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 13, 1995
BALCOR EQUITY PROPERTIES-XVIII
A REAL ESTATE LIMITED PARTNERSHIP
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Exact Name of Registrant
Illinois 0-13357
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State or other jurisdiction Commission file number
of organization
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 36-3274349
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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:
(708) 267-1600
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
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In 1984, the Partnership acquired the 101 Marietta Tower office building and
a leasehold interest in 200 parking spaces in the parking garage across the
street (together, the "Property") utilizing $20,595,745 of offering proceeds.
The Property was purchased subject to a first mortgage loan in the amount of
$20,000,000.
On September 13, 1995, the Partnership contracted to sell the Property for a
sale price of $31,750,000 to a non-affiliated third party, Taurus Investment
Group, Inc., a Florida corporation. The purchaser has deposited $250,000
into an escrow account as earnest money and is obligated to deposit an
additional $250,000 on October 13, 1995. The purchaser will acquire the
property subject to the first mortgage loan, which is expected to have an
outstanding principal balance of approximately $18,100,000 at closing,
scheduled to occur on October 30, 1995. From the proceeds of the sale, the
Partnership will pay a brokerage commission of $451,250 to an unaffiliated
third party. The General Partner will be reimbursed by the Partnership for
its actual expenses incurred in connection with the sale.
The closing is subject to the satisfaction of numerous terms and conditions,
including the consent of the first mortgage holder. There can be no
assurance that all of the terms and conditions will be complied with and,
therefore, it is possible that the sale of the Property may not occur.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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(A) FINANCIAL STATEMENTS:
None
(B) PRO FORMA FINANCIAL INFORMATION:
None
(C) EXHIBITS:
(2) Agreement of Sale and attachment there to relating to the
sale of the 101 Marietta Tower office
building.
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 EQUITY PROPERTIES-XVIII
A REAL ESTATE LIMITED PARTNERSHIP
By: Balcor Equity Partners-XVIII,
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: September 28, 1995
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<PAGE>
EXHIBIT 2
AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), entered into as of the 13 day of
September, 1995, (The "Date of this Agreement) by and between TAURUS INVESTMENT
GROUP, INC., a Florida corporation ("Purchaser"), and MARIETTA TOWER PARTNERS,
an Illinois limited partnership ("Seller").
W I T N E S S E T H:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to sell
at the price of Thirty-One Million Seven Hundred Fifty Thousand And No/100
Dollars ($31,750,000.00) (the "Purchase Price"), and on the terms and
conditions hereinafter set forth, the property commonly known as 101 Marietta
Tower, Atlanta, Georgia and Seller's leasehold interest in the garage located
at 79 Marietta Street, Atlanta, Georgia, consisting of the following:
1.1. a fee simple estate in the real property ("Fee Land") and all
buildings and other improvements ("Fee Improvements") situated on the Fee Land,
as more particularly described on Exhibit A-1 attached hereto and made a part
hereof (the Fee Land and the Fee Improvements are sometimes referred to herein
together as the "Fee Property") and a leasehold estate (the "Leasehold Estate")
in the real property ("Leasehold Land") and all buildings and other
improvements ("Leasehold Improvements") situated on the Leasehold Land, as more
particularly described on Exhibit A-2 attached hereto and made a part hereof
(the Leasehold Land and the Leasehold Improvements are sometimes referred to
herein together as the "Leasehold Property" and the Fee Property and the
Leasehold Property are sometimes hereinafter referred to collectively herein as
the "Property") together with all easements and appurtenances thereunto
belonging and all of Seller's right, title and interest in and to all streets,
alleys and public ways adjacent thereto, if any;
1.2. the personal property set forth on Exhibit B attached hereto (the
"Personal Property") and any other personal property owned by Seller and used
in connection with the operation of the Fee Property which is not removed from
the Fee Property prior to 24 hours following the "Closing" (as hereinafter
defined), but in all events excluding the personal property described on
Exhibit B under the heading "Excluded Personal Property";
1.3. the tenant leases described in Exhibit C attached hereto and made a
part hereof together with such other tenant leases of the Property as may be
made prior to the Closing in accordance with the terms of this Agreement (the
"Leases");
<PAGE>
1.4. if and to the extent assignable, if any; (a) all guarantees,
warranties and indemnifications, if any, received from suppliers, contractors,
materialmen or subcontractors arising out of, or in connection with, the
installation, construction or maintenance of the Fee Property including,
without limitation, the right to sue any obligor for any breach of any
covenant, agreement, representation, warranty or guarantee contained therein;
(b) all licenses, permits, certificates of occupancy and franchises issued by
any federal, state, county or municipal authority relating to the use,
maintenance or operation of the Fee Property running to or in favor of Seller;
(c) all trade styles, and trade names, including, without limitation, all
contract rights, brochures, manuals, lists of prospective tenants, advertising
material, books and records, utility contracts and telephone numbers; (d) the
plans and specifications for the Fee Improvements and all unexpired claims and
sureties, if any, received in connection with the construction, improvement or
equipment of the Fee Improvements; and (e) the service and maintenance
contracts which Purchaser elects to assume in accordance with Section 12 of
this Agreement (Exhibit D attached hereto and made a part hereof contains a
list of all of the service contracts which relate to the property, the "Service
Contracts").
1.5. Notwithstanding anything contained in this Agreement to the contrary,
Seller is not conveying or assigning to Purchaser the items described in
Section 16.3 hereof.
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as follows:
2.1. Upon the execution of this Agreement, the sum of Two Hundred Fifty
Thousand and No/100 Dollars ($250,000) (the "Initial Earnest Money") to be held
in escrow by and in accordance with the provisions of the Escrow Agreement
("Escrow Agreement") attached hereto as Exhibit E; and
2.2. Provided Purchaser has not previously terminated this Agreement in
accordance with Section 7 hereof, then on September 15, 1995, the additional
sum of Two Hundred Fifty Thousand and No/100 Dollars ($250,000) (the
"Additional Earnest Money") to be held in escrow by and in accordance with the
provisions of the Escrow Agreement (the Initial Earnest Money and the
Additional Earnest Money [if deposited by Purchaser] are sometimes referred to
herein together as the "Earnest Money"); and
2.3. The assumption by Purchaser of the obligations of Seller, as
borrower, under the "Loan Documents" (as hereinafter defined); and
2.4. On the "Closing Date" (as hereinafter defined) the balance of the
Purchase Price (i.e. $31,750,000 less the then outstanding principal amount of
the loan (the "Loan") described in the Loan Documents inclusive of all Earnest
Money deposited, adjusted in accordance with the prorations, by federally wired
"immediately available" funds, on or before 3:00 p.m Chicago time.
<PAGE>
3. TITLE COMMITMENT AND SURVEY.
3.1. Attached hereto as Exhibit F is a copy of a title commitment for an
owner's standard title insurance policy issued by Charter Title Company as
agent for Chicago Title Insurance Company, (hereinafter referred to as "Title
Insurer") dated June 22, 1995 for the Property (the "Title Commitment"). For
purposes of this Agreement, "Permitted Exceptions" shall mean: (a) the general
printed exceptions contained in the standard title policy to be issued by Title
Insurer based on the Title Commitment; (b) general real estate taxes not yet
due and payable; (c) association assessments, special district taxes and
related charges not yet due and payable, to the extent same are set forth on
the Title Commitment; (d) matters shown on the "Survey" (as hereinafter
defined); (e) matters caused by the actions of Purchaser; (f) all documents
evidencing or securing the Loan, including those set forth on Exhibit G
attached hereto and made a part hereof (all of said documents being referred to
herein as the "Loan Documents"); (g) the "Ground Lease" (as hereinafter
defined); and (g) the title exceptions set forth in Schedule B of the Title
Commitment as Numbers 3(a) through 3(c), inclusive, on Schedule B-1, and 3(a),
3(c), 3(d) and 3(e) through 3(l), inclusive, on Schedule B-2, to the extent
that same effect the Property. All other exceptions to title shall be referred
to as "Unpermitted Exceptions". The Title Commitment shall be conclusive
evidence of good title as therein shown as to all matters to be insured by the
title policy, subject only to the exceptions therein stated. On the Closing
Date, Title Insurer shall deliver to Purchaser a standard title policy in
conformance with the previously delivered Title Commitment, subject only to
Permitted Exceptions and Unpermitted Exceptions waived, in writing, by
Purchaser (the "Title Policy"). Seller and Purchaser shall each pay for
one-half of the costs of the Title Commitment and Title Policy and Purchaser
shall pay for the cost of any endorsements to, or extended coverage on, the
Title Policy.
