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) September 30, 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
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
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Willow Bend Lake Apartments
In 1984, the Partnership acquired the Willow Bend Lake Apartments, East Baton
Rouge Parish, Louisiana, utilizing approximately $5,769,335 of offering
proceeds. The property was acquired subject to first mortgage financing of
$10,655,000. In 1987, the mortgage loan was refinanced with a new mortgage
loan from a third party of $8,000,000. In repaying this prior loan, the
Partnership utilized $2,659,000 of cash reserves which had been borrowed from
the General Partner. The mortgage loan was refinanced again in 1993 with a new
$9,975,000 mortgage loan from a third party. The Partnership received excess
refinancing proceeds of approximately $2,007,000.
On October 14, 1996, the Partnership contracted to sell the property for a sale
price of $14,350,000 to an unaffiliated party, New Plan Realty Trust, a
Massachusetts business trust. The purchaser has deposited $250,000 into an
escrow account as earnest money. The remaining portion of the sale price will
be payable in cash at closing, scheduled for October 30, 1996. From the
proceeds of the sale, the Partnership will pay the outstanding balance of the
first mortgage loan which is expected to be approximately $9,737,000 at closing
and $215,250 to an unaffiliated party as a brokerage commission. An affiliate
of the third party providing property management services for the property will
receive a fee for services rendered in connection with the sale of the property
of up to $107,625. The Partnership will receive the remaining proceeds of
approximately $4,290,000, less closing costs. Of such proceeds, an amount not
to exceed $250,000 will be retained by the Partnership and will not be
available for use or distribution until 120 days after 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 Partnership for actual expenses incurred in connection with
the sale.
Affiliates of the General Partner simultaneously contracted to sell two other
properties to the purchaser and have sold or entered into contracts to sell
three additional properties to the purchaser in 1996.
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 5. OTHER EVENTS
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a) Chestnut Ridge Apartments, Phase I
As previously reported, on September 6, 1996, the Partnership contracted to
sell Chestnut Ridge Apartments, Phase I, Fort Worth, Texas (the "Property"), to
an unaffiliated party, TGM Realty Corp. #5, a Delaware corporation, for a sale
price of $5,521,500. In addition, an affiliate of the General Partner (the
"Affiliate") contracted to sell Chestnut Ridge Apartments, Phase II ("Phase
II"), located adjacent to the Property, to the purchaser. The sale of the
Property closed on September 30, 1996. The sale of Phase II also closed on
September 30, 1996.
Pursuant to a letter agreement among the Partnership, Affiliate and purchaser,
the purchaser requested the City of Fort Worth (the "City") to inspect the
Property and Phase II and to issue new certificates of occupancy. As a result
of the inspection, the purchaser received a $8,100 reduction of the purchase
price of the Property to reimburse the purchaser for the costs of certain
repairs. From the proceeds of the sale, the Partnership paid the outstanding
balance of the first mortgage loan of $3,629,160, a prepayment penalty of
$181,458, $110,268 to an unaffiliated party as a brokerage commission, $55,215
to an affiliate of the third party providing property management services for
the Property for services rendered in connection with the sale of the Property
and $27,227 in closing costs. The Partnership received the remaining
$1,510,072 of sale proceeds.
b) Hunter's Glen Apartments
As previously reported, on June 30, 1996, the Partnership contracted to sell
Hunter's Glen Apartments, St. Louis County, Missouri, for a sale price of
$9,100,000 to an unaffiliated party, ERP Operating Limited Partnership, an
Illinois limited partnership. The sale closed on September 30, 1996. From the
proceeds of the sale, the Partnership repaid the outstanding balance of the
first mortgage loan of $4,541,552, a prepayment penalty of $90,831, $159,250 to
an unaffiliated party as a brokerage commission, $91,000 to an affiliate of the
third party providing property management services for the property for
services rendered in connection with the sale of the property and $19,965 in
closing costs. The Partnership received the remaining $4,197,402 of sale
proceeds.
c) Marbrisa Apartments
As previously reported, on July 15, 1996, the Partnership contracted to sell
Marbrisa Apartments, Hillsborough County, Florida, to an unaffiliated party,
ERP Operating Limited Partnership, an Illinois limited partnership. The sale
price is $7,800,000. The closing of the sale was extended and occurred on
October 11, 1996. The purchaser did not assume the existing first mortgage
loan as previously expected. The Partnership will use sale proceeds of
$5,361,230 to repay the loan. In addition, from the proceeds of the sale, the
Partnership paid $175,500 to a third party as a brokerage commission, $78,000
to an affiliate of the third party providing property management services as a
fee for services rendered in connection with the sale of the property and
$71,861 in closing costs. The Partnership will receive the remaining sale
proceeds of $2,113,409.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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(A) FINANCIAL STATEMENTS AND EXHIBITS:
None
(B) PRO FORMA FINANCIAL INFORMATION:
None
(C) EXHIBITS:
(2) Agreement of Sale and attachment thereto relating to the sale of
Willow Bend Lake Apartments, East Baton Rouge Parish, Louisiana.
(99) (a) Letter Agreement relating to the sale of Chestnut Ridge
Apartments, Phase I, Fort Worth, Texas.
(b) Letter Agreements relating to the sale of Marbrisa
Apartments, Tampa, Florida.
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
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Jerry M. Ogle, Vice President
and Secretary
Dated: October 28, 1996
<PAGE>
AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement") is entered into as of this
day of October, 1996, by and between NEW PLAN REALTY TRUST, a Massachusetts
business trust ("Purchaser") and WILLOW BEND LAKE 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 Fourteen Million Three Hundred Fifty Thousand and No/100
Dollars ($14,350,000.00) ("Purchase Price"), that certain property ("Property")
in Baton Rouge, Louisiana more particularly described on Exhibit A attached
hereto, which Property is known as Willow Bend Lake Apartments, including all
easements, tenements, hereditaments, rights, licenses, privileges and
appurtenances, whether or not of record, in any way belonging or relating
thereto and all mineral, oil, gas and other hydrocarbon substances on or under
the land and all development, air, water and other rights in any way belonging
or relating to the land or the improvements thereon, all right, title and
interest in and to any streets, roads, alleys or other public ways adjoining or
serving the land, including any land lying in the bed of any street, road,
alley or other public way, open or proposed, and any strips, gores, culverts
and rights-of-way adjoining or serving the land (including all riparian and
other rights in and to submerged lands). Included in the Purchase Price is all
of the personal property owned by Seller and used in connection with or located
on the Property, including but not limited to all lease files and copies of all
books, records and other files which are used in connection with the ownership
or operation of the Property and the personal property which is set forth on
Exhibit B, which shall be transferred to Purchaser at Closing (as hereinafter
defined) by a Bill of Sale.
