SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- - -----
EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 1995
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- - -----
EXCHANGE ACT OF 1934.
For the transition period from to
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Commission file number 0-13233
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BALCOR PENSION INVESTORS-V
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Illinois 36-3254673
- - ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Balcor Plaza
4849 Golf Road, Skokie, Illinois 60077-9894
- - ---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (708) 677-2900
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Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
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<PAGE>
BALCOR PENSION INVESTORS-V
(An Illinois Limited Partnership)
BALANCE SHEETS
March 31, 1995 and December 31, 1994
(Unaudited)
ASSETS
1995 1994
------------- -------------
Cash and cash equivalents $ 19,065,206 $ 16,045,584
Escrow deposits - restricted 504,919 384,625
Accounts and accrued interest receivable 504,008 604,189
Deferred expenses, net of accumulated
amortization of $458,147 in 1995
and $302,661 in 1994 193,568 349,054
------------- -------------
20,267,701 17,383,452
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Investment in loans receivable:
Loans receivable - wrap-around, first
and junior mortgages 46,154,030 45,975,827
Investment in acquisition loan 8,499,909 8,517,335
Less:
Loans payable - underlying mortgages 3,876,956 3,998,692
Allowance for potential loan losses 5,957,614 5,957,614
------------- -------------
Net investment in loans receivable 44,819,369 44,536,856
Real estate held for sale (net of allowance
of $5,737,890 in 1995 and $6,055,000 in
1994) 48,795,845 51,051,376
Investment in joint ventures - affiliates 5,125,004 5,004,625
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98,740,218 100,592,857
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$119,007,919 $117,976,309
============= =============
LIABILITIES AND PARTNERS' CAPITAL
Accounts and accrued interest payable $ 211,611 $ 229,664
Due to affiliates 190,498 136,543
Other liabilities, principally escrow
deposits and accrued real estate taxes 1,002,632 998,713
Security deposits 367,963 356,629
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Total liabilities 1,772,704 1,721,549
Partners' capital (439,305 Limited Partnership
Interests issued and outstanding) 117,235,215 116,254,760
------------- -------------
$119,007,919 $117,976,309
============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR PENSION INVESTORS-V
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended March 31, 1995 and 1994
(Unaudited)
1995 1994
------------- -------------
Income:
Interest on loans receivable,
and from investment in
acquisition loan $ 1,590,255 $ 2,000,329
Less interest on loans payable -
underlying mortgages 84,251 205,501
------------- -------------
Net interest income on loans receivable 1,506,004 1,794,828
Income from operations of real estate
held for sale 1,385,176 1,123,129
Interest on short-term investments 425,804 179,611
Participation in income of joint ventures -
affiliates 62,223 128,259
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Total income 3,379,207 3,225,827
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Expenses:
Amortization of deferred expenses 155,486 84,519
Administrative 273,373 330,606
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Total expenses 428,859 415,125
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Income before equity in loss from
investment in acquisition loan 2,950,348 2,810,702
Equity in loss from investment in
acquisition loan (17,426) (19,261)
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Net income $ 2,932,922 $ 2,791,441
============= =============
Net income allocated to General Partner $ 293,292 $ 279,144
============= =============
Net income allocated to Limited Partners $ 2,639,630 $ 2,512,297
============= =============
Net income per Limited Partnership Interest
(439,305 issued and outstanding) $ 6.01 $ 5.72
============= =============
Distribution to General Partner $ 195,247 $ 439,305
============= =============
Distribution to Limited Partners $ 1,757,220 $ 3,953,745
============= =============
Distribution per Limited Partnership Interest $ 4.00 $ 9.00
============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR PENSION INVESTORS-V
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the quarters ended March 31, 1995 and 1994
(Unaudited)
1995 1994
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Operating activities:
Net income $ 2,932,922 $ 2,791,441
Adjustments to reconcile net income to net
cash provided by operating activities:
Equity in loss from investment in
acquisition loan 17,426 19,261
Participation in income of joint
ventures - affiliates (62,223) (128,259)
Amortization of deferred expenses 155,486 84,519
Accrued interest income due at maturity (253,587) (210,616)
Net change in:
Escrow deposits - restricted (120,294) (58,864)
Accounts and accrued interest
receivable (39,001) 624,589
Accounts and accrued interest payable (18,053) (97,242)
Due to affiliates 53,955 81,037
Other liabilities 3,919 474,076
Security deposits 11,334 (15,991)
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Net cash provided by operating activities 2,681,884 3,563,951
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Investing activities:
Capital contributions to joint venture - (58,156)
affiliate
Distributions from joint venture - affiliate 125,632
Collection of principal payments on loans
receivable 75,384 140,254
Improvements to real estate (200,000)
Proceeds from sale of real estate 2,570,208
Costs incured in connection with the
sale of real estate (175,495)
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Net cash provided by investing activities 2,411,941 65,886
------------- -------------
Financing activities:
Distribution to Limited Partners (1,757,220) (3,953,745)
Distribution to General Partner (195,247) (439,305)
Principal payments on loans payable -
underlying mortgages (121,736) (152,465)
Repayment of loans payable - underlying
mortgages (4,689,871)
Principal payments on mortgage notes payable (4,004)
Repayment of mortgage note payable (2,241,349)
------------- -------------
<PAGE>
Net cash used in financing activities (2,074,203) (11,480,739)
------------- -------------
Net change in cash and cash equivalents 3,019,622 (7,850,902)
Cash and cash equivalents at beginning
of period 16,045,584 23,623,906
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Cash and cash equivalents at end of period $ 19,065,206 $ 15,773,004
============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR PENSION INVESTORS-V
(An Illinois Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policy:
Several reclassifications have been made to the previously reported 1994
statements to conform with the classifications used in 1995, including mortgage
servicing fees which have been reclassified and are included in administrative
expenses during 1995. These reclassifications have not changed the 1994
results. In the opinion of management, all adjustments necessary for a fair
presentation have been made to the accompanying statements for the quarter
ended March 31, 1995, and all such adjustments are of a normal and recurring
nature.
2. Interest Expense:
During the quarter ended March 31, 1994, the Partnership incurred and paid
interest expense on mortgage notes payable for properties held for sale of
$34,585.
3. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates for the
quarter ended March 31, 1995 are:
Paid Payable
----------- ----------
Mortgage servicing fees $31,452 $ 9,430
Reimbursement of expenses to
the General Partner, at cost: None 181,068
4. Sale of Real Estate:
In March 1995, the Partnership sold the Comerica Office Building in an all cash
sale for $2,570,208, net of a $379,792 credit against the sale price for tenant
improvements to be completed by the purchaser. The carrying value of the
property was $2,711,823. From the proceeds of the sale, the Partnership paid
$147,500 to an unaffiliated party as a sales commission and $27,995 in other
closing costs. The Partnership recognized a loss of $317,110, which was
written-off against the Partnership's previously established allowance for
potential losses.
5. Real Estate Held for Sale:
The Partnership acquired the Villa Medici Apartments through foreclosure in
March 1995. The property was classified as real estate held for sale as of
December 31, 1994. The Partnership recorded the fair value of the property at
$9,383,507. In addition, the Partnership reduced the basis of the property by
$115,493 for certain receivables, escrows, and costs recognized in connection
with the foreclosure. The property was transferred to real estate held for sale
at its fair value.
<PAGE>
6. Investment in Joint Venture - Affiliates:
The Partnership and three affiliates previously funded a $23,000,000 loan on
the 45 West 45th Street Office Building. In February 1995, the participants
received title to the property through foreclosure. The Partnership owns a
21.74% joint venture interest in the property.
7. Subsequent Event:
In April 1995, the Partnership made a distribution of $2,196,525 ($5.00 per
Interest) to the holders of Limited Partnership Interests which represented the
quarterly distribution for the first quarter of 1995.
<PAGE>
BALCOR PENSION INVESTORS-V
(An Illinois Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Balcor Pension Investors-V (the "Partnership") is a limited partnership formed
in 1983 to invest in wrap-around mortgage loans and first mortgage loans and,
to a lesser extent, other junior mortgage loans. The Partnership raised
$219,652,500 from sales of Limited Partnership Interests and utilized these
proceeds to fund thirty-four loans. Currently, there are eight loans
outstanding in the Partnership's portfolio, and the Partnership is operating
eight properties acquired through foreclosure and two investments in joint
ventures with affiliates.
Inasmuch as the management's discussion and analysis below relates primarily to
the time period since the end of the last fiscal year, investors are encouraged
to review the financial statements and the management's discussion and analysis
contained in the annual report for 1994 for a more complete understanding of
the Partnership's financial position.
Operations
- - ----------
Summary of Net Income
- - ---------------------
Net income increased for the quarter ended March 31, 1995 as compared to the
same period in 1994 primarily due to an increase in interest income on short-
term investments. Further discussion of the Partnership's operations is
summarized below.
1995 Compared to 1994
- - ---------------------
Interest income on loans receivable decreased during the quarter ended March
31, 1995 as compared to the same period in 1994 due to the foreclosure of the
Villa Medici Apartments in 1995.
Interest expense on loans payable decreased during the quarter ended March 31,
1995 as compared to the same period in 1994 due to the purchase of the Seven
Trails West Apartments underlying loan in March 1994.
The Partnership currently has two non-accrual loans which are collateralized by
Fairview Plaza I and II and the Seven Trails West Apartments. For non-accrual
loans, income is recorded only as cash payments are received from the
borrowers. Original funds advanced by the Partnership for these non-accrual
loans total approximately $15,080,000. During the quarter ended March 31, 1995,
the Partnership received cash payments totaling approximately $487,000 of net
interest income on these two loans. Under the terms of the original loan
agreements, the Partnership would have received approximately $758,000 of net
interest income during the quarter ended March 31, 1995.
<PAGE>
Income from operations of real estate held for sale represents net property
operations generated on nine of the properties the Partnership has acquired
through foreclosure. As mentioned below, the Partnership sold the Comerica
Office Building in March 1995. The original funds advanced by the Partnership
total approximately $69,545,000 for the eight remaining real estate
investments. The Partnership foreclosed on the Villa Medici Apartments in 1995.
As a result, income from operations of real estate held for sale increased for
the quarter ended March 31, 1995 as compared to the same period in 1994. See
Liquidity and Capital Resources below for further information.
Due to higher interest rates and Partnership cash balances during 1995,
interest income on short-term investments increased for the quarter ended March
31, 1995 as compared to the same period in 1994.
Participation in joint ventures with affiliates represents the Partnership's
share of the property operations at the Whispering Hills Apartments and the 45
West 45th Street Office Building. Primarily as a result of lower revenues at
the 45 West 45th Street Office Building, the participation in income of joint
ventures was lower during the quarter ended March 31, 1995 as compared to the
same period in 1994.
Allowances are charged to income when the General Partner believes an
impairment has occurred, either in a borrower's ability to repay the loan or in
the value of the collateral property. Determinations of fair value are made
periodically on the basis of performance under the terms of the loan agreement
and assessments of property operations. Determinations of fair value represent
estimations based on many variables which affect the value of real estate,
including economic and demographic conditions. The Partnership did not
recognize a provision for potential losses on its loans or real estate held for
sale during the quarter ended March 31, 1995 or 1994.
As a result of the sale of the Comerica Office Building and the full
amortization of the related deferred expenses, amortization expense increased
during the quarter ended March 31, 1995 as compared to the same period in 1994.
This increase was partially offset by a decrease in the amortization of
deferred expenses relating to the Glades on Ulmerton Apartments due to the 1994
prepayment of the underlying mortgage loan and the amortization of the related
deferred expenses in 1994.
Decreased legal fees resulted in a decrease in administrative expenses during
the quarter ended March 31, 1995 as compared to the same period in 1994.
Liquidity and Capital Resources
- - -------------------------------
The cash position of the Partnership increased as of March 31, 1995 when
compared to December 31, 1994. The Partnership's cash flow provided by
operating activities during 1995 was generated by net interest income received
from the Partnership's loans receivable and short-term investments, and cash
flow from the operation of the Partnership's properties held for sale. This
cash flow was partially offset by the payment of administrative expenses. The
Partnership also generated cash from its investing activities primarily as a
result of the sale of the Comerica Office Building. A portion of the cash
provided by operating activities and investing activities was utilized for
financing activities primarily consisting of distributions to Limited Partners
and the General Partner.