3.2. Purchaser has received a survey of the Property prepared by Watts &
Browning Engineers, Inc. under Job Number 950225 (the "Survey"). Seller and
Purchaser shall each pay for one-half of the costs of the most recent update to
the Survey. Purchaser hereby acknowledges that all matters disclosed by the
Survey are acceptable to Purchaser.
3.3. The obligation of Purchaser to pay various costs set forth in
Paragraphs 3.1 and 3.2 shall survive the termination of this Agreement.
4. PAYMENT OF CLOSING COSTS.
4.1. In addition to the costs set forth in Paragraphs 3.1 and 3.2,
Purchaser and Seller shall each pay for one-half of the costs of the
documentary or transfer stamps to be paid with reference to the "Deed" (as
hereinafter defined) and/or the "Assignment and Assumption of Ground Lease" (as
hereinafter defined) and all other stamps, intangible, transfer, documentary,
recording, sales tax and surtax imposed by law with reference to any other sale
documents delivered in connection with the sale of the Property to Purchaser
and all other charges of the Title Insurer in connection with this transaction.
In the event Purchaser elects to assume the Loan as provided for in Section 8
hereof, Purchaser agrees to pay for any fees required by the "Lender" (as
hereinafter defined) in connection with such assumption.
<PAGE>
5. CONDITION OF TITLE.
5.1. 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 $100,000.00 or which have arisen by the
affirmative, intentional acts of Seller (such acts being hereinafter referred
to as "Intentional Acts"), 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 $100,000.00 (and which are not Intentional Acts), removed from
the Title Commitment or to have the Title Insurer commit to insure against loss
or damage that may be occasioned by such Unpermitted Exceptions. In such
event, the time of Closing shall be delayed, if necessary, to give effect to
said aforementioned time periods. If Seller fails to cure or have said
Unpermitted Exception removed or have the Title Insurer commit to insure as
specified above within said thirty (30) day period or if Seller elects not to
exercise its rights under (ii) in the preceding sentence, Purchaser may
terminate this Agreement upon notice to Seller within ten (10) days after the
expiration of said thirty (30) day period. Absent notice from Purchaser to
Seller in accordance with the preceding sentence, Purchaser shall be deemed to
have elected to take title subject to said Unpermitted Exception. If Purchaser
terminates this Agreement in accordance with the terms of this Paragraph 5.1,
this Agreement shall become null and void without further action of the parties
and all Earnest Money theretofore deposited into the escrow by Purchaser
together with any interest accrued thereon, shall be returned to Purchaser, and
neither party shall have any further liability to the other, except for: (i)
Purchaser's obligation to indemnify Seller and restore the Property, as more
fully set forth in Paragraph 7; and (ii) for Purchaser's rights as set forth in
Paragraph 15 hereof if the Unpermitted Exceptions do not exceed $100,000 in the
aggregate, or have arisen as a consequence of the Intentional Acts of Seller.
5.2. Seller agrees to convey: (i) fee simple title to the Fee Property to
Purchaser by limited warranty deed (the "Deed") (in the form attached hereto as
Exhibit H) in recordable form subject only to the Permitted Exceptions and any
Unpermitted Exceptions waived, in writing, by Purchaser; and (ii) the Leasehold
Estate to Purchaser by assigning to Purchaser all of Seller's right, title and
interest in the Ground Lease (the "Assignment and Assumption Ground Lease") (in
the form attached hereto as Exhibit I). As used in this Agreement, the term
"Ground Lease" means that certain Lease Agreement dated June 29, 1972 between
The Massell Companies (the "Original Ground Lessor") and Glenn E. Hicks, Jr.
Curtis O. Hicks, David A. Pendley and H. Jack Pendley, Jr. (collectively, the
"Original Ground Lessee"), as amended by Amendment to Lease Agreement dated May
15, 1973 between the Original Ground Lessor and the Original Ground Lessee.
The Original Ground Lessor has assigned its interest in the Ground Lease to
Selig Enterprises, Inc. (the "Ground Lessor"). The Original Ground Lessee
assigned its interest in the Ground Lease to Piedmont-Courtland Associates who
in turn assigned its interest in the Ground Lease to Seller. A copy of the
Ground Lease as amended and assigned as aforesaid is attached hereto as Exhibit
J.
<PAGE>
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
6.1. Except as provided in the indemnity provisions contained in
Paragraph 7.1 of this Agreement, Seller shall bear all risk of loss with
respect to the Property up to the earlier of the dates upon which either
possession or title is transferred to Purchaser in accordance with this
Agreement. Notwithstanding the foregoing, in the event of damage to the Fee
Property by fire or other casualty prior to the Closing Date, repair of which
would cost less than or equal to $100,000.00 (as determined by Seller in good
faith) and which would not give the "Government" (as hereinafter defined) the
right to terminate the "Government Lease" (as hereinafter defined), Purchaser
shall not have the right to terminate its obligations under this Agreement by
reason thereof, but Seller shall have the right to elect to either repair and
restore the Fee Property (in which case the Closing Date shall be extended
until completion of such restoration, but in no event beyond the December 31,
1995) or to assign and transfer to Purchaser on the Closing Date all of
Seller's right, title and interest in and to all insurance proceeds paid or
payable to Seller on account of such fire or casualty plus the amount of
Seller's insurance deductible; provided, however, in no event shall Seller have
the right to assign to said insurance proceeds in lieu of repairing or
restoring the Fee Property if the damage (including the loss of rental under
the Government Lease, if any) is not covered by Seller's insurance policy.
Seller shall promptly notify Purchaser in writing of any such fire or other
casualty and Seller's determination of the cost to repair the damage caused
thereby. In the event of damage to the Fee Property by fire or other casualty
prior to the Closing Date, repair of which would cost in excess of $100,000.00
(as determined by Seller in good faith) or which gives the Government the right
to terminate (or abate rent under) the Government Lease, then this Agreement
may be terminated at the option of Purchaser, which option shall be exercised,
if at all, by Purchaser's written notice thereof to Seller within fifteen (15)
business days after Purchaser receives written notice of such fire or other
casualty and Seller's determination of the amount of such damages, and upon the
exercise of such option by Purchaser this Agreement shall become null and void,
the Earnest Money deposited by Purchaser shall be returned to Purchaser
together with interest thereon, and neither party shall have any further
liability or obligations hereunder. In the event that Purchaser does not
exercise the option set forth in the preceding sentence, the Closing shall take
place on the Closing Date and Seller shall assign and transfer to Purchaser on
the Closing Date all of Seller's right, title and interest in and to all
insurance proceeds paid or payable to Seller on account of the fire or casualty
plus the amount of Seller's insurance deductible.
6.2. If between the date of this Agreement and the Closing Date, any
condemnation or eminent domain proceedings are initiated which might result in
the taking of any part of the Fee Property or the taking or closing of any
right of access to the Fee Property, Seller shall immediately notify Purchaser
of such occurrence. In the event that the taking of any part of the Fee
Property shall: (i) materially impair access to the Fee 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 Fee Property or any portion thereof; or (iii)
materially and adversely impairs the use of the Fee Property as it is currently
being operated (hereinafter collectively referred to as a "Material Event"),
Purchaser may:
<PAGE>
6.2.1. terminate this Agreement by written notice to Seller, in
which event the Earnest Money deposited by Purchaser, together with interest
thereon, shall be returned to Purchaser and all rights and obligations of the
parties hereunder with respect to the closing of this transaction will cease;
or
6.2.2. proceed with the Closing, in which event Seller shall assign
to Purchaser all of Seller's right, title and interest in and to any award made
in connection with such condemnation or eminent domain proceedings.
