SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) September 17, 1996
BALCOR PENSION INVESTORS - V
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Exact Name of Registrant
Illinois 0-13233
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State or other jurisdiction Commission file number
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 36-3254673
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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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a) Granada Apartments
In 1985, the Partnership funded a $1,894,920 loan evidenced by a promissory
note in the amount of $3,200,000 and secured by a wrap-around mortgage (the
"Loan") on the Granada Apartments, Tampa, Florida. In 1992, the Partnership
purchased the primary underlying mortgage loan for $1,190,643. The Partnership
obtained title to the property through foreclosure in 1993, subject to the
remaining underlying mortgage loan held by an unaffiliated party. Subsequently
in 1993, the Partnership repaid the remaining underlying first mortgage loan in
the amount of $ 9,220.
On September 17, 1996, the Partnership contracted to sell the property for a
sale price of $2,850,000 to an unaffiliated party, Housing Systems,
Incorporated, a Georgia corporation. The purchaser has deposited $50,000 into
an escrow account as earnest money. The remainder of the sale price will be
payable in cash at closing, scheduled for October 31, 1996. From the proceeds
of the sale, the Partnership will pay $114,000 to an unaffiliated party as a
brokerage commission. An affiliate of the third party providing property
management services for the property will receive a fee for services rendered
in connection with the sale of the property of up to $28,000. The Partnership
will receive the remaining proceeds of approximately $2,700,375, less closing
costs. Of such proceeds $50,000 will be retained by the Partnership and will
not be available for use or distribution by the Partnership until 90 days
after closing. Neither the General Partner nor any affiliate will
receive a brokerage commission in connection with the sale of the property.
The General Partner will be reimbursed by the Partnership for actual expenses
incurred in connection with the sale.
The Partnership and affiliates of the General Partner have simultaneously
contracted to sell 4 other properties to the purchaser, including Plantation
Apartments and The Glades on Ulmerton Apartments, described elsewhere in this
report.
The closing is subject to the satisfaction of numerous terms and conditions.
There can be no assurance that all of the terms and conditions will be complied
with and, therefore, it is possible the sale of the property may not occur.
b) Plantation Apartments
In 1985, the Partnership funded a $2,105,080 loan evidenced by a promissory
note in the amount of $3,600,000 and secured by a wrap-around mortgage (the
"Loan") on the Plantation Apartments, Tampa, Florida. The Partnership obtained
title to the property through foreclosure in 1993, subject to the interest only
underlying mortgage loan held by an unaffiliated party. In 1993, the
Partnership repaid the underlying first mortgage loan in the amount of
$1,494,920.
<PAGE>
On September 17, 1996, the Partnership contracted to sell the property for a
sale price of $3,550,000 to an unaffiliated party, Housing Systems,
Incorporated, a Georgia corporation. The purchaser has deposited $50,000 into
an escrow account as earnest money. The remainder of the sale price will be
payable in cash at closing, scheduled for October 31, 1996. From the proceeds
of the sale, the Partnership will pay $124,250 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 $44,375. The Partnership
will receive the remaining proceeds of approximately $3,381,375, less closing
costs. Of such proceeds $50,000 will be retained by the Partnership and will
not be available for use or distribution by the Partnership until 90 days
after closing. Neither the General Partner nor any affiliate will
receive a brokerage commission in connection with the sale of the property.
The General Partner will be reimbursed by the Partnership for actual expenses
incurred in connection with the sale.
The Partnership and affiliates of the General Partner have simultaneously
contracted to sell 4 other properties to the purchaser, including Granada
Apartments and The Glades on Ulmerton Apartments, described elsewhere in this
report.
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.
c) The Glades on Ulmerton Apartments
In 1984, the Partnership funded a $3,618,952 loan evidenced by a promissory
note in the amount of $6,350,000 and secured by a wrap-around mortgage (the
"Loan") on The Glades on Ulmerton Apartments, Largo, Florida. The Partnership
obtained title to the property through foreclosure in 1991, subject to the
underlying mortgage loan held by an unaffiliated party. In 1994, the
Partnership prepaid the underlying first mortgage loan in the amount of
$2,241,349.
On September 17, 1996, the Partnership contracted to sell the property for a
sale price of $6,500,000 to an unaffiliated party, Housing Systems,
Incorporated, a Georgia corporation. The purchaser has deposited $50,000 into
an escrow account as earnest money. The remainder of the sale price will be
payable in cash at closing, scheduled for October 31, 1996. From the proceeds
of the sale, the Partnership will pay $146,250 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 $81,250. The Partnership
will receive the remaining proceeds of approximately $6,272,500, less closing
costs. Of such proceeds $50,000 will be retained by the Partnership and will
not be available for use or distribution by the Partnership until 90 days
after closing. Neither the General Partner nor any affiliate will
receive a brokerage commission in connection with the sale of the property.
The General Partner will be reimbursed by the Partnership for actual expenses
incurred in connection with the sale.
<PAGE>
The Partnership and affiliates of the General Partner have simultaneously
contracted to sell 4 other properties to the purchaser, including Granada
Apartments and the Plantation Apartments, described elsewhere in this report.
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) (a) (i) Agreement of Sale and attachments thereto relating to
the sale of the Granada Apartments, Tampa, Florida.
(ii) First Amendment to Agreement of Sale relating to the
sale of the Granada Apartments, Tampa, Florida.
(b) (i) Agreement of Sale and attachments thereto relating to
the sale of the Plantation Apartments, Tampa, Florida.
(ii) First Amendment to Agreement of Sale relating to the
sale of the Plantation Apartments, Tampa, Florida.
(c) (i) Agreement of Sale and attachments thereto relating to
the sale of The Glades on Ulmerton Apartments, Largo,
Florida.
(ii) First Amendment to Agreement of Sale relating to the
sale of The Glades on Ulmerton Apartments, Largo,
Florida.
No information is required under Items 1, 3, 4, 5, 6 and 8 and these items
have, therefore, been omitted.
<PAGE>
Signature
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
BALCOR PENSION INVESTORS-V
By: Balcor Mortgage Advisors-V, 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 2, 1996
<PAGE>
[The Granada Apartments]
AGREEMENT OF SALE
THIS AGREEMENT ("Agreement") is entered into as of the 17th day of
September, 1996, by and between HOUSING SYSTEMS, INCORPORATED, a Georgia
corporation ("Purchaser"), and GRD LIMITED PARTNERSHIP, an Illinois limited
partnership ("Seller").
WITNESSETH:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to
sell at the price of Two Million Eight Hundred Fifty Thousand and No/100
Dollars ($2,850,000.00), the following:
a. those certain tracts or parcels of land located in Hillsborough
County, Florida, more particularly described on Exhibit A attached hereto
("Land");
b. the 110 unit apartment complex, commonly known as The Granada
Apartments, which contains related improvements, facilities, amenities,
structures, driveways, walkways, plumbing and heating pipes, culverts, and
mains ("Improvements");
c. all right, title and interest of Seller in and to any alleys,
strips or gores adjoining the Land, and any easements, rights-of-way or other
interests in, on, under or to, any land, highway, street, road, right-of-way or
avenue, open or proposed, in, on, under, across, in front of, abutting or
adjoining the Land, and all right, title and interest of Seller in and to any
awards for damage thereto by reason of a change of grade thereof;
d. the accessions, appurtenant rights, privileges, appurtenances
and all the estate and rights of Seller in and to the Land and the
Improvements, as applicable, or otherwise appertaining to any of the property
described in the immediately preceding clauses (a), (b) and (c);
e. the fixtures, equipment and other personal property listed on
Exhibit B attached hereto and all other fixtures, machinery, supplies,
equipment, computer hardware and, except for computer software, the other
personal property owned by Seller and located on or in or used solely in
connection with the Land and Improvements (collectively, the "Personal
Property"); and
f. all of Seller's interest in any intangible property now or
hereafter owned by Seller and used solely in connection with its Land,
Improvements and Personal Property, including without limitation the right to
use any trade style or name now used in connection with the same, any contract
rights, escrow or security deposits, utility agreements or other rights related
to the ownership of or use and operation of the Property, as hereinafter
defined.
All of the items described in subparagraphs (a), (b), (c), (d), (e) and
(f) above are referred to as the "Property".
<PAGE>
2. PURCHASE PRICE. The purchase price ("Purchase Price") shall be paid
as follows:
a. Upon the execution of this Agreement, Fifty Thousand and No/100
Dollars ($50,000.00) ("Earnest Money") to be held in escrow by the Escrow Agent
(as that term is defined in the "Escrow Agreement" [as hereinafter defined]) by
and in accordance with the provisions of the Escrow Agreement ("Escrow
Agreement") attached hereto as Exhibit C;
b. On the "Closing Date" (as hereinafter defined), the balance of
the Purchase Price adjusted in accordance with the prorations by federally
wired "immediately available" funds delivered to the "Title Insurer" (as
hereinafter defined) no later than 12:00 Noon Central time on the Closing Date
(as hereinafter defined). If the funds are not received by 12:00 Noon Central
time, then, on the Closing Date, Purchaser shall pay Seller an amount equal to
any additional mortgage per diem interest costs incurred by Seller.
c. The parties agree the Purchase Price shall be allocated among
the various components of the Property in a manner to be reasonably agreed upon
by the parties prior to September 23, 1996.
3. TITLE COMMITMENT AND SURVEY.
a. Purchaser has received a survey of the Property prepared by
Pimm-Woods Engineering dated January 6, 1994 (the "Existing Survey"). Seller
and Purchaser shall each pay for one-half of the costs of updating the Existing
Survey and Seller shall deliver the updated survey (the "Updated Survey") to
Purchaser within 21 days after the date hereof.
b. Attached hereto as Exhibit D is a copy of a title commitment for
an owner's standard title insurance policy issued by Charter Title Company Fort
Bend, on behalf of Lawyers Title Insurance Company (hereinafter referred to as
"Title Insurer") dated June 17, 1996 for the Property (the "Title Commitment").
c. If the Title Commitment or the Existing Survey discloses any
exceptions to title objectionable to Purchaser, Purchaser may give written
notice to Seller (the "Title Notice") of Purchaser's disapproval of any such
exceptions (an "Unpermitted Exception") on or before September 18, 1996. Any
title exceptions which are set forth in the Title Commitment or on the Existing
Survey to which Purchaser does not object in accordance with the immediately
preceding sentence shall be deemed "Permitted Exceptions". With regard to an
Unpermitted Exception for which Purchaser gives Seller a Title Notice, Seller
may but shall not have the obligation to notify Purchaser (the "Response
Notice") within three (3) business days of receipt of the Title Notice whether
Seller shall bond over, cure or cause the Title Insurer to remove such
Unpermitted Exception from the Title Commitment. Any such Unpermitted
Exception which Seller elects to bond over, cure or cause the Title Insurer to
remove shall be additional Permitted Exceptions. If Seller does not so notify
Purchaser, with respect to any Unpermitted Exception, Purchaser may either
waive its objection and proceed towards closing or terminate this Agreement by
giving written notice to Seller of its election within three (3) additional
<PAGE>
business days of the earlier to occur of (a) receipt by Purchaser of the
Response Notice and (b) expiration of the three (3) business day period in
which Seller may deliver the Response Notice. If Purchaser does not give such
written notice within such three (3) additional business days, (i) Purchaser
shall have waived its right to terminate this Agreement pursuant to this
Paragraph 3c; (ii) such Unpermitted Exception shall be deemed an additional
Permitted Exception; and (iii) the parties shall proceed to Closing. If
Purchaser terminates this Agreement by written notice to Seller within such
three (3) additional business days: (i) Purchaser shall promptly deliver to
Seller copies of all studies, reports and other investigations obtained by
Purchaser in connection with its due diligence of the Property, (ii) the
Earnest Money deposited by Purchaser shall be immediately paid to Purchaser,
together with any interest earned thereon and (iii) neither Purchaser nor
Seller shall have any right, obligation or liability under this Agreement,
except for Purchaser's obligation to indemnify Seller and restore the Property,
as more fully set forth in Paragraph 17.
d. The Title Commitment and the Existing Survey shall be conclusive
evidence of good title as therein shown as to all matters to be insured by the
title policy, subject only to the exceptions therein stated. On the Closing
Date, "Purchaser's Title Insurer" (as hereinafter defined) shall deliver to
Purchaser a ALTA 1992 Form Title Policy in conformance with the "Purchaser's
Title Commitment" (as hereinafter defined), subject to only the Permitted
Exceptions and Unpermitted Exceptions waived by Purchaser (the "Title Policy").
Seller and Purchaser shall equally share the costs of the Title Commitment, the
Purchaser's Title Commitment and the Title Policy and the cost of deletion of
the survey exception, if required by Purchaser. Purchaser shall pay the cost
of any endorsements to, and the extended coverage on, the Title Policy.
e. The obligation of Purchaser to pay various costs set forth in
Paragraphs 3a and 3d shall survive the termination of this Agreement.
4. CONDITION OF TITLE/CONVEYANCE. Seller agrees to convey fee simple
title to the Property by Special Warranty Deed ("Deed") in recordable form
subject only to the Permitted Exceptions and Unpermitted Exceptions waived by
Purchaser. If, prior to "Closing" (as hereinafter defined), the Title
Commitment ("Purchaser's Title Commitment") ordered by Purchaser from First
American Title Insurance Company ("Purchaser's Title Insurer"), a date- down to
the Title Commitment or the Updated Survey discloses any new Unpermitted
Exception, Seller shall have thirty (30) days from the date of Seller's receipt
of the Purchaser's Title Commitment, the date of the date-down to the Title
Commitment or the date of the Updated Survey, as applicable, at Seller's
expense, to (i) bond over, cure and/or have any Unpermitted Exceptions which,
in the aggregate, do not exceed $25,000.00, removed from the Purchaser's Title
Commitment or to have the Purchaser's Title Insurer commit to insure against
loss or damage that may be occasioned by such Unpermitted Exceptions, or (ii)
have the right, but not the obligation, to bond over, cure and/or have any
Unpermitted Exceptions which, in the aggregate, equal or exceed $25,000.00,
removed from the Purchaser's Title Commitment or to have the Purchaser's Title
Insurer commit to insure against loss or damage that may be occasioned by such
Unpermitted Exceptions. In such event, the time of Closing (as hereinafter
<PAGE>
defined) shall be delayed, if necessary, to give effect to said aforementioned
time periods. If Seller fails to cure or have said Unpermitted Exception
removed or have the Purchaser's Title Insurer commit to insure as specified
above within said thirty (30) day period or if Seller elects not to exercise
its rights under (ii) in the immediately preceding sentence, Purchaser may
terminate this Agreement upon notice to Seller within five (5) business days
after the expiration of said thirty (30) day period. Absent notice from
Purchaser to Seller in accordance with the immediately preceding sentence,
Purchaser shall be deemed to have elected to take title subject to said
Unpermitted Exception. If Purchaser terminates this Agreement in accordance
with the terms of this Paragraph 4, this Agreement shall become null and void
without further action of the parties and all Earnest Money theretofore
deposited into the escrow by Purchaser together with any interest accrued
thereon, shall be returned to Purchaser, and neither party shall have any
further liability to the other, except for Purchaser's obligation to indemnify
Seller and restore the Property, as more fully set forth in Paragraph 17.
5. PAYMENT OF CLOSING COSTS. Purchaser and Seller shall equally share
the costs of the documentary stamps (if any) to be paid with reference to the
Deed and all other stamps, intangible, documentary, recording, sales tax and
surtax imposed by law with reference to any other documents delivered in
connection with this Agreement.
6. DAMAGE, CASUALTY AND CONDEMNATION.
a. Until the Closing Date, Seller shall maintain its present
insurance on the Property. If the Property suffers damage as a result of any
casualty prior to the Closing Date and can be repaired or restored in the case
of real property for $100,000 or less, or in the case of Personal Property, for
$10,000 or less, then Seller shall repair such damage in an expeditious manner
and the Closing shall be extended until the repairs are complete to Purchaser's
reasonable satisfaction. Seller shall retain all insurance proceeds. If the
cost of repair and restoration exceeds those amounts, then Purchaser can elect
to either: (a) proceed with the purchase of the Property and in such event,
unless Seller shall have restored the Property prior to the Closing Date,
Seller shall pay over or assign to Purchaser all amounts received or due (and
Purchaser shall receive a credit against the cash due at Closing in an amount
equal to any deductible under any insurance policy covering the damaged
Property) from, and all claims against, any insurance company as a result of
such damage; or (b) terminate this Agreement upon notice to Seller served
within twenty (20) business days of such casualty.
b. If condemnation proceedings ("Proceedings") have been instituted
against the Property which might result in the taking of any part of the
Property which shall (i) materially impair access to the Property; (ii) cause
any material non-compliance with any applicable law, ordinance, rule or
regulation of any federal, state or local authority or governmental agencies
having jurisdiction over the Property or any portion thereof; or (iii)
materially and adversely impair the use of the Property as it is currently
being operated, then Purchaser can elect to either take the Property subject to
the Proceedings and an assignment of Seller's interest in the Proceedings or
terminate this Agreement. If Purchaser elects to terminate this Agreement, it
shall be by notice to Seller within ten (10) days after Purchaser has received
notice of the Proceedings.
<PAGE>
c. If this Agreement is terminated pursuant to this Paragraph, then
all Earnest Money plus the interest accrued thereon shall be returned to
Purchaser and, subject to the survival provisions of Paragraph 17 herein,
neither party shall have any further liability hereunder.
