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) July 5, 1996
BALCOR EQUITY PENSION INVESTORS-I
------------------------------------------------------------
Exact Name of Registrant
Illinois 2-85270
- -------------------------------- --------------------------------
State or other jurisdiction Commission file number
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 36-3240345
- -------------------------------- --------------------------------
Address of principal I.R.S. Employer
executive offices Identification
Number
60015
- --------------------------------
Zip Code
Registrant's telephone number, including area code:
(847) 267-1600
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
- ------------------------------------------------------------------------
Oxford Square Apartments
In August 1986, the Partnership funded a $12,000,000 first mortgage loan
collateralized by the Oxford Square Apartments, Casselberry, Florida (formerly
known as Casselberry Apartments). In December 1986, the Partnership accepted a
deed in lieu of foreclosure and took title to the property.
On July 5, 1996, the Partnership contracted to sell the property for a sale
price of $10,500,000 to an unaffiliated party, TGM Realty Corp. #5, a Delaware
corporation. The purchaser has deposited $300,000 into an escrow account as
earnest money. The remaining portion of the sale price will be payable in cash
at closing, which is scheduled to occur on August 1, 1996. From the proceeds
of the sale, the Partnership will pay $210,000 to an unaffiliated party as a
brokerage commission. An affiliate of the third party providing property
management services for the property will receive a fee for services rendered
in connection with the sale of the property of $105,000. The Partnership will
receive the remaining proceeds of approximately $10,185,000, less closing
costs. Of such proceeds, an amount not to exceed $250,000 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 3
other properties to the purchaser.
The closing is subject to the satisfaction of numerous terms and conditions.
There can be no assurance that all of the terms and conditions will be complied
with and, therefore, it is possible the sale of the property may not occur.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
- ----------------------------------------------------------------------
(A) FINANCIAL STATEMENTS AND EXHIBITS:
None
(B) PRO FORMA FINANCIAL INFORMATION:
None
(C) EXHIBITS:
(2) Agreement of Sale and attachment thereto relating to the
sale of Oxford Square Apartments, Casselberry, Florida.
No information is required under Items 1, 3, 4, 5, 6 and 8 and these items
have, therefore, been omitted.
<PAGE>
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 PENSION INVESTORS - I
By: Balcor Equity Partners-I, an Illinois
general partnership, its general
partner
By: The Balcor Company, a Delaware corporation,
a partner
By: /s/ Jerry M. Ogle
------------------------------------
Jerry M. Ogle, Vice President
and Secretary
Dated: July 19, 1996
<PAGE>
Oxford Square
AGREEMENT OF SALE
THIS AGREEMENT, entered into as of the 5th day of July, 1996, by and
between TGM Realty Corp. #5, a Delaware corporation ("Purchaser") and Roclab F
Investors, an Illinois limited partnership ("Seller").
WITNESSETH:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to
sell at the price (the "Purchase Price") of Ten Million Five Hundred Thousand
and No/100 Dollars ($10,500,000.00), all of the following property
(collectively, the "Property"):
A. That certain parcel of real property commonly known as Oxford
Square Apartments, Casselberry, Florida, more particularly described
on Exhibit A attached hereto (the "Land");
B. All equipment, furnishings and other tangible personal property
owned by Seller placed or installed on or about the Land or
Improvements now or prior to "Closing" (as such term is defined in
Section 8 hereof) and used as part of or in connection with the Land
and Improvements, including, the personal property set forth on
Exhibit B but excluding any computer hardware and software (other
than computer discs containing data files) (collectively, the
"Personal Property"), which Personal Property shall be transferred to
Purchaser at Closing by a Bill of Sale in the form of Exhibit H
attached hereto;
C. All rights and appurtenances pertaining to the Land, including,
without limitation, any and all rights of Seller in and to all air and
development rights, roads, alleys, easements, streets and ways adjacent to
the Land, rights of ingress and egress thereto, any strips and gores
within or bounding the Land and in profits or rights or appurtenances
pertaining to the Land;
D. The buildings and all other improvements, structures and
fixtures placed, constructed or installed on the Land (collectively, the
"Improvements");
E. All leases, licenses and other occupancy agreements
(collectively, the "Leases") covering space situate at or within the Land
and Improvements and any claim or right to claim against a tenant or
occupant (collectively, the "Tenants") under any existing Lease and all
security deposits paid or deposited by Tenants in respect of the Leases;
F. All of Seller's rights in and contractual rights and intangibles
with respect to the operation, maintenance and repair of the Land and
Improvements, including service and maintenance agreements, construction,
material and labor contracts, utility agreements and other contractual
arrangements, all to the extent designated by the provisions of this
Agreement (collectively, the "Contracts"); assignable governmental
<PAGE>
permits, licenses, certificates and approvals in connection with the
ownership of the Property (collectively, the "Licenses") and warranties of
any contractor, manufacturer or materialman;
G. Seller's right, if any, to the use of the trade name "Oxford
Square Apartments" (the "Trade Name") in connection with the Property;
H. The right, if assignable, to the use of all telephone numbers
used by Seller at the Property; and
I. All rights to any award made or to be made or settlement in lieu
thereof for damage to the Land or Improvements by reason of condemnation,
eminent domain, exercise of police power or change of grade of any street
in accordance with the terms herein.
