CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT is made effective the 27th day of February,
1998, by and between:
TRANSFEROR: Salem Farm Mobile Home Park, Inc.,
a Pennsylvania corporation
c/o Brandywine Real Estate
Management Service Corporation
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TRANSFEREE: Asset Investors Operating Partnership, L.P.,
a Delaware limited partnership
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W I T N E S S E T H:
WHEREAS, Transferor is the fee simple owner of certain premises
commonly known as SALEM FARM MOBILE HOME PARK located in Bucks County,
Pennsylvania, more particularly described in Exhibit "A" attached hereto and
made a part hereof (together with all rights and easements appurtenant thereto
and all permanent improvements, fixtures and utility systems thereon, being
hereinafter collectively referred to as the "Real Property"); and
WHEREAS, Transferor desires to transfer and contribute the Real
Property, the Personal Property (defined below) and the various other rights and
privileges described hereinbelow to Transferee in exchange for AIOP Units
(defined below) and subject to the terms and conditions hereunder Transferee
desires to accept the transfer and contribution of the Real Property and all
personal property, fixtures and equipment described in the Schedule of Personal
Property attached hereto as Exhibit "B" and made a part hereof (the "Personal
Property"), together with all of Transferor's right, title and interest in and
to (a) rights of way, reservations, privileges, appurtenances and other estates
and rights of Transferor pertaining to the Real Property and improvements; (b)
each of the Leases (as defined in paragraph 7(a)(x) herein) and all
modifications and amendments thereof, together with all security deposits in
Transferor's possession; (c) each of the Service Contracts (as defined in
paragraph 7(a)(xiii) herein); (d) all licenses, warranties and guaranties, if
any, and all benefits thereof, which effect the improvements on the Real
Property or any component thereof; (e) utility rights, all permits, impact fee
credits, if available, plans and specifications, site plans, and all marketing,
environmental, engineering, architectural reports, if any, of Transferor; (f)
occupancy permits and certificates and all other licenses and approvals issued
with reference to the Property by any governmental or quasi-governmental body or
authority; (g) all advertising brochures, and any and all rights to use existing
trade names affecting the Property; under the terms and conditions set forth
herein (the aforesaid Real Property and Personal Property, together with all of
the foregoing items listed in clauses (a) through (g) above, being hereinafter
collectively referred to as the "Property").
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, together with other valuable considerations, the receipt and sufficiency
of which is hereby acknowledged, Transferor and Transferee agree as follows.
1. RECITALS. The above recitals are true and correct and are
incorporated herein by reference.
2. CONTRIBUTION VALUE. The Contribution Value for the Property shall be
Seven Hundred Seventy-Four Thousand Six Hundred Thirty-Three and 28/100 Dollars
($774,633.28) (the "Contribution Value"). The Contribution Value for the
Property is based upon the assumption that the outstanding principal balance of
the mortgage loan from Harleysville National Bank and Trust Company as of the
Closing Date shall be exactly Five Hundred Fifty Thousand Three Hundred
Sixty-Six and 72/100 Dollars ($550,366.72). The mortgage described in the
preceding sentence is referred to as the "Existing Debt" and Transferee agrees
that it shall acquire the Property subject to the Existing Debt. If the
outstanding principal balance of the Existing Debt is other than as set forth
above, the Contribution Value shall be adjusted by subtracting the outstanding
principal balance of the Existing Debt from the sum of One Million Three Hundred
Twenty-Five Thousand and No/100 Dollars ($1,325,000.00).
3. ▇▇▇▇▇▇▇ MONEY DEPOSIT. As an ▇▇▇▇▇▇▇ money deposit (the "▇▇▇▇▇▇▇
Money Deposit"), Transferee has deposited with Chicago Title Insurance Company,
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"Escrow Agent"), the sum of ONE HUNDRED AND NO/100 DOLLARS ($100.00) upon the
execution of this Agreement by Transferee, which sum shall be held in escrow and
credited toward the Contribution Value at closing or otherwise disbursed by
Escrow Agent in accordance with the terms of this Agreement.
4. ISSUANCE OF AIOP UNITS. As payment of the Contribution Value, at
Closing Transferee shall issue to Transferor 44,583 partnership units in
Transferee ("AIOP Units"), which are convertible to stock in Asset Investors
Corporation ("AIC")(attached hereto as Exhibit "G" is a complete description of
the benefits accorded AIOP Units, including conversion rights into shares of
common stock of AIC). The value of the AIOP Units is based upon a stock price of
AIC equal to $17.375 per share (based upon the February 26, 1998 closing price
of the stock). The AIOP Units and AIC stock shall be Rule 144 restricted stock
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for a period of one year from the date of closing.
Not later than ten (10) days after the execution date, Transferor shall
deliver to Transferee executed investor questionnaires (collectively, "Investor
Questionnaires") in form and substance satisfactory to Transferee executed by
Transferor, the form of which is attached hereto as Exhibit "F". If Transferee
determines, in its sole and absolute discretion, that any of the General
Partners or Transferors do not meet the definition of "Accredited Investor" as
defined in Rule 501 of the General Rules and Regulations promulgated under the
Securities Act of 1933, then Transferee has the option, in its sole and absolute
discretion, of either (i) terminating this Agreement, or (ii) paying cash to
Transferor. In the event Transferee chooses to terminate this Agreement pursuant
to this paragraph 4, Transferor shall be solely responsible for any and all
cancellation charges of Escrow Agent and Title Company (as hereinafter defined),
the ▇▇▇▇▇▇▇ Money Deposit shall be immediately returned to Transferee, and this
Agreement shall automatically terminate and be of no further force or effect and
neither party shall have any further rights or obligations hereunder, other than
pursuant to any provision hereof which expressly survives the termination of
this Agreement.
