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) July 16, 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
Charter Oak Apartments, Creve Coeur, Missouri
Disposition Date - July 16, 1998
On July 16, 1998, Charter Oak Associates, a joint venture in which Paine
Webber Income Properties Four Limited Partnership ("the Partnership") has an
interest, sold the property known as Charter Oak Apartments located in Creve
Coeur, Missouri, to an unrelated third party, Realty Ventures I Inc., a Virginia
corporation, for $21.4 million. The Partnership received net proceeds of
approximately $8,703,000 after deducting closing costs of approximately
$251,000, closing proration adjustments of approximately $370,000, the repayment
of the existing first mortgage loan of approximately $9,898,000, related accrued
interest of approximately $61,000 and a payment of approximately $2,117,000 to
the Partnership's co-venture partner for its share of the sales proceeds in
accordance with the joint venture agreement. In addition to the net sale
proceeds, the Partnership will receive its share of the net cash flow from the
operations of Charter Oak through the date of the sale upon the dissolution of
the joint venture, which is expected to occur within the next 2- to -3 months.
As discussed further in the Partnership's Quarterly Report on Form 10-Q for
the period ended March 31, 1998, the Partnership and its co-venture partner had
selected a local brokerage firm with a strong background in selling apartment
properties in the St. Louis area to market the Charter Oak property for sale.
Subsequent to the end of the second fiscal quarter a marketing package was
prepared, and comprehensive sale efforts began in May 1998. As a result of those
efforts, twenty-nine offers were received. The prospective purchasers were then
requested to submit best and final offers. Eight 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 and its
co-venture partner selected an offer. A purchase and sale agreement was
negotiated with this prospective buyer and the sale transaction was closed on
July 16, 1998. Management believed that a current sale of the Charter Oak
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. The Partnership
anticipates that it will distribute all of the net sales proceeds from the sale
of Charter Oak on or before October 15, 1998 after it receives final
documentation from HUD of its formal approval of the prepayment of the
HUD-insured first mortgage loan which encumbered Charter Oak. The receipt of
such approval should be a mere formality. The Partnership expects to receive HUD
approval by mid-September 1998.
Subsequent to the sale of the Charter Oak property, the Partnership's only
remaining real estate asset is its joint venture interest in the Bristol Pointe
Apartments. As discussed further in the Partnership's most recent quarterly
report on Form 10-Q, this property is in the process of being actively marketed
with a goal of completing a sale and a liquidation of the Partnership prior to
the end of calendar 1998. There are no assurances, however, that the sale of the
remaining asset and the liquidation of the Partnership will be completed within
this time frame.
ITEM 7 - Financial Statements and Exhibits
(a) Financial Statements: None
(b) Exhibits:
(1) Purchase and Sale Agreement by and between Charter Oak Associates
and Realty Ventures I, Inc., dated July 6, 1998.
<PAGE>
FORM 8-K
CURRENT REPORT
PAINE WEBBER INCOME PROPERTIES FOUR LIMITED PARTNERSHIP
(2) Unanimous Written Consent of the General Partners, Charter Oak
Associates, dated July 16, 1998.
(3) Special Warranty Deed by and between Charter Oak Associates and
MREF II Property IV, LLC, dated July 16, 1998.
(4) Bill of Sale and General Assignment by Charter Oak Associates in
favor of MREF II Property IV, LLC, dated July 16, 1998.
(5) Assignment and Assumption of Leases and Security Deposits between
Charter Oak Associates and MREF II Property IV, LLC, dated July
16, 1998.
(6) Acknowledgement and Indemnification Agreement by MREF II Property
IV, LLC for the benefit of Charter Oak Associates, Paine Webber
Income Properties Four Limited Partnership and Paragon/Charter
Oaks Associates, Ltd., dated July 16, 1998.
(7) Disbursements Summary/Balance Sheet for Charter Oaks Associates
and MREF II Property IV, LLC, dated July 16, 1998.
(8) Seller's Settlement Statement between Charter Oak Associates and
MREF II Property IV, LLC, dated July 16, 1998.
