FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 26,
1996
CARLYLE INCOME PLUS, L.P.-II
(Exact name of registrant as specified in its charter)
Illinois 0-17705 36-3555432
(State of organization) (Commission (IRS Employer
File Number) Identification
Number)
900 North Michigan Avenue, Chicago, Illinois 60611
(Address of principal executive office)
Registrant's telephone number, including area code: (312) 915-
1987
<PAGE>
THE ASHBY AT MCLEAN APARTMENTS
McLean, Virginia
Item 2. Acquisition or Disposition of Assets. On August 26, 1996,
CIP/Ashby Partners (the "Venture"), an Illinois general partnership
between Carlyle Income Plus, L.P.-II (the "Partnership") and
Carlyle Income Plus, Ltd. (the "Affiliated Partner"), another
partnership sponsored by the General Partners of the Partnership,
sold the land and related improvements known as The Ashby at McLean
Apartments (the "Property"), a 12-story, 250-unit, approximately
272,250-square foot apartment building located on approximately 4.3
acres in McLean, Fairfax County, Virginia. The Property includes
approximately 27,000 square feet of commercial space and 350
parking spaces. The purchaser, WRIT Limited Partnership, a
Delaware limited partnership, is not affiliated with the
Partnership or its General Partners and the sale price was
determined by arm's length negotiations.
Certain restrictions relating to the use of the Property,
imposed by Fairfax County zoning requirements, provide that through
the year 2002 at least 51 residential units are to be leased to
tenants whose household adjusted gross incomes do not exceed
certain amounts based on a schedule devised and periodically
revised by the United States Department of Housing and Urban
Development.
<PAGE>
The sale price of the land and improvements was
$21,400,000 and was paid in cash at closing (net of selling costs
and prorations). Residential occupancy at the Property was
approximately 98% and commercial occupancy was approximately 92% at
the date of sale. The sale resulted in a gain to the Venture of
approximately $3,700,000 (of which the Partnership's share is
approximately $2,553,000) for financial reporting purposes, due
primarily to a $7,572,479 provision for value impairment recorded
by the Venture in 1994 (of which the Partnership's share was
$5,225,011). Also, the Property was classified as held for sale as
of April 1, 1996 and therefore has not been subject to continued
depreciation as of that date for financial reporting purposes. In
addition, the Venture expects to report a loss on sale of
approximately $3,475,000 for Federal income tax reporting purposes
in 1996 (of which the Partnership's share will be approximately
$2,398,000).
The terms of the venture agreement provide generally that
annual cash flow, sale proceeds and tax items are to be distributed
or allocated based on the capital contributions made by each
partner (69% to the Partnership and 31% to the Affiliated Partner).
The Partnership expects to distribute its 69% share of the net
proceeds from this sale, net of any necessary working capital
reserve, in 1996.
The Partnership Agreement provides that distributions of
sale proceeds are to be allocated 99% to the Limited Partners and
1% to the General Partners until receipt by the Limited Partners of
an amount equal to their initial contributed capital plus a
stipulated return thereon. Thereafter, distributions of sale
proceeds are to be allocated to the General Partners until the
General Partners have received distributions in an amount equal to
3% of the gross selling prices of all properties sold, with the
remaining balance to be distributed 85% to the Limited Partners and
15% to the General Partners; provided, however, that such 3% and
15% of sale proceeds distributable to the General Partners are
subordinate to the Limited Partners' receipt of a stipulated return
on their investment. Since the Limited Partners will not have
received the aforementioned stipulated amounts from the proceeds of
this sale, the General Partners will only be entitled to their 1%
share in the distributions of proceeds from this sale at this time.
Item 7. Financial Statements and Exhibits
(a) Financial Statements. Not Applicable
(b) Pro Forma Financial Information - Narrative.
