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) June 16, 1997
BALCOR COLONIAL STORAGE INCOME FUND - 85
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(Exact Name of Registrant as Specified in Charter)
Illinois 0-14340
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State or other jurisdiction Commission file number
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 36-3338930
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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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Balcor Storage Partners - 85 ("Balcor"), in its capacity as a general partner
of the Registrant, has executed an Agreement of Sale dated June 16, 1997 (the
"Amsdell Agreement") with Acquiport/Amsdell I Limited Partnership, a Delaware
limited partnership (the "Purchaser"), regarding the sale of the Registrant's
69 mini-warehouse facilities (the "Facilities"), representing substantially all
of the assets of the Registrant. The purchase price (the "Purchase Price") for
the Facilities is $56,000,000.00, plus or minus prorations and credits, if any.
The Purchase Price will be paid to the Purchaser at the closing, which is
currently expected to occur in October 1997 (the "Closing"). The Purchase
Price was the result of arm's-length negotiations between the Registrant and the
Purchaser.
The sale of the Facilities is subject to the satisfaction of certain terms and
conditions, including the receipt of appropriate closing documentation, the
Purchaser's satisfactory due diligence review of the Facilities (including,
without limitation, the review of survey, title and environmental matters) and
the non-occurrence of certain events which could give rise to termination of
the sale of the Facilities prior to the Closing. In addition, consummation of
the transaction is subject to approval by the holders of a majority of the
outstanding limited partnership interests of the Registrant. There can be no
assurance that all terms and conditions will be satisfied or that the necessary
consent will be obtained and, therefore, it is possible that the Registrant
will not sell the Facilities.
The other general partner of the Registrant, Colonial Storage 85, Inc.
("Colonial"), did not execute the Amsdell Agreement and opposes the sale of the
Facilities on such terms. However, Balcor and Colonial have agreed to submit
the proposed sale of the Facilities to Amsdell to the limited partners of the
Registrant for approval or rejection.
In the event the limited partners of the Registrant approve the sale of the
Facilities to Amsdell and the transaction is consummated, the General Partners
intend to liquidate and dissolve the Registrant and distribute the net proceeds
from the sale of the Facilities in the manner set forth in the Registrant's
Amended and Restated Agreement and Certificate of Limited Partnership.
There exists no material relationship between the Registrant and the Purchaser,
or between any affiliates of such entities.
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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:
2.1 Agreement of Sale by and between Acquiport/Amsdell I Limited
Partnership, and Balcor/Colonial Storage Income Fund-85, dated
as of June 16, 1997.
No information is required under Items 1, 3, 4, 5, 6 and 8 and these items
have, therefore, been omitted.
Signature
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
BALCOR/COLONIAL STORAGE INCOME FUND - 85
By: Balcor Storage Partners - 85, an Illinois
general partnership, its General Partner
By: The Balcor Company, a Delaware
corporation, a General Partner
By: /s/ Jerry M. Ogle
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Its: Managing Director and
Secretary
By: Colonial Storage 85, Inc., a Texas
corporation, a General Partner
By: /s/ James R. Pruett
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Its: President
Dated: June 30, 1997
<PAGE>
AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), is entered into as of the
16th day of June, 1997, by and between ACQUIPORT/AMSDELL I LIMITED PARTNERSHIP,
a Delaware limited partnership ("Purchaser"), and BALCOR/COLONIAL STORAGE
INCOME FUND - 85, an Illinois limited partnership ("Seller").
W I T N E S S E T H:
1. PURCHASE AND SALE.
1.1. Purchaser agrees to purchase and Seller agrees to sell at the price
of Fifty-Six Million and No/100 Dollars ($56,000,000.00) (the "Purchase
Price"), those certain sixty-nine (69) mini-warehouse facilities commonly
described in Exhibit A attached hereto and legally described in Exhibit B
attached hereto (collectively, the "Real Properties" and individually a "Real
Property") and the "Personal Property" (hereinafter defined), together with the
personal property located on the Real Properties. Each Real Property shall
include all of Seller's right, title and interest in and to all of the
following:
a. all easements, covenants and other rights appurtenant, and all
right, title and interest of Seller, if any, in and to any land lying in the
bed of any street, road, avenue or alley, open or closed, in front of or
adjoining the Real Property;
b. to the extent they may be transferred under applicable law, all
licenses, permits and authorizations presently issued in connection with the
Real Property;
c. all leases, prepaid rents and security deposits, if any, in
respect of any Real Property in which Seller holds an interest as a landlord
for the use and occupancy of all or any part of the Real Property ("Leases");
d. all "Service Contracts" (as hereinafter defined); and
e. all engineering reports, surveys and architectural plans, if
any.
1.2. Included in the Purchase Price are all signs, signage, gates,
fences, alarms, other security devices, machinery, equipment, desks, chairs,
office furniture, furnishings, computers, books, records (other than computer
software), computer data bases, phone numbers, appliances, utility deposits,
tools, lawn mowers, personal property warranties and other personalty located
on each Real Property and used or useable in the operation and maintenance of
the Property which is now owned or which is hereafter acquired by the Seller
between the date of the execution of this Agreement and the Closing Date (the
"Personal Property"). Seller shall deliver to Purchaser within twenty (20)
days after the date hereof a schedule of the Personal Property on a per
Property basis and Seller shall have the right to exclude from the Personal
Property any such Personal Property that becomes obsolete in the ordinary
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course of business. Each Real Property and the Personal Property located at
such Real Property shall be referred to individually as a "Property" and all of
such real property and personal property shall be collectively referred to as
the "Properties".
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as follows:
2.1. Upon the expiration of the "Inspection Period" (as hereinafter
defined) the sum of One Million and No/100 Dollars ($1,000,000.00) (the
"Earnest Money") to be held in escrow in accordance with the provisions of the
Escrow Agreement ("Earnest Money Escrow Agreement") attached hereto as Exhibit
C.
2.2. On the "Closing Date" (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.
2.3. Within thirty (30) days after the date hereof, Purchaser and Seller
shall agree upon an allocation of the Purchase Price among each Property (the
"Schedule Price") and an allocation of the Schedule Price for each Property
among the following categories: (i) land, (ii) improvements, (iii) Personal
Property, (iv) intangibles and (v) Leases and plans and specifications (the
"Property Breakdown Schedule"). The parties agree not to take an income tax
reporting position inconsistent with the Schedule Price and Property Breakdown
Schedule and such covenant shall survive the Closing and recording of the
Deeds. The parties to this Agreement further acknowledge that the Schedule
Price of each Property shall be used for determining any transfer, filing,
deed, stamp, documentary and other such fees and taxes.
3. TITLE COMMITMENT AND SURVEY.
3.1. Seller has ordered an ALTA or comparable title commitment for an
owner's standard title insurance policy issued by Near North National Title
Corporation, as agent for First American Title Insurance Company (hereinafter
referred to as "Title Insurer") for each Real Property (the "Title
Commitments"). Seller shall deliver the Title Commitments and copies of all
documents of record creating exceptions to coverage ("Documents of Record") to
Purchaser within twenty-one (21) days after the date hereof. For purposes of
this Agreement, "Permitted Exceptions" as to each of the Real Properties shall
mean: (a) general real estate taxes, association assessments, special district
taxes and related charges not yet due and payable (which shall be prorated as
hereinafter specified); (b) matters caused by the actions of Purchaser; (c) the
Leases; and (d) those matters affecting title to the Real Properties which are
not established as "Unpermitted Exceptions" (as hereinafter defined) by
Purchaser pursuant to Paragraph 5.2 herein. The Title Commitments shall be
conclusive evidence of good title as therein shown as to all matters to be
insured by the title policy for the respective Real Property, subject only to
the exceptions therein stated. On the Closing Date, Title Insurer shall
deliver to Purchaser an ALTA or comparable title policy for the Real Properties
in amounts equal to the Schedule Price of each Real Property in conformance
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with the Title Commitments, subject to Permitted Exceptions and Unpermitted
Exceptions waived by Purchaser (the "Title Policy"). Seller shall pay for
costs of the Title Commitments, Title Policies, and extended coverage on the
Title Policies, and Purchaser shall pay for the cost of any additional
endorsements to, or extended coverage on, the Title Policies.
