<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Current Report Pursuant To
Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported) May 14, 1996
BERKSHIRE REALTY COMPANY, INC.
Delaware 1-10660 04-3086485
(State or other jurisdiction of (Commission (IRS employer
incorporation or organization) file number) identification no.)
470 Atlantic Avenue, Boston, Massachusetts 02210
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 423-2233
<PAGE>
ITEM 2: ACQUISITION OR DISPOSITION OF ASSETS
On May 14, 1996, Berkshire Realty Company, Inc. ("The Company"), through a
majority owned subsidiary, BRI OP Limited Partnership, via contribution acquired
The Point Apartments from Turtle Creek Associates Limited Partnership for a
value of approximately $54 million. Turtle Creek Associates Limited Partnership
is approximately 71% owned by certain officers and directors of the Company. In
exchange for The Point Apartments, The Company issued 1.6 million units of BRI
OP Limited Partnership and assumed $35.5 million of non-recourse indebtedness on
the property. Two-thirds or 1,056,500 of operating partnership units were
issued at closing and the remainder will be issued within 19 months. The debt
has a fixed interest rate of 7 5/8% and self-amortizes with the last payment in
2029. In order to fund escrows and rehabilitation costs at the closing, the
Company drew down approximately $7.4 million on an existing credit facility.
The Point Apartments is a 1,119 unit high-rise apartment property located in
Silver Spring, Maryland. The property, which was built in 1969, is currently
undergoing an extensive $15 million rehabilitation, $11 million of which is the
responsibility of the Company.
2
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
Berkshire Realty Company, Inc.
We have audited the accompanying statements of excess (deficit) of revenues over
specific operating expenses of The Point Apartments, Silver Spring, Maryland
(the "Property") for the years ended December 31, 1995, 1994 and 1993. These
financial statements are the responsibility of the Property's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement of excess of revenues (deficit)
over specific operating expenses is free of material misstatement. An audit
includes examining on a test basis, evidence supporting the amounts and
disclosures in the statement. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
As described in Note 2, these financial statements exclude certain expenses that
would not be comparable with those resulting from the operations of the Property
after acquisition by Berkshire Realty Co., Inc. The accompanying financial
statements were prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission and are not intended to be
a complete presentation of the Property's revenues and expenses.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the excess (deficit) of revenues over specific operating
expenses (exclusive of expenses described in Note 2) of The Point Apartments,
Silver Spring, Maryland for the years ended December 31, 1995, 1994 and 1993 in
conformity with generally accepted accounting principles.
Boston, Massachusetts
May 28, 1996
3
<PAGE>
THE POINT APARTMENTS
SILVER SPRING, MARYLAND
STATEMENTS OF EXCESS (DEFICIT) OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
for the years ended December 31, 1995, 1994 and 1993
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Revenues
Rental Revenue $9,010,796 $9,332,129 $8,266,688
Other Income 109,140 99,581 19,757
---------- ---------- ----------
9,119,936 9,431,710 8,286,445
Specific operating expenses (Note 2):
Operating 3,274,635 3,303,435 3,276,814
Management 454,701 466,606 406,249
General and Administrative 396,051 388,242 400,489
Repairs and Maintenance 939,838 1,316,238 1,089,369
Real Estate Taxes 492,884 488,348 531,244
Interest 2,972,689 3,107,959 3,099,642
---------- ---------- ----------
8,530,798 9,070,828 8,803,807
---------- ---------- ----------
Excess (deficit)of revenues over
specific operating expenses $ 589,138 $ 360,882 $ (517,362)
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statement.
4
<PAGE>
THE POINT APARTMENTS
SILVER SPRING, MARYLAND
NOTES TO STATEMENTS OF EXCESS (DEFICIT) OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
1. DESCRIPTION OF PROPERTY
-----------------------
The Point is a multi-family 1,119 unit high-rise apartment property located
in Silver Spring, Maryland. The property, which was built in 1969, is currently
undergoing an extensive $15 million rehabilitation. Approximately $11 million of
the rehabilitation will be funded by Berkshire Realty Company, Inc. Management
believes that the completion of the rehabilitation will increase the revenue
generating capabilities of the property.
2. BASIS OF ACCOUNTING
-------------------
The accompanying statements of excess (deficit) revenues over specific
operating expenses are presented on the accrual basis. These statements have
been prepared in accordance with the applicable rules and regulations of the
Securities and Exchange Commission for real estate properties acquired or to be
acquired. Accordingly, the statements exclude certain historical expenses not
comparable to the operations of the property after acquisition, such as
depreciation and amortization. The Company has entered into property management
contracts with an affiliate of certain directors and officers of the Company for
services as management agent to the Company's properties. Such agreements
provide management fees which have been reflected in the accompanying financial
statements at 5% of adjusted gross revenues. The Company is also required to
reimburse the same affiliate for certain expenses such as accounting and travel
expenses. These expenses have been reflected in the accompanying financial
statements.
Apartment leases require the payment of rent monthly in advance. Rental
revenues are recorded on the accrual basis.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amount of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
3. DEBT
----
BRI OP Limited Partnership, a majority-owned subsidiary of the Company,
assumed a $35.5 million non-recourse HUD mortgage at the time of acquisition.
The mortgage matures in 2029 and has an annual interest rate of 7.625%.
Based on current borrowing rates for bank loans with similar terms and
average maturities, the fair value of long-term debt is approximately
$34,300,000 at December 31, 1995.
5
<PAGE>
BERKSHIRE REALTY COMPANY, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma Condensed Consolidated Balance Sheet of
Berkshire Realty Company, Inc. ( the "Company") as of March 31, 1996, is
presented as if all activities related to the acquisition of The Point
Apartments including the issuance of operating partnership units, the assumption
of non-recourse debt and the increase in the line of credit occurred on March
31, 1996. The pro forma Condensed Consolidated Statement of Operations for the
year ended December 31, 1995 and the period from January 1, 1996 through March
31, 1996 are presented as if all activities related to the acquisition of The
Point Apartments including the issuance of operating units, the assumption of
non-recourse debt and the increase in the line of credit had occurred as of
January 1, 1995 and 1996, respectively.
The unaudited pro forma Condensed Consolidated Balance Sheet and Statement of
Operations should be read in conjunction with the historical financial
statements of the Company. In management's opinion, all adjustments necessary
to reflect the above discussed transactions have been made. The unaudited pro
forma Condensed Consolidated Balance Sheet and Statement of Operations are not
necessarily indicative of what actual results of operations of the Company would
have been for the period, nor does it purport to represent the Company's results
of operations for future periods.
6
<PAGE>
BERKSHIRE REALTY COMPANY, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
March 31, 1996
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Berkshire
Realty Pro
Company Pro Forma
Inc. Forma Consol-
Historical Adjustments idated
---------- ----------- ------
<S> <C> <C> <C>
ASSETS
Real estate assets:
Multifamily apartment complexes,
net of accumulated depreciation $321,657 $54,361(a) $376,018
Retail centers, net of accumulated
depreciation 59,067 59,067
Investments in unconsolidated joint
ventures 41,726 41,726
Mortgage loans and other loans receiv-
able, net of purchase discounts 20,084 20,084
Land and construction in progress 5,368 5,368
-------- ------- --------
Total real estate assets 447,902 54,361 502,263
Cash and cash equivalents 7,087 7,087
Mortgage-backed securities net of
amortization 10,949 10,949
Escrows 3,526 5,680(b) 9,206
Deferred charges and other assets 11,242 285(c) 11,527
Goodwill 13,244 13,244
-------- ------- --------
Total assets $493,950 $60,326 $554,276
======== ======= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgage notes payable $104,947 $35,536(d) $140,483
Credit agreements 95,140 7,450(e) 102,590
Repurchase agreement 10,950 10,950
Tenant security deposits, prepaid
rents and escrows held 2,055 2,055
Accrued real estate taxes, insurance
and other liabilities 7,702 869(f) 8,571
-------- ------- --------
Total liabilities 220,794 43,855 264,649
Commitments and contingencies
Minority interest in Operating
Partnership 17,887 16,471(g) 34,358
Shareholders' equity:
Preferred stock, $0.01 par value;
60,000,000 shares authorized none
issued
Common stock ("Shares"), $0.01 par
value; 140,000,000 Shares authorized
and 25,899,449 and 25,897,923 Shares
issued, respectively 259 259
Additional paid-in-capital 256,753 256,753
Less common stock in treasury at
cost (506,497 Shares) (1,743) - (1,743)
-------- ------- --------
Total shareholders' equity 255,269 - 255,269
-------- ------- --------
Total liabilities and
shareholders' equity $493,950 $60,326 $554,276
======== ======= ========
</TABLE>
See accompanying notes to pro forma condensed consolidated balance sheet.
7
<PAGE>
BERKSHIRE REALTY COMPANY, INC. AND SUBSIDIARIES
NOTES TO PROFORMA CONDENSED CONSOLIDATED BALANCE SHEET
March 31, 1996
(Unaudited)
Notes:
(a) Acquisition of The Point Apartments.
(b) Escrows as required by the debt assumption established at acquisition.
(c) Other assets incurred in acquisition.
(d) Assumption of the mortgage loan.
(e) Increase in credit line to fund The Point acquisition.
(f) Liabilities assumed in acquisition.
(g) BRI OP Limited Partnership units to be issued to Turtle
Creek Associates. The Company issued 1.6 million units: two thirds or
1,056,0000 of the units issued at closing and the remainder will be issued
within 19 months.
8
<PAGE>
BERKSHIRE REALTY COMPANY, INC AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Berkshire
Realty
Company Pro Forma Pro Forma
Inc. The Adjust- Consol-
Historical Point ments(b) idated
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenue:
Rental $70,068 $ 9,011 $ - $79,079
Interest from mortgage loans 2,010 - - 2,010
Joint venture net income 1,407 - - 1,407
Interest income from MBS 1,154 - - 1,154
Other income 1,209 109 - 1,318
------- ------- ------- -------
Total revenue 75,848 9,120 - 84,968
------- ------- ------- -------
Expenses:
Property operating expenses 17,990 3,671 - 21,661
Repairs and maintenance 4,921 940 - 5,861
Real estate taxes 7,016 493 - 7,509
Property management fees to
an affiliate 3,421 455 - 3,876
Depreciation and amortization 21,983 2,959(a) - 24,942
General and administrative 1,356 - 1,356
Interest 15,618 2,973 486(b) 19,077
Asset management fees to an
affiliate 1,565 406(c) 1,971
------- ------- ------- -------
Total expenses 73,870 11,491 892 86,253
------- ------- ------- -------
Income (loss) from operations 1,978 (2,371) (892) (1,285)
Gain on sales of properties and
payoff of mortgage loans 15,603 - - 15,603
------- ------- ------- -------
Income (loss) before non-recurring
charges, extraordinary item and
minority interest in Operating
Partnership 17,581 (2,371) (892) 14,318
------- ------- ------- -------
Non-recurring charges (1,728) - - (1,728)
Extraordinary item (913) - (913)
------- ------- ------- -------
Net income (loss) before minority
interest in Operating
Partnership 14,940 (2,371) (892) 11,677
------- ------- ------- -------
Minority interest in Operating
Partnership (154) - (463)(d) (617)(1)
------- ------- ------- -------
Net income (loss) $14,786 $(2,371) $(1,355) $11,060
======= ======= ======= =======
Weighted average shares 25,392,621
==========
Net income per weighted average share $ .44
=======
</TABLE>
(1) The Company's weighted average share of the Operating Partnership is
94.72%.
See accompanying notes to pro forma condensed consolidated statement of
operations.
9
<PAGE>
BERKSHIRE REALTY COMPANY, INC AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
(Unaudited)
Notes:
(a) One year estimated depreciation for The Point.
(b) Interest on credit line draw at 6.53%.
(c) Asset management fee on The Point.
(d) Estimated minority interest (5.28%) calculated assuming The Point
acquisition took place on January 1, 1995.
10
<PAGE>
BERKSHIRE REALTY COMPANY, INC AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Quarter Ended March 31, 1996
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Berkshire
Realty
Company Pro Forma Pro Forma
Inc. The Adjust- Consol-
Historical Point ments(b) idated
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenue:
Rental $19,365 $ 2,316 $ - $21,681
Interest from mortgage loans 585 - - 585
Joint venture net income 427 - - 427
Interest income from MBS 261 - - 261
Other income 218 23 - 241
------- ------- ------- -------
Total revenue 20,856 2,339 - 23,195
------- ------- ------- -------
Expenses:
Property operating expenses 4,694 1,023 - 5,717
Repairs and maintenance 1,339 178 - 1,517
Real estate taxes 2,233 119 - 2,352
Property management fees to
an affiliate 891 119 - 1,010
Depreciation and amortization 6,258 740(a) - 6,998
General and administrative 528 - 528
Interest 4,194 725 122(b) 5,041
Corporate Taxes 81 - 81
Professional Fees 44 - 44
Asset management fees to an
affiliate 393 - 68(C) 461
------- ------- ------- -------
Total expenses 20,655 2,904 190 23,749
------- ------- ------- -------
Income (loss) before minority
interest 201 (565) (190) (554)
------- ------- ------- -------
Minority interest in Operating
partnership (7) - 48(d) 41(1)
------- ------- ------- -------
Net income/(loss) $ 194 $ (565) $ (142) $ (513)
======= ======= ======= =======
Weighted average shares 25,392,952
==========
Net loss per weighted average share $ (.02)
=======
</TABLE>
(1) The Company's weighted average share of the Operating Partnership is
92.58%.
See accompanying notes to pro forma condensed consolidated
statement of operations.
11
<PAGE>
BERKSHIRE REALTY COMPANY, INC AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Quarter Ended March 31, 1996
(Unaudited)
Notes:
(a) Three months estimated depreciation for The Point.
(b) Three months interest on credit line draw at 6.53%.
(c) Two months of asset management fees on The Point, since the Company became
self-administered on March 1, 1996.
(d) Estimated Minority Interest (7.42%) calculated assuming The Point
acquisition occurred on January 1, 1996.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BERKSHIRE REALTY COMPANY INC.
/s/Marianne Pritchard
Marianne Pritchard
Senior Vice President and
Chief Financial Officer
Date: May 29, 1996
13
<PAGE>
ITEM 7. EXHIBITS
(a) Exhibits
10.1 Contribution Agreement by and between Turtle Creek Associates Limited
Partnership and BRI OP Limited Partnership, dated April 8, 1996.
10.2 BRI The Point Agreement of Limited Partnership by and between BRI Texas
Apartments Limited Partnership and BRI OP Limited Partnership.
10.3 First Amendment to BRI The Point Limited Partnership Agreement by and
between BRI Texas Apartments Limited Partnership and BRI OP Limited
Partnership, dated March 15, 1996.
10.4 Certificate of Limited Partnership of BRI The Point Limited Partnership
dated October 20, 1995.
10.5 Agreement of Release, Assumption of Deed of Trust Note, Deed of Trust
and Regulatory Agreement by and among Turtle Creek Associates Limited
Partnership, BRI The Point Limited Partnership and Berkshire Mortgage
Finance Corporation, dated March 20, 1996.
10.6 Deed of Trust by and between Turtle Creek Associates Limited Partnership
and Berkshire Mortgage Finance Corporation, dated March 14, 1994.
10.7 Deed of Trust Note by and between Turtle Creek Associates Limited
Partnership and Berkshire Mortgage Finance Corporation, dated March 14,
1994.
1
<PAGE>
CONTRIBUTION AGREEMENT
----------------------
THIS CONTRIBUTION AGREEMENT is made and entered into as of the of
April, 1996 by and between TURTLE CREEK ASSOCIATES LIMITED PARTNERSHIP, a Texas
limited partnership having its principal office at c/o The Berkshire Group, 470
Atlantic Avenue, Boston, Massachusetts 02210 (the "Transferor"), and BRI OP
----------
LIMITED PARTNERSHIP, a Delaware limited partnership having its principal office
at 470 Atlantic Avenue, Boston, Massachusetts 02210 (the "Partnership").
-----------
Capitalized terms used but not otherwise defined herein shall have the meanings
given them in Section 1.1.
W I T N E S S E T H :
-------------------
WHEREAS, the Transferor is the owner of the fee interest in the Property;
WHEREAS, the Transferor desires to become a limited partner of the
Partnership and in connection therewith to contribute the Property to the
Partnership, and the Partnership desires to admit the Transferor as a limited
partner in the Partnership and to accept such contribution from the Transferor;
and
WHEREAS, in exchange for such contribution, the Transferor desires to
receive Partnership Units in accordance with the terms of this Agreement and the
Partnership Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and
<PAGE>
2
valuable consideration, the receipt, adequacy and sufficiency of which are
hereby acknowledged, the parties hereto, intending legally to be bound, hereby
agree as follows:
ARTICLE I
Definitions
-----------
1.1 Definitions. Except as otherwise herein expressly provided, and in
-----------
addition to any other definitions herein contained, the following terms and
phrases shall have the meanings set forth below:
"Agreement" shall mean this Contribution Agreement, the Exhibits and
---------
Schedules hereto and any amendments to this Contribution Agreement which may
hereafter be executed and delivered by the parties hereto.
"Closing" and "Closing Date" shall have the respective meanings given
------- ------------
them in Section 5.1.
"Closing Documents" shall mean either the "Transferor Closing Documents"
----------------- ----------------------------
as defined in Section 7.1 or the "Partnership Closing Documents" as defined in
-----------------------------
Section 7.2, without distinction between them.
"Commission" shall have the meaning set forth in Section 8.3(F).
----------
"Confirmation" shall have the meaning set forth in Section 5.3(E).
------------
"Consideration" shall have the meaning set forth in Article III.
-------------
<PAGE>
3
"Contracts" shall mean those service, maintenance, construction and other
---------
contracts relating to the use, maintenance, renovation, improvement and
operation of the Property, or any portion thereof (including, without
limitation, leases or installment sale agreements for certain items of personal
property but excluding the Leases), which are listed and described on the
Schedule of Contracts attached hereto as Schedule B (the "Schedule of
---------- -----------
Contracts"), together with any additions thereto, modifications thereof or
- ---------
substitutions therefor hereafter entered into in accordance with the terms of
Section 11.2.
"Cutoff Date" shall mean 11:59 p.m. on the day preceding the Closing
-----------
Date.
"Due Diligence Period" shall mean a period of 30 days from the date
--------------------
hereof during which the Partnership may perform due diligence in respect of the
Property pursuant to Article IV.
"Environmental Laws" shall mean the Resource Conservation and Recovery
------------------
Act (42 U.S.C. (S) 6901 et seq.), as amended by the Hazardous and Solid Waste
------
Amendments of 1984; the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. (S) 9601 et seq.), as amended by the Superfund
------
Amendments and Reauthorization Act of 1986; the Hazardous Materials
Transportation Act (49 U.S.C. (S) 1801 et seq.); the Toxic Substance Control Act
------
(15 U.S.C. (S) 2601 et seq.; the Clean Air Act (42 U.S.C. (S) 9402 et seq.); the
------ ------
Clean Water Act (33 U.S.C. (S) 1251 et seq.); the Federal
------
<PAGE>
4
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. (S) 136 et seq.); the
------
Occupational Safety and Health Act (29 U.S.C. (S) 651 et seq.); and all other
------
applicable federal, state and local environmental laws (including, without
limitation, obligations under the common law), ordinances, orders, rules and
regulations, as any of the foregoing may have been amended, supplemented or
supplanted prior to the Closing Date, relating to regulation or control of
hazardous, toxic or dangerous substances, materials or wastes (collectively,
"Hazardous Materials"), or their handling, storage or disposal or to
- --------------------
environmental health and safety.
"Environmental Reports" shall have the meaning set forth in Section
---------------------
8.4(M).
"Existing Survey" shall have the meaning set forth in Section 4.2.
---------------
"Final Adjustment Date" shall have the meaning set forth in Section 6.1.
---------------------
"Improvements" shall mean all buildings, structures (surface and
------------
subsurface) and other improvements located on the Land including any fixtures
owned by the Transferor which constitute real property under applicable
provisions of law.
"Indemnified Parties" shall have the meaning set forth in Section 8.7(A).
-------------------
"Land" shall mean that certain parcel of real estate listed and described
----
on Schedule A.
----------
<PAGE>
5
"Laws" shall mean applicable laws, ordinances, rules, regulations, orders
----
and requirements of any govern mental authorities having jurisdiction over the
Property.
"Leases" shall mean the leases, tenancies, concessions, licenses and
------
occupancies affecting or relating to the Property which are in effect at the
date hereof, together with any additions thereto, modifications thereof or
substitutions therefor hereafter entered into in accordance with the terms of
Section 11.2.
"Liens" shall mean (i) liens, encumbrances or other title defects on or
-----
affecting the Property and (ii) agreements to give or create any such lien,
encumbrance or other title defect which would be enforceable against the
Partnership or the Property subsequent to the Closing.
"Losses" shall have the meaning set forth in Section 8.7(A).
------
"Mortgage" shall mean the fee mortgage or deed of trust encumbering the
--------
Property, which Mortgage is more particularly described in the Schedule of
Mortgages attached hereto as Schedule C (the "Schedule of Mortgages").
---------- ---------------------
"Notices" shall mean all notices, demands or requests made pursuant to or
-------
under this Agreement.
"Partnership Agreement" shall mean the Amended and Restated Agreement of
---------------------
Limited Partnership of the Partnership dated as of May 1, 1995, as amended by
Amendment No. 1 thereto dated as of October 2, 1995 and as the same may
hereafter be amended from time to time.
<PAGE>
6
"Partnership Unit" shall mean a limited partnership unit in the
----------------
Partnership.
"Party" or "Parties" shall mean the holder of the Mortgage, a party to a
----- -------
Contract, or a Tenant under a Lease, in each case other than the Transferor.
"Permitted Exceptions" shall have the meaning set forth in Section 4.3.
--------------------
"Personalty" shall mean all of the fixtures, machinery, equipment,
----------
building supplies and materials, consumables, inventories, rights and interests
(including, without limitation, those listed in the Schedule of Material
Personalty attached hereto as Schedule D (the "Schedule of Material
---------- --------------------
Personalty")), both tangible and intangible, owned by the Transferor and located
- ----------
in or upon, and used in connection with the operation or maintenance of, the
Property. In further clarification of the foregoing, but without limiting the
generality thereof, the term "Personalty" shall include all right, title and
----------
interest of the Transferor in and to (A) all names, logos, trademarks, trade
names and copyrights pertaining to the Property; (B) all guaranties or
warranties, if any, including, without limitation, performance bonds obtained
by, or for the benefit of, the Transferor, pertaining to the ownership,
construction or development of the Real Property, or any part thereof; and (C)
all booklets and manuals, advertising materials, utility contracts, telephone
exchange numbers and licenses and permits pertaining to the Property.
