SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) May 31, 1996
BALCOR REALTY INVESTORS 85 - SERIES II
A REAL ESTATE LIMITED PARTNERSHIP
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Exact Name of Registrant
Illinois 0-14351
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State or other jurisdiction Commission file number
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 36-3327917
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Address of principal I.R.S. Employer
executive offices Identification
Number
60015
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Zip Code
Registrant's telephone number, including area code:
(847) 267-1600
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
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a) Forest Ridge Apartments, Phase II
As previously reported, on April 23, 1996, the Partnership contracted to sell
Forest Ridge Apartments, Phase II, Dallas, Texas to an unaffiliated party, ERP
Operating Limited Partnership, for a sale price of $11,100,000. The sale
closed on June 7, 1996. From the proceeds of the sale, the Partnership paid the
outstanding balance of the first mortgage loan of $7,870,116, legal fees of
approximately $15,000 and a fee of $92,000 to an affiliate of the third party
providing property management services for the property for services rendered
in connection with the sale. Pursuant to the agreement of sale, the
purchaser paid all closing costs relating to the sale. The Partnership
received approximately $3,104,000 representing the remaining proceeds. Of
such proceeds, $500,000 is being retained by the Partnership and will not be
available until 120 days after closing. Neither the General Partner nor its
affiliates received a brokerage commission in connection with the sale of the
property. The General Partner will be reimbursed by the Partnership for its
actual expenses incurred in connection with the sale.
b) Marbrisa Apartments
In 1985, Marbrisa Apartments, Hillsborough County, Florida, was acquired by a
joint venture (the "Joint Venture") in which the Partnership was general
partner and an affiliate of the seller of the property (the "JV Partner") was
the limited partner. The Partnership and the JV Partner held interests in the
Joint Venture of 85% and 15%, respectively. The Partnership contributed
approximately $3,789,000 towards the purchase of the property. In 1986, the
seller defaulted on certain of its obligations under its management agreement
with the Partnership. Pursuant to the terms of the settlement agreement
between the Partnership and the seller, the seller assigned its interest in the
Joint Venture to the Partnership.
The property was acquired subject to first mortgage financing of approximately
$6,695,000. The mortgage loan was refinanced in 1988 with a new loan in the
amount of $5,700,000. The Partnership borrowed approximately $1,200,000 from
the General Partner in connection with the refinancing. In 1993, the mortgage
loan was again refinanced with a new mortgage loan in the amount of $5,500,000.
On May 31, 1996, the Joint Venture contracted to sell the property for a sale
price of $8,100,000 to an unaffiliated party, Mid-America Apartments, L.P., a
Tennessee limited partnership. The purchaser has deposited $81,000 into an
escrow account as earnest money and will pay the remaining $8,019,000 at
closing, scheduled for July 31, 1996. The Purchaser expects to assume the
existing first mortgage loan which is expected to have an outstanding principal
balance of approximately $5,375,000 at closing. If the purchaser is unable to
obtain the consent of the holder of the loan to the assumption on or before
July 10, 1996, the agreement of sale will be terminated.
Pursuant to the closing of the sale, the purchaser will pay all closing costs
relating to the sale, except that the Joint Venture will pay one-half of the
closing escrow fee and certain specified title costs. From the proceeds of the
sale, the Joint Venture will pay $182,250 to a third party as a brokerage
commission. An affiliate of the third party providing property management
<PAGE>
services for the property will receive a fee of $81,000 for services in
connection with the sale of the property. In addition, an amount not to
exceed $81,000 will be retained by the Partnership and will not be available
until 60 days after the closing. 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 Joint Venture for
its actual expenses incurred in connection with the sale, including legal fees.
The Partnership has simultaneously contracted to sell Steeplechase Apartments,
described elsewhere in this report, and affiliates of the General Partner have
simultaneously contracted to sell 7 other properties, to 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 INFORMATION
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a) Rosehill Pointe Apartments
As previously reported, on April 23, 1996, the joint venture consisting of the
Partnership and an affiliate which owned the Rosehill Pointe Apartments,
Lenexa, Kansas, contracted to sell the property to an unaffiliated party, ERP
Operating Limited Partnership, for a sale price of $20,700,000. The sale
closed on June 7, 1996. From the proceeds of the sale, the Joint Venture paid
the outstanding balance of the first and second mortgage loans totaling
$15,537,677, legal fees of approximately $15,000 and a fee of $155,250 to an
affiliate of the third party providing property management services for the
property for services rendered in connection with the sale. The purchaser
paid all closing costs relating to the sale. The Joint Venture received
approximately $4,992,000 representing the remaining proceeds. Of such
proceeds, $500,000 is being retained by the Partnership and will not be
available until 120 days after closing. Neither the General Partner nor its
affiliates received a brokerage commission in connection with the sale of the
property. The General Partner will be reimbursed by the Joint Venture for its
actual expenses incurred in connection with the sale. The sales proceeds
will be distributed between the Partnership and the joint venture partner in
accordance with their joint venture interests of approximately 38.38% and
61.62%, respectively. The Partnership will receive approximately $1,916,000
of proceeds.
b) Steeplechase Apartments
In 1985, the Partnership acquired the Steeplechase Apartments,
Lexington-Fayette, Kentucky, utilizing $4,474,205 of Partnership proceeds. The
property was acquired subject to first mortgage financing of approximately
$7,975,000. In 1987, the mortgage loan was refinanced with a new mortgage loan
in the amount of $6,400,000. In connection with the refinancing, the
Partnership made a principal repayment of approximately $1,680,000, which was
funded by a loan from the General Partner. The mortgage loan was refinanced
again in 1993 with a new mortgage loan in the amount of $7,450,000. The
Partnership received excess proceeds of approximately $1,200,000.
<PAGE>
On May 31, 1996, the Partnership contracted to sell the property for a sale
price of $11,500,000 to an unaffiliated party, Mid-America Apartments, L.P., a
Tennessee limited partnership. The purchaser has deposited $115,000 into an
escrow account as earnest money and will pay the remaining $11,385,000 at
closing, scheduled for July 31, 1996. The purchaser will pay all closing costs
relating to the sale, except that the Partnership will pay one-half of the
closing escrow fee and specified title costs. From the proceeds of the sale,
the Partnership will pay $172,500 to an affiliate of the third party providing
property management services for the property as a brokerage commission. In
addition, an amount not to exceed $115,000 will be retained by the Partnership
and will not be available until 60 days after the closing. Neither the General
Partner nor any of its affiliates will receive a brokerage commission in
connection with the sale of the property. The General Partner will be
reimbursed by the Partnership for its actual expenses incurred in connection
with the sale, including legal fees.
The Partnership has simultaneously contracted to sell Marbrisa Apartments,
described elsewhere in this report, and affiliates of the General Partner have
simultaneously contracted to sell 7 other properties, to 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.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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(a) FINANCIAL STATEMENTS AND EXHIBITS:
None
(B) PRO FORMA FINANCIAL INFORMATION:
None
(C) EXHIBITS:
(2) (a)(i) Agreement of Sale relating to the sale of the Marbrisa
apartment complex, Hillsborough County, Florida.
(a)(ii) First Amendment to Agreement of Sale and Escrow
Agreement dated May 22, 1996 relating to the sale of
the Marbrisa apartment complex, Hillsborough County,
Florida.
(b)(i) Master Amendment and Agreement relating to the sales of
the Forest Ridge apartment complex, Phase II,
Arlington, Texas and Rosehill Pointe apartment
complex, Lenexa, Kansas.
(b)(ii) Master Amendment and Agreement #2 dated May 22, 1996
relating to the sales of the Forest Ridge apartment
complex, Phase II, Arlington, Texas and Rosehill Pointe
apartment complex, Lenexa, Kansas.
(99) (a)(i) Agreement of Sale and attachment thereto relating to the
sale of the Steeplechase apartment complex,
Lexington-Fayette, Kentucky.
(a)(ii) First Amendment to Agreement of Sale and Escrow
Agreement relating to the sale of the Steeplechase
apartment complex, Lexington-Fayette, Kentucky.
No information is required under Items 1, 3, 4, 6 and 8 and these items
have, therefore, been omitted.
<PAGE>
Signature
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
BALCOR REALTY INVESTORS 85 -SERIES II
A REAL ESTATE LIMITED PARTNERSHIP
By: Balcor Partners-XVII, an Illinois
general partnership, its general
partner
By: The Balcor Company,
a Delaware corporation,
a partner
By: /s/ Jerry M. Ogle
------------------------------------
Jerry M. Ogle, Vice President
and Secretary
Dated: June 14, 1996
<PAGE>
Marbrisa Apartments
Tampa, Florida
AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement") is entered into as of the 31st
day of May, 1996, by and between MID-AMERICA APARTMENTS, L.P., a Tennessee
limited partnership ("Purchaser"), and 4949 MARBRISA LIMITED PARTNERSHIP, an
Illinois limited partnership ("Seller").
WITNESSETH:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to
sell at the price of Eight Million One Hundred Thousand And No/100 Dollars
($8,100,000.00) (the "Purchase Price"), that certain property commonly known as
Marbrisa Apartments, located in the City of Tampa, State of Florida and legally
described and depicted on Exhibit A attached hereto (the "Property"). Included
in the Purchase Price is all of the personal property set forth in Exhibit B
(the "Personal Property").
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as
follows:
(a) Upon the execution of this Agreement, the sum of Eighty-One
Thousand And No/100 Dollars ($81,000.00) (the "Earnest Money") to be held in
escrow by and in accordance with the provisions of the Escrow Agreement
("Escrow Agreement") attached hereto as Exhibit C;
(b) The assumption by Purchaser of Seller's obligation under the
"Loan Documents" (as hereinafter defined), being an amount equal to the
outstanding principal balance of and all accrued and unpaid interest on the
"Note" (as hereinafter defined) as of the "Closing Date" (as hereinafter
defined); and
(c) 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 11:00 a.m Chicago time.
3. TITLE COMMITMENT AND SURVEY.
A. Purchaser shall obtain, as soon as is reasonably possible, at
Purchaser's sole cost and expense, a title commitment (the "Title Commitment")
for an owner's standard title insurance policy for the Property issued by
Lawyers Title Insurance Corporation (the "Title Insurer"). Seller shall
obtain, at Seller's sole cost and expense, an ALTA survey for the Property (the
"Survey") and shall deliver the same to Purchaser as soon as is reasonably
possible. For purposes of this Agreement, "Permitted Exceptions" shall mean:
(a) general real estate taxes and assessments, association assessments, special
district taxes and assessments and related charges not yet due and payable; (b)
matters caused by or through the actions of Purchaser or its agents,
contractors or representatives; (c) those title exceptions deemed Permitted
Exceptions pursuant to Paragraph 3.B below; and (d) matters relating to the
liens and security interests granted to secure the indebtedness evidenced by
the Note. All other exceptions to title shall be referred to as "Unpermitted
Exceptions."
<PAGE>
B. If the Title Commitment or the Survey discloses any exceptions
to title other than the Permitted Exceptions, Purchaser may give written notice
to Seller (the "Title Notice") of Purchaser's disapproval of any such
exceptions (a "Disapproved Title Exception") on or before the expiration of the
Inspection Period. Any title exceptions which are set forth in the Title
Commitment or on the Survey to which Purchaser does not object in accordance
with the immediately preceding sentence shall be deemed additional Permitted
Exceptions. With regard to a Disapproved Title Exception for which Purchaser
gives Seller a Title Notice, Seller may but shall not have the obligation to
notify Purchaser within five (5) business days of receipt of the Title Notice
(the "Response Notice") whether Seller shall cause the Title Insurer to remove
or to insure over such Disapproved Title Exception from the Title Commitment
(together with a commitment to reissue the appropriate endorsement for the
benefit of Purchaser's financings and sale at no cost to Purchaser). Any such
Disapproved Title Exception which Seller elects to cause the Title Insurer to
remove or to insure over shall be additional Permitted Exceptions. If Seller
does not so notify Purchaser of its election to cause the Title Insurer to
remove or to insure over all Disapproved Title Exceptions in accordance with
this Paragraph 3.B, then unless Purchaser waives in writing its objection to
such Disapproved Title Exception on or before the expiration of the Inspection
Period and proceeds towards Closing, then this Agreement shall be terminated;
provided, however, if the Response Notice was delivered to Purchaser less than
three (3) business days prior to the expiration of the Inspection Period,
Purchaser shall have three (3) business days from receipt of the Response
Notice to notify Seller or Purchaser waives its objection to such Disapproved
Title Exception. If this Agreement is terminated pursuant to the terms of this
Paragraph 3.B, (i) Purchaser shall promptly deliver to Seller copies of all
studies, reports and other investigations obtained by Purchaser in connection
with its due diligence of the Property, (ii) the Earnest Money deposited by
Purchaser shall be immediately paid to Purchaser, together with any interest
earned thereon and (iii) neither Purchaser nor Seller shall have any right,
obligation or liability under this Agreement, except for Purchaser's obligation
to indemnify Seller and restore the Property, as more fully set forth in
Paragraph 7.
