves, operating revenue shall be allocated to such reserves to the extent necessary to maintain the foregoing level. Reserves, consisting of cash and cash equivalents and tenant security deposits totaling approximately $1,902,000 at September 30, 1999, exceed the Partnership's reserve requirement of approximately $1,338,500. The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the investment properties to adequately maintain the physical assets and other operating needs of the Partnership and to comply with Federal, state, and local legal and regulatory requirements. Capital improvements planned for the Partnership's properties are discussed below. Cedar Brooke Apartments During the nine months ended September 30, 1999, the Partnership expended approximately $100,000 for capital improvements at Cedar Brooke Apartments consisting primarily of cabinet, flooring, landscaping, and appliance replacement. These improvements were funded from replacement reserves and operating cash flow. Based on a report received from an independent third party consultant analyzing necessary exterior improvements and estimates made by the General Partner on interior improvements, it is estimated that the property requires approximately $205,000 of capital improvements over the next few years. The Partnership has budgeted, but is not limited to, capital improvements of approximately $348,000 for 1999 at this property which include certain of the required improvements and consist of heating system upgrades, landscaping, flooring and roof replacements and other building improvements. Florida #11 Mini-Warehouse During the nine months ended September 30, 1999, the Partnership expended approximately $5,000 for capital improvements at the property, consisting of floor covering, and land and building improvements. These improvements were funded from operating cash flow. Based on a report received from an independent third party consultant analyzing necessary exterior improvements and estimates made by the General Partner on interior improvements, it is estimated that the property requires approximately $205,000 of capital improvements over the next few years. This property was sold on November 4, 1999. Phoenix Business Campus During the nine months ended September 30, 1999, the Partnership expended approximately $71,000 for tenant improvements at Phoenix Business Campus. These improvements were funded from operating cash flow. Based on a report received from an independent third party consultant analyzing necessary exterior improvements and estimates made by the General Partner on interior improvements, it is estimated that the property requires approximately $174,000 of capital improvements over the next few years. The Partnership has budgeted, but is not limited to, capital improvements of approximately $62,000 for 1999 at this property which include certain of the required improvements and consist of tenant improvements. The additional capital expenditures will be incurred only if cash is available from operations or from Partnership reserves. To the extent that such budgeted capital improvements are completed, the Partnership's distributable cash flow, if any, may be adversely affected at least in the short term. The Partnership's assets are currently thought to be sufficient for any near- term needs (exclusive of capital improvements) of the Partnership. The mortgage indebtedness on Cedar Brooke Apartments of $2,325,000, which carries a stated interest rate of 7.33% (interest only), matures in 2003. The General Partner will attempt to refinance such indebtedness and/or sell the property prior to such maturity date. If the property cannot be refinanced or sold for a sufficient amount, the Partnership will risk losing such property through foreclosure. During the nine months ended September 30, 1999, a cash distribution attributable to cash flow from operations of approximately $575,000 (approximately $569,000 to the limited partners, $4.42 per unit of depository receipt) was paid to the Partners. During the nine months ended September 30, 1998, a cash distribution from operations of approximately $1,000,000 (approximately $990,000 to limited partners, $7.69 per unit of depositary receipt) was paid to the partners. Future cash distributions will depend on the levels of net cash generated from operations, the availability of working capital reserves, and the timing of debt maturities, refinancings and/or property sales. There can be no assurance, however, that the Partnership will generate sufficient funds from operations after required capital expenditures and required working capital reserves to permit further distributions to its partners in 1999 or subsequent periods. Tender Offer On May 19, 1999, AIMCO Properties, L.P., an affiliate of the General Partner commenced a tender offer to purchase up to 44,521.76 (approximately 34.56% of the total outstanding units) Units in the Partnership for a purchase price of $86.00 per unit. The offer expired on July 30, 1999. Pursuant to the offer, AIMCO Properties, L.P. acquired 7,214 units. As a result, AIMCO and its affiliates currently own 38,045.50 Units in the Partnership representing approximately 29.54% of the total outstanding units. It is possible that AIMCO or its affiliates will make one or more additional offers to acquire additional Units in the Partnership for cash or in exchange for units in the operating partnership of AIMCO (see "Item I. Financial Statements, Note G - Legal Proceedings"). Year 2000 Compliance General Description of the Year 2000 Issue and the Nature and Effects of the Year 2000 on Information Technology (IT) and Non-IT Systems The Year 2000 issue is the result of computer programs being written using two digits rather than four digits to define the applicable year. The Partnership is dependent upon the General Partner and its affiliates for management and administrative services ("Managing Agent"). Any of the computer programs or hardware that have date-sensitive software or embedded chips may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in a system failure or miscalculations causing disruptions of operations, including, among other things, a temporary inability to process transactions, send invoices, or engage in similar normal business activities. Over the past two years, the Managing Agent has determined that it will be required to modify or replace significant portions of its software and certain hardware so that those systems will properly utilize dates beyond December 31, 1999. The Managing Agent presently believes that with modifications or replacements of existing software and certain hardware, the Year 2000 issue can be mitigated. However, if such modifications and replacements are not made, or not completed in time, the Year 2000 issue could have a material impact on the operations of the Partnership. The Managing Agent's plan to resolve Year 2000 issues involves four phases: assessment, remediation, testing, and implementation. To date, the Managing Agent has fully completed its assessment of all the information systems that could be significantly affected by the Year 2000, and has begun the remediation, testing and implementation phases on both hardware and software systems. Assessments are continuing in regards to embedded systems. The status of each is detailed below. Status of Progress in Becoming Year 2000 Compliant, Including Timetable for Completion of Each Remaining Phase Computer Hardware: During 1997 and 1998, the Managing Agent identified all of the computer systems at risk and formulated a plan to repair or replace each of the affected systems. In August 1998, the main computer system used by the Managing Agent became fully functional. In addition to the main computer system, PC-based network servers, routers and desktop PCs were analyzed for compliance. The Managing Agent has begun to replace each of the non-compliant network connections and desktop PCs and, as of September 30, 1999, had virtually completed this effort. The total cost to the Managing Agent to replace the PC-based network servers, routers and desktop PCs is expected to be approximately $1.5 million of which $1.3 million has been incurred to date. Computer Software: The Managing Agent utilizes a combination of off-the-shelf, commercially available software programs as well as custom-written programs that are designed to fit specific needs. Both of these types of programs were studied, and implementation plans written and executed with the intent of repairing or replacing any non-compliant software programs. In April 1999 the Managing Agent embarked on a data center consolidation project that unifies its core financial systems under its Year 2000 compliant system. The estimated completion date for this project is October 1999. During 1998, the Managing Agent began converting the existing property management and rent collection systems to its management properties Year 2000 compliant systems. The estimated additional costs to convert such systems at all properties, is $200,000, and the implementation and testing process was completed in June 1999. The final software area is the office software and server operating systems. The Managing Agent has upgraded all non-compliant office software systems on each PC and has upgraded virtually all of the server operating systems. Operating Equipment: The Managing Agent has operating equipment, primarily at the property sites, which needed to be evaluated for Year 2000 compliance. In September 1997, the Managing Agent began taking a census and inventory of embedded systems (including those devices that use time to control systems and machines at specific properties, for example elevators, heating, ventilating, and air conditioning systems, security and alarm systems, etc.). The Managing Agent has chosen to focus its attention mainly upon security systems, elevators, heating, ventilating and air conditioning systems, telephone systems and switches, and sprinkler systems. While this area is the most difficult to fully research adequately, management has not yet found any major non-compliance issues that put the Managing Agent at risk financially or operationally. A pre-assessment of the properties by the Managing Agent has indicated virtually no Year 2000 issues. A complete, formal assessment of all the properties by the Managing Agent was virtually completed by September 30, 1999. Any operating equipment that is found non-compliant will be repaired or replaced. The total cost incurred for all properties managed by the Managing Agent as of September 30, 1999 to replace or repair the operating equipment was approximately $75,000. The Managing Agent estimates the cost to replace or repair any remaining operating equipment is approximately $125,000. The Managing Agent continues to have "awareness campaigns" throughout the organization designed to raise awareness and report any possible compliance issues regarding operating equipment within its enterprise. Nature and Level of Importance of Third Parties and Their Exposure to the Year 2000 The Managing Agent has banking relationships with three major financial institutions, all of which have designated their compliance. The Managing Agent has updated data transmission standards with all of the financial institutions. All financial institutions have communicated that they are Year 2000 compliant and accordingly no accounts were required to be moved from the existing financial institutions. The Partnership does not rely heavily on any single vendor for goods and services, and does not have significant suppliers and subcontractors who share information systems (external agent). To date, the Partnership is not aware of any external agent with a Year 2000 compliance issue that would materially impact the Partnership's results of operations, liquidity, or capital resources. However, the Partnership has no means of ensuring that external agents will be Year 2000 compliant. The Managing Agent does not believe that the inability of external agents to complete their Year 2000 remediation process in a timely manner will have a material impact on the financial position or results of operations of the Partnership. However, the effect of non-compliance by external agents is not readily determinable. Costs to Address Year 2000 The total cost of the Year 2000 project to the Managing Agent is estimated at $3.5 million and is being funded from operating cash flows. To date, the Managing Agent has incurred approximately $2.9 million ($0.7 million expenses and $2.2 million capitalized for new systems and equipment) related to all phases of the Year 2000 project. Of the total remaining project costs, approximately $0.5 million is attributable to the purchase of new software and operating equipment, which will be capitalized. The remaining $0.2 million relates to repair of hardware and software and will be expensed as incurred. The Partnership's portion of these costs are not material. Risks Associated with the Year 2000 The Managing Agent believes it has an effective program in place to resolve the Year 2000 issue in a timely manner. As noted above, the Managing Agent has not yet completed all necessary phases of the Year 2000 program. In the event that the Managing Agent does not complete any additional phases, certain worst case scenarios could occur. The worst case scenarios could include elevators, security and heating, ventilating and air conditioning systems that read incorrect dates and operate with incorrect schedules (e.g., elevators will operate on Monday as if it were Sunday). Although such a change would be annoying to residents, it is not business critical. In addition, disruptions in the economy generally resulting from Year 2000 issues could also adversely affect the Partnership. The Partnership could be subject to litigation for, among other things, computer system failures, equipment shutdowns or failure to properly date business records. The amount of potential liability and lost revenue cannot be reasonably estimated at this time. Contingency Plans Associated with the Year 2000 The Managing Agent has contingency plans for certain critical applications and is working on such plans for others. These contingency plans involve, among other actions, manual workarounds and selecting new relationships for such activities as banking relationships and elevator operating systems. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, the General Partner and several of their affiliated partnerships and corporate entities. The complaint purports to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) which are named as nominal defendants, challenging the acquisition by Insignia Financial Group, Inc. ("Insignia") and entities which were, at one time, affiliates of Insignia ("Insignia Affiliates") of interests in certain general partner entities, past tender offers by Insignia Affiliates to acquire limited partnership units, the management of partnerships by Insignia Affiliates and the Insignia Merger (see "Part I _ Financial Information, Item 1. Financial Statements, Note B _ Transfer of Control"). The complaint seeks monetary damages and equitable relief, including judicial dissolution of the Partnership. On June 25, 1998, the General Partner filed a motion seeking dismissal of the action. In lieu of responding to the motion, the plaintiffs have filed an amended complaint. The General Partner filed demurrers to the amended complaint which were heard February 1999. Pending the ruling on such demurrers, settlement negotiations commenced. On November 2, 1999, the parties executed and filed a Stipulation of Settlement ("Stipulation"), settling claims, subject to final court approval, on behalf of the Partnership and all limited partners who own units as of November 3, 1999. The Court has preliminarily approved the Settlement and scheduled a final approval hearing for December 10, 1999. In exchange for a release of all claims, the Stipulation provides that, among other things, an affiliate of the General Partner will make tender offers for all outstanding limited partnership interests in 49 partnerships, including the Registrant, subject to the terms and conditions set forth in the Stipulation, and has agreed to establish a reserve to pay an additional amount in settlement to qualifying class members (the "Settlement Fund"). At the final approval hearing, Plaintiffs' counsel will make an application for attorneys' fees and reimbursement of expenses, to be paid in part by the partnerships and in part from the Settlement Fund. The General Partner does not anticipate that costs associated with this case will be material to the Partnership's overall operations. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits: Exhibit 10.36, Purchase and Sale Contract between Johnston/Consolidated Income Partners and Everest Storage Holdings, LLC dated July 2, 1999, documenting the sale of Florida #11 Mini-warehouse located in Davie, Florida. Exhibit 10.37, First Amendment to Purchase and Sale Contract between Johnston/Consolidated Income Partners and Everest Storage Holdings, LLC dated September 7, 1999, documenting the sale of Florida #11 Mini-warehouse located in Davie, Florida. Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report. b) Reports on Form 8-K: None filed during the quarter ended September 30, 1999. SIGNATURES In accordance with the requirements of the Exchange Act, the Partnership caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. JOHNSTOWN/CONSOLIDATED INCOME PARTNERS By: CONCAP EQUITIES, INC. General Partner By: /s/Patrick J. Foye Patrick J. Foye Executive Vice President By: /s/Martha L. Long Martha L. Long Senior Vice President and Controller Date: November 15, 1999 EX-27 2
