SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) December 14, 1994
BALCOR EQUITY PROPERTIES-XIV
Exact Name of Registrant
Illinois 0-11803
State or other jurisdiction Commission File Number
of organization
Balcor Plaza
4849 Golf Road
Skokie, Illinois 36-3236496
Address of principal I.R.S. Employer
executive offices Identification
60077
Zip Code
Registrant's telephone number, including area code:
(708) 677-2900
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Belmere Apartments
In 1984, Belmere Apartments, Hillsborough County, Florida (the "Property") was
acquired by a limited partnership (the "Limited Partnership") in which the
Partnership and an affiliate of the Partnership held joint venture interests of
approximately 74% and 26%, respectively. The Partnership contributed
$3,675,000 and the affiliate contributed $1,264,785 towards the purchase of the
Property. The Property was acquired subject to first mortgage financing of
$6,390,000.
On December 14, 1994, the Limited Partnership sold the Property for a sale
price of $8,500,000 to Mid-America Apartments, L.P., a Tennessee limited
partnership (the "Purchaser"). From the sale proceeds, the Limited Partnership
paid $6,377,168, including accrued interest and a $42,471 prepayment premium,
to the holder of the first mortgage loan, $191,250 to two unaffiliated parties
as a brokerage commission, $176,398 in closing and other costs and received the
remaining $1,755,184 of sale proceeds. Neither the General Partner nor any
of its affiliates received a commission in connection with the sale of the
Property. The Partnership's share of the sale proceeds is $1,305,857. The
Limited Partnership has agreed to hold $250,000 of the sale proceeds through the
later of February 12, 1995 or the resolution of any claims which may be asserted
by the Purchaser prior to February 12, 1995 relating to the Property.
With the sale of the Property, the Partnership has sold all of its investments
in real estate. The General Partner intends to proceed with the liquidation of
the Partnership by distributing all available funds to the partners after
reserving amounts necessary to pay remaining Partnership liabilities and to
settle the affairs of the Partnership.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(A) FINANCIAL STATEMENTS:
None
(B) PRO FORMA FINANCIAL INFORMATION:
None
(C) EXHIBITS:
(2) Agreement of Sale and attachment thereto relating to the sale of
Belmere Apartments, Hillsborough County, Florida.
No information is required under Items 1, 3, 4, 5, 6 and 8 and these items
have, therefore, been omitted.
Signature
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 EQUITY PROPERTIES-XIV
By: Balcor Equity Partners-XIV, Inc.,
the general partner
By: /s/ Jerry M. Ogle
-----------------------------
Jerry M. Ogle, Vice President
and Secretary
Dated: December 28, 1994
EXHIBIT 2
AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), entered into as of the __ day
of December, 1994, by and between MID-AMERICA APARTMENTS, L.P., a Tennessee
limited partnership ("Purchaser"), and B ASSOCIATES, an Illinois limited
partnership ("Seller").
WITNESSETH:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to sell
at the price of Eight Million Five Hundred Thousand And No/100 Dollars
($8,500,000.00) (the "Purchase Price"), that certain property commonly known as
Belmere Apartments located in the City of Tampa, State of Florida, and legally
described and depicted on Exhibit A attached hereto (the "Property"). Included
in the Purchase Price is all of the personal property set forth in Exhibit B
(the "Personal Property").
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as follows:
(a) Upon the execution of this Agreement, the sum of Two Hundred Thousand
And No/100 Dollars ($200,000.00) (the "Earnest Money") to be held in escrow by
and in accordance with the provisions of the Escrow Agreement ("Escrow
Agreement") attached hereto as Exhibit C; and
(b) On the "Closing Date" (hereinafter defined), the balance of the
Purchase Price, adjusted in accordance with the prorations, by federally wired
"immediately available" funds, on or before 11:00 a.m Chicago time.
3. TITLE COMMITMENT AND SURVEY.
A. Attached hereto as Exhibit D is a copy of a title commitment for an
owner's standard title insurance policy issued by Lawyer's Title Insurance
Company (hereinafter referred to as "Title Insurer") dated November 21, 1994
for the Property (the "Title Commitment"). For purposes of this Agreement,
"Permitted Exceptions" shall mean: (a) the general printed exceptions contained
in the standard title policy to be issued by Title Insurer based on the Title
Commitment; (b) general real estate taxes not yet due and payable; (c) matters
shown on the "Updated Survey" (hereinafter defined); (d) matters caused by the
actions of Purchaser; and (e) the title exceptions set forth in Schedule B of
the Title Commitment as Numbers 5 through 9 inclusive, to the extent that same
effect the Property. All the other exceptions to title shall be referred to as
"Unpermitted Exceptions". The Title Commitment shall be conclusive evidence of
good title as therein shown as to all matters to be insured by the title
policy, subject only to the exceptions therein stated. On the Closing Date,
Title Insurer shall deliver to Purchaser a standard title policy in conformance
with the previously delivered Title Commitment, subject only to Permitted
Exceptions (the "Title Policy"). Seller shall pay all costs associated with
the Title Commitment and Title Policy, except that the costs of any
endorsements to, or extended coverage on, the Title Policy shall be paid by
Purchaser.