<PAGE>
The Partnership classifies the cash flow performance of its properties as
either positive, a marginal deficit or a significant deficit, each after
consideration of debt service payments unless otherwise indicated. A deficit is
considered to be significant once it exceeds $250,000 annually or 20% of the
property's rental and service income. The Partnership defines cash flow
generated from its properties as an amount equal to the property's revenue
receipts less property related expenditures, which include debt service
payments. During the quarters ended March 31, 1995 and 1994 all of the
Partnership's properties generated positive cash flow. In addition, the
Partnership also holds two minority joint venture interests. The Whispering
Hills Apartments generated positive cash flow for the quarters ended March 31,
1995 and 1994 and the 45 West 45th Street Office Building operated at a
marginal deficit during the quarters ended March 31, 1995 and 1994. Significant
leasing costs were incurred in 1995 at the 45 West 45th Street Office Building
to lease vacant space and renew existing tenant leases. These non-recurring
expenditures were not included in classifying the cash flow performance of the
property. Had these costs been included, this property would have generated a
significant deficit during the first quarter of 1995. As of March 31, 1995, the
occupancy rates of the Partnership's residential properties ranged from 90% to
95%, and the occupancy rates of the commercial properties ranged from 88% to
98%. The General Partner's goals are to maintain high occupancy levels, while
increasing rents where possible, and to monitor and control operating expenses
and capital improvement requirements at the properties.
Because of the weak real estate markets in certain cities and regions of the
country, attributable to local and regional market conditions such as
overbuilding and recessions in local economies and specific industry segments,
certain borrowers have requested that the Partnership allow prepayment of
mortgage loans. The Partnership has allowed some borrowers to prepay such
loans, in some cases without assessing prepayment premiums, under circumstances
where the General Partner believed that refusing to allow such prepayment would
ultimately prove detrimental to the Partnership in light of the probable
inability of the properties to generate sufficient revenues to keep loan
payments current. In other cases, borrowers have requested prepayment in order
to take advantage of lower available interest rates. In these cases, the
General Partner evaluates the request for prepayment along with the market
conditions on a case by case basis, and in some cases the Partnership collects
substantial prepayment premiums.
Certain borrowers have failed to make payments when due to the Partnership for
more than ninety days and, accordingly, these loans have been placed on non-
accrual status (income is recorded only as cash payments are received). The
General Partner has negotiated with some of these borrowers regarding
modifications of the loan terms and has instituted foreclosure proceedings
under certain circumstances. Such foreclosure proceedings may be delayed by
factors beyond the General Partner's control such as bankruptcy filings by
borrowers and state law procedures regarding foreclosures. Further, certain
loans made by the Partnership have been restructured to defer and/or reduce
interest payments where the properties collateralizing the loans were
generating insufficient cash flow to support property operations and debt
service. In the case of most loan restructurings, the Partnership receives
concessions, such as increased participations or additional interest accruals,
in return for modifications, such as deferral or reduction of basic interest
payments. There can be no assurance, however, that the Partnership will receive
actual benefits from the concessions.
<PAGE>
In March 1995 the Partnership sold the Comerica Office Building in an all cash
sale for $2,570,208. See Note 4 of Notes to Financial Statements for additional
information.
During March 1995, the Partnership was the successful bidder for the Villa
Medici Apartments at a foreclosure sale. See Note 5 of Notes to Financial
Statements and Item 1. Legal Proceedings for additional information.
The Partnership and three affiliates funded the $23,000,000 45 West 45th Street
Office Building mortgage loan. The Partnership funded $5,000,000 of the total
loan amount for a participating percentage of approximately 22%. In February
1995, the participants received title to the property through foreclosure.
The Noland Fashion Square Shopping Center loan is recorded by the Partnership
as an investment in an acquisition loan. The Partnership has recorded its share
of the property's operations as equity in loss from investment in acquisition
loan. The Partnership's share of operations has no effect on the cash flow of
the Partnership. Amounts representing contractually required debt service are
recorded as interest income.
In April 1995, the Partnership made a distribution of $2,196,525 ($5.00 per
Interest) to the holders of Limited Partnership Interests which represented the
quarterly distribution for the first quarter of 1995. To date including the
distribution in April 1995, Limited Partners have received cumulative cash
distributions of $462.25 per $500 Interest. Of this amount, $354.25 has been
Cash Flow from operations and $108.00 represents a return of Original Capital.
The level of the regular quarterly distribution increased from the fourth
quarter of 1994. In addition, during April 1995, the Partnership paid $183,044
to the General Partner as its distributive share of the Cash Flow distributed
for the first quarter of 1995 and made a contribution of $61,015 to the Early
Investment Incentive Fund.
The General Partner presently expects to continue making cash distributions
from the cash flow generated from property operations and by the receipt of
mortgage payments, less payments on the underlying loans, fees to the General
Partner and administrative expenses. The General Partner believes it has
retained, on behalf of the Partnership, an appropriate amount of working
capital to meet current cash or liquidity requirements which may occur.
Inflation has several types of potentially conflicting impacts on real estate
investments. Short-term inflation can increase real estate operating costs
which may or may not be recovered through increased rents and/or sales prices,
depending on general or local economic conditions. In the long-term, inflation
can be expected to increase operating costs and replacement costs and may lead
to increased rental revenues and real estate values.
<PAGE>
BALCOR PENSION INVESTORS-V
(An Illinois Limited Partnership)
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
- - -------------------------
(a) Villa Medici Apartments
Upon the dismissal by the U.S. Court of Appeals for the 10th Circuit Court of
the appeal filed by the borrower of the loan collateralized by the Villa Medici
Apartments (Wiston XXIV Limited Partnership vs. Balcor Pension Investors-V,
Case No.: 94-3281), the Partnership resumed its foreclosure proceedings in the
District Court of Johnson County, Kansas, (Balcor Pension Investors-V vs.
Wiston XXIV Limited Partnership, et al., Case No. 92-C-11570), and received
title to the property in March 1995. On April 27, 1995 the borrower filed a
petition for a writ of certiorari asking the U.S. Supreme Court to review the
appelate court's decision. The Partnership will continue to own the property
while the petition is pending.
(b) Comerica Plaza
In 1984, the Partnership funded a $9,250,000 loan collateralized by a first
mortgage on Comerica Plaza I & II, Dallas, Texas. The Partnership obtained
title to the property through foreclosure in 1987.
On March 31, 1995, the Partnership sold the property for a sale price of
$2,950,000 to an unaffiliated entity, Vortisch Holdings, L.P., a Texas limited
partnership. The Purchaser received a $379,792 credit against the sale price
for tenant leasing improvements at the property, and assumed the obligation to
pay such tenant improvements. The Partnership paid from the proceeds of the
sale $147,500 to an unaffiliated party as a sales commission and $27,995 in
closing costs. The General Partner will be reimbursed by the Partnership for
its actual expenses incurred in connection with the sale.