5 This schedule contains summary financial information extracted from Johnsont/Consolidated Income Partners 199 Third Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000787621 JOHNSTONW/CONSOLIDATED INCOME PARTNERS 1,000 9-MOS DEC-31-1999 SEP-30-1999 1,827 0 0 0 0 0 13,896 (7,065) 9,604 0 2,325 0 0 0 6,957 9,604 0 1,925 0 0 1,528 0 139 0 0 0 0 0 0 397 3.05 0 Registrant has an unclassified balance sheet. Multiplier is 1.
EX-10.36 3 EXHIBIT 10.36 PURCHASE AND SALE CONTRACT BETWEEN JOHNSTOWN/CONSOLIDATED INCOME PARTNERS, A CALIFORNIA LIMITED PARTNERSHIP, AS SELLER AND EVEREST STORAGE HOLDINGS, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, AS PURCHASER TABLE OF CONTENTS Page ARTICLE 1 DEFINED TERMS 2 ARTICLE 2 PURCHASE AND SALE OF PROPERTY 5 ARTICLE 3 PURCHASE PRICE & DEPOSIT 6 ARTICLE 4 FINANCING 5 ARTICLE 5 FEASIBILITY PERIOD 8 ARTICLE 6 TITLE 12 ARTICLE 7 CLOSING 15 ARTICLE 8 REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AND PURCHASER 20 ARTICLE 9 CONDITIONS PRECEDENT TO CLOSING 27 ARTICLE 10 BROKERAGE 29 ARTICLE 11 POSSESSION 29 ARTICLE 12 DEFAULTS AND REMEDIES 30 ARTICLE 13 RISK OF LOSS OR CASUALTY 31 ARTICLE 14 RATIFICATION 32 ARTICLE 15 EMINENT DOMAIN 32 ARTICLE 16 MISCELLANEOUS 33 PURCHASE AND SALE CONTRACT THIS PURCHASE AND SALE CONTRACT ("PURCHASE CONTRACT") is entered into as of the 2nd day of July, 1999, by and among Johnstown/Consolidated Income Partners, a California limited partnership, having a principal address at c/o AIMCO, 1873 South Bellaire Street, Suite 1700, Denver, Colorado 80222 ("SELLER"), and Everest Storage Holdings, LLC a California limited liability company, having a principal address at 199 South Los Robles Avenue, Suite 440, Pasadena, California 91101 ("PURCHASER"). NOW, THEREFORE WITNESSETH: That for and in consideration of mutual covenants and agreements hereinafter set forth, Seller and Purchaser hereby agree as follows: RECITALS R-1. Seller owns certain real estate, improvements and related property located in Davie, Florida. R-2. Purchaser desires to purchase and pay to Seller the Purchase Price and Seller has agreed to sell the Property (as defined below) to Purchaser, on the terms and conditions set forth herein. ARTICLE 1 DEFINED TERMS 1.1 Terms with initial capital letters in this Purchase Contract shall have the meanings set forth in this Article 1. 1.1.1 "BUSINESS DAY" means any day other than a Saturday or Sunday or federal holiday or legal holiday in the State of Florida. 1.1.2 "CLOSING" means the consummation of the purchase and sale and related transactions contemplated by this Purchase Contract in accordance with the terms and conditions of this Purchase Contract. 1.1.3 "CLOSING DATE" means the date set forth in Section 7.1.1 on which the Closing of the conveyance of the Property is required to be held under the terms and conditions of this Purchase Contract and on which date full payment of the Purchase Price for the Property shall have been paid to and received by Seller in immediately available U.S. funds. 1.1.4 "COMMERCIAL LEASE(S)" means the interest of Seller in and to all rental agreements, leases, subleases and other occupancy agreements, whether or not of record, which provide for the use or occupancy of space or facilities on or relating to the Property and which are in force as of the Effective Date, including but not limited to those items set forth on the rent roll attached hereto as Exhibit 1.1.4, including any new rental agreements, leases, subleases and other occupancy agreements entered into in the ordinary course of business between the Effective Date and the Closing Date. 1.1.5 "EFFECTIVE DATE" means the date on which Seller signs this Purchase Contract, thereby accepting the Purchase Contract, and provides Notice to Purchaser. 1.1.6 "FIXTURES AND TANGIBLE PERSONAL PROPERTY" means all fixtures, furniture, furnishings, fittings, equipment, machinery, apparatus, appliances and other articles of personal property now located on the Land or in the Improvements as of the Effective Date and used or usable in connection with any present or future occupation or operation of all or any part of the Property as set forth in Exhibit 1.1.6. The term "FIXTURES AND TANGIBLE PERSONAL PROPERTY" does not include (i) equipment leased by Seller and the interest of Seller in any equipment provided to the Property for use, but not owned or leased by Seller, or (ii) property owned or leased by Tenants and guests, employees or other persons furnishing goods or services to the Property, or (iii) property and equipment owned by Seller, which in the ordinary course of business of the Property is not used principally for the business, operation or management of the Property. 1.1.7 "IMPROVEMENTS" means all buildings and improvements, located on the Land taken "as is" containing approximately 62,240 square feet of self- storage space. 1.1.8 "LAND" means all of that certain tract of land located in Davie, Florida commonly known as Davie Self Storage, located at 5370 South University Drive, Davie, Florida 33328, more particularly described in Exhibit A attached hereto and made a part hereof, and all rights, privileges and appurtenances pertaining thereto. 1.1.9 "MISCELLANEOUS PROPERTY ASSETS" means all contract rights, leases, concessions, warranties, plans, drawings, and other items of intangible personal property relating to the ownership or operation of the Property and owned by Seller, excluding, however, (i) receivables, (ii) Property Contracts, (iii) Commercial Leases, (iv) Permits, (v) cash or other funds, whether in petty cash or house "banks," or on deposit in bank accounts or in transit for deposit, (vi) refunds, rebates or other claims, or any interest thereon, for periods or events occurring prior to the Closing Date, (vii) utility and similar deposits, or (viii) insurance or other prepaid items. 1.1.10 "NOTICE" shall have the meaning ascribed thereto in Section 16.6. 1.1.11 "PERMITS" means all licenses and permits other than Excluded Permits granted by governmental authorities having jurisdiction over the Property in respect of the matter to which the applicable license or permit applies and owned by Seller and used in or relating to the ownership, occupancy or operation of the Property or any part thereof ("EXCLUDED PERMITS" means those Permits which, under applicable law, are nontransferable or transferable only with consent and such consent shall not have been obtained after reasonable efforts by Seller.). 1.1.12 "PERMITTED EXCEPTIONS" means those exceptions or conditions permitted to encumber the title to the Property in accordance with the provisions of Section 6.2. 1.1.13 "PROPERTY" means the Land, Improvements and all rights of Seller relating to the Land and the Improvements, including without limitation, all right, title and interest of Seller, if any, in and to (i) any strips and gores adjacent to the Land and any land lying in the bed of any street, road, or avenue opened or proposed, in front of or adjoining the Land, to the center line thereof, (ii) any unpaid award for any taking by condemnation or any damage to the Property by reason of a change of grade of any street or highway, (iii) all of the easements, rights, privileges, and appurtenances belonging or in any way appertaining to the Property, (iv) all Fixtures and Tangible Personal Property, (v) the right, if any and only to the extent transferable, of Seller in any Property Contracts and Commercial Leases, Permits (other than Excluded Permits) and the Miscellaneous Property Assets owned by Seller which are located on the Property and used in its operation, and (vi) any water rights or mineral rights, appurtenant to the Land. 1.1.14 "PROPERTY CONTRACTS" means all purchase orders, maintenance, service, or utility contracts and similar contracts (except Commercial Leases, which shall be assumed by Purchaser at Closing) set forth on Exhibit 1.1.14, and any contracts entered into after the Effective Date in accordance with Section 8.1.5.2, which relate to the ownership, maintenance, construction or repair and/or operation of the Property. 1.1.15 "PURCHASE CONTRACT" means this Purchase and Sale Contract by and between Seller and Purchaser. 1.1.16 "PURCHASE PRICE" means the total consideration to be paid by Purchaser to Seller for the purchase of the Property. 1.1.17 "SURVEY" shall have the meaning ascribed thereto in Section 6.4. 1.1.18 "TENANT" means any person or entity entitled to occupy any portion of the Property under a Commercial Lease. 1.1.19 "TITLE COMMITMENT" or "TITLE COMMITMENTS" shall have the meaning ascribed thereto in Section 6.1. 1.1.20 "TITLE INSURER" shall have the meaning set forth in Section 6.1. ARTICLE 2 PURCHASE AND SALE OF PROPERTY 2.1 Purchase and Sale of Property. Seller agrees to sell and convey the Property to Purchaser and Purchaser agrees to purchase the Property from Seller, in accordance with the terms and conditions set forth in this Purchase Contract. ARTICLE 3 PURCHASE PRICE & DEPOSIT 3.1 Purchase Price and Deposit. The total purchase price ("PURCHASE PRICE") for the Property shall be Four Million Eight Hundred Ninety-Four Thousand and No/100 Dollars ($4,894.000.00), which shall be paid by Purchaser, as follows: 3.1.1 Within five (5) days following the Effective Date, Purchaser shall deliver to Fidelity National Title Insurance Company, Bank of America Center, 700 Louisiana, Suite 2600, Houston, Texas 77002 ("ESCROW AGENT" or the "TITLE COMPANY") a deposit in the sum of Twenty-Five Thousand and No/100 Dollars ($25,000.00) in cash; and provided this Purchase Contract has not been earlier terminated as provided herein, Purchaser shall on or prior to the date of expiration of the Feasibility Period (as defined in Section 5.1), deliver an additional deposit of Seventy-Five Thousand and No/100 Dollars ($75,000.00) in cash to the Escrow Agent (such sums being hereinafter referred to collectively and individually as the "DEPOSIT"), to be held and disbursed by Escrow Agent pursuant to the terms of an escrow agreement (the "ESCROW AGREEMENT") in the form attached hereto as Exhibit B. Purchaser and Seller each approve and shall execute the Escrow Agreement concurrently with the execution of this Purchase Contract. 3.1.2 The Escrow Agent shall hold the Deposit and make delivery of the Deposit to the party entitled thereto under the terms of the Escrow Agreement. 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 agreements as Escrow Agent, in its discretion, deems suitable (provided that Escrow Agent shall invest the Deposit as jointly directed by Seller and Purchaser should Seller and Purchaser each in their respective sole discretion determine to issue such joint investment instructions to the Escrow Agent), and all interest and income thereon shall become part of the Deposit and shall be remitted to the party entitled to the Deposit, as set forth below. 3.1.3 If the sale of the Property is closed by the date fixed therefor (or any extension date provided for by the mutual written consent of the parties hereto, given or withheld in their respective sole discretion), monies held as the Deposit shall be applied toward the Purchase Price (and paid over to the Seller) on the date of Closing. If the sale of the Property is not closed by the date fixed therefor (or any such extension date) owing to failure of satisfaction of a condition precedent to Purchaser's obligations, the Deposit shall be returned and refunded to Purchaser and neither party shall have any further liability hereunder except as expressly stated herein, and subject to and except for Purchaser's liability under Sections 5.3 and 5.4. 3.1.4 If the sale of the Property fails to close on the Closing Date (or any such extension date) due to a failure of performance by Seller, Purchaser shall be entitled to the remedies set forth in Article 12 hereof. If the sale of the Property fails to close on the Closing Date (or any such extension date) due to a failure of performance by Purchaser, the Deposit shall be forfeited by Purchaser and the sum thereof shall go to Seller forthwith as liquidated damages for the lost opportunity costs and transaction expenses incurred by Seller, as more fully set forth in Article 12 below. 3.2 Purchase Price. On the Closing Date, Purchaser shall pay Seller the amount of Four Million Eight Hundred Ninety-Four Thousand and No/100 Dollars ($4,894,000.00), subject to credit and adjustment as provided herein, in cash or by wire-transfer of current funds pursuant to wire instructions provided by Seller. ARTICLE 4 FINANCING 4.1 Financing of Purchaser. Purchaser assumes full responsibility to expeditiously and diligently initiate and pursue all steps necessary to obtain appropriate financing for purchase of the Property. In no event shall Purchaser's ability to obtain financing to purchase the Property for the Purchase Price upon the terms and conditions contained herein be a condition precedent to Closing. ARTICLE 5 FEASIBILITY PERIOD 5.1 Due Diligence and Feasibility Period. Subject to the rights of the Tenants and the terms of Sections 5.3 and 5.4 below, for forty-five (45) calendar days following the date Purchaser receives the documents described in Sections 5.1.5 and 8.1.5.4 (the "FEASIBILITY PERIOD"), Purchaser, and its agents, contractors, engineers, surveyors, attorneys, and employees (collectively, "CONSULTANTS") shall have the right from time to time upon reasonable advance notice to Seller to enter onto the Property: 5.1.1 To conduct and make any and all customary studies, tests, examinations and inspections, or investigations of or concerning the Property and its ownership and operation (including without limitation, engineering and feasibility studies, evaluation of drainage and flood plain, soil tests for bearing capacity and percolation and surveys, including topographical surveys). Notwithstanding the foregoing, in no event shall Purchaser conduct any invasive environmental assessment test of the Property without the prior written consent of Seller, which consent may be withheld, in Seller's sole discretion. 5.1.2 To confirm any and all matters which Purchaser may reasonably desire to confirm with respect to the Property. 5.1.3 To ascertain and confirm the suitability of the Property for Purchaser's intended use of the Property. 5.1.4 To review and copy and to independently analyze and verify, (i) to the extent in Seller's possession or control, all books and records pertaining to operation of the Property (or duplicate copies thereof), including but not limited to current operating statements for the calendar years 1997, 1998 and the first quarter of 1999, (ii) to the extent in Seller's possession or control, plans, specifications, and engineering and/or architectural drawings of the Improvements and systems of the Property or any part of the Property (or duplicate copies thereof), (iii) to the extent in Seller's possession or control, any boundary and "as-built" surveys of the Land and Improvements, any title insurance policies or appraisals, (iv) to the extent in Seller's possession or control, any environmental reports relating to the Property, (v) copies of Commercial Leases in effect as of Closing and all amendments thereto, (vi) copies of Property Contracts in effect as of Closing and assumed by Purchaser, and (vii) to the extent in Seller's possession or control, any Permits and Excluded Permits. 