SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported) April 13, 1995
PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP
(Exact name of registrant as specified in its charter)
Delaware 0-15036 04-2841746
(State or other jurisdiction) (Commission (IRS Employer
of incorporation File Number) Identification No.)
265 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-8118
(Former name or address, if changed since last report)
FORM 8-K
CURRENT REPORT
PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP
ITEM 2 - DISPOSITION OF ASSETS
Cordova Creek - Memphis, Tennessee
Disposition Date - April 13, 1995
On April 13, 1995, the Partnership sold the Cordova Creek Apartments, located in
Memphis, Tennessee, to an unaffiliated third party for $9,100,000. After
payment of required transaction costs and compensation to Paine Webber Qualified
Plan Property Fund Three, LP, an affiliated partnership, for its 3.5% equity
interest in the property, the net proceeds realized by the Partnership from the
sale were approximately $8.6 million. Management expects to distribute
substantially all of the net proceeds to the Limited Partners, most likely in
June 1995.
ITEM 7 - FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements: None
(b) Exhibits:
(1) Agreement of Purchase and Sale between Paine Webber Qualified
Plan Property Fund Three, LP, Paine Webber Qualified Plan
Property Fund Four, LP, and SRE Acquisition Corp.
(2) Amendment letter dated February 27, 1995 to Agreement of Purchase
and Sale between Paine Webber Qualified Plan Property Fund Three,
LP, Paine Webber Qualified Plan Property Fund Four, LP, and SRE
Acquisition Corp.
(3) Amendment letter dated March 20, 1995 to Agreement of Purchase
and Sale between Paine Webber Qualified Plan Property Fund Three,
LP, Paine Webber Qualified Plan Property Fund Four, LP, and SRE
Acquisition Corp.
(4) Amendment dated April 12, 1995 to Agreement of Purchase and Sale
between Paine Webber Qualified Plan Property Fund Three, LP,
Paine Webber Qualified Plan Property Fund Four, LP, and SRE
Acquisition Corp. FORM 8-K
CURRENT REPORT
PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PAINE WEBBER QUALIFIED PLAN
PROPERTY FUND FOUR, LP
(Registrant)
By:/s/ Walter V. Arnold
Walter V. Arnold
Senior Vice President and
Chief Financial Officer
Date: April 18, 1995 CONFORMED COPY
AGREEMENT OF PURCHASE
AND SALE
dated as of January 12, 1995
between
PAINEWEBBER QUALIFIED PLAN PROPERTY FUND THREE, LP, and
PAINEWEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP,
collectively, as Seller,
and
SRE ACQUISITION CORP.,
as Purchaser
Cordova Creek Apartments
Cordova, Tennessee TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
1.1 Definitions.................................... 1
1.2 Rules of Construction.......................... 4
ARTICLE II
PURCHASE AND SALE;
PAYMENT OF PURCHASE PRICE
2.1 Purchase and Sale; Deposit..................... 4
2.2 Payment of Purchase Price...................... 4
2.3 Inspection and Review.......................... 5
ARTICLE III
SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
3.1 Organization and Power......................... 6
3.2 Authorization and Execution.................... 6
3.3 Noncontravention............................... 7
3.4 Litigation..................................... 7
3.5 Bankruptcy..................................... 7
3.6 Brokerage Commission........................... 7
3.7 Title.......................................... 7
3.8 Leases and Rent Rolls; Schedules............... 7
3.9 Employees...................................... 8
ARTICLE IV
PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
4.1 Organization and Power......................... 9
4.2 Authorization and Execution.................... 10
4.3 Noncontravention............................... 10
4.4 Litigation..................................... 10
4.5 Bankruptcy..................................... 10
4.6 Brokerage Commission........................... 10
ARTICLE V
CLOSING
5.1 Closing........................................ 10
5.2 Seller's Deliveries............................ 11
5.3 Purchaser's Deliveries......................... 12
5.4 Closing Costs.................................. 12
5.5 Income and Expense Allocations................. 12
5.6 Lease Deposits and Fees........................ 13
5.7 Conditions of Closing.......................... 14
5.8 Operations Pending Closing..................... 15
ARTICLE VI
CONDEMNATION; RISK OF LOSS
6.1 Condemnation................................... 16
6.2 Casualty....................................... 16
ARTICLE VII
LIABILITY OF PURCHASER; TERMINATION BY SELLER
7.1 Liability of Purchaser......................... 17
7.2 Termination by Purchaser....................... 17
7.3 Termination by Seller.......................... 17
ARTICLE VIII
ACKNOWLEDGMENTS OF PURCHASER
8.1 Acceptance of Property......................... 17
8.2 Inspections.................................... 17
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 Completeness; Modification..................... 18
9.2 Assignments.................................... 18
9.3 Successors and Assigns......................... 18
9.4 Days........................................... 18
9.5 Governing Law.................................. 18
9.6 Counterparts................................... 19
9.7 Severability................................... 19
9.8 Costs.......................................... 19
9.9 Notices........................................ 19
9.10 Incorporation by Reference..................... 20
9.11 Further Assurances............................. 20
9.12 No Partnership................................. 20
9.13 Time of Essence................................ 20
9.14 Survival....................................... 20
9.15 Confidentiality................................ 20
ARTICLE X
ESCROW AGENT
10.1 Employment..................................... 21
10.2 Exculpation.................................... 21
EXHIBITS
Exhibit A - Description of Land
Exhibit B - Permitted Title Exceptions
Exhibit C - Rent Roll
Exhibit D - List of Tangible Personal Property
Exhibit E - Form of Standard Lease
SCHEDULES
Schedule III - Exceptions to Seller's Representations and Warranties
Schedule 5.8 - Standard Lease Terms
[COPIES OF THE EXHIBITS AND SCHEDULES WILL BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION UPON REQUEST.] AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT OF PURCHASE AND SALE (this "Agreement"), dated as of January
12, 1995, among PAINEWEBBER QUALIFIED PROPERTY FUND THREE, LP, and PAINEWEBBER
QUALIFIED PROPERTY FUND FOUR, LP, a Delaware limited partnership (collectively,
the "Seller"), and SRE ACQUISITION CORP., a Delaware corporation (the
"Purchaser"), provides as follows:
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION{tc \l 1 " ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION"}
1.1 Definitions{tc \l 2 " 1.1 Definitions"}. The following terms
shall have the indicated meanings:
"Act of Bankruptcy" shall mean if a party hereto or any general
partner thereof shall (a) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee or liquidator of itself
or of all or a substantial part of its property, (b) admit in writing its
inability to pay its debts as they become due, (c) make a general assignment for
the benefit of its creditors, (d) file a voluntary petition or commence a
voluntary case or proceeding under the Federal Bankruptcy Code (as now or
hereafter in effect), (e) be adjudicated bankrupt or insolvent, (f) file a
petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment of debts,
(g) fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case or proceeding
under the Federal Bankruptcy Code (as now or hereafter in effect), or (h) take
any corporate action for the purpose of effecting any of the foregoing; or if a
proceeding or case shall be commenced, without the application or consent of a
party hereto or any general partner thereof, in any court of competent
jurisdiction seeking (a) the liquidation, reorganization, dissolution or
winding-up, or the composition or readjustment of debts, of such party or
general partner, (b) the appointment of a receiver, custodian, trustee or
liquidator or such party or general partner of all or any substantial part of
its assets, or (c) other similar relief under any law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment of debts,
and such proceeding or case shall continue undismissed, or an order (including
an order for relief entered in an involuntary case under the Federal Bankruptcy
Code, as now or hereafter in effect) judgment or decree approving or ordering
any of the foregoing shall be entered and continue unstayed and in effect, for a
period of 60 consecutive days.
"Bill of Sale and Assignment" shall mean that certain bill of sale and
assignment conveying title to the Tangible Personal Property from the Seller to
the Purchaser, assigning to the Purchaser all of the Seller's right, title and
interest in and to the Intangible Personal Property and confirming the
representations and warranties set forth in Section 3.7 hereof as to the
Tangible Personal Property.
"Closing" shall mean the closing of the purchase and sale of the
Property, which shall occur on the Closing Date.
"Closing Date" shall have the meaning set forth in Section 5.1 hereof.
"Deed" shall mean that certain deed conveying title to the Real
Property with special warranty from the Seller to the Purchaser, subject only to
the Permitted Title Exceptions.
