UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended September 30, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from to
Commission file number 0-11985
Krupp Realty Limited Partnership-V
Massachusetts 04-2796207
(State or other jurisdiction of (IRS employer
incorporation or organization) identification no.)
470 Atlantic Avenue, Boston, Massachusetts 02210
(Address of principal executive offices) (Zip Code)
(617) 423-2233
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
KRUPP REALTY LIMITED PARTNERSHIP-V
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
September 30, December 31,
1995 1994
<S> <C> <C>
Multi-family apartment complexes, net of
accumulated depreciation of $33,920,050
and $34,905,809, respectively (Note 2) $33,892,558 $38,419,783
Cash and cash equivalents 2,135,941 598,443
Cash restricted for tenant security deposits 433,356 516,327
Cash restricted for capital improvements 735,655 919,047
Prepaid expenses and other assets 1,789,393 1,568,572
Deferred expenses, net of accumulated
amortization of $385,122 and $463,623,
respectively 506,041 582,008
Total assets $39,492,944 $42,604,180
LIABILITIES AND PARTNERS' DEFICIT
Mortgage notes payable (Note 2) $42,927,339 $47,390,488
Accounts payable 175,067 370,107
Accrued real estate taxes 2,080,688 1,895,473
Accrued expenses and other liabilities 1,113,839 1,219,501
Due to affiliates - 1,266,260
Total liabilities 46,296,933 52,141,829
Contingencies (Note 3)
Partners' deficit (Note 4):
Investor Limited Partners
(35,200 Units outstanding) (6,197,387) (8,903,710)
Original Limited Partner (234,539) (234,539)
General Partners (372,063) (399,400)
Total Partners' deficit (6,803,989) (9,537,649)
Total liabilities and Partners' deficit $39,492,944 $42,604,180
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-V
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenue:
Rental $3,324,815 $3,423,538 $10,558,041 $10,104,994
Interest income 37,120 21,410 92,524 61,218
Total revenue 3,361,935 3,444,948 10,650,565 10,166,212
Expenses:
Operating (including
reimbursements to
affiliates of $56,937,
$89,859, $141,725 and
$269,576, respectively) 952,338 1,035,367 2,847,456 3,127,685
Maintenance 191,707 298,232 625,373 707,633
General and administrative
(including reimbursements
to affiliates of $11,249,
$20,843, $38,519 and
$63,031, respectively) 61,338 59,097 117,677 124,100
Real estate taxes 222,850 446,572 1,405,128 1,555,962
Management fees to an
affiliate 133,069 104,565 392,201 371,021
Depreciation and
amortization 844,994 883,886 2,577,623 2,536,142
Interest 973,849 993,251 2,942,901 2,991,246
Total expenses 3,380,145 3,820,970 10,908,359 11,413,789
Loss before gain on sale
of property (18,210) (376,022) (257,794) (1,247,577)
Gain on sale of property
(Note 2) 2,991,454 - 2,991,454 -
Net income(loss) $2,973,244 $ (376,022) $ 2,733,660 $(1,247,577)
Allocation of net income
(loss) (Note 4):
Per Unit of Investor
Limited Partner Interest
(35,200 Units
outstanding) $ 83.62 $ (10.58) $ 76.88 $ (35.09)
General Partners $ 29,733 $ (3,761) $ 27,337 $ (12,476)
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-V
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30,
1995 1994
<S> <C> <C>
Operating activities:
Net income(loss) $ 2,733,660 $(1,247,577)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization 2,577,623 2,536,142
Gain on sale of property (2,991,454) -
Decrease in cash restricted
for tenant security deposits 82,971 37,392
Decrease (increase) in prepaid expenses
and other assets (220,821) 363,707
Decrease in accounts payable (173,005) (51,897)
Increase(decrease) in accrued real estate
taxes 185,215 (500,433)
Increase (decrease) in accrued expenses
and other liabilities (105,662) 163,847
Increase(decrease) in payables to affiliates (1,266,260) 1,079
Net cash provided by operating
activities 822,267 1,302,260
Investing activities:
Additions to fixed assets (1,100,124) (2,091,664)
Increase (decrease) in accounts payable
related to fixed asset additions (22,035) 157,807
Decrease in cash restricted for
capital improvements 183,392 1,002,209
Proceeds from sale of property 6,117,147 -
Net cash provided by (used in)
investing activities 5,178,380 (931,648)
Financing activities:
Principal payments on mortgage notes
payable (412,428) (402,961)
Deferred expenses - (12,138)
Repayment of mortgage note payable (4,050,721) -
Net cash used in financing
activities (4,463,149) (415,099)
Net increase (decrease) in cash and cash
equivalents 1,537,498 (44,487)
Cash and cash equivalents, beginning of
period 598,443 713,196
Cash and cash equivalents, end of period $ 2,135,941 $ 668,709
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-V
NOTES TO FINANCIAL STATEMENTS
(1) Accounting Policies
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted in this report
on Form 10-Q pursuant to the Rules and Regulations of the Securities
and Exchange Commission. In the opinion of the General Partners of
Krupp Realty Limited Partnership-V (the "Partnership"), the
disclosures contained in this report are adequate to make the
information presented not misleading. See Notes to Financial
Statements included in the Partnership's Annual Report on Form 10-K
for the year ended December 31, 1994 for additional information
relevant to significant accounting policies followed by the
Partnership.