Item 6. Exhibits and Reports on Form 8-K
- - -----------------------------------------
(a) Exhibits:
(4) Form of Subscription Agreement set forth as Exhibit 4.1 to Amendment No. 1
dated January 16, 1984 to the Registrant's Registration Statement on Form S-11
(Registration No. 2-87662) and Form of Confirmation regarding Interests in the
Registrant set forth as Exhibit 4.2 to the Registrant's Report on Form 10-Q for
the quarter ended June 30, 1992 (Commission File No. 0-13233) are incorporated
herein by reference.
(27) Financial Data Schedule of the Registrant for the three month period
ending March 31, 1995 is attached hereto.
(99) Agreement of Sale relating to the sale of the Comerica Plaza I & II,
Dallas, Texas.
(b) Reports on Form 8-K: No reports were filed on Form 8-K during the quarter
ended March 31, 1995.
<PAGE>
SIGNATURES
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, thereunto duly authorized.
BALCOR PENSION INVESTORS-V
By: /s/Thomas E. Meador
----------------------------------------
Thomas E. Meador
President and Chief Executive Officer
(Principal Executive Officer) of Balcor
Mortgage Advisors-V, the General Partner
By: /s/Brian Parker
----------------------------------------
Brian Parker
Senior Vice President, and Chief Financial
Officer (Principal Accounting and Financial
Officer) of Balcor Mortgage Advisors-V, the
General Partner
Date: May 15, 1995
------------------------------
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 19065
<SECURITIES> 0
<RECEIVABLES> 45323
<ALLOWANCES> 11696
<INVENTORY> 0
<CURRENT-ASSETS> 20074
<PP&E> 48796
<DEPRECIATION> 0
<TOTAL-ASSETS> 119008
<CURRENT-LIABILITIES> 1773
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 117235
<TOTAL-LIABILITY-AND-EQUITY> 119008
<SALES> 0
<TOTAL-REVENUES> 3379
<CGS> 0
<TOTAL-COSTS> 273
<OTHER-EXPENSES> 173
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2933
<INCOME-TAX> 0
<INCOME-CONTINUING> 2933
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2933
<EPS-PRIMARY> 6.01
<EPS-DILUTED> 6.01
</TABLE>
AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), entered into as of the 31st day of
March, 1995, by and between VORTISCH HOLDINGS, L.P., a Texas limited
partnership ("Purchaser"), and COMERICA PLAZA 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 of Two Million Nine Hundred Fifty Thousand And No/100 Dollars
($2,950,000) (the "Purchase Price"), that certain property commonly known as
Comerica Plaza I & II, Dallas, Texas, legally described and depicted on
Exhibit A attached hereto (the "Property"). Included in the Purchase Price is
all of the personal property set forth in Exhibit B (the "Personal Property").
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as follows:
(a) Upon the execution of this Agreement, the sum of One Hundred Thousand
and No/100 Dollars ($100,000.00) (the "Earnest Money") to be held in
escrow by and in accordance with the provisions of the Escrow Agreement
("Escrow Agreement") attached hereto as Exhibit C; and
(b) On the "Closing Date" (hereinafter defined), the balance of the
Purchase Price, adjusted in accordance with the prorations, by federally
wired "immediately available" funds, on or before 11:00 a.m. Chicago time.
3. TITLE COMMITMENT AND SURVEY.
A. Attached hereto as Exhibit D is a copy of a title commitment for an
owner's standard title insurance policy issued by American Title Company as
agent for Lawyers Title Insurance Company, (hereinafter referred to as "Title
Insurer") dated March 6, 1995 for the Property (the "Title Commitment"). For
purposes of this Agreement, "Permitted Exceptions" shall mean: (a) the general
printed exceptions contained in the standard Texas owner's title policy to be
issued by Title Insurer based on the Title Commitment (including the survey
exception); (b) general real estate taxes not yet due and payable; (c) matters
shown on the "Survey" (hereinafter defined); (d) matters caused by the actions
of Purchaser; and (e) the title exceptions set forth in Schedule B of the Title
Commitment as Numbers 1 through 6, 9, and 10 through 16 inclusive, to the
extent that same effect the Property. All the other exceptions to title shall
be referred to as "Unpermitted Exceptions". The Title Commitment shall be
conclusive evidence of good title as therein shown as to all matters to be
insured by the title policy, subject only to the exceptions therein stated. On
the Closing Date, Title Insurer shall deliver to Purchaser a standard title
policy in conformance with the previously delivered Title Commitment, subject
only to Permitted Exceptions (the "Title Policy"). Seller shall pay for 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.
B. Purchaser has received a survey of the Property prepared by Brittain &
Crawford dated August 23, 1990 and last updated March 20, 1995 (the "Survey").
Seller shall pay for the costs of the Survey. Purchaser hereby acknowledges
that all matters disclosed by the Survey are acceptable to Purchaser.
<PAGE>
4. PAYMENT OF CLOSING COSTS.
A. In addition to the costs set forth in Paragraphs 3A and B, Seller
shall pay for the costs of the documentary or transfer stamps to be paid with
reference to the "Deed" (hereinafter defined) and all other stamps, intangible,
transfer, documentary, recording, sales tax and surtax imposed by law with
reference to any other sale documents delivered in connection with the sale of
the Property to Purchaser.
5. CONDITION OF TITLE.
A. If, prior to Closing, a date-down to the Title Commitment disclose an
Unpermitted Exception, Seller shall have thirty (30) days from the date of the
date-down to the Title Commitment, at Seller's expense, to (i) bond over, cure
and/or have any Unpermitted Exceptions which, in the aggregate, do not exceed
$25,000.00, removed from the Title Commitment or to have the Title Insurer
commit to insure against loss or damage that may be occasioned by such
Unpermitted Exceptions, or (ii) have the right, but not the obligation, to bond
over, cure and/or have any Unpermitted Exceptions which, in the aggregate,
equal or exceed $25,000.00, removed from the Title Commitment or to have the
Title Insurer commit to insure against loss or damage that may be occasioned by
such Unpermitted Exceptions. In such event, the time of Closing shall be
delayed, if necessary, to give effect to said aforementioned time periods. If
Seller fails to cure or have said Unpermitted Exception removed or have the
Title Insurer commit to insure as specified above within said thirty (30) day
period or if Seller elects not 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. Absent notice from Purchaser to Seller in accordance with the
preceding sentence, Purchaser shall be deemed to have elected to take title
subject to said Unpermitted Exception. If Purchaser terminates this Agreement
in accordance with the terms of this Paragraph 5A, this Agreement shall become
null and void without further action of the parties and all Earnest Money
theretofore deposited into the escrow by Purchaser together with any interest
accrued thereon, shall be returned to Purchaser, and neither party shall have
any further liability to the other, except for Purchaser's obligation to
indemnify Seller and restore the Property, as more fully set forth in Paragraph
7.