"Deposit" shall mean collectively (i) the earnest money deposit in the
amount of $100,000.00 to be paid by the Purchaser to the Escrow Agent in escrow
upon the execution hereof, and (ii) all interest earned thereon. The Deposit
shall be invested by the Escrow Agent in the manner acceptable to Seller and
Purchaser in accordance with the terms and provisions of this Agreement.
"Documentary Information" shall have the meaning set forth in Section
2.3.
"Due Diligence Period" shall have the meaning set forth in Section
2.3.
"Escrow Agent" shall mean First American Title Insurance Company,
which shall also be the issuer of the owner's title insurance policy referred to
in Section 5.7(b) hereof.
"Governmental Body" means any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign.
"Improvements" shall mean all buildings, improvements, fixtures and
other items of real estate located on the Land.
"Intangible Personal Property" shall mean all intangible personal
property owned or possessed by the Seller and used in connection with the
ownership, operation, leasing, occupancy or maintenance of the Property,
including, without limitation, the right to use the trade name "Cordova Creek
Apartments" and all variations thereof, all of the Leases and any future leases
of space in the Property and all Operating Agreements, all governmental permits
and licenses (to the extent legally assignable), all guarantees and warranties
relating to the Property, all marketing, advertising and promotional materials
relating to the Property and in use as of the date hereof, and, except to the
extent such telephone number is the number of the manager of the Property, the
telephone number currently assigned to the Property, but excluding (i) any of
the aforesaid rights the Purchaser elects not to acquire and (ii) the Seller's
cash on hand, in bank accounts and invested with financial institutions.
"Land" shall mean that certain parcel of real estate lying and being
in Shelby County, Tennessee, as more particularly described on Exhibit A
attached hereto, together with all easements, rights, privileges, remainders,
reversions and appurtenances thereunto belonging or in any way appertaining.
"Leases" shall mean all of the leases now in effect with respect to
the Property, as indicated on the Rent Roll.
"Operating Agreements" shall mean the service contracts and other
agreements, if any, in effect with respect to the construction, ownership,
operation, leasing, occupancy or maintenance of the Property, other than the
property management agreement between Seller and the Property Manager.
"Permitted Title Exceptions" shall mean those exceptions to title to
the Real Property that are shown on Exhibit B attached hereto, and such other
exceptions reflected in the commitment for an owner's title insurance policy
obtained during the Due Diligence Period and to which Purchaser does not object
in writing prior to the end of the Due Diligence Period, in accordance with
Section 2.3 hereof.
"Property" shall mean collectively the Real Property, the Tangible
Personal Property and the Intangible Personal Property.
"Property Manager" shall mean Associated Management, Ltd.
"Purchase Price" shall mean $9,100,000.00, payable in the manner
described in Section 2.2.
"Real Property" shall mean the Land and the Improvements.
"Rent Roll" shall mean that certain rent roll, dated as of November
30, 1994, attached hereto as Exhibit C.
"Seller's Best Knowledge" shall mean the actual knowledge, information
and belief of the Seller, after reasonable inquiry to the Property Manager.
"Tangible Personal Property" shall mean the items of personal property
owned by the Seller, used in connection with the Property and listed on Exhibit
D hereto.
"Utilities" shall mean all utility facilities and services necessary
for the operation and occupancy of the Property.
1.2 Rules of Construction{tc \l 2 " 1.2 Rules of Construction"}. The
following rules shall apply to the construction and interpretation of this
Agreement:
(a) Singular words shall connote the plural number as well as the
singular and vice versa, and the masculine shall include the feminine and the
neuter.
(b) All references herein to particular articles, sections or
subsections, subsections or clauses are references to articles, sections,
subsections or clauses of this Agreement.
(c) The table of contents and headings contained herein are solely
for convenience of reference and shall not constitute a part of this Agreement
nor shall they affect its meaning, construction or effect.
(d) Each party hereto and its counsel have reviewed and revised (or
requested revisions of) this Agreement, and therefore any usual rules of
construction requiring that ambiguities are to be resolved against a particular
party shall not be applicable in the construction and interpretation of this
Agreement or any exhibits hereto or amendments hereof.
ARTICLE II
PURCHASE AND SALE;
PAYMENT OF PURCHASE PRICE{tc \l 1 " ARTICLE II
PURCHASE AND SALE;
PAYMENT OF PURCHASE PRICE"}
2.1 Purchase and Sale; Deposit{tc \l 2 " 2.1 Purchase and Sale;
Deposit"}. The Seller agrees to sell and the Purchaser agrees to acquire the
Property for the Purchase Price and in accordance with the other terms and
conditions set forth herein. The Deposit shall be paid to the Escrow Agent by
the close of business on the date on which this Agreement has been fully
executed by all of the parties hereto.
2.2 Payment of Purchase Price{tc \l 2 " 2.2 Payment of Purchase
Price"}. The Purchase Price shall be paid to the Seller in the following
manner:
(a) The Purchaser shall receive a credit against the Purchase Price
in an amount equal to the Deposit.
(b) The Purchaser shall pay the balance of the Purchase Price, as
adjusted by the prorations and expenses to be paid by the Seller hereunder, to
the Seller before 12:00 noon on the date of Closing by making a wire transfer of
immediately available federal funds to the account of the Seller at a bank or
trust company located in the continental United States and specified in writing
by the Seller.
2.3 Inspection and Review{tc \l 2 " 2.3 Inspection and Review"}. (a)
Purchaser may inspect the Property and conduct at Purchaser's election and
expense, inspections and testing of the Property at any reasonable time during
business hours (in the presence of the Property Manager, if available) from the
date hereof until the date that is 45 days from the date hereof (the "Due
Diligence Period"). Such inspection rights shall include Purchaser's right to
inspect all books, records, correspondence, surveys and other studies, reports
and documentary information in Seller's possession or under Seller's control
with respect to the Property, including, without limitation, all records
relating to governmental licenses and permits, utilities and compliance with
applicable laws (collectively, the "Documentary Information") and Purchaser may
make copies of the same at its own expense. Seller will make such Documentary
Information available to Purchaser at Seller's offices in Boston, Massachusetts
or at the Property. If, during the Due Diligence Period, as a result of the
referenced inspections, testings and reviews or for any other reason, or for no
reason, the Purchaser shall determine in its sole discretion that it is not
satisfied with the Property in any respect, then the Purchaser shall have the
right to terminate this Agreement by written notice to Seller given no later
than the last day of the Due Diligence Period, in which event the Deposit shall
promptly be returned to the Purchaser in accordance with the provisions hereof
and neither party shall have any further liability to the other party under this
Agreement.
(b) If such inspection reveals any fact or condition unacceptable to
Purchaser, at the option of the Purchaser, the Purchaser may in lieu of
terminating the Agreement notify the Seller of such defect or condition in
writing prior to the expiration of the Due Diligence Period and offer Seller the
option of curing such defect or condition. If the Seller elects to cure such
defect or condition, Seller shall use its best efforts to cure such fact or
condition prior to Closing but shall not be obligated to expend any funds in
doing so. Seller agrees to notify the Purchaser within five business days after
receipt of such notice of the specific objectionable conditions it will attempt
to cure as well as the steps it proposes to take to accomplish such cure and
Seller's cure of such condition shall be a condition to Purchaser's obligations
to close under this Agreement. If Seller notifies the Purchaser that Seller
does not elect to exercise such cure option, then the Purchaser shall have the
right to terminate this Agreement by written notice to Seller provided within 2
business days of receipt of Seller's notice, in which event the Deposit shall
promptly be returned to the Purchaser in accordance with the provisions hereof
and neither party shall have any further liability to the other party under this
Agreement. Otherwise, such fact or condition shall be deemed acceptable to
Purchaser.
(c) If the Purchaser fails to terminate this Agreement in strict
compliance with this Section 2.3, then Purchaser shall be deemed to have waived
its right to terminate this Agreement pursuant to this Section 2.3 and shall be
deemed to have elected to proceed to Closing.
(d) If this Agreement is terminated pursuant to this Section 2.3, neither
party shall have any further obligations under this Agreement except as herein
specifically provided. Purchaser shall, within ten days following such
termination, return to Seller copies of all feasibility studies, surveys,
engineering reports and all other Documentary Information obtained by Purchaser
from Seller.