5. CASH REQUIREMENTS FOR CLOSING. To the extent Transferee is liable
for any closing costs associated with the transaction described in this
Agreement, Transferee shall deliver to Escrow Agent at closing by wire transfer
of immediately available funds cash in an amount sufficient to pay such closing
costs. To the extent Transferor is liable for any closing costs associated with
the transaction described in this Agreement, Transferor shall deliver to Escrow
Agent at closing by wire transfer of immediately available funds cash in an
amount sufficient to pay such closing costs.
6. KEY DOCUMENTS. Transferor has furnished to Transferee the following
information regarding Transferee's review of the Property:
(a) current certified rent roll;
(b) thirty-six months of operating statements for the
Property;
(c) All documentation relating to the Property and, to the
best of Transferor's knowledge, all documentation required to be submitted to
any governmental agency;
(d) copies of any engineering, architectural, utilities,
soils and asbestos reports;
(e) list and copies of all permits held, and consents of
governmental authorizations required to operate the Property;
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(f) form of tenant lease;
(g) current Inspection Report prepared by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Architect dated January 23, 1998 (hereinafter "Inspector");
(h) copies of notes, mortgages and any other existing
financing documents;
(i) termite report;
(j) all applicable organizational and governing documents for
Transferor including partnership agreements, certificates of limited
partnership, certificate of good standing, incumbency certificate, articles of
organization, regulations and operating agreement (for an LLC); and
(k) current environmental audits prepared by
EnviroAssessment, Inc. dated February 13, 1998.
The foregoing shall be collectively deemed the "Key
Documents".
7. REPRESENTATIONS AND WARRANTIES.
(a) To induce Transferee to enter into this Agreement,
Transferor makes the following representations and warranties, to the best of
Transferor's knowledge and belief, all of which, except as otherwise provided
herein, shall survive the Closing for a period of one year from the Closing Date
(hereinafter defined):
(i) Transferor is a validly existing and organized
corporation under the laws of the State of Pennsylvania, and has full power,
authority and legal right to execute and deliver, and to perform its obligations
under this Agreement, and such execution, delivery and performance will not
conflict with or result in a breach of, or constitute a default under, any of
the provisions of any law, governmental rule, regulation, judgment, decree or
order by which it is bound, or by any of the provisions of any contract to which
Transferor is a party or by which it is bound.
(ii) This Agreement and the obligations hereunder
are legal, valid and binding obligations of Transferor, enforceable in
accordance with their terms, all required action and approvals have been duly
taken and obtained, and there are no claims, defenses, personal or otherwise,
whatsoever to the enforceability or validity hereto.
(iii) All of the items, lists and copies supplied or
made available to Transferee by Transferor and its agents under this Agreement,
including, but not limited to, the Key Documents, are all of such items and are
true and correct (to the extent prepared by Transferor or its employees),
complete and current list and copies as of the date furnished. The agreements,
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representations and warranties made by Transferor in this Agreement, in the
documents, instruments, reports and other information delivered to Transferee
hereunder, shall each be true and correct in all material respects on and as of
the Closing Date (provided, to the extent any document, instrument or report
delivered or made available to Transferee hereunder was not prepared by
Transferor or its employees, Transferor does not warrant the correctness of, or
the information contained in, such document, instrument or report, but only that
it is a true and complete copy of such document, instrument or report, prepared
by such third party and that Transferor has no actual knowledge that any
information contained therein is not true and correct), with the same force and
effect as though they had been made or given on and as of the Closing Date,
subject only to the qualifications that on the date of Closing, Transferor may
update any of such documents, instruments, reports and other information to
accurately reflect only such changes therein between the date hereof and the
Closing Date as have occurred in the ordinary course of business or which are
permitted by this Agreement and which, in either event, do not materially or
adversely affect the Property or the operation thereof.
(iv) There are no outstanding claims, notices,
orders or directives delivered to or served upon Transferor or its agents, or of
which Transferor is aware, issued by any department or agency of any government
having jurisdiction over the Property, or by any private party which is the
beneficiary of any recorded covenant, condition, restriction, easement or other
right affecting the Property ("Private Rights"), alleging or pertaining to any
violation of law, code or ordinance or of Private Rights affecting the Property
or any part thereof, or requiring any work to be done upon or about the Property
or any part thereof. Transferor has not received any notice of, and to the best
of Transferor's knowledge there are no violations of any law, permit, code or
ordinance or Private Rights affecting, pertaining to or committed on the
Property or any portion thereof.
(v) Based on that certain owner's title commitment
issued in connection with this transaction by Chicago Title Insurance Company in
connection with this transaction, and without any knowledge of Transferor to the
contrary, Transferor has good, marketable, insurable and indefeasible fee simple
title to the Real Property, free and clear of all liens, encumbrances,
restrictions, security interests, covenants, conditions and other matters in any
way affecting title to the Real Property other than current taxes, zoning
regulations and those title exceptions listed and described on Exhibit "C"
attached hereto (the "Permitted Exceptions").
(vi) Transferor has received no notice of any
pending or threatened condemnation or similar proceeding affecting the Real
Property or any part thereof and Transferor has no knowledge that any such
proceeding is presently contemplated; and the Property is free from damage or
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destruction due to any casualty loss except as described in the Inspection
Report prepared by Inspector.
(vii) Except as set forth in Exhibit "G" hereto,
There are no actions, suits or other legal or administrative proceedings,
including bankruptcy proceedings, pending or actually threatened, against or
involving Transferor or the Property and Transferor is not aware of any facts
which might result in any such action, suit or other proceeding.
(viii) No goods or services have been contracted for
by Transferor or furnished to the Real Property on Transferor's behalf which
might give rise to any mechanic's liens upon or affecting all or any part of the
Real Property.
(ix) The right to assign the name "SALEM FARM MOBILE
HOME PARK" by which the Property is commonly known and to use that name in the
operation of the Property has been assigned by the Transferor to Transferee
without warranty, provided, however, that Transferee shall not be legally bound
or under any legal obligation to use said name.
