SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) June 28, 1996
BALCOR REALTY INVESTORS - 83
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Exact Name of Registrant
Illinois 0-11805
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State or other jurisdiction Commission file number
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 36-3189175
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Address of principal I.R.S. Employer
executive offices Identification
Number
60015
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Zip Code
Registrant's telephone number, including area code:
(847) 267-1600
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
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Walnut Ridge Apartments, Phases I and II
In 1982, the Partnership acquired the Phases I and II of Walnut Ridge
Apartments, Corpus Christi, Texas (together, the "Property"), utilizing
$11,145,725 of offering proceeds. The property was acquired subject to first
mortgage financing of $8,315,000 and $7,390,000 on Phases I and II,
respectively. In order to complete refinancings in 1987, 1989, 1991 and 1993 of
new mortgage loans collateralized by the Property, the Partnership utilized a
total of $3,400,000 of additional Partnership funds towards these refinancings.
The Property's financing currently consists of a first mortgage loan and an
unsecured loan from an affiliate of the General Partner.
On June 28, 1996, the Partnership contracted to sell the Property for a sale
price of $20,000,000 to an unaffiliated party, BH TFL, Inc. On or before July
23, 1996, upon completion of the purchaser's due diligence review, the
purchaser will deposit $200,000 into an escrow account as earnest money. The
remaining portion of the sale price will be payable in cash at closing, which
is scheduled to occur on August 15, 1996. From the proceeds of the sale, the
Partnership will pay the outstanding balances of the first mortgage loan and
the unsecured loan, which are expected to have outstanding principal balances
of approximately $10,793,000 and $734,000 at closing, respectively, and
$250,000 to an unaffiliated party as a brokerage commission. An affiliate of
the third party providing property management services for the Property will
receive a fee for services rendered in connection with the sale of the
property of approximately $150,000. The Partnership will receive the
remaining proceeds of approximately $8,073,000, less closing costs. Neither
the General Partner nor any affiliate will receive a brokerage commission in
connection with the sale of the Property. The General Partner will be
reimbursed by the Partnership for actual expenses incurred in connection with
the sale.
Affiliates of the General Partner have simultaneously contracted to sell 5
other properties to the purchaser.
The closing is subject to the satisfaction of numerous terms and conditions.
There can be no assurance that all of the terms and conditions will be complied
with and, therefore, it is possible the sale of the Property may not occur.
ITEM 5. OTHER INFORMATION
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Desert Sands Village Apartments
As previously reported, on April 23, 1996, the Partnership contracted to sell
Desert Sands Village Apartments, Phoenix, Arizona, to an unaffiliated party,
ERP Operating Limited Partnership, an Illinois limited partnership, for a
sale price of $14,579,423. The Partnership and the purchaser subsequently
agreed to reduce the purchase price to $14,529,423. The sale closed June 12,
1996. The purchaser exercised its option to assume the existing first
mortgage loan collateralized by the property which had an outstanding
principal balance of $8,951,783 at closing.
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From the proceeds of the sale, the Partnership paid legal fees of approximately
$15,000 and a $109,346 fee to an affiliate of the third party providing
property management services for the property for services rendered in
connection with the sale. The Partnership received approximately $5,453,000 of
remaining proceeds. Of such amount, $500,000 is being retained by the
Partnership and will not be available for use or distribution by the
Partnership until 120 days after closing.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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(a) FINANCIAL STATEMENTS AND EXHIBITS:
None
(B) PRO FORMA FINANCIAL INFORMATION:
None
(C) EXHIBITS:
(2) (a) Agreement of Sale and attachment thereto relating to the
sale of the Walnut Ridge apartment complex, Phases I
and II, Corpus Christi, Texas.
(b) Amendment to Agreement of Sale and Escrow Agreement
relating to the sale of the Walnut Ridge apartment
complex, Phases I and II, Corpus Christi, Texas.
(99) Letter Agreement dated May 22, 1996 relating to the sale of
the Desert Sands Village apartment complex, Phoenix, Arizona.
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 REALTY INVESTORS-83
By: Balcor Partners-XIII, 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: July 12, 1996
<PAGE>
AGREEMENT OF SALE
THIS AGREEMENT, entered into as of the 28 day of June, 1996, by and
between BH TFL, INC. ("Purchaser") and W.R. 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 Twenty Million and No/100 Dollars ($20,000,000.00), that
certain property ("Property") in Corpus Christi, Texas, more particularly
described on Exhibit A attached hereto, which Property is known as Walnut Ridge
I & II Apartments. Included in the Purchase Price is all of the personal
property set forth on Exhibit B, which shall be transferred to Purchaser at
Closing (as hereinafter defined) by a Bill of Sale.