(9) Purchaser's Settlement Statement between Charter Oak Associates
and MREF II Property IV, LLC, dated July 16, 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: July 30, 1998
<PAGE>
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
CHARTER OAK ASSOCIATES ("SELLER")
AND
REALTY VENTURES I, INC. ("BUYER")
THE CHARTER OAK APARTMENTS
11907 Charter House Lane
St. Louis County, Missouri 63141
<PAGE>
TABLE OF CONTENT
Page
----
ARTICLE 1..................................................................1
DEFINITIONS..........................................................1
ARTICLE 2..................................................................4
PURCHASE AND SALE....................................................4
ARTICLE 3..................................................................4
PURCHASE PRICE; DEPOSIT; ADJUSTMENTS.................................4
ARTICLE 4..................................................................7
PRECLOSING OPERATION.................................................7
ARTICLE 5..................................................................7
ACCESS, INSPECTION, DILIGENCE........................................7
ARTICLE 6..................................................................12
TITLE AND SURVEY.....................................................12
ARTICLE 7..................................................................13
CONDITIONS PRECEDENT AND CLOSING.....................................13
ARTICLE 8..................................................................17
CASUALTY AND CONDEMNATION............................................17
ARTICLE 9..................................................................18
BROKERAGE COMMISSIONS................................................18
ARTICLE 10.................................................................18
DEFAULT, TERMINATION AND REMEDIES....................................18
ARTICLE 11.................................................................20
REPRESENTATIONS AND WARRANTIES.......................................20
ARTICLE 12.................................................................24
MISCELLANEOUS........................................................24
ARTICLE 13.................................................................28
IRS FORM 1099-S DESIGNATION..........................................28
ARTICLE 14.................................................................28
INTENTIONALLY OMITTED................................................28
<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 - DUE DILIGENCE DOCUMENTS
<PAGE>
PURCHASE AND SALE AGREEMENT
Charter Oak Apartments
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into as of
the 6th day of July, 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: Realty Ventures I, Inc., a Missouri corporation
- -----
Deposit: See Section 3.1
- -------
Documents: Those materials listed on Exhibit G 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
- ---------------
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.
Intangible Property: All of Seller's right, and, to the extent
- ------------------- available, 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 "Charter
Oak 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 (including all
leasing materials, literature and other promotional
materials), 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 Charter Oak Apartments,
located at 11907 Charter House Lane, St. Louis County,
Missouri 63141.
Property Contracts: All of Seller's 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: $21,400,000
- --------------
Real Property: The Land and the Improvements.
- -------------
Seller: Charter Oak Associates, a Missouri general
- ------ partnership.
Tenant Deposits: Seller's rights to unapplied security deposits under
- --------------- the Leases.
Title Company: Title Insurer's Agency, Inc.
- -------------
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 Initial Non-Refundable, Non-Interest-Bearing Payment to Seller.
Contemporaneously with the execution and delivery of this Agreement (and as a
condition precedent to the effectiveness of this Agreement), Buyer shall deliver
to Seller a non-refundable payment (the "Payment") in the amount of Fifty
Thousand Dollars ($50,000) which amount shall be deemed earned upon the
execution and delivery of this Agreement by Seller and Buyer. In all events,
Seller shall retain the Payment, provided, however, that if the Closing occurs,
the amount of the Payment shall be credited towards the Purchase Price.
3.2 Deposit. Provided that Buyer does not terminate this Agreement
pursuant to Section 5.2 herein, on or prior to 5:00 p.m. on the Diligence Date,
Buyer shall deposit immediately available funds with the Title Company
(hereinafter sometimes referred to as the "Escrow Agent") the sum of Two Hundred
Fifty Thousand and No/100 Dollars ($250,000) (the "Deposit") to secure Buyer's
obligations under this Agreement. The Escrow Agent shall hold the Deposit in a
segregated interest bearing money market account with an FDIC insured bank
reasonably acceptable to Buyer and Seller. The Deposit and all interest accrued
on the 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.
3.3 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").
3.4 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. 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.
3.5 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.
3.6 Utility Proration. To the extent reasonably feasible, the Seller shall
request that the property manager at the Property 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. Buyer shall forward to Seller a check in the
amount of all past due rents collected by Buyer and attributable to Seller's
period of ownership, if any, net of Buyer's costs of collection thereof, within
thirty (30) days of the Closing Date.
3.7 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, 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.
In addition to the foregoing, at Closing the Purchase Price shall be increased
by the amount of uncollected or past due rent; provided, however, that no
adjustment shall be made for rent which is more than one (1) month past due.
Seller shall be entitled to attempt to collect all rents and other charges which
are more than one (1) month past due but shall not be entitled to pursue
eviction proceedings in connection with such collection efforts.
3.8 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.
3.9 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,
if any, (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, (vi) all costs allocable to preparation of the survey
(approximately $6,000), 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.
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. 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.
<PAGE>
ARTICLE 5
ACCESS, INSPECTION, DILIGENCE
5.1 Access/Purchaser's Responsibilities/Purchaser's Indemnity.
(a) Buyer acknowledges receipt of the Documents. 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. Seller also agrees to make all
Documents available to Buyer or Buyer's agents during normal business
hours for review and copying at Buyer's expense upon advance written
notice to Seller from the date hereof through the Diligence Date.
(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 and other
information or materials relating to the Property 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.
