SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) July 8, 1994
BALCOR REALTY INVESTORS 84-SERIES II,
A REAL ESTATE LIMITED PARTNERSHIP
Exact Name of Registrant
Maryland 0-13334
State or other jurisdiction Commission File Number
of organization
Balcor Plaza
4849 Golf Road
Skokie, Illinois 36-3223939
Address of principal I.R.S. Employer
executive offices Identification
60077
Zip Code
Registrant's telephone number, including area code:
(708) 677-2900
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Ridgepoint Green Apartments and Ridgepoint Way Apartments
In 1983 the Partnership acquired the Ridgepoint Green and Ridgepoint Way
apartment complexes in Dallas, Texas (together, the "Properties"), utilizing
$4,659,620 and $5,007,315 of offering proceeds, respectively. The Partnership
acquired the Properties subject to first mortgage loans from an unaffiliated
lender in the then outstanding amounts of $8,370,000 and $9,118,000,
respectively.
Pursuant to plans of reorganization ("Plans") confirmed by the Bankruptcy
Court in March 1994 in the proceedings under Chapter 11 of the U.S. Bankruptcy
Code regarding the Properties, the Partnership became obligated to sell the
Properties on or before October 1, 1995 on certain specified terms.
On July 8, 1994, the Partnership executed an Agreement of Sale ("Agreement") to
sell the Properties to an unaffiliated party, Berkshire Realty Company, Inc., a
Delaware corporation, ("Purchaser") for a sale price of $17,790,715. The
Purchaser deposited $250,000 into an escrow account as earnest money, with the
remaining $17,540,715, plus or minus prorations, payable upon closing,
scheduled for August 17, 1994 ("Closing"). Pursuant to the Plans, the
Partnership will pay approximately $16,637,000 in full satisfaction of the
first mortgage loans collateralized by the Properties, which represents a
discount of approximately $2,558,000 from the amounts due under the loans. The
Partnership will pay approximately $178,000 to an unaffiliated party as a
brokerage commission and will receive the remaining sale proceeds of
approximately $976,000, less closing costs. Pursuant to the Agreement, the
Partnership may not make any distributions of the sale proceeds to its partners
until 90 days after Closing.
Neither the General Partner nor its affiliates will receive a commission in
connection with the sale of the Property.
Two apartment complexes adjacent to the Properties owned by an affiliate of the
General Partner are under contract to be sold to the Purchaser and are expected
to be sold simultaneous with the Properties. A default under either contract
is a default under the other contract. If the contract for the adjacent
properties is terminated by the Purchaser, the Partnership and the Purchaser
each have the right to terminate the Agreement.
The Closing of the sale of the Properties 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 that the
sale of the Properties may not occur.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(A) FINANCIAL STATEMENTS:
None
(B) PRO FORMA FINANCIAL INFORMATION:
None
(C) EXHIBITS:
(2) Agreement of Sale relating to the sale of Ridgepoint Green and
Ridgepoint Way apartment complexes, Dallas, Texas.
No information is required under Items 1, 3, 4, 5, 6 and 8 and these items
have, therefore, been omitted.
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
BALCOR REALTY INVESTORS 84-SERIES II,
A REAL ESTATE LIMITED PARTNERSHIP
By: Balcor Partners-84 II, Inc.,
general partner
By: \s\ Jerry M. Ogle
-----------------------------
Jerry M. Ogle, Vice President
and Secretary
Dated: July 21, 1994
EXHIBIT (2)
AGREEMENT OF SALE
THIS AGREEMENT is entered into as of the 7th day of July, 1994, by and between
BERKSHIRE REALTY COMPANY, INC., a Delaware corporation ("Purchaser") and
RIDGEPOINT GREEN INVESTORS, an Illinois limited partnership ("Green"), and
RIDGEPOINT WAY INVESTORS, an Illinois limited partnership ("Way"). Green and
Way are sometimes hereinafter referred to singularly as the "Seller" and
collectively as the "Sellers".
