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) November 16, 1998
-----------------
PAINE WEBBER INCOME PROPERTIES SIX LIMITED PARTNERSHIP
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-13129 04-2829686
- --------------------------------------------------------------------------------
(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 SIX LIMITED PARTNERSHIP
ITEM 2 - Disposition of Assets
Hurstbourne Apartments - Louisville, Kentucky
Disposition Date - November 16, 1998
On November 16, 1998, Kentucky-Hurstbourne Associates, a joint venture in
which the Partnership has an interest, sold its operating investment property,
the Hurstbourne Apartments, located in Louisville, Kentucky, to an unrelated
party for $22.9 million. The sale generated net proceeds of approximately
$12,941,000, after the repayment of the outstanding first mortgage loan of
approximately $8,124,000, accrued interest of approximately $30,000, a
prepayment penalty of $187,000, closing proration adjustments of approximately
$380,000, closing costs of approximately $266,000 and a payment of approximately
$972,000 to the Partnership's co-venture partner for its share of the net
proceeds in accordance with the terms of the joint venture agreement. The
Partnership is expected to make a special distribution of the majority of the
net proceeds from the sale of the Hurstbourne property to the Limited Partners
by December 15, 1998. A portion of the net proceeds (approximately 30%) will be
retained and added to the Partnership's cash reserves to ensure that the
Partnership has sufficient capital resources to fund its share of potential
capital improvement expenses at its two remaining investment properties. The
Managing General Partner is currently analyzing the Partnership's potential
future capital requirements in order to determine the exact amount that the
Partnership should retain from the net sale proceeds. The Managing General
Partner also expects the Partnership's quarterly distribution rate to decline as
a result of the sale of Hurstbourne and the associated reduction in cash flow.
The distribution rate is expected to be reduced to 2.5% per annum on remaining
invested capital beginning with the distribution to be made in May 1999 for the
quarter ending March 31, 1999.
The Partnership and its co-venture partner had been exploring potential
opportunities to market the Hurstbourne Apartments for sale during calendar year
1998. During the second quarter of fiscal 1998, the Partnership and its
co-venture partner held discussions concerning potential marketing strategies.
During the third quarter of fiscal 1998, the Partnership and its co-venture
partner solicited marketing proposals from several real estate brokerage firms.
After reviewing their respective proposals and conducting interviews, the
Partnership and its co-venture partner selected a national brokerage firm that
has experience selling apartment properties in the Louisville area to market the
property for sale. Sales materials were finalized by late May 1998, and an
extensive marketing campaign began in early June 1998. The Partnership entered
into a purchase and sale agreement with the prospective buyer on October 2,
1998, and the transaction closed on November 16, 1998 as described above.
ITEM 7 - Financial Statements and Exhibits
(a) Financial Statements: None
(b) Exhibits:
(1) Purchase and Sale Agreement by and between Kentucky-Hurstbourne
Associates and NTS Development Company, dated October 2, 1998.
(2) Assignment and Assumption of Purchase and Sale Agreement by and
between NTS Development Company and Hurstbourne Realty Holding
Company, dated October 30, 1998.
(3) Special Warranty Deed by and between Kentucky-Hurstbourne Associates
and Hurstbourne Realty Holding Company, dated November 16, 1998.
<PAGE>
FORM 8-K
CURRENT REPORT
PAINEWEBBER INCOME PROPERTIES SIX LIMITED PARTNERSHIP
(4) Assignment and Assumption of Leases and Security Deposits between
Kentucky-Hurstbourne Associates and Hurstbourne Realty Holding
Company, dated November 16, 1998.
(5) Assignment and Assumption of Contracts between
Kentucky-Hurstbourne Associates and Hurstbourne Realty Holding
Company, dated November 16, 1998.
(6) Bill of Sale from Kentucky-Hurstbourne Associates to Hurstbourne
Realty Holding Company, dated November 16, 1998.
(7) Seller's Settlement Statement between Kentucky-Hurstbourne
Associates and Hurstbourne Associates LLC, dated November 16, 1998.
<PAGE>
FORM 8-K
CURRENT REPORT
PAINE WEBBER INCOME PROPERTIES SIX 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 SIX LIMITED PARTNERSHIP
(Registrant)
By: Sixth Income Properties Fund, Inc.
By: /s/ Walter V. Arnold
--------------------
Walter V. Arnold
Senior Vice President and
Chief Financial Officer
Date: November 30, 1998
<PAGE>
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
KENTUCKY-HURSTBOURNE ASSOCIATES (SELLER)
AND
NTS DEVELOPMENT COMPANY (BUYER)
THE HURSTBOURNE APARTMENTS
HURSTBOURNE, KENTUCKY
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1..................................................................1
DEFINITIONS..........................................................1
ARTICLE 2..................................................................4
PURCHASE AND SALE....................................................4
ARTICLE 3..................................................................4
PURCHASE PRICE; DEPOSIT; ADJUSTMENTS.................................4
ARTICLE 4..................................................................7
PRECLOSING OPERATION.................................................7
ARTICLE 5..................................................................8
ACCESS, INSPECTION, DILIGENCE........................................8
ARTICLE 6..................................................................13
TITLE AND SURVEY.....................................................13
ARTICLE 7..................................................................14
CONDITIONS PRECEDENT AND CLOSING.....................................14
ARTICLE 8..................................................................18
CASUALTY AND CONDEMNATION............................................18
ARTICLE 9..................................................................19
BROKERAGE COMMISSIONS................................................19
ARTICLE 10.................................................................19
DEFAULT, TERMINATION AND REMEDIES....................................19
ARTICLE 11.................................................................20
REPRESENTATIONS AND WARRANTIES.......................................20
ARTICLE 12.................................................................26
MISCELLANEOUS........................................................26
ARTICLE 13.................................................................30
IRS FORM 1099-S DESIGNATION..........................................30
<PAGE>
LIST OF EXHIBITS
EXHIBIT A - THE LAND
EXHIBIT B - PERSONAL PROPERTY
EXHIBIT C - PROPERTY CONTRACTS
EXHIBIT D - EARNEST MONEY ESCROW INSTRUCTIONS
EXHIBIT E - RENT ROLL
EXHIBIT F - FORM OF ESCROW CLOSING INSTRUCTIONS
EXHIBIT G - LEAD-BASED PAINT DISCLOSURE
EXHIBIT H - NOTICES OF VIOLATIONS
EXHIBIT I - FORM OF POST-CLOSING ESCROW AGREEMENT
<PAGE>
PURCHASE AND SALE AGREEMENT
Hurstbourne Apartments
THIS PURCHASE AND SALE AGREEMENT (this Agreement) is entered into as of
the 2nd day of October, 1998 by and between Seller and Buyer, upon the following
terms and conditions:
WHEREAS, Seller desires to sell and Buyer desires to purchase, the
Property (hereinafter defined) on the terms and conditions hereinafter set
forth;
NOW THEREFORE, in consideration of the mutual undertakings, covenants and
agreements contained herein, and other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1
DEFINITIONS
References in this Agreement to the following terms shall have the
following meanings:
Buyer: NTS Development Company, a Kentucky corporation
- ------
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
- ---------------
Hazardous
Substances: Any substance which is or contains: (i) any
- ---------- hazardous substance as now or hereafter defined in Section
101(14) of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended (42 U.S.C.
Section 9601 et seq.) or any regulations promulgated under
CERCLA; (ii) any hazardous waste as now or hereafter defined
in the Recourse Conservation and Recovery Act (42 U.S.C.
Section 6901 et seq.) or regulations promulgated under RCRA;
(iii) any substance regulated by the Toxic Substances Control
Act (15 U.S.C. Section 2601 et. seq.); (iv) gasoline, diesel
fuel or other petroleum hydrocarbons; (v) asbestos and
asbestos containing materials, in any form, whether friable or
nonfriable; (vi) polychlorinated biphenyls; (vii) radon gas;
and (viii) any additional substances or materials which are
now or hereafter classified or considered to be hazardous or
toxic under Environmental Requirements or the common law, or
any other applicable law related to the Property. Hazardous
Materials shall include, without limitation, any substance,
the presence of which on the Real Property: (A) requires
reporting, investigation or remediation under Environmental
Requirements; (B) causes or threatens to cause a nuisance on
the Real Property or adjacent property or poses or threatens
to pose a hazard to the health or safety of persons on the
Real Property or adjacent property; or (C) if emanated or
migrated from the Real Property, could constitute a trespass.
Improvements: All buildings, structures and other improvements
- ------------ situated upon the Land and all fixtures, systems and
facilities owned by Seller and located on the Land.
Intangible
Property: All of Seller's right, 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 (i)
all 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 plans and specifications and (iv) the name
Hurstbourne Apartments, 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, licenses
- ------- and other occupancy agreements, and any guarantees thereof,
covering any portion of the Land or Improvements.
Personal
Property: All furniture, carpeting, appliances, equipment,
- -------- machinery, inventories, supplies, signs and other tangible
personal property of every kind and nature, if any, owned by
Seller and installed, located at and used in connection with
the ownership, occupation and operation of the Real Property,
including, without limitation, the Personal Property listed on
Exhibit B attached hereto. Personal Property specifically
excludes: (i) any items of personal property owned by tenants
at or on the Real Property, and (ii) any items of personal
property owned by third parties and leased to Seller.
Property: The Real Property, the Personal Property, the Leases, the
- -------- Tenant Deposits, the Intangible Property and the Property
Contracts known as Hurstbourne Apartments, located in
Hurstbourne, Kentucky.
Property
Contracts: All of Seller's rights, if any, in the contracts
- -------- listed on Exhibit C attached hereto, being all service, supply
and equipment rental, management, operating and leasing
contracts affecting the Property, to the extent that (i)
Seller is entitled to transfer the same to Buyer, and (ii)
Buyer does not elect to have Seller terminate them in
accordance with Section 4.3 below.
Purchase Price: $22,900,000.00
- --------------
Real Property: The Land and the Improvements.
- -------------
Seller: Kentucky-Hurstbourne Associates, a Kentucky general
- ------ partnership
Tenant Deposits: Seller's rights to unapplied security deposits under
- --------------- the Leases.
Title Company: Commonwealth Land Title Insurance Company
- -------------
ARTICLE 2
PURCHASE AND SALE
2.1 Seller hereby agrees to sell and convey the Property to Buyer and
Buyer hereby agrees to buy the Property from Seller for the Purchase Price and
otherwise subject to the covenants, provisions, terms and conditions contained
herein.
ARTICLE 3
PURCHASE PRICE; DEPOSIT; ADJUSTMENTS
3.1 Deposit. Contemporaneously with the execution and delivery of this
Agreement (and as a condition precedent to the effectiveness of this Agreement),
Buyer shall deposit immediately available funds with the Title Company
(hereinafter the Escrow Agent) the sum of Two Hundred Twenty-Five Thousand
Dollars ($225,000.00) Dollars (the Initial Deposit) to secure Buyer's
obligations under this Agreement. Unless Buyer shall have terminated this
Agreement prior to the Diligence Date (defined below) pursuant to Section 5.2,
not later than 5:00 p.m. Eastern Standard Time on the Diligence Date, Buyer
shall deposit with the Escrow Agent an additional Two Hundred Thousand Dollars
($200,000.00) in immediately available funds (the Additional Deposit) to further
secure Buyer's obligations under this Agreement. The Escrow Agent shall hold the
Initial Deposit and the Additional Deposit in a segregated interest bearing
money market account with an FDIC insured bank reasonably acceptable to Buyer
and Seller. The Deposit and the Additional Deposit and all interest accrued on
thereon (collectively, the Escrowed Amount) shall be maintained by the Escrow
Agent in such account or accounts until the Escrow Agent is required to cause
the Escrowed Amount to be disbursed pursuant to the terms and conditions of this
Agreement and the Earnest Money Escrow Instructions attached hereto as Exhibit
D. The Escrowed Amount shall be applied to the Purchase Price if the Closing
occurs, as provided in Section 3.2(c) below.