In the opinion of the General Partners of the Partnership, the
accompanying unaudited financial statements reflect all adjustments
(consisting of only normal recurring accruals) necessary to present
fairly the Partnership's financial position as of September 30, 1995,
its results of operations for the three and nine months ended
September 30, 1995 and 1994 and its cash flows for the nine months
ended September 30, 1995 and 1994. Certain prior period balances
have been reclassified to conform with current period financial
statement presentation.
The results of operations for the three and nine months ended
September 30, 1995 are not necessarily indicative of the results
which may be expected for the full year. See Management's Discussion
and Analysis of Financial Condition and Results of Operations
included in this report.
(2) Sale of Marine Terrace Apartments
On July 19, 1995, the Partnership sold Marine Terrace Apartments, a
187 unit apartment complex located in Chicago, Illinois, for
$6,156,500. Proceeds from the sale were used to pay closing costs of
$39,353, to repay the existing mortgage note on the property of
$4,050,721 and to satisfy other Partnership liabilities. The
property had a net book value of $3,125,693 which resulted in a gain
of $2,991,454, for financial reporting purposes.
(3) Legal Proceeding
The Partnership is a defendant in a class action suit related to the
practice of giving discounts for the early or timely payments of rent
at Park Place. The central issue of the complaint was whether the
operative lease violated a Chicago municipal ordinance relating to
late fee charges because it allowed tenants a discount if rent was
paid on or before the first day of the month. The ordinance in
question limited late fee charges to $10 per month if the rent was
more than 5 days late. The allegation was that, notwithstanding the
stated rental rate and printed discount, the practice represented an
unlawful means of exacting late fee charges. In addition to seeking
damages for any "forfeited" discounts, Plaintiffs seek statutory
damages of two months rent per lease violation plus reasonable
attorneys' fees. To be eligible for such punitive damages Plaintiffs
must prove that the Defendant deliberately used a provision
prohibited by the ordinance.
During 1994, the Court ruled in favor of the Defendant, and accepted
the Partnership's Motion to Dismiss the Plaintiffs' Third Amended
Complaint. The Plaintiffs have filed an appeal with the Appellate
Court of Illinois, First District, which is pending. Although
management believes that the Defendant will prevail on the issue of
statutory damages, the ultimate outcome of this litigation, including
an estimate of any potential loss, cannot be presently determined
and accordingly no provision for loss has been made in the
accompanying financial statements.
Continued
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-V
NOTES TO FINANCIAL STATEMENTS - Continued
(4) Changes in Partners' Deficit
A summary of changes in Partners' Deficit for the nine months ended
September 30, 1995 is as follows:
<TABLE>
<CAPTION>
Investor Original Total
Limited Limited General Partners'
Partners Partner Partners Deficit
<C> <C> <C> <C> <C>
Balance at
December 31, 1994 $(8,903,710) $(234,539) $(399,400) $(9,537,649)
Net income 2,706,323 - 27,337 2,733,660
Balance at
September 30, 1995 $(6,197,387) $(234,539) $(372,063) $(6,803,989)
</TABLE>
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-V
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Partnership's ability to generate cash adequate to meet its needs is
dependent primarily upon the successful operations of its real estate
investments. Such ability is also dependent upon the future availability of
bank borrowing sources as current debt matures. These sources of liquidity
will be used by the Partnership for payment of expenses related to real estate
operations, debt service, capital improvements and expenses. Cash flow, if
any, as calculated under Section 8.2(a) of the Partnership Agreement ("Cash
Flow"), will then be available for distribution to the Partners. The General
Partners discontinued distributions during 1990 due to insufficient operating
cash flow. The Partnership will resume distributions when the properties
generate sustainable cash flow in excess of operating and capital improvement
needs and after paying off any existing obligations.
The Partnership's major capital improvement project, the repair of Park
Place's building facade, is nearing completion as of September 30, 1995. The
Partnership anticipates that the restoration project will be completed in
1995, and will greatly enhance the appearance of the property. This
improvement, along with extensive interior improvements, is being funded from
both established reserves and cash generated by the property and has resulted
in both increased rents and increased occupancy.
On July 19, 1995, the Partnership sold Marine Terrace Apartments for
$6,117,147, net of closing costs, resulting in a gain on the sale of
$2,991,454, for financial reporting purposes. The Partnership used the
proceeds to satisfy the existing mortgage and other Partnership liabilities.
Cash Flow
Shown below, as required by the Partnership Agreement, is the calculation
of Cash Flow for the nine months ended September 30, 1995.
<TABLE>
<CAPTION>
Rounded to $1,000
<S> <C>
Net income for tax purposes $ 3,988,000
Items not requiring (requiring) the use of operating
funds:
Tax basis depreciation and amortization 2,574,000
Tax gain on sale of Marine Terrace (4,242,000)
Expenditures for capital improvements (1,100,000)
Principal payments on mortgage notes payable (412,000)
Working capital reserves (820,000)
Cash Flow Deficit $ (12,000)
</TABLE>
Continued
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-V
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - Continued
Operations
The following discussion relates to the operations of the Partnership and
its properties (Park Place, Marine Terrace and Century II) for the three and
nine months ended September 30, 1995 and 1994. The results of operations of
the Partnership are not comparable due to the sale of Marine Terrace on July
19, 1995.
The increase in rental revenue, net of Marine Terrace's revenues, for the
three and nine months ended September 30, 1995, as compared to the same
periods in 1994, is due to the impact of rental rate increases at Park Place
and Century II during the second half of 1994. Average residential occupancy
for the Partnership was 94% for the nine months September 30, 1995 and 93% for
the same period in 1994. The increase in interest income for the three and
nine months ended September 30, 1995, as compared to 1994, is due to a rise
in short-term interest rates.