3.2. Purchaser has received a survey of certain of the Real Properties
(the "Existing Surveys"). Seller has ordered an updated survey of the Existing
Surveys (to the extent Seller is able to locate the original surveyor) and new
surveys for those Real Properties for which an Existing Survey does not exist
(and for those Real Properties where Seller was not able to locate the original
surveyor) (collectively, the "Updated Surveys") and Seller has requested the
survey standards set forth on Exhibit D and the surveyor's certificate also
attached to Exhibit D. To the extent an Updated Survey raises an Unpermitted
Exception, then the Unpermitted Exception shall be dealt with in accordance
with the terms of Paragraph 5 herein. Seller shall pay for the costs of
preparing the Updated Surveys and Seller shall deliver the Updated Surveys to
Purchaser within 45 days after the date hereof.
4. PAYMENT OF CLOSING COSTS.
In addition to the costs set forth in Paragraphs 3.1 and 3.2, Seller shall
pay for the costs of the documentary or transfer stamps to be paid with
reference to the "Deeds" (hereinafter defined), the recording costs, and all
other stamps, intangible, transfer, documentary, recording, sales tax, personal
property tax and surtax imposed by any governmental authority with reference to
any other sale documents delivered in connection with the sale of the
Properties to Purchaser or otherwise imposed in connection with the sale of the
Properties to Purchaser (but excluding any such costs in connection with any
financing utilized by Purchaser).
5. CONDITION OF TITLE.
5.1. Seller agrees to convey to Purchaser fee simple title to each Real
Property and, subject to the terms of Paragraphs 5.2, 5.3, 5.4 and 5.5, without
defect and free and clear of all liens, encumbrances, easements, tenancies,
covenants, restrictions, reservations, conditions and other exceptions to title
by a special warranty deed (individually a "Deed" and collectively the "Deeds")
in recordable form (and in the form set forth in Exhibit E attached hereto
except for those modifications necessary for compliance with state
requirements), subject to the respective Permitted Exceptions and Unpermitted
Exceptions waived or accepted by Purchaser in accordance with the terms hereof.
5.2. Purchaser shall have until 5:00 p.m. Chicago time of the fifteenth
(15th) day after Purchaser's receipt of the last to be received of the Title
Commitments, Updated Surveys and Documents of Record, to examine the Title
Commitments, Updated Surveys and the documents of record (the "Title Review
Period"). Purchaser shall notify Seller ("Unpermitted Exception Notice") in
writing no later than 5:00 p.m. Chicago time on the last day of the Title
Review Period whether any "Unpermitted Exceptions" (as hereinafter defined) are
disclosed in the Title Commitments or Updated Surveys as determined by
<PAGE>
Purchaser in its commercially reasonable discretion. Failure to raise any
Unpermitted Exceptions on or before 5:00 p.m. Chicago time on the last day of
the Title Review Period shall be deemed a waiver of any such matter by
Purchaser. Purchaser shall use commercially reasonably efforts to raise
Unpermitted Exceptions on a Real Property by Real Property basis within ten
(10) days after receipt of the last to be received of the Title Commitment,
Updated Survey and Documents of Record as to each Real Property, but Purchaser
shall not waive its rights to raise Unpermitted Exceptions prior to the
expiration of the Title Review Period. As used herein, the term "Unpermitted
Exception" shall mean with respect to any Real Property (provided the same is
not caused by the actions of Purchaser):
(a) Any building encroachment or sign encroachment (i) on real estate not
owned by Seller, (ii) on a setback line, (iii) in violation of a binding
easement burdening the Real Property, or (iv) by a structure not owned by
Seller onto the Real Property;
(b) Any defect in the Seller's chain of title which prevents Seller from
being able to convey insurable title to any Real Property in fee simple at
Closing under the laws of the state in which the Real Property is located;
(c) Any easement which burdens a Real Property such that access or use is
materially compromised (for example, easement under a structure);
(d) Any lack of access or easements necessary to operate a Real Property
as a self-storage facility in the manner in which said Real Property has been
operated by Seller prior to Closing;
(e) Any liens for the payment of money other than those matters set forth
in Paragraph 3.1(a) herein; provided, however, mortgages and deeds-of-trust
shall not be the subject of Paragraph 5.3 and 5.4 but shall be addressed in
Paragraph 5.5 herein;
(f) Lack of contiguity of any parcels constituting a Real Property;
(g) (i) the failure to be in conformance with the then applicable local
zoning codes, (ii) the failure to be a nonconforming use or have the status
equivalent to a "non-conforming use" and (iii) the existence of an order by the
applicable local jurisdiction which would cause a material interference with
its existing use (other than disclosed in Paragraph 18 herein); and
(h) Oil, water, canal, road or mineral reservations.
5.3. If Purchaser establishes any Unpermitted Exception in accordance with
the terms set forth in Paragraph 5.2 herein, Seller shall have ten (10) days
from receipt of the Unpermitted Exception Notice to cure said Unpermitted
Exception at Seller's sole cost and expense. If Seller is unable to cure all
Unpermitted Exceptions (the parties agreeing that Seller shall not be required
to cure any Unpermitted Exceptions with the payment of money in excess of
$100,000 in the aggregate) on or before the expiration of said ten (10) days,
<PAGE>
then within the next ten (10) day period Seller shall determine the "Title
Costs" (hereinafter defined) with respect to the Unpermitted Exceptions which
Seller has been unable to cure. If the Title Insurer is unwilling to insure
over the Unpermitted Exceptions and the Unpermitted Exceptions cannot be cured
with the payment of money, Seller shall notify Purchaser of same and Purchaser
shall, by written election given to Seller within five (5) days after
Purchaser's receipt of such notice from Seller, either accept title subject to
said Unpermitted Exceptions which cannot be cured with the payment of money
without a reduction in the Purchase Price or terminate this Agreement. If
Purchaser fails to make an election within said five (5) day period, then
Purchaser shall be deemed to have elected to accept title subject to said
Unpermitted Exceptions which cannot be cured with the payment of money without
a reduction in the Purchase Price. If Purchaser elects to terminate, the
Earnest Money, if any, together with all interest earned thereon shall be
immediately returned to Purchaser and thereupon neither party shall have any
rights against the other or any further liability to the other, except for
Purchaser's obligations pursuant to Paragraph 7.1 hereof and as otherwise
specifically set forth in this Agreement. If the Title Insurer is willing to
insure over the Unpermitted Exceptions (and such insurance is reasonably
acceptable to both Seller and Purchaser) or if the Unpermitted Exceptions can
be cured with the payment of money, then the amount required to cure or remove
the Unpermitted Exceptions or to cause the Title Insurer to insure over the
Unpermitted Exceptions shall be referred to as the "Title Costs".
5.4. In the event the Title Costs aggregate a sum that is less than or
equal to $100,000.00, then, at Closing, Seller shall bear the responsibility
for any Title Costs which do not exceed $100,000.00, Purchaser shall receive a
credit to the Purchase Price equal to the Title Costs, and Purchaser shall take
title to the Property subject to those Unpermitted Exceptions for which
Purchaser receives a credit for under this Paragraph 5.4 and those Unpermitted
Exceptions insured over. For example, assuming for illustrative purposes only,
if the Title Costs equal $30,000.00, then Purchaser would only receive a
$30,000.00 credit at Closing. If the aggregate Title Costs are greater than
$100,000.00, then Seller shall have the right to elect, by written notice given
to Purchaser within five (5) days after the determination of the aggregate
Title Costs, to either (i) terminate this Agreement (a "Title Termination
Notice") in which case this Agreement shall be terminated and the Earnest
Money, if any, shall be immediately returned to Purchaser together with all
interest earned thereon and thereupon neither party shall have any rights
against the other or any further liability to the other, except for Purchaser's
obligations pursuant to Paragraph 7.1 hereof and as otherwise specifically set
forth in this Agreement, or (ii) give Purchaser a credit, at Closing, against
the Purchase Price equal to the Title Costs (a "Title Credit Notice"). The
failure of Seller to deliver a Title Termination Notice or a Title Credit
Notice within the time period above provided shall be deemed delivery of the
Title Termination Notice as of the last day of the aforesaid five (5) day
period. If Seller delivers or is deemed to deliver a Title Termination Notice,
then Purchaser shall have the right to negate the Title Termination Notice (in
which case the Title Termination Notice shall be null and void and this
Agreement shall remain in full force and effect), by delivering to Seller, on
or before five (5) days after Purchaser's receipt of the Title Termination
<PAGE>
Notice or deemed receipt of the Title Termination Notice, a statement agreeing
to purchase the Property with a $100,000.00 credit to the Purchase Price, in
which event Seller shall have no obligation to remove or cause the Title
Insurer to insure over such Unpermitted Exceptions and Seller shall give
Purchaser a credit, at the Closing, equal to $100,000.00.
5.5. Notwithstanding anything contained in this Agreement to the contrary,
Seller agrees to cause any mortgages or deeds-of-trust securing an obligation
for the payment of money set forth in the Commitments to be released from the
Real Properties at or prior to the Closing at Seller's own cost and expense and
Purchaser agrees that the proceeds of the Purchase Price may be used at the
Closing for such purpose. With respect to any liens evidencing an obligation
for the payment of money placed against a Real Property after the effective
date of its respective Title Commitment (other than those set forth in
Paragraph 3.1(b)) ("New Monetary Lien"), Seller shall not be obligated to
convey title free and clear of such New Monetary Liens and close the
transaction set forth herein, unless such New Monetary Liens were placed on the
Real Property by reason of Seller's affirmative act (e.g., failure to pay just
debts or obligations when due). If Seller elects not to remove such New
Monetary Liens that are not required to be removed, Purchaser shall have the
right to elect to terminate this Agreement by written notice to Seller within
five (5) business days after receipt of Seller's determination respecting said
New Monetary Lien. If Purchaser delivers written notice to Seller of its
election to terminate in accordance with the preceding sentence, then this
Agreement shall terminate and the Earnest Money, if any, together with all
interest earned thereon shall be immediately returned to Purchaser and
thereupon neither party shall have any rights against the other or any further
liability to the other, except for Purchaser's obligations pursuant to
Paragraph 7.1 and as otherwise specifically set forth in this Agreement. If
Purchaser fails to deliver written notice of its election to terminate on or
before the expiration of the aforesaid five (5) business day period, Purchaser
shall be obligated to consummate the transaction contemplated herein and take
title to the Properties subject to the New Monetary Liens Seller was not
required to remove without a reduction in the Purchase Price.
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
6.1. Except as provided in the indemnity provisions contained in
Paragraph 7.1 of this Agreement, Seller shall bear all risk of loss with
respect to the Property 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 any
Property by fire or other casualty prior to the Closing Date, 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 prior to the Closing Date or to assign and transfer to Purchaser
on the Closing Date all of Seller's right, title and interest in and to all
insurance proceeds paid or payable to Seller on account of such fire or
casualty together with a credit for any deductible applicable to the claim
relating to such insurance proceeds. Seller covenants to maintain at all times
full replacement cost, all risk casualty insurance covering each of the Real
Properties.
<PAGE>
6.2. If between the date of this Agreement and the Closing Date, any
condemnation or eminent domain proceedings are initiated or threatened which
might result in the taking of any part of any Property or the taking or closing
of any right of access to any Property, Seller shall immediately notify
Purchaser of such occurrence. If between the date of this Agreement and the
Closing Date, any condemnation or eminent domain proceedings are initiated,
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. Notwithstanding anything contained herein to the contrary, if
Seller delivers notice of condemnation or eminent domain proceedings which are
initiated or threatened between the date of this Agreement and the Closing
Date, Purchaser shall have the right to participate in all settlement
discussions and other conferences relating thereto involving the Seller.
7. INSPECTION AND AS-IS CONDITION.
7.1. During the period commencing on the date the "Condition Precedent"
(hereinafter defined) set forth in Paragraph 8.1(i) is satisfied and ending at
5:00 p.m. Chicago time on the date which is sixty (60) days following the date
on which the Condition Precedent set forth in Paragraph 8.1(i) is satisfied
(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 each of the Properties, at any reasonable time and
upon reasonable prior notice to Seller, to inspect the Properties, including a
review of Leases located at each of the Properties, and to conduct and prepare
such studies (including, without limitation, the "Environmental Reports"
[hereinafter defined]), tests and surveys (the "Investigations") as Purchaser
may deem reasonably necessary and appropriate. Seller has delivered, or shall
deliver, as applicable, to Purchaser (a) unaudited year end 1995 and 1996 and
year-to-date income statements for the Properties, (b) a rent roll for all
Leases as described in Exhibit M, (c) a representative sample of the Leases
(including all form exhibits, addenda, or attachments thereto, all form
amendments thereof, all form guarantees thereof, (d) all utility bills for the
twelve (12) months preceding this Agreement, if available, and (e) tax bills
and insurance bills from the Properties for 1996.
All of the foregoing tests, investigations and studies to be conducted
under Paragraphs 7.1 and 7.2 by Purchaser shall be at Purchaser's sole cost and
expense, except as set forth herein to the contrary with respect to the
"Environmental Reports" (as defined herein) and Purchaser shall restore the
Properties 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 Properties.
Purchaser shall undertake its obligation to defend set forth in the preceding
sentence using attorneys selected by Seller, in Seller's sole discretion.
<PAGE>
Prior to commencing any such tests, studies and investigations, Purchaser
shall furnish to Seller a certificate of insurance evidencing comprehensive
general public liability insurance insuring the person, firm or entity
performing such tests, studies and investigations and listing Seller and
Purchaser as additional insureds thereunder.
If Purchaser is dissatisfied, in Purchaser's sole discretion, with the
results of the tests, studies or investigations performed or information
received pursuant to this Paragraph 7.1, Purchaser shall have the right to
terminate this Agreement by giving written notice of such termination to Seller
at any time prior to the expiration of the Inspection Period. If written
notice is not received by Seller pursuant to this Paragraph 7.1 prior to the
expiration of the Inspection Period, then the right of Purchaser to terminate
this Agreement pursuant to this Paragraph 7.1 shall be waived. If Purchaser
terminates this Agreement by written notice to Seller prior to the expiration
of the Inspection Period: (i) Purchaser shall promptly deliver to Seller
copies of all studies, reports and other investigations obtained by Purchaser
in connection with its due diligence during the Inspection Period including,
without limitation, the Environmental Reports; and (ii) the Earnest Money, if
any, deposited by Purchaser shall be immediately paid to Purchaser, together
with any interest earned thereon, and neither Purchaser nor Seller shall have
any right, obligation or liability under this Agreement, except for Purchaser's
obligation to indemnify Seller and restore the Property, as more fully set
forth in this Paragraph 7.1
7.2. Purchaser shall order a Phase I Environmental Report pursuant to ASTM
Standard E1527-94 for each Property from a reputable, licensed environmental
engineering firm (the "Environmental Reports") and Purchaser shall provide to
Seller such Environmental Reports no later than seven (7) days prior to the
expiration of the Inspection Period after the date hereof. Seller agrees to
pay for the costs of the Environmental Reports when such costs come due and
Seller's obligation for said costs shall survive the Closing and delivery of
the Deeds or termination of this Agreement; provided, however, that prior to
ordering the Environment Reports, Purchaser shall submit two (2) bids for the
preparation of the Environmental Reports to Seller for Seller's reasonable
approval within three (3) business days of Seller's receipt of both bids. If
the Environmental Reports recommend obtaining a Phase II Environmental Site
Assessment (a "Phase II"), Seller shall pay for the cost of such Phase II,
provided that such Phase II is reasonably necessary and Seller approves the
cost of such Phase II in its reasonable discretion. Purchaser acknowledges
that it will be purchasing the Properties with all faults disclosed in the
Environmental Reports. In the event this Agreement is terminated pursuant to
Paragraph 8 herein, Purchaser shall promptly deliver to Seller copies of all
studies, reports and investigations obtained by Purchaser in connection with
its due diligence of the Properties, including, without limitation, the
Environmental Reports. Notwithstanding anything contained herein to the
contrary, Purchaser's obligations, as more fully set forth in this Paragraph
7.2 shall survive the Closing and the delivery of the Deeds and termination of
this Agreement.