3.2 Purchase Price. The Purchase Price, subject to adjustment as provided
herein, shall be as specified in Article 1 above and shall be paid on the
Closing Date (as hereinafter defined) in United States dollars by wire transfer
of federal funds, less the Escrowed Amount (the Cash Balance).
3.3 Tax Proration. All due and payable real estate taxes, all general and
special assessments on the Land and ad valorem taxes, if any, on the Personal
Property (based on the most recent ascertainable taxes) attributable to the
Property through the Closing Date shall be prorated and adjusted as of the
Closing Date. In no event shall Seller be charged with or be responsible for any
increase in the taxes on the Property resulting from the sale of the Property or
from any improvements made or leases entered into on or after the Closing Date.
If the tax statements for the fiscal year during which the Closing Date occurs
are not finally determined, then the tax figures for the immediately prior
fiscal year multiplied by 103% shall be used for the purposes of prorating taxes
on the Closing Date, provided that there shall be no further adjustment to be
made after the Closing Date. Any tax refunds or proceeds (including interest
thereon) on account of a favorable determination resulting from a challenge,
protest, appeal or similar proceeding relating to taxes and assessments relating
to the Property (i) for all tax periods occurring after the applicable tax
period in which the Closing Date occurs shall be retained by and paid
exclusively to Buyer, (ii) for all tax periods occurring prior to the applicable
tax period in which the Closing occurs shall be retained by and paid exclusively
to Seller and (ii) for the applicable tax period in which the Closing occurs
shall be prorated as of the Closing Date after reimbursement to Seller and
Buyer, as applicable, for all fees, costs and expenses (including reasonable
attorney's and consultants fees) incurred by Seller or Buyer, as applicable, in
connection with such proceedings such that Seller shall retain and be paid that
portion of such tax refunds or proceeds as is applicable to the portion of the
applicable tax period prior to the Closing Date and Buyer shall retain and be
paid that portion of such tax refunds or proceeds as is applicable to the
portion of the applicable tax period from and after the Closing Date. Neither
Seller nor Buyer shall settle any tax protests or proceedings in which taxes for
the tax period for which the other party is responsible are being adjudicated or
adversely affected without the consent of such party, which consent shall not be
unreasonably withheld, conditioned or delayed. After the Closing, Buyer shall be
responsible for and control any tax protests or proceedings for any period for
which taxes are adjusted between the parties under this Agreement and for any
later period. Buyer and Seller shall cooperate in pursuit of any such
proceedings and in responding to reasonable requests of the other for
information concerning the status of and otherwise relating to such proceedings;
provided, however, that neither party shall be obligated to incur any material
out-of-pocket fees, costs or expenses in responding to the requests of the
other.
3.4 Contract Proration. To the extent Property Contracts are not
terminated pursuant to Section 4.3, prepaid or past due amounts under any
Property Contracts which are assigned to Buyer at Closing shall be prorated and
adjusted as of the Closing Date.
3.5 Utility Proration. To the extent reasonably feasible, the Seller shall
cause all meters for electricity, gas, water, sewer or other public utility
usage at the Property to be read as of the day immediately preceding the Closing
Date, and the Seller shall pay all charges for such utilities which have accrued
on or prior to the Closing Date; provided, however, that if and to the extent
such charges are paid directly by tenants, no such reading or payment shall be
required. If the utility companies are unable or refuse to read meters for which
payment by the Seller is required, all charges for such utilities to the extent
unpaid shall be prorated and adjusted as of the Closing Date based on the most
recent bills therefor and no further adjustment shall be made. The Seller shall
provide notice to the Buyer within five (5) days of the Closing Date setting
forth (i) whether utility meters will be read as of the Closing Date and (ii) a
copy of the most recent bill for any utility charges which are to be prorated
and adjusted as of the Closing Date.
3.6 Income and Expense Proration. Collected rents for the then current and
any future period, security deposits which have not been previously applied by
Seller, prepaid rentals, and all expenses and other charges in connection with
the operation of the Property shall be apportioned and full value shall be
adjusted as of the Closing Date, and the net amount thereof, if in favor of
Seller, shall be added to the Purchase Price, or if in favor of Buyer, shall be
deducted from the Purchase Price. From the date hereof until Closing or earlier
termination of this Agreement, Seller shall not apply any security deposits
without the prior consent of Buyer. From and after Closing all security deposits
credited to Buyer shall thereafter be deemed transferred to Buyer and Buyer
shall assume and be solely responsible for the payments of security deposits to
tenants in accordance with the Leases and applicable law. Seller shall be
entitled to retain or if transferred to Buyer receive a credit for any utility
deposits and any deposits for third parties under any of the Property Contracts.
In addition to the foregoing, at Closing the Purchase Price shall be increased
by the amount of uncollected or past due rent; provided, however, that no
adjustment shall be made for rent which is more than one (1) month past due, and
further provided that Buyer shall be entitled to attempt to collect the amount
of any such uncollected rent which resulted in an adjustment to the Purchase
Price and all amounts so collected shall belong to Buyer. Seller shall be
entitled to attempt to collect all rents and other charges which are more than
one (1) month past due but shall not be entitled to attempt to terminate any
lease or otherwise pursue eviction proceedings in connection with such
collection efforts.
3.7 Prorations Generally. A statement of prorations and other adjustments
shall be prepared by Seller in conformity with the provisions of this Article 3
and submitted to Buyer for review and approval not less than two (2) business
days prior to the Closing Date. For purposes of making prorations, Seller shall
be deemed to be in title to the Property and entitled to the income from and
responsible for the expenses thereof, on the Closing Date.
3.8 Closing Costs.
(a) Seller shall pay: (i) its legal fees and expenses related to the
negotiation and preparation of this Agreement and all documents required
to close the transaction contemplated hereby, and (ii) 50% of the escrow
fees of the Escrow Agent.
(b) Buyer shall pay or reimburse Seller, if applicable for the
following: (i) 50% of the escrow fees of the Escrow Agent, (ii) charges to
record the deed, and evidence of Buyer's existence or authority, (iii)
Buyer's legal fees and expenses related to the negotiation of this
Agreement and all documents required to close the transaction contemplated
hereby, (iv) all costs related to the Buyer's inspection and due
diligence, including, without limitation, the cost of appraisals,
architectural, engineering, credit and environmental reports, (v) all
costs associated with title examination and preparation of a title
commitment as well as all charges and premiums for an owners title policy,
and (vi) all costs allocable to preparation of the survey.
(c) All state, county or other taxes associated with the transfer of
the property and all other closing costs shall be paid by Seller or Buyer
in accordance with the custom in the jurisdiction where the Property is
located.
ARTICLE 4
PRECLOSING OPERATION
4.1 Leases. A rent roll (the Rent Roll) containing a list of all occupants
of the Property pursuant to the Leases as of the date hereof is attached hereto
as Exhibit E. During the pendency of this Agreement, Seller may enter into
Leases with new tenants or modifications of Leases with existing tenants
substantially in accordance with Seller's existing leasing practices, provided
that in all events any new or modified Leases shall (i) be at or near market
rent, (ii) be for a term of not more than one (1) year, and (iii) on the
Seller's current standard form of lease.
4.2 Conduct of Business. At all times prior to Closing, Seller shall,
subject to the terms of this Agreement, continue (a) to conduct business with
respect to the Property in the same manner in which said business has been
heretofore conducted, (b) to insure the Property substantially as currently
insured, and (c) maintain the Property in its current condition, reasonable wear
and tear and damage by casualty excepted, including ordinary preparation for
occupancy of residential units vacated prior to Closing.
4.3 Property Contracts. Seller shall make copies of all Property Contracts
available for Buyer to review promptly after the date hereof. On or before the
Diligence Date (as defined below), unless Buyer has provided written notice to
Seller of Buyer's election to terminate this Agreement, Buyer shall provide
written notice to Seller of the Property Contracts that Buyer desires to have
terminated by Seller, and Seller will terminate the Property Contracts so
identified at or before Closing at Seller's sole cost and expense. 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 Date at Seller's sole cost and expense.
<PAGE>
ARTICLE 5
ACCESS, INSPECTION, DILIGENCE
5.1 Access/Purchasers Responsibilities/Purchasers Indemnity.
(a) From the date hereof through the Closing or earlier termination
of this Agreement, Seller agrees that Buyer and its authorized agents or
representatives shall be entitled to enter upon the Real Property during
normal business hours upon advance written notice to Seller and make such
reasonable, nondestructive investigations, studies and tests including,
without limitation, surveys and engineering studies as Buyer deems
necessary or advisable, provided, however, that Buyer shall not be
permitted to conduct physical testing without Seller's prior written
consent, which consent shall not be unreasonably withheld, conditioned or
delayed. Seller's prior written consent for physical inspections or
testing may be conditioned upon receipt of a detailed description of the
proposed physical inspection or testing, a list of contractors who will be
performing the physical inspection or testing, evidence of insurance
satisfactory to Seller, and such other information as Seller reasonably
requires in connection with such proposed inspection or testing. Seller
also agrees to make all Documents available to Buyer or Buyer's agents
during normal business hours for review and copying at Buyer's expense
upon advance written notice to Seller from the date hereof through the
Closing or earlier termination of this Agreement.
(b) Buyer agrees that in conducting any inspections, investigations
or tests of the Property and/or the Documents, Buyer and its agents and
representatives shall (i) not unreasonably interfere with the operation
and maintenance of the Property, (ii) not unreasonably disturb the tenants
under the Leases or unreasonably interfere with their use of the Property
pursuant to their respective Leases, (iii) not damage any part of the
Property or any personal property owned or held by any tenant or third
party, (iv) not injure or otherwise cause bodily harm to Seller, the
property manager, or their respective guests, agents, invitees,
contractors and employees or any tenant or their guests or invitees, (v)
maintain comprehensive general liability insurance in terms and amounts
reasonably acceptable to Seller covering any accident arising in
connection with the presence of Buyer, its agents and representatives on
the Property, and deliver a certificate of insurance verifying such
coverage to Seller prior to entry upon the Property; (vi) promptly pay
when due the costs of all tests, investigations and examinations done with
regard to the Property; (vii) not permit any liens to attach to the Real
Property by reason of the exercise of Buyer's rights hereunder, (viii)
fully restore the Property to the condition in which the same was found
before any such inspection or tests were undertaken; and (ix) not reveal
or disclose any information obtained during the due diligence period
concerning the Property and the Documents to anyone outside Buyer's
organization, except in accordance with the confidentiality standards set
forth in Section 5.5 herein.
(c) Buyer will indemnify, defend, and hold Seller and its property
manager harmless from all losses, costs, liens, claims, causes of action,
liability, damages and out-of pocket expenses, including, without
limitation, reasonable attorney's fees incurred by Seller as a result of
the entry upon or inspections, tests or investigations of the Property
conducted by or on behalf of Buyer. This indemnity obligation of Buyer
shall survive the termination of this Agreement for any reason.
(d) Buyer acknowledges and agrees that the Documents are provided to
Buyer for informational purposes only and, except to as expressly provided
herein, do not constitute representations or warranties of Seller or its
agents, employees or representatives of any kind as to the truth, accuracy
or completeness of the Documents or the source(s) thereof. Seller has not
undertaken any independent investigation as to the truth, accuracy or
completeness of the Documents, and is providing the Documents solely as an
accommodation to Buyer.
5.2 Diligence. Buyer shall complete its due diligence on or before the
date which is thirty (30) days from the date hereof (the Diligence Date).
