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 28, 1996
BALCOR EQUITY PENSION INVESTORS-III
A REAL ESTATE LIMITED PARTNERSHIP
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Exact Name of Registrant
Illinois 0-14348
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State or other jurisdiction Commission file number
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 36-3354308
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Address of principal I.R.S. Employer
executive offices Identification
Number
60015
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Zip Code
Registrant's telephone number, including area code:
(847) 267-1600
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
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Green Trails Apartments
In 1988, the Partnership funded a $27,500,000 first mortgage loan
collateralized by the Green Trails Apartments, Lisle, Illinois. In 1991,
involuntary bankruptcy proceedings were commenced against the borrower; in
connection therewith, the Partnership cashed a $2,750,000 letter of credit
previously deposited by the borrower and applied $2,090,144 towards the
principal amount of the loan and the remainder towards interest. Pursuant to a
plan of reorganization, the Partnership paid the borrower approximately
$102,000 and received title to the property in 1992.
On June 28, 1996, the Partnership contracted to sell the property for a sale
price of $33,050,000 to an unaffiliated party, Great Lakes Property Group
Trust, an Illinois trust, James S. Smith, trustee. The sale closed on July 9,
1996. The purchaser received a $288,900 credit against the purchase price for
the cost of repairs and lost income due to a recent fire at the property and
for other repairs. From the proceeds of the sale, the Partnership paid
approximately $80,000 in closing costs, $417,500 to an unaffiliated party as a
brokerage commission and a $245,708 fee 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 approximately
$32,018,000 in net proceeds. Of such proceeds, $250,000 is being retained by
the Partnership and will not be available for use or distribution by the
Partnership until the later of December 31, 1996 or the resolution of any
claims asserted by the purchaser prior to December 31, 1996.
Neither the General Partner nor any affiliate will receive a brokerage
commission in connection with the sale of the property. The General Partner
will be reimbursed by the Partnership for actual expenses incurred in
connection with the sale.
ITEM 5. OTHER INFORMATION
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Westlake Meadows Apartments
As previously reported, on May 22, 1996, the Partnership contracted to sell
Westlake Meadows Apartments, Lake Oswego, Oregon, to an unaffiliated party,
RREEF America L.L.C., a Delaware limited liability company, for a sale price of
$10,800,000. The purchaser subsequently assigned its rights under the contract
to an affiliate, RREEF America REIT Corp. L, a Maryland corporation, and the
sale closed on June 13, 1996. From the proceeds of the sale, the Partnership
paid closing costs of approximately $21,000, $216,000 to an unaffiliated party
as a brokerage commission and a $108,000 fee 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
$10,455,000 in proceeds.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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(a) FINANCIAL STATEMENTS AND EXHIBITS:
None
(B) PRO FORMA FINANCIAL INFORMATION:
None
(C) EXHIBITS:
(2) Agreement of Sale and attachment thereto relating to the sale
of Green Trails Apartments, Lisle, Illinois.
No information is required under Items 1, 3, 4, 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 EQUITY PENSION INVESTORS-III
A REAL ESTATE LIMITED PARTNERSHIP
By: Balcor Equity Partners-III, 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: July 12, 1996
<PAGE>
AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), entered into as of the 28th day
of June, 1996, by and between JAMES S. SMITH, NOT PERSONALLY BUT SOLELY AS
TRUSTEE OF GREAT LAKES PROPERTY GROUP TRUST, an Illinois Trust ("Purchaser"),
and LISLE APARTMENTS LIMITED PARTNERSHIP, an Illinois limited partnership
("Seller").
W I T N E S S E T H:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to sell
at the price of Thirty-Three Million Fifty Thousand And No/100 Dollars
($33,050,000.00) (the "Purchase Price"):
1.1. that certain property commonly known as Green Trails Apartments,
Lisle, Illinois, legally described on Exhibit A attached hereto (the
"Property"), together with the buildings and all other structures and
improvements located thereon, and all easements, tenements, hereditament,
privileges and appurtenances in any way belonging thereto;
1.2. all fixtures and equipment located on or about the Property as of the
date hereof, including, without limitation, the following, if any: all heating,
lighting, plumbing, electrical and air-conditioning fixtures and equipment; all
hot water heaters, furnaces, heating controls, motors and boiler pressure
systems and equipment; all shelving and partitions; all ventilating,
incinerating, disposal, cleaning, maintenance, snow removal and landscaping
equipment;
1.3. all personal property listed on Exhibit B attached hereto and any
other personal property located on the Property used in conjunction therewith
and owned by Seller, including computer equipment, but specifically excluding
all computer software (the "Personal Property");
1.4. all of Seller's right, title interest in and to any land lying in the
bed of any street, road or avenue, open or proposed, at the foot of or
adjoining any parcel, and all private and public easements, if any, whether or
not of record, appurtenant to any parcel and the use of all appurtenant and
assignable strips, railroad tracks and rights-of -way, if any, abutting,
adjacent, contiguous or adjoining any parcel;
1.5. all licenses, permits and certificates issued by any federal, state,
county or municipal authority relating to the use, maintenance or operation of
any parcel or Building, all guarantees, warranties, and trade names,
copyrights, and other intangible rights pertaining to the Property, to the
extent the foregoing are assignable by Seller, and all service contracts listed
in Exhibit H attached hereto;
1.6. all plans and specifications in Seller's possession covering the
buildings and other improvements located on the Property;
1.7. all of Seller's right, title and interest as landlord in and to the
Leases (as hereinafter defined) and security deposits held thereunder and all
records relating to tenants;
1.8. all of Seller's books and records pertaining to the Property; and
<PAGE>
1.9. any and all other rights of Seller with respect to the 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 "Initial 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;
2.2. On June 28, 1996, the sum of One Hundred Fifty Thousand and No/100
Dollars ($150,000.00) (the "Additional Earnest Money", and, together with the
Initial Earnest Money, the "Earnest Money") to be held in escrow by and in
accordance with the provisions of the Escrow Agreement; and
2.3. 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 3:00 p.m Chicago time.
3. TITLE COMMITMENT AND SURVEY.
3.1. Attached hereto as Exhibit D is a copy of a title commitment for an
owner's standard title insurance policy issued by Near North National Title
Corporation, as agent for First American Title Insurance Company (hereinafter
referred to as "Title Insurer") dated June 7, 1996 for the Property (the "Title
Commitment"). For purposes of this Agreement, "Permitted Exceptions" shall
mean: (a) the general printed exclusions from coverage contained in the
standard title policy to be issued by Title Insurer based on the Title
Commitment; (b) general real estate taxes arising after the first installment
of 1995 real estate taxes; (c) association assessments, special district taxes
and related charges not yet due and payable; (d) matters shown on the "Updated
Survey" (hereinafter defined) approved by Purchaser; (e) matters caused by the
actions of Purchaser; and (f) the title exceptions set forth in Schedule B of
the Title Commitment as Numbers 7, 8, 10, 11, 12 and 17 to the extent that same
affect 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,
Title Insurer shall deliver to Purchaser a standard title policy in conformance
with the previously delivered Title Commitment, subject only to Permitted
Exceptions and Unpermitted Exceptions waived by Purchaser (the "Title Policy").
Seller shall pay for all of the costs of the Title Commitment and Title Policy,
including extended coverage, and Purchaser shall pay for the cost of any
endorsements to the Title Policy.
3.2. Purchaser has received the Amended and Restated Plat of Easement
Dedication, last updated October 25, 1986, for the Property prepared by The
Balsamo Olson Group, Inc. (the "Existing Survey"). Seller shall pay for the
costs of updating the Existing Survey and certifying to Purchaser and Title
Company that the same was prepared in accordance with ALTA standards, contains
a flood plain certification and depicts all easements of record, and Seller
shall deliver the updated survey (the "Updated Survey") to Purchaser within 7
days after the date hereof. Purchaser hereby acknowledges that all matters
disclosed by the Existing Survey are acceptable to Purchaser.
<PAGE>
3.3. The obligation of Purchaser and Seller to pay various costs set forth
in Paragraphs 3.1 and 3.2 shall survive the termination of this Agreement.
4. PAYMENT OF CLOSING COSTS.
4.1. In addition to the costs set forth in Paragraphs 3.1 and 3.2, Seller
shall pay for the costs of the documentary or transfer stamps to be paid with
reference to the "Deed" (hereinafter defined) and all other stamps, intangible,
transfer, documentary, recording, sales tax and surtax imposed by law with
reference to any other sale documents delivered in connection with the sale of
the Property to Purchaser and all other charges of the Title Insurer in
connection with this transaction.
5. CONDITION OF TITLE.
5.1. If, prior to "Closing" (as hereinafter defined), a date-down to the
Title Commitment or the Updated Survey discloses any new Unpermitted Exception,
Seller shall have thirty (30) days from the date of the date-down to the Title
Commitment or the Updated Survey, as applicable, at Seller's expense, to (i)
bond over, cure and/or have any Unpermitted Exceptions which, in the aggregate,
do not exceed $50,000.00 (a "Minor Unpermitted Exception"), removed from the
Title Commitment or to have the Title Insurer commit to insure against loss or
damage 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 $50,000.00, 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
terminate this Agreement upon notice to Seller within five (5) days after the
expiration of said thirty (30) day period; provided, however, and
notwithstanding anything contained herein to the contrary, if the Unpermitted
Exception which gives rise to Purchaser's right to terminate was recorded
against the Property as a result of the affirmative, willful action of Seller
(and not by any unrelated third party) with the intention to prevent the sale
of the Property in accordance with the terms hereof or if Seller is able to
bond over, cure or remove a Minor Unpermitted Exception for a cost not to
exceed $50,000 or the Title Insurer is willing to insure over a Minor
Unpermitted Exception for a cost not to exceed $50,000 in accordance with the
terms hereof and Seller fails to expend said funds in either case, then
Purchaser shall have the additional rights contained in Paragraph 11 herein.
Absent notice from Purchaser to Seller in accordance with the 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.
<PAGE>
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.
Seller further agrees to cause the existing mortgage encumbering the Property
to be released at Closing.
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,
within ten (10) days from the date of such fire or casualty, to either repair
and restore the Property (in which case the Closing Date shall be extended
until completion of such restoration) or to assign and transfer to Purchaser on
the Closing Date all of Seller's right, title and interest in and to all
insurance proceeds paid or payable to Seller on account of such fire or
casualty, 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.
6.2. If between the date of this Agreement and the Closing Date, any
condemnation or eminent domain proceedings are initiated which might result in
the taking of any part of the Property or the taking or closing of any right of
access to the Property, Seller shall immediately notify Purchaser of such
occurrence. In the event that the taking of any part of the Property shall:
(i) materially impair access to the Property; (ii) cause any material
non-compliance with any applicable law, ordinance, rule or regulation of any
federal, state or local authority or governmental agencies having jurisdiction
over the Property or any portion thereof; or (iii) materially and adversely
impairs the use or value of the Property as it is currently being operated
(hereinafter collectively referred to as a "Material Event"), Purchaser may:
<PAGE>
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 June 6, 1996 and ending at 5:00 p.m.
Chicago time on June 28, 1996 (or the date which is three (3) business days
after delivery of the Updated Survey, with respect to title and survey matters
only) (said period being herein referred to as the "Inspection Period"),
Purchaser and the agents, engineers, employees, contractors and surveyors
retained by Purchaser may enter upon the Property, at any reasonable time and
upon reasonable prior notice to Seller, to inspect the Property, including a
review of leases located at the Property, and to conduct and prepare such
studies, tests and surveys as Purchaser may deem reasonably necessary and
appropriate. In connection with Purchaser's review of the Property, Seller
agrees to deliver to Purchaser copies of the current rent roll for the
Property, the most recent tax and insurance bills, utility account numbers,
service contracts and insurance loss history. Furthermore, if the following
are reasonably available to Seller, Seller shall deliver to Purchaser plans and
specifications.
All of the foregoing tests, investigations and studies to be 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 any
affiliate, parent of Seller, and all shareholders, employees, officers and
directors of Seller or Seller's affiliate or parent (hereinafter collectively
referred to as "Affiliate of Seller") harmless from any and all liability, cost
and expense (including without limitation, reasonable attorney's fees, court
costs and costs of appeal) suffered or incurred by Seller or Affiliates of
Seller for injury to persons or property caused by Purchaser's investigations
and inspection of the Property. Purchaser shall undertake its obligation to
defend set forth in the preceding sentence using attorneys selected by
Purchaser.
<PAGE>
If Purchaser, in its sole and absolute discretion, is dissatisfied 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; 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, Purchaser's obligation to indemnify Seller and restore
the Property, as more fully set forth in this Paragraph 7.1, shall survive the
Closing and the delivery of the Deed with respect to claims of any third
parties, and shall survive the termination of this Agreement (for any reason
other than Closing) with respect to all claims (i.e. third party or otherwise)
for a period of one (1) year from the date hereof.
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 except with respect to the
representations and warranties contained herein, 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 not limited to, the condition of the land or any improvements
comprising the Property, the existence or non-existence of "Hazardous
Materials" (as hereinafter defined), economic projections or market studies
concerning the Property, any development rights, taxes, bonds, covenants,
conditions and restrictions affecting the Property, water or water rights,
topography, drainage, soil, subsoil of the Property, the utilities serving the
Property or any zoning or building laws, rules or regulations or "Environmental
Laws" (hereinafter defined) affecting the Property. Seller makes no
representation or warranty that the Property complies with Title III of the
Americans with Disabilities Act or any fire code or building code. Except with
respect to a breach by Seller of any representation or warranty expressly
contained herein, Purchaser hereby releases Seller and the Affiliates of Seller
from any and all liability in connection with any claims regarding
environmental matters which Purchaser may have against Seller or the Affiliates
of Seller, and except with respect to a breach by Seller of any representation
or warranty expressly contained herein, Purchaser hereby agrees not to assert
any claims for contribution, cost recovery or otherwise, against Seller or the
Affiliates of Seller, relating directly or indirectly to the existence of
<PAGE>
asbestos or Hazardous Materials on, or environmental conditions of, the
Property, 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. Section 7401 et seq., the Federal Water
Pollution Control Act ("Clean Water Act"), 33 U.S.C. Section 1251 et seq., the
Toxic Substances Control Act ("TSCA"), 15 U.S.C. Section 2601 et seq., the Safe
Drinking Water Act ("Safe Drinking Water Act"), 42 U.S.C. Section 300f et seq.,
the Atomic Energy Act ("AEA"), 42 U.S.C. Section 2011 et seq., the Occupational
Safety and Health Act ("OSHA"), 29 U.S.C. Section 651 et seq., and the
Hazardous Materials Transportation Act (the "Transportation Act"), 49 U.S.C.
Section 1802 et seq. As used herein, "Hazardous Materials" means:
(1) "hazardous substances," as defined by CERCLA; (2) "hazardous wastes," as
defined by RCRA; (3) any radioactive material including, without limitation,
any source, special nuclear or by-product material, as defined by AEA; (4)
asbestos in any form or condition; (5) polychlorinated biphenyls; and (6) any
other material, substance or waste to which liability or standards of conduct
may be imposed under any Environmental Laws. Notwithstanding anything
contained herein to the contrary, the terms of this Paragraph 7.2 shall survive
the Closing and the delivery of the Deed and termination of this Agreement.
7.3. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Except as expressly set forth herein,
Seller makes no representation or warranty that such material is complete or
accurate or that Purchaser will achieve similar financial or other results with
respect to the operations of the Property, it being acknowledged by Purchaser
that Seller's operation of the Property and allocations of revenues or expenses
may be vastly different than Purchaser may be able to attain. Purchaser
acknowledges that it is a sophisticated and experienced purchaser of real
estate and further that Purchaser has relied upon its own investigation and
inquiry with respect to the operation of the Property and the representations
and warranties of Seller expressly contained herein, and releases Seller and
the Affiliates of Seller from any liability with respect to such historical
information, except with respect to a breach of a representation or warranty of
Seller contained herein. Notwithstanding anything contained herein to the
contrary, the terms of this Paragraph 7.3 shall survive the Closing and the
delivery of the Deed and termination of this Agreement.
<PAGE>
7.4. Seller has provided to Purchaser the following existing report:
Preliminary Environmental Site Assessment Report of Green Trails Apartments,
2800 Windsor Drive, Lisle, Illinois dated April 27, 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. Notwithstanding anything
contained herein to the contrary, the terms of this Paragraph 7.4 shall survive
the Closing and the delivery of the Deed and termination of this Agreement.
7.5. Purchaser acknowledges that there has been a recent fire at the
Property which affected multiple units (the "Fire Damage"). At Closing, Seller
shall give to Purchaser a credit against the Purchase Price in the amount of:
(a) $155,100.00 for the anticipated cost to repair the damage to the Property
as a consequence of such fire; (b) the additional sum of $20,000.00 for
emergency repairs; and (c) $100,000.00 for lost rental income. The aforesaid
credits shall be in complete and full satisfaction of any claims of Purchaser
against Seller as a consequence of such Fire Damage, including, without
limitation, any claims if Purchaser is unable to complete the repairs within
the time period currently estimated by Purchaser. Purchaser acknowledges that
it will be acquiring the Property subject to the Fire Damage. Seller shall
retain all rights to any insurance proceeds paid as a consequence of the Fire
Damage (including, without limitation, all rights to any rental loss
insurance).
7.5.1. Purchaser hereby covenants to use its reasonable, good
faith efforts to repair the Property in a manner which will cause Seller's
insurance companies (the "Insurers") to pay to Seller the full replacement cost
of the property affected by the Fire Damage, including, without limitation,
repairing the damaged property with materials of like quality and obtaining a
certificate of occupancy for the damaged property once it has been repaired.
In this regard, Purchaser agrees to work in good faith with, and cooperate
with, Seller and the Insurers, including, without limitation, making available
to Seller and the Insurers any records, checks, invoices, lien waivers, plans,
specifications and any other items or materials reasonably available to
Purchaser which are requested by Seller and/or the Insurers. In addition,
Purchaser agrees to allow the Insurers and the Seller access to the Property
(at reasonable times and upon prior notice). Purchaser agrees to endorse to
Seller any checks which are payable to Purchaser from any of the Insurers
arising in connection with the Fire Damage. Any sums received by Purchaser
from any of the Insurers in connection with the Fire Damage shall be promptly
remitted to Seller and shall be held in trust by Purchaser for the benefit of
Seller. The terms of this Paragraph 7.5 shall survive the Closing and the
delivery of the Deed.
7.5.2. Purchaser hereby acknowledges and agrees that Seller's
selection of Intercon as the general contractor for the repair work required to
be performed as a result of the Fire Damage is acceptable to Purchaser.
<PAGE>
8. CLOSING. The closing of this transaction (the "Closing") shall be on July
9, 1996 (the "Closing Date"), at the office of Title Insurer in Chicago,
Illinois 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 the State of
Illinois, 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. It is a condition of Closing
that Purchaser receive the Title Policy or marked-up commitment effective as of
Closing, with extended coverage, subject only to Permitted Exceptions and
Unpermitted Exceptions waived by Purchaser. 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
divided equally between the parties hereto.
9. CLOSING DOCUMENTS.
9.1. On the Closing Date, Seller and Purchaser shall execute and deliver
to one another a joint closing statement and transfer tax declarations. 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 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 special warranty 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
(in the form attached hereto as Exhibit I);
9.2.5. non-foreign affidavit (in the form of Exhibit J attached
hereto);
9.2.6. original, and/or copies of, leases affecting the Property in
Seller's possession;
9.2.7. all documents and instruments reasonably required by the
Title Insurer to issue the Title Policy;
9.2.8. possession of the Property to Purchaser, subject to the terms
of leases;
<PAGE>
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
and the obligation to refund the security deposits (in the form of Exhibit K);
9.2.11. an updated rent roll;
9.2.12. originals of all certificates, permits and licenses in
Seller's possession, if any, from all governmental authorities having
jurisdiction over the Premises which are necessary to permit the lawful access
to, and use and operation of, the Property, including without limitation the
certificate of occupancy; and
9.2.13. release of liens from Seller's Broker (as hereinafter
defined).
9.3. Seller shall request, and use reasonable efforts to obtain, a
certification from Green Trails Improvement Association (the "Association"),
that all assessments due to the Association from Seller, if any, have been paid
and Purchaser shall fully cooperate with Seller in requesting such
certification; provided, however, that Seller's inability to obtain such
approval shall not be a default hereunder or be a condition precedent to
Purchaser's obligations to close hereunder.
10. PURCHASER'S DEFAULT. ALL EARNEST MONEY DEPOSITED INTO THE ESCROW IS TO
SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND UNDERTAKINGS
UNDER THIS AGREEMENT. IN THE EVENT OF A DEFAULT OF THE PURCHASER UNDER THE
PROVISIONS OF THIS AGREEMENT, SELLER SHALL RETAIN ALL OF THE EARNEST MONEY AND
THE INTEREST THEREON AS SELLER'S SOLE RIGHT TO DAMAGES OR ANY OTHER REMEDY,
EXCEPT FOR PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER AND RESTORE THE PROPERTY
AS SET FORTH IN PARAGRAPH 7.1 HEREOF. 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) ITS (AND NOT AN UNRELATED THIRD PARTY'S) AFFIRMATIVE,
WILLFUL ACTION WHICH RESULTS IN THE RECORDING OF AN ENCUMBRANCE AGAINST THE
PROPERTY WITH THE INTENTION TO PREVENT THE SALE OF THE PROPERTY IN ACCORDANCE
WITH THE TERMS HEREOF AND WHICH GIVES RISE TO PURCHASER'S RIGHT TO TERMINATE
THIS AGREEMENT PURSUANT TO PARAGRAPH 5 HEREOF; (II) ITS FAILURE TO EXPEND UP TO
$50,000 IF (A) SELLER IS ABLE TO BOND OVER, CURE OR REMOVE A MINOR UNPERMITTED
EXCEPTION FOR A COST NOT TO EXCEED $50,000 OR (B) THE TITLE INSURER IS WILLING
TO INSURE OVER A MINOR UNPERMITTED EXCEPTION FOR A COST NOT TO EXCEED $50,000
IN ACCORDANCE WITH THE TERMS HEREOF WITH THE TERMS HEREOF OR (III) ITS WILLFUL
REFUSAL TO DELIVER THE DEED, THEN PURCHASER WILL BE ENTITLED TO EITHER (I) SUE
FOR SPECIFIC PERFORMANCE OR (ii) FOR ACTUAL, DOCUMENTED THIRD PARTY COSTS AND
EXPENSES IN CONNECTION WITH PURCHASER'S INSPECTION OF THE PROPERTY AND
NEGOTIATION OF THIS AGREEMENT, IN AN AGGREGATE AMOUNT NOT TO EXCEED $50,000.00.
<PAGE>
IN NO EVENT SHALL PURCHASER HAVE THE RIGHT TO OBTAIN THE REMEDIES OF BOTH
SPECIFIC PERFORMANCE AND MONETARY DAMAGES.
12. PRORATIONS.
12.1. Rents (exclusive of delinquent rents, but including prepaid rents);
refundable security deposits (which will be assigned to and assumed by
Purchaser and credited to Purchaser at Closing); water and other utility
charges; fuels; prepaid operating expenses; and other similar items shall be
adjusted ratably as of 12:01 a.m. on the Closing Date, and credited to the
balance of the cash due at Closing (the Closing Date shall be a day of income
and expense for Purchaser). 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 except as to delinquent rent referred to in Paragraph
12.2 below. The amount of all security deposits and other Tenant deposits,
together with any interest due thereon as required by the terms of the Leases
or by law, shall be credited to Purchaser. To the extent of the security
deposits and other Tenant deposits for which Purchaser has received a proration
credit, Purchaser shall be responsible for the disposition thereof in
accordance with the terms of the Leases.
12.2. Rents and other charges which at Closing are unpaid or past due
(hereinafter "Delinquent Rents") shall not be prorated. For a period of ninety
(90) days after Closing, Seller shall not take any action against Tenants to
collect Delinquent Rents. During said period, Purchaser shall use reasonable
efforts to collect Delinquent Rents, but such undertaking shall not be deemed
to obligate Purchaser to expend any funds or institute any legal proceedings of
any nature. Following said ninety (90) day period, Seller may bring a contract
action against any Tenant then owing Seller Delinquent Rents. Seller agrees
that such action shall be for sums due only and not for any possessory or other
interest in the Property. Rents and other amounts received by Purchaser or
Seller after Closing from a Tenant owing Delinquent Rents shall be applied, on
a Tenant by Tenant basis: (i) first, to all of Purchaser's costs of collection
incurred with respect to Delinquent Rents (including reasonable attorneys fees
and costs); (ii) second, to rents due for the month in which such payment is
received by Purchaser; (iii) third, to rents attributable to any period after
Closing which are past due on the date of receipt; and (iv) fourth, to
Delinquent Rents. For the purpose of the foregoing application of rents, rents
received from Tenants that are not delinquent shall not be applied to or
commingled with Delinquent Rents. Seller shall promptly remit to Purchaser any
sums received by Seller from Tenants after Closing for application (if
applicable) to Delinquent Rents by Purchaser in the manner provided above.
Purchaser shall promptly remit to Seller any amounts due Seller on account of
Delinquent Rents after application of rents in the manner provided above.
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 Delinquent Rents reconciliation statement and upon the verification of
material additional funds owing to Seller, Purchaser shall pay to Seller said
additional Delinquent Rents and the cost of performing Seller's audit.
Paragraph 12.2 of this Agreement shall survive the Closing and the delivery and
recording of the Deed.
<PAGE>
12.3. Notwithstanding any of the foregoing to the contrary, Purchaser
hereby acknowledges and agrees that there shall be no proration of either the
second installment of the 1995 real estate taxes or the real estate taxes for
fiscal year 1996. Purchaser assumes the obligation to pay the second
installment of the 1995 real estate taxes and the real estate taxes for fiscal
year 1996; provided, however, that in the event Seller pays the second
installment of the 1995 real estate taxes or all or any portion of the real
estate taxes for fiscal year 1996, Seller shall receive a credit at Closing for
any such amounts.
12.4. In addition, Seller shall give Purchaser a credit at Closing of
$200.00 for each residential unit which has been vacant for fifteen (15) days
or more prior to the Closing Date to make said units "rent ready"; provided,
however, that Purchaser shall not be entitled to such a credit for the
residential units which were rendered unrentable due to the Fire Damage.
12.5. Seller shall also give Purchaser a credit at Closing of
$12,000.00, which credit shall satisfy in full any obligations of Seller to:
(i) repair, reseed and aerate all damaged grass areas and lawn areas damaged by
fungus; (ii) repair all drainage problems along sidewalks and building corners;
(iii) repair cedar siding separation underneath roof gables; and (iv) replace
six fire emergency panels at the Property. Purchaser hereby acknowledges that
a new treadmill has been installed in the fintness center by Seller.
13. RECORDING. Neither this Agreement nor a memorandum thereof shall be
recorded and the act of recording by Purchaser shall be an act of default
hereunder by Purchaser and subject to the provisions of Paragraph 10 hereof.
14. ASSIGNMENT. The Purchaser shall not have the right to assign its interest
in this Agreement without the prior written consent of the Seller. Any
assignment or transfer of, or attempt to assign or transfer, Purchaser's
interest in this Agreement shall be an act of default hereunder by Purchaser
and subject to the provisions of Paragraph 10 hereof.
15. BROKER. The parties hereto represent and warrant that no broker
commission or finder fee is due and payable in connection with this transaction
other than to Cushman & Wakefield of Illinois, Inc. (to be paid by Seller).
Seller's commission to Cushman & Wakefield of Illinois, Inc. shall only be
payable out of the proceeds of the sale of the Property in the event the
transaction set forth herein closes. Purchaser and Seller shall indemnify,
defend and hold the other party hereto harmless from any claim whatsoever
(including without limitation, reasonable attorney's fees, court costs and
costs of appeal) from anyone claiming by or through the indemnifying party any
fee, commission or compensation on account of this Agreement, its negotiation
or the sale hereby contemplated other than to Cushman & Wakefield of Illinois,
Inc. The indemnifying party shall undertake its obligations set forth in this
Paragraph 15 using attorneys selected by the indemnifying party and reasonably
acceptable to the indemnified party. The provisions of this Paragraph 15 will
survive the Closing and delivery of the Deed.
16. SELLER'S REPRESENTATIONS AND WARRANTIES.
<PAGE>
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 Reid Reynolds or Alan G. Lieberman (collectively, 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,
subject to Paragraph 16.4, be remade at Closing: (i) Seller has no knowledge
of any pending or threatened litigation, claim, condemnation proceeding, cause
of action or administrative proceeding concerning the Property; (ii) Seller has
the power to execute this Agreement and consummate the transactions
contemplated herein; (iii) the rent roll (which includes a list of actual
security deposits) attached hereto as Exhibit M which Seller will update as of
the Closing Date is accurate as of the date set forth thereon; (iv) except as
may be set forth in the Existing Report, Seller has not received any notice
from any governmental authority having jurisdiction over the Property of any
uncured violation of any Environmental Law with respect to the Property; (v)
Seller has not given or suffered any assignment, pledge or encumbrance with
respect to any of the tenant leases or its interests thereunder except as
additional collateral for the existing loan secured by the Property; (vi)
Seller shall not and has not entered into any new leases, tenancy, license or
other agreement for the use or occupancy of the Property, except for Leases
executed in the ordinary course of business for terms of one year or less at
Seller's current asking rents; (vii) no leasing commissions, finder's fees,
bonuses or similar obligations are due or due to become due with respect to any
Lease or any renewal or extension thereof; and (viii) Seller is not a "foreign
person" as defined in Section 1445 of the Internal Revenue Code of 1986, as
amended.
16.3. Purchaser hereby represents and warrants to Seller that
Purchaser has the full right, power and authority to execute this Agreement and
consummate the transactions contemplated herein.
16.4. If at any time after the execution of this Agreement, either
Purchaser or Seller become aware of information which makes a representation
and warranty contained in this Agreement to become untrue in any material
respect, said party shall promptly disclose said information to the other party
hereto. Provided the party making the representation or warranty did not take
any deliberate actions to cause the representation or warranty in question to
become untrue in any material respect, said party shall not be in default under
this Agreement and the sole remedy of the other party shall be to terminate
this Agreement. Notwithstanding anything contained herein to the contrary, if
the status of any of the tenancies changes from the date of the rent roll
attached hereto and the date of the rent roll delivered at Closing, provided
the change in status is not caused by a breach of Seller's covenants contained
in Article 16 herein, then Purchaser shall not have the right to terminate this
Agreement or make any claim for a breach of a representation or warranty
hereunder involving the rent roll or tenancies thereunder. Purchaser and
Seller are prohibited from making any claims against the other party hereto
after the Closing with respect to any breaches of the other party's
<PAGE>
representations and warranties contained in this Agreement that the claiming
party has actual knowledge of prior to the Closing.
16.5. The parties agree that the representations contained herein
shall survive Closing until December 31, 1996 (i.e., the claiming party shall
have no right to make any claims against the other party for a breach of a
representation or warranty after December 31, 1996).
16.6. Seller covenants to operate and manage the Property in the same
manner that it has managed, maintained and operated the Property during the
period of Seller's ownership, subject to reasonable wear and tear and casualty.
16.7. 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:
A. Seller is not a fiduciary, as defined by the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") (including, but not limited
to administrator, officer, trustee, or custodian), counsel or an employee of,
and does not otherwise provide material services to the Michigan Public School
Employees' Retirement System, the State Employees Retirement System, the
Michigan State Police Retirement System, or the Michigan Judges Retirement
System (collectively the "Plan").
B. Seller does not employ any employees that are covered by the
Plan.
C. Seller is not an employee organization, as defined by ERISA.
D. No officer, director, shareholder, partner or other principal of
Seller is an individual that meets the description of a fiduciary or employee
organization in A, B or C above or, to the best of Seller's knowledge, a
spouse, ancestor, lineal descendant of such an individual or a spouse of a
lineal descendant.
E. Seller is not a "Plan Asset" subject to ERISA.
16.8. Seller covenants and agrees to name Purchaser as an additional
insured under its existing liability insurance policies in place in connection
with the Property.
17. LIMITATION OF LIABILITY.
No affiliate of Seller, nor any of Seller's or any affiliate of Seller's
respective beneficiaries, shareholders, partners, officers, directors, agents
or employees, heirs, successors or assigns shall have any personal liability of
any kind or nature for or by reason of any matter or thing whatsoever under, in
connection with, arising out of or in any way related to this Agreement and the
transactions contemplated herein, and Purchaser hereby waives for itself and
anyone who may claim by, through or under Purchaser any and all rights to sue
or recover on account of any such alleged personal liability.
<PAGE>
17.1. 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 $250,000.00.
Purchaser hereby waives for itself and anyone who may claim by, through or
under Purchaser any and all rights to sue or recover from Seller any amount
greater than said limit.
17.2. Seller further agrees not to distribute $250,000.00 of the
proceeds of the Purchase Price to its partners for the longer of (i) December
31, 1996 and (ii) final resolution of any claims by Purchaser and asserted in
writing against Seller prior to December 31, 1996 accordance with the terms of
this Agreement ("Claims"); provided, however, that if any Claims are disputed
by Seller, Seller shall have the right, by written notice to Purchaser, to
require Purchaser to file suit in a court of competent jurisdiction within
thirty (30) days after such notice to Purchaser; otherwise said notice with
respect to the Claim in question shall no longer prevent Seller from
distributing the proceeds.
18. TIME OF ESSENCE. Time is of the essence of this Agreement.
19. NOTICES. Any notice or demand which either party hereto is required or
may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by overnight courier
such as Federal Express, by facsimile transmission or made by United States
registered or certified mail addressed as follows:
TO SELLER: c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attention: Ilona Adams
(847) 317-4360
(847) 317-4462 (FAX)
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)
<PAGE>
TO PURCHASER: c/o Kensington Realty Advisors, Inc.
77 West Wacker Drive
Suite 3350
Chicago, Illinois 60601
Attention: James S. Smith
(312) 553-0780
(312) 553-0767 (FAX)
and one copy to: Holleb & Coff
55 East Monroe Street
Suite 4100
Chicago, Illinois 60606
Attention: James G. Haft, Esq.
(312) 807-4600
(312) 807-3900 (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 the same day as given if sent by
personal messenger 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.
20. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute two
(2) copies of this Agreement and three (3) copies of the Escrow Agreement and
forward them to Seller for execution, accompanied with the Earnest Money
payable to the Escrow Agent set forth in the Escrow Agreement. Seller will
forward one (1) copy of the executed Agreement to Purchaser and will forward
the following to the Escrow Agent:
(A) Earnest Money;
(B) One (1) fully executed copy of this Agreement; and
(C) Three (3) copies of the Escrow Agreement signed by the parties with a
direction to execute two (2) copies of the Escrow Agreement and deliver a fully
executed copy to each of the Purchaser and the Seller.
21. GOVERNING LAW. The provisions of this Agreement shall be governed by the
laws of the State of Illinois.
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.
<PAGE>
24. CAPTIONS. Paragraph titles or captions contained herein are inserted as a
matter of convenience and for reference, and in no way define, limit, extend or
describe the scope of this Agreement or any provision hereof.
25. SERVICE CONTRACTS. Attached hereto as Exhibit H is a list of all service
and/or maintenance contracts affecting the Property. Seller shall assign the
service contracts to Purchaser at Closing, and Purchaser shall assume
responsibility and obligations under the service contracts. Seller agrees not
to enter into any other service contracts affecting the Property. Seller
agrees to terminate any and all management agreements affecting the Property as
of the Closing Date.
26. CONFIDENTIALITY. The parties hereto agree to keep this Agreement
confidential and not make any public announcements or disclosures with respect
to the subject matter hereof, without the prior written consent of the other
party.
27. RPTA WAIVER. The parties hereto are willing to waive the thirty (30) day
period in which the transferor of property must provide a disclosure document
in accordance with 765 ILCS 90/1 et seq., commonly known as the "Responsible
Property Transfer Act" (hereinafter referred to as "RPTA"). The parties to the
transfer of Property (as defined in RPTA), do hereby indicate that they are
aware of the purpose and intent of the RPTA law and disclosure document and
hereby do waive, the thirty (30) day period prior to transfer of Property prior
to which a disclosure document must be delivered. The parties hereto agree and
consent to delivery of said disclosure document, if a disclosure document is
required as determined by Seller, on or before the date on which the transfer
of Property is to become final.
28. TRUSTEE'S EXCULPATION. All obligations of Purchaser hereunder are the
obligations of Great Lakes Property Group Trust only, and neither James S.
Smith, any successor trustee or any beneficiary of said trust shall have any
personal liability hereunder. Seller agrees that it will make no claim against
James S. Smith, any successor trustee or any beneficiary of said trust, all
recourse of Seller being limited solely to the assets of said trust; provided,
however, that nothing contained in this Paragraph 28 shall limit or impair
Seller's right to recover the Earnest Money, as set forth herein.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date first set forth above.
PURCHASER:
GREAT LAKES PROPERTY GROUP TRUST, an Illinois
Trust
By: /s/James S. Smith
--------------------------------------
Name: James S. Smith, not personally, but
solely as Trustee as aforesaid
SELLER:
LISLE APARTMENTS LIMITED PARTNERSHIP, an
Illinois limited partnership
By: Lisle Apartments Partners, Inc., an
Illinois corporation, its General Partner
By: /s/Alan G. Lieberman
-----------------------------------
Name: Alan G. Lieberman
---------------------------------
Its: Senior Vice President
----------------------------------
<PAGE>
GREEN TRAILS APARTMENTS, LISLE, ILLINOIS
_________________ of Cushman & Wakefield of Illinois, Inc. ("Seller's Broker")
executed this Agreement in its capacity as a real estate broker and
acknowledges that the fee or commission due it from Seller as a result of the
transaction described in this Agreement is as set forth in that certain Listing
Agreement, dated __, 199_ between Seller and Seller's Broker (the "Listing
Agreement"). Seller's Broker also acknowledges that payment of the aforesaid
fee or commission is conditioned upon the Closing and the receipt of the
Purchase Price by the Seller. Seller's Broker agrees to deliver a receipt to
the Seller at the Closing for the fee or commission due Seller's Broker and a
release, in the appropriate form, stating that no other fees or commissions are
due to it from Seller or Purchaser.
CUSHMAN & WAKEFIELD OF ILLINOIS, INC.
By:__________________________________
Name:________________________________
Its:_________________________________
<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
L - Rent Roll