Total expenses of the Partnership, net of Marine Terrace's expenses, for
the three and nine months ended September 30, 1995, as compared to the same
periods in 1994, have remained stable with the exception of operating expense
and real estate taxes. The decrease in operating expense is primarily due to
management's efforts to reduce reimbursable operating costs. Certain of these
cost savings are anticipated to continue throughout 1995. The increase in
real estate taxes is primarily due to an increase in assessed property value
at Park Place which is directly related to the capital improvement project.
Depreciation expense has increased as a result of these extensive
improvements.
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-V
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Partnership is a defendant in a class action suit related to the
practice of giving discounts for the early or timely payments of rent
at Park Place. The central issue of the complaint was whether the
operative lease violated a Chicago municipal ordinance relating to
late fee charges because it allowed tenants a discount if rent was
paid on or before the first day of the month. The ordinance in
question limited late fee charges to $10 per month if the rent was
more than 5 days late. The allegation was that, notwithstanding the
stated rental rate and printed discount, the practice represented an
unlawful means of exacting late fee charges. In addition to seeking
damages for any "forfeited" discounts, Plaintiffs seek statutory
damages of two months rent per lease violation plus reasonable
attorneys' fees. To be eligible for such punitive damages Plaintiffs
must prove that the Defendant deliberately used a provision
prohibited by the ordinance. During 1994, the Court ruled in favor
of the Defendant, and accepted the Partnership's Motion to Dismiss
the Plaintiffs' Third Amended Complaint. The Plaintiffs have filed
an appeal with the Appellate Court of Illinois, First District, which
is pending.
Item 2. Changes in Securities
Response: None
Item 3. Defaults upon Senior Securities
Response: None
Item 4. Submission of Matters to a Vote of Security Holders
Response: None
Item 5. Other Information
Response: None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Marine Terrace Apartments
(10.1) Real Estate Sale Contract and Agreement to Purchase
Personal Property dated May 9, 1995 by and between
the Seller, Krupp Realty Limited Partnership V
and the Purchaser, Harry Langer.
(b) Reports on Form 8-K
Response: None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Krupp Realty Limited Partnership-V
(Registrant)
BY: /s/Marianne Pritchard
Marianne Pritchard
Treasurer and Chief Accounting Officer
The Krupp Corporation, a General
Partner
DATE: November 3, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 2,170,276
<SECURITIES> 0
<RECEIVABLES> 92,683
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,432,365
<PP&E> 68,703,771<F1>
<DEPRECIATION> (34,305,172)<F2>
<TOTAL-ASSETS> 39,492,944
<CURRENT-LIABILITIES> 3,369,594
<BONDS> 42,927,339<F3>
<COMMON> (6,903,989)<F4>
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 39,492,944
<SALES> 10,650,565
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,965,458<F5>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,942,901
<INCOME-PRETAX> 2,733,660<F6>
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,733,660<F6>
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,733,660<F7><F6>
<EPS-PRIMARY> 0
<EPS-DILUTED> 0<F7>
<FN>
<F1>Includes apartment complexes of $67,812,608 and deferred expenes of $891,163.
<F2>Includes depreciation of $33,920,050 and amortization of #385,122.
<F3>Represents mortgage notes payable.
<F4>Represents total deficit of general partners and limited partners of ($372,063)
and $(6,431,926), respectively.
<F5>Includes operating expenses of $3,982,707, real estate tax expense of
$1,405,128 and depreciation and amortization of $2,577,623.
<F6>Includes gain on sale of property of $2,991,454.
<F7>Net income allocated $27,337 to the general partners and $2,706,323 to the
limited partners for the 9 months ended 9/30/95. Average net income per unit
of limited partners interest is $76.88 on 35,200 units outstanding.
</FN>
</TABLE>
NORTH SIDE REAL ESTATE BOARD
REAL ESTATE SALE CONTRACT - APARTMENTS/INVESTMENTS
TO: Krupp Realty Limited Partnership V
Date May 9, 1995
SELLER
I/We offer to purchase the property known as: 4180 North
Marine Drive Chicago, Illinois together with improvements
thereon,
1. Purchase price $5,825,000.
2. Initial earnest money $50,000.00, in the form of check,
deposited with Seller's attorney. Said initial earnest
money shall be returned and this contract shall be void
if not accepted on or before May , 1995 Earnest
money shall be held in escrow by Lawyers Title Ins.
Corp. in an interest bearing account for the benefit of
the parties hereto in an established escrow account in
compliance with the laws of the State of Illinois.
3. The balance of the purchase price shall be paid at the
closing, plus or minus prorations, as follows (delete
inapplicable subparagraphs):
(a) by the immediately available wire transfer funds.
4. At closing, Seller shall execute and deliver to
Purchaser, or cause to be executed and delivered to
Purchaser, a recordable Trustee's Deed with release of
homestead rights (or other appropriate deed if title is
in trust or in an estate), or Articles of Agreement for
such a deed if that portion of sub-paragraph 3 (d) is
applicable, subject only to the following, if any:
covenants, conditions and restrictions of record;
private, public and utility easements; roads and
highways; existing leases and tenancies; special taxes
or assessments for improvements not yet completed;
unconfirmed special taxes or assessments; general taxes
for the year 1994 and subsequent years.
5. Seller represents and warrants that:
(a) existing leases, if any, are to be
assigned to Purchaser at closing,
none of which expire later than
May 1, 1996, and said existing
leases have no option to renew,
cancel or purchase; (b) the present
monthly gross rental income is
$116,598.67; (c) the 1993 general
real estate taxes are $318,052.00.