(x) There are no leases which affect the Real
Property except as set forth in the rent roll ("Rent Roll") delivered to
Transferee (the "Leases") and the information contained on the Rent Roll is true
and correct. All extensions and concessions are set forth on the Rent Roll. The
form lease delivered to Transferee is a true copy of the current lease form
presently used for tenant Leases, complete with all amendments, modifications,
options and extensions thereto.
(xi) All of the security deposits, which term shall
include any interest required to be paid thereon, if any, in regard to the
Property, to which any tenants may have a claim, will be paid to Transferee on
the date of Closing or will be applied in reduction of the payment due
Transferor at such time; thereafter, the responsibility for security deposits
will be that of Transferee. Transferor agrees to provide Transferee with an
itemized schedule of such security deposits on the Closing Date.
(xii) Transferor has not received actual notice of
any pending proceedings before any legal or administrative agency having
jurisdiction over the Property with respect to any increase of real estate taxes
or other assessments on the Property; to Transferor's knowledge, there are no
existing or pending assessments for public or capital improvements or the like;
(xiii) Transferor has not contracted for any
services or employment and has made no commitments or obligations therefor which
will bind Transferee as a successor in interest with respect to the Property
except those contracts listed in Exhibit "D" (the "Service Contracts"). At
closing, Transferor shall assign to Transferee all of its right, title and
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interest in and to the Service Contracts and warranties and guaranties;
provided, however, that Transferee shall have the right after closing hereunder
to terminate any such Service Contracts as of the Closing Date, unless
termination is prohibited in any such Service Contract. Amounts paid or payable
under the Service Contracts shall be prorated between the parties at the Closing
and credits shall be given the parties as appropriate to such prorations.
(xiv) *Transferor has received no written notice
that the current use of the Property, the Leases, and the rules and regulations
violate the Federal Fair Housing Act. Transferor further represents and warrants
it has received no written notice that the use of the Property, the Leases, and
rules and regulations do not meet the requirements to qualify the Property for
the exemptions for housing for older persons under the Fair Housing Act of 1988.
(xv) No rents or other deposits are or will on the
Closing Date be held by Transferor, except for prepaid rents for the current
month (which shall be prorated at Closing); and no commissions or other fees
payable to any person, entity or agent are due on the rentals collected or to be
collected under the Leases.
(xvi) Based on certificates, licenses, permits and
approvals, currently existing, including, as applicable, the Key Documents, the
Property is and may be used for its current operation as a rental mobile home
community and for the purposes for which the improvements thereon were
constructed and may continue to operate, based upon laws and ordinances in
effect on the date hereof, without violating any federal, state, local or any
other governmental building, zoning, environmental, health, safety, platting,
subdivision or other statute, ordinance or regulation or any applicable private
restriction; and necessary permits for such use and operation have been obtained
and are in full force and effect. No notice of violation of any of the foregoing
has been received by Transferor.
(xvii) Based on the survey prepared for the
Property, no building or other improvement on the Property relies on any
premises other than the Property to fulfill any governmental or applicable
private requirement, except for appurtenant easements of record.
(xviii) To the best of Transferor's knowledge and
belief, based upon existing certificates of occupancy and other certificates,
licenses, permits, approvals and current zoning letter, all improvements on the
Property fully conform in all material respects with all zoning regulations and
building codes applicable at the time of their issuance (and Transferor has
received no notice of any changes that are required to be implemented at the
Property) and with all private restrictions, and none of the buildings or
improvements located on the Property are prior non-conforming structures under
the current applicable zoning regulations.
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(xix) *Transferor hereby represents and warrants
that during the period of its ownership and control over the Property,
Transferor has not knowingly permitted, and Transferor has no knowledge of,
(other than anything disclosed in the Environmental Site Assessment prepared by
EnviroAssessment, Inc.) the presence, disposal, release or threatened release of
any Hazardous Substance (as hereinafter defined) on, into, from or under the
Property or improvements constructed thereon, by or through Transferor, any
tenant (present or former) or any party whatsoever. As used in this Agreement,
the term "Hazardous Substance" means any waste oil, solvent mixture, or any
hazardous, toxic or dangerous substance, waste or material which is or becomes
regulated under any federal, state or local statute, ordinance, rule, regulation
or other law now or hereafter in effect pertaining to environmental protection,
contamination or clean-up, including without limitation any substance, waste or
material which now or hereafter is (i) designated as a "solid or hazardous
substance" under or pursuant to the Federal Water Pollution Control Act (33
U.S.C. ss. 1257 et seq.), (ii) defined as a "hazardous waste" under or pursuant
to the Resource Conservation and Recovery Act (42 U.S.C. ss. 6901 et seq.),
(iii) defined as a "hazardous substance" in (or for purposes of) the
Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C.
ss. 9601 et seq.), (iv) defined as a "hazardous air pollutant" under or pursuant
to the Federal Clean Air Act (42 U.S.C. ss. 7401 et seq.), (v) defined as a
hazardous, toxic or dangerous substance under or pursuant to any so-called
"Superfund" or "Superlien" law, (vi) defined or listed as a "hazardous waste,"
"extremely hazardous waste," "restricted hazardous waste," "infectious waste,"
"pollutant," "hazardous substance," "hazardous material," "petroleum product,"
or "pollutant" under or pursuant to Pennsylvania statutes and regulations.
(xx) *Transferor further represents that, to
Transferor's knowledge (based solely on actual knowledge of Transferor and upon
existing environmental assessments, reports and studies prepared by
EnviroAssessment, Inc.) there was no presence, disposal, release or threatened
release of any Hazardous Substance on, from, or under the Property prior to
Transferor's acquisition of ownership or control of the Property.
