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) January 9, 1997
BALCOR PENSION INVESTORS-III
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Exact Name of Registrant
Illinois 0-11129
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State or other jurisdiction Commission file number
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 36-3164211
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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
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
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The Woods Apartments
In 1983, the Partnership funded a $3,162,826 loan evidenced by a $6,840,000
promissory note and collateralized by a wrap-around third mortgage lien on The
Woods Apartments, Austin, Texas. The Partnership later advanced an additional
$1,300,000 on the loan. The Partnership received $625,000 as a principal
reduction of the loan in 1988. In 1993, the Partnership purchased the first
and second mortgage loans for a total of $2,562,433. The Partnership obtained
title to the property through a non-judicial foreclosure in 1994.
On January 9, 1997, the Partnership contracted to sell the property for a sale
price of $11,650,000 to an unaffiliated party, Austin Woods Limited
Partnership, an Illinois limited partnership. The purchaser has deposited
$100,000 into an escrow account as earnest money. The remainder of the sale
price will be payable in cash at closing, scheduled for February 28, 1997.
From the proceeds of the sale, the Partnership will pay $233,000 as a brokerage
commission to an affiliate of the third party providing property management
services for the property and will receive the remaining proceeds of
approximately $11,417,000, less closing costs. Of such proceeds, $100,000 will
be retained by the Partnership and will not be available for use or
distribution by the Partnership until 90 days after the closing. 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 two
additional properties to affiliates of 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 EVENTS
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Carmel on Providence Apartments loan
In 1982, the Partnership funded a $1,244,285 loan collateralized by a
wrap-around mortgage on a leasehold interest in the Carmel on Providence
Apartments, Charlotte, North Carolina, and evidenced by a wrap-around mortgage
note in the principal amount of $3,200,000 (the "Loan"). The principal amount
of the Loan included the principal amount of an underlying first mortgage loan
(the "Underlying Loan"). The borrower is required to make interest only
payments on the Loan through maturity in December 31, 1997, at which time
the amount of the Loan, less the outstanding amount of the Underlying Loan, is
due.
<PAGE>
On December 23, 1996, the Partnership sold its interest in the Loan to
BankAmerica Investment Corporation, an Illinois corporation. The sale price
was equal to 101.11% of the outstanding principal balance of the Loan and
deferred interest due under the terms of the Loan, less the outstanding
principal balance of the Underlying Loan, at closing. The sale price was
$3,098,102.
From the proceeds of the sale, the Partnership paid closing costs of $14,550
and $115,258 to an unaffiliated party as a brokerage commission. The
Partnership received the remaining proceeds of approximately $2,968,000.
Neither the General Partner nor any affiliate will receive a brokerage
commission in connection with the sale of the loan. The General Partner
will be reimbursed by the Partnership for actual expenses incurred in
connection with the sale.
An affiliate of the Partnership simultaneously sold another loan to the
purchaser.
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) Agreement of Sale and amendment thereto relating to the sale of
The Woods Apartments, Austin, Texas.
(99) Purchase and Sale Agreement relating to the sale of the loan
collateralized by the Carmel on Providence Apartments,
Charlotte, North Carolina.
No information is required under Items 1, 3, 4, 6 and 8 and these items
have, therefore, been omitted.
<PAGE>
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-III
By: Balcor Mortgage Advisors-II, an Illinois
general partnership, its general partner
By: RGF-Balcor Associates-II, 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: January 24, 1997
<PAGE>
AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), is entered into as of the 9th
day of December, 1996, by and between AUSTIN WOODS LIMITED PARTNERSHIP, an
Illinois limited partnership ("Purchaser"), and WOODS-BARTON PARTNERS LIMITED
PARTNERSHIP, an Illinois limited partnership ("Seller").
W I T N E S S E T H:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to sell
at the price of Eleven Million Six Hundred Fifty Thousand and No/100 Dollars
($11,650,000.00) (the "Purchase Price"), that certain property commonly known
as The Woods Apartments, Austin, Texas legally described on Exhibit A attached
hereto (the "Property"). Included in the Purchase Price is all of the personal
property set forth on Exhibit B attached hereto (the "Personal Property").
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as follows:
2.1. Upon the execution of this Agreement, the sum of One Hundred
Thousand and No/100 Dollars ($100,000.00) (the "Earnest Money") to be held in
escrow by and in accordance with the provisions of the Escrow Agreement
("Escrow Agreement") attached hereto as Exhibit C; and
2.2. On the "Closing Date" (hereinafter defined), the balance of the
Purchase Price, adjusted in accordance with the prorations, by federally wired
"immediately available" funds, on or before 11:00 a.m Chicago time.
3. TITLE COMMITMENT AND SURVEY.
3.1. Attached hereto as Exhibit D is a copy of a title commitment for an
owner's standard title insurance policy issued by Chicago Title Insurance
Corporation (hereinafter referred to as "Title Insurer") dated July 24, 1996
for the Property (the "Title Commitment"). For purposes of this Agreement,
"Permitted Exceptions" shall mean: (a) the general printed exceptions contained
in the standard title policy to be issued by Title Insurer based on the Title
Commitment; (b) general real estate taxes, association assessments, special
assessments, special district taxes and related charges not yet due and
payable; (c) matters shown on the "Existing Survey" (hereinafter defined); (d)
matters caused by the actions of Purchaser; and (e) the title exceptions set
forth in Schedule B of the Title Commitment as Numbers 1, 2, 3, 4, 5, 9B, 9C,
9D, 9E, 9F, 9G and 9H inclusive, to the extent that same affect the Property.
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 to be insured by the title policy, subject only to the
exceptions therein stated. On the Closing Date, Title Insurer shall deliver to
Purchaser a standard title policy in conformance with the previously delivered
Title Commitment, subject to Permitted Exceptions and Unpermitted Exceptions
waived by Purchaser (the "Title Policy"). Seller and Purchaser shall each pay
for one-half of the costs of the Title Commitment and Title Policy and
Purchaser shall pay for the cost of any endorsements to, or extended coverage
on, the Title Policy.
<PAGE>
3.2. Purchaser has received a survey of the Property prepared by JERYL
HART ENGINEERS, INC. (the "Existing Survey"). Seller and Purchaser shall each
pay for one-half of the costs of updating the Existing Survey and Seller shall
deliver the updated survey (the "Updated Survey") to Purchaser within 14 days
after the date hereof. Purchaser hereby acknowledges that all matters
disclosed by the Existing Survey are acceptable to Purchaser.
3.3. The obligation of Purchaser to pay various costs set forth in
Paragraphs 3.1 and 3.2 shall survive the termination of this Agreement.
4. PAYMENT OF CLOSING COSTS.
4.1. In addition to the costs set forth in Paragraphs 3.1 and 3.2,
Purchaser and Seller shall each pay for one-half of the costs of the
documentary or transfer stamps to be paid with reference to the "Deed"
(hereinafter defined) and all other stamps, intangible, transfer, documentary,
recording, sales tax and surtax imposed by law with reference to any other sale
documents delivered in connection with the sale of the Property to Purchaser
and all other charges of the Title Insurer in connection with this transaction.
5. CONDITION OF TITLE.
5.1. If, prior to "Closing" (as hereinafter defined), a date-down to the
Title Commitment or the Updated Survey discloses any new Unpermitted Exception,
Seller shall have thirty (30) days from the date of the date-down to the Title
Commitment or the Updated Survey, as applicable, at Seller's expense, to (i)
bond over, cure and/or have any Unpermitted Exceptions which, in the aggregate,
do not exceed $100,000.00, removed from the Title Commitment or to have the
Title Insurer commit to insure against loss or damage that may be occasioned by
such Unpermitted Exceptions, or (ii) have the right, but not the obligation, to
bond over, cure and/or have any Unpermitted Exceptions which, in the aggregate,
equal or exceed $100,000.00, removed from the Title Commitment or to have the
Title Insurer commit to insure against loss or damage that may be occasioned by
such Unpermitted Exceptions. In such event, the time of Closing shall be
delayed, if necessary, to give effect to said aforementioned time periods. If
Seller fails to cure or have said Unpermitted Exception removed or have the
Title Insurer commit to insure as specified above within said thirty (30) day
period or if Seller elects not to exercise its rights under (ii) in the
preceding sentence, Purchaser may terminate this Agreement upon notice to
Seller within five (5) days after the expiration of said thirty (30) day
period. Absent notice from Purchaser to Seller in accordance with the
preceding sentence, Purchaser shall be deemed to have elected to take title
subject to said Unpermitted Exception. If Purchaser terminates this Agreement
in accordance with the terms of this Paragraph 5.1, this Agreement shall become
null and void without further action of the parties and all Earnest Money
theretofore deposited into the escrow by Purchaser together with any interest
accrued thereon, shall be returned to Purchaser, and neither party shall have
any further liability to the other, except for Purchaser's obligation to
indemnify Seller and restore the Property, as more fully set forth in Paragraph
7.
<PAGE>
5.2. Seller agrees to convey fee simple title to the Property to
Purchaser by special warranty deed (the "Deed") in recordable form subject only
to the Permitted Exceptions and any Unpermitted Exceptions waived by Purchaser.
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
6.1. Except as provided in the indemnity provisions contained in
Paragraph 7.1 of this Agreement, Seller shall bear all risk of loss with
respect to the Property up to the earlier of the dates upon which either
possession or title is transferred to Purchaser in accordance with this
Agreement. Notwithstanding the foregoing, in the event of damage to the
Property by fire or other casualty prior to the Closing Date, repair of which
would cost less than or equal to $100,000.00 (as determined by Seller in good
faith) Purchaser shall not have the right to terminate its obligations under
this Agreement by reason thereof, but Seller shall have the right to elect to
either repair and restore the Property (in which case the Closing Date shall be
extended until completion of such restoration) or to assign and transfer to
Purchaser on the Closing Date all of Seller's right, title and interest in and
to all insurance proceeds paid or payable to Seller on account of such fire or
casualty, and Seller shall pay to Purchaser at the Closing the amount of
Seller's insurance deductible. Seller shall promptly notify Purchaser in
writing of any such fire or other casualty and Seller's determination of the
cost to repair the damage caused thereby. In the event of damage to the
Property by fire or other casualty prior to the Closing Date, repair of which
would cost in excess of $100,000.00 (as determined by Seller in good faith),
then this Agreement may be terminated at the option of Purchaser, which option
shall be exercised, if at all, by Purchaser's written notice thereof to Seller
within five (5) business days after Purchaser receives written notice of such
fire or other casualty and Seller's determination of the amount of such
damages, and upon the exercise of such option by Purchaser this Agreement shall
become null and void, the Earnest Money deposited by Purchaser shall be
returned to Purchaser together with interest thereon, and neither party shall
have any further liability or obligations hereunder. In the event that
Purchaser does not exercise the option set forth in the preceding sentence, the
Closing shall take place on the Closing Date and Seller shall assign and
transfer to Purchaser on the Closing Date all of Seller's right, title and
interest in and to all insurance proceeds paid or payable to Seller on account
of the fire or casualty, and Seller shall pay to Purchaser at the Closing the
amount of Seller's insurance deductible.