B. Purchaser has received a survey of the Property prepared by Post,
Buckley, Schuh & Jernigan, Inc. dated November 23, 1994 (the "Updated Survey").
Seller shall pay for the cost of the Updated Survey. Purchaser hereby
acknowledges that all matters disclosed by the Updated Survey are acceptable to
Purchaser.
4. PAYMENT OF CLOSING COSTS.
A. In addition to the costs set forth in Paragraphs 3A and B, Seller
shall pay for cost 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. Seller shall pay all other closing charges of the Title Insurer
in connection with this transaction.
5. CONDITION OF TITLE.
A. If, prior to Closing, a date-down to the Title Commitment or the
Updated Survey disclose an Unpermitted Exception (other than the current
financing secured by the Property, which will be satisfied at Closing), Seller
shall have thirty (30) days from the date of the date-down to the Title
Commitment to (i) bond over, cure and/or have any Unpermitted Exceptions which,
in the aggregate, do not exceed $50,000.00 (a "Minor Unpermitted Exception"),
removed from the Title Commitment or to have the Title Insurer commit to insure
against loss or damage (together with the commitment to reissue the appropriate
endorsement for the benefit of Purchaser's financings and sale at no cost to
Purchaser) that may be occasioned by such Minor Unpermitted Exceptions at no
additional premium to Purchaser, or (ii) have the right, but not the
obligation, to bond over, cure and/or have any Unpermitted Exceptions which, in
the aggregate, equals or exceeds $50,000.00, removed from the Title Commitment
or to have the Title Insurer commit to insure against loss or damage (together
with the commitment to reissue the appropriate endorsement for the benefit of
Purchaser's financings and sale at no cost to Purchaser) that may be occasioned
by such Unpermitted Exceptions at no additional premium to Purchaser. The time
of Closing shall be delayed, if necessary, to give effect to said
aforementioned time periods. If Seller fails to cure or have said Unpermitted
Exception removed or have the Title Insurer commit to insure as specified above
within said thirty (30) day period or if Seller elects not to exercise its
rights under (ii) in the preceding sentence, Purchaser may terminate this
Agreement upon notice to Seller within five (5) days after the expiration of
said thirty (30) day period; provided, however, and notwithstanding anything
contained herein to the contrary, if the Unpermitted Exception which gives rise
to Purchaser's right to terminate was recorded against the Property as a result
of the affirmative, willful action of Seller (and not by any unrelated third
party) with the intention to prevent the sale of the Property in accordance
with the terms hereof or if Seller is able to bond over, cure or remove a Minor
Unpermitted Exception for a cost not to exceed $50,000 or the Title Insurer is
willing to insure over a Minor Unpermitted Exception for a cost not to exceed
$50,000 in accordance with the terms hereof and Seller fails to expend said
funds in either case, then Purchaser shall have the additional rights contained
in Paragraph 11 herein. Absent notice from Purchaser to Seller in accordance
with the terms hereof, 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 5A, this Agreement shall become
null and void without further action of the parties and all Earnest Money
theretofore deposited into the escrow by Purchaser together with any interest
accrued thereon, shall be returned to Purchaser, and neither party shall have
any further liability to the other, except for Purchaser's obligation to
indemnify Seller and restore the Property, as more fully set forth in Paragraph
7.
B. Seller agrees to convey fee simple title to the Property to Purchaser
by special warranty deed ("Deed") in recordable form subject only to the
Permitted Exceptions and any Unpermitted Exceptions waived by Purchaser.
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
A. Except as provided in any indemnity provisions of this Agreement,
Seller shall bear all risk of loss with respect to the Property up to the
earlier of the dates upon which either possession or title is transferred to
Purchaser in accordance with this Agreement. Notwithstanding the foregoing, in
the event of damage to the Property by fire or other casualty prior to the
Closing Date, repair of which would cost less than or equal to $100,000.00 (as
determined by Seller in good faith) Purchaser shall not have the right to
terminate its obligations under this Agreement by reason thereof, but Seller
shall have the right to elect to either repair and restore the Property (in
which case the Closing Date shall be extended until completion of such
restoration) or to assign and transfer to Purchaser on the Closing Date all of
Seller's right, title and interest in and to all insurance proceeds paid or
payable to Seller on account of such fire or casualty, including, without
limitation, proceeds of lost rental insurance for the period commencing with
the Closing Date through the period of Purchaser's repair, to the extent said
lost rental insurance covers Purchaser's loss in rental insurance and Seller
shall pay to Purchaser at the Closing the amount of Seller's insurance
deductible. Seller shall promptly notify Purchaser in writing of any such fire
or other casualty and Seller's determination of the cost to repair the damage
caused thereby. In the event of damage to the Property by fire or other
casualty prior to the Closing Date, repair of which would cost in excess of
$100,000.00 (as determined by Seller in good faith), then this Agreement may be
terminated at the option of Purchaser, which option shall be exercised, if at
all, by Purchaser's written notice thereof to Seller within five (5) business
days after Purchaser receives written notice of such fire or other casualty and
Seller's determination of the amount of such damages, and upon the exercise of
such option by Purchaser this Agreement shall become null and void, the Earnest
Money deposited by Purchaser shall be returned to Purchaser together with
interest thereon, and neither party shall have any further liability or
obligations hereunder except for Purchaser's obligations to indemnify Seller
and restore the Property, as set forth more fully in Paragraph 7. In the event
that Purchaser does not exercise the option set forth in the preceding
sentence, the Closing shall take place on the Closing Date and Seller shall
assign and transfer to Purchaser on the Closing Date all of Seller's right,
title and interest in and to all insurance proceeds paid or payable to Seller
on account of the fire or casualty, including, without limitation, proceeds of
lost rental insurance for the period commencing with the Closing Date through
the period of Purchaser's repair, to the extent said lost rental insurance
covers Purchaser's loss in rental insurance and Seller shall pay to Purchaser
at the Closing the amount of Seller's insurance deductible.
B. If between the date of this Agreement and the Closing Date, any
condemnation or eminent domain proceedings are initiated which might result in
the taking of any part of the Property or the taking or closing of any right of
access to the Property, Seller shall immediately notify Purchaser of such
occurrence. In the event that the taking of any part of the Property shall:
(i) materially impair access to the Property; (ii) cause any material non-
compliance with any applicable law, ordinance, rule or regulation of any
federal, state or local authority or governmental agencies having jurisdiction
over the Property or any portion thereof; or (iii) materially and adversely
impairs the use of the Property as it is currently being operated (hereinafter
collectively referred to as a "Material Event"), Purchaser may:
(a) terminate this Agreement by written notice to Seller, in which event the
Earnest Money deposited by Purchaser, together with interest thereon, shall be
returned to Purchaser and all rights and obligations of the parties hereunder
with respect to the closing of this transaction will cease, except for
Purchaser's obligations to indemnify Seller and restore the Property, as set
forth more fully in Paragraph 7; or
(b) proceed with the Closing, in which event Seller shall assign to Purchaser
all of Seller's right, title and interest in and to any award made in
connection with such condemnation or eminent domain proceedings and give
Purchaser the right of approval as to the amount of any award.
Purchaser shall then notify Seller, within five (5) business days after
Purchaser's receipt of Seller's notice, whether Purchaser elects to exercise
its rights under subparagraph (a) or subparagraph (b) of this Paragraph 6B.
Closing shall be delayed, if necessary, until Purchaser makes such election.
If Purchaser fails to make an election within such five (5) business day
period, Purchaser shall be deemed to have elected to exercise its rights under
subparagraph (b).
If between the date of this Agreement and the Closing Date, any condemnation or
eminent domain proceedings are initiated which do not constitute a Material
Event, Purchaser shall be required to proceed with the Closing, in which event
Seller shall assign to Purchaser all of Seller's right, title and interest in
and to any award made in connection with such condemnation or eminent domain
proceedings and give Purchaser the right of approval as to the amount of any
award.
7. INSPECTION AND AS-IS CONDITION.
A. Seller has delivered to Purchaser copies of the current rent roll for
the Property, the most recent tax and insurance bills, utility account numbers,
service contracts, and unaudited year end 1993 and 1994 (through October 31)
operating statements. Purchaser has completed its due diligence review of the
Property and the aforesaid delivered materials.
Purchaser agrees that as a condition to being allowed on the Property to
conduct its due diligence, Purchaser agrees to restore the Property to the
condition existing prior to the performance of any investigations by or on
behalf of Purchaser if there is damage to the Property caused by Purchaser's
investigations or inspection of the Property. Purchaser shall defend,
indemnify and hold Seller and any affiliate, parent of Seller, and all
shareholders, employees, officers and directors of Seller or Seller's affiliate
or parent (hereinafter collectively referred to as "Affiliate of Seller")
harmless from any and all liability, cost and expense (including without
limitation, reasonable attorney's fees, court costs and costs of appeal)
suffered or incurred by Seller or Affiliates of Seller for injury to persons or
property caused by Purchaser's investigations and inspection of the Property.
Purchaser shall undertake its obligation to defend set forth in the preceding
sentence using attorneys selected by Purchaser and reasonably acceptable to
Seller.
