PURCHASE AGREEMENT
BY AND AMONG
THE BAY CLUB PARTNERS
AND
THE AIMCO LIMITED PARTNERSHIPS
DATED AS OF: APRIL 14, 1997
PURCHASE AGREEMENT
PURCHASE AGREEMENT dated as of the 14th day of April, 1997 by and among
the WILLIAMSBERRY DEVELOPMENT CORPORATION, a Florida corporation,
("Williamsberry") and XXXXXX WILLIAMSBERRY LIMITED PARTNERSHIP, a Delaware
limited partnership, ("CWLP"), Williamsberry and CWLP hereinafter
collectively referred to as "Bay Club I Partners"; WILLIAMSBERRY DEVELOPMENT
CORP. II, a Florida corporation, ("Williamsberry II") and XXXXXX
WILLIAMSBERRY L-2 C LIMITED PARTNERSHIP, a Florida limited partnership,
("CWLP 2 C"), Williamsberry II and CWLP 2 C hereinafter collectively referred
to as "Bay Club II Partners"; COLBRO DEVELOPMENT L-2 B CORP., a Florida
corporation, ("Colbro") and XXXXXX WILLIAMSBERRY L-2 B LIMITED PARTNERSHIP, a
Florida limited partnership, ("CWLP 2 B"), Colbro and CWLP 2 B hereinafter
collectively referred to as "Bay Club III Partners", (Bay Club I, II and III
Partners hereinafter collectively referred to as "Partners"), each having an
address at 0000 Xxxxxxxxx 000xx Xxxxxx, Xxxxx 000, Xxxxx XX, Xxxxxxxx,
Xxxxxxx 00000 and AIMCO BAY CLUB, L.P. a Delaware limited partnership ("AIMCO
Bay Club") and AIMCO HOLDINGS L.P., a Delaware limited partnership ("AIMCO
Holdings" and together with AIMCO Bay Club, hereinafter collectively referred
to as "Purchaser") having an office at 0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxx 00000.
WITNESSETH:
RECITALS
WHEREAS, Williamsberry and CWLP are the managing general partner and non-
managing general partner, respectively, of CB Associates, a Florida general
partnership ("CB Associates");
WHEREAS, CB Associates is the owner of a parcel of land ("Bay Club I Land")
in the County of Dade, State of Florida, more particularly described in EXHIBIT
A-1 annexed hereto and made a part hereof, together with the buildings,
structures and improvements erected thereon known as Tower 1 at Bay Club ("Bay
Club I Buildings"); (Bay Club I Land and Buildings hereinafter collectively
referred to as "Bay Club I");
WHEREAS, AIMCO Bay Cub desires to purchase a 99% interest in CB Associates
by purchasing all of Williamsberry's 33.33% general partnership interest in CB
Associates and all of CWLP's 66.67% general partnership interest in CB
Associates other than a 1% interest and AIMCO Holdings desires to purchase a 1%
interest in CB Associates by purchasing the remaining general partnership
interest of CWLP in CB Associates;
WHEREAS, Williamsberry II and CWLP 2 C are the managing general partner and
non-managing partner, respectively, of CB L-2 C ASSOCIATES, a Florida general
partnership ("CB 2 C Associates");
1
WHEREAS, CB 2 C Associates is the owner of a parcel of land ("Bay Club II
Land") in the County of Dade, State of Florida, more particularly described in
EXHIBIT A-2 annexed hereto and made a part hereof, together with the buildings,
structures and improvements erected known as Tower 2 at Bay Club ("Bay Club II
Buildings"); (Bay Club II Land and Buildings hereinafter collectively referred
to as "Bay Club II");
WHEREAS, AIMCO Bay Club desires to purchase a 99% interest in CB 2 C
Associates by purchasing all of Williamsberry II's 33.33% general partnership
interest in CB 2 C Associates and all of CWLP 2 C's 66.67% general partnership
interest in CB 2 C Associates other than a 1% interest and AIMCO Holdings
desires to purchase a 1% interest in CB 2 C Associates by purchasing the
remaining general partnership interest of CWLP 2 C in CB 2 C Associates;
WHEREAS, Colbro and CWLP 2 B are the managing general partner and the non-
managing general partner, respectively, of CB L 2 B Associates, a Florida
general partnership ("CB 2 B Associates");
WHEREAS, CB 2 B Associates is the owner of a parcel of undeveloped land
("Bay Club III Land") in the County of Dade, State of Florida, more particularly
described in EXHIBIT A-3 annexed hereto and made a part hereof, together with
the buildings, structures and improvements, if any, erected thereon ("Bay Club
III Buildings"); (Bay Club III Land and Buildings hereinafter collectively
referred to as "Bay Club III"); and
WHEREAS, AIMCO Bay Club desires to purchase a 99% interest in CB 2 B
Associates by purchasing all of Colbro's 1% general partnership interest in CB 2
B Associates and all of CWLP 2 B's 99% general partnership interest in CB 2 B
Associates other than a 1% interest and AIMCO Holdings desires to purchase a 1%
interest in CB 2 C Associates by purchasing the remaining general partnership
interest of CWLP 2 B in CB 2 B Associates.
NOW, THEREFORE, in consideration of the mutual agreements contained herein,
the parties, intending to be legally bound hereby, agree as follows:
ARTICLE I
DEFINITIONS
"Accounting Firm" has the meaning assigned in Section 11.2(b).
"Accounts Receivable" means the assets listed on Schedule 2.3.
"Additional Assets" has the meaning assigned in Section 4.1(c).
"Adjustment Items" has the meaning assigned in Section 4.1(b).
"Assets" has the meaning assigned in Section 3.1.
2
"Bay Club" means Bay Club I, Bay Club II and Bay Club III collectively.
"Bay Club I" has the meaning assigned in the Second Recital.
"Bay Club II" has the meaning assigned in the Fifth Recital.
"Bay Club III" has the meaning assigned in the Eighth Recital.
"Bay Club I Partners" means Williamsberry Development Corporation and
Xxxxxx Williamsberry Limited Partnership collectively.
"Bay Club II Partners" means Williamsberry Development Corp. II and Galley
Williamsberry L-2 C Limited Partnership collectively.
"Bay Club III Partners" means Colbro Development L-2 B Corp. and Xxxxxx
Williamsberry L-2 B Limited Partnership collectively.
"Bay Club Partnerships" means CB Associates, CB 2 C Associates and CB 2 B
Associates collectively.
"Broker" has the meaning assigned in Section 10.1
"Closing" has the meaning assigned in Section 2.4.
"Closing Date" has the meaning assigned in Section 2.4.
"Contracts" has the meaning assigned in Section 3.1(f).
"Excluded Assets" has the meaning assigned in Section 2.3.
"GECC Mortgage" has the meaning assigned in Section 3.2(i).
"Improvement Credit" has the meaning assigned in Section 4.1(d).
"Managing General Partner" shall mean Williamsberry, Williamsberry II and
Colbro of CB Associates, CB 2 C Associates and CB 2 B Associates, respectively.
"Notice Party" shall have the meaning assigned in Section 11.2(b).
"Partners" means the Bay Club I, Bay Club II and Bay Club III Partners.
"Partnership Interests" has the meaning assigned in Section 2.1.
"Permitted Encumbrances" has the meaning assigned in Section 3.2.
"Property Questionnaire" has the meaning assigned in Section 5.15.
"Purchaser" has the meaning assigned in the Preamble.
"Tax Losses" has the meaning assigned in Section 11.1(a).
3
"Tax Return" has the meaning assigned in Section 11.1(f)(ii).
"Taxes" has the meaning assigned in Section 11.1(f)(i).
"Tenant Leases" has the meaning assigned in Section 3.1(c).
"Title Policy" has the meaning assigned in Section 3.2(iv).
ARTICLE II
PURCHASE AND SALE OF PARTNERSHIP INTERESTS
2.1 Purchase and Sale. Upon the terms and subject to the conditions set
forth in this Agreement, at the "Closing" (as such term is defined in Section
2.4 hereof), the Partners will sell, assign and transfer to Purchaser (in
accordance with the recitals hereto), and Purchaser will purchase, acquire and
accept from such Partners their respective partnership interests (collectively
the "Partnership Interests") in the Bay Club Partnerships.
