UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 16, 2005
MULTI-BENEFIT REALTY FUND '87-1
(Exact name of Registrant as specified in its charter)
California 0-16684 94-3026785
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or File Number) Identification Number)
organization)
55 Beattie Place
Post Office Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligations of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
Multi-Benefit Realty Fund '87-1 (the "Registrant"), a California limited
partnership, owns a 99% interest in Hunt Club Associates, Ltd., (the
"Partnership"). The Partnership owns Hunt Club Apartments, a 200-unit apartment
complex located in Indianapolis, Indiana ("Hunt Club"). On August 16, 2005, the
Partnership and four other partnerships that own apartment complexes containing
a total of 1,324 units (the "Selling Partnerships"), entered into a Purchase and
Sale Contract (the "Purchase Agreement") with a third party, Prime Quest
Management, LLC, an Illinois limited liability company, (the "Purchaser") to
sell the five apartment complexes owned by the Selling Partnerships to the
Purchaser for a total sales price of approximately $39,131,000, of which
$4,911,500 represents the sales price for Hunt Club. The Purchaser is also
purchasing two additional apartment complexes from affiliates of the general
partner pursuant to two separate purchase and sale agreements. Each of the
Selling Partnerships is affiliated with AIMCO Properties, L.P., an affiliate of
the general partner of the Partnership.
The following is a summary of the terms and conditions of the Purchase
Agreement, which summary is qualified in its entirety by reference to the
Purchase Agreement, a copy of which will be filed with the Registrant's Form
10-QSB for the quarterly period ended September 30, 2005.
PURCHASE PRICE. The total purchase price is approximately $39,131,000, of which
$4,911,500 represents the sales price allocation to Hunt Club, subject to
certain prorations and adjustments at the closing. The Purchaser delivered an
initial deposit of approximately $321,000. The Partnership is allocated
approximately $40,000 of the initial deposit. Until the expiration of the
feasibility period, the Purchaser has the right, in its sole and absolute
discretion, to recover the entire deposit. Within one day after the feasibility
period expires, the Purchaser is required to deposit an additional payment of
approximately $449,000. The Partnership is allocated approximately $56,000 of
the additional deposit. After the expiration of the feasibility period, both the
initial and the additional deposit become nonrefundable.
CLOSING. The expected closing date for the transaction is the earlier to occur
of 10 days after the satisfaction or waiver of all conditions to closing
contained in the Purchase Agreement or November 15, 2005. The Selling
Partnerships have the right to extend the closing for up to thirty days to
satisfy any condition to closing, or such later date as is mutually acceptable
to both parties. Additionally, the closing is contingent on the Purchaser
closing on the two additional apartment complexes mentioned above, which are
being purchased pursuant to separate agreements. The closing is also subject to
customary closing conditions and deliveries.
COSTS AND FEES. With respect to Hunt Club, the Purchaser will pay any transfer,
sales, use, gross receipts or similar taxes, recording costs, any premiums or
fees required to be paid with respect to the title policy and one-half of the
customary closing costs of the escrow agent. The Partnership will pay the base
premium for its title policy and one-half of the customary closing costs of the
escrow agent relating to Hunt Club.
REPRESENTATIONS AND WARRANTIES. The Selling Partnerships and the Purchaser each
made limited representations and warranties to the other.
RISK OF LOSS. The risk of loss or damage to the five apartment complexes by
reason of any insured or uninsured casualty during the period through and
including the closing date will be borne by the Selling Partnerships. The
Selling Partnerships must maintain all of their existing insurance coverage on
the five apartment complexes in full force and effect until the closing date.
ASSIGNMENT. With the exception of an assignment to an affiliate of the
Purchaser, the Purchase Agreement is not assignable by the Purchaser without
first obtaining the prior written approval of the Selling Partnerships.
DEFAULTS AND REMEDIES. If the Purchaser defaults in its obligations to deliver
when required any required deposits, the purchase price or any other specified
deliveries, then, immediately and without notice or cure, the Purchaser shall
forfeit such deposits to the Selling Partnerships, and neither party shall be
obligated to proceed with the purchase and sale of the five apartment complexes.
The Selling Partnerships expressly waive the remedies of specific performance
and additional damages for any such defaults by the Purchaser.
If the Selling Partnerships, prior to the closing, default on their
representations, warranties, covenants, or obligations, the Purchaser has the
option of (i) seeking specific performance of the Selling Partnerships'
obligation to deliver the deed pursuant to the Purchase Agreement (ii)
terminating the Purchase Agreement, having returned any deposits made by the
Purchaser, and recovering, as its sole recoverable damages its documented direct
and actual out-of-pocket expenses and costs in an amount not to exceed in
aggregate for all Selling Partnerships of $32,000 of which approximately $4,000
would be allocated to the Partnership.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MULTI-BENEFIT REALTY FUND '87-1
By: ConCap Equities, Inc.
General Partner
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
Date: August 22, 2005