6.3. Purchaser shall then notify Seller, within fifteen (15) business days
after Purchaser's receipt of Seller's notice, whether Purchaser elects to
exercise its rights under Paragraph 6.2.1 or Paragraph 6.2.2. Closing shall be
delayed, if necessary, until Purchaser makes such election. If Purchaser fails
to make an election within such fifteen (15) business day period, Purchaser
shall be deemed to have elected to exercise its rights under Paragraph 6.2.2.
If between the date of this Agreement and the Closing Date, any condemnation or
eminent domain proceedings are initiated which do not constitute a Material
Event, Purchaser shall be required to proceed with the Closing, in which event
Seller shall assign to Purchaser all of Seller's right, title and interest in
and to any award made in connection with such condemnation or eminent domain
proceedings.
6.4. Notwithstanding anything contained in this Section 6 to the contrary,
any attempted termination by Purchaser of this Agreement as a consequence of a
casualty or condemnation to the Fee Property giving the Government the right to
terminate (or abate rent under) the Government Lease shall be null and void if
prior to Seller's receipt of Purchaser's notice to terminate this Agreement as
a consequence of such a casualty or condemnation, the Government waives, in
writing, its right to terminate the Government Lease as a result of such a
casualty or condemnation or the Seller reimburses Purchaser for the amount of
the rent abatement, as applicable.
6.5. A fire, casualty or taking of the Leasehold Property shall not allow
the Purchaser the right to terminate this Agreement. On the Closing Date,
Seller shall assign to Purchaser any insurance (or condemnation, as applicable)
proceeds paid or payable to Seller on account of such fire, casualty or
condemnation plus the amount of Seller's insurance deductible, if applicable.
7. INSPECTION AND AS-IS CONDITION.
7.1. During the period commencing on the Date of this Agreement and
ending at 5:00 p.m. Chicago time on the thirtieth(30th) day thereafter (said
30-day period being herein referred to as the "Inspection Period"), Purchaser
and the agents, engineers, employees, contractors and surveyors retained by
Purchaser may enter upon the Fee Property, at any reasonable time and upon
reasonable prior notice to Seller, to inspect the Fee Property, including,
without limitation, a review of the Leases and to conduct and prepare such
studies, tests and surveys as Purchaser may deem reasonably necessary and
appropriate. In connection with Purchaser's review of the Fee Property, Seller
has delivered to Purchaser copies of the current rent roll for the Property,
the most recent tax and insurance bills, the Leases, the Ground Lease, utility
account numbers, personal property inventory, Service Contracts, monthly
unaudited operating statements from 1993, 1994 and 1995, the Survey, and the
Loan Documents.
<PAGE>
All of the foregoing tests, investigations and studies to be conducted
under this Paragraph 7.1 by Purchaser shall be at Purchaser's sole cost and
expense and in the event of any damage to the Fee Property caused by Purchaser,
its agents, engineers, employees, contractors or surveyors, Purchaser shall
restore the Property to the condition existing prior to the performance of such
tests or investigations by or on behalf of Purchaser. Purchaser shall defend,
indemnify and hold Seller and any affiliate, parent of Seller, and all
shareholders, employees, officers and directors of Seller or Seller's affiliate
or parent (hereinafter collectively referred to as "Affiliate of Seller")
harmless from any and all liability, cost and expense (including without
limitation, reasonable attorney's fees, court costs and costs of appeal)
suffered or incurred by Seller or Affiliates of Seller for injury to persons or
property caused by Purchaser's investigations and inspection of the Property.
Purchaser shall undertake its obligation to defend set forth in the preceding
sentence using attorneys selected by Seller, in Seller's sole discretion.
Prior to commencing any such tests, studies and investigations, Purchaser shall
furnish to Seller a certificate of insurance evidencing comprehensive general
public liability insurance insuring the person, firm or entity performing such
tests, studies and investigations and listing Seller and Purchaser as
additional insureds thereunder.
If Purchaser is dissatisfied with the results of the tests, studies or
investigations performed or information received pursuant to this Agreement, or
otherwise, Purchaser shall have the right to terminate this Agreement by giving
written notice of such termination to Seller at any time prior to the
expiration of the Inspection Period. If written notice is not given by
Purchaser pursuant to this Paragraph 7.1 prior to the expiration of the
Inspection Period, then the right of Purchaser to terminate this Agreement
pursuant to this Paragraph 7.1 shall be waived and Purchaser shall deposit the
Additional Earnest Money with the Title Company on or before the expiration of
the Inspection Period. If Purchaser terminates this Agreement by written
notice to Seller prior to the expiration of the Inspection Period: (i)
Purchaser shall promptly deliver to Seller copies of all studies, reports and
other investigations obtained by Purchaser in connection with its due diligence
during the Inspection Period which are not by their terms confidential; and
(ii) the Earnest Money deposited by Purchaser shall be immediately paid to
Purchaser, together with any interest earned thereon, and neither Purchaser nor
Seller shall have any right, obligation or liability under this Agreement,
except for Purchaser's obligation to indemnify Seller and restore the Property,
as more fully set forth in this Paragraph 7.1. Notwithstanding anything
contained herein to the contrary, Purchaser's obligation to indemnify Seller
and restore the Property, as more fully set forth in this Paragraph 7.1, shall
survive the termination of this Agreement.
<PAGE>
7.2. Except for the express representations and warranties of Seller set
forth herein, Purchaser acknowledges and agrees that it will be purchasing the
Property and the Personal Property based solely upon its inspections and
investigations of the Property and the Personal Property, and that Purchaser
will be purchasing the Property and the Personal Property "AS IS" and "WITH ALL
FAULTS", based upon the condition of the Property and the Personal Property as
of the date of this Agreement, wear and tear and loss by fire or other casualty
or condemnation excepted. Without limiting the foregoing, Purchaser
acknowledges that, except as may otherwise be specifically set forth elsewhere
in this Agreement, neither Seller nor its consultants, brokers or agents have
made any representations or warranties of any kind upon which Purchaser is
relying as to any matters concerning the Property or the Personal Property,
including, but not limited to, the condition of the land or any improvements
comprising the Property, the existence or non-existence of toxic waste and/or
any hazardous materials or substances, economic projections or market studies
concerning the Property, any development rights, taxes, bonds, covenants,
conditions and restrictions affecting the Property, water or water rights,
topography, drainage, soil, subsoil of the Property, the utilities serving the
Property or any zoning, environmental or building laws, rules or regulations
affecting the Property. Seller makes no representation or warranty that the
Property complies with Title III of the Americans with Disabilities Act or any
fire code or building code. Furthermore, Purchaser acknowledges that the
"Existing Reports" (as hereinafter defined) disclose the existence of asbestos
at the Property. Purchaser hereby releases Seller and the Affiliates of Seller
from any and all liability in connection with any claims which Purchaser may
have against Seller or the Affiliates of Seller, and Purchaser hereby agrees
not to assert any claims for contribution, cost recovery or otherwise, against
Seller or the Affiliates of Seller, relating directly or indirectly to the
existence of asbestos or hazardous materials or substances on, or environmental
conditions of, the Property, whether known or unknown. As used herein, the
term "hazardous materials or substances" means (i) hazardous wastes, hazardous
substances, hazardous constituents, toxic substances or related materials,
whether solids, liquids or gases, including but not limited to substances
defined as "hazardous wastes," "hazardous substances," "toxic substances,"
"pollutants," "contaminants," "radioactive materials," or other similar
designations in, or otherwise subject to regulation under, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), 42 U.S.C. Section 9601 et seq.; the Toxic Substance Control Act
("TSCA"), 15 U.S.C. Section 2601 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1802; the Resource Conservation and
Recovery Act ("RCRA"), 42 U.S.C. Section 9601. et seq.; the Clean Water Act
("CWA"), 33 U.S.C. Section 1251 et seq.; the Safe Drinking Water Act, 42 U.S.C.