C. The Title Commitment and the Survey shall be conclusive evidence
of good title as therein shown as to all matters to be insured by the title
policy, subject only to the exceptions therein stated. On the Closing Date,
Title Insurer shall deliver to Purchaser a standard title policy in conformance
with the previously delivered Title Commitment, subject to only the Permitted
Exceptions, Disapproved Title Exceptions waived by Purchaser and Unpermitted
Exceptions waived by Purchaser (the "Title Policy"). Purchaser shall pay for
the costs of the Title Commitment and Title Policy, including, without
limitation, the costs of any endorsements to, or extended coverage on, the
Title Policy which shall be paid by Purchaser.
4. PAYMENT OF CLOSING COSTS. In addition to the costs set forth in
Paragraphs 3 above, Purchaser shall pay 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 and all other closing charges and
expenses of the Title Insurer in connection with this transaction.
Notwithstanding the foregoing to the contrary, Seller and Purchaser shall each
pay one-half (1/2) of all escrow fees in connection with the Closing.
<PAGE>
5. CONDITION OF TITLE.
A. If after delivery of the Title Notice to Seller, but prior to
Closing, a date-down to the Title Commitment discloses an Unpermitted Exception
(other than the current financing secured by the Property, which will be
satisfied by Seller at Closing or assumed by Purchaser at Closing pursuant to
the terms hereof), Seller shall have thirty (30) days from the date of the
date-down to the Title Commitment, to (i) have any Unpermitted Exceptions
which, in the aggregate, do not exceed $50,000.00 (a "Minor Unpermitted
Exception"), removed from the Title Commitment or to have the Title Insurer
commit to insure against loss or damage (together with the commitment to
reissue the appropriate endorsement for the benefit of Purchaser's financings
and sale at no cost to Purchaser) that may be occasioned by such Minor
Unpermitted Exceptions at no additional premium to Purchaser, or (ii) have the
right, but not the obligation, to have any Unpermitted Exceptions which, in the
aggregate, equals or exceeds $50,000.00, removed from the Title Commitment or
to have the Title Insurer commit to insure against loss or damage (together
with the commitment to reissue the appropriate endorsement for the benefit of
Purchaser's financings and sale at no cost to Purchaser) that may be occasioned
by such Unpermitted Exceptions at no additional premium to Purchaser. The time
of Closing shall be delayed, if necessary, to give effect to said
aforementioned time periods. If Seller fails to cure or have said Unpermitted
Exception removed or have the Title Insurer commit to insure as specified above
within said thirty (30) day period or if Seller elects not to exercise its
rights under (ii) in the preceding sentence of this Paragraph 5A, Purchaser may
terminate this Agreement upon notice to Seller within five (5) days after the
expiration of said thirty (30) day period; provided, however, and
notwithstanding anything contained herein to the contrary, if the Unpermitted
Exception which gives rise to Purchaser's right to terminate was recorded
against the Property as a result of the affirmative, willful action of Seller
(and not by any unrelated third party) with the intention to prevent the sale
of the Property in accordance with the terms hereof or if Seller is able to
bond over, cure or remove a Minor Unpermitted Exception for a cost not to
exceed $50,000 or the Title Insurer is willing to insure over a Minor
Unpermitted Exception for a cost not to exceed $50,000 in accordance with the
terms hereof and Seller fails to expend said funds in either case, then
Purchaser shall have the additional rights contained in Paragraph 11 herein.
Absent notice from Purchaser to Seller in accordance with the immediately
preceding sentence, Purchaser shall be deemed to have elected to terminate this
Agreement. If Purchaser terminates this Agreement in accordance with the terms
of this Paragraph 5A, 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.
B. Seller agrees to convey fee simple title to the Property to
Purchaser by special warranty deed ("Deed") in recordable form subject only to
the Permitted Exceptions, Disapproved Title Exceptions waived by Purchaser and
Unpermitted Exceptions waived by Purchaser.
<PAGE>
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
A. Except as provided in any indemnity provisions of this
Agreement, Seller shall bear all risk of loss with respect to the Property up
to the earlier of the dates upon which either possession or title is
transferred to Purchaser in accordance with this Agreement. Notwithstanding
the foregoing, in the event of damage to the Property by fire or other casualty
prior to the Closing Date, repair of which would cost less than or equal to
$100,000.00 (as determined by Seller 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 Date shall be extended until completion of
such restoration) or to assign and transfer to Purchaser on the Closing Date
all of Seller's right, title and interest in and to all insurance proceeds paid
or payable to Seller on account of such fire or casualty, including, without
limitation, proceeds of lost rental insurance for the period commencing with
the Closing Date through the period of Purchaser's repair, to the extent said
lost rental insurance covers Purchaser's loss in rental insurance and Seller
shall pay to Purchaser at the Closing the amount of Seller's 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 Date, repair of which would cost in excess of
$100,000.00 (as 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 five (5) 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 Purchaser's obligations to indemnify Seller
and restore the Property, as set forth more fully in Paragraph 7. In the event
that Purchaser does not exercise the option set forth in the preceding
sentence, the Closing shall take place on the Closing Date and Seller shall
assign and transfer to Purchaser on the Closing Date all of Seller's right,
title and interest in and to all insurance proceeds paid or payable to Seller
on account of the fire or casualty, including, without limitation, proceeds of
lost rental insurance for the period commencing with the Closing Date through
the period of Purchaser's repair, to the extent said lost rental insurance
covers Purchaser's loss in rental insurance and Seller shall pay to Purchaser
at the Closing the amount of Seller's insurance deductible.
B. 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) materially impair access to the Property; (ii) cause any material
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
impairs the use of the Property as it is currently being operated (hereinafter
collectively referred to as a "Material Event"), Purchaser may:
<PAGE>
(a) 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 Purchaser's obligations to indemnify Seller and restore the
Property, as set forth more fully in Paragraph 7; or
(b) 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
and give Purchaser the right of approval as to the amount of any award.
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 subparagraph (a) or subparagraph (b) of this
Paragraph 6B. 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 exercise its
rights under subparagraph (b).
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 and give Purchaser the right of
approval as to the amount of any award.
7. INSPECTION AND AS-IS CONDITION.
A. During the period commencing on May 8, 1996 and ending at 5:00
p.m. Chicago time on June 24, 1996 (said period being herein referred to as the
"Inspection Period"), 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 the leases located at the Property, and to
conduct and prepare such studies, tests and surveys as Purchaser may deem
reasonably 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 1994 and 1995 operating
statements.
B. All of the foregoing tests, investigations and studies to be
conducted under this Paragraph 7 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. Purchaser shall defend, indemnify and hold Seller and any
affiliate, parent of Seller, and all shareholders, employees, officers and
directors of Seller or Seller's affiliate or parent (hereinafter collectively
referred to as "Affiliate of Seller") harmless from any and all liability, cost
and expense (including without limitation, reasonable attorney's fees, court
costs and costs of appeal) suffered or incurred by Seller or Affiliates of
Seller for injury to persons or property caused by Purchaser's investigations
and inspection of the Property. Purchaser shall undertake its obligation to
defend set forth in the preceding sentence using attorneys selected by
Purchaser and reasonably acceptable to Seller.
<PAGE>
C. If Purchaser is dissatisfied with the results of the tests,
studies or investigations performed or information received pursuant to this
Paragraph 7 or if Purchaser is not satisfied with the Title Commitment and the
Survey, 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 given by
Purchaser pursuant to this Paragraph 7 prior to the expiration of the
Inspection Period, then the right of Purchaser to terminate this Agreement
pursuant to this Paragraph 7 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; (ii) the Earnest Money deposited by
Purchaser shall be immediately paid to Purchaser, together with any interest
earned thereon and (iii) neither Purchaser nor Seller shall have any right,
obligation or liability under this Agreement, except for Purchaser's obligation
to indemnify Seller and restore the Property, as more fully set forth in this
Paragraph 7. Notwithstanding anything contained herein to the contrary,
Purchaser's obligation to indemnify Seller and restore the Property, as more
fully set forth in this Paragraph 7, shall survive the Closing, the delivery of
the Deed and the termination of this Agreement.
D. Purchaser acknowledges and agrees that it will be purchasing the
Property based solely upon its inspections and investigations of the Property,
and that Purchaser will be purchasing the Property "AS IS" and "WITH ALL
FAULTS", based upon the condition of the Property as of the date of this
Agreement, wear and tear and loss by fire or other casualty or condemnation
excepted. Without limiting the foregoing, Purchaser acknowledges that, except
as may otherwise be specifically set forth elsewhere in this Agreement, neither
Seller nor its consultants, brokers or agents have made any other
representations or warranties of any kind upon which Purchaser is relying as to
any matters concerning the Property, including, but not limited to, the
condition of the land or any improvements comprising the Property, the
existence or non-existence of any hazardous materials or substances, economic
projections or market studies concerning the Property, any development rights,
taxes, bonds, covenants, conditions and restrictions affecting the Property,
water or water rights, topography, drainage, soil, subsoil of the Property, the
utilities serving the Property or any zoning, environmental or building laws,
rules or regulations affecting the Property. Seller makes no representation or
warranty that the Property complies with Title III of the Americans with
Disabilities Act or any fire code or building code. Except with respect to a
breach by Seller of any representation or warranty expressly contained herein,
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, and except with respect to a breach by Seller of any representation or
warranty expressly contained herein, Purchaser hereby agrees not to assert any
claims for contribution, cost recovery or otherwise, against 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. 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 ("CERCLA"), 42 U.S.C. Section 9601 et seq.;
<PAGE>
the Toxic Substance Control Act ("TSCA"), 15 U.S.C. Section 2601 et seq.; the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1802; the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C. Section 9601. et seq.; the
Clear Water Act ("CWA"), 33 U.S.C. e 1251 et seq.; the Safe Drinking Water Act,
42 U.S.C. Section 300f et seq.; the Clean Air Act ("CAA"), 42 U.S.C. Section
7401 et seq.; and in any permits, licenses, approvals, plans, rules,
regulations or ordinances adopted, or other criteria and guidelines promulgated
pursuant to the preceding laws or other similar federal, state or local laws,
regulations, rules or ordinance now or hereafter in effect relating to
environmental matters (collectively the "Environmental Laws"); and (ii) any
other substances, constituents or wastes subject to any applicable federal,
state or local law, regulator 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. Radon is a naturally occurring radioactive gas that,
when it has accumulated in a building in sufficient quantities, may present
health risks to persons who are exposed to it over time. Levels of radon that
exceed federal and state guidelines have been found in buildings in Florida.
Additional information regarding radon and radon testing may be obtained from
the county public health unit. Seller makes no representation regarding the
levels of radon at the Property.
E. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Except as expressly set forth herein,
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 the representations
and warranties of Seller expressly contained herein and releases Seller from
any liability with respect to such historical information, except with respect
to a breach of a representation or warranty of Seller contained herein.
F. Seller has provided to Purchaser the following existing report
prepared by Environmental Risk Consultants, dated July 26, 1993 (the "Existing
Report"). Seller makes no representation or warranty concerning the accuracy
or completeness of the Existing Report. Purchaser hereby releases Seller and
the Affiliates of Seller from any liability whatsoever with respect to the
Existing Report, or, including, without limitation, the matters set forth in
the Existing Report, and the accuracy and/or completeness of the Existing
Report. Furthermore, Purchaser acknowledges that it will be purchasing the
Property with all faults disclosed in the Existing Report.
8. CLOSING. The closing of this transaction (the "Closing") shall be on
July 24, 1996, at which time Seller shall deliver possession of the Property to
Purchaser. If the Closing occurs simultaneously with a closing under one or
more of the "Other Agreements" (as hereinafter defined), then the Closing shall
occur at the offices of Apperson, Crump, Duzane & Maxwell, 1755 Kirby Parkway,
Suite 100, Memphis Tennessee. Otherwise, the Closing shall occur by mail
through an escrow established at the Title Insurer. This transaction shall be
closed in accordance with the general provisions of the usual and customary
<PAGE>
form of deed and money escrow for similar transactions in Florida, or at the
option of either party, the Closing shall be a "New York style" closing at
which the Purchaser shall wire the Purchase Price to Title Insurer on the
Closing Date and prior to the release of the Purchase Price to Seller,
Purchaser shall receive the Title Policy or marked up commitment dated the date
of the Closing Date. In the event of a New York style closing, Seller shall
deliver to Title Insurer any customary affidavit in connection with a New York
style closing. Purchaser shall pay all closing and escrow fees.
9. CLOSING DOCUMENTS.
A. On the Closing Date, Purchaser shall deliver to Seller (or to
Title Insurer if the Closing occurs through escrow) an executed closing
statement, the balance of the Purchase Price, an assumption of the documents
set forth in Paragraph 9.B.(iii) and (iv), evidence of the assumption by
Purchaser of Seller's obligations under the Loan Documents and the release of
Seller from the "Lender" (as hereinafter defined) from all liability in
connection with the Loan Documents and such other documents as may be
reasonably required by the Title Insurer in order to consummate the transaction
as set forth in this Agreement.