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7.3. Seller makes no representations or warranties relating to the
condition of the Properties other than expressly set forth herein. Purchaser
acknowledges and agrees that it will be purchasing the Properties based solely
upon its inspections and investigations of the Properties, and that Purchaser
will be purchasing the Properties "AS IS" and "WITH ALL FAULTS", based upon the
condition of the Properties as of the date of this Agreement, subject to the
disclosures contained in Exhibit F attached hereto ("Liabilities"), 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 representations or warranties of
any kind upon which Purchaser is relying as to any matters concerning the
Properties, including, but not limited to, the condition of the land or any
improvements comprising the Properties, the existence or non-existence of
Hazardous Materials (as hereinafter defined), economic projections or market
studies concerning the Properties, any development rights, taxes, bonds,
covenants, conditions and restrictions affecting the Properties, water or water
rights, topography, drainage, soil, subsoil of the Properties, the utilities
serving the Properties or any zoning or building laws, rules or regulations or
Environmental Laws (hereinafter defined) affecting the Properties. Seller
makes no representation or warranty that the Properties comply with Title III
of the Americans with Disabilities Act or any fire code or building code.
Purchaser agrees to indemnify and hold Seller and the Affiliates of Seller
harmless from any and all loss, cost and expense arising out of or in any way
related to the Liabilities in Exhibit F. Purchaser hereby releases Seller and
the Affiliates of Seller from any and all liability in connection with any
claims which Purchaser may have against Seller or the Affiliates of Seller,
including, without limitation, in connection with the Liabilities, and
Purchaser hereby agrees not to assert any claims for contribution, cost
recovery or otherwise, against Seller or the Affiliates of Seller, relating
directly or indirectly to the existence of asbestos or Hazardous Materials on,
or environmental conditions of, the Properties, whether known or unknown. As
used herein, "Environmental Laws" means all federal, state and local statutes,
codes, regulations, rules, ordinances, orders, standards, permits, licenses,
policies and requirements (including consent decrees, judicial decisions and
administrative orders) relating to the protection, preservation, remediation or
conservation of the environment or worker health or safety, all as amended or
reauthorized, or as hereafter amended or reauthorized, including without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), 42 U.S.C. Section 9601 et seq., the Resource
Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. Section 6901 et seq.,
the Emergency Planning and Community Right-to-Know Act ("Right-to-Know Act"),
42 U.S.C. Section 11001 et seq., the Clean Air Act ("CAA"), 42 U.S.C. e 7401
et seq., the Federal Water Pollution Control Act ("Clean Water Act"), 33 U.S.C.
Section 1251 et seq., the Toxic Substances Control Act ("TSCA"), 15 U.S.C.
Section 2601 et seq., the Safe Drinking Water Act ("Safe Drinking Water Act"),
42 U.S.C. Section 300f et seq., the Atomic Energy Act ("AEA"), 42 U.S.C.
Section 2011 et seq., the Occupational Safety and Health Act ("OSHA"),
29 U.S.C. Section 651 et seq., and the Hazardous Materials Transportation Act
(the "Transportation Act"), 49 U.S.C. Section 1802 et seq. As used herein,
"Hazardous Materials" means: (1) "hazardous substances," as defined by CERCLA;
<PAGE>
(2) "hazardous wastes," as defined by RCRA; (3) any radioactive material
including, without limitation, any source, special nuclear or by-product
material, as defined by AEA; (4) asbestos in any form or condition; (5)
polychlorinated biphenyls; and (6) any other material, substance or waste to
which liability or standards of conduct may be imposed under any Environmental
Laws. Notwithstanding anything contained herein to the contrary, Purchaser's
obligations, as more fully set forth in this Paragraph 7.3 shall survive the
Closing and the delivery of the Deed and termination of this Agreement.
7.4. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Properties relating to certain periods of
time in which Seller owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Seller makes no representation or
warranty that such material is complete or accurate or that Purchaser will
achieve similar financial or other results with respect to the operations of
the Properties, it being acknowledged by Purchaser that Seller's operation of
the Properties 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 mini-warehouse
facilities and further that Purchaser has relied upon its own investigation and
inquiry with respect to the operation of the Properties and releases Seller and
the Affiliates of Seller from any liability with respect to such historical
information. Notwithstanding anything contained herein to the contrary,
Purchaser's obligations, as more fully set forth in this Paragraph 7.4 shall
survive the Closing and the delivery of the Deeds and termination of this
Agreement.
8. CONDITIONS PRECEDENT; ACQUISITION PROPOSALS.
8.1. Conditions Precedent. Seller's obligation to consummate the
transaction set forth herein shall be conditioned upon the satisfaction of the
following (individually, a "Condition Precedent" and collectively the
"Conditions Precedent"):
(i) On or before fourteen (14) days after the date hereof, obtaining
the binding written agreement of Colonial Storage 85, Inc., a Texas corporation
("Colonial") in its capacity as general partner of Seller to consent to the
transaction set forth in the Agreement if the Condition Precedent set forth in
Paragraph 8.1(ii) is satisfied.
(ii) On or before one hundred twenty (120) days immediately following
the date hereof, obtaining the consent to the transaction set forth in this
Agreement from the limited partners of Seller in accordance with the terms of
the Amended and Restated Agreement and Certificate of Limited Partnership of
Balcor/Colonial Storage Income Fund-85 ("Partnership Agreement").
(iii) On or before one hundred twenty (120) days after the date
hereof, obtaining the consent of Colonial in its capacity as general partner of
the Seller to the transaction set forth in this Agreement.
<PAGE>
Notwithstanding anything contained herein to the contrary, Seller shall have
the right to extend the date for satisfaction of the Conditions Precedent set
forth in Paragraphs 8.1(ii) and (iii) for thirty (30) days following the last
date for satisfaction of such Condition Precedent, by giving prior written
notice to Purchaser on or before the date two (2) days prior to the last date
for satisfaction of such Condition Precedent. In the event that any Condition
Precedent is not satisfied on or before 5:00 p.m. of the last date for
satisfaction (including any extensions of such date in accordance with the
preceding sentence), this Agreement shall automatically terminate and shall be
null and void and the Earnest Money, if any, shall be immediately returned to
Purchaser together with all interest earned thereon and thereupon neither party
shall have any rights against the other or any further liability to the other,
except for Purchaser's obligations pursuant to Paragraph 7.1 hereof and as
otherwise specifically set forth herein. In addition, if the Condition
Precedent set forth in Paragraph 8.1(i) is satisfied and this Agreement has not
been terminated pursuant to Paragraph 8.2.1 hereof, but this Agreement is
terminated because either of the Conditions Precedent contained in Paragraph
8.1(ii) or (iii) is not satisfied, Purchaser shall also have the right to
receive from Balcor Storage Partners-85, an Illinois general partnership
("Balcor"), an amount equal to $300,000.00 to reimburse Purchaser for its costs
and expenses incurred in connection with the negotiation, execution and
performance of its due diligence hereunder; provided, however, Purchaser's
rights in this sentence are subject to (x) the delivery to Seller of all third
party reports prepared for the benefit of Purchaser's review of the Properties
and (y) the expiration or waiver of Purchaser's right to terminate this
Agreement on or before the expiration of the Inspection Period pursuant to
Paragraph 7.1 herein.