2. PURCHASE PRICE. The Purchase Price shall be paid as follows:
a. Upon the execution of this Agreement, the sum of $200,000.00
("Earnest Money") to be held in escrow by and in accordance with the provisions
of the Escrow Agreement("Escrow Agreement") among Seller, Purchaser and Ticor
Title Services ("Escrow Agent") attached hereto as Exhibit C;
b. On the Closing Date (as hereinafter defined), $20,000,000.00
(inclusive of the Earnest Money) adjusted in accordance with the prorations by
federally wired "immediately available" funds delivered to the Title Insurer no
later than 12:00 Noon on the Closing Date.
3. TITLE COMMITMENT AND SURVEY.
a. Seller shall obtain and deliver to Purchaser a title commitment
(the "Title Commitment") for an owner's standard title insurance policy (the
"Title Policy") for the Property issued by Chicago Title and Trust Company (the
"Title Insurer") together with copies of all documents of record shown thereon
(the "Title Documents"). In addition, Seller shall obtain and deliver to
Purchaser a survey of the Property (the "Survey"). For purposes of this
Agreement, "Permitted Exceptions" shall mean: (a) real estate taxes and
special assessments not yet due and payable; (b) matters caused by or through
the actions of Purchaser, and (c) those title and survey exceptions deemed
Permitted Exceptions pursuant to Paragraph 3.b below. All other exceptions to
title shall be referred to as "Unpermitted Exceptions." The Title Commitment
shall be conclusive evidence of good title as therein shown as to all matters
insured by the policy, subject only to the exceptions therein stated. On the
Closing Date, Seller shall cause the Title Insurer to issue the Title Policy or
a "marked up" commitment in conformity with the Title Commitment. Purchaser
and Seller shall equally share the costs of the Title Policy; however,
Purchaser shall pay for "extended coverage" and any special endorsements which
Purchaser requires.
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b. If the Title Commitment or the Survey discloses any exceptions
to title not acceptable to Purchaser, other than the Permitted Exceptions,
Purchaser may give written notice to Seller (the "Title Notice") of Purchaser's
disapproval of any such exceptions (a "Disapproved Title Exception") within ten
(10) days following receipt by Purchaser of the Title Commitment, Title
Documents and Survey. Any title exceptions which are set forth in the Title
Commitment or on the Survey to which Purchaser does not object in accordance
with the immediately preceding sentence shall be deemed Permitted Exceptions.
With regard to a Disapproved Title Exception for which Purchaser gives Seller a
Title Notice, Seller may, but shall not have the obligation to, bond over, cure
or cause the Title Insurer to remove such Disapproved Title Exception from the
Title Commitment and Seller shall give written notice to Purchaser of its
election within seven (7) days of receipt of the Title Notice. Any such
Disapproved Title Exception which Seller elects to bond over, cure or cause the
Title Insurer to remove shall be Permitted Exceptions. If Seller does not
elect to bond over, cure or cause the Title Insurer to remove any Disapproved
Title Exception, Purchaser may either waive its objection or terminate this
Agreement by giving written notice to Seller of its election within three (3)
days after receipt of Seller's notice. If Purchaser does not give such written
notice within such three (3) day period: (i) Purchaser shall have waived its
right to terminate this Agreement pursuant to this Paragraph 3.b.; and (ii)
such Disapproved Title Exception shall be deemed a Permitted Exception. If
Purchaser terminates this Agreement by written notice to Seller within such
three (3) day period: (i) Purchaser shall promptly deliver to Seller copies of
all studies, reports and other investigations obtained by Purchaser in
connection with its due diligence of the Property, (ii) the 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 7a.
4. CONDITION OF TITLE/CONVEYANCE. Seller agrees to convey fee simple
title to the Property by Special Warranty Deed ("Deed") in recordable form
subject only to the Permitted Exceptions. If Seller is unable to convey title
to the Property subject only to the Permitted Exceptions because of the
existence of an additional title exception ("Unpermitted Exception"), then
Purchaser can elect to take title to the Property subject to the Unpermitted
Exception or terminate this Agreement. If Purchaser elects to terminate this
Agreement, then the Earnest Money plus all accrued interest shall be delivered
to the Purchaser and, except for Purchaser's obligation to indemnify Seller and
restore the Property as set forth in Paragraph 7a., neither party shall have
any further liability hereunder.
