SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) June 12, 1996
BALCOR GROWTH FUND
A REAL ESTATE INVESTMENT FOR CAPITAL APPRECIATION
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Exact Name of Registrant
Illinois 0-15646
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State or other jurisdiction Commission file number
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 36-3378299
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Address of principal I.R.S. Employer
executive offices Identification
Number
60015
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Zip Code
Registrant's telephone number, including area code:
(847) 267-1600
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
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Redwood Shores Apartments
In 1987, the Partnership, through two joint ventures (the "Joint Ventures"),
acquired approximately a 35% interest in the Redwood Shores Apartments, Redwood
City, California. The Partnership contributed $1,928,840 towards the
acquisition of the property. The property was acquired subject to a
$28,000,000 first mortgage loan (the "Mortgage Loan") funded from the proceeds
of the sale of MultiFamily Housing Revenue Bonds, Series 1985B, issued by
Redwood City, California ("Issuer") and which consisted of $2,370,000 in serial
bonds and $25,630,000 in term bonds (the "Bonds"). A bond reserve of
$2,478,000 was established with proceeds from the Mortgage Loan for the benefit
of an unaffiliated party which guarantees the payment of principal and interest
on the Bonds (the "Enhancer"). The serial bonds were fully repaid during 1995.
On June 12, 1996, the Partnership contracted to sell the property for a sale
price of $37,000,000 to an unaffiliated party, Security Capital Pacific Trust,
a Maryland real estate investment trust. The purchaser has deposited $750,000
into an escrow account as earnest money. The purchaser is expected to take
title to the property subject to the Mortgage Loan. The principal amount of
the Bonds funding the Mortgage Loan is expected to be approximately $25,000,000
at closing.
The remaining portion of the sale price will be payable in cash at closing,
which is scheduled for July 21, 1996. The Partnership's estimated share of the
net sale proceeds is approximately $3,100,000. In the event certain conditions
relating to the assumption of the Mortgage Loan are not satisfied by July 21,
1996, the closing may be extended by either party for two one-month periods
through September 23, 1996, upon 5 days written notice to the other party, in
order that such conditions can be satisfied. No commission is payable to any
third party in connection with the sale of the property. The General Partner
will be reimbursed by the Partnership for actual expenses incurred in
connection with the sale.
The closing is subject to the satisfaction of numerous terms and conditions,
including the consents of the Issuer and Enhancer and other conditions relating
to the assumption of the Mortgage Loan. There can be no assurance that all of
the terms and conditions will be complied with and, therefore, it is possible
the sale of the property may not occur.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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(a) FINANCIAL STATEMENTS AND EXHIBITS:
None
(B) PRO FORMA FINANCIAL INFORMATION:
None
(C) EXHIBITS:
(2) Agreement of Sale and attachment thereto relating to the sale
of Redwood Shores Apartments, Redwood City, California.
Signature
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
BALCOR GROWTH FUND
A REAL ESTATE INVESTMENT FOR CAPITAL
APPRECIATION
By: Balcor Partners-XX,
an Illinois general partnership, its general
partner
By: The Balcor Company,
a Delaware corporation,
a partner
By: /s/Jerry M. Ogle
------------------------------------
Jerry M. Ogle, Vice President
and Secretary
Dated: June 27, 1996
<PAGE>
AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), entered into as of the 12 day
of June, 1996, by and between SECURITY CAPITAL PACIFIC TRUST, a Maryland real
estate investment trust ("Purchaser"), and REDWOOD SHORES APARTMENT ASSOCIATES,
LTD., a California limited partnership ("Seller").
WITNESSETH:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to
sell at the price of Thirty-Seven Million Dollars ($37,000,000) (the "Purchase
Price"), that certain property commonly known as Redwood Shores Apartments,
Redwood City, California legally described on Exhibit A attached hereto,
together with all improvements constructed thereon and all tenements,
hereditaments, privileges and appurtenances in any way belonging or
appertaining thereto (the "Property"), and all of the personal property owned
by Seller and used in the ownership or operation of the Property [other than
computer hardware or software], a list of such included items being set forth
in Exhibit B attached hereto (the "Personal Property").
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as
follows:
(a) Not more than three (3) business days after the execution of this
Agreement, Purchaser shall deposit the sum of Seven Hundred Fifty Thousand
Dollars ($750,000) (the "Earnest Money") in escrow with First American Title
Insurance Company ("Escrow Agent"), which shall be held by Escrow Agent in
accordance with the provisions of the Escrow Agreement attached hereto as
Exhibit C; and
(b) Purchaser shall pay the balance of the Purchase Price, plus the then
outstanding amount on deposit in the Reserve Account (as defined in the
Indenture [as defined in Paragraph 9(a)(i)]), less the outstanding principal
amount of the Bonds (as hereinafter defined) on the Closing Date (as
hereinafter defined) which Purchaser shall have assumed in accordance with
Paragraph 9(c) below, plus accrued interest thereon, plus or minus any credits
and prorations described herein, to Seller by wire transfer of "immediately
available" funds on or before 11:00 a.m. Chicago time on the Closing Date.
<PAGE>
3. TITLE COMMITMENT AND SURVEY.
(a) Attached hereto as Exhibit D is a copy of a title commitment for an
owner's standard title insurance policy issued by First American Title
Insurance Company (hereinafter referred to as "Title Insurer") dated April 9,
1996 for the Property (the "Title Commitment"). Seller shall cause the Title
Commitment to be endorsed to show Purchaser as the proposed insured and to
increase the amount of insurance to the amount of the Purchase Price. Seller
has previously delivered to Purchaser copies of all of the documents referred
to in the Title Commitment. For purposes of this Agreement, "Permitted
Exceptions" shall mean: (a) general real estate taxes and assessments,
association assessments, special district taxes and assessments and related
charges not yet due and payable; (b) matters caused by or through the actions
of Purchaser or its agents, contractors or representatives; (c) those title
exceptions deemed Permitted Exceptions pursuant to Paragraphs 3(b) and 3(c)
below; and (d) matters relating to the liens and security interests granted to
secure the Bonds or the CNA Credit Documents (as those terms are hereinafter
defined). All other exceptions to title shall be referred to as "Unpermitted
Exceptions."
