SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) August 19, 1996
BALCOR CURRENT INCOME FUND-85
A REAL ESTATE LIMITED PARTNERSHIP
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Exact Name of Registrant
Illinois 0-14352
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State or other jurisdiction Commission file number
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 36-3344227
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Address of principal I.R.S. Employer
executive offices Identification
Number
60015
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Zip Code
Registrant's telephone number, including area code:
(847) 267-1600
<PAGE>
ITEM 5. OTHER EVENTS
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a) Willow Lawn Self-Storage facility
In 1986, the Partnership acquired the Willow Lawn Self-Storage facility,
Richmond, Virginia (the "Property"), utilizing approximately $3,026,000 in
offering proceeds. In 1992, the Partnership obtained a $14,100,000 mortgage
loan collateralized by three of its properties, including the Property, the
proceeds of which was used to repay mortgage loans collateralized by two of the
Partnership's other properties, pay refinancing costs and for other Partnership
purposes. In 1995, the loan was refinanced and the new loan is collateralized
by a Partnership property. The Property currently has no underlying debt.
On August 19, 1996, the Partnership contracted to sell the Property to an
unaffiliated party, SUSA Partnership L.P., a Tennessee partnership, which is an
affiliate of the entity which originally sold the Property to the Partnership.
The sale price was $5,603,470 and the sale closed on August 30, 1996. From the
proceeds of the sale, the Partnership paid approximately $22,000 in closing
costs and received the remaining sale proceeds of approximately $5,581,000.
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.
b) El Dorado Hills Apartments
As previously reported, on June 12, 1996, the Partnership contracted to sell El
Dorado Hills Apartments, San Diego, California, to an unaffiliated party,
Security Capital Pacific Trust, a Maryland real estate investment trust, for a
sale price of $29,350,000. The sale closed on August 30, 1996. The purchaser
took title to the property subject to the existing mortgage loan which had an
outstanding principal balance of approximately $16,772,000 at closing. From
the proceeds of the sale, the Partnership paid $83,859 as its one-half share of
the loan transfer fee, approximately $35,000 in closing costs, $367,000 to an
unaffiliated party as a brokerage commission and $222,000 to an affiliate of
the third party providing property management services for the property for
services rendered in connection with the sale. The Partnership received the
remaining sale proceeds of approximately $11,870,000.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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(A) FINANCIAL STATEMENTS AND EXHIBITS:
None
(B) PRO FORMA FINANCIAL INFORMATION:
None
(C) EXHIBITS:
(99) (a) Agreement of Sale and attachment thereto relating to the
sale of Willow Lawn Self-Storage facility, Richmond,
Virginia.
(b) First Amendment to Agreement of Sale dated August 15, 1996
relating to the sale of Willow Lawn Self-Storage facility,
Richmond, Virginia.
(c) Amendment to Agreement of Sale and Escrow Agreement dated
August 30, 1996 relating to the sale of Willow Lawn Self-
Storage facility, Richmond, Virginia.
(d) Letter Agreement dated August 30, 1996 relating to the sale
of the Willow Lawn Self-Storage facility, Richmond,
Virginia.
No information is required under Items 1, 2, 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 CURRENT INCOME FUND-85
A REAL ESTATE LIMITED PARTNERSHIP
By: Balcor Current Income Partners-85,
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: September 20, 1996
<PAGE>
Willow Lawn
Richmond, Virginia
AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), entered into as of the 19th day
of August, 1996, by and between SUSA Partnership L.P., a Tennessee limited
partnership ("Purchaser"), and Willow Lawn Partners, an Illinois limited
partnership ("Seller").
W I T N E S S E T H:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to sell
at the price of Five Million Six Hundred Thousand And No/100 Dollars
($5,600,000.00) (the "Purchase Price"), that certain property commonly known as
the Willow Lawn Self-Storage facility, Richmond, Virginia, legally described on
Exhibit A attached hereto (the "Property"). Included in the Purchase Price is
all of the personal property set forth on Exhibit B attached hereto (the
"Personal Property").
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as follows:
2.1. Upon the execution of this Agreement, the sum of One Hundred
Thousand and No/100 Dollars ($100,000.00) (the "Earnest Money") to be held in
escrow by and in accordance with the provisions of the Escrow Agreement
("Escrow Agreement") attached hereto as Exhibit C; and
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 1:00 p.m. Chicago time.