7. AS-IS CONDITION.
a. Purchaser acknowledges and agrees that it will be purchasing the
Property based solely upon its inspection and investigations of the Property
and that Purchaser will be purchasing the Property "AS IS" and "WITH ALL
FAULTS" based upon the condition of the Property as of the date of this
Agreement subject to reasonable wear and tear and loss by fire or other
casualty or condemnation and, subject to the provisions of Paragraph 6 above,
from the date of this Agreement until the Closing Date. Without limiting the
foregoing, Purchaser acknowledges that, except as may otherwise be specifically
set forth elsewhere in this Agreement, neither Seller nor their consultants nor
agents have made any other representations or warranties of any kind upon which
Purchaser is relying as to any matters concerning the Property, including, but
not limited to, the condition of the Land or Improvements, the presence or
absence of asbestos, toxic waste or any Hazardous Materials (as hereinafter
defined) or Hazardous Substances (as hereinafter defined), the tenants of the
Property or the leases affecting the Property, economic projections or market
studies concerning the Property, any development rights, taxes, bonds,
covenants, conditions and restrictions affecting the Property, water or water
rights, topography, drainage, soil, subsoil of the Property, the utilities
serving the Property or any zoning, environmental or building laws, rules or
regulations affecting the Property. Seller makes no representation that the
Property complies with Title III of the Americans With Disabilities Act or any
fire codes or building codes. Purchaser hereby releases Seller from any and
all liability in connection with any claims which Purchaser may have against
Seller, and Purchaser hereby agrees not to assert any claims, for contribution,
cost recovery or otherwise, against Seller, relating directly or indirectly to
the existence of asbestos or Hazardous Materials or Hazardous Substances on, or
environmental conditions of, the Property. As used herein, the term "Hazardous
Materials" or "Hazardous Substances" means (i) hazardous wastes, hazardous
substances, hazardous constituents, toxic substances or related materials,
whether solids, liquids or gases, including but not limited to substances
defined as "hazardous wastes," "hazardous substances," "toxic substances,"
"pollutants," "contaminants," "radioactive materials," or other similar
designations in, or otherwise subject to regulation under, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), 42 U.S.C. Section 9601 et seq.; the Toxic Substance Control Act
("TSCA"), 15 U.S.C. Section 2601 et seq.; the Hazardous Materials
Transportation Act 49 U.S.C. Section 1802; the Resource Conservation and
Recovery Act ("RCRA"), 42 U.S.C. Section 9601, et seq.; the Clean Water Act
("CWA"), 33 U.S.C. Section 1251 et seq.; the Safe Drinking Water Act, 42 U.S.C.
Section 300f et seq.; the Clean Air Act ("CAA"), 42 U.S.C. Section 7401 et
seq.; and in any permits, licenses, approvals, plans, rules, regulations or
ordinances adopted, or other criteria and guidelines promulgated pursuant to
the preceding laws or other similar federal, state or local laws, regulations,
rules or ordinance now or hereafter in effect relating to environmental matters
(collectively, the "Environmental Laws"); and (ii) any other substances,
<PAGE>
constituents or wastes subject to any applicable federal, state or local law,
regulation or ordinance, including any Environmental Law, now or hereafter in
effect, including but not limited to (A) petroleum, (B) refined petroleum
products, (C) waste oil, (D) waste aviation or motor fuel and (E) asbestos.
b. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller has owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Seller makes no representation or
warranty that such material is complete or accurate or that Purchaser will
achieve similar financial or other results with respect to the operations of
the Property, it being acknowledged by Purchaser that Seller's operation of the
Property and allocations of revenues or expenses may be vastly different than
Purchaser may be able to attain. Purchaser acknowledges that it is a
sophisticated and experienced purchaser of real estate and further that
Purchaser has relied upon its own investigation and inquiry with respect to the
operation of the Property and releases Seller from any liability with respect
to such historical information.
c. Seller has provided to Purchaser the following existing report:
Phase I Environmental Site Assessment, dated May 2, 1996 prepared by EMG
("Existing Report"). Seller makes no representation or warranty concerning the
accuracy or completeness of the Existing Report. Purchaser hereby releases
Seller and the Affiliates of Seller from any liability whatsoever with respect
to the Existing Report, including, without limitation, the matters set forth in
the Existing Report, and the accuracy and/or completeness of the Existing
Report. Furthermore, Purchaser acknowledges that it will be purchasing the
Property with all faults disclosed in the Existing Report. Notwithstanding
anything contained herein to the contrary, the terms of this Paragraph 7.c.
shall survive the Closing and the delivery of the Deed and termination of this
Agreement.
8. FINANCING CONTINGENCY. Purchaser's and Seller's obligations under
this Agreement are contingent upon Purchaser's ability to procure a commitment
for first mortgage financing for the acquisition of the Property in an amount
of not less than $2,137,500.00 with a 9.5% per annum constant interest rate and
20 year amortization (the "Financing Contingency") on or before September 23,
1996. Purchaser acknowledges and agrees that it shall submit its application
for a commitment for first mortgage financing in accordance with the provisions
set forth above within ten (10) business days from the date hereof, and shall
provide Seller with either a letter from the lender evidencing that said
application has been received or an affidavit from Purchaser stating that
Purchaser submitted said application and paid any application fee within ten
(10) business days from the date hereof. In the event Purchaser has complied
with the requirements set forth in the preceding sentence, but is unable to
satisfy the Financing Contingency on or before September 23, 1996, then
Purchaser shall have the option, upon written notice to Seller, exercised no
later than September 23, 1996, to terminate this Agreement, in which case this
Agreement shall become null and void without further action of the parties and
all Earnest Money theretofore deposited into the escrow by Purchaser together
with any interest accrued thereon, shall be delivered to Purchaser, and neither
<PAGE>
party shall have any further liability to the other, except for those covenants
and obligations hereunder which expressly survive the termination of this
Agreement. In the event Purchaser fails to deliver such notice to Seller, the
Financing Contingency shall be deemed satisfied and the parties hereto shall
proceed to Closing.
9. CLOSING. The closing of this transaction ("Closing") shall be on
October 31, 1996 ("Closing Date"), at the office of Purchaser's counsel,
Atlanta, Georgia, at which time Seller shall deliver possession of the Property
to Purchaser. In the event that all required funds and documents have been
delivered to Escrow Agent or exchanged by the parties, the parties agree that
the Closing may be conducted by Escrow Agent without the parties or counsel
present.
10. CLOSING DOCUMENTS.
a. On the Closing Date, Purchaser shall deliver to Seller an
executed closing statement, the balance of the Purchase Price, an assumption of
the Assignment and Assumption of Intangibles (as hereinafter defined), an
assumption of the Assignment and Assumption of Leases (as hereinafter defined),
and such other documents as may be reasonably required in order to consummate
the transaction as set forth in this Agreement.
b. On the Closing Date, Seller shall deliver, or cause to be
delivered, the following to Purchaser: possession of the Property; the executed
Deed (in the form of Exhibit F attached hereto) subject to the Permitted
Exceptions; the Title Policy (or "marked-up commitments"); terminations of any
management agreements affecting the Property; an inventory of the Personal
Property for the Property and a Bill of Sale for the same (in the form of
Exhibit G attached hereto); executed closing statements; executed assignment
and assumption of all service contracts, warranties and intangibles (in the
form of Exhibit H attached hereto, the "Assignment and Assumption of
Intangibles"); executed copies of all warranties, guarantees, maintenance,
supply, repair and service contracts, which affect the Property and which are
in Seller's possession or at the Property, to be delivered at the Property;
executed assignment and assumption of all leases and security deposits (in the
form of Exhibit I attached hereto, the "Assignment and Assumption of Leases");
the original executed leases which shall be delivered at the Property; updated
Rent Roll (as hereinafter defined); notice to the tenants of the Property of
the transfer of title and the assumption by Purchaser of the landlord's
obligations under the leases and the obligation to refund the security deposits
(in the form of Exhibit J attached hereto); non-foreign affidavit (in the form
of Exhibit K attached hereto); bringdown certificate re: representations and
warranties (in the form of Exhibit L attached hereto); certificates of
occupancy for each apartment unit (or building, as applicable) that are in
Seller's possession or at the Property, if any; plans and specifications, if
any, in Seller's possession; and such other documents as may be reasonably
required by the Purchaser's Title Insurer in order to consummate the
transaction as set forth in this Agreement.
<PAGE>
11. DEFAULT BY PURCHASER. ALL EARNEST MONEY DEPOSITED INTO THE ESCROW IS
TO SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND
UNDERTAKINGS UNDER THIS AGREEMENT. IN THE EVENT OF ANY DEFAULT OF PURCHASER
UNDER THE PROVISIONS OF THIS AGREEMENT, SELLER SHALL RETAIN ALL OF THE EARNEST
MONEY AND THE INTEREST THEREON AS SELLER'S SOLE RIGHT TO DAMAGES OR ANY OTHER
REMEDY. THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES, IN THE EVENT OF
A DEFAULT BY PURCHASER, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICAL TO
DETERMINE. THEREFORE, BY PLACING THEIR INITIALS BELOW, THE PARTIES ACKNOWLEDGE
THAT THE EARNEST MONEY HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES'
REASONABLE ESTIMATE OF SELLER'S DAMAGES.
12. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF ANY
SELLER'S DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF ALL EARNEST
MONEY TOGETHER WITH ANY INTEREST ACCRUED THEREON, AND, SUBJECT TO THE SURVIVAL
PROVISIONS OF PARAGRAPH 17 HEREIN, THIS AGREEMENT SHALL TERMINATE AND THE
PARTIES SHALL HAVE NO FURTHER LIABILITY TO EACH OTHER AT LAW OR IN EQUITY.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF A SELLER'S
DEFAULT IS DUE TO ITS REFUSAL TO DELIVER THE DEED, THEN PURCHASER WILL BE
ENTITLED TO SUE FOR SPECIFIC PERFORMANCE.
13. a. PRORATIONS. Rent (exclusive of delinquent rents, but including
prepaid rents); refundable security deposits (which will be assigned to and
assumed by Purchaser and credited to Purchaser at Closing); water and other
utility charges; fuels; prepaid operating expenses for the month in which the
Closing occurs and for future months; real and personal property taxes; and
other similar items shall be adjusted ratably as of 11:59 p.m. on the Closing
Date ("Proration Date"), and credited to the balance of the cash due at
Closing. If for any reason the Proration Date is earlier than the Closing
Date, then for the period from the Proration Date through the Closing Date,
Purchaser shall be entitled to the benefit of all of the income from the
Property and shall bear the burden of all of the operating expenses of the
Property, including, but not limited to, insurance, service contracts, employee
wages and benefits, management fees, utility costs and interest on the existing
mortgages encumbering a Property (if any). If the amount of any of the items
to be prorated is not then ascertainable, the adjustment thereof shall be on
the basis of the most recent ascertainable data. All prorations will be final
except as to delinquent rents referred to in 13b below.
b. DELINQUENT RENTS. If, as of the Closing Date, any rent is in
arrears for thirty (30) days or less, then the first rent collected for the
Property by Purchaser shall be applied to the month in which Closing occurred
and disbursed pro-rata to Purchaser and Seller. If rent is in arrears for a
Property for more than thirty (30) days, then rents collected for the Property
by Purchaser shall be applied first to current rent and then to delinquent
rent. Any amounts received by one party and payable to the other party
pursuant hereto shall be paid within 10 days of receipt of such amounts. This
subparagraph of this Agreement shall survive the Closing and the delivery and
recording of the Deed.
14. RECORDING. This Agreement shall not be recorded and the act of
recording by Purchaser shall be an act of default hereunder by Purchaser and
shall be subject to the provisions of Paragraph 11.
<PAGE>
15. ASSIGNMENT. Purchaser shall not have the right to assign its
interest in this Agreement without the prior written consent of Seller. Any
assignment or transfer of, or attempt to assign or transfer, Purchaser's
interest in this Agreement shall be an act of default hereunder by Purchaser.
Notwithstanding the foregoing, Purchaser may assign its interest in this
Agreement without the consent of Seller to any entity in which Purchaser is a
partner or shareholder provided that Purchaser remains liable for and the
assignee assumes the obligations of Purchaser hereunder. If any assignee of
Purchaser ("Assignee") under this Agreement petitions or applies for relief in
bankruptcy or Assignee is adjudicated as a bankrupt or insolvent, or Assignee
files any petition, application for relief or answer-seeking or acquiescing in
any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief for itself under any present or future federal,
state or other statute, law, code or regulation relating to bankruptcy,
insolvency, or other relief for debtors (collectively, a "Bankruptcy Filing")
on or before the Closing Date, said Bankruptcy Filing shall be a default under
this Agreement and Purchaser shall indemnify Seller for all costs, attorney's
fees and expenses of Seller resulting from Seller's efforts to obtain the
Earnest Money as liquidated damages and to clear title to the Property from any
encumbrance resulting from the Bankruptcy Filing.
16. BROKER. The parties hereto acknowledge that Cushman and Wakefield
(the "Broker") is the only real estate broker involved in this transaction.
Seller agrees to pay the Broker a commission or fee ("Fee") pursuant to a
listing agreement between Seller and Broker. In all events, Purchaser shall
have no obligation to pay any portion of the Fee. However, this Fee is due and
payable only from the proceeds of the Purchase Price received by Seller. The
foregoing does not apply to any fee which may be paid by Seller to any
affiliate of Seller as a result of this transaction. Purchaser agrees to
indemnify, defend and hold harmless Seller and any partner, affiliate, parent
of Seller, and all shareholders, employees, officers and directors of Seller or
Seller's partners, parents or affiliates (each of the above is individually
referred to as a "Seller Indemnitee") from all claims, including attorneys'
fees and costs incurred by a Seller Indemnitee as a result of anyone's claiming
by or through Purchaser any fee, commission or compensation on account of this
Agreement, its negotiation or the sale hereby contemplated. Purchaser does now
and shall at all times consent to a Seller Indemnitee's selection of defense
counsel. Each Seller agrees to indemnify, defend and hold harmless Purchaser
and all shareholders, employees, officers and directors of Purchaser or
Purchaser's parent or affiliate (each of the above is individually referred to
as a "Purchaser Indemnitee") from all claims, including attorneys' fees and
costs incurred by a Purchaser Indemnitee as a result of anyone's claiming by or
through a Seller any fee, commission or compensation on account of this
Agreement its negotiation or the sale hereby contemplated. Seller does now and
shall at all times consent to a Purchaser Indemnitee's selection of defense
counsel. The provisions of this Paragraph will survive the Closing and
delivery of the Deed.
<PAGE>
17. DOCUMENTS AND INSPECTION OF PROPERTY
a. Seller has delivered to Purchaser copies of the most recent
available tax bills, rent rolls, insurance premiums, service contracts, utility
account numbers, year-end 1995 and year-to-date 1996 operating statements
(collectively the "Documents"). Purchaser has had the right to inspect and
approve the condition of the Property and conduct such tests and studies as
Purchaser deemed appropriate and to evaluate the physical condition of the
Property and to conduct such evaluation as it deemed appropriate to determine
whether its operation and purchase would be economically feasible including the
interior of the apartments, during normal business hours. Purchaser
acknowledges that it has completed its inspection of the Property and has
approved the condition of the Property. Purchaser shall maintain public
liability insurance policies insuring against claims arising as a result of the
inspections of the Property conducted by Purchaser. Purchaser agrees to
indemnify, defend, protect and hold Seller harmless from any and all loss,
costs, including attorneys' fees, liability or damages which Seller may incur
or suffer as a result of Purchaser's inspection and investigation of the
Property including the entry of Purchaser, its employees or agents and its
Lender onto the Property, including without limitation, liability for
mechanics' lien claims.
b. Purchaser agrees to defend and hold Seller harmless from any
injuries, damages or claims of any nature whatsoever which Purchaser's
servants, agents or employees may have as a result of Purchaser's inspection of
the Property. Purchaser further agrees to restore any damage to the Property
which may arise or has arisen as a result of Purchaser's inspection of the
Property.
c. Purchaser's obligations to indemnify, defend and hold Seller
harmless under the provisions of this Paragraph 17 shall survive the
termination of this Agreement or the Closing and the delivery and recording of
the Deed.
18. SELLER'S OBLIGATIONS PRIOR TO CLOSING. Seller covenants that between
the date of this Agreement and the Closing Date:
a. Seller shall not, without Purchaser's prior written consent (i)
enter into any lease for an apartment unit with a first-time tenant unless the
lease is for a period of no more than one year and the rent shall be not less
than the amount currently being charged for similar apartment units; nor (ii)
enter into, amend, renew or extend any lease for an apartment unit with an
existing tenant unless the lease is for a period of not more than one year and
the rent for the amended, renewal or extension term shall not be less than the
rent currently paid by such tenant; nor (iii) terminate any lease except by
reason of a default by the tenant thereunder or by reason of the provisions
contained in the lease.
b. Seller shall not modify nor amend any Service Contract (as
hereinafter defined) nor enter into any new service contract for the Property
without the prior written consent of Purchaser, which consent shall not be
unreasonably withheld or delayed provided no such consent shall be necessary if
the same is terminable without penalty by the then owner of the Property upon
not more than thirty (30) days' notice.
<PAGE>
c. No personal property included as part of the Property shall be
removed from the Property unless the same is replaced with similar items of at
least equal quality prior to the Closing excluding, however, computer software,
maintenance supplies and other items that may be depleted in the ordinary
course of Seller's business.
d. Seller shall not withdraw, settle or otherwise compromise any
protest or reduction proceeding affecting real estate taxes assessed against
the Property for any fiscal period in which the Closing is to occur or any
subsequent fiscal period without the prior written consent of Purchaser. Real
estate tax refunds and credits received after the Closing which are
attributable to the fiscal tax year during which the Closing occurs shall be
apportioned between Seller and Purchaser, after deducting the expenses of
collection thereof, based upon the relative time periods each owns the
Property, which obligation shall survive the Closing.
e. Seller shall allow Purchaser or Purchaser's representatives
access to the Property, the leases and other documents required to be delivered
under this Agreement upon reasonable prior notice, during Seller's regular
business hours, and provided same shall not unreasonably interfere with
Seller's ordinary course of business.
f. Whenever Purchaser's or Seller's consent is required, Purchaser
or Seller shall not unreasonably withhold its consent or unreasonably delay in
giving its consent. If Purchaser or Seller fails to respond to a written
request within three (3) business days after receipt of the request, then
Purchaser or Seller, as the case may be, shall be deemed to have given its
consent.