5. PAYMENT OF CLOSING COSTS. Purchaser and Seller shall equally share
the costs of the documentary stamps with reference to the Deed and all other
stamps, intangible, documentary, recording, sales tax and surtax imposed by law
with reference to any other documents delivered in connection with this
Agreement. However, Purchaser shall pay for all costs in connection with any
mortgage Purchaser obtains.
<PAGE>
6. DAMAGE, CASUALTY AND CONDEMNATION.
a. If the Property suffers damage as a result of any casualty prior
to the Closing Date and can be repaired or restored in the case of real
property for $100,000 or less, or in the case of Personal Property, for $10,000
or less, then Seller shall commence the repair or restoration in an expeditious
manner. Seller shall retain all insurance proceeds. If the cost of repair and
restoration exceeds those amounts, then Seller can elect to either: (a) repair
and restore same, in which event the Closing Date will be extended until such
date as may reasonably be required to complete the repair or restoration; or
(b) terminate this Agreement upon notice to Purchaser served within twenty (20)
business days of such casualty. If Seller elects to terminate this Agreement
pursuant to this Paragraph, then Purchaser will have the option to accept the
Property in its damaged condition together with an assignment from Seller of
all insurance proceeds and receive a credit at Closing in the amount of the
deductible, provided Purchaser notifies Seller by notice served within twenty
(20) days after receipt of Seller's notice of election to terminate.
b. If condemnation proceedings ("Proceedings") have been instituted
against the Property and such Proceedings are in an amount in excess of
$100,000.00, then Purchaser can elect to either take the Property subject to
the Proceedings and an assignment of Seller's interest in the Proceedings or
terminate this Agreement. If Purchaser elects to terminate this Agreement, it
shall be by notice to the Seller within five (5) days after Seller notifies
Purchaser of the Proceedings.
c. If the Agreement is terminated pursuant to this Paragraph, then
all Earnest Money plus the interest accrued thereon shall be returned to the
Purchaser and, except for Purchaser's obligation to indemnify Seller and
restore the Property as set forth in Paragraph 7a., neither party shall have
any further liability hereunder.
7. INSPECTION AND AS-IS CONDITION.
a. (i) During the period commencing on May 10, 1996 and
ending at 5:00 p.m. Chicago time on July 8, 1996 (said period being herein
referred to as the "Inspection Period"), Purchaser and the agents, engineers,
employees, contractors and surveyors retained by Purchaser may enter upon the
Property, at any reasonable time and upon reasonable prior notice to Seller, to
inspect the Property, including a review of leases located at the Property, and
to conduct and prepare such studies, tests and surveys as Purchaser may deem
reasonably necessary and appropriate. In connection with Purchaser's review of
the Property, Seller has delivered to Purchaser copies of the current rent roll
for the Property, the most recent tax and insurance bills, utility account
numbers, service contracts, and unaudited year end 1994 and 1995 and unaudited
year to date 1996 operating statements.
(ii) All of the foregoing tests, investigations and studies to
be conducted under this Paragraph 7a. by Purchaser shall be at Purchaser's sole
cost and expense and Purchaser shall restore the Property to the condition
existing prior to the performance of such tests or 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
<PAGE>
defend set forth in the preceding sentence using attorneys selected by Seller,
in Seller's sole discretion. Prior to commencing any such tests, studies and
investigations, Purchaser shall furnish to Seller a certificate of insurance
evidencing comprehensive general public liability insurance insuring the
person, firm or entity performing such tests, studies and investigations and
listing Seller and Purchaser as additional insureds.
(iii) If Purchaser is dissatisfied with the results of the
tests, studies or investigations performed or information received pursuant to
this Paragraph 7a., Purchaser shall have the right to terminate this Agreement
by giving written notice of such termination to Seller at any time prior to the
expiration of the Inspection Period. If written notice is not given by
Purchaser pursuant to this paragraph 7a. prior to the expiration of the
Inspection Period, then the right of Purchaser to terminate this Agreement
pursuant to this paragraph 7a. shall be waived. If Purchaser terminates this
Agreement by written notice to Seller prior to the expiration of the Inspection
Period: (i) Purchaser shall promptly deliver to Seller copies of all studies,
reports and other investigations obtained by Purchaser in connection with its
due diligence during the Inspection Period; and (ii) the 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 7a. Notwithstanding anything contained herein to the
contrary, Purchaser's obligation to indemnify Seller and restore the Property,
as more fully set forth in this Paragraph 7a., shall survive the termination of
this Agreement.