6. Closing or escrow payout shall be on or before June
30, 1995, provided title has been shown to be good or
is accepted by Purchaser in Chicago, IL, at the
office of Purchaser's mortgagee or at Lawyers Title
Insurance Corporation.
7. Seller agrees to surrender possession of the premises
herein occupied by him on or before closing, 19 ,
provided this sale has been closed.
8. Purchaser will pay a broker's commission to Cohen
Financial Corporation pursuant to a separate
agreement.
9. THIS CONTRACT IS SUBJECT TO THE PROVISIONS APPEARING
ON THE REVERSE SIDE HEREOF.
PURCHASER: Harry Langer
ADDRESS: 3767 North Racine
Chicago, Illinois 60613
PURCHASER:
ADDRESS:
ACCEPTANCE OF CONTRACT BY SELLER
This day of May, 1995, I/We accept this contract and agree
to perform and convey title or cause title to be conveyed
according to the terms of this contract.
SELLER Krupp Reality Limited Partnership V
BY: The Krupp Corporation, General Partner
ADDRESS 6133 North River Road, Suite 300
Rosemont, Illionois
City State Zip
SELLER By:
Peter M. Villim, Authorized Agent
(Type or Print Name)
ADDRESSS:
City State Zip
<PAGE>
PROVISIONS
1. If any water taxes and other probable items shall be
prorated to date of closing. Security deposits, if any,
shall be paid to Purchaser at closing, together with
statutory interest.
2. The provisions of the Uniform Vendor and Purchaser Risk
Act of the State of Illinois shall be applicable to this
contract.
4. All notices herein required shall be in writing and shall
be served on the parties at the addresses following their
signatures. The mailing of a notice by registered or
certified mail, return receipt requested, shall be
sufficient service.
5. If this contract is terminated without Purchaser's fault,
the earnest money shall be returned to Purchaser, but if
the termination is caused by Purchaser's fault, then, the
earnest money shall be forfeited and the balance paid to
Seller, as his sole remedy.
<PAGE>
6. Seller warrants that no notice from any city, village or
other governmental authority of a dwelling code violation
which currently exists in the aforesaid premises has been
received by Seller. If a notice is received between date
of acceptance of the contract and date of closing, Seller
shall promptly notify Purchaser of such notice.
7. At the request of Seller or Purchaser evidenced by notice
in writing to the other party at any time prior to the
date for delivery of deed hereunder, this sale shall be
closed through an escrow with a title insurance company,
in accordance with the general provisions of the usual
form of Deed and Money Escrow Agreement then furnished and
in use by said company, with such special provisions
inserted in the escrow agreement as may be required to
conform with this contract. Upon the creation of such an
escrow, anything herein to the contrary notwithstanding,
payment of purchase price and delivery of deed shall be
made through the escrow and this contract and the earnest
money shall be deposited in the escrow and the broker
shall be made a party to the escrow with regard to
commission due. The cost of the escrow shall be divided
equally between Purchaser and Seller.
8. Seller shall furnish five days prior to closing, an ALTA
survey by a currently licensed land surveyor, showing the
present location of all improvements. If Purchaser or
Purchaser's mortgagee desires a more recent survey, same
shall be obtained at Purchaser's expense.
9. Seller agrees to furnish to Purchaser an affidavit of
title subject only to those items set forth herein, and an
ALTA form if required by Purchaser's mortgagee.
10. Right is reserved by either party to insert correct
legal description at any time, without notices, when
same is available.
11. Seller shall have the right to pay off any existing
mortgage(s) out of the proceeds of this sale.
12. Purchaser may place a mortgage on this property and
apply proceeds of such mortgage to the purchase price.
13. Purchaser and Seller hereby agree to make all
disclosures and do all things necessary to comply with
the applicable provisions of the Real Estate Settlement
Procedures Act of 1974, as amended.
14. Seller shall pay the amount of any stamp tax imposed by
the state and county on the transfer of title, and
shall furnish a completed declaration signed by the
Seller or Seller's agent in the form required by the
state and county, and shall furnish any declaration
signed by Seller or Seller's agent or meet other
requirements as established by any local ordinance with
regard to a transfer or transaction tax. Purchaser
shall pay the Chicago City Department or Finance stamp
tax.
15. Seller shall remove from premisses by date of
possession all debris and Seller's personal property
not conveyed by Bill of Sale to Purchaser.
16. Seller agrees to surrender possession of the real
estate in the same condition as it is at the date of
this contract, ordinary wear and tear excepted.
17. Time is of the essence of this contract.
18. Wherever appropriate, the singular includes the plural
and the masculine includes the feminine or the neuter.
19. See page 9 rider attached and made a part of this contract.
<PAGE>
RIDER
R-l. In the event of any conflicts or inconsistencies between the
terms and conditions of this Rider and the preprinted Real Estate
Contract (the "Contract") to which this Rider is attached, the
terms and conditions of this Rider shall control.
R-2. TITLE:
Seller holds title to the Premises through American National Bank
and Trust Company ("Trustee"), as Trustee under Trust Contract
dated February 15, 1983 and known as Trust No. 56893. Seller
shall cause the Trustee to convey to Purchaser by Trustee Deed
(the "Deed"), provided Purchaser shall be able to obtain extended
coverage under the Title Policy, and Purchaser shall accept the
fee simple title to the Property in accordance with the terms of
this Contract, and Purchaser's obligation to accept said title
shall be conditioned upon Purchaser then being conveyed
marketable fee simple title to the Property, subject only to the
Permitted Exceptions (as hereinafter defined).
