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) October 16, 1996
BALCOR EQUITY PENSION INVESTORS-I
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Exact Name of Registrant
Illinois 2-85270
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State or other jurisdiction Commission file number
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 36-3240345
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Address of principal I.R.S. Employer
executive offices Identification
Number
60015
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Zip Code
Registrant's telephone number, including area code:
(847) 267-1600
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
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Oxford Hills Apartments
In 1984, the Partnership acquired the Oxford Hills Apartments, St. Louis
County, Missouri, utilizing approximately $19,382,000 of offering proceeds.
On October 16, 1996, the Partnership contracted to sell the property for a sale
price of $22,278,500 to an unaffiliated party, Arbor Properties, Inc., a Texas
corporation. The purchaser has deposited $450,000 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 November 25, 1996. From the proceeds
of the sale, the Partnership will pay $278,481 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 up to $167,089. The Partnership
will receive the remaining proceeds of approximately $21,833,000, less closing
costs. Of such proceeds, $250,000 will be retained by the Partnership and will
not be available for use or distribution by the Partnership until 120 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.
The closing is subject to the satisfaction of numerous terms and conditions.
There can be no assurance that all of the terms and conditions will be complied
with and, therefore, it is possible the sale of the property may not occur.
ITEM 5. OTHER EVENTS
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Pacific Center Office Buildings
In 1984, the Pacific Center Office Buildings, Dallas, Texas, were acquired by a
joint venture (the "Joint Venture") in which the Partnership and an affiliate
held joint venture interests of 77.09% and 22.91%, respectively. The
Partnership contributed approximately $28,907,000 and the affiliate
contributed approximately $8,593,000 from their respective offering proceeds
towards the purchase of the property.
On October 10, 1996, the Joint Venture contracted to sell the property for a
sale price of $16,750,000 to an unaffiliated party, Transwestern Investment
Company, L.L.C. The purchaser has deposited $160,000 into an escrow account as
earnest money. The remainder of the sale price will be payable in cash at
closing, scheduled to occur on or about December 26, 1996. From the proceeds
of the sale, the Joint Venture will pay $335,000 as a brokerage commission to
an affiliate of the third party providing property management services for the
property. The Joint Venture will receive the remaining proceeds of approximately
$16,415,000, of which the Partnership's share will be approximately
$12,654,000, less the Partnership's share of closing costs.
<PAGE>
An affiliate of the Partnership has simultaneously contracted to sell another
property 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
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(A) FINANCIAL STATEMENTS AND EXHIBITS:
None
(B) PRO FORMA FINANCIAL INFORMATION:
None
(C) EXHIBITS:
(2) Agreement of Sale and attachments thereto relating to the sale
of Oxford Hills Apartments, St. Louis County, Missouri.
(99) Agreement of Sale and attachment thereto relating to the sale of
the Pacific Center Office Buildings, Dallas, Texas.
No information is required under Items 1, 3, 4, 6 and 8 and these items
have, therefore, been omitted.
<PAGE>
Signature
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
BALCOR 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
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Jerry M. Ogle, Vice President
and Secretary
Dated: October 31, 1996
<PAGE>
AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), is entered into as of the 16th
day of October, 1996, by and between ARBOR PROPERTIES, INC., a Texas
corporation ("Purchaser"), and LABROC I LIMITED PARTNERSHIP, an Illinois
limited partnership ("Seller").
W I T N E S S E T H:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to sell
at the price (the "Purchase Price") of Twenty-Two Million Two Hundred
Seventy-Eight Thousand Five Hundred and No/100 Dollars ($22,278,500.00), the
following property (collectively referred to herein as the "Property"):
(a) that certain property commonly known as Oxford Hill Apartments,
St. Louis, Missouri, legally described on Exhibit A attached hereto (the
"Land") and all buildings, structures and improvements currently located on the
Land (the "Improvements") or added prior to the Closing Date (hereinafter
defined);
(b) all of the personal property set forth on Exhibit B attached
hereto (the "Personal Property");
(c) all right, title and interest of Seller now owned or acquired by
Seller prior to the Closing Date in and to (i) all public and private streets,
roads, avenues, alleys and passageways, opened or proposed, in front of or
abutting the Land, (ii) any award made or to be made and any unpaid award for
damage to the Land by reason of any change of grade of any such street, road,
avenue, alley or passageway, and (iii) any strips or gores of land adjoining
the Land; and
(d) all right, title and interest of Seller in and to, all and
singular, the estates, rights, privileges, easements and appurtenances
belonging or in any way appertaining to the Land and the Improvements.
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as follows:
2.1. Upon the execution of this Agreement, the sum of Two Hundred Fifty
Thousand and No/100 Dollars ($250,000.00) (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
2.2. On the "Closing Date" (hereinafter defined), the balance of the
Purchase Price, adjusted in accordance with the prorations, by federally wired
"immediately available" funds, on or before 11:00 a.m Chicago time.
3. TITLE COMMITMENT AND SURVEY.
3.1. Attached hereto as Exhibit D is a copy of a title commitment for an
owner's standard title insurance policy issued by Near North National Title
Corporation on behalf of First American Title Insurance Company (hereinafter
referred to as "Title Insurer") dated June 12, 1996 for the Property (the
"Title Commitment"). For purposes of this Agreement, "Permitted Exceptions"
shall mean: (a) general real estate taxes, association assessments, special
assessments, special district taxes and related charges not yet due and
<PAGE>
payable; (b) matters shown on the "Existing Survey" (hereinafter defined); (c)
matters caused by the actions of Purchaser; and (d) the title exceptions set
forth in Schedule B of the Title Commitment as Numbers 10 through 23 inclusive,
to the extent that same affect the Property. All other exceptions to title
shall be referred to as "Unpermitted Exceptions". The Title Commitment shall
be conclusive evidence of good title as therein shown as to all matters to be
insured by the title policy, subject only to the exceptions therein stated. On
the Closing Date, Title Insurer shall deliver to Purchaser a standard title
policy in conformance with the previously delivered Title Commitment, subject
to Permitted Exceptions and Unpermitted Exceptions waived by Purchaser (the
"Title Policy"). Seller and Purchaser shall each pay for one-half (p) of the
costs of the Title Commitment and Title Policy and Purchaser shall pay for the
cost of any endorsements to, or extended coverage on, the Title Policy.
3.2. Purchaser has received a survey of the Property prepared by The
Sterling Company dated April 26, 1984 and revised June 8, 1984 (the "Existing
Survey"). Seller and Purchaser shall each pay for one-half (p) of the costs of
updating the Existing Survey and Seller shall deliver the updated survey (the
"Updated Survey") to Purchaser within 15 days after the date hereof. The
Updated Survey will meet the requirements for an "urban" ALTA/ACSM Land Title
Survey made in accordance with the minimum standard detail requirements for
ALTA/ACSM Land Title Surveys, as adopted in 1992 by the American Land Title
Association and American Congress on Surveying and Mapping, including item
numbers 1, 2 3 and 4 and the size and location of item numbers 6, 7, 8, 9, 10,
11 and 13 from Table A thereof. The Updated Survey shall be certified to
Purchaser (and any other party reasonably designated by Purchaser) and the
legal description of the Land contained in the Updated Survey shall conform to
the legal description of the Land set forth in the Deed (hereinafter defined).
Purchaser hereby acknowledges that all matters disclosed by the Existing Survey
are acceptable to Purchaser.
3.3. The obligation of Purchaser to pay various costs set forth in
Paragraphs 3.1 and 3.2 shall survive the termination of this Agreement.
4. PAYMENT OF CLOSING COSTS.
In addition to the costs set forth in Paragraphs 3.1 and 3.2, Purchaser
and Seller shall each pay for one-half (p) of the costs of the documentary or
transfer stamps to be paid with reference to the Deed (hereinafter defined) and
all other stamps, intangible, transfer, documentary, recording, sales tax and
surtax imposed by law with reference to any other sale documents delivered in
connection with the sale of the Property to Purchaser and all other charges of
the Title Insurer in connection with this transaction. Purchaser and Seller
each shall pay its own attorneys fees in connection with the closing of this
transaction.
5. CONDITION OF TITLE.
5.1. If, prior to "Closing" (as hereinafter defined), a date-down to the
Title Commitment or the Updated Survey discloses any new Unpermitted Exception,
Seller shall have thirty (30) days from the date of the date-down to the Title
Commitment or the Updated Survey, as applicable, at Seller's expense, to (i)
bond over, cure and/or have any Unpermitted Exceptions which, in the aggregate,
do not exceed $100,000.00 (a "Minor Unpermitted Exception"), removed from the
Title Commitment or to have the Title Insurer commit to insure against loss or
<PAGE>
damage that may be occasioned by such Unpermitted Exceptions, or (ii) have the
right, but not the obligation, to bond over, cure and/or have any Unpermitted
Exceptions which, in the aggregate, equal or exceed $100,000.00, removed from
the Title Commitment or to have the Title Insurer commit to insure against loss
or damage that may be occasioned by such Unpermitted Exceptions. In such
event, the time of Closing shall be delayed, if necessary, to give effect to
said aforementioned time periods. If Seller fails to cure or have said
Unpermitted Exception removed or have the Title Insurer commit to insure as
specified above within said thirty (30) day period or if Seller elects not 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), or if Seller is able to bond over, cure
or remove a Minor Unpermitted Exception for a cost not to exceed $200,000 or
the Title Insurer is willing to insure over a Minor Unpermitted Exception for a
cost not to exceed $200,000 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 preceding sentence, Purchaser shall
be deemed to have elected to terminate this Agreement as a result of said
Unpermitted Exception. If Purchaser terminates this Agreement in accordance
with the terms of this Paragraph 5.1, this Agreement shall become null and void
without further action of the parties and all Earnest Money theretofore
deposited into the escrow by Purchaser together with any interest accrued
thereon, shall be returned to Purchaser, and neither party shall have any
further liability to the other, except for Purchaser's obligation to indemnify
Seller and restore the Property, as more fully set forth in Paragraph 7.
5.2. Seller agrees to convey marketable fee simple title to the Property
to Purchaser by special warranty deed (the "Deed") in recordable form subject
only to the Permitted Exceptions and any Unpermitted Exceptions waived by
Purchaser.
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
6.1. Except as provided in the indemnity provisions contained in
Paragraph 7.1 of this Agreement, Seller shall bear all risk of loss with
respect to the Property up to the earlier of the 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 $50,000.00 (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, 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
<PAGE>
Property by fire or other casualty prior to the Closing Date, repair of which
would cost in excess of $50,000.00 (as determined by Seller in good faith),
then this Agreement may be terminated at the option of Purchaser, which option
shall be exercised, if at all, by Purchaser's written notice thereof to Seller
within five (5) business days after Purchaser receives written notice of such
fire or other casualty and Seller's determination of the amount of such
damages, and upon the exercise of such option by Purchaser this Agreement shall
become null and void, the Earnest Money deposited by Purchaser shall be
returned to Purchaser together with interest thereon, and neither party shall
have any further liability or obligations hereunder. In the event that
Purchaser does not exercise the option set forth in the preceding sentence, the
Closing shall take place on the Closing Date and Seller shall assign and
transfer to Purchaser on the Closing Date all of Seller's right, title and
interest in and to all insurance proceeds paid or payable to Seller on account
of the fire or casualty, and Seller shall pay to Purchaser at the Closing the
amount of Seller's insurance deductible.
