FORM 8-K/A No. 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Act of 1934
Date of Report (Date of earliest event reported): April 12, 1995
LINCAM PROPERTIES LTD. SERIES 85
Illinois 2-99673 36-3377785
(State or other (Commission File No.) (IRS Employee
jurisdiction of Identification No.)
organization)
125 S. Wacker Drive, Suite 3100, Chicago, Illinois 60606
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: 312-443-1477
BARTON CREEK LANDING APARTMENTS
Austin, Texas
Item 2. Acquisition or Disposition of Assets
On April 12, 1995, a 60% owned joint venture of Lincam Properties Ltd.
Series 85 (the "Partnership") sold Barton Creek Landing Apartments, a 250-
unit luxury garden apartment complex located in Austin, Texas. The Property
sold includes 18.77 acres of land. The buyer, RREEF Barton Creek, L.P., is
not affiliated with the partnership, the affiliate joint venture, or the
General Partners of the Partnership, and the purchase price for the property
was determined by arm's-length negotiations.
The apartment complex was completed in 1986 and consists of 27 two-
story wood frame buildings with brick and wood exteriors: it contains 71
one-bedroom units and 179 two-bedroom units in a variety of floor plans
totalling 220,688 square feet of net rentable area. The apartment complex
includes a swimming pool, a clubhouse/leasing office, a lighted tennis court
and a sports court and is landscaped with tiered garden areas and spacious
greenbelts. All units are well appointed and include such features as
marble entries, fireplaces, individual security alarm systems, and energy-
saving appliances including frost-free refrigerators with ice makers,
automatic dishwashers, disposals, ovens, ranges and microwaves.
The sales price was $17,871,600 for which the affiliate joint venture
received approximately $14,272,000 in cash net of prorations and closing
costs. The Partnership received 60% of the net proceeds ($8,563,200), a
portion of which was used to repay its $5,000,000 outstanding note payable.
The remainder was used to fund a special distribution on May 31 to the
partners of the Partnership.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements. Not applicable.
(b) Pro Forma Financial Information.
(c) Exhibits.
10.1 Agreement of Purchase and Sale of Barton Creek Landing
Apartments properties by LincAm Barton Venture to RREEF
Barton Creek, L.P., and First Amendment thereto.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LincAm Properties Ltd. Series 85
By: LincAm Properties, Inc.
Corporate General Partner
Date: June 22, 1995 By: /S/ JOHN E. ALLEN
John E. Allen
President of Corporate
General Partner
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LINCAM PROPERTIES LTD. SERIES 85
PRO FORMA FINANCIAL INFORMATION GENERATED FROM
SALE OF BARTON CREEK LANDING APARTMENTS
The following unaudited pro forma financial information for the year
ended December 31, 1994 and for the three months ended March 31, 1995
represents information as if Barton Creek Landing Apartments, located in
Austin, Texas, were sold at the beginning of each period presented. These
estimates do not purport to represent actual or expected operations of the
property for any period in the future. These estimates (which include only
those adjustments to this historical period which can be factually
supported) were prepared in accordance with Rule 11-02 Regulation S-X
promulgated under the Securities Act of 1933 and on the basis described in
the accompanying notes, which should be read in conjunction herewith.
The pro forma financial information consists of four schedules labeled
Schedules A, B, C and D. Schedules A and B represent the proforma balance
sheet and statement of operations as of and for the year ended December 31,
1994. Schedules C and D represent the pro forma balance sheet and statement
of operations as of and for the three months ended March 31, 1995.
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<TABLE>
LINCAM PROPERTIES LTD. SERIES 85 SCHEDULE A
PRO FORMA FINANCIAL INFORMATION GENERATED FROM
SALE OF BARTON CREEK LANDING APARTMENTS
Balance Sheet as of December 31, 1994
(Unaudited)
<CAPTION>
ASSETS
Actual Pro Forma Pro Forma
1994 Adjustments 1994
<S>
Current assets: <C> <C> <C>
Cash and cash equivalents $ 823,430 (374,497) 448,933
Prepaid expenses and other 37,901 (1,903) 35,998
Receivable from tenant 61,679 - 61,679
----------- ---------- ----------
Total current assets 923,010 (376,400) 546,610
Note receivable 5,485,000 - 5,485,000
Investment properties, at cost:
Land 4,933,945 (2,534,771) 2,399,174
Buildings and improvements 22,307,104 (10,268,071) 12,039,033
27,241,049 (12,802,842) 14,438,207
Less accumulated depreciation (5,588,495) 3,004,619 (2,583,876)
----------- ---------- ----------
Total investment properties, net of
accumulated depreciation 21,652,554 (9,798,223) 11,854,331
Deferred expenses, net 86,655 (86,655) -
Other assets 304,856 (94,805) 210,051
----------- ---------- ----------
Total assets $28,452,075 (10,356,083) 18,095,992
LIABILITIES AND PARTNERS' CAPITAL (DEFICITS)
Current liabilities:
Accounts payable 77,063 (33,563) 43,500
Accrued interest 14,383 (14,383) -
Funds held for others 126,586 - 126,586
Accrued real estate taxes 427,116 (309,116) 118,000
Tenant security deposits 113,228 (80,445) 32,783
Unearned income 1,952 (1,952) -
----------- ---------- ----------
Total current liabilities 760,328 (439,459) 320,869
Note payable 5,000,000 (5,000,000) -
----------- ---------- ----------
Total liabilities 5,760,328 (5,439,459) 320,869
Venture partner's investment in venture 4,106,229 (4,106,229) -
Partners' capital (deficits):
General Partners:
Capital contributions 2,000 - 2,000
Allocated portion of cumulative net income 63,124 24,240 87,364
Cumulative cash distributions (102,086) (32,344) (134,430)
(36,962) (8,104) (45,066)
Limited Partners:
Interest of $1,000. Authorized 40,001 Interests;
issued and outstanding 25,016 Interests 22,479,645 - 22,479,645
Allocated portion of cumulative net income 6,305,454 2,399,757 8,705,211
Cumulative cash distributions (10,162,619) (3,202,048) (13,364,667)
18,622,480 (802,291) 17,820,189
----------- ---------- ----------
Total partners' capital 18,585,518 (810,395) 17,775,123
----------- ---------- ----------
Total liabilities and partners' capital $28,452,075 (10,356,083) 18,095,992
</TABLE>
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<TABLE>
LINCAM PROPERTIES LTD. SERIES 85 SCHEDULE B
PRO FORMA FINANCIAL INFORMATION GENERATED FROM
SALE OF BARTON CREEK LANDING APARTMENTS
Consolidated Statements of Operations for the Year Ended December 31, 1994
(Unaudited)
<CAPTION>
Actual Pro Forma Pro Forma
1994 Adjustments 1994
<S>
Income: <C> <C> <C>
Rental income $3,733,479 (2,161,274) 1,572,205
Charges to tenants 126,333 - 126,333
Interest income 433,354 (14,487) 418,867
Other income 86,867 (59,605) 27,262
----------- ---------- ----------
Total income 4,380,033 (2,235,366) 2,144,667
Expenses:
Property operating expenses 1,300,283 (876,014) 424,269
Depreciation 613,936 (285,941) 327,995
Interest expense 370,010 (370,010) -
Management fees paid to affiliate
of general partner 170,002 (109,935) 60,067
Professional services 70,090 (8,200) 61,890
Amortization of deferred expenses 51,993 (51,993) -
General and administrative 68,859 - 68,859
----------- ---------- ----------
Total expenses 2,645,173 (1,702,093) 943,080
Operating income 1,734,860 (533,273) 1,201,587
Gain on sale of investment property - 4,520,375 4,520,375
Venture partner's share of gain on sale
of investment property (383,693) (1,424,457) (1,808,150)
----------- ---------- ----------
Net income before extraordinary item 1,351,167 2,562,645 3,913,812
----------- ---------- ----------
Net income before extraordinary item
per limited partnership interest $ 53.47 101.42 154.89
----------- ---------- ----------
Cash distribution per limited partnership interest $ 70.00 128.00 198.00
</TABLE>
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<TABLE>
LINCAM PROPERTIES LTD. SERIES 85 SCHEDULE C
PRO FORMA FINANCIAL INFORMATION GENERATED FROM
SALE OF BARTON CREEK LANDING APARTMENTS
Balance Sheet as of March 31, 1995
(Unaudited)
ASSETS
<CAPTION>
Actual Pro Forma Pro Forma
1995 Adjustments 1995
<S>
Current assets: <C> <C> <C>
Cash and cash equivalents $ 558,234 (157,786) 400,448
Prepaid expenses and other 36,243 (1,304) 34,939
Receivable from tenant 7,845 - 7,845
----------- ---------- ----------
Total current assets 602,322 (159,090) 443,232
Note receivable 5,485,000 - 5,485,000
Investment properties at cost:
Land 4,933,945 (2,534,771) 2,399,174
Buildings and improvements 22,311,681 (10,311,101) 12,000,580
27,245,626 (12,845,872) 14,399,754
Less accumulated depreciation (5,744,333) 3,076,531 (2,667,802)
----------- ---------- ----------
Total investment property,
net of accumulated deprecation 21,501,293 (9,769,341) 11,731,952
Deferred assets, net 73,657 (73,657) -
Other assets 288,594 (88,635) 199,959
----------- ---------- ----------
Total assets $27,950,866 (10,090,723) 17,860,143
LIABILITIES AND PARTNERS' CAPITAL (DEFICITS)
Current liabilities:
Accounts payable 33,978 (3,256) 30,722
Accrued interest 10,139 (10,139) -
Funds held for others 25,863 - 25,863
Amounts due to affiliates 6,731 1,943 8,674
Accrued real estate taxes 183,402 (83,778) 99,624
Tenant security deposits 108,308 (74,275) 34,033
Unearned income 1,482 (1,482) -
----------- ---------- ----------
Total current liabilities 369,903 (170,987) 198,916
Note payable 5,000,000 (5,000,000) -
----------- ---------- ----------
Total liabilities 5,369,903 (5,170,987) 198,916
Venture partner's investment in venture 4,098,525 (4,098,525) -
Partners' capital (deficits):
General Partners:
Capital contributions 2,000 - 2,000
Allocated portion of cumulative net income 66,642 27,164 93,806
Cumulative cash distributions (106,634) (35,376) (142,010)
(37,992) (8,212) (46,204)
Limited Partners:
Interest of $1,000. Authorized 40,001 Interests;
issued and outstanding 25,016 Interests 22,479,645 - 22,479,645
Allocated portion of cumulative net income 6,653,692 2,689,241 9,342,933
Cumulative cash distributions (10,612,907) (3,502,240) (14,115,147)
18,520,430 (812,999) 17,707,431
----------- ---------- ----------
Total partners' capital 18,482,438 (821,211) 17,661,227
----------- ---------- ----------
Total liabilities and partners' capital $27,950,866 (10,090,723) 17,860,143
</TABLE>
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<TABLE>
LINCAM PROPERTIES LTD. SERIES 85 SCHEDULE D
PRO FORMA FINANCIAL INFORMATION GENERATED FROM
SALE OF BARTON CREEK LANDING APARTMENTS
Consolidated Statements of Operations for the Three Months Ended March 31, 1995
(Unaudited)
<CAPTION>
Actual Pro Forma Pro Forma
1995 Adjustments 1995
<S>
Income: <C> <C> <C>
Rental income $ 977,535 (574,499) 403,036
Charges to tenant 34,095 - 34,095
Interest income 110,292 (8,255) 102,037
Other income 22,536 (15,470) 7,066
----------- ---------- ----------
Total income 1,144,458 (598,224) 546,234
Expenses:
Property operating expenses 309,561 (205,573) 103,988
Depreciation 155,838 (71,911) 83,927
Interest expense 113,201 (113,201) -
Management fees paid to affiliate of General Partner 45,072 (29,475) 15,597
Professional services 19,773 (6,000) 13,773
Amortization of deferred expenses 12,998 (12,998) -
General and administrative 23,963 (6,072) 17,891
----------- ---------- ----------
Total expenses 680,406 (445,230) 235,176
----------- ---------- ----------
Operating income 464,052 (152,994) 311,058
Gain on sale of investment property - 4,739,597 4,739,597
Venture partner's share of gain on sale
of investment property (112,296) (1,783,543) (1,895,839)
----------- ---------- ----------
Net income before extraordinary item $ 351,756 2,803,060 3,154,816
Net income before extraordinary item ----------- ---------- ----------
per limited partnership interest $ 13.92 110.93 121.42v
----------- ---------- ----------
Cash distributions per limited partnership interest $ 18.00 140.00 158.00
<FN>
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LINCAM PROPERTIES LTD. SERIES 85
NOTES TO PRO FORMA FINANCIAL INFORMATION GENERATED FROM
SALE OF BARTON CREEK LANDING APARTMENTS
1. For the year ended December 31, 1994 and for the three months ended March 31, 1995,
rental income, interest income, other income, property operating expenses, depreciation
expense, management fees, professional services and general and administrative expenses
have been decreased by the amounts generated by Barton Creek Landing Apartments.
2. For each period interest expense from the note payable has been decreased as if the
Partnership paid the note in full immediately upon receiving the cash proceeds from the
sale of Barton Creek Landing Apartments.
3. The amortization of deferred expenses has also been decreased as if the Partnership
expects to recognize extraordinary charges associated with the retirement of the note
payable. This extraordinary charge has not been included in the pro forma statements of
operations.
4. For each period the effect of all property placed in service during the period has been
reversed.
5. For each period the Partnership distributed cash proceeds to its partners equal to
substantially all of the amount by which net cash proceeds from the sale exceeded bank
debt repaid.
</TABLE>
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FIRST AMENDMENT TO PURCHASE AGREEMENT
This First Amendment to Purchase Agreement is made as of the ___ day of
April, 1995 by and between RREEF America L.L.C., a Delaware limited liability
company ("Purchaser") and Lincam Barton Venture ("Seller").
W I T N E S S E T H:
WHEREAS, Seller and Purchaser have entered into that certain Purchase
Agreement dated February 17, 1995 (the "Contract") for the purchase and sale
of the property known as Barton Creek Landing Apartments (the "Property"), as
more particularly described therein;
WHEREAS, Seller and Purchaser have agreed to various changes to the
Contract, as more fully set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereby amend the Contract as
follows:
1. Purchase Price. The definition of Purchase Price under paragraph
1.3(a) of the contract is hereby amended to read as follows: "Purchase Price.
The purchase price for the Property (the Purchase Price) is $14,871,600."
2. Tax Holdback. At closing, the real estate tax credit to be
provided by Seller to Purchaser under the Contract shall be based on $940.99
for each day of Seller's period of ownership during the tax bill period. In
addition, Seller shall credit to Purchaser an amount equal to $59.18 for each
day of Purchaser's period of ownership during the current tax bill period,
which Purchaser shall hold in its operating account until the final real
estate tax bill attributable to the current billing period is issued. To the
extent the actual tax bill is less than $343,462 and greater than $321,839,
within thirty (30) days after receipt of such final tax bill, Purchaser shall
pay to Seller an amount equal to Purchaser's share (on a per diem basis) of
$343,462 less the greater of (i) the actual amount of such tax bill, or (ii)
$321,839.