(b) Seller shall cause to be prepared and delivered to Purchaser within
fifteen days after the date hereof a current ALTA-ACSM Urban survey of the
Property (the "Survey"), including a certification addressed to Purchaser in
the form of Exhibit E attached hereto. Purchaser has previously received a
survey of the Property prepared by Brian, Kangas, Foulk & Associates dated
October 23, 1985 (the "Existing Survey"). On or before the end of the Approval
Period (as hereinafter defined), Purchaser shall notify the Seller in writing
of any objections that Purchaser may have to matters disclosed on the Existing
Survey. Seller shall cooperate with Purchaser to cure any objections raised by
Purchaser. Purchaser shall be deemed to have acknowledged that all matters
shown on the Existing Survey and not specifically objected to by Purchaser in
accordance with the terms of this Paragraph 3(b) shall be deemed to constitute
Permitted Exceptions.
(c) If the Title Commitment or Survey discloses any exceptions to title
other than Permitted Exceptions, Purchaser may give written notice to Seller
(the "Title Notice") of Purchaser's disapproval of any such exceptions (a
"Disapproved Title Exception") on or before the expiration of the Approval
Period, in the case of any exceptions to title disclosed in the Title
Commitment, and on or before the date five (5) business days after the date
Purchaser's counsel shall receive the Survey, in the case of exceptions to
title disclosed in the Survey. Any title exceptions which are set forth on the
Title Commitment or on the Survey to which Purchaser does not object in
accordance with the immediately preceding sentence shall be deemed additional
Permitted Exceptions. With regard to a Disapproved Title Exception for which
Purchaser gives Seller a Title Notice, Seller may but shall not have the
obligation to notify Purchaser ("Response Notice") within three (3) business
days of receipt of the Title Notice whether Seller shall bond over, cure or
cause the Title Insurer to remove such Disapproved Title Exception from the
Title Commitment. Any such Disapproved Title Exception which Seller elects to
bond over, cure or cause the Title Insurer to remove shall be additional
Permitted Exceptions. If Seller does not so notify Purchaser, with respect to
any Disapproved Title Exception, Purchaser may either waiver its objection and
proceed towards closing or terminate this Agreement by giving written notice to
Seller of its election within three (3) additional business days of the earlier
to occur of (a) receipt by Purchaser of the Response Notice and (b) expiration
of the three (3) business day period in which Seller may deliver the Response
<PAGE>
Notice. If Purchaser does not give such written notice within such three (3)
additional business days, (i) Purchaser shall have waived its right to
terminate this Agreement pursuant to this Paragraph 3(c); (ii) such Disapproved
Title Exception shall be deemed an additional Permitted Exception; and (iii)
the parties shall proceed to Closing. If Purchaser terminates this Agreement
by written notice to Seller within such three (3) additional business days: (i)
Purchaser shall promptly deliver to Seller copies of all studies, reports and
other investigations obtained by Purchaser in connection with its due diligence
of the Property, (ii) the Earnest Money deposited by Purchaser shall be
immediately paid to Purchaser, together with any interest earned thereon, and
(iii) neither Purchaser nor Seller shall have any right, obligation or
liability under this Agreement, except for Purchaser's obligation to indemnify
Seller and restore the Property, as more fully set forth in Paragraph 7.
(d) As a condition to Purchaser's obligation to close, the Title Insurer
shall deliver to Purchaser at closing an ALTA Form B (or other form if required
by state law) Owner's Policy of Title Insurance (the "Title Policy"), with
extended coverage (i.e., with ALTA General Exceptions 1 through 5 deleted, or
with corresponding deletions if the Property is located in a non-ALTA state),
issued by the Title Insurer as of the date and time of the recording of the
Deed (as hereinafter defined), in the amount of the Purchase Price, insuring
the Purchaser as owner of good, marketable and indefeasible fee simple title to
the Property, and subject only to the Permitted Exceptions, Disapproved Title
Exceptions waived by Purchaser and Unpermitted Exceptions waived by Purchaser.
The Title Policy may be delivered after the Closing if at the Closing the Title
Insurer issues a currently effective, duly-executed "marked-up" Title
Commitment and irrevocably commits in writing to issue the Title Policy in the
form of the "marked-up" Title Commitment promptly after the Closing Date.
(e) Purchaser shall pay the premium for the Title Policy and all charges
for procuring the Survey.
(f) The obligation of Purchaser to pay various costs as described in this
Paragraph 3 shall survive the termination of this Agreement.
4. PAYMENT OF CLOSING COSTS. Seller shall pay for the costs of any
documentary or transfer stamps to be paid with respect to the Deed (as
hereinafter defined) and all other stamps, intangible, transfer, documentary,
recording and surtax imposed by law with reference to any other sale documents
delivered in connection with the sale of the Property to Purchaser. Each party
shall pay the fees and expenses of its own attorneys in connection with this
transaction.
<PAGE>
5. CONDITION OF TITLE.
(a) If a date-down to the Title Commitment or the Survey discloses
additional title exceptions, Seller shall have thirty (30) days from the date
of the date-down to the Title Commitment or the Survey, as applicable, at
Seller's expense, to bond over, cure and/or have any additional exceptions
removed from the Title Commitment or to have the Title Insurer commit to insure
against loss or damage that may be occasioned by such additional exceptions;
and if Seller does so, the Closing Date shall be delayed accordingly. If
Seller fails to cure or have said additional exceptions removed or have the
Title Insurer commit to insure as specified above within said thirty (30) day
period, Purchaser may terminate this Agreement by giving written notice thereof
to Seller within five (5) days after the expiration of said thirty (30) day
period. Absent notice from Purchaser to Seller in accordance with the
preceding sentence, Purchaser shall be deemed to have elected to take title
subject to said additional exceptions. If Purchaser terminates this Agreement
in accordance with the terms of this Paragraph 5(a), this Agreement shall
become null and void without further action of the parties and all Earnest
Money theretofore deposited into the escrow by Purchaser, together with
interest earned thereon, if any, shall be returned to Purchaser, and neither
party shall have any further liability to the other hereunder, except
Purchaser's obligation to indemnify Seller and restore the Property, as more
fully described in Paragraph 7.
(b) Seller agrees to convey fee simple title to the Property to Purchaser
by a grant deed ("Deed") in recordable form subject only to the Permitted
Exceptions and any other exceptions to which Purchaser has elected to take
subject.