As a result of the sale of the Property, beyond August 26,
1996, there will be no further rental and other income, property
operating expenses, depreciation or venture partner's share of
venture's operations recorded for the Property in the consolidated
financial statements of the Partnership, which for the
Partnership's most recent fiscal year ( the year ended December 31,
1995) were approximately $3,291,000 $1,577,000, $580,000 and
$351,000, respectively. Rental and other income, property
operating expenses, depreciation and venture partner's share of
venture's operations for the Property were approximately
$1,684,000, $847,000, $146,000 and $214,000, respectively, for the
six months ended June 30, 1996. Also, as a result of the sale of
the Property, there are no further consolidated assets and
liabilities related to the Property, which at June 30, 1996
consisted of land and buildings and improvements (net of
accumulated depreciation and provision for value impairment) of
approximately $17,311,000; cash and other current assets of
approximately $1,497,000; accrued real estate taxes and other
current liabilities of approximately $228,000; tenant security
deposits of approximately $105,000 and venture partner's
subordinated equity of approximately $5,738,000. The remaining
operations of the Partnership will consist primarily of the
operations (through joint ventures) of the Partnership's remaining
owned investment properties, the Landings Shopping Center and 1225
Connecticut Avenue Office Building.
(c) Exhibits.
1. Real Property Purchase Agreement between CIP/Ashby
Partners and WRIT Limited Partnership, dated July 19, 1996.
<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 thereunto duly authorized.
CARLYLE INCOME PLUS, L.P.-II
By: JMB Realty Corporation
Corporate General Partner
By:
Gailen J. Hull, Senior Vice
President
Principal Accounting Officer
Date: September 6, 1996
PURCHASE AGREEMENT
(The Ashby at McLean Apartments; McLean, Virginia)
THIS AGREEMENT is made and entered into effective as of
this 19th day of July, 1996 ("EFFECTIVE DATE"), by and between
CIP/ASHBY PARTNERS, an Illinois general partnership
(hereinafter called "SELLER"), and WRIT LIMITED PARTNERSHIP,
a Delaware limited partnership (hereinafter called "BUYER").
R E C I T A L S
A. Seller is the owner of that certain real property
located at 1350 Beverly Road, in the City of McLean, County of
Fairfax, Commonwealth of Virginia, consisting primarily of an
apartment complete (the "APARTMENT COMPLEX") sometimes known
as "The Ashby at McLean Apartments".
B. Buyer desires to purchase such Apartment Complex on
the terms and conditions hereinafter documented.
NOW, THEREFORE, in consideration of the mutual
undertakings of the parties hereto, it is hereby agreed as
follows:
1. PURCHASE AND SALE. Seller shall sell to Buyer, and
Buyer shall purchase from Seller, the land (the "LAND")
described in Exhibit "A") attached hereto and made a part
hereof, together with all right, title and interest of Seller
in and to all improvements, structures, supplies and fixtures
located upon the Land, all right, title and interest of Seller
in and to all easement agreements appurtenant to the Land, all
right, title and interest of Seller in and to those items of
tangible personal property owned by Seller, located at the
Property and used in connection with the operation and
management thereof and listed on Exhibit "B" hereto and made
a part hereof (the " PERSONAL PROPERTY"), all right, title and
interest of Seller in and to the name "The Ashby at McLean
Apartments", all right, title and interest of Seller in and to
all leases and, to the extent assignable, all right, title and
interest in and to all contract rights that Buyer elects to
assume in accordance with the terms and conditions hereinafter
set forth, agreements, licenses and permits, warranties,
tenant lists, advertising material and telephone exchange
numbers (hereinafter, collectively the "PROPERTY"), all upon
the terms, covenants and conditions hereinafter set forth.
2. PURCHASE PRICE. The purchase price (the "PURCHASE
PRICE") for the Property shall be the sum of $21,400,000.