(xxi) *Transferor further represents and warrants
that to Transferor's knowledge and based on that certain environmental
assessment report prepared by EnviroAssessment, Inc., the Property (including
underlying soil and groundwater conditions) is not currently in violation of any
state, local, federal or other law, statute, regulation, code, ordinance, decree
or order relating to hygienic or environmental conditions, and that during
Transferor's ownership of the Property, to Transferor's knowledge, no party has
used, generated, stored, or disposed of any flammable explosives, radioactive
materials, Hazardous Substance, toxic substances or related materials, on, under
or about the Property, except, if any, in accordance with applicable law.
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For purposes hereof, the terms "disposal",
"release", and "threatened release" shall mean and include the definitions
thereof set forth in the Comprehensive Environmental Response, Compensation and
Liability Act and all other federal, state, county, local and other laws,
ordinances, codes, statutes, rules, regulations, decrees and orders relating to
or imposing liability or standards of conduct regarding environmental or
hygienic matters.
(xxii) Intentionally Omitted.
(xxiii) No persons or entities have any rights to
use any improvements or amenities situate on the Property, with the exception of
any easements shown on the owner's title commitment issued in connection with
this transaction, any items shown on the current survey of the Property, tenants
of the Property under the Leases and the rights of the respective lessees under
the cable lease, if any.
(xxiv) *Based on the current zoning letter for the
Property, and with no reason to suspect otherwise and with no actual notice to
the contrary, the present use of the Property as a rental mobile home community
with all existing amenities is a valid and permitted use under the zoning and
land use codes applicable to the Property. In the event of a casualty, the
current improvements and use of the Property could be rebuilt, including the
current existing density and current approved density.
(xxv) Transferor owns no right of first refusal or
option or similar rights regarding the purchase of any property contiguous to
the land described in Exhibit "A" hereto and if Transferor shall obtain any of
the same prior to Closing, Transferor covenants to so advise Transferee, and
Transferee at its option, may require from Transferor at Closing an assignment
of such rights, without payment of additional consideration.
(xxvi) *Based on, and except as disclosed in that
certain Inspection Report prepared by Inspector, the Property, to the extent
applicable, and with no knowledge of such to the contrary, is in compliance with
the Americans With Disabilities Act, the Federal Fair Housing Act and any
similar Pennsylvania statutes.
Notwithstanding anything to the contrary contained herein, the
representations and warranties in paragraph 7(a) above which are noted with an
asterisk (*) shall survive Closing and shall not be limited by the one-year
survival language contained in paragraph 7(a) above.
(b) In addition to the foregoing, Transferor hereby
represents, warrants and agrees, on behalf of itself (which representation and
warranties shall survive Closing):
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(i) Transferor is, and at the Closing will be, an
"Accredited Investor" as defined in Rule 501 of the General Rules and
Regulations promulgated under the Securities Act of 1933, as amended (the
"Act").
(ii) Transferor has had access to such additional
financial and other information, and has been afforded the opportunity to ask
questions of representatives of the Transferee and AIC (defined below), and to
receive answers to those questions, as they have deemed necessary in connection
with the acquisition of the AIOP Units that may be acquired pursuant hereto.
(iii) Transferor (i) acknowledges that the AIOP
Units that will be acquired pursuant to this Agreement are being acquired in
transactions not involving any public offering within the meaning of the Act,
and that the AIOP Units have not been registered and may never be registered
under the Act, and (ii) agrees not to offer, sell, transfer or otherwise dispose
of all or any portion of the AIOP Units in the absence of registration under the
Act unless it delivers to the Transferee an opinion of counsel reasonably
satisfactory to the Transferee, in form and substance satisfactory to the
Transferee, to the effect that the proposed sale, transfer or other disposition
may be effected without registration under the Act and under applicable state
securities or blue sky laws.
(iv) Transferor acknowledges and agrees that the
AIOP Units will be in the form of physical certificates and that unless such
AIOP Units shall have been registered under the Act, the certificates will bear
a legend to the following effect:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS
OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO
THE COMPANY AN OPINION OF COUNSEL OR OTHER EVIDENCE REASONABLY
SATISFACTORY TO THE COMPANY, IN FORM AND SUBSTANCE SATISFACTORY TO THE
COMPANY, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER
DISPOSITION MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE ACT AND
UNDER APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS.
(v) Transferor (i) has such knowledge and experience
in financial and business matters that it is capable of evaluating the merits
and risks of an acquisition of the AIOP Units and is able to bear the economic
risk of a loss of an investment in the AIOP Units and (ii) is not acquiring any
AIOP Units with a view to the distribution of the AIOP Units or any present
intention of offering or selling any of the AIOP Units in a transaction that
would violate the Act or the securities laws of any state or any other
applicable jurisdiction.
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(vi) With respect to individual tax and other
economic considerations involved in the transactions contemplated by this
Agreement, including an investment in AIOP Units, Transferor is not relying on
Transferee or any agent or representative of Transferee. Transferor has
carefully considered and has, to the extent it believes such discussion
necessary, discussed with its professional legal, tax, accounting and financial
advisors the suitability of an investment in the AIOP Units for its particular
tax and financial situation and has determined that the AIOP Units being
acquired by Transferor is a suitable investment for Transferor.
(vii) No representations or warranties by Transferor
in this subparagraph (b) nor any document, exhibit, statement, certificate or
schedule heretofore or hereinafter furnished to the Transferee pursuant to this
subparagraph (b) or in connection with the transactions contemplated in this
subparagraph (b), contains or will contain any untrue statement of a material
fact, or omits or will omit to state any material fact necessary to make the
statements or facts contained therein not misleading.
(c) To induce Transferor to enter into this Agreement
Transferee represents and warrants, to the best of Transferee's knowledge and
belief, that Transferee has the right, power and authority to enter into this
Agreement and to perform its obligations hereunder and the persons executing
this Agreement on behalf of Transferee have been duly authorized by Transferee
to do so.
