SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported) August 26, 1999
Paine Webber Income Properties Five Limited Partnership
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-12087 04-2780287
- --------------------------------------------------------------------------------
(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 FIVE LIMITED PARTNERSHIP
ITEM 2 - Disposition of Assets
Seven Trails West Apartments - St. Louis, Missouri
Disposition Date - August 26, 1999
On August 26, 1999, Seven Trails West Associates, a joint venture in which
the Partnership had an interest, sold the Seven Trails West Apartments to an
unrelated third party for a price of $26,400,000. After deducting closing costs
and estimated net property proration adjustments totalling $268,000 and the
prepayment of the first mortgage debt secured by the property of approximately
$16,192,000, the Seven Trails joint venture received distributable net sale
proceeds of $9,940,000. These net sale proceeds were then divided between the
Partnership and its co-venture partner. The Partnership received $8,950,000 and
the non-affiliated co-venture partner received $990,000 as its share of the sale
proceeds. The net proceeds received by the Partnership from the sale of Seven
Trails will be distributed to the Limited Partners as part of a Special
Distribution of approximately $8,976,000, or $257 per original $1,000
investment, to be paid on September 15, 1999 to unitholders of record as of the
August 26, 1999 sale date. Of the $257 total, $256.23 represents net proceeds
from the sale of the Seven Trails West Apartments and $0.77 represents
Partnership reserves which exceed future requirements.
As previously reported, the Partnership and its co-venture partner held
preliminary discussions concerning potential sale opportunities for Seven Trails
during fiscal 1999. Last quarter, the Partnership and its joint venture partner
selected a local brokerage firm with a strong background in selling apartment
properties in the St. Louis area. Preliminary sales materials were prepared and
extensive sale efforts began in late November 1998. The property was marketed to
national, regional and local buyers of apartment properties. As a result of
those efforts, over 20 offers were received and thirteen prospective purchasers
were then requested to submit best and final offers. These prospective buyers
submitted best and final offers, all of which were in excess of the property's
1997 year-end appraised value. 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
subsequently negotiated with this prospective buyer; however, they were unable
to secure commitments for the debt and equity funds required to complete a
purchase of the property. As a result, discussions were re-opened with the other
prospective buyers who had previously submitted best and final offers. The
Partnership and its co-venture partner selected an offer from one of these
prospective buyers and negotiated a purchase and sale agreement with them which
was signed on May 12, 1999. This prospective buyer subsequently completed its
due diligence work and made a non-refundable deposit of $750,000 on July 2,
1999. The sale closed as described above on August 26, 1999.
As discussed further in the Partnership's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1999, the Partnership has been focusing on a sale
of Seven Trails West Apartments, its remaining real estate investment, and a
liquidation of the Partnership. With the sale of the Seven Trails property
completed, a formal liquidation of the Partnership has been undertaken. This
liquidation is being finalized and is expected to be completed by the end of
calendar year 1999. As part of the liquidation, a final distribution of
approximately $20.00 per original $1,000 investment, or approximately $700,000,
is expected to be made by early December 1999. This distribution will represent
the Partnership's remaining reserves after paying final operating expenses and
liquidation related costs as well as the Partnership's share of Seven Trails'
property operations through the August 26, 1999 date of sale. A post-closing
reconciliation of Seven Trails' property operations is currently underway.
ITEM 7 - Financial Statements and Exhibits
(a) Financial Statements: None
(b) Exhibits:
(1) Closing Statement by and between Seven Trails West Associates and
Seven Trails West LLC, dated August 26, 1999
(2) Purchase and Sale Agreement by and between Seven Trails West
Associates and Seven Trails West LLC
(3) Reinstatement and Amendment of Purchase and Sale Agreement
(4) Second Amendment of Purchase and Sale Agreement
(5) Special Warranty Deed
(6) Bill of Sale and General Assignment
<PAGE>
FORM 8-K
CURRENT REPORT
PAINE WEBBER INCOME PROPERTIES FIVE LIMITED PARTNERSHIP
(7) Assignment and Assumption of Leases and Security Deposits
(8) Assignment and Assumption of Contracts
(9) Hold Harmless Agreement
(10) Assumption and Modification Agreement
<PAGE>
FORM 8-K
CURRENT REPORT
PAINE WEBBER INCOME PROPERTIES FIVE 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 FIVE LIMITED PARTNERSHIP
-------------------------------------------------------
(Registrant)
By: FIFTH INCOME PROPERTIES, INC.
-----------------------------
(General Partner)
By: /s/ Walter V. Arnold
--------------------
Walter V. Arnold
Senior Vice President and
Chief Financial Officer
Date: September 8, 1999
<PAGE>
<TABLE>
CLOSING STATEMENT
PROPERTY: Seven Trails West
Ballwin, MO
<CAPTION>
- --------------------------------------------------------------------------------------------------------
DESCRIPTION DEBIT CREDIT
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
TOTAL CONSIDERATION:
Total Consideration $26,400,000.00
NEW AND EXISTING ENCUMBRANCES:
Principal Balance - Existing 1st Loan from
Northland/Marquette Cap $16,191,656.86
ESCROW CHARGES
Escrow Fee to Title Insurers Agency, Inc. 1,000.00
Wire Fees to Title Insurers Agency, Inc. 40.00
ADDITIONAL CHARGES
June - Aug. sewer to Metropolitan Sewer District* 13,790.31
Survey to Clayton Engineering 4,600.00
Utility true up post close*
Proceeds to Paine Webber Income Properties Five, L.P. 8,949,681.70
Proceeds to Seven Trails West Assoc. 990,295.75
PRORATIONS AND ADJUSTMENTS:
County Taxes* From 01/01/99 to 8/27/99 195,616.44
Based on the Annual amount of $300,000.00
Aug. sewer* From 08/26/99 to 08/31/99 679.65
Interest Adj. From 08/01/99 to 08/26/99 92,031.68
Replace Res Esc. 147,435.41
Tax & Ins. Esc. 223,604.66
Sec. Dep.* 123,960.00
Laundry* From 08/26/99 to 08/31/99 310.25
Cable TV From 08/26/99 to 08/31/99 152.55
Rent Adj.* From 08/26/99 to 08/31/99 55,992.75
Seven Trails Inn* From 08/26/99 to 08/31/99 483.85
Other Income* From 08/26/99 to 08/31/99 1,407.58
COMMISSIONS:
Commission 150,000.00
$150,000.00 to Apartment Investment Advisors, Ltd.
TITLE CHARGES
Info Commitment to Title Insurers Agency, Inc. 500.00
Copies to Title Insurers Agency, Inc. 200.00
* These items will be trued up post closing
-------------- --------------
Sub Totals 26,771,719.72 26,771,719.72
Totals $26,771,719.72 $26,771,719.72
============== ==============
</TABLE>
<PAGE>
CLOSING STATEMENT RIDER
THIS CLOSING STATEMENT RIEDER is made this 26th day of August 1999, and is
incorporated into Closing Statement of the same date regarding the Property
located at:
Seven Trails West, Ballwin, MO
BY SIGNING BELOW, Buyers and Sellers agree and accept the terms and
provisions in the Closing Statement.
_______________________ (Seal) SELLER:
_______________________ (Seal) SEVEN TRAILS WEST ASSOCIATES, a Missouri
general partnership
By: PaineWebber Income Properties Five
Limited Partnership, a Delaware limited
partnership, a General Partner of
Seven Trails West Associates
Title Insurers Agency, Inc.
By: /s/ D. Erickson
---------------
By: Fifth Income Properties Fund,
Inc., a Delaware corporation,
the Managing General Partner of
PaineWebber Income Properties
Five Limited Partnership
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
and
By: Seven Trails West Company, L.P., a
Missouri limited partnership, a General
Partner of Seven Trails West Associates
By: St. Louis STW, Inc., a Missouri
corporation, the Managing General
Partner of Seven Trails West
Company, L.P.
By: /s/ Lewis A. Levey
------------------
Name: Lewis A. Levey
Title: President
<PAGE>
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
SEVEN TRAILS WEST ASSOCIATES (SELLER)
AND
SEVEN TRAILS WEST LLC (BUYER)
THE SEVEN TRAILS WEST APARTMENTS
500 Seven Trails Drive
Ballwin, Missouri
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE 1 DEFINITIONS 1
ARTICLE 2 PURCHASE AND SALE 4
2.1 4
ARTICLE 3 PURCHASE PRICE; DEPOSITS; ADJUSTMENTS 4
3.2 Purchase Price 4
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3.3 Tax Proration 5
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3.4 Intentionally Omitted 5
---------------------
3.5 Utility Proration 5
-----------------
3.6 Income and Expense Proration 5
----------------------------
3.7 Prorations Generally 6
--------------------
3.8 Closing Costs 6
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ARTICLE 4 PRECLOSING OPERATION 7
4.1 Leases 7
------
4.2 Conduct of Business 7
-------------------
4.3 Property Contracts; Existing Loan Documents 7
-------------------------------------------
4.4 Compliance with Contracts and Laws 8
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4.5 Mutual Disclosure Obligation 8
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ARTICLE 5 ACCESS, INSPECTION, DILIGENCE 9
5.1 Access/Purchaser s Responsibilities/Purchaser s Indemnity 9
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5.2 Diligence Date 11
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5.3 Copies of Reports/Return of Documents 11
-------------------------------------
5.4 Pre-Closing Confidentiality 12
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5.5 Post-Closing Confidentiality 12
----------------------------
5.6 Intentionally Omitted 13
---------------------
ARTICLE 6 TITLE AND SURVEY 13
6.1 Title and Survey 13
----------------
6.2 Deed 13
----
6.3 Lease Assignment 14
----------------
<PAGE>
ARTICLE 7 CONDITIONS PRECEDENT AND CLOSING 15
7.1 Buyer's Conditions Precedent 15
----------------------------
7.2 Seller's Conditions Precedent 17
-----------------------------
7.3 Closing Date 18
------------
7.4 Closing Deliveries 18
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7.5 Buyer's Deliveries 19
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7.6 Possession 20
----------
ARTICLE 8 RESERVED 21
ARTICLE 9 BROKERAGE COMMISSIONS 21
9.1 21
ARTICLE 10 DEFAULT, TERMINATION AND REMEDIES 21
10.1 Seller's Default 21
----------------
10.2 Buyer's Default 22
---------------
ARTICLE 11 REPRESENTATIONS AND WARRANTIES 23
11.1 Buyer's Representations and Warranties 23
--------------------------------------
11.2 Seller's Representations and Warranties 24
---------------------------------------
11.3 Seller: Seller's Knowledge 25
---------------------------
11.4 Survival of Warranties 26
----------------------
11.5 Property Conveyed AS IS 26
-----------------------
ARTICLE 12 MISCELLANEOUS 28
12.1 Successors and Assigns 28
----------------------
12.2 Notices 28
-------
12.4 Captions 30
--------
12.5 No Other Parties 30
----------------
12.6 Amendments 30
----------
12.7 Severability 31
------------
<PAGE>
12.8 Applicable Law 31
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12.9 Counterparts 31
------------
12.10 Time of the Essence 31
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12.11 No Personal Liability 31
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12.12 No Recordation 31
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12.13 Waiver 32
------
12.14 Binding On Successors and Assigns 32
---------------------------------
12.15 Entire Agreement 32
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12.16 Construction of Agreement 32
-------------------------
12.17 Further Instruments 32
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12.18 Parties Represented by Counsel 32
------------------------------
12.19 Preparation of Documents 33
------------------------
12.20 Attorney Fees 33
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12.21 No Shopping 33
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ARTICLE 13 IRS FORM 1099-S DESIGNATION 33
13.1 33
ARTICLE 14 OFFER; EFFECTIVE DATE 33
14.1 33
<PAGE>
PURCHASE AND SALE AGREEMENT
Seven Trails West Apartments
THIS PURCHASE AND SALE AGREEMENT (this Agreement) is entered into as of
the 12th day of May, 1999 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: Seven Trails West LLC, a Delaware limited liability company
- ------
Deposit: See Section 3.1
- --------
Documents: All books, records, plans, studies, site analyses,
- --------- certificates of occupancy, property tax information, permits,
existing title insurance policies, existing surveys, existing
zoning analyses, existing engineering reports, existing code
compliance reports, building specifications, Property
Contracts, Leases, agreements or other instruments or
documents contained in Seller's files relating to the
construction, operation and maintenance of the Property.
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
- ---------------
Existing Loan: That certain loan in the original principal amount of
- ------------- $17,000,000.00 from Lender to Seller, evidenced by the Note
and secured by the Deed of Trust and the Existing Loan
Documents.
Existing Loan
Documents: That certain Multifamily Note (the Note) in
- ---------- the original principal amount of $17,000,000.00, dated as of
April 16, 1996 made by Seller in favor of Lender secured by:
(y) that certain Multifamily Open-End Deed of Trust,
Assignment of Rents and Security Agreement (the Deed of Trust)
dated as of even date therewith encumbering the Real Property.
and (z) any and all other documents and instruments
evidencing, security or relating to the Existing Loan from
Lender to Seller executed in connection therewith, listed on
Exhibit F attached hereto and incorporated herein by
reference.
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 posts 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, 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, Seven Trails West 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.
Lender: Northland Financial Company, a Minnesota corporation, or its
- ------ assignee
Personal
Property: All furniture, carpeting, appliances, equipment,
- -------- machinery, inventories, supplies, signs and other tangible
personal property of every kind and nature, if any, owned by
Seller and installed, located at and used in connection with
the ownership, occupation and operation of the Real Property,
including, without limitation, the Personal Property listed on
Exhibit B attached hereto. Personal Property specifically
excludes: (i) any items of personal property owned by tenants
at or on the Real Property, and (ii) any items of personal
property owned by third parties and leased to Seller.
Property: The Real Property, the Personal Property, the Leases, the
- -------- Tenant Deposits, the Intangible Property and the
Property Contracts known as Seven Trails West Apartments,
located at 500 Seven Trails Drive, Ballwin, Missouri 63011.
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.
Property Manager: Camden Property Management
- ----------------
Purchase Price: $28,000,000.00
- --------------
Real Property: The Land and the Improvements.
- -------------
<PAGE>
Seller: Seven Trails West Associates, a Missouri general partnership
- ------
Tenant Deposits: Seller's rights to unapplied security deposits under the
- --------------- Leases.
Title Company: Title Insurers Agency, Inc.
- -------------
Title Insurer: Chicago Title Insurance Company
- -------------
ARTICLE 2
PURCHASE AND SALE
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; DEPOSITS; ADJUSTMENTS
Deposit. Within three business days of the Effective Date (as defined in
the last Article of this Agreement), Buyer's shall deposit immediately available
funds with the Title Company (hereinafter the Escrow Agent) the sum of Two
Hundred Seventy Five Thousand Dollars ($275,000) (the Deposit) to secure Buyer's
obligations under this Agreement. The Escrow Agent shall hold the Deposit in a
segregated interest bearing money market amount 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.
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 the following manner:
(a) Buyer shall assume the payment of the existing principal balance
of the Existing Loan as of the Closing Date (the Loan Principal Balance),
and the payment of interest accruing thereon from and after the Closing
Date, and shall agree to perform, assume and observe all obligations of
the Seller under the Existing Loan Documents evidencing, relating to or
securing the Existing Loan.
(b) Buyer shall pay to Seller in United States dollars by wire
transfer of federal funds, the Purchase Price less the Loan Principal
Balance and less accrued interest on the Loan Principal Balance as of the
Closing Date (the Cash Balance).
(c) The Escrowed Amount shall be applied towards the Cash Balance.
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 used for the purposes of prorating taxes on the
Closing Date shall be based on the greater of (A) the valuation used by the
assessor for purposes of determining such taxes in the immediately prior fiscal
year, or (B) the Purchase Price. No further adjustment for taxes shall be made
after the Closing Date.
Intentionally Omitted.
----------------------
Utility Proration. To the extent reasonably feasible, the Seller shall
cause all meters for electricity, gas, water, sewer or other public utility
usage at the Property to be read as of the day immediately preceding the Closing
Date, and the Seller shall pay all charges for such utilities which have accrued
on or prior to the Closing Date; provided, however, that if and to the extent
such charges are paid directly by tenants, no such reading or payment shall be
required. If the utility companies are unable or refuse to read meters for which
payment by the Seller is required, all charges for such utilities to the extent
unpaid shall be prorated and adjusted as of the Closing Date based on the most
recent bills therefor and no further adjustment shall be made. The Seller shall
provide notice to the Buyer within five (5) days of the Closing Date setting
forth (i) whether utility meters will be read as of the Closing Date and (ii) a
copy of the most recent bill for any utility charges which are to be prorated
and adjusted as of the Closing Date.
Income and Expense Proration. All monetary obligations under all Property
Contracts which are being assigned to Buyer on the Closing Date as provided
herein (all of such monetary obligations being hereinafter collectively referred
to as the Expenses), and all rentals from tenants and other use fees receivable
under any Lease or other agreement concerning the Property (the Income), shall
be prorated and adjusted between the parties as of the Closing Date. At closing,
all accrued but unpaid Expenses, all tenant security deposits then held by
Seller, and all prepaid but not accrued Income shall be credited against the
Purchase Price, and all prepaid but not yet accrued Expenses shall be added to
the Purchase Price. All amounts owing under any Property Contracts which are not
being assigned to Buyer and all amounts owing under any contract for Improvement
shall be the sole obligation of Seller. The principal amount of the Existing
Loan and all accrued interest thereon as of the Closing Date shall be credited
against the Purchase Price. Any rentals which are received by Seller after
Closing to the extent attributable to any period on or after the Closing Date
shall be immediately turned over to Buyer. Buyer shall be entitled to receive
directly from the tenants all rents received after the Closing Date. All rentals
received by Buyer from a tenant subsequent to the Closing Date, after deduction
of collection costs, shall be applied first to any amounts due which are
attributable to any period after the Closing Date, then to any amounts due as
designated by the tenant, and lastly to any amounts due which are attributable
to any period prior to the Closing Date which shall be paid over to Seller.
Nothing contained in this subparagraph shall impair Seller's rights to pursue
any monetary claims against any tenant who is in default under any Lease prior
to the Closing Date, but such actions shall not include any evictions or lease
termination petitions or any action adversely affecting a tenant s use or right
to occupy the leased Property and shall not result in or give rise to a tenant
being able to assert a claim against Buyer or having a defense to such tenant s
obligations under such tenant s lease or rental agreement.
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.
Closing Costs.
--------------
(a) Seller shall pay: (i) its legal fees and expenses related to the
negotiation and preparation of this Agreement and all documents required
to close the transaction contemplated hereby, and (ii) 50% of the escrow
fees of the Escrow Agent.
