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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 20, 1995
WINDSOR PARK PROPERTIES 5, A CALIFORNIA LIMITED PARTNERSHIP
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(Exact name of registrant as specified in its charter)
California 0-16642 33-0243223
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
120 W. Grand Avenue, Suite 202, Escondido, CA 92025
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (619) 746-2411
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Item 2. Acquisition or Disposition of Assets
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On September 20, 1995, Windsor Park Properties 5 (the Partnership) purchased a
26% interest in the Rancho Margate manufactured home community located in
Margate, Florida. The remaining interests in the property were acquired by
Windsor Park Properties 4 and Windsor Park Properties 6, both California limited
partnerships, which have the same General Partners as the Partnership. The
community is in good condition, and the Partnership intends to hold it as a
medium-term (four to six year) investment. During the investment period the
Partnership intends to continue to operate the property as a manufactured home
community.
Rancho Margate is situated on 29 acres of land and was developed in 1973. The
community contains 245 manufactured home spaces, and amenities include a
clubhouse and a swimming pool. All assets acquired will continue to be used in
the operations of the community. The General Partners anticipate expending
$25,000 for various capital improvement and maintenance projects over the next
12 months. It is the opinion of the General Partners that the community is
adequately insured.
The total cost of the property was approximately $6,533,500 ($6,323,500 paid to
the Seller, a $190,500 commission paid to an unaffiliated broker, and other
costs of $19,500). The Partnership's cost of its interest in the property was
approximately $1,698,700 ($1,644,100 paid to the Seller, a $49,600 commission
paid to an unaffiliated broker, and other costs of $5,000). The purchase price
was negotiated through an arms-length bargaining process with the seller, Rancho
Margate Associates, Ltd., a California limited partnership. The registrant's
General Partners are not affiliated with the seller of the community.
In connection with the purchase, the Partnership, Windsor Park Properties 4 and
Windsor Park Properties 6 assumed a $3,737,100 mortgage note of the seller. The
note, which is collateralized by the property, is payable in monthly
installments, including interest at 50% of six month LIBOR plus 6.26% until June
2003 (9.2913% at September 20, 1995). Thereafter, the interest rate increases
to 50% of six month LIBOR plus 7.26%, until the note matures in July 2023. In a
separate agreement, the seller of the property will reimburse the Partnership
for any interest expense which, in total, exceeds 9.1% during the three year
period subsequent to the purchase. The seller has escrowed $87,000 to satisfy
this potential obligation.
The community's manufactured home spaces are rented to tenants on a month-to-
month basis, and current base rental rates average $338 per month. The
community is located near several other manufactured home communities with
comparable base rental rates.
The community is currently 97% occupied and has been approximately 97% occupied
for the past five years. Other manufactured home communities in the immediate
area are approximately 98% occupied.
Other material factors considered by the General Partners in assessing the
property include ad valorem taxes for the 1994 tax year which totaled $92,700
($27.56 per $1,000 assessed value) and utility rates which are expected to
increase 4% per year.
The sources of funds for this acquisition were financing proceeds from
investment properties already owned by the Partnership and the mortgage loan
assumed as described above.
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Item 7. Financial Statements, Proforma Financial Information and Exhibits
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(a)(b) Financial Statements and Proforma Financial Information
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It was impractical to provide the required financial statements and
proforma financial information at the time of filing the Form 8-K. It
is anticipated that all financial information will be filed on Form
8K/A by November 30, 1995.
(c) Exhibits
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10) - Material Contracts
a) Rancho Margate Mobile Home Park
Purchase and Sale Agreement
Dated June 30, 1995
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PURCHASE AND SALE AGREEMENT
FOR RANCHO MARGATE MOBILE HOME PARK
Date For Reference Purposes: June 30, 1995
Rancho Margate Associates, Ltd., a California Limited Partnership (the
"Seller"), agrees to sell to The Windsor Corporation, a California corporation,
and/or assignee (the "Buyer"), and Buyer agrees to purchase from Seller, the
real property, and all personal property related to the operations of
RANCHO MARGATE MOBILE HOME PARK
containing 245 mobile home lots, located at 2900 N. State Road #7, Margate,
Florida (the "Property"), under the terms and conditions of this agreement (the
"Agreement").
I. PURCHASE PRICE
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A. AMOUNT - The purchase price for said Property shall be Six Million
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Three Hundred Fifty Thousand Dollars ($6,350,000) for the Property payable by
Buyer to Seller as follows:
B. TERMS OF PAYMENT
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1. Deposit: Buyer shall deposit the sum of ONE HUNDRED THOUSAND
DOLLARS ($100,000) into an escrow account with David S. Bernstein, Esq. of
Gaynor, Decker, Young, P.A., 150 Second Avenue North, Seventeenth Floor, St.
Petersburg, Florida 33701, as agent for Lawyers Title Insurance Corporation (the
"Escrow Holder" and "Title Agent"), upon Seller's acceptance of this Agreement.
This deposit shall be liquidated damages in the event of default by Buyer.
2. Existing Financing: There is approximately Three Million Seven
Hundred Thirty Thousand Dollars ($3,730,000) of existing financing on the
Property that will be assumed by Buyer. Buyer shall be responsible for the
assumption fee and any other fees associated with the Existing Financing and
such fees shall not be credited towards the Purchase Price.
Balance: Buyer will pay the balance of funds owed to Seller in cash
at the Closing.
Buyer acknowledges that except for the Property and all personal
property related to the operations of the Property, Seller shall be entitled to
retain all other assets owned by Seller including, without limitation, any bonds
held by Seller acquired in connection with the Existing Financing.
3. Interest Rate Reserve Account: At Closing, Seller will leave
$87,000 in an interest bearing escrow account, as identified in Exhibit A
("Interest Rate Reserve"), as a reserve for interest rate increases associated
with the Existing Financing Buyer will assume at Closing.
II. TIME OF CLOSING - This transaction shall close (the "Closing") by the later
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of September 1, 1995; or, if this Agreement or the convenience of the parties
reasonably demands, the Closing may be changed to a time and place as can be
mutually agreed upon in writing between the parties.
III. CONDITIONS OF CLOSING - The Closing and the Buyer's obligation to purchase
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the Property pursuant to this Agreement are specifically contingent upon Buyer's
approval of the following conditions on or prior to the date set forth below.
If Buyer determines any condition is not acceptable, in its sole and subjective
opinion, Buyer may cancel this Agreement and all payments made by Buyer shall be
refunded; or Buyer may request Seller to remedy the unsatisfactory conditions,
if Seller cannot or refuses to remedy the unsatisfactory conditions to Buyer's
satisfaction, Buyer's sole right shall be to cancel this Agreement and all
payments made by Buyer shall be refunded.
A. SELLER TO DELIVER to Buyer by July 10, 1995, for Buyer's inspection
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and approval and Buyer will acknowledge receipt of each item within forty-eight
(48) hours of receipt, Buyer shall provide Escrow Holder and Seller with written
approval of each of the items within thirty (30) days after Buyer's receipt. If
Seller has not provided any of the items indicated below by July 10, 1995, then
Buyer will elect to either waive the requirement for delivery of the item, or
reject the terms of this
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agreement. Absence of Buyer's written waiver of delivery or rejection of the
terms of this agreement will be deemed rejection and neither Buyer nor Seller
shall be obligated to proceed with the Purchase and Sale provided for by this
Agreement and Buyer's $100,000 deposit will be refunded:
1. a current rent roll listing for each mobile home lot: the amount
of lot rent presently being collected by Seller, the date such rent has been
paid through, the amount of deposits retained by Seller, delinquency status,
repossessions, abandoned homes, and any rent concession granted to any tenant;
2. sample copies of resident's applications and leases stating all
economic terms and any material changes;
3. a list of the personal property included in the sale;
4. books, records, income/expense statements and utility billings
for the last three complete fiscal years and for the current fiscal year,
including the month immediately preceding execution of this Agreement;
5. a statement of occupancy for the previous five calendar years,
including the average vacancy rate for each of the past three years;
6. a copy of the real property tax statement for the Property for
1992, 1993, 1994 and 1995 if received;
7. a copy of any notices of violations from government authorities
received in the past Twenty-four (24) months;
8. copies of licenses, permits and certificates related to the
Property;
9. inspections and/or engineering reports or analysis regarding the
private water and sewer system if applicable;
10. copies of all maintenance, service, or other agreements
affecting the Property;
12. schedule of insurance covering the Property;
13. documentation for loans encumbering the Property;
14. sample copy of the last 5 years rental increase notices that
are provided to residents;
15. copies of any reports in excess of $1,000 filed in conjunction
with termite, health plumbing, gas or electrical inspections conducted in the
last two years;
16. a list of any mobile home residents who have provided an
intention to vacate notice to management;
17. a list describing the prospectus delivered to the home owner at
the time each home was originally moved into the Property;
18. a complete copy of each of the prospectuses described in the
preceding list;
19. the last 24 months sewer, water, trash, cable, gas and electric
utility bills, (by month);
20. a copy of any amendments to the prospectuses or other notices
delivered to the homeowners related to Florida's Chapter 723;
21. correspondence related to the Property to or from the Department
of Business Regulation, the Home Owner's Association or Home Owner's Committees.