19. SELLER'S REPRESENTATIONS AND WARRANTIES AND LIABILITY.
a. Any reference herein to Seller's knowledge, representation,
warranty or notice of any matter or thing, shall only mean such knowledge or
notice that has actually been received by Mark Saturno. Any representation or
warranty of Seller is based upon those matters of which Mark Saturno has actual
knowledge after having made inquiry by delivering a copy of the representations
enumerated in this Section 19 to the resident manager of the Property. Any
knowledge or notice given, had or received by any of Seller's agents, servants
or employees shall not be imputed to Seller or the individual partners or the
general partner of Seller.
b. Subject to the limitations set forth in subparagraph a. above,
Seller hereby makes the following representations and warranties, all of which
are made to Seller's knowledge, which shall survive the Closing and delivery of
the Deed for a period of ninety (90) days (i.e., the claiming party shall have
no right to make any claims against the other party for a breach of
representation or warranty after the expiration of ninety (90) days immediately
following Closing):
i. The present use and occupancy of the Property conforms with
applicable building and zoning laws and Seller has not received any written
notice that any such laws, rules or regulations are being violated.
<PAGE>
ii. The rent roll ("Rent Roll") attached hereto as Exhibit M
which will be updated as of the Closing Date is true and accurate as of the
date thereon.
iii. Seller has no knowledge of any pending or threatened
litigation, claim, cause of action or administrative proceeding concerning the
Property, except as disclosed on Exhibit N attached hereto.
iv. As of the date of the Agreement, there are no leases,
subleases, licenses or other rental agreements or occupancy agreements (written
or verbal) which grant any possessory interest in and to any space situated on
or in the Improvements or that otherwise give rights with regard to use of the
Improvements other than the leases ("Leases") described in the Rent Roll. The
Rent Roll is true, accurate and complete as of the date hereof. Except as
otherwise specifically set forth in the Rent Roll or elsewhere in this
Agreement or attached to the Leases:
(1) the Leases are in full force and effect and, except as set
forth on the Rent Roll or the lease files at the Property, none of them has
been modified, amended or extended;
(2) no tenant, or any other person, entity or association has
an option to purchase, right of first refusal, right of first offer or other
similar non-leasing right in respect of all or any unit in the Property;
(3) no leasing commission shall be due for any period
subsequent to the Closing Date other than for tenants who have executed a lease
prior to Closing but do not move in until after the Closing Date, which
commissions shall be paid by Purchaser and shall be no more than a total of
$50.00 per lease for new leases and $150.00 per quarter for renewal leases for
all employees of the property manager.
(4) except as set forth on the Rent Roll, no tenant is entitled
to rental concessions or abatements for any period subsequent to the Closing
Date;
(5) Seller has neither sent written notice to any tenant of the
Property, nor received any written notice from any such tenant, claiming that
such tenant, or Seller, as the case may be, is in default, which default
remains uncured other than as shown on the Rent Roll attached hereto;
(6) no action or proceeding instituted against Seller by any
tenant of any unit in the Property is presently pending;
(7) there are no security deposits or other deposits other than
those set forth in the Rent Roll;
(8) no rent has been paid more than thirty (30) days in advance
under any lease of any unit in the Property other than as shown on the Rent
Roll;
v. The apartment units in the Improvements are not subject to, nor
does Seller receive the benefit of, any rent subsidies or rental assistance
programs. No apartment unit is subject to any rent control law, ordinance or
regulation.
<PAGE>
vi. Exhibit O attached hereto lists all services, maintenance, and
supply contracts (collectively, "Service Contracts") affecting the
construction, use, ownership, maintenance and/or operation of the Property, and
the information set forth therein is accurate and complete.
vii. Seller has full power to execute, deliver and carry out the
terms and provisions of this Agreement and has taken all necessary action to
authorize the execution, delivery and performance of this Agreement, and this
Agreement constitutes the legal, valid and binding obligation of Seller,
enforceable in accordance with its terms. No order, permission, consent,
approval license, authorization, registration or validation of, or filing with,
or exemption by, any governmental agency, commission, board or public authority
is required to authorize, or is required in connection with, the execution,
delivery and performance of this Agreement by Seller or the taking by Seller of
any action contemplated by this Agreement.
viii. Seller has not received written notice:
(1) from any federal, state, county or municipal authority
alleging any fire, health, safety, building, pollution, environmental, zoning
or other violation of law in respect of the Property or any part hereof, which
has not been entirely corrected; or
(2) concerning any special taxes or assessments levied or to be
levied against the Property or any part thereof; or
(3) from any insurance company or bonding company of any
defects or inadequacies in the Property or any part thereof, which would
adversely affect the insurability of the same or cause the imposition of
extraordinary premiums or charges therefor or of any termination or threatened
termination of any policy of insurance or bond; or
(4) concerning any change in the zoning classification of the
Property or any part thereof.
If any such notice is received prior to the Closing, Seller shall promptly
notify Purchaser thereof and comply with any requirements of such notice prior
to the Closing.
ix. No assessments for public improvements have been made against
the Property which are unpaid, including, without limitation, those of
construction of sewer and water lines, streets, sidewalks and curbs.
x. Seller has not entered into any management contracts, employment
contracts or labor union contracts and has not established any retirement,
pension or profit sharing plans relating to the operation or maintenance of the
Property which shall survive the Closing or for which Purchaser shall have any
liability or obligation.
xi. Seller has not received notice of any proposed plans to widen,
modify, or realign any street or highway or any existing or proposed eminent
domain proceedings which would affect the Property.
<PAGE>
xii. There are no pending insolvency proceedings of any nature
presently existing against Seller or the Property.
Seller hereby agrees to remake the aforesaid representations and
warranties at Closing. If at any time after the execution of this Agreement,
Seller becomes aware of information which makes a representation or warranty
contained in this Agreement to become untrue in any material respect, Seller
shall promptly disclose said information to Purchaser. Provided the
representation or warranty was true when made and further provided that Seller
did not take any deliberate actions to cause the representation or warranty in
question to become untrue in any material respect, Seller shall not be in
default under this Agreement and the sole remedy of Purchaser shall be to
terminate this Agreement. Notwithstanding anything contained herein to the
contrary, if the status of any of the tenancies changes from the date of the
Rent Roll attached hereto and the date of the Rent Roll delivered at Closing,
provided the change in status is not caused by a breach of Seller's covenants
contained herein, then Purchaser shall not have the right to terminate this
Agreement or make any claim for a breach of a representation or warranty
hereunder involving the Rent Roll or tenancies thereunder. Purchaser and
Seller are prohibited from making any claims against the other party hereto
after the Closing with respect to any breaches of the other party's
representations and warranties contained in this Agreement that the claiming
party had actual knowledge of prior to Closing. Notwithstanding anything
contained herein to the contrary, Purchaser hereby agrees that the maximum
aggregate liability of Seller, in connection with, arising out of or in any way
related to a breach by Seller under this Agreement or any document or
conveyance agreement in connection with the transaction set forth herein after
the Closing shall be $50,000.00. Purchaser hereby waives for itself and anyone
who may claim by, through or under Purchaser any and all rights to sue or
recover from Seller any amount greater than said limit.
20. PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser hereby
represents and warrants to Seller that Purchaser has the full right, power and
authority to execute this Agreement and consummate the transactions
contemplated herein.
21. LIMITATION OF LIABILITY. No general or limited partner of Seller or
of Purchaser, nor any of their respective beneficiaries, shareholders,
partners, officers, agents, employees, heirs, successors or assigns shall have
any personal liability of any kind or nature for or by reason of any matter or
thing whatsoever under, in connection with, arising out of or in any way
related to this Agreement and the transactions contemplated herein, and
Purchaser and Seller hereby waive for themselves and anyone who may claim by,
through or under Purchaser or Seller, as the case may be, any and all rights to
sue or recover on account of any such alleged personal liability.
22. ORGANIZATIONAL DOCUMENTS. At least ten (10) days prior to the
Closing Date, the parties will provide the other party's attorney with evidence
of authority to consummate the transactions contemplated hereunder including
copies of its organizational documents, including a certified copy of its
recorded certificate of limited partnership and a true copy of its Partnership
Agreement or a certified copy of its Articles of Incorporation, corporate
resolutions authorizing the transaction, and an incumbency certificate,
whichever is applicable.
<PAGE>
23. MISCELLANEOUS.
a. Seller agrees not to distribute $50,000.00 of the proceeds of
the Purchase Price to its partners for the longer of (i) ninety (90) days after
the Closing and (ii) final resolution of any claims by Purchaser asserted in
writing against Seller prior to the expiration of the ninety (90) days after
the Closing in accordance with the terms of this Agreement ("Claims");
provided, however, that if any Claims are disputed by Seller, Seller shall have
the right, by written notice to Purchaser, to require Purchaser to file suit in
a court of competent jurisdiction within thirty (30) days after such notice to
Purchaser; otherwise said notice with respect to the Claim in question shall no
longer prevent Seller from distributing the proceeds.
b. On the Closing Date, all apartments that were vacated greater
than fifteen (15) days prior to Closing shall be in a "Rent Ready Condition".
Purchaser shall receive a credit against the cash due at Closing in the amount
of $250.00 for each apartment which has been vacant for greater than fifteen
(15) days and which is not in a Rent Ready Condition.
24. TIME OF ESSENCE. Time is of the essence of this Agreement.
25. NOTICES. Any notice or demand which either party hereto is required
or may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by overnight courier
such as Federal Express or by facsimile or made by United States registered or
certified mail addressed as follows:
TO SELLER: c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attn: Ilona Adams
with copies to: The Balcor Company
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attn: Mark Saturno
847/317-4397
847/317-4462 (FAX)
and
Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, Illinois 60661-3693
Attn: Daniel J. Perlman, Esq.
312/902-5532
312/902-1061 (FAX)
<PAGE>
TO PURCHASER: Housing Systems, Incorporated
5505 Interstate North Parkway, N.W.
Atlanta, Georgia 30328-4603
Attn: Russell A. Greer
770/952-2233
770/956-9057 (FAX)
with a copy to: Powell, Goldstein, Frazer & Murphy
The Lenox Building
3399 Peachtree Road, N.E.
Suite 2000
Atlanta, Georgia 30326
Attn: Kenneth H. Harrigan, Esq.
404/365-0456
404/365-0629
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be
deemed to be delivered or made on the next business day if sent by overnight
courier, or on the same day if sent by facsimile before the close of business,
or the next day if sent by facsimile after the close of business, or on the 4th
business day after the same is deposited in the United States Mail as
registered or certified matter, addressed as above provided, with postage
thereon fully prepaid. Any such notice, demand or document not given,
delivered or made by registered or certified mail or by overnight courier or by
facsimile as aforesaid shall be deemed to be given, delivered or made upon
receipt of the same by the party to whom the same is to be given, delivered or
made. Copies of all notices shall be served upon the Escrow Agent.
26. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute
three (3) copies of this Agreement and three (3) copies of the Escrow Agreement
and forward them to Seller for execution, accompanied with the Earnest Money
payable to the Escrow Agent. Seller will forward one (1) copy of the executed
Agreement to Purchaser and will forward the following to the Escrow Agent:
a. Earnest Money;
b. One (1) fully executed copy of this Agreement; and
c. Three (3) copies of the Escrow Agreement signed by the parties
with a direction to execute two (2) copies of the Escrow Agreement and deliver
a fully executed copy to Purchaser and Seller.
27. GOVERNING LAW. The provisions of this Agreement shall be governed by
the laws of the State of Florida.
28. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all other negotiations, understandings and
representations made by and between the parties and the agents, servants and
employees.
29. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
<PAGE>
30. CAPTIONS. Paragraph titles or captions contained herein are inserted
as a matter of convenience and for reference, and in no way define, limit,
extend or describe the scope of this Agreement or any provision hereof.
31. RADON GAS. RADON IS A NATURALLY OCCURRING RADIOACTIVE GAS THAT, WHEN
IT HAS ACCUMULATED IN A BUILDING IN SUFFICIENT QUANTITIES, MAY PRESENT HEALTH
RISKS TO PERSONS WHO ARE EXPOSED TO IT OVER TIME. LEVELS OF RADON THAT EXCEED
FEDERAL AND STATE GUIDELINES HAVE BEEN FOUND IN BUILDINGS IN FLORIDA.
ADDITIONAL INFORMATION REGARDING RADON AND RADON TESTING MAY BE OBTAINED FROM
YOUR COUNTY PUBLIC HEALTH UNIT. THIS PARAGRAPH IS PROVIDED FOR INFORMATIONAL
PURPOSES PURSUANT TO SECTION 404.056(8), FLORIDA STATUTES, (1988).
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date set forth above.
PURCHASER:
HOUSING SYSTEMS, INCORPORATED
By: /s/ Russell A. Greer
-----------------------------------
Name: Russell A. Greer
-----------------------------------
Title: EVP
-----------------------------------
SELLER:
GRD LIMITED PARTNERSHIP, an Illinois limited
partnership
By: GRD Limited Partners, Inc., an Illinois
corporation, its general partner
By: /s/ James E. Mendelson
-----------------------------------
Name: James E. Mendelson
-----------------------------------
Title: Authorized Representative
-----------------------------------
<PAGE>
EXHIBITS
Exhibit A - Legal Description
Exhibit B - Personal Property
Exhibit C - Escrow Agreement
Exhibit D - Title Commitment
Exhibit E - Intentionally Omitted
Exhibit F - Deed
Exhibit G - Bill of Sale
Exhibit H - Assignment and Assumption of Service Contracts, Warranties and
Intangibles
Exhibit I - Assignment and Assumption of Leases and Security Deposits
Exhibit J - Notice to Tenants
Exhibit K - FIRPTA Affidavit
Exhibit L - Bringdown Certificate
Exhibit M - Rent Roll
Exhibit N - Litigation
Exhibit O - Service Contracts
<PAGE>
FIRST AMENDMENT TO AGREEMENT OF SALE
THIS FIRST AMENDMENT TO AGREEMENT OF SALE (this "Amendment") is made and
entered into as of this 23rd day of September, 1996, by and between GRD Limited
Partnership, an Illinois limited partnership ("Seller") and Housing Systems,
Incorporated, a Georgia corporation ("Purchaser").
RECITALS:
A. Seller and Purchaser are parties to that certain Agreement of Sale,
dated September 17, 1996 ("Agreement"), pursuant to which Purchaser has agreed
to purchase and Seller has agreed to sell certain Property (as defined in the
Agreement) legally described and depicted on Exhibit A attached to the
Agreement.
B. Seller and Purchaser desire to amend the Agreement in accordance with
the terms of this Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. All terms not otherwise defined herein shall have the meanings ascribed to
each in the Agreement.
2. Paragraph 8 of the Agreement is hereby deleted in its entirety and the
following inserted in lieu thereof:
"8. FINANCING CONTINGENCY. Purchaser's and Seller's obligations
under this Agreement are contingent upon Purchaser's ability to procure a
commitment for first mortgage financing for the acquisition of the Property in
an amount of not less than $2,137,500.00 with a 9.5% per annum constant
interest rate and 20 year amortization (the "Financing Contingency") on or
before October 21, 1996. Purchaser acknowledges and agrees that it shall
submit its application for a commitment for first mortgage financing in
accordance with the provisions set forth above on or before October 7, 1996,
and shall provide Seller with either a letter from the lender evidencing that
said application and any application fee has been received or an affidavit from
Purchaser stating that Purchaser submitted said application and paid any
application fee on or before October 7, 1996 ("Application Evidence"). In the
event Purchaser has complied with the requirements set forth in the preceding
sentence, but is unable to satisfy the Financing Contingency on or before
October 21, 1996, then Purchaser shall have the option, upon written notice to
Seller, exercised no later than October 21, 1996, to terminate this Agreement,
in which case this Agreement shall become null and void without further action
of the parties and all Earnest Money theretofore deposited into the escrow by
Purchaser together with any interest accrued thereon, shall be delivered to
<PAGE>
Purchaser, and neither party shall have any further liability to the other,
except for those covenants and obligations hereunder which expressly survive
the termination of this Agreement. In the event Purchaser fails to deliver
such notice to Seller or Purchaser fails to deliver the Application Evidence on
or before October 7, 1996, the Financing Contingency shall be deemed satisfied
and the parties hereto shall proceed to Closing."
3. Except as amended hereby, the Agreement shall be and remain unchanged and
in full force and effect in accordance with its terms.
4. This Amendment may be executed in counterparts each of which shall be
deemed an original, but all of which, when taken together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first set forth above.
PURCHASER:
HOUSING SYSTEMS, INCORPORATED, a Georgia corporation
By: /s/ Russell A. Greer
-------------------------------------
Name: Russell A. Greer
-------------------------------------
Its: Executive VP
-------------------------------------
SELLER:
GRD LIMITED PARTNERSHIP, an Illinois limited
partnership
By: GRD Limited Partners, Inc., an Illinois
corporation, its general partner
By: /s/ James E. Mendelson
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Name: James E. Mendelson
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Its: Authorized Rep
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<PAGE>
[The Plantation Apartments]
AGREEMENT OF SALE
THIS AGREEMENT ("Agreement") is entered into as of the 17th day of
September, 1996, by and between HOUSING SYSTEMS, INCORPORATED, a Georgia
corporation ("Purchaser"), and PNT LIMITED PARTNERSHIP, an Illinois limited
partnership ("Seller").
WITNESSETH:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to
sell at the price of Three Million Five Hundred Fifty Thousand and No/100
Dollars ($3,550,000.00), the following:
a. those certain tracts or parcels of land located in Hillsborough
County, Florida, more particularly described on Exhibit A attached hereto
("Land");
b. the 126 unit apartment complex, commonly known as The Glades
Apartments, which contains related improvements, facilities, amenities,
structures, driveways, walkways, plumbing and heating pipes, culverts, and
mains ("Improvements");
c. all right, title and interest of Seller in and to any alleys,
strips or gores adjoining the Land, and any easements, rights-of-way or other
interests in, on, under or to, any land, highway, street, road, right-of-way or
avenue, open or proposed, in, on, under, across, in front of, abutting or
adjoining the Land, and all right, title and interest of Seller in and to any
awards for damage thereto by reason of a change of grade thereof;
d. the accessions, appurtenant rights, privileges, appurtenances
and all the estate and rights of Seller in and to the Land and the
Improvements, as applicable, or otherwise appertaining to any of the property
described in the immediately preceding clauses (a), (b) and (c);
e. the fixtures, equipment and other personal property listed on
Exhibit B attached hereto and all other fixtures, machinery, supplies,
equipment, computer hardware and, except for computer software, the other
personal property owned by Seller and located on or in or used solely in
connection with the Land and Improvements (collectively, the "Personal
Property"); and
f. all of Seller's interest in any intangible property now or
hereafter owned by Seller and used solely in connection with its Land,
Improvements and Personal Property, including without limitation the right to
use any trade style or name now used in connection with the same, any contract
rights, escrow or security deposits, utility agreements or other rights related
to the ownership of or use and operation of the Property, as hereinafter
defined.