3. TITLE COMMITMENT AND SURVEY.
3.1. Attached hereto as Exhibit D is a copy of a title commitment for a
lender's standard title insurance policy issued by Lawyers Title Insurance
Corporation dated December 28, 1992 for the Property (the "Original Title
Commitment"). Purchaser has ordered a new owner's standard title insurance
policy (the "Title Commitment") to be issued by First American Title Insurance
Company, (hereinafter referred to as "Title Insurer"). Seller and Purchaser
shall each pay for one-half of the costs of the Title Commitment. For purposes
of this Agreement, "Permitted Exceptions" shall mean: (a) the general printed
exceptions contained in the standard title policy to be issued by Title Insurer
based on the Title Commitment; (b) general real estate taxes, special district
taxes and related charges not yet due and payable; (c) matters shown on the
"Existing Survey" (hereinafter defined); (d) matters caused by the actions of
Purchaser; and (e) the title exceptions set forth in Schedule B of the Original
Title Commitment as Numbers 2 through 10 inclusive to the extent that same
effect the Property. All other exceptions to title shall be referred to as
"Unpermitted Exceptions". The Title Commitment shall be conclusive evidence of
good title as therein shown as to all matters to be insured by the title
policy, subject only to the exceptions therein stated. On the Closing Date,
<PAGE>
Title Insurer shall deliver to Purchaser a standard title policy in conformance
with the Title Commitment, subject only to Permitted Exceptions and Unpermitted
Exceptions waived by Purchaser (the "Title Policy"). Purchaser and Seller
shall each pay for one-half of the costs of the Title Policy, and Purchaser
shall pay for the cost of any endorsements to, or extended coverage on, the
Title Policy.
3.2. Purchaser has received a survey of the Property prepared by E.D.
Lewis & Associates, dated January 25, 1984 (the "Existing Survey"). Purchaser
shall cause the Existing Survey to be updated and certified to Purchaser and
Title Insurer (the "Survey") and delivered to Purchaser within 7 days after the
date hereof. Purchaser and Seller shall each pay for one-half of the costs
incurred in obtaining the Survey. Purchaser hereby acknowledges that all
matters disclosed by the Existing Survey are acceptable to Purchaser.
3.3. The obligation of Purchaser to pay various costs set forth in
Paragraphs 3.1 and 3.2 shall survive the termination of this Agreement.
4. PAYMENT OF CLOSING COSTS.
4.1. In addition to the costs set forth in Paragraphs 3.1 and 3.2,
Purchaser and Seller shall each pay for one-half of the costs of the
documentary or transfer stamps to be paid with reference to the "Deed"
(hereinafter defined) and all other stamps, intangible, transfer, documentary,
recording, sales tax and surtax imposed by law with reference to any other sale
documents delivered in connection with the sale of the Property to Purchaser
and all other charges of the Title Insurer in connection with this transaction.
4.2. The obligation of Purchaser to pay various costs set forth in
Paragraph 4.1 shall survive the Closing and the delivery and recording of the
Deed.
5. CONDITION OF TITLE.
5.1. If, prior to "Closing" (as hereinafter defined), a date down to the
Title Commitment discloses any new Unpermitted Exception, Seller shall have
thirty (30) days from the date of the date down to the Title Commitment at
Seller's expense, to (i) bond over, cure and/or have any Unpermitted Exceptions
which, in the aggregate, do not exceed $25,000.00 or which have arisen by the
affirmative, intentional acts of Seller (such acts being hereinafter referred
to as "Intentional Acts"), removed from the Title Commitment or to have the
Title Insurer commit to insure against loss or damage that may be occasioned by
such Unpermitted Exceptions, or (ii) have the right, but not the obligation, to
bond over, cure and/or have any Unpermitted Exceptions which, in the aggregate,
equal or exceed $25,000.00 (and which are not Intentional Acts), removed from
the Title Commitment or to have the Title Insurer commit to insure against loss
or damage that may be occasioned by such Unpermitted Exceptions. In such
event, the time of Closing shall be delayed, if necessary, to give effect to
said aforementioned time periods. If Seller fails to cure or have said
Unpermitted Exception removed or have the Title Insurer commit to insure as
specified above within said thirty (30) day period or if Seller elects not to
exercise its rights under (ii) in the preceding sentence, Purchaser may
<PAGE>
terminate this Agreement upon notice to Seller within five (5) business days
after receipt by Purchaser of notice from Seller of its refusal or failure to
cure, remedy or have the Title Insurer commit to insure such Unpermitted
Exceptions. Absent notice from Purchaser to Seller in accordance with the
preceding sentence, Purchaser shall be deemed to have elected to take title
subject to said Unpermitted Exception. If Purchaser terminates this Agreement
in accordance with the terms of this Paragraph 5.1, this Agreement shall become
null and void without further action of the parties and all Earnest Money
theretofore deposited into the escrow by Purchaser together with any interest
accrued thereon, shall be returned to Purchaser, and neither party shall have
any further liability to the other, except for Purchaser's obligation to
indemnify Seller and restore the Property, as more fully set forth in
Paragraph 7.
5.2. Seller agrees to convey fee simple title to the Property to
Purchaser by special warranty deed (the "Deed") in recordable form subject only
to the Permitted Exceptions and any Unpermitted Exceptions waived by Purchaser.