Section 300f et seq.; the Clean Air Act ("CAA"), 42 U.S.C. Section 7401 et
seq.; and in any permits, licenses, approvals, plans, rules, regulations or
ordinances adopted, or other criteria and guidelines promulgated pursuant to
the preceding laws or other similar federal, state or local laws, regulations,
rules or ordinance now or hereafter in effect relating to environmental matters
(collectively the "Environmental Laws"); and (ii) any other substances,
constituents or wastes subject to any applicable federal, state or local law,
regulator or ordinance, including any Environmental Law, now or hereafter in
effect, including but not limited to (A) petroleum, (B) refined petroleum
products, (C) waste oil, (D) waste aviation or motor vehicle fuel and (E)
asbestos.
<PAGE>
7.3. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Except for the express
representations and warranties of Seller relating to the rent roll set forth
herein, Seller makes no representation or warranty that such material is
complete or accurate or that Purchaser will achieve similar financial or other
results with respect to the operations of the Property, it being acknowledged
by Purchaser that Seller's operation of the Property and allocations of
revenues or expenses may be vastly different than Purchaser may be able to
attain. Purchaser acknowledges that it is a sophisticated and experienced
purchaser of real estate and further that Purchaser has relied upon its own
investigation and inquiry with respect to the operation of the Property and
releases Seller and the Affiliates of Seller from any liability with respect to
such historical information.
7.4. Seller has provided to Purchaser the following existing reports: (i)
Report of Facility Survey to Identify Asbestos-Containing Materials within 101
Marietta for Balcor Property Management, Inc., dated November 6, 1992 prepared
by Law Associates, Inc. ("Law"), (ii) Letter dated June 13, 1995 from Law to
Balcor Management Services regarding Summary Report of Asbestos Sampling and
Testing; and (iii) Report of Ambient Air Sampling and Analysis dated January
24, 1995 prepared by Law (the "Existing Reports"). Seller makes no
representation or warranty concerning the accuracy or completeness of the
Existing Reports. Purchaser hereby releases Seller and the Affiliates of
Seller from any liability whatsoever with respect to the Existing Reports, or,
including, without limitation, the matters set forth in the Existing Reports,
and the accuracy and/or completeness of the Existing Reports. Furthermore,
Purchaser acknowledges that it will be purchasing the Property with all faults
disclosed in the Existing Reports.
8. ASSUMPTION OF LOAN AND GROUND LEASE. Purchaser's and Seller's obligations
under this Agreement are contingent upon the occurrence of the following: (i)
Morgan Guaranty Trust Company of New York ("Lender") and any other holder of
the Loan, if any, consenting, in writing, to the assignment by Seller, and
assumption by Purchaser, of the obligations of the borrower under the Loan
Documents and a release from Lender and any other holder of the Loan, if any,
releasing Seller from any liability under the Loan Documents; (ii) Lender
delivering to Purchaser an estoppel certificate regarding the Loan Documents
substantially in the form attached hereto as Exhibit K (the consent and
estoppel set forth above are sometimes referred to herein together as the
"Lender Consent"); (iii) Ground Lessor consenting, in writing, to the
assignment by Seller, and assumption by Purchaser, of the obligations of the
ground lessee under the Ground Lease and a release from Ground Lessor releasing
Seller from any liability under the Ground Lease (the "Ground Lessor Consent")
(in the form attached hereto as Exhibit L). If the Lender fails to deliver the
Lender Consent and/or the Ground Lessor fails to deliver the Ground Lessor
Consent on or before September 25, 1995 then either Purchaser or Seller shall
have the option, upon written notice to the other, exercised no later than
September 29, 1995 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 returned to Purchaser, and neither party
shall have any further liability to the other, except for Purchaser's
obligation to indemnify Seller and restore the Property, as more fully set
forth in Paragraph 7. If this Agreement has not been terminated by either
<PAGE>
party in accordance with this Agreement on or before September 29, 1995, then
the applicable contingency shall have been waived and the parties shall proceed
to Closing. The parties acknowledge and agree that Seller shall be responsible
for obtaining the Lender Consent and the Ground Lessor Consent (any consent
fees to be paid for by Purchaser) and Purchaser shall not interfere with the
obtaining of said consents. Purchaser further acknowledges and agrees that
Purchaser shall execute all customary and necessary documents reflecting such
assumption (and not changing the terms of the Loan or the Ground Lease)
reasonably required by the Lender and/or the Ground Lessor in order to obtain
the Lender Consent and the Ground Lessor Consent (said documents being
hereinafter referred to as the "Assumption Documents"). Notwithstanding the
foregoing to the contrary, if, prior to the Closing Date, the Loan is acquired
by Purchaser or any "Permitted Assignee" (as hereinafter defined) of Purchaser,
or any affiliate of Purchaser or said Permitted Assignee (including, without
limitation, any entity in which any partner, shareholder or member of Purchaser
or said Permitted Assignee has any interest in whatsoever), then the obtaining
of the Lender Consent shall not be a condition precedent to either Purchaser's
or Seller's obligations hereunder.
9. CLOSING. The closing of this transaction (the "Closing") shall be on the
date which is fifteen(15) days after the expiration of the inspection period,
(the "Closing Date"), at the office of the agent for the Title Insurer in
Atlanta, Georgia at which time Seller shall deliver possession of the Property
to Purchaser. This transaction shall be closed through an escrow with Title
Insurer, in accordance with the general provisions of the usual and customary
form of deed and money escrow for similar transactions in Georgia, or at the
option of either party, the Closing shall be a "New York style" closing at
which the Purchaser shall wire the Purchase Price to Title Insurer on the
Closing Date and prior to the release of the Purchase Price to Seller,
Purchaser shall receive the Title Policy or marked up commitment dated the date
of the Closing Date. In the event of a New York style closing, Seller shall
deliver to Title Insurer any customary affidavit in connection with a New York
style closing. All closing and escrow fees shall be divided equally between
the parties hereto.
10. CLOSING DOCUMENTS.
10.1. On the Closing Date, Seller and Purchaser shall execute and deliver
to one another a joint closing statement. In addition, Purchaser shall deliver
to Seller the balance of the Purchase Price, an assumption of the documents set
forth in Paragraph 10.2.2, 10.2.4 and 10.2.5 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.
10.2. On the Closing Date, Seller shall deliver to Purchaser the
following:
10.2.1. the Deed (in the form of Exhibit H attached hereto), subject
to Permitted Exceptions and those Unpermitted Exceptions waived by
Purchaser;
10.2.2. the Assignment and Assumption of Ground Lease (in the form of
Exhibit I attached hereto), subject to Permitted Exceptions and those
Unpermitted Exceptions waived by Purchaser in writing;
<PAGE>
10.2.3. a quit claim bill of sale conveying the Personal Property (in
the form of Exhibit M attached hereto);
10.2.4. assignment and assumption of intangible property (in the form
attached hereto as Exhibit N);
10.2.5. an assignment and assumption of leases and security deposits
(in the form attached hereto as Exhibit O);
10.2.6. non-foreign affidavit (in the form of Exhibit P attached
hereto);
10.2.7. the Assumption Documents;
10.2.8. the Ground Lessor Consent (unless waived by the parties);
10.2.9. the Lender Consent, if the Loan is assumed by Purchaser
(unless waived by the parties);
10.2.10. original, and/or copies of, the Leases in Seller's
possession;
10.2.11. all documents and instruments reasonably required by the
Title Insurer to issue the Title Policy;
10.2.12. possession of the Property to Purchaser;
10.2.13. if requested by Purchaser in writing, evidence of the
termination of the management agreement;
10.2.14. notice to the tenants of the Property of the transfer of
title and assumption by Purchaser of the landlord's obligation under
the Leases and the obligation to refund the security deposits (in the
form of Exhibit Q);
10.2.15. an updated rent roll;
10.2.16. Affidavit pursuant to Section 48-7-128 of the Official Code
of Georgia Annotated that Seller is a resident of Georgia or that
Seller is not otherwise subject to Georgia tax withholding; and
10.2.17. If necessary, a Georgia Transfer Tax Declaration signed by
Seller.