(b) Buyer shall pay: (i) 50% of the escrow fees of the Escrow Agent,
(ii) charges to record the deed, and evidence of Buyer's existence or
authority, (iii) Buyer's legal fees and expenses related to the
negotiation of this Agreement and all documents required to close the
transaction contemplated hereby, (iv) all costs related to the Buyer's
inspection and due diligence, including, without limitation, the cost of
appraisals, architectural, engineering, credit and environmental reports,
(v) all costs associated with an update of the title commitment in
Seller's possession and preparation of an updated title commitment as well
as all charges and premiums for (1) an owner s title policy, and (2) a new
Lender's title policy or any required endorsements to the Lender's
existing policy, (vi) all costs allocable to preparation of any update or
recertification to the survey in Seller's possession, and (vii) the $2,000
application fee, the one percent (1%) assumption fee and all legal and
other miscellaneous expenses of Lender in connection with the assumption
of the Existing Loan.
(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
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. Seller shall deliver to Buyer true and complete copies of all Leases
within three (3) business days after the Effective Date of this Agreement, to
the extent not previously delivered. 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.
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.
Property Contracts; Existing Loan Documents. Seller shall deliver copies
of all Property Contracts and Existing Loan Documents to Buyer for review within
three (3) business days after the Effective Date. 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. 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.
Compliance with Contracts and Laws.
-----------------------------------
From the date of this Agreement until the Closing Date, Seller agrees to
perform its material contractual obligations arising under or related to the
Property Contracts, Leases, Existing Loan and other agreements concerning the
Property, to the extent within Seller's control, to preserve intact any licenses
or permits required for the lawful and proper operation and occupancy of the
Property, and to the extent within Seller's control, to file timely all reports,
statements, renewal applications and other filings required in connection
therewith and to pay timely all fees and charges in connection therewith that
are required to keep such licenses and permits in full force and effect; not to
violate or allow the violation of any law, ordinance, rule or regulation
affecting the Property; not to apply for or join in any change in zoning,
platting or similar pubic land use matters related to the Property, or any laws
relating to the Property; and not to dispose of or remove or permit to be
disposed of or removed any fixtures, equipment or personal property owned by
Seller constituting part of the Property unless (i) such removal is within the
scope of Seller's customary business practices for operating the Property or
(ii) the same are rendered obsolete or of no further value, in which case the
same shall be replaced by Seller with similar items of substantially the same or
better quality and value as the replaced items when new and that are free and
clear of any lien or encumbrance or title retention. Buyer shall provide Seller
with notice of any breach of this Section 4.4 and Seller shall have an
opportunity to cure the matter(s) identified in such notice. In the event of a
breach of this Section 4.4 by Seller which is not so cured, Buyer may either (i)
terminate this Agreement and receive the Escrowed Amount as its sole remedy
(except as set forth in the last sentence of this Section 4.4) or (ii) waive the
breach and proceed with Closing, in which case the Buyer shall have no further
recourse with respect to such breach. Notwithstanding the foregoing, after the
Diligence Date, with respect to Property Contracts, this Section 4.4 shall only
apply to those Property Contracts which are being assumed by the Buyer at
Closing. Furthermore, in the event of a breach of this Section 4.4 with respect
to a material Property Contract, a material law which would have an impact on
Buyer's ownership of the Property, or the Existing Loan, then Buyer shall be
entitled to pursue its remedies under Section 10.1.
Mutual Disclosure Obligation.
-----------------------------
Until the Closing Date or the earlier termination of this Agreement, each
party agrees to notify the other in writing within five (5) business days after
receiving notice.
(a) Any fact or event which would make any of the representations or
warranties of a party contained in this Agreement untrue or misleading in
any material respect or which would cause such party to be in violation of
any of its covenants or other undertakings or obligations hereunder.
(b) Any violation of any law, ordinance, regulation or law which
materially affects the Property or any portion thereof.
(c) Any proposed change in any zoning or law affecting the use or
development of the Property or any part thereof.
(d) Any pending or threatened (and unresolved) litigation which
affects or relates to the Property or any part thereof and would subject
Buyer to liability or which would materially and adversely affect the
transaction contemplated hereby.
(e) Any material damage or destruction (excluding normal wear and
tear) to the Property or any part thereof.
(f) Any pending or threatened (and unresolved) condemnation or
eminent domain proceeding affecting the Property or any part thereof.
(g) Any threatened (and unresolved) or pending proceeding in
bankruptcy or insolvency which materially adversely affects the Seller or
Property.
(h) Any material default under any of the Property Contracts, the
Existing Loan or any other agreement affecting all or any portion of the
Property, or any act or omission which, with the passage of time or the
giving of notice, or both, would constitute a default.
(i) Any written notice or other communication, from the United
States Environmental Protection Agency or any other federal, state or
local governmental authority having jurisdiction over the Property, with
respect to (i) any alleged violation concerning the Property of any
Environmental Requirements; or (ii) the handling, release, use, discharge,
storage or disposal of any Hazardous Substances at, on or from the
Property.
ARTICLE 5
ACCESS, INSPECTION, DILIGENCE
Access/Purchaser's Responsibilities/Purchaser's Indemnity.
(a) Within three (3) business days of the Effective Date of this
Agreement, Seller, at its expense, shall deliver to Buyer the following
materials, documents and information, to the extent the same are in the
Seller's or the Property Manager s possession: (i) all, if any,
architectural, engineering or construction contracts then in effect and
not fully performed with respect to any of the Real Property (the
Improvement Contracts); (ii) statements of all income and expenses of
ownership, maintenance and operation of the Property for the last three
years, and the current operational, leasing, and capital budget in
narrative form for the Property and any projected budgets for any period
after the Closing; (iii) a detailed listing of all capital expenditures
relating to the Property that have been incurred by Seller during the last
three years; (iv) copies of all bills and invoices for utilities paid for
by Seller for the twelve month period immediately prior to the date of
this Agreement; (v) property tax and assessment bills for the past three
tax years and complete files on any ongoing tax protest proceedings; (vi)
all environmental reports and assessments (including asbestos and lead
paint), and engineering consultants reports, to the extent in Seller's
possession or control; (vii) copies of all appraisals, plans,
specifications and architectural drawings for the Real Property in the
possession of Seller or under the control of Seller; (viii) a written
disclosure prepared by Seller's counsel describing the nature and amount
in controversy with respect to all pending litigation (including any
condemnation) affecting the Property or any threatened litigation
(including condemnation) known to Seller and affecting the Property; (ix)
a sample of the standard form of lease currently used as the lease
agreement for the Real Property; (x) a schedule of all zoning compliance
letters, incident reports for the past twenty four (24) months produced by
the local law enforcement agency, licenses, permits and certificates of
occupancy for the Property currently in effect and known to Seller,
together with copies thereof and all amendments thereto, to the extent in
Seller's possession; and (xi) the most recent title insurance policy,
title insurance commitment (and supporting Schedule B-2 documents) and
survey in the possession of Seller.
(b) 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 verbal notice to Seller or the Property
Manager 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 which would result in
material damage to the Property 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
Closing Date.
(c) 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.
(d) 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, caused by Buyer
or its agents while conducting inspections, tests or investigations of the
Property conducted by or on behalf of Buyer; provided, however, the
indemnity shall not extend to protect Seller from any pre-existing
liabilities with respect to the Property for matters merely discovered by
Buyer (e.g., latent environmental defect). This indemnity obligation of
Buyer shall survive the termination of this Agreement for any reason.
Diligence Date.
---------------
Subject to Section 5.1, above, Buyer may perform such investigations with
respect to the Property as is desirable to Buyer in its sole discretion. Buyer
shall complete any due diligence it considers desirable on or before the date
which is thirty (30) days from the Effective 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, or in the event Buyer's internal investment
committee fails to approve the acquisition of the Property, Buyer may elect, by
written notice to Seller, effectively delivered in accordance with Section 12.2,
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).
Copies of Reports/Return of Documents.
--------------------------------------
(a) As additional consideration for the transaction contemplated
herein, Buyer shall promptly deliver to Seller copies of any and all
reports, tests or studies involving structural or geologic conditions,
environmental, hazardous waste or Hazardous Substances contamination of
the Property and all other materials obtained in connection with Buyer's
diligence (other than communications covered by the attorney-client
privilege), which reports, tests and studies shall be addressed to both
Buyer and Seller at no cost to Seller, provided, however, that Buyer shall
have no obligation to cause any such tests or studies to be performed on
the Property.
(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.
Pre-Closing 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. The Buyer shall not disclose to anyone other than its partners and
financiers the Documents and/or any information disclosed by Seller which is not
generally known by the public regarding the 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.
0.1 Post-Closing Confidentiality. Seller acknowledges and agrees that, in
the event of a Closing, Buyer will own the Documents and all propriety
information contained in the Documents, and such proprietary information will
continue to be confidential in nature. During the term of this Agreement and
after the Closing, Seller shall not disclose to anyone other than its partners
and financiers the Documents and/or any information which is not generally known
by the public regarding the Buyer's operations and/or the Property. Seller 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 out created by this Section. Additionally, Seller
may discuss and disclose such matters it deems reasonably necessary in
accordance with its current practices and 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. Seller will endeavor to
obtain Buyer's approval over any such disclosure which contains Buyer's name.
Buyer hereby consents to the disclosure of this Agreement and the closing
documents by Seller on Form 8-K. This provision shall survive the Closing, but
shall not apply in the event of a termination of this Agreement by either party.
Intentionally Omitted.
----------------------
ARTICLE 6
TITLE AND SURVEY
Title and Survey.
-----------------
Promptly following the execution of this Agreement. Buyer may obtain:
(a) An update to the most current ALTA as-built survey of the Real
Property in the possession of Seller, which may be recertified, at Buyer's
expense, to Seller, Buyer, Lender, Title Company and the Title Insurer
(the Seller's most recent survey or the Buyer's update thereto shall be
referred to herein as the Survey); and
(b) An update to the most recent commitment for an ALTA Owner s
Policy of Title Insurance from the Title Company and/or Title Insurer in
the possession of Seller (the Seller's commitment recent commitment or the
Buyer's update thereto shall be referred to herein as the Title
Commitment).
Buyer shall cause a copy of any updates to the Survey and 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 may terminate
this Agreement as provided in Section 5.2. 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 considered Permitted Exceptions.
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 Permitted Exceptions:
(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 Existing Loan Documents;
(e) 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);
(f) 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;
(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.
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.
Existing Loan.
--------------
(a) The obligations of Seller and Buyer under this Agreement are
contingent and conditioned upon the following:
(i) Lender's approval of the assignment to Buyer of the
Existing Loan; and
(ii) Receipt by Seller from Lender at Closing of a release of
all of its obligations as borrower and the obligations
of its partners and principals under the Loan Documents,
including, without limitation, a release by Lender of
Seller from its obligations under the Guaranty listed on
Exhibit F.
(b) Within three (3) business days of the Effective Date hereof,
Seller shall provide Buyer with a true, correct and complete copy of all
Loan Documents executed in connection with the Existing Loan, which
documents are listed on Exhibit F attached hereto.
(c) Unless this Agreement is terminated, Buyer shall, at its sole
cost and expense, deliver to Seller a check payable to Seller in the
amount of Two Thousand and No/100 Dollars ($2,000.00) (the Application
Fee) within three (3) business days of the Diligence Date to reimburse
Seller for the fee charged to Seller by Lender for applying for its
consent to the assignment and assumption of the Existing Loan. In the
event Purchaser does not deliver the Application Fee to Seller as provided
in the immediately preceding sentence, Seller may offset the Application
Fee against the Earnest Money without further action or consent by Buyer.
Buyer and Seller agree to use reasonable efforts to apply for the Lender's
consent within three (3) business days of the Effective Date hereof and
agree to diligently pursue such application until Lender grants its
approval of the assignment and assumption of the Existing Loan to Buyer,
including, but not limited to, timely submission of all materials
requested by Lender and/or those documents required to be submitted to
Lender pursuant to the applicable provisions of the Loan Documents.
(d) If this transaction closes, in addition to the Application Fee,
Buyer shall pay at Closing the one percent assumption fee and all legal
and other miscellaneous expenses of Lender in connection with the
assumption of the Existing Loan.
(e) Buyer and Seller agree to cooperate with Buyer's efforts to
obtain Lender's consent. Subject to the other provisions of this
Agreement, Buyer and Seller each agree to execute and deliver any and all
documents or instruments or take such other action as may be necessary or
proper to effectuate, confirm, perform or carry out the assignment and
assumption of the Existing Loan. Buyer agrees to use reasonable efforts to
obtain Lender's agreement to the foregoing and to cause Lender to close
the transactions contemplated hereby. If Lender does not consent to the
items disclosed in Section 6.4(a) on or before the Closing Date (as such
date may be extended pursuant to Section 7.1), or if Lender imposes any
material adverse restrictions, limitations or additional obligations,
which are not included in the Existing Loan Documents, on either party as
a condition to granting Lender's consent to the items disclosed in Section
6.4(a) on or before the Closing Date (as such date may be extended
pursuant to Section 7.1), then either party hereto may terminate this
Agreement by notice to the other, and Escrow Agent shall return the Escrow
Amount to Buyer and Seller and Buyer shall be relieved of all further
liabilities or obligations to provide Seller with evidence of its efforts
to satisfy the provisions of this Section 6.4(e).
ARTICLE 7
CONDITIONS PRECEDENT AND CLOSING
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 respects with all of the
terms of this Agreement to be performed and complied with by Seller prior
to or at the Closing;
(b) Satisfaction in full of the requirements of Section 6.4 with
respect to the Existing Loan.
(c) The continuing accuracy of all of Seller's warranties and
representations in this Agreement as of the Closing Date.
(d) The absence of any lien, encumbrance or other defect in title to
the Property as of Closing (other than the Permitted Exceptions and other
than matters insured over in accordance with this Agreement) as evidenced
by the Title Insurer s issuance at Closing (or the Title Insurer s
irrevocable commitment to issue effective as of the Closing) an ALTA
extended coverage owner s policy of title insurance (1990 form) insuring
marketable fee simple title to the Real Property vested in Buyer as of the
Closing Date, in the liability amount of the Purchase Price, subject only
to the Permitted Exceptions (and other matters insured over in accordance
with this Agreement) (herein, the Title Policy). Buyer shall also have
received from the Lender an estoppel letter in form and substance
reasonably satisfactory to Buyer which (i) sets forth the principal amount
of the mortgage debt and all accrued interest thereon as of the Closing
Date, (ii) verifies that no monetary default exists under the Existing
Loan, and (iii) contains such Lender's consent to the sale of the Property
to Buyer (the Lender Estoppel).
(e) The absence of any condemnation or the threat or institution of
condemnation proceedings which result in the taking of any part of the
Land, or any Improvements on the Land with a value of more than Three
Hundred Twenty-Five Thousand Dollars ($325,000), or a reduction in the
number of any parking spaces below the minimum level required by law for
use by the tenants, or any material limitation or restriction on
pedestrian or vehicular access to and from any public rights-of-way
adjacent to the Real Property. If any of the foregoing shall occur, Buyer
may elect to terminate this Agreement by written notice to Seller within
thirty (30) days after the date Buyer receives written notice of such
occurrence. If Buyer does not timely elect to terminate this Agreement and
this transaction closes, Seller shall assign to Buyer on the Closing Date
all condemnation awards and rights to awards which were not used by Seller
to pay the costs of any restoration of the Real Property necessitated by
the condemnation.
(f) The absence of any material damage by casualty to the
Improvements which has not been repaired by the Closing Date. For the
purposes hereof, a material damage by casualty shall be deemed any damage
by fire or other casualty which has not been repaired and paid for by
Seller by the Closing Date and for which the estimated cost of the
remaining repairs exceeds Three Hundred Twenty-Five Thousand Dollars
($325,000). If the Real Property suffers any material damage by casualty,
Buyer shall have the right and option, as its sole remedy, to terminate
this Agreement within thirty (30) days after the date of the casualty or
by the Closing Date, whichever first occurs (unless Seller restores the
Property to its prior condition before the Closing Date). If the estimated
cost to repair any damage by casualty as of the Closing Date is less than
Three Hundred Twenty-Five Thousand Dollars ($325,000), Buyer shall not
have the right to terminate this Agreement. If Buyer does not elect timely
to terminate this Agreement or does not have the right to terminate this
Agreement, this transaction shall close without increase or decrease in
the Purchase Price. Seller shall proceed to effect such repairs as are
reasonably possible prior to Closing unless otherwise agreed to in writing
by Buyer, and Buyer shall be entitled at Closing to an assignment of all
insurance proceeds which are not used to pay the costs of such repairs.
Seller shall also credit against the Purchase Price the amount of any
deductible or self-insurance applicable to such casualty (unless Seller
has completed and paid for such repairs prior to Closing).
(g) Unless otherwise agreed to by Buyer in writing, at Closing
Seller shall terminate all management and commission agreements.
Notwithstanding the foregoing, if the conditions set forth in, Sections
7.1(a)-(g) 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, Buyer shall have the right, (in its sole discretion), exercisable by
written notice to Seller at or before the Closing Date, to extend the Closing
Date for a period of up to fifteen (15) days to provide additional time for the
fulfillment of such conditions. Upon any such extension, the term Closing Date
as used herein shall mean the date set forth in such written notice from Buyer.
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.
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);
(b) On the Closing Date, all of the representations of Buyer set
forth in this Agreement shall continue to be true, accurate and complete.
(c) Satisfaction of the requirements of Section 6.4 with respect to
the Existing Loan.
(d) The release by Lender of Seller and/or its partners and
principals from any and all obligations and liability under the Existing
Loan Documents and the form of the assumption and release documents being
satisfactory to Seller in their sole, but reasonable, discretion.
Closing Date.
-------------
Subject to Buyer'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 on the date which is fifteen (15) days after the
Diligence Date (such date, as may be extended pursuant to Section 7.1, being
referred to herein as the Closing Date), at the Clayton, Missouri office of the
Escrow Agent through the separate escrow closing instructions delivered by the
respective parties to Escrow Agent. It is agreed that time is of the essence in
this Agreement.
Closing Deliveries.
-------------------
On the Closing Date, Seller shall deliver or cause to be delivered to
Buyer and Escrow Agent:
(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 to issue the
Title Policy;
(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, Lender 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 Documents 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) The following documents with respect to the assignment and
assumption of the Existing Loan:
(i) Assignment and Assumption of the Mortgage;
(ii) Assignment of Assignment of Leases and Rents;
(iii) UCC-3 Assignments of Financing Statements,
(iv) Written approval of Lender to the assignment to Buyer of
the Existing Loan to Buyer;
(v) Lender's Estoppel; and
(n) Notice letters signed by Seller and addressed to the tenants
under the Leases disclosing the change in ownership of the Property, such letter
to be in a form reasonable acceptable to both parties.