8.2. Acquisition Proposals.
8.2.1. Notwithstanding anything contained herein to the contrary, if
Seller receives an "Acquisition Proposal" (hereinafter defined) prior to the
satisfaction of the Conditions Precedent and Balcor and Colonial, after
consultation with and based upon the advice of Katten Muchin & Zavis or another
nationally recognized law firm selected by Seller, have determined in good
faith that the recommendation of the Acquisition Proposal to the limited
partners of Seller is necessary by Balcor and Colonial to comply with their
fiduciary duties to their limited partners under applicable law, then Seller
shall have the right to terminate this Agreement upon written notice to
Purchaser, and Seller shall deliver such written notice to Purchaser within
seven (7) days after such determination. An "Acquisition Proposal" shall mean
any offer with respect to a merger, acquisition, tender offer, exchange offer,
consolidation or similar transaction involving, or any purchase of the
Properties or any equity securities or partnership interests of, Seller, other
than the transaction contemplated by this Agreement. Balcor agrees not to
solicit an Acquisition Proposal; provided, however, nothing contained herein
shall prohibit Balcor from furnishing information to or entering into
discussions or negotiations with, any person or entity that makes a bona fide
Acquisition Proposal unsolicited by Balcor, if Balcor, after consultation with
and based upon the advice of Katten Muchin & Zavis, or another nationally
recognized law firm selected by Balcor, determines in good faith that such
<PAGE>
action is required for Balcor to comply with their fiduciary duties to their
limited partners under applicable law. Purchaser acknowledges that Colonial is
not bound by any restrictions involving the solicitation of an Acquisition
Proposal. In the event this Agreement is terminated by Seller pursuant to this
Paragraph 8.2 herein, this Agreement shall be null and void and the Earnest
Money, if any, shall be immediately returned to Purchaser together with all
interest earned thereon and thereupon neither party shall have any rights
against the other or have any further liability to the other, except for
Purchaser's obligations pursuant to Paragraph 7.1 hereof and as otherwise
specifically set forth herein and Seller's obligations pursuant to Paragraph
8.2.2 hereof.
8.2.2. (a) If Seller terminates this Agreement pursuant to
Paragraph 8.2.1 above, then together with notice of such termination, Balcor
shall pay Purchaser an amount (the "Termination Amount") equal to $300,000 to
reimburse Purchaser for its costs and expenses incurred in connection with the
negotiation, execution and performance of its due diligence hereunder. For
purposes of this Paragraph 8.2.2, an offer that is in the form of a tender
offer shall be deemed to be an "Acquisition Proposal" only if such tender offer
is offered to 75% or more of the outstanding limited partnership interests.
(b) The parties acknowledge and agree that the provisions for
payment of the Termination Amount are included herein in order to induce
Purchaser to enter into this Agreement and to reimburse Purchaser for incurring
costs and expenses related to entering into this Agreement and consummating the
transactions contemplated by this Agreement.
8.2.3. Subject to the provisions of Paragraph 8.2.1, Balcor shall
recommend that the limited partners of Seller approve this Agreement and the
transactions contemplated hereby.
9. CLOSING. The closing of this transaction (the "Closing") shall occur on
the date which is seven (7) business days after the satisfaction of the
Conditions Precedent (the "Closing Date"), at the office of Title Insurer,
Chicago, Illinois at which time Seller shall deliver possession of the
Properties to Purchaser. This transaction shall be closed in accordance with
the escrow instructions attached hereto as Exhibit G (the "Closing Escrow
Instructions"). The Purchase Price shall be paid and all documents necessary
for the consummation of this transaction shall be delivered through escrow on
or prior to the Closing Date. The parties shall close by a "New York style
closing", the escrow instructions shall be conformed with such circumstance and
Seller shall execute any gap undertaking required by the Title Insurer, whereby
on the Closing Date Seller shall receive the sale proceeds and Purchaser shall
receive marked-up Title Commitments. The escrow costs and fees, including the
fees for the New York style closing, shall be paid by Seller.
10. CLOSING DOCUMENTS.
10.1. On the Closing Date, Seller and Purchaser shall execute and deliver
to one another a joint closing statement for each Property. In addition,
Purchaser shall deliver to Seller the balance of the Purchase Price, an
<PAGE>
assumption of the documents set forth in Paragraph 10.2.3 and 10.2.4, an
opinion of Purchaser's counsel in form satisfactory to Seller stating that the
transaction contemplated by this Agreement is not subject to filing or
notification requirements of the Hart-Scott-Rodino Anti-Trust Improvements Act
of 1976, as amended ("HSR Act"), 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.
10.2. On the Closing Date, Seller shall deliver to Purchaser the
following:
10.2.1. the Deeds, subject to Permitted Exceptions and those
Unpermitted Exceptions waived by Purchaser;
10.2.2. a special warranty bill of sale for each Property conveying
the Personal Property (in the form of Exhibit H attached hereto);
10.2.3. assignment and assumption of intangible property for each
Property (in the form attached hereto as Exhibit I), including, without
limitation, the Service Contracts, licenses, permits and business licenses;
10.2.4. an assignment and assumption of leases and security deposits
for each Property (in the form attached hereto as Exhibit J);
10.2.5. non-foreign affidavit (in the form of Exhibit K attached
hereto);
10.2.6. original, and/or copies of, the Leases in Seller's
possession (which deliveries may be made at the respective Properties);
10.2.7. all documents and instruments reasonably required by the
Title Insurer to issue the Title Policies, including owner's affidavits to
remove the standard printed exceptions;
10.2.8. possession of the Properties to Purchaser subject to the
terms of the Leases;
10.2.9. evidence of the termination of the management agreement for
each Property;
10.2.10. notice to the tenants of each 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 L);
and
10.2.11. an updated, certified rent roll for each Property.
11. DEFAULT BY PURCHASER. ALL EARNEST MONEY, IF ANY, DEPOSITED OR REQUIRED TO
BE 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
<PAGE>
RETAIN ALL OF THE EARNEST MONEY, IF ANY, AND HAVE THE RIGHT TO RECEIVE ALL
EARNEST MONEY, IF ANY, REQUIRED TO BE DEPOSITED (IF NOT SO DEPOSITED) AND THE
INTEREST THEREON AS SELLER'S SOLE RIGHT TO DAMAGES OR ANY OTHER REMEDY, EXCEPT
FOR PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER AND RESTORE THE PROPERTY AS SET
FORTH IN PARAGRAPH 7.1 HEREOF. 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, IF ANY, HAS BEEN AGREED UPON, AFTER
NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES.
12. 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, IF
ANY, 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 $750,000.00 FROM SELLER AS
LIQUIDATED DAMAGES. THE PARTIES HAVE AGREED THAT PURCHASER'S ACTUAL DAMAGES,
IN THE EVENT OF A DEFAULT BY SELLER, WOULD BE EXTREMELY DIFFICULT OR
IMPRACTICAL TO DETERMINE. THEREFORE, BY PLACING THEIR INITIALS BELOW, THE
PARTIES ACKNOWLEDGE THAT $750,000.00 HAS BEEN AGREED UPON, AFTER NEGOTIATION,
AS THE PARTIES' REASONABLE ESTIMATE OF PURCHASER'S DAMAGES. NOTWITHSTANDING
ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF SELLER'S DEFAULT IS ITS WILLFUL
REFUSAL TO DELIVER THE DEEDS, THEN PURCHASER WILL BE ENTITLED TO SUE FOR
SPECIFIC PERFORMANCE. UNDER NO CIRCUMSTANCES SHALL PURCHASER BE ENTITLED TO
RECEIVE BOTH SPECIFIC PERFORMANCE AND LIQUIDATED DAMAGES.
13. PRORATIONS.
13.1. Rents (exclusive of delinquent rents, but including prepaid rents);
prepaid associations dues, refundable security deposits (which will be assigned
to and assumed by Purchaser and credited to Purchaser at Closing); fuels;
prepaid operating expenses; real and personal property taxes prorated on a
"net" basis (i.e. adjusted for all tenants' liability, if any, for such items);
operating expenses which are reimbursable by the tenants for the period prior
to the Closing Date less any amount previously paid by the tenants shall be
credited to Seller; and other similar items shall be adjusted ratably as of
11:59 p.m. on the date prior the Closing Date, and credited to the balance of
the cash due at Closing. Utilities, including water, sewer, electric, and gas
shall be prorated at Closing based on the most recent ascertainable data.