<PAGE>
7
"Property" shall mean (A) the Real Property, (B) the Personalty, (C) the
--------
rights and interests of the Transferor under the Leases, and (D) the rights and
interests of the Transferor under the Contracts.
"Property Management Company" shall mean Berkshire Realty Enterprises
---------------------------
Limited Partnership, a Massachusetts limited partnership.
"Real Property" shall mean the Land and the Improvements, together with
-------------
(A) all of the estate, right, title and interest of the Transferor therein, and
in and to any land lying in the beds of any streets, roads or avenues, open or
proposed, public or private, in front of or adjoining the Land to the center
lines thereof, and in and to any awards to be made in lieu thereof and in and to
any unpaid awards for damage to the foregoing by reason of the change of grade
of any such streets, roads or avenues; and (B) all easements, rights, licenses,
privileges, rights-of-way, strips and gores, hereditaments and other such rights
and interests appurtenant to the foregoing.
"Renovation Work" shall have the meaning set forth in Section 6.10.
---------------
"Rent Arrearages" shall mean Rents due and payable prior to but unpaid as
---------------
of the Cutoff Date, but shall not include additional amounts, if any, due after
the Closing Date by reason of year-end or other adjustments provided for in the
Leases.
<PAGE>
8
"Rents" shall mean fixed, additional and other amounts payable to the
-----
Transferor by any Party under a Lease.
"SEC Filings" shall have the meaning set forth in Section 8.3(F).
-----------
"Section 7.1(M) Certificate" shall have the meaning set forth in Section
--------------------------
7.1(M).
"Section 7.2(G) Certificate" shall have the meaning set forth in Section
--------------------------
7.2(G).
"Tenants" shall mean tenants, subtenants and/or occupants under the
-------
Leases.
"Title Company" shall mean Lawyers Title Insurance Corporation or such
-------------
other title insurance company as is reasonably satisfactory to the Partnership
and the Transferor.
"Title Insurance Commitment" shall have the meaning set forth in Section
--------------------------
4.3.
1.2 References. All references in this Agreement to particular
----------
sections or articles shall, unless expressly otherwise provided, or unless the
context otherwise requires, be deemed to refer to the specific Sections or
Articles in this Agreement, and any references to "Schedule" or "Exhibit" shall,
-------- -------
unless otherwise specified, refer to one of the Schedules or Exhibits annexed
hereto and, by such reference, made a part hereof. The words "herein,"
------
"hereof," "hereunder," "hereinafter," "hereinabove" and other words of similar
------ --------- ----------- -----------
import refer to this Agreement as a
<PAGE>
9
whole and not to any particular section, subsection or article hereof.
1.3 Gender and Number. Words of any gender shall include the other
-----------------
gender and the neuter. Whenever the
singular is used, the same shall include the plural wherever appropriate, and
whenever the plural is used, the same shall also include the singular wherever
appropriate.
ARTICLE II
Contribution
------------
2.1 Contribution Covenant. In consideration of the mutual covenants
---------------------
and agreements hereinafter set forth, and in accordance with Sections 4.2 and
9.3 of the Partnership Agreement, but subject to the satisfaction or waiver by
the Transferor of the conditions to the Transferor's obligations set forth
herein, the Transferor agrees to contribute and convey all of its fee and other
interests in the Property to the Partnership on the Closing Date, and the
Partnership, subject to the satisfaction or waiver by the Partnership of the
conditions to the Partnership's obligations set forth herein, agrees to accept
such interests from the Transferor, subject to and in accordance with the terms,
provisions, covenants and conditions more particularly set forth in this
Agreement and the Partnership Agreement. The Transferor agrees that the
Partnership may assign its rights under this Agreement to an affiliate of the
Partnership.
<PAGE>
10
2.2 Condition of the Property. In reliance on the specific
-------------------------
representations and warranties hereinafter set forth, if the Closing occurs, the
Partnership agrees to accept title to the Property in its condition "as-is" on
the date hereof, reasonable wear and tear between the date hereof and the
Closing Date excepted, and without representation or warranty from the
Transferor or any other person or entity regarding the condition thereof, except
as may be expressly set forth in this Agreement or the Transferor Closing
Documents.
ARTICLE III
Consideration
-------------
The Transferor and the Partnership agree that the consideration (the
"Consideration") for the Property to be contributed by the Transferor to the
- --------------
Partnership pursuant to this Agreement shall be one million six hundred thousand
(1,600,000) Partnership Units, 1,056,500 of which shall be issued to the
Transferor at the Closing, 443,500 of which shall be issued to the Transferor on
January 2, 1997 and 100,000 of which shall be issued to the Transferor on
January 2, 1998.
ARTICLE IV
Inspection by the Partnership
-----------------------------
4.1 Delivery of Documents. On or prior to ten (10) days following the
---------------------
date hereof (except as otherwise provided in this Section 4.1), the Transferor
shall deliver
<PAGE>
11
to the Partnership copies of all of the following items, to the extent such
items are in the Transferor's or its agents' possession or control and to the
extent such items have not been delivered to the Partnership prior to the
execution of this Agreement:
(A) any notices, correspondence, licenses or agreements with, to or
from any governmental or quasi-governmental authority having jurisdiction over
the Property;
(B) any soils reports, environmental studies and building plans for
the Property;
(C) all tax statements and operating statements for the Property for
the last three (3) years;
(D) a copy of the Mortgage, together with the note secured thereby,
the Regulatory Agreement and all other documents executed in connection
therewith;
(E) a copy of the most recent quarterly financial statements for the
Property; and
(F) a copy of the pleadings in the litigations listed on Schedule G
annexed hereto, other than those which are covered by policies of liability
insurance. In addition, promptly following the Partnership's specific request
therefor, the Transferor shall deliver to the Partnership any and all additional
data, plans, geological and engineering studies or reports, zoning information,
water and sewer studies, topographic maps, platting and other materials and any
other information and agreements
<PAGE>
12
relating to the Property or any portion thereof which are in the Transferor's or
its agents' possession or control.
4.2 Survey. During the Due Diligence Period, the Partnership shall have
------
the right, at its expense, to have a survey of the Property prepared or to have
updated the existing survey of the Property dated March 2, 1994 prepared by
Joseph J. LeVasseur (the "Existing Survey"). The Partnership shall have until
---------------
the end of the Due Diligence Period to examine the new or updated survey. If
the Partnership has any objections to such new or updated survey, the
Partnership shall notify the Transferor of such objections within five (5) days
after the expiration of the Due Diligence Period, and the Transferor shall have
thirty (30) days within which to correct such matter(s) objected to, if such
correction is feasible. If the Transferor fails to correct such matters in a
manner reasonably satisfactory to the Partnership within such thirty (30) day
period (it being understood that the Transferor shall have no obligation to
expend any funds to do so), this Agreement shall terminate ten (10) days after
the expiration of such thirty (30) day period and be of no further force or
effect unless, within ten (10) days after the expiration of such thirty (30) day
period, the Partnership gives the Transferor Notice waiving the objections, in
which case this Agreement shall remain in full force and effect. If the
Partnership does not deliver Notice to the Transferor of objection to such new
or updated survey as provided herein within five
<PAGE>
13
(5) days after the expiration of the Due Diligence Period or, having given such
Notice thereafter waives in writing its objections or proceeds with and
completes the Closing, the Partnership shall be conclusively deemed to have
accepted and approved the state of facts shown on such new or updated survey.
In no event shall the Partnership have the right to object to any matter which
is shown on such new or updated survey if such matter is also shown on the
Existing Survey, a true copy of which has been furnished to the Partnership.
4.3 Title Insurance Commitment.
--------------------------
During the Due Diligence Period, the Partnership shall order at its
expense, a current title insurance commitment covering the Property issued by
the Title Company (the "Title Insurance Commitment"). The Title Insurance
--------------------------
Commitment shall commit to insure good and marketable title in fee simple to the
Property in the Partnership subject only to (i) current non-delinquent general
real property taxes and assessments, (ii) the Mortgage, (iii) exceptions 2
through 14 on Schedule B of Loan Policy of Title Insurance No. 135-00-089890
dated March 14, 1994 issued by Lawyers Title Insurance Corporation to Berkshire
Mortgage Finance Limited Partnership and/or the Secretary of Housing and Urban
Development, a true copy of which policy has been furnished to the Partnership,
and (iv) such other easements, restrictions and rights-of-way as the Partnership
shall determine in its sole judgment do not
<PAGE>
14
adversely affect the value of the Property or the Partnership's intended use of
the Property. In no event shall the Title Insurance Commitment or any policy of
title insurance issued pursuant thereto contain any exception for liens of
income, franchise or like taxes payable by the Transferor. If the Title
Insurance Commitment obtained by the Partnership shall contain any exceptions
from coverage other than those specified in clauses (i), (ii) and (iii) above
which the Partnership determines to be unacceptable, the Partnership shall
notify the Transferor of such matters within five (5) days after the expiration
of the Due Diligence Period, and the Transferor shall have thirty (30) days
within which to correct the matter(s) so objected to. If the Transferor fails
to correct such matters within such thirty (30) day period (it being understood
that the Transferor shall have no obligation to expend funds to do so except to
delete monetary liens or encumbrances) this Agreement shall terminate ten (10)
days after the expiration of such thirty (30) day period and be of no further
force or effect unless, within ten (10) days after the expiration of such thirty
(30) day period, the Partnership gives the Transferor Notice waiving the
objections, in which case this Agreement shall remain in full force and effect.
If the Partnership does not deliver Notice to the Transferor of objection to the
Title Insurance Commitment as provided herein within five (5) days after the
expiration of the Due Diligence Period or, having given such Notice thereafter
waives in writing its objections or proceeds with and
<PAGE>
15
completes the Closing, the Partnership shall be conclusively deemed to have
accepted and approved all matters set forth in the Title Insurance Commitment.
The exceptions specified in clauses (i), (ii) and (iii) above and any other
exceptions on the Title Insurance Commitment to which the Partnership does not
object or to which the Partnership objects but waives its objection pursuant to
this subsection shall be deemed to be "Permitted Exceptions." The premiums for
--------------------
any policy of title insurance procured by the Partnership shall be paid for by
the Partnership.
4.4 Inspection.
----------
(A) Subject to the rights of the Tenants under the Leases, the
Partnership and its authorized agents and representatives may, from time to time
during regular business hours and on reasonable prior notice to the Transferor,
inspect all areas of the Property for the purpose of examining the same and
conducting such tests and observations and compiling such information as the
Partner ship, in its sole discretion, may deem appropriate. No such inspection,
however, shall constitute a waiver or relinquishment on the part of the
Partnership of its right to rely upon the covenants, representations, warranties
or agreements made by the Transferor in this Agreement. Should the Partnership
discover during any such inspection anything adverse such that the Partnership
decides, in its sole judgment, that it no longer desires to proceed with the
<PAGE>
16
transactions contemplated hereby, the Partnership shall have the right to
terminate this Agreement by giving Notice of its election to do so to the
Transferor within five (5) days after the expiration of the Due Diligence
Period, and upon the giving of such Notice this Agreement shall be of no further
force or effect. If the Partnership shall fail to exercise such termination
right within five (5) days after the expiration of the Due Diligence Period, the
Partnership shall be conclusively deemed to have waived any right it may have
had to terminate this Agreement pursuant to this Section 4.4(A). The
Partnership shall pay when due all fees and expenses incurred in the performance
of any such inspections, tests or observations and keep the Property free of any
Liens therefor.
(B) The Transferor shall permit the Partnership's authorized agents
and representatives (including its accountants) to examine the Transferor's
books, financial records, Contracts, Leases and Tenant files pertaining to the
operation of the Property prior to the Closing. The Partnership's agents and
representatives shall be permitted access to such records and files during
regular business hours. To the extent that any of the Transferor's financial
records relating to the Property have been audited, the Transferor agrees to
deliver any reports relating to such audits to the Partnership. The Transferor
shall provide the Partnership with such information as the Transferor may have
with respect to actual expenditures made for all repairs,
<PAGE>
17
maintenance, operation and upkeep of the Property, including, without
limitation, all taxes and utility payments made within three (3) years prior to
the Closing and dates of construction, installation and major repairs to the
Property. Except as provided in the proviso contained in Section 12.2, all
information obtained by the Partnership or its agents and representatives
pursuant to Sections 4.1, 4.4(A) and 4.4(B) shall be treated as confidential,
shall not be disclosed to others until and unless the Closing occurs, and if
such information is in written form, such information shall be returned to the
Transferor if the Closing does not occur.
(C) In the event that during the Due Diligence Period the Partnership
determines that there are Contracts which it does not desire to assume the
Partnership may give Notice to the Transferor within five (5) days after the
expiration of the Due Diligence Period setting forth a description of such
Contracts, and at Closing the Partnership shall not be required to accept and
assume the Contracts listed in such Notice but shall be required to accept and
assume all of the other Contracts. If the Partnership fails to give such Notice
to the Transferor within five (5) days after the expiration of the Due Diligence
Period, at the Closing the Partnership shall be obligated to accept and assume
all of the Contracts. In no event shall the Partnership have the right to give
the Notice provided for in this Section 4.4(C) in respect of (i)
<PAGE>
18
any Contract which can be terminated on no more than one month's notice without
penalty or (ii) any of the Contracts which are identified on Schedule B hereto
as having been entered into in connection with the renovation work currently
being undertaken at the Property.
(D) The Partnership shall indemnify the Transferor against and from
all damage to the Property and/or claims of Tenants or other third parties
resulting from any entry on the Property by the Partnership or any agent,
contractor, consultant or other representative of the Partnership, or any tests
or other activities conducted in or on the Property by them, or any of them,
together with all expenses incurred by the Transferor by reason thereof
including, without limitation, reasonable attorneys' fees and disbursements;
provided, however, that nothing contained herein is intended to obligate the
Partnership to indemnify, pay or otherwise reimburse the Transferor for any
costs of remediation or clean-up, fines, penalties, assessments or similar
charges for any condition existing at the Property solely by reason of the fact
that the Partnership or its agents, contractors, consultants or other
representatives discover the existence of such condition during the course of
conducting tests or other activities on the Property. The provisions of this
Section 4.4(D) shall survive the Closing or any termination of this Agreement;
provided, however, that no claim by the Transferor under this Section 4.4(D) for
damage to the Property (as opposed to claims
<PAGE>
19
under this Section 4.4(D) by reason of the assertion against the Transferor of
claims by Tenants or other third parties) shall be made if the Closing occurs or
more than 90 days after the termination of this Agreement if the Closing does
not occur. If the Closing occurs, the Partnership shall not have any claim
against the Transferor by reason of any damage to the Property of the nature
specified above or by reason of any claim against which the Partnership is
indemnifying the Transferor hereunder.
ARTICLE V
Closing
-------
5.1 Closing Procedure. Provided that all of the other conditions to
-----------------
each party's obligations to close the transactions provided for herein have been
satisfied or waived, the Closing shall take place at 10:00 a.m., at the offices
of the Partnership, on a date (which shall be a business day) designated by the
Transferor in a Notice given to the Partnership, which Notice shall be given by
the Transferor at least five (5) business days prior to the Closing Date and
within ten (10) days after the Transferor shall have received the written
consent of the holder of the Mortgage to the transfer of the Property to the
Partnership subject to the Mortgage. The consummation of the transactions
contemplated hereby with respect to the Property shall be referred to herein as
the "Closing" and
-------
<PAGE>
20
the date on which the Closing occurs shall be referred to herein as the "Closing
-------
Date."
- ----
5.2 Partnership Conditions to Closing. Without limiting any other
---------------------------------
conditions to Closing of the Partnership contained herein, the obligation of the
Partnership to proceed with the Closing of the transactions contemplated by this
Agreement is expressly conditioned upon the fulfillment by and as of the Closing
Date of each of the conditions listed below, any or all of which may be waived
by the Partnership:
(A) the Transferor Closing Documents shall have been executed (if
applicable) and delivered to the Partnership;
(B) the Partnership shall be permitted by all applicable Laws to
issue the Partnership Units to the Transferor without undue delay or expense in
order to comply with such Laws;
(C) all representations and warranties of the Transferor set forth in
this Agreement shall be true and correct in all material respects on and as of
the Closing Date and all obligations required to be performed or complied with
by the Transferor hereunder on or prior to the Closing shall have been performed
or complied with in all material respects; and
(D) the Transferor shall have obtained all consents required to
consummate the transactions contemplated hereby, including, without limitation,
the requisite
<PAGE>
21
consent of the partners of the Transferor, the consent of U.S. Trust Company (if
the failure to obtain such consent would adversely affect the Partnership in any
respect) and the consent provided for in Section 5.4, as well as the estoppel
certificate from such holder provided for in Section 7.3.
5.3 Transferor Conditions to Closing. Without limiting any other
--------------------------------
conditions to Closing of the Transferor contained herein, the obligation of the
Transferor to proceed with the Closing of the transactions contemplated by this
Agreement is expressly conditioned upon the fulfillment by and as of the Closing
Date of each of the conditions listed below, any or all of which may be waived
by the Transferor:
(A) the Partnership Closing Documents shall have been executed (if
applicable) and delivered to the Transferor;
(B) the Partnership shall be permitted by all applicable Laws to
issue the Partnership Units to the Transferor without undue delay or expense in
order to comply with such Laws;
(C) all representations and warranties of the Partnership set forth
in this Agreement shall be true and correct in all material respects on and as
of the Closing Date and all obligations required to be performed or complied
with by the Partnership hereunder on or before the
<PAGE>
22
Closing Date shall have been performed or complied with in all material
respects;
(D) the Transferor shall have obtained all consents required for it
to consummate the transactions provided for herein, including, without
limitation, the consent of U.S. Trust Company, an indirect lender to the
Transferor, the requisite consent of the partners of the Transferor, and the
consent provided for in Section 5.4; and
(E) the Transferor shall have received the written confirmation from
the general partner of the Partnership (the "Confirmation") substantially in the
form annexed hereto as Exhibit 3.
5.4 Requirement for Mortgagee Consent. This Contribution Agreement and
---------------------------------
the consummation of the transactions provided for herein are expressly
conditioned upon the preliminary approval of HUD of such transactions as set
forth in Form HUD 92266, Application for Transfer of Physical Assets, and
-------------------------------------------
supporting documents submitted to HUD. No transfer of any interest in the
Property under this Contribution Agreement shall be effective prior to such HUD
approval. The Partnership will not take possession of the Property or assume
benefits of the ownership of the Property prior to such approval by HUD. The
Partnership, its successors and assigns, shall have no right upon any breach by
the Transferor hereunder to seek damages, directly or indirectly, from the
Property which is the subject of this transaction, including from any assets,
rents, issues or
<PAGE>
23
profits thereof, and the Partnership shall have no right to effect a lien upon
the Property or the assets, rents, issues or profits thereof.
ARTICLE VI
Apportionments and Payments
---------------------------
6.1 Items to Be Apportioned. The following items shall be apportioned
-----------------------
between the Transferor and the Partner ship at the Closing as of the Cutoff
Date, and the net amount thereof shall be paid in cash to the Transferor or the
Partnership, as the case may be, at the Closing, subject to further adjustment
if required subsequent to the Closing, but where expressly so indicated in
subsequent sections of this Article VI, not beyond nine (9) months after the
Closing (the "Final Adjustment Date"), as hereinafter provided:
---------------------
(A) real property taxes and assessments (or installments thereof) on
the basis of the fiscal year for which payable;
(B) water rates and charges;
(C) sewer taxes and rents;
(D) interest and mortgage insurance premiums payable under or in
respect of the Mortgage;
(E) annual permit, license and inspection fees, if any, on the basis
of the fiscal year for which levied;
<PAGE>
24
(F) fuel oil and liquid propane gas, if any, at the cost per gallon or
cubic foot most recently charged to the Transferor with respect to the Property,
based on the supplier's measurements thereof, plus sales taxes thereon;
(G) Rents, including prepaid Rents;
(H) amounts payable by the Transferor under the Contracts (except
those Contracts which the Partnership has rejected by Notice to the Transferor
given within five (5) days after the expiration of the Due Diligence Period
pursuant to Section 4.4(C) and excluding leasing commissions, which shall be
paid as hereinafter provided, and amounts payable under Contracts identified on
Schedule B hereto as having been entered into in connection with the renovation
work currently being undertaken at the Property, which amounts shall be adjusted
as provided in Section 6.10);
(I) salaries, wages and other employee benefits and charges
(including accrued vacation pay, pension contributions and other similar
benefits) payable or accrued to on-site employees of the Property retained by
the Partnership; and
(J) except as set forth below, all other items customarily apportioned
in connection with the transfer of similar properties similarly located.
6.2 Re-Proration of Impositions. If the real property taxes, water
---------------------------
rates and charges and sewer taxes and rents are not finally fixed before the
Cutoff Date, the
<PAGE>
25
apportionments thereof made at the Closing shall be based upon the real property
taxes, water rates and charges and sewer taxes and rents assessed for the
preceding fiscal year or applicable billing period, and after the real property
taxes, water rates and charges and sewer taxes and rents are finally fixed, the
Transferor and the Partnership shall make a recalculation of the apportionment
of the same, and the Transferor or the Partnership, as the case may be, shall
promptly make an appropriate settlement with the other based upon such
recalculation.
6.3 Installment Payment of Assessments. In furtherance of Section
----------------------------------
6.1(A), if any real property assessment affects the Property at the Closing and
such real property assessment is payable in installments (whether at the
election of the Transferor or otherwise), the Transferor and the Partnership
shall apportion pursuant to Section 6.1(A) the annual installment relating to,
or payable over, the fiscal period of the assessing authority, part of which is
included within the period prior to the Cutoff Date and part of which is
included in the period after the Cutoff Date, as of the Cutoff Date, and the
interest payable on the unpaid balance of such assessment on account of such
fiscal period. The Partnership shall accept title to the Property subject to
the obligation to pay all installments of such assessment, and all interest
thereon, allocable to subsequent fiscal periods of the assessing authority.
<PAGE>
26
6.4 Utilities. The Transferor shall cooperate with the Partnership in
---------
the transfer of electricity, gas, water, sewer and other utility services from
the Transferor's name to the name of the Partnership as of the Closing Date.