6.2. If between the date of this Agreement and the Closing Date, any
condemnation or eminent domain proceedings are initiated which might result in
the taking of any part of the Property or the taking or closing of any right of
access to the Property, Seller shall immediately notify Purchaser of such
occurrence. In the event that the taking of any part of the Property, in the
reasonable judgment of Purchaser, shall: (i) materially impair access to the
Property; (ii) cause any material non-compliance with any applicable law,
ordinance, rule or regulation of any federal, state or local authority or
governmental agencies having jurisdiction over the Property or any portion
thereof; or (iii) materially and adversely impair the use of the Property as it
is currently being operated (hereinafter collectively referred to as a
"Material Event"), Purchaser may:
6.2.1. terminate this Agreement by written notice to Seller, in
which event the Earnest Money deposited by Purchaser, together with interest
thereon, shall be returned to Purchaser and all rights and obligations of the
parties hereunder with respect to the closing of this transaction will cease;
or
6.2.2. proceed with the Closing, in which event Seller shall assign
to Purchaser all of Seller's right, title and interest in and to any award made
in connection with such condemnation or eminent domain proceedings.
Purchaser shall then notify Seller, within five (5) business days after
Purchaser's receipt of Seller's notice, whether Purchaser elects to exercise
its rights under Paragraph 6.2.1 or Paragraph 6.2.2. Closing shall be delayed,
if necessary, until Purchaser makes such election. If Purchaser fails to make
an election within such five (5) business day period, Purchaser shall be deemed
to have elected to terminate this Agreement, 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. 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.
<PAGE>
7. INSPECTION AND AS-IS CONDITION.
7.1. Purchaser acknowledges and agrees that prior to the execution and
delivery of this Agreement, Purchaser and agents, engineers, employees,
contractors and surveyors retained by Purchaser were permitted to enter upon
the Property to inspect the Property, including, without limitation, a review
of leases located at the Property, and to conduct and prepare such studies,
tests and surveys as Purchaser deemed necessary and appropriate, and that in
connection with Purchaser's review of the Property, Seller 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 1995 and the most recent 1996 operating statements. Purchaser, by its
execution of this Agreement but subject to the representations and warranties
of Seller contained in Section 16 below, approves the condition of the Property
and the documents received from Seller as described in this paragraph.
All of the foregoing tests, investigations and studies conducted under
this Paragraph 7.1 by Purchaser shall be at Purchaser's sole cost and expense
and Purchaser shall restore the Property to the condition existing prior to the
performance of such tests or investigations by or on behalf of Purchaser.
Purchaser shall defend, indemnify and hold Seller and any affiliate, parent of
Seller, and all shareholders, employees, officers and directors of Seller or
Seller's affiliate or parent (hereinafter collectively referred to as
"Affiliate of Seller") harmless from any and all liability, cost and expense
(including without limitation, reasonable attorney's fees, court costs and
costs of appeal) suffered or incurred by Seller or Affiliates of Seller for
injury to persons or property caused by Purchaser's investigations and
inspection of the Property. Purchaser shall undertake its obligation to defend
set forth in the preceding sentence using attorneys selected by Seller, in
Seller's sole discretion. Purchaser's obligation to defend, indemnify and hold
harmless, as set forth in this paragraph, shall apply only to claims against
Seller or Affiliates of Seller of which Purchaser receives written notice
within the two (2) year period immediately following the Closing.
Notwithstanding anything contained herein to the contrary, the terms of
this Paragraph 7.1, shall survive the Closing and the delivery of the Deed and
termination of this Agreement.
7.2. Purchaser acknowledges and agrees that, except with respect to the
representations and warranties contained herein, it will be purchasing the
Property and the Personal Property based solely upon its inspections and
investigations of the Property and the Personal Property, and that Purchaser
will be purchasing the Property and the Personal Property "AS IS" and "WITH ALL
FAULTS", based upon the condition of the Property and the Personal Property as
of the date of this Agreement, normal and reasonable wear and tear and loss by
fire or other casualty or condemnation excepted. Without limiting the
foregoing, Purchaser acknowledges that, except as may otherwise be specifically
set forth elsewhere in this Agreement, neither Seller nor its consultants,
brokers or agents have made any representations or warranties of any kind upon
which Purchaser is relying as to any matters concerning the Property or the
Personal Property, including, but not limited to, the condition of the land or
any improvements comprising the Property, the existence or non-existence of
"Hazardous Materials" (as hereinafter defined), economic projections or market
studies concerning the Property, any development rights, taxes, bonds,
covenants, conditions and restrictions affecting the Property, water or water
<PAGE>
rights, topography, drainage, soil, subsoil of the Property, the utilities
serving the Property or any zoning or building laws, rules or regulations or
"Environmental Laws" (hereinafter defined) affecting the Property. Seller
makes no representation or warranty that the Property complies with Title III
of the Americans with Disabilities Act or any fire code or building code.
Except 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 or the Affiliates of 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 or the Affiliates of
Seller, relating directly or indirectly to the existence of asbestos or
Hazardous Materials on, or environmental conditions of, the Property, whether
known or unknown. As used herein, "Environmental Laws" means all federal,
state and local statutes, codes, regulations, rules, ordinances, orders,
standards, permits, licenses, policies and requirements (including consent
decrees, judicial decisions and administrative orders) relating to the
protection, preservation, remediation or conservation of the environment or
worker health or safety, all as amended or reauthorized, or as hereafter
amended or reauthorized, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.
Section 9601 et seq., the Resource Conservation and Recovery Act of 1976
("RCRA"), 42 U.S.C. Section 6901 et seq., the Emergency Planning and Community
Right-to-Know Act ("Right-to-Know Act"), 42 U.S.C. Section 11001 et seq., the
Clean Air Act ("CAA"), 42 U.S.C. Section 7401 et seq., the Federal Water
Pollution Control Act ("Clean Water Act"), 33 U.S.C. Section 1251 et seq., the
Toxic Substances Control Act ("TSCA"), 15 U.S.C. Section 2601 et seq., the Safe
Drinking Water Act ("Safe Drinking Water Act"), 42 U.S.C. Section 300f et seq.,
the Atomic Energy Act ("AEA"), 42 U.S.C. Section 2011 et seq., the Occupational
Safety and Health Act ("OSHA"), 29 U.S.C. Section 651 et seq., and the
Hazardous Materials Transportation Act (the "Transportation Act"), 49 U.S.C.
Section 1802 et seq. As used herein, "Hazardous Materials" means:
(1) "hazardous substances," as defined by CERCLA; (2) "hazardous wastes," as
defined by RCRA; (3) any radioactive material including, without limitation,
any source, special nuclear or by-product material, as defined by AEA; (4)
asbestos in any form or condition; (5) polychlorinated biphenyls; and (6) any
other material, substance or waste to which liability or standards of conduct
may be imposed under any Environmental Laws. Notwithstanding anything
contained herein to the contrary, the terms of this Paragraph 7.2 shall survive
the Closing and the delivery of the Deed and termination of this Agreement.
7.3. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Seller makes no representation or
warranty that Purchaser will achieve similar financial or other results with
respect to the operations of the Property, it being acknowledged by Purchaser
that Seller's operation of the Property and allocations of revenues or expenses
may be vastly different than Purchaser may be able to attain. Purchaser
acknowledges that it is a sophisticated and experienced purchaser of real
estate and further that Purchaser has relied upon its own investigation and
inquiry with respect to the operation of the Property and releases Seller and
the Affiliates of Seller from any liability with respect to such historical
<PAGE>
information. Notwithstanding anything contained herein to the contrary, the
terms of this Paragraph 7.3 shall survive the Closing and the delivery of the
Deed and termination of this Agreement.
7.4. Seller has provided to Purchaser the following existing report:
Report of Phase I Environmental Site Assessment and Limited Asbestos Survey,
dated April 27, 1993, prepared by Law Engineering, Inc. ("Existing Report").
Seller makes no representation or warranty concerning the accuracy or
completeness of the Existing Report. Purchaser hereby releases Seller and the
Affiliates of Seller from any liability whatsoever with respect to the Existing
Report, or, including, without limitation, the matters set forth in the
Existing Report, and the accuracy and/or completeness of the Existing Report.
Furthermore, Purchaser acknowledges that it will be purchasing the Property
with all faults disclosed in the Existing Report. Notwithstanding anything
contained herein to the contrary, the terms of this Paragraph 7.4 shall survive
the Closing and the delivery of the Deeds and termination of this Agreement.
8. CLOSING.
8.1. The closing of this transaction (the "Closing"), subject to Paragraph
8.2 below, shall be on September 25, 1996 (the "Closing Date"), at the office
of either the Title Insurer in St. Louis, Missouri or Katten Muchin & Zavis,
525 West Monroe Street, Suite 1600, Chicago, Illinois, 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 Missouri, or at the option of either party, the Closing shall
be a "New York style" closing at which the Purchaser shall wire the Purchase
Price to Title Insurer on the Closing Date and prior to the release of the
Purchase Price to Seller, Purchaser shall receive the Title Policy or marked up
commitment dated the date of the Closing Date. In the event of a New York
style closing, Seller shall deliver to Title Insurer any customary affidavit in
connection with a New York style closing. All closing and escrow fees shall be
divided equally between the parties hereto.
8.2. Notwithstanding anything to the contrary herein contained, provided
Purchaser is not then in default in the performance of its obligations
contained herein, Purchaser shall have the right to postpone the Closing for
two (2) consecutive thirty (30) day periods by delivering written notice of its
election to so postpone the Closing to Seller on or prior to the tenth (10th)
day preceding the Closing Date (as same may have previously been extended
hereby). As a condition precedent to its right to postpone the Closing as
herein set forth, Purchaser, not later than five (5) days following its
delivery of written notice to Seller exercising each of its rights to postpone
the Closing, shall deposit into the escrow established pursuant to the Escrow
Agreement, as additional earnest money, the sum of $100,000. If Purchaser
timely exercises its right to postpone the Closing as herein set forth, all
references in this Agreement to the Closing Date shall be deemed to refer to
the Closing Date as extended hereby, and all references to the Earnest Money
shall be deemed to refer to the earnest money deposited into escrow pursuant to
Paragraph 2.1 plus the earnest money deposited into escrow pursuant to this
Paragraph.
<PAGE>
9. CLOSING DOCUMENTS.
9.1. On or prior to the Closing Date, Seller and Purchaser shall execute
and deliver to one another a joint closing statement. In addition, Purchaser
shall deposit into the deed and money escrow the balance of the Purchase Price,
an assumption of the documents set forth in Paragraph 9.2.3 and 9.2.4 and such
other documents as may be reasonably required by the Title Insurer in order to
consummate the transaction as set forth in this Agreement.
9.2. On the Closing Date, Seller shall execute and deliver to Purchaser
the following:
9.2.1. the Deed (in the form of Exhibit E attached hereto), subject
to Permitted Exceptions and those Unpermitted Exceptions waived by Purchaser;
9.2.2. a quit claim bill of sale conveying the Personal Property (in
the form of Exhibit F attached hereto);
9.2.3. assignment and assumption of intangible property (in the form
attached hereto as Exhibit G), including, without limitation, the service
contracts listed in Exhibit H;
9.2.4. an assignment and assumption of leases and security deposits
(in the form attached hereto as Exhibit I);
9.2.5. non-foreign affidavit (in the form of Exhibit J attached
hereto);
9.2.6. original, and/or copies of, leases affecting the Property in
Seller's possession (which shall be delivered to Purchaser at the Property);
9.2.7. all documents and instruments reasonably required by the
Title Insurer to issue the Title Policy (including a so-called "gap
undertaking" in favor of the Title Company to permit the Title Company to issue
the Title Policy to Purchaser on the Closing Date and such other documents
reasonably required by the Title Insurer to issue extended coverage);
9.2.8. possession of the Property to Purchaser, subject to the terms
of leases;
9.2.9. notice to the tenants of the Property of the transfer of
title and assumption by Purchaser of the landlord's obligation under the leases
and the obligation to refund the security deposits (in the form of Exhibit K);
and
9.2.10. a rent roll dated as of the Closing Date.
10. PURCHASER'S DEFAULT. ALL EARNEST MONEY DEPOSITED INTO THE ESCROW IS TO
SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND UNDERTAKINGS
UNDER THIS AGREEMENT. IN THE EVENT OF A DEFAULT OF THE PURCHASER UNDER THE
PROVISIONS OF THIS AGREEMENT, SELLER SHALL RETAIN ALL OF THE EARNEST MONEY AND
THE INTEREST THEREON AS SELLER'S SOLE RIGHT TO DAMAGES OR ANY OTHER REMEDY,
EXCEPT FOR PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER AND RESTORE THE PROPERTY
AS SET FORTH IN PARAGRAPH 7.1 HEREOF. THE PARTIES HAVE AGREED THAT SELLER'S
ACTUAL DAMAGES, IN THE EVENT OF A DEFAULT BY PURCHASER, WOULD BE EXTREMELY
<PAGE>
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, INCLUDING A BREACH OF ANY REPRESENTATION OR WARRANTY MADE HEREIN BY
SELLER, 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 WHICH
GIVES RISE TO PURCHASER'S RIGHT TO TERMINATE THIS AGREEMENT PURSUANT TO
PARAGRAPH 5 HEREOF; (ii) ITS FAILURE TO EXPEND UP TO $200,000 IF (A) SELLER IS
ABLE TO BOND OVER, CURE OR REMOVE A MINOR UNPERMITTED EXCEPTION FOR A COST NOT
TO EXCEED $200,000 OR (B) THE TITLE INSURER IS WILLING TO INSURE OVER A MINOR
UNPERMITTED EXCEPTION FOR A COST NOT TO EXCEED $200,000 IN ACCORDANCE WITH THE
TERMS HEREOF WITH THE TERMS HEREOF OR (iii) ITS WILLFUL REFUSAL TO DELIVER THE
DEED, THEN PURCHASER ALTERNATIVELY WILL BE ENTITLED TO SUE FOR SPECIFIC
PERFORMANCE.
12. PRORATIONS.
12.1. Rents (exclusive of delinquent rents, but including prepaid rents);
prepaid associations dues, if any; water and other utility charges; fuels;
prepaid operating expenses; real and personal property taxes and installments
of special assessments which are due in the year in which the Closing Date
occurs; and other similar items shall be adjusted ratably as of 11:59 p.m. on
the Closing Date, and credited against the balance of the cash due at Closing.
Assessments payable in installments which are due in years subsequent to the
year in which the Closing Date occurs 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. All prorations will be final except as to delinquent rent referred to in
Paragraph 12.2 below. Refundable security deposits will be assigned to and
assumed by Purchaser and credited to Purchaser at Closing.
12.2. All rent paid following the Closing Date by any tenant of the
Property who is indebted under a lease for basic rent for any period prior to
and including the Closing Date, after the payment to Purchaser of all current
basic rent, shall be deemed a "Post-Closing Receipt" until such time as all
such indebtedness is paid in full. Within ten (10) business days following
each receipt by Purchaser of a Post-Closing Receipt, Purchaser shall pay such
Post-Closing Receipt to Seller. Purchaser shall use commercially reasonable
efforts to collect all amounts which, upon collection, would constitute
Post-Closing Receipts hereunder (but in no event will be obligated to retain
legal counsel or the services of an outside collection agency or to initiate
legal proceedings in furtherance thereof) and may deduct from such Post-Closing
Receipts so collected its reasonable out-of-pocket costs incurred in so
collecting such Post-Closing Receipts. Within 120 days after the Closing Date,
<PAGE>
Purchaser shall deliver to Seller a reconciliation statement of Post-Closing
Receipts through the first 90 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. 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 and the confirmation thereof by Purchaser, Purchaser shall pay
to Seller said additional Post-Closing Receipts. Paragraph 12.2 of this
Agreement shall survive the Closing and the delivery and recording of the Deed.
13. RECORDING. Neither this Agreement nor a memorandum thereof shall be
recorded and the act of recording by Purchaser shall be an act of default
hereunder by Purchaser and subject to the provisions of Paragraph 10 hereof.
14. ASSIGNMENT. Neither Purchaser nor Seller may assign or transfer its
rights or obligations under this Agreement without the prior written consent of
the other party. Purchaser, however, may assign its interest in this Agreement
without the consent of Seller to (i) any entity which is a parent, subsidiary
or affiliate entity of Purchaser, or (ii) any joint venture entity of which
Purchaser (or any parent, subsidiary or affiliate of Purchaser) is a party,
provided that Purchaser remains liable, and the assignee assumes, the
obligations of Purchaser hereunder. No consent given to any transfer or
assignment of rights or obligations hereunder shall be construed as a consent
to any other transfer or assignment of rights or obligations hereunder. No
transfer or assignment in violation in the provisions hereof shall be valid or
enforceable. Subject to the foregoing, this Agreement shall inure to the
benefit of and be binding upon the successors and assigns of the parties.
15. BROKER. The parties hereto represent and warrant that no broker
commission or finder fee is due and payable in connection with this transaction
other than to CB Commercial Real Estate Group, Inc. (to be paid by Seller).
Seller's commission to CB Commercial Real Estate Group, Inc. shall only be
payable out of the proceeds of the sale of the Property in the event the
transaction set forth herein closes. Purchaser and Seller shall indemnify,
defend and hold the other party hereto harmless from any claim whatsoever
(including without limitation, reasonable attorney's fees, court costs and
costs of appeal) from anyone claiming by or through the indemnifying party any
fee, commission or compensation on account of this Agreement, its negotiation
or the sale hereby contemplated other than to CB Commercial Real Estate Group,
Inc. The indemnifying party shall undertake its obligations set forth in this
Paragraph 15 using attorneys selected by the indemnifying party and reasonably
acceptable to the indemnified party. The provisions of this Paragraph 15 will
survive the Closing and delivery of the Deed.
16. REPRESENTATIONS AND WARRANTIES.
16.1. Any reference herein to Seller's knowledge or notice of any matter
or thing shall only mean such knowledge or notice that has actually been
received by Phillip A. Schechter and Michael Becker (together referred to as
the "Seller's Representative"), and any representation or warranty of the
Seller is based upon those matters of which the Seller's Representative has
actual knowledge. Seller, promptly after its execution of this Agreement,
shall deliver a copy of this Paragraph 16 to the resident manager of the
<PAGE>
Property, together with a request to advise Phillip A. Schechter within five
(5) business days after receipt by such resident manager as to the accuracy and
truthfulness of the representations and warranties contained herein. Phillip
A. Schechter thereafter shall notify Purchaser as to the response of the
resident manager on or prior to September 23, 1996 if in his advise the
resident manager indicates that any of such representations or warranties are
incorrect. If Phillip A. Schechter fails to so notify Purchaser, Purchaser
shall be entitled to conclude that the resident manager reviewed such
representations and warranties contained herein and that such resident manager
deemed such representations and warranties to be correct. Any knowledge or
notice given, had or received by any of Seller's agents, servants or employees
shall not be imputed to Seller, the general partner or limited partners of
Seller, the subpartners of the general partner or limited partners of Seller or
Seller's Representative.
16.2. Subject to the limitations set forth in Paragraph 16.1, Seller
hereby makes the following representations and warranties, which
representations and warranties are made to Seller's knowledge: (i) Seller has
no knowledge of any pending or threatened litigation, claim, cause of action or
administrative proceeding concerning the Property except as set forth on the
schedule attached hereto as Exhibit L; (ii) Seller has the power, right and
authority to execute and deliver this Agreement and consummate the transactions
contemplated herein; and (iii) the rent roll attached hereto as Exhibit M which
Seller will update as of the Closing Date is accurate as of the date set forth
thereon; (iv) there are not special assessments, fees or charges (including any
"impact fees" or charges in the nature thereof) of any kind or nature
whatsoever levied or assessed or pending or contemplated against the Property
by any governmental authority having jurisdiction of the Property, except as
set forth in the Permitted Exceptions; (v) Seller is not a "foreign
corporation," "foreign partnership" or "foreign estate" as those terms are
defined in the Internal Revenue Code of 1986, as amended, and Seller will
furnish to Purchaser such further assurance with respect to this representation
and warranty as Purchaser shall reasonably acquire; (vi) except as may be set
forth in the Existing Report, Seller has not received any notice or request for
specific information from any governmental authority having jurisdiction over
the Property regarding any uncured violation or potential uncured violation of
any Environmental Law with respect to the Property; (vi) Seller has no
knowledge that any of the historical financial information provided to
Purchaser pursuant to Paragraph 7.3 above is inaccurate in any material
respect; and (vii) Seller has no environmental reports in its possession
relating to the existence of Hazardous Materials on the Property other than the
Existing Report.
16.3. Purchaser hereby represents and warrants to Seller that Purchaser
has the full right, power and authority to execute and deliver this Agreement
and consummate the transactions contemplated herein.
16.4. Seller covenants to operate, maintain and manage the Property in
the same manner that it has operated, maintained and managed the Property
during the period of Seller's ownership, subject to reasonable wear and tear
and casualty.