2.2 Purchase Price. (a) The purchase price for the Partnership Interests
shall be the sum of SEVENTY MILLION SEVEN HUNDRED SEVENTY-FIVE THOUSAND AND
00/100 ($70,775,000.00) DOLLARS, subject to adjustment as provided in Article IV
hereof, (the "Purchase Price"), payable as follows: (i) TWO MILLION AND 00/100
($2,000,000.00) DOLLARS by Federal funds wire transfer, payable as directed by
the Partners upon execution of this Agreement (the "Deposit"); and (ii) the
balance of the Purchase Price at Closing by Federal funds wire transfer in the
amounts and to the bank accounts as directed in writing by the Partners.
(b) To secure the repayment of the Deposit to Purchaser pursuant to
the terms of this Agreement, Partners shall execute and deliver to Purchaser a
pledge of the Partnership Interests and UCC-1 financing statements
(collectively, the "Pledge").
2.3 Excluded Assets. Purchaser and the Partners agree that the Bay Club
Partnerships shall not retain (and shall distribute, convey, transfer and assign
to the respective Partners) any and all respective interests in the Excluded
Assets; it being agreed that the Purchaser is not acquiring any direct or
indirect interest in any of the Excluded Assets. For the purposes of this
Agreement, "Excluded Assets", shall mean the assets (other than the Assets) of
the Bay Club Partnerships (and any interest therein), including, but not limited
to, (a) cash on hand (b) refunds on previously filed Tax Returns {as such term
is defined in Section 11.1(f)} and (c) Bay Club Partnership accounts receivable,
as such accounts receivable are set forth in Schedule 2.3 annexed hereto and
made a part hereof.
2.4 Closing. The closing of the transfer of the Partnership Interests (the
"Closing") shall take place on or before April 30, 1997 (the "Closing Date") at
10:00 A.M. at the offices of Seller's attorney's or at such location as may be
reasonably agreeable to the parties hereto.
4
ARTICLE III
ASSETS/PERMITTED ENCUMBRANCES
3.1 The Assets. At Closing, the Bay Club Partnerships will hold
respectively the following (collectively, the "Assets"):
(a) Bay Club;
(b) all fixtures, equipment, machinery, furniture, furnishings,
furnishings, art works, appliances, and other tangible personal property owned
by the Bay Club Partnerships and attached or appurtenant to or used in
connection with the Bay Club;
(c) the landlord's interest under those certain tenant leases set
forth on Schedule 3.1(c) annexed hereto and made a part hereof, as supplemented,
modified and amended (collectively "Tenant Leases"), together with any and all
security deposits, and interest accrued thereon, deposited or held pursuant to
such Tenant Leases (collectively, the "Security Deposits");
(d) all trademarks, trademark licenses and trademark registrations
and applications therefor; trade names; and service marks, used or held for use
in connection with the Bay Club;
(e) all promotional literature, catalogs, booklets, manuals and
advertising materials, media advertising or promotional agreements, marketing
plans or and other materials and customer and supplier lists used, held for use
in connection with the Bay Club;
(f) all contracts set forth on Schedule 3.1(f) annexed hereto and
made a part hereof (the "Contracts");
(g) all right, title and interest in any award or payment to be
hereafter made for (x) any taking in condemnation or eminent domain of or (y)
any damage or destruction to all or any part of the Bay Club; and
(h) all the tenements, hereditament and appurtenances belonging to,
or in anywise appertaining to each and all of the aforesaid.
3.2 Permitted Encumbrances. At Closing the Assets held by the Bay Club
Partnerships shall be held free and clear of all liens, encumbrances, covenants,
agreements, reservations and other title matters except for, the following
(collectively, the "Permitted Encumbrances"):
(i) That certain consolidated, Amended and Restated Mortgage,
Security Agreement and Fixture Filing, in the original principal amount of
$49,000,000.00, recorded on November 27, 1996 in Official Records Book 17441 at
Page 2690
5
of the Public Records of Dade County, Florida; together with an Assignment of
Rents and Leases dated November 26, 1996 and recorded on November 27, 1996 in
Official Records Book 17441, at Page 2723 and a UCC-1 Financing Statement
recorded on November 27, 1996 in Official Records Book 17441, at Page 2739
(collectively the "GECC Mortgage");
(ii) The terms and conditions contained in the Tenant Leases;
(iii) General real estate and ad valorem taxes imposed on the Bay
Club, for the fiscal tax year in which the Closing shall occur and subsequent
fiscal tax years not yet due and payable;
(iv) Those certain reservations, restrictions, covenants,
easements and agreements of record affecting the Bay Club as set forth in
Schedule B of that certain Chicago Title Insurance Company Policy No. 10-2691-
02-00000001, (the "Title Policy") dated November 27, 1996 issued to General
Electric Capital Corporation ("GECC");
(v) Such state of facts as shown on that certain survey
described on Schedule 3.2(v) annexed hereto and made a part hereof, and any
other state of facts which a current accurate survey of the Bay Club would show,
provided that such other state of facts would not materially adversely affect
the use of the Bay Club as presently used;
(vi) Any and all present and future zoning restrictions,
requirements, laws, ordinances, resolutions and orders of any city, town or
village in which the Bay Club lies and of all boards, bureaus, commissions,
departments and bodies of any Municipal, County, State or Federal sovereign or
other governmental authority now or hereafter having or acquiring jurisdiction
over any of the Bay Club or the use and improvement thereof;
(vii) Rights in favor of any city, town or village in which the
Bay Club lies to construct sidewalks on the Bay Club; which sidewalks are about
to be so constructed;
(viii) Any state of facts a physical inspection of the Bay Club
would reveal;
(ix) Rights of utility companies;
(x) Any unpaid installments or installments of any assessment or
assessments of any governmental authority having jurisdiction affecting the Bay
Club which are or may become due and payable after the Closing; and
(xi) Water rates and sewer rents.
6
ARTICLE IV
ADJUSTMENTS TO THE PURCHASE PRICE
4.1 Adjustment to the Purchase Price. (a) The Purchase Price shall be
increased by (i) the amount of any Adjustment Items paid by the Bay Club
Partnerships prior to the Closing Date on account of periods from and after the
Closing Date, (ii) rent, additional rent and other charges payable by the
tenants under the Tenant Leases on account of periods prior to the Closing Date
which have not been received prior to the Closing Date by the Bay Club
Partnerships (provided, however, that this portion of the adjustments to the
Purchase Price shall not be payable by the Purchaser unless and until such
amounts are received by the Bay Club Partnerships, subject to Section 4.2
hereof), and (iii) the amount of any Additional Assets retained by the Bay Club
Partnerships at Closing. The Purchase Price shall be decreased by (v) the amount
of any Adjustment Item and any rent, additional rent and other charges payable
by tenants under the Tenant Lease payable to the Bay Club Partnerships and
received by the Partners prior to the Closing Date on account of the period from
and after the Closing Date, (w) the amount of any Adjustment Items payable by
the Bay Club Partnerships on or after the Closing Date on account of periods
prior to the Closing Date, (x) the unpaid principal balance of the note secured
by the GECC Mortgage, (y) the "Improvement Credit", and (z) the balance of the
Security Deposits.
(b) The term "Adjustment Items" shall mean and include the following:
(i) General real estate and ad valorem taxes imposed on the Bay
Club for the fiscal tax year in which the Closing shall occur. If the Closing
shall occur before the tax rate or assessment is fixed, the apportionment of
such real estate or ad valorem taxes shall be upon the basis of the tax rate for
the next preceding year applied to the latest assessed evaluation;
(ii) Utility (including, without limitation, electricity, gas,
steam and telephone), water and sewer charges, if any, relating to the Bay Club.
If there are any meters on the Bay Club measuring any of the foregoing, the
Partners shall furnish to Purchaser a reading of each such meter made by the
party to which such meter charges are payable to a date not more than twenty
(20) days prior to the Closing Date; and the unfixed charges based thereon for
the intervening time between such reading and Closing shall be apportioned on
the basis of such reading, but such charges for such intervening period shall be
readjusted upon the taking of a subsequent actual reading;
(iii) Amounts paid or payable under the Contracts;
(iv) Employees' wages, sick pay, vacation pay, bonuses, social
security taxes and other payroll taxes, xxxxxxx'x compensation insurance, and/or
welfare plans, and other fringe benefits, if any, with respect to any employees
at the Bay Club;
(v) Any gross receipts or other such taxes, if any, payable on
account of any rents under the Tenant Leases;
(vi) Fees for city, county and/or state licenses and permits, if
any;
7
(vii) Premiums with respect to any insurance policies which are,
at the option of the Purchaser, retained by the Bay Club Partnerships and not
canceled at or prior to Closing;
(viii) Accrued and unpaid interest on the note secured by the GECC
Mortgage;
(ix) Amounts paid or payable by customers of the parking
facilities at the Bay Club; and
(x) All other items usually and customarily apportioned in a
transaction where real property is sold and conveyed and are not otherwise
specifically provided for in this Agreement.
