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) May 31, 1996
BALCOR REALTY INVESTORS 84-SERIES II
A REAL ESTATE LIMITED PARTNERSHIP
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Exact Name of Registrant
Maryland 0-13334
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State or other jurisdiction Commission file number
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 36-3223939
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Address of principal I.R.S. Employer
executive offices Identification
Number
60015
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Zip Code
Registrant's telephone number, including area code:
(847) 267-1600
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
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a) Ridgetree Apartments, Phase II
As previously reported, on April 23, 1996, the Partnership contracted to sell
Ridgetree Apartments, Phase II, Dallas, Texas to an unaffiliated party, ERP
Operating Limited Partnership, for a sale price of $9,200,000. The sale closed
on June 3, 1996. From the proceeds of the sale, the Partnership paid the
outstanding balance of the first and second mortgage loans totaling $7,798,124,
legal fees of approximately $15,000 and a $92,000 fee to an affiliate of the
third party providing property management services for the property for
services rendered in connection with the sale. Pursuant to the agreement of
sale, the purchaser paid all closing costs relating to the sale. The
Partnership received approximately $1,295,000 representing the remaining
proceeds. Of such proceeds, $500,000 is being retained by the Partnership
and will not be available until 120 days after closing. Neither the General
Partner nor its affiliates received a brokerage commission in connection with
the sale of the property. The General Partner will be reimbursed by the
Partnership for its actual expenses incurred in connection with the sale.
b) Rosehill Pointe Apartments
As previously reported, on April 23, 1996, the joint venture consisting of the
Partnership and an affiliate which owned the Rosehill Pointe Apartments,
Lenexa, Kansas, contracted to sell the property to an unaffiliated party, ERP
Operating Limited Partnership, for a sale price of $20,700,000. The sale
closed on June 7, 1996. From the proceeds of the sale, the Joint Venture paid
the outstanding balance of the first and second mortgage loans totaling
$15,537,677, legal fees of approximately $15,000 and a $155,250 fee to an
affiliate of the third party providing property management services for the
property for services rendered in connection with the sale. Pursuant to the
agreement of sale, the purchaser paid all closing costs relating to the sale.
The Joint Venture received approximately $4,992,000 representing the remaining
proceeds. Of such proceeds, $500,000 is being retained by the Joint Venture
and will not be available until 120 days after closing. Neither the General
Partner nor its affiliates received a brokerage commission in connection with
the sale of the property. The General Partner will be reimbursed by the Joint
Venture for its actual expenses incurred in connection with the sale. The
sales proceeds will be distributed between the Partnership and the joint
venture partner in accordance with their joint venture interests of
approximately 61.62% and 38.38%, respectively. The property will receive
approximately $3,076,000 of proceeds.
<PAGE>
ITEM 5. OTHER INFORMATION
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Meadowcreek Apartments
In 1984, Meadowcreek Apartments, Pineville, North Carolina, was acquired by a
joint venture (the "Joint Venture") in which the Partnership the general
partner and the seller of the property (the "JV Partner") is the limited
partner. The Partnership and the JV Partner hold interests in the Joint
Venture of 80% and 20%, respectively. The Partnership contributed
approximately $3,483,000 towards the purchase of the property. The property
was acquired subject to first mortgage financing of approximately $6,335,000.
In 1988, the first mortgage loan was refinanced with a new loan in the amount
of $7,180,000. The Partnership received excess refinancing proceeds of
approximately $400,000 after closing costs and escrows. In 1991, pursuant to
a loan modification, the Partnership made a $1,855,000 principal payment on
the loan, which was funded by a loan from the General Partner. The first
mortgage loan was refinanced in May 1993 with a new mortgage loan in the
amount of $5,200,000.
On May 31, 1996, the Joint Venture sold the property for a sale price of
$11,100,000 to an unaffiliated party, Cornerstone Realty Group Incorporated, a
Virginia corporation. From the proceeds of the sale, the Joint Venture paid
the outstanding balance of the first mortgage loan of $5,076,321, selling costs
of $134,546 and $222,000 to an unaffiliated party as a brokerage commission.
The Joint Venture received approximately $5,667,000 representing the remaining
proceeds. Neither the General Partner nor any of its affiliates received a
brokerage commission in connection with the sale of the property. The General
Partner will be reimbursed by the Joint Venture for its actual expenses
incurred in connection with the sale. In accordance with the terms of the
Joint Venture agreement, all net sale proceeds will be paid to the Partnership.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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(a) FINANCIAL STATEMENTS AND EXHIBITS:
None
(B) PRO FORMA FINANCIAL INFORMATION:
None
(C) EXHIBITS:
(2) (a)(i) Master Amendment and Agreement dated May 22, 1996
relating to the sale of the Ridgetree apartment complex,
Phase II, Dallas, Texas, and the Rosehill Pointe
apartment complex, Lenexa, Kansas.
(a)(ii) Master Amendment and Agreement #2 dated May 22, 1996
relating to the sale of the Ridgetree apartment complex,
Phase II, Dallas, Texas and the Rosehill Pointe apartment
complex, Lenexa, Kansas.
(99) Agreement of Sale and attachment thereto relating to the sale
of Meadowcreek Apartments, Pineville, North Carolina.
No information is required under Items 1, 3, 4, 6 and 8 and these items
have, therefore, been omitted.