B. On the Closing Date, Seller shall deliver to Purchaser (or to
Title Insurer if the Closing occurs through escrow) the following:
(i) the Deed (in the form of Exhibit E attached hereto as the same
may need to be modified to satisfy the Title Insurer), subject
to Permitted Exceptions, Disapproved Title Exceptions waived by
Purchaser and Unpermitted Exceptions waived by Purchaser;
(ii) a special warranty bill of sale conveying the Personal Property
(in the form of Exhibit F attached hereto);
(iii) assignment and assumption of intangible property (in the form
attached hereto as Exhibit G);
(iv) an assignment and assumption of leases and security deposits (in
the form attached hereto as Exhibit H);
(v) non-foreign affidavit (in the form of Exhibit I attached
hereto);
(vi) original, and/or copies of, leases affecting the Property in
Seller's possession;
(vii) all documents and instruments reasonably required by the Title
Insurer to issue the Title Policy;
(viii) possession of the Property to Purchaser;
(ix) an executed closing statement;
(x) notice to the tenants of the Property of the transfer of title
and assumption by Purchaser of the landlord's obligation under
the leases and the obligation to refund the security deposits
(in the form of Exhibit J); and
<PAGE>
(xi) an updated rent roll.
10. DEFAULT BY PURCHASER. ALL EARNEST MONEY DEPOSITED INTO THE ESCROW IS
TO SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND
UNDERTAKINGS UNDER THIS AGREEMENT. IN THE EVENT OF A DEFAULT OF THE PURCHASER
UNDER THE PROVISIONS OF THIS AGREEMENT, SELLER SHALL RETAIN ALL OF THE EARNEST
MONEY AND THE INTEREST THEREON AS SELLER'S SOLE RIGHT TO DAMAGES OR ANY OTHER
REMEDY, EXCEPT FOR PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER PURSUANT TO
PARAGRAPH 7 HEREOF. THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES, IN
THE EVENT OF A DEFAULT BY PURCHASER, WOULD BE EXTREMELY DIFFICULT OR
IMPRACTICAL TO DETERMINE. THEREFORE, BY PLACING THEIR INITIALS BELOW, THE
PARTIES ACKNOWLEDGE THAT THE EARNEST MONEY HAS BEEN AGREED UPON, AFTER
NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES.
PURCHASER AND SELLER AGREE THAT A DEFAULT BY PURCHASER UNDER ANY OF THE
TERMS OR CONDITIONS OF ANY OF THOSE CERTAIN AGREEMENTS OF SALE LISTED ON
EXHIBIT O ATTACHED HERETO (THE "OTHER AGREEMENTS") SHALL BE DEEMED A DEFAULT OF
PURCHASER UNDER THIS AGREEMENT. IN ADDITION, PURCHASER AND SELLER AGREE THAT A
DEFAULT BY PURCHASER UNDER THIS AGREEMENT SHALL BE DEEMED A DEFAULT UNDER EACH
OF THE OTHER AGREEMENTS. IF ANY TRANSACTION CONTEMPLATED BY THE OTHER
AGREEMENTS FAIL TO CLOSE FOR ANY REASON WHATSOEVER, PURCHASER SHALL NOT BE
ENTITLED TO ANY RIGHTS OF SETOFF UNDER THIS AGREEMENT IN CONNECTION WITH ANY
LIABILITY ARISING UNDER THE OTHER AGREEMENTS.
11. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF ALL EARNEST MONEY
TOGETHER WITH ANY INTEREST ACCRUED THEREON, AND THIS AGREEMENT SHALL THEN
BECOME NULL AND VOID AND OF NO EFFECT AND THE PARTIES SHALL HAVE NO FURTHER
LIABILITY TO EACH OTHER AT LAW OR IN EQUITY, EXCEPT FOR PURCHASER'S OBLIGATIONS
TO INDEMNIFY SELLER AND RESTORE THE PROPERTY AS SET FORTH MORE FULLY IN
PARAGRAPH 7 AND PURCHASER'S RIGHT TO RECEIVE FROM SELLER ITS ACTUAL, DOCUMENTED
THIRD PARTY EXPENSES INCURRED IN THE PERFORMANCE OF ITS DUE DILIGENCE HEREUNDER
AND THE PREPARATION OF THIS AGREEMENT, NOT TO EXCEED $81,000.00 IN THE
AGGREGATE. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF
SELLER'S DEFAULT IS (i) ITS (AND NOT AN UNRELATED THIRD PARTY'S) AFFIRMATIVE,
WILLFUL ACTION WHICH RESULTS IN THE RECORDING OF AN ENCUMBRANCE AGAINST THE
PROPERTY WITH THE INTENTION TO PREVENT THE SALE OF THE PROPERTY IN ACCORDANCE
WITH THE TERMS HEREOF AND WHICH GIVES RISE TO PURCHASER'S RIGHT TO TERMINATE
THIS AGREEMENT PURSUANT TO PARAGRAPH 5 HEREOF; (ii) ITS FAILURE TO EXPEND UP TO
$50,000 IF (a) SELLER IS ABLE TO BOND OVER, CURE OR REMOVE A MINOR UNPERMITTED
EXCEPTION FOR A COST NOT TO EXCEED $50,000 OR (b) THE TITLE INSURER IS WILLING
TO INSURE OVER A MINOR UNPERMITTED EXCEPTION FOR A COST NOT TO EXCEED $50,000
IN ACCORDANCE WITH THE TERMS HEREOF OR (iii) ITS REFUSAL TO DELIVER THE DEED,
THEN PURCHASER WILL BE ENTITLED TO SUE FOR SPECIFIC PERFORMANCE.
12. PRORATIONS.
A. Rents (exclusive of delinquent rents, but including prepaid
rents); refundable security deposits (which will be assigned to and assumed by
Purchaser and credited to Purchaser at Closing); water and other utility
charges; accrued but unpaid interest on the Note; fuels; prepaid operating
expenses; 1995 (if not paid) and 1996 real and personal property taxes; and
other similar items shall be adjusted ratably as of 12:01 a.m. on the Closing
Date. Assessments of record (other than ad valorem 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. The parties agree to re-prorate the proration items within
forty-five (45) days after the date of Closing, except as to delinquent rent
referred to in Paragraph 12B below. In addition, Purchaser shall give Seller a
credit at Closing for all escrows, reserves and holdbacks held by the Lender
under the Loan Documents, except for amounts, if any, of such escrows, reserves
and holdbacks applicable to expenses which relate to the period prior to the
Closing Date for which Purchaser has not been given a credit hereunder.
B. All sums paid following the Closing Date by any tenant of the
Property who is indebted under a lease for any period prior to and including
the Closing Date after the payment to Purchaser of all then current basic rent
shall be deemed a "Post-Closing Receipt" until such time as all such
indebtedness is paid in full. Within ten (10) days following each receipt by
Purchaser of a Post-Closing Receipt, Purchaser shall pay such Post-Closing
Receipt to Seller. For a period of sixty days following Closing, Purchaser
shall send monthly collection notices to tenants residing at the Property owing
Post-Closing Receipts. Within 90 days after the Closing Date, Purchaser shall
deliver to Seller a reconciliation statement of Post-Closing Receipts through
the first 60 days after the Closing Date. Upon the delivery of the
Post-Closing Receipts reconciliation, Purchaser shall deliver to Seller any
Post-Closing Receipts owing to Seller and not previously delivered to Seller in
accordance with the terms hereof. At Seller's expense, Seller retains the
right to conduct an audit, at reasonable times and upon reasonable notice, of
Purchaser's books and records to verify the accuracy of the Post-Closing
Receipts reconciliation statement and upon the verification of additional funds
owing to Seller, Purchaser shall pay to Seller said additional Post-Closing
Receipts. Seller shall deliver to Purchaser any sums received by Seller after
the Closing Date which relate to the period of time after the Closing Date,
along with an accounting identifying any such sums. Paragraph 12B of this
Agreement shall survive the Closing and the delivery and recording of the Deed.
13. RECORDING. This Agreement shall not be recorded and the act of
recording by Purchaser shall be an act of default hereunder by Purchaser and
subject to the provisions of Paragraph 10.
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.
15. BROKER. The parties hereto represent and warrant that no broker
commission or finder fee is due and payable in connection with this transaction
other than to: (i) Cushman & Wakefield of Florida, Inc. ("C&W"); and (ii)
Memphis Commercial Group ("MC"), both to be paid by Seller. Seller's
commissions to C&W and MC shall only be payable out of the proceeds of the
sale of the Property in the event the transaction set forth herein closes.
Purchaser hereby agrees to indemnify, defend and hold Seller harmless from any
claim whatsoever (including without limitation, reasonable attorney's fees,
court costs and costs of appeal) from anyone claiming by or through Purchaser
for any fee, commission or compensation on account of this Agreement, its
negotiation or the sale hereby contemplated other than claims of C&W (or anyone
claiming by, through or under C&W). Seller hereby agrees to indemnify, defend
and hold Purchaser harmless from any claim whatsoever (including without
limitation, reasonable attorney's fees, court costs and costs of appeal) from
<PAGE>
anyone claiming by or through Seller for any fee, commission or compensation on
account of this Agreement, its negotiation or the sale hereby contemplated
other than claims of MC (or anyone claiming by, through or under MC). The
indemnifying party shall undertake its obligations set forth in this
Paragraph 15 using attorneys selected by the indemnifying party and reasonably
acceptable to the indemnified party. The provisions of this Paragraph 15 will
survive the Closing and delivery of the Deed.
16. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
A. Any reference herein to Seller's knowledge, representation,
warranty or notice of any matter or thing shall only mean such knowledge or
notice that has actually been received by Phillip Schechter or Michael Becker
(asset manager of the Property and who is in a position to have a basis for
having knowledge with respect to the Property) (hereinafter collectively
referred to as the "Seller's Representatives"), and any representation or
warranty of the Seller is based upon those matters of which the Seller's
Representatives have actual knowledge. Any knowledge or notice given, had or
received by any of Seller's agents, servants or employees (other than Seller's
Representatives) 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.
B. Subject to the limitations set forth in Paragraph A of this
Paragraph 16, Seller hereby makes the following representations and warranties,
which representations and warranties are made to the Seller's knowledge and
which shall, subject to Paragraph 16C, be remade at Closing:
(i) Except for the matter disclosed on Exhibit N, Seller has no
knowledge of any pending or threatened litigation, claim, cause of action
or administrative proceeding concerning the Property;
(ii) The rent roll attached hereto as Exhibit L and which shall be
updated as of the Closing Date accurately sets forth the number of tenants
then in possession of the Property as of the date of said rent roll,
contains an accurate summary of the rental obligations, the expiration
date, the security deposit and the delinquencies of each such tenancy as
of the date of said rent roll;
(iii) That the tenant leases evidencing such tenancies referred to in
the rent roll are in full force and effect and have not been amended or
modified except as set forth in the rent roll or in the leases made
available to Purchaser for Purchaser's review;
(iv) Seller has received no notice of any material default on the
part of Seller under any said tenant leases;
(v) Except as set forth in the rent roll, no tenant under the leases
as of the date of the rent roll is in material default of the payment of
rent;
(vi) That Seller will not collect any of the rent or other sums
arising or accruing under any of the said tenant leases in advance of the
time when they come due except for the benefit of Purchaser (and Seller
<PAGE>
retains ownership of all accounts receivable for rents due for periods of
time prior to the Closing);
(viii) The Seller has not given or suffered any assignment, pledge or
encumbrance with respect to any of the tenant leases or its interests
thereunder except as additional collateral for the existing loan secured
by the Property;
(ix) Pending the Closing, Seller will not without the prior consent
of Purchaser convey all or any portion of the Property;
(x) Except as shown on Exhibit M, there are no service contracts
which in any manner affect or otherwise relate to the Property or the
tenant leases;
(xi) Seller has full right, power and authority to enter into this
Agreement and consummate the transaction contemplated hereby;
(xii) Seller and all persons or entities having beneficial interests
in the Property are "United States Persons," as defined in
Section 1445(f)(3) and Section 7701(g) of the Internal Revenue Code of
1986, as amended, and the purchase of the Property by Purchaser as
contemplated herein will not be subject to the withholding requirements of
Section 1445(a) of the Code;
(xiii) Except as set forth in the Existing Report, Seller has not
received any notice from any governmental authority having jurisdiction
over the Property of any uncured violation of any Environmental Law with
respect to the Property. Seller has not commissioned any environmental
report with respect to the Property other than the Existing Report; and
(xiv) Seller has not received written notice from any third party of
any structural defects that would render the Property unusable as an
apartment complex.
C. If at any time after the execution of this Agreement, either
Purchaser or Seller become aware of information which makes a representation
and warranty contained in this Agreement untrue in any material respect, said
party shall promptly disclose said information to the other party hereto.
