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) December 18, 1996
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 $6,480,000
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 held by unaffiliated parties for a total of
$2,562,433. The Partnership obtained title to the property through a
non-judicial foreclosure in 1994.
As previously reported, on January 9, 1997, the Partnership contracted to sell
the property to an unaffiliated party, Austin Woods Limited Partnership, an
Illinois limited partnership, for a sale price of $11,650,000. On January 31,
1997, the purchaser exercised its option to terminate the agreement of sale.
Pursuant to the agreement of sale, the earnest money previously deposited by
the purchaser and interest accrued thereon has been returned to the purchaser.
On March 12, 1997, the Partnership contracted to sell the property to an
unaffiliated party, Mid-America Apartments of Texas, L.P., a Texas limited
partnership. The sale price is $10,300,000. The purchaser is obligated to
deposit $200,000 into an escrow account as earnest money. The remainder of the
sale price will be payable in cash at closing. The closing will be on or
before April 17, 1997. From the proceeds of the sale, the Partnership will pay
$206,000 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 $10,094,000, less closing costs. Of such proceeds,
$200,000 will be retained by the Partnership and will not be available for use
or distribution by the Partnership until 60 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 sold five other properties to the purchaser
during 1996 and 1997.
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.
<PAGE>
ITEM 5. OTHER EVENTS
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Perimeter 400 Center
As previously reported, on December 2, 1996, a general partnership consisting
of the Partnership and three affiliates (the "General Partnership") which owned
the Perimeter 400 Center, Fulton County, Georgia, contracted to sell the
property for a sale price of $40,700,000 to an unaffiliated party, Devon
Properties, Inc., a New York corporation. The sale closed on December 18,
1996. From the proceeds of the sale, the General Partnership paid $68,765 in
closing costs, $814,000 as a brokerage commission to an affiliate of the third
party providing property management services for the property and received
the remaining proceeds of $39,817,235. Of such proceeds, $1,750,000 will be
retained by the General Partnership until September 1997. The Partnership's
share of the total proceeds is approximately $5,049,000.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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(A) FINANCIAL STATEMENTS AND EXHIBITS:
None
(B) PRO FORMA FINANCIAL INFORMATION:
None
(C) EXHIBITS:
(2) (a) Termination Letter relating to the Agreement of Sale dated
January 9, 1997 relating to the sale of The Woods
Apartments, Austin, Texas.
(b) Agreement of Sale dated March 12, 1997 relating to the sale
of The Woods Apartments, Austin, Texas.
(c) Letter Agreement dated March 20, 1997 relating to the sale
of The Woods Apartments, Austin, Texas.
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: March 25, 1997
<PAGE>
PEDERSEN & HOUPT
January 31, 1997
Ms. Ilona Adams
Mr. James Mendelson
c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Mr. Daniel J. Perlman
Katten, Muchin & Zavis
525 W. Monroe
Suite 1600
Chicago, Illinois 60661
Re: Termination of Contracts (the "Contracts") by and between Austin
Woods Limited Partnership ("Buyer 1") and Woods-Barton Partners
Limited ("Seller 1") regarding The Woods Apartments, Austin, Texas,
Beaumont Property Limited Partnership ("Buyer 2") and Lexington Drive
Limited Partnership ("Seller 2") regarding Towne Oaks Apartments, and
Saddlewood Lubbock Limited Partnership ("Buyer 3") and Utica Limited
Partnership ("Seller 3") regarding Saddlewoods Apartments
(Buyer 1, Buyer 2 and Buyer 3 shall be collectively referred to as
"Buyer" and Seller 1, Seller 2 and Seller 3 shall be collectively
referred to as "Seller")
Dear Ms. Adams, Ms. Mendelson and Mr. Perlman:
Please be advised that pursuant to the terms of the above-captioned
Contracts, the Buyer hereby terminates its obligations and rights under all of
the Contracts. Attached hereto please find an Affidavit of Due Diligence
Termination Notice for each of the above-captioned Contracts which has been
duly executed by Buyer 1, Buyer 2 and Buyer 3 and appropriately notarized.
These Affidavits/ Termination Notices have also been forwarded to Frances
Chetta at Charter Title Company, along with wire instructions/directions
regarding the return of the Buyer's escrow money (total of $350,000.) Please
contact the undersigned if you have any questions regarding the attached.