Within seven (7) days from the date of this Contract, Seller
shall furnish Purchaser with a Commitment For Title Insurance for
an ALTA Owner's Form B Title Insurance Policy (the "Title
Policy") issued by Lawyers Title Insurance Corporation and
legible copies of all instruments and plans mentioned therein as
exceptions to title (all of such items are hereinafter
collectively referred to as the "Commitment"). The Commitment
shall contain a 3.1 zoning endorsement in the form attached
hereto as Exhibit "A". The Commitment shall be in the amount of
the Purchase Price. Purchaser agrees that the title matters set
forth in Paragraph 4 of the Contract and the title matters set
forth on Exhibit "A" attached hereto are accepted by Purchaser as
"Permitted Exceptions". Should such Commitment contain any other
title exceptions which are not acceptable to Purchaser, in its
sole discretion, Purchaser shall, within five (5) days after
receipt of the Commitment, notify Seller if any such exceptions
are unacceptable. If Purchaser fails to so notify Seller of any
unacceptable exceptions as described above, all title exceptions
set forth in Schedule B of the Commitment shall be deemed
<PAGE>
accepted by Purchaser and shall also be included as "Permitted
Exceptions". If any exceptions are unacceptable to Purchaser and
Purchaser timely notifies Seller in writing of such facts as
above provided, Seller, in Seller's sole discretion, shall have
thirty (30) days from the date Seller receives notice of such
unacceptable exceptions to remove or cure such exceptions and the
date of Closing shall be extended, if necessary. Seller shall be
deemed to have refused to cure any unacceptable exceptions, which
Seller may so do in its sole discretion, unless Seller, within
ten (10) days after receipt of notice from Purchaser, shall
notify Purchaser in writing that Seller will attempt to cure such
unacceptable exceptions. If Seller fails or refuses to cure said
unacceptable exceptions within the time period above provided,
Purchaser may (i) terminate this Contract and the earnest money
deposit shall be returned to Purchaser, or (ii) waive such
exceptions and accept title subject thereto, in which event there
shall be no reduction in the Purchase Price. In all events,
Seller shall pay all Title Insurance premiums and other title
costs.
<PAGE>
R-3. -REVIEW PERIOD:
On or before the date of acceptance of this Contract, Seller has
delivered to Purchase the following:
a. A copy of the most current survey in Seller's
possession;
b. All maintenance contracts and service agreements which
require more than thirty (30) days' prior written
notice to cancel;
c. Copies of the current tax bills and assessment notices;
d. Copy of the existing Title Insurance Policy;
e. All Leases affecting the property will be made
available for inspection on-site.
f. Copy of existing Phase I Environmental Audit, if any.
Seller makes no warranty as to the accuracy or
correctness of any information contained in items a),
(d) or (f). Purchaser may contact the environmental
engineer that prepared the Environment Audit and
attempt to obtain from said engineer, at Purchaser's
sole cost, a reliance letter which will permit
Purchaser to rely on the Environmental Audit. The
failure to obtain such reliance letter shall not be a
condition of closing. The Review Period shall commence
on the date of acceptance of this Contract. Purchaser
shall have ten (10) days from the commencement of the
Review Period to inspect and approve same (the "Review
Period").
R-4. INSPECTION CONTINGENCY:
During the Review Period, Purchaser shall have the right to cause
its engineers, architects, agents, appraisers and lenders to
inspect and approve of the property.
<PAGE>
R-5. DISAPPROVAL:
If Purchaser does not advise Seller in writing of its disapproval
of the documents or the property on or before the expiration of
the Review Period, then the inspection and review shall be deemed
to have been satisfactory, and this Contract shall continue in
full force and effect. If Purchaser does notify Seller of its
disapproval within such period, then this Contract shall be null
and void and the earnest money deposit and all interest earned
shall be returned to Purchaser.
R-6. CLOSING DOCUMENTS:
At the Closing, Seller shall deliver to Purchaser the following
documents respecting the Premises:
a. An Affidavit of Title;
b. Survey as described in Contract if not delivered
pursuant to R-2.a.;
c. Keys to the premises;
d. Assignment and Assumption (to be executed by Purchaser
and Seller) of the Maintenance Contracts and Service
Contracts, provided Purchaser agrees to assume said
contracts;
e. Trustee's Deed;
f. Bill of Sale for the personality
g. Such other and further documents which are reasonably
required by Purchaser to perfect its title in the real
estate;
h. Leases and Assignment and Assumption (to be executed
by Purchaser and Seller) of Leases and Security
Deposits. i. Letters to Tenants.
<PAGE>
R-7. WARRANTIES OF SELLER:
Seller represents and warrants to Purchaser that as of the date
of the closing:
a. There are no service or maintenance agreements not
cancelable upon thirty (30) days' written notice, other
than as set forth as Exhibit "B";
b. Seller has the requisite capacity and authority to
proceed with the sale and transfer contemplated under
the terms of this Contract, and it will take all
appropriate action necessary to authorize those persons
who are to execute the Trustee Deed, Bill of Sale and
other documents pursuant to the terms of this Contract,
to execute such documents;
c. There are no pending lawsuits or claims for damages or
liens by any third party arising out of the operation
of the Premises, or any special assessments or
condemnation actions which would affect the Premises;
d. Seller has not received notice of any change in zoning;
e. Seller has not received written notice from any
governmental authority of any building code violation
relating to the Premises. The representations and
warranties made by Seller in this Section R-7 shall
survive for a period of one hundred (120) days after
the Closing and thereafter shall be null and void. In
any event, Sellers liability for any breach of
representation or warranty under this Agreement shall
be limited to and shall not exceed $250,000.00. R-8.