Notwithstanding any other term or provision herein to the contrary, Buyer may
elect, in Buyer's sole discretion, by written notice to Seller, received by
Seller on or before the Diligence Date, not to proceed with this purchase, in
which event this Agreement shall terminate, the Escrow Agent shall return the
Escrowed Amount to Buyer and this Agreement shall be null and void without
recourse to either party hereto (except to the extent such recourse arises in
connection with a provision of this Agreement which is intended to survive
termination). BUYER ACKNOWLEDGES THAT, PURSUANT TO THE TERMS OF THIS AGREEMENT,
BUYER SHALL BE AFFORDED A FULL OPPORTUNITY TO INSPECT THE PROPERTY, OBSERVE ITS
PHYSICAL CHARACTERISTICS AND EXISTING CONDITIONS AND CONDUCT SUCH INVESTIGATIONS
AND STUDIES ON AND OF SAID PROPERTY AS IT DEEMS NECESSARY AND THAT, UNLESS BUYER
TERMINATES THIS AGREEMENT PURSUANT TO THIS SECTION 5.2 OR AS OTHERWISE EXPRESSLY
SET FORTH IN THIS AGREEMENT, BUYER SHALL BE DEEMED TO HAVE WAIVED ANY AND ALL
OBJECTIONS TO OR COMPLAINTS REGARDING (INCLUDING, BUT NOT LIMITED TO, FEDERAL,
STATE OR COMMON LAW BASED ACTIONS AND ANY PRIVATE RIGHT OF ACTION UNDER STATE
AND FEDERAL LAW TO WHICH THE PROPERTY IS OR MAY BE SUBJECT, INCLUDING BUT NOT
LIMITED TO, CERCLA AND RCRA) PHYSICAL CHARACTERISTICS AND EXISTING CONDITIONS,
INCLUDING, WITHOUT LIMITATION, STRUCTURAL AND GEOLOGIC CONDITIONS, SUBSURFACE
SOIL AND WATER CONDITIONS AND SOLID AND HAZARDOUS WASTE AND HAZARDOUS SUBSTANCES
ON, UNDER, ADJACENT TO OR OTHERWISE AFFECTING THE PROPERTY. BUYER FURTHER HEREBY
ASSUMES THE RISK OF CHANGES IN APPLICABLE LAWS AND REGULATIONS RELATING TO PAST,
PRESENT AND FUTURE ENVIRONMENTAL CONDITIONS ON THE PROPERTY AND THE RISK THAT
ADVERSE PHYSICAL CHARACTERISTICS AND CONDITIONS, INCLUDING, WITHOUT LIMITATION,
THE PRESENCE OF HAZARDOUS SUBSTANCES OR OTHER CONTAMINANTS, MAY NOT HAVE BEEN
REVEALED BY ITS INVESTIGATION.
5.3 Copies of Reports/Return of Documents.
(a) As additional consideration for the transaction contemplated
herein, Buyer shall promptly deliver to Seller copies of any and all
reports, tests or studies involving structural or geologic conditions,
environmental, hazardous waste or Hazardous Substances contamination of
the Property and all other materials obtained in connection with Buyer's
diligence, which reports, tests and studies shall be addressed to both
Buyer and Seller at no cost to Seller, provided, however, that Buyer shall
have no obligation to cause any such tests or studies to be performed on
the Property and shall not be required to deliver any internally generated
reports, studies, analyses or other internal work product. If such
reports, tests or studies indicate the existence of any environmental,
hazardous waste or Hazardous Substance contamination of any portion of the
Property in violation of applicable laws, Seller may terminate this
Agreement by giving written notice to Buyer within ten (10) business days
after Buyer provides Seller with copies of such reports, tests or studies.
Upon such termination, in accordance with paragraphs (b) and (c) below,
the Escrowed Amount shall be promptly returned to Buyer and neither Buyer
nor Seller shall have any further obligation or liability to the other
hereunder, except those obligations arising under provisions of this
Agreement which are expressly intended to survive termination.
(b) If this Agreement is terminated for any reason whatsoever, Buyer
shall promptly deliver to Seller all Documents delivered to Buyer or
Buyer's agents, representatives or designees by Seller or Seller's agents,
representatives or employees pursuant to this Agreement.
5.4 Confidentiality. Buyer acknowledges and agrees that any and all of the
Documents delivered or made available to Buyer by Seller or its agents,
consultants, contractors or employees are proprietary and confidential in nature
and will be delivered to Buyer solely to assist Buyer in determining the
feasibility of purchasing the Property. Further, each party hereto agrees to
maintain in confidence, and not to discuss with or to disclose to any person or
entity who is not a party to this Agreement, any material term of this Agreement
or any aspect of the transactions contemplated hereby, except as provided in
this Section. Seller may publicly disclose the existence of this Agreement
provided that the identity of Buyer is not disclosed. Buyer shall not disclose
to anyone other than its partners and financiers the Documents and/or any
information disclosed by Seller to Buyer which is not generally known by the
public regarding Seller's operations and/or the Property. Notwithstanding
anything to the contrary set forth herein, each party hereto may discuss with
and disclose to its accountants, attorney's, existing or prospective lenders,
investment bankers, underwriters, rating agencies, partners, consultants and
other advisors to the extent such parties reasonably need to know such
information and are bound by a confidentiality obligation identical in all
material respects to the one created by this Section. Additionally, each party
may discuss and disclose such matters to the extent necessary to comply with any
requirements of the Securities and Exchange Commission or in order to comply
with any law or interpretation thereof or court order. This provision shall
survive termination of this Agreement but shall terminate upon the Closing. Any
press release to be made regarding any matter which is the subject of the
confidentiality obligation created in this Section shall be subject to the
reasonable approval of Buyer and the Seller, respectively both as to timing and
content.
5.5 Buyer's Acknowledgment. BUYER ACKNOWLEDGES THAT AS OF THE DILIGENCE
DATE IT HAS HAD AN OPPORTUNITY TO CONDUCT DILIGENCE ON THE PROPERTY AND IS
ACQUIRING THE PROPERTY IN ITS CURRENT CONDITION BASED ON ITS DILIGENCE. BUYER
FURTHER ACKNOWLEDGES THAT, SUBJECT TO SELLER'S REPRESENTATIONS AND WARRANTIES
SET FORTH IN SECTION 11.2, NEITHER SELLER NOR ITS EMPLOYEES, AGENTS OR
REPRESENTATIVES HAVE MADE ANY REPRESENTATION OR WARRANTY AS TO THE CONDITION OF
THE PROPERTY OR THE PRESENCE OR ABSENCE OF ANY HAZARDOUS MATERIALS ON, IN, UNDER
OR WITHIN THE PROPERTY OR A PORTION THEREOF WHICH SURVIVE CLOSING HEREUNDER. THE
BUYER ACKNOWLEDGES AND AGREES THAT, SUBJECT TO THE TERMS OF THIS AGREEMENT, THE
PROPERTY IS TO BE CONVEYED BY THE SELLER TO THE BUYER AS IS, WITH ALL FAULTS,
AND SUBSTANTIALLY IN ITS CURRENT CONDITION. THE BUYER FURTHER ACKNOWLEDGES AND
AGREES THAT, EXCEPT AS EXPRESSLY CONTAINED HEREIN, NEITHER THE SELLER NOR ANY
AGENT, EMPLOYEE OR OTHER REPRESENTATIVE OF THE SELLER (OR PURPORTED AGENT,
EMPLOYEE OR OTHER REPRESENTATIVE OF THE SELLER) HAS MADE ANY GUARANTEE,
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED (AND THE SELLER SHALL NOT HAVE
ANY LIABILITY WHATSOEVER) AS TO THE VALUE, USES, HABITABILITY, CONDITION,
DESIGN, OPERATION, FINANCIAL CONDITION OR PROSPECTS, OR FITNESS FOR PURPOSE OR
USE OF THE PROPERTY (OR ANY PART THEREOF) OR ANY OTHER GUARANTEE, REPRESENTATION
OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY (OR ANY
PART THEREOF) OR INFORMATION SUPPLIED TO BUYER WITH RESPECT THERETO. FURTHER,
EXCEPT AS EXPRESSLY SET FORTH HEREIN, THE SELLER SHALL HAVE NO LIABILITY FOR ANY
LATENT, HIDDEN, OR PATENT DEFECT AS TO THE PROPERTY OR THE FAILURE OF THE
PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY APPLICABLE LAWS AND
REGULATIONS. IN PARTICULAR, THE BUYER ACKNOWLEDGES AND AGREES THAT ANY
INFORMATION PROVIDED TO BUYER BY SELLER WITH RESPECT TO THE PROPERTY UNDER THIS
AGREEMENT (AND ANY OTHER INFORMATION THE BUYER MAY HAVE OBTAINED REGARDING IN
ANY WAY ANY OF THE PROPERTY, INCLUDING WITHOUT LIMITATION, ITS OPERATIONS OR ITS
FINANCIAL HISTORY OR PROSPECTS FROM THE SELLER OR ITS AGENTS, EMPLOYEES OR OTHER
REPRESENTATIVES) IS DELIVERED TO THE BUYER AS A COURTESY, WITHOUT REPRESENTATION
OR WARRANTY AS TO ITS ACCURACY OR COMPLETENESS (EXCEPT AS OTHERWISE EXPRESSLY
SET FORTH HEREIN), AND NOT AS AN INDUCEMENT TO ACQUIRE THE PROPERTY; THAT
NOTHING CONTAINED IN SUCH DELIVERIES SHALL CONSTITUTE OR BE DEEMED TO BE A
GUARANTEE, REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, IN ANY REGARD AS TO
ANY OF THE PROPERTY (EXCEPT AS EXPRESSLY PROVIDED HEREIN); AND THAT THE BUYER IS
RELYING ONLY UPON THE PROVISIONS OF THIS AGREEMENT AND ITS OWN INDEPENDENT
ASSESSMENT OF THE PROPERTY AND ITS PROSPECTS IN DETERMINING WHETHER TO ACQUIRE
THE PROPERTY. THE PROVISIONS OF THIS PARAGRAPH SHALL SURVIVE CLOSING.
5.6 Buyer's Release of Seller. AS BETWEEN BUYER AND SELLER, SELLER AND ITS
PROPERTY MANAGER ARE HEREBY RELEASED FROM ALL RESPONSIBILITY AND LIABILITY
REGARDING THE CONDITION (INCLUDING THE PRESENCE IN THE SOIL, AIR, STRUCTURES AND
SURFACE AND SUBSURFACE WATERS, OF MATERIALS OR SUBSTANCES THAT HAVE BEEN OR MAY
BE IN THE FUTURE DETERMINED TO BE TOXIC, HAZARDOUS, UNDESIRABLE OR SUBJECT TO
REGULATION AND THAT MAY NEED TO BE SPECIALLY TREATED, HANDLED AND/OR REMOVED
FROM THE PROPERTY UNDER CURRENT OR FUTURE FEDERAL, STATE AND LOCAL LAWS,
REGULATIONS OR GUIDELINES), VALUATION, SALABILITY OR UTILITY OF THE PROPERTY, OR
ITS SUITABILITY FOR ANY PURPOSE WHATSOEVER. BUYER ACKNOWLEDGES THAT, EXCEPT AS
EXPRESSLY SET FORTH HEREIN, ANY INFORMATION OF ANY TYPE WHICH BUYER HAS RECEIVED
OR MAY RECEIVE FROM SELLER, ITS PROPERTY MANAGER OR THEIR RESPECTIVE AGENTS,
INCLUDING, WITHOUT LIMITATION, ANY ENVIRONMENTAL REPORTS AND SURVEYS, IS
FURNISHED ON THE EXPRESS CONDITION THAT BUYER SHALL MAKE AN INDEPENDENT
VERIFICATION OF THE ACCURACY OF SUCH INFORMATION, ALL SUCH INFORMATION BEING
FURNISHED WITHOUT ANY WARRANTY WHATSOEVER.
