UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Date of Report (Date of earliest event
reported) August 28, 1997
Krupp Associates 1980-1
Massachusetts 2-68727
04-2708956
(State or other jurisdiction of
(Commission (IRS employer
incorporation or organization) file
number) identification no.)
470 Atlantic Avenue, Boston, Massachusetts
02210
(Address of principal executive offices)
(Zip Code)
(617) 423-2233
(Registrant's telephone number, including
area code)
<PAGE>
Item 2. Acquisition or Disposition of Assets
Disposition of Riverside I
Apartments
On July 10, 1997, Krupp Associates Riverside
Limited Partnership, a subsidiary of Krupp
Associates 1980-1 (collectively referred to as
"the Partnership") entered into a Purchase and
Sale Agreement to sell Riverside I Apartments
("Riverside"), a 140-unit multi-family
apartment complex with approximately 30,000
square feet of commercial retail space located
in Evansville, Indiana, with Richard E. Jobe,
principal of Richardson Properties, L.L.C., an
unaffiliated third party. The transaction was
consummated on August 28, 1997 for
consideration of $3,750,000. The Partnership
received cash of $1,177,727, net of the
repayment of the existing mortgage note of
$2,225,096, prorations of $232,327 and closing
costs of $114,850.
Item 7. Financial Statements, Proforma
Financial Information and Exhibits
(a) Financial Statements
Response: Not applicable
(b) Pro Forma Financial Information
On August 28, 1997, Krupp Associates Riverside
Limited Partnership, a subsidiary of Krupp
Associates 1980-1 (collectively referred to as
"the Partnership") sold Riverside I Apartments
("Riverside") to Richard E. Jobe, principal of
Richardson Properties, L.L.C., for
consideration of $3,750,000.
The Partnership has presented in this Form 8-
K, a Pro Forma Consolidated Balance Sheet at
June 30, 1997 and Pro Forma Consolidated
Statements of Operations for the six months
ended June 30, 1997 and for the year ended
December 31, 1996. See Note 1 to the Pro
Forma Consolidated Financial Statements for
further discussion of this matter.
In management's opinion, all adjustments necessary to reflect the above
discussed transactions have been made. The unaudited pro forma Consolidated
Balance Sheet and Statements of Operations are not necessarily indicative
of what actual results of operations of the Partnership would have been for
the periods, nor does it purport to represent the Partnership's results of
operations for future periods.
KRUPP ASSOCIATES 1980-1 AND SUBSIDIARY
PRO FORMA CONSOLIDATED BALANCE SHEET
June 30, 1997
(unaudited)
<TABLE>
<CAPTION>
ASSETS
Actual at Pro Forma
Pro Forma
June 30, 1997 Adjustments
June 30, 1997
(Note 1) (Note 1) (Note 1)
Multi-family apartment complex,
less accumulated depreciation
<S> <C> <C> <C>
of $2,819,651 $ 2,046,606 $(2,046,606) $ -
Cash and cash equivalents 62,810 1,269,470 1,332,280
Cash restricted for tenant
security deposits 29,585 (29,585) -
Replacement reserve escrow 52,598 (52,598) -
Prepaid expenses and other assets 93,395 (92,631) 764
Deferred expenses, net of
accumulated amortization of$39,449 107,176 (107,176) -
Total assets $ 2,392,170 $(1,059,126) $ 1,333,044
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Mortgage note payable $ 2,207,229 $(2,207,229) $ -
Notes payable 1,257,385 - 1,257,385
Accounts payable 77,592 (2,604) 74,988
Accrued expenses and other
liabilities 237,277 (186,320) 50,957
Accrued interest due to an
affiliate 697,166 - 697,166
Total liabilities 4,476,649 (2,396,153) 2,080,496
Partners' deficit (2,084,479) 1,337,027 (747,452)
Total liabilities and
Partners' deficit $ 2,392,170 $ (1,059,126) $1,333,044
</TABLE>
See accompanying note to
pro forma consolidated financial statements
<PAGE>
KRUPP ASSOCIATES 1980-1 AND SUBSIDIARY
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1997
(unaudited)
<TABLE>
<CAPTION>
As Reported
for the Six Pro Forma for the
Months Ended Pro Forma Six
Months Ended
June 30, 1997 Adjustments June 30, 1997
(Note 1) (Note 1) (Note 1)
Revenue:
<S> <C> <C> <C>
Rental $536,818 $ (536,818) $ -
Other income 2,385 (2,385) -
Total revenue 539,203 (539,203) -
Expenses:
Operating 195,069 (195,069) -
Maintenance 47,054 (47,054) -
Real estate taxes 65,180 (65,180) -
Management fees 26,767 (26,767) -
General and administrative 21,973 (2,623) 19,350
Depreciation and
amortization 91,304 (91,304) -
Interest 180,988 (121,664) 59,324
Total expenses 628,335 (549,661) 78,674
Net loss (89,132) $ 10,458 $ (78,674)
</TABLE>
See accompanying note to
pro forma consolidated financial statements
PAGE
<PAGE>
KRUPP ASSOCIATES 1980-1 AND SUBSIDIARY
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1996
(unaudited)
<TABLE>
<CAPTION>
As Reported for Pro Forma for
the Year Ended Pro Forma the Year Ended
December 31, 1996 Adjustments December 31, 1996
( Note 1) ( Note 1) (Note 1)
Revenue:
<S> <C> <C> <C>
Rental $ 1,106,772 $ (1,106,772)$ -
Other income 3,536 (3,536) -
Total revenue 1,110,308 (1,110,308) -
Expenses:
Operating 395,788 (395,788) -
Maintenance 106,160 (106,160) -
Real estate taxes 129,904 (129,904) -
General and
administrative 36,713 (11,786) 24,927
Depreciation and
amortization 185,256 (185,256) -
Interest 363,166 (244,649) 118,517
Total expenses 1,216,987 (1,073,543) 143,444
Net loss $ (106,679) $ (36,765) $ (143,444)
</TABLE>
See accompanying note to
pro forma consolidated financial statements.
KRUPP ASSOCIATES 1980-1 AND SUBSIDIARY
NOTE TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(1)Basis of Presentation
The Pro Forma Balance Sheet at June 30, 1997
is based on the historical Balance Sheet of
the Partnership as reported on Form 10-Q for
the quarter ended June 30, 1997. The Pro
Forma adjustment represents an adjustment to
show the effect of the sale of Riverside I
Apartments ("Riverside"). The Pro Forma
Balance Sheet at June 30, 1997 reflects the
balance sheet as if the sale had occurred
prior to June 30, 1997.
The Pro Forma Statement of Operations for the
six months ended June 30, 1997 is based on the
historical Statement of Operations of the
Partnership as reported on Form 10-Q for the
six months ended June 30, 1997. The Pro Forma
Statement of Operations for the year ended
December 31, 1996 is based on the historical
Statement of Operations for the Partnership as
presented in the annual report on Form 10-K
for the year ended December 31, 1996. The Pro
Forma adjustments represent Riverside's net
loss (income) for the respective period
presented. The Pro Forma Statements of
Operations for the six months ended June 30,
1997 and for the year ended December 31, 1996
reflect the results of operations of the
Partnership as if the Partnership had sold
Riverside as of January 1, 1997 and January
1, 1996, respectively. The Pro Forma
Statements of Operations do not reflect any
gain or loss which may be recognized by the
Partnership as a result of the sale.
(c)Exhibits
1.Purchase and Sale Agreement dated July 10,
1997 between Krupp
Associates Riverside Limited Partnership and
Richard E. Jobe.
2.Closing Statement dated August 28, 1997
between Krupp Associates Riverside Limited
Partnership and Richard E. Jobe, principal of
Richardson Properties, L.L.C.