3. Confidentiality. The parties hereto agree to keep confidential
all matters relating to the Purchase Price (other than on a need-to-know
basis), and to obtain agreements from their respective brokers, agents and
employees to do the same.
4. Property Owners Association. At Closing, Seller shall deliver to
Purchaser an estoppel letter (in a form reasonably acceptable to Purchaser)
from the Wallingwood P.U.D. Owners Association stating the annual amount of
assessment due for the Property, that Seller has paid all assessments and
other amounts due and owing to date, that no special assessments are being
charged or are anticipated, and that neither Seller nor the Property is in
violation of the terms of the Declaration of Covenants, Conditions and
Restrictions creating such association.
5. Price Allocation. Seller and Purchaser acknowledge that a portion
of the Purchase Price is attributable to personal property to be conveyed. At
or prior to closing, Seller and Purchaser shall negotiate in good faith to
arrive at an allocation of the Purchase Price between the personal and real
property to be conveyed.
6. Zoning: Inspection Period. Upon full execution and delivery of
this First Amendment by Seller and Purchaser, Purchaser hereby approves of the
condition of the Property and waives its right to terminate the Contract
pursuant to paragraph 2.1 thereof, except with regard to zoning matters. If
Purchaser determines, in its sole discretion, that the current zoning for the
Property is unsatisfactory to Purchaser, Purchaser may terminate this Contract
by giving written notice of termination to Seller on or before April 12, 1995.
If Purchaser does not so give such notice of termination, the Contract shall
continue in full force and effect.
7. Severability. If any provision of this Amendment is held to be
illegal, invalid, or unenforceable under present or future laws, such
provision shall be fully severable; this Amendment shall be construed and
enforced as if such illegal, invalid, or unenforceable provision had never
comprised a part hereof; and the remaining provisions hereof shall remain in
full force and shall not be affected by the illegal, invalid, or unenforceable
provision or by its severance therefrom.
8. Continuation of Contract. Other than as amended herein, the
Contract shall remain in full force and effect and all capitalized terms
herein shall have the same definition as those contained in the Contract. In
the event of any conflict between the terms of the Contract and this First
Amendment, the provisions of this First Amendment shall govern.
IN WITNESS WHEREOF, the parties have executed this First Amendment to
the Contract as of the date first set forth above.
Seller: Purchaser:
Lincam Barton Venture RREEF America L.L.C.,
a Delaware limited
liability company
By: Lincam Properties Ltd. Series 85
By: Lincam Properties, Inc. By:
a Delaware corporation, ___________________________
general partner Title: Authorized
Representative
By: ____________________________
Title:
By: Lincam Associates, Ltd.
an Illinois limited partnership,
general partner
By: ____________________________
Title:
AGREEMENT OF PURCHASE AND SALE
FOR THE ACQUISITION
OF
BARTON CREEK LANDING APARTMENTS
BY
RREEF AMERICA L.L.C.
FROM
LINCAM PROPERTIES LTD. SERIES 85
Dated as of: February ____, 1995
TABLE OF CONTENTS
Page
ARTICLE 1 CERTAIN TERMS/PROPERTY/PURCHASE PRICE/
ADDITIONAL CONSIDERATION
1.1 Certain Definitions. . . . . . . . . . . . . . . . . .1
1.2 Purchase and Sale. . . . . . . . . . . . . . . . . . .3
1.3 Purchase Price and Payment . . . . . . . . . . . . . .3
1.4 Earnest Money. . . . . . . . . . . . . . . . . . . . .3
ARTICLE 2 INSPECTION
2.1 Inspection and Review Period . . . . . . . . . . . . .3
2.2 Continuing Right of Access for Inspection. . . . . . .8
ARTICLE 3 TITLE REVIEW
3.1 Delivery of Title Documents. . . . . . . . . . . . . .8
3.2 Review of Title. . . . . . . . . . . . . . . . . . . .9
3.3 Further Exceptions . . . . . . . . . . . . . . . . . 10
ARTICLE 4 OPERATIONS PRIOR TO CLOSING
4.1 Seller's Operations. . . . . . . . . . . . . . . . . 10
4.2 Leasing Arrangements and Management Transition . . . 11
4.3 Removal and Replacement of Tangible Personal Property12
4.4 Seller's Obligations . . . . . . . . . . . . . . . . 12
ARTICLE 5 CLOSING
5.1 Closing Date . . . . . . . . . . . . . . . . . . . . 13
5.2 Seller's Deliveries in Escrow. . . . . . . . . . . . 13
5.3 Purchaser's Deliveries in Escrow . . . . . . . . . . 14
5.4 Closing Statements/Transfer Declarations . . . . . . 15
5.5 Title Policy/Updated UCC Searches. . . . . . . . . . 15
5.6 Possession . . . . . . . . . . . . . . . . . . . . . 15
5.7 Termination of Property Management and Other Service
Contracts. . . . . . . . . . . . . . . . . . . . . . 15
5.8 Memorandum/Name of Representative. . . . . . . . . . 16
5.9 Delivery of Books and Records. . . . . . . . . . . . 16
5.10 Notice to Tenants and Vendors. . . . . . . . . . . . 16
5.11 Close of Escrow. . . . . . . . . . . . . . . . . . . 16
5.12 Conditions Precedent . . . . . . . . . . . . . . . . 17
ARTICLE 6 PRORATIONS/OTHER ALLOCATIONS
AND DELIVERIES/EXPENSES
6.1 Prorations . . . . . . . . . . . . . . . . . . . . . 18
6.2 Tenant Deposits. . . . . . . . . . . . . . . . . . . 20
6.3 Sales, Transfer, and Documentary Taxes . . . . . . . 20
6.4 Utility Deposits . . . . . . . . . . . . . . . . . . 20
6.5 Permit Transfer Fees . . . . . . . . . . . . . . . . 20
6.6 Wages. . . . . . . . . . . . . . . . . . . . . . . . 20
6.7 Intentionally Deleted. . . . . . . . . . . . . . . . 20
6.8 Commissions. . . . . . . . . . . . . . . . . . . . . 20
6.9 Transaction Expenses . . . . . . . . . . . . . . . . 21
ARTICLE 7 REPRESENTATIONS AND WARRANTIES
7.1 Seller's Representations and Warranties. . . . . . . 21
7.2 Purchaser's Representations and Warranties . . . . . 27
7.3 Survival of Representation, Warranties and Covenants 28
ARTICLE 8 DAMAGE OR DESTRUCTION/CONDEMNATION
8.1 Damage or Destruction. . . . . . . . . . . . . . . . 29
8.2 Condemnation . . . . . . . . . . . . . . . . . . . . 30
ARTICLE 9 REMEDIES
9.1 Purchaser's Default. . . . . . . . . . . . . . . . . 30
9.2 Seller's Default . . . . . . . . . . . . . . . . . . 30
ARTICLE 10 MISCELLANEOUS
10.1 Parties Bound. . . . . . . . . . . . . . . . . . . . 31
10.2 Headings . . . . . . . . . . . . . . . . . . . . . . 31
10.3 Invalidity . . . . . . . . . . . . . . . . . . . . . 31
10.4 Governing Law. . . . . . . . . . . . . . . . . . . . 32
10.5 Survival . . . . . . . . . . . . . . . . . . . . . . 32
10.6 No Third Party Beneficiary . . . . . . . . . . . . . 32
10.7 Entirety and Amendments. . . . . . . . . . . . . . . 32
10.8 Execution in Counterparts. . . . . . . . . . . . . . 32
10.9 Further Assurances . . . . . . . . . . . . . . . . . 32
10.10 Time. . . . . . . . . . . . . . . . . . . . . . . . 33
10.11 Confidentiality . . . . . . . . . . . . . . . . . . 33
10.12 U.S. Currency Required. . . . . . . . . . . . . . . 33
10.13 Attorneys' Fees . . . . . . . . . . . . . . . . . . 33
10.14 Use of Pronouns . . . . . . . . . . . . . . . . . . 33
10.15 Notices. . . . . . . . . . . . . . . . . . . . . . 33
10.16 Construction . . . . . . . . . . . . . . . . . . . 34
10.17 Calculation of Time Periods. . . . . . . . . . . . 34
10.18 Information and Audit Cooperation. . . . . . . . . 35
10.19 Limitation of Liability. . . . . . . . . . . . . . 35
10.20 As-Is, Where-Is. . . . . . . . . . . . . . . . . . 35
ARTICLE 11 INDEMNIFICATION
11.1 Seller's Agreements. . . . . . . . . . . . . . . . . 36
11.2 Purchaser's Agreements . . . . . . . . . . . . . . . 36
11.3 Procedures for Obtaining Indemnification. . . . . . 37
11.4 Right to Assume Defense. . . . . . . . . . . . . . . 38
AGREEMENT OF PURCHASE AND SALE
(Barton Creek Landing Apartments)
THIS AGREEMENT OF PURCHASE AND SALE ("Agreement") is made as of the ___
day of _________________, 1995, by and between RREEF AMERICA L.L.C., a
Delaware limited liability company (the "Purchaser") and LINCAM PROPERTIES LTD
SERIES 85, an Illinois limited partnership (as "Seller") under the following
circumstances:
A. Seller is the owner of the 250-unit apartment project and related
facilities situated on the land described in Exhibit A attached hereto.
B. Seller desires to sell to Purchaser and Purchaser desires to buy
from the Seller, subject to and upon the terms and conditions hereinafter set
forth, the 250-unit apartment project and related facilities situated on the
land described in Exhibit A hereto.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1: CERTAIN TERMS/PROPERTY/PURCHASE PRICE/
ADDITIONAL CONSIDERATION
1.1 Certain Definitions: As used herein, the terms listed below shall
have the following meanings throughout this Agreement:
(a) The term "Real Property" shall be a reference to the real
property described in Exhibit A attached hereto, together with (i) all
improvements (if any) located thereon, including without limitation all
heating, ventilation, electrical, plumbing and other mechanical or
operational systems (collectively, the "Improvements"), (ii) all and
singular the rights, benefits, privileges, easements, tenements,
hereditaments and appurtenances thereon or in anywise appertaining to
such real property, (iii) all right, title, and interest of the Seller
in and to all strips and gores and any land lying in the bed of any
street, road or alley, open or proposed, adjoining any portion of such
real property, and (iv) all right, title and interest of the Seller in
and to all other real property around, claimed or used by the Seller
adjoining or contiguous to any part of such real property. When the
Survey (as defined herein) is available, the legal description in the
Survey shall be accepted by the parties as the correct legal description
of the Real Property, although material differences from Exhibit A shall
be subject to the reasonable approval of Purchaser.
(b) The term "Leases" shall be a collective reference to all
leases of or other occupancy agreements for apartments and other space
in the Improvements, including leases that may be made by Seller after
the date hereof and prior to the Closing (as defined herein).
(c) The term "Tangible Personal Property" shall be a collective
reference to all equipment, machinery, furniture, furnishings, supplies
and other tangible personal property owned by Seller and Seller's
interest in any such property leased to Seller, now or hereafter located
in and used in connection with the operation, ownership or management of
the Real Property.
(d) The term "Intangible Personal Property" shall be a
collective reference to all intangible personal property related to the
Real Property, including, without limitation: all trade names and
trademarks associated with the Real Property including Seller's rights
and interests, if and to the extent Seller has such rights and
interests, in the name of the Real Property, which is commonly known as
"Barton Creek Landing Apartments"; the plans and specifications and
other architectural and engineering drawings for the Improvements, if
and to the extent Seller has any right, title or interest in and to such
plans and specifications and other architectural and engineering
drawings for the Improvements; contract rights related to the
construction, operation, ownership or management of the Real Property
(but excluding the obligations of the Seller thereunder, except those
expressly assumed pursuant to this Agreement); warranties, zoning
approvals, building permits and licenses (to the extent assignable);
tenant lists, correspondence with tenants and records (including, but
not limited to, those relating to taxes, insurance, maintenance,
repairs, capital improvements and services), booklets, manuals,
advertising and promotional materials, including, without limitation,
photographs and negatives, correspondence with suppliers, and telephone
exchange numbers (if available).
(e) The term "Property" shall be a collective reference to the
Real Property and all Improvements, Tangible Personal Property and the
Seller's interest in the Leases and Intangible Personal Property.
1.2 Purchase and Sale. Subject to the applicable terms and conditions
of this Agreement, Seller agrees to sell the Property to Purchaser, and
Purchaser agrees to purchase the Property from Seller.
1.3 Purchase Price and Payment.
(a) Purchase Price. The purchase price for the Property (the
"Purchase Price") is $14,900,000.00.
(b) Payment of Purchase Price. The Purchase Price shall be
payable at Closing (defined below), plus or minus prorations and other
adjustments to the Purchase Price as described herein and after the
application for the benefit of Purchaser of all Earnest Money (including
any interest earned thereon), by wire transfer to the Seller.
1.4 Earnest Money. Purchaser has deposited $50,000.00 into a joint
order escrow account with Chicago Title Insurance Company, National Business
Unit, 7616 LBJ Freeway, Suite 300, Dallas, Texas 75251 (Attn. Ms. Ellen
Schwab) as escrow trustee, with such funds to be deposited in an insured
interest bearing account pursuant to instructions to the Title Insurer from
the Purchaser. Unless the Purchaser terminates this Agreement by delivery of
written notice to Seller on or before the last day of the Review Period (as
determined in accordance with Section 2.1 hereof), the Purchaser shall deposit
within five (5) business days after the last day of the Review Period (as
determined in accordance with Section 2.1 hereof) an additional $50,000.00
into the Escrow (all such amounts deposited therein, together with any
interest accrued thereon, shall be collectively referred to herein as the
"Earnest Money"). If Purchaser delivers such termination notice, all Earnest
Money shall be returned promptly to Purchaser and, subject to the provisions
of Section 2.1(d) below, this Agreement shall be null and void. In the
absence of such notice, provided Seller fulfills all its obligations under
this Agreement, the Earnest Money shall be nonrefundable to Purchaser and
payable to Seller at Closing or, upon default of Purchaser, after the
expiration of all applicable cure periods. Purchaser's failure to timely
deposit the additional $50,000 referred to above shall be deemed a default
hereunder and Seller shall have the right to exercise its rights and remedies
pursuant to the terms and provisions of Section 9.1 hereof.
ARTICLE 2: INSPECTION
2.1 Inspection and Review Period. Purchaser shall have forty-five (45)
days after the date hereof (the "Review Period") to receive, review and
inspect all aspects of the Property and to determine, in its sole discretion,
that the Property is satisfactory in all respects. Notwithstanding anything
to the contrary in this Agreement, Purchaser may terminate this Agreement by
giving written notice of termination to Seller on or before the expiration of
the Review Period. If Purchaser does not so give such notice of termination,
this Agreement shall continue in full force and effect and Purchaser shall
deposit with the Title Company, at the time and in the manner required
pursuant to Paragraph 1.4, above, the additional Earnest Money described
therein.