Provided the party making the representation or warranty did not take any
deliberate actions to cause the representation or warranty in question to be or
become untrue in any material respect, said party shall not be in default under
this Agreement and the sole remedy of the other party shall be to terminate
this Agreement. Notwithstanding anything contained herein to the contrary, if
the status of any of the tenancies changes from the date of the rent roll
attached hereto and the date of the rent roll delivered at Closing, provided
the change in status is not caused by a breach of Seller's covenants contained
in Paragraph 16D herein, then Purchaser shall not have the right to terminate
this Agreement or make any claim for a breach of a representation or warranty
hereunder involving the rent roll or tenancies thereunder. Purchaser and
Seller are prohibited from making any claims against the other party hereto
after the Closing with respect to any breaches of the other party's
representations and warranties contained in this Agreement that the claiming
party has actual knowledge of prior to the Closing. The parties agree that the
representations contained herein shall survive Closing for a period of sixty
(60) days (i.e., the claiming party shall have no right to make any claims
<PAGE>
against the other party for a breach of a representation or warranty after the
expiration of sixty (60) days immediately following Closing).
D. Seller covenants to operate and manage the Property in the same
manner that it has managed, maintained and operated the Property during the
period of Seller's ownership, subject to reasonable wear and tear and casualty.
17. LIMITATION OF LIABILITY. Neither any of Seller's respective partners
(whether general partners, limited partners or any level of sub-partner) nor
any beneficiaries, shareholders, officers, agents or employees, heirs,
successors or assigns shall have any personal liability of any kind or nature
for or by reason of any matter or thing whatsoever under, in connection with,
arising out of or in any way related to this Agreement and the transactions
contemplated herein, and Purchaser hereby waives for itself and anyone who may
claim by, through or under Purchaser any and all rights to sue or recover on
account of any such alleged personal liability. Notwithstanding anything
contained herein to the contrary, Purchaser hereby agrees that the maximum
aggregate liability of Seller, 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 shall
be $81,000.00; provided, however, in no way shall this sentence or the
following sentence preclude Purchaser's right of specific performance contained
in Paragraph 11 herein. 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. Seller further agrees not to
distribute $81,000.00 of the proceeds of the Purchase Price to its partners for
the longer of (i) sixty (60) days after the Closing and (ii) final resolution
of any claims by Purchaser and asserted in writing against Seller prior to the
expiration of the sixtieth (60th) day 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.
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, facsimile delivered or given or made
by overnight courier such as Federal Express or made by United States
registered or certified mail addressed as follows:
<PAGE>
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: Alan Lieberman
(847) 317-4360
(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: c/o Mid-America Apartment Communities, Inc.
6584 Poplar Avenue
Suite 340
Memphis, Tennessee 38138
Attention: Donald Aldridge
(901) 682-6600
(901) 682-6667 (FAX)
and one copy to: Apperson, Crump, Duzane & Maxwell
1755 Kirby Parkway
Suite 100
Memphis, Tennessee 38120
Attention: John Maxwell
(901) 756-6300
(901) 757-1296 (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, on the same day if sent by facsimile transmission prior to 5:00 p.m.
Chicago time (provided, however, if the notice or demand is not accepted by the
recipient's fax machine after 10 attempts by the sender to fax the notice or
demand and the sender advises the recipient by phone of the specific nature of
the notice or demand prior to 5:00 p.m. Chicago time on the same day the sender
is attempting to send its notice or demand by facsimile and if the sender sends
the notice or demand to the recipient by overnight courier to be delivered on
the first business day following the day that the notice or demand was
attempted to be given by fax, then the notice or demand shall be deemed given
on the date the sender attempted to send the facsimile) or on the 4th business
day after the same is deposited in the United States Mail as registered or
certified matter, addressed as above provided, with postage thereon fully
prepaid. Any such notice, demand or document not given, delivered or made by
registered or certified mail or by overnight courier as aforesaid shall be
<PAGE>
deemed to be given, delivered or made upon receipt of the same by the party to
whom the same is to be given, delivered or made. Copies of all notices shall
be served upon the Escrow Agent.
20. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute
two (2) copies of this Agreement and three (3) copies of the Escrow Agreement
and forward them to Seller for execution, accompanied with the Earnest Money
payable to the Escrow Agent set forth in the Escrow Agreement. Seller will
forward one (1) copy of the executed Agreement to Purchaser and will forward
the following to the Escrow Agent:
(1) Purchaser's check for the Earnest Money;
(2) One (1) fully executed copy of this Agreement; and
(3) Three (3) copies of the Escrow Agreement signed by the
parties with a direction to execute two (2) copies of the Escrow Agreement and
deliver a fully executed copy to each of the Purchaser and the Seller.
21. GOVERNING LAW. The provisions of this Agreement shall be governed by
the laws of the State of Florida, except that with respect to the retainage of
the Earnest Money as liquidated damages, the laws of the State of Virginia
shall apply.
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. SERVICE CONTRACTS. Attached hereto as Exhibit M is a list of service
contracts affecting the Property. Seller shall assign the service contracts to
Purchaser at Closing, and Purchaser shall assume responsibility and obligations
under the service contracts. Seller agrees not to enter into any other service
contracts affecting the Property. Seller agrees to terminate any and all
management agreements affecting the Property as of the Closing Date.
26. AUDIT. Seller will make available to Purchaser's representatives
such books, accounts and records necessary for Purchaser to conduct an audit of
the Property's preceding fiscal year. This audit will be conducted solely at
Purchaser's expense for the purpose of satisfying its requirements as a
publicly held entity. Seller agrees to execute and deliver a disclosure letter
prepared by the auditors of Purchaser in the form attached hereto as Exhibit K.
The terms of this Paragraph 26 shall survive the Closing for a period of one
(1) year after the Closing Date.
27. ASSUMPTION OF LOAN. The Property is currently encumbered by that
certain Mortgage (the "Mortgage") by Seller to Value Line Mortgage Corporation,
a Pennsylvania corporation (the "Lender"), dated November 5, 1993, which
secures that certain Promissory Note (the "Note") made by Seller in favor
<PAGE>
Lender in the original principal amount of Five Million Five Hundred Thousand
And No/100 ($5,500,000.00) (the Mortgage and the Note, together with all other
documents or instruments enter into in connection with the Mortgage and the
Note, are hereinafter referred to as the "Loan Documents"). Seller has
delivered to Purchaser copies of those Loan Documents set forth on Exhibit P.
In addition, within ten (10) business days of the date hereof, Seller shall
provide Purchaser with a list of all escrows, reserves and holdbacks held by
Lender under the Loan Documents.
Notwithstanding anything contained in this Agreement to the contrary,
Purchaser and Seller agree that the obligation of each party to consummate the
transactions contemplated by this Agreement are contingent upon the occurrence
of the following on or before the expiration of the Inspection Period (the
"Condition Precedent"): Lender consenting, in writing, to (i) the assumption
by Purchaser of Seller's obligations under the Loan Documents on terms
reasonably acceptable to Purchaser (including, without limitation, the
reasonableness of any assumption fees imposed by Lender) and (ii) a release by
Lender of Seller from any liability under the Loan Documents (together, the
"Lender Consent"). If Purchaser does not terminate this Agreement on or before
the expiration of the Inspection Period in accordance with Paragraph 7, then
Purchaser acknowledges that for purposes of this Agreement the Lender Consent
shall be deemed reasonable if it provides for the assumption by Purchaser of
Seller's obligations under the Loan Documents on terms and conditions which do
not expand the existing obligations under the Loan Documents, including,
without limitation, the payment by Purchaser in connection with obtaining the
Lender Consent of the application fee set forth in the Loan Documents or in the
absence of a specified amount in the Loan Documents a reasonable application
fee imposed by Lender, an assumption fee in a maximum amount of one percent
(1%) of the outstanding principal balance of the Note and the reasonable costs
and expenses of the Lender. Purchaser agrees to promptly commence and
diligently pursue obtaining the Lender Consent. Purchaser shall keep Seller
advised of and allow Seller to participate in the process of obtaining the
Lender Consent and Seller agrees to cooperate with Purchaser (at no expense to
Seller) in Purchaser's efforts to obtain the Lender Consent.
Purchaser shall immediately notify Seller upon obtaining the Lender
Consent. If Purchaser is unable to obtain the Lender Consent on or before July
10, 1996, then this Agreement shall be terminated. If this Agreement is
terminated in accordance with the immediately preceding sentence, then (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; (ii) the Earnest Money deposited by Purchaser
shall be immediately paid to Purchaser, together with any interest earned
thereon, and (iii) neither Purchaser nor Seller shall have any right,
obligation or liability under this Agreement, except for Purchaser's obligation
to indemnify Seller and restore the Property, as more fully set forth in
Paragraph 7.
Provided Purchaser obtains the Lender Consent, at the Closing (i)
Purchaser shall assume all of Seller's obligation under the Loan Documents and
(ii) Seller shall be released from any liability under the Loan Documents. In
connection therewith, Purchaser and Seller agree to execute customary and
necessary documents reflecting such assumption and such release reasonably
required by the Lender and reasonably acceptable to Purchaser and Seller.]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the _31__day of May, 1996.
PURCHASER:
MID-AMERICA APARTMENTS, L.P., a Tennessee limited
partnership
By:MID-AMERICA APARTMENT COMMUNITIES, INC., a
Tennessee corporation, its general partner
By: /s/Simon R.C. Wadsworth
---------------------------------
Simon R.C. Wadsworth,
Executive Vice President
SELLER:
4949 MARBRISA LIMITED PARTNERSHIP,
an Illinois limited partnership
By:4949 Marbrisa of Illinois, Inc.
an Illinois corporation,
its general partner
By: /s/Phillip Schechter
---------------------------------
Name: Phillip Schechter
---------------------------------
Its: Authorized Agent
---------------------------------
<PAGE>
_________________ of Cushman & Wakefield of Florida, Inc. ("C&W") 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 April
23, 1996 between Seller and C&W (the "Listing Agreement"). C&W acknowledges
that it is paying a portion of such commission in the amount of .25% of the
Purchase Price to Memphis Commercial Group. C&W 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. C&W agrees to deliver a receipt
to the Seller at the Closing for the fee or commission due C&W and a release
stating that no other fees or commissions are due to it from Seller or
Purchaser.
CUSHMAN & WAKEFIELD OF FLORIDA, INC.
By:
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
<PAGE>
_________________ of Memphis Commercial Group ("MC") executed this Agreement in
its capacity as a real estate broker and acknowledges that the fee or
commission due it from Purchaser as a result of the transaction described in
this Agreement is .25% of the Purchase Price. MC acknowledges that it will be
receiving such commission from Cushman & Wakefield of Florida, Inc.. MC 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. MC
agrees to deliver a receipt to the Seller at the Closing for the fee or
commission due MC and a release stating that no other fees or commissions are
due to it from Seller or Purchaser.
MEMPHIS COMMERCIAL GROUP
By: /s/Don Aldridge
--------------------------------
Name: Don Aldridge
--------------------------------
Title: President
--------------------------------
<PAGE>
Exhibits
A - Legal
B - Personal Property
C - Escrow Agreement
D - Intentionally Deleted
E - Special Warranty Deed
F - Special Warranty Bill of Sale
G - Assignment and Assumption of Intangible Property
H - Assignment and Assumption of Leases and Security Deposits
I - Non-Foreign Affidavit (FIRPTA Statement)
J - Notice to Tenants
K - Auditor's Disclosure Letter
L - Rent Roll
M - List of Service Contracts
N - Litigation
O - Other Agreements
P - List of Loan Documents
<PAGE>
FIRST AMENDMENT TO
AGREEMENT OF SALE AND ESCROW AGREEMENT
THIS FIRST AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT (this
"Amendment") is entered into as of this 6th day of June, 1996 by and between
4949 MARBRISA LIMITED PARTNERSHIP, an Illinois limited partnership ("Seller")
and MID-AMERICA APARTMENTS, L.P., a Tennessee limited partnership
("Purchaser").
RECITALS:
WHEREAS, Seller and Purchaser have entered into an Agreement of Sale dated
May 31, 1996 (the "Original Agreement") for that certain property commonly know
as the Marbrisa Apartments, Tampa, Florida, and more particularly described
therein (the "Property"). All capitalized terms which are used but not defined
herein shall have the meanings ascribed to such terms in the Original
Agreement;
WHEREAS, in accordance with the Original Agreement, Seller, Purchaser and
Title Insurer entered into an Escrow Agreement dated May 31, 1996 (the "Escrow
Agreement"); and
WHEREAS, the parties desire to amend the Original Agreement and the Escrow
Agreement on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of Ten and No/100 Dollars ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:
AGREEMENT:
1. Closing Date. The references to "July 24, 1996" in Section 8 of the
Original Agreement and Section 2 of the Escrow Agreement are hereby deleted and
"July 31, 1996" is hereby substituted in their places.
2. Rent Roll. The Original Agreement is hereby amended by adding to
Exhibit L the delinquency report attached hereto as Exhibit L-1.
3. Service Contracts. The Original Agreement is hereby amended by
deleting Exhibit M in its entirety and substituting Exhibit M-1 attached hereto
in its place.
4. Other Agreements. The Original Agreement is hereby amended by adding
to Exhibit O the following: "5. Agreement of Sale by and between Purchaser
and Balcor Pension Investors-VI, an Illinois limited partnership, dated as of
the date hereof".
5. Modification. Except as amended and modified hereby, the Original
Agreement and the Escrow Agreement shall be and remain unchanged and in full
force and effect in accordance with their terms and they are hereby ratified
and confirmed. In the event of any inconsistencies between the terms of the
Original Agreement or the Escrow Agreement and this Amendment, the terms of
this Amendment shall control.
