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) December 18, 1996
BALCOR PENSION INVESTORS - VI
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Exact Name of Registrant
Illinois 0-14332
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State or other jurisdiction Commission file number
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 36-3319330
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Address of principal I.R.S. Employer
executive offices Identification
Number
60015
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Zip Code
Registrant's telephone number, including area code:
(847) 267-1600
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
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Park Central Office Building
In 1987, the Partnership funded a $20,500,000 first mortgage loan
collateralized by the Park Central Office Building, De Kalb County, Georgia.
The Partnership obtained title to the property through foreclosure in 1988.
On January 20, 1997, the Partnership contracted to sell the property for a sale
price of $21,471,000 to an unaffiliated party, Acquiport Park Central, Inc., a
Delaware corporation. The purchaser has deposited $215,000 into an escrow
account as earnest money. The remaining portion of the sale price will be
payable in cash at closing, which is scheduled to occur on February 17, 1997.
The closing may be extended at the option of the purchaser to a date no later
than February 28, 1997 upon written notice to the Partnership no later than
February 14, 1997. From the proceeds of the sale, the Partnership will pay
$429,420 as a brokerage commission to an affiliate of the third party providing
property management services for the property. The Partnership will receive
the remaining proceeds of approximately $21,042,000, less closing costs.
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 actual expenses incurred in
connection with the sale.
An affiliate of the Partnership has simultaneously contracted to sell a
property to an affiliate of the purchaser.
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 EVENTS
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a) Perimeter 400 Center
As previously reported, the general partnership (the "General Partnership")
consisting of the Partnership and three affiliates which owned the Perimeter
400 Center, Fulton County, Georgia, contracted to sell the property for a sale
price of $40,700,000 to an unaffiliated party, Devon Properties, Inc., a New
York corporation. The purchaser assigned its rights under the agreement of
sale to an affiliate, Primrose Properties Associates, L.P., a Delaware limited
partnership, and the sale closed on December 18, 1996. From the proceeds of
the sale, the General Partnership paid $220,026 in closing costs, $814,000 as a
brokerage commission to an affiliate of the third party providing property
management services for the property and received the remaining proceeds of
approximately $39,666,000. Of such proceeds, $1,750,000 will be retained by
the General Partnership and will not be available for use or distribution by
the General Partnership until nine months after the closing. The Partnership's
share of the total proceeds will be approximately $19,833,000.
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b) Symphony Woods Office Center
In 1985, the Partnership funded a $10,500,000 first mortgage loan
collateralized by the Symphony Woods Office Center, Columbia, Maryland. The
Partnership subsequently funded an additional $1,400,000 for a total funding of
the loan of $11,900,000. The Partnership obtained title to the property
through a foreclosure sale in 1991.
On December 26, 1996, the Partnership contracted to sell the property for a
sale price of $7,275,000 to an unaffiliated party, 5950 SWR Corporation, a
Delaware corporation. The sale closed on December 31, 1996. From the proceeds
of the sale, the Partnership paid $106,336 in closing costs and $145,500 as a
brokerage commission to an affiliate of the third party providing property
management services for the property. The Partnership received the remaining
proceeds of approximately $7,023,000. Of such proceeds, $16,396 has been
placed in escrow pending resolution of certain tenant related matters.
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 actual expenses incurred in
connection with the sale.
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 the Park Central Office Building, De Kalb County,
Georgia.
(99) Agreement of Sale and attachment thereto relating to the
sale of the Symphony Woods Office Center, Columbia, Maryland.
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 PENSION INVESTORS-VI
By: Balcor Mortgage Advisors-VI, an Illinois
general partnership, its general partner
By: The Balcor Company, a Delaware corporation,
a partner
By: /s/ Jerry M. Ogle
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Jerry M. Ogle, Managing
Director and General Counsel
Dated: February 4, 1997
<PAGE>
AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), is entered into as of the 20th
day of January, 1997, by and between ACQUIPORT PARK CENTRAL, INC., a Delaware
corporation ("Purchaser"), and PARK CENTRAL LIMITED PARTNERSHIP, an Illinois
limited partnership ("Seller").
W I T N E S S E T H:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to sell
at the price of Twenty One Million Four Hundred Seventy-One Thousand And No/100
Dollars ($21,471,000.00) (the "Purchase Price"), that certain property commonly
known as Park Central, Atlanta, Georgia and more particularly described as
follows, subject only to the "Permitted Exceptions" (hereinafter defined)
(collectively, the "Property"):
1.1. that certain tract of real estate on which is situated an office
building, which real estate is legally described in the attached Exhibit A,
together with any and all and singular easements, covenants, agreements,
rights, privileges, tenements, hereditaments, rights of way, licenses,
interests and appurtenances of any kind thereunto now or hereafter owned by
Seller and belonging or appertaining thereto including, but not limited to, all
right, title and interest of Seller in and to any adjacent vaults, alleys,
strips or gores of land, and any air, zoning or development rights appurtenant
thereunto and all right, title and interest of Seller in and to any land lying
in the bed of any street, highway, alley, road access way, easement or avenue
(whether open, closed or proposed) within, in front of, behind, aside or
otherwise adjoining the real estate legally described in Exhibit A or any of
it, and all right, title and interest of Seller in and to any award made or to
be made as a result or in lieu of condemnation (subject to the provisions of
Paragraph 6 hereof) (collectively the "Land"); and
1.2. all right, title and interest of Seller in and to all of the
buildings, structures and other improvements now or hereafter in, on, over or
under the Land and in and to any award for damage to such buildings and
improvements or any part thereof by reason of casualty (subject to the
provisions of Paragraph 6 hereof) (collectively, the "Improvements"; the Land
and Improvements being collectively referred to as the "Premises"); and
1.3. all right, title and interest of Seller in and to all furniture,
furnishings, fixtures, equipment, machinery and other tangible personal
property situated in, on, over and under the Premises or used in connection
therewith, owned or leased by Seller or in which Seller otherwise has an
interest and which is not owned by tenants under the Leases (as such term is
hereinafter defined), together with all replacements and substitutions therefor
(together with the intangible personal property hereinafter identified,
collectively the "Personal Property"), including, without limitation, the items
listed on Exhibit B attached to this Agreement; and
1.4. all right, title and interest of Seller in and to all existing
permits, guarantees, bonds, certificate of occupancies, logos, warranties,
trademarks, surveys, blue prints, drawings, plans and specifications
(including, without limitation, structural, HVAC, mechanical and plumbing plans
<PAGE>
and specifications) to the extent available and in Seller's possession or
control; including, without limitation, all tenant lists and data (excluding
computer software), correspondence with tenants, vendors, and utility companies
concerning the Property or any part thereof, but excluding any internal
memoranda or reports; and
1.5. all right, title and interest of Seller in and to the Leases,
Security Deposits and Service Contracts (as such terms are hereinafter defined)
and the other intangible personal property now or hereafter owned by Seller or
in which Seller otherwise has an interest and used in connection with or
arising from the business now or hereafter conducted on or from the Property
including, without limitation, claims and contract rights.
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as follows:
2.1. Within five (5) business days after Seller's execution of this
Agreement, the sum of Two Hundred Fifteen Thousand and No/100 Dollars
($215,000.00) (the "Earnest Money") to be held in escrow by and in accordance
with the provisions of the Escrow Agreement ("Escrow Agreement") in the form
attached hereto as Exhibit C; and
2.2. On the date the "Closing" (hereinafter defined) shall occur, the
balance of the Purchase Price, adjusted in accordance with the prorations, by
federally wired "immediately available" funds, on or before 2:00 p.m. Chicago
time.
3. TITLE COMMITMENT AND SURVEY.
3.1. Attached hereto as Exhibit D is a copy of a title commitment for an
owner's standard title insurance policy issued by Near North National Title
Corporation as agent for First American Title Insurance Company (such company
is hereinafter referred to as "Initial Title Insurer") dated December 11, 1996
for the Property (the "Initial Title Commitment"). For purposes of this
Agreement, "Permitted Exceptions" shall mean: (a) those matters listed on
Exhibit E attached hereto; (b) general real estate taxes, assessments, special
assessments, special district taxes and related charges not yet due and
payable; (c) matters caused by the actions of Purchaser; (d) those third party
construction contracts for tenant improvements to be assumed by Purchaser as
more fully set forth in 12.2.3; and (e) those matters approved by Purchaser and
Seller pursuant to Paragraph 3.3 herein. All other exceptions to title shall
be referred to as "Unpermitted Exceptions." On the Closing Date, as a
condition to Purchaser's obligations hereunder, "Title Insurer" (hereinafter
defined) shall deliver to Purchaser a 1992 ALTA title policy in conformance
with the previously delivered "Title Commitment" (hereinafter defined), subject
to Permitted Exceptions (the "Title Policy"). Purchaser shall pay for the
premiums for the Title Policy and Purchaser shall pay for the premiums for any
endorsements to, or extended coverage on, the Title Policy.
3.2. Purchaser has received a survey of the Property prepared by Watts &
Browning Engineering Associates, Inc., dated October 30, 1996 (the "Updated
Survey"). Purchaser shall pay for the costs of the Updated Survey.
<PAGE>
3.3. Purchaser desires to reserve the right to order a new title
commitment from a different title insurance company. The term "Title
Commitment" shall mean the title commitment obtained by Purchaser and delivered
to Seller on or before January 17, 1997 (unless Purchaser fails to so deliver a
new Title Commitment, in which case "Title Commitment" shall mean the Initial
Title Commitment, and the term "Title Insurer" shall mean the title company
issuing the Title Commitment). If the Title Commitment discloses any
exceptions not set forth on the Initial Title Commitment, then such exceptions
shall be deemed "Permitted Exceptions" unless Purchaser delivers written notice
to the contrary to Seller on or before January 17, 1997. Purchaser and Seller
shall use good faith efforts to determine whether or not said objected
exceptions shall be "Permitted Exceptions" on or before January 22, 1997. If
the parties cannot agree upon whether or not said new exceptions shall be
Permitted Exceptions on or before January 22, 1997, then either party shall
have the right to terminate this Agreement by notice to the other party on or
before January 22, 1997. If either party terminates this Agreement in
accordance with the terms of this Paragraph 3.3, this Agreement shall become
null and void without further action of the parties and all earnest money
theretofore deposited into escrow by Purchaser, together with interest accrued
thereon, shall be returned to Purchaser, and neither party shall have any
further liability to the other, except for those obligations which specifically
survive termination.
3.4. The obligation of Purchaser to pay various costs set forth in
Paragraphs 3.1 and 3.2 shall survive the consummation of the within transaction
(the "Closing") and termination of this Agreement unless this Agreement is
terminated by reason of Seller's default.
4. PAYMENT OF CLOSING COSTS.
4.1. Seller shall pay for the costs of the documentary or transfer stamps
to be paid with reference to the "Deed" (hereinafter defined) and all other
stamps, intangible, transfer, documentary, recording, sales tax and surtax
imposed by law with reference to any other sale documents delivered in
connection with the sale of the Property to Purchaser.
5. CONDITION OF TITLE.
5.1. If, prior to "Closing" (as hereinafter defined), a date-down to the
Title Commitment or the Updated Survey discloses any new Unpermitted Exception,
Seller shall have thirty (30) days from the date of the date-down to the Title
Commitment or the Updated Survey, as applicable, at Seller's expense, to (i)
bond over, cure and/or have any Unpermitted Exceptions which, in the aggregate,
do not exceed $100,000.00 ("Minor Unpermitted Exceptions") removed from the
Title Commitment or to have the Title Insurer commit to insure against loss or
damage that may be occasioned by such Minor Unpermitted Exceptions in a manner
reasonably acceptable to Purchaser, or (ii) have the right, but not the
obligation, to bond over, cure and/or have any Unpermitted Exceptions which, in
the aggregate, equal or exceed $100,000.00, removed from the Title Commitment.
In such event, the time of Closing shall be delayed, if necessary, to give
effect to said aforementioned time periods. If Seller fails to cure or have
<PAGE>
said Minor Unpermitted Exception removed or have the Title Insurer commit to
insure as specified above within said thirty (30) day period or if Seller
elects not to exercise its rights under (ii) in the preceding sentence, this
Agreement will terminate unless Purchaser delivers notice to Seller in
accordance with the following sentence; provided, however, and notwithstanding
anything contained herein to the contrary, if the Unpermitted Exception which
gives rise to Purchaser's right to terminate is the result of the affirmative
action of Seller (and not by any unrelated third party) or if Seller is able to
bond over, cure or remove the Unpermitted Exceptions for a cost not to exceed
$100,000.00 or the Title Insurer is willing to insure over the Minor
Unpermitted Exceptions for a cost not to exceed $100,000.00 in a manner
reasonably acceptable to Purchaser in accordance with the terms hereof and
Seller fails to expend said funds in either case, then Purchaser shall have the
additional rights contained in Paragraph 11 herein. Subject to the foregoing,
if Purchaser delivers notice to Seller within five (5) days after the
expiration of said thirty (30) day period stating that Purchaser desires to
purchase the Property subject to such Unpermitted Exception, then Purchaser
shall take title subject to said Unpermitted Exception without any offset
against the Purchase Price. If Purchaser terminates this Agreement in
accordance with the terms of this Paragraph 5.1, this Agreement shall become
null and void without further action of the parties and all Earnest Money
theretofore deposited into the escrow by Purchaser together with any interest
accrued thereon, shall be returned to Purchaser, and neither party shall have
any further liability to the other, except for Purchaser's obligation to
indemnify Seller and restore the Property, as more fully set forth in Paragraph
7. Notwithstanding the provisions of Paragraph 5 hereof, Purchaser may at any
time accept the Title Policy in such form as the Title Insurer is willing to
issue, without reduction of the Purchase Price or any credit or allowance on
account thereof or any claims against Seller except that if on the Closing Date
there remain unremoved "Involuntary Monetary and Mechanics' Liens" (as defined
herein) which have neither been removed by Seller nor insured over by the Title
Insurer as provided herein, and Seller has not used the entire sum of $100,000
as provided above (the "Cure Amount") in removing such liens, then Purchaser
may elect to close subject to such unremoved Involuntary Monetary and
Mechanics' Liens and receive the Cure Amount less any amounts previously paid
by Seller or deposited with the Title Insurer to remove or obtain insurance
over any Involuntary Monetary and Mechanics' Liens.
As used herein the term "Involuntary Monetary and Mechanics Liens" shall
mean the existence of one or more (i) liens or encumbrances or (ii) mechanics'
liens created as a result of work performed at the Property which as to (i) and
(ii), are in liquidated amounts and can be removed or discharged by payment of
a sum of money and were not the result of the willful action of Seller.
5.2. Seller agrees to convey fee simple title to the Property to
Purchaser by limited warranty deed (the "Deed") in recordable form subject only
to the Permitted Exceptions and any Unpermitted Exceptions waived by Purchaser.
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
6.1. Except as provided in the indemnity provisions contained in
Paragraph 7 of this Agreement, Seller shall bear all risk of loss with respect
<PAGE>
to the Property up to the time title is transferred to Purchaser in accordance
with this Agreement. Notwithstanding the foregoing, in the event of damage to
the Property by fire or other casualty prior to the Closing Date, repair of
which would cost less than or equal to $100,000.00 (as reasonably determined by
Seller in good faith) Purchaser shall not have the right to terminate its
obligations under this Agreement by reason thereof, but Seller shall have the
right to elect to either repair and restore the Property (in which case the
Closing shall be adjourned by up to 90 days until completion of such
restoration) or to assign and transfer to Purchaser on the Closing Date all of
Seller's right, title and interest in and to all insurance proceeds paid or
payable to Seller on account of such fire or casualty and allow as a credit
against the Purchase Price an amount equal to the applicable insurance
deductible. Seller shall promptly notify Purchaser in writing of any such fire
or other casualty and Seller's determination of the cost to repair the damage
caused thereby. In the event of damage to the Property by fire or other
casualty prior to the Closing, repair of which would cost in excess of
$100,000.00 (as reasonably determined by Seller in good faith), then this
Agreement may be terminated at the option of Purchaser, which option shall be
exercised, if at all, by Purchaser's written notice thereof to Seller within
fifteen (15) business days after Purchaser receives written notice of such fire
or other casualty and Seller's determination of the amount of such damages, and
upon the exercise of such option by Purchaser this Agreement shall become null
and void, the Earnest Money deposited by Purchaser shall be returned to
Purchaser together with interest thereon, and neither party shall have any
further liability or obligations hereunder except for those obligations
expressly stated to survive termination. In the event that Purchaser does not
exercise the option set forth in the preceding sentence, the Closing shall take
place on the scheduled Closing Date and Seller shall deliver, assign and
transfer to Purchaser on the Closing Date all insurance proceeds theretofore
received by Seller and all of Seller's right, title and interest in and to all
insurance proceeds payable to Seller on account of the fire or casualty and
allow as a credit against the Purchase Price an amount equal to the applicable
insurance deductible.