(c) The term "Additional Assets" shall include (i) accounts
receivable by the Bay Club Partnerships other than rent, additional rent and
other charges payable under Tenant Leases, but only to the extent such
receivables relate to the period prior to Closing, (ii) all utility (including,
without limitation, gas, electric, water, and telephone) deposits, and (iii) all
escrow and/or impound balances and funds held and to be disbursed by GECC under
the GECC Mortgage on behalf of the Bay Club Partnerships.
(d) The Purchaser shall receive the amount of $84,000.00
("Improvement Credit") from the Partners to perform certain improvements to the
Bay Club which the Purchaser deems desirable to be performed to the Bay Club I
and II Buildings.
4.2 Unpaid Rents. The Purchaser shall pay the Partners on account of the
Purchase Price promptly upon receipt, rent, additional rent or other charges
paid after the Closing Date by the tenants under the Tenant Leases on account of
periods prior to the Closing Date. Purchaser agrees that during the "Post
Closing Period" (as hereinafter defined), the first monies received from such
tenants shall be received by Purchaser as trustee for the Partners on account of
or in payment for past due rent, additional rent and other charges for the
calendar month immediately preceding the calendar month of Closing and the next
monies for Partner's portion of the month of Closing. Monies received thereafter
during the Post Closing Period from tenants in arrears shall then be applied to
current rents, and any rents received by Purchaser from such tenants with
arrearage for periods before the month prior to the month of Closing after such
tenant's rents are current for the period of Purchaser's ownership, shall be
remitted to Partners for periods to which Partners are entitled. For the month
of the Closing and for each of the first six (6) calendar months following the
month of Closing (the "Post Closing Period"), the Purchaser shall provide the
Partners with written monthly reports detailing the amounts of such rent,
additional rent and other charges collected in the preceding month. The
Purchaser agrees to remit to the Partners the amount of such unpaid rentals so
collected to which the Partners are entitled out of such moneys received by the
Purchaser, without claim of set-off, abatement or deduction, other than a
deduction for Purchaser's reasonable out-of-pocket third party costs of
collection. Following the Closing, during the Post Closing Period, the Purchaser
shall use commercially reasonable efforts to collect delinquent amounts due
under Tenant Leases for the pre-Closing period, but shall have no obligation to
bring any legal action to collect such amounts and the Partners shall have no
right to proceed in any manner or make any claim against the tenants of the Bay
Club for rents that were delinquent as of the Closing Date, unless such tenant
no longer occupies any portion of the Bay Club. Purchaser shall have no
obligation to pay any amounts to the Partners with respect to pre-
8
closing rents collected after the Post Closing Period. Partners shall pay to
Purchaser the amount of any Adjustment Items and rent, additional rent and other
charges payable under the Tenant Leases received by Partners after Closing on
account of the period from and after the Closing Date.
4.3 Survival. Any errors or omissions in computing adjustments at Closing
shall be corrected by the parties. The provisions of this Article IV shall
survive the Closing for a period of one (1) year.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each Partner represents and warrants to Purchaser (to the extent and
insofar as the following apply to the Bay Clubs, the Partnerships and the
Partnership Interests in which such Partner has an interest) that as of the
Closing the following will be true and correct in all material respects.
5.1 Title to Partnership Interests. Annexed hereto as Schedule 5.1 and
made a part hereof is a complete and correct list of the ownership interests in
the Bay Club Partnerships. Each of the Partners holds the percentage interest
set forth opposite such Partners' name free and clear of all security interests,
liens, adverse claims, pledges, options, rights of first refusal, agreements,
limitations on voting rights, charges and other encumbrances of any nature
whatsoever. There are no options, warrants, agreements, conversion or exchange
rights, preemptive rights or other rights to subscribe for, purchase or
otherwise acquire ownership interests in any of the Bay Club Partnerships, or
restrictions on the voting or transfer of such interest. All interests in all of
the Bay Club Partnerships have been issued in compliance with all applicable
laws, including Federal and state securities laws.
5.2 Organization of The Bay Club Partnerships.
(a) CB Associates is a duly organized, validly existing Florida
general partnership. Williamsberry Development Corporation is a duly organized
Florida corporation, existing and in good standing under the laws of the State
of Florida. Xxxxxx Williamsberry Limited Partnership is a Delaware limited
partnership duly organized, existing and in good standing under the laws of the
State of Delaware, qualified and in good standing as a foreign limited
partnership under the laws of the State of Florida. The sole general partner of
CWLP is Xxxxxx Aventura, Inc., a Delaware corporation, duly organized, existing,
and in good standing under the laws of the State of Delaware and qualified and
in good standing as a foreign corporation under the laws of the State of
Florida. CB Associates has all requisite power and authority to own, operate and
lease Bay Club I. A true and complete copy of the partnership agreement of CB
Associates is annexed hereto as Schedule 5.2(a) and made a part hereof.
(b) CB L-2 C Associates is a duly organized and validly existing
Florida general partnership. Williamsberry Development Corp. II is a duly
organized Florida corporation existing and in good standing under the laws of
the State of Florida. Xxxxxx Williamsberry L-2 C Limited Partnership is a
Florida limited partnership duly organized and in good standing under the laws
of the State of Florida. The sole general partner of CWLP 2 C is
9
Xxxxxx Aventura L-2 C, Inc., a Florida corporation duly organized, existing and
in good standing under the laws of the State of Florida. CB L-2 C Associates has
all requisite power and authority to own, operate and lease Bay Club II. A true
and complete copy of the partnership agreement of CB L-2 C Associates is annexed
hereto as Schedule 5.2(b) and made a part hereof.
(c) CB L-2 B Associates is a duly organized, validly existing Florida
general partnership. Colbro Development L-2 B Corp. is a duly organized Florida
corporation in good standing under the laws of the State of Florida. Xxxxxx
Williamsberry L-2 B Limited Partnership is a Florida limited partnership duly
organized and in good standing under the laws of the State of Florida. The sole
general partner of CWLP 2 B is Xxxxxx Aventura L-2 B, Inc., a Florida
corporation, duly organized, existing and in good standing under the laws of the
State of Florida. CB L-2 B Associates has all requisite power and authority to
own, operate and lease Bay Club III. A true and complete copy of the partnership
agreement of CB L-2 B Associates is annexed hereto as Schedule 5.2(c) and made a
part hereof.
5.3 Execution and Binding Effect. Each of the Partners has full right,
power and authority to transfer their respective ownership interests in the Bay
Club Partnerships in accordance with the terms and conditions of this Agreement.
The Partners have the legal power, right and authority to execute this Agreement
and the other documents and instruments to be executed in accordance with the
terms hereof. This Agreement and the other documents and instruments to be
executed and delivered in connection herewith have been duly authorized by all
necessary actions by the Partners and do not require the approval of the
shareholders of the Partners that are corporations nor the limited partners of
the Partners that are limited partnerships and have been duly and validly
executed and delivered by each Partner and upon the execution and delivery by
the Purchasers will constitute legal, valid and binding agreements of the
Partners enforceable against them in accordance with their respective terms,
except as enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting enforcement of creditors' rights generally.
5.4 Consents and Approvals; No Violation. Except for the consent of GECC
to the transfer of the Partnership Interests, no permit, authorization, consent
or approval of any governmental or regulatory authority is required of any
Partner, as a condition to the lawful consummation of the transactions
contemplated by this Agreement. Neither the execution, delivery and performance
of this Agreement, the other documents and instruments to be executed and
delivered pursuant hereto by the Partners, nor the sale by the Partners of their
Partnership interests pursuant to this Agreement will (i) violate any provisions
of the articles of incorporation or bylaws of any corporate Partner or the
agreements of limited partnership or certificates of limited partnership of any
Partner that is a limited partnership, (ii) violate, conflict with or result in
the breach or termination of, or otherwise give any other contracting party the
right to terminate or constitute a default under, any of the terms, of any bond,
mortgage (other than the GECC Mortgage), indenture or material agreement to
which any Partner is a party or by which any Partner or any of its property or
assets may be bound or materially affected, (iii) violate any judgment, order,
injunction, decree or award of any court, administrative agency or governmental
body against, or binding upon, any Partner or upon the securities, property or
business of any Partner, (iv) constitute a violation by any Partner of any
applicable law or regulation of any jurisdiction as such law or regulation
relates to any Partner or to the property or business of any Partner, or (v)
cause the dissolution of any Partner or the Bay Club Partnerships.