6. Counterparts. This Amendment may be executed in multiple
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same agreement.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amendment as of the day
and year first written above.
SELLER:
4949 MARBRISA LIMITED PARTNERSHIP, an Illinois
limited partnership
By: 4949 Marbrisa of Illinois, Inc., an Illinois
corporation, its general partner
By: /s/Phillip Schechter
--------------------------------
Name: Phillip Schechter
--------------------------------
Its: Authorized Agent
--------------------------------
PURCHASER:
MID-AMERICA APARTMENTS, L.P., a Tennessee limited
partnership
By: Mid-America Apartment Communities, Inc., a
Tennessee corporation, its general partner
By: /s/Simon R.C, Wadsworth
--------------------------------
Name: Simon R.C. Wadsworth
--------------------------------
Title: Executive Vice President
--------------------------------
<PAGE>
MASTER AMENDMENT AND AGREEMENT
This Master Amendment and Agreement (this "Agreement") is entered into as
of this 22nd day of May, 1996 by and among the selling entities set forth on
the signature pages attached hereto (each entity being referred to herein as a
"Seller" and collectively as the "Sellers") and ERP Operating Limited
Partnership, an Illinois limited partnership ("Purchaser").
R E C I T A L S
A. Each Seller and the Purchaser have entered into an Agreement of Sale
dated as of April 23, 1996 (herein called the "Purchase Agreement") for the
sale by such Seller to Purchaser of certain property described therein. All
capitalized terms which are used herein but which are not otherwise defined
herein shall have the meaning ascribed to such term in the applicable Purchase
Agreement.
B. Each Purchase Agreement provides that during the Approval Period,
Purchaser shall have the right to review the status of title of the Property
(including, determining what endorsements, if any, the Title Insurer will make
available to Purchaser).
C. Each Purchase Agreement further provides that each Seller will
deliver to Purchaser an Updated Survey and Purchaser shall have ten (10) days
from the date of receipt of the Updated Survey to approve the Updated Survey.
D. Purchaser has reviewed the status of title for each Property and has
reviewed certain of the Updated Surveys; provided, however, Purchaser and
Seller have not yet agreed upon "Permitted Exceptions" for each Property.
E. Purchaser and Seller desire to amend each Purchase Agreement to give
Purchaser and Seller until May 23, 1996 to agree upon Permitted Exceptions for
each Property.
NOW, THEREFORE, for and in consideration of the sum of Ten Dollars
($10.00) and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, each Seller (with respect to the Purchase
Agreement to which such Seller is a party) and the Purchaser, hereby agree as
follows:
<PAGE>
A G R E E M E N T
1. RECITALS. The recitals set forth above are hereby incorporated
herein by reference as if same were fully set forth herein.
2. AMENDMENT. Purchaser and Seller hereby agree that Purchaser and
Seller shall have until the later of: (i) the expiration of the Approval Period
(as same may have been extended) or (ii) May 23, 1996 (the "Deadline Date") to
agree upon Permitted Exceptions for each Purchase Agreement (subject to
Purchaser's additional right to have 10 days to review Updated Surveys). If
Purchaser and Seller are unable to agree upon Permitted Exceptions on or prior
to the Deadline Date, then Seller shall have the right to elect to either
terminate the applicable Purchase Agreement, in which case the applicable
Earnest Money, including interest thereon, shall be returned to Purchaser
immediately following the applicable Seller's receipt of the Reports or (ii)
agree to cure the title objections identified by Purchaser as being
problematic, which cure may be effectuated by causing the Title Insurer, at
such Seller's expense, to insure over any objection, if applicable.
3. Miscellaneous
A. Except as modified herein, each Purchase Agreement shall remain
unmodified and in full force and effect.
B. This Amendment may be executed in any number of counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date and year first above written.
[See Attached Signature Blocks]
<PAGE>
PURCHASER
ERP OPERATING LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Equity Residential Properties Trust,
a Maryland real estate investment
trust
By: /s/Daniel L. Baskes
----------------------------------
Name: Daniel L. Baskes
----------------------------------
Title: Attorney
----------------------------------
<PAGE>
Forest Ridge II Apartments
Arlington Ridge Limited Partnership, an Illinois
limited partnership
By: Arlington Ridge of Illinois, Inc., an
Illinois corporation, its general partner
By: /s/Andrew Small - Attorney
-------------------------------
Name: Andrew Small
-------------------------------
Its: Attorney
-------------------------------
<PAGE>
Rosehill Pointe Apartments
Rosehill Partners, an Illinois joint venture
By: Balcor Realty Investors 84-Series II A Real
Estate Limited Partnership, a Maryland
partnership, a joint venture partner
By: Balcor Partners-84II, Inc., a Delaware
corporation, its general partner
By: /s/Andrew Small - Attorney
------------------------------
Name: Andrew Small
------------------------------
Its: Attorney
------------------------------
<PAGE>
MASTER AMENDMENT AND AGREEMENT #2
This Amendment and Agreement #2 (this "Agreement") is entered into as of
this 22nd day of May, 1996 by and among the selling entities set forth on the
signature pages attached hereto (each entity being referred to herein as a
"Seller" and collectively as the "Sellers") and ERP Operating Limited
Partnership, an Illinois limited partnership ("Purchaser").
R E C I T A L S
A. Each Seller and the Purchaser have entered into an Agreement of Sale
dated as of April 23, 1996 (herein called the "Purchase Agreement") for the
sale by such Seller to Purchaser of certain property described therein. All
capitalized terms which are used herein but which are not otherwise defined
herein shall have the meaning ascribed to such terms in the applicable Purchase
Agreement.
B. Each Purchase Agreement provides that during the Approval Period,
Purchaser shall have the right to review the status of title of the Property
(including, determining what endorsements, if any, the Title Insurer will make
available to Purchaser).
C. Each Purchase Agreement further provides that each Seller will
deliver to Purchaser an Updated Survey and Purchaser shall have ten (10) days
from the date of receipt of the Updated Survey to approve the Updated Survey.
D. Purchaser has reviewed the status of title for each Property and has
reviewed certain of the Updated Surveys.
E. The Purchase Agreements further provide that promptly following the
Approval Period, Purchaser and each Seller will identify the exceptions to
title which have been agreed to by Purchaser and such Seller.
F. The parties desire to enter into this Agreement to identify the
"Permitted Exceptions" for each Property and to set forth the parties agreement
with respect to title and survey matters as of the date hereof and to also set
forth certain additional agreements of the parties.
NOW, THEREFORE, for and in consideration of the sum of Ten Dollars
($10.00) and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, each Seller (with respect to the Purchase
Agreement to which such Seller is a party) and the Purchaser, hereby agree as
follows:
<PAGE>
A G R E E M E N T
1. Surveys.
A. As of the date hereof, Purchaser has not yet received and/or
reviewed the Updated Surveys for the following properties:
(1) Briarwood Place
(2) Canyon Sands
(3) Desert Sands
(4) Sunnyoak Village
(5) Rosehill Pointe
(6) Post Place
In accordance with each Purchase Agreement, Purchaser shall have ten (10)
days following Purchaser's receipt of each Updated Survey to approve or
disapprove of the applicable Updated Survey, all as more specifically set forth
in each Purchase Agreement. If the Updated Survey is approved by Purchaser,
all items disclosed by the Updated Survey shall be "Permitted Exceptions".
B. In addition, Purchaser has reviewed and approved of the Updated
Surveys for the following properties.
(1) Brierwood Apts.
(2) Country Ridge
(3) Forest Ridge I
(4) Forest Ridge II
(5) Lakeville
(6) Mallard Cove
(7) Park Place I
(8) Park Place II
(9) Ridgetree I
(10) Ridgetree II
Each Seller (solely with respect to the Property owned by such Seller)
hereby agrees to reasonably assist Purchaser in causing the surveyor to correct
certain clean up items identified by Purchaser during its review of the Survey.
2. Title Matters. Purchaser has reviewed the title commitments for all
of the properties. Attached hereto as Exhibit A is a list of "Permitted
Exceptions" for each Property. Notwithstanding anything contained in this
Agreement or the exhibits hereto to the contrary, any Permitted Exceptions set
forth on Exhibit A which have the notation "awaiting survey" written next to
the applicable Permitted Exception (herein called "Survey Based Exceptions")
have not been agreed to by Purchaser because Purchaser has not yet reviewed the
Updated Survey which identifies the location of the applicable Permitted
Exception. Purchaser shall have until 10 days following Purchaser's receipt of
the Updated Survey to advise the applicable Seller, in writing, whether any
Survey Based Exception is or is not reasonably acceptable to Purchaser. If
Purchaser advises the applicable Seller that any Survey Based Exception is not
reasonably acceptable to Purchaser, then the applicable Seller shall have five
(5) business days following receipt of such notice, to elect to either
terminate the applicable Purchase Agreement, in which case the applicable
Earnest Money, including interest thereon, shall be returned to Purchaser
immediately following the applicable Seller's receipt of the Reports or (ii)
<PAGE>
agree to cure the title objections identified by Purchaser, which cure may be
effectuated by causing the Title Insurer, at such Seller's expense, to insure
over any objection, if applicable.
3. Assignment of Partnership Interests. If requested to do so by
Purchaser, each Seller hereby agrees, at no cost or expense to such Seller, to
cooperate in good faith with Purchaser in structuring the conveyance of
Property by the applicable Seller to Purchaser as a conveyance of title to such
Property by the applicable Seller into a partnership or limited liability
company having the applicable Seller and/or affiliates of the applicable Seller
as its sole partners (or members) and then, at closing, assigning to Purchaser
the partnership (or membership) interests in the partnership (or limited
liability company). In such case, the Purchaser hereby agrees to indemnify and
hold the applicable Seller harmless from and against any and all loss, cost,
expense, liability or damage (including reasonable attorneys fees) incurred by
such Seller arising out of Seller's conveyance in and out of such partnership
(or limited liability company) provided that such loss, cost, expense,
liability or damage (including reasonable attorneys fees) would not have been
suffered or incurred by such Seller if such Property had been conveyed directly
by such Seller to Purchaser.
4. Miscellaneous
A. Except as modified herein, each Purchase Agreement shall remain
unmodified and in full force and effect.
B. This Amendment may be executed in any number of counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date and year first above written.
[See Attached Signature Blocks]
<PAGE>
PURCHASER
ERP OPERATING LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Equity Residential Properties Trust,
a Maryland real estate investment
trust
By: /s/Linda A. Menich
------------------------------------
Name: Linda A. Menich
------------------------------------
Title: Assistant Vice President
------------------------------------
<PAGE>
Forest Ridge II Apartments
Arlington Ridge Limited Partnership, an Illinois
limited partnership
By: Arlington Ridge of Illinois, Inc., an
Illinois corporation, its general partner
By: /s/Alan Lieberman
-----------------------------------
Name: Alan Lieberman
-----------------------------------
Its: Authorized Agent
-----------------------------------
<PAGE>
Rosehill Pointe Apartments
Rosehill Partners, an Illinois joint venture
By: Balcor Realty Investors 84-Series II A Real
Estate Limited Partnership, a Maryland
partnership, a joint venture partner
By: Balcor Partners-84II, Inc., a Delaware
corporation, its general partner
By: /s/Alan Lieberman
-------------------------------
Name: Alan Lieberman
-------------------------------
Its: Authorized Agent
-------------------------------
<PAGE>
Steeplechase Apartments
Lexington, Kentucky
AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement") is entered into as of the
_31_day of May, 1996, by and between MID-AMERICA APARTMENTS, L.P., a Tennessee
limited partnership ("Purchaser"), and STEEPLECHASE PARTNERS LIMITED
PARTNERSHIP, an Illinois limited partnership ("Seller").
WITNESSETH:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to
sell at the price of Eleven Million Five Hundred Thousand And No/100 Dollars
($11,500,000.00) (the "Purchase Price"), that certain property commonly known
as Steeplechase Apartments, located in the City of Lexington, State of Kentucky
and legally described and depicted on Exhibit A attached hereto (the
"Property"). Included in the Purchase Price is all of the personal property set
forth in Exhibit B (the "Personal Property").
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as
follows:
(a) Upon the execution of this Agreement, the sum of One Hundred
Fifteen Thousand And No/100 Dollars ($115,000.00) (the "Earnest Money") to
be held in escrow by and in accordance with the provisions of the Escrow
Agreement ("Escrow Agreement") attached hereto as Exhibit C; and
(b) 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 11:00 a.m
Chicago time.
3. TITLE COMMITMENT AND SURVEY.
A. Purchaser shall obtain, as soon as is reasonably possible, at
Purchaser's sole cost and expense, a title commitment (the "Title Commitment")
for an owner's standard title insurance policy for the Property issued by
Lawyers Title Insurance Corporation (the "Title Insurer"). Seller shall
obtain, at Seller's sole cost and expense, an ALTA survey for the Property (the
"Survey") and shall deliver the same to Purchaser as soon as is reasonably
possible. For purposes of this Agreement, "Permitted Exceptions" shall mean:
(a) general real estate taxes and assessments, association assessments, special
district taxes and assessments and related charges not yet due and payable; (b)
matters caused by or through the actions of Purchaser or its agents,
contractors or representatives; and (c) those title exceptions deemed Permitted
Exceptions pursuant to Paragraph 3.B below. All other exceptions to title
shall be referred to as "Unpermitted Exceptions."