6.2. If between the date of this Agreement and the Closing Date, any
condemnation or eminent domain proceedings are initiated or threatened in
writing which might result in the taking of any part of the Property or the
taking or closing of any right of access to the Property, Seller shall
immediately notify Purchaser of such occurrence. In the event that the taking
of any part of the Property shall: (i) materially impair access to the
Property; (ii) cause any non-compliance with any applicable law, ordinance,
rule or regulation of any federal, state or local authority or governmental
agencies having jurisdiction over the Property or any portion thereof; or (iii)
materially and adversely impair the use or value of the Property (hereinafter
collectively referred to as a "Material Event"), Purchaser may:
6.2.1. terminate this Agreement by written notice to Seller, in
which event the Earnest Money deposited by Purchaser, together with interest
thereon, shall be returned to Purchaser and all rights and obligations of the
parties hereunder with respect to the closing of this transaction will cease;
or
<PAGE>
6.2.2. proceed with the Closing, in which event Seller shall
deliver, transfer and assign to Purchaser all amounts previously paid to Seller
on account thereof and all of Seller's right, title and interest in and to any
award payable in connection with such condemnation or eminent domain
proceedings.
6.3. Purchaser shall then notify Seller, within ten (10) business days
after Purchaser's receipt of Seller's notice, whether Purchaser elects to
exercise its rights under Paragraph 6.2.1 or Paragraph 6.2.2. Closing shall be
delayed, if necessary, until Purchaser makes such election. If Purchaser fails
to make an election within such ten (10) business day period, Purchaser shall
be deemed to have elected to exercise its rights under Paragraph 6.2.1. Except
as otherwise provided in this Agreement, if between the date of this Agreement
and the Closing Date, any condemnation or eminent domain proceedings are
initiated which do not constitute a Material Event, Purchaser shall be required
to proceed with the Closing, in which event Seller shall deliver, transfer and
assign to Purchaser all of Seller's right, title and interest in and to any
award payable in connection with such condemnation or eminent domain
proceedings.
6.4. No insurance claims or eminent domain award in connection with damage
or destruction or a taking shall be adjusted, settled or compromised without
the consent of Purchaser, which consent shall not be unreasonably withheld or
delayed.
7. INSPECTION AND AS-IS CONDITION.
7.1. During the period commencing on December 1, 1996 and ending on the
Closing, Purchaser and the agents, engineers, employees, contractors and
surveyors retained by Purchaser may enter upon the Property, at any reasonable
time and upon reasonable prior notice to Seller, to inspect the Property,
including a review of Leases, and to conduct and prepare such studies, tests
and surveys as Purchaser may deem necessary and appropriate. In connection
with Purchaser's review of the Property, Seller agrees to deliver to Purchaser
copies of the current rent roll for the Property, the most recent tax and
insurance bills, utility account numbers, service contracts, and unaudited year
end 1995 and year-to-date 1996 operating statements. Furthermore, if the
following are in Seller's possession, Seller shall deliver to Purchaser plans
and specifications.
All of the foregoing tests, investigations and studies to be conducted
under Paragraph 7.1 by Purchaser shall be at Purchaser's sole cost and expense
and Purchaser shall restore the Property to the condition existing prior to the
performance of such tests or investigations by or on behalf of Purchaser,
subject to reasonable wear and tear and subject to casualty not occasioned by
Purchaser's acts. Purchaser shall defend, indemnify and hold Seller and any
affiliate, parent of Seller, and all shareholders, employees, officers and
directors of Seller or Seller's affiliate or parent (hereinafter collectively
referred to as "Affiliate of Seller") harmless from any and all liability, cost
and expense (including without limitation, reasonable attorney's fees, court
costs and costs of appeal) suffered or incurred by Seller or Affiliates of
Seller for injury to persons or property caused by Purchaser's investigations
<PAGE>
and inspection of the Property. Purchaser shall undertake its obligation to
defend set forth in the preceding sentence using attorneys selected by (i)
Purchaser's insurer or the third party contractor's insurers, as applicable,
and reasonably approved by Seller, to the extent such approval rights are
available under Purchaser's or the third party contractor's coverage and
provided such approval by Seller is not unreasonably conditioned, delayed or
withheld or (ii) Purchaser and reasonably approved by Seller provided such
approval by Seller is not unreasonably conditioned, delayed or withheld. The
period commencing on December 1, 1996 and ending at 5:00 p.m. Chicago time on
January 22, 1997 shall be referred to as the "Inspection Period."
Prior to commencing any such tests, studies and investigations, Purchaser
shall furnish to Seller a certificate of insurance evidencing comprehensive
general public liability insurance insuring the person, firm or entity
performing such tests, studies and investigations and listing Seller and
Purchaser as additional insureds thereunder.
If Purchaser is dissatisfied in its sole and absolute discretion with the
results of the tests, studies or investigations performed or information
received with respect to the Property, Purchaser shall have the right to
terminate this Agreement by giving written notice of such termination to Seller
at any time prior to the expiration of the Inspection Period. If written
notice is not received by Seller pursuant to this Paragraph 7.1 prior to the
expiration of the Inspection Period, then the right of Purchaser to terminate
this Agreement pursuant to this Paragraph 7.1 shall be waived. If Purchaser
terminates this Agreement by written notice to Seller prior to the expiration
of the Inspection Period: (i) Purchaser shall promptly deliver to Seller copies
of all studies, reports and other investigations obtained by Purchaser in
connection with its due diligence during the Inspection Period subject to any
conflicting obligations of Purchaser owed to anyone preparing or providing the
same; and (ii) the Earnest Money deposited by Purchaser shall be immediately
paid to Purchaser, together with any interest earned thereon, and neither
Purchaser nor Seller shall have any right, obligation or liability under this
Agreement, except for obligations expressly stated to survive termination.
Notwithstanding anything contained herein to the contrary, the terms of this
Paragraph 7.1, shall survive the Closing and the delivery of the Deed and
termination of this Agreement.
7.2. Except as expressly stated herein to the contrary: Seller makes no
representations or warranties relating to the condition of the Property or the
Personal Property; Purchaser acknowledges and agrees that it will be purchasing
the Property and the Personal Property based solely upon its inspections and
investigations of the Property and the Personal Property, and that Purchaser
will be purchasing the Property and the Personal Property "AS IS" and "WITH ALL
FAULTS", based upon the condition of the Property and the Personal Property as
of the date of this Agreement, ordinary wear and tear excepted and subject to
the terms of Paragraph 6; neither Seller nor its consultants, brokers or agents
have made any representations or warranties of any kind upon which Purchaser is
relying as to any matters concerning the Property or the Personal Property,
including, but not limited to, the condition of the Land or any improvements
comprising the Property, the existence or non-existence of "Hazardous
Materials" (as hereinafter defined), economic projections or market studies
<PAGE>
concerning the Property, any development rights, taxes, bonds, covenants,
conditions and restrictions affecting the Property, water or water rights,
topography, drainage, soil, subsoil of the Property, the utilities serving the
Property or any zoning or building laws, rules or regulations or "Environmental
Laws" (hereinafter defined) affecting the Property; and Seller makes no
representation or warranty that the Property complies with Title III of the
Americans with Disabilities Act or any fire code or building code. Except for
any claim for a breach of a representation or warranty by Seller contained
herein or made pursuant hereto, Purchaser hereby releases Seller and the
Affiliates of Seller from any and all liability in connection with any claims
which Purchaser may have against Seller or the Affiliates of Seller, and
Purchaser hereby agrees not to assert any claims for contribution, cost
recovery or otherwise, against Seller or the Affiliates of Seller, relating
directly or indirectly to the existence of asbestos or Hazardous Materials on,
or environmental conditions of, the Property, whether known or unknown.
Notwithstanding the foregoing, to the extent a claim is made against Purchaser
concerning the presence of Hazardous Materials on the Property and to the
extent such Hazardous Materials were in existence during the period of Seller's
ownership of the Property ("Primary Claim"), then Purchaser shall have the
right to file suit, or assert liability, against Seller as a third party
defendant, or to otherwise assert a claim against Seller for contribution, cost
recovery or otherwise, but only as it relates to the Primary Claim. As used
herein, "Environmental Laws" means all federal, state and local statutes,
codes, regulations, rules, ordinances, orders, standards, permits, licenses,
policies and requirements (including consent decrees, judicial decisions and
administrative orders) relating to the protection, preservation, remediation or
conservation of the environment or worker health or safety, all as amended or
reauthorized, or as hereafter amended or reauthorized, including without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), 42 U.S.C. Section 9601 et seq., the Resource
Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. Section 6901 et seq.,
the Emergency Planning and Community Right-to-Know Act ("Right-to-Know Act"),
42 U.S.C. Section 11001 et seq., the Clean Air Act ("CAA"), 42 U.S.C. Section
7401 et seq., the Federal Water Pollution Control Act ("Clean Water Act"), 33
U.S.C. Section 1251 et seq., the Toxic Substances Control Act ("TSCA"), 15
U.S.C. Section 2601 et seq., the Safe Drinking Water Act ("Safe Drinking Water
Act"), 42 U.S.C. Section 300f et seq., the Atomic Energy Act ("AEA"), 42 U.S.C.
Section 2011 et seq., the Occupational Safety and Health Act ("OSHA"),
29 U.S.C. Section 651 et seq., and the Hazardous Materials Transportation Act
(the "Transportation Act"), 49 U.S.C. Section 1802 et seq. As used herein,
"Hazardous Materials" means: (1) "hazardous substances," as defined by CERCLA;
(2) "hazardous wastes," as defined by RCRA; (3) any radioactive material
including, without limitation, any source, special nuclear or by-product
material, as defined by AEA; (4) asbestos in any form or condition; (5)
polychlorinated biphenyls; and (6) any other material, substance or waste to
which liability or standards of conduct may be imposed under any Environmental
Laws. Notwithstanding anything contained herein to the contrary, the terms of
this Paragraph 7.2 shall survive the Closing and the delivery of the Deed and
termination of this Agreement.
7.3. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
<PAGE>
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 set forth herein to the
contrary, 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 set forth herein to the contrary, releases Seller and the Affiliates
of Seller from any liability with respect to such historical information.
Notwithstanding anything contained herein to the contrary, the terms of this
Paragraph 7.3, shall survive the Closing and the delivery of the Deed and
termination of this Agreement.
8. CLOSING. The Closing shall be on February 17, 1997 (the "Closing Date"),
at the office of Purchaser's local counsel, Atlanta, Georgia, at which time
Seller shall deliver possession of the Property to Purchaser. Notwithstanding
anything contained herein to the contrary, Purchaser shall have the one time
right to extend the Closing Date to a date no later than February 28, 1997 by
delivering written notice of such to Seller on or before 5:00 p.m. Chicago time
on February 14, 1997. The Closing shall be a "New York style" closing at which
the Purchaser shall wire the balance of the Purchase Price (after giving effect
to adjustments) to Title Insurer on the Closing Date and prior to the release
of the Purchase Price to Seller, Purchaser shall receive the Title Policy or
marked up commitment dated the date of the Closing Date. Seller shall deliver
to Title Insurer any customary affidavit required by the Title Insurer in
connection with a New York style closing.
9. CLOSING DOCUMENTS.
9.1. On or prior to the Closing Date, Seller and Purchaser shall execute
and deliver to one another a joint closing statement. In addition, Purchaser
shall deliver to Seller the balance of the Purchase Price (after giving effect
to adjustments), an assumption of the documents set forth in Paragraph 9.2.3
and 9.2.4 and such other documents as may be reasonably required by the Title
Insurer in order to consummate the transaction as set forth in this Agreement.
9.2. On the Closing Date, Seller shall execute and acknowledge (if
appropriate) and deliver to Purchaser the following:
9.2.1. the Deed (in the form of Exhibit F attached hereto),
subject to Permitted Exceptions and those Unpermitted Exceptions waived by
Purchaser;
9.2.2. a special warranty bill of sale conveying the Personal
Property (in the form of Exhibit G attached hereto);
9.2.3. an assignment and assumption of intangible property (in the
form attached hereto as Exhibit H), including, without limitation, the Service
Contracts listed in Exhibit I;
<PAGE>
9.2.4. an assignment and assumption of leases and security deposits
(in the form attached hereto as Exhibit J);
9.2.5. a non-foreign affidavit (in the form of Exhibit K attached
hereto);
9.2.6. all original Leases in Seller's possession or control (which
shall be delivered at the Property);
9.2.7. all documents and instruments reasonably required by the
Title Insurer to issue the Title Policy;
9.2.8. possession of the Property to Purchaser, subject to the terms
of Leases;
9.2.9. evidence of the termination of any and all management and
leasing agreements affecting the Property;
9.2.10. notice to the tenants of the Property of the transfer of
title and assumption by Purchaser of the lessor's obligation under the Leases
and the obligation to refund the Security Deposits (in the form of Exhibit L);
9.2.11. an updated rent roll;
9.2.12. plans and specifications of the Improvements within the
possession or control of Seller prepared in connection with the construction,
maintenance, repair, management or operation of the Property;
9.2.13. all lease files and expense records maintained at the
Property by or on behalf of Seller in connection with the Property;
9.2.14. the keys in Seller's possession to all entrance doors,
tenant spaces, offices and store rooms;
9.2.15. an opinion of counsel as to Seller's power and authority to
enter into this Agreement and to consummate the transactions contemplated
herein;
9.2.16. Affidavit of Seller's Gain pursuant to Official Code of
Georgia Annotated ("O.C.G.A.") Section 48-7-128; and
9.2.17. Unconditional Waiver and Release Upon Final Payment and an
Acknowledgment of Payment pursuant to O.C.G.A. Section 44-14-600, et. seq.
10. PURCHASER'S DEFAULT. ALL EARNEST MONEY DEPOSITED INTO THE ESCROW IS TO
SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND UNDERTAKINGS
UNDER THIS AGREEMENT. IN THE EVENT OF A DEFAULT OF THE PURCHASER UNDER THE
PROVISIONS OF THIS AGREEMENT, SELLER SHALL RETAIN ALL OF THE EARNEST MONEY AND
THE INTEREST THEREON AS SELLER'S SOLE RIGHT TO DAMAGES OR ANY OTHER REMEDY,
EXCEPT FOR PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER AND RESTORE THE PROPERTY
AS SET FORTH IN PARAGRAPH 7.1 HEREOF AND FOR ANY OTHER OBLIGATION OF PURCHASER
WHICH SPECIFICALLY SURVIVES TERMINATION HEREOF. SELLER SHALL HAVE NO RIGHT TO
<PAGE>
SUE PURCHASER FOR SPECIFIC PERFORMANCE UNDER THE TERMS OF THIS AGREEMENT. THE
PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES, IN THE EVENT OF A DEFAULT BY
PURCHASER, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICAL TO DETERMINE.
THEREFORE, BY PLACING THEIR INITIALS BELOW, THE PARTIES ACKNOWLEDGE THAT THE
EARNEST MONEY HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES'
REASONABLE ESTIMATE OF SELLER'S DAMAGES.
11. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF ALL EARNEST MONEY
TOGETHER WITH ANY INTEREST ACCRUED THEREON, AND THIS AGREEMENT SHALL THEN
BECOME NULL AND VOID AND OF NO EFFECT AND THE PARTIES SHALL HAVE NO FURTHER
LIABILITY TO EACH OTHER AT LAW OR IN EQUITY, EXCEPT FOR PURCHASER'S OBLIGATIONS
TO INDEMNIFY SELLER AND RESTORE THE PROPERTY AS SET FORTH MORE FULLY IN
PARAGRAPH 7 AND EXCEPT FOR SELLER'S OBLIGATION TO REIMBURSE PURCHASER FOR ITS
ACTUAL, DOCUMENTED THIRD PARTY EXPENSES INCURRED IN THE PERFORMANCE OF ITS DUE
DILIGENCE HEREUNDER AND THE PREPARATION OF THIS AGREEMENT, NOT TO EXCEED
$100,000.00 IN THE AGGREGATE. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE
CONTRARY, IF SELLER'S DEFAULT IS THE RESULT OF (i) ITS (AND NOT AN UNRELATED
THIRD PARTY'S) AFFIRMATIVE ACTION WHICH GIVES RISE TO PURCHASER'S RIGHT TO
TERMINATE THIS AGREEMENT PURSUANT TO PARAGRAPH 5 HEREOF; (ii) ITS FAILURE TO
EXPEND UP TO $100,000.00 IF (a) SELLER IS ABLE TO BOND OVER, CURE OR REMOVE THE
MINOR UNPERMITTED EXCEPTIONS FOR A COST NOT TO EXCEED $100,000.00 OR (b) THE
TITLE INSURER IS WILLING TO INSURE OVER THE MINOR UNPERMITTED EXCEPTIONS FOR A
COST NOT TO EXCEED $100,000.00 IN ACCORDANCE WITH THE TERMS HEREOF OR (iii) ITS
WILLFUL REFUSAL TO DELIVER THE CONVEYANCE DOCUMENTS SET FORTH IN PARAGRAPHS
9.2.1 THROUGH 9.2.11, INCLUSIVE, AND 9.2.13, 9.2.14, 9.2.16, AND 9.2.17, THEN
PURCHASER WILL BE ENTITLED TO OBTAIN SPECIFIC PERFORMANCE IN LIEU OF ITS OTHER
RIGHTS AND REMEDIES HEREIN. IF THIS SALE IS NOT COMPLETED FOR ANY REASON OTHER
THAN PURCHASER'S DEFAULT OR SELLER'S DEFAULT, PURCHASER SHALL BE ENTITLED TO
THE RETURN OF ALL EARNEST MONEY TOGETHER WITH ANY INTEREST ACCRUED THEREON, AND
THIS AGREEMENT SHALL THEN BECOME NULL AND VOID AND OF NO EFFECT AND THE PARTIES
SHALL HAVE NO FURTHER LIABILITY TO EACH OTHER AT LAW AND IN EQUITY, EXCEPT FOR
PURCHASER'S OBLIGATION TO INDEMNIFY SELLER AND RESTORE THE PROPERTY AS SET
FORTH MORE FULLY IN PARAGRAPH 7 AND ANY OTHER RIGHTS OF THE PARTIES WHICH
SPECIFICALLY SURVIVE TERMINATION HEREOF.
