SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: June 23, 1995
(Date of Earliest Event Reported)
KEMPER/CYMROT REAL ESTATE INVESTMENT FUND A, L.P.
(Exact name of registrant as specified in its charter)
Delaware 0-14364 No. 77-0034849
State or jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
120 S. LaSalle Street
Chicago, IL 60603
(Address of principal executive offices
including zip code)
(800) 468-4881
(Registrant's telephone number including area code)
FORM 8-K
KEMPER/CYMROT REAL ESTATE INVESTMENT FUND A, L.P.
(A Delaware Limited Partnership)
Item 2. Acquisition or Disposition of Assets.
On June 23, 1995 Kemper/Cymrot Real Estate Investment Fund A, L.P., a
Delaware limited partnership (the "Partnership") sold the Fox Ridge
Apartments (the "Property"). The Property is a 180-unit apartment complex
located in Sacramento, California.
In its efforts to maximize value for the Limited Partners, the General
Partner made the decision to sell the Property at a time when multi-family
sales prices have risen as a result of recent acquisition activity. The
General Partner believes that the sales price negotiated was favorable for a
property of this age, condition and type.<PAGE>
The Property was sold to Stonesfair Financial Corporation, a California
corporation (the "Buyer") for a total sales price of $6,527,500. The Buyer
is an independent third party. The Buyer paid the entire sales price in
cash. After combined selling and closing costs of $584,034 and payment of
the non-recourse mortgage note payable and the related fees totaling
$5,046,081, the Partnership received net cash proceeds of $897,385. These
funds are expected to be distributed to the Partners in accordance with the
terms of the Limited Partnership Agreement during 1995. The Partnership will
subsequently be dissolved under the terms of the Limited Partnership
Agreement. In accordance with generally accepted accounting principles, the
Partnership will recognize a loss on the sale of the Property of
approximately $133,000.
The Property was subject to a non-recourse mortgage note payable (the "Note")
held by Prudential Insurance Company (the "Lender"). The Note had an
interest rate of 9.5% and required monthly principal and interest payments of
$42,083 through the maturity date of July 15, 1996. The Note had certain
prepayment penalties which were paid by the Partnership upon closing of the
sales transaction. The prepayment penalties totalled $177,637.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
Not Applicable.
(b) Pro Forma Financial Information.
Filed as part of this report are an unaudited pro forma
Balance Sheet as of March 31, 1995 and unaudited pro forma
Statements of Operations for the year ended December 31, 1994
and the three months ended March 31, 1995.
(c) Exhibits.
10 Agreement to Purchase and Sell Apartment Property
Fox Ridge Apartments
10 (a) First Amendment to Agreement to Purchase and Sell
Apartment Property
10 (b) Second Amendment and Reinstatement of Agreement to
Purchase and Sell Apartment Property
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
KEMPER/CYMROT REAL ESTATE INVESTMENT FUND A, L.P.
By: Kemper/Cymrot Partners, L.P.
its General Partner
By: Kemper Real Estate, Inc.
its general partner
Date: July 10, 1995 By: /s/ John E. Neal
John E. Neal, President
(Principal Executive Officer)
Pro Forma Financial Information
The following unaudited Pro Forma Balance Sheet as of March 31, 1995 and
unaudited Pro Forma Statements of Operations for the year ended December 31,
1994 and the three months ended March 31, 1995 have been included as required
by the rules and regulations of the Securities and Exchange Commission and
are provided for comparative purposes only. The information does not purport
to be indicative of the financial position or results of operations that
would actually have resulted if the Partnership had sold the Fox Ridge
Apartments on the dates assumed for purposes of preparing the pro forma
information, or which may result in the future. The unaudited Pro Forma
Balance Sheet and unaudited Pro Forma Statements of Operations should be read
in conjunction with the historical financial statements and notes thereto
included in the Partnership's 1994 Form 10-K and the first quarter 1995 Form
10-Q.
KEMPER/CYMROT REAL ESTATE INVESTMENT FUND A, L.P.
PRO FORMA BALANCE SHEET
AS OF MARCH 31, 1995
(UNAUDITED)
The following statement sets forth the unaudited, Pro Forma Balance Sheet of
the Partnership as of March 31, 1995 as if the sale of the Fox Ridge
Apartments had occurred on that date.
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
ACTUAL ADJUSTMENTS RESULTS
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 2,083,712 $ 970,852 $3,054,564
Property held for sale, net 6,130,403 (6,130,403) ---
Other assets, net 8,000 (8,000) ---
---------- ---------- ---------
Total assets $ 8,222,115 $(5,167,551) $3,054,564
========== ========== =========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage notes payable $ 4,868,972 $(4,868,972) $ ---
Payable to affiliates 996,950 --- 996,950
Accounts payable and accrued
liabilities 65,479 (65,479) ---
Resident security deposits 57,955 (57,955) ---
---------- ---------- ---------
Total liabilities 5,989,356 (4,992,406) 996,950
Partners' capital 2,232,759 (175,145) 2,057,614
---------- ---------- ---------
Total liabilities and
partners' capital $ 8,222,115 $(5,167,551) $3,054,564
========== ========== =========
</TABLE>
KEMPER/CYMROT REAL ESTATE INVESTMENT FUND A, L.P.
PRO FORMA STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
(UNAUDITED)
The following statement sets forth the unaudited, Pro Forma Statements of
Operations of the Partnership for the year ended December 31, 1994, as if the
sale of the Fox Ridge Apartments had occurred on January 1, 1994.
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
ACTUAL ADJUSTMENTS<F1> RESULTS
<S> <C> <C> <C>
REVENUES:
Operating income $2,200,186 $(1,069,767) $1,130,419
Interest and other income 6,036 (1,417) 4,619
--------- ----------- ---------
2,206,222 (1,071,184) 1,135,038
--------- ----------- ---------
EXPENSES:
Employee compensation and benefits 230,965 (103,629) 127,336
Management and other professional fees 123,776 (54,132) 69,644
Office supplies and equipment 11,702 (6,246) 5,456
Administrative 67,744 (23,818) 43,926
Advertising and promotion 53,924 (25,435) 28,489
Insurance, licenses and other taxes 252,360 (116,239) 136,121
Utilities 224,460 (85,991) 138,469
Maintenance and repair 211,906 (108,284) 103,622
Interest 778,963 (481,106) 297,857
Depreciation 401,819 (202,421) 199,398
--------- ---------- ---------
2,357,619 (1,207,301) 1,150,318
--------- ---------- ---------
Net operating income (loss) $ (151,397) $ 136,117 $ (15,280)
========= ========== =========
Limited Partners' allocable net income
(loss) per weighted average limited
partnership interest ($500 original
capital contribution per interest;
31,180 limited partnership interests
outstanding) $ (4.61) $ 4.15 $ (0.46)
======== ========== =========
</TABLE>
Notes:
[FN]
<F1> The pro forma adjustments reflect the necessary adjustments to
restate the Partnership's revenues and expenses from continuing
operations for the year ended December 31, 1994, as if the sale of
the Fox Ridge Apartments had occurred on January 1, 1994.
The Pro Forma Statements of Operations do not reflect the non-
recurring loss that would have been realized on the sale of the Fox
Ridge Apartments.
KEMPER/CYMROT REAL ESTATE INVESTMENT FUND A, L.P.
PRO FORMA STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1995
(UNAUDITED)
The following statement sets forth the unaudited, Pro Forma Statements of
Operations of the Partnership for the three months ended March 31, 1995, as
if the sale of the Fox Ridge Apartments had occurred on January 1, 1995.
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
ACTUAL ADJUSTMENTS<F1> RESULTS
<S> <C> <C> <C>
REVENUES:
Operating income $ 430,218 $(270,006) $ 160,212
Interest income 4,271 (604) 3,667
-------- -------- --------
434,489 (270,610) 163,879
-------- -------- --------
EXPENSES:
Employee compensation and benefits 50,914 (27,003) 23,911
Property Management and other
professional fees 50,096 (11,649) 38,447
Office supplies and equipment 2,744 (1,831) 913
Administrative 11,452 (7,581) 3,871
Advertising and promotion 13,611 (8,703) 4,908
Insurance, licenses and other taxes 74,130 (46,190) 27,940
Utilities 33,177 (25,288) 7,889
Maintenance and repair 46,294 (28,118) 18,176
Interest 155,713 (115,805) 39,908
Depreciation 67,090 (50,395) 16,695
Provision for decrease in net
realizable value 280,000 217,612 497,612
-------- -------- -------
785,221 (104,951) 680,270
-------- -------- -------
Net operating loss before gain on
sale of property $(350,732) $(165,659) $(516,391)
Gain on sale of property<F2> $ 196,867 --- $ 196,867
-------- -------- --------
Net operating loss $(153,865) $(165,659) $(319,524)
======== ======== ========
Limited Partners' allocable net
operating loss per weighted average
limited partnership interest ($500
original capital contribution
per interest; 31,180 limited partnership
interests outstanding)
Loss before gain on sale of property $ (10.69) $ (5.05) $ (15.74)
Gain on sale of property $ 6.00 -- $ 6.00
-------- -------- --------
$ (4.69) $ (5.05) $ (9.74)
======== ======== ========
</TABLE>
Notes:
[FN]
<F1> The pro forma adjustments reflect the necessary adjustments to
restate the Partnership's revenues and expenses from continuing
operations for the three months ended March 31, 1995, as if the
sale of the Fox Ridge Apartments had occurred on January 1, 1995.
The Pro Forma Statements of Operations do not reflect the non-
recurring loss that would have been realized on the sale of the Fox
Ridge Apartments.
<F2> The Pro Forma Statements of Operations reflect the non-recurring
gain realized on the sale of the Silver Oaks Apartments which
were sold on February 17, 1995.
KEMPER/CYMROT REAL ESTATE INVESTMENT FUND A, L.P.
INDEX TO EXHIBITS
Exhibit
Number
10 Agreement to Purchase and Sell Apartment
Property - Fox Ridge Apartments Attached hereto
10 (a) First Amendment to Agreement to Purchase
and Sell Apartment Property Attached hereto
10 (b) Second Amendment and Reinstatement of
Agreement to Purchase and Sell Apartment
Property Attached hereto
Fox Ridge Apartments
Agreement To Purchase And Sell Apartment Property
made by
Kemper/Cymrot Real Estate Investment Fund A, L.P., Seller
and
Stonesfair Financial Corporation, Purchaser
Dated: May 5, 1995
Agreement To Purchase And Sell Apartment Property
Table Of Contents
Article 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fundamental Terms . . . . . . . . . . . . . . . . . . . . . . . . .
Section 1.1 Fundamental Terms . . . . . . . . . . . . . . . . .
Section 1.2 Other Definitions . . . . . . . . . . . . . . . . .
Article 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase And Sale . . . . . . . . . . . . . . . . . . . . . . . . .
Section 2.1 Purchase And Sale. . . . . . . . . . . . . . . . .
Section 2.2 Payment Of The Purchase Price . . . . . . . . . . .
Article 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchaser's Review . . . . . . . . . . . . . . . . . . . . . . . . .
Section 3.1 Required Documents. . . . . . . . . . . . . . . . .
Section 3.2 Contingency Period . . . . . . . . . . . . . . . .
Section 3.3 Termination Of Agreement . . . . . . . . . . . . .
Section 3.4 Indemnity And Survival . . . . . . . . . . . . . .
Section 3.5 Confidentiality . . . . . . . . . . . . . . . . . .
Article 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Title Documents . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 4.1 Survey . . . . . . . . . . . . . . . . . . . . . .
Section 4.2 Title Commitment . . . . . . . . . . . . . . . . .
Section 4.3 Title Defects . . . . . . . . . . . . . . . . . . .
Section 4.4 Seller Title Defects . . . . . . . . . . . . . . .
Section 4.5 Third Party Title Defects . . . . . . . . . . . . .
Article 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Representations, Warranties And Covenants . . . . . . . . . . . . .
Section 5.1 Seller's Representations And Warranties . . . . . .
Section 5.2 Procedures Regarding Breach Of Seller's Represen-
tations And Warranties . . . . . . . . . . . . .
Section 5.3 Survival Of Seller's Representations And Warranti-
es . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 5.4 Purchaser's Representations And Warranties . . . .