B. If the Title Commitment or the Survey discloses any exceptions
to title other than the Permitted Exceptions, Purchaser may give written notice
to Seller (the "Title Notice") of Purchaser's disapproval of any such
exceptions (a "Disapproved Title Exception") on or before the expiration of the
Inspection Period. Any title exceptions which are set forth in the Title
Commitment or on the Survey to which Purchaser does not object in accordance
with the immediately preceding sentence shall be deemed additional Permitted
<PAGE>
Exceptions. With regard to a Disapproved Title Exception for which Purchaser
gives Seller a Title Notice, Seller may but shall not have the obligation to
notify Purchaser within five (5) business days of receipt of the Title Notice
(the "Response Notice") whether Seller shall cause the Title Insurer to remove
or to insure over such Disapproved Title Exception from the Title Commitment
(together with a commitment to reissue the appropriate endorsement for the
benefit of Purchaser's financings and sale at no cost to Purchaser). Any such
Disapproved Title Exception which Seller elects to cause the Title Insurer to
remove or to insure over shall be additional Permitted Exceptions. If Seller
does not so notify Purchaser of its election to cause the Title Insurer to
remove or to insure over all Disapproved Title Exceptions in accordance with
this Paragraph 3.B, then unless Purchaser waives in writing its objection to
such Disapproved Title Exception on or before the expiration of the Inspection
Period and proceeds towards Closing, then this Agreement shall be terminated;
provided, however, if the Response Notice was delivered to Purchaser less than
three (3) business days prior to the expiration of the Inspection Period,
Purchaser shall have three (3) business days from receipt of the Response
Notice to notify Seller or Purchaser waives its objection to such Disapproved
Title Exception. If this Agreement is terminated pursuant to the terms of this
Paragraph 3.B, (i) Purchaser shall promptly deliver to Seller copies of all
studies, reports and other investigations obtained by Purchaser in connection
with its due diligence of the Property, (ii) the Earnest Money deposited by
Purchaser shall be immediately paid to Purchaser, together with any interest
earned thereon and (iii) neither Purchaser nor Seller shall have any right,
obligation or liability under this Agreement, except for Purchaser's obligation
to indemnify Seller and restore the Property, as more fully set forth in
Paragraph 7.
C. The Title Commitment and the Survey shall be conclusive evidence
of good title as therein shown as to all matters to be insured by the title
policy, subject only to the exceptions therein stated. On the Closing Date,
Title Insurer shall deliver to Purchaser a standard title policy in conformance
with the previously delivered Title Commitment, subject to only the Permitted
Exceptions, Disapproved Title Exceptions waived by Purchaser and Unpermitted
Exceptions waived by Purchaser (the "Title Policy"). Purchaser shall pay for
the costs of the Title Commitment and Title Policy, including, without
limitation, the costs of any endorsements to, or extended coverage on, the
Title Policy which shall be paid by Purchaser.
4. PAYMENT OF CLOSING COSTS. In addition to the costs set forth in
Paragraphs 3 above, Purchaser shall pay 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 and all other closing charges and
expenses of the Title Insurer in connection with this transaction.
Notwithstanding the foregoing to the contrary, Seller and Purchaser shall each
pay one-half (1/2) of all escrow fees in connection with the Closing.
5. CONDITION OF TITLE.
A. If after delivery of the Title Notice to Seller, but prior to
Closing, a date-down to the Title Commitment discloses an Unpermitted Exception
(other than the current financing secured by the Property, which will be
satisfied by Seller at Closing or assumed by Purchaser at Closing pursuant to
the terms hereof), Seller shall have thirty (30) days from the date of the
date-down to the Title Commitment, to (i) have any Unpermitted Exceptions
<PAGE>
which, in the aggregate, do not exceed $50,000.00 (a "Minor Unpermitted
Exception"), removed from the Title Commitment or to have the Title Insurer
commit to insure against loss or damage (together with the commitment to
reissue the appropriate endorsement for the benefit of Purchaser's financings
and sale at no cost to Purchaser) that may be occasioned by such Minor
Unpermitted Exceptions at no additional premium to Purchaser, or (ii) have the
right, but not the obligation, to have any Unpermitted Exceptions which, in the
aggregate, equals or exceeds $50,000.00, removed from the Title Commitment or
to have the Title Insurer commit to insure against loss or damage (together
with the commitment to reissue the appropriate endorsement for the benefit of
Purchaser's financings and sale at no cost to Purchaser) that may be occasioned
by such Unpermitted Exceptions at no additional premium to Purchaser. The time
of Closing shall be delayed, if necessary, to give effect to said
aforementioned time periods. If Seller fails to cure or have said Unpermitted
Exception removed or have the Title Insurer commit to insure as specified above
within said thirty (30) day period or if Seller elects not to exercise its
rights under (ii) in the preceding sentence of this Paragraph 5A, Purchaser may
terminate this Agreement upon notice to Seller within five (5) days after the
expiration of said thirty (30) day period; provided, however, and
notwithstanding anything contained herein to the contrary, if the Unpermitted
Exception which gives rise to Purchaser's right to terminate was recorded
against the Property as a result of the affirmative, willful action of Seller
(and not by any unrelated third party) with the intention to prevent the sale
of the Property in accordance with the terms hereof or if Seller is able to
bond over, cure or remove a Minor Unpermitted Exception for a cost not to
exceed $50,000 or the Title Insurer is willing to insure over a Minor
Unpermitted Exception for a cost not to exceed $50,000 in accordance with the
terms hereof and Seller fails to expend said funds in either case, then
Purchaser shall have the additional rights contained in Paragraph 11 herein.
Absent notice from Purchaser to Seller in accordance with the immediately
preceding sentence, Purchaser shall be deemed to have elected to terminate this
Agreement. If Purchaser terminates this Agreement in accordance with the terms
of this Paragraph 5A, 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.
B. Seller agrees to convey fee simple title to the Property to
Purchaser by special warranty deed ("Deed") in recordable form subject only to
the Permitted Exceptions, Disapproved Title Exceptions waived by Purchaser and
Unpermitted Exceptions waived by Purchaser.
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
A. Except as provided in any indemnity provisions of this
Agreement, Seller shall bear all risk of loss with respect to the Property up
to the earlier of the dates upon which either possession or title is
transferred to Purchaser in accordance with this Agreement. Notwithstanding
the foregoing, in the event of damage to the Property by fire or other casualty
prior to the Closing Date, repair of which would cost less than or equal to
$100,000.00 (as determined by Seller 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 Date shall be extended until completion of
such restoration) or to assign and transfer to Purchaser on the Closing Date
<PAGE>
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, including, without
limitation, proceeds of lost rental insurance for the period commencing with
the Closing Date through the period of Purchaser's repair, to the extent said
lost rental insurance covers Purchaser's loss in rental insurance and Seller
shall pay to Purchaser at the Closing the amount of Seller's 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 Date, repair of which would cost in excess of
$100,000.00 (as 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 five (5) 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 Purchaser's obligations to indemnify Seller
and restore the Property, as set forth more fully in Paragraph 7. In the event
that Purchaser does not exercise the option set forth in the preceding
sentence, the Closing shall take place on the Closing Date and Seller shall
assign and transfer to Purchaser on the Closing Date all of Seller's right,
title and interest in and to all insurance proceeds paid or payable to Seller
on account of the fire or casualty, including, without limitation, proceeds of
lost rental insurance for the period commencing with the Closing Date through
the period of Purchaser's repair, to the extent said lost rental insurance
covers Purchaser's loss in rental insurance and Seller shall pay to Purchaser
at the Closing the amount of Seller's insurance deductible.
B. 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) materially impair access to the Property; (ii) cause any material
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
impairs the use of the Property as it is currently being operated (hereinafter
collectively referred to as a "Material Event"), Purchaser may:
(a) 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 Purchaser's obligations to indemnify
Seller and restore the Property, as set forth more fully in Paragraph 7;
or
(b) 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 and give Purchaser the right of approval as to the amount of
any award.
<PAGE>
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 subparagraph (a) or subparagraph (b) of this
Paragraph 6B. 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 exercise its
rights under subparagraph (b).
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 and give Purchaser the right of
approval as to the amount of any award.
7. INSPECTION AND AS-IS CONDITION.
A. During the period commencing on May 8, 1996 and ending at 5:00
p.m. Chicago time on June 24, 1996 (said period being herein referred to as the
"Inspection Period"), 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 the leases located at the Property, and to
conduct and prepare such studies, tests and surveys as Purchaser may deem
reasonably 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 1994 and 1995 operating
statements.
B. All of the foregoing tests, investigations and studies to be
conducted under this Paragraph 7 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. Purchaser shall defend, indemnify and hold Seller and any
affiliate, parent of Seller, and all shareholders, employees, officers and
directors of Seller or Seller's affiliate or parent (hereinafter collectively
referred to as "Affiliate of Seller") harmless from any and all liability, cost
and expense (including without limitation, reasonable attorney's fees, court
costs and costs of appeal) suffered or incurred by Seller or Affiliates of
Seller for injury to persons or property caused by Purchaser's investigations
and inspection of the Property. Purchaser shall undertake its obligation to
defend set forth in the preceding sentence using attorneys selected by
Purchaser and reasonably acceptable to Seller.
C. If Purchaser is dissatisfied with the results of the tests,
studies or investigations performed or information received pursuant to this
Paragraph 7 or if Purchaser is not satisfied with the Title Commitment and the
Survey, 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 given by
Purchaser pursuant to this Paragraph 7 prior to the expiration of the
Inspection Period, then the right of Purchaser to terminate this Agreement
pursuant to this Paragraph 7 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,
<PAGE>
reports and other investigations obtained by Purchaser in connection with its
due diligence during the Inspection Period; (ii) the Earnest Money deposited by
Purchaser shall be immediately paid to Purchaser, together with any interest
earned thereon and (iii) neither Purchaser nor Seller shall have any right,
obligation or liability under this Agreement, except for Purchaser's obligation
to indemnify Seller and restore the Property, as more fully set forth in this
Paragraph 7. Notwithstanding anything contained herein to the contrary,
Purchaser's obligation to indemnify Seller and restore the Property, as more
fully set forth in this Paragraph 7, shall survive the Closing, the delivery of
the Deed and the termination of this Agreement.
D. Purchaser acknowledges and agrees that it will be purchasing the
Property based solely upon its inspections and investigations of the Property,
and that Purchaser will be purchasing the Property "AS IS" and "WITH ALL
FAULTS", based upon the condition of the Property as of the date of this
Agreement, wear and tear and loss by fire or other casualty or condemnation
excepted. Without limiting the foregoing, Purchaser acknowledges that, except
as may otherwise be specifically set forth elsewhere in this Agreement, neither
Seller nor its consultants, brokers or agents have made any other
representations or warranties of any kind upon which Purchaser is relying as to
any matters concerning the Property, including, but not limited to, the
condition of the land or any improvements comprising the Property, the
existence or non-existence of any hazardous materials or substances, economic
projections or market studies concerning the Property, any development rights,
taxes, bonds, covenants, conditions and restrictions affecting the Property,
water or water rights, topography, drainage, soil, subsoil of the Property, the
utilities serving the Property or any zoning, environmental or building laws,
rules or regulations affecting the Property. Seller makes no representation or
warranty that the Property complies with Title III of the Americans with
Disabilities Act or any fire code or building code. Except with respect to a
breach by Seller of any representation or warranty expressly contained herein,
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, and except with respect to a breach by Seller of any representation or
warranty expressly contained herein, Purchaser hereby agrees not to assert any
claims for contribution, cost recovery or otherwise, against 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. 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 ("CERCLA"), 42 U.S.C. e 9601 et seq.; the
Toxic Substance Control Act ("TSCA"), 15 U.S.C. Section 2601 et seq.; the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1802; the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C. Section 9601. et seq.; the
Clear Water Act ("CWA"), 33 U.S.C. Section 1251 et seq.; the Safe Drinking
Water Act, 42 U.S.C. Section 300f et seq.; the Clean Air Act ("CAA"), 42 U.S.C.
Section 7401 et seq.; and in any permits, licenses, approvals, plans, rules,
regulations or ordinances adopted, or other criteria and guidelines promulgated
pursuant to the preceding laws or other similar federal, state or local laws,
regulations, rules or ordinance now or hereafter in effect relating to
environmental matters (collectively the "Environmental Laws"); and (ii) any
other substances, constituents or wastes subject to any applicable federal,
<PAGE>
state or local law, regulator 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.
E. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Except as expressly set forth herein,
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 the representations
and warranties of Seller expressly contained herein and releases Seller from
any liability with respect to such historical information, except with respect
to a breach of a representation or warranty of Seller contained herein.