B. Purchaser acknowledges and agrees that it will be purchasing the
Property based solely upon its inspections and investigations of the Property,
and that Purchaser will be purchasing the Property "AS IS" and "WITH ALL
FAULTS", based upon the condition of the Property as of the date of this
Agreement, wear and tear and loss by fire or other casualty or condemnation
excepted. Without limiting the foregoing, Purchaser acknowledges that, except
as may otherwise be specifically set forth elsewhere in this Agreement, neither
Seller nor its consultants, brokers or agents have made any other
representations or warranties of any kind upon which Purchaser is relying as to
any matters concerning the Property, including, but not limited to, the
condition of the land or any improvements comprising the Property, the
existence or non-existence of any hazardous materials or substances, economic
projections or market studies concerning the Property, any development rights,
taxes, bonds, covenants, conditions and restrictions affecting the Property,
water or water rights, topography, drainage, soil, subsoil of the Property, the
utilities serving the Property or any zoning, environmental or building laws,
rules or regulations affecting the Property. Seller makes no representation or
warranty that the Property complies with Title III of the Americans with
Disabilities Act or any fire code or building code. Except with respect to a
breach by Seller of any representation or warranty expressly contained herein,
Purchaser hereby releases Seller and the Affiliates of Seller from any and all
liability in connection with any claims which Purchaser may have against
Seller, and except with respect to a breach by Seller of any representation or
warranty expressly contained herein, Purchaser hereby agrees not to assert any
claims for contribution, cost recovery or otherwise, against Seller, relating
directly or indirectly to the existence of asbestos or hazardous materials or
substances on, or environmental conditions of, the Property, whether known or
unknown. As used herein, the term "hazardous materials or substances" means
(i) hazardous wastes, hazardous substances, hazardous constituents, toxic
substances or related materials, whether solids, liquids or gases, including
but not limited to substances defined as "hazardous wastes," "hazardous
substances," "toxic substances," "pollutants," "contaminants," "radioactive
materials," or other similar designations in, or otherwise subject to
regulation under, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA"), 42 U.S.C. Section 9601 et seq.;
the Toxic Substance Control Act ("TSCA"), 15 U.S.C. Section 2601 et seq.; the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1802; the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C. Section 9601. et seq.; the
Clear Water Act ("CWA"), 33 U.S.C. Section 1251 et seq.; the Safe Drinking
Water Act, 42 U.S.C. Section 300f et seq.; the Clean Air Act ("CAA"), 42 U.S.C.
Section 7401 et seq.; and in any permits, licenses, approvals, plans, rules,
regulations or ordinances adopted, or other criteria and guidelines promulgated
pursuant to the preceding laws or other similar federal, state or local laws,
regulations, rules or ordinance now or hereafter in effect relating to
environmental matters (collectively the "Environmental Laws"); and (ii) any
other substances, constituents or wastes subject to any applicable federal,
state or local law, regulator or ordinance, including any Environmental Law,
now or hereafter in effect, including but not limited to (A) petroleum, (B)
refined petroleum products, (C) waste oil, (D) waste aviation or motor vehicle
fuel and (E) asbestos. Radon is a naturally occurring radioactive gas that,
when it has accumulated in a building in sufficient quantities, may present
health risks to persons who are exposed to it over time. Levels of radon that
exceed federal and state guidelines have been found in buildings in Florida.
Additional information regarding radon and radon testing may be obtained from
the county public health unit. Seller makes no representation regarding the
levels of radon at the Property.
C. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Except as expressly set forth herein,
Seller makes no representation or warranty that such material is complete or
accurate or that Purchaser will achieve similar financial or other results with
respect to the operations of the Property, it being acknowledged by Purchaser
that Seller's operation of the Property and allocations of revenues or expenses
may be vastly different than Purchaser may be able to attain. Purchaser
acknowledges that it is a sophisticated and experienced purchaser of real
estate and further that Purchaser has relied upon its own investigation and
inquiry with respect to the operation of the Property and the representations
and warranties of Seller expressly contained herein and releases Seller from
any liability with respect to such historical information, except with respect
to a breach of a representation or warranty of Seller contained herein.
D. Seller has provided to Purchaser the following reports: Preliminary
Environmental Site Assessment prepared by Environmental Management Group, Inc.
dated February 14, 1994 ("Existing Report"). Seller makes no representation
or warranty concerning the accuracy or completeness of the Existing Report.
Purchaser hereby releases Seller from any liability whatsoever with respect to
the Existing Report, or, including, without limitation, the matters set forth
in the Existing Report, the accuracy and/or completeness of the Existing
Report. Furthermore, Purchaser acknowledges that it will be purchasing the
Property with all faults disclosed in the Existing Report.
8. CLOSING. The closing of this transaction (the "Closing") shall be on
December 15, 1994 (the "Closing Date"), at the office of Title Insurer, Tampa,
Florida, 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 Florida, 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. Purchaser shall pay all closing and escrow fees.
9. 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
documents set forth in Paragraph 9.B.(iii) and (iv) and such other documents as
may be reasonably required by the Title Insurer in order to consummate the
transaction as set forth in this Agreement.