22. a list of those homes that moved into the Property after July
1, 1986;
23. summary of present employee payroll including benefits provided
(rent, insurance, utilities, etc.);
24. a copy of the information required to be filed with the
Department of Business Regulation by the DBR's Rule 7D-30.002 (4)(b).
25. copies of repair and maintenance bills over $500 for the last
24 months.
B. BUYER WILL INSPECT and approve the following, and Buyer shall
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provide Escrow Holder with written approval of each of the following items by
August 10, 1995:
1. Buyer is granted the right to enter the Property and conduct
physical inspections of the premises and of all improvements, structures,
mechanical equipment, appliances, and personal property located on the Property
without alerting homeowners to the pending sale. Entry shall be at Buyer's own
risk and Buyer shall indemnify, defend and hold harmless Seller against all
loss, liability
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and expense, including attorney's fees occasioned thereby and Buyer shall
restore the Property to its condition previously existing at Buyer's sole
expense;
2. HUD's flood insurance rate map to verify "Zone C" status of the
Property.
3. Seller to provide a Title Commitment (up to a maximum cost to
Seller of $250) by July 14, 1995 from Gaynor, Decker, Young, P.A., as authorized
agent for Lawyer's Title Insurance Corporation, 150 Second Avenue North,
Seventeenth Floor, St. Petersburg, Florida 33733, Attention David S. Bernstein,
Esq. Telephone 813-895-1971, FAX 813-823-8979. (the "Title Insurer");
C. FORMAL APPROVAL - Buyer shall indicate to Seller and to Escrow
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Holder, in writing, on or before August 10, 1995 if it approves the purchase of
the Property under the terms and conditions of this Agreement (the "Formal
Approval"), or rejects the terms of this Agreement based upon the contingencies
stated in paragraph III.A. or III.B. Absence of Buyer's Formal Approval by
August 10, 1995 shall be deemed rejection, neither Seller nor Buyer shall be
obligated to proceed with the purchase and sale provided for by this Agreement
and Buyer's $100,000 deposit will be refunded.
D. BUYER'S REPRESENTATIONS - Except as otherwise stated in writing and
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so long as Seller's representations are true and correct and neither omit nor
misstate material facts, Buyer is purchasing the Property in its existing
condition. The parties acknowledge that no verbal representations or assurances
concerning the Property may be relied upon.
E. SELLER'S REPRESENTATIONS - As an inducement for Buyer to complete
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the purchase of the Property under the terms of this Agreement, Seller hereby
makes the following warranties and representations to Buyer; each is material
and reasonably relied upon by Buyer, and each is accurate and complete and
neither omits nor misstates any material fact, as of the date of this Agreement
and the date of Closing. Buyer hereby expressly acknowledges that, except as
set forth herein, no representations, warranties or covenants have been made,
and Buyer agrees to take the Property "As Is", subject to said representations,
warranties, and covenants contained herein. These warranties and
representations shall survive the Closing and delivery of the deed and shall
remain in effect for one year from the Closing:
1. to Seller's actual knowledge the documents provided to Buyer
regarding the Property are accurate and complete and neither omit nor misstate
any material fact needed to make the document not misleading.
2. to Seller's actual knowledge no entity has a legal or equitable
interest in six or more of the mobile homes located on the Property;
3. to Seller's actual knowledge the Seller has not received any
notice in the last 12 months that the Property does not comply with applicable
CC&R's and Federal, state, county, and local laws, codes, requirements and
regulations;
4. to Seller's actual knowledge, having diligently inquired of
current employees, there are no threatened or pending violations, orders,
administrative proceedings, rulings or other findings of any governmental agency
that may materially and adversely affect the Property or require any repair,
maintenance, improvement or alteration in excess of $1,000, except those repairs
Seller has agreed to complete (see Exhibit B "Repairs to be Completed by
Seller") to be performed to the Property, that would affect the Property and not
other similar properties. For purposes of this section, the Seller is not
obligated to inquire outside its current employees.
5. The Property contains 245 rentable mobile home lots and the
minimum monthly gross rental income collected shall be no less than Eighty
Thousand Two Hundred Forty Three Dollars ($80,243) as evidenced by certified
July 1995 rent roll and certified deposit pages and certified bank deposit slip;
6. except as set forth on the July 1995 rent roll, no tenant has
been granted any rent concession, no rents are prepaid for more than one (1)
month in advance and to Seller's actual knowledge all installation, and
alteration work Seller may be obligated to perform has been performed;
7. Buyer will receive and Seller owns the personal property to be
transferred to Buyer free and clear of any liens;
8. to the best of Seller's actual knowledge there are no known
material conditions or defects, latent or otherwise, which may adversely affect
the personal property, buildings, equipment
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or improvements;
9. to Seller's actual knowledge the personal property is in
operational condition;
10. government taxes and fees related to the Property or to the
operations of the Property, due and payable prior to the close of escrow, will
be paid by Seller and prorated at the close of escrow;
11. to Seller's actual knowledge there are no threatened or any
pending claims or law suits which may affect the Property;
12. Seller shall indemnify Buyer against any liability resulting from
death or injury to persons during Seller's ownership of the Property and Buyer
shall provide Seller with such indemnification for all such occurrences after
Closing;
13. the maintenance, service contracts, and other such agreements
with third parties related to the Property may be canceled with sixty (60) days
notice to any such supplier;
14. to Seller's actual knowledge, during Seller's ownership of the
Property no storage tanks nor hazardous substance subject to Federal, state or
local hazardous substance regulation have been located on the Property in
violation of law;
15. To Seller's actual knowledge applicable zoning ordinances and
land use restrictions permit Buyer to operate the Property as a mobile home park
with the existing sites and with all existing setbacks, parking areas, green
spaces, recreational areas and other amenities;
16. Seller will disclose all known Florida Statutes, Section 723
violations;
17. All mobile home leases related to the Property entered into by
the Seller after executing this Agreement will be on Seller's standard lease, at
market rate with a term not to exceed one year.
18. Seller will maintain the property in good repair and continue
with adequate casualty and liability insurance coverage on property until close
of escrow.
IV. PROFESSIONALS' REVIEW - inspection and verification of Buyer's due
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diligence work will occur and Buyer shall provide Seller and Escrow Holder with
written approval of these professionals' findings within 30 days of Formal
Approval. Seller agrees to fully cooperate with these professionals:
1. Deloitte, Touche ("Auditor") will conduct an audit of the
financial records of the operations of the Property for the current year and the
most recent complete year. Seller agrees to execute Auditor's necessary
representations letter;
2. Structural and mechanical engineers and inspectors;
3. Buyer's property managers shall be permitted to come into the
park and talk with homeowners while accompanied by a Seller's representative
and, upon prior notification to Seller, with the Homeowners' Association.
