<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
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 28, 1996
--------------------------------
FIRST CAPITAL INCOME PROPERTIES, LTD. - SERIES XI
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Illinois 0-15538 36-3364279
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Two North Riverside Plaza, Suite 950, Chicago, Illinois 60606-2607
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (312) 207-0020
-----------------------------
- --------------------------------------------------------------------------------
(Former name or former address, if changes since last report.)
THIS DOCUMENT CONSISTS OF 54 PAGES.
THE EXHIBIT INDEX IS LOCATED ON PAGE 3.
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
- ------- ------------------------------------
Sentry Park West Joint Venture (the "Joint Venture"), a joint venture in which
First Capital Income Properties, Ltd. - Series XI (the "Registrant") has a 50%
interest, sold its interest in the real property commonly known as Sentry Park
West Office Campus, located in Blue Bell, Pennsylvania (the "Property").
The closing of this transaction occurred on August 28, 1996. The Property was
sold to an unrelated party pursuant to arm's-length negotiations. The sale
price was $11,650,000, of which the Registrant's share was $5,825,000. The
Joint Venture received net sale proceeds of $1,789,100, which was net of closing
prorations, selling expenses and the payoff of the mortgage loan collateralized
by the Property, of which the Registrant's share was $894,500. The Registrant
utilized its net sale proceeds to reduce the principal outstanding on the second
mortgage loan collateralized by Marquette Mall and Office Building.
Page 2
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ITEM 7. PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
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(page 5) Pro Forma Financial Information
Exhibits
2.1 (page 10) Real Estate Sale Agreement dated March 25, 1996 for
Sentry Park West Office Campus, Blue Bell, Pennsylvania.
2.2 (page 33) First Amendment to Real Estate Sale Agreement dated May
9, 1996 for Sentry Park West Office Campus, Blue Bell,
Pennsylvania.
2.3 (page 38) Second Amendment to Real Estate Sale Agreement dated May
24, 1996 for Sentry Park West Office Campus, Blue Bell,
Pennsylvania.
2.4 (page 41) Third Amendment to Real Estate Sale Agreement dated May
30, 1996 for Sentry Park West Office Campus, Blue Bell,
Pennsylvania.
2.5 (page 45) Fourth Amendment to Real Estate Sale Agreement dated
July 2, 1996 for Sentry Park West Office Campus, Blue Bell,
Pennsylvania.
2.6 (page 49) Fifth Amendment to Real Estate Sale Agreement dated
August 21, 1996 for Sentry Park West Office Campus, Blue Bell,
Pennsylvania.
2.7 (page 52) Closing Statement dated August 28, 1996 for Sentry Park
West, 1777 Sentry Parkway West, Blue Bell, Pennsylvania.
No information is required under Items 1,3,4,5,6,and 8; therefore, those Items
have been omitted.
Page 3
<PAGE>
SIGNATURES
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.
FIRST CAPITAL INCOME PROPERTIES, LTD. - SERIES XI
By: FIRST CAPITAL FINANCIAL CORPORATION
As General Partner
September 11, 1996 By: /s/ NORMAN M. FIELD
- ------------------ --------------------------------------------
NORMAN M. FIELD
Vice President - Finance and Treasurer
Page 4
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FIRST CAPITAL INCOME PROPERTIES, LTD. - SERIES XI
The accompanying unaudited Pro Forma Balance Sheet has been presented as if the
sale of the Property had occurred on June 30, 1996. The accompanying unaudited
pro Forma Statement of Income and Expenses for the six months ended June 30,
1996 has been presented as if the sale of the Property had occurred on December
31, 1995. The accompanying unaudited Pro Forma Statement of Income and Expenses
for the year ended December 31, 1995 has been presented as if the sale of the
Property had occurred on December 31, 1994. In the opinion of the General
Partner, all adjustments necessary to reflect the sale of the Property have been
made. The unaudited pro forma financial statements are not necessarily
indicative of what the actual financial position and results of operations would
have been had such transactions actually occurred as of December 31, 1994, 1995
and June 30, 1996, nor do they purport to represent the results of operations of
the Registrant for future periods.
Page 5
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FIRST CAPITAL INCOME PROPERTIES, LTD.-SERIES XI
PRO FORMA BALANCE SHEET
(Unaudited)
(All dollars rounded to nearest 00s)
ASSETS
<TABLE>
<CAPTION>
Pro Forma
June 30, Pro Forma Balance
1996 Adjustments Sheet
--------- ----------- -----------
<S> <C> <C> <C>
Investment in commercial rental properties:
Land $ 8,948,500 ($796,900) $ 8,151,600
Buildings and improvements 56,379,300 (7,027,500) 49,351,800
----------- ----------- -----------
65,327,800 (7,824,400) 57,503,400
Accumulated depreciation and amortization (19,333,100) 3,043,000 (16,290,100)
----------- ----------- -----------
Total investment properties, net of
accumulated depreciation and amortization 45,994,700 (4,781,400) 41,213,300
Cash and cash equivalents 1,708,000 819,800 2,527,800
Rents receivable 449,800 10,000 459,800
Other assets (net of accumulated amortization
on loan acquisition costs of $982,700,
$66,100 and $916,600, respectively) 220,800 (25,200) 195,600
----------- ----------- -----------
$48,373,300 ($3,976,800) $44,396,500
=========== =========== ===========
LIABILITIES AND PARTNERS' (DEFICIT)
Liabilities:
Mortgage loans payable $40,624,600 ($4,673,700) $35,950,900
Front-End Fees loan payable to Affiliate 8,295,200 8,295,200
Accounts payable and accrued expenses 1,380,500 (81,800) 1,298,700
Due to Affiliates 422,300 (700) 421,600
Security deposits 224,000 (62,100) 161,900
Other liabilities 316,800 316,800
----------- ----------- -----------
51,263,400 (4,818,300) 46,445,100
----------- ----------- -----------
Partners' (deficit)
General Partner (deficit) (2,890,100) 841,500 (2,048,600)
Limited Partners (57,621 Units issued
and outstanding) 0 0 0
----------- ----------- -----------
(2,890,100) 841,500 (2,048,600)
----------- ----------- -----------
$48,373,300 ($3,976,800) $44,396,500
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the pro forma
financial statements.
Page 6
<PAGE>
FIRST CAPITAL INCOME PROPERTIES, LTD.-SERIES XI
PRO FORMA STATEMENT OF INCOME AND EXPENSES
(Unaudited)
(All dollars rounded to nearest 00s except per Unit amounts)
<TABLE>
<CAPTION>
Statement
of Income
and Expenses
For the Six Pro Forma
Months Ended Statement
June 30, Pro Forma of Income
1996 Adjustments and Expenses
------------ ----------- ------------
<S> <C> <C> <C>
Income:
Rental $5,312,500 ($758,100) $4,554,400
Interest 30,800 (600) 30,200
------------ ---------- -----------
5,343,300 (758,700) 4,584,600
------------ ---------- -----------
Expenses:
Interest
Affiliate 311,300 311,300
Nonaffiliates 1,716,000 (188,800) 1,527,200
Depreciation and amortization 826,400 (14,900) 811,500
Property operating:
Affiliates 282,600 (6,500) 276,100
Nonaffiliates 1,051,400 (190,600) 860,800
Real estate taxes 717,400 (61,800) 655,600
Insurance - Affiliate 73,100 (5,300) 67,800
Repairs and maintenance 631,000 (121,000) 510,000
General and administrative:
Affiliates 17,300 17,300
Nonaffiliates 94,800 94,800
------------ ---------- -----------
5,721,300 (588,900) 5,132,400
------------ ---------- -----------
Net (loss) ($378,000) ($169,800) ($547,800)
============ ========== ===========
Net (loss) allocated
to General Partner ($378,000) ($169,800) ($547,800)
============ ========== ===========
Net (loss) allocated
to Limited Partners $0 $0 $0
============ ========== ===========
Net (loss) allocated to Limited
Partners per Unit (57,621 Units
outstanding) $0.00 $0.00 $0.00
============ ========== ===========
</TABLE>
The accompanying notes are an integral part of the pro forma financial
statements.
Page 7
<PAGE>
FIRST CAPITAL INCOME PROPERTIES, LTD. - SERIES XI
PRO FORMA STATEMENT OF INCOME AND EXPENSES
(All dollars rounded to nearest 00s except per Unit amounts)
<TABLE>
<CAPTION>
Statement
of Income
and Expenses Pro Forma
For the Year Statement
Ended Pro Forma of Income
December 31, Adjustments and Expenses
1995 (Unaudited) (Unaudited)
------------- -------------- --------------
<S> <C> <C> <C>
Income:
Rental $10,383,600 ($1,400,800) $8,982,800
Interest 52,900 (2,300) 50,600
------------- -------------- --------------
10,436,500 (1,403,100) 9,033,400
------------- -------------- --------------
Expenses:
Interest:
Affiliate 673,000 673,000
Nonaffiliates 3,724,100 (401,000) 3,323,100
Depreciation and amortization 2,341,800 (557,200) 1,784,600
Property operating:
Affiliates 602,000 (22,400) 579,600
Nonaffiliates 2,162,500 (375,200) 1,787,300
Real estate taxes 1,285,100 (123,500) 1,161,600
Insurance - Affiliate 111,800 (12,300) 99,500
Repairs and maintenance 1,296,900 (263,400) 1,033,500
General and administrative:
Affiliates 41,500 41,500
Nonaffiliates 151,200 (1,700) 149,500
Provisions for value impairment 5,600,000 5,600,000
------------- -------------- --------------
17,989,900 (1,756,700) 16,233,200
------------- -------------- --------------
Net (loss) ($7,553,400) $353,600 ($7,199,800)
============= ============== ==============
Net (loss) allocated
to General Partner ($2,223,200) $3,500 ($2,219,700)
============= ============== ==============
Net (loss) allocated
to Limited Partners ($5,330,200) $350,100 ($4,980,100)
============= ============== ==============
Net (loss) allocated to Limited Partners
per Unit (57,621 Units outstanding) ($92.50) $6.07 ($86.43)
============= ============== ==============
The accompanying notes are an integral part of the pro forma financial statements.
</TABLE>
Page 8
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FIRST CAPITAL INCOME PROPERTIES, LTD. - SERIES XI
Notes to Pro Forma Balance Sheet and
Pro Forma Statements of Income and Expenses
1) For the purpose of the Pro Forma Balance Sheet:
(a) the accounts for land, buildings and improvements, accumulated
depreciation and amortization, rents receivable, other assets, accounts
payable and accrued expenses, due to Affiliates and security deposits
have been adjusted as of June 30, 1996 to reflect the sale of the
Property;
(b) cash and cash equivalents has been adjusted to include the net cash
received by the Registrant from the Joint Venture from the sale of the
Property and
(c) mortgage loans payable has been adjusted to reflect the Registrant's
share of the payoff of the mortgage loan which encumbered the Property.
2) For the purpose of the Pro Forma Statements of Income and Expenses for the
six months ended June 30, 1996 and for the year ended December 31, 1995, the
adjustments to the income and expenses reflect the Registrant's share of
operations of the Property.
Page 9
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Exhibit 2.1
SENTRY PARK WEST OFFICE CAMPUS
BLUE BELL, PENNSYLVANIA
REAL ESTATE SALE AGREEMENT
--------------------------
THIS REAL ESTATE SALE AGREEMENT (this "Agreement") is made as of the 25th
day of March, 1996, by and between SENTRY WEST JOINT VENTURE, an Illinois joint
venture partnership ("Seller"), with an office at Two North Riverside Plaza,
Suite 600, Chicago, Illinois 60606 and BGK PROPERTIES, INC., a Delaware
corporation ("Purchaser"), with an office at 330 Garfield Street, Suite 200,
Santa Fe, New Mexico 87501.
RECITALS
A. Seller is the owner of a certain parcel of real estate (the "Real
Property") commonly known as 1777 Sentry Parkway West in the City of Blue Bell,
County of Montgomery, Commonwealth of Pennsylvania, which parcel is more
particularly described in attached Exhibit A, and upon which is located a five
(5) building office development commonly known as "Sentry Park West".
B. Seller desires to sell to Purchaser, and Purchaser desires to purchase
from Seller, the "Property" (as such term is hereinafter defined), each in
accordance with and subject to the terms and conditions set forth in this
Agreement.
THEREFORE, in consideration of the above Recitals, the mutual covenants and
agreements herein set forth and the benefits to be derived therefrom, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Purchaser and Seller agree as follows:
1. PURCHASE AND SALE
Subject to and in accordance with the terms and conditions set forth in
this Agreement, Purchaser shall purchase from Seller and Seller shall sell to
Purchaser the Real Property, together with: (i) all buildings and improvements
owned by Seller and any and all of Seller's rights, easements, licenses and
privileges presently thereon or appertaining thereto; (ii) Seller's right, title
and interest in and to the leases (the "Leases") affecting the Property or any
part thereof; (iii) the interest of Seller in all security deposits held by
Seller that have been paid by tenants under the Leases and not applied by Seller
in accordance with the terms of the Leases and/or applicable law, if any (the
"Security Deposits); (iv) all accrued but unpaid interest on the Security
Deposits owed by Seller pursuant to applicable law and/or a particular Lease, if
any ("Security Deposit Interest"); (v) all of the furniture, furnishings,
fixtures, equipment, maintenance vehicles, tools and other tangible personalty
owned by Seller, located on the Property and used in connection therewith that
are listed on Exhibit C attached hereto (the "Personal Property"); (vi) all
right, title and interest of Seller under those "Service Contracts" (as defined
in Section 10(A)(ii) below) that Purchaser elects to assume and/or is required
to assume in accordance with Section 11(M) below; (vii) if and to the extent
transferable, all
<PAGE>
licenses and permits issued by governmental authorities relating to the use,
maintenance, occupancy or operation of the Property; all to the extent
applicable to the period from and after the "Closing" (as such term is
hereinafter defined) (items (i) through (vii) above, together with the Real
Property, are collectively referred to in this Agreement as the "Property"). All
of the foregoing expressly excludes all property owned by tenants or other users
or occupants of the Property except to the extent that any Security Deposits
and/or Security Deposit Interest are deemed to be "owned" by a tenant under
applicable law.
2. PURCHASE PRICE
The purchase price to be paid by Purchaser to Seller for the Property is
Twelve Million Dollars ($12,000,000.00) (the "Purchase Price"). The Purchase
Price shall be paid as follows:
A. Earnest Money.
(i) Upon execution of this Agreement by Purchaser and Seller,
Purchaser shall deliver to Partners Title Company of Houston,
Texas ("Escrowee") initial earnest money (the "Initial Earnest
Money") in the sum of One Hundred Thousand Dollars
($100,000.00) and Purchaser, Seller and Escrowee shall execute
a joint order escrow agreement in the form of Exhibit F
attached hereto. If Purchaser does not terminate this
Agreement pursuant to and in accordance with Section 8(A)
below, Purchaser shall, on or before the expiration of the
"Review Period" (as defined in Section 8(A) below), deposit
with the Escrowee additional earnest money (the "Additional
Earnest Money") in the sum of One Hundred Thousand Dollars
($100,000.00). The Initial Earnest Money and, if deposited or
required to be deposited with the Escrowee, the Additional
Earnest Money, together with any interest earned thereon net
of investment costs, are referred to in this Agreement as the
"Earnest Money". The Earnest Money shall be invested as Seller
and Purchaser so direct. Any and all interest earned on the
Earnest Money shall be reported to Purchaser's federal tax
identification number.
(ii) If the transaction closes in accordance with the terms of this
Agreement, at Closing, the Earnest Money shall be delivered by
Escrowee to Seller as part payment of the Purchase Price. If
the transaction fails to close due to a default on the part of
Purchaser, the Earnest Money shall be delivered by Escrowee to
Seller as liquidated and agreed upon damages in accordance
with Section 7(B) below. If the transaction fails to close due
to a default on the part of Seller, the Earnest Money shall be
delivered by Escrowee to Purchaser, and Purchaser shall have
the remedy provided for in Section 7(A) below.
B. Cash at Closing. At Closing, Purchaser shall pay to Seller, by wire
transferred current federal funds, an amount equal to the Purchase Price, minus
the sum of the
2
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Earnest Money which Seller receives at Closing from the Escrowee, and plus or
minus, as the case may require, the closing prorations and adjustments to be
made pursuant to Section 4(C) below.
3. EVIDENCE OF TITLE
A. Title Commitment.
Purchaser shall, within ten (10) days after the date of this
Agreement, obtain and cause to be delivered to Seller a current (that is,
effective within thirty (30) days prior to the date of this Agreement)
commitment for an ALTA Owner's Title Insurance Policy (the "Title Commitment"),
in the amount of the Purchase Price, issued by Partners Title Company of
Houston, Texas (as agent for Chicago Title Insurance Company) (the "Title
Insurer"). At Closing, the conveyance of the Property to Purchaser shall be made
subject only to those exceptions to title which are more fully described on
attached Exhibit B and exceptions to title which become Permitted Exceptions
pursuant to this Section 3 (collectively, the "Permitted Exceptions"), and
Purchaser shall be responsible at Closing for obtaining a later-dated title
commitment from the Title Insurer in the amount of the Purchase Price reflecting
the conveyance of the Property to Purchaser.
B. Survey.
Seller shall, within thirty (30) days after the date of this
Agreement, deliver to Purchaser a survey (the "Survey") of the Real Property
prepared by a surveyor licensed in the Commonwealth of Pennsylvania in
accordance with the Minimum Standard Requirements for Land Title Surveys (as
jointly established and adopted in 1992 by the American Land Title Association
and American Congress on Surveying and Mapping) for an "Urban ALTA/ACSM Land
Title Survey" (as defined therein).
C. Review of Title Commitment and Survey.
If the Title Commitment or Survey disclose exceptions to title
other than those Permitted Exceptions which are noted on attached Exhibit B,
then Purchaser shall have until 5:00 p.m. (Chicago, Illinois time) on the tenth
(10th) day after its receipt of the last of the Title Commitment and the Survey
within which to notify Seller of any such exceptions to title to which Purchaser
objects. If any additional exceptions to title arise between the date of the
Title Commitment, the Survey and the Closing, Purchaser shall have five (5) days
after its receipt of notice of same within which to notify Seller of any such
exceptions to title to which Purchaser objects. Any such exceptions to title not
objected to by Purchaser as aforesaid shall become Permitted Exceptions. If
Purchaser objects to any such exceptions to title, Seller shall have until
Closing (but in any event at least fifteen [15] days after it receives notice of
Purchaser's objection(s)) to remove such exceptions to title by waiver or
endorsement by the Title Insurer. If Seller fails to remove any such exceptions
to title as aforesaid, Purchaser may, as its sole and exclusive remedy,
terminate this Agreement and obtain a return of the Earnest Money. If Purchaser
does not elect to terminate this Agreement, Purchaser shall consummate the
Closing and accept title to the Property subject to all such exceptions to title
(in which event, all such exceptions to title shall be deemed "Permitted
Exceptions").
3
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4. CLOSING
A. Closing Date. The "Closing" of the transaction contemplated by this
Agreement (that is, the payment of the Purchase Price, the transfer of title to
the Property, and the satisfaction of all other terms and conditions of this
Agreement) shall occur at 10 a.m. (Chicago, Illinois time) on the seventy-fifth
(75th) day after the date of this Agreement at the Chicago, Illinois office of
counsel for Seller, Rosenberg & Liebentritt, P.C., or at such other time and
place as Seller and Purchaser shall agree in writing. The "Closing Date" shall
be the date of Closing. If the date for Closing above provided for falls on a
Saturday, Sunday or legal holiday, then the Closing Date shall be the next
business day.
B. Closing Documents.
(i) Seller. At Closing, Seller shall deliver to Purchaser the
following:
(a) a special warranty deed (the "Deed"), subject to
Permitted Exceptions, and in form acceptable to the
Title Insurer;
(b) a "special" or "limited" warranty bill of sale (the
"Bill of Sale") sufficient to transfer to Purchaser
title to the Personal Property in its "as is, where is"
condition and expressly disclaiming any warranties other
than as to title as aforesaid;
(c) a letter advising tenants under the Leases of the change
in ownership of the Property, that all Security Deposits
and Security Deposit Interest transferred to Purchaser
at Closing (either by way of a credit against the
Purchase Price or, in the case of Security Deposits in
the form of a letter of credit or held in a segregated
bank account, by way of assignment to Purchaser at
Closing) are held by and are the responsibility of
Purchaser and directing the tenants to pay all payments
of rent during the period from and after the Closing
Date to Purchaser;
(d) four (4) counterparts of an assignment and assumption of
the Leases, Security Deposits and Security Deposit
Interest in the form of Exhibit G attached hereto (the
"Lease Assignment"), executed by Seller;
(e) four (4) counterparts of an assignment and assumption
of: (1) those "Terminable Service Contracts" (as defined
in Section 11(M) below) that Purchaser does not elect be
canceled in accordance with Section 11(M) below, and (2)
all "Required Service Contracts" (as defined in Section
11(M) below), such assignment and assumption to be in
the form of Exhibit H attached hereto (the "Service
Contract Assignment"), executed by Seller;
4
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(f) an affidavit stating, under penalty of perjury,
Seller's U.S. taxpayer identification number and that
Seller is not a foreign person within the meaning of
Section 1445 of the Internal Revenue Code;
(g) four (4) counterparts of a closing statement (the
"Closing Statement") to be executed by Seller and
Purchaser, containing the "Closing Delinquency
Schedule" (as defined below) and setting forth the
prorations and adjustments to the Purchase Price as
required by Section 4(C) below, executed by Seller;
(h) all executed "Estoppel Certificates" (as hereinafter
defined) received by Seller as of the Closing Date;
(i) four (4) counterparts of an assignment and assumption
of the "Sewer Easement Agreement" (as defined in
Section 11(R) below), the "Sewer Escrow Agreement" (as
defined in Section 11(R) below) and all of the other
documents set forth in items 9 through 20 on attached
Exhibit B, in the form of Exhibit M attached hereto
(the "Assignment and Assumption of Title Documents"),
executed by Seller; and
(j) three (3) counterparts of the "Escrow Assumption
Letter" (as defined in Section 11(R) below), executed
on behalf of Seller and "R&L" (as defined in Section
11(R) below).
(ii) Purchaser. Purchaser shall deliver or cause to be
delivered to Seller at Closing:
(a) the funds required pursuant to Section 2(B) above;
(b) four (4) counterparts of the Lease Assignment, executed
by Purchaser;
(c) four (4) counterparts of the Service Contract
Assignment, executed by Purchaser;
(d) four (4) counterparts of the Closing Statement,
executed by Purchaser;
(e) copies of any executed Estoppel Certificates received
by Purchaser as of the Closing Date;
(f) four (4) counterparts of the Assignment and Assumption
of Title Documents, executed by Purchaser;
5
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(g) if required under Section 11(R) below, the "Substitute
Deed of Dedication" (as defined in Section 11(R)
below); and
(h) three (3) counterparts of the Escrow Assumption Letter,
executed on behalf of Purchaser.
C. Closing Prorations and Adjustments.
(i) The following items are to be prorated or adjusted (as
appropriate) as of the Closing Date, it being understood
that for purposes of prorations and adjustments, Seller
shall be deemed the owner of the Property on the day prior
to the Closing Date and Purchaser shall be deemed the owner
of the Property as of the Closing Date:
(a) real estate and personal property taxes and assessments
(initially on the basis of the most recent
ascertainable tax bill if the current bill is not then
available and, in all events, subject to reproration as
described in Section 4(C)(iv) below);
(b) water and sewer use charges, if any (initially on the
basis of the most recent periods for which the same
have been billed if the bill with respect to the period
through Closing is not then available and subject to
reproration as described in Section 4(C)(iii) below);
(c) the "minimum" or "base" rent payable by tenants under
the Leases ("Base Rent"); provided, however, that rent
and all other sums which are due and payable to Seller
by any tenant but uncollected as of the Closing shall
not be adjusted, but Purchaser shall cause the rent and
other sums for the period prior to Closing to be
remitted to Seller if, as and when collected. At
Closing, Seller shall deliver to Purchaser a schedule
(the "Closing Delinquency Schedule") of all such past
due but uncollected rent and other sums owed by tenants
(the "Past Due Rents"). Purchaser shall include the
amount of the Past Due Rents in the first bills
thereafter submitted to the tenants in question after
the Closing, and shall continue to do so for twelve
(12) months thereafter. Purchaser shall promptly remit
to Seller any such Past Due Rents paid by tenants set
forth on the Closing Delinquency Schedule, but only if
a deficiency in the then current rent is not thereby
created. To the extent not set forth on the Closing
Delinquency Schedule, overage rent and reimbursement of
real estate taxes payable, common area maintenance,
utility charges, water and sewer charges, insurance and
all other charges
6
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to or contributions by tenants under the Leases other
than Base Rent (collectively, the "Operating Expense
Reimbursements") shall be prorated as follows: the
amount of any Base Rents and Operating Expense
Reimbursements to be paid by any tenant shall be paid
in accordance with such tenant's Lease as now existing
(Purchaser hereby covenanting and agreeing not to
modify the Leases after Closing to change the date
and/or method for payment of such amounts until after
the occurrence of the reprorations described in
Sections 4(C)(iii) and 4(C)(iv) below) and Purchaser
shall, after Closing, promptly pay to Seller a prorata
portion of such Operating Expense Reimbursement, based
upon apportionment being made as of the Closing Date,
promptly after the date when such Operating Expense
Reimbursement is received from the tenant;
(d) with respect to tenant improvement costs and/or
allowances or leasing commissions relating to (1) "New
Leases" (as hereinafter defined) executed after the
date of this Agreement and prior to the end of the
"Review Period" (as hereinafter defined), and (2) New
Leases executed during the period between the
expiration of the Review Period and Closing with the
consent of Purchaser granted (or deemed to be granted)
in accordance with Section 11(L) below, Seller and
Purchaser agree that such costs, allowances and
commissions shall be prorated over the term of any such
New Lease with Seller being responsible for a portion
of such costs, allowances and commissions based on the
ratio of base rent payments received by Seller through
the Closing Date to the total base rent payable over
the term of the particular New Lease and, in the event
that Seller has paid such costs, allowances and/or
commissions prior to Closing, Purchaser shall reimburse
Seller at Closing for a prorata portion of the amount
of any such costs, allowances and/or commissions paid
by Seller, based on the above-described proration.
(e) the amount of the Security Deposits and Security
Deposit Interest held by Seller as of the Closing Date,
if any, with Purchaser receiving a credit at Closing
against the Purchase Price in the amount of the
Security Deposits and Security Deposit Interest held by
Seller as of the Closing Date, if any;
(f) to the extent not included in the amounts prorated in
Section 4(C)(i)(b) above, water, electric, telephone
and all other utility and fuel charges, fuel on hand
(at cost plus sales tax), and any deposits with utility
companies (to the
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<PAGE>
extent possible, utility prorations
will be handled by meter readings on the day
immediately preceding the Closing Date);
(g) amounts due and prepayments under the Service
Contracts;
(h) assignable license and permit fees; and
(i) other similar items of income and
expenses of operation.
(ii) Notwithstanding any other provision of this Section 4(C),
Seller shall in all events be entitled to retain Operating
Expense Reimbursements paid by tenants for real estate taxes
and assessments, common area maintenance expenses, utility
charges, water and sewer charges, insurance and all other
costs and expenses charged to tenants under the Leases as of
the Closing to the extent not in excess of such taxes,
assessments, charges and expenses paid by Seller (whether by
direct payment of such amounts in cash by Seller or by
credit given by Seller to Purchaser at Closing) for the
period prior to the Closing Date.
(iii) As soon as practical after Closing, but in no event later
than March 31, 1997, Seller and Purchaser shall, with
respect to any amounts prorated or adjusted at Closing
pursuant to Section 4(C)(i) above based on estimates or
formulae, as applicable (other than real estate and personal
property taxes and assessments, which shall be reprorated in
accordance with Section 4(C)(iv) below), jointly determine
and reapportion such amounts in accordance with Section
4(C)(i) above upon determination of the actual costs or
expenses with respect thereto. In the event that the amount
credited to Purchaser by Seller at Closing exceeds the
amount of the credit that Purchaser should have received had
such actual amounts been available at Closing, Purchaser
shall promptly remit such excess amount to Seller. In the
event that: (1) the amount credited to Seller by Purchaser
at Closing exceeds the amount of the credit that Seller
should have received at Closing had such actual amounts been
available at Closing; and/or (2) the amount of the Operating
Expense Reimbursements with respect to such amounts retained
by Seller at Closing exceed the amount of the Operating
Expense Reimbursements that Seller should have retained at
Closing had such actual amounts been available at Closing,
Seller shall promptly remit such excess amounts to Purchaser
and, in the event that any portion of such excess amounts
are refundable to tenants under any of the Leases, Purchaser
shall be thereafter obligated to promptly remit such portion
to the particular tenants in question (and Purchaser shall
indemnify, defend and hold Seller, its partners, and their
respective directors, officers, employees
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<PAGE>
and agents, and each of them, harmless from and against any
losses, claims, damages and liabilities [including, without
limitation, reasonable attorneys' fees and expenses incurred
in connection therewith] arising out of or resulting from
Purchaser's failure to remit such amounts to the tenants in
accordance with this Section 4(C)(iii) and Section 4(C)(iv)
below).
(iv) Seller is currently seeking a reduction of the assessed
value of the Property for real estate tax purposes with
respect to all tax years commencing in 1993 through 1996 and
a corresponding reduction in real estate taxes payable with
respect to all tax years commencing in 1993 through 1996.
Purchaser and Seller hereby agree that: (1) Seller shall,
after Closing, maintain control of the real estate tax
appeal and reduction process with respect to all tax years
commencing in 1993 through 1996 and shall have the right to
engage counsel, consultants, expert witnesses and appraisers
as Seller shall reasonably determine to be necessary to such
appeal and Purchaser shall cooperate (and cause its counsel
to cooperate) with Seller with respect to such process; (2)
Seller shall be responsible for the cost of any counsel,
consultant, expert witness or appraiser employed by Seller
to obtain any reduction of real estate taxes for tax years
commencing in 1993 through 1995; (3) Purchaser and Seller
shall each be responsible for a portion of the cost of any
counsel, consultant, expert witness or appraiser employed by
Seller to obtain any reduction of real estate taxes for tax
years commencing in 1996, with apportionment being made
based on their respective periods of ownership; and (4)
Seller and Purchaser shall reprorate real estate and
personal property taxes (which were approximated at Closing
pursuant to Section 4(C)(i)(a) above based on the most
recent ascertainable tax bills) and the Operating Expense
Reimbursements received from tenants with respect to such
taxes upon issuance of the final real estate and personal
property tax bills for the tax years in which the Closing
occurs. If, after the reproration described in item (4) of
this Section 4(C)(iv), the amount credited to Purchaser by
Seller at Closing exceeds the amount of the credit that
Purchaser should have received had such actual amounts been
available at Closing, Purchaser shall promptly remit such
excess amount to Seller. If, after the reproration described
in item (4) of this Section 4(C)(iv): (x) the amount
credited to Seller by Purchaser at Closing with respect to
such taxes exceeds the amount of the credit that Seller
should have received at Closing had such actual amounts been
available at Closing; and/or (y) the amount of the Operating
Expense Reimbursements with respect to such taxes retained
by Seller at Closing exceed the amount of the Operating
Expense Reimbursements that Seller should have retained at
Closing with respect to such taxes had the actual amount of
such taxes been available at Closing, Seller shall promptly
remit such excess amounts to Purchaser and, in the event
that any portion of such
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<PAGE>
excess amounts are refundable to tenants under any of the
Leases, Purchaser shall be thereafter obligated to remit
such portion to the particular tenants in question.
(v) If Seller has not received all Past Due Rents within sixty
(60) days after the Closing Date, Seller at its sole cost
and expense, shall be entitled at any time within the twelve
(12) month period after such date to commence such actions
or proceedings not affecting possession or enforcing
landlord's liens or resulting in termination of the Lease in
question as Seller shall desire to collect any such Past Due
Rents, and Purchaser shall cooperate with Seller in any such
action.
(vi) For purposes of this Section 4(C), the amount of any expense
credited by one party to the other shall be deemed an
expense paid by that party. The terms and provisions of
this Section 4(C) shall survive Closing and the delivery of
the Deed.
D. Transaction Costs.
-----------------
Seller shall be responsible for and pay upon Closing one-half of
the amount of the transfer taxes owed in connection with the Deed (and Seller
and Purchaser shall timely execute and deliver such forms and returns as are
necessary in connection therewith). Purchaser shall be responsible for and pay
all other closing and transaction costs other than those costs to be paid by
Seller in accordance with the preceding sentence including, without limitation,
(1) one-half of the amount of the transfer taxes owed in connection with the
Deed, (2) the entire cost of the owner's title policy to be delivered to
Purchaser in accordance with the provisions of the marked-up title commitment
described in Section 3(A) above, (3) title insurance premiums for any
endorsements requested by Purchaser, (4) the entire cost of the Survey, (5)
recording charges, (6) Title Insurer's standard escrow fees, if any, (6) Title
Insurer's fee, if any, to perform a "New York Style" closing in which the Title
Insurer insures the "gap" period between the date of the most recent date down
of the title commitment and the Closing Date and issues a marked-up title
commitment at Closing, together with all other charges customarily paid by a
purchaser of improved real estate in the Commonwealth of Pennsylvania, whether
or not the Closing occurs. Seller and Purchaser shall, however, be responsible
for the fees of their respective attorneys.
E. Possession.
----------
Upon Closing, Seller shall deliver to Purchaser possession of the
Property, subject to such matters as are permitted by or pursuant to this
Agreement.
5. CASUALTY LOSS AND CONDEMNATION
------------------------------
If, prior to Closing, the Property or any part thereof shall be
condemned, or destroyed or damaged by fire or other casualty, Seller shall
promptly so notify Purchaser. In such event, provided that either: (i) the
reasonable cost to restore the Property due to such damage or destruction is
greater than Five Hundred Thousand and No/100 Dollars ($500,000.00), or (ii) any
portion of any of the office buildings located at the Property is taken and/or
condemned, or (iii) some other taking and/or condemnation materially, adversely
affects the value of the Property
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<PAGE>
(items (ii) and (iii) are collectively referred to hereinafter as a "Material
Condemnation"), then either Seller or Purchaser shall have the option to
terminate this Agreement by delivery of its written termination notice to the
other within fifteen (15) days after Seller's delivery to Purchaser of its
notice of a Material Condemnation or the occurrence of a casualty loss. If (a)
the reasonable cost to restore the Property due to the aforementioned damage or
destruction is less than or equal to Five Hundred Thousand Dollars
($500,000.00), (b) the afore-mentioned taking and/or condemnation is not a
Material Condemnation, or (c) neither Seller nor Purchaser elects to terminate
this Agreement pursuant to the provisions of the preceding sentence (time being
of the essence with respect to any such election), then Seller and Purchaser
shall consummate the transaction contemplated by this Agreement without
abatement of the Purchase Price for any amounts other than any deductible
amounts payable by Seller under applicable policies of insurance and Purchaser
shall be entitled during the period following the "Review Period" (as
hereinafter defined) and prior to Closing to approve the terms of any insurance
settlement, such approval not to be unreasonably withheld or delayed, and to
receive at Closing the condemnation or insurance proceeds (or an assignment of
the right to such proceeds) (less any amounts applied against costs incurred or
income lost by Seller as a result of such occurrence) and Seller shall, at
Closing, execute and deliver to Purchaser all customary proofs of loss,
assignments of claims and other similar items. If either Seller or Purchaser
elects to terminate this Agreement pursuant to the provisions of this Section 5
and Purchaser is not in default under this Agreement, Seller shall promptly
notify the Escrowee to return the Earnest Money and, thereafter, the Earnest
Money shall be returned to Purchaser by the Escrowee, in which event this
Agreement shall, without further action of the parties, become null and void and
neither party shall have any further rights or obligations under this Agreement;
provided, however, that the foregoing shall not limit Seller's recourse against
Purchaser under Sections 6 and 11(G) below and under the "Confidentiality
Agreement" (as hereinafter defined).
6. BROKERAGE
---------
Seller has agreed, pursuant to a separate written agreement with Penn
Square Properties, Inc. ("Penn Square"), to pay upon Closing (but not otherwise)
a brokerage commission to Penn Square for services rendered in connection with
the sale and purchase of the Property. Seller shall indemnify and hold
Purchaser harmless from and against any and all claims of Penn Square related to
Seller's agreement to pay Penn Square a commission in connection with the
purchase and sale of the Property, including, without limitation, reasonable
attorneys' fees and expenses incurred by Purchaser in connection with such
claim. Seller and Purchaser shall each indemnify and hold the other harmless
from and against any and all claims of all brokers and finders (other than a
claim by Penn Square against Seller of the type described in the preceding
sentence, which claim Seller shall be obligated to indemnify Purchaser against
in accordance with the preceding sentence) claiming by, through or under the
indemnifying party and in any way related to the sale and purchase of the
Property, this Agreement or otherwise, including, without limitation, reasonable
attorneys' fees and expenses incurred by the indemnified party in connection
with such claim. The provisions of this Section 6 shall survive the Closing or
other termination of this Agreement.
7. DEFAULT AND REMEDIES
--------------------
A. Notwithstanding anything to the contrary contained in this
Agreement, if (i) Seller fails to perform in accordance with the terms of this
Agreement, (ii) Purchaser is not otherwise in default hereunder, and (iii) the
Closing does not occur, then, as Purchaser's sole
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<PAGE>
and exclusive remedy hereunder and at Purchaser's option, either (x) the Earnest
Money shall be returned to Purchaser, in which event this Agreement shall be
null and void, and neither party shall have any rights or obligations under this
Agreement, or (y) upon notice to Seller not less than ten (10) days after
Purchaser becomes aware of such failure, and provided an action is filed within
thirty (30) days thereafter, Purchaser may seek specific performance of this
Agreement, but not damages. Purchaser's failure to seek specific performance as
aforesaid shall constitute its election to proceed under clause (x) above.
B. If Purchaser fails to perform in accordance with the terms of this
Agreement, the Earnest Money may be retained by Seller as liquidated and agreed
upon damages and as Seller's sole and exclusive remedy with respect thereto;
provided, however, that the foregoing shall not limit Seller's recourse against
Purchaser under Section 6 above and Section 11(G) below and under the
Confidentiality Agreement. If Purchaser is required to but does not deposit with
the Escrowee the Additional Earnest Money as provided for in Section 2(A)(i)
above, the sum of $200,000.00 shall nonetheless be recoverable by Seller from
Purchaser as Earnest Money in accordance with the preceding sentence. Purchaser
and Seller acknowledge and agree that (1) the Earnest Money is a reasonable
estimate of and bears a reasonable relationship to the damages that would be
suffered and costs incurred by Seller as a result of having withdrawn the
Property from sale and the failure of Closing to occur due to a default of
Purchaser under this Agreement; (2) the actual damages suffered and costs
incurred by Seller as a result of such withdrawal and failure to close due to a
default of Purchaser under this Agreement would be extremely difficult and
impractical to determine; (3) Purchaser seeks to limit its liability under this
Agreement to the amount of the Earnest Money in the event this Agreement is
terminated and the transaction contemplated by this Agreement does not close due
to a default of Purchaser under this Agreement; and (4) the Earnest Money shall
be and constitute valid liquidated damages.
C. After Closing, Seller and Purchaser shall, subject to the terms and
conditions of this Agreement, have such rights and remedies as are available at
law or in equity, except that neither Seller nor Purchaser shall be entitled to
recover from the other consequential or special damages.
8. CONDITION PRECEDENT - REVIEW PERIOD
A. Subject to Section 11(G) below and the provisions of that certain
letter agreement (the "Confidentiality Agreement") dated October 25, 1995 by and
between Penn Square and Purchaser, Purchaser shall have forty-five (45) days
after the date of this Agreement within which to inspect the Property and review
the items described in Section 8(B) below (the "Review Period"). Purchaser
and/or its employees shall visit the Property and commence Purchaser's "due
diligence" review of the Property within five (5) days after the commencement of
the Review Period, such visit to be confirmed by Seller's on-site property
manager. In the event that such visit does not occur within such five (5) day
period, Seller shall have the option, exercisable by written notice to Purchaser
prior to the end of the Review Period, to terminate this Agreement, and,
provided that Purchaser is not in default under the Confidentiality Agreement
and/or this Agreement (it being acknowledged by Seller that the failure of
Purchaser and/or its employees to visit the Property within five (5) days after
commencement of the Review Period shall not be deemed a default of Purchaser
hereunder), the Earnest Money shall be returned to Purchaser, at which time this
Agreement shall be null and void and neither party shall have any further rights
or obligations under this Agreement,
12
<PAGE>
provided, however, that the foregoing shall not limit Seller's recourse against
Purchaser under Section 6 above and Section 11(G) below and under the
Confidentiality Agreement. If Purchaser determines that the Property is
unsuitable for its purposes and notifies Seller of such decision within the
Review Period (such notice to contain Purchaser's certification that it has
elected not to purchase the Property for a reason or reasons relating to the
Property) and Purchaser is not in default under this Agreement and/or the
Confidentiality Agreement, the Earnest Money shall be returned to Purchaser, at
which time this Agreement shall be null and void and neither party shall have
any further rights or obligations under this Agreement, provided, however, that
the foregoing shall not limit Seller's recourse against Purchaser under Section
6 above and Section 11(G) below and under the Confidentiality Agreement.
Purchaser's failure to object within the Review Period shall be deemed a waiver
by Purchaser of the condition contained in this Section 8(A).
B. Seller shall, within ten (10) days after the date of this
Agreement, make available to Purchaser at the Property the following, to the
extent in Seller's possession:
(i) Copies of each of the Leases;
(ii) Copies of the most recent real estate tax statements with
respect to the Property;
(iii) Copies of the most recent sewer and water bills with
respect to the Property;
(iv) Copies of the Service Contracts;
(v) Copies of bills for fuel used to operate the heating and
air conditioning systems controlled by Seller at the
Property covering the period January 1, 1995 through the
last billing period ending prior to the date of this
Agreement, if any;
(vi) Copies of bills for electricity used to operate the
portion of the Property controlled by Seller covering the
period January 1, 1995 through the last billing period
ending prior to the date of this Agreement, if any;
(vii) Copies of correspondence between tenants and Seller (as
landlord), (except for any of such items that contain
privileged information);
(viii) Copies of 1995 billings to tenants for estimated
Operating Expense Reimbursements;
(ix) A rent roll for the Property dated not earlier than ten
(10) days prior to the date of this Agreement, setting
forth all tenants occupying space at the Property as of
such date, the space occupied by each tenant, the monthly
base rent and additional rent payable pursuant to each
tenant's Lease, and the approximate square footage
demised under the particular Lease;
13
<PAGE>
(x) Copies of drafts of leases that are unsigned and under
negotiation;
(xi) An accounts receivable aging report dated not earlier
than ten (10) days prior to the date of this Agreement;
(xii) Copies of any documentation filed with governmental
authorities in connection with the real estate tax
appeals discussed in Section 4(C)(iv) above;
(xiii) To the extent same are located at the Property, copies of
plans for the buildings located on the Property, if any;
and
(xiv) To the extent same are located at the Property, copies of
any licenses or permits issued to Seller in connection
with the ownership and operation of the Property.
9. ESTOPPEL CERTIFICATES
A. In the event that neither Seller nor Purchaser elect to terminate
this Agreement pursuant to Section 8(A) above, Seller shall, within ten (10)
days after the expiration of the Review Period, send estoppel certificates
(individually, an "Estoppel Certificate" and collectively, the "Estoppel
Certificates") to each tenant occupying space at the Property as of the last day
of the Review Period. The Estoppel Certificates shall be in the form of Exhibit
E attached hereto (the "Form Tenant Estoppel Certificate").
B. It shall be a condition precedent to Purchaser's obligation to
purchase the Property pursuant to this Agreement that Seller provide to
Purchaser, at Closing, Estoppel Certificates executed by tenants occupying not
less than seventy percent (70%) of the net rentable square footage of space
occupied by tenants at the Property as of the date of this Agreement (the
"Required Tenants"). The Estoppel Certificates executed by tenants shall be in
substantially the form of the Form Tenant Estoppel Certificate, except that an
Estoppel Certificate executed by a tenant shall be deemed an acceptable Estoppel
Certificate for purposes of this Section 9 as long as it contains the
information set forth in items 1 through 7 on the Form Tenant Estoppel
Certificate. Furthermore, an Estoppel Certificate shall be deemed an acceptable
Estoppel Certificate for purposes of this Section 9 if it contains the
qualification by the tenant of any statement as being to the best of its
knowledge or as being subject to any similar qualification (the aforesaid
acceptable Estoppel Certificates to be delivered are collectively referred to as
the "Required Estoppel Certificates").
C. In the event that Seller is unable to provide to Purchaser the
Required Estoppel Certificates at Closing, Purchaser may either: (x) elect not
to purchase the Property, in which event this Agreement shall be null and void,
the Escrowee shall promptly return the Earnest Money to Purchaser and thereafter
neither Seller nor Purchaser shall have any further rights or obligations under
this Agreement, provided, however, that the foregoing shall not limit Seller's
recourse against Purchaser under Section 6 above and Section 11(G) below and
under the Confidentiality Agreement; or (y) elect to purchase the Property
notwithstanding Seller's
14
<PAGE>
inability to provide the Required Estoppel Certificates, in which event Seller
shall not be obligated to provide any additional Estoppel Certificates to
Purchaser after Closing.
D. If any Estoppel Certificates contain statements or allegations that
a default or potential default exists on the part of Seller under the Lease in
question and (i) the existence or the substance of such allegations or
statements were contained in the documents and materials referred to in Section
8(B) above or any other "Disclosures" (as defined in Section 11(H) below) prior
to the end of the Review Period, or (ii) prior to the end of the Review Period
Purchaser otherwise obtained actual knowledge of facts revealing the substance
of such statements or allegations, or (iii) Seller otherwise disclosed in
writing the existence or the substance of such allegations or statements prior
to the end of the Review Period, then such Estoppel Certificates shall be deemed
acceptable for purposes of this Section 9, notwithstanding the existence of such
allegations or statements.
10. SELLER'S REPRESENTATIONS AND WARRANTIES
A. Seller represents and warrants to Purchaser the following:
(i) As of the date of this Agreement, to the "Actual Knowledge
of Seller" (as hereinafter defined), except as set forth
on Exhibit I attached hereto, Seller has received no
written notice from any governmental authority of any
material violation of any state or federal law, rule or
regulation concerning the Property or any part thereof
which has not been cured prior to the date of this
Agreement.
(ii) To the Actual Knowledge of Seller, the list attached
hereto as Exhibit D lists all of the maintenance, service,
advertising and other like contracts and agreements with
respect to the ownership and/or operation of the Property
(the "Service Contracts"), the vendor under each Service
Contract and the date of each Service Contract.
(iii) Except for litigation adequately covered by insurance and
except as set forth on Exhibit J attached hereto, as of
the date of this Agreement, Seller has received no written
notice of any pending litigation with respect to the
Property which would affect the Property after Closing.
B. When used in this Agreement, the term "Actual Knowledge of Seller"
shall mean and be limited to the actual (and not constructive) current knowledge
of (i) Alissa Schneider, Assistant Vice President-Asset Management of Equity
Office Holdings, L.L.C., a Delaware limited liability company.
C. The representations and warranties set forth in this Section 10
shall survive the Closing and the delivery of the Deed for a period of four (4)
months from the Closing Date.
15
<PAGE>
D. Seller does not represent and warrant that any particular Service
Contract will be in force or effect as of the Closing or that tenants under
Leases or the parties to the Service Contracts will not be in default under
their respective Leases or Service Contracts, and neither the existence of any
default by any tenant under its Lease nor the default of any party under any
Service Contract shall affect the obligations of Purchaser hereunder; provided,
however, the foregoing shall not affect the conditions contained in Section 9
above.
E. As and to the extent that Seller and Purchaser or its
representatives review copies of the documents and materials referred to in
Section 8(B) above and any other Disclosures prior to the end of the Review
Period and such documents or materials contain information inconsistent with or
different from the representations and warranties set forth in Section 10(A)
above, or prior to the end of the Review Period Purchaser otherwise obtains
actual knowledge of facts or Seller otherwise discloses in writing to Purchaser
facts that are inconsistent with or different from the representations and
warranties made in Section 10(A), then as of the end of the Review Period such
representations and warranties shall be deemed modified to conform them to the
information set forth in such documents and materials or to such other facts.
F. As and to the extent that (i) Purchaser obtains actual knowledge of
facts, or (ii) any Estoppel Certificates or other documents with respect to
Leases and/or matters addressed by Section 10(A) are received by Purchaser or
received by Seller and delivered to Purchaser prior to the Closing, and the
Closing occurs, then the representations and warranties in Section 10(A) shall
be deemed to be modified and/or superseded by such facts, certificates and/or
other documents; provided, however, the foregoing shall not affect the
conditions contained in Section 9 above.
11. MISCELLANEOUS
A. All understandings and agreements heretofore had between Seller and
Purchaser with respect to the Property are merged in this Agreement, which alone
fully and completely expresses the agreement of the parties. Purchaser
acknowledges that it has inspected or will inspect the Property and that it
accepts same in its "as is" condition subject to use, ordinary wear and tear and
natural deterioration. Purchaser further acknowledges that, except as expressly
provided in this Agreement, neither Seller nor any agent or representative of
Seller has made, and Seller is not liable for or bound in any manner by, any
express or implied warranties, guaranties, promises, statements, inducements,
representations or information pertaining to the Property.
B. Neither this Agreement nor any interest hereunder shall be assigned
or transferred by Purchaser without the written consent of Seller, which consent
may be withheld in the sole and absolute discretion of Seller except for an
assignment of the type described in the next sentence. Purchaser shall be
permitted to assign its rights and obligations under this Agreement to an entity
(a "Permitted Assignee") of which Purchaser or an entity affiliated with and
under common control with Purchaser is the sole general partner and, upon such
an assignment such Permitted Assignee shall execute and deliver an agreement to
Seller in which such Permitted Assignee assumes all of the obligations of
Purchaser under this Agreement. Upon an assignment of this Agreement to a
Permitted Assignee: (1) Purchaser shall not be relieved of any subsequently
accruing liability under this Agreement, and (2) as used in this Agreement, the
term "Purchaser" shall be deemed to include such Permitted Assignee. Seller
16
<PAGE>
may assign or otherwise transfer its interest under this Agreement. As used in
this Agreement, the term "Seller" shall be deemed to include any assignee or
other transferee of any Seller. Upon any such transfer by a Seller, such Seller
shall be relieved of any subsequently accruing liability under this Agreement.
Subject to the foregoing, this Agreement shall inure to the benefit of and shall
be binding upon Seller and Purchaser and their respective successors and
assigns.
C. This Agreement shall not be modified or amended except in a
written document signed by Seller and Purchaser.
D. Time is of the essence of this Agreement.
E. This Agreement shall be governed and interpreted in accordance
with the laws of the Commonwealth of Pennsylvania.
F. All notices, requests, demands or other communications required
or permitted under this Agreement shall be in writing and delivered personally,
by certified mail, return receipt requested, postage prepaid, by overnight
courier (such as Federal Express), or by facsimile transmission, addressed as
follows:
1. If to Seller:
c/o Equity Office Holdings, L.L.C.
Two North Riverside Plaza
Suite 2244
Chicago, Illinois 60606
Telephone: (312) 466-3595
Facsimile: (312) 559-5051
Attention: Alissa Schneider
With a copy to:
Rosenberg & Liebentritt, P.C.
Suite 1515
Two North Riverside Plaza
Chicago, Illinois 60606
Telephone: (312) 466-3483
Facsimile: (312) 454-0335
Attention: Steven E. Ehrlich, Esq.
17
<PAGE>
2. If to Purchaser:
BGK Properties, Inc.
330 Garfield Street, Suite 200
Santa Fe, Mexico 87501
Telephone: (505) 982-2184
Facsimile: (505) 982-2515
Attention: Mr. Ed Gilbert
With a copy to:
BGK Properties, Inc.
330 Garfield Street, Suite 200
Santa Fe, New Mexico 87501
Telephone: (505) 982-2184
Facsimile: (505) 982-2515
Attention: Sam Konigsberg, Esq.
All notices given in accordance with the terms hereof shall be deemed received
forty-eight (48) hours after posting, or when delivered personally or otherwise
received. Either party hereto may change the address for receiving notices,
requests, demands or other communication by notice sent in accordance with the
terms of this Section 11(F).
G. Purchaser's right of inspection pursuant to Section 8(A) above
shall be subject to the rights of tenants under the Leases and other occupants
and users of the Property. No inspection shall be undertaken without reasonable
prior notice to Seller. Seller shall have the right to be present at any or all
inspections. Neither Purchaser nor its agents or representatives shall contact
any tenants without the prior consent of Seller. No inspection shall involve
the taking of samples or other physically invasive procedures without the prior
consent of Seller. Notwithstanding anything to the contrary contained in this
Agreement, Purchaser shall indemnify and hold Seller and its employees and
agents, and each of them, harmless from and against any and all losses, claims,
damages and liabilities (including, without limitation, attorneys' fees incurred
in connection therewith) arising out of or resulting from Purchaser's exercise
of its rights under this Agreement, including, without limitation, its right of
inspection as provided for in Section 8(A) above. The provisions of this
Section 11(G) shall survive the Closing or other termination of this Agreement.
H. ACKNOWLEDGING THE PRIOR USE OF THE PROPERTY AND PURCHASER'S
OPPORTUNITY TO INSPECT THE PROPERTY, PURCHASER AGREES TO TAKE THE PROPERTY "AS
IS" WITH ALL FAULTS AND CONDITIONS THEREON. ANY INFORMATION, REPORTS,
STATEMENTS, DOCUMENTS OR RECORDS (COLLECTIVELY, THE "DISCLOSURES") PROVIDED OR
MADE TO PURCHASER OR ITS CONSTITUENTS BY SELLER, ITS AGENTS OR EMPLOYEES
CONCERNING THE CONDITION OF THE PROPERTY SHALL NOT BE REPRESENTATIONS OR
WARRANTIES. PURCHASER SHALL NOT RELY ON SUCH DISCLOSURES, BUT RATHER, PURCHASER
SHALL RELY ONLY ON ITS OWN INSPECTION OF THE PROPERTY. PURCHASER ACKNOWLEDGES
AND AGREES THAT, EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, SELLER HAS NOT
MADE, DOES NOT MAKE AND SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS, WARRANTIES,
PROMISES,
18
<PAGE>
COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER
EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO,
CONCERNING OR WITH RESPECT TO (A) THE NATURE, QUALITY OR CONDITION OF THE
PROPERTY, INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL AND GEOLOGY, (B) THE
INCOME HERETOFORE DERIVED OR TO BE DERIVED FROM THE PROPERTY, (C) THE
SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH PURCHASER
MAY CONDUCT THEREON, (D) THE COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION
WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL
AUTHORITY OR BODY, (E) THE HABITABILITY, MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OF THE PROPERTY, OR (F) ANY OTHER MATTER WITH RESPECT TO THE
PROPERTY, AND SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS REGARDING TERMITES OR
WASTES, AS DEFINED BY THE U.S. ENVIRONMENTAL PROTECTION AGENCY REGULATIONS AT 40
C.F.R., OR ANY HAZARDOUS SUBSTANCE, AS DEFINED BY THE COMPREHENSIVE
ENVIRONMENTAL RESPONSE COMPENSATION AND LIABILITY ACT OF 1980 ("CERCLA"), AS
AMENDED, AND REGULATIONS PROMULGATED THEREUNDER.
PURCHASER, ITS SUCCESSORS AND ASSIGNS, HEREBY WAIVE, RELEASE AND
AGREE NOT TO MAKE ANY CLAIM OR BRING ANY COST RECOVERY ACTION OR CLAIM FOR
CONTRIBUTION OR OTHER ACTION OR CLAIM AGAINST SELLER OR ITS AFFILIATES,
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS, OR ASSIGNS (COLLECTIVELY,
"SELLER AND ITS AFFILIATES") BASED ON (A) ANY FEDERAL, STATE, OR LOCAL
ENVIRONMENTAL OR HEALTH AND SAFETY LAW OR REGULATION, INCLUDING CERCLA OR ANY
STATE EQUIVALENT, OR ANY SIMILAR LAW NOW EXISTING OR HEREAFTER ENACTED, (B) ANY
DISCHARGE, DISPOSAL, RELEASE, OR ESCAPE OF ANY CHEMICAL, OR ANY MATERIAL
WHATSOEVER, ON, AT, TO, OR FROM THE PROPERTY; OR (C) ANY ENVIRONMENTAL
CONDITIONS WHATSOEVER ON, UNDER, OR IN THE VICINITY OF THE PROPERTY.
I. In any lawsuit or other proceeding initiated by Purchaser under
or with respect to this Agreement, Purchaser waives any right it may have to
trial by jury. In addition, Purchaser waives any right to seek rescission of
the transaction provided for in this Agreement.
J. Purchaser acknowledges that all information with respect to the
Property furnished or to be furnished to Purchaser is, has been and will be so
furnished on the condition that Purchaser maintain the confidentiality thereof.
Accordingly, Purchaser shall, and shall cause its directors, officers and other
personnel and representatives to, hold in strict confidence, and not disclose to
any other party without the prior written consent of Seller and unless the
Closing occurs: (i) any of the information with respect to the Property
delivered to Purchaser by Seller or any of its agents, representatives or
employees, or (ii) the existence of this Agreement or any term or condition
thereof, or (iii) the results of any inspections or studies undertaken in
connection herewith. In addition, neither Purchaser nor Purchaser's directors,
officers and other personnel and representatives shall solicit offers to
purchase the Property to any other party without the prior written consent of
Seller and unless the Closing occurs. Notwithstanding the above, Purchaser may
disclose such information to individuals or entities necessary for Purchaser to
consummate the transaction contemplated herein (such as lenders, engineers,
prospective management companies, environmental consultants, accountants and tax
advisors) and as required by law. Purchaser shall require that any parties to
whom the existence of this Agreement or any information with respect to the
Property is disclosed execute a confidentiality agreement wherein the party
agrees not to disclose the existence of this Agreement or information with
respect to the
19
<PAGE>
Property to anyone. In the event the Closing does not occur and this Agreement
is terminated, Purchaser shall, upon written request by Seller, promptly return
to Seller all copies of all such information without retaining any copy thereof
or extract therefrom.
K. If for any reason Purchaser does not consummate the Closing, then
Purchaser shall, upon Seller's request, assign and transfer to Seller all of its
right, title and interest in and to any and all studies, reports, surveys and
other information, data and/or documents relating to the Property or any part
thereof prepared by or at the request of Purchaser, its employees and agents,
and shall deliver to Seller copies of all of the foregoing.
L. Seller hereby covenants and agrees with Purchaser that:
1. From and after the date hereof through the Closing, Seller
shall deliver for Purchaser's review (a "New Lease Notice") a copy of
any proposed new Lease, or any modification, amendment, restatement or
renewal of any existing Lease (individually, a "New Lease" and
collectively, "New Leases"). During the period between the Review
Period and Closing, Purchaser shall have the right to approve or
disapprove of any New Lease by responding in writing to Seller's New
Lease Notice within five (5) days after Purchaser's receipt of the New
Lease Notice. If Purchaser fails to approve or disapprove of such New
Lease within such five (5) day period, Purchaser shall be deemed to
have conclusively approved of such New Lease.
2. All tenant improvement costs and/or allowances and leasing
commissions relating to (a) New Leases entered into by Seller during
the period between the date of this Agreement and the expiration of
the Review Period, and (b) New Leases entered into by Seller after the
Review Period which Purchaser approves (or is deemed to approve) in
accordance with Section 11(L)(1) above, shall be prorated in
accordance with Section 4(c)(i)(d) above.
M. Purchaser shall be obligated to assume pursuant to the Service
Contract Assignment any Service Contract that would require Seller to pay a fee,
penalty or damages if terminated at or prior to Closing (collectively, the
"Required Service Contracts"). In the event that there are Service Contracts
that are not Required Service Contracts (individually, a "Terminable Service
Contract", and collectively, the "Terminable Service Contracts"), Purchaser
shall notify Seller in writing on or before the expiration of the Review Period
as to which Terminable Service Contracts Purchaser shall assume at Closing
pursuant to the Service Contract Assignment and, in the event that Purchaser
does not notify Seller as aforesaid prior to the expiration of the Review
Period, Purchaser shall be obligated to assume all Terminable Service Contracts
at Closing.
N. Seller and Purchaser hereby designate Escrowee to act as and
perform the duties and obligations of the "reporting person" with respect to the
transaction contemplated by this Agreement for purposes of 26 C.F.R. Section
1.6045-4(e)(5) relating to the requirements for information reporting on real
estate transaction closed on or after January 1, 1991. In this regard, Seller
and Purchaser each agree to execute at Closing, and to cause the Escrowee to
execute at Closing, a Designation Agreement, designating Escrowee as the
reporting person with respect to the transaction contemplated by this Agreement.
20
<PAGE>
O. This Agreement may be executed in two or more counterparts, each
of which shall be deemed to be an original and all of which taken together shall
constitute one and the same instrument.
P. Seller and Purchaser acknowledge and agree that neither this
Agreement nor a memorandum thereof shall be recorded against the Property.
Q. Purchaser acknowledges and agrees that any recovery against
Seller that Purchaser may be entitled to as a result of any claim, demand or
cause of action that Purchaser may have against Seller with respect to this
Agreement and the transactions contemplated herein shall only be recoverable
against Seller to the extent of Seller's interest in the Property and the amount
of the proceeds received by Seller from the sale of the Property to Purchaser.
R. Seller is a party to that certain Easement Agreement (the "Sewer
Easement Agreement") dated December 19, 1995 by and between Wolf Property, Inc.,
a Pennsylvania corporation ("Wolf"), and Seller, a copy of which is attached
hereto as Exhibit K. As more particularly described in the Sewer Easement
Agreement, Seller has, among other things, agreed to (i) grant certain easements
in favor of land owned by Wolf that is adjacent to the Real Property for
emergency access and the placement of sanitary sewer lines, and (ii) execute a
deed of dedication in favor of Whitpain Township. Prior to the date of this
Agreement, Seller authorized Wolf to record the Sewer Easement Agreement with
the Office of the Montgomery County, Pennsylvania Recorder (the "Recorder"); as
of the date of this Agreement, Wolf has not yet provided Seller with a copy of
the recorded Sewer Easement Agreement. If the recording information for the
Sewer Easement Agreement is not provided in the Title Commitment and Seller
receives such recording information from Wolf after the date of this Agreement
and prior to Closing, Seller shall provide such recording information to
Purchaser after Seller's receipt of same.
In connection with the Sewer Easement Agreement, Rosenberg &
Liebentritt, P.C. ("R&L"), in its capacity as counsel for Seller, Lesser &
Kaplin, in its capacity as counsel for Wolf, and Security Abstract of PA, Inc.
("Security"), as escrowee, have entered into a letter agreement (the "Sewer
Escrow Agreement") with respect to, among other matters, the deposit, delivery
and recordation of the deeds of dedication described in the Sewer Easement
Agreement. A copy of the Sewer Escrow Agreement is attached hereto as Exhibit
L. As of the date of this Agreement, Security is holding in escrow (the "Sewer
Escrow"), pursuant to the Sewer Escrow Agreement, the deed of dedication in
favor of Whitpain Township that is referenced in Exhibit G to the Sewer Easement
Agreement, executed on behalf of Seller (the "Seller Deed of Dedication"). In
the event that the Seller Deed of Dedication is not recorded with the Recorder
prior to the Closing, Purchaser shall execute a deed of dedication (the
"Substitute Deed of Dedication") at Closing in favor of Whitpain Township
identical to the Seller Deed of Dedication (except that the Substitute Deed of
Dedication shall name Purchaser as "grantor" thereunder rather than Seller). At
Closing, Purchaser shall assume all of Seller's obligations under the Sewer
Easement Agreement and the Sewer Escrow Agreement including, without limitation,
the obligation to execute and deliver the deed of dedication referenced in
Exhibit G to the Sewer Easement Agreement, if required by Wolf and/or Whitpain
Township, by executing the Assignment and Assumption of Title Documents in
accordance with Section 4(B)(ii)(f) above. In addition, at Closing, Purchaser,
Seller and R&L shall execute a letter (the "Escrow Assumption Letter") addressed
to Security and Wolf, confirming that Purchaser has
21
<PAGE>
assumed all of Seller's obligations under the Sewer Escrow Agreement and the
Sewer Easement Agreement. In the event that the Seller Deed of Dedication has
not been recorded with the Recorder by the Closing Date, the Escrow Assumption
Letter shall deposit the Substitute Deed of Dedication into the Sewer Escrow in
substitution for the Seller Deed of Dedication.
S. In the event of a conflict between the terms and provisions of
the Confidentiality Agreement and this Agreement, the terms and provisions of
this Agreement shall control.
T. Except as specifically provided for herein, the representations,
warranties, covenants and agreements of Seller set forth in this Agreement shall
not survive the Closing.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
22
<PAGE>
IN WITNESS WHEREOF, Seller and Purchaser have executed and delivered this
Agreement as of the date first above written.
SELLER:
SENTRY WEST JOINT VENTURE, an Illinois joint venture
partnership
By: Blue Bell Associates, an Illinois joint venture, as
managing general partner
By: First Capital Income Properties, Ltd. - Series XI,
an Illinois limited partnership, a general partner
of Blue Bell Associates
By: First Capital Financial Corporation, a
Florida corporation, as the general partner
of First Capital Income Properties, Ltd. -
Series XI
By: /s/ Norman Field
-----------------------------------------
Name: Norman Field
---------------------------------------
Its: Vice President
----------------------------------------
By: First Capital Income and Growth Fund - Series XII,
an Illinois limited partnership, a general partner
of Blue Bell Associates
By: First Capital Financial Corporation, a
Florida corporation, as the general partner
of First Capital Income and Growth Fund -
Series XII
By: /s/ Norman Field
-----------------------------------------
Name: Norman Field
---------------------------------------
Its: Vice President
----------------------------------------
PURCHASER:
BGK PROPERTIES, INC., a Delaware corporation
By: /s/ Edward M. Gilbert
---------------------------------------------------------
Name: Edward M. Gilbert
-------------------------------------------------------
Its: President
--------------------------------------------------------
23
<PAGE>
Exhibit 2.2
SENTRY PARK WEST OFFICE CAMPUS
BLUE BELL, PENNSYLVANIA
FIRST AMENDMENT TO REAL ESTATE SALE AGREEMENT
---------------------------------------------
THIS FIRST AMENDMENT TO REAL ESTATE SALE AGREEMENT (the "First Amendment")
is made as of the 9th day of May, 1996 by and between SENTRY WEST JOINT
VENTURE, an Illinois joint venture partnership ("Seller"), with an office at Two
North Riverside Plaza, Suite 600, Chicago, Illinois 60606, and BGK PROPERTIES,
INC., a Delaware corporation ("Purchaser"), with an office at 330 Garfield
Street, Santa Fe, New Mexico 87501.
RECITALS
--------
A. Seller and Purchaser are parties to that certain Real Estate Sale Agreement
dated as of March 25, 1996 (the "Original Agreement") for the purchase and sale
of the certain real estate and improvements located thereon in the City of Blue
Bell, County of Montgomery, Commonwealth of Pennsylvania, as such real property
is more particularly described in Exhibit A attached to the Original Agreement.
B. Seller and Purchaser desire to modify the Original Agreement as herein set
forth.
THEREFORE, in consideration of the above recitals, the mutual covenants and
agreements herein set forth and the benefits to be derived therefrom and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Purchaser and Seller agree as follows:
1. DEFINED TERMS. Each capitalized term used but not defined herein shall have
the meaning ascribed to it in the Original Agreement.
2. EARNEST MONEY. Section 2(A)(i) of the Original Agreement is hereby deleted
and following hereby substituted:
"(i) Upon execution of this Agreement by Purchaser and Seller, Purchaser
shall deliver to Partners Title Company of Houston, Texas ("Escrowee")
initial earnest money (the "Initial Earnest Money") in the sum of One
Hundred Thousand Dollars ($100,000.00) and Purchaser, Seller and
Escrowee shall execute a joint order escrow agreement in the form of
Exhibit F attached hereto. If Purchaser does not terminate this
Agreement pursuant to and in accordance with Sections 8(A), 8(C) and
8(D) below, Purchaser shall, on or before 4 p.m. (Chicago, Illinois
time) on May 31, 1996, deposit with the Escrowee additional earnest
money (the "Additional Earnest Money") in the sum of Two Hundred Fifty
Thousand Dollars ($250,000.00). If Purchaser elects to extend the
Closing pursuant to and in accordance with clause (i) of the first
sentence of Section 4(A) below, Purchaser shall, on or before 4 p.m.
(Chicago, Illinois time) on June 21, 1996, deposit with the Escrowee
additional earnest money (the "First Extension Earnest Money") in the
sum of One Hundred Thousand Dollars ($100,000.00). If Purchaser elects
to further extend the Closing pursuant to and in accordance with
clause (ii) of the first sentence of Section 4(A) below, Purchaser
shall, on or before 4 p.m.
1
<PAGE>
(Chicago, Illinois time) on July 22, 1996, deposit with the Escrowee
additional earnest money (the "Second Extension Earnest Money") in the
sum of One Hundred Thousand Dollars ($100,000.00). The Initial Earnest
Money and, if deposited or required to be deposited with the Escrowee,
the Additional Earnest Money, the First Extension Earnest Money and
the Second Extension Earnest Money, together with any interest earned
thereon net of investment costs, are referred to in this Agreement as
the "Earnest Money". The Earnest Money shall be invested as Seller and
Purchaser so direct. Any and all interest earned on the Earnest Money
shall be reported to Purchaser's federal tax identification number."
3. CLOSING DATE. Section 4(A) of the Original Agreement is hereby deleted and
following hereby substituted:
"A. Closing Date. The "Closing" of the transaction contemplated by
this Agreement (that is, the payment of the Purchase Price, the transfer of
title to the Property, and the satisfaction of all other terms and conditions of
this Agreement) shall occur at 10 a.m. (Chicago, Illinois time) on June 28, 1996
at the Chicago, Illinois office of counsel for Seller, Rosenberg & Liebentritt,
P.C., or at such other time and place as Seller and Purchaser shall agree in
writing; provided, however, that: (i) Purchaser may, at its option exercisable
by delivery of written notice to Seller and delivery of the First Extension
Earnest Money to Escrowee on or before 4 p.m. (Chicago, Illinois time) on June
21, 1996, defer Closing to July 29, 1996, and (ii) in the event that Purchaser
has previously deferred the Closing as provided in clause (i) of this sentence,
Purchaser may, at its option exercisable by delivery of written notice to Seller
and delivery of the Second Extension Earnest Money to Escrowee on or before 4
p.m. (Chicago, Illinois time) on July 22, 1996, defer Closing to August 28,
1996. The "Closing Date" shall be the date of Closing. If the date for Closing
above provided for falls on a Saturday, Sunday or legal holiday, then the
Closing Date shall be the next business day."
4. REVIEW PERIODS.
A. MODIFICATION OF SECTION 8(A). The first sentence of Section 8(A) of
the Original Agreement is hereby deleted and the following hereby substituted:
"Subject to Section 11(G) below and the provisions of that certain letter
agreement (the "Confidentiality Agreement") dated October 25, 1995 by and
between Penn Square and Purchaser, Purchaser shall have a period commencing
as of the date of this Agreement and terminating at 4 p.m. (Chicago,
Illinois time) on May 9, 1996 (the "Review Period") within which to inspect
the Property and review the items described in Section 8(B) below."
B. ADDITIONAL TIME FOR ENVIRONMENTAL REVIEW, ENGINEERING REVIEW AND
OBTAINING FINANCING. The following sub-sections shall be added to the Original
Agreement after Section 8(B) of the Original Agreement:
"C. Subject to Section 11(G) below and the provisions of the
Confidentiality Agreement, during the period between the date of this Agreement
and 4 p.m. (Chicago, Illinois time) on May 24, 1996 (the "Engineering Period"),
Purchaser shall be permitted to obtain reports (individually, a "Report" and
collectively, the "Reports") from its consultants as to
2
<PAGE>
environmental and engineering-type (i.e., structural integrity of the
improvements or the condition of the mechanical systems at the Property) matters
with respect to the Property. In the event that Purchaser, as a result of the
Reports, determines that the Property is unsuitable for its purposes and
notifies Seller of such decision within the Engineering Period (such notice: (i)
shall contain Purchaser's certification that it has elected not to purchase the
Property for a reason or reasons relating to environmental and/or engineering-
type matters with respect to the Property, (ii) shall specify in reasonable
detail such reason or reasons, and (iii) shall include a copy of the Report(s)
setting forth the matters that have caused Purchaser to terminate this Agreement
in accordance with this Section 8(C)) and Purchaser is not in default under this
Agreement and/or the Confidentiality Agreement, the Earnest Money shall be
returned to Purchaser, at which time this Agreement shall be null and void and
neither party shall have any further rights or obligations under this Agreement,
provided, however, that the foregoing shall not limit Seller's recourse against
Purchaser under Section 6 above and Section 11(G) below and under the
Confidentiality Agreement. In no event shall Purchaser be permitted to terminate
this Agreement in accordance with this Section 8(C) as to matters with respect
to the Property that are disclosed in that certain Phase I Environmental Site
Assessment Report dated November 8, 1994 prepared by Fugro East Inc., Purchaser
hereby acknowledging its receipt of such report and the matters contained
therein. Purchaser's failure to object within the Engineering Period shall be
deemed a waiver by Purchaser of the condition contained in this Section 8(C).
D. Subject to Section 11(G) below and the provisions of the
Confidentiality Agreement, during the period between the date of this Agreement
and 4 p.m. (Chicago, Illinois time) on May 31, 1996 (the "Financing Period"),
Purchaser shall be obligated to apply for and diligently pursue the issuance of
a firm commitment (the "Financing Commitment") for a loan to be secured by a
first mortgage on the Property in a principal amount not to exceed Nine Million
Dollars ($9,000,000.00), or such lesser sum as Purchaser may accept, with an
adjustable interest rate calculated at a per annum interest rate not to exceed
two hundred (200) basis points above the interest rate for 10-year United States
Treasury Notes, such loan to be amortized over twenty-five (25) years and to
contain such other terms as is customary for such a loan. If after making every
reasonable effort, Purchaser is unable to procure a Financing Commitment within
the Financing Period and notifies Seller of such inability within the Financing
Period (such notice: (i) shall contain Purchaser's certification that it has
been unable to obtain such Financing Commitment, and (ii) shall include a copy
of the written rejection(s) from the lender(s) to whom Purchaser applied for
such Financing Commitment confirming that Purchaser was rejected for a loan
under the terms set forth in this Section 8(D)) and Purchaser is not in default
under this Agreement and/or the Confidentiality Agreement, the Earnest Money
shall be returned to Purchaser, at which time this Agreement shall be null and
void and neither party shall have any further rights or obligations under this
Agreement, provided, however, that the foregoing shall not limit Seller's
recourse against Purchaser under Section 6 above and Section 11(G) below and
under the Confidentiality Agreement. Purchaser's failure to deliver such
written notice to Seller within the Financing Period shall be deemed a waiver by
Purchaser of the condition contained in this Section 8(D)."
5. APPROVAL OF NEW LEASES. Attached hereto as Exhibit A is a list of "New
Leases" (as defined in the Original Agreement) (such New Leases being referred
to herein individually as an "Approved Lease", and collectively as "Approved
Leases"). Pursuant to Section 11(L) of the Original Agreement, Purchaser hereby
approves all of such Approved Leases.
3
<PAGE>
6. DEFAULT. The second sentence of Section 7(B) of the Original Agreement is
hereby deleted and the following is hereby substituted:
"If Purchaser is required to but does not deposit with the Escrowee the
Additional Earnest Money, the First Extension Earnest Money and/or the Second
Extension Earnest Money as provided for in Section 2(A)(i) above, the sum of
$550,000.00 shall nonetheless be recoverable by Seller from Purchaser as Earnest
Money in accordance with the preceding sentence."
7. ESTOPPEL CERTIFICATES. The first sentence of Section 9(A) is hereby deleted
and the following is hereby substituted:
"In the event that neither Seller nor Purchaser elects to terminate this
Agreement pursuant to Sections 8(A), 8(C) or 8(D) above, Seller shall,
within ten (10) days after the expiration of the Financing Period, send
estoppel certificates (individually, an "Estoppel Certificate" and
collectively, the "Estoppel Certificates") to each tenant occupying space
at the Property as of the last day of the Financing Period."
8. RATIFICATION. It is expressly understood and agreed that the Original
Agreement, as hereby amended, shall continue in full force and effect in
accordance with its terms and all references in the Original Agreement to the
term "Agreement" shall mean the Original Agreement as modified by this First
Amendment.
9. SECTION HEADINGS. The section headings used herein are for reference
purposes only and do not control or affect the meaning or interpretation of any
term or provision hereof.
10. GOVERNING LAW. This First Amendment shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
11. AMENDMENT TO JOINT ORDER ESCROW AGREEMENT. Upon execution of this First
Amendment by Seller and Purchaser, Seller and Purchaser shall execute the First
Amendment to Joint Order Escrow Agreement attached hereto as Exhibit B (the
"First Escrow Amendment") and shall jointly deliver said First Escrow Amendment
to Escrowee for execution by Escrowee.
12. COUNTERPARTS. This First Amendment may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
taken together shall constitute one and the same instrument.
13. CONFLICT. In the event of a conflict between the terms and provisions of
the Original Agreement and this First Amendment, the terms and provisions of
this First Amendment shall control.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
4
<PAGE>
IN WITNESS WHEREOF, Seller and Purchaser have executed and delivered this
First Amendment as of the date first above written.
SELLER:
SENTRY WEST JOINT VENTURE, an Illinois joint venture
partnership
By: Blue Bell Associates, an Illinois joint venture, as
managing general partner
By: First Capital Income Properties, Ltd. - Series XI,
an Illinois limited partnership, a general partner
of Blue Bell Associates
By: First Capital Financial Corporation, a
Florida corporation, as the general partner
of First Capital Income Properties, Ltd. -
Series XI
By: /s/ Norman Field
----------------------------------------
Name: Norman Field
--------------------------------------
Its: Vice President
---------------------------------------
By: First Capital Income and Growth Fund - Series XII,
an Illinois limited partnership, a general partner
of Blue Bell Associates
By: First Capital Financial Corporation, a
Florida corporation, as the general partner
of First Capital Income and Growth Fund -
Series XII
By: /s/ Norman Field
---------------------------------------------
Name: Norman Field
-------------------------------------------
Its: Vice President
--------------------------------------------
PURCHASER:
BGK PROPERTIES, INC., a Delaware corporation
By: /s/ Edward M. Gilbert
-------------------------------------------------------
Name: Edward M. Gilbert
-----------------------------------------------------
Its: President
------------------------------------------------------
5
<PAGE>
Exhibit 2.3
SENTRY PARK WEST OFFICE CAMPUS
BLUE BELL, PENNSYLVANIA
SECOND AMENDMENT TO REAL ESTATE SALE AGREEMENT
----------------------------------------------
THIS SECOND AMENDMENT TO REAL ESTATE SALE AGREEMENT (the "Second
Amendment") is made as of the 24th day of May, 1996 by and between SENTRY WEST
JOINT VENTURE, an Illinois joint venture partnership ("Seller"), with an office
at Two North Riverside Plaza, Suite 600, Chicago, Illinois 60606, and BGK
PROPERTIES, INC., a Delaware corporation ("Purchaser"), with an office at 330
Garfield Street, Santa Fe, New Mexico 87501.
RECITALS
--------
A. Seller and Purchaser are parties to that certain Real Estate Sale Agreement
dated as of March 25, 1996, as amended by that certain First Amendment to Real
Estate Sale Agreement (the "First Amendment") dated as of May 9, 1996 (as
amended, the "Original Agreement") for the purchase and sale of the certain real
estate and improvements located thereon in the City of Blue Bell, County of
Montgomery, Commonwealth of Pennsylvania, as such real property is more
particularly described in Exhibit A attached to the Original Agreement.
B. Seller and Purchaser desire to modify the Original Agreement as herein set
forth.
THEREFORE, in consideration of the above recitals, the mutual
covenants and agreements herein set forth and the benefits to be derived
therefrom and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Purchaser and Seller agree as follows:
1. DEFINED TERMS. Each capitalized term used but not defined herein shall
have the meaning ascribed to it in the Original Agreement.
2. ENGINEERING PERIOD.
------------------
A. MODIFICATION OF SECTION 8(C). Section 8(C) of the Original
Agreement is hereby deleted and the following hereby substituted:
"C. Subject to Section 11(G) below and the provisions of the
Confidentiality Agreement, during the period between the date of this Agreement
and 4 p.m. (Chicago, Illinois time) on May 31, 1996 (the "Engineering Period"),
Purchaser shall be permitted to obtain reports (individually, a "Report" and
collectively, the "Reports") from its consultants as to environmental and
engineering-type (i.e., structural integrity of the improvements or the
condition of the mechanical systems at the Property) matters with respect to the
Property. In the event that Purchaser, as a result of the Reports, determines
that the Property is unsuitable for its purposes and notifies Seller of such
decision within the Engineering Period (such notice: (i) shall contain
Purchaser's certification that it has elected not to purchase the Property for a
reason or reasons relating to environmental and/or engineering-type matters with
respect to the Property, (ii) shall specify in reasonable detail such reason or
reasons, and (iii) shall include a copy of the Report(s) setting forth the
matters that have caused Purchaser to terminate this Agreement in accordance
with this Section 8(C)) and Purchaser is not in default under this
<PAGE>
Agreement and/or the Confidentiality Agreement, the Earnest Money shall be
returned to Purchaser, at which time this Agreement shall be null and void and
neither party shall have any further rights or obligations under this Agreement,
provided, however, that the foregoing shall not limit Seller's recourse against
Purchaser under Section 6 above and Section 11(G) below and under the
Confidentiality Agreement. In no event shall Purchaser be permitted to terminate
this Agreement in accordance with this Section 8(C) as to matters with respect
to the Property that are disclosed in that certain Phase I Environmental Site
Assessment Report dated November 8, 1994 prepared by Fugro East Inc., Purchaser
hereby acknowledging its receipt of such report and the matters contained
therein. Purchaser's failure to object within the Engineering Period shall be
deemed a waiver by Purchaser of the condition contained in this Section 8(C).
3. RATIFICATION. It is expressly understood and agreed that the Original
Agreement, as hereby amended, shall continue in full force and effect in
accordance with its terms and all references in the Original Agreement to the
term "Agreement" shall mean the Original Agreement as modified by the First
Amendment and this Second Amendment.
4. SECTION HEADINGS. The section headings used herein are for reference
purposes only and do not control or affect the meaning or interpretation of any
term or provision hereof.
5. GOVERNING LAW. This Second Amendment shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
6. COUNTERPARTS. This Seond Amendment may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
taken together shall constitute one and the same instrument.
7. CONFLICT. In the event of a conflict between the terms and provisions of
the Original Agreement, as amended by the First Amendment, and this Second
Amendment, the terms and provisions of this Second Amendment shall control.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
---------------------------------------------------
2
<PAGE>
IN WITNESS WHEREOF, Seller and Purchaser have executed and delivered
this Second Amendment as of the date first above written.
SELLER:
SENTRY WEST JOINT VENTURE, an Illinois joint venture
partnership
By: Blue Bell Associates, an Illinois joint venture, as
managing general partner
By: First Capital Income Properties, Ltd. - Series XI,
an Illinois limited partnership, a general partner
of Blue Bell Associates
By: First Capital Financial Corporation, a
Florida corporation, as the general partner
of First Capital Income Properties, Ltd. -
Series XI
By: /s/ Gus J. Athas
Name: Gus J. Athas
Its: Senior Vice-President
By: First Capital Income and Growth Fund - Series XII,
an Illinois limited partnership, a general partner
of Blue Bell Associates
By: First Capital Financial Corporation, a
Florida corporation, as the general partner
of First Capital Income and Growth Fund -
Series XII
By: /s/ Gus J. Athas
Name: Gus J. Athas
Its: Senior Vice-President
PURCHASER:
BGK PROPERTIES, INC., a Delaware corporation
By: /s/ Edward M. Gilbert
---------------------------------------------------------
Name: Edward M. Gilbert
-------------------------------------------------------
Its: President
--------------------------------------------------------
3
<PAGE>
Exhibit 2.4
SENTRY PARK WEST OFFICE CAMPUS
BLUE BELL, PENNSYLVANIA
THIRD AMENDMENT TO REAL ESTATE SALE AGREEMENT
---------------------------------------------
THIS THIRD AMENDMENT TO REAL ESTATE SALE AGREEMENT (the "Third Amendment")
is made as of the 30th day of May, 1996 by and between SENTRY WEST JOINT
VENTURE, an Illinois joint venture partnership ("Seller"), with an office at Two
North Riverside Plaza, Suite 600, Chicago, Illinois 60606, and BGK PROPERTIES,
INC., a Delaware corporation ("Purchaser"), with an office at 330 Garfield
Street, Santa Fe, New Mexico 87501.
RECITALS
--------
A. Seller and Purchaser are parties to that certain Real Estate Sale Agreement
(the "Initial Contract") dated as of March 25, 1996, as amended by that certain
First Amendment to Real Estate Sale Agreement (the "First Amendment") dated as
of May 9, 1996 and that certain Second Amendment to Real Estate Sale Agreement
(the "Second Amendment") dated as of May 24, 1996 (the Initial Contract, the
First Amendment and the Second Amendment are collectively referred to as the
"Original Agreement") for the purchase and sale of the certain real estate and
improvements located thereon in the City of Blue Bell, County of Montgomery,
Commonwealth of Pennsylvania, as such real property is more particularly
described in Exhibit A attached to the Initial Contract.
B. Seller and Purchaser desire to modify the Original Agreement as herein set
forth.
THEREFORE, in consideration of the above recitals, the mutual covenants and
agreements herein set forth and the benefits to be derived therefrom and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Purchaser and Seller agree as follows:
1. DEFINED TERMS. Each capitalized term used but not defined herein shall
have the meaning ascribed to it in the Original Agreement.
2. WAIVER OF ENGINEERING AND ENVIRONMENTAL PERIODS. Effective as of the date
of this Third Amendment, Purchaser hereby waives the conditions precedent to
Closing set forth in Sections 8(C) and 8(D) of the Original Agreement.
3. CREDIT AGAINST THE PURCHASE PRICE. As a result of Purchaser's review of
the Property and other matters pursuant to and in accordance with the provisions
of Section 8 of the Original Agreement, Purchaser has requested that Seller
provide, and Seller hereby agrees to provide, a credit at Closing against the
Purchase Price in the amount of Three Hundred Thousand Dollars ($300,000.00)
(the "Due Diligence Credit"). Purchaser hereby acknowledges and agrees that the
Due Diligence Credit constitutes full, sufficient, complete and adequate
consideration for Purchaser's agreement to purchase the Property in its "as is"
condition, as more particularly provided in the Original Agreement.
<PAGE>
4. BROKERAGE. Section 6 of the Original Agreement is hereby deleted and the
following is hereby substituted:
"Seller has agreed, pursuant to a separate written agreement with Penn
Square Properties, Inc. ("Penn Square"), to pay upon Closing (but not
otherwise) a brokerage commission to Penn Square for services rendered in
connection with the sale and purchase of the Property. Seller shall
indemnify and hold Purchaser harmless from and against any and all claims
of Penn Square related to Seller's agreement to pay Penn Square a
commission in connection with the purchase and sale of the Property,
including, without limitation, reasonable attorneys' fees and expenses
incurred by Purchaser in connection with such claim. Seller hereby agrees
to pay upon Closing (but not otherwise) a brokerage commission in the
amount of Fifty Thousand Dollars ($50,000.00) (the "BGK Commission") to
Purchaser's affiliate, BGK Realty, Inc., a Delaware corporation ("BGK
Realty") in connection with the sale and purchase of the Property. In the
event that Seller receives a written notice executed by both BGK Realty and
Purchaser prior to or at Closing requesting that Seller pay the BGK
Commission to another affiliate of Purchaser ("Purchaser's Affiliated
Broker"), Seller shall pay upon Closing (but not otherwise) the BGK
Commission to Purchaser's Affiliated Broker. Purchaser shall indemnify and
hold Seller harmless from and against any and all claims of BGK Realty
and/or Purchaser's Affiliated Broker: (i) for a commission in excess of the
amount of the BGK Commission, (ii) for payment of the BGK Commission in the
event that the BGK Commission is paid at Closing by Seller to BGK Realty or
Purchaser's Affiliated Broker, and (iii) for a commission in the event that
the Closing does not occur, including reasonable attorneys' fees and
expenses incurred by Seller in connection with such claims. Purchaser's
indemnification obligation set forth in the preceding sentence shall
include indemnification from and against any and all claims of all brokers,
finders or other entities or individuals claiming by, through or under BGK
Realty or Purchaser's Affiliated Broker, and reasonable attorneys' fees and
expenses incurred by Seller in connection with any such claims. Seller and
Purchaser shall each indemnify and hold the other harmless from and against
any and all claims of all brokers and finders (other than: (1) a claim by
Penn Square against Seller of the type described above, which claim Seller
shall be obligated to indemnify Purchaser against as provided above, and
(2) claims by BGK Realty, Purchaser's Affiliated Broker or any and all
other brokers, finders or other entities or individuals of the type
described above, which claims Purchaser shall be obligated to indemnify
Seller against as provided above) claiming by, through or under the
indemnifying party and in any way related to the sale and purchase of the
Property, this Agreement or otherwise, including, without limitation,
reasonable attorneys' fees and expenses incurred by the indemnified party
in connection with such claims. The provisions of this Section 6 shall
survive the Closing or other termination of this Agreement."
5. RATIFICATION. It is expressly understood and agreed that the Original
Agreement, as hereby amended, shall continue in full force and effect in
accordance with its terms and all references in the Original Agreement to the
term "Agreement" shall mean the Original Agreement as modified by this Third
Amendment.
6. SECTION HEADINGS. The section headings used herein are for reference
purposes only and do not control or affect the meaning or interpretation of any
term or provision hereof.
2
<PAGE>
7. GOVERNING LAW. This Third Amendment shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
8. COUNTERPARTS. This Third Amendment may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
taken together shall constitute one and the same instrument.
9. CONFLICT. In the event of a conflict between the terms and provisions of
the Original Agreement and the terms and provisions of this Third Amendment, the
terms and provisions of this Third Amendment shall control.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
---------------------------------------------------
3
<PAGE>
IN WITNESS WHEREOF, Seller and Purchaser have executed and delivered this
Third Amendment as of the date first above written.
SELLER:
SENTRY WEST JOINT VENTURE, an Illinois joint venture
partnership
By: Blue Bell Associates, an Illinois joint venture, as
managing general partner
By: First Capital Income Properties, Ltd. - Series XI,
an Illinois limited partnership, a general partner
of Blue Bell Associates
By: First Capital Financial Corporation, a
Florida corporation, as the general partner
of First Capital Income Properties, Ltd. -
Series XI
By: /s/ Douglas Crocker II
---------------------------------------
Name: Douglas Crocker II
---------------------------------------
Its: President
---------------------------------------
By: First Capital Income and Growth Fund - Series XII,
an Illinois limited partnership, a general partner
of Blue Bell Associates
By: First Capital Financial Corporation, a
Florida corporation, as the general partner
of First Capital Income and Growth Fund -
Series XII
By: /s/ Douglas Crocker II
---------------------------------------
Name: Douglas Crocker II
---------------------------------------
Its: President
---------------------------------------
PURCHASER:
BGK PROPERTIES, INC., a Delaware corporation
By: /s/ Edward M. Gilbert
--------------------------------------------------------
Name: Edward M. Gilbert
------------------------------------------------------
Its: President
-------------------------------------------------------
4
<PAGE>
Exhibit 2.5
SENTRY PARK WEST OFFICE CAMPUS
BLUE BELL, PENNSYLVANIA
FOURTH AMENDMENT TO REAL ESTATE SALE AGREEMENT
----------------------------------------------
THIS FOURTH AMENDMENT TO REAL ESTATE SALE AGREEMENT (the "Fourth
Amendment") is made as of the 2nd day of July, 1996 by and between SENTRY WEST
JOINT VENTURE, an Illinois joint venture partnership ("Seller"), with an office
at Two North Riverside Plaza, Suite 600, Chicago, Illinois 60606, and BGK
PROPERTIES, INC., a Delaware corporation ("Purchaser"), with an office at 330
Garfield Street, Santa Fe, New Mexico 87501.
RECITALS
A. Seller and Purchaser are parties to that certain Real Estate Sale Agreement
(the "Initial Contract") dated as of March 25, 1996, as amended by that certain
First Amendment to Real Estate Sale Agreement (the "First Amendment") dated as
of May 9, 1996, that certain Second Amendment to Real Estate Sale Agreement (the
"Second Amendment") dated as of May 24, 1996 and that certain Third Amendment to
Real Estate Sale Agreement (the "Third Amendment") dated as of May 30, 1996 (the
Initial Contract, the First Amendment, the Second Amendment and the Third
Amendment are collectively referred to as the "Original Agreement") for the
purchase and sale of the certain real estate and improvements located thereon in
the City of Blue Bell, County of Montgomery, Commonwealth of Pennsylvania, as
such real property is more particularly described in Exhibit A attached to the
Initial Contract.
B. Seller and Purchaser desire to modify the Original Agreement as herein set
forth.
THEREFORE, in consideration of the above recitals, the mutual covenants and
agreements herein set forth and the benefits to be derived therefrom and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Purchaser and Seller agree as follows:
1. DEFINED TERMS. Each capitalized term used but not defined herein shall have
the meaning ascribed to it in the Original Agreement.
2. DEFERRAL OF CLOSING UNTIL JULY 29, 1996. Seller hereby acknowledges that,
prior to the date hereof, Purchaser exercised its option, pursuant to Section
4(A)(i) of the Original Agreement, to defer Closing until July 29, 1996.
3. SELLER'S RIGHT TO EXTEND THE CLOSING. In addition to Purchaser's right to
further defer the Closing until August 28, 1996 upon compliance with the
provisions of Section 4(A)(ii) of the Original Agreement, Seller shall also have
the right, at its option, to defer Closing until August 28, 1996 by delivery of
written notice to Purchaser of such election on or before 4 p.m. (Chicago,
Illinois time) on July 23, 1996.
4. ESTOPPEL CERTIFICATES.
A. REVISED FORM OF ESTOPPEL CERTIFICATE. Exhibit E attached to the Original
Agreement is hereby deleted and Exhibit E attached to this Fourth Amendment is
hereby
<PAGE>
substituted. Therefore, from and after the date of this Fourth Amendment: (i)
all references to "Exhibit E" in the Original Agreement and/or this Fourth
Amendment shall mean Exhibit E attached to this Fourth Amendment, and (ii) all
references to "Form Estoppel Certificate" in the Original Agreement and/or this
Fourth Amendment shall mean the form estoppel certificate attached hereto as
Exhibit E.
B. DISTRIBUTION OF ESTOPPEL CERTIFICATES TO TENANTS. Section 9(A) of the
Original Agreement requires Seller, within ten (10) days of the expiration of
the "Financing Period" (as defined in the Original Agreement), to send "Estoppel
Certificates" (as defined in the Original Agreement) to each tenant occupying
space at the Property as of the last day of the Financing Period. Prior to the
date hereof, Purchaser requested, and Seller agreed, that Seller defer sending
Estoppel Certificates to tenants until after revision of the Form Estoppel
Certificate to reflect any modifications requested by Purchaser's lender.
Therefore, as Section 4(A) above reflects such lender's modifications, Seller
shall send out Estoppel Certificates to tenants within ten (10) days after the
date of this Fourth Amendment.
5. APPROVAL OF NEW LEASES. Under cover letters dated June 13, 1996 and June
18, 1996 from Seller's counsel, Rosenberg & Liebentritt, P.C., addressed to
Purchaser, Purchaser received "New Lease Notices" (as defined in the Original
Agreement) with respect to a Second Amendment to Lease with PNC Bank (the "PNC
Second Amendment") and a Standard Form Office Lease with PNC Bank (the "PNC New
Lease"). Pursuant to Section 11(L) of the Original Agreement, Purchaser hereby
approves of the PNC Second Amendment and the PNC New Lease.
6. CHANGE IN TITLE INSURERS. Section 3 of the Original Agreement requires
Purchaser to obtain and cause to be delivered to Seller a "Title Commitment" (as
defined in the Original Agreement) from Partners Title Company of Houston, Texas
("Partners"). Prior to the date hereof, Partners, as agent for Commonwealth Land
Title Insurance Company, has issued a Title Commitment with an effective date of
March 26, 1996 and a revision date of May 9, 1996 (the "Present Title
Commitment"). Purchaser has requested that the Present Title Commitment be
canceled and that a new title commitment (the "New Title Commitment") be issued
with respect to the Property by First American Title Insurance Company of New
York's 228 East 45th Street, New York, New York 10017 agency ("First American").
Seller hereby agrees to the cancellation of the Present Title Commitment and the
issuance of the New Title Commitment and Purchaser and Seller further agree as
follows:
A. All costs with respect to or in connection with the issuance and the
cancellation of the Present Title Commitment shall be borne by Purchaser.
B. All costs with respect to or in connection with the issuance of the New
Title Commitment shall be borne by Purchaser.
C. Purchaser shall, within five (5) days after the date of this Fourth
Amendment, obtain the New Title Commitment and cause the same to be delivered to
Seller. Purchaser hereby acknowledges and agrees: (i) that the time period
described in Section 3(C) of the Original Agreement for delivering notice to
Seller of any objections to title disclosed in the Present Title Commitment
and/or the "Survey" (as defined in the Original Agreement) has expired, and (ii)
that Purchaser shall not be permitted to object to any matters disclosed in the
New Title Commitment that are disclosed in the Present Title Commitment.
2
<PAGE>
D. From and after the date hereof: (i) all references to "Title Insurer" in
the Original Agreement and/or this Fourth Amendment shall mean First American,
and (ii) all references to "Title Commitment" in the Original Agreement and/or
this Fourth Amendment shall mean the New Title Commitment.
7. RATIFICATION. It is expressly understood and agreed that the Original
Agreement, as hereby amended, shall continue in full force and effect in
accordance with its terms and all references in the Original Agreement to the
term "Agreement" shall mean the Original Agreement as modified by this Fourth
Amendment.
8. SECTION HEADINGS. The section headings used herein are for reference
purposes only and do not control or affect the meaning or interpretation of any
term or provision hereof.
9. GOVERNING LAW. This Fourth Amendment shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
10. COUNTERPARTS. This Fourth Amendment may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
taken together shall constitute one and the same instrument.
11. CONFLICT. In the event of a conflict between the terms and provisions of
the Original Agreement and the terms and provisions of this Fourth Amendment,
the terms and provisions of this Fourth Amendment shall control.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
3
<PAGE>
IN WITNESS WHEREOF, Seller and Purchaser have executed and delivered this
Fourth Amendment as of the date first above written.
SELLER:
SENTRY WEST JOINT VENTURE, an Illinois joint venture
partnership
By: Blue Bell Associates, an Illinois joint venture, as
managing general partner
By: First Capital Income Properties, Ltd. - Series XI,
an Illinois limited partnership, a general partner
of Blue Bell Associates
By: First Capital Financial Corporation, a
Florida corporation, as the general partner
of First Capital Income Properties, Ltd. -
Series XI
By: /s/ Norman Field
-----------------------------------------
Name: Norman Field
---------------------------------------
Its: Vice President
----------------------------------------
By: First Capital Income and Growth Fund - Series XII,
an Illinois limited partnership, a general partner
of Blue Bell Associates
By: First Capital Financial Corporation, a
Florida corporation, as the general partner
of First Capital Income and Growth Fund -
Series XII
By: /s/ Norman Field
-----------------------------------------
Name: Norman Field
---------------------------------------
Its: Vice President
----------------------------------------
PURCHASER:
BGK PROPERTIES, INC., a Delaware corporation
By: /s/ Edward M. Gilbert
---------------------------------------------------------
Name: Edward M. Gilbert
-------------------------------------------------------
Its: President
--------------------------------------------------------
4
<PAGE>
EXHIBIT 2.6
SENTRY PARK WEST OFFICE CAMPUS
BLUE BELL, PENNSYLVANIA
FIFTH AMENDMENT TO REAL ESTATE SALE AGREEMENT
---------------------------------------------
THIS FIFTH AMENDMENT TO REAL ESTATE SALE AGREEMENT (the "Fifth
Amendment") is made as of the 21st day of August, 1996 by and between SENTRY
WEST JOINT VENTURE, an Illinois joint venture partnership ("Seller"), with an
office at Two North Riverside Plaza, Suite 600, Chicago, Illinois 60606, and
BGK PROPERTIES, INC., a Delaware corporation ("Purchaser"), with an office at
330 Garfield Street, Santa Fe, New Mexico 87501.
RECITALS
--------
A. Seller and Purchaser are parties to that certain Real Estate Sale Agreement
(the "Initial Contract") dated as of March 25, 1996, as amended by that certain
First Amendment to Real Estate Sale Agreement (the "First Amendment") dated as
of May 9, 1996, that certain Second Amendment to Real Estate Sale Agreement (the
"Second Amendment") dated as of May 24, 1996, that certain Third Amendment to
Real Estate Sale Agreement (the "Third Amendment") dated as of May 30, 1996 and
that certain Fourth Amendment to Real Estate Sale Agreement (the "Fourth
Amendment") dated as of July 2, 1996 (the Initial Contract, the First Amendment,
the Second Amendment, the Third Amendment and the Fourth Amendment are
collectively referred to as the "Original Agreement") for the purchase and sale
of the certain real estate and improvements located thereon in the City of Blue
Bell, County of Montgomery, Commonwealth of Pennsylvania, as such real property
is more particularly described in Exhibit A attached to the Initial Contract.
B. Seller and Purchaser desire to modify the Original Agreement as herein set
forth.
THEREFORE, in consideration of the above recitals, the mutual covenants and
agreements herein set forth and the benefits to be derived therefrom and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Purchaser and Seller agree as follows:
1. DEFINED TERMS. Each capitalized term used but not defined herein shall have
the meaning ascribed to it in the Original Agreement.
2. CREDIT AGAINST THE PURCHASE PRICE.
A. DELETION OF SECTION 3 OF THE THIRD AMENDMENT. Section 3 of the Third
Amendment is hereby deleted.
B. DUE DILIGENCE CREDIT. As a result of Purchaser's review of the
Property and other matters pursuant to and in accordance with the provisions of
Section 8 of the Original Agreement, Purchaser has requested that Seller
provide, and Seller hereby agrees to provide, a credit to Purchaser at Closing
against the Purchase Price in the amount of Three Hundred Thousand Dollars
($300,000.00) (the "Due Diligence Credit").
<PAGE>
C. ELEVATOR REPAIR CREDIT. Presently, the "#2 elevator" (the
"Elevator") in the building at the Property known as "Dublin Hall" is not
operating. Seller and Purchaser have agreed that the repair work to the
Elevator in order to reinstate operation of the Elevator will not be commenced
prior to Closing. Additionally, Purchaser has requested that Seller provide,
and Seller hereby agrees to provide, a credit to Purchaser at Closing against
the Purchase Price in the amount of Twenty Three Thousand One Hundred Seventy
Three Dollars ($23,173.00) (the "Elevator Repair Credit") with respect to the
Elevator's present condition.
D. PURCHASER'S ACKNOWLEDGMENT THAT PROPERTY IS BEING PURCHASED IN "AS
IS" CONDITION. Purchaser hereby acknowledges and agrees that the Due Diligence
Credit and the Elevator Repair Credit constitute full, sufficient, complete and
adequate consideration for Purchaser's agreement to purchase the Property in its
"as is" condition, as more particularly provided in the Original Agreement.
3. RATIFICATION. It is expressly understood and agreed that the Original
Agreement, as hereby amended, shall continue in full force and effect in
accordance with its terms and all references in the Original Agreement to the
term "Agreement" shall mean the Original Agreement as modified by this Fifth
Amendment.
4. SECTION HEADINGS. The section headings used herein are for reference
purposes only and do not control or affect the meaning or interpretation of any
term or provision hereof.
5. GOVERNING LAW. This Fifth Amendment shall be governed by and construed
in accordance with the laws of the Commonwealth of Pennsylvania.
6. COUNTERPARTS. This Fifth Amendment may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
taken together shall constitute one and the same instrument.
7. CONFLICT. In the event of a conflict between the terms and provisions
of the Original Agreement and the terms and provisions of this Fifth Amendment,
the terms and provisions of this Fifth Amendment shall control.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
2
<PAGE>
IN WITNESS WHEREOF, Seller and Purchaser have executed and delivered
this Fifth Amendment as of the date first above written.
SELLER:
SENTRY WEST JOINT VENTURE, an Illinois joint venture
partnership
By: Blue Bell Associates, an Illinois joint venture, as
managing general partner
By: First Capital Income Properties, Ltd. - Series XI,
an Illinois limited partnership, a general partner
of Blue Bell Associates
By: First Capital Financial Corporation, a
Florida corporation, as the general partner
of First Capital Income Properties, Ltd. -
Series XI
By: /s/ Gus J. Athas
-----------------------------------------
Name: Gus J. Athas
---------------------------------------
Its: Senior Vice-President
----------------------------------------
By: First Capital Income and Growth Fund - Series XII,
an Illinois limited partnership, a general partner
of Blue Bell Associates
By: First Capital Financial Corporation, a
Florida corporation, as the general partner
of First Capital Income and Growth Fund -
Series XII
By: /s/ Gus J. Athas
-----------------------------------------
Name: Gus J. Athas
---------------------------------------
Its: Senior Vice-President
----------------------------------------
PURCHASER:
BGK PROPERTIES, INC., a Delaware corporation
By: /s/ Edward M. Gilbert
---------------------------------------------------------
Name: Edward M. Gilbert
-------------------------------------------------------
Its: President
--------------------------------------------------------
3
<PAGE>
EXHIBIT 2.7
CLOSING STATEMENT
Sentry Park West
1777 Sentry Parkway West
Blue Bell, Pennsylvania
Closing Date - August 28, 1996
Proration Days = Seller - 27 days, Purchaser - 4 days
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Credit Credit
Purchaser Seller
------------- --------------
<S> <C> <C>
Purchase price $12,000,000.00
Real Estate Taxes Proration (1) 198,413.63
(See Schedule A)
Rent proration $ 29,763.49
(See Schedule B)
Security Deposits 121,635.00
(See Schedule C)
Service contracts (4) 14,554.29
(See Schedule D)
Licenses/Permits (2) x.xx
Utilities (3) x.xx
Prepaid Rents 60,178.81
(See Schedule E)
Tenant Improvements/Leasing Commissions 16,584.55
(See Schedule F)
Due Diligence Credit - per Fifth 300,000.00
Amendment to Real Estate Sale Agreement
Credit for Elevator Repair - per Fifth 23,173.00
Amendment to Real Estate Sale Agreement
----------- --------------
Sub-total 549,304.59 12,214,998.18
----------- --------------
Net amount due Seller 11,665,693.59
Earnest Money (550,000.00 (5)
--------------
Balance of cash to be funded by Purchaser $11,115,693.59
==============
</TABLE>
<PAGE>
APPROVED: SELLER APPROVED: PURCHASER
SENTRY WEST JOINT VENTURE, an 1777 SENTRY PARKWAY OFFICE
Illinois joint venture partnership ASSOCIATES, Limited Partnership
By: Blue Bell Associates, an By: BGK Equities, Inc.
Illinois joint venture, as
managing general partner By: /s/ Edward M. Gilbert
-----------------------------
Name: Edward M. Gilbert
---------------------------
Its: President
----------------------------
By: First Capital Income Properties, Ltd. - Series XI, an
Illinois limited partnership, a general partner of Blue
Bell Associates
By: First Capital Financial Corporation, a Florida
corporation, as the general partner of First
Capital Income Properties, Ltd. - Series XI
By: /s/ Norman Field
-------------------------------------
Name: Norman Field
-----------------------------------
Its: Vice President
------------------------------------
By: First Capital Income and Growth Fund - Series XII,
an Illinois limited partnership, a general partner of
Blue Bell Associates
By: First Capital Financial Corporation, a Florida
corporation, as the general partner of First
Capital Income and Growth Fund - Series XII
By: /s/ Norman Field
-------------------------------------
Name: Norman Field
-----------------------------------
Its: Vice President
------------------------------------
NOTES:
- ------
(1) All real estate taxes, personal property taxes and assessments relating to
the Property are to be reprorated or prorated upon receipt of actual
bill(s).
(2) To the extent that permits, if any, are not assignable they will be subject
to proration at a later date.
(3) Utility meters are to be read on 8/28/96 and Seller will pay final billing
for such utilities up to and including such date. Utility deposits, if any,
are to be refunded to Seller from the respective utility companies.
(4) Seller agrees to pay all invoices or charges payable to service contract
vendors or other vendors of supplies or services which are unpaid at Closing
and relate to periods prior to and including August 27, 1996, or which
relate to periods after Closing to the extent Seller received a credit from
Purchaser at Closing.
(5) Interest earned on the Earnest Money Deposit shall be returned directly to
Purchaser.
<PAGE>
Sentry Park West
1777 Sentry Parkway West
Blue Bell, Pennsylvania
Closing Date - August 28, 1996
SCHEDULES TO CLOSING STATEMENT
<TABLE>
<CAPTION>
<S> <C>
Balance of cash to be funded by Purchaser $11,115,693.59
Additional Cash Outlays by Purchaser:
1. Purchaser's attorney (Steve Goldstein Esquire) 4,438.00
2. One-half of transfer taxes 120,000.00
3. Title insurance premiums 19,180.00
4. City Property Taxes 16,630.20
5. School Taxes 18,296.89
6. Recording fees 300.00
7. Recording (3) UCC-I's 200.00
8. Title Search 375.00
9. Commitment Fee to Holliday Fenoglio Dockerby & Gibson 67,500.00
10. Escrow/Holdback to Manulife 300,000.00
11. Lender's Counsel 15,000.00
12. Endorsement fees 5,779.00
13. UCC Searches 261.00
14. Intech Risk Management Ltd. 300.00
15. Reimbursement to First American - NY for copying, Fed Ex, etc. 165.00
--------------
Total $11,684,118.68
==============
Total cash outlay by Purchaser at Closing $11,684,118.68
==============
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Amount due Seller $11,115,693.59
Earnest Money 550,000.00
Loan Repayment:
Principal (9,137,354.00)
Accrued Interest to 8/28/96 (54,536.96)
Libor contract - breakage cost (380.73)
--------------
TOTAL - Loan Repayment as of 8/29/96 (9,192,271.69)
Seller's expenses:
1. Seller's attorney x.xx
2. One-half of transfer taxes (120,000.00)
3. Commission to Penn Square Properties, Inc. (294,737.74)
4. Commission to BGK Realty, Inc. (50,000.00)
5. 1996 Real Estate Taxes paid at Closing (219,562.67)
6. Tax Certification to Susan Dunn, Tax Collector (25.00)
7. Sewer Certification to Whitpain Township (10.00)
--------------
Net Total to Seller $ 1,789,086.49
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