10
5.5 Financial Statements. Each of the respective Bay Club Partners
represents and warrants as to its Bay Club Partnership that the audited balance
sheets (together with any notes thereon) of the Bay Club I and II Partnerships
as of December 31, 1995, together with the related statements of operations,
retained earnings and cash flows for the period then ended, together in each
case with the unqualified (other than a going concern qualification) report
thereon of their respective independent public accountants; and the unaudited
balance sheets (together with any notes thereon) of the Bay Club I and II
Partnerships as of December 31, 1996, together with the related statements of
operations, retained earnings and cash flows for the period then ended, both of
which are annexed hereto as Schedule 5.5A and made a part hereof (the "Financial
Statements"), (a) are true, complete and correct in all material respects, (b)
are in accordance with the books and records of the respective Partnership, and
(c) present fairly the financial position of such Partnership as of the dates
indicated and the results of its operations for the periods then ended in
conformity with GAAP. CB 2 B Associates, for which there are no financial
statements, has no liabilities other than for certain Adjustment Items and the
GECC Mortgage. Annexed hereto as Schedule 5.5B is an analysis of amounts due to
and due from the Bay Club Partnerships and their affiliates as of December 31,
1996.
5.6 Tax Matters.
(a) The Bay Club Partnerships have timely filed (or have had timely
filed on their behalf) or will timely file or will cause to be timely filed, all
Tax Returns (as defined in Section 11.1(f) hereof) required by applicable law to
be filed by any of them prior to or as of the Closing Date. All such Tax Returns
and amendments thereto are or will be true, complete and correct in all material
respects.
(b) The Bay Club Partnerships have paid (or have caused to be paid on
their behalf), or where payment is not yet due, have established (or have had
established on their behalf and for their sole benefit and recourse), or will
establish or cause to be established on or before the Closing Date, an adequate
accrual for the payment of all Taxes (as defined in Section 11.1(f) hereof) due
with respect to any period or portion thereof ending prior to or as of the
Closing Date.
(c) No audit by a tax authority is pending with respect to any Tax
Returns filed by, or Taxes due from, the Bay Club Partnerships. No issue has
been raised by any Tax Authority in any audit of the Bay Club Partnerships that
if raised with respect to any other period not so audited could be expected to
result in a material proposed deficiency for any period not so audited. No
deficiency or adjustment for any Taxes has been proposed, asserted or assessed
against the Bay Club Partnerships. There are no liens for Taxes upon the Assets
of the Bay Club Partnerships, except liens for current Taxes not due yet.
(d) None of the Bay Club Partnerships has given or been requested to
give any waiver of statutes of limitations relating to the payment of Taxes or
have executed powers of attorney with respect to Tax matters, which will be
outstanding as of the Closing Date.
(e) None of the Bay Club Partnerships is a party to, is bound by, or
has any obligation to Partners for Taxes under any tax sharing, cost sharing, or
similar agreement or policy.
11
(f) There are no changes in the tax accounting methods subject in
Section 481(a) of the Internal Revenue Code of 1986, as amended, which have an
ongoing effect on the Bay Club Partnerships.
(g) Each of the Bay Club Partnerships is, and has been since its
formation, classified as a partnership and not as an association taxable as a
corporation for Federal income tax purposes for any and all periods up to and
including the Closing; and the Internal Revenue Service has not challenged the
status of any of the Bay Club Partnerships for Federal income tax purposes. All
Tax Returns and other filings have been filed on a basis consistent with such
position for Federal income tax purposes.
5.7 Employee Relations. (a) Annexed hereto and made a part hereof as
Schedule 5. 7(a) is a true and complete payroll roster of all employees of CB
Associates as of the last payroll prior to the date of this Agreement showing
the (i) name of each employee, and (ii) rate of pay for each such person
entitled to receive compensation. No increases in such salaries, bonuses,
vacation allowances, severance benefits, commissions or other employee benefits
have been given or promised as of the date hereof except as disclosed in
Schedule 5.7(a) or in any other Schedule annexed hereto. CB Associates employs
all the employees working at the Bay Club.
(b) Employee Contractual Matters. Except as set forth on Schedule
5.7(a) or 5.7(g), there are no employment contracts, bonus plans or agreements,
commission agreements, severance agreements, or any other contracts or
agreements with any of the employees of CB Associates. CB Associates is not a
party to or bound by any collective bargaining agreement or work rules or
practices agreed to with any labor organization or employee association
applicable to the employees of CB Associates.
(c) Severance Pay. CB Associates has not promulgated any policy or
entered into any agreements relating to the payment of severance pay to its
employees whose employment is terminated or suspended, voluntarily or otherwise,
except as set forth in Schedule 5.7(g).
(d) Vacation Pay. CB Associates has not promulgated any policy or
entered into any agreements relating to the payment of vacation pay to its
employees and does not have any obligation to provide them with pay for vacation
time, except as stated in Schedule 5.7(a) annexed hereto and made a part hereof.
(e) Employment and Working Conditions. CB Associates is not engaged
or involved, as the case may be, in any of the following: (i) there is no labor
strike, dispute, slowdown, work stoppage or lockout actually pending or, to the
Partners' knowledge, threatened against or affecting CB Associates and, during
the past five years, there has not been any such action; (ii) to the Partners'
knowledge, no union claims to represent the employees of CB Associates; (iii)
none of the employees of CB Associates are represented by any labor organization
and, to the Partners' knowledge, there are no current union organizing
activities among the employees of CB Associates, nor does any question
concerning representation exist concerning such employees; (iv) there are no
written personnel policies, rules or procedures applicable to the employees of
CB Associates; (v) CB Associates is, and has at all times been, in material
compliance with all applicable laws respecting employment and employment
practices, terms and conditions of employment, wages, hours of work and
occupational safety and health, and immigration, and is not engaged in any
unfair labor
12
practices as defined in the National Labor Relations Act or other applicable
law, or ordinance or regulation; (vi) there is no unfair labor practice, charge
or complaint against CB Associates pending or, to the Partners' knowledge,
threatened before the National Labor Relations Board or any similar state
agency; (vii) to the Partners' knowledge, there is no grievance or arbitration
proceeding arising out of any collective bargaining agreement or other grievance
procedure relating to the employees of CB Associates; (viii) to Partners'
knowledge, no charges or complaints with respect to or relating to CB Associates
are pending before the Equal Employment Opportunity Commission or any
corresponding state agency; (ix) to the Partners' knowledge, no federal, state,
or local agency responsible for the enforcement of labor, employment, or
immigration laws intends to conduct an investigation with respect to or relating
to CB Associates and no such investigation is in progress; (x) to the Partners'
knowledge, there are no pending or, threatened wage and hour claims filed
against CB Associates with the United States Department of Labor or any
corresponding state agency; (xi) to the Partners' knowledge, neither the
Occupational Safety and Health Administration nor any corresponding state agency
has threatened to file any citation, and there are no pending citations relating
to CB Associates; and (xii) to the Partner's knowledge, there are no complaints,
controversies, lawsuits or other proceedings pending against CB Associates
brought on behalf of any applicant for employment, or current or former
employees, or classes of the foregoing, alleging breach of any express or
implied contract of employment, any violation of law or regulation governing
employment or the termination thereof, or any other discriminatory, wrongful or
tortious conduct in connection with the employment relationship.
(f) WARN Act. Since the enactment of the Worker Adjustment and
Retraining Notification Act of 1988 ("WARN Act"), the Bay Club Partnerships have
not ever employed (i) 100 or more employees, excluding part-time employees (as
defined in the WARN Act), or (ii) 100 or more employees who in the aggregate
work at least 4,000 hours per week (exclusive of hours of overtime).
(g) Employee Benefits. Except as set forth in Schedules 5.7(a) or
5.7(g), there are no "Plans" (as hereinafter defined) with respect to any
employees at the Bay Club. "Plans" shall mean any bonus, deferred compensation,
incentive compensation, stock purchase, stock option, employment, consulting,
hospitalization or other medical, life or other insurance, supplemental
unemployment benefits, profit-sharing, pension or retirement plan, program,
agreement or arrangement, and each other "employee benefit plan" [within the
meaning of Section 3(2) of the Employee Retirement Income Security Act of 1974,
as amended, and the rules and regulations promulgated thereunder ("ERISA")],
whether formal or informal, written or oral and whether legally binding or not,
that is maintained or contributed to or was maintained or contributed to at any
time by CB Associates or by any trade or business, whether or not incorporated
which together with CB Associates would be deemed a "single employer" within the
meaning of Section 4001 of ERISA (an "ERISA Affiliate"), within the last six
years, for the benefit of any employee or former employee of CB Associates.