<PAGE>
SIGNATURE
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.
Krupp Associates 1980-1 (Registrant)
BY: /s/Wayne H. Zarozny
Wayne H. Zarozny
Treasurer and Chief Accounting Officer of the
Krupp Corporation, a General Partner.
DATE: September 17, 1997
<PAGE>
PURCHASE AND SALE AGREEMENT
AGREEMENT dated as of July 10, 1997 between
Krupp Associates Riverside Limited
Partnership, an Indiana limited partnership,
("Seller"), with an address of c/o Berkshire
Property Management Company, 1000 Parkwood
Circle, Atlanta, GA 30330, Attention: Stephen
C. Parthum, Telecopier No. 770-965-9559
Richard E. Jobe ("Buyer"), with an address of
127 Locust Street, Evansville, Indiana,
47708, Telecopier No. 812 - 422 -9422.
In consideration of the mutual undertakings
and covenants herein contained, Seller and
Buyer hereby covenant and agree as follows:
SECTION 1
SALE OF PROPERTY AND ACCEPTABLE TITLE
1.01. Agreement to Buy and to Sell: Property.
Seller shall sell to Buyer, and Buyer shall
purchase from Seller, at the price and upon
the terms and conditions set forth in this
Agreement the following:
(a) that certain tract or parcel of land
located in the City of Evansville,
Vanderburgh County, Indiana, more
particularly described in Schedule A attached
hereto (the "Land");
(b) The 140 unit apartment complex, including
approximately 30,000 square feet of
commercial office space, commonly known as
Riverside One Apartments, which contains
related improvements, facilities, amenities,
structures, driveways and walkways, all of
which have been constructed on the Land
(collectively, the "Improvements");
(c) all right, title and interest of Seller
in and to any alleys, strips or gores
adjoining the Land, and any easements,
rights-of-way or other interests in, on,
under or to, any land, highway, street, road,
right-of-way or avenue, open or proposed, in,
on, under, across, in front of, abutting or
adjoining the Land, and all right, title and
interest of Seller in and to any awards for
damage thereto by reason of a change of grade
thereof;
(d) the accessions, appurtenant rights,
privileges, appurtenances and all the estate
and rights of Seller in and to-the Land and
the Improvements, as applicable, or otherwise
appertaining to any of the property described
in the immediately preceding clauses (a), (b)
and/or (c);
(e) the personal property listed in Schedule
B attached hereto owned by Seller and located
on or in or used solely in connection with
the Land and Improvements (collectively, the
Personal Property); and
(f) all of Seller's interest in any
intangible property now or hereafter, owned
by Seller and used solely in connection with
the Land, Improvements and Personal Property,
including without limitation the right to use
any trade style or name now used in
connection with the same, any contract
rights, escrow or security deposits, utility
agreements or other rights related to the
ownership of or use and operation of the
Property, as hereinafter defined.
All of the items described in subparagraphs
(a), (b), (c), (d), (e) and (f) above are
collectively the "Property".
1.02 Title. Seller shall convey to Buyer by
special warranty deed (the "Deed"), and
Buyer shall accept the fee simple title to
the Property in accordance with the terms of
this Agreement, and Buyer's obligation to
accept said title shall be conditioned upon
Buyer then being conveyed good and clear
record and marketable fee simple title to the
Property, subject only to the Permitted
Exceptions (as hereinafter defined).
(a) Within fourteen (14) days from the date
of this Agreement, or as soon thereafter
as Lawyers Title Insurance Company or such
other nationally recognized title insurance
company chosen by Seller (the "Title
Insurer") may prepare same, Seller shall
obtain and deliver a copy to Buyer of a
Commitment For Title Insurance for an ALTA
Owner's Form B Title Insurance Policy (the
"Title Policy") and legible copies of all
instruments and plans mentioned therein as
exceptions to title (all of such items are
hereinafter collectively referred to as the
"Commitments). The Commitment shall be in the
amount of the Purchase Price (as defined in
Section 2.01 hereof). The cost of the Title
Policy shall be paid one-half by Buyer and
one-half by Seller. Should such Commitment
contain any title exceptions which are not
acceptable to Buyer, in its sole discretion,
Buyer shall, prior to twenty (20) days after
delivery of the Commitment to Buyer, notify
Seller if any such exceptions are
unacceptable. If Buyer fails to so notify
Seller of any unacceptable exceptions as
described above, the exceptions set forth in
Schedule B of the Commitment shall be deemed
accepted by Buyer and included as the
"Permitted Exceptions". If any exceptions are
unacceptable to Buyer and Buyer timely
notifies Seller in writing of such fact as
above provided, Seller, in Seller's sole
discretion, shall have thirty (30) days from
the date Seller receives notice of such
unacceptable exceptions to remove or cure
such exceptions and the date of Closing shall
be extended, if necessary. If Seller fails or
refuses to cure said unacceptable exceptions
within the time period above provided, Buyer
may (i) terminate this Agreement and the
Deposit shall be returned to Buyer, or (ii)
waive such exceptions and accept title
subject thereto, in which event there shall
be no reduction in the Purchase Price.
Simultaneously with the delivery of the Deed,
Seller shall enter into, and deliver to Buyer
a bill of sale and instrument of transfer and
assignment without warranty (the "General
Instrument"), in form and substance
reasonably satisfactory to Seller's and
Buyer's counsel, assigning and transferring
all of the Seller's right, title and interest
in and to all of the tangible and intangible
personal property constituting the Property.
1.02. Survey. Within thirty (30) days from
the date hereof, Buyer shall obtain at
Buyer's sole cost and expense an as-built
survey (the "Survey") of the Land and the
Improvements prepared by a surveyor or
engineer licensed in the State where the
Property is located with a current
certificate attached thereto or endorsed
thereon executed by the surveyor in the form
of the Minimum Standard Detail Requirements
Certificate for Land Title Surveys. Such
survey shall indicate all improvements,
easements, highways, right-of-ways and other
matters affecting or abutting the Property
and shall be sufficient in form and content
to induce the Title Insurer to delete all
standard and printed survey exceptions
contained in the Title Commitment.
Should such Survey contain any encumbrances,
encroachments or other survey defects
(collectively "survey matters") which are not
acceptable to Buyer in its sole discretion,
Buyer shall, prior to the expiration of the
Inspection Period (as defined in Section
16.01), notify Seller if any such survey
matters are unacceptable. If Buyer fails to
so notify Seller of the unacceptable survey
matters as described above, the Survey shall
be deemed accepted by Buyer. If any survey
matters are unacceptable to Buyer and Buyer
timely notifies Seller in writing of such
fact as above provided, Seller, in Seller's
sole discretion, shall have thirty (30) days
from the date Seller receives notice of such
unacceptable survey matters to cure such
survey matters and the date of Closing shall
be extended, if necessary. If Seller fails
or refuses to cure said unacceptable survey
matters within the time period provided,
Buyer may (i) terminate this Agreement and
the Deposit shall be returned to Buyer, or
(ii) waive such survey matters and accept
title subject thereto, in which event there
shall be no reduction in the Purchase Price.
SECTION 2
PURCHASE PRICE, ACCEPTABLE FUNDS,
DEPOSIT AND ESCROW OF DEPOSIT
2.01 Purchase Price. The purchase price
("Purchase Price") to be paid by Buyer to
Seller for the Property is Three Million
Seven Hundred Fifty Thousand Dollars
($3,750,000.00) subject to the prorations and
adjustments as hereinafter provided in this
Agreement.