6.2. If between the date of this Agreement and the Closing Date, any
condemnation or eminent domain proceedings are initiated which might result in
the taking of any part of the Property or the taking or closing of any right of
access to the Property, Seller shall immediately notify Purchaser of such
occurrence. In the event that the taking of any part of the Property shall:
(i) materially impair access to the Property; (ii) cause any material
non-compliance with any applicable law, ordinance, rule or regulation of any
federal, state or local authority or governmental agencies having jurisdiction
over the Property or any portion thereof; or (iii) materially and adversely
impair the use of the Property as it is currently being operated (hereinafter
collectively referred to as a "Material Event"), Purchaser may:
<PAGE>
6.2.1. terminate this Agreement by written notice to Seller, in
which event the Earnest Money deposited by Purchaser, together with interest
thereon, shall be returned to Purchaser and all rights and obligations of the
parties hereunder with respect to the closing of this transaction will cease;
or
6.2.2. proceed with the Closing, in which event Seller shall assign
to Purchaser all of Seller's right, title and interest in and to any award made
in connection with such condemnation or eminent domain proceedings.
6.3. Purchaser shall then notify Seller, within five (5) business days
after Purchaser's receipt of Seller's notice, whether Purchaser elects to
exercise its rights under Paragraph 6.2.1 or Paragraph 6.2.2. Closing shall be
delayed, if necessary, until Purchaser makes such election. If Purchaser fails
to make an election within such five (5) business day period, Purchaser shall
be deemed to have elected to exercise its rights under Paragraph 6.2.2. If
between the date of this Agreement and the Closing Date, any condemnation or
eminent domain proceedings are initiated which do not constitute a Material
Event, Purchaser shall be required to proceed with the Closing, in which event
Seller shall assign to Purchaser all of Seller's right, title and interest in
and to any award made in connection with such condemnation or eminent domain
proceedings.
7. INSPECTION AND AS-IS CONDITION.
7.1. During the period commencing on the date hereof and ending at 5:00
p.m. Chicago time on January 31, 1997 (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 agrees to deliver 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 1995 and 1996 operating
statements.
All of the foregoing tests, investigations and studies to be conducted
under this Paragraph 7.1 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 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.
<PAGE>
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 thereunder.
If Purchaser is dissatisfied with the results of the tests, studies or
investigations performed or information received pursuant to this Paragraph
7.1, 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 received by
Seller pursuant to this Paragraph 7.1 prior to the expiration of the Inspection
Period, then the right of Purchaser to terminate this Agreement pursuant to
this Paragraph 7.1 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 Earnest Money 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 7.1.
Notwithstanding anything contained herein to the contrary, the terms of this
Paragraph 7.1, shall survive the Closing and the delivery of the Deed and
termination of this Agreement.
7.2. Seller or Seller's predecessor-in-interest acquired title to the
Property by foreclosure (or deed-in-lieu thereof) and, therefore, Seller can
make no representations or warranties relating to the condition of the Property
or the Personal Property. Purchaser acknowledges and agrees that it will be
purchasing the Property and the Personal Property based solely upon its
inspections and investigations of the Property and the Personal Property, and
that Purchaser will be purchasing the Property and the Personal Property "AS
IS" and "WITH ALL FAULTS", based upon the condition of the Property and the
Personal Property as of the date of this Agreement, wear and tear and loss by
fire or other casualty or condemnation excepted. 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 representations or warranties of any kind upon
which Purchaser is relying as to any matters concerning the Property or the
Personal Property, including, but not limited to, the condition of the land or
any improvements comprising the Property, the existence or non-existence of
"Hazardous Materials" (as hereinafter defined), 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 or building laws, rules or regulations or
"Environmental Laws" (hereinafter defined) affecting the Property. Seller
makes no representation or warranty that the Property complies with Title III
of the Americans with Disabilities Act or any fire code or building code.
Purchaser hereby releases Seller and the Affiliates of Seller from any and all
liability in connection with any claims which Purchaser may have against Seller
<PAGE>
or the Affiliates of Seller, and Purchaser hereby agrees not to assert any
claims for contribution, cost recovery or otherwise, against Seller or the
Affiliates of Seller, relating directly or indirectly to the existence of
asbestos or Hazardous Materials on, or environmental conditions of, the
Property, whether known or unknown. As used herein, "Environmental Laws" means
all federal, state and local statutes, codes, regulations, rules, ordinances,
orders, standards, permits, licenses, policies and requirements (including
consent decrees, judicial decisions and administrative orders) relating to the
protection, preservation, remediation or conservation of the environment or
worker health or safety, all as amended or reauthorized, or as hereafter
amended or reauthorized, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.
Section 9601 et seq., the Resource Conservation and Recovery Act of 1976
("RCRA"), 42 U.S.C. Section 6901 et seq., the Emergency Planning and Community
Right-to-Know Act ("Right-to-Know Act"), 42 U.S.C. Section 11001 et seq., the
Clean Air Act ("CAA"), 42 U.S.C. Section 7401 et seq., the Federal Water
Pollution Control Act ("Clean Water Act"), 33 U.S.C. Section 1251 et seq., the
Toxic Substances Control Act ("TSCA"), 15 U.S.C. Section 2601 et seq., the Safe
Drinking Water Act ("Safe Drinking Water Act"), 42 U.S.C. Section 300f et seq.,
the Atomic Energy Act ("AEA"), 42 U.S.C. Section 2011 et seq., the Occupational
Safety and Health Act ("OSHA"), 29 U.S.C. Section 651 et seq., and the
Hazardous Materials Transportation Act (the "Transportation Act"), 49 U.S.C.
Section 1802 et seq. As used herein, "Hazardous Materials" means:
(1) "hazardous substances," as defined by CERCLA; (2) "hazardous wastes," as
defined by RCRA; (3) any radioactive material including, without limitation,
any source, special nuclear or by-product material, as defined by AEA; (4)
asbestos in any form or condition; (5) polychlorinated biphenyls; and (6) any
other material, substance or waste to which liability or standards of conduct
may be imposed under any Environmental Laws. Notwithstanding anything
contained herein to the contrary, the terms of this Paragraph 7.2 shall survive
the Closing and the delivery of the Deed and termination of this Agreement.
7.3. 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 and the Affiliates of Seller from
any liability with respect to such historical information. Notwithstanding
anything contained herein to the contrary, the terms of this Paragraph 7.3
shall survive the Closing and the delivery of the Deed and termination of this
Agreement.
7.4. Seller has provided to Purchaser the following existing report:
Phase I Environmental Site Assessment of The Woods, dated May, 1992 ("Existing
Report"). Seller makes no representation or warranty concerning the accuracy
<PAGE>
or completeness of the Existing Report. Purchaser hereby releases Seller and
the Affiliates of Seller from any liability whatsoever with respect to the
Existing Report, or, including, without limitation, the matters set forth in
the Existing Report, and the accuracy and/or completeness of the Existing
Report. Furthermore, Purchaser acknowledges that it will be purchasing the
Property with all faults disclosed in the Existing Report. Notwithstanding
anything contained herein to the contrary, the terms of this Paragraph 7.4
shall survive the Closing and the delivery of the Deeds and termination of this
Agreement.
8. CLOSING. The closing of this transaction (the "Closing") shall be on
February 28, 1997 (the "Closing Date"), at the office of Title Insurer,
Beaumont, Texas at which time Seller shall deliver possession of the Property
to Purchaser. This transaction shall be closed through an escrow with Title
Insurer, in accordance with the general provisions of the usual and customary
form of deed and money escrow for similar transactions in Texas, or at the
option of either party, the Closing shall be a "New York style" closing at
which the Purchaser shall wire the Purchase Price to Title Insurer on the
Closing Date and prior to the release of the Purchase Price to Seller,
Purchaser shall receive the Title Policy or marked up commitment dated the date
of the Closing Date. In the event of a New York style closing, Seller shall
deliver to Title Insurer any customary affidavit in connection with a New York
style closing. All closing and escrow fees shall be divided equally between
the parties hereto.
9. CLOSING DOCUMENTS.
9.1. On or prior to the Closing Date, Seller and Purchaser shall execute
and deliver to one another a joint closing statement. In addition, at Closing
Purchaser shall deliver to Seller the balance of the Purchase Price, an
assumption of the documents set forth in Paragraph 9.2.3 and 9.2.4 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.
9.2. On the Closing Date, Seller shall deliver to Purchaser the
following:
9.2.1. the Deed (in the form of Exhibit E attached hereto),
subject to Permitted Exceptions and those Unpermitted Exceptions waived by
Purchaser;
9.2.2. a quit claim bill of sale conveying the Personal Property
(in the form of Exhibit F attached hereto);
9.2.3. assignment and assumption of intangible property (in the form
attached hereto as Exhibit G), including, without limitation, the service
contracts listed in Exhibit H;
9.2.4. an assignment and assumption of leases and security deposits
(in the form attached hereto as Exhibit I);
9.2.5. non-foreign affidavit (in the form of Exhibit J attached
hereto);
<PAGE>
9.2.6. original, and/or copies of, leases affecting the Property in
Seller's possession (which shall be delivered at the Property);
9.2.7. all documents and instruments reasonably required by the
Title Insurer to issue the Title Policy;
9.2.8. possession of the Property to Purchaser, subject to the terms
of leases;
9.2.9. evidence of the termination of the management agreement;
9.2.10. notice to the tenants of the Property of the transfer of
title and assumption by Purchaser of the landlord's obligation under the leases
and the obligation to refund the security deposits (in the form of Exhibit K);
and
9.2.11. an updated rent roll.
10. PURCHASER'S DEFAULT. ALL EARNEST MONEY DEPOSITED INTO THE ESCROW IS TO
SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND UNDERTAKINGS
UNDER THIS AGREEMENT. IN THE EVENT OF A DEFAULT OF THE PURCHASER UNDER THE
PROVISIONS OF THIS AGREEMENT, SELLER SHALL RETAIN ALL OF THE EARNEST MONEY AND
THE INTEREST THEREON AS SELLER'S SOLE RIGHT TO DAMAGES OR ANY OTHER REMEDY,
EXCEPT FOR PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER AND RESTORE THE PROPERTY
AS SET FORTH IN PARAGRAPH 7.1 HEREOF. 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 EARNEST MONEY 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 ALL EARNEST MONEY
TOGETHER WITH ANY INTEREST ACCRUED THEREON, AND THIS AGREEMENT SHALL THEN
BECOME NULL AND VOID AND OF NO EFFECT AND THE PARTIES SHALL HAVE NO FURTHER
LIABILITY TO EACH OTHER AT LAW OR IN EQUITY, EXCEPT FOR PURCHASER'S OBLIGATIONS
TO INDEMNIFY SELLER AND RESTORE THE PROPERTY AS SET FORTH MORE FULLY IN
PARAGRAPH 7. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF
SELLER'S DEFAULT IS ITS WILLFUL REFUSAL TO DELIVER THE DEED, THEN PURCHASER
WILL BE ENTITLED TO SUE FOR SPECIFIC PERFORMANCE.
12. PRORATIONS.
12.1. 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; real and personal property taxes
and other similar items shall be adjusted ratably as of 11:59 p.m. on the
Closing Date, and credited against the balance of the cash due at Closing.
Assessments payable in installments which are due subsequent to the Closing
Date shall be paid by Purchaser. If the amount of any of the items to be
prorated is not then ascertainable, the adjustments thereof shall be on the
basis of the most recent ascertainable data. All prorations will be final
except as to delinquent rent referred to in Paragraph 12.2 below.