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 REALTY INVESTORS 84-SERIES II,
A REAL ESTATE LIMITED PARTNERSHIP
By: Balcor Partners-84 II, Inc.,a Delaware
corporation, its general partner
By: /s/Jerry M. Ogle
------------------------------------
Jerry M. Ogle, Vice President
and Secretary
Dated: June 20, 1996
<PAGE>
MASTER AMENDMENT AND AGREEMENT
This Master Amendment and Agreement (this "Agreement") is entered into as
of this 22nd day of May, 1996 by and among the selling entities set forth on
the signature pages attached hereto (each entity being referred to herein as a
"Seller" and collectively as the "Sellers") and ERP Operating Limited
Partnership, an Illinois limited partnership ("Purchaser").
R E C I T A L S
A. Each Seller and the Purchaser have entered into an Agreement of Sale
dated as of April 23, 1996 (herein called the "Purchase Agreement") for the
sale by such Seller to Purchaser of certain property described therein. All
capitalized terms which are used herein but which are not otherwise defined
herein shall have the meaning ascribed to such term in the applicable Purchase
Agreement.
B. Each Purchase Agreement provides that during the Approval Period,
Purchaser shall have the right to review the status of title of the Property
(including, determining what endorsements, if any, the Title Insurer will make
available to Purchaser).
C. Each Purchase Agreement further provides that each Seller will
deliver to Purchaser an Updated Survey and Purchaser shall have ten (10) days
from the date of receipt of the Updated Survey to approve the Updated Survey.
D. Purchaser has reviewed the status of title for each Property and has
reviewed certain of the Updated Surveys; provided, however, Purchaser and
Seller have not yet agreed upon "Permitted Exceptions" for each Property.
E. Purchaser and Seller desire to amend each Purchase Agreement to give
Purchaser and Seller until May 23, 1996 to agree upon Permitted Exceptions for
each Property.
NOW, THEREFORE, for and in consideration of the sum of Ten Dollars
($10.00) and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, each Seller (with respect to the Purchase
Agreement to which such Seller is a party) and the Purchaser, hereby agree as
follows:
<PAGE>
A G R E E M E N T
1. RECITALS. The recitals set forth above are hereby incorporated
herein by reference as if same were fully set forth herein.
2. AMENDMENT. Purchaser and Seller hereby agree that Purchaser and
Seller shall have until the later of: (i) the expiration of the Approval Period
(as same may have been extended) or (ii) May 23, 1996 (the "Deadline Date") to
agree upon Permitted Exceptions for each Purchase Agreement (subject to
Purchaser's additional right to have 10 days to review Updated Surveys). If
Purchaser and Seller are unable to agree upon Permitted Exceptions on or prior
to the Deadline Date, then Seller shall have the right to elect to either
terminate the applicable Purchase Agreement, in which case the applicable
Earnest Money, including interest thereon, shall be returned to Purchaser
immediately following the applicable Seller's receipt of the Reports or (ii)
agree to cure the title objections identified by Purchaser as being
problematic, which cure may be effectuated by causing the Title Insurer, at
such Seller's expense, to insure over any objection, if applicable.
3. Miscellaneous
A. Except as modified herein, each Purchase Agreement shall remain
unmodified and in full force and effect.
B. This Amendment may be executed in any number of counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date and year first above written.
[See Attached Signature Blocks]
<PAGE>
PURCHASER
ERP OPERATING LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Equity Residential Properties Trust,
a Maryland real estate investment
trust
By: /s/Daniel L. Baskes
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Name: Daniel L. Baskes
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Title: Attorney
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<PAGE>
Rosehill Pointe Apartments
Rosehill Partners, an Illinois joint venture
By: Balcor Realty Investors 84-Series II A Real
Estate Limited Partnership, a Maryland
partnership, a joint venture partner
By: Balcor Partners-84II, Inc., a Delaware
corporation, its general partner
By: /s/Andrew Small - Attorney
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Name: Andrew Small
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Its: Attorney
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<PAGE>
Ridgetree II Apartments
Ridgetree Investors, an Illinois limited
partnership
By: Balcor Partners-84II, Inc., a Delaware
corporation, its general partner
By: /s/Andrew Small - Attorney
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Name: Andrew Small
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Its: Attorney
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<PAGE>
MASTER AMENDMENT AND AGREEMENT #2
This Amendment and Agreement #2 (this "Agreement") is entered into as of
this 22nd day of May, 1996 by and among the selling entities set forth on the
signature pages attached hereto (each entity being referred to herein as a
"Seller" and collectively as the "Sellers") and ERP Operating Limited
Partnership, an Illinois limited partnership ("Purchaser").
R E C I T A L S
A. Each Seller and the Purchaser have entered into an Agreement of Sale
dated as of April 23, 1996 (herein called the "Purchase Agreement") for the
sale by such Seller to Purchaser of certain property described therein. All
capitalized terms which are used herein but which are not otherwise defined
herein shall have the meaning ascribed to such terms in the applicable Purchase
Agreement.
B. Each Purchase Agreement provides that during the Approval Period,
Purchaser shall have the right to review the status of title of the Property
(including, determining what endorsements, if any, the Title Insurer will make
available to Purchaser).
C. Each Purchase Agreement further provides that each Seller will
deliver to Purchaser an Updated Survey and Purchaser shall have ten (10) days
from the date of receipt of the Updated Survey to approve the Updated Survey.
D. Purchaser has reviewed the status of title for each Property and has
reviewed certain of the Updated Surveys.
E. The Purchase Agreements further provide that promptly following the
Approval Period, Purchaser and each Seller will identify the exceptions to
title which have been agreed to by Purchaser and such Seller.