All of the items described in subparagraphs (a), (b), (c), (d), (e) and
(f) above are referred to as the "Property".
<PAGE>
2. PURCHASE PRICE. The purchase price ("Purchase Price") shall be paid
as follows:
a. Upon the execution of this Agreement, Fifty Thousand and No/100
Dollars ($50,000.00) ("Earnest Money") to be held in escrow by the Escrow Agent
(as that term is defined in the "Escrow Agreement" [as hereinafter defined]) by
and in accordance with the provisions of the Escrow Agreement ("Escrow
Agreement") attached hereto as Exhibit C;
b. On the "Closing Date" (as hereinafter defined), the balance of
the Purchase Price adjusted in accordance with the prorations by federally
wired "immediately available" funds delivered to the "Title Insurer" (as
hereinafter defined) no later than 12:00 Noon Central time on the Closing Date
(as hereinafter defined). If the funds are not received by 12:00 Noon Central
time, then, on the Closing Date, Purchaser shall pay Seller an amount equal to
any additional mortgage per diem interest costs incurred by Seller.
c. The parties agree the Purchase Price shall be allocated among
the various components of the Property in a manner to be reasonably agreed upon
by the parties prior to September 23, 1996.
3. TITLE COMMITMENT AND SURVEY.
a. Within twenty-eight (28) days of the date hereof, Seller shall
deliver a survey ("Survey") of the Property to Purchaser. Seller and Purchaser
shall each pay for one-half of the costs of the Survey.
b. Within ten (10) days of the date hereof, Purchaser shall obtain
a title commitment ("Title Commitment") for an owner's standard title insurance
policy issued by , on behalf of First
American Title Insurance Company (hereinafter referred to as "Title Insurer")
for the Property.
c. If the Title Commitment or the Survey discloses any exceptions
to title objectionable to Purchaser, Purchaser may give written notice to
Seller (the "Title Notice") of Purchaser's disapproval of any such exceptions
(an "Unpermitted Exception") on or before five (5) business days following
Purchaser's receipt of both the Title Commitment and the Survey. Any title
exceptions which are set forth in the Title Commitment or on the Survey to
which Purchaser does not object in accordance with the immediately preceding
sentence shall be deemed "Permitted Exceptions". With regard to an Unpermitted
Exception for which Purchaser gives Seller a Title Notice, Seller may but shall
not have the obligation to notify Purchaser (the "Response Notice") within
three (3) business days of receipt of the Title Notice whether Seller shall
bond over, cure or cause the Title Insurer to remove such Unpermitted Exception
from the Title Commitment. Any such Unpermitted Exception which Seller elects
to bond over, cure or cause the Title Insurer to remove shall be additional
Permitted Exceptions. If Seller does not so notify Purchaser, with respect to
any Unpermitted Exception, Purchaser may either waive its objection and proceed
towards closing or terminate this Agreement by giving written notice to Seller
of its election within three (3) additional business days of the earlier to
<PAGE>
occur of (a) receipt by Purchaser of the Response Notice and (b) expiration of
the three (3) business day period in which Seller may deliver the Response
Notice. If Purchaser does not give such written notice within such three (3)
additional business days, (i) Purchaser shall have waived its right to
terminate this Agreement pursuant to this Paragraph 3c; (ii) such Unpermitted
Exception shall be deemed an additional Permitted Exception; and (iii) the
parties shall proceed to Closing. If Purchaser terminates this Agreement by
written notice to Seller within such three (3) additional business days: (i)
Purchaser shall promptly deliver to Seller copies of all studies, reports and
other investigations obtained by Purchaser in connection with its due diligence
of the Property, (ii) the Earnest Money deposited by Purchaser shall be
immediately paid to Purchaser, together with any interest earned thereon and
(iii) neither Purchaser nor Seller shall have any right, obligation or
liability under this Agreement, except for Purchaser's obligation to indemnify
Seller and restore the Property, as more fully set forth in Paragraph 117.
d. The Title Commitment and the Existing Survey shall be conclusive
evidence of good title as therein shown as to all matters to be insured by the
title policy, subject only to the exceptions therein stated. On the Closing
Date, Title Insurer shall deliver to Purchaser a ALTA 1992 Form Title Policy in
conformance with the previously delivered Title Commitment, subject to only the
Permitted Exceptions and Unpermitted Exceptions waived by Purchaser (the "Title
Policy"). Seller and Purchaser shall equally share the costs of the Title
Commitment and Title Policy and the cost of deletion of the survey exception,
if required by Purchaser. Purchaser shall pay the cost of any endorsements to,
and the extended coverage on, the Title Policy.
e. The obligation of Purchaser to pay various costs set forth in
Paragraphs 3a and 3d shall survive the termination of this Agreement.
4. CONDITION OF TITLE/CONVEYANCE. Seller agrees to convey fee simple
title to the Property by Special Warranty Deed ("Deed") in recordable form
subject only to the Permitted Exceptions and Unpermitted Exceptions waived by
Purchaser. If, prior to "Closing" (as hereinafter defined), a date-down to the
Title Commitment discloses any new Unpermitted Exception, Seller shall have
thirty (30) days from the date of the date-down to the Title Commitment, 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 (as hereinafter defined) shall be delayed, if
necessary, to give effect to said aforementioned time periods. If Seller fails
to cure or have said Unpermitted Exception removed or have the Title Insurer
commit to insure as specified above within said thirty (30) day period or if
Seller elects not to exercise its rights under (ii) in the immediately
preceding sentence, Purchaser may terminate this Agreement upon notice to
Seller within five (5) business days after the expiration of said thirty (30)
<PAGE>
day period. Absent notice from Purchaser to Seller in accordance with the
immediately 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 4, this Agreement
shall become null and void without further action of the parties and all
Earnest Money theretofore deposited into the escrow by Purchaser together with
any interest accrued thereon, shall be returned to Purchaser, and neither party
shall have any further liability to the other, except for Purchaser's
obligation to indemnify Seller and restore the Property, as more fully set
forth in Paragraph 17.
5. PAYMENT OF CLOSING COSTS. Purchaser and Seller shall equally share
the costs of the documentary stamps (if any) to be paid with reference to the
Deed and all other stamps, intangible, documentary, recording, sales tax and
surtax imposed by law with reference to any other documents delivered in
connection with this Agreement.
6. DAMAGE, CASUALTY AND CONDEMNATION.
a. Until the Closing Date, Seller shall maintain its present
insurance on the Property. If the Property suffers damage as a result of any
casualty prior to the Closing Date and can be repaired or restored in the case
of real property for $100,000 or less, or in the case of Personal Property, for
$10,000 or less, then Seller shall repair such damage in an expeditious manner
and the Closing shall be extended until the repairs are complete to Purchaser's
reasonable satisfaction. Seller shall retain all insurance proceeds. If the
cost of repair and restoration exceeds those amounts, then Purchaser can elect
to either: (a) proceed with the purchase of the Property and in such event,
unless Seller shall have restored the Property prior to the Closing Date,
Seller shall pay over or assign to Purchaser all amounts received or due (and
Purchaser shall receive a credit against the cash due at Closing in an amount
equal to any deductible under any insurance policy covering the damaged
Property) from, and all claims against, any insurance company as a result of
such damage; or (b) terminate this Agreement upon notice to Seller served
within twenty (20) business days of such casualty.
b. If condemnation proceedings ("Proceedings") have been instituted
against the Property which might result in the taking of any part of the
Property which shall (i) materially impair access to the Property; (ii) cause
any material non-compliance with any applicable law, ordinance, rule or
regulation of any federal, state or local authority or governmental agencies
having jurisdiction over the Property or any portion thereof; or (iii)
materially and adversely impair the use of the Property as it is currently
being operated, then Purchaser can elect to either take the Property subject to
the Proceedings and an assignment of Seller's interest in the Proceedings or
terminate this Agreement. If Purchaser elects to terminate this Agreement, it
shall be by notice to Seller within ten (10) days after Purchaser has received
notice of the Proceedings.
c. If this Agreement is terminated pursuant to this Paragraph, then
all Earnest Money plus the interest accrued thereon shall be returned to
Purchaser and, subject to the survival provisions of Paragraph 17 herein,
neither party shall have any further liability hereunder.
<PAGE>
7. AS-IS CONDITION.
a. Purchaser acknowledges and agrees that it will be purchasing the
Property based solely upon its inspection and investigations of the Property
and that Purchaser will be purchasing the Property "AS IS" and "WITH ALL
FAULTS" based upon the condition of the Property as of the date of this
Agreement subject to reasonable wear and tear and loss by fire or other
casualty or condemnation and, subject to the provisions of Paragraph 6 above,
from the date of this Agreement until the Closing Date. Without limiting the
foregoing, Purchaser acknowledges that, except as may otherwise be specifically
set forth elsewhere in this Agreement, neither Seller nor their consultants nor
agents have made any other representations or warranties of any kind upon which
Purchaser is relying as to any matters concerning the Property, including, but
not limited to, the condition of the Land or Improvements, the presence or
absence of asbestos, toxic waste or any Hazardous Materials (as hereinafter
defined) or Hazardous Substances (as hereinafter defined), the tenants of the
Property or the leases affecting the Property, economic projections or market
studies concerning the Property, any development rights, taxes, bonds,
covenants, conditions and restrictions affecting the Property, water or water
rights, topography, drainage, soil, subsoil of the Property, the utilities
serving the Property or any zoning, environmental or building laws, rules or
regulations affecting the Property. Seller makes no representation that the
Property complies with Title III of the Americans With Disabilities Act or any
fire codes or building codes. Purchaser hereby releases Seller from any and
all liability in connection with any claims which Purchaser may have against
Seller, and Purchaser hereby agrees not to assert any claims, for contribution,
cost recovery or otherwise, against Seller, relating directly or indirectly to
the existence of asbestos or Hazardous Materials or Hazardous Substances on, or
environmental conditions of, the Property. As used herein, the term "Hazardous
Materials" or "Hazardous Substances" means (i) hazardous wastes, hazardous
substances, hazardous constituents, toxic substances or related materials,
whether solids, liquids or gases, including but not limited to substances
defined as "hazardous wastes," "hazardous substances," "toxic substances,"
"pollutants," "contaminants," "radioactive materials," or other similar
designations in, or otherwise subject to regulation under, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), 42 U.S.C. Section 9601 et seq.; the Toxic Substance Control Act
("TSCA"), 15 U.S.C. Section 2601 et seq.; the Hazardous Materials
Transportation Act 49 U.S.C. Section 1802; the Resource Conservation and
Recovery Act ("RCRA"), 42 U.S.C. Section 9601, et seq.; the Clean Water Act
("CWA"), 33 U.S.C. Section 1251 et seq.; the Safe Drinking Water Act, 42 U.S.C.
Section 300f et seq.; the Clean Air Act ("CAA"), 42 U.S.C. Section 7401 et
seq.; and in any permits, licenses, approvals, plans, rules, regulations or
ordinances adopted, or other criteria and guidelines promulgated pursuant to
the preceding laws or other similar federal, state or local laws, regulations,
rules or ordinance now or hereafter in effect relating to environmental matters
(collectively, the "Environmental Laws"); and (ii) any other substances,
constituents or wastes subject to any applicable federal, state or local law,
regulation or ordinance, including any Environmental Law, now or hereafter in
effect, including but not limited to (A) petroleum, (B) refined petroleum
products, (C) waste oil, (D) waste aviation or motor fuel and (E) asbestos.
<PAGE>
b. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller has owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Seller makes no representation or
warranty that such material is complete or accurate or that Purchaser will
achieve similar financial or other results with respect to the operations of
the Property, it being acknowledged by Purchaser that Seller's operation of the
Property and allocations of revenues or expenses may be vastly different than
Purchaser may be able to attain. Purchaser acknowledges that it is a
sophisticated and experienced purchaser of real estate and further that
Purchaser has relied upon its own investigation and inquiry with respect to the
operation of the Property and releases Seller from any liability with respect
to such historical information.
c. Seller has provided to Purchaser the following existing report:
Preliminary Environmental Site Assessment (Phase I) and Limited Asbestos
Survey, dated July 2, 1990, prepared by Law Associates, Inc. ("Existing
Report"). Seller makes no representation or warranty concerning the accuracy
or completeness of the Existing Report. Purchaser hereby releases Seller and
the Affiliates of Seller from any liability whatsoever with respect to the
Existing Report, including, without limitation, the matters set forth in the
Existing Report, and the accuracy and/or completeness of the Existing Report.
Furthermore, Purchaser acknowledges that it will be purchasing the Property
with all faults disclosed in the Existing Report. Notwithstanding anything
contained herein to the contrary, the terms of this Paragraph 7.c. shall
survive the Closing and the delivery of the Deed and termination of this
Agreement.
8. FINANCING CONTINGENCY. Purchaser's and Seller's obligations under
this Agreement are contingent upon Purchaser's ability to procure a commitment
for first mortgage financing for the acquisition of the Property in an amount
of not less than $2,662,500.00 with a 9.5% per annum constant interest rate and
20 year amortization (the "Financing Contingency") on or before September 23,
1996. Purchaser acknowledges and agrees that it shall submit its application
for a commitment for first mortgage financing in accordance with the provisions
set forth above within ten (10) business days from the date hereof, and shall
provide Seller with either a letter from the lender evidencing that said
application and any application fee has been received or an affidavit from
Purchaser stating that Purchaser submitted said application and paid any
application fee within ten (10) business days from the date hereof. In the
event Purchaser has complied with the requirements set forth in the preceding
sentence, but is unable to satisfy the Financing Contingency on or before
September 23, 1996, then Purchaser shall have the option, upon written notice
to Seller, exercised no later than September 23, 1996, to terminate this
Agreement, in which case this Agreement shall become null and void without
further action of the parties and all Earnest Money theretofore deposited into
the escrow by Purchaser together with any interest accrued thereon, shall be
delivered to Purchaser, and neither party shall have any further liability to
the other, except for those covenants and obligations hereunder which expressly
survive the termination of this Agreement. In the event Purchaser fails to
deliver such notice to Seller, the Financing Contingency shall be deemed
satisfied and the parties hereto shall proceed to Closing.
<PAGE>
9. CLOSING. The closing of this transaction ("Closing") shall be on
October 31, 1996 ("Closing Date"), at the office of Purchaser's counsel,
Atlanta, Georgia, at which time Seller shall deliver possession of the Property
to Purchaser. In the event that all required funds and documents have been
delivered to Escrow Agent or exchanged by the parties, the parties agree that
the Closing may be conducted by Escrow Agent without the parties or counsel
present.
10. CLOSING DOCUMENTS.
a. On the Closing Date, Purchaser shall deliver to Seller an
executed closing statement, the balance of the Purchase Price, an assumption of
the Assignment and Assumption of Intangibles (as hereinafter defined), an
assumption of the Assignment and Assumption of Leases (as hereinafter defined),
and such other documents as may be reasonably required in order to consummate
the transaction as set forth in this Agreement.
b. On the Closing Date, Seller shall deliver, or cause to be
delivered, the following to Purchaser: possession of the Property; the executed
Deed (in the form of Exhibit F attached hereto) subject to the Permitted
Exceptions; the Title Policy (or "marked-up commitments"); terminations of any
management agreements affecting the Property; an inventory of the Personal
Property for the Property and a Bill of Sale for the same (in the form of
Exhibit G attached hereto); executed closing statements; executed assignment
and assumption of all service contracts, warranties and intangibles (in the
form of Exhibit H attached hereto, the "Assignment and Assumption of
Intangibles"); executed copies of all warranties, guarantees, maintenance,
supply, repair and service contracts, which affect the Property and which are
in Seller's possession or at the Property, to be delivered at the Property;
executed assignment and assumption of all leases and security deposits (in the
form of Exhibit I attached hereto, the "Assignment and Assumption of Leases");
the original executed leases which shall be delivered at the Property; updated
Rent Roll (as hereinafter defined); notice to the tenants of the Property of
the transfer of title and the assumption by Purchaser of the landlord's
obligations under the leases and the obligation to refund the security deposits
(in the form of Exhibit J attached hereto); non-foreign affidavit (in the form
of Exhibit K attached hereto); bringdown certificate re: representations and
warranties (in the form of Exhibit L attached hereto); certificates of
occupancy for each apartment unit (or building, as applicable) that are in
Seller's possession or at the Property, if any; plans and specifications, if
any, in Seller's possession; and such other documents as may be reasonably
required by the Title Insurer in order to consummate the transaction as set
forth in this Agreement.
11. DEFAULT BY PURCHASER. ALL EARNEST MONEY DEPOSITED INTO THE ESCROW IS
TO SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND
UNDERTAKINGS UNDER THIS AGREEMENT. IN THE EVENT OF ANY DEFAULT OF PURCHASER
UNDER THE PROVISIONS OF THIS AGREEMENT, SELLER SHALL RETAIN ALL OF THE EARNEST
MONEY AND THE INTEREST THEREON AS SELLER'S SOLE RIGHT TO DAMAGES OR ANY OTHER
REMEDY. THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES, IN THE EVENT OF
A DEFAULT BY PURCHASER, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICAL TO
DETERMINE. THEREFORE, BY PLACING THEIR INITIALS BELOW, THE PARTIES ACKNOWLEDGE
THAT THE EARNEST MONEY HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES'
REASONABLE ESTIMATE OF SELLER'S DAMAGES.
<PAGE>
12. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF ANY
SELLER'S DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF ALL EARNEST
MONEY TOGETHER WITH ANY INTEREST ACCRUED THEREON, AND, SUBJECT TO THE SURVIVAL
PROVISIONS OF PARAGRAPH 17 HEREIN, THIS AGREEMENT SHALL TERMINATE AND THE
PARTIES SHALL HAVE NO FURTHER LIABILITY TO EACH OTHER AT LAW OR IN EQUITY.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF A SELLER'S
DEFAULT IS DUE TO ITS REFUSAL TO DELIVER THE DEED, THEN PURCHASER WILL BE
ENTITLED TO SUE FOR SPECIFIC PERFORMANCE.
