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) September 16, 1996
BALCOR PENSION INVESTORS-IV
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Exact Name of Registrant
Illinois 0-11699
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State or other jurisdiction Commission file number
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 36-3202727
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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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Glendale Fashion Center
In 1983, the Partnership funded a $6,374,300 loan evidenced by a promissory
note in the amount of $10,000,000 and collateralized by a wrap-around mortgage
on Glendale Fashion Center, Glendale, California. The Partnership obtained
title to the property through foreclosure in 1994, subject to two first
mortgage loans held by unaffiliated parties. One of the first mortgage loans
was repaid in 1995 from Partnership funds in the amount of $618,684.
On October 10, 1996, the Partnership contracted to sell the property for a sale
price of $11,500,000 to an unaffiliated party, Vestar Development Co., an
Arizona corporation. The purchaser has deposited $10,000 into an escrow
account as earnest money and is obligated to deposit an additional $290,000
upon completion of the purchaser's due diligence review. The remainder of the
sale price will be payable in cash at closing, scheduled for January 15, 1997.
As required by the agreement of sale, the Partnership is currently negotiating
with the City of Glendale for a ground lease for the vacant land adjacent to the
property for the construction and use of a parking garage facility. From the
proceeds of the sale, the Partnership will repay the outstanding balance of
the remaining first mortgage loan which is expected to be approximately
$1,235,000 at closing and will pay a total of $287,500 as a brokerage
commission to two unaffiliated parties, one of which is an affiliate of a party
which provides property management services for other properties owned by the
Partnership. The Partnership will receive the remaining proceeds of
approximately $9,977,500, less closing costs. Of such proceeds, $500,000 will
be retained by the Partnership and will not be available for use or
distribution by the Partnership until 6 months after 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.
The closing is subject to the satisfaction of numerous terms and conditions.
There can be no assurance that all of the terms and conditions will be complied
with and, therefore, it is possible the sale of the property may not occur.
ITEM 5. OTHER EVENTS
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(a) Palm View Apartments
In 1983, the Partnership funded a $3,244,581 loan evidenced by a promissory
note in the amount of $6,700,000 and collateralized by a wrap-around mortgage
on Palm View Apartments (formerly known as Timberlake Apartments), St.
Petersburg, Florida. The Partnership obtained title to the property through
foreclosure in 1990, subject to a first mortgage loan held by an unaffiliated
party. The first mortgage loan was refinanced in 1993 with a new $2,866,013
first mortgage loan from an unaffiliated party. The Partnership received
$15,104 in excess proceeds.
On September 17, 1996, the Partnership contracted to sell the property for a
<PAGE>
sale price of $6,500,000 to an unaffiliated party, Housing Systems,
Incorporated, a Georgia corporation. The purchaser has deposited $50,000 into
an escrow account as earnest money. The remainder of the sale price will be
payable in cash at closing, scheduled for November 20, 1996. From the
proceeds of the sale, the Partnership will repay the outstanding balance of the
first mortgage loan which is expected to be approximately $2,787,000 at
closing. The Partnership will also pay $162,500 to an unaffiliated party as a
brokerage commission and up to $81,250 to an affiliate of the third party
providing property management services for the property as a fee for services
rendered in connection with the sale of the property. The Partnership will
receive the remaining proceeds of approximately $3,469,000, less closing costs.
Of such proceeds, $50,000 will be retained by the Partnership and will not be
available for use or distribution by the Partnership until 90 days after
closing. Neither the General Partner nor any affiliate will receive a
brokerage commission in connection with the sale of the property. The General
Partner will be reimbursed by the Partnership for actual expenses incurred in
connection with the sale.
Affiliates of the General Partner have simultaneously contracted to sell 4
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.
(b) Regency Club Apartments
As previously reported, on August 13, 1996, the Partnership contracted to sell
Regency Club Apartments, Evansville, Indiana, to an unaffiliated party, New
Plan Realty Trust, a Massachusetts business trust, for a sale price of
$5,750,000. The sale closed on September 16, 1996. From the proceeds of the
sale, the Partnership paid closing costs of $22,080, $129,375 as a brokerage
commission to an unaffiliated party and $71,875 to an affiliate of the third
party providing property management services for the property as a fee for
services rendered in connection with the sale of the property The Partnership
received the remaining proceeds of $5,526,670. Of such proceeds, $250,000 is
being retained by the Partnership and will not be available for use or
distribution by the Partnership until 120 days after closing.
(c) Pelican Pointe Apartments
As previously reported, on August 30, 1996, the Partnership contracted to sell
Pelican Pointe Apartments, Pompano Beach, Florida, for a sale price of
$9,000,000 to an unaffiliated party, David Morrow. On September 30, 1996, the
Partnership and the purchaser agreed to reduce the sale price to $8,900,000.
The purchaser has deposited into an escrow account an additional $150,000 in
earnest money for a total of $200,000.
(d) Colony Apartments
In 1983, the Partnership funded a $2,100,569 loan evidenced by a promissory
note in the amount of $4,067,714 and collateralized by a wrap-around mortgage
on the Colony Apartments, Chapel Hill, North Carolina. The Partnership
obtained title to the property through foreclosure in 1990, subject to the
existing first mortgage loan. The first mortgage loan was refinanced in 1993
with a new $3,465,000 first mortgage loan from an unaffiliated party. The
Partnership received $1,554,105 in excess proceeds.
<PAGE>
On September 26, 1996, the Partnership contracted to sell the property for a
sale price of $7,100,000 to an unaffiliated party, Colony Apartments Chapel
Hill Limited Partnership, a Maryland limited partnership. The purchaser has
deposited $100,000 into an escrow account as earnest money. The remainder of
the sale price will be payable at closing, scheduled for the later of (i) three
business days after receipt from the holder of the first mortgage loan of
written approval to the sale of the property and the prepayment of the first
mortgage loan or (ii) October 31, 1996. The purchaser has the option to extend
the closing date to November 29, 1996 upon the deposit of an additional $50,000
in earnest money on or before October 25, 1996.
From the proceeds of the sale, the Partnership will repay the outstanding
balance of the first mortgage loan, expected to be approximately $3,386,000 at
closing. The Partnership will also pay $142,000 as a brokerage commission to
an unaffiliated party and up to $88,750 to an affiliate of the third party
providing property management services for the property as a fee for services
rendered in connection with the sale of the property. The Partnership will
receive the remaining proceeds of approximately $3,483,000, 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 its actual expenses incurred in
connection with the sale.
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.
(e) Del Lago Apartments
As previously reported, on August 29, 1996, the Partnership contracted to sell
Del Lago Apartments, Tampa, Florida, to an unaffiliated party, Alliance
Holdings, L.L.C., an Illinois limited liability company, for a sale price of
$3,100,000. Pursuant to a modification agreement dated October 2, 1996, the
Partnership and the purchaser have agreed to reduce the purchase price to
$2,800,000. The closing date has been extended to October 30, 1996. In
addition, the purchaser has the option to further extend the closing date to
December 30, 1996 upon written notice to the Partnership on or before October
25, 1996 and an additional deposit of $75,000 which amount is non-refundable in
the event the sale does not close, except in the event of a default by the
Partnership.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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(A) FINANCIAL STATEMENTS AND EXHIBITS:
None
(B) PRO FORMA FINANCIAL INFORMATION:
None
(C) EXHIBITS:
(2) Agreement of Sale dated October 10, 1996 and attachment thereto
relating to the sale of Glendale Fashion Center, Glendale,
California.
(99) (a) (i) Agreement of Sale dated September 17, 1996 and
attachment thereto relating to the sale of Palm View
Apartments, St. Petersburg, Florida.
(ii) First Amendment to Agreement of Sale dated September
23, 1996 relating to the sale of Palm View Apartments,
St. Petersburg, Florida.
(iii) Letter Agreement dated October 7, 1996 relating to the
sale of Palm View Apartments, St. Petersburg, Florida.
(b) First Amendment dated September 30, 1996 to Agreement
of Sale relating to the sale of Pelican Pointe Apartments,
Pompano Beach, Florida.
(c) Agreement of Sale dated September 26, 1996 relating to the
sale of Colony Apartments, Chapel Hill, North Carolina.
(d) Modification Agreement dated October 2, 1996 relating to
the sale of Del Lago Apartments, Tampa, Florida.
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-IV
By: Balcor Mortgage Advisors-III, 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: October 23, 1996
<PAGE>
AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), is entered into as of the 10th
day of October, 1996, by and between VESTAR DEVELOPMENT CO., an Arizona
corporation ("Purchaser"), and GLENDALE FASHION CENTER 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 Five Hundred Thousand And No/100 Dollars
($11,500,000.00) (the "Purchase Price"), that certain property commonly known
as Glendale Fashion Center, Glendale, California legally described on Exhibit A
attached hereto, including all easements benefiting the Property and all rights
and appurtenances pertaining to the Property, including any right, title and
interest in and to adjacent streets, alleys or rights of way (the "Property").
Included in the Purchase Price is all of the personal property set forth on
Exhibit B attached hereto (the "Personal Property").
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as
follows:
2.1. Upon the execution of this Agreement, the sum of Ten Thousand
and No/100 Dollars ($10,000.00) (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;
2.2. On or before the expiration of the "Inspection Period"
(hereinafter defined), Purchaser shall deposit an additional Two Hundred Ninety
Thousand and No/100 Dollars ($290,000.00) to be held in escrow by and in
accordance with the provisions of the Escrow Agreement and upon the deposit of
such sum all references to "Earnest Money" herein shall mean Three Hundred
Thousand and No/100 Dollars ($300,000.00); and
2.3. On the "Closing Date" (hereinafter defined), the balance of the
Purchase Price, adjusted in accordance with the prorations, by federally wired
"immediately available" funds, on or before 11:00 a.m Chicago time.
3. TITLE COMMITMENT AND SURVEY.
3.1. Attached hereto as Exhibit D is a copy of a title commitment
for an owner's standard title insurance policy issued by Near North National
Title Company, as agent for First American Title Company (hereinafter referred
to as "Title Insurer") dated September 20, 1996 for the Property (the "Title
Commitment"). Within five (5) days of the execution of the Agreement, Title
Insurer will provide a closing protection letter acceptable to Purchaser from
First American Title Company. For purposes of this Agreement, "Permitted
Exceptions" shall mean: (a) general real estate taxes; (b) matters caused by
the actions of Purchaser; and (c) the title exceptions set forth in Schedule B
of the Title Commitment approved by Purchaser by written notice to Seller on or
before the expiration of the "Inspection Period" (hereinafter defined), subject
to the terms of Paragraph 3.3 herein. All other exceptions to title shall be
referred to as "Unpermitted Exceptions". The Title Commitment as approved
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
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stated. On the Closing Date, Title Insurer shall deliver to Purchaser an ALTA
extended owner's title policy in conformance with the approved Title
Commitment, subject to Permitted Exceptions and Unpermitted Exceptions waived
by Purchaser (the "Title Policy"). Seller shall pay for the costs of a
standard owner's Title Policy and Purchaser shall pay for the cost of any
endorsements to, or extended coverage on, the Title Policy.
3.2. Purchaser has received a survey of the Property prepared by
Psomus & Associates dated November 17, 1994 (the "Existing Survey"). Seller
shall pay for the costs of updating the Existing Survey and Seller shall
deliver the updated survey (the "Updated Survey") to Purchaser within 21 days
after the date hereof.
3.3. Purchaser and Seller shall use good faith efforts to attempt to
agree upon a definitive list of Permitted Exceptions on or before the
expiration of the fourteen (14) day period following the delivery of
Purchaser's notice contained in Paragraph 3.1. If the parties cannot agree
upon a mutually acceptable list of Permitted Exceptions on or before the
expiration of said fourteen (14) day period, then either party shall have the
right to terminate this Agreement within ten (10) days following the expiration
of said fourteen (14) day period. If either party terminates this Agreement in
accordance with the terms of this Paragraph 3.3, 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.
4. PAYMENT OF CLOSING COSTS. In addition to the costs set forth in
Paragraphs 3.1 and 3.2, Seller shall pay for the costs of the documentary or
transfer stamps to be paid with reference to the "Deed" (hereinafter defined)
and all other stamps, intangible, transfer, documentary, recording, sales tax
and surtax imposed by law with reference to any other sale documents delivered
in connection with the sale of the Property to Purchaser. Seller and Purchaser
shall split all other charges of the Title Insurer in connection with this
transaction.
5. CONDITION OF TITLE.
5.1. If, prior to "Closing" (as hereinafter defined), a date-down to
the Title Commitment discloses any new Unpermitted Exception, Seller shall have
thirty (30) days from the date of the date-down to the Title Commitment, as
applicable, at Seller's expense, to (i) bond over, cure and/or have any
Unpermitted Exceptions which, in the aggregate, do not exceed $25,000.00,
removed from the Title Commitment or to have the Title Insurer commit to insure
against loss or damage that may be occasioned by such Unpermitted Exceptions,
or (ii) have the right, but not the obligation, to bond over, cure and/or have
any Unpermitted Exceptions which, in the aggregate, equal or exceed $25,000.00,
removed from the Title Commitment or to have the Title Insurer commit to insure
against loss or damage that may be occasioned by such Unpermitted Exceptions.
In such event, the time of Closing shall be delayed, if necessary, to give
effect to said aforementioned time periods. If Seller fails to cure or have
said Unpermitted Exception removed or have the Title Insurer commit to insure
as specified above within said thirty (30) day period or if Seller elects not
<PAGE>
to exercise its rights under (ii) in the preceding sentence, Purchaser may
terminate this Agreement upon notice to Seller within ten (10) days after the
expiration of said thirty (30) day period. Absent notice from Purchaser to
Seller in accordance with the preceding sentence, Purchaser shall be deemed to
have elected to take title subject to said Unpermitted Exception. If Purchaser
terminates this Agreement in accordance with the terms of this Paragraph 5.1,
this Agreement shall become null and void without further action of the parties
and all Earnest Money theretofore deposited into the escrow by Purchaser
together with any interest accrued thereon, shall be returned to Purchaser, and
neither party shall have any further liability to the other, except for
Purchaser's obligation to indemnify Seller and restore the Property, as more
fully set forth in Paragraph 7.
5.2. Seller agrees to convey fee simple title to the Property to
Purchaser by grant deed (the "Deed") in recordable form subject only to the
Permitted Exceptions and any Unpermitted Exceptions waived by Purchaser.
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
6.1. In the event of damage to the Property by fire or other
casualty prior to the Closing Date, Purchaser shall not have the right to
terminate its obligations under this Agreement by reason thereof and Seller
shall convey the Property to Purchaser at Closing subject to such damage and
Seller shall retain all rights to the insurance proceeds.
6.2. If between the date of this Agreement and the Closing Date, any
condemnation or eminent domain proceedings are initiated which might result in
the taking of any part of the Property or the taking or closing of any right of
access to the Property, Seller shall immediately notify Purchaser of such
occurrence. In the event that the taking shall include any portion of the
Property other than a taking which constitutes a road widening which does not
materially impair access to the Property or materially impair the use of the
Property as a shopping center (hereinafter collectively referred to as a
"Material Event"), Purchaser may:
6.2.1. terminate this Agreement by written notice to Seller, in
which event the Earnest Money deposited by Purchaser, together with interest
thereon, shall be returned to Purchaser and all rights and obligations of the
parties hereunder with respect to the closing of this transaction will cease;
or
6.2.2. proceed with the Closing, in which event Seller shall
assign to Purchaser all of Seller's right, title and interest in and to any
award made in connection with such condemnation or eminent domain proceedings.
6.3. Purchaser shall then notify Seller, within ten (10) business
days after Purchaser's receipt of Seller's notice, whether Purchaser elects to
exercise its rights under Paragraph 6.2.1 or Paragraph 6.2.2. Closing shall be
delayed, if necessary, until Purchaser makes such election. If Purchaser fails
to make an election within such ten (10) business day period, Purchaser shall
be deemed to have elected to exercise its rights under Paragraph 6.2.2. If
between the date of this Agreement and the Closing Date, any condemnation or
eminent domain proceedings are initiated which do not constitute a Material
Event, Purchaser shall be required to proceed with the Closing, in which event
Seller shall assign to Purchaser all of Seller's right, title and interest in
<PAGE>
and to any award made in connection with such condemnation or eminent domain
proceedings.