Sincerely,
/s/ Prabha Parameswaran
---------------------------------
Prabha Parameswaran
on behalf of Buyer
cc: Erich Kollinger
Frances Chetta, Charter Title Company, Escrow Agent
<PAGE>
AFFIDAVIT OF DUE DILIGENCE TERMINATION NOTICE
State of Illinois )
) SS
County of Cook )
The undersigned, having been first duly sworn, does hereby affirm, depose
and state that AUSTIN WOODS LIMITED PARTNERSHIP, an Illinois limited
partnership, as Purchaser under that certain Agreement of Sale dated January 9,
1997, providing for the sale of property located in Austin, Texas and known as
The Woods Apartments, Austin, Texas, has terminated the Agreement of Sale
pursuant to Paragraph 7.1 thereof.
The undersigned demands return of all earnest money deposited under he
Agreement of Sale pursuant to its right therein.
IN WITNESS WHEREOF, the undersigned has executed this Affidavit on the
29th day of January, 1997.
AUSTIN WOODS LIMITED PARTNERSHIP,
an Illinois limited partnership
By: AW Austin Property Company,
an Illinois corporation
By: /s/ Erich Kollinger
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Name: Erich Kollinger
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Its: President
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Subscribed and sworn to before
me, a Notary Public in and for
said County and State on January 29, 1997.
/s/ Marian E. Harter
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Notary Public
SEAL
<PAGE>
AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement") is entered into as of the 12th
day of March, 1997, by and between MID-AMERICA APARTMENTS OF TEXAS, L.P., a
Texas limited partnership ("Purchaser"), and WOODS-BARTON PARTNERS LIMITED
PARTNERSHIP, an Illinois limited partnership ("Seller").
WITNESSETH:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to
sell at the price of Eleven Million Two Hundred Thousand And No/100 Dollars
($11,200,000.00) (the "Purchase Price"), that certain property commonly known
as The Woods Apartments, located in the City of Austin, State of Texas and
legally described and depicted on Exhibit A attached hereto (the "Property").
Included in the Purchase Price is all of the personal property set forth in
Exhibit B (the "Personal Property").
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as
follows:
A. Upon the execution of this Agreement, the sum of Two Hundred
Thousand And No/100 Dollars ($200,000.00) (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
B. On the "Closing Date" (as 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.
A. Seller has delivered to Purchaser a title commitment (the "Title
Commitment") for an owner's standard title insurance policy for the Property
issued by Lawyers Title Insurance Corporation (the "Title Insurer") dated
January 22, 1997. In addition, Seller has delivered to Purchaser a survey of
the Property prepared by Jeryl Hart Engineers and dated October 19, 1996 (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 ten (10) days after the date
hereof. For purposes of this Agreement, "Permitted Exceptions" shall mean: (a)
general real estate taxes and assessments, association assessments, special
district taxes and assessments and related charges not yet due and payable; (b)
matters caused by or through the actions of Purchaser or its agents,
contractors or representatives; (c) those title exceptions deemed Permitted
Exceptions pursuant to Paragraph 3.B below; and (d) matters relating to the
liens and security interests granted to secure the indebtedness evidenced by
the Note. All other exceptions to title shall be referred to as "Unpermitted
Exceptions."
<PAGE>
B. If the Title Commitment or the Updated Survey discloses any
exceptions to title other than the Permitted Exceptions, Purchaser may give
written notice to Seller (the "Title Notice") of Purchaser's disapproval of any
such exceptions (a "Disapproved Title Exception") on or before five (5)
business days after receipt of the Updated Survey. Any title exceptions which
are set forth in the Title Commitment or on the Survey to which Purchaser does
not object in accordance with the immediately preceding sentence shall be
deemed additional Permitted Exceptions. With regard to a Disapproved Title
Exception for which Purchaser gives Seller a Title Notice, Seller may but shall
not have the obligation to notify Purchaser within five (5) business days of
receipt of the Title Notice (the "Response Notice") whether Seller shall cause
the Title Insurer to remove or to insure over such Disapproved Title Exception
from the Title Commitment (together with a commitment to reissue the
appropriate endorsement for the benefit of Purchaser's financings and sale at
no cost to Purchaser). Any such Disapproved Title Exception which Seller
elects to cause the Title Insurer to remove or to insure over shall be
additional Permitted Exceptions. If Seller does not so notify Purchaser of its
election to cause the Title Insurer to remove or to insure over all Disapproved
Title Exceptions in accordance with this Paragraph 3.B, then unless Purchaser
waives in writing its objection to such Disapproved Title Exception and elects
to proceed towards Closing within five (5) additional business days, then this
Agreement shall be terminated. If this Agreement is terminated pursuant to the
terms of this Paragraph 3.B, (i) Purchaser shall promptly deliver to Seller
copies of all studies, reports and other investigations obtained by Purchaser
in connection with its due diligence of the Property, (ii) the Earnest Money
deposited by Purchaser shall be immediately paid to Purchaser, together with
any interest earned thereon and (iii) neither Purchaser nor Seller shall have
any right, obligation or liability under this Agreement, except for Purchaser's
obligation to indemnify Seller and restore the Property, as more fully set
forth in Paragraph 7.
