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 30, 1997
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
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
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Spring Creek Apartments
In 1984, the Partnership acquired the Spring Creek Apartments, Columbus, Ohio,
utilizing approximately $4,214,000 of offering proceeds. The property was
acquired subject to a first mortgage loan of $7,960,000. The mortgage loan was
refinanced in 1987 with a new $7,100,000 first mortgage loan from an
unaffiliated party and a $860,000 second mortgage loan from the seller of the
property to the Partnership, which loan was repaid by the Partnership in 1989.
In 1994, the first mortgage loan was refinanced with a new $7,448,362 mortgage
loan from an unaffiliated party. The Partnership received approximately
$110,000 of excess refinancing proceeds.
On May 30, 1997, the Partnership contracted to sell the property for a sale
price of $10,225,000 to an unaffiliated party, New Plan Realty Trust, a
Massachusetts business trust. The sale closed on June 2, 1997. From the
proceeds of the sale, the Partnership repaid the outstanding balance of the
first mortgage loan of $7,297,746 and paid a prepayment penalty of $218,932,
$204,500 as a brokerage commission to an affiliate of the third party providing
property management services for the property and $39,829 in closing costs. The
Partnership received the remaining proceeds of approximately $2,464,000. Of
such proceeds, $250,000 will be retained by the Partnership and will not be
available for use or distribution by the Partnership until October 1, 1997.
Neither the General Partner nor any affiliate will receive a brokerage
commission in connection with the sale of the property. The General Partner
will be reimbursed by the Partnership for its actual expenses incurred in
connection with the sale.
Affiliates of the General Partner sold six other properties to the purchaser
during 1996.
ITEM 5. OTHER EVENTS
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Park Colony Apartments
As previously reported, on April 30, 1997, the Partnership contracted to sell
Park Colony Apartments, Gwinnett County, Georgia, to an unaffiliated party,
Ambassador VIII, L.P., a Delaware limited partnership, for a sale price of
$14,500,000. The Partnership and the purchaser have agreed to extend the
closing of the sale to July 15, 1997 or such earlier date as designated by the
purchaser upon no less than five business days' prior written notice to the
Partnership. The purchaser has made an additional deposit of earnest money,
for a total of $600,000 of earnest money. Upon the closing of the sale,
$100,000 will be placed in escrow and will not be released to the Partnership
until the later of the settlement of any claims by the purchaser or September
1, 1997.
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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) Agreement of Sale and attachment thereto relating to the sale
of Spring Creek Apartments, Columbus, Ohio.
(99) Third Amendment to Agreement of Sale relating to the sale
of Park Colony Apartments, Gwinnett County, Georgia.
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
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Jerry M. Ogle, General Counsel
and Managing Director
Dated: June 13, 1997
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AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement") is entered into as of this 30
day of May, 1997, by and between NEW PLAN REALTY TRUST, a Massachusetts
business trust ("Purchaser") and 5811 SPRING RUN LIMITED PARTNERSHIP, an
Illinois limited partnership ("Seller").
WITNESSETH:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to
sell at the price of Ten Million Two Hundred Twenty-Five Thousand and No/100
Dollars ($10,225,000.00) ("Purchase Price"), that certain property ("Property")
in Columbus, Ohio more particularly described on Exhibit A attached hereto,
which Property is known as Spring Creek Apartments, including all easements,
tenements, hereditaments, rights, licenses, privileges and appurtenances,
whether or not of record, in any way belonging or relating thereto and all
mineral, oil, gas and other hydrocarbon substances on or under the land and all
development, air, water and other rights in any way belonging or relating to
the land or the improvements thereon, all right, title and interest in and to
any streets, roads, alleys or other public ways adjoining or serving the land,
including any land lying in the bed of any street, road, alley or other public
way, open or proposed, and any strips, gores, culverts and rights-of-way
adjoining or serving the land (including all riparian and other rights in and
to submerged lands). Included in the Purchase Price is all of the personal
property owned by Seller and used in connection with or located on the
Property, including but not limited to all lease files and copies of all books,
records and other files (other than computer software, but including the
product of such software) which are used in connection with the ownership or
operation of the Property and the personal property which is set forth on
Exhibit B, which shall be transferred to Purchaser at Closing (as hereinafter
defined) by a Bill of Sale.
2. PURCHASE PRICE. The Purchase Price shall be paid as follows:
a. Upon the execution of this Agreement, the sum of Two Hundred
Fifty Thousand and No/100 Dollars ($250,000.00) ("Earnest Money") to be held in
escrow by the Escrow Agent (as that term is defined in the Escrow Agreement),
by and in accordance with the provisions of the Escrow Agreement ("Escrow
Agreement") attached hereto as Exhibit C;
b. On the Closing Date (as hereinafter defined), $10,225,000.00
(inclusive of the Earnest Money) adjusted in accordance with the prorations by
federally wired "immediately available" funds delivered to the Title Insurer
(as hereinafter defined) no later than 11:00 A.M. Central Time on the Closing
Date. If the funds are not received by the Title Insurer by 11:00 A.M. Central
Time, then Seller shall have the option to postpone the Closing Date until July
1, 1997. Seller agrees that Seller shall deliver a draft closing statement to
Purchaser one (1) day prior to the Closing Date.