F. The parties desire to enter into this Agreement to identify the
"Permitted Exceptions" for each Property and to set forth the parties agreement
with respect to title and survey matters as of the date hereof and to also set
forth certain additional agreements of the parties.
NOW, THEREFORE, for and in consideration of the sum of Ten Dollars
($10.00) and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, each Seller (with respect to the Purchase
Agreement to which such Seller is a party) and the Purchaser, hereby agree as
follows:
<PAGE>
A G R E E M E N T
1. Surveys.
A. As of the date hereof, Purchaser has not yet received and/or
reviewed the Updated Surveys for the following properties:
(1) Briarwood Place
(2) Canyon Sands
(3) Desert Sands
(4) Sunnyoak Village
(5) Rosehill Pointe
(6) Post Place
In accordance with each Purchase Agreement, Purchaser shall have ten (10)
days following Purchaser's receipt of each Updated Survey to approve or
disapprove of the applicable Updated Survey, all as more specifically set forth
in each Purchase Agreement. If the Updated Survey is approved by Purchaser,
all items disclosed by the Updated Survey shall be "Permitted Exceptions".
B. In addition, Purchaser has reviewed and approved of the Updated
Surveys for the following properties.
(1) Brierwood Apts.
(2) Country Ridge
(3) Forest Ridge I
(4) Forest Ridge II
(5) Lakeville
(6) Mallard Cove
(7) Park Place I
(8) Park Place II
(9) Ridgetree I
(10) Ridgetree II
Each Seller (solely with respect to the Property owned by such Seller)
hereby agrees to reasonably assist Purchaser in causing the surveyor to correct
certain clean up items identified by Purchaser during its review of the Survey.
2. Title Matters. Purchaser has reviewed the title commitments for all
of the properties. Attached hereto as Exhibit A is a list of "Permitted
Exceptions" for each Property. Notwithstanding anything contained in this
Agreement or the exhibits hereto to the contrary, any Permitted Exceptions set
forth on Exhibit A which have the notation "awaiting survey" written next to
the applicable Permitted Exception (herein called "Survey Based Exceptions")
have not been agreed to by Purchaser because Purchaser has not yet reviewed the
Updated Survey which identifies the location of the applicable Permitted
Exception. Purchaser shall have until 10 days following Purchaser's receipt of
the Updated Survey to advise the applicable Seller, in writing, whether any
Survey Based Exception is or is not reasonably acceptable to Purchaser. If
Purchaser advises the applicable Seller that any Survey Based Exception is not
reasonably acceptable to Purchaser, then the applicable Seller shall have five
(5) business days following receipt of such notice, to elect to either
terminate the applicable Purchase Agreement, in which case the applicable
Earnest Money, including interest thereon, shall be returned to Purchaser
immediately following the applicable Seller's receipt of the Reports or (ii)
<PAGE>
agree to cure the title objections identified by Purchaser, which cure may be
effectuated by causing the Title Insurer, at such Seller's expense, to insure
over any objection, if applicable.
3. Assignment of Partnership Interests. If requested to do so by
Purchaser, each Seller hereby agrees, at no cost or expense to such Seller, to
cooperate in good faith with Purchaser in structuring the conveyance of
Property by the applicable Seller to Purchaser as a conveyance of title to such
Property by the applicable Seller into a partnership or limited liability
company having the applicable Seller and/or affiliates of the applicable Seller
as its sole partners (or members) and then, at closing, assigning to Purchaser
the partnership (or membership) interests in the partnership (or limited
liability company). In such case, the Purchaser hereby agrees to indemnify and
hold the applicable Seller harmless from and against any and all loss, cost,
expense, liability or damage (including reasonable attorneys fees) incurred by
such Seller arising out of Seller's conveyance in and out of such partnership
(or limited liability company) provided that such loss, cost, expense,
liability or damage (including reasonable attorneys fees) would not have been
suffered or incurred by such Seller if such Property had been conveyed directly
by such Seller to Purchaser.
4. Miscellaneous
A. Except as modified herein, each Purchase Agreement shall remain
unmodified and in full force and effect.
B. This Amendment may be executed in any number of counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date and year first above written.
[See Attached Signature Blocks]
<PAGE>
PURCHASER
ERP OPERATING LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Equity Residential Properties Trust,
a Maryland real estate investment
trust
By: /s/Linda A. Menich
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Name: Linda A. Menich
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Title: Assistant Vice President
------------------------------------
<PAGE>
Rosehill Pointe Apartments
Rosehill Partners, an Illinois joint venture
By: Balcor Realty Investors 84-Series II A Real
Estate Limited Partnership, a Maryland
partnership, a joint venture partner
By: Balcor Partners-84II, Inc., a Delaware
corporation, its general partner
By: /s/Alan Lieberman
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Name: Alan Lieberman
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Its: Authorized Agent
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<PAGE>
Ridgetree II Apartments
Ridgetree Investors, an Illinois limited
partnership
By: Balcor Partners-84II, Inc., a Delaware
corporation, its general partner
By: /s/Alan Lieberman
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Name: Alan Lieberman
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Its: Authorized Agent
------------------------------
<PAGE>
AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), is entered into as of the 23rd
day of May, 1996, by and between Cornerstone Realty Group Incorporated, a
Virginia corporation ("Purchaser"), and Meadowcreek Partners Limited
Partnership, an Illinois limited partnership ("Seller").
W I T N E S S E T H:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to sell
at the price of ELEVEN MILLION ONE HUNDRED THOUSAND AND NO/100 Dollars
($11,100,000.00) (the "Purchase Price"), that certain property commonly known
as Meadowcreek Apartments, Charlotte (Pineville), North Carolina, legally
described on Exhibit A attached hereto (the "Property") containing 250 units.
Included in the Purchase Price is all of the personal property set forth on
Exhibit B attached hereto (the "Personal Property").
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
THOUSAND AND NO/100 Dollars ($200,000.00) (the "Earnest Money") to be held in
escrow by and in accordance with the provisions of the Escrow Agreement
("Escrow Agreement") attached hereto as Exhibit C; and
2.2. On the "Closing Date" (hereinafter defined), the balance of the
Purchase Price, adjusted in accordance with the prorations, by federally wired
"immediately available" funds, on or before 12:00 p.m Chicago time.
3. TITLE COMMITMENT AND SURVEY.
3.1. Attached hereto as Exhibit D is a copy of a title commitment for an
owner's standard title insurance policy issued by First American Title
Insurance Company (hereinafter referred to as "Title Insurer") dated March 7,
1996 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, association
assessments, special district taxes and related charges not yet due and
payable; (c) matters shown on the "Existing Survey" (hereinafter defined); (d)
matters caused by the actions of Purchaser; and (e) the title exceptions set
forth in Schedule B of the Title Commitment as Numbers 1 through 6 and 8
through 12 inclusive, 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 to Permitted Exceptions and Unpermitted Exceptions
waived by Purchaser (the "Title Policy"). Purchaser shall pay for all of the
costs of the Title Commitment and Title Policy and the cost of any endorsements
to, or extended coverage on, the Title Policy.
<PAGE>
3.2. Purchaser has received a survey of the Property prepared by Don
Allen & Associates, last updated March 29, 1996 (the "Survey"). Purchaser shall
pay for the costs of 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. Seller shall pay for the costs of the documentary or transfer stamps
to be paid with reference to the "Deed" (hereinafter defined) and Purchaser
shall pay, in addition to the costs set forth in Paragraphs 3.1 and 3.2, all
other stamps, intangible, 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.
4.2. In addition to the costs set forth in Paragraphs 3.1, 3.2 and 4.1,
and excepting Seller's attorney's fees, Purchaser shall pay for all other costs
associated with title insurance, recording and survey.
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 (a "Minor Unpermitted
Exception"), 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, 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 seven (7) days after the expiration of said thirty (30) day
period provided, however, and notwithstanding anything contained herein to the
contrary, if the Unpermitted Exception which gives rise to Purchaser's right to
terminate was recorded against the Property as a result of the affirmative,
willful action of Seller (and not by any unrelated third party) with the
intention to prevent the sale of the Property in accordance with the terms
hereof or if Seller is able to bond over, cure or remove a Minor Unpermitted
Exception for a cost not to exceed $100,000 or the Title Insurer is willing to
insure over a Minor Unpermitted Exception for a cost not to exceed $100,000 in
accordance with the terms hereof and Seller fails to expend said funds in
either case, then Purchaser shall have the additional rights contained in
Paragraph 11 herein. Absent notice from Purchaser to Seller in accordance with
<PAGE>
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 Purchaser's obligation to
indemnify Seller and restore the Property, as more fully set forth in
Paragraph 7.
5.2. Seller agrees to convey fee simple title to the Property to
Purchaser by special warranty deed (the "Deed") in recordable form subject only
to the Permitted Exceptions and any Unpermitted Exceptions waived by Purchaser.
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
6.1. Except as provided in the indemnity provisions contained in
Paragraph 7.1 of this Agreement, Seller shall bear all risk of loss with
respect to the Property up to the earlier of the dates upon which either
possession or title is transferred to Purchaser in accordance with this
Agreement. Notwithstanding the foregoing, in the event of damage to the
Property by fire or other casualty prior to the Closing Date, repair of which
would cost less than or equal to $100,000.00 (as determined by Seller's
insurance adjuster) Purchaser shall not have the right to terminate its
obligations under this Agreement by reason thereof, but Seller shall have the
right to elect to either repair and restore the Property (in which case the
Closing Date shall be extended until completion of such restoration) or to
assign and transfer to Purchaser on the Closing Date all of Seller's right,
title and interest in and to all insurance proceeds paid or payable to Seller
on account of such fire or casualty, and Seller shall pay to Purchaser at the
Closing the amount of Seller's insurance deductible. Within ten (10) days of
such an occurrence, Seller shall notify Purchaser in writing of any such fire
or other casualty and Seller's determination of the cost to repair the damage
caused thereby. In the event of damage to the Property by fire or other
casualty prior to the Closing Date, repair of which would cost in excess of
$100,000.00 (as determined by Seller's insurance adjuster), 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 seven (7)
business days after Purchaser receives written notice of such fire or other
casualty and Seller's determination of the amount of such damages, and upon the
exercise of such option by Purchaser this Agreement shall become null and void,
the Earnest Money deposited by Purchaser shall be returned to Purchaser
together with interest thereon, and neither party shall have any further
liability or obligations hereunder. In the event that Purchaser does not
exercise the option set forth in the preceding sentence, the Closing shall take
place on the Closing Date and Seller shall assign and transfer to Purchaser on
the Closing Date all of Seller's right, title and interest in and to all
insurance proceeds paid or payable to Seller on account of the fire or
casualty, and Seller shall pay to Purchaser at the Closing the amount of
Seller's insurance deductible.
