CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this Agreement) is made as of the 21st day of August, 2006 (the Effective Date), by and between VMS NATIONAL PROPERTIES JOINT VENTURE, an Illinois general partnership (Contributor), AIMCO PROPERTIES, L.P., a Delaware limited partnership (Parent) and AIMCO PROPERTIES, LLC, a Delaware limited partnership (Contributee).
W I T N E S S E T H:
In consideration of the covenants and provisions contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Agreement to Contribute. Contributor agrees to contribute (the Contribution) to Contributee, and Contributee agrees to receive from Contributor, subject to all of the terms and conditions of this Agreement, all of Contributors right, title and interest in and to those certain residential apartment projects commonly known as (i) Buena Vista Apartments, located in Pasadena, Los Angeles County, California, (ii) Casa de Monterey, located in Norwalk, Los Angeles County, California, (iii) Crosswood Park Apartments, located in Citrus Heights, Sacramento County, California, (iv) MountainView Apartments, located in San Dimas, Los Angeles County, California, (v) Pathfinder Village Apartments, located in Fremont, Alameda County, California, (vi) Scotchollow Apartments, located in San Mateo, San Mateo County, California and (vii) Towers of Westchester Park Apartments, located in College Park, Prince Georges County, Maryland, consisting of the following:
(a) Real Property. Those certain tracts of land more fully described on Exhibit A-1 through Exhibit A-7 attached to this Agreement and incorporated herein by this reference, together with all improvements now or hereafter located thereon and all appurtenances thereto (including, without limitation, all easements, rights-of-way, water rights, mineral and timber rights, development rights, privileges, licenses, and other rights and benefits belonging to, running with the owner of, or in any way relating to the aforesaid tract of land and all trees, shrubbery and plants), together with all right, title and interest of Contributor in and to any land lying in the bed of any street, opened or proposed, abutting such tract of land, and all right, title and interest of Contributor in and to any unpaid award for the taking by eminent domain of any part of the aforesaid tract of land or for damage to such tract of land by reason of a change of grade of any street (collectively, the Real Property); and
(b) Personal Property. All fixtures, furniture, equipment, elevators, and other personal property owned by Contributor and attached or appurtenant to, or located in or on, or used in connection with the Real Property, together with all intangible personal property used in the ownership, operation or maintenance of the Real Property, with the exception, however, of any replacement reserves, escrow accounts, residual receipts accounts, cash or other funds (whether in petty cash or house banks or on deposit or in transit for deposit), utility or similar deposits, receivables, refunds, rebates or other claims, or any interest thereon, for the period or events occurring through the Closing Date, and insurance and other prepaid items (collectively,
the Personal Property and, together with the Real Property, the Property). Each parcel of the Real Property described on Exhibit A-1 through Exhibit A-7, together with the Personal Property associated therewith, is sometimes individually referred to herein as a Site. The Property is to be conveyed in its entirety, and individual Sites may not be excluded by Contributee or Contributor. Any termination of this Agreement as provided herein shall be effective as to the entire Property.
(c) Consideration. Subject to Section 1(d) and 1(e) below, the consideration for the Contribution (the Consideration) of the Property, subject to adjustments as provided in this Agreement, shall be Two Hundred Twenty Four Million Two Hundred Twenty Eight Thousand, Two Hundred Sixty and No/100 Dollars ($224,228,260.00) and shall be paid at Closing (as defined in Section 4(a)) in cash or by certified, cashiers or treasurers check, or by wire transfer of immediately available funds.
