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
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
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.
</LEGEND>
<CIK> 0000787621
<NAME> JOHNSTONW/CONSOLIDATED INCOME PARTNERS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 1,827
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 13,896
<DEPRECIATION> (7,065)
<TOTAL-ASSETS> 9,604
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 2,325
0
0
<COMMON> 0
<OTHER-SE> 6,957
<TOTAL-LIABILITY-AND-EQUITY> 9,604
<SALES> 0
<TOTAL-REVENUES> 1,925
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,528
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 139
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 397
<EPS-BASIC> 3.05<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
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</TABLE>
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
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:
