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) September 9, 1997
PaineWebber Income Properties Seven Limited Partnership
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(Exact name of registrant as specified in its charter)
Delaware 0-15037 04-2870345
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(State or other jurisdiction) (Commission (IRS Employer
of incorporation File Number) Identification No.)
265 Franklin Street, Boston, Massachusetts 02110
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-8118
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(Former name or address, if changed since last report)
<PAGE>
FORM 8-K
CURRENT REPORT
PAINE WEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
ITEM 2 - Disposition of Assets
The Enchanted Woods Apartments, Federal Way, Washington
Disposition Date - September 9, 1997
On September 9, 1997, HMF Associates, a joint venture (the "Venture") in
which Paine Webber Income Properties Seven Limited Partnership ("the
Partnership") has an interest, sold the property known as The Enchanted Woods
Apartments located in Federal Way, Washington to an unrelated third party for
approximately $9.2 million. The Partnership received net proceeds of
approximately $261,000 in connection with the sale in accordance with a
discounted mortgage loan payoff agreement reached with the lender in April 1997.
As discussed further in the Partnership Quarterly Report for the period
ended June 30, 1997, despite the successful lease-up of all three properties
owned by HMF Associates following the completion of the construction-related
repairs, the net operating income from the properties was not sufficient to
fully cover the interest accruing on the outstanding debt obligations which
matured on June 1, 1997 and July 1, 1997. As a result, the total obligation due
to the mortgage lender had continued to increase since the date of a fiscal 1992
loan modification agreement. The balance of the original mortgage loans on the
Hunt Club, Marina Club and Enchanted Woods properties at the time of their
fiscal 1987 acquisition dates totalled $13,035,000. After advances from the
lender to pay for costs to repair the construction defects of approximately $4.8
million and interest deferrals totalling approximately $6.2 million, the total
obligation to the mortgage lender totalled approximately $24 million as of the
fiscal 1997 maturity dates. As a result, the aggregate estimated fair value of
each of the operating investment properties was substantially lower than the
outstanding obligations to the first mortgage holder. In April 1997, the lender
agreed to another modification agreement which provided the joint venture with
an opportunity to complete a sale transaction prior to the loan maturity dates.
Under the terms of the agreement, the Partnership and the co-venture partner
could qualify to receive a nominal payment from the sales proceeds at a
specified level if a sale was completed by June 30, 1997 and certain other
conditions were met. In May 1997, the agreement with the lender was modified to
reflect the terms and conditions of a sale involving only the Hunt Club and
Marina Club properties. On June 27, 1997, HMF Associates sold The Hunt Club
Apartments located in Seattle, Washington and Marina Club Apartments located in
Des Moines, Washington to an unrelated third party for approximately $5.3
million and $3.1 million, respectively. The Partnership received net proceeds of
approximately $288,000 in connection with the sale of these two assets in
accordance with the discounted mortgage loan payoff agreement. The joint venture
also obtained a four-month extension from the lender of the discounted loan pay
off agreement with respect to the Enchanted Woods Apartments, and, in July 1997,
entered into an agreement with another third-party prospective buyer for the
possible sale of this remaining asset. The sale, which closed on September 9,
1997, satisfied the conditions in the loan modification agreement which allowed
the Partnership to share in the net proceeds from the sale transaction even
though the sale price was below the amount of the debt obligation.
The joint venture recognized gains from the forgiveness of indebtedness
and on the sale of the Hunt Club and Marina Club properties in the aggregate
amount of approximately $4,841,000 as a result of the June 1997 sale
transaction. The Partnership's share of such gains totalled approximately
$4,605,000. Additional gains on the sale of the Enchanted Woods Apartments will
be reflected in the Partnership's Annual Report for the period ended September
30, 1997. With the sale of the final asset owed by HMF Associates, the
operations of the joint venture have been terminated.
<PAGE>
FORM 8-K
CURRENT REPORT
PAINE WEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
ITEM 7 - Financial Statements and Exhibits
(a) Financial Statements: None
(b) Exhibits:
(1) Loan Payoff Agreement between HMF Associates and St. Paul Federal
Bank dated June 18, 1997.
(2) Extension Agreement between HMF Associates and St. Paul
Federal Bank dated June 27, 1997.
(3) Purchase and Sale Agreement between HMF Associates and
Simpson Housing Limited Partnership, dated July 7, 1997.
(4) Assignment of Leases between HMF Associates and Simpson
Housing Limited Partnership, dated September 8, 1997.
(5) General Assignment between HMF Associates and Simpson Housing
Limited Partnership, dated September 8, 1997.
(6) Bill of Sale between HMF Associates and Simpson Housing Limited
Partnership, dated September 8, 1997.
(7) Statutory Warranty Deed between HMF Associates and Simpson Housing
Limited Partnership, dated September 9, 1997.
(8) Closing Statement between HMF and Simpson Housing Limited
Partnership, dated September 9, 1997.
<PAGE>
FORM 8-K
CURRENT REPORT
PAINE WEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PAINE WEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
(Registrant)
By: /s/ Walter V. Arnold
--------------------
Walter V. Arnold
Senior Vice President and
Chief Financial Officer
Date: September 26, 1997
<PAGE>
St. Paul Federal Bank
for Savings
67000 West North Avenue
Chicago, IL 60635
(312) 622-5000
June 18, 1997
By Telecopy with original by Federal Express
Mr. Rock M. D'Errico
PaineWebber Properties
265 Franklin Street
Boston, MA 02110
RE: Enchanted Woods
97-100706-7
Dear Borrower:
Per your request, St. Paul Federal Bank For Savings ("St. Paul") has approved
the pay off of the loans secured by the above referenced properties and
identified by the above loan numbers (collectively "Loans") as set forth below
subject to the following terms and conditions:
1. Principal Payment by Borrower:
-----------------------------
Provided (i) there is no monetary default (St. Paul acknowledges the
Settlement Agreement dated March 31, 1992 between Borrower and St. Paul)
and/or any bankruptcy default under any of the loan documents securing
and/or evidencing any of the Loans or an event which with notice and/or
passage of time would become a monetary default and/or bankruptcy default
under any of the loan documents securing and/or evidencing any of the
Loans, (ii) such payment is received by St. Paul in immediately available
funds on or before June 30, 1997, and (iii) Borrower has fully complied
with all of the other conditions and requirements set forth herein to St.
Paul's satisfaction; then St. Paul will accept as full payment of the
Loans and all accrued and unpaid interest due thereon, the sum of the
following amounts:
a. the greater of (i) $8,200,000.00 or (ii) $7,943,750.00 plus 50%
of all Net Sales Proceeds (as defined below) in excess of
$7,943,750.00 received under that certain Purchase and Sale
Agreement between the Borrower, as seller, and Randall Realty
Corp., as buyer ("Purchase Agreement"); plus
b. Any and all fees and costs due hereunder as described in
Paragraph 2 herein; plus
c. If the closing is on any day other than the first day of a month,
interest payment for the number of days in the month up to and
including the day of such payment as required under the terms of
the Settlement Agreement dated March 31, 1992.
The term "Net Sales Proceeds" shall mean the gross sales price under the
Purchase Agreement minus standard title, title insurance and recording
charges; one-half of the closing escrow fees; up to $50,000 of which may
be paid as a consulting fee to Pacific Realty Partners; real estate sales
commission to an unrelated third party not to exceed 2% (provided the
sales price is equal to or greater than $9,300,000, Washington State
Excise Tax; and any other transfer taxes due from the Borrower in
connection with the sale. In no event shall any of the following be
deducted from and/or credited against the gross sales price in computing
Net Sales Proceeds; prorations for real estate taxes; prorations for rent
collections; security deposits; and/or any other credits not specifically
approved in writing by St. Paul.
<PAGE>
2. Fees and Costs:
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The Borrower will pay for all legal (including in-house attorneys), title
and other fees and costs involved with and/or incurred in connection with
the pay off of the Loan whether such pay off occurs. St. Paul agrees that
the legal fees shall not exceed $5,000.00.
3. Borrower's Agreements:
----------------------
In consideration of St. Paul agreeing to consider such pay off, Borrower
hereby acknowledges and agrees:
(i) Borrower was represented in the preparation and negotiation hereof by
the law firm of Borrower's choice and/or Borrower had ample opportunity to
be so represented and chose not to do so. This agreement shall not be
construed against St. Paul by reason of having been drafted by St. Paul's
attorneys.
(ii) That any course of dealing, laches, estopple or waiver established by
past forbearance or acquiescence by St. Paul shall not extend to any
future defaults and specifically that time is hereby reestablished as
being of the essence with regard to all provisions hereof and of the Loan
Documents.
(iii) That, except as expressly set forth herein and subject to the terms
and conditions set forth herein, St. Paul's execution and performance of
this letter is not and shall not be construed as a waiver, release,
amendment or modification of the Loan Documents which term shall include
the Loan Documents referenced above and/or any rights, remedies or causes
of action which St. Paul currently has or may hereafter acquire with
respect any obligations owed to St. Paul by Borrower or by virtue of any
Loan Documents, nor shall it be deemed an agreement to forbear from
exercising any rights or remedies which St.
Paul currently has or may hereafter acquire.
(iv) The St. Paul's agreement hereto shall not be construed as or deemed
to create any course of dealing between Borrower and St. Paul, nor shall
it be construed as waiver of any defaults or St. Paul's rights to remedies
with regard thereto.
(v) The execution and performance of this letter shall not constitute a
waiver or forgiveness of any existing or subsequent default under the Loan
Documents.
(vi) That Borrower hereby releases and waives and agrees that Borrower
will not assert any presently existing cause of action, claim, or demand
against St. Paul which arises out of or in connection with the Loan
Documents.
(vii) That no defense or set-off rights exist with respect to St. Paul's
enforcement of its rights and remedies under the Loan Documents.
