SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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) June 28, 1996
BALCOR PENSION INVESTORS-II
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Exact Name of Registrant
Illinois 0-10225
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State or other jurisdiction Commission file number
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 36-3114027
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Address of principal I.R.S. Employer
executive offices Identification
Number
60015
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Zip Code
Registrant's telephone number, including area code:
(847) 267-1600
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
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Sherwood Acres Apartments, Phases I and II
In 1982, the Partnership funded loans of $1,510,915 and $1,618,985 each
collateralized by a wrap-around mortgage on Phases I and II, respectively, of
Sherwood Acres Apartments, Baton Rouge, Louisiana. In 1986, the borrower
defaulted on its obligations under the terms of the loans and commenced
bankruptcy proceedings. The Partnership obtained title to Phases I and II
(together, the "Property") in 1988 subject to the existing first mortgage
loans. In 1993, the Partnership refinanced the first mortgage loans with two
new first mortgage loans from a third party, each in the principal amount of
$5,812,500, and collateralized by Phase I and Phase II, respectively.
On June 28, 1996, the Partnership contracted to sell the Property for a sale
price of $19,726,000 to an unaffiliated party, BH TFL, Inc. On or before July
23, 1996, upon completion of the purchaser's due diligence review, the
purchaser will deposit $197,260 into an escrow account as earnest money. The
remaining portion of the sale price will be payable in cash at closing,
scheduled to occur on August 15, 1996. The purchaser will receive a credit
against the purchase price of $500,000 for deferred maintenance on the
Property. From the proceeds of the sale, the Partnership will pay the
outstanding balances of the first mortgage loans which are expected to have a
total outstanding principal balance of approximately $11,364,000 at closing and
$240,000 to an unaffiliated party as a brokerage commission. An affiliate of
the third party providing property management services for the Property will
receive a fee for services rendered in connection with the sale of the Property
of $144,195. The Partnership will receive the remaining proceeds of
approximately $7,477,800, less closing costs. Neither the General Partner nor
any affiliate will receive a brokerage commission in connection with the sale
of the Property. The General Partner will be reimbursed by the Partnership
for actual expenses incurred in connection with the sale.
Affiliates of the General Partner have simultaneously contracted to sell 5
other properties to the purchaser.
The closing is subject to the satisfaction of numerous terms and conditions.
There can be no assurance that all of the terms and conditions will be complied
with and, therefore, it is possible the sale of the Property may not occur.
ITEM 5. OTHER INFORMATION
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Cumberland Pines Apartments
As previously reported, on April 29, 1996, the Partnership contracted to sell
Cumberland Pines Apartments, Atlanta, Georgia, to an unaffiliated party, Earl
Phillips, L.L.C., a Georgia limited liability company, for a sale price of
$9,200,000. The sale closed June 21, 1996. From the proceeds of the sale, the
Partnership paid approximately $102,000 in closing costs and $184,000 to an
unaffiliated party as a brokerage commission. The Partnership received
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approximately $8,914,000 representing the remaining proceeds. The Partnership
received an additional $50,000 from the purchaser for extending the closing
date.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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(a) FINANCIAL STATEMENTS AND EXHIBITS:
None
(B) PRO FORMA FINANCIAL INFORMATION:
None
(C) EXHIBITS:
(2) (a) Agreement of Sale and attachment thereto relating to the
sale of Sherwood Acres Apartments, Phases I and II,
Baton Rouge, Louisiana.
(b) Amendment to Agreement of Sale and Escrow Agreement
relating to the sale of Sherwood Acres Apartments, Phases
I and II, Baton Rouge, Louisiana.
(99) (a) First Amendment to Agreement of Sale and Escrow Trust
Instructions relating to the sale of Cumberland Pines
Apartments, Atlanta, Georgia.
(b) Second Amendment to Agreement of Sale and
Escrow Trust Instructions relating to the sale of
Cumberland Pines Apartments, Atlanta, Georgia.
(c) Third Amendment to Agreement of Sale and
Escrow Trust Instructions relating to the sale
of Cumberland Pines Apartments, Atlanta, Georgia.
No information is required under Items 1, 3, 4, 6 and 8 and these items
have, therefore, been omitted.
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Signature
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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.
BALCOR PENSION INVESTORS-II
By: Balcor Mortgage Advisors, an Illinois
general partnership, its general partner
By: RGF-Balcor Associates, an Illinois general
partnership, a partner
By: The Balcor Company, a Delaware corporation,
a partner
By: /s/ Jerry M. Ogle
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Jerry M. Ogle, Vice President
and Secretary
Dated: July 12, 1996
<PAGE>
Sherwood Acres (Phases I & II)
AGREEMENT OF SALE
THIS AGREEMENT, entered into as of the 28th day of June, 1996, by and
between BH TFL, INC. ("Purchaser") and SHERWOOD PARTNERS LIMITED PARTNERSHIP, an
Illinois Limited Partnership ("Seller").
WITNESSETH:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to
sell at the price of Nineteen Million Seven Hundred Twenty-Six Thousand and
No/100 Dollars ($19,726,000.00), that certain property ("Property") in Baton
Rouge, Louisiana, more particularly described on Exhibit A attached hereto,
which Property is known as Sherwood Acres Apartments (Phases I and II).
Included in the Purchase Price is all of the personal property set forth on
Exhibit B, which shall be transferred to Purchaser at Closing (as hereinafter
defined) by a Bill of Sale.
2. PURCHASE PRICE. The Purchase Price shall be paid as follows:
a. Upon the execution of this Agreement, the sum of $197,260.00
("Deposit") to be held in escrow by and in accordance with the provisions
of the Escrow Agreement ("Escrow Agreement") among Seller, Purchaser and
Ticor Title Services ("Escrow Agent") attached hereto as Exhibit C;
b. On the Closing Date (as hereinafter defined), $19,726,000.00
(inclusive of the Deposit) adjusted in accordance with the prorations by
federally wired "immediately available" funds delivered to the Title
Insurer no later than 12:00 Noon on the Closing Date.
3. TITLE COMMITMENT AND SURVEY.
a. Seller shall obtain and deliver to Purchaser a title commitment
(the "Title Commitment") for an owner's standard title insurance policy
(the "Title Policy") for the Property issued by Chicago Title and Trust
Company (the "Title Insurer") together with copies of all documents of
record shown thereon (the "Title Documents"). In addition, Seller shall
obtain and deliver to Purchaser a survey of the Property (the "Survey").