WITNESSETH:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Sellers agree to sell
at the price of Seventeen Million Seven Hundred Ninety Thousand Seven Hundred
Fifteen and No/100 Dollars ($17,790,715.00), the following:
a. those certain tracts or parcels of land located in Dallas County,
Texas, more particularly described on Exhibits A-1 (Ridgepoint Green Apts.
"RG") and A-2 (Ridgepoint Way Apts. "RW") attached hereto (collectively, the
"Land");
b. the 284 unit apartment complex, commonly known as Ridgepoint Green
Apartments, which contains related improvements, facilities, amenities,
structures, driveways, walkways, plumbing and heating pipes, culverts, and
mains;
c. the 310 unit apartment complex, commonly known as Ridgepoint Way
Apartments, which contains related improvements, facilities, amenities,
structures, driveways, walkways, plumbing and heating pipes, culverts, and
mains;
The apartment projects identified in subsections b and c above are
collectively referred to as the "Improvements";
d. all right, title and interest of Sellers 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 Sellers in and to any
awards for damage thereto by reason of a change of grade thereof;
e. the accessions, appurtenant rights, privileges, appurtenances and all
the estate and rights of Sellers 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), (c) and (d);
f. the fixtures, equipment and other personal property listed on
Exhibits B-1 and B-2 attached hereto and all other fixtures, machinery,
supplies, equipment and, except for the computer hardware and computer
software, the other personal property owned by Sellers and located on or in or
used solely in connection with the Land and Improvements (collectively, the
"Personal Property"); and
g. all of Sellers' interest in any intangible property now or hereafter,
owned by the Sellers and used solely in connection with the 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 Properties, as hereinafter defined.
All of the items described in subparagraphs (a), (b), (c), (d), (e), (f)
and (g) above are singularly referred to as the "Property" and collectively as
the "Properties".
2. PURCHASE PRICE. The Purchase Price shall be paid as follows:
a. Upon the execution of this Agreement, the sum of $250,000.00
("Earnest Money") to be held in escrow by and in accordance with the provision
of the Escrow Agreement ("Escrow Agreement") attached hereto as Exhibit C;
b. On the Closing Date, $17,790,7l5.00 (inclusive of all Earnest Money)
adjusted in accordance with the prorations by federally wired "immediately
available" funds.
3. ALLOCATIONS OF PURCHASE PRICE. The Purchase Price shall be allocated as
follows:
a. Ridgepoint Green: $8,505,998.00
b. Ridgepoint Way: $9,284,717.00_
4. TITLE COMMITMENT AND SURVEY.
a. Attached hereto as Exhibits D-1 (for RG) and D-2 (for RW) are title
commitments ("Title Commitments") for an owner's standard coverage title
insurance policy for each Property ("Title Policy") issued by Chicago Title
Insurance Company ("Title Insurer"). The Title Policy will be for both
Properties and will be in the amount of the Purchase Price, subject only to
real estate taxes not yet due and payable, and the special title exceptions set
forth in Exhibits E-1 (for RG) and E-2 (for RW) attached hereto. All of the
above are herein referred to as the "Permitted Exceptions". The Title
Commitments shall be conclusive evidence of good title as therein shown as to
all matters insured by the policy, subject only to the exceptions therein
stated. On the Closing Date, as a condition of Purchaser's performance,
Sellers shall cause the Title Insurer to issue one Title Policy for both
Properties in conformity with the Title Commitments. Sellers and Purchaser
shall equally share the cost of the Title Policy. Purchaser shall pay for the
additional cost of deletion of the survey exception and for the issuance of a
separate title insurance policy for each Property, if required by Purchaser.
Sellers shall execute the affidavit required by the Title Insurer to delete the
mechanic lien exception and revise the "parties in possession" exception to
"rights of tenants in possession under unrecorded leases".
b. Purchaser acknowledges receipt of the following surveys ("Surveys"):
Ridgepoint Green Survey prepared by Huitt-Zollars Inc. dated December, 1985;
and Ridgepoint Way Survey prepared by Huitt-Zollars Inc. dated May, 1985.