6.2. If between the date of this Agreement and the Closing Date, any
condemnation or eminent domain proceedings are initiated which might result in
the taking of any part of the Property or the taking or closing of any right of
<PAGE>
access to the Property, Seller shall immediately notify Purchaser of such
occurrence. In the event that the taking of any part of the Property shall:
(i) impair access to the Property; (ii) cause any non-compliance with any
applicable law, ordinance, rule or regulation of any federal, state or local
authority or governmental agencies having jurisdiction over the Property or any
portion thereof; or (iii) and adversely impair the use of the Property as it is
currently being operated (hereinafter collectively referred to as a "Material
Event"), Purchaser may:
6.2.1. terminate this Agreement by written notice to Seller, in
which event the Earnest Money deposited by Purchaser, together with interest
thereon, shall be returned to Purchaser and all rights and obligations of the
parties hereunder with respect to the closing of this transaction will cease;
or
6.2.2. proceed with the Closing, in which event Seller shall assign
to Purchaser all of Seller's right, title and interest in and to any award made
in connection with such condemnation or eminent domain proceedings.
6.3. Purchaser shall then notify Seller, within seven (7) 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 seven (7) 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.
7. INSPECTION AND AS-IS CONDITION.
7.1. Purchaser, at Purchaser's sole cost and expense, has completed its
inspection of the Property.
Purchaser shall restore the Property to the condition existing prior to
the performance of its inspection of the Property. 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.
Seller shall notify Purchaser if Seller receives notice of threatened, or
actually instituted claims, 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.
<PAGE>
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 Closing and the delivery of the
Deed with respect to claims of any third parties, and shall survive the
termination of this Agreement (for any reason other than Closing) with respect
to all claims (i.e. third party or otherwise).
7.2. 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 "Hazardous
Materials" (as hereinafter defined), economic projections or market studies
concerning the Property, any development rights, taxes, bonds, covenants,
conditions and restrictions affecting the Property, water or water rights,
topography, drainage, soil, subsoil of the Property, the utilities serving the
Property or any zoning or building laws, rules or regulations or "Environmental
Laws" (hereinafter defined) affecting the Property. Seller makes no
representation or warranty that the Property complies with Title III of the
Americans with Disabilities Act or any fire code or building code. 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 on, or environmental conditions of, the Property, whether
known or unknown. As used herein, "Environmental Laws" means all federal,
state and local statutes, codes, regulations, rules, ordinances, orders,
standards, permits, licenses, policies and requirements (including consent
decrees, judicial decisions and administrative orders) relating to the
protection, preservation, remediation or conservation of the environment or
worker health or safety, all as amended or reauthorized, or as hereafter
amended or reauthorized, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.
Section 9601 et seq., the Resource Conservation and Recovery Act of 1976
("RCRA"), 42 U.S.C. Section 6901 et seq., the Emergency Planning and Community
Right-to-Know Act ("Right-to-Know Act"), 42 U.S.C. Section 11001 et seq., the
Clean Air Act ("CAA"), 42 U.S.C. Section 7401 et seq., the Federal Water
Pollution Control Act ("Clean Water Act"), 33 U.S.C. Section 1251 et seq., the
Toxic Substances Control Act ("TSCA"), 15 U.S.C. Section 2601 et seq., the Safe
Drinking Water Act ("Safe Drinking Water Act"), 42 U.S.C. Section 300f et seq.,
the Atomic Energy Act ("AEA"), 42 U.S.C. e 2011 et seq., the Occupational
Safety and Health Act ("OSHA"), 29 U.S.C. Section 651 et seq., and the
Hazardous Materials Transportation Act (the "Transportation Act"), 49 U.S.C.
Section 1802 et seq. As used herein, "Hazardous Materials" means:
<PAGE>
(1) "hazardous substances," as defined by CERCLA; (2) "hazardous wastes," as
defined by RCRA; (3) any radioactive material including, without limitation,
any source, special nuclear or by-product material, as defined by AEA; (4)
asbestos in any form or condition; (5) polychlorinated biphenyls; and (6) any
other material, substance or waste to which liability or standards of conduct
may be imposed under any Environmental Laws. Notwithstanding anything
contained herein to the contrary, Purchaser's obligations, as more fully set
forth in this Paragraph 7.2 shall survive the Closing and the delivery of the
Deed and termination of this Agreement.
7.3. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Seller makes no representation or
warranty that 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. Notwithstanding
anything contained herein to the contrary, Purchaser's obligations, as more
fully set forth in this Paragraph 7.3 shall survive the Closing and the
delivery of the Deed and termination of this Agreement.
7.4. Seller has provided to Purchaser the following existing report: a
Phase I Environmental Site Assessment Report, prepared by H&GCL, Inc., 180
Canal Street, Boston, Massachusetts 02114, dated April 30,1993 ("Existing
Report"). Seller makes no representation or warranty concerning the accuracy
or completeness of the Existing Report. Purchaser hereby releases Seller and
the Affiliates of Seller from any liability whatsoever with respect to the
Existing Report, or, including, without limitation, the matters set forth in
the Existing Report, and the accuracy and/or completeness of the Existing
Report. Furthermore, Purchaser acknowledges that it will be purchasing the
Property with all faults disclosed in the Existing Report. Notwithstanding
anything contained herein to the contrary, Purchaser's obligations, as more
fully set forth in this Paragraph 7.4 shall survive the Closing and the
delivery of the Deeds and termination of this Agreement.
8. CLOSING. The closing of this transaction (the "Closing") shall be on
May 31, 1996 (the "Closing Date"), at the office of Title Insurer, Charlotte
(Pineville), North Carolina 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 North
Carolina, 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
<PAGE>
the date of the Closing Date. In the event of a New York style closing, Seller
shall deliver to Title Insurer any customary affidavit in connection with a New
York style closing. All closing and escrow fees shall be divided equally
between the parties hereto.