2. PURCHASE PRICE. The Purchase Price shall be paid as follows:
A. Upon the execution of this Agreement, the sum of $300,000 (said
sum, together with all interest accrued thereon, is herein called the
"Earnest Money") payable to the "Escrow Agent" (as defined in the Escrow
Agreement) to be held in escrow 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 to the Escrow Agent's
account prior to 11:00 A.M. Eastern Time.
3. TITLE COMMITMENT AND SURVEY.
A. Seller has delivered to Purchaser a title commitment ("Title
Commitment") for an ALTA Owner's Policy (10/17/92) with extended coverage
("Title Policy") issued by Lawyers Title Insurance Corporation ("Title
Insurer"). In addition, Seller has delivered to Purchaser copies of all
items and documents referred to in the Title Commitment (collectively, the
"Backup Documents"). The Title Policy issued to Purchaser at Closing will
be in the amount of the Purchase Price subject only to the title
exceptions agreed to by Purchaser and Seller as provided for in Paragraph
3C below and any other title exceptions accepted by Purchaser in writing
(collectively, the "Permitted Exceptions"). Seller shall be obligated to
remove each of the requirements set forth on Schedule B Section 1 of the
Title Commitment. On the Closing Date, Seller shall cause the Title
Insurer to issue to Purchaser the Title Policy or a "marked up" commitment
in conformity with the requirements in this Agreement for the Title
Policy. The costs of the Title Policy will be paid pursuant to Paragraph
5 of this Agreement.
B. Purchaser acknowledges receipt of a survey ("Survey") of the
Land and the Improvements prepared by Blount Sikes & Associates. Prior to
the Closing, Seller will have the Survey certified to Purchaser or its
designee and the Title Insurer, which certificate shall be in a form
agreed to by Purchaser, Seller and the surveyor prior to the expiration of
the Inspection Period. All costs relating to recertifying the Survey
will be paid pursuant to Paragraph 5 of this Agreement.
<PAGE>
C. Purchaser shall have until the "Inspection Period Expiration
Date" (as hereinafter defined) to examine the condition of title and the
Survey and to approve or disapprove the same, including, without
limitation, determining whether Purchaser is satisfied with: (a) the title
endorsements which the Title Insurer will make available to Purchaser; and
(b) the certificate from the surveyor on the Survey. If Purchaser and
Seller agree on the condition of title and the Survey, then Purchaser and
Seller shall, on or prior to the Inspection Period Expiration Date, enter
into a writing setting forth the title exceptions which are acceptable to
Purchaser and Seller and stating that the Survey is acceptable to
Purchaser. If Purchaser and Seller have not entered into such a writing
on or before the Inspection Period Expiration Date, then this Agreement
shall automatically terminate without any further action of the parties,
all Earnest Money shall be immediately refunded to Purchaser, and
thereupon the parties hereto shall have no further obligations one to the
other under this Agreement. Notwithstanding anything contained herein to
the contrary, in no event will any of the following items be Permitted
Exceptions: (i) any documents or items evidencing or securing Seller's
existing financing of the Property; (ii) judgment liens against Seller
relating to the Property; and/or (iii) any mechanics liens recorded
against the Property.
4. CONDITION OF TITLE/CONVEYANCE. Seller agrees to convey fee simple
title to the Property by Special Warranty Deed ("Deed") in the form of Exhibit
D attached hereto and in recordable form subject only to the Permitted
Exceptions. If Seller is unable to convey title to the Property subject only
to the Permitted Exceptions because of the existence of any other title
exception ("Unpermitted Exception"), the Purchaser can elect to take title to
the Property subject to the Unpermitted Exception or terminate this Agreement.
Notwithstanding anything contained herein to the contrary, if there shall be
any Unpermitted Exceptions which (i) were caused by, resulted from or arose out
of (a) a default by Seller of any of its obligations under this Agreement,
including but not limited to Seller's failure to pay real estate taxes, or (b)
Seller creating or suffering to exist any lien, charge or encumbrance on the
Property, including, but not limited to the grant by Seller to any person or
entity of a mortgage, deed of trust or other security interest affecting the
Property, judgments which are a lien against the Property or any lien, charge
or encumbrance resulting from any other affirmative act of Seller, including,
without being limited to, the performance of work on behalf of, or with the
express written consent of, Seller upon all or any portion of the Property,
then, for a period of sixty (60) days, Seller shall take all such actions as
may be necessary (including, without limitation, the commencement of and the
diligent prosecution of legal proceedings and the payment of money) to remove
such Unpermitted Exceptions, or cause the Title Insurer to issue a title
indemnity to Purchaser in form and substance reasonably satisfactory to
Purchaser, insuring against loss or damage or (ii) are not of the type
described in clause (i) of this sentence, but are removable by the payment of a
definite or ascertainable sum not to exceed, in the aggregate, $25,000.00
(hereinafter referred to as the "Maximum Amount"), then Seller shall cause such
Unpermitted Exceptions to be removed from the Title Policy, or cause the Title
Insurer to issue a title indemnity to Purchaser in form and substance
reasonably satisfactory to Purchaser, insuring against loss or damage.