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) Duly executed assumption agreement regarding the Existing Loan
Documents and such other instruments as Lender may reasonably require and
in a form acceptable to Buyer in connection with and to evidence the
assumption of the Existing Loan Documents by Buyer;
(f) Such other instruments as Seller or Escrow Agent may reasonably
request to effectuate the transactions contemplated by this Agreement;
(g) A duly executed counterpart original of the closing statement
setting forth the Purchase Price, the closing adjustments and the
application of such amounts;
(h) 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;
(i) Acknowledgment by Buyer of Buyer's receipt from Seller of the
Tenant Deposits; and
(j) The following documents with respect to the assignment and
assumption of the Existing Loan:
(i) Written approval of Lender to the assignment to Buyer of
the Existing Loan;
(ii) Assignment and Assumption of the Mortgage;
(iii) Assignment of Assignment of Leases and Rents;
(iv) UCC-3 Assignments of Financing Statements;
(v) Release of Seller's obligations under the Loan Documents
(hereinafter defined), including, without limitation, a
release of Seller from its obligations pursuant to the
Guaranty executed in connection with the Existing Loan,
all in forms reasonably satisfactory to Seller; and
(k) Executed counterparts of any other documents listed in Section
7.4 required to be signed by Buyer; and
(l) St. Louis County Certificate of Value.
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
RESERVED
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 Apartment Investment Advisors, Ltd. (the Broker). Lewis A. Levey, a
licensed Missouri real estate broker, serves as President of St. Louis STW,
Inc., a Missouri corporation, which serves as Managing General Partner of Seven
Trails West Company, L.P., a Missouri limited partnership, which is in turn,
General partner of Seven Trails West Associates, a Missouri general partnership.
Lewis A. Levey will not receive a brokerage commission with respect to this
transaction. Broker shall provide Buyer with a copy of its brokerage agreement
with Seller. 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
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 willfully and intentionally defaults
hereunder by refusing to close title hereunder in order to avoid its obligations
hereunder, then, Buyer shall be entitled to seek damages from Seller for any
such default in an amount equal to the sum of: (i) $100,000 and (ii) Buyer's
actual third-party expenses (including legal fees and reimburseable costs)
incurred in the due diligence investigation of the Property and expenses with
respect to the review and negotiation of this Agreement, all closing documents,
and the assumption of the Existing Loan (the Termination Payment). Buyer shall
submit to Seller actual paid invoices and reasonably detailed back-up
documentation supporting such invoices for such expenses. Seller shall pay the
Termination Payment based on such back-up documentation within fifteen (15) days
of submission by Buyer or within such fifteen (15) day period provide Buyer with
written objection thereto with reasonable detail as to the basis of Seller's
objections. If Buyer shall be required to commence a proceeding for collection,
buyer shall be entitled to reasonable attorneys fees incurred in connection with
such collection action together with interest on the unpaid Termination Payment
determined to be due at the rate of ten percent (10%) per annum from the date
when the Termination Payment was due by Seller. 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. In the event of a default by Seller which is discovered or
which occurs after the Closing Date with respect to either (i) Section 11.2, as
limited by Section 11.4, or (ii) Section 5.5, Buyer shall be entitled to pursue
its remedies at law or in equity, but in no event shall Seller's aggregate
liability for damages to Buyer exceed One Hundred Thousand Dollars ($100,000).
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
wrongfully 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; provided, however, that if Buyer is entitled to damages from
Seller under Section 10.1, and Seller has not paid such amounts within fifteen
(15) days of Buyer's written request (as provided in Section 10.1), then Buyer
may file a notice of lis pendens against the property with respect to any legal
action initiated by Buyer asserting its right to damages for Seller's default
under this Agreement, the source of payment for which is limited to Seller's
interest in the Property and/or proceeds related thereto, and the filing of such
a notice in good faith shall not entitle Seller to pursue all remedies available
at law or in equity.
<PAGE>
ARTICLE 11
REPRESENTATIONS AND WARRANTIES
Buyer's Representations and Warranties.
---------------------------------------
Buyer represents and warrants to Seller that:
(a) Buyer is a limited liability company, duly organized and in good
standing under the laws of the State of Delaware, is qualified (or in the
process of applying to qualify) 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 (except for the ratification or rejection
by Buyer's internal investment committee notice of which shall be given to
Seller on or before the Diligence Date). 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 (ii) assuming the Existing Loan, and to perform 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) Except for the approval by Lender of Buyer's assumption of the
Existing Loan as described in Section 6.4, 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 Section 11.1 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 obligation hereunder.
Each of the representations and warranties contained in this Section is
acknowledged by Buyer to be material and to be relied upon by Seller in
proceeding with this transaction.
0.2 Seller's Representations and Warranties.
Seller represents and warrants to Buyer that:
(a) No Violation of Zoning and Other Laws. To the best of Seller's
knowledge, Seller has not received any notice from any governmental agency
alleging violations of any building codes, building or use restrictions,
subdivision laws, zoning ordinances, or rules and regulations affecting
the Real Property which has not been entirely corrected.
(b) Eminent Domain. To the best of Seller's knowledge, there is no
pending or contemplated eminent domain or condemnation of the Land or
Improvements or any portion thereof.
(c) Assessments. Seller has not received written notice of any
special assessments to be levied against the Property which are in
addition to those disclosed in the Title Report.
(d) Authority of Seller. Seller is a general partnership existing
under the laws of the State of Missouri. Seller's execution, delivery of
and performance under this Agreement are undertaken pursuant to authority
validly and duly conferred upon Seller and the signatories hereto.
(e) Nonforeign Status Seller is not a foreign person as defined in
Section 1445 of the Internal Revenue Code of 1986, as amended. Seller
shall deliver to Buyer at closing a Certificate of Nonforeign Status
setting forth Seller's address and United States taxpayer identification
number and certifying that it is not a foreign person as so defined.
(f) Executory Agreements. Exhibit C and Exhibit F are true and
complete listing of all material Property Contracts and all Existing Loan
Documents affecting the Property which are binding upon or impose any
liability or obligation upon Buyer following the Closing. Seller has
received no written notice of any default or any occurrence which would,
with the provision of notice or the passage of time or both, constitute a
default, under any material Property Contracts or any Existing Loan
Documents and to the best of Seller's knowledge all material Property
Contracts and all Existing Loan Documents are currently in full force and
effect.
(g) Leases and Rent Roll. Attached as Exhibit E hereto are a (i)
Rent Roll, (ii) Aged Delinquency Report and (iii) Delinquency/Prepaid Rent
Report prepared by the property manager for the Property. To the best of
Seller's knowledge, the information contained in such exhibit is true,
accurate and complete in all material respects. To the best of Seller's
knowledge, there are no unwritten leases affecting the Property.
(h) No Liens; No Defaults. Seller has received no written notice of
any default or breach under any covenant, condition, restriction, right of
way, easement, mortgage, deed of trust, lien or license affecting the
Property, or any portion thereof, that is to be performed or complied with
by the owner of the Property which has not been entirely corrected.
(j) No Actions. There are no actions, suits, proceedings, or claims
pending, or to the best of Seller's knowledge, contemplated or threatened
in writing, with respect to or in any manner affecting the Property which
would be binding on or could be brought against or otherwise affect Buyer
or which would prevent Seller from satisfying its obligations under this
Agreement.
(k) Financial Information; Bankruptcy. Seller, (i) is not in
receivership or dissolution, (ii) has not made an assignment for the
benefit of creditors or admitted in writing its inability to pay its debts
as they mature, (iii) has not been adjudicated a bankrupt or filed a
petition in voluntary bankruptcy or a petition or answer seeking
reorganization or an arrangement with creditors under the Federal
bankruptcy laws or any similar law or statute of the United States or any
jurisdiction and no such petition has been filed against Seller, and (iv)
to the best of its knowledge, none of the foregoing are pending.
Each of the representations and warranties contained in this Section shall
be deemed to be automatically updated by (i) any notices sent from Seller or its
authorized representative to Buyer relating to the matters which are the subject
of the representations and/or warranties and (ii) any information relating the
matters which are the subject of the representations and/or warranties which is
discovered by Buyer in the context of its due diligence on the Property. Each of
the representations and warranties contained in this Section is acknowledged by
Seller to be material and to be relied upon by Buyer in proceeding with this
transaction.
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 Mr. Rock D'Errico and Mr. Lewis Levey, without independent
investigation or inquiry except for inquiry of Seller's property manager for the
Property. Said individuals are the employees of Seller who have had primary
responsibility for the sale of the Property to Buyer. 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.
Survival of Warranties.
-----------------------
All of representations and warranties in this Agreement shall be deemed
given as of the date of this Agreement and the Closing Date, except as modified
by updated information provided by Seller or discovered by Buyer as set forth in
Sections 11.2 and 11.3, and shall be updated in a certificate to be provided to
the other party at and as of the Closing Date. All of the aforesaid
representations and warranties shall survive the closing of this transaction;
provided, however, that any claim for any misrepresentation or breach shall be
deemed to have been waived unless a party notifies the warranting party in
writing of such claim for misrepresentation or breach within thirty (30) days
after the Closing Date.
Property Conveyed AS IS.
------------------------
(a) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN A CLOSING
DOCUMENT, 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, (I) WARRANTIES, REPRESENTATIONS
OR GUARANTIES AS TO 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, (WHETHER, AND TO THE EXTENT TO WHICH THE PROPERTY OR ANY
PORTION THEREOF IS AFFECTED ANY STREAM (SURFACE OR UNDERGROUND), BODY OF
WATER, FLOOD PRONE AREA, FLOOD PLAIN, FLOODWAY OR SPECIAL FLOOD HAZARD,
(V) DRAINAGE, ( 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
VICESITY 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) EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT OR IN A CLOSING
DOCUMENT, 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, EXCEPT AS EXPRESSLY
SET FORTH HEREIN, AND ACKNOWLEDGES THAT NO OTHER SUCH REPRESENTATIONS HAVE
BEEN MADE. 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 AND EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT OR A
CLOSING DOCUMENT, 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 SUBJECT TO OBLIGATION OF SELLER SURVIVING THE
CLOSING BY VIRTUE OF THIS AGREEMENT OR A CLOSING DOCUMENT. BUYER FURTHER
ACKNOWLEDGES AND AGREES THAT THERE ARE NO ORAL AGREEMENTS, WARRANTIES OR
REPRESENTATIONS, COLLATERAL TO ALL AFFECTING THE PROPERTY BY SELLER, ANY
AGENT OF SELLER OR ANY THIRD PARTY. THE TERMS AND CONDITIONS OF THIS
SECTION 11.5(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 ANY
PERSON, UNLESS THE SAME ARE SPECIFICALLY SET FORTH IN THIS AGREEMENT OR A
CLOSING DOCUMENT, BUYER ACKNOWLEDGES THAT THE PURCHASE PRICE REFLECTS THE
AS IS NATURE OF THIS SALE AND ANY FAULTS, LIABILITIES, DEFECTS OR THE
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.
ARTICLE 12
MISCELLANEOUS
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.
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 with 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, l6th Floor
Boston, MA 02110
Attn: Mr. Rock D'Errico
Facsimile: 617/478-4725
and
Seven Trails West Company, L.P.
c/o Paragon Group
1401 South Brentwood Boulevard
Suite 675
St. Louis, MO 63144
Attn: Mr. Lewis Levey
Facsimile: 314/963-9715
with a copy to:
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109
Attn: Andrew C. Sucoff, Esq.
Facsimile: 617/227-8591
(2) If to Buyer:
Seven Trails West LLC
Allegis Realty Investors LLC
242 Trumbull Street
Hartford, CT 06103-1212
Attn: John R. Connelly, Jr
Facsimile: 860/275-4225.
with a copy to:
Allegis Realty Investors LLC
242 Trumbull Street
Hartford, CT 06103-1212
Attn: Matthew H. Lynch, Esq.
Facsimile: 860/275-2559
with a copy to:
Sonnenschein Nath & Rosenthal
One Metropolitan Square, Suite 3000
St. Louis, MO 63102
Attn: Steven R. Karl, Esq.
Facsimile: 314/259-5959
(3) If to the Escrow Agent:
Title Insurers Agency, Inc.
226 South Meramec Avenue, Suite 100
Clayton, Missouri 63105
Attn: Robert Parsons
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.
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.
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.
Amendments.
-----------
This Agreement may be amended only by a written instrument executed by
Seller and Buyer (or Buyer's assignee or transferee).
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.
Applicable Law.
---------------
This Agreement shall be construed under and in accordance with the laws of
state in which the Property is located.
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.
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 fall on a Saturday,
Sunday or legal holiday, the date applicable shall be the next business day.
No Personal Liability. The obligations of Seller hereunder shall be
binding only on the Sellers and its general partners and neither Buyer nor
anyone claiming by, through or under Buyer shall be entitled to obtain any
judgment or creating personal liability on the part of the officers, directors,
shareholders, advisors or agents of Seller or Seller's partners or any of their
successors (other than for fraud or intentional misconduct). The obligations of
Buyer hereunder shall be binding only on the Buyer and neither Seller nor anyone
claiming by, through or under Seller shall be entitled to obtain any judgment or
creating personal liability on the part of the officers, managers, members,
advisors or agents of Buyer or Buyer's members or managers or any of their
successors (other than for fraud or intentional misconduct).
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 (other than notice of lis
pendens filed by Buyer following a default by 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 (other than
notice of lis pendens filed by Buyer following a default by Seller), 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.
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.
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.
<PAGE>
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.
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.
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 with the provisions of this Agreement and which are
consistent with the provisions of this Agreement.
Parties 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. Seller hereby represents and warrants to Buyer
that (i) Seller is not in a significantly disparate bargaining position in
relation to Buyer, and (ii) Seller is represented by legal counsel in connection
with the transaction contemplated by this Agreement.
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.
Attorney Fees.
--------------
In addition to all other remedies available to a party under this
Agreement, and notwithstanding anything in this Agreement to the contrary, the
prevailing party shall be entitled to recover from the other party such sum as
the court may adjudge reasonable as attorneys fees at trial, on any appeal, in
any bankruptcy proceeding and in any petition for review, in addition to all
other sums provided by law. This provision shall survive the closing or any
earlier termination of this Agreement.
No Shopping.
------------
Until such time as this Agreement is terminated, the Property shall be
taken off the market and neither Seller nor any of its affiliates shall,
directly or indirectly, seek to procure any other purchaser of the Property, or
any portion thereof.
ARTICLE 13
IRS FORM 1099-S DESIGNATION
In order to comply with information reporting requirements of Section
6045(c) 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 MS and with any other documents used to complete IRS Form
1099-S.
<PAGE>
ARTICLE 14
OFFER; EFFECTIVE DATE
Buyer's execution and submission to Seller of this Agreement constitutes
an offer to purchase the Property. The Effective Date of this Agreement shall be
the date Buyer receives a fully executed original of this Agreement with all
Exhibits attached, and such date shall be inserted on page one of this
Agreement.
[ REMAINDER OF PAGE INTENTIONALLY LEFT BLANK ]
<PAGE>
IN WITNESS WHEREOF, Seller has executed this Agreement as of the 12th day
of May, 1999.
SELLER:
SEVEN TRAILS WEST ASSOCIATES, a Missouri
general partnership
By: PaineWebber Income Properties Five
Limited Partnership, a Delaware limited
partnership, a General Partner of
Seven Trails West Associates
By: Fifth Income Properties Fund,
Inc., a Delaware corporation,
the Managing General Partner of
PaineWebber Income Properties
Five Limited Partnership
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
and
By: Seven Trails West Company, L.P., a
Missouri limited partnership, a General
Partner of Seven Trails West Associates
By: St. Louis STW, Inc., a Missouri
corporation, the Managing General
Partner of Seven Trails West
Company, L.P.
By: /s/ Lewis A. Levey
------------------
Name: Lewis A. Levey
Title: President
IN WITNESS WHEREOF, Buyer has executed this Agreement as of the 12th day
of May, 1999.
BUYER:
SEVEN TRAILS WEST LLC, a Delaware limited
liability company
By: Allegis Realty Investors LLC, a
Massachusetts limited liability
company, its Manager
By: /s/ John R. Connelly, Jr.
------------------------
John R. Connelly, Jr.
Senior Vice President
<PAGE>
EXHIBIT A
The Land
[See attached]
LEGAL DESCRIPTION: PARCEL NO. 1.- A tract of land being part of those
parcels described as Parcel 1 and 2 conveyed to Seven Trails West, Associates,
by instrument recorded in Deed Book 7665 page 2347 of the St. Louis County
Records, situated in U. S. Survey 1908 and Section 35, Township 45 North, Range
4 East in the City of Ballwin, St. Louis County, Missouri, being more
particularly described as follows:
Beginning at a point in the North line of property conveyed to the City of
Ballwin by instrument recorded in Deed Book 5765 page 217 of the St. Louis
County Records, said point being the Southeast corner of property conveyed to
the City of Ballwin for the widening of Holloway Road by instrument recorded in
Deed Book 6585 page 583 of said records; thence Northeasterly, along the East
line of said property so conveyed to the City of Ballwin, North 28 degrees 01
minute 00 seconds East 259.40 feet to a point of curvature in the South line of
Seven Trails Drive per Dedication Plat thereof recorded in Plat Book 173 page 12
of said records; thence Northeasterly along the South lien of said Seven Trails
Drive, being a curve to the right, having a radius of 25.00 feet, an arc
distance of 32.27 feet (North 65 degrees 00 minutes 00 seconds East 30.08 feet
on its chord: to a point of tangency; thence Southeasterly, continuing along the
South line of said Seven Trails Drive, South 78 degrees 01 minute 00 seconds
East 57.19 feet to a point of curvature; thence Southeasterly, along a curve to
the right having a radius of 202.87 feet, an arc distance of 53.11 feet (South
70 degrees 31 minutes 00 seconds East 52.96 feet on its chord) to a point of
tangency; thence South 63 degrees 01 minute 00 seconds East 55.00 feet to a
point of curvature; thence Southeasterly, along a curve to the left having a
radius of 393.63 feet, an arc distance of 137.40 feet to a point of reverse
curvature; thence Southeasterly, along a curve to the right having a radius of
316.60 feet, an arc distance of 254.18 feet (South 60 degrees 01 minute 00
seconds East 247.41 feet on its chord) to a point of reverse curvature; thence
Southeasterly, along a curve to the left having a radius of 348.18 feet an arc
distance of 320.12 feet to a point of tangency: thence Southeasterly, continuing
along the South line of said Seven Trails Drive, South 90 degrees 41 minutes 40
seconds East 223.68 feet to a point of curvature; thence Southeasterly, along a
curve to the right having a radius of 384.79 feet an arc distance of 184.20 feet
(South 75 degrees 58 minutes 50 seconds East 1822.44 feet on its chord) to a
point of tangency; thence Southeasterly, South 62 degrees 16 minutes 00 seconds
East 60.00 feet to a point of curvature; thence Southeasterly, along a curve to
the right having a radius of 237.28 feet an arc distance of 336.48 feet (South
21 degrees 38 minutes 30 seconds East 308.99 feet on its chord) to a point of
tangency; thence Southwesterly, continuing along the South line of said Seven
trails Drive, South 18 degrees 59 minutes 00 seconds West 221.33 feet to a point
of curvature; thence Southwesterly, along a curve to the right having a radius
of 929.06 feet an arc distance of 97.29 feet (South 21 degrees 59 minutes 00
seconds West 97.25 feet on its chord) to a point of tangency; thence
Southwesterly, South 24 degrees 59 minutes 00 seconds West 111.53 feet to a
point of curvature; thence Southwesterly, along a curve to the left having
radius of 144.66 feet an arc distance of 63.76 feet to its intersection with the
South line of property described as Parcel 1, conveyed to Seven trails West,
associates; by said instrument recorded in Deed Book 7665 page 2347 of said
records; thence Northwesterly, leaving the South line of said Seven Trails
Drive, being along the South line of property described as Parcel 2 aforesaid,
North 63 degrees 01 minute 00 seconds West 10.68 feet to the Southeast corner of
property conveyed to the City of Ballwin by instrument recorded in Deed Book
5765 page 217 of said records;hence Northeasterly, along the East line of said
property conveyed to the City of Ballwin; North 18 degrees 59 minutes 00 seconds
East 479.54 feet to the Northeast corner thereof; thence Northwesterly, along
the North line of said property conveyed to the City Ballwin, North 89 degrees
26 minutes 00 seconds West 539.17 feet to an angle point therein; thence North
63 degrees 01 minute 00 seconds West 1044.98 feet to the point of beginning.