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3. TITLE COMMITMENT AND SURVEY.
a. Attached hereto as Exhibit D is a title commitment dated March
11, 1997 ("Title Commitment") for an owner's standard coverage title insurance
policy issued by Title First Agency, Inc., as agent for Commonwealth Land Title
Insurance Company ("Title Insurer"). The owner's Title Policy (as hereinafter
defined) issued at Closing will be in the aggregate amount of the Purchase
Price and shall insure the real property described in Exhibit A subject only to
real estate taxes not yet due and payable, the construction contracts for the
"Work" (hereinafter defined) which has not been completed as of the Closing
Date, the special title exceptions set forth in Schedule B-Section 2, Numbers
10 through 18, inclusive, of the Title Commitment and a title exception
addressing the rights of those tenants shown on a current rent roll ("Permitted
Exceptions"). The Title Commitment 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, Seller shall cause the Title
Insurer to issue the Title Policy or a "marked up" commitment in favor of
Purchaser containing only the Permitted Exceptions and the "extended coverage",
and the special endorsements required by Purchaser. Seller shall pay for the
costs of the Title Policy; however, Purchaser shall pay for the costs of
"extended coverage" or any special endorsements which Purchaser requires.
b. Purchaser acknowledges receipt of a survey ("Survey") of the
Property prepared by Myers Surveying Company dated June 23, 1994 and updated
August 2, 1996. Seller will use commercially reasonable efforts to provide
Purchaser with an update of the survey ("Updated Survey") as soon as possible
after the Closing, but Closing will not be delayed on account of the inability
to provide such an update. Seller agrees to pay up to $2,500 for the Updated
Survey and Purchaser agrees to pay for the cost of the Updated Survey in excess
of such $2,500. The provisions of this Paragraph 3.b. shall survive the
delivery of the Deed and the Closing of this transaction.
4. CONDITION OF TITLE/CONVEYANCE. Seller agrees to convey fee simple
title to the Property by special warranty deed ("Deed") subject only to the
Permitted Exceptions. The Deed will be made by Seller with no warranty of
title except for claims arising by, through or under Seller. If Seller is
unable to convey title to the Property subject only to the Permitted Exceptions
because of the existence of an additional title exception ("Unpermitted
Exception"), then Seller shall make all reasonable efforts to remove the
Unpermitted Exception and shall remove any Unpermitted Exception caused by
Seller subsequent to the date of the Title Commitment with the intention to
prevent the consummation of this Agreement. If Seller is unable to remove the
Unpermitted Exception, then Seller shall so notify Purchaser and Purchaser can
elect to take title to the Property subject to the Unpermitted Exception or
terminate this Agreement. 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 18 herein,
neither party shall have any further liability hereunder. Notwithstanding the
aforesaid, Seller shall be obligated to remove all liens and encumbrances which
are of a definite or ascertainable amount.
<PAGE>
5. PAYMENT OF CLOSING COSTS. Seller shall be solely responsible for the
cost of the transfer tax associated with this sale, while Purchaser and Seller
shall equally share the costs of all other stamps, intangible, documentary,
recording, or sales tax and surtax imposed by law with reference to any other
documents delivered in connection with this Agreement. Notwithstanding the
foregoing, Seller shall pay for the cost of recording any releases in
connection with the existing loan encumbering the Property.
6. DAMAGE, CASUALTY AND CONDEMNATION.
a. If the Property suffers damage as a result of any casualty prior
to the Closing Date and can be repaired or restored in the case of real
property for $140,000.00 or less, or in the case of Personal Property, for
$10,000.00 or less, Purchaser shall proceed with the Closing and accept the
Property in its damaged condition together with an assignment from Seller of
all insurance proceeds and receive a credit at Closing in the amount of the
deductible. In such event, Purchaser shall have the right to negotiate the
settlement of the insurance claim with the insurance carrier. Seller shall
execute whatever documents are reasonably required in order to enable Purchaser
to conduct those negotiations. If the cost of repair or restoration exceeds
those amounts, then Purchaser, upon notice to Seller served within twenty (20)
days of receipt of notice from Seller of the casualty, can elect to either: (a)
terminate this Agreement or (b) accept the Property in its damaged condition
together with an assignment from Seller of all insurance proceeds and receive a
credit at Closing in the amount of the deductible. In such event, Purchaser
shall have the right to negotiate the settlement of the insurance claim with
the insurance carrier and Seller shall execute whatever documents are
reasonably required in order to enable Purchaser to conduct those negotiations.
If Purchaser has not given its notice prior to the Closing Date because the
twenty (20) day period has not expired, then the Closing Date shall be extended
until one (1) business day after Purchaser is required to give its notice.
b. If condemnation proceedings ("Proceedings") are instituted
against the Property, or if Seller receives notice that Proceedings are going
to be commenced, then Purchaser can elect to either take the Property subject
to the Proceedings and receive from Seller an assignment of Seller's interest
in the Proceedings and any award pursuant to the Proceedings or terminate this
Agreement. If Purchaser elects to terminate this Agreement, it shall be by
notice to the Seller within five (5) days after Seller notifies Purchaser of
the Proceedings.
c. If the Agreement is terminated pursuant to this Paragraph, then
the Earnest Money plus all accrued interest shall be delivered to the
Purchaser.