16.5. The parties agree that the representations contained herein shall
survive Closing for a period of one hundred twenty (120) days (i.e., the
claiming party shall have no right to make any claims against the other party
<PAGE>
for a breach of a representation or warranty after the expiration of the one
hundred twenty (120) day period immediately following Closing).
17. LIMITATION OF LIABILITY.
17.1. Neither Seller, nor any Affiliate of Seller, nor any of their
respective beneficiaries, shareholders, partners, officers, directors, agents
or employees, heirs, successors or assigns shall have any personal liability of
any kind or nature for or by reason of any matter or thing whatsoever under, in
connection with, arising out of or in any way related to this Agreement and the
transactions contemplated herein, and Purchaser hereby waives for itself and
anyone who may claim by, through or under Purchaser any and all rights to sue
or recover on account of any such alleged personal liability.
17.2. Notwithstanding anything contained herein to the contrary,
Purchaser hereby agrees that the maximum aggregate liability of Seller in
connection with, arising out of or in any way related to a breach by Seller
under this Agreement or any document or conveyance agreement in connection with
the transaction set forth herein after the Closing shall be $250,000.
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.
17.3. Seller further agrees not to distribute $250,000 of the proceeds of
the Purchase Price to its partners until the later of (i) one hundred twenty
(120) days after the Closing, and (ii) final resolution of any claims by
Purchaser asserted in writing against Seller prior to the expiration of the one
hundred twenty (120) day period after the Closing in accordance with the terms
of this Agreement ("Claims"). If, however, any Claims are disputed by Seller,
Seller shall have the right, by delivery of written notice to Purchaser, to
require Purchaser to file suit in a court of competent jurisdiction in
furtherance of the resolution of such disputed Claims within thirty (30) days
after such written notice to Purchaser. If Purchaser thereafter fails to file
suit as aforesaid within such thirty (30) day period (or the aggregate amount
of such disputed Claims alleged in such lawsuit(s) is less than $250,000),
Seller shall no longer be prevented from distributing the proceeds (or the
portion thereof not the subject of any such Claim(s) for which Purchaser has
filed suit).
18. TIME OF ESSENCE. Time is of the essence of this Agreement.
19. NOTICES. Any notice or demand which either party hereto is required or
may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by overnight courier
such as Federal Express, by facsimile transmission or made by United States
registered or certified mail addressed as follows:
TO SELLER: c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road, Suite A-200
Bannockburn, Illinois 60015
Attention: Ilona Adams
<PAGE>
with copies to: The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road, Suite A-200
Bannockburn, Illinois 60015
Attention: Alan Lieberman
(708) 317-4360
(708) 317-4462 (FAX)
and to: Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, Illinois 60661-3693
Attention: Daniel J. Perlman, Esq.
(312) 902-5532
(312) 902-1061 (FAX)
TO PURCHASER: Arbor Properties, Inc.
377 E. Butterfield Road
Suite 425
Lombard, Illinois 60148
Attention: Thomas J. Lampert
(708) 810-0049
(708) 810-1790 (FAX)
with a copy to: Lathrop & Gage L.C.
2345 Grand Boulevard
Kansas City, Missouri 64108
Attention: E. T. Bullard, Esq.
(816) 460-5515
(816) 292-2001 (FAX)
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be
deemed to be delivered or made on the next business day if sent by overnight
courier, or the same day as given if sent by facsimile transmission and
received by 5:00 p.m. Chicago time (if followed on the same day of facsimile
transmission by delivery to an overnight courier for overnight delivery
service) or on the 4th business day after the same is deposited in the United
States Mail as registered or certified matter, addressed as above provided,
with postage thereon fully prepaid. Any such notice, demand or document not
given, delivered or made by registered or certified mail, by overnight courier
or by facsimile transmission as aforesaid shall be deemed to be given,
delivered or made upon receipt of the same by the party to whom the same is to
be given, delivered or made. Copies of all notices shall be served upon the
Escrow Agent.
20. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute three
(3) copies of this Agreement and three (3) copies of the Escrow Agreement and
forward them to Seller for execution, accompanied with the Earnest Money
payable to the Escrow Agent 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:
<PAGE>
(A) Earnest Money;
(B) One (1) fully executed copy of this Agreement; and
(C) Three (3) copies of the Escrow Agreement signed by the parties with a
direction to execute two (2) copies of the Escrow Agreement and deliver a fully
executed copy to each of Purchaser and Seller.
21. GOVERNING LAW. The provisions of this Agreement shall be governed by the
laws of the State of Missouri.
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. LEAD-BASED PAINT.
25.1. EVERY PURCHASER OF ANY INTEREST IN RESIDENTIAL REAL PROPERTY ON
WHICH A RESIDENTIAL DWELLING WAS BUILT PRIOR TO 1978 IS NOTIFIED THAT SUCH
PROPERTY MAY PRESENT EXPOSURE TO LEAD FROM LEAD-BASED PAINT THAT MAY PLACE
YOUNG CHILDREN AT RISK OF DEVELOPING LEAD POISONING. LEAD POISONING IN YOUNG
CHILDREN MAY PRODUCE PERMANENT NEUROLOGICAL DAMAGE, INCLUDING LEARNING
DISABILITIES, REDUCED INTELLIGENCE QUOTIENT, BEHAVIORAL PROBLEMS, AND IMPAIRED
MEMORY. LEAD POISONING ALSO POSES A PARTICULAR RISK TO PREGNANT WOMEN. THE
SELLER OF ANY INTEREST IN RESIDENTIAL REAL PROPERTY IS REQUIRED TO PROVIDE THE
BUYER WITH ANY INFORMATION ON LEAD-BASED PAINT HAZARDS FROM RISK ASSESSMENTS OR
INSPECTIONS IN THE SELLER'S POSSESSION AND NOTIFY THE BUYER OF ANY KNOWN
LEAD-BASED PAINT HAZARDS. A RISK ASSESSMENT OR INSPECTION FOR POSSIBLE
LEAD-BASED PAINT HAZARDS IS RECOMMENDED PRIOR TO PURCHASE.
25.2. To Seller's knowledge (which, for purposes of this Paragraph 25
only, shall include such knowledge or notice that has actually been received by
Robert A. O'Neill as well as by Seller's Representative) there is no presence
of lead-based paint or lead-based paint hazards in the apartments located on
the Property. To Seller's knowledge there are no records or reports available
to Seller pertaining to lead-based paint. By providing the above information
to Purchaser, Seller intends to comply with the requirements of 24 CFR Part 35
and 40 CFR Part 745. Purchaser hereby affirms receipt of the information set
forth in this Paragraph 25 and receipt of the lead hazard information pamphlet
as required under section 15 U.S.C. 2696. Purchaser hereby acknowledges that
it has been provided an opportunity pursuant to Paragraph 7 above to conduct a
risk assessment or inspection of the Property for the presence of lead-based
paint and/or lead based paint hazards.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date first set forth above.
PURCHASER:
ARBOR PROPERTIES, INC., a Texas corporation
By: /s/ Daniel I. Hubbard
---------------------------------
Name: Daniel I. Hubbard
---------------------------------
Its: President
---------------------------------
SELLER:
LABROC I LIMITED PARTNERSHIP, 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/ James E. Mendelson
-----------------------------------
Its: Sr. VP
-----------------------------------
<PAGE>
BROKER'S AFFIDAVIT
of CB Commercial Real Estate Group, Inc. ("Seller's
Broker") executed this Agreement in its capacity as a real estate broker and
acknowledges that the fee or commission due it from Seller as a result of the
transaction described in this Agreement is as set forth in that certain Listing
Agreement, dated __, 199_ between Seller and Seller's Broker (the "Listing
Agreement"). Seller's Broker also acknowledges that payment of the aforesaid
fee or commission is conditioned upon the Closing and the receipt of the
Purchase Price by the Seller. Seller's Broker agrees to deliver a receipt to
the Seller at the Closing for the fee or commission due Seller's Broker and a
release, in the appropriate form, stating that no other fees or commissions are
due to it from Seller or Purchaser.
By:
----------------------------------
<PAGE>
Exhibits
A - Legal
B - Personal Property
C - Escrow Agreement
D - Title Commitment
E - Deed
F - Bill of Sale
G - Assignment and Assumption of Intangible Property
H - Service Contracts
I - Assignment and Assumption of Leases and Security Deposits
J - Non-Foreign Affidavit
K - Notice to Tenants
L - Litigation Schedule
M - Rent Roll
<PAGE>
October 15, 1996 VIA MESSENGER
The Balcor Company
Attn: Alan Lieberman
Bannockburn Lake Office Plaza
2355 Waukegan Road, Suite A-200
Bannockburn, IL 60015
RE: Oxford Hill Apartments
St. Louis, Missouri
Dear Mr. Lieberman:
Pursuant to Section 8.2 of the agreement signed by Arbor Properties on October
15, 1996 between LABROC I LIMITED PARTNERSHIP as Seller and ARBOR PROPERTIES,
INC., as Buyer concerning the sale and purchase of the above-referenced
property, Arbor Properties hereby elects to extend the Closing Date for a
period of thirty (30) days to November 24, 1996.
In accordance with Section 8.2, additional Earnest Money in the amount of One
Hundred Thousand and 00/100 Dollars ($100,000.00) shall be paid to First
American Title Insurance Company for receipt on or before October 20, 1996
being within five (5) days following the date of delivery of this notice.
If you have any questions concerning this extension of the closing date, please
feel free to call me or Tom Lampert.
Sincerely,
ARBOR PROPERTIES, INC.
/s/ David J. Hubbard
David J. Hubbard
President
cc: Matthew Lawton, CB Commercial
Seth Madorsky, Esq., Katten Muchin & Zavis
Edward Bullard, Esq. Lathrop & Gage
<PAGE>
AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), is entered into as of the 10th
day of October, 1996, by and between Transwestern Investment Company, L.L.C.,
("Purchaser"), and Pacific Center Investors, a joint venture ("Seller").