For purposes of this Agreement, "Permitted Exceptions" shall mean: (a)
real estate taxes and special assessments not yet due and payable; (b)
matters caused by or through the actions of Purchaser, and (c) those title
and survey exceptions deemed Permitted Exceptions pursuant to Paragraph
3.b below. All other exceptions to title shall be referred to as
"Unpermitted Exceptions." The Title Commitment shall be conclusive
evidence of good title as therein shown as to all matters
insured by the policy, subject only to the exceptions therein stated. On
the Closing Date, Seller shall cause the Title Insurer to issue the Title
Policy or a "marked up" commitment in conformity with the Title
Commitment. Purchaser and Seller shall equally share the costs of the
Title Policy; however, Purchaser shall pay for "extended coverage" and
any special endorsements which Purchaser requires.
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b. If the Title Commitment or the Survey discloses any exceptions
to title not acceptable to Purchaser, other than the Permitted Exceptions,
Purchaser may give written notice to Seller (the "Title Notice") of
Purchaser's disapproval of any such exceptions (a "Disapproved Title
Exception") within ten (10) days following receipt by Purchaser of the
Title Commitment, Title Documents and Survey. Any title exceptions which
are set forth in the Title Commitment or on the Survey to which Purchaser
does not object in accordance with the immediately preceding sentence
shall be deemed Permitted Exceptions. With regard to a Disapproved Title
Exception for which Purchaser gives Seller a Title Notice, Seller may, but
shall not have the obligation to, bond over, cure or cause the Title
Insurer to remove such Disapproved Title Exception from the Title
Commitment and Seller shall give written notice to Purchaser of its
election within seven (7) days of receipt of the Title Notice. Any such
Disapproved Title Exception which Seller elects to bond over, cure or
cause the Title Insurer to remove shall be Permitted Exceptions. If
Seller does not elect to bond over, cure or cause the Title Insurer to
remove any Disapproved Title Exception, Purchaser may either waive its
objection or terminate this Agreement by giving written notice to Seller
of its election within three (3) days after receipt of Seller's notice.
If Purchaser does not give such written notice within such three (3) day
period: (i) Purchaser shall have waived its right to terminate this
Agreement pursuant to this Paragraph 3.b.; and (ii) such Disapproved Title
Exception shall be deemed a Permitted Exception. If Purchaser terminates
this Agreement by written notice to Seller within such three (3) day
period: (i) Purchaser shall promptly deliver to Seller copies of all
studies, reports and other investigations obtained by Purchaser in
connection with its due diligence of the Property, (ii) the Deposit
deposited by Purchaser shall be immediately paid to Purchaser, together
with any interest earned thereon, and (iii) neither Purchaser nor Seller
shall have any right, obligation or liability under this Agreement, except
for Purchaser's obligation to indemnify Seller and restore the
Property, as more fully set forth in Paragraph 7a.
4. CONDITION OF TITLE/CONVEYANCE. Seller agrees to convey fee simple
title to the Property by Act of Cash Sale ("Sale") in recordable form subject
only to the Permitted Exceptions. The Sale shall be made by Seller with no
warranty of title except for claims arising by, through or under Seller. If
Seller is unable to convey title to the Property subject only to the Permitted
Exceptions because of the existence of an additional title exception
("Unpermitted Exception"), then Purchaser can elect to take title to the
Property subject to the Unpermitted Exception or terminate this Agreement. If
Purchaser elects to terminate this Agreement, then the Deposit plus all accrued
interest shall be delivered to the Purchaser and, except for Purchaser's
obligation to indemnify Seller and restore the Property as set forth in
Paragraph 7a., neither party shall have any further liability hereunder.
5. PAYMENT OF CLOSING COSTS. Purchaser and Seller shall equally share
the costs of the documentary stamps with reference to the Sale and all other
stamps, intangible, documentary, recording, sales tax and surtax imposed by law
with reference to any other documents delivered in connection with this
Agreement. However, Purchaser shall pay for all costs in connection with any
mortgage Purchaser obtains.
<PAGE>
6. DAMAGE, CASUALTY AND CONDEMNATION.
a. If the Property suffers damage as a result of any casualty prior
to the Closing Date and can be repaired or restored in the case of real
property for $100,000 or less, or in the case of Personal Property, for
$10,000 or less, then Seller shall commence the repair or restoration in
an expeditious manner. Seller shall retain all insurance proceeds. If
the cost of repair and restoration exceeds those amounts, then Seller can
elect to either: (a) repair and restore same, in which event the Closing
Date will be extended until such date as may reasonably be required to
complete the repair or restoration; or (b) terminate this Agreement upon
notice to Purchaser served within twenty (20) business days of such
casualty. If Seller elects to terminate this Agreement pursuant to this
Paragraph, then Purchaser will have the option to accept the Property in
its damaged condition together with an assignment from Seller of all
insurance proceeds and receive a credit at Closing in the amount of the
deductible, provided Purchaser notifies Seller by notice served within
twenty (20) days after receipt of Seller's notice of election to
terminate.
b. If condemnation proceedings ("Proceedings") have been instituted
against the Property and such Proceedings are in an amount in excess of
$100,000.00, then Purchaser can elect to either take the Property subject
to the Proceedings and an assignment of Seller's interest in the
Proceedings or terminate this Agreement. If Purchaser elects to terminate
this Agreement, it shall be by notice to the Seller within five (5) days
after Seller notifies Purchaser of the Proceedings.
c. If the Agreement is terminated pursuant to this Paragraph, then
the Deposit plus the interest accrued thereon shall be returned to the
Purchaser and, except for Purchaser's obligation to indemnify Seller and
restore the Property as set forth in Paragraph 7a., neither party shall
have any further liability hereunder.
7. INSPECTION AND AS-IS CONDITION.
a. (i) During the period commencing on May 10, 1996 and
ending at 5:00 p.m. Chicago time on July 8, 1996 (said period being herein
referred to as the "Inspection Period"), Purchaser and the agents,
engineers, employees, contractors and surveyors retained by Purchaser may
enter upon the Property, at any reasonable time and upon reasonable prior
notice to Seller, to inspect the Property, including a review of leases
located at the Property, and to conduct and prepare such studies, tests
and surveys as Purchaser may deem reasonably necessary and appropriate.
In connection with Purchaser's review of the Property, Seller has
delivered to Purchaser copies of the current rent roll for the Property,
the most recent tax and insurance bills, utility account numbers, service
contracts, and unaudited year end 1994 and 1995 and unaudited year to date
1996 operating statements.