8. TITLE INSURANCE.
(a) Transferor has, at Transferee's expense, delivered to
Transferee and Transferee's attorney with a copy provided to Transferor's
attorney, a preliminary owner's title insurance commitment issued by Chicago
Title Insurance Company, Commitment Number 9781-00929, together with copies of
all exception documents referred to therein. The commitment and policy to be
issued pursuant thereto shall be paid for by Transferee, shall be issued at the
minimum promulgated rate, and shall be in an amount equal to the amount of the
Contribution Value. The policy and commitment shall be in a current ALTA
standard form "B", except that there shall be no exceptions other than the
Permitted Exceptions (defined in paragraph 7(a)(v) above). All standard title
policy exceptions shall be deleted. The policy shall insure marketable title.
(b) The agent for the title insurance company shall be in
attendance at the closing and be in a position to issue the title policy upon
recording the appropriate documents and insure that Transferor has complied with
all requirements set forth under applicable law to extinguish any right of
purchase or rescission in favor of any tenants or homeowners association, if
any, upon the execution and delivery of the statutory affidavit to be executed
by Transferor and to insure the Real Property free and clear of all exceptions
to title other matters not objected to by Transferee.
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9. SURVEY. Transferee has at its expense obtained a current survey
of the Real Property.
10. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND INDEMNITIES. The
representations and warranties of Transferor contained in this Agreement shall
be true and correct on the Closing Date. Transferor, by having closed the
transfer and contribution provided for in this Agreement, shall be deemed
conclusively to have certified that as of the Closing Date all such
representations and warranties were true and correct on the Closing Date.
11. CLOSING. The transfer and contribution contemplated by this
Agreement shall be closed effective as of February 27, 1998 and consummated on
or before February 28, 1998 (the "Closing Date"). Closing shall be at the
offices of Transferee's counsel or, at Transferee's option, may be effected
through the mail as coordinated by counsel for Transferor and Transferee. The
closing shall be at 10:00 A.M. on the Closing Date unless otherwise agreed by
the parties or their counsel. At the closing, Transferor and, as applicable,
Transferee shall execute and deliver the following documents in form acceptable
to Transferee and/or undertake the following:
(a) All corporate and/or partnership certifications,
resolutions and approvals necessary to evidence both the Transferor's and
Transferee's authority to enter into and consummate the transactions
contemplated by this Agreement.
(b) Special Warranty Deed from Transferor to Transferee
conveying title to the Real Property to Transferee free and clear of all liens,
encumbrances and matters other than the Permitted Exceptions.
(c) ▇▇▇▇ of Sale (in form and content acceptable to both
parties) from Transferor to Transferee transferring the Personal Property free
and clear of all liens and encumbrances together with the original Motor Vehicle
Certificate of Title (properly endorsed and lien free) for each mobile home unit
and motor vehicle to be contributed in accordance with this Agreement In the
event Transferor does not have the original Motor Vehicle Certificate of Title
(or Manufacturer's Statement of Origin ("MSO")) at closing, Transferor covenants
and agrees to deliver to Transferee the original Motor Vehicle Certificate of
Title (or MSO), properly endorsed and lien free, within thirty (30) days after
the Closing Date.
(d) Affidavit of No Liens by Transferor.
(e) Gap Affidavit by Transferor.
(f) Affidavit of Non-Foreign Status by Transferor.
(g) Affidavit of Compliance by Transferor attesting that
Transferor has complied with all applicable provisions of Pennsylvania and
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Federal laws and regulations relating to mobile home park communities.
(h) Certified rent roll dated and accurate as of the Closing
Date and certified by Transferor to Transferee.
(i) Assignment from Transferor to Transferee assigning all of
Transferor's right, title and interest, to the extent it exists and without
representation or warranty, in and to the name by which the Property is commonly
known, and in all authorizations, permits, and licenses relating to the
operation of the Property which are assignable by Transferor, if any, and all
Leases, Service Contracts and other items required to be assigned as set forth
in this Agreement free and clear of all liens and encumbrances except for the
Permitted Exceptions; all of which shall be assumed by Transferee effective from
and after the Closing Date. Transferor shall undertake all action, and execute
all forms, required by all governmental authorities and contract vendors to
effect this assignment.
(j) Assignment by Transferor, to the extent they exist and
without representation or warranty, of all currently existing and effective
claims, guaranties, warranties, indemnifications and all other rights, if any,
which Transferor may have against suppliers, laborers, materialmen, contractors,
or sub-contractors arising out of or in connection with the installation,
construction and maintenance of the Property; all of which shall be assumed by
Transferee effective from and after the Closing Date.
(k) Assignment by Transferor, to the extent they exist to
Transferee of all agreements and rights, if any, which Transferor has for access
and utilities to service the Property (but not utility deposits); all of which
shall be assumed by Transferee effective from and after the Closing Date.
(l) Transferor covenants and agrees to transfer, or cause to
be transferred, to Transferee or to Transferee's designee, at closing or within
sixty (60) days after closing, the Motor Vehicle Dealer Licenses utilized in
connection with the Property.
(m) Closing Statement by Transferor and Transferee.
(n) Such other documents as are reasonably necessary to close
and consummate the transfer and contribution contemplated by this Agreement.
(o) Transferor shall deliver and assign to Transferee all
existing plans and specifications, marketing, engineering, architectural, and
environmental reports, site plans and advertising brochures relating to the
improvements located upon the Property which are in Transferor's possession or
reasonably accessible to Transferor.
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(p) Transferor shall deliver and assign to Transferee all of
Transferor's right, title and interest, if any, in and to all licenses,
approvals, permits, certificates of occupancy, impact fee credits, mobile home
titles (for Transferor owned mobile home units, if any) and such other
comparable certificates or documents issued by the appropriate governmental
authorities with respect to the Property or any part thereof which are legally
assignable by Transferor, if any.