Buyer shall complete its due diligence on or before the date which is five
(5) days from the date hereof (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, the Escrow Agent shall return the
Escrowed Amount to the Buyer 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, 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) Buyer has delivered to Seller a copy of the Phase I (as defined
in Exhibit G). If such Phase I indicates the existence or reasonable
potential existence of any Hazardous Substance contamination of any
portion of the Property, Seller may terminate this Agreement by giving
written notice to Buyer within five (5) 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 Escrowed
Amount 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's agents, representatives or designees by Seller or Seller's agents,
representatives or employees pursuant to this Agreement.
(c) The return of the Escrowed Amount 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 IN SECTION 11.2, 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 an ALTA Owner's 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, within two (2) business days of the date
hereof, 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, unless Seller specifically agrees to cure a Title Objection,
Seller shall not be obligated to incur any costs or expenses in excess of
$10,000 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 "Permitted Exceptions."
6.2 Deed. On the Closing Date, Seller shall convey by good and sufficient
special warranty 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.
<PAGE>
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 to the date
which is ten (10) days following Seller's receipt of final, unconditioned
approval from the lender holding Deed of Trust encumbering the Property for the
prepayment of the outstanding principal balance of such debt, together with a
covenant from such lender to provide to Buyer on the Closing Date a pay-off
letter and customary discharge documents reasonably satisfactory to Seller. 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 the Escrow Agent to return the Escrowed Amount to Buyer 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 23, 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 the following:
(a) A duly executed and acknowledged special warranty 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
$1,000,000 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
Escrowed Amount to Buyer, 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 the Escrow
Agent shall return the Escrowed Amount to Buyer, 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 Ken Aston of Apartment Investment Advisors, Ltd. (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's 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 plus Buyer's actual out-of-pocket
expenses incurred in connection with the transaction contemplated herein up to
the maximum amount of Twenty Thousand and No/100 Dollars ($20,000.00), 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 Missouri corporation, duly organized and in good
standing under the laws of the State of Missouri, is qualified to do
business in the State of Missouri 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 (i) 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 State of
Missouri, 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 Missouri.
(a) Seller has full right, power and authority and is duly
authorized to enter into this Agreement and on the Closing Date, Seller
shall have the full right, power and authority, 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
shall constitute 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 and (ii) the Rent Roll.
(c) Seller has requested that its property manager to make available
to Buyer through the Diligence Date copies of all records and documents
relating to the Property not included within the Documents.
(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; Seller's Knowledge. Whenever a representation is made to
"Seller's knowledge", or a term of similar import, the accuracy of such
representation shall be based solely on the actual knowledge of Peter Sullivan,
without independent investigation or inquiry. Notwithstanding the foregoing, 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: Mr. Peter F. Sullivan
and
Paragon/Charter Oak Associates, Ltd.
c/o Paragon Group
1401 South Brentwood Boulevard, Suite 675
St. Louis, MO 63144
Attn: Mr. Lewis Levey
with a copy to:
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109
Attn: Cara A. Ahola, Esq.
(2) If to Buyer:
Realty Ventures I, Inc.
Michelson Organization
7701 Forsyth, Suite 900
Clayton, MO 63105
Attn: Bruce V. Michelson
with a copy to:
Thomas Coburn
One Mercantile Center
St. Louis, MO 63101
Attn: Michael Lazaroff, Esq.
(3) If to the Escrow Agent:
Title Insurers Agency, Inc.
226 South Meramec Avenue, Suite 100
Clayton, Missouri 63105
Attn: Tracy J. Pauley
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.
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 within two (2) business days of the
date hereof, provided that the failure to timely deliver such documents shall
not constitute a default by Seller hereunder.
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
INTENTIONALLY OMITTED
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first set forth above.
SELLER:
CHARTER OAK ASSOCIATES,
a Missouri general partnership
By: PaineWebber Income Properties Four Limited
Partnership,
a Delaware limited partnership
By: Fourth Income Properties Fund, Inc.,
managing general partner
By: /s/ Peter F. Sullivan
---------------------
Name: Peter F. Sullivan
Title: Vice President
and
By: Paragon/Charter Oak Associates, Ltd.
By: /s/ Lewis A. Levey
------------------
Lewis A. Levey, General Partner
BUYER:
REALTY VENTURES I, INC.
By: /s/ Bruce V. Michelson, Sr.
---------------------------
Bruce V. Michelson, Sr.
President
<PAGE>
ESCROW AGENT:
TITLE INSURERS AGENCY, INC.
By:/s/ Tracy J. Pauley
-------------------
Name: Tracy J. Pauley
Title: Vice President
<PAGE>
JOINDER BY TITLE COMPANY
Title Insurers Agency, Inc., referred to in this Agreement as the Escrow
Agent, hereby acknowledges that it received this Agreement executed by Seller
and Buyer on the __ day of ______, 199_, and accepts the obligations of the
Escrow Agent as set forth herein. It further acknowledges that it received the
Deposit on the __ day of ______, 1998. The Escrow Agent agrees to deposit the
Deposit and to distribute the Escrowed Amount in accordance with the terms and
provisions of this Agreement.