C. The Title Commitment and the Updated Survey 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 only the
Permitted Exceptions, Disapproved Title Exceptions waived by Purchaser and
Unpermitted Exceptions waived by Purchaser (the "Title Policy"). Seller and
Purchaser shall each pay for one-half (1/2) of the costs of the Title
Commitment and Title Policy, other than the costs of any endorsements to, or
extended coverage on, the Title Policy which shall be paid by Purchaser.
4. PAYMENT OF CLOSING COSTS.
A. In addition to the costs set forth in Paragraphs 3 above, Seller and
Purchaser shall each pay for one-half (1/2) 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 and all other closing charges,
escrow fees and other expenses of the Title Insurer in connection with this
transaction.
<PAGE>
B. The obligations of Seller and Purchaser to pay the various costs
set forth in Paragraphs 3 and 4 shall survive the Closing or earlier
termination of this Agreement.
5. CONDITION OF TITLE.
A. If after delivery of the Title Notice to Seller, but prior to
Closing, a date-down to the Title Commitment discloses an Unpermitted Exception
(other than the current financing secured by the Property, which will be
satisfied by Seller at Closing or assumed by Purchaser at Closing pursuant to
the terms hereof), Seller shall have thirty (30) days from the date of the
date-down to the Title Commitment, to (i) have any Unpermitted Exceptions
which, in the aggregate, do not exceed $50,000.00 (a "Minor Unpermitted
Exception"), removed from the Title Commitment or to have the Title Insurer
commit to insure against loss or damage (together with the commitment to
reissue the appropriate endorsement for the benefit of Purchaser's financings
and sale at no cost to Purchaser) that may be occasioned by such Minor
Unpermitted Exceptions at no additional premium to Purchaser, or (ii) have the
right, but not the obligation, to have any Unpermitted Exceptions which, in the
aggregate, equals or exceeds $50,000.00, removed from the Title Commitment or
to have the Title Insurer commit to insure against loss or damage (together
with the commitment to reissue the appropriate endorsement for the benefit of
Purchaser's financings and sale at no cost to Purchaser) that may be occasioned
by such Unpermitted Exceptions at no additional premium to Purchaser. 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 of this Paragraph 5A, Purchaser may
terminate this Agreement upon notice to Seller within five (5) days after the
expiration of said thirty (30) day period; provided, however, and
notwithstanding anything contained herein to the contrary, if the Unpermitted
Exception which gives rise to Purchaser's right to terminate was recorded
against the Property as a result of the affirmative, willful action of Seller
(and not by any unrelated third party) with the intention to prevent the sale
of the Property in accordance with the terms hereof or if Seller is able to
bond over, cure or remove a Minor Unpermitted Exception for a cost not to
exceed $50,000 or the Title Insurer is willing to insure over a Minor
Unpermitted Exception for a cost not to exceed $50,000 in accordance with the
terms hereof and Seller fails to expend said funds in either case, then
Purchaser shall have the additional rights contained in Paragraph 11 herein.
Absent notice from Purchaser to Seller in accordance with the immediately
preceding sentence, Purchaser shall be deemed to have elected to terminate this
Agreement. If Purchaser terminates this Agreement in accordance with the terms
of this Paragraph 5A, 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>
B. Seller agrees to convey fee simple title to the Property to
Purchaser by special warranty deed ("Deed") in recordable form subject only to
the Permitted Exceptions, Disapproved Title Exceptions waived by Purchaser and
Unpermitted Exceptions waived by Purchaser.
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
A. Except as provided in any indemnity provisions 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, including, without
limitation, proceeds of lost rental insurance for the period commencing with
the Closing Date through the period of Purchaser's repair, to the extent said
lost rental insurance covers Purchaser's loss in rental insurance 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 except for Purchaser's obligations to indemnify Seller
and restore the Property, as set forth more fully in Paragraph 7. 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, including, without limitation, proceeds of
lost rental insurance for the period commencing with the Closing Date through
the period of Purchaser's repair, to the extent said lost rental insurance
covers Purchaser's loss in rental insurance and Seller shall pay to Purchaser
at the Closing the amount of Seller's insurance deductible.
B. 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
<PAGE>
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
impairs the use of the Property as it is currently being operated (hereinafter
collectively referred to as a "Material Event"), Purchaser may:
(a) 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,
except for Purchaser's obligations to indemnify Seller and restore the
Property, as set forth more fully in Paragraph 7; or
(b) 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
and give Purchaser the right of approval as to the amount of any award.