(q) Transferee shall deliver the AIOP Units.
12. CLOSING COSTS. Transferor shall pay for the cost of any corrective
documents required for marketable and insurable title and the recording of the
Warranty Deed, and one-half (1/2) of the state transfer tax on the Warranty
Deed. Transferee shall pay for the survey, title commitment, title policy,
one-half (1/2) of the state transfer tax on the Warranty Deed, and any
environmental audits and other studies ordered by Transferee. Each party shall
bear its own attorneys' fees and other professional costs, except as otherwise
provided for herein.
13. PRORATIONS. Except as otherwise set forth in this Agreement
regardless of the actual Closing Date, all taxes and other operating expenses
and revenue of the Property shall be prorated as of February 28, 1998 at
midnight. Taxes shall be prorated based upon the current year's tax taking into
account the maximum available discount. If the closing takes place and the
current year's taxes are not fixed and the current year's assessment is
available, taxes shall be prorated based upon such assessment and the prior
year's millage. If the current year's assessment is not available, then taxes
shall be prorated on the prior year's tax taking into account the maximum
available discount. In the event the tax proration is incorrect on the Closing
Date because the property is reassessed for the tax year 1998 by Bucks County
subsequent to the Closing Date, Transferee or Transferor shall be entitled, as
the case may be, to a reproration of such taxes upon written request made to the
other party. Transferor or Transferee shall remit the reproration adjustment
amount requested within thirty (30) days of request therefor. In the event
Transferor or Transferee fails to remit the reproration amount requested within
said thirty (30) day period, the party seeking reimbursement shall be entitled
to all costs of collection, including all attorneys' fees and costs incurred in
collection thereof and the amount owing shall bear interest at the rate of
fifteen percent (15%) until paid, it being acknowledged that this right shall
survive closing and delivery of the Deed. Certified, ratified and confirmed
special assessments shall be paid by Transferor. Special assessment liens
pending as of the Closing Date shall be assumed by Transferee. Any rents
received by Transferor in respect of the period after the Closing Date shall be
promptly remitted to Transferee. With regard to delinquent rents, if any,
Transferee shall not be held responsible for and Transferee shall not be
required to institute any proceedings whatsoever to collect such delinquent
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rents. All rents collected by Transferee during the first ninety (90) days after
closing shall be first applied to current rents due and then to any delinquency.
This obligation to remit shall survive the Closing and delivery of the Deed for
a period of ninety (90) days. Transferor shall deliver to Transferee at the
closing copies of such statements, invoices, bills and receipts as shall be
requested by Transferee to enable Transferee to verify the accuracy of the
amounts of any prorations made pursuant to this paragraph. Transferee shall be
credited at closing with all advance rentals and tenant security deposits
previously paid to Transferor (unless Transferor elects to deliver to Transferee
at Closing, by wire transfer of immediately available funds, a sum of money
equal to the security deposits paid to Transferor by tenants of the Property, in
which event there shall be no credit for security deposits). All prorations
shall be made so that Transferor has the benefit of all income and the burden of
all expenses up to and including February 28, 1998 and Transferee has the
benefit of all income and the burden of all expenses after February 28, 1998.
14. PERSONAL PROPERTY. Transferor represents that it is the owner of
all of the Personal Property free and clear of any and all liens and
encumbrances other than the Permitted Exceptions. Transferor agrees that it
shall not remove from the Real Property any of the Personal Property currently
used or useful in connection with the operation of the Real Property as a rental
mobile home community except as may be required in the ordinary course of
business for repair or replacement; any such replacement of an item of Personal
Property pending Closing hereunder to be with a similar item or items of
Personal Property of equal quality and quantity and free and clear of any liens
and encumbrances other than mortgages, security agreements and financing
statements to be released or satisfied of record at or prior to Closing
hereunder.
15. CONDEMNATION. If, prior to closing, all or any part of the Real
Property is taken by any governmental authority under its power of eminent
domain, Transferee shall have the option, to be exercised within ten (10) days
after Transferee receives written notice from Transferor of same:
(a) To take title to the Property at closing without any
abatement or adjustment in the Contribution Value, in which event Transferor
shall unconditionally assign its rights in the condemnation award to Transferee
(or Transferee shall receive the condemnation award from Transferor if it has
already been paid to Transferor prior to closing); or
(b) To terminate this Agreement, whereupon the duties and
obligations of each of the parties hereto shall end and Transferee shall be
entitled to the prompt return from Escrow Agent of the ▇▇▇▇▇▇▇ Money Deposit and
all interest earned thereon.
15
16. RISK OF LOSS. Risk of loss by damage or destruction to the Property
prior to closing shall be borne by Transferor. In the event of substantial
damage (i.e. in an amount in excess of $100,000.00) to said Property prior to
the closing by fire or other casualty:
(a) Transferor shall give prompt notice of such damage to
Transferee;
(b) Transferor shall furnish Transferee promptly with an
estimate of the cost of the restoration, replacement or repair of such damage;
and
(c) Transferee shall have the option to:
(i) terminate this Agreement and obtain the prompt
return from Escrow Agent of its ▇▇▇▇▇▇▇ Money Deposit and all interest earned
thereon; or
(ii) take title to the Property at closing without
any abatement or adjustment in the Contribution Value, in which event Transferor
shall unconditionally assign its rights in any insurance proceeds to Transferee
(or Transferee shall receive the insurance proceeds paid to Transferor if they
have already been paid prior to closing), together with payment from Transferor
to Transferee of the amount of the deductible under any of Transferor's
insurance policies.
17. ASSIGNMENT OF NAME. At closing, Transferor shall assign to
Transferee, without limitation, all of its right, title and interest in the name
by which the Property is commonly known hereinbefore referred to.