7. INSPECTION AND AS-IS CONDITION.
7.1. During the period commencing on September 25, 1996 and ending
at 5:00 p.m. Chicago time on November 8, 1996 (said period being herein
referred to as the "Inspection Period"), Purchaser and the agents, engineers,
employees, contractors and surveyors retained by Purchaser (plus prospective
tenants and other participants and their consultants) may enter upon the
Property, at any reasonable time and upon reasonable prior notice to Seller, to
inspect the Property, including a review of leases located at the Property, and
to conduct and prepare such studies, tests and surveys as Purchaser may deem
reasonably necessary and appropriate. In connection with Purchaser's review of
the Property, Seller agrees to deliver to Purchaser at the time of the
execution of this Agreement the following documents: copies of the most recent
tax bills, utility account numbers, service contracts, land use or other
documentation relating to the permissible use of the Property, if any, soils
reports, if any, engineering reports, if any, and all existing or prospective
leases respecting the Property, if any. Furthermore, if the following are
reasonably available to Seller, Seller shall deliver to Purchaser plans and
specifications and other site improvement information.
All of the foregoing tests, investigations and studies to be
conducted under this Paragraph 7.1 by Purchaser shall be at Purchaser's sole
cost and expense and Purchaser shall restore the Property to the condition
existing prior to the performance of such tests or investigations by or on
behalf of Purchaser. Purchaser shall defend, indemnify and hold Seller and any
affiliate, parent of Seller, and all shareholders, employees, officers and
directors of Seller or Seller's affiliate or parent (hereinafter collectively
referred to as "Affiliate of Seller") harmless from any and all liability, cost
and expense (including without limitation, reasonable attorney's fees, court
costs and costs of appeal) suffered or incurred by Seller or Affiliates of
Seller for injury to persons or property caused by Purchaser's investigations
and inspection of the Property. Purchaser shall undertake its obligation to
defend set forth in the preceding sentence using attorneys selected by
Purchaser, with Seller's reasonable approval.
Prior to commencing any such tests, studies and investigations,
Purchaser and any party entering upon the Property shall furnish to Seller a
certificate of insurance evidencing comprehensive general public liability
insurance insuring the person, firm or entity performing such tests, studies
and investigations and listing Seller and Purchaser as additional insureds
thereunder.
If Purchaser is dissatisfied in its sole discretion with the results
of the tests, studies or investigations performed or information received
pursuant to this Paragraph 7.1, Purchaser shall have the right to terminate
this Agreement by giving written notice of such termination to Seller at any
time prior to the expiration of the Inspection Period. If written notice is
not received by Seller pursuant to this Paragraph 7.1 prior to the expiration
of the Inspection Period, then the right of Purchaser to terminate this
Agreement pursuant to this Paragraph 7.1 shall be waived. If Purchaser
terminates this Agreement by written notice to Seller prior to the expiration
of the Inspection Period: (i) Purchaser shall promptly deliver to Seller copies
<PAGE>
of all studies, reports and other investigations obtained by Purchaser in
connection with its due diligence during the Inspection Period; and (ii) the
Earnest Money deposited by Purchaser shall be immediately paid to Purchaser,
together with any interest earned thereon, and neither Purchaser nor Seller
shall have any right, obligation or liability under this Agreement, except for
Purchaser's obligation to indemnify Seller and restore the Property, as more
fully set forth in this Paragraph 7.1. Notwithstanding anything contained
herein to the contrary, the terms of this Paragraph 7.1, shall survive the
Closing and the delivery of the Deed and termination of this Agreement.
7.2. Seller acquired title to the Property by foreclosure (or
deed-in-lieu thereof) and, therefore, Seller can make only limited
representations or warranties relating to the condition of the Property or the
Personal Property as set forth in Paragraph 16. Except as set forth in
Paragraph 16, Purchaser acknowledges and agrees that it will be purchasing the
Property and the Personal Property based solely upon its inspections and
investigations of the Property and the Personal Property, and that Purchaser
will be purchasing the Property and the Personal Property "AS IS" and "WITH ALL
FAULTS", based upon the condition of the Property and the Personal Property as
of the date of this Agreement, wear and tear and loss by fire or other casualty
or condemnation excepted. Without limiting the foregoing, Purchaser
acknowledges that, except as may otherwise be specifically set forth elsewhere
in this Agreement, neither Seller nor its consultants, brokers or agents have
made any representations or warranties of any kind upon which Purchaser is
relying as to any matters concerning the Property or the Personal Property,
including, but not limited to, the condition of the land or any improvements
comprising the Property, the existence or non-existence of "Hazardous
Materials" (as hereinafter defined), economic projections or market studies
concerning the Property, any development rights, taxes, bonds, covenants,
conditions and restrictions affecting the Property, water or water rights,
topography, drainage, soil, subsoil of the Property, the utilities serving the
Property or any zoning or building laws, rules or regulations or "Environmental
Laws" (hereinafter defined) affecting the Property. Seller makes no
representation or warranty that the Property complies with Title III of the
Americans with Disabilities Act or any fire code or building code. Except as
set forth in Paragraph 16, 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 or the Affiliates of Seller, and Purchaser
hereby agrees not to assert any claims for contribution, cost recovery or
otherwise, against Seller or the Affiliates of Seller, relating directly or
indirectly to the existence of asbestos or Hazardous Materials on, or
environmental conditions of, the Property, whether known or unknown. As used
herein, "Environmental Laws" means all federal, state and local statutes,
codes, regulations, rules, ordinances, orders, standards, permits, licenses,
policies and requirements (including consent decrees, judicial decisions and
administrative orders) relating to the protection, preservation, remediation or
conservation of the environment or worker health or safety, all as amended or
reauthorized, or as hereafter amended or reauthorized, including without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), 42 U.S.C. Section 9601 et seq., the Resource
Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. Section 6901 et seq.,
the Emergency Planning and Community Right-to-Know Act ("Right-to-Know Act"),
42 U.S.C. Section 11001 et seq., the Clean Air Act ("CAA"), 42 U.S.C. Section
7401 et seq., the Federal Water Pollution Control Act ("Clean Water Act"), 33
U.S.C. Section 1251 et seq., the Toxic Substances Control Act ("TSCA"), 15
<PAGE>
U.S.C. Section 2601 et seq., the Safe Drinking Water Act ("Safe Drinking Water
Act"), 42 U.S.C. Section 300f et seq., the Atomic Energy Act ("AEA"), 42 U.S.C.
Section 2011 et seq., the Occupational Safety and Health Act ("OSHA"),
29 U.S.C. Section 651 et seq., and the Hazardous Materials Transportation Act
(the "Transportation Act"), 49 U.S.C. Section 1802 et seq. As used herein,
"Hazardous Materials" means: (1) "hazardous substances," as defined by CERCLA;
(2) "hazardous wastes," as defined by RCRA; (3) any radioactive material
including, without limitation, any source, special nuclear or by-product
material, as defined by AEA; (4) asbestos in any form or condition; (5)
polychlorinated biphenyls; and (6) any other material, substance or waste to
which liability or standards of conduct may be imposed under any Environmental
Laws. Notwithstanding anything contained herein to the contrary, the terms of
this Paragraph 7.2 shall survive the Closing and the delivery of the Deed and
termination of this Agreement.
7.3. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Seller makes no representation or
warranty that such material is complete or accurate or that Purchaser will
achieve similar financial or other results with respect to the operations of
the Property, it being acknowledged by Purchaser that Seller's operation of the
Property and allocations of revenues or expenses may be vastly different than
Purchaser may be able to attain. Purchaser acknowledges that it is a
sophisticated and experienced purchaser of real estate and further that
Purchaser has relied upon its own investigation and inquiry with respect to the
operation of the Property and releases Seller and the Affiliates of Seller from
any liability with respect to such historical information. Notwithstanding
anything contained herein to the contrary, the terms of this Paragraph 7.3
shall survive the Closing and the delivery of the Deed and termination of this
Agreement.
7.4. Seller has provided to Purchaser the following existing reports:
Phase I Environmental Site Assessment prepared by Environ Corporation dated May
8, 1995 and Specifications for the Asbestos Abatement Project prepared by
Encorp (collectively, 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. Notwithstanding anything contained herein to the
contrary, the terms of this Paragraph 7.4 shall survive the Closing and the
delivery of the Deeds and termination of this Agreement.
7.5. Seller agrees to use good faith efforts to continue negotiations
of that certain proposed ground lease with the City of Glendale, California as
more further described in Exhibit J attached hereto for vacant land adjacent to
the Property for the construction and use of a parking garage facility (the
"Proposed Ground Lease"). Prior to the expiration of the Inspection Period,
Seller shall have the right to negotiate modifications to the current form of
the Proposed Ground Lease as long as Seller delivers written notice of such
modifications to the Proposed Ground Lease at least five (5) days prior to the
<PAGE>
expiration of the Inspection Period. After the expiration of the Inspection
Period and provided that Purchaser has not terminated the Agreement of Sale on
or before the expiration of the Inspection Period, then Seller agrees not to
make any further modifications to the Proposed Ground Lease without obtaining
the prior consent of Purchaser, which consent shall not be unreasonably
withheld or delayed. If Purchaser does not notify Seller of its disapproval of
modifications to the Proposed Ground Lease within five (5) days after its
receipt of notice from Seller, the proposed modification shall be deemed
approved by Purchaser. To the extent Seller executes a ground lease (the
"Executed Ground Lease") on or before the Closing and provided that the
Executed Ground Lease does not contain any modifications since the expiration
of the Inspection Period which have not been approved by Purchaser or deemed
approved by Purchaser in accordance with the terms herein, then Purchaser shall
assume all the obligations contained in the Executed Ground Lease. In the
event the Executed Ground Lease is entered into between Seller and the City of
Glendale, California on or before the Closing, it shall be a condition to
Seller's obligation to close the transaction that the City of Glendale release
Seller from all liability arising from said Executed Ground Lease from and
after the date of the Closing and it shall be a condition to Purchaser's
obligation to close the transaction that either (a) the City of Glendale
acknowledge in writing the effectiveness of the assignment of the Executed
Ground Lease to Purchaser or (b) the Executed Ground Lease state that Purchaser
is an approved assignee.
8. CLOSING. The closing of this transaction (the "Closing") shall be on
January 15, 1997 (the "Closing Date"), at the office of Title Insurer, Los
Angeles, California at which time Seller shall deliver possession of the
Property to Purchaser. This transaction shall be closed through an escrow with
Title Insurer, in accordance with the general provisions of the usual and
customary form of deed and money escrow for similar transactions in California.
All closing and escrow fees shall be divided equally between the parties hereto
except as set forth in Paragraph 4.
9. CLOSING DOCUMENTS.
9.1. On or prior to the Closing Date, Seller and Purchaser shall
execute and deliver to one another a joint closing statement. In addition,
Purchaser shall deliver to the Title Insurer for Seller the balance of the
Purchase Price, an assumption of the documents set forth in Paragraph 9.2.3 and
9.2.8 and such other documents as may be reasonably required by the Title
Insurer in order to consummate the transaction as set forth in this Agreement.
9.2. On the Closing Date, Seller shall deliver to Title Insurer the
following for Purchaser:
9.2.1. the Deed (in the form of Exhibit E attached hereto),
subject to Permitted Exceptions and those Unpermitted Exceptions waived by
Purchaser;
9.2.2. a quit claim bill of sale conveying the Personal
Property (in the form of Exhibit F attached hereto);
9.2.3. assignment and assumption of intangible property (in the
form attached hereto as Exhibit G), including, without limitation, the
"Retained Service Contracts" (hereinafter defined), if any;
<PAGE>
9.2.4. non-foreign affidavit (in the form of Exhibit I attached
hereto);
9.2.5. all documents and instruments reasonably required by the
Title Insurer to issue the Title Policy;
9.2.6. possession of the Property to Purchaser;
9.2.7. evidence of the termination of the management agreement;
and
9.2.8. assignment and assumption of the Executed Ground Lease
in form mutually agreeable to Purchaser and Seller and in conformance with the
terms of Paragraph 7.5, to the extent there exists an Executed Ground Lease.
10. PURCHASER'S DEFAULT. ALL EARNEST MONEY DEPOSITED INTO THE ESCROW IS
TO SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND
UNDERTAKINGS UNDER THIS AGREEMENT. IN THE EVENT OF A DEFAULT OF THE PURCHASER
UNDER THE PROVISIONS OF THIS AGREEMENT, SELLER SHALL RETAIN ALL OF THE EARNEST
MONEY AND THE INTEREST THEREON AS SELLER'S SOLE RIGHT TO DAMAGES OR ANY OTHER
REMEDY, EXCEPT FOR PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER AND RESTORE THE
PROPERTY AS SET FORTH IN PARAGRAPH 7.1 HEREOF. THE PARTIES HAVE AGREED THAT
SELLER'S ACTUAL DAMAGES, IN THE EVENT OF A DEFAULT BY PURCHASER, WOULD BE
EXTREMELY DIFFICULT OR IMPRACTICAL TO DETERMINE. THEREFORE, BY PLACING THEIR
INITIALS BELOW, THE PARTIES ACKNOWLEDGE THAT THE EARNEST MONEY HAS BEEN AGREED
UPON, AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S
DAMAGES.
11. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF ALL EARNEST MONEY
TOGETHER WITH ANY INTEREST ACCRUED THEREON AND THE RIGHT TO RECEIVE FROM SELLER
AN AMOUNT EQUAL TO THE ACTUAL THIRD PARTY COSTS INCURRED BY PURCHASER IN
PERFORMING ITS DUE DILIGENCE REVIEW OF THE PROPERTY NOT TO EXCEED $300,000.00,
AND THIS AGREEMENT SHALL THEN BECOME NULL AND VOID AND OF NO EFFECT AND THE
PARTIES SHALL HAVE NO FURTHER LIABILITY TO EACH OTHER AT LAW OR IN EQUITY,
EXCEPT FOR PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER AND RESTORE THE PROPERTY
AS SET FORTH MORE FULLY IN PARAGRAPH 7. NOTWITHSTANDING ANYTHING CONTAINED
HEREIN TO THE CONTRARY, IF SELLER'S DEFAULT IS ITS REFUSAL TO DELIVER THE DEED,
THEN PURCHASER WILL BE ENTITLED TO SUE FOR SPECIFIC PERFORMANCE.
12. PRORATIONS.
12.1. Water and other utility charges; fuels; prepaid operating
expenses benefitting the Property after Closing ; real and personal property
taxes and other similar items shall be adjusted ratably as of 11:59 p.m. on the
Closing Date, and credited against the balance of the cash due at Closing.
Assessments payable in installments which are due subsequent to the Closing
Date shall be the responsibility of Purchaser. If the amount of any of the
items to be prorated is not then ascertainable, the adjustments thereof shall
be on the basis of the most recent ascertainable data. All prorations will be
final except as to delinquent rent referred to in Paragraph 12.2 below.
13. RECORDING. Neither this Agreement nor a memorandum thereof shall be
recorded and the act of recording by Purchaser shall be an act of default
hereunder by Purchaser and subject to the provisions of Paragraph 10 hereof.
<PAGE>
14. ASSIGNMENT. The Purchaser shall not have the right to assign its
interest in this Agreement without the prior written consent of the Seller.
Any assignment or transfer of, or attempt to assign or transfer, Purchaser's
interest in this Agreement shall be an act of default hereunder by Purchaser
and subject to the provisions of Paragraph 10 hereof. Notwithstanding the
foregoing, Purchaser may assign its interest in this Agreement without the
consent of Seller to any "Affiliate of Purchaser" (hereinafter defined),
provided that Purchaser remains liable for and the assignee assumes the
obligations of Purchaser hereunder. "Affiliate of Purchaser" shall mean any
entity controlled by the shareholders of Purchaser and any entity which
includes a managing member or managing general partner controlled by the
shareholders of Purchaser. If any assignee of Purchaser under this Agreement
petitions or applies for relief in bankruptcy or assignee is adjudicated as a
bankrupt or insolvent, or assignee files any petition, application for relief
or answer-seeking or acquiescing in any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief for
itself under any present or future federal, state or other statute, law, code
or regulation relating to bankruptcy, insolvency, or other relief for debtors
(collectively, a "Bankruptcy Filing") on or before the Closing Date, said
Bankruptcy Filing shall be a default under this Agreement and Purchaser shall
indemnify Seller for all costs, attorney's fees and expenses of Seller
resulting from Seller's efforts to obtain the Earnest Money as liquidated
damages and to clear title to the Property from any encumbrance resulting from
the Bankruptcy Filing.