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
(a) Except as otherwise provided in this Agreement, Seller shall bear all
risk of loss with respect to the Property up to the earlier of the dates upon
which either possession or title is transferred to Purchaser in accordance with
this Agreement. Notwithstanding the foregoing, if the Property shall be
damaged by fire or other casualty prior to the Closing Date, and the cost to
repair such damage shall be less than or equal to $100,000 (as determined by
Seller and Purchaser in good faith), Purchaser shall not have the right to
terminate its obligations under this Agreement by reason thereof, but Seller
shall have the right to elect to either repair or restore the Property (in
which case the Closing Date shall be extended until completion of such
restoration) or to assign and transfer to Purchaser on the Closing Date all of
Seller's right, title and interest in and to all insurance proceeds paid or
payable to Seller on account of such fire or casualty, and Purchaser shall
receive a credit against the Purchase Price at Closing in an amount equal to
Seller's casualty insurance deductible with respect to the Property. Seller
shall promptly notify Purchaser in writing of any such fire or other casualty
and Seller's determination of the cost to repair the damage caused thereby. If
the Property shall be damaged by fire or other casualty prior to the Closing
Date, and the cost to repair such damage shall exceed $100,000 (as determined
by Seller and Purchaser in good faith), then this Agreement may be terminated
at the option of Purchaser, which Purchaser may exercise by giving written
notice thereof to Seller within five (5) business days after Purchaser receives
written notice of such fire or other casualty and Seller's determination of the
amount of such damages. If Purchaser shall exercise its option to terminate
this Agreement, this Agreement shall become null and void, the Earnest Money
deposited by Purchaser shall be returned to Purchaser, together with interest
<PAGE>
earned thereon, if any, and neither party shall have any further liability or
obligations hereunder, except for Purchaser's, except for Purchaser's
obligation to indemnify Seller and restore the Property, as more fully
described in Paragraph 7. If Purchaser shall not exercise such option to
terminate, the Closing shall take place on the Closing Date and Seller shall
assign and transfer to Purchaser on the Closing Date all of Seller's right,
title and interest in and to all insurance proceeds paid or payable to Seller
on account of the fire or casualty, and Purchaser shall receive a credit
against the Purchase Price at Closing in an amount equal to Seller's casualty
insurance deductible with respect to the Property.
(b) If, between the date of this Agreement and the Closing Date, Seller
shall receive notice of any condemnation or eminent domain proceedings which
might result in the taking of any part of the Property or the taking or closing
of any right of access to the Property, Seller shall immediately notify
Purchaser thereof. If the taking of any part of the Property shall: (i)
materially impair access to the Property; (ii) cause any material
non-compliance with any applicable law, ordinance, rule or regulation of any
federal, state or local authority or governmental agencies having jurisdiction
over the Property or any portion thereof; or (iii) materially and adversely
impair the use of the Property as it is currently being operated (hereinafter
collectively referred to as a "Material Event"), Purchaser may:
(i) terminate this Agreement by written notice to Seller, in which
event the Earnest Money deposited by Purchaser, together with interest earned
thereon, if any, shall be returned to Purchaser, and all rights and obligations
of the parties hereunder shall cease, except for Purchaser's obligation to
indemnify Seller and restore the Property, as more fully described in Paragraph
7; or
(ii) proceed with the Closing, in which event Seller shall assign to
Purchaser all of Seller's right, title and interest in and to any award made in
connection with such condemnation or eminent domain proceedings.
Purchaser shall notify Seller, within five (5) business days after Purchaser's
receipt of Seller's notice, whether Purchaser elects to exercise its rights
under Paragraphs 6(b)(i) or 6(b)(ii). The Closing shall be delayed, if
necessary, until Purchaser makes such election. If Purchaser fails to make an
election within such five (5) business day period, Purchaser shall be deemed to
have elected to exercise its rights under Paragraph 6(b)(ii).
If between the date of this Agreement and the Closing Date, Seller shall
receive notice of any condemnation or eminent domain proceedings which would
not constitute a Material Event, Purchaser shall be required to proceed with
the Closing, in which event Seller shall assign to Purchaser all of Seller's
right, title and interest in and to any award made in connection with such
condemnation or eminent domain proceedings.
<PAGE>
7. DOCUMENTS, INSPECTION OF PROPERTY AND APPROVAL PERIOD.
(a) Seller has delivered to Purchaser copies of the most recently
available tax bills, rent rolls, insurance policies, service contracts and
utility account numbers, and has delivered to Purchaser copies of the CNA
Credit Documents (as hereinafter defined), copies of the Existing Bond
Documents (as hereinafter defined), an operating statement for the year ended
1995 and a year-to-date operating statement for 1996 (collectively the
"Documents"). All of the Documents shall be subject to approval by Purchaser
on or before the end of the Approval Period. During the Approval Period, upon
reasonable notice to the Seller, the Purchaser shall have the right to inspect
the Property and to conduct studies, tests and investigations of the Property
during normal business hours.
(b) All of such tests, studies and investigations shall be at Purchaser's
sole expense, and Purchaser shall restore the Property to the condition
existing prior to the performance of such tests, studies and investigations.
Purchaser agrees to defend and hold Seller and any affiliate or parent of
Seller, and their respective shareholders, employees, officers and directors,
(collectively, "Indemnitees") harmless from any liability, costs and expenses,
including, without limitation, reasonable attorneys' fees, court costs and
costs of appeal, suffered or incurred by Seller or any of the other Indemnitees
for injury to persons or property caused by Purchaser's inspection and
investigation of the Property. Purchaser shall undertake its obligation to
defend Seller and the other Indemnitees as described in the preceding sentence
using attorneys selected by Purchaser, subject to Seller's reasonable approval.
(c) Prior to commencing any such tests, studies and investigations,
Purchaser, its engineers, architects, employees, contractors and agents shall
furnish a certificate of insurance evidencing comprehensive public liability
insurance policies insuring the persons performing such tests, studies and
investigations and listing Seller and Purchaser as additional named insureds
thereunder.
(d) If Purchaser disapproves, in its sole discretion, of the Documents,
the condition of the Property or is otherwise dissatisfied with the purchase of
the Property for any reason, Purchaser shall give Seller written notice thereof
("Notice of Disapproval") prior to 3:00 p.m. Chicago time on June 21, 1996
("Approval Period"); provided, however, that for the limited purpose of
conducting tests, studies and investigations of the fire sprinkler system and
of giving a Notice of Disapproval to Seller, if Purchaser shall disapprove of
the condition of such sprinkler system, in its sole discretion, the Approval
Period shall be extended until 5:00 p.m. Chicago time on July 3, 1996. Upon
receipt of the Notice of Disapproval, (i) Purchaser shall promptly deliver to
Seller copies of all tests, studies and investigations obtained by Purchaser
and return all Documents received from Seller during the Approval Period, (ii)
the Earnest Money, plus interest earned thereon, if any, shall be returned to
the Purchaser, and (iii) neither Purchaser nor Seller shall have any right,
obligation or liability under this Agreement, except for Purchaser's obligation
to indemnify Seller and restore the Property, as more fully described in this
Paragraph 7. If Purchaser does not deliver a Notice of Disapproval to Seller
prior to the expiration of the Approval Period, then Purchaser shall be deemed
to have approved the Documents and the condition of the Property.