18. SUPPLIES. Inventories of supplies, including but not limited to
paint, toilet tissue, soap, paper towels and all cleaning materials, if any
located on the Real Property on the Closing Date shall be transferred to
Transferee at no additional cost at the time of closing and shall be covered by
the ▇▇▇▇ of Sale.
19. INDEMNITY. Transferor agrees to indemnify and hold Transferee
harmless of and from all loss, cost, damage and expense of every kind, including
reasonable attorneys' fees, which Transferee shall sustain or become liable for
resulting from (a) breach of any covenant, representation or warranty contained
in this Agreement; or (b) Transferor's ownership of the Property. Transferee
agrees to indemnify and hold Transferor harmless of and from all loss, cost,
damage and expense of every kind, including reasonable attorneys' fees, which
Transferor shall sustain or become liable for resulting from Transferee's
ownership of the Property from and after the Closing Date. The foregoing
indemnity and all other indemnities contained in this Agreement shall survive
closing.
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20. DEFAULT BY TRANSFEROR. If, under the provisions of this Agreement,
Transferor shall be obligated to transfer and contribute the Property but fails
to do so within the applicable period provided for closing and such default
continues for a period of fifteen (15) days after written notice thereof from
Transferee to Transferor, or shall otherwise fail to perform any of the other
obligations of Transferor hereunder within the required time period, Transferee
shall have the option, to be exercised in its sole discretion, to: (a) apply to
the Circuit Court of the County where the Real Property is located to seek to
have specific performance under this Agreement and in such action shall have the
right to recover damages suffered by Transferee by reason of the delay in
Transferee's acquisition of the Property; or (b) ▇▇▇ Transferor for damages
sustained by Transferee by reason of the default of Transferor; or (c) obtain
the prompt return from Escrow Agent of the ▇▇▇▇▇▇▇ Money Deposit, with interest,
together with any other amounts due and owing to Transferee pursuant to the
terms of this Agreement, and thereafter terminate this Agreement.
21. DEFAULT BY TRANSFEREE. If, under the provisions of this Agreement,
Transferee shall be obligated to accept the transfer and contribution of the
Property but fails to do so within the applicable period provided for closing,
and such default continues for a period of fifteen (15) days after written
notice thereof from Transferor to Transferee, Transferor's sole right and
exclusive remedy against Transferee shall be to obtain the ▇▇▇▇▇▇▇ Money Deposit
(a) as consideration for the execution of this Agreement; (b) as agreed on
liquidated damages sustained by Transferor because of such default by Transferee
(the parties hereto agreeing that the retention of such funds shall not be
deemed a penalty, and recognizing the impossibility of precisely ascertaining
the amount of damages to Transferor because of such default and hereby declaring
and agreeing that the sum so retained is and represents the reasonable damages
of Transferor); (c) in full settlement of any claims of damages and in lieu of a
specific performance by Transferor against Transferee; and (d) in consideration
for the full and absolute release of Transferee by Transferor of any and all
further obligations under this Agreement. In the event Transferee defaults
hereunder, Transferee shall forthwith on demand by Transferor return to
Transferor all title papers and other documents relating to the Property,
including Transferee's copy of this Agreement.
22. INTENTIONALLY OMITTED.
23. BROKER'S COMMISSION. Transferor and Transferee each warrant that
there are no real estate or other brokers involved in this transaction and each
party shall indemnify and hold harmless the other party from all claims or
damages for any brokerage commissions and/or fees being claimed arising out of
this transaction resulting from the actions of the defaulting party.
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24. ASSIGNMENT. Transferee shall have the right to assign this
Agreement without the prior written consent of Transferor to a single asset
entity owned or controlled by Asset Investors Operating Partnership, L.P., a
Delaware limited partnership ("AIOP"). In the event of an assignment to an
entity owned or controlled by AIOP, Transferee shall have no further liability
or responsibility under this Agreement.
25. SURVIVAL OF AGREEMENT. The terms and conditions of this Agreement
which expressly so state shall survive the closing hereof.
26. TIME IS OF THE ESSENCE. Transferor and Transferee acknowledge that
time is of the essence of this Agreement.
27. MODIFICATIONS. The parties acknowledge that this Agreement is the
entire agreement between the parties with respect to the subject matter hereof
and that this Agreement cannot be modified without a written agreement executed
by both parties.
28. ATTORNEYS' FEES. In the event of any litigation between the parties
arising out of this Agreement, or the collection of any funds due Transferee or
Transferor pursuant to this Agreement, the prevailing party shall be entitled to
recover all costs incurred and reasonable attorneys' fees and expenses incurred.
As used herein and throughout this Agreement, the term "attorneys' fees" shall
be deemed to include all fees incurred whether by attorneys, paralegals, legal
assistants or law clerks whether in pretrial, trial, appeal, bankruptcy,
collection or declaratory proceedings. The provisions of this paragraph shall
survive closing and delivery of the deed.
29. ESCROW AGENT. The sole responsibility of the Escrow Agent shall be
to deposit the ▇▇▇▇▇▇▇ Money Deposit in an account and documents necessary to do
so and to disburse said funds according to the terms of this Agreement. In the
event of a breach of this Agreement by either Transferor or Transferee, or if,
in the sole discretion of the Escrow Agent, some doubt exists as to when, to
whom or under what circumstances such ▇▇▇▇▇▇▇ Money Deposit shall be disbursed
hereunder, and the parties hereto are unable after ten (10) days' prior written
notice thereof from Escrow Agent to agree and direct Escrow Agent, in writing,
as to when, to whom or under what circumstances Escrow Agent shall disburse the
same, Escrow Agent shall be entitled to interplead said ▇▇▇▇▇▇▇ Money Deposit
into the Circuit Court of Atlanta, Georgia, without further liability or
responsibility on its part. Costs, expenses and attorneys' fees incurred by
Escrow Agent in connection with any such interpleader may be deducted by Escrow
Agent from the amount of the ▇▇▇▇▇▇▇ Money Deposit prior to its deposit into the
registry of the Court. In any event, however, all parties agree that Escrow
Agent shall have no liability or any further responsibility to any party or
person whomsoever for any disbursement of the ▇▇▇▇▇▇▇ Money Deposit made by
Escrow Agent in good faith unless such disbursement shall constitute a willful
breach of the duties and obligations of Escrow Agent under this Agreement or
18
gross negligence on the part of Escrow Agent. The interest received on the
▇▇▇▇▇▇▇ Money Deposit shall be applied to the account of Transferee at closing.