Notwithstanding the foregoing, nothing contained in this Agreement shall
be deemed to constitute a release of Seller from any claim or liability arising
out of fraud by Seller or an assumption by Buyer of any liability of Seller
arising or accruing prior to the Closing Date with respect to the Property.
ARTICLE 6
TITLE AND SURVEY
6.1 Title and Survey. Promptly following the execution of this Agreement,
Buyer shall obtain:
(a) A current ALTA as-built survey of the Real Property or an update
of Seller's survey (the Survey); and
(b) A commitment for an ALTA Owners Policy of Title Insurance from
the Escrow Agent (the Title Commitment). Buyer shall cause a copy of the
completed Title Commitment to be forwarded to Seller.
If the Survey or matters listed as exceptions in the Title Commitment or
title exceptions of which Buyer receives notice after receipt of the Title
Commitment but prior to Closing (New Title Exceptions) are not satisfactory to
Buyer, Buyer shall, before Closing and on or before the date that is five (5)
business days after Buyer's receipt of the Title Commitment, the Survey or
notice of any New Title Exception, as applicable, provide Seller with written
notice of such objections (the Title Objections). Seller, at its sole cost and
expense shall have the right, but not the obligation, to cure or remove any
Title Objections and shall give Buyer written notice on or prior to the later
the date that is three (3) business days after Seller's receipt of Buyer's
timely notice of Title Objections, identifying those Title Objections, if any,
that Seller agrees to use reasonable efforts to cure; provided, however, that
Seller shall not be obligated to incur any costs or expenses in excess of
$25,000 in connection with any such cure undertaken by Seller. If there are
Title Objections which Seller is unable or unwilling to cure by the Closing Date
(and such inability or unwillingness does not constitute a default hereunder),
Buyer may terminate this Agreement as provided in Section 5.2, above or waive
such objections which Seller is not willing or able to cure and proceed to
Closing. Those exceptions or title deficiencies which (i) Buyer does not object
to pursuant to this Section 6.1 or (ii) are waived by Buyer shall be the
Permitted Exceptions.
Notwithstanding the foregoing, Seller, at Seller's sole expense, shall
remove from title at Closing any and all liens voluntarily created by Seller
securing the payment of money and Seller shall remove from title, bond over or
insure against any other Title Objections which, on the face of the recorded
instrument, impose upon the owner of the Property an express obligation to pay
money not in excess of $25,000. If Seller fails to remove, bond over or insure
against any such exception as described in the preceding sentence, Buyer may, as
its sole and exclusive remedy, terminate this Agreement and obtain a return of
the Escrowed Amount.
6.2 Deed. On the Closing Date, Seller shall convey by good and sufficient
[grant] deed to Buyer good and clear record and marketable fee simple title to
all of the Real Property free and clear of all liens, encumbrances, conditions,
easements, assessments, restrictions and other conditions, except for the
following:
(a) All Leases;
(b) All zoning, building and other laws applicable to the Property;
(c) All matters which arise after the Diligence Date which are
agreed upon or consented to by Buyer;
(d) The lien, if any, for real estate taxes for current year not due
and payable prior to the Closing Date (subject to proration in accordance
with Section 3.3 herein);
(e) All matters shown on Schedule B of the Title Commitment or of
public record as of the effective date of the Title Commitment and which
Buyer has not objected to and which Seller has not agreed to cure pursuant
to Section 6.1, above;
(f) The Permitted Exceptions; and
(g) All matters, whether or not of record, to the extent caused by
Buyer or its agents, representatives or contractors.
6.3 Lease Assignment. At the Closing, Seller shall assign the Leases to
Buyer and Buyer shall assume Seller's obligations thereunder arising or accruing
from and after the Closing Date and Seller shall convey the Personal Property to
Buyer by quitclaim bill of sale.
ARTICLE 7
CONDITIONS PRECEDENT AND CLOSING
7.1 Buyer's Conditions Precedent. In addition to any other conditions
precedent in favor of Buyer as may be set forth elsewhere in this Agreement,
Buyer's obligations under this Agreement are expressly subject to the timely
fulfillment of the conditions set forth in this Section 7.1 on or before the
Closing Date, or such earlier date as is set forth below. Each condition may be
waived in whole or in part only by written notice of such waiver from Buyer to
Seller.
(a) Seller performing and complying in all material respects with
all of the terms of this Agreement to be performed and complied with by
Seller prior to or at the Closing.
(b) On the Closing Date, all of the representations of Seller set
forth in this Agreement shall continue to be true, accurate and complete
in all material respects.
Notwithstanding the foregoing, if the conditions set forth in this Section
7.1 or any other condition of Closing (other than an obligation of Buyer under
Section 7.2 below) shall not have been fulfilled on or before the Closing Date,
Seller shall have the right (in its sole discretion), exercisable by written
notice to Buyer at or before the Closing, to extend the Closing Date for a
period of up to forty-five (45) days to provide additional time for the
fulfillment of such conditions. Upon any such extension, the term Closing Date
as used herein shall mean the date set forth in such written notice from Seller.
If Buyer's conditions as set forth in this Section 7.1 have not been met as of
the Closing Date (as the same may be extended as aforesaid) then Buyer shall
have the right to terminate this Agreement by written notice to Seller, in which
event the Escrow Agent shall return the Escrowed Amount to Buyer and this
Agreement shall thereupon terminate and be of no further force or effect.
7.2 Seller's Conditions Precedent. In addition to any other conditions
precedent in favor of Seller as may be set forth elsewhere in this Agreement,
Seller's obligations under this Agreement are expressly subject to the timely
fulfillment of the conditions set forth in this Section 7.2 on or before the
Closing Date, or such earlier date as is set forth below. Each condition may be
waived in whole or part only by written notice of such waiver from Seller to
Buyer.
(a) Buyer performing and complying in all material respects with all
of the terms of this Agreement to be performed and complied with by Buyer
prior to or at the Closing, including, without limitation, payment by the
Buyer of the Purchase Price (as adjusted as otherwise provided herein);
and
(b) On the Closing Date, all of the representations of Buyer set
forth in this Agreement shall continue to be true, accurate and complete
in all material respects.
7.3 Closing Date. Subject to Seller's right to extend the Closing Date as
provided in Section 7.1 and the extension rights set forth below, the
consummation of the purchase and sale contemplated in this Agreement (the
Closing) shall occur through an escrow closing arrangement as described in
Schedule F attached hereto on the first business day seven days after the
Diligence Date (the Closing Date), at the office of the Escrow Agent or through
the escrow closing arrangements set forth in the Form of Escrow Closing
Instructions attached hereto as Exhibit F. It is agreed that time is of the
essence in this Agreement. Notwithstanding the foregoing, (i) Seller shall have
the right, in its sole discretion, to extend the Closing Date for up to seven
(7) days, by delivering written notice to Buyer no later than seven (7) days
before the then-current Closing Date, and (ii) Buyer shall have the right, in
its sole discretion, to extend the Closing Date for up to seven (7) days by
delivering written notice to Seller no later than seven (7) days before the
then-current Closing Date.
7.4 Closing Deliveries. On the Closing Date, Seller shall deliver or
cause to be delivered:
(a) A duly executed and acknowledged grant deed conveying the Land
and the Improvements to Buyer;
(b) A duly executed quitclaim bill of sale and general assignment
conveying the Personal Property and the Intangible Property to Buyer;
(c) A duly executed assignment and assumption of the Leases and
Tenant Deposits (the Assignment of Leases);
(d) A duly executed assignment and assumption of Property Contracts
being assumed (the Assignment of Contracts);
(e) A certificate or certificates of non-foreign status from Seller;
(f) Customary affidavits sufficient for the Escrow Agent to delete
any exceptions for mechanics or materialmens' liens and parties in
possession from Buyer's title policy and such other affidavits relating to
such title policy as the Escrow Agent may reasonably request;
(g) An updated Rent Roll (including a list of all delinquent and
prepaid rents) certified by the Seller as true and correct as of the
Closing Date;
(h) A Post-Closing Escrow Agreement as described in Section 11.2 and
such other instruments as Buyer or the Escrow Agent may reasonably request
to effectuate the transactions contemplated by this Agreement;
(i) A duly executed counterpart original of the closing statement
setting forth the Purchase Price, the closing adjustments and the
application of the Purchase Price as adjusted;
(j) Evidence or documents as may reasonably be required by the
Escrow Agent evidencing the status and capacity of Seller to sell the
Property and the authority of the person or persons executing the various
documents on behalf of Seller in connection with the sale of the Property;
(k) Originals, or where unavailable, certified copies of all
Property Contracts, Leases (with all amendments and modifications
thereto), operating information, permits, warranties and financial
information about the Property in Seller's possession or control relating
to the Property; and
(l) All keys to all locks on the Property and similar items, to the
extent in Seller's possession.
7.5 Buyer's Deliveries. On the Closing Date, Buyer shall deliver or cause
to be delivered at its expense each of the following to Seller:
(a) The Purchase Price for the Property, as such Purchase Price may
have been adjusted pursuant to the provisions of this Agreement and
credited for any portion of the Escrowed Amount paid to Seller, in the
manner provided for in Article 3;
(b) Evidence in form and substance reasonably satisfactory to Escrow
Agent and Seller of Buyer's authority to purchase the Property;
(c) The Assignment of Leases;
(d) The Assignment of Contracts;
(e) Such other instruments as Seller or Escrow Agent may reasonably
request to effectuate the transactions contemplated by this Agreement;
(f) A duly executed counterpart original of the closing statement
setting forth the Purchase Price, the closing adjustments and the
application of such amounts;
(g) Such evidence or documents as may reasonably be required by the
Escrow Agent evidencing the status and capacity of Buyer and the authority
of the person or persons who are executing the various documents on behalf
of Buyer in connection with the purchase of the Property;
(h) Acknowledgment by Buyer of Buyer's receipt from Seller of the
Tenant Deposits; and
(i) Executed counterparts of any other documents listed in Section
7.4 required to be signed by Buyer.
7.6 Possession. Possession of the Property shall be delivered to Buyer by
Seller at the Closing, subject only to those items listed in Section 6.2 of this
Agreement and rights arising under any Property Contracts not terminated by
Buyer pursuant to Section 4.3. Seller and Buyer covenant and agree to execute,
at Closing, a written notice of the acquisition of the Property by Buyer, for
duplication and transmittal to all tenants affected by the sale and purchase of
the Property (or otherwise in such manner as will comply with applicable law
respecting notification of tenants). Such notice shall be prepared by Buyer and
approved by Seller, shall notify the tenants of the sale and transfer and shall
contain appropriate instructions relating to the payment of future rentals, the
giving of future notices, and other matters reasonably required by Buyer or
required by law. Unless a different procedure is required by applicable law, in
which event such laws shall be controlling, Buyer agrees to transmit or
otherwise deliver such letters to the tenants promptly after the Closing.
ARTICLE 8
CASUALTY AND CONDEMNATION
8.1 Casualty. If the Improvements are materially damaged by fire or any
other casualty and are not substantially restored to the condition immediately
prior to such casualty before the Closing Date, Buyer shall have the following
elections:
(a) to purchase the Property in its then condition and pay the
Purchase Price, in which event Seller shall pay over or assign to Buyer as
the case may be, on the Closing Date, amounts recovered or recoverable by
Seller on account of any insurance as a result of such casualty, less any
amounts reasonably expended by Seller for partial restoration; or
(b) if any portion of the Improvements suffers damage in excess of
$1,500,000 from fire or any other casualty which Seller, in its sole
option, elects not to repair (or which Seller elects to repair but fails
to repair prior to the Closing Date as the same may be extended pursuant
to Section 7.1 or 7.3), to terminate this Agreement by giving notice of
termination to Seller on or before that date which is thirty (30) days
after the occurrence of the fire or other casualty or on the Closing Date,
whichever occurs first, in which event the Escrow Agent shall return the
Escrowed Amount to Buyer, this Agreement shall terminate and neither
Seller nor Buyer shall have any recourse against the other (except to the
extent such recourse arises in connection with a provision of this
Agreement which is intended to survive termination).