3. PAYMENT OF PURCHASE PRICE. The Purchase Price shall
be paid to Seller by Buyer as follows:
<PAGE>
A. ESCROW DEPOSITS. Within one (1) business day after
the date on which this Agreement has been executed by both
Seller and Buyer, Buyer shall deliver, by wire transfer, by
bank or cashier's check or by other delivery of good funds, an
amount equal to $250,000 (the "INITIAL DEPOSIT") to Ticor
Title Insurance Company, at its offices at 203 North LaSalle,
Suite 1400, Chicago, Illinois 60601, Attention: Mr. Richard
Lucchesi (which company, in its capacity as escrow holder
hereunder, is called "ESCROW HOLDER"). In addition, unless
Buyer shall have theretofore delivered the "Termination
Notice" (as hereinafter defined), Buyer shall deliver an
additional deposit in the amount of $250,000 (the "ADDITIONAL
DEPOSIT") to Escrow Holder concurrently with the expiration of
the "Due Diligence Period" ( as hereinafter defined). As
used herein, the term "ESCROW DEPOSIT" shall mean the Initial
Deposit plus the Additional Deposit from and after the deposit
thereof, together with all interest earned on all such amounts
so deposited. The Escrow Deposit shall be held by Escrow
Holder as a deposit against the Purchase Price in accordance
with the terms and provisions of this Agreement. At all times
in which the Escrow Deposit is being held by the Escrow
Holder, the Escrow Deposit shall be invested by Escrow Holder
in the following investments ("APPROVED INVESTMENTS"): (i)
United States Treasury obligations, (ii) United States
Treasury-backed repurchase agreements issued by a major
national money center banking institution reasonably
acceptable to Seller and Buyer, or (iii) such other manner as
may be reasonably agreed to by Seller and Buyer. The Escrow
Deposit shall be disposed of by Escrow Holder only as provided
in this Agreement.
B. CLOSING PAYMENT. The Purchase Price, as adjusted by
the application of the Escrow Deposit and by the prorations
and credits specified herein, shall be paid in cash on the
"Closing Date", as hereinafter defined (the amount to be paid
under this subparagraph B being herein called the "CLOSING
PAYMENT").
4. CONDITIONS PRECEDENT. The following matters shall be
conditions precedent to the obligations of the parties, as set
forth in this Paragraph 4:
A. TITLE MATTERS
(1) INITIAL TITLE AND SURVEY REVIEWS. Seller has
ordered, and upon receipt shall deliver to Buyer, a commitment
for title insurance (the "TITLE COMMITMENT") covering the
Property from Ticor Title Insurance Company (which company, in
its capacity as title insurer hereunder, is herein called the
"TITLE COMPANY"). In addition, Seller has ordered, and upon
receipt shall deliver to Buyer an update of that certain
survey of the Property last revised February 16, 1990,
<PAGE>
prepared by Greenhorne & O'Mara ("SURVEY"). If Buyer shall
fail to deliver written notice ("TITLE OBJECTION NOTICE")
specifying any title or survey matters disapproved by Buyer on
or before the later to occur of (i) the end of the Due
Diligence Period, or (ii) the date which is seven (7) days
after Buyer shall have received both the Title Commitment and
the Survey (such later to occur of (i) or (ii) above being
herein called the "TITLE REVIEW EXPIRATION DATE"), Buyer shall
be deemed to have approved the exceptions to title shown on
the Title Commitment and the matters disclosed on the Survey.
If Buyer shall timely deliver a Title Objection Notice
hereunder, Seller shall have three (3) business days after
receipt thereof to notify Buyer as to each disapproved matter
set forth in such notice either that (i) Seller elects not to
cause such disapproved matter to be removed as of the Closing
Date (or otherwise take any action with respect thereto), or
(ii) Seller intends to use commercially reasonable efforts to
either (a) cause such disapproved matter to be removed on the
Closing Date, or (b) obtain a title endorsement (if available)
insuring over such disapproved matter; provided, however,
except as set forth below, Seller shall have no liability if
for any reason such exceptions are not removed or insured over
as of the Closing Date. Failure to deliver any written
notification by Seller of its election within such period
shall be deemed to be an election not to cause any such
disapproved matters to be removed. If Seller elects not to
cause any or all such disapproved matters to be removed or
insured over as aforesaid, Buyer shall have three (3) business
days from receipt of written notice thereof (or from the date
of Seller's deemed election as aforesaid) to notify Seller in
writing either that (x) Buyer revokes its disapproval and will
proceed with the purchase of the Property without any
reduction in the Purchase Price and will take subject to such
matters, or (y) Buyer terminates this Agreement. Failure to
deliver any written notification by Buyer of its election
within such three (3) business day period (the "BUYER TITLE
RESPONSE PERIOD"), shall be deemed to be an election to
terminate this Agreement. Notwithstanding Seller's election
to use commercially reasonable efforts to remove or insure
over any title exception or survey matter disapproved by
Buyer (and which Seller is not obligated to remove pursuant to
the terms of this Agreement) as aforesaid, if, for any reason,
on or before the Closing Date Seller does not cause any such
disapproved title exceptions or survey matters (which Seller
is not obligated to remove) to be so removed or insured over
at no cost or expense to Buyer, then unless waived by Buyer as
hereinafter provided, the obligation of Seller to sell, and
Buyer to buy, the Property as herein provided shall terminate,
the Escrow Deposit shall be returned to Buyer and Seller and
Buyer shall have no further obligations in connection
herewith.
<PAGE>
(2) ADDITIONAL TITLE AND SURVEY MATTERS. Approval by
Buyer of any additional exceptions to title or survey matter
disclosed after the Title Review Expiration Date shall be a
condition precedent to Buyer's obligation to purchase the
Property. Unless Buyer gives written notice that it approves
any such additional exceptions to title or survey matters,
stating the exceptions so approved, on or before the Closing
Date, Buyer shall be deemed to have disapproved said
exceptions. If, for any reason, on or before the Closing Date
Seller does not cause such exceptions to title or survey
matters which Buyer timely disapproves (including those
matters which Seller has elected to use commercially
reasonable efforts to remove or insure over as set forth
herein) to be removed at no cost or expense to Buyer (Seller
having the right but not the obligation to do so, except as
set forth herein) the obligation of Seller to sell, and Buyer
to buy, the Property as herein provided shall terminate, the
Escrow Deposit shall be returned to Buyer and Seller and Buyer
shall have no further obligations in connection herewith.
Buyer shall have the option to waive the condition precedent
set forth in this paragraph 4A(1) by notice to Seller. In the
event of such waiver, such condition shall be deemed
satisfied.
(3) SELLER CURE OBLIGATIONS. Notwithstanding anything
to the contrary contained in this Agreement, Seller shall be
obligated to remove (or cause the Title Company to
affirmatively insure over) the following matters: (i) any
mortgages or deeds of trust covering the Property which secure
financing obtained by Seller, (ii) any mechanic's or
materialmen's liens against the Property as a result of work
done by or on behalf of Seller, (iii) tax or judgment liens
against Seller, and (iv) any other liens of a monetary nature
against the Property which are not disclosed by the Title
Commitment and which are not otherwise provided for or
contemplated by this Agreement (but Seller shall not be
obligated hereby to expend more than $25,000 in the aggregate
in connection with this clause (iv)).
(4) EXCEPTIONS TO TITLE. Buyer shall be obligated to
accept title to the Property, subject to the following
exceptions to title:
(a) Real estate taxes and assessments not yet due and
payable; and
(b) Such exceptions to title as may be approved by Buyer
pursuant to the provisions of subparagraphs A(1) above.
Conclusive evidence of the availability of such title shall be
the willingness of Title Company to issue to Buyer on the
Closing Date an ALTA owner's title insurance policy in the
standard form issued in the Commonwealth of Virginia
("OWNER'S<PAGE>
POLICY"), the face amount of the Purchase Price, which policy
shall show (i) title to the Property to be vested of record in
Buyer, and (ii) the above exceptions to be the only exceptions
to title.
B. DUE DILIGENCE REVIEWS. Buyer shall have until 5:00
p.m. (Central time) on the date which is thirty (30) days
after the Effective Date (the "DUE DILIGENCE PERIOD") within
which to perform and complete all of Buyer's due diligence
examinations, reviews and inspections of all matters
pertaining to the purchase of the Property, including all
leases, service contracts, survey and title matters, and all
physical, environmental and compliance matters and conditions
respecting the Property. During the Due Diligence Period,
Seller shall provide Buyer with reasonable access to the
Property upon reasonable advance notice and shall also make
available at the Property to Buyer, such leases, service
contracts and other contracts, documents and information as
Buyer shall reasonably request consistent with the provisions
of this paragraph, all upon reasonable advance notice. Buyer
shall promptly commence, and shall diligently and in good
faith pursue, its due diligence review hereunder. Buyer shall
at all times conduct its due diligence review, inspections and
examinations in a manner so as to not cause damage, loss, cost
or expense to Seller or the Property and so as to not
materially interfere with or disturb any tenant at the
Property, and Buyer will indemnify, defend, and hold Seller
and the Property harmless from and against any such damage,
loss, costs or expense incurred in connection with Buyer's
investigation of the Property as contemplated herein (the
foregoing obligation surviving any termination of this
Agreement). Without limitation on the foregoing, in no event
shall Buyer contact any tenant of the Property without
Seller's express written consent, not to be unreasonably
withheld or delayed. Buyer shall have the right to inspect
all apartment units and commercial spaces in the Property.