<PAGE>
If Seller fails to remove any Unpermitted Exceptions in accordance with the
provisions of this paragraph or if there exists any Unpermitted Exception which
Seller is not obligated to remove pursuant to clause (ii) above because payment
of funds in excess of the Maximum Amount would be required to cure the same,
Purchaser, nevertheless, may elect (at or prior to the Closing) to consummate
the transaction provided for herein subject to any such Unpermitted Exception
as may exist as of the Closing with a credit against the Purchase Price equal
to (a) the sum necessary to remove such Unpermitted Exceptions which can be
satisfied by a liquidated amount, and (b) the reasonably estimated reduction in
the fair market value of the Property resulting from any Unpermitted Exceptions
which cannot be satisfied by the payment of a liquidated amount (not to exceed
the Maximum Amount solely for Unpermitted Exceptions of the type described in
clause (ii) above; provided, however, if Purchaser makes such election,
Purchaser shall not be entitled to any other credit, nor shall Seller bear any
further liability, with respect to any Unpermitted Exceptions of the type
described in clause (ii) above). If Purchaser shall not so elect, Purchaser
shall be deemed to have elected to terminate this Agreement, in which case, the
Earnest Money plus all accrued interest shall be delivered to Purchaser and,
subject to the survival provisions of Paragraphs 15 and 16 herein, neither
party shall have any further liability hereunder.
5. PAYMENT OF CLOSING COSTS. Purchaser and Seller shall each pay
one-half (1/2) of all costs related to the Title Commitment and the Title
Policy (including without limitation premium, title search fees, the costs of
extended coverage on the Title Policy and the costs of those endorsements
identified on Exhibit E attached hereto [Purchaser shall be responsible to pay
for any additional endorsements]), the Survey (including the recertifying of
the Survey), the Title Insurer's escrow fees not to exceed $550, transfer
taxes, if any, recording charges for the Deed, and the cost of the "UCC Search"
(as hereinafter defined) (collectively, "Closing Costs"). Notwithstanding the
aforesaid, each party hereunder shall pay its own attorneys' fees.
6. DAMAGE, CASUALTY AND CONDEMNATION.
A. If the Property suffers damage as a result of any casualty prior
to the Closing Date and can be repaired or restored for $200,000 or less,
then Purchaser shall accept the Property in its damaged condition together
with a credit at Closing in the amount of the damaged Property. If the
Property suffers damage as a result of any casualty prior to the Closing
Date and cannot be repaired or restored for $200,000 or less, then, at
Purchaser's election to be exercised within ten (10) days after Purchaser
is notified of such casualty, this Agreement shall be terminated.
B. If condemnation proceedings ("Proceedings") have been instituted
against the Property or any governmental authority shall take any steps
preliminary thereto (by the giving of a written notice of intent to
institute such proceedings), 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 Seller notifies Purchaser of the Proceedings.
<PAGE>
C. If this Agreement is terminated pursuant to Paragraphs 6a or 6b
hereof, then all Earnest Money plus the interest accrued thereon shall be
returned to Purchaser and, subject to the survival provisions of
Paragraphs 15 and 16 herein, neither party shall have any further
liability hereunder.
7. AS-IS CONDITION.
A. Except as specifically set forth otherwise in this Agreement,
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 last day of
Purchaser's inspection of the Property, subject to reasonable wear and
tear from such date until the Closing Date. Without limiting the
foregoing, Purchaser acknowledges that, except as may otherwise be
specifically set forth elsewhere in this Agreement, neither Seller nor its
consultants or agents have made any other representations or warranties of
any kind upon which Purchaser is relying as to any matters concerning the
Property, including, but not limited to, the condition of the Land or any
Improvements, the existence or nonexistence of asbestos, toxic waste or
any hazardous material, 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 substances on, or environmental conditions of, the Property,
provided that nothing in this Section 7 shall constitute a release of
Seller with respect to any representations or warranties expressly set
forth in this Agreement. 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,
<PAGE>
approvals, plans, rules, regulations or ordinances adopted, or other
criteria and guidelines promulgated pursuant to the preceding laws or
other similar federal, state or local laws, regulations, rules or
ordinance now or hereafter in effect relating to environmental matters
(collectively the "Environmental Laws"); and (ii) any other substances,
constituents or wastes subject to any applicable federal, state or local
law, regulation or ordinance, including any Environmental Law, now or
hereafter in effect, including but not limited to (A) petroleum, (B)
refined petroleum products, (C) waste oil, (D) waste aviation or motor
vehicle fuel 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.
B. If the Property suffers damage from a casualty prior to the
Closing Date, but is discovered by Purchaser within 90 days after the
Closing Date, then Seller shall promptly file a claim with its insurance
carrier and will assign the proceeds of that claim to Purchaser and pay
Purchaser the amount of the deductible on its policy.
C. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods
of time in which Seller owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at
Purchaser's request solely as illustrative material. Seller makes no
representation or warranty that such material is complete or accurate or
that Purchaser will achieve similar financial or other results with
respect to the operations of the Property, it being acknowledged by
Purchaser that Seller's operation of the Property and allocations of
revenues or expenses may be vastly different than Purchaser may be able to
attain. Purchaser acknowledges that it is a sophisticated and experienced
purchaser of real estate and further that Purchaser will rely upon its own
investigation and inquiry with respect to the operation of the Property
and releases Seller from any liability with respect to such historical
information.