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 and Investment Group ("Insignia") and CB
Commercial Group ("CB") (Seller to pay a commission to Insignia and Insignia to
pay a cooperating commission to CB). Purchaser shall have no responsibility
for the payment of such commissions. Seller's commission to Insignia shall
only be payable out of the proceeds of the sale of the Property in the event
the transaction set forth herein closes. Purchaser and Seller shall indemnify,
defend and hold the other party hereto harmless from any claim whatsoever
(including without limitation, reasonable attorney's fees, court costs and
costs of appeal) from anyone claiming by or through the indemnifying party any
fee, commission or compensation on account of this Agreement, its negotiation
or the sale hereby contemplated other than to Insignia and CB (as a cooperating
broker). The indemnifying party shall undertake its obligations set forth in
this Paragraph 15 using attorneys selected by the indemnifying party and
reasonably acceptable to the indemnified party. The provisions of this
Paragraph 15 will survive the Closing and delivery of the Deed.
16. REPRESENTATIONS AND WARRANTIES.
16.1. Any reference herein to Seller's knowledge or notice of any
matter or thing shall only mean such knowledge or notice that has actually been
received by John Powell (senior vice-president of The Balcor Company, head of
asset management), James Mendelson (vice-president of Balcor Management
Services, asset management) and Mike Conter (asset manager for the Property)
(together referred to as the "Seller's Representative"), and any representation
or warranty of the Seller is based upon those matters of which the Seller's
Representative has actual knowledge. Any knowledge or notice given, had or
received by any of Seller's agents, servants or employees shall not be imputed
to Seller, the general partner or limited partners of Seller, the subpartners
<PAGE>
of the general partner or limited partners of Seller or Seller's
Representative.
16.2. Subject to the limitations set forth in Paragraph 16.1, Seller
hereby makes the following representations and warranties, which
representations and warranties are made to Seller's knowledge and which shall,
subject to Paragraph 16.4, be remade at Closing: (i) Seller has no knowledge
of any pending or threatened litigation, claim, cause of action or
administrative proceeding concerning the Property; (ii) Seller has the power to
execute and deliver this Agreement and consummate the transactions contemplated
herein; (iii) except as may be set forth in the Existing Report, Seller has not
received any notice from any governmental authority having jurisdiction over
the Property of (a) any uncured violation of any Environmental Law with respect
to the Property or (b) any material violations of any other laws, ordinances,
rules or regulations with respect to the Property; (iv) Seller has not received
any presently effective or presently applicable notice on condemnation or
exercise of eminent domain from any governmental or other agency; (v) the
person executing this agreement on behalf of Seller is duly authorized to do so
and thereby bind Seller thereto; (vi) Seller has taken all action necessary to
authorize the execution, delivery and performance of this Agreement; (vii) the
execution, delivery and performance of this Agreement by Seller does not and
will not result in any violation of, or be in conflict with or constitute
default under, any agreement, mortgage, deed of trust, indenture, credit
extension agreement, license, security agreement or other instrument to which
they are a party, or any judgment, decree, order, statute, rule or governmental
regulation; (viii) the Property is free and clear of, and Seller has received
no notice that the Property is subject to, any laborer, mechanic's or
materialman's liens (either perfected or unperfected) or any claim, agreement,
lien, mortgage, deed of trust, indenture, security agreement, encumbrance,
easement, reservation, restriction, judgment or decree which is not or will not
be set forth in the Title Commitment or an updated Title Commitment or which is
not caused or created by Purchaser or Purchaser's agents; and (ix) there are no
other contracts or agreements, oral or written, relating to the sale, exchange
or transfer of the Property or any part thereof, or any unrecorded contracts,
agreements, leases and/or tenancies of any kind affecting all or any portion of
the Property, except for that certain month-to-month lease with Carnival Club
of Glendale, Inc. which Seller has terminated effective January 5, 1997.
16.3. Purchaser hereby represents and warrants to Seller that
Purchaser has the full right, power and authority to execute and deliver this
Agreement and consummate the transactions contemplated herein.
16.4. If at any time after the execution of this Agreement,
either Purchaser or Seller become aware of information which makes a
representation and warranty contained in this Agreement to become untrue in any
material respect, said party shall promptly disclose said information to the
other party hereto. Provided the party making the representation or warranty
did not take any deliberate actions to cause the representation or warranty in
question to become untrue in any material respect, said party shall not be in
default under this Agreement and the sole remedy of the other party shall be to
terminate this Agreement. 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.
<PAGE>
16.5. The parties agree that the representations contained herein
shall survive Closing for a period of six (6) months (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 six (6) months immediately
following Closing).
17. LIMITATION OF LIABILITY. Neither any partner of Seller, nor any
Affiliate of Seller, nor any of their respective beneficiaries, shareholders,
partners, officers, directors, 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. Seller further agrees not to distribute
$500,000.00 of the proceeds of the Purchase Price to its partners for the
longer of (i) six (6) months after the Closing and (ii) final resolution of any
claims by Purchaser and asserted in writing against Seller prior to the
expiration of the six (6) months after the Closing in accordance with the terms
of this Agreement ("Claims"); provided, however, that if any Claims are
disputed by Seller, Seller shall have the right, by written notice to
Purchaser, to require Purchaser to file suit in a court of competent
jurisdiction within thirty (30) days after such notice to Purchaser, otherwise
said notice with respect to the Claim in question shall no longer prevent
Seller from distributing the proceeds.
18. TIME OF ESSENCE. Time is of the essence of this Agreement.
19. NOTICES. Any notice or demand which either party hereto is required
or may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by overnight courier
such as Federal Express, by facsimile transmission or made by United States
registered or certified mail addressed as follows:
TO SELLER: c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attention: Ilona Adams
with copies to: The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attention: James Mendelson
(847) 317-4367
(847) 317-4462 (FAX)
<PAGE>
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: Vestar Development Co.
2425 East Camelback Road
Suite 750
Phoenix, Arizona 85016
Attention: Richard Kuhle
(602) 866-0900
(602) 955-2298 (FAX)
and one copy to: Vestar Development Co.
2425 East Camelback Road
Suite 750
Phoenix, Arizona 85016
Attention: Allan Kasen
(602) 866-0900
(602) 955-2298 (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 day personally delivered if received by
5:00 p.m. Chicago time, on the next business day if sent by overnight courier,
or the same day as given if sent by facsimile transmission and received by 5:00
p.m. Chicago time or on the 4th business day after the same is deposited in the
United States Mail as registered or certified matter, addressed as above
provided, with postage thereon fully prepaid. Any such notice, demand or
document not given, delivered or made by personal delivery, registered or
certified mail, by overnight courier or by facsimile transmission as aforesaid
shall be deemed to be given, delivered or made upon receipt of the same by the
party to whom the same is to be given, delivered or made. Copies of all
notices shall be served upon the Escrow Agent.
20. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute
two (2) copies of this Agreement and three (3) copies of the Escrow Agreement
and forward them to Seller for execution, accompanied with the Earnest Money
payable to the Escrow Agent set forth in the Escrow Agreement. Seller will
forward one (1) copy of the executed Agreement to Purchaser and will forward
the following to the Escrow Agent:
(A) Earnest Money;
(B) One (1) fully executed copy of this Agreement; and
(C) Three (3) copies of the Escrow Agreement signed by the parties
with a direction to execute two (2) copies of the Escrow Agreement and deliver
a fully executed copy to each of the Purchaser and the Seller.
21. GOVERNING LAW. The provisions of this Agreement shall be governed by
the laws of the California.
<PAGE>
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. SUCCESSORS AND ASSIGNS. Subject to the terms of Paragraph 14 herein,
the terms of this Agreement shall inure to the benefit of and bind Purchaser's
and Seller's successors and assigns.
26. FURTHER ASSURANCE. Each of Seller and Purchaser will execute,
acknowledge and deliver such instruments and take such other actions as the
other party may reasonably require in order to carry out the intent of this
Agreement. Nothing contained herein, however, shall require any of the parties
hereto to make any material representations, warranties, or covenants to the
other party(ies) or to incur any material financial obligation except as
specifically set forth in this Agreement or as clearly contemplated by this
Agreement.
27. TAX REPORTING. For purposes of complying with Section 6045 of the
IRC, as amended by Section 1521 of the IRC, Title Insurer shall be deemed the
"person responsible for closing the transaction," and shall be responsible for
obtaining the information necessary to file with the Internal Revenue Service
Form 1099-B, "Statement for Recipients of Proceeds From Estate, Broker and
Barter Exchange Transactions."
28. TIME PERIODS. Unless otherwise expressly provided herein, all
periods for delivery or review and the like shall be determined on a
"calendar"-day basis. If any date for performance, approval, delivery or
Closing falls on a Saturday, Sunday or legal holiday (state or federal) in the
State of California, the time therefor shall be extended to the next business
day.
29. SERVICE CONTRACTS. The parties acknowledge the existence of those
service contracts affecting the Property as set forth on Exhibit H (the
"Service Contracts"). Prior to the expiration of the Investigation Period,
Purchaser shall notify Seller which of the Service Contracts Purchaser desires
to assume at Closing (the "Retained Service Contracts") and Seller shall
terminate all other Service Contracts as of the Closing.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date first set forth above.
PURCHASER:
VESTAR DEVELOPMENT CO., an Arizona corporation
By: /s/ Rick Kuhle
-----------------------------------
Name: Rick Kuhle
-----------------------------------
Its: Sr. Vice President
-----------------------------------
SELLER:
GLENDALE FASHION CENTER LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Glendale Fashion Center Partners, Inc.,
an Illinois corporation, its general partner
By: /s/ James E. Mendelson
------------------------------------
Name: James E. Mendelson
------------------------------------
Its: Authorized Representative
------------------------------------
<PAGE>
[Glendale Fashion Center]
_________________ of Insignia Mortgage & Investment Company ("Seller's Broker")
executed this Agreement in its capacity as a real estate broker and
acknowledges that the fee or commission due it from Seller as a result of the
transaction described in this Agreement is as set forth in that certain Listing
Agreement dated _________________, 199_ between Seller and Seller's Broker (the
"Listing Agreement"). Seller's Broker also acknowledges that payment of the
aforesaid fee or commission is conditioned upon the Closing and the receipt of
the Purchase Price by the Seller. Seller's Broker agrees to deliver a receipt
to the Seller at the Closing for the fee or commission due Seller's Broker and
a release, in the appropriate form, stating that no other fees or commissions
are due to it from Seller or Purchaser.
Insignia Mortgage & Investment Company
By:
----------------------------------
<PAGE>
_____________________ of CB Commercial Group ("Cooperating Broker") executed
this Agreement in its capacity as a cooperating real estate broker and
acknowledges that the fee or commission due it from Insignia Mortgage &
Investment Company as a result of the transaction described in this Agreement
is as set forth in that certain Cooperating Agreement between Insignia Mortgage
& Investment Company and CB Commercial Group (the "Cooperating Agreement").
Cooperating 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. Cooperating Broker agrees to deliver a receipt to the
Seller at the Closing for the fee or commission due Cooperating Broker from
Insignia Mortgage & Investment Company and a release, in the appropriate form,
stating that no other fees or commissions are due to it from Seller, Purchaser
or Insignia Mortgage & Investment Company.
CB Commercial Group
By:
-----------------------------------
<PAGE>
Exhibits
A - Legal
B - Personal Property
C - Escrow Agreement
D - Title Commitment
E - Deed
F - Bill of Sale
G - Assignment and Assumption of Intangible Property
H - Service Contracts
I - Non-Foreign Affidavit
J - Proposed Ground Lease
<PAGE>
[The Palm View Apartments]
AGREEMENT OF SALE
THIS AGREEMENT ("Agreement") is entered into as of the 17th day of
September, 1996, by and between HOUSING SYSTEMS, INCORPORATED, a Georgia
corporation ("Purchaser"), and TIMBERLAKE 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 Six Million Five Hundred Thousand and No/100 Dollars
($6,500,000.00), the following:
a. those certain tracts or parcels of land located in Pinellas
County, Florida, more particularly described on Exhibit A attached hereto
("Land");
b. the 304 unit apartment complex, commonly known as The Palm View
Apartments, which contains related improvements, facilities, amenities,
structures, driveways, walkways, plumbing and heating pipes, culverts, and
mains ("Improvements");
c. all right, title and interest of Seller in and to any alleys,
strips or gores adjoining the Land, and any easements, rights-of-way or other
interests in, on, under or to, any land, highway, street, road, right-of-way or
avenue, open or proposed, in, on, under, across, in front of, abutting or
adjoining the Land, and all right, title and interest of Seller in and to any
awards for damage thereto by reason of a change of grade thereof;
d. the accessions, appurtenant rights, privileges, appurtenances
and all the estate and rights of Seller in and to the Land and the
Improvements, as applicable, or otherwise appertaining to any of the property
described in the immediately preceding clauses (a), (b) and (c);
e. the fixtures, equipment and other personal property listed on
Exhibit B attached hereto and all other fixtures, machinery, supplies,
equipment, computer hardware and, except for computer software, the other
personal property owned by Seller and located on or in or used solely in
connection with the Land and Improvements (collectively, the "Personal
Property"); and
f. all of Seller's interest in any intangible property now or
hereafter owned by Seller and used solely in connection with its Land,
Improvements and Personal Property, including without limitation the right to
use any trade style or name now used in connection with the same, any contract
rights, escrow or security deposits, utility agreements or other rights related
to the ownership of or use and operation of the Property, as hereinafter
defined.
All of the items described in subparagraphs (a), (b), (c), (d), (e) and
(f) above are referred to as the "Property".
<PAGE>
2. PURCHASE PRICE. The purchase price ("Purchase Price") shall be paid
as follows:
a. Upon the execution of this Agreement, Fifty Thousand and No/100
Dollars ($50,000.00) ("Earnest Money") to be held in escrow by the Escrow Agent
(as that term is defined in the "Escrow Agreement" [as hereinafter defined]) by
and in accordance with the provisions of the Escrow Agreement ("Escrow
Agreement") attached hereto as Exhibit C;
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 delivered to the "Title Insurer" (as
hereinafter defined) no later than 12:00 Noon Central time on the Closing Date
(as hereinafter defined). If the funds are not received by 12:00 Noon Central
time, then, on the Closing Date, Purchaser shall pay Seller an amount equal to
any additional mortgage per diem interest costs incurred by Seller.
c. The parties agree the Purchase Price shall be allocated among
the various components of the Property in a manner to be reasonably agreed upon
by the parties prior to September 23, 1996.
3. TITLE COMMITMENT AND SURVEY.
a. Purchaser has received a survey of the Property prepared by C.
Field Deuel & Associates, Inc. dated March 31, 1993 (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 21 days after the date hereof.
b. Attached hereto as Exhibit D is a copy of a title commitment for
an owner's standard title insurance policy issued by Charter Title Company Fort
Bend, on behalf of Lawyers Title Insurance Company (hereinafter referred to as
"Title Insurer") dated June 17, 1996 for the Property (the "Title Commitment").
c. If the Title Commitment or the Existing Survey discloses any
exceptions to title objectionable to Purchaser, Purchaser may give written
notice to Seller (the "Title Notice") of Purchaser's disapproval of any such
exceptions (an "Unpermitted Exception") on or before September 18, 1996. Any
title exceptions which are set forth in the Title Commitment or on the Existing
Survey to which Purchaser does not object in accordance with the immediately
preceding sentence shall be deemed "Permitted Exceptions". With regard to an
Unpermitted Exception for which Purchaser gives Seller a Title Notice, Seller
may but shall not have the obligation to notify Purchaser (the "Response
Notice") within three (3) business days of receipt of the Title Notice whether
Seller shall bond over, cure or cause the Title Insurer to remove such
Unpermitted Exception from the Title Commitment. Any such Unpermitted
Exception which Seller elects to bond over, cure or cause the Title Insurer to
remove shall be additional Permitted Exceptions. If Seller does not so notify
Purchaser, with respect to any Unpermitted Exception, Purchaser may either
waive its objection and proceed towards closing or terminate this Agreement by
giving written notice to Seller of its election within three (3) additional
business days of the earlier to occur of (a) receipt by Purchaser of the
Response Notice and (b) expiration of the three (3) business day period in
which Seller may deliver the Response Notice. If Purchaser does not give such
written notice within such three (3) additional business days, (i) Purchaser
<PAGE>
shall have waived its right to terminate this Agreement pursuant to this
Paragraph 3c; (ii) such Unpermitted Exception shall be deemed an additional
Permitted Exception; and (iii) the parties shall proceed to Closing. If
Purchaser terminates this Agreement by written notice to Seller within such
three (3) additional business days: (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 17.
d. The Title Commitment and the Existing 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, "Purchaser's Title Insurer" (as hereinafter defined) shall deliver to
Purchaser a ALTA 1992 Form Title Policy in conformance with the "Purchaser's
Title Commitment" (as hereinafter defined), subject to only the Permitted
Exceptions and Unpermitted Exceptions waived by Purchaser (the "Title Policy").