(a) Inspections. The inspections and reviews will include, at a
minimum, the following:
(i) Physical inspections of the entire Property, unit by unit,
including structural, mechanical, life-safety, engineering, civil,
landscaping, paving, plumbing, electrical and all other detail
inspections;
(ii) Examination of all construction items, to the extent in Seller's
possession or control (which, for purposes hereof, "control" shall
mean readily available to Seller without cost [other than
incidental costs of postage and other such items]), including as-
built architectural, civil, electrical, life-safety, mechanical
and plumbing plans and specifications, copies of any available
construction reports, whether internal or external, certificates
of completion from the project architect and inspecting architect,
certificates of occupancy, building permits, evidence of
compliance with fire code, building code and other governmental or
regulatory code requirements and all other related use permits;
(iii) Examination of all operating statements and supporting
documentation of the Property from and including calendar years
1991 through 1994 as well as 1995 year to date together with the
1995 budget, reflecting all detailed rental income, operating
expense accounts, and the maintenance log maintained for the
Property;
(iv) All documentation maintained in current tenant files, including
all Leases, security deposit information, credit reviews, and the
like;
(v) An environmental report for the Property prepared by a qualified
engineering firm acceptable to Purchaser and in form otherwise
satisfactory to Purchaser, which shall be paid for by Purchaser
and shall remain the property of Purchaser;
(vi) All existing title policies and commitments and surveys issued or
prepared in connection with the Property, together with copies of
all exception documents noted therein; and
(vii) Such other documents, reviews and inspections as Purchaser
determines are reasonably necessary.
(b) Access. Purchaser and its agents and contractors shall have
unlimited access to the Property, subject to the limitations set forth herein
(including, without limitation, the rights of all tenants under their leases),
during the Review Period to enable Purchaser to conduct its review and
analysis of the Property. Purchaser shall indemnify, defend and hold Seller
harmless with respect to any damage to the Property or injury to any person
caused by Purchaser, its agents, employees or contractors in connection with
its investigations of the Property, provided, however, that with respect to
any damage to the Property or injury to any person not caused solely by the
negligence of any one or more of Purchaser, its agents or its contractors,
such indemnification to be limited to the extent of Purchaser's, its agents'
or contractors' contributory negligence. All activities of Purchaser during
the Review Period shall be at Purchaser's sole expense, subject to Section 6.9
and Article 9 below.
Purchaser agrees to provide Seller with twenty-four (24) hours advance
notice of such inspections and further agrees that Seller (i) has the right to
have an employee or agent present during such inspections and (ii) has the
right to approve in its sole discretion the scope and method of any physically
intrusive inspection (for example, a Phase II Site Assessment).
(c) Cooperation. To the extent such items are in Seller's possession
or control (which, for purposes hereof, "control" shall mean readily available
to Seller without cost [other than incidental costs of postage and other such
items]), Seller shall provide access to the Property and copies of all items
and records noted in Section 2.1(a) above, in this Section 2.1(c) below, or
hereafter requested (collectively the "Property Information"), to Purchaser
and Purchaser's agents during normal business hours. Purchaser's inspection
rights shall include without limitation the right to conduct a "walk-through"
of the individual apartment units located in the Property during the Review
Period or prior to the Closing, upon appropriate notice (not to exceed twenty-
four (24) hours) to tenants subject to the rights of tenants under their
leases. In the course of its investigations, Purchaser may make inquiries to
third parties, including, without limitation, tenants, lenders, contractors,
property managers, parties to Service Contracts and municipal, local and other
government officials and representatives, and Seller consents to such
inquiries. Seller shall in good faith cooperate with Purchaser and
Purchaser's agents during Purchaser's reviews and inspections, and Seller
shall disclose to Purchaser prior to expiration of the Review Period all
physical and financial aspects of the Property of which Seller has any
knowledge. Specifically, and without limitation, Seller shall provide to
Purchaser (to the extent not already provided) not later than seven (7) days
after the date hereof with copies of or access to the following items for the
Property:
(i) Plans. Copies of architectural and construction plans and
specifications;
(ii) Surveys. Copies of existing surveys;
(iii) Environmental. Copies of all existing environmental inspections,
reports, tests, studies or audits;
(iv) Title. Copies of existing title policies or commitments and all
title exception documents;
(v) Operating Statements. Copies of unaudited annual operating
statements for 1991, 1992 , 1993 and 1994, plus the Property
budget for 1995 (collectively, together with those referred to in
Section 4.1(f), the "Operating Statements") together with a
breakdown of all sources and amounts of all income in addition to
rental revenues;
(vi) Leases. Access to all Leases and Lease files and service
agreements and maintenance files;
(vii) Permits. A copy of all certificates of occupancy and copies of
all current governmental permits, licenses and approvals;
showing unit, tenant, monthly rental, security or other deposit,
date of security or other deposit, date rent paid through,
delinquency, free rent or other concessions, and lease term
(including any renewals);
(ix) Tax Statements. Copies or a summary of ad valorem tax statements
(including copies of all notices of valuation or tax protests)
relating to the Property for the current year or other current tax
period (if available) and for the three (3) calendar years
preceding this Agreement;
(x) Lease Form. Copies of Seller's standard lease forms in use at the
Property;
(xi) Service Contracts. Copies of a list (together with access to
copies) of all management agreements, service, supply, equipment
rental and similar contracts related to the operation of the
Property (collectively, the "Service Contracts");
(xii) Maintenance Records. Access to all available maintenance work
orders for the 12 months preceding this Agreement;
(xiii) Utility Bills. Access to all utility bills for the twelve (12)
months preceding this Agreement, if available;
(xiv) List of Capital Improvements. A list of all capital improvements
performed on the Property within the twelve (12) months preceding
this Agreement;
(xv) Inventory. An inventory of the Tangible Personal Property and the
Intangible Personal Property;
(xvi) ADA Reports. Any written reports, results of inspections or
surveys of the Property related to compliance with the Americans
with Disabilities Act or other laws relating to access; and
(xvii) Governmental Notices. Any written notices, reports, citations,
correspondence or memoranda received by Seller from any government
agency, unit, division or department (federal, state, county or
municipal) concerning the Property and not covered in any of the
categories above.
(xviii) Litigation. A list of all litigation affecting the Property from
1992 to date and any pending litigation affecting the Property.
In addition, Seller shall arrange for Purchaser's representatives to meet as
soon as practicable during the Review Period with the property manager or the
person most knowledgeable about the Property to discuss the Property's
operating performance, competitive position in the market, capital
improvements and the like. In addition, Seller agrees to provide promptly to
Purchaser any documents and information described in Sections 2.1(a) and (c)
and coming into Seller's possession or produced by Seller prior to Closing.
(d) Return of Materials. If this transaction does not close for any
reason other than Seller's default, then all materials furnished by Seller
shall be returned promptly to Seller upon receipt by Purchaser of the Earnest
Money. If this Agreement terminates in its entirety pursuant to this Section
2.1, Purchaser shall deliver $100 to Seller as consideration for Seller's
execution of and entry into this Agreement. Seller acknowledges that
Purchaser expects to expend significant time, money and other resources in
connection with the examination and investigation of the Property, and that,
notwithstanding the fact that this Agreement may terminate pursuant to this
Section 2.1, the payment of the $100 hereinabove described to be paid to
Seller in the event of such a termination of this Agreement, the delivery of
certain items which Purchaser may obtain, together with such time, money and
other resources that may be expended, constitutes adequate consideration for
Seller's execution of and entry into this Agreement.
2.2 Continuing Right of Access for Inspection. During the pendency of
this Agreement (even after the Review Period), Purchaser and its agents,
employees, and representatives shall have a continuing right of reasonable
access to the Property (which access shall still be subject to Section 2.1(b)
above) and the right to examine and make copies of all items to which
Purchaser was granted access during the Review Period.
ARTICLE 3: TITLE REVIEW
3.1 Delivery of Title Documents. Within seven (7) days after the date
of this Agreement, Seller shall cause to be prepared and delivered to
Purchaser the items in clauses (b) and (c) below and Purchaser shall cause to
be prepared and delivered to Purchaser the item in clause (a) below:
(a) A commitment (the "Title Commitment") covering a date not earlier
than ten (10) days prior to the date of this Agreement issued by Chicago Title
Insurance Company (the "Title Insurer" or the "Title Company") through its
agent Heritage Title Insurance Company, Austin, Texas, to Purchaser providing
for the issuance to Purchaser at the Closing of a Texas Form T-1 Owner's Title
Insurance Policy with respect to the Real Property to be conveyed to Purchaser
at Closing, in the amount of the Purchase Price, which commitment must
disclose the Seller as the owner of fee simple title to the Real Property
together with legible copies of all documents underlying all exceptions to
title; and
(b) A survey (including field notes) of the Real Property (the
"Survey") made by Point Line Surveying, Inc. (Melvin D. Lindsey) or other
surveyors or civil engineers approved by Purchaser and duly licensed in the
jurisdiction in which the Real Property is located. The Survey shall be dated
after the date of this Agreement, and Seller shall have same certified to
Purchaser, any parties designated by Purchaser, and Title Insurer. Seller
shall endeavor to have the surveyor certify the Survey using the form of
Exhibit B attached hereto, as having been prepared in accordance with the
standards adopted by the Texas Society of Professional Surveyors, including
the standards for a Category 1A, Condition II survey as well as ALTA-ASCM
Urban standards (provided, however, the only optional matters to be included
regarding ALTA-ASCM Urban standards will be those that would be required under
Texas Category 1A, Condition II standards). To the extent that the surveyor
does not use the language for his certificate as set forth in Exhibit B, or
there are any optional items Purchaser would prefer to see the survey contain,
Purchaser may note any discrepencies as to the certificate or preferred
optional items as Title Objections. The Survey shall be sufficient for
purposes of amending the areas and boundaries exception in the Title Policy.
The Survey shall set forth all matters required on such a survey, including,
but not limited to, the following: (i) all easements, rights-of-way and other
encumbrances and matters of record affecting or appurtenant to the Real
Property; (ii) the building and setback lines, if any; (iii) the line of the
street or streets abutting the Real Property or any portion thereof; (iv) any
and all encroachments upon the Real Property or any easement appurtenant
thereto; (v) all Improvements on the Real Property (including exterior
dimensions); (vi) the configuration and number of parking spaces; and (vii)
the area of the Real Property; and (viii) stating whether the Real Property is
located in an area designated by HUD as having special flood risks; and
the Closing Date is extended pursuant hereto) copies of current Uniform
Commercial Code searches in the name of Seller and the Property issued by the
Title Company or a search company acceptable to Purchaser ("UCC Searches"),
covering a date not earlier than thirty (30) days prior to the Closing.
3.2 Review of Title. Purchaser shall have ten (10) business days
after the last to be received of the Title Commitment (including true, correct
and complete copies of all exception documents referenced therein) and the
Survey to review title and survey matters with respect to the Property, and to
notify Seller of any objections to such matters ("Title Objections") with
respect to the Property.
Seller shall be obligated to discharge any Title Objections which are
financing liens, mechanics' liens, materialmens' liens or tax liens and
matters arising out of Seller's voluntary acts subsequent to the date of the
Title Commitment, all of which liens, encumbrances and other matters shall be
satisfied, cured or discharged, as appropriate, prior to the Closing.
Purchaser may attempt, but shall not be obligated, to cure any Title
Objections. Within five (5) business days of receipt of a notice delivered by
Purchaser to Seller under the preceding paragraph, Seller shall notify
Purchaser in writing of any Title Objection which it either refuses to cure or
is unable to cure in a manner acceptable to Purchaser; in the absence of such
notice from Seller, Seller shall be deemed to have agreed to cure or satisfy
all Title Objections that were raised in such notice from Purchaser, and all
such Title Objections shall be cured or satisfied by Seller prior to the
applicable Closing.
Purchaser shall have the right by giving notice to Seller within five
(5) business days after Purchaser is notified by Seller of its refusal or
inability to cure any of the Title Objections raised by Purchaser to (i) elect
not to purchase the Property and to terminate this Agreement, in which event,
notwithstanding anything in this Agreement to the contrary, the Earnest Money
shall be returned to Purchaser; (ii) elect to proceed pursuant to this
Agreement, thereby waiving its objection to such Title Objections; and/or
(iii) elect to proceed pursuant to this Agreement, with the right to deduct
from the Purchase Price (1) an amount necessary to discharge, satisfy or cure
those Title Objections that Seller is obligated to discharge, satisfy or cure
pursuant to the first sentence of the immediately preceding paragraph and (2)
an amount, not to exceed $50,000, necessary to discharge any other liens or
encumbrances of a definite or ascertainable amount. For purposes of this
Agreement, the term "Permitted Exceptions" means (i) general or special real
estate taxes not then due and owing, (ii) acts done or suffered to be done by
Purchaser, (iii) leases entered into in the ordinary course of Seller's
business and in accordance with the terms hereof, (iv) title matters that are
disclosed by the Title Commitment and not objected to by Purchaser and (vi)
any Title Objections waived by Purchaser in writing. If Purchaser fails to
give the foregoing written notice to Seller within the time required in this
paragraph, it shall be conclusively deemed that Purchaser has elected to waive
the applicable Title Objections and has accepted them as additional Permitted
Exceptions.
3.3 Further Exceptions. If Title Insurer issues further amended Title
Commitments or UCC Searches showing additional exceptions or exclusions from
coverage or if further revised Surveys disclose additional defects, Purchaser
may notify Seller of resulting additional Title Objections, the parties' shall
proceed as provided above, and the Closing shall be extended, as necessary,
but not beyond April 15, 1995, to accommodate Purchaser's right to object and
terminate (and receive its Earnest Money) and the parties' right to cure in
the manner provided above.
ARTICLE 4: OPERATIONS PRIOR TO CLOSING
4.1 Seller's Operations. Seller agrees that so long as this Agreement
shall remain in effect, Seller shall:
(a) Insurance. Maintain any and all insurance coverage presently in
effect with respect to the Property, including policies of public liability,
property damage and fire insurance;
(b) Operations and Management. Unless otherwise provided herein,
operate and manage the Property in the ordinary course of business in
accordance with usual business practices in a manner befitting the current
quality of the Property, and maintain the Property in its present condition,
reasonable wear and tear excepted, including needed repairs and capital
improvements consistent with historical practices and quality maintenance
standards;
(c) Contracts. Except as to Leases complying with Section 4.2 and
contracts entered into in the ordinary course of business that are terminable
without cause on 30-day's notice or as otherwise expressly permitted herein,
not enter into any contract that will be an obligation affecting the Property
subsequent to the Closing;
(d) Listings and Other Offers. Not solicit or make or accept any
offers to sell the Property, not engage in any discussions or negotiations
with any third party with respect to the sale or other disposition of the
Property, and not enter into any other contracts or agreements (whether
binding or not) to sell or otherwise dispose of the Property;
(e) Not Violate Agreement. Not take or omit to take any action that
would have the effect of violating any of Seller's representations, warranties
and agreements contained in this Agreement;
(f) Operating Statements. Furnish Purchaser with monthly Operating
Statements and monthly Rent Rolls as they become available, which statements
and rent rolls shall be included in the defined terms "Operating Statements"
and "Rent Rolls" as used herein; and
(g) Access. Furnish Purchaser access to the Property and to records
as set forth in Sections 2.1 and 2.2 and otherwise to verify management and
maintenance practices and to assist any management transitions which would
occur upon the Closing of this transaction.