Seller shall pay at Closing the bills therefor for the period to and including
the Closing, and the Purchaser shall pay the utility bills therefor for all
periods subsequent thereto. If the utility company will not issue separate
bills, the Purchaser shall receive a credit against the Purchase Price for
Seller's portion and shall pay the entire utility bill after Closing. If
Seller has pre-paid any such utilities (so long as no more than thirty (30)
days in advance in the ordinary course of business), then Purchaser shall be
charged its portion of such payment at Closing. No proration shall be made for
utility expenses that are separately metered to and paid directly by tenants
and for which Seller has no obligation to pay. Furthermore, the Purchaser and
the Seller may accomplish the transfer of utility accounts by arranging for a
<PAGE>
change of address on utility billing accounts to the Purchaser's address, if
such a procedure is possible and convenient and mutually acceptable to
Purchaser and Seller. Seller shall be reimbursed at Closing for any utility
deposits which the Seller has deposited with any utility company and which will
be assigned to the Purchaser at Closing. Assessments payable in installments
which are due subsequent to the Closing Date shall be paid by Purchaser.
Seller shall use good faith efforts to deliver any information regarding
special assessments to Purchaser within fifteen (15) days of Seller's receipt
of such information. 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 Purchaser shall assume Seller's obligations
under the Seller's existing real estate tax consulting agreements with respect
to the Properties, i.e., those agreements which Seller has entered into with
firms who are entitled to a commission based on services rendered and the
extent to which they are able to achieve a reduction in the real estate taxes
otherwise payable with respect to the Properties, but only to the extent the
performance of such services occurs prior to the Closing Date. Seller shall
deliver to Purchaser all such real estate tax consulting contracts within
thirty (30) days of the date hereof. The fees or commissions payable to said
consultants (if any) shall be treated as a portion of the real estate tax
liability to be pro-rated as of the Closing Date. All costs associated with
telephone directory listings and any other prepaid advertisements shall be
prorated as of the Closing Date so that Seller shall be responsible for any
costs associated therewith prior to the Closing Date and Purchaser shall be
responsible for any costs associated therewith arising from and after the
Closing Date. All prorations described in this Agreement shall be deemed final
as prorated on the Closing Date, except as to (a) delinquent rent referred to
in Paragraph 13.2 below and (b) real and personal property taxes which shall be
reprorated on December 1, 1997 based upon the then most recently ascertainable
tax information.
13.2. For a period of ninety (90) days following the Closing Date, all
basic rent paid following the Closing Date by any tenant of the Properties who
is indebted under a Lease for basic rent for any period prior to and including
the Closing Date after the payment to Purchaser of all current basic rent shall
be deemed a "Post-Closing Receipt" until such time as all such indebtedness is
paid in full. On the last business day of each month following each receipt by
Purchaser of a Post-Closing Receipt, Purchaser shall pay such Post-Closing
Receipt to Seller. Purchaser shall use its best efforts to collect all amounts
which, upon collection, would constitute Post-Closing Receipts hereunder.
Within 120 days after the Closing Date, Purchaser shall deliver to Seller a
reconciliation statement of Post-Closing Receipts through the first 90 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. 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 and the cost of performing Seller's
audit. After the Closing, in no event shall Seller attempt to evict a tenant
through any manner. Paragraph 13.2 of this Agreement shall survive the Closing
and the delivery and recording of the deed.
<PAGE>
13.3. To the extent it is reasonably possible for the Seller to do so,
the Seller shall grant (or shall arrange for the owner thereof to grant) to
Purchaser at Closing a temporary license and right to use the logos currently
used by the Property which are the property of an Affiliate of Seller, in place
advertising, telephone directory listings and advertisements, and telephone
numbers, at each of the Properties pursuant to the following terms and
conditions:
(a) The temporary license granted by this paragraph shall commence on the
Closing Date and shall expire on the day which is one hundred eighty (180) days
subsequent to the date when the public telephone directory pertaining to each
Property is published subsequent to the Closing Date. During such period,
Purchaser shall have the right to use the existing logos, in place advertising,
telephone directory listings and advertisements, and telephone numbers, with
respect to each Property without additional compensation to the Seller except
as set forth in Paragraph 13.1 herein. Purchaser shall not use the existing
logos or trade name on stationery, business cards, contracts or other
documents, and shall not use the existing trade name in responding to oral
inquiries regarding the Properties except to identify a Property as formerly
owned by the Seller.
(b) The Seller stipulates that there is full and adequate consideration
for the license herein granted.
(c) Purchaser shall make arrangements with the pertinent telephone
companies so that all existing telephone directory listings and advertisements
and signs can be replaced in due course and within the license period specified
above. In the event that the publication close date for any publication in
which Seller currently has a telephone directory listing and/or advertisement
occurs after the date hereof but before the Closing Date, Purchaser shall have
the right to place a listing and/or advertisement in such publication at
Purchaser's sole cost and expense. Such listing and/or advertisement may list
the Purchaser's name and telephone number. Seller may also place a listing
and/or advertisement in such publication, and in the event that Seller decides
to place such a listing and/or advertisement, Seller shall be entitled to a
pro-rata credit for such portion of the cost of such listing and/or
advertisement attributable to the period after Closing.
(d) In the event any third party (such as telephone company or billboard
company) makes a separate charge for the use of such listings or advertising
subsequent to the Closing Date, then Purchaser shall be responsible to pay same
subsequent to the Closing Date (but no such payment shall accrue to the benefit
of the Seller or constitute a credit against a debt otherwise owed by the
Seller to said third party).
(e) Purchaser's temporary license set forth in this paragraph shall
expire on the date(s) set forth above. If Purchaser continues to use the name
currently being used by the Property subsequent to the expiration date of this
temporary license set forth above, then Purchaser shall be liable for and shall
pay to the owner of said rights a license fee equal to One Hundred Dollars
($100.00) for each day after the permitted date set forth above for each
Property for which Purchaser continues to use the existing trade name. In no
event, however, shall such extended license period exceed ninety (90)
additional days.
<PAGE>
(f) If Purchaser continues to use said logos or trade names beyond the
period allowed above for which a temporary license has been granted, then
Seller (or the owner of said rights) shall have all legal and equitable
remedies authorized by federal law or the laws of the state where such Property
is located to prevent such unauthorized use or to recover any damages
authorized by such laws.
14. SERVICE CONTRACTS. Within twenty (20) days after the date hereof, Seller
shall deliver to Purchaser a copy of all service contracts and advertising
agreements affecting the Properties (the "Delivered Contracts"). Any and all
Delivered Contracts terminable upon thirty (30) days notice without a
termination fee, all advertisement agreements and all other Delivered Contracts
which have not been objected to by Purchaser within twenty (20) days after
Purchaser's receipt thereof shall be deemed "Service Contracts." Seller shall
assign the Service Contracts to Purchaser at Closing, and Purchaser shall
assume responsibility and obligations under the Service Contracts. Seller
agrees to terminate any and all management agreements affecting the Properties
as of the Closing Date. Notwithstanding anything contained herein to the
contrary, (a) to the extent any of the Service Contracts are not assignable and
with respect to Delivered Contracts which are not Service Contracts, Seller
shall terminate said agreements as of the Closing Date and Purchaser shall pay
any and all termination fees required as a result thereof (except to the extent
such termination fee is payable to an Affiliate of Seller) and (b) to the
extent any of the Service Contract requires the consent of the service supplier
or product supplier and, if Seller is unable to obtain such consent, Seller
shall terminate such agreement as of the Closing Date and Purchaser shall pay
any termination fee required as a result thereof. Seller shall not be required
to pay any fees in connection with obtaining consents for the assignment of a
Service Contract.
15. RECORDING. Neither this Agreement nor a memorandum thereof shall be
recorded and the act of recording by Purchaser shall be an act of default
hereunder by Purchaser and subject to the provisions of Paragraph 11 hereof.