If such utility services shall not have been transferred to the Partnership's
name for the Property effective as of the Closing Date, then, at the Closing,
water rates and charges, sewer taxes and rents and gas and electricity charges
for the Property shall be prorated pursuant to Section 6.1, based upon the per
diem charges obtained by using the most recent period for which bills shall then
be available. Following the receipt of the bills covering the period in which
the Closing occurs, the apportionment of such charges shall be recalculated and
the apportionment between the Transferor and the Partnership readjusted and
settled based upon such bills.
6.5 Rent Arrearages. Rents collected or received after the Closing
---------------
Date from a Tenant who, as of the Cutoff Date, was in arrears in the payment of
Rents shall be applied as follows: (A) in the case of Rents received from a
Tenant who, as at the Cutoff Date, was not more than one (1) month in arrears in
the payment of Rents, the Rents so collected shall be applied first to such
arrears and then to any other amounts which may then be due to the Partnership;
and (B) in the case of Rents received from a Tenant who, as at the Cutoff Date,
was more than one (1) month in arrears in the payment of Rents, the Rents so
collected shall first
<PAGE>
27
be applied to any amounts then due to the Partnership and any balance remaining
shall be applied to the arrears. All costs and expenses incurred by the
Partnership in bringing any action or proceeding to collect Rent Arrearages from
any Tenant who is delinquent on the Closing Date shall be borne by the
Partnership and the Transferor in proportion to the collected amounts to which
each may be entitled and the Transferor's portion may be deducted from the
amounts other wise to be remitted to the Transferor. Rent Arrearages collected
after the Final Adjustment Date shall belong to the Partnership; provided,
--------
however, that if the Transferor or the Partnership shall institute a legal
- -------
action or proceeding to collect any portion of such Rent Arrearages prior to the
Final Adjustment Date, the Transferor shall retain the right to receive its
share of such Rent Arrearages, net of its share of litigation costs and
expenses, if collected. The Partnership shall pay to the Transferor, promptly
after receipt, the Transferor's share of any amounts paid to the Partnership by
any Tenant which are first due after the Closing on account of year-end
adjustments, escalation payments, percentage rent or other items.
6.6 Security Deposits. Attached hereto as Schedule E is a Schedule of
----------------- ----------
Leases (the "Schedule of Leases"), which Schedule sets forth, among other
------------------
things, the unapplied portions of all security, pet and other deposits which
have been deposited with the Transferor or its agents
<PAGE>
28
by any Tenants. The Transferor shall (A) pay to the Partnership in cash the
aggregate amount of the security, pet and other deposits set forth on such
Schedule, as updated at the Closing pursuant to Section 7.1(M), or (B) if
applicable, assign to the Partnership the bank accounts with respect to such
deposits, in either case together with any interest earned thereon which, under
the terms of the applicable Leases or applicable provisions of Law, must be paid
to Tenants. The Partnership hereby indemnifies and agrees to defend the
Transferor for, and hold the Transferor harmless from and against, any and all
claims, liabilities, costs and expenses (including, without limitation,
reasonable attorneys' fees and disbursements) imposed upon or incurred by the
Transferor with respect to the deposits (and the interest thereon, if any) paid
over or assigned to the Partnership or the application thereof by the
Partnership subsequent to the Closing Date. The Transferor hereby indemnifies
and agrees to defend the Partnership for, and hold the Partnership harmless from
and against, any and all claims, liabilities, costs and expenses (including,
without limitation, reasonable attorneys' fees and disbursements) incurred by
or imposed upon the Partnership in respect of claims made by Tenants with
respect to any deposits (and the interest thereon, if any) held under Leases to
which the Transferor and such Tenants are parties and which are not paid or
assigned to the Partnership, or with respect to any variance between the amount
of any
<PAGE>
29
deposit or interest paid or assigned to the Partnership and the amount claimed
by the Tenant in question to have been deposited by it or due it as interest, or
with respect to the amount of any deposit applied to the payment of any of a
Tenant's obligations prior to the Closing. The Transferor shall retain as its
property any interest accrued prior to the Closing Date on any deposits except
to the extent that such interest is required to be paid to any Tenants pursuant
to their respective Leases or under applicable provisions of Law. The
indemnities provided for in this Section 6.6 shall survive the Closing.
6.7 Reserves and Deposits. The Partnership understands that certain
---------------------
escrow deposits have been made by the Transferor with the holder of the Mortgage
or its agent or designee for real property taxes and assessments, casualty and
liability insurance premiums, mortgage insurance premiums, repairs and
replacements and other items. At the Closing the Partnership shall substitute
its own escrow deposits for those then being held by the holder of the Mortgage
or its agent or designee. As to any such escrow deposits which are in cash or
cash equivalents, the Partnership shall deposit a like amount of cash or cash
equivalents acceptable to such holder. As to any such escrow deposits which are
in the form of a letter of credit, the Partnership shall substitute for such
letter of credit a like amount of cash or its own letter of credit or cash
equivalents in like amount acceptable to the holder of the
<PAGE>
30
Mortgage. Upon the making of such escrow deposits by the Partnership, the
Transferor shall have the right to obtain the redelivery to it by the holder of
the Mortgage or its agent or designee of the escrow deposits previously made by
it with said holder or its agent or designee, together with all interest earned
thereon which is payable to the Transferor.
6.8 Transfer Taxes. The Transferor and the Partnership shall each pay
--------------
one-half of any real property transfer taxes and documentary stamps imposed by
the state, county and/or municipality in which the Property is located in
connection with the contribution or transfer of the Real Property to the
Partnership and shall cause the same to be paid, either directly to the
appropriate governmental agency or agencies or to the Title Company for payment
by the Title Company to the appropriate authorities, at the Closing. The
Partnership shall pay any sales tax payable upon the contribution or transfer of
the Personalty to the Partnership. At the Closing, and in addition to the
delivery of any required Closing Documents, the Transferor and the Partnership
shall execute, acknowledge and deliver such returns, questionnaires,
certificates, affidavits, declarations and other documents which may be required
in connection with the payment of transfer taxes, documentary stamps, sales
taxes and other taxes, fees or charges imposed by any governmental agency in
connection with the transactions contemplated hereby, and shall complete, sign
<PAGE>
31
and swear to the same as may be necessary. The Partnership shall pay all
recording charges or fees other than with respect to any instruments recorded in
order to eliminate title defects, the recording charges or fees for which shall
be paid by the Transferor.
6.9 Collection of Rent. Until the Final Adjustment Date, the
------------------
Partnership shall use its reasonable efforts to collect from any Tenants in
possession the Rent Arrearages payable with respect to the calendar year in
which the Closing Date occurs and any prior calendar year; provided, however,
-------- -------
that reasonable efforts shall not require the Partnership to institute legal
proceedings against any such Tenant. Until the Final Adjustment Date, the
Partnership shall not waive or settle any claims for any such amounts in whole
or in part without the prior written consent of the Transferor (which consent
shall not be unreasonably withheld or delayed). Collection costs shall be
charged against amounts collected and charged to the parties hereto in the
proportion in which each is entitled to the proceeds of such collection;
provided, however, that collection costs shall in no event include the regular
fees and charges payable by its Partnership to its property manager. If the
Partnership is unable to collect any such amounts which are the property of the
Transferor within one hundred twenty (120) days after the Closing Date, the
Transferor shall have the right to seek collection of such amounts due to the
Transferor, which right shall expire on
<PAGE>
32
the Final Adjustment Date unless the Transferor or the Partnership shall have
instituted a legal action or proceeding as set forth in Section 6.5; provided,
--------
however, that in seeking to collect any such Rent Arrearages, the Transferor
- -------
shall not be entitled to terminate any Lease or otherwise seek any remedy other
than a money judgment against the delinquent party.
6.10 Renovation Work. The Partnership understands that the
---------------
Transferor is in the process of performing certain renovation work at the
Property (the "Renovation Work"). The Renovation Work consists of two parts,
the exterior work and the interior work. The exterior work is being performed
pursuant to the Contracts listed in Schedule B annexed hereto under the
subheading "Exterior Renovation Work". The interior work consists of the
renovation of apartment units and interior common areas. This work includes
replacement of appliances and carpets in apartment units, repainting, vinyl
flooring, replacement of cabinets and vanities in bathrooms, new hardware and
the like as well as the upgrading of the clubhouse. No Contracts have been
entered into with respect to this work. A job cost summary report for the
interior work is included as part of Schedule B. It is agreed that the
Transferor shall be responsible for paying the cost of all Renovation Work
performed on or before September 30, 1995 and that if the Closing occurs, the
Partnership shall be responsible for paying the cost of all Renovation Work
performed on or after
<PAGE>
33
October 1, 1995. At the Closing, the Transferor shall submit to the Partnership
a schedule, together with such other substantiating materials as the Partnership
may reasonably request, setting forth the aggregate amount expended by the
Transferor for Renovation Work performed on or before September 30, 1995 and on
or after October 1, 1995, which schedule shall set forth, in reasonable detail,
a description of such work and detail each payment made by the Transferor for
such work. Such schedule shall be certified as true and correct by a general
partner of the Transferor. Subject to the Partnership's verification of the
aggregate amount set forth in such schedule, at the Closing the Partnership
shall pay to the Transferor, in cash, the aggregate amount expended by the
Transferor for Renovation Work performed on or after October 1, 1995, as set
forth in such schedule. In order to facilitate the making of the adjustment
provided for in this Section 6.10, on the tenth (10th) day of each month,
commencing on April 10, 1996, and until the Closing occurs, the Transferor shall
submit to the Partnership the schedule and other materials called for by this
Section 6.10 for the period ending on the last day of the month preceding the
month in which such tenth (10th) day occurs.
6.11 Partnership Distributions. It is understood that the Partnership
-------------------------
makes distributions on the Partnership Units for three-month periods which are
the same as the periods for which the Partnership's general partner declares
<PAGE>
34
dividends. The parties hereto agree that if the Closing occurs other than on
the first day of any such three-month period, the first distribution to be made
to the Transferor after the Closing on the Partnership Units received by the
Transferor at the Closing shall be prorated and the Transferor shall receive a
fraction of such distribution, the numerator is the number of days remaining in
such three-month period on and after the Closing and the denominator of which is
the number of days in such three-month period.
6.12 Settlement of Adjustments.
-------------------------
(A) Any payments which are due on or after the Closing and are
attributable to periods on or before the Cutoff Date will be apportioned within
thirty (30) days of receipt of such payment and the net amount of any such
adjustments shall be paid to the Partnership or to the Transferor, as the case
may be.
(B) Any errors or omissions in computing apportionments at the
Closing shall be corrected promptly after their discovery.
(C) Net prorations and adjustments made pursuant to this Article
VI as of the Closing Date and from time to time after the Closing shall be made
in cash.
6.13 Inspection of Books and Records. Subsequent to the Closing, upon
-------------------------------
request of the Partnership, the Transferor shall from time to time make
available for inspection by the Partnership or its designee, at the place or
places where they are regularly kept and maintained,
<PAGE>
35
during reasonable business hours, the records and books of account relating to
the Property and, during such inspection, shall permit extracts and copies to be
made from said records and books of account, at the Partnership's expense. The
Transferor shall have the right from time to time subsequent to the Closing, at
the Transferor's expense, to examine, audit and make copies of so much of the
Partnership's records and books of account for the Property which relate to
periods prior to the Closing Date or the apportionments made or to be made at
and subsequent to the Closing pursuant to this Article VI.
6.14 Schedule of Rent Arrearages. Attached hereto as Schedule F is a
--------------------------- ----------
Schedule of Rent Arrearages (the "Schedule of Rent Arrearages"), which Schedule
---------------------------
sets forth each of the Tenants of the Property and the items of Rents with
respect to which each Tenant is in arrears as of the date hereof, the amount of
each item and the period of such arrearage.
6.15 Survival. The provisions of this Article VI shall survive the
--------
Closing.
ARTICLE VII
Closing Documents
-----------------
7.1 Transferor Closing Documents. At the Closing (or subsequent
----------------------------
thereto with respect to documents contemplated by subsection (N) below), and
simultaneously with the issuance to the Transferor of the Partnership Units by
the
<PAGE>
36
Partnership (plus payment of any sums which the Partnership has agreed herein to
pay to the Transferor at the Closing, but less any credits to which the
Partnership may be entitled hereunder), and simultaneously with the
Partnership's delivery of all of the Partnership Closing Documents required to
be delivered by the Partnership hereunder, the Transferor shall deliver, or
cause to be delivered, the following documents to the Partnership (herein
referred to collectively as the "Transferor Closing Documents"):
----------------------------
(A) a special warranty deed, duly executed and acknowledged by the
Transferor and in proper statutory form for recording, limiting the Transferor's
covenants and warranties under the deed to the Transferor's own acts and deeds
and those of persons claiming by, through or under the Transferor, and not
otherwise, so as to convey the entire fee simple estate in the Real Property
free and clear of all Liens, except for the Permitted Exceptions (such deed may,
by its terms, limit enforcement of such covenants and warranties to the assets
of the Transferor);
(B) an assignment of the Transferor's right, title and interest under
the Leases for the Property, in form and substance reasonably satisfactory to
the Partnership, duly executed by the Transferor;
(C) searches conducted by an independent firm reasonably satisfactory
to the Partnership showing no Uniform Commercial Code filing (other than in
respect of the Mortgage or any leased Personalty) or judgment or tax lien
<PAGE>
37
filings against the Transferor with respect to the Property, which searches
shall be dated not earlier than thirty (30) days prior to the Closing Date and
the cost of which shall be borne by the Transferor;
(D) an affidavit of the Transferor stating its U.S. taxpayer
identification number and that it is a "United States person," as defined by
Internal Revenue Code section 1445(f)(3) and section 7701(b);
(E) the estoppel certificate provided for in Section 7.3 and the
certificates or other evidence provided for in Section 6.10;
(F) a bill of sale from the Transferor with warranties of title and
against encumbrances (except for Permitted Exceptions and leases of Personalty)
so as to transfer the Personalty to the Partnership free and clear of all Liens
except for Permitted Exceptions and leases of Personalty, in form and substance
reasonably satisfactory to the Partnership, duly executed by the Transferor;
(G) an assignment of the Contracts (except those Contracts which the
Partnership has rejected by Notice from the Partnership to the Transferor within
five (5) days after the expiration of the Due Diligence Period pursuant to
Section 4.4(C)) and all guarantees, warranties, licenses, permits and
certificates of occupancy relating to the Property and Personalty, to the extent
the same are assignable (which assignment, except with respect to the Contracts,
may be general in nature and need not list or
<PAGE>
38
refer to specific guarantees, warranties, licenses, permits or certificates of
occupancy), in form and substance reasonably satisfactory to the Partnership,
duly executed by the Transferor;
(H) a certificate issued by the Secretary of State of the state of
formation of the Transferor dated not earlier than fifteen (15) days prior to
the Closing Date certifying the good standing or valid existence of the
Transferor;
(I) a certificate of the general partners of the Transferor in which
they certify that, under the terms of the limited partnership agreement of the
Transferor, as amended, the General Partners of the Transferor have the
authority to contribute and transfer the Property to the Partnership and that
all required consents of partners (limited and general) to such contribution and
transfer have been obtained;
(J) written notices from the Transferor (i) to the holder of the
Mortgage informing it of the Closing and the conveyance and assignments herein
provided for; (ii) to the Tenants advising them of the change of ownership and
directing them to pay Rent and other charges under their respective Leases for
all periods from and after the Closing Date as directed by the Partnership; and
(iii) to each Party to each of the Contracts assigned to the Partnership
advising of the transfer and assignment of the Transferor's interest in the
Contracts to the Partnership
<PAGE>
39
and directing that future inquiries be made directly to the Partnership;
(K) all approvals or consents required to permit the transactions
contemplated hereby, including, without limitation, the consent required under
the Mortgage;
(L) an amendment to the Partnership Agreement in the form of Exhibit
1, duly executed by the Transferor;
(M) a certificate of the Transferor, signed by the general partners of
the Transferor, dated the Closing Date, stating that the representations and
warranties made by the Transferor in this Agreement, as updated pursuant to
Section 8.4(W), are true and correct in all material respects on and as of the
Closing Date as if made on and as of such date (the "Section 7.1(M)
--------------
Certificate"), together with an updated set of Schedules B, D, E, F, G and I
- -----------
attached to such certificate; and
(N) such other documents, instruments or agreements which the
Transferor is required to deliver to the Partnership pursuant to any other
provisions of this Agreement or which the Partnership may, either at or
subsequent to the Closing, deem reasonably necessary in order to consummate the
transactions contemplated by this Agreement or to better vest in the Partnership
title to the Property. The provisions of this Section 7.1(N) shall survive the
Closing.
<PAGE>
40
The assignments provided for in subsections (B) and (G) above shall be
without representation or warranty by the Transferor, except that the Transferor
shall warrant that it has the right to assign the Leases and Contracts referred
to therein, has not previously assigned any of such Leases or Contracts and has
not encumbered any of the same except for Permitted Exceptions.
7.2 Partnership Closing Documents. At the Closing (or subsequent
-----------------------------
thereto with respect to documents contemplated by subsection (I) below),
simultaneously with the Transferor's delivery of the Transferor Closing Docu-
ments, the Partnership shall deliver to the Transferor the following documents
(herein referred to collectively as the "Partnership Closing Documents"), the
-----------------------------
delivery of any of which may be waived by the Transferor:
(A) a duly executed and acknowledged Secretary's Certificate,
certifying that (i) the Board of Directors of the general partner of the
Partnership has duly adopted resolutions authorizing the execution and delivery
of this Agreement and those of the Partnership Closing Documents which are to be
executed by the Partnership, and the consummation of the transactions
contemplated by this Agreement (which resolutions shall be annexed to or incor-
porated in such certificate) and (ii) no consent of the limited partners of the
Partnership is required for such execution, delivery and consummation;
<PAGE>
41
(B) an incumbency certificate certifying the identity and incumbency
of the officers of the general partner of the Partnership, in its own behalf and
as general partner of the Partnership, executing and delivering this Agreement
and the Partnership Closing Documents;
(C) a true and correct copy of the Partnership Agreement, as amended
and in effect on the Closing Date, certified as such by an officer of the
general partner of the Partnership;
(D) counterparts of the Assignment of Leases referred to in Section
7.1(B), duly executed by the Partnership to effectuate the Partnership's
assumption of the Transferor's obligations under such Leases first accruing on
or after the Closing Date;
(E) counterparts of the Assignment of Contracts referred to in Section
7.1(G), duly executed by the Partnership to effectuate the Partnership's
assumption of the Transferor's obligations under the Contracts assigned thereby
first accruing on and after the Closing Date or as otherwise required by Section
6.10 in respect of the Contracts referred to therein;
(F) counterparts of the amendment to the Partnership Agreement
referred to in Section 7.1(L), duly executed by the general partner of the
Partnership on its own behalf and on behalf of the existing limited partners of
the Partnership, together with a certificate from the Partnership, in the form
of Exhibit 2, setting forth the
<PAGE>
42
number of Partnership Units held by each of the partners in the Partnership
(including the Transferor) as of the Closing Date;
(G) a certificate of the Partnership, executed by a duly authorized
officer of the general partner of the Partnership, dated the Closing Date,
stating that the representations and warranties made by the Partnership in this
Agreement, as updated pursuant to Section 8.4(W), are true and correct in all
material respects on and as of the Closing Date as if made on and as of such
date (the "Section 7.2(G) Certificate");
--------------------------
(H) such instruments and documents as may be required by the holder of
the Mortgage to evidence the fact that the Partnership has assumed and is bound
by the Mortgage and all documents executed in connection therewith including,
without limitation, the note secured thereby, the Regulatory Agreement and all
security and escrow agreements, subject, in each case, to any exculpation from
liability provisions contained therein;
(I) the Confirmation; and
(J) such other documents, instruments or agreements which the
Partnership may be required to deliver to the Transferor pursuant to the
provisions of this Agreement or which may be necessary to consummate the
transactions contemplated by this Agreement. Without limiting the generality of
the foregoing, simultaneously with each issuance of Partnership Units to the
Transferor
<PAGE>
43
subsequent to the Closing Date pursuant to Article III, the Partnership shall
deliver to the Transferor a certificate, in the form annexed hereto as Exhibit
2, setting forth the number of Partnership Units held by each of the partners in
the Partnership (including the Transferor) as of such date. The provisions of
this Section 7.2(J) shall survive the Closing.
7.3 Estoppel Certificate. The Transferor shall be required to obtain,
--------------------
on or before the Closing Date, an estoppel certificate or letter, dated no more
than thirty (30) days prior to the Closing Date, from the holder of the Mortgage
and shall deliver such certificate or letter to the Partnership on or before the
Closing Date. The estoppel certificate or letter shall be in form reasonably
acceptable to the Partnership and shall set forth the certification of the
holder of the Mortgage as to the date of the Mortgage and all amendments
thereto, the unpaid principal amount thereof, the interest rate payable thereon,
the maturity date thereof, the amounts of escrows or reserves being held by the
holder of the Mortgage or its agent or designee and that, to the best knowledge
of the holder of the Mortgage, no default exists under the Mortgage on the part
of the Transferor, as the mortgagor thereunder. If the Mortgage shall, by its
terms, prescribe the form or content of the estoppel certificate or letter, the
Transferor shall be required only to obtain an estoppel certificate or letter
from the holder of the Mortgage in the form prescribed by
<PAGE>
44
the Mortgage and containing only such information as is required to be contained
therein.
7.4 Delivery of Records; Licenses and Permits.
-----------------------------------------
(A) At the Closing, the Transferor shall deliver to, or at the direction of, the
Partnership (i) all documents, records and books of account, or copies thereof,
relating to the construction, ownership, leasing, operation and maintenance of
the Property which are in the possession or under the control of the Transferor
or its agents on the Closing Date; (ii) original copies of all Leases, all
Contracts assigned to the Partnership, licenses and permits, counterparts or
true copies of the Mortgage, the note secured thereby and all agreements
executed in connection therewith; and (iii) such other information in the
possession of the Transferor or its agents relating to the Property which may be
requested by the Partnership, including, without limitation, building plans and
maintenance records. The Transferor shall also deliver to, or at the direction
of, the Partnership, both prior to and after the Closing, all documents in the
possession of the Transferor or its agents which may be necessary or helpful to
the Partnership in adjusting losses or claims or otherwise enforcing or settling
claims with respect to all insurance policies, Contracts and Leases, which
obligation shall survive the Closing. Notwithstanding anything to the contrary
set forth above in this Section 7.4, the Transferor shall not be required to
deliver to the Partnership any of the items
<PAGE>
45
specified above which are and will, subsequent to the Closing, remain in the
possession of the property management company for the Property.