9. CLOSING DOCUMENTS.
9.1. On the Closing Date, Seller and Purchaser shall execute and deliver
to one another a joint closing statement. In addition, Purchaser shall deliver
to Seller the balance of the Purchase Price, an assumption of the documents set
forth in Paragraph 9.2.3 and 9.2.4 and such other documents as may be
reasonably required by the Title Insurer in order to consummate the transaction
as set forth in this Agreement.
9.2. On the Closing Date, Seller shall deliver to Purchaser the
following:
9.2.1. the Deed (in the form of Exhibit E attached hereto), subject
to Permitted Exceptions and those Unpermitted Exceptions waived by
Purchaser;
9.2.2. a bill of sale conveying the Personal Property (in the form
of Exhibit F attached hereto);
9.2.3. assignment and assumption of intangible property (in the form
attached hereto as Exhibit G), including, without limitation, the service
contracts listed in Exhibit H;
9.2.4. an assignment and assumption of leases and security deposits
(in the form attached hereto as Exhibit I);
9.2.5. non-foreign affidavit (in the form of Exhibit J attached
hereto);
9.2.6. original, and/or copies of, leases affecting the Property in
Seller's possession;
9.2.7. all documents and instruments reasonably required by the
Title Insurer to issue the Title Policy;
9.2.8. possession of the Property to Purchaser;
9.2.9. evidence of the termination of the management agreement;
9.2.10. notice to the tenants of the Property of the transfer of
title and assumption by Purchaser of the landlord's obligation under the
leases and the obligation to refund the security deposits (in the form of
Exhibit K); and
9.2.11. a certified updated rent roll.
<PAGE>
10. DEFAULT BY PURCHASER. ALL EARNEST MONEY DEPOSITED INTO THE ESCROW IS TO
SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND UNDERTAKINGS
UNDER THIS AGREEMENT. IN THE EVENT OF A DEFAULT OF THE PURCHASER UNDER THE
PROVISIONS OF THIS AGREEMENT, SELLER SHALL RETAIN ALL OF THE EARNEST MONEY AND
THE INTEREST THEREON AS SELLER'S SOLE 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.
11. 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 AND PURCHASER'S RIGHT TO RECEIVE FROM SELLER ITS ACTUAL, DOCUMENTED
THIRD PARTY EXPENSES INCURRED IN THE PERFORMANCE OF ITS DUE DILIGENCE HEREUNDER
AND THE PREPARATION OF THIS AGREEMENT, NOT TO EXCEED $25,000. NOTWITHSTANDING
ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF SELLER'S DEFAULT IS (I) ITS (AND
NOT AN UNRELATED THIRD PARTY'S) AFFIRMATIVE, WILLFUL ACTION WHICH RESULTS IN
THE RECORDING OF AN ENCUMBRANCE AGAINST THE PROPERTY WITH THE INTENTION TO
PREVENT THE SALE OF THE PROPERTY IN ACCORDANCE WITH THE TERMS HEREOF AND WHICH
GIVES RISE TO PURCHASER'S RIGHT TO TERMINATE THIS AGREEMENT PURSUANT TO
PARAGRAPH 5 HEREOF; (II) ITS FAILURE TO EXPEND UP TO $100,000 IF (A) SELLER IS
ABLE TO BOND OVER, CURE OR REMOVE A MINOR UNPERMITTED EXCEPTION FOR A COST NOT
TO EXCEED $100,000 OR (B) THE TITLE INSURER IS WILLING TO INSURE OVER A MINOR
UNPERMITTED EXCEPTION FOR A COST NOT TO EXCEED $100,000 IN ACCORDANCE WITH THE
TERMS HEREOF OR (III) ITS WILLFUL REFUSAL TO DELIVER THE DEED, THEN PURCHASER
WILL BE ENTITLED TO SUE FOR SPECIFIC PERFORMANCE.
12. PRORATIONS.
12.1. 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; incentive fees paid pursuant to any
laundry contract; provided, however, such fee shall only be prorated if
actually received by Seller and only to the extent any fee was not used to
improve the laundry facilities at the Property; real and personal property
taxes 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. All prorations will be final
except as to delinquent rent referred to in Paragraph 12.2 below.
12.2. All basic rent paid following the Closing Date by any tenant of the
Property who is indebted under a lease for basic rent for any period prior to
and including the Closing Date shall be deemed a "Post-Closing Receipt" until
such time as all such indebtedness is paid in full. Within ten (10) days
<PAGE>
following each receipt by Purchaser of a Post-Closing Receipt, Purchaser shall
pay such Post-Closing Receipt to Seller. Purchaser shall use its best efforts
to collect all amounts which, upon collection, would constitute Post-Closing
Receipts hereunder. Within 120 days after the Closing Date, Purchaser shall
deliver to Seller a reconciliation statement of Post-Closing Receipts through
the first 90 days after the Closing Date. Upon the delivery of the
Post-Closing Receipts reconciliation, Purchaser shall deliver to Seller any
Post-Closing Receipts owing to Seller and not previously delivered to Seller in
accordance with the terms hereof. Seller retains the right to conduct an
audit, at reasonable times and upon reasonable notice, of Purchaser's books and
records to verify the accuracy of the Post-Closing Receipts reconciliation
statement and upon the verification of additional funds owing to Seller,
Purchaser shall pay to Seller said additional Post-Closing Receipts and the
cost of performing Seller's audit. Paragraph 12.2 of this Agreement shall
survive the Closing and the delivery and recording of the deed.