12. PRORATIONS.
12.1. The items described in this Paragraph shall be prorated between the
parties on a per diem basis (on the basis of actual calendar days in the
relevant calendar year) so that credits and charges preceding or on 11:59 P.M.
on the day preceding the Closing Date shall be allocated to Seller and credits
and charges for the period after 11:59 P.M. on the day preceding the Closing
Date and all days thereafter shall be allocated to Purchaser. As of June 1,
1997 and June 1, 1998, Seller and Purchaser shall jointly prepare a final
proration statement in accordance with the provisions of this Paragraph 12 and
a final adjusting payment shall then be made, as provided in Paragraph 12.3
hereof.
12.1.1. Real estate taxes general and special assessments and the
like ("Taxes") for the year of the Closing Date, as such Taxes may be increased
or decreased after the Closing, shall be prorated as of the Closing Date based
on the most recent ascertainable amount as part of the proration of
"Maintenance Expenses" (hereinafter defined) in Paragraph 12.1.3.
<PAGE>
12.1.2. Minimum rent (exclusive of delinquent or unpaid rents, but
including prepaid rents) paid under the Leases shall be prorated as of the
Closing Date. Percentage Rent, if any, shall be prorated in connection with
the final adjustment set forth in Paragraph 12.3 herein.
12.1.3. Certain of the Leases provide for reimbursement to lessor
of maintenance and operation charges, Taxes, insurance and other expenses
(herein collectively referred to as "Maintenance Expenses"). Some Leases
provide for a determination of the tenant's share of Maintenance Expenses on an
annual basis but provide that an estimated amount thereof (either in the
aggregate or for specified components thereof) shall be paid by tenant to
lessor monthly during the course of the year with a final adjustment to be made
after the close of the year when such costs and expenses have been finally
determined. Seller and Purchaser have agreed as follows with respect to
Maintenance Expenses:
(i) Except as hereinafter provided, Seller shall be responsible for
the payment of all Maintenance Expenses attributable to periods of time prior
to the Closing Date (without taking into account "stops" for base years in the
Leases) and Seller shall be entitled to receive and retain all reimbursements
thereof collected from tenants on account thereof with respect to the period
through the Closing Date (taking into account "stops" for base years in the
Leases); and Purchaser shall be responsible for the payment of all Maintenance
Expenses attributable to periods of time from and after the Closing Date
(without taking into account "stops" for base years in the Leases) and
Purchaser shall be entitled to receive and retain from the tenants all
reimbursements thereof collected from tenants on account thereof with respect
to the Closing Date and thereafter (taking into account "stops" for base years
in the Leases).
(ii) Purchaser shall be entitled to a credit against the Purchase
Price for sums that are due (or accrued) and unpaid as of the Closing Date
under any Service Contracts which have been assigned to Purchaser, and Seller
shall be entitled to a credit to the extent that sums have been paid under any
Service Contracts which have been assigned to Purchaser for services to be
performed or goods to be delivered after the Closing Date.
(iii) As a part of the final proration referred to in Section 12.3
hereof:
Maintenance Expenses received from Tenants shall be separately
prorated under each Lease. Upon final determination of Maintenance Expense
owed by a Tenant under its Lease for 1996 and 1997, Seller and Purchaser shall
adjust between themselves amounts owed for such calendar year on account of
Maintenance Expenses, and Seller's allocable share of such Maintenance Expenses
payable by such Tenant shall be equal to an amount determined by multiplying
separately each of the Maintenance Expense received from such Tenant by 100%
for 1996 and by the fraction whose numerator is the number of days in 1997
before the Closing Date, and whose denominator is the total number of days in
1997. Purchaser shall remit to Seller its allocable share, less interim
payments previously retained by Seller, if any, less a pro rata share of costs
of collection paid to third parties, if any. If Seller has retained amounts in
<PAGE>
excess of its allocable share, Seller, within fifteen (15) days after notice
from Purchaser of the excess owed Purchaser, shall promptly remit such excess
to Purchaser less a pro rata share of costs of collection, if any paid to third
parties.
12.1.4. To the extent not covered by Paragraph 12.1.3, utility and
fuel charges, including, without limitation, charges for water, electricity,
gas, gasoline, steam, oil and telephones used in connection with the heating,
cooling, lighting, maintenance and operation of the Property and any personal
property included therein or used in connection therewith shall be prorated as
of the Closing Date. Seller shall obtain readings of all utility meters no
earlier than 30 days prior to the Closing Date.
12.1.5. To the extent not covered by Paragraph 12.1.3 annual fees
for those permits and licenses disclosed in Exhibit T shall be prorated as of
the Closing Date.
12.1.6. Personal property taxes, if any, for any personal property
transferred to Purchaser shall be prorated as of the Closing Date.
12.1.7. Purchaser shall cause a reconciliation of the Maintenance
Expenses to occur with the tenants no later than April 15, 1997 (with respect
to 1996) and April 15, 1998 (with respect to 1997) requesting payment in
accordance with the terms of the Lease and shall use reasonable, good faith
efforts in collecting from the tenants any under-payments for Maintenance
Expenses for 1996 and 1997.
12.2. The following adjustments, if any (the "Adjustments"), without
duplication, shall be made:
12.2.1. All security deposits held by Seller as of the Closing Date
shall be paid to Purchaser at the Closing.
12.2.2. All other reasonable expenses normal to the operation and
maintenance of the Property which require payments either in advance or in
arrears for periods which begin prior to the Closing Date or end thereafter
shall be apportioned between Seller and Purchaser as of 11:59 P.M. on the day
preceding the Closing Date.
12.2.3. Purchaser shall receive at Closing a credit equal to the
amount of any unsatisfied obligations for "Outstanding Tenant Improvement and
Commission Obligations" of Seller set forth in Exhibit P. Seller shall receive
a credit, if any, as provided in Paragraphs 25 and 26. Purchaser shall assume
at Closing all third party construction contracts for the performance of tenant
improvement work and leasing commission agreements in connection with those
leases (i) for which Seller is giving to Purchaser a credit as set forth on
Exhibit P, and (ii) for which Purchaser is assuming the obligations pursuant to
Paragraph 25 herein.
12.3. In connection with the Prorations and the Adjustments herein and
as provided, there shall be prepared the following statements, schedules and
certificate:
<PAGE>
12.3.1. Seller shall prepare or cause to be prepared statements in
reasonable detail showing separately each item prorated or adjusted pursuant to
this Agreement and a detailed reconciliation showing separately each item
prorated or adjusted pursuant to this Agreement and a detailed reconciliation
of the Prorations and Adjustments, such statements to be delivered three (3)
business days prior to the Closing and adjusted as necessary at the Closing.
The parties shall mutually agree after review thereof by Purchaser that said
closing statement accurately reflects the method of proration set forth in this
Agreement.
12.3.2. Purchaser, in cooperation with Seller, shall prepare, not
later than June 1, 1997 (with respect to 1996) and June 1, 1998 (with respect
to 1997), a final proration statement presenting correctly the Prorations and
Adjustments in accordance with the terms of this Agreement and a statement of
"Post-Closing Receipts" (hereinafter defined). Upon issuance of such
proration statement the parties shall make a proration payment as appropriate
(including, without limitation, a settlement of Post-Closing Receipts). For
purposes of preparation of the foregoing statements and at all reasonable times
thereafter, the parties agree to allow the other party and the other party's
accountants and representatives, to examine so much of the books and records in
the possession and control of the other party as relate to such statements and
final reconciliations with tenants on Maintenance Expenses and other charges at
the place or places where they are then regularly maintained. Seller and
Purchaser shall retain such books and records for three (3) years from the
Closing Date.
12.4. All sums paid following the Closing Date by any tenant of the
Property who is indebted to Seller for rent, additional rent or any other sum
due under its Lease for any period prior to and including the Closing Date,
after receipt by Purchaser of all then due amounts by said tenant and any
reasonable actual out-of-pocket collection costs of Purchaser shall be deemed a
"Post-Closing Receipt" until such time as all such indebtedness to Seller is
paid in full. Within ten (10) days following each receipt by Purchaser of a
Post-Closing Receipt (other than with respect to a Maintenance Expense received
from a tenant which will be adjusted as provided in Paragraphs 12.1 and 12.3),
Purchaser shall pay such Post-Closing Receipt to Seller. Purchaser shall use
reasonable efforts to collect all amounts which, upon collection, would
constitute Post-Closing Receipts hereunder, but Purchaser shall not be required
to institute legal action on account thereof nor to engage attorneys or other
professionals in such efforts. If by June 1, 1997 (with respect to 1996
Maintenance Expenses and delinquent rent and 1997 delinquent rent) and June 1,
1998 (with respect to 1997 Maintenance Expenses), Purchaser has not collected
all amounts due Seller and shall not have commenced litigation to collect such
Post-Closing Receipts, Seller, after notice to Purchaser, may, at Seller's
expense, commence litigation to collect such unpaid arrearage from any tenant
owing Seller an amount equal to or greater than $7,500.00; provided, however,
that Seller shall have no right to commence any proceeding to evict the tenant
or recover possession of any tenant's space or interfere with the tenant's or
Purchaser's ability (other than financial impact resulting from such
litigation) to conduct business or take any action which would limit
Purchaser's rights to pursue any remedy Purchaser may have for a default under
any Lease. Purchaser may, by written notice to Seller within twenty (20) days
<PAGE>
of receipt of Seller's notice, restrict Seller from collecting such unpaid
arrearage, but only if Purchaser first pays Seller such unpaid arrearage, in
exchange for Seller's assignment to Purchaser of all of Seller's rights and
causes of action with respect thereto. Purchaser shall cooperate fully with
Seller, at no expense to Purchaser, in this regard and shall execute such
instruments, if any, as Seller may require in order for Seller to commence and
prosecute any such litigation.
12.5. Paragraph 12 of this Agreement shall survive the Closing and the
delivery and recording of the Deed.
13. RECORDING. Neither this Agreement nor a memorandum thereof shall be
recorded and the act of recording by Purchaser shall be an act of default
hereunder by Purchaser and subject to the provisions of Paragraph 10 hereof.
14. ASSIGNMENT. The Purchaser shall not have the right to assign its interest
in this Agreement without the prior written consent of the Seller. Any
assignment or transfer of, or attempt to assign or transfer, Purchaser's
interest in this Agreement shall be an act of default hereunder by Purchaser
and subject to the provisions of Paragraph 10 hereof. Notwithstanding the
foregoing, Purchaser may assign its interest in this Agreement without the
consent of Seller to any entity in which Purchaser owns a controlling interest
or to an affiliate which is under common control with Purchaser provided that
Purchaser remains liable for and the assignee assumes the obligations of
Purchaser hereunder. If any assignee of Purchaser under this Agreement
petitions or applies for relief in bankruptcy or Assignee is adjudicated as a
bankrupt or insolvent, or Assignee files any petition, application for relief
or answer-seeking or acquiescing in any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief for
itself under any present or future federal, state or other statute, law, code
or regulation relating to bankruptcy, insolvency, or other relief for debtors
(collectively, a "Bankruptcy Filing") on or before the Closing Date, said
Bankruptcy Filing shall be a default under this Agreement and Purchaser shall
indemnify Seller for all costs, attorneys' fees and expenses of Seller
resulting from Seller's efforts to obtain the Earnest Money as liquidated
damages and to clear title to the Property from any encumbrance resulting from
the Bankruptcy Filing.
15. BROKER. Each of the parties hereto represents and warrants that no broker
commission, finder fee or advisory fee is due and payable in connection with
this transaction by reason of any act of the representing party other than a
brokerage fee to Insignia Mortgage and Investment Company (to be paid by
Seller). Purchaser and Seller shall indemnify, defend and hold the other party
hereto harmless from any claim whatsoever (including without limitation,
reasonable attorney's fees, court costs and costs of appeal) from anyone
claiming by or through the indemnifying party any fee, commission or
compensation on account of this Agreement, its negotiation or the sale hereby
contemplated other than to Insignia Mortgage and Investment Company, its
affiliates or subsidiaries. The indemnifying party shall undertake its
obligations set forth in this Paragraph 15 using attorneys selected by the
indemnifying party and reasonably acceptable to the indemnified party. The
provisions of this Paragraph 15 will survive the Closing and delivery of the
Deed.
<PAGE>
16. REPRESENTATIONS AND WARRANTIES.
16.1. Any reference herein to Seller's knowledge or notice of any matter
or thing shall only mean such knowledge or notice that has actually been
received by James E. Mendelson, senior vice-president of The Balcor Company, or
Tom Molina, the asset manager of the Property (the "Seller's Representatives").
Tom Molina has been the asset manager of the Property since July 1, 1992. Any
knowledge or notice given, had or received by any of Seller's agents, servants
or employees shall not be imputed to Seller, the general partner or limited
partners of Seller, the subpartners of the general partner or limited partners
of Seller or Seller's Representatives. A copy of Paragraph 16.2 shall be
delivered to the on-site management of the Property within two (2) days after
the execution by Seller of this Agreement, with a request to advise Tom Molina
within five (5) business days after receipt by the on-site manager as to the
accuracy and truthfulness of the representations and warranties. If the on-site
manager indicates that any of the representations or warranties were incorrect,
Seller shall notify Purchaser as to the response of the on-site manager by ten
(10) business days after the execution by Seller. If the on-site manager
responds that any of the representations or warranties were incorrect then the
terms of Paragraph 16.4 herein shall apply. If Seller fails to so notify
Purchaser, Purchaser shall be entitled to conclude that the on-site manager
reviewed the representations and warranties and that they are correct.
16.2. Seller's Representations and Warranties. Seller hereby represents
and warrants to Purchaser, which representations, warranties and covenants
shall be deemed independently material and relied on by Purchaser and which
shall be deemed repeated and made as of the Closing Date and survive the
Closing for a period of nine (9) months (i.e., the claiming party shall have no
right to make any claims against the other party for a breach of a
representation or warranty after the expiration of nine (9) months immediately
following Closing), as follows:
16.2.1. Power and Authority. Seller is a limited partnership, duly
organized and validly existing under the laws of the State of Illinois. Seller
has the power and authority to enter into this Agreement, to perform its
obligations under this Agreement, and to consummate the transactions
contemplated herein. The execution and delivery hereof and the performance by
Seller of its obligations hereunder will not violate or constitute an event of
default under any material term or material provision of any agreement,
document, instrument, judgment, order or decree to which Seller is a party or
by which Seller is bound. No petition in bankruptcy (voluntary or otherwise),
assignment for the benefit of creditors, or petition seeking reorganization or
arrangement or other action under federal or state bankruptcy laws is pending
against or contemplated by Seller.
16.2.2. Authorization; Valid Obligation. Seller has caused all
actions required to be taken by or on behalf of Seller to authorize Seller to
make, deliver and carry out the terms of this Agreement. No consent to the
execution, delivery and performance of this Agreement by Seller is required
from any partner, board of directors, shareholder, creditor, investor, judicial
or administrative body, government authority (excluding any governmental
authority solely applicable to Purchaser) or other person or entity, other than
<PAGE>
any such consent which already has been unconditionally given. This Agreement
is a valid and binding obligation of Seller, enforceable in accordance with its
terms, except as the same may be affected by bankruptcy, insolvency, moratorium
or similar laws, or by legal or equitable principles relating to or limiting
the rights of contracting parties generally.
16.2.3. Space Leases.
(a) To Seller's knowledge, the rent roll attached hereto as
Exhibit N (the "Rent Roll") contains a true, correct and complete list of all
leases and other agreements in respect thereof, all as amended, renewed and
extended to the date thereof, whether oral or written, specifying correctly and
completely the following as to each Lease:
(i) a description (by rentable square feet and location)
of the leased space;
(ii) the name of the original and current lessee or any
other occupant of the space (each, a "Lessee");
(iii) the commencement and expiration dates of the original
Lease and any renewal terms thereof;
(iv) the basic rent (collectively, "Rents"), and a
specification of the dates on which each payment thereof is due and through
which each has been paid and the extent of any delinquencies thereof;
(v) all Rents prepaid by the Lessee;
(vi) all options which Lessee has, including, without
limitation, options to expand or change space, to extend or renew the term of
the Lease, except that lessor asserts that Hopkins & Gresham, P.C. has
defaulted under its lease as a result of chronic late payments of rent and that
said lessee is not entitled to an extension option ("Hopkins & Gresham
Disclosure"); and
(vii) the security deposit (the "Security Deposit") given by
the Lessee and the interest accrued thereof, if any.