B. The Transferor agrees to use all reasonable efforts to transfer or
cause to be transferred to the Partnership all approvals, permits, licenses and
certificates of occupancy relating to the Property or the Personalty. If any of
such approvals, permits, licenses or certificates is not transferable, the
Transferor shall cooperate with the Partnership and use all reasonable efforts
to have the same reissued to the Partnership.
7.5 Property Management Agreement. At the Closing the Partnership shall
-----------------------------
enter into a property management agreement for the Property with the Property
Management Company, such agreement to be in the form annexed hereto as Exhibit L
and made a part hereto.
7.6 Further Assurances. The Transferor and the Partnership agree that
------------------
the intent and purpose of the Transferor Closing Documents is to convey all of
the Transferor's right, title and interest in the Property to the Partnership.
The Transferor and the Partnership agree, at any time and from time to time
after the Closing, to execute, acknowledge where appropriate and deliver such
further instruments and documents and to take such other action as the other of
them may reasonably request in order to carry out the intent and purpose of this
Agreement. The provisions of this Section 7.5 shall survive the Closing.
<PAGE>
46
ARTICLE VIII
Representations and Warranties
------------------------------
8.1 Investment Representations. The Transferor, for itself and for
--------------------------
each partner in the Transferor, hereby acknowledges that it (A) has been given
full and complete access to the Partnership and its management in connection
with this Agreement and the transactions contemplated hereby, (B) has received
and read the Partnership Agreement, as amended to date, and has had the
opportunity to review all other documents relevant to its decision to enter into
this Agreement, and (C) has had the opportunity to ask questions of the
Partnership and its management concerning its investment in the Partnership and
the transactions contemplated hereby. The Transferor, for itself and for each
partner in the Transferor, acknowledges that it understands that the Partnership
Units to be acquired by it hereunder will not be registered under the Securities
Act of 1933, as amended, in reliance upon the exemption afforded by Section 4(2)
thereof for transactions by an issuer not involving any public offering, and
will not be registered or qualified under any applicable securities laws. The
Transferor, for itself and for each partner in the Transferor, represents that
(i) it is acquiring such Partnership Units for investment only and not with any
view toward distribution thereof in violation of any applicable securities laws,
and it will not sell or otherwise dispose
<PAGE>
47
of such Partnership Units except in compliance with the registration
requirements or exemption provisions of any applicable securities laws and in
accordance with the terms of the Partnership Agreement, (ii) its economic
circumstances are such that it is able to bear all risks of the investment in
the Partnership Units for an indefinite period of time, including the risk of a
complete loss of its investment in the Partnership Units, (iii) it has knowledge
and experience in financial and business matters sufficient to evaluate the
risks of investment in the Partnership Units, and (iv) it has consulted with its
own counsel and tax advisors, to the extent deemed necessary by it, as to all
legal and tax related matters covered by this Agreement and has not relied upon
the Partnership for any explanation of the application of the various United
States or state securities laws or tax laws with regard to its acquisition of
the Partnership Units. The Transferor, for itself and for each partner in the
Transferor, further acknowledges and represents that it has made its own
independent investigation of the Partnership and the business conducted or
proposed to be conducted by the Partnership. Such investigation does not affect
the Transferor's right to rely on the representations and warranties of the
Partnership contained in this Agreement and the Partnership Agreement. The
representations and warranties contained in this Sec tion 8.1 shall survive the
Closing.
<PAGE>
48
8.2 Partnership Acknowledgments. Effective from and after five (5)
---------------------------
days after the expiration of the Due Diligence Period and provided that this
Agreement is still in effect, the Partnership represents, warrants, acknowledges
and agrees that (A) the Partnership has made an independent investigation and
examination of the Property (and all matters related thereto), is familiar with
the physical condition of the Property, and has reviewed (i) the Leases, (ii)
the Mortgage, (iii) the Contracts and (iv) the Environmental Reports and (B)
except as expressly set forth in this Agreement and the Transferor Closing
Documents, neither the Transferor nor any of the officers, employees, partners,
agents or attorneys of the Transferor has made any oral or written
representations, warranties or statements of any nature or kind whatsoever to
the Partnership, or its officers, employees, partners, agents or attorneys,
whether express or implied, with respect to the matters set forth in clause (A)
above or with respect to any other matter, except as expressly set forth in this
Agreement and the Transferor Closing Documents. Such examination does not
affect the Partnership's right to rely on the representations and warranties
contained in this Agreement and the Transferor Closing Documents. The
Partnership further agrees that the Transferor shall not be bound in any manner
whatsoever by any projections, operating statements, set-ups or other
information pertaining to the Property made, furnished or claimed to have been
made or furnished by the Transferor or
<PAGE>
49
any other person or entity representing or purporting to represent the
Transferor, whether orally or in writing, except as expressly set forth in this
Agreement and the Transferor Closing Documents.
8.3 Partnership Representations and Warranties. In addition to any
------------------------------------------
other representations and warranties of the Partnership set forth herein, the
Partnership represents and warrants to the Transferor as follows:
(A) The Partnership is a limited partnership duly organized under
the laws of the State of Delaware with full right, power and authority to
fulfill all of its obligations hereunder, or as herein contemplated.
(B) The execution and delivery by the Partnership of this Agreement
and the Partnership Closing Documents and the consummation by the Partnership
of the transactions contemplated by this Agreement have been duly authorized
by all requisite action of the Partnership and no other action or approval is
required to enable the Partnership to consummate the transactions contemplated
by this Agreement and the Partnership Closing Documents in accordance with the
terms hereof and thereof. This Agreement has been duly executed and delivered
by the Partnership or an authorized representative of the Partnership and at the
Closing, the Partnership Closing Documents will be duly executed and delivered
by the Partnership or an authorized representative of the Partnership. This
Agreement constitutes a legal, valid and binding obligation of the Partner-
<PAGE>
50
ship, enforceable against the Partnership in accordance with the terms hereof,
except as the enforceability hereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar laws
affecting creditors' rights generally or by general principles of equity
(regardless of whether such enforceability is considered in a proceeding at law
or in equity). The Partnership Closing Documents, when executed at the Closing,
will be legal, valid and binding obligations of the Partnership enforceable
against the Partnership in accordance with their terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance or transfer, moratorium or similar laws affecting
creditors' rights generally or by general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in equity).
(C) No consent, waiver, approval or authorization of, or filing,
registration or qualification with, or notice to, any governmental unit or
authority or any other person is required to be made, obtained or given by the
Partnership in connection with the execution, delivery and performance of this
Agreement by the Partnership.
(D) Assuming compliance with the terms of this Agreement and the
Partnership Agreement by the parties hereto and thereto other than the
Partnership, none of the execution, delivery or performance of this Agreement by
the
<PAGE>
51
Partnership does or will, with or without the giving of notice, lapse of time or
both, violate, conflict with or constitute a default under any term or condition
of (i) the Partnership Agreement, (ii) any material agreement to which the
Partnership is a party or by which the Partnership is bound, or (iii) any terms
or provisions of any judgment, decree, order, statute, injunction, rule or
regulation of a governmental unit or authority applicable to the Partnership.
(E) The copy of the Partnership Agreement heretofore delivered or made
available to the Transferor is a true and complete copy thereof, as amended to
date. The Partnership Agreement, as so delivered or made available, has not
been modified and is in full force and effect in accordance with its terms as of
the date hereof.
(F) The Partnership has delivered to the Transferor true and complete
copies of the Annual Report on Form 10-K (and those portions of the Annual
Report to Stockholders which are incorporated by reference therein) of the
general partner of the Partnership for the fiscal year ended December 31, 1994,
as filed with the Securities and Exchange Commission (the "Commission"), and all
----------
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed by the
general partner of the Partnership with the Commission since December 31, 1994
(the "SEC Filings"). The financial statements of the general partner of the
-----------
Partnership included or incorporated by reference in the SEC
<PAGE>
52
Filings have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved (except as
may be indicated in the notes thereto) and fairly present in all material
respects the consolidated assets, liabilities and financial position of the
general partner of the Partnership as of the dates thereof and the consolidated
results of its operations and changes in cash flow for the periods then ended
(subject, in the case of any unaudited interim financial statements, to normal
year ended adjustments).
(G) The execution and delivery of this Agreement and the Partnership
Closing Documents by the Partnership and the consummation of the transactions
provided for herein have been duly authorized by the Board of Directors of the
general partner of the Partnership, which is the only authorization required by
such general partner for such execution, delivery and consummation.
8.4 Transferor Representations and Warranties. The Transferor
-----------------------------------------
represents and warrants to the Partnership as follows:
(A) Authority. The Transferor has been duly organized and is
---------
validly existing as a limited partnership, is in good standing under the laws of
the State of Texas, with all requisite power and authority to own the Property,
to conduct the business in which it is engaged and to enter into and perform its
obligations under this Agreement, the Transferor Closing Documents and any other
documents contem-
<PAGE>
53
plated by or related to this Agreement. The Transferor has duly qualified to
transact business in the State of Maryland and is in good standing under the
laws of said State. The Transferor is not a "foreign person" within the meaning
of sections 1445(f) and 7701(b) of the Internal Revenue Code.
(B) Enforceability. The execution and delivery by the Transferor of
--------------
this Agreement and the Transferor Closing Documents and the consummation by the
Transferor of the transactions contemplated by this Agreement have been duly
authorized by all requisite action of the Transferor and no other action or
approval (other than those provided for in this Agreement) is required to enable
the Transferor to consummate the transactions contemplated by this Agreement and
the Transferor Closing Documents in accordance with the terms hereof and
thereof. This Agreement has been duly executed and delivered by the Transferor
or an authorized representative of the Transferor and at the Closing, the
Transferor Closing Documents will be duly executed and delivered by the
Transferor or an authorized representative of the Transferor. This Agreement
constitutes a legal, valid and binding obligation of the Transferor enforceable
against the Transferor in accordance with the terms hereof, except as the
enforceability hereof may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance or transfer, moratorium or similar laws affecting
creditors' rights generally, or by general principles of equity (regardless of
whether such
<PAGE>
54
enforceability is considered in a proceeding at law or in equity). The
Transferor Closing Documents, when executed at the Closing, will be legal, valid
and binding obligations of the Transferor, enforceable against the Transferor in
accordance with their terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting creditors' rights generally, or by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding at law or in equity), and except for the consent of the partners of
Transferor, the holder of the Mortgage and U.S. Trust Company, no consent,
waiver, approval or authorization of, or filing, registration or qualification
with, or notice to, any governmental unit or authority or any other person is
required to be made, obtained or given by the Transferor in connection with the
execution, delivery and performance of this Agreement and the Transferor Closing
Documents by the Transferor which has not been obtained.
(C) Conflicts. Assuming the Transferor has obtained prior to Closing
---------
the consent of the holder of the Mortgage and U.S. Trust Company, the execution
and delivery of this Agreement and the Transferor Closing Documents, the
performance of the Transferor's obligations set forth herein or therein, and the
consummation of the transactions contemplated hereby and thereby by the
Transferor does not or will not, with or without the giving of notice, lapse of
<PAGE>
55
time or both, (i) conflict with or constitute a breach, violation or default by
the Transferor under any term or condition of (a) any contract, indenture,
mortgage, loan agreement, note, lease, joint venture or partnership agreement or
other instrument or agreement to which the Transferor is a party or by which the
Transferor, any of its properties or other assets or the Property may be bound
or subject, (b) the certificate of limited partnership, limited partnership
agreement or other organizational documents of the Transferor, or (c) any terms
or provisions of any applicable law, judgment, administrative or court decree,
order, injunction, rule or regulation of any governmental unit or authority
applicable to the Transferor or the Property, or (ii) result in the creation of
any Lien upon the Property.
(D) Leases. The Schedule of Leases attached hereto as Schedule E sets
------ ----------
forth with respect to each Lease (whether or not the term of each Lease has
commenced as of the date of such Schedule) (i) the name of the Tenant under each
Lease, (ii) the apartment unit or other space leased, (iii) the commencement
date of such Lease, (iv) the term of such Lease, including any renewal options,
(v) the annual rent payable by such Tenant, and (vi) the security, pet and any
other deposit made by such Tenant and the interest, if any, accrued thereon.
The Schedule of Leases is complete and accurate in all material respects, and
originals and/or true and complete copies of each Lease, and each
<PAGE>
56
modification, amendment, extension and assignment thereof, have heretofore
either been furnished to the Partnership or been made available to the
Partnership for inspection. There are no other Leases affecting any portion of
the Property at the date hereof except as set forth on the Schedule of Leases.
No Tenant has paid more than one month's rent or other charges in advance,
except for security deposits.
(E) Modification of Leases. The Leases have been executed and
----------------------
delivered by the parties thereto and except as set forth in Schedule E are
----------
unmodified and in full force and effect as of the date hereof (except for those
designated on Schedule E as "out for signature"), in accordance with their
----------
respective terms, and constitute the sole agreements and understandings (written
or oral) between the Transferor and the parties thereto.
(F) Lease Defaults. Except as set forth in the Schedule of Rent
--------------
Arrearages attached hereto as Schedule F and the Schedule of Litigation attached
----------
hereto as Schedule G (the "Schedule of Litigation"), no action, proceeding or
---------- ----------------------
arbitration is pending in respect of any Lease, nor has the Transferor received
from and on behalf of any Tenant any written notice of default by the Transferor
or any material claim which remains outstanding with respect to any of the
Leases, and except as set forth in the Schedule of Rent Arrearages, the
Transferor has no actual knowledge of any material breaches of or material
defaults
<PAGE>
57
under any Lease by the Tenant or the Transferor thereunder, and all payments
payable by or due to the Transferor under any Lease to the date hereof have been
made and received, without any material default thereunder or without any
defenses, counterclaims, offsets, concessions, rebates, credits or allowances
having been claimed or given. The rents set forth in the Leases and in Schedule
--------
E hereto are the rents actually being collected on behalf of the Transferor.
- -
The Schedule of Rent Arrearages attached hereto as Schedule F sets forth all of
----------
the information described in Section 6.13 and such information is true and
correct as of the date hereof in all material respects.
(G) Insurance. Attached as Schedule H hereto is a Schedule of
--------- ----------
Insurance (the "Schedule of Insurance"), which Schedule sets forth a list and
---------------------
brief description of all property and liability insurance policies currently in
force with respect to the Property. All such policies are in full force and
effect, are with reputable insurance companies, and are in compliance with the
requirements contained in the Mortgage. No written notice of cancellation or
increase in premium has been received by the Transferor with respect to any
insurance policy maintained by the Transferor in respect of the Property and,
to the Transferor's knowledge, none is threatened; and the Transferor has not
received any written notice that any repair or improvement to the Property is
required by the insurer under any such insurance policy which has not here-
<PAGE>
58
tofore been performed. From the date hereof through the Closing Date, the
Transferor shall maintain in full force and effect (including necessary renewals
thereof) the insurance policies listed on Schedule H.
----------
(H) Contracts. The Schedule of Contracts attached hereto as Schedule
--------- --------
B lists all Contracts executed and delivered by or on behalf of the Transferor
- -
(or otherwise binding on the Transferor) and in effect on the date hereof with
respect to the Property, and sets forth with respect to each Contract, the name
of the service provider, lessor or other party thereto, the date of such
Contract, the expiration date thereof, a brief description of the service or
property provided for or leased by such Contract and the amounts payable by the
Transferor thereunder. Except as set forth in the Schedule of Contracts, all
such Contracts are in full force and effect in accordance with their respective
terms as of the date hereof and constitute all of the Contracts (written or
oral) which are binding on the Transferor with respect to the Property or any
part thereof, and the Transferor has not given and has not received any written
notice of default which remains outstanding with respect thereto. The
Transferor has no actual knowledge of any material breaches of or material
defaults under any Contracts by any party thereto.
(I) Employment Agreements. There are no employment, collective
---------------------
bargaining or similar agreements
<PAGE>
59
between the Transferor and any employees which will be binding upon the
Partnership or the Property, and there are no pending claims which have been
asserted in writing or, to the Transferor's knowledge, any threatened claims
against the Transferor by or on behalf of any employees whose employment relates
to the Property. Except as may otherwise be required by law, the Partnership is
not assuming any sponsorship or fiduciary status with respect to such employee
benefit plans or other benefits and is not intended to have any direct
contractual obligations with respect thereto (other than reimbursement
obligations to the Property Management Company) nor is the Partnership assuming
any other obligation or liability of the Transferor with respect thereto not
expressly provided for herein. In no event shall the Partnership be obligated
to assume any obligations under employment agreements or be responsible for
severance pay for any employees who are not employed by the Partnership, but the
Partnership will become responsible for the wages and other compensation of
employees it hires. A true and correct schedule of all on-site employees,
setting forth the name of each such person and his or her duties and
compensation, is attached hereto as Schedule I.
----------
(J) Leasing or Brokerage Commissions. All leasing or brokerage
--------------------------------
commissions or fees which are due or will become due in respect of any Leases
entered into prior to the Closing Date (including renewals of any of the
foregoing) have been paid or will be paid prior to the
<PAGE>
60
Closing Date and the Partnership shall have no obligation in respect thereof.
(K) Utilities. All utilities necessary for the operation of the
---------
Property have been connected and are currently being supplied to the Property
and the Transferor has not received any written notice, and has no knowledge, of
the curtailment of service of any utility supplied to the Property or any part
thereof and all utility connection charges, if any, have been paid for.
(L) Permits and Compliance with Laws. Except for any matters which are
--------------------------------
the express and sole responsibility of any Tenant, the Transferor has not
received written notice, and has no actual knowledge, that (i) any approvals,
consents, permits, licenses or certificates of occupancy (whether governmental
or otherwise) required for the current use and operation of the Property by the
Transferor have not been granted, effected, renewed or performed and completed
(as the case may be) or have been or are about to be revoked; (ii) any fees and
charges therefor have not been fully paid; (iii) the Property, including the
current use and occupancy thereof by the Transferor or any occupants of the
Property, is in violation in any material respect of any Laws or (iv) any
governmental authority has a current plan that would adversely affect the
continued use and operation of the Property as currently used and operated in
any material respect. Except for the approvals, consents, permits, licenses or
certificates of
<PAGE>
61
occupancy set forth on the Schedule of Consents attached hereto as Schedule J
----------
(the "Schedule of Permits"), none of the approvals, consents, permits, licenses
-------------------
or certificates of occupancy referred to in clause (i) above will be invali-
dated by the transfer of the Property to the Partnership (although the
Partnership may in some instances have to file applications to have the same
reissued in its name). Except for any matters which are the express and sole
responsibility of any Tenant, to the Transferor's knowledge the Property and the
current use thereof comply in all material respects with (a) all applicable Laws
and (b) all restrictive covenants and title encumbrances affecting the Property.
The Transferor holds all material licenses, permits and authorizations required
for the lawful use, operation and occupancy of the Property.
(M) Environmental Compliance. Attached as Schedule K is a Schedule of
------------------------ ----------
Environmental Reports (the "Schedule of Environmental Reports"), which Schedule
---------------------------------
sets forth a list and brief description of all reports, studies, analyses, test
results, notices from any governmental authority, correspondence or agreements
with any person or governmental authority and similar documents relating to
environmental matters on, in or under the Property (collectively, the
"Environmental Reports"). The Transferor has heretofore either furnished to the
- ----------------------
Partnership or made available to the Partnership for inspection complete and
accurate copies of the Environmental Reports. Except as
<PAGE>
62
disclosed in the Environmental Reports, the Transferor has not received any
written notice from any governmental entity or other person and has no knowledge
that the Property, or current or former operations on the Property, are not or
have not been in compliance with any Environmental Laws or that the Transferor
has any material liability with respect thereto. The Transferor has no actual
knowledge of any Liens arising under or pursuant to any Environmental Laws on
the Property. To the Transferor's knowledge, except as set forth in the
Environmental Reports, there are no underground tanks for Hazardous Materials,
active or abandoned, at the Property and no Hazardous Materials are present or
have been released in a reportable quantity, where such a quantity has been
established by statute, ordinance, rule, regulation or order, at, on or under
the Property. To the Transferor's knowledge, neither the Transferor nor the
Property is in violation of any Environmental Laws and except as disclosed in
the Environment Reports there is no asbestos, PCB's or lead paint on the
Property or any part thereof.
(N) Condemnation. (i) No condemnation proceeding in which the
------------
Transferor has been served with process is pending with respect to all or any
part of the Property, (ii) to the Transferor's knowledge, no condemnation
proceeding in which the Transferor has not been served with process is pending
with respect to all or any part of the Property and (iii) to the Transferor's
knowledge, no taking in condemnation or by eminent domain is threatened
<PAGE>
63
with respect to all or any of the Property. The Property has not suffered any
damage by fire or other casualty which has not heretofore been completely
repaired and paid for in full.
(O) Litigation. Except as set forth on the Schedule of Litigation
----------
attached hereto as Schedule G, there is no litigation, action or suit which is
----------
not fully covered by insurance (excluding deductible or retained amounts) and
there is no governmental, administrative or arbitration proceeding or
investigation pending or, to the Transferor's knowledge, threatened, before any
court or governmental agency or body, domestic or foreign, or any unsatisfied
arbitration awards or judicial orders or judgments against or affecting the
Transferor, the Property or any partner of the Transferor, as the case may be,
which, if determined adversely to the Transferor, the Property or any such
partner or not discharged, could or would result in a lien on the Property or
have a material adverse effect on the Property or the Transferor or on the
ability of the Transferor to perform its obligations under this Agreement.
(P) Bankruptcy. No attachments, execution proceedings, assignments
----------
for the benefit of creditors, insolvency, bankruptcy, reorganization or other
similar proceedings are pending or, to the Transferor's knowledge, threatened
against the Transferor, nor are any of such proceedings anticipated or
contemplated by the Transferor.