13. a. PRORATIONS. Rent (exclusive of delinquent rents, but including
prepaid rents); refundable security deposits (which will be assigned to and
assumed by Purchaser and credited to Purchaser at Closing); water and other
utility charges; fuels; prepaid operating expenses for the month in which the
Closing occurs and for future months; real and personal property taxes; and
other similar items shall be adjusted ratably as of 11:59 p.m. on the Closing
Date ("Proration Date"), and credited to the balance of the cash due at
Closing. If for any reason the Proration Date is earlier than the Closing
Date, then for the period from the Proration Date through the Closing Date,
Purchaser shall be entitled to the benefit of all of the income from the
Property and shall bear the burden of all of the operating expenses of the
Property, including, but not limited to, insurance, service contracts, employee
wages and benefits, management fees, utility costs and interest on the existing
mortgages encumbering a Property (if any). If the amount of any of the items
to be prorated is not then ascertainable, the adjustment thereof shall be on
the basis of the most recent ascertainable data. All prorations will be final
except as to delinquent rents referred to in 13b below.
b. DELINQUENT RENTS. If, as of the Closing Date, any rent is in
arrears for thirty (30) days or less, then the first rent collected for the
Property by Purchaser shall be applied to the month in which Closing occurred
and disbursed pro-rata to Purchaser and Seller. If rent is in arrears for a
Property for more than thirty (30) days, then rents collected for the Property
by Purchaser shall be applied first to current rent and then to delinquent
rent. Any amounts received by one party and payable to the other party
pursuant hereto shall be paid within 10 days of receipt of such amounts. This
subparagraph of this Agreement shall survive the Closing and the delivery and
recording of the Deed.
14. RECORDING. This Agreement shall not be recorded and the act of
recording by Purchaser shall be an act of default hereunder by Purchaser and
shall be subject to the provisions of Paragraph 11.
15. ASSIGNMENT. Purchaser shall not have the right to assign its
interest in this Agreement without the prior written consent of Seller. Any
assignment or transfer of, or attempt to assign or transfer, Purchaser's
interest in this Agreement shall be an act of default hereunder by Purchaser.
Notwithstanding the foregoing, Purchaser may assign its interest in this
Agreement without the consent of Seller to any entity in which Purchaser is a
partner or shareholder provided that Purchaser remains liable for and the
assignee assumes the obligations of Purchaser hereunder. If any assignee of
Purchaser ("Assignee") under this Agreement petitions or applies for relief in
<PAGE>
bankruptcy or Assignee is adjudicated as a bankrupt or insolvent, or Assignee
files any petition, application for relief or answer-seeking or acquiescing in
any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief for itself under any present or future federal,
state or other statute, law, code or regulation relating to bankruptcy,
insolvency, or other relief for debtors (collectively, a "Bankruptcy Filing")
on or before the Closing Date, said Bankruptcy Filing shall be a default under
this Agreement and Purchaser shall indemnify Seller for all costs, attorney's
fees and expenses of Seller resulting from Seller's efforts to obtain the
Earnest Money as liquidated damages and to clear title to the Property from any
encumbrance resulting from the Bankruptcy Filing.
16. BROKER. The parties hereto acknowledge that Cushman and Wakefield
(the "Broker") is the only real estate broker involved in this transaction.
Seller agrees to pay the Broker a commission or fee ("Fee") pursuant to a
listing agreement between Seller and Broker. In all events, Purchaser shall
have no obligation to pay any portion of the Fee. However, this Fee is due and
payable only from the proceeds of the Purchase Price received by Seller. The
foregoing does not apply to any fee which may be paid by Seller to any
affiliate of Seller as a result of this transaction. Purchaser agrees to
indemnify, defend and hold harmless Seller and any partner, affiliate, parent
of Seller, and all shareholders, employees, officers and directors of Seller or
Seller's partners, parents or affiliates (each of the above is individually
referred to as a "Seller Indemnitee") from all claims, including attorneys'
fees and costs incurred by a Seller Indemnitee as a result of anyone's claiming
by or through Purchaser any fee, commission or compensation on account of this
Agreement, its negotiation or the sale hereby contemplated. Purchaser does now
and shall at all times consent to a Seller Indemnitee's selection of defense
counsel. Each Seller agrees to indemnify, defend and hold harmless Purchaser
and all shareholders, employees, officers and directors of Purchaser or
Purchaser's parent or affiliate (each of the above is individually referred to
as a "Purchaser Indemnitee") from all claims, including attorneys' fees and
costs incurred by a Purchaser Indemnitee as a result of anyone's claiming by or
through a Seller any fee, commission or compensation on account of this
Agreement its negotiation or the sale hereby contemplated. Seller does now and
shall at all times consent to a Purchaser Indemnitee's selection of defense
counsel. The provisions of this Paragraph will survive the Closing and
delivery of the Deed.
17. DOCUMENTS AND INSPECTION OF PROPERTY
a. Seller has delivered to Purchaser copies of the most recent
available tax bills, rent rolls, insurance premiums, service contracts, utility
account numbers, year-end 1995 and year-to-date 1996 operating statements
(collectively the "Documents"). Purchaser has had the right to inspect and
approve the condition of the Property and conduct such tests and studies as
Purchaser deemed appropriate and to evaluate the physical condition of the
Property and to conduct such evaluation as it deemed appropriate to determine
whether its operation and purchase would be economically feasible including the
interior of the apartments, during normal business hours. Purchaser
acknowledges that it has completed its inspection of the Property and has
approved the condition of the Property. Purchaser shall maintain public
<PAGE>
liability insurance policies insuring against claims arising as a result of the
inspections of the Property being conducted by Purchaser. Purchaser agrees to
indemnify, defend, protect and hold Seller harmless from any and all loss,
costs, including attorneys' fees, liability or damages which Seller may incur
or suffer as a result of Purchaser's inspection and investigation of the
Property including the entry of Purchaser, its employees or agents and its
Lender onto the Property, including without limitation, liability for
mechanics' lien claims.
b. Purchaser agrees to defend and hold Seller harmless from any
injuries, damages or claims of any nature whatsoever which Purchaser's
servants, agents or employees may have as a result of Purchaser's inspection of
the Property. Purchaser further agrees to restore any damage to the Property
which may arise or has arisen as a result of Purchaser's inspection of the
Property.
c. Purchaser's obligations to indemnify, defend and hold Seller
harmless under the provisions of this Paragraph 17 shall survive the
termination of this Agreement or the Closing and the delivery and recording of
the Deed.
18. SELLER'S OBLIGATIONS PRIOR TO CLOSING. Seller covenants that between
the date of this Agreement and the Closing Date:
a. Seller shall not, without Purchaser's prior written consent (i)
enter into any lease for an apartment unit with a first-time tenant unless the
lease is for a period of no more than one year and the rent shall be not less
than the amount currently being charged for similar apartment units; nor (ii)
enter into, amend, renew or extend any lease for an apartment unit with an
existing tenant unless the lease is for a period of not more than one year and
the rent for the amended, renewal or extension term shall not be less than the
rent currently paid by such tenant; nor (iii) terminate any lease except by
reason of a default by the tenant thereunder or by reason of the provisions
contained in the lease.
b. Seller shall not modify nor amend any Service Contract (as
hereinafter defined) nor enter into any new service contract for the Property
without the prior written consent of Purchaser, which consent shall not be
unreasonably withheld or delayed provided no such consent shall be necessary if
the same is terminable without penalty by the then owner of the Property upon
not more than thirty (30) days' notice.
c. No personal property included as part of the Property shall be
removed from the Property unless the same is replaced with similar items of at
least equal quality prior to the Closing excluding, however, computer software,
maintenance supplies and other items that may be depleted in the ordinary
course of Seller's business.
d. Seller shall not withdraw, settle or otherwise compromise any
protest or reduction proceeding affecting real estate taxes assessed against
the Property for any fiscal period in which the Closing is to occur or any
subsequent fiscal period without the prior written consent of Purchaser. Real
<PAGE>
estate tax refunds and credits received after the Closing which are
attributable to the fiscal tax year during which the Closing occurs shall be
apportioned between Seller and Purchaser, after deducting the expenses of
collection thereof, based upon the relative time periods each owns the
Property, which obligation shall survive the Closing.
e. Seller shall allow Purchaser or Purchaser's representatives
access to the Property, the leases and other documents required to be delivered
under this Agreement upon reasonable prior notice, during Seller's regular
business hours, and provided same shall not unreasonably interfere with
Seller's ordinary course of business.
f. Whenever Purchaser's or Seller's consent is required, Purchaser
or Seller shall not unreasonably withhold its consent or unreasonably delay in
giving its consent. If Purchaser or Seller fails to respond to a written
request within three (3) business days after receipt of the request, then
Purchaser or Seller, as the case may be, shall be deemed to have given its
consent.
19. SELLER'S REPRESENTATIONS AND WARRANTIES AND LIABILITY.
a. Any reference herein to Seller's knowledge, representation,
warranty or notice of any matter or thing, shall only mean such knowledge or
notice that has actually been received by Mark Saturno. Any representation or
warranty of Seller is based upon those matters of which Mark Saturno has actual
knowledge after having made inquiry by delivering a copy of the representations
enumerated in this Section 19 to the resident manager of the Property. Any
knowledge or notice given, had or received by any of Seller's agents, servants
or employees shall not be imputed to Seller or the individual partners or the
general partner of Seller.
b. Subject to the limitations set forth in subparagraph a. above,
Seller hereby makes the following representations and warranties, all of which
are made to Seller's knowledge, which shall survive the Closing and delivery of
the Deed for a period of ninety (90) days (i.e., the claiming party shall have
no right to make any claims against the other party for a breach of
representation or warranty after the expiration of ninety (90) days immediately
following Closing):
i. The present use and occupancy of the Property conforms with
applicable building and zoning laws and Seller has not received any written
notice that any such laws, rules or regulations are being violated.
ii. The rent roll ("Rent Roll") attached hereto as Exhibit M
which will be updated as of the Closing Date is true and accurate as of the
date thereon.
iii. Seller has no knowledge of any pending or threatened
litigation, claim, cause of action or administrative proceeding concerning the
Property, except as disclosed on Exhibit N attached hereto.
<PAGE>
iv. As of the date of the Agreement, there are no leases,
subleases, licenses or other rental agreements or occupancy agreements (written
or verbal) which grant any possessory interest in and to any space situated on
or in the Improvements or that otherwise give rights with regard to use of the
Improvements other than the leases ("Leases") described in the Rent Roll. The
Rent Roll is true, accurate and complete as of the date hereof. Except as
otherwise specifically set forth in the Rent Roll or elsewhere in this
Agreement or attached to the Leases:
(1) the Leases are in full force and effect and, except as set
forth on the Rent Roll or the lease files at the Property, none of them has
been modified, amended or extended;
(2) no tenant, or any other person, entity or association has
an option to purchase, right of first refusal, right of first offer or other
similar non-leasing right in respect of all or any unit in the Property;
(3) no leasing commission shall be due for any period
subsequent to the Closing Date other than for tenants who have executed a lease
prior to Closing but do not move in until after the Closing Date, which
commissions shall be paid by Purchaser and shall be no more than a total of
$50.00 per lease for new leases and $750.00 per quarter for renewal leases for
all employees of the property manager;
(4) except as set forth on the Rent Roll, no tenant is entitled
to rental concessions or abatements for any period subsequent to the Closing
Date;
(5) Seller has neither sent written notice to any tenant of the
Property, nor received any written notice from any such tenant, claiming that
such tenant, or Seller, as the case may be, is in default, which default
remains uncured other than as shown on the Rent Roll attached hereto;
(6) no action or proceeding instituted against Seller by any
tenant of any unit in the Property is presently pending;
(7) there are no security deposits or other deposits other than
those set forth in the Rent Roll;
(8) no rent has been paid more than thirty (30) days in advance
under any lease of any unit in the Property other than as shown on the Rent
Roll;
v. The apartment units in the Improvements are not subject to, nor
does Seller receive the benefit of, any rent subsidies or rental assistance
programs. No apartment unit is subject to any rent control law, ordinance or
regulation.
vi. Exhibit O attached hereto lists all services, maintenance, and
supply contracts (collectively, "Service Contracts") affecting the
construction, use, ownership, maintenance and/or operation of the Property, and
the information set forth therein is accurate and complete.
<PAGE>
vii. Seller has full power to execute, deliver and carry out the
terms and provisions of this Agreement and has taken all necessary action to
authorize the execution, delivery and performance of this Agreement, and this
Agreement constitutes the legal, valid and binding obligation of Seller,
enforceable in accordance with its terms. No order, permission, consent,
approval license, authorization, registration or validation of, or filing with,
or exemption by, any governmental agency, commission, board or public authority
is required to authorize, or is required in connection with, the execution,
delivery and performance of this Agreement by Seller or the taking by Seller of
any action contemplated by this Agreement.
viii. Seller has not received written notice:
(1) from any federal, state, county or municipal authority
alleging any fire, health, safety, building, pollution, environmental, zoning
or other violation of law in respect of the Property or any part hereof, which
has not been entirely corrected; or
(2) concerning any special taxes or assessments levied or to be
levied against the Property or any part thereof; or
(3) from any insurance company or bonding company of any
defects or inadequacies in the Property or any part thereof, which would
adversely affect the insurability of the same or cause the imposition of
extraordinary premiums or charges therefor or of any termination or threatened
termination of any policy of insurance or bond; or
(4) concerning any change in the zoning classification of the
Property or any part thereof.
If any such notice is received prior to the Closing, Seller shall promptly
notify Purchaser thereof and comply with any requirements of such notice prior
to the Closing.
ix. No assessments for public improvements have been made against
the Property which are unpaid, including, without limitation, those of
construction of sewer and water lines, streets, sidewalks and curbs.
x. Seller has not entered into any management contracts, employment
contracts or labor union contracts and has not established any retirement,
pension or profit sharing plans relating to the operation or maintenance of the
Property which shall survive the Closing or for which Purchaser shall have any
liability or obligation.
xi. Seller has not received notice of any proposed plans to widen,
modify, or realign any street or highway or any existing or proposed eminent
domain proceedings which would affect the Property.
xii. There are no pending insolvency proceedings of any nature
presently existing against Seller or the Property.
<PAGE>
Seller hereby agrees to remake the aforesaid representations and
warranties at Closing. If at any time after the execution of this Agreement,
Seller becomes aware of information which makes a representation or warranty
contained in this Agreement to become untrue in any material respect, Seller
shall promptly disclose said information to Purchaser. Provided the
representation or warranty was true when made and further provided that Seller
did not take any deliberate actions to cause the representation or warranty in
question to become untrue in any material respect, Seller shall not be in
default under this Agreement and the sole remedy of Purchaser shall be to
terminate this Agreement. Notwithstanding anything contained herein to the
contrary, if the status of any of the tenancies changes from the date of the
Rent Roll attached hereto and the date of the Rent Roll delivered at Closing,
provided the change in status is not caused by a breach of Seller's covenants
contained herein, then Purchaser shall not have the right to terminate this
Agreement or make any claim for a breach of a representation or warranty
hereunder involving the Rent Roll or tenancies thereunder. Purchaser and
Seller are prohibited from making any claims against the other party hereto
after the Closing with respect to any breaches of the other party's
representations and warranties contained in this Agreement that the claiming
party had actual knowledge of prior to Closing. Notwithstanding anything
contained herein to the contrary, Purchaser hereby agrees that the maximum
aggregate liability of Seller, in connection with, arising out of or in any way
related to a breach by Seller under this Agreement or any document or
conveyance agreement in connection with the transaction set forth herein after
the Closing shall be $50,000.00. Purchaser hereby waives for itself and anyone
who may claim by, through or under Purchaser any and all rights to sue or
recover from Seller any amount greater than said limit.
20. PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser hereby
represents and warrants to Seller that Purchaser has the full right, power and
authority to execute this Agreement and consummate the transactions
contemplated herein.
21. LIMITATION OF LIABILITY. No general or limited partner of Seller or
of Purchaser, nor any of their respective beneficiaries, shareholders,
partners, officers, agents, employees, heirs, successors or assigns shall have
any personal liability of any kind or nature for or by reason of any matter or
thing whatsoever under, in connection with, arising out of or in any way
related to this Agreement and the transactions contemplated herein, and
Purchaser and Seller hereby waive for themselves and anyone who may claim by,
through or under Purchaser or Seller, as the case may be, any and all rights to
sue or recover on account of any such alleged personal liability.
22. ORGANIZATIONAL DOCUMENTS. At least ten (10) days prior to the
Closing Date, the parties will provide the other party's attorney with evidence
of authority to consummate the transactions contemplated hereunder including
copies of its organizational documents, including a certified copy of its
recorded certificate of limited partnership and a true copy of its Partnership
Agreement or a certified copy of its Articles of Incorporation, corporate
resolutions authorizing the transaction, and an incumbency certificate,
whichever is applicable.
<PAGE>
23. MISCELLANEOUS.
a. Seller agrees not to distribute $50,000.00 of the proceeds of
the Purchase Price to its partners for the longer of (i) ninety (90) days after
the Closing and (ii) final resolution of any claims by Purchaser asserted in
writing against Seller prior to the expiration of the ninety (90) days after
the Closing in accordance with the terms of this Agreement ("Claims");
provided, however, that if any Claims are disputed by Seller, Seller shall have
the right, by written notice to Purchaser, to require Purchaser to file suit in
a court of competent jurisdiction within thirty (30) days after such notice to
Purchaser; otherwise said notice with respect to the Claim in question shall no
longer prevent Seller from distributing the proceeds.
b. On the Closing Date, all apartments that were vacated greater
than fifteen (15) days prior to Closing shall be in a "Rent Ready Condition".
Purchaser shall receive a credit against the cash due at Closing in the amount
of $250.00 for each apartment which has been vacant for greater than fifteen
(15) days and which is not in a Rent Ready Condition.
24. TIME OF ESSENCE. Time is of the essence of this Agreement.
25. NOTICES. Any notice or demand which either party hereto is required
or may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by overnight courier
such as Federal Express or by facsimile or made by United States registered or
certified mail addressed as follows:
TO SELLER: c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attn: Ilona Adams
with copies to: The Balcor Company
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attn: Mark Saturno
847/317-4397
847/317-4462 (FAX)
and
Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, Illinois 60661-3693
Attn: Daniel J. Perlman, Esq.