<PAGE>
(e) Notwithstanding anything contained herein to the contrary,
Purchaser's obligation to indemnify Seller and the other Indemnitees and to
restore the Property, as more fully described in this Paragraph 7, shall
survive the Closing, the delivery of the Deed and the termination of this
Agreement.
8. AS-IS CONDITION
(a) Except as specifically set forth in Paragraph 18 hereof, Seller makes
no representations or warranties relating to the condition of the Property.
Purchaser acknowledges and agrees that it will be purchasing the Property and
the Personal Property based solely upon its inspections and investigations of
the Property as performed pursuant to Paragraph 7 hereof, and that Purchaser
will be purchasing the Property and the Personal Property "AS IS" and "WITH ALL
FAULTS", based upon the condition of the Property as of the date of this
Agreement, wear and tear and loss by fire or other casualty or condemnation
excepted. Without limiting the foregoing, Purchaser acknowledges that, except
as may otherwise be specifically set forth elsewhere in this Agreement, neither
Seller nor its consultants, brokers or agents (if any) have made any other
representations or warranties of any kind upon which Purchaser is relying as to
any matters concerning the Property or the Personal Property, including, but
not limited to, the condition of the land or any improvements comprising the
Property, the existence or non-existence of Hazardous Materials (as hereinafter
defined), economic projections or market studies concerning the Property, any
development rights, taxes, bonds, covenants, conditions and restrictions
affecting the Property, water or water rights, topography, drainage, soil,
subsoil of the Property, the utilities serving the Property or any zoning or
building laws, rules or regulations or Environmental Laws (as hereinafter
defined) affecting the Property. Seller makes no representation or warranty
that the Property complies with Title III of the Americans with Disabilities
Act or any fire code or building code. Purchaser hereby releases Seller and
any affiliates of Seller from any and all liability in connection with any
claims which Purchaser may have against Seller or its affiliates, and Purchaser
hereby agrees not to assert any claims for contribution, cost recovery or
otherwise, against Seller or its affiliates, relating directly or indirectly to
the existence of asbestos or Hazardous Materials on, or environmental
conditions of, the Property, whether known or unknown. As used herein,
"Environmental Laws" means all federal, state and local statutes, codes,
regulations, rules, ordinances, orders, standards, permits, licenses, policies
and requirements (including consent decrees, judicial decisions and
administrative orders) relating to the protection, preservation, remediation or
conservation of the environment or worker health or safety, all as amended or
reauthorized, or as hereafter amended or reauthorized, including without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), 42 U.S.C. Section 9601 et seq., the Resource
Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. Section 6901 et seq.,
the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. Section 11001
et seq., the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Federal Water
Pollution Control Act, 33 U.S.C. Section 1251 et seq., the Toxic Substances
Control Act, 15 U.S.C. Section 2601 et seq., the Safe Drinking Water Act, 42
U.S.C. Section 300f et seq., the Atomic Energy Act ("AEA"), 42 U.S.C.
Section 2011 et seq., the Occupational Safety and Health Act, 29 U.S.C. Section
651 et seq., and the Hazardous Materials Transportation Act, 49 U.S.C. Section
1802 et seq. As used herein, "Hazardous Materials" means: (1) "hazardous
substances," as defined by CERCLA; (2) "hazardous wastes," as defined by RCRA;
(3) any radioactive material including, without limitation, any source, special
nuclear or by-product material, as defined by AEA; (4) asbestos in any form or
<PAGE>
condition; (5) polychlorinated biphenyls; and (6) any other material, substance
or waste to which liability or standards of conduct may be imposed under any
Environmental Laws.
(b) Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time during which Seller owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Seller makes no representation or
warranty that such material is complete or accurate or that Purchaser will
achieve similar financial or other results with respect to the operations of
the Property, it being acknowledged by Purchaser that Seller's operation of the
Property and allocations of revenues or expenses may be vastly different than
Purchaser may be able to attain. Purchaser acknowledges that it is a
sophisticated and experienced purchaser of real estate and further that
Purchaser has relied upon its own investigation and inquiry with respect to the
operation of the Property and releases Seller and its affiliates from any
liability with respect to such historical information.
(c) Seller has provided to Purchaser the following existing report:
Phase I Environmental Assessment Report prepared by Environmental Management
Group dated February 1994 ("Existing Report"). Seller makes no representation
or warranty concerning the accuracy or completeness of the Existing Report.
Purchaser hereby releases Seller from any liability whatsoever with respect to
the Existing Report, or, including, without limitation, the matters set forth
in the Existing Report, the accuracy and/or completeness of the Existing
Report. Furthermore, Purchaser acknowledges that it will be purchasing the
Property with all faults disclosed in the Existing Report.
9. CONDITIONS PRECEDENT.
(a) The construction of the Property was financed with the proceeds of
the sale of City of Redwood City, California (the "Issuer"), Multifamily
Housing Revenue Bonds (Redwood Shores Apartment Project) Series 1985B in the
original aggregate principal amount of $28,000,000 (the "Bonds"). The Bonds
are evidenced and secured by the following documents (together with any other
documents or agreement evidencing or securing the Bonds, the "Existing Bond
Documents"):
(i) an Indenture of Trust dated as of October 1, 1985 (the
"Indenture") between the Issuer and Security Pacific National Bank (as
succeeded by merger by Bank of America National Trust and Savings Association,
together with its successors in trust, the "Trustee");
(ii) a Loan Agreement dated as of October 1, 1985 (the "Loan
Agreement") between the Issuer and Seller, pursuant to which the proceeds of
the Bonds were loaned to Seller;
(iii) a Deed of Trust, Assignment of Rents and Security Agreement
dated as of October 1, 1985, as amended by First Amendment to Deed of Trust,
Assignment of Rents and Security Agreement dated as of September 29, 1995
("First Deed of Trust"), from the Seller in favor of Trustee and Continental
Casualty Company ("CNA") encumbering the Property to secure the Bonds;
(iv) Surety Bond No. 1667193 issued by CNA, as endorsed by
Endorsement No. 1 to Surety Bond No. 1667193 ("Surety Bond");
<PAGE>
(v) a Regulatory Agreement and Declaration of Restrictions dated as
of October 1, 1985 by and between the Issuer, Trustee and Seller ("Regulatory
Agreement"); and
(vi) a Remarketing Agreement dated as of October 1, 1995 (the
"Remarketing Agreement") by and between Newman and Associates, Inc. and FBS
Investment Services, Inc. (collectively, "Remarketing Agent"), Seller and
Trustee.