Section 5.5 Seller's Covenants . . . . . . . . . . . . . . . .
Article 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 6.1 Conditions To Seller's Obligations To Close . . . .
Section 6.2 Conditions To Purchaser's Obligations To Close . .
Section 6.3 Escrow And Closing . . . . . . . . . . . . . . . .
Section 6.4 Prorations. . . . . . . . . . . . . . . . . . . . .
Section 6.5 Closing Costs . . . . . . . . . . . . . . . . . . .
Section 6.6 Closing Escrow . . . . . . . . . . . . . . . . . .
Article 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Covenants And Conditions . . . . . . . . . . . . . . . . . . .
Section 7.1 Brokers . . . . . . . . . . . . . . . . . . . . . .
Section 7.2 Condemnation . . . . . . . . . . . . . . . . . . .
Section 7.3 Casualty . . . . . . . . . . . . . . . . . . . . .
Section 7.4 Affidavit Regarding Foreign Transferor . . . . . .
Article 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 8.1 Definitions . . . . . . . . . . . . . . . . . . . .
Article 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 9.1 Assurances Of Cooperation . . . . . . . . . . . . .
Section 9.2 Successors And Permitted Assigns . . . . . . . . .
Section 9.3 Interpretation . . . . . . . . . . . . . . . . . .
Section 9.4 Survival . . . . . . . . . . . . . . . . . . . . .
Section 9.5 Joint Cooperation . . . . . . . . . . . . . . . . .
Section 9.6 Publicity. . . . . . . . . . . . . . . . . . . . .
Section 9.7 Notices . . . . . . . . . . . . . . . . . . . . . .
Section 9.8 Kemper Investment Committee Approval . . . . . . .
Exhibit A .............The Real Property
Exhibit B .............The Permitted Title Exceptions
Exhibit C .............The Intangible Property
Exhibit D .............The Contracts
Exhibit E .............The Personal Property
Exhibit F-1 ...........The Bill Of Sale
Exhibit F-2 ...........The Assignment Of Leases,
Contracts and Intangible Rights
Exhibit G .............The Claims
Exhibit H .............The Required Documents
Agreement To Purchase And Sell Apartment Property
This Agreement To Purchase And Sell Apartment Property ("Agreement"), is
made as of May 5, 1995 by and between Kemper/Cymrot Real Estate Investment
Fund A, L.P., a Delaware limited partnership ("Seller"), and Stonesfair
Financial Corporation, a California corporation ("Purchaser").
Recitals
A. Seller is the owner of Fox Ridge Apartments, which is a 180 unit
apartment project located at 3715 Tallyho Drive, Sacramento, California.
B. Purchaser has agreed to purchase, and Seller has agreed to sell the
Property (as hereinafter defined), which includes the Fox Ridge Apartments,
on the terms and conditions contained in this Agreement.
In consideration of the respective representations, warranties,
agreements, covenants and conditions contained in this Agreement, and for
other good and valuable consideration, the parties to this Agreement agree as
follows:
Article 1
Fundamental Terms
Section 1.1 Fundamental Terms. When used herein, the following terms
shall have the following meanings attributed to them:
Seller: Kemper/Cymrot Real Estate Investment Fund A,
L.P., a Delaware limited partnership
Purchaser: Stonesfair Financial Corporation, a California
corporation
Purchase Price: Six Million Six Hundred Thousand Dollars
($6,600,000.00).
Earnest Money Deposit: The sum of One Hundred Thousand Dollars
($100,000.00) which has been deposited with the
Escrowee. The term "Earnest Money Deposit"
shall include any interest earned on the
deposited monies, less costs of investment.
Contingency Period
Expiration Date: June 5, 1995.
Closing Date: June 19, 1995.
Brokers: Granite Realty Advisors, Inc. and Pacific
Capital Investments.
Brokerage Commission: Three percent (3%) of the Purchase Price.
Escrowee: First American Title Insurance Company.
Section 1.2 Other Definitions. All other capitalized terms used in this
Agreement are defined in Article 8.
Article 2
Purchase And Sale
Section 2.1 Purchase And Sale. Subject to the conditions and on the
terms contained in this Agreement, Purchaser agrees to purchase the Property
from Seller, and Seller agrees to sell the Property to Purchaser. Subject to
approval of the Kemper Investment Committee as provided in Section 9.8,
Seller agrees to convey fee simple title to the Real Property to Purchaser by
a grant deed (the "Deed") subject only to the Permitted Title Exceptions.
Seller agrees to sell and assign to Purchaser the Leases, the Personal
Property, the Contracts and, to the extent assignable, the Intangible
Property by the instruments attached hereto as Exhibit F.
Section 2.2 Payment Of The Purchase Price. Purchaser agrees to pay the
Purchase Price to Seller, and Seller agrees to accept payment of the Purchase
Price in the following manner:
2.2.1 The Earnest Money Deposit shall be applied against the
Purchase Price at Closing; and
2.2.2 On the Closing Date, Purchaser shall pay the balance of the
Purchase Price to Seller through the Escrow, plus or minus net
Prorations.
Article 3
Purchaser's Review
Section 3.1 Required Documents. Purchaser acknowledges that Seller has
delivered to Purchaser copies of all of the documents described on Exhibit H
attached hereto or a statement that no such document is in Seller's
possession (the "Required Documents"). If the transaction herein
contemplated does not close, Purchaser shall return to Seller all of the
Required Documents and all other documents delivered to Purchaser or
otherwise obtained by Purchaser from Seller. Seller shall also make
available at the Property for the Purchaser's review and, if desired,
photocopy, at Purchaser's expense, the following documents or information in
Seller's possession, to the extent that any such documents or information are
in Seller's possession: (i) site plans, plans and specifications,
architectural renderings, floor plans, landscape plans, utility schemes and
other similar plans, diagrams, or studies for the Property; (ii) all utility
bills or utility bill payment logs for the Property; (iii) all maintenance
orders to third party contractors for the Property; (iv) records of all
evictions commenced during the 24 months preceding the date of this
Agreement; (v) information concerning the current payroll of all employees of
the Seller or Seller's manager employed at the Property, including
information concerning the fringe benefits of such parties; (vi) any tax
assessment appeal applications; (vii) licenses and permits for the Property;
and (viii) information concerning official law enforcement visits to the
Property for domestic disturbances and any other law enforcement activities
(the Required Documents, all other documents delivered to or obtained by
Purchaser and any of the foregoing delivered to or obtained by Purchaser are
herein collectively referred to as the "Property Documents"). The Property
Documents, the Studies or any other documentation regarding the Property
which are in Purchaser's possession shall be retained by Purchaser in
complete confidence and Purchaser shall not disclose to third parties (other
than Purchaser's attorneys, accountants and other agents) either the
documents or the contents thereof, except as necessary for Purchaser: (i) to
obtain financing for the acquisition of the Property; (ii) to cause the
Property to be acquired by Purchaser; or (iii) to comply with state or
federal securities laws which may apply to Purchaser.
Section 3.2 Contingency Period.
3.2.1 Purchaser recognizes that Seller will not sell the Property except
on an "as is" basis, with no warranty or representation of any kind from
Seller regarding the condition of the Property or the compliance of the
Property with applicable laws, except as expressly stated in Section 5.1.
From the date of this Agreement to the Contingency Period Expiration Date,
Purchaser shall act with diligence to conduct its review of the Property and
of the Property's suitability for Purchaser's needs. The period from the
date of this Agreement to the Contingency Period Expiration Date is referred
to herein as the "Contingency Period".
3.2.2 During the Contingency Period and at all times prior to the
Closing, Seller shall make available to Purchaser and its representatives for
inspection at Seller's or Seller's property manager's offices upon reasonable
notice:
1. The original Required Documents (to the extent in Seller's
possession); and
2. All other documents, correspondence, agreements, waivers and
other records which concern the Property which are in Seller's
possession, other than confidential material which Seller has prepared
for its internal use, for use by affiliates of Seller, or for insurance
regulatory purposes, including valuation, tax or accounting related
materials.
3.2.3 During the Contingency Period, and at all times prior to the
Closing, Purchaser and its representatives or agents, shall have the right to
enter upon the Property for the following purposes, subject to the conditions
stated below:
1. to examine and test the Property, which tests may include soil
tests, environmental tests and engineering tests; and
2. to inspect and test the Improvements to evaluate their
suitability for Purchaser's needs; provided, however, that Purchaser
shall be permitted only one (1) examination of the interior of the
apartment units, which examination shall be limited as may be reasonably
necessary.
All of the foregoing examinations, inspections, studies, tests and reports
are referred to in this Agreement as the "Studies".
3.2.4 Purchaser's right to enter onto the Property to conduct these
Studies is subject to the following conditions:
1. Purchaser shall provide Seller with reasonable notice of any
entry onto the Property, which shall be not less than one (1) day's
notice;
2. Purchaser shall obtain liability insurance naming Purchaser and
Seller as insureds, and shall provide evidence thereof reasonably
satisfactory to Seller;
3. All investigations and other activities conducted by Purchaser
with respect to the Property shall be at Purchaser's sole cost and
expense, and Purchaser shall keep the Property free of any liens which
may be asserted against Seller or the Property as a result of these
activities;
4. Purchaser shall exercise due care with respect to the Property
in connection with its entry thereon so as to minimize any damage caused
to the Property and any interference with Seller's use thereof; and
5. Immediately following any such entry onto the Property or
conduct of any Studies, Purchaser shall restore the Property to its
prior condition.
Section 3.3 Termination Of Agreement. Prior to the end of the
Contingency Period, Purchaser shall have the right to elect to terminate this
Agreement for any reason in Purchaser's sole and absolute discretion by
delivery of written notice of termination to Seller (a "Termination Notice").
If Purchaser delivers a Termination Notice to Seller in accordance with the
terms of this Agreement prior to the end of the Contingency Period, the
Earnest Money Deposit, less costs of investment and less Purchaser's escrow
charges, shall be returned to Purchaser with no requirement of consent by
Seller, and this Agreement shall be terminated, subject to the survival of
the indemnity obligations contained herein. If Purchaser fails to provide
that Termination Notice as required herein, Purchaser shall be deemed to have
waived its rights under this section and shall be deemed to have elected to
continue with this transaction. Purchaser acknowledges that if Purchaser
fails to provide the Termination Notice as required herein, the Earnest Money
Deposit shall then be non-refundable to Purchaser, except in the event of
default by Seller as more fully provided hereafter.
Section 3.4 Indemnity And Survival. Purchaser hereby agrees to
indemnify, defend, protect and hold Seller harmless from any and all costs,
losses and damages, including reasonable attorneys' fees and litigation
expenses, which Seller shall incur as a result of the Studies. In the event
this Agreement is terminated, this indemnity shall survive the termination of
this Agreement as to all claims which are identified by Seller to Purchaser
within a period of six (6) months from and after the date of termination of
this Agreement. If this Agreement is not terminated, this indemnification
shall survive the Closing.
Section 3.5 Confidentiality. Any and all information provided to
Purchaser or obtained by Purchaser regarding the Property shall be maintained
by Purchaser and its agents in strict confidence and shall not be disclosed
to third parties without the prior written consent of Seller, except for
disclosures permitted under the terms of Section 3.1.
Article 4
Title Documents
Section 4.1 Survey. Within ten (10) days after the date of this
Agreement, Seller shall deliver the Survey to Purchaser at Seller's cost.
Any encroachments onto the Real Property from any adjacent property,
encroachments by or from the Real Property onto any adjacent property or
violation of or encroachments upon any recorded building lines, restrictions
or easements affecting the Real Property shown on the Survey shall be
considered "Survey Defects".
Section 4.2 Title Commitment. Within ten (10) days after the date of
this Agreement, Seller shall deliver the Title Commitment and all documents
of record to Purchaser at Seller's cost. On the Closing Date, Seller shall
cause the Title Insurer to issue a CLTA owner's title insurance policy (the
"Owner's Policy") or prepaid commitment therefor pursuant to and in
accordance with the Title Commitment insuring fee simple title to the Real
Property in the Purchaser as of the Closing Date in the amount of the
Purchase Price, subject only to the Permitted Title Exceptions and such other
exceptions as Purchaser may approve pursuant to the provisions of this
Article 4.