5.1.5 Seller will provide Purchaser after the Effective Date the following documents ("SELLER'S DOCUMENTS"): (a) the documents described in clauses (ii), (iii), (iv), (vi) and (vii) of Section 5.1.4, (b) a current rent roll and accounts receivable list, (c) the current standard form of Commercial Lease, (d) to the extent in Seller's possession and control, copies of current real property tax assessments and utility statements, and (e) current operating statements for the calendar years 1997 and 1998 and the first quarter of 1999 (the "Operating Statements"). 5.2 Termination and Cure Rights. Should the results of any of the matters referred to in Section 5.1 above appear unsatisfactory to Purchaser for any reason, including any defects in title related to the Permitted Exceptions (as defined in Section 6.2), then Purchaser shall have the right to terminate this Purchase Contract by giving written Notice to that effect to Seller and Escrow Agent on or before 5:00 p.m. Pacific Time on the date of expiration of the Feasibility Period. If Purchaser exercises such right to terminate as provided in this Section 5.2, this Purchase Contract shall terminate and be of no further force and effect, except as otherwise expressly stated herein, and subject to and except for Purchaser's liability under Sections 5.3 and 5.4, and Escrow Agent shall promptly return the Deposit to Purchaser. Purchaser shall, within ten (10) days of such termination, deliver to Seller copies of all feasibility studies, surveys, engineering reports and all other information obtained by Purchaser with respect to the Property, which requirement shall survive the termination of this Purchase Contract. In the event Seller does not receive such Notice of Purchaser's disapproval on or before the 5:00 p.m. Pacific Time on the date of expiration of the Feasibility Period, the Property shall be deemed satisfactory to Purchaser, and Purchaser shall be deemed conclusively to have waived its termination rights under this Section 5.2 and this Purchase Contract shall remain in full force and effect and Purchaser's obligation to purchase the Property shall be noncontingent and unconditional except only for satisfaction of the conditions expressly stated in this Article 5 and in Article 9. 5.3 Confidentiality. Any and all information provided by Seller to Purchaser or obtained by Purchaser relating to the Property in the course of its inspections or review under or in connection with the rights under Section 5.1, including, without limitation, any environmental assessment or audit, shall be treated as confidential information by Purchaser and Purchaser shall instruct all of its Consultants to the confidentiality of all such information. Purchaser will not, except with the express prior written consent of Seller, directly or indirectly, (i) disclose or permit the disclosure of any information to any person or entity, except persons who are bound to observe the terms hereof, or (ii) use or permit the use of all information pertaining to the Property (1) in any way detrimental to the Seller or (2) for any purpose other than evaluating the contemplated purchase of the Property. Purchaser agrees, that if the Closing does not occur, Purchaser will promptly return to the Seller or its authorized agent all written or tangible information pertaining to the Property, including all copies or extracts thereof, and all notes based upon the information. Purchaser shall be strictly liable for all costs and expenses, and/or damage or injury to any person or property resulting from any such review or inspection, and whether Seller or its authorized agents shall have been present at the same or shall have consented to the same, or any failure to keep all such information confidential, whether occasioned by the acts of Purchaser or any of its Consultants, and Purchaser agrees to indemnify and hold harmless Seller from any liability, claims or expenses (including, without limitation, mechanic's or construction liens and/or reasonable attorneys' fees) resulting therefrom, except any claims, damages, costs or liability which arise from preexisting conditions of the Property or from the negligence of Seller. Except as specifically provided in this Purchase Contract, neither the Seller, nor any of its officers, directors, employees, agents or representatives, shall be deemed to make or to have made any representation or warranty as to the accuracy or completeness of any information pertaining to the Property or whether or not the information provided constitutes all of the information available to the Seller; and neither the Seller nor any of its officers, directors, employees, representatives or agents shall have any liability resulting from Purchaser's use of any information pertaining to the Property. Notwithstanding anything to the contrary set forth in this Agreement, the obligations of Purchaser set forth in this Section 5.3 shall survive the Closing or the termination of this Agreement, as applicable. 5.4 Indemnification of Seller. Purchaser shall indemnify and hold Seller harmless for any actions taken by Purchaser and its Consultants on the Property. Purchaser shall indemnify, defend (with attorneys selected by Seller) and hold Seller harmless from any and all claims, damages, costs and liability which may arise due to such entries, surveys, tests, investigations and the like, except any claims, damages, costs, or liability which arise from preexisting conditions of the Property or from the negligence of Seller. Seller shall have the right, without limitation, to disapprove any and all entries, surveys, tests, investigations and the like that in its reasonable judgment could result in any injury to the Property or breach of any agreement, or expose Seller to any liability, costs, liens or violations of applicable law, or otherwise adversely affect the Property or Seller's interest therein. No consent by the Seller to any such activity shall be deemed to constitute a waiver by Seller or assumption of liability or risk by Seller. The provisions of this Section 5.4 shall survive Closing or the earlier termination of this Purchase Contract. 5.5 Insurance of Purchaser. Purchaser shall maintain casualty insurance and comprehensive public liability insurance with broad form contractual and personal injury liability endorsements with respect to the Property and Purchaser's activities carried on therein. Such liability insurance shall provide coverages of not less than $1,000,000.00 for injury or death to any one person and $3,000,000.00 for injury or death to more than one person and $500,000.00 with respect to property damage, by water or otherwise. 5.6 Condition of Property. Purchaser hereby agrees to restore the Property to the same condition existing immediately prior to Purchaser's exercise of its rights pursuant to this Article 5 at Purchaser's sole cost and expense. Purchaser shall not permit any mechanic's or materialmen's liens or any other liens to attach to the Property by reason of the performance of any work or the purchase of any materials by Purchaser or any other party in connection with any studies or tests conducted by or for Purchaser. 5.7 Exercise of Due Care. Purchaser shall permit Seller to have a representative present during all investigations and inspections conducted with respect to the Property. Purchaser shall take all reasonable actions and implement all reasonable protections necessary to ensure that all actions taken in connection with the investigations and inspections of the Property, and all equipment, materials and substances generated, used or brought onto the Property pose no material threat to the safety of persons or the environment and cause no damage to the Property or other property of Seller or other persons. ARTICLE 6 TITLE 6.1 Title. Seller shall within ten (10) days of the Effective Date secure a commitment for title insurance for the Property in an amount equal to the Purchase Price ("TITLE COMMITMENT") issued by Fidelity National Title Insurance Company ("TITLE INSURER") for an owner's title insurance policy on the most recent standard American Land Title Association ("ALTA") Policy form ("POLICY"), together with legible copies of all instruments identified as exceptions therein. Purchaser agrees that it shall be solely responsible for payment of all costs relating to the procurement of the Title Commitment, review of title and the issuance of policies of title insurance, including but not limited to, the owner's title policy, the lender's title policy, and any endorsements thereto. 6.2 Permitted Exceptions. Purchaser agrees to accept title to the Land and Improvements, so long as the same is insurable at ordinary rates. Provided Purchaser has not previously terminated this Purchase Contract pursuant to Section 5.2, Purchaser agrees to accept title to the Land and Improvements by special warranty deed subject to the Permitted Exceptions ("SPECIAL WARRANTY DEED"). The term "PERMITTED EXCEPTIONS" shall mean the following, all of which shall be deemed Permitted Exceptions: 6.2.1 The title exceptions listed on Exhibit B of the form of Special Warranty Deed attached hereto as Exhibit 7.2.1.1; 6.2.2 Such exceptions and matters as the Title Insurer shall be willing to omit as exceptions to coverage; 6.2.3 All Commercial Leases; 6.2.4 All Property Contracts; and 6.2.5 Defects and exceptions which do not materially and adversely affect the conditions of title to the Property as of Closing. 6.3 Approved Exceptions. 6.3.1 The existence of other mortgages, liens, or encumbrances shall not be objections to title, provided that properly executed instruments in recordable form necessary to satisfy and remove the same of record are delivered to the Purchaser at Closing or, in the alternative, with respect to any mortgage or deed of trust liens, that payoff letters from the holder of the mortgage or deed of trust liens shall have been delivered to and accepted by the Title Insurer (sufficient to remove the same from the Policy at Closing), together in either case with recording and/or filing fees. 6.3.2 Unpaid liens for taxes, charges, and assessments shall not be objections to title, but the amount thereof plus interest and penalties thereon shall be deducted from the Purchase Price to be paid to Seller for the Property hereunder and paid by the Escrow Agent at Closing, subject to the provisions for apportionment of taxes and charges contained herein. 6.3.3 Exceptions for utility easements that do not involve an encroachment or violation shall not be objections to title. 6.4 Survey. Purchaser at Purchaser's sole cost and expense, may elect to cause to be prepared a survey for the Property ("SURVEY") to be delivered to Purchaser and Seller within thirty (30) days of the Effective Date. The Survey shall be prepared to Purchaser's specifications. In the event the perimeter legal description of the Property contained in the Survey differs from that contained in the deed or deeds by which Seller took title to the Property, the latter description shall be used in the Special Warranty Deed delivered to Purchaser at Closing, and the Survey legal description shall be used in a quitclaim deed to the Property which also shall be delivered to Purchaser at Closing. Upon Purchaser's receipt, Purchaser shall promptly provide Seller a copy of the Survey and the Title Commitment. 6.5 Title and Survey Review and Objections. Prior to the expiration of the Feasibility Period, Purchaser shall examine the Survey, if any, the Title Commitment and copies of the documents and instruments referred to in the Title Commitment. Purchaser shall have until 5:00 p.m. Pacific Time on the date of expiration of the Feasibility Period to provide written Notice to Seller of any defects affecting the marketability of the title to the Property or any objections to any exceptions (other than Permitted Exceptions), the Survey, or the Title Commitment. At Seller's sole option, Seller may elect to cure such objections or defects at Seller's expense at any time prior to Closing. If Seller is unable or unwilling, in its sole discretion or opinion, to eliminate such objections or defects or to cause the Title Insurer to insure over or satisfy such objections or defects, Seller shall give Purchaser written Notice thereof, and if Purchaser does not waive such objections or defects by written Notice delivered to Seller and the Title Insurer on or before seven (7) calendar days following the date Seller gives such Notice, then this Purchase Contract shall automatically terminate, in which event Purchaser shall release all of Purchaser's right and interest in such Property to Seller, the Deposit shall be returned to Purchaser, and except as expressly provided herein, and except for Purchaser's liability under Sections 5.3 and 5.4, the parties hereto shall have no further obligations to each other. In the event Purchaser fails to object to any exceptions, the Survey, or the Title Commitment or to any objections or defects affecting the marketability of title to the Property within the Feasibility Period, Purchaser shall be deemed to have waived any objections and defects and to accept title to the Property subject to the Title Commitment and the Permitted Exceptions. In the event Purchaser elects not to obtain a Survey, Purchaser shall be deemed to have waived any objections that would be disclosed by an "as built" survey, including all exceptions to the Policy for matters which would be disclosed by a survey. Anything to the contrary notwithstanding, Purchaser shall not have any right to terminate this Purchase Contract or object to any lien, encumbrance, exception or other matter that is a Permitted Exception, that has been waived or deemed to have been waived by Purchaser. ARTICLE 7 CLOSING 7.1 Closing and Prorations. 7.1.1 The Closing shall take place on or before fifteen (15) calendar days following the expiration or earlier termination of the Feasibility Period at such place as the parties shall mutually agree upon at a time mutually agreed upon on the Closing Date. Purchaser and Seller may agree to conduct Closing through a preclosing, an escrow or other arrangement, whereby Seller and Purchaser and their attorneys need not be physically present at the Closing and may deliver documents by overnight air courier or other means. Exercisable upon written Notice to Seller on or before fifteen (15) calendar days following the expiration or earlier termination of the Feasibility Period, Purchaser has one (1) option to extend the date of Closing an additional fifteen (15) calendar days; provided that Purchaser shall upon the exercise of such option, deliver to Escrow Agent the additional sum of Ten Thousand and No/100 Dollars ($10,000.00) in cash (such sum shall be and is deemed to be part of the "DEPOSIT" as that term is defined herein for all purposes). The Closing Date may be extended without penalty if mutually acceptable to Seller and Buyer. 