Buyer shall have the right to conduct informal interviews of
tenants in connection with Buyer's inspection of the spaces
leased by such tenants. In addition, Buyer shall have the
right to inspect such books, records and other documents in
the possession or control of Seller prepared by Seller or by
third parties for Seller which directly pertain to the
construction, ownership, use, occupancy, maintenance,
operation or leasing of the Property (SELLER'S BOOKS AND
RECORDS"); provided, however, Seller's Books and Records shall
not include any documents relating to valuation of the
Property, the sale of the Property or any other attorney-
client privileged or confidential documents (which
confidential documents shall be comprised solely of any
internal documents prepared by Seller or its "General
Partners", as hereinafter defined, for their own internal use
and not for distribution to third parties, including the
<PAGE>
Property manager). Seller shall allow such inspections to be
conducted during normal business hours upon reasonable notice
to Seller. Any contact by Buyer with any governmental
authority having jurisdiction over the Property shall be
subject to prior notice to Seller by Buyer. Seller shall have
the right, at its option, to cause a representative of Seller
to be present at all inspections, reviews and examinations
conducted hereunder. If the transactions hereunder shall fail
to close, Buyer shall promptly deliver to Seller copies of any
written reports relating to the Property prepared for or on
behalf of Buyer by any third party and shall return all
documents and other materials furnished by Seller hereunder.
Buyer shall keep all information or data received or
discovered in connection with any of the inspections, reviews
or examinations strictly confidential in accordance with the
terms of a separate confidentiality agreement dated July 9,
1996. If, on or before the expiration of the Due Diligence
Period, based upon such review, examination or inspection,
Buyer shall determine in its sole and absolute discretion that
it no longer intends to acquire the Property, then Buyer shall
promptly notify Seller of such termination in writing (such
notice being herein called the "TERMINATION NOTICE"),
whereupon the Escrow Deposit shall be returned to Buyer and
this Agreement, and the obligations of the parties hereunder,
shall terminate. In the event that Buyer shall fail to have
delivered the Termination Notice to Seller on or before the
expiration of the Due Diligence Period, Buyer shall be deemed
to have agreed that the foregoing matters are acceptable to
Buyer and that it intends to proceed with the acquisition of
the Property (and, thereafter, Buyer shall have no further
right to terminate this Agreement pursuant to this paragraph
4B).
C. PERFORMANCE BY SELLER; NO MATERIAL ADVERSE CHANGE.
The performance and observance, in all material respects, by
Seller of all covenants and agreements of this Agreement to be
performed or observed by Seller prior to or on the Closing
Date shall be a condition precedent to Buyer's obligation to
purchase the Property. In addition, in the event that the
"Seller Closing Certificate" ( as hereinafter defined) shall
disclose any changes in any material adverse respect in the
representations and warranties of Seller contained in
paragraph 7A below which are not otherwise permitted or
contemplated by the terms of this Agreement and which were not
disclosed in writing by Seller to Buyer or discovered by and
actually known to Buyer prior to the end of the Due Diligence
Period, then Buyer shall have the right to terminate this
Agreement. Buyer shall have the option to waive the condition
precedent set forth in this paragraph 4C by written notice to
Seller. In the event of such waiver, such condition shall be
deemed satisfied.