(e) Purchaser hereby agrees to promptly repair any damage resulting to the
Property from such inspections and tests and to indemnify and defend Seller and
hold Seller harmless against any injury, loss or damage, including reasonable
attorney's fees, suffered as a result of such inspections and testing, and
against any damage to the Property caused by such inspections and testing.
(f) Within five Business Days from the date hereof, Seller will deliver to
Purchaser a list of the Operating Agreements. On or before the last day of the
Due Diligence Period, unless Purchaser has provided written notice to Seller of
Purchaser's election to terminate this Agreement, Purchaser shall provide
written notice to Seller of the Operating Agreements that Purchaser desires to
have terminated by Seller. Seller will terminate at or before Closing such of
the Operating Agreements identified in such notice as those to be terminated at
Closing.
(g) All notices given pursuant to this Section 2.3 shall be in writing and
shall be delivered, prepaid, by Federal Express or comparable overnight delivery
service to the party to whom such notice is addressed, with a copy to whoever is
specified in Section 9.9 of this Agreement.
ARTICLE III
SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS{tc \l 1 " ARTICLE III
SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS"}
To induce the Purchaser to enter into this Agreement and to purchase the
Property, except otherwise disclosed in Schedule III (other than in the case of
Subsections 3.1, 3.2, 3.3, 3.5, 3.6 and 3.7), the Seller hereby makes the
following representations, warranties and covenants with respect to the
Property, upon each of which the Seller acknowledges and agrees that the
Purchaser is entitled to rely and has relied:
3.1 Organization and Power{tc \l 2 " 3.1 Organization and Power"}. The
Seller is a limited partnership duly formed and validly existing under the laws
of the State of Delaware, and has all requisite partnership powers and all
authorizations, consents and approvals to enter into and perform its obligations
hereunder and under any document or instrument required to be executed and
delivered on behalf of the Seller hereunder.
3.2 Authorization and Execution{tc \l 2 " 3.2 Authorization and
Execution"}. This Agreement has been duly authorized by all necessary
partnership action on the part of the Seller, has been duly executed and
delivered by the Seller, constitutes the valid and binding agreement of the
Seller and is enforceable in accordance with its terms.
3.3 Noncontravention{tc \l 2 " 3.3 Noncontravention"}. The execution
and delivery of and the performance by the Seller of its obligations hereunder,
do not and will not contravene, or constitute a default under, any provisions of
applicable law or regulation, the Seller's partnership agreement and certificate
of limited partnership or any agreement, judgment, injunction, order, decree or
other instrument binding upon the Seller, or result in the creation of any lien
or other encumbrance on any asset of the Seller.
3.4 Litigation{tc \l 2 " 3.4 Litigation"}. There is no action, suit
or proceeding, pending or known to be threatened against or affecting the Seller
or any general partner of the Seller in any court, before any arbitrator or
before or by any Governmental Body which (a) in any manner raises any question
affecting the validity or enforceability of this Agreement or any other
agreement or instrument to which the Seller is a party or by which it is bound
and that is or is to be used in connection with, or is contemplated by, this
Agreement, or (b) could create a lien on the Property, any part thereof or any
interest therein. To Seller's Best Knowledge, there is no litigation or
administrative proceeding (including without limitation any condemnation or
eminent domain proceeding) pending or threatened with respect to the Property.
3.5 Bankruptcy{tc \l 2 " 3.5 Bankruptcy"}. No Act of Bankruptcy has
occurred with respect to the Seller or any general partner thereof.
3.6 Brokerage Commission{tc \l 2 " 3.6 Brokerage Commission"}. The
Seller has not engaged the services of, and is not and will not become liable
to, any real estate agent, broker, finder or any other person or entity for any
brokerage or finder's fee, commission or other amount with respect to the
transactions described herein.
3.7 Title{tc \l 2 " 3.7 Title"}. Seller is the owner of title in fee
simple to the Real Property, subject to Permitted Title Exceptions, and no
person (including, to Seller's Best Knowledge, any tenant) has any option to
purchase or right of first refusal with respect to the Real Property or any part
thereof. Seller is the owner of good title to the Tangible Personal Property,
free and clear of all security interests, liens and encumbrances.
3.8 Leases and Rent Rolls; Schedules{tc \l 2 " 3.8 Leases and Rent
Rolls; Schedules"}. To Seller's Best Knowledge:
(a) the Rent Roll is, as of the date hereof, and the updated rent roll to
be delivered at Closing, when delivered, will be, true and correct in
all material respects;
(b) the form of lease signed by the tenants whose names appear on the Rent
Roll, and the form of lease to be used from the date of this Agreement
until the Closing Date, is attached as Exhibit E;
(c) no services are provided to any tenant except as described in form of
lease attached as Exhibit E;
(d) the rents stated on the Rent Roll and to be stated on the rent roll to
be delivered at Closing comply with all applicable laws and are not
subject to any rent control regulation or to any agreement with any
governmental authority restricting or imposing income qualifications
with respect to any of the units or any of the tenants of the Real
Property, and Seller does not receive, and has not received, any form
of rental assistance payments on behalf of any tenant as provided in
42 U.S.C. Section 1437, et seq.; and
(e) the list of Operating Agreements to be provided by Seller will be, and
the information contained in Exhibit D is as of the date hereof, true
and correct in all material respects.
The Rent Roll and the updated rent roll to be delivered at Closing includes, or
will include, all free rent, subtenancies and defaults, and specifies, or will
specify, whether any rental units are furnished.
3.9 Employees{tc \l 2 " 3.9 Employees"}. There are no individuals
in the employ of Seller or, to Seller's Best Knowledge, the Property Manager,
being employed for the sole benefit of the Property and who will be required to
be hired or retained by Purchaser subsequent to the Closing Date. Any
employment contracts not assumed by Purchaser and any employees of the Property
(as opposed to employees of the manager of the Property) shall be terminated by
Seller as of the Closing with no liability to Purchaser.
3.10 Financial Statements. To the Seller's Best Knowledge, the financial
statements furnished by the Seller to the Purchaser were true and correct in all
material respects as the date(s) thereof.
3.11 Documentary Information. To the Seller's Best Knowledge, the
Documentary Information will at the time of delivery to Purchaser be complete in
all material respects and Seller will not knowingly omit to deliver or furnish
any information relating to the Documentary Information if such omission would
render such Documentary Information incorrect or incomplete in any material
respect.
3.12 Condition of Premises. To the Seller's Best Knowledge, the Seller
is not aware that any of the following statements concerning the Real Property
or Improvements is untrue or incorrect in any material respect:
(a) the Real Property has access to one or more dedicated public streets
through curb cuts now in place which have been approved by the
applicable governmental authority;
(b) the Improvements are serviced by water and sewer disposal systems with
capacities sufficient to service the Improvements, and all necessary
permits for access to such systems have been obtained and all fees in
connection therewith have been paid;
(c) the Improvements are served by public utilities providing electrical,
gas and telephone services;
(d) the Improvements are in good operating condition and repair, without
material structural or mechanical defects;
(e) all permits required for the use and occupancy of the Improvements
have been obtained;
(f) there are no agreements with or in favor of any governmental authority
and no conditions were imposed by any governmental authority (other
than compliance with laws of general applicability) in connection with
the development of the Real Property and its compliance with
applicable laws; (g) the Improvements comply in all material
respects with all applicable laws governing or regulating the use,
construction and operation thereof (except that no representation is
made with respect to compliance with environmental laws) and comply
in all material respects with the requirements of all insurance
policies applicable to the Real Property and all Permitted Title
Exceptions; and
(h) no special assessment has been levied or authorized for levy on the
Real Property on account of any public improvement in the vicinity.
ARTICLE IV
PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS{tc \l 1 " ARTICLE IV
PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS"}
To induce the Seller to enter into this Agreement and to sell the Property,
the Purchaser hereby makes the following representations, warranties and
covenants with respect to the Property, upon each of which the Purchaser
acknowledges and agrees that the Seller is entitled to rely and has relied:
4.1 Organization and Power{tc \l 2 " 4.1 Organization and Power"}. The
Purchaser is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware; Purchaser or any permitted
assignee of Purchaser will, as of the Closing Date, be duly qualified to
transact business in the State of Tennessee; and Purchaser has all corporate
powers and all governmental licenses, authorizations, consents and approvals to
carry on its business as now conducted and to enter into and perform its
obligations under this Agreement and any document or instrument required to be
executed and delivered on behalf of the Purchaser hereunder.