2.02. Payment of Monies. All monies payable
under this Agreement, unless otherwise
specified in this Agreement, shall be paid by
wire transfer
2.03. Payment of Purchase Price. The
Purchase Price, subject to prorations and
adjustments, shall be paid as follows:
(a) Fifty Thousand Dollars ($50,000.00) to be
paid as a deposit this day (the
Initial Deposits); and
(b) The balance of the Purchase Price shall
be paid at the time of delivery of the
Deed by wire transfer in accordance with
wiring instructions to be provided by Seller.
2.04. Deposit: Escrow Agent. The Deposit
shall be delivered by Buyer to Lawyers Title
Insurance Corporation, 225 Franklin Street,
Boston, MA 02110, Attn: Robert Soule,
National Division (the "Escrow Agent")
simultaneously with the complete execution of
this Agreement. The Initial Deposit, together
with interest accrued thereon, are
collectively referred to herein as the
"Deposit"). Upon receipt from Buyer of the
Deposit, the Escrow Agent shall invest the
Initial Deposit in an interest bearing or
money market account chosen by Buyer. All
interest on the Initial Deposit shall accrue
to the Buyer, except as otherwise provided in
Section 12.03 hereof At the Closing, the
Escrow Agent shall release the Deposit to
Seller, which Deposit shall be credited
against the balance of the Purchase Price
owed by Buyer to Seller. Escrow Agent shall
agree to hold and dispose of the Deposits in
accordance with the terms and provisions of
this Agreement.
2.05. Escrow Provisions. Escrow Agent hereby
acknowledges receipt by Escrow Agent of the
Deposit paid by Buyer to be applied on the
Purchase Price of the Property under the
terms thereof. Escrow Agent agrees to hold,
keep and deliver said Deposit and all other
sums delivered to it pursuant hereto in
accordance with the terms and provisions of
this Agreement. Escrow Agent shall not be
entitled to any fees or compensation for its
service hereunder. Escrow Agent shall be
liable only to hold said sums and deliver the
same to the parties named herein in
accordance with the provisions of this
Agreement, it being expressly understood that
by acceptance of this Agreement Escrow Agent
is acting in the capacity of a depository
only and shall not be liable or responsible
to anyone for any damages, losses or expenses
unless same shall have been caused by the
gross negligence or willful malfeasance of
Escrow Agent. In the event of any
disagreement between Buyer and Seller
resulting in any adverse claims and demands
being made in connection with or for the
monies involved herein or affected hereby,
Escrow Agent shall be entitled to refuse to
comply with any such claims or demands so
long as such disagreement may continue; and
in so refusing Escrow Agent shall make no
delivery or other disposition of any of the
moues then held by it under the terms of
this Agreement, and in so doing Escrow Agent
shall not become liable to anyone for such
refusal; and Escrow Agent shall be entitled
to continue to refrain from acting until (a)
the rights of the adverse claimants shall
have been finally adjudicated in a court of
competent jurisdiction of the monies involved
herein or affected hereby, or (b) all
differences shall have been adjusted by
agreement between Seller and Buyer, and
Escrow Agent shall have been notified in
writing of such agreement signed by the
parties hereto. Escrow Agent shall not be
required to disburse any of the monies held
by it under this Agreement unless in
accordance with either a joint written
instruction of Buyer and Seller or an Escrow
Demand from either Buyer or Seller in
accordance with the provisions hereinafter.
Upon receipt by the Escrow Agent from either
Buyer or Seller (the "Notifying Party") of
any notice or request (the "Escrow Demands)
to perform any act or disburse any portion of
the monies held by the Escrow Agent under the
terms of this Agreement, the Escrow Agent
shall give written notice to the other party
(the "Notified Party"). If within five (5)
days after the giving of such notice, Escrow
Agent does not receive any written objection
to the Escrow Demand from the Notified Party,
the Escrow Agent shall comply with the Escrow
Demand. If the Escrow Agent does receive
written objection from the Notified Party in
a timely manner, Escrow Agent shall take no
further action until the dispute between the
parties has been resolved pursuant to either
clause (a) or (b) above. Further, Escrow
Agent shall have the right at all times to
pay all sums held by it (i) to the
appropriate party under the terms hereof, or
(ii) into any court of competent jurisdiction
after a dispute between or among the parties
hereto has arisen, whereupon Escrow Agent's
obligations hereunder shall terminate.
Seller and Buyer jointly and severally agree
to indemnify and hold harmless said Escrow
Agent from any and all costs, damages and
expenses, including reasonable attorneys'
fees, that said Escrow Agent may incur in its
compliance of and in good faith with the
terms of this Agreement; provided, however,
this indemnity shall not extend to any act of
gross negligence or willful malfeasance on
the part of the Escrow Agent.
SECTION 3
THE CLOSING
3.01. Closing. Except as otherwise provided
in this Agreement, the delivery of all
documents necessary for the closing of this
transaction pursuant to this Agreement (the
"Closing") shall take place at the offices of
the OCD National Bank, 420 Main, Evansville,
Indiana or if requested by Buyer's lender, at
the of fines of such lender's counsel
provided it is located in Evansville, Indiana
or such other place as Seller and Buyer shall
mutually agree, at 10:00 A.M. local time on
September 10, 1997. It is agreed that time is
of the essence of this Agreement.
SECTION 4
SELLER'S PRE-CLOSING DELIVERIES
Seller shall within ten (10) days of the date
of this Agreement furnish to Buyer for
inspection and approval by Buyer the
following:
4.01. Leases. Seller shall provide Buyer with
access on-site to the originals of all leases
and related lease files.
4.02. Permits. Copies of all certificates of
occupancy (if any), and other permits and
licenses (if any) required for the occupancy
and operation of the Property.
4.03. Taxes. A copy of 1995 and 1996 (if
available) real estate and personal property
tax statements for the Property.
4.04. Current Rent Roll. A list of the
current rents now being collected on each of
the apartment units in the Improvements-
which includes: apartment number, unit type,
current status, tenant name, commencement and
termination dates, market rent, lease rent,
deposits and details of any concessions.
4.05. Service Contracts. Copies of all
service, maintenance, supply and management
contracts affecting the use, ownership,
maintenance and/or operation of the Property.
4.06. Utility Bills. Copies of all utility
bills (gas, electric, water and sewer)
relating to the Property for the immediate
prior twelve (12) month period.
SECTION 5
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as of
the date hereof as follows:
5.01. Ownership. Seller is the sole owner of
the Property.
5.02. Leases. As of the date of the
Agreement, there are no leases, subleases,
licenses or other rental agreements or
occupancy agreements (written or verbal)
which grant any possessory interest in and to
any space situated on or in the Improvements
or that otherwise give rights with regard to
use of the Improvements other than the leases
(the "Leases") described in Schedule C
attached hereto (the "Rent Roll"). The Rent
Roll is true, accurate and complete as of the
date hereof. Except as otherwise specifically
set forth in the Rent Roll or elsewhere in
this Agreement:
(a) the Leases are in full force and effect
and none of them has been modified, amended
or extended;
(b) Seller has neither sent written notice to
any tenant of the Property, nor received any
notice from any such tenant, claiming that
such tenant, or Seller, as the case may be,
is in default, which default remains uncured
other than as shown on Schedule C attached
hereto;
(c) to the best knowledge of Seller, no
action or proceeding instituted against
Seller by any tenant of any unit in the
Property is presently pending;
(d) there are no security deposits or other
deposits other than those set forth in the
Rent Roll;
(e) no rent has been paid more than thirty
(30) days in advance under any lease of any
unit in the Property other than as shown on
the Rent Roll; and
- -5-.
(f) no leasing commission shall be due for
any period subsequent to the Closing and
Buyer shall not be liable for any lease
commission incurred by Seller prior to
Closing unless such leasing commission arises
pursuant to a new lease entered into after
the date of this Agreement and approved by
Buyer pursuant to Section 8.01.