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 subparagraph (a) or subparagraph (b) of this
Paragraph 6B. 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 subparagraph (b).
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 and give Purchaser the right of
approval as to the amount of any award.
7. INSPECTION AND AS-IS CONDITION.
A. During the period commencing on the date hereof and ending at
5:00 p.m. Chicago time on March 17, 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 the 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.
<PAGE>
B. All of the foregoing tests, investigations and studies conducted
under this Paragraph 7 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
Purchaser and reasonably acceptable to Seller.
C. If Purchaser is dissatisfied with the results of the tests,
studies or investigations performed or information received pursuant to this
Paragraph 7 or if Purchaser is not satisfied with the Title Commitment and the
Survey, Purchaser shall have the right to terminate this Agreement by giving
written notice of such termination to Seller at any time prior to the
expiration of the Inspection Period. If written notice is not given by
Purchaser pursuant to this Paragraph 7 prior to the expiration of the
Inspection Period, then the right of Purchaser to terminate this Agreement
pursuant to this Paragraph 7 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; (ii) the Earnest Money deposited by
Purchaser shall be immediately paid to Purchaser, together with any interest
earned thereon and (iii) neither Purchaser nor Seller shall have any right,
obligation or liability under this Agreement, except for Purchaser's obligation
to indemnify Seller and restore the Property, as more fully set forth in this
Paragraph 7. Notwithstanding anything contained herein to the contrary,
Purchaser's obligation to indemnify Seller and restore the Property, as more
fully set forth in this Paragraph 7, shall survive the Closing, the delivery of
the Deed and the termination of this Agreement.
D. Purchaser acknowledges and agrees that it will be purchasing the
Property based solely upon its inspections and investigations of the Property,
and that Purchaser will be purchasing the Property "AS IS" and "WITH ALL
FAULTS", based upon the condition of the Property as of the date of this
Agreement, 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 other
representations or warranties of any kind upon which Purchaser is relying as to
any matters concerning the Property, including, but not limited to, the
condition of the land or any improvements comprising the Property, the
existence or non-existence of any hazardous materials or substances, 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
<PAGE>
utilities serving the Property or any zoning, environmental or building laws,
rules or regulations 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. Except with respect to a
breach by Seller of any representation or warranty expressly contained herein,
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, and except with respect to a breach by Seller of any representation or
warranty expressly contained herein, Purchaser hereby agrees not to assert any
claims for contribution, cost recovery or otherwise, against Seller, relating
directly or indirectly to the existence of asbestos or hazardous materials or
substances on, or environmental conditions of, the Property, whether known or
unknown. As used herein, the term "hazardous materials or substances" means
(i) hazardous wastes, hazardous substances, hazardous constituents, toxic
substances or related materials, whether solids, liquids or gases, including
but not limited to substances defined as "hazardous wastes," "hazardous
substances," "toxic substances," "pollutants," "contaminants," "radioactive
materials," or other similar designations in, or otherwise subject to
regulation under, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA"), 42 U.S.C. Section 9601 et seq.;
the Toxic Substance Control Act ("TSCA"), 15 U.S.C. Section 2601 et seq.; the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1802; the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C. Section 9601. et seq.; the
Clear Water Act ("CWA"), 33 U.S.C. Section 1251 et seq.; the Safe Drinking
Water Act, 42 U.S.C. Section 300f et seq.; the Clean Air Act ("CAA"), 42 U.S.C.
Section 7401 et seq.; and in any permits, licenses, approvals, plans, rules,
regulations or ordinances adopted, or other criteria and guidelines promulgated
pursuant to the preceding laws or other similar federal, state or local laws,
regulations, rules or ordinance now or hereafter in effect relating to
environmental matters (collectively the "Environmental Laws"); and (ii) any
other substances, constituents or wastes subject to any applicable federal,
state or local law, regulator or ordinance, including any Environmental Law,
now or hereafter in effect, including but not limited to (A) petroleum, (B)
refined petroleum products, (C) waste oil, (D) waste aviation or motor vehicle
fuel and (E) asbestos. Radon is a naturally occurring radioactive gas that,
when it has accumulated in a building in sufficient quantities, may present
health risks to persons who are exposed to it over time. Levels of radon that
exceed federal and state guidelines have been found in buildings in Texas.
Additional information regarding radon and radon testing may be obtained from
the county public health unit. Seller makes no representation regarding the
levels of radon at the Property.
E. 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. Except as expressly set forth herein,
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
<PAGE>
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 the representations
and warranties of Seller expressly contained herein and releases Seller from
any liability with respect to such historical information, except with respect
to a breach of a representation or warranty of Seller contained herein.