B. On the Closing Date, Seller shall deliver to Purchaser the following:
(i) the Deed (in the form of Exhibit E attached hereto), subject to
Permitted Exceptions and those Unpermitted Exceptions waived by
Purchaser;
(ii) a special warranty bill of sale conveying the Personal Property
(in the form of Exhibit F attached hereto);
(iii) assignment and assumption of intangible property (in the form
attached hereto as Exhibit G);
(iv) an assignment and assumption of leases and security deposits (in
the form attached hereto as Exhibit H);
(v) non-foreign affidavit (in the form of Exhibit I attached hereto);
(vi) original, and/or copies of, leases affecting the Property in
Seller's possession;
(vii) all documents and instruments reasonably required by the Title
Insurer to issue the Title Policy;
(viii) possession of the Property to Purchaser;
(ix) an executed closing statement;
(x) notice to the tenants of the Property of the transfer of title and
assumption by Purchaser of the landlord's obligation under the
leases and the obligation to refund the security deposits (in the
form of Exhibit J); and
(xi) an updated rent roll.
10. DEFAULT BY PURCHASER. ALL EARNEST MONEY DEPOSITED INTO THE ESCROW IS TO
SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND UNDERTAKINGS
UNDER THIS AGREEMENT. IN THE EVENT OF A DEFAULT OF THE PURCHASER UNDER THE
PROVISIONS OF THIS AGREEMENT, SELLER SHALL RETAIN ALL OF THE EARNEST MONEY AND
THE INTEREST THEREON AS SELLER'S SOLE RIGHT TO DAMAGES OR ANY OTHER REMEDY,
EXCEPT FOR PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER PURSUANT TO PARAGRAPH 7A
HEREOF. THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES, IN THE EVENT OF
A DEFAULT BY PURCHASER, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICAL TO
DETERMINE. THEREFORE, BY PLACING THEIR INITIALS BELOW, THE PARTIES ACKNOWLEDGE
THAT THE EARNEST MONEY HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES'
REASONABLE ESTIMATE OF SELLER'S DAMAGES.
11. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF ALL EARNEST MONEY
TOGETHER WITH ANY INTEREST ACCRUED THEREON, AND THIS AGREEMENT SHALL THEN
BECOME NULL AND VOID AND OF NO EFFECT AND THE PARTIES SHALL HAVE NO FURTHER
LIABILITY TO EACH OTHER AT LAW OR IN EQUITY, EXCEPT FOR PURCHASER'S OBLIGATIONS
TO INDEMNIFY SELLER AND RESTORE THE PROPERTY AS SET FORTH MORE FULLY IN
PARAGRAPH 7 AND PURCHASER'S RIGHT TO RECEIVE FROM SELLER ITS ACTUAL, DOCUMENTED
THIRD PARTY EXPENSES INCURRED IN THE PERFORMANCE OF ITS DUE DILIGENCE HEREUNDER
AND THE PREPARATION OF THIS AGREEMENT, NOT TO EXCEED $200,000 IN THE AGGREGATE.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF SELLER'S DEFAULT
IS (i) ITS (AND NOT AN UNRELATED THIRD PARTY'S) AFFIRMATIVE, WILLFUL ACTION
WHICH RESULTS IN THE RECORDING OF AN ENCUMBRANCE AGAINST THE PROPERTY WITH THE
INTENTION TO PREVENT THE SALE OF THE PROPERTY IN ACCORDANCE WITH THE TERMS
HEREOF AND WHICH GIVES RISE TO PURCHASER'S RIGHT TO TERMINATE THIS AGREEMENT
PURSUANT TO PARAGRAPH 5 HEREOF; (ii) ITS FAILURE TO EXPEND UP TO $50,000 IF (a)
SELLER IS ABLE TO BOND OVER, CURE OR REMOVE A MINOR UNPERMITTED EXCEPTION FOR A
COST NOT TO EXCEED $50,000 OR (b) THE TITLE INSURER IS WILLING TO INSURE OVER A
MINOR UNPERMITTED EXCEPTION FOR A COST NOT TO EXCEED $50,000 IN ACCORDANCE WITH
THE TERMS HEREOF OR (iii) ITS REFUSAL TO DELIVER THE DEED, THEN PURCHASER WILL
BE ENTITLED TO SUE FOR SPECIFIC PERFORMANCE.
12. PRORATIONS.
A. Rents (exclusive of delinquent rents, but including prepaid rents);
refundable security deposits (which will be assigned to and assumed by
Purchaser and credited to Purchaser at Closing); association assessments for
the Carrolwood Phase III Homeowner's Association, Inc.; water and other utility
charges; fuels; prepaid operating expenses; real and personal property taxes;
and other similar items shall be adjusted ratably as of 12:01 a.m. on the
Closing Date. Assessments of record payable in installments which are due
subsequent to the Closing Date shall be paid by Purchaser. If the amount of
any of the items to be prorated is not then ascertainable, the adjustments
thereof shall be on the basis of the most recent ascertainable data. The
parties agree to re-prorate the proration items within forty-five (45) days
after the date of Closing, except as to delinquent rent referred to in
Paragraph 12B below.