AS-IS: Purchaser acknowledges and agrees that it will
be purchasing the Property based solely upon its
inspection and investigations of the Property and that
Purchaser will be purchasing the Property "AS IS" and
"WITH ALL FAULTS" based upon the condition of the
Property as of the date of this Contract, subject to
reasonable wear and tear and loss by fire or other
casualty or condemnation from the date of this Contract
until the Closing. Without limiting the foregoing,
Purchaser acknowledges that, except as may otherwise be
specifically set forth elsewhere in this Contract,
neither Seller nor its consultants or agent have made
any other representations or warranties of any kind
upon which Purchaser is relying as to any matters
concerning the Property, including, but not limited to,
the condition of the land or any Improvements, the
existence or nonexistence of asbestos, toxic water or
any hazardous material, economic projections or market
studies concerning the Property, any development
rights, taxes, bonds, covenants, conditions and
restrictions affecting the Property, water or water
rights, topography, drainage, soil, subsoil of the
Property, the utilities serving the Property or any
zoning, environmental or building laws, rules or
regulations affecting the Property. Seller makes no
representation that the Property complies with Title
III of the Americans with Disabilities Act or any fire
codes or building codes. Purchaser hereby releases
Seller from any and all liability in connection with
any claims which Purchaser may have against Seller, and
<PAGE>
Purchaser hereby agrees not to assert any claims, for
contribution, cost recovery or otherwise, against
Seller, relating directly or indirectly to the
existence of asbestos or hazardous materials or
substances on, or environmental conditions of, the
Property. As used herein, the term "Hazardous
Materials" or "Hazardous Substances" means (i)
hazardous wastes, hazardous substances, hazardous
constituents, toxic substances or related materials,
whether solids, liquids or gases, including but not
limited to substances defined as "hazardous wastes",
"hazardous substances", "toxic substances",
"pollutants", "contaminants", "radioactive materials",
or other similar designations in, or otherwise subject
to regulation under, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), 42 U.S.C. 9601 et seq.; the Toxic
Substance Control Act ("TSCAS"), 15 U.S.C. 2601 et
seq.; the Hazardous Materials Transportation Act, 49
U.S.C. 1802; the Resource Conservation and Recovery Act
("RCRA"), 42 U.S.C. 9601, et seq.; the Clean Water Act
("CWA"), 33 U.S.C. 1251 et seq.; the Safe Drinking
Water Act, 42 U.S.C. 300f et seq.; the Clean Air Act
("CAA"), 42 U.S.C. 7401 et seq., and in any permits,
licenses, approvals, plans, rules, regulations-or
ordinances adopted, or other criteria and guidelines
promulgated pursuant to the preceding laws or other
similar federal, state or local laws, regulations,
rules or ordinance now or hereafter in effect relating
to environmental matters (collectively the
"Environmental Laws"); and (ii) any other substances,
constituents or wastes subject to any applicable
federal, state or local law, regulation or ordinance,
including any environmental law, now or hereafter in
effect, including but not limited to (A) petroleum, (B)
refined petroleum products, (C) waste oil, (D) waste
aviation or motor vehicle fuel and (E) asbestos.
Seller has provided to Purchaser certain unaudited
historical financial information regarding the Property
relating to certain periods of time in which Seller
owned the Property. Seller makes no representation or
warranty that Purchaser will achieve similar financial
or other results with respect to the operations of the
Property.
<PAGE>
R-9. AFFIRMATIVE COVENANTS:
Between the date of this Contract and the closing, Seller shall
operate the Premises in, the same manner as previously operated,
and to that effect, Seller shall:
a. Keep the Premises in good order and condition, without
waste, and free from mechanic's liens, ordinary wear
and tear excepted;
b. Duly and punctually perform all covenants and
agreements expressed as binding upon Seller under any
lease or other agreement with respect to the Premises;
c. Not create, cause or maintain, or suffer to be
maintained, any nuisance or any waste in or about the
Premises;
d. Not enter into any new Leases other than at market
rent, without Purchaser's written approval.
R-10. POSSESSION AND INSPECTION:
Seller shall deliver possession of the real estate to Purchaser
at Closing in the same condition as it is at the date of the
Contract, ordinary wear and tear excepted, and Purchaser shall
have the right to inspect the Premises within three (3) days
prior to the closing to verify that the condition of the Premises
is as required under this Contract.
R-ll. FIRPTA AFFIDAVIT:
If Seller is a "Foreign Person", within the meaning of 1445 of
Internal Revenue Code, then Purchaser shall withhold and deduct
from sale proceeds a tax equal to Ten (10%) Percent of the amount
realized. The provision shall not apply if a) Seller furnishes to
purchaser an affidavit setting forth Seller's U.S. Taxpayer I.D.
Number, and that Seller is not a foreign person as defined by the
Internal Revenue Code, or (b), Seller provides evidence that it
is exempt from a holdback under such other exceptions as are
permitted in s1445 of the Internal Revenue Code.
R-12. Purchaser shall have the right to access to the Premises
after acceptance of this Contract on 24 hour prior notice (48
hours' prior written notice for inspection of occupied units), to
have an appraisal, to take measurements, and to take bids for
work.