B. Seller agrees to convey fee simple title to the Property to Purchaser
by special warranty deed ("Deed") in recordable form subject only to the
Permitted Exceptions and any Unpermitted Exceptions waived by Purchaser.
<PAGE>
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
A. Except as provided in any indemnity provisions of this Agreement,
Seller shall bear all risk of loss with respect to the Property up to the
earlier of the dates upon which either possession or title is transferred to
Purchaser in accordance with this Agreement. Notwithstanding the foregoing, in
the event of damage to the Property by fire or other casualty prior to the
Closing Date, repair of which would cost less than or equal to $100,000.00 (as
determined by Seller in good faith) Purchaser shall not have the right to
terminate its obligations under this Agreement by reason thereof, but Seller
shall have the right to elect to either repair and restore the Property (in
which case the Closing Date shall be extended until completion of such
restoration) or to assign and transfer to Purchaser on the Closing Date all of
Seller's right, title and interest in and to all insurance proceeds paid or
payable to Seller on account of such fire or casualty. Seller shall promptly
notify Purchaser in writing of any such fire or other casualty and Seller's
determination of the cost to repair the damage caused thereby. In the event of
damage to the Property by fire or other casualty prior to the Closing Date,
repair of which would cost in excess of $100,000.00 (as determined by Seller in
good faith), then this Agreement may be terminated at the option of Purchaser,
which option shall be exercised, if at all, by Purchaser's written notice
thereof to Seller within five (5) business days after Purchaser receives
written notice of such fire or other casualty and Seller's determination of the
amount of such damages, and upon the exercise of such option by Purchaser this
Agreement shall become null and void, the Earnest Money deposited by Purchaser
shall be returned to Purchaser together with interest thereon, and neither
party shall have any further liability or obligations hereunder except for
Purchaser's obligations to indemnify Seller and restore the Property, as set
forth more fully in Paragraph 7A. 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.
B. If between the date of this Agreement and the Closing Date, any
condemnation or eminent domain proceedings are initiated which might result in
the taking of any part of the Property or the taking or closing of any right of
access to the Property, Seller shall immediately notify Purchaser of such
occurrence. In the event that the taking of any part of the Property shall:
(i) materially impair access to the Property; (ii) cause any material non-
compliance with any applicable law, ordinance, rule or regulation of any
federal, state or local authority or governmental agencies having jurisdiction
over the Property or any portion thereof; or (iii) materially and adversely
impairs the use of the Property as it is currently being operated (hereinafter
collectively referred to as a "Material Event"), Purchaser may:
(a) terminate this Agreement by written notice to Seller, in which event
the Earnest Money deposited by Purchaser, together with interest thereon,
shall be returned to Purchaser and all rights and obligations of the
parties hereunder with respect to the closing of this transaction will
cease, except for Purchaser's obligations to indemnify Seller and restore
the Property, as set forth more fully in Paragraph 7; or
(b) proceed with the Closing, in which event Seller shall assign to
Purchaser all of Seller's right, title and interest in and to any award
made in connection with such condemnation or eminent domain proceedings.
<PAGE>
Purchaser shall then notify Seller, within five (5) business days after
Purchaser's receipt of Seller's notice, whether Purchaser elects to exercise
its rights under subparagraph (a) or subparagraph (b) of this Paragraph 6B.
Closing shall be delayed, if necessary, until Purchaser makes such election.
If Purchaser fails to make an election within such five (5) business day
period, Purchaser shall be deemed to have elected to exercise its rights under
subparagraph (b).
If between the date of this Agreement and the Closing Date, any condemnation or
eminent domain proceedings are initiated which do not constitute a Material
Event, Purchaser shall be required to proceed with the Closing, in which event
Seller shall assign to Purchaser all of Seller's right, title and interest in
and to any award made in connection with such condemnation or eminent domain
proceedings.
7. INSPECTION AND AS-IS CONDITION.
A. During the period commencing on the date hereof and ending at 5:00
p.m. Chicago time on March 31, 1995 (said period being herein referred to as
the "Inspection Period"), Purchaser and the agents, engineers, employees,
contractors and surveyors retained by Purchaser may enter upon the Property, at
any reasonable time and upon reasonable prior notice to Seller, to inspect the
Property, including a review of leases located at the Property, and to conduct
and prepare such studies, tests and surveys as Purchaser may deem reasonably
necessary and appropriate. In connection with Purchaser's review of the
Property, Seller agrees to deliver to Purchaser copies of the current rent roll
for the Property, the most recent tax and insurance bills, utility account
numbers, service contracts, and unaudited year end 1994 and to date 1995
operating statements.
All of the foregoing tests, investigations and studies to be conducted under
this Paragraph 7A by Purchaser shall be at Purchaser's sole cost and expense
and Purchaser shall restore the Property to the condition thereof 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. 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.
<PAGE>
If Purchaser is dissatisfied with the results of the tests, studies or
investigations performed or information received pursuant to this Paragraph 7A,
Purchaser shall have the right to terminate this Agreement by giving written
notice of such termination to Seller at any time prior to the expiration of the
Inspection Period. If written notice is not given by Purchaser pursuant to
this Paragraph 7A prior to the expiration of the Inspection Period, then the
right of Purchaser to terminate this Agreement pursuant hereto shall be waived.
If Purchaser terminates this Agreement by written notice to Seller prior to the
expiration of the Inspection Period: (i) Purchaser shall promptly deliver to
Seller copies of all studies, reports and other investigations obtained by
Purchaser in connection with its due diligence during the Inspection Period;
and (ii) the Earnest Money shall be immediately paid to Purchaser, together
with any interest earned thereon, and neither Purchaser nor Seller shall have
any right, obligation or liability under this Agreement, except for Purchaser's
obligation to indemnify Seller and restore the Property, as more fully set
forth in this Paragraph 7A.