(b) To Seller's knowledge, each Security Deposit has been and
is held by Seller in compliance with the respective Lease and applicable law,
except that Dr. Dubin is delinquent in the payment of a $2,033.96 security
deposit ("Dubin Disclosure"). To Seller's knowledge, there are no unfulfilled
obligations as to Security Deposits to Lessees under Leases the terms of which
have expired or been terminated and, to Seller's knowledge, there is no suit,
action or other claim made, pending or threatened with respect to any such
Security Deposit.
(c) Except as otherwise noted in the Rent Roll or in the Leases
delivered to Purchaser, to Seller's knowledge, the following is true with
respect to each Lease:
<PAGE>
(i) no Lease contains any purchase option;
(ii) no guarantor has been released or discharged,
voluntarily or involuntarily or by operation of law, from any obligation with
respect to the Lease that is guaranteed;
(iii) no Rents have been assigned, pledged or encumbered
except for encumbrances to be extinguished at or prior to Closing; and
(iv) Except as set forth on Exhibit P, all brokerage
commissions, if any, applicable to the Leases have been paid or will be paid by
the Seller on or before Closing Date and all tenant improvement obligations of
Seller as lessor under the Leases have been satisfied.
(d) To Seller's knowledge, no Security Deposit has been
applied by Seller on account of any actual or purported obligation of any
Lessee except as indicated on the Rent Roll and except that Smith, Purcell,
Basett & Koenig rightfully applied a security deposit of $9,209.56 to the
payment of rent in accordance with the terms of its lease and, after the
expiration of the Inspection Period, Seller shall not apply any Security
Deposit on account of any actual or purported obligation of any Lessee prior to
the Closing unless such Lessee has vacated and surrendered its leased premises
to Seller prior to the Closing.
(e) To Seller's knowledge, no Lessee has been given any
concession or consideration for the rental of any portion of its demised
premises which will have any material effect upon the rental income represented
by Seller hereunder (except as set forth in the Leases); and to Seller's
knowledge, no Lessee is entitled hereafter to any concession, rebate, allowance
or free rent for any period on or after the date hereof, except as set forth in
the Leases.
(f) To Seller's knowledge, Seller has not received any notice
of a default on the part of Lessor from any tenant under its Lease which
default remains uncured.
16.2.4. Service Contracts. (a) To Seller's knowledge, there are no
service contracts, landscaping contracts, maintenance agreements or other
contracts for the provision of labor, services, materials or supplies to or for
the benefit of the Property which will affect or be obligations of Purchaser or
of the Property or any portion thereof following the Closing Date, other than
those listed on Exhibit I, (the "Service Contracts"), to Seller's knowledge,
true and complete copies of which have been provided to Purchaser; (b) to
Seller's knowledge, there are no leases, rental or other agreements for the use
of any of the Personal Property which will affect or be obligations of
Purchaser or of the Property or any portion thereof following the Closing Date
except as set forth on Exhibit I attached hereto; (c) to Seller's knowledge,
except as shown on the copies of the Service Contracts heretofore delivered
there are no amendments to said Service Contracts; and (d) to Seller's
knowledge, no material uncured default exists under any Service Contract.
16.2.5. Litigation. There is no pending or, to Seller's knowledge,
threatened litigation which is or could become a liability of the Property or
any portion thereof other than as shown on Exhibit Q hereto, if any.
<PAGE>
16.2.6. Government Regulation. Except as set forth on Exhibit R
hereto, to Seller's knowledge, Seller has not received any written notice from
any Governmental Authority that the Property or any portion thereof is in
violation of any law, regulation, ordinance, order or other requirements
materially affecting the Property or any portion thereof, which notice remains
uncured.
16.2.7. Condemnation. To Seller's knowledge, Seller has not
received any written notice that the Property or any portion thereof is or will
be imminently subject to or affected by any condemnation, eminent domain or
similar proceedings.
16.2.8. Options. To Seller's knowledge, there are no options or
rights of first refusal affecting the Property (except as contained in the
Leases) or Seller's right to complete the transactions contemplated by this
Agreement.
16.2.9. Insurance Company Notices. Seller has not received any
written notice from any insurance company requiring or recommending that Seller
make any repairs or perform any work on or at the Land or the Improvements,
which has not been completed.
16.2.10. Employees. There are no employees of Seller at the
Property who would become employees of Purchaser by virtue of the transactions
contemplated by this Agreement.
16.2.11. Certificates of Occupancy. To Seller's knowledge, annexed
hereto as Exhibit S is a true, accurate and complete copy of all of the
Certificates of Occupancy in Seller's possession for the Improvements.
16.2.12. Permits. To Seller's knowledge, annexed hereto as Exhibit
T is a true, accurate and complete schedule of all of the permits and licenses
(collectively, "Permits") in Seller's possession for the Improvements. To
Seller's knowledge, Seller has received no notice of revocation, which
revocation has not been cured or rescinded, from any issuer of a Permit, except
that the Permits expired on their own terms as a matter of local custom as of
December 31, 1996 and, Seller has no knowledge of any facts which would lead
Seller to believe that said permits will not be re-issued for 1997 in the
ordinary course.
16.2.13. Title to Personal Property. Purchaser shall own on the
Closing Date all items of personal property set forth on Exhibit B.
16.2.14. Seller and Purchaser each hereby represents to the other
party that to the representing party's knowledge, there is no reason to believe
that any representation or warranty made by such party in this Agreement or any
conveyance document delivered by such party pursuant to Paragraphs 9.2.1
through 9.2.7, both inclusive, 9.2.10 and 9.2.11 herein contains an untrue
statement of a material fact or omits to state a material fact necessary in
order to make such representation or warranty, in light of the circumstances
under which they were made, not misleading.
<PAGE>
16.3. Purchaser hereby represents and warrants to Seller as follows:
16.3.1. Power and Authority. Purchaser is a corporation, duly
organized, validly existing and in good standing under the laws of the State of
Delaware; Purchaser has the power and authority to enter into this Agreement,
to perform its obligations hereunder and to consummate the transactions
contemplated herein; neither the execution and delivery hereof by Purchaser nor
the performance by Purchaser of Purchaser's obligations hereunder will violate
or constitute an event of default under any material terms or material
provision of any decree to which Purchaser is a party or by which Purchaser is
bound. No petition in bankruptcy (voluntary or otherwise), assignment for the
benefit of creditors, or petition seeking reorganization or arrangement or
other action under federal or state bankruptcy laws is pending against or
contemplated by Purchaser.
16.3.2. Authorization; Valid Obligation. All actions required to be
taken by or on behalf of Purchaser to authorize Purchaser to execute and
deliver this Agreement have been duly taken and all actions required to be
taken by or on behalf of Purchaser to authorize Purchaser to carry out the
terms of this Agreement will be taken prior to the time such obligation herein
must be performed. No consent to the execution, delivery and performance of
this Agreement by Purchaser is required from any partner, board of directors,
shareholder, creditor, investor, judicial or administrative body, Governmental
Authority or other Person, other than any such consents which already have been
unconditionally given. This Agreement is a valid and binding obligation of
Purchaser, enforceable in accordance with its terms, except as the same may be
affected by bankruptcy, insolvency, moratorium or similar laws, or by legal or
equitable principles relating to or limiting the rights of contracting parties
generally.
16.4. If at any time after the execution of this Agreement, either
Purchaser or Seller become aware of information (a "Change") which makes a
representation and warranty contained in this Agreement to become untrue in any
material respect without regard to limitation based upon personal knowledge,
said party shall promptly disclose said information to the other party hereto.
Provided the party making the representation or warranty did not take any
deliberate actions to cause the representation or warranty in question to
become untrue in any material respect and did not intentionally make a material
false representation or warranty, said party shall not be in default under this
Agreement and the sole remedy of the other party shall be to terminate this
Agreement, in which case Purchaser will receive a refund of the Earnest Money
with any accrued interest thereon and neither party will have any further
liability under this Agreement except to the extent it specifically survives
the termination hereof. Purchaser, provided that it notifies Seller within ten
(10) days after receiving notice from Seller of a Change, may elect to close
subject to such Change and then both parties hereto will be deemed to have
waived their right to terminate this Agreement with respect to such Change.
Notwithstanding anything contained herein to the contrary, if the status of any
of the tenancies changes from the date of the rent roll attached hereto and the
date of the rent roll delivered at Closing, provided the change in status is
not caused by a breach of Seller's covenants contained in Paragraph 16.5,
Paragraph 16.6 or Paragraph 25 herein, then Purchaser shall not have the right
<PAGE>
to terminate this Agreement or make any claim for a breach of a representation
or warranty hereunder involving the rent roll or tenancies thereunder.
Purchaser and Seller are prohibited from making any claims against the other
party hereto after the Closing with respect to any breaches of the other
party's representations and warranties contained in this Agreement that the
claiming party has actual knowledge of prior to the Closing. For the purpose
of this Paragraph 16.4, Purchaser's knowledge will be limited solely to the
knowledge of Wayne Comer after review of all due diligence materials prepared
by or for Purchaser in connection with the acquisition of the Property.
16.5. On the Closing Date, Seller shall tender possession of the
Property to Purchaser in the same condition the Property was in on the date of
this Agreement, subject to reasonable use, wear and tear and, subject to
Paragraph 6 hereof, but Seller shall not be required to incur any capital
expenses from or after the date hereof unless failure to do so would constitute
a material breach under any of the Leases. Subject to the provisions of
Paragraph 25 hereof, Seller agrees that between the date hereof and the Closing
Date it shall continue to operate the Property in substantially the same manner
it has operated the Property prior to the date hereof, subject to reasonable
wear and tear and casualty.
16.6. Seller covenants and agrees that from and after the date of this
Agreement until the Closing Date or earlier termination of this Agreement:
16.6.1. Seller will not, without the prior written consent of
Purchaser, enter into any new employment, management, service, maintenance or
union agreements relating to the Property or renew or extend any contracts,
unless such new agreements and such contracts, as renewed or extended, will be
cancelable by Purchaser on not more than thirty (30) days prior notice without
any costs for such cancellation.
16.6.2. No alterations to the physical condition of the Premises
will be made without the prior written consent of Purchaser, except for (a)
work required (if any) to be performed by Seller under an existing Lease, and
(b) restoration work in connection with a casualty.
16.6.3. No refurbishment to the Personal Property costing in excess
of an aggregate amount of Twenty-Five Thousand Dollars ($25,000.00) will be
made without the prior written consent of Purchaser, which approval shall not
be unreasonably withheld, delayed, or conditioned except for (a) work required
to be performed or materials provided by Seller under an existing Lease and (b)
refurbishment in connection with a casualty; provided that all such work can be
completed prior to the Closing Date.
16.6.4. All necessary diligence will be used to keep in full force
and effect (or to renew, when necessary) all Permits.
16.6.5. None of the Personal Property will be repaired, replaced or
removed from the Property except in the ordinary course of business; provided
in the case of such removal, the removed Personal Property shall be replaced
with Personal Property of equivalent value and utility.
<PAGE>
16.6.6. Seller shall promptly notify Purchaser of (a) any written
notices received by Seller from any governmental authority regarding violation
of any law relating to the Property, and (b) any written notice received by
Seller of any material default by Seller or by the other party thereto existing
under any Service Contract of any Lease.
17. LIMITATION OF LIABILITY.
17.1. Neither Seller's partners nor any Affiliate of Seller, nor any
of their respective beneficiaries, shareholders, partners, officers, directors,
agents or employees, heirs, successors or assigns shall have any personal
liability of any kind or nature for or by reason of any matter or thing
whatsoever under, in connection with, arising out of or in any way related to
this Agreement and the transactions contemplated herein, and Purchaser hereby
waives for itself and anyone who may claim by, through or under Purchaser any
and all rights to sue or recover on account of any such alleged personal
liability.
17.2. Notwithstanding anything contained herein to the contrary,
Purchaser hereby agrees that the maximum aggregate liability of Seller for
actual damages (Purchaser hereby waiving any claim for consequential or
punitive damages), in connection with, arising out of or in any way related to
a breach by Seller under this Agreement or any document or conveyance agreement
in connection with the transaction set forth herein after the Closing shall be
$1,000,000.00. In addition, Seller's maximum aggregate liability shall be
increased by an amount up to $100,000.00 in order to compensate Purchaser
pursuant to Paragraph 37 hereof. Purchaser hereby waives for itself and anyone
who may claim by, through or under Purchaser any and all rights to sue or
recover from Seller any amount greater than said limit.
17.3. Seller further agrees not to distribute $1,100,000.00 of the
proceeds of the Purchase Price to its partners for the longer of (i) nine (9)
months after the Closing and (ii) final resolution of any claims by Purchaser
and asserted in writing against Seller prior to the expiration of the nine (9)
months after the Closing in accordance with the terms of this Agreement
("Claims"); provided, however, that if any Claims are disputed by Seller,
Seller shall have the right, by written notice to Purchaser, to require
Purchaser to file suit in a court of competent jurisdiction within thirty (30)
days after such notice to Purchaser; otherwise said notice with respect to the
Claim in question shall no longer prevent Seller from distributing the
proceeds.
18. TIME OF ESSENCE. Time is of the essence of this Agreement, subject to
Purchaser's right to extend the Closing Date to a date no later than February
28, 1997 as specifically set forth in Paragraph 8 herein.
19. NOTICES. Any notice or demand which either party hereto is required or
may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by overnight courier
such as Federal Express, by facsimile transmission addressed as follows:
<PAGE>
TO SELLER: c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attention: Ms. Ilona Adams
with copies to: The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attention: Mr. James Mendelson
(847) 317-4367
(847) 317-4462 (FAX)
and to: Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, Illinois 60661-3693
Attention: Daniel J. Perlman, Esq.
(312) 902-5532
(312) 902-1061 (FAX)
TO PURCHASER: Acquiport Park Central, Inc.
c/o J.P. Morgan Investment Management Inc.
522 5th Avenue, 9th Floor
New York, New York 10036
Attention: Mr. Wayne A. Comer
(212) 837-1228
(212) 837-2604 (FAX)
and one copy to: Willkie Farr & Gallagher
153 E. 53rd Street
New York, New York 10022
Attention: Monty Davis, Esq.
(212) 821-8204
(212) 821-8111 (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 or if sent by overnight
courier, or the same day as given if personally delivered or if sent by
facsimile transmission and received by 5:00 p.m. Chicago time. Any such
notice, demand or document may be given by each party's attorneys.
20. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute two
(2) copies of this Agreement and three (3) copies of the Escrow Agreement and
forward them to Seller for execution. Seller will forward one (1) copy of the
executed Agreement to Purchaser and will forward the following to the Escrow
Agent:
<PAGE>
(A) One (1) fully executed copy of this Agreement; and
(B) Three (3) copies of the Escrow Agreement signed by the parties with a
direction to execute two (2) copies of the Escrow Agreement and deliver a fully
executed copy to each of the Purchaser and the Seller.
Purchaser shall deposit by wire transfer of immediately available funds the
Earnest Money to the "Escrow Agent" under the Escrow Agreement within five (5)
business days after Seller's acceptance of this Agreement.
21. GOVERNING LAW. The provisions of this Agreement shall be governed by the
laws of Georgia.
22. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties and supersedes all other negotiations, understandings and
representations made by and between the parties and the agents, servants and
employees.
23. COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.
24. CAPTIONS. Paragraph titles or captions contained herein are inserted as a
matter of convenience and for reference, and in no way define, limit, extend or
describe the scope of this Agreement or any provision hereof.
25. NEW LEASES. Seller agrees to deliver to Purchaser five (5) days prior to
the expiration of the Inspection Period any new leases executed by Seller.
After the expiration of the Inspection Period, Seller shall not execute any new
lease affecting the Property or modify, amend or accept the surrender
(collectively or individually a "Modification Agreement") of any of the Leases
without Purchaser's prior written consent, which consent shall not be
unreasonably withheld. Upon requesting Purchaser's consent, Seller shall
deliver a complete copy of said proposed lease to Purchaser with a copy of any
brokerage commission agreement and statement as to the cost of any tenant
improvement work, contributions, and brokerage commissions due or to become due
in connection therewith (the "Disclosure Documents"). Purchaser's consent
shall be deemed given if Purchaser has not responded to the contrary within
five (5) business days after receipt of Seller's written request and the
complete copy of said lease or Modification Agreement and the Disclosure
Documents. If approved by Purchaser, a complete copy of any such lease or
Modification Agreement shall be delivered to Purchaser within five (5) days of
the full execution thereof. With respect to all new leases or Modification
Agreement executed and delivered to Purchaser five (5) days prior to the
expiration of the Inspection Period and with respect to all other new leases or
Modification Agreement, provided Purchaser has approved the new lease to the
extent said approval is required, leasing costs and commissions, tenant
improvements and contributions, and reasonable attorneys' fees, shall be paid
by Purchaser or credited to Seller at Closing if already paid by Seller
provided such costs and expenses were specifically disclosed to Purchaser in
the Disclosure Documents.
<PAGE>
26. TENANT CERTIFICATE CONDITION TO CLOSING.
26.1. The following terms have been defined as follows for convenience
of reference:
(i) "Tenant Certificate" means a certificate, commonly known as an
estoppel certificate, signed by a tenant with respect to its Lease, either in
the form set forth on Exhibit M hereto or on such other form as is
substantially consistent with the requirements of the tenant's lease for such
certificates.