PARCEL NO. 2: A tract of land being part of those parcels described as
Parcel 1 and 2 conveyed to Seven Trails West, Associates, by instrument recorded
in Deed Book 7665 page 2347 of the St. Louis County Records, situated in U. S.
Survey 1908 and Section 35, Township 45 North, Range 4 East in the City of
Ballwin, St. Louis County, Missouri, being more particularly described as
follows:
Beginning at a point in the South line of property conveyed to Lester F.
Krupp, Jr. and Patricia A. Krupp, his wife, by instrument recorded in Deed Book
9960 page 1280 of the St. Louis County Records, being the Northeast corner of
Property conveyed to the City of Ballwin for the widening of Holloway Road, by
instrument recorded in Deed Book 6585 page 583; thence South 62 degrees 14
minutes 03 seconds East 250.77 feet to a point; thence Northeasterly, along the
East line of said property, North 27 degrees 29 minutes 30 seconds East 142.59
feet to a point; thence South 62 degrees 30 minutes 30 seconds East 57.00 feet
to a point; thence North 27 degrees 29 minutes 30 seconds East 212.98 feet to
the Northeast corner thereof; thence North 73 degrees 52 minutes 05 seconds
West, along the North line thereof, 443.70 feet to a point in the East line of
said Holloway Road; thence Northeasterly, along the East line of said Holloway
Road, North 35 degrees 45 minutes 00 seconds East 196.67 feet to a
non-tangential point of curvature; thence Northeasterly, along the South line of
property conveyed to the City of Ballwin for the widening of Holloway Road, by
instrument recorded in Deed Book 6780 page 529 of said records, being a curve to
the right having a radius of 375.00 feet an arc distance of 302.33 feet (North
58 degrees 51 minutes 55 seconds East 294.21 feet on its chord) to a
non-tangential point; thence South 88 degrees 50 minutes 00 seconds East 552.48
feet to its intersection with the North and South centerline of said Section 35;
thence Southwesterly, along said line, South 00 degrees 29 minutes 00 seconds
West 1073.49 feet to a point in the Northeast line of said U. S. Survey 1908;
thence Southeasterly, along said Northeast line, South 62 degrees 16 minutes 00
seconds East 490.80 feet to a point; thence South 28 degrees 59 minutes 00
seconds West 934.34 feet to the Southeast corner of property conveyed as Parcel
1 to Seven Trails West Associates by instrument recorded in Deed Book 7665 page
2347 of said records; thence Northwesterly, along the South line thereof, North
63 degrees 01 minute 99 seconds 4.08 feet to its intersection with a point in
the East line of Seven Trails Drive per the Dedication Plat thereof recorded in
Plat Book 173 page 12 of said records; thence Northeasterly, along a curve to
the right having a radius of 94.66 feet an arc distance of 70.07 feet (North 03
degrees 46 minutes 40 seconds East 68.48 feet on its chord) to a point of
tangency; thence North 24 degrees 59 minutes 00 seconds East 111.53 feet to a
point of curvature in the East line thereof; thence Northeasterly, continuing
along said East line, along a curve to the left having a radius of 979.06 feet
an arc distance of 102.53 feet (North 21 degrees 59 minutes 00 seconds East
102.48 feet on its chord) to a point of tangency; thence North 18 degrees 59
minutes 00 seconds East 221.33 feet to a point of curvature; thence
Northwesterly, along said East line being a curve to the left having a radius of
287.28 feet an arc distance of 407.39 feet (North 21 degrees 38 minutes 30
seconds West 374.10 feet on its chord) to a point of tangency in the North line
thereof; thence Northwesterly, North 62 degrees 16 minutes 00 seconds West 60.00
feet to a point of curvature; thence Northwesterly continuing along said North
line, along a curve to the left having a radius of 434.79 feet an arc distance
of 208.13 feet (North 75 degrees 58 minutes 50 seconds West 206.15 feet on its
chord) to a point of tangency; thence North 89 degrees 41 minutes 40 seconds
West 223.68 feet to a point of curvature; thence Northwesterly continuing along
said North line, along a curve to the right having a radius of 298.18 feet an
arc distance of 274.15 feet (North 63 feet 21 minutes 20 seconds West 264.60
feet on its chord) to a point of reverse curvature; thence Northwesterly, along
a curve to the left having a radius of 366.60 feet an arc distance of 294.32
feet to a point of reverse curvature; thence Northwesterly, along a curve to the
right having a radius of 343.63 feet an arc distance of 119.95 feet (North 73
degrees 01 minute 00 seconds West 119.34 feet on its chord) to a point of
tangency; thence North 63 degrees 01 minute 00 seconds West 55.00 feet to a
point of curvature; thence Northwesterly, along a curve to the right having a
radius of 202.87 feet an arc distance of 53.11 feet (North 55 degrees 31 minutes
00 seconds West 52.96 feet to a point of curvature; thence Northwesterly, along
a curve to the right having a radius of 25.00 feet an arc distance of 33.18 feet
(North 10 degrees 00 minutes 00 seconds West 30.79 feet on its chord) to a point
of tangency in the East line of property conveyed to the City of Ballwin by said
instrument recorded in Deed Book 6585 page 583 of said records; thence
Northeasterly, along said East line, North 28 degrees 01 minute 00 seconds East
304.23 feet to the point of beginning.
<PAGE>
REINSTATEMENT AND AMENDMENT
OF PURCHASE AND SALE AGREEMENT
THIS REINSTATEMENT AND AMENDMENT OF PURCHASE AND SALE AGREEMENT (the
Reinstatement/Amendment) is effective as of July 2, 1999, by and between SEVEN
TRAILS WEST ASSOCIATES, a Missouri general partnership (Seller), and SEVEN
TRAILS WEST LLC, a Delaware Limited Liability Company (Buyer).
WITNESSETH:
WHEREAS, Seller and Buyer entered into that certain Purchase and Sale
Agreement effective as of May 12, 1999 (the Agreement) for the Seven Trails West
Apartments situated in St. Louis County, Missouri and further described in the
Agreement. All capitalized terms used in this Reinstatement/Amendment and not
otherwise defined herein shall have the meanings ascribed to them in the
original Agreement;
WHEREAS, the Buyer terminated the Agreement on June 11, 1999, in
accordance with Section 5.2 of the Agreement; and
WHEREAS, Seller and Buyer desire to reinstate and reaffirm the Agreement
and to amend certain provisions of the reinstated Agreement as provided in this
instrument.
NOW, THEREFORE, for and in consideration of the foregoing and the mutual
covenants set forth below, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties state as
follows:
1. Reaffirmation of Agreement. Buyer and Seller hereby reinstate and
reaffirm the terms of the Agreement subject to the modifications and amendments
set forth herein.
2. Article 1, Definition of Purchase Price. The Purchase Price is changed
to $26,400,000.
3. Section 3.1, Deposit. The initial Deposit of $275,000 is still in the
possession of the Escrow Agent as of the date of this Reinstatement/Amendment.
Within one business day of Buyers receipt of a fully executed version of this
Reinstatement/Amendment, Buyer will deposit an additional $475,000 with the
Escrow Agent. The combined deposits of $750,000, and all interest accrued
thereon, shall constitute the Escrowed Amount under the Agreement and shall be
held by Escrow Agent in accordance with the instructions attached as Exhibit D
to the Agreement.
4. Section 4.3, entitled Property Contracts; Existing Loan Documents.
Buyer does not wish to assume any of the Property Contracts other than the
laundry facility agreement, dated on or about August 8, 1995, with Allied
Laundry Equipment Company. Seller agrees to terminate all other Property
Contracts in accordance with Section 4.3.
5. Section 5.2, entitled Diligence Date. Buyer waives any further right to
terminate the Agreement pursuant to Section 5.2 and acknowledges that Buyer
shall have no right to terminate the Agreement unless a condition set forth in
Section 7.1 is not satisfied on or before the Closing Date.
6. Section 6.1, entitled Title and Survey. The term Title Commitment shall
refer to the Commitment for Title Insurance, Number 0041387, issued to Buyer by
the Title Insurer effective as of April 12, 1999 (and any further updates
thereto). The term Survey shall refer to the ALTA survey of the Real Property
prepared by Clayton Engineering Company, last revised on February 18, 1999 (and
any further updates thereto). Seller shall convey the Real Property to Buyer by
the by the legal description shown on the Title and by the legal description
shown on the Survey.
7. Section 6.4, entitled Existing Loan. The parties acknowledge that
Lender has not approved the proposed assignment of the Existing Loan to Buyer as
of the date of this instrument and that such consent remains a condition
precedent to Closing as specified in Section 6.4 and other provisions of the
Agreement. The parties shall continue to cooperate together in good faith to
obtain such consent; which consent will be diligently pursued by Seller without
any change to the existing loan terms and conditions.
8. Section 7.1, entitled Buyers Conditions Precedent. The phrase fifteen
(15) days in the last paragraph of Section 7.1 is deleted, and the phrase thirty
(30) days is inserted in lieu thereof.
9. Section 7.3, entitled Closing Date. The closing shall be held on July
15, 1999 (unless extended pursuant to Section 7.1).
10. Section 12.2, entitled Notices. In addition to the other methods for
delivering notice set forth in Section 12.2, notice sent to an addressee by
facsimile will be considered effectively delivered to such addressee on the date
sent if (A) such notice is transmitted to the facsimile number of the addressee
set forth in Section 12.2, (B) the facsimile machine of the sender generates a
written confirmation of the delivery of such notice, and (C) a hard copy of such
notice is also sent to the addressee by a reputable overnight mail service.
11. Miscellaneous. Except as amended hereby, all other terms and
conditions of the Agreement shall remain unchanged and shall be in full force
and effect. Should any of the terms of the Agreement conflict with this
Reinstatement/Amendment, then the terms of this Reinstatement/Amendment shall
control.
12. Counterparts. Seller and Buyer each hereby acknowledge that this
Reinstatement/Amendment may be executed in counterparts and exchanged by
facsimile transmission and the facsimile copies of each party's respective
signature shall be binding as if the same were an original signature.
13. Offer. The Buyers execution and submission to Seller of this
Reinstatement/Amendment constitutes an offer to Seller. If Seller fails to
return a fully executed Reinstatement/Amendment to Buyer by 5:00 p.m. EST on
July 6, 1999, this offer shall be automatically revoked.
IN WITNESS WHEREOF, the parties have executed this Reinstatement/Amendment
effective as of the day and year above written.
SELLER:
SEVEN TRAILS WEST ASSOCIATES, a Missouri
general partnership consisting of
PaineWebber Income Properties Limited
Partnership and Seven Trails West
Company, L.P.
By: PaineWebber Income Properties
Limited Partnership, a Delaware
limited partnership, by its Managing
General partner, Fifth Income
Properties Fund, Inc., a Delaware
corporation
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
By: Seven Trails West Company, L.P., a
Missouri limited partnership, by its
Managing General Partner, St. Louis
STW, Inc., a Missouri Corporation
By: /s/ Lewis A. Levey
------------------
Name: Lewis A. Levey
Title: President
<PAGE>
BUYER
SEVEN TRAILS WEST LLC, a Delaware limited
liability company, by its Manager, Allegis
Realty Investors LLC, a Massachusetts
limited liability company
By: /s/ John R. Connelly, Jr.
-------------------------
John R. Connelly, Jr.
Senior Vice President
The following additional parties join in the execution of this
Reinstatement/Amendment solely for the purpose of acknowledging as to the
matters, and/or agreeing to the limited obligations, applicable to such parties
in the reinstated and amended Agreement.
ESCROW AGENT
TITLE INSURERS AGENCY, INC.
By: _____________________________
Name: _____________________________
Title:__________________________
BROKER
APARTMENT INVESTMENT ADVISORS, LTD.
By: /s/ Kenneth P. Aston, Jr.
-------------------------
Name: Kenneth P. Aston, Jr.
Title: President
<PAGE>
SECOND AMENDMENT TO
PURCHASE AND SALE AGREEMENT
THIS SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT (the Second
Amendment) is effective as of August 23, 1999, by and between SEVEN TRAILS WEST
ASSOCIATES, a Missouri general partnership (Seller), and SEVEN TRAILS WEST LLC,
a Delaware Limited Liability Company (Buyer).
W I T N E S S E T H:
WHEREAS, Seller and Buyer entered into that certain Purchase and Sale
Agreement effective as of May 12, 1999, as reinstated and amended by that
certain Reinstatement and Amendment of Purchase and Sale Agreement effective as
of July 2, 1999 (the Agreement) for the Seven Trails West Apartments situated in
St. Louis County, Missouri and further described in the Agreement. All
capitalized terms used in this Second Amendment and not otherwise defined herein
shall have the meanings ascribed to them in the original Agreement;
WHEREAS, the Closing was scheduled to take place on August 16, 1999, but
several conditions precedent to Closing were not satisfied on such date and have
not been satisfied as of the date of this Second Amendment (including, but not
limited to, final approval from the Lender of the transfer of the Property to
Buyer, the assignment to and assumption of the Existing Loan by Buyer and the
release of the Seller and its affiliated guarantors on the Existing Loan, as
evidenced by Lender's execution and delivery of the documentation required by
the Agreement);
WHEREAS, the Seller has not completed a statement of prorations and
adjustments for the Closing, and the size and character of this Property makes
its difficult to determine on or in advance of the Closing the accurate figures
for such prorations and adjustments.
WHEREAS, the Seller and Buyer have been diligently pursuing the Closing on
this transaction and by mutual agreement have extended the Closing until August
23, 1999, and the Seller and Buyer desire to further amend certain provisions of
Agreement as provided in this instrument.
NOW, THEREFORE, for and in consideration of the foregoing and the mutual
covenants set forth below, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties state as
follows:
1. Reaffirmation of Agreement. Buyer and Seller hereby reaffirm the terms
of the Agreement subject to the modifications and amendments set forth herein.
2. Section 3.7, entitled Prorations Generally. To the extent any of the
closing prorations made pursuant to Section 3.3, Section 3.5 and Section 3.6 are
done on the basis of estimates, the same shall be subject to post-Closing
adjustment and reconciliation when the actual amounts of those adjustment items
can be determined. Any items which are to be adjusted post-Closing shall be
identified in the Prorations and Adjustments section on the Closing Statement as
such. Seller and Buyer agree that upon receipt of information relating to the
actual amounts of any items to be adjusted post-Closing, each shall promptly
forward a copy of such information to the other party, along with a statement
identifying the amount to be refunded to the other party or the amount which is
owed by the other party (together, such information shall be referred to as the
Post-Closing Reconciliation Information). If Funds are to be refunded to the
other party, then a check (or checks) in the amount of the funds owed shall be
sent to the other party simultaneously with the Post-Closing Reconciliation
Information. If funds are owed by the other party, such funds shall be paid
within ten (10) business days of receipt of the Post-Closing Reconciliation
Information. With respect to any amounts owed to Seller as a result of
Post-Closing Reconcilement Information, Buyer agrees that is shall reimburse
such amounts as follows: (i) one (1) check in the amount of ten percent (10%) of
the funds due to Seller made payable to Seven Trails West Company, L.P. shall be
sent to Lewis A. Levey at the address identified in Section 12.2(l) of the
Agreement for Seven Trails West Company, L.P. and (ii) one (1) check in the
amount of ninety percent (90%) of the funds due to Seller payable to Paine
Webber Income Properties Five Limited Partnership shall be sent to Paine Webber
Income Properties Incorporated at the address identified in Section 12.2(l) of
the Agreement. The proration for 1999 real estate taxes shall be done based on
an estimate of $300,000. The parties shall adjust and reconcile any estimated
amounts, other than real estate taxes, within forty five (45) days of the
Closing. The parties shall adjust and reconcile the 1999 real estate taxes
within fifteen (15) days of Purchaser s receipt of the final tax bill for 1999
(but under no circumstances any later than December 15, 1999). Any out of pocket
expense incurred by a party in collecting or obtaining reduction of any amount
prorated may be offset against the amount recovered or reduction obtained
(provided that this shall not apply to any expenses associated with any
abatement or other proceedings undertaken by Buyer with respect to the
modification or reduction of real estate taxes). This paragraph shall survive
the Closing. This paragraph will supersede any conflicting or in inconsistent
provision in Section 3.3, Section 3.5 and Section 3.6.
3. Section 4.3, entitled Property Contracts; Existing Loan Documents.
Seller has agreed to terminate all Property Contracts at or before the Closing
(other than the laundry facility agreement, dated on or about August 8, 1995,
with Allied Laundry Equipment Company), but Seller has not delivered, and Seller
does not wish to deliver, termination notices until the date of the Closing.