8.2 Condemnation. If any substantial portion of or interest in the
Property shall be taken or is in the process of being taken by exercise of the
power of eminent domain or if any governmental authority notifies Seller prior
to the Closing Date of its intent to take or acquire any portion of or interest
in the Property (each an Eminent Domain Taking), Seller shall give notice
promptly to Buyer of such event and Buyer shall have the option to terminate
this Agreement by providing notice to Seller to such effect on or before the
date which is ten (10) days from Seller's notice to Buyer of such Eminent Domain
Taking or on the Closing Date, whichever occurs first, in which event the Escrow
Agent shall return the Escrowed Amount to Buyer, this Agreement shall terminate,
and neither Seller nor Buyer shall have any recourse against the other (except
to the extent such recourse arises in connection with a provision of this
Agreement which is intended to survive termination). If Buyer does not timely
notify Seller of its election to terminate this Agreement, Buyer shall purchase
the Property and pay the Purchase Price, and Seller shall pay over or assign to
Buyer on delivery of the deed awards recovered or recoverable by Seller on
account of such Eminent Domain Taking, less any amounts reasonably expended by
Seller in obtaining such award.
ARTICLE 9
BROKERAGE COMMISSIONS
Seller and Buyer each mutually represent and warrant to the other that
they have not dealt with, and are not obligated to pay, any fees or commissions
to any broker in connection with the transaction contemplated by this Agreement
other than CB Richard Ellis, Inc. (the Broker). Seller agrees to pay all
commissions, payments and fees due to the Broker at the Closing. Buyer agrees to
indemnify, defend and hold Seller harmless from and against all loss,
liabilities, costs, damages and expenses (including reasonable attorney's fees)
arising from any claims for brokerage or finders 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 attorney's fees) arising from any claims for
brokerage or finders' fees, commissions or other similar fees, including any
claim made by the Broker, in connection with the transaction covered by this
Agreement as such claims shall be based upon alleged arrangements or agreements
made by Seller or on Seller's behalf. The covenants and agreements contained in
this Article shall survive the termination of this Agreement or the Closing of
the transaction contemplated hereunder.
ARTICLE 10
DEFAULT, TERMINATION AND REMEDIES
10.1 Seller's Default. In the event that Seller shall have failed in any
material respect adverse to Buyer as of the Closing Date to have performed any
of the covenants and agreements contained in this Agreement which are to be
performed by Seller on or before the Closing Date or Seller defaults in its
obligation to close hereunder, Buyer shall have the right either to (i)
terminate this Agreement and receive the Escrowed Amount, whereupon this
Agreement shall terminate without further recourse, or (ii) provided an action
is brought within thirty (30) days after the scheduled Closing Date as the same
may have been extended pursuant to the terms of this Agreement, seek specific
performance of Seller's obligations hereunder. Buyer hereby waives and
relinquishes any right to sue Seller for any reason whatsoever, other than (x)
to receive the return of the Escrowed Amount or (y) to seek specific performance
as provided above, and agrees that Seller shall not be liable to Buyer for any
actual, punitive, speculative, consequential or other damages for breach by
Seller prior to the Closing, except for payment of the Escrowed Amount. IN NO
EVENT SHALL SELLER, ITS DIRECT OR INDIRECT PARTNERS, SHAREHOLDERS, OWNERS OR
AFFILIATES, ANY OFFICER, DIRECTOR, EMPLOYEE OR AGENT OF THE FOREGOING, OR ANY
AFFILIATE OR CONTROLLING PERSON THEREOF, HAVE ANY LIABILITY BEYOND ITS INTEREST
IN THE PROPERTY FOR ANY CLAIM, CAUSE OF ACTION OR OTHER LIABILITY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE PROPERTY, WHETHER BASED ON COMMON LAW,
CONTRACT, STATUTE, EQUITY OR OTHERWISE. Notwithstanding the foregoing or
anything to the contrary herein, if specific performance of Seller's obligations
shall not be available to Buyer because Seller has sold the property to a third
party (other than pursuant to condemnation proceedings), Buyer shall have the
right to bring an action at law for damages, if any, equal to, but not in excess
of, the amount by which the purchase price for the Property paid to Seller by
such third party purchaser exceeds the Purchase Price stated in this Agreement
(together with all actual out-of-pocket costs and expenses incurred by Buyer in
connection with this Agreement and all actual out-of-pocket costs and expenses
incurred by Buyer in connection with such action), provided such action is
brought within thirty (30) days after the scheduled Closing Date as the same may
have been extended pursuant to the terms of this Agreement.
10.2 Buyer's Default. In the event that Buyer shall have failed in any
material respect adverse to Seller as of the Closing Date to have performed any
of the covenants and agreements contained in this Agreement which are to be
performed by Buyer on or before the Closing Date, or if Buyer defaults in its
obligation to close hereunder, Seller shall be entitled to receive the Escrowed
Amount as liquidated damages, in lieu of all other remedies available to Seller
at law or in equity for such default, and Buyer shall direct the Escrow Agent to
release the Escrowed Amount to Seller. Seller and Buyer agree that the damages
resulting to Seller as a result of such default by Buyer as of the date of this
Agreement are difficult or impossible to ascertain and the liquidated damages
set forth in the preceding sentence constitute Buyer's and Seller's reasonable
estimate of such damages. Notwithstanding the foregoing, in the event of any
termination of this Agreement, subject to Buyer's rights set forth in this
Agreement, Seller shall have all remedies available at law or in equity (other
than the right to seek consequential or punitive damages) in the event Buyer or
any party related to or affiliated with Buyer asserts any claims or rights to
the Property that would otherwise delay or prevent Seller from having clear,
indefeasible and marketable title to the Property.
ARTICLE 11
REPRESENTATIONS AND WARRANTIES
11.1 Buyer's Representations and Warranties. Buyer represents and warrants
to Seller that:
(a) Buyer is a corporation, duly organized and in good standing
under the laws of the State of Kentucky, is qualified to do business in
the State of Kentucky and has the power and authority to enter into this
Agreement and to execute and deliver this Agreement and to perform all
duties and obligations imposed upon it hereunder. As of the date of this
Agreement, Buyer has obtained all necessary corporate, partnership or
other organizational authorizations required in connection with the
execution and delivery of this Agreement. Each of the individuals
executing this Agreement on Buyer's behalf is authorized to do so. Buyer
has the financial ability to pay the Purchase Price by (i) tendering the
Cash Balance, and performing the other covenants of Buyer set forth in
this Agreement.
(b) Neither the execution nor the delivery of this Agreement, nor
the consummation of the purchase and sale transaction contemplated hereby,
nor the fulfillment of or compliance with the terms and conditions of this
Agreement conflict with or will result in the breach of any of the terms,
conditions or provisions of any agreement or instrument to which Buyer is
a party or by which Buyer or any of Buyer's assets is bound;
(c) Buyer is not in any way affiliated with Seller;
As a condition precedent to Seller's obligation to close the purchase and
sale transaction contemplated in this Agreement, Buyer's representations and
warranties contained herein must remain and be true and correct as of the
Closing Date. Prior to the Closing Date, Buyer shall notify Seller in writing of
any facts, conditions or circumstances which render any of the representations
and warranties set forth in this Section 11.1 in any way inaccurate, incomplete,
incorrect or misleading.
11.2 Sellers' Representations and Warranties. Seller represents and
warrants to Buyer that:
(a) Seller is a general partnership existing under the laws of the
State of Kentucky.
(b) Seller has full right, power and authority and is duly
authorized to enter into this Agreement, to perform each of the covenants
on its part to be performed hereunder and to execute and deliver, and to
perform its obligations under all documents required to be executed and
delivered by it pursuant to this Agreement and this Agreement constitutes
the valid and binding obligation of Seller enforceable in accordance with
its terms.
(c) Seller has directed its manager to deliver or to make available
to Buyer (x) complete copies of all Leases and (y) the Rent Roll
(including a schedule of deposits). To the knowledge of Seller: (i) the
Rent Roll is true, correct and complete in all material respects; (ii)
there are no Leases other than as set forth on the Rent Roll; (iii) unless
otherwise indicated on the Rent Roll, Seller is not in material default
under any of the Leases and all of the Leases are in full force and
effect; (iii) the Leases and Property Contracts to be delivered to Buyer
pursuant to the terms of this Agreement are true, complete and correct in
all material respects; (iv) none of the Leases have been assigned,
pledged, hypothecated or encumbered by Seller except in connection with
Seller's mortgage debt that will be paid at Closing; (v) all licenses,
approvals and permits required by applicable law for the current use and
operation of the Property have been issued; (vi) except as set forth in
Exhibit H hereto, Seller has not received any notice(s) from any
governmental or quasi-governmental authorities that the Property does not
comply with applicable law; Seller has not granted any party other than
Buyer a right or option to purchase all or any portion of the Property;
(vii) Seller is not in possession of any material non-proprietary
information relating to the Property that has not been or shall not be
made available to Buyer pursuant to this Agreement; and (viii) Seller is
not a party to any union or labor contracts that will be binding upon the
Property after the Closing.
(d) Seller has caused its property manager to deliver or to make
available copies of all Property Contracts.
(e) Seller has not been served with notice of any actions, suits, or
proceedings against or affecting the Seller or the Property that either
(i) are not covered by applicable insurance or (ii) if determined
adversely to Seller would materially affect the ownership or operation of
the Property or Seller's ability to perform its obligations under this
Agreement.
Seller reserves the right to update the representations and warranties
made by it herein. All of Seller's representations and warranties shall be
deemed to be updated by information disclosed to or obtained by Purchaser in
connection with its due diligence investigations. Prior to the Closing Date,
Seller shall notify Buyer in writing of any facts, conditions or circumstances
of which Seller has actual knowledge which render any of the representations or
warranties set forth in this Section 11.2 in any material respect inaccurate,
incomplete, incorrect or misleading. Notwithstanding any terms herein to the
contrary, in the event that any material change in Seller's representations or
warranties materially adverse to Buyer is made known to Buyer prior to the
Closing or any material adverse change in Seller's representations and
warranties is made by Seller, or if any facts, conditions or circumstances
become known to Buyer which render the substance of any of Seller's
representations or warranties (as distinguished from whether Seller had
knowledge of such facts, conditions or circumstances) in any material respect
inaccurate, incomplete, incorrect or misleading, Buyer may terminate this
Agreement and receive a refund of the Escrowed Amount by notifying Seller of
such election and the reason therefore prior to Closing. Seller's
representations and warranties shall survive the Closing until December 31, 1998
and no longer.