4. ALTA/ACSM Survey requirements and compliance with zoning and
other governmental regulations affecting the Property;
5. Environmental Audit. A copy of this report is to be provided to
the Seller;
6. MAI Appraisal.
7. Termite inspection and Report.
Buyer's obligations under this Agreement are contingent upon Buyer's
approval of this Professionals' Review. Any disapproval by Buyer of these
Section IV. contingencies shall be based upon material issues and Seller shall
have a right, but not the obligation, to cure such issues within fifteen (15)
days of Buyer's notice to Seller, Buyer will provide Seller with Professionals'
reports upon which disapprovals are based. Absence of Buyer's approval within
the specified time period shall be deemed rejection, neither Seller nor Buyer
shall be obligated to proceed with the purchase and sale provided for by this
agreement and Buyer's $100,000 deposit will be refunded.
V. TITLE INSURANCE
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A. On or before July 14, 1995, Seller shall cause to be procured and
delivered for Buyer's review and approval (as hereinafter provided) a
preliminary owner's title binder for a title insurance
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policy to be issued by a title insurance underwriter acceptable to Buyer,
together with hard copies of all documents referred to therein. The binder and
policy to be issued pursuant thereto shall be paid for by Seller and shall be in
an amount equal to the amount of the Purchase Price. The binder and policy
shall be in a current ALTA standard form "B", except that there shall be no
Schedule B - Section 2 exceptions to title permitted except for those identified
on Exhibit "B" (the "Permitted Exceptions"). The policy shall insure marketable
title. The title binder shall be delivered to Buyer's attorney, and a copy
thereof shall be delivered to Seller's attorney. Buyer's attorney shall have
five (5) days after receipt of the title binder and hard copies of all exception
documents referred to in Schedule B -Section 2 thereof and the survey called for
in paragraph VI. hereof to give written notice to Seller or Seller's attorney
of any objections by Buyer to the state of title (including any matters shown on
the survey which are unacceptable to Buyer such as, without limitation, the
location and compliance (i.e. whether or not any terms thereof have been
violated) of any easements on the list of Permitted Exceptions). After due
notice, Seller shall have a reasonable time, not to exceed thirty (30) days, to
cure any valid title defects (and if necessary, the closing shall be delayed for
that period) to which Buyer's attorney objects. If Seller fails or refuses to
cure any valid title defect as to which due notice is given, Buyer shall have
the option to (i) terminate this Agreement, in which case Buyer shall notify
Seller that Buyer will not proceed with the purchase, whereupon this Agreement
shall terminate and all parties shall be released from any further obligations
hereunder, except that Buyer shall be entitled to the prompt return from Escrow
Agent of the Earnest Money Deposit, or (ii) proceed under this Agreement and
accept title to the Real Property subject to such title defects, without
reduction of the purchase Price, in which case the closing shall take place on a
date mutually agreed upon by Seller and Buyer which shall be within ten (10)
days from the date of such election by Buyer.
B. Escrow Agent, as the agent for the title insurance company, shall be in a
position to issue the title policy upon recording the appropriate documents and
insure that Seller has complied with all requirements set forth under FLORIDA
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STATUTES 723.071(1), (2) and (3) to extinguish any right of purchase or
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rescission in favor of any tenants or homeowners association, if any, upon the
execution and delivery of the statutory affidavit to be executed by Seller and
to insure the Real Property free and clear of all exceptions to title other than
the Permitted Exceptions.
VI. SURVEY - Seller shall deliver to Buyer within five (5) days of Seller's
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execution of this Agreement a copy of Seller's most recent survey of the
Property.