7. AS-IS CONDITION.
a. Except as may otherwise be specifically set forth elsewhere in
this Agreement, Seller does not make any representations as to the condition of
the Property upon which Purchaser can rely. Any information which Seller has
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as to the leases is based solely upon information which Seller obtained
subsequent to its acquisition of the Property. Purchaser is not relying on
Seller having made any inquiry as to the condition of the Property or the
leases. Except as may otherwise be specifically set forth elsewhere in this
Agreement, Purchaser acknowledges and agrees that it will be purchasing the
Property based solely upon its inspection and investigations of the Property
and that Purchaser will be purchasing the Property "AS IS" and "WITH ALL
FAULTS" based upon the condition of the Property as of the date of this
Agreement, subject to reasonable wear and tear and loss (subject to Paragraph
6) 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 Seller nor its consultants, brokers or agents have made any
other representations or warranties of any kind upon which Purchaser is relying
as to any matters concerning the Property, including, but not limited to, the
condition of the land or any improvements, the existence or nonexistence of
asbestos, lead in water, lead in paint, radon, underground or above ground
storage tanks, petroleum, toxic waste or any Hazardous Materials or Hazardous
Substances (as such terms are defined below), the tenants of the Property or
the leases affecting the Property, economic projections or market studies
concerning the Property, any development rights, taxes, bonds, covenants,
conditions and restrictions affecting the Property, water or water rights,
topography, drainage, soil, subsoil of the Property, the utilities serving the
Property or any zoning, environmental or building laws, rules or regulations
affecting the Property. Seller makes no representation that the Property
complies with Title III of the Americans With Disabilities Act or, except as
may be specifically set forth elsewhere in this Agreement, any fire codes or
building codes. Except for the breach of the representation or warranty set
forth in Paragraph 19b.ix., Purchaser hereby releases Seller from any and all
liability in connection with any claims which Purchaser may have against
Seller, and except for the breach of the representation or warranty set forth
in Paragraph 19b.ix., Purchaser hereby agrees not to assert any claims, for
damage, loss, compensation, contribution, cost recovery or otherwise, against
Seller, whether in tort, contract, or otherwise, relating directly or
indirectly to the existence of asbestos or Hazardous Materials or Hazardous
Substances on, or environmental conditions of, the Property, or arising under
the Environmental Laws (as such term is hereinafter defined), or relating in
any way to the quality of the indoor or outdoor environment at the Property.
This release shall survive the Closing. As used herein, the term "Hazardous
Materials" or "Hazardous Substances" means (i) hazardous wastes, hazardous
materials, 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 materials," "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 Emergency
Planning and Community Right-to-Know Act, 42 U.S.C. Section 1101 et seq.; the
Atomic Energy Act ("AEA"), 42 U.S.C. Section 2011 et seq.; the Resource
<PAGE>
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, (E) asbestos, (F) lead in water, paint or elsewhere, (G) radon, (H)
Polychlorinated Biphenyls (PCB's) and (I) ureaformaldehyde.
b. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Except as may be specifically set
forth elsewhere in this Agreement, 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, except as may be specifically set forth
elsewhere in this Agreement, releases Seller from any liability with respect to
such historical financial information.
8. CLOSING. The closing ("Closing") of this transaction shall occur on
June 2, 1997 ("Closing Date"), at the office of the Seller's attorney, at which
time Seller shall deliver possession of the Property to Purchaser. The Closing
Date is subject to extension pursuant to Paragraphs 6 and 17 of this Agreement.
9. CLOSING DOCUMENTS.
a. On the Closing Date, Purchaser shall deliver to Seller an
executed closing statement and to the Title Insurer the balance of the Purchase
Price, adjusted by the prorations, 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.
b. On the Closing Date, Seller shall deliver to Purchaser
possession of the Property; the Deed (in the form of Exhibit E attached hereto)
subject to the Permitted Exceptions and those Unpermitted Exceptions waived by
Purchaser; an inventory of the Personal Property and a Bill of Sale for the
same (in the form of Exhibit F attached hereto); an executed closing statement;
<PAGE>
an executed assignment and assumption of all service contracts (in the form of
Exhibit G attached hereto); an executed assignment and assumption of all leases
and security deposits (in the form of Exhibit H attached hereto); the tenant
leases which shall be available at the Property; all assignable licenses and
permits relating to the use, occupancy or operation of the Property, together
with in assignment thereof (in the form of Exhibit I attached hereto); updated
Rent Roll (as hereinafter defined) with a list attached of all tenant
concessions and allowances and rental commissions owed (certified in the form
of Exhibit Q attached hereto); a notice to the tenants 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 which have been assigned or
credited to Purchaser (in the form of Exhibit J attached hereto); a non-foreign
affidavit (in the form of Exhibit K attached hereto); an assignment of
intangibles (in the form of Exhibit L attached, hereto); a copy of the notice
terminating the management agreement effective as of the Closing Date and, to
the extent received by Seller, an acknowledgement of the termination by the
manager; subject to the terms of Paragraph 17, reaffirmation of representations
and warranties by Seller (in the form of Exhibit M); a Broker's receipt and
lien waiver; and such other documents as may be reasonably required by the
Title Insurer in order to consummate the transaction as set forth in this
Agreement.
10. DEFAULT BY PURCHASER. THE 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, SELLER SHALL RETAIN THE
EARNEST MONEY AND THE INTEREST THEREON AS SELLER'S SOLE AND EXCLUSIVE RIGHT TO
DAMAGES OR ANY OTHER REMEDY. THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL
DAMAGES, IN THE EVENT OF A DEFAULT BY PURCHASER, WOULD BE EXTREMELY DIFFICULT
OR IMPRACTICAL TO DETERMINE. THEREFORE, BY PLACING THEIR INITIALS BELOW, THE
PARTIES ACKNOWLEDGE THAT THE EARNEST MONEY HAS BEEN AGREED UPON, AFTER
NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES.
11. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF THE EARNEST MONEY
TOGETHER WITH ANY INTEREST ACCRUED THEREON PLUS THE RIGHT TO RECOVER THIRD
PARTY EXPENSES IN AN AMOUNT NOT TO EXCEED $100,000.00, AND 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
SELLER'S DEFAULT IS ITS REFUSAL TO DELIVER THE DEED AND THE DOCUMENTS WHICH
SELLER IS REQUIRED TO DELIVER AT CLOSING, THEN PURCHASER WILL BE ENTITLED TO
SUE FOR SPECIFIC PERFORMANCE OR ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF
$250,000.00. THE PARTIES AGREE THAT PURCHASER'S ACTUAL DAMAGES IN THE EVENT OF
A SELLER'S REFUSAL TO DELIVER THE DEED AND THE DOCUMENTS WOULD BE EXTREMELY
DIFFICULT OR IMPRACTICAL TO DETERMINE. THEREFORE, BY PLACING THEIR INITIALS
BELOW, THE PARTIES ACKNOWLEDGE THAT $250,000.00 HAS BEEN AGREED UPON, AFTER
NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF PURCHASER'S DAMAGES.