4. Entire Agreement; Survival:
--------------------------
This Commitment shall constitute the entire agreement for the pay off of
the Loan, and shall supersede all prior written or oral understandings
with respect thereto; provided, however, that all written representations
of Borrower or any principal of Borrower to St. Paul, shall be deemed to
have made to induce St. Paul to accept the pay off of the Loan and issue
this Commitment and shall survive the execution of this Commitment. No
modification or waiver of any provision of this Commitment shall be
effective unless it is in writing, signed by St. Paul. The Borrower shall
advise St. Paul in writing immediately as any of them becomes aware of any
material change, error or omission in any of the information, data or
documentation supplied to St. Paul by or on behalf of Borrower or in any
representation made herein.
5. Waiver of Jury Trial:
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ST. PAUL AND BORROWER HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY
DISPUTE ARRISING UNDER THE PROVISIONS OF OR PURSUANT TO THIS COMMITMENT
OR ANY OF THE LOAN DOCUMENTS.
All other terms and conditions of the existing loan documents in
connection with the above loan, including any prior amendments or modifications
thereto, shall remain in full force and effect.
If after Borrower accepts this commitment letter and the pay off fails to
occur and St. Paul fails to receive the pay off for any reason, the Borrower
agrees that it shall be responsible for the payment of all of the Fees and Costs
above and shall pay such Fees and Costs upon demand. If Borrower fails to pay
for such Fees and Costs out of any payment made by Borrower received by St. Paul
in connection with this letter, including without limitation any deposits made
hereunder and/or out of any other funds or Borrower received and/or held by St.
Paul, including without limitation any principal and interest payments.
Please signify your acceptance to the proposed terms and Borrower's
agreements outlined herein by executing this letter below and returning the
original to the undersigned. If an executed original of this letter is not
returned to the undersigned on or before June 20, 1997, this letter, at St.
Paul's option, will terminate.
Sincerely,
/s/ Charles L. Lavezzi
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Vice President, Director
Income Property Loan Administration
Agreed and Accepted By:
HMF Associates, a California general
Partnership
By: /s/ Rock D'Errico
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Its: Vice President
Date: June 18, 1997
<PAGE>
St. Paul Federal Bank
for Savings
67000 West North Avenue
Chicago, IL 60635
(312) 622-5000
June 27, 1997
By Telecopy with original by Federal Express
Mr. Rock M. D'Errico
PaineWebber Properties
265 Franklin Street
Boston, MA 02110
RE: Enchanted Woods Apartment ("Property")
Loan No. 91-100-706-7 ("Loan")
Dear Borrower:
This letter constitutes an agreement ("Agreement") by St. Paul Federal
Bank For Savings ("St. Paul"), on the terms and conditions herein, to extend
("Extension") the Maturity Date under the loan documents evidencing and/or
securing the above referenced Loan ("Loan Documents") to October 1, 1997. You
have asked us to agree to the Extension in order to allow you time to negotiate,
prepare documents and close a new loan with another lender OR sell the Property.
The Extension will include and be conditioned upon the terms and conditions
contained in this letter agreement.
a. Extension. St. Paul hereby agrees to extend the Maturity Date to
October 1, 1997; provided that (i) the Borrower executes the
acknowledgment copy of this letter and delivers such executed original
to St. Paul on or before the date provided for herein; and (ii) all
guarantors and indemnitors of the Loan and/or any of Borrower's
obligations under the Loan Documents execute the Guarantor's
Reaffirmation attached hereto and return the original of such
reaffirmations to St. Paul along with the executed original of
Borrower's signature hereon.
b. Borrower's Agreements. Borrower hereby acknowledges and agrees:
i. Borrower was represented in the preparation and negotiation hereof
by the law firm of Borrower's choice and/or Borrower had ample
opportunity to be so represented and chose not to do so. This
agreement shall not be construed against St. Paul by reason of
having been drafted by St. Paul's attorneys.
ii. That any course of dealing, laches, estoppel or waiver established
by past forbearance or acquiescence by St. Paul shall not extend to
any future defaults and specifically that time is hereby
reestablished as being of the essence with regard to all provisions
hereof and of the Loan Documents.
iii. That, except as expressly set forth herein and subject to the terms
and conditions set forth herein, St. Paul's execution
and performance of this Agreement, including without limitation
the acceptance by St. Paul of any and all principal and interest
payments during the terms of this Agreement is not and shall not
be construed as a waiver, release, amendment or modification of
the Loan Documents and/or any rights, remedies or causes of action
which St. Paul currently has or may hereafter acquire with respect
any obligations owed to St. Paul by Borrower or by virtue of any
Loan Documents, nor shall it be deemed an agreement to forbear
from exercising any rights or remedies which St. Paul currently
has or may hereafter acquire.
iv. That St. Paul's agreement hereto shall not be construed as or deemed
to create any course of dealing between Borrower and St. Paul, nor
shall it be construed as a waiver of any defaults or St. Paul's
rights to remedies with regard thereto.
v. The execution and performance of this Agreement shall not constitute
a waiver or forgiveness of any existing or subsequent default under
the Loan Documents.
vi. The execution and performance of this Agreement shall not constitute
an agreement to amend or modify any or all of the Loan Documents,
including without limitation the Maturity Date hereunder, except as
specifically set forth herein and subject to the terms and
conditions set forth herein.
vii. That Borrower hereby releases and waives and agrees that Borrower
will not assert any presently existing cause of action, claim, or
demand against St. Paul for any matter arising out of or in
connection with the Loan Documents.
viii. That the Loan will mature on June 1, 1997; the outstanding principal
balance of the Loan as of the date of this Agreement is $13,121,423;
and the Loan Documents are in full force and effect and constitute
legally valid and binding obligations of the Borrower enforceable in
accordance with their respective terms.
ix. That no defenses or set-off rights exist with respect to St. Paul's
enforcement of its rights and remedies under the Loan Documents.
c. Waiver of Bankruptcy Stay. For and in consideration of the covenants
and agreements contained herein, Borrower and partner, shareholder,
member and/or other principal of Borrower hereby consent and agree that
they shall not seek, sue for, or avail themselves of any automatic stay
granted pursuant to any and all federal, state and/or local bankruptcy
laws and Borrower and each partner, shareholder, member and/or other
principal of Borrower waive any objections or defenses thereto, and
agree not to seek, sue for, or avail themselves of any alternative
state or injunction whether under such bankruptcy laws or otherwise. In
addition, if any such stay or injunction has been granted, whether
heretofore or hereinafter, Borrower and each partner, shareholder,
member and/or other principal of Borrower hereby consent and agree to
the termination of such stay or injunction.
d. Loan Documents Remain In Effect. Except as specifically set forth
herein and subject to the conditions set forth herein, the Loan
Documents shall remain in full force and effect in accordance with
their respective terms and provision unless Borrower and St. Paul
execute formal written agreements amending or modifying the terms
thereof.
e. St. Paul's Fees and Costs. Borrower agrees to pay, as and when billed,
all fees, costs and expenses, including without limitation, attorney's
fees and expenses , incurred by St. Paul in connection with this
Agreement, any negotiations leading up to and/or regarding this
Agreement and/or the Loan Documents and any written agreements
hereinafter entered into with regard to this Agreement and/or the Loan
Documents and any other actions contemplated under this Agreement.
f. Severability. The parties hereto intend and believe that each provision
of this Agreement comports with all applicable local, state and federal
laws and judicial decisions. However, if any provision or provisions,
or in any portion of any provision or provisions, in this Agreement is
found by a court of law to be in violation of any applicable local,
state or federal law, statute, ordinance, administrative or judicial
decision, or public policy, and if such courts declare such portion,
provision or provisions of the Agreement to be illegal, invalid,
unlawful, void or unenforceable as written, then it is the intent of
all parties hereto that such portion, provision or provisions shall be
given force to the fullest possible extent that they are legal, valid
and enforceable, and that the remainder of this Agreement shall be
construed as if such illegal, invalid, unlawful, void or unenforceable
portion, provision or provisions were not contained herein, and that
the rights, obligations and interests of Borrower and St. Paul under
the remainder of this Agreement shall continue in full force and
effect.
g. Statute of Limitations. The parties hereto acknowledge and agree
that the running of any applicable time period or statute of
limitations shall be deemed tolled during the time of the Forbearance
by St. Paul.
h. Effective Agreement. This Agreement shall be binding upon each party
hereto, but shall not become effective with respect to any such party
until such time as it is executed by such party.
9. Miscellaneous. This Agreement constitutes the entire agreement
concerning this subject matter and supersedes any prior or
contemporaneous representations or agreements not contained herein
concerning the subject matter of this Agreement. This Agreement shall
inure to the benefit of and be binding upon and enforceable against the
Parties and their respective heirs, administrators, successors and
assigns, and shall be governed by Illinois law without giving effect to
the principles of conflicts of laws. Paragraph headings used herein are
for convenience only and shall not be used to interpret any term
hereof. This Agreement may be executed in one or more counterparts,
each of which shall constitute an original and all of which taken
together shall constitute one agreement.
10.Borrower's Representations and Warranties. Except as they relate
solely to the default in not paying the Loan in full on or before the
maturity date therefore and Borrower's failure to make a complete
payment of principal and interest for the month of September which
payment is due on October 1, 1997, Borrower hereby (i) ratifies and
restates all representations, warranties and covenants made by Borrower
in the Loan Documents, as if made on and as of the date hereof (unless
such representations and warranties are made as of, and relate solely
to, a date prior to the date hereof, in which case, Borrower hereby
represents and warrants that the same were true, correct and complete
as of such prior date), and (ii) represents and warrants that it has no
knowledge of any breach of such representations and warranties as so
ratified and restated. In addition, Borrower hereby further represents
and warrants that, to the best of its knowledge, no Event of Default,
or event which with the passage of time or giving of notice would
constitute and Event of Default, exists other than the expiration of
the maturity date for the Loan. Borrower represents and warrants that
each of the undersigned (other than those signing for St. Paul) have
the full right, power and authority to execute and deliver this
Agreement.