F. Seller has provided to Purchaser that certain Phase I
Environmental Site Assessment of The Woods, prepared by BCM Engineers, Inc.
dated May, 1992 (the "Existing Report"). Seller makes no representation or
warranty concerning the accuracy 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.
8. CLOSING. The closing of this transaction (the "Closing") shall be on
a date on or before April 17, 1997 specified by Purchaser upon not less than
five (5) business days' written notice from Purchaser to Seller through an
escrow established with the Title Insurer, at which time Seller shall deliver
possession of the Property to Purchaser. This transaction shall be closed 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.
9. CLOSING DOCUMENTS.
A. On the Closing Date, Purchaser shall deliver to Seller (or to
Title Insurer if the Closing occurs through escrow) an executed closing
statement, the balance of the Purchase Price, an assumption of the documents
set forth in Paragraph 9.B.(iii) and (iv), evidence of the assumption by
Purchaser of Seller's obligations under the Loan Documents and the release of
Seller from the "Lender" (as hereinafter defined) from all liability in
connection with the Loan Documents (in form and substance acceptable to Seller
in its reasonable discretion) 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.
B. On the Closing Date, Seller shall deliver to Purchaser (or to
Title Insurer if the Closing occurs through escrow) the following:
(i) the Deed (in the form of Exhibit E attached hereto as the
same may need to be modified to satisfy the Title Insurer), subject to
Permitted Exceptions, Disapproved Title Exceptions waived by Purchaser and
Unpermitted Exceptions waived by Purchaser;
<PAGE>
(ii) a special warranty bill of sale conveying the Personal
Property (in the form of Exhibit F attached hereto);
(iii) assignment and assumption of intangible property (in the
form attached hereto as Exhibit G);
(iv) an assignment and assumption of leases and security
deposits (in the form attached hereto as Exhibit H);
(v) non-foreign affidavit (in the form of Exhibit I attached
hereto);
(vi) original, and/or copies of, leases affecting the Property
in Seller's possession (which shall be delivered to Purchaser at the Property);
(vii) all documents and instruments reasonably required by the
Title Insurer to issue the Title Policy;
(viii) possession of the Property to Purchaser;
(ix) an executed closing statement;
(x) 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 J);
and
(xi) an updated rent roll.
<PAGE>
10. DEFAULT BY PURCHASER. 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 PURSUANT TO
PARAGRAPH 7 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 AND PURCHASER'S RIGHT TO RECEIVE FROM SELLER ITS ACTUAL, DOCUMENTED
THIRD PARTY EXPENSES INCURRED IN THE PERFORMANCE OF ITS DUE DILIGENCE HEREUNDER
AND THE PREPARATION OF THIS AGREEMENT, NOT TO EXCEED $200,000.00 IN THE
AGGREGATE. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF
SELLER'S DEFAULT IS (i) ITS (AND NOT AN UNRELATED THIRD PARTY'S) AFFIRMATIVE,
WILLFUL ACTION WHICH RESULTS IN THE RECORDING OF AN ENCUMBRANCE AGAINST THE
PROPERTY WITH THE INTENTION TO PREVENT THE SALE OF THE PROPERTY IN ACCORDANCE
WITH THE TERMS HEREOF AND WHICH GIVES RISE TO PURCHASER'S RIGHT TO TERMINATE
THIS AGREEMENT PURSUANT TO PARAGRAPH 5 HEREOF; (ii) ITS FAILURE TO EXPEND UP TO
$50,000 IF (a) SELLER IS ABLE TO BOND OVER, CURE OR REMOVE A MINOR UNPERMITTED
EXCEPTION FOR A COST NOT TO EXCEED $50,000 OR (b) THE TITLE INSURER IS WILLING
TO INSURE OVER A MINOR UNPERMITTED EXCEPTION FOR A COST NOT TO EXCEED $50,000
IN ACCORDANCE WITH THE TERMS HEREOF OR (iii) ITS REFUSAL TO DELIVER THE DEED,
THEN PURCHASER WILL BE ENTITLED TO SUE FOR SPECIFIC PERFORMANCE.
12. PRORATIONS.
A. 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; prepaid operating expenses; 1996 (if not paid) and 1997 real and
personal property taxes and other similar items shall be adjusted ratably as of
12:01 a.m. on the Closing Date. Assessments of record (other than ad valorem
taxes) 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. The parties agree to re-prorate the proration
items within forty-five (45) days after the date of Closing, except as to
delinquent rent referred to in Paragraph 12B below.
