FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the Quarter Ended Commission File Number
June 30, 1996 2-65391
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP
(Exact Name of Registrant as specified in its Charter)
Delaware 16-1173249
- -------------------- ---------------------------------
(State of Formation) (IRS Employer Identification No.)
2350 North Forest Road
Suite 12-A
Getzville, New York 14068
(Address of Principal Executive Office)
Registrant's Telephone Number: (716) 636-0280
Indicate by a check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
---- ----
Indicate by a check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in part III of this Form 10-Q or any
amendment to this Form 10-Q. (X)
As of June 30, 1996, the issuer had 3,100 units of limited partnership interest
outstanding.
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP
-----------------------------------------------
INDEX
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PAGE NO.
--------
PART I: FINANCIAL INFORMATION
- ------- ---------------------
Balance Sheets -
June 30, 1996 and December 31, 1995 3
Statements of Operations -
Three Months Ended June 30, 1996 and 1995 4
Statements of Operations -
Six Months Ended June 30, 1996 and 1995 5
Statements of Cash Flows -
Six Months Ended June 30, 1996 and 1995 6
Statements of Partners' (Deficit) -
Six Months Ended June 30, 1996 and 1995 7
Notes to Financial Statements 8 - 14
PART II: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
- -------- FINANCIAL CONDITION AND RESULTS OF OPERATIONS 15 - 16
---------------------------------------------
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<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP
BALANCE SHEETS
June 30, 1996 and December 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
---- ----
<S> <C> <C>
ASSETS
- ------
Property, at cost:
Land $ 182,500 $ 182,500
Land improvements 185,000 185,000
Buildings 2,404,785 2,404,785
Furniture and fixtures 164,141 164,141
----------- -----------
2,936,426 2,936,426
Less accumulated depreciation 1,743,850 1,683,705
----------- -----------
Property, net 1,192,576 1,252,721
Cash -- --
Cash - security deposits 28,129 27,851
Escrow deposits 297,791 277,523
Mortgage costs, net of accumulated
amortization of $23,923 and $21,052 177,028 179,899
Other assets 1,682 19,451
----------- -----------
Total Assets $ 1,697,206 $ 1,757,445
=========== ===========
LIABILITIES AND PARTNERS' (DEFICIT)
- -----------------------------------
Liabilities:
Cash overdraft $ 176,299 $ 82,399
Mortgages payable 2,939,184 2,947,711
Accounts payable and accrued expenses 193,140 178,445
Accounts payable - affiliates 840,683 874,484
Accrued interest 22,044 22,108
Security deposits and prepaid rent 49,665 42,710
----------- -----------
Total Liabilities 4,221,015 4,147,857
----------- -----------
Minority interest in consolidated
joint venture 348,606 393,817
----------- -----------
Partners' (Deficit):
General partners (791,218) (790,336)
Limited partners (2,081,197) (1,993,893)
----------- -----------
Total Partners' (Deficit) (2,872,415) (2,784,229)
----------- -----------
Total Liabilities and Partners' (Deficit) $ 1,697,206 $ 1,757,445
=========== ===========
</TABLE>
See notes to financial statements
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<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
Three Months Ended June 30, 1996 and 1995
(Unaudited)
Three Months Three Months
Ended Ended
June 30, June 30,
1996 1995
---- ----
Income:
Rental $ 166,372 $ 179,782
Interest and other income 11,976 12,651
--------- ---------
Total income 178,348 192,433
--------- ---------
Expenses:
Property operations 71,228 114,117
Interest:
Paid to affiliates 20,274 19,232
Other 66,143 66,567
Depreciation and amortization 31,508 30,594
Administrative:
Paid to affiliates 11,792 15,627
Other 28,089 35,106
--------- ---------
Total expenses 229,034 281,243
--------- ---------
Loss before allocation
to minority interest (50,686) (88,810)
Loss allocated to minority interest 26,936 23,917
--------- ---------
Net loss $ (23,750) $ (64,893)
========= =========
Loss per limited partnership unit $ (7.58) $ (20.72)
========= =========
Distributions per limited partnership unit $ -- $ --
========= =========
Weighted average number of
limited partnership units
outstanding 3,100 3,100
========= =========
See notes to financial statements
-4-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
Six Months Ended June 30, 1996 and 1995
(Unaudited)
Six Months Six Months
Ended Ended
June 30, June 30,
1996 1995
---- ----
Income:
Rental $ 343,689 $ 355,340
Interest and other income 19,919 22,677
--------- ---------
Total income 363,608 378,017
--------- ---------
Expenses:
Property operations 156,223 210,175
Interest:
Paid to affiliates 43,267 38,892
Other 132,425 133,220
Depreciation and amortization 63,015 61,402
Administrative:
Paid to affiliates 21,857 20,901
Other 80,218 56,887
--------- ---------
Total expenses 497,005 521,477
--------- ---------
Loss before allocation
to minority interest (133,397) (143,460)
Loss allocated to minority interest 45,211 39,991
--------- ---------
Net loss $ (88,186) $(103,469)
========= =========
Loss per limited partnership unit $ (28.16) $ (33.04)
========= =========
Distributions per limited partnership unit $ -- $ --
========= =========
Weighted average number of
limited partnership units
outstanding 3,100 3,100
========= =========
See notes to financial statements
-5-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
Six Months Ended June 30, 1996 and 1995
(Unaudited)
Six Months Six Months
Ended Ended
June 30, June 30,
1996 1995
---- ----
Cash flow from operating activities:
Net loss $ (88,186) $(103,469)
Adjustments to reconcile net loss to net cash
(used in) operating activities:
Depreciation and amortization 63,015 61,402
Minority interest share of net loss (45,211) (39,991)
Changes in operating assets and liabilities:
Cash - security deposits (278) (280)
Escrow deposits (20,268) (887)
Other assets 17,769 (1,586)
Accounts payable and accrued expenses 14,696 33,356
Accrued interest (64) --
Security deposits and prepaid rent 6,955 1,785
--------- ---------
Net cash (used in) operating activities (51,572) (49,670)
--------- ---------
Cash flow from investing activities:
Property additions and net cash
provided by investing activities -- --
--------- ---------
Cash flows from financing activities:
Cash overdraft 93,900 5,577
Accounts payable - affiliates (33,801) 48,158
Principal payments on mortgage(s) (8,527) (7,795)
Mortgage costs -- 2,656
--------- ---------
Net cash provided by financing activities 51,572 48,596
--------- ---------
Increase (decrease) in cash -- (1,074)
Cash - beginning of period -- 1,074
--------- ---------
Cash - end of period $ -- $ --
========= =========
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 132,361 $ 133,220
========= =========
See notes to financial statements
-6-
<PAGE>
STATEMENTS OF PARTNERS' (DEFICIT)
Six Months Ended June 30, 1996 and 1995
(Unaudited)
General Limited Partners
Partners
Amount Units Amount
------ ----- ------
Balance, January 1, 1995 $ (788,062) 3,100 $(1,768,771)
Net loss (1,035) -- (102,434)
----------- ----------- -----------
Balance, June 30, 1995 $ (789,097) 3,100 $(1,871,205)
=========== =========== ===========
Balance, January 1, 1996 $ (790,336) 3,100 $(1,993,893)
Net loss (882) -- (87,304)
----------- ----------- -----------
Balance, June 30, 1996 $ (791,218) 3,100 $(2,081,197)
=========== =========== ===========
See notes to financial statements
-7-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
Six Months Ended June 30, 1996 and 1995
(Unaudited)
1. GENERAL PARTNER'S DISCLOSURE
In the opinion of the General Partners of Realmark Property Investors
Limited Partnership, all adjustments necessary for the fair presentation of
the Partnership's financial position, results of operations, and changes in
cash flows for the six months ended June 30, 1996 and 1995 have been made
in the financial statements. The financial statements are unaudited and
subject to any year-end adjustments which may be necessary.