<PAGE>
64
(Q) Mortgage. The Schedule of Mortgages attached hereto as Schedule C
--------
sets forth with respect to the Mortgage (i) the name of the holder thereof, (ii)
the date of the Mortgage and each amendment thereto, (iii) the unpaid principal
balance thereof as of the date hereof, (iv) the annual debt service payable
thereunder, (v) the maturity date thereof, (vi) the estimated balloon payment
due thereunder on maturity, (vii) the earliest date on which the note secured
thereby can be prepaid and (viii) the amounts escrowed with such holder and the
purpose for which each such escrow is held. The Mortgage is in full force and
effect, the Transferor has not received any written notice of default under the
Mortgage, no default on the part of the Transferor exists under the Mortgage
and, to the Transferor's knowledge, no event has occurred which with the giving
of notice or passage of time, or both, would constitute a default under the
Mortgage. Originals and/or true and complete copies of the Mortgage, the note
secured thereby, all loan documents relating thereto, and each modification and
amendment thereof have heretofore either been furnished to the Partnership or
been made available to the Partnership for inspection.
(R) Real Estate Taxes. All real estate taxes or assessments with
-----------------
respect to the Property which are required to be paid by the Transferor in order
not to be delinquent have been paid or will be paid at or prior to the
<PAGE>
65
Closing Date. The Property is separately assessed for real estate tax purposes.
(S) Title. The Transferor has not received any written notice
-----
challenging the validity of the Transferor's title to the Property. The
Transferor has not granted any rights, options, rights of first refusal or
entered into other agreements of any kind which are currently in effect for the
acquisition of the Property or any part thereof or any interest therein, except
for the rights of the Partnership under this Agreement.
(T) Essential Building Systems. The Property is an independent unit
--------------------------
which does not now rely on any facilities (other than facilities covered by
Permitted Exceptions or facilities of municipalities or public or private
utility and water companies) located on any property not included in the
Property to fulfill any municipal or governmental requirement or for the
furnishing to the Property of any essential building systems or utilities. No
property not included in the Property relies for its operation, maintenance or
legal compliance on any facilities located on the Property.
(U) Personal Property. The Schedule of Material Personalty attached
-----------------
hereto as Schedule D sets forth all material personal property owned or leased
----------
by the Transferor and used in connection with the ownership, maintenance or
operation of the Property, which Schedule separately identifies which property
is owned and which is leased and
<PAGE>
66
sets forth a list of the appliances and other significant Personalty located in
each apartment unit. Except as set forth on the Schedule of Material Personalty
with respect to leased property, all Material Personalty is owned by the
Transferor, free and clear of all liens and encumbrances other than the
Permitted Encumbrances.
(V) Consents. The Transferor will use its reasonable efforts to
--------
obtain at or prior to Closing, in writing, all required consents, waivers,
notices, approvals or authorizations necessary under the Mortgage or otherwise
to permit the transactions contemplated by this Agreement and has delivered or
will deliver the same to the Partnership as, if and when obtained. The
Transferor has given or will give at or prior to the Closing all required
notices under the Mortgage, partnership agreement of the Transferor, Leases,
Contracts or otherwise to permit the transactions contemplated by this
Agreement, or will give such notices after the Closing if required or permitted
to do so.
(W) Taxes. The Transferor has filed with the appropriate governmental
-----
authorities all federal, state and local income tax returns which, prior to the
date hereof, were required by law to be filed by the Transferor and paid all
taxes, if any, due from the Transferor as set forth in such returns.
(X) Regarding Representations and Warranties. At the Closing, the
----------------------------------------
representations and warranties
<PAGE>
67
in Sections 8.1, 8.2, 8.3 and 8.4 shall be remade on and as of the Closing Date
in the Section 7.1(M) Certificate and the Section 7.2(G) Certificate,
respectively, and each party hereto shall have the right to update any such
representations and warranties in such of those Certificates which is executed
by it to reflect changes in facts and circumstances between the date hereof and
the Closing Date which make any of such representations or warranties untrue in
any material respect.
8.5 Failure to Satisfy Conditions Precedent to Closing.
--------------------------------------------------
(A) If any representation or warranty made by the Transferor, as
remade, revised and/or updated in the Section 7.1(M) Certificate, shall be
untrue in any material respect on the Closing Date (or if such Certificate shall
disclose changed facts or circumstances which alter in any material respect the
representations and warranties made by the Transferor in this Agreement and
which are not the result of actions permitted to be taken by the Transferor
under this Agreement and are not satisfactory to the Partnership in its sole
discretion) or if any other condition precedent to the obligation of the
Partnership to consummate the transactions herein contemplated is unsatisfied as
of the Closing Date, the Partnership shall have the right either (a) to elect,
nevertheless, to accept contribution of the Property in accordance with the
provisions of this Agreement without any reduction to or
<PAGE>
68
abatement of the Consideration, in which event, upon the Closing, the
Partnership shall be deemed to have waived such unsatisfied conditions precedent
to Closing and accepted contribution of the Property on the basis of the
representations and warranties of the Transferor as remade, revised and updated
in the Section 7.1(M) Certificate or (b) to elect to terminate this Agreement by
Notice in writing delivered to the Transferor on or prior to the Closing Date,
in which event this Agreement, and the rights and obligations of the parties
hereto, shall terminate upon delivery of such Notice and neither party shall
have any further liability to the other hereunder; provided, however, that if
-------- -------
the failure of the condition precedent in question results from acts or
omissions taken or omitted to be taken by the Transferor in violation of this
Agreement or which otherwise constitute a default by the Transferor, such
termination shall not release the Transferor from any liability it may have to
the Partnership by reason thereof. If any representation or warranty made by the
Partnership, as remade, revised and updated in the Section 7.2(G) Certificate,
shall be untrue in any material respect on the Closing Date (or if such
Certificate shall disclose facts or circumstances which alter in any material
respect the representations and warranties made by the Partnership in this
Agreement and which are not the result of actions permitted to be taken by the
Partnership under this Agreement and are not satisfactory to the Transferor in
its
<PAGE>
69
sole discretion) or if any other condition precedent to the obligation of the
Transferor to consummate the transactions herein contemplated is unsatisfied as
of the Closing Date, the Transferor shall have the right either (i) to elect,
nevertheless, to contribute the Property to the Partnership in accordance with
the provisions of this Agreement without any modification of the Consideration,
in which event, upon the Closing, the Transferor shall be deemed to have waived
such unsatisfied conditions precedent to Closing and contributed the Property
and accepted the Partnership Units on the basis of the representations and
warranties of the Partnership as remade, revised and updated in the 7.2(G)
Certificate, or (ii) to elect to terminate this Agreement by Notice in writing
delivered by the Partnership on or prior to the Closing Date, in which event
this Agreement, and the rights and obligations of the parties hereto, shall
terminate upon delivery of such Notice and neither party shall have any further
liability to the other hereunder; provided, however, that if the failure of the
-------- -------
condition precedent in question results from acts or omissions taken or omitted
to be taken by the Partnership in violation of this Agreement or which otherwise
constitutes a default by the Partnership hereunder, such termination shall not
release the Partnership from any liability it may have to the Transferor by
reason thereof.
(B) For the purposes of Sections 5.2 and 5.3 and this Section 8.5, in
determining whether the conditions
<PAGE>
70
precedent to the Partnership's obligation to proceed with the Closing have been
satisfied (but not for the purpose of determining the Transferor's liability
thereunder), the truthfulness of the representations and warranties made by the
Transferor in this Agreement shall be determined without reference to the state
of the Transferor's knowledge and, for such limited purpose, it shall be deemed
that all warranties and representations made in this Agreement by the Transferor
were made without any limitation or qualification based on the knowledge of the
Transferor.
8.6 Survival of Representations and Warranties. The representations and
------------------------------------------
warranties made by the Partnership in Sections 8.2 and 8.3 and Article 10 and by
the Transferor in Sections 8.1, 8.4(A), (B) and (C) and Article 10, as remade,
revised and updated as of the Closing Date by the Transferor in the Section
7.1(M) Certificate and by the Partnership in the Section 7.2(G) Certificate,
shall survive the Closing without limit as to time. The representations and
warranties made by the Transferor in Section 8.4 (other than in Sections 8.4(A),
(B) and (C)), as remade, revised and updated as of the Closing Date by the
Transferor in the Section 7.1(M) Certificate, shall survive the Closing for a
period of one year; provided, however that no claim for indemnification under
-------- -------
Section 8.8 with respect to a breach of any representation or warranty referred
to above in this sentence may be maintained by the Partnership unless the
Partnership shall have delivered a written Notice to the
<PAGE>
71
Transferor specifying in reasonable detail to the Transferor the nature of such
claim and the amount due, in the reasonable good faith judgment of the
Partnership, in respect of such claim, which Notice shall be delivered on or
before the first anniversary of the Closing Date.
8.7 Indemnification.
---------------
(A) The Partnership shall indemnify and hold the Transferor and each
partner thereof (collectively, the "Indemnified Parties") harmless from and
-------------------
against any claim, loss, damage, expense, cost (including reasonable attorney's
fees and disbursements) or liability (including liabilities arising by reason of
damages incurred by any Indemnified Party) (collectively, "Losses," which term,
------
when used in Section 8.7(B), shall include liabilities arising by reason of
damages incurred by any Person indemnified under said section) (i) resulting
from a breach by the Partnership of any representation or warranty made by it in
Section 8.2 or 8.3 or Article 10 or (ii) imposed upon or incurred by the
Transferor, or allegedly due by the Transferor, (a) by reason of claims made by
Tenants under the Leases, or by contracting parties under those Contracts
assigned to the Partnership hereunder, which relate to any actions or events
first occurring, or obligations first accruing, on or after the Closing Date or
as to which the Partnership has assumed liability under this Agreement or under
any of the Partnership Closing Documents or (b) arising out of or relating to
the ownership, operation, leasing, repair or
<PAGE>
72
improvement of the Property, or by reason of any event or occurrence on, or
relating to, the Property which occurs, accrues or relates to an event occurring
at any time on or after the Closing Date or matters occurring prior to the
Closing Date which are expressly assumed by the Partnership pursuant to this
Agreement. Notwithstanding the foregoing provisions of this Section 8.8(A), the
foregoing indemnities by the Partnership shall not apply to (w) violations of
Environmental Laws or claims in respect thereof where the basis for such
violation occurred prior to the Closing Date, (x) Losses which constitute or
arise out of obligations of the Transferor under this Agreement or the
Transferor Closing Documents, (y) Losses which have been expressly retained or
assumed by the Transferor in or pursuant to this Agreement or in the Transferor
Closing Documents or for which apportionments have been made pursuant to Article
VI, or (z) Losses in respect of which the Transferor has indemnified the
Partnership in this Agreement or in any of the Transferor Closing Documents or
which constitute a breach of representations or warranties of the Transferor
hereunder (but only if, in the case of any representation or warranty set forth
in Section 8.4, other than those set forth in Sections 8.4(A), (B) and (C), the
Partnership shall have given the Transferor the Notice provided for in Section
8.6 within the time period specified therein).
(B) Subject to the limitation set forth in Section 8.9, the
Transferor shall indemnify and hold the
<PAGE>
73
Partnership, each partner and employee thereof, each shareholder, officer,
director, partner or employee of any such partner, and each officer and director
of any such shareholder, harmless from and against any Losses (i) resulting from
a breach by the Transferor of any representation or warranty in Section 8.1,
8.4 (but only if, in the case of any representation or warranty set forth in
Section 8.4, other than those set forth in Sections 8.4(A), (B) and (C), the
Partnership shall have given the Transferor the Notice provided for in Section
8.6 within the time period specified therein) or Article 10 or (ii) imposed upon
or incurred by the Partnership, or allegedly due by the Partnership, (a) by
reason of claims made by Tenants under the Leases, or by contracting parties
under the Contracts assigned to the Partnership hereunder, which relate to any
actions or events which occurred or obligations which accrued prior to the
Closing Date or as to which the Transferor has retained or assumed liability
under this Agreement or under any of the Transferor Closing Documents, or (b)
arising out of or relating to the ownership, operation, leasing, repair or
improvement of the Property, or by reason of any event or occurrence on, or
relating to, the Property which occurred, accrued or related to an event
occurring at any time, prior to the Closing Date, and including, without
limitation, any Losses arising out of or resulting from any litigation listed on
Schedule G attached hereto, as the same may be updated at the Closing.
- ----------
<PAGE>
74
Notwithstanding the foregoing provisions of this Section 8.8(B), the foregoing
indemnities by the Transferor shall not apply to (w) violations of Environmental
Laws or claims in respect thereof which do not constitute a breach of the
representations and warranties of the Transferor set forth in Section 8.4(M) or
if any such violation or claim does constitute such a breach, the Notice to the
Transferor provided for in Section 8.6 is not given within the time period
specified therein, (x) Losses which constitute or arise out of obligations of
the Partnership under this Agreement or the Partnership Closing Documents, (y)
Losses which have been expressly assumed by the Partnership in or pursuant to
this Agreement or the Partnership Closing Documents or for which apportionments
have been made pursuant to Article VI or (z) Losses in respect of which the
Partnership has indemnified the Transferor in this Agreement or any of the
Partnership Closing Documents or which constitute a breach of representations or
warranties of the Partnership hereunder.
(C) The fact that the indemnity by the Partnership or the Transferor
set forth in Section 8.7(A) or 8.7(B), respectively, may expressly except items
of potential liability or expense shall not be construed as imposing liability
on the indemnified party for such excepted items, but shall be construed solely
as exceptions to the obligations of the indemnified party.
<PAGE>
75
8.8 Limitation on Indemnification. To the extent that any of the
-----------------------------
Transferor's representations or warranties set forth in Section 8.4 are
confirmed by an estoppel certificate or letter delivered pursuant to Section 7.3
or by the Title Company in the policy of title insurance issued by it, the
Transferor shall be relieved of liability to the Partnership, and shall not be
liable to the Partnership, in respect of such representation or warranty (in the
case of a representation or warranty confirmed by the Title Company, to the
extent of the coverage provided by the policy of title insurance issued by it),
provided the title insurance coverage afforded by such policy is not impaired by
reason of the provisions of this Section 8.8.
8.9 Transferor's Knowledge. Whenever in this Agreement a
----------------------
representation and warranty is made to the knowledge of the Transferor, or words
of similar import are utilized, knowledge of the Transferor shall be limited to
the actual knowledge of the general partners of the Transferor, without any
independent investigation other than thoroughly reviewing the subject matter of
such representation and warranty with the property management company for the
Property.
<PAGE>
76
ARTICLE IX
Casualty and Condemnation
-------------------------
9.1 Casualty.
--------
(A) If, prior to the Closing Date, the Property shall be damaged by
fire or any other casualty and the estimated repair or restoration cost exceeds
$2,000,000, the Partnership may, by Notice delivered to the Transferor on or
prior to the Closing Date, elect as its sole remedy on account thereof, either
(i) to terminate this Agreement, and the rights of the parties hereunder, in
which event this Agreement shall terminate as of the date of delivery of such
Notice without liability on the part of any party hereto or (ii) to continue
this Agreement in effect without abatement of the Consideration on account
thereof, in which event the Transferor (a) shall transfer and assign to the
Partnership, at the Closing, its full right, title and interest in and to any
insurance proceeds with respect thereto, shall pay in cash to the Partnership an
amount equal to the deductible under its casualty insurance policy, and shall
cooperate in all reasonable respects with the Partnership, at the Partnership's
sole cost and expense, in connection with the collection of such insurance
proceeds, to the extent not collected at the Closing, and (b) to the extent any
insurance proceeds shall have been received prior to the Closing, remit to the
Partnership the full amount thereof so collected, less, in each such case,
amounts, if any, applied to repair or restoration of the Property.
<PAGE>
77
(B) If, prior to the Closing Date, the Property shall be damaged by
fire or any other casualty and the estimate repair or restoration cost does not
exceed $2,000,000, the Partnership's sole remedy on account thereof shall be the
remedy provided for in clause (ii) of Section 9.1 (A) but only provided that the
loss is fully covered by the Transferor's insurance, subject to applicable
deductibles (the amount of any such deductibles to be paid by the Transferor to
the Partnership as provided in clause (ii)(a) of Section 9.1 (A) above), and the
insurer does not disclaim liability under its policy. If the conditions set
forth in the proviso to the preceding sentence are not satisfied, the
Partnership shall also have the right to exercise the remedy provided for in
clause (i) of Section 9.1(A) unless the Transferor pays to the Partnership, in
addition to any deductible, the amount of the shortfall in insurance proceeds.
9.2 Condemnation.
------------
If, prior to the Closing, condemnation proceedings are threatened
or commenced by an authorized governmental agency with respect to any portion of
the Property, the Partnership may, by Notice delivered to the Transferor on or
prior to the Closing Date, elect as its sole remedy on account thereof, either
(i) to terminate this Agreement and the rights of the parties hereunder if the
taking or threatened taking is material, in which event this Agreement shall
terminate as of the date of delivery of such
<PAGE>
78
Notice without liability on the part of any party hereto or (ii) to continue
this Agreement in effect without abatement of the Consideration on account of
any such threatened or actual condemnation proceeding, in which case any award
in condemnation, whether made prior to or following the Closing, shall become
the property of and shall be paid to the Partnership.
9.3 Approval and Consent of the Partnership. If prior to the Closing
---------------------------------------
Date a condemnation proceeding affecting any portion of the Property is
threatened or commenced or the Property is damaged by fire or any other
casualty, the Transferor shall promptly advise the Partnership of such event and
shall keep the Partnership fully informed as to all developments as to any such
event. Between the date hereof and the Closing Date, the Transferor shall not
without the prior written consent of the Partnership (A) submit or settle any
claim for the collection of insurance proceeds with respect to any such
casualty, (B) agree to make any conveyance in lieu of any such condemnation or
(C) submit or settle any claim for an award in condemnation.
ARTICLE X
Brokerage Indemnity
-------------------
The Transferor represents and warrants to the Partnership that the
Transferor has not dealt, and the Partnership represents and warrants to the
Transferor that
<PAGE>
79
the Partnership has not dealt, with any real estate broker, firm, salesperson or
other similar person or entity who might be entitled to or claim a commission or
other compensation in connection with the transactions contemplated by this
Agreement. The Partnership shall indemnify and hold the Transferor harmless
from and against any and all claims, liabilities, costs and expenses, including,
without limitation, reasonable attorneys' fees and disbursements, incurred by
the Transferor in connection with any claims made against the Transferor for
brokerage commissions and other fees or compensation made by any broker, firm,
salesperson or other person or entity with whom the Partnership may have dealt
in connection with the transactions contemplated hereby. The Transferor shall
indemnify and hold the Partnership harmless from and against any and all claims,
liabilities, costs and expenses, including, without limitation, reasonable
attorneys' fees and disbursements, incurred by the Partnership in connection
with any claims made against the Partnership for brokerage commissions and other
fees or compensation made by any broker, firm, salesperson or other person or
entity with whom the Transferor may have dealt in connection with the
transactions contemplated hereby. The provisions of this Article X shall
survive the Closing.
<PAGE>
80
ARTICLE XI
Certain Covenants of the Parties
--------------------------------
11.1 Mortgage. The Transferor shall (A) make all payments of interest
--------
and principal under the Mortgage coming due thereunder prior to the Closing
Date, in accordance with the terms thereof, (B) otherwise comply with all of the
terms and provisions of the Mortgage up to the Closing Date, (C) not alter or
amend the Mortgage, or seek or accept any waivers or extensions of time for
payment or performance thereunder and (D) not make any prepayment of principal
under the Mortgage.
11.2 Conduct of Business. Between the date of this Agreement and the
-------------------
Closing Date:
(A) The Transferor, in accordance with its normal practices and
procedures, shall continue to maintain and to make all repairs and replacements
to the Property so as to keep the Property in substantially its present
condition, subject to the provisions of Article IX hereof, and the Transferor
shall operate and manage the Property in the same manner as it has operated the
Property prior to the date hereof. In addition, subject to the provisions of
Section 6.10, the Transferor shall continue to implement and effectuate the
renovation program currently being undertaken by the Transferor and prosecute
work thereon in the ordinary course.
(B) The Transferor shall use commercially reasonable efforts from
the date hereof through the Closing
<PAGE>
81
Date to (i) continue to rent the Property, (ii) modify, renew or extend any
Lease on an as needed basis and (iii) perform all work necessary to make ready
for rerental any apartments which become vacant between the date of this
Agreement and the Closing Date.
(C) The Transferor shall not enter into or accept the surrender of or
terminate any of the Contracts or Leases or grant any concession, rebate,
allowance or free rent at the Property except to the extent commercially
reasonable and consistent with past practices.
(D) The Transferor shall cause all certificates of occupancy and other
permits to be observed and to be kept in full force and effect. The Transferor
shall cause all obligations under the Contracts to be performed. The Transferor
shall not permit any Contracts to be voluntarily renewed, amended or terminated,
unless such renewal, amendment or termination is commercially reasonable.
Without the prior written consent of the Partnership, which consent shall not be
unreasonably withheld, no Contract for or on behalf of or affecting the Property
shall be negotiated, entered into or extended which cannot be terminated on not
more than thirty (30) days' notice without charge, cost, penalty or premium.
The Transferor shall carry on and conduct the operation of the Property in
substantially the same manner as such business is now and has heretofore been
conducted to the extent same is commercially reasonable, including (but not
limited to)
<PAGE>
82
maintenance of and compliance with its insurance policies. The Transferor shall
operate the Property in accordance with all applicable laws, rules, regulations,
ordinances, licenses and permits.
(E) The Transferor shall not remove any personal property,
personalty, fixtures or equipment located in or on the Property except as may be
required for maintenance, repair and/or replacement or where such removal is
commercially reasonable. All replacements shall be (i) free and clear of any
Liens except for Permitted Exceptions, (ii) of a quality at least equal to the
replaced items and (iii) deemed included in the sale, without cost or expense to
the Partnership.
(F) The Transferor shall not incur any indebtedness other than as
is permitted under Section 11.3(A)(d).
(G) The Transferor shall deliver to the Partnership, as soon as
available to the Transferor, any monthly operating statements and leasing
reports with respect to the Property for each calendar month which elapses
between the date hereof and the Closing Date.
11.3 Post-Closing Restrictions on Transferor. The Transferor
---------------------------------------
understands that, with one exception, the liability of the Transferor under this
Agreement has been limited under Section 13.10 to the assets of the Transferor.