(ii) All of the foregoing tests, investigations and studies to
be conducted under this Paragraph 7a. by Purchaser shall be at Purchaser's
sole cost and expense and Purchaser shall restore the Property to the
condition existing prior to the performance of such tests or
<PAGE>
investigations by or on behalf of Purchaser. Purchaser shall defend,
indemnify and hold Seller and any affiliate, parent of Seller, and all
shareholders, employees, officers and directors of Seller or Seller's
affiliate or parent (hereinafter collectively referred to as "Affiliate of
Seller") harmless from any and all liability, cost and expense (including
without limitation, reasonable attorney's fees, court costs and costs of
appeal) suffered or incurred by Seller or Affiliates of Seller for injury
to persons or property caused by Purchaser's investigations and inspection
of the Property. Purchaser shall undertake its obligation to defend set
forth in the preceding sentence using attorneys selected by Seller, in
Seller's sole discretion. Prior to commencing any such tests, studies and
investigations, Purchaser shall furnish to Seller a certificate of
insurance evidencing comprehensive general public liability insurance
insuring the person, firm or entity performing such tests, studies and
investigations and listing Seller and Purchaser as additional insureds.
(iii) If Purchaser is dissatisfied with the results of the
tests, studies or investigations performed or information received
pursuant to this Paragraph 7a., Purchaser shall have the right to
terminate this Agreement by giving written notice of such termination to
Seller at any time prior to the expiration of the Inspection Period. If
written notice is not given by Purchaser pursuant to this paragraph 7a.
prior to the expiration of the Inspection Period, then the right of
Purchaser to terminate this Agreement pursuant to this paragraph 7a. shall
be waived. If Purchaser terminates this Agreement by written notice to
Seller prior to the expiration of the Inspection Period: (i) Purchaser
shall promptly deliver to Seller copies of all studies, reports and other
investigations obtained by Purchaser in connection with its due diligence
during the Inspection Period; and (ii) the Deposit deposited by Purchaser
shall be immediately paid to Purchaser, together with any interest earned
thereon, and neither Purchaser nor Seller shall have any right, obligation
or liability under this Agreement, except for Purchaser's obligation to
indemnify Seller and restore the Property, as more fully set forth in this
Paragraph 7a. Notwithstanding anything contained herein to the contrary,
Purchaser's obligation to indemnify Seller and restore the Property, as
more fully set forth in this Paragraph 7a., shall survive the termination
of this Agreement.
b. Purchaser is not relying on Seller having made any inquiry as to
the condition of the Property or the leases. Purchaser acknowledges and
agrees that it will be purchasing the Property based solely upon its
inspection and investigations of the Property and that Purchaser will be
purchasing the Property "AS IS" and "WITH ALL FAULTS" based upon the
condition of the Property as of the date of this Agreement, subject to
reasonable wear and tear and toss by fire or other casualty or
condemnation from the date of this Agreement until the Closing Date.
Purchaser expressly waives the warranty of fitness and the guarantee
against hidden or latent vices (defects in the Property sold which render
it useless or render its use so inconvenient or imperfect that Purchaser
would not have purchased it had it known of the vice or defect) provided
by law in Louisiana, more specifically, that warranty imposed by
Louisiana Civil Code 2520 et seq with respect to Seller's warranty against
latent or hidden defects of the property sold, or any other applicable
law, not even for a return of the purchase price. Purchaser forfeits the
<PAGE>
right to avoid the sale or reduce the purchase price on account of a
hidden or latent vice or defect in the Property. This provision has been
specifically called to the attention of the Purchaser and fully explained
to the Purchaser, and the Purchaser acknowledges that it has read and
understands this waiver of all express or implied warranties and accepts
the Property without any express or implied warranties. Without limiting
the foregoing, Purchaser acknowledges that, except as may otherwise be
specifically set forth elsewhere in this Agreement, neither Seller nor its
consultants, brokers or agents have made any other representations or
warranties of any kind upon which Purchaser is relying as to any matters
concerning the Property, including, but not limited to, the condition of
the land or any improvements, the existence or nonexistence of asbestos,
lead in water, lead in paint, radon, underground or above ground storage
tanks, petroleum, toxic waste or any Hazardous Materials or Hazardous
Substances (as such terms are defined below), the tenants of the Property
or the leases affecting the Property, economic projections or market
studies concerning the Property, any development rights, taxes, bonds,
covenants, conditions and restrictions affecting the Property, water or
water rights, topography, drainage, soil subsoil of the Property, the
utilities serving the Property or any zoning, environmental or building
laws, rules or regulations affecting the Property. Seller makes no
representation that the Property complies with Title III of the Americans
With Disabilities Act or any fire codes or building codes. Purchaser
hereby releases Seller from any and all liability in connection with any
claims which Purchaser may have against Seller, and Purchaser hereby
agrees not to assert any claims, for damage, loss, compensation,
contribution, cost recovery or otherwise, against Seller, whether in
tort, contract, or otherwise, relating directly or indirectly to the
existence of asbestos or Hazardous Materials or Hazardous Substances on,
or environmental conditions of, the Property, or arising under the
Environmental Laws (as such term is hereinafter defined), or relating in
any way to the quality of the indoor or outdoor environment at the
Property. This release shall survive the Closing. As used herein, the
term "Hazardous Materials" or "Hazardous Substances" means (i) hazardous
wastes, hazardous materials, hazardous substances, hazardous constituents,
toxic substances or related materials, whether solids, liquids or
gases, including but not limited to substances defined as "hazardous
wastes," "hazardous materials," "hazardous substances," "toxic
substances," "pollutants," "contaminants," "radioactive materials," or
other similar designations in, or otherwise subject to regulation under,
the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended ("CERCLA"), 42 U.S.C. Section 9601 et seq.; the Toxic
Substance Control Act ("TSCA"), 15 U.S.C. Section 2601 et seq.; the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1802; the
Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. Section 9601,
et seq.; the Clean Water Act ("CWA"), 33 U.S.C. Section 1251 et seq.; the
Safe Drinking Water Act, 42 U.S.C. Section 300f et seq.; the Clean Air Act
("CAA"), 42 U.S.C. Section 7401 et seq.; and in any permits, licenses,
approvals, plans, rules, regulations or ordinances adopted, or other
criteria and guidelines promulgated pursuant to the preceding laws or
other similar federal, state or local laws, regulations, rules or
ordinance now or hereafter in effect relating to environmental matters
(collectively the "Environmental Laws"); and (ii) any other substances,
<PAGE>
constituents or wastes subject to any applicable federal, state or
locallaw, regulation or ordinance, including any Environmental Law, now or
hereafter in effect, including but not limited to (A) petroleum, (B)
refined petroleum products, (C) waste oil, (D) waste aviation or motor
vehicle fuel, (E) asbestos, (F) lead in water, paint or elsewhere, (G)
radon, (H) Polychlorinated Biphenyls (PCB's) and (I) ureaformaldehyde.
c. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods
of time in which Seller owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at
Purchaser's request solely as illustrative material. Seller makes no
representation or warranty that such material is complete or accurate or
that Purchaser will achieve similar financial or other results with
respect to the operations of the Property, it being acknowledged by
Purchaser that Seller's operation of the Property and allocations of
revenues or expenses may be vastly different than Purchaser may be able to
attain. Purchaser acknowledges that it is a sophisticated and
experienced purchaser of real estate and further that Purchaser has relied
upon its own investigation and inquiry with respect to the operation of
the Property and releases Seller from any liability with respect to such
historical information.