<PAGE>
D. PERFORMANCE BY BUYER; NO MATERIAL ADVERSE CHANGE.
The performance and observance, in all material respects, by
Buyer of all covenants and agreements of this Agreement to be
performed or observed by its prior to or on the Closing Date
shall be a condition precedent to Seller's obligation to sell
the Property. In addition, in the event that the "Buyer
Closing Certificate" (as hereinafter defined) shall disclose
any changes in any material adverse respect in the
representations and warranties of Buyer contained in paragraph
7B below which are not permitted or contemplated by the terms
of this Agreement, then Seller shall have the right to
terminate this Agreement. Seller shall have the option to
waive the condition precedent set forth in this paragraph 4D
by written notice to Buyer. In the event of such waiver, such
condition shall be deemed satisfied.
E. ADDITIONAL CONDITIONS. The following shall also be
conditions precedent to the obligations of Buyer to close
hereunder: on the Closing Date, (i) there shall be no
material litigation against Seller or against the Property,
except as may be disclosed in Exhibit "H" attached hereto or
except as may otherwise be covered by Seller's insurance. (ii)
no action or proceeding shall have been instituted against
Seller by any party other than Buyer before any court to
restrain or prohibit, or to obtain substantial damages in
respect of, or which is related to or arises out of, this
Agreement, or the consummation of the transactions
contemplated herein, and (iii) the Property shall be in
substantially the same condition as it is on the date the Due
Diligence Period ends, reasonable wear and tear and damage
covered by Paragraph 6 excepted. In addition, it shall be a
condition precedent to Buyer's obligation to close hereunder
that, as of the Closing Date, Buyer shall have received an
estoppel certificate addressed to Buyer (and its lender if
designated by Buyer), dated not more than thirty (30) days
prior to the Closing Date, substantially in the form of the
tenant estoppel certificate attached as Exhibit "C" hereto and
made a part hereof, either from each commercial tenant at the
Property or from Seller as to any such commercial tenant which
fails to deliver such estoppel certificate, and such estoppel
certificate shall be consistent with the information with
respect to such tenant contained on the rent roll furnished by
Seller to Buyer during the Due Diligence Period in all
material respects.
5. CLOSING PROCEDURE. The sale and purchase herein
provided shall be consummated at a closing conference
("CLOSING CONFERENCE") which shall be held on the Closing Date
at the offices of Buyer's counsel, Arent Fox Kintner Plotkin
& Kahn, 1050 Connecticut Avenue, Washington, D.C. As used
herein, "CLOSING DATE" means the date which is the later to
occur of (i) ten (10) days after the date the Due Diligence
<PAGE>
Period expires (ii) ten (10 days after the date Buyer Title
Response Period expires; provided, however, in no event shall
the Closing Date occur after October 15, 1996.
A. ESCROW. On or before the Closing Date, the parties
shall deliver to Escrow Holder the following: (1) by Seller,
a duly executed and acknowledged original special warranty
deed ("DEED") in the form of Exhibit "D" attached hereto and
made a part hereof, and (2) by Buyer, the Closing Payment in
immediately available federal funds. Such deliveries shall be
made pursuant to escrow instructions ("ESCROW INSTRUCTIONS")
to be executed among Buyer, Seller and Escrow Holder in form
reasonably acceptable to such parties in order to effectuate
the intent hereof. The conditions to the closing of such
escrow shall include the Escrow Holder's receipt of the Deed,
the Closing Payment and a notice from each of Buyer and Seller
authorizing Escrow Holder to close the transactions as
contemplated herein (each of Buyer and Seller being obligated
to deliver such authorization notice at the Closing Conference
as soon as it is reasonably satisfied that the other party is
in a position to deliver the items to be delivered by such
other party under subparagraph B below).