Seller and Purchaser shall equally share the costs of the Title Commitment, the
Purchaser's Title Commitment and the Title Policy and the cost of deletion of
the survey exception, if required by Purchaser. Purchaser shall pay the cost
of any endorsements to, and the extended coverage on, the Title Policy.
e. The obligation of Purchaser to pay various costs set forth in
Paragraphs 3a and 3d shall survive the termination of this Agreement.
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 and Unpermitted Exceptions waived by
Purchaser. If, prior to "Closing" (as hereinafter defined), the title
commitment ("Purchaser's Title Commitment") ordered by Purchaser from First
American Title Insurance Company ("Purchaser's Title Insurer"), a date-down to
the Title Commitment or the Updated Survey discloses any new Unpermitted
Exception, Seller shall have thirty (30) days from the date of Seller's receipt
of the Purchaser's Title Commitment, the date of the date-down to the Title
Commitment or the date of the Updated Survey, as applicable, at Seller's
expense, to (i) bond over, cure and/or have any Unpermitted Exceptions which,
in the aggregate, do not exceed $25,000.00, removed from the Purchaser's Title
Commitment or to have the Purchaser's Title Insurer commit to insure against
loss or damage that may be occasioned by such Unpermitted Exceptions, or (ii)
have the right, but not the obligation, to bond over, cure and/or have any
Unpermitted Exceptions which, in the aggregate, equal or exceed $25,000.00,
removed from the Purchaser's Title Commitment or to have the Purchaser's Title
Insurer commit to insure against loss or damage that may be occasioned by such
Unpermitted Exceptions. In such event, the time of Closing (as hereinafter
defined) 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 Purchaser's 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 immediately preceding sentence, Purchaser may
terminate this Agreement upon notice to Seller within five (5) business days
after the expiration of said thirty (30) day period. Absent notice from
Purchaser to Seller in accordance with the immediately preceding sentence,
<PAGE>
Purchaser shall be deemed to have elected to take title subject to said
Unpermitted Exception. If Purchaser terminates this Agreement in accordance
with the terms of this Paragraph 4, 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 17.
5. PAYMENT OF CLOSING COSTS. Purchaser and Seller shall equally share
the costs of the documentary stamps (if any) to be paid 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.
6. DAMAGE, CASUALTY AND CONDEMNATION.
a. Until the Closing Date, Seller shall maintain its present
insurance on the Property. 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 repair such damage in an expeditious manner
and the Closing shall be extended until the repairs are complete to Purchaser's
reasonable satisfaction. Seller shall retain all insurance proceeds. If the
cost of repair and restoration exceeds those amounts, then Purchaser can elect
to either: (a) proceed with the purchase of the Property and in such event,
unless Seller shall have restored the Property prior to the Closing Date,
Seller shall pay over or assign to Purchaser all amounts received or due (and
Purchaser shall receive a credit against the cash due at Closing in an amount
equal to any deductible under any insurance policy covering the damaged
Property) from, and all claims against, any insurance company as a result of
such damage; or (b) terminate this Agreement upon notice to Seller served
within twenty (20) business days of such casualty.
b. If condemnation proceedings ("Proceedings") have been instituted
against the Property which might result in the taking of any part of the
Property which shall (i) materially impair access to the Property; (ii) cause
any material non-compliance with any applicable law, ordinance, rule or
regulation of any federal, state or local authority or governmental agencies
having jurisdiction over the Property or any portion thereof; or (iii)
materially and adversely impair the use of the Property as it is currently
being operated, 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 Seller within ten (10) days after Purchaser has received
notice of the Proceedings.
c. If this Agreement is terminated pursuant to this Paragraph, then
all Earnest Money plus the interest accrued thereon shall be returned to
Purchaser and, subject to the survival provisions of Paragraph 17 herein,
neither party shall have any further liability hereunder.
<PAGE>
7. AS-IS CONDITION.
a. 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 loss by fire or other
casualty or condemnation and, subject to the provisions of Paragraph 6 above,
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 their consultants nor
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 Improvements, the presence or
absence of asbestos, toxic waste or any Hazardous Materials (as hereinafter
defined) or Hazardous Substances (as hereinafter defined), 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 contribution,
cost recovery or otherwise, against Seller, relating directly or indirectly to
the existence of asbestos or Hazardous Materials or Hazardous Substances on, or
environmental conditions of, the Property. As used herein, the term "Hazardous
Materials" or "Hazardous 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 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 fuel and (E) asbestos.
b. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller has owned the Property. Seller and Purchaser hereby
<PAGE>
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.
c. Seller has provided to Purchaser the following existing report:
Phase I Environmental Site Assessment, dated April 30, 1993 prepared by H+GCL,
Inc. ("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, including, without limitation,
the matters set forth in the Existing Report, and the accuracy and/or
completeness of the Existing Report. Furthermore, Purchaser acknowledges that
it will be purchasing the Property with all faults disclosed in the Existing
Report. Notwithstanding anything contained herein to the contrary, the terms
of this Paragraph 7.c. shall survive the Closing and the delivery of the Deed
and termination of this Agreement.
8. FINANCING CONTINGENCY. Purchaser's and Seller's obligations under
this Agreement are contingent upon Purchaser's ability to procure a commitment
for first mortgage financing for the acquisition of the Property in an amount
of not less than $4,875,000.00 with a 9.5% per annum constant interest rate and
20 year amortization (the "Financing Contingency") on or before September 23,
1996. Purchaser acknowledges and agrees that it shall submit its application
for a commitment for first mortgage financing in accordance with the provisions
set forth above within ten (10) business days from the date hereof, and shall
provide Seller with either a letter from the lender evidencing that said
application has been received or an affidavit from Purchaser stating that
Purchaser submitted said application and paid any application fee within ten
(10) business days from the date hereof. In the event Purchaser has complied
with the requirements set forth in the preceding sentence, but is unable to
satisfy the Financing Contingency on or before September 23, 1996, then
Purchaser shall have the option, upon written notice to Seller, exercised no
later than September 23, 1996, to terminate this Agreement, in which case 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 delivered to Purchaser, and neither
party shall have any further liability to the other, except for those covenants
and obligations hereunder which expressly survive the termination of this
Agreement. In the event Purchaser fails to deliver such notice to Seller, the
Financing Contingency shall be deemed satisfied and the parties hereto shall
proceed to Closing.
9. CLOSING. The closing of this transaction ("Closing") shall be on
October 31, 1996 ("Closing Date"), at the office of Purchaser's counsel,
Atlanta, Georgia, at which time Seller shall deliver possession of the Property
to Purchaser. In the event that all required funds and documents have been
delivered to Escrow Agent or exchanged by the parties, the parties agree that
<PAGE>
the Closing may be conducted by Escrow Agent without the parties or counsel
present.
10. CLOSING DOCUMENTS.
a. On the Closing Date, Purchaser shall deliver to Seller an
executed closing statement, the balance of the Purchase Price, an assumption of
the Assignment and Assumption of Intangibles (as hereinafter defined), an
assumption of the Assignment and Assumption of Leases (as hereinafter defined),
and such other documents as may be reasonably required in order to consummate
the transaction as set forth in this Agreement.
b. On the Closing Date, Seller shall deliver, or cause to be
delivered, the following to Purchaser: possession of the Property; the executed
Deed (in the form of Exhibit F attached hereto) subject to the Permitted
Exceptions; the Title Policy (or "marked-up commitments"); terminations of any
management agreements affecting the Property; an inventory of the Personal
Property for the Property and a Bill of Sale for the same (in the form of
Exhibit G attached hereto); executed closing statements; executed assignment
and assumption of all service contracts, warranties and intangibles (in the
form of Exhibit H attached hereto, the "Assignment and Assumption of
Intangibles"); executed copies of all warranties, guarantees, maintenance,
supply, repair and service contracts, which affect the Property and which are
in Seller's possession or at the Property, to be delivered at the Property;
executed assignment and assumption of all leases and security deposits (in the
form of Exhibit I attached hereto, the "Assignment and Assumption of Leases");
the original executed leases which shall be delivered at the Property; updated
Rent Roll (as hereinafter defined); notice to the tenants of the Property 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 J attached hereto); non-foreign affidavit (in the form
of Exhibit K attached hereto); bringdown certificate re: representations and
warranties (in the form of Exhibit L attached hereto); certificates of
occupancy for each apartment unit (or building, as applicable) that are in
Seller's possession or at the Property, if any; plans and specifications, if
any, in Seller's possession; and such other documents as may be reasonably
required by the Purchaser's Title Insurer in order to consummate the
transaction as set forth in this Agreement.
11. 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 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.
12. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF ANY
SELLER'S DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF ALL EARNEST
MONEY TOGETHER WITH ANY INTEREST ACCRUED THEREON, AND, SUBJECT TO THE SURVIVAL
PROVISIONS OF PARAGRAPH 17 HEREIN, THIS AGREEMENT SHALL TERMINATE AND THE
PARTIES SHALL HAVE NO FURTHER LIABILITY TO EACH OTHER AT LAW OR IN EQUITY.
<PAGE>
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF A SELLER'S
DEFAULT IS DUE TO ITS REFUSAL TO DELIVER THE DEED, THEN PURCHASER WILL BE
ENTITLED TO SUE FOR SPECIFIC PERFORMANCE.
13. a. PRORATIONS. Rent (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 for the month in which the
Closing occurs and for future months; real and personal property taxes; and
other similar items shall be adjusted ratably as of 11:59 p.m. on the Closing
Date ("Proration Date"), and credited to the balance of the cash due at
Closing. 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 a 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 13b below.
b. DELINQUENT RENTS. If, as of the Closing Date, any rent is in
arrears for thirty (30) days or less, then the first rent collected for the
Property by Purchaser shall be applied to the month in which Closing occurred
and disbursed pro-rata to Purchaser and Seller. If rent is in arrears for a
Property for more than thirty (30) days, then rents collected for the Property
by Purchaser shall be applied first to current rent and then to delinquent
rent. Any amounts received by one party and payable to the other party
pursuant hereto shall be paid 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.
14. 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 11.
15. ASSIGNMENT. Purchaser shall not have the right to assign its
interest in this Agreement without the prior written consent of 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.
Notwithstanding the foregoing, Purchaser may assign its interest in this
Agreement without the consent of Seller to any entity in which Purchaser is a
partner or shareholder provided that Purchaser remains liable for and the
assignee assumes the obligations of Purchaser hereunder. If any assignee of
Purchaser ("Assignee") under this Agreement petitions or applies for relief in
bankruptcy or Assignee is adjudicated as a bankrupt or insolvent, or Assignee
files any petition, application for relief or answer-seeking or acquiescing in
any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief for itself under any present or future federal,
state or other statute, law, code or regulation relating to bankruptcy,
insolvency, or other relief for debtors (collectively, a "Bankruptcy Filing")
on or before the Closing Date, said Bankruptcy Filing shall be a default under
this Agreement and Purchaser shall indemnify Seller for all costs, attorney's
fees and expenses of Seller resulting from Seller's efforts to obtain the
<PAGE>
Earnest Money as liquidated damages and to clear title to the Property from any
encumbrance resulting from the Bankruptcy Filing.
16. BROKER. The parties hereto acknowledge that Cushman and Wakefield
(the "Broker") is the only real estate broker involved in this transaction.
Seller agrees to pay the Broker a commission or fee ("Fee") pursuant to a
listing agreement between Seller and Broker. In all events, Purchaser shall
have no obligation to pay any portion of the Fee. However, this Fee is due and
payable only from the proceeds of the Purchase Price received by Seller. The
foregoing does not apply to any fee which may be paid by Seller to any
affiliate of Seller as a result of this transaction. Purchaser agrees to
indemnify, defend and hold harmless Seller and any partner, affiliate, parent
of Seller, and all shareholders, employees, officers and directors of Seller or
Seller's partners, parents or affiliates (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. Purchaser does now
and shall at all times consent to a Seller Indemnitee's selection of defense
counsel. Each Seller agrees to indemnify, defend and hold harmless 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 Indemnitee") from all claims, including attorneys' fees and
costs incurred by a Purchaser Indemnitee as a result of anyone's claiming by or
through a Seller any fee, commission or compensation on account of this
Agreement its negotiation or the sale hereby contemplated. Seller does now and
shall at all times consent to a Purchaser Indemnitee's selection of defense
counsel. The provisions of this Paragraph will survive the Closing and
delivery of the Deed.
17. DOCUMENTS AND INSPECTION OF PROPERTY
a. Seller has delivered to Purchaser copies of the most recent
available tax bills, rent rolls, insurance premiums, service contracts, utility
account numbers, year-end 1995 and year-to-date 1996 operating statements
(collectively the "Documents"). Purchaser has had the right to inspect and
approve the condition of the Property and conduct such tests and studies as
Purchaser deemed appropriate and to evaluate the physical condition of the
Property and to conduct such evaluation as it deemed appropriate to determine
whether its operation and purchase would be economically feasible including the
interior of the apartments, during normal business hours. Purchaser
acknowledges that it has completed its inspection of the Property and has
approved the condition of the Property. Purchaser shall maintain public
liability insurance policies insuring against claims arising as a result of the
inspections of the Property conducted by Purchaser. Purchaser agrees to
indemnify, defend, protect and hold Seller harmless from any and all loss,
costs, including attorneys' fees, liability or damages which Seller may incur
or suffer as a result of Purchaser's inspection and investigation of the
Property including the entry of Purchaser, its employees or agents and its
Lender onto the Property, including without limitation, liability for
mechanics' lien claims.
b. Purchaser agrees to defend and hold Seller harmless from any
injuries, damages or claims of any nature whatsoever which Purchaser's
servants, agents or employees may have as a result of Purchaser's inspection of
<PAGE>
the Property. Purchaser further agrees to restore any damage to the Property
which may arise or has arisen as a result of Purchaser's inspection of the
Property.
c. Purchaser's obligations to indemnify, defend and hold Seller
harmless under the provisions of this Paragraph 17 shall survive the
termination of this Agreement or the Closing and the delivery and recording of
the Deed.
18. SELLER'S OBLIGATIONS PRIOR TO CLOSING. Seller covenants that between
the date of this Agreement and the Closing Date:
a. Seller shall not, without Purchaser's prior written consent (i)
enter into any lease for an apartment unit with a first-time tenant unless the
lease is for a period of no more than one year and the rent shall be not less
than the amount currently being charged for similar apartment units; nor (ii)
enter into, amend, renew or extend any lease for an apartment unit with an
existing tenant unless the lease is for a period of not more than one year and
the rent for the amended, renewal or extension term shall not be less than the
rent currently paid by such tenant; nor (iii) terminate any lease except by
reason of a default by the tenant thereunder or by reason of the provisions
contained in the lease.
b. Seller shall not modify nor amend any Service Contract (as
hereinafter defined) nor enter into any new service contract for the Property
without the prior written consent of Purchaser, which consent shall not be
unreasonably withheld or delayed provided no such consent shall be necessary if
the same is terminable without penalty by the then owner of the Property upon
not more than thirty (30) days' notice.
c. No personal property included as part of the Property shall be
removed from the Property unless the same is replaced with similar items of at
least equal quality prior to the Closing excluding, however, computer software,
maintenance supplies and other items that may be depleted in the ordinary
course of Seller's business.
d. Seller shall not withdraw, settle or otherwise compromise any
protest or reduction proceeding affecting real estate taxes assessed against
the Property for any fiscal period in which the Closing is to occur or any
subsequent fiscal period without the prior written consent of Purchaser. Real
estate tax refunds and credits received after the Closing which are
attributable to the fiscal tax year during which the Closing occurs shall be
apportioned between Seller and Purchaser, after deducting the expenses of
collection thereof, based upon the relative time periods each owns the
Property, which obligation shall survive the Closing.
e. Seller shall allow Purchaser or Purchaser's representatives
access to the Property, the leases and other documents required to be delivered
under this Agreement upon reasonable prior notice, during Seller's regular
business hours, and provided same shall not unreasonably interfere with
Seller's ordinary course of business.
f. Whenever Purchaser's or Seller's consent is required, Purchaser
or Seller shall not unreasonably withhold its consent or unreasonably delay in
giving its consent. If Purchaser or Seller fails to respond to a written
<PAGE>
request within three (3) business days after receipt of the request, then
Purchaser or Seller, as the case may be, shall be deemed to have given its
consent.