Seller agrees to bear any and all loss, cost and expense in connection with such
termination and to indemnify and hold Buyer harmless from any and all loss, cost
and expense with respect to such Property Contracts (including, but not limited
to, any Property Contracts extending beyond the Closing).
4. Section 4. entitled Existing Loan. The parties acknowledge that it is a
condition precedent to each of their obligations to close that the Lender
approve the assumption of the Existing Loan by Buyer and that Seller be released
from all obligations under the Existing Loan Documents. The parties further
acknowledge that the Lender has consented to the assumption of the Existing Loan
by Buyer, but that it has not agreed to fully release the Seller from all of its
obligations under the Existing Loan Documents. Seller and Buyer agree that the
assumption of the Existing Loan shall be pursuant to the version of the
Assumption and Modification Agreement faxed by the counsel for Seller to the
counsel for Buyer on August 24, 1999, and that as a result of Lender's failure
to fully release Seller from its obligations under the Existing Loan Documents,
Seller and Buyer shall at Closing execute a Hold Harmless Agreement in the form
attached hereto as Exhibit A.
5. Section 7.1 entitled Buyer's Conditions Precedent and Section 7.2
entitled Seller's Conditions Precedent. The deadline for satisfaction of the
conditions precedent outlined in Section 7.1 and 7.2 is extended to August 27,
1999, except that (i) Buyer agrees that the condition precedent set forth in
Section 7.1(b) shall be satisfied as set forth in Section 4 above, (but
remaining contingent upon the Existing Lender's delivery of the executed
Assumption and Modification Agreement) and (ii) Seller agrees that the condition
precedent in Section 7.2(c) shall be satisfied as set forth in Section 4 above
(but remaining contingent upon Existing Lender's delivery of the executed
Assumption and Modification Agreement) . The parties acknowledge that Buyer has
already exercised its right to extend the Closing as provided in Section 7.1 and
has no further right to extend the Closing pursuant to such Section.
6. Section 7.3 entitled Closing Date. The Closing shall be held on August
27, 1999 (subject to and conditioned upon satisfaction of all conditions
precedent set forth in the Agreement). In the event that the Closing does not
occur on or before August 27, 1999 (other than as a result of a default by a
party hereunder), then the Agreement shall terminate and be of no further force
and effect, and neither party shall have any liability to the other (other than
as a result of a default by a party).
7. Miscellaneous. Except as amended hereby, all other terms and conditions
of the Agreement shall remain unchanged and shall be in full force and effect.
Should any of the terms of the Agreement conflict with this Second Amendment,
then the terms of this Second Amendment shall control. The parties will deliver
a copy of this Second Amendment to the Escrow Agent and the Broker, but neither
the Escrow Agent nor the Broker shall be required to execute this Second
Amendment.
8. Counterparts. Seller and Buyer each hereby acknowledge that this Second
Amendment may be executed in counterparts and exchanged by facsimile
transmission and that the facsimile copies of each party s respective signature
shall be binding as if the same were an original signature.
9. Offer. The Buyer's execution and submission to Seller of this Second
Amendment constitutes an offer to Seller. If Seller fails to return a fully
executed Second Amendment to Buyer by 5:00 p.m. EST on August 25 1999, this
offer shall be automatically revoked.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Second Amendment
effective as of the day and year above written.
SELLER
SEVEN TRAILS WEST ASSOCIATES, a Missouri
general partnership consisting of Paine
Webber Income Properties Limited Partnership
and Seven Trails West Company, L.P.
By: Paine Webber Income Properties Limited
Partnership, a Delaware limited
partnership, by its Managing General
Partner, Fifth Income Properties Fund,
Inc., a Delaware corporation
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
By: Seven Trails West Company, L.P., a
Missouri limited partnership, by its
Managing General Partner, St. Louis
STW, Inc., a Missouri corporation
By: /s/ Lewis A. Levey
------------------
Name: Lewis A. Levey
Title: President
BUYER
SEVEN TRAILS WEST LLC, a Delaware limited
liability company, by its Manager, Allegis
Realty Investors LLC, a Massachusetts
limited liability company
By: /s/ John R. Connelly, Jr.
-------------------------
John R. Connelly, Jr.
Senior Vice President
<PAGE>
SPECIAL WARRANTY DEED
This Special Warranty Deed, made and entered into as of this 26th day of
August, 1999, by and between SEVEN TRAILS WEST ASSOCIATES, a Missouri general
partnership, party of the first part, whose address is c/o Paragon Group, 1401
South Brentwood Boulevard, St. Louis, MO 63144 and SEVEN TRAILS WEST LLC, a
Delaware limited liability company, party of the second part, whose address is
c/o Allegis Realty Investors LLC, 242 Trumbull Street, Hartford, CT 06103-1212.
WITNESSETH, that said party of the first part for and in consideration of
the sum of TEN DOLLARS ($10.00) and other good and valuable consideration paid
by said party of the second part, the receipt and sufficiency of which is hereby
acknowledged, does by these presents Bargain, Sell, Convey and Confirm unto said
party of the second part, all of the party of the first part s right, title and
interest in the following real estate situated in the County of St. Louis, State
of Missouri, to wit (the Real Estate):
See Exhibit A attached hereto and incorporated herein by reference.
To Have and to Hold said Real Estate, together with all rights and
appurtenances to the same belonging, unto said party of the second part and to
its successors and assigns forever. The party of the first part hereby covenants
that said first party, and its successors and assigns, shall and will warrant
and defend the title to said Real Estate unto said party of the second part and
to its successors and assigns forever, against the lawful claims of all persons
claiming by, through or under the party of the first part but none other,
excepting, however, those permitted exceptions set forth on Exhibit B attached
hereto and incorporated herein by this reference.
[Signatures continued on following page]
<PAGE>
IN WITNESS WHEREOF, the said party of the first part has executed these
presents the day and year first above written.
SELLER:
SEVEN TRAILS WEST ASSOCIATES, a Missouri
general partnership
By: PaineWebber Income Properties Five
Limited Partnership, a Delaware limited
partnership, a General Partner of Seven
Trails West Associates
By: Fifth Income Properties Fund, Inc.,
a Delaware corporation, the Managing
General Partner of Paine Webber
Income Properties Five Limited
Partnership
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
and
By: Seven Trails West Company, L.P., a
Missouri limited partnership, a General
Partner of Seven Trails West Associates
By: St. Louis STW, Inc., a Missouri
corporation, the Managing General
Partner of Seven Trails West
Company, L.P.
By: /s/ Lewis A. Levey
------------------
Name: Lewis A. Levey
Title: President
<PAGE>
SEVEN TRAILS WEST 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 26th day of August, 1999, by SEVEN TRAILS WEST 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 SEVEN TRAILS
WEST LLC (Purchaser), a Delaware limited liability company, having an office at
c/o Allegis Realty Investors LLC, 242 Trumbull Street, Hartford, CT 06103-1212.
1. Land and Improvements. The Land shall mean the real property located in
the County of St. Louis, State of Missouri, which is more particularly described
in Exhibit A attached hereto, and which is commonly known as Seven Trails West
Apartments and located at 500 Seven Trails Drive, Ballwin, Missouri, together
with the buildings, structures and other improvements located thereon (the
Improvements). Collectively, the Land and Improvements shall be referred to as
the Property.
2. Personal Property. The Personal Property shall mean those certain
articles of personal property which are described in Exhibit B 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 Property,
including without limitation, all of Seller's right, title and interest in all
(i) warranties and guaranties relating to the Property or the Personal 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
Seven Trails West 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.
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 represent
and warrant to Purchaser that they are 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.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
<PAGE>
IN WITNESS WHEREOF, Seller has executed this Bill of Sale the day and year first
above written.
SELLER:
SEVEN TRAILS WEST ASSOCIATES, a Missouri
general partnership
By: PaineWebber Income Properties Five
Limited Partnership, a Delaware limited
partnership, a General Partner of Seven
Trails West Associates
By: Fifth Income Properties Fund, Inc.,
a Delaware corporation, the Managing
General Partner of PaineWebber
Income Properties Five Limited
Partnership
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
and
By: Seven Trails West Company, L.P., a
Missouri limited partnership, a
General Partner of Seven Trails West
Associates
By: St. Louis STW, Inc., a Missouri
corporation, the Managing General
Partner of Seven Trails West
Company, L.P.
By: /s/ Lewis A. Levey
------------------
Name: Lewis A. Levey
Title: President
<PAGE>
SEVEN TRAILS WEST 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 26th of August, 1999, between SEVEN TRAILS
WEST ASSOCIATES (Assignor), whose address is c/o Paragon Group, 1401 South
Brentwood Boulevard, Suite 675, St. Louis, Missouri 63144 and SEVEN TRAILS WEST
LLC, (Assignee), a Delaware limited liability company, whose address is c/o
Allegis Realty Investors LLC, 242 Trumbull Street, Hartford, CT 06103-1212.
1. Property. The Property means the real property located in the County of
St. Louis, State of Missouri, which is more particularly described on Exhibit A
attached hereto, and which is commonly known as Seven Trails West Apartments and
located at 500 Seven Trails Drive, Ballwin, Missouri, 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 B
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 individuals signing this Assignment on behalf of Assignor represent and
warrant to Assignee that they are 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.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
<PAGE>
IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this
Assignment the day and year first above written.
ASSIGNOR:
SEVEN TRAILS WEST ASSOCIATES, a Missouri
general partnership
By: PaineWebber Income Properties Five
Limited Partnership, a Delaware limited
partnership, a General Partner of Seven
Trails West Associates
By: Fifth Income Properties Fund, Inc.,
a Delaware corporation, the
Managing General Partner of Paine
Webber Income Properties Five
Limited Partnership
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
and
By: Seven Trails West Company, L.P., a
Missouri limited partnership, a General
Partner of Seven Trails West Associates
By: St. Louis STW, Inc., a Missouri
corporation, the Managing General
Partner of Seven Trails West
Company, L.P.
By: /s/ Lewis A. Levey
------------------
Name: Lewis A. Levey
Title: President
ASSIGNEE:
SEVEN TRAILS WEST LLC, a Delaware limited
liability company doing business in Missouri
as 500 Seven Trails Drive Investors LLC
By: Allegis Realty Investors, LLC, a
Massachusetts limited liability company,
its Manager
By: /s/ John R. Connelly, Jr.
------------------------
Name: John R. Connelly, Jr.
Title: Senior Vice President
<PAGE>
SEVEN TRAILS WEST APARTMENTS
ST. LOUIS COUNTY, MISSOURI
ASSIGNMENT AND ASSUMPTION
OF CONTRACTS
THIS ASSIGNMENT AND ASSUMPTION OF CONTRACTS (this Assignment) is entered into as
of the 26th day of August, 1999, between SEVEN TRAILS WEST ASSOCIATES, a
Missouri general partnership, (Assignor), whose address is c/o Paragon Group,
1401 South Brentwood Boulevard, Suite 675, St. Louis, Missouri 63144 and SEVEN
TRAILS WEST LLC (Assignee), a Delaware limited liability company, whose address
is c/o Allegis Realty Investors LLC, 242 Trumbull Street, Hartford, CT
06103-1212.
1. Property. The Property means the real property located in the County of
St. Louis, State of Missouri, which is more particularly described in Exhibit A
attached hereto, and which is commonly known as Seven Trails West Apartments and
located at 500 Seven Trails Drive, Ballwin, Missouri, together with the
building, structures and other improvements located thereon.
2. Property Contract. Property Contract means that agreement relating to
the Property which is more particularly described on Exhibit B attached to this
Assignment.
3. Assignment. For good and valuable consideration received by Assignor
the receipt and sufficiency of which is hereby acknowledged, Assignor hereby
grants, transfers and assigns to Assignee the entire right, title and interest
of Assignor in and to the Property Contracts.
4. Assumption. Assignee hereby assumes the covenants, agreements and
obligations of Assignor under the Property Contract which are applicable to the
period and required to be performed from and after the date of this Assignment,
but not otherwise.
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 individuals signing this Assignment on behalf of Assignor represent and
warrant to Assignee that they are 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.
8. 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.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
<PAGE>
IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this
Assignment the day and year first above written.
ASSIGNOR:
SEVEN TRAILS WEST ASSOCIATES, a Missouri
general partnership
By: PaineWebber Income Properties Five
Limited Partnership, a Delaware limited
partnership, a General Partner of Seven
Trails West Associates
By: Fifth Income Properties Fund, Inc.,
a Delaware corporation, the Managing
General Partner of Paine Webber
Income Properties Five Limited
Partnership
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
and
By: Seven Trails West Company, L.P., a
Missouri limited partnership, a General
Partner of Seven Trails West Associates
By: St. Louis STW, Inc., a Missouri
corporation, the Managing General
Partner of Seven Trails West
Company, L.P.
By: /s/ Lewis A. Levey
------------------
Name: Lewis A. Levey
Title: President
ASSIGNEE:
SEVEN TRAILS WEST LLC, a Delaware limited
liability company doing business in Missouri
as 500 Seven Trails Drive Investors LLC
By: Allegis Realty Investors LLC, a
Massachusetts limited liability company,
its Manager
By: /s/ John R. Connelly, Jr.
------------------------
Name: John R. Connelly, Jr.
Title: Senior Vice President
<PAGE>
HOLD HARMLESS AGREEMENT
This Hold Harmless Agreement (this Agreement) is given as of this 26th day
of August, 1999, by Seven Trails West, L.L.C., a Delaware limited liability
company (STW) for the benefit of Seven Trails West Associates, a Missouri
general partnership (STWA), and its partners, PaineWebber Income Properties Five
Limited Partnership, a Delaware limited partnership (PWIP5) and its partners,
Seven Trails West Company, L.P., a Missouri limited partnership and its
partners, and Lewis A. Levey (Levey).
WHEREAS, STWA, as Seller, and STW, as Purchaser entered into that certain
Purchase and Sale Agreement with an effective date of May 12, 1999, as amended
by that certain Reinstatement and Amendment to Purchase and Sale Agreement with
an effective date of July 2, 1999 (the Purchase Agreement), concerning the sale
and acquisition of certain property commonly referred to as Seven Trails West
Apartments, located in St. Louis County, Missouri and more particularly
described on Exhibit A attached hereto and incorporated herein by reference (the
Property);
WHEREAS, the Property is being sold to STW subject to that certain loan in
the original principal amount of $17,000,000 from Northland Financial Company
(Northland) to STWA, as Borrower (the Loan);
WHEREAS, Northland has assigned its rights under the Loan to Federal Home
Loan Mortgage Corporation (the Lender);
WHEREAS, pursuant to (i) a Guaranty executed by PWIP5 dated April 16,
1996, PWIP5 agreed to guaranty certain obligations of STWA under the Loan, and
(ii) a Guaranty executed by Lewis A. Levey (Levey) dated April 16, 1996, Levey
agreed to guaranty certain obligations of STWA under the Loan (collectively,
PWIP5 and Levey shall be referred to as the Guarantors);
WHEREAS, on the Closing Date (as defined in the Purchase Agreement) the
Loan is being assigned to and assumed by STW on the terms and provisions set
forth in that certain Assumption and Modification Agreement (the Assumption
Agreement), dated of even date herewith, among STW, STWA, Guarantors and Lender;
WHEREAS, the Assumption Agreement provides that Lender releases STWA from
all obligations and liabilities under the Loan Documents (as such term is
defined in the Assumption Agreement) with the exception of liability under
Covenant 26A (Environmental Covenants and Indemnity) (Covenant 26A) of the Rider
to Security Instrument dated April 16, 1996 (as defined as one of the Loan
Documents in the Assumption Agreement);
WHEREAS, the Assumption Agreement provides that Lender releases the
Guarantors from all obligations and liabilities under the Loan Documents with
the exception of liability under Covenant 26A;
WHEREAS, Section 6(c) of the Assumption Agreement provides that STWA
represents and warrants to Lender that all of the representations and warranties
in the Loan Documents are true as of the date of the Assumption Agreement and
provides that the release of STWC and the Guarantors from their obligations and
liabilities under the Loan Documents are made in reliance on the representations
and warranties made by STWA in the Assumption Agreement;
WHEREAS, pursuant to Section 7.2 of the Purchase Agreement, the
obligations of STWA under the Purchase Agreement are conditioned and contingent
upon receipt by STWA of a release of all of its obligations as borrower under
the Loan Documents, including, without limitation, a release of all of the
Guarantors obligations pursuant to their respective Guaranty agreements; and
WHEREAS, it is a condition to the sale of the Property from STWA to STW
that STW deliver this Agreement to STWA and Guarantors with respect to certain
obligations and liabilities which may arise as a result of the representation
and warranty made by STWA in Section 6(c) of the Assumption Agreement (the
Representation and Warranty).
NOW THEREFORE, as a material inducement to STWA and Guarantors and as a
condition of the acquisition by STW of the Property, the undersigned agree as
follows:
1. Hold Harmless Agreement. From and after the date hereof, STW agrees to
hold harmless STWA and the Guarantors from any damages awarded in favor of
Lender, or its successor-in-interest, against one or more of such parties by a
court of competent jurisdiction in a final and unappealable court order where
the a basis for such an award is:
(A) Any breach, on or prior to the date hereof, by STWA or a
Guarantor of any representation or warranty in the Loan Documents (as
identified in the Assumption Agreement) concerning title to, or the
physical condition of, the Property.
(B) Any breach, on or prior to the date hereof, by STWA or a
Guarantor of any non-monetary obligation in the Loan Documents relating to
the title to, or physical condition of, the Property. Notwithstanding the
foregoing, this Section 1 shall not apply to, and STW shall not be
required to hold harmless STWA or the Guarantors against any damages
arising out of or related to (and STWA and the Guarantors shall remain
fully liable for), any of the following:
(i) Any breach by STWA and/or the Guarantor of any monetary
obligation under the Loan Documents prior to the date hereof,
regardless of whether or not such monetary obligation arises out of
or relates to the Property, including but not limited to, any
failure to pay taxes, insurance and other impositions on the
Property.
(ii) Any liability of STWA and/or the Guarantors under
Covenants 26A, including, but not limited, liability arising from or
related to any breach by STWA and/or the Guarantors of any
representation, warranty or covenant contained within Covenant 26A
and any liability arising from or related to the environmental
indemnity set forth in Covenant 26A, provided, however, that any
representations and warranties made to the Lender in Covenant 26A
shall not be construed as a representation or warranty in favor of
STW, nor shall the same be deemed to modify, alter or amend the
representations and warranties made by STWA to STW in the Purchase
and Sale Agreement.