B. DELIVERY TO PARTIES. Upon the satisfaction of the
conditions set forth in the Escrow Instructions, then (x) the
Deed shall be delivered to Buyer by Escrow Holder's depositing
the same for recordation, (y) the Closing payment (and the
Escrow Deposit) shall be delivered by Escrow Holder to Seller
and (z) at the Closing Conference, the following items shall
be delivered:
(1) SELLER DELIVERIES. Seller shall execute and deliver
to Buyer the following:
(a) an assignment and assumption of tenant leases
("LEASE ASSIGNMENT AND ASSUMPTION") in the form of Exhibit "E"
attached hereto and made a part hereof;
(b) an assignment and assumption of service contracts
and operating agreements which Buyer elects to assume in
accordance with the terms and conditions hereinafter set forth
("CONTRACT ASSIGNMENT AND ASSUMPTION") in the form of Exhibit
"F", attached hereto and made a part hereof;
(c) a bill of sale and assignment ("BILL OF SALE") in
the form of Exhibit "G" attached hereto and made a part
hereof;
(d) an assignment of all of Seller's right, title and
interest in and to all of the following to the extent related
to the Property in the form of Exhibit "N" attached hereto and
made a part hereof; (i) licenses and permits (collectively,
<PAGE>
the "LICENSES"), (ii) warranties (the "WARRANTIES") and (iii)
tenant list, advertising materials, telephone exchange numbers
and the name "The Ashby at McLean Apartments" (the
"INTANGIBLES").
(e) a certificate of Seller ("SELLER CLOSING
CERTIFICATE") updating the representations and warranties
contained in paragraph 7A hereof to the Closing Date (and
including an updated certified rent roll showing delinquent
and prepaid rent, and security deposits, together with any
accrued interest thereon required to be paid either by law or
pursuant to the applicable leases) and noting any changes
thereto;
(f) notices ("TENANT NOTICES") to the tenants under the
tenant leases in form reasonably satisfactory to Seller and
Buyer that Buyer is the new owner of the Property and has been
assigned the refundable security deposits (and accrued
interest, if required as aforesaid);
(f) a certificate regarding the "non-foreign" status of
Seller;
(h) evidence reasonably satisfactory to Buyer, Escrow
Holder and Title Company respecting the due organization of
Seller and the due authorization and execution of this
Agreement and the documents required to be delivered
hereunder;
(i) such additional documents as may be reasonably
required by Buyer, Escrow Holder and Title Company in order to
consummate the transactions hereunder (provided the same do
not materially increase the costs to, or liability or
obligations of, Seller in a manner not otherwise provided for
herein);
(j) any building permits, certificates of occupancy,
keys and plans and specifications respecting the Property and
all other books, records, papers and documents to be
transferred to Buyer as contemplated in this Agreement (to the
extent the same are in Seller's possession), such deliveries
to be made either by delivering the same directly to Buyer or
by causing such materials to be retained at the management
office at the Property;
(k) an Owner's Certificate signed by Seller, addressed
to the Title Company in form reasonably satisfactory to Title
Company and Seller, with respect to the absence of claims
which would give rise to mechanics' liens, the absence of
parties in possession of the Property other than tenants under
unrecorded leases and the absence of unrecorded easements
granted by Seller, so as to permit the Title Company to
<PAGE>
eliminate the exceptions for those matters from the Owner's
Policy;
(1) an original executed counterpart (or a certified
copy, if originals are not available) of each lease, and each
contract then in effect Buyer elects to assume in accordance
with the terms hereinafter set forth, such deliveries to be
made either by delivering the same directly to Buyer or by
causing such materials to be retained at the management office
at the Property; and
(m) the estoppel certificates provided for in paragraph
4E hereof with respect to any commercial tenant which fails to
deliver such estoppel certificate.
(2) Buyer Deliveries. Buyer shall execute and deliver to
Seller the following:
(a) the Lease Assignment and Assumption;
(b) the Contract Assignment and Assumption;
(c) a notice to Escrow Holder to release the Deposit to
Seller as partial payment of the Purchase Price;
(d) a certificate of Buyer ("BUYER CLOSING CERTIFICATE")
updating the representations and warranties contained in
paragraph 7B hereof to the Closing Date and noting any changes
thereto;
(e) the Tenant Notices;
(f) evidence reasonably satisfactory to Seller, Escrow
Holder and Title Company respecting the due organization of
Buyer and the due authorization and execution of this
Agreement and the documents required to be delivered
hereunder; and
(g) such additional documents as may be reasonably
required by Seller, Escrow Holder and Title Company in or to
consummate the transactions hereunder (provided the same do
not materially increase the costs to, or liability or
obligations of, Buyer in a manner not otherwise provided for
herein).