19. 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 Mark Saturno. Any representation or
warranty of Seller is based upon those matters of which Mark Saturno has actual
knowledge after having made inquiry by delivering a copy of the representations
enumerated in this Section 19 to the resident manager of the Property. Any
knowledge or notice given, had or received by any of Seller's agents, servants
or employees shall not be imputed to Seller or the individual partners or the
general partner of Seller.
b. Subject to the limitations set forth in subparagraph a. above,
Seller hereby makes the following representations and warranties, all of which
are made to Seller's knowledge, which shall survive the Closing and delivery of
the Deed for a period of ninety (90) days (i.e., the claiming party shall have
no right to make any claims against the other party for a breach of
representation or warranty after the expiration of ninety (90) days immediately
following Closing):
i. The present use and occupancy of the Property conforms with
applicable building and zoning laws and Seller has not received any written
notice that any such laws, rules or regulations are being violated.
ii. The rent roll ("Rent Roll") attached hereto as Exhibit M
which will be updated as of the Closing Date is true and accurate as of the
date thereon.
iii. Seller has no knowledge of any pending or threatened
litigation, claim, cause of action or administrative proceeding concerning the
Property, except as disclosed on Exhibit N attached hereto.
iv. As of the date of the Agreement, there are no leases,
subleases, licenses or other rental agreements or occupancy agreements (written
or verbal) which grant any possessory interest in and to any space situated on
or in the Improvements or that otherwise give rights with regard to use of the
Improvements other than the leases ("Leases") described in the Rent Roll. The
Rent Roll is true, accurate and complete as of the date hereof. Except as
otherwise specifically set forth in the Rent Roll or elsewhere in this
Agreement or attached to the Leases:
(1) the Leases are in full force and effect and, except as
set forth on the Rent Roll or the lease files at the Property, none of them has
been modified, amended or extended;
(2) no tenant, or any other person, entity or association
has an option to purchase, right of first refusal, right of first offer or
other similar non-leasing right in respect of all or any unit in the Property;
(3) no leasing commission shall be due for any period
subsequent to the Closing Date other than for tenants who have executed a lease
<PAGE>
prior to Closing but do not move in until after the Closing Date, which
commissions shall be paid by Purchaser and shall be no more than a total of
$60.00 per lease for new leases and $150.00 per quarter for renewal leases for
all employees of the property manager;
(4) except as set forth on the Rent Roll, no tenant is
entitled to rental concessions or abatements for any period subsequent to the
Closing Date;
(5) Seller has neither sent written notice to any tenant
of the Property, nor received any written notice from any such tenant, claiming
that such tenant, or Seller, as the case may be, is in default, which default
remains uncured other than as shown on the Rent Roll attached hereto;
(6) no action or proceeding instituted against Seller by
any tenant of any unit in the Property is presently pending;
(7) there are no security deposits or other deposits other
than those set forth in the Rent Roll;
(8) no rent has been paid more than thirty (30) days in
advance under any lease of any unit in the Property other than as shown on the
Rent Roll;
v. The apartment units in the Improvements are not subject to, nor
does Seller receive the benefit of, any rent subsidies or rental assistance
programs. No apartment unit is subject to any rent control law, ordinance or
regulation.
vi. Exhibit O attached hereto lists all services, maintenance, and
supply contracts (collectively, "Service Contracts") affecting the
construction, use, ownership, maintenance and/or operation of the Property, and
the information set forth therein is accurate and complete.
vii. Seller has full power to execute, deliver and carry out the
terms and provisions of this Agreement and has taken all necessary action to
authorize the execution, delivery and performance of this Agreement, and this
Agreement constitutes the legal, valid and binding obligation of Seller,
enforceable in accordance with its terms. No order, permission, consent,
approval license, authorization, registration or validation of, or filing with,
or exemption by, any governmental agency, commission, board or public authority
is required to authorize, or is required in connection with, the execution,
delivery and performance of this Agreement by Seller or the taking by Seller of
any action contemplated by this Agreement.
viii. Seller has not received written notice:
(1) from any federal, state, county or municipal authority
alleging any fire, health, safety, building, pollution, environmental, zoning
or other violation of law in respect of the Property or any part hereof, which
has not been entirely corrected; or
(2) concerning any special taxes or assessments levied or to be
levied against the Property or any part thereof; or
<PAGE>
(3) from any insurance company or bonding company of any
defects or inadequacies in the Property or any part thereof, which would
adversely affect the insurability of the same or cause the imposition of
extraordinary premiums or charges therefor or of any termination or threatened
termination of any policy of insurance or bond; or
(4) concerning any change in the zoning classification of the
Property or any part thereof.
If any such notice is received prior to the Closing, Seller shall promptly
notify Purchaser thereof and comply with any requirements of such notice prior
to the Closing.
ix. No assessments for public improvements have been made against
the Property which are unpaid, including, without limitation, those of
construction of sewer and water lines, streets, sidewalks and curbs.
x. Seller has not entered into any management contracts, employment
contracts or labor union contracts and has not established any retirement,
pension or profit sharing plans relating to the operation or maintenance of the
Property which shall survive the Closing or for which Purchaser shall have any
liability or obligation.
xi. Seller has not received notice of any proposed plans to widen,
modify, or realign any street or highway or any existing or proposed eminent
domain proceedings which would affect the Property.
xii. There are no pending insolvency proceedings of any nature
presently existing against Seller or the Property.
Seller hereby agrees to remake the aforesaid representations and
warranties at Closing. If at any time after the execution of this Agreement,
Seller becomes aware of information which makes a representation or warranty
contained in this Agreement to become untrue in any material respect, Seller
shall promptly disclose said information to Purchaser. Provided the
representation or warranty was true when made and further provided that Seller
did not take any deliberate actions to cause the representation or warranty in
question to become untrue in any material respect, Seller shall not be in
default under this Agreement and the sole remedy of Purchaser 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 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 had actual knowledge of prior to Closing. Notwithstanding anything
contained herein to the contrary, Purchaser hereby agrees that the maximum
aggregate liability of Seller, in connection with, arising out of or in any way
related to a breach by Seller under this Agreement or any document or
conveyance agreement in connection with the transaction set forth herein after
the Closing shall be $50,000.00. Purchaser hereby waives for itself and anyone
<PAGE>
who may claim by, through or under Purchaser any and all rights to sue or
recover from Seller any amount greater than said limit.
20. PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser hereby
represents and warrants to Seller that Purchaser has the full right, power and
authority to execute this Agreement and consummate the transactions
contemplated herein.
21. LIMITATION OF LIABILITY. No general or limited partner of Seller or
of Purchaser, nor any of their 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 and Seller hereby waive for themselves and anyone who may claim by,
through or under Purchaser or Seller, as the case may be, any and all rights to
sue or recover on account of any such alleged personal liability.
22. ORGANIZATIONAL DOCUMENTS. At least ten (10) days prior to the
Closing Date, the parties will provide the other party's attorney with evidence
of authority to consummate the transactions contemplated hereunder including
copies of its organizational documents, including a certified copy of its
recorded certificate of limited partnership and a true copy of its Partnership
Agreement or a certified copy of its Articles of Incorporation, corporate
resolutions authorizing the transaction, and an incumbency certificate,
whichever is applicable.
23. MISCELLANEOUS.
a. Seller agrees not to distribute $50,000.00 of the proceeds of
the Purchase Price to its partners for the longer of (i) ninety (90) days after
the Closing and (ii) final resolution of any claims by Purchaser asserted in
writing against Seller prior to the expiration of the ninety (90) days after
the Closing in accordance with the terms of this Agreement ("Claims");
provided, however, that if any Claims are disputed by Seller, Seller shall have
the right, by written notice to Purchaser, to require Purchaser to file suit in
a court of competent jurisdiction within thirty (30) days after such notice to
Purchaser; otherwise said notice with respect to the Claim in question shall no
longer prevent Seller from distributing the proceeds.
b. On the Closing Date, all apartments that were vacated greater
than fifteen (15) days prior to Closing shall be in a "Rent Ready Condition".
Purchaser shall receive a credit against the cash due at Closing in the amount
of $250.00 for each apartment which has been vacant for greater than fifteen
(15) days and which is not in a Rent Ready Condition.
24. TIME OF ESSENCE. Time is of the essence of this Agreement.
25. 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:
<PAGE>
TO SELLER: c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attn: Ilona Adams
with copies to: The Balcor Company
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attn: Mark Saturno
847/317-4397
847/317-4462 (FAX)
and
Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, Illinois 60661-3693
Attn: Daniel J. Perlman, Esq.
312/902-5532
312/902-1061 (FAX)
TO PURCHASER: Housing Systems, Incorporated
5505 Interstate North Parkway, N.W.
Atlanta, Georgia 30328-4603
Attn: Russell A. Greer
770/952-2233
770/956-9057 (FAX)
with a copy to: Powell, Goldstein, Frazer & Murphy
The Lenox Building
3399 Peachtree Road, N.E.
Suite 2000
Atlanta, Georgia 30326
Attn: Kenneth H. Harrigan, Esq.
404/365-0456
404/365-0629
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
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>
26. 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 Purchaser and Seller.
27. GOVERNING LAW. The provisions of this Agreement shall be governed by
the laws of the State of Florida.
28. 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.
29. 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.
30. 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.
31. RADON GAS. 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 FLORIDA.
ADDITIONAL INFORMATION REGARDING RADON AND RADON TESTING MAY BE OBTAINED FROM
YOUR COUNTY PUBLIC HEALTH UNIT. THIS PARAGRAPH IS PROVIDED FOR INFORMATIONAL
PURPOSES PURSUANT TO SECTION 404.056(8), FLORIDA STATUTES, (1988).
<PAGE>
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date set forth above.
PURCHASER:
HOUSING SYSTEMS, INCORPORATED
By: /s/ Russell A. Greer
--------------------------------
Name: Russell A. Greer
--------------------------------
Title: EVP
--------------------------------
SELLER:
TIMBERLAKE LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Timberlake Partners, Inc.,
an Illinois corporation, its general partner
By: /s/ James E. Mendelson
---------------------------------
Name: James E. Mendelson
---------------------------------
Title: Authorized Representative
---------------------------------
<PAGE>
EXHIBITS
Exhibit A - Legal Description
Exhibit B - Personal Property
Exhibit C - Escrow Agreement
Exhibit D - Title Commitment
Exhibit E - Intentionally Omitted
Exhibit F - Deed
Exhibit G - Bill of Sale
Exhibit H - Assignment and Assumption of Service Contracts,
Warranties and Intangibles
Exhibit I - Assignment and Assumption of Leases and Security Deposits
Exhibit J - Notice to Tenants
Exhibit K - FIRPTA Affidavit
Exhibit L - Bringdown Certificate
Exhibit M - Rent Roll
Exhibit N - Litigation
Exhibit O - Service Contracts
<PAGE>
FIRST AMENDMENT TO AGREEMENT OF SALE
THIS FIRST AMENDMENT TO AGREEMENT OF SALE (this "Amendment") is made and
entered into as of this 23rd day of September, 1996, by and between Timberlake
Limited Partnership, an Illinois limited partnership ("Seller") and Housing
Systems, Incorporated, a Georgia corporation ("Purchaser").
RECITALS:
A. Seller and Purchaser are parties to that certain Agreement of Sale,
dated September 17, 1996 ("Agreement"), pursuant to which Purchaser has agreed
to purchase and Seller has agreed to sell certain Property (as defined in the
Agreement) legally described and depicted on Exhibit A attached to the
Agreement.
B. Seller and Purchaser desire to amend the Agreement in accordance with
the terms of this Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. All terms not otherwise defined herein shall have the meanings ascribed to
each in the Agreement.
2. Paragraph 8 of the Agreement is hereby deleted in its entirety and the
following inserted in lieu thereof:
"8. FINANCING CONTINGENCY. Purchaser's and Seller's obligations
under this Agreement are contingent upon Purchaser's ability to procure a
commitment for first mortgage financing for the acquisition of the Property in
an amount of not less than $4,875,000.00 with a 9.5% per annum constant
interest rate and 20 year amortization (the "Financing Contingency") on or
before October 21, 1996. Purchaser acknowledges and agrees that it shall
submit its application for a commitment for first mortgage financing in
accordance with the provisions set forth above on or before October 7, 1996,
and shall provide Seller with either a letter from the lender evidencing that
said application and any application fee has been received or an affidavit from
Purchaser stating that Purchaser submitted said application and paid any
application fee on or before October 7, 1996 ("Application Evidence"). In the
event Purchaser has complied with the requirements set forth in the preceding
sentence, but is unable to satisfy the Financing Contingency on or before
October 21, 1996, then Purchaser shall have the option, upon written notice to
Seller, exercised no later than October 21, 1996, to terminate this Agreement,
in which case 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 delivered to
Purchaser, and neither party shall have any further liability to the other,
except for those covenants and obligations hereunder which expressly survive
the termination of this Agreement. In the event Purchaser fails to deliver
such notice to Seller or Purchaser fails to deliver the Application Evidence on
<PAGE>
or before October 7, 1996, the Financing Contingency shall be deemed satisfied
and the parties hereto shall proceed to Closing."
3. Except as amended hereby, the Agreement shall be and remain unchanged and
in full force and effect in accordance with its terms.
4. This Amendment may be executed in counterparts each of which shall be
deemed an original, but all of which, when taken together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first set forth above.
PURCHASER:
HOUSING SYSTEMS, INCORPORATED, a Georgia corporation
By: /s/ Russell A. Greer
---------------------------------------
Name: Russell A. Greer
---------------------------------------
Its: Executive VP
---------------------------------------
SELLER:
TIMBERLAKE LIMITED PARTNERSHIP, an Illinois
limited partnership
By: Timberlake Partners, Inc., an Illinois
corporation, its general partner
By: /s/ James E. Mendelson
-----------------------------------
Name: James E. Mendelson
-----------------------------------
Its: Authorized Representative
-----------------------------------
<PAGE>
October 7, 1996
Sent Via Facsimile
- ----------------------
Mr. Mark A. Saturno
Balcor Management Services, Inc.
2355 Waukegan Road, Suite A200
Bannockburn, IL 60015
RE: Purchase Contracts Regarding:
Glades Apartments
Granada Apartments
Hollowbrook Apartments
Palm View Apartments
Plantation Apartments
Dear Mark:
This letter shall confirm our conversation of today whereby Housing
Systems acknowledged that they will be executing financing applications on the
above referenced transactions and paying the appropriate application fees by
October 8, 1996. Please acknowledge in the space provided below that, pursuant
to Paragraph 8 "Financing Contingency", Seller agrees to waive the affidavit
requirement and the Purchaser's earnest monies will not be at risk until the
expiration of the Financing Contingency (on or before October 21, 1996).
In addition, please confirm that the closing dates in the contracts are
hereby extended until November 20, 1996.
Thank you for your assistance. If you have any questions, please feel
free to call me.
Sincerely yours,
HOUSING SYSTEMS, INC.
/s/ Russell A. Greer
Russell A. Greer
Executive Vice President
AGREED TO AND ACKNOWLEDGED BY: /s/ Mark A. Saturno Date: 10/7/96
--------------------------- ------------
Mark A. Saturno
Vice President
<PAGE>
FIRST AMENDMENT TO AGREEMENT OF SALE
THIS FIRST AMENDMENT TO AGREEMENT OF SALE (this "First Amendment"), is
entered into as of this 30th day of September, 1996, by and between DAVID
MORROW ("Purchaser"), CARRIAGE CROSSINGS LIMITED PARTNERSHIP, an Illinois
limited partnership ("Seller"), and CHICAGO TITLE INSURANCE COMPANY (the
"Escrow Agent").
W I T N E S S E T H:
WHEREAS, Purchaser and Seller entered into that certain Agreement of Sale
dated as of August 30, 1996 (the "Agreement"), for the purchase and sale of
certain real property located in Pompano Beach, Florida and commonly known as
Pelican Pointe Apartments (the "Property"). All capitalized words used but not
otherwise defined herein shall have the meanings ascribed thereto in the
Agreement.
WHEREAS, Purchaser and Seller desire to amend the Agreement upon the terms
and conditions more fully set forth herein.
WHEREAS, Purchaser, Seller and Escrow Agent entered into that certain
Escrow Agreement dated as of September 3, 1996 (the "Escrow Agreement"), which
provided for the holding and disposition of the Earnest Money deposited by
Purchaser pursuant to the Agreement by Escrow Agent.
WHEREAS, Purchaser and Seller desire to amend the Escrow Agreement to
provide for the holding and disposition of the Earnest Money heretofore
deposited by Purchaser with Escrow Agent.