4.2 Authorization and Execution{tc \l 2 " 4.2 Authorization and
Execution"}. This Agreement has been duly authorized by all necessary corporate
action on the part of the Purchaser. This Agreement has been duly executed and
delivered by the Purchaser, constitutes the valid and binding agreement of the
Purchaser and is enforceable in accordance with its terms.
4.3 Noncontravention{tc \l 2 " 4.3 Noncontravention"}. The execution
and delivery of and the performance by the Purchaser of its obligations
hereunder do not and will not contravene, or constitute a default under, any
provisions of applicable law or regulation or any agreement, judgment,
injunction, order, decree or other instrument binding upon the Purchaser or
result in the creation of any lien or other encumbrance on any asset of the
Purchaser.
4.4 Litigation{tc \l 2 " 4.4 Litigation"}. There is no action, suit
or proceeding, pending or known to be threatened, against or affecting the
Purchaser or any subsidiary or affiliate of the Purchaser in any court or before
any arbitrator or before any Governmental Body which in any manner raises any
question affecting the validity or enforceability of this Agreement or any other
agreement or instrument to which the Purchaser is a party or by which it is
bound and that is to be used in connection with, or is contemplated by, this
Agreement.
4.5 Bankruptcy{tc \l 2 " 4.5 Bankruptcy"}. No Act of Bankruptcy has
occurred with respect to the Purchaser. The Purchaser's Financial Information
was true, correct and complete as of the date it was furnished to Seller and
reflects fairly the financial position of Purchaser as of the date of financial
statements included therein, and no material adverse change in the business or
condition (financial or otherwise) of the Purchaser has occurred since the date
of such financial statements.
4.6 Brokerage Commission{tc \l 2 " 4.6 Brokerage Commission"}. The
Purchaser has not engaged the services of, and is not and will not become liable
to, any real estate agent, broker, finder or any other person or entity for any
brokerage or finder's fee, commission or other amount with respect to the
transaction described herein.
ARTICLE V
CLOSING{tc \l 1 " ARTICLE V
CLOSING"}
5.1 Closing{tc \l 2 " 5.1 Closing"}. Closing shall be held at the
offices of the Escrow Agent in Memphis, Tennessee, on the date that is no later
than the 15th day following the last day of the Due Diligence Period (the
"Closing Date"), unless the parties mutually agree in writing upon another place
or earlier date (which shall in any event be held on a Tuesday, Wednesday or
Thursday), and shall be a "New York" style closing. In addition to extension of
the Closing Date by mutual agreement of the parties, Purchaser shall have the
right to extend the Closing Date by no more than 10 business days for no
additional consideration. Possession of the Property shall be delivered to the
Purchaser at Closing, subject only to Permitted Title Exceptions.
5.2 Seller's Deliveries{tc \l 2 " 5.2 Seller's Deliveries"}.
(a) At Closing, the Seller shall deliver to Purchaser all of the
following instruments, each of which shall have been duly executed and, where
applicable, acknowledged on behalf of the Seller and shall be dated as of the
date of Closing:
(i) The Deed.
(ii) The Bill of Sale and Assignment.
(iii) An updated rent roll.
(iv) All instruments necessary to release any liens against the
Property.
(v) Any customary and reasonable affidavit required to be
executed and delivered to the title insurance company issuing the owner's
title insurance policy on the Property to the Purchaser.
(vi) A FIRPTA affidavit.
(vii) To the extent Seller has possession thereof, or actual
control over and can obtain copies thereof without unreasonable time or
expense, all documents relating to the construction of the Improvements.
(viii) Any other document or instrument reasonably requested
by the Purchaser or required hereby.
(b) At Closing, the Seller shall also deliver or cause to be
delivered to the Purchaser the following: (i) The originals of
all Leases (and all leases executed
between the date hereof and Closing) or true, correct and complete copies
thereof certified to the Seller's Best Knowledge by the Seller, together
with all files relating to such leases.
(ii) Copies of all warranties, if any, of manufacturers,
suppliers and installers and all licenses and permits possessed by the
Seller and relating to the Improvements and the Personal Property, or any
part thereof, certified to the Seller's Best Knowledge as being true,
correct and complete.
(iii) Certified copies of the Seller's partnership certificate.
(iv) Appropriate resolutions of the board of directors of any
corporate general partner of the Seller, certified by the secretary or an
assistant secretary of such corporate general partner, together with all
necessary approvals and consents of the general and limited partners of the
Seller authorizing (a) the execution on behalf of the Seller of this
Agreement and the documents to be executed and delivered by the Seller
prior to, at or otherwise in connection with Closing, and (b) the
performance by the Seller of its obligations hereunder and under such
documents.
(v) All keys for the Property in possession of the Seller.
5.3 Purchaser's Deliveries{tc \l 2 " 5.3 Purchaser's Deliveries"}. At
Closing, the Purchaser shall pay or deliver to Seller: (a) the portion
of the Purchase Price described in Section 2.2(b).
(b) certified copies of the Purchaser's organizational documents.
(c) appropriate resolutions of the board of directors of the
Purchaser, certified by the secretary or an assistant secretary of the Purchaser
authorizing (a) the execution on behalf of the Purchaser of this Agreement and
the documents to be executed and delivered by the Purchaser at Closing and (b)
the performance by the Purchaser of its obligations hereunder and under such
documents.
(d) one or more documents evidencing Purchaser's assumption of the
obligations of the Seller arising on and after the Closing Date under all Leases
and all Operating Agreements.
(e) any other document or instrument reasonably requested by the
Seller or required hereby.
5.4 Closing Costs{tc \l 2 " 5.4 Closing Costs"}. Except as is otherwise
provided in Article VIII, each party hereto shall pay its own legal fees and
expenses. The Seller shall pay (a) the premium for Purchaser's owner's title
insurance policy (excluding the cost of any endorsements for which an extra
premium is charged), (b) the cost of obtaining an update to the seller's
existing survey of the Real Property, (c) 50% of the escrow fees of the Escrow
Agent, (d) the cost of a termite inspection report, and (e) any documentary
taxes relating to the transfer of the Property to Purchaser. The Purchaser
shall pay all other costs in carrying out the transactions contemplated
hereunder, including, without limitation, (i) 50% of the escrow fees of the
Escrow Agent, (ii) Purchaser's own legal fees and expenses and (iii) the cost of
any endorsements to the owner's title policy for which an extra premium is
charged.
5.5 Income and Expense Allocations{tc \l 2 " 5.5 Income and Expense
Allocations"}. (a) Except as provided in paragraph (b), at Closing, all income
and expenses with respect to the Property, and applicable to the period of time
before and after Closing, determined in accordance with generally accepted
accounting principles consistently applied, shall be allocated between the
Seller and the Purchaser as of the date of Closing. The Seller shall be
entitled to all income and responsible for all expenses for the period of time
up to but not including the date of Closing, and the Purchaser shall be entitled
to all income and responsible for all expenses for the period of time from,
after and including the date of Closing. Such adjustments shall be shown on the
settlement statements (with such supporting documentation as the parties hereto
may require being attached as exhibits to the settlement statements) and shall
increase or decrease (as the case may be) the amount payable by the Purchaser
pursuant to Section 2.2(b). Without limiting the generality of the foregoing,
the following items of income and expense shall be allocated at Closing:
(i) Current (rents actually collected during the month in which
Closing occurs) and prepaid rents.
(ii) Real estate and personal property taxes (which will be prorated
in advance or arrears, as the case may be).
(iii) Amounts due under the Operating Agreements to be assigned to and
assumed by the Purchaser.
(iv) Utility charges (including but not limited to charges for
water, sewer, and electricity).
If accurate allocations cannot be made at Closing because current bills are not
obtainable (as, for example, in the case of utility bills), the parties shall
allocate such income or expenses at Closing on the best available information,
subject to adjustment upon receipt of the final bill or other evidence of the
applicable income or expense. Any income received or expense incurred by the
Seller or the Purchaser with respect to the Property after the date of Closing
shall be promptly allocated in the manner described herein and the parties shall
promptly pay or reimburse any amount due. The Seller shall pay at Closing all
special assessments and taxes applicable to the Property.