5.03. Service and Management Contracts.
Schedule D attached hereto fiats all
services, maintenance, supply and management
contracts (collectively, "Service Contracted)
affecting the operation of the Property. At
Closing, Buyer shall be required to assume
the obligations, as owner, under those
Service Contracts which are non-cancellable
and are designated by the letters "NC" on
Schedule D (the "Non-Cancellable Service
Contracted). With respect to all other
Service Contracts, Buyer may give written
notice to Seller at any time prior to the
expiration of the Inspection Period
designating the Service Contracts which Buyer
elects not to assume. Buyer shall be deemed
to have approved, and agreed to assume, all
Service Contracts as to which Buyer does not
give such written notice on a timely basis.
At Closing, Buyer shall assume the
Non-Cancellable Service Contracts and all
other Service Contracts, which Buyer has or
is deemed to have, approved (collectively the
Assumed Service Contracts') and Seller shall
terminate all other Service Contracts.
5.04. Ability to Perform. Seller has full
power to execute, deliver and carry out the
terms and provisions of this Agreement and
has taken all necessary action to authorize
the execution, delivery and performance of
this Agreement, and this Agreement
constitutes the legal, valid and binding
obligation of Seller enforceable in
accordance with its terms. Except as set
forth in this Agreement, no order,
permission, consent, approval, license,
authorization, registration, or validation
of, or filing with, or exemption by, any
governmental agency, commission, board or
public authority is required to authorize, or
is required in connection with, the
execution, delivery and performance of this
Agreement by Seller or the taking by Seller
of any action contemplated by this Agreement.
5.05. No Actions. There are no pending, or to
Seller's knowledge, threatened legal actions
or proceedings against or relating to the
Seller or the ownership of the Property.
5.06. No Violation Notice. Seller has not
received written notice:
(a) from any federal, state, county or
municipal authority alleging any fire,
health, safety, building, pollution,
environmental, zoning or other violation of
law in respect of the Property or any part
thereof, which has not been entirely
corrected;
any part thereof
(b) concerning the possible or anticipated
condemnation of any part of the Property, or
the widening, change of grade or limitation
on use of streets abutting the same or
concerning any special taxes or assessments
levied or to be levied against the Property
or any part thereof ;
(c) from any insurance company or bonding
company of any defects or inadequacies in the
Property or any part thereof, which would
adversely affect the insurability of the same
or cause the imposition of extraordinary
premiums-or charges therefor or of insurance
or bond; or
(d) concerning any change in the zoning
classification of the Property or
5.07. No Management Contracts, Employment
Contracts. Unions. Pension Plans. Seller has
not entered into any management contracts,
employment contracts or labor union contracts
and has not established any retirement,
pension or profit sharing plans relating to
the operation or maintenance of the Property
which shall survive the Closing or for which
Buyer shall have any liability or obligation.
5.08. Environmental Compliance. Seller has no
actual knowledge, and has not received
written notice from any governmental
authority or other person, that (a) the
Property is in violation of any Environmental
Law (as defined in Section 6.01) or (b) the
Property or Seller is the subject of any
administrative or judicial action or
proceeding pursuant to any Environmental Law
in connection with the Property.
5.09. No Employment Contracts. Unions.
Pension Plans. Seller has not entered into
any employment contracts or labor union
contracts and has not established any
retirement, pension or profit sharing plans
relating to the operation or maintenance of
the Property which shall survive the Closing
or for which Buyer shall have any liability
or obligation.
Any reference in this Section 5 to Seller's
knowledge, representation, warranty or notice
of any matter, shall only mean such knowledge
or notice that is actually known by or has
actually been received by Stephen C. Parthum,
the authorized agent of Seller. Any
representation or warranty of the Seller is
based solely upon those matters of which
Stephen C. Parthum has actual knowledge. Any
knowledge or notice given, had or received by
any of Seller's agents, servants or
employees, other than Stephen C. Parthum,
shall not be imputed to Seller.
SECTION 6
AS-IS CONDITION
6.01. As-Is. Buyer acknowledges and agrees
that it will be purchasing the Property based
solely upon its inspection and investigations
of the Property and that Buyer will be
purchasing the Property based solely upon its
inspection and investigations of the Property
and that Buyer will be purchasing the
Property "AS IS" and "WITH ALL FAULTS" based
upon the condition of the Property as of the
date of this Agreement, subject to reasonable
wear and tear and loss by fire or other
casualty or condemnation from the date of
this Agreement until the Closing. Without
limiting the foregoing, Buyer acknowledges
that, except as may otherwise be specifically
set forth elsewhere in this Agreement,
neither Seller nor its consultants or agent
have made any other representations or
warranties of any kind upon which Buyer is
relying as to any matters concerning the
Property, including, but not limited to, the
condition of the land or any Improvements,
the existence or nonexistence of asbestos,
toxic water or any hazardous material, the
tenants of the Property or the leases
affecting the Property,- economic projections
or market studies concerning the Property,
any development rights, taxes, bonds,
covenants, conditions and restrictions
affecting the Property, water or water
rights, topography, drainage, soil, subsoil
of the Property, the utilities serving the
Property or any zoning, environmental or
building laws, rules or regulations affecting
the Property. Seller makes no representation
that the Property complies with Title III of
the Americans with Disabilities Act or any
fire codes or building codes. Buyer hereby
releases Seller from any and all liability in
connection with any claims which Buyer may
have against Seller, and Buyer hereby agrees
not to assert any claims, for contribution,
cost recovery or otherwise, against Seller,
relating directly or indirectly to the
existence of asbestos or hazardous materials
or substances on, or environmental conditions
of, the Property. As used herein, the term
"Hazardous Materials" or "Hazardous
Substances" means (i) hazardous wastes,
hazardous substances, hazardous constituents,
toxic substances or related materials whether
solids, liquids or gases, including but not
limited to substances defined as "hazardous
wasted Hazardous substances," "toxic
substances," Pollutants," "contaminants,
"radioactive materials," or other similar
designations in, or otherwise subject to
regulation under, the Comprehensive
Environmental Response, Compensation
and Liability Act of 1980, as amended
("CERCLA"), 42 U.S.C. 9601 et ~9.; the Toxic
Substance Control Act ("TSCAS"), 15 U.S.C.
2601 et sea.; the Hazardous Materials
Transportation Act, 49 U.S.C. 1802; the
Resource Conservation and Recovery Act
("NRCRA"), 42 U.S.C. 9601, et sea.; the
Clean Water Act ("CWA"), 33 U.S.C. 1251 et
em.; the Safe Drinking Water Act, 42 U.S.C.
300f et seq.; the Clean Air Act ("CAA"), 42
U.S.C. 7401 et seq.; and in any permits,
licenses, approvals, plans, rules,
regulations or ordinances adopted, or other
criteria and rules, regulations or ordinances
adopted, or other criteria and guidelines
promulgated pursuant to the preceding laws or
other similar federal, state or local laws,
regulations,. rules or ordinance now or
hereafter in effect relating to environmental
matters (collectively the "Environmental
Laws); and (ii) any other substances,
constituents or wastes subject to any
applicable federal, state or local law,
regulation or ordinance, including any
environmental law, now or hereafter in
effect, including but not limited to (A)
petroleum, (B) refined petroleum products,
(C) waste oil, (D) waste aviation or motor
vehicle fuel and (E) asbestos.
6.02. No Financial Representation. Seller has
provided to Buyer certain unaudited
historical financial information regarding
the Property relating to certain periods of
time in which Seller owned the Property.