If the foregoing accurately reflects the terms of the Agreement, please
sign the enclosed copy of this Agreement in the space provide below and return
it to St. Paul by overnight delivery. If your signature hereon is not received
by St. Paul on or before July 1, 1997, St. Paul may, at its option and without
notice, declare this Agreement null and void and of no further force and effect.
Sincerely,
/s/ Randy P. Martin
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Randy P. Martin
Assistant Vice President
(Borrower)
By: /s/ Rock M. D'Errico
--------------------
Vice President
<PAGE>
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into as of
this 7th day of July, 1997, by and between HMF ASSOCIATES, a California general
partnership ("Seller"), and SIMPSON HOUSING LIMITED PARTNERSHIP, a Colorado
limited partnership ("Buyer").
RECITALS
A. Seller is the owner of certain real property located in the County of
King, State of Washington, consisting of an apartment project commonly known as
Enchanted Woods Apartments, which is located at 2020 South 360th Street, Federal
Way, Washington, on real property described in Exhibit A attached hereto and
incorporated herein (collectively with all buildings and improvements located
thereon, the "Real Property").
B. Buyer desires to purchase the Property (as defined below), and Seller
desires to sell the Property on the terms and conditions set forth in this
Agreement.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. Definitions.
As used in this Agreement the following terms shall have the meanings set
forth below:
"Agreement" is defined in the preamble of this Agreement.
"Approved Exceptions" is defined in Section 9(b) of this Agreement.
"Buyer" is defined in the preamble of this Agreement.
"Close of Escrow" is defined in Section 16(d) of this Agreement.
"Closing Date" is defined in Section 16(d) of this Agreement.
"Deed" is defined in Section 16(b)(i) of this Agreement.
"Disapproved Exception" is defined in Section 9(c) of this Agreement.
"Due Diligence Period" is defined in Section 5 of this Agreement.
"Earnest Money Deposit" is defined in Section 3(a) of this Agreement.
"Escrow" is defined in Section 4 of this Agreement.
"Escrow Agent" is defined in Section 4 of this Agreement.
"Exception" and "Exceptions" are defined in Section 9(b) of this
Agreement.
"FIRPTA Affidavit" is defined in Section 16(b)(ii) of this Agreement.
"Hazardous Materials" means oil and other petroleum products, flammable
explosives, asbestos, urea formaldehyde insulation, radioactive materials,
hazardous wastes, toxic or contaminated substances or similar materials,
including, without limitation, any substances which are hazardous substances,
hazardous wastes, hazardous materials, or toxic substances under any past,
present or future state or federal law, ordinance or regulation.
"Minimal Destruction" is defined in Section 19(a) of this Agreement.
"Notice of Satisfaction of Due Diligence" is a notice in the form of
Exhibit B attached hereto.
"Operating Statements" is defined in Section 5(b)(ii) of this Agreement.
"Personal Property" shall mean all furniture, fixtures and equipment owned
by Seller which is located on the Real Property and is used in connection with
the operation and maintenance of the Real Property.
"Preliminary Title Report" is defined in Section 9(a) of this Agreement.
"Prevailing Part" is defined in Section 22 of this Agreement.
"Property" shall mean collectively the Real Property; all of Seller's
right, title and interest in all other intangible rights, titles, interests,
privileges and appurtenances of Seller related to or used in connection with the
operation and ownership of the Real Property; and the Personal Property.
"Purchase Price" is defined in Section 3 of this Agreement.
"Real Property" is defined in Recital A of this Agreement.
"Rent Roll" is defined in Section 5(b)(i) of this Agreement.
"Seller" is defined in the preamble of this Agreement.
"Seller's Current Actual Knowledge" shall mean matters of which Seller's
Representative is actually aware without undertaking any investigation or
inquiry whatsoever.
"Seller's Representative" shall mean Rock D'Errico, Vice President of
Seventh Income Properties, Inc., general partner of PaineWebber Income
Properties Seven Limited Partnership, a general partner of Seller.
"Significant Destruction" is defined in Section 19(b) of this Agreement.
"Survey" is defined in Section 9(a) of this Agreement.
"Title Policy" is defined in Section 9(d) of this Agreement.
2. Purchase and Sale. Seller agrees to sell and Buyer agrees to purchase
the Property, subject to the terms and conditions in this Agreement.
3. Purchase Price. The purchase price for the Property shall be Nine
Million One Hundred Fifty Thousand Dollars ($9,150,000.00) ("Purchase Price").
The Purchase Price shall be payable as follows:
(a) Buyer shall deposit the sum of One Hundred Thousand Dollars
($100,000.00) (the "Initial Earnest Money Deposit") in cash or by cashier's
check into Escrow in an interest-bearing account at Escrow Agent within three
(3) business days of the date of this Agreement. If Buyer fails to deposit the
Initial Earnest Money Deposit into Escrow, this Agreement shall terminate, and
neither party shall have any further rights or obligations hereunder (other than
Buyer's indemnity obligations under Section 10 below). The Initial Earnest Money
Deposit together with any interest earned thereon shall be applied to the
Purchase Price at Close of Escrow.
(b) At the end of the Due Diligence Period, Buyer shall deposit an
additional One Hundred Thousand Dollars ($100,000.00) (the "Additional Earnest
Money Deposit", and together with the Initial Earnest Money Deposit, the Earnest
Money Deposit) in cash or by cashier's check into Escrow in an interest-bearing
account at Escrow Agent within three (3) business days of the expiration of the
Due Diligence Period. The Earnest Money Deposit together with any interest
earned thereon shall be applied to the Purchase Price at Close of Escrow.
(c) At or prior to the Close of Escrow (as defined below), Buyer shall
deposit the additional sum of Eight Million Nine Hundred Fifty Thousand Dollars
($8,950,000.00) less the amount of interest earned on the Earnest Money Deposit
in cash into Escrow at the Escrow Agent.
4. Escrow. Concurrently with the execution of this Agreement by both
parties Buyer and Seller shall establish an escrow (the "Escrow") at Chicago
Title Insurance Company ("Escrow Agent"), subject to the provisions of the
standard conditions for acceptance of Escrow and the terms and conditions in
this Agreement.
5. Due Diligence Review. During the period (the "Due Diligence Period")
commencing on the date of this Agreement and ending on the thirtieth (30th) day
following the date of this Agreement (or such later date as to which the last
day of the Due Diligence Period may be extended pursuant to Section 9(a) below),
Buyer, at its sole cost and expense, shall have the right to conduct an
investigation and review of the Property in order to satisfy itself as to the
physical condition of the Real Property (including, without limitation, the
physical condition of the Real Property as it relates to Hazardous Materials).
(a) Buyer agrees to conduct its investigation and review of the Property
in accordance with the following procedures:
(i) No test or investigation involving physical disturbance of any portion
of the Real Property shall be conducted without Seller's prior written approval
of the specific test or investigation.
(ii) Buyer shall exercise due care in inspecting and testing the Real
Property and shall perform all such inspection and testing in a professional
manner so as to minimize damage or disruption of the Real Property.
(iii) Buyer agrees to promptly pay all costs associated with its review
and investigation and not to permit any lien or encumbrance to be asserted
against the Real Property in connection with such review and investigation.
(iv) Buyer shall, at its expense, repair any damage to the Real Property
caused by the performance of its review and investigation.
(b) Seller has delivered to Buyer true and correct copies of the following
items relating to the Property or shall deliver such items to Buyer within five
(5) days after the date hereof:
(i) Rent Roll. A rent roll (the "Rent Roll") showing the name of each
tenant of the Property, the rental due under each such tenant's lease, the
expiration date of each lease or rental agreement, the size of each unit, any
arrearages, and all advance rentals and security deposits, if any, held by
Seller or the management company for the Property with respect to each such
tenant's lease or rental agreement;
(ii) Operating Statements. Statements (the "Operating Statements")
prepared by management company for the Property showing operating income and
expenses for the Property for fiscal years 1994, 1995, 1996 and 1997 year to
date. Seller's fiscal year runs from October 1st through September 30th;
(iii) Personal Property Inventory. An inventory of the Personal
Property;
(iv) Inspection Reports. Copies of any and all building inspection
reports, environmental assessments, plans and specifications, permits, consents
and approvals relating to the Property which are currently in Seller's
possession or the possession of the management company for the Property
(v) Warranties and Guarantees. Copies of all warranties and guarantees in
effect with respect to components of the Property, to the extent in Seller's
possession;
(vi) Licenses and Permits. Copies of all certificates of occupancy and all
other licenses and permits necessary for the ownership and operation of the
Premises, to the extent in Seller's possession;
(vii) Employees. A list of all current on-site employees, showing salaries
and benefits (including rent-free or rent-reduced apartments);
(viii) Tax Bills. Copies of the current and previous two years'
property tax bills for the Property, to the extent in Seller's possession; and
(ix) Service Contracts. Copies of all service, maintenance and other
contracts or agreements affecting all or any portion of the Property (the
Service Contracts).
In addition, copies of all leases, rental agreements, occupancy agreements
and other rights to occupy portions of the Property (collectively, the Leases)
shall be available for review by Buyer at the Property.
6. Satisfaction of Due Diligence/Termination.
(a) Satisfaction of Due Diligence. In the event that Buyer elects to
purchase the Property, at any time during the Due Diligence Period Buyer shall
deliver to Seller an executed and dated Notice of Satisfaction of Due Diligence
in the form of Exhibit B, in which event the Earnest Money Deposit shall become
non-refundable.