B. All sums paid following the Closing Date by any tenant of the
Property who is indebted under a lease for any period prior to and including
the Closing Date after the payment to Purchaser of all then current basic rent
<PAGE>
shall be deemed a "Post-Closing Receipt" until such time as all such
indebtedness is paid in full. Within ten (10) days following each receipt by
Purchaser of a Post-Closing Receipt, Purchaser shall pay such Post-Closing
Receipt to Seller. For a period of sixty days following Closing, Purchaser
shall send monthly collection notices to tenants residing at the Property owing
Post-Closing Receipts. Within 90 days after the Closing Date, Purchaser shall
deliver to Seller a reconciliation statement of Post-Closing Receipts through
the first 60 days after the Closing Date. Upon the delivery of the
Post-Closing Receipts reconciliation, Purchaser shall deliver to Seller any
Post-Closing Receipts owing to Seller and not previously delivered to Seller in
accordance with the terms hereof. At Seller's expense, 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. Seller shall deliver to Purchaser any sums received by Seller after
the Closing Date which relate to the period of time after the Closing Date,
along with an accounting identifying any such sums. Paragraph 12B of this
Agreement shall survive the Closing and the delivery and recording of the Deed.
13. RECORDING. This Agreement shall not be recorded and the act of
recording by Purchaser shall be an act of default hereunder by Purchaser and
subject to the provisions of Paragraph 10.
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.
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"), which shall
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 hereby agrees to indemnify, defend and hold
Seller harmless from any claim whatsoever (including without limitation,
reasonable attorney's fees, court costs and costs of appeal) from anyone
claiming by or through Purchaser for any fee, commission or compensation on
account of this Agreement, its negotiation or the sale hereby contemplated
other than claims of Insignia (or anyone claiming by, through or under
Insignia). Seller hereby agrees to indemnify, defend and hold Purchaser
harmless from any claim whatsoever (including without limitation, reasonable
attorney's fees, court costs and costs of appeal) from anyone claiming by or
through Seller for any fee, commission or compensation on account of this
Agreement, its negotiation or the sale hereby contemplated. 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.
<PAGE>
16. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
A. Any reference herein to Seller's knowledge, representation,
warranty or notice of any matter or thing shall only mean such knowledge or
notice that has actually been received by Beth Goldstein (asset manager of the
Property and who is in a position to have a basis for having knowledge with
respect to the Property) (hereinafter collectively 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 (other than Seller's Representative) 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.
B. Subject to the limitations set forth in Paragraph A of this
Paragraph 16, Seller hereby makes the following representations and warranties,
which representations and warranties are made to the Seller's knowledge and
which shall, subject to Paragraph 16C, be remade at Closing:
(i) Except for the matters disclosed on Exhibit N, Seller has no
knowledge of any pending or threatened litigation, claim, cause of action or
administrative proceeding concerning the Property;
(ii) The rent roll attached hereto as Exhibit L and which shall be
updated as of the Closing Date accurately sets forth the number of tenants then
in possession of the Property as of the date of said rent roll, contains an
accurate summary of the rental obligations, the expiration date, the security
deposit and the delinquencies of each such tenancy as of the date of said rent
roll;
(iii) That the tenant leases evidencing such tenancies referred to
in the rent roll are in full force and effect and have not been amended or
modified except as set forth in the rent roll or in the leases made available
to Purchaser for Purchaser's review;
(iv) Seller has received no notice of any material default on the
part of Seller under any said tenant leases;
(v) Except as set forth in the rent roll, no tenant under the
leases as of the date of the rent roll is in material default of the payment of
rent;
(vi) That Seller will not collect any of the rent or other sums
arising or accruing under any of the said tenant leases in advance of the time
when they come due except for the benefit of Purchaser (and Seller retains
ownership of all accounts receivable for rents due for periods of time prior to
the Closing);
(vii) The Seller has not given or suffered any assignment, pledge
or encumbrance with respect to any of the tenant leases or its interests
thereunder except as additional collateral for the existing loan secured by the
Property;
<PAGE>
(viii) Pending the Closing, Seller will not without the prior
consent of Purchaser convey all or any portion of the Property;
(ix) Except as shown on Exhibit M, there are no service contracts
which in any manner affect or otherwise relate to the Property or the tenant
leases;
(x) Seller has full right, power and authority to enter into this
Agreement and consummate the transaction contemplated hereby;
(xi) Seller and all persons or entities having beneficial
interests in the Property are "United States Persons," as defined in
Section 1445(f)(3) and Section 7701(g) of the Internal Revenue Code of 1986, as
amended, and the purchase of the Property by Purchaser as contemplated herein
will not be subject to the withholding requirements of Section 1445(a) of the
Code;
(xii) Except as 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. Seller has not commissioned any environmental report with
respect to the Property other than the Existing Report; and
(xiii) Seller has not received written notice from any third party
of any structural defects that would render the Property unusable as an
apartment complex.
