Carl W. and Barbara H. Patterson - Page 7

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               experts selected by Buyer to inspect the books,                        
               records and premises.  SELLER IS CONVEYING THE                         
               PREMISES AS IS WHERE IS.  ALL WARRANTIES OF EVERY                      
               KIND WITH RESPECT TO THE PREMISES, THE FINANCIAL                       
               CONDITION OF THE PREMISES, THE BOOKS AND RECORDS                       
               OF SELLER, PROFIT AND LOSS STATEMENTS, BALANCE                         
               SHEETS, ARE HEREBY DISCLAIMED INCLUDING BUT                            
               WITHOUT LIMITING THE WARRANTY OF MERCHANTABILITY                       
               AND HABITABILITY AND FITNESS FOR PURPOSE INTENDED.                     
               SELLER'S BUSINESS WHICH HAS PREVIOUSLY BEEN                            
               FURNISHED BY SELLER TO BUYER DOES NOT CONSTITUTE                       
               A REPRESENTATION FOR ANY PURPOSE.  THE FINANCIAL                       
               BUSINESS OPERATION RECORDS OF THE SELLER ARE                           
               FURNISHED TO THE BUYER FOR INFORMATIONAL PURPOSES                      
               ONLY. BUYER AGREES THAT BUYER WILL HAVE ITS OWN                        
               INDEPENDENT AUDITORS, FINANCIAL EXPERTS, TAX                           
               ADVISORS, ATTORNEYS, ACCOUNTANTS TO REVIEW THE                         
               BUSINESS OPERATIONS AND BUYER WILL SATISFY BUYER'S                     
               SELF, WITHOUT RELIANCE UPON ANY INFORMATION BY                         
               SELLER, AS TO WHETHER BUYER INTENDS TO PURCHASE                        
               THE PROPERTIES OR NOT.                                                 
               Shortly after signing the Second Addendum, petitioner and              
          petitioner Barbara H. Patterson, together with their accountant,            
          traveled to Houston to examine the financial records of Skylane             
          Apartments.  Upon arriving there, petitioners were given access             
          to Mr. Suiter's records regarding Skylane Apartments, including             
          rent receipts and bank deposits.                                            
               By December 19, 1990, petitioner was unable to make the                
          downpayment of $2,550,000, and the sale of Skylane Apartments did           
          not close.  The Earnest Money Contract expired, and no additional           
          extensions were granted.                                                    
               On or before December 20, 1990, petitioner retained an                 
          attorney, John Trueheart (Mr. Trueheart), to seek recovery of the           
          amounts paid to Mr. Suiter.                                                 

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