2. FORMATION AND OPERATION OF PARTNERSHIP
Realmark Property Investors Limited Partnership (the "Partnership"), a
Delaware Limited Partnership, was formed August 28, 1979, to invest in a
diversified portfolio of income-producing real estate.
In March 1981, the Partnership commenced the public offering of units of
limited partnership interest. On December 31, 1981 the offering was
concluded, at which time 3,100 units of limited partnership interest were
outstanding. The General Partners are Realmark Properties, Inc., a Delaware
corporation, the corporate General Partner, and Mr. Joseph M. Jayson, the
individual General Partner. Joseph M. Jayson is the sole shareholder of
J.M. Jayson & Company, Inc. Realmark Properties, Inc. is a wholly-owned
subsidiary of J.M. Jayson & Company, Inc.
Under the Partnership agreement, the General Partners and affiliates can
receive compensation for services rendered and reimbursement for expenses
incurred on behalf of the Partnership. The Partnership agreement provides
for taxable income or loss of the Partnership to be allocated 99% to the
limited partners and 1% to the general partners. Through December 31, 1986,
and for 1991, taxable income or loss was allocated in accordance with this
provision. For the years 1987 through 1990, 1992, 1993, 1994 and 1995, the
Partnership was required to allocate losses in accordance with Internal
Revenue Section 704(b). In general, Section 704(b) may be applicable when
Partnership capital is negative and limited partners are not required to
restore negative capital accounts. In such instances, the IRS code requires
that the general partners bear a greater portion of the economic loss than
that which would be allocated pursuant to the partnership agreement and,
therefore, the loss must be reallocated. For the six month period ended
June 30, 1996, Section 704(b) was applicable.
-8-
<PAGE>
FORMATION AND OPERATION OF PARTNERSHIP (CONTINUED)
Losses arising from the sale of properties shall be allocated 99% to the
Limited Partners and 1% to the General Partners subject to the revisions
made in the Internal Revenue Code, pursuant to the Tax Reform Act of 1986.
Net proceeds arising from a sale or refinancing shall be distributed first
to the Limited Partners in an amount equivalent to a 7% return on their
average adjusted capital balances, plus an amount equal to their respective
positive capital account balances.
Additional proceeds after property disposition fees shall be allocated to
the Limited Partners in an amount equivalent to 5% of their average
adjusted capital balances and the remainder, if any, in the ratio of 90% to
the Limited Partners and 10% to the General Partners. Income arising from
the sale or refinancing shall be allocated in the same manner as the
proceeds are to be distributed, except that the General Partners are to be
allocated at least 1% of the income.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash
----
For purposes of reporting cash flows, cash includes the following items:
cash on hand; cash in checking; and money market savings.
Cash - security deposits
------------------------
Cash - security deposits represents cash on deposit in accordance with the
HUD regulatory agreement for the one property with a HUD mortgage.
Escrow deposits
---------------
Escrow deposits represent cash which is restricted for the payment of
property taxes or for repairs and replacements in accordance with the
mortgage agreement.
Property and depreciation
-------------------------
Depreciation is provided using the straight-line method over the estimated
useful lives of the respective assets. Expenditures for maintenance and
repairs are expensed as incurred, and major renewals and betterments are
capitalized. The Accelerated Cost Recovery System is used to calculate
depreciation expense for tax purposes.
-9-
<PAGE>
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Minority interest in consolidated joint venture
-----------------------------------------------
The minority interest in a consolidated joint venture is stated at the
amount of capital contributed by the minority investor adjusted for its
share of joint venture losses.
Rental income
-------------
Rental income is recognized under the operating method. The outstanding
leases with respect to rental properties owned are for terms of no more
than one year.
Income (loss) per limited partnership unit
------------------------------------------
The income or loss per limited partnership unit is based on the weighted
average number of limited partnership units outstanding during the period
then ended.
4. ACQUISITION AND DISPOSITION OF RENTAL PROPERTY
In November 1981, the Partnership acquired a 144 unit apartment complex
(Gold Key I) located in Englewood, Ohio, for a purchase price of
$2,860,754, which included $191,872 in acquisition fees.
In July 1982 , the Partnership acquired a 99 unit apartment complex
(Clarewood) located in Lafayette, Louisiana, for a purchase price of
$2,428,834, which included $134,992 in acquisition fees.
In July 1982, the Partnership acquired a 155 unit apartment complex
(Gallery) located in Lafayette, Louisiana, for a purchase price of
$3,546,653, which included $197,987 in acquisition fees.
In October 1989, the Partnership sold the Clarewood and Gallery apartments
for a combined price of $4,647,516, which generated a total net gain for
financial statement purposes of $1,209,164.
-10-
<PAGE>
5. MORTGAGES PAYABLE
Gold Key Apartments
-------------------
On May 5, 1992, the Partnership's first and second mortgages on the Gold
Key apartment complex were refinanced with a 9% U.S. Department of Housing
and Urban Development (HUD) guaranteed mortgage in the amount of $2,997,800
due June 1, 2027. The mortgage provides for monthly principal and interest
payments of $23,503, plus monthly escrow deposits for real estate taxes,
insurance and repairs and maintenance totaling $11,346. The balance of the
mortgage at June 30, 1996 and 1995 was $2,939,184 and $2,955,864,
respectively. The mortgage is secured by all of the assets of the Gold Key
apartment complex.
The mortgage is subject to a HUD regulatory agreement which, among other
things, places restrictions on the uses and handling of cash and restricts
distributions to the property owner to amounts that are considered to be
surplus cash as defined in the agreement.