(b) Seller is obligated to reimburse CNA for payments to the holders of
the Bonds in accordance with the Surety Bond. Seller's reimbursement
obligation is evidenced and secured by the following documents (together with
any other documents or agreement evidencing or securing such reimbursement
obligations, the "CNA Credit Documents"):
(i) a Reimbursement Agreement dated as of October 1, 1985, as
amended by First Amendment to Reimbursement Agreement dated as of September 29,
1995 (the "Reimbursement Agreement"), between CNA and Seller;
(ii) a Second Deed of Trust, Assignment of Rents and Security
Agreement dated as of October 1, 1985, as amended by First Amendment to Second
Deed of Trust, Assignment of Rents and Security Agreement dated as of September
29, 1995 ("Second Deed of Trust"); and
(iii) a Guaranty Agreement dated as of September 29, 1995
("Guaranty") in favor of CNA from William R. Cooper, Jeffrey B. Allen, Don M.
Shine, George E. Thomas and Balcor Financial Resources, Inc., a Delaware
corporation (collectively, the "Guarantors").
(c) Purchaser and Seller agree that:
(i) The performance of Purchaser's and Seller's obligations under
this Agreement are subject to the condition that Issuer and Trustee shall have
consented to the transfer of title to the Property to Purchaser as may be
required under the Regulatory Agreement or any of the Existing Bond Documents
or CNA Credit Documents;
(ii) The performance of Purchaser's obligations under this Agreement
are subject to the condition that either (A) CNA shall have delivered to
Purchaser a written commitment, in form and substance satisfactory to Purchaser
in its sole and absolute discretion (the "Commitment"), pursuant to which,
among other things, CNA shall have consented to the transfer of title to the
Property to Purchaser, the assumption of the CNA Credit Documents by Purchaser,
and the release of Seller and the Guarantors from their respective obligations
under the CNA Credit Documents, or (B) Purchaser shall have satisfied itself in
its sole discretion that it shall be able to (and the Existing Bond Documents
shall permit Purchaser to) substitute another surety bond, letter of credit or
other credit enhancement ("Alternate Security") for the existing Surety Bond on
or prior to the Closing Date, and Purchaser shall have procured a written
commitment for such Alternate Security in form and substance satisfactory to
Purchaser in its sole discretion;
<PAGE>
(iii) The performance of Seller's obligations under this
Agreement are subject to the condition that Purchaser shall have entered into
an agreement with Issuer and Trustee, in form reasonably satisfactory to
Purchaser and Seller, pursuant to which Purchaser shall have assumed all of
Seller's obligations under the Existing Bond Documents, and Seller shall have
been released from any obligations under the Existing Bond Documents;
(iv) The performance of Seller's obligations under this Agreement are
subject to the condition that CNA shall have released Seller and the Guarantors
from their respective obligations under the CNA Credit Documents;
(v) The performance of Seller's obligations under this Agreement are
subject to the condition that the Remarketing Agent shall have released Seller
from its obligations under the Remarketing Agreement;
The conditions set forth in clauses (i) and (ii) of this subparagraph (c) shall
hereinafter be referred to as the "Initial Conditions Precedent", and the
conditions set forth in clauses (iii) - (v) of this subparagraph (c) shall
hereinafter be referred to as the "Final Conditions Precedent." The Initial
Conditions Precedent and the Final Conditions Precedent are sometimes
collectively referred to as the "Conditions Precedent."
Purchaser shall offer to assume the Existing Bond Documents and the CNA Credit
Documents and use all commercially reasonable efforts (which shall not include
the payment of any additional fees other than the payment of the one percent
[1%] assumption fee described in the CNA Credit Documents and reasonable
attorneys' fees and closing costs) to satisfy the Conditions Precedent. If CNA
shall not permit Purchaser to assume the CNA Credit Documents on terms
reasonably acceptable to Purchaser, and if and only if Purchaser shall have
satisfied itself that it shall be able to (and the Existing Bond Documents
shall permit Purchaser to) provide Alternate Security in substitution for the
existing Surety Bond, then Purchaser shall use its best efforts to obtain a
commitment satisfactory to Purchaser for Alternate Security in order to procure
a release of Seller and the Guarantors from any liability under the CNA Credit
Documents.
If any of the Initial Conditions Precedent shall not have been satisfied on or
before the Closing Date, as the same may have been extended as set forth
herein, then, unless the party or parties whose obligations are conditioned
upon the satisfaction of such Initial Condition Precedent shall have waived the
Initial Condition Precedent in writing on or prior to the Closing Date, this
Agreement shall be terminated, and the Earnest Money shall be immediately paid
to Purchaser, together with interest earned thereon, if any, and neither Seller
nor Purchaser shall have any right, obligation or liability under this
Agreement, except for Purchaser's obligation to indemnify Seller, as more fully
described in Paragraph 7 of this Agreement. If the Initial Conditions
Precedent shall have been satisfied, and the Closing shall fail to occur
because of the failure or inability of Purchaser to satisfy the Final
Conditions Precedent, then this Agreement shall terminate, the Earnest Money
and any interest earned thereon shall be paid to and retained by Seller so long
as Seller is not in default under this Agreement.
(d) Purchaser and Seller further agree that their respective obligations
under this Agreement are subject to the performance by the other party of its
material obligations under this Agreement.
<PAGE>
10. CLOSING; POSSESSION. The closing of this transaction (the "Closing")
shall take place on July 21, 1996 (as it may be extended, the "Closing Date"),
at the office of Escrow Agent, at which time Seller shall deliver possession of
the Property to Purchaser. Notwithstanding the foregoing, so long as Purchaser
is not in default hereunder, either Seller or Purchaser shall have the right to
extend the Closing Date in order to allow additional time to satisfy the
Conditions Precedent for two (2) periods of one month each (i.e. to August 21,
1996 and September 23, 1996, respectively), in each case by giving written
notice to the other party of the exercise of the applicable option to extend no
later than five (5) business days prior to the Closing Date (as the same may
have been extended). This transaction shall be closed through an escrow with
Title Insurer, in accordance with the general provisions of the usual and
customary form of deed and money escrow for similar transactions in California,
provided, however, that in any instance, the sale proceeds shall not be
disbursed from such escrow unless and until the Title Insurer shall be
unconditionally committed to issuing the Title Policy. All closing and escrow
fees shall be divided equally between Seller and Purchaser.
11. CLOSING DOCUMENTS
(a) On the Closing Date, Purchaser shall deliver to Seller an executed
closing statement, counterparts of the assumption of and assignments set forth
in Paragraph 11(b)(iii) and (iv), the balance of the Purchase Price, and such
other documents as may be reasonably required by the Title Insurer in order to
consummate the transaction as set forth in this Agreement.