(b) Notwithstanding the foregoing, all miscellaneous tenant income (such
as late charges, pet fees, etc.), all delinquent rents and all laundry and
vending machine income received by Seller prior to the Closing Date shall be for
the account of Seller. At Closing, Seller shall not receive a credit for
delinquent rents which remain unpaid as of the Closing Date. Purchaser and
Seller agree that any delinquent rents collected by Purchaser after Closing
shall be allocated first to Purchaser as current rents due under the leases and
second to Seller on account of sums due to Seller for rents accrued prior to
Closing and, subject to such allocation, promptly paid to Seller.
5.6 Lease Deposits and Fees{tc \l 2 " 5.6 Lease Deposits and Fees"}. At
Closing, (a) an amount equal the sum of all security and other deposits and
refundable fees with respect to the Leases and all interest required by law or
by the Leases to be accrued or paid thereon shall be credited against the
Purchase Price, and (b) all of the Seller's right, title and interest in and to
any such deposits and fees owed by tenants under the Leases but not paid to the
Seller shall be assigned to Purchaser.
5.7 Conditions of Closing{tc \l 2 " 5.7 Conditions of Closing"}. The
obligations of the Purchaser to purchase the Property hereunder shall be subject
to the satisfaction of the following conditions:
(a) The representations and warranties of Seller shall be true and
correct in all material respects on and as of the Closing Date with the same
effect as though made on the Closing Date; provided, however, that if Seller
discovers prior to the Closing that any such representation or warranty is
incorrect or untrue in any material respect, then the Seller shall give written
notice thereof to the Purchaser and Seller shall have five business days
following the date of such notice to attempt to cure such matter. If Seller is
unable or unwilling to effect such a cure within such period, Seller shall so
notify Purchaser, and Purchaser shall then have the right to terminate this
Agreement by written notice to the Seller within two business days of Seller's
notice and the Deposit shall be returned immediately to the Purchaser in
accordance with the provisions hereof and neither party shall have any further
liability to the other party under this Agreement.
(b) Purchaser shall have received a title insurance policy covering
the Real Property on the standard form of policy prescribed for use in the State
of Arkansas and reflecting as exceptions only Permitted Title Exceptions;
provided, however, that if such policy is not available at Closing, Purchaser
shall have received as evidence of the title insurance a commitment for the
issuance of such policy, dated as of the Closing Date, marked by an authorized
representative of the title insurer to show how the final policy shall read or a
specimen copy of such title insurance, including any endorsements thereto.
(c) Purchaser shall have received a current or updated survey of the
Real Property in whatever form is accepted by the title insurance company that
issued the title insurance commitment referred to above for such company to
delete the survey exception (other than area) from Schedule B of the owner's
policy of title insurance to be issued to Purchaser pursuant to this Agreement.
(d) Purchaser shall be satisfied that (i) no hazardous substance
contaminants or hazardous waste, except as may be used in the regular operation
and maintenance of the Property in accordance with applicable law ("Hazardous
Materials") are generated or stored on the Property; (ii) neither the Property
nor any contiguous lands have been used for the disposal of Hazardous Materials;
(iii) no Hazardous Materials were used in the construction of the Improvements;
(iv) the development of the Property and the construction of the Improvements
were performed in substantial compliance with all applicable environmental laws;
(v) no wells (whether in use or shut down) or any underground storage tanks are
located on the Property; and (vi) neither radon gas nor lead in the drinking
water are present in the Improvements in amounts exceeding current requirements
or guidelines under applicable environmental laws.
5.8 Operations Pending Closing{tc \l 2 " 5.8 Operations Pending
Closing"}. Seller covenants with Purchaser as follows:
(a) During the period between the date hereof and the Closing Date, Seller
agrees to lease and renew leases on the Property using the lease form attached
as Exhibit E and at rental rates and other concessions specified in Schedule
5.8, with such leases being written for terms not greater than one year.
(b) From the date of this Agreement to the Closing Date, Seller shall (i)
operate the Property, or cause the Property to be operated, repaired and
maintained in accordance with Seller's existing management and operating
standards and practices, (ii) keep the Property, or cause it to be kept, fully
insured in accordance with prudent and customary practice, (iii) not enter into
any new Contract or agreement with respect to the management or operation of the
Property (other than leases of rental units) that is not cancelable on 30 days'
written notice without the consent of Purchaser (which consent shall not be
unreasonably withheld, conditioned or delayed) and (iv) promptly pay all bills
and discharge all obligations arising from the ownership, operation, management,
repair, maintenance and leasing of the Property as such payments become due and
owing. Between the expiration of the Due Diligence Period and the Closing Date,
Purchaser shall have the continuing right from time to time to inspect the
Property to verify Seller's compliance with the foregoing.
(c) Between the end of the Due Diligence Period (if Purchaser has not
provided written notice to the Seller of Purchaser's election to terminate this
Agreement pursuant to Section 2.3 hereof) and the Closing Date, Purchaser shall
have reasonable access to the Real Property and to the records relating to the
operation, maintenance and leasing of the Real Property, during normal working
hours for the purpose of preparing to assume management of the Property
immediately following the Closing, provided that no agent or employee of
Purchaser shall unreasonably interfere with the operation, maintenance or
leasing of the Real Property or with any tenant during any time that Purchaser's
agent or employee is on the Real Property.
(d) Except for units that become vacant three days prior to Closing,
Seller shall deliver the Property to Purchaser in rent ready condition, in the
same manner as Seller has done prior to the date of this Agreement.
5.9 ERISA Matters. On or before the Closing Date, the parties shall
exchange such information (in the case of Seller, as may be reasonably obtained
without undue expense or due diligence) as may be required to establish that
consummation of the transactions contemplated hereby will not constitute a
prohibited transaction within the meaning of the Employee Retirement Security
Act of 1974, as amended. In the event, however, that after the expiration of
the Due Diligence Period, either party determines that the transaction would
constitute a prohibited transaction, then either party may terminate this
Agreement upon five days prior written notice to the other party, but in such
event, notwithstanding any provision in this Agreement to the contrary and
irrespective of which party elects to terminate this Agreement, Seller shall be
entitled to retain the Deposit as its sole and exclusive remedy as liquidated
damages.
ARTICLE VI
CONDEMNATION; RISK OF LOSS{tc \l 1 " ARTICLE VI
CONDEMNATION; RISK OF LOSS"}
6.1 Condemnation{tc \l 2 " 6.1 Condemnation"}. In the event of any
actual or threatened taking, pursuant to the power of eminent domain, of all or
any portion of the Real Property, or any proposed sale in lieu thereof, the
Seller shall give written notice thereof to the Purchaser promptly after the
Seller learns or receives notice thereof. If a part of the Real Property is, or
is to be, so condemned or sold that would have the effect of making the Property
a nonconforming use under applicable zoning and use laws or that is a material
taking, either the Seller or the Purchaser shall have the right to terminate
this Agreement pursuant to Section 7.2 or 7.3. If this Agreement is not so
terminated, all proceeds, awards and other payments arising out of such
condemnation or sale (actual or threatened) shall be paid to the Purchaser at
Closing. For purposes of this Section 6.1, a "material taking" is any taking
other than one in which the taking has no effect on the Improvements or no more
than a diminimus effect on the roads on or adjacent to or driveways and parking
areas located on the Real Property.
6.2 Casualty{tc \l 2 " 6.2 Casualty"}. (a) In the event of damage to
the Property by fire, Act of God or other casualty to the Improvements on the
Property prior to the Closing Date, which in the reasonable estimate of
Purchaser would cost $180,000.00 or less to repair, this Agreement shall remain
in full force and effect. In such event, Seller shall pay to Purchaser at
Closing either the cost to repair plus anticipated rental loss or, if insurance
is in effect, the cost of repairs up to all deductible amounts relating to such
casualty under any policies of insurance and, provided such insurance (except
for any applicable deductibles) fully covers the loss and the claim and proceeds
are assignable, pay to Purchaser any sums collected under such insurance
policies because of such casualty, and assign to Purchaser all rights to collect
sums relating to such casualty as may then be uncollected.