<PAGE>
R-13. PRORATIONS:
Taxes and assessments shall be prorated as of the Closing Date to
the extent, and only to the extent of the period beginning April
30, 1995, through the day prior to the Closing Date, based on a
three hundred sixty-five (365) day year. Seller shall be charged
and credited for such Prorations up to but excluding the Closing
Date and Purchaser shall be charged and credited for all of the
same on and after the Closing pate. Prior to Closing, Purchaser
and Seller shall review and approve the Prorations. If the actual
mounts to be prorated are not then known, or if any additional
expenses are incurred or income received after the date
Prorations are made, the Prorations shall be made on the basis of
the best evidence then available. All utility bills shall be
prorated when the last bill incurred by Seller is received. All
unused refundable deposits and all prepaid rent under any leases
shall be credited to Purchaser at Closing. No prorations shall be
made for delinquent rents existing as of the Closing Date.
Nevertheless, if Purchaser later collects any rents that were
delinquent on or before the Closing, such rents shall be
attributed first to the current rent, then to the portion that
was delinquent on or before the Closing; Purchaser shall promptly
remit to Seller the portion of such rent collected, if any,
attributable to the period of time prior to the Closing. Seller
shall pay the amount of any stamp tax imposed by State law on the
transfer of the title, and shall furnish a completed Real Estate
Transfer Declaration signed by the Seller or the Seller's agent
in the form required pursuant to the Real Estate Transfer Tax Act
of the State of Illinois and shall furnish any declaration signed
by the Seller or the Seller's agent or meet other requirements as
established by any local ordinance with regard to a transfer or
transaction tax; Purchaser shall pay the amount of any stamp tax
imposed by Chicago Department of Revenue Stamps or other local
ordinance. The provisions of this Section shall survive the
Closing. Notwithstanding anything to the contrary contained in
this Section, Purchaser acknowledges that real estate taxes will
not be prorated, except as provided in this Section for the
period beginning April 30, 1995 through the day prior to the
Closing Date (which prorations shall be based on 1994 Real Estate
taxes in the sum of $318,627.00). Seller has previously paid the
first installment of 1994 taxes.
<PAGE>
R-14. CASUALTY OR CONDEMNATION:
If prior to the Closing, the improvements or any material portion
thereof (having a replacement cost equal to or in excess of
$250,000.00) are damaged or destroyed by fire or casualty, or any
part of the Property is taken by eminent domain by any
governmental entity, then Purchaser or Seller shall have the
option, exercisable by written notice given to the other party at
or prior to the Closing, to terminate this Contract, whereupon
all obligations of all parties hereto shall cease, the earnest
money deposit shall be returned to Purchaser and this Contract
shall be void and without recourse to the parties hereto except
for provisions which are expressly stated to survive such
termination. If neither Purchaser nor Seller elects to terminate
this Contract or if such damage or destruction or taking has a
replacement cost or is in an amount of less than $250,000.00,
Purchaser shall proceed with the purchase of the Property without
reduction or offset of the Purchase Price, and in such case,
unless Seller shall have previously restored the Property to its
condition prior to the occurrence of any such damage or
destruction, Seller shall give Purchaser a credit against the
Purchase Price in an amount equal to the deductible under
Seller's insurance policy and Seller shall pay over or sign to
Purchaser all amounts received or due from, and all claims
against, any insurance company or governmental entity as a result
of such destruction or taking.
R-15. SELLER'S DEFAULT:
If at the Closing, Seller is unable to give title or to make
conveyance, or to satisfy all of Seller's obligations as set
forth in this Contract, Seller shall be in default under this
Contract and the earnest money deposit made hereunder shall be
forthwith returned to Purchaser. In addition to the foregoing, if
Purchaser desires to purchase the Property in accordance with the
terms of this Contract and Seller refuses to perform Seller's
obligations hereunder, Purchaser, at its option, and as
Purchaser's sole and exclusive remedy, shall have the right to
compel specific performance by Seller hereunder in which event
any earnest money deposit made hereunder shall be credited
against the Purchase Price.
<PAGE>
R-16. PURCHASER'S DEFAULT:
The parties acknowledge that in the event of Purchaser's failure
to fulfill its obligations hereunder it is impossible to compute
exactly the damages which would accrue to the Seller in such
event. The parties have taken these facts into account in setting
the amount of the earnest money deposit, required pursuant to
Section 2 of this Contract, for Fifty Thousand Dollars
($50,000.00) and hereby agree that: (i) such amount together with
the interest earned thereon is the pre-estimate of such damages
which would accrue to Seller; (ii) such amount represents damages
and not any penalty against Purchaser; and (iii) if this Contract
shall be terminated by Seller by reason of Purchaser's failure to
fulfill Purchaser's obligations hereunder, the earnest money
deposit together with the interest thereon shall be Seller's full
and liquidated damages in lieu of all other rights and remedies
which Seller may have against Purchaser at law or in equity.