B. All sums paid following the Closing Date by any tenant of the
Property who is indebted under a lease for any period prior to and including
the Closing Date shall be deemed a "Post-Closing Receipt" until such time as
all such indebtedness is paid in full. Within ten (10) days following each
receipt by Purchaser of a Post-Closing Receipt, Purchaser shall pay such Post-
Closing Receipt to Seller. Purchaser shall send monthly collection notices to
tenants residing at the Property owing Post-Closing Receipts. Within 90 days
after the Closing Date, Purchaser shall deliver to Seller a reconciliation
statement of Post-Closing Receipts through the first 60 days after the Closing
Date. Upon the delivery of the Post-Closing Receipts reconciliation, Purchaser
shall deliver to Seller any Post-Closing Receipts owing to Seller and not
previously delivered to Seller in accordance with the terms hereof. At
Seller's expense, Seller retains the right to conduct an audit, at reasonable
times and upon reasonable notice, of Purchaser's books and records to verify
the accuracy of the Post-Closing Receipts reconciliation statement and upon the
verification of additional funds owing to Seller, Purchaser shall pay to Seller
said additional Post-Closing Receipts. Paragraph 12B of this Agreement shall
survive the Closing and the delivery and recording of the Deed.
13. RECORDING. This Agreement shall not be recorded and the act of recording
by Purchaser shall be an act of default hereunder by Purchaser and subject to
the provisions of Paragraph 10.
14. ASSIGNMENT. The Purchaser shall not have the right to assign its interest
in this Agreement without the prior written consent of the Seller. Any
assignment or transfer of, or attempt to assign or transfer, Purchaser's
interest in this Agreement shall be an act of default hereunder by Purchaser
and subject to the provisions of Paragraph 10.
15. BROKER. The parties hereto represent and warrant that no broker
commission or finder fee is due and payable in connection with this transaction
other than to (i) Cushman & Wakefield of Florida, Inc. (to be paid by Seller)
and (ii) Insignia Financial Group and Memphis Commercial Group (to be paid by
Cushman & Wakefield of Florida, Inc.). Seller's commission to Cushman &
Wakefield of Florida, 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 Cushman & Wakefield of Florida, Inc., Insignia Financial Group and Memphis
Commercial Group. 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. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
A. Any reference herein to Seller's knowledge, representation, warranty
or notice of any matter or thing shall only mean such knowledge or notice that
has actually been received by Phillip Schechter or Michael Becker (asset
manager of the Property and who is in a position to have a basis for having
knowledge with respect to the Property) (hereinafter collectively referred to
as the "Seller's Representatives"), and any representation or warranty of the
Seller is based upon those matters of which the Seller's Representatives have
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 Representatives.
B. Subject to the limitations set forth in Paragraph A of this Paragraph
16, Seller hereby makes the following representations and warranties, which
representations and warranties are made to the Seller's knowledge and which
shall, subject to Paragraph 16C, be remade at Closing:
(i) Seller has no knowledge of any pending or threatened litigation, claim,
cause of action or administrative proceeding concerning the Property;
(ii) Seller has paid the Carrolwood Phase III Homeowners Association, Inc.
$34,650 in satisfaction of its obligation for 1994 assessments;
(iii) The rent roll attached hereto as Exhibit L and which shall be updated as
of the Closing Date accurately sets forth the number of tenants then in
possession of the Property as of the date of said rent roll, contains an
accurate summary of the rental obligations, the expiration date, the security
deposit and the delinquencies of each such tenancy as of the date of said rent
roll;
(iv) That the tenant leases evidencing such tenancies referred to in the rent
roll are in full force and effect and have not been amended or modified except
as set forth in the rent roll or the leases made available to Purchaser for
Purchaser's review;
(v) Seller has received no notice of any material default on the part of Seller
under any said tenant leases;
(vi) Except as set forth in the rent roll, no tenant under the leases as of the
date of the rent roll is in material default of the payment of rent;
(vii) That Seller will not collect any of the rent or other sums arising or
accruing under any of the said tenant leases in advance of the time when they
come due except for the benefit of Purchaser (and Seller retains ownership of
all accounts receivable for rents due for periods of time prior to the
Closing);
(viii) The Seller has not given or suffered any assignment, pledge or
encumbrance with respect to any of the tenant leases or its interests
thereunder except as additional collateral for the existing loan secured by the
Property;
(ix) Pending the Closing, Seller will not without the prior consent of
Purchaser convey all or any portion of the Property;
(x) Except as shown on Exhibit M, there are no service contracts which in any
manner affect or otherwise relate to the Property or the tenant leases;
(xi) Seller has full right, power and authority to enter into this Agreement
and consummate the transaction contemplated hereby;
(xii) Seller and all persons or entities having beneficial interests in the
Property are "United States Persons," as defined in Section 1445(f)(3) and
Section 7701(g) of the Internal Revenue Code of 1986, as amended, and the
purchase of the Property by Purchaser as contemplated herein will not be
subject to the withholding requirements of Section 1445(a) of the Code;
(xiii) Except as may be set forth in the Existing Report, Seller has not
received any notice from any governmental authority having jurisdiction over
the Property of any uncured violation of any Environmental Law with respect to
the Property. Seller has not commissioned any environmental report with
respect to the Property other than the Existing Report; and
(xiv) Seller has not received written notice from any third party of any
structural defects that would render the Property unusable as an apartment
complex.