Section 4.3 Title Defects. The Survey and the Title Commitment are
referred to herein as "Title Documents". As used herein, the term "Title
Defects" shall mean, with respect to the Survey, any matters identified in
Section 4.1 as a "Survey Defect" and, with respect to the Title Commitment,
any matter disclosed on the Title Commitment which is not a Permitted
Exception. A Title Defect resulting from or arising out of Seller's
voluntary acts or omissions is referred to as a "Seller Title Defect". All
other Title Defects are referred to as "Third Party Title Defects".
Section 4.4 Seller Title Defects. If any Title Document discloses a
Seller Title Defect, Seller shall have a period of ten (10) business days
following Purchaser's notice to Seller of the existence of such Seller Title
Defect to cause the same to be cured, removed or insured over by the Title
Insurer and Seller shall use its best efforts to accomplish one of such
remedies, and the Closing shall thereafter take place either on the Closing
Date or ten (10) days after the Seller Title Defect is cured, whichever is
later. If Seller fails to cure and remove or cause the Title Insurer to
insure over all Seller Title Defects, then Purchaser may, at its sole
election, by written notice given to Seller within ten (10) days after the
expiration of the period allowed for cure, proceed to close this transaction
by deducting from the Purchase Price and escrowing with the Title Insurer the
amount necessary to cause the Title Insurer to insure over such Seller Title
Defects in a manner reasonably satisfactory to Purchaser. Absent such
election, this Agreement shall terminate without further action of the
parties and the Earnest Money Deposit shall be returned to Purchaser, with
Seller to have no further obligations hereunder.
Section 4.5 Third Party Title Defects. If any Title Document discloses
the existence of a Third Party Title Defect, Seller shall have a period of
ten (10) business days following Purchaser's notice to Seller of the
existence of such Third Party Title Defect to cause the same to be cured,
removed or insured over by the Title Insurer and Seller shall use its best
efforts to accomplish one of such remedies (however, that with respect to all
Third Party Title Defects, Seller shall not be required to expend any amount
greater than $25,000.00 in the aggregate (the "Cure Amount") to cure all such
Third Party Title Defects, although Purchaser shall have the rights described
below in this section) and the Closing shall thereafter take place either on
the Closing Date hereinafter specified, or ten (10) days after the Third
Party Title Defect is cured, whichever is later. If the cost to cure all
Third Party Title Defects exceeds the Cure Amount, Seller shall notify
Purchaser whether or not Seller will expend the excess to cure such Third
Party Title Defects. If Seller fails to cure and remove or cause the Title
Insurer to insure over all Third Party Title Defects, or if Seller has
notified ("Non-Cure Notice") Purchaser that the cost to cure such Third Party
Title Defects exceeds the Cure Amount and that Seller is unwilling to expend
such excess amounts, then Purchaser may, at its sole election, by written
notice given to Seller within ten (10) days after (i) the expiration of the
period allowed for cure or (ii) the date on which Seller delivers the
Non-Cure Notice, as the case may be, proceed to close this transaction by
receiving a credit at Closing for the lesser of the Cure Amount or the cost
to cure such Third Party Title Defects, and Purchaser shall assume all
responsibility to cure all Third Party Defects. Absent such election, this
Agreement shall terminate without further action of the parties and after the
return of the Earnest Money Deposit to Purchaser, Purchaser and Seller shall
have no further obligations hereunder. Notwithstanding anything to the
contrary contained herein, Seller shall have no affirmative obligation to
expend any funds or incur any expenses greater than the Cure Amount in the
aggregate to cure all Third Party Title Defects, unless Seller agrees
otherwise in writing.
Article 5
Representations, Warranties And Covenants
Section 5.1 Seller's Representations And Warranties. Seller hereby
represents and warrants to Purchaser that:
5.1.1 Seller is the sole owner of, and has good and marketable title to,
the Personal Property and the Intangible Property free and clear of all
liens, encumbrances, claims and demands, other than the Leases and the
Permitted Title Exceptions. Seller has not entered into any agreement to
sell, mortgage, lease (other than to residential tenants for personal
occupancy) or otherwise encumber or dispose of its interest in the Property,
or any part thereof, except for this Agreement.
5.1.2 Seller's Management Personnel have not received notice from any
person or entity with respect to any actual or threatened taking of any
portion of the Property for any purpose by the exercise of the right of
condemnation or eminent domain.
5.1.3 There is no claim, litigation, action, proceeding, or
investigation pending against the Property, Seller's interest in the
Property, or any part thereof before any court or Governmental Authority,
except as shown on Exhibit G (the "Claims").
5.1.4 Seller's Management Personnel have not received written notice
from any Governmental Authority of any violation of any building, fire or
health code applicable to the Property, or any part thereof, which will not
have been corrected prior to Closing.
5.1.5 The Contracts listed on Exhibit D comprise every contract,
agreement, relationship and commitment, whether oral or written, other than
the Leases and other than the Permitted Title Exceptions, affecting the
Property.
5.1.6 Neither Seller nor, to the knowledge of Seller, any other party,
is in default under any of the Contracts and, to the knowledge of Seller, no
event has occurred which, with notice or lapse of time or both, would
constitute such default and, to the knowledge of Seller, each Contract is in
full force and effect.
5.1.7 Seller is duly organized, validly existing and qualified and
empowered to conduct its business, and has full power and authority to enter
into and fully perform and comply with the terms of this Agreement. Neither
the execution and delivery of this Agreement nor its performance by Seller
will conflict with or result in the breach of any contract, agreement, law,
rule, regulation or court or governmental order to which Seller is a party or
by which Seller may be bound. This Agreement is valid and enforceable
against Seller in accordance with its terms and each instrument to be
executed by Seller pursuant to this Agreement or in connection herewith will,
when executed and delivered, be valid and enforceable against Seller in
accordance with its terms.
5.1.8 The Rent Roll identifies all existing Leases as of April 19, 1995.
No commissions to any leasing brokers are due with respect to any leasing of
the Property, except for Leases as to which occupancy has not yet commenced.
No payment default exists under any Lease except as shown on the Rent Roll.
The Rent Roll discloses all security and other deposits made by Tenants. No
Tenant is entitled to a rent concession or rebate which is not disclosed on
the Rent Roll. There are no written or oral leases of the Property except as
shown on the Rent Roll. All of the Leases are assignable by Seller without
consent of any party.
5.1.9 Seller has received no written notice or written inquiry that
any governmental authority has determined that there are any violations of
any Environmental Laws with respect to the Property, and if Seller receives
written notice of any such violations affecting the Property prior to the
Closing, Seller promptly shall notify Purchaser thereof. To the knowledge of
Seller, there are no areas on the Property where Hazardous Material has been
generated, disposed of, released, found or incorporated into the
Improvements, except for any Hazardous Material customarily used, stored and
disposed of in the operation of the Property and not in violation of the
Environmental Laws.
5.1.10 All copies of documents furnished to Purchaser by Seller or its
counsel are true, correct and complete copies of the Seller's copies of such
documents.
5.1.11 EXCEPT AS EXPRESSLY STATED HEREIN, THE PROPERTY SHALL BE CONVEYED
TO PURCHASER ON AN "AS-IS, WHERE-IS" BASIS WITHOUT ANY REPRESENTATIONS OR
WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, EITHER ORAL OR WRITTEN, MADE BY
SELLER OR ANY AGENT OR REPRESENTATIVE OF SELLER WITH RESPECT TO THE PHYSICAL
OR STRUCTURAL CONDITION OF THE PROPERTY, THE PROPERTY'S COMPLIANCE WITH
ENVIRONMENTAL LAW OR THE AMERICANS WITH DISABILITIES ACT, OR WITH RESPECT TO
THE EXISTENCE OR ABSENCE OF TOXIC OR HAZARDOUS MATERIALS, SUBSTANCES OR
WASTES OR STORAGE TANKS IN, ON, UNDER OR AFFECTING THE PROPERTY. SELLER HAS
MADE AND HEREBY MAKES NO WARRANTY OR REPRESENTATION WHATSOEVER AND HEREBY
DISCLAIMS ANY IMPLIED WARRANTY REGARDING THE FITNESS FOR PARTICULAR PURPOSE,
QUALITY OR MERCHANTABILITY OF THE REAL PROPERTY, THE PERSONAL PROPERTY OR ANY
PORTION THEREOF.
Section 5.2 Procedures Regarding Breach Of Seller's Representations And
Warranties.
5.2.1 Whenever any representation or warranty of Seller is stated in
this Agreement to be "to the knowledge of Seller" or words of like import,
such words shall mean and be strictly limited and confined to the actual
knowledge of Seller's Management Personnel. Except for Seller's Management
Personnel reviewing all files in Seller's possession relating to the Property
and making a reasonable inquiry of employees of Seller's property manager, as
to all such matters set forth in this Article 5, neither Seller nor Seller's
Management Personnel has investigated or shall be under any obligation to
investigate those matters about which, or relative to which, Seller has made
a representation or warranty to Purchaser hereunder. Whenever it is stated
in this Agreement that Seller has received no notice of a particular matter,
it is intended to mean only that Seller's Management Personnel have received
no written notice of such matter and that Seller's Management Personnel has
not discovered any written notice after a review by Seller's Management
Personnel of all files in Seller's possession relating to the Property.
Information actually known to Seller or Seller's Management Personnel
excludes information of which Seller, Seller's Management Personnel or any
other party has constructive or implied knowledge or notice and also excludes
information actually known to anyone other than Seller's Management
Personnel.
5.2.2 If, prior to Closing, any event or circumstance occurs or first
becomes actually known to Purchaser or Seller's Management Personnel, or
written notice thereof is first actually received by Purchaser or Seller's
Management Personnel, and if the same would make false any representation or
warranty of Seller hereunder (a "Breach") then the party to whom the Breach
has become actually known shall notify the other party by written notice
("Breach Notice") given within ten (10) days after such party's discovery of
the Breach (but in any event on or before Closing), of the specifics of the
Breach. Notwithstanding anything to the contrary in this Agreement, if
Purchaser has actual knowledge of a Breach prior to Closing and elects to
close without delivering a Breach Notice to Seller concerning such Breach
prior to Closing, Purchaser shall be deemed to have waived all claims with
respect to such Breach. Within two (2) business days after delivery of a
Breach Notice, Seller shall determine, in good faith, the cost to cure such
Breach and notify Purchaser by written notice ("Amount Notice") of such cost.
5.2.3 If the cost to cure such Breach does not exceed $75,000.00
(whether or not the Breach is attributable to the intentional acts or bad
faith of Seller), then Seller shall be obligated, at its option, exercised by
the giving of notice to Purchaser within two (2) business days after delivery
of an Amount Notice to either (i) cure or remedy such Breach, at Seller's
expense within thirty (30) days after delivery of a Breach Notice in a manner
reasonably acceptable to Purchaser (and Closing shall be adjourned, if
necessary, for a period not to exceed thirty (30) days) or (ii) give
Purchaser a credit at Closing in the amount required to cure or remedy such<PAGE>
Breach and the Closing shall not be delayed by reason thereof. If Seller
fails to give such notice, Seller shall be deemed to have elected to proceed
under clause (ii) above.
5.2.4 If the cost to cure such Breach exceeds $75,000.00 and the Breach
is not attributable to the intentional acts or bad faith of Seller, then
Purchaser may elect, within ten (10) days after delivery of the Amount
Notice, by notice to Seller, to terminate this Agreement in which event the
Earnest Money Deposit shall be promptly returned to Purchaser and thereupon
neither party shall have any further liability to the other except liability
expressly stated in this Agreement to survive the termination of this
Agreement. If Purchaser does not elect to so terminate this Agreement,
Purchaser shall be deemed to have elected to proceed with the Closing, and
Seller shall give Purchaser a credit at Closing in the amount of $75,000.00.