4.2 Leasing Arrangements and Management Transition. Seller agrees
that:
(a) Leasing. From and after the date of this Agreement, without
Purchaser's prior written consent in each instance: Seller shall not enter
into, amend or terminate any Lease unless in the ordinary course of business.
All Leases entered into during this Agreement shall be on Seller's current
standard lease forms except for non-material deviations, shall be for terms of
no less than six (6) months and no greater than twelve (12) months at current
market rentals, shall not include any concessions or discounts in excess of
those prevalent in the market, and shall otherwise comply with Seller's
current leasing policies. No leasing commissions will be incurred, except in
accordance with Seller's past practice and in the ordinary course of business.
(b) Management Transition. From and after the date hereof, Seller
shall promptly provide to Purchaser copies of all monthly operating statements
concerning the operation of the Property. It is agreed that such reports will
be prepared on at least a monthly basis. Seller agrees that Purchaser may
contact Seller's or Seller's managing agent's supervisors to discuss the
reports delivered to Purchaser and to discuss the operation of the Property.
Seller agrees to cooperate fully with Purchaser and Purchaser's
representatives to apprise Purchaser of all matters relating to management of
the Property and to facilitate transition of management at the Closing.
Seller shall allow Purchaser's management personnel to work at the Property
with Seller or Seller's managing agent's management personnel commencing five
(5) days prior to the Closing for the purpose of installing facilities,
reviewing files and records, determining the exact amount of unpaid and
prepaid bills and rents, and otherwise preparing to take over management of
the Property. In connection therewith, Seller shall allow Purchaser access to
all files and records during such period.
4.3 Removal and Replacement of Tangible Personal Property. Seller
shall not remove any Tangible Personal Property, except as may be required for
necessary repair or replacement, and any replacement shall be of equal quality
and quantity as existed as of the time of its removal. Seller shall maintain
supplies and inventories consistent with historical practices and quality
management standards.
4.4 Seller's Obligations. Other than the obligations of Seller
expressly assumed by Purchaser pursuant to this Agreement, Seller, subject to
the terms and conditions of this Agreement, covenants that it shall pay and
discharge any and all liabilities of each and every kind arising out of or by
virtue of the conduct of its business before and as of the Closing on or
related to the Property, each to the extent Purchaser would otherwise be
liable to pay such liabilities.
ARTICLE 5: CLOSING
5.1 Closing Date. Subject to fulfillment of the various conditions
described herein, the consummation of the sale and acquisition of the
Property, as contemplated herein (the "Closing"), shall take place on a date
(the "Closing Date") specified in written notice from Purchaser to Seller
which date shall be not more than fifteen (15) days following the expiration
of the Review Period, and if no notice is given, the Closing Date shall be on
the first business day to occur fifteen (15) days following expiration of the
Review Period. The Closing shall take place through an escrow with the Title
Insurer and/or by other arrangements satisfactory to the parties wherein all
required documents and deliveries are deposited or otherwise delivered to the
appropriate parties.
5.2 Seller's Deliveries in Escrow. At the Closing, Seller shall
deliver to Purchaser the following:
(a) Deed. Special Warranty Deed for the Real Property (in the form
attached hereto as Exhibit C-1) executed and acknowledged by the Seller and
any other parties required to effectuate such conveyance, conveying to
Purchaser good and marketable fee simple title to the Real Property, subject
only to the Permitted Exceptions applicable to the Real Property;
(b) Assignment of Leases. Assignment of Leases for the Property,
containing mutual indemnities for pre- and post-closing matters (in the form
attached hereto as Exhibit C-2);
(c) Bill of Sale. Bill of Sale with respect to the Tangible Personal
Property and Intangible Personal Property (in the form attached hereto as
Exhibit C-3);
(d) Assignment of Intangible Personal Property. Assignment of
Intangible Personal Property with respect to the Property (in the form
attached hereto as Exhibit C-4);
(e) FIRPTA. A Foreign Investment in Real Property Tax Act affidavit
executed by Seller. If Seller fails to provide the necessary affidavit and/or
documentation of exemption on the Closing Date, Purchaser may proceed with
withholding provisions as provided by law;
(f) Certificate of Representations and Warranties. A certificate (in
the form attached hereto as Exhibit C-5) signed by Seller reaffirming and
updating to the Closing Date the representations and warranties given by
Seller under Article 7 that will include an updated Rent Roll and Operating
Statement for the preceding month (or the next preceding month if the Closing
Date is between the 1st and 10th day of a month);
(g) Form 1099B. A Form 1099B executed by Seller;
(h) Authority. Evidence of existence, organization and authority of
Seller and the authority of the person executing documents on behalf of
Seller, reasonably satisfactory to Purchaser and (to the extent applicable)
the Title Insurer, including, without limitation, executed, original consents
from those parties whose consent is required to be obtained and evidence that
such consents are the only consents required to be obtained with respect to
this transaction;
(i) Assignments and Assumptions of Contracts. Assignments of any and
all Service Contracts or other agreements (in the form attached hereto as
Exhibit C-6);
(j) Lien Waivers. Seller shall cause the property manager of the
Property, the broker identified in Section 6.8 hereof, as well as any leasing
broker involved with the Property to deliver to Purchaser, in form and
substance reasonably acceptable to Purchaser and the Title Company, a waiver
wherein such parties release any and all mechanic lien rights and claims that
they or any one claiming by, through or under any of them may have pursuant to
any applicable statute or law.
(k) Additional Documents. Any additional documents required by this
Agreement or that Purchaser or the Title Company may reasonably require for
the proper consummation of the applicable transaction as contemplated by this
Agreement, which documents shall be without cost or additional liability to
the Seller.
5.3 Purchaser's Deliveries in Escrow. At the Closing, Purchaser shall
deliver to the Title Company to hold in escrow for delivery upon the Closing
the following:
(a) Purchase Price. The Purchase Price less the Earnest Money, plus
or minus applicable prorations, shall be deposited by Purchaser with the Title
Company in immediately available funds (all or any part of which may be the
proceeds of a loan).
(b) Authority. Evidence of existence, organization and authority of
Purchaser and the authority of the person executing documents on behalf of
Purchaser reasonably satisfactory to Seller and the Title Insurer.
(c) Counterparts. Counterparts of the applicable Assignments or other
Seller deliveries which are also to be signed by Purchaser, duly executed by
Purchaser.
(d) Additional Documents. Any additional documents required by this
Agreement or that Seller or the Title Company may reasonably require for the
proper consummation of the transactions contemplated by this Agreement, which
documents shall be without cost or additional liability to the Purchaser.
5.4 Closing Statements/Transfer Declarations. At the Closing, the
Seller and Purchaser shall execute closing statements and transfer tax
declarations (if applicable per Section 6.3 below) consistent with this
Agreement in form reasonably satisfactory to the parties and, if applicable,
as may be required by the Title Company.
5.5 Title Policy/Updated UCC Searches. At the Closing, the Title
Company shall deliver to Purchaser: (i) a Texas Form T-1 Owner's Policy of
Title Insurance (the "Title Policy") issued by the Title Insurer dated as of
the Closing in the amount of the Purchase Price, insuring Purchaser as owner
of good and indefeasible fee simple title to the Real Property, subject only
to the standard printed execptions (provided that the exception for
restrictive covenants shall be deleted or list only restrictive covenants as
may be Permitted Exceptions, the "areas and boundaries" exception shall, at
Purchaser's cost, be amended to except only to shortages in area, taxes,
assessments, standby fees and the like shall be limited to those due for 1995
and subsequent years, and subsequent assessments for prior years based on
change of usage of ownership, all to the extent not due and payable and any
exception for parties in possession shall be limited to the rights of tenants,
as tenants only, pursuant to unrecorded leases) and the Permitted Exceptions ;
and (ii) updated UCC Searches dated within five (5) days of Closing disclosing
no security interests or liens affecting the Property being conveyed other
than those to be released at the Closing. The Title Policy may be delivered
within a reasonable time after the applicable Closing if that is the custom
for the locality, provided, that the Title Insurer at the Closing issues a
currently effective, duly executed "marked-up" Title Commitment for the Real
Property and irrevocably commits in writing to issue the Title Policy in the
form of the "marked-up" Title Commitment within no more than ten (10) days
after the Closing Date.
5.6 Possession. At the Closing, Seller shall deliver to Purchaser
possession of the Property, subject only to the applicable Permitted
Exceptions.
5.7 Termination of Property Management and Other Service Contracts.
The Seller shall terminate effective as of the Closing Date any existing
property management agreements and any other terminable Service Contracts
applicable to the Property being conveyed at such Closing and designated by
Purchaser at least five (5) days prior to Closing. In addition, if Purchaser
requests upon expiration of the Review Period, Seller shall also terminate any
existing Leases (whether written, oral or otherwise) on the applicable
Property between Seller and any employee of the existing property management
firm under which rent is waived or is discounted, such termination to be
effective no later than thirty (30) days from the Closing Date. Seller shall
pay to Purchaser at Closing an amount equal to the difference between (a) the
actual rent payable under such leases and (b) the full rental that would have
been payable absent any waived or discounted rent, for the period of time from
the Closing Date through the effective date of termination. The rent
proration provided for in Section 6.1(b) shall be based on the actual rental
received by Seller.
5.8 Memorandum/Name of Representative. At the Closing, the Seller
shall deliver to Purchaser written memoranda containing all information
regarding the location and operation of all water, gas and other utility
meters, water sprinkler lines, valves and systems, air conditioning and
heating equipment, thermostats, fuse boxes and the like for the Property
included in the Closing, and the name of a representative of Seller who will
provide Purchaser with further information regarding the operation Property
after the Closing, such as the location of water, gas and other utility
meters, water sprinkler lines and valves, thermostats, fuse boxes and the
like.
5.9 Delivery of Books and Records. Immediately after the Closing,
Seller shall leave at the Property, or, if such items are not currently at the
Property, shall deliver to the offices of Purchaser or such other location as
Purchaser may designate, the original Leases and Service Contracts; the
Property's operating records including copies or originals of all books and
records of account, contracts, leasing correspondence, receipts for deposits,
unpaid bills and other similar papers or documents which pertain to the
Property; all available operating manuals, equipment warranties, and the like;
all advertising materials, booklets, and other similar items, if any, used in
the promotion of the Property; all keys and combinations to locks; and all
available architectural or construction plans, specifications and working
drawings for Improvements. The Seller's obligations under this Paragraph
shall survive the Closing.
5.10 Notice to Tenants and Vendors. Immediately after the Closing, the
Seller and Purchaser shall deliver to each vendor under the Service Contracts
a notice regarding the sale of the Property in form and substance reasonably
satisfactory to Purchaser and Seller. Immediately after the Closing, the
Seller and Purchaser shall deliver to each tenant under each Lease a notice
regarding the sale of the Property, such notice to be in the form of Exhibit
C-7 attached hereto.
5.11 Close of Escrow. Upon satisfaction or completion of the foregoing
conditions and deliveries and performance by each party of its other
obligations required to be performed prior to and/or at the applicable
Closing, the parties shall direct the Title Company to immediately record the
deed and deliver if not already delivered the applicable documents described
above to the appropriate parties and make the disbursements according to the
closing statements executed by the Seller and Purchaser and to otherwise
perform in accordance with the parties' respective closing instruction
letters, to the extent not inconsistent with the terms of this Agreement.
5.12 Conditions Precedent.
(a) Conditions to Purchaser's Obligation to Close. Notwithstanding
anything to the contrary herein Purchaser's obligation to consummate its
purchase of the Property shall be further contingent upon:
(i) Seller's representations and warranties contained herein
shall be true and correct in all material respects as of the Closing.
(ii) The timely satisfaction or written waiver by Purchaser of
each obligation to be performed hereunder by Seller prior to and/or at
the Closing.
(iii) The Title Insurer's willingness to issue the Title Policy.
(iv) The absence of any material litigation or other proceedings
with respect to the Property or otherwise affecting this transaction,
except for any such litigation which Purchaser has, in a written notice
delivered to Seller on or before the Closing Date, expressly approved
after full disclosure by Seller with respect to such proceedings.
(v) The absence of any other material adverse change in the
physical condition, tenancy, operations or financial condition of the
Property or Seller.
(b) Conditions to Seller's Obligation to Close. Notwithstanding
anything to the contrary herein, Seller' obligation at the Closing hereunder
to consummate its sale of the Property to Purchaser shall be further
contingent upon:
(i) Purchaser's representations and warranties contained herein
shall be true and correct in all material respects as of the Closing.
(ii) The timely satisfaction or written waiver by Seller of each
obligation to be performed hereunder by Purchaser prior to and/or at the
Closing.
ARTICLE 6:
PRORATIONS/OTHER ALLOCATIONS AND DELIVERIES/EXPENSES
6.1 Prorations. The items in subparagraphs (a) through (d) of this
Section 6.1 and other items of Property income and expenses customarily
prorated in similar transactions shall be apportioned or prorated between the
Seller and Purchaser as of the close of the day preceding the Closing Date in
the manner set forth herein, or, if not provided for herein, then as customary
for such items for transactions in the metropolitan Austin, Texas area. The
parties shall endeavor to compute or estimate all closing adjustments prior to
the Closing Date, and the Seller shall supply before such Closing satisfactory
supporting evidence for all such adjustments as Purchaser reasonably requests.
Proration items shall include:
(a) Taxes and Assessments. General real estate taxes and assessments
imposed by governmental authority ("Taxes") and any assessments by private
covenant constituting a lien or charge on the Property for the then-current
calendar year or other current tax period not yet due and payable. If the
Closing for the Property occurs prior to the receipt by the Seller of the tax
bill for such Property for the calendar year or other applicable tax period in
which the Closing occurs, Taxes for such calendar year or other applicable tax
period shall be prorated based upon 100% of the estimated Taxes calculated
based upon the most recent ascertainable assessed values and tax rates, but
not less than 100% of the tax bill for the previous calendar year or other
applicable tax period. All prorations shall be based upon a fraction
determined by dividing the number of days elapsed through the date of the
applicable Closing by 365. Taxes for the Property shall be re-prorated on the
same fractional basis at the time that the actual amount of the Taxes for the
Property for the year or other applicable tax period in question are finally
determined. Payments in connection with any re-proration of Taxes shall be
due within 10 days of written notice.
(b) Collected Rent. All collected rent and other income (and any
applicable state or local tax on rent) under Leases in effect with respect to
the Property. Seller shall be charged with any rentals collected by Seller
before the Closing, but applicable to any period of time after such Closing.
Uncollected rent and other income shall not be prorated. If Purchaser
collects up to "two month delinquencies" after the Closing, Purchaser shall
apply such rent to the obligations owing Purchaser for its period of ownership
and to its third party costs of collection, remitting the balance, if any, to
the Seller. "Two month delinquencies" are delinquencies under Leases that are
delinquent by only the monthly installments that were due on the two due dates
preceding the Closing Date. Other than two month delinquencies, as provided
above, no other rent delinquent as of the Closing but collected after the
Closing shall be remitted to Seller. Purchaser shall bill and attempt to
collect such delinquent rent in the ordinary course of business, but shall not
be obligated to engage a collection agency or take legal action to collect any
delinquencies. Once the Closing has occurred, Seller shall not have any right
to seek by legal action or otherwise collection of any rents delinquent for
the Property for any period prior to the Closing, unless the tenant has
vacated the premises under the Lease before the Closing and the Lease is not
assigned to Purchaser. Any rent collected by Seller relating to periods from
and after the Closing shall by promptly paid over to Purchaser by Seller.