8. CLOSING. The closing ("Closing") of this transaction shall be on
August 15, 1996 ("Closing Date"), at the office of the Title Insurer, at which
time Seller shall deliver possession of the Property to Purchaser.
9. CLOSING DOCUMENTS.
a. On the Closing Date, Purchaser shall deliver to Seller an
executed closing statement, the balance of the Purchase Price, and
such other documents as may be reasonably required in order to
consummate the transaction as set forth in this Agreement.
b. On the Closing Date, Seller shall deliver to Purchaser
possession of the Property, the Sale (in the form of Exhibit E
attached hereto) subject to the Permitted Exceptions and those
Unpermitted Exceptions waived by Purchaser; an inventory of the
Personal Property and a Bill of Sale for the same (in the form of
Exhibit F attached hereto); an executed closing statement; an
executed assignment and assumption of all service contracts (in the
form of Exhibit G attached hereto); an executed assignment and
assumption of all leases and security deposits (in the form of
Exhibit H attached hereto); updated rent roll; a notice to the
tenants of the transfer of title and the assumption by Purchaser of
the landlord's obligations under the leases and the obligation to
refund the security deposits (in the form of Exhibit I attached
hereto); a non-foreign affidavit (in the form of Exhibit J attached
hereto) and such other documents as may be reasonably required by the
Title Insurer in order to consummate the transaction as set forth in
this Agreement.
<PAGE>
10. DEFAULT BY PURCHASER. THE DEPOSIT DEPOSITED INTO THE ESCROW IS TO
SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND UNDERTAKINGS
UNDER THIS AGREEMENT. IN THE EVENT OF ANY DEFAULT OF THE PURCHASER UNDER THE
PROVISIONS OF THIS AGREEMENT, SELLER SHALL RETAIN THE DEPOSIT AND THE INTEREST
THEREON AS SELLER'S SOLE RIGHT TO DAMAGES OR ANY OTHER REMEDY. THE PARTIES
HAVE AGREED THAT SELLER'S ACTUAL DAMAGES, IN THE EVENT OF A DEFAULT BY
PURCHASER, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICAL TO DETERMINE.
THEREFORE, BY PLACING THEIR INITIALS BELOW, THE PARTIES ACKNOWLEDGE THAT THE
DEPOSIT HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES' REASONABLE
ESTIMATE OF SELLER'S DAMAGES.
11. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF THE DEPOSIT THEN ON
DEPOSIT WITH THE ESCROW AGENT, TOGETHER WITH ANY INTEREST ACCRUED THEREON, AND
THIS AGREEMENT SHALL TERMINATE AND, EXCEPT FOR PURCHASER'S OBLIGATION TO
INDEMNIFY SELLER AND RESTORE THE PROPERTY AS SET FORTH IN PARAGRAPH 7a.,THE
PARTIES SHALL HAVE NO FURTHER LIABILITY TO EACH OTHER AT LAW OR IN EQUITY.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF SELLER'S DEFAULT
IS ITS REFUSAL TO DELIVER THE SALE, THEN PURCHASER WELL BE ENTITLED TO SUE FOR
SPECIFIC PERFORMANCE, PROVIDED THAT AT THE TIME OF THE FILING OF THE COMPLAINT,
PURCHASER SHALL DEPOSIT WITH THE ESCROW AGENT THE AMOUNT OF THE PURCHASE
INCLUSIVE OF THE DEPOSIT.
12. a. PRORATIONS. Rents (exclusive of delinquent rents, but including
prepaid rents); refundable security deposits (which will be assigned to and
assumed by Purchaser and credited to Purchaser at Closing); water and other
utility charges; fuels; prepaid operating expenses; management fees in the
amount of 5% of collections; real and personal property taxes; and other
similar items shall be adjusted ratably as of 12:01 a.m. on the Closing Date
("Proration Date"), and credited or debited to the balance of the cash due at
Closing. If the Title Company has not received the cash due to Seller by 12:00
Noon on the Closing Date, then the Proration Date shall be extended to 11:59
P.M. on the Closing Date. If for any reason the Proration Date is earlier than
the Closing Date, then for the period from the Proration Date through the
Closing Date, Purchaser shall be entitled to the benefit of all of the income
from the Property and shall bear the burden of all of the operating expenses of
the Property, including, but not limited to, insurance, service contracts,
employee wages and benefits, management fees, utility costs and interest on the
existing mortgages encumbering the Property (if any). If the amount of any of
the items to be prorated is not then ascertainable, the adjustment thereof
shall be on the basis of the most recent ascertainable data. All prorations
will be final except as to Delinquent Rents referred to in 12b. below.
b. DELINQUENT RENTS. If, as of the Closing Date, any rent is in arrears
for thirty (30) days or less, then the first rent collected by Purchaser will
be delivered to Seller for the Delinquent Rent. If rent is in arrears for more
than thirty (30) days, then rents collected by Purchaser shall first be applied
to current rent and then to Delinquent Rent. Any amounts shall be paid by
Purchaser to Seller within 10 days of receipt of such amounts. This
subparagraph of this Agreement shall survive the Closing and the delivery and
recording of the Sale.
<PAGE>
c. DEFERRED MAINTENANCE CREDIT. At Closing, Purchaser shall receive a
credit against the Purchase Price for deferred maintenance of the Property in
the amount of $500,000.00.
13. RECORDING. This Agreement shall not be recorded and the act of
recording by Purchaser shall be an act of default hereunder by Purchaser and
shall be subject to the provisions of Paragraph 10. In the event this
Agreement is recorded in default of this Agreement, it shall not be deemed to
affect or encumber title to the Property, and it shall not be deemed to create
or establish any right, claim, interest or privilege in the Property in favor
of Purchaser.
14. ASSIGNMENT. The Purchaser shall not have the right to assign its
interest in this Agreement without the prior written consent of the Seller.
Any assignment or transfer of, or attempt to assign or transfer, Purchaser's
interest in this Agreement shall be an act of default hereunder by Purchaser
and subject to the provisions of Paragraph 10. Seller hereby consents to an
assignment to any partnership in which the Purchaser is a general partner,
provided such assignment is effected at least ten (10) days prior to the
Closing Date. However, Purchaser shall remain liable for all of the
Purchaser's obligations and undertakings set forth in this Agreement and the
exhibits attached hereto.