5.2.5 Except for a Breach described in 5.2.3, if the Breach is
attributable to the intentional acts or bad faith of Seller, and Purchaser
elects to terminate this Agreement, then the Earnest Money Deposit shall be
promptly returned to Purchaser, and (i) Seller, upon delivery by Purchaser of
substantiating data in reasonable detail, shall promptly pay to Purchaser an
amount equal to all of Purchaser's actual third party expenses incurred in
connection with the acquisition and financing of the Property up to an amount
of $75,000.00; and (ii) Purchaser may recover, as Purchaser's sole and
exclusive remedy (in addition to Purchaser's third party expenses paid by
Seller under (i) of this sentence), Purchaser's actual (but not
consequential) damages, plus actual and reasonable attorneys' fees incurred
by Purchaser in connection with the assertion of Purchaser's rights against
Seller under this Section (up to a maximum amount of $75,000.00 less all
amounts paid by Seller to Purchaser under (i) of this sentence), by filing
suit against Seller within six (6) months after Purchaser elects to terminate
this Agreement. Failure by Purchaser to file suit against Seller within such
six (6) month period shall be deemed a waiver of the right to file suit
against Seller as a result of the Breach and the remedies provided herein.
5.2.6 The rights and remedies granted to Purchaser under this Section
5.2 respecting a Breach shall be the sole and exclusive rights and remedies
of Purchaser under this Agreement with respect to such Breach. Seller agrees
to defend, indemnify and hold harmless Purchaser from and against any and all
loss, cost, damage, expense and liability (including reasonable attorneys'
fees and litigation expenses) incurred by Purchaser, arising out of or from
any misrepresentation or breach of warranty of Seller expressly contained in
this Section 5.2 first discovered by or disclosed to Purchaser after the
Closing Date; provided, however, the provisions of this paragraph are
expressly subject to Section 5.3 respecting the survival of representations
and warranties and the assertions of claims by Purchaser.
Section 5.3 Survival Of Seller's Representations And Warranties. At
Closing, Seller shall deliver to Purchaser a certificate of the foregoing
warranties and representations, which will confirm that the warranties and
representations are in all material respects true and correct as of the date
of the Closing, or if any are not true and correct, listing any exceptions in
reasonable detail. As provided in this Agreement or in that certificate, the
foregoing representations and warranties made by Seller shall survive the
Closing Date for a period of six (6) months, but only to the extent provided
herein, and shall be of no force or effect thereafter. If Purchaser
discovers a breach of warranty or representation made by Seller in Section
5.1 within six (6) months after the Closing Date, Purchaser shall notify
Seller, in writing, within said six (6) month period, of the specifics of
such breach and Purchaser's sole recourse against Seller shall be to file an
action or proceeding against Seller (but not against any directors, officers,
employees or agents of Seller) for the actual damages suffered by Purchaser
as a direct result of such breach(es). No action or proceeding thereon of
any kind whatsoever shall be valid or enforceable, at law or in equity, if<PAGE>
not commenced in the appropriate jurisdiction, within ninety (90) days after
the date of Purchaser's notice of the breach of warranty or representation to
Seller.
Section 5.4 Purchaser's Representations And Warranties. Purchaser
hereby represents and warrants to Seller that:
5.4.1 Prior to the Contingency Period Expiration Date, Purchaser will
conduct an independent investigation of the Property and the physical
condition thereof, including without limitation: (i) accessibility and
location of utilities; (ii) presence of Hazardous Materials on, from, or
under the Property; (iii) earthquake preparedness of the Property; (iv)
presence of termites or other pests; (v) all matters concerning the Property
with respect to taxes, assessments, income and expense data, bonds,
permissible uses, zoning, covenants, conditions and restrictions; (vi) and
any other matters which in Purchaser's judgment are necessary or advisable or
might affect or influence Purchaser's use of the Property, or bear upon the
value and suitability of the Property for Purchaser's intended purposes, or
Purchaser's willingness to enter into this Agreement.
5.4.2 Purchaser will rely entirely on Purchaser's investigation of the
Property to satisfy itself as to: (i) the physical condition of the Property;
(ii) the compliance of the Property with Environmental Laws; (iii) the
compliance of the Property with all other applicable laws (except for matters
warranted by Seller under Section 5.1.5); and (iv) the value of the Property.
5.4.3 Purchaser is duly organized, validly existing and qualified and
empowered to conduct its business, and has full power and authority to enter
into and fully perform and comply with the terms of this Agreement. Neither
the execution and delivery of this Agreement nor its performance by Purchaser
will conflict with or result in the breach of any contract, agreement, law,
rule or regulation to which Purchaser is a party or by which Purchaser may be
bound. This Agreement is valid and enforceable against Purchaser in
accordance with its terms and each instrument to be executed by Purchaser
pursuant to this Agreement or in connection herewith will, when executed and
delivered, be valid and enforceable against Purchaser in accordance with its
terms.
5.4.4 The signatories to this Agreement on behalf of Purchaser have full
right, power and authority to enter into this Agreement and to consummate the
transaction contemplated hereby.
5.4.5 These representations and warranties shall survive the Closing.
Section 5.5 Seller's Covenants.
5.5.1 On the Closing Date, Seller shall tender possession of the
Property to Purchaser in the same condition the Property was in on the date
of this Agreement, ordinary wear and tear excepted. Seller shall continue to
operate the Property in substantially the same manner in which Seller has
operated the Property prior to the date of this Agreement.
5.5.2 From the date of this Agreement to the Closing Date, Seller shall
not do, suffer, or permit any of the following to occur without the prior
written consent of Purchaser:
1. Enter into any agreement or transaction with respect to or
affecting the Property out of the ordinary course of business;
2. Sell, encumber or grant any interest in the Property or any part
thereof, except for Leases made in the ordinary course of Seller's
business;
3. Terminate any Lease which is not in default or modify, cancel or
amend any Lease, or extend any Lease beyond an additional twelve (12)
month period, except that Seller may elect not to renew a Lease which
has expired;
4. Alter or amend the zoning classification of the Property, or
otherwise perform or permit any act or deed which shall diminish,
encumber or affect Purchaser's rights in and to the Property or prevent
Seller from performing fully its obligations hereunder; or
5. Make any change in Seller's normal and customary billing
practices or apply any security deposits against rent delinquencies or
other Lease defaults without notice to and consent of Purchaser, except
in cases of eviction of a Tenant or termination of a Lease, in which
case notice to and consent of Purchaser shall not be necessary.
5.5.3 Seller shall be responsible for and pay at or prior to Closing all
amounts due through Closing for employees' salaries, vacation pay,
withholding and payroll taxes and other benefits and any management fee
affecting the Property. If and to the extent Seller has not paid all such
amounts as of Closing, Purchaser shall receive a credit against the Purchase
Price in an amount equal to the amount not so paid. If and as requested by
Purchaser, Seller shall terminate as of the Closing Date the employment of
any employees of Seller who work at the Property.
5.5.4 From and after the date of this Agreement, Seller will defend or
will cause its insurance carrier to defend the Claims with the result that
Purchaser will not be liable for any actual loss, costs, or damages in
connection therewith, including litigation costs and expenses. Prior to the
Closing Date, Seller shall promptly notify Purchaser upon Seller's receipt of
written notification of any pending or threatened litigation or other legal
action directly affecting the Property. Seller shall promptly notify
Purchaser of any fact or circumstance which becomes actually known to Seller
prior to the Closing Date which renders any of Seller's representations made
herein untrue.
Article 6
Closing
Section 6.1 Conditions To Seller's Obligations To Close. Seller's
obligations to close under this Agreement are subject to: (i) the truth and
accuracy in all material respects at Closing of Purchaser's representations
and warranties as provided in this Agreement; (ii) the performance by
Purchaser of its covenants, agreements and obligations hereunder, including
without limitation, the payment of the Purchase Price at Closing as provided
herein; and (iii) the approval of this transaction by the Kemper Investment
Committee on or before May 10, 1995. In the event that condition (iii) is
not satisfied on or before May 10, 1995, then Purchaser shall be entitled to
receive the return of the Earnest Money Deposit, and this Agreement shall be
terminated and have no further force and effect, except as provided for
survival of indemnification in Article 3. IN THE EVENT THAT CONDITIONS (i)
AND (ii) STATED ABOVE ARE NOT SATISFIED AS OF THE CLOSING DATE, PURCHASER AND
SELLER AGREE SELLER WILL INCUR DAMAGES, BUT THAT SUCH DAMAGES ARE IMPRACTICAL
AND EXTREMELY DIFFICULT, IF NOT IMPOSSIBLE, TO ASCERTAIN. PURCHASER AND
SELLER, IN A REASONABLE EFFORT TO ASCERTAIN WHAT SELLER'S DAMAGES WOULD BE IN
SUCH EVENT, HAVE AGREED BY PLACING THEIR INITIALS BELOW THAT THE EARNEST
MONEY DEPOSIT SHALL BE DEEMED TO CONSTITUTE A REASONABLE ESTIMATE OF SELLER'S
DAMAGES UNDER THE PROVISIONS OF SECTION 1671 OF THE CALIFORNIA CODE OF CIVIL
PROCEDURE. ACCORDINGLY, IN THE EVENT THAT CONDITIONS (i) AND (ii) STATED
ABOVE ARE NOT SATISFIED AS OF THE CLOSING DATE, THEN SELLER SHALL RETAIN THE
EARNEST MONEY DEPOSIT AS LIQUIDATED DAMAGES AS SELLER'S SOLE MONETARY REMEDY
THEREFOR. THE FOREGOING LIQUIDATED DAMAGES PROVISION SHALL NOT APPLY TO NOR<PAGE>
LIMIT THE INDEMNITY PROVISIONS OF THIS AGREEMENT OR ANY RIGHTS, REMEDIES OR
DAMAGES SELLER MAY HAVE AGAINST PURCHASER WHICH ACCRUE FOLLOWING THE CLOSING
DATE.
Seller's Initials Purchaser's Initials
Section 6.2 Conditions To Purchaser's Obligations To Close.
6.2.1 Purchaser's obligations to close under this Agreement are subject
to: (i) the performance by Seller of its covenants, agreements and
obligations hereunder, including delivery of Seller's Closing Documents at
Closing as provided herein; (ii) the truth and accuracy in all material
respects at Closing of Seller's representations and warranties as provided in
this Agreement; (iii) the condition that Purchaser shall not have delivered a
Termination Notice to Seller during the Contingency Period in accordance with
the terms of this Agreement; and (iv) the condition that Purchaser shall not
have terminated this Agreement by reason of the existence of a Title Defect
in accordance with the provisions of Article 4 of this Agreement.
6.2.2 In the event that condition (i) stated above is not satisfied as
of the Closing Date and within ten (10) days after Purchaser notifies Seller
of the failure of such condition, then Purchaser shall have the right, at its
sole election, either to terminate this Agreement and obtain a refund of the
Earnest Money Deposit, or to seek specific performance against Seller, as
Purchaser may elect.
6.2.3 In the event that condition (ii) stated above is not satisfied as
of the Closing Date, Purchaser shall have the rights specified in Section
5.2.
6.2.4 In the event that Purchaser has delivered the Termination Notice
within the Contingency Period, Purchaser shall be entitled to receive the
return of the Earnest Money Deposit, and this Agreement shall be terminated
and have no further force and effect, except as provided for survival of
indemnification in Article 3.
6.2.5 In the event the existence of a Title Defect has resulted in
Purchaser rightfully terminating this Agreement in accordance with the
provisions of Article 4, the Earnest Money Deposit shall be returned to
Purchaser as provided in Article 4.
Section 6.3 Escrow And Closing. Seller and Purchaser have opened an
escrow (the "Escrow") with the Escrowee and have deposited the Earnest Money
Deposit. Subject to the other terms and conditions of this Agreement, the
closing of the obligations of the Purchaser and Seller hereunder (the
"Closing") shall take place at the offices of the Escrowee on the Closing
Date. The Closing shall occur through the Escrow. The instructions to the
Escrowee shall be consistent with the terms of this Agreement. Sole and
exclusive possession of the Property, subject to the rights of the Tenants
under Leases, shall be delivered to Purchaser as of the Closing. The Owner's
Policy shall be issued through the Escrow in accordance with the terms of
Article 4.
Section 6.4 Prorations. The following adjustments to the Purchase Price
(the "Prorations") shall be made as of the Closing Date (with the Purchaser
being deemed the owner of the Property on the Closing Date) and shall be
documented in a statement (the "Closing Statement") executed and delivered by
Purchaser and Seller:
6.4.1 Taxes. General and special real property taxes and assessments
shall be prorated on an accrual basis as of the Closing Date on the basis of
the actual amount of the most recent ascertainable tax bill. Any
supplemental tax bills received after the Closing Date shall be paid by
Seller, to the extent they relate to a period prior to the Closing Date, and
by Purchaser, to the extent they relate to a period after the Closing Date.