7.1.2 All normal and customarily proratable items, including, without limitation, Rents (as defined below), operating expenses, escalations, taxes and insurance charges, common area maintenance charges, personal property taxes, other operating expenses and fees, shall be prorated as of the Closing Date, Seller being charged and credited for all of same attributable to the period up to the Closing Date (and credited for any amounts paid by Seller attributable to the period on or after the Closing Date) and Purchaser being responsible for, and credited or charged, as the case may be, for all of same attributable to the period on and after the Closing Date. All unapplied deposits (with interest thereon, if required by law or under the terms of the Commercial Leases) under Commercial Leases, if any, shall be transferred by Seller to Purchaser at the Closing. Purchaser shall assume at Closing the obligation to pay any payments due parties to Property Contracts and other agreements affecting the Property terminable on less than thirty (30) days' notice which survive Closing. Any real estate ad valorem or similar taxes for the Property, or any installment of assessments payable in installments, which installment is payable in the year of Closing, shall be prorated to the date of Closing, based upon actual number of days involved. The proration of real property taxes or installments of assessments shall be based upon the assessed valuation and tax rate figures for the year in which the Closing occurs to the extent the same are available; provided, that in the event that actual figures (whether for the assessed value of the Property or for the tax rate) for the year of Closing are not available at the Closing Date, the proration shall be made using figures from the preceding year. The proration shall be final and unadjustable except as provided in Section 7.1.3. For purposes of this Section 7.1.2 and Sections 7.1.3 and 7.1.4, the terms "RENT" and "RENTS" shall include, without limitation, base rents, additional rents, percentage rents and common area maintenance charges. The provisions of this Section 7.1.2 shall apply during the Proration Period (as defined below). 7.1.3 If any of the items subject to proration hereunder cannot be prorated at the Closing because the information necessary to compute such proration is unavailable, or if any errors or omissions in computing prorations at the Closing are discovered subsequent to the Closing, then such item shall be reapportioned and such errors and omissions corrected as soon as practicable after the Closing Date and the proper party reimbursed, which obligation shall survive the Closing for a period from the Closing Date until one (1) year after the Closing Date (the "PRORATION PERIOD"). Neither party hereto shall have the right to require a recomputation of a Closing proration or a correction of an error or omission in a Closing proration unless within the Proration Period one of the parties hereto (i) has obtained the previously unavailable information or has discovered the error or omission, and (ii) has given Notice thereof to the other party together with a copy of its good faith recomputation of the proration and copies of all substantiating information used in such recomputation. The failure of a party to obtain any previously unavailable information or discover an error or omission with respect to an item subject to proration hereunder and to give Notice thereof as provided above within the Proration Period shall be deemed a waiver of its right to cause a recomputation or a correction of an error or omission with respect to such item after the Closing Date. Any Rents that have accrued, but have not yet been paid, shall be prorated in accordance with estimates based upon the prior years' information (or reasonable estimates of Seller if no such prior years' information is available), and shall be subsequently readjusted and reapportioned upon receipt. Purchaser shall pay Seller for Rents that have accrued, but are not yet due and payable, at Closing. 7.1.4 If on the Closing Date any Tenant is in arrears in any Rent payment under any Commercial Lease (the "DELINQUENT RENT"), any Delinquent Rent received by Purchaser and Seller from such Tenant after the Closing shall be applied to amounts due and payable by such Tenant during the following periods in the following order of priority: (i) first, to the period of time before the Closing Date, and (ii) second, to the period of time after the Closing Date. If Delinquent Rent or any portion thereof received by Seller or Purchaser after the Closing are due and payable to the other party by reason of this allocation, the appropriate sum, less attorneys' fees and costs and expenses expended in connection with the collection thereof, shall be promptly paid to the other party. Prior to Closing, Seller shall have the right, but not the obligation, to enforce its rights against any and all Property, occupants, guests, or Tenants. After the Closing, Seller shall continue to have the right, but not the obligation, in its own name, to demand payment of and to collect Delinquent Rent owed to Seller by any Tenant, which right shall include, without limitation, the right to continue or commence legal actions or proceedings against any Tenant (provided, that Seller shall have no right to foreclose on or conduct sales or auctions of Tenant property and Seller shall not commence any legal actions or proceedings against any Tenant which continues as a Tenant at the Property after Closing without the prior consent of Purchaser, which will not be unreasonably withheld or delayed), and the delivery of the Assignment as defined in Section 7.2.1.3 shall not constitute a waiver by Seller of such right. Purchaser agrees to cooperate with Seller at no cost or liability to Purchaser in connection with all efforts by Seller to collect such Delinquent Rent and to take all steps, whether before or after the Closing Date, as may be necessary to carry out the intention of the foregoing, including, without limitation, the delivery to Seller, upon demand, of any relevant books and records (including, without limitation, rent statements, receipted bills and copies of Tenant checks used in payment of such Rent), the execution of any and all consents or other documents, and the undertaking of any act reasonably necessary for the collection of such Delinquent Rent by Seller; provided, however, that Purchaser's obligation to cooperate with Seller shall not obligate Purchaser to terminate any Commercial Lease with an existing Tenant or evict any existing Tenant from the Property. The provisions of this Section 7.1.4 shall apply during the Proration Period. 7.2 Items To Be Delivered Prior To Or At Closing. 7.2.1 Seller. At Closing, Seller shall deliver to Purchaser each of the following items, as applicable: 7.2.1.1 Special Warranty Deed. A Special Warranty Deed in the form attached as Exhibit 7.2.1.1 to Purchaser. The acceptance of the Special Warranty Deed at Closing shall be deemed to be full performance of, and discharge of, every agreement and obligation on Seller's part to be performed under this Purchase Contract, except as expressly stated herein. 7.2.1.2 Bill of Sale. A Bill of Sale without recourse or warranty in the form attached as Exhibit 7.2.1.2 covering all Fixtures and Tangible Personal Property required to be transferred to Purchaser with respect to the Property. Purchaser shall countersign the same so as to effect an assumption by Purchaser, including, without limitation, of Seller's obligations thereunder. 7.2.1.3 General Assignment. A general assignment (to the extent assignable and in force and effect) without recourse or warranty in the form attached as Exhibit 7.2.1.3 of all of Seller's right, title and interest in and to the Miscellaneous Property Assets, Permits, Property Contracts and Commercial Leases, subject to any required consents (the "ASSIGNMENT"). Purchaser shall countersign the same so as to effect an assumption by Purchaser, including, without limitation, of Seller's obligations thereunder. 7.2.1.4 Closing Statement. A closing statement executed by Seller. 7.2.1.5 Vendor's Affidavit. A vendor's affidavit or at Seller's option an indemnity, as applicable, in the customary form and substance reasonably acceptable to Seller to enable Title Insurer to delete those exceptions for mechanic's liens with respect to work or materials and rights of parties in possession other than under Commercial Leases, to be issued pursuant to the Title Commitment. 7.2.1.6 FIRPTA. A certification of Seller's nonforeign status pursuant to Section 1445 of the Internal Revenue Code of 1986, as amended, in the form attached hereto as Exhibit 7.2.1.6. 7.2.1.7 Other. Such other instruments, documents or certificates as are required to be delivered by Seller to Purchaser in accordance with any of the other provisions of this Purchase Contract. Except for the items expressly listed above to be delivered at Closing, delivery of any other required items shall be deemed made by Seller to Purchaser, if Seller leaves such documents at the Property in their customary place of storage or in the custody of Purchaser's representatives. 7.2.2 Purchaser. At Closing, Purchaser shall deliver to Seller the following items with respect to each Property being conveyed or transferred by merger at such Closing: 7.2.2.1 Purchase Price. The full Purchase Price as required by Article 3 hereof plus or minus the adjustments or prorations required by this Purchase Contract. If at Closing there are any liens or encumbrances on the Property that Seller is obligated to pay and discharge, Seller shall use any portion of the Purchase Price for the Property to satisfy the same. The existence of any such liens or encumbrances shall not be deemed objections to title if Seller shall comply with the foregoing requirements. 7.2.2.2 Closing Statement. A closing statement executed by Purchaser. 7.2.2.3 Bill of Sale. A countersigned counterpart of the Bill of Sale in the form attached as Exhibit 7.2.1.2. 7.2.2.4 General Assignment. A countersigned counterpart of the Assignment in the form attached as Exhibit 7.2.1.3. 7.2.2.5 Other. Such other instruments, documents or certificates as are required to be delivered by Purchaser to Seller in accordance with any of the other provisions of this Purchase Contract. ARTICLE 8 REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AND PURCHASER 8.1 Representations And Warranties And Covenants Of Seller. 8.1.1 Representations and Warranties of Seller. For the purpose of inducing Purchaser to enter into this Purchase Contract and to consummate the sale and purchase of the Property in accordance herewith, Seller represents and warrants to Purchaser the following as of the Effective Date and as of the Closing Date: 8.1.1.1 Seller (i) is lawfully and duly organized, and in good standing under the laws of the State of California, (ii) has or at Closing shall have all necessary power and authority to sell and convey the Property and to execute the documents to be executed by Seller, and (iii) prior to Closing will have taken all partnership or equivalent entity actions required for the execution and delivery of this Purchase Contract, and the consummation of the transactions contemplated by this Purchase Contract. To the best of Seller's knowledge, the compliance with or fulfillment of the terms and conditions hereof will not (i) conflict with, or result in a breach of, the terms, conditions or provisions of, or constitute a default under, any material agreement to which Seller is a party or by which Seller or the Property is otherwise bound, or (ii) violate any of the provisions of its respective certificate or articles of limited partnership. Seller has not made any other purchase contract for the sale of, or given any other person the right to purchase, all or any part of any of the Property applicable to the foregoing representation; 8.1.1.2 Seller owns insurable fee title to the Property, including all real property contained therein required to be sold to Purchaser, subject only to the Permitted Exceptions; 8.1.1.3 There are no adverse or other parties in possession of the Property, except for occupants, guests and Tenants under the Commercial Leases. Seller has not granted any license, lease or other right relating to the use or possession of the Property or any part thereof except the Tenants pursuant to the Commercial Leases; 8.1.1.4 The joinder of no person or entity other than Seller is necessary to convey the Property fully and completely to Purchaser at Closing, or to fulfill Seller's obligations and Seller has all necessary right and authority to convey and assign to Purchaser all contract rights and warranties required to be conveyed and assigned to Purchaser hereunder; 8.1.1.5 Purchaser has no duty to collect withholding taxes for Seller pursuant to the Foreign Investors Real Property Tax Act of 1980, as amended; 8.1.1.6 No pending or, to the knowledge of Seller, threatened litigation exists which if determined adversely, would materially affect the consummation of the transactions contemplated by this Purchase Contract. Seller has received no written notice of any actions, proceedings, litigation or governmental investigations or condemnation actions either pending or threatened against the Property, as applicable; and 8.1.1.7 Seller has received no written notice of any claims for labor performed, materials furnished or services rendered in connection with constructing, improving or repairing any of the Property, as applicable, caused by Seller and which remain unpaid beyond the date for which payment was due and in respect of which liens may or could be filed against any of the Property, as applicable; 8.1.1.8 To Seller's knowledge, Seller has received no written notice of any pending or threatened action or proceeding arising out of any alleged violation of any federal, state or local environmental statute, ordinance or regulation (collectively "ENVIRONMENTAL LAWS") or the presence of or a discharge of any Hazardous Materials at or from the Property. As used in this Agreement, the term "HAZARDOUS MATERIAL" shall include but not be limited to (i) asbestos, (ii) petroleum, (iii) any explosives, radioactive materials, wastes or substances, or (iv) any substances defined as "hazardous substances," "hazardous wastes," "extremely hazardous waste," "hazardous materials," "extremely hazardous waste," "hazardous materials," or "toxic substances" in the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sec. 9601, et seq. or in any other Environmental Law. 8.1.1.9 To Seller's knowledge, there are no stolen, unreasonably dangerous or contraband goods stored on the Property. 8.1.1.10 The Operating Statements are or will be in accordance with the books and records of Seller, and will fully, accurately and fairly set forth, or will set forth, the results of operation of the Property for the periods indicated in such statements. 8.1.1.11 The copies of the Commercial Leases provided to Purchaser under Section 8.1.5.4 hereunder are or will be true and complete copies of all the Commercial Leases currently affecting the Property. 8.1.2 Disclaimer. Except for the representations and warranties expressly set forth above in Section 8.1.1, the Property is expressly purchased and sold "AS IS," "WHERE IS," and "WITH ALL FAULTS." The Purchase Price and the terms and conditions set forth herein are the result of arm's-length bargaining between entities familiar with transactions of this kind, and said price, terms and conditions reflect the fact that Purchaser shall have the benefit of, and is relying upon, no information provided by Seller and no statements, representations or warranties, express or implied, made by or enforceable directly against Seller, including, without limitation, any relating to the value of the Property, the physical or environmental condition of the Property, the state, federal, county or local law, ordinance, order, permit or suitability, compliance or lack of compliance of the Property with any regulation, or any other attribute or matter of or relating to the Property (other than any covenants of title contained in the Special Warranty Deed conveying the Property and the representations set forth above). Purchaser represents and warrants that as of the Closing Date, it has and shall have reviewed and conducted such independent analyses, studies, reports, investigations and inspections as it deems appropriate in connection with the Property. If Seller provides or has provided any documents, opinions or work product of consultants, surveyors, architects, engineers, title companies, governmental authorities or any other person or entity with respect to the Property, Purchaser and Seller agree that Seller has done so or shall do so only for the convenience of both parties, and absent any intentional misrepresentation or omission by Seller or its representatives or agents, the reliance by Purchaser upon any such documents, opinions or work product shall not create or give rise to any liability of or against Seller, Seller's partners or affiliates or any of their respective partners, officers, directors, participants, employees, contractors, attorneys, consultants, representatives, agents, successors, assigns or predecessors-in-interest. Purchaser shall rely only upon the Policy obtained by Purchaser with respect to title to the Property. Purchaser acknowledges and agrees that no representation has been made and no responsibility is assumed by Seller with respect to current and future applicable zoning or building code requirements or the compliance of the Property with any other laws, rules, ordinances or regulations, the financial earning capacity or expense history of the Property, the continuation of contracts, continued occupancy levels of the Property, or any part thereof, or the continued occupancy by Tenants of any Commercial Leases or, without limiting any of the foregoing, occupancy at Closing. Purchaser agrees that, except as provided in Section 9.1, the departure or removal, prior to Closing, of any of such guests, occupants or Tenants shall not be the basis for, nor shall it give rise to, any claim on the part of Purchaser, nor shall it affect the obligations of Purchaser under this Purchase Contract in any manner whatsoever; and Purchaser shall close title and accept delivery of the Special Warranty Deed with or without such Tenants in possession and without any allowance or reduction in the Purchase Price under this Purchase Contract. Purchaser hereby releases Seller from any and all claims and liabilities relating to the foregoing matters, except as provided in Section 8.1.3 below. 