R-17. EFFECTIVE NOTICES:
All notices under this Contract shall be in writing and shall be
delivered personally or shall be sent by Federal Express or other
comparable overnight delivery courier, addressed as set forth at
the beginning of this Contract. Notices shall be deemed
effective, when so delivered. Copies of all such notices to
Purchaser shall be sent to Simon Edelstein, Esq., 939 West Grace,
Chicago, IL 60613, and copies of all such notices to Seller shall
be sent to Joel H. Sirkin, Esq., Hale and Dorr, 60 State Street,
Boston, MA 02109. R-18. ESCROW PROVISIONS: Escrow Agent shall
agree to hold and dispose of the Deposit in accordance with the
terms and provisions of this Contract. Escrow Agent hereby
acknowledges receipt by Escrow Agent of the Deposit paid by
Purchaser to be applied on the Purchase Price of the Property
under the terms hereof. Escrow Agent agrees to hold, keep and
deliver said Deposit and all other sums delivered to it pursuant
hereto in accordance with the terms and provisions of this
Contract. Escrow Agent shall not be entitled to any fees or
<PAGE>
compensation for its services hereunder. Escrow Agent shall be
liable only to hold said sums and deliver the same to the parties
named herein in accordance with the provisions of this Contract,
it being expressly understood that by acceptance of this
agreement Escrow Agent is acting in the capacity of a depository
only and shall not be liable or responsible to anyone for any
damages, losses or expenses unless same shall have been caused by
the gross negligence or willful malfeasance of Escrow Agent. In
the event of any disagreement between Purchaser and Seller
resulting in any adverse claims and demands being made in
connection with or for the monies involved herein or affected
hereby, Escrow Agent shall be entitled to refuse to comply with
any such claims or demands so long as such disagreement may
continue; and in so refusing Escrow Agent shall make no delivery
or other disposition of any of the monies then held by it under
the terms of this Contract, and in so doing Escrow Agent shall
not become liable to anyone for such refusal; and Escrow Agent
shall be entitled to continue to refrain from acting until (a)
the rights of the adverse claimants shall have been finally
adjudicated in a court of competent jurisdiction of the monies
involved herein or affected hereby, or (b) all differences shall
have been adjusted by agreement between Seller and Purchaser, and
Escrow Agent shall have been notified in writing of such
agreement signed by the parties hereto. Escrow Agent shall not be
required to disburse any of the monies held by it under this
Contract unless in accordance with either a joint written
instruction of Purchaser and Seller or an Escrow Demand from
either Purchaser or Seller in accordance with the provisions
hereinafter. Upon receipt by Escrow Agent from either Purchaser
or Seller (the "Notifying Party") of any notice or request ("the
Escrow Demand") to perform any act or disburse any portion of the
monies held by Escrow Agent under the terms of this Contract,
Escrow Agent shall give written notice to the other party (the
"Notified Party"). If within five (5) days after the giving of
such notice, Escrow Agent does not receive any written objection
to the Escrow Demand from the Notified Party, Escrow Agent shall
comply with the Escrow Demand. If Escrow Agent does receive
written objection from the Notified Party in a timely manner,
Escrow Agent shall take no further action until the dispute
between the parties has been resolved pursuant to either clause
(a) or (b) above. Further Escrow Agent shall have the right at
all times to pay all sums held by it (i) to the appropriate party
under the terms hereof, or (ii) into any court of competent
jurisdiction after a dispute between or among the parties hereto
has arisen, whereupon Escrow Agent's obligations hereunder shall
terminate. Seller and Purchaser jointly and severally agree to
indemnify and hold harmless said Escrow Agent from any and all
costs, damages and expenses, including reasonable attorneys'
fees, that said Escrow Agent may incur in its compliance of and
in good faith with the terms of this agreement; provided,
however, this indemnity shall not extend to any act of gross
negligence or willful malfeasance on the part of the Escrow
Agent.
<PAGE>
R-19. LIMITATION OF SELLER' S LIABILITY:
No shareholders of Seller, nor any of its respective officers,
directors, agents, employees, heirs, successors or assigns shall
have any personal liability of any kind or nature for or by
reason of any matter or thing whatsoever under, in connection
with, arising out of or in any way related to this Contract and
the transactions contemplated herein, and Purchaser hereby waives
for itself and anyone who may claim by, through or under
Purchaser any and all rights to sue or recover on account of any
such alleged personal liability.
BUYER: SELLER:
Krupp Reality Limited Partnership V
By: The Krupp Corporation
General Partner
By:
Harry Langer Peter M. Villim
Authorized Agent
<PAGE>
AGREEMENT TO PURCHASE PERSONAL PROPERTY
WHEREAS, Krupp Realty Limited Partnership v ("Krupp") is the
beneficial owner of real property commonly known as 4180 North
Drive, Chicago, Illinois; an
WHEREAS, on said property there is located a one hundred eighty-
seven (187) unit apartment building; and
WHEREAS, Krupp is the owner of personal property and chattels
located at said apartment building comprising of stoves,
refrigerators, cabinets, lighting fixtures, furniture and
furnishings; and
WHEREAS, HARRY LANGER is a Purchaser of said real estate and is
desirous of acquiring personal property located thereof.
IT IS HEREBY AGREED AS FOLLOWS;
1. Simultaneously with the closing of 4180 North Marine
Drive, Chicago, Illinois, Krupp shall convey to HARRY LANGER, by
a Warranty Bill of Sale, all personal property* which is owned by
the Krupp and located at the above described premises, including
the following;
All air conditioners; 187 refrigerators; 187 stoves;
carpeting, window treatments; chandeliers; light fixtures;
electrical and plumbing fixtures.
2. Harry Langer shall pay three hundred thousand
($331,500.00) by immediately available funds via wire transfer,
in consideration of the above.
3. In the event that if, for any reason whatsoever, Harry
Langer fails to purchase and close on the above-described
premises, this, Contract shall be null and void.
Dated this 9th day of May, 1995.
Krupp Realty Limited Partnership V
By: The Krupp Corporation,
General Partner
Harry Langer Peter M. Villim
Authorized Agent
*in "as-is" condition without warranty as to merchantability,
fitness or condition