15. BROKER. The parties hereto represent and warrant that no broker
commission or finder fee is due and payable in connection with this transaction
other than to Sage Properties (to be paid by Seller). Seller's commission to
Sage Properties shall only be payable out of the proceeds of the sale of the
Property in the event the transaction set forth herein closes. Purchaser
agrees to indemnify, defend and hold harmless the Seller and any partner,
affiliate, parent of Seller, and all shareholders, employees, officers and
directors of Seller or Seller's partner, parent or affiliate (each of the above
is individually referred to as a "Seller Indemnitee") from all claims,
including attorneys' fees and costs incurred by a Seller Indemnitee as a result
of anyone's claiming by or through Purchaser any fee, commission or
compensation on account of this Agreement, its negotiation or the sale hereby
contemplated, other than Sage Properties. Purchaser does now and shall at all
times consent to a Seller Indemnitee's selection of defense counsel. Seller
agrees to indemnify, defend and hold harmless the Purchaser and all
shareholders, employees, officers and directors of Purchaser or Purchaser's
parent or affiliate (each of the above is individually referred to as a
"Purchaser lndemnitee") from all claims, including attorneys' fees and costs
incurred by a Purchaser Indemnitee as a result of anyone's claiming by or
through Seller any fee, commission or compensation on account of this
Agreement, its negotiation or the sale hereby contemplated, other than Sage
Properties. Seller does now and shall at all times consent to a Purchaser
Indemnitee's selection of defense counsel.
16. SELLER'S REPRESENTATIONS AND WARRANTIES AND LIABILITY.
a. Any reference herein to Seller's knowledge, representation,
warranty or notice of any matter or thing, shall only mean such knowledge
or notice that has actually been received by Phillip Schechter or Reid
Reynolds, the asset manager of the Property, and any representation or
<PAGE>
warranty of the Seller is based upon those matters of which Phillip
Schechter or Reid Reynolds has actual knowledge. Any knowledge or notice
given, had or received by any of Seller's agents, servants or employees
shall not be imputed to Seller or the individual partners or the general
partner of Seller.
b. Subject to the limitations set forth in subparagraph a. above,
Seller hereby makes the following representations and warranties, all of
which are made to the best of Seller's knowledge, none of which shall
survive the Closing and delivery of the Sale:
i. The present use and occupancy of the Property conform with
applicable building and zoning laws and Seller has received no notice
that any such laws, rules or regulations are being violated.
ii. The rent rolls which Seller has submitted to the Purchaser
and updated as of the Closing Date are true and accurate.
iii. Seller has no knowledge of any pending or threatened
litigation, claim, cause of action or administrative proceeding
concerning the Property, except as set forth on Exhibit D attached
hereto.
iv. As of the Closing Date the management agreement with the
manager of the Property will have been terminated, and all employment
contracts, if any, will have been terminated.
17. ENVIRONMENTAL REPORT. Attached to this Agreement as Exhibit K are
the following reports (together, the "Report") of the Property, which Seller is
delivering to Purchaser, at Purchaser's request: (a) Phase I Environmental Site
Assessment Report, dated April 30, 1993, prepared by H+CGL Albuquerque Office,
designated as Job No. 45004.15, and (b) Phase I Environmental Site Assessment
Report Addendum, dated April 14, 1993, prepared by H+CGL Albuquerque Office,
designated as Job No. 45004.16. Seller makes no representation or warranty
that the Report is accurate or complete. Purchaser hereby releases Seller from
any liability whatsoever with respect to the Report, including, without
limitation, the matters set forth in the Report, the accuracy and/or
completeness of the Report.
18. LIMITATION OF SELLER'S LIABILITY. No general or limited partner of
Seller, nor any of its respective beneficiaries, shareholders, partners,
officers, agents, employees, heirs, successors or assigns shall have any
personal liability of any kind or nature for or by reason of any matter or
thing whatsoever under, in connection with, arising out of or in any way
related to this Agreement and the transactions contemplated herein, and
Purchaser hereby waives for itself and anyone who may claim by, through or
under Purchaser any and all rights to sue or recover on account of any such
alleged personal liability.
19. TIME OF ESSENCE. Time is of the essence of this Agreement.
<PAGE>
20. NOTICES. Any notice or demand which either party hereto is required
or may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by overnight courier
such as Federal Express or by facsimile or made by United States registered or
certified mail addressed as follows:
TO SELLER: c/o The Balcor Company
Bannockburn Lake Office Complex
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attn: Ilona Adams
with copies to: The Balcor Company
Bannockburn Lake Office Complex
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
847/677-2900
847/982-4027 (FAX)
and
Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, Illinois 60661
Attn.: Daniel J. Perlman, Esq.
312/902-5532
312/902-1061 (FAX)
TO PURCHASER: BH TFL, Inc.
400 Locust Street
Suite 690
Des Moines, Iowa 50309
Attn: Harry Bookey
515/244-2622
515/244-2742 (FAX)
with a copy to: Mr. Gary Myers
c/o Davis, Hockenberg
666 Walnut
Suite 2500
Des Moines, Iowa 50309
515/288-2500
515/243-0654 (FAX)
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be
deemed to be delivered or made on the next business day if sent by overnight
courier, or on the same day if sent by facsimile before the close of business,
or the next day if sent by facsimile after the close of business, or on the 4th
<PAGE>
business day after the same is deposited in the United States Mail as
registered or certified matter, addressed as above provided, with postage
thereon fully prepaid. Any such notice, demand or document not given,
delivered or made by registered or certified mail or by overnight courier or by
facsimile as aforesaid shall be deemed to be given, delivered or made upon
receipt of the same by the party to whom the same is to be given, delivered or
made. Copies of all notices shall be served upon the Escrow Agent.
21. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute
three (3) copies of this Agreement and three (3) copies of the Escrow Agreement
and forward them to Seller for execution, accompanied with the Deposit payable
to the Escrow Agent. Seller will forward one (1) copy of the executed
Agreement to Purchaser and will forward the following to the Escrow Agent:
a. Deposit;
b. One (1) fully executed copy of this Agreement; and
c. Three (3) copies of the Escrow Agreement signed by the parties
with a direction to execute two (2) copies of the Escrow Agreement and
deliver a fully executed copy to the Purchaser and the Seller.
22. GOVERNING LAW. The provision contained herein with reference to
retention of the Deposit in the event of Purchaser's default shall be governed
by the laws of the State of Illinois. The remaining provisions of this
Agreement shall be governed by the laws of the State of Louisiana.
23. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all other negotiations, understandings and
representations made by and between the parties and the agents, servants and
employees.
24. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
25. CAPTIONS. Paragraph titles or captions contained herein are inserted
as a matter of convenience and for reference, and in no way define, limit,
extend or describe the scope of this Agreement or any provision hereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date set forth above.
PURCHASER:
BH TFL, INC.