WHEREAS, Escrow Agent has agreed to enter into this First Amendment to
acknowledge its continuing obligations to hold and distribute the Earnest Money
in accordance with the terms and provisions of the Escrow Agreement as modified
hereby.
NOW, THEREFORE, for good and valuable consideration, the receipt,
sufficiency and adequacy of which is hereby acknowledged, the parties hereby as
agree as follows:
1. The following sentence is added after the last sentence of Paragraph
1 of the Agreement: "Included in the Personal Property is the computer
hardware located in the management office, but specifically excluding all
computer software".
2. Paragraph 2.2 of the Agreement is hereby deleted in its entirety and
the following is inserted in lieu thereof: "On October 7, 1996, the sum of One
Hundred Fifty Thousand and No/100 Dollars ($150,000.00) (the "Additional
Earnest Money", and together with the Initial Earnest Money, the "Earnest
Money"), to be held in escrow by and in accordance with the provisions of the
Escrow Agreement."
3. The date "September 30, 1996" contained in the second line of
Paragraph 7.1 of the Agreement is hereby deleted and the date "October 7, 1996"
is hereby inserted in lieu thereof.
<PAGE>
4. All references in Paragraph 9 of the Agreement to "September 30,
1996" is hereby deleted in their entirety and the date "October 7, 1996" is
hereby inserted in lieu thereof.
5. The following new Paragraph 13.3 is hereby added after Paragraph 13.2
of the Agreement: "Seller agrees that Purchaser shall receive a credit at
Closing in the amount of One Hundred Thousand and No/100 Dollars ($100,000.00)
to make certain cosmetic and other improvements to the Property."
6. The references to the date "September 30, 1996" contained in
Paragraph 2 of the Escrow Agreement are hereby deleted and the date "October 7,
1996" is hereby inserted in lieu thereof.
7. The first sentence of Paragraph 3 of the Escrow Agreement is hereby
deleted in its entirety and the following is inserted in lieu thereof: "On or
before 5:00 p.m. Chicago time on October 7, 1996 (the "Financing Contingency
Date"), Purchaser may deliver to Escrow Agent a notice in the form of Schedule
2 attached hereto that Purchaser has elected to terminate the Agreement
pursuant to Paragraph 9 of the Agreement (the "Financing Termination Notice")."
8. Except as amended and modified hereby, each of the Agreement and the
Escrow Agreement shall be and remain unmodified and in full force and effect in
accordance with its terms, and each and every one of its provisions, as amended
and modified by this First Amendment, are hereby adopted, ratified and
affirmed. In the event of any conflict between the Agreement or the Escrow
Agreement and this First Amendment, the terms, conditions and provisions hereof
shall govern.
9. This First Amendment may be executed in one or more counterparts,
each of which shall be deemed an original, and all of which, when taken
together, shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
be executed by their authorized representatives as of the day and year first
above written.
PURCHASER:
/s/ David Morrow
----------------------------------
DAVID MORROW
SELLER:
CARRIAGE CROSSINGS LIMITED PARTNERSHIP, an
Illinois limited partnership
By: Carriage Crossings, Inc., an Illinois
corporation
By: /s/ James E. Mendelson
-------------------------------------
Name: James E. Mendelson
-------------------------------------
Its: Authorized Representative
-------------------------------------
ESCROW AGENT:
CHICAGO TITLE INSURANCE COMPANY
By:
-----------------------------------
Name:
-----------------------------------
Its:
-----------------------------------
Authorized Agent
<PAGE>
AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), is entered into as of the 26
day of September, 1996, by and between COLONY APARTMENTS CHAPEL HILL LIMITED
PARTNERSHIP, a Maryland limited partnership ("Purchaser"), and COLONY LIMITED
PARTNERSHIP, an Illinois limited partnership ("Seller").
WITNESSETH:
R-1. Seller is the owner of a certain parcel of land which real property
is legally and more particularly described in Exhibit A attached hereto (the
"Land"), together with the improvements thereon consisting of fifteen (15)
buildings containing, in the aggregate, One Hundred Ninety-Eight (198)
residential apartment units and certain other related improvements and
amenities comprising the apartment complex known as Colony Apartments located
at 1250 Ephesus Church Road, Chapel Hill, North Carolina (the "Improvements").
The Land and the Improvements, together with those items described in Section 1
below, shall hereinafter be referred to collectively as the "Property".
R-2. Seller desires to sell and Purchaser desires to purchase fee simple
title to the Property on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and/or other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller and Purchaser hereby agree
as follows:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to
sell at the price of Seven Million One Hundred Thousand and No/100 Dollars
($7,100,000.00 (the "Purchase Price"), the Property, which shall be deemed to
include the Land and the Improvements, together with (i) all appurtenances,
rights, privileges and easements benefitting or pertaining thereto; (ii) all
contracts relating to the operation and maintenance thereof or connected
therewith, unless terminated in accordance with Paragraph 16.2.3 hereof; (iii)
all fixtures, furniture, equipment, inventory, supplies, tools and other
personal property owned by Seller and used in connection with the operation of,
or located at the Property, other than those items owned by tenants and other
than any and all computer hardware and software located at the Property; (iv)
all of Seller's rights in or to condemnation awards or insurance proceeds (to
the extent not applied to restoration); (v) all assignable warranties,
guaranties, bonds, claims and rights running to or assigned to Seller in
connection with the construction, maintenance, operation or repair of the
Property or any component thereof; (vi) all of Seller's rights to any drawings,
plans, specifications, surveys, manuals and contracts relating to construction,
maintenance and operation of the Property; (vii) all assignable operating
licenses and/or permits relating to the Property or any portion thereof; (viii)
all of Seller's interest in and under all eases and occupancy agreements with
tenants or prospective tenants of the Property, including unapplied security
deposits held by Seller in connection therewith; and (ix) all other tangible
and intangible property or rights owned by Seller or in which Seller has an
interest in connection with its ownership and operation of the Property,
including all rights to use the trade name "Colony Apartments." Included in
the Purchase Price is all of the personal property set forth on Exhibit B
attached hereto (the "Personal Property").
<PAGE>
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as
follows:
2.1. Upon the execution of this Agreement, the sum of One Hundred
Thousand and No/100 Dollars ($100,000.00) (the "Initial 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;
2.2. In the event Purchaser elects to extend the "Closing Date"
(hereinafter defined), on or before October 25, 1996, the additional sum of
Fifty Thousand and No/100 Dollars ($50,000.00) (the "Additional Earnest Money")
to be held in escrow by and in accordance with the provisions of the Escrow
Agreement (the Initial Earnest Money and the Additional Earnest Money, if any,
are referred to herein, together, as "Earnest Money").
2.3. On the "Closing Date" (hereinafter defined), the balance of the
Purchase Price, adjusted in accordance with the prorations, by federally wired
"immediately available" funds, on or before 11:00 a.m Chicago time.
3. TITLE COMMITMENT AND SURVEY.
3.1. Seller has provided to Purchaser a commitment for owner's title
insurance for the Property (the "Title Commitment") from First American Title
Insurance Company (the "Title Company"). Seller shall, within 10 days of the
date hereof, provide Purchaser an update to the existing ALTA Survey dated
November 19, 1983 prepared by Ayer, Graham & Associates, Inc., a copy of which
has been provided to Purchaser by Seller (the "Updated Survey"). Seller and
Purchaser shall each pay for one-half of the costs of the Title Commitment, the
title policy issued pursuant thereto, and the Updated Survey. Purchaser shall
pay for the cost of any endorsements to, or extended coverage on, the title
policy.
3.2. On or before the date which is three (3) business days after
receipt by Purchaser of the Updated Survey, Purchaser shall advise Seller by
written notice (the "Purchaser's Title Objection Notice") of any objections
that Purchaser may have to (1) the title exceptions reflected in the Title
Commitment; and (2) any matters reflected on the Updated Survey. Any title
exceptions reflected in the Title Commitment or matters reflected on the
Updated Survey as to which Purchaser does not object in the Purchaser's Title
Objection Notice shall be referred to herein as the "Permitted Title and Survey
Exceptions." Within fifteen (15) days after Seller's receipt of the
Purchaser's Title Objection Notice, Seller shall advise Purchaser by written
notice (the "Seller's Title Notice") as to whether Seller intends to bond-over,
cure or remove the objectionable matters reflected in the Purchaser's Title
Objection Notice. Any objectionable matters that Seller agrees to bond-over,
cure or remove shall be bonded-over, cured or removed in form reasonably
satisfactory to Purchaser by Seller prior to "Closing" (as hereinafter
defined), and the applicable correction of such objectionable matters by Seller
shall be a condition precedent to Purchaser's obligations to proceed to Closing
hereunder. Purchaser shall have the right, exercisable by written notice to
Seller given within five (5) days after delivery to Purchaser of the Seller's
Title Notice which reflects that Seller does not intend to bond-over, cure or
remove some or all of the objectionable matters specified in the Purchaser's
Title Objection Notice, to either: (a) terminate this Contract, in which event
the Earnest Money shall be returned to Purchaser and the parties shall be
<PAGE>
relieved from all further liability or obligation under this Contract (except
with respect to those provisions hereof that are expressly intended to survive
the termination of this Contract as set forth herein); or (b) waive such
objectionable title and/or survey matters and proceed to Closing in conformity
with the terms of this Contract, in which event, such objectionable title
and/or survey matters shall be deemed "Permitted Title and Survey Exceptions"
under this Contract.
3.3. The obligation of Purchaser and Seller to pay various costs set
forth in Paragraphs 3.1 shall survive the termination of this Agreement.
4. PAYMENT OF CLOSING COSTS.
4.1. In addition to the costs set forth in Paragraph 3.1, Purchaser
and Seller shall each pay for one-half of the costs of the documentary or
transfer stamps to be paid with reference to the "Deed" (hereinafter defined)
and all other stamps, intangible, transfer, documentary, recording, sales tax
and surtax imposed by law with reference to any other sale documents delivered
in connection with the sale of the Property to Purchaser and all other charges
of the Title Insurer in connection with this transaction. Purchaser shall pay
all costs related to Purchaser's financing.
5. CONDITION OF TITLE.
5.1. The following conditions concerning title to the Property shall
exist at the time of Closing hereunder, and the obligation of Purchaser to
close hereunder shall be expressly conditioned upon and subject to the
satisfaction (or written waiver by Purchaser) of each such condition:
5.1.1. Title to the entire Property shall be (and is required
to be) good of record and in fact, marketable, and free and clear of all liens,
encumbrances, leases, tenancies, and occupancies, except for: (i) customary
rights of way and/or easements to public authorities and/or public-regulated
utility companies for public street purposes or fire lanes or for utilities or
utilities installations; provided that, none of the same, in Purchaser's
opinion, interfere with or adversely affect Purchaser's ownership, operation,
use or resale of the entire Property; (ii) then-current real estate taxes and
assessments and sewer and water charges not yet due and payable; (iii) those
occupancy leases listed on the rent roll attached hereto as Exhibit L, and any
leases of tenants entered into after the rent roll was prepared and shown on
the updated rent roll to be delivered at Closing pursuant to Section 9.2, which
comply with the covenant set forth in Paragraph 16.3 hereof; (iv) the Permitted
Title and Survey Exceptions; (v) an agreement with the Federal Housing
Commission requiring the Property to be maintained as rental housing until
April 1, 1998; and (vi) any other exceptions or survey matter waived in writing
by Purchaser (collectively, the "Permitted Exceptions").
5.1.2. Title to the entire Property shall be insurable, in an
amount not less than the Purchase Price of the Property, by Title Company, at
standard rates and without the payment of any special premium, under the
current ALTA standard full coverage owner's title insurance policy form, which
shall contain no Schedule B-1 exceptions, except for the Permitted Exceptions.
5.2. In the event that title to the entire Property at Closing is not as
required pursuant to the terms and provisions of Section 5.1 above, then
<PAGE>
Purchaser shall have the option, in its sole discretion, exercised by written
notice to the Seller, to: (i) waive such defects and proceed to Closing in
accordance with the terms of this Agreement, or (ii) terminate this Agreement,
obtain a refund of the Earnest Money and return to Seller all documents related
to the Property delivered to Purchaser by Seller, whereupon all parties hereto
shall be thereupon relieved from any further liability or obligation hereunder
(except with respect to those provisions hereof that are expressly intended to
survive the termination of this Agreement as set forth herein); or (iii) delay
the Closing hereunder for up to thirty (30) days to enable Seller to cure the
title defect (provided that Seller shall not be obligated to cure such title
defect). In the event Seller advises Purchaser by written notice at or prior
to the date closing would have occurred absent such failed condition that
Seller elects not to cure the title defect, then Purchaser shall be required to
exercise either of the remedies set forth in clauses (i) and (ii) above within
five (5) days following receipt of such notice.
5.3. Seller agrees to convey fee simple title to the Property to
Purchaser by special warranty deed (the "Deed") in recordable form subject only
to the Permitted Exceptions and those exceptions otherwise waived by Purchaser
in writing.
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
6.1. Except as provided in the indemnity provisions contained in
Paragraph 7.1 of this Agreement, Seller shall bear all risk of loss with
respect to the Property up to the earlier of the date upon which either
possession or title (by recordation of the Deed) 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 (i) repair and restore the Property (in which case the
Closing Date shall be extended until completion of such restoration) or (ii)
assign and transfer to Purchaser on the Closing Date all of Seller's right,
title and interest in and to all insurance proceeds paid or payable to Seller
on account of such fire or casualty, and Purchaser shall receive a credit
against the Purchase Price for any deductible. In the event Seller elects (i)
above, Purchaser shall have the right, in its sole discretion, by delivering
written notice to Seller of such election within three (3) days of Seller's
election in the previous sentence, to cause Seller to elect (ii) above instead.
Seller shall promptly notify Purchaser in writing of any such fire or other
casualty and Seller's determination of the cost to repair the damage caused
thereby. In the event of damage to the Property by fire or other casualty
prior to the Closing Date, repair of which would cost in excess of $100,000.00
(as determined by Seller in good faith), then this Agreement may be terminated
at the option of Purchaser, which option shall be exercised, if at all, by
Purchaser's written notice thereof to Seller within five (5) business days
after Purchaser receives written notice of such fire or other casualty and
Seller's determination of the amount of such damages, and upon the exercise of
such option by Purchaser this Agreement shall become null and void, the Earnest
Money deposited by Purchaser shall be returned to Purchaser together with
interest thereon, and neither party shall have any further liability or
obligations hereunder. In the event that Purchaser does not exercise the
option set forth in the preceding sentence, the Closing shall take place on the
<PAGE>
Closing Date and Seller shall assign and transfer to Purchaser on the Closing
Date all of Seller's right, title and interest in and to all insurance proceeds
paid or payable to Seller on account of the fire or casualty, and Purchaser
shall receive a credit against the Purchase Price for any deductible.
6.2. If between the date of this Agreement and the Closing Date, any
condemnation or eminent domain proceedings are initiated which might result in
the taking of any part of the Property or the taking or closing of any right of
access to the Property, Seller shall immediately notify Purchaser of such
occurrence. In the event that the taking of any part of the Property shall:
(i) materially impair access to the Property; (ii) cause any 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; (iii) materially and adversely impair the use of the
Property as it is currently being operated; or (iv) take more than 10% of the
Property or any portion of any building on the Property (hereinafter
collectively referred to as a "Material Event"), Purchaser may:
6.2.1. terminate this Agreement by written notice to seller, in
which event the Earnest Money deposited by Purchaser, together with interest
thereon, shall be returned to Purchaser and all rights and obligations of the
parties hereunder with respect to the closing of this transaction will cease;
or
6.2.2. proceed with the Closing, in which event Seller shall
assign to Purchaser all of Seller's right, title and interest in and to any
award made in connection with such condemnation or eminent domain proceedings.
6.3. Purchaser shall then notify Seller, within five (5) business
days after Purchaser's receipt of Seller's notice, whether Purchaser elects to
exercise its rights under Paragraph 6.2.1 or Paragraph 6.2.2. Closing shall be
delayed, if necessary, until Purchaser makes such election. If Purchaser fails
to make an election within such five (5) business day period, Purchaser shall
be deemed to have elected to exercise its rights under Paragraph 6.2.2. If
between the date of this Agreement and the Closing Date, any condemnation or
eminent domain proceedings are initiated which do not constitute a Material
Event, Purchaser shall be required to proceed with the Closing, in which event
Seller shall assign to Purchaser all of Seller's right, title and interest in
and to any award made in connection with such condemnation or eminent domain
proceedings.