Seller and Buyer hereby acknowledge that such
information has been provided to Buyer and
Buyer's request solely as illustrative
material Seller makes no representation or
warranty that such material is complete or
accurate or that Buyer will achieve similar
financial or other results with respect to
the operations of the Property, it being
acknowledged by Buyer that Seller's operation
of the Property and allocations of revenues
or expenses may be vastly different than
Buyer may be able to attain. Buyer
acknowledges that it is a sophisticated and
experienced purchaser of real estate and
further that Buyer has relied upon its own
investigation and inquiry with respect to the
operation of the Property and releases Seller
from any liability with respect to such
historical information.
SECTION 7
INSURANCE
7.01. Maintenance of Insurance. Until the
Closing, Seller shall maintain its present
insurance on the Property which insurance in
respect of fire and casualty shall be covered
by a standard All-Risk Policy in the amounts
as currently insured. Subject to the
provisions of Section 7.02, the risk of loss
in an to the Property shall remain vested in
Seller until the Closing. Buyer Drill obtain
its own insurance on the Property at Closing.
7.02. Casually or Condemnation. If prior to
the Closing, the Improvements or any material
portion thereof Waving a replacement cost
equal to or in excess of $100,000.00) are
damaged or destroyed by fire or casualty, or
any part of the Property is taken by eminent
domain by any governmental entity, then Buyer
or Seller shall have the option, exercisable
by written notice given to the other party at
or prior to the Closing, to terminate this
Agreement, whereupon all obligations of all
parties hereto shall cease, the Deposit shall
be returned to Buyer and this Agreement shall
be void and without recourse to the parties
hereto except for provisions which are
expressly stated to survive such termination.
If neither Buyer nor Seller elects to
terminate this Agreement or if such damage or
destruction or taking has a replacement cost
or is in an amount of less than $100,000.00,
Buyer shall proceed to purchase the Property
without reduction in the Purchase Price, and
in such case, unless Seller shall have
previously restored the Property to its
condition prior to the occurrence of any such
damage or destruction, Seller shall pay over
or assign to Buyer all amounts received or
due from, and all claims against, any
insurance company or governmental entity as a
result of such destruction or taking.
SECTION 8
SELLER'S OBLIGATIONS PRIOR TO CLOSING
Seller covenants that between the date of
this Agreement and the Closing:
8.01. No Lease Amendments. Prior to Closing,
Seller shall continue its efforts to lease
the Property in a manner consistent with
Seller's prior business practice. Seller
shall not, without Buyer's prior written
consent (a) enter into any new lease for an
apartment unit or office space with a
first-time tenant unless the lease is for a
period of no more than one year and the rent
shall be not less than the market rent
reasonably determined by Seller; or (b) enter
into, amend, renew or extend any Lease for an
apartment unit or of lice space with an
existing tenant unless the lease is for a
period of not more than one year and that the
rent for the amended, renewal or extension
term shall not be less than the amount of
rent noted on the Rent Roll, for the
respective apartment space; or (c) terminate
any Lease except by reason of a default by
the tenant thereunder or by reason of the
provisions contained in the Lease.
8.02. Continuation of Service Contracts.
Seller shall not modify or amend any Service
Contact or enter into any new service
contract for the Property, without the prior
written consent of Buyer which consent shall
not be unreasonably withheld or delayed
unless the same is terminable without penalty
by the then owner of the Property upon not
more than thirty (30) days' notice.
8.03. Replacement of Personal Property. No
personal property included as part of the
Property shall be removed from the Property
unless the same is replaced with similar
items of at least equal quality prior to the
Closing.
8.04. Tax Procedure. Seller shall not
withdraw, settle or otherwise compromise any
protest or reduction proceeding affecting
real estate taxes assessed against the
Property for any fiscal period which begins
subsequent to the Closing without the prior
written consent of Buyer. Real estate tax
refunds and credits received after the
Closing which are attributable to the fiscal
tax year during which the Closing occurs
shall be apportioned between Seller and
Buyer, after deducting the expenses of
collection thereof, based
upon the relative time periods each owns the
Property, which obligation shall survive the
Closing.
8.05. Access. Seller shall allow Buyer or
Buyer's representatives access to the
Property, the Leases and other documents
required to be delivered under this Agreement
upon reasonable prior notice, at reasonable
times including Buyer shall be Permitted to
make a final inspection of the Property
immediately prior to Closing.
8.06. Operations. Seller shall continue to
operate and maintain the Property in a manner
consistent with Seller's prior business
practice; provided in no event shall Seller
be obligated to make any capital
improvements, repairs-or replacements.
SECTION 9
SELLER'S CLOSING OBLIGATIONS
9.01. Closing. Deliveries and Obligations. At
the Closing, Seller shall deliver the
following to Buyer:
(a) Deed. The Deed and the General
Instrument, in form reasonably satisfactory
to Buyer's and Seller's counsel, duly
executed and acknowledged, which together
convey the Property to Buyer, subject only to
Permitted Exceptions.
(b) Assignment of Leases and Security
Deposits. An assignment of the Leases and
Security Deposits in form reasonably
satisfactory to Buyer's and Seller's counsel.
(c) Lease Records. Original copies of all
Leases, and related documents in the
possession or under the control of Seller.
Such records shall include a schedule of all
cash security deposits and a check or credit
to Buyer in the amount of such security
deposits held by Seller at the Closing under
the Leases together with appropriate
instruments of transfer or assignment with
respect to any lease securities which are
other than cash and a schedule updating the
Rent Roll and setting forth all arrears in
rents and all prepayments of rents.
(d) Permits. Seller shall deliver, to the
extent in the possession of Seller: original
copies of all certificates, licenses,
permits, authorizations and approvals issued
for or with respect to the Property by
governmental authorities having jurisdiction,
except that photocopies may be substituted if
the originals are posted at the Property.
(e) Service Contracts. An assignment of the
Assumed Service Contracts, in form reasonably
satisfactory to Buyer's and Seller's counsel,
together with all Assumed Service Contracts
in Seller's possession or control which are
in effect at the Closing.
(f) Title Affidavits. Such affidavits as the
Title Insurer may reasonably require in order
to omit from its title insurance policy all
exceptions for (i) parties in possession
other than under the rights to possession
granted under the Leases; and (ii) mechanics'
liens.
(g) Files. Seller shall make all of its files
and records relating to the Property
available to Buyer at the Property upon
reasonable prior notice for copying, which
obligation shall survive the Closing.
(h) Notices of Sales. Sufficient letters,
executed by Seller and Buyer, advising the
tenants under the Leases of the sale of the
Property to Buyer and directing that all
rents and other payments thereafter becoming
due under the Leases be sent to Buyer or as
Buyer may direct.
(i) Non-Foreign Affidavit. Seller shall
execute and deliver to Buyer and Buyer's
counsel, at Closing such evidence as may be
reasonably required by Buyer to show
compliance by Seller with the Foreign
Investment and Real property Tax Act, IRC
Section 1445(b)(2), as amended.
9.02. Seller's Expenses. Seller shall pay its
counsel fees and one-half of (i) transfer
taxes and documentary stamps, (ii) title
insurance premiums and costs,
(iii) escrow and recording fees, and (iv)
all other customary closing costs in
transactions of this nature in Evansville,
Indiana.
SECTION 10
BUYER'S CLOSING OBLIGATIONS
At the Closing, Buyer shall:
10.01. Payment of Purchase Price. Deliver to
Seller the Purchase Price, as adjusted for
(i) apportionments under Section 11, and (ii)
any adjustments thereto required pursuant to
the express provisions of this Agreement.