b. Purchaser is not relying on Seller having made any inquiry as to
the condition of the Property or the leases. Purchaser acknowledges and agrees
that it will be purchasing the Property based solely upon its inspection and
investigations of the Property and that Purchaser will be purchasing the
Property "AS IS" and "WITH ALL FAULTS" based upon the condition of the Property
as of the date of this Agreement, subject to reasonable wear and tear and toss
by fire or other casualty or condemnation from the date of this Agreement until
the Closing Date. Without limiting the foregoing, Purchaser acknowledges that,
except as may otherwise be specifically set forth elsewhere in this Agreement,
neither Seller nor its consultants, brokers or agents have made any other
representations or warranties of any kind upon which Purchaser is relying as to
any matters concerning the Property, including, but not limited to, the
condition of the land or any improvements, the existence or nonexistence of
asbestos, lead in water, lead in paint, radon, underground or above ground
storage tanks, petroleum, toxic waste or any Hazardous Materials or Hazardous
Substances (as such terms are defined below), the tenants of the Property or
the leases affecting the Property, economic projections or market studies
concerning the Property, any development rights, taxes, bonds, covenants,
conditions and restrictions affecting the Property, water or water rights,
topography, drainage, soil subsoil of the Property, the utilities serving the
Property or any zoning, environmental or building laws, rules or regulations
affecting the Property. Seller makes no representation that the Property
complies with Title III of the Americans With Disabilities Act or any fire
codes or building codes. Purchaser hereby releases Seller from any and all
liability in connection with any claims which Purchaser may have against
Seller, and Purchaser hereby agrees not to assert any claims, for damage, loss,
compensation, contribution, cost recovery or otherwise, against Seller, whether
in tort, contract, or otherwise, relating directly or indirectly to the
existence of asbestos or Hazardous Materials or Hazardous Substances on, or
<PAGE>
environmental conditions of, the Property, or arising under the Environmental
Laws (as such term is hereinafter defined), or relating in any way to the
quality of the indoor or outdoor environment at the Property. This release
shall survive the Closing. As used herein, the term "Hazardous Materials" or
"Hazardous Substances" means (i) hazardous wastes, hazardous materials,
hazardous substances, hazardous constituents, toxic substances or related
materials, whether solids, liquids or gases, including but not limited to
substances defined as "hazardous wastes," "hazardous materials," "hazardous
substances," "toxic substances," "pollutants," "contaminants," "radioactive
materials," or other similar designations in, or otherwise subject to
regulation under, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA"), 42 U.S.C. Section 9601 et seq.;
the Toxic Substance Control Act ("TSCA"), 15 U.S.C. Section 2601 et seq.; the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1802; the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C. Section 9601, et seq.; the
Clean Water Act ("CWA"), 33 U.S.C. Section 1251 et seq.; the Safe Drinking
Water Act, 42 U.S.C. Section 300f et seq.; the Clean Air Act ("CAA"), 42 U.S.C.
Section 7401 et seq.; and in any permits, licenses, approvals, plans, rules,
regulations or ordinances adopted, or other criteria and guidelines promulgated
pursuant to the preceding laws or other similar federal, state or local laws,
regulations, rules or ordinance now or hereafter in effect relating to
environmental matters (collectively the "Environmental Laws"); and (ii) any
other substances, constituents or wastes subject to any applicable federal,
state or local law, regulation or ordinance, including any Environmental Law,
now or hereafter in effect, including but not limited to (A) petroleum, (B)
refined petroleum products, (C) waste oil, (D) waste aviation or motor vehicle
fuel, (E) asbestos, (F) lead in water, paint or elsewhere, (G) radon, (H)
Polychlorinated Biphenyls (PCB's) and (I) ureaformaldehyde.
c. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Seller makes no representation or
warranty that such material is complete or accurate or that Purchaser will
achieve similar financial or other results with respect to the operations of
the Property, it being acknowledged by Purchaser that Seller's operation of the
Property and allocations of revenues or expenses may be vastly different than
Purchaser may be able to attain. Purchaser acknowledges that it is a
sophisticated and experienced purchaser of real estate and further that
Purchaser has relied upon its own investigation and inquiry with respect to the
operation of the Property and releases Seller from any liability with respect
to such historical information.