The Escrow Agent has executed the receipt attached to this Agreement to confirm
that the Escrow Agent is holding and will hold and disburse funds paid in
respect of the Contribution Value in escrow pursuant to the provisions of this
Agreement and as directed by the parties in the Settlement (Closing) Statement.
30. NOTICE. Any notice, request, instruction or demand to be given
hereunder shall be given as follows:
If to the Transferor:
To: Salem Farm Mobile Home Park, Inc.,
a Pennsylvania corporation
Address: c/o Brandywine Real Estate
Management Service Corporation
▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to attorney for Transferor:
To: Stradley, Ronan, ▇▇▇▇▇▇▇ & Young, LLP
Address: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Transferee:
To: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Assistant Vice President
Address: Asset Investors Operations Partnership, L.P.
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
With copies to attorney for Transferee:
To: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esquire
Address: Annis, Mitchell, Cockey, Edwards,
and Roehn, P.A.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
19
If to the Escrow Agent:
Escrow
Agent: Chicago Title Insurance Company
Address: ▇▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
31. NO ASSUMPTION OF LIABILITIES. The parties acknowledge that this
transaction contemplates only the transfer and contribution of the Property and
that the Transferor is not selling a business nor do the parties intend that
Transferee be deemed a successor of Transferor with respect to any liabilities
of Transferor to any third parties. Accordingly, in addition to the other terms
and conditions of this Agreement, Transferee shall neither assume nor be liable
for any payments and benefits to past and/or present employees of Transferor in
connection with the business being conducted on or from the Property as may have
accrued through the Closing Date, including, but not limited to, salaries,
wages, commission, bonuses, vacation pay, health and welfare contributions,
pensions, profit sharing, severance or termination pay, taxes or any other form
of compensation or fringe benefit.
32. CONSTRUCTION. This Agreement has been negotiated between the
parties, each of whom have been represented by counsel. Accordingly, this
Agreement shall not be construed against either party as the drafter of the
Agreement in the event of any litigation with respect to it.
33. INTENTIONALLY OMITTED.
34. VENUE. Venue for any legal proceeding hereunder shall be in Bucks
County, Pennsylvania, except with respect to an interpleader action pursuant to
paragraph 29 hereunder which the parties acknowledge shall be instituted in
Atlanta, Georgia, pursuant to said paragraph.
35. WAIVER OF JURY TRIAL. Transferor and Transferee knowingly,
voluntarily and intentionally waive any right to trial by jury in respect to any
litigation arising out of, under or in connection with this Agreement or the
transaction described herein.
36. EFFECTIVE DATE. Unless otherwise set forth herein, the Effective
Date shall be the date on which the later of Transferor and Transferee executes
this Agreement, as evidenced by the date inserted below the signature block.
20
37. PARTIAL INVALIDITY. If any term or provision of this Agreement
shall be held illegal, unenforceable or inoperative as a matter of law, the
remaining terms and provisions of this Agreement shall not be affected thereby,
but each such term and provision shall be valid and shall remain in full force
and effect.
38. COUNTERPART EXECUTION. This Agreement may be executed in several
counterparts, each of which shall be fully effective as an original and all of
which together shall constitute one and the same instrument.
39. FACSIMILE. A facsimile of this Agreement or any portion hereof,
including the signature page of any party, shall be deemed an original for all
purposes.
40. SEC AND IRC. Transferor agrees to cooperate with Transferee prior
to and after Closing in providing such information as is required by the
Internal Revenue Code and by the regulations of the Securities and Exchange
Commission.
41. TAX OPINION. Transferor's obligation to sell the Property to
Transferee in accordance with this Agreement is contingent upon Transferor
receiving an opinion from Stradley, Ronon, ▇▇▇▇▇▇▇ & ▇▇▇▇▇, LLP confirming that
this transaction will qualify as a tax-free exchange.
42. GUARANTY OF DEBT. Notwithstanding anything herein to the contrary,
Transferor, agrees that it shall guaranty the existing debt of Transferee in
such amounts and upon such terms and conditions as shall be mutually agreeable
to Transferee and Transferor, so that the transaction described in this
Agreement shall qualify as a tax-free exchange. The Transferor's guaranty of
debt shall be a last recourse guaranty (e.g., the lender shall be required to
exhaust all other recourse before exercising its remedies under the guaranty of
The Transferor).
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals the day and year indicated below.
WITNESSES: SALEM FARM MOBILE HOME PARK, INC.,
a Pennsylvania corporation
________________________ By:________________________________
Print Name:_____________ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
President
------------------------
Print Name:_____________
"Transferor"
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ASSET INVESTORS OPERATING
PARTNERSHIP, L.P.,
a Delaware limited partnership
By: Asset Investors Corporation,
a Maryland corporation
authorized to transact business
as Asset Investors Corporation
of Maryland, General Partner
By:_______________________________
Name:__________________________
Title:_________________________
As to Transferee "Transferee"
6374-011-0481745.05
22
EXHIBITS TO AGREEMENT
A. Legal Description
B. Schedule of Personal Property
C. Permitted Exceptions
D. Service Contracts
E. Description of Additional Land
F. Investor Questionnaire
G. Description of benefits of AIOP Units
H. Indemnity Letter re ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ vs. Salem
Farm Mobile Home Park, Inc.
23