8. CLOSING. The closing ("Closing") of this transaction shall be on
August 1, 1996 or on such other date mutually agreed upon by the parties
("Closing Date"), at which time Seller shall deliver possession of the Property
to Purchaser in accordance with this Agreement. Closing shall occur at the
offices of Purchaser's counsel. The parties acknowledge and agree the Closing
will be a "New York Style" Closing such that Seller will receive the Purchase
Price on the Closing Date upon (i) Seller's unconditional delivery of the
documents set forth in Paragraph 9(b) herein, and (ii) the Title Insurer's
delivery to Purchaser of the Title Policy or a "marked-up" commitment in
conformity with the requirements in this Agreement for the Title Policy.
<PAGE>
9. CLOSING DOCUMENTS.
A. On the Closing Date, Purchaser shall deliver to Seller an
executed closing statement prepared by the Title Insurer and approved by
Purchaser, the Assignment and Assumption of Service Contracts in the form
of Exhibit G attached hereto, the Assignment and Assumption of Leases in
the form of Exhibit H attached hereto, the notice to the Tenants in the
form of Exhibit I attached hereto, the Post-Closing Adjustment Letter in
the form of Exhibit J attached hereto, the balance of the Purchase Price
(after crediting the Earnest Money), 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
possession of the Property in accordance with this Agreement; and
duplicate originals of all of the following: the Deed (in the form of
Exhibit D attached hereto) subject only to the Permitted Exceptions and
those Unpermitted Exceptions waived in writing by Purchaser, if any, which
Deed shall contain the legal description in conformity with the legal
description shown on the final Survey; an inventory of the Personal
Property which shall include all Personal Property set forth on Exhibit B
and a Bill of Sale for the same (in the form of Exhibit F attached
hereto); an executed closing statement prepared by the Title Insurer and
approved by Purchaser; an executed Assignment and Assumption of Service
Contracts (in the form of Exhibit G attached hereto) together with
originals (or copies if originals are not in Seller's possession) of all
instruments evidencing the rights assigned; an executed Assignment and
Assumption of Leases (in the form of Exhibit H attached hereto) together
with originals of all Leases assigned (which Leases will be at the
managing agent's office at the Property); an updated rent roll certified
by Seller to be correct; a notice to the Tenants of the transfer of title
(in the form of Exhibit I attached hereto, which notice shall be delivered
to the Tenants by Purchaser); a non-foreign affidavit (in the form of
Exhibit K attached hereto); the Post-Closing Adjustment Letter dated as of
the Closing Date (in the form of Exhibit J annexed hereto); an assignment
of intangibles (in the form of Exhibit L annexed hereto); an assignment of
the Licenses (in the form of Exhibit M annexed hereto), together with
originals or copies of originals which are not in Seller's possession, of
all instruments evidencing the rights assigned; an assignment of all
existing assignable warranties and guarantees (the "Assignment of
Warranties and Guarantees") relating to the Property dated as of the
Closing Date (in the form of Exhibit N annexed hereto), together with
available originals or copies if originals are not in Seller's possession,
of all instruments evidencing the rights assigned, the Information for
Real Estate 1099-S Report Filing (in the form of Exhibit O annexed
hereto); an acknowledgement of receipt of the Information for Real Estate
1099-S Report Filing by the Title Insurer (in the form of Exhibit P
attached hereto); evidence acceptable to the Title Insurer, authorizing
the consummation by Seller of the transaction which is the subject of this
Agreement and the execution and delivery of all documents on behalf of
Seller; all keys and combinations to all locks on the Improvements which
will be at the Property; all plans, specifications, mechanical, electrical
and plumbing layouts, operating manuals, purchase orders, brochures,
<PAGE>
marketing materials and advertisements which are owned by Seller and are
located at the Property, Tenant lease files, and other files and records
in the possession of Seller at the leasing office at the Property and
Seller's managing agent (including, without limitation, hard copy print
outs of the information contained on the computer data discs delivered to
Purchaser at Closing) and utilized in connection with the operation and
maintenance of the Land and Improvements; current tax bills and, if
available, to the extent in Seller's possession, tax bills for each of the
years of Seller's ownership of the Property; a certificate from Seller
that no proceeding for the reduction of real or personal property taxes is
on-going as of the Closing Date; affidavits and certificates as to facts
within the knowledge of Seller as required by the Title Insurer as to the
condition of title or the due performance by Seller of its obligations
under this Agreement, the Title Policy or the "marked-up" commitment for
the Title Policy in conformity with the requirements in this Agreement;
UCC searches conducted by a UCC search company reasonably acceptable to
Purchaser at the County and State level, searching Seller's name, the name
of any other entity which may have owned the Property during the past five
(5) years and the Trade Name, dated to a date not more than thirty (30)
days prior to the Closing evidencing that no portion of the Personal
Property is subject to any UCC filing (the "UCC Search") unless a UCC-3
Termination Statement for same has been provided for at the Closing;
telephone transfer form; 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.
C. Seller shall deliver to Alan Linder, not less than five (5) days
prior to the Closing Date, execution originals of all of the conveyance
documents which are to be executed by Purchaser.
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, INCLUDING ITS OBLIGATIONS TO MAKE ALL
DEPOSITS ON OR BEFORE THE DATES PROVIDED FOR HEREIN. IN THE EVENT THE CLOSING
DOES NOT OCCUR AS A RESULT OF ANY DEFAULT OF PURCHASER UNDER THE PROVISIONS OF
THIS AGREEMENT, SELLER SHALL RETAIN ALL OF THE EARNEST MONEY AND THE INTEREST
THEREON AS LIQUIDATED DAMAGES, AND AS SELLER'S SOLE RIGHT TO DAMAGES OR ANY
OTHER REMEDY. THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES, IN THE
EVENT OF A DEFAULT BY PURCHASER, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICAL TO
DETERMINE. THEREFORE, BY PLACING THEIR INITIALS BELOW, THE PARTIES ACKNOWLEDGE
THAT THE EARNEST MONEY HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES'
REASONABLE ESTIMATE OF SELLER'S DAMAGES.
11. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
INABILITY TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT, PURCHASER' S SOLE
REMEDY SHALL BE THE RETURN OF ALL EARNEST MONEY TOGETHER WITH ANY INTEREST
ACCRUED THEREON, PLUS ACTUAL DAMAGES NOT TO EXCEED $150,000.00, AND, SUBJECT TO
THE SURVIVAL PROVISIONS OF PARAGRAPHS 15 AND 16 HEREIN, THIS AGREEMENT SHALL
TERMINATE AND THE PARTIES SHALL HAVE NO FURTHER LIABILITY TO EACH OTHER AT LAW
<PAGE>
OR IN EQUITY. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF
SELLER'S DEFAULT IS ITS REFUSAL TO DELIVER THE DEED OR ANY OF THE OTHER
DOCUMENTS ENUMERATED IN PARAGRAPH 9(b) OF THIS AGREEMENT, THEN PURCHASER WILL
BE ENTITLED TO SUE FOR SPECIFIC PERFORMANCE.
12. PRORATIONS. The following are to be prorated or adjusted (as
appropriate), as of 11:59 P.M. on the day preceding the Closing Date (the
"Proration Date"):
A. Rents, as and when collected. If as of the Proration Date there
are rents owed by Tenants for the month in which the Closing occurs, then
the first monies received from said Tenant or Tenants shall be received on
account of or in payment of such past due rents and (i) if Purchaser
receives said past due rents, Seller's aforesaid share thereof shall be
remitted by Purchaser to Seller within three (3) business days, and (ii)
if Seller receives such past due rents, Purchaser's aforesaid share
thereof shall be remitted by Seller to Purchaser within three (3) business
days. With respect to any arrears for periods prior to the month in which
the Closing occurs, Purchaser shall pay such arrears to Seller as and when
collected from the monies received from such Tenant provided such Tenant
is otherwise current in its rent. With respect to rents for any period
subsequent to the month in which the Closing occurs that may be received
by Seller, Seller shall promptly remit such rents to Purchaser.
B. Real estate and personal property taxes, if any, on the basis of
the fiscal year for which assessed and in which the Proration Date occurs.
If the Closing shall occur before the tax rate or assessment is fixed for
the fiscal year in which the Closing occurs, then the apportionment of
such real estate and personal property taxes at the Closing shall be upon
the basis of an assessed value of the Property equal to $9,326,320 and no
change in millage.
C. Water, sewer charges, electricity and gas on the basis of the
most recent bills available, but if there are meters on the Property,
Seller, to the extent the same is obtainable, shall obtain a reading
effective as of the Proration Date.
D. Tax and utility company deposits, if any, and if assignable and
assigned.
E. Fuel, if any, based on a fuel company letter showing measurement
no more than two (2) days prior to Closing and valued at current prices.
F. Amounts paid or payable in respect of any Contracts assigned to
Purchaser, including, but not limited to, any up-front "bonus" payments
made in consideration of entering into any Contract, net of any
commissions paid by Seller (which up-front "bonus" payments, if any, shall
be prorated based upon the unexpired term of the Contract; provided,
however, such bonus payments shall only be prorated if actually received
by Seller and only to the extent any fee was not used to improve the
applicable facilities at the Property related to the applicable contract);
<PAGE>
G. Purchaser shall receive a credit against the cash due at Closing
in an amount equal to all refundable Tenants security deposits and accrued
interest to which Tenants may be entitled pursuant to the Leases which are
to be assigned to Purchaser at the time of Closing.
H. If, at Closing, the Property or any part thereof shall be or
shall have been affected by an assessment or assessments which are or may
become payable in installments, then for purposes of this Agreement, all
unpaid installments of any such assessment, including those which are to
become due and payable and to be liens upon the Property shall be paid and
discharged by Purchaser. In addition, the parties agree to prorate any
prepaid assessments at Closing.
I. If such prorations result in a payment due Purchaser, then the
portion of the Purchase Price payable at Closing shall be reduced by such
sum.
J. If such prorations result in a payment due Seller, then the same
shall be paid to Seller in addition to the portion of the Purchase Price
payable at Closing.
K. The parties hereto shall endeavor to prepare a schedule of
prorations no less than one (1) Business Day prior to Closing.
L. The parties hereto shall correct any arithmetic errors in
prorations as soon after the Closing as amounts are finally determined.
The parties hereto shall enter into the Post-Closing Adjustment Letter at
the Closing in the form of Exhibit J annexed hereto.
M. Except as set forth in Paragraph 12(b) hereof, 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.
Except with reference to arithmetic errors, all prorations will be final.
N. The provisions of this Paragraph 12 shall survive the Closing.
13. RECORDING. This Agreement shall not be recorded and the act of
recording by Purchaser shall be an act of default hereunder by Purchaser
and shall be subject to the provisions of Paragraph 10.