(c) Utilities. Utilities, including water, sewer, electric, and gas,
based upon the last reading of meters at the Property prior to the Closing.
Seller and Purchaser shall endeavor to obtain meter readings and account
changeovers for the Property on the day before the Closing Date, and if such
readings and account changeovers are obtained, there shall be no proration of
such items. In such event, Seller shall pay the bills therefor for the period
to and including such Closing, and Purchaser shall pay the bills therefor for
the period subsequent thereto. If the utility company will not read meters
and issue separate bills, Purchaser will receive a credit against the Purchase
Price for Seller's portion of utility charges based on historical utility
charges for such month adjusted for current rates per Section 6.1(f). In such
event Purchaser will pay the entire bill prior to delinquency after the
subject Closing, but such amounts will be reprorated per Section 6.1(f). If
Seller has paid any utilities no more than 30 days in advance in the ordinary
course of business, then Purchaser shall be charged its portion of such
payment at the Closing. In the event Seller allows deposits to remain with
the utility companies for the benefit of Purchaser, Seller shall receive a
credit at Closing in the aggregate amount of such deposits.
(d) Fees and Charges under Service Contracts. Fees and charges under
such of the Service Contracts as are being assigned to and assumed by
Purchaser at the Closing shall be apportioned on the basis of the periods to
which such Service Contracts relate. Seller shall pay all locator or finders
fees with respect to tenants who have moved in prior to Closing. Purchaser
shall pay, or reimburse to Seller, all such fees with respect to tenants
moving in after Closing, but only to the extent that any such fees are due
under Service Contracts delivered or made available to Purchaser during the
Review Period and are executed in accordance with Section 4.1 (c).
(e) Final Adjustment After Closing. In the event that final bills
cannot be issued for any charge prior to the Closing, then Purchaser and
Seller agree to allocate such items on a fair and equitable basis as soon as
such bills are available, final adjustment to be made as soon as reasonably
possible after the Closing. Payments in connection with the final adjustment
shall be due within 10 days of written notice. The parties' obligations to
re-prorate the items prorated at Closing shall survive the Closing of the
transactions contemplated hereby.
6.2 Tenant Deposits. All tenant security deposits (and interest
thereon if required by law or contract to be earned thereon) with respect to
the Property that have not been previously applied in accordance with the
terms of the leases shall, at Purchaser's election, be transferred or credited
to Purchaser at the Closing. In accordance with the terms of Article 11
hereof, Seller shall indemnify and hold Purchaser harmless from and against
any loss, cost, liability or expense incurred by Purchaser by reason of any
security deposit paid by any tenant under any Lease (and interest thereon, if
required by law or contract to be earned thereon) collected by Seller and not
transferred or credited to Purchaser at the Closing. In accordance with terms
of Article 11 hereof, Purchaser shall indemnify and hold Seller harmless
against any liability or expense incurred by Seller by reason of any tenant
security deposit (and interest) to the extent transferred or credited to
Purchaser at Closing.
6.3 Sales, Transfer, and Documentary Taxes. All sales, gross
receipts, or compensating taxes, documentary taxes, transfer taxes, and
similar taxes and fees imposed upon the transfer of the Property under
applicable state, county, city or other local law shall be paid by the Seller
at Closing. The parties will execute and deliver any required transfer or
other similar tax declarations at the Closing.
6.4 Utility Deposits. The amount of deposits, if any, with utility
companies that are transferable and that are assigned by Seller to Purchaser
at Closing shall be credited to Seller.
6.5 Permit Transfer Fees. Customary fees paid or payable with respect
to permits and licenses assigned by Seller to Purchaser at the Closing, with
the consent or approval (if required) of the issuer thereof, shall be charged
to Seller.
6.6 Wages. The Seller shall pay the wages, employment taxes and
fringe benefits applicable thereto payable to employees, if any, of Seller as
of their discharge on the Closing Date.
6.7 Intentionally Deleted.
6.8 Commissions. Seller and Purchaser represent and warrant to one
another that they have not dealt with any real estate broker, sales person or
finder other than Davidson Conine in connection with this transaction. In
accordance with Article 11 hereof, Seller agrees to pay any and all amounts
due to Davidson Conine and indemnify, defend and hold harmless Purchaser and
its affiliates from and against any loss, cost, liability or expense suffered
or incurred by any such party as a result of a claim or claims for brokerage
commissions, finder's fees or other similar fees from Davidson Conine or any
other party or firm that is based on the act or omission of Seller in breach
of the above warranty. Purchaser agrees to indemnify, defend and hold
harmless Seller from and against any loss, cost, liability or expenses
suffered or incurred by any such party as a result of a claim or claims for
brokerage commissions, finder's fees or other similar fees from any party or
firm that is based on the act or omission of Purchaser in breach of the above
warranty.
6.9 Transaction Expenses. Upon the Closing of this transaction, the
parties will share expenses incurred at or in connection with the Closing (the
"Closing Costs") as follows: Seller will pay for the charges and premiums for
the Title Commitment, Title Policy, UCC Searches, Surveys, recording fees, any
transfer taxes, and one-half of any escrow fees; provided, however, that
Seller's costs with respect to the Title Policy shall not include any
amendment to the "areas and boundaries" exception, which shall be paid by
Purchaser. Purchaser will pay for all lender's title insurance premiums and
endorsements and all other matters relating to Purchaser's financing
(including recording fees for security documents), and one-half of any escrow
fees. Each party will pay its own attorneys' fees in connection with this
transaction. Otherwise, Closing Costs will be borne as is customary for like
transactions in the metropolitan Austin, Texas area.
ARTICLE 7: REPRESENTATIONS AND WARRANTIES
7.1 Seller's Representations and Warranties. As a material inducement
to Purchaser to execute this Agreement and consummate the transactions
contemplated hereunder, Seller represents and warrants to Purchaser that:
(a) Organization and Authority. Seller has been duly organized and is
validly existing and in good standing under the laws of its jurisdiction of
organization and, if different, is qualified to do business and in good
standing in the state in which the Property is located. Seller has the full
right and authority and has obtained any and all consents required therefor to
enter into and perform this Agreement. The persons signing this Agreement on
behalf of Seller are authorized to do so. This Agreement and all of the
documents to be delivered by Seller at the Closing have or will have been duly
authorized and properly executed and do and will constitute the valid and
binding obligations of Seller.
(b) Conflicts. The execution of and performance under this Agreement
does not and will not conflict with the terms of any of Seller's constituent
documents. There is no agreement to which Seller is a party or, to Seller's
knowledge, which is binding on Seller which is in conflict with the execution
of or performance under this Agreement or with the obligations imposed upon or
rights granted to Seller hereunder.
(c) Contractors and Suppliers. All contractors, subcontractors,
suppliers, architects, engineers and others who have performed services or
labor or supplied material in connection with Seller's ownership or management
of the Property have been paid in full and all liens arising therefrom (or
claims which with the passage of time or notice or both could mature into
liens) have been satisfied and released, except for bills or work not more
than thirty (30) days old incurred for routine maintenance in the ordinary
course of business for which a proration adjustment will be made.
(d) Pending Actions. There is no litigation, action or proceeding
pending or, to Seller's knowledge, threatened (with respect to material items)
against or pertaining to the Property or any incident thereon, or which
challenges or impairs Seller's ability to execute, deliver or perform under
this Agreement except as set forth on Exhibit D.
(e) Rent Roll. Except as described in the Rent Rolls for the Real
Property, there are no Leases otherwise affecting the Real Property, and no
person, other than tenants under the Leases and subject to the Permitted
Exceptions, has any right of possession of all or any portion of the Real
Property. Except as otherwise specifically and expressly set forth in the
Rent Roll for the Real Property: no presently outstanding rent concessions
have been given to any tenants; no rent has been paid in advance by any
tenants respecting a period subsequent to the Closing (except for the month in
which the Closing occurs); no tenants have any claim against Seller for any
security deposit or other deposits or interest thereon, other than pursuant to
the terms of its Lease with respect to sums specified as security deposits in
the Rent Roll for such Property; no tenants have any options or rights of
first refusal to purchase or to extend or renew their Leases or rent
additional space; and, other than with respect to locator or finders fees due
under Service Contracts delivered or made available to Purchaser during the
Review Period, and payments under which are governed by Section 6.1(d) above,
there are no leasing or other commissions due, nor will any become due, in
connection with any Lease, any renewal or extension of any Lease for which
Seller is not responsible. To Seller's knowledge, no tenants have asserted
nor are there any defenses or offsets to rent accruing after the Closing with
respect to any Lease of the Property. To Seller's knowledge, except as
specifically set forth in the Rent Roll for the Property, no default or breach
exists on the part of any tenant. Seller has not received any notice of any
material default or material breach on the part of the landlord under any
Lease, nor, to the best of Seller's knowledge, does there exist any such
material default or material breach on the part of the landlord. No
understanding or agreement with any party exists as to payment of any leasing
commissions or fees regarding future leases or as to procuring of tenants for
the Property.
(f) Service Contracts. There are no management, service, supply,
equipment, rental or similar agreements affecting the Property, other than the
Service Contracts. The list and copies of Service Contracts provided to
Purchaser are true, correct and complete. No portion of the Property is
leased by Seller as tenant except as set forth on Exhibit E. Neither Seller
nor, to Seller's knowledge, any other party is in default with respect to any
of its material obligations or liabilities pertaining to the Service
Contracts.
(g) Operating Statements. The Operating Statements for the Property
show all items of income and expense (operating and capital) incurred in
connection with the Seller's ownership, operation and management of the
Property for the periods indicated and are true, correct and complete in all
material respects.
(h) Notice of Violations. Seller has not received any written notice
and Seller has no knowledge that the Property or the use thereof violates or
is a non-conforming use with respect to any Codes in any material respect that
have not been resolved to the satisfaction of the issuer of the notice. With
respect to this Section 7.1(h), Purchaser acknowledges that the Property's
compliance or non-compliance with the Americans With Disabilities Act (the
"ADA") is excluded from Seller's knowledge representation set forth in this
Section.
(i) Codes and Restrictions. Except for ADA compliance, to Seller's
knowledge, the Property and its current use and operation comply with all
Codes currently applicable or scheduled to become applicable to the Property,
and with all restrictions, covenants or similar agreements affecting the
Property. Except for items included in the Permitted Exceptions, Seller has
not entered into or has no knowledge of any agreement with any governmental
official, agency or body or with any other person or entity with respect to
any modification, variance or exception regarding such Codes, or any
restrictions, covenants or agreements applicable to the Property.
(j) Utilities. To Seller's knowledge, all water, sewer, gas,
electric, telephone, drainage facilities and all other utilities required for
the operation of the Property as an apartment complex (collectively "offsite
utilities") are installed to the boundaries of the Property, are connected
with valid permits and fully paid tap-in or recapture fees, to Seller's
knowledge are in proper working order, and to Seller's knowledge are adequate
to serve the Property as presently constituted. To Seller's knowledge, all
licenses, permits, easements and rights-of-way required from all governmental
authorities having jurisdiction over the Property or from private parties to
make use of the offsite utilities in connection with the operation of the
Property are in existence and in full force and effect.
(k) Real Estate Taxes and Assessments. To Seller's knowledge and
except as disclosed in the Operating Statements there are not presently
pending any material assessments, or material governmental or quasi-
governmental (i.e., a body or entity deriving its authority from legislative
or governmental enactments) fees or charges of any nature with respect to the
Property or any part thereof, nor has Seller received any notice of any such
assessments, fees or charges which would be applicable to the Property being
contemplated.
(l) Fair Housing Act. There are no pending or, to Seller's knowledge,
threatened actions in connection with the Fair Housing Act (42 U.S.C. Section
3601 et seq., as amended) against Seller or its property management company
with respect to the Property.
(m) Hazardous Materials. To the best of Seller's knowledge, without
independent investigation, (1) there are no underground storage tanks
currently located on the Property and (2) no prior owner of the Property or
any other party has used the Property or placed under, on, or above the
Property, any Hazardous Materials other than those customarily used in the
management and operation of residential apartment complexes and that have not
been used, stored or disposed of in violation of any Environmental Laws.
Seller has not placed (or, to Seller's knowledge, caused or permitted to be
placed) any Hazardous Materials under, on, or above the Property other than
those customarily used in the management and operation of residential
apartment complexes and that have not been used, stored or disposed of in
violation of any Environmental Laws. Seller has no knowledge of any claimed
or actual noncompliance or violation of Environmental Laws related to the
Property, except in each case as disclosed in the environmental reports listed
on Exhibit F which have been delivered to Purchaser within the Review Period
provided for in Section 2.1. The term "Environmental Laws" shall include,
without limitation, the Clean Air Act, 42 U.S.C. Section 7401 et. seq.; the
Clean Water Act, 33 U.S.C. Section 1251 et. seq., and the Water Quality Act of
1987; the Federal Insecticide, Fungicide, and Rodenticide Act ("FIFRA"), 7
U.S.C. Section 136 et. seq.; the Marine Protection, Research, and Sanctuaries
Act, 33 U.S.C. Section 1401 et. seq.; the National Environmental Policy Act, 42
U.S.C, Section 4321 et. seq.; the Noise Control Act, 42 U.S.C. Section 4901 et.
seq.; the Occupational Safety and Health Act, 29 U.S.C. Section 651 et. seq.;
the Resource Conservation and Recovery Act ("RCRA") 42 U.S.C. Section 6901 et.
seq., as amended by the Hazardous and Solid Waste Amendments of 1984; the Safe
Drinking Water Act, 42 U.S.C. Section 300f et. seq.; the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.
Section 9601 et. seq., as amended by the Superfund Amendments and
Reauthorization Act, and the Emergency Planning and Community Right-to-Know
Act; the Toxic Substance Control Act ("TSCA"), 15 U.S.C. Section 2601 et. seq.;
and the Atomic Energy Act, 42 U.S.C. Section 2011 et. seq.,
and any and all other applicable federal, state or local statutes, laws,
ordinances, codes, rules, regulations, orders or decrees regulating, relating
to, or imposing liability or standards of conduct concerning, any hazardous,
toxic or dangerous waste, substance or material; all as amended from time to
time, together with their implementing regulations and guidelines. The term
"Hazardous Materials" shall include, without limitation, any hazardous
substance, pollutant, or contaminant regulated under CERCLA or any other
Environmental Laws; oil and petroleum products and natural gas, natural gas
liquids, liquefied natural gas, and synthetic gas usable for fuel; pesticides
regulated under FIFRA; asbestos, asbestos containing materials,
polychlorinated biphenyls, and other substances regulated under TSCA; source
material, special nuclear material, and by-product materials regulated under
the Atomic Energy Act; and industrial process and pollution control wastes to
the extent regulated under applicable Environmental Laws.