16. 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 11 hereof. Notwithstanding the
foregoing, Purchaser may assign its interest in this Agreement without the
consent of Seller to any entity in which Robert Amsdell is a principal,
provided that assignee assumes the obligations of Purchaser hereunder. If any
assignee of Purchaser under this Agreement petitions or applies for relief in
bankruptcy or Assignee is adjudicated as a bankrupt or insolvent, or Assignee
files any petition, application for relief or answer-seeking or acquiescing in
any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief for itself under any present or future federal,
state or other statute, law, code or regulation relating to bankruptcy,
insolvency, or other relief for debtors (collectively, a "Bankruptcy Filing")
on or before the Closing Date, said Bankruptcy Filing shall be a default under
this Agreement and Purchaser shall indemnify Seller for all costs, attorney's
fees and expenses of Seller resulting from Seller's efforts to obtain the
Earnest Money, if any, as liquidated damages and to clear title to the Property
from any encumbrance resulting from the Bankruptcy Filing.
<PAGE>
17. 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 Insignia Mortgage & Investment Company (to be paid by Balcor).
Balcor's commission to Insignia Mortgage & Investment Company shall only be
payable in the event the transaction set forth herein closes. Purchaser and
Seller shall each indemnify, defend and hold the other party hereto harmless
from any claim whatsoever (including without limitation, reasonable attorney's
fees, court costs and costs of appeal) from anyone claiming by or through the
indemnifying party any fee, commission or compensation on account of this
Agreement, its negotiation or the sale hereby contemplated other than to
Insignia Mortgage & Investment Company. The indemnifying party shall undertake
its obligations set forth in this Paragraph 17 using attorneys selected by the
indemnifying party and reasonably acceptable to the indemnified party. The
provisions of this Paragraph 17 will survive the Closing and delivery of the
Deed.
18. REPRESENTATIONS AND WARRANTIES.
18.1. Any reference herein to Seller's knowledge or notice of any matter
or thing shall only mean such knowledge or notice that has actually been
received by Marty Dempski (referred to as the "Seller's Representative"), and
any representation or warranty of the Seller is based upon those matters of
which the Seller's Representative has actual knowledge. Any knowledge or
notice given, had or received by any of Seller's agents, servants or employees
shall not be imputed to Seller, the general partner or limited partners of
Seller, the subpartners of the general partner or limited partners of Seller or
Seller's Representative.
18.2. Subject to the limitations set forth in Paragraph 18.1, Seller
hereby makes the following representations and warranties, which
representations and warranties are made to Seller's knowledge and which shall
not survive Closing: (i) except as described on Exhibit F attached hereto,
Seller has no knowledge of any pending or threatened litigation, claim, cause
of action or administrative proceeding concerning the Property, including any
action for eminent domain or condemnation; (ii) the rent rolls which Seller has
submitted to the Purchaser as described in Exhibit M attached hereto and
updated as of the Closing Date are accurate as of the date set forth thereon;
and (iii) Seller has not received any notice from any governmental authority
having jurisdiction over the Properties of any uncured violation of any
Environmental Law with respect to the Properties.
18.3. Purchaser hereby represents and warrants to Seller that
(i) Purchaser has the full right, power and authority to execute this Agreement
and consummate the transactions contemplated herein, (ii) neither Purchaser nor
any of Purchaser's affiliates is a "party in interest" (as defined in Section
406 of the Employee Retirement Income Security Act of 1974, as amended and
supplemented) to Seller or any general partner or limited partner of Seller,
and (iii) the transaction contemplated in this Agreement is not subject to any
filing notification requirements of the HSR Act.
19. LIMITATION OF LIABILITY. Neither Seller, nor any Affiliate of Seller, nor
any of their respective beneficiaries, shareholders, partners, officers,
<PAGE>
directors, agents or employees, heirs, successors or assigns shall have any
personal liability of any kind or nature for or by reason of any matter or
thing whatsoever under, in connection with, arising out of or in any way
related to this Agreement and the transactions contemplated herein, and
Purchaser hereby waives for itself and anyone who may claim by, through or
under Purchaser any and all rights to sue or recover on account of any such
alleged personal liability.
20. TIME OF ESSENCE. Time is of the essence of this Agreement. If the final
day of any period which is set forth in this Agreement falls on a Saturday,
Sunday, or legal holiday under the laws of the United States or the State of
Illinois, then in such event, the duration of such period shall be extended to
the next day which is not a Saturday, Sunday, or other legal holiday. Any
reference to a time of day (e.g., 12:00 noon) shall refer to Chicago, Illinois
time.
21. RADON GAS. 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
YOUR COUNTY PUBLIC HEALTH UNIT. THIS PARAGRAPH IS PROVIDED FOR INFORMATIONAL
PURPOSES PURSUANT TO SECTION 404.056(8), FLORIDA STATUTES, (1988).
22. CONSIDERATION. On or before the execution of this Agreement, Purchaser
shall deliver to Seller One Hundred And No/100 Dollars ($100.00) cash (the
"Independent Contract Consideration"), which amount has been bargained for and
agreed to as consideration for Purchaser's right to purchase the Properties
pursuant to this Agreement and for Seller's execution and delivery of this
Agreement. The Independent Contract Consideration is in addition to and
independent of all other consideration provided in this Agreement, and is
nonrefundable in all events.
23. WAIVER OF DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT. Purchaser
waives its rights under the Texas Deceptive Trade Practices-Consumer Protection
Act ("TDTPA"), Section 17.41 et seq., Business & Commerce Code, a law that
gives consumers special rights and protections. After consultation with an
attorney/legal counsel of Purchaser's own selection, Purchaser voluntarily
consents to this waiver. Purchaser covenants, represents and warrants that
such attorney/legal counsel was not directly or indirectly identified,
suggested, or selected by Seller or an agent of Seller.
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 overnight courier
such as Federal Express, by facsimile transmission 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 A-200
Bannockburn, Illinois 60015
Attention: Ilona Adams
(847) 317-4462 (FAX)
with copies to: The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attention: Jerry Ogle
(847) 317-4380
(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: Amsdell Companies
The Parkview Building
6745 Engle Road, Suite 300
Cleveland, OH 44130
Attention: Robert J. Amsdell
(216) 234-0700
(216) 234-5899 (FAX)
and one copy to: Moraitis & Cofar
915 Middle River Drive
Suite 506
Ft. Lauderdale, Florida 33304
Attention: George Moraitis, Esq.
(954) 563-4163
(954) 563-5913 (FAX)
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be
deemed to be delivered or made on the next business day if sent by overnight
courier, or the same day as given if sent by facsimile transmission and
received by 5:00 p.m. Chicago time or on the 4th business day after the same is
deposited in the United States Mail as registered or certified matter,
addressed as above provided, with postage thereon fully prepaid. Any such
notice, demand or document not given, delivered or made by registered or
certified mail, by overnight courier or by facsimile transmission as aforesaid
shall be deemed to be given, delivered or made upon receipt of the same by the
party to whom the same is to be given, delivered or made. Copies of all
notices shall be served upon the Escrow Agent.
<PAGE>
25. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute two
(2) copies of this Agreement and three (3) copies of the Earnest Money Escrow
Agreement and forward them to Seller for execution, accompanied with the
Earnest Money, if any, payable to the Escrow Agent set forth in the Earnest
Money Escrow Agreement. Seller will forward one (1) copy of the executed
Agreement to Purchaser and will forward the following to the Escrow Agent:
(A) Earnest Money, if any;
(B) One (1) fully executed copy of this Agreement; and
(C) Three (3) copies of the Earnest Money 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.
26. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED, AND THE RIGHTS AND
OBLIGATIONS OF SELLER AND PURCHASER HEREUNDER DETERMINED, IN ACCORDANCE WITH
THE SUBSTANTIVE LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES.
27. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties and supersedes all other negotiations, understandings and
representations made by and between the parties and the agents, servants and
employees.
28. COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument. To facilitate the execution of this Agreement, Seller
and Purchaser may execute and exchange by telephone facsimile counterparts the
signature pages, with each facsimile being deemed an "original" for all
purposes.