14. ASSIGNMENT. Purchaser shall have the right to assign its interest in
this Agreement, provided such assignment is effected at least five (5)
days prior to the Closing Date. In the event of any such assignment,
Seller agrees to deliver any documents referred to in this Agreement to
Purchaser's designee and agrees that all surviving representations and
warranties of Seller hereunder shall be deemed to run in favor of, and be
enforceable by said designee as if it were Purchaser hereunder. Upon any
assignment, Purchaser agrees that it shall continue to be bound by all of
Purchaser's indemnities under this Agreement. The provisions of this
Paragraph shall survive the Closing.
<PAGE>
15. BROKER. The parties hereto acknowledge that CB Commercial Real
Estate Group ("Broker") is the only real estate broker involved in this
transaction. Purchaser has not paid and will not pay at any time before, at or
after the Closing, any fee, commission or compensation whatsoever to any person
whomsoever directly or indirectly on account of this Agreement, its
negotiation, or the sale hereby contemplated. Seller agrees to pay Broker a
commission or fee ("Fee") pursuant to a listing agreement between Seller and
Broker. Seller represents that this Fee is due and payable only from the
proceeds of the Purchase Price received by Seller. 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 partner, parent or affiliate (each of the above is individually
referred to as a "Seller Indemnitee") from all claims, including attorneys'
fees and costs incurred by a Seller Indemnitee as a result of anyone (other
than Broker) claiming by or through Purchaser, as a result of Purchaser's
actions, 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 reasonable approval of defense
counsel selected by Purchaser. 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
claiming by or through Seller, as a result of Seller's actions, including but
not limited to Broker, 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 reasonable selection
of defense counsel. The provisions of this Paragraph will survive the Closing
and delivery of the Deed and any prior termination of this Agreement.
16. INSPECTION OF PROPERTY.
A. During the period (the "Inspection Period") commencing on the
date hereof and ending at 5:00 p.m. Chicago time on July 15, 1996 (said
date of expiration of the Inspection Period being referred to herein as
the "Inspection Period Expiration Date"), Purchaser and the agents,
engineers, employees, contractors and surveyors retained by Purchaser may
enter upon the Property, at any reasonable time and upon reasonable prior
notice to Seller, to inspect the Property, including a review at the
Property of the Leases and to conduct and prepare such studies, tests and
surveys as Purchaser may deem reasonably necessary and appropriate. In
connection with Purchaser's review of the Property, Seller agrees to
deliver to Purchaser copies of the current rent roll for the Property, the
most recent tax and insurance bills, utility account numbers, service
contracts and unaudited year end 1994 and 1995 operating statements.
During the Inspection Period, Seller will reasonably cooperate with
Purchaser in its inspection of the Property including, but not limited to,
furnishing (or making available) to Purchaser such information, materials
and documents which Purchaser may reasonably request and which are in
Seller's possession.
<PAGE>
B. Except as set forth in Section 5 hereof, all of the foregoing
tests, investigations and studies to be conducted under this Paragraph 16
by Purchaser shall be at Purchaser's sole cost and expense, and Purchaser
shall restore the Property substantially 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 to the
extent caused by Purchaser's investigations and inspection of the
Property. Purchaser shall undertake its obligation to defend set forth in
the preceding sentence using attorneys selected by Purchaser and
reasonably acceptable to Seller.
C. If Purchaser is dissatisfied with the results of the tests,
studies or investigations performed or information received pursuant to
this Paragraph 16, in Purchaser's sole judgment for any reason or for no
reason, Purchaser shall have the right to terminate this Agreement by
giving written notice of such termination to Seller at any time prior to
the expiration of the Inspection Period. If written notice is not given
by Purchaser pursuant to this Paragraph 16 prior to the expiration of the
Inspection Period, then the right of Purchaser to terminate this Agreement
pursuant to this Paragraph 16 shall be waived. If Purchaser terminates
this Agreement by written notice to Seller prior to the expiration of the
Inspection Period: (i) Purchaser shall promptly deliver to Seller copies
of all studies, reports and other investigations obtained by Purchaser and
prepared by third parties (to the extent that such delivery shall not
constitute a breach of contract) in connection with its due diligence
during the Inspection Period; (ii) the Earnest Money deposited by
Purchaser shall be immediately paid to Purchaser, together with any
interest earned thereon and (iii) this Agreement shall terminate 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
16. Notwithstanding anything contained herein to the contrary,
Purchaser's obligation to indemnify Seller and restore the Property, as
more fully set forth in this Paragraph 16, shall survive the Closing, the
delivery of the Deed and the termination of this Agreement.
17. SELLER'S REPRESENTATIONS AND WARRANTIES AND LIABILITY.
A. Any reference herein to Seller's knowledge or to the best of
Seller's knowledge or to any representation, warranty or notice of any
matter or thing, shall only mean such knowledge or notice that has
actually been received by Phillip Schechter, and any representation or
warranty of the Seller is based upon those matters of which Phillip
Schechter 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 or the individual partners or the general partner of
Seller.
<PAGE>
B. Subject to the limitations set forth in Paragraph 17a above,
Seller hereby makes the following representations and warranties, all of
which are made to the best of Seller's knowledge, each of which shall be
deemed made as of the Closing and survive the Closing and delivery of the
Deed for ninety (90) days except for subparagraphs (vi) and (vii) which
shall survive for the statutory period:
(i) The present use and occupancy of the Property conform with
applicable building and zoning laws and Seller has received no notice
that any such laws, rules or regulations are being violated.