8.1.3 Survival of Representations and Warranties. Seller and Purchaser agree that those representations contained in Section 8.1.1 shall survive Closing for a period of One (1) year (that is, any notice of any claim based on the breach of a representation contained in Section 8.1.1 that survives Closing must be commenced within One (1) year subsequent to the Closing Date), except for the representations contained in Sections 8.1.1.2, 8.1.1.3 and 8.1.1.7, which shall not survive the Closing but shall be merged into the deed, the assignment and the vendor's affidavit or indemnity delivered at Closing pursuant to Sections 7.2.1.1, 7.2.1.3 and 7.2.1.5. In the event that Seller breaches any representation contained in this Section 8.1 and Purchaser had actual knowledge of such breach prior to Closing, Purchaser shall be deemed to have waived any right of recovery for such breach, and Seller shall not have any liability in connection therewith. 8.1.4 No Duty of Inquiry. Representations and warranties above made "to Seller's knowledge", except for Sections 8.1.1.1 and 8.1.1.6, are made to the actual knowledge of Seller's on-site management employee, Shane Smith ("MANAGER"), and shall not be deemed to imply any duty of inquiry or imputation of knowledge. Mr. Smith is Seller's employee who is the most knowledgeable concerning the Property. 8.1.5 Covenants of Seller. 8.1.5.1 Seller covenants that it will not voluntarily create or cause any lien or encumbrance (other than Commercial Leases in the ordinary course of business and Property Contracts entered into pursuant to Section 8.1.5.2) to attach to the Property between the Effective Date and the Closing Date; any such monetary lien or encumbrance so attaching by voluntary act of Seller shall be discharged by the Seller at or prior to Closing, on the Closing Date or any postponed Closing Date. Except as expressly provided above, Seller shall not be required to undertake efforts to remove any other lien, encumbrance, security interest, exception, objection or other matter, to make any expenditure of money or institute litigation or any other judicial or administrative proceeding and Seller may elect not to discharge the same. 8.1.5.2 After the Effective Date, Seller will not without Purchaser's prior written approval enter into any leases (except Commercial Leases entered into in the ordinary course of business) or other contracts relating to the Property which will bind Purchaser after the Closing. Seller may enter into new Property Contracts cancelable without fee or penalty on no more than thirty (30) days' Notice in the ordinary course of business during the Feasibility Period. Unless this Purchase Contract is terminated as provided herein, upon the expiration of the Feasibility Period, and Purchaser's acceptance of the Property, Seller shall not enter into any new Commercial Leases or contracts affecting the Property without the reasonable consent of Purchaser. 8.1.5.3 Subject to casualties or other events beyond Seller's reasonable control, Seller will, until Closing, continue to operate the Property in the ordinary course of business. 8.1.5.4 Seller shall provide Purchaser copies of all Commercial Leases within five (5) days of the Effective Date certified by the Manager (as defined in Section 8.1.4) that the Commercial Leases delivered comprise true and complete copies of all Commercial Leases affecting the Property. 8.2 Representations And Warranties And Covenants Of Purchaser. 8.2.1 Representations and Warranties of Purchaser. For the purpose of inducing Seller to enter into this Purchase 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: 8.2.1.1 Purchaser is a limited liability company duly organized, validly existing and in good standing under the laws of California. 8.2.1.2 Purchaser, acting through any of its duly empowered and authorized manager, has all necessary power and authority to own and use its properties and to transact the business in which it is engaged, and has full power and authority to enter into this Purchase Contract, to execute and deliver the documents and instruments required of Purchaser herein, and to perform its obligations hereunder; and prior to Closing any consent of any of Purchaser's members required to so empower or authorize Purchaser shall have been obtained. 8.2.1.3 No pending or, to the knowledge of Purchaser, threatened litigation exists which if determined adversely would restrain the consummation of the transactions contemplated by this Purchase Contract or would declare illegal, invalid or nonbinding any of Purchaser's obligations or covenants to Seller. 8.2.1.4 Purchaser is duly authorized to execute and deliver, and acting through its duly empowered and authorized manager to perform this Purchase Contract and all documents and instruments and transactions contemplated hereby or incidental hereto, and such execution, delivery and performance by Purchaser does not (i) violate any of the provisions of their respective certificate or articles of organization or operating agreement, (ii) violate any provision of any law, governmental rule or regulation currently in effect, (iii) violate any judgment, decree, writ, injunction, award, determination or order currently in effect that names or is specifically directed at Purchaser or its property, and (iv) require the consent, approval, order or authorization of, or any filing with or notice to, any court or other governmental authority. 8.2.1.5 The joinder of no person or entity other than Purchaser is necessary to consummate the transactions to be performed by Purchaser and Purchaser has all necessary right and authority to perform such acts as are required and contemplated by this Purchase Contract. 8.2.2 Covenant of Purchaser. 8.2.2.1 Purchaser has not dealt with any broker, finder or any other person in connection with the purchase of or the negotiation of the purchase of the Property that might give rise to any claim for commission against Seller or lien or claim against the Property except for Everest Financial, Inc. ("EVEREST"). Purchaser shall and does hereby indemnify and hold harmless Seller from and against any claim whether or not meritorious, for any real state sales commissions, finder's fees, or like compensation in connection with the sale contemplated hereby and arising out of any act or agreement of Purchaser. ARTICLE 9 CONDITIONS PRECEDENT TO CLOSING 9.1 Conditions Precedent to Purchaser's Obligation to Close. Without limiting any of the rights of Purchaser elsewhere provided for in this Purchase Contract, Purchaser's obligation to close under this Purchase Contract shall be subject to and conditioned upon the fulfillment of each and all of the following conditions precedent: 9.1.1 All of the documents required to be delivered by Seller to Purchaser at Closing pursuant to the terms and conditions hereof shall have been delivered and shall be in form and substance reasonably satisfactory to Purchaser. 9.1.2 Each of the representations and warranties of Seller set forth in this Purchase Contract shall have been true and correct in all material respects when made, and shall be true and correct in all material respects on the Closing Date and as of the Effective Date as though such representations and warranties were made at and as of such date and time. 9.1.3 Seller shall have complied with, fulfilled and performed each of the covenants, terms and conditions to be complied with, fulfilled or performed by Seller hereunder. 9.1.4 Notwithstanding anything to the contrary, there are no other conditions on Purchaser's obligation to Close except as expressly set forth above. 9.1.5 Title Insurer shall be in a position to issue the Policy in the name of Purchaser or its assignee in accordance with Article 6 hereof. 9.1.6 Scheduled Rent (as defined herein) shall not have decreased by more than ten percent (10%) at any time after the date of expiration of the Feasibility Period. "Scheduled Rent" shall mean the total monthly rent for the Property under the Commercial Leases. 9.2 Conditions Precedent to Seller's Obligation to Close. Without limiting any of the rights of Seller elsewhere provided for in this Purchase Contract, Seller's obligation to close with respect to the Property under this Purchase Contract shall be subject to and conditioned upon the fulfillment of each and all of the following conditions precedent: 9.2.1 Purchaser's representations and warranties set forth in this Purchase Contract shall have been true and correct in all material respects when made, and shall be true and correct in all material respects on the Closing Date and as of the Effective Date as though such representations and warranties were made at and as of such date and time. 9.2.2 Purchaser shall have fully performed and complied with all covenants, conditions, and other obligations in this Purchase Contract to be performed or complied with by it at or prior to Closing including, without limitation, payment in full of the Purchase Price. 9.2.3 There shall not be pending or, to the knowledge of either Purchaser or Seller, any litigation or threatened litigation which, if determined adversely, would restrain the consummation of any of the transactions contemplated by this Purchase Contract or declare illegal, invalid or nonbinding any of the covenants or obligations of the Purchaser. ARTICLE 10 BROKERAGE 10.1 Indemnification. Seller represents and warrants to Purchaser that it has dealt only with Everest and the Aztec Group, Inc. ("AZTEC") (Aztec and Everest referred to collectively herein as the "BROKER") in connection with this Purchase Contract. Seller and Purchaser each represent and warrant to the other that other than the Broker, it has not dealt with or utilized the services of any other real estate broker, sales person or finder in connection with this Purchase Contract, and each party agrees to indemnify the other party from and against all claims for brokerage commissions and finder's fees arising from or attributable to the acts or omissions of the indemnifying party. Pursuant to separate agreements, from the Purchase Price at Closing, Seller shall pay Aztec a commission or finder's fee of Ninety-Seven Thousand Eight Hundred Eighty Thousand and No/100 Dollars ($97,880.00), and Seller shall pay Everest One Hundred Forty-Four Thousand and No/100 Dollars ($144,000.00). The Broker shall not be deemed a party or third-party beneficiary of this Purchase Contract. 10.2 No Warranties or Representations by Broker. The Broker assumes no responsibility for the condition of the Property or representation for the performance of this Purchase Contract by the Seller or Purchaser. ARTICLE 11 POSSESSION 11.1 Transfer of Possession. Possession of the Property subject to the Permitted Exceptions shall be delivered to Purchaser at the Closing. ARTICLE 12 DEFAULTS AND REMEDIES 12.1 Purchaser's Default. In the event Purchaser terminates this Purchase Contract following the Feasibility Period for any reason other than Seller's default, including any failure of satisfaction of a condition precedent to Purchaser's obligation to close, and Seller's inability to convey title as required by this Purchase Contract, or defaults hereunder prior to the Closing Date and consummation of the Closing does not occur by reason of such termination or default by Purchaser, including any failure of satisfaction of a condition precedent to Seller's obligation to close, Seller and Purchaser agree that it would be impractical and extremely difficult to estimate the damages which Seller may suffer. Therefore, Seller and Purchaser hereby agree that, except as expressly set forth herein and except for the Purchaser's liability under Sections 5.3 and 5.4, provided that Seller has not terminated this Purchase Contract and is not otherwise in default hereunder, the reasonable estimate of the total net detriment that Seller would suffer in the event that Purchaser terminates this Purchase Contract or defaults hereunder prior to the Closing Date is and shall be, as Seller's sole remedy (whether at law or in equity), the right to receive from the Escrow Agent and retain the full amount of the Deposit. The payment and performance of the above as liquidated damages is not intended as a forfeiture or penalty within the meaning of applicable law and is intended to settle all issues and questions about the amount of damages suffered by Seller in the applicable event, except as expressly set forth herein, and subject to and except for Purchaser's liability under Sections 5.3 and 5.4, irrespective of the time when the inquiry about such damages may take place. Upon any such failure by Purchaser hereunder, this Purchase Contract shall be terminated, and neither party shall have any further rights or obligations hereunder, each to the other, except as expressly set forth herein, and subject to and except for Purchaser's liability under Sections 5.3 and 5.4 above, and the right of Seller to collect such liquidated damages to the extent not theretofore paid by Purchaser. 