The Transferor further understands that subsequent to the Closing the sole asset
of the Transferor will be the
<PAGE>
83
Partnership Units it receives pursuant to this Agreement. In order to induce the
Partnership to agree to the limitation on liability provisions set forth in
Section 13.10, the Transferor hereby agrees as follows:
(A) until the later of (i) the tenth (10th) day following the first
anniversary of the Closing Date and (ii) the date on which all matters set forth
in any Notice given by the Partnership to the Transferor pursuant to Section 8.6
of a breach of any of the Transferor's representations and warranties have been
resolved and any amount payable by the Transferor to the Partnership pursuant to
such resolution has been paid in full):
(a) subject to the provisions of Section 11.3(B), the Transferor
shall continue to own and hold, and shall not assign, transfer, distribute to
its partners or otherwise dispose of any of the Partnership Units received by it
pursuant to this Agreement;
(b) the Transferor shall not mortgage, pledge, create a security
interest in or Lien on or otherwise hypothecate or encumber any of such
Partnership Units;
(c) the Transferor shall not engage in any business other than
holding and owning the Partnership Units it receives pursuant to this Agreement
and the Transferor Closing Documents, fulfilling its obligations under this
Agreement and the Transferor Closing Documents
<PAGE>
84
which survive the Closing and investing any cash from time to time in its bank
accounts;
(d) without limiting the generality of the foregoing clause (c),
the Transferor shall not incur any additional indebtedness (other than payables
incurred in the ordinary course and indebtedness which refinances existing
indebtedness in the same principal amount), acquire any property or other
investments, merge or consolidate with any other entity, dissolve, liquidate or
otherwise fail to preserve its existence as a Texas limited partnership; and
(e) the Transferor shall not take any other action which would
reduce or impair in any material respect the ability of the Transferor to
respond to, pay or perform any of its obligations under this Agreement or the
Transferor Closing Documents which survive the Closing; provided, however, that
nothing contained in this Section 11.3(A) shall be construed as prohibiting the
Transferor from utilizing distributions it receives on its Partnership Units or
any other cash it may have to pay its indebtedness and expenses and/or to make
distributions to its partners.
(B) If the Partnership gives the Transferor the Notice provided for
in Section 8.6 on or prior to the first anniversary of the Closing Date, then
notwithstanding the foregoing provisions of Section 11.3(A), but subject to
compliance with Section 8.1 and the provisions of the Partnership Agreement
relating to transfer or assignment of Partnership Units, at any time subsequent
to the receipt by
<PAGE>
85
the Transferor of such Notice the Transferor shall have the right to assign,
transfer, distribute or otherwise dispose of the Partnership Units it receives
at the Closing and, subject to the provisions of Section 13.10, all of the
Partnership Units it receives subsequent to the Closing pursuant to Article III,
but only provided that the Partnership continues to hold and retain, until the
claims set forth in such Notice have been resolved and the amount, if any,
payable by the Transferor to the Partnership pursuant to such resolution has
been paid in full, Partnership Units having an aggregate value equal to at least
the sum of (i) the estimated amount due to the Partnership in respect of such
claims, as set forth in such Notice, and (ii) the aggregate amount of
outstanding indebtedness and other liabilities of the Transferor.
(C) The provisions of this Section 11.3 shall survive the Closing.
11.4 Post-Closing Agreements of the Partnership.
------------------------------------------
(A) The Partnership hereby grants the Transferor, in its capacity as
a limited partner of the Partnership and so long as the Transferor has not
dissolved, terminated or liquidated, the right to receive the Property as a
distribution in kind in satisfaction of the Transferor's distribution rights
under Section 8.2 of the Partnership Agreement, but only to the extent provided
in Section 8.5 of the Partnership Agreement. If the Property is contributed by
the Partnership to a Subsidiary Entity (as
<PAGE>
86
defined in the Partnership Agreement), the Partnership shall use its best
efforts, and shall cause such Subsidiary Entity, to take such actions as may be
necessary to effectuate the foregoing right granted by the Partnership to the
Transferor.
(B) The Partnership agrees that it will not sell, exchange or
otherwise dispose of the Property or any portion thereof at any time prior to
the fifth anniversary of the date of the Closing hereunder. Notwithstanding the
foregoing, in the event that prior to such fifth anniversary date the
stockholders of the Partnership's general partner vote to adopt a plan of
liquidation in accordance with the articles of incorporation of such general
partner, then the Partnership agrees that it will not sell, exchange or
otherwise dispose of the Property or any portion thereof prior to such fifth
anniversary date other than pursuant to such plan of liquidation, and that in
any event the Partnership will not sell the Property prior to the first
anniversary of the Closing Date. If the Property is contributed by the
Partnership to a Subsidiary Entity (as defined in the Partnership Agreement),
the Partnership shall use its best efforts, and shall cause such Subsidiary
Entity, to comply with the applicable of the foregoing restrictions.
(C) The Partnership and its general partner hereby consent to the
assignment and transfer of the Partnership Units received by the Transferor to
the existing
<PAGE>
87
partners of the Transferor, whether upon the liquidation of the Transferor or
otherwise, subject, however, to (i) compliance by the Transferor with the
restrictions set forth in Section 11.3 and the applicable provisions (not
including consent requirements) of the Partnership Agreement relating to
transfer or assignment of Partnership Units, and (ii) delivery to the
Partnership by each partner of the Transferor to whom any Partnership Units are
being so assigned and transferred of a written acknowledgment of the
applicability to such partner of the restriction referred to in Section 11.5.
The provisions of this Section 11.4 shall survive the Closing.
11.5 Acknowledgments With Respect to Certain Conversion Rights. The
---------------------------------------------------------
Transferor acknowledges that the provisions in Section 11.2(b) of the Partner-
ship Agreement (which restrict the ability of an affiliate of the general
partner of the Partnership to exercise the conversion rights granted therein)
apply to the Transferor (including any partner of the Transferor to whom
Partnership Units may be distributed or otherwise assigned or transferred).
ARTICLE XII
No Recording of Memorandum;
Press Releases and Other Disclosures
------------------------------------
12.1 No Recordation. The Transferor and the Partnership each agrees
--------------
that neither this Agreement nor any memorandum or notice hereof shall be
recorded.
<PAGE>
88
12.2 Publicity. In no event shall either the Transferor or the
---------
Partnership or their respective agents, employees or consultants issue any press
release or otherwise communicate to any third party any information regarding
this Agreement or the transactions contemplated hereby unless the other party
has consented thereto and to the form and substance of any such statement,
announcement or release; provided, however, that nothing herein shall be deemed
-------- -------
to limit or impair in any way any party's ability to disclose the details of the
transactions contemplated hereby to the accountants, attorneys or other
authorized agents of such party or as such party deems necessary or desirable
pursuant to any court or governmental order or applicable securities regulations
or financial reporting requirements, nor shall the Partnership or its general
partner be precluded from describing this Agreement and the transactions herein
contemplated in any filings made pursuant to any Laws, or from filing this
Agreement, the Exhibits hereto and the Schedules as exhibits to any filings by
the Partnership or its general partner required by any Laws. Notwithstanding the
foregoing, no party hereunder shall have any liability by reason of the details
of the transactions
<PAGE>
89
contemplated hereby becoming known by means beyond the reasonable control of
such party. The provisions of this Section 12.2 shall survive the Closing.
ARTICLE XIII
Miscellaneous
-------------
13.1 Notices. Notices must be in writing and sent to the party to whom
-------
or to which such Notice is being sent by certified or registered mail, return
receipt requested with postage prepaid, or by commercial overnight delivery
service or delivered by hand with receipt acknowledged in writing, as follows:
(A) To the Partnership:
BRI OP Limited Partnership
c/o Berkshire Realty Company, Inc.
470 Atlantic Avenue
Boston, Massachusetts 02210
Attention: President, Berkshire Realty
Company, Inc.
with a copy thereof to:
Peabody & Brown
101 Federal Street
Boston, Massachusetts 02110
Attention: Alexander J. Jordan, Jr., Esq.
(B) To Transferor:
Turtle Creek Associates Limited
Partnership
c/o The Berkshire Group
470 Atlantic Avenue
Boston, Massachusetts 02210
Attention: David J. Moskowitz, Esq.
<PAGE>
90
with a copy thereof to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Walter F. Leinhardt, Esq.
All Notices shall be deemed given when received, and may be given either by a
party or by such party's attorneys. The cost of delivery shall be borne by the
party delivering the Notice.
13.2 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, and all of which shall
constitute a single instrument.
13.3 Amendments. Except as otherwise provided herein, this Agreement
----------
may not be changed, modified, supplemented or terminated except by an
instrument executed by the party hereto which is or will be affected by the
terms of such change, modification, supplement or termination.
13.4 Waiver. No waiver by any party hereto of any failure or refusal
------
by the other party hereto to comply with its obligations hereunder shall be
deemed a waiver of any other or subsequent failure or refusal so to comply.
13.5 Successors and Assigns. Subject to the provisions of this
----------------------
Agreement, the terms, covenants, agreements, conditions, representations and
warranties contained in this Agreement shall inure to the benefit of and shall
be enforceable by the parties hereto and their respective successors and
permitted assigns. In no event shall the
<PAGE>
91
Transferor have the right to assign or transfer its right to receive Partnership
Units.
13.6 Third-Party Beneficiaries. Except as expressly set forth in
-------------------------
Section 8.7, the provisions of this Agreement are made for the benefit of the
parties hereto, and their respective successors in interest and assigns, and are
not intended for, and may not be enforced by, any other person or entity.
13.7 Partial Invalidity. If any term or provision of this Agreement or
------------------
the application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby and each term
and provision of this Agreement shall be valid and enforced to the fullest
extent permitted by law.
13.8 Governing Law. This Agreement has been made pursuant to and shall
-------------
be governed by the laws of the State of Maryland.
13.9 Headings; Schedules. The headings of the various Articles and
-------------------
Sections of this Agreement have been inserted solely for purposes of
convenience, are not part of this Agreement and shall not be deemed in any
manner to modify, explain, expand or restrict any of the provisions of this
Agreement. All references to Articles, Sections or paragraphs herein shall be
to the specified Article, Section
<PAGE>
92
or paragraph of this Agreement, unless stated to the contrary, and all
references to Schedules shall be to the specified Schedule annexed hereto. All
Schedules annexed hereto are made a part hereof. All terms defined herein shall
have the same meanings in the Schedules, except as otherwise provided therein.
All references in this Agreement shall be deemed to include the Schedules.
13.10 Limitation on Transferor's Liability. Except with respect to and
------------------------------------
under the certificate provided for in Section 7.1(I), the liability of the
Transferor under this Agreement and under the Transferor Closing Documents
(including, without limitation, except as otherwise provided above, any
Transferor Closing Document which consists of a certificate of one or both of
the Transferor's general partners) shall be limited to the assets of the
Transferor (including, without limitation, the Partnership Units received and to
be received by the Transferor pursuant to this Agreement, subject to the
provisions of Section 11.3(B)) and in no event shall the Partnership seek or be
entitled to enforce any such liability against the partners (general or limited)
of the Transferor, or any of them, or their personal assets. Notwithstanding
the foregoing limitation of liability, if the Transferor violates any of the
provisions of Section 11.3 and, as a result of such violation, the Transferor
has insufficient assets with which to pay or perform any of its obligations
under this Agreement or the Transferor Closing Documents which survive
<PAGE>
93
the Closing (the "Surviving Obligations"), (a) the general partners of the
Transferor shall be jointly and severally personally liable to the Partnership
(which liability shall not be affected or negated by the exculpation to be con-
tained in the deed pursuant to Section 7.1(A))for the lesser of (i) the amount
of and/or the cost of performing the Surviving Obligations and (ii) the portion
of the amount of and/or the cost of performing the Surviving Obligations which
the Transferor would have been able to pay or perform if such violation had not
occurred, together in either case with costs and expenses incurred by the
Partnership in recovering such amount, and (b) if such violation occurs prior to
the issuance by the Partnership to the Transferor of Partnership Units pursuant
to Article III on January 2, 1997 or January 2, 1998, as applicable, the
Partnership shall have the right to withhold the issuance of such Partnership
Units, or such amount thereof as in the judgment of the Partnership is equal in
value to the amount and/or cost of performing the Surviving Obligations at such
time, whichever is less. At such time as the amount due to the Partnership in
respect of all of the Surviving Obligations has been finally determined, whether
by final, non-appealable judgment of a court of competent jurisdiction,
settlement or otherwise, the Partnership shall have the right to offset the
amount so due it (to the extent not previously recovered) against the
Partnership Units, if any, the issuance of which to the Transferor has been
withheld as
<PAGE>
94
above provided, and any distributions thereon which have been deposited by the
Partnership in a bank account as hereinafter provided, and any remainder of such
Partnership Units and distributions shall be issued or paid to the Transferor.
Notwithstanding the withholding by the Partnership of the issuance of any
Partnership Units to the Transferor, subject to the provisions of the following
sentence, the Partnership shall pay to the Transferor an amount equal to all
distributions which would have been made to the Transferor if the issuance of
such Partnership Units had not been withheld until and except to the extent that
any amount due to the Partnership by the Transferor is offset against such
withheld Units as above provided. If, however, the Partnership determines in
its judgment that the value of the Partnership Units whose issuance has been
withheld pursuant to this Section 13.10 is less than the amount of and/or the
cost of performing all of the Surviving Obligations, the Partnership may deposit
in an interest-bearing bank account all such distributions, or the amount
thereof which, when added to the value of such unissued Partnership Units, is
equal to the amount of and/or the cost of performing the Surviving Obligations.
The remedies provided for in clauses (a) and (b) of this Section 13.10 shall not
be mutually exclusive but the Partnership shall not be entitled to recover
through the exercise of such remedies more than
<PAGE>
95
the amount due it. The provisions of this Section 13.10 shall survive the
Closing.
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the day and year first above written.
TRANSFEROR:
----------
TURTLE CREEK ASSOCIATES
LIMITED PARTNERSHIP
By:________________________________
Name: George Krupp
Title: General Partner
By:________________________________
Name: Douglas Krupp
Title: General Partner
PARTNERSHIP:
-----------
BRI OP LIMITED PARTNERSHIP
By: Berkshire Realty Company, Inc.,
General Partner
By:________________________________
Name:
Title:
<PAGE>
BRI THE POINT LIMITED PARTNERSHIP
---------------------------------
AGREEMENT OF LIMITED PARTNERSHIP
THIS AGREEMENT OF LIMITED PARTNERSHIP dated as of the 20th day of October,
1995, by and between BRI Texas Apartments Limited Partnership as the General
Partner; and BRI OP Limited Partnership as the Limited Partner (together, the
"Partners"), and any such other persons or entities as may hereafter be admitted
to this Partnership as Limited Partners.
WHEREAS, the General Partner and the Limited Partner desire to form a
limited partnership pursuant to the Delaware Revised Uniform Limited Partnership
Act, Delaware Code Annotated, Title 6, Chapter 17 (the "Act"); and
WHEREAS, pursuant to a certain Contribution Agreement, dated as of
September 30, 1995, between Turtle Creek Associates Limited Partnership and the
Limited Partner, the property described on Schedule A hereto as the Limited
Partner Capital Contribution (the "Property") is to be contributed by Turtle
Creek Associates Limited Partnership to the Limited Partner and, pursuant to
such Contribution Agreement, the Limited Partner intends to direct that the
Property be conveyed to the Partnership instead of to itself.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereby agree as follows:
1. The name of the Partnership is BRI The Point Limited Partnership.
2. The character of the business intended to be transacted by the Partnership
is to acquire, own, develop, improve, operate, manage, maintain, lease, sell and
otherwise deal with the Property and to do all things incidental to the
foregoing and to engage in such related activities as are necessary, convenient
or incidental to the above.
1
<PAGE>
3. The address of the office of the Partnership at which shall be kept the
records and partnership documents of the Partnership is to be:
c/o The Berkshire Group
470 Atlantic Avenue
Boston, Massachusetts 02210
The agent for service of process for the Partnership shall be, and the
registered office of the Partnership in the State of Delaware shall be, c/o:
The Prentice-Hall Corporation System, Inc.
32 Loockerman Square - Suite L-100
Dover, Delaware 19904
4. The name and business address of each Partner, General and Limited Partner
being respectively designated, is as follows:
General Partner Address
--------------- -------
BRI Texas Apartments
Limited Partnership c/o The Berkshire Group
470 Atlantic Avenue
Boston, MA 02210
Limited Partner Address
--------------- -------
BRI OP Limited Partnership c/o The Berkshire Group
470 Atlantic Avenue
Boston, MA 02210
5. Profits, losses, credits and items thereof of the Partnership shall be
allocated, and cash, to the extent available for such purpose, shall be
distributed in the following percentages:
BRI Texas Apartments Limited Partnership 1.0%
BRI OP Limited Partnership 99.0%
6. The cash contributed and to be contributed by the General Partner is shown
on Schedule A. The cash contributed and capital to be contributed by the
Limited Partner is shown on Schedule A. No Limited Partner is obligated to
make any additional contribution to the capital of the Partnership.
2
<PAGE>
7. No Limited Partner has the right to transfer, assign or otherwise dispose of
its interest or withdraw from the Partnership or otherwise substitute
another person or entity for itself as a partner of the Partnership under
any circumstance.
8. No partner has a right to receive any distributions of property, including
cash, from the Partnership except to the extent the General Partner
determines to make distributions in accordance with Section 5 hereof.
9. No partner has a right to receive distributions which include a return of
all or any part of its contribution except to the extent the General Partner
determines to make such distributions in accordance with Section 5 hereof.
10. The Partnership will be dissolved and its affairs wound up on December 31,
2030, unless sooner dissolved in accordance with the provisions of the Act.
Notwithstanding the foregoing, if the Partnership shall own the Property six
months prior to the expiration of the stated term, the General Partner shall
have the right to extend such expiration date for an additional period of
forty (40) years by written notice thereof to the Limited Partners sent
prior to the expiration date and by filing at any time an amended
certificate of limited partnership setting forth such extended date.
11. Upon dissolution, termination, bankruptcy, expulsion, resignation or other
event of withdrawal of a general partner the Partnership shall terminate
unless the remaining partners elect within thirty days, by majority vote of
the remaining partners, to continue the Partnership business.
12. The General Partner shall have and may exercise all rights and powers
granted by the Act as from time to time in effect. The General Partner shall
have full and complete authority, without the consent or approval of the
Limited Partner, to act for and on behalf of the Partnership, including,
without limitation, the right to sell, mortgage, improve, lease and
otherwise deal with the Property.
3
<PAGE>
12A. The General Partner and the Partnership are authorized to execute a note
and mortgage or documents relating to the assumption of the same in regard
to a loan insured by the Secretary of Housing and Urban Development secured
by the Property and to execute a Regulatory Agreement and other documents
required by the Secretary in connection with such loan and the assumption
thereof. Any incoming general partner shall, as a condition of receiving an
interest in the Partnership, agree to be bound by the note, mortgage, and
Regulatory Agreement and other documents required in connection with the
FHA insured loan secured by the Property to the same extent and on the same
terms as the other general partners. Upon any dissolution, no title or
right to possession and control of the Property, and no right to collect
rents therefrom, shall pass to any person who is not bound by the
Regulatory Agreement in a manner satisfactory to the Secretary.
13. The General Partner may appoint and remove one or more officers of the
Partnership including, without limitation, a president, one or more
executive vice presidents, one or more other vice presidents, a treasurer,
one or more assistant treasurers, a controller, a secretary, and one or
more assistant secretaries. The General Partner may assign to any such
officer from time to time such duties and powers as the General Partner may
deem appropriate subject, however, to the general provisions of this
agreement with respect to the rights, powers and duties of the General
Partner.
14. The General Partner shall be entitled to such reimbursements of expenses as
are incurred by the General Partner on behalf of the Partnership.
15. The General Partner shall have no right to withdraw from the Partnership or
transfer some or all of its interest to a new or additional partner, except
upon the unanimous written consent of all of the partners.
16. Special Power of Attorney Relating to Continuance of Partnership: If the
----------------------------------------------------------------
business of the Partnership is continued after dissolution as described in
Section 11, each Limited Partner constitutes and appoints the remaining or
new general partners, and each of them, if more than one, irrevocably,
4
<PAGE>
recognizing their interest and that of the other partners herein, and
intending to create a durable power of attorney, as such Partners' true and
lawful attorney to execute, swear to and file whatever amended Certificates
they deem appropriate in the circumstances, and to take whatever action may
be necessary to continue the Partnership business under applicable law.
17. No person dealing with the Partnership, or its assets, whether as
mortgagee, assignee, purchaser, lessee, grantee or otherwise, shall be
required to investigate the authority of any General Partner purporting to
act on behalf of the Partnership, in selling, assigning, leasing,
mortgaging, or conveying any Partnership assets, nor shall any such
assignee, lessee, purchaser, mortgagee, or grantee be required to inquire
as to whether the approval of the Partners for any such sale, assignment,
lease, mortgage or transfer has been first obtained. Such person shall be
conclusively protected in relying upon a certificate of authority of, or in
accepting any instrument signed by any General Partner in the name and
behalf of, the Partnership or the General Partner.
18. The Partnership shall, to the extent provided below, indemnify a person who
was, is, or is threatened to be made a named Defendant or Respondent in a
proceeding because the person is or was a general partner or officer of the
Partnership. The indemnification required by this paragraph shall be
provided whenever it is determined, as provided below, that the person
seeking indemnification:
(1) Acted in good faith; and
(2) Reasonably believed:
(a) In the case of conduct in the person's official capacity as a
general partner or officer of the Partnership, that the person's
conduct was in the Partnership's best interest; and
(b) In all other cases, that the person's conduct was at least not
opposed to the Partnership's best interest; and
5
<PAGE>
(3) In the case of a criminal proceeding, had no reasonable cause to
believe that his conduct was unlawful.
A determination that the indemnification standards set forth above have
been met shall be made by special legal counsel selected by the holders of
a majority in interest of Limited Partners who at the time of the vote are
not named Defendants or Respondents in the proceeding. In the event that
such a majority in interest cannot be obtained, special legal counsel shall
be selected by a majority in interest of all Limited Partners.
19. The General Partner shall have the authority to employ such agents,
employees, managers, accountants, attorneys, consultants and other persons
necessary or appropriate to carry out the business and affairs of the
Partnership, including itself and whether or not any such persons so
employed are partners or affiliates, and to pay such fees, expenses,
salaries, wages and other compensation, including incentive fees, to such
persons as it shall, in its sole discretion, determine, provided that any
--------
payments to the partners or affiliates shall, unless otherwise specifically
provided herein, be on arms-length terms, comparable to such terms as would
be included in an employment or agency relationship with an unaffiliated
third party, and shall be paid from the Partnership's own funds and not
paid from the funds of any other person or entity.
20. This Agreement may be amended by and only by the General Partner together
with the consent of the Limited Partner.
21. A capital account shall be maintained for each partner ("Capital Account").
The Capital Accounts shall be determined and maintained in accordance with
Treasury Regulations Section 1.704-1(b)(2)(iv).