2. PURCHASE PRICE. The Purchase Price shall be paid as follows:
a. Upon the execution of this Agreement, the sum of Two Hundred
Fifty Thousand and No/100 Dollars ($250,000.00) ("Deposit") to be held in
escrow by the Escrow Agent (as that term is defined in the Escrow Agreement),
by and in accordance with the provisions of the Escrow Agreement ("Escrow
Agreement") attached hereto as Exhibit C;
b. On the Closing Date (as hereinafter defined), $14,350,000.00
(inclusive of the Deposit) adjusted in accordance with the prorations by
federally wired "immediately available" funds delivered to the Title Insurer
(as hereinafter defined) no later than 1:00 P.M. Central Time on the Closing
Date. If the funds are not received by the Title Insurer by 1:00 P.M. Central
Time, then $2,870.00 shall be added to the cash due at Closing. Seller agrees
that Seller shall deliver a draft closing statement to Purchaser one (1) day
prior to the Closing Date.
3. TITLE COMMITMENT AND SURVEY.
a. Attached hereto as Exhibit D is a title commitment dated May 24,
1996 ("Title Commitment") for an owner's standard coverage title insurance
policy issued by Baton Rouge Title Co., Inc., as agent for Commonwealth Title
Insurance Company ("Title Insurer"). The owner's Title Policy (as hereinafter
defined) issued at Closing will be in the aggregate amount of the Purchase
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Price and the purchase prices for the Other Property (as hereinafter defined),
if any, and shall insure the real property described in Exhibit A subject only
to real estate taxes not yet due and payable, and the special title exceptions
set forth in Schedule B-Section 2, Numbers 2 through 8 inclusive of the Title
Commitment ("Permitted Exceptions"). Seller will provide Purchaser with an
updated Title Commitment within ten (10) days from the date hereof. Purchaser
and Seller acknowledge and agree that a single policy of title insurance (the
"Title Policy") shall be issued for the Property and the two (2) other
properties commonly known as Forestwood Apartments and Sherwood Acres I and II
Apartments, each located in East Baton Rouge Parish, Louisiana, which may be
acquired by Purchaser simultaneously with the acquisition of the Property (the
"Other Property"). The Title Commitment shall be conclusive evidence of good
title as therein shown as to all matters insured by the policy, subject only to
the exceptions therein stated. On the Closing Date, Seller shall cause the
Title Insurer to issue the Title Policy or a "marked up" commitment in favor of
Purchaser containing only the Permitted Exceptions and the "extended coverage",
and the special endorsements required by Purchaser. Seller shall pay the costs
of the Title Policy and the costs of "extended coverage" and the special
endorsements which Purchaser requires.
b. Purchaser acknowledges receipt of a survey ("Survey") of the
Property prepared by Evans-Graves Engineers, Inc. dated August 12, 1996.
Within twenty-one (21) days after the date of this Agreement, Purchaser will
provide Seller with an update of the survey ("Updated Survey") certified to the
Purchaser. However, if Purchaser requires any additional survey work after the
Updated Survey, Purchaser shall pay for the cost of such additional work.
4. CONDITION OF TITLE/CONVEYANCE. Seller agrees to convey fee simple
title to the Property by Act of Cash Sale ("Sale") in self-proving form subject
only to the Permitted Exceptions. The Sale will be made by Seller with no
warranty of title except for claims arising by, through or under Seller. If
Seller is unable to convey title to the Property subject only to the Permitted
Exceptions because of the existence of an additional title exception
("Unpermitted Exception"), then Seller shall make all reasonable efforts to
remove the Unpermitted Exception and shall remove any Unpermitted Exception
caused by Seller subsequent to May 24, 1996 with the intention to prevent the
consummation of this Agreement. If Seller is unable to remove the Unpermitted
Exception, then Seller shall so notify Purchaser and Purchaser can elect to
take title to the Property subject to the Unpermitted Exception or terminate
this Agreement. If Purchaser elects to terminate this Agreement, then the
Deposit plus all accrued interest shall be delivered to the Purchaser and,
subject to the survival provisions of Paragraph 18 herein, neither party shall
have any further liability hereunder. Notwithstanding the aforesaid, Seller
shall be obligated to remove all liens which are of a definite or ascertainable
amount.
5. PAYMENT OF CLOSING COSTS. Purchaser and Seller shall equally share
the costs of the recording of the Sale and any other documents delivered in
connection with this Agreement, but Seller shall pay for the cost of recording
any releases in connection with the existing loan encumbering the Property.
<PAGE>
6. DAMAGE, CASUALTY AND CONDEMNATION.
a. If the Property suffers damage as a result of any casualty prior
to the Closing Date and can be repaired or restored in the case of real
property for $200,000.00 or less, or in the case of Personal Property, for
$10,000.00 or less, Purchaser shall proceed with the Closing and accept the
Property in its damaged condition together with an assignment from Seller of
all insurance proceeds and receive a credit at Closing in the amount of the
deductible. In such event, Purchaser shall have the right to negotiate the
settlement of the insurance claim with the insurance carrier. Seller shall
execute whatever documents are reasonably required in order to enable Purchaser
to conduct those negotiations. If the cost of repair or restoration exceeds
those amounts, then Purchaser, upon notice to Seller served within twenty (20)
days of receipt of notice from Seller of the casualty, can elect to either: (a)
terminate this Agreement or (b) accept the Property in its damaged condition
together with an assignment from Seller of all insurance proceeds and receive a
credit at Closing in the amount of the deductible. In such event, Purchaser
shall have the right to negotiate the settlement of the insurance claim with
the insurance carrier and Seller shall execute whatever documents are
reasonably required in order to enable Purchaser to conduct those negotiations.
If Purchaser has not given its notice prior to the Closing Date because the
twenty (20) day period has not expired, then the Closing Date shall be extended
until one (1) business day after Purchaser is required to give its notice.
b. If condemnation proceedings ("Proceedings") are instituted
against the Property, or if Seller receives notice that Proceedings are going
to be commenced, then Purchaser can elect to either take the Property subject
to the Proceedings and receive from Seller an assignment of Seller's interest
in the Proceedings and any award pursuant to the Proceedings or terminate this
Agreement. If Purchaser elects to terminate this Agreement, it shall be by
notice to the Seller within five (5) days after Seller notifies Purchaser of
the Proceedings.
c. If the Agreement is terminated pursuant to this Paragraph, then
the Deposit plus all accrued interest shall be delivered to the Purchaser.
7. AS-IS CONDITION.
a. Seller acquired title to the Property by virtue of a
deed-in-lieu of foreclosure, and therefore, except as may otherwise be
specifically set forth elsewhere in this Agreement, Seller cannot make any
representations as to the condition of the Property upon which Purchaser can
rely. Any information which Seller has as to the leases is based solely upon
information which Seller obtained subsequent to its acquisition of the
Property. Purchaser is not relying on Seller having made any inquiry as to the
condition of the Property or the leases. Except as may otherwise be
specifically set forth elsewhere in this Agreement, Purchaser acknowledges and
agrees that it will be purchasing the Property based solely upon its inspection
and investigations of the Property and that Purchaser will be purchasing the
Property "AS IS" and "WITH ALL FAULTS" based upon the condition of the Property
as of the date of this Agreement, subject to reasonable wear and tear and loss
(subject to Paragraph 6) by fire or other casualty or condemnation from the
date of this Agreement until the Closing Date. Except as expressly set forth
herein, Purchaser expressly waives the warranty of fitness and the guarantee
against hidden or latent vices (defects in the Property sold which render it
<PAGE>
useless or render its use so inconvenient or imperfect that Purchaser would not
have purchased the Property had it known of the vice) provided by law in
Louisiana, more specifically, that warranty imposed by Louisiana Civil Code
2520 et seq. with respect to Seller's warranty against latent or hidden defects
of the Property sold, not even for a return of the Purchase Price. Except as
expressly set forth herein, Purchaser forfeits the right to avoid the sale or
reduce the Purchase Price on account of a hidden or latent vice in the
Property. This provision has been specifically called to the attention of
Purchaser and fully explained to Purchaser, and Purchaser acknowledges that it
has read and understands this waiver of all such express or implied warranties
and except as expressly set forth herein, accepts the Property without any
express or implied warranties. Without limiting the foregoing, Purchaser
acknowledges that, except as may otherwise be specifically set forth elsewhere
in this Agreement, neither Seller nor its consultants, brokers or agents have
made any other representations or warranties of any kind upon which Purchaser
is relying as to any matters concerning the Property, including, but not
limited to, the condition of the land or any improvements, the existence or
nonexistence of asbestos, lead in water, lead in paint, radon, underground or
above ground storage tanks, petroleum, toxic waste or any Hazardous Materials
or Hazardous Substances (as such terms are defined below), the tenants of the
Property or the leases affecting the Property, economic projections or market
studies concerning the Property, any development rights, taxes, bonds,
covenants, conditions and restrictions affecting the Property, water or water
rights, topography, drainage, soil, subsoil of the Property, the utilities
serving the Property or any zoning, environmental or building laws, rules or
regulations affecting the Property. Seller makes no representation that the
Property complies with Title III of the Americans With Disabilities Act or,
except as may be specifically set forth elsewhere in this Agreement, any fire
codes or building codes. Except for the breach of the representation or
warranty set forth in Paragraph 19b.ix., Purchaser hereby releases Seller from
any and all liability in connection with any claims which Purchaser may have
against Seller, and except for the breach of the representation or warranty set
forth in Paragraph 19b.ix., Purchaser hereby agrees not to assert any claims,
for damage, loss, compensation, contribution, cost recovery or otherwise,
against Seller, whether in tort, contract, or otherwise, relating directly or
indirectly to the existence of asbestos or Hazardous Materials or Hazardous
Substances on, or environmental conditions of, the Property, or arising under
the Environmental Laws (as such term is hereinafter defined), or relating in
any way to the quality of the indoor or outdoor environment at the Property.
This release shall survive the Closing. As used herein, the term "Hazardous
Materials" or "Hazardous Substances" means (i) hazardous wastes, hazardous
materials, hazardous substances, hazardous constituents, toxic substances or
related materials, whether solids, liquids or gases, including but not limited
to substances defined as "hazardous wastes," "hazardous materials," "hazardous
substances," "toxic substances," "pollutants," "contaminants," "radioactive
materials," or other similar designations in, or otherwise subject to
regulation under, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA"), 42 U.S.C. Section 9601 et seq.;
the Toxic Substance Control Act ("TSCA"), 15 U.S.C. Section 2601 et seq.; the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1802; the Emergency
Planning and Community Right-to-Know Act, 42 U.S.C. Section 1101 et seq.; the
Atomic Energy Act ("AEA"), 42 U.S.C. Section 2011 et seq.; the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C. Section 9601, et seq.; the
Clean Water Act ("CWA"), 33 U.S.C. Section 1251 et seq.; the Safe Drinking
Water Act, 42 U.S.C. Section 300f et seq.; the Clean Air Act ("CAA"), 42 U.S.C.
<PAGE>
Section 7401 et seq.; and in any permits, licenses, approvals, plans, rules,
regulations or ordinances adopted, or other criteria and guidelines promulgated
pursuant to the preceding laws or other similar federal, state or local laws,
regulations, rules or ordinance now or hereafter in effect relating to
environmental matters (collectively the "Environmental Laws"); and (ii) any
other substances, constituents or wastes subject to any applicable federal,
state or local law, regulation or ordinance, including any Environmental Law,
now or hereafter in effect, including but not limited to (A) petroleum, (B)
refined petroleum products, (C) waste oil, (D) waste aviation or motor vehicle
fuel, (E) asbestos, (F) lead in water, paint or elsewhere, (G) radon, (H)
Polychlorinated Biphenyls (PCB's) and (I) ureaformaldehyde.
b. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Except as may be specifically set
forth elsewhere in this Agreement, Seller makes no representation or warranty
that such material is complete or accurate or that Purchaser will achieve
similar financial or other results with respect to the operations of the
Property, it being acknowledged by Purchaser that Seller's operation of the
Property and allocations of revenues or expenses may be vastly different than
Purchaser may be able to attain. Purchaser acknowledges that it is a
sophisticated and experienced purchaser of real estate and further that
Purchaser has relied upon its own investigation and inquiry with respect to the
operation of the Property and, except as may be specifically set forth
elsewhere in this Agreement, releases Seller from any liability with respect to
such historical financial information.
8. CLOSING. The closing ("Closing") of this transaction shall occur on
October 30, 1996 ("Closing Date"), at the office of the Seller's attorney, at
which time Seller shall deliver possession of the Property to Purchaser. The
Closing Date may be extended by Purchaser for up to two (2) business days
because of a "force majeure". The Closing Date is also subject to extension
pursuant to Paragraphs 6 and 17 of this Agreement.
9. CLOSING DOCUMENTS.
a. On the Closing Date, Purchaser shall deliver to Seller an
executed closing statement and to the Title Insurer the balance of the Purchase
Price, and such other documents as may be reasonably required by the Title
Insurer in order to consummate the transaction as set forth in this Agreement.
b. On the Closing Date, Seller shall deliver to Purchaser
possession of the Property; the Sale (in the form of Exhibit E attached hereto)
subject to the Permitted Exceptions and those Unpermitted Exceptions waived by
Purchaser; an inventory of the Personal Property and a Bill of Sale for the
same (in the form of Exhibit F attached hereto); an executed closing statement;
an executed assignment and assumption of all service contracts (in the form of
Exhibit G attached hereto); an executed assignment and assumption of all leases
and security deposits (in the form of Exhibit H attached hereto); the tenant
leases which shall be available at the Property; all assignable licenses and
permits relating to the use, occupancy or operation of the Property, together
with in assignment thereof (in the form of Exhibit I attached hereto); updated
Rent Roll (as hereinafter defined) with a list attached of all tenant
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concessions and allowances and rental commissions owed (certified in the form
of Exhibit Q attached hereto); a notice to the tenants of the transfer of title
and the assumption by Purchaser of the landlord's obligations under the leases
and the obligation to refund the security deposits which have been assigned or
credited to Purchaser (in the form of Exhibit J attached hereto); a non-foreign
affidavit (in the form of Exhibit K attached hereto); an assignment of
intangibles (in the form of Exhibit L attached, hereto); a copy of the notice
terminating the management agreement effective as of the Closing Date and, to
the extent received by Seller, an acknowledgement of the termination by the
manager; subject to the terms of Paragraph 17, reaffirmation of representations
and warranties by Seller (in the form of Exhibit M); a Broker's receipt and
lien waiver; and such other documents as may be reasonably required by the
Title Insurer in order to consummate the transaction as set forth in this
Agreement.
10. DEFAULT BY PURCHASER. THE DEPOSIT DEPOSITED INTO THE ESCROW IS TO
SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND UNDERTAKINGS
UNDER THIS AGREEMENT. IN THE EVENT OF ANY DEFAULT OF THE PURCHASER UNDER THE
PROVISIONS OF THIS AGREEMENT, SELLER SHALL RETAIN THE DEPOSIT AND THE INTEREST
THEREON AS SELLER'S SOLE AND EXCLUSIVE RIGHT TO DAMAGES OR ANY OTHER REMEDY.
THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES, IN THE EVENT OF A DEFAULT
BY PURCHASER, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICAL TO DETERMINE.
THEREFORE, BY PLACING THEIR INITIALS BELOW, THE PARTIES ACKNOWLEDGE THAT THE
DEPOSIT HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES' REASONABLE
ESTIMATE OF SELLER'S DAMAGES.
11. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF THE DEPOSIT TOGETHER
WITH ANY INTEREST ACCRUED THEREON PLUS THE RIGHT TO RECOVER THIRD PARTY
EXPENSES IN AN AMOUNT NOT TO EXCEED $100,000.00, AND THIS AGREEMENT SHALL
TERMINATE AND THE PARTIES SHALL HAVE NO FURTHER LIABILITY TO EACH OTHER AT LAW
OR IN EQUITY. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF
SELLER'S DEFAULT IS ITS REFUSAL TO DELIVER THE SALE AND THE DOCUMENTS WHICH
SELLER IS REQUIRED TO DELIVER AT CLOSING, THEN PURCHASER WILL BE ENTITLED TO
SUE FOR SPECIFIC PERFORMANCE OR ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF
$250,000.00. THE PARTIES AGREE THAT PURCHASER'S ACTUAL DAMAGES IN THE EVENT OF
A SELLER'S REFUSAL TO DELIVER THE SALE AND THE DOCUMENTS WOULD BE EXTREMELY
DIFFICULT OR IMPRACTICAL TO DETERMINE. THEREFORE, BY PLACING THEIR INITIALS
BELOW, THE PARTIES ACKNOWLEDGE THAT $250,000.00 HAS BEEN AGREED UPON, AFTER
NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF PURCHASER'S DAMAGES.
12. a. PRORATIONS. Rents (exclusive of delinquent rents, but including
prepaid rents) and other income; refundable security and other deposits (which
will be assigned to and assumed by Purchaser and a check in the amount of the
security and other deposits will be given to Purchaser at Closing); water and
other utility charges; fuels; prepaid and unpaid operating expenses; real and
personal property taxes based upon the most recent tax bill; and other similar
items shall be adjusted ratably as of 11:59 P.M. on the day preceding the
Closing Date ("Proration Date"), and credited or debited to the balance of the
cash due at Closing. Tenant allowances and concessions and unpaid leasing
commissions for leases entered into prior to the Closing Date will be adjusted
and prorated so as to provide that Seller is responsible for all such matters.
If the amount of any of the items to be prorated is not then ascertainable, the
adjustment thereof shall be on the basis of the most recent ascertainable data.
All prorations will be final except as to Delinquent Rents and real estate and
<PAGE>
personal property taxes referred to in 12b below. If special assessments have
been levied against the Property for completed improvements, then they shall be
paid by the Seller whether the bills are payable prior to or after the Closing
Date. All assessments first coming due after the Closing for incomplete
improvements shall be paid by Purchaser.
b. DELINQUENT RENTS. If, as of the Closing Date, any rent is in
arrears ("Delinquent Rent") for the calendar month in which the Closing occurs,
then Seller's pro rata share of such Delinquent Rent collected during the month
of Closing will be delivered to Seller. If any Delinquent Rent is collected by
either Purchaser or Seller after the month in which the Closing occurs, then
such rents so collected shall first be applied to current rent and then to
Delinquent Rent in the inverse order of its maturity. Purchaser and Seller
shall deliver to the other party its pro rata share within 10 days of
Purchaser's or Seller's receipt, as applicable, of that Delinquent Rent. This
subparagraph of this Agreement shall survive the Closing and the delivery and
recording of the Sale. On or before December 16, 1996, or such earlier date as
the current tax bill for the Property shall be issued, Purchaser and Seller
shall re-prorate the real estate and personal property taxes for the current
year based upon said current tax bill. In the event that the tax bill for the
Property is unavailable at that time, Seller and Purchaser shall base the
reprorations on the most recent data available from the relevant governmental
office.
13. RECORDING. This Agreement shall not be recorded and the act of
recording by Purchaser shall be an act of default hereunder by Purchaser and
shall be subject to the provisions of Paragraph 10. In the event that this
Agreement is recorded in default of this Agreement, it shall not be deemed to
affect or encumber title to the Property, and it shall not be deemed to create
or establish any right, claim, interest or privilege in the Property in favor
of Purchaser.
14. ASSIGNMENT. The Purchaser shall not have the right to assign its
interest in this Agreement without the prior written consent of the Seller.
Any assignment or transfer of, or attempt to assign or transfer, Purchaser's
interest in this Agreement shall be an act of default hereunder by Purchaser
and subject to the provisions of Paragraph 10. Seller hereby consents to an
assignment to any corporation which is a wholly owned subsidiary of Purchaser,
provided such assignment is effected prior to the expiration of the Approval
Period. However, Purchaser shall remain liable for all of the Purchaser's
obligations and undertakings set forth in this Agreement and the exhibits
attached hereto.
15. BROKER. The parties hereto acknowledge that Sage Properties
("Broker") is the only real estate broker involved in this transaction. Seller
agrees to pay Broker a commission or fee ("Fee") pursuant to a listing
agreement between Seller and Broker. However Seller represents that this Fee
is due and payable only from the proceeds of the Purchase Price received by
Seller. Purchaser agrees to indemnify, defend and hold harmless the Seller and
any partner, affiliate, parent of Seller, and all shareholders, employees,
officers and directors of Seller or Seller's partner, parent or affiliate (each
of the above is individually referred to as a "Seller Indemnitee") from all
claims, including attorneys' fees and costs incurred by a Seller Indemnitee as
a result of anyone's (except Broker) claiming by or through Purchaser any
brokerage fee, commission or compensation on account of this Agreement, its
<PAGE>
negotiation or the sale hereby contemplated. Seller agrees to indemnify,
defend and hold harmless the Purchaser and all shareholders, employees,
trustees, officers and directors of Purchaser or Purchaser's parent or
affiliate (each of the above is individually referred to as a "Purchaser
Indemnitee") from all claims, including attorneys' fees and costs incurred by a
Purchaser Indemnitee as a result of anyone's claiming by or through Seller any
brokerage fee, commission or compensation (including the Broker) on account of
this Agreement, its negotiation or the sale hereby contemplated.