7. INSPECTION AND AS-IS CONDITION.
7.1. During the period commencing on the date hereof and ending at
9:00 p.m. Washington time on October 1, 1996 (said period being herein referred
to as the "Financing Period"), Purchaser shall attempt to receive a written
commitment for financing acceptable to Purchaser in its sole discretion
("Financing").
In the event that Purchaser does not receive the Financing, 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 Financing
Period. If written notice is not received by Seller pursuant to this Paragraph
7.1 prior to the expiration of the Financing Period, then the right of
Purchaser to terminate this Agreement pursuant to this Paragraph 7.1 shall be
<PAGE>
waived. If Purchaser terminates this Agreement by written notice to Seller
prior to the expiration of the Financing 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 Financing
Period; and (ii) the Earnest Money deposited by Purchaser shall be immediately
paid to Purchaser, together with any interest earned thereon, and neither
Purchaser nor Seller shall have any right, obligation or liability under this
Agreement, except for Purchaser's obligation to indemnify Seller and restore
the Property, as more fully set forth in this Paragraph 7.1. Notwithstanding
anything contained herein to the contrary, the terms of this Paragraph 7.1,
shall survive the Closing and the delivery of the Deed and termination of this
Agreement.
All of the tests, investigations and studies conducted by Purchaser
shall be at Purchaser's sole cost and expense and Purchaser shall restore the
Property to the condition existing prior to the performance of such tests or
investigations by or on behalf of Purchaser. Purchaser shall defend, indemnify
and hold Seller and any affiliate, parent of Seller, and all shareholders,
employees, officers and directors of Seller or Seller's affiliate or parent
(hereinafter collectively referred to as "Affiliate of Seller") harmless from
any and all liability, cost and expense (including without limitation,
reasonable attorney's fees, court costs and costs of appeal) suffered or
incurred by Seller or Affiliates of Seller for injury to persons or property
caused by Purchaser's investigations and inspection of the Property. Purchaser
shall undertake its obligation to defend set forth in the preceding sentence
using attorneys selected by Seller, and reasonably satisfactory to Purchaser.
7.2. Seller acquired title to the Property by foreclosure (or
deed-in-lieu thereof). Seller can make no representations or warranties
relating to the condition of the Property or the Personal Property. Except as
may be otherwise specifically set forth elsewhere in this Agreement, Purchaser
acknowledges and agrees that it will be purchasing the Property and the
Personal Property based solely upon its inspections and investigations of the
Property and the Personal Property and that Purchaser will be purchasing the
Property and the Personal Property "AS IS" and "WITH ALL FAULTS", based upon
the condition of the Property and the Personal Property as of the date of this
Agreement, reasonable and normal wear and tear and loss by fire or other
casualty or condemnation excepted. Without limiting the foregoing, Purchaser
acknowledges that, except as may otherwise be specifically set forth elsewhere
in this Agreement, neither Seller nor its consultants, brokers or agents have
made any representations or warranties of any kind upon which Purchaser is
relying as to any matters concerning the Property or the Personal Property,
including, but not limited to, the condition of the land or any improvements
comprising the Property, the existence or non-existence of "Hazardous
Materials" (as hereinafter defined), economic projections or market studies
concerning the Property, any development rights, taxes, bonds, covenants,
conditions and restrictions affecting the Property, water or water rights,
topography, drainage, soil, subsoil of the Property, the utilities serving the
Property or any zoning or building laws, rules or regulations or "Environmental
Laws" (hereinafter defined) affecting the Property. Seller makes no
representation or warranty that the Property complies with Title III of the
Americans with Disabilities Act or any fire code or building code. Purchaser
hereby releases Seller and the Affiliates of Seller from any and all liability
in connection with any claims which Purchaser may have against Seller or the
Affiliates of Seller, and Purchaser hereby agrees not to assert any claims for
<PAGE>
contribution, cost recovery or otherwise, against Seller or the Affiliates of
Seller, relating directly or indirectly to the existence of asbestos or
Hazardous Materials on, or environmental conditions of, the Property, whether
known or unknown. As used herein, "Environmental Laws" means all federal,
state and local statutes, codes, regulations, rules, ordinances, orders,
standards, permits, licenses, policies and requirements (including consent
decrees, judicial decisions and administrative orders) relating to the
protection, preservation, remediation or conservation of the environment or
worker health or safety, all as amended or reauthorized, or as hereafter
amended or reauthorized, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.
Section 9601 et seq., the Resource Conservation and Recovery Act of 1976
("RCRA"), 42 U.S.C. Section 6901 et seq., the Emergency Planning and Community
Right-to-Know Act ("Right-to-Know Act"), 42 U.S.C. Section 11001 et seq., the
Clean Air Act ("CAA"), 42 U.S.C. Section 7401 et seq., the Federal Water
Pollution Control Act ("Clean Water Act"), 33 U.S.C. Section 1251 et seq., the
Toxic Substances Control Act ("TSCA"), 15 U.S.C. Section 2601 et seq., the Safe
Drinking Water Act ("Safe Drinking Water Act"), 42 U.S.C. Section 300f et seq.,
the Atomic Energy Act ("AEA"), 42 U.S.C. Section 2011 et seq., the Occupational
Safety and Health Act ("OSHA"), 29 U.S.C. Section 651 et seq., and the
Hazardous Materials Transportation Act (the "Transportation Act"), 49 U.S.C.
Section 1802 et seq. As used herein, "Hazardous Materials" means:
(1) "hazardous substances," as defined by CERCLA; (2) "hazardous wastes," as
defined by RCRA; (3) any radioactive material including, without limitation,
any source, special nuclear or by-product material, as defined by AEA; (4)
asbestos in any form or condition; (5) polychlorinated biphenyls; and (6) any
other material, substance or waste to which liability or standards of conduct
may be imposed under any Environmental Laws. Notwithstanding anything
contained herein to the contrary, the terms of this Paragraph 7.2 shall survive
the Closing and the delivery of the Deed and termination of this Agreement.
7.3. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Except as specifically 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 may be vastly different than Purchaser may be able to
attain. Purchaser acknowledges that it is a sophisticated and experienced
purchaser of real estate and further that Purchaser has relied upon its own
investigation and inquiry with respect to the operation of the Property and
releases Seller and the Affiliates of Seller from any liability with respect to
such historical information. Notwithstanding anything contained herein to the
contrary, the terms of this Paragraph 7.3 shall survive the Closing and the
delivery of the Deed and termination of this Agreement.
7.4. Seller has provided to Purchaser the following existing report:
Phase I Environmental Site Assessment and Limited Asbestos Survey dated January
7, 1992, prepared by Law Associates, Inc. ("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,
<PAGE>
and the accuracy and/or completeness of the Existing Report. Furthermore,
Purchaser acknowledges that it will be purchasing the Property with all faults
disclosed in the Existing Report. Notwithstanding anything contained herein to
the contrary, the terms of this Paragraph 7.4 shall survive the Closing and the
delivery of the Deeds and termination of this Agreement.
8. CLOSING.
8.1. The closing of this transaction (the "Closing") shall be on the
later to occur of (i) October 31, 1996, (ii) three (3) business days after
receipt from the Federal Housing Commissioner of written approval to the sale
of the Property and the prepayment of the existing financing encumbering the
Property, or (iii) in the event that Purchaser deposits the Additional Earnest
Money with the Escrow Agent on or before October 25, 1996, November 29, 1996
(the "Closing Date"), at the office of Title Insurer, Chapel Hill, North
Carolina, at which time Seller shall deliver possession of the Property to
Purchaser. This transaction shall be closed through an escrow with Title
Insurer, in accordance with the general provisions of the usual and customary
form of deed and money escrow for similar transactions in North Carolina, or at
the option of either party, the Closing shall be a "New York style" closing at
which the Purchaser shall wire the Purchase Price to Title Insurer on the
Closing Date and prior to the release of the Purchase Price to Seller,
Purchaser shall receive the Title Policy or marked up commitment dated the date
of the Closing Date. In the event of a New York style closing, Seller shall
deliver to Title Insurer any customary affidavit in connection with a New York
style closing. All closing and escrow fees shall be divided equally between
the parties hereto. In the event Seller does not receive from the Federal
Housing Commissioner the written approval to the sale of the Property and the
prepayment of the existing financing encumbering the Property on or before
December 31, 1996, this Agreement shall automatically terminate, Purchaser
shall promptly deliver to Seller copies of all studies, reports and other
investigations obtained by Purchaser in connection with its due diligence, 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 Paragraph 7.1.
8.2. The following conditions shall exist at the time of Closing
hereunder, and the obligation of Purchaser to close hereunder shall be
expressly conditioned upon and subject to the satisfaction (or written waiver
by Purchaser) of each such condition:
8.2.1. Each of the representations and warranties made by
Seller in Section 16.2 hereof shall be true and correct in all material
respects on the date of Closing, subject to appropriate modifications of such
representations or warranties permitted under Section 16.3 of this Agreement.
For purposes of this Section, a representative or warranty shall be deemed to
be materially true and correct unless the difference between the representation
and warranty made by Seller and the accurate state of facts existing at Closing
has a material adverse effect on Purchaser and/or the Property.
8.2.2. The Property shall be in the same physical condition
as it was upon the date hereof, subject to normal and usual wear and tear.
<PAGE>
If any one or more of the conditions set forth in Section 8.2.1 or 8.2.2
above are not satisfied as of the date specified for Closing hereunder, then
Purchaser shall have the option, in its sole discretion, exercised by written
notice to Seller, to: (i) waive such condition and complete the Closing under
this Contract in accordance with the terms and conditions hereof, without any
reduction or adjustment in the Purchase Price, except as specifically provided
herein; or (ii) terminate this Contract and obtain a refund of its Earnest
Money and all interest earned thereon, whereupon Seller and Purchaser shall be
thereupon released from all further liability or obligation under this Contract
except with respect to the provisions hereof which are expressly intended to
survive the termination of this Contract for any reason. 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 the covenant made by Seller pursuant to Paragraph 16.4,
then Purchaser shall not have the right to terminate this Agreement or make any
claim for breach of a representation or warranty hereunder involving the rent
roll or tenancies thereunder.
9. CLOSING DOCUMENTS.
9.1. On or prior to the Closing Date, Seller and Purchaser shall
execute and deliver to one another a joint closing statement. In addition,
Purchaser shall deliver to Seller (i) the balance of the Purchase Price, (ii)
an assumption of the documents set fourth in Paragraph 9.2.3 and 9.2.4, (iii)
if required by the Federal Housing Commissioner, an agreement with the Federal
Housing Commissioner requiring the Property to be maintained as rental housing
until April 1, 1998, (iv) a release in favor of Seller and all Affiliates of
Seller in form reasonably acceptable to Seller from John Eames and First State
Holdings, Inc. with respect to any claim from anyone claiming by or through
John Eames or First State Holdings, Inc. for any fee, commission or
compensation on account of this Agreement, its negotiation or the sale hereby
contemplated, and (v) such other documents as may be reasonably required by the
Title Insurer in order to consummate the transaction as set forth in this
Agreement.
9.2. On the Closing Date, Seller shall deliver to Purchaser the
following:
9.2.1. the Deed (in the form of Exhibit E attached hereto),
subject to the Permitted Exceptions and any other exceptions waived by
Purchaser in writing;
9.2.2. a quit claim bill of sale conveying the Personal
Property (in the form of Exhibit F attached hereto);
9.2.3. assignment and assumption of intangible property (in the
form attached hereto as Exhibit G), including, without limitation, the service
contracts listed in Exhibit H;
9.2.4. an assignment and assumption of leases and security
deposits (in the form attached hereto as Exhibit I);
9.2.5. non-foreign affidavit (in the form of Exhibit J attached
hereto);
<PAGE>
9.2.6. original, and to the extent original not in Seller's
possession, copies of, leases affecting the Property in Seller's possession, to
be delivered at the Property;
9.2.7. all documents and instruments reasonably required by the
Title Insurer to issue the Title Policy;
9.2.8. possession of the Property to Purchaser, including all
appropriate keys, subject to the terms of leases;
9.2.9. evidence of the termination of the management agreement;
9.2.10. notice to the tenants of the Property of the transfer of
title and assumption by Purchaser of the landlord's obligation under the leases
and the obligation to refund the security deposits (in the form of Exhibit K);
9.2.11. an updated rent roll; and,
9.2.12. to the extent in Seller's possession, copies of all
books and records specifically requested by Purchaser, licenses and permits,
and certificates of occupancy, to be delivered at the Property.
10. PURCHASER'S DEFAULT. ALL EARNEST MONEY DEPOSITED INTO THE ESCROW IS
TO SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND
UNDERTAKINGS UNDER THIS AGREEMENT. IN THE EVENT OF A DEFAULT OF THE PURCHASER
UNDER THE PROVISIONS OF THIS AGREEMENT, AND IF SELLER HAS NOT DEFAULTED IN ITS
OBLIGATIONS UNDER THIS AGREEMENT, SELLER SHALL RETAIN ALL OF THE EARNEST MONEY
AND THE INTEREST THEREON AS SELLER'S SOLE RIGHT TO DAMAGES OR ANY OTHER REMEDY,
EXCEPT FOR PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER AND RESTORE THE PROPERTY
AS SET FORTH IN PARAGRAPH 7.1 HEREOF. THE PARTIES HAVE AGREED THAT SELLER'S
ACTUAL DAMAGES, IN THE EVENT OF A DEFAULT BY PURCHASER, WOULD BE EXTREMELY
DIFFICULT OR IMPRACTICAL TO DETERMINE. THEREFORE, BY PLACING THEIR INITIALS
BELOW, THE PARTIES ACKNOWLEDGE THAT THE EARNEST MONEY HAS BEEN AGREED UPON,
AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES.
11. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF ALL EARNEST MONEY
TOGETHER WITH ANY INTEREST ACCRUED THEREON, AND THIS AGREEMENT SHALL THEN
BECOME NULL AND VOID AND OF NO EFFECT AND THE PARTIES SHALL HAVE NO FURTHER
LIABILITY TO EACH OTHER AT LAW OR IN EQUITY, EXCEPT FOR PURCHASER'S OBLIGATIONS
TO INDEMNIFY SELLER AND RESTORE THE PROPERTY AS SET FORTH MORE FULLY IN
PARAGRAPH 7. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF
SELLER'S DEFAULT IS ITS WILLFUL REFUSAL TO DELIVER THE CLOSING DOCUMENTS SET
FORTH IN SECTION 9.2 HEREOF, THEN PURCHASER WILL BE ENTITLED TO SUE FOR
SPECIFIC PERFORMANCE.
12. PRORATIONS.
12.1. All Rents (exclusive of delinquent rents, but including
prepaid rents), expenses, taxes, water and sewer rents, or similar charges of
fees, are to be adjusted as of midnight of the day of Closing. Real and
personal property taxes, general and special, are to be adjusted according to
the certificate of taxes issued by the taxing authority, and Purchaser shall
assume charges therefor accruing from and after Closing.
<PAGE>
12.2. All contracts and agreements relative to the operation,
servicing and/or maintenance of the Property to be assigned to Purchaser or
terminated (to the extent the term extends beyond the Closing Date) shall be
adjusted between the parties as of midnight of the day of Closing.
12.3. Purchaser shall have no obligation to collect any past-due
rents except that Purchaser shall use commercially reasonable efforts to
collect delinquent rents and promptly reimburse Seller for such past-due rents
when, as and if collected,net of costs of collection. Monies received from
delinquent tenants after Closing by Purchaser shall be applied as follows: (1)
first, pro rata to Purchaser and Seller for the month the Closing takes place;
(2) second, to Purchaser in an amount equal to all rentals due from such
tenants accruing after Closing; (3) third, to costs of collection; and (4)
fourth, to Seller in an amount equal to any remaining unpaid rental arrearages
owed by such tenants to Seller as of the Closing Date.
12.4. At Closing, Seller shall deliver to Purchaser, or make
appropriate adjustments for, all tenant security deposits and the like,
together with statutory or contractual interest owed to tenants, together with
a detailed statement of the security deposits and all such accrued interest
held for the account of each tenant. Purchaser shall receipt for the same and
shall indemnify, defend and save Seller harmless from and against any claims
relating to Purchaser's application or holding of such deposits and interest,
which Seller has delivered or for which an adjustment has been made at
Closing,from and after Closing. Seller shall indemnify, defend and save
Purchaser harmless from and against any claims relating to Seller's application
or holding of such deposits and interest prior to Closing.