If a supplemental tax bill covers a period commencing before and continuing
after the Closing Date, the party named in the bill will pay the tax and the
other party shall reimburse the first party its pro rata share within thirty
(30) days after receipt of a copy of the tax bill and evidence of the first
party's payment of same. The provisions of this Section 6.4.1 shall survive
Closing. Seller reserves the right to continue to pursue any pending
applications for the refund of real and/or personal property taxes previously
paid by Seller for the 1993-1994 fiscal tax year and for all prior tax years
based on a reduction of the assessed valuation of the Property or for any
other reason. Any such refunds shall belong to Seller.
6.4.2 Rent. Rent shall be prorated for the month in which the Closing
Date occurs. Seller shall be entitled to rents which have been received by
Seller. However, Seller shall not be entitled to receive credit for accrued
but unpaid rent. Seller's remedies for rent unpaid at the time of Closing
are stated in paragraph 6.4.4. Rents which have been received by Seller for
the month in which the Closing Date occurs will be considered prepaid rent
for the portion of that month occurring from and after the Closing Date, and
Purchaser shall receive credit for prepaid rents under Section 6.4.3. Seller
shall not be required to pay any brokerage commissions or give a proration
credit for brokerage commissions for Leases as to which occupancy has not
commenced by the Closing Date.
6.4.3 Prepaid Rents and Security Deposits. All prepaid rents and
security and other deposits of all Tenants under Leases not theretofore
applied, with interest thereon to the extent any interest is required to be
paid to such Tenants, shall be delivered by Seller to Purchaser on the
Closing Date, or Seller may elect to give Purchaser a credit against the
Purchase Price in the amount of such prepaid rent or deposits.
6.4.4 Collections and Applications of Payments after Closing. After the
Closing Date, Purchaser shall bill Tenants for all amounts due under Leases,
including amounts accruing prior to the Closing Date. Any amounts due and
owing Seller before the Closing Date by Tenants under the Leases which are
unpaid on the Closing Date are collectively called "Delinquent Amounts."
Rental and other payments received by Purchaser or Seller from Tenants shall
be first applied toward the actual and reasonable out-of-pocket costs of
collection paid to parties other than the managing agent of the Property,
then toward the payment of rent and other charges owed to the Purchaser, and
any excess monies received shall be applied to the payment of Delinquent
Amounts. Purchaser may not waive any Delinquent Amounts nor modify a Lease
so as to reduce amounts or charges owed under Leases of any period in which
Seller is entitled to receive a share of charges or amounts, without first
obtaining Seller's written consent. During the first nine (9) months after
the Closing Date, Seller shall have and reserves the right to pursue any
remedy against any Tenant owing Delinquent Amounts provided that (i) Seller
shall notify Purchaser of its intent to institute any legal proceeding
relating thereto not less than thirty (30) days prior to the institution
thereof, (ii) Seller shall not institute any legal proceedings for collection
of Delinquent Amounts prior to the expiration of ninety (90) days following
the Closing Date, (iii) Seller shall in no event institute any proceeding to
evict or dispossess a Tenant from the Real Property, and (iv) Seller shall
not take any action which would limit Purchaser's rights to pursue any remedy
Purchaser may have for a default under any Lease. Purchaser may, by written
notice to Seller within twenty (20) days of receipt of Seller's notice,
restrict Seller from collecting such Delinquent Amounts, but only if
Purchaser first pays Seller such Delinquent Amounts in exchange for Seller's
assignment to Purchaser of all of Seller's rights and causes of action with
respect thereto. With respect to Delinquent Amounts owed by Tenants who are<PAGE>
no longer Tenants of the Property as of the Closing Date, Seller shall retain
all rights relating thereto.
6.4.5 Contracts. Purchaser shall be entitled to a credit against the
Purchase Price for sums that are due (or accrued) and unpaid as of the
Closing Date under any Contracts, and Seller shall be entitled to a credit to
the extent that sums have been paid under any Contracts for services to be
performed or goods to be delivered after the Closing Date.
6.4.6 Other Items of Expense or Receipt. All other customarily prorated
items of expense or receipt shall be prorated between the parties hereto as
of the Closing Date. Except with respect to items prorated at Closing,
Seller shall be responsible for payment of any and all bills or charges
incurred on or prior to the Closing Date for work, services, supplies or
materials, and Purchaser shall be responsible for payment of any and all
bills or charges incurred after the Closing Date for work, services, supplies
or materials. Unless otherwise provided for in this Agreement, Purchaser
shall not purchase, nor shall there be any proration credit given for, any of
Seller's receivables arising from the operation of the Property.
6.4.7 Adjustments. Prorations shall be accomplished by an adjustment in
the Purchase Price due Seller on the Closing Date.
Any item prorated on an estimated basis on the Closing Date shall be
reprorated by the parties when and as the actual amount of such item becomes
known. Real estate taxes shall be reprorated within ninety (90) days after
issuance of final bills for the Property for the tax periods for which
prorations were made. All other reprorations to be made under this Agreement
shall be made within ninety (90) days after the Closing Date, or the
obligation of the parties hereto to make reprorations shall lapse. Any
adjustment due to reproration shall be effected in cash not later than ten
(10) days following final determination of the amount of such item and demand
by the party to whom payment is due.
Section 6.5 Closing Costs. A. In connection with the Closing, Seller
shall pay:
1. the costs of the Survey and the title insurance premium for the
Owner's Policy (but not including the costs attributable to Purchaser
under subsection B 1 below);
2. any release fees;
3. any and all transfer taxes, if any, imposed by state, county or
local governmental authorities on the deed or transfer declarations to
be delivered hereunder;
4. one-half (1/2) of the escrow charges of the Escrowee imposed
with respect to the transactions provided for herein; and
5. any other closing costs and expenses customarily paid by sellers
necessary to effectuate the transactions contemplated by this Agreement
(other than costs specifically allocated to Purchaser below).
B. In connection with the Closing, Purchaser shall pay:
1. the costs of obtaining extended coverage over the general
exceptions on the Owner's Policy, any endorsements to the Owner's Policy
and the costs of any policies of title insurance or endorsements
required by Purchaser's lenders;
2. one-half (1/2) of the escrow charges of the Escrowee imposed
with respect to the transaction provided for herein;
3. the cost to record the Deed to Purchaser;
4. all escrow charges imposed with respect to any loan to be funded
to Purchaser; and
5. any other closing costs and expenses customarily paid by buyers
necessary to effectuate the transactions contemplated by this Agreement
(other than costs specifically allocated to Seller above).
Section 6.6 Closing Escrow.
A. Not later than one (1) business day prior to the Closing Date,
Seller shall deposit into the Escrow the following documents ("Seller's
Closing Documents"):
1. The Deed, together with completed transfer declarations as
required by state, county or local law, if any;
2. A bill of sale evidencing the sale of the Personal Property in
the form of Exhibit F-1;
3. An assignment of the Leases, Contracts and Intangible Property
assigning to Purchaser all of Seller's right, title and interest in and
to each of the Leases and to the Contracts and, to the extent
assignable, the Intangible Property in the form of Exhibit F-2;
4. A certificate of the warranties and representations made by
Seller as of the date of the Closing (including an update of the Rent
Roll dated no later than thirty (30) days prior to the Closing Date) in
this Agreement;
5. The materials pertaining to Internal Revenue Code Section 1445
required by this Agreement;
6. A letter to Tenants advising them of the change in management of
the Property and directing them to pay rent to Purchaser or as Purchaser
may direct;
7. Such other and further customary instruments and documents as
Seller's counsel and Purchaser's counsel may reasonably require to
evidence and conclude the transaction contemplated by this Agreement,
including an Owner's Affidavit; and
8. A duly executed Closing Statement.
Seller shall also deliver to Purchaser or cause to be delivered to Purchaser
at the Property any information, documents or materials reasonably requested
by Purchaser to enable Purchaser to take possession of the Property upon
Closing, including, without limitation, the keys to the Property.
B. On or before the Closing Date, Purchaser shall deposit or cause to be
deposited into the Escrow the following items:
1. A duly executed Closing Statement;
2. Such other and further customary instruments and documents as
required by the Title Insurer;
3. Counterpart copies of any of Seller's Closing Documents which
require execution by Purchaser, including Exhibit F-2;
4. A certificate of the warranties and representations made by
Purchaser in this Agreement;
5. A sworn statement disclosing the names of all third parties who
examined or entered the Property on Purchaser's behalf prior to the
Closing Date, the amount of all amounts due to such third parties and
that all such parties have been paid in full;
6. Such other and further customary instruments and documents as
Seller's counsel and Purchaser's counsel may reasonably require to
evidence and conclude the transaction contemplated by this Agreement;
and
7. The amounts required to be paid to Seller pursuant to the
Closing Statement.
Article 7
Other Covenants And Conditions
Section 7.1 Brokers. Seller represents and warrants to Purchaser that,
except for the Brokers, Seller has dealt with no broker or finder with
respect to this Agreement. Seller hereby indemnifies and agrees to save,
defend and hold Purchaser harmless from and against any loss, cost, damage,
claim, liability or expense, including reasonable attorneys' fees and
litigation costs suffered or incurred by Purchaser as a result of Seller's
breach of the foregoing representation and warranty. Seller agrees to pay
the Brokerage Commission to the Brokers at Closing upon conclusion of this
transaction. Purchaser represents and warrants to Seller that, except for
the Brokers, Purchaser has dealt with no broker or finder with respect to
this Agreement. Purchaser hereby indemnifies and agrees to save, defend and
hold Seller harmless from and against any loss, cost, damage, claim,
liability or expense, including reasonable attorneys' fees and litigation
costs suffered by Seller as a result of Purchaser's breach of the foregoing
representation and warranty.
Section 7.2 Condemnation. If, prior to the Closing, any proceeding in
condemnation or eminent domain is threatened or commenced which relates to
(i) the proposed taking of any portion of the Property having a value
reasonably estimated by Seller to be in excess of $100,000.00; (ii) the
proposed taking or closing of any material right of access to the Property;
or (iii) the proposed taking of any parking spaces which would cause the
Property to be out of conformity with zoning laws, then Purchaser shall have
the right and option to terminate this Agreement by giving Seller written
notice to such effect within twenty (20) days after actual receipt of written
notification of any such occurrence or occurrences. Failure to give such
notice within such time period shall be conclusive evidence that Purchaser
has waived the right and option to terminate by reason of the occurrence or
occurrences of which it has received notice. If Purchaser elects to close
the subject transaction, Purchaser shall be credited with or be assigned all
of Seller's right to any proceeds therefrom. Seller hereby agrees to give
Purchaser written notice with respect to any such proceedings within seventy-
two (72) hours of Seller's receipt of any such notice of the institution of
such proceedings. If Purchaser elects to so terminate this Agreement, this
Agreement shall become null and void and of no further force and effect, and
the Earnest Money Deposit shall be returned promptly to Purchaser. If any
other taking or condemnation not described in this Section occurs or is
threatened prior to Closing, Purchaser shall receive either an assignment of
Seller's rights with respect thereto or such proceeds as have been paid to
Seller with respect to that taking or condemnation.
Section 7.3 Casualty. If, subsequent to the date hereof and prior to
the Closing Date, all or any portion of the Property which will cost more
than $100,000.00 to repair or restore (in the reasonable judgment of Seller)
shall be destroyed or damaged by one or more incidents of vandalism, fire
and/or other casualty, whether or not covered by insurance, Seller may elect<PAGE>
to delay the Closing Date by thirty (30) days and restore the Property to its
prior condition. If Seller does not elect to restore the Property to its
prior condition, Seller shall give Purchaser notice of such occurrence, and
Purchaser may, within fifteen (15) days after receipt of such notice, elect
to (i) terminate this Agreement, in which event the Earnest Money Deposit
shall be returned forthwith to Purchaser, all obligations of the parties
hereunder shall cease and this Agreement shall have no further force and
effect, or (ii) close the transaction contemplated hereby as scheduled
(except that if the Closing Date is less than fifteen (15) days following
Purchaser's receipt of such notice, closing shall be delayed until Purchaser
makes such election), in which event Purchaser shall have the right to
participate in the adjustment and settlement of any insurance claim relating
to said damage, and Seller shall assign and/or pay to Purchaser at closing
all insurance proceeds (and other related choses in action, if any) collected
or claimed with respect to said loss or damage plus any deductible or self-
insured amount. In the event of any other damage or destruction to the
Property not described in this Section, Seller shall either assign all
insurance claims pertaining to such damage or destruction to Purchaser by
executing and delivering to Purchaser at Closing and thereafter all required
proofs of loss, assignments of claims and other similar items, or allow
Purchaser a credit against the Purchase Price in an amount equal to the cost
of repair as reasonably estimated by Seller and Purchaser. If Purchaser
elects to take an assignment of all insurance claims as provided for above,
Purchaser shall receive at closing a credit against the Purchase Price in an
amount equal to any deductible(s) and uninsured amounts applicable thereto.