VII. ESCROW AGENT - The sole responsibility of the Escrow Agent shall be to
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deposit the Earnest Money Deposit in an interest-bearing, insured money market
account with a local bank upon execution and delivery of all forms (including a
W-9 Form) and documents necessary to do so and to disburse said funds according
to the terms of this Agreement. Escrow Agent shall notify the parties hereto of
the date of deposit, name of institution and current interest rate within five
(5) days of deposit. In the event of a breach of this Agreement by either
Seller or Buyer, or if, in the sole discretion of the Escrow Agent, some doubt
exists as to when, to whom or under what circumstances such Earnest Money
Deposit shall be disbursed hereunder, and the parties hereto are unable after
ten (10) days' prior written notice thereof from Escrow Agent to agree and
direct Escrow Agent, in writing, as to when, to whom or under what circumstances
Escrow Agent shall disburse the same, Escrow Agent shall be entitled to
interplead said Earnest Money Deposit into the Circuit Court of Broward County,
Florida, without further liability or responsibility on its part. Costs,
expenses and attorneys' fees incurred by Escrow Agent in connection with any
such interpleader may be deducted by Escrow Agent from the amount of the Earnest
Money Deposit prior to its deposit into the registry of the Court. In any
event, however, all parties agree that Escrow Agent shall have no liability or
any further responsibility to any party or person whomsoever for any
disbursement of the Earnest Money Deposit made by Escrow Agent in good faith
unless such disbursement shall constitute a willful breach of the duties and
obligations of Escrow Agent under this Agreement of gross negligence on the part
of Escrow Agent. Seller acknowledges that Escrow Agent is the attorney for
Buyer and agrees that Escrow Agent may represent Buyer in connection with any
dispute arising under this Agreement notwithstanding such
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service as Escrow Agent under this Agreement. The interest received on the
Earnest Money Deposit shall be applied to the account of Buyer at Closing. The
Escrow Agent has executed the receipt attached to this Agreement to confirm that
the Escrow Agent is holding and will hold and disburse funds paid in respect of
the Purchase Price in escrow pursuant to the provisions of this Agreement and as
directed by the parties in the Settlement (Closing) Statement.
VIII. CLOSING PROCEDURE
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A. PLACE OF CLOSING - This transaction shall be closed at the office of
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the Escrow Holder.
B. EXPENSES OF CLOSING - Costs and expenses shall be paid in cash at or
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before the Closing as follows:
1. Seller shall pay the cost of Owner's standard title policy,
special assessments pending at the time of closing, and Doc stamps on the Deed;
2. Buyer shall pay the difference between cost of owner's standard
title policy and an owner's extended title policy, recording fees, environmental
and engineer's audit, updated survey, appraisal, and Mortgage Doc Stamps.
3. Escrow Holder's charges shall be none ($0);
4. Auditor and property inspection costs to be paid by Buyer;
5. Any pre-paid rents and/or deposits of tenants are to be paid by
Seller to Buyer. Buyer will use its best efforts to collect delinquent rents
and forward to Seller, for a period of two months after closing. If Buyer is
unable to collect any such delinquent rents within said above two month period,
Buyer shall assign to Seller all rights to collect such delinquent rents;
6. costs of satisfying any delinquent taxes, lien indebtedness other
than the existing Financing, delinquent bonds or improvement assessments which
are a lien on said property as of Closing shall be paid in full by Seller;
7. Seller shall pay current on-site employees the cash value of all
accrued benefits owed as of the Closing date;
8. Other charges - paid as customary in Broward County.
C. PRORATIONS - The following shall be prorated by Escrow Holder
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between Seller and Buyer on the basis of thirty (30) day month, as of the day of
Closing, and paid in cash. In the event a prorated expense or estimate should
be altered after the Closing, the parties agree to subsequently remit funds due:
1. Government assessments, personal property and real property
taxes, assessed against the Property during the current governmental time
period;
2. Operating expenses of the Property, such as vendors, service
contracts, and utility charges;
3. Scheduled lot rents for the month of Closing, and all prepaid
rents which have been collected through Closing.
D. DOCUMENTS REQUIRED AT CLOSING
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1. Special warranty deed acceptable to Title Insurer;
2. a current ALTA extended policy issued by Title Insurer with only
those exceptions Buyer has agreed to accept as part of Buyer's
Formal Approval;
3. certified rent roll;
4. certified statement of prepaid and delinquent rents;
5. certified statement of security deposits held by
Seller;
6. Closing statements approved by Buyer and Seller;
7. bill of sale for personal property;
8. assignment of rights and interests;
9. non-foreign affidavit as required by IRS;
10. further assurances agreement from Buyer and Seller;
11. Indemnification Agreements from Buyer and Seller;
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12. Owner's Affidavit as required by Title Insurer;
13. certificates of title to vehicle(s);
14. original copies, as available, of service contracts and other
agreements affecting the Property;
15. plans, permits, licenses, and studies, related to
the mobile home park under control of Seller;
16. a current certificate from the appropriate state
authority reflecting no UCC financing statements
claiming a security interest in personal property;
17. Affidavit of compliance made pursuant to Florida
Statutes, Section 723.072.