<PAGE>
11. ESTOPPEL CERTIFICATES.
11.1. Purchaser's obligation to close the transaction contemplated by
this Agreement is contingent upon Purchaser's receipt of a tenant certificate
(the "Government Tenant Certificate") addressed to Purchaser from the United
States of America (the "Government") for the space occupied pursuant to U.S.
Government Lease for Real Property No. GS-04B-15730 dated August 5, 1977, as
amended (the "Government Lease") substantially in the form of Exhibit R
attached hereto and made a part hereof on or before September 25, 1995. If
Purchaser fails to receive any form of Government Tenant Certificate on or
before September 25, 1995, or if Purchaser advises Seller in writing that the
Government Tenant Certificate received by Purchaser is not substantially in the
form of Exhibit R on or before the earlier to occur of: (a) five (5) business
days following Purchaser's receipt of the Government Tenant Certificate, or (b)
September 29, 1995, then Purchaser shall have the right upon written notice
delivered to Seller no later than September 29, 1995 (for a termination based
on Purchaser's failure to receive any form of Government Tenant Certificate) or
the earlier to occur of: (a) five (5) business days following Purchaser's
receipt of the Government Tenant Certificate, or (b) September 29, 1995 (for a
termination because the Government Tenant Certificate fails to substantially
conform to Exhibit R) to terminate this Agreement. In the event of such a
termination and subject to the next following paragraph, this Agreement shall
become null and void without further action of the parties and all Earnest
Money theretofore deposited into the escrow by Purchaser together with any
interest accrued thereon, shall be returned to Purchaser, and neither party
shall have any further liability to the other, except for Purchaser's
obligation to indemnify Seller and restore the Property, as more fully set
forth in Paragraph 7 as described above. If Purchaser fails to so advise
Seller in writing on or before the dates described above that Purchaser is
electing to terminate this Agreement, then Purchaser shall be deemed to have
waived the receipt of the Government Tenant Certificate as a condition
precedent to Purchaser's obligation to close the transaction contemplated by
this Agreement.
Notwithstanding the foregoing, if the Purchaser elects to terminate this
Agreement as aforesaid, Seller shall have the right to elect in a written
notice delivered to Purchaser within three (3) days of Seller's receipt of
Purchaser's notice to terminate this Agreement, to postpone Purchaser's
termination for thirty (30) days during which thirty (30) day period Seller
will endeavor to obtain the Government Tenant Certificate in the form required
by this Agreement. If Seller obtains the Government Tenant Certificate in the
form required by this Agreement during said thirty (30) day period, then this
contingency shall be deemed satisfied and the Closing shall occur on the
earlier of: (a) the closing date as specified in paragraph 9 hereof, or (b)
five (5) business days following Purchaser's receipt of the Government Tenant
Certificate. If Seller fails to deliver the Government Tenant Certificate to
Purchaser during said thirty (30) day period, then, unless this condition
precedent is waived, in writing, by Purchaser, the Agreement shall become null
and void without further action of the parties and all Earnest Money deposited
into the escrow by Purchaser, together with any interest accrued thereon, shall
be returned to Purchaser, and neither party shall have any further liability to
the other except for Purchaser's obligation to indemnify Seller and restore the
Property as more fully set forth in Paragraph 7 of the Agreement.
<PAGE>
11.2. Seller agrees to request from each other tenant at the Property,
a tenant certificate (the "Additional Tenant Certificates") in the form of
Exhibit S attached hereto. Notwithstanding anything contained herein to the
contrary, Purchaser's obligation to close and purchase the Property is not
subject to nor conditioned upon Seller obtaining any Additional Tenant
Certificates for any tenants. No issues which are raised in any Additional
Tenant Certificates or the Government Tenant Certificate shall constitute a
Seller's default hereunder nor shall they, except as set forth in Section 11.1
and the next sentence, give Purchaser the right to terminate this Agreement.
In the event the Additional Tenant Certificates and/or the Government Tenant
Certificate reveal tenant offsets or delinquent obligations of Seller as
landlord under any Lease (including, the Government Lease) or adverse
discrepancies with any Lease (including, the Government Lease) (excluding
physical defects, the presence of which will not effect Purchaser's obligation
to close hereunder) (collectively, a "Defect"), then Purchaser's sole remedy as
a consequence thereof is to terminate this Agreement upon written notice to
Seller, delivered no later than September 29, 1995 in which case, subject to
the next following sentence, this Agreement shall become null and void without
further action of the parties and all Earnest Money theretofore deposited into
the escrow by Purchaser together with any interest accrued thereon, shall be
returned to Purchaser, and neither party shall have any further liability to
the other, except for Purchaser's obligation to indemnify Seller and restore
the Property, as more fully set forth in Paragraph 7 as described above. If
Purchaser elects to terminate this Agreement pursuant to the preceding sentence
as a result of the disclosure of a Defect, Seller shall have five (5) days
following Seller's receipt of such election to cure the Defect. Seller may
take any one or more of the following action, in its sole discretion, to cure
such defect: (i) deposit into escrow an amount equal to the Defect, (ii) give
Purchaser a credit against the Purchase Price in the amount of the Defect, or
(iii) take such other action to cure the Defect which is reasonably acceptable
to Purchaser. If this Agreement is not terminated by Purchaser in accordance
with this Section, then this contingency shall be deemed to have been satisfied
and Seller shall have no liability for said adverse conditions noted in the
Government Tenant Certificate and/or the Additional Tenant Certificates.
11.3. Seller shall also request an estoppel certificate from the Ground
Lessor in the form of Exhibit T attached hereto and made a part hereof. It is
not a condition precedent to Purchaser's obligations hereunder that Seller
obtain such an estoppel. Neither the failure to obtain such an estoppel nor
any matter disclosed by such an estoppel shall constitute a default by Seller
hereunder or allow Purchaser to not close the transaction contemplated by this
Agreement.
12. SERVICE CONTRACTS. On or before the expiration of the Inspection Period,
Purchaser shall advise Seller which of the Service Contracts Purchaser desires
to assume. Seller shall assign those Service Contracts to Purchaser at Closing,
and Purchaser shall assume responsibility of the obligations arising from and
after the Closing Date under those Service Contracts which Purchaser desires to
assume. Seller shall use reasonable efforts to obtain any required consent
with respect to the assignment of the Service Contracts; provided, however,
that Seller's inability to obtain such approval shall not be a default
hereunder or be a condition precedent to Purchaser's obligations to close
hereunder.
<PAGE>
13. LEASING OF PROPERTY. Until the Closing Date Seller shall not enter into
any lease for any portion of the Fee Property or any modification, extension or
amendment to any Lease without first obtaining the prior consent of Purchaser,
which consent shall not be unreasonably withheld or delayed. If Purchaser has
not responded within five (5) business days of receipt of a request by Seller,
Purchaser's consent shall be deemed given. If Purchaser closes the transaction
contemplated by this Agreement, Purchaser shall be responsible to pay for all
leasing commission, tenant improvement costs or other costs and expenses
(including reasonable attorneys' fees) incurred by Seller with respect to such
lease, including, without limitation, all leasing commission and tenant
improvement costs relating to the lease with Phenix Federal.