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
6.1. Except as provided in the indemnity provisions contained in
Paragraph 7.1 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 the
Property by fire or other casualty prior to the Closing Date, repair of which
would cost less than or equal to $100,000.00 (as determined by Seller in good
faith) Purchaser shall not have the right to terminate its obligations under
this Agreement by reason thereof, but Seller shall have the right to elect to
either repair and restore the Property (in which case the Closing Date shall be
extended until a date which is five (5) days after completion of such
restoration) or to assign and transfer to Purchaser on the Closing Date all of
Seller's right, title and interest in and to all insurance proceeds paid or
payable to Seller on account of such fire or casualty, and Seller shall pay to
Purchaser at the Closing the amount of Seller's insurance deductible. Seller
shall promptly notify Purchaser in writing of any such fire or other casualty
and Seller's determination of the cost to repair the damage caused thereby. In
the event of damage to the Property by fire or other casualty prior to the
Closing Date, repair of which would cost in excess of $100,000.00 (as
determined by Seller in good faith), then this Agreement may be terminated at
the option of Purchaser, which option shall be exercised, if at all, by
Purchaser's written notice thereof to Seller within five (5) business days
after Purchaser receives written notice of such fire or other casualty and
Seller's determination of the amount of such damages, and upon the exercise of
such option by Purchaser this Agreement shall become null and void, the Earnest
Money deposited by Purchaser shall be returned to Purchaser together with
interest thereon, and neither party shall have any further liability or
obligations hereunder. In the event that Purchaser does not exercise the
option set forth in the preceding sentence, the Closing shall take place on the
Closing Date and Seller shall assign and transfer to Purchaser on the Closing
Date all of Seller's right, title and interest in and to all insurance proceeds
paid or payable to Seller on account of the fire or casualty, and Seller shall
pay to Purchaser at the Closing the amount of Seller's insurance deductible.
<PAGE>
6.2. If between the date of this Agreement and the Closing Date, any
condemnation or eminent domain proceedings are initiated which might result in
the taking of any part of the Property or the taking or closing of any right of
access to the Property, Seller shall immediately notify Purchaser of such
occurrence. In the event that the taking of any part of the Property shall, in
Purchaser's reasonable judgment: (i) materially impair access to the Property;
(ii) cause any material non-compliance with any applicable law, ordinance, rule
or regulation of any federal, state or local authority or governmental agencies
having jurisdiction over the Property or any portion thereof; or (iii)
materially and adversely impair the use of the Property as it is currently
being operated (hereinafter collectively referred to as a "Material Event"),
Purchaser may:
6.2.1. terminate this Agreement by written notice to Seller, in
which event the Earnest Money deposited by Purchaser, together with interest
thereon, shall be returned to Purchaser and all rights and obligations of the
parties hereunder with respect to the closing of this transaction will cease;
or
6.2.2. proceed with the Closing, in which event Seller shall assign
to Purchaser all of Seller's right, title and interest in and to any award made
in connection with such condemnation or eminent domain proceedings.
6.3. Purchaser shall then notify Seller, within five (5) business days
after Purchaser's receipt of Seller's notice, whether Purchaser elects to
exercise its rights under Paragraph 6.2.1 or Paragraph 6.2.2. Closing shall be
delayed, if necessary, until Purchaser makes such election. If Purchaser fails
to make an election within such five (5) business day period, Purchaser shall
be deemed to have elected to exercise its rights under Paragraph 6.2.2. If
between the date of this Agreement and the Closing Date, any condemnation or
eminent domain proceedings are initiated which do not constitute a Material
Event, Purchaser shall be required to proceed with the Closing, in which event
Seller shall assign to Purchaser all of Seller's right, title and interest in
and to any award made in connection with such condemnation or eminent domain
proceedings.
7. INSPECTION AND AS-IS CONDITION.
7.1. During the period commencing on July 15, 1996 and ending at 5:00
p.m. Chicago time on August 21, 1996 (said period being herein referred to as
the "Inspection Period"), Purchaser and the agents, engineers, employees,
contractors and surveyors retained by Purchaser may enter upon the Property, at
any reasonable time and upon reasonable prior notice to Seller, to inspect the
environmental condition of the Property and to conduct and prepare such
studies, tests and surveys as Purchaser deemed necessary and appropriate. In
connection with Purchaser's review of the Property, Purchaser has reviewed all
information pertaining to the operation of the Property which has been
available to Purchaser as a result of Purchaser's affiliate being the manager
of the Property.
<PAGE>
All of the foregoing tests, investigations and studies conducted under this
Paragraph 7.1 by Purchaser shall be at Purchaser's sole cost and expense and
Purchaser shall restore the Property to the condition existing prior to the
performance of such tests or investigations by or on behalf of Purchaser.
Purchaser shall defend, indemnify and hold Seller and Affiliates of Seller
harmless from any and all liability, cost and expense (including without
limitation, reasonable attorney's fees, court costs and costs of appeal)
suffered or incurred by Seller or Affiliates of Seller for injury to persons or
property caused by Purchaser's investigations and inspection of the Property.
Purchaser shall undertake its obligation to defend set forth in the preceding
sentence using attorneys selected by Seller, in Seller's sole discretion.
Notwithstanding anything contained herein to the contrary, Purchaser's
obligation to indemnify Seller and restore the Property, as more fully set
forth in this Paragraph 7.1, shall survive the termination of this Agreement.