F. Seller has provided to Purchaser the following existing reports
prepared by Environmental Risk Consultants and H+GCL, Inc., dated August 15,
1990 and April 30, 1993, respectively (the "Existing Report"). Seller makes no
representation or warranty concerning the accuracy or completeness of the
Existing Report. Purchaser hereby releases Seller and the Affiliates of Seller
from any liability whatsoever with respect to the Existing Report, or,
including, without limitation, the matters set forth in the Existing Report,
and the accuracy and/or completeness of the Existing Report. Furthermore,
Purchaser acknowledges that it will be purchasing the Property with all faults
disclosed in the Existing Report.
8. CLOSING. The closing of this transaction (the "Closing") shall be on
July 24, 1996, at which time Seller shall deliver possession of the Property to
Purchaser. If the Closing occurs simultaneously with a closing under one or
more of the "Other Agreements" (as hereinafter defined), then the Closing shall
occur at the offices of Apperson, Crump, Duzane & Maxwell, 1755 Kirby Parkway,
Suite 100, Memphis Tennessee. Otherwise, the Closing shall occur by mail
through an escrow established at the Title Insurer. This transaction shall be
closed in accordance with the general provisions of the usual and customary
form of deed and money escrow for similar transactions in Kentucky, or at the
option of either party, the Closing shall be a "New York style" closing at
which the Purchaser shall wire the Purchase Price to Title Insurer on the
Closing Date and prior to the release of the Purchase Price to Seller,
Purchaser shall receive the Title Policy or marked up commitment dated the date
of the Closing Date. In the event of a New York style closing, Seller shall
deliver to Title Insurer any customary affidavit in connection with a New York
style closing. Purchaser shall pay all closing and escrow fees.
9. CLOSING DOCUMENTS.
A. On the Closing Date, Purchaser shall deliver to Seller (or to
Title Insurer if the Closing occurs through escrow) an executed closing
statement, the balance of the Purchase Price, an assumption of the documents
set forth in Paragraph 9.B.(iii) and (iv) and such other documents as may be
<PAGE>
reasonably required by the Title Insurer in order to consummate the transaction
as set forth in this Agreement.
B. On the Closing Date, Seller shall deliver to Purchaser (or to
Title Insurer if the Closing occurs through escrow) the following:
(i) the Deed (in the form of Exhibit E attached hereto as the same
may need to be modified to satisfy the Title Insurer), subject
to Permitted Exceptions, Disapproved Title Exceptions waived by
Purchaser and Unpermitted Exceptions waived by Purchaser;
(ii) a special warranty bill of sale conveying the Personal Property
(in the form of Exhibit F attached hereto);
(iii) assignment and assumption of intangible property (in the form
attached hereto as Exhibit G);
(iv) an assignment and assumption of leases and security deposits (in
the form attached hereto as Exhibit H);
(v) non-foreign affidavit (in the form of Exhibit I attached
hereto);
(vi) original, and/or copies of, leases affecting the Property in
Seller's possession;
(vii) all documents and instruments reasonably required by the Title
Insurer to issue the Title Policy;
(viii) possession of the Property to Purchaser;
(ix) an executed closing statement;
(x) notice to the tenants of the Property of the transfer of title
and assumption by Purchaser of the landlord's obligation under
the leases and the obligation to refund the security deposits
(in the form of Exhibit J); and
(xi) an updated rent roll.
10. DEFAULT BY PURCHASER. ALL EARNEST MONEY DEPOSITED INTO THE ESCROW IS
TO SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND
UNDERTAKINGS UNDER THIS AGREEMENT. IN THE EVENT OF A DEFAULT OF THE PURCHASER
UNDER THE PROVISIONS OF THIS AGREEMENT, SELLER SHALL RETAIN ALL OF THE EARNEST
MONEY AND THE INTEREST THEREON AS SELLER'S SOLE RIGHT TO DAMAGES OR ANY OTHER
REMEDY, EXCEPT FOR PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER PURSUANT TO
PARAGRAPH 7 HEREOF. THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES, IN
THE EVENT OF A DEFAULT BY PURCHASER, WOULD BE EXTREMELY DIFFICULT OR
IMPRACTICAL TO DETERMINE. THEREFORE, BY PLACING THEIR INITIALS BELOW, THE
PARTIES ACKNOWLEDGE THAT THE EARNEST MONEY HAS BEEN AGREED UPON, AFTER
NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES.
PURCHASER AND SELLER AGREE THAT A DEFAULT BY PURCHASER UNDER ANY OF THE
TERMS OR CONDITIONS OF ANY OF THOSE CERTAIN AGREEMENTS OF SALE LISTED ON
EXHIBIT O ATTACHED HERETO (THE "OTHER AGREEMENTS") SHALL BE DEEMED A DEFAULT OF
PURCHASER UNDER THIS AGREEMENT. IN ADDITION, PURCHASER AND SELLER AGREE THAT A
<PAGE>
DEFAULT BY PURCHASER UNDER THIS AGREEMENT SHALL BE DEEMED A DEFAULT UNDER EACH
OF THE OTHER AGREEMENTS. IF ANY TRANSACTION CONTEMPLATED BY THE OTHER
AGREEMENTS FAIL TO CLOSE FOR ANY REASON WHATSOEVER, PURCHASER SHALL NOT BE
ENTITLED TO ANY RIGHTS OF SETOFF UNDER THIS AGREEMENT IN CONNECTION WITH ANY
LIABILITY ARISING UNDER THE OTHER AGREEMENTS.
11. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF ALL EARNEST MONEY
TOGETHER WITH ANY INTEREST ACCRUED THEREON, AND THIS AGREEMENT SHALL THEN
BECOME NULL AND VOID AND OF NO EFFECT AND THE PARTIES SHALL HAVE NO FURTHER
LIABILITY TO EACH OTHER AT LAW OR IN EQUITY, EXCEPT FOR PURCHASER'S OBLIGATIONS
TO INDEMNIFY SELLER AND RESTORE THE PROPERTY AS SET FORTH MORE FULLY IN
PARAGRAPH 7 AND PURCHASER'S RIGHT TO RECEIVE FROM SELLER ITS ACTUAL, DOCUMENTED
THIRD PARTY EXPENSES INCURRED IN THE PERFORMANCE OF ITS DUE DILIGENCE HEREUNDER
AND THE PREPARATION OF THIS AGREEMENT, NOT TO EXCEED $115,000.00 IN THE
AGGREGATE. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF
SELLER'S DEFAULT IS (i) ITS (AND NOT AN UNRELATED THIRD PARTY'S) AFFIRMATIVE,
WILLFUL ACTION WHICH RESULTS IN THE RECORDING OF AN ENCUMBRANCE AGAINST THE
PROPERTY WITH THE INTENTION TO PREVENT THE SALE OF THE PROPERTY IN ACCORDANCE
WITH THE TERMS HEREOF AND WHICH GIVES RISE TO PURCHASER'S RIGHT TO TERMINATE
THIS AGREEMENT PURSUANT TO PARAGRAPH 5 HEREOF; (ii) ITS FAILURE TO EXPEND UP TO
$50,000 IF (a) SELLER IS ABLE TO BOND OVER, CURE OR REMOVE A MINOR UNPERMITTED
EXCEPTION FOR A COST NOT TO EXCEED $50,000 OR (b) THE TITLE INSURER IS WILLING
TO INSURE OVER A MINOR UNPERMITTED EXCEPTION FOR A COST NOT TO EXCEED $50,000
IN ACCORDANCE WITH THE TERMS HEREOF OR (iii) ITS REFUSAL TO DELIVER THE DEED,
THEN PURCHASER WILL BE ENTITLED TO SUE FOR SPECIFIC PERFORMANCE.
12. PRORATIONS.
A. Rents (exclusive of delinquent rents, but including prepaid
rents); refundable security deposits (which will be assigned to and assumed by
Purchaser and credited to Purchaser at Closing); water and other utility
charges; accrued but unpaid interest on the Note; fuels; prepaid operating
expenses; 1995 (if not paid) and 1996 real and personal property taxes; and
other similar items shall be adjusted ratably as of 12:01 a.m. on the Closing
Date. Assessments of record (other than ad valorem 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
ascertainable, the adjustments thereof shall be on the basis of the most recent
ascertainable data. The parties agree to re-prorate the proration items within
forty-five (45) days after the date of Closing, except as to delinquent rent
referred to in Paragraph 12B below.
B. All sums paid following the Closing Date by any tenant of the
Property who is indebted under a lease for any period prior to and including
the Closing Date after the payment to Purchaser of all then current basic rent
shall be deemed a "Post-Closing Receipt" until such time as all such
indebtedness is paid in full. Within ten (10) days following each receipt by
Purchaser of a Post-Closing Receipt, Purchaser shall pay such Post-Closing
Receipt to Seller. For a period of sixty days following Closing, Purchaser
shall send monthly collection notices to tenants residing at the Property owing
Post-Closing Receipts. Within 90 days after the Closing Date, Purchaser shall
deliver to Seller a reconciliation statement of Post-Closing Receipts through
the first 60 days after the Closing Date. Upon the delivery of the
Post-Closing Receipts reconciliation, Purchaser shall deliver to Seller any
Post-Closing Receipts owing to Seller and not previously delivered to Seller in
<PAGE>
accordance with the terms hereof. At Seller's expense, Seller retains the
right to conduct an audit, at reasonable times and upon reasonable notice, of
Purchaser's books and records to verify the accuracy of the Post-Closing
Receipts reconciliation statement and upon the verification of additional funds
owing to Seller, Purchaser shall pay to Seller said additional Post-Closing
Receipts. Seller shall deliver to Purchaser any sums received by Seller after
the Closing Date which relate to the period of time after the Closing Date,
along with an accounting identifying any such sums. Paragraph 12B of this
Agreement shall survive the Closing and the delivery and recording of the Deed.
13. RECORDING. This Agreement shall not be recorded and the act of
recording by Purchaser shall be an act of default hereunder by Purchaser and
subject to the provisions of Paragraph 10.
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.
15. BROKER. The parties hereto represent and warrant that no broker
commission or finder fee is due and payable in connection with this transaction
other than to: (i) Insignia Management & Investment Co. ("Insignia"); and (ii)
Memphis Commercial Group ("MC"), both to be paid by Seller. Seller's
commissions to Insignia and MC shall only be payable out of the proceeds of
the sale of the Property in the event the transaction set forth herein closes.
Purchaser hereby agrees to indemnify, defend and hold Seller harmless from any
claim whatsoever (including without limitation, reasonable attorney's fees,
court costs and costs of appeal) from anyone claiming by or through Purchaser
for any fee, commission or compensation on account of this Agreement, its
negotiation or the sale hereby contemplated other than claims of Insignia (or
anyone claiming by, through or under Insignia). Seller hereby agrees to
indemnify, defend and hold Purchaser harmless from any claim whatsoever
(including without limitation, reasonable attorney's fees, court costs and
costs of appeal) from anyone claiming by or through Seller for any fee,
commission or compensation on account of this Agreement, its negotiation or the
sale hereby contemplated other than claims of MC (or anyone claiming by,
through or under MC). The indemnifying party shall undertake its obligations
set forth in this Paragraph 15 using attorneys selected by the indemnifying
party and reasonably acceptable to the indemnified party. The provisions of
this Paragraph 15 will survive the Closing and delivery of the Deed.
16. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
A. Any reference herein to Seller's knowledge, representation,
warranty or notice of any matter or thing shall only mean such knowledge or
notice that has actually been received by Phillip Schechter or Gregg Handrich
(asset manager of the Property and who is in a position to have a basis for
having knowledge with respect to the Property) (hereinafter collectively
referred to as the "Seller's Representatives"), and any representation or
warranty of the Seller is based upon those matters of which the Seller's
Representatives have actual knowledge. Any knowledge or notice given, had or
received by any of Seller's agents, servants or employees (other than Seller's
Representatives) 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.