Notwithstanding anything to the contrary herein or in any of the
conveyance documents delivered pursuant hereto, after Closing, Seller shall not
be liable to Buyer in respect of any breach of Seller's representations or
warranties for any amounts in excess of One Hundred Thousand Dollars
($100,000.00) in the aggregate, or for any amounts less than Five Thousand
Dollars ($5,000.00) in the aggregate, and Buyer hereby waives any and all claims
it may have to such recoveries in excess of, or less than, the foregoing
amounts. Without limiting the foregoing, any claim of Buyer for recovery from
Seller arising for breach of Seller's representations and warranties shall be
brought by Buyer, if at all, on or before December 31, 1998, and Buyer hereby
waives any right to any claim or action for recovery not commenced within such
time period. At Closing, Seller shall deposit with Escrow Agent the sum of One
Hundred Thousand Dollars ($100,000) the Post-Closing Deposit to be held in
escrow pursuant to a Post-Closing Escrow Agreement substantially in the form
attached hereto as Exhibit I and otherwise mutually satisfactory to Buyer and
Seller. The Escrow Agent shall hold the Post-Closing Deposit in a segregated
interest bearing money market account with an FDIC insured bank reasonably
acceptable to Buyer and Seller. The Post-Closing Deposit and all interest
accrued on thereon (collectively, the Post-Closing Escrowed Amount) shall be
maintained by the Escrow Agent in such account or accounts until the Escrow
Agent is required to cause the Post-Closing Escrowed Amount to be disbursed
pursuant to the terms and conditions of this Agreement and the Post-Closing
Escrow Agreement. The provisions of this Section 11.2 shall survive the Closing.
11.3 Seller; Seller's Knowledge. Whenever a representation is made to
Seller's knowledge, or a term of similar import, the accuracy of such
representation shall be based solely on the actual knowledge of Rock D'Errico,
without independent investigation or inquiry except for inquiry of Seller's
property manager for the Property. Mr. D'Errico is the employee of Seller's
partner who has 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.
11.4 Property Conveyed "AS IS". (a) NOTWITHSTANDING ANYTHING CONTAINED
HEREIN TO THE CONTRARY, IT IS UNDERSTOOD AND AGREED THAT, EXCEPT AS EXPRESSLY
SET FORTH HEREIN, SELLER AND ITS PROPERTY MANAGER HAVE NOT MADE AND ARE NOT NOW
MAKING, AND THEY SPECIFICALLY DISCLAIM, ANY OTHER WARRANTIES, REPRESENTATIONS OR
GUARANTIES OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST,
PRESENT OR FUTURE, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO,
WARRANTIES, REPRESENTATIONS OR GUARANTIES AS TO (I) MATTERS OF TITLE (OTHER THAN
SELLER'S WARRANTY OF TITLE SET FORTH IN THE DEED (HEREINAFTER DEFINED) TO BE
DELIVERED AT CLOSING), (II) ENVIRONMENTAL MATTERS RELATING TO THE PROPERTY OR
ANY PORTION THEREOF, (III) GEOLOGICAL CONDITIONS, INCLUDING, WITHOUT LIMITATION,
SUBSIDENCE, SUBSURFACE CONDITIONS, WATER TABLE, UNDERGROUND WATER RESERVOIRS,
LIMITATIONS REGARDING THE WITHDRAWAL OF WATER, AND EARTHQUAKE FAULTS AND THE
RESULTING DAMAGE OF PAST AND/OR FUTURE EARTHQUAKES, (IV) WHETHER, AND TO THE
EXTENT TO WHICH THE PROPERTY OR ANY PORTION THEREOF IS AFFECTED BY ANY STREAM
(SURFACE OR UNDERGROUND), BODY OF WATER, FLOOD PRONE AREA, FLOOD PLAIN, FLOODWAY
OR SPECIAL FLOOD HAZARD, (V) DRAINAGE, (VI) SOIL CONDITIONS, INCLUDING THE
EXISTENCE OF INSTABILITY, PAST SOLID REPAIRS, SOIL ADDITIONS OR CONDITIONS OF
SOIL FILL, OR SUSCEPTIBILITY TO LANDSLIDES, OR THE SUFFICIENCY OF ANY
UNDERSHORING, (VII) ZONING TO WHICH THE PROPERTY OR ANY PORTION THEREOF MAY BE
SUBJECT, (VIII) THE AVAILABILITY OF ANY UTILITIES TO THE PROPERTY OR ANY PORTION
THEREOF INCLUDING, WITHOUT LIMITATION, WATER, SEWAGE, GAS AND ELECTRIC, (IX)
USAGES OF ADJOINING PROPERTY, (X) ACCESS TO THE PROPERTY OR ANY PORTION THEREOF,
(XI) THE VALUE, COMPLIANCE WITH THE PLANS AND SPECIFICATIONS, SIZE, LOCATION,
AGE, USE, DESIGN, QUALITY, DESCRIPTION, SUITABILITY, STRUCTURAL INTEGRITY,
OPERATION, TITLE TO, OR PHYSICAL OR FINANCIAL CONDITION OF THE PROPERTY OR ANY
PORTION THEREOF, OR ANY INCOME, EXPENSES, CHARGES, LIENS, ENCUMBRANCES, RIGHTS
OR CLAIMS ON OR AFFECTING OR PERTAINING TO THE PROPERTY OR ANY PART THEREOF, OR
ANY INCOME, EXPENSES, CHARGES, LIENS, ENCUMBRANCES, RIGHTS OR CLAIMS ON OR
AFFECTING OR PERTAINING TO THE PROPERTY OR ANY PART THEREOF, (XII) THE PRESENCE
OF HAZARDOUS SUBSTANCES IN OR ON, UNDER OR IN THE VICINITY OF THE PROPERTY,
(XIII) THE CONDITION OR USE OF THE PROPERTY OR COMPLIANCE OF THE PROPERTY WITH
ANY OR ALL PAST, PRESENT OR FUTURE FEDERAL, STATE OR LOCAL ORDINANCES, RULES,
REGULATIONS OR LAWS, BUILDING, FIRE OR ZONING ORDINANCES, CODES OR OTHER SIMILAR
LAWS, (XIV) THE EXISTENCE OR NON-EXISTENCE OF UNDERGROUND STORAGE TANKS, (XV)
ANY OTHER MATTER AFFECTING THE STABILITY OR INTEGRITY OF THE REAL PROPERTY,
(XVI) THE POTENTIAL FOR FURTHER DEVELOPMENT OF THE PROPERTY, (XVII) THE
EXISTENCE OF VESTED LAND USE, ZONING OR BUILDING ENTITLEMENTS AFFECTING THE
PROPERTY, (XVIII) THE MERCHANTABILITY OF THE PROPERTY OR FITNESS OF THAT
PROPERTY FOR ANY PARTICULAR PURPOSE (BUYER AFFIRMING THAT BUYER HAS NOT RELIED
ON SELLER'S OR ITS PROPERTY MANAGERS SKILL OR JUDGMENT TO SELECT OR FURNISH THE
PROPERTY FOR ANY PARTICULAR PURPOSE, AND THAT SELLER MAKES NO WARRANTY THAT THE
PROPERTY IS FIT FOR ANY PARTICULAR PURPOSE), OR (XIX) TAX CONSEQUENCES.
(b) BUYER HAS NOT RELIED UPON AND WILL NOT RELY UPON, EITHER
DIRECTLY OR INDIRECTLY, ANY REPRESENTATION OR WARRANTY OF SELLER OR ITS PROPERTY
MANAGER OR ANY OF THEIR RESPECTIVE AGENTS, EXPECT AS EXPRESSLY SET FORTH HEREIN,
AND ACKNOWLEDGES THAT NO OTHER SUCH REPRESENTATIONS HAVE BEEN MADE. BUYER
REPRESENTS THAT IT IS A KNOWLEDGEABLE, EXPERIENCED AND SOPHISTICATED BUYER OF
REAL ESTATE AND THAT IT IS RELYING SOLELY ON ITS OWN EXPERTISE AND THAT OF
BUYER'S CONSULTANTS IN PURCHASING THE PROPERTY. BUYER WILL CONDUCT SUCH
INSPECTIONS AND INVESTIGATIONS OF THE PROPERTY AS BUYER DEEMS NECESSARY,
INCLUDING, BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS
THEREOF, AND SHALL RELY UPON SAME. EXCEPT AS EXPRESSLY PROVIDED HEREIN, UPON
CLOSING, BUYER SHALL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING, BUT NOT
LIMITED TO, ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN
REVEALED BY BUYER'S INSPECTIONS AND INVESTIGATIONS. BUYER ACKNOWLEDGES AND
AGREES THAT UPON CLOSING, SELLER SHALL SELL AND CONVEY TO BUYER AND BUYER SHALL
ACCEPT THE PROPERTY AS IS, WHERE IS, WITH ALL FAULTS. BUYER FURTHER ACKNOWLEDGES
AND AGREES THAT THERE ARE NO ORAL AGREEMENTS, WARRANTIES OR REPRESENTATIONS
(EXCEPT AS EXPRESSLY SET FORTH HEREIN), COLLATERAL TO OR AFFECTING THE PROPERTY
BY SELLER, ANY AGENT OF SELLER OR ANY THIRD PARTY. THE TERMS AND CONDITIONS OF
THIS SECTION 11.4(B) SHALL EXPRESSLY SURVIVE THE CLOSING, NOT MERGE WITH THE
PROVISIONS OF ANY CLOSING DOCUMENTS . SELLER IS NOT LIABLE OR BOUND IN ANY
MANNER BY ANY ORAL OR WRITTEN STATEMENTS, REPRESENTATIONS, OR INFORMATION
PERTAINING TO THE PROPERTY FURNISHED BY ANY REAL ESTATE BROKER, AGENT, EMPLOYEE,
SERVANT OR OTHER PERSON, UNLESS THE SAME ARE SPECIFICALLY SET FORTH OR REFERRED
TO HEREIN. BUYER ACKNOWLEDGES THAT THE PURCHASE PRICE REFLECTS THE AS IS NATURE
OF THIS SALE AND ANY FAULTS, LIABILITIES, DEFECTS OR OTHER ADVERSE MATTERS THAT
MAY BE ASSOCIATED WITH THE PROPERTY. BUYER HAS FULLY REVIEWED THE DISCLAIMERS
AND WAIVERS SET FORTH IN THIS AGREEMENT WITH ITS COUNSEL AND UNDERSTANDS THE
SIGNIFICANCE AND EFFECT THEREOF.
--------------
Buyer's Initials
<PAGE>
ARTICLE 12
MISCELLANEOUSMISCELLANEOUSMISCELLANEOUS
12.1 Successors and Assigns. Without the prior written consent of Seller,
Buyer shall not, directly or indirectly, assign this Agreement or any of its
rights hereunder. Any attempted assignment in violation hereof shall, at the
election of Seller in its sole discretion, be of no force or effect and shall
constitute a default by Buyer. Notwithstanding the foregoing, Buyer shall be
entitled to assign its rights hereunder to (i) J.P. Morgan Investment
Management, Inc. (Morgan), (ii) any affiliate of Morgan, or (iii) a pension fund
or a collective investment fund containing pension funds or separate accounts
for which Morgan (or one of its affiliates) acts as trustee, agent or investment
advisor. Buyer shall give written notice of such assignment to Seller, together
with any reasonable evidence of that the proposed assignee is a permitted
assignee hereunder requested by Seller, a minimum of three (3) days prior to
Closing. No assignment shall release Buyer from its obligations under this
Agreement unless the assignee is an assignee described in clause (i), (ii) or
(iii) above and such assignee affirmatively assumes in writing all of the
obligations of Buyer hereunder.
12.2 Notices. Except as otherwise specifically provided herein, any notice
required or permitted to be delivered under this Agreement shall be in writing
and shall be deemed given (i) when delivered or refused if sent by hand during
regular business hours, (ii) when successfully sent by facsimile transmission,
(iii) three (3) days after being sent by United States Postal Service,
registered or certified mail, postage prepaid, return receipt requested, or (iv)
on the next business day when sent by a reputable overnight express mail service
that provides tracing and proof of receipt or refusal of items mailed, addressed
to Seller or Buyer, as the case may be, at the address or addresses set forth
below or such other addresses as the parties may designate in a notice similarly
sent. Any notice given by a party to Escrow Agent shall be simultaneously given
to the other party. Any notice given by a party to the other party relating to
its entitlement to the Escrowed Amount shall be simultaneously given to the
Escrow Agent.