10.02. Assumption. Deliver to Seller
assumption agreements signed by Buyer with
respect to the performance by Buyer of the
landlord's obligations under the Leases,
Security Deposits and the Service Contracts
assumed by Buyer, in each case in respect of
the period from and after the Closing.
10.03. Recording Deed. Cause the Deed to be
recorded.
10.04. Other Documents. Deliver any other
documents required by this Agreement to be
delivered by Buyer.
10.05. Buyer's Expenses. Pay its counsel
fees, survey costs, and one-half of (i)
transfer taxes and documentary stamps, (ii)
title insurance premiums and costs, (iii)
escrow and recording fees, and (iv) all other
customary closing costs in transactions of
this nature in Evansville, Indiana.
SECTION 11
APPORTIONMENTS AND ADJUSTMENTS TO PURCHASE
PRICE
11.01. Apportionments. The following
apportionments shall be made between the
parties at the Closing as of the close of the
business day prior to the Closing.
(a) prepaid and collected rent;
(b) security deposits;
(c) in as much as all current employees of
the Property are the employees of Seller's
management agent, Buyer shall have no
liability for, and there shall be no
adjustment for payment of, wages, vacation
pay, pension and welfare benefits and other
fringe benefits of any persons employed at
the Property;
(d) real estate and personal property taxes,
water charges, sewer rents and vault charges,
if any, on the basis of the fiscal period for
which assessed, except that if there is a
water meter on the Property, apportionment at
the Closing shall be based on the last
available reading, subject to adjustment
after the Closing on a per diem basis, when
the next reading is available.
(e) Seller shall receive a credit for utility
deposits for any utility accounts which are
transferred to Buyer;
(f) charges or prepayments under
transferable Service Contracts;
(g) all other income and expenses relating
to the Property.
If the Closing shall occur before a new tax
rate is fixed, the apportionment of taxes at
the Closing shall be upon the basis of the
old tax rate for the preceding period applied
to the latest assessed valuation. Promptly
after the new tax rate is fixed, the
apportionment of taxes shall be recomputed.
Any discrepancy resulting from. such
recomputation and any errors or omissions in
computing apportionments at the Closing shall
be promptly corrected, which obligation shall
survive the Closing.
11.02. Allocation of Rent Payments. If any
tenant is in arrears in the payment of rent
at the Closing, rents received from such
tenant within thirty (30) days after the
Closing shall be applied in the following
order of priority: (a) first to the month in
which the Closing occurred, (b) then to the
period prior to the month in which the
Closing occurred, and (c) then to any month
or months following the month in which the
Closing occurred. If rents or any portion
thereof received by Seller of Buyer after the
Closing are payable to the other party by
reason of this allocation, the appropriate
sum shall be paid to the other party within
thirty (30) days from the receipt thereof,
which obligation shall survive the Closing.
Thereafter, Seller shall be entitled to
attempt to collect from tenants any rents
which were due Seller prior to Closing, but
Buyer shall have no further obligations with
respect thereto.
SECTION 12
FAILURE TO PERFORM
12.01. Buyer's Election. If Seller is unable
to give title or to make conveyance. or to
satisfy all of Seller's closing obligations
as set forth in this Agreement, Buyer shall
notify Seller in writing on or prior to
Closing specifying in detail the nature of
Seller's default. Seller, in its sole
discretion, may, but shall not be obligated
to, extend the Closing for a period not to
exceed thirty (30) days during which period
Seller may attempt to cure any such default
described in Buyer's notice. If Seller either
elects, in its sole discretion, not to
attempt to cure such default or Seller
extends the Closing but is unable to cure
such default, Buyer shall have the right to
elect, in its sole discretion, at the Closing
or the extended Closing, if applicable, to
accept such title as Seller can deliver to
the Property in its then condition and to pay
therefor the Purchase Price without reduction
or offset, in which case Seller shall convey
such title for such price. ;
12.02. Seller's Default. If at the Closing,
Seller is unable to give title or to make
conveyance, or to satisfy all of Seller's
obligations as set forth in this Agreement,
and Buyer does not elect to take title as
provided in Section 12.01, the Deposit shall
be forthwith returned to Buyer and this shall
be Buyer's sole remedy at law and in equity.
12.03. Buyer's Default. The parties
acknowledge that in the event of Buyer's
failure to fulfill its obligations hereunder
it is impossible to compute exactly the
damages which would accrue to the Seller in
such event. The parties have taken these
facts into account in setting the amount of
the Initial Deposit required pursuant to
Section 2.04 and hereby agree than (i) the
amount of the Initial Deposit together with
the interest earned is the pre-estimate of
such damages which would accrue to Seller;
(ii) such amount represents damages and not
any penalty against Buyer; and (iii) if this
Agreement shall be terminated by Seller by
reason of Buyer's failure to fulfill Buyer's
obligations hereunder,
the Deposit shall be Seller's full and
liquidated damages in lieu of all other
rights and remedies which Seller may have
against Buyer at law or in equity.
SECTION 13
BROKERAGE AND ASSUMPTION FEES
13.01. Brokerage Fees. Seller and Buyer
mutually represent and warrant that RE/Max
First Class Realty, Inc. of Evansville,
Indiana ("Brokers) is the only broker with
whom they have dealt in connection with this
purchase and sale and that neither Seller nor
Buyer knows of any broker who has claimed or
may have the right to claim a commission in
connection with this purchase and sale. The
commission of the Broker in the sum of One
Hundred Twelve Thousand Five Hundred Dollars
($112,500) shall be paid by Seller, but
Seller shall be obligated to pay such
commission only if, as and when the Deed is
recorded and the Purchase Price paid. In any
event, Buyer shall have no obligation to pay
a brokerage commission to Broker or any other
broker. Seller and Buyer shall indemnify and
defend each other against any costs, claims
or expense, including attorneys' fees,
arising out of the breach on their respective
parts of any representations, warranties or
agreements contained in this Section. The
representations and obligations under this
Section shall survive the Closing or, if the
Closing does not occur, the termination of
this Agreement.
13.02. Financing Fees. Buyer shall pay any
and all commitment fees required by Buyer's
lender in connection with the financing by
Buyer of the purchases of the Property. In
addition, Buyer shall pay all other fees and
expenses required by Buyer's lender in
connection with the obtaining of the
financing of the Property.
SECTION 14
NOTICES
14.01. Effective Notices. All notices under
this Agreement shall be in writing and shall
be delivered personally or shall be sent by
Federal Express or other comparable overnight
delivery courier, addressed as set forth at
the beginning of this Agreement or by
telecopier to the telecopier number as set
forth at the beginning of this Agreement.
Notices shall be deemed effective, when so
delivered. Copies of all such notices to
Seller shall be sent-to Walter C. Spiegel,
Esq., Peabody & Brown, 101 Federal Street,
Boston, Massachusetts, 02110, Telecopier No.
617-345-130p and copies of all such notices
to Buyer shall be sent to Dennis Conwell,
Esq., 231 N. Stockwell Road, Evansville,
Indiana. Telecopier No. 8l2-474-9293.
SECTION 15
LIMITATIONS ON SURVIVAL
15.01. Representations and Warranties. Except
as otherwise expressly provided in this
Agreement, no representations, warranties,
covenants or other obligations of Seller set
forth in this Agreement shall survive the
Closing, and no action based thereon shall be
commenced after Closing. The representations,
warranties, covenants and other obligations
of Seller set forth in Section 5 shall
survive until one hundred twenty (120)
days after the Closing, and no action based
thereon shall be commenced more than one
hundred twenty (120) days after the Closing.