IX. SELLER'S CONTINGENCIES - Seller's obligation to sell is contingent upon
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the Homeowner's right to purchase the property under Florida Statutes, Chapter
723.071 and Seller's limited partner's approval of the Property sale. The
required notice to the Homeowners is to be delivered by the Seller within 24
hours of full execution of this Agreement. Within 12 days of full execution of
this Agreement Seller shall provide Buyer with the results of the limited
partner's vote regarding the Property sale and apprise Buyer of the Homeowner's
interest in purchasing the Property.
In the event Buyer provides Seller with Formal Approval and Seller terminates
this Purchase and Sale Agreement based upon the contingency stated in this
Section IX., Seller agrees to pay Buyer for direct expenses incurred related to
this transaction, up to a maximum of Twenty-five Thousand Dollars ($25,000). No
other fees or compensation will be due or paid to Buyer.
This Agreement will not be deemed terminated until Seller has made such
payment.
X. OTHER PROVISIONS
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A. SELLER'S 1031 EXCHANGE - Buyer agrees to cooperate with Seller's
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1031 tax deferred exchange, provided such cooperation is at no risk, expense or
liability to Buyer.
B. ARBITRATION - Any dispute related to this Agreement shall require
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arbitration of the claim or controversy in accordance with the rules of the
American Arbitration Association.
C. VENUE - The parties agree that any arbitration or judicial
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proceedings related to this Agreement shall be filed in the judicial district
for the County of San Diego, State of California.
C. PROPERTY DAMAGE PRIOR TO CLOSING - If at least Fifty Thousand
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Dollars ($50,000) of the Property or any of the improvements on said Property
are destroyed or damaged prior to Closing, Buyer may elect to terminate this
transaction or Buyer shall be entitled to any insurance proceeds applicable to
such loss with Buyer having the exclusive right to settle and dispose of such
insurance claims. Buyer and Escrow Holder shall assume no damage has occurred
unless written notification is delivered by Seller.
D. NOTIFICATION TO VENDORS - Seller shall notify in writing all vendors
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and utility suppliers of the Closing not less than five (5) days prior to
Closing.
E. TIME OF ESSENCE - Time is of the essence.
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F. COUNTERPARTS AND TELECOPIES - Documents related to this transaction
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may be executed by Buyer and Seller in counterparts. The receipt of
transmissions may be relied upon by the parties as original copies, the sender
of such transmissions will provide the recipient with an original copy.
G. DESCRIPTIVE HEADING - The descriptive headings used herein are for
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convenience only and are not intended to necessarily describe the matter in the
section and are not meant to be used in determining the rights or obligations of
the parties.
H. NO OTHER AGREEMENTS - No prior agreements nor subsequent
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modifications shall be valid or binding upon the parties unless in writing and
executed by the party to be bound.
I. ATTORNEYS' FEES & COSTS - In the event of any dispute or litigation
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resulting from this transaction, the prevailing party shall be entitled to
recover reasonable attorneys' fees and costs. The attorneys' fees award shall
not be computed in accordance with any court fee schedule, but shall
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be such as to fully reimburse all reasonable attorneys' fees incurred in good
faith. The parties agree that the California courts or Arbitration Association
will be the proper venue for litigation between Buyer and Seller related to this
Agreement.
J. RADON GAS - Radon is a naturally occurring radioactive gas that,
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when it has accumulated in a building in sufficient quantities, may present
health risks to persons who are exposed to it over time. Levels of radon that
exceed federal and state guidelines have been found in buildings in Florida.
Additional information regarding radon and radon testing may be obtained from
your county public health unit.
The foregoing notice is provided pursuant to Section 404.056(8), Florida
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Statutes (1992), which requires that such notice be included in certain real
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estate documents.