8. CLOSING. The closing ("Closing") of this transaction shall be on
August 15, 1996 ("Closing Date"), at the office of the Title Insurer, at which
time Seller shall deliver possession of the Property to Purchaser.
9. CLOSING DOCUMENTS.
a. On the Closing Date, Purchaser shall deliver to Seller an
executed closing statement, the balance of the Purchase Price, and such other
documents as may be reasonably required in order to consummate the transaction
as set forth in this Agreement.
<PAGE>
b. On the Closing Date, Seller shall deliver to Purchaser
possession of the Property, the Deed (in the form of Exhibit E attached hereto)
subject to the Permitted Exceptions and those Unpermitted Exceptions waived by
Purchaser; an inventory of the Personal Property and a Bill of Sale for the
same (in the form of Exhibit F attached hereto); an executed closing statement;
an executed assignment and assumption of all service contracts (in the form of
Exhibit G attached hereto); an executed assignment and assumption of all leases
and security deposits (in the form of Exhibit H attached hereto); updated rent
roll; a notice to the tenants of the transfer of title and the assumption by
Purchaser of the landlord's obligations under the leases and the obligation to
refund the security deposits (in the form of Exhibit I attached hereto); a
non-foreign affidavit (in the form of Exhibit J attached hereto) and such other
documents as may be reasonably required by the Title Insurer in order to
consummate the transaction as set forth in this Agreement.
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 ANY 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. 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 THE EARNEST MONEY THEN
ON DEPOSIT WITH THE ESCROW AGENT, TOGETHER WITH ANY INTEREST ACCRUED THEREON,
AND THIS AGREEMENT SHALL TERMINATE AND, EXCEPT FOR PURCHASER'S OBLIGATION TO
INDEMNIFY SELLER AND RESTORE THE PROPERTY AS SET FORTH IN PARAGRAPH 7a.,THE
PARTIES SHALL HAVE NO FURTHER LIABILITY TO EACH OTHER AT LAW OR IN EQUITY.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF SELLER'S DEFAULT
IS ITS REFUSAL TO DELIVER THE DEED, THEN PURCHASER WELL BE ENTITLED TO SUE FOR
SPECIFIC PERFORMANCE, PROVIDED THAT AT THE TIME OF THE FILING OF THE COMPLAINT,
PURCHASER SHALL DEPOSIT WITH THE ESCROW AGENT THE AMOUNT OF THE PURCHASE
INCLUSIVE OF THE EARNEST MONEY.
12. a. PRORATIONS. Rents (exclusive of delinquent rents, but including
prepaid rents); refundable security deposits (which will be assigned to and
assumed by Purchaser and credited to Purchaser at Closing); water and other
utility charges; fuels; prepaid operating expenses; management fees in the
amount of 5% of collections; real and personal property taxes; and other
similar items shall be adjusted ratably as of 12:01 a.m. on the Closing Date
("Proration Date"), and credited or debited to the balance of the cash due at
Closing. If the Title Company has not received the cash due to Seller by 12:00
Noon on the Closing Date, then the Proration Date shall be extended to 11:59
P.M. on the Closing Date. If for any reason the Proration Date is earlier than
the Closing Date, then for the period from the Proration Date through the
Closing Date, Purchaser shall be entitled to the benefit of all of the income
from the Property and shall bear the burden of all of the operating expenses of
the Property, including, but not limited to, insurance, service contracts,
employee wages and benefits, management fees, utility costs and interest on the
existing mortgages encumbering the Property (if any). If the amount of any of
the items to be prorated is not then ascertainable, the adjustment thereof
shall be on the basis of the most recent ascertainable data. All prorations
will be final except as to Delinquent Rents referred to in 12b. below.
<PAGE>
b. DELINQUENT RENTS. If, as of the Closing Date, any rent is in
arrears for thirty (30) days or less, then the first rent collected by
Purchaser will be delivered to Seller for the Delinquent Rent. If rent is in
arrears for more than thirty (30) days, then rents collected by Purchaser shall
first be applied to current rent and then to Delinquent Rent. Any amounts
shall be paid by Purchaser to Seller within 10 days of receipt of such amounts.
This subparagraph of this Agreement shall survive the Closing and the delivery
and recording of the 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
shall be 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. Seller hereby consents to an
assignment to any partnership in which the Purchaser is a general partner,
provided such assignment is effected at least ten (10) days prior to the
Closing Date. However, Purchaser shall remain liable for all of the
Purchaser's obligations and undertakings set forth in this Agreement and the
exhibits attached hereto.