5.8 No Employees. Neither CB 2 C Associates or CB 2 B Associates employs
any employees; to the extent CB Associates employees provide services to Bay
Club II or Bay Club III, the Bay Club II and III Partnerships reimburse CB
Associates for the costs of such services provided.
5.9 Tenant Leases. Schedule 3. 1(c) is a materially complete and accurate
schedule, as of the date thereon, of all of the leases, licenses, tenancies and
other occupancy agreements (whether written or oral) in effect at the Bay Club
as of such date, other than rights
13
relating to the use of the parking facilities. At Closing, Partners shall
deliver an updated Schedule 3.1(c) dated not earlier than ten (10) days prior to
Closing. There have been no material changes to Schedule 3.1(c) between the date
such schedule was prepared and the Closing Date. Schedule 3.1(c) sets forth with
respect to each such lease, in a materially complete and accurate manner, (i)
the date of such lease, (ii) the name of the tenant, (iii) the designation of
the leased premises, (iv) the monthly rental and other charges payable by the
tenant, (v) the amount of any security deposits held under the lease and
interest thereon, if any, and (vi) the lease expiration date. Except as set
forth on Schedule 3.1(c) there are no other leases, letting or tenancies
affecting any part of the Bay Club (other than relating to the parking
facilities); and, except as otherwise noted in the schedule of delinquencies
annexed to Schedule 3.1(c), the tenant under each Tenant Lease has, to the best
of Partners knowledge, paid and is not in default in the payment of rent. No
tenant under a Tenant Lease has prepaid rent for more than the current month, or
is entitled to receive a rent concession in connection with its tenancy unless
noted otherwise in Schedule 3.1(c). At Closing, all unpaid commissions, if any,
due on account of any Tenant Lease will have been paid by Partners.
5.10 Contracts. The Contracts set forth in Schedule 3.1(f) is an accurate
description of all of the service, maintenance, repair, management supply and
other contracts affecting the Bay Club as of the date of this Agreement.
Schedule 3.1(f) sets forth with respect to each Contract (i) the date of such
Contract, (ii) the name of the vendor, (iii) the nature and type of the services
or goods provided; (iv) the costs or charges payable thereunder, and (v) the
expiration date. Except as set forth on Schedule 3.1(f), there are no other
material contracts affecting the Bay Club not cancelable on thirty (30) days'
notice.
5.11 Tax Reduction Proceeding. No proceedings have been commenced which are
pending for the reduction of the assessed valuation of the Bay Club or any
portion thereof.
5.12 Litigation. Except as set forth in Schedule 5.12 annexed hereto and
made a part hereof, the Bay Club Partnerships are not a party to any litigation,
action or proceeding, and to the best of Partners' knowledge no such litigation,
action, or proceeding is threatened by any organization, person, individual or
governmental agency against the Bay Club Partnerships or which would affect the
use or occupancy of the Bay Club or any part thereof.
5.13 FIRPTA. None of the Partners is a "foreign person" as defined in
section 1445 of the Internal Revenue Code of 1986, as amended, and the
regulations issued thereunder.
5.14 Conduct of Business Since the Balance Sheet Date. Since December 31,
1996 there have been no material adverse changes in the financial condition,
assets, or liabilities, of the Bay Club Partnerships, as reflected in the
Financial Statements.
5.15 Property Questionnaires. Prior to the Closing, the Partners shall
complete and deliver to Purchaser questionnaires with respect to Bay Club I and
II, in the form provided by Purchaser (each a "Property Questionnaire") and each
such Property Questionnaire is true, complete and correct in all material
respects.
14
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to the Partners as follows:
6.1 Organization, Power and Authority. Each Purchaser is a limited
partnership duly organized, validly existing and in good standing under the laws
of the State of Delaware. AIMCO HOLDING QRS, Inc. ("AIMCO Inc.") is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Purchaser and AIMCO Inc. have the corporate power and
authority to execute and deliver this Agreement, and any other agreement or
instrument contemplated by this Agreement, and to consummate the transactions
and to perform its obligations contemplated hereby and thereby.
6.2 Execution and Binding Effect. The execution and delivery by Purchaser
of this Agreement, and any other agreement or instrument contemplated by this
Agreement, and the consummation of the transactions contemplated hereby and
thereby, have been duly authorized by all necessary action by Purchaser and do
not require the approval of its limited partners. This Agreement, and any such
other agreement or instrument, upon execution and delivery by Purchaser (and
assuming due execution and delivery hereof and thereof by the other parties
hereto and thereto), will constitute the legal, valid and binding obligation of
Purchaser, in each case enforceable against Purchaser in accordance with its
terms (except as such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws from time to time in
effect which affect creditors' rights generally). Neither the execution and
delivery of this Agreement, or any such other agreement or instrument by
Purchaser, nor the consummation of the transaction contemplated hereby or
thereby, will (i) violate any provisions of the agreements of limited
partnership or certificates of limited partnership agreement of Purchaser, (ii)
violate, conflict with or result in the breach or termination of, or otherwise
give any other contracting party the right to terminate, or constitute a default
under the terms of, any mortgage, bond, indenture or material agreement to which
Purchaser is a party or by which Purchaser or any of its property or assets may
be bound or materially affected, (iii) violate any judgment, order, injunction,
decree or award of any court, administrative agency or governmental body
against, or binding upon, Purchaser or upon the securities, property or business
of Purchaser, or (iv) constitute a violation by Purchaser of any applicable law
or regulation of any jurisdiction as such law or regulation relates to Purchaser
or to the property or business of Purchaser.
6.3 Organizational Documents. Attached hereto as Schedule 6.3 and made a
part hereof is a true and complete copy of the agreements of limited partnership
or certificates of limited partnership of Purchaser in effect on the date
hereof, certified by a duly authorized signatory of Purchaser in the case of the
agreement of limited partnership and by the Delaware Secretary of State in the
case of the certificate.
6.4 Government Approval. No consent, approval, waiver, order or
authorization of, or registration, declaration or filing with, any governmental
authority not already obtained is required in connection with the execution and
delivery of this Agreement by Purchaser or the consummation by Purchaser of the
transactions contemplated hereby.
15
ARTICLE VII
CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE
The obligation of Purchaser to purchase the Partnership Interests from
the Bay Club Partners is subject to satisfaction on or before the Closing of the
following conditions, any of which may be waived in whole or in part by
Purchaser:
7.1 Representations and Warranties True. The representations and
warranties in Article V of this Agreement, and the statements contained in the
Schedules annexed to this Agreement (other than Schedule 6.3), shall be true and
correct in all material respects as of the Closing Date. On or before the
Closing, Purchaser shall have approved each of the Schedules annexed hereto.
7.2 Authorization of Sale of Assets; Consents. The Bay Club
Partnerships shall have received from GECC, the holder of the Mortgage, its
consent to the transfer of the Bay Club Partnership Interests to the Purchaser.
7.3 Title Insurance. Each of the Bay Club Partnerships shall obtain
at Closing an Owners Policy of Title Insurance (ALTA. Form B-1970, Extended
Coverage or equivalent) covering the fee title to the respective Bay Club,
satisfactory in all respects to Purchaser. Partners shall be under no obligation
to cause title to be acceptable to Purchaser except to satisfy from the closing
proceeds monetary encumbrances other than the GECC Mortgage.
7.4 Property Questionnaires. Purchaser shall have received Property
Questionnaires with respect to Bay Club I and II, completed to the reasonable
satisfaction of Purchaser.
7.5 Discharge of Affiliate Obligations. At Closing each Bay Club
Partnership shall have been released from all obligations to the other Bay Club
Partnerships and the affiliates and shall have released the other Bay Club
Partnerships and the affiliates from all obligations, in each instance as said
obligations and affiliates are set forth in Schedule 5.5B.
7.6 Employee Matters..
(a) At or prior to the Closing Date but effective as of the
Closing Date, the Purchasers in their sole discretion may offer employment to
some or all of the full-time employees of CB Associates (each such employee who
accepts such offer of employment, if any, shall be hereinafter referred to as a
"Transferred Employee" and each present and former employee of CB Associates who
either is not offered or does not accept such employment shall be hereinafter
referred to as a "Non-Transferred Employee").