13. RECORDING. Neither this Agreement nor a memorandum thereof shall be
recorded and the act of recording by Purchaser shall be an act of default
hereunder by Purchaser and subject to the provisions of Paragraph 10 hereof.
14. ASSIGNMENT. The Purchaser shall not have the right to assign its
interest in this Agreement without the prior written consent of the Seller.
Any assignment or transfer of, or attempt to assign or transfer, Purchaser's
interest in this Agreement shall be an act of default hereunder by Purchaser
and subject to the provisions of Paragraph 10 hereof. Notwithstanding the
foregoing, Purchaser may make one (1) assignment of its interest in this
Agreement without the consent of Seller to any entity affiliated with or
controlled by Purchaser (the "Assignee"), provided that Purchaser remains
liable for and the Assignee assumes the obligations of Purchaser hereunder. If
the Assignee petitions or applies for bankruptcy or Assignee is adjudicated as
a bankrupt or insolvent, or Assignee files any petition, application for relief
or answer-seeking or acquiescing in any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief for
itself under any present or future federal, state or other statute, law, code
or regulation relating to bankruptcy, insolvency, or other relief for debtors
(collectively, a "Bankruptcy Filing") on or before the Closing Date, said
Bankruptcy Filing shall be a default under this Agreement and Purchaser shall
indemnify Seller for all costs, attorney's fees and expenses of Seller
resulting from Seller's efforts to obtain the Earnest Money as liquidated
damages and to clear title to the Property from any encumbrance resulting from
the Bankruptcy Filing.
<PAGE>
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 CB Commercial Real Estate Group, Inc. (to be paid by Seller).
Seller's commission to CB Commercial Real Estate Group, Inc. shall only be
payable out of the proceeds of the sale of the Property in the event the
transaction set forth herein closes. Purchaser and Seller shall indemnify,
defend and hold the other party hereto harmless from any claim whatsoever
(including without limitation, reasonable attorney's fees, court costs and
costs of appeal) from anyone claiming by or through the indemnifying party any
fee, commission or compensation on account of this Agreement, its negotiation
or the sale hereby contemplated other than to CB Commercial Real Estate Group,
Inc. The indemnifying party shall undertake its obligations set forth in this
Paragraph 15 using attorneys selected by the indemnifying party and reasonably
acceptable to the indemnified party. The provisions of this Paragraph 15 will
survive the Closing and delivery of the Deed.
16. REPRESENTATIONS AND WARRANTIES.
16.1. Any reference herein to Seller's knowledge or notice of any
matter or thing shall only mean such knowledge or notice that has actually been
received by Phillip Schechter or Reid Reynolds (the "Seller's Representative"),
and any representation or warranty of the Seller is based upon those matters of
which the Seller's Representative has actual knowledge. Any knowledge or
notice given, had or received by any of Seller's agents, servants or employees
shall not be imputed to Seller, the general partner or limited partners of
Seller, the subpartners of the general partner or limited partners of Seller or
Seller's Representative.
16.2. Subject to the limitations set forth in Paragraph 16.1, Seller
hereby makes the following representations and warranties, which
representations and warranties are made to the Seller's knowledge:
16.2.1. Seller has full right, power and authority to enter
into this Agreement. The parties executing this Agreement on behalf of Seller
have full power and authority bind Seller to the obligations of Seller set
forth herein.
16.2.2. Seller is a duly formed, validly existing limited
partnership, and is in good standing under the laws of the State of Illinois.
Seller has obtained all consents and approvals necessary to make this Agreement
binding upon Seller and to permit consummation of the transactions contemplated
herein in accordance with the terms of this Agreement. This Agreement does not
violate the terms of any other contract or instrument to which Seller is a
party or by which Seller or the Property is bound.
16.2.3. Except as disclosed on Exhibit H attached hereto and
incorporated herein by this reference or as may be disclosed on the Purchaser's
Title Commitment, no service, contracts of any kind or description are in
existence with respect to the Property. Seller agrees not to enter into any
other service contracts affecting the Property, except for service contracts
which are terminable on not more than thirty (30) days written notice.
Purchaser shall assume all contracts and agreements in existence with respect
to the Property at Closing, except for those contracts or agreements that are
by their terms terminable without premium or penalty which Purchaser has
expressly instructed Seller, by written notice delivered prior to October 2,
<PAGE>
1996 (the "Service Contract Termination Notice"), to terminate at or prior to
the time of Closing hereunder. In the event that Purchaser timely delivers the
Service Contract Termination Notice to Seller in conformity with this Section
16.2, Seller shall deliver notice of termination under the applicable contracts
or agreements to the parties thereto at or prior to the time of Closing
hereunder.
16.2.4. The rent roll attached hereto as Exhibit L is true,
accurate and complete as of the date of said rent roll and reflects any
delinquencies as of the date hereof.
16.2.5. There is not any pending or threatened litigation,
governmental proceeding, judgment or cause of action againSt or related to the
Property.
16.2.6. Seller is not a "foreign person" within the meaning of
the Internal Revenue Code of 1986, as amended to date (the "Code"), and the
transaction contemplated hereby does not constitute a deposition of a U.S. real
property interest by a foreign person. At Closing, Seller shall deliver to
Purchaser an affidavit (the "Section 1445 Affidavit") certifying, under
penalties of perjury, Seller's U.S. taxpayer identification number and that
Seller is not a foreign person.
16.2.7. Seller has received no written notice from any
governmental authority of any uncured violations of any Environmental Laws.
16.2.8. All items of personal property, if any, which are
included in the Property and listed on Exhibit B, are owned by Seller and shall
be owned by Seller on the date of Closing, free and clear of all liens, debts,
charges, and encumbrances of every nature, kind, and description.
16.2.9. Seller has received no written notice from the Federal
Housing Commission or any of Seller's insurance carriers of any uncured
violations of covenants regarding the physical condition of the Property.
16.3. From and after full execution hereof until Closing, Seller
shall notify Purchaser of any events or circumstances arising after the
Effective Date hereof, of which Seller has actual knowledge, and which, if not
disclosed to Purchaser, would render any of the foregoing representations and
warranties untrue in any material way. As to any events or circumstances
arising after the expiration of the Financing Period, within ten (10) days
after receipt of Seller's notice (but no later than the Closing date),
Purchaser shall notify Seller in writing whether Purchaser either: (i) accepts
the modified representation or warranty and will proceed to Closing; or (ii)
elects not to accept the modified representation or warranty and will not
proceed to Closing, whereupon the Earnest Money shall be refunded to Purchaser,
and the parties shall have not further obligations or liabilities hereunder
except with respect to those provisions hereof that are expressly intended to
survive the termination of this Agreement as set forth herein. The parties
agree that the representations and warranties 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 representation
or warranty after the expiration of sixty (60) days immediately following
Closing). Purchaser and Seller are prohibited from making any claims against
the other party hereto after Closing with respect to any breaches of the other
<PAGE>
party's representations and warranties contained in this Agreement that the
claiming party had actual knowledge of prior to Closing.
16.4. 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. Seller shall not enter into any leases for units in the Property for
rents less than Seller is currently charging for comparable units in the
Property.
16.5. Purchaser makes the following representations and warranties
to Seller, each of which shall be true and correct on the date of execution
hereof (except as otherwise specifically provided) and on the date of Closing:
16.5.1. Purchaser is a duly formed, validly existing limited
partnership, and is in good standing under the laws of the State of Maryland.
16.5.2. Purchaser has full right, power and authority to enter
into this Agreement, and this Agreement has been duly authorized by all
appropriate action of Purchaser. The parties executing this Agreement on
behalf of Purchaser have full power and authority to bind Purchaser to the
obligations of Purchaser set forth herein, and upon execution and delivery of
this Agreement, all closing documents executed by Purchaser will constitute
valid and binding instruments of Purchaser enforceable against Purchaser in
accordance with their terms.
16.5.3. The entry into and performance of Purchaser's
obligations under this Agreement will not violate or result in a breach of any
contract or agreement by which Purchaser is bound.
16.5.4. There is no litigation or injunctive action or
proceeding pending or, to the best of Purchaser's knowledge, threatened against
Purchaser which would prevent the performance of Purchaser's obligations under
this Agreement at Closing.
16.5.5. All actions and consents necessary have been taken or
obtained to authorize Purchaser to enter into this Agreement and to perform the
transaction contemplated herein.
16.6. From and after full execution hereof until Closing, Purchaser
shall notify Seller of any events or circumstances arising after the Effective
Date hereof, which, if not disclosed to Seller, would render any of the
foregoing representations and warranties untrue in any material way. As to any
events or circumstances arising after the expiration of the Financing Period,
within ten (10) days after receipt of Purchaser's notice (but no later than the
Closing date), Seller shall notify Purchaser in writing whether Seller either:
(i) accepts the modified representation or warranty and will proceed to
Closing; or (ii) elects not to accept the modified representation or warranty
and not to proceed to Closing, whereupon Seller shall have the right to
terminate this Agreement, the Earnest Money shall be refunded to Purchaser, and
the parties shall have not further obligations or liabilities hereunder except
with respect to those provisions hereof that are expressly intended to survive
the termination of this Contract as set forth herein.
<PAGE>
17. LIMITATION OF LIABILITY. No Affiliate of Seller, nor any of Seller's
respective beneficiaries, shareholders, partners, officers, directors, 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.
18. TIME OF ESSENCE. Time is of the essence of this Agreement.
19. NOTICES. Any notice or demand which either party hereto is required
or may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by overnight courier
such as Federal Express, by facsimile transmission or made by United States
registered or certified mail addressed as follows:
TO SELLER: c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attention: Ilona Adams
with copies to: The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attention: James Mendelson
(847) 317-4367
(847) 317-4462 (FAX)
and to: Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, Illinois 60661-3693
Attention: Daniel J. Perlman, Esq.
(312) 902-5532
(312) 902-1061 (FAX)
TO PURCHASER: c/o Tarheel Investments, LLC
c/o The Goldstar Group
4340 East-West Highway
Suite 200
Bethesda, Maryland 20814
Attention: Mr. Michael S. Brodsky
(301) 657-8848
(301) 986-9801 (FAX)
<PAGE>
and one copy to: David, Hagner, Kuney & Krupin, P.C.
1120 19th Street, NW #800
Washington, D.C. 20036
Attention: Elizabeth C. Lee, Esq.
(202) 857-4437
(202) 467-6910 (FAX)
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be
deemed to be delivered or made on the next business day if sent by overnight
courier, or the same day as given if sent by facsimile transmission and
received by 5:00 p.m. Chicago time or on the 4th business day after the same is
deposited in the United States Mail as registered or certified matter,
addressed as above provided, with postage thereon fully prepaid. Any such
notice, demand or document not given, delivered or made by registered or
certified mail, by overnight courier or by facsimile transmission as aforesaid
shall be deemed to be given, delivered or made upon receipt of the same by the
party to whom the same is to be given, delivered or made. Copies of all
notices shall be served upon the Escrow Agent.
20. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute
two (2) copies of this Agreement and three (3) copies of the Escrow Agreement
and forward them to Seller for execution, accompanied with the Earnest Money
payable to the Escrow Agent set forth in the Escrow Agreement. Seller will
forward one (1) copy of the executed Agreement to Purchaser and will forward
the following to the Escrow Agent:
(A) Earnest Money;
(B) One (1) fully executed copy of this Agreement; and
(C) Three (3) copies of the Escrow Agreement signed by the parties with a
direction to execute two (2) copies of the Escrow Agreement and deliver a fully
executed copy to each of the Purchaser and the Seller.
21. GOVERNING LAW. The provisions of this Agreement shall be governed by
the laws of the State of North Carolina, except that with respect to the
retainage of the Earnest Money as liquidated damages the laws of the State of
Illinois shall govern.
22. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all other negotiations, understandings and
representations made by and between the parties and the agents, servants and
employees.
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.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date first set forth above.
PURCHASER:
COLONY APARTMENTS CHAPEL HILL
LIMITED PARTNERSHIP, a Maryland limited
partnership
By: TARHEEL INVESTMENTS, LLC,
A Maryland limited liability company
By: /s/ Michael Bradely
---------------------------------
Name: Michael Bradely
---------------------------------
Its: Managing Member
---------------------------------
SELLER:
COLONY LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Colony Partners, Inc., an Illinois
corporation, its general partner
By: /s/ James E. Mendelson
----------------------------------
Name: James E. Mendelson
----------------------------------
Its: Authorized Representative
----------------------------------
<PAGE>
_________________ of CB Commercial Real Estate Group, Inc. ("Seller's Broker")
executed this Agreement in its capacity as a real estate broker and
acknowledges that the fee or commission due it from Seller as a result of the
transaction described in this Agreement is as set forth in that certain Listing
Agreement, dated __, 199_ between Seller and Seller's Broker (the "Listing
Agreement"). Seller's Broker also acknowledges that payment of the aforesaid
fee or commission is conditioned upon the Closing and the receipt of the
Purchase Price by the Seller. Seller's Broker agrees to deliver a receipt to
the Seller at the Closing for the fee or commission due Seller's Broker and a
release, in the appropriate form, stating that no other fees or commissions are
due to it from Seller or Purchaser.
CB COMMERCIAL REAL ESTATE GROUP, INC.
By:
-------------------------------------
Name:
-------------------------------------
Its:
-------------------------------------
<PAGE>
Exhibits
A - Legal
B - Personal Property
C - Escrow Agreement
D - Intentionally Deleted
E - Deed
F - Bill of Sale
G - Assignment and Assumption of Intangible Property
H - Service Contracts
I - Assignment and Assumption of Leases and Security Deposits
J - Non-Foreign Affidavit
K - Notice to Tenants
L - Rent Roll
<PAGE>
MODIFICATION AGREEMENT
This Modification Agreement ("Modification") dated this 2nd day of
October, 1996, by and between ALLIANCE HOLDINGS, L.L.C., an Illinois limited
liability company ("Purchaser") and BALCOR PENSION INVESTORS-IV, an Illinois
limited partnership ("Seller").
W I T N E S S E T H:
WHEREAS, Purchaser and Seller entered into an Agreement of Sale dated
August 29, 1996 ("Contract") for the Del Lago Apartments, Tampa, Florida; and
WHEREAS, Purchaser and Seller desire to modify the Contract as hereinafter
provided; and
NOW, THEREFORE, in consideration of the sum of Ten and 00/100 Dollars
($10.00) and other good and valuable consideration, in hand paid, the receipt
and sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. The amount Three Million One Hundred Thousand and 00/100 Dollars
($3,100,000.00) contained in Section 1 of the Contract is hereby deleted and
the amount Two Million Eight Hundred Thousand and 00/100 Dollars
($2,800,000.00) is hereby substituted therefor.
2. The date September 5, 1996 contained in Section 7.1 of the Contract is
hereby deleted and the date October 15, 1996 is hereby substituted therefor.
3. Section 7.1 is further modified by inserting in the last full
paragraph of said Section, following "(ii)" and before "Earnest Money", the
following: "one-half (1/2) of" and by adding to the same sentence, following
the word "thereon", the following phrase: "the other half of the Earnest Money
to be disbursed to Seller without further authorization of Purchaser being
required,".
4. The date October 7, 1996 contained in Section 8 of the Contract is
hereby deleted and the date October 30, 1996 is hereby substituted therefor.
5. Section 8 is further modified by adding the following thereto:
"Notwithstanding anything to the contrary contained herein, Purchaser shall
have the right to extend the Closing Date to December 30, 1996, upon (i)
written notice to Seller effective on or before October 25, 1996 of Purchaser's
intention to so extend the Closing Date and (ii) payment by Purchaser to
Seller, on or before October 25, 1996, of the amount Seventy-Five Thousand and
00/100 Dollars ($75,000.00), which amount shall be non-refundable to Purchaser
(except in the event of Seller default) and applicable to the Purchase Price
(in the event this transaction proceeds to Closing).
6. Except as above provided, the Contract remains unmodified and in full
force and effect.
<PAGE>
PURCHASER: SELLER:
ALLIANCE HOLDINGS, L.L.C., BALCOR PENSION INVESTORS-IV,
an Illinois limited liability an Illinois limited partnership
company
By: Balcor Mortgage Advisors-II,
an Illinois general partnership,
its general partner
By: /s/ Andrew W. Schor By: The Balcor Company, a Delaware
-------------------------- corporation, a general partner
Name: Andrew W. Schor
-------------------------- By: /s/ James E. Mendelson
Its: President -------------------------------
-------------------------- Name: James E. Mendelson
-------------------------------
Its: Authorized Representative
-------------------------------
<PAGE>
