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) August 26, 1996
BALCOR REALTY INVESTORS - 85 SERIES I
A REAL ESTATE LIMITED PARTNERSHIP
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Exact Name of Registrant
Illinois 0-14353
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State or other jurisdiction Commission file number
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 36-3244978
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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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Templeton Park Apartments
In 1984, the Partnership acquired the Templeton Park Apartments, Colorado
Springs, Colorado, utilizing approximately $9,963,250 in offering proceeds.
The property was acquired subject to first mortgage financing of approximately
$14,334,000.
On August 26, 1996, the Partnership contracted to sell the property for a sale
price of $24,500,000 to an unaffiliated party, Griffis/Blessing, Inc., a
Colorado corporation. The purchaser has deposited $300,000 into an escrow
account as earnest money and will pay the remaining $24,200,000 at closing,
which is scheduled for November 18, 1996. The closing date may be extended to
December 17, 1996, upon written notice by the purchaser and receipt of an
additional $50,000 in earnest money. From the proceeds of the sale, the
Partnership will pay $306,250 to a third party as a brokerage commission, a fee
of $183,750 to an affiliate of the third party providing property management
services for the property for services rendered in connection with the sale of
the property, and will repay the first mortgage loan which is expected to have
an outstanding balance at closing of approximately $11,568,000. The General
Partner will be reimbursed by the Partnership for its actual expenses incurred
in connection with the sale. The Partnership will receive the remaining
proceeds of approximately $12,442,000, less closing costs.
The closing is subject to the satisfaction of numerous terms and conditions.
There can be no assurance that all of the terms and conditions will be complied
with and, therefore, it is possible the sale of the property may not occur.
Item 5. Other Information
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North Hill Apartments
North Hill Apartments, Atlanta, Georgia, is owned by a limited partnership (the
"Joint Venture"), the general partner of which is a joint venture between the
Partnership and an affiliate. As previously reported, on July 15, 1996, the
Joint Venture contracted to sell North Hill Apartments, Atlanta, Georgia, to an
unaffiliated party, Jupiter Realty Corporation, an Illinois corporation, for a
sale price of $24,000,000. On August 29, 1996, the purchaser exercised its
option to terminate the agreement of sale.
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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 attachments thereto relating to the sale
of the Templeton Park Apartments, Colorado Springs, Colorado.
(99) Letter of Termination relating to the sale of North Hill
Apartments, Atlanta, Georgia
No information is required under Items 1, 3, 4, 6 and 8 and these items have,
therefore, been omitted.
<PAGE>
Signature
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
BALCOR REALTY INVESTORS 85 - SERIES I
A REAL ESTATE LIMITED PARTNERSHIP
By: Balcor Partners-XVI, an Illinois
general partnership, its general partner
By: RGF-Balcor Associates-II, an Illinois
general partnership, a partner
By: The Balcor Company, a Delaware corporation,
a partner
By: /s/ Jerry M. Ogle
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Jerry M. Ogle, Vice President
and Secretary
Dated: September 10, 1996
<PAGE>
AGREEMENT OF SALE
THIS AGREEMENT, entered into as of the 26 day of August, 1996, by and
between GRIFFIS/BLESSING, INC., a Colorado corporation ("Purchaser") and
TEMPLETON INVESTORS, an Illinois Limited Partnership ("Seller").
WITNESSETH:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to
sell at the price of Twenty-Four Million Five Hundred Thousand and No/100
Dollars ($24,500,000.00) ("Purchase Price"), that certain property ("Property")
in Colorado Springs, Colorado, more particularly described on Exhibit A
attached hereto, which Property is known as Templeton Park Apartments.
Included in the Purchase Price is the following:
a. That certain real property ("Real Property") in Colorado
Springs, Colorado, and more particularly described on Exhibit A attached
hereto, together with improvements thereon consisting of a 72 building/496 unit
apartment complex, pools, party rooms, parking and other amenities
("Improvements"), which is known as Templeton Park Apartments;
b. All of Seller's right, title and interest in and to any and all
the personal property set forth on Exhibit B which shall be transferred to
Purchaser at Closing (as hereinafter defined) by a Bill of Sale ("Personal
Property");
c. All of Seller's right, title and interest in and to any and all
utility taps, licenses, permits, contract rights, warranties, guarantees, and
all variations thereof (except reimbursements), and in any and all other
intangible personal property associated with or related to the Real Property or
the Improvements ("Intangibles");
d. All of Seller's right, title and interest in and to any and all
contracts and all other intangible personal property associated with or related
to the Real Property and Improvements ("Service Contracts"); and
e. All tenants leases and security deposits at the Real Property
described on Exhibit K ("Leases"). The Real Property and Improvements,
Personal Property, Intangibles, Service Contracts and Leases are collectively
called the "Property".
2. PURCHASE PRICE. The Purchase Price shall be paid as follows:
a. Upon the execution of this Agreement, the sum of $300,000.00
("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), $24,500,000.00
(inclusive of all 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 12:00 Noon Central Time on the Closing
Date. If the funds are not received by the Title Insurer by 12:00 Noon Central
Time, then, on the Closing Date, Purchaser shall pay Seller an amount equal to
any additional mortgage per diem interest costs incurred by the Seller.
<PAGE>
3. TITLE COMMITMENT AND SURVEY.
a. Attached hereto as Exhibit D is a title commitment dated June
14, 1996 ("Title Commitment") for an owner's standard coverage title insurance
policy ("Title Policy") issued by Lawyers Title Insurance Corporation ("Title
Insurer"). The owner's Title Policy issued at Closing will be in the amount of
the Purchase Price subject only to real estate and personalty taxes not yet due
and payable, and the special title exceptions set forth in Schedule B-Section
2, Numbers 6 through 13 of the Title Commitment plus an exception for leases
and tenancies at the Property. All of the above are herein referred to as the
"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
conformity with the Title Commitment. Seller shall pay the costs of the Title
Policy; however, Purchaser shall pay 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 Spiska Engineering Inc. dated March 7, 1985. Prior to the
Closing, Seller will have the Survey updated and certified to the Purchaser,
the Title Insurer, and the Purchaser's lender. Seller shall pay the cost of
the updated Survey. However, if Purchaser requires any additional survey work,
Purchaser shall pay for the cost of such additional work. If the updated
Survey discloses matters which are not reflected on the original Survey and
which would prevent the Title Insurer from deleting the survey exception from
the Title Policy ("Survey Defects"), then upon notice delivered to Seller by
Purchaser within five (5) days after receipt of the updated Survey, Seller
shall either cause the Survey Defects to be removed from the updated Survey or
cause the Title Insurer to insure against loss or damage resulting from the
Survey Defects ("Title Indemnity"). If Seller is unwilling to (i) have the
Survey Defects removed from the updated Survey or (ii) cause the Title Insurer
to issue a Title Indemnity to Purchaser within five (5) days after receipt of
notice from Purchaser of the Survey Defects, then Purchaser shall have the
right to elect to terminate this Agreement. Purchaser shall notify Seller of
its election within three (3) days after receipt of notice from Seller that the
Survey Defects will not be removed or that the Title Insurer will not issue the
Title Indemnity. If Purchaser fails to make the election within the aforesaid
three (3) days, then it shall be conclusively presumed that Purchaser has
elected to take title to the Property subject to the Survey Defects. If
Purchaser elects to terminate this Agreement pursuant to this Paragraph, then
the Earnest Money plus all accrued interest shall be delivered to Purchaser.
4. CONDITION OF TITLE/CONVEYANCE. Seller agrees to convey fee simple
title to the Property by Special Warranty Deed ("Deed") in recordable form
subject only to the Permitted Exceptions. 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
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. Notwithstanding the aforesaid, Seller will be obligated to
remove all Unpermitted Exceptions of a definite ascertainable amount on or
before the Closing Date.
<PAGE>
5. PAYMENT OF CLOSING COSTS. Purchaser and Seller shall equally share
the costs of the documentary stamps (if any) to be paid with reference to the
Deed and all other stamps, intangible, documentary, recording, sales tax and
surtax imposed by law with reference to any other documents delivered in
connection with this Agreement.