ESCROW AGENT: TITLE INSURERS AGENCY, INC.
By: _____________________________
Name:
Title:
Date:
JOINDER BY BROKER
The undersigned Broker joins herein to evidence such Broker's agreement to
the provisions of Article 9 and to represent to Seller and Buyer that such
Broker (i) knows of no other brokers, salespersons or other parties entitled to
any compensation for brokerage services arising out of this transaction other
than those whose names appear in this Agreement, (ii) has not made any of the
representations or warranties specifically disclaimed by Seller in Section 11.4,
and (iii) is a duly licensed broker in the State of Missouri and is currently
permitted to conduct business in the State of Missouri and be paid a real estate
commission.
BROKER: APARTMENT INVESTMENT ADVISORS, LTD.
BY: ____________________________
Name:
Title:
License No:
Tax Id. No.:
Date:
<PAGE>
EXHIBIT A
The Land
Parcel No. 1: CHARTER OAKS PLAT NO. 1, according to the plat thereof recorded
in Plat Book 126 Pages 84 and 85 of the St. Louis County
Recorder's Office; EXCEPTING THEREFROM that part dedicated to the
City of Creve Coeur recorded in Book 9053 page 2219 and Book 9053
page 2224.
Parcel No. 2: CHARTER OAKS PHASE 2, according to the plat thereof recorded in
Plat book 131 pages 62 and 63 of the St. Louis County Recorder's
Office.
ADDRESS: 11907 Charter House Lane
<PAGE>
CHARTER OAK ASSOCIATES,
A MISSOURI GENERAL PARTNERSHIP
UNANIMOUS WRITTEN CONSENT
OF THE GENERAL PARTNERS
July 16, 1998
The undersigned, being all of the General Partners of Charter Oak
Associates, a Missouri general partnership (the "Partnership"), hereby adopt and
approve the following resolutions and each and every action effected thereby
with the same force and effect as though adopted at a special meeting of the
General Partners:
WHEREAS, PaineWebber Income Partners Four Limited Partnership ("PWIP")
is a general partner of the Partnership;
WHEREAS, Paragon/Charter Oak Associates, Ltd. ("Paragon") is a general
partner of the Partnership;
WHEREAS, PWIP and Paragon deem it to be in the best interests of the
Partnership to sell to Realty Ventures I, Inc., a Missouri corporation (the
"Buyer") certain real property and the improvements thereon, located at 11907
Charter House Lane, St. Louis County, Missouri, which property is known as the
"Charter Oak Apartments" (the "Complex"); and
RESOLVED, that each of PWIP and Paragon hereby: (i) authorizes the sale of
the Complex to the Buyer in accordance with and pursuant to the terms of that
certain Purchase and Sale Agreement, dated as of July 16, 1998 between the
Partnership and the Buyer (the "Purchase Agreement"), and (ii) authorizes the
execution of the Purchase Agreement and the delivery and performance of the
obligations of the Partnership pursuant to the Purchase Agreement, including,
without limitation, the execution and delivery of a Special Warranty Deed, Bill
of Sale and General Assignment, Assignment and Assumption of Leases and Security
Deposits, Assignment and Assumption of Maintenance and Service Agreements,
Certified Rent Roll, FIRPTA Affidavit, Tenant Notice Letters and all other
documents necessary to effectuate the transactions contemplated thereby (all
such documents, known hereinafter as the "Transaction Documents");
RESOLVED, that PWIP is hereby authorized, empowered and directed, for and
on behalf and in the name of the Partnership, as a general partner, to act
singly on behalf of the Partnership to execute, acknowledge and deliver all
Transaction Documents, to take all further actions, pay any and all such sums,
and execute, deliver and, as appropriate, file any and all such agreements,
instruments, documents and certificates as required or contemplated by the
Purchase Agreement or the Transaction Documents, or which PWIP otherwise
determines to be reasonably related to the purposes of the Purchase Agreement or
the Transaction Documents or the consummation of the transactions contemplated
thereby in each case in the name and on behalf of the Partnership as its general
partner, provided that (i) each such agreement, instrument, document, and
certificate contain such terms and conditions, changes therein, additions and
amendments thereto, and deletions therefrom, if any, as shall be determined and
approved by both PWIP and Paragon to be necessary, appropriate, or desirable,
and (ii) Paragon reviews and approves the proposed settlement statement for the
sale prior to the Closing;
RESOLVED, that execution and delivery of the Transaction Documents by PWIP
shall be conclusive evidence of PWIP's and Paragon's approval thereof, and any
such changes, additions, deletions or modifications shall be deemed authorized
by each of PWIP and Paragon in their capacities as general partners of the
Partnership;
RESOLVED, that PWIP acting singly is hereby authorized, empowered,
directed for and on behalf of Paragon and the Partnership, to do and perform all
such acts and things and to enter into, execute, acknowledge, deliver and follow
all such certificates, agreements, acknowledgments, instruments, contracts,
statements and other documents and to take such further actions as they may deem
necessary or appropriate to effect the intent and accomplish the purposes of the
preceding resolutions; and
FINALLY RESOLVED, that each and every action taken by PWIP prior to the
date and adoption of the foregoing resolutions which would have been authorized
by the foregoing resolutions but for the fact that such actions were taken prior
to such date, be, and each hereby is, ratified, approved, confirmed and adopted.