12.2. All basic rent paid following the Closing Date by any tenant of the
Property who is indebted under a lease for basic rent for any period prior to
and including the Closing Date shall be deemed a "Post-Closing Receipt" until
such time as all such indebtedness is paid in full. All rent payments received
from tenants following the Closing Date shall be applied first against such
tenant's current rent obligation accruing from and after the Closing Date, and
then applied to delinquent rents as provided in the preceding sentence. Within
<PAGE>
120 days after the Closing Date, Purchaser shall deliver to Seller a
reconciliation statement of Post-Closing Receipts through the first 90 days
after the Closing Date and shall deliver to Seller any Post-Closing Receipts,
less reasonable collection costs, if any, to Purchaser to procure such
Post-Closing Receipts owing to Seller and not previously delivered to Seller in
accordance with the terms hereof. Upon delivery to Seller of the Post-Closing
Receipts reconciliation statement and payment of any Post-Closing Receipts due
to Seller from receipts through the first 90 days following the Closing Date,
Purchaser shall have no further obligation to Seller for payment of any
<PAGE>
Post-Closing Receipts. Seller retains the right to conduct an audit, at
reasonable times and upon reasonable notice, of Purchaser's books and records
to verify the accuracy of the Post-Closing Receipts reconciliation statement
and upon the verification of additional funds owing to Seller, Purchaser shall
pay to Seller said additional Post-Closing Receipts and the cost of performing
Seller's audit if such additional funds owed to the Seller exceed 25% of the
total Post-Closing Receipts previously paid to Seller. Paragraph 12.2 of this
Agreement shall survive the Closing and the delivery and recording of the deed.
13. RECORDING. Neither this Agreement nor a memorandum thereof shall be
recorded and the act of recording by Purchaser shall be an act of default
hereunder by Purchaser and subject to the provisions of Paragraph 10 hereof.
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 hereof.
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 Insignia Mortgage & Investment Company ("Insignia") (to be paid
by Seller). Seller's commission to Insignia shall only be payable out of the
proceeds of the sale of the Property in the event the transaction set forth
herein closes. Purchaser and Seller shall indemnify, defend and hold the other
party hereto harmless from any claim whatsoever (including without limitation,
reasonable attorney's fees, court costs and costs of appeal) from anyone
claiming by or through the indemnifying party any fee, commission or
compensation on account of this Agreement, its negotiation or the sale hereby
contemplated other than to Insignia. The indemnifying party shall undertake
its obligations set forth in this Paragraph 15 using attorneys selected by the
indemnifying party and reasonably acceptable to the indemnified party. The
provisions of this Paragraph 15 will survive the Closing and delivery of the
Deed.
16. REPRESENTATIONS AND WARRANTIES.
16.1. Any reference herein to Seller's knowledge or notice of any matter
or thing shall only mean such knowledge or notice that has actually been
received by Beth Goldstein (referred to as the "Seller's Representative"), and
any representation or warranty of the Seller is based upon those matters of
which the Seller's Representative 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, the general partner or limited partners of
Seller, the subpartners of the general partner or limited partners of Seller or
Seller's Representative.
16.2. Subject to the limitations set forth in Paragraph 16.1, Seller
hereby makes the following representations and warranties, which
representations and warranties are made to Seller's knowledge and which shall
subject to Paragraph 16.4 and Paragraph 16.5 be remade at Closing: (i) Seller
<PAGE>
has no knowledge of any pending or threatened litigation, claim, cause of
action or administrative proceeding concerning the Property; (ii) Seller has
the power to execute and deliver this Agreement and consummate the transactions
contemplated herein; (iii) the rent roll attached hereto as Exhibit M which
Seller will update as of the Closing Date is accurate as of the date set forth
thereon; (iv) except as set forth on the Rent Roll, no rents or other payments
have been or will be collected more than one (1) month in advance and no rents
or other deposits are held by Seller, except lease, security and such other
deposits described on the Rent Roll or prepaid rent up to and including the
Closing Date, all of which Seller shall account for and shall be credited to
Purchaser at the Closing; and (v) except as may be set forth in the Existing
Report, Seller has not received any notice from any governmental authority
having jurisdiction over the Property of any uncured violation of any
Environmental Law with respect to the Property.
16.3. Purchaser hereby represents and warrants to Seller that
Purchaser has the full right, power and authority to execute and deliver this
Agreement and consummate the transactions contemplated herein.
16.4. If at any time after the execution of this Agreement, either
Purchaser or Seller become aware of information which makes a representation
and warranty contained in this Agreement to become untrue in any material
respect, said party shall promptly disclose said information to the other party
hereto. Provided the party making the representation or warranty did not take
any deliberate actions to cause the representation or warranty in question to
become untrue in any material respect, said party shall not be in default under
this Agreement and the sole remedy of the other party shall be to terminate
this Agreement. Notwithstanding anything contained herein to the contrary, if
the status of any of the tenancies changes from the date of the rent roll
attached hereto and the date of the rent roll delivered at Closing, provided
the change in status is not caused by a breach of Seller's covenants contained
in Paragraph 16.4 herein, then Purchaser shall not have the right to terminate
this Agreement or make any claim for a breach of a representation or warranty
hereunder involving the rent roll or tenancies thereunder. Purchaser and
Seller are prohibited from making any claims against the other party hereto
after the Closing with respect to any breaches of the other party's
representations and warranties contained in this Agreement that the claiming
party has actual knowledge of prior to the Closing.
16.5. The parties agree that the representations contained herein
shall survive Closing for a period of ninety (90) days (i.e., the claiming
party shall have no right to make any claims against the other party for a
breach of a representation or warranty after the expiration of ninety (90) days
immediately following Closing).
17. LIMITATION OF LIABILITY.
17.1. No Affiliate of Seller, nor any of their respective
beneficiaries, shareholders, partners, officers, directors, agents of
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
this Agreement and the transactions contemplated herein, and Purchaser hereby
waives for itself and anyone who may claim by, though or under Purchaser any
<PAGE>
and all rights to sue or recover on account of any such alleged personal
liability. Notwithstanding anything contained herein to the contrary,
Purchaser hereby agrees that the maximum aggregate liability of Seller, in
connection with, arising out of or in any way related to a breach by Seller
under this Agreement or any document or conveyance agreement in connection with
the transaction set forth herein after the Closing shall be $100,000.
Purchaser hereby waives for itself and anyone who may claim by, through or
under Purchaser any and all rights to sue or recover from Seller any amount
greater than said limit.
17.2. Seller further agrees not to distribute $100,000 of the proceeds
of the Purchase Price to its partners for the longer of (i) ninety (90) days
after the Closing and (ii) final resolution of any claims by Purchaser and
asserted in writing against Seller prior to the expiration of the ninety (90)
days after the Closing in accordance with the terms of this Agreement
("Claims"); provided, however, that if any Claims are disputed by Seller,
Seller shall have the right, by written notice to Purchaser, to require
Purchaser to file suit in a court of competent jurisdiction within thirty (30)
days after such notice to Purchaser; otherwise said notice with respect to the
Claim in question shall no longer prevent Seller from distributing the
proceeds.
18. TIME OF ESSENCE. Time is of the essence of this Agreement.
19. 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, by facsimile transmission or made by United States
registered or certified mail addressed as follows:
TO SELLER: c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attention: Ilona Adams
with copies to: The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attention: James Mendelson
(847) 317-4367
(847) 317-4462 (FAX)
and to: Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, Illinois 60661-3693
Attention: Daniel J. Perlman, Esq.
(312) 902-5532
(312) 902-1061 (FAX)
<PAGE>
TO PURCHASER: Austin Woods Limited Partnership
c/o Mr. Erich F. Kollinger
901 South Ashland Blvd., 1201A
Chicago, Illinois 60607
Attention: Mr. Erich F. Kollinger
(773) 878-5900
(773) 878-6996 (FAX)
and one copy to: Pedersen & Houpt
161 North Clark Street
Suite 3100
Chicago, Illinois 60601-3224
Attention: Thomas F. Brett, II, Esq.
(312) 781-2123
(312) 641-6895 (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 the same day as given if sent by facsimile transmission and
received by 5:00 p.m. Chicago time or on the 4th 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, by overnight courier or by facsimile transmission 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.
20. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute two
(2) copies of this Agreement and three (3) copies of the Escrow Agreement and
forward them to Seller for execution, accompanied with the Earnest Money
payable to the Escrow Agent set forth in the Escrow Agreement. Seller will
forward one (1) copy of the executed Agreement to Purchaser and will forward
the following to the Escrow Agent:
(A) Earnest Money;
(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 each of the Purchaser and the Seller.
21. GOVERNING LAW. The provisions of this Agreement shall be governed by the
laws of the Texas, except that with respect to the retainage of the Earnest
Money as liquidated damages the laws of the State of Illinois shall govern.
22. 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.
<PAGE>
23. 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.
24. 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.
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date first set forth above.
PURCHASER:
AUSTIN WOODS LIMITED PARTNERSHIP,
an Illinois limited partnership
By: AW Austin Property Company,
an Illinois corporation
By: /s/ Erich F. Kollinger
----------------------------------
Name:
----------------------------------
Its: President
----------------------------------
SELLER:
WOODS-BARTON PARTNERS LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Woods-Barton Partners, Inc.,
an Illinois corporation,
its general partner
By: /s/ John K. Powell, Jr.
----------------------------------
Name: John K. Powell, Jr.
----------------------------------
Its: Senior Vice President
----------------------------------
<PAGE>
The Woods Apartments
Al Lieberman of Insignia Mortgage & Investment Company ("Seller's 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 October 15, 1996_ between Seller and Seller's Broker (the
"Listing Agreement"). Seller's 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. Seller's Broker agrees to deliver a receipt
to the Seller at the Closing for the fee or commission due Seller's Broker and
a release, in the appropriate form, stating that no other fees or commissions
are due to it from Seller or Purchaser.
INSIGNIA MORTGAGE & INVESTMENT COMPANY
By: /s/ Al Lieberman
-----------------------------------
<PAGE>
Exhibits
A - Legal
B - Personal Property
C - Escrow Agreement
D - Title Commitment
E - Deed
F - Bill of Sale
G - Assignment and Assumption of Intangible Property
H - Service Contracts
I - Assignment and Assumption of Leases and Security Deposits
J - Non-Foreign Affidavit
K - Notice to Tenants
L - Intentionally Deleted
M - Rent Roll
<PAGE>
WOODS-BARTON PARTNERS LIMITED PARTNERSHIP
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
January 14, 1997
Austin Woods Limited Partnership
c/o Mr. Erich F. Kollinger
901 South Ashland Blvd., 1201 A
Chicago, Illinois 60607
Re: The Woods Apartments, Austin, Texas
Gentlemen:
Reference is made to that certain Agreement of Sale (the "Agreement") by
and between Woods-Barton Partners Limited Partnership, an Illinois limited
partnership ("Seller") and Austin Woods Limited Partnership ("Purchaser"). All
capitalized terms which are used but not defined herein shall have the meanings
ascribed to such terms in the Agreement.
This letter is for the purpose of amending the Agreement of Sale as set
forth herein. Purchaser's acknowledgment of this letter shall constitute
Purchaser's agreement to the amendments contained herein.