Section 7.4 Affidavit Regarding Foreign Transferor. At Closing, Seller
shall deliver to Purchaser and to the Escrowee either: (i) an affidavit in a
form acceptable to Purchaser, or (ii) a qualifying statement from the U.S.
Treasury Department that the transaction is exempt from the withholding tax
requirement imposed by Section 1445A ("Section 1445A") of the Internal
Revenue Code, as amended from time to time, and the rules and regulations
promulgated thereunder. If Seller fails to deliver either the affidavit or
the qualifying statement, as aforesaid, Seller agrees that Purchaser may, at
Closing, deduct and withhold from the proceeds that are due to Seller the
amount necessary to comply with the withholding tax requirement imposed by
Section 1445A. Purchaser shall deposit the amount so withheld in escrow with
the Escrowee pursuant to terms and conditions acceptable to Seller, Purchaser
and Escrowee, but in any event complying with Section 1445A.
Article 8
Definitions
Section 8.1 Definitions. As used herein, the following terms shall have
the following meanings:
Agreement: This Agreement, including all exhibits and
schedules hereto, all of which are incorporated
into this Agreement by this reference.
Amount Notice: As defined in Section 5.2.2.
Approved Affiliate: Any entity in which Purchaser is a general
partner, the managing partner or the managing
member or any affiliate of Purchaser which is
approved in writing by Seller, which approval
shall not be unreasonably withheld or delayed.
Breach: As defined in Section 5.2.2.
Breach Notice: As defined in Section 5.2.2.
Closing: As defined in Section 6.3.
Closing Date: As defined in Section 1.1.
Closing Statement: As defined in Section 6.4.
Contingency Period
Expiration Date: As defined in Section 1.1.
Contingency Period: As defined in Section 3.2.
Contracts: All written or oral contracts and agreements
affecting the Property pursuant to which goods
or services are furnished to or for the benefit
of the Real Property, which will survive the
Closing Date, but excluding the Leases and any
documents evidencing the Permitted Title Ex-
ceptions; the Contracts are identified on
Exhibit D.
Cure Amount: As defined in Section 4.5.
Deed: As defined in Section 2.1.
Environmental Laws: All Legal Requirements regulating, relating to
or imposing liability or standards concerning
or in connection with Hazardous Materials.
Escrow: As defined in Section 6.3.
Escrowee: As defined in Section 1.1.
Governmental
Authority: The United States of America, or any state,
county, municipality or other unit of local
government, or any agency, board or other
public entity empowered or constituted by any
of them having jurisdiction over the Property
or its use or ownership.
Hazardous Material: Any substance, material, waste, gas, or
particulate matter which is: (i) defined as a
"hazardous waste," "hazardous material,"
"hazardous substance," "extremely hazardous
waste," or "restricted hazardous waste" under
any provision of the laws of the State of
California or the laws of the United States;
(ii) petroleum; (iii) asbestos; (iv) polychlor-
inated biphenyl; (v) radioactive material; (vi)
designated as a "hazardous substance" pursuant
to Section 311 of the Clean Water Act, 33
U.S.C. Sec. 1251 et seq.; (vii) defined as a
"hazardous waste" pursuant to Section 1004 of
the Resource Conservation and Recovery Act, 42
U.S.C. Sec. 6901 et seq.; or (viii) defined as
a "hazardous substance" pursuant to Section 101
of the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Sec.
9601 et seq.
Improvements: All buildings, structures, fixtures, facilities
and other improvements of every kind located on
and under the Real Property, including any and
all plumbing, air conditioning, heating,
ventilating, mechanical, electrical and other
utility systems, landscaping, roadways, side-
walks, swimming pools and other recreational
facilities, security devices, signs and light
fixtures, but not including publicly owned or
privately owned utility lines.
Intangible
Property: All intangible property which pertains to the
Real Property or the Personal Property, in-
cluding all trademarks, tradenames, guarantees,
warranties, licenses, permits, certificates of
occupancy and authorizations or other matters
issued by any Governmental Authority; certain
items of Intangible Property are identified on
Exhibit C.
Kemper Investment
Committee: The investment committee within the Kemper
group of affiliated companies with authority to
approve Seller's execution and delivery of this
Agreement.
Legal Requirements: All laws, statutes, regulations and require-
ments of any Governmental Authority having
jurisdiction over the Property.
Leases: All leases and other agreements for the occu-
pancy of any portion of the Property.
Management
Personnel: Michael Weisel, Vince Cozzi, Dan Daul, and
Cathy Escobar.
Owner's Policy: As defined in Section 4.2.
Permitted Title
Exceptions: Those matters listed on Exhibit B.
Personal Property: All equipment, furniture, furnishings, appli-
ances, supplies and other personal property
owned by Seller of every nature and description
attached, pertaining to, or used in connection
with the Real Property or the Improvements,
excepting such items as are owned by the
Tenants under the Leases including, without
limitation, those items of the Personal Proper-
ty set forth on Exhibit E.
Property: The Real Property, the Personal Property, the
Leases, the Contracts and the Intangible
Property.
Property Documents: As defined in Section 3.1.
Prorations: As defined in Section 6.4.
Purchase Price: The consideration payable by Purchaser to
Seller for the Property and for all other
benefits to Purchaser provided for in this
Agreement, as stated in Section 1.1.
Purchaser: Stonesfair Financial Corporation, a California
corporation.
Real Property: The land which is described on Exhibit A,
together with the Improvements and all rights,
easements and appurtenances thereto belonging,
which is commonly known as Fox Ridge
Apartments.
Rent Roll: As defined in Section 3.1.
Seller: Kemper/Cymrot Real Estate Investment Fund A,
L.P., a Delaware limited partnership.
Seller Title Defect: As defined in Section 4.4.
Studies: As defined in Section 3.2.
Survey: A current survey of the Property prepared by a
surveyor licensed by the state in which the
Real Property is located and certified to
Purchaser and the Title Insurer which survey
shall: (i) be prepared in accordance with the
Minimum Detail Standards for Land Title Surveys
of the American Title Association and American
Congress on Surveying and Mapping for a Class A
or Urban survey; (ii) state the legal descrip-
tion and street address of the Property; (iii)
show all improvements, including fences;
easements, whether visible or recorded; utility
lines; roads and other means of physical and
record ingress and egress to and from the
Property; (iv) state recording information
concerning any instrument which creates a right
or an interest the existence or presence of<PAGE>
which is shown on the Survey; (v) shall be
dated on or after the date of this Agreement;
and (vi) shall contain a certification iden-
tifying the portions of the Property which are
located in any area designated by a
Governmental Authority as a flood prone or
flood hazard area.
Tenant: A party in possession of a portion of the
Property pursuant to one of the Leases.
Termination Notice: As defined in Section 3.3.
Title Commitment: A commitment for a CLTA Owner's Policy of Title
Insurance issued by the Title Insurer in the
amount of the Purchase Price covering title to
the Property on or after the date of this
Agreement, which title commitment shall show
Seller as owner of the Property in fee simple,
subject only to the Permitted Title Exceptions
and other exceptions pertaining to liens or
encumbrances of a definite or ascertainable
amount which may be removed by the payment of
money at the Closing.
Third Party Title Defect: As defined in Section 4.4.
Title Defect: As defined in Section 4.3.
Title Documents: The Survey and the Title Commitment.
Title Insurer: First American Title Insurance Company.
Article 9
Miscellaneous
Section 9.1 Assurances Of Cooperation. The parties hereby covenant and
agree that they will at any time prior to or after the Closing, and from time
to time do, execute, acknowledge and deliver, or will cause to be done,
executed, acknowledged and delivered all such further acts, documents and
instruments as may reasonably be required by the other party in order to
carry out fully and effectuate the transaction herein contemplated in
accordance with the provisions of this Agreement.
Section 9.2 Successors And Permitted Assigns. This Agreement shall be
binding in all respects on and shall inure to the benefit of the Seller and
Purchaser and their respective successors and permitted assigns. Purchaser
may assign its rights, title and interest under this Agreement to an Approved
Affiliate at any time prior to the Closing Date, provided, however, that
Purchaser shall notify Seller or its attorneys in writing no later than ten
(10) days prior to the Closing Date of the name of such Approved Affiliate.
Except as provided in the foregoing sentence, neither party hereto may assign
any of its interests under this Agreement without the prior written consent
of the other party. This Agreement is made for the sole and exclusive
benefit of the parties hereto and their respective successors and permitted
assigns; no third party is intended to have or shall have any rights under
this Agreement.
Section 9.3 Interpretation.
A. This Agreement represents the entire agreement between the
parties hereto and shall not be modified or affected by any offer,
proposal, statement or representation, oral or written, made by or for
either party in connection with the negotiation of the terms hereof. No
future modification, termination or amendment of this Agreement may be
made, except by written agreement executed by the parties hereto.
B. No failure by the parties hereto to insist upon the strict
performance of any covenant, duty, agreement or condition of this
Agreement or to exercise any right or remedy upon a breach thereof shall
constitute a waiver of any such right or remedy or any other covenant,
agreement, term or condition. Any party to this Agreement may by
written notice waive any of its rights or any conditions to the
obligations hereunder, or any duty, obligation or covenant of any other
party hereto.
C. If any provision of this Agreement or the application thereof to
any person or circumstance shall be invalid or unenforceable to any
extent, the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected
thereby and shall be enforced to the fullest extent permitted by law.
D. Time shall be of the essence of this Agreement and the
performance of all covenants, agreements and obligations hereunder.
E. Use of the terms "include", "including", or "includes", followed
by specific examples shall not be deemed to limit the object of the
reference to the specific examples.
F. The masculine, feminine or neuter pronouns used herein shall be
interpreted without regard to gender, and the use of the singular or
plural shall be deemed to include the other whenever the context so
requires. The headings in this Agreement are inserted for convenience
or reference only and shall not be a part of or control or affect, the
meaning of this Agreement.
G. This Agreement may be executed in any number of counterparts,
and each counterpart shall constitute an original instrument, but all
such separate counterparts shall constitute one and the same agreement.
H. The validity, construction and enforceability of this Agreement
shall be governed in all respects by the laws of the State of Illinois,
without regard to its conflict of laws rules.
Section 9.4 Survival. All provisions of this Agreement which are
expressly stated to survive the Closing shall not merge with, be extinguished
or otherwise affected by the Deed or any of the Closing Documents. The
indemnification provisions of Article 3 shall survive any termination of this
Agreement, and shall survive the Closing.
Section 9.5 Joint Cooperation. Upon obtaining knowledge of any event
which could give rise to a claim of indemnity under this Agreement, the party
seeking indemnification shall promptly notify each other party of that event.
If such claim or demand relates to a claim or demand asserted by a third
party, the indemnifying party shall have the right, at its expense, to employ
counsel to defend such claim or demand and the indemnified party shall have
the right, but not the obligation, to participate in the defense of any such
claim or demand. So long as the indemnifying party is defending such claim
or demand in good faith, the indemnified party will pay its own attorneys'
fees for participating in such defense and will not settle such claim or
demand without the indemnifying party's consent. The indemnified party shall
make available to the indemnifying party all records and other materials
reasonably required by it in contesting a claim or demand asserted by a third
party against the indemnified party and shall cooperate in the defense
thereof. The indemnifying party shall make available to the indemnified
party all records and other materials in connection with contesting a claim
or demand asserted by a third party. The parties shall make their records
available to each other to the extent required to comply with any audit or
other review of a party's records or tax returns by a governmental agency.