Prior to the Closing, Sellers will have the Surveys updated and certified to
the Purchaser and the Title Insurer. Sellers and Purchaser shall equally share
the cost of the updated Surveys. However, if Purchaser requires any additional
survey work, Purchaser shall pay the cost of such additional work. If either
of the updated Surveys discloses matters which are not reflected on the
original Surveys and such matters materially affect the title to the Property
or Purchaser's use of the Property and are not acceptable to Purchaser, in its
reasonable judgment ("Survey Defects"), then upon notice delivered to Sellers
by Purchaser within five (5) days after receipt of the updated Survey which
contains Survey Defects, the Seller of that Property shall either cause the
Survey Defects to be removed from the updated Survey or cause the Title Insurer
to insure against loss or damage resulting from the Survey Defects ("Title
Indemnity"). If the Seller of the Property containing Survey Defects is
unwilling to (i) have the Survey Defects removed from the updated Survey or
(ii) cause the Title Insurer to issue a Title Indemnity to Purchaser and its
successors, assigns and transferees within five (5) days after receipt of
notice from Purchaser of the Survey Defects, then Purchaser shall have the
right to elect to terminate this Agreement. Purchaser shall notify the Sellers
of its election within three (3) days after receipt of notice that the Survey
Defects will not be removed or that the Title Insurer will not issue the Title
Indemnity. If Purchaser fails to make the election within the aforesaid three
(3) days, then it shall be conclusively presumed that Purchaser has elected to
take title to the Property subject to the Survey Defects.
5. CONDITION OF TITLE/CONVEYANCE. Each of the Sellers agrees to convey fee
simple title to its Property by Special Warranty Deed ("Deed") in recordable
form subject only to the Permitted Exceptions that affect each Property. If a
Seller is unable to convey title to its Property subject only to the Permitted
Exceptions because of the existence of an additional title exception
("Unpermitted Exception"), then Purchaser can elect to take title to that
Property subject to the Unpermitted Exception or terminate this Agreement.
Notwithstanding the aforesaid, all liens of a definite or ascertainable amount
shall either be satisfied by Sellers from the proceeds of the cash due to
Sellers at Closing or Sellers can elect to obtain a Title Indemnity insuring
Purchaser and its successors, assigns and transferees against any claim that
may be asserted as a result of such lien. If Purchaser elects to terminate
this Agreement, then the Earnest Money plus all accrued interest shall be
delivered to the Purchaser and, subject to the survival provisions of Paragraph
17 herein, neither party shall have any further liability hereunder.
6. PAYMENT OF CLOSING COSTS. Purchaser and Sellers 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.
7. DAMAGE, CASUALTY AND CONDEMNATION.
a. Until the Closing Date, each Seller shall maintain its present
insurance on its Property. If a 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 the Seller of that Property shall repair such damage in
an expeditious manner and the Closing shall be extended until the repairs are
complete to Purchaser's reasonable satisfaction. The 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
that Property and in such event, unless that 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 the Sellers served within twenty (20) business days of
such casualty.
b. If condemnation proceedings ("Proceedings") have been instituted
against a Property, then Purchaser can elect to either take that Property
subject to the Proceedings and an assignment of the Seller's interest in the
Proceedings or terminate this Agreement. If Purchaser elects to terminate this
Agreement, it shall be by notice to the Sellers within five (5) days after the
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 the
Purchaser and, subject to the survival provisions of Paragraph 17 herein,
neither party shall have any further liability hereunder.