<PAGE>
12. a. PRORATIONS. Rents (exclusive of delinquent rents, but including
prepaid rents) and other income; refundable security and other deposits (which
will be assigned to and assumed by Purchaser and a check in the amount of the
security and other deposits will be given to Purchaser at Closing); water and
other utility charges; fuels; prepaid and unpaid operating expenses; real and
personal property taxes based upon the most recent tax bill; and other similar
items shall be adjusted ratably as of 11:59 P.M. on the day preceding the
Closing Date ("Proration Date"), and credited or debited to the balance of the
cash due at Closing. Tenant allowances and concessions and unpaid leasing
commissions for leases entered into prior to the Closing Date will be adjusted
and prorated so as to provide that Seller is responsible for all such matters.
1997 real estate taxes will be prorated based on 1996 taxes, adjusted to
reflect the Purchase Price. 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 to in 12b below. If special assessments have been levied
against the Property for completed improvements, then they shall be paid by the
Seller whether the bills are payable prior to or after the Closing Date. All
assessments first coming due after the Closing for incomplete improvements
shall be paid by Purchaser.
b. DELINQUENT RENTS. If, as of the Closing Date, any rent is in
arrears ("Delinquent Rent") for the calendar month in which the Closing occurs,
then Seller's pro rata share of such Delinquent Rent collected during the month
of Closing will be delivered to Seller. If any Delinquent Rent is collected by
either Purchaser or Seller during the month of Closing or after the month in
which the Closing occurs, then such rents so collected shall first be applied
to current rent and then to Delinquent Rent in the inverse order of its
maturity. Purchaser and Seller shall deliver to the other party its pro rata
share within 10 days of Purchaser's or Seller's receipt, as applicable, of that
Delinquent Rent. This subparagraph of this Agreement shall survive the Closing
and the delivery and recording of the Deed.
13. RECORDING. This Agreement shall not be recorded and the act of
recording by Purchaser shall be an act of default hereunder by Purchaser and
shall be subject to the provisions of Paragraph 10. In the event that this
Agreement is recorded in default of this Agreement, it shall not be deemed to
affect or encumber title to the Property, and it shall not be deemed to create
or establish any right, claim, interest or privilege in the Property in favor
of Purchaser.
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. Seller hereby consents to an
assignment to any corporation which is a wholly owned subsidiary of Purchaser,
or to a partnership that is controlled either directly or indirectly by
Purchaser, provided such assignment is effected prior to the expiration of the
Approval Period. However, Purchaser shall remain liable for all of the
Purchaser's obligations and undertakings set forth in this Agreement and the
exhibits attached hereto.
<PAGE>
15. BROKER. The parties hereto acknowledge that Insignia Mortgage &
Investment Company ("Broker") is the only real estate broker involved in this
transaction. Seller agrees to pay Broker a commission or fee ("Fee") pursuant
to a listing agreement between Seller and Broker. However Seller represents
that this Fee is due and payable only from the proceeds of the Purchase Price
received by Seller. Purchaser agrees to indemnify, defend and hold harmless
the Seller and any partner, affiliate, parent of Seller, and all shareholders,
employees, officers and directors of Seller or Seller's partner, parent or
affiliate (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 (except Broker) claiming by or
through Purchaser any brokerage fee, commission or compensation on account of
this Agreement, its negotiation or the sale hereby contemplated. Seller agrees
to indemnify, defend and hold harmless the Purchaser and all shareholders,
employees, trustees, 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 Seller any
brokerage fee, commission or compensation (including the Broker) on account of
this Agreement, its negotiation or the sale hereby contemplated.
16. DOCUMENTS, INSPECTION OF PROPERTY AND APPROVAL PERIOD.
a. Seller has delivered to Purchaser copies of the most recent
available tax bills, rent rolls, insurance premiums, and service contracts
(collectively the "Documents"). All of the Documents and other matters to be
reviewed by Purchaser shall be subject to review by Purchaser by the close of
business (5:00 P.M. Central Daylight Time) on May 28, 1997 ("Approval Period").
During the Approval Period, upon reasonable notice (which may be given verbally
no later than 24 hours prior thereto unless the law requires longer notice with
respect to inspection of the interior of the apartments) to the Seller, the
Purchaser shall have the right to inspect the Property including the interior
of the apartments and Seller's books and records, leases and other files
pertaining to the Property and the environmental condition of the Property,
during normal business hours. During Purchaser's inspection of the books and
records, leases and other files pertaining to the operation, maintenance and
leasing of the Property, Seller will provide Purchaser with copies of those
documents which are specifically requested by Purchaser. Purchaser agrees to
indemnify, defend, protect and hold Seller harmless from any and all claims for
personal injury and property damage and mechanic lien claims which Seller 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 Seller harmless from any
injuries, damages or claims of any nature whatsoever which Purchaser's
servants, agents or employees may have as a result of Purchaser's inspection of
the Property. Purchaser further agrees to restore any damage to the Property
which may arise as a result of Purchaser's inspection of the Property.
<PAGE>
c. On or prior to the expiration of the Approval Period, Purchaser
shall have the right to terminate this Agreement for any reason or no reason in
Purchaser's sole and exclusive discretion by serving a notice ("Notice of
Disapproval") delivered to Seller and the Escrow Agent prior to the expiration
of the Approval Period. Upon receipt of the Notice of Disapproval, the Earnest
Money plus the interest accrued thereon shall be returned to the Purchaser and
this Agreement shall be terminated. If Purchaser does not deliver a Notice of
Disapproval to Seller, then it shall be conclusively presumed that Purchaser
has waived its right to terminate this Agreement with respect to the provisions
of this Paragraph 16.