If Purchaser is dissatisfied with the results of the tests, studies or
investigations performed or information received pursuant to this Paragraph
7.1, or if Purchaser is dissatisfied for any other reason whatsoever, Purchaser
shall have the right to terminate this Agreement. If written notice
specifically approving the Property is not received by Seller prior to the
expiration of the Inspection Period, then this Agreement shall be deemed
terminated. If such written notice approving the Property is received by Seller
during 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 or is deemed to have
terminated this Agreement prior to the expiration of the Inspection Period in
accordance with the terms hereof: (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;
and (ii) the Earnest Money deposited by Purchaser shall be immediately paid
to Purchaser, together with any interest earned thereon, and neither Purchaser
nor Seller shall have any right, obligation or liability under this Agreement,
except for Purchaser's obligation to indemnify Seller and restore the Property,
as more fully set forth in this Paragraph 7.1. Notwithstanding anything
contained herein to the contrary, the terms of this Paragraph 7.1, shall
survive the Closing and the delivery of the Deed and termination of this
Agreement.
7.2. Seller acquired title to the Property by foreclosure (or
deed-in-lieu thereof) and, therefore, Seller can make no representations or
warranties relating to the condition of the Property or the Personal Property.
Purchaser acknowledges and agrees that it will be purchasing the Property and
the Personal Property based solely upon its inspections and investigations of
the Property and the Personal Property, and that Purchaser will be purchasing
the Property and the Personal Property "AS IS" and "WITH ALL FAULTS", based
upon the condition of the Property and the Personal Property as of the date of
this Agreement, 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 Property or the Personal Property, including, but
<PAGE>
not limited to, the condition of the land or any improvements comprising the
Property, the existence or non-existence of toxic waste and/or any hazardous
materials or substances, economic projections or market studies concerning the
Property, any development rights, taxes, bonds, covenants, conditions and
restrictions affecting the Property, water or water rights, topography,
drainage, soil, subsoil of the Property, the utilities serving the Property or
any zoning, environmental or building laws, rules or regulations affecting the
Property. Seller makes no representation or warranty that the Property
complies with Title III of the Americans with Disabilities Act or any fire code
or building code. Purchaser hereby releases Seller and the Affiliates of
Seller from any and all liability in connection with any claims which Purchaser
may have against Seller or the Affiliates of Seller, and Purchaser hereby
agrees not to assert any claims for contribution, cost recovery or otherwise,
against Seller or the Affiliates of Seller, relating directly or indirectly to
the existence of asbestos or hazardous materials or substances on, or
environmental conditions of, the Property, whether known or unknown. As used
herein, the term "hazardous materials or substances" means (i) hazardous
wastes, hazardous substances, hazardous constituents, toxic substances or
related materials, whether solids, liquids or gases, including but not limited
to substances defined as "hazardous wastes," "hazardous substances," "toxic
substances," "pollutants," "contaminants," "radioactive materials," or other
similar designations in, or otherwise subject to regulation under, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended ("CERCLA"), 42 U.S.C. Section 9601 et seq.; the Toxic Substance
Control Act ("TSCA"), 15 U.S.C. Section 2601 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1802; the Resource Conservation and
Recovery Act ("RCRA"), 42 U.S.C. Section 9601. et seq.; the Clean Water Act
("CWA"), 33 U.S.C. Section 1251 et seq.; the Safe Drinking Water Act, 42 U.S.C.
Section 300f et seq.; the Clean Air Act ("CAA"), 42 U.S.C. Section 7401 et
seq.; and in any permits, licenses, approvals, plans, rules, regulations or
ordinances adopted, or other criteria and guidelines promulgated pursuant to
the preceding laws or other similar federal, state or local laws, regulations,
rules or ordinance now or hereafter in effect relating to environmental matters
(collectively the "Environmental Laws"); and (ii) any other substances,
constituents or wastes subject to any applicable federal, state or local law,
regulator or ordinance, including any Environmental Law, now or hereafter in
effect, including but not limited to (A) petroleum, (B) refined petroleum
products, (C) waste oil, (D) waste aviation or motor vehicle fuel and (E)
asbestos.
7.3. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Except as specifically provided
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 releases Seller and the Affiliates of Seller from any liability with
respect to such historical information.
<PAGE>
7.4. Seller has provided to Purchaser the following existing report:
Contaminant Source Study, Willow Lawn Security Storage, prepared by Law
Engineering as Project Number 523-03276-01 dated December 7, 1992 ("Existing
Report"). Seller makes no representation or warranty concerning the accuracy
or completeness of the Existing Report. Purchaser hereby releases Seller and
the Affiliates of Seller from any liability whatsoever with respect to the
Existing Report, or, including, without limitation, the matters set forth in
the Existing Report, and the accuracy and/or completeness of the Existing
Report. Furthermore, Purchaser acknowledges that it will be purchasing the
Property with all faults disclosed in the Existing Report.
8. CLOSING. The closing of this transaction (the "Closing") shall be on
August 23, 1996 (the "Closing Date"), at the office of Title Insurer, Richmond,
Virginia at which time Seller shall deliver possession of the Property to
Purchaser. This transaction shall be closed through an escrow with Title
Insurer, in accordance with the general provisions of the usual and customary
form of deed and money escrow for similar transactions in Virginia, or at the
option of either party, the Closing shall be a "New York style" closing at
which the Purchaser shall wire the Purchase Price to Title Insurer on the
Closing Date and prior to the release of the Purchase Price to Seller,
Purchaser shall receive the Title Policy or marked up commitment dated the date
of the Closing Date. In the event of a New York style closing, Seller shall
deliver to Title Insurer any customary affidavit in connection with a New York
style closing. All closing and escrow fees shall be paid by Purchaser and
Seller equally.
9. CLOSING DOCUMENTS.
9.1. On the Closing Date, Seller and Purchaser shall execute and deliver
to one another a joint closing statement. In addition, Purchaser shall deliver
to Seller the balance of the Purchase Price, an assumption of the documents set
forth in Paragraph 9.2.3 and 9.2.4 and such other documents as may be
reasonably required by the Title Insurer in order to consummate the transaction
as set forth in this Agreement.
9.2. On the Closing Date, Seller shall deliver to Title Insurer for the
benefit of Purchaser the following:
9.2.1. the Deed (in the form of Exhibit E attached hereto),
subject to Permitted Exceptions and those Unpermitted Exceptions waived by
Purchaser;
9.2.2. a bill of sale conveying the Personal Property (in the
form of Exhibit F attached hereto);
9.2.3. assignment and assumption of intangible property (in the form
attached hereto as Exhibit G), including, without limitation, the service
contracts listed in Exhibit H;
9.2.4. an assignment and assumption of leases and security deposits,
if any (in the form attached hereto as Exhibit I);
<PAGE>
9.2.5. non-foreign affidavit (in the form of Exhibit J attached
hereto);
9.2.6. original, and/or copies of, leases, tenant records and
service and maintenance records being maintained at and affecting the Property
and currently in Seller's possession (which shall be delivered at the
Property);
9.2.7. all documents and instruments reasonably required by the
Title Insurer to issue the Title Policy;
9.2.8. possession of the Property to Purchaser;
9.2.9. evidence of the termination of the management agreement;
9.2.10. notice to the tenants of the Property of the transfer of
title and assumption by Purchaser of the landlord's obligation under the
leases, if any, and the obligation to refund the security deposits (in the form
of Exhibit K); and
9.2.11. an updated and certified (subject to the limitations on
liability contained herein) rent roll.
10. DEFAULT BY PURCHASER. ALL EARNEST MONEY DEPOSITED INTO THE ESCROW IS TO
SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND UNDERTAKINGS
UNDER THIS AGREEMENT. IN THE EVENT OF A DEFAULT OF THE PURCHASER UNDER THE
PROVISIONS OF THIS AGREEMENT, SELLER SHALL RETAIN ALL OF THE EARNEST MONEY AND
THE INTEREST THEREON AS SELLER'S SOLE RIGHT TO DAMAGES OR ANY OTHER REMEDY,
EXCEPT FOR PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER 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 HAS BEEN AGREED UPON,
AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES.
11. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF ALL EARNEST MONEY
TOGETHER WITH ANY INTEREST ACCRUED THEREON, AND THIS AGREEMENT SHALL THEN
BECOME NULL AND VOID AND OF NO EFFECT AND THE PARTIES SHALL HAVE NO FURTHER
LIABILITY TO EACH OTHER AT LAW OR IN EQUITY, EXCEPT FOR PURCHASER'S OBLIGATIONS
TO INDEMNIFY SELLER AND RESTORE THE PROPERTY AS SET FORTH MORE FULLY IN
PARAGRAPH 7. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF
SELLER'S DEFAULT IS (I) SELLER'S FAILURE TO BOND OVER, REMOVE OR CURE
UNPERMITTED EXCEPTIONS WHICH IN THE AGGREGATE ARE LESS THAN $25,000 OR WHICH
ARISE BY REASON OF SELLER'S INTENTIONAL ACTS, OR (II) ITS WILLFUL REFUSAL TO
DELIVER THE DEED OR OTHER CONVEYANCE DOCUMENTS, THEN PURCHASER WILL BE ENTITLED
TO SUE FOR SPECIFIC PERFORMANCE.
<PAGE>
12. PRORATIONS.
12.1. Rents (exclusive of Delinquent Rents [hereinafter defined], but
including prepaid rents), refundable security deposits, if any (which will be
assigned to and assumed by Purchaser and credited to Purchaser at Closing);
water and other utility charges; fuels; prepaid operating expenses (including,
without limitation, prepaid advertising and telephone directory advertising);
real and personal property taxes; and other similar items shall be adjusted
ratably as of 11:59 p.m. on the Closing Date, and credited to the balance of
the cash due at Closing. Assessments payable in installments which are due
subsequent to the Closing Date shall be paid by Purchaser. If the amount of
any of the items to be prorated is not then ascertainable, the adjustments
thereof shall be on the basis of the most recent ascertainable data. All
prorations will be final.
12.2. "Delinquent Rents" shall mean all rents due and payable as of the
Closing Date and applicable to any period of time preceding the Closing Date.
Provided that the transactions contemplated by this Agreement close, all
delinquent rents shall become the property of Purchaser; provided, however,
that Purchaser shall give Seller a credit at Closing in the amount of (i)
forty-five percent (45%) of the Delinquent Rents that are delinquent for a
period of not more than thirty (30) days and (ii) seventy-five percent (75%) of
the Delinquent Rents that are delinquent for a period of more than thirty (30)
days but less than sixty-one (61) days.
13. RECORDING. This Agreement shall not be recorded and the act of recording
by Purchaser shall be an act of default hereunder by Purchaser and subject to
the provisions of Paragraph 10 hereof.
14. ASSIGNMENT. The Purchaser shall not have the right to assign its interest
in this Agreement without the prior written consent of the Seller. Any
assignment or transfer of, or attempt to assign or transfer, Purchaser's
interest in this Agreement shall be an act of default hereunder by Purchaser
and subject to the provisions of Paragraph 10 hereof.
15. BROKER. The parties hereto represent and warrant that no broker
commission or finder fee is due and payable in connection with this
transaction. Purchaser and Seller shall indemnify, defend and hold the other
party hereto harmless from any claim whatsoever (including without limitation,
reasonable attorney's fees, court costs and costs of appeal) from anyone
claiming by or through the indemnifying party any fee, commission or
compensation on account of this Agreement, its negotiation or the sale hereby
contemplated. The indemnifying party shall undertake its obligations set forth
in this Paragraph 15 using attorneys selected by the indemnifying party and
reasonably acceptable to the indemnified party. The provisions of this
Paragraph 15 will survive the Closing and delivery of the Deed.
<PAGE>
16. SELLER'S REPRESENTATIONS AND WARRANTIES.
16.1. Any reference herein to Seller's knowledge or notice of any matter
or thing shall only mean such knowledge or notice that has actually been
received by Phillip Schechter or Martin E. Dempski (collectively or
individually 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.
16.2. Subject to the limitations set forth in Paragraph 16.1, Seller
hereby makes the following representations and warranties, which
representations and warranties are made to Seller's knowledge and which shall
survive Closing for sixty (60) days: (i) Seller has no knowledge of any
pending or threatened litigation, claim, cause of action or administrative
proceeding concerning the Property; (ii) Seller has not received written notice
of any uncured violation of any existing zoning or building ordinances, laws,
rules or regulations; (iii) Seller has the power to execute this Agreement and
consummate the transactions contemplated herein; (iv) the rent rolls which
Seller has submitted to the Purchaser and updated as of the Closing Date are
accurate as of the date set forth thereon; (v) Seller has no employees at the
Property. Purchaser and Seller shall cause the management agreement affecting
the Property to be terminated as of the Closing at no expense to Seller and
without any requirement of notice from Seller.
16.3. Seller agrees to operate and maintain the Property in the same
manner as the Property has been operated and maintained prior to the execution
of this Agreement. Seller will not, and will instruct its management company
not to, without Purchaser's written consent, which consent may not be
unreasonably withheld, enter into any lease agreements with tenants or modify
or extend any existing leases incorporating terms, rental rates or rent
concessions differing from the terms, rental rates or rent concessions in
effect for like units.
16.4. Attached hereto as Exhibit H is a true, correct and complete list
of all service contracts affecting the Property. Seller will not, without
Purchaser's prior written consent, which consent may not be unreasonably
withheld, enter into any service contracts which cannot be terminated without a
termination fee upon thirty days written notice.
17. LIMITATION OF LIABILITY.
17.1. None of Seller's beneficiaries, shareholders, partners,
officers, agents or employees, heirs, successors or assigns shall have any
personal liability of any kind or nature for or by reason of any matter or
thing whatsoever under, in connection with, arising out of or in any way
related to this Agreement and the transactions contemplated herein, and
Purchaser hereby waives for itself and anyone who may claim by, through or
under Purchaser any and all rights to sue or recover on account of any such
alleged personal liability.
<PAGE>
17.2. Notwithstanding anything contained herein to the contrary,
Purchaser hereby agrees that the maximum aggregate liability of Seller, in
connection with, arising out of or in any way related to a breach by Seller
under this Agreement or any document or conveyance agreement in connection with
the transaction set forth herein after the Closing shall be $100,000.
Purchaser hereby waives for itself and anyone who may claim by, through or
under Purchaser any and all rights to sue or recover from Seller any amount
greater than said limit.
18. TIME OF ESSENCE. Time is of the essence of this Agreement.
19. NOTICES. Any notice or demand which either party hereto is required or
may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by overnight courier
such as Federal Express addressed as follows:
TO SELLER: c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attention: Ilona Adams
with copies to: The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attention: Alan Lieberman
(847) 317-4360
(847) 317-4462 (FAX)
and to: Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, Illinois 60661-3693
Attention: Daniel J. Perlman, Esq.
(312) 902-5532
(312) 902-1061 (FAX)
TO PURCHASER: SUSA Partnership L.P.
6075 Poplar Avenue, Suite 229
Memphis, Tennessee 38119
Attention: Pete Williams
(901) 762-0000
(901) 754-0109 (FAX)
SUSA Partnership L.P.
6075 Poplar Avenue, Suite 229
Memphis, Tennessee 38119
Attention: Morris Kriger, Esq.
(901) 762-0000
(901) 754-0109 (FAX)
<PAGE>
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be
deemed to be delivered or made on the next business day if sent by overnight
courier, addressed as above provided, with postage thereon fully prepaid. Any
such notice, demand or document not personally delivered or given or made by
overnight courier as aforesaid shall be deemed to be given, delivered or made
upon receipt of the same by the party to whom the same is to be given,
delivered or made. Copies of all notices shall be served upon the Escrow
Agent.
20. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute two
(2) copies of this Agreement and three (3) copies of the Escrow Agreement and
forward them to Seller for execution. Seller will execute both copies of this
Agreement and all three (3) copies of the Escrow Agreement within two business
days after receipt thereof and will forward one (1) copy of the executed
Agreement to Purchaser and will forward the following to the Escrow Agent:
(A) One (1) copy of the fully executed Agreement; and
(B) Three (3) copies of the Escrow Agreement signed by the parties with a
direction to execute two (2) copies of the Escrow Agreement and deliver a fully
executed copy to each of the Purchaser and the Seller.
Within one business day after receiving a facsimile copy of the execution
page of this Agreement showing Seller's execution thereof, Purchase shall
forward the Earnest Money, payable to the Escrow Agent set forth in the Escrow
Agreement, directly to the Escrow Agent.
21. GOVERNING LAW. The provisions of this Agreement shall be governed by the
laws of the State of Virginia, except that with respect to the retainage of the
Earnest Money as liquidated damages the laws of the State of Illinois shall
govern.
22. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties and supersedes all other negotiations, understandings and
representations made by and between the parties and the agents, servants and
employees.
23. COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.
24. CAPTIONS. Paragraph titles or captions contained herein are inserted as a
matter of convenience and for reference, and in no way define, limit, extend or
describe the scope of this Agreement or any provision hereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date first set forth above.
PURCHASER:
SUSA PARTNERSHIP L.P., a Tennessee limited partnership
By: STORAGE USA, INC., its general partner
By: /s/ Morris Kriger
-------------------------------
Name:
-------------------------------
Its:
-------------------------------
SELLER:
WILLOW LAWN PARTNERS, an Illinois limited partnership
By: Balcor Current Income Partners-85, an Illinois
general partnership, its general partner
By: The Balcor Company, a Delaware corporation,
a partner
By: /s/ Jerry M. Ogle
---------------------------------
Name: Jerry M. Ogle
---------------------------------
Its: Vice President and Secretary
---------------------------------
<PAGE>
Exhibits
A - Legal
B - Personal Property
C - Escrow Agreement
D - Title Commitment
E - Deed
F - Bill of Sale
G - Assignment and Assumption of Intangible Property
H - Service Contracts
I - Assignment and Assumption of Leases and Security Deposits
J - Non-Foreign Affidavit
K - Notice to Tenants
<PAGE>
FIRST AMENDMENT TO AGREEMENT OF SALE
THIS FIRST AMENDMENT is made and entered as of the 20th day of August,
1996, by and between SUSA PARTNERSHIP, L.P., a Tennessee limited partnership,
or its assigns (herein "Purchaser") and WILLOW LAWN PARTNERS, an Illinois
limited partnership ("Seller").
W I T N E S S E T H T H A T:
WHEREAS, Purchaser and Seller have entered into that certain Agreement of
Sale dated August ____, 1996, wherein Purchaser agrees to purchase and Seller
agrees to sell at the price of Five Million Six Hundred Thousand Dollars
($5,600,000) ("Purchase Price"), that certain self-storage facility
("Facility") known as WILLOW LAWN SELF-STORAGE, located at 5202 West Broad
Street, Richmond, Virginia, and described on Exhibit A hereto; and
WHEREAS, Purchaser and Seller have agreed to extend the Inspection Period
and the Closing Date.
NOW, THEREFORE, for and in consideration of the premises, the mutual
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of all of which is hereby acknowledged, the parties do
hereby agree as follows:
1. Capitalized terms not otherwise defined herein shall have the same
meaning as in the Agreement of Sale.
2. The Inspection Period shall be and is hereby extended to August 28,
1996.
3. The Closing Date shall be and is hereby extended to August 30, 1996.
4. The terms, covenants and conditions of the Agreement of Sale not
specifically modified, amended or extended by this Amendment are, to the extent
not inconsistent with or specifically modified by the terms herein, hereby
incorporated herein by reference. It is expressly understood and agreed that
the terms, covenants and conditions of the Agreement of Sale shall remain in
full force and effect, and shall in no manner be affected by the execution of
this Amendment except as the same are expressly extended or modified herein.
5. This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original and all of which when taken
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this First Amendment to be
executed by and through their duly authorized partners as of the day and year
first above written.
<PAGE>
PURCHASER: SUSA PARTNERSHIP, L.P.,
a Tennessee limited partnership
By: STORAGE USA, INC.,
General Partner
By: /s/ James G. Williams
-------------------------------
JAMES G. WILLIAMS,
Vice President
SELLER: WILLOW LAWN PARTNERS,
an Illinois limited partnership
By: BALCOR CURRENT INCOME
PARTNERS-85, an Illinois
general partnership, its
General Partner
By: THE BALCOR COMPANY,
a Delaware corporation,
a partner
By: /s/ Jerry M. Ogle
------------------------------
Name: Jerry M. Ogle
Its: Vice President and Secretary
<PAGE>
AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT
THIS AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT (this
"Amendment") is made and entered into as of the 30th day of August, 1996,
between WILLOW LAWN PARTNERS, an Illinois limited partnership ("Seller") and
SUSA PARTNERSHIP, L.P., a Tennessee limited partnership ("Purchaser").
W I T N E S S E T H :
WHEREAS, Seller and Purchaser are parties to that certain Agreement of
Sale entered into as of August 19, 1996 (the "Original Agreement"), pursuant to
which Seller agreed to sell to Purchaser, and Purchaser agreed to purchase from
Seller, the "Property" (as defined in the Original Agreement);
WHEREAS, pursuant to the Original Agreement Seller and Purchaser entered
into that certain Escrow Agreement dated August 19, 1996 (the "Escrow
Agreement"); and
WHEREAS, Seller and Purchaser now desire to amend the Original Agreement
and the Escrow Agreement pursuant to the terms and provisions set forth herein.
NOW, THEREFORE, for and in consideration of the premises and mutual
agreements contained herein, the payment of Ten and No/100 Dollars ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Seller, Purchaser and Escrow Agent agree that the Original
Agreement and the Escrow Agreement are amended as follows:
1. All capitalized terms used in this Amendment, to the extent not
otherwise expressly defined herein, shall have the same meanings ascribed to
such terms in the Original Agreement.
2. Line two of Paragraph 1 of the Original Agreement is hereby deleted,
and the following is hereby inserted in lieu thereof: "price of Five Million
Six Hundred Three Thousand Four Hundred Sixty Nine and 91/100 Dollars
($5,603,469.91)(the".
3. Except as amended herein, the terms and conditions of the Original
Agreement and the Escrow Agreement shall continue in full force and effect and
are hereby ratified in their entirety.
4. This Amendment may be executed in multiple counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same agreement.
<PAGE>
Executed as of the date first written above.
SELLER:
WILLOW LAWN PARTNERS, an Illinois
limited partnership
By: Balcor Current Income Partners-85, an
Illinois general partnership, its general partner
By: The Balcor Company, a Delaware
corporation, a partner
By: /s/ John K. Powell, Jr.
--------------------------------
Name: John K. Powell, Jr.
Its: Senior Vice President
PURCHASER:
SUSA PARTNERSHIP L.P., a Tennessee
limited partnership
By: Storage USA, Inc., its general partner
By: /s/ Morris J. Kriger
-------------------------------
Name: Morris J. Kriger
Its. Exec. V.P.
ESCROW AGENT:
FIRST AMERICAN TITLE INSURANCE
COMPANY
By: /s/ Mary Lou Kennedy
--------------------------------
Name: Mary Lou Kennedy
Its: Vice President
<PAGE>
KATTEN MUCHIN & ZAVIS
525 West Monroe Street Suite 1600
Chicago, Illinois 60661-3693
August 20, 1996
VIA FEDERAL EXPRESS
Mr. Pete Williams
SUSA Partnership L.P.
6075 Poplar Avenue, Suite 229
Memphis, Tennessee 38119
Re: Willow Lawn, Richmond, Virginia
Dear Pete:
In connection with the above-reference transaction, I have enclosed one
fully executed copy of the Agreement of Sale. As page 6 of the Agreement was
inserted by my client pursuant to Morris Kriger's request, and was never
initialled by the Purchaser, please make two copies of page 6 of the Agreement,
initial where indicated, and return them to me at your earliest convenience.
Additionally, if the following changes to the Agreement of Sale meet with your
approval, please execute the acknowledgment block below and return a copy of
this letter to me via facsimile with the original to follow via overnight mail:
1. Section 7.4 of the Agreement of Sale is hereby amended to include,
within the definition of "Existing Report" the Report of Phase I Environmental
Site Assessment and Limited Asbestos Survey prepared by Law Engineering as Law
Engineering Project Number 523-03237-01. (I have enclosed a copy dated
November 5, 1992 which I understand that you have received previously, for your
convenience).
2. The last sentence of Paragraph 16.2 is hereby deleted therefrom and
inserted as Paragraph 25 of the agreement of Sale which Paragraph is entitled
"Termination of Management Agreement".
3. The reference in Paragraph 8 to August 23, 1996 is hereby deleted and
August 30, 1996 is hereby inserted in lieu thereof.
If you have any comments or questions, please feel free to call me.
Very truly yours,
/s/ Stephen J. Levy
---------------------------------
Stephen J. Levy
SJL
Enclosure
cc: Mr. Phillip Schechter (via facsimile)
Daniel J. Perlman, Esq.
<PAGE>
ACKNOWLEDGED TO AND AGREED UPON THIS
21ST DAY OF AUGUST, 1996.
By: /s/ James G. Williams
--------------------------------
Name: James G. Williams
<PAGE>