(b) Termination. Buyer shall have the right to terminate this Agreement
for any reason during the Due Diligence Period, in Buyer's sole and absolute
discretion, by delivery to Seller at any time during the Due Diligence Period of
written notice to such effect, in which event the Earnest Money Deposit and any
interest earned thereon shall be returned to Buyer, and neither party shall have
any further rights or obligations hereunder (other than Buyer's indemnity
obligations under Section 10 below).
If prior to the end of the Due Diligence Period Buyer fails to deliver to
Seller either the Notice of Satisfaction of Due Diligence or written notice
terminating this Agreement, this Agreement shall be deemed to have been
terminated, the Earnest Money Deposit shall be returned to Buyer, and neither
party shall have any further rights or obligations hereunder (other than Buyer's
indemnity obligations under Section 10 below).
7. Acknowledgment. Buyer acknowledges that Buyer is purchasing the
Property as is and where is and solely in reliance on Buyer's own investigation,
and, that except as set forth in Section 11 below, no representations or
warranties of any nature whatsoever, express or implied, have been made by
Seller or its partners or any of their respective officers, agents or employees
with respect to any matter, fact or issue concerning the Property or this
transaction.
Buyer further acknowledges that Buyer is a sophisticated investor,
knowledgeable and experienced in the financial and business risks attendant to
investments in real property, is capable of evaluating the merits and risks of
an investment in the Property and has evaluated the merits and risks of making
an investment in the Property.
8. [Intentionally Omitted]
9. Title.
(a) Prior to the date hereof, Seller has provided Buyer with a preliminary
title report for extended coverage title insurance (the "Preliminary Title
Report"), together with legible copies of all documents relating to title
exceptions referred to in the Preliminary Title Report. Seller shall furnish
Buyer with copies of the ALTA survey of the Real Property which Seller obtained
when it acquired the Property, as the same may have been subsequently updated
for Seller, not later than five (5) days following the date of this Agreement.
Buyer may elect, at Buyer's expense, to obtain a new ALTA survey (or updated
revisions of the existing ALTA surveys) of the Real Property (the "Survey")
which meet all the Escrow Agent's requirements for extended coverage title
insurance.
(b) Buyer shall approve or disapprove the Survey and each exception shown
in the Preliminary Title Report and each encroachment, overlap and any other
matter that affects title to the Real Property (each an "Exception" and
collectively, the "Exceptions") prior to the later of (i) the last day of the
Due Diligence Period or (ii) five (5) days after any title or survey matter
first arises after the last day of the Due Diligence Period and first appears on
any title or survey update delivered to Buyer. Buyer's failure to approve the
Survey or any Exception prior to such date shall be deemed to be an approval of
the Survey or such Exception. The Exceptions approved by Buyer hereunder shall
be referred to as the "Approved Exceptions".
(c) If any Exception is disapproved (each, a "Disapproved Exception"),
Seller shall notify Buyer in writing within five (5) days of receipt of Buyer's
notice of Disapproved Exceptions which Disapproved Exceptions Seller will
attempt (but without any commitment to expend funds) to discharge, satisfy,
release or terminate. Seller shall be obligated to discharge any deeds of trust
and related financing instruments and any other liens or charges created by
Seller's acts. If Seller does not agree to discharge, satisfy, release or
terminate all Disapproved Exceptions, Buyer may elect to (i) terminate this
Agreement by written notice to Seller within five (5) days after receipt of
Seller's notice that it will not discharge, satisfy, release or discharge all
Disapproved Exceptions, in which event the Earnest Money Deposit and any
interest earned thereon shall be returned to Buyer, and (except in the case of
Seller's failure to discharge those items which Seller is obligated to
discharge) neither party shall have any further rights or obligations hereunder
(other than Buyer's indemnity obligations under Section 10 below) or to (ii)
waive the Disapproved Exception(s) that Seller will not discharge, satisfy,
release or remove. Seller shall have the unilateral right by notice in writing
given to Buyer to extend the Closing Date for a period of up to thirty (30) days
in order to cause the discharge, satisfaction, release or termination of a
Disapproved Exception. The period of such extension shall run concurrently with
the period of any other extension provided for in this Agreement. If Seller is
unable to obtain a discharge, satisfaction, release or termination of any
Disapproved Exception within the period(s) specified above, then this Agreement
shall automatically terminate ten (10) business days (i) after expiration of the
initial period or additional 30-day period, as applicable, for curing the
Disapproved Exception or (ii) after Seller advises Buyer in writing that Seller
is unable to cause such discharge, satisfaction, release or termination,
whichever occurs first, unless within such 10-business day period Buyer waives
in writing such Disapproved Exception, in which event such Disapproved Exception
shall be deemed an Approved Exception under this Agreement. If this Agreement
terminates pursuant to the foregoing sentence, then Seller shall pay all charges
of the Escrow Agent in connection with this transaction, and (except in the case
of Seller's failure to discharge those items which Seller is obligated to
discharge) the parties shall be relieved of all further obligations and
liabilities to each other under this Agreement except as otherwise provided
herein, and all funds and documents deposited with Escrow Agent shall be
promptly refunded or returned by Escrow Agent to the depositing party. Anything
above to the contrary notwithstanding, it is understood and agreed that Buyer's
indemnity obligations under Section 10 below and the mutual indemnities under
Section 20 below, shall not terminate upon termination of this Agreement
pursuant to this or any other provision hereof.
(d) At Close of Escrow Seller shall cause Escrow Agent to issue an
Extended Coverage ALTA Owner's Policy of Title Insurance (the "Title Policy") in
the amount of the Purchase Price to Buyer, showing title vested in Buyer subject
only to a lien for real property taxes and assessments not then delinquent and
the Approved Exceptions. Seller shall pay the cost of the premium for an ALTA
owner's policy of title insurance. Buyer shall pay the additional premium(s) for
an extended coverage ALTA owner's policy of title insurance and for any title
insurance policy (including the cost of any endorsements required by the lender)
issued to the lender providing financing to Buyer to purchase the Property.
10. Access. Access to the Real Property during the period commencing on
the date of this Agreement and ending on the Closing Date shall be given to
Buyer, its agents, employees and contractors during normal business hours upon
at least two (2) business day's notice to Seller. Buyer shall indemnify and
defend Seller against and hold Seller harmless from all losses, costs, damages,
liabilities and expenses, including, without limitation, reasonable attorneys
fees, arising out of Buyer's entry onto the Real Property or any activity
thereon by Buyer or its agents, employees or contractors prior to the Close of
Escrow except to the extent any such losses, costs, damages, liabilities, and
expenses arise directly out of the negligence or willful acts of Seller. The
provisions of this section shall survive the Close of Escrow.
11. Representations and Warranties of Seller.
Seller hereby represents and warrants to Buyer that as of the date of this
Agreement and as of the Close of Escrow:
(a) Notices re Violations. To Seller's Current Actual Knowledge, Seller
has received no written notice, warning or notice of violation from any
governmental agency alleging that conditions on the Real Property are or have
been in violation of any laws, regulation or ordinances relating to the Real
Property.
(b) Power. Seller has the power, right and authority to enter into this
Agreement and the instruments referenced herein and to consummate the
transaction contemplated hereby, and each person signing this Agreement on
behalf of Seller has the authority to do so.
(c) Requisite Action. All requisite corporate and partnership action has
been taken by Seller in connection with the entering into this Agreement and the
instruments referenced herein and the consummation of the transaction
contemplated hereby.
(d) Leases. The Rent Roll is complete and accurate in all material
respects. Seller agrees to supplement the Rent Roll in the event that any lease
shown thereon is modified or any further lease is entered into after the date
hereof. Except for the leases, rental agreements and tenancies shown on the Rent
Roll, there are no other leases, rental agreements, tenancies or licenses
affecting the occupancy of the Property.
(e) No Breach. The execution, delivery and performance of this Agreement
by Seller (i) does not and will not breach any statute or regulation of any
governmental authority, including, but not limited to, applicable laws and
regulations, (ii) does not and will not conflict with or result in a breach of
or default under (A) any judicial or administrative order or decree, or (B) the
organizational documents of Seller, and (iii) does not and will not conflict
with or result in a breach of any condition or provision of, or constitute a
default under, or result in the acceleration of, or creation or imposition of
any lien, charge or encumbrance upon the Property, by reason of the terms of any
contract, mortgage, lien, agreement, indenture, instrument, decree or judgment
to which Seller is a party or which is or purports to be binding upon Seller or
which affects or purports to affect the Property.
(f) Eminent Domain. There is no existing or, to Seller's Current Actual
Knowledge, threatened eminent domain or similar proceeding against the Property.
(g) Non-Foreign Person. Seller is not a foreign person or entity as
defined under FIRPTA.
(h) Service Contracts. The copies of Service Contracts delivered to Buyer
constitute all service, maintenance and other contracts affecting the Property,
except Service Contracts terminable on thirty (30) days or less notice.
(i) Proceedings. To Seller's Current Actual Knowledge, no legal action,
arbitration, or administrative proceeding before any governmental authority
which could (i) have an adverse effect on the Property, or (ii) enjoin or
restrict the right or ability of Seller to perform its obligations hereunder is
pending or threatened against Seller or against the Property.
(j) Bankruptcy, Etc. There are no attachments, executions, assignments for
the benefit of creditors, or proceedings in bankruptcy or under any other debtor
relief laws contemplated by Seller or pending against Seller or, to Seller's
Current Actual Knowledge, threatened against Seller or the Property.
(k) Financial Information. The operating statements and similar
information relating to the Property which have been provided by Seller to Buyer
(i) are substantially in accordance with the books and records of Seller; (ii)
are complete and accurate in all material respects; and (iii) fairly present the
financial results of operations of the Property for the periods covered by such
financial information.
Any claim with respect to the foregoing representations and warranties
must be made by Buyer in writing and delivered to Seller no later than six (6)
months after the Closing Date. If no claim is made in writing by Buyer within
the six (6) month period after the Closing Date, Seller shall have no further
liability with respect to the foregoing representations and warranties.