15.02. Merger. The delivery of the Deed by
Seller, and the acceptance and recording
thereof by Buyer, shall be deemed the full
performance and discharge of each and every
obligation on the part of Seller to be
performed hereunder and shall be merged in
the delivery and acceptance of the Deed,
except as provided in Section 15.01 and
except for such other obligations of Seller
which are expressly provided herein to
survive the Closing.
SECTION 16
CONDITIONS
16.01. Inspection Condition. It shall be a
condition of this Agreement that on or before
August 11, 1997 (the "Inspection Periods),
Buyer shall have approved in its sole
discretion, (i) the matters set forth in
Section 4; (ii) all zoning, building code and
other governmental laws, ordinances, rules,
regulations, rulings and decision applicable
to the Property; (iu) an appraisal of the
Property; (iv) an engineering and physical
inspection of the Property; and (v) an
inspection of the financial books and records
relating to all income and expenses of the
Property. In the conduct of its inspection of
the Property, Buyer shall not unreasonably
interfere with the operation of the Property
or the occupancy of the tenants. To the
extent any of the inspections disrupt the
condition of the Property, Buyer shall
restore the Property to its prior condition
thereafter and Buyer shall indemnify Seller
against any loss or damage to person or
property arising from the conduct of Buyer's
inspection of the Property. The foregoing
provisions of this Agreement shall survive
the Closing or any termination of this
Agreement.
In the event that Buyer deems any inspection
matter unacceptable to Buyer, in Buyer's sole
discretion, Buyer shall be entitled to
terminate this Agreement by written notice
given to Seller on or before the expiration
of the Inspection Period, at which time, the
Deposit shall be promptly returned to Buyer,
and, thereafter this Agreement shall be void
and without recourse to either party except
for provisions which are expressly stated to
survive termination of this Agreement. In the
event Buyer does not so timely deliver
written notice of termination prior to the
expiration of the Inspection Period, then the
foregoing conditions set forth in this
Section 16.01 shall automatically be deemed
waived by Buyer and satisfied in full. In the
event Buyer timely elects to terminate this
Agreement during the Inspection Period as
permitted above, and as additional
consideration for Seller granting Buyer the
foregoing condition precedent, Buyer shall
deliver to Seller with Buyer's notice of
termination copies of all studies, surveys,
plans, investigations and reports obtained by
or prepared by Buyer in connection with
Buyer's inspection of the Property. Buyer
makes no warranty or representation as to the
accuracy of any information contained in such
documents.
16~02. Environmental Condition. It shall be a
condition of this Agreement that on or before
August 26, 1997, (the "Environmental
Inspection Periods), Buyer shall have
obtained, at Buyer's expense, and approved,
in its sole discretion, a report (the
"Environmental Survey.) prepared by a
qualified consultant selected by Buyer
(Buyer's Consultant") and addressed to Buyer
concerning the presence of any (i)
contamination of the Property by Hazardous
Materials (as defined in Section 6.01); (ii)
apparent violation of Environmental Laws (as
defined in Section 6.01) upon or associated
with activities upon the Property; or (iii)
potential incurrence of Environmental Damages
(as hereinafter defined) by the owners or
operators of the Property (collectively
"Environmental Exceptions). The Environmental
Survey may be performed at any time or times,
except that entry upon the Property shall be
on reasonable notice and under reasonable
conditions established by Seller. Buyer's
Consultants are hereby authorized to enter
upon the Property for such purposes and to
perform such testing and take such samples as
may be necessary to conduct the Environmental
Survey in the reasonable opinion of the
Buyer's Consultant.
The Environmental Survey shall include,
without limitation, the results of
(i) a site inspection;
(ii) interviews of present occupants of the
Property;
(iii) a review of public records concerning
the Property and other properties in the
vicinity of the Property; and
(iv) a review of aerial photographs of the
Property and other evidence of historic land
uses.
The Environmental Survey shall include, if
determinable by the Buyer's Consultant, based
upon this scope of work, the estimated coat
and period of time required to remediate any
Environmental Exceptions.
The term Environmental Damages. means all
claims, judgments, damages, losses,
penalties, fines, liabilities (including
strict liability), encumbrances, liens, costs
and expenses of investigation and defense of
claim, whether or not such claim is
ultimately defeated, and of any good faith
settlement or judgment of whatever kind or
nature, contingent or otherwise, matured or
unmatured, foreseeable or unforeseeable,
including, without limitation, reasonable
attorney fees and disbursements and
consultant fees, any of which are incurred at
any time as a result of the existence of
Hazardous Material upon, about, or beneath
the Property or migrating or threatening to
migrate to or from the Property, or the
existence of a violation of Environmental
Laws pertaining to the Property regardless of
whether the existence of such Hazardous
Material or the violation of Environmental
Laws arose prior to the present ownership or
operation of the Property.
If the Environmental Survey requires or
recommends an additional environmental
survey, such additional survey may be
promptly performed at Buyer's expense, if
Buyer so elects.
To the extent any of the inspections disrupt
the condition of the Property, Buyer shall
restore the Property to its prior condition
thereafter and Buyer shall indemnify Seller
against any loss or damage to person or
property arising from the conduct of Buyer's
inspection of the Property. The foregoing
provisions of this Agreement shall survive
the Closing or any termination of this
Agreement.
In the event that Buyer deems any matter
disclosed by the Environmental Survey
unacceptable to Buyer, in Buyer's sole
discretion, Buyer shall be entitled to
terminate this Agreement by written notice
given to Seller on or before the expiration
of the Environmental Inspection Period, at
which time, the Deposit shall be promptly
returned to Buyer, and, thereafter this
Agreement shall be void and without recourse
to either party except for provisions which
are expressly stated to survive termination
of this Agreement. In the event Buyer does
not so timely deliver written notice of
termination prior to the expiration of the
Environmental Inspection Period, then the
foregoing condition set forth in this Section
16.02 shall automatically be deemed waived by
Buyer and satisfied in full. In the event
Buyer timely elects to terminate this
Agreement during the Environmental Inspection
Period as permitted above, and as additional
consideration for Seller granting Buyer the
foregoing condition precedent, Buyer shall
deliver to Seller with Buyer's notice of
termination copies of all environmental
surveys obtained by or prepared by buyer in
connection with Buyer's inspection of the
Property. Buyer makes no warranty or
representation as to the accuracy of any
information contained in such documents.
16.03. Financing Condition. It shall be a
condition of this Agreement that on or before
August 11, 1997 (the "Financing Periods),
Buyer shall have obtained a financing
commitment (the Financing Commitment.) for a
loan in an amount and on such other terms as
are acceptable to Buyer in connection with
the purchase of the Property. Buyer shall use
diligent efforts to apply for and obtain the
Financing Commitment. In the event Buyer does
not obtain the Financing Commitment, Buyer
shall be entitled to terminate this Agreement
by written notice given to Seller on or
before the expiration of the Financing
Period, at which time the Deposit shall be
promptly returned to Buyer, and thereafter
this Agreement shall be void and without
recourse to either party except for
provisions which are expressly stated to
survive termination of this Agreement. In the
event Buyer does not so timely deliver
written notice of termination prior to the
expiration of the Financing Period, then the
foregoing financing condition set forth in
this Section 16.03 shall automatically be
deemed waived by Buyer and satisfied in full.
Notwithstanding the foregoing, on or before
July 18, 1997 Buyer shall deliver to Seller a
letter (the "Lender's Letters) from a
non-affiliated lending institution generally
recognized in the Evansville, Indiana area
addressed to Seller stating that such lender
is willing to make a mortgage loan to Buyer
in the full amount of the Purchase Price,
subject to the underwriting requirements of
such lender (including, without limitation,
additional collateral and/or cash equity
being provided by Buyer). If the Lender's
Letter is not delivered to Seller on or prior
to July 18, 1997, Seller shall have the right
to terminate this Agreement.