15. BROKER. The parties hereto represent and warrant that no broker
commission or finder fee is due and payable in connection with this transaction
other than to Sage Properties (to be paid by Seller). Seller's commission to
Sage Properties shall only be payable out of the proceeds of the sale of the
Property in the event the transaction set forth herein closes. Purchaser
agrees to indemnify, defend and hold harmless the Seller and any partner,
affiliate, parent of Seller, and all shareholders, employees, officers and
directors of Seller or Seller's partner, parent or affiliate (each of the above
is individually referred to as a "Seller Indemnitee") from all claims,
including attorneys' fees and costs incurred by a Seller Indemnitee as a result
of anyone's claiming by or through Purchaser any fee, commission or
compensation on account of this Agreement, its negotiation or the sale hereby
contemplated, other than Sage Properties. Purchaser does now and shall at all
times consent to a Seller Indemnitee's selection of defense counsel. Seller
agrees to indemnify, defend and hold harmless the Purchaser and all
shareholders, employees, officers and directors of Purchaser or Purchaser's
parent or affiliate (each of the above is individually referred to as a
"Purchaser lndemnitee") from all claims, including attorneys' fees and costs
incurred by a Purchaser Indemnitee as a result of anyone's claiming by or
through Seller any fee, commission or compensation on account of this
Agreement, its negotiation or the sale hereby contemplated, other than Sage
Properties. Seller does now and shall at all times consent to a Purchaser
Indemnitee's selection of defense counsel.
16. SELLER'S REPRESENTATIONS AND WARRANTIES AND LIABILITY.
a. Any reference herein to Seller's knowledge, representation,
warranty or notice of any matter or thing, shall only mean such knowledge or
notice that has actually been received by Phillip Schechter or Reid Reynolds,
the asset manager of the Property, and any representation or warranty of the
Seller is based upon those matters of which Phillip Schechter or Reid Reynolds
has actual knowledge. Any knowledge or notice given, had or received by any of
<PAGE>
Seller's agents, servants or employees shall not be imputed to Seller or the
individual partners or the general partner of Seller.
b. Subject to the limitations set forth in subparagraph a. above,
Seller hereby makes the following representations and warranties, all of which
are made to the best of Seller's knowledge, none of which shall survive the
Closing and delivery of the Deed:
i. The present use and occupancy of the Property conform with
applicable building and zoning laws and Seller has received no notice that any
such laws, rules or regulations are being violated.
ii. The rent rolls which Seller has submitted to the Purchaser
and updated as of the Closing Date are true and accurate.
iii. Seller has no knowledge of any pending or threatened
litigation, claim, cause of action or administrative proceeding concerning the
Property, except as shown on Exhibit D attached hereto.
iv. As of the Closing Date the management agreement with the
manager of the Property will have been terminated, and all employment
contracts, if any, will have been terminated.
17. ENVIRONMENTAL REPORT. Attached to this Agreement as Exhibit K are
the following reports (together, the "Report") of the Property, which Seller is
delivering to Purchaser, at Purchaser's request: (a) Phase I Environmental Site
Assessment of Walnut Ridge I Apartments, dated April 14, 1993, prepared by
H+GCL, Chicago, designated as Project No. 45004.15 and (b) Phase I
Environmental Site Assessment of Walnut Ridge II Apartments, dated April 14,
1993, prepared by H+GCL, Chicago, designated as Project No. 45004.15. Seller
makes no representation or warranty that the Report is accurate or complete.
Purchaser hereby releases Seller from any liability whatsoever with respect to
the Report, including, without limitation, the matters set forth in the Report,
the accuracy and/or completeness of the Report.
18. LIMITATION OF SELLER'S LIABILITY. No general or limited partner of
Seller, nor any of its respective beneficiaries, shareholders, partners,
officers, agents, employees, heirs, successors or assigns shall have any
personal liability of any kind or nature for or by reason of any matter or
thing whatsoever under, in connection with, arising out of or in any way
related to this Agreement and the transactions contemplated herein, and
Purchaser hereby waives for itself and anyone who may claim by, through or
under Purchaser any and all rights to sue or recover on account of any such
alleged personal liability.