12. Representations and Warranties of Buyer.
Buyer hereby represents and warrants to Seller that as of the date of this
Agreement and as of the date of the Close of Escrow:
(a) Power. Buyer has the power, right and authority to enter into this
Agreement and the instruments referenced herein and to consummate the
transaction contemplated hereby, and each person signing this Agreement on
behalf of Buyer has the authority to do so.
(b) Requisite Action. All requisite corporate and partnership action has
been taken by Buyer in connection with the entering into this Agreement and the
instruments referenced herein and the consummation of the transaction
contemplated hereby.
(c) No Breach. The execution, delivery and performance of this Agreement
by Buyer (i) does not and will not breach any statute or regulation of any
governmental authority, including, but not limited to, applicable laws and
regulations, (ii) does not and will not conflict with or result in a breach of
or default under (A) any judicial or administrative order or decree, or (B) the
organizational documents of Buyer, and (iii) does not and will not conflict with
or result in a breach of any condition or provision of, or constitute a default
under, or result in the acceleration of, by reason of the terms of any contract,
mortgage, lien, agreement, indenture, instrument, decree or judgment to which
Buyer is a party or which is or purports to be binding upon Buyer.
Any claim with respect to the foregoing representations and warranties
must be made by Seller in a writing delivered to Buyer no later than six (6)
months after the Closing Date. If no claim is made in writing by Seller within
the six (6) month period after the Closing Date, Buyer shall have no further
liability with respect to the foregoing representations and warranties.
13. Seller's Covenants.
From and after the date of this Agreement and continuing through the Close
of Escrow, Seller agrees as follows:
(a) Operation of the Property. Seller shall cause the Property to be
maintained in its present order and condition, reasonable wear and tear
excepted. Without limiting the foregoing, no fixtures, equipment or other
tangible personal property shall be removed from the Property unless prior to
the Closing Date the same is replaced with similar items of at least equal
quality.
(b) Liens; Title Matters. Seller shall keep the Property free and clear of
liens, including, without limitation mechanic's liens, in connection with work
performed and materials provided prior to the Closing Date. Seller shall not
grant any easements, rights-of-way or other rights to all or any portion of the
Property without Buyer's prior written consent.
(c) Leases. Seller may in the ordinary course of business enter into
leases, lease amendments and lease terminations. Seller shall not materially
modify the lease form currently utilized by Seller after Buyer's delivery of the
Notice of Satisfaction of Due Diligence without Buyer's prior written consent,
which consent shall not be unreasonably withheld or delayed.
(d) New Contracts. Without Buyer's prior written consent Seller shall not
enter into any new contracts or agreements relating to the Property except such
contracts or agreements as may be terminated at or by the Closing Date without
cost or expense to Buyer.
(e) Service Contracts. Seller shall terminate the existing management
agreements covering the Property, effective as of the Closing Date. Seller shall
terminate any Service Contracts, effective as of the Closing Date, which Buyer
directs Seller to terminate by written notice given to Seller at least ten (10)
days prior to the Closing Date, to the extent such Service Contracts may be so
terminated in accordance with their respective terms.
14. Conditions to Seller's Obligation to Close.
The obligation of Seller to close hereunder shall be subject to
satisfaction of the following conditions (all or any of which may be waived by
Seller in writing):
(a) Representations and Warranties True at Close of Escrow. The
representations and warranties made by Buyer in this Agreement shall be true in
all material respects as of the Close of Escrow with the same force and effect
as though such representations and warranties had been made or given as of the
Closing Date.
(b) Compliance With Agreement. Buyer shall have performed and complied in
all material respects with all its obligations under this Agreement which are to
be performed or complied with by Buyer prior to or at Close of Escrow.
15. Conditions to Buyer's Obligation to Close.
The obligation of Buyer to close hereunder shall be subject to
satisfaction of the following conditions (all or any of which may be waived by
Buyer in writing):
(a) Representations and Warranties True at Close of Escrow. The
representations and warranties made by Seller in this Agreement shall be true in
all material respects as of the Close of Escrow with the same force and effect
as though such representations and warranties had been made or given as of the
Closing Date.
(b) Compliance With Agreement. Seller shall have performed and complied in
all material respects with all its obligations under this Agreement which are to
be performed or complied with by Seller prior to or at Close of Escrow.
16. Close of Escrow.
(a) Buyer's Title Policy. Simultaneously with the Close of Escrow, Escrow
Agent shall issue the Title Policy in the name of Buyer in the amount of the
Purchase Price.
(b) Seller's Deposits Into Escrow. Seller shall deliver to Escrow Agent or
to Buyer on or prior to the Close of Escrow the following documents for each of
the apartment projects:
(i) A Statutory Warranty Deed executed and acknowledged by Seller
conveying to Buyer fee simple title to the Real Property ("Deed");
(ii) Seller's affidavit of nonforeign status as contemplated by
Section 1445 of the Internal Revenue Code of 1986, as amended ("FIRPTA
Affidavit");
(iii) An Assignment of Leases in form reasonably acceptable to
Seller and Buyer;
(iv) A Special Warranty Bill of Sale in form reasonably acceptable
to Seller and Buyer;
(v) A General Assignment in form reasonably acceptable to Seller and
Buyer assigning all of Seller's right, title and interest in any service
contracts which are not subject to termination at or prior to Close of Escrow or
which Buyer does not require to be terminated, the name of the apartment
project, any warranties or guaranties and all other intangible rights owned by
Seller and relating exclusively to the Property;
(vi) a notice to all tenants at the Property, informing them of the
sale of the Property to Buyer, and directing them to make all future payments in
accordance with Buyer's instructions, in form acceptable to Buyer and Seller.
(vii) all keys to the Property in Seller's possession;
(viii) an updated Rent Roll dated not more than seven (7) days prior
to the Closing Date, certified by Seller to be true and correct in all material
respects as of the date thereof;
(ix) affidavits which may be reasonably required by the Title
Company to remove standard exceptions and issue the Title Policy;
(x) originals of all Leases and tenant files in Seller's possession;
(xi) copies of all Service Contracts in Seller's possession; and
(xii) a copy of Seller's general ledger for the Property, as of a
date as close to the Closing Date as reasonably practicable.
(c) Buyer's Deposits into Escrow. Buyer shall deposit into Escrow, prior
to the Close of Escrow, the sum of Eight Million Nine Hundred Fifty Thousand
Dollars ($8,950,000) less the amount of any interest earned on the Earnest Money
Deposit in cash or immediately available funds.
(d) Closing Date. The conveyance of the Real Property to Buyer and the
closing of this transaction (the "Close of Escrow") shall take place on such
date ("Closing Date") not later than sixty (60) days following the date of this
Agreement as the parties shall mutually agree upon in writing, or if no such
date is agreed upon on the fiftieth day following the date of this Agreement.
(e) Costs and Prorations. Escrow Agent shall make prorations and shall
charge costs at the Close of Escrow as follows:
(i) Seller shall pay
(A) any transfer taxes due upon transfer of the Real
Property;
(B) any state or county excise taxes due upon transfer of the
Real Property;
(C) the amount of the premiums charged for an ALTA Owner's
Policy of Title Insurance without extended coverage;
(D) one-half (1/2) of the escrow fee charged by Escrow Agent;
and
(E) recording fees.
(ii) Buyer shall pay
(A) one-half (1/2) of the escrow fee charged by Escrow
Agent;
(B) an amount equal to the difference between (i) the premium
for an ALTA Owner's Policy of Title Insurance without extended coverage and (ii)
the premium for the Title Policy plus the premium for the ALTA lender's policy
of title insurance issued to the lender (if any) providing financing for Buyer
to purchase the Property; and
(C) any sales tax due in connection with the sale of the
Personal Property.
(iii) Prorations. Real property taxes and assessments shall be
prorated at the Close of Escrow based on the most current real property tax bill
available, including any supplemental property taxes that may be assessed after
the Close of Escrow but that relate to a period prior to the Close of Escrow,
regardless of when notice of those taxes is received or who receives the notice.
Rents and other income and expenses shall be prorated at the Close of Escrow.
Uncollected rents for the current and prior rental periods, less the reasonable
expenses of collection thereof, shall be apportioned if and when collected by
either party (provided that such rents for periods prior to the month in which
the Close of Escrow occurs shall be paid to Seller). Rents collected by Buyer
after the Close of Escrow shall first be allocated to current periods. All
refundable security deposits shall be transferred from Seller to Buyer. All
utilities shall be prorated outside of Escrow.
If the Close of Escrow shall occur before the tax rate or the assessed
valuation of the Property is fixed for the then current year, the apportionment
of taxes and assessments shall be upon the basis of the tax rate for the
preceding year applied to the latest assessed valuation. Subsequent to the Close
of Escrow, when the tax rate and the assessed valuation of the Property is fixed
for the year in which the Close of Escrow occurs, the parties agree to adjust
the proration of taxes and assessments and, if necessary, to refund or repay
such sums as shall be necessary to effect such adjustment.
17. Possession. Possession of the Property shall be delivered to Buyer at
the Close of Escrow, subject to the rights of tenants and other occupants
pursuant to the Leases described in the Agreement.