(ii) "Qualification" means any assertion in a Tenant Certificate
(whether in the form of Exhibit M or otherwise) of (i) a claim, counterclaim,
offset or defense against the lessor, (ii) a default on the part of the lessor,
(iii) unpaid credits, allowances or other sums due from the lessor prior to the
date of the estoppel (other than expressly disclosed on Exhibit N or Exhibit P
attached hereto or pursuant to a new lease pursuant to Paragraph 25 herein),
(iv) an unfulfilled construction or other obligation on the part of the lessor
prior to the date of estoppel (other than expressly disclosed on Exhibit N or
Exhibit P attached hereto or pursuant to a new lease pursuant to Paragraph 25
herein), or (v) information which is contrary (x) to the information contained
in the rent roll attached hereto as Exhibit N, (y) the information pertaining
to tenant allowances and concessions and leasing commissions contained on
Exhibit P, or (z) the information contained in the prepared Tenant Certificates
attached hereto as Exhibit U (the "Prepared Tenant Certificates").
(iii) "Unacceptable Qualification" means any Qualification other
than the following:
(a) a Qualification which is expressly disclosed on the Rent
Roll attached hereto as Exhibit N or the schedule attached hereto as Exhibit P
or a Qualification relating to non-payment of December, 1996 or January or
February, 1997 rent, provided the same is not as a result of a default by
Seller; or
(b) a Qualification expressly disclosed in this Agreement,
including, without limitation the Hopkins & Gresham Disclosure and the Dubin
Disclosure, or the Exhibits attached hereto and made a part hereof, such as
litigation disclosed on Exhibit Q.
26.2. If a Qualification is not an Unacceptable Qualification, it
shall not affect Purchaser's obligations to close hereunder or give rise to any
liability from Seller to Purchaser.
26.3. Seller shall promptly request a Tenant Certificate in the form
of Exhibit M from all tenants, and shall in good faith pursue the collection of
the same. Seller shall deliver to Purchaser, upon Seller's receipt thereof,
all Tenant Certificates which have actually been signed by tenants (whether in
the form of Exhibit M or otherwise).
26.4. It shall be a condition to Purchaser's obligations hereunder
(the "Estoppel Condition") that Seller deliver to Purchaser, at or prior to
5:00 p.m. Chicago time on February 11, 1997 (i) a Tenant Certificate from each
<PAGE>
tenant of the Property occupying or leasing at least 7,500 square feet as shown
on the Rent Roll, in the aggregate, of leasable area of the Property ("Major
Tenant"), and (ii) a Tenant Certificate from non-Major Tenants occupying
seventy-five percent (75%) of the leased area of the Property not occupied by
the Major Tenants. Notwithstanding the foregoing to the contrary, Seller shall
not have satisfied the Estoppel Condition if the Tenant Certificates received
by Seller disclose Unacceptable Qualifications other than Unacceptable
Qualifications with an "Estoppel Qualification Sum" (hereinafter defined) of
less than $100,000 in the aggregate for all of the Leases. The "Estoppel
Qualification Sum" shall mean the following:
(i) if the claim asserted arises out of a defect which can be cured,
with the expenditure of money on a one time basis, such as a physical defect,
then such sum shall be calculated by a reasonable estimate of the cost to
repair or remediate said defect; and
(ii) if the claim asserted affects a continuing obligation of a
tenant under the lease, such as the payment of rent, then the claim shall be
calculated by (i) determining the amount of the claim on a per annum basis,
(ii) multiplying said amount by the number of years or partial years said claim
would affect the monetary obligations under the lease and (iii) only if such
claim relates to the payment of rent, then discounting said product on a
present value basis using a discount rate of 10% per annum.
If the Unacceptable Qualifications have an Estoppel Qualification Sum of
less than $100,000 in the aggregate for all of the Leases, then Seller shall
either (i) grant Purchaser a credit at Closing for an amount equal to the
Estoppel Qualification Sum, or (ii) cure all conditions giving rise to an
Unacceptable Qualification on or before the Closing. The determination to
perform the covenant contained in subparagraphs (i) or (ii) in the preceding
sentence shall be made by Seller in its sole discretion. Provided Seller
performs its covenant in this Paragraph 26.4, the disclosure of Unacceptable
Qualifications having an Estoppel Qualification Sum of less than $100,000 in
the aggregate shall not affect Purchaser's obligations to close hereunder or
give rise to any additional liability from Seller to Purchaser.
26.5. If Seller has not satisfied the Estoppel Condition on or before
5:00 p.m. Chicago time on February 11, 1997, then Purchaser shall have the
right to terminate this Agreement by delivering written notice to Seller on or
before 5:00 p.m. Chicago time on February 14, 1997. If Purchaser exercises its
rights to terminate in accordance with the terms of this Paragraph 26.5, this
Agreement shall be null and void without further action of the parties and all
Earnest Money theretofore deposited by Purchaser together with any interest
accrued thereon, shall be returned to Purchaser, and neither party shall have
any further liability to the other, except for those obligations which
specifically survive the terms hereof. If Purchaser does not terminate this
Agreement pursuant to the first sentence of this Paragraph 26.5, the parties
shall proceed to Closing and (i) Purchaser shall receive a credit at Closing
equal to the amount of the Estoppel Qualification Sum of the Unacceptable
Qualifications contained in the Tenant Certificates, up to an aggregate amount
of $100,000 or (ii) Seller shall cure all conditions giving rise to an
Unacceptable Qualification Sum up to an aggregate amount of $100,000. The
determination to perform the covenant contained in subparagraphs (i) or (ii) in
the preceding sentence shall be made by Seller in its sole discretion.
<PAGE>
27. PUBLICITY. Neither party shall make any announcements or issue any press
releases which refer to the other party or any affiliate of the other party
without the express written consent of the other party.
28. AMENDMENT. No provision of this Agreement or of any documents or
instruments entered into, given or made pursuant to this Agreement may be
amended, charged, waived, discharged or terminated except by an instrument in
writing signed by the party against whom enforcement of the amendment, change,
waiver, discharge or termination is sought.
29. PARTIES. The covenants and agreements herein contained shall extend to
and be obligatory upon the heirs, executors, administrators, successors and
assigns of the respective parties hereto.
30. NUMBER AND GENDER OF WORDS. Words of any gender used in this Agreement
shall be held and construed to include any other gender, and words of a
singular number shall be held to include the plural and vice versa, unless the
context requires otherwise.
31. THIRD PARTIES. Nothing in this Agreement, express or implied, is intended
to confer upon any person, other than the parties hereto and their respective
heirs, executors, administrators, successors and assigns, any rights or
remedies under or by reason of this Agreement.
32. FURTHER ASSURANCE. Each of Seller and Purchaser will, at any time and
from time to time after the Closing Date, upon the request of the other,
execute, acknowledge and deliver, or will cause to be done, executed,
acknowledged and delivered all such further acts, deeds, assignments,
transfers, conveyance, and assurance as may reasonably be required to
consummate the transactions described herein. The provisions of this Paragraph
shall survive the Closing.
33. EXHIBITS. All exhibits described in this Agreement and attached hereto
are by this reference incorporated fully herein. The term "this Agreement"
shall be considered to include all such exhibits.
34. INVALID PROVISIONS. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws, such provision
shall be fully severable; this Agreement shall be construed and enforced as if
such illegal, invalid or unenforceable provisions had never comprised a part of
this Agreement; and the remaining provisions of this Agreement shall remain in
full force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or buy it severance from this Agreement. Furthermore,
in lieu of such illegal, invalid or unenforceable provision, there shall be
added automatically as a part of this Agreement a provision as similar in terms
to such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.
35. INTERPRETATION. The parties agree that each party and its counsel have
reviewed and revised this Agreement and that the normal rule of construction to
the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement or any amendments
hereto.
<PAGE>
36. NO WAIVER. No failure of any party to exercise any power given such party
hereunder or to insist upon strict compliance by the other party with its
obligations hereunder shall constitute a waiver of such party's right
thereafter to demand strict compliance with the terms of this Agreement.
37. ATTORNEYS' FEES. In the event of a dispute in connection with this
Agreement involving an action for damages in which the prevailing party
recovers a final judgment, the prevailing party shall be entitled to reasonable
attorneys' fees and all other expenses of litigation, up to an aggregate
maximum amount of $100,000.00 for all actions for damages arising under this
Agreement, and the attorneys' fees and all other expenses of litigation shall
be included in and made part of any such judgment.
38. ADVISOR FEE. Purchaser hereby agrees to pay J.P. Morgan Investment
Management, Inc. ("Purchaser's Advisor") a fee for Purchaser's Advisor's
services as a real estate advisor.
[EXECUTION PAGE TO FOLLOW]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date first set forth above.
PURCHASER:
ACQUIPORT PARK CENTRAL, INC., a Delaware corporation
By: /s/ Wayne A. Comer
-----------------------------------
Name: Wayne A. Comer
-----------------------------------
Its: Vice President
-----------------------------------
SELLER:
PARK CENTRAL LIMITED PARTNERSHIP, an Illinois
limited partnership
By: Park Central Partners, Inc., an Illinois
corporation, its general partner
By: /s/ James E. Mendelson
-----------------------------------
Name: James E. Mendelson
-----------------------------------
Its: Authorized Representative
-----------------------------------
<PAGE>
Park Central
Atlanta, Georgia
of Insignia Mortgage and Investment Company ("Seller's Broker")
executed this Agreement in its capacity as a real estate broker and
acknowledges that the fee or commission due it from Seller as a result of the
transaction described in this Agreement is as set forth in that certain Listing
Agreement, dated __, 199_ between Seller and Seller's Broker (the "Listing
Agreement"). Seller's Broker also acknowledges that payment of the aforesaid
fee or commission is conditioned upon the Closing and the receipt of the
Purchase Price by the Seller. Seller's Broker agrees to deliver a receipt to
the Seller at the Closing for the fee or commission due Seller's Broker and a
release, in the appropriate form, stating that no other fees or commissions are
due to it from Seller or Purchaser.
INSIGNIA MORTGAGE AND INVESTMENT COMPANY
By: /s/ Alan G. Lieberman
-------------------------------
Name: Alan G. Lieberman
-------------------------------
Its: Senior Vice President
-------------------------------
<PAGE>
Wayne A. Comer of J.P. Morgan Investment Management, Inc. ("Purchaser's
Advisor") executed this Agreement in its capacity as a real estate advisor and
acknowledges that the fee due it from Purchaser as a result of the transaction
is in Purchaser's Advisor's capacity as a real estate advisor.
J.P. MORGAN INVESTMENT MANAGEMENT, INC.
By: /s/ Wayne A. Comer
-------------------------------------
Name: Wayne A. Comer
-------------------------------------
Its: Vice President
-------------------------------------
<PAGE>
Exhibits
A - Legal
B - Personal Property
C - Escrow Agreement
D - Title Commitment
E - Permitted Exceptions
F - Deed
G - Special Warranty Bill of Sale
H - Assignment and Assumption of Intangible Property
I - Service Contracts
J - Assignment and Assumption of Leases and Security Deposits
K - Non-Foreign Affidavit
L - Notice to Tenants
M - Tenant Estoppel Certificate
N - Rent Roll
O - Intentionally Omitted
P - Leasing Commissions and Tenant Improvements
Q - Litigation
R - Government Notices
S - Certificates of Occupancy
T - Permits and Licenses
U - Prepared Tenant Certificates
<PAGE>
AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), is entered into as of the 26th
day of December, 1996, by and between 5950 SWR Corporation, a Delaware
corporation ("Purchaser"), and Symphony Woods Limited Partnership, an Illinois
limited partnership ("Seller").
W I T N E S S E T H:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to sell
at the price of Seven Million Two Hundred Seventy-Five Thousand Dollars
($7,275,000) ("Purchase Price"), and on the terms and conditions hereinafter
set forth, the property commonly known as Symphony Woods Office Center, 5950
Symphony Woods Road, Columbia, Maryland, consisting of the following:
1.1 All of Seller's right, title and interest in the real property
("Land") and all buildings and other improvements ("Improvements") situated on
the Land, as more particularly described on Exhibit A attached hereto and made
a part hereof (the Land and the Improvements are sometimes referred to herein
together as the "Property"), together with all easements and appurtenances
thereunto belonging and all of Seller's right, title and interest in and to all
streets, alleys and public ways adjacent thereto, if any, and together with all
of Seller's right, title and interest in and to all strips and gores located on
or adjacent to the Property or located between any parcels constituting the
Land, if any;
1.2 The personal property set forth on Exhibit B attached hereto
("Personal Property");
1.3 The tenant leases described in the rent roll set forth on Exhibit C
attached hereto and made a part hereof together with such other tenant leases
of the Property as may be made prior to Closing (as hereinafter defined) in
accordance with the terms of this Agreement ("Leases");
1.4 If and to the extent assignable and to the extent of Seller's
interest therein, if any: (a) all guarantees, warranties and indemnifications,
if any, received from suppliers, contractors, materialmen or subcontractors
arising out of, or in connection with, the installation, construction or
maintenance of the Property including, without limitation, the right to sue any
obligor for any breach of any covenant, agreement, representation, warranty or
guarantee contained therein; (b) all licenses, permits, certificates of
occupancy and franchises issued by any federal, state, county or municipal
authority relating to the use, maintenance or operation of the Property running
to or in favor of Seller or pertaining to the Property; (c) all trade styles,
and trade names, including, without limitation, the name "Symphony Woods", and
all contract rights, brochures, manuals, lists of prospective tenants,
advertising material, books and records, utility contracts and telephone
numbers; (d) the plans and specifications for the Improvements and all
unexpired claims and sureties, if any, received in connection with the
construction, improvement or equipment of the Improvements; and (e) the service
and maintenance contracts set forth in Exhibit D ("Service Contracts").
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2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as follows:
2.1 The sum of One Hundred Thousand Dollars ($100,000) ("Earnest Money"),
by check payable to the escrow agent, to be held in a joint order escrow
pursuant to an escrow agreement mutually acceptable to Purchaser and Seller,
which shall be deposited by Purchaser within one business day after the opening
of such escrow (which Purchaser and Seller shall open simultaneously with the
execution of this Agreement); and
2.2 On the Closing Date (as hereinafter defined), the balance of the
Purchase Price, adjusted in accordance with the prorations, by federally wired
"immediately available" funds, on or before 2:00 p.m. Chicago time. Any
provisions herein providing for the delivery of the Earnest Money to either
party hereof are intended to mean the Earnest Money plus any interest earned
thereon and less all escrow and investment fees.
2.3 Upon delivery, the Earnest Money shall be invested in an
interest-bearing account. Interest earned thereon shall be paid to Purchaser
unless the Earnest Money is disbursed to Seller in accordance with the terms of
this Agreement, in which case such interest shall be paid to Seller. The
Earnest Money shall not be refundable unless the transaction contemplated by
this Agreement is not consummated as the result of Seller's default or the
failure of a condition precedent to Purchaser's obligations hereunder or
Purchaser properly elects to terminate this Agreement pursuant to the
provisions of Paragraph 6. Upon the Closing, the Earnest Money and any
interest earned thereon shall be credited toward payment of the Purchase Price.
3. TITLE COMMITMENT AND SURVEY.
3.1 Seller has delivered to Purchaser an ALTA Form B extended coverage
title commitment dated November 11, 1996 ("Title Commitment") for an owner's
title insurance policy ("Title Policy") issued by Chicago Title Insurance
Company ("Title Company"), covering the title to the Property. At Closing,
Purchaser shall receive the Title Policy in the amount of the Purchase Price,
subject only to (i) general real estate taxes not yet due and payable, (ii)
special assessments and related charges not yet due and payable, (iii) matters
shown on the Survey (hereafter defined); (iv) rights of tenants under existing
Leases (v) acts done or caused by or through Purchaser or its agents; and (vi)
the title exceptions listed on Exhibit F attached hereto. All of the items
referred to in subparagraphs (i) through (vi) of this Paragraph 3.1 are
hereinafter referred to as "Permitted Exceptions". All other exceptions to
title, including, without limitation,the general exceptions shown on the Title
Commitment, shall be referred to as "Unpermitted Exceptions". Purchaser shall
be obligated to close the transaction contemplated by this Agreement without
objection as to title matters if the Title Company issues the Title Policy in
the form prescribed by this Agreement. Purchaser and Seller shall each pay
one-half of the costs of the Title Commitment and Title Policy and Purchaser
shall pay for the cost of any endorsements to, or extended coverage on, the
Title Policy as requested by Purchaser or Purchaser's lender.
3.2 Purchaser has received a survey of the Property prepared by Ben Dyer
Associates, Inc. dated October 17, 1996 ("Survey"). Purchaser and Seller shall
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cooperate in good faith to obtain any revisions to the Survey and the
surveyor's certificate as may be requested by Purchaser prior to Closing.
Purchaser and Seller shall each pay one-half the cost of the Survey as
heretofore provided to Purchaser, and Purchaser shall pay the costs of any
revisions thereto requested by Purchaser.
3.3 The obligations of Purchaser and Seller to pay various costs set
forth in Paragraphs 3.1 and 3.2 shall survive the termination of this
Agreement.
4. PAYMENT OF CLOSING COSTS.
4.1 In addition to the costs set forth in Paragraphs 3.1 and 3.2,
Purchaser and Seller shall each pay one-half of the costs of the documentary or
transfer stamps to be paid with reference to the Deed (as hereinafter defined)
and all other stamps, intangible, transfer, documentary, recording, sales tax
and surtax imposed by law with reference to any other sale documents delivered
in connection with the sale of the Property to Purchaser.
5. CONDITION OF TITLE.
5.1 If, prior to Closing (as hereinafter defined), a date-down to the
Title
Commitment discloses any new Unpermitted Exceptions which, in the aggregate, do
not exceed $25,000 (each, a "Minor Unpermitted Exception"), Seller shall, at
Seller's expense, bond over, cure and/or have such Minor Unpermitted Exceptions
removed from the Title Commitment or have the Title Insurer commit to insure
against loss or damage that may be occasioned by such Minor Unpermitted
Exceptions. Notwithstanding the foregoing, if such date down to the Title
Commitment discloses any new Unpermitted Exceptions which, in the aggregate,
equal or exceed $25,000, Seller shall have no obligation, to bond over, cure
and/or have such exceptions removed from the Title Commitment or to have the
Title Insurer commit to insure against loss or damage that may be occasioned by
such Unpermitted Exceptions except that Seller shall discharge any new
Unpermitted Exception caused by the affirmative action or omission of Seller or
its agents. Seller shall undertake the action required by this Section 5.1, if
any, with respect to any Unpermitted Exception within three (3) business days
from Seller's receipt of the date down to the Title Commitment. If Seller
offers to insure over any new Unpermitted Exceptions which, in the aggregate
equal or exceed $25,000 but Purchaser refuses to accept insurance over such
Unpermitted Exceptions, Purchaser may terminate this Agreement upon written
notice to Seller within three (3) business days after written notice from
Seller of its failure to cure any such Unpermitted Exception; provided,
however, and notwithstanding anything contained herein to the contrary, if the
Unpermitted Exception which gives rise to Purchaser's right to terminate was
recorded against the Property as a result of the affirmative action or omission
of Seller or its agent, (and not by any unrelated third party) and Seller fails
to terminate the effect of such matter as an encumbrance on title in a timely
manner, then Purchaser shall have the additional rights contained in Paragraph
14 herein. Absent notice from Purchaser to Seller in accordance with the
preceding sentence, Purchaser shall be deemed to have elected to not take title
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subject to said Unpermitted Exception. Subject to the foregoing, if Purchaser
terminates this Agreement in accordance with the terms of this Paragraph 5.1,
this Agreement shall terminate without further action of the parties and all
Earnest Money theretofore deposited into the escrow by Purchaser, together with
any interest accrued thereon, shall be returned to Purchaser, and neither party
shall have any further liability to the other, except for those covenants and
obligations that specifically survive termination of this Agreement.
5.2 Seller agrees to convey fee simple title to the Property to Purchaser
by special warranty deed ("Deed") (in the form attached hereto as Exhibit G) in
recordable form subject only to the Permitted Exceptions and any Unpermitted
Exceptions approved by Purchaser in accordance with Paragraph 5.1 above.
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
6.1 Except as provided in the indemnity provisions contained in Paragraph
7.1 of this Agreement, Seller shall bear all risk of loss with respect to the
Property through the Closing. Seller agrees to maintain its existing "all risk"
replacement cost casualty insurance and rent loss insurance in place until the
Closing Date. Notwithstanding the foregoing, in the event of insured damage to
the Property by fire or other casualty prior to the Closing Date, repair of
which would cost less than or equal to $50,000 (as reasonably determined by
Seller), and provided that (i) no tenant has the right to terminate its Lease
as a result of such fire or other casualty and (ii) Seller credits Purchaser
with any rent abatement owed to tenants as a result of such fire or other
casualty (whether before or after the Closing), Purchaser shall not have the
right to terminate its obligations under this Agreement by reason thereof, but
Seller shall have the right to elect to either repair and restore the Property
if such repair or restoration may be completed prior to the Closing Date or to
assign and transfer to Purchaser on the Closing Date all of Seller's right,
title and interest in and to all insurance proceeds paid or payable to Seller
on account of such fire or casualty plus the amount of Seller's insurance
deductible. Seller shall promptly notify Purchaser in writing of any such fire
or other casualty and Seller's estimate of the cost to repair the damage caused
thereby. In the event of (i) insured damage to the Property by fire or other
casualty prior to the Closing Date, repair of which would cost in excess of
$50,000 (as reasonably determined by Seller), or which would allow any tenant
to terminate its Lease, or (ii) any uninsured damage to the Property for which
Seller is not willing to provide Purchaser a credit at Closing, then this
Agreement may be terminated at the option of Purchaser, which option shall be
exercised, if at all, by Purchaser's written notice thereof to Seller within
ten (10) business days after Purchaser receives written notice of such fire or
other casualty from Seller; and upon the exercise of such option by Purchaser
this Agreement shall terminate without further action by the parties, the
Earnest Money deposited by Purchaser shall be returned to Purchaser together
with interest thereon, and neither party shall have any further liability or
obligations hereunder, except for those covenants and obligations which
expressly survive termination of this Agreement. In the event that Purchaser
has an option to terminate as provided in the preceding sentence and Purchaser
provides written notice to Seller of its election to proceed with the Closing
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in accordance with this Paragraph 6.1, the Closing shall take place on the
Closing Date and Seller shall assign and transfer to Purchaser on the Closing
Date all of Seller's right, title and interest in and to all insurance proceeds
paid or payable to Seller on account of the fire or casualty and shall pay to
Purchaser the amount of Seller's insurance deductible. Notwithstanding anything
contained herein to the contrary, Seller's obligation to transfer all insurance
proceeds paid to Seller as set forth more fully in this Paragraph 6.1 shall
survive the Closing and the recording of the Deed.
6.2 If between the date of this Agreement and the Closing Date, any
condemnation or eminent domain proceedings are initiated which might result in
the taking of any part of the Property or the taking or closing of any right of
access to the Property, Seller shall immediately notify Purchaser of such
occurrence. In the event that the taking of any part of the Property shall: (i)
impair access to the Property; (ii) cause any non-compliance with any
applicable law, ordinance, rule or regulation of any federal, state or local
authority or governmental agencies having jurisdiction over the Property or any
portion thereof; (iii) adversely impair the use of the Property as it is
currently being operated; (iv) allow any tenant to abate its rent or terminate
its Lease; or (v) include more than 5% of the total square footage of the Land
(hereinafter collectively referred to as a "Material Event"), Purchaser may:
6.2.1 terminate this Agreement by written notice to Seller, in
which event the Earnest Money deposited by Purchaser, together with interest
thereon, shall be returned to Purchaser and all rights and obligations of the
parties hereunder with respect to the closing of this transaction will cease,
except for those covenants and obligations hereunder which expressly survive
termination of this Agreement; or
6.2.2 proceed with the Closing, in which event Seller shall
assign to Purchaser all of Seller's right, title and interest in and to any
award made or to be made in connection with such condemnation or eminent domain
proceedings. Notwithstanding anything contained herein to the contrary,
Seller's obligation to transfer Seller's interest in such award as set forth
more fully in this Paragraph 6.2.2 shall survive the Closing and the recording
of the Deed.
Purchaser shall then notify Seller, within five (5) business days after
Purchaser's receipt of Seller's notice, whether Purchaser elects to exercise
its rights under Paragraph 6.2.1 or Paragraph 6.2.2. Closing shall be delayed,
if necessary, until Purchaser makes such election. If Purchaser fails to make
an election within such five (5) business day period, Purchaser shall be deemed
to have elected to terminate this Agreement as provided in Paragraph 6.2.1
above. If between the date of this Agreement and the Closing Date, any
condemnation or eminent domain proceedings are initiated which do not
constitute a Material Event, Purchaser shall be required to proceed with the
Closing, in which event Seller shall assign to Purchaser all of Seller's right,
title and interest in and to any award made in connection with such
condemnation or eminent domain proceedings.
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7. INSPECTION AND AS-IS CONDITION.
7.1 Purchaser acknowledges that Seller has provided Purchaser with the
information and materials requested by Purchaser with respect to Purchaser's
due diligence investigation, and that Purchaser and its agents, engineers,
employees, contractors and surveyors have had access to the Property to inspect
the Property and to conduct and prepare such studies, tests and surveys as
Purchaser has deemed reasonably necessary and appropriate, including, without
limitation, a review of the Leases and a review of all matters raised by the
Title Commitment and Survey. In connection with Purchaser's review of the
Property, Seller has delivered to Purchaser the due diligence materials listed
on Exhibit P attached hereto.
Purchaser acknowledges that all of the foregoing tests, investigations and
studies conducted under this Paragraph 7.1 by Purchaser were performed subject
to the following:
(i) Except as may be required by Purchaser to obtain financing
in order to close this transaction, all information set forth in the documents
to be reviewed hereunder by Purchaser, its employees and agents shall be held
in strict confidence until Closing and thereafter in the event that the Closing
does not occur;
(ii) In the event the Closing does not occur, Purchaser shall
promptly return to Seller any documents obtained from Seller or Seller's
agents;
(iii) Purchaser shall not have caused any lien, claim or charge
of any kind whatsoever to attach to the Property or any part thereof; and
(iv) such tests, investigations and studies have been conducted
at Purchaser's sole cost and expense, and in the event of any damage to the
Property caused by Purchaser, its agents, engineers, employees, contractors or
surveyors (including, without limitation, pavement, landscaping and surface
damage), Purchaser shall pay the cost incurred by Seller to restore the
Property to the condition existing prior to the performance of such tests,
investigations or studies.
Purchaser shall defend, indemnify and hold Seller and any affiliate or parent
of Seller, and all shareholders, employees, officers, directors and partners of
Seller or Seller's affiliate or parent (hereinafter collectively referred to as
"Affiliates of Seller") harmless from any and all liability, cost and expense
(including without limitation, reasonable attorneys' fees, court costs and
costs of appeal) suffered or incurred by Seller or Affiliates of Seller for
injury to persons or property caused by Purchaser's investigations, tests,
studies and inspections of the Property. Purchaser shall undertake its
obligation to defend set forth in the preceding sentence using attorneys
selected by Purchaser and reasonably acceptable to Seller. Notwithstanding
anything contained herein to the contrary, Purchaser's obligation to indemnify
Seller and pay the costs of restoring the Property, as more fully set forth in
this Paragraph 7.1, shall survive Closing and recording of the Deed and the
termination of this Agreement, as applicable.
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7.2 Except for the express representations and warranties of Seller set
forth in this Agreement and/or in the exhibits attached hereto, Purchaser
acknowledges and agrees that it will be purchasing the Property and the
Personal Property based solely upon its inspections and investigations of the
Property and the Personal Property, and that Purchaser will be purchasing the
Property and the Personal Property "AS IS" and "WITH ALL FAULTS", based upon
the condition of the Property and the Personal Property as of the date of this
Agreement, ordinary wear and tear and loss by fire or other casualty or
condemnation excepted and that Seller makes no other warranty or
representation, express or implied, or arising by operation of law, including,
but not limited to, any warranty of condition, habitability, merchantability or
fitness for a particular purpose, with respect to the Property. Without
limiting the foregoing, Purchaser acknowledges that, except as may otherwise be
specifically set forth elsewhere in this Agreement and/or specifically set
forth in the exhibits attached hereto, neither Seller nor its consultants,
brokers or agents have made any representations or warranties of any kind upon
which Purchaser is relying as to any matters concerning the Property or the
Personal Property, including, but not limited to: (i) the condition of the Land
or any improvements comprising the Property; (ii) the existence or
non-existence of any pollutant, toxic waste and/or any hazardous materials or
substances; (iii) economic projections or market studies concerning the
Property, or the income to be derived from the Property; (iv) any development
rights, taxes, bonds, covenants, conditions and restrictions affecting the
Property; (v) the nature and extent of any right of way, lease, lien,
encumbrance, license, reservation or other title matter; (vi) water or water
rights, topography, geology, drainage, soil or subsoil of the Property;
(vii) the utilities serving the Property; (viii) the suitability of the
Property for any and all activities and uses which Purchaser may elect to
conduct thereon; or (ix) the compliance of the Property with any zoning,
environmental, building or other laws, rules or regulations affecting the
Property, including, without limitation, the Americans with Disabilities Act or
any fire code or building code. Purchaser hereby releases Seller and the
Affiliates of Seller from any and all liability in connection with any claims
which Purchaser may have against Seller or the Affiliates of Seller, and
Purchaser hereby agrees not to assert any claims for contribution, cost
recovery or otherwise, against Seller or the Affiliates of Seller, relating
directly or indirectly to the existence of asbestos or hazardous materials or
substances on, or environmental conditions of, the Property, whether known or
unknown except to the extent of Seller's liability under the express
representations and warranties set forth in this Agreement and/or in the
exhibits attached hereto. Seller acknowledges that the foregoing release does
not constitute an agreement by Purchaser to indemnify Seller against any
environmental liabilities Seller may have to third parties. As used herein,
the term "hazardous materials or substances" means (i) hazardous wastes,
hazardous substances, hazardous constituents, toxic substances or related
materials, whether solids, liquids or gases, including but not limited to
substances defined as "hazardous wastes," "hazardous substances," "toxic
substances," "pollutants, "contaminants," "radioactive materials," or other
similar designations in, or otherwise subject to regulation under, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended, 42 U.S.C. Section 9601 et seq.; the Toxic Substance Control Act, 15
<PAGE>
U.S.C. Section 2601 et seq.; the Hazardous Materials Transportation Act, 49
U.S.C. Section 1802; the Resource Conservation and Recovery Act, 42 U.S.C.
Section 9601. et seq.; the Clean Water Act, 33 U.S.C. Section 1251; the Safe
Drinking Water Act, 42 U.S.C. Section 30Of et seq; the Clean Air Act, 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, "Environmental Laws"); and (ii) any other
substances, constituents or wastes subject to any applicable federal, state or
local law, regulation or ordinance, including any Environmental Law, now or
hereafter in effect, including but not limited to (A) petroleum, (B) refined
petroleum products, (C) waste oil, (D) waste aviation or motor vehicle fuel and
(E) asbestos. Purchaser acknowledges that having been given the opportunity to
inspect the Property, Purchaser is relying solely on its own investigation of
the Property and not on any information provided or to be provided by Seller
except to the extent of any express representation or warranty made by Seller
in this Agreement or in the exhibits attached hereto. Purchaser further
acknowledges that the information provided and to be provided with respect to
the Property was obtained from a variety of sources, and that Seller (x) has
not made any independent investigation or verification of such information and
(y) makes no representations as to the accuracy or completeness of such
information, except as set forth in this Agreement or in the exhibits attached
hereto.
7.3 Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller owned the Property. Except for the express
representations and warranties of Seller set forth in this Agreement and/or in
the exhibits attached hereto, 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.
Purchaser acknowledges that it is a sophisticated and experienced purchaser of
real estate and further that Purchaser has relied upon its own investigation
and inquiry with respect to the operation of the Property and releases Seller
and the Affiliates of Seller from any liability with respect to such historical
information except to the extent of Seller's liability under the express
representations and warranties set forth in this Agreement and/or in the
exhibits attached hereto.
7.4 Seller has provided to Purchaser the following existing reports:
(i) Phase I/Ltd. ACM Report dated June 4, 1991 prepared by Law Associates; and
(ii) Report of Facility Survey to Identify Asbestos-Containing Materials dated
March 9, 1993 prepared by Law Engineering ("Existing Reports"). Except for the
express representations and warranties of Seller set forth in this Agreement
and/or in the exhibits attached hereto, Seller makes no representation or
warranty concerning the accuracy or completeness of the Existing Reports.
Purchaser hereby releases Seller and the Affiliates of Seller from any
liability whatsoever with respect to the Existing Reports, including, without
limitation, the matters set forth in the Existing Reports, and the accuracy
and/or completeness of the Existing Reports except to the extent of Seller's
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liability under the express representations and warranties set forth in this
Agreement and/or in the exhibits attached hereto. Furthermore, Purchaser
acknowledges that it will be purchasing the Property with all faults disclosed
in the Existing Reports.
7.5 Notwithstanding anything contained herein to the contrary, the
acknowledgements, agreements, waivers and releases of Purchaser set forth in
this Paragraph 7 shall survive Closing and recording of the Deed and the
termination of this Agreement as applicable.
8. CLOSING.
8.1 The closing of this transaction ("Closing") shall be on or before
December 30, 1996 ("Closing Date"), at which time Seller shall deliver
possession of the Property to Purchaser. This transaction shall be closed in
accordance with the provisions of the joint closing instructions attached
hereto as Exhibit E. All deed and money escrow fees (including, so-called "New
York style" closing fees of the Title Company, if any,) shall be shared equally
between Purchaser and Seller. Purchaser and Seller shall each pay its own
attorneys' fees.