6. DAMAGE, CASUALTY AND CONDEMNATION.
a. If the Property suffers damage as a result of any casualty prior
to the Closing Date and can be repaired or restored in the case of Real
Property for $100,000 or less, or in the case of Personal Property, for $10,000
or less, then Seller shall commence the repair or restoration in an expeditious
manner, in which event the Closing Date will be extended until such date as may
reasonably be required to complete the repair or restoration in a good and
workmanlike manner. Seller shall retain all insurance proceeds. If the cost
of repair or restoration exceeds the amounts stated above, then Seller can
elect to either: (a) repair and restore same upon prior notice to Purchaser
served within twenty (20) business days of such casualty and provided Purchaser
has elected in writing to not terminate this Agreement in its sole discretion,
in which event the Closing Date will be extended until such date as may
reasonably be required to complete the repair or restoration; or (b) terminate
this Agreement upon notice to Purchaser served within twenty (20) business days
of such casualty. If Seller elects to terminate this Agreement pursuant to
this Paragraph, then Purchaser will have the option to 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,
provided Purchaser notifies Seller by notice served within twenty (20) days
after receipt of Seller's notice of election to terminate. If Seller is
required to repair or restore the Property, then Purchaser shall have the right
to elect to close prior to the completion of the restoration. In such event,
the parties shall enter into an escrow agreement on the Closing Date whereby
Seller shall deposit into the escrow sufficient funds in order to pay for the
repair or restoration.
b. If condemnation proceedings ("Proceedings") are instituted
against the Property and the parties reasonably believe that such Proceedings
will result in an award in excess of $100,000.00, then Purchaser can elect to
either take the Property subject to the Proceedings and an assignment of
Seller's interest in the Proceedings or terminate this Agreement. If Purchaser
elects to terminate this Agreement, it shall be by notice to the Seller within
five (5) days after Seller notifies Purchaser of the Proceedings.
c. If the Agreement is terminated pursuant to this Paragraph a or
b, then the Earnest Money plus all accrued interest shall be delivered to the
Purchaser.
7. AS-IS CONDITION.
a. Purchaser acknowledges and agrees that it will be purchasing the
Property based solely upon its inspection and investigations of the Property
and that Purchaser will be purchasing the Property "AS IS" and "WITH ALL
FAULTS" based upon the condition of the Property as of the date of this
Agreement, subject to reasonable wear and tear and loss by fire or other
casualty or condemnation 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 or the
Deed, neither Seller nor its consultants, brokers or agents have made any other
<PAGE>
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 any fire
codes or building codes. Purchaser hereby releases Seller from any and all
liability in connection with any claims which Purchaser may have against
Seller, and Purchaser hereby agrees not to assert any claims, for 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
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.
<PAGE>
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. Seller makes no representation or
warranty that such material is complete or accurate or that Purchaser will
achieve similar financial or other results with respect to the operations of
the Property, it being acknowledged by Purchaser that Seller's operation of the
Property and allocations of revenues or expenses may be vastly different than
Purchaser may be able to attain. Purchaser acknowledges that it is a
sophisticated and experienced purchaser of real estate and further that
Purchaser has relied upon its own investigation and inquiry with respect to the
operation of the Property and releases Seller from any liability with respect
to such historical information.
8. CLOSING.
a. The closing ("Closing") of this transaction shall be on November
18, 1996 ("Closing Date"), at the office of the Purchaser's attorney, at which
time Seller shall deliver possession of the Property to Purchaser.
b. Purchaser can elect to change the Closing Date to a date which
is earlier than November 18, 1996 and which is mutually acceptable to Purchaser
and Seller ("Accelerated Closing Date"), provided that Purchaser delivers
notice to the Seller and Escrow Agent no later than ten (10) days prior to the
Accelerated Closing Date.
c. Upon Notice delivered to the Seller and Escrow Agent no later
than November 12, 1996, Purchaser shall have the right to extend the Closing
Date to December 17, 1996, ("Extended Closing Date") provided that the Notice is
accompanied by federally wired funds or a cashier's or unendorsed certified
check in the sum of $50,000.00 as additional Earnest Money to be deposited with
and held by Escrow Agent in accordance with the provisions of the Escrow
Agreement. Thereafter, all references herein to the Closing Date shall mean
the Extended Closing Date. The additional deposit of $50,000.00 shall be
credited to the balance of the Purchase Price due at Closing.
9. CLOSING DOCUMENTS.
a. On the Closing Date, Purchaser shall deliver to Seller an
executed closing statement, the balance of the Purchase Price, and such other
documents as may be reasonably required in order to consummate the transaction
as set forth in this Agreement.
b. On the Closing Date, 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;
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); updated and
certified rent roll; 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 (in the form of Exhibit I attached
hereto); a non-foreign affidavit (in the form of Exhibit J attached hereto); an
executed Assignment of Intangibles (in the form of Exhibit M attached hereto);
<PAGE>
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. ALL EARNEST MONEY DEPOSITED INTO THE ESCROW IS
TO SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND
UNDERTAKINGS UNDER THIS AGREEMENT. SUBJECT TO PARAGRAPH WITH RESPECT TO THE
APPROVAL PERIOD DATE CONTINGENCY, IN THE EVENT OF A MATERIAL 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. 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 RIGHT TO RECOVER ACTUAL THIRD
PARTY COSTS IN AN AMOUNT NOT TO EXCEED THE AMOUNT OF EARNEST MONEY THEN ON
DEPOSIT WITH THE ESCROW AGENT AND THE RETURN OF ALL EARNEST MONEY TOGETHER WITH
ANY INTEREST ACCRUED THEREON, AND THIS AGREEMENT SHALL TERMINATE AND THE
PARTIES SHALL HAVE NO FURTHER LIABILITY TO EACH OTHER AT LAW OR IN EQUITY.
HOWEVER, IF SELLER'S DEFAULT IS ITS REFUSAL TO DELIVER THE DEED AND THE OTHER
DOCUMENTS REQUIRED TO BE DELIVERED AT CLOSING, THEN PURCHASER MAY SUE FOR
SPECIFIC PERFORMANCE.
12. a. PRORATIONS. Rents (exclusive of delinquent rents, but including
prepaid rents); refundable security deposits (which will be assigned to and
assumed by Purchaser and credited to Purchaser at Closing); water and other
utility charges; fuels; prepaid operating expenses; management fees in the
amount of 5% of collections; real and personal property taxes; and other
similar items shall be adjusted ratably as of 11:59 P.M. on the day before
Closing Date ("Proration Date"), and credited or debited to the balance of the
cash due at Closing. If for any reason the Proration Date is earlier than the
Closing Date, then for the period from the Proration Date through the Closing
Date, Purchaser shall be entitled to the benefit of all of the income from the
Property and shall bear the burden of all of the operating expenses of the
Property, including, but not limited to, insurance, service contracts, employee
wages and benefits, management fees, utility costs and interest on the existing
mortgages encumbering the Property (if any). If the amount of any of the items
to be prorated is not then ascertainable, the adjustment thereof shall be on
the basis of the most recent ascertainable data. All prorations will be final
except as to Delinquent Rents referred to in b below. If special assessments
have been levied against the Property for completed improvements, then the
amount of any installments which are due prior to the Closing Date shall be
paid by the Seller; and the amount of installments which are due after the
Closing Date shall be paid by the Purchaser. All assessments for incomplete
improvements shall be paid by Purchaser.
b. DELINQUENT RENTS. If, as of the Closing Date, any rent is in
arrears ("Delinquent Rent"), then any Delinquent Rent received by Purchaser
within thirty (30) days of Closing shall be paid to Seller. All other
Delinquent Rent shall remain property of the Purchaser. This subparagraph of
this Agreement shall survive the Closing and the delivery and recording of the
Deed.
<PAGE>
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 .
14. ASSIGNMENT. The Purchaser shall not have the right to assign its
interest in this Agreement and the Escrow 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 . Seller
hereby consents to an assignment of this Agreement and the Escrow Agreement to
an entity in which the same persons owning Purchaser own an interest even if
such interest is not a controlling interest and its trade facilitator in
connection with any IRS Section 1031 exchange; provided that such assignment is
effected at least 15 business days prior to the Closing Date.