18. LIQUIDATED DAMAGES.
IF THE CLOSE OF ESCROW DOES NOT TIMELY OCCUR DUE TO THE DEFAULT OF BUYER,
OR IF BUYER IS OTHERWISE IN DEFAULT HEREUNDER, (a) BUYER SHALL HAVE NO FURTHER
RIGHT TO CLOSE THE ESCROW AND (b) SELLER SHALL RETAIN THE EARNEST MONEY DEPOSIT
AND ALL INTEREST EARNED THEREON, PLUS AN ADDITIONAL AMOUNT OF $100,000 WHICH
SHALL BE IMMEDIATELY DUE FROM BUYER, AS LIQUIDATED DAMAGES AS ITS SOLE REMEDY IN
LIEU OF ANY OTHER RIGHT TO DAMAGES OR RIGHT TO SPECIFIC PERFORMANCE OF THIS
AGREEMENT; AND PROVIDED THAT BUYER PAYS SUCH ADDITIONAL AMOUNT TO SELLER OR
ESCROW AGENT WITHIN TEN (10) DAYS OF NOTICE FROM SELLER THAT BUYER HAS DEFAULTED
UNDER THIS AGREEMENT, SELLER WAIVES ANY FURTHER RIGHT TO CLAIM DAMAGES FROM
BUYER OR SEEK OTHER LEGAL OR EQUITABLE REMEDIES AS A RESULT OF FAILURE BY BUYER
TO COMPLETE THE PURCHASE; PROVIDED, HOWEVER, THAT NOTHING CONTAINED IN THIS
SECTION SHALL TERMINATE, VITIATE OR OTHERWISE ABROGATE THE INDEMNIFICATION
PROVISIONS CONTAINED IN THIS AGREEMENT. BUYER AND SELLER AGREE THAT, BASED UPON
THE CIRCUMSTANCES NOW EXISTING, THE FOREGOING AMOUNT IS REASONABLE AS LIQUIDATED
DAMAGES.
PLEASE INITIAL: _____________ _____________
Seller Buyer
19. Risk of Loss.
(a) Minimal Destruction. Seller shall notify Buyer of any casualty or
damage to the Property promptly after the occurrence thereof. Buyer shall not be
relieved of the obligation to complete the purchase by reason of any destruction
("Minimal Destruction") of the Property prior to Close of Escrow which will
entail restoration or repair costs not exceeding One Hundred Fifty Thousand
Dollars ($150,000) in the aggregate, as estimated by a reputable contractor. If
any Minimal Destruction occurs prior to Close of Escrow, Seller shall have no
obligation to repair any damage due to Minimal Destruction, and there shall be
deducted from the Purchase Price such amount reasonably estimated by a reputable
contractor reasonably acceptable to Seller and Buyer as being necessary to
repair such damage plus an amount equal to any anticipated loss of rents after
the Closing Date, and Seller shall retain any rights which it may have to
collect casualty insurance proceeds with respect to such Minimal Destruction.
(b) Significant Destruction. If any destruction ("Significant
Destruction") of the Property occurs prior to Close of Escrow which will entail
restoration or repair costs exceeding One Hundred Fifty Thousand Dollars
($150,000), as estimated by a reputable contractor, Buyer may elect to terminate
this Agreement by written notice to Seller given not more than twenty (20) days
after the date of the occurrence causing such Significant Destruction If this
Agreement is so terminated by Buyer, neither party shall have any further rights
or obligations hereunder (other than Buyer's indemnity obligations under Section
10 above), and any funds (including the Earnest Money Deposit and all interest
earned thereon), instruments or documents shall be returned to the party which
has deposited them into Escrow.
If Buyer does not elect to terminate this Agreement, as aforesaid, the
Closing shall occur in accordance with the terms hereof, Seller shall assign to
Buyer the insurance proceeds payable in connection with such Significant
Destruction (including Rent Loss Insurance for the period after the Closing
Date), and the Purchase Price shall be reduced by the amount of any deductible
under the applicable insurance policies.
20. Brokers. Each party to this Agreement represents and warrants to the
other that the warranting party has incurred and will incur no obligation, by
reason of this Agreement or the transaction contemplated hereby, for any real
estate brokerage commission or finder's fee for which the other party would be
liable. Each party shall, and hereby agrees to, defend, indemnify and hold the
other party harmless from and against any and all claims, liabilities, damages
and costs, without limitation, reasonable attorneys fees and costs, arising out
of a breach of that party's representations and warranties set forth in this
Section.
Notwithstanding the foregoing, if, as and when the deed is recorded and
the consideration is paid, Seller will pay:
(i) a consulting fee of One percent (1%) of the Purchase Price to
Pacific Realty Partners, LLC, and the general partners of Seller
agree that the payment of such consulting fee shall satisfy all
obligations of the general partners under Section 9.14 of the
Seller's Partnership Agreement. The consulting fee shall be paid
from the sale proceeds at Close of Escrow per wiring instructions to
be provided by Pacific Realty Partners, LLC; and
(ii) a brokerage fee of One and one-quarter percent (1 3%) of the
Purchase Price to Skyline Properties, Inc. The brokerage fee shall
be paid from the sale proceeds at Close of Escrow per wiring
instructions to be provided by Skyline Properties, Inc.
The provisions of this section shall survive the Close of Escrow.
21. Assignment. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the parties hereto. Notwithstanding the
foregoing, Buyer may not transfer, assign or encumber its rights under this
Agreement without Seller's prior written approval except pursuant to an
absolute, irrevocable, unconditional assignment or transfer (but not
encumbrance) of all of Buyer's rights under this Agreement to an affiliated
entity. An "affiliated entity" for purposes of the foregoing shall mean either
(a) a partnership in which Buyer or Buyer's general partner is a general partner
or (b) a corporation or limited liability company controlling, controlled by or
under common control with Buyer. Only one such assignment to an affiliated
entity may be made without Seller's approval prior to Close of Escrow. In the
event of any assignment by Buyer with Seller's approval or where Seller's
approval is not required hereunder, the assignee shall be deemed to have assumed
all obligations and liabilities of Buyer under this Agreement. Notwithstanding
the foregoing, no assignment pursuant to this section shall relieve Buyer of any
of its obligations or liabilities under this Agreement, including, without
limitation, Buyer's indemnity obligations under Section 10 or Section 20 above.
Buyer shall deliver to Seller a complete copy of any executed assignment as to
which Seller's approval is not required hereunder not more than five (5) days
after the effective date of such assignment. Seller shall not be bound by any
such assignment unless and until Seller has received such copy thereof.
22. Attorneys Fees. If any legal action or other proceeding is brought for
the enforcement of this Agreement, or because of an alleged dispute, breach,
default, or misrepresentation in connection with any of the provisions of this
Agreement, the Prevailing Party shall be entitled to recover reasonable
attorneys fees and other costs incurred in that action, arbitration or
proceeding, including, but not limited to, expert's expenses, in addition to any
other relief to which they may be entitled. As used herein, the Prevailing Party
shall include without limitation a party who dismisses an action in exchange for
sums allegedly due; the party who receives performance from the other party for
an alleged breach of contract or a desired remedy where the performance is
substantially equal to the relief sought in an action; or the party determined
to be the prevailing party by a court of law.
23. Notices.
All notices to be given under this Agreement shall be in writing and sent
by (a) certified mail, return receipt requested, in which case notice shall be
deemed delivered three (3) business days after deposit, postage prepaid in the
United States Mail, (b) overnight courier, in which case notice shall be deemed
delivered one (1) business day after deposit with that courier, or (c) telecopy,
in which case notice shall be deemed delivered on transmittal by telecopier or
other similar means, as follows:
If to Seller: HMF Associates
c/o PaineWebber Properties Incorporated
265 Franklin Street, 16th Floor
Boston, Massachusetts 02110
Attention: Rock D'Errico
Vice President
Fax No. (617) 345-8752
with a copy to: Pacific Union Investment
Corporation,
3640 Buchanan Street
San Francisco, California 94123
Attention: Thomas R. Owens
Secretary
Fax No.: (415) 929-0743
and a copy to: Pacific Realty Partners, LLC
62 Parker Avenue, Suite 400
San Francisco, California 94118
Attention: Philip Johnson
Fax No.: (415) 379-9165
and with a copy to: Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109-2881
Attention: Susan Hall Mygatt, Esq.
Fax No.: (617) 570-1488
If to Buyer: Simpson Housing Limited Partnership
3201 South Tamarac Drive
Suite 200
Denver, Colorado 80231
Attention: Charles Rubenstein
Fax No.: (303) 745-1585
or to such other address as Buyer or Seller may respectively designate by
written notice to the other.
24. Possession. Possession of the Property shall be delivered to Buyer
upon recordation of the Deed.
25. Entire Agreement. This Agreement contains the entire agreement between
the parties to this Agreement and shall not be modified in any manner except by
an instrument in writing executed by the parties or their respective successors
in interest.
26. Severability. If any term or provision of this Agreement shall, to any
extent, be held invalid or unenforceable, the remainder of this Agreement shall
not be affected.
27. Waivers. A waiver or breach of a covenant or provision in this
Agreement shall not be deemed a waiver of any other covenant or provision in
this Agreement, and no waiver shall be valid unless in writing and executed by
the waiving party. An extension of time for performance of any obligation or act
shall not be deemed an extension of the time for performance of any other
obligation or act.
28. Construction. The section headings and captions of this Agreement are,
and the arrangement of this instrument is, for the sole convenience of the
parties to this Agreement. The section headings, captions, and arrangement of
this instrument do not in any way affect, limit, amplify, or modify the terms
and provisions of this Agreement. The singular form shall include plural, and
vice versa. This Agreement shall not be construed as if it had been prepared by
one of the parties, but rather as if both parties have prepared it. Unless
otherwise indicated, all references to sections are to this Agreement. All
exhibits referred to in this Agreement are attached to it and incorporated in it
by this reference.
29. No Merger. All of the terms, provisions, representations, warranties,
and covenants of the parties under this Agreement shall survive the Close of
Escrow in accordance with the terms of this Agreement and shall not be merged in
the Deed or other documents.
30. Counterparts. This Agreement may be executed in one or more
counterparts. Each shall be deemed an original and all, taken together, shall
constitute one and the same instrument.
31. Time of the Essence. Time is of the essence in this Agreement.
32. Governing Law. This Agreement shall be governed and construed in
accordance with Washington law (excluding conflicts of law principles). In the
event of any dispute between the parties in connection with or arising out of
this Agreement, the parties agree that any lawsuit or administrative proceeding
commenced in connection therewith be commenced and prosecuted in the State of
Washington.