W I T N E S S E T H:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to sell
at the price of Sixteen Million Seven Hundred Fifty Thousand Dollars
($16,750,000) ("Purchase Price"), and on the terms and conditions hereinafter
set forth, the property commonly known as Pacific Center I and Pacific Center
II, located in Dallas, Texas, consisting of the following:
1.1 All of Seller's right, title and interest in the real property
("Land") and all buildings and other improvements ("Improvements") situated on
the Land, as more particularly described on Exhibit A attached hereto and made
a part hereof (the Land and the Improvements are sometimes referred to herein
together as the "Property"), together with all easements and appurtenances
thereunto belonging and all of Seller's right, title and interest in and to all
streets, alleys and public ways adjacent thereto, if any, and together with all
of Seller's right, title and interest in and to all strips and gores located on
or adjacent to the Property or located between any parcels constituting the
Land, if any;
1.2 The personal property set forth on Exhibit B attached hereto
("Personal Property"), but shall in all events excluding the personal property
described on Exhibit B under the heading "Excluded Personal Property";
1.3 The tenant leases described in Exhibit C attached hereto and made a
part hereof together with such other tenant leases of the Property as may be
made prior to Closing (as hereinafter defined) in accordance with the terms of
this Agreement ("Leases"), along with all security deposits held by Seller as
landlord under the Leases;
1.4 If and to the extent assignable and to the extent of Seller's
interest therein, if any: (a) all guarantees, warranties and indemnifications,
if any, received from suppliers, contractors, materialmen or subcontractors
arising out of, or in connection with, the installation, construction or
maintenance of the Property including, without limitation, the right to sue any
obligor for any breach of any covenant, agreement, representation, warranty or
guarantee contained therein; (b) all licenses, permits, certificates of
occupancy and franchises issued by any federal, state, county or municipal
authority relating to the use, maintenance or operation of the Property running
to or in favor of Seller or pertaining to the Property; (c) all trade styles,
and trade names, including, without limitation, the names "Pacific Center I"
and "Pacific Center II", and all contract rights, brochures, manuals, lists of
prospective tenants, advertising material, books and records, utility contracts
and telephone numbers; (d) the plans and specifications for the Improvements
and all unexpired claims and sureties, if any, received in connection with the
construction, improvement or equipment of the Improvements; and (e) those
service and maintenance contracts set forth in Exhibit D except any such
contracts which Purchaser elects not to assume by notice to Seller on or prior
to the termination of the Inspection Period ("Service Contracts").
<PAGE>
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as follows:
2.1 Upon the execution of this Agreement by Seller, the sum of One
Hundred Sixty Thousand Dollars ($160,000) ("Earnest Money"), by wire transfer
to the escrow agent, to be held in escrow by and in accordance with the
provisions of the Escrow Agreement ("Escrow Agreement") attached hereto as
Exhibit E; and
2.2 On the Closing Date (as hereinafter defined), the balance of the
Purchase Price, adjusted in accordance with the prorations, by federally wired
"immediately available" funds, on or before 2:00 p.m. Chicago time. Any
provisions herein providing for the delivery of the Earnest Money to either
party hereof are intended to mean the Earnest Money plus any interest earned
thereon.
3. TITLE COMMITMENT AND SURVEY.
3.1 Attached hereto as Exhibit F is a copy of a title commitment for an
owner's standard title insurance policy issued by Charter Title Company, as
agent for Lawyers Title Insurance Corporation, (hereinafter referred to as
"Title Insurer"), dated September 17, 1996 for the Property ("Title
Commitment"). For purposes of this Agreement, "Permitted Exceptions" shall
mean: (a) general ad valorem real estate taxes for the year 1996 and
subsequent years not yet due and payable; (b) association assessments, special
district taxes and related charges not yet due and payable; (c) matters shown
on the Existing Survey (as hereinafter defined); (d) matters caused by the
action or inaction of Purchaser or its agents; (g) the title exceptions set
forth in Schedule B of the Title Commitment as Numbers 1, 2, 4, 5, 9-24 and
27-33; (h) the rights of tenants under leases; and (i) liens or encumbrances of
a definite or ascertainable amount which may be removed or insured over by the
payment of money or other security at the Closing Date, and which Seller
removes or causes to be insured over at the Closing Date in accordance with
Paragraph 5 hereof. All other exceptions to title shall be referred to as
"Unpermitted Exceptions". 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 (excluding, however, the
Permitted Exceptions described in subclause (i) above) and Unpermitted
Exceptions waived in writing by Purchaser ("Title Policy"). The Title Policy
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 and
requirements therein stated. Seller shall pay for the costs of the Title
Commitment and Title Policy (including extended coverage over the standard,
pre-printed exceptions, if available and reasonable endorsements (including an
endorsement over the standard survey exception) requested by Purchaser on the
Title Policy).
3.2 Purchaser has received a survey of the Property prepared by
Redd-Young Engineering & Surveying dated May 6, 1983 ("Existing Survey").
Purchaser hereby acknowledges that all matters disclosed by the Existing Survey
are acceptable to Purchaser and are Permitted Exceptions for purposes of
Paragraph 3.1 above. Prior to Closing, Seller shall furnish Purchaser, at
Seller's expense, with a current survey of the Property certified to Purchaser,
Title Company and Purchaser's lender as having been prepared in accordance with
the minimum standard detail requirements for land title surveys jointly
<PAGE>
established and adopted in 1992 by the American Land Title Association and the
American Congress of Surveying and Mapping ("Survey").
3.3 The obligations of Purchaser and Seller to pay various costs set
forth in Paragraphs 3.1 and 3.2 shall survive the termination of this
Agreement.
4. PAYMENT OF CLOSING COSTS.
4.1 In addition to the costs set forth in Paragraphs 3.1 and 3.2, Seller
shall pay the costs of the documentary or transfer stamps to be paid with
reference to the Deed (as hereinafter defined) and all other stamps,
intangible, transfer, documentary, recording, sales tax and surtax imposed by
law with reference to any other sale documents delivered in connection with the
sale of the Property to Purchaser.
5. CONDITION OF TITLE.
5.1 If, prior to Closing (as hereinafter defined), a date-down to the
Title Commitment discloses any new Unpermitted Exceptions which, in the
aggregate, do not exceed $25,000 (each, a "Minor Unpermitted Exception"),
Seller shall, at Seller's expense, bond over, cure and/or have such Minor
Unpermitted Exceptions removed from the Title Commitment or have the Title
Insurer commit to insure against loss or damage that may be occasioned by such
Minor Unpermitted Exceptions. Notwithstanding the foregoing, if such date down
to the Title Commitment discloses any new Unpermitted Exceptions which, in the
aggregate, equal or exceed $25,000, Seller shall have the right, but not the
obligation, to bond over, cure and/or have such exceptions removed from the
Title Commitment or to have the Title Insurer commit to insure against loss or
damage that may be occasioned by such Unpermitted Exceptions. If Seller fails
to bond over, cure or have any Unpermitted Exception removed or have the Title
Insurer commit to insure as specified above within five (5) business days from
the date of the date down to the Title Commitment, Purchaser may terminate this
Agreement upon written notice to Seller within three (3) days after the
expiration of such five (5) business 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 action of Seller (and not
by any unrelated third party) or if Seller is able to bond over, cure or remove
a Minor Unpermitted Exception for a cost not to exceed $25,000 or the Title
Insurer is willing to insure over a Minor Unpermitted Exception for a cost not
to exceed $25,000 in accordance with the terms hereof and Seller fails to
expend such funds in either case, then Purchaser shall have the additional
rights contained in Paragraph 14 herein. Absent notice from Purchaser to Seller
in accordance with the preceding sentence, Purchaser shall be deemed to have
elected to take title subject to said Unpermitted Exception, without any
reduction in or setoff against the Purchase Price as a result thereof. If
Purchaser terminates this Agreement in accordance with the terms of this
Paragraph 5.1, this Agreement shall terminate 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 those covenants and obligations that specifically survive
termination of this Agreement.
<PAGE>
5.2 Seller agrees to convey fee simple title to the Property to Purchaser
by special warranty deed ("Deed") (in the form attached hereto as Exhibit G) in
recordable form subject only to the Permitted Exceptions and any Unpermitted
Exceptions not objected to by Purchaser in accordance with Paragraph 5.1 above.
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
6.1 Except as provided in the indemnity provisions contained in Paragraph
7.1 of this Agreement, Seller shall bear all risk of loss with respect to the
Property through the Closing. Seller agrees to maintain its existing "all risk"
replacement cost casualty insurance and rent loss insurance in place until the
Closing Date. 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 $150,000 (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 if such repair or restoration may be
completed prior to the Closing Date 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 plus the amount of Seller's insurance deductible. Seller shall
promptly notify Purchaser in writing of any such fire or other casualty and
Seller's estimate 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 $150,000 (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 ten (10) business days after Purchaser receives
written notice of such fire or other casualty from Seller and Seller and
Purchaser agree upon the amount of such damages, and upon the exercise of such
option by Purchaser this Agreement shall terminate without further action by
the parties, 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 those covenants and
obligations which expressly survive termination of this Agreement. In the
event that Purchaser does not exercise the option to terminate in accordance
with this Paragraph 6.1, the Closing shall take place on the Closing Date
(which date shall be extended by the parties as necessary if the Closing Date
was scheduled to occur within Purchaser's 10-day election period as provided
above) and Seller shall assign and transfer to Purchaser on the Closing Date
all of Seller's right, title and interest in and to all insurance proceeds paid
or payable to Seller on account of the fire or casualty and shall pay to
Purchaser the amount of Seller's insurance deductible. Notwithstanding anything
contained herein to the contrary, Seller's obligation to transfer all insurance
proceeds paid to Seller and the amount of Seller's insurance deductible as set
forth more fully in this Paragraph 6.1 shall survive the Closing and the
recording of the Deed.
6.2 If between the date of this Agreement and the Closing Date, any
condemnation or eminent domain proceedings are initiated which might result in
the taking of any part of the Property or the taking or closing of any right of
access to the Property, Seller shall immediately notify Purchaser of such
occurrence. In the event that the taking of any part of the Property shall, in
Purchaser's reasonable judgment: (i) impair access to the Property; (ii) cause
any non-compliance with any applicable law, ordinance, rule or regulation of
<PAGE>
any federal, state or local authority or governmental agencies having
jurisdiction over the Property or any portion thereof; or (iii) adversely
impair the use of the Property as it is currently being operated (hereinafter
collectively referred to as a "Material Event"), Purchaser may:
6.2.1 terminate this Agreement by written notice to Seller, in
which event the Earnest Money deposited by Purchaser, together with interest
thereon, shall be returned to Purchaser and all rights and obligations of the
parties hereunder with respect to the closing of this transaction will cease,
except for those covenants and obligations hereunder which expressly survive
termination of this Agreement; or
6.2.2 proceed with the Closing, in which event Seller shall
assign to Purchaser all of Seller's right, title and interest in and to any
award made or to be made in connection with such condemnation or eminent domain
proceedings. Notwithstanding anything contained herein to the contrary,
Seller's obligation to transfer Seller's interest in such award as set forth
more fully in this Paragraph 6.2.2 shall survive the Closing and the recording
of the Deed.
Purchaser shall then notify Seller, within five (5) business days after
Purchaser's receipt of Seller's notice, whether Purchaser elects to exercise
its rights under Paragraph 6.2.1 or Paragraph 6.2.2. Closing shall be delayed,
if necessary, until Purchaser makes such election. If Purchaser fails to make
an election within such five (5) business day period, Purchaser shall be deemed
to have elected to proceed with Closing in accordance with Paragraph 6.2.2. If
between the date of this Agreement and the Closing Date, any condemnation or
eminent domain proceedings are initiated which do not constitute a Material
Event, Purchaser shall be required to proceed with the Closing, in which event
Seller shall assign to Purchaser all of Seller's right, title and interest in
and to any award made in connection with such condemnation or eminent domain
proceedings.