[DOCUMENT CONTINUES ON NEXT PAGE]
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Consent as of the date
first written above.
PWIP: PaineWebber Income Partners Four Limited
Partnership, a Delaware limited
partnership
By: Fourth Income Properties Fund,
Inc., a Delaware corporation, its
general partner
By: /s/ Peter F. Sullivan
---------------------
Name: Peter F. Sullivan
Title: Vice President
PARAGON: Paragon/Charter Oak Associates, Ltd., a
Missouri limited partnership, a general
partner
By: /s/ Lewis A. Levey
------------------
Name: Lewis A. Levey
Title: General Partner
<PAGE>
SPECIAL WARRANTY DEED
This Deed, Made and entered into this 16th day, of July, 1998, by and between
Charter Oak Associates, a Missouri General Partnership
of the County of St. Louis, State of Missouri parties of the first part, and
MREF II PROPERTY IV,LLC, a Missouri Limited Liability Company 7701
Forsyth, Suite 900, Clayton, MO 63105
of the County of St. Louis, State of Missouri party of the second part.
WITNESSETH, that the said parties of the first part, for and in
consideration of the sum of One Dollar and other valuable considerations paid by
the said party of the second part, the receipt of which is hereby acknowledged,
do by these presents, BARGAIN AND SELL, CONVEY AND CONFIRM unto the said party
of the second part, the following described Real Estate, situated in the County
of St. Louis and State of Missouri, to-wit:
see attached "Exhibit A"
TO HAVE AND TO HOLD the same, together with all rights and appurtenances
to the same belonging, unto the said party of the second part, and to the heirs
and assigns of such party forever.
The said parties of the first part hereby covenanting that said parties
and the heirs, executors and administrators of such parties, shall and will
WARRANT AND DEFEND the title to the premises unto the said party of the second
part, and to the heirs and assigns of such party forever, against the lawful
claims of all persons by and through the party of the first part and none other,
excepting however, the general taxes of the calendar year 1998 and thereafter,
and special taxes becoming a lien after the date of this deed.
[DOCUMENT CONTINUES ON NEXT PAGE]
<PAGE>
IN WITNESS WHEREOF, the said parties of the first part have hereunto set
their hands the day and year first above written.
Charter Oak Associates, a Missouri
general partnership
By: PaineWebber Income Partners Four
Limited Partnership, a Delaware
limited partnership, its 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
Commonwealth of Massachusetts )
) ss. On this 16th day of July, 1998, before me
County of Suffolk )
personally appeared Peter Sullivan, as Vice President of Fourth Income
Properties Fund, Inc., the general partner of PaineWebber Income Partners Four
Limited Partnership, a general partner of Charter Oak Associates, to me known to
be the person who executed the foregoing instrument, and acknowledged that he
executed the same as the free act and deed of said corporation on behalf of
Charter Oak Associates.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official
seal in the County and State aforesaid, the day and year first above written.
/s/ Linda Z. MacDonald
------------------
Notary Public
My term expires:
<PAGE>
EXHIBIT A
Parcel No. 1: CHARTER OAKS PLAT NO. 1, according to the plat thereof
recorded in Plat Book 126 Pages 84 and 85 of the St. Louis County
Recorder's Office; EXCEPTING THEREFROM that part dedicated to the
City of Creve Coeur recorded in Book 9053 page 2219 and Book 9053
page 2224.
Parcel No. 2: CHARTER OAKS PHASE 2, according to the plat thereof
recorded in Plat book 131 pages 62 and 63 of the St. Louis County
Recorder's Office.
ADDRESS: 11907 Charter House Lane
<PAGE>
CHARTER OAK APARTMENTS
ST. LOUIS COUNTY, MISSOURI
BILL OF SALE AND GENERAL ASSIGNMENT
THIS BILL OF SALE AND GENERAL ASSIGNMENT (this "Bill of Sale") is executed
as of the 16th day of July, 1998, by Charter Oak Associates ("Seller"), a
Missouri general partnership having an office at c/o Paragon Group, 1401 South
Brentwood Blvd., Suite 675, St. Louis, Missouri 63144, in favor of MREF II
PROPERTY IV, LLC ("Purchaser"), a Missouri limited liability company, having an
office at 7701 Forsyth, Suite 900, Clayton, Missouri 63105.