16. DOCUMENTS, INSPECTION OF PROPERTY AND APPROVAL PERIOD.
a. Seller has delivered to Purchaser copies of the most recent
available tax bills, rent rolls, insurance premiums, and service contracts
(collectively the "Documents"). All of the Documents and other matters to be
reviewed by Purchaser shall be subject to review by Purchaser by the close of
business (5:00 P.M. Central Daylight Time) on October 24, 1996 ("Approval
Period"). During the Approval Period, upon reasonable notice (which may be
given verbally no later than 24 hours prior thereto unless the law requires
longer notice with respect to inspection of the interior of the apartments) to
the Seller, the Purchaser shall have the right to inspect the Property
including the interior of the apartments and Seller's books and records, leases
and other files pertaining to the Property and the environmental condition of
the Property, during normal business hours. During Purchaser's inspection of
the books and records, leases and other files pertaining to the operation,
maintenance and leasing of the Property, Seller will provide Purchaser with
copies of those documents which are specifically requested by Purchaser.
Purchaser agrees to indemnify, defend, protect and hold Seller harmless from
any and all claims for personal injury and property damage and mechanic lien
claims which Seller may incur or suffer as a result of Purchaser's conducting
its inspection and investigation of the Property including the entry of
Purchaser, its employees or agents and its lender onto the Property, including
without limitation, liability for mechanics' lien claims.
b. Purchaser agrees to defend and hold Seller harmless from any
injuries, damages or claims of any nature whatsoever which Purchaser's
servants, agents or employees may have as a result of Purchaser's inspection of
the Property. Purchaser further agrees to restore any damage to the Property
which may arise as a result of Purchaser's inspection of the Property.
c. On or prior to the expiration of the Approval Period, Purchaser
shall have the right to terminate this Agreement for any reason or no reason in
Purchaser's sole and exclusive discretion by serving a notice ("Notice of
Disapproval") delivered to Seller and the Escrow Agent prior to the expiration
of the Approval Period. Upon receipt of the Notice of Disapproval, the Deposit
plus the interest accrued thereon shall be returned to the Purchaser and this
Agreement shall be terminated. If Purchaser does not deliver a Notice of
Disapproval to Seller, then it shall be conclusively presumed that Purchaser
has waived its right to terminate this Agreement with respect to the provisions
of this Paragraph 16.
17. SELLER'S RIGHT TO CURE. If on or prior to the Closing Date, Deborah
Hartigan, Steve Siegel or Tom Farrell discover that any representation or
warranty of Seller is untrue in any material respect or that Seller is in
default under this Agreement or that Seller has failed to perform a required
covenant (individually or collectively, a "Known Breach"), then Purchaser may
<PAGE>
waive such Known Breach or give Seller notice of such Known Breach. Upon
receipt of notice from Purchaser, Seller shall have ten (10) days in order to
cure such Known Breach and, if necessary, the Closing Date shall be extended
until the second business day after the Known Breach has been cured. If, after
making all reasonable efforts, Seller is unable to cure the Known Breach within
such ten (10) day period, then Purchaser shall elect by notice to Seller to
either (i) waive the Known Breach or (ii) terminate this Agreement, in which
case, Purchaser shall have a right to recover actual third party expenses in an
amount not to exceed $100,000.00 as provided in Paragraph 11 of this Agreement.
In the event of termination, the Deposit plus the interest accrued thereon
shall be returned to Purchaser. If Purchaser fails to give Seller notice of a
Known Breach, then Purchaser shall have waived its rights to assert any claims
for such Known Breach.
Notwithstanding anything to the contrary contained in this Section 17 or
elsewhere in this Agreement, it is understood and agreed that to the extent any
representation or warranty made by Seller in this Agreement is made to the
knowledge of Seller or is based on the receipt of notice by Seller, in the
event that Seller first acquires such knowledge or first receives such notice
after the date of this Agreement and as a result thereof, Seller is unable to
reaffirm and restate the accuracy of such representation and warranty, such
failure shall not constitute a default by Seller under this Agreement, but
Purchaser shall nonetheless have the right to either (i) waive such ability to
reaffirm and restate said representation and warranty, or (ii) terminate this
Agreement and receive the Deposit plus the interest accrued thereon (said
return of the Deposit and interest thereon being Purchaser's sole remedy in
such event).
18. SURVIVAL OF INDEMNITIES. Notwithstanding anything in this Agreement
to the contrary, the parties' obligations to indemnify, defend and hold each
other harmless under various provisions of this Agreement shall survive the
termination of this Agreement or the Closing and delivery and recording of the
Sale.
19. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
a. Any reference herein to Seller's knowledge, or notice of any
matter or thing, shall only mean such knowledge or notice that has actually
been received by Reid Reynolds (the asset manager), and any representation or
warranty of the Seller is based upon those matters of which Reid Reynolds (the
asset manager) has actual knowledge. Any knowledge or notice given, had or
received by any of Seller's agents, servants or employees (other than Reid
Reynolds) shall not be imputed to Seller or the individual partners or the
general partner of Seller.
b. Subject to the limitations set forth in subparagraph a above,
Seller hereby makes the following representations, warranties and covenants,
all of which are made to the best of Seller's knowledge, and all of which shall
be reaffirmed and restated on and as of the Closing Date and which shall
survive the Closing and delivery of the Sale for a period of one hundred twenty
(120) days:
<PAGE>
i. The present use and occupancy of the Property conform with
applicable building and zoning laws, rules and regulations and Seller has
received no written notice that any such laws, rules or regulations are being
violated.
ii. The rent roll ("Rent Roll") attached hereto as Exhibit N is
true and accurate and neither party to the leases is in default thereunder
except as noted on the delinquency report attached to the Rent Roll. An
updated Rent Roll will be delivered at Closing and will be true and accurate as
of the date of the updated Rent Roll.
iii. There are no pending or threatened litigation, claims,
causes of action or administrative proceedings concerning the Property nor does
Seller have any knowledge for the basis for such litigation, claims, causes of
action or administrative proceedings.
iv. This Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary action on the
part of Seller and, upon the assumption that this Agreement constitutes a
legal, valid and binding obligation of Purchaser, this Agreement constitutes a
legal, valid and binding obligation of Seller.
v. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby by Seller do not and will
not (a) violate or conflict with the organizational documents of Seller, (b)
violate or conflict with any judgment, decree or order of any court applicable
to or affecting Seller, (c) breach the provisions of, or constitute a default
under, any contract, agreement, instrument or obligation to which Seller is a
party or by which Seller is bound, or (d) violate or conflict with any law or
governmental regulation or permit applicable to Seller.
vi. Seller has not received written notice of any pending or
threatened condemnation of all or any portion of the Property.
vii. Attached hereto as Exhibit O is a list of all service,
maintenance and supply contracts affecting the Property in effect on the date
hereof and which shall survive Closing (the "Service Contracts"), and except as
set forth on Exhibit O, neither party to any service contract is in default
thereunder.
viii. Seller is not a "foreign person" as defined in the Federal
Foreign Investment in Real Property Tax Act of 1980 and the 1984 Tax Reform
Act, as amended.
ix. Seller has not received written notice from any
governmental authority that the Property contains Hazardous Substances or
Hazardous Materials or is in violation of any Environmental Laws.
x. Seller has not executed and to Seller's actual knowledge,
without inquiry, no agreement exists involving the Property with any
governmental authority for or in respect of subsidized tenants or housing
rents.