Section 9.6 Publicity. Neither Purchaser nor Seller shall announce or
disclose publicly the terms or provisions hereof without the prior written
approval of the other party, except as such disclosure may be required by law
and except that this provision shall not prohibit either party from
disclosing such terms or provisions to its attorneys, accountants, lenders,
bankers, financial advisors or any other advisor or consultant. Neither
Seller nor Purchaser shall record this Agreement or any evidence thereof in
the public records of the county in which the Real Property is located.
Section 9.7 Notices. All elections, notices and other communications to
be given hereunder by either party to the other shall be in writing and sent
by personal delivery, overnight courier with evidence of receipt, or
certified or registered mail, return receipt requested, postage prepaid,
addressed:
If to Seller: Kemper/Cymrot Real Estate Investment Fund A, L.P.
c/o Kemper Corporation
120 S. LaSalle Street
13th Floor
Chicago, Illinois 60602
Attention: Real Estate Investment Group
with a copy to: Kemper Corporation
Legal Department, C-3
One Kemper Drive
Long Grove, Illinois 60049
Attention: General Counsel
with a copy to: KFC Portfolio Corp.
c/o Kemper Corporation
120 S. LaSalle Street
22nd Floor
Chicago, Illinois 60602
Attention: Legal Department
Real Estate Counsel
with a copy to: Rudnick & Wolfe
203 North LaSalle Street
18th Floor
Chicago, Illinois 60601
Attention: Kenneth Hartmann, Esq.
If to Purchaser: Stonesfair Financial Corporation
800 Airport Boulevard, Suite 502
Burlingame, California 94010
Attention: Mr. Karl E. Bakhtiari, President
with a copy to: R. Thomas Fair, Esq.
800 Airport Boulevard, Suite 502
Burlingame, California 94010
or at such other addresses as the parties may designate to the other by
written notice in the manner herein provided. Any such notices or election
shall be effective at the following times: (i) upon delivery, if personally
delivered; (ii) one (1) day after delivery to the overnight courier; or (iii)
three (3) days after depositing same in the United States mails.
Section 9.8 Kemper Investment Committee Approval. This Agreement and
the obligations of Seller under this Agreement are subject to approval hereof
by the Kemper Investment Committee. In the event the Kemper Investment
Committee does not approve this transaction on or before May 10, 1995, this
Agreement shall terminate upon notice thereof from Seller to Purchaser, with
no survival of any obligations of any party, except as stated in Article 3.
IN WITNESS WHEREOF, Seller and Purchaser have executed this Agreement
the day and year first above written.
KEMPER/CYMROT REAL ESTATE INVESTMENT FUND A,
L.P., a Delaware limited partnership
By: Kemper/Cymrot Partners, L.P., a Delaware
limited partnership, its general partner
By: Kemper Real Estate, Inc., a Delaware
corporation, its managing general partner
By:
Its Authorized Signatory
By:
Its Authorized Signatory
STONESFAIR FINANCIAL CORPORATION, a California
corporation
By: /s/ Karl E. Bahktiari
Name: Karl E. Bahktiari
Title: President
EXHIBIT A
To That
Agreement To Purchase And Sell Apartment Property
made by
Stonesfair Financial Corporation
and
Kemper/Cymrot Real Estate Investment Fund A, L.P.
The Real Property
All that certain real property situated in the State of California,
County of Sacramento, Unincorporated Area, described as follows:
Lots 1 through 4, inclusive, as shown on the map entitled "PLAT OF
FOX RIDGE, a condominium, Lots 3 and 4 as shown on the Map of
Rosemont Garden Apartments Unit No. 1, 62 BM 31", recorded in the
office of the County Recorder of Sacramento County on February 15,
1984, in Book 156 of Maps, Map No. 10.
EXHIBIT B
To That
Agreement To Purchase And Sell Apartment Property
made by
Stonesfair Financial Corporation
and
Kemper/Cymrot Real Estate Investment Fund A, L.P.
The Permitted Title Exceptions<PAGE>
1. General real estate taxes not yet due and payable.
2. Acts done or suffered by Purchaser or persons claiming by or
through Purchaser.
3. Rights of tenants as tenants only under leases of the Property as
parties in possession.
4. Purchaser hereby acknowledges that Seller is authorized at any time
within the first five (5) business days after Seller's receipt of the Title
Commitment to insert a list of additional Permitted Title Exceptions.
5. Taxes or assessments which are not shown as existing liens by the
records of any taxing authority that levies taxes or assessments on real
property or by the public records.
6. Any facts, rights, interests, or claims which are not shown by the
public records but which could be ascertained by an inspection of said land
or by making inquiry of persons in possession thereof.
7. Easements, claims of easement or encumbrances which are not shown
by the public records.
8. Discrepancies, conflicts in boundary lines, shortage in area,
encroachments or any other facts which a correct survey would disclose, and
which are not shown by the public records.
9. Unpatented mining claims: reservations or exceptions in patents or
in acts authorizing the issuance thereof: water rights, claims, or title to
water.
10. Any lien, or right to a lien, for services, labor or material
theretofore or hereafter furnished, imposed by law and not shown by the
public records.
11. Any taxes for the fiscal year 1994-95, a lien not yet due or
payable.
12. "The lien of supplemental taxes, if any, assessed pursuant to
Chapter 3.5 commencing with Section 75 of the California Revenue and Taxation
Code."
13. Any unpaid amounts now owing for utilities, of record or not, due
the City or County of Sacramento. Amounts may be ascertained by contacting
the City at 264-5454 or the County at 855-8555.
14. Easement for transmission and distribution for electricity and
communication and incidental purposes thereto, granted to Sacramento
municipal utility district and the Pacific Telephone and Telegraph Company in
the instrument,
Recorded : August 9, 1960, Book 4098, Page 234, Official
Records;
Affects : The North 5 feet of Lots 1 and 4.
15. Easement for pole lines and incidental purposes thereto, granted to
Sacramento Municipal Utility District and the Pacific Telephone and Telegraph
Company in the instrument,
Recorded : August 9, 1960, Book 4104, Page 452, Official
Records;
Affects : The North 5 feet of Lots 1 and 4.
16. Easements as shown on the filed map as follows:<PAGE>
An easement for public utilities and incidental purposes over the
easterly 5 feet of Lot 4 of said Rosemont Garden Apartments (said
easement now affects the easterly 5 feet of Lot 4 of Fox Ridge).
Water and gas pipes and underground wires and conduits, over the
westerly 5 feet of Lot 3 and the Southerly 5 feet of said Rosemont
Garden Apartments (said easement now affects the westerly 5 feet of
Lots 1 and 2, and the southerly 5 feet of Lots 2 and 3 of Fox
Ridge).
NOTE: Lots 1, 2, 3 and 4 of Fox Ridge were formerly described
as Lots 3 and 4 of Rosemont Garden Apartments Unit No. 1.
17. Easement for communication facilities and incidental purposes
thereto, granted to the Pacific Telephone and Telegraph Company in the
instrument,
Recorded : April 29, 1976, Book 7604-29, Page 1172,
Official Records
Affects : The westerly 5 feet of the east 10 feet of
Lot 4.
18. Easements as shown on the filed map as follows:
An easement for public utilities and incidental purposes over the
westerly 12.5 feet of Lots 1 and 2; the southerly 12.5 feet of Lots
2 and 3.
19. Any rights, interest or claims which may exist or arise by reason
of the following, as shown on ALTA Survey dated June 19, 1986, prepared by
KASL Consulting Engineers, Inc., Job No. 4547-01:
Water lines, water meters, fire hydrants, storm drains, sanitary
sewers, smud boxes and telephone vaults, all located within the
paved parking or landscaped areas of the land herein described.
20. An encroachment of existing carports onto Pacific Telephone
Easement recorded April 29, 1976, Book 7604-29, Page 1172, Official Records
and public utility easement dedicated by the Map of Fox Ridge,
Affects : An easterly portion of said land; said
encroachment appears to be approximately 2.5
feet in width, although the actual width is not
disclosed on above mentioned survey.
21. Unrecorded lease upon the terms, covenants and conditions provided
therein,
Lessor : Kemper & Cymrot Real Estate Investment
Lessee : WEB Service Company, Inc.
Disclosed by : Memorandum of Lease
Recorded : May 22, 1992, Book 9205-22, Page 686, Official
Records
EXHIBIT C
To That
Agreement To Purchase And Sell Apartment Property
made by
Stonesfair Financial Corporation
and
Kemper/Cymrot Real Estate Investment Fund A, L.P.
The Intangible Property
Any and all rights, title and interest of Seller to and in the names "Fox
Ridge" and "Fox Ridge Apartments" used in connection with the ownership and
operation of the Property.
EXHIBIT D
To That
Agreement To Purchase And Sell Apartment Property
made by
Stonesfair Financial Corporation
and
Kemper/Cymrot Real Estate Investment Fund A, L.P.
Contracts
The agreements with Western National Property Management, Inc. for the
management of the Property (which will be terminated upon closing) and those
agreements set forth on the attached one page list entitled "Fox Ridge
Contracts/Service Agreements, April 27, 1995".
EXHIBIT E
To That
Agreement To Purchase And Sell Apartment Property
made by
Stonesfair Financial Corporation
and
Kemper/Cymrot Real Estate Investment Fund A, L.P.
Personal Property
Those items set forth on the attached four page list entitled "Fox Ridge
Apartments Personal Property Inventory".
EXHIBIT F-1
To That
Agreement To Purchase And Sell Apartment Property
made by
Stonesfair Financial Corporation
and
Kemper/Cymrot Real Estate Investment Fund A, L.P.
Bill Of Sale
FOR GOOD AND VALUABLE CONSIDERATION the receipt and sufficiency of which
are acknowledged, Kemper/Cymrot Real Estate Investment Fund A, L.P., a
Delaware limited partnership ("Seller"), bargains, sells, assigns, transfers
and delivers to Stonesfair Financial Corporation, a California corporation
("Purchaser"), all of Seller's right, title and interest in and to all
furniture, tangible and intangible personal property, fixtures, equipment,
appliances, carpeting, window treatments, plans and specification and other
contract documentation, machinery and other items located on or used in
connection with the operation and use of the real property and improvements
described in Exhibit "A" attached hereto, including without limitation the
property described on Exhibit "B" attached hereto and by this reference made
a part hereof (collectively, the "Property").
Seller hereby represents and warrants to Purchaser that (a) Seller is
the absolute owner of said property, (b) said property is free and clear of
all liens, charges and encumbrances, and (c) Seller has full right, power and
authority to sell said personal property and to make this Bill of Sale. ALL
WARRANTIES OF QUALITY, FITNESS AND MERCHANTABILITY ARE HEREBY EXCLUDED.
TO HAVE AND TO HOLD all and singular the Property unto Purchaser, its
successors, heirs, executors, administrators and assigns, to their own proper
use and benefit, forever.
IN WITNESS WHEREOF, this Bill of Sale has been executed as of ,
1994.
KEMPER/CYMROT REAL ESTATE INVESTMENT FUND A,
L.P., a Delaware limited partnership
By: Kemper/Cymrot Partners, L.P., a Delaware
limited partnership, its general partner
By: Kemper Real Estate, Inc., a Delaware
corporation, its managing general partner
By:
Its:
By:
Its:
EXHIBIT F-2
To That
Agreement To Purchase And Sell Apartment Property
made by
Stonesfair Financial Corporation
and
Kemper/Cymrot Real Estate Investment Fund A, L.P.
Assignment Of Leases, Contracts And Intangible Rights
THIS ASSIGNMENT is made and entered into as of , 19
("Effective Date") by and between Kemper/Cymrot Real Estate Investment Fund
A, L.P., a Delaware limited partnership ("Assignor"), and Stonesfair
Financial Corporation, a California corporation ("Assignee"), with reference
to the following:
A. In accordance with the terms of Agreement to Purchase and Sell
Apartment Property (the "Purchase Agreement") dated May 5, 1995, Assignor is
conveying to Assignee concurrently herewith the real property and
improvements located thereon, more particularly described on Exhibit "A"
attached hereto (the "Property").