312/902-5532
312/902-1061 (FAX)
<PAGE>
TO PURCHASER: Housing Systems, Incorporated
5505 Interstate North Parkway, N.W.
Atlanta, Georgia 30328-4603
Attn: Russell A. Greer
770/952-2233
770/956-9057 (FAX)
with a copy to: Powell, Goldstein, Frazer & Murphy
The Lenox Building
3399 Peachtree Road, N.E.
Suite 2000
Atlanta, Georgia 30326
Attn: Kenneth H. Harrigan, Esq.
404/365-0456
404/365-0629
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be
deemed to be delivered or made on the next business day if sent by overnight
courier, or on the same day if sent by facsimile before the close of business,
or the next day if sent by facsimile after the close of business, or on the 4th
business day after the same is deposited in the United States Mail as
registered or certified matter, addressed as above provided, with postage
thereon fully prepaid. Any such notice, demand or document not given,
delivered or made by registered or certified mail or by overnight courier or by
facsimile as aforesaid shall be deemed to be given, delivered or made upon
receipt of the same by the party to whom the same is to be given, delivered or
made. Copies of all notices shall be served upon the Escrow Agent.
26. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute
three (3) copies of this Agreement and three (3) copies of the Escrow Agreement
and forward them to Seller for execution, accompanied with the Earnest Money
payable to the Escrow Agent. Seller will forward one (1) copy of the executed
Agreement to Purchaser and will forward the following to the Escrow Agent:
a. Earnest Money;
b. One (1) fully executed copy of this Agreement; and
c. Three (3) copies of the Escrow Agreement signed by the parties
with a direction to execute two (2) copies of the Escrow Agreement and deliver
a fully executed copy to Purchaser and Seller.
27. GOVERNING LAW. The provisions of this Agreement shall be governed by
the laws of the State of Florida.
28. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all other negotiations, understandings and
representations made by and between the parties and the agents, servants and
employees.
29. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
<PAGE>
30. CAPTIONS. Paragraph titles or captions contained herein are inserted
as a matter of convenience and for reference, and in no way define, limit,
extend or describe the scope of this Agreement or any provision hereof.
31. RADON GAS. RADON IS A NATURALLY OCCURRING RADIOACTIVE GAS THAT, WHEN
IT HAS ACCUMULATED IN A BUILDING IN SUFFICIENT QUANTITIES, MAY PRESENT HEALTH
RISKS TO PERSONS WHO ARE EXPOSED TO IT OVER TIME. LEVELS OF RADON THAT EXCEED
FEDERAL AND STATE GUIDELINES HAVE BEEN FOUND IN BUILDINGS IN FLORIDA.
ADDITIONAL INFORMATION REGARDING RADON AND RADON TESTING MAY BE OBTAINED FROM
YOUR COUNTY PUBLIC HEALTH UNIT. THIS PARAGRAPH IS PROVIDED FOR INFORMATIONAL
PURPOSES PURSUANT TO SECTION 404.056(8), FLORIDA STATUTES, (1988).
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date set forth above.
PURCHASER:
HOUSING SYSTEMS, INCORPORATED
By: /s/ Russell A. Greer
------------------------------------
Name: Russell A. Greer
------------------------------------
Title: EVP
------------------------------------
SELLER:
PNT PARTNERS LIMITED PARTNERSHIP, an Illinois
limited partnership
By: PNT Partners, Inc., an Illinois corporation,
its general partner
By: /s/ James E. Mendelson
------------------------------------
Name: James E. Mendelson
------------------------------------
Title: Authorized Representative
------------------------------------
<PAGE>
EXHIBITS
Exhibit A - Legal Description
Exhibit B - Personal Property
Exhibit C - Escrow Agreement
Exhibit D - Intentially Omitted
Exhibit E - Intentionally Omitted
Exhibit F - Deed
Exhibit G - Bill of Sale
Exhibit H - Assignment and Assumption of Service Contracts, Warranties and
Intangibles
Exhibit I - Assignment and Assumption of Leases and Security Deposits
Exhibit J - Notice to Tenants
Exhibit K - FIRPTA Affidavitcate
Exhibit M - Rent Roll
Exhibit N - Litigation
Exhibit O - Service Contracts
<PAGE>
FIRST AMENDMENT TO AGREEMENT OF SALE
THIS FIRST AMENDMENT TO AGREEMENT OF SALE (this "Amendment") is made and
entered into as of this 23rd day of September, 1996, by and between PNT
Partners Limited Partnership, an Illinois limited partnership ("Seller") and
Housing Systems, Incorporated, a Georgia corporation ("Purchaser").
RECITALS:
A. Seller and Purchaser are parties to that certain Agreement of Sale,
dated September 17, 1996 ("Agreement"), pursuant to which Purchaser has agreed
to purchase and Seller has agreed to sell certain Property (as defined in the
Agreement) legally described and depicted on Exhibit A attached to the
Agreement.
B. Seller and Purchaser desire to amend the Agreement in accordance with
the terms of this Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. All terms not otherwise defined herein shall have the meanings ascribed to
each in the Agreement.
2. Paragraph 8 of the Agreement is hereby deleted in its entirety and the
following inserted in lieu thereof:
"8. FINANCING CONTINGENCY. Purchaser's and Seller's obligations
under this Agreement are contingent upon Purchaser's ability to procure a
commitment for first mortgage financing for the acquisition of the Property in
an amount of not less than $2,662,500.00 with a 9.5% per annum constant
interest rate and 20 year amortization (the "Financing Contingency") on or
before October 21, 1996. Purchaser acknowledges and agrees that it shall
submit its application for a commitment for first mortgage financing in
accordance with the provisions set forth above on or before October 7, 1996,
and shall provide Seller with either a letter from the lender evidencing that
said application and any application fee has been received or an affidavit from
Purchaser stating that Purchaser submitted said application and paid any
application fee on or before October 7, 1996 ("Application Evidence"). In the
event Purchaser has complied with the requirements set forth in the preceding
sentence, but is unable to satisfy the Financing Contingency on or before
October 21, 1996, then Purchaser shall have the option, upon written notice to
Seller, exercised no later than October 21, 1996, to terminate this Agreement,
in which case this Agreement shall become null and void without further action
of the parties and all Earnest Money theretofore deposited into the escrow by
Purchaser together with any interest accrued thereon, shall be delivered to
<PAGE>
Purchaser, and neither party shall have any further liability to the other,
except for those covenants and obligations hereunder which expressly survive
the termination of this Agreement. In the event Purchaser fails to deliver
such notice to Seller or Purchaser fails to deliver the Application Evidence on
or before October 7, 1996, the Financing Contingency shall be deemed satisfied
and the parties hereto shall proceed to Closing."
3. Except as amended hereby, the Agreement shall be and remain unchanged and
in full force and effect in accordance with its terms.
4. This Amendment may be executed in counterparts each of which shall be
deemed an original, but all of which, when taken together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first set forth above.
PURCHASER:
HOUSING SYSTEMS, INCORPORATED, a Georgia corporation
By: /s/ Russell A. Greer
--------------------------------------
Name: Russell A. Greer
--------------------------------------
Its: Executive VP
--------------------------------------
SELLER:
PNT PARTNERS LIMITED PARTNERSHIP, an Illinois limited
partnership
By: PNT Partners, Inc., an Illinois corporation, its
general partner
By: /s/ James E. Mendelson
---------------------------------------
Name: James E. Mendelson
---------------------------------------
Its: Authorized Rep.
---------------------------------------
<PAGE>
[The Glades Apartments]
AGREEMENT OF SALE
THIS AGREEMENT ("Agreement") is entered into as of the 17th day of
September, 1996, by and between HOUSING SYSTEMS, INCORPORATED, a Georgia
corporation ("Purchaser"), and HEATHER GLEN PARTNERS LIMITED PARTNERSHIP, an
Illinois limited partnership ("Seller").
WITNESSETH:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to
sell at the price of Six Million Five Hundred Thousand and No/100 Dollars
($6,500,000.00), the following:
a. those certain tracts or parcels of land located in Pinellas
County, Florida, more particularly described on Exhibit A attached hereto
("Land");
b. the 304 unit apartment complex, commonly known as The Glades
Apartments, which contains related improvements, facilities, amenities,
structures, driveways, walkways, plumbing and heating pipes, culverts, and
mains ("Improvements");
c. all right, title and interest of Seller in and to any alleys,
strips or gores adjoining the Land, and any easements, rights-of-way or other
interests in, on, under or to, any land, highway, street, road, right-of-way or
avenue, open or proposed, in, on, under, across, in front of, abutting or
adjoining the Land, and all right, title and interest of Seller in and to any
awards for damage thereto by reason of a change of grade thereof;
d. the accessions, appurtenant rights, privileges, appurtenances
and all the estate and rights of Seller in and to the Land and the
Improvements, as applicable, or otherwise appertaining to any of the property
described in the immediately preceding clauses (a), (b) and (c);
e. the fixtures, equipment and other personal property listed on
Exhibit B attached hereto and all other fixtures, machinery, supplies,
equipment, computer hardware and, except for computer software, the other
personal property owned by Seller and located on or in or used solely in
connection with the Land and Improvements (collectively, the "Personal
Property"); and
f. all of Seller's interest in any intangible property now or
hereafter owned by Seller and used solely in connection with its Land,
Improvements and Personal Property, including without limitation the right to
use any trade style or name now used in connection with the same, any contract
rights, escrow or security deposits, utility agreements or other rights related
to the ownership of or use and operation of the Property, as hereinafter
defined.
All of the items described in subparagraphs (a), (b), (c), (d), (e) and
(f) above are referred to as the "Property".
<PAGE>
2. PURCHASE PRICE. The purchase price ("Purchase Price") shall be paid
as follows:
a. Upon the execution of this Agreement, Fifty Thousand and No/100
Dollars ($50,000.00) ("Earnest Money") to be held in escrow by the Escrow Agent
(as that term is defined in the "Escrow Agreement" [as hereinafter defined]) by
and in accordance with the provisions of the Escrow Agreement ("Escrow
Agreement") attached hereto as Exhibit C;
b. On the "Closing Date" (as hereinafter defined), the balance of
the Purchase Price adjusted in accordance with the prorations by federally
wired "immediately available" funds delivered to the "Title Insurer" (as
hereinafter defined) no later than 12:00 Noon Central time on the Closing Date
(as hereinafter defined). If the funds are not received by 12:00 Noon Central
time, then, on the Closing Date, Purchaser shall pay Seller an amount equal to
any additional mortgage per diem interest costs incurred by Seller.
c. The parties agree the Purchase Price shall be allocated among
the various components of the Property in a manner to be reasonably agreed upon
by the parties prior to September 23, 1996.
3. TITLE COMMITMENT AND SURVEY.
a. Purchaser has received a survey of the Property prepared by
George F. Young, Inc. dated March 20, 1992 (the "Existing Survey"). Seller and
Purchaser shall each pay for one-half of the costs of updating the Existing
Survey and Seller shall deliver the updated survey (the "Updated Survey") to
Purchaser within 21 days after the date hereof.
b. Attached hereto as Exhibit D is a copy of a title commitment for
an owner's standard title insurance policy issued by Charter Title Company Fort
Bend, on behalf of Lawyers Title Insurance Company (hereinafter referred to as
"Title Insurer") dated June 17, 1996 for the Property (the "Title Commitment").
c. If the Title Commitment or the Existing Survey discloses any
exceptions to title objectionable to Purchaser, Purchaser may give written
notice to Seller (the "Title Notice") of Purchaser's disapproval of any such
exceptions (an "Unpermitted Exception") on or before September 18, 1996. Any
title exceptions which are set forth in the Title Commitment or on the Existing
Survey to which Purchaser does not object in accordance with the immediately
preceding sentence shall be deemed "Permitted Exceptions". With regard to an
Unpermitted Exception for which Purchaser gives Seller a Title Notice, Seller
may but shall not have the obligation to notify Purchaser (the "Response
Notice") within three (3) business days of receipt of the Title Notice whether
Seller shall bond over, cure or cause the Title Insurer to remove such
Unpermitted Exception from the Title Commitment. Any such Unpermitted
Exception which Seller elects to bond over, cure or cause the Title Insurer to
remove shall be additional Permitted Exceptions. If Seller does not so notify
Purchaser, with respect to any Unpermitted Exception, Purchaser may either
waive its objection and proceed towards closing or terminate this Agreement by
giving written notice to Seller of its election within three (3) additional
business days of the earlier to occur of (a) receipt by Purchaser of the
<PAGE>
Response Notice and (b) expiration of the three (3) business day period in
which Seller may deliver the Response Notice. If Purchaser does not give such
written notice within such three (3) additional business days, (i) Purchaser
shall have waived its right to terminate this Agreement pursuant to this
Paragraph 3c; (ii) such Unpermitted Exception shall be deemed an additional
Permitted Exception; and (iii) the parties shall proceed to Closing. If
Purchaser terminates this Agreement by written notice to Seller within such
three (3) additional business days: (i) Purchaser shall promptly deliver to
Seller copies of all studies, reports and other investigations obtained by
Purchaser in connection with its due diligence of the Property, (ii) the
Earnest Money deposited by Purchaser shall be immediately paid to Purchaser,
together with any interest earned thereon and (iii) neither Purchaser nor
Seller shall have any right, obligation or liability under this Agreement,
except for Purchaser's obligation to indemnify Seller and restore the Property,
as more fully set forth in Paragraph 17.
d. The Title Commitment and the Existing Survey shall be conclusive
evidence of good title as therein shown as to all matters to be insured by the
title policy, subject only to the exceptions therein stated. On the Closing
Date, "Purchaser's Title Insurer" (as hereinafter defined) shall deliver to
Purchaser a ALTA 1992 Form Title Policy in conformance with the "Purchaser's
Title Commitment" (as hereinafter defined), subject to only the Permitted
Exceptions and Unpermitted Exceptions waived by Purchaser (the "Title Policy").
Seller and Purchaser shall equally share the costs of the Title Commitment, the
Purchaser's Title Commitment, and the Title Policy and the cost of deletion of
the survey exception, if required by Purchaser. Purchaser shall pay the cost
of any endorsements to, and the extended coverage on, the Title Policy.
e. The obligation of Purchaser to pay various costs set forth in
Paragraphs 3a and 3d shall survive the termination of this Agreement.
4. CONDITION OF TITLE/CONVEYANCE. Seller agrees to convey fee simple
title to the Property by Special Warranty Deed ("Deed") in recordable form
subject only to the Permitted Exceptions and Unpermitted Exceptions waived by
Purchaser. If, prior to "Closing" (as hereinafter defined), the title
commitment ("Purchaser's Title Commitment") ordered by Purchaser from First
American Title Insurance Company ("Purchaser's Title Insurer"), a date-down to
the Title Commitment or the Updated Survey discloses any new Unpermitted
Exception, Seller shall have thirty (30) days from the date of Seller's receipt
of the Purchaser's Title Commitment, the date of the date-down to the
Purchaser's Title Commitment or the date of the Updated Survey, as applicable,
at Seller's expense, to (i) bond over, cure and/or have any Unpermitted
Exceptions which, in the aggregate, do not exceed $25,000.00, removed from the
Purchaser's Title Commitment or to have the Purchaser's Title Insurer commit to
insure against loss or damage that may be occasioned by such Unpermitted
Exceptions, or (ii) have the right, but not the obligation, to bond over, cure
and/or have any Unpermitted Exceptions which, in the aggregate, equal or exceed
$25,000.00, removed from the Purchaser's Title Commitment or to have the
Purchaser's Title Insurer commit to insure against loss or damage that may be
occasioned by such Unpermitted Exceptions. In such event, the time of Closing
(as hereinafter defined) shall be delayed, if necessary, to give effect to said
aforementioned time periods. If Seller fails to cure or have said Unpermitted
<PAGE>
Exception removed or have the Purchaser's Title Insurer commit to insure as
specified above within said thirty (30) day period or if Seller elects not to
exercise its rights under (ii) in the immediately preceding sentence, Purchaser
may terminate this Agreement upon notice to Seller within five (5) business
days after the expiration of said thirty (30) day period. Absent notice from
Purchaser to Seller in accordance with the immediately preceding sentence,
Purchaser shall be deemed to have elected to take title subject to said
Unpermitted Exception. If Purchaser terminates this Agreement in accordance
with the terms of this Paragraph 4, this Agreement shall become null and void
without further action of the parties and all Earnest Money theretofore
deposited into the escrow by Purchaser together with any interest accrued
thereon, shall be returned to Purchaser, and neither party shall have any
further liability to the other, except for Purchaser's obligation to indemnify
Seller and restore the Property, as more fully set forth in Paragraph 17.
5. PAYMENT OF CLOSING COSTS. Purchaser and Seller shall equally share
the costs of the documentary stamps (if any) to be paid with reference to the
Deed and all other stamps, intangible, documentary, recording, sales tax and
surtax imposed by law with reference to any other documents delivered in
connection with this Agreement.
6. DAMAGE, CASUALTY AND CONDEMNATION.
a. Until the Closing Date, Seller shall maintain its present
insurance on the Property. If the Property suffers damage as a result of any
casualty prior to the Closing Date and can be repaired or restored in the case
of real property for $100,000 or less, or in the case of Personal Property, for
$10,000 or less, then Seller shall repair such damage in an expeditious manner
and the Closing shall be extended until the repairs are complete to Purchaser's
reasonable satisfaction. Seller shall retain all insurance proceeds. If the
cost of repair and restoration exceeds those amounts, then Purchaser can elect
to either: (a) proceed with the purchase of the Property and in such event,
unless Seller shall have restored the Property prior to the Closing Date,
Seller shall pay over or assign to Purchaser all amounts received or due (and
Purchaser shall receive a credit against the cash due at Closing in an amount
equal to any deductible under any insurance policy covering the damaged
Property) from, and all claims against, any insurance company as a result of
such damage; or (b) terminate this Agreement upon notice to Seller served
within twenty (20) business days of such casualty.
b. If condemnation proceedings ("Proceedings") have been instituted
against the Property which might result in the taking of any part of the
Property which shall (i) materially impair access to the Property; (ii) cause
any material non-compliance with any applicable law, ordinance, rule or
regulation of any federal, state or local authority or governmental agencies
having jurisdiction over the Property or any portion thereof; or (iii)
materially and adversely impair the use of the Property as it is currently
being operated, then Purchaser can elect to either take the Property subject to
the Proceedings and an assignment of Seller's interest in the Proceedings or
terminate this Agreement. If Purchaser elects to terminate this Agreement, it
shall be by notice to Seller within ten (10) days after Purchaser has received
notice of the Proceedings.