14. DEFAULT BY PURCHASER. ALL EARNEST MONEY DEPOSITED INTO THE ESCROW IS TO
SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND UNDERTAKINGS
UNDER THIS AGREEMENT. IN THE EVENT OF A DEFAULT OF THE PURCHASER UNDER THE
PROVISIONS OF THIS AGREEMENT, SELLER SHALL RETAIN ALL OF THE EARNEST MONEY AND
THE INTEREST THEREON AS SELLER'S SOLE RIGHT TO DAMAGES OR ANY OTHER REMEDY,
EXCEPT FOR PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER AND RESTORE THE PROPERTY
AS SET FORTH IN PARAGRAPH 7.1 HEREOF. THE PARTIES HAVE AGREED THAT SELLER'S
ACTUAL DAMAGES, IN THE EVENT OF A DEFAULT BY PURCHASER, WOULD BE EXTREMELY
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.
15. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF ALL EARNEST MONEY
TOGETHER WITH ANY INTEREST ACCRUED THEREON, AND THIS AGREEMENT SHALL THEN
BECOME NULL AND VOID AND OF NO EFFECT AND THE PARTIES SHALL HAVE NO FURTHER
LIABILITY TO EACH OTHER AT LAW OR IN EQUITY, EXCEPT FOR PURCHASER'S OBLIGATIONS
TO INDEMNIFY SELLER AND RESTORE THE PROPERTY AS SET FORTH MORE FULLY IN
PARAGRAPH 7. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF
SELLER'S DEFAULT IS (I) SELLER'S FAILURE TO BOND OVER, REMOVE OR CURE
UNPERMITTED EXCEPTIONS WHICH IN THE AGGREGATE ARE LESS THAN $100,000 OR WHICH
ARISE BY REASON OF SELLER'S INTENTIONAL ACTS, OR (II) ITS WILLFUL REFUSAL TO
DELIVER THE DEED OR THE ASSIGNMENT OF GROUND LEASE, THEN PURCHASER WILL BE
ENTITLED TO SUE FOR SPECIFIC PERFORMANCE.
<PAGE>
16. PRORATIONS.
16.1. Rents (including rent under the Ground Lease) (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); interest accruing under the Loan Documents; water and other
utility charges; fuels; prepaid operating expenses; management fees in the
amount of 5.5%; real and personal property taxes prorated on a "net" basis
(i.e. adjusted for all tenants' liability, if any, for such items); operating
expenses which are reimbursable by the tenants for the period prior to the
Closing Date less any amount previously paid by the Tenants shall be paid over
to Seller; upon receipt by Purchaser and other similar items shall be adjusted
ratably as of 11:59 p.m. on the Closing Date, and credited to the balance of
the cash due at Closing. Assessments payable in installments which are due
subsequent to the Closing Date shall be paid by Purchaser. If the amount of
any of the items to be prorated is not then ascertainable, the adjustments
thereof shall be on the basis of the most recent ascertainable data. Seller
will receive a credit for any balances in escrow accounts established pursuant
to the Loan Documents. All prorations will be final except as to delinquent
rent referred to in Paragraph 16.2 below. Notwithstanding the terms and
provisions of Section 16.2 below, Purchaser acknowledges that the Government
pays rent under the Government Lease in arrears. Upon receipt by Purchaser,
Purchaser shall pay over to Seller Seller's pro rata share of the rent paid by
the Government for the month in which the Closing occurs.
16.2. Except as set forth in the last sentence of Section 16.1 above, all
basic rent paid following the Closing Date by any tenant of the Property who is
indebted under a Lease for basic rent for any period prior to and including the
Closing Date in an amount greater than the amount of base rent or other amounts
then owed by said tenant to Purchaser shall be deemed a "Post-Closing Receipt"
until such time as all such indebtedness is paid in full. Within ten (10) days
following each receipt by Purchaser of a Post-Closing Receipt, Purchaser shall
pay such Post-Closing Receipt to Seller. During the 180 day period following
the Closing Date, Purchaser shall use its best efforts to collect all amounts
which, upon collection, would constitute Post-Closing Receipts hereunder.
Within 120 days after the Closing Date, Purchaser shall deliver to Seller a
reconciliation statement of Post-Closing Receipts through the first 90 days
after the Closing Date. Upon the delivery of the Post-Closing Receipts
reconciliation, Purchaser shall deliver to Seller any Post-Closing Receipts
owing to Seller and not previously delivered to Seller in accordance with the
terms hereof. Seller retains the right to conduct an audit, at reasonable
times and upon reasonable notice, of Purchaser's books and records to verify
the accuracy of the Post-Closing Receipts reconciliation statement and upon the
verification of additional funds owing to Seller, Purchaser shall pay to Seller
said additional Post-Closing Receipts and the cost of performing Seller's
audit. Seller shall not commence legal action against a tenant for basic rent
owed to Seller for a period prior to the Closing Date so long as said tenant is
a tenant in the Fee Property. Paragraph 16.2 of this Agreement shall survive
the Closing and the delivery and recording of the deed.
<PAGE>
16.3. Notwithstanding anything contained in this Agreement to the
contrary, Purchaser acknowledges and agrees that Seller is retaining the
following rights, none of which are being conveyed, assigned or transferred to
Purchaser pursuant to this Agreement or any documents executed by Seller in
connection herewith. All of the items set forth in this Section 16.3 shall
survive the Closing and the recording of the Deed.
16.3.1. Seller has advised Purchaser that Seller has protested the
real estate taxes for the Property for calendar years 1991, 1992, 1993, 1994
and 1995. All refunds in connection with such tax protests remain the property
of Seller and are not being assigned by Seller to Purchaser pursuant to this
Agreement. In the event any such refunds are paid to Purchaser, Purchaser
agrees to promptly remit all such sums to Seller. Purchaser agrees, at no cost
or expense to Purchaser, to execute any documents reasonably requested by
Seller, in connection with such tax protests. When received, the tax refund
for 1995 shall be prorated between the parties such that Seller receives all
sums allocable to the period prior to and on the Closing Date and Purchaser
receives all sums allocable to the period after the Closing Date.
16.3.2. Pursuant to the Government Lease, Seller has advised
Purchaser that after Closing Seller may seek to obtain from the Government a
reimbursement to pay for operating expenses of the Fee Property for the period
prior to the Closing Date. Accordingly, Seller is retaining the right to
pursue the Government for the payment of such operating expenses and such right
is not being conveyed, assigned or transferred to Purchaser. Purchaser shall
take no action, of any type or nature, which could reasonably be determined to
be detrimental to Seller with respect to obtaining said reimbursement. In the
event any such sums are paid to Purchaser, Purchaser agrees to promptly remit
all such sums to Seller. Purchaser agrees, at no costs or expense to
Purchaser, to execute any documents reasonably requested by Seller, in
connection with such claim of reimbursement. All sums received from the
Government shall be prorated between the parties such that Seller receives all
sums allocable to the period prior to and on the Closing Date and Purchaser
receives all sums allocable to the period after the Closing Date.
Notwithstanding anything contained in this Section 16.3.2 to the contrary,
Seller shall not have the right to seek to terminate or take any action which
would be reasonably likely to terminate the Government Lease.
16.3.3. Seller has advised Purchaser that Seller has applied to the
U.S. Olympic Committee to receive tickets to the 1996 Olympics to be held in
Atlanta, Georgia and that the application for the tickets was made in the name
of the Property. All tickets shall remain the property of Seller and are not
being assigned, transferred or conveyed to Purchaser. If any such tickets are
delivered to Purchaser, Purchaser agrees to promptly deliver such tickets to
Seller. Purchaser agrees, at no costs or expense to Purchaser, to execute any
documents reasonably requested by Seller, in connection with the foregoing
tickets.
17. RECORDING. This Agreement shall not be recorded and the act of recording
by Purchaser shall be an act of default hereunder by Purchaser and subject to
the provisions of Paragraph 10 hereof.