1. Real Property. The "Real Property" shall mean the real property located
in the County of St. Louis, State of Missouri, commonly known as "Charter Oak
Apartments" and located at 11907 Charter House Lane, St. Louis County, Missouri.
2. Personal Property. The "Personal Property" shall mean those certain
articles of personal property which are described in Exhibit A attached to this
Bill of Sale, and, to the extent owned by Seller, all personal property of every
kind or description now or hereafter in or on the Land or the Improvements.
3. Intangible Property. The "Intangible Property" shall mean, to the
extent owned by Seller, all intangible assets of any nature relating to the land
and improvements located at 11907 Charter House Lane, St. Louis, Missouri, and
known as the Charter Oak Apartments (the "Property"), including without
limitation, all of Seller's right, title and interest in all (i) warranties and
guaranties relating to the Property or the Person Property in the possession of
Seller, (ii) all licenses, permits and approvals relating to the Property, (iii)
all logos and trade names currently used by Seller exclusively in the operation
of the Property, including the use of the name "Charter Oak Apartments" and (iv)
all plans and specifications relating to the Property, in each case to the
extent Seller may legally transfer the same.
4. 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 and the Intangible Property to
Purchaser.
5. 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>
6. Power and Authority. Seller represents and warrants to Purchaser that it
is fully empowered and authorized to execute and deliver this Bill of Sale, and
the individuals signing this Bill of Sale on behalf of Seller each represents
and warrants to Purchaser that he or she is fully empowered and authorized to do
so.
7. Counterparts. This Bill of Sale 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.
IN WITNESS WHEREOF, Seller has executed this Bill of Sale the day and year
first above written.
SELLER:
CHARTER OAK ASSOCIATES, a Missouri
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
<PAGE>
CHARTER OAK APARTMENTS
ST. LOUIS COUNTY, MISSOURI
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 16th of July, 1998, between Charter Oak
Associates ("Assignor"), whose address is c/o Paragon Group, 1401 South
Brentwood Boulevard, Suite 675, St. Louis, Missouri 63144 and MREF II PROPERTY
IV, LLC, ("Assignee"), a Missouri limited liability company, whose address is
7701 Forsyth, Suite 900, Clayton, Missouri 63105.
1. Property. The "Property" means the real property located in the County
of St. Louis, State of Missouri, commonly known as "Charter Oak Apartments" and
located at 11907 Charter House Lane, together with the building, structures and
other improvements located thereon.
2. Leases. The "Leases" means those leases, tenancies, rental agreements
and occupancy agreements affecting the Property which are described in Exhibit A
attached to this Assignment.
3. Security Deposits. "Security 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 Security Deposits are set forth on attached Exhibit B.
4. 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 Security Deposits.
5. Assumption. Assignee hereby assumes the covenants, agreements and
obligations of Assignor as landlord or lessor under the Leases and Assignee
further assumes all liability of Assignor for the proper refund or return of the
Security Deposits if, when and as required by the Leases.
6. Power and Authority. Assignor represents and warrants to Assignee that
it is fully empowered and authorized to execute and deliver this Assignment, and
the individual signing this Assignment on behalf of Assignor represents and
warrants to Assignee that he or she is fully empowered and authorized to do so.
7. 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.
DOCUMENT CONTINUES ON NEXT PAGE
<PAGE>
IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this
Assignment the day and year first above written.
ASSIGNOR:
CHARTER OAK ASSOCIATES, a Missouri general partnership
By: PaineWebber Income Partners 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
<PAGE>
ASSIGNEE:
MREF II PROPERTY IV, LLC, a Missouri limited
liability company
By: Michelson Real Estate Fund II, LLC, a Missouri
limited liability company, its manager
By: MREF Investors II, LLC, a Missouri
limited liability company, its manager
By: MREF Management II, LLC, a Missouri
limited liability company, its
manager
By: Michelson Asset Management,
Inc., a Missouri corporation,
its manager
By: /s/ Bruce V. Michelson
----------------------
Name: Bruce V. Michelson
Title: President
<PAGE>
ACKNOWLEDGMENT AND INDEMNIFICATION AGREEMENT
This Acknowledgment and Indemnification Agreement (this "Agreement") is
given as of this 16th day of July, 1998, by MREF II PROPERTY IV, LLC, a Missouri
limited liability company (the "Indemnitor") for the benefit of Charter Oaks
Associates ("Charter Oaks"), PaineWebber Income Partners Four Limited
Partnership (?PWIP4") and Paragon/Charter Oaks Associates, Ltd. ("Paragon")
(Charter Oaks, PWIP4 and Paragon are known hereafter collectively as the
"Indemnified Party").