15. BROKER.
a. The parties hereto acknowledge that CB Commercial Real Estate
Group, Inc. ("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, this Fee is due and
payable only from the proceeds of the Purchase Price received by Seller.
Except for fees which Purchaser may pay to its partners or affiliates of its
partners pursuant to Purchaser's partnership agreement, Purchaser has not paid
and will not pay before, at or after the Closing any fees, commissions or
compensation to any person directly or indirectly on account of this Agreement,
its negotiation or the sale contemplated hereby. 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 claiming by or through Purchaser any fee, commission or compensation
on account of this Agreement, its negotiation or the sale hereby contemplated.
Purchaser does now and shall at all times consent to a Seller Indemnitee's
selection of defense counsel. Seller agrees to indemnify, defend and hold
harmless the Purchaser and all shareholders, employees, officers and directors
of Purchaser or Purchaser's parent or affiliate (each of the above is
individually referred to as a "Purchaser Indemnitee") from all claims,
including attorneys' fees and costs incurred by a Purchaser Indemnitee as a
result of anyone's claiming by or through Seller any fee, commission or
compensation on account of this Agreement, its negotiation or the sale hereby
contemplated. Seller does now and shall at all times consent to a Purchaser
Indemnitee's selection of defense counsel.
b. Seller acknowledges that Purchaser and/or its principals are
real estate brokers and/or agents licensed in the states of Colorado, North
Carolina and/or California. Seller also acknowledges that certain principals
of Purchaser are affiliated with (as agents or brokers) the Broker. Seller
also acknowledges that Purchaser and/or principals of Purchaser have no agency
relationship or fiduciary duty to Seller.
<PAGE>
16. DOCUMENTS, INSPECTION OF PROPERTY AND APPROVAL PERIOD.
a. Seller has delivered (or will make available) to Purchaser
copies of the most recent available tax bills, rent rolls, Survey, Leases
(which are available for inspection and copying at the Property), insurance
premiums, Service Contracts, Title Commitment, and all of Seller's books and
records pertaining to the operation and management of the Property (which are
available for inspection and copying at the Property) (collectively the
"Documents"). All of the Documents shall be subject to approval by Purchaser
by the close of business (5:00 P.M. Central Time) on September 18, 1996
("Approval Period"). During the Approval Period, upon reasonable notice to the
Seller, the Purchaser shall have the right to inspect and approve the condition
of the Property, including the interior of the apartments, during normal
business hours. Purchaser, its engineers, architects, employees, contractors
and agents shall maintain public liability insurance policies insuring against
claims arising as a result of the inspections of the Property being conducted
by Purchaser. Prior to commencing any tests, studies and investigations,
Purchaser shall deliver to Seller a certificate of insurance evidencing the
existence of the aforesaid policies and naming Seller as an additional insured.
Purchaser agrees to indemnify, defend, protect and hold Seller harmless from
any and all loss, costs, including attorneys' fees, liability or damages which
Seller may incur or suffer as a result of Purchaser's 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.
c. If Purchaser disapproves the Documents or the condition of the
Property, which disapproval may be in its sole discretion, it must be by a
notice ("Notice of Disapproval") delivered to Seller and the Escrow Agent prior
to the expiration of the Approval Period. The Notice of Disapproval delivered
to Seller shall be accompanied with copies of all reports ("Reports") which
Purchaser has received during the Approval Period. Upon receipt of the Notice
of Disapproval and copies of the Reports, the Earnest Money plus the interest
accrued thereon shall be returned to the Purchaser except for $25,000.00 which
shall be remitted to Seller unless Seller is in default or the Property
contains an Unpermitted Exception which cannot be removed by Seller. If
Purchaser does not deliver a Notice of Disapproval and copies of the Reports to
Seller, then it shall be conclusively presumed that Purchaser has approved the
Documents and the condition of the Property and all Earnest Money plus the
interest accrued thereon shall belong to Seller unless Seller is in default
hereunder.
17. SURVIVAL OF PURCHASER'S INDEMNITY. Notwithstanding anything in this
Agreement to the contrary, Purchaser's obligation to indemnify, defend and hold
Seller harmless under various provisions of this Agreement shall forever
survive the termination of this Agreement or the Closing and delivery and
recording of the Deed.
<PAGE>
18. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
a. Any reference herein to Seller's knowledge, representation,
warranty or notice of any matter or thing, shall only mean such knowledge or
notice that has actually been received by Phillip Schechter and Mark Van De Hey
(the asset manager), and any representation or warranty of the Seller is based
upon those matters of which Phillip Schechter or Mark Van De Hey has actual
knowledge. Any knowledge or notice given, had or received by any of Seller's
agents, servants or employees shall not be imputed to Seller 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 which shall
survive the Closing and delivery of the Deed for a period of ninety (90) days:
i. The present use and occupancy of the Property conform with
applicable building and zoning laws and Seller has received no written notice
that any such laws, rules or regulations are being violated.
ii. The rent roll ("Rent Roll") attached hereto as Exhibit K
which will be updated as of the Closing Date is true and accurate.
iii. Seller has no knowledge of any pending or threatened
litigation, claim, cause of action or administrative proceeding concerning the
Property.
iv. Seller has not received any written notice from any
governmental authority that the Property contains Hazardous Materials or
Hazardous Substances.
v. Attached hereto as Exhibit N is a list of all Service
Contracts affecting the Property.
c. Seller covenants that:
i. The management, operation, leasing and maintenance of the
Property, as presently conducted by the Seller, shall continue until the
Closing Date.
d. If on or prior to the Closing Date, Seller discovers that a
representation or warranty is untrue, then upon receipt of notice from Seller,
Purchaser can elect to terminate this Agreement or take title to the Property
subject to the untrue representation or warranty. If Purchaser elects to
terminate this Agreement, then the Earnest Money plus all accrued interest
shall be delivered to Purchaser.
19. ENVIRONMENTAL REPORT. Attached to this Agreement as Exhibit L is a
list of reports ("Reports") of the Property, which Seller has delivered to
Purchaser, at Purchaser's request. Seller makes no representation or warranty
that the Reports are accurate or complete. Purchaser hereby releases Seller
from any liability whatsoever with respect to the Reports, including, without
limitation, the matters set forth in the Reports or the accuracy and/or
completeness of the Reports.
<PAGE>
20. LIMITATION OF SELLER'S LIABILITY. 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. The provisions of this Paragraph shall also apply
to the Assignment of Leases (Exhibit H) notwithstanding that it has been
omitted therefrom.
21. PURCHASER'S ORGANIZATIONAL DOCUMENTS. At least ten (10) days prior
to the Closing Date, Purchaser will provide Seller's attorney with copies of
its organizational documents, including a certified copy of its recorded
certificate of limited partnership and a true copy of its Partnership Agreement
or a certified copy of its Articles of Incorporation, corporate resolutions
authorizing the transaction, and an incumbency certificate, whichever is
applicable.
22. TIME OF ESSENCE. Time is of the essence of this Agreement.
23. NOTICES. Any notice or demand which either party hereto is required
or may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by overnight courier
such as Federal Express or by facsimile or made by United States registered or
certified mail addressed as follows:
TO SELLER: c/o The Balcor Company
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attn: Ilona Adams
with copies to: The Balcor Company
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attn: Al Lieberman
847/267-1600
847/317-4462 (FAX)
and
Morton M. Poznak
Schwartz & Freeman
Suite 1900
401 North Michigan Avenue
Chicago, Illinois 60611
312/222-0800
312/222-0818 (FAX)
<PAGE>
TO PURCHASER: Ian C. Griffis
Griffis/Blessing
102 N. Cascade Ave.
Fifth Floor
Colorado Springs, Colorado 80903
719/520-1234
719/520-1204 (FAX)
with a copy to: Gilbert G. Weiskopf
Braden, Frindt, Stinar & Stageman L.L.C.
102 N. Cascade
Suite 350
Colorado Springs, Colorado 80903
719/635-4200
719/635-2493 (FAX)
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be
deemed to be delivered or made on the next business day if sent by overnight
courier, or on the same day if sent by facsimile before 5:00 P.M. Central Time
or the next day if sent by facsimile after 5:00 P.M. Central 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 or by overnight courier or by
facsimile as aforesaid shall be deemed to be given, delivered or made upon
receipt of the same by the party to whom the same is to be given, delivered or
made. Copies of all notices shall be served upon the Escrow Agent.