13. RECORDING. Neither this Agreement nor a memorandum thereof shall be
recorded and the act of recording by Purchaser shall be an act of default
hereunder by Purchaser and subject to the provisions of Paragraph 10 hereof.
14. ASSIGNMENT. 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, Purchaser may assign its interest in this Agreement without the
consent of Seller to Cornerstone Realty Income Trust, Inc. provided that
Purchaser remains liable for and the assignee assumes the obligations of
Purchaser hereunder.
15. BROKER. The parties hereto represent and warrant that no broker
commission or finder fee is due and payable in connection with this transaction
other than to CB Commercial Real Estate Group, Inc. (to be paid by Seller).
Seller's commission to CB Commercial Real Estate Group, Inc. shall only be
payable out of the proceeds of the sale of the Property in the event the
transaction set forth herein closes. Purchaser and Seller shall indemnify,
defend and hold the other party hereto harmless from any claim whatsoever
(including without limitation, reasonable attorney's fees, court costs and
costs of appeal) from anyone claiming by or through the indemnifying party any
fee, commission or compensation on account of this Agreement, its negotiation
or the sale hereby contemplated other than to CB Commercial Real Estate Group,
Inc. The indemnifying party shall undertake its obligations set forth in this
Paragraph 15 using attorneys selected by the indemnifying party and reasonably
acceptable to the indemnified party. The provisions of this Paragraph 15 will
survive the Closing and delivery of the Deed.
16. REPRESENTATIONS AND WARRANTIES.
16.1. Any reference herein to Seller's knowledge or notice of any matter
or thing shall only mean such knowledge or notice that has actually been
received by Philip Schechter or Mike Becker (the "Seller's Representatives"),
and any representation or warranty of the Seller is based upon those matters of
which the Seller's Representatives has actual knowledge. Any knowledge or
<PAGE>
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 Representatives.
16.2. Subject to the limitations set forth in Paragraph 16.1, Seller
hereby makes the following representations and warranties, which
representations and warranties are made to Seller's knowledge and which shall,
subject to Paragraph 16.4, be remade at Closing: (i) Seller has no knowledge
of any pending or threatened litigation, claim, cause of action or
administrative proceeding concerning the Property; (ii) Seller has the power to
execute this Agreement and consummate the transactions contemplated herein;
(iii) the rent roll (which includes a list of actual security deposits)
attached hereto as Exhibit L which Seller will update as of the Closing Date is
accurate as of the date set forth thereon; (iv) Seller has not received written
notice from any governmental agency that the Property is in violation of any
government statute or regulation; (v) except as may be set forth in the
Existing Report, Seller has not received any notice from any governmental
authority having jurisdiction over the Property of any uncured violation of any
Environmental Law with respect to the Property; and (vi) except as may be set
forth on the rent roll, Seller has not delivered any coupons or similar items
to any of the tenants at the Property which would allow any such tenant to
remit to the owner of the Property following the Closing such coupon or similar
item in complete or partial satisfaction of said tenant's monthly rental
obligation.
16.3. Purchaser hereby represents and warrants to Seller that
Purchaser has the full right, power and authority to execute this Agreement and
consummate the transactions contemplated herein.
16.4. If at any time after the execution of this Agreement, either
Purchaser or Seller become aware of information which makes a representation
and warranty contained in this Agreement to become untrue in any material
respect, said party shall promptly disclose said information to the other party
hereto. Provided the party making the representation or warranty did not take
any deliberate actions to cause the representation or warranty in question to
become untrue in any material respect, said party shall not be in default under
this Agreement and the sole remedy of the other party shall be to terminate
this Agreement. Notwithstanding anything contained herein to the contrary, if
the status of any of the tenancies changes from the date of the rent roll
attached hereto and the date of the rent roll delivered at Closing, provided
the change in status is not caused by a breach of Seller's covenants contained
in Article 16 herein, then Purchaser shall not have the right to terminate this
Agreement or make any claim for a breach of a representation or warranty
hereunder involving the rent roll or tenancies thereunder. Purchaser and
Seller are prohibited from making any claims against the other party hereto
after the Closing with respect to any breaches of the other party's
representations and warranties contained in this Agreement that the claiming
party has actual knowledge of prior to the Closing.
16.5. The parties agree that the representations contained herein
shall survive Closing for a period of sixty (60) days (i.e., the claiming party
shall have no right to make any claims against the other party for a breach of
a representation or warranty after the expiration of sixty (60) days
immediately following Closing).
<PAGE>
16.6. Seller covenants to operate and manage the Property in the same
manner that it has managed, maintained and operated the Property during the
period of Seller's ownership, subject to reasonable wear and tear and casualty.
17. LIMITATION OF LIABILITY. Neither Seller, nor any of its respective
beneficiaries, shareholders, partners, officers, agents or employees, heirs,
successors or assigns shall have any personal liability of any kind or nature
for or by reason of any matter or thing whatsoever under, in connection with,
arising out of or in any way related to this Agreement and the transactions
contemplated herein, and Purchaser hereby waives for itself and anyone who may
claim by, through or under Purchaser any and all rights to sue or recover on
account of any such alleged personal liability.
18. TIME OF ESSENCE. Time is of the essence of this Agreement.
19. NOTICES. Any notice or demand which either party hereto is required or
may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by overnight courier
such as Federal Express, by facsimile transmission or made by United States
registered or certified mail addressed as follows:
TO SELLER: c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attention: Ilona Adams
with copies to: The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attention: Alan Lieberman
(708) 317-4360
(708) 317-4462 (FAX)
and to: Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, Illinois 60661-3693
Attention: Daniel J. Perlman, Esq.