By: /s/ Harry Bookey
------------------------------------
Name: Harry Bookey
Its: President
SELLER:
SHERWOOD PARTNERS LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Sherwood Partners, Inc.,
an Illinois corporation
By: /s/ Phillip A. Schechter
-------------------------------------
Name: Phillip A. Schechter
Its: Authorized Agent
<PAGE>
Jim Charnquist of Sage Properties ("Broker") executed this Agreement in its
capacity as a real estate broker and acknowledges that the fee or commission
due it from Seller as a result of the transaction described in this Agreement
is as set forth in that certain Listing Agreement, dated as of April 12, 1996
between Seller and Broker (the "Listing Agreement"). Broker also acknowledges
that payment of the aforesaid fee or commission is conditioned upon the Closing
and the receipt of the Purchase Price by the Seller. Broker agrees to deliver
a receipt to the Seller at the Closing for the fee or commission due Broker and
a release stating that no other fees or commissions are due to it from Seller
or Purchaser.
SAGE PROPERTIES
By:
---------------------------------------
Name:
---------------------------------------
Title:
---------------------------------------
<PAGE>
EXHIBITS
A - Legal
B - Personal Property
C - Escrow Agreement
D - Litigation
E - Act of Cash Sale
F - Bill of Sale
G - Assignment of Service Contracts
H - Assignment of Leases and Security Deposits
I - Notice to Tenants
J - Non-Foreign Affidavit
K - Phase I Environmental Report
<PAGE>
AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT
THIS AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT (this
"Amendment") is made and entered into as of the 2nd day of July, 1996, by and
among SHERWOOD PARTNERS LIMITED PARTNERSHIP, an Illinois limited partnership
("Seller"), BH TFL, INC. ("Purchaser") and TICOR TITLE SERVICES ("Escrow
Agent").
W I T N E S S E T H:
WHEREAS, Seller and Purchaser are parties to that certain Agreement of
Sale entered into as of June 28, 1996 (the "Original Agreement"), pursuant to
which Seller agreed to sell to Purchaser, and Purchaser agreed to purchase from
Seller, the "Property" (as defined in the Original Agreement);
WHEREAS, pursuant to the Original Agreement Seller, Purchaser and Escrow
Agent entered into that certain Escrow Agreement, dated June 28, 1996 (the
"Escrow Agreement"); and
WHEREAS, Seller and Purchaser now desire to amend the Original Agreement
and the Escrow Agreement pursuant to the terms and provisions set forth herein.
NOW, THEREFORE, for and in consideration of the premises and mutual
agreements contained herein, the payment of Ten and No/100 Dollars ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Seller, Purchaser and Escrow Agent agree that the Original
Agreement and the Escrow Agreement are amended as follows:
1. All capitalized terms used in this Amendment, to the extent not
otherwise expressly defined herein, shall have the same meanings ascribed to
such terms in the Original Agreement.
2. The reference to July 8, 1996 in Paragraph 7a(i) of the Original
Agreement and Paragraph 2 of the Escrow Agreement are hereby deleted and "July
23, 1996" is hereby substituted in their place.
3. Notwithstanding anything to the contrary contained in the Original
Agreement and the Escrow Agreement, the Deposit shall be delivered by Purchaser
to Escrow Agent on or before July 23, 1996 in the event Purchaser does not
elect to terminate the Agreement pursuant to Paragraph 7a. of the Agreement and
Paragraph 2 of the Escrow Agreement.
4 Except as amended herein, the terms and conditions of the Original
Agreement and the Escrow Agreement shall continue in full force and effect and
are hereby ratified in their entirety.
5. This Amendment may be executed in multiple counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same agreement.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
<PAGE>
Executed as of the date first written above.
SELLER:
SHERWOOD PARTNERS LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Sherwood Partners, Inc., an Illinois corporation
By: /s/Phillip A. Schechter
---------------------------------
Name: Phillip A. Schechter
-------------------------------
Its: Authorized Agent
--------------------------------
PURCHASER:
BH TFL, INC.
By: /s/Harry Bookey
-----------------------------
Harry Bookey
President
ESCROW AGENT:
TICOR TITLE SERVICES
By: /s/R. W. Vaughan
---------------------------------
Its: Chairman - Commercial Division
--------------------------------
<PAGE>
FIRST AMENDMENT TO AGREEMENT OF SALE
AND ESCROW TRUST INSTRUCTIONS
This FIRST AMENDMENT TO AGREEMENT OF SALE AND ESCROW TRUST INSTRUCTIONS
(this "First Amendment"), is entered into as of this 14th day of June, 1996, by
and among Earl Phillips, L.L.C., a Georgia limited liability company
("Purchaser"), Cumberland Pines Limited Partnership, an Illinois limited
partnership ("Seller") and First American Title Insurance Company ("Escrow
Trustee").
W I T N E S S E T H:
WHEREAS, Assignor and Seller entered into that certain Agreement of Sale
dated as of April 23, 1996 (the "Agreement"), for the purchase and sale of
certain real property commonly known as Cumberland Pines Apartments, Atlanta,
Georgia (as more particularly described in the Agreement). All capitalized
words used but not otherwise defined herein shall have the meanings ascribed
thereto in the Agreement.
WHEREAS, Purchaser, Seller and Escrow Trustee have entered into those
certain Escrow Trust Instructions dated as of June 13, 1996 (the "Escrow
Instructions"), providing for the depositing of "Seller's Deliveries" and
"Purchaser's Deliveries" in order to facilitate the closing of the transaction
contemplated by the Agreement.
WHEREAS, Purchaser has failed to deliver the "Money" (as defined in the
Escrow Instructions) within the period specified in the Escrow Instructions and
has defaulted under the terms of the Agreement and the Escrow Instructions.
WHEREAS, notwithstanding Purchaser's default under the Agreement and the
Escrow Instructions, Seller and Purchaser desire to extend the closing date to
Monday, June 17, 1996.
WHEREAS, the parties hereto desire to amend the Escrow Instructions and
the Agreement as set forth more fully herein.
NOW, THEREFORE, for good and valuable consideration, the receipt,
sufficiency and adequacy of which is hereby acknowledged, the parties hereby
agree as follows:
1. The parties hereto agree that the Earnest Money shall be immediately
delivered to Seller pursuant to the wiring instructions contained in the Escrow
Instructions.
2. All references to the term "Closing Date" contained in the Agreement
shall mean June 17, 1996.
3. Purchaser acknowledges and agreed to execute a revised Closing
Statement which reflects June 17, 1996 as the new closing date, and that all
prorations shall be updated to reflect the prorated amounts effective as of
that date.