<PAGE>
B. Subject to the limitations set forth in Paragraph A of this
Paragraph 16, Seller hereby makes the following representations and warranties,
which representations and warranties are made to the Seller's knowledge and
which shall, subject to Paragraph 16C, be remade at Closing:
(i) Except for the matter disclosed on Exhibit N, Seller has no
knowledge of any pending or threatened litigation, claim, cause of action
or administrative proceeding concerning the Property;
(ii) The rent roll attached hereto as Exhibit L and which shall be
updated as of the Closing Date accurately sets forth the number of tenants
then in possession of the Property as of the date of said rent roll,
contains an accurate summary of the rental obligations, the expiration
date, the security deposit and the delinquencies of each such tenancy as
of the date of said rent roll;
(iii) That the tenant leases evidencing such tenancies referred to in
the rent roll are in full force and effect and have not been amended or
modified except as set forth in the rent roll or in the leases made
available to Purchaser for Purchaser's review;
(iv) Seller has received no notice of any material default on the
part of Seller under any said tenant leases;
(v) Except as set forth in the rent roll, no tenant under the leases
as of the date of the rent roll is in material default of the payment of
rent;
(vi) That Seller will not collect any of the rent or other sums
arising or accruing under any of the said tenant leases in advance of the
time when they come due except for the benefit of Purchaser (and Seller
retains ownership of all accounts receivable for rents due for periods of
time prior to the Closing);
(viii) The Seller has not given or suffered any assignment, pledge or
encumbrance with respect to any of the tenant leases or its interests
thereunder except as additional collateral for the existing loan secured
by the Property;
(ix) Pending the Closing, Seller will not without the prior consent
of Purchaser convey all or any portion of the Property;
(x) Except as shown on Exhibit M, there are no service contracts
which in any manner affect or otherwise relate to the Property or the
tenant leases;
(xi) Seller has full right, power and authority to enter into this
Agreement and consummate the transaction contemplated hereby;
(xii) Seller and all persons or entities having beneficial interests
in the Property are "United States Persons," as defined in
Section 1445(f)(3) and Section 7701(g) of the Internal Revenue Code of
1986, as amended, and the purchase of the Property by Purchaser as
contemplated herein will not be subject to the withholding requirements of
Section 1445(a) of the Code;
<PAGE>
(xiii) Except as set forth in the Existing Report, Seller has not
received any notice from any governmental authority having jurisdiction
over the Property of any uncured violation of any Environmental Law with
respect to the Property. Seller has not commissioned any environmental
report with respect to the Property other than the Existing Report; and
(xiv) Seller has not received written notice from any third party of
any structural defects that would render the Property unusable as an
apartment complex.
C. If at any time after the execution of this Agreement, either
Purchaser or Seller become aware of information which makes a representation
and warranty contained in this Agreement untrue in any material respect, said
party shall promptly disclose said information to the other party hereto.
Provided the party making the representation or warranty did not take any
deliberate actions to cause the representation or warranty in question to be or
become untrue in any material respect, said party shall not be in default under
this Agreement and the sole remedy of the other party shall be to terminate
this Agreement. Notwithstanding anything contained herein to the contrary, if
the status of any of the tenancies changes from the date of the rent roll
attached hereto and the date of the rent roll delivered at Closing, provided
the change in status is not caused by a breach of Seller's covenants contained
in Paragraph 16D herein, then Purchaser shall not have the right to terminate
this Agreement or make any claim for a breach of a representation or warranty
hereunder involving the rent roll or tenancies thereunder. Purchaser and
Seller are prohibited from making any claims against the other party hereto
after the Closing with respect to any breaches of the other party's
representations and warranties contained in this Agreement that the claiming
party has actual knowledge of prior to the Closing. The parties agree that the
representations contained herein shall survive Closing for a period of sixty
(60) days (i.e., the claiming party shall have no right to make any claims
against the other party for a breach of a representation or warranty after the
expiration of sixty (60) days immediately following Closing).
D. Seller covenants to operate and manage the Property in the same
manner that it has managed, maintained and operated the Property during the
period of Seller's ownership, subject to reasonable wear and tear and casualty.
17. LIMITATION OF LIABILITY. Neither any of Seller's respective partners
(whether general partners, limited partners or any level of sub-partner) nor
any beneficiaries, shareholders, officers, agents or employees, heirs,
successors or assigns shall have any personal liability of any kind or nature
for or by reason of any matter or thing whatsoever under, in connection with,
arising out of or in any way related to this Agreement and the transactions
contemplated herein, and Purchaser hereby waives for itself and anyone who may
claim by, through or under Purchaser any and all rights to sue or recover on
account of any such alleged personal liability. Notwithstanding anything
contained herein to the contrary, Purchaser hereby agrees that the maximum
aggregate liability of Seller, 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 shall
be $115,000.00; provided, however, in no way shall this sentence or the
following sentence preclude Purchaser's right of specific performance contained
in Paragraph 11 herein. 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. Seller further agrees not to
distribute $115,000.00 of the proceeds of the Purchase Price to its partners
<PAGE>
for the longer of (i) sixty (60) days after the Closing and (ii) final
resolution of any claims by Purchaser and asserted in writing against Seller
prior to the expiration of the sixtieth (60th) day 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.
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, facsimile delivered or given or made
by overnight courier such as Federal Express or made by United States
registered or certified mail addressed as follows:
TO SELLER: c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attention: Ilona Adams
with copies to: The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attention: Alan Lieberman
(847) 317-4360
(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: c/o Mid-America Apartment Communities, Inc.
6584 Poplar Avenue
Suite 340
Memphis, Tennessee 38138
Attention: Donald Aldridge
(901) 682-6600
(901) 682-6667 (FAX)
and one copy to: Apperson, Crump, Duzane & Maxwell
1755 Kirby Parkway
Suite 100
Memphis, Tennessee 38120
Attention: John Maxwell
(901) 756-6300
(901) 757-1296 (FAX)
<PAGE>
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be
deemed to be delivered or made on the next business day if sent by overnight
courier, on the same day if sent by facsimile transmission prior to 5:00 p.m.
Chicago time (provided, however, if the notice or demand is not accepted by the
recipient's fax machine after 10 attempts by the sender to fax the notice or
demand and the sender advises the recipient by phone of the specific nature of
the notice or demand prior to 5:00 p.m. Chicago time on the same day the sender
is attempting to send its notice or demand by facsimile and if the sender sends
the notice or demand to the recipient by overnight courier to be delivered on
the first business day following the day that the notice or demand was
attempted to be given by fax, then the notice or demand shall be deemed given
on the date the sender attempted to send the facsimile) or on the 4th business
day after the same is deposited in the United States Mail as registered or
certified matter, addressed as above provided, with postage thereon fully
prepaid. Any such notice, demand or document not given, delivered or made by
registered or certified mail or by overnight courier as aforesaid shall be
deemed to be given, delivered or made upon receipt of the same by the party to
whom the same is to be given, delivered or made. Copies of all notices shall
be served upon the Escrow Agent.
20. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute
two (2) copies of this Agreement and three (3) copies of the Escrow Agreement
and forward them to Seller for execution, accompanied with the Earnest Money
payable to the Escrow Agent set forth in the Escrow Agreement. Seller will
forward one (1) copy of the executed Agreement to Purchaser and will forward
the following to the Escrow Agent:
(1) Purchaser's check for the Earnest Money;
(2) One (1) fully executed copy of this Agreement; and
(3) Three (3) copies of the Escrow Agreement signed by the
parties with a direction to execute two (2) copies of the
Escrow Agreement and deliver a fully executed copy to each
of the Purchaser and the Seller.
21. GOVERNING LAW. The provisions of this Agreement shall be governed by
the laws of the State of Kentucky, except that with respect to the retainage of
the Earnest Money as liquidated damages, the laws of the State of Virginia
shall apply.
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. SERVICE CONTRACTS. Attached hereto as Exhibit M is a list of service
contracts affecting the Property. Seller shall assign the service contracts to
<PAGE>
Purchaser at Closing, and Purchaser shall assume responsibility and obligations
under the service contracts. Seller agrees not to enter into any other service
contracts affecting the Property. Seller agrees to terminate any and all
management agreements affecting the Property as of the Closing Date.
26. AUDIT. Seller will make available to Purchaser's representatives
such books, accounts and records necessary for Purchaser to conduct an audit of
the Property's preceding fiscal year. This audit will be conducted solely at
Purchaser's expense for the purpose of satisfying its requirements as a
publicly held entity. Seller agrees to execute and deliver a disclosure letter
prepared by the auditors of Purchaser in the form attached hereto as Exhibit K.
The terms of this Paragraph 26 shall survive the Closing for a period of one
(1) year after the Closing Date.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the 31 day of May, 1996.
PURCHASER:
MID-AMERICA APARTMENTS, L.P., a Tennessee limited
partnership
By:MID-AMERICA APARTMENT COMMUNITIES, INC., a
Tennessee corporation, its general partner
By: /s/Simon R.C. Wadsworth
-----------------------------------
Simon R.C. Wadsworth,
Executive Vice President
SELLER:
STEEPLECHASE PARTNERS LIMITED PARTNERSHIP,
an Illinois limited partnership
By:Steeplechase Partners, Inc.,
an Illinois corporation,
its general partner
By: /s/Phillip Schechter
-----------------------------------
Name: Phillip Schechter
-----------------------------------
Its: Authorized Agent
-----------------------------------
<PAGE>
_________________ of Insignia Management & Investment Co. ("Insignia") 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 March 15, 1996 between Seller and Insignia (the "Listing Agreement").
Insignia acknowledges that it is paying a portion of such commission in the
amount of .25% of the Purchase Price to Memphis Commercial Group. Insignia
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. Insignia agrees to deliver a receipt to the Seller at the Closing for
the fee or commission due Insignia and a release stating that no other fees or
commissions are due to it from Seller or Purchaser.
Insignia Management & Investment Co.
By:
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
<PAGE>
_________________ of Memphis Commercial Group ("MC") executed this Agreement in
its capacity as a real estate broker and acknowledges that the fee or
commission due it from Purchaser as a result of the transaction described in
this Agreement is .25% of the Purchase Price. MC acknowledges that it will be
receiving such commission from Insignia Management & Investment Co.. MC 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. MC
agrees to deliver a receipt to the Seller at the Closing for the fee or
commission due MC and a release stating that no other fees or commissions are
due to it from Seller or Purchaser.
MEMPHIS COMMERCIAL GROUP
By: /s/Don Aldridge
-------------------------------
Name: Don Aldridge
-------------------------------
Title: President
-------------------------------
<PAGE>
Exhibits
A - Legal
B - Personal Property
C - Escrow Agreement
D - Intentionally Deleted
E - Special Warranty Deed
F - Special Warranty Bill of Sale
G - Assignment and Assumption of Intangible Property
H - Assignment and Assumption of Leases and Security Deposits
I - Non-Foreign Affidavit (FIRPTA Statement)
J - Notice to Tenants
K - Auditor's Disclosure Letter
L - Rent Roll
M - List of Service Contracts
N - Litigation
O - Other Agreements
<PAGE>
FIRST AMENDMENT TO
AGREEMENT OF SALE AND ESCROW AGREEMENT
THIS FIRST AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT (this
"Amendment") is entered into as of this 6th day of June, 1996 by and between
STEEPLECHASE PARTNERS LIMITED PARTNERSHIP, an Illinois limited partnership
("Seller") and MID-AMERICA APARTMENTS, L.P., a Tennessee limited partnership
("Purchaser").
RECITALS:
WHEREAS, Seller and Purchaser have entered into an Agreement of Sale dated
May 31, 1996 (the "Original Agreement") for that certain property commonly know
as the Steeplechase Apartments, Lexington, Kentucky and more particularly
described therein (the "Property"). All capitalized terms which are used but
not defined herein shall have the meanings ascribed to such terms in the
Original Agreement;
WHEREAS, in accordance with the Original Agreement, Seller, Purchaser and
Title Insurer entered into an Escrow Agreement dated May 31, 1996 (the "Escrow
Agreement"); and
WHEREAS, the parties desire to amend the Original Agreement and the Escrow
Agreement on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of Ten and No/100 Dollars ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:
AGREEMENT:
1. Closing Date. The references to "July 24, 1996" in Section 8 of the
Original Agreement and Section 2 of the Escrow Agreement are hereby deleted and
"July 31, 1996" is hereby substituted in their places.
2. Rent Roll. The Original Agreement is hereby amended by adding to
Exhibit L the delinquency report attached hereto as Exhibit L-1.
3. Service Contracts. The Original Agreement is hereby amended by
deleting Exhibit M in its entirety and substituting Exhibit M-1 attached hereto
in its place.
4. Other Agreements. The Original Agreement is hereby amended by adding
to Exhibit O the following: "6. Agreement of Sale by and between Purchaser
and Balcor Pension Investors-VI, an Illinois limited partnership, dated as of
the date hereof".
5. Litigation. The Original Agreement is hereby amended by deleting
"None" from Exhibit N and substituting the following in its place:
"1. Lawsuit by Sandra Pate against Seller and The Balcor Company
filed in the Fayette County Circuit Court, Civil Branch, 3rd Division as Case
No. 96-CI-1742. Plaintiff slipped and fell down stairs at the Property. This
claim is fully covered by Seller's existing insurance."
<PAGE>
6. Modification. Except as amended and modified hereby, the Original
Agreement and the Escrow Agreement shall be and remain unchanged and in full
force and effect in accordance with their terms and they are hereby ratified
and confirmed. In the event of any inconsistencies between the terms of the
Original Agreement or the Escrow Agreement and this Amendment, the terms of
this Amendment shall control.
7. Counterparts. This Amendment may be executed in multiple
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same agreement.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amendment as of the day
and year first written above.
SELLER:
STEEPLECHASE PARTNERS LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Steeplechase Partners, Inc., an
Illinois corporation, its general
partner
By: /s/Phillip Schechter
------------------------------
Name: Phillip Schechter
------------------------------
Its: Authorized Agent
------------------------------
PURCHASER:
MID-AMERICA APARTMENTS, L.P., a Tennessee
limited partnership
By: Mid-America Apartment Communities,
Inc., a Tennessee corporation, its
general partner
By: /s/Simon R.C. Wadsworth
------------------------------
Name: Simon R.C. Wadsworth
------------------------------
Title: Executive Vice President
------------------------------
<PAGE>