C. If at any time after the execution of this Agreement, either
Purchaser or Seller become aware of information which makes a representation
and warranty contained in this Agreement to become untrue in any material
respect, said party shall promptly disclosure said information to the other
party hereto. Provided the party making the representation or warranty did not
take any deliberate actions to cause the representation or warranty in question
to become untrue in any material respect, said party shall not be in default
under this Agreement and the sole remedy of the other party shall be to
terminate this Agreement. Notwithstanding anything contained herein to the
contrary, if the status of any of the tenancies changes from the date of the
rent roll attached hereto and the date of the rent roll delivered at Closing,
provided the change in status is not caused by a breach of Seller's covenants
contained in Paragraph 16D herein, then Purchaser shall not have the right to
terminate this Agreement or make any claim for a breach of a representation or
warranty hereunder involving the rent roll or tenancies thereunder. Purchaser
and Seller are prohibited from making any claims against the other party hereto
after the Closing with respect to any breaches of the other party's
representations and warranties contained in this Agreement that the claiming
party has actual knowledge of prior to the Closing. The parties agree that the
representations contained herein shall survive Closing for a period of sixty
(60) days (i.e., the claiming party shall have no right to make any claims
against the other party for a breach of a representation or warranty after the
expiration of sixty (60) days immediately following Closing).
D. Seller covenants to operate and manage the Property in the same
manner that it has managed, maintained and operated the Property during the
period of Seller's ownership, subject to reasonable wear and tear and casualty.
17. LIMITATION OF LIABILITY. Neither any of Seller's respective partners
(whether general partners, limited partners or any level of sub-partner) nor
any beneficiaries, shareholders, officers, agents or employees, heirs,
successors or assigns shall have any personal liability of any kind or nature
for or by reason of any matter or thing whatsoever under, in connection with,
arising out of or in any way related to this Agreement and the transactions
contemplated herein, and Purchaser hereby waives for itself and anyone who may
claim by, through or under Purchaser any and all rights to sue or recover on
account of any such alleged personal liability. Notwithstanding anything
contained herein to the contrary, Purchaser hereby agrees that the maximum
aggregate liability of Seller, in connection with, arising out of or in any way
related to a breach by Seller under this Agreement or any document or
conveyance agreement in connection with the transaction set forth herein shall
be $250,000; provided, however, in no way shall this sentence or the following
sentence preclude Purchaser's right of specific performance contained in
Paragraph 11 herein. Purchaser hereby waives for itself and anyone who may
claim by, through or under Purchaser any and all rights to sue or recover from
Seller any amount greater than said limit. Seller further agrees not to
distribute $250,000 of the proceeds of the Purchase Price to its partners for
the longer of (i) sixty (60) days after the Closing and (ii) final resolution
of any claims by Purchaser and asserted in writing against Seller prior to the
expiration of the sixtieth (60th) day after the Closing in accordance with the
terms of this Agreement ("Claims"); provided, however, that if any Claims are
disputed by Seller, Seller shall have the right, by written notice to
Purchaser, to require Purchaser to file suit in a court of competent
jurisdiction within thirty (30) days after such notice to Purchaser; otherwise
said notice with respect to the Claim in question shall no longer prevent
Seller from distributing the proceeds.
18. TIME OF ESSENCE. Time is of the essence of this Agreement.
19. NOTICES. Any notice or demand which either party hereto is required or
may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered, facsimile delivered or given or made
by overnight courier such as Federal Express or made by United States
registered or certified mail addressed as follows:
TO SELLER: c/o The Balcor Company
4849 Golf Road
Skokie, Illinois 60077
Attention: Ilona Adams
with copies to: The Balcor Company
4849 Golf Road
Skokie, Illinois 60077
Attention: Alan Lieberman
(708) 677-2900
(708) 982-4027 (FAX)
and to: Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, Illinois 60661-3693
Attention: Daniel J. Perlman, Esq.
(312) 902-5532
(312) 902-1061 (FAX)
TO PURCHASER: c/o Mid-America Apartment Communities, Inc.
6584 Poplar Avenue
Suite 340
Memphis, Tennessee 38138
Attention: Donald Aldridge
(901) 682-6600
(901) 682-6667 (FAX)
and one copy to: Apperson, Crump, Duzane & Maxwell
1755 Kirby Parkway
Suite 100
Memphis, Tennessee 38120
Attention: John Maxwell
(901) 756-6300
(901) 757-1296 (FAX)
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be
deemed to be delivered or made on the next business day if sent by overnight
courier, on the same day if sent by facsimile transmission prior to 5:00 p.m.