33. No Offer. Employees or agents of Seller have no authority to make or
agree to sell the Property or make any other agreement or undertaking in
connection herewith. The submission of this document for examination and
negotiation does not constitute an offer to sell the Property, and this document
shall become effective and binding only upon the execution and delivery hereof
by both Buyer and Seller.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
SELLER:
HMF ASSOCIATES,
a California general partnership
By: Pacific Union Investment Corporation,
a California corporation
Its General Partner
By: /s/ Thomas R. Owens
-------------------
Thomas R. Owens
Secretary
<PAGE>
By: PaineWebber Income Properties Seven
Limited Partnership, a Delaware
limited partnership
By: Seventh Income Properties, Inc.,
a Delaware corporation
By: /s/ Rock D'Errico
------------------
Rock D'Errico
Vice President
<PAGE>
BUYER:
SIMPSON HOUSING LIMITED PARTNERSHIP,
a Colorado limited partnership
By: Paloma LLC, its general partner
By: /s/ Donald A. Simpson
---------------------
Donald A. Simpson
General Manager
List of Exhibits
Exhibit A Legal Description
Exhibit B Notice of Satisfaction of Due Diligence
<PAGE>
EXHIBIT B
NOTICE OF SATISFACTION OF DUE DILIGENCE
September 2, 1997
HMF Associates
c/o PaineWebber Income Properties Seven Limited Partnership
265 Franklin Street, 16th Floor
Boston, MA 02110
Attn: Rock D'Errico
Re: NOTICE OF SATISFACTION OF DUE DILIGENCE
Ladies/Gentlemen:
The undersigned hereby gives notice of the
satisfaction of the due diligence contingency set forth in Section 5 of that
certain Purchase and Sale Agreement, dated as of April 25, 1997 (the Purchase
Agreement) between the undersigned, as Buyer, and HMF Associates, as Seller and
hereby acknowledges satisfaction of all contingencies in the Purchase Agreement
as of the date hereof.
Very truly yours.
SIMPSON HOUSING LIMITED PARTNERSHIP,
a Colorado limited partnership
By: Paloma LLC, its general partner
By: /s/ Charles D. Rubenstein
-------------------------
General Counsel
<PAGE>
ASSIGNMENT OF LEASES
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby
acknowledged, HMF ASSOCIATES, a California general partnership (Assignor),
hereby assigns, sells, transfers, sets over and delivers unto SIMPSON HOUSING
LIMITED PARTNERSHIP, a Colorado limited partnership (Assignee), all of
Assignor's estate, right, title and interest in and to the following:
(a) all leases, licenses, tenancy agreements or occupancy agreements
relative to the real property known as Enchanted Woods Apartments, located at
2020 South 360th Street, Federal Way, King County, Washington (Property)
described in Exhibit A attached hereto, together with all rents, issues and
profits thereunder (collectively, Leases); and
(b) all security deposits, prepaid rentals, cleaning fees and other
deposits paid by tenants of the Property to Assignor or any agent of Assignor
(Deposits).
Assignee hereby assumes the performance of all of the terms, covenants and
conditions imposed upon Assignor under the Leases accruing or arising on or
after the date of delivery of this Agreement.
Assignor agrees to timely keep, perform and discharge all of the
obligations of landlord under the Leases that have accrued and/or were to have
been performed prior to the date of delivery of this Assignment. Assignor shall
indemnify, defend and hold Assignee harmless from and against any and all
claims, demands, liabilities and obligations of landlord under the Leases
arising out of or relating to the period prior to the date of delivery of this
Assignment. Assignee agrees to timely keep, perform and discharge all of the
obligations of landlord under the Leases that shall accrue and/or are to be
performed after the date of deliver of this Assignment. Assignee shall
indemnify, defend and hold Assignor harmless from and against any and all
claims, demands, liabilities and obligations of landlord under the Leases
arising out of or relating to the period after the date of delivery of this
Assignment.
This Assignment of Leases may be executed in one or more counterparts,
each of which shall be deemed an original, and all of such counterparts, taken
together, shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment as
of the ___ day of September, 1997, which Assignment is effective on that date.
ASSIGNOR
HMF ASSOCIATES, a California general partnership
By: Pacific Union Investment Corporation, a
California corporation, its General Partner
By: /s/ Thomas R. Owens
-------------------
Thomas R. Owens, Secretary
By: PaineWebber Income Properties Seven Limited
Partnership, a Delaware limited partnership
By: Seventh Income Properties, Inc., a
Delaware corporation
By: /s/Rock D'Errico
----------------
Rock D'Errico, Vice President
ASSIGNEE
SIMPSON HOUSING LIMITED PARTNERSHIP, a Colorado limited
partnership:
By: Paloma LLC, its general partner:
By: /s/ Donald A. Simpson
---------------------
Donald A. Simpson, General Manager
<PAGE>
STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO
On September 5, 1997, before me, A. Nichole Scanlon, Notary Public,
personally appeared Thomas R. Owens, personally known to me - OR proved to me on
the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
{SEAL}
My Commission Expires: 7/2/1999
/s/ Nichole Scanlon
---------------
Notary Public
<PAGE>
STATE OF MASSACHUSETTS )
) ss.
COUNTY OF SUFFOLK )
On this 4th day of September, 1997, before me, Linda Z. MacDonald, a
Notary Public, State of Massachusetts, duly commissioned and sworn, personally
appeared Rock M. D'Errico, known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he executed the same in his
authorized capacity as Vice President of Seventh Income Properties, Inc.,
Managing General Partner of PaineWebber Income Properties Seven Limited
Partnership, which is general partner of HMF Associates, a general partnership,
and that by his signature on the instrument the person or the entity upon behalf
of which person acted, executed the instrument.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal this
4th day of September, 1997.
/s/ Linda Z. MacDonald
------------------
Notary Public:
My Commission Expires: 11/12/99
<PAGE>
STATE OF COLORADO )
) ss.
COUNTY OF DENVER )
On this 8th day of September, 1997, before me, Candis Miller, a Notary
Public, State of Colorado, duly commissioned and sworn, personally appeared
Donald A. Simpson, known to me (or proved to me on the basis of satisfactory
evidence) to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he executed the same in his authorized
capacity as General Manager of Paloma LLC acting as general partner of SIMPSON
HOUSING LIMITED PARTNERSHIP, a Colorado limited partnership and that by his
signature on the instrument the person or the entity upon behalf of which person
acted, executed the instrument.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal this
8th day of September, 1997.
/s/ Candis Miller
-------------
Notary Public
My Commission Expires: 11/26/97
<PAGE>
EXHIBIT A
The West Half of the West Half of the Southeast Quarter of the Northwest
Quarter of Section 28, Township 21 North, Range 4 East, Williamette Meridian, in
King County, Washington; except the South 30 feet thereof conveyed to King
County for road purposes by deed recorded under recording number 2617165; and
except that portion thereof conveyed to the State of Washington for highway
purposes by deed recorded under recording number 4980050.
<PAGE>
GENERAL ASSIGNMENT
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby
acknowledged, HMF Associates, a California general partnership ("Assignor"),
hereby assigns, sells, transfers, sets over and delivers unto Simpson Housing
Limited Partnership, a Colorado limited partnership ("Assignee"), all of
Assignor's estate, right, title and interest in and to
the following:
(a) all licenses, permits, certificates of occupancy, approvals,
entitlement, dedications, and subdivision maps issued, approved or granted by
any governmental authorities or otherwise in connection with the real property
known as the Enchanted Woods Apartments, located at 2020 South 360th Street,
Federal Way, King County, Washington ("Property") described in Exhibit "A"
attached hereto; the use of the name Enchanted Woods Apartments and any other
trade names, trademarks, and logos used by Assignor in the operation and
identification of the Property; all development rights and other intangible
rights, titles, interests, privileges and appurtenances of Assignor related to
or used in connection with the Property and its operation; and all licenses,
consents, easements, rights of way and approvals issued, approved or granted by
any private parties to make use of utilities and to insure vehicular and
pedestrian ingress and egress to the Property (collectively, "Licenses and
Permits"); and
(b) all plans and specifications respecting any buildings or improvements
located on the Property; and all building inspection reports pertaining to the
Property which are owned by and within the possession or control of Assignor
(collectively, "Records and Plans").
Assignor makes no warranties of any kind or nature, express or implied,
regarding the Licenses and Permits, and Records and Plans.
Assignee hereby assumes the performance of all of the terms, convents and
conditions imposed upon Assignor under the Licenses and Permits, and Records and
Plans accruing or arising on or after the date of delivery of this Assignment.
Assignor shall be responsible for the performance of all of the terms, covenants
and conditions imposed upon Assignor under the, Licenses and Permits, and
Records and Plans accruing or arising prior to the date of delivery of this
Assignment.
This Assignment may be executed in one or more counterparts, each of which
shall be deemed an original, and all of such counterparts, taken together, shall
constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment as of
the 8th day of September, 1997, which Assignment is effective on that date.
ASSIGNOR
HMF ASSOCIATES, a California general partnership
By: Pacific Union Investment Corporation, a
California corporation, its General Partner
By: /s/ Thomas R. Owens
-------------------
Thomas R. Owens, Secretary
By: PaineWebber Income Properties Seven Limited
Partnership, a Delaware limited partnership
By: Seventh Income Properties, Inc., a
Delaware corporation, its Managing
General Partner
By: /s/ Rock D'Errico
-----------------
Rock D'Errico, Vice President
ASSIGNEE
SIMPSON HOUSING LIMITED PARTNERSHIP, a Colorado limited
partnership:
By: Paloma LLC, its general partner:
By: /s/ Donald A. Simpson
---------------------
Donald A. Simpson, General Manager
<PAGE>
STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO
On September 5, 1997, before me, A. Nichole Scanlon, Notary Public,
personally appeared Thomas R. Owens, personally known to me - OR proved to me on
the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
{SEAL}
My Commission Expires: 7/2/1999
/s/ Nichole Scanlon
---------------
Notary Public
<PAGE>
STATE OF MASSACHUSETTS )
) ss.