(b) If such damage is in excess of $180,000.00, in the reasonable
estimation of Purchaser, then this Agreement shall, at the option of Purchaser,
be terminated pursuant to Section 7.2. If Purchaser does not elect to so
terminate, this Agreement shall remain in full force and effect, and Seller
shall, at Closing, pay to Purchaser all deductible amounts relating to such
casualty under any policies of insurance, pay to Purchaser any sums collected
under any such policies because of such casualty, and assign to Purchaser all
rights to collect such sums relating to such casualty as may then be
uncollected.
ARTICLE VII
LIABILITY OF PURCHASER, TERMINATION BY SELLER
7.1 Liability of Purchaser{tc \l 2 " 7.1 Liability of Purchaser"}.
Except for any obligation expressly assumed or agreed to be assumed by the
Purchaser hereunder, the Purchaser does not assume any obligation of the Seller
or any liability for claims arising out of any occurrence prior to Closing.
7.2 Termination by Purchaser{tc \l 2 " 7.2 Termination by
Purchaser"}. If the Purchaser shall be entitled to terminate this Agreement, it
shall be entitled only to receive a refund of the Deposit, and the Purchaser
does hereby forever waive and relinquish any right to sue the Seller for any
reason whatsoever. If, prior to the Closing, the Seller defaults in performing
any of its obligations under this Agreement (other than under Section 5.7(b)
hereof), and such default is ongoing beyond any applicable cure period, the
Purchaser shall have the right to receive a refund of the Deposit, or, at its
election, to sue Seller for specific performance hereunder or such compensatory
damages as might be awarded in conjunction with an award for specific
performance, as its sole and exclusive remedy and relief hereunder. In no
event, however, shall Seller be liable to Purchaser for any punitive,
speculative, consequential or other similar damages for breach by Seller prior
to Closing.
7.3 Termination by Seller{tc \l 2 " 7.3 Termination by Seller"}. If
the Seller shall be entitled to terminate this Agreement, it shall be entitled
only to retain the Deposit as its sole and exclusive remedy as liquidated
damages. If, prior to Closing, the Purchaser defaults in performing any of its
obligations under this Agreement, the Seller shall have the right to retain the
Deposit as its sole and exclusive remedy hereunder as liquidated damages.
ARTICLE VIII
ACKNOWLEDGMENTS OF PURCHASER{tc \l 1 " ARTICLE VIII
ACKNOWLEDGMENTS OF PURCHASER"}
8.1 Acceptance of Property{tc \l 2 " 8.1 Acceptance of Property"}. The
Purchaser acknowledges that it will have inspected the Property prior to the
Closing, it will be fully familiar with the physical condition and state of
repair thereof, and, except as otherwise expressly provided in Section 2.3,
Purchaser shall accept the Property "as is" and in its present condition,
subject to reasonable use, wear, tear and natural deterioration between the date
hereof and the date of Closing, without any reduction in the Purchase Price for
any change in such condition. Except as provided in Article III, the Seller has
not made and does not make any representations or warranties, either express or
implied, with respect to any financial matters with respect to the Seller, the
Property, the operations of the Property or otherwise, or the physical
condition, fitness for a particular purpose or merchantability of any of the
Property.
8.2 Inspections{tc \l 2 " 8.2 Inspections"}. In entering into this
Agreement, Purchaser has not been induced by and has not relied upon any
representations, warranties or statements, whether express or implied, made by
the Seller or any agent, employee or other representative of the Seller or by
any broker or any other person representing or purporting to represent the
Seller, which are not expressly set forth herein.
ARTICLE IX
MISCELLANEOUS PROVISIONS{tc \l 1 " ARTICLE IX
MISCELLANEOUS PROVISIONS"}
9.1 Completeness; Modification{tc \l 2 " 9.1 Completeness;
Modification"}. This Agreement constitutes the entire agreement between the
parties hereto with respect to the transactions contemplated hereby and
supersedes all prior discussions, understandings, agreements and negotiations
between the parties hereto. This Agreement may be modified only by a written
instrument duly executed by the parties hereto.
9.2 Assignments{tc \l 2 " 9.2 Assignments"}. The Purchaser may not
assign its rights hereunder except with the prior written consent of the Seller
(which consent the Seller shall not be obligated to give and with such consent
to be subject to such conditions as the Seller may impose). Notwithstanding the
foregoing, Purchaser may assign its rights under this Agreement to an assignee
which is managed or advised by a corporate affiliate of Purchaser or by persons
who are officers of a corporate affiliate of Purchaser upon not less than five
days prior written notice to Seller. Such assignee may include a corporation,
partnership or trust for which a corporate affiliate of Purchaser or a person
who is an officer of a corporate affiliate of Purchaser acts as a general
partner, a trustee, an asset manager or an investment advisor and a corporation
the shares of stock of which are owned by any such corporation, partnership or
trust. For purposes of this Section 9.2, a "corporate affiliate" shall mean an
entity which controls, is controlled by, or is under common control with
Purchaser. Any such assignment shall not, however, relieve Purchaser of its
obligation, subject to the terms and conditions of this Agreement, to purchase
the Property on the Closing Date.
9.3 Successors and Assigns{tc \l 2 " 9.3 Successors and Assigns"}.
This Agreement shall bind and inure to the benefit of the parties hereto and
their respective permitted successors and assigns.
9.4 Days{tc \l 2 " 9.4 Days"}. If any action is required to be
performed, or if any notice, consent or other communication is given, on a day
that is a Saturday or Sunday or a legal holiday in the jurisdiction in which the
action is required to be performed or in which is located the intended recipient
of such notice, consent or other communication, such performance shall be deemed
to be required, and such notice, consent or other communication shall be deemed
to be given, on the first business day following such Saturday, Sunday or legal
holiday. Unless otherwise specified herein, all references herein to a "day" or
"days" shall refer to calendar days and not business days.
9.5 Governing Law{tc \l 2 " 9.5 Governing Law"}. This Agreement and all
documents referred to herein are governed by and construed and interpreted in
accordance with the laws of the State of Tennessee.
9.6 Counterparts{tc \l 2 " 9.6 Counterparts"}. To facilitate
execution, this Agreement may be executed in as many counterparts as may be
required. It shall not be necessary that the signature on behalf of both
parties hereto appear on each counterpart hereof. All counterparts hereof shall
collectively constitute a single agreement.
9.7 Severability{tc \l 2 " 9.7 Severability"}. If any term, covenant
or condition of this Agreement, or the application thereof to any person or
circumstance, shall to any extent be invalid or unenforceable, the remainder of
this Agreement, or the application of such term, covenant or condition to other
persons or circumstances, shall not be affected thereby, and each term, covenant
or condition of this Agreement shall be valid and enforceable to the fullest
extent permitted by law.
9.8 Costs{tc \l 2 " 9.8 Costs"}. Regardless of whether Closing
occurs hereunder, and except as otherwise expressly provided herein, each party
hereto shall be responsible for its own costs in connection with this Agreement
and the transactions contemplated hereby, including without limitation fees of
attorneys, engineers and accountants.
9.9 Notices{tc \l 2 " 9.9 Notices"}. All notices, requests, demands
and other communications hereunder shall be in writing and shall be delivered by
hand, telecopied (if receipt thereof by the other party is confirmed by the
party sending such telecopy) sent prepaid by Federal Express (or a comparable
overnight delivery service) or sent by the United States mail, certified,
postage prepaid, return receipt requested, at the addresses and with such copies
as designated below. Any notice, request, demand or other communication
delivered or sent in the manner aforesaid shall be deemed given or made (as the
case may be) when actually delivered to the intended recipient.
For the Seller: c/o PaineWebber Income Properties
265 Franklin Street, 16th Floor
Boston, Massachusetts 02110
Attn: Mr. Rock D'Errico
Fax: (617) 345-8752
with a copy to: Hunton & Williams
951 East Byrd Street
Richmond, Virginia 23219
Attn: Vicki O. Tucker, Esq.
Fax: (804) 788-8218
For the
Purchaser: c/o Sentinel Real Estate Corporation
1290 Avenue of the Americas
New York, New York 10104-0394
Attn: Mr. Larry Scheffler
Fax: (212) 586-2928
with a copy to: Hutton Ingram Yuzek Gainen Carroll
& Bertolotti
250 Park Avenue
New York, New York 10177
Attn: Shane O'Neill, Esq.
Fax: (212) 907-9681
Any party hereto may change its address or designate different or other persons
or entities to receive copies by notifying the other party in a manner described
in this Section.