C. 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 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 be or
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 16D 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. The parties agree that the
representations contained herein shall survive Closing for a period of sixty
(60) 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 sixty (60) days immediately following Closing).
<PAGE>
D. Seller covenants to operate and manage the Property in the same
manner that it has managed, maintained and operated the Property during the
period of Seller's ownership, subject to reasonable wear and tear and casualty.
17. LIMITATION OF LIABILITY. Neither any of Seller's respective partners
(whether general partners, limited partners or any level of sub-partner) nor
any beneficiaries, shareholders, officers, agents or employees, heirs,
successors or assigns shall have any personal liability of any kind or nature
for or by reason of any matter or thing whatsoever under, in connection with,
arising out of or in any way related to this Agreement and the transactions
contemplated herein, and Purchaser hereby waives for itself and anyone who may
claim by, through or under Purchaser any and all rights to sue or recover on
account of any such alleged personal liability. 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 shall
be $200,000.00; provided, however, in no way shall this sentence or the
following sentence preclude Purchaser's right of specific performance contained
in Paragraph 11 herein. 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. Seller further agrees not to
distribute $200,000.00 of the proceeds of the Purchase Price to its partners
for the longer of (i) sixty (60) 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 sixtieth (60th) day 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, facsimile delivered or given or made
by overnight courier such as Federal Express 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 A200
Bannockburn, Illinois 60015
Attention: Ilona Adams
<PAGE>
with copies to: The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A200
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)
TO PURCHASER: c/o Mid-America Apartment Communities, Inc.
6584 Poplar Avenue
Suite 340
Memphis, Tennessee 38138
Attention: Donald Aldridge
(901) 682-6600
(901) 682-6667 (FAX)
and one copy to: Apperson, Crump, Duzane & Maxwell
1755 Kirby Parkway
Suite 100
Memphis, Tennessee 38120
Attention: John Maxwell
(901) 756-6300
(901) 757-1296 (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, on the same day if sent by facsimile transmission prior to 5:00 p.m.
Chicago time (provided, however, if the notice or demand is not accepted by the
recipient's fax machine after 10 attempts by the sender to fax the notice or
demand and the sender advises the recipient by phone of the specific nature of
the notice or demand prior to 5:00 p.m. Chicago time on the same day the sender
is attempting to send its notice or demand by facsimile and if the sender sends
the notice or demand to the recipient by overnight courier to be delivered on
the first business day following the day that the notice or demand was
attempted to be given by fax, then the notice or demand shall be deemed given
on the date the sender attempted to send the facsimile) 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 or by overnight courier 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.
<PAGE>
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:
(1) Purchaser's check for the Earnest Money;
(2) One (1) fully executed copy of this Agreement; and
(3) 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 State of Texas
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.
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.
25. SERVICE CONTRACTS. Attached hereto as Exhibit M is a list of service
contracts affecting the Property. Seller shall assign the service contracts to
Purchaser at Closing, and Purchaser shall assume responsibility and obligations
under the service contracts. Seller agrees not to enter into any other service
contracts affecting the Property. Seller agrees to terminate any and all
management agreements affecting the Property as of the Closing Date.
26. AUDIT. Seller will make available to Purchaser's representatives
such books, accounts and records necessary for Purchaser to conduct an audit of
the Property's preceding fiscal year. This audit will be conducted solely at
Purchaser's expense for the purpose of satisfying its requirements as a
publicly held entity. Seller agrees to execute and deliver a disclosure letter
prepared by the auditors of Purchaser in the form attached hereto as Exhibit K.
The terms of this Paragraph 26 shall survive the Closing for a period of one
(1) year after the Closing Date.
27. CONSIDERATION. On or before the execution of this Agreement,
Purchaser shall deliver to Seller One Hundred And No/100 Dollars ($100.00) cash
(the "Independent Contract Consideration"), which amount has been bargained for
and agreed to as consideration for Purchaser's right to purchase the Property
pursuant to this Agreement and for Seller's execution and delivery of this
Agreement. The Independent Contract Consideration is in addition to and
independent of all other consideration provided in this Agreement, and is
nonrefundable in all events.
<PAGE>
28. WAIVER OF DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT. To the
extent permitted by law, Purchaser hereby waives the provisions of the Texas
Deceptive Trade Practices-Consumer Protection Act, Chapter 17, subchapter E
Section 17.41 through 17.63, inclusive, Vernon's Texas Code Annotated, Business
and Commerce Code. In order to evidence this ability to grant such waiver,
Purchaser hereby represents and warrants to Seller that Purchaser (i) is
represented by legal counsel in the purchase of the Property, and (ii) is not
in a significantly disparate bargaining position in relation to the Seller.