(b) The Partners acknowledge and agree that (i) no
representations or commitments concerning the terms or conditions of employment
with the Bay Club Partnerships following the Closing has or will be given by the
Partners or CB Associates to any of the Transferred Employees, (ii) the post-
Closing employment of the Transferred Employees will be at-will, and (iii) the
terms and conditions of the Transferred Employees' employment with
16
the Bay Club Partnerships following the Closing are subject to change at any
time in accordance with its policies. Partners agree to indemnify, defend and
hold Purchaser harmless with respect to the commitments to certain persons set
forth in Schedule 5.7(g).
(c) From the date hereof through the Closing Date, the Bay
Club Partnerships shall not employ (i) 100 or more employees, excluding part-
time employees (as defined in the WARN Act), or (ii) 100 or more employees who
in the aggregate work at least 4,000 hours per week (exclusive of hours of
overtime).
7.7 Continuing Operations. From the date hereof through the
Closing, Partners shall have operated the Bay Club in the usual, regular and
ordinary course of business.
7.8 Material Change. There shall have been no material adverse
change to the Bay Club.
7.9 Documents. Partners shall have delivered each of the documents
set forth in Section 8.1.
ARTICLE VIII
DOCUMENTS
8.1 Partner Closing Documents. At the Closing, the Partners shall
deliver or cause to be delivered to Purchaser with respect to the respective Bay
Club and Partnership Interest, as the case may be, the following:
(a) Assignment of Partnership Interest. An assignment of the
99% Partnership Interests to AIMCO Bay Club and the 1% Partnership Interests to
AIMCO Holdings in each Bay Club Partnership, in form and substance acceptable to
the parties hereto.
(b) Original Copies. Originals of the Tenant Leases, the
Contracts, and licenses or permits held by the Bay Club Partnerships.
(c) FIRPTA Certificates. A certificate of the each Bay Club
Partner stating that the Partner is not a "Foreign Person" within the meaning of
IRC Section 1445(f)(3).
(d) Supplemental Documents. Such other documents, executed,
acknowledged and delivered, as may be reasonably required to consummate the
transactions herein contemplated.
8.2 Purchaser Closing Documents. At Closing, Purchaser shall
deliver to the Partners the following:
(a) Purchase Price: Full payment of the Purchase Price in the
manner provided in Section 2.2.
17
(b) Assumption of Partnership Interest: An assumption of the
99% Partnership Interests by AIMCO Bay Club and the 1% Partnership Interests by
AIMCO Holdings in each Bay Club Partnership, in form and substance acceptable to
the parties hereto.
(c) Amended Certificate: For each Bay Club Partnership an
amendment to the partnership certificates filed in Dade County and with the
Florida Secretary of State, identifying the Purchaser as the general partners.
(d) Guarantee. A guarantee by Apartment Investment and
Management Company, a Maryland real estate investment trust, and the Purchaser
of the obligations of Xxxx X. Xxxxxxx under the GECC Mortgage, Joinder and other
loan documents in the form acceptable to Purchaser and GECC.
(e) Supplemental Documents: Such other documents, executed,
acknowledged and delivered as may be reasonably required to consummate the
transactions herein contemplated.
ARTICLE IX
COSTS
9.1 Costs. Each of the Bay Club Partners and Purchaser will bear
and pay all of their own costs in connection with the transactions contemplated
herein, except that the Purchaser shall pay (i) any and all State, County or
other recording taxes or fees, transfer taxes, sales taxes and fees which may be
due and payable as a result of the sale, transfer and conveyance of the
Partnership Interests and the Assets by the Bay Club Partners to the Purchaser
(ii) any and all fees and charges payable to GECC in connection with obtaining
GECC's consent to the transfer of the Partnership Interests to Purchaser
including, without limitation, the 1% transfer fee and (iii) any and all
premiums for surveys and title insurance which may be obtained at Closing.
ARTICLE X
BROKERAGE
10.1 Brokerage Commission. The Bay Club Partners represent and
warrant to Purchaser, and Purchaser represents and warrants to the Bay Club
Partners, that it has not dealt with any broker, realtor, finder or the like in
connection with the transactions herein contemplated, except that the Purchaser
has dealt with The Aztec Group ("Broker") and Purchaser shall be solely
responsible for any real estate commissions, fees, other compensation and
expenses that may be due Broker relating to the transactions contemplated by
this Agreement. The Partners, jointly and severally, agree for the benefit of
Purchaser, and Purchaser hereby agrees for the benefit of the Partners, to
indemnify, defend and hold harmless the other from and against any and all
costs, expenses, claims, liabilities and/or damages, including reasonable
attorneys' fees and the cost of enforcing this indemnification, arising out of
any brokerage commission, fee or other compensation or expenses due or
18
alleged to be due to any person in connection with any of the transactions
contemplated by this Agreement based upon an agreement alleged to have been made
or other action alleged to have been taken by the indemnifying party. The
foregoing indemnity by Purchaser shall include any claims made against any of
the Partners by Broker. The provisions of this Article X shall survive the
Closing.
ARTICLE XI
CERTAIN TAX MATTERS
11.1 Tax Returns, Payments of Taxes, Refunds and Withholding. (a)
Each Managing General Partner shall prepare and file, or shall cause to be
prepared and filed, all Tax Returns of its Bay Club Partnership (including any
amendment thereto), which are due with respect to all taxable periods ending on
or prior to the Closing Date. The respective Partners shall pay, or shall cause
to be paid within the time, as may be extended, and in the manner prescribed by
law, and shall indemnify and hold the Purchaser harmless against any claims for
unpaid taxes, interest and penalties ("Tax Losses") relating to Taxes, as
defined in Section 11.1(d) below, with respect to their Bay Club Partnership for
all taxable periods ending on or prior to the Closing Date, including the
taxable period ending as of the close of business on the Closing Date (each a
"Pre-Closing Period"). Purchaser shall pay, or cause to be paid, and shall
indemnify and hold each General Partner harmless against any Tax Losses relating
to Taxes with respect to a Bay Club Partnership for all taxable periods which do
not constitute Pre-Closing Periods.
(b) Except as otherwise provided in this Agreement: (i) any
refund of Taxes with respect to a Partnership that is received with respect to
any Pre-Closing Period shall be for the account of the Partners, and to the
extent that the Purchaser receives any such refund after the Closing Date with
respect to any such Pre-Closing Period, the amount of such refund shall be paid
to the respective Partners of the Bay Club Partnerships.
If the Partners of a Bay Club Partnership receive any refund of
Taxes attributable to any taxable period that is not a Pre-Closing Period, then
such Partners shall pay to the Purchaser the amount of such refund received
within 30 calendar days after the receipt thereof. The Managing General Partner
and the Purchaser shall assist one another in preparing, filing, obtaining and
defending any refund payable pursuant to this Section 11.1(b).
(c) The Partners and Purchaser agree that for all income tax
purposes, the taxable period of the Partnership which began on January 1 of the
calendar year in which the Closing Date occurs shall be terminated as of the
close of business on the day preceding the Closing Date. The Partners and
Purchaser further agree to file all Tax Returns (including, without limitation,
all State Income Tax returns), handle the contest of any audit and otherwise act
for all Tax purposes consistent with the provisions of this Section 11.1(c).
(d) For the purposes of this Agreement:
(i) "Taxes" means each and all taxes, levies, imposts, duties,
assessments, charges, and withholding imposed or required to be collected by any
federal, state, local or foreign governmental entity or by any political
subdivision thereof or any
19
combination thereof imposed on or with respect to, gross or net income, gross
receipts, minimum or alternative minimum tax, franchise, estimated withholding
or other tax, governmental fee or other like assessment or charge of any kind
whatsoever), plus any interest, penalties, fines, assessments or additions to
tax imposed in respect of any of the foregoing, or in respect of any failure to
comply with any requirement regarding Tax Returns.
(ii) "Tax Return" means a report, return, information return,
payee statement or other information required to be retained, or filed or
otherwise provided to any federal, state, or local entity with respect to Taxes,
including any reports, returns or information required to be retained, or filed
or otherwise provided to any governmental entity pursuant to 31 U.S.C. Sections
5311-5328 and regulations promulgated thereunder.