The Agreement is hereby amended as follows:
a. The Agreement shall be dated January 9, 1997.
b. Section 7.4: The definition of "Existing Report" shall also
include that certain Phase I Environmental Report dated July 8,
1994, prepared by EMG, a copy of which has been delivered to
Purchaser.
c. Section 8: The closing location shall be at the office of Title
Insurer in Sugarland, Texas.
Except as stated above, the Agreement of Sale shall remain in full force
and effect.
Please execute the acknowledgment below, and return this letter agreement
to Janet Lindeman by fax (312-902-1061) and by mail c/o Katten Muchin & Zavis,
525 W. Monroe Street, 21st Floor, Chicago, IL 60661.
<PAGE>
Very truly yours,
WOODS-BARTON PARTNERS LIMITED
PARTNERSHIP, an Illinois limited partnership
By: Woods-Barton Partners, Inc., an Illinois
corporation, its general partner
By: /s/ John K. Powell, Jr
-------------------------------------------
Name: John K. Powell, Jr.
-------------------------------------------
Its: Senior Vice President
-------------------------------------------
ACCEPTED AND AGREED TO THIS
th DAY OF JANUARY, 1997
- ----
AUSTIN WOODS LIMITED PARTNERSHIP, an
Illinois limited partnership
By: AW Austin Property Company, an
Illinois corporation
/s/ Erich F. Kollinger
By: ---------------------------------------------
Erich F. Kollinger
Name: ---------------------------------------------
President
Its: ---------------------------------------------
<PAGE>
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") dated as of December
23, 1996 by and between Labcor III Limited Partnership ("Seller") and
BankAmerica Investment Corporation, an Illinois corporation ("Purchaser").
RECITALS
A. Seller is the holder of a certain loan made by Balcor Pension
Investors-III to Associated Partners Investor/Carmel Providence ("Borrower") in
the original principal amount of $3,200,000 (the "Loan"). The Loan is more
fully described on Exhibit A hereto. The Loan is evidenced and secured by a
mortgage (the "Mortgage") on the real property more fully described on Exhibit
B hereto (the "Property") and by any other documents or instruments which may
evidence or secure the Loan including, without limitation, the Borrower's
Modified Plan of Reorganization dated March 18, 1993, as amended as of May 18,
1993 (collectively, the "Related Documents"). The Mortgage and Related
Documents are hereinafter collectively called the "Loan Documents."
B. Borrower is also obligated to pay, or has acquired the Property
subject to, a loan in the original principal amount of $1,725,000 (the "Prior
Mortgage Loan"). The Prior Mortgage Loan is more fully described on Exhibit A
hereto. The Prior Mortgage Loan is evidenced and secured by a mortgage (the
"Prior Mortgage") on the Property and by any other documents or instruments
which may evidence or secure the Prior Mortgage Loan (collectively, the "Prior
Mortgage Related Documents"). The Prior Mortgage and the Prior Mortgage
Related Documents are hereinafter collectively called the "Prior Mortgage Loan
Documents").
C. Seller wishes to sell, and Purchaser wishes to purchase, subject to
the terms and conditions hereof:
(i) all right, title and interest of Seller in and to the Loan,
together with all Accrued Interest and Contingent Interest (as those terms are
defined herein), and any accrued and unpaid fees with respect to the Loan as of
the Closing Date; and
(ii) all right, title and interest of Seller in and to the Loan
Documents;
NOW, THEREFORE in consideration of the mutual representations, warranties,
covenants and agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree as follows:
Section 1. Definitions.
(a) As used herein, the following terms shall have the meanings herein
specified (to be equally applicable to both the singular and plural forms of
the terms defined), except to the extent otherwise specified to the contrary:
<PAGE>
"Accrued Interest" shall mean interest which shall have accrued on the
Loan since the most recent payment of interest with respect to the Loan and
remains unpaid.
"Adjustment" shall have the meaning specified in Section 11.
"Agreement" shall mean this Purchase and Sale Agreement, as it may be
amended, supplemented and modified from time to time.
"Assignment of Mortgages" shall have the meaning provided in Section
6(a)(i).
"Borrower" shall have the meaning provided in Recital A.
"Business Day" shall mean any day other than (a) a Saturday or a Sunday or
(b) any other day in which commercial banks in Chicago, Illinois are required
or authorized by law to be closed for business.
"Closing" shall have the meaning provided in Section 6.
"Closing Date" shall have the meaning provided in Section 6.
"Contingent Interest" shall mean all interest in connection with the Loan
which shall become due and payable upon the occurrence of an event or
circumstance set forth in the Loan Documents which has not occurred on or prior
to the Closing Date including "Gross Income Interest" as defined in the Loan
Documents.
"Deferred Interest" shall mean all interest which has accrued on the
principal amount of the Loan but which is not yet due and payable, including
the aggregate Monthly Accrual (as defined in the Loan Documents) but excluding
Contingent Interest and Accrued Interest.
"Deposit" shall have the meaning provided in Section 3(a)(i).
"Escrow Agent" shall mean Chicago Title and Trust Company.
"Escrow Agreement" shall have the meaning specified in Section 3(c).
"Guarantor" shall have the meaning provided in Section 2(d)(vi).
"Immaterial part" shall have the meaning provided in Section 12(b).
"Indemnified Persons" means the Purchaser Indemnified Persons or the
Seller Indemnified Persons, as the case may be.
"Indemnifying Person" means the party who shall be obligated to indemnify
the Indemnified Persons under this Agreement.
"Insignificant portion" shall have the meaning provided in Section 12(a).
<PAGE>
"Laws" shall mean any present or future federal, state, municipal or local
laws, ordinances, rules, regulations, requirements, judgments, writs, decrees,
determinations, awards or court orders, building codes and zoning ordinances
and similarly, applicable orders, rules and regulations of any regulatory,
licensing, accrediting, rating, insurance underwriting or rating organization
or other body exercising similar functions.
"Loan Documents" shall have the meaning provided in Recital A.
"Losses" shall mean all damages, losses, liabilities, obligations,
penalties, claims, litigations, demands, defenses, judgments, suits,
proceedings, costs, disbursements or expenses of any kind or nature (including,
without limitation, reasonable attorneys' fees and disbursements) as sustained,
suffered or incurred by any Indemnified Person arising from any matter which is
the subject of indemnification under this Section; provided, however, that
Losses of any Indemnified Person under this Agreement shall be computed net of
(A) the amount, if any, of insurance proceeds that such Indemnified Person
shall have received (net of Taxes payable with respect thereto) in respect of
the matter, the existence or occurrence of which gave rise to such
indemnification, and (B) the amount, if any, of the Tax benefits actually
realized by such Indemnified Person as a result of such Losses in the year in
which such Losses occur, as reasonably determined by such Indemnified Person.
"Material part" shall have the meaning provided in Section 12(b).
"Mortgage" shall have the meaning provided in Recital A.
"Notice of Claim" shall have the meaning provided in Section 17(d).
"Permitted Encumbrances" shall have the meaning provided in Section 5(a).
"Pricing Date" shall have the meaning provided in Section 7(e).
"Principal Amount" shall mean the outstanding principal amount of the Loan
as of the Closing Date, but excluding the outstanding principal amount of any
Prior Mortgage Loan which would otherwise be included in calculating the
outstanding principal amount of the Loan pursuant to the Loan Documents.
"Prior Mortgage" shall have the meaning provided in Recital B.
"Prior Mortgage Loan" shall have the meaning provided in Recital B.
"Prior Mortgage Related Documents" shall have the meaning provided in
Recital B.
"Prior Mortgage Loan Documents" shall have the meaning provided in Recital
B.
"Property" shall have the meaning provided in Recital A.
"Purchase Price" shall have the meaning provided in Section 3(a).
"Purchaser" shall have the meaning provided in the Preamble to this
Agreement.
<PAGE>
"Purchaser Indemnified Persons" means and includes the Purchaser and its
permitted assigns and their respective directors, officers, agents, employees,
advisors, successors and affiliates.
"Reports" shall have the meaning provided in Section 7(o).
"Seller" shall have the meaning provided in the Preamble of this
Agreement.
"Seller Indemnified Persons" means and includes Seller and its affiliates
and their respective directors, officers, agents, employees, advisors,
successors and affiliates.
"Seller's Closing Documents" shall have the meaning provided in Section
6(a).
"Significant portion" shall have the meaning provided in Section 12(a).
"Tax" or "Taxes" means all income taxes (including any tax on or based
upon net income, gross income, income as specially defined, earnings, or
profits or selected items of income, earnings or profits) and all gross
receipts, sales, use, ad valorem, transfer, franchise, license, withholding,
payroll, employment, excise, severance, stamp, occupation, premium, property or
windfall profits, alternative or add on minimum, customs, duties or other
taxes, fees, assessments or charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts in respect
thereof, imposed by any taxing authority.
"Third Party Claim" shall have the meaning provided in Section 17(d).
"Title Policies" shall have the meaning specified in Section 5(b).
(b) The phrase "to the best of Seller's knowledge" and any similar phrase
referring to the knowledge of Seller, shall mean the actual knowledge of any
person currently employed by Seller who Seller has reasonably determined is
likely to have firsthand knowledge with respect to the Loan, the Borrower, any
Guarantor or the Property. The knowledge of any other person shall not be
imputed to Seller, regardless of whether any such person shall have once been
or shall currently be employed by or an agent of Seller.
Section 2. Agreement to Sell and Purchase the Loan. (a) Subject to
the terms and conditions set forth herein, Seller hereby agrees to sell,
transfer and assign to Purchaser and Purchaser hereby agrees to purchase and
accept from Seller all of its right, title and interest in and to the Loan and
the Loan Documents and all liens, claims and rights arising thereunder or in
connection therewith. Except as expressly set forth herein, the sale, transfer
and assignment of the Loan and the Loan Documents is and shall be made "AS IS",
"WHERE IS", "WITH ALL FAULTS".
(b) Purchaser has made such examinations, reviews and investigations as
it deems necessary or appropriate in making its decision to purchase the Loan.
<PAGE>
Purchaser has been and will continue to be solely responsible for making its
own independent investigation of the Loan and the Loan Documents. Purchaser
acknowledges that the sale of the Loan by Seller to Purchaser is irrevocable,
and that Purchaser shall have no recourse to Seller, except as otherwise
provided in this Agreement. Purchaser acknowledges that Seller has not made
any representations or warranties concerning the collectability of the Loan or
the value of the Property.
(c) Purchaser acknowledges that except as provided in Section 6(e)(iv)
hereof, Purchaser's obligation to close the transaction contemplated herein is
not conditioned on the delivery of any estoppel or confirmation of the
outstanding amount of the Loan or any other information regarding the Loan, the
Loan Documents or anything relating to the Property from any party having an
interest in or claim to the Property.