(n) No Defects in Work. To Seller's knowledge, there are no: (i)
material design, materials or workmanship defects in the Work (as defined
below) with respect to the Property and associated Improvements, (ii) material
deviation in the Work and the Improvements from the plans and specifications
delivered to Purchaser pursuant to Section 2.1 and (iii) material non-
compliance with all applicable Codes, in each case that would affect
Purchaser's ability to operate the Property in the same manner as Seller has
operated the Property. The term "Work" means the labor and materials used in
the construction of the Improvements and includes all labor, materials,
equipment and services of whatever nature required in connection therewith.
Except as otherwise disclosed by Seller to Purchaser in writing within the
applicable Review Period provided in Section 2.1, all apartment units with
respect to the Property are in rentable condition, suitable for occupancy.
(o) Withholding Obligation. The sale of the Property is not subject
to any Federal, state or local withholding obligation of Purchaser under the
tax laws applicable to Seller or any of the Property.
(p) Condemnation. No condemnation or other governmental taking
proceedings and no rezoning proceedings relating to the Property are pending
or, to Seller's knowledge, threatened.
(q) Insurer Notices. Seller has not received any notice from any
insurance company or board of fire underwriters of any defects or inadequacies
respecting the Property which would adversely affect the insurability of the
Property or cause an increase in the premiums for the Property which have not
been cured or repaired to the satisfaction of the party issuing the notice.
(r) Deliveries. To the extent prepared by Seller, its property
manager or investment advisor, all Operating Statements, Rent Rolls, Service
Contracts, Leases, books, records, schedules, exhibits, and other items
delivered or made available to Purchaser pursuant to the terms of this
Agreement are true, accurate and complete in all material respects. The
information to be furnished by Seller on which the computation of closing
prorations, adjustments and payments will be based shall, to the extent then
available, be true, correct and complete in all material respects.
(s) Condition. To the best of Seller's knowledge, except as disclosed
on Exhibit G, (i) all building systems and mechanical equipment, including,
without limitation, the plumbing, air conditioning, heating, ventilation, hot
water heaters and electrical systems, and all appliances (including, without
limitation, substantially all stoves, refrigerators, and dishwashers
associated with individual apartment units) are in serviceable and safe
operating condition, and (ii) the Improvements including the roofs and
foundations thereof are in sound structural condition, with no material leaks
or other material defects.
(t) Financial Statements. All financial statements delivered by or on
behalf of Seller to Purchaser present fairly, in all material respects, the
results of operations for the relevant periods then ended. At Purchaser's
request, Seller agrees to make available to Purchaser or Purchaser's
designated representative (at Purchaser's cost) all financial books and
records for the Property for the period from January 1, 1991 through December
31, 1994.
(u) IRPTA Inapplicability. The Property does not contain any
"facilities" which are subject to reporting under Section 312 of the Federal
Emergency Planning and Community Right-To-Know Act of 1986 and federal
regulations promulgated thereunder nor does the Property contain underground
storage tanks which require notification under Section 9002 of the Solid Waste
Solid Disposal Act, as now or hereafter amended (42 U.S.C. 6991).
(v) ERISA. Based on Purchaser's representation set forth in Section
7.2(c) hereof, none of the transactions contemplated in this Agreement
constitute a non-exempt prohibited transaction under Section 406(a) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") or
Section 4975 of the United States Internal Revenue Code of 1986, as amended
(the "Code").
(w) Assignment of Leases. Seller is the absolute owner of all of the
landlord's right, title and interest in and to the Leases and that such right,
title and interest is free of any lien or charge and is not subject to any
assignment, transfer, or hypothecation.
(x) Bill of Sale. Seller is the absolute owner of the property
conveyed pursuant to the Bill of Sale executed pursuant to Section 5.2(c)
hereof, that Seller has not sold, assigned, transferred or set over such
property to any other person or entity, that such property is free and clear
of all liens, charges and encumbrances, that Seller has full right, power and
authority to sell such property and to make and execute such Bill of Sale, and
that there are no taxes or other charges currently due and owing which could
give rise to a lien or charge on such property.
(y) Assignment of Intangible Property. Seller has not assigned,
transferred or hypothecated its interest in the property conveyed pursuant to
the assignment of intangible personal property delivered pursuant to Section
5.2(d) hereof, to any other person or entity, which assignment or
hypothecation shall not have been released as of the Closing Date.
(z) Assignment of Service Contracts. Seller is the absolute owner of
the respective right, title and interest in and to the Service Contracts
conveyed pursuant to the Assignment of Service Contracts delivered pursuant to
Section 5.2(i) hereof and that such right, title and interest is free of any
lien or charge (other than those charges being prorated pursuant to this
Agreement) and is not subject to any assignment, transfer or hypothecation.
As used herein, the phrase to "the best of Seller's knowledge" or to "Seller's
knowledge" or any derivation thereof, shall mean the actual knowledge, without
any independent investigation or inquiry, of any one of John Allen, Cindy
Martinez or Frederika Tschoepe.
7.2 Purchaser's Representations and Warranties. As a material
inducement to Seller to execute this Agreement and consummate this
transaction, Purchaser represents and warrants to Seller that:
(a) Organization and Authority. Purchaser has been duly organized and
is validly existing as a Delaware limited liability company, in good standing
in the State of Delaware. Purchaser at Closing will be duly organized and
validly existing and in good standing in its state of organization and in all
jurisdictions where its operations or properties so require. Purchaser shall
have the full right and authority and shall have obtained any and all consents
required to enter into and perform this Agreement. The persons signing this
Agreement on behalf of Purchaser are authorized to do so. All of the
documents to be delivered by Purchaser at the Closing will have been duly
authorized and properly executed and will constitute the valid and binding
obligations of Purchaser.
(b) Conflicts. The execution of and performance under this Agreement
does not and in the case of Purchaser will not conflict with the applicable
organizational documents of Purchaser. There is and at Closing will be no
agreement to which Purchaser is a party or, to Purchaser's knowledge, binding
on Purchaser which is and at Closing will be in conflict with the execution of
or performance under this Agreement.
pursuant to Section 10.1 hereof be, an entity deemed to hold "plan assets"
within the meaning of 29 C.F.R. Section 2510.3-101 of any employee benefit
plan subject to Title I of ERISA or Section 4975 of the Code nor are they
fiduciaries to the beneficiaries of the shareholder of Seller which
beneficiaries are identified on Exhibit I.
7.3 Survival of Representation, Warranties and Covenants. The
continued validity in all material respects of the foregoing representations
and warranties shall be a condition precedent to the obligation of the
party(ies) to whom the representation and warranty is given to close the
transactions set forth herein. In the event at any time prior to the Closing,
Seller learns or has reason to believe that any of Seller's representations
and warranties is no longer true or correct, Seller shall immediately notify
Purchaser in writing and therein shall specify the factors rendering or likely
to render such representations or warranties untrue or incorrect.
If Purchaser has actual knowledge (by Seller's notice set forth above in
this Section 7.3 or otherwise) that any of Seller's representations and
warranties shall not be true and correct in all material respects at any time
on or before the Closing Date (whether or not true and correct as of the date
of this Agreement or whether any change in facts or circumstances has made the
applicable representation and warranty no longer true and correct, and
regardless as to whether the applicable representation or warranty is
qualified to Seller's knowledge or otherwise), then Purchaser may, at
Purchaser's option exercised by written notice to Seller delivered on or
before the Closing Date, and as its sole and exclusive remedies, either
(i) proceed with this transaction, thereby accepting and waiving the
applicable representation and warranty as being modified by Seller's
notification, if any, or Purchaser's actual knowledge; or (ii) terminate this
Agreement and declare this Agreement of no further force and effect, and in
which event the Earnest Money then held by the Title Insurer shall promptly be
returned to Purchaser. Purchaser may exercise such rights for breach of
representations and warranties whether or not Seller has notified Purchaser as
provided above. For purposes of this Section 7.3, Purchaser's "actual
knowledge" shall be deemed to include that knowledge actually known to
Purchaser, its employees, agents and contractors as well as any facts
contained in the documents concerning the Property that Seller either
delivered to Purchaser or made available to Purchaser.
All representations and warranties set forth above shall be continuing
and deemed remade as of the Closing Date and shall survive the Closing,
subject to Section 10.5.
ARTICLE 8: DAMAGE OR DESTRUCTION/CONDEMNATION
8.1 Damage or Destruction. The risk of loss of or damage to the
Property by reason of any insured or uninsured casualty during the period up
to and including the Closing Date shall be borne by Seller. In the event of
any material damage to or destruction of the Property, Purchaser may, at its
option, by notice to Seller given within 10 days after Purchaser is notified
of such damage or destruction (and at Purchaser's option the Closing for the
Property shall be extended, if necessary, to give Purchaser such 10-day period
to respond to such notice) elect (i) not to purchase the Property and (ii) to
proceed under this Agreement. In the event Purchaser is proceeding under
clause (ii), Purchaser shall receive all insurance proceeds for any damage to
the Property which are due the Seller as a result of such damage or
destruction. In such event, Purchaser shall receive a credit at the Closing
for any deductible under said insurance policies, up to the cost of repairing
such damage or destruction.
If the Property is not materially damaged, then Purchaser shall not have
the right to terminate this Agreement as a result of such damage but Seller
shall at its cost repair the damage before the Closing in a manner reasonably
satisfactory to Purchaser, or if repairs cannot be completed before the
applicable Closing, credit Purchaser at such Closing, for the reasonable cost
to complete the repair.
For purposes of this Article 8 only "Material damage" and "Materially
damaged" mean damage reasonably exceeding $100,000 to repair.
8.2 Condemnation. In the event of any threatened, contemplated,
commenced or consummated proceedings in eminent domain or other governmental
taking (notice of which shall be given to Purchaser by Seller immediately) (a
"condemnation proceeding") respecting the Property, Purchaser may, at its
option, by notice to Seller given within 10 days after Purchaser is notified
of such actual or possible proceedings (and at Purchaser's option the Closing
shall be extended, if necessary, to give Purchaser such 10 day period to
respond to such notice) Purchaser may (i) elect not to purchase the Property
or (ii) to proceed under this Agreement without reduction in Purchase Price.
In the event Purchaser is proceeding under clause (ii) Seller shall at the
Closing assign to Purchaser its entire right, title and interest in and to any
condemnation award for the Property and Purchaser shall have the sole right
during the pendency of this Agreement and after the Closing for the Property
to negotiate and otherwise deal with the condemning authorities in respect of
such matters.
ARTICLE 9: REMEDIES
not close by reason of a default by Purchaser in any of the terms hereof (as
opposed to by reason of failure of any contingency to Purchaser's obligations
hereunder), then Seller may, as its sole and exclusive remedy receive all
Earnest Money deposited to the date of such default, and pursue against
Purchaser any and all rights and remedies available at law or equity to obtain
from Purchaser copies of all items to be delivered pursuant to Section 2.1(e)
above. The parties acknowledge that Seller's actual damages in the event of a
default by Purchaser under this Agreement will be difficult to ascertain, and
that Seller's receipt of the Earnest Money as liquidated damages represent the
parties' best estimate of such damages.
9.2 Seller's Default. If the transaction contemplated hereby does not
close by reason of a default by Seller in any of the terms hereof (as opposed
to by reason of failure of a contingency to any of Seller's obligations
hereunder), then Purchaser may, as its exclusive remedies: (a) pursue specific
performance, injunctive or other similar relief to enforce this Agreement, or
(b) rescind this Agreement and receive a refund of all Earnest Money deposited
to date (including all interest thereon) and in conjunction therewith pursue
against Seller any and all rights and remedies available at law or equity to
obtain from Seller (i) reimbursement for the payment of all costs and expenses
allocable to Seller under Section 6.9 of this Agreement, and (ii) if Seller's
default was due to an intentional, bad faith breach by Seller of its
obligations and covenants under Sections 4.1 (a), (c) and (g), then
reimbursement for all out-of-pocket expenses of Purchaser in connection with
this transaction, up to $35,000 (items (i) and (ii) being agreed liquidated
damages). The parties acknowledge that Purchaser's actual damages in the
event of a default by Seller will be difficult to ascertain, and that such
liquidated damages represent the parties' best estimate of such damages.
ARTICLE 10: MISCELLANEOUS
10.1 Parties Bound. Subject to Purchaser's rights below in this
Section 10.1, no party may assign this Agreement before the Closing without
the prior written consent of the other party hereto, and any such prohibited
assignment shall be void. It is understood that Purchaser may assign its
rights and obligations under this Agreement to an entity (a "Permitted
Assignee") which is owned by Purchaser or is under common ownership with
Purchaser or is an entity which Purchaser manages or controls, or for which
Purchaser is acting as investment manager, or is an entity in which Purchaser
is a general partner, in which case Seller after receiving notice thereof
shall direct all performance and conveyances to such permitted assignee and
title may be taken in the name of a nominee or a partnership in which a
Permitted Assignee is a partner. Subject to the foregoing, this Agreement and
all provisions hereof, including, without limitation, all representations and
warranties made hereunder, shall extend to, be obligatory upon and inure to
the benefit of the respective heirs, devisees, legal representatives,
successors, assigns and beneficiaries of the parties hereto. No assignment
(including an assignment by Purchaser permitted above) shall relieve the
assignor of any obligation under this Agreement whether arising before or
after such assignment. Purchaser and Seller acknowledge that all of
Purchaser's representations and warranties contained in Section 7.2 hereof
shall remain true and correct after such permitted assignment, with the
understanding that the state of organization of the permitted assignee may be
other than Delaware.
10.2 Headings. The article and section headings of this Agreement are
for convenience only and in no way limit or enlarge the scope or meaning of
the language hereof.
10.3 Invalidity. If any portion of this Agreement is held invalid or
inoperative, then so far as is reasonable and possible the remainder of this
Agreement shall be deemed valid and operative, and effect shall be given to
the intent manifested by the portion held invalid or inoperative. The failure
by either party to enforce against the other any term or provision of this
Agreement shall be deemed not to be a waiver of such party's right to enforce
against the other party the same or any other such term or provision.
10.4 Governing Law. This Agreement shall, in all respects, be
governed, construed, applied and enforced in accordance with the law of the
State of Texas.
10.5 Survival. The provisions of this Agreement that contemplate
performance after the Closing shall survive the Closing and shall not be
deemed to be merged into or waived by the instruments of such Closing;
provided, however, that except for the representations and warranties set
forth in Sections 6.8, 7.1(a) and (b) and Sections 7.2(a) and (b), which
representations and warranties shall survive forever, the representations and
warranties of Seller set forth in Section 7.1 and of Purchaser set forth in
Section 7.2 of this Agreement shall survive only for a period of one (1) year
after the Closing Date, and Purchaser shall have the right to bring an action
thereon only if Purchaser has given Seller written notice within such
applicable one (1) year period setting forth the nature and basis of its
claim.
10.6 No Third Party Beneficiary. Subject to Section 10.1 this
Agreement is not intended to give or confer any benefits, rights, privileges,
claims, actions or remedies to any person or entity as a third party
beneficiary, or otherwise.