(1) If to Seller:
PaineWebber Income Properties Six Limited Partnership
c/o Paine Webber Properties Incorporated
265 Franklin Street - 15th Floor
Boston, MA 02110
Facsimile: 617/ 478-4725
Attn: Rock D'Errico, Vice President
and
Hurstbourne Apartments Company, Ltd.
c/o Paragon Group
1401 South Brentwood Boulevard, Suite 675
St. Louis, Missouri 63144
Facsimile: 314/963-9715
Attn: Lewis A. Levey, Managing General Partner
with a copy to:
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109
Facsimile: 617/227-8591
Attn: Andrew C. Sucoff, Esq.
(2) If to Buyer:
NTS Development Company
10172 Linn Station Road
Louisville, Kentucky 40223
Facsimile: 502/426-4994
Attn: Brian F. Lavin
and to:
J.P. Morgan Investment Management, Inc.
522 Fifth Avenue
New York, New York
Facsimile: 212/837-2604
Attn: Daniel Volpano
with a copy to:
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, NY 10038
Facsimile: 212/806-6006
Attn: Brian Diamond, Esq.
(3) If to the Escrow Agent:
Commonwealth Land Title Insurance Company
2200 Citizens Plaza
Louisville, Kentucky 40202
Facsimile: 502/584-6518
Attn: Alan O. Bryant, Esq.
12.3 Construction. Words of any gender used in this Agreement shall be
held and construed to include any other gender, and words of a singular number
shall be held to include the plural and vice versa, unless the context requires
otherwise.
12.4 Captions. The captions used in connection with the Articles of this
Agreement are for convenience only and shall not be deemed to extend, limit or
otherwise define or construe the meaning of the language of this Agreement.
12.5 No Other Parties. Nothing in this Agreement, express or implied, is
intended to confer upon any person, other than the parties hereto and their
respective successors and assigns, any rights or remedies under or by reason of
this Agreement.
12.6 Amendments. This Agreement may be amended only by a written
instrument executed by Seller and Buyer (or Buyer's assignee or transferee).
12.7 Severability. If any provision of this Agreement or application to
any party or circumstance shall be determined by any court of competent
jurisdiction to be invalid and unenforceable to any extent, the remainder of
this Agreement or the application of such provision to such person or
circumstances, other than those as to which it is so determined invalid or
unenforceable, shall not be affected thereby, and each provision hereof shall be
valid and shall be enforced to the fullest extent permitted by law.
12.8 Applicable Law. This Agreement shall be construed under and in
accordance with the laws of state in which the Property is located.
12.9 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be an original but such counterparts together
shall constitute one and the same instrument notwithstanding that both Buyer and
Seller are not signatory to the same counterpart.
12.10 Time of the Essence. Time is expressly declared to be of the essence
of this Agreement, provided, however that in the event any date hereunder falls
on a Saturday, Sunday or legal holiday, the date applicable shall be the next
business day.
12.11 No Personal Liability. Except with respect to and to the extent of
(i) Buyer's remedies in the event that Seller has sold the Property to a third
party in breach of its obligations hereunder as described in Section 10.1, and
(ii) Buyer's right to seek recovery of the Escrowed Amount or the Post-Closing
Escrowed Amount, the obligations of Seller hereunder shall be binding only on
the Property and neither Buyer nor anyone claiming by, through or under Buyer
shall be entitled to obtain any judgment extending liability beyond the Property
or creating personal liability on the part of the partners of the Seller or of
the officers, directors, shareholders, advisors or agents of Seller or Seller's
partners or any of their successors.
12.12 No Recordation. Without the prior written consent of Seller, there
shall be no recordation of either this Agreement or any memorandum hereof, or
any affidavit pertaining hereto, and any such recordation of this Agreement or
memorandum hereto by Purchaser without the prior written consent of Seller shall
constitute a default hereunder by Buyer, whereupon this Agreement shall, at the
option of Seller, terminate and be of no further force and effect. Upon
termination, the Escrowed Amount shall be immediately delivered to Seller,
whereupon the parties shall have no further duties or obligations to one another
except as otherwise specifically provided herein.
12.13 Waiver. The excuse or waiver of the performance by a party of any
obligation of the other party under this Agreement shall only be effective if
evidenced by a written statement signed by the party so excusing or waiving. No
delay in exercising any right or remedy shall constitute a waiver thereof, and
no waiver by Seller or Buyer of the breach of any covenant of this Agreement
shall be construed as a waiver of any preceding or succeeding breach of the same
or any other covenant or condition of this Agreement.
12.14 Binding On Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
12.15 Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the transactions contemplated herein,
and it supersedes all prior discussions, understandings or agreements between
the parties. All Exhibits and Schedules attached hereto are a part of this
Agreement and are incorporated herein by reference.
12.16 Construction of Agreement. This Agreement shall not be construed
more strictly against one party than against the other merely by virtue of the
fact that it may have been prepared primarily by counsel for one of the parties,
it being recognized that both Buyer and Seller have contributed substantially
and materially to the preparation of this Agreement.
12.17 Further Instruments. Each party, promptly upon the request of the
other, shall execute and have acknowledged and delivered to the other or to
Escrow Agent, as may be appropriate, any and all further instruments reasonably
requested or appropriate to evidence or give effect to the provisions of this
Agreement and which are consistent with the provisions of this Agreement.
12.18 Buyer Represented by Counsel. Buyer hereby represents and warrants
to Seller that (i) Buyer is not in a significantly disparate bargaining position
in relation to Seller, (ii) Buyer is represented by legal counsel in connection
with the transaction contemplated by this Agreement, and (iii) Buyer is buying
the Property for business, commercial, investment or other similar purpose and
not for use as Buyer's residence.
12.19 Preparation of Documents. All of the documents to be executed at the
Closing shall be in the form prepared to the reasonable satisfaction of Seller's
and Buyer's counsel and delivered to Buyer on or before five (5) days prior to
the Closing Date, provided that the failure to timely deliver such documents
shall not constitute a default by Seller hereunder.
ARTICLE 13
IRS FORM 1099-S DESIGNATION
In order to comply with information reporting requirements of Section
6045(e) of the Internal Revenue Code of 1986, as amended, and the Treasury
Regulations thereunder, the parties agree (1) to execute an IRS Form 1099-S
Designation Agreement in the form attached hereto as Schedule D at or prior to
the Closing to designate the Escrow Agent (the Designee) as the party who shall
be responsible for reporting the contemplated sale of the Property to the
Internal Revenue Service (the IRS) on IRS Form 1099-S; (2) to provide the
Designee with the information necessary to complete Form 1099-S; (3) that the
Designee shall not be liable for the actions taken under this Agreement, or for
the consequences of those actions, except as they may be the result of gross
negligence or willful misconduct on the part of the Designee; and (4) that the
Designee shall be indemnified by the parties for any costs or expenses incurred
as a result of the actions taken hereunder, except as they may be the result of
gross negligence or willful misconduct on the part of the Designee. The Designee
shall provide all parties to this transaction with copies of the IRS Forms
1099-S filed with the IRS and with any other documents used to complete IRS Form
1099-S.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first set forth above.
SELLER:
KENTUCKY-HURSTBOURNE ASSOCIATES
By: PaineWebber Income Properties Six Limited
Partnership, general partner
By: Sixth Income Properties Fund, Inc., its
managing general partner
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
and
By: Hurstbourne Apartments Company, Ltd., general
partner
By: /s/ Lewis A. Levey
------------------
Name: Lewis A. Levey
Title: President
BUYER:
NTS DEVELOPMENT COMPANY
By: /s/ Brian F. Lavin
------------------
Brian F. Lavin,
Executive Vice President
<PAGE>
ASSIGNMENT AND ASSUMPTION OF PURCHASE AND SALE AGREEMENT
ASSIGNMENT AND ASSUMPTION OF PURCHASE AND SALE AGREEMENT (this "Assignment"),
made as of the 30th date of October, 1998, by and between NTS DEVELOPMENT
COMPANY, a Kentucky corporation, having an office at 10172 Linn Station Road,
Louisville, Kentucky 40223 (the "Assignor") and HURSTBOURNE REALTY HOLDING
COMPANY, having an office c/o J.P. Morgan Investment Management Inc., 522 fifth
Avenue, New York, New York 10036 (the "Assignee").
W I T N E S S E T H :
WHEREAS, the Assignor, as buyer, has entered into that certain agreement
captioned Purchase and Sale agreement dated October 2, 1998 (the "Contract"),
with Kentucky-Hurstbourne associates ("Seller"), as seller, to purchase from
Seller certain real property and improvements constructed or to be constructed
thereon, personalty, fixtures and other privileges, rights, interests and
appurtenances thereto appertaining (the "Premises"), all of which is located in
the city of Hurstbourne, county of Jefferson, State of Kentucky, commonly know
as The Hurstbourne Apartments, and as more fully described in the Contract, a
true and complete copy of which is annexed hereto and made a part hereof as
Exhibit A;
WHEREAS, Assignor has deposited with Commonwealth Land Title Insurance
Company, as escrow agent ("Escrow Agent"), the sum of Two Hundred and twenty
five Thousand and 00/100 Dollars ($225,000) "the "Initial Deposit") on account
of the purchase price of the Premises under the Contract; and
WHEREAS, Assignee desires to acquire all of Assignor's right, title and
interest in and to the Contract and the Initial Deposit and assignor has agreed
to assign the contract and the Initial deposit to Assignee, subject to and in
accordance with the provisions hereinafter contained.
NOW, THEREFORE, in consideration of the foregoing and for such other good and
valuable consideration, the receipt and legal sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Assignor represents and warrants that the Contract is in full force and
effect and has not been amended or modified.
2. Assignor hereby assigns unto the assignee, its successors and assigns
forever, all of the Assignor's right, title and interest as buyer in and to the
Contract and the Initial Deposit, together with all claims and demands of every
kind and nature which the Assignor may now or may hereafter have or be entitled
to on account of the Contract or otherwise against Seller or the Escrow Agent.
Assignee hereby assumes and agrees to perform all of the obligations of the
buyer under the Contract.
3. Assignee agrees to pay to Assignor, in consideration of the assignment
of Assignor's rights under the Contract, the sum of $225,000 within two (2)
business days following the date hereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly signed this Agreement as
of the day and date first above written.
ASSIGNOR:
NTS DEVELOPMENT COMPANY
By: /s/ Brian F. Lavin
--------------------
Name: Brian F. Lavin
Title: EVP
ASSIGNEE:
HURSTBOURNE REALTY HOLDING COMPANY
By: /s/ Daniel Volpano
------------------
Name: Daniel Volpano
Title: Vice President
<PAGE>
SPECIAL WARRANTY DEED
This DEED made this 16th day of November, 1998, by and between
KENTUCKY-HURSTBOURNE ASSOCIATES, a Kentucky general partnership (Grantor) with
an address c/o PaineWebber Properties, 265 Franklin Street, 16th Floor, Boston,
Massachusetts 02110 and HURSTBOURNE REALTY HOLDING COMPANY, a Delaware
corporation (Grantee) with an address c/o J.P. Morgan Investment Management,
Inc., 522 Fifth Avenue, New York, New York.
WITNESSETH:
That for valuable consideration in the total amount of THIRTEEN MILLION TWO
HUNDRED THOUSAND DOLLARS ($13,200,000.00) paid in cash, the receipt of which is
hereby acknowledged, Grantor does hereby bargain, grant, sell and convey, with
covenant of Special Warranty, unto Grantee in fee simple the real estate
situated in Jefferson County, Kentucky, described on Exhibit A attached hereto
and made a part hereof.