22. In accordance with Section 704(b) and 704(c) of the Internal Revenue Code
of 1986, as amended (the "Code") and the Regulations thereunder, income,
gain, loss, and deduction with respect to any property contributed to the
capital of the Partnership shall, solely for federal income tax purposes,
be allocated among the partners so as to take account of any variation
between its basis computed in accordance with
6
<PAGE>
Treasury Regulations Section 1.704-1(b) and its basis for federal income
tax purposes. In furtherance of the foregoing, the General Partner shall
determine, in its sole discretion and absolute discretion, which of the
methods prescribed in Regulations Section 1.704-3 or the equivalent
successor provision(s) of proposed, temporary or final Regulations the
Partnership shall employ.
23. Upon a dissolution of the Partnership, the General Partner or, if there is
no General Partner then remaining, such other person(s) designated by the
Limited Partner shall take full account of the Partnership assets and
liabilities, shall liquidate or distribute in kind any or all of its assets
as promptly as is consistent with obtaining the fair value thereof, and
shall apply and distribute the proceeds therefrom or property as the case
may be, after making reasonable provision for the debts or potential
obligations of the Partnership, in accordance with the positive balances in
the Capital Accounts of the partners, after taking into account all
adjustments to Capital Accounts. In the event that the General Partner has
a negative balance in its Capital Account following the liquidation of the
Partnership or such General Partner's interest, after taking into account
all Capital Account adjustments for the Partnership taxable year in which
such liquidation occurs, such General Partner shall pay to the Partnership
in cash an amount equal to the lesser of (a) the negative balance in such
General Partner's Capital Account or (b) its ratable share (based on its
share of the aggregate General Partner interest in the Partnership) of the
excess of 1.01% of the Capital Contributions of the Limited Partners over
the Capital Contributions previously made by the General Partner. Such
payments shall be made by the end of such taxable year (or, if later,
within ninety (90) days after the date of such liquidation) and shall, upon
liquidation of the Partnership, be paid to recourse creditors of the
Partnership or distributed to other partners in accordance with the
positive balances in their Capital Accounts.
24. Section 704 of the Code and the Regulations issued thereunder, including
but not limited to the provisions of such regulations addressing qualified
income offset provisions, minimum gain chargeback requirements and
allocations of
7
<PAGE>
deductions attributable to nonrecourse debt and partner nonrecourse debt,
are hereby incorporated by reference.
25. In the event the holders of the common stock of Berkshire Realty Company,
Inc. ("BRI"), in accordance with Article I, Section 3 of the Certificate of
Incorporation of BRI, approve a plan of liquidation of BRI, the Partnership
shall use its best efforts, to the extent permitted by law, to cause the
property held by the Partnership to be transferred to the Limited Partner
(or its designee) as a distribution in kind in satisfaction of all or part
(as applicable) of the Limited Partner's distribution rights as a limited
partner of the Partnership. To the extent the fair market value of such
property is greater than the value the Limited Partner would otherwise be
entitled to receive in satisfaction of its distribution rights at
liquidation, the Partners agree to take such actions as may be necessary to
effect the intent of the foregoing provision, including the sale to the
Limited Partner of all or a portion of the interests in the Partnership
held by the General Partner. The provisions in this Section 25 may be
waived, in whole or in part, by the Limited Partner.
26. The General Partner may, in the exercise of its reasonable discretion,
cause the Partnership to elect (if the Partnership has not theretofore
elected) pursuant to Section 754 of the Code to adjust the basis of
Partnership property.
IN WITNESS WHEREOF, the members of said Partnership have executed this
Agreement this 20th day of October 1995, under seal.
GENERAL PARTNER
BRI TEXAS APARTMENTS LIMITED PARTNERSHIP
By: BRI Texas Apartments-II, Inc.,
general partner
By:
---------------------------------
Its:
8
<PAGE>
LIMITED PARTNER
BRI OP LIMITED PARTNERSHIP
By: Berkshire Realty Company, Inc.,
general partner
By: [SIGNATURE APPEARS HERE]
---------------------------------
Its:
9
<PAGE>
SCHEDULE A
----------
Limited Partner Capital Contribution
- ------------------------------------
Cash Contributed as of the date of this Agreement:
$990
Property to be contributed on the closing date specified in the
Contribution Agreement:
All of the realty and personalty comprising The Point Apartments, located
in Silver Spring, Maryland including but not limited to the land and
buildings thereon, leases, accounts and equipment, subject to the mortgage
thereon.
General Partner Capital Contribution
- ------------------------------------
Cash Contributed as of the date of this Agreement:
$10
Cash to be contributed on the closing date specified in the Contribution
Agreement:
$161,600
10
<PAGE>
CERTIFICATE OF LIMITED PARTNERSHIP
OF
BRI THE POINT LIMITED PARTNERSHIP
This Certificate of Limited Partnership of BRI The Point Limited
Partnership (the "Limited Partnership") is being executed by the undersigned for
the purpose of forming a limited partnership pursuant to the Delaware Revised
Uniform Limited Partnership Act.
1. The name of the limited partnership is BRI The Point Limited
Partnership.
2. The address of the registered office of the limited partnership in
Delaware is 32 Loockerman Square, Suite L-100, Dover, Delaware 19904. The
limited partnership's registered agent at that address is The Prentice-Hall
Corporation System, Inc.
3. The name and address of the sole general partner is:
NAME ADDRESS
---- -------
BRI Texas Apartments Limited Partnership c/o The Berkshire Group
470 Atlantic Avenue
Boston, MA 02210
IN WITNESS WHEREOF, the undersigned, constituting the sole general partner
of the Partnership, has caused this Certificate of Limited Partnership to be
duly executed as of the 20th day of October, 1995.
BRI TEXAS APARTMENTS LIMITED PARTNERSHIP
By: BRI Texas Apartments-II, Inc. a general partner
By:
-------------------------------
Scott D. Spelfogel,
Assistant Secretary
<PAGE>
AGREEMENT OF RELEASE, ASSUMPTION
OF DEED OF TRUST NOTE, DEED OF TRUST
AND REGULATORY AGREEMENT
THIS AGREEMENT, is entered into as of the 20 day of March, 1996, by and
among TURTLE CREEK ASSOCIATES LIMITED PARTNERSHIP, a Texas limited partnership
(the "Transferor"), BRI THE POINT LIMITED PARTNERSHIP, a Maryland limited
partnership (the "Transferee"), and BERKSHIRE MORTGAGE FINANCE CORPORATION, a
Delaware corporation (the "Mortgagee").
WITNESSETH:
WHEREAS, the Mortgagee is the owner and holder of a certain Deed of Trust
Note (the "Note"), dated March 14, 1994, executed and delivered by Transferor as
evidence of a mortgage loan (the "Mortgage Loan") in the original principal
amount of $36,000,000 with interest at the rate of 7 5/8% per annum on the
unpaid balance until paid; and
WHEREAS, the Note is secured by that certain Deed of Trust (the "Mortgage")
of even date therewith, which Mortgage was recorded on March 14, 1994 at Liber
12407, Folio 431, pertaining to certain improved real property in County of
Montgomery, State of Maryland as more particularly described in Exhibit A and
identified as FHA Project No. 000-11102 (the "Project"); and
WHEREAS, the Mortgage Loan was insured by THE SECRETARY OF HOUSING
AND URBAN DEVELOPMENT acting by and through the FEDERAL HOUSING COMMISSIONER
("HUD") under Section 207 pursuant to Section 223(f) of the National Housing
Act, as amended, and Regulations thereunder promulgated by HUD (the "HUD
Regulations"); and
WHEREAS, in connection with the coinsurance of the Mortgage Loan by HUD,
Transferor and Mortgagee entered into that certain Regulatory Agreement for
Multifamily Housing Project Coinsured by HUD (the "Regulatory Agreement"), dated
March 14. 1994, and recorded at Liber 12407, Folio 438.
NOW, THEREFORE, in consideration of the consent of Mortgagee to the sale of
the Project by the Transferor to the Transferee. and in order to comply with the
requirements of the HUD Regulations, the parties hereto hereby agree as follows:
Section 1. Effective as of the date of recordation of the deed conveying
title to the Project to the Transferee and the recordation of this Agreement
(hereinafter referred to as the "Effective Date"), and except as limited below,
the Transferee hereby assumes and agrees to be
<PAGE>
bound by and to perform, keep and observe all of the obligations, duties,
liabilities, covenants and agreements of the Transferor under and pursuant to
the Note, the Mortgage, the Regulatory Agreement, and all other documents
heretofore executed and delivered and/or assumed by the Transferor in connection
with the Mortgage Loan (the "Transfer Documents").
The Transferee does not and shall not assume personal liability for
payments due under the Note, the Mortgage or the Regulatory Agreement, or for
matters not under its control, provided that the Transferee shall remain liable
only with respect to the matters hereinafter stated, namely:
(i) for funds or property of the Project coming into its hands which, by
the provisions thereof, it is not entitled to retain; and
(ii) for its own acts and deeds or acts and deeds of others which it has
authorized in violation of the provisions thereof.
The Transferee hereby agrees to be bound by the Mortgage, the Note, the
Regulatory Agreement and the Transfer Documents, subject to the foregoing
limitation of personal liability to the same extent as if it had been an
original party to said instruments.
Section 2. Effective as of the Effective Date, by its execution hereof, the
Mortgagee agrees that the Transferor shall be and it hereby is released from any
further obligations, duties responsibilities, covenants and agreements under the
Note, Mortgage, and the other Transfer Documents.
Section 3. The Transferee agrees that it shall comply fully with: (a) the
provisions of any laws prohibiting discrimination in housing on the basis of
race, color, creed, sex or national origin; and (b) the HUD Regulations
providing for non-discrimination and equal opportunity in housing. It is
understood and agreed that failure or refusal to comply with such provisions
shall be a property basis for the Secretary of HUD to take any corrective action
he may deem necessary, including, but not limited to, the rejection of future
applications for FHA mortgage insurance and the refusal to enter into future
contracts of any kind with which the Transferee is identified; and further, the
Secretary of HUD shall have a similar rights of corrective action with respect
to (i) any individuals who are officers, directors, principal stockholders,
trustees, managers, partners or associates of the Transferee; and (ii) any
corporation or any other type of business association or organization with which
the officers, directors, principal stockholders, trustees, managers, partners or
associates of the Transferee may be identified.
Section 4. Nothing herein shall-in anyway impair the Note or the security
now held for said indebtedness, or alter, waive, annul, vary or affect any
provision, condition or covenant therein, nor affect or impair any rights,
powers or remedies under the Note and the Mortgage, it being the intent of the
parties hereto that the terms and provisions of said Note and Mortgage shall
continue in full force and effect, except as modified hereby.
<PAGE>
Section 5. This Agreement may be executed in counterparts, each of which
when so executed and delivered shall be an original, but all of which together
shall constitute one and the same instrument.
Section 6. All of the terms, covenants, conditions and agreements hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, successors and assigns.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals as
of the day and year hereinabove first written.
TRANSFEROR:
TURTLE CREEK ASSOCIATES LIMITED
PARTNERSHIP, a Texas limited Partnership
WITNESS:
By:
Name: Douglas Krupp
Its: General Partner
TRANSFEREE:
WITNESS/ATTEST: BRI THE POINT LIMITED PARTNERSHIP,
A Maryland limited partnership
By: BRI Texas apartments Limited
Partnership, its General Partner
By: BRI Texas Apartments-II, Inc.,
its General Partner
By:
Name: Laurence Gerber
Its: President
Scott D. Spelfogel
Assistant Secretary
<PAGE>
MORTGAGEE:
WITNESS: BERKSHIRE MORTGAGE FINANCE
CORPORATION, a Delaware corporation
By:
Ronald F. Halpern
Executive Vice President
Attachment
Exhibit "A" [Legal Description]
CERTIFICATION
I hereby certify that I am an attorney duly admitted to practice before
the Court of Appeals of Maryland and that this Agreement of Release, Assumption
of Deed of Trust Note and Deed of Trust was prepared under my supervision.
Name
[ACKNOWLEDGMENTS APPEAR ON SUCCEEDING PAGES]
<PAGE>
ACKNOWLEDGMENTS
STATE OF Massachusetts
CITY OF SUFFOLK
On this , 20th day of March, 1996, before me appeared Douglas Krupp who,
being duly sworn, did say that she/he is the General Partner of Turtle Creek
Associates Limited Partnership and the person who executed the foregoing
instrument by virtue of the authority vested in her/him by Turtle Creek
Associates Limited Partnership, a Texas limited partnership and acknowledged the
same to be her/his free and voluntary act and deed for and on behalf of Turtle
Creek Associates Limited Partnership.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my notarial
seal on the day and year last above written.
(SEAL) Notary Public
My Commission Expires: October 5, 2001
<PAGE>
COMMONWEALTH OF MASSACHUSETTS
ss:
COUNTY OF SUFFOLK
On this 20 day of March, 1996, before me , June Asgeirsson, A Notary Public
in and for Massachusetts, personally appeared Laurence Gerber known to me to be
the person who is President of BRI TEXAS APARTMENTS-II, INC., the general
partner of BRI TEXAS APARTMENTS LIMITED PARTNERSHIP, which is the general
partner of BRI THE POINT LIMITED PARTNERSHIP, a Maryland limited partnership,
acknowledged to me that he/she did so sign said instrument in such capacity in
the name of and on behalf of BRI The Point Limited Partnership.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
NOTARY PUBLIC (Seal)
My Commission Expires: October 5, 2001
<PAGE>
COMMONWEALTH OF MASSACHUSETTS
ss:
COUNTY OF SUFFOLK
On this 19th day of March , 1996, before me Nancy Sexton, a Notary Public
in and for Massachusetts, personally appeared Ronald F. Halpern, known to me to
be the person who is the Executive Vice President of BERKSHIRE MORTGAGE FINANCE
CORPORATION, a Delaware corporation, acknowledged to me that he/she did so sign
said instrument in such capacity in the name of and on behalf of said
corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
NOTARY PUBLIC (Seal)
My Commission Expires: 10/30/98
<PAGE>
EXHIBIT A
METES AND BOUNDS
Beginning for the same at a point on the southerly North 49 degrees 51
minutes 56 seconds East right-of-way line of Columbia Pike, Maryland Route 29,
as shown on a plat of subdivision entitled "Parcel 'B' White Oak," recorded
among the Land Records of Montgomery County, Maryland in Plat Book 76 as Plat
Number 7609, thence running with and binding on said southerly right-of-way line
of Columbia Pike the following courses and distances, viz
1) North 49 degrees 51 minutes 56 seconds East, 506.45 feet to a point of
curvature; thence by a curve to the right
2) having a radius of 350.00 feet for an arc length of 373.16 feet, said
curve being subtended by a chord bearing of North 80 degrees 24 minutes 33
seconds East, a distance of 355.73 feet to a point of truncation of said right-
of-way line with the northwesterly right-of-way line of New Hampshire Avenue;
thence continuing with said right-of-way line
3) South 69 degrees 02 minutes 50 seconds East, 202.63 feet to a point;
thence
4) South 64 degrees 51 minutes 50 seconds East, 47.81 feet to a point;
thence
5) South 56 degrees 20 minutes 10 seconds East, 49.65 feet to a point;
thence
6) South 47 degrees 38 minutes 51 seconds East, 49.65 feet to a point;
thence
7) South 38 degrees 57 minutes 32 seconds East, 49.65 feet to a point;
thence
8) South 30 degrees 16 minutes 13 seconds East, 49.65 feet to a point;
thence
9) South 22 degrees 46 minutes 20 seconds East, 53.61 feet to a point;
thence
10) South 73 degrees 41 minutes 03 seconds West, 4.00 feet to a point of
curvature; thence running with the above mentioned northwesterly right-of-way
line of New Hampshire Avenue by curve to the left
11) having a radius of 4,961.07 feet for an arc length of 300.84 feet,
said curve being subtended by a chord being of South 18 degrees 03 minutes 11
seconds East, a distance of 300.80 feet to a point of tangency; thence
12) South 19 degrees 47 minutes 25 seconds East, 33.97 feet to a point;
thence
13) South 02 degrees 43 minutes 30 seconds West 102.45 feet to a point of
curvature;thence by a curve to the right
<PAGE>
EXHIBIT A - Continued
14) having a radius of 380.00 feet for an arc length of 234.04 feet, said
curve being subtended by a chord bearing of South 20 degrees 22 minutes 10
seconds West, a distance of 230.36 feet to a point of intersection of said
right-of-way with the northwesterly right-of-way line of Lockwood Drive as shown
on the aforementioned plat; thence running with Lockwood Drive the following
courses and distances viz:
15) South 61 degrees 01 minutes 10 West, 382.81 feet to a point; thence
leaving said northerly right-of-way line of Lockwood Drive
16) North 27 degrees 57 minutes 20 seconds West, 178.48 feet to a point of
curvature; thence
17) South 62 degrees 02 minutes 40 seconds West 652.56 feet to a point on
the southeasterly right-of- way line of Oak Leaf Drive as shown on the
aforementioned plat; thence
18) North 39 degrees 21 minutes 20 seconds West, 42.15 feet to a point;
thence by a curve to the right
19) having a radius of 381.35 feet for an arc length of 239.76 feet, said
curve being subtended by a chord bearing of North 21 degrees 20 minutes 40
seconds West, 235.83 feet to a point of tangency, said point being on the
southwesterly right-of-way line of Oak Leaf Drive as shown on the aforementioned
plat-, thence
20) North 03 degrees 20 minutes 00 seconds West, 527.50 feet to a point of
curvature; thence by a curve to the right
21) having a radius of 171.62 feet for an arc length of 54.83 feet, said
curve being subtended by a chord bearing of North 12 degrees 29 minutes 10
seconds West, 8 distance of 54.60 feet to point of tangency thence
22) North 12 degrees 52 minutes 00 seconds East, 38.87 feet to the point
of beginning.
Containing 1,116,408 square feet or 25.628 acres of land, more or less.
<PAGE>
DEED OF TRUST
THIS DEED OF TRUST made and entered into this 14th day of March, in the
year 1994, by and between TURTLE CREEK ASSOCIATES LIMITED PARTNERSHIP, a Texas
limited partnership organized and existing under the laws of the State of Texas,
having its principal place of business c/o Berkshire Realty Advisors Group, 470
Atlantic Avenue, Boston, MA 02210 hereinafter referred to as the "Grantor," and
Margaret E. Langevin of Montgomery County, Maryland, as Trustee, hereinafter
referred to as the "Trustee" and BERKSHIRE MORTGAGE FINANCE CORPORATION, a
Delaware corporation organized and existing under the laws of the State of
Delaware, with its principal office in the City of Boston, State of
Massachusetts and hereinafter referred to as the "Beneficiary" (which
designations shall include the respective successors and assigns and the
successors in the interest of the several parties).
WHEREAS the Grantor is justly indebted to the Beneficiary in the principal
sum of Thirty Six Million and 00/100 ~~~~~~~~~~~~~~~ Dollars ($36, 000, 000)
evidenced by a note of even date herewith bearing interest at 7.625% per annum
payable in monthly installments with a final maturity of April 1, 2029, which
note is identified as being secured hereby by a certificate thereon.
AND WHEREAS, the Grantor desires to secure to the Beneficiary the full and
punctual payment of said debt and interest thereon, and the performance of the
covenants herein contained, as well as any and all renewals or extensions of
said note, or of any part thereof, which interest thereon and also to secure the
reimbursement to the holder or holders of said note and to the Trustee or
substitute trustee, and any purchaser or purchasers, grantee or grantees under
any sale or sales under the provision of this Trust for all money which may be
advanced as herein provided for, and for any and all costs and expenses
(including reasonable attorney's fees) incurred or paid on account of any
litigation at law or in equity which may arise in respect to this Trust, or to
the indebtedness or to the property herein mentioned, or in obtaining possession
of the premises after any sale which may be made as hereinafter proved for:
NOW, THEREFORE, THIS DEED OF TRUST WITNESSETH: That the said Grantor, in
consideration of the premises and of One Dollar (1$), to it in hand paid by the
Trustee (the receipt of which, before the sealing and delivery of these
presents, is hereby acknowledged), has granted and conveyed, and does hereby
grant and convey unto the Trustee, in fee simple, the following-described land
and premises with the easements rights, ways and appurtenances thereunto
belonging, situates, and lying in County of Montgomery, State of Maryland, more
particularly described as follows:
SEE EXHIBIT A ATTACHED HERETO AND BY THIS AND OTHER REFERENCES, MADE A PART
HEREOF, FOR ATTACHED LEGAL DESCRIPTION OF THE LAND AND PREMISES.
The covenant of the grantor to pay principal and interest is included in
the note secured hereby for the purpose of establishing and continuing the
existence of the indebtedness. However, it is a condition of said covenant and
those contained herein that in the event of default under the terms hereof, the
holder shall take no action against the Grantor except such as may be necessary
to subject to the satisfaction of the indebtedness the property described herein
and any chattels appurtenant to the use thereof; PROVIDED, that nothing in this
condition and no action so taken
<PAGE>
shall operate to impair any obligation of the Grantor under the Regulatory
Agreement herein referred to and made part thereof.
It is stipulated and warranted that the loan hereby secured is transacted
solely for the purpose of carrying on or acquiring a business or commercial
investment within the meaning of Section 12-101 and 12-103 or the Commercial Law
Article of the Annotated Code of Maryland (1990 Repl.Vol.ed.) or any amendments,
additions and supplements thereof.
TOGETHER with all buildings and improvements of every kind and description now
or hereafter erected or placed thereon, and all fixtures including but not
limited to all gas and electric fixtures, engines and machinery, radiators,
heaters, furnaces, heating equipment, steam and hot water boilers, stoves,
ranges elevators, and motors, bathtubs, sinks, water closets, basins, pipes,
facets and other plumbing and heating fixtures, mantels, refrigerating plant and
refrigerators, where mechanical or otherwise, cooking apparatus and
appurtenances, furniture, shades, awnings, screens, blinds and other
furnishings, and
TOGETHER with all of the rents, issues, and profits which may arise or be had
therefrom, and all articles of personal property now or hereafter attached to or
used in and about the building or buildings now erected or hereafter to be
erected on the lands herein described which are necessary to the complete and
comfortable use and occupancy of such building or buildings for the purposes for
which they were or are to be erected, including all goods and chattels and
personal property as are ever used or furnished in operating a building or the
activities conducted therein, similar to the one described and referred to, and
all renewals or replacements thereof or articles in substitution therefor,
whether or not the same are or shall be attached to said building or buildings
in any manner. The parties hereto agree that to the extent permitted by law the
foregoing property shall be deemed to be real estate and affixed to the realty
and
TOGETHER with all building materials and equipment now or hereafter delivered to
said premises and intended to be installed therein.