12.2 Seller's Default. Provided that Purchaser has not terminated this Purchase Contract and is not otherwise in default hereunder, if the Closing does not occur as a result of Seller's default hereunder, Purchaser's sole remedy shall be to elect to terminate this Purchase Contract and receive reimbursement of the Deposit (or so much thereof as has been received by Escrow Agent) or to seek specific performance of this Purchase Contract. ARTICLE 13 RISK OF LOSS OR CASUALTY 13.1 Risk of Loss or Casualty. The risk of loss or damage to the Property by fire or other casualty until the date of Closing is assumed by the Seller, provided that the Seller's responsibility shall be only to the extent of any recovery from insurance now carried on the Property. If any of the Improvements shall be destroyed or damaged prior to the Closing, and the estimated cost of repair or replacement exceeds One Hundred Thousand and No/100 Dollars ($100,000.00), Purchaser may, by written notice given to Seller within fifteen (15) days after receipt of written notice from Seller of such damage or destruction, elect to terminate this Purchase Contract, in which event the Deposit shall immediately be returned by Escrow Agent to Purchaser and except as expressly provided herein, subject to and except for Purchaser's liability under Sections 5.3 and 5.4, the rights, duties, obligations, and liabilities of all parties hereunder shall immediately terminate and be of no further force or effect. If Purchaser does not elect to terminate this Purchase Contract pursuant to this Section 13.1, or has no right to terminate this Purchase Contract (because the damage or destruction does not exceed $100,000.00), and the sale of the Property is consummated, Purchaser shall be entitled to receive all insurance proceeds paid or payable to Seller by reason of such destruction or damage under the insurance policies carried by Seller (less amounts of insurance theretofore received and applied by Seller to restoration). If the amount of said casualty or rent loss insurance proceeds is not settled by the date of Closing, Seller shall execute at Closing all proofs of loss, assignments of claim, and other similar instruments to ensure that Purchaser shall receive all of Seller's right, title, and interest in and under said insurance proceeds. Seller shall not, in any event, be obligated to effect any repair, replacement, and/or restoration, but may do so at its option in which case Seller may apply the insurance proceeds to the costs of restoration. ARTICLE 14 RATIFICATION 14.1 Ratification. This Purchase Contract shall be null and void unless fully ratified by Purchaser and Seller on or before July 2, 1999. Ratification shall be demonstrated by execution of this Purchase Contract by Seller and Purchaser. ARTICLE 15 EMINENT DOMAIN 15.1 Eminent Domain and Condemnation. In the event that at the time of Closing all or any part of the Property is (or has previously been) acquired, or is about to be acquired, by authority of any governmental agency in purchase in lieu thereof (or in the event that at such time there is any notice of any such acquisition by any such governmental agency), Purchaser shall have the right, at Purchaser's option, to terminate this Purchase Contract by giving written Notice within fifteen (15) days after receipt of written Notice from Seller of the occurrence of such event and recover the Deposit hereunder, or to settle in accordance with the terms of this Purchase Contract for the full Purchase Price and receive the full benefit or any condemnation award. ARTICLE 16 MISCELLANEOUS 16.1 Exhibits And Schedules. All Exhibits annexed hereto are a part of this Purchase Contract for all purposes. 16.2 Assignability. This Purchase Contract is not assignable without first obtaining the prior written approval of the nonassigning party, however, Purchaser may assign this Purchase Contract to an affiliated entity organized for the purpose of acquiring the Property and other similar properties; provided that, Purchaser and assignee are jointly and severally liable for all obligations and liabilities under this Purchase Agreement. 16.3 Binding Effect. This Purchase Contract shall be binding upon and inure to the benefit of Seller and Purchaser, and their respective successors, heirs and permitted assigns. 16.4 Captions. The captions, headings, and arrangements used in this Purchase Contract are for convenience only and do not in any way affect, limit, amplify, or modify the terms and provisions hereof. 16.5 Number And Gender Of Words. 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. 16.6 Notices. All notices, demands, requests and other communications required pursuant to the provisions of this Purchase Contract ("NOTICE") shall be in writing and shall be deemed to have been properly given or served for all purposes (i) if sent by Federal Express or the nationally recognized overnight carrier for next business day delivery, on the first business day following deposit of such Notice with such carrier, or (ii) if sent by facsimile transmission, on the date of a successful transmission shown by a printed confirmation by the Sender's facsimile machine, or (iii) if sent by certified mail, return receipt requested postage prepaid, on the fifth (5th) business day following the date of mailing addressed as follows: If to Seller: If to Purchaser: Johnstown/Consolidated Income Partners Everest Storage Holdings, LLC c/o AIMCO 199 South Robles Avenue, Suite 440 1873 South Bellaire Street Pasadena, California 91101 Suite 1700 Attention: Carl D. Beckmann,Tony Arnest Denver, Colorado 80222 Attention: Tim Works, Harry Alcock Facsimile No: (626) 585-5929 Martha Carlin Facsimile No: and: Argent Real Estate 1401 Brickell Avenue, Suite 520 Miami, Florida 33131 Attention: David Marquette Facsimile No: (305) 371-6898 with a courtesy copy to: Richard A. Cohn, Esquire Bryan Cave LLP 700 Thirteenth Street, N.W. Washington, D.C. 20005-3960 Facsimile No: (202) 508-6200 and Margaret E. Koppen, Esquire Bryan Cave LLP Two North Central Avenue, 22nd Floor Phoenix, AZ 85004 Facsimile No: (602) 364-7070 Failure to provide courtesy copies shall not be considered a failure to provide adequate Notice. Any of the parties may designate a change of address by Notice in writing to the other parties. Whenever in this Purchase Contract the giving of Notice by mail or otherwise is required, the giving of such Notice may be waived in writing by the person or persons entitled to receive such Notice. 16.7 Governing Law And Venue. The laws of the State of Florida shall govern the validity, construction, enforcement, and interpretation of this Purchase 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 Purchase Contract, or the breach thereof, may be decided by proceedings instituted and litigated in the United States District Court for the district in which the Property is situated, and the parties hereto expressly consent to the venue and jurisdiction of such court. 16.8 Entirety And Amendments. This Purchase Contract embodies the entire Purchase Contract between the parties and supersedes all prior Purchase Contracts and understandings, if any, relating to the Property, and may be amended or supplemented only by an instrument in writing executed by the party against whom enforcement is sought. 16.9 Severability. If any of the provisions of this Purchase Contract is held to be illegal, invalid, or unenforceable under present or future laws, such provision shall be fully severable. The Purchase Contract shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part of this Purchase Contract; and the remaining provisions of this Purchase Contract shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance from this Purchase Contract. In lieu of such illegal, invalid, or unenforceable provision, there shall be added automatically as a part of this Purchase Contract a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible to make such provision legal, valid, and enforceable. 16.10 Multiple Counterparts. This Purchase Contract may be executed in a number of identical counterparts. If so executed, each of such counterparts is to be deemed an original for all purposes and all such counterparts shall, collectively, constitute one Purchase Contract. In making proof of this Purchase Contract, it shall not be necessary to produce or account for more than one such counterparts. 16.11 Further Acts. In addition to the acts and deeds recited herein and contemplated and performed, executed and/or delivered by Seller and Purchaser, Seller and Purchaser agree to perform, execute and/or deliver or cause to be performed, executed and/or delivered any and all such further acts, deeds, and assurances as may be necessary to consummate the transactions contemplated hereby. 16.12 Construction. No provision of this Purchase Contract shall be construed in favor of, or against, any particular party by reason of any presumption with respect to the drafting of this Purchase Contract; both parties, being represented by counsel, having fully participated in the negotiation of this instrument. 16.13 Confidentiality. Purchaser shall not disclose the terms and conditions contained in this Purchase Contract, shall keep the same confidential, provided that Purchaser may disclose the terms and conditions of this Purchase Contract (i) as required by law, (ii) to consummate the terms of this Purchase Contract, or any financing relating thereto, or (iii) to Purchaser's or Seller's lenders, attorneys and accountants. 16.14 Time Of The Essence. It is expressly agreed by the parties hereto that time is of the essence with respect to this Purchase Contract. 16.15 Cumulative Remedies And Waiver. Except as otherwise provided herein, no remedy herein conferred or reserved is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Purchase Contract or now or hereafter existing at law or in equity. 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 Purchase Contract shall be established by conduct, custom, or course of dealing. 16.16 Litigation Expenses. In the event either party hereto commences litigation against the other to enforce its rights hereunder, the prevailing party in such litigation shall be entitled to recover from the other party its reasonable attorneys' fees and expenses incidental to such litigation. 16.17 Time Periods. 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. 16.18 Exchange. At Seller's sole cost and expense, Seller may structure the sale of the Property to Purchaser as a Like Kind Exchange under Internal Revenue Code Section 1031 whereby Seller will acquire certain property (the "LIKE KIND EXCHANGE PROPERTY") in conjunction with the sale of the Property (the "LIKE KIND EXCHANGE"). Purchaser shall cooperate reasonably with Seller's conduct of the Like Kind Exchange, provided that all costs and expenses generated in connection with the Like Kind Exchange shall be borne solely by Seller, and Purchaser shall not be required to take title to or contract for the purchase of any other property. If Seller uses a qualified intermediary to effectuate the exchange, any assignment of the rights or obligations of Seller hereunder shall not relieve, release or absolve Seller of its obligations to Purchaser. In no event shall the Closing Date be delayed by the Like Kind Exchange. Seller shall indemnify and hold harmless Purchaser from and against any and all claims and liability arising from and out of the Like Kind Exchange. [Remainder of Page Intentionally Left Blank.] NOW WHEREFORE, the parties hereto have executed this Purchase Contract as of the date first set forth above. SELLER: JOHNSTOWN/CONSOLIDATED INCOME PARTNERS, a California limited partnership By: ConCap Equities, Inc., a Delaware corporation, its managing general partner By: Patrick J. Foye, Vice President July 2, 1999 ("EFFECTIVE DATE") PURCHASER: EVEREST STORAGE HOLDINGS, LLC, a California limited liability company By: Name:: Title: EXHIBIT A LEGAL DESCRIPTION Parcel "A" of the WETZLER PLAT, according to the Plat thereof, recorded in Plat Book 132, at page 42, of the Public Records of BROWARD County, Florida. Land Description: Access Easement a Portion of Parcel "A", WETZLER PLAT, according to the Plat thereof, as recorded in Plat Book 132, Page 42 of the Public Records of BROWARD County, Florida, more particularly described as follows: Beginning at the Southwest corner of said Parcel "A"; thence North 01 degrees 54'02" West, along the West line of said Parcel "A", 60.00 feet; thence, North 87 degrees 28'57" East, 76.00 feet; thence, South 01 degrees 54'02" East, 60.00 feet; thence, South 87 degrees 28'57" West, along the South line of said Parcel "A", 76.00 feet to the Point of Beginning. There shall be no adjustment to the Purchase Price and no other claim under the Purchase Contract as a result of any discrepancy between the square footage and the approximate square footage of the Improvements set forth in Section 1.1.7 of the Purchase Contract. EXHIBIT B ESCROW AGREEMENT THIS ESCROW AGREEMENT ("ESCROW AGREEMENT") made this 2nd day of July, 1999 by and among, Johnstown/Consolidated Income Partners, a California limited partnership ("SELLER"); Everest Storage, LLC, a California limited liability company, ("PURCHASER"); and Fidelity National Title Insurance Co. ("ESCROW AGENT"); WITNESSETH: WHEREAS, Purchaser and Seller are parties to a certain Purchase and Sale Contract (the "PURCHASE CONTRACT") made and dated as of the 2nd day of July, 1999, wherein Seller agrees to sell and Purchaser agrees to purchase certain real estate located in Davie, Florida, including improvements located thereon and related property, all as more particularly described and set forth in the Purchase Contract (collectively, the "PROPERTY"); WHEREAS, the Purchase Contract requires that Purchaser provide a deposit in the amount of One Hundred Thousand and No/100 Dollars ($100,000.00) in cash to be held pursuant to this Escrow Agreement (the "ESCROW FUND"). NOW, THEREFORE, the parties agree to the following: 1. Establishment of Escrow. Within five (5) days of the Effective Date (as defined in the Purchase Contract), Purchaser shall deliver to Escrow Agent the sum of Twenty-Five Thousand and No/100 Dollars ($25,000.00) in cash; and provided the Purchase Contract has not been earlier terminated as provided therein, Purchaser shall on or prior to the date of expiration of the Feasibility Period (as defined in the Purchase Contract) deliver to Escrow Agent the additional sum of Seventy-Five Thousand and No/100 Dollars ($75,000.00) in cash (collectively or individually, such sums shall be referred to herein as the "ESCROW FUND"), to be deposited, held, invested, and disbursed for the benefit of Seller and Purchaser and their respective successors and assigns, as provided herein and as provided in the Purchase Contract. 2. Investment of Escrow Fund. All funds received by Escrow Agent shall be held in insured accounts and invested in such short-term, high-grade securities, money market funds or accounts, interest bearing bank accounts, bank certificates of deposit or bank repurchase agreements as Purchaser deems suitable, and all interest and income thereon shall become part of the Escrow Fund and shall be remitted to the party entitled to the Escrow Fund, as set forth below. 3. Application of Escrow Fund. Escrow Agent shall hold the Escrow Fund as provided above and (a) if the sale of the Property is closed by the date fixed therefor in the Purchase Contract (or any extension date provided for by mutual written consent of the parties hereto, given or withheld in their respective sole discretion), Escrow Agent shall deliver the Escrow Fund to Seller in immediately available funds by wire transfer on the Closing Date (as defined in the Purchase Contract), (b) if the sale of the Property is not closed by the date fixed therefor in the Purchase Contract (or any such extension date) due to failure of a condition precedent to Purchaser's obligations, the Escrow Agent shall return and refund the Escrow Fund to Purchaser in immediately available funds by wire transfer to Purchaser in accordance with the instructions of Purchaser, (c) if the sale of the Property is not closed by the date fixed therefor in the Purchase Contract (or any such extension date) owing to failure of performance by Seller, Purchaser shall give Notice to the Escrow Agent and Seller and in such Notice shall state whether it elects as its remedy return of the Escrow Fund or specific performance of the Purchase Contract; if Purchaser elects return of the Escrow Fund, Escrow Agent shall return and refund the Escrow Fund in immediately available funds by wire transfer to Purchaser in accordance with the instructions of Purchaser, (d) if the sale of the Property is not closed by the date fixed therefor in the Purchase Contract (or any such extension date) owing to failure of performance by Purchaser, Escrow Agent shall forthwith deliver the Escrow Fund in immediately available funds by wire transfer to Seller in accordance with the instructions of Seller, and (e) if Purchaser shall have canceled the Purchase Contract on or before the expiration of the Feasibility Period (as defined in the Purchase Contract), the Escrow Agent shall return and refund the Escrow Fund to Purchaser in immediately available funds by wire transfer to Purchaser in accordance with the instructions of Purchaser. If on or prior to the termination of the Escrow Agreement, a party claims to be entitled to payment of the Escrow Fund under the provisions referred to, such party shall give Notice to the Escrow Agent and the other party of the claim in writing, describing in such Notice the nature of the claim, and the provisions of the Purchase Contract on which the claim is based. Unless the other party sends the Escrow Agent a written objection to the claim, with a copy concurrently to the claiming party, within ten (10) days after delivery of the Notice of claim, the claim shall be conclusively presumed to have been approved. In such case, or in the event of mutual written consent of the parties hereto, given or withheld in their respective sole discretion, Escrow Agent shall, within two (2) business days thereafter, pay the claim as demanded. When all monies held by Escrow Agent have been finally distributed in accordance herewith, this Escrow Agreement shall terminate automatically. 