19. TIME OF ESSENCE. Time is of the essence of this Agreement.
<PAGE>
20. NOTICES. Any notice or demand which either party hereto is required
or may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by overnight courier
such as Federal Express or by facsimile or made by United States registered or
certified mail addressed as follows:
TO SELLER: c/o The Balcor Company
Bannockburn Lake Office Complex
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attn: Ilona Adams
with copies to: The Balcor Company
Bannockburn Lake Office Complex
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
847/677-2900
847/982-4027 (FAX)
and
Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, Illinois 60661
Attn.: Daniel J. Perlman, Esq.
312/902-5532
312/902-1061 (FAX)
TO PURCHASER: BH TFL, Inc.
400 Locust Street
Suite 690
Des Moines, Iowa 50309
Attn: Harry Bookey
515/244-2622
515/244-2742 (FAX)
with a copy to: Mr. Gary Myers
c/o Davis, Hockenberg
666 Walnut
Suite 2500
Des Moines, Iowa 50309
515/288-2500
515/243-0654 (FAX)
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be
deemed to be delivered or made on the next business day if sent by overnight
courier, or on the same day if sent by facsimile before the close of business,
or the next day if sent by facsimile after the close of business, or on the 4th
business day after the same is deposited in the United States Mail as
registered or certified matter, addressed as above provided, with postage
thereon fully prepaid. Any such notice, demand or document not given,
delivered or made by registered or certified mail or by overnight courier or by
facsimile as aforesaid shall be deemed to be given, delivered or made upon
<PAGE>
receipt of the same by the party to whom the same is to be given, delivered or
made. Copies of all notices shall be served upon the Escrow Agent.
21. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute
three (3) copies of this Agreement and three (3) copies of the Escrow Agreement
and forward them to Seller for execution, accompanied with the Earnest Money
payable to the Escrow Agent. Seller will forward one (1) copy of the executed
Agreement to Purchaser and will forward the following to the Escrow Agent:
a. 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 the Purchaser and the Seller.
22. GOVERNING LAW. The provision contained herein with reference to
retention of the Earnest Money in the event of Purchaser's default shall be
governed by the laws of the State of Illinois. The remaining provisions of
this Agreement shall be governed by the laws of the State of Texas.
23. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all other negotiations, understandings and
representations made by and between the parties and the agents, servants and
employees.
24. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
25. CAPTIONS. Paragraph titles or captions contained herein are inserted
as a matter of convenience and for reference, and in no way define, limit,
extend or describe the scope of this Agreement or any provision hereof.
26. 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.
27. 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.
[EXECUTION PAGE FOLLOWS]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date set forth above.
PURCHASER:
BH TFL, INC.
By: /s/Harry Bookey
---------------------------
Name: Harry Bookey
Its: President
SELLER:
W.R. PARTNERS LIMITED PARTNERSHIP, an Illinois
limited partnership
By: W.R. Partners, Inc., an Illinois
corporation, its general partner
By: /s/Phillip A. Schechter
-------------------------------
Name: Phillip A. Schechter
-----------------------------
Its: Authorized Agent
------------------------------
<PAGE>
Jim Charnquist of Sage Properties ("Broker") executed this Agreement in its
capacity as a real estate broker and acknowledges that the fee or commission
due it from Seller as a result of the transaction described in this Agreement
is as set forth in that certain Listing Agreement, dated as of April 12, 1996
between Seller and Broker (the "Listing Agreement"). Broker also acknowledges
that payment of the aforesaid fee or commission is conditioned upon the Closing
and the receipt of the Purchase Price by the Seller. Broker agrees to deliver
a receipt to the Seller at the Closing for the fee or commission due Broker and
a release stating that no other fees or commissions are due to it from Seller
or Purchaser.
SAGE PROPERTIES
By: ___________________________________
Name: ___________________________________
Title: ___________________________________
<PAGE>
EXHIBITS
A - Legal Description
B - Personal Property
C - Escrow Agreement
D - Litigation
E - Deed
F - Bill of Sale
G - Assignment of Service Contracts
H - Assignment of Leases and Security Deposits
I - Notice to Tenants
J - Non-Foreign Affidavit
K - Phase I Environmental Reports
<PAGE>
AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT
THIS AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT (this
"Amendment") is made and entered into as of the 2nd day of July, 1996, by and
among W.R. PARTNERS LIMITED PARTNERSHIP, an Illinois Limited Partnership
("Seller"), BH TFL, INC. ("Purchaser") and TICOR TITLE SERVICES ("Escrow
Agent").