24. SELLER'S COOPERATION - 1031 EXCHANGES. Seller agrees to cooperate
with Purchaser to effect one or more IRS Code Section 1031 tax deferred
exchanges, provided there shall be no added cost, liability or delay hereunder
to Seller as a result of such cooperation.
25. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute
three (3) copies of this Agreement and three (3) copies of the Escrow Agreement
and forward them to Seller for execution, accompanied with the Earnest Money
payable to the Escrow Agent. Seller will forward one (1) copy of the executed
Agreement to Purchaser and will forward the following to the Escrow Agent:
a. Earnest Money;
b. One (1) fully executed copy of this Agreement; and
c. Three (3) copies of the Escrow Agreement signed by the parties
with a direction to execute two (2) copies of the Escrow Agreement and deliver
a fully executed copy to the Purchaser and the Seller.
26. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Colorado.
27. 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>
28. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
29. CAPTIONS. Paragraph titles or captions contained herein are inserted
as a matter of convenience and for reference, and in no way define, limit,
extend or describe the scope of this Agreement or any provision hereof.
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date set forth above.
Executed by Purchaser on PURCHASER:
August 18, 1996.
GRIFFIS/BLESSING, INC., a Colorado
corporation
By: /s/Ian C. Griffis President
------------------------------
Executed by Seller on SELLER:
August 26, 1996.
TEMPLETON INVESTORS, an Illinois
limited partnership
By: Balcor Partners-XVI, an
Illinois general partnership,
the general partner
By: RGF-Balcor Associates-II, an
Illinois general partnership,
a partner
By: The Balcor Company, a Delaware
corporation, a general partner
By: /s/ John K. Powell
------------------------------
<PAGE>
Templeton Park
CB Commercial Real Estate Group, Inc. ("Broker") executes this Agreement in its
capacity as a real estate broker and acknowledges that the fee or commission
("Fee") due to it as a result of the transaction described in this Agreement is
the amount as set forth in the listing agreement between Broker and Seller.
Broker also acknowledges that payment of the aforesaid Fee is conditioned upon
the Closing and the receipt of the Purchase Price by the Seller. Broker agrees
to deliver a receipt to the Seller at the Closing for the Fee and a release
stating that no other fees or commissions are due to Broker from Seller or
Purchaser.
CB COMMERCIAL REAL ESTATE GROUP,
INC.
By: ___________________________________
<PAGE>
EXHIBITS
A - Legal
B - Personal Property
C - Escrow Agreement
D - Title Commitment
E - Deed
F - Bill of Sale
G - Assignment of Service Contracts
H - Assignment of Leases and Security Deposits
I - Notice to Tenants
J - Non-Foreign Affidavit
K - Rent Roll
L - Reports
M - Assignment of Intangibles
N - List of Service Contracts
<PAGE>
August 29, 1996
VIA FACSIMILE
N.H. Associates
c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attn: Ilona Adams
Re: Agreement of Sale dated July 15, 1996 by and
between Jupiter Realty Corporation ("Purchaser")
and N.H. Associates ("Seller")
Dear Ms. Adams:
On behalf of the Purchaser, this letter will serve as Purchaser's
termination notice to Seller required under Paragraph 7.1 of the Agreement. By
copy of this letter, I am requesting on behalf of Purchaser that Near North
National Title Insurance Company terminate the Escrow Agreement and refund the
Earnest Money, together with all interest accrued thereon, to Purchaser.
Should you have any questions with respect to this matter, please call me
or have your counsel call me.
Very truly yours,
/s/ Donald Horvath
Donald S. Horvath
cc: Alan Lieberman (via facsimile)
Daniel J. Perlman, Esq. (via facsimile)
Gregory Davine (via facsimile)
Jay Luzuriaga (via facsimile)
Near North Title Corporation, Attn: Jan Jerndt (via
facsimile)
Donald I. Resnick, Esq.
<PAGE>