(iii) Any breach of STWA s obligations under the Purchase
Agreement or any closing document delivered in connection therewith,
including but not limited to, any breach by STWA of any of the
representations warranties of STWA contained within the Purchase
Agreement and closing documents concerning the Loan Documents and/or
title to or the physical condition of the Property. The parties
acknowledge that this Agreement shall in no way modify the
obligations, representations and warranties made by STWA to STW in
the Purchase Agreement, the survival of which is governed by Section
11.4 of the Purchase Agreement, and the closing documents.
(iv) Any fraud or intentional misrepresentation on the part of
STWA, one or more of the Guarantors or their respective partners.
(v) Any defense costs, including but not limited to, attorney
fees, expert witness fees and court costs (except where STW has
accepted the defense in accordance with the next Section).
2. Tender of Defense. As a condition to receiving the benefits and
protections set forth in Section 1 above, STWA and the Guarantors must comply
with the provisions in this Section 2. STWA and the Guarantors shall promptly
notify STW in writing, and offer STW the opportunity to defend (as set forth
herein), any demand, claim or legal action made upon or filed against one or
more of such parties where the basis of such demand, claim or legal action is or
may be within the scope of Section 1 of this Agreement (a Claim). Notice shall
be made in the manner described in the Purchase Agreement. STWA and the
Guarantors will attach to such notice any documentation relating to such a Claim
(e.g., filed petition, demand letter, etc.). STWA and the Guarantors will
refrain from responding to, defending or compromising a Claim, or providing any
information to third parties (other than STWA s and the Guarantors respective
legal counsel) in connection with such a Claim, until such time as STW has been
given an opportunity to accept or decline the defense of such a Claim. Within
twenty (20) days of receipt of such written notice, STW will notify STWA and the
Guarantors in writing as to whether or not STW accept the defense of such Claim.
Notwithstanding the foregoing, if STWA and/or the Guarantors are required,
pursuant to the terms of any such notice documentation, to respond to the same
within less than twenty (20) days, then STW agrees to promptly, and in any event
within a time period so as to allow STWA and/or the Guarantors to respond to
such notice documentation in a timely manner, advise STWA and/or the Guarantors
in writing whether or not it will accept the defense of such Claim.
(A) If STW declines to accept the defense of such Claim, STWA
and the Guarantors may respond to, defend against and compromise such
Claim as they see fit in their sole discretion (but subject to STWA and
the Guarantors duty to act in good faith in responding to, defending
against and/or compromising such a Claim).
(B) If STW accepts the defense of such Claim, STW shall
respond to, defend against and compromise such Claim as STW see fit in its
sole discretion (but subject to STW s duty to act in good faith in
responding to, defending against and/or compromising such a Claim). STW
may retain legal counsel of its choice to defend against such Claim. STW
shall control all aspects of the defense, including but not limited to the
right to compromise such Claim for such amount as is acceptable to STW in
its sole discretion. STW will bear all costs associated with such defense
and compromise of the Claim, including attorney fees, expert witness fees,
court costs and settlement payments. STWA and the Guarantors will
cooperate with, and provide all information reasonably requested by, STW
and its counsel in connection with such Claim and the defense. Except to
the extent required by law (which shall include without limitation, court
orders and notices of deposition), STWA and the Guarantors will refrain
from communicating or providing information to third parties about a
pending Claim (other than STWA s and the Guarantors respective legal
counsel) without the prior written consent of STW and its legal counsel.
STWA and the Guarantors will sign such documents, and take such reasonable
actions, as are requested by STW and its legal counsel in the response to,
defense against and compromise of such Claim which STW is defending.
3. Termination. This Agreement, and the parties obligations hereunder,
will automatically terminate on the date all principal, interest and other
amounts owed under the Loan Documents have been repaid in full.
4. Binding. This Agreement shall be binding upon, and shall inure to the
benefit of, the parties and their respective successors-in-interest. This
Agreement is not intended to be for the benefit of any creditor of, or any
person to whom any debts, liabilities or obligations are owed by, STWA or the
Guarantors, and no such creditor or other person shall obtain any rights under
this Agreement or shall by reason of this Agreement make any claim in respect of
any of the aforesaid debts, liabilities or obligations (or otherwise) against
STW.
5. Counterparts. This Agreement may be executed in more than one
counterpart, all of which shall constitute one document.
6. Governing Law. This Agreement shall be construed under and in
accordance with the laws of the State of Missouri, where the property is
located.
[Remainder of page intentionally left blank]
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly
executed as of the day and year first above written.
SEVEN TRAILS WEST ASSOCIATES, a Missouri
general partnership
By: Paine Webber Income Properties Five
Limited Partnership, a Delaware limited
partnership, a General Partner of Seven
Trails West Associates
By: Fifth Income Properties Fund, Inc.,
a Delaware corporation, the Managing
General Partner of Paine Webber
Income Properties Five Limited
Partnership
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
and
By: Seven Trails West Company, L.P., a
Missouri limited partnership, a General
Partner of Seven Trails West Associates
By: St. Louis STW, Inc., a Missouri
corporation, the Managing General
Partner of Seven Trails West
Company, L.P.
By: /s/ Lewis A. Levey
------------------
Lewis A. Levey
President
<PAGE>
PAINEWEBBER INCOME PROPERTIES FIVE
LIMITED PARTNERSHIP, a Delaware limited
partnership
By: Fifth Income Properties Fund, Inc., a Delaware
corporation, the Managing General Partner of
Paine Webber Income Properties Five Limited
Partnership
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
LEWIS A. LEVEY
/s/ Lewis A. Levey
------------------
Lewis A. Levey
SEVEN TRAILS WEST LLC, a Delaware limited
liability company
By: Allegis Realty Investors LLC, a Massachusetts
limited liability company, its Manager
By: /s/ John R. Connelly, Jr.
-------------------------
John R. Connelly, Jr.
Senior Vice President
SEVEN TRAILS WEST COMPANY, L.P.,
a Missouri limited partnership
By: St. Louis STW, Inc., a Missouri corporation,
the Managing General Partner of Seven Trails
West Company, L.P.
By: /s/ Lewis A. Levey
------------------
Lewis A. Levey
President
<PAGE>
When Recorded Mail to:
Moss & Barnett (WAHA)
4800 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota 55402-4129
Loan No. ______________
- --------------------------------------------------------------------------------
FHLMC Loan Number: 704669722
ASSUMPTION AND MODIFICATION AGREEMENT
THIS ASSUMPTION AND MODIFICATION AGREEMENT is made effective as of the
26th day of August, 1999 (the Effective Date), by and among Seven Trails West
Associates, a Missouri general partnership (the Original Borrower); Paine Weber
Income Properties Five Limited Partnership, a Delaware limited partnership
(PWIP5) and Lewis A. Levey (Levey) (collectively the Original Guarantors), Seven
Trails West LLC, a Delaware limited liability company (the New Borrower); and
the FEDERAL HOME LOAN MORTGAGE CORPORATION (Noteholder).
RECITALS
A. Original Borrower obtained a mortgage loan (the Loan) from Northland
Financial Company, a mortgage banking corporation (Lender), which loan is
secured by certain real property and improvements thereon (the Property) known
as Seven Trails West Apartments located in the City of Ballwin, St. Louis
County, Missouri, as more particularly described in Exhibit A, attached to and
made a part of this Agreement by this reference.
B. The Original Borrower executed a Note evidencing the Loan dated April
16, 1996, in the original principal amount of $17,000,000.00, payable to Lender.
C. To secure repayment of the Loan, Original Borrower executed and
delivered to Lender a Multifamily Open-End Deed of Trust (the Security
Instrument) of even date with the Note, naming Lender as Beneficiary, which is
recorded in Book 10801, at Page 702 in the Official Records of the County
Recorder, County of St. Louis, State of Missouri.
D. Lender sold the Note and assigned the Security Instrument to the
Noteholder, which is now the owner and holder of the Note.
E. By Deed dated August 26th, 1999, and recorded among the Official
Records of the County of St. Louis, State of Missouri as Daily No. 330, Original
Borrower transferred all of its right, title, and interest in and to the
Property to the New Borrower.
F. The Note, Security Instrument and every other document executed by
Original Borrower in connection with the Note and Security Instrument listed on
Exhibit B, attached hereto and made a part hereof, are referred to collectively
in this Agreement as the Loan Documents.
G. The New Borrower desires to assume all of the Original Borrower s
rights, obligations, and liabilities created or arising under the Loan
Documents.
H. The Original Borrower desires to be released by the Noteholder from any
and all obligations and liabilities under the terms and provisions of the Loan
Documents.
I. Each of the Original Guarantors executed a Guaranty in favor of Lender
dated April 16, 1996, (collectively the Original Guarantys).
J. The Original Guarantors desire to be released from their respective
obligations under the Original Guarantys as set forth above.
K. Subject to the full satisfaction of all conditions set forth below, the
Noteholder has agreed to consent to the New Borrower s assumption of the Loan,
and to release the Original Borrower from further liability, all as set forth
below.
NOW, THEREFORE, in consideration of these premises, the mutual covenants
contained in this Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Assumption of Obligations; Rights of Noteholder. The New Borrower
covenants, promises and agrees that the New Borrower shall jointly and severally
unconditionally assume and be bound by all terms, provisions, and covenants of
the Loan Documents as if the New Borrower had been the original maker of the
Note and Security Instrument, and New Borrower shall pay all sums to be paid and
otherwise perform each and every obligation to be performed by the Original
Borrower in accordance with the terms and conditions of the Loan Documents.
<PAGE>
2. Affirmation by New Borrower. The New Borrower agrees that the Loan
Documents are and shall be and remain in full force and effect, enforceable in
accordance with their terms. The Property shall remain subject to the lien,
charge and encumbrance of the Security Instrument, and nothing contained in this
Agreement or done pursuant to this Agreement shall affect or be construed to
affect the lien, charge, and encumbrance of the Security Instrument or the
priority of the Security Instrument over other liens, charges and encumbrances,
or to release or affect the liability of any party or parties who may now or
hereafter be liable under or on account of the Note and the Security Instrument,
except as expressly provided in this Agreement. The New Borrower shall be wholly
personally liable, jointly and severally, for the payment of all sums and the
performance of every obligation required under the Loan Documents.
3. Subordination of Rights of Original Borrower and New Borrower. Any
indebtedness of Original Borrower to New Borrower, or of New Borrower to
Original Borrower, now or hereafter existing, together with any interest
thereon, is hereby subordinated to any indebtedness of Original Borrower or New
Borrower to the Noteholder under the Loan Documents, any collection or receipts
with respect to any such indebtedness of Original Borrower to New Borrower, or
of New Borrower to Original Borrower shall be collected, enforced and received
by New Borrower or Original Borrower (as applicable) in trust for the benefit of
the Noteholder, and shall be paid over to the Noteholder on account of the
indebtedness of Original Borrower and New Borrower to the Noteholder, but
without impairing or affecting in any manner the liability of the Original
Borrower or New Borrower under the other provisions of the Loan Documents and
this Assumption Agreement.
4. Modification of Note and Security Instrument. As a material element of
the consideration for Noteholder consenting to the assumption of the Loan by the
New Borrower, the New Borrower and Noteholder agrees that the provisions of the
Note and Security Instrument are hereby modified as follows:
(a) The New Borrower shall not be personally liable for the
repayment of sums due under the Note, except to the extent set forth and as
provided in Exhibit C, attached to and incorporated into this Agreement by this
reference (the Exculpation Rider). As used in Exhibit C, the term Borrower shall
be deemed to refer to New Borrower, and the term Lender shall be deemed to refer
to the Noteholder.
(b) From and after the Effective Date, New Borrower shall not be
required to make, and Noteholder hereby waives, the monthly escrow deposit for
insurance on the Property required by Section 2 of the Security Instrument. All
funds held in escrow for insurance on the Property will be refunded to Original
Borrower contemporaneously with the Closing on the Property.
(c) Paragraph 19 is amended to read in full as set forth in Exhibit
C-1 attached and incorporated into this agreement by reference.
5. Guaranty Requirements.
(a) New Guaranty. On or prior to the execution of this Agreement,
and in consideration for Noteholder consenting to the assumption of the Loan by
New Borrower, Allegis Multifamily Trust Limited Partnership, (the New Guarantor)
shall execute and deliver to Noteholder a Guaranty (FHLMC Form 4194) (the
Guaranty), in the form set forth in Exhibit D attached to and incorporated into
this Agreement by this reference, under which the New Guarantor, jointly and
severally, if more than one, guaranties the full and punctual payment when due
of the Guaranteed Obligations (as such term is defined in the Guaranty) under
the Loan. The Guaranty shall provide that the New Guarantor is personally liable
for Zero percent (0%) of the outstanding principal balance of the Loan; however,
the New Guarantor automatically becomes liable for one hundred percent (100%) of
all amounts payable under the Loan Documents upon the occurrence of certain
events more specifically set forth in the Guaranty.
(b) Release of Original Guarantors. In reliance upon Original
Borrower s representations and warranties in this agreement, the Original
Guarantors, are hereby released from all obligations and liabilities under the
terms and provisions of the Loan Documents; provided however, that Original
Guarantors are not released from liability under the Original Guaranty
Agreements pursuant to Covenant 26A (Environmental Covenants and Indemnity) of
the Rider to the Security Instrument, with respect to matters existing as of the
date hereof.
6. Representations. Original Borrower hereby represents and warrants to
Noteholder:
(a) As of the date hereof, the amount of the unpaid indebtedness
under the Note is Sixteen Million One Hundred Ninety-one Thousand Six Hundred
Fifty-six and 86/100 ($16,191,656.86).
(b) Interest at the rate set forth in the Note has been paid to
Noteholder in full through and until July 31, 1999.
(c) All of the representations and warranties in the Loan Documents
are true as of the date on which Original Borrower executes this Agreement.
(d) No event of default (or event which, with the giving of notice
or the passage of time or both, would be an event of default) has occurred or is
continuing under the Loan Documents.
(e) Original Borrower has no claims, offsets, defenses, or
counterclaims of any kind to its performance under, or Noteholder's enforcement
of, the Note and the other Loan Documents; and to the extent any such
counterclaims, setoffs, defenses or other causes of action may exist, whether
known or unknown, Original Borrower waives all such items. Original Borrower
acknowledges that all of Noteholder's actions in connection with the Loan have
been in compliance with the terms of the applicable Loan Documents, and Original
Borrower acknowledges and agrees that Noteholder has not breached or failed to
perform any duty or obligation that Noteholder may owe Original Borrower.
(f) There are no suits or actions threatened or pending which affect
the enforcement or validity of the Note, the Security Instrument and/or the Loan
Documents.
7. Additional Transfer. Notwithstanding the Noteholder's consent to the
conveyance of the Property to the New Borrower, the New Borrower understands and
agrees that such consent shall in no way limit or operate as a waiver of the
Noteholder's continuing rights under Uniform Covenant 19 of the Security
Instrument, except as provided in paragraph 4 of this Agreement.
8. Additional Obligations. The New Borrowers shall execute, acknowledge
and deliver UCC-1s, UCC-2s and such other documents as Noteholder or Lender may
require to document the transactions described in this Agreement. The failure of
the New Borrower to comply with the foregoing additional obligations, beyond any
applicable notice and cure period, shall constitute a default under the Loan
Documents, and the Noteholder shall be entitled to exercise all remedies
available to it under the terms of the Loan Documents.
9. Continuing Obligations.
(a) To induce the Noteholder to consent to the New Borrower s
assumption of the Loan, in addition to the covenants and agreements set forth in
the Loan Documents, the New Borrower agrees that it will execute and deliver to
Noteholder a single asset Rider (FHLMC Form 4197) in the form set forth in
Exhibit E attached hereto and incorporated into this agreement by this
reference.
(b) The failure of the New Borrower to comply with the foregoing
continuing obligation shall constitute a default under the Loan Documents beyond
any applicable notice and cure period, and the Noteholder shall be entitled to
exercise all remedies available to it under the terms of the Loan Documents.
10. Release of Original Borrower. In reliance upon Original Borrower s and
New Borrower s representations and warranties in this Agreement, the Noteholder
hereby releases the Original Borrower from any and all obligations under the
terms and provisions of the Loan Documents; provided, however, that Original
Borrower is not released from any liability pursuant to Covenant 26A
(Environmental Covenants and Indemnity) of the Rider to the Security Instrument,
with respect to matters existing as of the date hereof.
11. Expenses. The New Borrower s execution of this Agreement shall
constitute the New Borrower s agreement to pay all expenses incurred by the
Noteholder and Lender in connection with this assumption, including without
limitation the payment of any title endorsement costs, attorneys fees, and/or
assumption fees required by the Noteholder.
12. Miscellaneous.
(a) This Agreement shall be binding upon and shall inure to the
benefit of the parties to the Agreement and their respective heirs, successors
and permitted assigns.
(b) Except as expressly modified by this Agreement, the Note, the
Security Instrument and all other Loan Documents shall be unchanged and remain
in full force and effect, and are hereby expressly approved, ratified and
confirmed. No provision of this Agreement that is held to be inoperative,
unenforceable or invalid shall affect the remaining provisions, and to this end
all provisions hereof are hereby declared to be severable.
(c) Time is of the essence of this Agreement.
(d) This Agreement may not be changed orally, but only by an
agreement in writing, signed by the party against whom enforcement of any
waiver, change, modification or discharge is sought.
(e) This Agreement shall be construed in accordance with the laws of
the jurisdiction in which the Property is located.
(f) This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same document.
(g) All notices given pursuant to the Agreement or any of the Loan
Documents must be in writing and will be effectively given if personally
delivered or, if mailed, postage prepaid, certified or registered mail, return
receipt requested, to the addresses of the parties set forth below or to such
other address as any party subsequently may designate in writing.
(h) An executed original of this Agreement shall be (i) attached
permanently to the Note as an amendment thereto, and (ii) recorded in the Land
Records of St. Louis County, Missouri as a modification to the Security
Instrument.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date written above.
ORIGINAL BORROWER:
------------------
Seven Trails West Associates, a Delaware
limited liability company
By: Paine Webber Income Properties Five
Limited Partnership, a Delaware Limited
Partnership, a General Partner of Seven
Trails West Associates
By: Fifth Income Properties Fund, Inc.
a Delaware corporation, the Managing
General Partner of Paine Webber
Income Properties Five Limited
Partnership
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
and
By: Seven Trails West Company, L P., a
Missouri limited partnership, a General
Partner of Seven Trails West Associates
By: St. Louis STW, Inc., a Missouri
corporation, the Managing General
Partner of Seven Trails West
Company, L.P.
By: /s/ Lewis A. Levey
------------------
Name: Lewis A. Levey
Title: President
Address for Notice to Original Borrower:
1401 South Brentwood Boulevard
Suite 675
St. Louis, MO 63144
<PAGE>
NEW BORROWER:
-------------
Seven Trails West LLC, a Delaware limited
liability company doing business in Missouri
as 500 Seven Trails Drive Investors LLC
By: /s/ Robert C. Burrill, Jr.