10.7 Entirety and Amendments. This Agreement embodies the entire
agreement between the parties and supersedes all prior agreements and
understandings relating to the Property including without limitation that
certain letter agreement between Seller and Purchaser dated January 24, 1995.
This Agreement may be amended or supplemented only by an instrument in writing
executed by the party against whom enforcement is sought.
10.8 Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and
all of such counterparts shall constitute one Agreement. To facilitate
execution of this Agreement, the parties may execute and exchange by telephone
facsimile counterparts of the signature pages.
10.9 Further Assurances. In addition to the acts and deeds recited
herein and contemplated to be performed, executed and/or delivered at the
Closing, each party agrees to perform, execute and/or deliver (or cause to be
delivered, executed and/or delivered) to the other party on or after the
Closing, any and all further acts, deeds and assurances as may be reasonably
necessary to consummate the transactions contemplated hereby and/or to further
perfect and deliver to the conveyance, transfer and assignment of the
Property. Such deliveries shall be made at no cost and with no additional
liability to the party requested to deliver such further assurances.
10.10 Time. Time is of the essence in the performance of each and every
term, condition and covenant contained in this Agreement.
10.11 Confidentiality. The parties will maintain the confidentiality of
the terms of this transaction and the contents of this Agreement and other
related documentation; provided that (a) Purchaser may disclose material terms
in discussions with prospective equityholders or lenders, (b) Purchaser may
disclose all matters which are required to be disclosed by applicable law in
any filings with the Securities and Exchange Commission, and (c) either party
may disclose matters to its accountants, attorneys and other consultants with
a need to know who are informed of this confidentiality restriction.
10.12 U.S. Currency Required. All sums of money referred to herein
shall be in currency of the United States of America.
10.13 Attorneys' Fees. Should either party employ attorneys to enforce
any of the provisions hereof, the party losing in any final judgment agrees to
pay to the prevailing party all reasonable costs, charges and expenses,
including attorneys' fees, expended or incurred in connection therewith.
10.14 Use of Pronouns. The use of the neuter singular pronoun to refer
to a party shall be deemed a proper reference, even though such party may be
an individual, partnership or a group of two or more individuals. The
necessary grammatical changes required to make the provisions of this
Agreement apply in the plural sense where there is more than one seller or
purchaser and to either partnerships or individuals (male or female) shall in
all instances be assumed as though in each case fully expressed.
10.15 Notices. All notices required or permitted hereunder shall be in
writing and shall be served on the parties at the following address:
If to Purchaser: c/o The RREEF Funds
875 N. Michigan Avenue
Suite 4114
Chicago, Illinois 60611
Attn: Charles B. Leitner
Phone: (312) 266-9300
Fax: (312) 266-9346
with a copy to: D'Ancona & Pflaum
30 N. LaSalle Street
Suite 2900
Chicago, Illinois 60602
Attention: Joel D. Rubin
Fax: (312) 580-0923
Phone: (312) 580-2000
If to Seller:Lin AM Series 85 Limited Partnership
c/o Amli Realty Co.
125 South Wacker Drive
Suite 3100
Chicago, Illinois 60606
ATTN: Mr. John Allen
Fax: (312) 443-0909
Phone: (312) 443-1477
With a copy to: Smith, Stern & Friedman, P.C.
3102 Oak Lawn, Suite 610
Dallas, Texas 75219
ATTN: Clifford L. Friedman, Esq.
Fax: 214-443-0088
Phone: 214-443-0066
Any such notices shall be either (a) sent by certified mail, return
receipt requested, in which case notice shall be deemed received three
business days after deposit, postage prepaid in the U.S. Mail and deemed given
on such deposit, (b) sent by overnight delivery using a nationally recognized
overnight courier, in which case it shall be deemed received one business day
after deposit with such courier and deemed given upon such deposit, (c) sent
by telefax, in which case notice shall be deemed both given and received upon
confirmed transmission of such notice, or (d) sent by personal delivery, in
which case notice shall be deemed both given and received upon receipt or
refusal of receipt. The above addresses may be changed by written notice to
the other party; provided, however, that no notice of a change of address
shall be effective until actual receipt of such notice. Copies of notices are
for informational purposes only, and a failure to give or receive copies of
any notice shall not be deemed a failure to give notice.
10.16 Construction. The parties acknowledge that the parties and their
counsel have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement
or any exhibits or amendments hereto.
10.17 Calculation of Time Periods. Unless otherwise specified, in
computing any period of time described herein, the day of the act or event
after which the designed period of time begins to run is not to be included
and the last day of the period so computed is to be included, unless (except
as otherwise specified) such last day is a Saturday, Sunday or legal holiday,
in which event the period shall run until the end of the next day which is not
a Saturday, Sunday, or legal holiday. The last day of any period of time
described herein shall be deemed to end at 5 p.m. Dallas, Texas time.
10.18 Information and Audit Cooperation. Intentionally deleted.
10.19 Limitation of Liability. NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED HEREIN OR IN ANY DOCUMENT EXECUTED IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED HEREIN, NO PERSONAL LIABILITY OR PERSONAL DEFICIENCY
JUDGMENT SHALL BE ASSERTED OR ENFORCED AGAINST ANY PARTNERS OR MEMBERS OF
PURCHASER OR, EXCEPT AS SET FORTH BELOW, THE PARTNERS OR MEMBERS OF
PURCHASER'S ASSIGNEE MADE PURSUANT TO SECTION 10.1 HEREOF, AGAINST THE
TRUSTEES, OFFICERS, EMPLOYEES, AGENTS, PARTNERS, SHAREHOLDERS, PRINCIPALS OR
MEMBERS OF SUCH PARTNERS OR MEMBERS, OR AGAINST THE ASSETS OF ANY SUCH
PARTNERS' PARTNERS, SHAREHOLDERS, PRINCIPALS OR MEMBERS FOR PAYMENT OF ANY
AMOUNT DUE IN CONNECTION THEREWITH OR FOR OBSERVANCE OR PERFORMANCE OF ANY OF
THE OBLIGATIONS OF PURCHASER OR PURCHASER'S ASSIGNEE. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, ANY NEGATIVE CAPITAL ACCOUNT OF ANY PARTNER OR
MEMBER IN PURCHASER OR PURCHASER'S ASSIGNEE OR THE OBLIGATION OF ANY PARTNER
OR MEMBER IN PURCHASER OR PURCHASER'S ASSIGNEE TO MAKE A CAPITAL CONTRIBUTION
TO PURCHASER OR PURCHASER'S ASSIGNEE SHALL NOT BE DEEMED TO BE AN ASSET OF
PURCHASER OR PURCHASER'S ASSIGNEE. SUBJECT TO THE FOREGOING, ANY LIABILITY OR
CLAIM AGAINST PURCHASER OR PURCHASER'S ASSIGNEE SHALL ONLY BE ENFORCED, (1) IF
PURCHASER DOES NOT ASSIGN ITS RIGHTS UNDER THIS AGREEMENT, OUT OF PURCHASER'S
ASSETS ONLY AND (2) IF PURCHASER DOES ASSIGN ITS RIGHTS UNDER THIS AGREEMENT,
OUT OF PURCHASER'S ASSETS AND PURCHASER'S ASSIGNEE'S ASSETS ONLY INCLUDING THE
ASSETS OF ANY GENERAL PARTNER.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN ANY
DOCUMENT EXECUTED IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREIN, NO
PERSONAL LIABILITY OR PERSONAL DEFICIENCY JUDGMENT SHALL BE ASSERTED OR
ENFORCED AGAINST THE TRUSTEES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,
PARTNERS, SHAREHOLDERS OR PRINCIPALS OF LINCAM PROPERTIES, INC., A DELAWARE
CORPORATION OR LINCAM ASSOCIATES, LTD., AN ILLINOIS LIMITED PARTNERSHIP, THE
SOLE GENERAL PARTNERS OF SELLER, OR AGAINST THE ASSETS OF SUCH TRUSTEES,
OFFICERS, DIRECTORS, PARTNERS OR SHAREHOLDERS FOR PAYMENT OF ANY AMOUNT DUE IN
CONNECTION THEREWITH OR FOR OBSERVANCE OR PERFORMANCE OF ANY OF THE
OBLIGATIONS OF SELLER.
10.20 As Is - Where Is. Except for the specific representations and
warranties set forth in this Agreement, Seller is conveying to, and the
Purchaser is accepting, the Property in its "As Is, Where Is" condition on the
Closing Date.
ARTICLE 11: INDEMNIFICATION
11.1 Seller's Agreements. Seller agrees, in addition to any other
indemnities of such parties set forth in this Agreement, to indemnify, defend
and hold harmless Purchaser and its successors and assigns and the advisers,
affiliates, directors, officers, employees, shareholders, members and partners
of any of them (collectively, the "Purchaser Related Parties", and
individually a "Purchaser Related Party"), from and against any and all
claims, liabilities, damages, and penalties and any and all loss, cost, or
expense (including without limitation, reasonable attorneys' fees and court
costs) incurred by, or any amount due to a Purchaser Related Party incident
to, resulting from, or in any way arising out of any of the following before
or after the Closing Date:
(i) Subject to the applicable time periods set forth in
Section 10.5 hereof, any representation or warranty made by Seller
hereunder is not true and correct in all material respects when
made or is not true and correct in all material respects at the
Closing; and
(ii) Any tort claim or breach of contract claim for money
due and owing in connection with the ownership or operation of the
Property by Seller to the extent such claim arises from incidents
which occurred prior to the Closing Date and are not monetary
obligations specifically identified and credited to (and assumed
by) Purchaser at Closing.
Subject to the applicable time limitations set forth in Section 10.5,
the obligations of Seller set forth in this Section 11.1 shall survive the
Closing of the transactions contemplated hereunder and, as to the obligations
set forth in Sections 6.8 and 6.9, any termination of this Agreement.
11.2 Purchaser's Agreements. Purchaser hereby agrees, in addition to
any other indemnities of Purchaser set forth in this Agreement, to indemnify,
defend and hold harmless Seller and its respective successors, assigns,
affiliates, directors, officers, employees and partners (collectively, the
"Seller Related Parties", and individually a "Seller Related Party") from and
against any and all claims, liabilities, damages, and penalties and any and
all loss, costs, or expense (including without limitation, reasonable
attorneys' fees and court costs) incurred by, or any amount due to a Seller
Related Party incident to, resulting from, or in any way arising out of any of
the following:
(i) Any tort claim or breach of contract claim or other
claim for money due and owing in connection with the ownership or
operation of any of the Property by Purchaser to the extent that
such claim arises from incidents which occurred after the Closing
Date or from monetary obligations arising prior to the Closing but
specifically identified and credited to (and assumed by) Purchaser
at Closing include those arising after Closing; and
(ii) Subject to the time periods set forth in Section 10.5
hereof, any representation or warranty made by Purchaser hereunder
is not true and correct in all material respects when made or is
not true and correct in all material respects at the applicable
Closing.
Subject to the time limitations set forth in Section 10.5 hereof, the
obligations of Purchaser set forth in this Section 11.2 shall survive the
applicable Closings of the transactions contemplated hereunder and, as to the
obligations set forth in Sections 2.1(b), 6.8 and 6.9, any termination of this
Agreement.
11.3 Procedures for Obtaining Indemnification. Any claim for
indemnification under Section 11.1, Section 11.2 or any other applicable
provision of this Agreement shall be made in accordance with the following
provisions:
(i) Definitions. For purposes of this Section 11.3, (a)
the term "Claim" shall mean any claim, litigation, setoff, de-
fense, counterclaim or other legal action taken or asserted by any
person against the Asserting Party, (b) the term "Asserting Party"
shall mean the indemnified party against whom a Claim is asserted
and who seeks indemnification under Section 11.1, Section 11.2 or
any other applicable provision of this Agreement and (c) the term
"Defending Party" shall mean the indemnifying party or parties
from whom indemnification is sought under Section 11.1, Section
11.2 or any other applicable provision of this Agreement.
(ii) Notice of Claim; Assumption of Defense. If a Claim is
made against the Asserting Party which the Asserting Party
believes to be covered by a Defending Party's indemnification
obligations hereunder, the Asserting Party shall promptly notify
the Defending Party of the Claim and, in such notice shall offer
to the Defending Party the opportunity to assume the defense of
the Claim within ten (10) business days after receipt of the
notice (with counsel reasonably acceptable to the Asserting
Party). If the Defending Party timely elects to assume the
defense of the Claim, the Defending Party shall do so on behalf of
both the Asserting Party and the Defending Party, unless both the
Asserting Party and the Defending Party are named in the same
litigation and representation of both of them by the same counsel
would be inappropriate.
(iii) Right to Settle. If the Defending Party timely
elects to assume the defense of the Claim, the Defending Party
shall have the right to settle the Claim on any terms it considers
reasonable as long as the settlement shall not require the Assert-
ing Party to render any performance or pay any consideration with-
out the Asserting Party's prior written consent.
11.4 Right to Assume Defense. If the Defending Party fails timely to
elect to assume the defense of the Claim, or if the Defending Party timely
elects to assume the defense of the Claim but thereafter fails to defend the
Claim with diligence and continuity with counsel reasonably acceptable to the
Asserting Party, then the Asserting Party shall, after five (5) days written
notice to Defending Party, have the right to take over the defense of the
Claim and to settle the Claim on any terms the Asserting Party considers
reasonable. Any such settlement shall be valid as against the Defending
Party.
If the Defending Party assumes the defense of a Claim, the Asserting
Party may employ its own counsel but such employment shall be at the sole
expense of the Asserting Party. If the Defending Party assumes the defense of
a Claim but the same counsel may not appropriately represent both the Assert-
ing Party and the Defending Party, or if the Defending Party fails timely to
assume the defense of the Claim or, after having elected to assume the defense
fails to defend the Claim with diligence and continuity with counsel
reasonably acceptable to the Asserting Party, the Asserting Party may, after
five (5) days written notice to Defending Party, employ its own counsel and
such employment shall be at the sole expense of the Defending Party.