8. AS-IS CONDITION.
a. Purchaser acknowledges and agrees that it will be purchasing the
Properties based solely upon its inspection and investigations of the
Properties and that Purchaser will be purchasing the Properties "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 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 of
the Sellers 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 any of the Properties, including, but not limited to,
the condition of the land or any Improvements, the existence or nonexistence of
asbestos, toxic waste or any hazardous material, the tenants of the Properties
or the leases affecting the Properties, economic projections or market studies
concerning the Property, any development rights, taxes, bonds, covenants,
conditions and restrictions affecting the Properties, water or water rights,
topography, drainage, soil, subsoil of the Properties, the utilities serving
the Properties or any zoning, environmental or building laws, rules or
regulations affecting the Properties. Sellers make no representation that the
Properties comply with Title III of the Americans With Disabilities Act or any
fire codes or building codes. Purchaser hereby releases each Seller from any
and all liability in connection with any claims which Purchaser may have
against such Seller, and Purchaser hereby agrees not to assert any claims, for
contribution, cost recovery or otherwise, against either Seller, relating
directly or indirectly to the existence of asbestos or hazardous materials or
substances on, or environmental conditions of, the Properties. 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 vehicle fuel and
(E) asbestos.
b. Sellers have provided to Purchaser certain unaudited historical
financial information regarding the Properties relating to certain periods of
time in which each Seller has owned its Property. Sellers and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Sellers make 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 Properties, it being acknowledged by Purchaser that each Seller's operation
of its 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 Properties and releases each Seller from any liability with
respect to such historical information.
9. CLOSING. The closing of this transaction shall be on August 17, 1994
("Closing Date"), at the office of the Title Insurer in Houston, Texas, at
which time the Sellers shall deliver possession of the Properties to Purchaser.
10. CLOSING DOCUMENTS.
a. On the Closing Date, Purchaser shall deliver to the Sellers an
executed closing statement, the balance of the Purchase Price, 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, the Sellers shall deliver, or cause to be
delivered, the following to the Purchaser: possession of the Properties; the
executed Deeds (in the form of Exhibit F attached hereto) subject to the
Permitted Exceptions; the Title Policy or Title Policies (or "marked-up
commitments"); terminations of any management agreements affecting the
Properties; an inventory of the Personal Property for each Property and Bills
of Sale for the same (in the form of Exhibit G attached hereto); executed
closing statements; executed assignments and assumptions of all service
contracts (in the form of Exhibit H attached hereto); executed copies of all
service contracts which are in each Seller's possession; executed assignments
and assumptions of all leases and security deposits (in the form of Exhibit I
attached hereto); the original executed leases which shall be delivered at each
Property; updated rent rolls; notices to the tenants of each 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 affidavits (in the form of
Exhibit K attached hereto); assignments of all warranties (in the form of
Exhibit L attached hereto); assignments of intangibles (in the form of Exhibit
M attached hereto); bringdown certificates re: representations and warranties
(in the form of Exhibit N attached hereto); certificates of occupancy for each
apartment unit (or building, as applicable) that are in Sellers' possession;
plans and specifications, if any, in Sellers' 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 THE PURCHASER UNDER THE
PROVISIONS OF THIS AGREEMENT, THE SELLERS SHALL RETAIN ALL OF THE EARNEST MONEY
AND THE INTEREST THEREON AS SELLERS' SOLE RIGHT TO DAMAGES OR ANY OTHER REMEDY.
THE PARTIES HAVE AGREED THAT SELLERS' 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 SELLERS' DAMAGES.
12. SELLERS' 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. Rents (exclusive of delinquent rents, but including
prepaid rents); refundable security deposits (which will be assigned to and
assumed by Purchaser and credited to Purchaser at Closing); water and other
utility charges; fuels; prepaid operating expenses for the month in which the
Closing occurs and for future months in an amount not to exceed $10,000.00 per
Property; 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 Properties and shall bear the burden of
all of the operating expenses of the Properties, 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 for a
Property is in arrears for thirty (30) days or less, then the first rent
collected for that 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
that Property by Purchaser shall first be applied 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. The Purchaser shall have the right to assign its interest in
this Agreement, provided such assignment is effected at least ten (10) days
prior to the Closing Date.
16. BROKER. The parties hereto acknowledge that CB Commercial Real Estate
Group Inc. ("Broker") is the only real estate broker involved in this
transaction. Sellers agree to pay Broker a commission or fee ("Fee") pursuant
to a listing agreement between Sellers 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
Sellers. The foregoing does not apply to any fee which may be paid by Sellers
to any affiliate of either of the Sellers as a result of this transaction.