<PAGE>
c. If this Agreement is terminated pursuant to this Paragraph, then
all Earnest Money plus the interest accrued thereon shall be returned to
Purchaser and, subject to the survival provisions of Paragraph 17 herein,
neither party shall have any further liability hereunder.
7. AS-IS CONDITION.
a. Purchaser acknowledges and agrees that it will be purchasing the
Property based solely upon its inspection and investigations of the Property
and that Purchaser will be purchasing the Property "AS IS" and "WITH ALL
FAULTS" based upon the condition of the Property as of the date of this
Agreement subject to reasonable wear and tear and loss by fire or other
casualty or condemnation and, subject to the provisions of Paragraph 6 above,
from the date of this Agreement until the Closing Date. Without limiting the
foregoing, Purchaser acknowledges that, except as may otherwise be specifically
set forth elsewhere in this Agreement, neither Seller nor their consultants nor
agents have made any other representations or warranties of any kind upon which
Purchaser is relying as to any matters concerning the Property, including, but
not limited to, the condition of the Land or Improvements, the presence or
absence of asbestos, toxic waste or any Hazardous Materials (as hereinafter
defined) or Hazardous Substances (as hereinafter defined), the tenants of the
Property or the leases affecting the Property, economic projections or market
studies concerning the Property, any development rights, taxes, bonds,
covenants, conditions and restrictions affecting the Property, water or water
rights, topography, drainage, soil, subsoil of the Property, the utilities
serving the Property or any zoning, environmental or building laws, rules or
regulations affecting the Property. Seller makes no representation that the
Property complies with Title III of the Americans With Disabilities Act or any
fire codes or building codes. Purchaser hereby releases Seller from any and
all liability in connection with any claims which Purchaser may have against
Seller, and Purchaser hereby agrees not to assert any claims, for contribution,
cost recovery or otherwise, against Seller, relating directly or indirectly to
the existence of asbestos or Hazardous Materials or Hazardous Substances on, or
environmental conditions of, the Property. As used herein, the term "Hazardous
Materials" or "Hazardous Substances" means (i) hazardous wastes, hazardous
substances, hazardous constituents, toxic substances or related materials,
whether solids, liquids or gases, including but not limited to substances
defined as "hazardous wastes," "hazardous substances," "toxic substances,"
"pollutants," "contaminants," "radioactive materials," or other similar
designations in, or otherwise subject to regulation under, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), 42 U.S.C. Section 9601 et seq.; the Toxic Substance Control Act
("TSCA"), 15 U.S.C. Section 2601 et seq.; the Hazardous Materials
Transportation Act 49 U.S.C. Section 1802; the Resource Conservation and
Recovery Act ("RCRA"), 42 U.S.C. Section 9601, et seq.; the Clean Water Act
("CWA"), 33 U.S.C. Section 1251 et seq.; the Safe Drinking Water Act, 42 U.S.C.
Section 300f et seq.; the Clean Air Act ("CAA"), 42 U.S.C. Section 7401 et
seq.; and in any permits, licenses, approvals, plans, rules, regulations or
ordinances adopted, or other criteria and guidelines promulgated pursuant to
the preceding laws or other similar federal, state or local laws, regulations,
rules or ordinance now or hereafter in effect relating to environmental matters
(collectively, the "Environmental Laws"); and (ii) any other substances,
<PAGE>
constituents or wastes subject to any applicable federal, state or local law,
regulation or ordinance, including any Environmental Law, now or hereafter in
effect, including but not limited to (A) petroleum, (B) refined petroleum
products, (C) waste oil, (D) waste aviation or motor fuel and (E) asbestos.
b. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller has owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Seller makes no representation or
warranty that such material is complete or accurate or that Purchaser will
achieve similar financial or other results with respect to the operations of
the Property, it being acknowledged by Purchaser that Seller's operation of the
Property and allocations of revenues or expenses may be vastly different than
Purchaser may be able to attain. Purchaser acknowledges that it is a
sophisticated and experienced purchaser of real estate and further that
Purchaser has relied upon its own investigation and inquiry with respect to the
operation of the Property and releases Seller from any liability with respect
to such historical information.
c. Seller has provided to Purchaser the following existing report:
Phase I Environmental Site Assessment, dated May 2, 1996 prepared by EMG
("Existing Report"). Seller makes no representation or warranty concerning the
accuracy or completeness of the Existing Report. Purchaser hereby releases
Seller and the Affiliates of Seller from any liability whatsoever with respect
to the Existing Report, including, without limitation, the matters set forth in
the Existing Report, and the accuracy and/or completeness of the Existing
Report. Furthermore, Purchaser acknowledges that it will be purchasing the
Property with all faults disclosed in the Existing Report. Notwithstanding
anything contained herein to the contrary, the terms of this Paragraph 7.c.
shall survive the Closing and the delivery of the Deed and termination of this
Agreement.
8. FINANCING CONTINGENCY. Purchaser's and Seller's obligations under
this Agreement are contingent upon Purchaser's ability to procure a commitment
for first mortgage financing for the acquisition of the Property in an amount
of not less than $4,875,000.00 with a 9.5% per annum constant interest rate and
20 year amortization (the "Financing Contingency") on or before September 23,
1996. Purchaser acknowledges and agrees that it shall submit its application
for a commitment for first mortgage financing in accordance with the provisions
set forth above within ten (10) business days from the date hereof, and shall
provide Seller with either a letter from the lender evidencing that said
application and any application fee has been received or an affidavit from
Purchaser stating that Purchaser submitted said application and paid any
application fee within ten (10) business days from the date hereof. In the
event Purchaser has complied with the requirements set forth in the preceding
sentence, but is unable to satisfy the Financing Contingency on or before
September 23, 1996, then Purchaser shall have the option, upon written notice
to Seller, exercised no later than September 23, 1996, to terminate this
Agreement, in which case this Agreement shall become null and void without
further action of the parties and all Earnest Money theretofore deposited into
<PAGE>
the escrow by Purchaser together with any interest accrued thereon, shall be
delivered to Purchaser, and neither party shall have any further liability to
the other, except for those covenants and obligations hereunder which expressly
survive the termination of this Agreement. In the event Purchaser fails to
deliver such notice to Seller, the Financing Contingency shall be deemed
satisfied and the parties hereto shall proceed to Closing.
9. CLOSING. The closing of this transaction ("Closing") shall be on
October 31, 1996 ("Closing Date"), at the office of Purchaser's counsel,
Atlanta, Georgia, at which time Seller shall deliver possession of the Property
to Purchaser. In the event that all required funds and documents have been
delivered to Escrow Agent or exchanged by the parties, the parties agree that
the Closing may be conducted by Escrow Agent without the parties or counsel
present.
10. CLOSING DOCUMENTS.
a. On the Closing Date, Purchaser shall deliver to Seller an
executed closing statement, the balance of the Purchase Price, an assumption of
the Assignment and Assumption of Intangibles (as hereinafter defined), an
assumption of the Assignment and Assumption of Leases (as hereinafter defined),
and such other documents as may be reasonably required in order to consummate
the transaction as set forth in this Agreement.
b. On the Closing Date, Seller shall deliver, or cause to be
delivered, the following to Purchaser: possession of the Property; the executed
Deed (in the form of Exhibit F attached hereto) subject to the Permitted
Exceptions; the Title Policy (or "marked-up commitments"); terminations of any
management agreements affecting the Property; an inventory of the Personal
Property for the Property and a Bill of Sale for the same (in the form of
Exhibit G attached hereto); executed closing statements; executed assignment
and assumption of all service contracts, warranties and intangibles (in the
form of Exhibit H attached hereto, the "Assignment and Assumption of
Intangibles"); executed copies of all warranties, guarantees, maintenance,
supply, repair and service contracts, which affect the Property and which are
in Seller's possession or at the Property, to be delivered at the Property;
executed assignment and assumption of all leases and security deposits (in the
form of Exhibit I attached hereto, the "Assignment and Assumption of Leases");
the original executed leases which shall be delivered at the Property; updated
Rent Roll (as hereinafter defined); notice to the tenants of the Property of
the transfer of title and the assumption by Purchaser of the landlord's
obligations under the leases and the obligation to refund the security deposits
(in the form of Exhibit J attached hereto); non-foreign affidavit (in the form
of Exhibit K attached hereto); bringdown certificate re: representations and
warranties (in the form of Exhibit L attached hereto); certificates of
occupancy for each apartment unit (or building, as applicable) that are in
Seller's possession or at the Property, if any; plans and specifications, if
any, in Seller's possession; and such other documents as may be reasonably
required by the Purchaser's Title Insurer in order to consummate the
transaction as set forth in this Agreement.
<PAGE>
11. DEFAULT BY PURCHASER. ALL EARNEST MONEY DEPOSITED INTO THE ESCROW IS
TO SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND
UNDERTAKINGS UNDER THIS AGREEMENT. IN THE EVENT OF ANY DEFAULT OF PURCHASER
UNDER THE PROVISIONS OF THIS AGREEMENT, SELLER SHALL RETAIN ALL OF THE EARNEST
MONEY AND THE INTEREST THEREON AS SELLER'S SOLE RIGHT TO DAMAGES OR ANY OTHER
REMEDY. THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES, IN THE EVENT OF
A DEFAULT BY PURCHASER, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICAL TO
DETERMINE. THEREFORE, BY PLACING THEIR INITIALS BELOW, THE PARTIES ACKNOWLEDGE
THAT THE EARNEST MONEY HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES'
REASONABLE ESTIMATE OF SELLER'S DAMAGES.
12. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF ANY
SELLER'S DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF ALL EARNEST
MONEY TOGETHER WITH ANY INTEREST ACCRUED THEREON, AND, SUBJECT TO THE SURVIVAL
PROVISIONS OF PARAGRAPH 17 HEREIN, THIS AGREEMENT SHALL TERMINATE AND THE
PARTIES SHALL HAVE NO FURTHER LIABILITY TO EACH OTHER AT LAW OR IN EQUITY.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF A SELLER'S
DEFAULT IS DUE TO ITS REFUSAL TO DELIVER THE DEED, THEN PURCHASER WILL BE
ENTITLED TO SUE FOR SPECIFIC PERFORMANCE.
13. a. PRORATIONS. Rent (exclusive of delinquent rents, but including
prepaid rents); refundable security deposits (which will be assigned to and
assumed by Purchaser and credited to Purchaser at Closing); water and other
utility charges; fuels; prepaid operating expenses for the month in which the
Closing occurs and for future months; real and personal property taxes; and
other similar items shall be adjusted ratably as of 11:59 p.m. on the Closing
Date ("Proration Date"), and credited to the balance of the cash due at
Closing. If for any reason the Proration Date is earlier than the Closing
Date, then for the period from the Proration Date through the Closing Date,
Purchaser shall be entitled to the benefit of all of the income from the
Property and shall bear the burden of all of the operating expenses of the
Property, including, but not limited to, insurance, service contracts, employee
wages and benefits, management fees, utility costs and interest on the existing
mortgages encumbering a Property (if any). If the amount of any of the items
to be prorated is not then ascertainable, the adjustment thereof shall be on
the basis of the most recent ascertainable data. All prorations will be final
except as to delinquent rents referred to in 13b below.
b. DELINQUENT RENTS. If, as of the Closing Date, any rent is in
arrears for thirty (30) days or less, then the first rent collected for the
Property by Purchaser shall be applied to the month in which Closing occurred
and disbursed pro-rata to Purchaser and Seller. If rent is in arrears for a
Property for more than thirty (30) days, then rents collected for the Property
by Purchaser shall be applied first to current rent and then to delinquent
rent. Any amounts received by one party and payable to the other party
pursuant hereto shall be paid within 10 days of receipt of such amounts. This
subparagraph of this Agreement shall survive the Closing and the delivery and
recording of the Deed.
14. RECORDING. This Agreement shall not be recorded and the act of
recording by Purchaser shall be an act of default hereunder by Purchaser and
shall be subject to the provisions of Paragraph 11.
<PAGE>
15. ASSIGNMENT. Purchaser shall not have the right to assign its
interest in this Agreement without the prior written consent of Seller. Any
assignment or transfer of, or attempt to assign or transfer, Purchaser's
interest in this Agreement shall be an act of default hereunder by Purchaser.
Notwithstanding the foregoing, Purchaser may assign its interest in this
Agreement without the consent of Seller to any entity in which Purchaser is a
partner or shareholder provided that Purchaser remains liable for and the
assignee assumes the obligations of Purchaser hereunder. If any assignee of
Purchaser ("Assignee") under this Agreement petitions or applies for relief in
bankruptcy or Assignee is adjudicated as a bankrupt or insolvent, or Assignee
files any petition, application for relief or answer-seeking or acquiescing in
any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief for itself under any present or future federal,
state or other statute, law, code or regulation relating to bankruptcy,
insolvency, or other relief for debtors (collectively, a "Bankruptcy Filing")
on or before the Closing Date, said Bankruptcy Filing shall be a default under
this Agreement and Purchaser shall indemnify Seller for all costs, attorney's
fees and expenses of Seller resulting from Seller's efforts to obtain the
Earnest Money as liquidated damages and to clear title to the Property from any
encumbrance resulting from the Bankruptcy Filing.
16. BROKER. The parties hereto acknowledge that Cushman and Wakefield
(the "Broker") is the only real estate broker involved in this transaction.
Seller agrees to pay the Broker a commission or fee ("Fee") pursuant to a
listing agreement between Seller and Broker. In all events, Purchaser shall
have no obligation to pay any portion of the Fee. However, this Fee is due and
payable only from the proceeds of the Purchase Price received by Seller. The
foregoing does not apply to any fee which may be paid by Seller to any
affiliate of Seller as a result of this transaction. Purchaser agrees to
indemnify, defend and hold harmless Seller and any partner, affiliate, parent
of Seller, and all shareholders, employees, officers and directors of Seller or
Seller's partners, parents or affiliates (each of the above is individually
referred to as a "Seller Indemnitee") from all claims, including attorneys'
fees and costs incurred by a Seller Indemnitee as a result of anyone's claiming
by or through Purchaser any fee, commission or compensation on account of this
Agreement, its negotiation or the sale hereby contemplated. Purchaser does now
and shall at all times consent to a Seller Indemnitee's selection of defense
counsel. Each Seller agrees to indemnify, defend and hold harmless Purchaser
and all shareholders, employees, officers and directors of Purchaser or
Purchaser's parent or affiliate (each of the above is individually referred to
as a "Purchaser Indemnitee") from all claims, including attorneys' fees and
costs incurred by a Purchaser Indemnitee as a result of anyone's claiming by or
through a Seller any fee, commission or compensation on account of this
Agreement its negotiation or the sale hereby contemplated. Seller does now and
shall at all times consent to a Purchaser Indemnitee's selection of defense
counsel. The provisions of this Paragraph will survive the Closing and
delivery of the Deed.
17. DOCUMENTS AND INSPECTION OF PROPERTY
a. Seller has delivered to Purchaser copies of the most recent
available tax bills, rent rolls, insurance premiums, service contracts, utility
account numbers, year-end 1995 and year-to-date 1996 operating statements
<PAGE>
(collectively the "Documents"). Purchaser has had the right to inspect and
approve the condition of the Property and conduct such tests and studies as
Purchaser deemed appropriate and to evaluate the physical condition of the
Property and to conduct such evaluation as it deemed appropriate to determine
whether its operation and purchase would be economically feasible including the
interior of the apartments, during normal business hours. Purchaser
acknowledges that it has completed its inspection of the Property and has
approved the condition of the Property. Purchaser shall maintain public
liability insurance policies insuring against claims arising as a result of the
inspections of the Property conducted by Purchaser. Purchaser agrees to
indemnify, defend, protect and hold Seller harmless from any and all loss,
costs, including attorneys' fees, liability or damages which Seller may incur
or suffer as a result of Purchaser's inspection and investigation of the
Property including the entry of Purchaser, its employees or agents and its
Lender onto the Property, including without limitation, liability for
mechanics' lien claims.
b. Purchaser agrees to defend and hold Seller harmless from any
injuries, damages or claims of any nature whatsoever which Purchaser's
servants, agents or employees may have as a result of Purchaser's inspection of
the Property. Purchaser further agrees to restore any damage to the Property
which may arise or has arisen as a result of Purchaser's inspection of the
Property.
c. Purchaser's obligations to indemnify, defend and hold Seller
harmless under the provisions of this Paragraph 17 shall survive the
termination of this Agreement or the Closing and the delivery and recording of
the Deed.
18. SELLER'S OBLIGATIONS PRIOR TO CLOSING. Seller covenants that between
the date of this Agreement and the Closing Date:
a. Seller shall not, without Purchaser's prior written consent (i)
enter into any lease for an apartment unit with a first-time tenant unless the
lease is for a period of no more than one year and the rent shall be not less
than the amount currently being charged for similar apartment units; nor (ii)
enter into, amend, renew or extend any lease for an apartment unit with an
existing tenant unless the lease is for a period of not more than one year and
the rent for the amended, renewal or extension term shall not be less than the
rent currently paid by such tenant; nor (iii) terminate any lease except by
reason of a default by the tenant thereunder or by reason of the provisions
contained in the lease.
b. Seller shall not modify nor amend any Service Contract (as
hereinafter defined) nor enter into any new service contract for the Property
without the prior written consent of Purchaser, which consent shall not be
unreasonably withheld or delayed provided no such consent shall be necessary if
the same is terminable without penalty by the then owner of the Property upon
not more than thirty (30) days' notice.
c. No personal property included as part of the Property shall be
removed from the Property unless the same is replaced with similar items of at
least equal quality prior to the Closing excluding, however, computer software,
maintenance supplies and other items that may be depleted in the ordinary
course of Seller's business.