-------------------------
Name: Robert C. Burrill, Jr.
Title: Manager
Address for Notice to New Borrower:
Seven Trails West LLC
c/o Allegis Realty Investors LLC
242 Trumbell Street
Hartford, Connecticut 06103
Copy to:
General Counsel
Seven Trails West LLC
c/o Allegis Realty Investors LLC
242 Trumbell Street
Hartford, Connecticut 06103
CONSENTED TO BY NOTEHOLDER:
---------------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION
By: /s/ Gregory A. Stuart
---------------------
Name: Gregory A. Stuart
Title: Assistant Treasurer
Date: August 24, 1999
Address for Notice to Noteholder:
c/o Northland/Marquette Capital Group, Inc.
3500 West 80th Street, Suite 500
Bloomington, MN 55431-4435
and
Federal Home Loan Mortgage Corporation
ATTN: Director of Servicing
8100 Jones Branch Drive
McLean, VA 22102
<PAGE>
ACKNOWLEDGED AND CONSENTED TO:
ORIGINAL GUARANTORS:
--------------------
Paine Webber Income Properties Five Limited
Partnership, a Delaware limited partnership
By: Fifth Income Properties Fund, Inc., a
Delaware corporation, the Managing
General Partner
By: /s/ Rock M. D'Errico
--------------------
Rock M. D'Errico
Vice President
And
By: /s/ Lewis A. Levey
------------------
Lewis A. Levey
Address for Notice to Original Guarantor:
1401 South Brentwood Boulevard
Suite 675
St. Louis, MO 63144
NEW GUARANTOR:
--------------
Allegis Multifamily Trust Limited
Partnership A Delaware limited partnership
By: Allegis Multifamily Trust, Inc., a
Maryland corporation General Partner
By: /s/ Robert C. Burrill, Jr.
--------------------------
Robert C. Burrill, Jr.
President
Address for Notice to New Guarantor:
242 Trumbell Street
Hartford, CT 06103
<PAGE>
EXHIBIT A
A tract of land being part of those parcels described as Parcel 1 and 2
conveyed to Seven Trails West, Associates, by instrument recorded in Deed Book
7665. Page 2347 of the St. Louis County Records, situated in U.S. Survey 1908
and Section 35. Township 45 North, Range 4 East in the City of Ballwin, St.
Louis County, Missouri, being more particularly described as follows:
Beginning at a point in the North line of property conveyed to the City of
Ballwin by instrument recorded in Deed Book 5765 page 217 of the St. Louis
County Records, said point being the Southeast corner of property conveyed to
the City of Ballwin for the widening of Holloway Road by instrument recorded in
Deed Book 6585 page 583 of said records; thence Northeasterly, along the East
line of said property so conveyed to the City of Ballwin, North 28 degrees 01
minute 00 seconds East 259.40 feet to a point of curvature in the South line of
Seven Trails Drive per Dedication Plat thereof recorded in Plat Book 173 Page 12
of said records; thence Northeasterly, along the South line of said Seven Trails
Drive, being a curve to the right, having a radius of 25.00 feet, an arc
distance of 32.27 feet (North 65 degrees 00 minutes 00 seconds East 30.08 feet
on its chord) to a point of tangency; thence Southeasterly, continuing along the
South line of said Seven Trails Drive, South 78 degrees 01 minute 00 seconds
East 57.19 feet to a point of curvature; thence Southeasterly along a curve to
the right having a radius of 202.87 feet, an arc distance of 53.11 feet (South
70 degrees 31 minutes 00 seconds East 52.96 feet on its chord) to a point of
tangency; thence South 63 degrees 01 minute 00 seconds East 55.00 feet to a
point of curvature; thence Southeasterly, along a curve to the left having a
radius of 393.63 feet, an arc distance of 137.40 feet to a point of reverse
curvature; thence Southeasterly, along a curve to the right having a radius of
316.60 feet, an arc distance of 254.18 feet (South 60 degrees 01 minute 00
seconds East 247.41 feet on its chord) to a point of reverse curvature; thence
Southeasterly, along a curve to the left having a radius of 348.18 feet an arc
distance of 320.12 feet to a point of tangency; thence Southeasterly, continuing
along the South line of said Seven Trails Drive, South 89 degrees 41 minutes 40
seconds East 223.68 feet to a point of curvature; thence Southeasterly, along a
curve to the right having a radius of 384.79 feet an arc distance of 184.20 feet
(South 75 degrees 58 minutes 50 seconds East 182.44 feet on its chord) to a
point of tangency; thence Southeasterly, South 62 degrees 16 minutes 00 seconds
East 60.00 feet to a point of curvature, thence Southeasterly, along a curve to
the right having a radius of 237.28 feet an arc distance of 336.48 feet (South
21 degrees 38 minutes 30 Seconds East 308.99 feet on its chord) to a point of
tangency; thence Southwesterly, continuing along the South line of said Seven
Trails Drive, South 18 degrees 59 minutes 00 seconds West 221.33 feet to a point
of curvature; thence Southwesterly, along a curve to the right having a radius
of 929.06 feet an arc distance of 97.29 feet (South 21 decrees 59 minutes 00
seconds West 97.25 feet on its chord) to a point of tangency; thence
Southwesterly, South 24 degrees 59 minutes 00 seconds West 111.53 feet to a
point of curvature; thence Southwesterly, along a curve to the left having a
radius of 144.66 feet an arc distance of 63.76 feet to its intersection with the
South line of property described as Parcel 1, conveyed to Seven Trails West,
Associates; by said instrument recorded in Deed Book 7665 page 2347 of said
records; thence Northwesterly, leaving the South line of said Seven Trails
Drive, being along the South line of property described as Parcel 2 aforesaid,
North 63 degrees 01 minute 00 seconds West 10.68 feet to the Southeast corner of
property conveyed to the City of Ballwin by instrument recorded in Deed Book
5765 page 217 of said records; thence Northeasterly, along the East line of said
property Conveyed to the City of Ballwin; North 18 degrees 59 minutes 00 seconds
East 479.54 feet to the Northeast corner thereof; thence Northwesterly, along
the North line of said property conveyed to the City of Ballwin, North 89
degrees 26 minutes 00 seconds West 539.17 feet to an angle point therein; thence
North 63 degrees 01 minute 00 seconds West 1044.98 feet to the point of
beginning, containing 11.256 acres more or less.
A tract of land being part of those parcels described as Parcel 1 and 2
conveyed to Seven Trails West, Associates, by instrument recorded in Deed Book
7665, Page 2347 of the St. Louis County Records, situated in U.S. Survey 1908
and Section 35, Township 45 North, Range 4 East, in the City of Ballwin, St.
Louis County, Missouri, being more particularly described as follows:
Beginning at a point in the South line of property conveyed to Lester F.
Krupp. Jr. and Patricia A Krupp, his wife, by instrument recorded in Deed Book
9960 page 1280 of the St. Louis County Records, being the Northeast corner of
property conveyed to the City of Ballwin for the widening of Holloway Road, by
instrument recorded in Deed Book 6585 page 583; thence South 62 degrees 14
minutes 03 seconds East 250.77 feet to a point; thence Northeasterly, along the
East line of said property, North 27 degrees 29 minutes 30 seconds East 142.50
feet to a point; thence South 62 degrees 30 minutes 30 seconds East 57.00 feet
to a point; thence North 27 degrees 29 minutes 30 seconds East 212.98 feet to
the Northeast corner thereof; thence North 73 degrees 52 minutes 05 seconds
West, along the North line thereof, 443.70 feet to a point in the East line of
said Holloway Road; thence Northeasterly, along the East line of said Holloway
Road, North 35 degrees 45 minutes 00 seconds East 196.67 feet to a
non-tangential point of curvature; thence Northeasterly along the South line of
property conveyed to the City of Ballwin for the widening of Holloway Road, by
instrument recorded in Deed Book 6780 page 529 of said records, being a curve to
the right having a radius of 375.00 feet an arc distance of 302.33 feet (North
58 degrees 51 minutes 55 seconds East 294.21 feet on its chord) to a
non-tangential point; thence South 88 degrees 50 minutes 00 seconds East 552.49
feet to its intersection with the North and South centerline of said Section 35;
thence Southwesterly, along said line, South 00 degrees 29 minutes 00 seconds
West 1073.49 feet to a point in the Northeast line of said U.S. Survey 1908;
thence Southeasterly, along said Northeast line, South 62 degrees 16 minutes 00
seconds East 490.80 feet to a point; thence South 18 degrees 59 minutes 00
seconds West 934.34 feet to the Southeast corner of property conveyed as Parcel
1 to Seven Trails West Associates by instrument recorded in Deed Book 7665 page
2347 of said records; thence Northwesterly, along the South line thereof, North
63 degrees 01 minute 00 seconds 4.08 feet to its intersection with a point in
the East line of Seven Trails Drive per the Dedication Plat thereof recorded in
Plat Book 173 Page 12 of said records; thence Northeasterly along a curve to the
right having a radius of 94.66 feet an arc distance of 70.07 feet (North 03
degrees 46 minutes 40 seconds East 68.48 feet on its chord) to a point of
tangency; thence North 24 degrees 59 minutes 00 seconds East 111.53 feet to a
point of curvature in the East line thereof; thence Northeasterly, continuing
along said East line, along a curve to the left having a radius of 979.06 feet
an arc distance of 102.53 feet (North 21 degrees 59 minutes 00 seconds East
102.48 feet on its chord) to a point of tangency; thence North 18 degrees 59
minutes 00 seconds East 221.33 feet to a point of curvature thence
Northwesterly, along said East line being a curve to the left having a radius of
287.28 feet an arc distance of 407.39 feet (North 21 degrees 38 minutes 30
seconds West 374.10 feet on its chord) to a point of tangency in the North line
thereof; thence Northwesterly, North 62 degrees 16 minutes 00 seconds West 60.00
feet to a point of curvature; thence Northwesterly, continuing along said North
line, along a curve to the left having a radius of 434.79 feet an arc distance
of 208.13 feet (North 75 degrees 58 minutes 50 seconds West 206.15 feet on its
chord) to a point of tangency; thence North 89 degrees 41 minutes 40 seconds
West 223.68 feet to a point of curvature, thence Northwesterly continuing along
said North line, along a curve to the right having a radius of 298.18 feet an
arc distance of 274.15 feet (North 63 degrees 21 minutes 20 seconds West 264.60
feet on its chord) to a point of reverse curvature; thence Northwesterly, along
a curve to the left having a radius of 366.60 feet an arc distance of 294.32
feet to a point of reverse curvature; thence Northwesterly, along a curve to the
right having a radius of 343.63 feet an are distance of 119.95 feet (North 73
degrees 01 minute 00 seconds West 119.34 feet on its chord) to a point of
tangency; thence North 63 degrees 01 minute 00 seconds West 55.00 feet to a
point of curvature; thence Northwesterly, along a curve to the right having a
radius of 202.87 feet an arc distance of 53.11 feet (North 55 degrees 31 minutes
00 seconds West 52.96 feet on its chord) to a point of tangency; thence North 48
degrees 01 minute 00 seconds 54.55 feet to a point of curvature; thence
Northwesterly, along a curve to the right having a radius of 25.00 feet an arc
distance of 33.18 feet (North 10 degrees 00 minutes 00 seconds West 30.79 feet
on its chord) to a point of tangency in the East line of property conveyed to
the City of Ballwin by said instrument recorded in Deed Book 6585 page 583 of
said records; thence Northeasterly, along said East line, North 28 degrees 01
minute 00 seconds East 304.23 feet to the point of beginning, containing 24.829
acres more or less.
Being the same property conveyed to Seven Trails West Associates via
General Warranty Deed recorded on September 14, 1984 in Book 7665 Page 2347 of
the St. Louis County records.
<PAGE>
EXHIBIT B
Other Loan Documents
1. Instrument entitled Side Letter Regarding Deed of Trust Items dated May
22, 1996, from Seven Trails West Associates to Northland Financial
Company.
2. Instrument entitled Side Letter Re: Commercial Leases dated April 16,
1996, from Seven Trails West Associates to Northland Financial Company.
3. Replacement Reserve Agreement dated April 1, 1996, originally between
Seven Trails West Associates and Northland Financial Company.
4. Letter dated May 23, 1996, from Seven Trails West Associates (Re: Asbestos
Operations and Maintenance Program dated March 27, 1996, prepared by
Project Resources, Inc.).
5. Letter dated May 23, 1996, from Seven Trails West Associates (Re:
Lead-Based Paint Operations and Maintenance Program Guidelines dated March
29, 1996, prepared by Project Resources, Inc.).
6. Instrument entitled Lease Approval dated April 17, 1996, from Northland
Financial Company (Re: form residential lease).
7. Assignment of Security Agreement dated April 16, 1996, originally between
Northland Financial Company and the Federal Home Loan Mortgage
Corporation.
<PAGE>
EXHIBIT C
EXCULPATION RIDER TO NOTE AND SECURITY INSTRUMENT
This Rider is attached to and incorporated into a Multifamily Note (the
Note) payable to Federal Home Loan Mortgage Corporation and a Mortgage, Deed of
Trust or Deed to Secure Debt (the Security Instrument) of the same date securing
the Note, both executed by the undersigned, and amends and supplements the Note
and Security Instrument as follows:
(a) Except as provided in Paragraphs (b), (c), (d) and (e), any judgment
for any amount due under the Note shall not be enforceable
personally against Borrower.
(b) Borrower shall be personally liable for repayment of principal and
interest due under the Note in an amount equal to zero percent (0%)
of unpaid principal balance.
(c) In addition, Borrower shall be personally liable for all of the
following:
(1) Repayment of all principal and interest due under the Note if
(A) there occurs a transfer of the Property or any interest in
the Property or Borrower which violates Covenant 19 of the
Security Instrument; or (B) Borrower voluntarily creates or
consents to any subordinate mortgage or lien on the Property
in violation of Covenant 4 of the Security Instrument (other
than a subordinate lien approved by Lender in writing); or (C)
Borrower acquires any real or personal property other than the
Property and assets (such as accounts) related to the
operation or maintenance of the Property, or operates any
business other than the management or operation of the
Property. The provisions of the preceding clause (c)(1)(C)
shall apply only if, and to the extent that, the Security
Instrument expressly prohibits Borrower from acting in a
manner that gives rise to Borrower s personal liability under
such clause.
(2) Repayment of principal and interest due under the Note in an
amount equal to any loss, damage or cost to Lender resulting
from fraud or intentional material misrepresentation or
intentional material omission by Borrower, its employees or
agents in connection with applying for or obtaining the loan
evidenced by the Note.
(3) Repayment of principal and interest due under the Note in an
amount equal to any loss, damage or cost to Lender resulting
from any failure of Borrower, during the existence of any
monetary or other material default under the Note or Security
Instrument, to deliver to Lender upon written demand all books
and records relating to the Property.
(4) Repayment of principal and interest due under the Note in an
amount equal to (A) any rents or revenues of the Property
received by Borrower after the occurrence of any monetary or
other material default under the Note or Security Instrument
(whether such default is intentional or unintentional, and
regardless of whether Lender has notified Borrower of such
default) which have been used for any purpose other than to
pay the costs and expenses of operating and maintaining the
Property, unless the amount of all such rents and revenues not
so used is deposited in the Property s bank account within ten
days after written demand by Lender and is thereafter used
only to pay such costs and expenses; and (B) any insurance
proceeds, condemnation awards or tenant security deposits
which are applied by Borrower in a manner not permitted by the
Security Instrument and applicable law. For the purposes of
this paragraph (c)(4), the costs and expenses of operating and
maintaining the Property shall include, without limitation,
the payment of principal, interest and any other amounts
payable under the Note or Security Instrument.
(5) Repayment of principal and interest due under the Note in an
amount equal to the costs of replacing and installing any
fixture, equipment, machinery or appliance in or on the
Property which is removed from the Property by Borrower
without being replaced with an item of line kind (other than
obsolete or damaged personal property not required in the
operation of the Property).
(d) In addition, Borrower shall be personally liable for the performance
of all of its obligations under Covenant 26A of the Security
Instrument.
(e) In addition, Borrower shall be personally liable for any costs and
expenses incurred by Lender in connection with collecting any
amounts for which Borrower is personally liable under this Rider.
Such costs and expenses shall include without limitation attorneys
fees and the cost of conducting an independent audit of Borrower s
books and records to determine any amounts owed under this Rider.
(f) Nothing contained in this Rider shall be construed to (1) impair any
guaranty of the debt evidenced by the Note, (2) release or impair
that debt, or (3) preclude the holder of the Note from exercising
any rights against the Property or any other security or pursuing
any other rights available to Lender under the Note, the Security
Instrument or applicable law.
Borrower has signed this Rider for the purpose of identifying it as part
of the Note and Security Instrument.
BORROWER:
Seven Trails West LLC, a Delaware
limited liability company doing
business in Missouri as 500 Seven
Trails Drive Investors LLC
By: /s/ Robert C. Burrill, Jr.
--------------------------
Robert C. Burrill, Jr.
Manager
<PAGE>
EXHIBIT C-1
19. TRANSFER OF THE PROPERTY OR SIGNIFICANT INTERESTS IN BORROWER; ASSUMPTION.
(a) Lender may, at Lender's option, declare all sums secured by this
Instrument immediately due and payable and lender may invoke any
remedies permitted by Covenant 27 of this instrument upon sale or
transfer, whether voluntary or involuntary, of any of the following:
(i) All or any part of the Property, or any interest in the
Property, including by not limited to transfers between
co-owners of the Property;
(ii) Any Significant Interest (as defined below in paragraph 19(b)
in Borrower; and
(iii) Any Significant Interest in a corporation, partnership,
limited liability company, joint venture, estate or trust, or
other legal entity which in turn owns a Significant Interest
in the Borrower.
(b) For purposes of this Covenant 19, a Significant Interest in any
entity shall mean the following:
(i) If the entity is a general partnership or a joint venture, (A)
any general partnership interest in the entity or (B) any
interest of a joint venturer in the entity;
(ii) If the entity is a limited partnership, any general
partnership interest in the entity; or
(iii) If the entity is a limited liability company, any membership
interest in the entity which, together with any other
membership interest transferred since the date of the Note,
exceeds 49% of all outstanding membership interests in the
entity; or
(iv) If the entity is a corporation, any stock in the entity which,
together with any other stock in the entity transferred since
the date of the Note, exceeds 49% of all outstanding voting
stock in the entity; or
(v) If the entity is a trust other than a land trust, any interest
in such trust which, if transferred, results in a transfer of
power of direction or control of the trust; or
(vi) If the entity is a land trust, any transfer of interest in
such trust or a change of trustee(s); or
(vii) In the case of any other legal entity, any interest which, if
transferred results directly or indirectly in a transfer of
power of directions or control of the entity.