The maturity of the mortgage payable for each of the next five years and
thereafter is as follows:
Year Amount
---- ------
1996 $ 17,444
1997 19,080
1998 20,871
1999 22,829
2000 24,970
Thereafter 2,842,517
---------
TOTAL $ 2,947,711
===========
6. MINORITY INTEREST OF RELATED PARTY IN GOLD KEY JOINT VENTURE
On May 5, 1992, the Partnership entered into an agreement to form a joint
venture with Realmark Property Investors Limited Partnership VI-A (RPILP
VI-A). The joint venture was formed for the purpose of operating the Gold
Key Apartment complex owned by the Partnership. Under the terms of the
original agreement, RPILP VI-A contributed $497,911 with the Partnership
contributing the property net of the first mortgage. On March 1, 1993,
RPILP VI-A contributed an additional $125,239, amending the original joint
venture agreement in the process.
-11-
<PAGE>
MINORITY INTEREST OF RELATED PARTY IN GOLD KEY JOINT VENTURE (CONTINUED)
The amended agreement now provides that any income, loss, gain, cash flow,
or sale proceeds be allocated 60.0% to the Partnership and 40.0% to RPILP
VI-A. The net loss from the date of inception has been allocated to the
minority interest in accordance with the terms of the agreement and has
been recorded as a reduction of the capital contribution.
A reconciliation of the minority interest share in the Gold Key Joint
Venture is as follows:
Balance, January 1 $ 393,817
Capital contribution -
Allocated loss (45,211)
-----------
Balance, June 30, $ 348,606
===========
7. RELATED PARTY TRANSACTIONS
Management fees for the Gold Key complex are paid or accrued to an
affiliate of the General Partners. The management agreement provides for 5%
of gross monthly rental receipts of the complex to be paid as fees for
administering the operations of the property. These fees totaled $8,700 for
both the six months ended June 30, 1996 and 1995.
The general partner is also entitled to receive a Partnership management
fee equal to 9% of net cash flow (as defined in the partnership agreement),
2% of which is subordinated to the limited partners having received an
annual cash return equal to 7% of their adjusted capital contributions. No
such fee has been paid or accrued by the Partnership for the six months
ended June 30, 1996 and 1995.
Accounts payable - affiliates amounted to $840,683 and $842,225 at June 30,
1996 and 1995, respectively. The payable represents fees due and advances
from the General Partner. Interest charged on accounts payable - affiliates
totaled $43,267 for the six month period ended June 30, 1996.
Pursuant to the terms of the Partnership agreement, the corporate general
partner charged the Partnership for reimbursement of certain costs and
expenses incurred by the corporate general partner and its affiliates.
These charges were for the Partnership's allocated share of costs and
expenses such as payroll, travel and communication, costs related to
partnership accounting, and partner's communication and relations.
-12-
<PAGE>
RELATED PARTY TRANSACTIONS (CONTINUED)
Computer service charges for the Partnership are paid or accrued to an
affiliate of the General Partners. The fee is based upon the number of
apartment units and totaled $1,580 for the six month periods ended June 30,
1996 and 1995.
The corporate general partner is allowed to collect property disposition
fees upon the sale of acquired properties. This fee is not to exceed the
lesser of 9% of the gross proceeds of the offering applicable to the
property or 50% of normal rates, subordinated to: (1) the payment to the
limited partners of a cumulative annual return (not compounded) equal to 7%
of their average adjusted capital balances; (2) the repayment to the
limited partners of a cumulative amount equal to their capital
contributions; and (3) the payment to all partners of an amount equal to
their respective positive capital account balances to the extent such
balances exceed the amounts provided for in the preceding clauses (1) and
(2).
8. INCOME TAXES
No provision has been made for income taxes since the income or loss of the
Partnership is to be included in the tax returns of the individual
partners.
The tax returns of the Partnership are subject to examination by federal
and state taxing authorities. Under federal and state income tax laws,
regulations and rulings, certain types of transactions may be accorded
varying interpretations and, accordingly, reported Partnership amounts
could be changed as a result of any such examination.
The reconciliation of net loss for the six month periods ended June 30,
1996 and 1995 as reported in the statements of operations, and as would be
reported for tax purposes respectively, is as follows:
June 30, June 30,
1996 1995
---- ----
Net loss -
Statement of operations $ (88,186) $ (103,469)
(Add to) deduct from:
Difference in depreciation 19,548 ( 7,250)
Difference in amortization - 2,657
Difference in bad debt reserve 10,760 ( 192)
Tax adjustment - Joint Venture ( 2,998) 700
--------- ----------
Net loss for tax purposes $ (60,876) $ (107,554)
========= ==========
-13-
<PAGE>
INCOME TAXES (CONTINUED)
The reconciliation of partners' (deficit) at June 30, 1996 and December 31,
1995 as reported in the balance sheets, and as reported for tax purposes,
is as follows:
June 30, December 31,
1996
1995
Partners' (Deficit) - balance sheet $ (2,872,415) $ (2,784,229)
Add to (deduct from):
Accumulated difference in
depreciation ( 976,122) ( 995,670)
Accumulated amortization 240,000 240,000
Syndication fees 248,000 248,000
Reserve for bad debts 50,792 40,032
Tax Basis Adjustment
- Joint Venture (20,083) (17,085)
Other (14,080) (14,080)
------------ ------------
Partners' (Deficit) - tax return $ (3,343,908) $ (3,283,032)
============ ============
9. SUBSEQUENT EVENTS
On July 16, 1996 the Corporate General Partner entered into a contract on
behalf of the Partnership to sell the Gold Key Apartments for a sales price
of $3,700,000. The contract is subject to a number of contingencies as were
described in Form 8-K filed on July 31, 1996. No firm closing date on the
sale has been established to date.
-14-
<PAGE>
PART II: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
- -------------------------------
The Partnership continues to struggle financially. Although total expenses have
dropped during the six month period ended June 30, 1996, the partnership is
still operating with cash flow shortages due to a decrease in the total revenue
generated. The General Partner meanwhile, continues to advance funds to the
Partnership, although under no obligation to do so. There is no assurance that
the General Partner will continue to do so. The General Partner has advanced
$840,683, as of June 30, 1996, and these funds are payable on demand.
The Partnership did not make any distributions during the six month periods
ending June 30, 1996 and 1995, nor does it anticipate making any distributions
until the remaining property is sold and all Partnership obligations are
satisfied. The General Partner believes that unless there is a significant
increase in income and a major reduction in expenses, the property could be in
default concerning their mortgages. The General Partner has been corresponding
with the United States Department of Housing and Urban Development and the
mortgagor on the Gold Key property in order to obtain a release from the
replacement escrow reserve requirements in order to have more usable cash to
operate the property with. The General Partner has a signed contract for the
sale of the Gold Key property, although a firm closing date has not been
established. At this time it is highly unlikely that the Limited Partners will
receive any proceeds from the sale.