(b) On the Closing Date, Seller shall deliver to Purchaser the following:
(i) the Deed (in the form of Exhibit F attached hereto), subject to
Permitted Exceptions and those other exceptions to which Purchaser has agreed
to take subject;
(ii) a special warranty bill of sale conveying the Personal Property
(in the form of Exhibit G attached hereto);
(iii) an assignment and assumption of intangible property (in the
form of Exhibit H attached hereto), including, without limitation, the service
contracts listed in Exhibit I attached hereto and Seller's interest in the name
"Redwood Shores Apartments";
(iv) an assignment and assumption of leases and security deposits (in
the form of Exhibit J attached hereto);
(v) a non-foreign affidavit (in the form of Exhibit K attached
hereto);
(vi) original, and/or copies of, leases and service contracts and
lease files affecting the Property in Seller's possession (which shall be
delivered at the Property);
(vii) all documents and instruments reasonably required by the
Title Insurer to issue the Title Policy;
(viii) possession of the Property to Purchaser and keys to the
Property (which shall be delivered at the Property);
<PAGE>
(ix) an executed closing statement;
(x) notice to the tenants of the Property of the transfer of title
and assumption by Purchaser of the landlord's obligation under the leases and
the obligation to refund the security deposits (in the form of Exhibit L
attached hereto);
(xi) an updated rent roll;
(xii) evidence of the termination of the management agreement for
the Property; and
(xiii) originals or certified copies of the Existing Bond
Documents and the CNA Credit Documents.
(c) Purchaser and Seller further agree that each will execute all
customary and necessary documents required by the Issuer and Trustee in order
to evidence Purchaser's assumption of the Existing Bond Documents and the CNA
Credit Documents, if applicable (the "Assumption Documents"), and the release
of Seller and the Guarantor from any and all liability under the Existing Bond
Documents and the CNA Credit Documents.
12. DEFAULT BY PURCHASER. ALL EARNEST MONEY DEPOSITED INTO THE ESCROW
SHALL SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND
UNDERTAKINGS UNDER THIS AGREEMENT. IF PURCHASER SHALL DEFAULT IN THE
PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT, SELLER SHALL RETAIN THE
EARNEST MONEY, TOGETHER WITH INTEREST EARNED THEREON, IF ANY, AS SELLER'S SOLE
RIGHT TO DAMAGES OR ANY OTHER REMEDY, EXCEPT FOR PURCHASER'S OBLIGATION TO
INDEMNIFY SELLER AND RESTORE THE PROPERTY, AS MORE FULLY DESCRIBED IN PARAGRAPH
7. THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES, IF A DEFAULT BY
PURCHASER OCCURRED, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICAL TO DETERMINE.
THEREFORE, BY PLACING THEIR INITIALS BELOW, THE PARTIES ACKNOWLEDGE THAT THE
EARNEST MONEY HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES'
REASONABLE ESTIMATE OF SELLER'S DAMAGES.
13. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF ALL EARNEST MONEY,
TOGETHER WITH INTEREST EARNED THEREON, IF ANY, AND THIS AGREEMENT SHALL THEN
BECOME NULL AND VOID AND OF NO EFFECT AND THE PARTIES SHALL HAVE NO FURTHER
LIABILITY TO EACH OTHER AT LAW OR IN EQUITY, EXCEPT PURCHASER'S OBLIGATION TO
INDEMNIFY SELLER AND TO RESTORE THE PROPERTY, AS MORE FULLY DESCRIBED IN
PARAGRAPHS 7 OF THIS AGREEMENT, AND SELLER'S OBLIGATION TO PAY PURCHASER'S
ACTUAL, DOCUMENTED THIRD PARTY EXPENSES INCURRED IN THE PERFORMANCE OF ITS DUE
DILIGENCE HEREUNDER AND THE PREPARATION OF THIS AGREEMENT; PROVIDED, HOWEVER,
THAT SELLER SHALL NOT BE LIABLE FOR ANY CLAIMS, LOSSES, LIABILITIES, DAMAGES,
COSTS OR EXPENSES IN EXCESS OF $300,000 IN THE AGGREGATE. NOTWITHSTANDING
ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF SELLER'S DEFAULT IS ITS WILLFUL
REFUSAL TO DELIVER THE DEED OR THE OTHER CLOSING DOCUMENTS LISTED IN PARAGRAPH
11(b) OF THIS AGREEMENT, THEN PURCHASER WILL BE ENTITLED TO SUE FOR SPECIFIC
PERFORMANCE.
<PAGE>
14. PRORATIONS; CREDITS
(a) Rents (excluding delinquent rents, but including prepaid rents);
refundable security deposits (which will be assigned to and assumed by
Purchaser and credited to Purchaser at Closing); interest and fees payable
under the Existing Bond Documents and the CNA Credit Documents; fees payable to
the Issuer, Trustee or the Remarketing Agent; water and other utility charges;
fuels; prepaid operating expenses; real and personal property taxes and other
similar items shall be adjusted ratably as of 12:01 a.m. as of the Closing.
Such items shall be credited to the balance of the cash due at Closing.
Assessments payable in installments which are due subsequent to the Closing
Date shall be paid by Purchaser. If the amount of any of the items to be
prorated is not then ascertainable, the adjustments thereof shall be on the
basis of the most recent ascertainable data. The parties agree to reprorate
all items within thirty (30) days of Closing on demand of either Purchaser or
Seller, except for Delinquent Rent.
(b) All rent paid after the Closing Date by any tenant of the Property
who is indebted under a lease to pay rent for any period prior to and including
the Closing Date shall be applied first to the current month's rent owed by
such tenant to Purchaser and the balance, if any, shall be deemed a
"Post-Closing Receipt." Within ten (10) days after Purchaser shall receive a
Post-Closing Receipt, Purchaser shall pay such Post-Closing Receipt to Seller.
Purchaser shall use its best efforts to collect delinquent rents from tenants
for the period up to and including the Closing Date. Within 120 days after the
Closing Date, Purchaser shall deliver to Seller a reconciliation statement of
Post-Closing Receipts covering the first 90 days after the Closing Date. Upon
the delivery of the Post-Closing Receipts reconciliation, Purchaser shall
deliver to Seller any Post-Closing Receipts owing to Seller and not previously
delivered to Seller in accordance with the terms hereof. Seller retains the
right to conduct an audit, at reasonable times and upon reasonable notice, of
Purchaser's books and records to verify the accuracy of the Post-Closing
Receipts reconciliation statement. If such audit shall show that Purchaser has
failed to pay Post-Closing Receipts of more than $5,000, then Purchaser shall
pay the costs of such audit. This Paragraph 14(b) of this Agreement shall
survive the Closing of this transaction.