B. In connection with the conveyance of the Property, Assignor and
Assignee intend that all of Assignor's right, title and interest in and under
all contracts, guaranties, warranties, certificates, leases and other matters
relating to the Property be assigned and transferred to Assignee.<PAGE>
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the parties agree that:
1. Assignment. Assignor assigns, conveys transfers and sets over to
Assignee any and all of Assignor's right, title and interest in and to the
following property, including intangible rights and Assignor shall and does
herewith deliver to Assignee the original documents evidencing the following
items:
(a) Leases. All leases with respect to the Property, including without
limitation, tenant leases for those tenants specified in the Rent Roll
attached as Exhibit "B" ("Leases").
(b) Contracts. All those certain contracts and agreements listed on
Exhibit "C" attached hereto relating to the Property ("Contracts").
(c)Intangible Property. All intangible property which pertains to the
Property, including all trademarks, tradenames, guarantees, warranties,
licenses, permits, certificates of occupancy and authorizations or other
matters issued by any Governmental Authority (as defined in the Purchase
Agreement) (the "Intangible Property"); certain items of Intangible Property
are identified on Exhibit C.
2. Assumption. Assignee assumes all liability of Assignor under the
Leases, the Contracts and the Intangible Property, other than liabilities for
acts or omissions of Assignor occurring prior to the date of this Assignment,
which shall remain the responsibility of Assignor. Assignee does not assume
any liability in connection with the Claims (as defined in the Purchase
Agreement).
3. Governing Law. This Assignment shall be governed by and construed in
accordance with the laws of the State of Illinois.
4. Additional Documents. Each party shall, at the request of the other,
execute, acknowledge and deliver whatever additional instruments, and do such
other acts, as reasonably required to accomplish and carry forward the
purposes and intent of this Assignment.
5. Successor and Assigns. This Assignment shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
executors, representatives, successors and assigns.
IN WITNESS WHEREOF this Assignment is executed by the parties on the
date first above written.
KEMPER/CYMROT REAL ESTATE INVESTMENT FUND A,
L.P., a Delaware limited partnership
By: Kemper/Cymrot Partners, L.P., a Delaware
limited partnership, its general partner
By: Kemper Real Estate, Inc., a Delaware
corporation, its managing general partner
By: /s/ John E. Neal
Its Authorized Signatory
By: /s/ John W. Burns
Its Authorized Signatory
STONESFAIR FINANCIAL CORPORATION, a
California corporation
By: /s/ Karl E. Bahktiari
Name: Karl E. Bahktiari
Title: President
EXHIBIT G
To That
Agreement To Purchase And Sell Apartment Property
made by
Stonesfair Financial Corporation
and
Kemper/Cymrot Real Estate Investment Fund A, L.P.
Claims
Purchaser hereby acknowledges that Seller is authorized at any time within
the first five business days after the date of this Agreement to insert a
list of Claims to this Exhibit G.
EXHIBIT H
To That
Agreement To Purchase And Sell Apartment Property
made by
Stonesfair Financial Corporation
and
Kemper/Cymrot Real Estate Investment Fund A, L.P.
The Required Documents
1. Seller's most recent evidence of the condition of title to the Real
Property;
2. Seller's most recent survey of the Real Property;
3. Copies of real estate tax bills and personal property tax bills is-
sued with respect to the Property for the two calendar years preceding the
date of this Agreement;
4. To the extent in Seller's possession, copies of any environmental
audits or site assessments, structural reports, mechanical reports,
engineering reports, soil reports, and traffic studies regarding the Property
in Seller's possession;
5. Copies of all written Contracts affecting the Property;
6. To the extent in Seller's possession, copies of the certificates of
occupancy and building permits for the Improvements;
7. A current rent roll ("Rent Roll") for the Property, in the form
customarily prepared by Seller, which shall show: (a) the name and apartment
number of each Tenant; (b) the term of the Tenant's Lease and the expiration
dates thereof; (c) the amount of monthly rental and any other rental due<PAGE>
thereunder; and (d) the amount of security and other deposits due under the
Lease and held by Seller;
8. Monthly reports in a form customarily prepared by Seller showing
(a) delinquencies in rent from Tenants for the current month, (b) lease
expiration dates, (c) the date of each Tenant's cash deposit for the current
month; and (d) the amount of any rent concessions given to Tenants;
9. A blanket certificate of insurance with a report indicating the
amounts of coverage applicable to the Property;
10. To the extent available from Seller's insurance broker, a report of
all claims made against the Property's property and liability insurance
policies since January 1, 1993;
11. True and correct copies of unaudited operating income, expense and
capital expenditure statements regarding the Property in the form prepared by
Seller, reflecting the operating history of the Property for calendar years
1993, 1994 and year-to-date 1995 prepared on a monthly and annual basis; and
12. To the extent in Seller's possession, copies of all warranties and
guaranties currently in force, if any, relating to the Property.
FIRST AMENDMENT TO
AGREEMENT TO PURCHASE AND SELL APARTMENT PROPERTY
This FIRST AMENDMENT TO AGREEMENT TO PURCHASE AND SELL APARTMENT
PROPERTY ("Amendment"), is made as of the 5th day of June, 1995, by and
between Kemper/Cymrot Real Estate Investment Fund A, L.P., a Delaware limited
partnership ("Seller"), and Stonesfair Financial Corporation, a California
corporation ("Purchaser").
RECITALS
A. Seller and Purchaser have entered into that Agreement To Purchase
And Sell Apartment Property dated as of the 5th day of May, 1995 (the
"Agreement") for the purchase and sale of the Fox Ridge Apartments, which is
a 180 unit apartment project located at 3715 Tallyho Drive, Sacramento,
California. Terms defined in the Agreement are used with the same meanings
herein.
B. Seller and Purchaser have agreed to amend and confirm the Agreement
on the terms and conditions stated in this Amendment.
NOW, THEREFORE, in consideration of the respective agreements, covenants
and conditions contained in this Amendment, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties to this Amendment agree as follows:
1. Defined Terms. The definitions of the following terms in Section
1.1 of the Agreement are hereby deleted and the following are substituted in
lieu thereof:
Contingency Period
Expiration Date: June 14, 1995
Closing Date: June 23, 1995.
2. Confirmation. Except as expressly modified by the terms of this
Amendment, the parties hereby confirm and ratify the Agreement and agree that
the Agreement is and shall continue in full force and effect.
3. Interpretation.
A. This Amendment represents the entire agreement between the
parties hereto regarding amendments to the Agreement. No future
modification, termination or amendment of the Agreement may be made,
except by written agreement executed by the parties hereto.
B. This Amendment may be executed in any number of counterparts,
and each counterpart shall constitute an original instrument, but all
such separate counterparts shall constitute one and the same agreement.
D. The validity, construction and enforceability of this Amendment
shall be governed in all respects by the laws of the State of Illinois,
without regard to its conflict of laws rules.
IN WITNESS WHEREOF, Seller and Purchaser have executed this Amendment as
of the day and year first above written.
KEMPER/CYMROT REAL ESTATE INVESTMENT FUND
A, L.P., a Delaware limited partnership
By: KEMPER/CYMROT PARTNERS, L.P., a
Delaware limited partnership, its
general partner
By: KEMPER REAL ESTATE, INC., a Delaware
corporation, its managing general
partner
By: /s/ John E. Neal
Its Authorized Signatory
By: /s/ John W. Burns
Its Authorized Signatory
STONESFAIR FINANCIAL CORPORATION, a
California corporation
By: /s/ R. Thomas Fair
Name: R. Thomas Fair
SECOND AMENDMENT AND REINSTATEMENT OF
AGREEMENT TO PURCHASE AND SELL APARTMENT PROPERTY
This SECOND AMENDMENT AND REINSTATEMENT OF AGREEMENT TO PURCHASE AND
SELL APARTMENT PROPERTY ("Second Amendment"), is made as of the 14th day of
June, 1995, by and between Kemper/Cymrot Real Estate Investment Fund A, L.P.,
a Delaware limited partnership, ("Seller") and Stonesfair Financial
Corporation, a California corporation ("Purchaser").
RECITALS
A. Seller and Purchaser have entered into that Agreement To Purchase
And Sell Apartment Property dated as of the 5th day of May, 1995 (the
"Original Agreement") for the purchase and sale of the Fox Ridge Apartments,
which is a 180 unit apartment project located at 3715 Tallyho Drive,
Sacramento, California. Terms not otherwise defined herein shall have the
meaning attributed thereto in the Agreement.
B. Seller and Purchaser amended certain terms of the Original
Agreement pursuant to that certain First Amendment to Agreement to Purchase
and Sell Apartment Property dated as of June 5, 1995 (the "First Amendment;"
the Original Agreement, as amended by the First Amendment is referred to
herein as the "Agreement").
C. Pursuant to Section 3.3 of the Agreement, by letter dated June 14,
1995, Purchaser delivered to Seller a Termination Notice terminating the
Purchaser's obligations under the Agreement.
D. Seller and Purchaser have agreed to reinstate the Agreement and to
amend the Agreement pursuant to the terms and conditions stated in this
Second Amendment.
NOW, THEREFORE, in consideration of the respective agreements, covenants
and conditions contained in this Second Amendment, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties to this Second Amendment agree as follows:
1. Reinstatement and Confirmation. Purchaser and Seller hereby
reinstate the Agreement and confirm that Purchaser has elected to conclude
the transaction contemplated by the Agreement. Except as expressly modified
by the terms of this Second Amendment, the parties hereby confirm and ratify
the Agreement and agree that the Agreement shall continue in full force and
effect. Notwithstanding the Termination Notice previously delivered by
Purchaser to Seller or any other correspondence or documents to the contrary,
Purchaser hereby waives its right to provide a Termination Notice pursuant to
Section 3.3 of the Agreement. Purchaser hereby confirms that following
Purchaser's review during the Contingency Period, there are no Title Defects.
2. Purchase Price. The definition of the following term in Section
1.1 of the Agreement is hereby deleted and the following is substituted in
lieu thereof:
Purchase Price: $6,527,500.00
3. Credit for Capital Improvements. In the course of Purchaser's
review during the Contingency Period, Purchaser has determined that there are
certain capital improvements that, in Purchaser's opinion, will be required
to be made to the Property. In order to make such improvements Seller hereby
agrees to provide Purchaser at the Closing with a credit, as reflected on the
Closing Statement, in the amount of $310,000 (the "Improvement Credit") less
the difference between (a) any and all closing costs to be paid by Seller
pursuant to Section 6.5 of the Agreement based on the Purchase Price and (b)<PAGE>
such closing costs based on the Purchase Price less the Improvement Credit,
which difference shall include, without limitation, the difference between
the title insurance premium for the Owner's Policy to be paid by Seller based
on the Purchase Price and such title insurance premium based on the Purchase
Price less the Improvement Credit, and the difference between the amount of
any and all state, county or local transfer taxes to be paid by Seller based
on the Purchase Price and such transfer taxes based on the Purchase Price
less the Improvement Credit.
4. Brokerage Commission. The definition of the following term in
Section 1.1 of the Agreement is hereby deleted and the following is
substituted in lieu thereof:
Brokerage Commission: $186,525.00
5. Interpretation.
A. This Second Amendment represents the entire agreement between
the parties hereto regarding amendments to the Agreement. No future
modification, termination or amendment of the Agreement may be made,
except by written agreement executed by the parties hereto.
B. This Second Amendment may be executed in any number of counter-
parts, and each counterpart shall constitute an original instrument, but
all such separate counterparts shall constitute one and the same
agreement.
D. The validity, construction and enforceability of this Second
Amendment shall be governed in all respects by the laws of the State of
Illinois, without regard to its conflict of laws rules.
IN WITNESS WHEREOF, Seller and Purchaser have executed this Second
Amendment as of the day and year first above written.
KEMPER/CYMROT REAL ESTATE INVESTMENT FUND
A, L.P., a Delaware limited partnership
By: KEMPER/CYMROT PARTNERS, L.P., a
Delaware limited partnership, its
general partner
By: KEMPER REAL ESTATE, INC., a Delaware
corporation, its managing general
partner
By: /s/ John E. Neal
Its Authorized Signatory
By: /s/ John W. Burns
Its Authorized Signatory
STONESFAIR FINANCIAL CORPORATION, a
California corporation
By: /s/ R. Thomas Fair
Name: R. Thomas Fair