Results of Operations:
- ----------------------
For the quarter ended June 30, 1996, the Partnership's net loss was $23,750 or
$7.58 per limited partnership unit. Net loss for the quarter ended June 30,
1995, amounted to $64,983 or $20.72 per unit. For the six month period ended
June 30, 1996, the net loss was $88,186 or $28.16 per limited partnership unit
as compared to $103,469 or $33.04 per limited partnership unit for the six month
period ended June 30, 1995.
Partnership revenue for the quarter ended June 30, 1996 totaled $178,348, which
is a decrease of $14,085 from the quarter ended June 30, 1995. The change
between the two years is mostly attributable to a decrease in occupancy at Gold
Key. Partnership revenues for the quarter ended June 30, 1995 were $192,433.
Rental income decreased $13,410 between the two quarters. For the six month
period ended June 30, 1996, Partnership revenue totaled $363,608 as compared to
$378,017 for the same period in the previous year.
-15-
<PAGE>
Results of Operations (continued):
- -----------------------------------
For the three month period ended June 30, 1996, Partnership expenses totaled
$229,034, a decrease of just over $52,000 from the quarter ended June 30, 1995.
For the six month period ended June 30, 1996, a decrease of approximately
$24,500 was seen in expenses as compared to the same period in 1995. Decreases
in payroll, repairs, maintenance, and contracted services throughout the
partnership accounted for the change in operating expenses, while substantially
higher advertising, legal fees and portfolio management and accounting charges
resulted in higher administrative expenses. The increase in administrative
expenses was primarily due to activities undertaken to increase occupancies.
The Partnership is making every effort to control/maintain property operation
and administrative expenses in the immediate future, however additional
expenses, such as cleaning, painting, and carpeting costs related to preparing
units for new tenants, are likely to be incurred in an attempt to improve
occupancy. The property is also hoping to obtain the release of escrowed funds
for use in repairing several roofs.
For the six month period ended June 30, 1996, the tax basis loss was $60,876 or
$19.44 per limited partnership unit compared to a tax loss of $107,554 or $34.35
per unit for the six month period ended June 30, 1995.
-16-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP
-----------------------------------------------
PART II
-------
OTHER INFORMATION
-----------------
Item 1 - Legal Proceedings
- --------------------------
The Partnership is not a party to, nor are any of the Partnership's properties
subject to any material pending legal proceedings other than ordinary, routine
litigation incidental to the Partnership's business.
Items 2, 3, 4 and 5
- -------------------
Not applicable.
Item 6 - Exhibits and reports on Form 8-K
- -----------------------------------------
Item 7 (c) - Financial Statements and Exhibits - Contract between the
Partnership and Partnership Equities, Inc. dated July 16, 1996 attached.
Exhibit 27 - Financial Data Schedule (Electronic filing only)
Form 8-K was filed July 31, 1996.
-17-
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
REALMARK PROPERTY INVESTORS
LIMITED PARTNERSHIP
By: /s/Joseph M. Jayson January 2, 1997
------------------------------ ------------------------
Joseph M. Jayson, Date
Individual General Partner
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
By: REALMARK PROPERTIES, INC.
Corporate General Partner
/s/Joseph M. Jayson January 2, 1997
------------------------------ ------------------------
Joseph M. Jayson, Date
President and Director
/s/Michael J. Colmerauer January 2, 1997
------------------------------ ------------------------
Michael J. Colmerauer Date
Secretary
REAL ESTATE PURCHASE AGREEMENT
GOLD KEY APARTMENTS
This purchase agreement ("Agreement" or "Contract"), made and entered into
by and between Realmark Property Investors Limited Partnership, a Delaware
limited partnership ("Seller") and Partnership Equities, Inc. ("Buyer").
RECITALS:
A. Buyer desires to purchase from Seller, and Seller wishes to sell to
Buyer, a certain parcel of real property and all of the improvements and
buildings situated thereon, and the hereditaments and appurtenances thereto,
consisting of an apartment complex (the "Real Property"), and all personal
property, equipment, fixtures and intellectual property (excluding, however, any
use of the name "Realmark" or any related or similar name, it being understood
that only the right, title and interest of Seller to the name of the apartment
complex shall be transferred, and also excluding software not able to be
transferred vis a vis existing licensing agreements, if any) owned by Seller,
utilized in the operation or management of the apartment complex, and located at
said apartment complex as described on EXHIBIT B (collectively the "Personal
Property"). The Real Property together with the Personal Property applicable to
the apartment complex will be herein referred to as the "Property".
B. Attached hereto and made a part hereof is the legal description of the
Real Property, marked with the name of the apartment complex and attached as
EXHIBIT A. A more detailed list of the Personal Property will be prepared by
Seller and submitted during the first ten (10) days of the due diligence period
set forth in Section 3 below and will thereafter be attached to this Agreement
as an amendment to EXHIBIT B.
FOR AND IN CONSIDERATION of the mutual promises, covenants and agreements,
hereinafter set forth, the Parties agree as follows:
SECTION 1. PURCHASE PRICE.
(a) The purchase price to be paid Seller for the Real Property will
be $3,700,000.00 ("Purchase Price") paid in the following manner:
Initial Earnest Money Deposit
at signing of Purchase Agreement $10,000.00
Additional Earnest Money Deposit
after Due Diligence Period (as
defined herein). 50,000.00
<PAGE>
Cash at closing (subject to
credit for Earnest Money,
prorations and allocations per
Section 5) $ 3,640,000.00
--------------------
Total $ 3,700,000.00
and payable by Buyer on closing of title and delivery of the Deed ("Closing") by
wire transfer in immediately available good, federal funds. The Additional
Earnest Money Deposit shall be paid to the Escrow Agent within five (5) days
after the expiration of the Due Diligence Period.
(b) All existing debt, liens, impositions and similar encumbrances
affecting the Real Property will be discharged or, if annual liens, prorated in
accordance with Section 5 and paid at the Closing.
(c) The Initial Earnest Money in the amount stated in Section 1 (a)
above (the "Initial Earnest Money") will be deposited with Andrews, Sanchez,
Amigone, Mattrey & Marshall, LLP in Buffalo, New York, as Escrow Agent (the
"Escrow Agent"), within four (4) days from the date of Seller's execution (as
communicated to Buyer by written facsimile and orally by telephone on such date
of execution) of this Agreement. Within five (5) days after the end of the Due
Diligence Period (as hereinafter defined) Buyer will deposit an additional sum
of $50,000.00 as Additional Earnest Money (the "Additional Earnest Money") with
the Escrow Agent. The Initial Earnest Money and the Additional Earnest Money are
hereinafter collectively referred to as the "Earnest Money". Absent any contrary
provision of this Agreement, the total Earnest Money in the amount of $60,000.00
will remain on deposit with the Escrow Agent until the Closing of the Property.