<PAGE>
xi. Seller does not own, directly or indirectly, any other real
estate which is contiguous to or is located within a one mile radius of the
Property.
xii. Seller has not received written notice from a governmental
authority or any public utility that the water supply or sewage disposal
systems presently servicing the Property are inadequate to distribute the water
supply and dispose of the sewage for the Property.
xiii. The unaudited operating statements for 1995 and 1996
to date which Seller has delivered to Purchaser is the same information which
Seller relies upon in making reports to its limited partners and in filing its
federal income tax returns.
c. Seller covenants that:
i. The management, operation, leasing and maintenance of the
Property, as conducted by the Seller during the past three (3) months, shall
continue until the Closing Date.
ii. The management agreement pertaining to the leasing of
apartments will be terminated as of the Closing Date. Seller will request a
release in favor of the Purchaser from the management company.
iii. For the period commencing from the date of execution of
this Agreement until the Closing Date, Seller will not terminate more than ten
(10) tenant leases because of a default by any tenant under any such lease
without Purchaser's prior written consent, which consent will not be
unreasonably withheld or delayed.
iv. Seller will perform its obligations under existing leases.
20. ENVIRONMENTAL REPORT. Attached to this Agreement as Exhibit P is the
Phase I Environmental Site Assessment Report prepared by H+GCL Environmental
Scientists and Engineers designated as Job No. 45004.15, dated April 30, 1993
("Environmental Report"), which Seller is delivering to Purchaser, at
Purchaser's request. Seller makes no representation or warranty that the
Environmental Report is accurate or complete. Purchaser hereby releases Seller
from any liability whatsoever with respect to the Environmental Report,
including, without limitation, the matters set forth in the Environmental
Report or the accuracy and/or completeness of the Environmental Report.
21. LIMITATION OF LIABILITY.
a. Subject to the provisions of Paragraphs 25 and 26 herein, no
general or limited partner of Seller, nor any of its respective beneficiaries,
shareholders, partners, officers, agents, employees, heirs, successors or
assigns shall have any personal liability of any kind or nature for or by
reason of any matter or thing whatsoever under, in connection with, arising out
of or in any way related to this Agreement and the transactions contemplated
herein, and Purchaser hereby waives for itself and anyone who may claim by,
through or under Purchaser any and all rights to sue or recover on account of
any such alleged personal liability.
<PAGE>
b. This Agreement and all documents, agreements, understandings and
arrangements relating to this transaction have been negotiated, executed and
delivered on behalf of Purchaser by the trustees or officers thereof in their
representative capacity under the Amended and Restated Declaration of Trust of
New Plan Realty Trust dated as of January 15, 1996 and not individually, and
bind only the trust estate of Purchaser, and no trustee, officer, employee,
agent or shareholder of Purchaser shall be bound or held to any personal
liability or responsibility in connection with the agreements, obligations and
undertakings of Purchaser thereunder, and any person or entity dealing with
Purchaser in connection therewith shall look solely to the trust estate for the
payment of any claim or for the performance of any agreement, obligation or
undertaking thereunder. Seller acknowledges and agrees that each agreement and
other document executed by Purchaser in accordance with or in respect of this
transaction shall be deemed and treated to include in all respects and for all
purposes the foregoing exculpatory provision.
22. RIGHT TO AUDIT. Without limiting any other rights or remedies of
Purchaser, Purchaser shall have the right after the Closing to audit the books
and records of Seller in respect of the Property for those last two entire
fiscal years of Seller's ownership of the Property ending immediately preceding
the Closing plus any "stub" period thereafter to such Closing; provided,
however, any matters disclosed by such audit (other than fraud) shall not be
the basis or the foundation for a claim of a breach of a representation or
warranty by the Seller.
23. TIME OF ESSENCE. Time is of the essence of this Agreement.
24. NOTICES. Any notice or demand which either party hereto is required
or may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by facsimile or
overnight courier such as Federal Express or made by United States registered
or certified mail addressed as follows:
TO SELLER: c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attn: Ilona Adams
847/267-1600
847/317-4462 (FAX)
with copies to: The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attn: Al Lieberman
847/267-1600
847/317-4462 (FAX)
and
<PAGE>
Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, Illinois 60661
Attn: Daniel J. Perlman, Esq.
312/902-5520
312/902-1061 (FAX)
TO PURCHASER: New Plan Realty Trust
1120 Avenue of the Americas
New York, New York 10036
Attn: Legal Department
212/869-3000
212/302-4776 (FAX)
with a copy to: Robert Horwitch, Esq.
Altheimer & Gray
10 S. Wacker Drive
Suite 4000
Chicago, Illinois 60606
312/715-4000
312/715-4800 (FAX)
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be
deemed to be delivered or made on the next business day if sent by overnight
courier, or on the same business day if sent by facsimile before the close of
business, or the next business day if sent by facsimile after the close of
business, or on the 4th business day after the same is deposited in the United
States Mail as registered or certified matter, addressed as above provided,
with postage thereon fully prepaid. Any such notice, demand or document not
given, delivered or made by registered or certified mail or by overnight
courier or by facsimile as aforesaid shall be deemed to be given, delivered or
made upon receipt of the same by the party to whom the same is to be given,
delivered or made. Any party's above named attorney may give an effective and
binding notice in accordance with this Paragraph 24 on behalf of such party.
25. DISTRIBUTIONS. For a period of one hundred and twenty (120) days
after the Closing Date, Seller shall not distribute $250,000.00 from the
proceeds of the net cash received from the Purchaser at the Closing. If at any
times Purchaser alleges claims for damages against Seller after the Closing
Date, but prior to the expiration of the aforesaid one hundred twenty (120) day
period ("Claims"), then at and after the end of 120 day period the Seller shall
continue to withhold distribution of the funds in an amount equal to the lesser
of (i) the amount of the Claims, or (ii) $250,000.00, until the Claims are
resolved. The Claims shall specify the exact representation or warranty which
was breached and the amount of damages the Purchaser alleges it has sustained.
26. EXECUTION BY THE BALCOR COMPANY. The Balcor Company executes this
Agreement solely for the purpose of assuring to Purchaser that if the Seller
fails to withhold or pay the sums required of Seller pursuant to Paragraph 25
and if Purchaser is successful in any claims asserted against the Seller for a
breach of a representation or warranty, then The Balcor Company shall pay to
Purchaser the amount of such claim(s), the total of which shall not exceed
$250,000.00.
<PAGE>
27. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute
three (3) copies of this Agreement and three (3) copies of the Escrow Agreement
and forward them to Seller for execution, accompanied with the Deposit payable
to the Escrow Agent. Seller will forward one (1) copy of the executed
Agreement to Purchaser and will forward the following to the Escrow Agent:
a. Deposit;
b. One (1) fully executed copy of this Agreement; and
c. Three (3) copies of the Escrow Agreement signed by the parties
with a direction to execute two (2) copies of the Escrow Agreement after
receipt of the Deposit and deliver a fully executed copy to the Purchaser and
the Seller.
28. GOVERNING LAW. The provision contained herein with reference to
retention of the Deposit in the event of Purchaser's default shall be governed
by the laws of the State of Illinois. The remaining provisions of this
Agreement shall be governed by the laws of the State of Louisiana.
29. FURTHER ASSURANCES. In addition to the obligations required to be
performed under this Agreement by Seller on the Closing Date, from time to time
subsequent to such Closing Date, Seller shall perform such other acts and shall
execute and deliver such other agreements and documents as Purchaser reasonably
may request in order to effectuate the consummation of this transaction.