K. NOTICE - Any notice required or permitted to be delivered or
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received hereunder shall be deemed received upon being deposited and sent by
United States mail, postage prepaid, addressed to Seller or Buyer, as the case
may be, at the address set forth below:
Notice To Seller Notice To Buyer
Shall Be Sent To: Shall Be Sent To:
Mr. Bill Williams Mr. John A. Coseo, Jr.
Director THE WINDSOR CORPORATION
CLAYTON-WILLIAMS-SHERWOOD A California Corporation
800 Newport Center Drive, #400 120 West Grand Avenue
Newport Beach, California 92660 Escondido, CA 92025
(714) 640-4200 (619) 746-2411 Ext. 227
(714) 640-4931 FAX (619) 746-1710 FAX
XI. TIME LIMIT - In the event a fully executed copy of this Agreement has not
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been conveyed to Buyer by the 10th day of July, 1995, this offer shall be deemed
revoked:
The Buyer executes and submits this Agreement to Seller this 30th day of
June 1995, intending to be legally bound upon Seller's acceptance of this
Agreement,
SELLER BUYER
Rancho Margate Associates, Ltd. By: The Windsor Corporation
a California Limited Partnership A California Corporation
/s/ Byron L. Williams /s/ Andrew Kean
- ------------------------------- -----------------------------
By: Byron L. Williams By: Andrew Kean
As: General Partner Its: General Counsel
/s/ Steven J. Sherwood
- -------------------------------
By: Steven J. Sherwood
As: General Partner
The Seller, intending to be legally bound by this Agreement,
executes this document on this 7th day of July, 1995.
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<PAGE>
EXHIBIT A
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INTEREST RATE RESERVE
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At the Closing, Seller shall leave $87,000 in an interest bearing escrow account
as a reserve (the "Reserve") against interest rate increases above 9.10%
(Buyer's "Interest Rate Cap") on Seller's Existing Financing ("Financing"),
which Buyer is to assume at the Closing. Said Reserve account is to be in
existence for 36 months after the Closing.
Buyer shall be entitled to one draw upon the Reserve at the end of each quarter.
The first quarter shall start from the date of Closing.
Buyer's draw shall be at the lesser of $7,250 or the difference between the
actual debt service with interest above the Interest Rate Cap paid for the
quarter, if any, and Buyer's debt service at the Interest Rate Cap, subject to
offsets as described in the following paragraph.
Seller shall be entitled to an offset ("Seller Offset") against future draws by
Buyer should the interest rate on the Financing drop below 9.10%. The amount of
the credit offset, if any, is computed as the difference between the actual
interest rate on the Financing, with the floor being 8.20%, and 9.10%. Seller
is not entitled to an Offset for an interest rate on the Financing below 8.20%.
Such offset shall be in the form of a credit against future draws by Buyer. At
no time will Buyer be obligated to contribute to the Reserve account nor will
Buyer be liable for any outstanding offset credits to Seller at the termination
of this escrow account.
In no event shall Buyer be entitled to draw more than $7,250 per quarter from
the Reserve during the 36 month period. All monies remaining in the Reserve at
the end of the 36 month period, including interest, shall revert to Seller.
Buyer and Seller shall split equally all fees associated with maintaining this
escrow account.
Buyer shall provide Seller with a quarterly accounting of the Reserve with
verification of any draws by providing bank and Lender statements to Seller.
EXHIBIT B
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REPAIRS TO BE COMPLETED BY SELLER
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1) Bathrooms in the clubhouse are to refurbished to meet ADA standards;
2) Shuffleboard courts to be resurfaced;
3) Flooding problem in front of the clubhouse to be rectified by installation
of a storm drain, pump, and underground piping to pump water to the canal
behind the clubhouse;
4) Complete addition to the clubhouse (carpet, tile, etc.) and resolve storm
shutter problem with Broward County.
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<PAGE>
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, thereunto duly authorized.
WINDSOR PARK PROPERTIES 5
(A California Limited Partnership)
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(Registrant)
By /s/John A. Coseo, Jr.
--------------------------------
JOHN A. COSEO, JR.
General Partner
Date: October 2, 1995
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