Whether or not the Defending Party elects to assume the defense of a
Claim, the Defending Party shall cooperate with the Asserting Party in the
defense of the Claim.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
PURCHASER
RREEF AMERICA L.L.C., a Delaware limited
liability company
By:________________________________
Name:______________________________
Title:_____________________________
SELLER
LINCAM PROPERTIES LTD. SERIES 85
BY: LINCAM PROPERTIES, INC., a Delaware
corporation, general partner
By:
Name:
Title:
BY: LINCAM ASSOCIATES, LTD., an Illinois
limited partnership, general partner
By:
Name:
Title:
AGREEMENT OF PURCHASE AND SALE
FOR
BARTON CREEK LANDING APARTMENTS
EXHIBITS
A - Legal Description of Real Property
B - Surveyor's Certificate
C - Form Closing Documents
C-1 Form Deed
C-2 Form Assignment of Lease
C-3 Form Bill of Sale
C-4 Form Assignment of Intangible Personal Property
C-5 Form Certificate of Representation and Warranty
C-6 Form Assignment and Assumption of Contract
C-7 Form Tenant Notice Letter
D - Litigation
E - Leased Property
F - Environmental Matters
G - Other Physical Matters
EXHIBIT A
LEGAL DESCRIPTION OF THE REAL PROPERTY
EXHIBIT B
SURVEYOR'S CERTIFICATE
I hereby certify to _________________________________,
________________________________, and ______________________ that on the
________ day of ______________, 1995, this survey was made on the ground per
the field notes and is true, correct, and accurate as to the boundaries and
areas of the subject property and the size, location, and type of buildings
and improvements thereon, and as to the other matters shown thereon, that the
area or quantity of the subject property as set forth in this survey is
accurate to the nearest one ten thousandth (1/10,000) of an acre, and that
this survey correctly shows (a) the location of all easements, rights-of-way,
improvements, signs, fences, drainage ditches, impoundments, pits, railroads,
streams, building setback lines, party walls, and encroachments visible on the
ground, or of record as contained within a title report prepared by
________________________________________ Title Insurance Company, on
______________, 19__, Commitment No. _______________, or of which I have
knowledge or have been advised, whether or not of record, affecting the
subject property and the location of all above-ground evidence of utility
lines serving the subject property and, except as shown, there exist on the
subject property no such above-ground evidence of easements, rights-of-way,
improvements, signs, fences, drainage ditches, impoundments, pits, railroads,
streams, building setback lines, party walls, and encroachments, and (b) the
location of all above-ground evidence of utility lines serving the subject
property, and (c) the location and number of all parking spaces, if any,
including the location and number of all parking spaces designated for
handicap use, and (d) the distance of improvements on the subject property at
ground surface level to the nearest facing exterior property line of the
subject property, and to any applicable setback lines and to other buildings
on the subject property, and (e) all curb cuts and means of ingress to and
egress from the subject property and the measured distance between such curb
cuts, and (f) the width(s) of the street(s) on which the subject property
abuts and the applicable right-of-way lines for said street(s).
Encroachments, as used herein, include encroachments or protrusions onto
the subject property by above-ground improvements on adjacent property,
rights-of-way or easements and encroachments or protrusions onto adjacent
property, rights-of-way, easements or building setbacks by any above-ground
improvements on the subject property and any conflicts or overlaps of the
metes and bounds calls of the subject property and those of adjacent property,
easements, or rights-of-way.
The subject property has restricted ingress and egress to and from
________________________________________________________ and
__________________________________________________ which is paved, public
right-of-way and is maintained by the ________ County Department of
Transportation, _________ County, _________.
No part of the subject property lies within a 100-year flood plain or in
an identified "flood hazard," as defined by the United States Department of
Housing and Urban Development, pursuant to the Flood Disaster Act of 1973, as
amended.
This Survey substantially complies with the current Texas Society of
Professional Surveyors Standards and Specifications for a Category 1A,
Condition II survey and the standards for an ALTA-ASCM Urban survey.
DATED: _______________________
___________________________________
Registered Public Surveyor
Surveyor Number ___________________
EXHIBIT C-1
SPECIAL WARRANTY DEED
THE STATE OF TEXAS }
} KNOW ALL PERSONS BY THESE PRESENTS:
COUNTY OF TRAVIS }
THAT, LINCAM PROPERTIES LTD. SERIES 85, an Illinois limited partnership
(hereinafter referred to as "Grantor"), for and in consideration of the sum of
Ten and No/100 Dollars ($10.00) and other valuable consideration to the
undersigned paid by a
(hereinafter referred to as "Grantee"),
the receipt and sufficiency of which consideration is hereby acknowledged, has
GRANTED, SOLD AND CONVEYED, and by these presents does GRANT, SELL AND CONVEY
unto Grantee, all of the following described property in Travis County, Texas,
to wit:
that certain parcel of real property described on Exhibit "A"
attached hereto and made a part hereof for all purposes, together
with all improvements thereon and all rights and appurtenances
pertaining thereto and all of the easements, rights-of-way,
privileges, liberties, hereditaments, strips and gores, streets,
alleys, passages, ways, waters, water courses, thereto belonging
or appertaining, and all of the estate, right, title, interest,
claims or demands whatsoever of Grantors therein and the streets
and ways adjacent thereto, either in law or in equity; subject,
however, to those matters set forth on Exhibit "B" attached hereto
and made a part hereof.
TO HAVE AND TO HOLD the above described premises, together with all and
singular the rights and appurtenances thereto in anywise belonging unto the
said Grantee, its successors, legal representatives and assigns forever, and
Grantor does hereby bind itself, and its successors and assigns to WARRANT AND
FOREVER DEFEND all and singular the said premises unto the said Grantee, its
successors, legal representatives and assigns, against every person whomsoever
lawfully claiming or to claim the same or any part thereof, by, through or
under Grantor, but not otherwise.
EXECUTED this day of , 1995.
LINCAM PROPERTIES LTD. SERIES 85
BY: LINCAM PROPERTIES, INC., a Delaware
corporation, general partner
By:
Name:
Title:
BY: LINCAM ASSOCIATES, LTD., an Illinois
limited partnership, general partner
By:
Name:
Title:
[ACKNOWLEDGEMENTS]
Mailing Address of Grantee:
_____________________________
_____________________________
_____________________________
EXHIBIT C-2
ASSIGNMENT AND ASSUMPTION OF LEASES
STATE OF _______ }
} KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF _______ }
FOR VALUE RECEIVED, LINCAM PROPERTIES LTD. SERIES 85, an Illinois
limited partnership ("Assignor"), hereby assigns, transfers, sets over and
conveys to _________________________________, a ________ limited partnership
("Assignee"), all of Assignor's right, title and interest in and to the leases
("Leases"), including any and all security deposits made by tenants pursuant
to said Leases, in effect at the real property described on Exhibit A attached
hereto, including without limitation, those described in the rent roll
attached hereto as Exhibit B.
Assignor shall defend, indemnify and hold harmless Assignee from any
liability, damages, causes of action, expenses, and attorneys' fees incurred
by Assignee by reason of the failure of Assignor to fulfill, perform,
discharge, and observe its obligations with respect to any of the Leases
arising prior to the date hereof. Assignee shall defend, indemnify and hold
harmless Assignor from any liability, damages, causes of action, expenses, and
attorneys' fees incurred by Assignor by reason of the failure of Assignee to
fulfill, perform, discharge, and observe its obligations with respect to any
of the Leases arising from and after the date hereof.
The provisions of Section 10.19 of that certain Agreement of Purchase
and Sale, dated as of February , 1995, by and between Assignor and
Assignee's predecessor in interest, RREEF America L.L.C., are incorporated
herein by reference as if fully set forth herein and are applicable to the
parties' obligations hereunder.
IN WITNESS WHEREOF, this Assignment and Assumption of Leases has been
duly executed and delivered as of this ______ day of _____________, 1995.
ASSIGNOR:
LINCAM PROPERTIES LTD. SERIES 85
BY: LINCAM PROPERTIES, INC., a Delaware
corporation, general partner
By:
Name:
Title:
BY: LINCAM ASSOCIATES, LTD., an Illinois
limited partnership, general partner
By:
Name:
Title:
[ACKNOWLEDGEMENTS]
EXHIBIT C-3
BILL OF SALE
FOR VALUE RECEIVED, LINCAM PROPERTIES LTD. SERIES 85, an Illinois
limited partnership ("Seller"), sells, assigns, transfers and sets over to
_________________________________, a _________ limited partnership
("Purchaser"), the following described personal property:
All equipment, machinery, furniture, furnishings, supplies and other
tangible personal property, of every nature and description, and all
replacements thereof, owned by Seller now or hereafter located in or on
the real estate commonly known as "Barton Creek Landing Apartments",
which real estate is described on Exhibit A attached hereto and made a
part hereof, excepting therefrom any furniture, furnishings articles of
personal property belonging to tenants occupying the improvements
situated on said real estate.
The property hereby assigned includes, without limitation, the property
described on Exhibit B attached hereto and made a part hereof.
IN WITNESS WHEREOF, Seller has duly executed and delivered this Bill of
Sale as of this _____ day of ______________________, 1995.
LINCAM PROPERTIES LTD. SERIES 85
BY: LINCAM PROPERTIES, INC., a Delaware
corporation, general partner
By:
Name:
Title:
BY: LINCAM ASSOCIATES, LTD., an Illinois
limited partnership, general partner
By:
Name:
Title:
[ACKNOWLEDGMENTS]
EXHIBIT C-4
ASSIGNMENT OF INTANGIBLE PROPERTY
FOR VALUE RECEIVED, LINCAM PROPERTIES LTD. SERIES 85, an Illinois
limited partnership ("Assignor"), sells, assigns, transfers, and sets over
unto _________________________________, a ________ limited partnership
("Assignee"), all the right, title and interest of Assignor in and to any and
all of the intangible personal property related to or used in connection with
the real property described on Exhibit A attached hereto (the "Property"),
including without limitation, all trade names and trademarks associated with
such Property including Assignors' right and interest, if and to the extent
Assignor has such rights and interests, in the name of the Property, which is
commonly known as "Barton Creek Landing Apartments," the plans and
specifications, and other architectural and engineering drawings for the
Property, if and to the extent Assignor has any right, title or interest in
and to such plans and specifications and other architectural and engineering
drawings for the Property, contract rights related to the construction,
operation, ownership or management of the Property (but excluding Assignor's
obligations thereunder except those expressly assumed in writing), warranties,
zoning approvals, building permits and licenses (to the extent assignable),
tenant lists, correspondence with tenants and records (including, but not
limited to, those relating to taxes, insurance, maintenance, repairs, capital
improvements and services), booklets, manuals, advertising, and promotional
materials, including, without limitation, photographs and negatives,
correspondence with suppliers and telephone exchange numbers (if available).
The provisions of Section 10.19 of that certain Agreement of Purchase
and Sale, dated as of February , 1995, by and between Assignor and
Assignee's predecessor in interest, RREEF America L.L.C., are incorporated
herein by reference as if fully set forth herein and are applicable to the
parties' obligations hereunder.
IN WITNESS WHEREOF, Assignor and Assignee have duly executed and
delivered this Assignment of Intangible Personal Property as of this _____ day
of _______________, 1995.
ASSIGNOR:
LINCAM PROPERTIES LTD. SERIES 85
BY: LINCAM PROPERTIES, INC., a Delaware
corporation, general partner
By:
Name:
Title:
BY: LINCAM ASSOCIATES, LTD., an Illinois
limited partnership, general partner
By:
Name:
Title:
[ACKNOWLEDGEMENTS]
EXHIBIT C-5
CERTIFICATE UPDATING REPRESENTATIONS AND WARRANTIES
LINCAM PROPERTIES LTD. SERIES 85, an Illinois limited partnership
("Seller") certifies to _________________________________, a ________ limited
partnership ("Purchaser"), that the representations and warranties set forth
in Article Seven of that certain Agreement of Purchase and Sale ("Agreement")
dated as of __________________, 1995 between Seller and RREEF America L.L.C.
conveying the sale of certain real property in the State of Texas more
particularly described in the Agreement, and the updated Rent Roll, updated
list of Service Contracts and updated Operating Statement, attached hereto as
Exhibits A, B and C, respectively, are and remain, true, complete and correct
and are reaffirmed as of this date and survive the Closing (as defined in the
Agreement) for the period described therein.
The Seller makes this certification for Purchaser's benefit with the
understanding that Purchaser is relying upon this certificate in connection
with its purchase of the above-described property.
Duly executed and delivered as of this ______ day of __________, 1995.
LINCAM PROPERTIES LTD. SERIES 85
BY: LINCAM PROPERTIES, INC., a Delaware
corporation, general partner
By:
Name:
Title:
BY: LINCAM ASSOCIATES, LTD., an Illinois
limited partnership, general partner
By:
Name:
Title:
EXHIBIT C-6
ASSIGNMENT AND ASSUMPTION OF SERVICE CONTRACTS
STATE OF _______ }
} KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF _______ }
FOR VALUE RECEIVED, LINCAM PROPERTIES LTD. SERIES 85, an Illinois
limited partnership ("Assignor"), hereby assigns, transfers, sets over and
conveys to _________________________________, a ________ limited partnership
("Assignee"), all of Assignor's right, title and interest in and to the
service contracts and other agreements ("Service Contracts"), in effect at the
real property described on Exhibit A and listed on Exhibit B attached hereto.
Assignor shall defend, indemnify and hold harmless Assignee from any
liability, damages, causes of action, expenses, and attorneys' fees incurred
by Assignee by reason of the failure of Assignor to fulfill, perform,
discharge, and observe its obligations with respect to any of the Service
Contracts arising prior to the date hereof. Assignee shall defend, indemnify
and hold harmless Assignor from any liability, damages, causes of action,
expenses, and attorneys' fees incurred by Assignor by reason of the failure of
Assignee to fulfill, perform, discharge, and observe its obligations with
respect to any of the Service Contracts arising from and after the date
hereof.
The provisions of Section 10.19 of that certain Agreement of Purchase
and Sale, dated as of February , 1995, by and between Assignor and
Assignee's predecessor in interest, RREEF America L.L.C., are incorporated
herein by reference as if fully set forth herein and are applicable to the
parties' obligations hereunder.
IN WITNESS WHEREOF, this Assignment and Assumption of Service Contracts
has been duly executed and delivered as of this ______ day of _____________,
1995.
ASSIGNOR:
LINCAM PROPERTIES LTD. SERIES 85
BY: LINCAM PROPERTIES, INC., a Delaware
corporation, general partner
By:
Name:
Title:
BY: LINCAM ASSOCIATES, LTD., an Illinois
limited partnership, general partner
By:
Name:
Title:
ASSIGNEE:
EXHIBIT C-7
, 1995
Apartment No.
Barton Creek Landing
Re: Notice of Change of Ownership of Barton Creek Landing
Apartments, Austin, Texas (the "Property")
Dear Resident:
For the purposes of complying with Section 92.105 of the Property Code
of the Revised Civil Statutes of the State of Texas, you are hereby notified
as follows:
1. That as of the date hereof,LincAm Properties Ltd. Series 85, an
Illinois limited partnership, has transferred, sold, assigned, and conveyed
the Property to (the "New
Owner").
2. The New Owner is, as of the date hereof, responsible for your
tenant security deposit and/or pet deposit in the aggregate amount of $
with respect to your leased premises at the Property.
3. Future rental payments with respect to your leased premises at the
Property should be made to the New Owner by delivering to the on-site manager
of the Property a check or money order payable to the order of
.
Yours very truly,
NEW OWNER:
By:
Title:
TRANSFER ACKNOWLEDGED:
LINCAM PROPERTIES LTD. SERIES 85
BY: LINCAM PROPERTIES, INC., a Delaware
corporation, general partner
By:
Name:
Title:
BY: LINCAM ASSOCIATES, LTD., an Illinois
limited partnership, general partner
By:
Name:
Title:
EXHIBIT D
LITIGATION
[To be provided during the Reveiw Period]
EXHIBIT E
LEASED PROPERTY
[To be provided during the Reveiw Period]
EXHIBIT F
ENVIRONMENTAL MATTERS
[To be provided during the Reveiw Period]
EXHIBIT G
OTHER PHYSICAL MATTERS
[To be provided during the Reveiw Period]