(d) Except as expressly set forth herein, Seller does not and will not
make any oral or written representations, warranties, promises or guarantees
whatsoever, whether express or implied, concerning or with regard to, and
expressly disclaims any liability or obligation with respect to, concerning or
relating to, any of the following:
(i) the collectibility of the Loan;
(ii) the value or condition of the Property;
(iii) title or ownership to or of the Property or any portion or
part thereof or any materials, fixtures or furnishings located therein or
thereon;
(iv) compliance with any environmental protection, pollution or land
use Laws, including, but not limited to, those pertaining to the use, handling,
generating, treating, storing or disposing of any hazardous waste, hazardous
substance, petroleum product, storage tank, or other container therefor,
asbestos or any other substance controlled or otherwise governed by applicable
Laws;
(v) the zoning and any other restrictions applicable to the
Property;
(vi) ownership of or obligations in respect of any air rights, zoning
bonuses, floor area ratio bonuses or entitlements or other similar rights or
benefits attributable to, burdening or otherwise pertaining to the Property;
(vii) claims by Borrower or any guarantors of the Loan (the
"Guarantors") against Seller under the Loan Documents or otherwise or claims by
third parties against the Borrower or any of the Guarantors or Seller or the
creditworthiness or ability of Borrower or any of the Guarantors to fulfill
their respective obligations or pay their respective debts as they mature;
(viii) pending, existing or projected approvals, commitments or
guarantees concerning or relating to, or rights of or from or claims against or
relating to, any governmental or quasi-governmental entity regarding,
<PAGE>
assurances of assistance, compliance with programs or benefits, real estate
taxes or increases therein or changes thereto, tax reductions or benefits,
ability to meet, comport with or comply with assistance programs or programs
creating tax benefits for owners or tax reductions or credits for, in favor of
or benefitting the owner of the Property; and
(ix) the compliance in the past by the Borrower or any other
applicable party with conditions to advances under the Loan Documents or the
implicit or explicit waiver of any such conditions, the establishment of any
course of dealing or course of conduct regarding advances, or any commitment on
the part of Seller to make any advances under the Loan Documents.
Purchaser acknowledges that it is a sophisticated investor and, except as
otherwise provided in this Agreement, Purchaser is relying solely on its own
investigation of the Loan, the Borrower, the Guarantors and the Property.
Purchaser further acknowledges that the failure of Seller to disclose any
material, non-public information with respect to the Loan, the Borrower, the
Guarantors or the Property which was not known to Seller shall not entitle
Purchaser to rescind or invalidate this Agreement or to seek any damages from
Seller, except as may otherwise be provided in this Agreement.
Section 3. Purchase Price of the Loan. (a) The purchase price of the
Loan shall equal the sum of (x) One Hundred One and eleven hundredths percent
(101.11%) of the outstanding Principal Amount of the Loan plus (y) One Hundred
One and eleventh hundredths percent (101.11%) of the outstanding Deferred
Interest (collectively, "Purchase Price"). The Purchase Price shall be paid as
follows:
(i) an initial deposit equal to five percent (5%) of the Purchase
Price (together with any interest earned thereon, if any, the "Deposit"),
previously paid by Purchaser to the Escrow Agent, to be held in escrow, by the
Escrow Agent for disbursement in accordance with the terms of the Escrow
Agreement; and
(ii) the balance of the Purchase Price on the Closing Date payable by
wire transfer of immediately available funds to the direct order of Seller.
Purchaser shall receive at Closing a credit against the balance of the Purchase
Price then due in an amount equal to the sum, without duplication, of (A) all
payments of principal and interest, including, without limitation, proceeds
from compromises and settlements made by the Borrower with respect to the Loan
and actually received by Seller during the period commencing on the Pricing
Date and ending on the Closing Date and (B) any amounts then received by Seller
pursuant to Section 12 hereof and not applied to the restoration or rebuilding
of a Property in accordance with the Loan Documents.
(b) The Escrow Agent will hold the Deposit in accordance with the Escrow
Agreement attached hereto as Exhibit C (the "Escrow Agreement"). The party
entitled to the Deposit shall receive all interest earned thereon, if any,
which interest shall not be credited against the balance of the Purchase Price
due pursuant to Section 3(a)(ii) above.
<PAGE>
(c) In addition to the Purchase Price, Purchaser shall on the Closing
Date pay to Seller by wire transfer of immediately available funds to the
direct order of Seller, the total amount of Adjustments due Seller in
accordance with Section 11 hereof.
Section 4. Assumption of Seller's Obligations. (a) On the Closing
Date, Purchaser shall assume and upon the Closing Date shall be deemed to have
assumed all of Seller's obligations of any kind whatsoever arising and accruing
after the Closing with respect to the Loan, the Property or the Loan Documents,
including, without limitation, any obligation Seller may have under the Loan
Documents to make any payment on any Prior Mortgage Loan, and Purchaser shall
indemnify Seller as specified in Section 17 hereof. The provisions of this
Section shall survive the Closing.
(b) No recital herein or in any Exhibit hereto of any obligations to be
assumed by Purchaser shall constitute an acknowledgment or admission by either
party that any additional sums or advances are due, or that any other
obligations exist, under the Loan Documents or otherwise, and each party shall
have the right to deny and contest any claim for any such sums or advances or
any such obligation in the same manner as if such recitals had not been
included in this Agreement.
Section 5. Priority of Mortgage. (a) As a condition to the obligation
of the Purchaser to pay the Purchase Price at the Closing, title to the
Property shall be subject only to the Loan Documents, any Prior Mortgage and
any Prior Mortgage Loan Documents and the liens, encumbrances and other title
matters described on Schedule 5(a) annexed hereto and other non-monetary
encumbrances or defects which do not materially, adversely affect the use of
the Property or the priority of any lien, claim or right being acquired by
Purchaser hereunder ("Permitted Encumbrances" -- all other title matters shall
be referred to herein as "Unpermitted Encumbrances").
(b) The policy of title insurance (the "Title Policies") with respect to
the Loan, a copy of which is attached to Schedule 5(a) hereto, is and will be
at Closing in full force and effect, is not subject to defenses of the insurer
by reason of acts or knowledge of the insured, and the rights of Seller
thereunder will be assigned to Purchaser at Closing. Except as may be
specified on Schedule 5(a) hereto, no claims have been made by Seller under any
such Title Policies.
Section 6. Closing of Sale. The closing of the sale of the Loan (the
"Closing") shall occur on a business day designated by Seller which shall be
not more than thirty (30) days after the Pricing Date (the "Closing Date");
provided that Seller shall give Purchaser not less than five (5) business days'
prior written notice of the Closing Date.
(a) At the Closing, the following (the "Seller's Closing Documents")
shall be delivered by Seller to Purchaser:
(i) assignment of the Mortgage and other recorded documents, without
recourse, representation or warranty, express or implied (other than any
covenant, representation or warranty contained in this Agreement which
expressly survives the Closing), in the form annexed hereto as Exhibit D (the
"Assignment of Recorded Documents").
<PAGE>
(ii) a general assignment of the Seller's rights in and to the Loan
and the Loan Documents, without recourse, representation or warranty, express
or implied (other than any covenant, representation or warranty contained in
this Agreement which expressly survives the Closing), in the form annexed
hereto as Exhibit E.
(iii) assignments of any and all uniform commercial code
financing statements heretofore filed with respect to the Property in which
Seller is named as secured party, all on Form UCC-3 or such other forms which
may then be accepted for filing in the offices where such financing statements
have been filed.
(iv) the original Loan Documents described on Schedule 7(f) or, to
the extent that Seller is unable to deliver an original of any of the Loan
Documents, copies thereof, together with a certificate of the Seller with
regard to the accuracy of such copies, in the form of Exhibit F attached
hereto.
(v) an allonge to the note evidencing the Loan, endorsing such note
to Purchaser.
(vi) all escrow, impound or cash collateral accounts and all letters
of credit, if any, held by Seller as security for the Loan or the performance
of the Borrower's obligations under the Loan Documents.
(vii) copies of notices given by Seller to the Borrower, the
applicable insurance companies or any other person regarding the transfer of
the Loan.
(viii) a certificate regarding any changes in the information
specified on Exhibit A, as updated to the Closing Date.
(ix) an affidavit stating that Seller is not a "foreign person" under
the Foreign Investment in Real Property Tax Act, Internal Revenue Code Section
1445, as amended, and the regulations promulgated thereunder.
(x) such other and further documents and instruments of transfer and
assignment, without recourse, representation or warranty, express or implied
(other than any, covenant, representation or warranty contained in this
Agreement which expressly survives the Closing), as may be reasonably required
to effectuate or confirm the assignment and transfer of the Loan and the Loan
Documents to Purchaser.
(b) At the Closing, the balance of the Purchase Price shall be delivered
by Purchaser to Seller.
(c) At the Closing, the Escrow Agent shall (and is hereby authorized and
directed by Seller and Purchaser to) transfer to Seller the Deposit.
(d) The obligation of Seller to transfer the Loan to Purchaser and to
otherwise consummate the transactions contemplated hereby shall be subject to
the satisfaction of the following conditions precedent on and as of the Closing
Date:
<PAGE>
(i) all representations and warranties of Purchaser contained in
this Agreement shall have been true in all material respects when made and
shall be true in all material respects at and as of the Closing Date as if such
representations and warranties were made at and as of the Closing Date, and
Purchaser shall have performed and complied with, in all material respects, all
covenants, agreements and conditions required by this Agreement to be performed
or complied with by Purchaser prior to or at the Closing;
(ii) Seller shall have received the balance of the Purchase Price;
(iii) Seller shall have received payment of the balance of the
Purchase Price in accordance with Section 3(a)(ii) and such other amounts as
are due Seller hereunder; and
(iv) No claim, litigation or other proceeding, arising out of or
relating to the Loan, the Borrower, any Guarantor or the Property, shall have
been threatened or commenced after the Pricing Date against Seller or any
person for whom Seller shall be liable or whom Seller shall be obligated to
indemnify, which in the opinion of Seller is material, unless the Purchaser
shall have provided security satisfactory to Seller in its sole discretion for
Purchaser's obligation to indemnify Seller against such claim, litigation or
other proceeding under Section 17.
(e) Purchaser's obligation to pay the Purchase Price, to purchase the
Loan and otherwise to consummate the transactions contemplated hereby shall be
subject to Sections 5 and 12 hereof and to the satisfaction of the following
conditions precedent on and as of the Closing Date:
(i) all representations and warranties of Seller contained in this
Agreement shall have been true in all material respects when made and, to the
extent then deemed remade, shall be true in all material respects at and as of
the Closing Date as if such representations and warranties were made at and as
of the Closing Date;
(ii) Seller shall have performed and complied with, in all material
respects, all material covenants, agreements and conditions required by this
Agreement to be performed or complied with by Seller prior to or at the Closing
Date;
(iii) Purchaser shall have received Seller's Closing Documents; and
(iv) Seller has delivered to Purchaser an estoppel certificate from
Borrower substantially in the form attached hereto as Exhibit G ("Borrower
Estoppel").
(f) The foregoing conditions are for the benefit only of the party for
whom they are specified to be conditions precedent and such party may, in its
sole discretion, waive any or all of such conditions and close under this
Agreement without any increase in, abatement of or credit against the Purchase
Price.
<PAGE>
(g) From and after the Closing Date, Seller shall promptly, subsequent to
its receipt, forward to Purchaser (at the address specified herein for notices)
copies or originals of any and all bills, invoices, insurance binders and
policies, letters, documents and other correspondence it receives relating to
the Loan, the Loan Documents and the Property to the extent (i) that such
materials are not otherwise subject to a privilege, or subject to an obligation
of confidentiality or other contractual obligation restricting Seller's release
thereof or (ii) the delivery thereof would not subject Seller to criminal
liability or otherwise constitute the violation of any Law.