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the day of March, 1997.
PURCHASER:
MID-AMERICA APARTMENTS OF TEXAS, L.P.,
a Texas limited partnership
By: MAC OF DELAWARE, INC.,
a Delaware corporation
By: /s/ John J. Byrne, III
---------------------------------
John J. Byrne, III
President
SELLER:
WOODS-BARTON PARTNERS LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Woods-Barton Partners, Inc., an Illinois
corporation, its general partner
By: /s/ James E. Mendelson
---------------------------------
Name:
---------------------------------
Its:
---------------------------------
<PAGE>
Al Lieberman of Insignia Mortgage & Investment Company ("Insignia") 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 Insignia (the "Listing Agreement").
Insignia 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. Insignia agrees to deliver a receipt to the Seller at the Closing for
the fee or commission due Insignia and a release stating that no other fees or
commissions are due to it from Seller or Purchaser.
INSIGNIA MORTGAGE & INVESTMENT COMPANY
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
<PAGE>
Exhibits
A - Legal
B - Personal Property
C - Escrow Agreement
D - Intentionally Deleted
E - Special Warranty Deed
F - Special Warranty Bill of Sale
G - Assignment and Assumption of Intangible Property
H - Assignment and Assumption of Leases and Security Deposits
I - Non-Foreign Affidavit (FIRPTA Statement)
J - Notice to Tenants
K - Auditor's Disclosure Letter
L - Rent Roll
M - List of Service Contracts
N - Litigation
O - Intentionally Deleted
<PAGE>
WOODS-BARTON PARTNERS LIMITED PARTNERSHIP
Bannockburn Lake Office Plaza
2355 Waukegan Road, Suite A200
Bannockburn, Illinois 60015
March 20, 1997
Mr. John J. Byrne, III
Mid-America Apartments of Texas, L.P.
6584 Poplar Avenue, Suite 340
Memphis, Tennessee 38138
Re: The Woods Apartments, Austin, Texas
Gentlemen:
Reference is made to that certain Agreement of Sale ("Agreement") by and
between Woods-Barton Partners Limited Partnership, an Illinois limited
partnership ("Seller") and Mid-America Apartments of Texas, L.P., a Texas
limited partnership ("Purchaser") and that certain Escrow Agreement ("Escrow
Agreement") by and among Seller, Purchaser and Lawyers Title Insurance
Corporation ("Escrowee"). 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 and the
Escrow Agreement as set forth herein. Purchaser's acknowledgement of this
letter shall constitute Purchaser's agreement to the amendments contained
therein.
The Agreement is hereby amended as follows:
a. Section 1: The following text beginning in the second line is
hereby deleted "Eleven Million Two Hundred Thousand And No/100 Dollars
($11,200,000.00)" and is replaced with "Ten Million Three Hundred Thousand And
No/100 dollars ($10,300,000.00)".
b. Section 7. Subparagraph A: The date of "March 18, 1997" as contained
in the second line, (pursuant to that certain Letter Agreement dated March 14,
1997 by and among Seller, Purchaser and Escrowee), is hereby deleted and
replaced with "March 31, 1997".
Except as stated above, the Agreement of Sale shall remain in full force
and effect.
The Escrow Agreement is hereby amended as follows: (1) the date of "March
18, 1997" as contained in the first line of Paragraph 2, (pursuant to that
certain Letter Agreement dated March 14, 1997 by and among Seller, Purchaser
and Escrowee), is hereby deleted and replaced with "March 31, 1997" and (2) the
date of "March 18, 1997" as contained in the fifth line of Paragraph 2,
(pursuant to that certain Letter Agreement dated March 14, 1997 by and among
Seller, Purchaser and Escrowee), is hereby deleted and replaced with "March 31,
1997".
<PAGE>
Except as stated above, the Escrow Agreement shall remain in full force
and effect.
Please execute the acknowledgement below, and return this letter agreement
to Janet Lindeman by facsimile (312/902-1061) and by mail c/o Katten Muchin &
Zavis, 525 West Monroe Street, Suite 1600, Chicago, Illinois 60661.
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/ Jerry M. Ogle
----------------------------------
Name: Jerry M. Ogle
----------------------------------
Its: Managing Director and Secretary
----------------------------------
ACCEPTED AND AGREED TO THIS
20 DAY OF MARCH, 1997
MID-AMERICA APARTMENTS OF TEXAS,
L.P., a Texas limited partnership
By: MAC OF DELAWARE, INC.
a Delaware corporation
By: /s/ John J. Byrne III
-------------------------------
John J. Byrne, III
President
ESCROWEE:
Charter Title Company
By:
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Its Authorized Agent
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