(d) Alternative Payment. (i) In connection with the Contribution, the Contributor shall give each limited partner of the Contributors general partners (each, a Limited Partner) an opportunity to waive its right to receive any or all of the Consideration otherwise ultimately distributable to it in cash and elect to receive such waived portion of the Consideration directly from Parent in the form of Partnership Common Units of Parent (OP Units). Contributor and Parent agree to provide each Limited Partner with documentation sufficient to indicate any such waiver and election. Contributor further agrees to, and hereby does, waive its right to receive any Consideration that would be distributable to any Limited Partner that has waived its right to receive such Consideration in cash and elected to receive it directly from Parent in the form of OP Units (any such Limited Partner, an Electing Limited Partner). Parent hereby agrees to issue and deliver directly to each Electing Limited Partner that number of OP Units equal to (A) the amount of cash Consideration the receipt of which was waived in such Electing Limited Partners waiver and election documentation divided by (B) the Average Daily Closing Price; provided that such issuance and delivery does not violate any state securities laws, in which event all parties hereto shall be entitled to disregard such waiver and election and proceed with the Contribution and resulting cash distributions as if such waiver and election had not been delivered by such Electing Limited Partner. Any certificate evidencing OP Units issued to an Electing Limited Partner shall contain such legends and restrictions as may be required by federal or state securities laws or the governing documents of Parent. Average Daily Closing Price means the average of the closing prices per share of the Class A Common Stock of Apartment and Investment Management Company, a Maryland corporation, on the New York Stock Exchange as reported by the Wall Street Journal (or, if not reported thereby, any other authoritative source as the parties shall agree in writing) for the twenty (20) consecutive full trading days in which such shares are traded on the New York Stock Exchange ending on the second trading day, prior to, but not including, the Closing Date.
(ii) Contributor hereby covenants and agrees to use commercially reasonable efforts to qualify the offering and issuance of OP Units under the state securities laws of each state in which a Limited Partner is a resident.
(e) Contributee holds certain rights to receive payments from residual proceeds remaining following the disposition of the Real Property and the payment of other specified claims (such rights, the MF-VMS Interest). In connection with the Contribution,
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Contributor and Contributee hereby agree as follows with respect to the treatment of the MF-VMS Interest: (i) at the Closing, Contributee shall assume and shall become responsible for the payment, performance and satisfaction of all obligations arising with respect to the MF-VMS Interest with respect to the Real Property and (ii) the Consideration payable to Contributor shall be reduced by an amount equal to the obligation assumed pursuant to this Section 1(e).
2. Defaults.
(a) Contributee Default.
If Contributee, without the right to do so and in default of its obligations under this Agreement, fails to complete Closing, Contributor shall be entitled to terminate this Agreement by written notice to Contributee, whereupon neither party hereto shall have any further rights or obligations hereunder except for those that expressly survive termination of this Agreement.
(b) Contributor Default. If Contributor, without the right to do so and in default of its obligations under this Agreement, fails to complete Closing, Contributee shall have the right either to terminate this Agreement by written notice to Contributor, whereupon neither party hereto shall have any further rights or obligations hereunder except for those that expressly survive termination of this Agreement or to seek specific performance of Contributors obligations under this Agreement; Contributee waives any right to any and all other remedies for Contributors breach of this Agreement permitted by law or in equity against Contributor or any of Contributors Affiliates, including any right to damages.
3. Closing.
(a) Place of Closing. The closing and settlement of the transaction contemplated by this Agreement (Closing) shall take place by escrow closing with the Title Company (as defined in Section 5(a)) wherein neither Contributee nor Contributor need be physically present.
(b) Closing Date. Closing shall occur on such date as is selected by Contributor and Contributee (the Closing Date); provided, however, that the Closing Date shall not occur any later than December 31, 2007.
4. Condition of Title.
(a) Title to Real Property. Title to the Real Property and Contributors interest therein shall be good and marketable, and free and clear of all liens, restrictions, easements, encumbrances, leases, tenancies and other title objections, except for the Permitted Encumbrances (as hereinafter defined), and shall be insurable as such and as provided in this Agreement at ordinary rates by Stewart Title Guaranty Company, 1980 Post Oak Boulevard, Suite 610, Houston, Texas 77056, Attention: Ms. Wendy Howell, Facsimile No.: 713-552-1703 (the Title Company or Escrow Agent) pursuant to an ALTA Owners Policy of Title Insurance. The term Permitted Encumbrances shall mean the items set forth on Exhibit B to this Agreement and any and all written tenant leases for apartment units at the Property (the Tenant Leases).
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