<PAGE>
18. ASSIGNMENT. The Purchaser shall not have the right to assign its interest
in this Agreement without the prior written consent of the Seller. Any
assignment or transfer of, or attempt to assign or transfer, Purchaser's
interest in this Agreement shall be an act of default hereunder by Purchaser
and subject to the provisions of Paragraph 10 hereof. Notwithstanding the
foregoing to the contrary, Purchaser shall have the right to assign this
Agreement, without first obtaining the consent of Seller, to a partnership in
which Purchaser or an affiliate of Purchaser is a general partner ("Permitted
Assignee") or contractual advisor. No such assignment shall relieve Purchaser
from its obligations or liabilities under this Agreement.
19. BROKER. The parties hereto represent and warrant that no broker
commission or finder fee is due and payable in connection with this transaction
other than to Richard Bowers & Co. (to be paid by Seller) and Taurus
Properties, Inc. (which shall be paid out of the commission payable to Richard
Bowers & Co.) Seller's commission to Richard Bowers & Co. shall only be
payable out of the proceeds of the sale of the Property in the event the
transaction set forth herein closes. Purchaser and Seller shall indemnify,
defend and hold the other party hereto harmless from any claim whatsoever
(including without limitation, reasonable attorney's fees, court costs and
costs of appeal) from anyone claiming by or through the indemnifying party any
fee, commission or compensation on account of this Agreement, its negotiation
or the sale hereby contemplated other than to Richard Bowers & Co. (to be paid
by Seller) and Taurus Properties, Inc. (to be paid by Richard Bowers & Co.).
The indemnifying party shall undertake its obligations set forth in this
Paragraph 19 using attorneys selected by the indemnifying party and reasonably
acceptable to the indemnified party. The provisions of this Paragraph 19 will
survive the Closing and delivery of the Deed.
20. SELLER'S REPRESENTATIONS AND WARRANTIES.
20.1. Any reference herein to Seller's knowledge or notice of any matter
or thing shall only mean such knowledge or notice that has actually been
received by Phillip Schechter "Seller's Representative"), and any
representation or warranty of the Seller is based upon those matters of which
the Seller's Representative has actual knowledge. Any knowledge or notice
given, had or received by any of Seller's agents, servants or employees shall
not be imputed to Seller, the general partner or limited partners of Seller,
the subpartners of the general partner or limited partners of Seller or
Seller's Representative.
20.2. Subject to the limitations set forth in Paragraph 20.1, Seller
hereby makes the following representations and warranties, which
representations and warranties are made to Seller's knowledge and which shall
not survive Closing: (i) Except for claims arising out of the bankruptcy of
James M. Finley (a tenant at the Property), Seller has no knowledge of any
pending or threatened litigation, claim, cause of action or administrative
proceeding concerning the Property; (ii) Seller has the power to execute this
Agreement and consummate the transactions contemplated herein; (iii) the rent
rolls which Seller has submitted to the Purchaser and updated as of the Closing
Date are true, correct and accurate in all material respects as of the date set
forth therein; (iv) except as may be disclosed in the Existing Reports, Seller
has not received any notice of an uncured violation of Environmental Laws; and
(v) the operating statements delivered by Seller to Purchaser are the same
operating statements received by Seller from the manager of the Property.
<PAGE>
21. CONSTRUCTION OF TENANT IMPROVEMENT WORK. Purchaser acknowledges that
Seller is currently undertaking certain tenant improvement work in the Fee
Building at the request of the Government. In connection therewith, Seller has
entered into the general contractor construction contract identified on Exhibit
U attached hereto and made a part hereof (said contract as the same may be
modified or amended is hereinafter referred to as the "Construction Contract").
During the period from and after the date hereof through and including the
expiration of the Inspection Period, Seller shall deliver to Purchaser copies
of any addenda or amendments to the Construction Contract or any new
Construction Contracts entered into by Seller. After the expiration of the
Inspection Period through and including the Closing Date, Seller will not enter
into any addenda or amendments to the Construction Contract or new Construction
Contracts which are for an amount in excess of $5,000 without first obtaining
the written approval of Purchaser, which approval shall not be unreasonably
withheld or delayed. If Purchaser fails to respond to Seller's request for
approval within five (5) business days, then Purchaser shall be deemed to have
approved Seller's execution of the addenda or amendments to the Construction
Contract (or the new Construction Contract, if applicable). At Closing,
Purchaser shall assume the obligations under the Construction Contract as same
may have been amended or modified (or any new Construction Contract) arising
after the Closing Date upon receipt by Purchaser, Purchaser shall pay to Seller
all unreimbursed sums expended by Seller prior to the closing date with
respect to the work described in the Construction Contract, as amended (or any
new Construction Contract) plus the associated profit payable to Seller
pursuant to the lease amendment entered into between the Government and the
Seller with respect to such tenant improvement work (based on the amount of the
work completed) prior to the closing date.
22. LIMITATION OF LIABILITY. None of Seller's, beneficiaries, shareholders,
partners, officers, agents or employees, heirs, successors or assigns shall
have any personal liability of any kind or nature for or by reason of any
matter or thing whatsoever under, in connection with, arising out of or in any
way related to this Agreement and the transactions contemplated herein, and
Purchaser hereby waives for itself and anyone who may claim by, through or
under Purchaser any and all rights to sue or recover on account of any such
alleged personal liability.
23. TIME OF ESSENCE. Time is of the essence of this Agreement.
24. NOTICES. Any notice or demand which either party hereto is required or
may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by overnight courier
such as Federal Express or made by United States registered or certified mail
addressed as follows:
<PAGE>
TO SELLER: c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attention: Ilona Adams
with copies to: The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attention: Alan Lieberman
(708) 267-1600
(708) 317-4462 (FAX)
and to: Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, Illinois 60661-3693
Attention: Andrew D. Small, Esq.
(312) 902-5489
(312) 902-1061 (FAX)
TO PURCHASER: Taurus Investment Group, Inc.
1400 E. Newport Center Drive
Deerfield Beach, Florida 33442
Attention: Mr. Steve E. Munson
Lorenz Reibling
Guenther Reibling
(305) 428-4585
(305) 360-9430 (FAX)
and one copy to: King & Spalding
120 W. 48th Street
New York, New York 10036
Attention: Eileen Brumback
(212) 556-2168
(212) 556-2222 (FAX)
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be
deemed to be delivered or made on the next business day if sent by overnight
courier, or on the 4th business day after the same is deposited in the United
States Mail as registered or certified matter, addressed as above provided,
with postage thereon fully prepaid. Any such notice, demand or document not
given, delivered or made by registered or certified mail or by overnight
courier as aforesaid shall be deemed to be given, delivered or made upon
receipt of the same by the party to whom the same is to be given, delivered or
made. Copies of all notices shall be served upon the Escrow Agent.
<PAGE>
25. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute two
(2) copies of this Agreement and three (3) copies of the Escrow Agreement and
forward them to Seller for execution. Seller will forward one (1) copy of the
executed Agreement to Purchaser and will forward the following to the Escrow
Agent:
(A) One (1) fully executed copy of this Agreement; and
(B) Three (3) copies of the Escrow Agreement signed by the parties with a
direction to execute two (2) copies of the Escrow Agreement and deliver a fully
executed copy to each of the Purchaser and the Seller.
26. GOVERNING LAW. The provisions of this Agreement shall be governed by the
laws of the State of Georgia.
27. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties and supersedes all prior negotiations, understandings and
representations made by and between the parties and the agents, servants and
employees.
28. 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.
29. 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.
Upon receipt of the executed agreement from Seller, Purchaser shall
wire-transfer the initial earnest money deposit to escrow agent per the
following wiring instructions:
Texas Commerce Bank-Sugar Land
Sugar Land, Texas
ABA# 113-000-609
Charter Title Company Fort Bend Escrow
Account # 09200012815
GF# 95260028
<PAGE>
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of the
date first set forth above.