9.10 Incorporation by Reference{tc \l 2 " 9.10 Incorporation by
Reference"}. All of the Exhibits attached hereto are by this reference
incorporated herein and made a part hereof.
9.11 Further Assurances{tc \l 2 " 9.11 Further Assurances"}. The Seller
and the Purchaser each covenant and agree to sign, execute and deliver, or cause
to be signed, executed and delivered, and to do or make, or cause to be done or
made, upon the written request of the other party, any and all agreements,
instruments, papers, deeds, acts or things, supplemental, confirmatory or
otherwise, as may be reasonably required by either party hereto for the purpose
of or in connection with consummating the transactions described herein.
9.12 No Partnership{tc \l 2 " 9.12 No Partnership"}. This Agreement
does not and shall not be construed to create a partnership, joint venture or
any other relationship between the parties hereto except the relationship of
seller and purchaser specifically established hereby.
9.13 Time of Essence{tc \l 2 " 9.13 Time of Essence"}. Time is of the
essence with respect to every provision hereof; provided, however, that any
extension of the Closing Date in accordance with Section 5.1 shall not
constitute a breach of this Section 9.14.
9.14 Survival{tc \l 2 " 9.14 Survival"}. All of the representations,
warranties, covenants and agreements of the Seller and the Purchaser made in, or
pursuant to, this Agreement shall not survive Closing and shall merge into the
Deed or any other document or instrument executed and delivered in connection
herewith. Notwithstanding the foregoing, (a) the representations and warranties
of the Seller and the Purchaser shall survive the Closing for a period of not
more than six months from the date thereof, provided that the party alleging a
breach of any of the other party's representations and warranties delivers
written notice to the alleged breaching party within such period, and (b)
Purchaser's obligations with respect to Section 2.3(e) shall survive the Closing
or any termination of this Agreement pursuant to the terms and provisions
hereof.
9.15 Confidentiality{tc \l 2 " 9.15 Confidentiality"}. The Purchaser
hereby agrees that it shall use all commercially reasonable efforts to ensure
that all information related to or obtained about the Property by Purchaser and
its officers, employees, agents and contractors pursuant to this Agreement is
kept confidential prior to Closing; provided, however, that Purchaser may reveal
such information to prospective tenants, title companies, lenders, engineers,
accountants, attorneys, brokers and the like and shall request that such
information be kept confidential. Any violation of this provision shall
constitute a material breach of this Agreement.
ARTICLE X
ESCROW AGENT{tc \l 1 " ARTICLE X
ESCROW AGENT"}
10.1 Employment{tc \l 2 " 10.1 Employment"}. The Escrow Agent shall
hold the Deposit in escrow in a special bank account (or as otherwise agreed in
writing by the Seller, the Purchaser and the Escrow Agent) until the Closing or
sooner termination hereof and shall pay over or apply such proceeds in
accordance with the terms of this Section. Unless notice of termination is
given in accordance with the provisions of Section 2.3 of this Agreement,
neither Seller nor Purchaser shall make demand on the Escrow Agent for payment
of the Deposit, or take any other action with respect to the Deposit, during the
Due Diligence Period. The Escrow Agent shall invest the Deposit in a manner
agreed to in writing by the Seller and the Purchaser. At Closing, the Deposit
shall be paid by the Escrow Agent to the Seller and applied to the Purchase
Price as credit for the Purchaser. If for any reason Closing does not occur and
either party makes a written demand upon the Escrow Agent for payment of such
amount, the Escrow Agent shall give written notice to the other party of such
demand. If the Escrow Agent does not receive a written objection from the other
party to the proposed payment within 10 business days after the giving of such
notice, the Escrow Agent is hereby authorized to make such payment. If the
Escrow Agent does receive such written objection within such 10 day period or if
for any other reason the Escrow Agent in good faith shall elect not to make such
payment, the Escrow Agent shall continue to hold such amount until otherwise
directed by written instructions from the parties hereto or a final judgment of
a court of competent jurisdiction. The Escrow Agent shall, however, have the
right at any time during which a dispute exists as to entitlement to the Deposit
to file a suit with a court of competent jurisdiction and to pay the Deposit to
such court (or an officer thereof). The Escrow Agent shall give written notice
of such deposit to the Seller and the Purchaser. Upon such deposit, the Escrow
Agent shall be relieved of and discharged from all further obligations and
responsibilities hereunder.
10.2 Exculpation{tc \l 2 " 10.2 Exculpation"}. The parties acknowledge
that the Escrow Agent is acting at their request and convenience and solely as a
stakeholder, that the Escrow Agent shall not be deemed to be the agent of either
of the parties and that the Escrow Agent shall not be liable to either of the
parties for any act or omission on its part unless taken or suffered in bad
faith, in willful disregard of this Agreement or involving gross negligence.
The Seller and the Purchaser hereby jointly and severally indemnify and hold the
Escrow Agent harmless from and against all costs, claims and expenses (including
reasonable attorneys' fees) incurred in connection with the performance by the
Escrow Agent of its duties hereunder, except with respect to actions or
omissions taken or suffered by the Escrow Agent in bad faith, in willful
disregard of this Agreement or involving gross negligence on the part of the
Escrow Agent.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused this Agreement
to be executed in their names by their respective duly-authorized
representatives.
SELLER:
PAINEWEBBER QUALIFIED PLAN PROPERTY
FUND THREE, LP, a Delaware limited partnership
By: Third Qualified Properties, Inc., its
Managing General Partner
By: /s/ Rock M. D'Errico
Its: Vice President
PAINEWEBBER QUALIFIED PLAN PROPERTY
FUND FOUR, LP, a Delaware limited partnership
By: Fourth Qualified Properties, Inc., its
Managing General Partner
By: /s/ Rock M. D'Errico
Its: Vice President
PURCHASER:
SRE ACQUISITION CORP.,
a Delaware corporation
By: /s/ Noel S. Belli
Its: Vice President
CONSENT BY ESCROW AGENT
The undersigned has executed this Agreement to acknowledge receipt of the
Deposit and to consent to and agree to be bound by the provisions of this
Agreement applicable to the Deposit and the Escrow Agent.
FIRST AMERICAN TITLE INSURANCE COMPANY
By: /s/ Donna M. Lacy
Its: Escrow Officer
1/12/95
Date CONFORMED COPY
SRE ACQUISITION CORP.
c/o Sentinel Real Estate Corporation
1290 Avenue of the Americas
New York, New York 10104-0394
as of February 27, 1995
PaineWebber Qualified Plan
Property Fund Three, LP
PaineWebber Qualified Plan
Property Fund Four, LP
c/o PaineWebber Income Properties
265 Franklin Street, 16th Floor
Boston, Massachusetts 02110
Attn.: Mr. Rock D'Errico
Re: Cordova Creek Apartments
Cordova, Tennessee
Gentlemen:
Reference is made to that certain Agreement of Purchase and Sale dated as
of January 12, 1995 between you, as Seller, and the undersigned, as Purchaser
(the "Agreement"). Please be advised that the undersigned, in accordance with
Section 2.3(a) of the Agreement, hereby elected to terminate the Agreement.
Notwithstanding the foregoing, however, the aforesaid termination shall be void
and of no force and effect if you execute and telecopy to the undersigned on or
before 5 P.M. Tuesday February 28, 1995 (with an original to follow by Federal
Express), a copy of this letter, thereby agreeing to the following amendments to
the Agreement:
A. The Due Diligence Period (as such term is defined in the Agreement)
shall be extended until March 20, 1995.
B. Of the $100,000 Deposit (as such term is defined in the Agreement),
$25,000 shall be non-refundable to Purchaser in the event Purchaser exercises
its right to terminate the Agreement in accordance with Section 2.3(a) thereof;
provided, however, that in the event Purchaser exercises such termination right
as a result of Purchaser's objections to conditions (whether Permitted Title
Exceptions or otherwise) reflected on the survey to be delivered by Seller, said
$25,000 shall be refundable to Purchaser.
C. At Closing, Purchaser shall give the following representation:
Purchaser is not acquiring its interest in the Property with "plan
assets" (as defined in the Plan Asset Regulations) of any Employee
Plan. For purposes of this representation, "Plan Asset Regulations"
means Section 2510.3-101 of the regulations promulgated by the U.S.