17. SELLER'S RIGHT TO CURE. If on or prior to the Closing Date, Deborah
Hartigan, Steve Siegel or Tom Farrell discover that any representation or
warranty of Seller is untrue in any material respect or that Seller is in
default under this Agreement or that Seller has failed to perform a required
covenant (individually or collectively, a "Known Breach"), then Purchaser may
waive such Known Breach or give Seller notice of such Known Breach. Upon
receipt of notice from Purchaser, Seller shall have ten (10) days in order to
cure such Known Breach and, if necessary, the Closing Date shall be extended
until the second business day after the Known Breach has been cured. If, after
making all reasonable efforts, Seller is unable to cure the Known Breach within
such ten (10) day period, then Purchaser shall elect by notice to Seller to
either (i) waive the Known Breach or (ii) terminate this Agreement, in which
case, Purchaser shall have a right to recover actual third party expenses in an
amount not to exceed $100,000.00 as provided in Paragraph 11 of this Agreement.
In the event of termination, the Earnest Money plus the interest accrued
thereon shall be returned to Purchaser. If Purchaser fails to give Seller
notice of a Known Breach, then Purchaser shall have waived its rights to assert
any claims for such Known Breach.
Notwithstanding anything to the contrary contained in this Section 17 or
elsewhere in this Agreement, it is understood and agreed that to the extent any
representation or warranty made by Seller in this Agreement is made to the
knowledge of Seller or is based on the receipt of notice by Seller, in the
event that Seller first acquires such knowledge or first receives such notice
after the date of this Agreement and as a result thereof, Seller is unable to
reaffirm and restate the accuracy of such representation and warranty, such
failure shall not constitute a default by Seller under this Agreement, but
Purchaser shall nonetheless have the right to either (i) waive such ability to
reaffirm and restate said representation and warranty, or (ii) terminate this
Agreement and receive the Earnest Money plus the interest accrued thereon (said
return of the Earnest Money and interest thereon being Purchaser's sole remedy
in such event).
18. SURVIVAL OF INDEMNITIES. Notwithstanding anything in this Agreement
to the contrary, the parties' obligations to indemnify, defend and hold each
other harmless under various provisions of this Agreement shall survive the
termination of this Agreement or the Closing and delivery and recording of the
Deed.
<PAGE>
19. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
a. 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 Michael Becker (the asset manager), and any representation or
warranty of the Seller is based upon those matters of which Michael Becker (the
asset manager) has actual knowledge. Any knowledge or notice given, had or
received by any of Seller's agents, servants or employees (other than Michael
Becker) shall not be imputed to Seller or the individual partners or the
general partner of Seller.
b. Subject to the limitations set forth in subparagraph a above,
Seller hereby makes the following representations, warranties and covenants,
all of which are made to the best of Seller's knowledge, and all of which shall
be reaffirmed and restated on and as of the Closing Date and which shall
survive the Closing and delivery of the Deed for a period of one hundred twenty
(120) days:
i. The present use and occupancy of the Property conform with
applicable building and zoning laws, rules and regulations and Seller has
received no written notice that any such laws, rules or regulations are being
violated other than in connection with the Work (hereinafter defined) and those
matters set forth in Exhibit R.
ii. The rent roll ("Rent Roll") attached hereto as Exhibit N is
true and accurate and neither party to the leases is in default thereunder
except as noted on the delinquency report attached to the Rent Roll. An
updated Rent Roll will be delivered at Closing and will be true and accurate as
of the date of the updated Rent Roll.
iii. Except as disclosed in Exhibit R, there are no pending or
threatened litigation, claims, causes of action or administrative proceedings
concerning the Property nor does Seller have any knowledge for the basis for
such litigation, claims, causes of action or administrative proceedings.
iv. This Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary action on the
part of Seller and, upon the assumption that this Agreement constitutes a
legal, valid and binding obligation of Purchaser, this Agreement constitutes a
legal, valid and binding obligation of Seller.
v. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby by Seller do not and will
not (a) violate or conflict with the organizational documents of Seller, (b)
violate or conflict with any judgment, decree or order of any court applicable
to or affecting Seller, (c) breach the provisions of, or constitute a default
under, any contract, agreement, instrument or obligation to which Seller is a
party or by which Seller is bound, or (d) violate or conflict with any law or
governmental regulation or permit applicable to Seller.
vi. Seller has not received written notice of any pending or
threatened condemnation of all or any portion of the Property.
<PAGE>
vii. Attached hereto as Exhibit O is a list of all service,
maintenance and supply contracts affecting the Property in effect on the date
hereof and which shall survive Closing (the "Service Contracts"), and except as
set forth on Exhibit O, neither party to any service contract is in default
thereunder.
viii. Seller is not a "foreign person" as defined in the
Federal Foreign Investment in Real Property Tax Act of 1980 and the 1984 Tax
Reform Act, as amended.
ix. Seller has not received written notice from any
governmental authority that the Property contains Hazardous Substances or
Hazardous Materials or is in violation of any Environmental Laws.
x. Seller has not executed and to Seller's actual knowledge,
without inquiry, no agreement exists involving the Property with any
governmental authority for or in respect of subsidized tenants or housing
rents.
xi. Seller does not own, directly or indirectly, any other real
estate which is contiguous to or is located within a one mile radius of the
Property.
xii. Seller has not received written notice from a governmental
authority or any public utility that the water supply or sewage disposal
systems presently servicing the Property are inadequate to distribute the water
supply and dispose of the sewage for the Property.
xiii. The unaudited operating statements for 1995 and 1996
to date which Seller has delivered to Purchaser is the same information which
Seller relies upon in making reports to its limited partners and in filing its
federal income tax returns.
c. Seller covenants that:
i. The management, operation, leasing and maintenance of the
Property, as conducted by the Seller during the past three (3) months, shall
continue until the Closing Date.
ii. The management agreement pertaining to the leasing of
apartments will be terminated as of the Closing Date. Seller will request a
release in favor of the Purchaser from the management company.
iii. For the period commencing from the date of execution of
this Agreement until the Closing Date, Seller will not terminate more than ten
(10) tenant leases because of a default by any tenant under any such lease
without Purchaser's prior written consent, which consent will not be
unreasonably withheld or delayed.
iv. Seller will perform its obligations under existing leases.