(ii) The rent rolls which Seller has submitted to Purchaser and
updated as of the Closing Date are true and accurate.
(iii) Except as set forth on Exhibit Q, Seller has no knowledge
of any pending or threatened litigation, claim, cause of action or
administrative proceeding concerning the Property.
(iv) There are no real estate tax protests or proceedings
affecting the Property.
(v) Seller has received no written notice of any pending or
threatened condemnation or similar proceeding or pending public
improvements in or adjoining the Land which will in any manner affect
the Property.
(vi) Each person executing and delivering this Agreement and all
documents to be executed and delivered in regard to the consummation
of the transaction which is the subject of this Agreement on behalf
of Seller represents to Purchaser that he has due and proper
authority to execute and deliver same. Seller has the full right,
power and authority to sell and convey the Property to Purchaser as
provided herein and to carry out its obligations hereunder. The
consummation by Seller of the transaction which is the subject of
this Agreement will not conflict with or result in a breach of any of
the terms of any agreement or instrument to which Seller is a party
or by which Seller is bound or constitute a default thereunder. No
other party has any right to purchase the Property, or any part
thereof.
(vii) Neither Seller nor any of Seller's general partners is the
subject of any existing, pending, threatened or contemplated
bankruptcy, solvency or other debtor's relief proceeding.
(viii) Seller does not have any employees at the Property.
C. As a condition precedent to Purchaser's obligations at Closing,
all representations and warranties provided in this Agreement to be made
by Seller as of the Closing shall be true as of the Closing.
<PAGE>
18. LIMITATION OF SELLER'S LIABILITY. No general or limited partner of
Seller, nor any of its respective beneficiaries, shareholders, partners,
officers, agents, employees, heirs, successors or assigns shall have any
personal liability of any kind or nature for or by reason of any matter or
thing whatsoever under, in connection with, arising out of or in any way
related to this Agreement and the transaction 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. However, this provision shall not preclude
Purchaser from instituting and maintaining any legal action against Seller.
Seller shall not distribute $250,000 of the net proceeds of the Purchase Price
to its partners until ninety (90) days after the Closing Date.
19. TIME OF ESSENCE. Time is of the essence of this Agreement.
20. NOTICES. Any notice or demand which either party hereto is required
or may desire to give or deliver to or make upon the other party shall be in
writing signed by the party giving the same or by its attorneys and may be
personally delivered or given or made by overnight courier such as Federal
Express or by facsimile or made by United States registered or certified mail
addressed as follows:
TO SELLER: c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attn: Ilona Adams
847/267-1600
847/317-4462 (FAX)
with copies to: The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attn: Al Lieberman
847/317-4360
847/317-4462 (FAX)
and
Andrew D. Small Esq.
Katten Muchin & Zavis
Suite 1600
525 West Monroe Street
Chicago, Illinois 60661
312/902-5489
312/902-1061 (FAX)
<PAGE>
TO PURCHASER: Mr. Thomas Gochberg
c/o TGM Associates L.P.
650 Fifth Avenue
28th Floor
New York, New York 10153
212/830-9300
212/399-6310 (FAX)
with a copy to: Alan E. Linder, Esq.
Bachner, Tally, Polevoy & Misher LLP
380 Madison Avenue
New York, New York 10017-2590
212/503-2090
212/682-5729 (FAX)
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be deemed
to be delivered or made on the next business day if sent by overnight courier,
or on the same day if sent by facsimile 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.
21. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute
three (3) counterparts of this Agreement and three (3) counterparts of the
Escrow Agreement and forward them to Seller for Seller's execution. Seller
will forward one (1) fully executed counterpart of the executed Agreement to
Purchaser's attorneys and will forward the following to the Escrow Agent:
A. One (1) fully executed copy of this Agreement; and
B. Three (3) copies of the Escrow Agreement signed by the parties
with a direction to execute two (2) counterparts of the Escrow Agreement
and deliver a fully executed counterpart to Purchaser's attorneys and
Seller.
Purchaser shall deliver the Earnest Money to Escrow Agent on the same day that
Purchaser executes the Escrow Agreement. If Purchaser's attorney has not
received one fully executed counterpart of this Agreement and the Escrow
Agreement within four (4) business days after Purchaser delivers the Earnest
Money to Escrow Agent, then at Purchaser's election, the Earnest Money and the
executed counterparts of this Agreement shall be returned to Purchaser.
22. GOVERNING LAW. The provisions of this Agreement shall be governed by
the laws of the State of Florida.
<PAGE>
23. ENTIRE AGREEMENT. This Agreement and the attached Exhibits
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersedes all other negotiations, understandings and
representations made by and between the parties and the agents, servants and
employees.
24. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
25. CAPTIONS. Paragraph or Exhibit titles or captions contained herein
are inserted as a matter of convenience and for reference, and in no way
define, limit, extend or describe the scope of this Agreement or any provision
hereof.
26. MODIFICATIONS. This Agreement cannot be changed, modified,
discharged or terminated by any oral agreement or any other agreement and there
cannot be any waiver of the warranties, representations and covenants expressly
contained in this Agreement unless the same is in writing and signed by the
party against whom enforcement of the change, modification, discharge,
termination or waiver is sought.
27. SUCCESSORS AND ASSIGNS. This Agreement shall be binding on, and the
benefits hereof shall inure to, the successors and assigns of the parties
hereto.