<PAGE>
4. The penultimate paragraph of the Escrow Instructions is hereby
deleted and the following is inserted in lieu therefor: "In the event that
Purchaser has not deposited Purchaser's Deposits pursuant to these Instructions
on or before 2:00 p.m. Eastern Daylight Time on June 17, 1996, then upon
written notce to Escrow Trustee by Seller or KMZ (including notice by
telecopy), Escrow Trustee shall immediately return Seller's Deposits to Seller
by overnight mail."
5. This First Amendment shall not become effective until Seller receives
written confirmation from Eichler Fayne & Associates that it has extended the
closing date as set forth in those certain Moneylender's Escrow Trust
Instructions governing the disbursement of the loan proceeds described therein.
6. Except as amended and modified hereby, the Agreement and the Escrow
Instructions shall be and remain unmodified and in full force and effect in
accordance with its terms, and each and every one of its provisions, as amended
and modified by this First Amendment, are hereby ratified and affirmed.
7. This First Amendment may be executed in one or more counterparts,
each of which shall be deemed an original, and all of which, when taken
together, shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the day and year first above written.
SELLER:
CUMBERLAND PINES LIMITED Partnership,
an Illinois limited partnership
By: Cumberland Pines Partners, Inc., an
Illinois corporation, its General Partner
By: /s/Daniel L. Charleston
-----------------------------------
Name: Daniel L. Charleston
-----------------------------------
Its: Authorized Agent
-----------------------------------
PURCHASER:
EARL PHILLIPS, L.L.C., a Georgia limited
liability company
By: /s/Earl Phillips
-----------------------------------
Name: Earl Phillips
-----------------------------------
Its: Manager
-----------------------------------
ACCEPTED AND AGREED TO this
14th day of June, 1996.
FIRST AMERICAN TITLE INSURANCE COMPANY,
Escrow Trustee
By: /s/Mary Lou Kennedy
-----------------------------
Name: Mary Lou Kennedy
-----------------------------
Its: Authorized Agent
-----------------------------
<PAGE>
SECOND AMENDMENT TO AGREEMENT OF SALE
AND ESCROW TRUST INSTRUCTIONS
This SECOND AMENDMENT TO AGREEMENT OF SALE AND ESCROW TRUST INSTRUCTIONS
(this "First Amendment"), is entered into as of this 17th day of June, 1996, by
and among Earl Phillips, L.L.C., a Georgia limited liability company
("Purchaser"), Cumberland Pines Limited Partnership, an Illinois limited
partnership ("Seller") and First American Title Insurance Company ("Escrow
Trustee").
W I T N E S S E T H:
WHEREAS, Assignor and Seller entered into that certain Agreement of Sale
dated as of April 23, 1996 (the "Agreement"), for the purchase and sale of
certain real property commonly known as Cumberland Pines Apartments, Atlanta,
Georgia (as more particularly described in the Agreement). All capitalized
words used but not otherwise defined herein shall have the meanings ascribed
thereto in the Agreement.
WHEREAS, Purchaser, Seller and Escrow Trustee entered into those certain
Escrow Trust Instructions dated as of June 13, 1996 (the "Escrow
Instructions"), providing for the depositing of "Seller's Deliveries" and
"Purchaser's Deliveries" in order to facilitate the closing of the transaction
contemplated by the Agreement.
WHEREAS, Purchaser failed to deliver the "Money" (as defined in the Escrow
Instructions) within the period originally specified in the Escrow Instructions
and defaulted under the terms of the Agreement and the Escrow Instructions.
WHEREAS, Purchaser, Seller and Escrow Trustee entered into that certain
First Amendment to Agreement of Sale and Escrow Trust Instructions (the "First
Amendment"), modifying the terms and conditions of the Agreement of Sale and
the Escrow Instructions to extend the Closing Date to June 17, 1996.
WHEREAS, Purchaser has failed to deliver the Money within the period
specified in the Escrow Instructions, as amended by the First Amendment, and
has defaulted under the terms of the Agreement and the Escrow Instructions.
WHEREAS, notwithstanding Purchaser's default under the Agreement and the
Escrow Instructions, Seller and Purchaser desire to extend the Closing Date to
Tuesday, June 18, 1996, on the terms and conditions contained herein.
WHEREAS, the parties hereto desire to amend the Escrow Instructions and
the Agreement as set forth more fully herein.
NOW, THEREFORE, for good and valuable consideration, the receipt,
sufficiency and adequacy of which is hereby acknowledged, the parties hereby
agree as follows:
1. All references to the term "Closing Date" contained in the Agreement
shall mean June 18, 1996.
2. The penultimate paragraph of the Escrow Instructions is hereby
deleted and the following is inserted in lieu therefor: "In the event that
<PAGE>
Purchaser has not deposited Purchaser's Deposits pursuant to these Instructions
on or before 4:00 p.m. Eastern Daylight Time on June 18, 1996, then upon
written noitce to Escrow Trustee by Seller or KMZ (including notice by
telecopy), Escrow Trustee shall immediately return Seller's Deposits to Seller
by overnight mail."
3. Purchaser acknowledges and agrees that Seller shall be entitled to a
$50,000.00 credit at Closing, to be paid by Purchaser as a penalty for failing
to meet the extended Closing Date.
4. Purchaser acknowledges and agrees that, upon the request of Seller,
Purchaser shall execute a revised Closing Statement which reflects June 18,
1996 as the new closing date, and that all prorations shall be updated to
reflect the prorated amounts effective as of that date.
5. This Second Amendment shall not become effective until Seller
receives written confirmation from Eichler Fayne & Associates that it has
extended the closing date as set forth in those certain Moneylender's Escrow
Trust Instructions governing the disbursement of the loan proceeds described
therein to June 18, 1996.
6. Except as amended and modified hereby, the Agreement and the Escrow
Instructions shall be and remain unmodified and in full force and effect in
accordance with its terms, and each and every one of its provisions, as amended
and modified by this Second Amendment, are hereby ratified and affirmed.
7. This Second Amendment may be executed in one or more counterparts,
each of which shall be deemed an original, and all of which, when taken
together, shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the day and year first above written.
SELLER:
CUMBERLAND PINES LIMITED Partnership,
an Illinois limited partnership
By: Cumberland Pines Partners, Inc., an Illinois
corporation, its General Partner
By: /s/Daniel L. Charleston
-----------------------------
Name: Daniel L. Charleston
-----------------------------
Its: Authorized Agent
-----------------------------
PURCHASER:
EARL PHILLIPS, L.L.C., a Georgia limited
liability company
By: /s/Earl Phillips
-------------------------------
Name: Earl Phillips
-------------------------------
Its: Manager
-------------------------------
ACCEPTED AND AGREED TO this
17th day of June, 1996.