8.2 The following shall be conditions precedent to Purchaser's obligation
to close ("Purchaser Conditions"):
a. The Title Insurer shall commit to issue the Title Policy in the
form set forth in Paragraph 3.1.
b. No material adverse changes in the physical condition of the
Property shall have occurred prior to the Closing Date, subject, however, to
the provisions of Paragraph 6 hereof which obligate Purchaser to close
notwithstanding certain events of condemnation, eminent domain, damage and
casualty.
c. No Major Lease (hereafter defined) shall have been terminated
prior to the Closing Date.
d. The representations and warranties made herein by Seller shall
be true and correct in all material respects as of the Closing Date; and Seller
shall have satisfied all its obligations under this Agreement in a timely
manner.
(e) Purchaser shall have received Tenant Certificates or Seller
Certificates in compliance with Paragraph 10 below not less than 1 business day
prior to the Closing Date and not showing any deviation from the corresponding
lease or Rent Roll or any dispute or quarrel with the Landlord.
(f) Credit Management Solutions, Inc. shall have executed and
delivered a lease amendment in the form attached hereto as Exhibit S along with
an appropriate Tenant Certificate reflecting such amendment; and the Lease with
Precept Sports shall have been terminated.
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9. CLOSING DOCUMENTS.
9.1 On the Closing Date, Seller and Purchaser shall execute and deliver
to one another a joint closing statement. In addition, Purchaser shall deliver
to the closing escrow the balance of the Purchase Price, an assumption of the
documents set forth in Paragraph 9.2.3 and 9.2.4, counterparts of any transfer
tax declarations, a broker's release and waiver executed by Sonnenblick-Goldman
with respect to all commissions and fees payable, and such other documents as
may be reasonably required by the Title Insurer and not inconsistent with the
terms of this Agreement in order to consummate the transaction as set forth in
this Agreement.
9.2 On the Closing Date, Seller shall deliver to the closing escrow the
following:
9.2.1 the Deed, subject to Permitted Exceptions and those Unpermitted
Exceptions approved by Purchaser in writing in accordance with Paragraph 5.1
hereof;
9.2.2 a special warranty bill of sale conveying the Personal Property
(in the form of Exhibit H attached hereto);
9.2.3 an assignment and assumption (with respect to periods from and
after the Closing) of intangible property (in the form attached hereto as
Exhibit I);
9.2.4 an assignment and assumption (with respect to periods from and
after the Closing) of Leases and security deposits (in the form attached hereto
as Exhibit J);
9.2.5 non-foreign affidavit (in the form of Exhibit K attached
hereto);
9.2.6 originals, and/or certified copies of all Leases (which shall
be delivered at the on-site management office);
9.2.7 all documents and instruments reasonably required by the Title
Insurer to issue the Title Policy;
9.2.8 possession of the Property to Purchaser, subject to the Leases
and the Permitted Exceptions;
9.2.9 evidence of the termination of the management agreement with
Insignia Commercial Group, Inc. ("Management Agreement"), along with a lien
waiver executed by the property manager, if any;
9.2.10 notice to the tenants of the Property of the transfer of title
and assumption by Purchaser of the landlord's obligation under the Leases and
the obligation to refund the refundable security deposits (in the form of
Exhibit L);
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9.2.11 an updated rent roll certified by Seller to be true and
correct, subject to the provisions of Paragraph 17.1 and Paragraph 18 hereof;
9.2.12 a Broker's Lien Waiver signed by Insignia Mortgage and
Investments Company ("Insignia");
9.2.13 an Owner's Title Affidavit and/or ALTA extended coverage
statement in form reasonably acceptable to Seller and Title Insurer or such
other documents as Title Insurer may require to issue the Title Policy,
including, without limitation, a "gap" coverage undertaking;
9.2.14 such formative and authorization documents of Seller as may be
reasonably required by Title Insurer; and
9.2.15 copies of all books and records as may be necessary to
calculate tenant escalations and reconciliations and keys to the improvements
(tagged or otherwise sorted for identification) (which shall be delivered at
the on-site management office).
10. ESTOPPEL CERTIFICATES.
10.1 Seller agrees to use reasonable efforts to obtain tenant estoppel
certificates in the form of Exhibit M for tenants listed on the rent roll
attached hereto as Exhibit C. ("Tenant Certificates"). Purchaser's obligation
to close the transaction contemplated herein is contingent upon the delivery to
Purchaser of a Tenant Certificate from each tenant under a Major Lease and
either a Tenant Certificate or Seller Certificate in the form attached hereto
as Exhibit N from all other tenants. To the extent non-Major Tenants do not
provide Tenant Certificates, Seller shall execute and deliver Seller
Certificates to Purchaser at Closing. As used herein, "Major Lease" means each
of the Leases between Seller and Credit Management Solutions, Geosyntec
Consultants, Icelandair and Gallup, Inc.
10.2 Notwithstanding anything contained herein to the contrary, the
representations and warranties contained in any Seller Certificate executed by
Seller shall be subject to the provisions of Paragraph 18 hereof and the
limitations on the survival of such representations and warranties as set forth
in Paragraph 17.5 hereof.
10.3 Upon receipt after Closing by Purchaser of a Tenant Certificate
containing the information herein required from a tenant under a Lease for whom
Seller has executed and delivered a Seller Certificate at Closing, the related
Seller Certificate executed and delivered by Seller at Closing shall become
null and void to the extent the information is the same as the information in
the Tenant Certificate, and the Tenant Certificate received from the tenant
shall be substituted therefor to such extent.
11. SERVICE CONTRACTS. On the Closing Date, Seller shall assign the Service
Contracts to Purchaser, and Purchaser shall assume in writing responsibility of
the obligations arising from and after the Closing Date under the Service
Contracts. Seller shall terminate the existing Management Agreement as of the
Closing Date at Seller's sole expense. Seller shall use reasonable efforts to
<PAGE>
obtain any required consent with respect to the assignment of the Service
Contracts; provided, however, that Seller's inability to obtain such approval
shall not be a default hereunder or a condition precedent to Purchaser's
obligations to close hereunder. Purchaser shall not be required to assume any
Service Contract for which Seller is unable to obtain the required consent.
12. LEASING OF PROPERTY. Seller shall not enter into any lease for any
portion of the Property or any modification, extension or amendment to any
Lease without first obtaining the prior consent of Purchaser, which may be
withheld in Purchaser's sole discretion. If Purchaser has not responded within
five (5) business days of receipt of a request by Seller, Purchaser's consent
shall be deemed denied. If Purchaser closes the transaction contemplated by
this Agreement, Purchaser shall be responsible to pay for all leasing
commission and tenant improvement costs incurred by Seller with respect to any
such lease approved by Purchaser to the extent such costs were disclosed to
Purchaser in connection with the request for consent. Notwithstanding anything
herein to the contrary, Purchaser agrees that Purchaser's obligation to pay (or
credit Seller at Closing) for leasing costs and expenses as described in the
immediately preceding sentence shall also apply to the Leases listed on Exhibit
R hereof.
13. DEFAULT BY PURCHASER. ALL EARNEST MONEY DEPOSITED INTO THE ESCROW IS TO
SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND UNDERTAKINGS
UNDER THIS AGREEMENT. IN THE EVENT OF A DEFAULT OF PURCHASER OF ITS OBLIGATION
TO CLOSE THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT, SELLER SHALL RETAIN
ALL OF THE EARNEST MONEY AND THE INTEREST THEREON AS SELLER'S SOLE 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 FOR A BREACH OF PURCHASER'S OBLIGATION
TO CLOSE. PURCHASER'S LIABILITY UNDER ANY REPRESENTATION, WARRANTY, COVENANT,
AGREEMENT, PRORATION, REPRORATION OBLIGATION OR INDEMNITY MADE IN THIS
AGREEMENT OR IN ANY CLOSING DOCUMENTS SHALL NOT EXCEED $500,000 IN THE
AGGREGATE, PLUS SELLER'S REASONABLE ATTORNEYS' FEES AND COURT COSTS INCURRED IN
ENFORCING ANY SUCH OBLIGATIONS ("PURCHASER'S MAXIMUM LIABILITY"); PROVIDED
HOWEVER, THAT THE FOREGOING LIMITATION SHALL NOT APPLY TO (A) REASONABLE
ATTORNEYS' FEES AND COURT COSTS INCURRED BY SELLER IN ENFORCING ANY OBLIGATIONS
OF PURCHASER UNDER THIS AGREEMENT, OR (B) PURCHASER'S INDEMNITY OBLIGATIONS
UNDER PARAGRAPH 16 OF THIS AGREEMENT.
14. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF ALL EARNEST MONEY
TOGETHER WITH ANY INTEREST ACCRUED THEREON, EXCEPT THAT PURCHASER SHALL ALSO
HAVE THE RIGHT TO REIMBURSEMENT FROM SELLER FOR ITS ACTUAL, DOCUMENTED THIRD
PARTY EXPENSES (NOT TO EXCEED $50,000 IN ANY EVENT PLUS REASONABLE ATTORNEYS'
FEES AND COURT COSTS INCURRED BY PURCHASER IN ENFORCING THE FOREGOING
REIMBURSEMENT OBLIGATION) INCURRED IN THE NEGOTIATION OF THIS AGREEMENT AND THE
PERFORMANCE OF ITS DUE DILIGENCE HEREUNDER. UPON THE RETURN OF THE EARNEST
MONEY AND THE REIMBURSEMENT BY SELLER FOR OUT OF POCKET COSTS AS PROVIDED
ABOVE, THIS AGREEMENT SHALL TERMINATE WITHOUT FURTHER ACTION OF THE PARTIES AND
<PAGE>
THE PARTIES SHALL HAVE NO FURTHER LIABILITY TO EACH OTHER AT LAW OR IN EQUITY,
EXCEPT FOR THOSE COVENANTS AND OBLIGATIONS WHICH EXPRESSLY SURVIVE TERMINATION
OF THIS AGREEMENT. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY,
IF SELLER'S DEFAULT RESULTS FROM (i) ITS (AND NOT AN UNRELATED THIRD PARTY'S)
AFFIRMATIVE ACTION OR OMISSION WITH THE INTENTION OF PREVENTING THE SALE WHICH
RESULTS IN THE RECORDING OF AN ENCUMBRANCE AGAINST THE PROPERTY AND WHICH GIVES
RISE TO PURCHASER'S RIGHT TO TERMINATE THIS AGREEMENT PURSUANT TO PARAGRAPH 5
HEREOF; (ii) ITS FAILURE TO SATISFY ITS OBLIGATIONS UNDER PARAGRAPH 5.1 ABOVE,
OR (iii) ITS REFUSAL TO DELIVER THE DEED OR THE CONVEYANCE DOCUMENTS DESCRIBED
IN PARAGRAPH 9.2.2-9.2.7, 9.2.10-9.2.11 AND 9.2.13-9.2.15. THEN PURCHASER WILL
BE ENTITLED TO SUE FOR SPECIFIC PERFORMANCE. IN NO EVENT SHALL (i) SELLER BE
LIABLE FOR ANY ACTUAL, PUNITIVE, SPECULATIVE OR CONSEQUENTIAL DAMAGES RESULTING
FROM ANY DEFAULT BY SELLER, OR (ii) SELLER'S LIABILITY UNDER ANY
REPRESENTATION, WARRANTY, COVENANT, AGREEMENT, PRORATION, REPRORATION
OBLIGATION OR INDEMNITY MADE IN THIS AGREEMENT OR UNDER ANY SELLER CERTIFICATE
OR ANY CLOSING DOCUMENTS EXCEED $500,000 IN THE AGGREGATE ("SELLER'S MAXIMUM
LIABILITY"); PROVIDED, HOWEVER, THAT THE FOREGOING LIMITATION SHALL NOT APPLY
TO (A) REASONABLE ATTORNEYS' FEES AND COURTS COSTS INCURRED BY PURCHASER IN
ENFORCING ANY OBLIGATIONS OF SELLER UNDER THIS AGREEMENT OR (B) SELLER'S
INDEMNITY OBLIGATIONS UNDER PARAGRAPH 16 OF THIS AGREEMENT.
15. PRORATIONS.
15.1 Except as otherwise indicated, rentals, revenues, and other income,
if any, from the Property, real property taxes, operating expenses, assessments
owing under any covenants, conditions or restrictions affecting the Property,
if any, and all other items of expense and income shall be adjusted ratably as
of 12:01 a.m. on the Closing Date ("Proration Date"). Real estate taxes and
operating expenses which are reimbursable by tenants shall be prorated net of
all tenants' liabilities for such items except to the extent tenants are
delinquent with respect to such matters, in which case Purchaser shall receive
a credit for such amounts. Except as provided in the preceding sentence, all
real property taxes on the Property shall be prorated on an accrual basis so
that Seller pays all amounts that relate to the period prior to the Closing
Date, regardless of when such sums are billed, due or payable, and Purchaser
pays all amounts relating to the period from and after the Closing Date. As
used herein, "rentals" includes, but is not limited, fixed monthly rentals,
additional rentals, percentage rentals, escalation rentals, operating cost
pass-throughs and other sums and charges payable by tenants under the Leases.
Purchaser shall be credited with an amount equal to the amount of any security
deposits and other deposits, and any interest accrued thereon for the benefit
of a tenant, owed to any tenant pursuant to the terms of any Lease. Seller
shall be entitled to a credit for all transferable utility deposits transferred
hereunder, if any, and all other utility deposits, if any, may be withdrawn by
and refunded to Seller and Purchaser shall make its own replacement deposits
for utilities as may be required by the respective utilities involved.
Assessments, excluding regular ad valorem real estate taxes, payable in
installments which are due prior to the Closing Date shall be paid by Seller.
Assessments, if any, excluding regular ad valorem real estate taxes, payable in
installments which are due subsequent to the Closing Date shall be paid by
Purchaser. If the amount of any of the items to be prorated is not then
<PAGE>
ascertainable, the adjustments thereof shall be on the basis of the most recent
ascertainable data. If any ongoing real estate tax contest has not been
finalized as of the Closing Date, Purchaser and Seller agree that the tax bill
existing prior to the contest, shall be the most recent data for the tax year
being contested and Purchaser agrees to re-prorate such amount as it relates to
the real estate tax proration for the current tax year to the extent such tax
contest is successful. All other prorations will be final except as to
delinquent rent referred to in Paragraph 15.2 below and as provided in
Paragraph 15.3.
15.2 From and after the Closing Date, Seller shall not have the right to
institute or continue any legal, equitable or other action, suit or arbitration
or pursue any claims against any tenant for any matter relating to the Property
or such tenant's Lease. Notwithstanding the foregoing, Seller shall have the
right to institute and pursue an action against Precept Sports for any amount
owing by Precept Sports to Seller. Seller shall not be entitled to any rentals
received from Tenants after the Closing Date unless such Tenants are current in
their rental obligations for periods occurring from and after the Closing Date.
Delinquent rentals collected by Purchaser, net of the costs of collection
(including reasonable attorneys' fees), shall be applied first to amounts
currently due and then to amounts most recently overdue. Purchaser shall use
its reasonable, good faith efforts, at no additional cost or expense to
Purchaser, to collect all delinquent rentals owed to Seller. Within 180 days
after the Closing Date, Purchaser shall deliver to Seller a reconciliation
statement of such amounts through the first 150 days after the Closing Date.
Upon the delivery of such reconciliation, Purchaser shall deliver to Seller any
such amounts received by Purchaser and owing to Seller net of reasonable
collection costs. Purchaser shall provide Seller with any information
reasonably necessary to verify the accuracy of the reconciliation statement and
upon the verification of additional funds owing to Seller, Purchaser shall pay
to Seller such amounts. This Paragraph 15.2 of this Agreement shall survive
the Closing and the delivery and recording of the Deed.
15.3 All refunds attributable to the period of time prior to the Closing
Date in connection with any ongoing real estate tax protests for the Property
initiated by Seller prior to the Closing shall remain the property of Seller
and are not being assigned by Seller to Purchaser pursuant to this Agreement.
In the event any such refunds are paid to Purchaser, Purchaser agrees to
promptly remit all such sums to Seller. Purchaser agrees, at no cost or
expense to Purchaser, to execute any documents reasonably requested by Seller
in connection with such tax protests.
15.4 At Closing, Purchaser and Seller shall enter into an escrow
agreement with the Title Company pursuant to which $10,346 of Seller's proceeds
<PAGE>
of sale ("First American Holdback") shall be deposited. The escrow agreement
shall provide that the First American Holdback shall be delivered (i) to Seller
if First American Bank exercises the renewal option contained in its lease on
or before July 31, 1997 or (ii) to Purchaser if First American Bank fails to
exercise such renewal option on or before July 31, 1997.
15.5 At Closing, Seller shall credit Purchaser with $11,507.75,
representing one-month's rent on Suite 501 for January 1997.
15.6 Purchaser shall pay at Closing Purchaser's share of any leasing
commission costs described on Exhibit R which are due and payable as of the
Closing Date. Purchaser hereby assumes Seller's obligations under the Leasing
Agreement dated September 1, 1992 between Seller and CB Commercial Real Estate
Group, Inc. with respect to Purchaser's share of the leasing commissions
described on Exhibit R which are not paid in full at Closing.