Purchaser agrees to indemnify, defend and hold harmless the Sellers and any
partner, affiliate, parent of the Sellers, and all shareholders, employees,
officers and directors of the Sellers or Sellers' 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 the 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. Sellers do 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 PROPERTIES.
a. Purchaser shall have the right to visit the Property during normal
business hours. Purchaser, its engineers, architects, employees, contractors
and agents shall maintain public 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 Sellers
harmless from any and all loss, costs, including attorneys' fees, liability or
damages which Sellers may incur or suffer as a result of Purchaser's conducting
its 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 each 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 Properties. Purchaser further agrees to restore any damage to any Property
which may arise as a result of Purchaser's inspection of the Properties.
c. Purchaser's obligations to indemnify, defend and hold each 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. SELLERS' OBLIGATIONS PRIOR TO CLOSING. Sellers covenant that between the
date of this Agreement and the Closing Date:
a. Sellers 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. Sellers shall not modify nor amend any Service Contract (as
hereinafter defined) nor enter into any new service contract for either
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 either 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 hardware
and computer software, maintenance supplies and other items that may be
depleted in the ordinary course of Sellers' business.
d. Sellers shall not withdraw, settle or otherwise compromise any
protest or reduction proceeding affecting real estate taxes assessed against
either 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 the 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. Sellers shall allow Purchaser or Purchaser's representatives access
to the Properties, the leases and other documents required to be delivered
under this Agreement upon reasonable prior notice, during Sellers' regular
business hours, and provided same shall not unreasonably interfere with
Sellers' ordinary course of business.
f. Whenever Purchaser's consent is required, Purchaser shall not
unreasonably withhold its consent or unreasonably delay in giving its consent.
If Purchaser fails to respond to a written request within three (3) business
days after receipt of the request, then Purchaser shall be deemed to have given
its consent.
19. SELLERS' REPRESENTATIONS AND WARRANTIES AND LIABILITY.
a. Any reference herein to the Sellers' knowledge, representation,
warranty or notice of any matter or thing, shall only mean such knowledge or
notice that has actually been received by Phillip Schechter. Any
representation or warranty of the Sellers is based upon those matters of which
Phillip Schechter has actual knowledge after having made inquiry by delivering
a copy of the representations enumerated in this Section 19 to the resident
manager of each of the Properties. Any knowledge or notice given, had or
received by any of Sellers' agents, servants or employees shall not be imputed
to such Seller or the individual partners or the general partner of such
Seller.
b. Subject to the limitations set forth in subparagraph a above, each
Seller hereby makes the following representations and warranties, all of which
are made to the best of such Seller's knowledge, which shall survive the
Closing and delivery of the Deeds for a period of ninety (90) days:
i. The present use and occupancy of each Seller's Property conforms with
applicable building and zoning laws and neither Seller has received any written
notice that any such laws, rules or regulations are being violated.
ii. The rent rolls ("Rent Roll") which each Seller has submitted to the
Purchaser and updated as of the Closing Date are true and accurate.
iii. Each Seller has no knowledge of any pending or threatened litigation,
claim, cause of action or administrative proceeding concerning its Property.
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 (the "Leases") described in the Rent Rolls
attached hereto as Exhibits O-1 (for RG) and O-2 (for RW). The Rent Rolls are
true, accurate and complete as of the date hereof. Except as otherwise
specifically set forth in the Rent Rolls 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 Rolls or the lease files at the Properties, 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 Properties;
(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;
(4) except as set forth on the Rent Rolls, no tenant is entitled to
rental concessions or abatements for any period subsequent to the Closing Date;
(5) Sellers have neither sent written notice to any tenant of the
Properties, nor received any written notice from any such tenant, claiming that
such tenant, or such Seller, as the case may be, is in default, which default
remains uncured other than as shown on the Rent Rolls attached hereto;
(6) no action or proceeding instituted against a Seller by any tenant of
any unit in the Properties is presently pending;
(7) there are no security deposits or other deposits other than those set
forth in the Rent Rolls;
(8) no rent has been paid more than thirty (30) days in advance under any
lease of any unit in the Properties other than as shown on the Rent Rolls;
v. The apartment units in the Improvements are not subject to, nor does
either 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. Exhibits P-1 (for RG) and P-2 (for RW) attached hereto lists all services,
maintenance, and supply contracts (collectively, "Service Contracts") affecting
the construction, use, ownership, maintenance and/or operation of the
Properties, and the information set forth therein is accurate and complete.