7. INSPECTION AND AS-IS CONDITION.
7.1 During the period commencing on the date hereof and ending at 5:00
p.m. Chicago time on November 10, 1996 (said period being herein referred to as
the "Inspection Period"), Purchaser and the agents, engineers, employees,
contractors and surveyors retained by Purchaser may enter upon the Property to
inspect the Property and to conduct and prepare such studies, tests and surveys
as Purchaser may deem reasonably necessary and appropriate, including, without
limitation, a review of the Leases, the Lease files, and other relevant
contracts and materials located at the Property. In connection with
Purchaser's review of the Property, Seller has delivered to Purchaser copies of
the current rent roll for the Property, the most recent tax and insurance
bills, copies of the Leases, utility account numbers, a personal property
inventory, the Service Contracts, unaudited annual operating statements for the
period ending December 1995 and monthly unaudited operating statements for July
1996.
All of the foregoing tests, investigations and studies to be conducted
under this Paragraph 7.1 by Purchaser shall be subject to the following:
<PAGE>
(i) Such tests, inspections and investigations shall take place
during normal business hours upon reasonable notice to Seller or its designated
agents;
(ii) Except as may be required by Purchaser to complete its due
diligence during the Inspection Period, to obtain financing in order to close
this transaction or to comply with any requirements of any governmental agency
having jurisdiction over Purchaser, Purchaser's members or Purchaser's lender,
all information set forth in the documents to be reviewed hereunder by
Purchaser, its employees and agents shall be held in strict confidence until
Closing and thereafter for a period of 24 months from the date this Agreement
is terminated in the event that the Closing does not occur;
(iii) In the event the Closing does not occur, Purchaser shall
promptly return to Seller or destroy any documents obtained from Seller or
Seller's agents;
(iv) Purchaser shall not suffer or permit any lien, claim or
charge of any kind whatsoever to attach to the Property or any part thereof;
and
(v) such tests, investigations and studies shall be at
Purchaser's sole cost and expense, and in the event of any damage to the
Property caused by Purchaser, its agents, engineers, employees, contractors or
surveyors (including, without limitation, pavement, landscaping and surface
damage), Purchaser shall pay the reasonable cost incurred by Seller to repair
said damage.
Purchaser shall defend, indemnify and hold Seller and any affiliate or parent
of Seller, and all shareholders, employees, officers, directors and partners of
Seller or Seller's affiliate or parent (hereinafter collectively referred to as
"Affiliates of Seller") harmless from any and all liability, cost and expense
(including without limitation, reasonable attorneys' 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, tests,
studies and inspections 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. Prior to commencing
any such tests, studies and investigations, Purchaser shall furnish to Seller a
certificate of insurance evidencing comprehensive general public liability
insurance insuring the person, firm or entity performing such tests, studies
and investigations and listing Seller and Purchaser as additional insureds
thereunder.
Purchaser, in its sole discretion, shall have the right to terminate this
Agreement by giving written notice of such termination to Seller at any time
prior to the expiration of the Inspection Period. If written notice is not
given by Purchaser pursuant to this Paragraph 7.1 prior to the expiration of
the Inspection Period, then the right of Purchaser to terminate this Agreement
pursuant to this Paragraph 7.1 shall be waived and Purchaser shall deposit the
Additional Earnest Money in accordance with the Escrow Agreement on or before
the expiration of the Inspection Period. 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 from outside contractors
<PAGE>
or consultants in connection with its due diligence during the Inspection
Period; and (ii) the Earnest Money deposited by Purchaser shall be immediately
paid to Purchaser, together with any interest earned thereon, less the sum of
One Hundred and No/100 Dollars ($100.00), which shall be paid to Seller in
consideration for such period of inspection, and neither Purchaser nor Seller
shall have any right, obligation or liability under this Agreement, except for
those covenants and obligations which expressly survive the termination of this
Agreement. Notwithstanding anything contained herein to the contrary,
Purchaser's obligation to indemnify Seller, as more fully set forth in this
Paragraph 7.1, shall survive Closing and recording of the Deed and the
termination of this Agreement, as applicable.
7.2 Except for the express representations and warranties of Seller set
forth herein, Purchaser acknowledges and agrees that it will be purchasing the
Property and the Personal Property based solely upon its inspections and
investigations of the Property and the Personal Property, and that Purchaser
will be purchasing the Property and the Personal Property "AS IS" and "WITH ALL
FAULTS", based upon the condition of the Property and the Personal Property as
of the date of this Agreement, ordinary wear and tear and loss by fire or other
casualty or condemnation excepted and that Seller makes no warranty or
representation, express or implied, or arising by operation of law, including,
but not limited to, any warranty of condition, habitability, merchantability or
fitness for a particular purpose, in respect of the Property. Without limiting
the foregoing, Purchaser acknowledges that, except as may otherwise be
specifically set forth elsewhere in this Agreement, neither Seller nor its
consultants, brokers or agents have made any representations or warranties of
any kind upon which Purchaser is relying as to any matters concerning the
Property or the Personal Property, including, but not limited to: (i) the
condition of the Land or any improvements comprising the Property; (ii) the
existence or non-existence of any pollutant, toxic waste and/or any hazardous
materials or substances; (iii) economic projections or market studies
concerning the Property, or the income to be derived from the Property;
(iv) any development rights, taxes, bonds, covenants, conditions and
restrictions affecting the Property; (v) the nature and extent of any right of
way, lease, lien, encumbrance, license, reservation or other title matter;
(vi) water or water rights, topography, geology, drainage, soil or subsoil of
the Property; (vii) the utilities serving the Property; (viii) the suitability
of the Property for any and all activities and uses which Purchaser may elect
to conduct thereon; or (ix) the compliance of the Property with any zoning,
environmental, building or other laws, rules or regulations affecting the
Property. Nothing herein is intended to waive any rights Purchaser may have
against the Title Insurer or the surveyor providing the Survey, or to imply
that Purchaser is not relying on the information provided by the Title Insurer
or such surveyor. Seller makes no representation or warranty that the Property
complies with the Americans with Disabilities Act or any fire code or building
code. With the exception of any breach by Seller of a specific representation
provided in this Agreement, Purchaser hereby releases Seller and the Affiliates
of Seller from any and all liability in connection with any claims which
Purchaser may have against Seller or the Affiliates of Seller, and Purchaser
hereby agrees not to assert any claims for contribution, cost recovery or
otherwise, against Seller or the Affiliates of Seller, relating directly or
indirectly to the existence of asbestos or hazardous materials 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
<PAGE>
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, 42 U.S.C. Section 9601 et seq.; the Toxic Substance Control Act, 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, 42 U.S.C.
Section 9601. et seq.; the Clean Water Act, 33 U.S.C. Section 1251; the Safe
Drinking Water Act, 42 U.S.C. Section 30Of et seq; the Clean Air Act, 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, "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. Purchaser acknowledges that having been given the opportunity to
inspect the Property, Purchaser is relying solely on its own investigation of
the Property and the information obtained in the Title Commitment and the
Survey and not on any information provided or to be provided by Seller.
Purchaser further acknowledges that the information provided and to be provided
with respect to the Property was obtained from a variety of sources, and that
Seller (x) has not made any independent investigation or verification of such
information and (y) makes no representations as to the accuracy or completeness
of such information, except as provided herein.
7.3 Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Except for the express representations
and warranties of Seller set forth herein, Seller makes no representation or
warranty that such material is complete or accurate or that Purchaser will
achieve similar financial or other results with respect to the operations of
the Property, it being acknowledged by Purchaser that Seller's operation of the
Property and allocations of revenues or expenses may be vastly different than
Purchaser may be able to attain. Purchaser acknowledges that it is a
sophisticated and experienced purchaser of real estate and further that
Purchaser has relied upon its own investigation and inquiry with respect to the
operation of the Property and releases Seller and the Affiliates of Seller from
any liability with respect to such historical information.
7.4 Seller has provided to Purchaser the ACM Survey dated September 1992
prepared by Law Engineering ("Existing Reports"). Seller makes no
representation or warranty concerning the accuracy or completeness of the
Existing Reports. Purchaser hereby releases Seller and the Affiliates of
Seller from any liability whatsoever with respect to the Existing Reports,
including, without limitation, the matters set forth in the Existing Reports,
and the accuracy and/or completeness of the Existing Reports. Furthermore,
Purchaser acknowledges that it will be purchasing the Property with all faults
disclosed in the Existing Reports.
<PAGE>
7.5 Notwithstanding anything contained herein to the contrary, the
acknowledgements, agreements, waivers and releases of Purchaser set forth in
this Paragraph 7 shall survive Closing and recording of the Deed and the
termination of this Agreement as applicable.
8. CLOSING. The closing of this transaction ("Closing") shall take place on
the date which is forty-five (45) days after the end of the Inspection Period,
or such earlier date as may be agreed upon by Seller and Purchaser ("Closing
Date"), at the office of Seller's attorneys, Hopkins & Sutter, Three First
National Plaza, Suite 4300, Chicago, Illinois 60602, or at Seller's option, at
the office of the Title Insurer in Chicago, Illinois, at which time Seller
shall deliver possession of the Property to Purchaser. This transaction shall
be closed in accordance with escrow instructions provided by the parties hereto
to the escrow closing agent for the Title Insurer. All deed and money escrow
fees shall be paid one-half by Seller and one-half by Purchaser. Seller shall
pay any gap endorsement charges and "New york style" closing fees.
9. CLOSING DOCUMENTS.
9.1 On the Closing Date, Seller and Purchaser shall execute and deliver
to one another a joint closing statement. In addition, Purchaser shall deliver
to Seller the balance of the Purchase Price, an assumption of the documents set
forth in Paragraph 9.2.3 and 9.2.4, counterparts of any transfer tax
declarations and such other documents as may be reasonably required by the
Title Insurer and not inconsistent with the terms of this Agreement in order to
consummate the transaction as set forth in this Agreement.