(c) Seller shall receive a credit for any money held on the Closing Date
in any reserve, escrow, impound or other account by the Trustee or CNA pursuant
to the Existing Bond Documents or the CNA Credit Documents which is not taken
into account in setting the Purchase Price under Paragraph 2(b). Purchaser
shall pay such credit to Seller in immediately available funds on the Closing
Date contemporaneously with the delivery of the Purchase Price as provided
herein.
15. RECORDING. This Agreement shall not be recorded and the act of
recording by Purchaser shall be an act of default hereunder by Purchaser and
subject to the provisions of Paragraph 12.
<PAGE>
16. ASSIGNMENT. The Purchaser shall not have the right to assign its
interest in this Agreement without the prior written consent of the Seller.
Any assignment or transfer of, or attempt to assign or transfer, Purchaser's
interest in this Agreement shall be an act of default hereunder by Purchaser
and subject to the provisions of Paragraph 12. Notwithstanding the foregoing,
Purchaser may assign its interest in this Agreement without the consent of
Seller to any entity in which Purchaser owns a controlling interest and which
assumes in writing the obligations of Purchaser hereunder. If any such
assignment occurs, Purchaser shall nonetheless remain liable for all
obligations of Purchaser hereunder. Notwithstanding the foregoing, Purchaser
may consummate the purchase of the Property as part of a so-called like kind
exchange (the "Exchange") pursuant to e 1031 of the Internal Revenue Code of
1986, as amended (the "Code"); provided that: (i) except as expressly set forth
above, the Closing shall not be delayed or affected by reason of the Exchange
nor shall the consummation or accomplishment of the Exchange be a condition
precedent or condition subsequent to Purchaser's obligations under this
Agreement; (ii) Purchaser shall effect the Exchange through an assignment of
this Agreement, or its rights under this Agreement, to a qualified
intermediary; (iii) Seller shall not be required to take an assignment of the
purchase agreement for the relinquished property or be required to acquire or
hold title to any real property for purposes of consummating the Exchange; and
(iv) Purchaser shall pay any additional costs that would not otherwise have
been incurred by Purchaser or Seller had Purchaser not consummated its purchase
through the Exchange. Seller shall not by this agreement or acquiescence to
the Exchange (1) have its rights under this Agreement affected or diminished in
any manner or (2) be responsible for compliance with or be deemed to have
warranted to Purchaser that the Exchange complies with e 1031 of the Code.
17. BROKER. The parties hereto represent and warrant that no brokerage
commission or finder's fee is due and payable in connection with this
transaction. Each party hereto shall indemnify, defend and hold the other
harmless from any claim whatsoever (including without limitation, reasonable
attorney's fees, court costs and costs of appeal) from anyone claiming by or
through said indemnifying party. The indemnifying party shall undertake its
obligations set forth in the preceding sentence using attorneys selected by the
indemnifying party and approved by the indemnified party in said party's
reasonable discretion. The provisions of this Paragraph 17 shall survive the
Closing and delivery of the Deed.
18. SELLER'S REPRESENTATIONS WARRANTIES AND COVENANTS.
(a) Any reference herein to Seller's knowledge or notice of any matter or
thing, shall only mean such knowledge or notice that has actually been received
by Daniel Charleston (the "Seller's Representative"), and any representation or
warranty of the Seller is based upon those matters of which the Seller's
Representative has actual knowledge. Seller's Representative shall deliver a
copy of the representations contained in Paragraph 18 to the existing property
manager for its review and request the property manager to inform Seller's
Representative of any inaccuracies contained in such representations. Any
knowledge or notice given, had or received by any of Seller's agents, servants
or employees shall not be imputed to Seller, any partner in Seller or Seller's
Representative.
<PAGE>
(b) Subject to the limitations set forth in Paragraph 18(a), Seller
hereby makes the following representations and warranties, which
representations and warranties are made to Seller's knowledge: (i) Seller has
no knowledge of any pending or threatened litigation, claim, cause of action or
administrative proceeding concerning the Property; (ii) the rent rolls attached
hereto as Exhibit M which Seller has submitted to the Purchaser and updated as
of the Closing Date are accurate as of the dates set forth thereon; (iii)
Seller has no knowledge of any additional environmental reports for the
Property commissioned by Seller since February 1994 other than the Existing
Report; (iv) Seller has no knowledge of any due and unpaid leasing commission;
(v) Seller has no knowledge of a material default by Seller under any lease for
the Property; (vi) the list of Service Contracts attached hereto as Exhibit I
is complete and Seller has no knowledge of any material default by Seller under
the terms of any said Service Contracts; (vii) Seller has no knowledge of any
default under the Existing Bond Documents or the CNA Credit Documents; and
(viii) the copies of the Existing Bond Documents and CNA Credit Documents that
Seller has delivered to Purchaser pursuant to Paragraph 11(b)(xiii) hereof are
true, correct and complete to the best of Seller's knowledge. Seller hereby
represents and warrants to Purchaser that: (i) Seller has the power to execute
this Agreement and consummate the transactions contemplated herein; and (ii)
Seller has not entered into any agreement concerning the sale of the Property
which conflicts with the terms of this Agreement.
(c) Purchaser hereby represents and warrants to Seller that Purchaser has
the full right, power and authority to execute this Agreement and consummate
the transactions contemplated herein.
(d) The parties agree that the representations contained herein shall
survive the Closing for a period of ninety (90) days (i.e., the claiming party
shall have no right to make any claims against the other party for a breach of
a representation or warranty after the expiration of ninety (90) days
immediately following Closing).
(e) Seller covenants to operate and manage the Property in the same
manner that it has been managed, maintained and operated the Property during
the period of Seller's ownership, subject to reasonable wear and tear and
damage by fire or other casualty. Seller agrees not to enter into any service
contracts affecting the Property, except for service contracts which are
terminable on not more than thirty (30) days notice. Seller agrees to
terminate any and all management agreements affecting the Property as of the
Closing Date.
19. LIMITATION OF LIABILITY.
(a) None of Seller's beneficiaries, shareholders, partners, officers,
agents or employees, heirs, successors or assigns shall have any personal
liability of any kind or nature for or by reason of any matter or thing
whatsoever under, in connection with, arising out of or in any way related to
this Agreement and the transactions contemplated herein, and Purchaser hereby
waives for itself and anyone who may claim by, through or under Purchaser any
and all rights to sue or recover on account of any such alleged personal
liability.