Chicago time or on the 4th business day after the same is deposited in the
United States Mail as registered or certified matter, addressed as above
provided, with postage thereon fully prepaid. Any such notice, demand or
document not given, delivered or made by registered or certified mail or by
overnight courier as aforesaid shall be deemed to be given, delivered or made
upon receipt of the same by the party to whom the same is to be given,
delivered or made. Copies of all notices shall be served upon the Escrow
Agent.
20. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute three
(3) copies of this Agreement and four (4) copies of the Escrow Agreement and
forward them to Seller for execution, accompanied with the Earnest Money
payable to the Escrow Agent set forth in the Escrow Agreement. Seller will
forward one (1) copy of the executed Agreement to Purchaser and will forward
the following to the Escrow Agent:
(1) Purchaser's check for the Earnest Money;
(2) One (1) fully executed copy of this Agreement; and
(3) Three (3) copies of the Escrow Agreement signed by the parties with a
direction to execute two (2) copies of the Escrow Agreement and
deliver a fully executed copy to each of the Purchaser and the
Seller.
21. GOVERNING LAW. The provisions of this Agreement shall be governed by the
laws of the State of Florida, 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.
25. SERVICE CONTRACTS. Attached hereto as Exhibit M is a list of service
contracts affecting the Property. Seller shall assign the service contracts to
Purchaser at Closing, and Purchaser shall assume responsibility and obligations
under the service contracts. Seller agrees not to enter into any other service
contracts affecting the Property. Seller agrees to terminate any and all
management agreements affecting the Property as of the Closing Date.
26. AUDIT. Seller will make available to Purchaser's representatives such
books, accounts and records necessary for Purchaser to conduct an audit of the
Property's preceding fiscal year. This audit will be conducted solely at
Purchaser's expense for the purpose of satisfying its requirements as a
publicly held entity. Seller agrees to execute and deliver a disclosure letter
prepared by the auditors of Purchaser in the form attached hereto as Exhibit K.
The terms of this Paragraph 26 shall survive the Closing for a period of one
(1) year after the Closing Date.
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the ____ day of December, 1994.
PURCHASER:
MID-AMERICA APARTMENTS, L.P., a Tennessee limited partnership
By: MID-AMERICA APARTMENT COMMUNITIES, INC., a
Tennessee corporation, its general partner
By:
-----------------------------
Its: President
----------------------------
SELLER:
B ASSOCIATES, an Illinois limited partnership
By: Belmere Investors, an Illinois joint
venture, a general partner
By: Florida Investors, an Illinois
limited partnership, a general
partner
By: Balcor Equity Partners - XVIII,
an Illinois general partnership,
a general partner
By: THE BALCOR COMPANY, a
Delaware Corporation, a
general partner
By: /s/Phillip Schecter
-------------------------
Authorized Agent
By: Balcor Equity Properties - XIV, an Illinois
limited partnership, a general partner
By: Balcor Equity Properties XIV, Inc. a
Delaware corporation, its general
partner
By: /s/Phillip Schecter
----------------------------
Its: Authorized Agent
---------------------------
_________________ of Cushman & Wakefield of Florida, 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 April 1, 1994 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 stating that no other fees or commissions are due to it from Seller or
Purchaser.
CUSHMAN & WAKEFIELD OF FLORIDA, INC.
By:
-----------------------
_________________ of Insignia Financial Group ("Sub-Broker") executed this
Agreement in its capacity as a real estate broker and acknowledges that the fee
or commission due it from Cushman & Wakefield of Florida, Inc. as a result of
the transaction described in this Agreement is
______________________________________. Sub 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. Sub-Broker agrees to deliver
a receipt to the Seller at the Closing for the fee or commission due Sub Broker
and a release stating that no other fees or commissions are due to it from
Seller, Purchaser or Cushman & Wakefield of Florida, Inc.
INSIGNIA MORTGAGE INVESTMENT CO.
By: /s/Fredric Scarola
-------------------------
Don Aldridge of Memphis Commercial Group ("Sub-Broker") executed this
Agreement in its capacity as a real estate broker and acknowledges that the fee
or commission due it from Cushman & Wakefield of Florida, Inc. as a result of
the transaction described in this Agreement is $15,000. Sub-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. Sub-
Broker agrees to deliver a receipt to the Seller at the Closing for the fee or
commission due Sub-Broker and a release stating that no other fees or
commissions are due to it from Seller, Purchaser or Cushman & Wakefield of
Florida, Inc.
MEMPHIS COMMERCIAL GROUP
By: /s/Don Aldridge
-------------------------
Exhibits
A - Legal
B - Personal Property
C - Escrow Agreement
D - Title Commitment
E - Special Warranty Deed
F - Special Warranty Bill of Sale
G - Assignment and Assumption of Intangible Property
H - Assignment and Assumption of Leases and Security Deposits
I - Non-Foreign Affidavit (FIRPTA Statement)
J - Notice to Tenants
K - Auditor's Disclosure Letter
L - Rent Roll
M - List of Service Contracts