4. Liability. Escrow Agent will be obligated to perform only the duties that are expressly set forth herein. In case of conflicting demands upon Escrow Agent, it may (i) refuse to comply therewith as long as such disagreement continues and make no delivery or other disposition of any funds or property then held (and Escrow Agent shall not be or become liable in any way for such failure or refusal to comply with such conflicting or adverse claims or demands, except for its failure to exercise due care, willful breach and willful misconduct); and continue to so refrain and so refuse to act until all differences have been adjusted by agreement and, Escrow Agent has been notified thereof in writing signed jointly by Seller and Purchaser or (ii) to interplead the portion of Escrow Fund in dispute. 5. No Obligation to Take Legal Action. Escrow Agent shall not be under any obligation to take any legal action in connection with this Escrow Agreement or for its enforcement, or to appear in, prosecute, or defend any action or legal proceeding which, in its opinion, would or might involve it in any costs, expense, loss, or liability, unless and as often as required by it, it is furnished with satisfactory security and indemnity against all such costs, expenses, losses, or liabilities. 6. Status of Escrow Agent. Escrow Agent is to be considered and regarded as a depository only, and shall not be responsible or liable (except for its failure to exercise due care, willful breach or willful misconduct) for the sufficiency or correctness as to form, manner of execution, or validity of any instrument deposited pursuant to this Escrow Agreement, nor as to the identity, authority, or rights of any person executing the same. Escrow Agent's duties hereunder shall be limited to the safekeeping and investment of money, instruments, and securities received by it as Escrow Agent and for their disbursement in accordance with the written escrow instructions given it in accordance with this Escrow Agreement. 7. Written Instructions of Parties. Notwithstanding any contrary provision contained herein, Escrow Agent shall, at all times, have full right and authority and the duty and obligation to pay over and disburse the principal and interest of the Escrow Fund in accordance with the joint written instructions signed by Seller and Purchaser. 8. Notices. Any required or permitted Notice or other communication under this Escrow Agreement ("NOTICE") shall be given as follows. All Notices, requests, demands and other communications hereunder shall be deemed to have been duly given if the same shall be in writing and shall be sent by Federal Express or other recognized national overnight courier service maintaining records of delivery, or sent by facsimile transmission confirmed as successful by Sender's facsimile machine or sent by registered or certified mail, postage pre-paid, and addressed as set forth below: (a) If to Seller: Johnstown/Consolidated Income Partners c/o AIMCO 1873 South Bellaire Street Suite 1700 Denver, CO 80222 Attention: Tim Works, Harry Alcock, Martha Carlin Phone: 303-691-4357 Facsimile No: and: Argent Real Estate 1401 Brickell Avenue, Suite 520 Miami, Florida 33131 Attention: David Marquette Phone: 305-371-9299 Facsimile No: 305-371-6898 with a courtesy copy to: Richard A. Cohn, Esq. Bryan Cave LLP 700 Thirteenth Avenue, N.W. Washington, D.C. 20005-3961 Phone: 202-508-6228 Facsimile No: 202-508-6200 and Margaret E. Koppen, Esquire Bryan Cave LLP Two North Central Avenue, 22nd Floor Phoenix, AZ 85004 Phone: 602-364-7492 Facsimile No: 602-364-7070 (b) If to Purchaser: Everest Storage, LLC 199 South Robles Avenue, Suite 440 Pasadena, California 91101 Attention: Carl D. Beckmann, Tony Arnest Facsimile No: 626-585-5929 (c) If to Escrow Agent: Fidelity National Title Insurance Co. Bank of America Center 700 Louisiana, Suite 2600 Houston, TX 77002 Attention: Lolly Avant Phone: 713-228-3009 Facsimile No: 713-225-2726 Failure to provide courtesy copies shall not be considered a failure to provide adequate Notice. Any party may change the address to which Notices are to be addressed by giving the other parties Notice in the manner herein set forth. All such Notices, requests, demands and other communications shall be deemed to have been delivered (i) as of the day of receipt, in the case of facsimile transmission, or (ii) as of the day of receipt or attempted delivery date in the case of delivery by overnight courier, or (iii) as of the date of receipt or first attempted delivery, as evidenced by the return receipt card, in the case of mailing by certified or registered United States mail. 9. Fee. Escrow Agent shall receive a fee of Three Hundred Dollars ($300.00) for its services hereunder, and be paid or reimbursed for all expenses, disbursements and advances, including reasonable attorneys' fees, incurred or paid in connection with carrying out its duties hereunder, all amounts to be payable by Purchaser and not out of the Escrow Fund. Non-payment of such fee by Purchaser shall not entitle Escrow Agent to refuse or fail to act as required by this Escrow Agreement. 10. Titles and Section Headings. Titles of sections and subsections contained in this Escrow Agreement are inserted for convenience of reference only, and neither form a part of this Escrow Agreement or are to be used in its construction or interpretation. 11. Counterparts. This Escrow Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. 12. Non-Waiver. No waiver by either party of any breach of any term or condition of this Escrow Agreement shall operate as a waiver of any other breach of such term or condition or of any other term or condition. No failure to enforce such provision shall operate as a waiver of such provision or of any other provision hereof, or constitute or be deemed a waiver or release of any other party for anything arising out of, connected with, or based upon this Escrow Agreement. 13. Binding Effect. This Escrow Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective transferees, successors, and assigns. The parties recognize and acknowledge that the powers and authority granted Escrow Agent herein are each irrevocable and coupled with an interest. Escrow Agent shall have no liability to any Seller for any mistakes in judgment in the performance of any function hereunder, except for failure to exercise due care, willful breach and willful misconduct. 14. Nonlimitation of Liability. Nothing contained herein shall in any way limit the liabilities, obligations and remedies of Seller and Purchaser as set forth in the Purchase Contract. 15. Governing Law. This Escrow Agreement shall be governed by and construed in accordance with the laws of Florida. 16. Time of Essence. Time is of the essence of this Escrow Agreement. 17. Entire Agreement; Modification. This Escrow Agreement supersedes all prior agreements and constitutes the entire agreement with respect to the subject matter hereof. It may not be altered or modified without the written consent of all parties. [Remainder of page intentionally left blank.] In witness whereof each of the parties hereto has caused this Escrow Agreement to be executed on its behalf duly authorized persons, all as of the day and year first above written. EVEREST STORAGE HOLDINGS, LLC, a California limited liability company By: Name: Its: JOHNSTOWN/CONSOLIDATED INCOME PARTNERS, a California limited partnership By: ConCap Equities, Inc., a Delaware corporation, its managing general partner By: Patrick J. Foye, vice president FIDELITY NATIONAL TITLE INSURANCE CO. By: Name: Its: EXHIBIT 1.1.4 RENT ROLL EXHIBIT 1.1.6 FIXTURES AND PERSONAL PROPERTY 1. 2 golf carts 2. Copy machine 3. Fax machine 4. Computer-monitor; printer and key board 5. 4 phones 6. Calculators 7. 1 file cabinet 8. Walkee-talkee for office 9. Video surveillance system 10. Trailer EXHIBIT 1.1.14 LIST OF PROPERTY CONTRACTS [TO COME] EXHIBIT 7.2.1.1 FORM OF SPECIAL WARRANTY DEED This Special Warranty Deed, made this ____ day of June, 1999 is made by Johnstown/Consolidated Income Partners, a California limited partnership, with its principal office at 1873 South Bellaire, Suite 1700, Denver, Colorado 80222 ("GRANTOR") to Everest Storage Holdings, LLC, a California limited liability company ("GRANTEE"). WITNESSETH: THAT SAID Grantor, in consideration of the sum of Ten Dollars ($10.00) and other good and valuable consideration, the receipt of which is hereby acknowledged, does by these presents, Bargain and Sell, Convey and Warrant unto the said Grantee and its successors and assigns its interest in that certain real estate, situated in the County of Broward and State of Florida, more particularly described on Exhibit A attached hereto, subject to all rights of way, easements, restrictions, liens and encumbrances described on Exhibit B attached hereto (the "PROPERTY"). TO HAVE AND TO HOLD THE SAME, together with all and singular the tenements, hereditaments and appurtenances thereunto belonging or in any wise appertaining, forever. And said Grantor, for itself, its successors and assigns, does hereby covenant, promise and agree to and with said Grantee, that the Grantor will warrant and forever defend the same unto the said Grantee, its successors and assigns, against said Grantor, its successors and all and every person or persons whomsoever, lawfully claiming or to claim the same by, through or under the Grantor, excepting the matters described on Exhibit B attached hereto. IN WITNESS WHEREOF, the said Grantor has hereunto executed this Special Warranty Deed the day and year first above written. GRANTOR: JOHNSTOWN/CONSOLIDATED INCOME PARTNERS, a California limited partnership By: ConCap Equities, Inc., a Delaware corporation its managing general partner By: Patrick J. Foye, vice president STATE OF _______________) ) ss. COUNTY OF ___ __________) On the ___ day of June, 1999, personally appeared before me Patrick J. Foye, who being by me duly sworn did say that he is the vice president of ConCap Equities, Inc., a California corporation, the managing general partner of Johnstown/Consolidated Income Partners, a California limited partnership, and that the foregoing instrument was signed in behalf of said limited partnership by authority of a resolution of its managing general partner and said managing general partner duly acknowledged to me that said limited partnership executed the same. [SEAL] Notary Public My commission expires: My residence is: EXHIBIT A TO SPECIAL WARRANTY DEED Legal Description Parcel "A" of the WETZLER PLAT, according to the Plat thereof, recorded in Plat Book 132, at page 42, of the Public Records of BROWARD County, Florida. Land Description: Access Easement a Portion of Parcel "A", WETZLER PLAT, according to the Plat thereof, as recorded in Plat Book 132, Page 42 of the Public Records of BROWARD County, Florida, more particularly described as follows: Beginning at the Southwest corner of said Parcel "A"; thence North 01 degrees 54'02" West, along the West line of said Parcel "A", 60.00 feet; thence, North 87 degrees 28'57" East, 76.00 feet; thence, South 01 degrees 54'02" East, 60.00 feet; thence, South 87 degrees 28'57" West, along the South line of said Parcel "A", 76.00 feet to the Point of Beginning. EXHIBIT B TO SPECIAL WARRANTY DEED Permitted Encumbrances 1. General and personal property taxes for the year 1999 and all subsequent years. 2. Special taxes or assessments becoming a lien or payable after the date of this Deed. 3. Rights of eminent domain, governmental rights of police power and other governmental or quasi-governmental rights. 4. Rights of tenants in possession of the Property pursuant to unrecorded leases, as tenants only. 5. Visible and apparent easements and all underground easements, if any, the existence of which may arise by unrecorded grant or by use. 6. Present and future zoning laws, ordinances, restrictions, resolutions, orders and regulations and all present and future ordinances, laws, regulations and orders of all federal, state, county, municipal or other governments, agencies, boards, bureaus, commissions, authorities and bodies now or hereafter having or acquiring jurisdiction of the Property and the use and improvement thereof. 7. Any law, ordinances or governmental regulation (including but not limited to building and zoning ordinances) restricting or regulating or prohibiting the occupancy, use or enjoyment of the Property, or regulating the character, dimensions or location of any improvement now or hereafter erected on the Property, or prohibiting a separation in ownership or a reduction in the dimensions or area of the Property, and the effect of any violation of such law, ordinance or governmental regulation. 8. Other covenants, conditions, limitations, restrictions, rights, rights-of- way, liens, encumbrances, encroachments, defects, reservations, easements, agreements and other matters of record. 9. Any encroachments, easements, measurements, variations in area or content, party walls or other facts which a correct survey of the premises would show. 10. Roads, ways, streams, or easements, if any, not shown by the public records, riparian rights and the title to any filled-in lands. 11. Restrictions and easements (deleting therefrom any restrictions indicating any preference, limitation or discrimination based on race, color, religion, sex, handicap, familial status or national origin), contained in Plat Book 132, at page 42, of the Public Records of Broward County, Florida. 12. Reservations in favor of the Trustees of the Internal Improvement Fund of the State of Florida under Deed No. 16-160 dated June 4, 1908 filed June 30, 1908 in Deed Book 49, page 213, released in part by Quit-Claim Deed dated January 26, 1960 filed February 4, 1960 in Official Records Book 1821, page 465, released in part by Quit-Claim Deed dated November 26, 1968 recorded January 14, 1969 in Official Records Book 3835, page 515. Said reservations were assigned by instrument dated January 29, 1964 recorded by instrument dated February 5, 1964 in Official Records Book 2748, page 624 and assigned by instrument dated February 6, 1964, recorded February 13, 1964 in Official Records Book 2753, page 971, all of the Public Records of Broward County, Florida. 13. Reservations in favor of the State of Florida as contained in Deed from the Trustees of the Internal Improvement Fund of the State of Florida contained in Tax Deed No. 47 dated June 28, 1920, and filed in September 4, 1920 in Deed Book 11, at page 477, released in part by Release of Reservations dated November 20, 1968, recorded January 14, 1969 in Official Records Book 3835, at page 513, all of the Public Records of Broward County, Florida. 14. Central Broward Drainage District Resolution as contained in instrument filed June 8, 1967, in Official Records Book 3438, at page 60, of the Public Records of Broward County, Florida. 15. Easements and reservations as contained in Warranty Deed filed January 14, 1969, Under Clerk's File No. 69-5410, and Official Records Book 3835, at page 516, both of the Public Records of Broward County, Florida. 16. Agreement for maintenance, filed December 29, 1987, in Official Records Book 15070, at page 160, as affected by Affidavit filed December 29, 1987, in Official Records Book 15070, at page 164, both of the Public Records of Broward County, Florida. 17. Easement granted to in favor of the Town of Davie contained in Special Warranty Deed filed July 28, 1988, in Official Records Book 15644, at page 486, of the Public Records of Broward County, Florida. 