If either of the Earnest Money deposits are not made by the dates as herein
above set forth, Seller may terminate this Agreement. Interest on the Earnest
Money shall follow the principal sum on any payment or refund. Interest payable
to Buyer shall be credited to Tax ID #31-0863929. Upon any permitted termination
of this Agreement by Buyer, the Earnest Money shall be returned to Buyer upon
demand, and in compliance with all other terms and provisions of this Agreement.
Notwithstanding the foregoing, the Initial Earnest Money shall be
non-refundable and released to Seller immediately on signing this Contract. An
additional $12,500.00 shall be non-refundable after Buyer's due diligence
expires unless Seller defaults.
SECTION 2. PLACE AND TIME OF CLOSING.
(a) Subject to the conditions precedent set forth herein having been
met or waived, the Closing will take place on or before 60 days after execution
of this Agreement by both parties, unless extended as otherwise set forth in
this Agreement. As used herein the terms "Closing" will mean the meeting of the
parties at which delivery of the Deed and payment of the Purchase Price as
called for in Section 1 occurs for the Real Property.
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(b) Buyer and Seller agree that they will use their best efforts to
complete the Closing within sixty (60) days from the execution of
this Agreement. Buyer agrees that it will use best efforts and good faith in
applying for a Bond Cap allocation and/or for financing for the Real Property
and will obtain same as soon as reasonably possible and will close on said Real
Property promptly thereafter. Notwithstanding the foregoing, and upon
satisfaction of all conditions precedent, Buyer shall complete the Closing by
October 20, 1996.
(c) This Agreement, as an offer to purchase when signed by Buyer,
shall automatically terminate if not accepted in final form by Seller by 5 P.M.,
Eastern Standard Time, five business days from the date on which Buyer executed
this Agreement as indicated below.
SECTION 3. CONTINGENCIES.
(a) DUE DILIGENCE. Buyer, or its designees, will have a period of thirty
(30) days after Seller's execution of this Agreement (the "Due Diligence
Period"), to enter the Property to make inspections, engineering tests, surveys,
and other such tests, examinations and inspections as Buyer may desire as long
as such tests, examinations, etc., do not unreasonably interfere with the
operations or any current use of the Property. All entry upon the Property and
any and all contact with on site employees of Seller by Buyer shall be upon
prior notice to Seller and, at Seller's option, accompanied by an agent of
Seller.
If the Closing of the Property does not occur, Buyer will make such
repairs as necessary to leave the Property in the same condition as prior to
entry by Buyer.
(i) During the Due Diligence Period, Buyer will inspect the Real
Property, and if any, the plans and specifications for design, quality,
structural and mechanical integrity and maintenance during the Due Diligence
Period. At the signing of this Agreement or within ten (10) days thereafter,
Seller shall provide or make available at designated locations, those
operational and title information items which relate to the Property, reasonably
requested by Buyer, including, but not limited to:
o Inventory of Personal Property
o Current Rent Roll - December 1995 or April 1996
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o 1994 & 1995 year-end Operating Statements
o Operating Statement for the year 1996 to date (as of 4/30/96)
o December 1995 Operating Statement and 1996 Operating Budget
(It is specifically understood that Operating Budgets are
projections of Seller only and Seller makes no warranty or
representation with respect to any parties' achievement of any
such items in said Budget.)
o Detailed breakdown of the Property's payroll account including
a list of on-site personnel, salary and benefits
o Copy of current ad valorem tax bills, copy of each separate
utility bill for the Property for the past 3 months and a
listing by month of utility charges for 1995
o As-built survey, construction drawings, soil report,
compaction tests, and copies of all Certificates of Occupancy,
if any of the foregoing are in Seller's possession
o Copies of all third-party contracts (e.g., termite, landscape,
pool maintenance, etc.)
o Copies of any environmental reports, engineering reports,
feasibility studies, or appraisals in Seller's possession
(obtained within the last 36 months, it being understood that
Seller makes no warranty or representation with respect to the
information set forth in any of said studies)
o Copies of the latest insurance policy covering the Project,
with current coverage and deductibles along with a paid
invoice for said policy(s) (the same may be within a master
policy)
o Name, firm name, and telephone number for the lawyer most
recently involved with the Project. (It is agreed that at this
time the foregoing shall be identified as William H. Mattrey,
Esq., of Andrews, Sanchez, Amigone, Mattrey & Marshall, LLP,
(716) 852-1300.)
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o Make available to Buyer all income information in Seller's
possession on all tenants currently leasing units in the
Property.
o Originals or copies of all tenant leases, rent rolls for the
Property, including security deposits held by Seller in
connection with each apartment unit, credit reports and other
information concerning the leases which are currently in
Seller's file, service agreements, party-wall agreements, and,
if in Seller's possession engineering or architectural reports
for the Properties.
o Proof of zoning classification, if any, in Seller's possession
o A list of all equipment leases and/or any financing documents
for personal property, equipment, etc., affecting the
apartment complex
o Any other items which a prudent buyer reasonably requests and
needs in order to conduct a satisfactory due diligence review.
All of the foregoing will either be at the Property location or at Seller's
offices in Amherst, New York, or at Seller's option, will be forwarded to Buyer.
Any documents not provided by Seller to Buyer within the ten (10) day period
will be made available by Seller, as soon as such documents are available. In
the event of any such failure to deliver any documents, except those which are
not in Seller's possession and which are so qualified hereinabove as excusable
items, the Due Diligence Period will be extended to a date no less than five (5)
days after delivery of the items not delivered within the Due Diligence Period.
All Due Diligence materials must be maintained by Buyer on a confidential basis
and returned to Seller if Buyer terminates this Agreement. Buyer agrees that it
will not use the Due Diligence materials for any purpose other than to determine
whether to acquire the Property and agrees that it will not make contact with
Seller's tenants unless closing occurs. In addition, Buyer agrees that it will
under no circumstances make any offer, or use the Due Diligence materials, to
acquire the interest of any partner(s) of the selling entities for a period of
two (2) years after the date of this Contract. Buyer and/or its agents will not,
under any circumstances, disclose to any of Seller's employees that it is
contemplating acquisition of the Property without Seller's written consent prior
to closing. All reports desired by Buyer during its Due Diligence Period shall
be ordered by Buyer at Buyer's expense, but Buyer agrees that it will supply
copies of each and every report it receives immediately upon their completion
and availability to Buyer.
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(ii) During the Due Diligence Period, Buyer will conduct a review of
the economics and feasibility of acquiring and operating the Property as
required by its funding source, including inspection of all zoning and other
government permits and regulations and other matters and documents relating to
the operation of the Property, and as detailed in Section 3(a).