29. CAPTIONS. Paragraph titles or captions contained herein are inserted as a
matter of convenience and for reference, and in no way define, limit, extend or
describe the scope of this Agreement or any provision hereof.
30. WRITTEN AMENDMENTS ONLY. All amendments to this Agreement must be in
writing and executed by Purchaser and Seller to be enforceable.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date first set forth above.
PURCHASER:
ACQUIPORT/AMSDELL I LIMITED PARTNERSHIP, a
Delaware limited partnership
By: Amsdell Partners, Inc., an Ohio corporation,
its general partner
By: /s/ Robert Amsdell
-----------------------------------
Name:
-----------------------------------
Its:
-----------------------------------
SELLER:
BALCOR/COLONIAL STORAGE INCOME FUND - 85,
an Illinois limited partnership
By: Balcor Storage Partners - 85, an Illinois
general partnership, a General Partner
By: The Balcor Company, a Delaware
corporation, its General Partner
By: /s/ John K. Powell, Jr.
----------------------------------
Name: John K. Powell, Jr.
----------------------------------
Its: Senior Vice President
----------------------------------
DATE OF SELLER'S ACCEPTANCE:
JUNE 16, 1997
<PAGE>
ACKNOWLEDGMENT OF COUNSEL FOR PURCHASER
The undersigned has represented Purchaser in connection with the
transaction contemplated by this Agreement and executes this Agreement for the
sole purpose of complying with Section 17.42(a)(3) of the TDTPA, as same
applies to the waiver and release contained in this Agreement.<PAGE>
[Colonial 85]
_________________ of Insignia Mortgage & Investment Company ("Seller's Broker")
executed this Agreement in its capacity as a real estate broker and
acknowledges that the fee or commission due it from Balcor as a result of the
transaction described in this Agreement is as set forth in that certain Listing
Agreement, dated __, 199_ between Seller and Seller's Broker (the "Listing
Agreement"). Seller's Broker also acknowledges that payment of the aforesaid
fee or commission is conditioned upon the Closing and the receipt of the
Purchase Price by the Seller. Seller's Broker agrees to deliver a receipt to
the Seller at the Closing for the fee or commission due Seller's Broker and a
release, in the appropriate form, stating that no other fees or commissions are
due to it from Seller or Purchaser.
Insignia Mortgage & Investment Company
By:
------------------------------------
<PAGE>
Exhibits
A - Common Description of Real Property
B - Legal Description of Real Property
C - Earnest Money Escrow Agreement
D - Survey Standards and Surveyor's Certificate
E - Deed
F - Pending or Threatened Claims
G - Closing Escrow Instructions
H - Bill of Sale
I - Assignment and Assumption of Intangible Property
J - Assignment and Assumption of Leases and Security Deposits
K - Non-Foreign Affidavit
L - Notice to Tenants
M - Master Rent Roll
<PAGE>
EXHIBIT E
DEED
THIS DOCUMENT WAS PREPARED BY RETURN TO:
Katten Muchin & Zavis Moraitis & Cofar
525 W. Monroe Street 915 Middle River Drive
Suite 1600 Suite 506
Chicago, Illinois 60661 Ft. Lauderdale, FL 33304
Attention: Kyle R. Hauberg, Esq. Attention: George Moraitis, Esq.
Recorded at o'clock M.
----- --- ------------
Reception No. Recorder
-------- ------------
- -------------------------------------------------------------------------------
STATE OF )
) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF )
THAT, BALCOR/COLONIAL STORAGE INCOME FUND - 85, an Illinois limited
partnership ("Grantor"), for and in consideration of the sum of
[IN SOME STATES ACTUAL CONSIDERATION REQUIRED] ($ ) and other good and
valuable consideration in hand paid to the undersigned by Amsdell Companies, an
Ohio corporation ("Grantee"), whose mailing address is 6745 Engle Road, Suite
300, Cleveland, Ohio 44130, Attn: Robert J. Amsdell, the receipt and
sufficiency of such consideration being hereby acknowledged, has GRANTED,
BARGAINED, SOLD, AND CONVEYED, and by these presents does hereby GRANT,
BARGAIN, SELL, ALIEN, CONVEY and CONFIRM unto Grantee that certain real
property being more particularly described in Schedule 1 attached hereto and
made a part hereof for all purposes, together with all improvements and
fixtures situated thereon (collectively, the "Property"); subject, however, to
those matters described in Schedule 2 attached hereto and made a part hereof
for all purposes.
TO HAVE AND TO HOLD the Property, together with all and singular the
rights and appurtenances thereto in anywise belonging, unto Grantee, its
successors, and Grantor hereby agrees to WARRANT AND FOREVER DEFEND all and
singular the Property unto Grantee, its successors and assigns, against every
person whomsoever lawfully claiming, or claim the same, or any part thereof,
by, through or under Grantor but not otherwise.
<PAGE>
EXECUTED this day of , 1997.
---- ---------------
GRANTOR:
BALCOR/COLONIAL STORAGE INCOME FUND - 85,
an Illinois limited partnership
By: Balcor Storage Partners - 85, an Illinois
partnership, a General Partner
By: The Balcor Company, a Delaware
corporation, its General Partner
By:
---------------------------------
Name:
---------------------------------
Its:
---------------------------------
By: Colonial Storage 85, Inc., a Texas
corporation, a General Partner
By:
-----------------------------------
Name:
-----------------------------------
Its:
-----------------------------------
Witness:
- -----------------------------
Print Name of Witness
- -----------------------------
Witness Signature
<PAGE>
ACKNOWLEDGMENTS
STATE OF )
) SS.
COUNTY OF )
This foregoing instrument was acknowledged before me this day of ,
----- -----------
199 by , of of
- --------------------------- ------------------ -----------------
, a(n) .
- ----------- -----------------------
--------------------------------
Notary Public
My Commission Expires:
- ------------------------ Notary's name printed:
--------------------------------
Schedule 1
Legal Description
Schedule 2
Permitted Exceptions
<PAGE>
EXHIBIT H
SPECIAL WARRANTY BILL OF SALE
, a(n) ("Seller"), in
consideration of the sum of Ten and No/100 Dollars ($10.00), in hand paid, and
other good and valuable consideration, the receipt, adequacy and sufficiency of
which is hereby acknowledged does hereby sell, assign, transfer, and set over
to , a ("Grantee"), the personal property
described on Schedule 1 attached hereto ("Personal Property"), presently
located on the real estate commonly known as , City of
, State of and legally described on Schedule
2 attached hereto (the "Real Estate"). Seller does hereby covenant with
Grantee that at the time of delivery of this Special Warranty Bill of Sale, the
Personal Property is free from all encumbrances made by the Seller, and that
the Seller will warrant and defend the same against the lawful claims and
demands of all persons claiming by, or through or under the Seller, but against
none other.
Date: , 1997
SELLER:
BALCOR/COLONIAL STORAGE INCOME FUND - 85,
an Illinois limited partnership
By: Balcor Storage Partners - 85, an Illinois
partnership, a General Partner
By: The Balcor Company, a Delaware corporation,
its General Partner
By:
-------------------------------------
Name:
-------------------------------------
Its:
-------------------------------------
By: Colonial Storage 85, Inc., a Texas corporation,
a General Partner
By:
--------------------------------------
Name:
--------------------------------------
Its:
--------------------------------------
<PAGE>
STATE OF )
) SS
COUNTY OF )
I, , a notary public in and for said County, in the
State aforesaid, DO HEREBY CERTIFY THAT personally known to
me to be the of , and personally known to me to be
the same person whose name is subscribed to the foregoing instrument, appeared
before me and acknowledged that as such of said , as h free
and voluntary act, and as the free and voluntary act and deed of said
corporation and partnership, for the uses and purposes therein set forth.
GIVEN under my hand and notarial seal this day of , 199 .
--- ------------- -
------------------------------
Notary Public
My Commission Expires: [SEAL]
- ------------------------------
Schedule 1
PERSONAL PROPERTY
Schedule 2
LEGAL DESCRIPTION