11.2 Control of Contest and Carrybacks. (a) Each of the Managing
General Partner and the Purchaser shall have the right, at its own expense, to
control any audit or determination by any governmental entity, and to contest,
resolve and defend against any assessment, notice of deficiency, or other
adjustment or proposed adjustment of Taxes for any taxable period for which it
may be obligated to indemnify the other party under this Agreement; provided,
however, that no party shall have the right to agree to any assessment,
deficiency, settlement, or other adjustment or proposed adjustment of Taxes that
would adversely affect another party without such other party's written consent.
(b) Each Managing General Partner shall promptly forward to
the Purchaser, and the Purchaser shall promptly forward to the Managing General
Partner, all written notifications and other written communications received by
the Managing General Partner or the Purchaser, respectively, relating to any
liability for Taxes for any taxable period, for a Bay Club Partnership for which
the Partners or the Purchaser, as the case may be, are charged with payment
responsibility under this Agreement. Each Managing General Partner and the
Purchaser shall each assist the other in taking any and all reasonable actions
with respect to any proceeding for any taxable period for which the Partners or
Purchaser is charged with payment responsibility under this Agreement. The
failure by a Managing General Partner or the Purchaser to provide any such
notice or other written communication to the other party in accordance with this
Section 11.2(b) within 20 business days of receipt shall relieve the other party
from its obligations with respect to the subject matter of any notification not
forwarded if, and only to the extent that, such failure materially prejudices
the other party in the defense of such Tax liability claim.
11.3 Access to Information and Records. Each of the Managing General
Partners and the Purchaser will provide the other (and the other's attorneys,
accountants and agents) with, and the Purchaser, after the Closing Date, shall
cause the Partnership to provide the Managing General Partners (and the Managing
General Partners' attorneys, accountants and agents) with, the right, at
reasonable times and upon reasonable notice, to have access to, and to copy and
use, any records or information and personnel which may be relevant for the
taxable period for which the requesting party is charged with payment
responsibility for Taxes under this Agreement in connection with the preparation
of any Tax Returns, the determination of amounts due under Article XI hereof,
any audit or other examination by any governmental entity, the filing of any
claim for refund of Tax or for the allowance of any Tax credit, or any judicial
or administrative proceedings relating to liability for Taxes. The party
requesting assistance hereunder shall reimburse the other party for reasonable
out-of-pocket expenses incurred in providing such assistance. Any information
obtained pursuant to this Section 11.3
20
shall be held in strict confidence and shall be used solely in connection with
the reason for which it was requested.
11.4 Resolution of Disagreements Among Parties. If a Managing
General Partner or the Purchaser disagree as to any matter governed by this
Article XI the parties shall promptly consult with each other in an effort to
resolve such dispute. Any amounts not in dispute shall be paid promptly, and any
amounts payable upon the resolution of a dispute shall be made to a bank account
designated by the payee no later than 10 business days after such resolution. If
any such disagreement cannot be resolved within 30 days after such Managing
General Partner or Purchaser asserts in writing that such dispute cannot be
resolved, the Managing General Partner and the Purchaser shall jointly select an
independent accounting firm to act as an arbitrator to resolve the disagreement
(the "Accounting Firm"). The Accounting Firm's determination shall be final and
binding upon the parties, and any fees and expenses relating to the engagement
of the Accounting Firm shall be shared equally by the Partners of the affected
Bay Club Partnership and the Purchaser. Upon the resolution of such dispute by
the Accounting Firm, any amounts payable by such General Partners or the
Purchaser, as the case may be, shall be made to a bank account designated by the
payee no later than 10 business days after such resolution. Simple interest will
be paid with respect to any such amounts at the Federal Funds Rate from the date
of the assertion in writing that the dispute cannot be resolved to the date of
payment.
11.5 Payments To or From the General Partners. Whenever a payment is
required to be made to or from the Partners pursuant to this Article XI, the
right to receive such amount, or the obligation to make such payment among the
Partners, shall be several and not joint, except for any Tax imposed on a
particular Bay Club Partnership itself in which case the liability of such Bay
Club Partners shall be joint. The Managing General Partner shall have no
obligation hereunder for any Tax, except as a Partner.
11.6 Survival. The provisions of this Article XI shall survive
Closing.
ARTICLE XII
INDEMNIFICATION
12.1 Indemnification of Purchaser. Subject to the provisions of this
Article XII, from and after the Closing Date, the Partners of the respective Bay
Club Partnerships agree to defend, indemnify, and hold harmless the Purchaser,
their respective officers, directors, partners, employees, representatives, and
agents, (individually and collectively the "Purchaser Indemnitees") against and
in respect of any and all losses, liabilities, damages, actions, suits,
proceedings, claims, demands, orders, assessments, amounts paid, in settlement
if approved by such Partners as provided below, fines, costs or deficiencies,
including without limitation, interest, penalties, and attorneys' fees and
costs, including the cost of seeking to enforce this indemnity to the extent
such enforcement is successful ("Purchaser, Losses"), caused by or resulting or
arising from, or otherwise with respect to, (w) any inaccuracy in or breach in
any material respect of any of the Partners' representations and warranties
contained in Article V of this Agreement, (x) any failure to perform or comply
with any of the Partners' covenants contained in this Agreement, (y) any breach
by the Bay Club Partnerships arising prior to the Closing Date under the
Contracts or Tenant Leases (including Security Deposits but excluding
21
claims relating to maintenance obligations), and, (z) any litigation described
in Schedule 5.12 or any uninsured claims asserted by third parties against the
Bay Club Partnerships after Closing to the extent such claims relate to matters
preceding the Closing.
12.2 Indemnification of Partners. Purchaser agrees to defend,
indemnify, and hold harmless the Partners and their respective officers,
directors, stockholders', employees, representatives and agents (individually
and collectively, the "Partner Indemnitees") against and in respect of any and
all losses, liabilities, damages, actions, suits, proceedings, claims, demands,
orders, assessments, amounts paid in settlement if approved by the Purchaser as
provided below, fines, costs or deficiencies, including, without limitation,
interest, penalties and attorneys' fees and costs, including the cost of seeking
enforcement of this indemnity to the extent that such enforcement is successful
("Partner Losses"), caused by or resulting or arising from, or otherwise with
respect to, (w) any inaccuracy in or breach in any material respect of any of
Purchaser's representations and warranties contained in Article VI of this
Agreement, (x) any failure to perform or comply with any of Purchaser's
covenants contained in this Agreement (y) any claims arising from the Tenant
Leases (including Security Deposits) and the Contracts arising from and after
Closing, or (z) any sales, transfer, documentary stamp or intangibles tax that
may be due and payable in connection with the transactions contemplated by this
Agreement.
12.3 Limitations on Indemnification.
(a) Notwithstanding any provision to the contrary contained in
this Agreement, the liability of the Partners for breaches of any
representations or warranties under Article V and the indemnifications in favor
of the Purchaser Indemnities contained in Section 12.1 herein (i) shall not be
effective until the aggregate dollar amount of all Purchaser Losses exceeds the
sum of $100,000, which amount is intended to be a threshold and shall not limit
the Partners' liability under this Article XII for amounts below $100,000 once
such threshold is met, and (ii) shall terminate once the dollar amount of all
Purchaser Losses paid under such Section aggregates an amount in excess of the
net cash proceeds received by the Partners at Closing, and the Partners shall
thereafter have no further obligations or liabilities with respect to any such
representations and warranties or Purchaser Losses.
(b) Notwithstanding any provision to the contrary contained in
this Agreement, the liabilities of the Purchaser for breaches of any
representations or warranties under Article VI and the indemnifications in favor
of the Partners' Indemnitees contained in Section 12.2 herein (i) shall not be
effective until the aggregate dollar amount of all Partner Losses indemnified
against under such Section exceeds the sum of $100,000, which amount is intended
to be a threshold and not limit the Purchaser's liability under this Article XII
for amounts below $100,000 once such threshold is met; and (ii) shall terminate
once the dollar amount of all Partner Losses paid under such Section aggregates
an amount in excess of the net cash proceeds received by the Partners at
Closing, and the Purchaser shall thereafter have no further obligations or
liabilities with respect to any such representations and warranties or Partner
Losses.
12.4 Survival. The provisions of this Article XII shall survive
Closing for a period of one (1) year, within which period the party seeking
indemnification under this Article XII must notify the indemnifying parties (in
the manner prescribed herein for the delivery of notice) of its intent to seek
indemnification, specifying both the nature of the claim and the amount sought,
to the extent such amount is then determinable.
22
ARTICLE XIII
SURVIVAL; FURTHER ASSURANCES
13.1 Survival. All warranties and representations in Articles V and
VI shall survive the execution and delivery of this Agreement for a period of
six (6) months, within which period a notice of a claim specifying in detail the
breach of the representation or warranty must be received by the party alleged
to have breached a representation and warranty.