Section 7. Representations and Warranties by Seller. Seller represents
and warrants to Purchaser as of the date of this Agreement as follows:
(a) Seller is an Illinois limited partnership, duly formed, validly
existing and in good standing under the Laws of the jurisdiction in which it
was formed, and has the full power, authority and legal right to engage in the
transactions contemplated by, and perform and observe the terms and conditions
of this Agreement.
(b) This Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary action on the part of Seller
and, upon the assumption that this Agreement constitutes a legal, valid and
binding obligation of Purchaser, this Agreement constitutes a legal, valid and
binding obligation of Seller, enforceable against Seller in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity.
(c) The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby by Seller do not and will not (i) violate
or conflict with the Seller's organizational documents or (ii) violate or
conflict with any Laws or any governmental regulation or permit applicable to
Seller or (iii) result in a breach of, or constitute a default under, any
provision of any contract or other instrument to which Seller is a party or by
which it is bound, which breach or default would prevent or materially
interfere with Seller's performance hereunder or (iv) result in the creation or
imposition of any lien, charge or encumbrance pursuant to the terms of any such
contract or other instrument which lien, charge or encumbrance would prevent or
materially interfere with Seller's performance hereunder.
(d) Except as specified on Schedule 7(h) or as previously disclosed to
Purchaser in writing, to the best of Seller's knowledge, without investigation
or inquiry with respect thereto, Seller has not received written notice of any
actions, suits or proceedings, either pending or threatened, against Seller in
connection with the Loan, including, without limitation, any actions, suits or
proceedings which might question the validity of this Agreement or the
consummation of the transactions contemplated hereby.
(e) As of the date specified on Exhibit A (the "Pricing Date"), the (i)
unpaid principal balance of the Loan, (ii) the amount of interest accrued on
the Loan which remains unpaid, (iii) the rate or rates at which interest on the
unpaid principal amount of the Loan accrues or is payable, and (iv) the
maturity date with respect to the Loan are as specified on Exhibit A hereto.
<PAGE>
(f) To the best of Seller's knowledge, (i) the Loan Documents specified
on Schedule 7(f) hereto constitute all material Loan Documents, (ii) such Loan
Documents have not been modified or amended, except as described on Schedule
7(f) hereto, and (iii) the copies of such Loan Documents which are attached to
Schedule 7(f) or which have previously been delivered to Purchaser are true and
correct in all material respects.
(g) Except as specified on Schedule 7(g) or 7(h) or as previously
disclosed to Purchaser in writing, to the best of Seller's knowledge, without
investigation or inquiry with respect thereto, Seller has received no written
notice that the Loan is subject to any right of rescission, set-off,
recoupment, abatement, diminution, counterclaim or valid defense by the
Borrower or any Guarantor which would affect the ability of the holder thereof
to realize the practical benefits of the security intended to be provided by
the Loan Documents for the Loan, as such realization may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether such realization is considered in a
proceeding at law or in equity.
(h) Except as set forth on Schedule 7(h) or as previously disclosed to
Purchaser in writing, to the best of Seller's knowledge, without investigation
or inquiry with respect thereto, (i) Seller has not commenced or threatened to
commence any actions, suits or proceedings in connection with the Loan
Documents, and (ii) there are no valid, effective and enforceable orders,
injunctions or decrees of any federal, state, municipal or local court or
arbitral body with respect to the Loan or the Loan Documents.
(i) Seller (i) is the sole owner and holder of the Loan, free of any
encumbrances, liens, pledges, charges or security interests of any nature,
(ii) has not granted any other option to purchase or other rights in and to the
Loan, (iii) has not pledged, collaterally assigned or otherwise hypothecated
any, interest therein or agreed to do so and (iv) has obtained (to the extent
required and not waived or the requirement therefor otherwise avoided or
averted) all consents of Borrower, any Guarantor or other third party pursuant
to a Loan Documents which is necessary for the execution and delivery of this
Agreement and the sale of the Loan provided for herein.
(j) Except as specified on Schedule 7(j) hereto or as previously
disclosed to Purchaser in writing, to the best of Seller's knowledge, without
investigation or inquiry with respect thereto, neither Borrower nor any
Guarantor has filed or is the subject of any proceeding under any state or
federal bankruptcy or insolvency Law.
(k) Except as specified on Schedule 7(k) hereto or as previously
disclosed to Purchaser, to the best of Seller's knowledge, without
investigation or inquiry with respect thereto, Seller has not received any
written notice of any pending or threatened condemnation or similar proceeding
affecting the Property.
(l) Except as specified on Schedule 7(l) hereto or as previously
disclosed to Purchaser in writing, no environmental reports or studies with
<PAGE>
respect to the Property (collectively, "Reports") have been performed by or on
behalf of Seller and, to the best of Seller's knowledge, without investigation
or inquiry, Seller has not received notice that any of such Reports are
inaccurate in any material respect.
All warranties and representations of Seller in this Section 7 are true
and correct in all material respects as of the date hereof, and, with respect
to clauses (a) through (c) above, shall continue to be true and correct in all
material respects as of the Closing Date. Subject to the provisions of Section
17 hereof, the representations and warranties of Seller contained in this
Section 7 shall survive the Closing for a period of ninety (90) days; provided,
however, that any claim hereunder based upon such representations and
warranties must be made within such ninety (90) day period.
Section 8. Representations and Warranties by Purchaser. Purchaser
represents and warrants as follows:
(a) Purchaser is an Illinois corporation, validly existing and in good
standing under the laws of the jurisdiction in which it was formed, and has the
full power, authority and legal right to engage in the transactions
contemplated by, and perform and observe the terms and conditions of this
Agreement.
(b) This Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary action on the part of
Purchaser and, upon the assumption that this Agreement constitutes a valid and
binding obligation of Seller, this Agreement constitutes a legal, valid and
binding obligation of Purchaser, enforceable against Purchaser in accordance
with its terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting the
enforcement of creditors' rights generally, and by general principles of
equity.
(c) The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby do not and will not (i) violate or
conflict with the organizational documents of Purchaser, (ii) violate or
conflict with any Law or any governmental regulation or permit applicable to
Purchaser, (iii) result in a breach of, or constitute a default under, any of
the provisions of any contract or other instrument to which Purchaser is a
party or by which it is bound, which breach or default would prevent or
materially interfere with Purchaser's performance hereunder, (iv) result in the
creation or imposition of any lien, charge or encumbrance pursuant to the terms
of any such contract or other instrument which lien, charge or encumbrance
would prevent or materially interfere with Purchaser's performance hereunder or
(v) to the best of Purchaser's knowledge, violate, conflict with or constitute
a "prohibited transaction" under Section 406 of the Employee Retirement Income
Security Act of 1974, Section 4975 of the Internal Revenue Code of 1986, as
amended, or under any comparable provision of the Internal Revenue Code of
1986, as amended.
(d) The execution and delivery of this Agreement by Purchaser do not, and
the performance of this Agreement by Purchaser will not, require the consent or
approval of any public authority.
<PAGE>
(e) There are no legal actions, suits, arbitrations, or other legal,
administrative or other governmental proceedings pending or, to the knowledge
of Purchaser, threatened against Purchaser that might question the validity of
this Agreement or the consummation of the transactions contemplated hereby.
(f) Purchaser is a principal with respect to the proposed transaction
relating to the Loan, and is not acting as an agent for an undisclosed
unaffiliated principal.
(g) The obligations of Purchaser hereunder are not contingent upon
Purchaser's procuring financing to provide funds to pay the Purchase Price to
Seller, and Purchaser has (or will, as of the Closing Date, have) available
funds to enable it to consummate the purchase and sale described herein.
(h) Purchaser is not acting on behalf of the Borrower or any of the
Guarantors.
(i) Purchaser is a sophisticated buyer with respect to the Loan, has
adequate information concerning the business and financial condition of
Borrower to make an informed decision regarding the purchase of the Loan and
has independently and without reliance upon Seller, and based on such
information as Purchaser has deemed appropriate, made its own analysis and
decision to enter into this Agreement.
(j) Without implying that the Loan constitutes a "security" within the
meaning of any applicable securities laws, Purchaser is not purchasing the Loan
with a view to resale or distribution in a manner that would violate applicable
securities laws.
All warranties and representations of Purchaser in this Section 8 are true
and correct in all material respects as of the date hereof, and shall continue
to be true and correct in all material respects as of the Closing Date.
Subject to the provisions of Section 17 hereof, the representations and
warranties of Purchaser contained in Sections 8(f), 8(i) and 8(j) shall survive
the Closing. Subject to the provisions of Section 17 hereof, the remaining
representations and warranties of Purchaser contained in this Section 17 shall
survive the Closing for a period of ninety (90) days; provided, however, that
any claim hereunder based upon such representations and warranties must be made
within such ninety (90) day period.
Section 9. Covenants of Seller. (a) Seller shall not, between the
date hereof and the Closing Date, take any affirmative action, or expressly
consent to any action, which would adversely affect the priority of the lien of
the Mortgage.
(b) Seller shall not, between the date hereof and the Closing Date,
(i) materially modify, waive or amend the terms of any of the Loan
Documents;
(ii) foreclose or accept a deed-in-lieu of foreclosure with respect
to the Loan;
<PAGE>
(iii) grant any consents contemplated in the Loan Documents
without Purchaser's consent, which shall not be unreasonably, withheld,
conditioned or delayed (if Purchaser shall fail to respond to Seller's request
for such a consent for a period of three (3) Business Days, such failure to
respond shall be deemed to constitute Purchaser's consent to such matter);
(iv) compromise or settle claims of any kind with respect to the
Loan;
(v) sell or enter into an agreement to sell all or any portion of
the Loan or interest therein;
(vi) release any Borrower or Guarantor or any portion of the
Property; or
(vii) increase the principal amount outstanding under any of the
Notes or increase the amount of the debt secured by any of the Mortgages;
provided, however, that Seller may make any advances which it may be required
to make under the Loan Documents and, at Seller's option, Seller may make
advances after obtaining Purchaser's prior written approval (which shall not be
unreasonably withheld, delayed or conditioned and which shall be deemed given
if Purchaser fails to respond to Seller within 24 hours of any written request
for approval) to pay costs and expenses incurred to protect and preserve the
Property and its rights and security under the Loan Documents, including,
without limitation, (A) taxes, charges or assessments that may be imposed by
law upon the Property, (B) premiums on insurance policies covering the
Property, (C) expenses incurred in upholding the lien or enforceability of a
Mortgage or any other Loan Document, (D) utilities, security and maintenance
costs with respect to the Property and (E) any other amount, cost or expense
which Seller is permitted or required to expend pursuant to the Loan Documents
or as otherwise may be required under the Loan Documents or pursuant to
requirements of Law. Seller shall provide Purchaser with notice of any such
advances made after the date hereof.
(c) Between the date hereof and the Closing Date, Seller shall continue
to service the Loan, the Borrower and any Guarantor in accordance with its
prior practices and as it would in the ordinary course of its business.
(d) From and after the Closing Date, if Seller shall receive any payment
from a Borrower, any Guarantor or other party on account of an obligation or
liability arising under the Loan Documents which prior to the Closing Date
would have inured to Seller's benefit, then Seller shall accept such payment on
behalf of Purchaser and, subject to the provisions of Section 17 hereof, shall
promptly remit same to Purchaser.