Likewise, in addition to the obligations required to be performed under this
Agreement by Purchaser on the Closing Date, from time to time subsequent to
such Closing Date, Purchaser shall perform such other acts and shall execute
and deliver such other agreements and documents as Seller reasonably may
request in order to effectuate the consummation of this transaction.
30. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all other negotiations, understandings and
representations made by and between the parties and the agents, servants and
employees.
31. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
32. CAPTIONS. Paragraph titles or captions contained herein are inserted
as a matter of convenience and for reference, and in no way define, limit,
extend or describe the scope of this Agreement or any provision hereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date set forth above.
Executed by Purchaser on PURCHASER:
October 10, 1996.
NEW PLAN REALTY TRUST, a Massachusetts business
trust
By: /s/ James M. Steuterman
----------------------------------
Name:
----------------------------------
Its:
----------------------------------
Executed by Seller on SELLER:
October ___, 1996.
WILLOW BEND LAKE PARTNERS LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Willow Bend Lake Partners, Inc., an Illinois
corporation, its general partner
By: /s/ John K. Powell, Jr.
----------------------------------
Name:
----------------------------------
Its:
----------------------------------
<PAGE>
JOINDER
The undersigned executes this joinder solely for the purposes of
effectuating its obligations arising under Paragraph 26 of this Agreement.
THE BALCOR COMPANY, a Delaware corporation
By: /s/ John K. Powell, Jr.
---------------------------------
Name:
---------------------------------
Its:
---------------------------------
<PAGE>
Willow Bend Lake Apartments
Baton Rouge, Louisiana
___________________ of Sage Properties ("Seller's Broker") executes this
Agreement in its capacity as a real estate broker and acknowledges that the fee
or commission due it from Seller as a result of the transaction described in
this Agreement is as set forth in that certain Listing Agreement, dated as of
April 12, 1996 between Seller and Seller's Broker (the "Listing Agreement"),
and that Purchaser has no liability or responsibility whatsoever for such fee
or commission. Seller's Broker also acknowledges that payment of the aforesaid
fee or commission is conditioned upon the Closing and the receipt of the
Purchase Price by the Seller. Seller's Broker agrees to deliver a receipt to
the Seller at the Closing for the fee or commission due Seller's Broker, a
release stating that no other fees or commissions are due to it from Seller or
Purchaser and a waiver of broker's lien in form and substance satisfactory to
Title Insurer.
SAGE PROPERTIES
By:
--------------------------------------
Name:
--------------------------------------
Its:
--------------------------------------
<PAGE>
EXHIBITS
A - Legal
B - Personal Property
C - Escrow Agreement
D - Title Commitment
E - Act of Sale
F - Bill of Sale
G - Assignment and Assumption of Service Contracts
H - Assignment and Assumption of Leases
I - Assignment of Guarantees, Warranties, Permits, Licenses and Approvals
J - Notice to Tenants
K - FIRPTA Affidavit
L - Assignment and Assumption of Intangible Property
M - Reaffirmation of Representations and Warranties
N - Rent Roll
O - Service Contracts
P - Environmental Report
Q - Certificate of Rent Roll
<PAGE>
TGM REALTY CORP. #5
650 FIFTH AVENUE -- 28TH FLOOR
NEW YORK, NEW YORK 10019
as of September 20, 1996
Chestnut Ridge I Limited Partnership and
8951 Randol Limited Partnership
c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attn: Ilona Adams
Re: Agreements of Sale dated as of August 30, 1996, as modified to date
(the "Agreements"), between Chestnut Ridge I Limited Partnership or
8951 Randol Limited Partnership, respectively (each, a "Seller" and
collectively, "Sellers"), and TGM Realty Corp. #5 ("Purchaser")
Premises: Chestnut Ridge I Apartments and
Chestnut Ridge II Apartments
Fort Worth, Tarrant County, Texas
- ------------------------------------------------------------------------------
Gentlemen:
Purchaser and each Seller hereby agree that the Agreements are modified as
follows, provided that terms used but not defined in this amendment shall have
the meanings provided in the Agreements.
1. Purchaser has asked the City of Fort Worth (the "City") to inspect
each Property and have certificates of occupancy for each building therein
issued after the Closing, and Sellers have consented thereto. The aggregate
inspection fee (of $2,080 for both Properties) is at Purchaser's cost and
expense.
2. If the City requires that repairs and/or replacements be made
(including without limitation by issuing a report or notices of violations)
then Purchaser and Sellers shall endeavor in good faith to agree in writing
upon the estimated aggregate costs of same. At Closing, Sellers shall pay
Purchaser the following portion of such aggregate agreed-upon costs in the form
of a credit in Purchaser's favor against the aggregate Purchase Prices:
(a) First $10,000 of such aggregate costs: Sellers shall pay none;
(b) Next $15,000 of such aggregate costs: Sellers shall pay all;
and
(c) All aggregate costs after the first $25,000: Sellers shall pay
50%.
<PAGE>
3. Notwithstanding the foregoing provisions to the contrary, if (a)
the total of such aggregate agreed-upon costs shall exceed $100,000 as stated
in such written agreement between Purchaser and Sellers, or (b) Purchaser and
the Sellers shall, notwithstanding their good faith efforts to do so, fail to
agree on the amount of such aggregate costs within ten (10) Business Days after
Purchaser shall have received the City's final report of required repairs and
replacements (or final report or notices of violations), or (c) the City shall
state in a writing received by Purchaser that the City shall not issue
certificates of occupancy for one or more buildings in the Properties, then,
unless Purchaser shall elect, by written notice to Sellers given within ten
(10) Business Days after the occurrence of either case (a), (b) or (c), to
continue the Agreements, the Agreements shall automatically terminate, all
Earnest Moneys shall be immediately refunded to Purchaser, and then Purchaser
and each Seller shall have no further liabilities or obligations one to the
other under the Agreements (including without limitation any and all
liabilities or obligations with respect to such City inspections or resulting
reports or notices of violations). If Purchaser timely gives such notice to
continue the Agreements, then, if the foregoing case (a) has occurred, the
Agreements shall nonetheless remain modified by Sections 1, 2, 4 and 5 of this
amendment; if the foregoing case (b) has occurred, this amendment shall no
longer be applicable except that the Agreements shall be modified solely by
Sections 4 and 5 of the amendment; and if the foregoing case (c) has occurred,
Purchaser shall be deemed to have accepted the consequences of the lack of such
certificates of occupancy and Seller shall have no liability therefor.
Further, if the City gives neither an initial report of required repairs and
replacements nor an initial report or notices of violations on or before
December 2, 1996, then, until the City gives such report or notice to Sellers
or Purchaser, either Purchaser or both Sellers may elect, by notice to the
other, to terminate the Agreements, and, upon such election, all Earnest Moneys
shall be immediately refunded to Purchaser, and then Purchaser and each Seller
shall have no further liabilities or obligations one to the other under the
Agreements (including without limitation any and all liabilities or obligations
with respect to such City inspections or resulting reports or notices of
violations).