<PAGE>
B. Seller acquired title to the Property by foreclosure or deed in lieu
thereof and, therefore, Seller can make no representations or warranties
relating to the condition of the Property. Purchaser acknowledges and agrees
that it will be purchasing the Property based solely upon its inspections and
investigations of the Property, and that Purchaser will be purchasing the
Property "AS IS" and "WITH ALL FAULTS", based upon the condition of the
Property as of the date of this Agreement, wear and tear and loss by fire or
other casualty or condemnation excepted. Without limiting the foregoing,
Purchaser acknowledges that, except as may otherwise be specifically set forth
elsewhere in this Agreement, neither Seller nor its consultants, brokers or
agents have made any representations or warranties of any kind upon which
Purchaser is relying as to any matters concerning the Property, including, but
not limited to, the condition of the land or any improvements comprising the
Property, the existence or non-existence of toxic waste and/or any hazardous
materials or substances, economic projections or market studies concerning the
Property, any development rights, taxes, bonds, covenants, conditions and
restrictions affecting the Property, water or water rights, topography,
drainage, soil, subsoil of the Property, the utilities serving the Property or
any zoning, environmental or building laws, rules or regulations affecting the
Property. Seller makes no representation or warranty that the Property
complies with Title III of the Americans with Disabilities Act or any fire code
or building code. Purchaser hereby releases Seller and the Affiliates of
Seller from any and all liability in connection with any claims which Purchaser
may have against Seller, and Purchaser hereby agrees not to assert any claims
for contribution, cost recovery or otherwise, against Seller, relating directly
or indirectly to the existence of asbestos or hazardous materials or substances
on, or environmental conditions of, the Property, whether known or unknown. As
used herein, the term "hazardous materials or substances" means (i) hazardous
wastes, hazardous substances, hazardous constituents, toxic substances or
related materials, whether solids, liquids or gases, including but not limited
to substances defined as "hazardous wastes," "hazardous substances," "toxic
substances," "pollutants," "contaminants," "radioactive materials," or other
similar designations in, or otherwise subject to regulation under, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended ("CERCLA"), 42 U.S.C. Section 9601 et seq.; the Toxic Substance
Control Act ("TSCA"), 15 U.S.C. Section 2601 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1802; the Resource Conservation and
Recovery Act ("RCRA"), 42 U.S.C. Section 9601. et seq.; the Clean Water Act
("CWA"), 33 U.S.C. Section 1251 et seq.; the Safe Drinking Water Act, 42 U.S.C.
Section 300f et seq.; the Clean Air Act ("CAA"), 42 U.S.C. Section 7401 et
seq.; and in any permits, licenses, approvals, plans, rules, regulations or
ordinances adopted, or other criteria and guidelines promulgated pursuant to
the preceding laws or other similar federal, state or local laws, regulations,
rules or ordinance now or hereafter in effect relating to environmental matters
(collectively the "Environmental Laws"); and (ii) any other substances,
constituents or wastes subject to any applicable federal, state or local law,
regulator or ordinance, including any Environmental Law, now or hereafter in
effect, including but not limited to (A) petroleum, (B) refined petroleum
products, (C) waste oil, (D) waste aviation or motor vehicle fuel and (E)
asbestos.
<PAGE>
C. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Seller makes no representation or
warranty that such material is complete or accurate or that Purchaser will
achieve similar financial or other results with respect to the operations of
the Property, it being acknowledged by Purchaser that Seller's operation of the
Property and allocations of revenues or expenses may be vastly different than
Purchaser may be able to attain. Purchaser acknowledges that it is a
sophisticated and experienced purchaser of real estate and further that
Purchaser has relied upon its own investigation and inquiry with respect to the
operation of the Property and releases Seller from any liability with respect
to such historical information.
D. Seller has provided to Purchaser the following existing reports:
Phase I Environmental Assessment Prepared by BCM, dated October, 1991 and
Facility Survey Report prepared by Law Associates, Inc. dated December 22,
1988, (the "Existing Reports"). Seller makes no representation or warranty
concerning the accuracy or completeness of the Existing Reports. Purchaser
hereby releases Seller from any liability whatsoever with respect to the
Existing Reports, or, 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.
8. CLOSING. The closing of this transaction (the "Closing") shall be on
March 31, 1995 or other date, as mutually agreed (the "Closing Date"), at the
office of Title Insurer, Dallas, Texas, 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 Dallas, Texas, 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.
9. CLOSING DOCUMENTS.
A. On the Closing Date, Purchaser shall deliver to Seller an executed
closing statement, the balance of the Purchase Price, an assumption of the
documents set forth in Paragraph 9.B.(iii) and (iv) and such other documents as
may be reasonably required by the Title Insurer in order to consummate the
transaction as set forth in this Agreement.
<PAGE>
B. On the Closing Date, Seller shall deliver to Purchaser the following:
(i) the Deed (in the form of Exhibit E attached hereto), subject to
Permitted Exceptions and those Unpermitted Exceptions waived by
Purchaser;
(ii) a quit claim bill of sale conveying the Personal Property (in the
form of Exhibit F attached hereto);
(iii) assignment and assumption of intangible property (in the form
attached hereto as Exhibit G);
(iv) an assignment and assumption of leases and security deposits (in the
form attached hereto as Exhibit H);
(v) non-foreign affidavit (in the form of Exhibit I attached hereto);
(vi) original, and/or copies of, leases affecting the Property in Seller's
possession;
(vii) all documents and instruments reasonably required by the Title
Insurer to issue the Title Policy;
(viii) possession of the Property to Purchaser;
(xi) an executed closing statement;
(x) notice to the tenants of the Property of the transfer of title and
assumption by Purchaser of the landlord's obligation under the leases
and the obligation to refund the security deposits (in the form of
Exhibit J); and
(xi) an updated rent roll.
10. DEFAULT BY PURCHASER. ALL EARNEST MONEY DEPOSITED INTO THE ESCROW IS TO
SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND UNDERTAKINGS
UNDER THIS AGREEMENT. IN THE EVENT OF A DEFAULT OF THE PURCHASER UNDER THE
PROVISIONS OF THIS AGREEMENT, SELLER SHALL RETAIN ALL OF THE EARNEST MONEY AND
THE INTEREST THEREON AS SELLER'S SOLE LIQUIDATED DAMAGES AND REMEDY, EXCEPT FOR
PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER AND RESTORE THE PROPERTY AS SET
FORTH IN PARAGRAPH 7A HEREOF. THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL
DAMAGES, IN THE EVENT OF A DEFAULT BY PURCHASER, WOULD BE EXTREMELY DIFFICULT
OR IMPRACTICAL TO DETERMINE. THEREFORE, BY PLACING THEIR INITIALS BELOW, THE
PARTIES ACKNOWLEDGE THAT THE EARNEST MONEY HAS BEEN AGREED UPON, AFTER
NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES.
11. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, PURCHASER'S SOLE LIQUIDATED DAMAGES AND REMEDY SHALL BE THE RETURN OF
ALL EARNEST MONEY TOGETHER WITH ANY INTEREST ACCRUED THEREON, AND THIS
AGREEMENT SHALL THEN BECOME NULL AND VOID AND OF NO EFFECT AND THE PARTIES
SHALL HAVE NO FURTHER LIABILITY TO EACH OTHER AT LAW OR IN EQUITY, EXCEPT FOR
PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER AND RESTORE THE PROPERTY AS SET
FORTH MORE FULLY IN PARAGRAPH 7. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO
THE CONTRARY, IF SELLER'S DEFAULT IS ITS REFUSAL TO DELIVER THE DEED, THEN
PURCHASER WILL BE ENTITLED TO SUE FOR SPECIFIC PERFORMANCE.
<PAGE>
12. PRORATIONS.
A. Rents (exclusive of delinquent rents, but including prepaid rents);
refundable security deposits (which will be assigned to and assumed by
Purchaser and credited to Purchaser at Closing); water and other utility
charges; fuels; prepaid operating expenses; management fees in the amount of
6%; real and personal property taxes prorated on a "net" basis (i.e. adjusted
for all tenants' liability, if any, for such items); operating expenses which
are reimbursable by the tenants for the period prior to the Proration Date less
any amount previously paid by the Tenants shall be credited to Seller; and
other similar items shall be adjusted ratably as of 11:59 p.m. on the later of:
(a) the Closing Date or the actual date of the closing of this transaction
("Proration Date"), and credited to the balance of the cash due at Closing.
Assessments payable in installments which are due subsequent to the Closing
Date shall be paid by Purchaser. The parties hereto agree that, on or before
forty-five (45) days following Closing, the parties shall reconcile the items
prorated under this Paragraph 12A and shall remit any required payment pursuant
to such proration following such reconciliation.
B. If Seller enters into any leases for the Property after the date
hereof, then at Closing Purchaser will reimburse Seller for all costs and
expenses incurred by Seller in connection with such leases, including, without
limitation, all leasing commissions, tenant improvement expenses and reasonable
attorneys fees paid or incurred by Seller.
C. At Closing, Purchaser shall receive as a credit against the Purchaser
Price the sum of Three Hundred Seventy Nine Thousand Seven Hundred Ninety Two
And No/100 Dollars ($379,792) to compensate Purchaser for certain tenant
leasing improvement costs to be paid by Purchaser to Sunset National Mortgage
("Sunset") pursuant to its lease at the Property. At Closing, Purchaser shall
assume all obligations to pay such tenant improvement costs to Sunset and shall
indemnify Seller from any obligation thereunder.
D. All sums paid following the Closing Date by any tenant of the
Property who is indebted under a lease for any period prior to and including
the Closing Date shall be deemed a "Post-Closing Receipt" until such time as
all such indebtedness is paid in full. Within ten (10) days following each
receipt by Purchaser of a Post-Closing Receipt, Purchaser shall pay such Post-
Closing Receipt to Seller. Purchaser shall use its best efforts to collect all
amounts which, upon collection, would constitute Post-Closing Receipts
hereunder. Within 120 days after the Closing Date, 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, Purchaser shall pay to Seller
said additional Post-Closing Receipts and the cost of performing Seller's
audit. Paragraph 12D of this Agreement shall survive the Closing and the
delivery and recording of the deed.
13. RECORDING. This Agreement shall not be recorded and the act of recording
by Purchaser shall be an act of default hereunder by Purchaser and subject to
the provisions of Paragraph 10 hereof.
<PAGE>
14. ASSIGNMENT. The Purchaser shall not have the right to assign its interest
in this Agreement without the prior written consent of the Seller. Any
assignment or transfer of, or attempt to assign or transfer, Purchaser's
interest in this Agreement shall be an act of default hereunder by Purchaser
and subject to the provisions of Paragraph 10 hereof.
15. BROKER. Seller represents and warrants to Purchaser that no broker
commission or finder fee is due and payable in connection with this transaction
on account of the actions of Seller other than to Cushman & Wakefield (to be
paid by Seller). Purchaser represents and warrants to seller that no broker
commission or finder fee is due and payable in connection with this transaction
on account of the actions of Purchaser other than to Cantex Properties, Inc.
(which commission shall be paid by Cushman & Wakefield).
Seller's commission to Cushman & Wakefield (and correspondingly the commission
payable to Cantex Properties, 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 shall indemnify, defend and hold Seller and Affiliates of
Seller harmless from any claim whatsoever (including without limitation,
reasonable attorney's fees, court costs and costs of appeal) from anyone
claiming by or through Purchaser any fee, commission or compensation on account
of this Agreement, its negotiation or the sale hereby contemplated other than
to Cushman & Wakefield and Cantex Properties, Inc. Purchaser shall undertake
its obligations set forth in the preceding sentence using attorneys selected by
Seller in Seller's sole determination. The provisions of this Paragraph 15
will survive the Closing and delivery of the Deed.
16. SELLER'S REPRESENTATIONS AND WARRANTIES.
A. Any reference herein to Seller's knowledge, representation, warranty
or notice of any matter or thing shall only mean such knowledge or notice that
has actually been received by Phillip Schechter (hereinafter collectively
referred to as the "Seller's Representative"), and any representation or
warranty of the Seller is based upon those matters of which the Seller's
Representative has actual knowledge. Any knowledge or notice given, had or
received by any of Seller's agents, servants or employees shall not be imputed
to Seller, the general partner or limited partners of Seller, the subpartners
of the general partner or limited partners of Seller or Seller's
Representative.
B. Subject to the limitations set forth in Paragraph A of this Paragraph
16, Seller hereby makes the following representations and warranties, which
representations and warranties are made to Seller's knowledge: (i) Seller's
knowledge of any pending or threatened litigation, claim, cause of action or
administrative proceeding concerning the Property is limited to those items set
forth on Exhibit K; (ii) Seller has the power to execute this Agreement and
consummate the transactions contemplated herein; and (iii) the rent rolls which
Seller has submitted to the Purchaser and updated as of the Closing Date are
accurate. The parties agree that the representations contained herein shall
survive Closing for a period of ninety (90) days (i.e., the claiming party
shall have no right to make any claims against the other party for a breach of
a representation or warranty after the expiration of ninety (90) days
immediately following Closing).