Subject to any easements, restrictions and stipulations of record. Taxes due and
payable in 1998 have been prorated between Grantor and Grantee and the payment
thereof assumed by Grantee.
For purposes of KRS 382.135, Grantor and Grantee, by execution of this Deed,
hereby certify that the above-stated consideration in the amount of
$13,200,000.00, is the true, correct and full consideration paid for the
property herein conveyed.
In testimony whereof, witness the signature of Grantor the date and year first
above written.
GRANTOR:
KENTUCKY-HURSTBOURNE ASSOCIATES
By: PaineWebber Income Properties Six Limited
Partnership, general partner
By: Sixth Income Properties Fund, Inc.,
its managing general partner
By: /s/ Rock M. D'Errico
---------------------
Rock M. D'Errico, Vice President
and
By: Hurstbourne Apartments Company, Ltd.,
general partner
By: /s/ Lewis A. Levey
------------------
Name: Lewis A. Levey
Title: President
HURSTBOURNE REALTY HOLDING COMPANY (Grantee)
By: /s/ Daniel J. Volpano
---------------------
Daniel J. Volpano,
Vice President
<PAGE>
ASSIGNMENT AND ASSUMPTION
OF LEASES AND SECURITY DEPOSITS
THIS ASSIGNMENT AND ASSUMPTION OF LEASES AND SECURITY DEPOSITS (this
Agreement) is entered into as of the 16th of November 1998, between
KENTUCKY-HURSTBOURNE ASSOCIATES, a Kentucky general partnership with an address
c/o PaineWebber Properties Incorporated, 265 Franklin Street, 15th Floor,
Boston, Massachusetts 02110 (Assignor), to and for the benefit of HURSTBOURNE
ASSOCIATES LLC, a Kentucky limited liability company, with an address of 10172
Linn Station Road, Louisville, Kentucky 40223 (Assignee).
1. Property. The Property means the real property located in Hurstbourne,
Kentucky more particularly described on Exhibit A attached hereto and
incorporated herein by reference, together with the buildings, structures and
other improvements located thereon.
2. Leases. The Leases means those leases, tenancies, rental agreements and
occupancy agreements affecting the Property which are among those described on
the Rent Roll attached to this Agreement as Exhibit B. Assignor and Assignee
acknowledge and agree that the Rent Roll attached to this Agreement also
describes leases and security deposits that are being assigned to and assumed by
Hurstbourne Realty Holding Company by an Assignment and Assumption of Leases and
Security Deposits of even date.
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 or Hurstbourne Realty Holding Company shall
receive a credit at the closing of the transaction with respect to which this
Agreement has been executed and delivered. The Security Deposits are set forth
on the Rent Roll attached to this Agreement as 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, all from and after the
date of this Agreement 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 Agreement, and
the individuals signing this Agreement on behalf of Assignor represent and
warrant to Assignee that they are fully empowered and authorized to do so.
7. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of Assignor and Assignee and their respective successors and
assigns.
8. Counterparts. This Agreement 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.
9. Governing Law. This Agreement shall be governed by the laws of the
State of Kentucky and shall be binding upon and inure to the benefit of Assignor
and Assignee and their respective successors and assigns.
DOCUMENT CONTINUES ON NEXT PAGE
<PAGE>
IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this
Agreement the day and year first above written.
ASSIGNOR: KENTUCKY-HURSTBOURNE ASSOCIATES, a Kentucky
general partnership
By: PaineWebber Income Properties Six Limited
Partnership, general partner
By: Sixth Income Properties Fund, Inc.,
its managing general partner
By: /s/ Rock M. D'Errico
--------------------
Rock M. D'Errico, Vice President
and
By: Hurstbourne Apartments Company, Ltd.,
general partner
By: /s/ Lewis A. Levey
------------------
Name: Lewis A. Levey
Title: President
ASSIGNEE: HURSTBOURNE ASSOCIATES LLC, a Kentucky limited
liability company
By: /s/ Daniel J. Volpano
---------------------
Name: Daniel J. Volpano
Title: Vice President
<PAGE>
ASSIGNMENT AND ASSUMPTION OF CONTRACTS
THIS ASSIGNMENT AND ASSUMPTION OF CONTRACTS (this Agreement) is entered
into as of the 16th day of November, 1998, between KENTUCKY-HURSTBOURNE
ASSOCIATES, a Kentucky general partnership, with an address c/o PaineWebber
Properties Incorporated, 265 Franklin Street, 15th Floor, Boston, Massachusetts
02110 (Assignor), to and for the benefit of HURSTBOURNE REALTY HOLDING COMPANY,
a Delaware corporation, with an address c/o J.P. Morgan Investment Management,
Inc., 522 Fifth Avenue, New York, New York 10036 (Assignee).
1. Property. The Property means the real property located in Hurstbourne,
Kentucky more particularly described on Exhibit A attached hereto and made apart
hereof, together with the buildings, structures and other improvements located
thereon.
2. Contracts. Contracts means all of Assignors rights, if any, in the
contracts listed on Exhibit B attached hereto, being all service, supply and
equipment rental, management, operating and leasing contracts affecting the
Property, to the extent that Assignor is entitled to transfer the same to
Assignee.
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 Contracts.
4. Assumption. Assignee hereby assumes the covenants, agreements and
obligations of Assignor under the Contracts which are applicable to the period
and required to be performed from and after the date of this Agreement, but not
otherwise.
5. Power and Authority. Assignor represents and warrants to Assignee that
it is fully empowered and authorized to execute and deliver this Agreement, and
the individuals signing this Agreement on behalf of Assignor represent and
warrant to Assignee that they are fully empowered and authorized to do so.
6. Counterparts. This Agreement 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.
7. Governing Law. This Agreement shall be governed by the laws of the
State of Kentucky and shall be binding upon and inure to the benefit of Assignor
and Assignee and their respective successors and assigns.
<PAGE>
IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this
Agreement the day and year first above written.
ASSIGNOR: KENTUCKY-HURSTBOURNE ASSOCIATES, a Kentucky
general partnership
By: PaineWebber Income Properties Six Limited
Partnership, general partner
By: Sixth Income Properties Fund, Inc.,
its managing general partner
By: /s/ Rock M. D'Errico
---------------------
Rock M. D'Errico, Vice President
and
By: Hurstbourne Apartments Company, Ltd.,
general partner
By: /s/ Lewis A. Levey
------------------
Name: Lewis A. Levey
Title: President
ASSIGNEE: HURSTBOURNE REALTY HOLDING COMPANY, a Delaware
corporation
By: /s/ Daniel J. Volpano
---------------------
Name: Daniel J. Volpano
Title: President
<PAGE>
BILL OF SALE
This Bill of Sale is made as of this 16th day of November, 1998 from
Kentucky-Hurstbourne Associates, a Kentucky general partnership, having an
office at c/o PaineWebber Properties, Incorporated, 265 Franklin Street, Boston,
Massachusetts 02110 (the Seller) to Hurstbourne Realty Holding Company, a
Delaware corporation, having an office c/o J.P. Morgan Investment Management,
Inc., 522 Fifth Avenue, New York, New York 10036 (the Purchaser).
WHEREAS, in connection with the conveyance of certain real property
located in Hurstbourne, Kentucky and more particularly described in Exhibit A
attached hereto (the Real Property), Seller is obligated to convey, transfer,
set over and assign to Purchaser all of the Sellers right, title and interest,
if any, in and to all personal property owned by Seller located at the Real
Property, including 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, those items of personal property listed on
Schedule A attached hereto that are located at the Real Property, but
specifically excluding (i) any items of personal property owned by tenants at or
on the Real Property, (ii) any items of personal property owned by third parties
and leased to Seller and (iii) any and all items of personal property that are
being conveyed to Hurstbourne Associates LLC by a Bill of Sale of even date
(collectively Personal Property);
WHEREAS, in connection with the conveyance of the Real Property, Seller is
obligated to convey, transfer, set over and assign to Purchaser all of Sellers
right, title and interest, if any, in all intangible assets of any nature
relating to the Real Property or the Personal Property, including, without
limitation, all of Sellers right, title and interest in all (i) warranties and
guaranties relating to the Real Property 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 Real Property, including the use of the name Hurstbourne
Apartments, and (iv) all plans and specifications, in each case to the extent
that Seller may legally transfer the same and to the extent the same are not
being transferred to Hurstbourne Associates LLC by a Bill of Sale of even date
(collectively, the Intangible Property);
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Seller does hereby sell, deliver,
transfer, set over and assign unto Purchaser the Personal Property and the
Intangible Property in their as is condition without express or implied warranty
of any kind or nature (except as expressly set forth in that certain Purchase
and Sale Agreement by and between Seller and NTS Development Company dated as of
October 2, 1998), to have and to hold the same unto Purchaser and the Purchasers
successors and assigns, forever.
<PAGE>
EXECUTED UNDER SEAL as of the date first written above.
KENTUCKY-HURSTBOURNE ASSOCIATES
By: PaineWebber Income Properties Six
Limited Partnership, general partner
By: Sixth Income Properties Fund,
Inc., its managing general
partner
By: /s/ Rock M. D'Errico
--------------------
Rock M. D'Errico, Vice President
By: Hurstbourne Apartments Company,
Ltd., general partner
By: /s/ Lewis A. Levey
------------------
Name: Lewis A. Levey
Title: President
<PAGE>
SELLER'S SETTLEMENT STATEMENT
PROPERTY: Hurstbourne Apartments
PURCHASER: Hurstbourne Realty Holding Company and Hurstbourne Associates LLC
SELLER: Kentucky-Hurstbourne Associates
CLOSING DATE: November 16, 1998 FINAL DRAFT PREPARED: November 16, 1998
Sales Price $22,900,000.00
Less credits to purchaser
Real estate tax proration $88,498.60
Security deposits $62,398.00
Rent and other income proration $121,574.90
Prepaid income $9,253.30
Total credits to purchaser $(281,724.80)
Plus Credits to seller:
Prepaid Expenses (contracts buyer is assuming) $1,585.60 $1,585.60
Less Seller Costs:
Transfer tax ($1 per $1,000 sale price) -
Commonwealth Title $22,900.00
Escrow/Closing Fee - (50%) -
Commonwealth Title $250.00
Sale Commission - CB Richard Ellis, Inc. $242,500.00
Legal Fee - Goodwin, Proctor & Hoar P.O.C.
Total sales Costs ($265,650.00)
Payoff Existing Mortgage - Northland
Financial Company $(8,340,568.63)
--------------
Escrow for Post Closing Expenses -
Commonwealth Title $(100,000.00)
------------
Net Cash to Seller: $13,913,642.17
==============
Seller Allocations: PW Income Prop. 6 Paragon Group
----------------- -------------
PaineWebber Income Properties Six
Preference $1,354,000.00 $0.00
Initial Capital $10,055,930.00 $684,000.00
Paragon Group Unpaid Management fees $0.00 $118,000.00
----- -----------
Subtotals $11,409,930.00 $802,000.00
Split of Remaining Sale Proceeds
(90% PWIP 6 - 10% Paragon Group) $1,531,540.95 $170,171.22
------------- -----------
Total Allocation to each Partner $12,941,470.95 $972,171.22
Total Sale Proceeds $13,913,642.17
==============
Seller: Kentucky-Hurstbourne Associates
By: PaineWebber Income Properties Six Limited Partnership, general partner
By: Sixth Income Properties Fund, Inc., its managing general partner
By: /s/ Rock M. D'Errico Date: 11/16/98
-------------------- --------
Rock M. D'Errico
and
By: Hurstbourne Apartments Company, Ltd. general partner
By: /s/ Gwenn Knight Date: 11/16/98
---------------- --------
Gwenn Knight,
Attorney - in -fact
for Lewis A. Levey