WHEREAS, Charter Oaks, as Seller, and Realty Ventures I, Inc. ("Realty
Ventures I"), as Buyer, entered into that certain Purchase and Sale Agreement
(the "Purchase Agreement"), dated as of July 1998, concerning the sale and
acquisition of certain property commonly referred to as Charter Oaks Apartments,
located in St. Louis County, Texas (the "Property"); and
WHEREAS, by Notice dated as of July 16, 1998, Realty Ventures I notified
Charter Oak Associates that Realty Ventures I's nominee under the Purchase
Agreement would be Indemnitor; and
WHEREAS, the Property is subject to that certain loan in the original
principal amount of $10,262,000.00 from TRI Capital Corporation ("Lender") to
Charter Oaks, as Borrower (the "Existing Loan"), which Existing Loan will be
prepaid at the time of Closing;
WHEREAS, as a condition to prepayment, Lender has required that Charter
Oaks execute a certain Notice of Use (a copy of which is attached hereto as
Exhibit A), which Notice of Use must be recorded prior to the recording of the
deed from Charter Oaks to Indemnitor;
WHEREAS, in order to acknowledge Indemnitor's agreement to (1) take the
Property subject to the Notice of Use, (2) abide by the terms of the Notice of
Use and (3) indemnify Indemnified Party for failure to abide by the terms of the
Notice of Use, Indemnitor has agreed to deliver this Acknowledgment and
Indemnification Agreement.
NOW THEREFORE, as a material inducement to Indemnified Party to consummate
the sale of the Property to the Indemnitor, the undersigned agree as follows:
1. Acknowledgment: Indemnitor acknowledges that it has agreed to
take the Property subject to the Notice of Use.
2. Covenant of Indemnitor. Indemnitor agrees not to violate the provisions
of the Notice of Use.
3. Indemnification. From and after the date hereof, Indemnitor agrees to
indemnify, defend, and hold harmless Indemnified Party from and against all
liabilities, claims, actions, losses, damages, costs and expenses, including,
without limitation, reasonable attorneys' fees, and expenses (including
reasonable costs and fees associated with any appeals) (collectively, "Losses")
which Losses are threatened, incurred or suffered by Indemnified Party, or any
Indemnified Party, based upon, arising out of, in connection with or by reason
of Indemnitor's failure to abide by the terms of the Notice of Use.
4. Binding. This Agreement shall be binding and inures to the benefit of
the parties hereto and their respective successors and assigns.
DOCUMENT CONTINUES ON NEXT PAGE
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly
executed as of the day and year first above written.
INDEMNITOR: MREF II PROPERTY IV, LLC, a Missouri limited
liability company
By: Michelson Real Estate Fund II, LLC, a
Missouri limited liability company, its
manager
By: MREF Investors II, LLC, a Missouri
limited liability company, its
manager
By: MREF Management II, LLC, a
Missouri limited liability
company, its manager
By: Michelson Asset
Management Inc., a
Missouri corporation,
its manager
By:/s/ Bruce V. Michelson
----------------------
Name: Bruce V. Michelson
Title: President
<PAGE>
DISBURSEMENTS SUMMARY / BALANCE SHEET
Buyer/Borrower: MREF II PROPERTY IV, LLC
Seller: Charter Oaks Associates
Lender: Mercantile Bank
Settlement Agent: Title Insurers Agency, Inc. 314-721-2142
226 S. Meramec
St. Louis, MO 63105
Settlement Date: 07-16-98 (14/C35556)
Property Location: 11907 Charter House Lane
St. Louis, MO 63141
INCOMING FUNDS
(204) Addl Earnest Money 250,000.00
MREF II PROPERTY IV, LLC 8,059,616.12
Check From Lender 12,840,000.00 W
Total Incoming Funds 21,149,616.12
DISBURSEMENTS
Mercantile Bank 21,400.00
Commitment Fee 21,400.00
Title Insurers Agency, Inc. 16,176.75
Settlement or Closing fee 2,000.00
Deliver Payoff 20.00
Copies 335.00
Record HUD Agreement 30.00
Owner's 7 endorsements @ $50 350.00
Owners' 3.1 Zoning 400.00
Mtg. 7 endorsements @ $50 350.00
Title Insurance 12,093.75
Mtg. 3.1 Zoning 400.00
Rec. Fees D:27.00 M:63.00 90.00
Recordings fees Releases 21.00
Recording fees Releases 21.00
Record Assign Rents 36.00
Record UCC 30.00
Charter Oaks Associates Closing Proceeds 10,819,904.31
Apartment Investment Advisors Ltd. 250,000.00
Commission 250,000.00
Weil/Chazen Realty Advisors Weil/Chazen Realty Adv. 72,225.00
Title Insurers Agency, Inc. Title Insurance 4,031.25
W TRI Capital Corporation Payoff of 1st Mortgage 9,959,072.50
Metropolitan Sewer District Sewer Amount due thru 6,806.31
=============
Number of checks - 7 Total Disbursements 21,149,616.12
<PAGE>
SELLER'S STATEMENT
Buyer/Borrower: MREF II PROPERTY IV, LLC
Seller: Charter Oaks Associates
Lender: Mercantile Bank
Settlement Agent: Title Insurers Agency, Inc. 314-721-2142
226 S. Meramec
St. Louis, MO 63105
Settlement Date: 07-16-98
Property Location: 11907 Charter House Lane
St. Louis, MO 63141
CREDITS
- -------
Sales Price 21,400,000.00
Adj. July sewer 07-01-98 thru 07-31-98 $2,196.18 1,062.67
Adj July Serv. Cont. 07-01-98 thru 07-31-98 $3,668.89 1,775.27
28 mo. 16 days Decor Payment 2,472.67
--------------
Total Credits To Seller TOTAL CREDITS 21,405,310.61
DEBITS
- ------
Commissions - total commissions: 250,000.00 250,000.00
250,000.00 Apartment Investment Advisors Ltd.