<PAGE>
(b) Notwithstanding anything contained herein to the contrary, Purchaser
hereby agrees that the maximum aggregate liability of Seller, in connection
with, arising out of or in any way related to a breach by Seller under this
Agreement after the Closing shall be $300,000. Purchaser hereby waives for
itself and anyone who may claim by, through or under Purchaser any and all
rights to sue or recover from Seller any greater amount.
20. INFORMATION AND AUDIT COOPERATION. At Purchaser's request, at any
time before or after the Closing, Seller shall provide to Purchaser's
designated independent auditor access to all of the books and records of the
Property, and all related information regarding the period for which Purchaser
is required to have the Property audited under the regulations of the
Securities and Exchange Commission. The Purchaser agrees to indemnify and hold
harmless the Seller from any claim, damage, loss, or liability to which Seller
is at any time subjected by any person who is not a party to this Agreement as
a result of Seller's compliance with this paragraph.
21. TIME OF ESSENCE. Time is of the essence of this Agreement.
22. NOTICES. Any notice or demand which either party hereto is required
or may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or sent by facsimile or given or made
by overnight courier such as Federal Express or made by United States
registered or certified mail addressed as follows:
If to Seller: c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attention: Ilona Adams
(847) 317-4232
(847) 317-4454 (FAX)
with copies to: The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attention: Dan Charleston
(847) 317-4315
(847) 317-4462 (FAX)
Paragon Group
7557 Rambler Road
Suite 1200
Dallas, Texas 75231
Attention: Lynn Caldwell
and a copy to: Hopkins & Sutter
Three First National Plaza
Suite 3800
Chicago, Illinois 60602
Attention: Scott A. Drane
(312) 558-6587
(312) 558-7764 (FAX)
<PAGE>
If to Purchaser: Security Capital Group
125 Lincoln Avenue
3rd Floor
Santa Fe, New Mexico
Attention: Mr. Anthony R. Arnest
(505) 820-8258
(505) 820-0643 (FAX)
with copies to: Security Capital Pacific Trust
125 Lincoln Avenue
3rd Floor
Santa Fe, New Mexico
Attention: Mr. Mark Peppercorn
(505) 820-8252
(505) 820-0643 (FAX)
and a copy to: Mayer Brown & Platt
350 South Grand Avenue, 25th Floor
Los Angeles, California 90071
Attention: L. Bruce Fisher, Esq.
(213) 229-5125
(213) 625-0248 (FAX)
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be
deemed to be delivered or made: (i) on the next business day if sent by
overnight courier, (ii) on the day delivered if by facsimile, provided the
facsimile is delivered by 5:00 p.m. local time on a business day (if the fax is
not delivered by 5:00 p.m. local time on a business day, the notice shall be
deemed delivered on the next business day thereafter); or (iii) on the 4th
business day after the same is deposited in the United States Mail as
registered or certified matter, addressed as above provided, with postage
thereon fully prepaid. Any such notice, demand or document not given,
delivered or made by registered or certified mail, by overnight courier or by
facsimile as aforesaid shall be deemed to be given, delivered or made upon
receipt of the same by the party to whom the same is to be given, delivered or
made.
23. EXECUTION OF AGREEMENT. Purchaser will execute two (2) copies of
this Agreement and three (3) copies of the Escrow Agreement and deliver them to
Seller for execution. Purchaser shall deposit the Earnest Money with the
Escrow Agent in accordance with the Escrow Agreement and this Agreement. Seller
will deliver one (1) copy of the executed Agreement to Purchaser and will
deliver the following to the Escrow Agent:
(a) One (1) fully executed copy of this Agreement; and
(b) Three (3) copies of the Escrow Agreement signed by the parties with a
direction to execute two (2) copies of the Escrow Agreement and deliver a fully
executed copy to each of the Purchaser and the Seller.
24. GOVERNING LAW. The provisions of this Agreement shall be governed by
the laws of the State of Illinois.
<PAGE>
25. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all other negotiations, understandings and
representations made by and between the parties and their respective agents,
servants and employees.
26. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
27. CAPTIONS. Paragraph titles or captions contained herein are inserted
as a matter of convenience and for reference, and in no way define, limit,
extend or describe the scope of this Agreement or any provision hereof.
28. CONFIDENTIALITY. Neither Seller nor Purchaser shall make any public
announcement or disclosure of any information related to this Agreement to
outside brokers or third parties, before or after the Closing, without the
prior written specific consent of the other party; provided, however, that
Purchaser or Seller may disclose this Agreement to its lenders, creditors,
investors, beneficiaries, officers, employees and agents as necessary to
perform its obligations hereunder and to comply with applicable Securities and
Exchange Commission filing requirements.
29. LIMITATION OF PURCHASER'S LIABILITY. Seller shall look to the assets
of Purchaser for the enforcement of any claim against Purchaser, as none of the
trustees, officers, employees and shareholders of Purchaser assume any personal
liability for obligations entered into by or on behalf of Purchaser.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the 12 day of June, 1996.
PURCHASER:
SECURITY CAPITAL PACIFIC TRUST, a Maryland real estate investment trust
By: /s/Anthony R. Arnest
------------------------------------
Name: Anthony R. Arnest
----------------------------------
Title: Vice President
---------------------------------
<PAGE>
SELLER:
REDWOOD SHORES APARTMENT ASSOCIATES LTD., a
California limited partnership
By: REDWOOD PARTNERS, an Illinois general
partnership, its general partner
By: Sequoia Shores, Inc., an Illinois
corporation, a general partner of Redwood
Partners
By: /s/Daniel L. Charleston
-----------------------------------
Name: Daniel L. Charleston
---------------------------------
Title: Authorized agent
--------------------------------
By: Redwood Associates A Real Estate Limited
Partnership, an Illinois limited partnership,
a general partner of Redwood Partners
By: Balcor Partners - XX, an Illinois general
partnership, a general partner of Redwood
Associates A Real Estate Limited Partnership
By: The Balcor Company, a Delaware corporation,
a general partner of Balcor Partners - XX
By: /s/Daniel L. Charleston
-----------------------------------
Name: Daniel L. Charleston
---------------------------------
Title: Authorized agent
--------------------------------
<PAGE>
Exhibits
A - Legal
B - Personal Property
C - Escrow Agreement
D - Title Commitment
E - Surveyor's Certification
F - Deed
G - Bill of Sale
H - Assignment and Assumption of Intangible Property
I - Service Contracts
J - Assignment and Assumption of Leases and Security Deposits
K - Non-Foreign Affidavit
L - Notice to Tenants
M - Rent Roll