<PAGE>
20. ENVIRONMENTAL REPORT. At Purchaser's request, Seller has provided to
Purchaser the following report: Phase I Environmental Site Assessment Report
prepared by EMG designated as Job No. 94-0450-11C, dated July 12, 1994
("Environmental Report"). Seller makes no representation or warranty that the
Environmental Report is accurate or complete. Purchaser hereby releases Seller
from any liability whatsoever with respect to the Environmental Report,
including, without limitation, the matters set forth in the Environmental
Report or the accuracy and/or completeness of the Environmental Report.
21. LIMITATION OF LIABILITY.
a. Subject to the provisions of Paragraphs 25 and 26 herein, no
general or limited partner of 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.
b. This Agreement and all documents, agreements, understandings and
arrangements relating to this transaction have been negotiated, executed and
delivered on behalf of Purchaser by the trustees or officers thereof in their
representative capacity under the Amended and Restated Declaration of Trust of
New Plan Realty Trust dated as of January 15, 1996 and not individually, and
bind only the trust estate of Purchaser, and no trustee, officer, employee,
agent or shareholder of Purchaser shall be bound or held to any personal
liability or responsibility in connection with the agreements, obligations and
undertakings of Purchaser thereunder, and any person or entity dealing with
Purchaser in connection therewith shall look solely to the trust estate for the
payment of any claim or for the performance of any agreement, obligation or
undertaking thereunder. Seller acknowledges and agrees that each agreement and
other document executed by Purchaser in accordance with or in respect of this
transaction shall be deemed and treated to include in all respects and for all
purposes the foregoing exculpatory provision.
22. RIGHT TO AUDIT. Without limiting any other rights or remedies of
Purchaser, Purchaser shall have the right after the Closing to audit the books
and records of Seller in respect of the Property for those last two entire
fiscal years of Seller's ownership of the Property ending immediately preceding
the Closing plus any "stub" period thereafter to such Closing; provided,
however, any matters disclosed by such audit (other than fraud) shall not be
the basis or the foundation for a claim of a breach of a representation or
warranty by the Seller.
23. TIME OF ESSENCE. Time is of the essence of this Agreement.
<PAGE>
24. NOTICES. Any notice or demand which either party hereto is required
or may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by facsimile or
overnight courier such as Federal Express or made by United States registered
or certified mail addressed as follows:
TO SELLER: c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attn: Ilona Adams
847/267-1600
847/317-4462 (FAX)
with copies to: The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attn: James Mendelson
847/267-1600
847/317-4461 (FAX)
and
Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, Illinois 60661
Attn: Daniel J. Perlman, Esq.
312/902-5520
312/902-1061 (FAX)
TO PURCHASER: New Plan Realty Trust
1120 Avenue of the Americas
New York, New York 10036
Attn: Legal Department
212/869-3000
212/302-4776 (FAX)
with a copy to: Robert Horwitch, Esq.
Altheimer & Gray
10 S. Wacker Drive
Suite 4000
Chicago, Illinois 60606
312/715-4000
312/715-4800 (FAX)
<PAGE>
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be
deemed to be delivered or made on the next business day if sent by overnight
courier, or on the same business day if sent by facsimile before the close of
business, or the next business 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. Any party's above named attorney may give an effective and
binding notice in accordance with this Paragraph 24 on behalf of such party.
25. DISTRIBUTIONS. For a period of one hundred and twenty (120) days
after the Closing Date, Seller shall not distribute $250,000.00 from the
proceeds of the net cash received from the Purchaser at the Closing. If at any
times Purchaser alleges claims for damages against Seller after the Closing
Date, but prior to the expiration of the aforesaid one hundred twenty (120) day
period ("Claims"), then at and after the end of 120 day period the Seller shall
continue to withhold distribution of the funds in an amount equal to the lesser
of (i) the amount of the Claims, or (ii) $250,000.00, until the Claims are
resolved. The Claims shall specify the exact representation, warranty or
closing document (which shall be limited to those documents specified in
Paragraph 9 hereof), which was allegedly breached and the amount of damages the
Purchaser alleges it has sustained.
26. EXECUTION BY THE BALCOR COMPANY. The Balcor Company executes this
Agreement solely for the purpose of assuring to Purchaser that if the Seller
fails to withhold or pay the sums required of Seller pursuant to Paragraph 25
and if Purchaser is successful in any claims asserted against the Seller for a
breach of a representation, warranty or closing document (which shall be
limited to those documents specified in Paragraph 9 hereof), then The Balcor
Company shall pay to Purchaser the amount of such claim(s), the total of which
shall not exceed $250,000.00.
27. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute
three (3) copies of this Agreement and three (3) copies of the Escrow Agreement
and forward them to Seller for execution, accompanied with the Earnest Money
payable to the Escrow Agent. Seller will forward one (1) copy of the executed
Agreement to Purchaser and will forward the following to the Escrow Agent:
a. Earnest Money;
b. One (1) fully executed copy of this Agreement; and
c. Three (3) copies of the Escrow Agreement signed by the parties
with a direction to execute two (2) copies of the Escrow Agreement after
receipt of the Earnest Money and deliver a fully executed copy to the Purchaser
and the Seller.
<PAGE>
28. GOVERNING LAW. The provision contained herein with reference to
retention of the Earnest Money in the event of Purchaser's default shall be
governed by the laws of the State of Illinois. The remaining provisions of
this Agreement shall be governed by the laws of the State of Ohio.