FIRST AMERICAN TITLE INSURANCE COMPANY,
Escrow Trustee
By: /s/Mary Lou Kennedy
--------------------------
Name: Mary Lou Kennedy
--------------------------
Its: Authorized Agent
--------------------------
<PAGE>
THIRD AMENDMENT TO AGREEMENT OF SALE
AND ESCROW TRUST INSTRUCTIONS
This THIRD AMENDMENT TO AGREEMENT OF SALE AND ESCROW TRUST INSTRUCTIONS
(this "Third Amendment"), is entered into as of this 19th day of June, 1996, by
and among Earl Phillips, L.L.C., a Georgia limited liability company
("Purchaser"), Cumberland Pines Limited Partnership, an Illinois limited
partnership ("Seller") and First American Title Insurance Company ("Escrow
Trustee").
W I T N E S S E T H:
WHEREAS, Assignor and Seller entered into that certain Agreement of Sale
dated as of April 23, 1996 (the "Agreement"), for the purchase and sale of
certain real property commonly known as Cumberland Pines Apartments, Atlanta,
Georgia (as more particularly described in the Agreement). All capitalized
words used but not otherwise defined herein shall have the meanings ascribed
thereto in the Agreement.
WHEREAS, Purchaser, Seller and Escrow Trustee entered into those certain
Escrow Trust Instructions dated as of June 13, 1996 (the "Escrow
Instructions"), providing for the depositing of "Seller's Deliveries" and
"Purchaser's Deliveries" in order to facilitate the closing of the transaction
contemplated by the Agreement.
WHEREAS, Purchaser failed to deliver the "Money" (as defined in the Escrow
Instructions) within the period originally specified in the Escrow Instructions
and defaulted under the terms of the Agreement and the Escrow Instructions.
WHEREAS, Purchaser, Seller and Escrow Trustee entered into that certain
First Amendment to Agreement of Sale and Escrow Trust Instructions (the "First
Amendment"), modifying the terms and conditions of the Agreement of Sale and
the Escrow Instructions to extend the Closing Date to June 17, 1996. As
Purchaser failed to deliver the Money within the period specified in the First
Amendment, Purchaser, Seller and Escrow Trustee entered into that certain
Second Amendment to Agreement of Sale and Escrow Trust Instructions (the
"Second Amendment") modifying the terms and conditions of the Agreement of Sale
and the Escrow Instructions to extend the Closing Date to June 18, 1996.
WHEREAS, Purchaser has failed to deliver the Money within the period
specified in the Escrow Instructions, as amended by the First Amendment and the
Second Amendment, and has defaulted under the terms of the Agreement and the
Escrow Instructions.
WHEREAS, notwithstanding Purchaser's default under the Agreement and the
Escrow Instructions, Seller and Purchaser desire to extend the Closing Date to
Friday, June 21, 1996, on the terms and conditions contained herein.
WHEREAS, the parties hereto desire to amend the Escrow Instructions and
the Agreement as set forth more fully herein.
NOW, THEREFORE, for good and valuable consideration, the receipt,
sufficiency and adequacy of which is hereby acknowledged, the parties hereby
agree as follows:
<PAGE>
1. All references to the term "Closing Date" contained in the Agreement,
as amended by the First Amendment and the Second Amendment shall mean June 21,
1996.
2. The penultimate paragraph of the Escrow Instructions, as amended by
the First Amendment and the Second Amendment is hereby deleted and the
following is inserted in lieu therefor: "In the event that Purchaser has not
deposited Purchaser's Deposits pursuant to these Instructions on or before 1:00
p.m. Central Daylight Time on June 21, 1996, then upon written notice to Escrow
Trustee by Seller or KMZ (including notice by telecopy), Escrow Trustee shall
immediately return Seller's Deposits to Seller by overnight mail."
3. Purchaser acknowledges and agrees that Seller shall be entitled to a
$50,000.00 credit at Closing, to be paid by Purchaser as a penalty for failing
to meet the extended Closing Date.
4. Purchaser acknowledges and agrees that, upon the request of Seller,
Purchaser shall execute a revised Closing Statement which reflects June 21,
1996 as the new closing date, and that all prorations shall be updated to
reflect the prorated amounts effective as of that date.
5. The foregoing extension of the Closing Date shall not become
effective unless and until the following conditions precedent have been
satisfied by Purchaser:
a. On or before 5:00 p.m. Eastern Daylight Time, Wednesday, June
19, 1996, Purchaser must provide Seller and Eichler Fayne & Associates,
Purchaser's mortgage lender ("EF&A"), written confirmation that Purchaser
has secured the balance of the Purchase Price (e.g., $9,200,000.00 less
the $7,257,400.00 funds advanced by EF&A, as adjusted in accordance with
the Closing Statement) (the "Purchaser's Equity"), and it is Purchaser's
intention to proceed with the Closing.
b. On or before 5:00 p.m. Eastern Daylight Time, Thursday, June 20,
1996, Purchaser shall have deposited Purchaser's Equity with Escrow
Trustee in accordance with the wire transfer instructions previously
furnished to Purchaser by Escrow Trustee, and Escrow Trustee shall provide
Seller and EF&A with confirmation that Purchaser's Equity has been
deposited into Escrow Trustee's account.
c. On or before 1:00 p.m. Central Daylight Time, Friday, June 21,
1996, the loan proceeds in the amount of $7,257,400.00 must be received by
Escrow Trustee from EF&A.
6. In the event that any of the foregoing conditions have not been
satisfied, Escrow Trustee shall continue to hold Seller's Deliveries in
accordance with the provisions of the Escrow Instructions, as amended hereby.
7. Except as amended and modified hereby, the Agreement and the Escrow
Instructions shall be and remain unmodified and in full force and effect in
accordance with its terms, and each and every one of its provisions, as amended
and modified by this Third Amendment, are hereby ratified and affirmed.
8. This Third Amendment may be executed in one or more counterparts,
each of which shall be deemed an original, and all of which, when taken
together, shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the day and year first above written.
SELLER:
CUMBERLAND PINES LIMITED Partnership,
an Illinois limited partnership
By: Cumberland Pines Partners, Inc., an
Illinois corporation, its General Partner
By: /s/Daniel L. Charleston
---------------------------------
Name: Daniel L. Charleston
---------------------------------
Its: Authorized Agent
---------------------------------
PURCHASER:
EARL PHILLIPS, L.L.C., a Georgia limited
liability company
By: /s/Earl Phillips
--------------------------------
Name: Earl Phillips
--------------------------------
Its: Manager
--------------------------------
ACCEPTED AND AGREED TO this
19th day of June, 1996.
FIRST AMERICAN TITLE INSURANCE COMPANY,
Escrow Trustee
By: /s/Mary Lou Kennedy
-----------------------------
Name: Mary Lou Kennedy
-----------------------------
Its: Authorized Agent
-----------------------------
<PAGE>