9.2 On the Closing Date, Seller shall deliver to Purchaser the following:
9.2.1 the Deed, subject to Permitted Exceptions and those Unpermitted
Exceptions waived by Purchaser in writing or not objected to by Purchaser in
accordance with Paragraph 5.1 hereof;
9.2.2 a special warranty bill of sale conveying the Personal Property
(in the form of Exhibit H attached hereto);
9.2.3 assignment and assumption (with respect to periods from and
after the Closing) of intangible property (in the form attached hereto as
Exhibit I);
9.2.4 an assignment and assumption (with respect to periods from and
after the Closing) of Leases and security deposits (in the form attached hereto
as Exhibit J);
9.2.5 non-foreign affidavit (in the form of Exhibit K attached
hereto);
9.2.6 originals, and/or copies of, the Leases in Seller's possession
(unless Seller elects to leave such documents in the on-site management
office);
9.2.7 all documents and instruments reasonably required by the Title
Insurer to issue the Title Policy;
<PAGE>
9.2.8 possession of the Property to Purchaser, subject to the Leases
and the Permitted Exceptions;
9.2.9 evidence of the termination of the management agreement, along
with a lien waiver executed by the property manger, if applicable;
9.2.10 notice to the tenants of the Property of the transfer of title
and assumption by Purchaser of the landlord's obligation under the Leases and
the obligation to refund the refundable security deposits (in the form of
Exhibit L);
9.2.11 an updated rent roll certified by Seller to be true and
correct, subject to the provisions of Paragraph 17.1 and Paragraph 19 hereof;
9.2.12 a Broker's Lien Waiver signed by Insignia Mortgage and
Investment Company ("Insignia");
9.2.13 an Owner's Title Affidavit or ALTA extended coverage statement
in form reasonably acceptable to Seller and Title Insurer;
9.2.14 such formative and authorization documents of Seller as may be
reasonably required by Title Insurer;
9.2.15 copies of all books and records as may be necessary to
calculate tenant escalations and reconciliations (unless Seller elects to leave
such documents in the on-site management office);
9.2.16 certification from Seller that the representations made in
Section 17.2 of this Agreement is true and correct as of the Closing Date; and
9.2.17 certificates of insurance from Seller's insurance carrier
indicating the Purchaser has been named as an additional insured on Seller's
comprehensive general liability policy with respect to occurrences on or prior
to the Closing Date.
10. ESTOPPEL CERTIFICATES.
10.1 Seller agrees to use reasonable efforts to obtain tenant estoppel
certificates in the form of Exhibit M ("Tenant Certificates") for tenants
listed on the rent roll attached hereto as Exhibit N. Seller shall attempt to
deliver to Purchaser prior to Closing, Tenant Certificates for tenants at the
Property (and Purchaser hereby acknowledges that a Tenant may respond on the
form of certificate, if any, required under its Lease) which equal 75% of all
leased office space at the Property ("Required Amount"). If Seller is unable
to obtain the Required Amount of Tenant Certificates, Seller shall be obligated
to deliver to Purchaser a Seller Tenant Certificate for those tenants who fail
to execute and return a Tenant Certificate, to the extent necessary to achieve
the Required Amount. As used herein, "Seller Tenant Certificate" shall mean a
Tenant Certificate signed by Seller with respect to a particular tenant which
failed to execute and deliver a Tenant Certificate.
10.2 Notwithstanding anything contained herein to the contrary, the
representations and warranties contained in any Seller Tenant Certificate
executed by Seller (i) shall be made only to the knowledge of Seller as set
<PAGE>
forth in Paragraph 17 hereof, and (ii) shall be subject to the provisions of
Paragraph 18 hereof.
10.3 Upon receipt after Closing by Purchaser of a Tenant Certificate
containing the information herein required from a tenant under a Lease for whom
Seller has executed and delivered a Seller Tenant Certificate at Closing, or
from any other tenant or tenants which would, in computing the Required Amount,
negate the need for any or all of the Seller Tenant Certificates, any Seller
Tenant Certificate executed and delivered by Seller at Closing which is no
longer needed in achieving the Required Amount shall become null and void, and
the Tenant Certificates received from the tenant or tenants shall be
substituted therefor.
11. SERVICE CONTRACTS. On the Closing Date, Seller shall assign the Service
Contracts to Purchaser, and Purchaser shall assume in writing responsibility of
the obligations arising from and after the Closing Date under the Service
Contracts. Seller shall use reasonable efforts to obtain any required consent
with respect to the assignment of the Service Contracts; provided, however,
that Seller's inability to obtain such approval shall not be a default
hereunder or a condition precedent to Purchaser's obligations to close
hereunder. Purchaser may, however, decline to accept an assignment of any
Service Contract for which Seller fails to obtain any such required consent.
12. LEASING OF PROPERTY. Prior to the expiration of the Inspection Period,
Seller shall deliver to Purchaser a copy of any new leases or modifications or
extensions executed by Seller from and including the date hereof through the
end of the Inspection Period, together with information as to any tenant
improvement obligations and leasing commissions, and such other information as
Purchaser may reasonably require. Such new leases or lease modifications and
extensions shall be included in the definition of Leases and Purchaser shall be
responsible to pay for all leasing commissions, tenant improvement costs or
other costs and expenses (including reasonable attorneys' fees) incurred by
Seller with respect to such leases except that Seller shall pay a portion of
such costs equal to the amount obtained by multiplying such costs by a
fraction, the numerator of which is the number of days from the date the tenant
under any such lease is obligated to commence rent payments through the Closing
Date, and the denominator of which is the number of days in the term of such
lease. After the expiration of the Inspection Period, Seller shall not enter
into any lease for any portion of the Property or any cancellation,
modification, extension or amendment to any Lease without first obtaining the
prior consent of Purchaser, which consent shall not be unreasonably withheld.
If Purchaser has not responded within five (5) business days of receipt of a
written request by Seller, Purchaser's consent shall be deemed given. If
Purchaser closes the transaction contemplated by this Agreement, Purchaser
shall be responsible to pay for all leasing commission, tenant improvement
costs or other costs and expenses (including reasonable attorneys' fees)
incurred by Seller with respect to any such lease approved by Purchaser.
Seller agrees to pay any outstanding brokerage commissions now or hereafter due
or payable with respect to the existing term of any Lease. Seller does not
represent or warrant that any particular Lease will be in effect at Closing or
that the tenant will have performed the tenant's obligations thereunder. The
termination of any Lease prior to Closing by reason of a tenant's default will
not affect the obligations of Purchaser under this Agreement in any manner, or
entitle Purchaser to an abatement of or credit against the Purchase Price, or
give rise to any other claim by Purchaser, and if any space in the Improvements
<PAGE>
is vacant on the Closing Date, Purchaser will accept the Premises subject to
the vacancy.
13. 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 WITH RESPECT TO DAMAGES OR ANY
OTHER REMEDY, EXCEPT FOR THOSE COVENANTS AND OBLIGATIONS OF PURCHASER WHICH
EXPRESSLY SURVIVE TERMINATION OF THIS AGREEMENT. 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.
14. 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, EXCEPT THAT PURCHASER SHALL ALSO
HAVE THE RIGHT TO RECEIVE FROM SELLER ITS ACTUAL, DOCUMENTED THIRD PARTY
EXPENSES INCURRED IN THE PERFORMANCE OF ITS DUE DILIGENCE HEREUNDER (NOT TO
EXCEED $50,000 IN ANY EVENT) AND UPON THE RETURN OF THE EARNEST MONEY AND THE
REIMBURSEMENT BY SELLER OF PURCHASER'S DUE DILIGENCE COSTS AS PROVIDED ABOVE,
THIS AGREEMENT SHALL TERMINATE WITHOUT FURTHER ACTION OF THE PARTIES AND THE
PARTIES SHALL HAVE NO FURTHER LIABILITY TO EACH OTHER AT LAW OR IN EQUITY,
EXCEPT FOR THOSE COVENANTS AND OBLIGATIONS WHICH EXPRESSLY SURVIVE TERMINATION
OF THIS AGREEMENT. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY,
IF SELLER'S DEFAULT RESULTS FROM (i) ITS (AND NOT AN UNRELATED THIRD PARTY'S)
AFFIRMATIVE ACTION (OR SELLER'S FAILURE TO ACT WHERE IT HAS AN OBLIGATION TO
ACT) WHICH RESULTS IN THE RECORDING OF AN ENCUMBRANCE AGAINST THE PROPERTY AND
WHICH GIVES RISE TO PURCHASER'S RIGHT TO TERMINATE THIS AGREEMENT PURSUANT TO
PARAGRAPH 5 HEREOF; (ii) ITS FAILURE TO EXPEND UP TO $25,000 IF (a) SELLER IS
ABLE TO BOND OVER, CURE OR REMOVE A MINOR UNPERMITTED EXCEPTION FOR A COST NOT
TO EXCEED $25,000 OR (b) THE TITLE INSURER IS WILLING TO INSURE OVER A MINOR
UNPERMITTED EXCEPTION FOR A COST NOT TO EXCEED $25,000 IN ACCORDANCE WITH THE
TERMS HEREOF OR (iii) ITS REFUSAL TO DELIVER THE DEED, THEN PURCHASER WILL BE
ENTITLED TO SUE FOR SPECIFIC PERFORMANCE. IN NO EVENT SHALL SELLER BE LIABLE
FOR ANY ACTUAL, PUNITIVE, SPECULATIVE OR CONSEQUENTIAL DAMAGES RESULTING FROM
ANY DEFAULT BY SELLER.
15. PRORATIONS.
15.1 Water and other utility charges; fuels; prepaid operating expenses;
real and personal property taxes prorated on a "net" basis (i.e. adjusted for
all tenants' liabilities, if any, for such items); operating expenses paid by
Seller which are reimbursable by the tenants for the period prior to the
Closing Date, less any amount previously paid by the tenants; unpaid operating
expenses for the period prior to the Closing Date prorated on a "net" basis, as
set forth above; and all other items of expense and income shall be adjusted
ratably as of 12:01 a.m. on the Closing Date ("Proration Date"). Seller shall
be entitled to a credit for all transferable utility deposits transferred
hereunder, if any, and all other utility deposits, if any, may be withdrawn by
and refunded to Seller and Purchaser shall make its own replacement deposits
for utilities as may be required by the respective utilities involved.
Assessments, excluding regular ad valorem real estate taxes, payable in
<PAGE>
installments which are due prior to the Closing Date shall be paid by Seller.
Assessments, excluding regular ad valorem real estate taxes, payable in
installments which are due subsequent to the Closing Date shall be paid by
Purchaser. If the amount of any of the items to be prorated is not then
ascertainable, the adjustments thereof shall be on the basis of the most recent
ascertainable data, except that if the amount of any real estate taxes to be
prorated is not then ascertainable, the adjustment shall be on the basis of
105% of the most recent ascertainable data and shall take into account any
assessment reductions obtained by Seller for the Property. All prorations will
be final except as to delinquent rent referred to in Paragraph 15.2 below and
as provided in Paragraphs 15.2 and 15.3.
15.2 All basic rent paid following the Closing Date by any tenant of the
Property who is indebted under a Lease for basic rent for any period prior to
the Proration Date in an amount greater than the amount of all current basic
rent owed by said tenant to Purchaser shall be deemed a "Post-Closing Receipt"
until the earlier to occur of (i) one year after the Closing Date, or (ii) such
time as all such indebtedness is paid in full. Within ten (10) days following
the end of each calendar month, Purchaser shall pay to Seller Post-Closing
Receipts collected in the previous month. Purchaser shall use its reasonable,
good faith efforts, at no additional cost or expense to Purchaser, to collect
all amounts which, upon collection, would constitute Post-Closing Receipts
hereunder. Within 30 days after the one-year anniversary of the Closing Date,
upon the written request of Seller, Purchaser shall deliver to Seller a
reconciliation statement of Post-Closing Receipts through the first year 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. Purchaser shall provide Seller with any information reasonably
necessary 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.