29. FURTHER ASSURANCES. In addition to the obligations required to be
performed under this Agreement by Seller on the Closing Date, from time to time
subsequent to such Closing Date, Seller shall perform such other acts and shall
execute and deliver such other agreements and documents as Purchaser reasonably
may request in order to effectuate the consummation of this transaction.
Likewise, in addition to the obligations required to be performed under this
Agreement by Purchaser on the Closing Date, from time to time subsequent to
such Closing Date, Purchaser shall perform such other acts and shall execute
and deliver such other agreements and documents as Seller reasonably may
request in order to effectuate the consummation of this transaction.
30. 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.
31. 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.
32. 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.
33. WORK. Purchaser acknowledges that Seller has entered into the
following three construction contracts (collectively, the "Construction
Contracts"):
a. Standard Form of Agreement between Owner and Contract (AIA
Document A101/CMa-1992) dated January 17, 1997 ("Fireblock Contract") between
Spring Creek Investors, as Owner, and Wiser Painting, as Contractor ("Wiser").
b. One-page Insignia Management Group, Agent L.P. Independent
Contract Agreement dated May 20, 1997 ("Wall Contract") between Spring Creek
Investors, as Owner, and Wiser Painting, as Contractor.
c. One-page Insignia Management Group, Agent L.P. Independent
Contract Agreement dated May 20, 1997 ("Access Panel Contract") between Spring
Creek Investors, as Owner, and Wiser Painting, as Contractor.
The total work set forth in the Construction Contracts is hereinafter
collectively referred to as the "Work". To the best of its knowledge (as set
forth in Paragraph 19.a. hereof), Seller warrants and represents to Purchaser
as follows: (i) the Work under the Construction Contracts described as items
(b and (c) above (collectively, the "Completed Construction Contracts") has
been duly completed in full and in accordance with the Completed Construction
Contracts; (ii) Seller has duly paid all of the monies required to be paid to
<PAGE>
the Contractors under the Completed Construction Contracts; (iii) the
Construction Contracts consist only of the above-described forms of agreement;
(iv) the Construction Contracts have not been amended, modified, supplemented
or superseded in any manner whatsoever; (v) the Construction Contracts are in
full force and effect are legal, valid, binding and enforceable; (vi) there is
no default, whether existing or alleged, under the Fireblock Contract by Seller
or Wiser and there is no fact or event which, with the passage of time or the
giving of notice or both, would constitute a default by Seller or Wiser and,
without limiting the foregoing, there has been no allegation by Seller or its
construction manager of any defective or nonconforming work or other claim;
(vii) the Contract Sum, as defined in the Fireblock Contract is $104,129.00;
(viii) such Contract Sum includes $ N/A for that so-called additional work
consisting of 4" flex replacement to hard pipe and clamps; (ix) Wiser has no
pending claims for any increase in such Contract Sum under the Fireblock
Contract; (x) to date, Wiser has been paid $59,279.00 under the Fireblock
Contract and, therefore, the remaining sum to be paid to Wiser is $44,850.00
and of such last mentioned sum $4,485.00 represents the current 10% retainage,
(xi) the remaining work not yet completed by Wiser under the Fireblock Contract
consists of draft stops in the flooring system of 34 apartment units.
Seller shall cause Wiser to perform its work in accordance with the
Fireblock Contract. On the Closing Date, Seller shall deliver to Purchaser and
the Title Insurer appropriate contractor's sworn statements and lien waivers
for all amounts paid under the Construction Contracts and, as concerns the
Fireblock Contract, an estoppel certificate (in the form of Exhibit S attached
hereto) from Wiser under the Fireblock Contract. In addition, Seller shall
provide the Title Insurer with those documents which are customarily required
by the Title Insurer to issue mechanic lien coverage in respect of the
Construction Contracts. Seller shall give a credit to Purchaser at the Closing
for $44,850, which represents the unpaid balance under the Fireblock Contract;
and Seller shall assign and Purchaser shall assume all liabilities under the
Fireblock Contract for which a credit was received for the period commencing
from and after the Closing Date. Seller shall assign to Purchaser all of its
and all of Owner's rights, titles and interests under the Construction
Contracts. Seller shall assign to Purchaser its and all of Owner's rights with
respect to warranties, guaranties and indemnification undertakings under the
Abbreviated Form of Agreement between Owner and Contractor (AIA Document
A-107-1987) dated July 15, 1996 between Spring Creek Investors and Nationwide
Renovations, Inc. Also, at Closing, Purchaser shall receive a final credit
against the Purchase Price for the amount of $25,000.00, which represents a
reasonable estimate of the aggregate amount of the relocation costs and rent
concessions to be incurred by Purchaser with respect to tenants at the Property
as a result of the completion of the work under the Fireblock Contract.
All of the foregoing warranties and representations of Seller shall be
reaffirmed and restated on and as of the Closing Date and shall survive the
Closing and delivery of the Deed for a period of 120 days.
[EXECUTION PAGE FOLLOWS]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as
the date set forth above.
Executed by Purchaser on PURCHASER:
May 30, 1997.
NEW PLAN REALTY TRUST, a Massachusetts
business trust
By: /s/ James M. Stueterman
-----------------------------------
Name: James M. Stueterman
-----------------------------------
Its: EVP
-----------------------------------
Executed by Seller on SELLER:
May 30, 1997.
5811 SPRING RUN LIMITED PARTNERSHIP,
an Illinois limited partnership
By: 5811 Spring Run, Inc., an Illinois
corporation, its general partner
By: /s/ Michael J. Becker
-----------------------------------
Name: Michael J. Becker
-----------------------------------
Its: Managing Director
-----------------------------------
<PAGE>
JOINDER
The undersigned executes this joinder solely for the purposes of
effectuating its obligations arising under Paragraph 26 of this Agreement.