SECTION 17
MISCELLANEOUS PROVISIONS
17.01. Assignment. Buyer shall be entitled to
assign this Agreement and its rights
hereunder to a corporation, general
partnership, limited partnership or other
lawful entity entitled to do business in the
state in which the Property is located
provided such corporation or partnership,
shall be controlled, controlling or under the
common control with Buyer ("Assignee"). In
the event of such an assignment of this
Agreement to Assignee (a) Buyer shall notify
Seller promptly (b) Buyer shall be released
from all liability under this Agreement from
and after the Closing, (c) Assignee shall
assume all obligations of Buyer under this
Agreement and (d) from and after any such
assignment the term "Buyer" shall be deemed
to mean the Assignee under any such
assignment.
17.02. Limitation of Liability. No
shareholders of Seller, nor any of its
respective officers, directors, agents,
employees, heirs, successors or assigns shall
have any personal liability of any kind or
nature for or by reason of any matter or
thing whatsoever under, in connection with,
arising out of or in any way related to this
Agreement and the transactions contemplated
herein, and Buyer hereby waives for itself
and anyone who may claim by, through or under
Buyer any and all rights to sue or recover on
account of any such alleged personal
liability.
No shareholders of Buyer, nor any of its
respective officers, directors, agents,
employees, heirs, successors or assigns shall
have any personal liability of any kind or
nature for or by reason of any matter or
thing whatsoever under, in connection with,
arising out of or in any way related to this
Agreement and the transactions contemplated
herein, and Seller hereby waives for itself
and anyone who may claim by, through or under
Seller any and all rights to sue or recover
on account of any such alleged personal
liability.
17.03. Interation. This Agreement embodies
and constitutes the entire understanding
between the parties with respect to the
transaction contemplated herein, and all
prior agreements, understandings,
representations and statements, oral or
written, are merged into this Agreement.
Neither this Agreement nor any provision
hereof may be waived, modified, amended,
discharged or terminated except by an
instrument signed by the party against whom
the enforcement of such waiver, modification,
amendment, discharge or termination is
sought, and then only to the extent set forth
in such instrument.
.'
17.04: Governing Law. This Agreement shall be
governed by, and construed in accordance with
the laws of the state in which the Property
is located.
17.05. Captions. The captions in this
Agreement are inserted for convenience of
reference only and in no way define, describe
or limit the scope or intent of this
Agreement or any of the provisions hereof.
17.06. Bind and Inure. This Agreement shall
be binding upon and shall inure to the
benefit of the parties hereto and their
respective successors and assigns.
17.07. Drafts. This Agreement shall not be
binding or effective until properly executed
and delivered by both Seller and Buyer. The
delivery by Buyer to Seller of an executed
counterpart of this Agreement shall
constitute an offer which may be accepted by
the delivery to Buyer of a duly executed
counterpart of this Agreement and the
satisfaction of all conditions under which
such offer is made, but such offer may be
revoked by Buyer by written notice given at
any time prior to such acceptance and
satisfaction. The delivery by Seller to Buyer
of a draft of this Agreement shall not
constitute an offer by Seller to sell the
Property.
17.08. Number and Gender. As used in this
Agreement, the masculine shall include the
feminine and neuter, the singular shall
include the plural and the plural shall
include the singular, as the context may
require.
17.09. Attachments. If the provisions of any
schedule or rider to this Agreement are
inconsistent with the provisions of this
Agreement, the provisions of such schedule or
rider shall prevail. Schedules A, B. C and D,
attached are hereby incorporated as integral
parts of this Agreement.
17.10 Recording. Buyer agrees not to record
or file this Agreement, any copy thereof, or
any notice or memorandum hereof or references
hereto with any public records, including
land records. In the event of any such
recording, this Agreement may become null and
void at the option of Seller.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement under seal as of the
date first above written.
Witness:
SELLER:
s/s R. Wesley Jenson
KRUPP ASSOCIATES LIMITED PARTNERSHIP, an
Indiana partnership
By: The Krupp Corporation, a Massachusetts
corporation,
a General Partner,
By: s/s Stephen Parthum
Authorized agent
Witness:
s/s Linda D. Colwell
BUYER:
s/s Richard E. Jobe
The undersigned Broker joins in the
execution of this Agreement to acknowledge
and agree to the terms of Section 13.01
hereof.
Broker:
RE/Max First Class Realty, Inc.
By:
s/s Dennis W. Conwell, Manager
Commercial Division
<TABLE>
<CAPTION>
Riverside One Apartments - Evansville Indiana
Closing Statement 8/28/97
Prorations as of Midnight 8/27/97
Closing Transaction
Credits to Buyer Credits to Seller
<S> <C> <C>
Sale Price 3,750,000.00
Settlement date Adjustment
fee 7,000.00
Escrow deposit (9) 50,000.00
Prepaid Rent (1) 6,533.34
Rent proration (1) 12,731.52
September Rent For Policeman 644.00
Security deposit liability (2) 29,761.50
County tax (July 1 -
December 31, 1996) due 11/12/97 63,547.12
County tax (Jan. 1 - August 27, 1997) 110,662.15
Prorated on tax bill due of 169,002.86
@239 days (3)
Personal property tax (July 1 - Dec 31, 1996)
due 11/12/97 815.98
Personal proper tax (Jan 1 - August 27, 1997) 1,068.60
prorated on tax estimate of 1,631.96 @ 239 Days
Contract prorations (Schedule A) (7) 437.66
Buyers Cash to close 3,467,673.45
3,750,437.66 3,750,437.66
Other items to be paid by buyer
Title fee (closing) (1/2) 175.00
Title Premium (1/2) 2,167.50
Recording fees (1/2) 7.50
Other items for Seller 2,350.00
Buyers cash to close 3,467,673.45
plus:
Release of escrows related to
First Mtg (6) 114,173.88
Security deposits held 32,638.05
Escrow deposit (9) 50,000.00
Cash Available 3,664,485.38
Less:
Brokers fee (REMAX
first class - 3%) 112,500.00
Title premium (1/2) 2,167.50
Title fee closing (1/2) 175.00
Recording fees (1/2) 7.50
Payoff of first Mortgage (8) 2,225,096.16
Net Cash to Seller (10) 1,324,539.22
</TABLE>
Notes:
1. Rent Proration and Pre-paid rent per Attached (schedule B)
2. Security Deposit liability per onsite rent management system
(schedule B)
3. County real estate tax based on reassessment for 1997,
Calculation of 1997 taxes due - 169,002.86 @ 239 days
4. Seller will pay wages, vacation pay, pension and accrued
benefits through August 28, 1997
5. Utility Accounts in the name of the seller will be read and
service transferred to the buyer on August 28,1997.
6. Includes tax escrow, 21,495.51, Hazard Insurance escrow
44,773.68. MIP escrow 6,500.53 & replacement reserve balance of
41,404.16. Escrows to be released within one month.
7. Seller has paid all service contracts through 8/31/97.
8. Principle @ 8/31/97 2,205,795.45 Interest on the Mortgage must
be paid through 8/31/97, 19,300.71
9. Upon release of the deposit escrow, a check for interest
earned on the deposit will be forwarded to the buyer.
10. The wire to seller at close, exclusive of the 50,000 deposit
escrow release, will be 1,127,727.29, the remaining cash to
seller will be1,127,727.29, the remaining cash to seller will be
received from the release of escrows(114,173.88, 32,638.05 and
50,000.00).
Accepted by:
Seller: Krupp Associates Riverside limited partnership
By: The Krupp Corporation its general partner
By:
Date: August 26, 1997
Buyer: Richardson Properties LLC
By:
Date:
