SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported) August 14, 1998
---------------
PAINE WEBBER INCOME PROPERTIES FOUR LIMITED PARTNERSHIP
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-10980 04-2738053
- --------------------------------------------------------------------------------
(State or other jurisdiction) (Commission (IRS Employer
of incorporation File Number) Identification No.)
265 Franklin Street, Boston, Massachusetts 02110
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-8118
--------------
(Former name or address, if changed since last report)
<PAGE>
FORM 8-K
CURRENT REPORT
PAINE WEBBER INCOME PROPERTIES FOUR LIMITED PARTNERSHIP
ITEM 2 - Disposition of Assets
Bristol Pointe Apartments, Arlington, Texas
Disposition Date - August 14, 1998
On August 14, 1998, Arlington Towne Oaks Associates, a joint venture in
which Paine Webber Income Properties Four Limited Partnership ("the
Partnership") has an interest, sold the property known as Bristol Pointe
Apartments (formerly Arlington Towne Oaks Apartments) located in Arlington,
Texas, to an unrelated third party, FSC/Bristol Pointe Associates Limited
Partnership, a Texas Limited Partnership, for $11.3 million. The Partnership
received net proceeds of approximately $5,447,000 after deducting closing costs
of approximately $233,000, closing proration adjustments of approximately
$269,000, the repayment of the existing first mortgage loan of approximately
$4,714,000, related accrued interest of approximately $37,000 and a prepayment
fee of approximately $600,000. Despite incurring a sizable prepayment penalty on
the repayment of the outstanding first mortgage loan, management believed that a
current sale of the Bristol Pointe property was in the best interests of the
Limited Partners due to the exceptionally strong market conditions that exist at
the present time and which resulted in the achievement of a very favorable
selling price.
As discussed further in the Partnership's Quarterly Report on Form 10-Q
for the period ended June 30, 1998, during the second quarter of fiscal 1998 the
Partnership initiated discussions with area real estate brokerage firms in order
to explore potential opportunities for selling the Bristol Pointe property and
solicited marketing proposals from three of these firms. After reviewing their
respective proposals and conducting extensive interviews, the Partnership
selected a Dallas-based brokerage firm that is a leading seller of apartment
properties. A marketing package was subsequently finalized, and comprehensive
sales efforts began in early May 1998. As a result of those efforts, eighteen
offers were received. The prospective purchasers were then requested to submit
best and final offers. Seven of the prospective buyers submitted best and final
offers. After completing an evaluation of these offers and the relative strength
of the prospective purchasers, the Partnership selected an offer. A purchase and
sale agreement was negotiated with this unrelated third-party prospective buyer
and the due diligence work was completed on July 24, 1998. At that time the
prospective buyer made a non-refundable deposit of $150,000. This transaction
closed on August 14, 1998. The Partnership will distribute the net proceeds of
the sale of the Bristol Pointe apartments on August 25, 1998 in a Special
Distribution of $212 per original $1,000 investment to unitholders of record as
of August 14, 1998.
Bristol Pointe was the final asset owned by the Partnership. As previously
reported, the Partnership is awaiting final documentation from HUD regarding the
prepayment of the loan secured by the Charter Oak Apartments, which was sold on
July 16, 1998. The Partnership expects to receive final HUD documentation by
September 30, 1998. The Partnership would then distribute all of the net sales
proceeds from the sale of Charter Oak on or before October 15, 1998. A formal
liquidation of the Partnership would then follow. The Partnership anticipates an
orderly liquidation of the Partnership to be completed and a liquidating
distribution of the Partnership's remaining cash reserves, after paying all
liquidation-related expenses, to be made to the Limited Partners by November 13,
1998.
<PAGE>
FORM 8-K
CURRENT REPORT
PAINE WEBBER INCOME PROPERTIES FOUR LIMITED PARTNERSHIP
ITEM 7 - Financial Statements and Exhibits
(a) Financial Statements: None
(b) Exhibits:
(1) Closing Statement by and between Arlington Towne Oaks Associates
and FSC/Bristol Pointe Associates Limited Partnership, dated
August 13, 1998.
(2) Purchase and Sale Agreement by and between Arlington Towne Oaks
Associates and FSC Realty, LLC, dated June 16, 1998.
(3) First Amendment to Purchase and Sale Agreement between Arlington
Towne Oaks Associates and FSC Realty, LLC, dated July 22, 1998.
(4) Deed by Arlington Towne Oaks Associates to FSC/Bristol Pointe
Associates Limited Partnership, dated August 14, 1998.
(5) Bill of Sale by Arlington Towne Oaks Associates c/o Paine Webber
Income Properties Four Limited Partnership in favor of
FSC/Bristol Pointe Associates Limited Partnership, dated August
14, 1998.
(6) Assignment and Assumption of Leases and Security Deposits between
Arlington Towne Oaks Associates c/o Paine Webber Income
Properties Four Limited Partnership and FSC/Bristol Pointe
Associates Limited Partnership, dated August 14, 1998.
(7) Assignment and Assumption of Contracts between Arlington Towne
Oaks Associates c/o Paine Webber Income Properties Four Limited
Partnership and FSC/Bristol Pointe Associates Limited
Partnership, dated August 14, 1998.
<PAGE>
FORM 8-K
CURRENT REPORT
PAINE WEBBER INCOME PROPERTIES FOUR LIMITED PARTNERSHIP
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PAINE WEBBER INCOME PROPERTIES FOUR LIMITED PARTNERSHIP
(Registrant)
By: FOURTH INCOME PROPERTIES FUND, INC.
-----------------------------------
(Managing General Partner)
By: /s/ Walter V. Arnold
---------------------
Walter V. Arnold
Senior Vice President and
Chief Financial Officer
Date: August 24, 1998
<PAGE>
REPUBLIC TITLE OF TEXAS, INC. Date: 8/13/98
GY No. 9805619 SJ4
SELLER'S STATEMENT
Sale From: Arlington Towne Oaks Associates
Sale To: FSC/Bristol Pointe Associates Limited Partnership
Property: A/9 Parkway Central #3
Bristol Pointe Apartments/Arlington, Texas
Sales Price: Per Contract of Sale/Amendment $ 11,300,000.00
REIMBURSEMENTS/CREDITS
PREPAID SURVEY $2,500.00
SERVICE CONTRACTS 3,309.23
ADD. DAY INTEREST 1,135.00
----------
TOTAL REIMBURSEMENTS/CREDITS 6,944.23
--------------
GROSS AMOUNT DUE TO SELLER $11,306,944.23
LESS CHARGES AND DEDUCTIONS
Division of commission as follows:
233,125.00 to CORSON & ASSOCIATES
Total commissions charged to seller $ 233,125.00
Filing fees to county clerk:
RELEASE 17.00
Fees to the Title Company:
Escrow Fee 250.00
Prorations:
Payoff lien to INLAND MORTGAGE CORPORATION:
Principal $4,714,370.29
Interest thru 09/01/98 36,861.14
Fee/Prepayment 599,140.86
CPA Prepayment fee 300.00
-------------
5,350,672.29
Taxes from 01/01/98 thru 08/13/98 85,013.18
PRORATION/RENT ETC 119,473.07
SECURITY DEPOSITS 62,780.00
PREPAID RENTS 8,215.00
Tax Service to EXPERIAN INFORMATION SOLUTIONS 52.63
/MECHANIC'S LIEN PAY to AUSTIN SUPPLY CO. 81.95
------------
TOTAL CHARGES AND DEDUCTIONS $5,859,680.12
-------------
NET AMOUNT DUE TO SELLER $5,447,264.11
=============
<PAGE>
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
ARLINGTON TOWN OAKS ASSOCIATES ("SELLER")
AND
FSC REALTY, LLC ("BUYER")
THE BRISTOL POINTE APARTMENTS
765 Polk Drive
Arlington, Texas
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS 1
ARTICLE 2
PURCHASE AND SALE 4
ARTICLE 3
PURCHASE PRICE; DEPOSIT; ADJUSTMENTS 5
ARTICLE 4
PRECLOSING OPERATION 8
ARTICLE 5
ACCESS, INSPECTION, DILIGENCE 9
ARTICLE 6
TITLE AND SURVEY 14
ARTICLE 7
CONDITIONS PRECEDENT AND CLOSING 15
ARTICLE 8
CASUALTY AND CONDEMNATION 19
ARTICLE 9
BROKERAGE COMMISSIONS 20
ARTICLE 10
DEFAULT, TERMINATION AND REMEDIES 20
ARTICLE 11
REPRESENTATIONS AND WARRANTIES 21
ARTICLE 12
MISCELLANEOUS 25
ARTICLE 13
IRS FORM 1099-S DESIGNATION 29
ARTICLE 14
STATE SPECIFIC REQUIREMENTS 30
<PAGE>
LIST OF EXHIBITS
EXHIBIT A - THE LAND
EXHIBIT B - PERSONAL PROPERTY
EXHIBIT C - PROPERTY CONTRACTS
EXHIBIT D - EARNEST MONEY ESCROW INSTRUCTIONS
EXHIBIT E - RENT ROLL
EXHIBIT F - FORM OF ESCROW CLOSING INSTRUCTIONS
EXHIBIT G - LEAD-BASED PAINT DISCLOSURE
EXHIBIT H - LIST OF DILIGENCE DOCUMENTS
<PAGE>
PURCHASE AND SALE AGREEMENT
Bristol Pointe Apartments
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into as of
the 16th day of June, 1998 by and between Seller and Buyer, upon the following
terms and conditions:
WHEREAS, Seller desires to sell and Buyer desires to purchase, the
Property (hereinafter defined) on the terms and conditions hereinafter set
forth;
NOW THEREFORE, in consideration of the mutual undertakings, covenants and
agreements contained herein, and other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1
DEFINITIONS
References in this Agreement to the following terms shall have the
following meanings:
Buyer: FSC Realty, LLC, a California limited liability company
- ------
Documents: Those materials listed on Exhibit H attached hereto.
- ---------
Environmental
Requirements: All laws, ordinances, statutes, codes, rules,
- ------------ regulations, agreements, judgments, orders and decrees
now or hereafter enacted, promulgated, or amended, of
the United States, the states, the counties, the
cities or any other political subdivisions in which
the Real Property is located and any other political
subdivision, agency or instrumentality exercising
jurisdiction over the owner of the Real Property, the
Real Property or the use of the Real Property relating
to pollution, the protection or regulation of human
health, natural resources or the environment, or the
emission, discharge, release or threatened release of
pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or waste or Hazardous
Materials into the environment (including, without
limitation, ambient air, surface water, ground water
or land or soil).
Escrowed Amount: See Section 3.1
- ---------------
Final Deposit: See Section 3.1
- -------------
Hazardous Substances: Any substance which is or contains: (i) any
- -------------------- "hazardous substance" as now or hereafter defined in
Section 101(14) of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as
amended (42 U.S.C. Section 9601 et seq.) or any
regulations promulgated under CERCLA; (ii) any
"hazardous waste" as now or hereafter defined in the
Recourse Conservation and Recovery Act (42 U.S.C.
Section 6901 et seq.) or regulations promulgated under
RCRA; (iii) any substance regulated by the Toxic
Substances Control Act (15 U.S.C. Section 2601
et. seq.); (iv) gasoline, diesel fuel or other
petroleum hydrocarbons; (v) asbestos and asbestos
containing materials, in any form, whether friable or
nonfriable; (vi) polychlorinated biphenyls;
(vii) radon gas; and (viii) any additional substances
or materials which are now or hereafter classified or
considered to be hazardous or toxic under
Environmental Requirements or the common law, or any
other applicable law related to the Property.
Hazardous Materials shall include, without limitation,
any substance, the presence of which on the Real
Property: (A) requires reporting, investigation or
remediation under Environmental Requirements;
(B) causes or threatens to cause a nuisance on the Real
Property or adjacent property or poses or threatens to
pose a hazard to the health or safety of persons on
the Real Property or adjacent property; or (C) if
emanated or migrated from the Real Property, could
constitute a trespass.
Improvements: All buildings, structures and other improvements
- ------------ situated upon the Land and all fixtures, systems and
facilities owned by Seller and located on the Land.
Initial Deposit: See Section 3.1
- ---------------
Intangible Property: All of Seller's right, title and interest, if
- ------------------- any, in all intangible assets of any nature relating
to the Land, the Improvements or the Personal
Property, including, without limitation, all of
Seller's right, title and interest in all
(i) warranties and guaranties relating to the
Improvements or Personal Property in the possession of
Seller, (ii) all licenses, permits and approvals
relating to the Real Property, (iii) all logos and
trade names currently used by Seller exclusively in
the operation of the Land and Improvements, including
the use of the name Bristol Pointe Apartments, and
(iv) all plans and specifications, in each case to the
extent that Seller may legally transfer the same.
Land: All of the land described on Exhibit A attached
- ---- ---------
hereto, together with all privileges, rights,
easements, and appurtenances belonging to such land
and all right, title and interest (if any) of Seller
in and to any streets, alleys, passages, and other
rights-of-way or appurtenances included in, adjacent
to or used in connection with such land and all right,
title and interest (if any) of Seller in all mineral
and development rights appurtenant to such land.
Leases: All of Seller's rights in all leases and other
- ------ occupancy agreements covering any portion of the Land
or Improvements.
Personal Property: All furniture, carpeting, appliances, equipment,
- ----------------- machinery, inventories, supplies, signs and other
tangible personal property of every kind and nature,
if any, owned by Seller and installed, located at and
used in connection with the ownership, occupation and
operation of the Real Property, including, without
limitation, the Personal Property listed on Exhibit B
---------
attached hereto. Personal Property specifically
excludes: (i) any items of personal property owned by
tenants at or on the Real Property, and (ii) any items
of personal property owned by third parties and leased
to Seller.
Property: The Real Property, the Personal Property, the Leases,
- -------- the Tenant Deposits, the Intangible Property and the
Property Contracts known as Bristol Pointe Apartments,
located at 765 Polk Drive, Arlington, Texas.
Property Contracts: All of Seller' rights, if any, in the contracts
- ------------------ listed on Exhibit C attached hereto, being all
---------
service, supply and equipment rental, management,
operating and leasing contracts affecting the
Property, to the extent that (i) Seller is entitled to
transfer the same to Buyer, and (ii) Buyer does not
elect to have Seller terminate them in accordance with
Section 4.3 below.
Purchase Price: $11,600,000.00
- --------------
Real Property: The Land and the Improvements.
- -------------
Seller: Arlington Towne Oaks Associates, a Texas general
- ------ partnership
Tenant Deposits: Seller's rights to unapplied security deposits under
- --------------- the Leases.
Title Company: Republic Title of Texas, Inc., Dallas Texas
- -------------
ARTICLE 2
PURCHASE AND SALE
2.1 Seller hereby agrees to sell and convey the Property to Buyer and
Buyer hereby agrees to buy the Property from Seller for the Purchase Price and
otherwise subject to the covenants, provisions, terms and conditions contained
herein.
ARTICLE 3
PURCHASE PRICE; DEPOSIT; ADJUSTMENTS
3.1 Deposit. Contemporaneously with the execution and delivery of this
Agreement (and as a condition precedent to the effectiveness of this Agreement),
Buyer shall deposit immediately available funds with the Title Company
(hereinafter the "Escrow Agent") the sum of Fifty Thousand ($50,000.00) Dollars
(the "Initial Deposit") to secure Buyer's obligations under this Agreement. The
Escrow Agent shall hold the Initial Deposit and the Final Deposit (defined
below), if any, in a segregated interest bearing money market account with an
FDIC insured bank reasonably acceptable to Buyer and Seller. Notwithstanding
anything to the contrary contained herein, the Initial Deposit shall be
non-refundable unless Seller is in default under Section 10.1 hereof or if
Seller fails to obtain the Necessary Approvals referenced in Section 12.20
hereof. In the event Buyer does not terminate this Agreement pursuant to Section
5.2 hereof, Buyer shall immediately deposit available funds with the Escrow
Agent in the sum of Seventy-Five Thousand ($75,000.00) Dollars (the "Final
Deposit") to further secure Buyer's obligations under this Agreement. The
Initial Deposit, the Final Deposit, if any, and all interest accrued on the
Initial Deposit and Final Deposit (collectively, the "Escrowed Amount") shall be
maintained by the Escrow Agent in such account or accounts until the Escrow
Agent is required to cause the Escrowed Amount to be disbursed pursuant to the
terms and conditions of this Agreement and the Earnest Money Escrow Instructions
attached hereto as Exhibit D. The Escrowed Amount shall be applied to the
Purchase Price if the Closing occurs, as provided in Section 3.2(c) below.
Simultaneously with the delivery of the Deposit to the Escrow Agent by Buyer,
Buyer shall deliver to Seller the sum of One Hundred Dollars ($100) as
"Independent Consideration," which Independent Consideration is in addition to
and independent of any other consideration or payment provided for in this
Agreement, and shall be retained by Seller in all instances, but which shall be
applied against the Purchase Price if Closing occurs hereunder.
3.2 Purchase Price. The Purchase Price, subject to adjustment as provided
herein, shall be as specified in Article 1 above and shall be paid on the
Closing Date (as hereinafter defined) in United States dollars by wire transfer
of federal funds, less the Escrowed Amount (the "Cash Balance").
3.3 Tax Proration. All due and payable real estate taxes, all general and
special assessments on the Land and ad valorem taxes, if any, on the Personal
Property (based on the most recent ascertainable taxes) attributable to the
Property through the Closing Date shall be prorated and adjusted as of the
Closing Date. In no event shall Seller be charged with or be responsible for any
increase in the taxes on the Property resulting from the sale of the Property or
from any improvements made or leases entered into on or after the Closing Date.
If the tax statements for the fiscal year during which the Closing Date occurs
are not finally determined, then the tax figures for the immediately prior
fiscal year shall be used for the purposes of prorating taxes on the Closing
Date, provided that there shall be no further adjustment to be made after the
Closing Date. Any tax refunds or proceeds (including interest thereon) on
account of a favorable determination resulting from a challenge, protest, appeal
or similar proceeding relating to taxes and assessments relating to the Property
(i) for all tax periods occurring prior to the applicable tax period in which
the Closing occurs shall be retained by and paid exclusively to Seller and (ii)
for the applicable tax period in which the Closing occurs shall be prorated as
of the Closing Date after reimbursement to Seller and Buyer, as applicable, for
all fees, costs and expenses (including reasonable attorneys' and consultants'
fees) incurred by Seller or Buyer, as applicable, in connection with such
proceedings such that Seller shall retain and be paid that portion of such tax
refunds or proceeds as is applicable to the portion of the applicable tax period
prior to the Closing Date and Buyer shall retain and be paid that portion of
such tax refunds or proceeds as is applicable to the portion of the applicable
tax period from and after the Closing Date. Neither Seller nor Buyer shall
settle any tax protests or proceedings in which taxes for the tax period for
which the other party is responsible are being adjudicated without the consent
of such party, which consent shall not be unreasonably withheld, conditioned or
delayed. After the Closing, Buyer shall be responsible for and control any tax
protests or proceedings for any period for which taxes are adjusted between the
parties under this Agreement and for any later period. Buyer and Seller shall
cooperate in pursuit of any such proceedings and in responding to reasonable
requests of the other for information concerning the status of and otherwise
relating to such proceedings; provided, however, that neither party shall be
obligated to incur any out-of-pocket fees, costs or expenses in responding to
the requests of the other.
3.4 Contract Proration. To the extent Property Contracts are not
terminated pursuant to Section 4.3, prepaid or past due amounts under any
Property Contracts which are assigned to Buyer at Closing shall be prorated and
adjusted as of the Closing Date.
3.5 Utility Proration. To the extent reasonably feasible, the Seller shall
cause all meters for electricity, gas, water, sewer or other public utility
usage at the Property to be read as of the day immediately preceding the Closing
Date, and the Seller shall pay all charges for such utilities which have accrued
on or prior to the Closing Date; provided, however, that if and to the extent
such charges are paid directly by tenants, no such reading or payment shall be
required. If the utility companies are unable or refuse to read meters for which
payment by the Seller is required, all charges for such utilities to the extent
unpaid shall be prorated and adjusted as of the Closing Date based on the most
recent bills therefor and no further adjustment shall be made. The Seller shall
provide notice to the Buyer within five (5) days of the Closing Date setting
forth (i) whether utility meters will be read as of the Closing Date and (ii) a
copy of the most recent bill for any utility charges which are to be prorated
and adjusted as of the Closing Date.
3.6 Income and Expense Proration. Collected rents for the then current and
any future period, security deposits which have not been previously applied by
Seller, prepaid rentals, interest under the Existing Loan Documents, and all
expenses and other charges in connection with the operation of the Property
shall be apportioned and full value shall be adjusted as of the Closing Date,
and the net amount thereof, if in favor of Seller, shall be added to the
Purchase Price, or if in favor of Buyer, shall be deducted from the Purchase
Price. From and after Closing all security deposits credited to Buyer shall
thereafter be deemed transferred to Buyer and Buyer shall assume and be solely
responsible for the payments of security deposits to tenants in accordance with
the Leases and applicable law. Seller shall be entitled to retain or if
transferred to Buyer receive a credit for any utility deposits and any deposits
for third parties under any of the Property Contracts. Seller shall receive a
credit for the full amount of any escrows or reserves held by or on behalf of
Lender. For a period of sixty (60) days after the Closing Date, Buyer shall use
commercially reasonable efforts to collect owing past due or uncollected rents
as of the Closing Date, and such past due or uncollected rents, less reasonable
expenses of collection thereof, shall be apportioned between Buyer and Seller
(if and when collected).
3.7 Prorations Generally. A statement of prorations and other adjustments
shall be prepared by Seller in conformity with the provisions of this Article 3
and submitted to Buyer for review and approval not less than two (2) business
days prior to the Closing Date. For purposes of making prorations, Seller shall
be deemed to be in title to the Property and entitled to the income from and
responsible for the expenses thereof, on the closing Date.
3.8 Closing Costs.
(a) Seller shall pay: (i) its legal fees and expenses related to the
negotiation and preparation of this Agreement and all documents required
to close the transaction contemplated hereby, and (ii) 50% of the escrow
fees of the Escrow Agent.
(b) Buyer shall pay: (i) 50% of the escrow fees of the Escrow Agent,
(ii) charges to record the deed, and evidence of Buyer's existence or
authority, (iii) Buyer's legal fees and expenses related to the
negotiation of this Agreement and all documents required to close the
transaction contemplated hereby, (iv) all costs related to the Buyer's
inspection and due diligence, including, without limitation, the cost of
appraisals, architectural, engineering, credit and environmental reports,
(v) all costs associated with title examination and preparation of a title
commitment as well as all charges and premiums for an owner's title policy
and any endorsements thereto, (vi) all costs allocable to preparation of
the survey, and (vii) all state, county or other taxes associated with the
transfer of the property.
(c) All other closing costs shall be paid by Seller or Buyer in
accordance with the custom in the jurisdiction where the Property is
located.
ARTICLE 4
PRECLOSING OPERATION
4.1 Leases. A rent roll (the "Rent Roll") containing a list of all
occupants of the Property pursuant to the Leases as of the date hereof is
attached hereto as Exhibit E. During the pendency of this Agreement, Seller may
enter into Leases with new tenants or modifications of Leases with existing
tenants substantially in accordance with Seller's existing leasing practices,
provided that in all events any new or modified Leases shall (i) be at or near
market rent, (ii) be for a term of not more than one (1) year (with respect to
residential Leases only), and (iii) on the Seller's current standard form of
lease. Notwithstanding the foregoing, Seller agrees to obtain Buyer's prior
written consent to any Leases that provide for a term in excess of one (1) year,
which consent Buyer agrees shall not be unreasonably withheld, and Buyer's
consent shall be deemed to have been granted if Buyer has not responded within
five (5) Business Days following the submission of a proposed Lease to Buyer for
approval.
4.2 Conduct of Business. At all times prior to Closing, Seller shall
continue (a) to conduct business with respect to the Property in the same manner
in which said business has been heretofore conducted, (b) to insure the Property
substantially as currently insured, and (c) maintain the Property in its current
condition, reasonable wear and tear and damage by casualty excepted, including
ordinary preparation for occupancy of residential units vacated prior to
Closing.
4.3 Property Contracts. Seller shall make copies of all Property Contracts
available for Buyer to review promptly after the date hereof. On or before the
Diligence Date (as defined below), unless Buyer has provided written notice to
Seller of Buyer's election to terminate this Agreement, Buyer shall provide
written notice to Seller of the Property Contracts that Buyer desires to have
terminated by Seller, and Seller will terminate the Property Contracts so
identified at or before Closing, provided that such Property Contracts may be
terminated without cost or liability to Seller and if there is cost or liability
to Seller, Buyer shall be responsible for any such liability. At Closing, Seller
shall assign and Buyer shall assume the Property Contracts, except those
Property Contracts which Seller has agreed to terminate. Buyer and Seller shall
indemnify, defend and hold the other harmless from and against any and all
claims under the Property Contracts which relate to its respective period of
ownership. Notwithstanding the foregoing, Seller's existing management contract
and exclusive brokerage contract for the Property shall be terminated by Seller
effective as of the Closing Date. Seller shall not, during the pendency of this
Agreement, enter into any Property Contracts or modifications, renewals or
terminations of any existing Property Contracts, in each case that would be
binding upon Buyer or the Property after Closing, without the written consent of
Buyer, which consent Buyer agrees shall not be unreasonably withheld. If Buyer
disapproves any such request, then Buyer's notice shall specify the reasons for
such disapproval. Notwithstanding anything to the contrary contained herein, any
management contract with respect to the Property shall be canceled concurrently
with closing.
ARTICLE 5
ACCESS, INSPECTION, DILIGENCE
5.1 Access/Purchaser's Responsibilities/Purchaser's Indemnity.
(a) From the date hereof through the Diligence Date (hereinafter
defined), Seller agrees that Buyer and its authorized agents or
representatives shall be entitled to enter upon the Real Property during
normal business hours upon advance written notice to Seller and make such
reasonable, nondestructive investigations, studies and tests including,
without limitation, surveys and engineering studies as Buyer deems
necessary or advisable, provided, however, that Buyer shall not be
permitted to conduct physical testing without Seller's prior written
consent, which consent shall not be unreasonably withheld, conditioned or
delayed. Seller's prior written consent for physical inspections or
testing may be conditioned upon receipt of a detailed description of the
proposed physical inspection or testing, a list of contractors who will be
performing the physical inspection or testing, evidence of insurance
satisfactory to Seller, and such other information as Seller reasonably
requires in connection with such proposed inspection or testing. Buyer
acknowledges that Seller has delivered to Buyer or has made available to
Buyer at the Property, on or before the date hereof, all Documents.
(b) Buyer agrees that in conducting any inspections, investigations
or tests of the Property and/or the Documents, Buyer and its agents and
representatives shall (i) not unreasonably interfere with the operation
and maintenance of the Property, (ii) not unreasonably disturb the tenants
under the Leases or unreasonably interfere with their use of the Property
pursuant to their respective Leases, (iii) not damage any part of the
Property or any personal property owned or held by any tenant or third
party, (iv) not injure or otherwise cause bodily harm to Seller, the
property manager, or their respective guests, agents, invitees,
contractors and employees or any tenant or their guests or invitees, (v)
maintain comprehensive general liability insurance in terms and amounts
reasonably acceptable to Seller covering any accident arising in
connection with the presence of Buyer, its agents and representatives on
the Property, and deliver a certificate of insurance verifying such
coverage to Seller prior to entry upon the Property; (vi) promptly pay
when due the costs of all tests, investigations and examinations done with
regard to the Property; (vii) not permit any liens to attach to the Real
Property by reason of the exercise of Buyer's rights hereunder, (viii)
fully restore the Property to the condition in which the same was found
before any such inspection or tests were undertaken; and (ix) not reveal
or disclose any information obtained during the due diligence period
concerning the Property and the Documents to anyone outside Buyer's
organization, except in accordance with the confidentiality standards set
forth in Section 5.5 herein.
(c) Buyer will indemnify, defend, and hold Seller and its property
manager harmless from all losses, costs, liens, claims, causes of action,
liability, damages and out-of pocket expenses, including, without
limitation, reasonable attorneys' fees incurred by Seller as a result of
the entry upon or inspections, tests or investigations of the Property
conducted by or on behalf of Buyer. This indemnity obligation of Buyer
shall survive the termination of this Agreement for any reason.
(d) Buyer acknowledges and agrees that the Documents are provided to
Buyer for informational purposes only and do not constitute
representations or warranties of Seller or its agents, employees or
representatives of any kind as to the truth, accuracy or completeness of
the Documents or the source(s) thereof. Seller has not undertaken any
independent investigation as to the truth, accuracy or completeness of the
Documents, and is providing the Documents solely as an accommodation to
Buyer.
5.2 Diligence. Subject to Section 5.1, above, Buyer shall promptly
commence and actively pursue the following due diligence items:
(a) Review title and survey matters;
(b) Review Property Contracts;
(c) Obtain and review engineering reports;
(d) Obtain and review environmental reports on oil, hazardous waste,
and asbestos;
(e) Review applicable zoning and other land use controls, and other
permits, licenses, permissions, approvals and consents; and
(f) Review all Leases affecting the Property.
Buyer shall complete its due diligence on or before July 22, 1998 (the
"Diligence Date"). Notwithstanding any other term or provision herein to the
contrary, in the event that Buyer's due diligence shall reveal any matters which
are not acceptable to Buyer, in Buyer's sole discretion, Buyer may elect, by
written notice to Seller, received by Seller on or before the Diligence Date,
not to proceed with this purchase, in which event this Agreement shall terminate
and this Agreement shall be null and void without recourse to either party
hereto (except to the extent such recourse arises in connection with a provision
of this Agreement which is intended to survive termination). Buyer acknowledges
that the Initial Deposit is non-refundable in the event Buyer terminates
pursuant to this Section. BUYER ACKNOWLEDGES THAT, PURSUANT TO THE TERMS OF THIS
AGREEMENT, BUYER SHALL BE AFFORDED A FULL OPPORTUNITY TO INSPECT THE PROPERTY,
OBSERVE ITS PHYSICAL CHARACTERISTICS AND EXISTING CONDITIONS AND CONDUCT SUCH
INVESTIGATIONS AND STUDIES ON AND OF SAID PROPERTY AS IT DEEMS NECESSARY AND
THAT, UNLESS BUYER TERMINATES THIS AGREEMENT PURSUANT TO THIS SECTION 5.3 BUYER
SHALL BE DEEMED TO HAVE WAIVED ON THE DILIGENCE DATE ANY AND ALL OBJECTIONS TO
OR COMPLAINTS REGARDING (INCLUDING, BUT NOT LIMITED TO, FEDERAL, STATE OR COMMON
LAW BASED ACTIONS AND ANY PRIVATE RIGHT OF ACTION UNDER STATE AND FEDERAL LAW TO
WHICH THE PROPERTY IS OR MAY BE SUBJECT, INCLUDING BUT NOT LIMITED TO, CERCLA
AND RCRA) PHYSICAL CHARACTERISTICS AND EXISTING CONDITIONS, INCLUDING, WITHOUT
LIMITATION, STRUCTURAL AND GEOLOGIC CONDITIONS, SUBSURFACE SOIL AND WATER
CONDITIONS AND SOLID AND HAZARDOUS WASTE AND HAZARDOUS SUBSTANCES ON, UNDER,
ADJACENT TO OR OTHERWISE AFFECTING THE PROPERTY. BUYER FURTHER HEREBY ASSUMES
THE RISK OF CHANGES IN APPLICABLE LAWS AND REGULATIONS RELATING TO PAST, PRESENT
AND FUTURE ENVIRONMENTAL CONDITIONS ON THE PROPERTY AND THE RISK THAT ADVERSE
PHYSICAL CHARACTERISTICS AND CONDITIONS, INCLUDING, WITHOUT LIMITATION, THE
PRESENCE OF HAZARDOUS SUBSTANCES OR OTHER CONTAMINANTS, MAY NOT HAVE BEEN
REVEALED BY ITS INVESTIGATION.
5.3 Copies of Reports/Return of Documents.
(a) As additional consideration for the transaction contemplated
herein, Buyer shall promptly deliver to Seller copies of any and all
reports, tests or studies involving structural or geologic conditions,
environmental, hazardous waste or Hazardous Substances contamination of
the Property and all other materials obtained in connection with Buyer's
diligence, which reports, tests and studies shall be addressed to both
Buyer and Seller at no cost to Seller, provided, however, that Buyer shall
have no obligation to cause any such tests or studies to be performed on
the Property. If such reports, tests or studies indicate the existence or
reasonable potential existence of any environmental, hazardous waste or
Hazardous Substance contamination of any portion of the Property, Seller
may terminate this Agreement by giving written notice to Buyer within ten
(10) business days after Buyer provides Seller with copies of such
reports, tests or studies. Upon such termination, in accordance with
paragraphs (b) and (c) below, the Final Deposit, if any, shall be promptly
returned to Buyer and neither Buyer nor Seller shall have any further
obligation or liability to the other hereunder, except those obligations
arising under provisions of this Agreement which are expressly intended to
survive termination.
(b) If this Agreement is terminated for any reason whatsoever, Buyer
shall promptly deliver to Seller all Documents delivered to Buyer or
Buyer' agents, representatives or designees by Seller or Seller's agents,
representatives or employees pursuant to this Agreement.
(c) The return of the Final Deposit, if any, to Buyer under this
Agreement shall be contingent upon Buyer's fulfillment of its obligations
under Section 5.4(a) and (b).
5.4 Confidentiality. Buyer acknowledges and agrees that any and all of the
Documents are proprietary and confidential in nature and will be delivered to
Buyer solely to assist Buyer in determining the feasibility of purchasing the
Property. Further, each party hereto agrees to maintain in confidence, and not
to discuss with or to disclose to any person or entity who is not a party to
this Agreement, any material term of this Agreement or any aspect of the
transactions contemplated hereby, except as provided in this Section. Seller may
publicly disclose the existence of this Agreement provided that the identity of
Buyer is not disclosed. Buyer shall not disclose to anyone other than its
partners and financiers the Documents and/or any information disclosed by Seller
to Buyer which is not generally known by the public regarding Seller's
operations and/or the Property. Each party hereto may discuss with and disclose
to its accountants, attorneys, existing or prospective lenders, investment
bankers, underwriters, rating agencies, partners, consultants and other advisors
to the extent such parties reasonably need to know such information and are
bound by a confidentiality obligation identical in all material respects to the
one created by this Section. Additionally, each party may discuss and disclose
such matters to the extent necessary to comply with any requirements of the
Securities and Exchange Commission or in order to comply with any law or
interpretation thereof or court order. This provision shall survive termination
of this Agreement but shall terminate upon the Closing. Any press release to be
made regarding any matter which is the subject of the confidentiality obligation
created in this Section shall be subject to the reasonable approval of Buyer and
the Seller, respectively both as to timing and content.
5.5 Buyer's Acknowledgment. BUYER ACKNOWLEDGES THAT AS OF THE DILIGENCE
DATE IT HAS HAD AN OPPORTUNITY TO CONDUCT DILIGENCE ON THE PROPERTY AND IS
ACQUIRING THE PROPERTY IN ITS CURRENT CONDITION BASED ON ITS DILIGENCE. BUYER
FURTHER ACKNOWLEDGES THAT NEITHER SELLER NOR ITS EMPLOYEES, AGENTS OR
REPRESENTATIVES HAVE MADE ANY REPRESENTATION OR WARRANTY AS TO THE CONDITION OF
THE PROPERTY OR THE PRESENCE OR ABSENCE OF ANY HAZARDOUS MATERIALS ON, IN, UNDER
OR WITHIN THE PROPERTY OR A PORTION THEREOF WHICH SURVIVE CLOSING HEREUNDER. THE
BUYER ACKNOWLEDGES AND AGREES THAT THE PROPERTY IS TO BE CONVEYED BY THE SELLER
TO THE BUYER "AS IS," "WITH ALL FAULTS," AND SUBSTANTIALLY IN ITS CURRENT
CONDITION. THE BUYER FURTHER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY
CONTAINED HEREIN, NEITHER THE SELLER NOR ANY AGENT, EMPLOYEE OR OTHER
REPRESENTATIVE OF THE SELLER (OR PURPORTED AGENT, EMPLOYEE OR OTHER
REPRESENTATIVE OF THE SELLER) HAS MADE ANY GUARANTEE, REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED (AND THE SELLER SHALL NOT HAVE ANY LIABILITY
WHATSOEVER) AS TO THE VALUE, USES, HABITABILITY, CONDITION, DESIGN, OPERATION,
FINANCIAL CONDITION OR PROSPECTS, OR FITNESS FOR PURPOSE OR USE OF THE PROPERTY
(OR ANY PART THEREOF) OR ANY OTHER GUARANTEE, REPRESENTATION OR WARRANTY
WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY (OR ANY PART
THEREOF) OR INFORMATION SUPPLIED TO BUYER WITH RESPECT THERETO. FURTHER, THE
SELLER SHALL HAVE NO LIABILITY FOR ANY LATENT, HIDDEN, OR PATENT DEFECT AS TO
THE PROPERTY OR THE FAILURE OF THE PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH
ANY APPLICABLE LAWS AND REGULATIONS. IN PARTICULAR, THE BUYER ACKNOWLEDGES AND
AGREES THAT ANY INFORMATION PROVIDED TO BUYER BY SELLER WITH RESPECT TO THE
PROPERTY UNDER THIS AGREEMENT (AND ANY OTHER INFORMATION THE BUYER MAY HAVE
OBTAINED REGARDING IN ANY WAY ANY OF THE PROPERTY, INCLUDING WITHOUT LIMITATION,
ITS OPERATIONS OR ITS FINANCIAL HISTORY OR PROSPECTS FROM THE SELLER OR ITS
AGENTS, EMPLOYEES OR OTHER REPRESENTATIVES) IS DELIVERED TO THE BUYER AS A
COURTESY, WITHOUT REPRESENTATION OR WARRANTY AS TO ITS ACCURACY OR COMPLETENESS,
AND NOT AS AN INDUCEMENT TO ACQUIRE THE PROPERTY; THAT NOTHING CONTAINED IN SUCH
DELIVERIES SHALL CONSTITUTE OR BE DEEMED TO BE A GUARANTEE, REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, IN ANY REGARD AS TO ANY OF THE PROPERTY (EXCEPT AS
EXPRESSLY PROVIDED HEREIN); AND THAT THE BUYER IS RELYING ONLY UPON THE
PROVISIONS OF THIS AGREEMENT AND ITS OWN INDEPENDENT ASSESSMENT OF THE PROPERTY
AND ITS PROSPECTS IN DETERMINING WHETHER TO ACQUIRE THE PROPERTY. THE PROVISIONS
OF THIS PARAGRAPH SHALL SURVIVE CLOSING.
5.6 Buyer's Release of Seller. SELLER AND ITS PROPERTY MANAGER ARE HEREBY
RELEASED FROM ALL RESPONSIBILITY AND LIABILITY REGARDING THE CONDITION
(INCLUDING THE PRESENCE IN THE SOIL, AIR, STRUCTURES AND SURFACE AND SUBSURFACE
WATERS, OF MATERIALS OR SUBSTANCES THAT HAVE BEEN OR MAY BE IN THE FUTURE
DETERMINED TO BE TOXIC, HAZARDOUS, UNDESIRABLE OR SUBJECT TO REGULATION AND THAT
MAY NEED TO BE SPECIALLY TREATED, HANDLED AND/OR REMOVED FROM THE PROPERTY UNDER
CURRENT OR FUTURE FEDERAL, STATE AND LOCAL LAWS, REGULATIONS OR GUIDELINES),
VALUATION, SALABILITY OR UTILITY OF THE PROPERTY, OR ITS SUITABILITY FOR ANY
PURPOSE WHATSOEVER. BUYER ACKNOWLEDGES THAT ANY INFORMATION OF ANY TYPE WHICH
BUYER HAS RECEIVED OR MAY RECEIVE FROM SELLER, ITS PROPERTY MANAGER OR THEIR
RESPECTIVE AGENTS, INCLUDING, WITHOUT LIMITATION, ANY ENVIRONMENTAL REPORTS AND
SURVEYS, IS FURNISHED ON THE EXPRESS CONDITION THAT BUYER SHALL MAKE AN
INDEPENDENT VERIFICATION OF THE ACCURACY OF SUCH INFORMATION, ALL SUCH
INFORMATION BEING FURNISHED WITHOUT ANY WARRANTY WHATSOEVER.
ARTICLE 6
TITLE AND SURVEY
6.1 Title and Survey. Promptly following the execution of this Agreement,
Buyer shall obtain:
(a) A current ALTA as-built survey of the Real Property or an update
of Seller's survey (the "Survey"); and
(b) A commitment for Texas standard form of Owner' Policy of Title
Insurance from the Escrow Agent (the "Title Commitment"). Buyer shall
cause a copy of the completed Title Commitment to be forwarded to Seller.
If the Survey or matters listed as exceptions in the Title Commitment are
not satisfactory to Buyer, Buyer shall, ten (10) business days before the
Diligence Date, provide Seller with written notice of such objections (the
"Title Objections"). Seller, at its sole cost and expense shall have the right,
but not the obligation, to cure or remove any Title Objections and shall give
Buyer written notice on or prior to the Diligence Date, identifying those Title
Objections, if any, that Seller agrees to use reasonable efforts to cure;
provided, however, that Seller shall not be obligated to incur any costs or
expenses in connection with any such cure undertaken by Seller. If there are
Title Objections which Seller is unable or unwilling to cure by the Diligence
Date, Buyer may terminate this Agreement as provided in Section 5.3, above or
waive such objections which Seller is not willing or able to cure and proceed to
closing. Those exceptions or title deficiencies which (i) Buyer does not object
to pursuant to this Section 6.1 or (ii) are waived because Seller is unwilling
or unable to cure shall be the "termitted Exceptions."
6.2 Deed. On the Closing Date, Seller shall convey by good and sufficient
grant deed to Buyer good and clear record and marketable fee simple title to all
of the Real Property free and clear of all liens, encumbrances, conditions,
easements, assessments, restrictions and other conditions, except for the
following:
(a) All Leases;
(b) All zoning, building and other laws applicable to the Property;
(c) All matters which arise after the Diligence Date which are
agreed upon or consented to by Buyer;
(d) The lien, if any, for real estate taxes for current year not due
and payable prior to the Closing Date (subject to proration in accordance
with Section 3.3 herein);
(e) All matters shown on Schedule B of the Title Commitment or of
public record as of the effective date of the Title Commitment and which
Seller has not agreed to cure pursuant to Section 6.1, above;
(f) The Permitted Exceptions;
(g) Any matters shown on the Survey; and
(h) All matters, whether or not of record, to the extent caused by
Buyer or its agents, representatives or contractors.
6.3 Lease Assignment. At the Closing, Seller shall assign the Leases to
Buyer and Buyer shall assume Seller's obligations thereunder and Seller shall
convey the Personal Property to Buyer by quitclaim bill of sale.
ARTICLE 7
CONDITIONS PRECEDENT AND CLOSING
7.1 Buyer's Conditions Precedent. In addition to any other conditions
precedent in favor of Buyer as may be set forth elsewhere in this Agreement,
Buyer's obligations under this Agreement are expressly subject to the timely
fulfillment of the conditions set forth in this Section 7.1 on or before the
Closing Date, or such earlier date as is set forth below. Each condition may be
waived in whole or in part only by written notice of such waiver from Buyer to
Seller.
(a) Seller performing and complying in all material respects with
all of the terms of this Agreement to be performed and complied with by
Seller prior to or at the Closing.
Notwithstanding the foregoing, if the conditions set forth in this Section
7.1 or any other condition of Closing (other than an obligation of Buyer under
Section 7.2 below) shall not have been fulfilled on or before the Closing Date,
Seller shall have the right (in its sole discretion), exercisable by written
notice to Buyer at or before the Closing, to extend the Closing Date for a
period of up to forty-five (45) days to provide additional time for the
fulfillment of such conditions. Upon any such extension, the term "Closing Date"
as used herein shall mean the date set forth in such written notice from Seller.
If Buyer's conditions as set forth in this Section 7.1 have not been met as of
the Closing Date (as the same may be extended as aforesaid) then Buyer shall
have the right to terminate this Agreement by written notice to Seller, and upon
receipt of such notice Seller shall direct Escrow Agent to return the Final
Deposit, if any, and this Agreement shall thereupon terminate and be of no
further force or effect.
7.2 Seller's Conditions Precedent. In addition to any other conditions
precedent in favor of Seller as may be set forth elsewhere in this Agreement,
Seller's obligations under this Agreement are expressly subject to the timely
fulfillment of the conditions set forth in this Section 7.2 on or before the
Closing Date, or such earlier date as is set forth below. Each condition may be
waived in whole or part only by written notice of such waiver from Seller to
Buyer.
(a) Buyer performing and complying in all material respects with all
of the terms of this Agreement to be performed and complied with by Buyer
prior to or at the Closing, including, without limitation, payment by the
Buyer of the Purchase Price (as adjusted as otherwise provided herein);
and
(b) On the Closing Date, all of the representations of Buyer set
forth in this Agreement shall continue to be true, accurate and complete.
7.3 Closing Date. Subject to Seller's right to extend the Closing Date as
provided in Section 7.1, the consummation of the purchase and sale contemplated
in this Agreement (the "Closing") shall occur through an escrow closing
arrangement as described in Schedule F attached hereto on July 28, 1998 (the
"Closing Date"), at the office of the Escrow Agent or through the escrow closing
arrangements set forth in the Form of Escrow Closing Instructions attached
hereto as Exhibit F. It is agreed that time is of the essence in this Agreement.
7.4 Closing Deliveries. On the Closing Date, Seller shall deliver or
cause to be delivered:
(a) A duly executed and acknowledged grant deed conveying the Land
and the Improvements to Buyer;
(b) A duly executed quitclaim bill of sale and general assignment
conveying the Personal Property and the Intangible Property to Buyer;
(c) A duly executed assignment and assumption of the Leases and
Tenant Deposits (the "Assignment of Leases");
(d) A duly executed assignment and assumption of Property Contracts
being assumed (the "Assignment of Contracts");
(e) A certificate or certificates of non-foreign status from Seller;
(f) Customary affidavits sufficient for the Escrow Agent to delete
any exceptions for mechanic's or materialmen's liens and parties in
possession from Buyer's title policy and such other affidavits relating to
such title policy as the Escrow Agent may reasonably request;
(g) An updated Rent Roll (including a list of all delinquent and
prepaid rents) certified by the Seller as true and correct as of the
Closing Date;
(h) Such other instruments as Buyer or the Escrow Agent may
reasonably request to effectuate the transactions contemplated by this
Agreement;
(i) A duly executed counterpart original of the closing statement
setting forth the Purchase Price, the closing adjustments and the
application of the Purchase Price as adjusted;
(j) Evidence or documents as may reasonably be required by the
Escrow Agent evidencing the status and capacity of Seller to sell the
Property and the authority of the person or persons executing the various
documents on behalf of Seller in connection with the sale of the Property;
(k) Originals, or where unavailable, copies of all Property
Contracts, Leases (with all amendments and modifications thereto),
operating information, permits, warranties and financial information about
the Property in Seller's possession or control relating to the Property;
(l) All keys to all locks on the Property and similar items, to the
extent in Seller's possession; and
(m) An indemnity pursuant to Section 4.3 with respect to each
Property Contract.
7.5 Buyer's Deliveries. On the Closing Date, Buyer shall deliver or cause
to be delivered at its expense each of the following to Seller:
(a) The Purchase Price for the Property, as such Purchase Price may
have been adjusted pursuant to the provisions of this Agreement and
credited for any portion of the Escrowed Amount paid to Seller, in the
manner provided for in Article 3;
(b) Evidence in form and substance reasonably satisfactory to Escrow
Agent and Seller of Buyer's authority to purchase the Property;
(c) The Assignment of Leases;
(d) The Assignment of Contracts;
(e) Such other instruments as Seller or Escrow Agent may reasonably
request to effectuate the transactions contemplated by this Agreement;
(f) A duly executed counterpart original of the closing statement
setting forth the Purchase Price, the closing adjustments and the
application of such amounts;
(g) Such evidence or documents as may reasonably be required by the
Escrow Agent evidencing the status and capacity of Buyer and the authority
of the person or persons who are executing the various documents on behalf
of Buyer in connection with the purchase of the Property;
(h) Acknowledgment by Buyer of Buyer's receipt from Seller of the
Tenant Deposits;
(i) An indemnity pursuant to Section 4.3 of this Agreement with
respect to each Property Contract; and
(j) Executed counterparts of any other documents listed in Section
7.4 required to be signed by Buyer.
7.6 Possession. Possession of the Property shall be delivered to Buyer by
Seller at the Closing, subject only to those items listed in Section 6.2 of this
Agreement and rights arising under any Property Contracts not terminated by
Buyer pursuant to Section 4.3. Seller and Buyer covenant and agree to execute,
at Closing, a written notice of the acquisition of the Property by Buyer, for
duplication and transmittal to all tenants affected by the sale and purchase of
the Property (or otherwise in such manner as will comply with applicable law
respecting notification of tenants). Such notice shall be prepared by Buyer and
approved by Seller, shall notify the tenants of the sale and transfer and shall
contain appropriate instructions relating to the payment of future rentals, the
giving of future notices, and other matters reasonably required by Buyer or
required by law. Unless a different procedure is required by applicable law, in
which event such laws shall be controlling, Buyer agrees to transmit or
otherwise deliver such letters to the tenants promptly after the Closing.
ARTICLE 8
CASUALTY AND CONDEMNATION
8.1 Casualty. If the Improvements are materially damaged by fire or any
other casualty and are not substantially restored to the condition immediately
prior to such casualty before the Closing Date, Buyer shall have the following
elections:
(a) to purchase the Property in its then condition and pay the
Purchase Price, in which event Seller shall pay over or assign to Buyer as
the case may be, on the Closing Date, amounts recovered or recoverable by
Seller on account of any insurance as a result of such casualty up to the
amount of the Purchase Price, less any amounts reasonably expended by
Seller for partial restoration; or
(b) if any portion of the Improvements suffers damage in excess of
$1,500,000 from fire or any other casualty which Seller, in its sole
option, elects not to repair, to terminate this Agreement by giving notice
of termination to Seller on or before that date which is thirty (30) days
after the occurrence of the fire or other casualty or on the Closing Date,
whichever occurs first, in which event the Escrow Agent shall return the
Final Deposit, if any, this Agreement shall terminate and neither Seller
nor Buyer shall have any recourse against the other (except to the extent
such recourse arises in connection with a provision of this Agreement
which is intended to survive termination).
8.2 Condemnation. If any substantial portion of or interest in the
Property shall be taken or is in the process of being taken by exercise of the
power of eminent domain or if any governmental authority notifies Seller prior
to the Closing Date of its intent to take or acquire any portion of or interest
in the Property (each an "Eminent Domain Taking"), Seller shall give notice
promptly to Buyer of such event and Buyer shall have the option to terminate
this Agreement by providing notice to Seller to such effect on or before the
date which is ten (10) days from Seller's notice to Buyer of such Eminent Domain
Taking or on the Closing Date, whichever occurs first, in which event this
Agreement shall terminate, and neither Seller nor Buyer shall have any recourse
against the other (except to the extent such recourse arises in connection with
a provision of this Agreement which is intended to survive termination). If
Buyer does not timely notify Seller of its election to terminate this Agreement,
Buyer shall purchase the Property and pay the Purchase Price, and Seller shall
pay over or assign to Buyer on delivery of the deed awards recovered or
recoverable by Seller on account of such Eminent Domain Taking up to the amount
of the Purchase Price, less any amounts reasonably expended by Seller in
obtaining such award.
ARTICLE 9
BROKERAGE COMMISSIONS
Seller and Buyer each mutually represent and warrant to the other that
they have not dealt with, and are not obligated to pay, any fees or commissions
to any broker in connection with the transaction contemplated by this Agreement
other than Corson & Associates (the "Broker". Seller agrees to pay all
commissions, payments and fees due to the Broker at the Closing. Buyer agrees to
indemnify, defend and hold Seller harmless from and against all loss,
liabilities, costs, damages and expenses (including reasonable attorneys' fees)
arising from any claims for brokerage or finder' fees, commissions or other
similar fees in connection with the transaction covered by this Agreement
insofar as such claims shall be based upon alleged arrangements or agreements
made by Buyer or on Buyer's behalf. Seller hereby agrees to indemnify, defend
and hold Buyer harmless from and against all loss, liabilities, costs, damages
and expenses (including reasonable attorneys' fees) arising from any claims for
brokerage or finders' fees, commissions or other similar fees, including any
claim made by the Broker, in connection with the transaction covered by this
Agreement as such claims shall be based upon alleged arrangements or agreements
made by Seller or on Seller's behalf. The covenants and agreements contained in
this Article shall survive the termination of this Agreement or the Closing of
the transaction contemplated hereunder.
ARTICLE 10
DEFAULT, TERMINATION AND REMEDIES
10.1 Seller's Default. In the event that Seller shall have failed in any
material respect adverse to Buyer as of the Closing Date to have performed any
of the covenants and agreements contained in this Agreement which are to be
performed by Seller on or before the Closing Date or Seller defaults in its
obligation to close hereunder, Buyer shall have the right to terminate this
Agreement and receive the Escrowed Amount, whereupon this Agreement shall
terminate without further recourse. Buyer hereby waives and relinquishes any
right to sue Seller for any reason whatsoever, and agrees that Seller shall not
be liable to Buyer for any actual, punitive, speculative, consequential or other
damages for breach by Seller prior to the Closing, except for payment of the
Escrowed Amount. IN NO EVENT SHALL SELLER, ITS DIRECT OR INDIRECT PARTNERS,
SHAREHOLDERS, OWNERS OR AFFILIATES, ANY OFFICER, DIRECTOR, EMPLOYEE OR AGENT OF
THE FOREGOING, OR ANY AFFILIATE OR CONTROLLING PERSON THEREOF, HAVE ANY
LIABILITY BEYOND ITS INTEREST IN THE PROPERTY FOR ANY CLAIM, CAUSE OF ACTION OR
OTHER LIABILITY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE PROPERTY,
WHETHER BASED ON COMMON LAW, CONTRACT, STATUTE, EQUITY OR OTHERWISE.
10.2 Buyer's Default. In the event that Buyer shall have failed in any
material respect adverse to Seller as of the Closing Date to have performed any
of the covenants and agreements contained in this Agreement which are to be
performed by Buyer on or before the Closing Date, or if Buyer defaults in its
obligation to close hereunder, Seller shall be entitled to receive the Escrowed
Amount as liquidated damages, in lieu of all other remedies available to Seller
at law or in equity for such default, and Buyer shall direct the Escrow Agent to
release the Escrowed Amount to Seller. Seller and Buyer agree that the damages
resulting to Seller as a result of such default by Buyer as of the date of this
Agreement are difficult or impossible to ascertain and the liquidated damages
set forth in the preceding sentence constitute Buyer's and Seller's reasonable
estimate of such damages. Notwithstanding the foregoing, in the event of Buyer's
default or a termination of this Agreement, Seller shall have all remedies
available at law or in equity in the event Buyer or any party related to or
affiliated with Buyer asserts any claims or rights to the Property that would
otherwise delay or prevent Seller from having clear, indefeasible and marketable
title to the Property.
10.3 Indemnity. Buyer agrees to indemnify, hold harmless and defend Seller
from and against any and all claims, demands, causes of action, loss,
liabilities, damages, costs and expenses (including reasonable attorneys' fees
and court costs) of every kind and character asserted against or incurred by
Seller at any time and from time to time by reason of or arising as a result of
the ownership, occupancy, operation, use, and/or maintenance of the Property by
Buyer for the period from and after the Closing Date. Seller agrees to
indemnify, hold harmless and defend Buyer from and against any and all claims,
demands, causes of action, loss, liabilities, damages, costs and expenses
(including reasonable attorneys' fees and court costs) of every kind and
character asserted against or incurred by Buyer at any time and from time to
time by reason of or arising as a result of the ownership, occupancy, operation,
use, and/or maintenance of the Property by Seller for the period prior to the
Closing Date. The provisions of this Section 10.3 shall survive the Closing.
ARTICLE 11
REPRESENTATIONS AND WARRANTIES
11.1 Buyer's Representations and Warranties. Buyer represents and warrants
to Seller that:
(a) Buyer is a limited liability company, duly organized and in good
standing under the laws of the State of California, is qualified to do
business in the State of Texas and has the power and authority to enter
into this Agreement and to execute and deliver this Agreement and to
perform all duties and obligations imposed upon it hereunder. As of the
date of this Agreement, Buyer has obtained all necessary corporate,
partnership or other organizational authorizations required in connection
with the execution and delivery of this Agreement. Each of the individuals
executing this Agreement on Buyer's behalf is authorized to do so. Buyer
has the financial ability to pay the Purchase Price by tendering the Cash
Balance, and performing the other covenants of Buyer set forth in this
Agreement.
(b) Neither the execution nor the delivery of this Agreement, nor
the consummation of the purchase and sale transaction contemplated hereby,
nor the fulfillment of or compliance with the terms and conditions of this
Agreement conflict with or will result in the breach of any of the terms,
conditions or provisions of any agreement or instrument to which Buyer is
a party or by which Buyer or any of Buyer's assets is bound;
(c) Buyer is not in any way affiliated with Seller;
(d) No approval, consent, order or authorization of, or designation,
registration or declaration with, any of the United States, the States of
California or Texas, any department, board, agency, office, commission or
other subdivisions thereof, or any official thereof or any third party is
required in connection with the valid execution and delivery of, and
performance of the covenants of, this Agreement by Buyer.
(e) There are no actions, suits or proceedings pending or, to the
knowledge of Buyer, threatened, against or affecting Buyer which, if
determined adversely to Buyer, would adversely affect its ability to
perform its obligations hereunder.
As a condition precedent to Seller's obligation to close the purchase and
sale transaction contemplated in this Agreement, Buyer's representations and
warranties contained herein must remain and be true and correct as of the
Closing Date. Prior to the Closing Date, Buyer shall notify Seller in writing of
any facts, conditions or circumstances which render any of the representations
and warranties set forth in this Section 11.1 in any way inaccurate, incomplete,
incorrect or misleading.
11.2 Seller's Representations and Warranties. Seller is a general
partnership existing under the laws of the State of Texas.
(a) Subject to Section 12.20, Seller has full right, power and
authority and is duly authorized to enter into this Agreement, to perform
each of the covenants on its part to be performed hereunder and to execute
and deliver, and to perform its obligations under all documents required
to be executed and delivered by it pursuant to this Agreement and this
Agreement constitutes the valid and binding obligation of Seller
enforceable in accordance with its terms.
(b) Seller has directed its manager to deliver or to make available
to Buyer (i) complete copies of all Leases, (ii) the Rent Roll, (iii)
operating statements for the fiscal year ended September 30, 1997 and for
the seven (7) months ended April 30, 1998, all of which shall be true and
correct in all material respects.
(c) Seller has caused its property manager to deliver or to make
available copies of all Property Contracts.
(d) Seller has not been served with notice of any actions, suits, or
proceedings against or affecting the Seller or the Property that either
(i) are not covered by applicable insurance or (ii) if determined
adversely to Seller would materially affect the ownership or operation of
the Property or Seller's ability to perform its obligations under this
Agreement.
Seller reserves the right to update the representations and warranties
made by it herein. All of Seller's representations and warranties shall be
deemed to be updated by information disclosed to or obtained by Purchaser in
connection with its due diligence investigations.
11.3 Seller's Liability for Representations and Warranties. If, prior to
the Closing, Buyer obtains actual knowledge that any representation or warranty
of Seller is inaccurate and Buyer nonetheless proceeds with the Closing, Seller
shall have no liability for any such matter regarding which Buyer had actual
knowledge prior to Closing.
11.4 Property Conveyed "AS IS". (a) NOTWITHSTANDING ANYTHING CONTAINED
HEREIN TO THE CONTRARY, IT IS UNDERSTOOD AND AGREED THAT, EXCEPT AS EXPRESSLY
SET FORTH HEREIN, SELLER AND ITS PROPERTY MANAGER HAVE NOT MADE AND ARE NOT NOW
MAKING, AND THEY SPECIFICALLY DISCLAIM, ANY OTHER WARRANTIES, REPRESENTATIONS OR
GUARANTIES OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST,
PRESENT OR FUTURE, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO,
WARRANTIES, REPRESENTATIONS OR GUARANTIES AS TO (I) MATTERS OF TITLE (OTHER THAN
SELLER'S WARRANTY OF TITLE SET FORTH IN THE DEED (HEREINAFTER DEFINED) TO BE
DELIVERED AT CLOSING), (II) ENVIRONMENTAL MATTERS RELATING TO THE PROPERTY OR
ANY PORTION THEREOF, (III) GEOLOGICAL CONDITIONS, INCLUDING, WITHOUT LIMITATION,
SUBSIDENCE, SUBSURFACE CONDITIONS, WATER TABLE, UNDERGROUND WATER RESERVOIRS,
LIMITATIONS REGARDING THE WITHDRAWAL OF WATER, AND EARTHQUAKE FAULTS AND THE
RESULTING DAMAGE OF PAST AND/OR FUTURE EARTHQUAKES, (IV) WHETHER, AND TO THE
EXTENT TO WHICH THE PROPERTY OR ANY PORTION THEREOF IS AFFECTED BY ANY STREAM
(SURFACE OR UNDERGROUND), BODY OF WATER, FLOOD PRONE AREA, FLOOD PLAIN, FLOODWAY
OR SPECIAL FLOOD HAZARD, (V) DRAINAGE, (VI) SOIL CONDITIONS, INCLUDING THE
EXISTENCE OF INSTABILITY, PAST SOLID REPAIRS, SOIL ADDITIONS OR CONDITIONS OF
SOIL FILL, OR SUSCEPTIBILITY TO LANDSLIDES, OR THE SUFFICIENCY OF ANY
UNDERSHORING, (VII) ZONING TO WHICH THE PROPERTY OR ANY PORTION THEREOF MAY BE
SUBJECT, (VIII) THE AVAILABILITY OF ANY UTILITIES TO THE PROPERTY OR ANY PORTION
THEREOF INCLUDING, WITHOUT LIMITATION, WATER, SEWAGE, GAS AND ELECTRIC, (IX)
USAGES OF ADJOINING PROPERTY, (X) ACCESS TO THE PROPERTY OR ANY PORTION THEREOF,
(XI) THE VALUE, COMPLIANCE WITH THE PLANS AND SPECIFICATIONS, SIZE, LOCATION,
AGE, USE, DESIGN, QUALITY, DESCRIPTION, SUITABILITY, STRUCTURAL INTEGRITY,
OPERATION, TITLE TO, OR PHYSICAL OR FINANCIAL CONDITION OF THE PROPERTY OR ANY
PORTION THEREOF, OR ANY INCOME, EXPENSES, CHARGES, LIENS, ENCUMBRANCES, RIGHTS
OR CLAIMS ON OR AFFECTING OR PERTAINING TO THE PROPERTY OR ANY PART THEREOF, OR
ANY INCOME, EXPENSES, CHARGES, LIENS, ENCUMBRANCES, RIGHTS OR CLAIMS ON OR
AFFECTING OR PERTAINING TO THE PROPERTY OR ANY PART THEREOF, (XII) THE PRESENCE
OF HAZARDOUS SUBSTANCES (HEREINAFTER DEFINED) IN OR ON, UNDER OR IN THE VICINITY
OF THE PROPERTY, (XIII) THE CONDITION OR USE OF THE PROPERTY OR COMPLIANCE OF
THE PROPERTY WITH ANY OR ALL PAST, PRESENT OR FUTURE FEDERAL, STATE OR LOCAL
ORDINANCES, RULES, REGULATIONS OR LAWS, BUILDING, FIRE OR ZONING ORDINANCES,
CODES OR OTHER SIMILAR LAWS, (XIV) THE EXISTENCE OR NON-EXISTENCE OF UNDERGROUND
STORAGE TANKS, (XV) ANY OTHER MATTER AFFECTING THE STABILITY OR INTEGRITY OF THE
REAL PROPERTY, (XVI) THE POTENTIAL FOR FURTHER DEVELOPMENT OF THE PROPERTY,
(XVII) THE EXISTENCE OF VESTED LAND USE, ZONING OR BUILDING ENTITLEMENTS
AFFECTING THE PROPERTY, (XVIII) THE MERCHANTABILITY OF THE PROPERTY OR FITNESS
OF THAT PROPERTY FOR ANY PARTICULAR PURPOSE (BUYER AFFIRMING THAT BUYER HAS NOT
RELIED ON SELLER'S OR ITS PROPERTY MANAGER'S SKILL OR JUDGMENT TO SELECT OR
FURNISH THE PROPERTY FOR ANY PARTICULAR PURPOSE, AND THAT SELLER MAKES NO
WARRANTY THAT THE PROPERTY IS FIT FOR ANY PARTICULAR PURPOSE), OR (XIX) TAX
CONSEQUENCES.
(b) BUYER HAS NOT RELIED UPON AND WILL NOT RELY UPON, EITHER
DIRECTLY OR INDIRECTLY, ANY REPRESENTATION OR WARRANTY OF SELLER OR ITS PROPERTY
MANAGER OR ANY OF THEIR RESPECTIVE AGENTS, EXPECT AS EXPRESSLY SET FORTH HEREIN,
AND ACKNOWLEDGES THAT NO OTHER SUCH REPRESENTATIONS HAVE BEEN MADE. BUYER
REPRESENTS THAT IT IS A KNOWLEDGEABLE, EXPERIENCED AND SOPHISTICATED BUYER OF
REAL ESTATE AND THAT IT IS RELYING SOLELY ON ITS OWN EXPERTISE AND THAT OF
BUYER'S CONSULTANTS IN PURCHASING THE PROPERTY. BUYER WILL CONDUCT SUCH
INSPECTIONS AND INVESTIGATIONS OF THE PROPERTY AS BUYER DEEMS NECESSARY,
INCLUDING, BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS
THEREOF, AND SHALL RELY UPON SAME. UPON CLOSING, BUYER SHALL ASSUME THE RISK
THAT ADVERSE MATTERS, INCLUDING, BUT NOT LIMITED TO, ADVERSE PHYSICAL AND
ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY BUYER'S INSPECTIONS AND
INVESTIGATIONS. BUYER ACKNOWLEDGES AND AGREES THAT UPON CLOSING, SELLER SHALL
SELL AND CONVEY TO BUYER AND BUYER SHALL ACCEPT THE PROPERTY "AS IS, WHERE IS",
WITH ALL FAULTS. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT THERE ARE NO ORAL
AGREEMENTS, WARRANTIES OR REPRESENTATIONS, COLLATERAL TO OR AFFECTING THE
PROPERTY BY SELLER, ANY AGENT OF SELLER OR ANY THIRD PARTY. THE TERMS AND
CONDITIONS OF THIS SECTION 11.4(B) SHALL EXPRESSLY SURVIVE THE CLOSING, NOT
MERGE WITH THE PROVISIONS OF ANY CLOSING DOCUMENTS AND SHALL BE INCORPORATED
INTO THE DEED. SELLER IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY ORAL OR
WRITTEN STATEMENTS, REPRESENTATIONS, OR INFORMATION PERTAINING TO THE PROPERTY
FURNISHED BY ANY REAL ESTATE BROKER, AGENT, EMPLOYEE, SERVANT OR OTHER PERSON,
UNLESS THE SAME ARE SPECIFICALLY SET FORTH OR REFERRED TO HEREIN. BUYER
ACKNOWLEDGES THAT THE PURCHASE PRICE REFLECTS THE "AS IS" NATURE OF THIS SALE
AND ANY FAULTS, LIABILITIES, DEFECTS OR OTHER ADVERSE MATTERS THAT MAY BE
ASSOCIATED WITH THE PROPERTY. BUYER HAS FULLY REVIEWED THE DISCLAIMERS AND
WAIVERS SET FORTH IN THIS AGREEMENT WITH ITS COUNSEL AND UNDERSTANDS THE
SIGNIFICANCE AND EFFECT THEREOF.
--------------
Buyer's Initials
ARTICLE 12
MISCELLANEOUS
12.1 Successors and Assigns. Without the prior written consent of Seller,
Buyer shall not, directly or indirectly, assign this Agreement or any of its
rights hereunder. Any attempted assignment in violation hereof shall, at the
election of Seller in its sole discretion, be of no force or effect and shall
constitute a default by Buyer. Notwithstanding the foregoing and so long as it
will not affect the Lender's consent to or the timing of the Closing Buyer may
elect to have a nominee entity accept title to the Property at Closing, provided
that any such nominee must be an affiliated entity controlled by or under common
control with Buyer, and Buyer shall give written notice of such nominee to
Seller, together with any reasonable evidence of affiliation requested by
Seller, a minimum of fifteen (15) days prior to Closing. No designation of a
nominee to receive title shall release Buyer from its obligations under this
Agreement.
12.2 Notices. Except as otherwise specifically provided herein, any notice
required or permitted to be delivered under this Agreement shall be in writing
and shall be deemed given (i) when delivered or refused if sent by hand during
regular business hours, (ii) three (3) days after being sent by United States
Postal Service, registered or certified mail, postage prepaid, return receipt
requested, or (iii) on the next business day when sent by a reputable overnight
express mail service that provides tracing and proof of receipt or refusal of
items mailed, addressed to Seller or Buyer, as the case may be, at the address
or addresses set forth below or such other addresses as the parties may
designate in a notice similarly sent. Any notice given by a party to Escrow
Agent shall be simultaneously given to the other party. Any notice given by a
party to the other party relating to its entitlement to the Escrowed Amount
shall be simultaneously given to the Escrow Agent.
(1) If to Seller:
c/o Paine Webber Properties Incorporated
265 Franklin Street - 15th Floor
Boston, MA 02110
Attn: Peter F. Sullivan
with a copy to:
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109
Attn: Andrew C. Sucoff, Esq.
<PAGE>
(2) If to Buyer:
FSC Realty, LLC
9777 Wilshire Boulevard, Suite 710
Beverly Hills, CA 90212
Attn: Stanley R. Fimberg
with a copy to:
Snell, Brannian & Trent
8150 No. Central Expressway, Suite 1800
Dallas, TX 75206
Attn: Lawrence J. Brannian, Esq.
(3) If to the Escrow Agent:
Republic Title of Texas, Inc.
300 Crescent Court, Suite 120
Dallas, TX 75201
Attn: Ms. Rhenda Addison
12.3 Construction. Words of any gender used in this Agreement shall be
held and construed to include any other gender, and words of a singular number
shall be held to include the plural and vice versa, unless the context requires
otherwise.
12.4 Captions. The captions used in connection with the Articles of this
Agreement are for convenience only and shall not be deemed to extend, limit or
otherwise define or construe the meaning of the language of this Agreement.
12.5 No Other Parties. Nothing in this Agreement, express or implied, is
intended to confer upon any person, other than the parties hereto and their
respective successors and assigns, any rights or remedies under or by reason of
this Agreement.
12.6 Amendments. This Agreement may be amended only by a written
instrument executed by Seller and Buyer (or Buyer's assignee or transferee).
12.7 Severability. If any provision of this Agreement or application to
any party or circumstance shall be determined by any court of competent
jurisdiction to be invalid and unenforceable to any extent, the remainder of
this Agreement or the application of such provision to such person or
circumstances, other than those as to which it is so determined invalid or
unenforceable, shall not be affected thereby, and each provision hereof shall be
valid and shall be enforced to the fullest extent permitted by law.
12.8 Applicable Law. This Agreement shall be construed under and in
accordance with the laws of state in which the Property is located.
12.9 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be an original but such counterparts together
shall constitute one and the same instrument notwithstanding that both Buyer and
Seller are not signatory to the same counterpart.
12.10 Time of the Essence. Time is expressly declared to be of the essence
of this Agreement, provided, however that in the event any date hereunder falls
on a Saturday, Sunday or legal holiday, the date applicable shall be the next
business day.
12.11 No Personal Liability. The obligations of Seller hereunder shall be
binding only on the Property and neither Buyer nor anyone claiming by, through
or under Buyer shall be entitled to obtain any judgment extending liability
beyond the Property or creating personal liability on the part of the partners
of the Seller or of the officers, directors, shareholders, advisors or agents of
Seller or Seller's partners or any of their successors.
12.12 No Recordation. Without the prior written consent of Seller, there
shall be no recordation of either this Agreement or any memorandum hereof, or
any affidavit pertaining hereto, and any such recordation of this Agreement or
memorandum hereto by Purchaser without the prior written consent of Seller shall
constitute a default hereunder by Buyer, whereupon this Agreement shall, at the
option of Seller, terminate and be of no further force and effect. Upon
termination, the Escrowed Amount shall be immediately delivered to Seller,
whereupon the parties shall have no further duties or obligations to one another
except as otherwise specifically provided herein.
12.13 Waiver. The excuse or waiver of the performance by a party of any
obligation of the other party under this Agreement shall only be effective if
evidenced by a written statement signed by the party so excusing or waiving. No
delay in exercising any right or remedy shall constitute a waiver thereof, and
no waiver by Seller or Buyer of the breach of any covenant of this Agreement
shall be construed as a waiver of any preceding or succeeding breach of the same
or any other covenant or condition of this Agreement.
12.14 Binding On Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Buyer shall have the right to assign this Agreement to a
newly formed Delaware limited liability company in which the Buyer is the
managing member. No such assignment shall relieve the Buyer of any liability
hereunder.
12.15 Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the transactions contemplated herein,
and it supersedes all prior discussions, understandings or agreements between
the parties. All Exhibits and Schedules attached hereto are a part of this
Agreement and are incorporated herein by reference.
12.16 Construction of Agreement. This Agreement shall not be construed
more strictly against one party than against the other merely by virtue of the
fact that it may have been prepared primarily by counsel for one of the parties,
it being recognized that both Buyer and Seller have contributed substantially
and materially to the preparation of this Agreement.
12.17 Further Instruments. Each party, promptly upon the request of the
other, shall execute and have acknowledged and delivered to the other or to
Escrow Agent, as may be appropriate, any and all further instruments reasonably
requested or appropriate to evidence or give effect to the provisions of this
Agreement and which are consistent with the provisions of this Agreement.
12.18 Buyer Represented by Counsel. Buyer hereby represents and warrants
to Seller that (i) Buyer is not in a significantly disparate bargaining position
in relation to Seller, (ii) Buyer is represented by legal counsel in connection
with the transaction contemplated by this Agreement, and (iii) Buyer is buying
the Property for business, commercial, investment or other similar purpose and
not for use as Buyer's residence.
12.19 Preparation of Documents. All of the documents to be executed at the
Closing shall be in the form prepared to the reasonable satisfaction of Seller's
and Buyer's counsel and delivered to Buyer on or before five (5) days prior to
the Closing Date, provided that the failure to timely deliver such documents
shall not constitute a default by Seller hereunder.
12.20 Seller's Necessary Approvals. Buyer acknowledges that Seller, as of
the date of this Agreement, needs to obtain the approval of the Board of
Directors of Fourth Income Properties Fund, Inc., the general partner of
Arlington Towne Oaks Associates and PaineWebber Income Properties Four Limited
Partnership to proceed with this transaction (the "Neccessary Approvals").
Notwithstanding any other provision of this Agreement, Seller's obligation to
proceed with the transaction contemplated in this Agreement shall be contingent
upon Seller obtaining the Necessary Approvals. Seller covenants and agrees, upon
the execution and unconditional delivery of this Agreement by the Buyer,
together with the funding of the Deposit, to promptly apply for and diligently
pursue the Necessary Approvals. In the event the Necessary Approvals have not
been received by Seller by 5:00 p.m. on June 26, 1998, Seller shall so notify
Buyer and Escrow Agent, and Escrow Agent shall return the Escrowed Amount to
Buyer, Seller shall reimburse Buyer for actual costs incurred by Buyer in
connection with its due diligence up to a total amount of $25,000.00, this
Agreement shall terminate and neither Seller nor Buyer shall have any recourse
against the other (except to the extent such recourse arises in connection with
a provision of this Agreement which is intended to survive termination).
ARTICLE 13
IRS FORM 1099-S DESIGNATION
In order to comply with information reporting requirements of Section
6045(e) of the Internal Revenue Code of 1986, as amended, and the Treasury
Regulations thereunder, the parties agree (1) to execute an IRS Form 1099-S
Designation Agreement in the form attached hereto as Schedule D at or prior to
the Closing to designate the Escrow Agent (the "Designee") as the party who
shall be responsible for reporting the contemplated sale of the Property to the
Internal Revenue Service (the "IRS") on IRS Form 1099-S; (2) to provide the
Designee with the information necessary to complete Form 1099-S; (3) that the
Designee shall not be liable for the actions taken under this Agreement, or for
the consequences of those actions, except as they may be the result of gross
negligence or willful misconduct on the part of the Designee; and (4) that the
Designee shall be indemnified by the parties for any costs or expenses incurred
as a result of the actions taken hereunder, except as they may be the result of
gross negligence or willful misconduct on the part of the Designee. The Designee
shall provide all parties to this transaction with copies of the IRS Forms
1099-S filed with the IRS and with any other documents used to complete IRS Form
1099-S.
ARTICLE 14
STATE SPECIFIC REQUIREMENTS
14.1 Waivers of Deceptive Trade Practices Act. Buyer acknowledges and
agrees, on its own behalf and on behalf of its assigns, that the Texas Deceptive
Trade Practices - Consumer Protection Act, Subchapter E of Chapter 17 of the
Texas Business and Commerce Code (the "DTPA"), is not applicable to this
transaction. Accordingly, Buyer's rights and remedies with respect to this
transaction, and with respect to all acts or practices of the other, past,
present or future, in connection with this transaction, shall be governed by
legal principles other than the DTPA. In furtherance thereof, Buyer agrees as
follows:
14.1.1 Buyer represents that it is a business consumer and that it
seeks to acquire by purchase or lease the goods or services that are the
subject of this Agreement for commercial or business use. Buyer further
represents that it has knowledge and experience in financial and business
matters that enable it to evaluate the merits and risks of the business
transaction that is the subject of this Agreement. Buyer also represents
that it is not in a significantly disparate bargaining position in
relation to Seller.
14.1.2 Buyer represents that Buyer and its affiliates, in the
aggregate, have assets of Five Million and No/100 Dollars ($5,000,000.00)
or more according to their most recent financial statements, which were
prepared in accordance with generally accepted accounting principles;
14.1.3 Buyer represents that it has been represented by legal
counsel in seeking or acquiring the goods or services that are the subject
of this Agreement and that the transaction contemplated by this Agreement
does not involve the purchase or lease of a family residence occupied or
to be occupied as the residence of Buyer.
14.1.4 Buyer agrees, on its own behalf and on behalf of its assigns,
that all of its rights and remedies under the DTPA are WAIVED AND
RELEASED, including specifically, without limitation, all rights and
remedies resulting from or arising out of any and all acts or practices of
Seller in connection with this transaction, whether such acts or practices
occur before or after the execution of this Agreement; provided, however,
notwithstanding anything to the contrary herein, in accordance with
Section 17.42 of the DTPA, Buyer does not waive Section 17.555 of the
DTPA.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first set forth above.
SELLER:
ARLINGTON TOWNE OAKS ASSOCIATES, a Texas general
partnership
By: PaineWebber Income Properties Four Limited
Partnership
By: Fourth Income Properties Fund, Inc.
By: /s/ Peter F. Sullivan
---------------------
Name: Peter F. Sullivan
Title: Vice President
<PAGE>
BUYER:
FSC REALTY, LLC, a California limited liability
company
By: /s/ Stanley R. Fimberg
----------------------
Stanley R. Fimberg
Managing Member
<PAGE>
ESCROW AGENT:
REPUBLIC TITLE OF TEXAS, INC.
By: /s/ Rhenda Addison
------------------
Name: Rhenda Addison
Title: Vice President
<PAGE>
FIRST AMENDMENT
TO
PURCHASE AND SALE
This FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT (this "Amendment") is
entered into between ARLINGTON TOWNE OAKS ASSOCIATES, a Texas general
partnership ("Seller"), and FSC REALTY, LLC, a California limited liability
company ("Buyer"), effective as of July 22, 1998.
WHEREAS, Seller and Buyer entered into that certain Purchase and Sale
Agreement executed by Buyer and Seller effective as of June 19, 1998 (the
"Agreement") for that certain property known as Bristol Pointe Apartments
located in Arlington, Texas (the "premises");
WHEREAS, Seller and Buyer desire to amend the Agreement to extend the
Closing Date and change the Purchase Price;
NOW, THEREFORE, for and in consideration of the foregoing premises and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged and confessed, Seller and Buyer hereby agree as follows:
1. Seller and Buyer each confirms the truth and accuracy of the recitals, each
of which are made part of this Amendment.
2. All initial capitalized terms not defined herein shall have the meaning
ascribed to such terms in the Agreement.
3. Article 1 of the Agreement is hereby modified as follows:
The definition of Purchase Price shall be changed to $11,300,000.00.
4. Section 3.1 of the Agreement is hereby modified as follows:
The third and fourth sentences are hereby deleted in their entirety, and
the following sentences added to Section 3.1 in replacement of those
deleted sentences:
"Notwithstanding anything to the contrary contained herein, the
Initial Deposit and the Final Deposit shall be nonrefundable unless
Seller is in default under Section 10.1 hereof. As of July 27, 1998,
Buyer shall immediately deposit available funds with the Escrow
Agent in the sum of One Hundred Thousand ($100,000.00) Dollars (the
"Final Deposit") to further secure Buyer's obligation under this
Agreement."
5. Section 7.3 of the Agreement is hereby modified as follows:
The first sentence of Section 7.3 is deleted in its entirety and the
following sentence is added in replacement of that deleted sentence:
"Subject to Seller's right to extend the Closing Date as provided in
Section 7.1 and Buyer's right to extend the Closing Date as provided
in Section 12.21, the consummation of the purchase and sale
contemplated in this Agreement (the "Closing") shall occur through
an escrow closing arrangement as described in Schedule F attached
hereto on August 12, 1998 (the "Closing Date"), at the office of the
Escrow Agent or through the escrow closing arrangement set forth in
the Form of Escrow Closing Instructions attached hereto Exhibit F."
6. The following new Section 12.21 Buyer's Option to Extend shall be added to
Article 12 of the Agreement:
"Buyer shall have the option to extend the Closing Date to August
19, 1998, by written notice to Seller, received by Seller on or
before August 12, 1998. At the time Buyer gives such notice to
Seller, Buyer shall immediately deposit available funds with the
Escrow Agent in the sum of One Hundred Thousand ($100,000.00)
Dollars (the "Extension Deposit") to further secure Buyer's
obligations hereunder. The Extension Deposit, if any, together with
the Initial Deposit, the Final Deposit and all interest accrued
thereon shall collectively be referred to as the "Escrow Amount".
The Escrowed Amount shall be applied to the Purchase Price if
Closing occurs as provided in Section 3.2(c) above, or shall be
retained by Seller if the Closing does not occur except is due to a
default of Seller hereunder."
7. Except as modified hereby, the terms and conditions of the Agreement shall
continue in full force and effect. This Amendment may be executed in
multiple counterparts, each of which shall be an original and all of which
together shall constitute one agreement. In order to expedite the
execution of this Amendment, a facsimile signature shall be binding and
have the same effect as an original signature.
[SIGNATURES ON NEXT PAGE]
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amendment as of the day
and year first said above.
SELLER:
ARLINGTON TOWNE OAKS ASSOCIATES, a Texas
general partnership
By: PaineWebber Income Properties Four
Limited Partnership
By: Fourth Income Properties
Fund, Inc.
By: /s/ Peter F. Sullivan
---------------------
Name: Peter F. Sullivan
Title: Vice President
BUYER:
FSC REALTY, LLC, a California limited
liability company
By: /s/ Stanley R. Fimberg
----------------------
Stanley R. Fimberg, Managing Member
<PAGE>
DEED
STATE OF TEXAS
COUNTY OF TARRANT
KNOW ALL PERSONS BY THESE PRESENTS:
THAT ARLINGTON TOWNE OAKS ASSOCIATES, a Texas general partnership
("Grantor"), for and in consideration of the sum of Ten Dollars ($10.00) and
other good and valuable consideration to it in hand paid by FSC/BRISTOL POINTE
ASSOCIATES LIMITED PARTNERSHIP, a Texas limited partnership ("Grantee"), having
a mailing address of 9777 Wilshire Boulevard, Suite 710, Beverly Hills,
California 90212, the receipt and sufficiency of which consideration are hereby
acknowledged, and the execution and delivery by Grantee to AMRESCO Capital, L.P.
("Lender") of a Multifamily Note of Grantee payable to the order of Lender in
the original principal amount of $9,400,000.00 secured by a Vendor's Lien hereby
retained in favor of Lender and further secured by the lien of a Deed of Trust
in favor of Lender, has GRANTED, SOLD AND CONVEYED, and by these presents does
hereby GRANT, SELL AND CONVEY, unto Grantee all of the real property described
in Exhibit A attached hereto and made a part hereof for all purposes, together
with the buildings, structures, improvements and fixtures (collectively the
"Improvements") now located thereon and the rights appurtenant thereto,
including, to the extent owned or held by Grantor, mineral rights, utility and
waste-water capacity rights, rights under reciprocal easements and restrictive
covenants, rights under any recorded or unrecorded instruments benefiting the
real property, strips, gores, and adjoining tracts owned by Grantor and
reversionary rights (collectively with the real property and the Improvements,
the "Property").
This conveyance is made subject to (i) those matters shown in the public
records as of May 14, 1998, but only to the extent that the same are valid and
existing and affect the Property and (ii) those exceptions and encumbrances set
forth in Exhibit B attached hereto and made a part hereof for all purposes, but
only to the extent that the same are valid and existing and affect the Property
(collectively, the "Permitted Exceptions").
TO HAVE AND TO HOLD the Property, as aforesaid, unto Grantee, its
successors and assigns, forever; and Grantor does hereby bind itself and its
successors and assigns, to WARRANT AND FOREVER DEFEND, all singular, the
Property unto Grantee, its successors and assigns, against every person
whomsoever lawfully claiming, or to claim the same, or any part thereof, by,
through or under Grantor, but not otherwise; subject to the Permitted
Exceptions.
GRANTEE, BY GRANTEE'S ACCEPTANCE OF THIS SPECIAL WARRANTY DEED
ACKNOWLEDGES THAT GRANTEE HAS INSPECTED THE PROPERTY AND IS SATISFIED AS TO THE
CONDITION OF SAME AND THAT GRANTEE ACCEPTS THE PROPERTY "AS IS" AND "WHERE IS"
AND WITH ALL FAULTS, WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS,
IMPLIED, STATUTORY OR OTHERWISE, INCLUDING, SPECIFICALLY, WITHOUT LIMITATION,
ANY WARRANTY AS TO HABITABILITY, SUITABILITY, MERCHANTABILITY, CONDITIONED OR
FITNESS FOR A PARTICULAR PURPOSE, SAVE AND EXCEPT THE SPECIAL WARRANTY OF TITLE
CONTAINED HEREIN OR AS OTHERWISE SET FORTH IN SECTION 11.4 IN THAT CERTAIN
PURCHASE AND SALE AGREEMENT DATED AS OF JUNE 19, 1998, BY AND BETWEEN GRANTOR
AND FSC REALTY, LLC, PREDECESSOR TO GRANTEE.
[Signatures on next page.]
<PAGE>
WITNESS Grantor's hand this 14th day of August, 1998.
GRANTOR:
ARLINGTON TOWNE OAKS ASSOCIATES, a Texas
general partnership
By: PaineWebber Income Properties
Four Limited Partnership, a
Delaware limited partnership, a
general partner
By: Fourth Income Properties
Fund, Inc., a Delaware
corporation, its general
partner
By:/s/ Peter F. Sullivan
---------------------
Name: Peter F. Sullivan
Title: Vice President
By: Fourth Income Properties
Fund, Inc., a Delaware
corporation, a general partner
By:/s/ Peter F. Sullivan
---------------------
Name: Peter F. Sullivan
Title: Vice President
<PAGE>
COMMONWEALTH OF MASSACHUSETTS
COUNTY OF SUFFOLK
This instrument was acknowledged before me on this 14th day of August,
1998, by Peter F. Sullivan, as Vice President of Fourth Income Properties Fund,
Inc., a Delaware corporation, as a general partner and on behalf of Arlington
Towne Oaks Associates, a Texas general partnership and as general partner of
PaineWebber Income Properties Four Limited Partnership, a Delaware limited
partnership, as a general partner and on behalf of said Arlington Towne Oaks
Associates.
/s/ Linda Z. MacDonald
------------------
NOTARY PUBLIC -- MASSACHUSETTS
Printed Name: Linda Z. MacDonald
My Commission Expires: November 12, 1999
<PAGE>
BRISTOL POINTE APARTMENTS
ARLINGTON, TEXAS
ASSIGNMENT AND ASSUMPTION
OF LEASES AND SECURITY DEPOSITS
THIS ASSIGNMENT AND ASSUMPTION OF LEASES AND SECURITY DEPOSITS (this
"Assignment") is entered into as of the 14th of August, 1998, between Arlington
Towne Oaks Associates, a Texas general partnership ("Assignor"), with an address
c/o PaineWebber Income Properties Four Limited Partnership, 265 Franklin Street,
Boston, Massachusetts 02110 and FSC/Bristol Pointe Associates Limited
Partnership, a Texas limited partnership ("Assignee"), with an address of 9777
Wilshire Boulevard, Suite 710, Beverly Hills, California 90212.
1. Real Property. The "Real Property" shall mean the Land and
Improvements.
2. Land. The "Land" shall mean all of the land described on Exhibit A
attached hereto, together with all privileges, rights, easements, and
appurtenances belonging to such land and all right, title and interest (if any)
of Seller in and to any streets, alleys, passages, and other rights-of-way or
appurtenances included in, adjacent to or used in connection with such land and
all right, title and interest (if any) of Seller in all mineral and development
rights appurtenant to such land.
3. Improvements. The "Improvements" shall mean all buildings, structures
and other improvements situated upon the Land and all fixtures, systems and
facilities owned by Seller and located on the Land.
4. Leases. The "Leases" means all leases, tenancies, rental agreements and
occupancy agreements affecting the Real Property which are described in Exhibit
B attached to this Assignment.
5. Tenant Deposits. "Tenant Deposits" means those security deposits held
by or for Assignor on account of tenants under the Leases as such deposits and
with respect to which Assignee received a credit at the closing of the
transaction with respect to which this Assignment has been executed and
delivered. The Tenant Deposits are set forth on attached Exhibit B.
6. Assignment. For good and valuable consideration received by Assignor,
the receipt and sufficiency of which are hereby acknowledged, Assignor hereby
grants, transfers and assigns to Assignee the entire right, title and interest
of Assignor in and to the Leases and the Tenant Deposits.
7. Assumption. This Assignment is made on and subject to the following
terms and conditions:
a. It is specifically agreed that Assignor shall not be responsible to the
lessees under the Leases for discharge and performance of any duties and
obligations to be performed and/or discharged by the lessor thereunder after the
effective date hereof. By its acceptance of this Assignment, Assignee hereby
accepts and agrees, for the benefit of Assignor only, to perform all of the
terms, covenants and conditions of the Leases on the part of the lessor therein
required to be performed, from and after the effective date hereof, but not
prior thereto, including, but not limited to, the obligation to repay in
accordance with the terms of the Leases to the lessees thereunder any security
and prepaid rental deposits to the extent (and only to the extent) of the amount
of cash delivered or credited to Assignee by Assignor (with respect to such
security and prepaid rental deposits) in connection with the acquisition of the
Real Property by Assignee from Assignor of even date herewith. The foregoing
assumption shall not be construed as an assumption of personal liability with
respect to the Leases as between Assignee and the respective lessees or any
other third party.
b. It is further agreed that Assignee is not responsible to the lessees
under the Leases for the discharge of the lessor's obligations thereunder prior
to the date hereof. The transfer of security deposits and advance rentals
contemplated hereby is made expressly subject to applicable laws relating to
such transfers and the maintenance and handling of such funds.
8. Attorneys' Fees. If either Assignee or Assignor, or their respective
successors or assigns, file suit to enforce the obligations of the other party
under this Assignment, the prevailing party shall be entitled to recover the
reasonable fees and expenses of its attorneys.
9. Successors and Assigns. This Assignment shall be binding upon and inure
to the benefit of Assignor and Assignee and their respective successors and
assigns.
10. Counterparts. This Assignment may be executed in multiple
counterparts, any or all of which may contain the signatures of fewer than all
of the parties, but all of which shall constitute a single instrument.
[SIGNATURES ON NEXT PAGE]
<PAGE>
IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this
Assignment the day and year first above written.
SELLER:
ARLINGTON TOWNE OAKS ASSOCIATES, a Texas
general partnership
By: PaineWebber Income Properties Four
Limited Partnership, a Delaware
limited partnership, a general
partner
By: Fourth Income Properties Fund,
Inc., a Delaware corporation,
its general partner
By: /s/ Peter F. Sullivan
---------------------
Name: Peter F. Sullivan
Title: Vice President
By: Fourth Income Properties Fund, Inc.,
a Delaware corporation, a general
partner
By: /s/ Peter F. Sullivan
---------------------
Name: Peter F. Sullivan
Title: Vice President
<PAGE>
PURCHASER:
FSC/BRISTOL POINTE ASSOCIATES LIMITED
PARTNERSHIP, a Texas limited partnership
By: FSC Realty, LLC, a California
limited liability company, its
general partner
By: /s/ Stanley R. Fimberg
----------------------
Name: Stanley R. Fimberg
Title: Managing Member
<PAGE>
BRISTOL POINTE APARTMENTS
ARLINGTON, TEXAS
ASSIGNMENT AND ASSUMPTION
OF CONTRACTS
THIS ASSIGNMENT AND ASSUMPTION OF CONTRACTS (this "Assignment") is entered
into as of the 14th day of August, 1998, between Arlington Towne Oaks
Associates, a Texas general partnership, ("Assignor"), with an address c/o
PaineWebber Income Properties Four Limited Partnership, 265 Franklin Street,
Boston, Massachusetts 02110 and FSC/Bristol Pointe Associates Limited
Partnership, a Texas limited partnership ("Assignee"), with an address of 9777
Wilshire Boulevard, Suite 710, Beverly Hills, California 90212.
1. Real Property. The "Real Property" shall mean the Land and
Improvements.
2. Land. The "Land" shall mean all of the land described on Exhibit A attached
hereto, together with all privileges, rights, easements, and appurtenances
belonging to such land and all right, title and interest (if any) of Seller in
and to any streets, alleys, passages, and other rights-of-way or appurtenances
included in, adjacent to or used in connection with such land and all right,
title and interest (if any) of Seller in all mineral and development rights
appurtenant to such land.
3. Improvements. The "Improvements" shall mean all buildings, structures and
other improvements situated upon the Land and all fixtures, systems and
facilities owned by Seller and located on the Land.
4. Contracts. "Contracts" shall mean all of Assignor's rights, if any, in the
contracts listed on Exhibit B attached hereto, being all service, supply and
equipment rental, management, operating and leasing contracts affecting the Real
Property, to the extent that Seller is entitled to transfer the same to Buyer.
5. Assignment. For good and valuable consideration received by Assignor the
receipt and sufficiency of which is hereby acknowledged, Assignor hereby grants,
transfers and assigns to Assignee the entire right, title and interest of
Assignor in and to the Contracts.
6. Assumption. Assignee hereby assumes the covenants, agreements and obligations
of Assignor under the Contracts which are applicable to the period and required
to be performed from and after the date of this Assignment, but not otherwise.
Assignor shall remain liable for the covenants, agreements and obligations of
Assignor under the Contracts which are applicable to the period and required to
be performed prior to the date of this Assignment.
7. Indemnity. Assignee hereby agrees to indemnify and hold Assignor, its
successors and assigns, harmless against all loss, costs, expenses, liabilities,
damages, actions, causes of action, demands or claims (including, without
limitation, attorneys' fees and disbursements) arising out of or in connection
with the obligations of Assignor as vendee under the Contracts which are
applicable to the period and required to be performed from and after the date of
this Assignment. Assignor hereby agrees to indemnify and hold Assignee, its
successors and assigns, harmless against all loss, costs, expenses, liabilities,
damages, actions, causes of action, demands or claims (including, without
limitation, attorneys' fees and disbursements) arising out of or in connection
with the obligations of Assignor as vendee under the Contracts which are
applicable to the period and required to be performed prior to the date of this
Assignment.
8. Attorneys' Fees. If either Assignee or Assignor or their respective
successors or assigns, file suit to enforce the obligations of the other party
under this Assignment, the prevailing party shall be entitled to recover the
reasonable fees and expenses of its attorneys.
9. Successors and Assigns. This Assignment shall be binding upon and inure to
the benefit of Assignor and Assignee and their respective successors and
assigns.
10. Counterparts. This Assignment may be executed in multiple counterparts, any
or all of which may contain the signatures of fewer than all of the parties, but
all of which shall constitute a single instrument.
[SIGNATURES ON NEXT PAGE]
<PAGE>
IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this
Assignment the day and year first above written.
SELLER:
ARLINGTON TOWNE OAKS ASSOCIATES, a Texas
general partnership
By: PaineWebber Income Properties
Four Limited Partnership, a
Delaware limited partnership, a
general partner
By: Fourth Income
Properties Fund, Inc., a
Delaware corporation, its
general partner
By: /s/ Peter F. Sullivan
---------------------
Name: Peter F. Sullivan
Title: Vice President
By: Fourth Income Properties
Fund, Inc., a Delaware
corporation, a general partner
By: /s/ Peter F. Sullivan
---------------------
Name: Peter F. Sullivan
Title: Vice President
<PAGE>
PURCHASER:
FSC/BRISTOL POINTE ASSOCIATES LIMITED
PARTNERSHIP, a Texas limited partnership
By: FSC Realty, LLC, a California
limited liability company, its
general partner
By: /s/ Stanley R. Fimberg
-----------------------
Name: Stanley R. Fimberg
Title: Managing Member
<PAGE>
BRISTOL POINTE APARTMENTS
ARLINGTON, TEXAS
BILL OF SALE
THIS BILL OF SALE (this "Bill of Sale") is executed as of the 14th day of
August, 1998, by Arlington Towne Oaks Associates, a Texas general partnership
("Seller') with an address c/o PaineWebber Income Properties Four Limited
Partnership, 265 Franklin Street, Boston, Massachusetts 02110, in favor of
FSC/Bristol Pointe Associates Limited Partnership, a Texas limited partnership
("Buyer"), with an address of 9777 Wilshire Boulevard, Suite 710, Beverly Hills,
California 90212.
1. Real Property. The "Real Property" shall mean the Land and Improvements.
2. Land. The "Land" shall mean all of the land described on Exhibit A attached
hereto, together with all privileges, rights, easements, and appurtenances
belonging to such land and all right, title and interest (if any) of Seller in
and to any streets, alleys, passages, and other rights-of-way or appurtenances
included in, adjacent to or used in connection with such land and all right,
title and interest (if any) of Seller in all mineral and development rights
appurtenant to such land.
3. Improvements. The "Improvements" shall mean all buildings, structures and
other improvements situated upon the Land and all fixtures, systems and
facilities owned by Seller and located on the Land.
4. Personal Property. The "Personal Property" shall mean all furniture,
carpeting, appliances, equipment, machinery, inventories, supplies, signs and
other tangible personal property of every kind and nature, if any, owned by
Seller and installed, located at and used in connection with the ownership,
occupation and operation of the Real Property, including, without limitation,
the Personal Property listed on Exhibit B attached hereto. Personal Property
specifically excludes: (i) any items of personal property owned by tenants at or
on the Real Property, and (ii) any items of personal property owned by third
parties and leased to Seller.
5. Sale. For good and valuable consideration received by Seller, the receipt and
sufficiency of which are hereby acknowledged, Seller hereby sells, assigns and
transfers the Personal Property to Purchaser.
6. As Is. The Personal Property is sold, transferred and delivered by Seller and
hereby accepted by Purchaser in its current "as is" condition, without any
warranties, covenants or representations by Seller. Without limiting the
generality of the foregoing, the Personal Property is transferred, sold and
delivered without any express or implied warranty of merchantability or fitness.
<PAGE>
IN WITNESS WHEREOF, Seller has executed this Bill of Sale the day and year
first above written.
SELLER:
ARLINGTON TOWNE OAKS ASSOCIATES, a Texas
general partnership
By: PaineWebber Income Properties Four
Limited Partnership, a Delaware
limited partnership, a general
partner
By: Fourth Income Properties Fund,
Inc., a Delaware corporation,
its general partner
By: /s/ Peter F. Sullivan
---------------------
Name: Peter F. Sullivan
Title: Vice President
By: Fourth Income Properties Fund,
Inc., a Delaware corporation, a
general partner
By: /s/ Peter F. Sullivan
---------------------
Name: Peter F. Sullivan
Title: Vice President