Purchaser's obligations to attempt to collect Post- Closing Receipts shall
expire one year from the Closing Date. Seller shall retain the right to sue
any tenant for rent owed to Seller for any period prior to the Proration Date.
This Paragraph 15.2 of this Agreement shall survive the Closing and the
delivery and recording of the Deed.
15.3 Seller covenants to operate, maintain 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.
16. BROKER. The parties hereto represent and warrant that no broker commission
or finder fee is due and payable in connection with this transaction, by reason
of their respective actions, other than to Insignia (to be paid by Seller).
Seller's commission to Insignia shall only be payable out of the proceeds of
the sale of the Property in the event the transaction set forth herein closes.
Purchaser and Seller shall indemnify, defend and hold the other party hereto
harmless from any claim whatsoever (including without limitation, reasonable
attorneys' fees, court costs and costs of appeal) from anyone claiming by or
through the indemnifying party any fee, commission or compensation on account
of this Agreement, its negotiation or the sale hereby contemplated other than
to Insignia. Seller shall indemnify, defend and hold Purchaser harmless from
any claim (including, without limitation, reasonable attorneys' fees, court
<PAGE>
costs and costs of appeal) for any claim by Insignia for any fee, commission or
compensation on account of this Agreement, its negotiation or the sale hereby
contemplated, other than any claim by Insignia on account of any agreement or
negotiations between Insignia and Purchaser. The indemnifying party shall
undertake its obligations set forth in this Paragraph 16 using attorneys
selected by the indemnifying party and reasonably acceptable to the indemnified
party. The provisions of this Paragraph 16 will survive the Closing and
delivery of the Deed.
17. REPRESENTATIONS AND WARRANTIES.
17.1 Any reference herein to Seller's knowledge or notice of any matter or
thing shall only mean such knowledge or notice that has actually been received
by James Mendelson or Thomas Molina ("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 (other
than Seller's Representatives) 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.
17.2 Subject to the limitations set forth in Paragraph 17.1, Seller hereby
makes the following representations and warranties, which representations and
warranties are made to Seller's knowledge and which shall not survive Closing:
(i) Seller has no knowledge of any pending or threatened litigation, claim,
cause of action or administrative proceeding concerning the Property; (ii)
Seller has the power to execute this Agreement and consummate the transactions
contemplated herein; (iii) the rent rolls attached hereto as Exhibit N and
updated as of the Closing Date are accurate in all material respects as of the
date set forth therein; (iv) the Seller has not given or suffered any
assignment, pledge or encumbrance with respect to any of the Leases or its
interests thereunder; (v) the list of Service Contracts attached hereto as
Exhibit D is accurate as of the date hereof; (vi) Seller has received no
written notice or claim from any governmental authority having jurisdiction
over the Property relating to an uncured breach or violation of the Americans
With Disabilities Act or any Environmental Laws or any other laws in connection
with the Property; (vii) Seller has no knowledge of any uncured landlord
default in connection with any Lease; (viii) to Seller's knowledge, the
materials delivered to Purchaser in accordance with Section 7 hereof are
correct and complete in all material respects; and (ix) to Seller's knowledge
there are no environmental reports in Seller's possession or control with
respect to the Property other than the Existing Reports provided to Purchaser.
17.3 Purchaser hereby represents and warrants to Seller that Purchaser has
the full right, power and authority to execute this Agreement and consummate
the transactions contemplated herein.
18. LIMITATION OF LIABILITY. None of Seller's beneficiaries, shareholders,
partners, officers, agents, employees, heirs, successors or assigns shall have
any personal liability of any kind or nature for or by reason of any matter or
thing whatsoever under, in connection with, arising out of or in any way
related to this Agreement and the transactions contemplated herein, and
Purchaser hereby waives for itself and anyone who may claim by, through or
under Purchaser any and all rights to sue or recover on account of any such
alleged personal liability.
<PAGE>
19. NOTICES. Any notice or demand which either party hereto is required or
may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by overnight courier
such as Federal Express or made by United States registered or certified mail
addressed as follows:
TO SELLER: c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attention: Ilona Adams
with copies to: The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attention: James Mendelson
TO PURCHASER: Transwestern Investment Company, L.L.C.
Three First National Plaza
Suite 3750
Chicago, Illinois 60602
Attention: Randy Bessolo
with copies to: Catherine Young
Assistant General Counsel
The Northwestern Mutual Life Insurance Company
720 E. Wisconsin Avenue
Milwaukee, Wisconsin 53202
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 fourth (4th) business day after the same is deposited in the United
States Mail as registered or certified mail, 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. All time
periods for responses by either party set forth in this Agreement shall
commence upon the receipt of notice as set forth hereinabove.
20. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute two
(2) copies of this Agreement and three (3) copies of the Escrow Agreement and
forward them to Seller for execution. Seller will forward one (1) copy of the
executed Agreement to Purchaser and will forward to the Escrow Agent the 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.
<PAGE>
21. JURISDICTION AND VENUE
Seller and Purchaser each hereby irrevocably submits to the jurisdiction
of any State or Federal court sitting in the County of Cook and State of
Illinois over any action or proceeding arising out of or relating to this
Agreement, and Seller and Purchaser each hereby irrevocably agrees that all
claims in respect of such action or proceeding may be heard or determined in
any such State or Federal court except that Purchaser reserves the right to
seek to remove any such action brought in such State court to such Federal
court. Seller and Purchaser each hereby irrevocably waives, to the fullest
extent it may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding. Seller and Purchaser each
irrevocably consents to the service of any and all process in any such action
or proceeding by the mailing of copies of such process to Seller or Purchaser,
as the case may be, at its respective address specified in Paragraph 19 hereof.
Seller and Purchaser each hereby agrees that the final judgment in any such
action or proceeding shall be conclusive and may be enforced in any other
jurisdiction by suit on the judgment or in any other matter provided by law.
Nothing in this paragraph shall affect the right of Seller or Purchaser, as the
case may be, to serve legal process in any other manner permitted by law or
affect the right of Seller or Purchaser, the case may be, to bring any action
or proceeding against the other in the courts of any other jurisdiction.
22. MISCELLANEOUS
(a) Time is of the essence of each provision of this Agreement.
(b) This Agreement and all provisions hereof shall extend to and be
obligatory upon and inure to the benefit of the respective heirs, legatees,
legal representatives, successors and assigns of the parties hereto. Purchaser
may assign its rights under this Agreement to an affiliate, provided that
Purchaser shall not be released from any liability incurred hereunder prior to
the date of such assignment.
(c) The section and paragraph headings of this Agreement are for
convenience only and in no way define, limit or enlarge the scope or meaning of
the language hereof. The terms "hereby," "herein," "hereof," "hereto,"
"hereunder" and any similar terms used in this Agreement refer to this
Agreement. The term "including" shall not be construed in a limiting nature,
but shall be construed to mean "including, without limitation." Words
importing persons shall include firms, associations, partnerships, trusts,
corporations and other legal entities, including public bodies, as well as
natural persons. Words importing the singular shall include the plural and
vice versa. Words of the masculine gender shall be deemed to include
correlative words of the feminine and neuter genders.
(d) This Agreement contains the entire agreement between the parties
relating to the transactions contemplated hereby, and all prior or
contemporaneous agreements, understandings, representations and statements,
oral or written, are merged herein. No representations, warranties,
undertakings or promises (whether oral or written, express or implied), can be
made or have been made by Seller or its agents, representatives or brokers to
Purchaser or any other person unless expressly stated herein. No modification
or amendment of this Agreement or any waiver of any provision hereof shall be
<PAGE>
effective unless the same is in writing signed by the party against whom
enforcement of such modification, amendment or waiver is sought.
(e) This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas. If any of the provisions of this
Agreement or the application thereof to any persons or circumstances shall, to
any extent, be deemed invalid or unenforceable, the remainder of this Agreement
and the application of such provisions to persons or circumstances other than
those as to whom or which it is held invalid or unenforceable shall not be
affected thereby, and every provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
(f) This Agreement and any document or instrument executed pursuant
hereto may be executed in any number of counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
(g) The submission by Seller of this Agreement to Purchaser for
examination does not constitute an offer by Seller to sell, or a reservation of
or option to purchase the Property. This Agreement shall not become a contract
until executed and delivered by Purchaser and Seller in the manner set forth
herein.
(h) If Purchaser consists of more than one person or entity, then
each such person or entity executing this Agreement as Purchaser shall be
jointly and severally liable for the obligations of Purchaser hereunder.
(i) Purchaser shall not record this Agreement or any memorandum
hereof, and any such recording shall be a default hereunder.
(j) Prior to the Closing Date, Purchaser and Seller shall jointly
prepare and issue all releases of information relating to the sale of the
Property, and any inquiries regarding the transaction contemplated hereby shall
be responded to only after consultation with the other party hereto.
(k) If either party institutes a legal action against the other
relating to this Agreement or any default hereunder, the unsuccessful party to
such action will reimburse the successful party for the reasonable expenses of
prosecuting or defending such action, including without limitation, the costs
of prosecuting or defending all appeals thereof, and attorneys fees and
disbursements and court costs.
(l) This Agreement shall not be construed more strictly against one
party than against the other merely by virtue of the fact that the Agreement
may have been prepared primarily by counsel for one of the parties, it being
recognized that both Purchaser and Seller have contributed substantially and
materially to the preparation of this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.
PURCHASER:
TRANSWESTERN INVESTMENT COMPANY, L.L.C.
By: /s/ Randal Bessolo
---------------------------------
Name: Randal Bessolo
---------------------------------
Its: Managing Director
---------------------------------
SELLER:
PACIFIC CENTER INVESTORS, a joint venture
By: Labroc I Limited Partnership, an Illinois
limited partnership
By: Balcor Equity Partners-I, an Illinois
general partnership, its general
partner
By: The Balcor Company, a Delaware
corporation, a partner
By: /s/ James E. Mendelson
-------------------------------
Name: James E. Mendelson
-------------------------------
Its: Authorized Representative
-------------------------------
By: Labroc II Limited Partnership, an Illinois
limited partnership
By: Balcor Equity Partners-II,
an Illinois general partnership,
its general partner
By: The Balcor Company, a Delaware
corporation, a partner
By: /s/ James E. Mendelson
-------------------------------
Name: James E. Mendelson
-------------------------------
Its: Authorized Representative
-------------------------------
<PAGE>
LIST OF EXHIBITS
A. Legal Description
B. Personal Property
C. Leases
D. Service and Maintenance Contracts
E. Escrow Agreement
F. Copy of Title Commitment
G. Limited Warranty Deed
H. Special Warranty Bill of Sale
I. Assignment and Assumption of Intangible Property
J. Assignment and Assumption of Leases and Security Deposits
K. FIRPTA
L. Tenant Notice Letter
M. Tenant Estoppel Certificate
N. Rent Roll
<PAGE>