(iii) After Seller provides all required documents to the Buyer,
Buyer agrees to accept or reject the Premises and all documents prior to the end
of the Due Diligence Period. If Buyer does not cancel this Contract during the
Due Diligence Period, Buyer shall be deemed to have accepted the Property and it
will close on the Property in accordance with this Contract, except for
cancellation in accordance with the specific provisions of this Contract. If
Buyer does cancel this Contract within the Due Diligence Period, which shall be
in its sole discretion, the Earnest Money shall be returned to Buyer and neither
party shall have any further liability to the other.
(b) FINANCE. This Contract is contingent upon Buyer obtaining a "firm"
commitment (per the practice of HUD for 221D4 mortgages) for financing the
purchase of Real Property in accordance with the Contract upon terms and
conditions satisfactory to Buyer. Buyer agrees to apply for said commitment
promptly upon the commencement of its Due Diligence period set forth in (a)
above, and shall have a period of 60 days to obtain said commitment. Should
Buyer be unable to obtain said commitment within said 60-day period, either
party may terminate this Contract by written notice to the other in which case
the Earnest Money shall be returned to Buyer and neither party shall have any
further liability, except the obligation to restore the premises after due
diligence. Notwithstanding the foregoing, Buyer shall have the right to waive
this finance contingency during the aforesaid 85-day period.
SECTION 4. DEED AND TITLE.
(a) Seller shall deliver to Buyer at Closing, a special or limited
warranty deed (or bargain and sale deed, where appropriate) ("Deed"), conveying
good and marketable fee simple title to the Property, subject only to such
easements, restrictions of record and title exceptions set forth in the
commitment for title insurance specifically approved by Buyer, and taxes not
delinquent. Further, the title insurance commitment for the Property must
contain provision for the endorsements that are reasonably required by Buyer's
funding source, which endorsements shall be ordered by Buyer at Buyer's expense.
In addition, Seller shall convey title to the Personal Property to Buyer, free
and clear of all liens and encumbrances (except those disclosed during due
diligence; e.g., equipment leases or personal property financing documents), by
the execution and delivery at Closing of a Bill of Sale in form and substance
reasonably satisfactory to Buyer, without warranty, except as to Seller's title.
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(b) Seller agrees to provide a copy of its existing title insurance
policy to Buyer. Buyer shall then obtain an ALTA Form B Title Insurance
Commitment (the "Title Commitment"), within thirty (30) days of the date of
execution of this Contract by both parties, issued by a title insurance company
selected by Buyer, committing to insure fee simple marketable title to the
Property in the amount of the Purchase Price for such Property in Buyer's name,
with all standard exceptions removed (except for the rights of tenants under
unrecorded leases and/or except for standard exceptions normally not removed
pursuant to local custom with respect to each Property), and containing no other
exceptions not specifically approved by Buyer. Buyer shall have ten (10) days
after receipt to examine the Title Commitment and inform Seller of Buyer's
objection to any exception contained in or title defect revealed by the Title
Commitments.
(c) If Buyer's examination of the Title Commitment reveals that the
Title Commitment for the Property contains objectionable exceptions or that the
title to the Property is defective and thereafter, the issuing title insurance
company refuses to delete the objectionable exceptions or the defects cannot be
cured within a reasonable period of time after written notice by Buyer,
specifically pointing out the objection/defects, or if the title company refuses
to issue endorsements as required by Buyer's lender, then Buyer may elect to
terminate this Agreement upon written notice to Seller. Notwithstanding the
foregoing, however, in order to terminate the Contract, an objectionable
exception or defect must be one which renders title unmarketable and uninsurable
because of such specified objection or defect, or the specified objection or
defect shall be materially inconsistent with the present use of the Property as
an apartment complex.
(d) Seller will pay for preparation of the Deed for
the Property.
(e) Buyer will pay for any survey of the Property, the recording of
the Deed for the Property, state tax and register's fees on the Deed, the cost
of obtaining a title commitment, and the premium due for the title insurance
policy to be issued for the Property, and all endorsements.
(f) Seller and Buyer will each pay their own attorney's fees.
SECTION 5. PRORATIONS AND ALLOCATIONS. (a) Rents, taxes, service con-
tracts, equipment leases or other personal property financing, utility deposits,
insurance and other expenses whether or not a lien, assessed or to be assessed
for the tax year in which the transaction is consummated. will be prorated as to
the Property to the date of the Closing based on a 365-day year.
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(b) Security deposits held by Owner or paid by any lessees at the
Property will be transferred to Buyer in full at Closing, including any interest
earned thereon and payable to the Tenant under State law.
SECTION 6. CONDEMNATION OR CASUALTY. Seller agrees to give Purchaser
prompt written notice of any fire or other casualty occurring to all or any
portion of the improvements at the Property and/or Personalty between the date
hereof and the date of closing. If prior to the closing, there shall occur:
(i) damage to the improvements at the Property caused by fire or
other casualty which would cost 5% of the Purchase Price of the Property or more
to repair based on the estimate of a reputable third party contractor chosen by
Seller; or
(ii) the taking or condemnation of all or any portion of the Real
Property and/or the improvements as aforesaid as would materially interfere with
the use thereof; then, if any of such events set forth in (i) or (ii) above
occurs, Buyer or Seller, at its option, may terminate its obligations under this
Agreement by written notice given to Seller within seven (7) days after Buyer
has received the notice referred to above or at the closing, whichever is
earlier. If Buyer does not elect to terminate its obligations as aforesaid, the
closing shall take place as provided herein without an abatement of the purchase
price (except that Buyer shall be allowed a credit for any deductible under
Seller's insurance) and there shall be assigned to the Buyer at closing, all
interest of the Seller in and to any insurance proceeds or condemnation awards
which may be payable to Seller on account of such occurrence. Notwithstanding
the foregoing, in the case of casualty loss only, should Buyer elect to
terminate, Seller may notify Buyer within 15 days that Seller intends to restore
the Premises fully and in that event, Buyer's termination notice shall be null
and void and Seller shall proceed as outlined above at closing, provided,
however, that the foregoing shall not be applicable unless restoration can be
completed within time frames allowed by Buyer's lender.
If, prior to the closing, there shall occur:
(i) damage to the Property caused by fire or other casualty which
would cost less than 5% of the allocable Purchase Price of the Property based on
the estimate of a reputable third party contractor chosen by Seller to which
Buyer has no reasonable objection; or
(ii) the taking or condemnation of all or any portion of the said
Real Property and/or improvements as aforesaid which is not material to the use,
thereof; then, if any of such events set forth in (i) or (ii) above occurs,
Buyer shall have no right to terminate its obligations under this Agreement, but
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there shall be assigned to Buyer at closing all interest of Seller in and to any
insurance proceeds or condemnation awards which may be payable to Seller on
account of any such occurrence, and in addition, Buyer shall be allowed a credit
for any deductible under Seller's insurance policy.
Seller shall be responsible for maintaining fire and extended
coverage insurance prior to closing as is currently in place.
SECTION 7. CONDITIONS. The following shall each be conditions precedent
to Buyer's obligations hereunder, unless specifically waived in whole or in part
in writing by Buyer:
(a) LITIGATION. There being no existing or pending claims, lawsuits,
or governmental proceedings, or appeals, which challenge Seller's title to the
Property.
(b) TITLE INSURANCE POLICY. Title to the Property at Closing being
marketable or insurable, and/or in accordance with the provisions of Section 4
above, free and clear of all liens and encumbrances. In addition, Buyer
receiving assurances at Closing from the title insurance company issuing the
Title Commitment, that after Closing, Buyer will be issued an ALTA Form B Title
Insurance Policy, with all standard exceptions, except as set forth in Section 4
above, and all other exceptions objected to by Buyer deleted from such policy,
insuring fee simple marketable title to the Property or in accordance with
Section 4 above, in the amount of the Purchase Price, in Buyer's name, free and
clear of all liens and encumbrances not otherwise specifically agreed to by
Buyer prior to Closing.
(c) PERSONAL PROPERTY. Seller conveying title to the Personal
Property to Buyer at Closing free and clear of all liens and encumbrances
(except for equipment leases and personal property financing disclosed during
due diligence) by a Bill of Sale without warranties except as to title in form
and substance reasonably satisfactory to Buyer.
(d) LAWS AND REGULATIONS. Prior to Closing Seller not having
received written notice of non-compliance under any and all Federal, State,
County and Municipal laws, ordinances, requirements and regulations, including
but not limited to any and all environmental laws and regulations, affecting the
Property. Notwithstanding the foregoing, however, in the event Seller does
receive a written notice of violation of any of the foregoing, then and in that
event, (i) if the cure of said violation would cost less than $10,000.00, Seller
shall be required to cure said violation and/or escrow funds necessary to do so
after closing or (ii) Seller shall have the option of curing the matter which is
the subject of such notice before closing and/or making reasonable arrangements
to complete the cure of such violation after closing, provided an escrow is
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established for the cost of said cure; and provided Seller either cures the
subject of such notice or makes adequate provisions to cure same and escrow the
funds as set forth hereinabove to do so, then and in either of the foregoing
events, Buyer shall have no right to terminate this Contract.
(e) SELLER COOPERATION. Seller agrees to cooperate with and assist
Buyer and to execute any and all applications, petitions and attend and
participate in any necessary hearings, and undertake all other reasonable acts
to obtain any necessary permits for which Buyer may make application prior to
closing, provided that Buyer shall bear all expenses incidental thereto,
including all of Seller's out-of-pocket expenses.
(f) COMPLIANCE WITH REPRESENTATIONS AND WARRANTIES. Seller will be
in compliance with all other representations and warranties made herein at
Closing to the reasonable satisfaction of Buyer.
(g) NOTICE OF CLOSING. If all the conditions specified herein have
not been met within 90 days after execution of this Contract, Buyer shall have
the option to terminate this Agreement, by giving written notice to Seller
specifying the condition not met and provided that Seller does not cure or
remove said condition within 60 days after such notice, or such extended time as
the parties may agree, and in that event the Earnest Money shall be returned to
Buyer. However, in the event that all conditions specified herein have been met
by the Closing date, Buyer shall close the Purchase within the time period
specified, subject to non-performance by Seller under the terms hereof.
SECTION 8. SELLER'S WARRANTIES. The following warranties of Seller shall
survive the Closing for a period of ninety (90) days.
(a) The legal description of the Property contained in the recitals
to this Agreement is substantially correct and will be confirmed by any survey
obtained by Buyer.
(b) Seller (Seller meaning Joseph M. Jayson or an officer of the
general partner of Seller only) has not received written notification that the
Property is not in compliance with all federal, state, county and municipal
laws, ordinances and regulations, including but not limited to all federal,
state, county and municipal environmental laws and regulations, applicable to or
affecting the Property, subject to Seller's right to cure as hereinabove stated.
(d) Seller will convey fee simple, marketable or insurable title to
the Property to Buyer at Closing and will convey title to the Personal Property
to Buyer at Closing by Bill of Sale, in form and substance reasonably
satisfactory to Buyer, free and clear of all liens and encumbrances.
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(e) Seller will not interfere with Buyer's opportunity to hire
Seller's on-site employees, who work at the Property, but Buyer will have no
obligation to hire any of those individuals. Buyer will make no efforts to hire
such employees until after all contingencies have been removed and no earlier
than 10 days before closing.
(f) Seller shall be responsible for (and Buyer shall not assume the
obligation of) all employee wages, benefits (including payments for accrued
bonuses, vacation or sick pay, unemployment compensation, employment taxes,
medical claims or similar payments), contributions under any benefit program or
agreement, severance pay obligations and other related employee costs arising as
a result of any events, acts (or failures to act) prior to the Closing Date with
respect to the Property at which such persons are employed, whether or not
disclosed on the schedules to this Agreement.
(g) Seller retains all liability and responsibility for fulfilling
all federal and/or state COBRA and continuation of group health insurance
coverage requirements (pursuant to Section 4980B of the Code, sections 601-608
of ERISA, and any applicable state laws) with respect to Seller's current or
former employees (and their dependents). Buyer does not hereby and will not at
the Closing of the Property assume any obligation to provide medical insurance
coverage to persons that it employs because it acquires the Property.
SECTION 9. NON-PERFORMANCE.
(a) If Seller fails to deliver the Deed or meet any of the
conditions hereof willfully, Buyer, at Buyer's sole option, may terminate this
Agreement whereupon the Earnest Money shall be returned to Buyer on demand or
Buyer may bring an action for specific performance, and if Buyer prevails, all
costs and expenses of any such action shall be paid by Seller as a reduction of
the Purchase Price. The foregoing shall not prevent Buyer from bringing an
action for monetary damages. The foregoing shall be the sole and exclusive
remedies of Buyer. However, if Buyer elects to bring an action for monetary
damages, they shall be specifically limited, if proven, to an amount equal to
the Earnest Money as set forth hereinabove.
(b) If Buyer defaults at any time, Seller and Buyer agree that it
will be extremely difficult or impractical to fix Seller's actual damages.
Therefore, in such an event, the entire Earnest Money shall be delivered to
Seller as liquidated damages for loss of a bargain and not as a penalty. Buyer
will then be released from all liability to Seller related to this Agreement,
such liquidated damages being Seller's sole remedy.