(e) From and after the Closing Date, Seller shall cooperate with
Purchaser in connection with the delivery of notices to Borrowers and
Guarantors and the substitution of Purchaser in any ongoing litigation to
collect the Loan or to enforce the Loan Documents, including, without
limitation, providing such documentation, witnesses and information which
Seller possesses and which may be reasonably requested by Purchaser; provided,
however, that Seller shall not be required to incur any cost or expense in
connection therewith for which Purchaser shall not agree to indemnify Seller.
<PAGE>
(f) Seller shall use its best efforts to obtain and deliver to Purchaser
prior to the Closing (i) the Borrower Estoppel, (ii) an estoppel certificate
from the holder of the Prior Mortgage certifying as to the amount of the unpaid
principal balance of the Prior Mortgage Loan and that no defaults exist under
the Prior Mortgage Loan and (iii) an estoppel certificate from the ground
lessor under the lease of the Property to Borrower; provided, however, that
Seller shall not be obligated to incur any material cost or expense in
connection therewith.
(g) Seller shall cooperate with Purchaser in the recordation of a copy of
the Bankruptcy Court Order approving Borrower's Modified Plan of Reorganization
Dated March 18, 1993, as amended as of May 18, 1993.
Section 10. Covenants of Purchaser. From and after the date hereof
until the Closing Date, (i) Purchaser shall not contact the Borrower or any
Guarantor regarding the Loan or the Property, (ii) Purchaser shall not take any
action with respect to the Borrower or any Guarantor, the Loan or the Loan
Documents which would have the effect of impairing or diminishing the value
thereof or the priority of the Mortgage, and (iii) Purchaser shall deliver to
Seller copies of all notices given or received by Purchaser in connection with
the Loan.
Section 11. Adjustments. The following (each an "Adjustment") shall be
apportioned at the Closing as of the close of business on the day immediately
preceding the Closing Date:
(a) Accrued Interest as of the close of business on the day
immediately preceding the Closing Date shall be calculated and shall constitute
an Adjustment due Seller; and
(b) The following advances shall be calculated and shall constitute
an Adjustment due Seller:
(i) Any advances which Seller may have made in accordance with
its obligations under the Loan Documents or pursuant to any requirement of any
applicable Laws; or
(ii) Any advances which Seller may have elected to make to pay
costs and expenses incurred to protect and preserve the Property and its rights
and security under the Loan Documents from and after the Pricing Date through
the close of business on the day immediately preceding the Closing Date,
including, without limitation, (A) taxes, charges or assessments that may be
imposed by law upon the Property, (B) premiums on insurance policies covering
the Property, (C) expenses incurred in upholding the lien or enforceability of
a Mortgage or any other Loan Document, (D) utilities, security and maintenance
costs with respect to the Property, and (E) any other amount, cost or expense
which Seller is permitted or required to expend pursuant to the Loan Documents.
(c) Contingent Interest based on the income or cash flow of the
Borrower for the year in which the Closing shall occur shall be prorated on a
per diem basis based on the Contingent Interest paid by the Borrower during the
immediately preceding year, and Seller's pro rata share of such Contingent
<PAGE>
Interest shall constitute an Adjustment due Seller. Such proration shall be
final and shall not be recalculated when the actual Contingent Interest for
such year shall be ascertained.
Section 12. Condemnation and Destruction. (a) If, prior to the Closing
Date, all or any significant portion (as defined in this Section) of the
Property is taken by eminent domain (or, if prior to the Closing Date, any
eminent domain proceeding with respect to any significant portion of the
Property has been commenced or Seller has received written notice threatening
to commence any such eminent domain proceeding), Seller shall notify Purchaser
thereof promptly after obtaining knowledge thereof and either Purchaser or
Seller shall have the right to terminate this Agreement, which termination
shall be effected by giving notice to the other not later than ten (10) days
after the giving of Seller's notice. For the purposes hereof, a "significant
portion" of the Property shall mean such a portion of the Property as shall
have a value, as reasonably determined by Seller, in excess of ten (10%)
percent of the Purchase Price. If either party elects to terminate this
Agreement as aforesaid, the provisions of Section 16(b) shall apply. If
neither Seller nor Purchaser elects to terminate this Agreement as aforesaid,
or if an "insignificant portion" (i.e., anything other than a significant
portion) of the Property is taken by eminent domain (or becomes the subject of
a pending taking), there shall be no abatement of the Purchase Price and Seller
shall assign to Purchaser (without recourse) at the Closing the rights of
Seller to the awards theretofore received, if any, for the taking, and
Purchaser shall be entitled to all rights of Seller under the Loan Documents,
if any, to receive and keep all awards for the taking of the Property or such
portion thereof.
(b) If, prior to the Closing Date, a material part (as defined in this
Section) of the Property is destroyed or damaged by fire or other casualty,
Seller shall promptly notify Purchaser thereof and either Purchaser or Seller
shall have the right to terminate this Agreement, which termination shall be
effected by giving notice to the other not later than ten (10) days after the
giving of Seller's notice. For the purposes hereof, a "material part" of the
Property shall mean a part of the Property as shall have a value, as reasonably
determined by Seller, in excess of ten (10%) percent of the Purchase Price. If
either party elects to terminate this Agreement as aforesaid, the provisions of
Section 16(b) shall apply. If neither Seller nor Purchaser elects to terminate
this Agreement as aforesaid, or if there is damage to or destruction of an
"immaterial part" (i.e., anything other than a material part) of the Property
by fire or other casualty, there shall be no abatement of the Purchase Price
and Seller shall assign to Purchaser (without recourse) at the Closing the
rights of Seller to any insurance proceeds theretofore received, if any, with
respect to such damage or destruction, and Purchaser shall be entitled to all
rights of Seller under the Loan Documents, if any, to receive and keep any
insurance proceeds payable upon the occurrence of any such casualty.
Section 13. Time of the Essence. Purchaser and Seller acknowledge and
agree that each and every one of the dates, time periods and time limitations
set forth in this Agreement shall be of the essence of this Agreement as
against Purchaser and Seller.
<PAGE>
Section 14. Title Examination, Diligence Fees. All premiums and fees
for title examination and title insurance or any other report, study, survey or
diligence research obtained by Purchaser, if any, and all related charges in
connection therewith shall be paid prior to or at the Closing by Purchaser.
Section 15. Broker. (a) Seller represents and warrants to Purchaser
that it has not hired, retained or dealt with any broker or finder in
connection with the negotiation, execution or delivery of this Agreement or the
transactions contemplated hereby, except Meenan, McDevitt & Company and Creamer
Realty Consultants. Seller will indemnify Purchaser against all Losses arising
out of any claim that the aforesaid representation and warranty is untrue.
(b) Purchaser represents and warrants to Seller that it has not hired,
retained or dealt with any broker or finder in connection with the negotiation,
execution or delivery of this Agreement or the transactions contemplated
hereby. Purchaser will indemnity Seller against all Losses arising out of any
claim that the aforesaid representation and warranty is untrue.
(c) The provisions of this Section shall survive the Closing and any
termination of this Agreement.
Section 16. Remedies. (a) If Purchaser shall default under this
Agreement, the parties hereto agree that the damages that Seller shall sustain
as a result thereof shall be substantial but shall be difficult to ascertain.
Notwithstanding anything contained herein to the contrary, the parties hereto
therefore agree that if, subject to the conditions contained herein, Purchaser
fails to perform all of the terms, covenants, conditions and agreements to be
performed by it hereunder whether at or prior to the Closing, Seller may retain
the Deposit as and for liquidated damages, and thereafter neither Seller nor
Purchaser shall have any further liability or obligation hereunder, except for
such liabilities or obligations which are specifically stated herein to survive
the termination of this Agreement.
(b) If on the Closing Date Seller shall be unable to perform its
obligations or to satisfy any condition applicable to Seller hereunder in
accordance with the provisions of this Agreement or title to the Property shall
not be in accordance with this Agreement and this Agreement shall be terminated
in accordance with its terms as a result thereof, the sole liability of Seller
shall be to direct Escrow Agent to return the Deposit to Purchaser, and, upon
such return, this Agreement shall be deemed terminated and neither Seller nor
Purchaser shall have any further liability or obligation hereunder, except for
such liabilities or obligations as are specifically stated to survive the
termination of this Agreement.
(c) Notwithstanding anything contained herein to the contrary, if Seller
shall intentionally default in the performance of its obligation to transfer
the Property hereunder, Purchaser shall be entitled to sue for specific
performance of this Agreement. Purchaser shall not have any right to sue for
or to collect damages, including, without limitation, punitive damages, from
Seller based upon any such intentional default by Seller.
(d) If, pursuant to the terms, conditions and provisions hereof,
Purchaser or Seller is not obligated to purchase and close with respect to the
<PAGE>
Loan, then upon Purchaser's or Seller's notice to the other with respect
thereto terminating this Agreement, Seller and Purchaser shall direct Escrow
Agent to disburse the Deposit to Purchaser and, upon such return, this
Agreement shall be deemed terminated and neither Seller nor Purchaser shall
have any further liability or obligation hereunder, except for such liabilities
or obligations as are specifically stated to survive the termination of this
Agreement.
Section 17. Indemnification.
(a) Subject to the limitations set forth in this Section 17, from and
after the Closing, Seller shall save, defend and indemnify the Purchaser
Indemnified Persons against and hold them harmless from any and all Losses (but
not exceeding aggregate Losses in excess of $100,000) imposed upon or incurred
by Purchaser Indemnified Persons, directly or indirectly, arising out of the
untruthfulness, inaccuracy or breach of any representation or warranty of
Seller contained in this Agreement or the breach of any agreement or covenant
of Seller contained in this Agreement, excluding any such Losses which shall
have been caused by the intentional misconduct of the Purchaser Indemnified
Persons.
(b) Subject to the limitations set forth in this Section 17, from and
after the Closing, Purchaser shall save, defend and indemnify the Seller
Indemnified Persons against and hold them harmless from any and all Losses
imposed upon or incurred by any Seller Indemnified Persons, directly or
indirectly, arising out of (i) the untruthfulness, inaccuracy or breach of any
representation or warranty of Purchaser contained in this Agreement; (ii) the
breach of any agreement or covenant of Purchaser contained in this Agreement;
(iii) Purchaser's failure to perform any of Sellers' obligations under the Loan
Documents which first arise or accrue from and after the Closing; or (iv) the
ownership of the Loan or the Loan Documents by Purchaser after the Closing
Date, excluding any such Losses which shall have been caused by the intentional
misconduct of the Seller Indemnified Persons. With the exception of (i) Losses
which shall have been caused by the intentional misconduct of the Seller
Indemnified Persons, or (ii) Losses for which Seller is required to indemnify
any Purchaser Indemnified Person pursuant to this Section 17, Purchaser hereby
releases and forever discharges the Seller Indemnified Persons from all
damages, losses, liabilities, obligations, penalties, claims, litigations,
demands, defenses, judgments, suits, proceedings, costs, disbursements or
expenses of any kind or nature sustained, suffered or incurred by any Purchaser
Indemnified Person in connection with or related to the Loan or the Loan
Documents.