13.2 Further Assurances. The parties shall after the Closing, and
without further consideration, execute, acknowledge and deliver to the other
such documents and instruments, and take such other actions, as shall reasonably
requested or as may be necessary more effectively to consummate the transactions
herein contemplated in accordance with this Agreement.
ARTICLE XIV
NOTICES
14.1 Notices. All notices, demands, consents, approvals and other
communications which are required or desired to be given hereunder shall be in
writing and shall be sent by United States registered or certified mail, postage
prepaid, return receipt requested, or by nationally recognized over-night
courier against signed receipt (i) if to the Bay Club Partners at the address
first above stated to the attention of Xxxxxxx X. Xxxxxx with a copy to Xxxxxxx
Leisure Xxxxxx & Irvine, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxx X. Xxxxxx, Esq.; (ii) if to Purchaser at the address first
above stated, with a copy to Xxxxxxx Xxxx Slate Xxxxxxx & Xxxx, 000 Xxxxx Xxxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention: Rand S. April,
Esq., or at such other address as such parties shall have last designated by
notice to the other.
ARTICLE XV
FUTURE COOPERATION
15.1 Records. The Parties agree for a period of two (2) years
subsequent to the Closing Date, upon request of the other, to deliver to or
otherwise make available all information and statements with regard to any
period prior to the Closing Date which may be reasonably required in connection
with the ownership of the Assets or the operation thereof.
23
ARTICLE XVI
PARTNERS' CLOSING CONDITION
16.1 Closing Conditions. It shall be a condition to the Partners'
obligation to close that (i) GECC releases the Partners from their obligations
under the GECC Mortgage and the loan documents delivered in connection therewith
and that Xxxx X. Xxxxxxx is released from all his obligations under the Joinder
Agreement dated November 25, 1996 executed by him and delivered to GECC, and
(ii) Purchaser pays the Purchase Price and delivers each of the documents set
forth in Section 8.2.
ARTICLE XVII
CONDITION "AS IS"; NO FURTHER REPRESENTATIONS
17.1 "As Is"/Representations. Purchaser represents that it has
inspected the Bay Club or caused an inspection thereof to be made on the
Purchaser's behalf and is thoroughly acquainted with its condition, and it is
agreed and understood that neither the Partners nor any person purporting to act
for the Partners has made or now makes any representations as to the physical
condition (including without limitation the presence of any environmentally
hazardous material or any condition which would violate any laws regarding
environmental matters), layout, leases, footage, rents, income, expense,
operation or any other matter or thing affecting or relating to the Bay Club or
to this Agreement, except as specifically set forth in this Agreement and that
no party hereto is relying on any statement or representation made by any other
which is not embodied in this Agreement. Purchaser hereby expressly acknowledges
that no representation has been made which is not expressly set forth in this
Agreement, and the Purchaser further agrees to take and accept the Bay Club "as
is" and in its condition at Closing. Purchaser agrees that the Partners are not
liable or bound in any manner by any financial statements or written agreements
or statements or representations which have been made, any real estate brokers'
"set-ups" or information pertaining to the Bay Club or any other matter or thing
furnished by any real estate broker, agent or employee, servant or other person,
unless the same are specifically stated herein. The provisions of this Section
shall survive the Closing.
ARTICLE XVIIII
MISCELLANEOUS
18.1 Written Changes. This Agreement may not be changed or
terminated orally.
18.2 Interpretations. This Agreement shall be construed, interpreted
and applied in accordance with the internal laws of the State of Florida without
giving effect to doctrines relating to conflicts of laws.
24
18.3 Title. The titles of the Articles and the Sections in this
Agreement are for convenience only, are not definitive, and shall not be
considered or referred to in resolving questions of interpretation or
construction.
18.4 Construction. This Agreement shall be construed without regard
to any presumption or other rule requiring construction against the party
causing this Agreement to be drafted. If any words or phrases in this Agreement
shall have been stricken out or otherwise eliminated, whether or not any other
words or phrases have been added, this Agreement shall be construed as if the
words or phrases so stricken out or otherwise eliminated were never included in
this Agreement and no implication or inference shall be drawn from the fact that
said words or phrases were so stricken out or otherwise eliminated. All terms
and words used in this Agreement, regardless of the number or gender in which
they are used, shall be deemed to include any other number and any other gender
as the context may require. If any term or provision of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, and the application
of such term or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected thereby, and
each term and provision of this Agreement shall be valid and enforced to the
fullest extent permitted by law.
18.5 Merger; Amendments. This Agreement and the exhibits and
schedules thereto contain the entire understanding and agreement by and among
the parties hereto, and all prior or contemporaneous oral or written agreements
or instruments, including, without limitation, a certain memorandum dated March
14, 1997 by Xxxxxxx X. Xxxxxx to Rand S. April, Esq., are merged herein. No
amendment to this Agreement shall be effective unless the same is in writing and
signed by all of the parties hereto.
18.6 Assignment. Purchaser shall not assign any of its right, title
or interest in and to this Agreement, the Deposit or the Pledge without the
prior written consent of the Partners, which consent may be withheld by the
Partners in their sole and absolute discretion. Notwithstanding the foregoing,
the Pledge may be assigned to an affiliate of Purchaser.
18.7 Termination. In the event Purchaser elects not to proceed with
the Closing pursuant to the terms of this Agreement for any reason whatsoever,
Purchaser shall so notify Partners of its election to terminate this Agreement
and of its demand for the return of the Deposit. Within five (5) days following
such notice from Purchaser, Partners shall pay the Deposit, together with
interest thereon from the date hereof at the "prime rate", as such rate is
declared by Citibank as its "prime rate" from time to time (the "Prime Rate"),
by Federal funds wire transfer as directed by Purchaser, whereupon this
Agreement shall terminate. In the event Partners fail to proceed with the
Closing in accordance with the terms of this Agreement for any reason
whatsoever, Purchaser's sole remedy shall be to receive the return of the
Deposit, together with interest thereon at Prime Rate from the date hereof. Upon
such failure, Partners shall return the Deposit, together with interest thereon
at the Prime Rate, whereupon this Agreement shall terminate. The obligation of
the Partners to refund the Deposit in accordance with the terms of this Section
18.7 shall survive the termination of this Agreement.
25
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
PURCHASER:
AIMCO BAY CLUB, L. P.,
a Delaware limited partnership
By: AIMCO HOLDINGS, L. P.,
a Delaware limited partnership
Its: General Partner
By: AIMCO HOLDINGS QRS, Inc.,
a Delaware corporation
Its: General Partner
By: /s/ Xxxxx Xxxxxx
-----------------------
Name: Xxxxx Xxxxxx
Title: VP
AIMCO HOLDINGS, L. P.,
a Delaware limited partnership
By: AIMCO HOLDINGS, QRS, INC.,
A Delaware limited corporation
Its: General Partner
By: /s/ Xxxxx Xxxxxx
-----------------------
Name: Xxxxx Xxxxxx
Title: VP
BAY CLUB I PARTNERS WILLIAMSBERRY DEVELOPMENT CORPORATION
By: /s/ Xxxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: President
XXXXXX WILLIAMSBERRY LIMITED PARTNERSHIP
BY: Xxxxxx Aventura, Inc., general
partner
By: /s/ Xxxxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: President
26
BAY CLUB II PARTNERS WILLIAMSBERRY DEVELOPMENT CORP. II
By: /s/ Xxxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: President
XXXXXX WILLIAMSBERRY L-2 C LIMITED
PARTNERSHIP
By: Xxxxxx Aventura L-2 C, Inc., general
partner
By: /s/ Xxxxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: President
BAY CLUB III PARTNERS COLBRO DEVELOPMENT L-2 B CORP.
By: /s/ Xxxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: President
XXXXXX WILLIAMSBERRY L-2 B LIMITED
PARTNERSHIP
By: Xxxxxx Aventura L-2 B, Inc., general
partner
By: /s/ Xxxxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: President
AIMCO IS JOINING IN ON THE EXECUTION OF THIS AGREEMENT FOR THE SOLE PURPOSE OF
AGREEING TO EXECUTE AND DELIVER THE GUARANTEE UNDER SECTION 8.2 OF THIS
AGREEMENT.
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY,
a Maryland Real Estate Investment
Trust
By: /s/ Xxxxx Xxxxxx
--------------------------------
Name: Xxxxx Xxxxxx
Title: VP
27