vii. Each 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 each Seller, as its
pertains to such 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 Sellers or the taking by Sellers of any action contemplated by this
Agreement.
viii. Sellers have 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 Properties 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 Properties or any part thereof; or
(3) from any insurance company or bonding company of any defects or
inadequacies in the Properties 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 any of either
of the Properties or any part thereof.
If any such notice is received prior to the Closing, the Seller receiving
the notice 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 either of
the Properties which are unpaid, including, without limitation, those for
construction of sewer and water lines, streets, sidewalks and curbs.
x. All of the Documents delivered by each Seller to Purchaser pursuant to
Paragraph 17 are true, accurate and complete in all material respects.
xi. Neither of the Sellers has generated, stored nor released any Hazardous
Materials or Hazardous Substances upon or from the Property owned by such
Seller. Neither Seller has received any notice from any governmental authority
regarding the presence or alleged presence of any Hazardous Materials or
Hazardous Substances on its Property.
xii. Sellers have not entered into any management contracts, employment
contracts or labor union contracts and have not established any retirement,
pension or profit sharing plans relating to the operation or maintenance of the
Properties which shall survive the Closing or for which Purchaser shall have
any liability or obligation.
xiii. Sellers have 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 Properties.
xiv. There are no pending insolvency proceedings of any nature presently
existing against the Sellers or the Properties and this shall be true as of the
Closing Date.
xv. Except for claims, if any, which are covered by Sellers' liability
insurance, there is no litigation pending against Sellers or the Properties.
20. LIMITATION OF SELLERS' LIABILITY. No general or limited partner of any
Seller, nor any of its respective beneficiaries, shareholders, partners,
officers, agents, employees, heirs, successors or assigns shall have any
personal liability of any kind or nature for or by reason of any matter or
thing whatsoever under, in connection with, arising out of or in any way
related to this Agreement and the 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.
21. CROSS DEFAULT/OTHER AGREEMENT. Simultaneously with the execution of this
Agreement, the Purchaser has entered into another agreement ("Other Agreement")
with affiliates of Sellers to acquire two additional properties. Each party
hereto acknowledges that it would not have entered into this Agreement if
Purchaser and the sellers under the Other Agreement had not executed the Other
Agreement. A default by the Purchaser or a seller under the Other Agreement
shall be a default under this Agreement. If Purchaser does not consummate the
acquisition of the properties described in the Other Agreement because
Purchaser has exercised a right of termination under the Other Agreement, then
either party shall have the right to terminate this Agreement. In such event,
unless this Agreement is terminated because of a default by Purchaser, the
Earnest Money plus the interest accrued thereon shall be returned to Purchaser.
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.
23. MISCELLANEOUS.
a. Notwithstanding the foregoing, Seller agrees that Seller shall not
make any distribution to any partner of Seller for a period of ninety (90) days
after the Closing; provided, further, if Purchaser makes a claim against
Seller, within such ninety day period, based on a breach of warranty or
representation contained in Paragraph 19 hereof, Seller shall not make
distributions to any partners of Seller thereafter, until a final resolution of
such claim, which distributions in the aggregate shall cause the assets of
Seller to be less than the amount of damages claimed by Purchaser as a result
of such breach of warranty or representation.