PURCHASER:
TAURUS INVESTMENT GROUP, INC., a Florida corporation
By: /s/Steve E. Munson
------------------------------
Name: Steve E. Munson
------------------------------
Its: Vice President
------------------------------
SELLER:
MARIETTA TOWER PARTNERS, an Illinois limited
partnership
By: BALCOR EQUITY PARTNERS-XVIII, an Illinois general
partnership, its general partner
By: BALCOR EQUITY PARTNERS-XVIII, INC., a
general partner
By: /s/Philip Schechter
------------------------------
Name: Philip Schechter
------------------------------
Its: Authorized agent
------------------------------
<PAGE>
Richard Bowers of Richard Bowers & Co. ("Seller's Broker") executed this
Agreement in its capacity as a real estate broker and acknowledges that the fee
or commission due it from Seller as a result of the transaction described in
this Agreement is as set forth in that certain Listing Agreement, dated __,
199_ between Seller and Seller's Broker (the "Listing Agreement"). Seller's
Broker also acknowledges that payment of the aforesaid fee or commission is
conditioned upon the Closing and the receipt of the Purchase Price by the
Seller. Seller's Broker agrees to deliver a receipt to the Seller at the
Closing for the fee or commission due Seller's Broker and a release stating
that no other fees or commissions are due to it from Seller or Purchaser.
RICHARD BOWERS & CO.
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
<PAGE>
EXHIBITS
A-1 - Fee Land
A-2 - Leasehold Land
B - Personal Property
C - Leases
D - Service Contracts
E - Escrow Agreement
F - Title Commitment
G - Loan Documents
H - Deed
I - Assignment and Assumption of Ground Lease
J - Ground Lease (including all Amendments and Assignments thereof)
K - Lender Estoppel Certificate
L - Ground Lessor Consent
M - Bill of Sale
N - Assignment and Assumption of Intangible Property
O - Assignment and Assumption of Leases and Security Deposits
P - Non-Foreign Affidavit
Q - Notice to Tenants
R - Government Tenant Certificate Form
S - Additional Tenant Certificates
T - Ground Lessor Estoppel
U - General Contractor Construction Contracts
<PAGE>
(312) 902-5489
September 13, 1995
VIA FACSIMILE
AND FEDERAL EXPRESS
Eileen Brumback, Esq.
King & Spalding
120 W. 48th Street
New York, NY 10036
Re: Agreement of Sale ("Agreement of Sale") Dated September 13, 1995
Between Tauras Investment Group, Inc. ("Buyer") and Marietta Tower
Partners ("Seller") for the Sale of Real Property Commonly Known as
101 Marietta Tower, Atlanta, Georgia and Seller's Leasehold Interest
in the Garage Located at 79 Marietta Street, Atlanta, Georgia.
Dear Eileen:
Enclosed are two originals of the Agreement of Sale which have been executed
and initialed by my client along with a fully executed copy of the letter
agreement. In addition, I have forwarded four (4) copies of the Escrow
Agreement to the escrow agent for execution. (I have modified the dates in the
escrow in accordance with item 7 of this letter agreement.) Please promptly
deposit the earnest money with the escrow agent in accordance with the
previously delivered wire transfer instructions.
In addition, as we discussed on the telephone this morning, this letter will
set forth the agreement of the parties with respect to various changes to the
Agreement of Sale and the letter agreement. All capitalized terms which are
used but not otherwise defined herein shall have the meaning ascribed to them
in the Agreement of Sale.
1. Section 2.2. The date "September 15, 1995" set forth in Section 2.2
is hereby deleted, and the date "October 13, 1995" is hereby substituted
therefor.
2. Section 6.1. The crossed out figure "$300,000" in Section 6.1 (both
on pages 4 and 5 of the Agreement of Sale) is hereby reinstated.
3. Section 8.
A. The date "September 25, 1995" in Section 8 is hereby deleted,
and the date "October 23, 1995" is hereby substituted therefor.
Furthermore, all references in Section 8 to "September 29, 1995" are
hereby deleted, and the date "October 27, 1995" is hereby substituted
therefor.
B. Buyer hereby agrees to cooperate with Seller in obtaining the
Lender Consent on or before the deadlines provided for in the
Agreement of Sale.
C. Seller hereby agrees to the deletion of the final sentence of
Section 8.
<PAGE>
4. Section 11.1. The date "September 25, 1995" in Section 11.1 is
hereby deleted, and the date "October 23, 1995 is hereby substituted
therefor. In addition, all references in Section 11.1 to "September 29,
1995" are also hereby deleted and the date "October 27, 1995" is hereby
substituted therefor.
5. Section 11.2. The date "September 29, 1995" in Section 11.2 is
hereby deleted, and the date "October 27, 1995" is hereby substituted
therefor.
6. Sections 16.1 and 21. The parties agree that none of the changes
handwritten in by Purchaser to Sections 16.1 or 21 shall apply; provided,
however, the parties hereto hereby agree as follows:
In lieu of giving Seller a credit at Closing for sums owed, but not paid,
by the Government for basic rent, operating expenses and sums due pursuant
to the Construction Contract, at Closing Purchaser shall deposit into
escrow, an amount equal to Seller's share of the rent (both basic rent and
operating expenses) which is owed by the Government prior to the Closing
Date and which has not been paid by the Government as of the Closing Date.
In addition, at Closing, Purchaser shall deposit into escrow an amount
equal to the unreimbursed sums expended by Seller prior to the Closing
Date with respect to the tenant improvement work described in the
Construction Contract, as amended, plus an amount equal to the associated
profit payable to Seller pursuant to the lease amendments entered into
between the Government and the Seller with respect to such tenant
improvement work (based on the amount of work theretofore completed prior
to the Closing Date). The escrow will be in a form and substance
reasonably acceptable to Purchaser and Seller and will provide that the
funds in the escrow will be delivered immediately to Seller as and when
Purchaser receives said sums from the Government.
7. Sections 17 and 18. The reference to Paragraph "10" in Sections 17
and 18 is hereby deleted and Paragraph "14" is hereby substituted
therefor.
8. Exhibits. Attached hereto are revised Exhibits B, C and D to the
Agreement of Sale. These exhibits have been revised to reflect the
current information relating to the Property. The attached exhibits are
hereby substituted for those attached to the Agreement of Sale. I will
prepare and forward to you "clean" copies of these exhibits for insertion
into the execution documents.
9. Escrow Agreement. The date "October 2, 1995" in Sections 4 and 6 of
the Escrow Agreement is hereby deleted and the date "October 30, 1995" is
hereby substituted therefor.
10. Letter Agreement. The date "September 25, 1995" is hereby deleted,
and the date "October 23, 1995" is hereby substituted therefor.
Furthermore, the date "October 2, 1995" is hereby deleted and the date
"October 30, 1995" is hereby substituted therefor.
<PAGE>
In the event of a conflict between the Agreement of Sale and this letter
agreement this letter agreement shall govern and control. Except as modified
by the terms set forth herein, the Agreement of Sale shall remain in full force
and effect. This letter 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. A facsimile acknowledgment of this agreement shall be
effective, valid and binding, provided an original is received by overnight
courier by the other party on the day immediately following execution.
Assuming the foregoing is acceptable, please execute a copy of this letter in
acknowledgement blocks where indicated and return them to me. If you have any
questions, please feel free to call me.
Very truly yours,
/s/Andrew D. Small
Andrew D. Small
See next page for signature blocks
<PAGE>
ACCEPTED and AGREED to this
13th day of September, 1995.
SELLER
MARIETTA TOWER PARTNERS, an
Illinois general partnership
By: BALCOR EQUITY PARTNERS-XVIII, an
Illinois general partnership, its general partner
By: BALCOR EQUITY PARTNERS-XVIII, INC.,
a general partner
By: /s/Philip Schechter
----------------------------
Name: Philip Schechter
--------------------------
Title: Authorized agent
-------------------------
PURCHASER
TAURUS INVESTMENT GROUP, INC., a
Florida corporation
By: /s/Steve G. Munson
-------------------------
Name: Steve G. Munson
-----------------------
Title: Vice President
----------------------