THE BALCOR COMPANY, a Delaware
corporation
By: /s/ Michael J. Becker
-------------------------------
Name: Michael J. Becker
-------------------------------
Its: Managing Director
-------------------------------
<PAGE>
Spring Creek Apartments
Columbus, Ohio
of Insignia Mortgage & Investment Company ("Seller's Broker")
executes 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 as of November 20, 1996 between Seller and Seller's Broker
(the "Listing Agreement"), and that Purchaser has no liability or
responsibility whatsoever for such fee or commission. 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, a release stating that no other fees or
commissions are due to it from Seller or Purchaser and a waiver of broker's
lien in form and substance satisfactory to Title Insurer.
INSIGNIA MORTGAGE & INVESTMENT COMPANY
By:
-----------------------------------
Name:
-----------------------------------
Its:
-----------------------------------
<PAGE>
EXHIBITS
A - Legal
B - Personal Property
C - Escrow Agreement
D - Title Commitment
E - Special Warranty Deed
F - Bill of Sale
G - Assignment and Assumption of Service Contracts
H - Assignment and Assumption of Leases
I - Assignment of Guarantees, Warranties, Permits, Licenses and Approvals
J - Notice to Tenants
K - FIRPTA Affidavit
L - Assignment and Assumption of Intangible Property
M - Reaffirmation of Representations and Warranties
N - Rent Roll
O - Service Contracts
P - Intentionally Omitted
Q - Certificate of Rent Roll
R - Disclosures
S - Contractor Estoppel
<PAGE>
THIRD AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT
THIS THIRD AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT (this
"Amendment") is made and entered into as of this 11th day of June, 1997, by and
between AMBASSADOR VIII, L.P., a Delaware limited partnership ("Purchaser") and
PARK COLONY INVESTORS, an Illinois limited partnership ("Seller").
WITNESSETH:
WHEREAS, Seller and Purchaser are parties to that certain Agreement of
Sale, dated as of April 30, 1997 (the "Original Agreement"), that certain First
Amendment to Agreement of Sale dated May 6, 1997 (the "First Amendment") and
that certain Second Amendment to Agreement of Sale dated June 4, 1997 (the
"Second Amendment") (as amended the Original Agreement is hereinafter referred
to as the "Agreement"), pursuant to which Purchaser has agreed to purchase and
Seller has agreed to sell certain Property (as defined in the Agreement)
legally described and depicted on Exhibit A attached to the Agreement;
WHEREAS, Seller and Purchaser entered into that certain Escrow Agreement
dated as of May 7, 1997 (the "Escrow Agreement") with respect to the
transaction contemplated by the Agreement; and
WHEREAS, Seller and Purchaser desire to amend the Agreement and the Escrow
Agreement in accordance with the terms of this Amendment.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. All terms not otherwise defined herein shall have the meanings ascribed to
each in the Agreement.
2. All references to the term "Closing Date" in the Agreement shall mean July
15, 1997, or any earlier date designated by Purchaser upon no less than five
(5) business days prior written notice to Seller; provided, however, that in
the event that Purchaser designates a Closing Date prior to July 1, 1997, then
Paragraphs 4, 5 and 6 of this Amendment shall be deleted and the references to
the dates contained therein shall remain as originally stated in the Agreement
and the Escrow Agreement, respectively.
3. Purchaser agrees to deposit $200,000.00 with the Escrow Agent as additional
earnest money concurrently herewith. Such sum shall be included within the
definition of Earnest Money for which Purchaser shall receive a credit at
Closing. Moreover, Seller and Purchaser hereby direct Escrow Agent to
immediately release $200,000.00 of the currently existing Earnest Money to
Seller pursuant to wiring instructions to be provided by Seller. After the
release of such $200,000.00 and the deposit of the additional $200,000.00 by
Purchaser, the total Earnest Money for this transaction will be $600,000.00
($400,000.00 held by Escrow Agent and $200,000.00 released to Seller) Purchaser
shall receive a credit at Closing for the entire Earnest Money and all interest
earned thereon. Notwithstanding anything to the contrary contained in the
Agreement, if Purchaser is entitled to a return of the Earnest Money, all of
<PAGE>
the Earnest Money (regardless of who holds it) will be paid to Purchaser.
4. All references to "July 31, 1997" in Paragraph 12.3 and Paragraph 16.4 of
the Agreement and Paragraphs 7, 8 and 9 in the Escrow Agreement shall change to
"September 1, 1997."
5. All references to "August 1, 1997" in Paragraph 7 of the Escrow Agreement
shall change to "September 2, 1997."
6. All references to "August 11, 1997" in Paragraph 10 in the Escrow Agreement
shall change to "September 12, 1997."
7. Except as amended hereby, the Agreement and the Escrow Agreement shall be
and remain unchanged and in full force and effect in accordance with its terms.
8. This Amendment may be executed in counterparts each of which shall be
deemed an original, but all of which, when taken together shall constitute one
and the same instrument. To facilitate the execution of this Amendment, Seller
and Purchaser may execute and exchange by telephone facsimile counterparts of
the signature pages, with each facsimile being deemed an "Original" for all
purposes.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first set forth above.
PURCHASER:
AMBASSADOR VII, L.P., a Delaware limited
partnership
By: Ambassador VIII, Inc.,, a Delaware
corporation
By: /s/ Debra A. Cafaro
---------------------------------
Name: Debra A. Cafaro
---------------------------------
Its: President
---------------------------------
SELLER:
PARK COLONY INVESTORS,
an Illinois limited partnership
By: Balcor Partners-84II, Inc., a Delaware
corporation, its general partner
By: /s/ Michael J. Becker
---------------------------------
Name: Michael J. Becker
---------------------------------
Its: Managing Director
---------------------------------