COUNTY OF SUFFOLK )
On this 4th day of September, 1997, before me, Linda Z. MacDonald, a
Notary Public, State of Massachusetts, duly commissioned and sworn, personally
appeared Rock M. D'Errico, known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he executed the same in his
authorized capacity as Vice President of Seventh Income Properties, Inc.,
Managing General Partner of PaineWebber Income Properties Seven Limited
Partnership, which is general partner of HMF Associates, a general partnership,
and that by his signature on the instrument the person or the entity upon behalf
of which person acted, executed the instrument.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal this
4th day of September, 1997.
/s/ Linda Z. MacDonald
------------------
Notary Public:
My Commission Expires: 11/12/99
<PAGE>
STATE OF COLORADO )
) ss.
COUNTY OF DENVER )
On this 8th day of September, 1997, before me, Candis A. Miller, a Notary
Public, State of Colorado, duly commissioned and sworn, personally appeared
Donald A. Simpson, known to me (or proved to me on the basis of satisfactory
evidence) to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he executed the same in his authorized
capacity as General Manager of Paloma LLC acting as general partner of SIMPSON
HOUSING LIMITED PARTNERSHIP, a Colorado limited partnership and that by his
signature on the instrument the person or the entity upon behalf of which person
acted, executed the instrument.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal this
8th day of September, 1997.
/s/ Candis A. Miller
---------------
Notary Public
My Commission Expires: 11/26/97
<PAGE>
EXHIBIT A
The West Half of the West Half of the Southeast Quarter of the Northwest
Quarter of Section 28, Township 21 North, Range 4 East, Williamette Meridian, in
King County, Washington; except the South 30 feet thereof conveyed to King
County for road purposes by deed recorded under recording number 2617165; and
except that portion thereof conveyed to the State of Washington for highway
purposes by deed recorded under recording number 4980050.
<PAGE>
BILL OF SALE
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby
acknowledged, HMF ASSOCIATES, a California general partnership (Seller) does
hereby grant, sell, transfer, and deliver to SIMPSON HOUSING LIMITED PARTNERSHIP
(Buyer), all of the furnishing, fixtures, equipment and other personal property,
including, without limitation, the personal property, which personal property
is, as of the date hereof, owned by Seller and located at the real property
known as Enchanted Woods Apartments, located at 2020 South 360th Street, Federal
Way, King County, Washington which real property is described in Exhibit A
attached hereto.
Buyer purchases such personal property "AS IS" and "WHERE IS" and solely
in reliance upon Buyer's personal inspection and knowledge of such personal
property. Seller does hereby warrant that all such personal property is free
from encumbrances created or suffered thereon by Seller and that Seller will
warrant and defend the same in favor of Buyer against the lawful claims of all
persons claiming by, through or under Seller.
<PAGE>
IN WITNESS WHEREOF, this document is executed as a sealed instrument as of
this 8th day of September, 1997.
SELLER:
HMF ASSOCIATES,
a California general partnership
By: Pacific Union Investment Corporation,
a California corporation
Its General Partner
By: /s/ Thomas R. Owens
--------------------
Thomas R. Owens, Secretary
By: PaineWebber Income Properties Seven
Limited Partnership, a Delaware
limited partnership
By: Seventh Income Properties, Inc.,
a Delaware corporation
By: /s/ Rock D'Errico
------------------
Rock D'Errico, Vice President
<PAGE>
After recording return to:
Charles Rubenstein, Esq.
Simpson Housing Limited Partnership
3201 South Tamarac Drive, Suite 200
Denver, CO 80231
EXHIBIT A
The West Half of the West Half of the Southeast Quarter of the Northwest
Quarter of Section 28, Township 21 North, Range 4 East, Williamette Meridian, in
King County, Washington; except the South 30 feet thereof conveyed to King
County for road purposes by deed recorded under recording number 2617165; and
except that portion thereof conveyed to the State of Washington for highway
purposes by deed recorded under recording number 4980050.
<PAGE>
STATUTORY WARRANTY DEED
KNOW ALL MEN BY THESE PRESENTS:
That, HMF Associates ("Grantor"), a California general partnership, for
and in consideration of Nine Million One Hundred Fifty Thousand Dollars
($9,150,000.00), in hand paid by Simpson Housing Limited Partnership, a Colorado
limited partnership ("Grantee"), the receipt of which is hereby acknowledged,
does hereby grant, bargain, sell, warrant and convey unto the said Grantee, and
assigns forever, the land and improvements situated at 2020 South 360th Street,
Federal Way, King County, Washington, located in the southeast quarter of the
northwest quarter of Section 28, Township 21 North, Range 4 East of the
Willamette Meridian, legally described in Exhibit A attached hereto and
incorporated herein.
TO HAVE AND TO HOLD, the same unto the said Grantee, and assigns forever,
with all appurtances thereunto belonging, subject to and excepting all
encumbrances and restrictions of record.
GRANTOR's Tax Account Number:
94-303 2604
<PAGE>
WITNESS my hand and seal this ____ day of September, 1997.
GRANTOR
HMF ASSOCIATES, a California general
partnership
By: Pacific Union Investment
Corporation, a California
corporation, its general partner
By: /s/ Thomas R. Owens
--------------------
Thomas R. Owens, Secretary
BY: Paine Webber Income Properties
Seven Limited Partnership, a
Delaware Limited Partnership
By: Seventh Income Properties,
Inc., a Delaware corporation
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
<PAGE>
ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) SS
COUNTY OF SUFFOLK )
On this 4th day of September, 1997, before me, the undersigned, a Notary
Public, duly commissioned, qualified and acting, within and for the said County
and State, appeared in person the within named Rock M. D'Errico to me well
known, who stated that he is the Vice President of Seventh Income Properties,
Inc., the Managing General Partner of PaineWebber Income Properties Seven
Limited Partnership, which is a general partner of HMF Associates, a general
partnership and is duly authorized in that capacity to execute the foregoing
instrument for and in the name and behalf of the said partnership, and further
stated and acknowledged that he had so signed, executed and delivered said
foregoing instrument as the free and voluntary act and deed of said corporation
and for the consideration, uses and purposes therein mentioned and set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal this
4th day of September, 1997.
/s/ Linda Z. MacDonald
------------------
Notary Public
My Commission Expires: 11/12/1999
<PAGE>
ACKNOWLEDGMENT
STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO
On September 5, 1997, before me, A. Nichole Scanlon, Notary Public,
personally appeared Thomas R. Owens, personally known to me - OR proved to me on
the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
{SEAL}
My Commission Expires: 7/2/1999
/s/ Nichole Scanlon
---------------
Notary Public
<PAGE>
EXHIBIT A
The West Half of the West Half of the Southeast Quarter of the Northwest
Quarter of Section 28, Township 21 North, Range 4 East, Williamette Meridian, in
King County, Washington; except the South 30 feet thereof conveyed to King
County for road purposes by deed recorded under recording number 2617165; and
except that portion thereof conveyed to the State of Washington for highway
purposes by deed recorded under recording number 4980050.
<PAGE>
CHICAGO TITLE INSURANCE COMPANY
ESTIMATED SELLER'S SETTLEMENT STATEMENT
PAGE:01
ESCROW NUMBER: 00633-000476686-001 ORDER NUMBER: 00633-000476686
CLOSING DATE: 9/09/97 CLOSER: SCOTT SMOUSE (206) 628-5693
BUYER: SIMPSON HOUSING LIMITED PARTNERSHIP
A COLORADO LIMITED PARTNERSHIP
SELLER: HMF ASSOCIATES
A CALIFORNIA GENERAL PARTNERSHIP
PROPERTY: 2020 SOUTH 360TH STREET, ENCHANTED WOODS, FEDERAL WAY,
WASHINGTON
CHARGE SELLER CREDIT SELLER
Sales Price $ $ 9,080,400.00
Personal Property 69,600.00
Loan Payoff to St. Paul Federal Bank for Savings
PRINCIPAL BALANCE 8,356,299.00
ST. PAUL ATTORNEY FEE 250.00
Prorations and Adjustments
Real Estate Taxes from 7/01/97 to 9/09/97 21,601.93
Total amounts $112,638.64for 365 days
Collected September Rent from 9/09/97 to
10/01/97 78,855.64
Total amounts $107,530.42 for 30 days
Security Deposits 22,645.00
Last Month's Rents 11,405.24
Prepaid Rents 8,603.00
ATCON SERVICES, INC. 651.20
PACIFIC RIM SECURITY 46.68
TERMINEX INTERNATIONAL 14.96
CENTURY MAINTENANCE 1,375.18
MONARCH LANDSCAPE 5,973.00
Real Estate Excise Tax: $9,080,400.00 @ 1.78% 161,631.12
Owner's Standard Portion $9,150,000.00 10,733.00
Sales Tax: Owner's Standard Title Portion 923.04
Escrow Fee:1/2Fee @ $9,150,000.00 1,750.00
Sales Tax on1/2Escrow Fee 150.50
Messenger/Overnight Deliver Charge (1/2) 35.00
Sales Tax on1/2messenger/Deliver Chg. 3.01
COMMISSION: Pacific Realty Partners (1%) 91,500.00
COMMISSION: SKYLINE PROPERTIES(1.25%) 114,375.00
Reconveyance Fee 51.45
Funds Due To Seller At Closing 261,127.05
------------- --------------
TOTALS $9,150,000.00 $ 9,150,000.00
============= ==============
/s/ Rock M. D'Errico 9/9/97
- --------------------
Rock M. D'Errico
Vice President
HMF ASSOCIATES
A California General Partnership