b. On the Closing Date all apartments that were vacated prior to
August 1, 1994 shall be in a "Rent Ready Condition". Purchaser shall receive a
credit against the cash due at Closing in the amount of $200.00 for each
apartment 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 SELLERS: c/o The Balcor Company
4849 West Golf Road
Skokie, Illinois 60077
Attn: Ilona Adams
with copies to: The Balcor Company
4849 West Golf Road
Skokie, Illinois 60077
Attn: Al Lieberman
708/677-2900
708/982-4027 (FAX)
and
Morton M. Poznak
Schwartz & Freeman
Suite 1900
401 North Michigan Avenue
Chicago, Illinois 60611
312/222-0800
312/222-0818 (FAX)
TO PURCHASER: Berkshire Group
270 Interstate North Parkway
Suite 250
Atlanta, Georgia 30339
Attn: Richard B. Willingham
404/955-7527
404/955-9559 (FAX)
with copies to: Joel H. Sirkin
Hale & Dorr
60 State Street
Boston, Massachusetts 02109
617/526-6279
617/526-5000 (FAX)
and
Scott D. Spelfogel
Berkshire Group
470 Atlantic Avenue
Boston, Massachusetts 02210
617/423-2233
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 Sellers for execution, accompanied with the Earnest Money
payable to the Escrow Agent. Sellers 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 the Purchaser and the Sellers.
27. GOVERNING LAW. The provisions of this Agreement shall be governed by the
laws of the State of Texas.
28. ENTIRE AGREEMENT. Except for the Letter Agreement regarding the Residue
Tract of even date herewith, the terms of which are incorporated herein by
reference, 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.
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.
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date set forth above.
Executed by Purchaser on PURCHASER:
July 7, 1994.
BERKSHIRE REALTY COMPANY, INC., a
Delaware corporation
By: /s/ Richard B. Willingham
---------------------------
Richard B. Willingham
duly authorized agent
Executed by Sellers on SELLERS:
July 8, 1994. (as to Ridgepoint Green):
RIDGEPOINT GREEN INVESTORS, an Illinois
limited partnership
By: Balcor Partners-84 II, Inc., a
Delaware corporation
By:/s/ Phillip Schechter
----------------------------
Authorized agent
(as to Ridgepoint Way):
RIDGEPOINT WAY INVESTORS, an Illinois
limited partnership
By: Balcor Partners-84 II, Inc., a
Delaware corporation
By:/s/ Phillip Schechter
---------------------------
Authorized agent
Ridgepoint Green
Ridgepoint Way
CB Commercial Real Estate Group Inc. ("Broker") executes this Agreement in
its capacity as a real estate broker and acknowledges that the fee or
commission ("Fee") due to it as a result of the transaction described in this
Agreement is the amount as set forth in the listing agreement between Broker
and Sellers. Broker also acknowledges that payment of the aforesaid Fee is
conditioned upon the Closing and the receipt of the Purchase Price by the
Sellers. Broker agrees to deliver a receipt to the Sellers at the Closing for
the Fee and a release stating that no other fees or commissions are due to
Broker from Sellers or Purchaser.
CB COMMERCIAL REAL ESTATE GROUP
INC.
By:__________________________________
EXHIBITS
A-1 - Ridgepoint Green Legal
A-2 - Ridgepoint Way Legal
B-1 - Ridgepoint Green Personal Property
B-2 - Ridgepoint Way Personal Property
C - Escrow Agreement
D-1 - Ridgepoint Green Title Commitment
D-2 - Ridgepoint Way Title Commitment
E-1 - Ridgepoint Green Title Exceptions
E-2 - Ridgepoint Way Title Exceptions
F - Deeds
G - Bills of Sale
H - Assignments of Service Contracts
I - Assignments of Leases and Security Deposits
J - Notices to Tenants
K - Non-Foreign Affidavits
L - Assignments of Warranties
M - Assignments of Intangibles
N - Certificate re: Representations and Warranties
O-1 - Ridgepoint Green Rent Roll
O-2 - Ridgepoint Way Rent Roll
P-1 - Ridgepoint Green Service Contracts
P-2 - Ridgepoint Way Service Contracts