16. BROKER. The parties hereto represent and warrant that no broker
commission or finder fee is due and payable in connection with this
transaction, by reason of their respective actions, other than to Insignia (to
be paid by Seller) and to Sonnenblick-Goldman (to be paid by Purchaser and by
Insignia pursuant to their respective separate written agreements). Purchaser
and Seller shall indemnify, defend and hold the other party hereto harmless
from any claim whatsoever (including without limitation, reasonable attorneys'
fees, court costs and costs of appeal) from anyone claiming by or through the
indemnifying party any fee, commission or compensation on account of this
Agreement, its negotiation or the sale hereby contemplated other than to
Insignia. Seller shall indemnify, defend and hold Purchaser harmless from any
claim (including, without limitation, reasonable attorneys' fees, court costs
and costs of appeal) by Insignia for any fee, commission or compensation
arising under any agreement or negotiations between Insignia and Seller.
Purchaser shall indemnify, defend and hold Seller harmless from any claim
(including, without limitation, reasonable attorneys' fees, court costs and
costs of appeal) by Sonnenblick-Goldman for any fee, commission or compensation
arising under any agreement or negotiations between Purchaser and
Sonnenblick-Goldman. The indemnifying party shall undertake its obligations
set forth in this Paragraph 16 using attorneys selected by the indemnifying
party and reasonably acceptable to the indemnified party. The provisions of
this Paragraph 16 will survive the Closing and delivery of the Deed.
17. REPRESENTATIONS, WARRANTIES AND COVENANTS.
17.1 Any reference herein to Seller's knowledge or notice of any matter or
thing shall only mean such knowledge or notice that has actually been received
by Thomas Molina or Jerry Ogle ("Seller's Representatives"), and any
representation or warranty of Seller is based upon those matters of which
Seller's Representatives have actual knowledge. Thomas Molina is the asset
manager of the Property for Balcor Management Services, Inc. and as such has
primary responsibility for overseeing the Property. Jerry Ogle is the general
counsel of The Balcor Company. Prior to the execution of this Agreement,
Seller's Representatives shall provide a copy of Section 17 of this Agreement
and any exhibits referred to therein to Doris Pearl, Seller's on-site property
manager, and Seller's Representative shall review with Ms. Pearl the accuracy
<PAGE>
of each of the representatives and warranties made herein by Seller. Any
knowledge or notice given, had or received by any of Seller's agents, servants
or employees shall not be imputed to Seller, the general partner or limited
partners of Seller, the subpartners of the general partner or limited partners
of Seller or Seller's Representatives.
17.2 Subject to the limitations set forth in Paragraph 17.1, Seller hereby
makes the following representations and warranties, which representations and
warranties are made to Seller's knowledge (with the exception of the
representations and warranties in Paragraph 17.2(ii), (iv), (xi), (xiv) and
(xvi)) and which shall survive Closing for a period of 180 days:
(i) except as listed on Exhibit O, Seller has not been served with,
and has no knowledge of any pending or threatened litigation, claim, cause of
action or administrative proceeding concerning the Property;
(ii) Seller has the legal power, right and authority to enter into
this Agreement and has taken all requisite action (corporate, partnership or
otherwise) in connection with the entering into of this Agreement. By the
Closing Date, Seller shall have undertaken all requisite action (corporate,
partnership or otherwise) to consummate the transaction contemplated hereby.
No consent of any partner, shareholder, creditor, investor or, to Seller's
knowledge, any other party is required which will not be obtained by the
Closing Date. The individuals executing this Agreement and the instruments
referenced herein on behalf of Seller, have the legal power, right, and actual
authority to bind Seller to the terms and conditions hereof and thereof. This
Agreement and all documents required hereby to be executed by Seller are and
shall be valid, legally binding obligations of and enforceable against Seller
in accordance with their terms, subject only to applicable bankruptcy,
insolvency, reorganization, moratorium laws or similar laws or equitable
principles affecting or limiting the rights of contracting parties generally;
(iii) the rent roll attached hereto as Exhibit C and which will be
updated as of the Closing Date is accurate in all material respects as of the
date set forth therein;
(iv) Seller has not given or suffered any assignment, pledge or
encumbrance with respect to any of the Leases or its interests thereunder;
(v) except for the Service Contracts delivered by Seller to
Purchaser and shown on Exhibit D hereto, there are no Service Contracts which
affect or will affect the Property or which are or will be obligations of the
Purchaser or the Property. The Management Agreement will not affect the
Property after the Closing. Seller has no knowledge of any current default or
breach under the terms and provisions of any of the Service Contracts;
(vi) except as listed on Exhibit O, Seller has received no written
notice or claim from any governmental authority having jurisdiction over the
Property relating to an uncured breach or violation of any Environmental Laws
or any other laws in connection with the Property and Seller has received no
written notice of violations of any governmental regulations relating to the
Property;
<PAGE>
(vii) Seller has no knowledge of and has received no notice of any
uncured landlord default from any tenant in connection with any Lease;
(viii) Seller has received no notice from any insurance carrier
regarding any defects or inadequacies in the Property;
(ix) no attachments, execution proceedings, assignments for the
benefit of creditors, insolvency, bankruptcy, reorganization or other
proceedings are pending or threatened against Seller or to the best of Seller's
knowledge, any general partners of Seller;
(x) other than the amounts disclosed by the 1995-1996 tax bills
delivered to Purchaser by Seller and possible supplemental or escape
assessments which may be levied by the county assessor after the date hereof,
Seller has no knowledge of any other current real property taxes which have
been or will be assessed against the Property. Seller has received no written
notice of any special assessments or charges which have been levied against the
Property or which will result from work, activities or improvements done to the
Property;
(xi) Seller has not entered into any other contracts for the sale of
the Property;
(xii) there are no rights of first refusal or options to purchase the
Property;
(xiii) Seller has received no written notice of any proceeding or
inquiry by any governmental authority with respect to the presence of any
toxic, hazardous or radioactive substance, material or waste, including,
without limitation, hazardous materials or substances, in, on, under or about
the Property or the migration thereof from or to other property;
(xiv) Seller has no employees which will become employees of
Purchaser upon Purchaser's acquisition of the Project;
(xv) Except to the extent Purchaser is obligated to pay the same as
shown on Exhibit R, Seller has paid or will by Closing pay all leasing or
brokerage fees or commissions relating to existing Leases on account of events
occurring prior to the date hereof;
(xvi) Attached hereto as Exhibit Q is a schedule listing all
leasing and brokerage agreements relating to the Property entered into by
Seller (copies of which have been be delivered to Purchaser); and
(xvii) the unaudited financial information regarding the Property
provided by Seller to Purchaser was prepared in the ordinary course of business
and is the same information used by Seller for tax purposes and for reporting
the results of the operation of the Property to investors.
17.3 Purchaser hereby represents and warrants to Seller that Purchaser has
the legal power, right and authority to enter into this Agreement and has
taken all requisite action (corporate, partnership or otherwise) in connection
<PAGE>
with the entering into this Agreement. By the Closing Date, Purchaser shall
have undertaken all requisite action (corporate, partnership or otherwise) to
consummate the transaction contemplated hereby. No consent of any partner,
shareholder, creditor, investor or, to Purchaser's knowledge, any other party
is required which will not be obtained by the Closing Date. The individuals
executing this Agreement and the instruments referenced herein on behalf of
Purchaser, have the legal power, right, and actual authority to bind Purchaser
to the terms and conditions hereof and thereof. This Agreement and all
documents required hereby to be executed by Purchaser are and shall be valid,
legally binding obligations of and enforceable against Purchaser in accordance
with their terms, subject only to applicable bankruptcy, insolvency,
reorganization, moratorium laws or similar laws or equitable principles
affecting or limiting the rights of contracting parties generally.
17.4 Seller covenants to operate, maintain and manage the Property in the
same manner that it has managed, maintained and operated the Property during
the period of Seller's ownership, subject to reasonable wear and tear and
casualty.
17.5 (a) The representations, warranties and covenants of Seller set
forth herein and in any Seller Certificate or Closing Document shall survive
Closing for a period of 180 days after the Closing Date ("Survival Period").
All rights of Purchaser hereunder with respect to any such surviving
representation, warranty or covenant shall be deemed waived if Purchaser does
not, by notice to Seller, advise Seller of any alleged breach of
representation, warranty or covenant prior to the expiration of the Survival
Period. Notwithstanding anything herein to the contrary, Seller's liability
under any representation, warranty or covenant made hereunder or in any Seller
Certificate or any Closing Document shall not (with the exception of (i)
Seller's liability under Section 16 of this Agreement and (ii) reasonable
attorneys' fees and court costs incurred by Purchaser in enforcing any
obligations of Seller under this Agreement) exceed Seller's Maximum Liability.
(b) The representations, warranties and covenants of Purchaser set
forth herein and in any Closing Document shall survive Closing for the Survival
Period. All rights of Seller hereunder with respect to any such surviving
representation, warranty or covenant shall be deemed waived if Seller does not,
by notice to Purchaser, advise Purchaser of any alleged breach of
representation, warranty or covenant prior to the expiration of the Survival
Period. Notwithstanding anything herein to the contrary, Purchaser's liability
under any representation, warranty or covenant made hereunder or in any Closing
Document shall not (with the exception of (i) Purchaser's liability under
Section 16 of this Agreement and (ii) reasonable attorneys' fees and court
costs incurred by Seller in enforcing any obligations of Purchaser under this
Agreement) exceed Purchaser's Maximum Liability.
18. LIMITATION OF LIABILITY. None of the individuals who comprise Seller's
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
<PAGE>
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.
19. NOTICES. Any notice or demand which either party hereto is required or
may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by overnight courier
such as Federal Express, by facsimile transmission or made by United States
registered or certified mail addressed as follows:
TO SELLER: c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attention: Ilona Adams
with copies to: The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attention: James Mendelson
(847) 317-4462 (FAX)
TO PURCHASER: PM Realty Advisors, Inc.
800 Newport Center Drive
Suite 300
Newport Beach, California 92880
Attention: Scott Wandro and
Kenneth S. Footlik, Esq.
with copies to: Allen Matkins
Leck, Gamble & Mallory LLP
515 S. Figueroa Street, 7th Floor
Los Angeles, California 90071-3398
Attention: Anthony S. Bouza
(213) 620-8816 (FAX)
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be deemed
to be delivered or made on the next business day if sent by overnight courier,
or the same day as given if sent via facsimile transmission and received by
5:00 p.m. Chicago time, or on the fourth (4th) business day after the same is
deposited in the United States Mail as registered or certified mail, 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 transmission as aforesaid shall be deemed to
be given, delivered or made upon receipt of the same by the party to whom the
same is to be given, delivered or made. Copies of all notices shall be served
upon the Escrow Agent. All time periods for responses by either party set forth
in this Agreement shall commence upon the receipt of notice as set forth
hereinabove.
<PAGE>
20. EXECUTION OF AGREEMENT. Purchaser will execute four (4) copies of this
Agreement and forward them to Seller for execution and Seller will return two
(2) copies of the executed Agreement to Purchaser. Upon execution of this
Agreement by Purchaser and Seller, Purchaser shall promptly deposit the Earnest
Money with the escrow agent in accordance with a strict joint order escrow
agreement mutually acceptable to the parties hereto.
21. MISCELLANEOUS
(a) Time is of the essence of each provision of this Agreement.
(b) This Agreement and all provisions hereof shall extend to and be
obligatory upon and inure to the benefit of the respective heirs, legatees,
legal representatives, successors and assigns of the parties hereto.
(c) The section and paragraph headings of this Agreement are for
convenience only and in no way define, limit or enlarge the scope or meaning of
the language hereof. The terms "hereby," "herein," "hereof," "hereto,"
"hereunder" and any similar terms used in this Agreement refer to this
Agreement. The term "including" shall not be construed in a limiting nature,
but shall be construed to mean "including, without limitation." Words
importing persons shall include firms, associations, partnerships, trusts,
corporations and other legal entities, including public bodies, as well as
natural persons. Words importing the singular shall include the plural and
vice versa. Words of the masculine gender shall be deemed to include
correlative words of the feminine and neuter genders.
(d) This Agreement contains the entire agreement between the parties
relating to the transactions contemplated hereby, and all prior or
contemporaneous agreements, understandings, representations and statements,
oral or written, are merged herein. No representations, warranties,
undertakings or promises (whether oral or written, express or implied), can be
made or have been made by Seller or its agents, representatives or brokers to
Purchaser or any other person unless expressly stated herein. No modification
or amendment of this Agreement or any waiver of any provision hereof shall be
effective unless the same is in writing signed by the party against whom
enforcement of such modification, amendment or waiver is sought.
(e) This Agreement shall be governed by and construed in accordance
with the laws of the State of Maryland. If any of the provisions of this
Agreement or the application thereof to any persons or circumstances shall, to
any extent, be deemed invalid or unenforceable, the remainder of this Agreement
and the application of such provisions to persons or circumstances other than
those as to whom or which it is held invalid or unenforceable shall not be
affected thereby, and every provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
(f) This Agreement and any document or instrument executed pursuant
hereto may be executed in any number of counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
<PAGE>
(g) The submission by Seller of this Agreement to Purchaser for
examination does not constitute an offer by Seller to sell, or a reservation of
or option to purchase the Property. This Agreement shall not become a contract
until executed and delivered by Purchaser and Seller in the manner set forth
herein.
(h) Purchaser shall not record this Agreement or any memorandum
hereof, and any such recording shall be a default hereunder.
(i) Prior to Closing, Purchaser and Seller shall jointly prepare and
issue all releases of information relating to the sale of the Property.
(j) If either party institutes a legal action against the other
relating to this Agreement or any default hereunder, the unsuccessful party to
such action will reimburse the successful party for the reasonable expenses of
prosecuting or defending such action, including without limitation, attorneys'
fees and disbursements and court costs.
(k) This Agreement shall not be construed more strictly against one
party than against the other merely by virtue of the fact that the Agreement
may have been prepared primarily by counsel for one of the parties, it being
recognized that both Purchaser and Seller have contributed substantially and
materially to the preparation of this Agreement.
(l) Purchaser shall not have the right to assign its interest in
this Agreement without the prior written consent of 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 13 hereof. Notwithstanding the foregoing, Purchaser
may make one (1) assignment of its interest in this Agreement without the
consent of Seller to any entity affiliated with or controlled by Purchaser
("Assignee"), provided that Purchaser remains liable for and the Assignee
assumes the obligations of Purchaser hereunder. If the Assignee petitions or
applies for relief under any bankruptcy laws or is adjudicated as a bankrupt or
insolvent, or if Assignee files any petition, application for relief or
answer-seeking or acquiescing in any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief for itself under any
present or future federal, state or other statute, law, code or regulation
relating to bankruptcy, insolvency, or other relief for debtors (collectively,
a "Bankruptcy Filing") on or before the Closing Date, said Bankruptcy Filing
shall be a default under this Agreement and Purchaser shall indemnify Seller
for all costs, attorney's fees and expenses of Seller resulting from Seller's
efforts to obtain the Earnest Money as liquidated damages and to clear title to
the Property with respect to any encumbrance resulting from the Bankruptcy
Filing.
(m) All persons dealing with Purchaser shall look to the assets of
Purchaser for the enforcement of any claim against Purchaser because neither
the trustees, shareholders, officers, investment managers nor advisors of
Purchaser assume any personal liability for obligations entered into by or on
behalf of Purchaser. In no event shall Purchaser have any liability for
speculative, special, consequential, punitive or any other damage other than
actual damages under any provision of this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.
PURCHASER:
5950 SWR CORPORATION, a Delaware corporation
By: /s/ James G. McWalters
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Name: James G. McWalters
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Its: Vice President
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By: /s/ Christopher L. Guy
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Name: Christopher L. Guy
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Its: Assistant Secretary
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SELLER:
SYMPHONY WOODS LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Symphony Woods Partners, Inc.,
its general partner
By: /s/ James E. Mendelson
-------------------------------------
Name: James E. Mendelson
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Its: Sr. Vice President
-------------------------------------
<PAGE>
Insignia Mortgage and Investment Company ("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 Seller.
Broker agrees to deliver a receipt to 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.
INSIGNIA MORTGAGE AND
INVESTMENT COMPANY
By: /s/ Phillip A. Schechter
----------------------------------
Vice President
<PAGE>
Sonnenblick-Goldman ("S-G") executes this Agreement in its capacity as a real
estate broker and acknowledges that the fee or commission ("Fee") due to it
from Purchaser and Insignia as a result of the transaction described in this
Agreement is the amount as set forth in the written agreement between S-G and
Purchaser and the separate written agreement between S-G and Insignia. S-G
also acknowledges that payment of the aforesaid Fee is conditioned upon the
Closing and the receipt of the Purchase Price by Seller. Broker agrees to
deliver a receipt to Purchaser and 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.
SONNENBLICK-GOLDMAN
By:
--------------------------------------
<PAGE>
LIST OF EXHIBITS
A. Legal Description
B. Personal Property
C. Leases/Rent Roll
D. Service and Maintenance Contracts
E. Joint Closing Instructions
F. Permitted Exceptions
G. Special Warranty Deed
H. Special Warranty Bill of Sale
I. Assignment and Assumption of Intangible Property
J. Assignment and Assumption of Leases and Security Deposits
K. FIRPTA
L. Tenant Notice Letter
M. Tenant Certificate
N. Seller Certificate
O. Disclosures
P. Due Diligence Materials
Q. Leasing Commission Agreements
R. Leases with Costs to be Paid by Purchaser
S. Form of CMSI Amendment
<PAGE>