TO HAVE AN TO HOLD the above granted and bargained premises together with
all the appurtenances, unto said Trustee, its successor in this trust and
assigns, forever, to its and their proper use and behoof.
IN AND UPON THE USES AND TRUSTS FOLLOWING that is to say:
FIRST: Until any default in payment of any matter of indebtedness hereby
secured as herein provided for or until breach of any of the covenants herein
contained to permit the said Grantor, its successors and assigns to possess and
enjoy said land and premises and to receive the rents issues and profits thereof
and on full payment of said note and of any extensions or renewals thereof and
interest thereon and all sums advanced or expended as herein provided and all
other proper costs, charges, expenses commissions, and half-commissions, at any
time before the sale hereinafter provided for, to release and reconvey unto and
at the cost of the said Grantor, or the party or parties then claiming under it,
the aforesaid land and premises.
<PAGE>
SECOND: Upon any default being made in the payment of said note or of any
installment of principal or interest thereon, or any renewal or extension
thereof or of any note or notes hereafter given for interest covering any
extension with interest thereon from maturity of the same, when and as the same
shall become due and payable; or upon any default in payment, when due of any
tax water rate or assessment, general or special, now or hereafter assessed
against said land and premises, or any part thereof, while this Trust exists; ro
upon any default in keeping, while this Trust exists, the buildings or other
improvements now or hereafter erected on said land insured against loss by fire
or other hazard in companies and amounts satisfactory to the Beneficiary, and
the Secretary of Housing and Urban Development, acting by and through the
Federal Housing Commissioner; or upon default in payment of demand of any sum or
sums advanced by the holder or holders of said note on account of any costs and
expenses of this Trust, or on account of any such tax or assessments, water rate
or insurance, or expense of ligation, or on account of any lien, deed of trust,
or mortgage on said land and premises prior in lien to this Trust, with interest
thereon at the rate specified in the note form date of advance; or upon default
in the performance of any of the covenants or agreements herein or in said note
contained; then upon any and every such default so made as aforesaid and a
continuation thereof for thirty (30) days after written notice as hereinafter
provided, the said Trustee, or substitute trustee, shall sell the aforesaid land
and premises and improvement at public auction at such time and place, upon such
terms and conditions, and after such previous public notice, with such
postponement of sale or resale, as the Trustee, or substitute trustee, shall
deem best for the interest of all parities concerned; and (the terms of sale
being complied with) shall convey the same in fee to the purchasers at the cost
of Grantor or of the purchaser of the land, premises and improvements so sold,
such purchaser being hereby discharged from all liability for the application of
the purchase money; shall apply the proceeds of sale (after paying all expenses
of sale, all taxes, water rates, and assessment thereon due, all sums advanced
as herein provided for, with interest as aforesaid, and a trustee's commission
of one per centum (1%) on the gross amount of sales), to the payment of the
aforesaid indebtedness or such much thereof as may then remain unpaid whether
then due or not, and the interest thereon to date of payment (it being agreed
that the said note shall upon such sale being made before the maturity of said
note, or before the maturity of any renewal or extensions thereof, be and become
immediately due and payable, at the election of the holder thereof), paying over
the surplus, if any, to the said Grantor, its successors and or assigns, upon
the surrender and delivery to the purchaser, his, her its or their heirs or
assigns, of possession of the land, premises, and improvements so sold and
conveyed as aforesaid, less the expense, if any, of obtaining possession
thereof.
The Grantor, in order more fully to protect the security hereof, covenants
and agrees as follows:
1. That it will pay the note at the times and in the manner provided
therein.
2. That is will not permit or suffer the use of any of the property for
any purpose other than the use for which the same was intended at the time this
Deed of Trust was executed.
3. That the Regulatory Agreement, if any, executed by the Grantor and the
Secretary of Housing and Urban Development, acting by and through the Federal
Housing Commission, which is being recorded simultaneously herewith, is
incorporated in and made a part of this Deed of Trust. Upon default under the
Regulatory Agreement and upon the request of the Secretary of Housing and
<PAGE>
Urban Development, acting by and through the Federal Housing Commissioner, the
Beneficiary, at its option, may declare this Deed of Trust in default and may
declare the whole of the indebtedness secured hereby to be due and payable.
4. That all rents, profits and income from the property covered by this deed
of Trust are hereby assigned to the Beneficiary for the purpose of discharging
the debt hereby secured. Permission is hereby given to Grantor, so long as no
default exists hereunder, to collect such rents, profits and income.
5. That upon default hereunder Beneficiary shall be entitled to the
appointment of a receiver by any court having jurisdiction, without notice, to
take possession and protect the property described herein and operate same and
collect the rents, profits and income therefrom.
6. That at the option of the Grantor the principal balance secured hereby may
be reamortized on terms acceptable to the Secretary of Housing and Urban
Devlopment, acting by and through the Federal Housing Commissioner if a partial
prepayment results from an award in condemnation in accordance with provision of
paragraph 16 herein, or from an insurance payment made in accordance with
provisions of paragraph 11 herein, where there is a resulting loss of project
income.
7. That, in order more fully to protect the security of this Deed of Trust,
the Grantor, together with and in addition to, the monthly payments of interest
or of principal and interest under the terms of the note secured hereby
beginning on the first day of the first month after the date hereof and monthly
thereafter until the said note is fully paid, will pay to the Beneficiary he
following sums:
(a) An amount sufficient to provide the Beneficiary with funds to pay the
next mortgage insurance premium if this instrument and the note
secured hereby are insured, or a monthly service charge, if they are
held by the Secretary of Housing and Urban Development, acting by and
through the Federal Housing Commissioner, as follows:
(I) If and so long as said note of even date and this instrument are
insured or are reinsured under the provisions of the National
Housing Act, an amount sufficient to accumulate in the hands of
the Beneficiary one (1) month prior to its due date the annual
mortgage insurance premium, in order to provide such Beneficiary
with funds to pay such premium to the Secretary of Housing and
Urban Development, acting by and through the Federal Housing
Commissioner pursuant to the National Housing Act, as amended,
and applicable Regulations thereunder, or
(II) Beginning with the first day of the month following an
assignment of this instrument and the note secured hereby to the
Secretary of Housing and Urban Development, acting by and
through the Commissioner, a monthly service charge which shall
be an amount equal to one-twelfth (1/12) of one-half ( 1/2)
percentum of the average outstanding principal balance due on
the note computed for each successive year beginning with the
first of the month
<PAGE>
following such assignment, without taking into account
delinquencies or prepayments.
(b) A sum equal to the ground rents, if any, next due, plus the premiums
that will next become due and payable on policies of fire and other
property insurance covering the premises covered hereby, plus water
rates, taxes and assessment next due on the premises covered hereby,
plus water rates, taxes and assessments next due on the premises
covered hereby (all as estimated by the Beneficiary) less all sums
already paid therefore divided by the number of months to elapse
before one month prior to the date when such ground rents, premiums,
water rates, taxes and special assessments.
(c) All payments mentioned in the two preceding subsections of this
paragraph and all payments to be made under the note secured hereby
shall be added together and the aggregate amount thereof shall be paid
each month in single payment to be applied by Beneficiary to the
following items in the order set forth:
(I) premium charges under the Contract of Insurance with the
Secretary of Housing and Urban Development, acting by and
through the Federal Housing Commissioner or service charge;
(II) ground rents, taxes, special assessments, water rates, property
insurance premiums;
(III) interest on the note secured hereby;
(IV) amortization of the principal of said note.
Any deficiency in the amount of any such aggregate monthly payment shall,
unless paid prior to the due date of the next such payment, constitute a default
under this Deed of Trust.
8. Any excess funds accumulated under (b) of the preceding paragraph remaining
after payment of the items therein mentioned, shall be credited to subsequent
monthly payments of the same nature required thereunder; but if any such item
shall exceed the estimate therefore the Grantor shall without demand forewith
make good the deficiency. Failure to do so before the due date of such item
shall be a default hereunder. In case of termination of the Contract of
Mortgage Insurance by prepayment of the debt in full, or otherwise (except as
hereinafter provided), accumulations under (a) of the preceding paragraph hereof
not required to meet payments due under the Contract of Mortgage Insurance,
shall be credited to the Grantor. If the property is sold under foreclosure or
is otherwise acquired by the Beneficiary after default, any remaining balance of
the accumulations under the preceding paragraph shall be credited to the
principal of the debt secured hereby as of the date of commencement of
foreclosure proceedings or as of the date the property is otherwise acquired;
and accumulations under (a) of the preceding paragraph shall be likewise
credited unless required to pay sums due the Secretary of Housing and Urban
Development, acting by and through the Federal Housing Commissioner under the
Contract of Mortgage Insurance.
9. That the Grantor will pay all ground rents, if any, taxes, assessments,
water rates and other governmental or municipal charges or impositions to the
extent provision therefor has not been made
<PAGE>
by monthly payments as hereinbefore provided before the same become delinquent
or subject to interest or penalties, and in default thereof the Beneficiary may
pay the same. All such sums so paid by the Beneficiary plus any sums which the
Beneficiary has advanced to pay mortgage insurance premiums or property and
other hazard insurance premiums not provided for by monthly payments hereunder
shall be added to the principal sum secured by this Deed of Trust, shall bear
interest at the rate specified in the note from the date of the advance and
shall be due and payable to the Beneficiary upon demand.
10. To keep all buildings, fences and other improvements now or hereafter
erected on said land and premises in good order and repair and not to do or
permit waste.
11. That the Grantor will keep the improvements now existing or hereafter
erected on the mortgaged property insured against loss by fire and such other
hazards, casualties, and contingencies, as may be stipulated by the Commissioner
upon the insurance of the mortgage and other hazards as may be required from
time to time by the Beneficiary, and all such insurance shall be carried in such
companies and be for such periods as may be required by the Beneficiary, and be
in an amount which will comply with the coinsurance clause percentage applicable
to the location and character of the property but in no event shall the amounts
of coverage be less than eighty percent of the insurable values and equipment of
the property or not less than the unpaid balance of the insured Deed of Trust,
whichever is lesser, and in default thereof, the Beneficiary shall have the
right to effect insurance. Such policies shall be in the standard form and
endorsed with standard mortgagee clause with loss payable to the Beneficiary and
the Secretary of Housing and Urban Development, acting by and through the
Federal Housing Commissioner as interest may appear, and shall be deposited with
the Beneficiary.
That if the premises covered hereby, or any part thereof, shall be damaged
by fire or other hazard against which insurance is held as hereinbefore
provided, the amounts paid by any insurance company pursuant to the contract of
insurance shall, to the extent of the indebtedness then remaining unpaid, be
paid to the Beneficiary, and at its option, may be applied to the debt or
released for the repairing or rebuilding of the premises.
12. To pay all costs and expenses and attorney's fees (including continuation
of abstract) of the Trustee and of the Beneficiary in case of any litigation
involving this property or in presenting claim under any administration or other
proceeding where proof of claim is required by law to be filed.
13. The irrevocable power to appoint a substitute trustee is hereby expressly
granted to the Beneficiary, its successor and assigns, to be exercised at any
time hereafter without notice and without specifying any reason therefor, by
filing for record in the office where this instrument is recorded a deed of
appointment. The Grantor for itself, its successors and assigns, and the
Trustee herein named, or that hereafter may be substituted hereunder, expressly
waives notice of the exercise of this power and the giving of bond by any
trustee, as well as any requirement for application to any court for the
removal, appointment or substitution of any trustee hereunder.
14. The said Grantor will not assign the rent or any part of the rent of said
land and premises or any building now or hereafter erected thereon, nor demolish
or remove any building now or hereafter
<PAGE>
erected on said land and premises, without the written consent of the
Beneficiary. In event of default in the performance of any of the covenants or
conditions hereof, upon request of the Beneficiary the Trustee, either in person
or by agent, shall be entitled to immediate possession of said land and premises
and to receive and collect the rents, issues, and profits thereof, and if the
Grantor shall, after default and after demand for possession, remain in
possession of said land and premises, the Grantor shall be a tenant at will
thereof of the Trustee and shall at once surrender possession demand of the
Trustee, whom may thereupon enter and take possession and collect the rents,
issues, and profits of said land and premises and apply them, less five per
centum (5%) thereof to be reserved for commission, in payment of the expenses
incurred in obtaining possession and toward the repairs and insurance of said
land and premises, and the payment of taxes and assessments thereon, and in
redemption from sales therefor and of the indebtedness secured hereby. And it is
hereby covenanted, understood, and agreed that the assignment of said rents, and
the collection and application of the same as herein made and authorized, shall
in no manner be taken or held to interfere with or abridge the power of sale and
disposition granted to the Trustee hereunder for any of the defaults mentioned
herein, nor shall the said assignment of rents and the collection and
application of the same, as herein made and authorized, in any manner at law or
in equity, discharge or relive the Grantor, its successors and assigns, from the
full payment of the balance of the indebtedness secured by the this Deed of
Trust in strict accordance with the terms hereof and of the note hereby secured.
15. The Trustee may act hereunder and may sell and convey said land and
premises under the power granted by this instrument, although the Trustee has
been, may now be and may hereafter be, attorney or agent of the Beneficiary in
respect to the loan made by the Beneficiary evidenced by the note or this Deed
of Trust, or in respect to any matter or business whatsoever. The Beneficiary
may bid and become the purchaser at any sale under this Deed of Trust. It is
further agree that, if said property be advertised for sale as herein provided
and not sold, the Trustee shall be entitled to a reasonable commission not
exceeding one-half (1/2) of the commission provided in case of sale, to be
computed on the amount of principal then unpaid.
16. That if the land and premises, or any part thereof, be condemned under any
power of eminent domain or acquired for any public use or quasi-public use, the
damages, proceeds, and consideration for such acquisition to the extent of the
full amount of indebtedness upon this Deed of Trust and the note secured hereby
remaining unpaid are hereby assigned by the Grantor to the Beneficiary and shall
be paid forewith to said Beneficiary, to be applied by it on account of the
indebtedness hereby secured.
17. That it, the said Grantor, will not create or permit a lien to exist
against said land and premises inferior or superior to the lien of this Deed of
Trust.
18. A breach of any promise in this Deed of Trust or in the note secured hereby
shall constitute a default hereunder, and if such default shall continue for
thirty (30) days after written notice as provided herein, then at the option of
the Beneficiary the entire indebtedness hereby secured shall become due,
payable, and collectible then and thereafter as the Beneficiary may elect,
regardless of the date of maturity.
19. Any notice, demand or request required or permitted hereunder to be given
to the Grantor
<PAGE>
shall be sufficiently given if in writing and either (a) sent to the owner of
the land and premises last appearing on the records of the Beneficiary by
registered firstclass mail, postage prepaid at the address last appearing on
said records; or (b) delivered to or served upon an officer of the owner or at
the site of the mortgaged property upon the superintendent or assistant
superintendent of the owner, or upon a person performing the functions of
superintendent or assistant superintendent.
AND the said Grantor does hereby covenant for itself, its successors and
assigns, that it is seized of said land and premises in fee simple and has the
right to convey the same to the said Trustee, that the said Trustee shall have
quiet possession thereof, free from all encumbrances, and that it, the said
Grantor, will execute such further assurance of the said land and premises as
may be requisite.
Grantor covenants and agrees that so long as this Deed of Trust and the
said note secured hereby are insured, or held under the provisions of the
National Housing Act, it will not execute or file for record any instrument
which imposes a restriction upon the sale or occupancy of the mortgaged property
on the basis of race, color, creed or national origin. Upon any violation of
this undertaking the Beneficiary may, at its option declare the unpaid balance
of the debt secured hereby immediately due and payable.
IN TESTIMONY WHEREOF, the said party hereto of the first part has caused
these presents to be executed in its general partner name by , its
President attested by its Secretary, and its corporate seal to be
hereunto affixed, said officers being thereunto duly authorized, all as of the
day, month, and year first hereinabove written.
TURTLE CREEK ASSOCIATES LIMITED PARTNERSHIP,
a Texas limited partnership
by: Douglas Krupp, a general partner
ATTEST:
STATE OF MASSACHUSETTS
COUNTY OF SUFFOLK to wit
I hereby certify that on this 10th day of March in the year 1994 before me,
the subscriber, personally appeared Douglas Krupp, the general partner of Turtle
Creek Associates Limited Partnership, a Texas limited partnership on behalf of
the said limited partnership did acknowledge the foregoing instrument to be the
act and deed of said limited partnership.
Witness my hand and notarial seal the day and year first above written.
(SEAL) Nancy E. Sexton
<PAGE>
DEED OF TRUST
$ 36,000,000 Silver Spring , Maryland
March 14, 1994
FOR VALUE RECEIVED, TURTLE CREEK ASSOCIATES LIMITED PARTNERSHIP, a Texas
limited partnership promises to pay to BERKSHIRE MORTGAGE FINANCE CORPORATION, a
Delaware corporation, or order at its principal office 470 Atlantic Avenue,
Boston, Massachusetts 02210, or at such other place as may be designated in
writing by the holder of this note, the principal sum of Thirty Six Million and
xx/100--------------------------------------------------------------------------
_____________________________Dollars ( $36,000,000), with interest from date at
the rate of; 7 5/8 per centum (7.625%) per annum on the unpaid balance until
paid. The principal and interest shall be payable in monthly installments as
follows:
Interest alone payable on the first day of April, 1994. Thereafter
commencing n the first day of May, 1994, monthly installments of interest
and principal shall be paid in the sum of Two Hundred Forty Five Thousand
Nine Hundred Forty Eight and 02 /100 Dollars ($245,948 02) each, such
payment to continue monthly thereafter on the first day of each month until
the entire indebtedness has been paid. In any event, the balance of
principal (if any) remaining unpaid, plus accrued interest, shall be due
and payable on the first day of April 2029. The installments of interest
and principal shall be applied first to interest at the rate of seven and
five-eighths (7.625%) percent per annum upon the principal sum or so much
thereof as shall from time to time remain unpaid, and the balance thereof
shall be applied on the account of principal.
If default be made in the payment of any installment under this note, and
if such default is not made good prior to the due date of the next such
installment, the entire principal sum and accrued interest shall at once become
due and payable without notice, at the option of the holder of this note.
Failure to exercise this option shall not constitute a waiver of the right to'
exercise the same in the event of any subsequent default.
All parties to this note, whether principal, surety, guarantor, or endorser
hereby waive presentment for payment, demand, protest, notice of protest, and
notice of dishonor.
<PAGE>
IN TESTIMONY WHEREOF, TURTLE CREEK ASSOCIATES LIMITED PARTNERSHIP, a Texas
limited partnership has caused this instrument to be executed in its corporate
name by its President attested by its Secretary, and its corporate seal to be
hereunto affixed, all as of the day, month, and year first above written.
TURTLE CREEK ASSOCIATES LIMITED PARTNERSHIP, a
Texas limited partnership
By:
a general partner
ATTEST:
This note is identified by the signature of one of the Trustees int he Deed
of Trust securing it.
Margaret E. Langevin, Trustee
THIS IS TO CERTIFY that this is the note described I, and secured by, Deed of
Trust of even date herewith, and in the same principal amount as herein and
covering real estate in the County of Montgomery, State of Maryland.
Dated this 14th day of March, 1994
Nancy E. Sexton
Notary Public Notary Public
Commonwealth of Massachusetts
Commission Expires 10-30-98 My Commission expires 10/30/98
<PAGE>
STATE OF MARYLAND
Loan No.
Deed Of Trust Note
Turtle Creek Associates
Limited Partnership, a Texas
limited partnership
TO
Berkshire Mortgage Finance
Corporation, a Delaware
corporation
No. 000-11102-PM
Insured under Section 223(f) pursuant
to Section 207 of the National
Housing Act and Regulations pub-
lished thereunder
In effect on December 29, 1993
To the extent of advances approved by the
secretary of Housing and Urban Develop-
ment acting by and through the Federal
Housing Commissioner
By:
(Authorized Agent)
Date
A total sum of $36,000,000 has been
approved for insurance hereunder by the
Secretary of Housing and Urban Develop-
ment acting by and through the Federal
Housing Commissioner
By:
(Authorized Agent)
Date March 14, 1994
Pay to the order of without recourse
Berkshire Mortgage Finance Corporation
BY:
Ronald F. Halpern, Executive V.P.
<PAGE>
BRI THE POINT LIMITED PARTNERSHIP
---------------------------------
FIRST AMENDMENT TO
AGREEMENT OF LIMITED PARTNERSHIP
THIS FIRST AMENDMENT TO AGREEMENT OF LIMITED PARTNERSHIP is dated as of the
15th day of March, 1996, by and between BRI Texas Apartments Limited Partnership
as the General Partner; and BRI OP Limited Partnership as the Limited Partner.
WHEREAS, the General Partner and the Limited Partner formed a limited
partnership (the "Partnership") by entering into an Agreement of Limited
Partnership (the "Agreement") dated as of October 20, 1995 and wish to amend
the Agreement.
NOW THEREFORE, the parties hereto agree as follows:
1. That Section 12 of the Agreement shall be and hereby is amended to add
the following to said section:
Notwithstanding any other provision in this Agreement, so long as
the Property is encumbered by a mortgage insured by FHA, the
Partnership shall not, without the prior written consent of the
HUD (i) change the term of the Partnership, (ii) be voluntarily
dissolved, or (iii) amend this Section. In the event that any
provision of this Agreement conflicts with any provisions(s) of
the Regulatory Agreement dated March 14, 1994, recorded at Liber
12407, Folio 438, the Regulatory Agreement provision(s) shall
control.
Except as otherwise provided herein, the parties hereto confirm the
Agreement in its entirety.
IN WITNESS WHEREOF, the members of said Partnership have executed this
Agreement as of the date first above shown, under seal.
GENERAL PARTNER
BRI TEXAS APARTMENTS LIMITED PARTNERSHIP
By: BRI Texas Apartments-II, Inc.,
general partner
By: /s/ [SIGNATURE APPEARS HERE]
---------------------------------
Its: Secretary
LIMITED PARTNER
BRI OP LIMITED PARTNERSHIP
By: Berkshire Realty Company, Inc.,
general partner
By: /s/ [SIGNATURE APPEARS HERE]
---------------------------------
Its: Secretary