(c) Each party's right of indemnification hereunder shall be that party's
sole contractual remedy with respect to any claims arising out of or in any way
related to the matters covered by this Agreement from and after the Closing and
shall be in lieu of any other remedy it may otherwise have at law, in equity or
otherwise.
(d) The obligations and liabilities of an Indemnifying Person with
respect to Losses resulting from the assertion of liability by third parties
(each, a "Third Party Claim") shall be subject to the following terms and
conditions:
<PAGE>
(i) The Indemnified Persons shall give prompt written notice (each,
a "Notice of Claim") to the Indemnifying Person of any Third Party Claim which
might give rise to any Loss by the Indemnified Persons, stating the nature and
basis of said Third Party Claim, and the amount thereof to the extent known.
Each Notice of Claim shall be accompanied by copies of all relevant
documentation with respect to such Third Party Claim, including, without
limitation, any summons, complaint or other pleading which may have been served
or written demand or other document or instrument.
(ii) If the Indemnifying Person shall acknowledge in writing its
obligation to indemnify the Indemnified Persons, subject to the terms and
conditions of this Agreement, against such Third Party Claim, then the
Indemnifying Person shall have the right to assume the defense of such Third
Party Claim at its own expense and by its own counsel (reasonably satisfactory
to the Indemnified Persons).
(iii) If the Indemnifying Person shall assume the defense of a
Third Party Claim in accordance with this Agreement, the Indemnifying Person
shall not be responsible for any legal or other defense costs subsequently
incurred by the Indemnified Persons in connection with the defense thereof. If
the Indemnifying Person does not exercise its right to assume the defense of
such a Third Party Claim, then the Indemnified Persons may assume such defense
and the costs, expenses and reasonable attorneys' fees incurred by them shall
continue to constitute Losses hereunder.
(iv) Anything contained herein to the contrary notwithstanding,
neither the Indemnifying Person nor the Indemnified Persons shall admit any
liability with respect to, or settle, compromise or discharge, any Third Party
Claim without the written consent of the other, which consent shall not be
unreasonably withheld. In addition, each of the Indemnifying Person and the
Indemnified Persons shall cooperate and act in a reasonable and good faith
manner to minimize Losses relating to any Third Party Claim.
(e) The provisions of this Section 17 shall survive the Closing.
Section 18. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given and received
(a) if personally delivered with proof of delivery thereof (any notice or
communication so delivered being deemed to have been received at the time
delivered on a Business Day, or if not a Business Day, the next succeeding
Business Day), or (b) sent by United States first class registered or certified
mail, return receipt requested, postage prepaid (any notice or communication so
sent being deemed to have been received three (3) Business Days after the date
of deposit in the United States mail), or (c) by nationally recognized
overnight courier (any notice or communication so sent being deemed to have
been received on the first succeeding Business Day subsequent to the day so
sent), or (d) by telecopier (any notice or communication so sent being deemed
to have been received on the date of transmission, if a Business Day, or the
first succeeding Business Day subsequent thereto), addressed to the respective
parties as follows:
<PAGE>
If to Purchaser:
BankAmerica Investment Corporation
231 South LaSalle Street, 17Q
Chicago, Illinois 60697
Attn: C. Richard Schuler
Fax: (212) 828-5423
With a copy to:
Barrack, Ferrazzano, Kirschbaum
& Perlman
333 West Wacker
Chicago, Illinois 60606
Attn: Marc Jacobs
Fax: (312) 984-3150
If to Seller:
Labcor III Limited Partnership
c/o Balcor Management Services, Inc.
Bannockburn Lake Office Plaza
2355 Waukegan Road, Suite A200
Bannockburn, Illinois 60015
Attn: Daniel L. Charleston
Fax: (847) 317-4462
With a copy to:
Hopkins & Sutter
Three First National Plaza
Suite 4100
Chicago, Illinois 60602
Attn: Wayne F. Osoba
Fax: (312) 558-3312
or to such other address or party as either party may have furnished to the
other in writing in accordance herewith, except that notices of change of
address or addresses shall only be effective upon receipt.
Section 19. Miscellaneous Provision. (a) The acceptance of the Closing
Documents referenced in Section 6 by Purchaser and Seller shall be deemed an
acknowledgment by Purchaser and Seller that the other has fully complied with
all of its obligations hereunder and that such party is discharged there from
and that such party shall have no further obligation or liability with respect
to any of the agreements made by it in this Agreement, except for those
provisions of this Agreement which expressly provide that any such obligation
of such obligation of such party shall survive the Closing.
(b) Each of Seller and Purchaser agrees that it will continue to be bound
by the terms, covenants and conditions of that certain Confidentiality
Agreement, dated as of October 4, 1996 the terms of which shall continue in
<PAGE>
full force and effect during the effectiveness of this Agreement and subsequent
to any Closing hereunder or the termination hereof. Seller agrees to treat the
terms and provisions of this Agreement, as they relate to the Purchase Price
paid by Purchaser and to any other economic terms of this Agreement, as
confidential, and will not disclose any of such terms to any third party,
including but not limited to the Borrower, but excluding Seller's officers,
employees, advisors, attorneys and consultants who have a need to know the same
in connection with the performance of Seller's obligations under this
Agreement, except to the extent that such disclosure is compelled pursuant to
any judicial order or is required to be disclosed pursuant to any law or
regulation applicable to Seller. The terms of this Section 19(b) shall continue
in full force and effect during the effectiveness of this Agreement and
subsequent to any Closing hereunder or the termination hereof.
(c) On or prior to the Closing Date, Purchaser shall not have the right
to assign its rights hereunder, in whole or in part, without the prior written
consent of Seller. Any assignment on or prior to the Closing Date without such
prior written consent shall be deemed null and void. Notwithstanding the
foregoing, Purchaser may assign this Agreement on or prior to the Closing Date
to an affiliate (as defined in the Securities Act of 1933) and to any lender
providing financing to Purchaser or such affiliate to consummate the
transactions contemplated herein; provided, however, that if any such
assignment shall occur or if Purchaser shall assign its rights hereunder after
the Closing Date, Purchaser shall remain liable for all obligations of
Purchaser under this Agreement. Subject to and without limiting the preceding
two sentences, this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.
(d) This Agreement does not constitute an offer to sell and shall not
bind the parties hereto unless and until each elects to be bound hereby by
executing and delivering to the other an executed original counterpart hereof.
(e) If any term or provision of this Agreement or the application thereof
to any persons or circumstances 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 enforceable to the fullest
extent permitted by law.
(f) This Agreement, together with the Escrow Agreement and the Schedules
and Exhibits hereto and thereto, constitute the entire agreement of the parties
regarding the subject matter of this Agreement and the Escrow Agreement, and
all prior or contemporaneous agreements, understandings, representations and
statements, oral or written, are hereby merged herein.
(g) The parties agree to mutually execute and deliver to each other, at,
and, from time to time after, the Closing, such other and further documents as
may be reasonably required by counsel for the parties to carry into effect the
purposes and intents of this Agreement, provided such documents do not impose
any material obligations upon any party hereunder except as set forth in this
Agreement.
<PAGE>
(h) This Agreement may not be modified, amended, altered or supplemented
except by written agreement executed and delivered by Purchaser and Seller.
This Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original, and all of which when so executed shall be deemed
to be an original, and all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement. Any delivery of a counterpart signature by
telecopier shall, however, be promptly followed by delivery of a manually
executed counterpart.
(i) This Agreement shall be governed by and construed in accordance with
the laws of the State of Illinois applicable to agreements made and to be
performed wholly within such State.
(j) All Schedules and Exhibits referred to in this Agreement are
incorporated herein and made a part hereof as fully as if set forth herein.
(k) The failure of any party hereto to enforce at any time any of the
provisions of this Agreement shall in no way be construed as a waiver of any of
such provisions, or the right of any party thereafter to enforce each and every
such provision. No waiver of any breach of this Agreement shall be held to be
a waiver of any other or subsequent breach.
(l) Each party to this Agreement shall bear the costs of its own
attorneys' fees and expenses in the preparation, negotiation and execution of
this Agreement. Purchaser shall pay any transfer, conveyance, real property
transfer or gains, mortgage or mortgage recording, sales, use, value added,
stock or note transfer and stamp taxes, any recording, registration or other
similar taxes, expenses or fees and any penalties, interest and fees thereon,
imposed by any taxing authority, recording officer or register, or other
governmental authority in connection with the transactions contemplated herein.
(m) The Article and Section headings used herein are for reference
purposes only and do not control or affect the meaning or interpretation of any
term or provision hereof. All references in this Agreement to Sections,
paragraphs, Exhibits and Schedules are to the Sections and paragraphs hereof
and the Exhibits and Schedules annexed hereto.
(n) The representations, warranties and agreements of the parties
contained herein are intended solely for the benefit of the parties to whom
such representation, warranties or agreements are made and their permitted
assigns, shall confer no rights hereunder, whether legal or equitable, in any
other party, and no other party shall be entitled to rely thereon.
(o) Seller and Purchaser each hereby irrevocably submits to the
jurisdiction of any State or Federal court sitting in the County of Cook and
State of Illinois over any action or proceeding arising out of or relating to
this Agreement, and Seller and Purchaser each hereby irrevocably agrees that
all claims in respect of such action or proceeding may be heard or determined
<PAGE>
in any such State or Federal court. Seller and Purchaser each hereby
irrevocably waives, to the fullest extent it may effectively do so, the defense
of an inconvenient forum to the maintenance of such action or proceeding.
Seller and Purchaser each irrevocably consents to the service of any and all
process in any such action or proceeding by the mailing of copies of such
process to Seller or Purchaser, as the case may be, at its respective address
specified in Section 18 hereof. Seller and Purchaser each hereby agrees that
the final judgment in any such action or proceeding shall be conclusive and may
be enforced in any other jurisdiction by suit on the judgment or in any other
matter provided by law. Nothing in this paragraph shall affect the right of
Seller or Purchaser, as the case may be, to serve legal process in any other
manner permitted by law or affect the right of Seller or Purchaser, the case
may be, to bring any action or proceeding against the other in the courts of
any other jurisdiction.
(p) NEITHER SELLER NOR PURCHASER MAY RECORD THIS AGREEMENT, ALL RECORDING
OFFICERS ARE HEREBY DIRECTED NOT TO RECORD THIS AGREEMENT. To the extent that
any such filing is made in violation of the Agreement, the party effecting such
filing shall indemnify the other against any damages incurred by the other in
connection therewith. The provisions of this paragraph shall survive the
termination of this Agreement.
<PAGE>
IN WITNESS WHEREOF, Purchaser and Seller have executed and delivered this
Agreement as of the day and year first above written.
SELLER:
LABCOR III LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Balcor Mortgage Advisors II, an Illinois
general partnership, its general partner
By: RGF-Balcor Associates II, an Illinois
general partnership, a general partner
By: The Balcor Company, a Delaware corporation,
a general partner
By: /s/ Daniel L. Charleston
-------------------------------------
Name: Daniel L. Charleston
-------------------------------------
Title: Authorized Agent
-------------------------------------
PURCHASER:
BANKAMERICA INVESTMENT CORPORATION
By: /s/ C. Richard Schuler
--------------------------------------
Name: Richard Schuler
--------------------------------------
Title: Attorney In Fact
--------------------------------------
<PAGE>