<PAGE>
17. LIMITATION OF LIABILITY. Neither Seller, nor any of its respective
beneficiaries, shareholders, partners, officers, agents or employees, heirs,
successors or assigns shall have any personal liability of any kind or nature
for or by reason of any matter or thing whatsoever under, in connection with,
arising out of or in any way related to this Agreement and the transactions
contemplated herein, and Purchaser hereby waives for itself and anyone who may
claim by, through or under Purchaser any and all rights to sue or recover on
account of any such alleged personal liability.
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 or made by United States registered or certified mail
addressed as follows:
TO SELLER: c/o The Balcor Company
4849 West Golf Road
Skokie, Illinois 60077
Attention: Ilona Adams
with copies to: The Balcor Company
4849 West Golf Road
Skokie, Illinois 60077
Attention: Alan Lieberman
(708) 677-2900
(708) 982-4027 (FAX)
and to: Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, Illinois 60661-3693
Attention: Andrew D. Small
(312) 902-5489
(312) 902-1061 (FAX)
TO PURCHASER: Vortisch Holdings, L.P.
c/o Steve Mancillas
Cantex Properties, Inc.
1845 Woodall Rodgers, 12th Floor
Dallas, Texas 75201
(___) __________
(___) ___________(FAX)
and one copy to: Williford & Wood
3131 Turtle Creek Boulevard
Suite 222
Dallas, Texas 75219
Attention: Ward Williford
(214) 521-1066
(214) 521-1086 (FAX)
<PAGE>
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 4th business day after the same is deposited in the United
States Mail as registered or certified matter, addressed as above provided,
with postage thereon fully prepaid. Any such notice, demand or document not
given, delivered or made by registered or certified mail or by overnight
courier as aforesaid shall be deemed to be given, delivered or made upon
receipt of the same by the party to whom the same is to be given, delivered or
made. Copies of all notices shall be served upon the Escrow Agent.
20. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute three
(3) copies of this Agreement and four (4) copies of the Escrow Agreement and
forward them to Seller for execution, accompanied with the Earnest Money
payable to the Escrow Agent set forth in the Escrow Agreement. Seller will
forward one (1) copy of the executed Agreement to Purchaser and will forward
the following to the Escrow Agent:
(1) Earnest Money;
(2) One (1) fully executed copy of this Agreement; and
(3) Three (3) copies of the Escrow Agreement signed by the parties with a
direction to execute two (2) copies of the Escrow Agreement and deliver a
fully executed copy to each of the Purchaser and the Seller.
21. GOVERNING LAW. The provisions of this Agreement shall be governed by the
laws of the Texas, except that with respect to the retainage of the Earnest
Money as liquidated damages the laws of the State of Illinois shall govern.
22. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties and supersedes all other negotiations, understandings and
representations made by and between the parties and the agents, servants and
employees.
23. COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.
24. CAPTIONS. Paragraph titles or captions contained herein are inserted as a
matter of convenience and for reference, and in no way define, limit, extend or
describe the scope of this Agreement or any provision hereof.
25. CONSIDERATION. On or before the execution of this Agreement, Purchaser
shall deliver to Seller One Hundred And No/100 Dollars ($100.00) cash (the
"Independent Contract Consideration"), which amount has been bargained for and
agreed to as consideration for Purchaser's right to purchase the Property
pursuant to this Agreement and for Seller's execution and delivery of this
Agreement. The Independent Contract Consideration is in addition to and
independent of all other consideration provided in this Agreement, and is
nonrefundable in all events.
<PAGE>
26. WAIVER OF DECEPTIVE TRADE PRACTICES - CONSUMER PROTECTION ACT. To the
extent permitted by law, Purchaser hereby waives the provisions of the Texas
Deceptive Trade Practices-Consumer Protection Act, Chapter 17, subchapter E
Section 17.41 through 17.63, inclusive, Vernon's Texas Code Annotated, Business
and Commerce Code. In order to evidence this ability to grant such waiver,
Purchaser hereby represents and warrants to Seller that Purchaser (i) is
represented by legal counsel in the purchase of the Property, and (ii) is not
in a significantly disparate bargaining position in relation to the Seller.
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of the
31st day of March, 1995.
PURCHASER:
VORTISCH HOLDINGS, L.P., a Texas
limited partnership
By: Vortisch Investments, Inc., a
Delaware corporation, its
general partner
By: /s/Ward Williford
------------------------------
Name: Ward Williford
Its: Authorized Representative
SELLER:
COMERICA PLAZA LIMITED PARTNERSHIP, an
Illinois limited partnership
By: Comerica Plaza Partners, Inc.,
an Illinois corporation, its
general partner
By: /s/Phillip Schechter
-------------------------------
Name: Phillip Schechter
Its: Authorized Agent
The undersigned, being Purchaser's local counsel in connection with Purchaser's
purchase of the Property, hereby executes this Agreement solely for the
purposes of Paragraph 26 herein.
Date Executed: March 31, 1995
<PAGE>
J. Reagan Dixon of Cushman & Wakefield ("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
February 1, 1995 between Seller and Seller's Broker (the "Listing Agreement").
Seller's Broker also acknowledges that payment of the aforesaid fee or
commission is conditioned upon the Closing and the receipt of the Purchase
Price by the Seller. Seller's Broker agrees to deliver a receipt to the Seller
at the Closing for the fee or commission due Seller's Broker and a release
stating that no other fees or commissions are due to it from Seller or
Purchaser.
Cushman & Wakefield
By:
Timothy McNamara of Cantex Properties, Inc. ("Purchaser's Broker")
executed this Agreement in its capacity as a real estate broker and
acknowledges that the fee or commission due it as a result of the transaction
described in this Agreement is $59,000.00 which fee shall be paid to
Purchaser's Broker by Cushman & Wakefield. Purchaser'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.
Purchaser's Broker agrees to deliver a receipt to the Seller at the Closing for
the fee or commission due Purchaser's Broker and a release stating that no
other fees or commissions are due to it from Seller or Purchaser.
Cantex Properties, Inc.
By:
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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 - Assignment and Assumption of Leases and Security Deposits
I - Non-Foreign Affidavit
J - Notice to Tenants
K - Pending or Threatened Litigation