(c) Notwithstanding the provisions of Section 19(a) to the contrary,
Lender shall consent, one time only and without any adjustment to
the rate at which the indebtedness secured by this Instrument bears
interest, to a sale or transfer by Seven Trails West LLC, which
would otherwise violate this Covenant 19 if, prior to the sale or
transfer:
(i) Borrower causes to be submitted to Lender all information
required by Lender to evaluate the transferee and the Property
under the standards set forth in paragraphs (ii) through (v)
below; and
(ii) the transferee meets all of the eligibility, credit management
and other standards (including but not limited to any
standards respecting previous relationships between Lender and
the transferee and the organization of the transferee entity)
customarily applied by Lender at the time of the proposed sale
or Transfer to the approval of borrowers in connection with
the origination of purchase of similar mortgages on
multifamily properties; and
(iii) the Property, at the time of the proposed sale or transfer,
meets all standards as to its physical condition which are
customarily applied by Lender at the time of the proposed sale
or transfer to the approval of properties on connection with
the origination or purchase of similar mortgages on
multifamily properties; and
(iv) the loan to value ratio at the time of the proposed sale or
transfer is 70% or less (loan to value ratio means the ratio
of (A) the principal amount of the indebtedness secured by
this Instrument to (B) the value of the Property (as such
value is determined by Lender), express as a percentage); and
(v) the debt service coverage ratio for the first twelve full
calendar months preceding the proposed sale or transfer was
1.35 or more (debt service coverage ratio means the ratio of
(A) the annual net operating income from the Property s
operations during that month which is available for repayment
of debt, after deducting operating expenses, to (B) the annual
principal and interest payable under the Note); and
(vi) there exists no breach by Borrower of any covenant or
agreement in this Instrument; and
(vii) the transferee executes an assumption agreement that is
acceptable to Lender and which requires the transferee to
perform all obligations of Borrower set forth in the Note,
this Instrument and in any other documents executed and
delivered in connection therewith; and
(viii)Borrower pays to Lender (A) at the time it requests Lender's
consent, a review fee in the amount of $2,000.00 (which fee
shall not be refundable); (B) as a condition precedent to any
sale or transfer to which lender has consented, an assumption
fee equal to 1.0% of the outstanding principal balance of the
indebtedness evidenced by the Note; and (C) upon demand by
Lender, all fees and out of pocket costs of Lender's legal
counsel related to the transfer and assumption and the cost of
all title searches and title insurance related to the
transfer.
(d) Notwithstanding the foregoing, Lender shall not be entitled to
declare sums secured by this Instrument immediately due and payable
or to invoke any remedy permitted by Covenant 27 of this Instrument
solely on the basis of the occurrence of any of the following:
(i) A transfer by devise or descent or by operation of law upon
the death or incompetence of an owner of the Property or the
owner of a Significant Interest.
(ii) The grant of leasehold interest in part of the Property for a
term of three years or less not containing an option to
purchase.
(iii) Sales or transfers of obsolete or worn-out personal property
replaced by substitutes with value which is equal to or
greater than that which the replaced items had when new.
(iv) Transfers of the Property pursuant to any security instrument
encumbering the Property which is subordinate to this
Instrument and to which lender shall have consented pursuant
to Covenant 4 above, provided the transferee meets all of the
requirements set forth in paragraph (c) of this Covenant 19.
(e) Notwithstanding the foregoing, Lender shall not be entitled to
review and approve, or to charge any review fee, assumption fee or
out-of-pocket costs, or to declare sums secured by this Instrument
immediately due and payable or to invoke any remedy permitted by
Covenant 27 of this Instrument solely on the basis of the occurrence
of any of the following:
(i) Any transfer of any or all limited partnership interests in,
or the issuance of additional limited partnership interests
in, Allegis Multifamily Trust Limited Partnership.
(ii) Any transfer of any or all shares of stock in, or the issuance
of any additional shares of stock in, Allegis Multifamily
Trust, Inc.
<PAGE>
Exhibit D
GUARANTY
This Guaranty, made this ___ day of August 1999, by Allegis Multifamily
Trust Limited Partnership, (Guarantor) for the benefit of Federal Home Loan
Mortgage Corporation (Lender), its successors and assigns.
PRELIMINARY STATEMENT:
The Lender has purchased a mortgage loan made by Northland Financial
Company (Loan) to Seven Trails West Associates (Original Borrower) in the amount
of $17,000,000.00 which is evidenced by a Multifamily Note in such amount (Note)
dated April 16, 1996, payable to Lender, and secured by a Mortgage, Deed of
Trust or Deed to Secure Debt (Security Instrument) bearing the same date,
encumbering the property described in Exhibit A attached to this Guaranty and
incorporated by reference. (The Note and Security Instrument and other related
documents are collectively referred to in this Guaranty as the Loan Documents).
Original Borrower has requested that Lender consent to the assumption of the
Loan by Seven Trails West LLC, a Delaware limited liability company (Borrower);
and Lender is willing to consent to the assumption of the loan by Borrower only
on the condition that the payment of certain amounts outstanding with respect to
the Loan are guaranteed by Guarantor.
NOW THEREFORE, to induce Lender to consent to the assumption of the Loan
by Borrower, Guarantor agrees as follows:
1. Guarantor (jointly and severally, if more than one) absolutely and
unconditionally guarantees to Lender the full and punctual payment
when due of all of Borrower s obligations under the Loan Documents,
whether by acceleration or otherwise. Guarantor's obligations under
this Paragraph 1 shall be limited to an amount equal to: zero percent
(0%) of the unpaid principal balance, except as provided in
subparagraphs (a) through (f) and Paragraphs 2 and 3.
(a) Guarantor shall be liable for all amounts due under the Loan
Documents if (1) them occurs a transfer of the Property or
any interest in the Property or Borrower which violates
Covenant 19 of the Security Instrument; or (2) Borrower
voluntarily creates or consents to any subordinate, mortgage
or lien on the Property in violation of Covenant 4 of the
Security Instrument (other than a subordinate lien approved
by Lender in writing); or (3) Borrower acquires any real or
personal property other than the Property and assets (such
as accounts) related to the operation or maintenance of the
Property, or operates any business other than the management
or operation of the Property. The provisions of the
preceding clause l(a)(3) shall apply only if and to the
extent that, the Security Instrument expressly prohibits
Borrower from acting in a manner that gives rise to
Guarantor's liability under such clause.
(b) Guarantor shall be liable for amounts due under the Loan
Documents in an amount equal to any loss, damage or cost to
Lender resulting from fraud or intentional misrepresentation
or intentional omission by Borrower, its employees or agents
in connection with applying for or obtaining the loan
evidenced by the Note.
(c) Guarantor shall be liable for amounts due under the Loan
Documents in an amount equal to any loss, damage or cost to
Lender resulting from any failure of Borrower, during the
existence of any monetary or other material default under
the Note or Security Instrument, to deliver to Lender upon
written demand all books and records relating to the
Property.
(d) Guarantor shall be liable for amounts due under the Loan
Documents in an amount equal to (1) all rents and revenues
of the Property received by Borrower after the occurrence of
any monetary or other material default under the Note or
Security Instrument (whether such default is intentional or
unintentional, and regardless of whether Lender has notified
Borrower of such default) which have been used for any
purpose other than to pay the costs and expenses of
operating and maintaining the Property, unless the amount of
all such rents and revenues not so used is deposited in the
Property s bank account within ten days after written demand
by Lender and is thereafter used only to pay such costs and
expenses; and (2) any insurance proceeds, condemnation
awards or tenant security deposits which are applied by
Borrower in a manner not permitted by the Security
Instrument and applicable law. For the purposes of this
paragraph 1(d), the costs and expenses of operating and
maintaining the Property shall include, without limitation,
the payment of principal, interest and any other amounts
payable under the Note or Security Instrument.
(e) Guarantor shall be liable for all amounts due under the Loan
Documents in an amount equal to the costs of replacing and
installing any fixture, equipment, machinery or appliance in
or on the Property which is removed from the Property by
Borrower without being replaced with an item of like kind.
(other than obsolete or damaged personal property not
required in the operation of the Property).
(f) Guarantor shall be liable for amounts payable by Borrower
for any costs and expenses incurred by Lender in connection
with collecting any amounts for which Borrower is personally
liable under the Note or Security Instrument or for which
the Guarantor is liable under this Guaranty. Such costs and
expenses shall include without limitation attorneys fees and
the cost of conducting an independent audit of Borrower s
books and records to determine any amounts owed by Borrower
or Guarantor under the Note, Security Instrument or this
Guaranty.
2. Guarantor (jointly and severally, if more than one) absolutely and
unconditionally guarantees to Lender the full and punctual payment
when due of all amounts payable under Covenant 26A of the Security
Instrument (relating to certain environmental matters set forth in
that Covenant).
3. Guarantor (jointly and severally, if more than one) absolutely and
unconditionally guarantees to Lender the full and punctual payment of
all amounts due under the Loan Documents in the event that Borrower
voluntarily files for bankruptcy protection under the United States
Bankruptcy Code or voluntarily becomes subject to any reorganization,
receivership, insolvency proceeding or other similar proceeding
pursuant to any other federal or state law affecting debtor and
creditor rights, or an order for relief is entered against Borrower in
any involuntary bankruptcy filing by any creditor (other than Lender)
of Borrower pursuant to the United States Bankruptcy Code or other
federal or state law affecting debtor and creditor rights.
4. The obligations of Guarantor under Paragraphs 1, 2 and 3 of this
Guaranty are together referred to in this Guaranty as the Guaranteed
Obligation.
5. Guarantor, by this Guaranty, binds itself, its heirs, successors and
assigns with Borrower for the payment of the Guaranteed Obligation as
if Guarantor had contracted for payment of Guaranteed Obligation
rather than Borrower. Guarantor and its heirs, successors and assigns
shall be bound by all of the terms and conditions contained in any
written document evidencing, securing or relating to the Loan, whether
signed by Borrower now or in the future. Any foreclosure proceeds,
insurance proceeds or condemnation awards received by Lender shall not
reduce the Guaranteed Obligation.
6. If all or any part of any payment which has been applied by Lender to
payment of the Loan is or must be rescinded, repaid or returned by
Lender for any reason (including, without limitation, the application
of any bankruptcy, insolvency or other law), such payment, to the
extent that it is or must be rescinded, repaid or returned, shall be
deemed for purposes of this Guaranty to have continued to be due and
payable. This Guaranty shall continue to be effective as to such
payment as though such payment had not been made, and Guarantor shall
remain liable to Lender for the amount so rescinded, repaid or
returned, notwithstanding any termination of this Guaranty, any
cancellation of the Note, any release or satisfaction of the Security
Instrument, or any cancellation of any other Loan Document.
7. Lender may, from time to time, whether before or after any termination
of this Guaranty, at its sole discretion and without notice to
Guarantor, take any or all of the following actions: (a) retain or
obtain a security interest in any property to secure the Loan; (b)
retain or obtain the primary or secondary obligation of any obligor or
obligors, in addition to Guarantor, with respect to the Loan; (c)
release or compromise the Loan, or any other obligation of any other
obligor with respect to the Loan; (d) release its security interest
in, or surrender, release or permit any substitution or exchange for,
all or any part of any property securing the Loan, (e) extend or renew
the Loan; and (f) amend, modify, alter or otherwise deal with the
Loan.
8. This Guaranty is a guaranty of payment, not collection, and Lender may
resort to Guarantor for payment of the Loan whether or not Lender has
resorted to any property securing the Loan, or has sought a deficiency
judgment against Borrower, or has proceeded against any other
guarantor or any other obligor primarily or secondarily obligated with
respect to the Loan. Lender shall have the right to pursue
concurrently or successively all rights and remedies available to it
pursuant to any document or agreement or at law or in equity and
against any persons or entities, and the exercise of any of its rights
or the completion of any of its remedies shall not constitute a
discharge of any obligation of Guarantor under this Guaranty.
Guarantor agrees that the Guaranteed Obligation will be paid strictly
in accordance with the terms of the Loan Documents regardless of any
present or future law, regulation or order in any jurisdiction
affecting any of such terms. The liability of Guarantor under this
Guaranty with respect to the Guaranteed Obligation shall be
independent, absolute and unconditional, irrespective of any lack of
validity or enforceability of any of the Loan Documents, any exchange,
release, or non-perfection of any security interest and any change in
the ownership of Borrower.
Guarantor's undertaking with respect to the Guaranteed Obligation
shall not be affected by any of the following:
(a) The failure of Lender to assert any claim or demand or
to enforce any right or remedy against Borrower.
(b) Any rescission, waiver, amendment or modification of any
of the terms or provisions of this Guaranty or of any of
the Loan Documents.
(c) The release or discharge of Borrower in any creditors ,
receivership, bankruptcy or other proceedings.
(d) The impairment, limitation or modification of the
liabilities to Lender under any of the Loan Documents,
or of any remedy for the enforcement of such
liabilities, resulting from the operation of any present
or future provision of the United States Bankruptcy Code
or any other statute or law or from the decision of any
court.
9. Guarantor shall have no right of indemnification, subrogation or
setoff against Borrower or any other party until the Loan (including
all interest and other sums due under the Loan Documents) has been
repaid in full and there has elapsed after the date of such repayment
a period of one year or such longer period as is necessary to ensure
that neither such repayment nor any previous payment by Borrower to
Lender with respect to the Loan will be deemed a preference repayable
by Lender under the United States Bankruptcy Code. If Lender is
required to repay to Borrower or any other person any amounts
previously paid on the Loan because of any bankruptcy, insolvency or
reorganization of Borrower, any stop notice or any other reason, the
obligations of Guarantor shall be reinstated and revived and the
rights of Lender shall continue with regard to such amounts, all as
though they had never been paid.
10. Lender may, from time to time, whether before or after any termination
of this Guaranty, without notice to Guarantor, assign or transfer any
or all of the Loan Documents or any interest in the Loan or any of the
Loan Documents. Notwithstanding any such assignment or transfer or any
subsequent assignment or transfer, the Guaranteed Obligation shall
remain a Guaranteed Obligation for the purposes of this Guaranty. Each
immediate and successive assignee or transferee of any of the Loan
Documents or of any interest in the Loan or any of the Loan Documents
shall, to the extent of the assigned or transferred interest, be
entitled to the benefits of this Guaranty to the same extent as if
that assignee or transferee were Lender.
11. No delay on the part of Lender in the exercise of any right or remedy
shall operate as a waiver of that right or remedy, and no single or
partial exercise by Lender of any right or remedy shall preclude other
or further exercise of that or any other right or remedy. No
modification or waiver of any of the provisions of this Guaranty shall
be binding upon Lender except as expressly set forth in a writing
signed and delivered on behalf of Lender. No action of Lender
permitted under this Guaranty shall affect or impair the rights of
Lender and the obligation of Guarantor under this Guaranty,
notwithstanding any right or power of Borrower or anyone else to
assert any claim or defense as to the invalidity or unenforceability
of any such obligation, and no such claim or defense shall affect or
impair the obligations of Guarantor under this Guaranty.
12. Guarantor waives: (a) any right to require Lender to proceed against
Borrower to obtain payment; (b) any right to require Lender to proceed
against or exhaust any security held from Borrower; (c) any right to
require Lender to pursue any other remedy in Lender's power; (d) any
right to receive any notices in connection with the existence,
creation or nonpayment of any of the Loan including, without
limitation, any notice of acceptance by Lender; (e) presentment,
demand, notice of dishonor and protest; (f) any defense arising by
reason of any disability or by reason of the cessation of the
liability of Borrower for any reason; (g) any benefit of and any right
to participate in any security held by Lender now or in the future;
(h) any defense based upon diligence in collection of or realization
upon the Loan, (i) any defense arising by reason of any disability,
incapacity, lack of authority or death of any other person or the
failure of Lender to file or enforce a claim against the estate (in
administration, bankruptcy, or any other proceeding) of any other
person; and (j) any defense based upon an election of remedies based
upon any notice or demand of any kind that may be required to be given
by any statute or rule of law, or by any of the Loan Documents.
13. The invalidity or unenforceability of any provision of this Guaranty
shall not affect the validity of any other provision, and all other
provisions shall remain in full force and effect.
IN WITNESS WHEREOF Guarantor has executed this Guaranty this _ day of
______, 19___.
<PAGE>
GUARANTOR
Allegis Multifamily Trust Limited Partnership
By: Allegis Multifamily Trust, Inc., General
Partner
By: /s/ Robert C. Burrill, Jr.
--------------------------
Robert C. Burrill, Jr.
President
STATE OF CONNECTICUT )
) ss.
COUNTY OF HARTFORD )
On this 13th day of August, 1999, before me personally appeared Robert C.
Burrill, Jr., to me known to be the person described in, and who executed the
foregoing instrument as President of Allegis Multifamily Trust, Inc., which is
General Partner of Allegis Multifamily Trust Limited Partnership and
acknowledged that he signed and delivered said instrument on behalf of said
entities, duly authorized by said entities, and said Robert C. Burrill, Jr.
acknowledged said instrument to be his own free and voluntary act and the free
and voluntary act of said Allegis Multifamily Trust, Inc., as General Partner of
Allegis Multifamily Trust Limited Partnership.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official
seal at my office in said county and state the day and year above written.
------------------------------------
Notary Public in and for Connecticut
My Commission Expires: 1/31/03
<PAGE>
Exhibit E
RIDER TO MULTIFAMILY SECURITY INSTRUMENT
SINGLE ASSET BORROWER REQUIREMENT
This Rider, dated August, 1999, is attached and incorporated into that
certain Multifamily Mortgage, Deed of Trust or Deed to Secure Debt (the
Instrument) of the same date, executed by the undersigned to:
Federal Home Loan Mortgage Corporation
--------------------------------------
Name of Lender
and supplements the Instrument as follows:
Until the indebtedness evidenced by the Note is paid in full, Borrower
shall not (a) acquire, any real or personal property other than the Property and
assets (such as accounts) related to the operation and maintenance of the
property, or (b) operate any business other than the management and operation of
the Property.
IN WITNESS WHEREOF, the undersigned have identified this Rider as part of
the Instrument as of the day and year first above-written.
Borrower:
Seven Trails West LLC, a Delaware
limited liability company doing
business in Missouri as 500 Seven
Trails Drive Investors LLC
(By)Robert C. Burrill, Jr.
Manager
(Title)
(Attest)
(Title)