Department of Labor on November 13, 1986, as amended; and "Employee
Plan" means any (i) "employee benefit plan" as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended,
(ii) "plan" as defined in Section 4975(e) of the Internal Revenue Code
of 1986, as amended, or (iii) person or entity noting on behalf of any
plan described in clause (i) or (ii) above.
If you have any questions, please do not hesitate to telephone me.
Very truly yours,
SRE ACQUISITION CORP.
By: /s/ John H. Streicker
Its: President
Amendment of the Agreement
as Set Forth Above
Accepted and Agreed
PAINEWEBBER QUALIFIED PLAN
PROPERTY FUND THREE, L.P.
By: Third Qualified Properties, Inc.
By: /s/ Rock M. D'Errico
Its: Vice President
PAINEWEBBER QUALIFIED PLAN
PROPERTY FUND FOUR, L.P.
By: Fourth Qualified Properties, Inc.
By: /s/ Rock M. D'Errico
Its: Vice President
cc: Hunton & Williams
951 East Byrd Street
Richmond, Virginia 23219
Attn: Vicki O. Tucker, Esq.
CONFORMED COPY
SRE ACQUISITION CORP.
c/o Sentinel Real Estate Corporation
666 Fifth Avenue
New York, New York 10103
March 20, 1995
PaineWebber Qualified Plan
Property Fund Three, LP
PaineWebber Qualified Plan
Property Fund Four, LP
c/o PaineWebber Income Properties
265 Franklin Street, 16th Floor
Boston, Massachusetts 02110
Attn.: Mr. Rock D'Errico
Re: Cordova Creek Apartments
Cordova, Tennessee
Gentlemen:
Reference is made to that certain Agreement of Purchase and Sale dated as
of January 12, 1995 between you, as Seller, and the undersigned, as Purchaser,
as amended by that certain letter agreement dated February 27, 1995 extending
the Due Diligence Period (as amended, the "Agreement"). Please be advised that
the undersigned, in accordance with Section 2.3(a) of the Agreement, hereby
elects to terminate the Agreement. Notwithstanding the foregoing, however, the
aforesaid termination shall be void and of no force and effect if you execute
and telecopy to the undersigned on or before 5 P.M. on March 21, 1995 (with an
original to follow by Federal Express), the enclosed copy of this letter,
thereby agreeing as follows:
1. You shall deliver to us at Closing a Quitclaim Deed reflecting the
legal description set forth on the survey (which differs from the description in
the Agreement);
2. With respect to the Title Insurance Commitment issued by First
American Title Insurance Company (Commitment No. 165922) you shall satisfy the
requirements set forth on Schedule B - Section I at or prior to Closing (except
for requirement (a), which we shall satisfy), and you shall cause the exceptions
set forth on Schedule B - Section II to be amended to omit exceptions 1-4, and
omit the easement designated Z8 6124 listed in exception 6 to the extent such
easement does not apply to the Property; and
3. You shall provide the undersigned with a credit at Closing equal to
$44,600, to be broken out as follows:
GFI Code Violations: $15,000
ADA/Ten Handicap Violations: 23,000
Eleven washer/dryers: 6,600
If you have any questions, please do not hesitate to telephone me.
Very truly yours,
SRE ACQUISITION CORP.
By:/s/ Noel S. Belli
Its: Vice President
Conditions Accepted and Agreed
PAINEWEBBER QUALIFIED PLAN
PROPERTY FUND THREE, L.P.
By: Third Qualified Properties, Inc.
By: /s/ Rock M. D'Errico
Its: Vice President
PAINEWEBBER QUALIFIED PLAN
PROPERTY FUND FOUR, L.P.
By: Fourth Qualified Properties, Inc.
By: /s/ Rock M. D'Errico
Its: Vice President
cc: Hunton & Williams
951 East Byrd Street
Richmond, Virginia 23219
Attn: Vicki O. Tucker, Esq.
CONFORMED COPY
AMENDMENT TO AGREEMENT OF
PURCHASE AND SALE
THIS AMENDMENT TO AGREEMENT OF PURCHASE AND SALE (the "Agreement"), dated
as of April 12, 1995, by and among PAINEWEBBER QUALIFIED PLAN PROPERTY FUND
THREE, LP and PAINEWEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP, each, a
Delaware limited partnership (collectively, the "Seller"), and CORDOVA CREEK
APARTMENTS, INC., a Tennessee corporation (as assignee of SRE ACQUISITION CORP.,
the "Purchaser"), provides as follows:
WHEREAS, the Seller and the Purchaser have previously entered into an
Agreement of Purchase and Sale (the "Purchase Agreement"), dated as of January
12, 1995, providing for the purchase and sale of the property (the "Real
Property") commonly known as Cordova Creek Apartments, located in Memphis,
Tennessee (all capitalized terms used but not defined herein shall have the
meanings set forth in the Purchase Agreement);
WHEREAS, by letter agreement dated March 20, 1995, the parties amended the
Purchase Agreement to, among other things, require the Seller to deliver to
Purchaser at Closing a quitclaim deed for the Real Property;
WHEREAS, by Agreement of Assignment and Assumption of Contract, dated as of
April 7, 1995, between SRE Acquisition Corp. and the Purchaser, SRE Acquisition
Corp. assigned its rights as purchaser under the Purchase Agreement to the
Purchaser, and the Purchaser assumed the obligations of SRE Acquisition Corp. as
purchaser thereunder;
WHEREAS, the parties desire to waive the requirement for the delivery of a
quitclaim deed and to make certain amendments to the Purchase Agreement;
NOW, THEREFORE, in consideration of the mutual promises made herein and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. The Purchase Agreement hereby is amended by deleting all references to
PaineWebber Qualified Plan Property Fund Three, LP as seller and the sole Seller
of the Property shall be PaineWebber Qualified Plan Property Fund Four, LP.
2. The Purchaser hereby agrees that the Seller shall have no obligation
to deliver to Purchaser a quitclaim deed for the Real Property.
3. The Purchase Agreement hereby is amended to delete Exhibit A to the
Purchase Agreement and to substitute in lieu thereof Exhibit A attached hereto.
4. (a) The Purchaser hereby makes the following representations and
warranties, upon which the Purchaser acknowledges and agrees that the Seller is
entitled to rely and has relied:
Purchaser is not acquiring its interest in the Property
with "plan assets" (as defined in the Plan Asset
Regulations) of any Employee Plan. For purposes of this
representation, "Plan Asset Regulations" means Section
2510.3-101 of the regulations promulgated by the U.S.
Department of Labor on November 13, 1986, as amended; and
"Employee Plan" means any (i) "employee benefit plan" as
defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended, (ii) "plan" as defined in
Section 4975(e) of the Internal Revenue Code of 1986, as
amended, or (iii) person or entity acting on behalf of any
plan described in clause (i) or (ii) above.
(b) Section 4.1 of the Purchase Agreement is hereby amended by deleting
the word "Delaware" in the second line and inserting in substitution therefor
the word "Tennessee."
5. The Purchaser agrees that Seller's obligations under Section
5.2(a)(vii), 5.2(b)(i), 5.2(b)(ii), and 5.2(b)(v) of the Purchase Agreement
shall be satisfied by delivery of the original Leases and other documents and
items described therein to the Purchaser by the Property Manager of the Property
at Closing.
6. This Agreement may be executed in counterparts, which, when taken
together, shall constitute but one and the same instrument.
7. In all other respects, as of the date hereof, the Purchase Agreement,
shall be deemed reaffirmed and reinstated without amendment except as
specifically provided herein.
[signatures appear on the following page]
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first written above.
PAINEWEBBER QUALIFIED PLAN PROPERTY
FUND THREE, LP, a Delaware limited partnership
By: Third Qualified Properties, Inc., its
Managing General Partner
By: /s/ Rock M. D'Errico
Its: Vice President
PAINEWEBBER QUALIFIED PLAN PROPERTY
FUND FOUR, LP, a Delaware limited partnership
By: Fourth Qualified Properties, Inc., its
Managing General Partner
By: /s/ Rock M. D'Errico
Its: Vice President
CORDOVA CREEK APARTMENTS, INC.,
a Tennessee corporation
By: /s/ Noel S. Belli
Its: Vice President
Exhibit A to Amendment
Description of Real Property
[WILL BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION UPON REQUEST.]