18. Easement granted for mutual driveway by instrument filed January 7, 1988, in Official Records Book 15098, at page 871, of the Public Records of Broward County, Florida. EXHIBIT 7.2.1.2 FORM OF BILL OF SALE This Bill of Sale dated effective as of the _______ day of ___________, 1999, is made by Johnstown/Consolidated Income Partners, a California limited partnership ("SELLER") to Everest Storage Holdings, LLC, a California limited liability company ("PURCHASER"). For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller, in connection with the sale pursuant to a certain Purchase and Sale Contract (the "PURCHASE CONTRACT") between Seller and Purchaser dated ____________, 1999, of certain real property ("PROPERTY") located in Broward County, State of Florida, which is more particularly described on Exhibit A attached hereto and by this reference incorporated herein, hereby quitclaims to Purchaser, without recourse or warranty to Seller, all of Seller's right, title and interest in and to the all fixtures, furniture, furnishings, fittings, equipment, machinery, apparatus, appliances and other articles of personal property located on the Property as of the date hereof and used or usable in connection with any present or future occupation or operation of all or any part of the Property as set forth on Exhibit B hereto (collectively, "PERSONAL PROPERTY"). Notwithstanding the foregoing, "PERSONAL PROPERTY" shall not include (i) equipment leased by Seller and the interest of Seller in any equipment provided to the Property for use, but not owned or leased by Seller, or (ii) property owned or leased by any tenants under any leases affecting the Property, guests, employees or other persons furnishing goods or services to the Property, or (iii) property and equipment owned by Seller, which in the ordinary course of business of the Property is not used principally for the business, operation or management of the Property, or (iv) the property and equipment, expressly identified on Exhibit C hereto (collectively, "EXCLUDED PERSONAL PROPERTY"). WITH RESPECT TO ALL MATTERS TRANSFERRED, WHETHER TANGIBLE OR INTANGIBLE, PERSONAL OR REAL, SELLER EXPRESSLY DISCLAIMS A WARRANTY OF MERCHANTABILITY AND WARRANTY FOR FITNESS FOR A PARTICULAR USE OR ANY OTHER WARRANTY EXPRESSED OR IMPLIED THAT MAY ARISE BY OPERATION OF LAW OR UNDER THE UNIFORM COMMERCIAL CODE FOR THE STATE OF FLORIDA. PURCHASER TAKES THE PROPERTY "AS IS" AND "WITH ALL FAULTS". Purchaser hereby accepts the Personal Property on and subject to the conditions and disclaimers above, and assumes all responsibility and liability for the Personal Property as of the date hereof. SELLER: JOHNSTOWN/CONSOLIDATED INCOME PARTNERS, a California limited partnership By: ConCap Equities, Inc., a Delaware corporation its managing general partner By: Patrick J. Foye, vice president PURCHASER: EVEREST STORAGE HOLDINGS, LLC, a California limited liability company By: Name: Its: EXHIBIT A TO BILL OF SALE LEGAL DESCRIPTION OF REAL PROPERTY Parcel "A" of the WETZLER PLAT, according to the Plat thereof, recorded in Plat Book 132, at page 42, of the Public Records of BROWARD County, Florida. Land Description: Access Easement a Portion of Parcel "A", WETZLER PLAT, according to the Plat thereof, as recorded in Plat Book 132, Page 42 of the Public Records of BROWARD County, Florida, more particularly described as follows: Beginning at the Southwest corner of said Parcel "A"; thence North 01 degrees 54'02" West, along the West line of said Parcel "A", 60.00 feet; thence, North 87 degrees 28'57" East, 76.00 feet; thence, South 01 degrees 54'02" East, 60.00 feet; thence, South 87 degrees 28'57" West, along the South line of said Parcel "A", 76.00 feet to the Point of Beginning. EXHIBIT B TO BILL OF SALE DESCRIPTION OF PERSONAL PROPERTY 1. 2 golf carts 2. Copy machine 3. Fax machine 4. Computer-monitor; printer and key board 5. 4 phones 6. Calculators 7. 1 file cabinet 8. Walkee-talkee for office 9. Video surveillance system 10. Trailer EXHIBIT C TO BILL OF SALE DESCRIPTION OF EXCLUDED PERSONAL PROPERTY None EXHIBIT 7.2.1.3 FORM OF GENERAL ASSIGNMENT This General Assignment ("ASSIGNMENT") is executed by Johnstown/Consolidated Income Partners, a California limited partnership ("SELLER"), in favor of Everest Storage Holdings, LLC, a California limited liability company ("PURCHASER"). Seller and Purchaser have entered into that certain Purchase and Sale Contract dated as of the _____ day of June, 1999 ("PURCHASE CONTRACT"), in which Seller has agreed to sell and Purchaser has agreed to purchase the real property described in Exhibit A attached thereto, the improvements located thereon, and certain related property (collectively, the "PROJECT"). Pursuant to the terms of the Purchase Contract, Seller has agreed to assign, without recourse or warranty, to Purchaser all of Seller's right, title and interest, if any, in and to the Property (as hereinafter defined). NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser agree as follows: 1. As used herein, the term "PROPERTY" shall mean the following property to the extent said property is owned by Seller and used in, held for use in connection with, or necessary for the operation of the Project: a. Books and Records. All of Seller's rights, IF ANY, in and to files, records, and books of account of the Project. b. Licenses and Permits. All of Seller's rights and interests, IF ANY, in and to plans, specifications, reports, rights, privileges, licenses, permits, surveys, entitlements, maps, agreements, and authorizations utilized with respect to the Project, excluding any "EXCLUDED PERMITS" defined as such in the Purchase Contract. c. Property Contracts. All of Seller's rights and interests in and to maintenance, service or utility contracts which relate to the maintenance, repair or operation of the Project scheduled on Exhibit B attached hereto. d. Commercial Leases. All of Seller's rights and interests in and to leases, subleases, and other occupancy agreements, whether or not of record, which provide for use or occupancy of space or facilities on or relating to the Project scheduled on Exhibit C attached hereto. The term "PROPERTY" shall not include any of the foregoing: (i) to the extent the same are reserved to Seller pursuant to the Purchase Contract to which Seller and Purchaser are parties; and (ii) to the extent that the sale or transfer thereof requires consent or approval of any third party, which consent or approval is not obtained by Seller. Nothing herein shall create a transfer or assignment of intellectual property or similar assets of Seller. 2. Assignment. Seller hereby assigns, sells and transfers, without recourse or warranty, to Purchaser all of Seller's right, title and interest, if any, in and to the Property, subject to any rights of consent as provided therein. 3. Assumption. Purchaser expressly agrees to assume and hereby assumes all liabilities and obligations of the Seller in connection with the Property Contracts and Commercial Leases and agrees to perform all of the covenants and obligations of Seller thereunder, including without limitation, all liabilities and obligations of landlord under the Commercial Leases and the contracting parties under the Property Contracts, including responsibility for refunding security deposits, to be performed by such parties after the Closing. Purchaser further agrees to indemnify, defend and hold Seller harmless from and against any and all cost, loss, harm or damage which may arise in connection with Purchaser's ownership and operation of the Property after the Closing, including Purchaser's performance after the Closing of the Commercial Leases and Property Contracts. Seller agrees to indemnify, defend and hold Purchaser harmless from and against any and all cost, loss, harm or damage which may arise in connection with Seller's ownership and operation of the Property prior to the Closing, including Seller's performance prior to the Closing of the Commercial Leases and Property Contracts. 4. Counterparts. This Assignment may be executed in counterparts, each of which shall be deemed an original, and both of which together shall constitute one and the same instrument. 5. Disclaimer. This Assignment and Purchaser's acceptance of the Property shall be without warranty by Seller or recourse to Seller, except only as expressly stated herein or in the Purchase Contract to the contrary. 6. Attorneys' Fees. If any action or proceeding is commenced by either party to enforce its rights under this Assignment, the prevailing party in such action or proceeding shall be entitled to recover all reasonable costs and expenses incurred in such action or proceeding, including reasonable attorneys' fees and costs, in addition to any other relief awarded by the court. 7. Applicable Law. This Assignment shall be governed by and interpreted in accordance with the laws of the State of Florida. 8. Titles and Section Headings. Titles of sections and subsections contained in this Assignment are inserted for convenience of reference only, and neither form a part of this Assignment or are to be used in its construction or interpretation. 9. Binding Effect. This Assignment shall be binding upon and inure to the benefit of the parties hereto and their respective transferees, successors, and assigns. 10. Entire Agreement; Modification. This Assignment supersedes all prior agreements and constitutes the entire agreement with respect to the subject matter hereof. It may not be altered or modified without the written consent of all parties. WITH RESPECT TO ALL MATTERS TRANSFERRED, WHETHER TANGIBLE OR INTANGIBLE, PERSONAL OR REAL, SELLER EXPRESSLY DISCLAIMS A WARRANTY OF MERCHANTABILITY AND WARRANTY FOR FITNESS FOR A PARTICULAR USE OR ANY OTHER WARRANTY EXPRESSED OR IMPLIED THAT MAY ARISE BY OPERATION OF LAW OR UNDER THE UNIFORM COMMERCIAL CODE OF FLORIDA. Dated: , 1999 SELLER: JOHNSTOWN/CONSOLIDATED INCOME PARTNERS, a California limited partnership By: ConCap Equities, Inc., a Delaware corporation its managing general partner By: Patrick J. Foye, vice president Accepted and Agreed: PURCHASER: EVEREST STORAGE HOLDINGS, LLC, a California limited liability company By: Name: Its: EXHIBIT A TO GENERAL ASSIGNMENT LEGAL DESCRIPTION Parcel "A" of the WETZLER PLAT, according to the Plat thereof, recorded in Plat Book 132, at page 42, of the Public Records of BROWARD County, Florida. Land Description: Access Easement a Portion of Parcel "A", WETZLER PLAT, according to the Plat thereof, as recorded in Plat Book 132, Page 42 of the Public Records of BROWARD County, Florida, more particularly described as follows: Beginning at the Southwest corner of said Parcel "A"; thence North 01 degrees 54'02" West, along the West line of said Parcel "A", 60.00 feet; thence, North 87 degrees 28'57" East, 76.00 feet; thence, South 01 degrees 54'02" East, 60.00 feet; thence, South 87 degrees 28'57" West, along the South line of said Parcel "A", 76.00 feet to the Point of Beginning. EXHIBIT B TO GENERAL ASSIGNMENT PROPERTY CONTRACTS None. EXHIBIT C TO GENERAL ASSIGNMENT COMMERCIAL LEASES EXHIBIT 7.2.1.6 SELLER'S CERTIFICATION OF NON-FOREIGN STATUS To inform Everest Storage Holdings, LLC, a California limited liability company ("TRANSFEREE"), that withholding of tax under Section 1445 of the Internal Revenue Code of 1986, as amended (the "CODE"), will not be required upon the transfer of certain rights relating to real property, located in the Broward County, State of Florida, to Transferee, by Johnstown/Consolidated Income Partners, a California limited partnership ("TRANSFEROR"), Transferor hereby certifies to Transferee: 1. Transferor is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Code and the Income Tax Regulations promulgated thereunder); 2. Transferor's U.S. tax identification number is ; and 3. Transferor's office address is Johnstown/Consolidated Income Partners, at c/o AIMCO, 1873 South Bellaire Street, Suite 1700, Denver, Colorado 80222. Transferor understands that this Certification may be disclosed to the Internal Revenue Service by Transferee and that any false statement contained herein could be punished by fine, imprisonment, or both. Transferor understands that Transferee is relying on this Certification in determining whether withholding is required upon said transfer. Under penalty of perjury the undersigned declares that he has examined this Certification and to the best of his knowledge and belief it is true, correct and complete, and he further declares that he has authority to sign this Certification on behalf of Transferor. JOHNSTOWN/CONSOLIDATED INCOME PARTNERS, a California limited partnership By: ConCap Equities, Inc., a Delaware corporation its managing general partner By: Patrick J. Foye, vice president EX-10.37 4 FIRST AMENDMENT TO PURCHASE AND SALE CONTRACT (RE: DAVIE SELF STORAGE) THIS FIRST AMENDMENT TO PURCHASE AND SALE CONTRACT ("Amendment") is entered into as of September 7, 1999, by and between JOHNSTOWN/CONSOLIDATED INCOME PARTNERS, a California limited partnership ("Seller") and EVEREST STORAGE HOLDINGS, LLC, a California limited liability company ("Purchaser"). RECITALS: A. Purchaser and Seller entered into that certain Purchase and Sale Contract ("Purchase Contract") dated as of July 2, 1999. B. Purchaser and Seller desire to amend the Purchase Contract as stated herein. AGREEMENTS: NOW, THEREFORE, in consideration of the foregoing recitals, and for other good and valuable consideration, the receipt, sufficiency and validity of which are hereby acknowledged, the parties hereby agree as follows: 1. Amendment. Purchaser and Seller hereby amend the Purchase Contract as stated herein. Terms not otherwise defined within this Amendment shall have the meanings ascribed to them in the Purchase Contract. All terms, covenants, conditions and provisions of the Purchase Contract are hereby reinstated, ratified, affirmed and remain in full force and effect, as modified by this Amendment. All references to the Purchase Contract shall, hereafter, include the provisions of this Amendment. 2. Feasibility Period. Purchaser and Seller hereby acknowledge that the Feasibility Period has expired as of the date of this Amendment and that Purchaser has no further right to terminate the Purchase Contract under Section 5.2 of the Purchase Contract. Within two (2) business days after receipt of Seller's facsimile signature on this Amendment, Purchaser shall deliver the sum of SEVENTY-FIVE THOUSAND DOLLARS ($75,000.00) in cash or other immediately available funds to Escrow Agent as required by Section 3.1.1 of the Agreement. 3. Closing. The first sentence of Section 7.1.1 of the Purchase Contract is hereby amended such that Closing shall take place on or before October 7, 1999. 4. Purchase Price. Section 3.1 of the Purchase Contract is hereby amended such that the Purchase Price is FOUR MILLION SEVEN HUNDRED FORTY-FOUR THOUSAND DOLLARS ($4,744,000.00). 5. Broker Fee. Section 10.1 of the Purchase Contract is hereby amended such that the commission or finder's fees paid to Broker shall be: (a) NINETY- FOUR THOUSAND EIGHT HUNDRED EIGHTY DOLLARS ($94,880.00) to Aztec; and (b) ONE HUNDRED THIRTY-NINE THOUSAND FIVE HUNDRED EIGHTY-SIX AND 42/100 DOLLARS ($139,586.42) to Purchaser (referred to as "Everest" in the Purchase Contract). By execution below, Broker agrees that this Agreement shall amend the separate agreements documenting such commissions or finder's fees. 6. Binding Effect. This Amendment shall become effective only upon full execution of this Amendment by Purchaser and Seller. This Amendment shall inure to the benefit of and shall be binding upon the parties hereto and their respective successors and assigns. 7. Counterparts. This Amendment may be executed in several counterparts, each of which counterparts shall be deemed an original instrument and all of which together shall constitute a single Amendment. IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to Purchase and Sale Contract as of the date and year first above written. PURCHASER: EVEREST STORAGE HOLDINGS, LLC, a California limited liability company By: Name: Its: SELLER: JOHNSTOWN/CONSOLIDATED INCOME PARTNERS, a California limited partnership By:CONCAP EQUITIES, INC., a Delaware corporation, its Managing General Partner By: Name: Its: AGREED AND ACCEPTED BY ESCROW AGENT: FIDELITY NATIONAL TITLE INSURANCE CO. By: Name: Its: AGREED AND ACCEPTED BY BROKER: AZTEC GROUP, INC. By: Name: Its: -----END PRIVACY-ENHANCED MESSAGE-----