(312) 902-5532
(312) 902-1061 (FAX)
TO PURCHASER: Cornerstone Realty Group Incorporated
306 East Main Street
Richmond, Virginia 23219
Attention: Mr. Gus Remppies and Mr. Jay Olander
(804) 643-1761
(804) 782-9302 (FAX)
<PAGE>
and one copy to: Zuckerbrod & Taubenfeld
575 Chestnut Street
Cedarhurst, New York 11516
Attention: Harry Taubenfeld, Esq.
(516) 374-3133
(516) 374-3490 (FAX)
and one copy to: Manning, Fulton & Skinner, P.A.
3605 Glenwood Avenue, Suite 500
Raleigh, North Carolina 27612
Attention: Ted Oliver, Esq.
(919) 787-8880
(919) 781-0811 (FAX)
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be
deemed to be delivered or made on the next business day if sent by overnight
courier, or the same day as given if sent by facsimile transmission and
received by 5:00 p.m. Chicago time or on the 4th business day after the same is
deposited in the United States Mail as registered or certified matter,
addressed as above provided, with postage thereon fully prepaid. Any such
notice, demand or document not given, delivered or made by registered or
certified mail, by overnight courier or by facsimile transmission as aforesaid
shall be deemed to be given, delivered or made upon receipt of the same by the
party to whom the same is to be given, delivered or made. Copies of all
notices shall be served upon the Escrow Agent.
20. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute two
(2) copies of this Agreement and three (3) copies of the Escrow Agreement and
forward them to Seller for execution, accompanied with the Earnest Money
payable to the Escrow Agent set forth in the Escrow Agreement. Seller will
forward one (1) copy of the executed Agreement to Purchaser and will forward
the following to the Escrow Agent:
(A) Earnest Money;
(B) One (1) fully executed copy of this Agreement; and
(C) Three (3) copies of the Escrow Agreement signed by the parties with a
direction to execute two (2) copies of the Escrow Agreement and deliver a fully
executed copy to each of the Purchaser and the Seller.
21. GOVERNING LAW. The provisions of this Agreement shall be governed by the
laws of the state of North Carolina, except that with respect to the retainage
of the Earnest Money as liquidated damages the laws of the State of Illinois
shall govern.
22. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties and supersedes all other negotiations, understandings and
representations made by and between the parties and the agents, servants and
employees.
<PAGE>
23. COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.
24. CAPTIONS. Paragraph titles or captions contained herein are inserted as a
matter of convenience and for reference, and in no way define, limit, extend or
describe the scope of this Agreement or any provision hereof.
25. AUDIT. Seller will make available to Purchaser such books, accounts and
records necessary for Purchaser to conduct an audit of the Property's preceding
fiscal year. This audit will be conducted solely at Purchaser's expense for
the purpose of satisfying its requirements as a publicly held entity. Seller
agrees to execute and deliver a disclosure letter prepared by the auditors of
Purchaser in the form attached hereto as Exhibit M. The terms of this
Paragraph 25 shall survive the Closing for a period of one (1) year from the
Closing Date.
26. LITIGATION COSTS. In the event of any action or proceeding at law or in
equity between Seller and Purchaser to enforce any provision of this Agreement
or to protect or establish any right or remedy of either party hereunder, the
unsuccessful party to such litigation shall pay the prevailing party all
litigation costs and expenses, including reasonable attorneys' fees incurred
therein by such prevailing party, and if such prevailing party shall recover
judgment in any such action or proceeding, such costs and expenses (including
such attorneys' fees) shall be included in and as a part of such judgment.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date first set forth above.
PURCHASER:
CORNERSTONE REALTY GROUP INCORPORATED,
a Virginia corporation
By: /s/S. J. Olander
----------------------------------
Name: S. J. Olander
----------------------------------
Its: Senior Vice President
----------------------------------
SELLER:
MEADOWCREEK PARTNERS LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Meadowcreek Partners, Inc., an Illinois
corporation, its general partner
By: /s/Phillip Schechter
-----------------------------------
Name: Phillip Schechter
-----------------------------------
Its: Authorized Agent
-----------------------------------
<PAGE>
Matthew Lawton of CB Commercial Real Estate Group, Inc. ("Seller's Broker")
executed this Agreement in its capacity as a real estate broker and
acknowledges that the fee or commission due it from Seller as a result of the
transaction described in this Agreement is as set forth in that certain Listing
Agreement, dated , 199 between Seller and Seller's Broker (the "Listing
Agreement"). Seller's Broker also acknowledges that payment of the aforesaid
fee or commission is conditioned upon the Closing and the receipt of the
Purchase Price by the Seller. Seller's Broker agrees to deliver a receipt to
the Seller at the Closing for the fee or commission due Seller's Broker and a
release stating that no other fees or commissions are due to it from Seller or
Purchaser.
By:
----------------------------------
Name:
----------------------------------
Its:
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<PAGE>
Exhibits
A - Legal
B - Personal Property
C - Escrow Agreement
D - Title Commitment
E - Deed
F - Bill of Sale
G - Assignment and Assumption of Intangible Property
H - Service Contracts
I - Assignment and Assumption of Leases and Security Deposits
J - Non-Foreign Affidavit
K - Notice to Tenants
L - Rent Roll
M - Disclosure Letter
<PAGE>