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SECTION 10. BROKERS, AGENTS AND CONSULTANTS. Seller represents and
warrants to Buyer that no broker, consultant or agent is due a commission or fee
from the proceeds of the Closing, claiming by, through or under Seller and
hereby agrees to indemnify and hold harmless Buyer from the claims of any agent,
consultant or broker for the payment of a commission or commissions.
Buyer represents and warrants to Seller that no other broker, consultant
or agent is due a commission or fee from the proceeds of the closing claiming
by, through or under Buyer, and hereby agrees to indemnify and hold harmless
Seller and the Property from the claims of any other agent, consultant or broker
for the payment of any commission, finder's fee or other compensation.
SECTION 11. LEASES.
(a) Seller agrees that prior to the Closing it will not enter into
any long term commercial leases or service agreements without the prior written
consent of Buyer which will not be unreasonably withheld or delayed. This
provision shall not be applicable until after the expiration of Buyer's Due
Diligence Period.
(b) Seller shall assign the existing tenant leases to Buyer at
Closing along with all service contracts and other agreements affecting the
Property, provided that Buyer shall execute an assumption agreement or other
agreements with respect to all tenant leases and service contracts or other
agreements from and after the date of closing.
SECTION 12. INSURANCE. Seller will cancel its insurance coverage on the
Property effective at Closing of the Property, and Buyer will place new
insurance coverage on the Property effective on the same date.
SECTION 13. ASSIGNMENT. Buyer shall not have the right to assign this
Agreement, in whole or in part, to any party with whom it is not affiliated
without the express written consent of Seller. Upon any such assignment approved
by Seller, the assignee shall assume the obligations of Buyer and provided said
consent is obtained, Buyer shall thereafter be relieved of liability for the
performance of this Agreement. Seller's consent pursuant to this section shall
be in its sole discretion and shall include approval of all proposed assignment
documents.
SECTION 14. ENTIRE AGREEMENT. All prior understandings and agreements of
the parties are merged herein, and this Agreement reflects the entire
understanding of the parties. This Agreement may not be changed or terminated
orally.
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SECTION 15. SUCCESSORS AND ASSIGNS. The terms of this Agreement shall be
binding upon and inure to the benefit of the parties hereto, their respective
legal representatives, successors and assigns.
SECTION 16. INDEMNIFICATION.
(a) SELLERS INDEMNITY. Seller shall indemnify, defend and hold Buyer
harmless from any claims, demand, loss, liability, damage, or expense (including
reasonable attorneys' fees) in connection with third-party claims for injury or
damage to personal property in connection with the ownership or operation of the
Properties prior to Closing. These indemnification obligations of Seller shall
be repeated at and shall survive the Closing.
(b) BUYERS INDEMNITY. Buyer shall indemnify, defend and hold Seller
harmless from any claim, demand, loss, liability, damage, or expense (including
reasonable attorneys' fees), due to Buyers operation of the Property from and
after Closing. The indemnification obligations of Buyer shall be repeated at and
shall survive the Closing.
SECTION 17. NOTICES. All notices required or permitted hereby shall be in
writing and delivered either in person or sent electronically, or by national
overnight express carrier. Notices shall be deemed to have been given when sent
as follows:
Buyer: Partnership Equities, Inc.
c/o The Wallick Companies
6880 Tussing Road
Columbus, OH 43068
Attention: Sandy Goldston
Seller: c/o Joseph M. Jayson
J. M. Jayson and Company
2350 North Forest Road
Suite 12 A
Getzville, NY 14068
Fax No.: (716) 636-0466
Copy to: William H. Mattrey
Andrews, Sanchez, Amigone,
Mattrey & Marshall, LLP
1300 Main Place Tower
Buffalo, NY 14202
Fax No.: (716) 852-1355
SECTION 18. CONSTRUCTION. Time shall be construed to be of
the essence.
SECTION 19. GOVERNING LAW. This Agreement will be governed by and
construed according to New York law, except for matters of title or real estate
law which shall be governed by the laws of the state in which the Property is
located.
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SECTION 20. ESCROW. The Escrow Agent hereby acknowledges receipt of the
Earnest Money and agrees to hold the same in escrow until the closing or sooner
termination of this Agreement and shall pay over and apply the proceeds thereof
in accordance with the terms of this Agreement. If, for any reason, the closing
does not occur and either party makes a written demand upon the Escrow Agent for
payment of the Earnest Money, the Escrow Agent shall give written notice to the
other party of such demand. If the Escrow Agent does not receive a written
objection from the other party to the proposed payment within five (5) business
days after the giving of such notice, the Escrow Agent is hereby authorized to
make such payment. If the Escrow Agent does receive such written objection
within such five (5) day period, or if for any reason the Escrow Agent in good
faith shall elect not to make such payment, the Escrow Agent shall continue to
hold the Earnest Money until otherwise directed by written instructions from the
parties to this Agreement or until a final judgment (beyond any applicable
appeal period) by a Court of competent jurisdiction is rendered disposing of
such Earnest Money.
The Escrow Agent shall be liable as a depository only and its duties
hereunder are limited to the safekeeping of the Earnest Money and the delivery
of same in accordance with the terms of this Agreement. The Escrow Agent will
not be liable for any act or omission done in good faith, or for any claim,
demand, loss or damage made or suffered by any party to this Agreement,
excepting such as may arise through or be caused by the Escrow Agent's
negligence or willful misconduct.
SECTION 21. ASSIGNMENT OF BOND CAP ALLOCATION. If Buyer obtains a Bond Cap
allocation or a financing commitment or other related approvals with respect to
the Property, and should Buyer otherwise cancel this Contract as to such
Property or does not close for any reason whatsoever, then and in that event, to
the extent allowable by law, Buyer shall assign the Bond Cap allocation and all
related approvals or commitments with respect to such Property to Seller or its
designee wherever possible and/or if allowed by any lender or other authority
and Buyer will cooperate with Seller in all respects with respect to any
requirements to complete such assignment.
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IN WITNESS WHEREOF, this Agreement has been executed by the parties, or by
the duly authorized officer of the parties, on the day and year shown below.
BUYER:
Executed JULY 16, 1996
--------------
PARTNERSHIP EQUITIES, INC.
By: /S/ SANFORD GOLDSTON
------------------------------------------------
CHAIRMAN
SELLER:
Executed JULY 16, 1996
--------------
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP
BY: /S/ JOSEPH M. JAYSON
------------------------------------------------
G.P.
RECEIPT OF ESCROW AGENT
The undersigned hereby acknowledges receipt of the Earnest Money provided for
herein, and that the same is being held as Escrow Agent pursuant to the terms of
the above Purchase Agreement.
ANDREWS, SANCHEZ, AMIGONE, MATTREY & MARSHALL, LLP
as Escrow Agent
By: /S/ WILLIAM H. MATTREY
-------------------------------------------------
Member
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP FOR THE
SIX MONTHS ENDED JUNE 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
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