4. The Closing Date under each Agreement is hereby extended to be the
date that is seven (7) Business Days after either (a) the date on which both
(i) the City shall have issued its final report of required repairs and
replacements (or final report or notices of violations) and (ii) Purchaser and
both Sellers shall have agreed in writing as to the estimated aggregate costs
of effecting all related repairs and replacements, or (b) the date that
Purchaser gives such notice to continue the Agreements, provided that if both
such dates (a) and (b) occur, then the Closing Date shall be seven (7) Business
Days after the later of such two dates.
5. Section 9B of each Agreement is hereby modified by adding the
following thereto at the end thereof: "; and a release from the Broker stating
that all fees or commissions due Broker have been paid in full by Seller and
that no other fees or commissions are due to the Broker by Purchaser."
<PAGE>
6. Except as modified hereby, the Agreements remain unmodified and in
full force and effect.
7. This amendment may be executed in any number of counterparts, each of
which shall, when executed, be deemed to be an original and all of which shall
be deemed to be one and the same instrument. In addition, the parties may
execute separate signature pages, and such signature pages (and/or signature
pages that have been detached from one or more duplicate original copies of
this amendment) may be combined and attached to one or more copies of this
amendment so that such copies shall contain the signatures of all of the
parties thereto. A party hereto may rely upon a telecopy (fax) of a
counterpart of this amendment that has been executed by any other party, or a
photocopy thereof.
Very truly yours,
TGM REALTY CORP. #5, a Delaware corporation
By: /s/ Steven C. Macy
-------------------------------------------------
Steven C. Macy, Executive Vice President
AGREED:
CHESTNUT RIDGE I LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Chestnut Ridge of Illinois, Inc., an Illinois
corporation, its general partner
By: /s/ James E. Mendelson
---------------------------------------
Name: James E. Mendelson
Title: Authorized Rep.
8951 RANDOL LIMITED PARTNERSHIP, an
Illinois limited partnership
By: 8951 Randol of Illinois, Inc., an Illinois
corporation, its general partner
By: /s/ James E. Mendelson
-----------------------------
Name: James E. Mendelson
Title: Authorized Rep.
<PAGE>
September 19, 1996
VIA FACSIMILE MAIL
4949 Marbrisa Limited The Balcor Company Daniel J. Perlman, Esq.
Partnership 2355 Waukegan Road Katten Muchin & Zavis
c/o The Balcor Company Suite A200 Suite 2100
2355 Waukegan Road Bannockburn, IL 60015 525 W. Monroe Street
Suite A200 Attn.: Al Lieberman Chicago, IL 60661
Bannockburn, IL 60015
Attn.: Ilona Adams
Re: Agreement of Sale, dated as of the 16th day of July, 1996 (the
"Agreement") between 4949 Marbrisa Limited Partnership, as Seller,
and ERP Operating Limited Partnership, as Purchaser, for the purchase
of Marbrisa Apartments, Tampa, Florida (the "Property").
Dear Ms. Adams and Messrs. Lieberman and Perlman:
Purchaser hereby requests that the Closing Date, as such term is defined
in Section 9 of the Agreement, be changed from September 19, 1996 to September
26, 1996. Please acknowledge Seller's acceptance of this modification to the
Agreement by executing this letter in the space provided below and returning it
via facsimile mail to Purchaser.
ERP OPERATING LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Equity Residential Properties Trust,
a Maryland Real Estate Investment Trust,
its general partner
By: /s/ Shelley L. Dunck
------------------------------------
Shelley L. Dunck
Vice President
Approved and Accepted this day of September, 1996
4949 MARBRISA LIMITED PARTNERSHIP, an Illinois
limited partnership
By: 4949 Marbrisa of Illinois, Inc., an Illinois corporation
By: /s/ John K. Powell, Jr.
------------------------------
Name:
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Title:
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<PAGE>
September 26, 1996
VIA FACSIMILE MAIL
4949 Marbrisa Limited The Balcor Company Daniel J. Perlman, Esq.
Partnership 2355 Waukegan Road Katten Muchin & Zavis
c/o The Balcor Company Suite A200 Suite 2100
2355 Waukegan Road Bannockburn, IL 60015 525 W. Monroe Street
Suite A200 Attn.: Al Lieberman Chicago, IL 60661
Bannockburn, IL 60015
Attn.: Ilona Adams
Re: Agreement of Sale, dated as of the 16th day of July, 1996 (the
"Agreement") between 4949 Marbrisa Limited Partnership, as Seller,
and ERP Operating Limited Partnership, as Purchaser, for the purchase
of Marbrisa Apartments, Tampa, Florida (the "Property").
Dear Ms. Adams and Messrs. Lieberman and Perlman:
Purchaser hereby requests that the Closing Date, as such term is defined
in Section 9 of the Agreement, be changed from September 26, 1996 to October 4,
1996. Please acknowledge Seller's acceptance of this modification to the
Agreement by executing this letter in the space provided below and returning it
via facsimile mail to Purchaser.
ERP OPERATING LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Equity Residential Properties Trust,
a Maryland Real Estate Investment Trust,
its general partner
By: /s/ Shelley L. Dunck
------------------------------------
Shelley L. Dunck
Vice President
Approved and Accepted this day of September, 1996
4949 MARBRISA LIMITED PARTNERSHIP, an Illinois
limited partnership
By: 4949 Marbrisa of Illinois, Inc., an Illinois corporation
By: /s/ James E. Mendelson
------------------------------
Name: James E. Mendelson
------------------------------
Title: Authorized Rep.
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<PAGE>
October 2, 1996
VIA FACSIMILE MAIL
4949 Marbrisa Limited The Balcor Company Daniel J. Perlman, Esq.
Partnership 2355 Waukegan Road Katten Muchin & Zavis
c/o The Balcor Company Suite A200 Suite 2100
2355 Waukegan Road Bannockburn, IL 60015 525 W. Monroe Street
Suite A200 Attn.: Al Lieberman Chicago, IL 60661
Bannockburn, IL 60015
Attn.: Ilona Adams
Re: Agreement of Sale, dated as of the 16th day of July, 1996 (the
"Agreement") between 4949 Marbrisa Limited Partnership, as Seller,
and ERP Operating Limited Partnership, as Purchaser, for the purchase
of Marbrisa Apartments, Tampa, Florida (the "Property").
Dear Ms. Adams and Messrs. Lieberman and Perlman:
Purchaser hereby requests that the Closing Date, as such term is defined
in Section 9 of the Agreement, be changed from October 4, 1996 to October 11,
1996. Please acknowledge Seller's acceptance of this modification to the
Agreement by executing this letter in the space provided below and returning it
via facsimile mail to Purchaser.
ERP OPERATING LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Equity Residential Properties Trust,
a Maryland Real Estate Investment Trust,
its general partner
By: /s/ Shelley L. Dunck
------------------------------------
Shelley L. Dunck
Vice President
Approved and Accepted this day of October, 1996
4949 MARBRISA LIMITED PARTNERSHIP, an Illinois
limited partnership
By: 4949 Marbrisa of Illinois, Inc., an Illinois corporation
By: /s/ John K. Powell, Jr.
------------------------------
Name: John K. Powell, Jr.
------------------------------
Title: Senior Vice President
------------------------------
<PAGE>