W I T N E S S E T H:
WHEREAS, Seller and Purchaser are parties to that certain Agreement of
Sale entered into as of June 28, 1996 (the "Original Agreement"), pursuant to
which Seller agreed to sell to Purchaser, and Purchaser agreed to purchase from
Seller, the "Property" (as defined in the Original Agreement);
WHEREAS, pursuant to the Original Agreement Seller, Purchaser and Escrow
Agent entered into that certain Escrow Agreement, dated June 28, 1996 (the
"Escrow Agreement"); and
WHEREAS, Seller and Purchaser now desire to amend the Original Agreement
and the Escrow Agreement pursuant to the terms and provisions set forth herein.
NOW, THEREFORE, for and in consideration of the premises and mutual
agreements contained herein, the payment of Ten and No/100 Dollars ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Seller, Purchaser and Escrow Agent agree that the Original
Agreement and the Escrow Agreement are amended as follows:
1. All capitalized terms used in this Amendment, to the extent not
otherwise expressly defined herein, shall have the same meanings ascribed to
such terms in the Original Agreement.
2. The reference to July 8, 1996 in Paragraph 7a(i) of the Original
Agreement and Paragraph 2 of the Escrow Agreement are hereby deleted and "July
23, 1996" is hereby substituted in their place.
3. Notwithstanding anything to the contrary contained in the Original
Agreement and the Escrow Agreement, the Earnest Money shall be delivered by
Purchaser to Escrow Agent on or before July 23, 1996 in the event Purchaser
does not elect to terminate the Agreement pursuant to Paragraph 7a. of the
Agreement and Paragraph 2 of the Escrow Agreement.
4. Except as amended herein, the terms and conditions of the Original
Agreement and the Escrow Agreement shall continue in full force and effect and
are hereby ratified in their entirety.
5. This Amendment may be executed in multiple counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same agreement.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
<PAGE>
Executed as of the date first written above.
SELLER:
W.R. PARTNERS LIMITED PARTNERSHIP,
an Illinois limited partnership
By: W.R. Partners, Inc., an Illinois corporation,
its general partner
By: /s/Phillip A. Schechter
-------------------------
Name: Phillip A. Schechter
-----------------------
Its: Authorized Agent
------------------------
PURCHASER:
BH TFL, INC.
By: /s/Harry Bookey
--------------------
Harry Bookey
President
ESCROW AGENT:
TICOR TITLE SERVICES
By: /s/R. W. Vaughan
---------------------------------
Its: Chairman - Commercial Division
--------------------------------
<PAGE>
May 22, 1996
VIA FACSIMILE MAIL
Roclab Investors-I The Balcor Company Daniel J. Perlman, Esq.
c/o The Balcor Company 2355 Waukegan Road Katten Muchin & Zavis
2355 Waukegan Road Suite A200 Suite 2100
Suite A200 Bannockburn, IL 60015 Chicago, IL 60661
Bannockburn, IL 60015 Attn.: Al Lieberman
Attn.: Ilona Adams
Re: Agreement of Sale, dated as of the 23rd day of April, 1996
(the "Agreement") between Roclab Investors-I, as Seller, and
ERP Operating Limited Partnership, as Purchaser, for the
purchase of Desert Sands Apartments, Phoenix, Arizona
(the "Property").
Dear Ms. Adams and Messrs. Lieberman and Perlman:
Purchaser hereby requests that the Agreement be modified to change
"Fourteen Million Five Hundred Seventy-Nine Thousand Four Hundred Twenty-Three
(14,579,423.00)" to "Fourteen Million Five Hundred Twenty-Nine Thousand Four
Hundred Twenty-Three (14,529,423.00)" in the second and third lines of Section
1 thereof. Please acknowledge Seller's acceptance of this modification to the
Agreement by executing this letter in the space provided below and returning it
via facsimile mail to Purchaser.
ERP OPERATING LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Equity Residential Properties Trust,
a Maryland Real Estate Investment
Trust, its general partner
By: /s/ Bruce C. Strohm
------------------------------------
Bruce C. Strohm
Executive Vice President
Approved and Accepted this 22nd day of May, 1996
ROCLAB INVESTORS-I, an Illinois limited partnership
By: Balcor Partners-XIII, an Illinois general partnership
a general partner
By: RGF-Balcor Associates-II, an Illinois general
partnership, a general partner
By: The Balcor Company, a Delaware corporation,
its general partner
By: /s/ Alan Lieberman
-------------------------------
Alan Lieberman
Senior Vice President
<PAGE>