28. INVALIDITY. If any term or provision of this Agreement, or any part
of such term or provision, or the application thereof to any person or
circumstance shall to any extent be held invalid or unenforceable, the
remainder of this Agreement or the application of such term or provision or
remainder thereof to persons or circumstances other than those as to which it
is held invalid and unenforceable shall not be affected thereby and each term
and provision of this Agreement shall be valid and enforceable to the fullest
extent permitted by law.
29. EXHIBITS. All Exhibits which are annexed to this Agreement are part
of this Agreement and are incorporated herein by reference.
30. NO THIRD PARTY BENEFICIARY. The provisions of this Agreement are for
the sole benefit of the parties to this Agreement and their successors and
assigns and shall not give rise to any rights by or on behalf of anyone other
than such parties.
31. ATTORNEYS' FEES. In the event that any litigation arises under this
Agreement, the prevailing party shall be entitled to recover, as a part of its
judgment, reasonable attorneys' fees.
32. CORRECTION DEED. Seller will, whenever reasonably requested so to do
by Purchaser, execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, a correction deed as may be reasonably necessary in
order to complete the transaction which is the subject of this Agreement and to
carry out the intent and purposes of this Agreement. Such correction deed
shall be satisfactory to the attorneys for Purchaser. The provisions of this
Paragraph shall survive the Closing.
<PAGE>
33. BUSINESS DAYS. If the date for performance of any act pursuant to
the Agreement is not a Business Day, then such act shall be performed on the
next succeeding Business Day. The term "Business Days" shall mean all days,
except Saturdays, Sundays and all days observed by the Federal Government as
legal holidays.
34. OPERATIONS PRIOR TO CLOSING. Seller agrees that between the date
hereof and the Closing Date, Seller will:
A. continue to operate the Property as heretofore operated;
B. afford Purchaser and its representatives full access to the
Property and to Seller's books, records and files relating to and
maintained at the Property, at reasonable times, upon forty- eight (48)
hours prior notice and during normal business hours, including but not
limited to the date of the Closing;
C. not enter into any new Lease, nor amend, modify or terminate
any existing Lease without having obtained the prior written consent of
Purchaser in each such instance; notwithstanding the foregoing, Seller may
enter into Leases of not more than one year upon market rents and upon
commercially reasonable terms;
D. not apply any Tenant's security deposits to the discharge of
such Tenant's obligations unless such Tenant has vacated or been evicted
from such Tenant's demised premises;
E. advise Purchaser promptly of any litigation or governmental
proceeding to which Seller becomes a party affecting the Property (it
shall be a condition precedent to Purchaser's obligation to accept title,
that there shall be no such litigation or proceeding pending at Closing
having a potential adverse effect upon the Property or Seller's ability to
convey the Property to Purchaser);
F. not permit any alteration, structural modification or additions
to the Property;
G. not create (or agree to create) any exception to or covenant,
restriction, easement or other lien on the Property; and
H. not enter into any new Contract, nor amend, modify or terminate
any existing Contract.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth above.
Executed by Purchaser on
July 2, 1996.
PURCHASER:
TGM REALTY CORP. #5, a Delaware corporation
By: /s/Thomas Gochberg
---------------------------------
Name: Thomas Gochberg
---------------------------------
Title: President
---------------------------------
Executed by Seller on
July 5, 1996.
SELLER:
ROCLAB F INVESTORS, an Illinois
limited partnership
By: Balcor Equity Partners-I, an Illinois
general partnership, its general partner
By: The Balcor Company, a Delaware
corporation, a general partner
By: /s/Phillip A. Schechter
---------------------------------
Name: Phillip A. Schechter
---------------------------------
Title: Authorized Agent
---------------------------------
<PAGE>
of CB Commercial Real Estate Group, ("Broker") executes this
Agreement in its capacity as a real estate broker and acknowledges that the fee
or commission ("Fee") due it as a result of the transaction described in this
Agreement is the amount as set forth in the listing agreement between Broker
and Seller. Such Fee and any other amounts due Broker shall be paid solely by
Seller, and Purchaser shall have no liability whatsoever to Broker under any
circumstances, whether or not the Closing occurs. Broker also acknowledges
that payment of the aforesaid Fee is conditioned upon the Closing and the
receipt of the Purchase Price by Seller. Broker agrees to deliver a receipt to
Seller at the Closing for the Fee and a release stating that no other fees or
commissions are due to Listing Broker from Seller or Purchaser. A copy of
broker's receipt and release will be delivered to Purchaser at the Closing.
CB COMMERCIAL REAL ESTATE GROUP
By:
--------------------------------
Tax I.D. Number:
--------------------
<PAGE>
EXHIBITS
A - Legal
B - Personal Property
C - Escrow Agreement
D - Deed
E - Endorsements
F - Bill of Sale
G - Assignment of Service Contracts
H - Assignment of Leases and Security Deposits
I - Notice to Tenants
J - Post-Closing Adjustment Letter
K - Non-Foreign Affidavit
L - Assignment of Intangibles
M - Assignment of Licenses and/or Permits
N - Assignment of Warranties and Guarantees
O - Information for Real Estate 1099-S Report Filing
P - Acknowledgment of Title Insurer with regard to Real Estate
1099-S Report Filing
Q - Litigation
<PAGE>