Settlement or Closing fee Title Insurers Agency, Inc. 1,000.00
Deliver Payoff Title Insurers Agency, Inc. 20.00
Copies Title Insurers Agency, Inc. 335.00
Record HUD Agreement Title Insurers Agency, Inc. 30.00
Pitney Bowes Postage -43.90
Recording Fees Title Insurers Agency, Inc. 42.00
Credit prepaid pool contract -3,606.13
Payoff of first mortgage TRI Capital Corporation 9,959,072.50
Deposit retained by seller 50,000.00
Security deposits 107,740.00
Prepaid Rents 15,086.52
County Taxes 01-01-98 to 07-16-98 85,706.90
Adj. July Rent 07-01-98 thru 07-31-98 233,982.00 113,217.10
Sewer Amount due thru July Metropolitan Sewer District 6,806.31
-------------
Less Total Reductions In Amount Due Seller TOTAL DEBITS 10,585,406.30
BALANCE
- ------- ==============
To: X or From: Seller 10,819,904.31
APPROVED:
Charter Oaks Associates
- -----------------------
BY: _______________________ __________________________
Title Insurers Agency, Inc.
(14/C35556)
<PAGE>
BUYER'S STATEMENT
Buyer/Borrower: MREF II PROPERTY IV, LLC
Seller: Charter Oaks Associates
Lender: Mercantile Bank
Settlement Agent: Title Insurers Agency, Inc. 314-721-2142
226 S. Meramec
St. Louis, MO 63105
Settlement Date: 07-16-98
Property Location: 11907 Charter House Lane
St. Louis, MO 63141
DEBITS
- ------
Purchase Price 21,400,000.00
Adj. July sewer 07-01-98 thru 07-31-98 $2,196.18 1,062.67
Adj July Serv. Cont. 07-01-98 thru 07-31-98 $3,668.89 1,775.27
28 mo. 16 days Decor Payment 2,472.67
Weil/Chazen Realty Advisors Weil/Chazen Realty Advisors 72,225.00
Commitment Fee Mercantile Bank 21,400.00
Settlement or Closing fee Title Insurers Agency, Inc. 1,000.00
Owner's 7 endorsements @ $50 Title Insurers Agency, Inc. 350.00
Owners' 3.1 Zoning Title Insurers Agency, Inc. 400.00
Mtg. 7 endorsements @ $50 Title Insurers Agency, Inc. 350.00
Title Insurance Title Insurers Agency, Inc. 16,125.00
Mtg. 3.1 Zoning Title Insurers Agency, Inc. 400.00
Pitney Bowes Postage 43.90
Recording Fees Title Insurers Agency, Inc. 90.00
Record Assign Rents Title Insurers Agency, Inc. 36.00
Record UCC Title Insurers Agency, Inc. 30.00
Credit prepaid pool contract 3,606.13
---------------
Gross Amount Due From Buyer/Borrower TOTAL DEBITS 21,521,366.64
CREDITS
- -------
Deposit or Earnest money 50,000.00
Principal Amount of New Loan(s) 12,840,000.00
Addl Earnest Money 250,000.00
Security Deposits 107,740.00
Prepaid Rents 15,086.52
County Taxes 01-01-98 to 07-16-98 85,706.90
Adj. July Rent 07-01-98 thru 07-31-98 233,982.00 113,217.10
---------------
Less Total Credits to Buyer/Borrower TOTAL CREDITS 13,461,750.52
BALANCE
- ------- ===============
From: X or To Buyer/Borrower 8,059,616.12
APPROVED:
MREF II PROPERTY IV, LLC
- ------------------------
BY:________________________ __________________________
Title Insurers Agency, Inc.
(14/C35556)