<PAGE>
d. Seller shall not withdraw, settle or otherwise compromise any
protest or reduction proceeding affecting real estate taxes assessed against
the Property for any fiscal period in which the Closing is to occur or any
subsequent fiscal period without the prior written consent of Purchaser. Real
estate tax refunds and credits received after the Closing which are
attributable to the fiscal tax year during which the Closing occurs shall be
apportioned between Seller and Purchaser, after deducting the expenses of
collection thereof, based upon the relative time periods each owns the
Property, which obligation shall survive the Closing.
e. Seller shall allow Purchaser or Purchaser's representatives
access to the Property, the leases and other documents required to be delivered
under this Agreement upon reasonable prior notice, during Seller's regular
business hours, and provided same shall not unreasonably interfere with
Seller's ordinary course of business.
f. Whenever Purchaser's or Seller's consent is required, Purchaser
or Seller shall not unreasonably withhold its consent or unreasonably delay in
giving its consent. If Purchaser or Seller fails to respond to a written
request within three (3) business days after receipt of the request, then
Purchaser or Seller, as the case may be, shall be deemed to have given its
consent.
19. SELLER'S REPRESENTATIONS AND WARRANTIES AND LIABILITY.
a. Any reference herein to Seller's knowledge, representation,
warranty or notice of any matter or thing, shall only mean such knowledge or
notice that has actually been received by Mark Saturno. Any representation or
warranty of Seller is based upon those matters of which Mark Saturno has actual
knowledge after having made inquiry by delivering a copy of the representations
enumerated in this Section 19 to the resident manager of the Property. Any
knowledge or notice given, had or received by any of Seller's agents, servants
or employees shall not be imputed to Seller or the individual partners or the
general partner of Seller.
b. Subject to the limitations set forth in subparagraph a. above,
Seller hereby makes the following representations and warranties, all of which
are made to Seller's knowledge, which shall survive the Closing and delivery of
the Deed for a period of ninety (90) days (i.e., the claiming party shall have
no right to make any claims against the other party for a breach of
representation or warranty after the expiration of ninety (90) days immediately
following Closing):
i. The present use and occupancy of the Property conforms with
applicable building and zoning laws and Seller has not received any written
notice that any such laws, rules or regulations are being violated.
ii. The rent roll ("Rent Roll") attached hereto as Exhibit M
which will be updated as of the Closing Date is true and accurate as of the
date thereon.
iii. Seller has no knowledge of any pending or threatened
litigation, claim, cause of action or administrative proceeding concerning the
Property, except as disclosed on Exhibit N attached hereto.
<PAGE>
iv. As of the date of the Agreement, there are no leases,
subleases, licenses or other rental agreements or occupancy agreements (written
or verbal) which grant any possessory interest in and to any space situated on
or in the Improvements or that otherwise give rights with regard to use of the
Improvements other than the leases ("Leases") described in the Rent Roll. The
Rent Roll is true, accurate and complete as of the date hereof. Except as
otherwise specifically set forth in the Rent Roll or elsewhere in this
Agreement or attached to the Leases:
(1) the Leases are in full force and effect and, except as set
forth on the Rent Roll or the lease files at the Property, none of them has
been modified, amended or extended;
(2) no tenant, or any other person, entity or association has
an option to purchase, right of first refusal, right of first offer or other
similar non-leasing right in respect of all or any unit in the Property;
(3) no leasing commission shall be due for any period
subsequent to the Closing Date other than for tenants who have executed a lease
prior to Closing but do not move in until after the Closing Date, which
commissions shall be paid by Purchaser and shall be no more than a total of
$60.00 per lease for new leases and $750.00 per quarter for renewal leases for
all employees of the property manager;
(4) except as set forth on the Rent Roll, no tenant is entitled
to rental concessions or abatements for any period subsequent to the Closing
Date;
(5) Seller has neither sent written notice to any tenant of the
Property, nor received any written notice from any such tenant, claiming that
such tenant, or Seller, as the case may be, is in default, which default
remains uncured other than as shown on the Rent Roll attached hereto;
(6) no action or proceeding instituted against Seller by any
tenant of any unit in the Property is presently pending;
(7) there are no security deposits or other deposits other than
those set forth in the Rent Roll;
(8) no rent has been paid more than thirty (30) days in advance
under any lease of any unit in the Property other than as shown on the Rent
Roll;
v. The apartment units in the Improvements are not subject to, nor
does Seller receive the benefit of, any rent subsidies or rental assistance
programs. No apartment unit is subject to any rent control law, ordinance or
regulation.
vi. Exhibit O attached hereto lists all services, maintenance, and
supply contracts (collectively, "Service Contracts") affecting the
construction, use, ownership, maintenance and/or operation of the Property, and
the information set forth therein is accurate and complete.
<PAGE>
vii. Seller has full power to execute, deliver and carry out the
terms and provisions of this Agreement and has taken all necessary action to
authorize the execution, delivery and performance of this Agreement, and this
Agreement constitutes the legal, valid and binding obligation of Seller,
enforceable in accordance with its terms. No order, permission, consent,
approval license, authorization, registration or validation of, or filing with,
or exemption by, any governmental agency, commission, board or public authority
is required to authorize, or is required in connection with, the execution,
delivery and performance of this Agreement by Seller or the taking by Seller of
any action contemplated by this Agreement.
viii. Seller has not received written notice:
(1) from any federal, state, county or municipal authority
alleging any fire, health, safety, building, pollution, environmental, zoning
or other violation of law in respect of the Property or any part hereof, which
has not been entirely corrected; or
(2) concerning any special taxes or assessments levied or to be
levied against the Property or any part thereof; or
(3) from any insurance company or bonding company of any
defects or inadequacies in the Property or any part thereof, which would
adversely affect the insurability of the same or cause the imposition of
extraordinary premiums or charges therefor or of any termination or threatened
termination of any policy of insurance or bond; or
(4) concerning any change in the zoning classification of the
Property or any part thereof.
If any such notice is received prior to the Closing, Seller shall promptly
notify Purchaser thereof and comply with any requirements of such notice prior
to the Closing.
ix. No assessments for public improvements have been made against
the Property which are unpaid, including, without limitation, those of
construction of sewer and water lines, streets, sidewalks and curbs.
x. Seller has not entered into any management contracts, employment
contracts or labor union contracts and has not established any retirement,
pension or profit sharing plans relating to the operation or maintenance of the
Property which shall survive the Closing or for which Purchaser shall have any
liability or obligation.
xi. Seller has not received notice of any proposed plans to widen,
modify, or realign any street or highway or any existing or proposed eminent
domain proceedings which would affect the Property.
xii. There are no pending insolvency proceedings of any nature
presently existing against Seller or the Property.
<PAGE>
Seller hereby agrees to remake the aforesaid representations and
warranties at Closing. If at any time after the execution of this Agreement,
Seller becomes aware of information which makes a representation or warranty
contained in this Agreement to become untrue in any material respect, Seller
shall promptly disclose said information to Purchaser. Provided the
representation or warranty was true when made and further provided that Seller
did not take any deliberate actions to cause the representation or warranty in
question to become untrue in any material respect, Seller shall not be in
default under this Agreement and the sole remedy of Purchaser shall be to
terminate this Agreement. Notwithstanding anything contained herein to the
contrary, if the status of any of the tenancies changes from the date of the
Rent Roll attached hereto and the date of the Rent Roll delivered at Closing,
provided the change in status is not caused by a breach of Seller's covenants
contained herein, then Purchaser shall not have the right to terminate this
Agreement or make any claim for a breach of a representation or warranty
hereunder involving the Rent Roll or tenancies thereunder. Purchaser and
Seller are prohibited from making any claims against the other party hereto
after the Closing with respect to any breaches of the other party's
representations and warranties contained in this Agreement that the claiming
party had actual knowledge of prior to Closing. Notwithstanding anything
contained herein to the contrary, Purchaser hereby agrees that the maximum
aggregate liability of Seller, in connection with, arising out of or in any way
related to a breach by Seller under this Agreement or any document or
conveyance agreement in connection with the transaction set forth herein after
the Closing shall be $50,000.00. Purchaser hereby waives for itself and anyone
who may claim by, through or under Purchaser any and all rights to sue or
recover from Seller any amount greater than said limit.
20. PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser hereby
represents and warrants to Seller that Purchaser has the full right, power and
authority to execute this Agreement and consummate the transactions
contemplated herein.
21. LIMITATION OF LIABILITY. No general or limited partner of Seller or
of Purchaser, nor any of their respective beneficiaries, shareholders,
partners, officers, agents, employees, heirs, successors or assigns shall have
any personal liability of any kind or nature for or by reason of any matter or
thing whatsoever under, in connection with, arising out of or in any way
related to this Agreement and the transactions contemplated herein, and
Purchaser and Seller hereby waive for themselves and anyone who may claim by,
through or under Purchaser or Seller, as the case may be, any and all rights to
sue or recover on account of any such alleged personal liability.
22. ORGANIZATIONAL DOCUMENTS. At least ten (10) days prior to the
Closing Date, the parties will provide the other party's attorney with evidence
of authority to consummate the transactions contemplated hereunder including
copies of its organizational documents, including a certified copy of its
recorded certificate of limited partnership and a true copy of its Partnership
Agreement or a certified copy of its Articles of Incorporation, corporate
resolutions authorizing the transaction, and an incumbency certificate,
whichever is applicable.
<PAGE>
23. MISCELLANEOUS.
a. Seller agrees not to distribute $50,000.00 of the proceeds of
the Purchase Price to its partners for the longer of (i) ninety (90) days after
the Closing and (ii) final resolution of any claims by Purchaser asserted in
writing against Seller prior to the expiration of the ninety (90) days after
the Closing in accordance with the terms of this Agreement ("Claims");
provided, however, that if any Claims are disputed by Seller, Seller shall have
the right, by written notice to Purchaser, to require Purchaser to file suit in
a court of competent jurisdiction within thirty (30) days after such notice to
Purchaser; otherwise said notice with respect to the Claim in question shall no
longer prevent Seller from distributing the proceeds.
b. On the Closing Date, all apartments that were vacated greater
than fifteen (15) days prior to Closing shall be in a "Rent Ready Condition".
Purchaser shall receive a credit against the cash due at Closing in the amount
of $250.00 for each apartment which has been vacant for greater than fifteen
(15) days and which is not in a Rent Ready Condition.
24. TIME OF ESSENCE. Time is of the essence of this Agreement.
25. NOTICES. Any notice or demand which either party hereto is required
or may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by overnight courier
such as Federal Express or by facsimile or made by United States registered or
certified mail addressed as follows:
TO SELLER: c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attn: Ilona Adams
with copies to: The Balcor Company
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attn: Mark Saturno
847/317-4397
847/317-4462 (FAX)
and
Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, Illinois 60661-3693
Attn: Daniel J. Perlman, Esq.
312/902-5532
312/902-1061 (FAX)
<PAGE>
TO PURCHASER: Housing Systems, Incorporated
5505 Interstate North Parkway, N.W.
Atlanta, Georgia 30328-4603
Attn: Russell A. Greer
770/952-2233
770/956-9057 (FAX)
with a copy to: Powell, Goldstein, Frazer & Murphy
The Lenox Building
3399 Peachtree Road, N.E.
Suite 2000
Atlanta, Georgia 30326
Attn: Kenneth H. Harrigan, Esq.
404/365-0456
404/365-0629
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be
deemed to be delivered or made on the next business day if sent by overnight
courier, or on the same day if sent by facsimile before the close of business,
or the next day if sent by facsimile after the close of business, or on the 4th
business day after the same is deposited in the United States Mail as
registered or certified matter, addressed as above provided, with postage
thereon fully prepaid. Any such notice, demand or document not given,
delivered or made by registered or certified mail or by overnight courier or by
facsimile as aforesaid shall be deemed to be given, delivered or made upon
receipt of the same by the party to whom the same is to be given, delivered or
made. Copies of all notices shall be served upon the Escrow Agent.
26. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute
three (3) copies of this Agreement and three (3) copies of the Escrow Agreement
and forward them to Seller for execution, accompanied with the Earnest Money
payable to the Escrow Agent. Seller will forward one (1) copy of the executed
Agreement to Purchaser and will forward the following to the Escrow Agent:
a. Earnest Money;
b. One (1) fully executed copy of this Agreement; and
c. Three (3) copies of the Escrow Agreement signed by the parties
with a direction to execute two (2) copies of the Escrow Agreement and deliver
a fully executed copy to Purchaser and Seller.
27. GOVERNING LAW. The provisions of this Agreement shall be governed by
the laws of the State of Florida.
28. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all other negotiations, understandings and
representations made by and between the parties and the agents, servants and
employees.
<PAGE>
29. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
30. CAPTIONS. Paragraph titles or captions contained herein are inserted
as a matter of convenience and for reference, and in no way define, limit,
extend or describe the scope of this Agreement or any provision hereof.
31. RADON GAS. RADON IS A NATURALLY OCCURRING RADIOACTIVE GAS THAT, WHEN
IT HAS ACCUMULATED IN A BUILDING IN SUFFICIENT QUANTITIES, MAY PRESENT HEALTH
RISKS TO PERSONS WHO ARE EXPOSED TO IT OVER TIME. LEVELS OF RADON THAT EXCEED
FEDERAL AND STATE GUIDELINES HAVE BEEN FOUND IN BUILDINGS IN FLORIDA.
ADDITIONAL INFORMATION REGARDING RADON AND RADON TESTING MAY BE OBTAINED FROM
YOUR COUNTY PUBLIC HEALTH UNIT. THIS PARAGRAPH IS PROVIDED FOR INFORMATIONAL
PURPOSES PURSUANT TO SECTION 404.056(8), FLORIDA STATUTES, (1988).
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date set forth above.
PURCHASER:
HOUSING SYSTEMS, INCORPORATED
By: /s/ Russell A. Greer
------------------------------------
Name: Russell A. Greer
------------------------------------
Title: EVP
------------------------------------
SELLER:
HEATHER GLEN PARTNERS LIMITED PARTNERSHIP, an
Illinois limited partnership
By: Heather Glen Partners, Inc., an Illinois
corporation, its general partner
By: /s/ James E. Mendelson
-------------------------------------
Name: James E. Mendelson
-------------------------------------
Title: Authorized Representative
-------------------------------------
<PAGE>
EXHIBITS
Exhibit A - Legal Description
Exhibit B - Personal Property
Exhibit C - Escrow Agreement
Exhibit D - Title Commitment
Exhibit E - Intentionally Omitted
Exhibit F - Deed
Exhibit G - Bill of Sale
Exhibit H - Assignment and Assumption of Service Contracts, Warranties and
Intangibles
Exhibit I - Assignment and Assumption of Leases and Security Deposits
Exhibit J - Notice to Tenants
Exhibit K - FIRPTA Affidavit
Exhibit L - Bringdown Certificate
Exhibit M - Rent Roll
Exhibit N - Litigation
Exhibit O - Service Contracts
<PAGE>
[TEXT]
FIRST AMENDMENT TO AGREEMENT OF SALE
THIS FIRST AMENDMENT TO AGREEMENT OF SALE (this "Amendment") is made and
entered into as of this 23rd day of September, 1996, by and between Heather
Glen Partners Limited Partnership, an Illinois limited partnership ("Seller")
and Housing Systems, Incorporated, a Georgia corporation ("Purchaser").
RECITALS:
A. Seller and Purchaser are parties to that certain Agreement of Sale,
dated September 17, 1996 ("Agreement"), pursuant to which Purchaser has agreed
to purchase and Seller has agreed to sell certain Property (as defined in the
Agreement) legally described and depicted on Exhibit A attached to the
Agreement.
B. Seller and Purchaser desire to amend the Agreement in accordance with
the terms of this Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. All terms not otherwise defined herein shall have the meanings ascribed to
each in the Agreement.
2. Paragraph 8 of the Agreement is hereby deleted in its entirety and the
following inserted in lieu thereof:
"8. FINANCING CONTINGENCY. Purchaser's and Seller's obligations
under this Agreement are contingent upon Purchaser's ability to procure a
commitment for first mortgage financing for the acquisition of the Property in
an amount of not less than $4,875,000.00 with a 9.5% per annum constant
interest rate and 20 year amortization (the "Financing Contingency") on or
before October 21, 1996. Purchaser acknowledges and agrees that it shall
submit its application for a commitment for first mortgage financing in
accordance with the provisions set forth above on or before October 7, 1996,
and shall provide Seller with either a letter from the lender evidencing that
said application and any application fee has been received or an affidavit from
Purchaser stating that Purchaser submitted said application and paid any
application fee on or before October 7, 1996 ("Application Evidence"). In the
event Purchaser has complied with the requirements set forth in the preceding
sentence, but is unable to satisfy the Financing Contingency on or before
October 21, 1996, then Purchaser shall have the option, upon written notice to
Seller, exercised no later than October 21, 1996, to terminate this Agreement,
in which case this Agreement shall become null and void without further action
of the parties and all Earnest Money theretofore deposited into the escrow by
Purchaser together with any interest accrued thereon, shall be delivered to
<PAGE>
Purchaser, and neither party shall have any further liability to the other,
except for those covenants and obligations hereunder which expressly survive
the termination of this Agreement. In the event Purchaser fails to deliver
such notice to Seller or Purchaser fails to deliver the Application Evidence on
or before October 7, 1996, the Financing Contingency shall be deemed satisfied
and the parties hereto shall proceed to Closing."
3. Except as amended hereby, the Agreement shall be and remain unchanged and
in full force and effect in accordance with its terms.
4. This Amendment may be executed in counterparts each of which shall be
deemed an original, but all of which, when taken together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first set forth above.
PURCHASER:
HOUSING SYSTEMS, INCORPORATED, a Georgia corporation
By: /s/ Russell A. Greer
-------------------------------------
Name: Russell A. Greer
-------------------------------------
Its: Executive VP
-------------------------------------
SELLER:
HEATHER GLEN PARTNERS LIMITED PARTNERSHIP, an Illinois
limited partnership
By: Heather Glen Partners, Inc., an Illinois
corporation, its general partner
By: /s/ James E. Mendelson
---------------------------------------
Name: James E. Mendelson
---------------------------------------
Its: Authorized Rep.
---------------------------------------
<PAGE>