C. CLOSING COSTS. Seller shall pay (i) the title
insurance premium for the Owner's Policy at a rate not in
excess of standard issue rates and only to the extent
attributable to standard ALTA owner's coverage issued in the
Commonwealth of Virginia (Buyer being obligated to pay any
costs associated with any extended or special coverage or
endorsements), (ii) the costs to obtain the Survey, (iii) the
so-called "Grantor's tax" with respect to the Deed, and (iv)
one-half of the other state or local transfer taxes or
recording fees attributable to the Deed. Buyer shall pay (i)
one-half of the state and local transfer taxes or recording
fees attributable to the Deed (other than the so-called
"Grantor's tax"), and (ii) all fees, costs or expenses in
<PAGE>
connection with Buyer's due diligence review hereunder.
Seller and Buyer shall each pay one-half of the escrow fees of
Escrow Holder. Seller and Buyer shall pay their respective
shares of prorations as hereinafter provided.
D. PRORATIONS
(1) ITEMS TO BE PRORATED. The following shall be
prorated between Seller and Buyer as of the Closing Date (with
Seller being allocated income and expenses prior to the
Closing Date, and Buyer being allocated income and expenses on
and after the Closing Date):
(a) All real estate taxes and assessments on the
Property for the current year. In no event shall Seller be
charged with or be responsible for any increase in the taxes
on the Property resulting from any improvements made after the
Closing Date. In the event that any assessments with respect
to the Property are payable in installments, than the
installment for the obligation current period shall be
prorated (with Buyer assuming the obligation to pay any
installments due after the Closing Date).
(b) All fixed and additional rentals under the leases,
refundable security deposits and other tenant charges. Seller
shall deliver or provide a credit in an amount equal to all
prepaid rentals for periods after the Closing Date and all
refundable security deposits, together with any interest
thereon owed to tenants by law or pursuant o the terms of the
applicable lease ( to the extent the foregoing are held by
Seller and are not applied or forfeited prior to the Closing
Date) to Buyer on the Closing Date. Rents which are
delinquent as of the Closing Date shall not be prorated on the
Closing Date. Buyer shall include such delinquencies in its
normal billing and shall diligently pursue the collection
thereof in good faith after the Closing Date (but Buyer shall
not be required to litigate or declare a default in any
lease). To the extent Buyer receives rents on or after the
Closing Date, such payments shall be applied first toward any
amounts owned to Buyer in connection with the applicable
lease for which such payments are received, and any excess
monies received shall be applied toward the payment of any
delinquent rents, with Seller's share thereof being promptly
delivered to Seller. Buyer may not waive any delinquent rents
nor modify a lease so as to reduce or otherwise affect amounts
owned thereunder for any period in which Seller is entitled to
receive a share of charges or amounts without first obtaining
Seller's written consent. Seller hereby reserves the right to
pursue any remedy against any tenant owing delinquent rents
and any other amounts to Seller; provided, however, that
Seller shall not take any action against a tenant which would
affect such tenant's right to occupy the Property. Buyer
shall reasonably cooperate with Seller in any collection
<PAGE>
efforts hereunder (but shall not required to litigate or
declare a default in any lease). With respect to delinquent
rents and any other amounts or other rights of any kind
respecting tenants who are no longer tenants of the Property
as of the Closing Date, Seller shall retain all rights
relating thereto. If Seller receives any rent after the
Closing Date from any tenant under any tenant under any lease
in effect as of the Closing Date, Seller shall promptly
deliver such rent to Buyer. Upon receipt of any such rent
from Seller, Buyer shall apply such rent first to unpaid rent
accruing after the Closing Date and then to delinquent rent.
(c) All operating expenses of the Property.
(d) Seller shall be entitled to retain all utility
deposits. If any utility deposit is not refundable to Seller
without replacement by Buyer, Buyer shall either: (i) deliver
the requisite replacement utility deposit to the utility
company on or before the Closing Date, or (ii) pay to Seller
at the Closing Conference the amount of such utility deposit,
against a good and sufficient transfer by Seller to Buyer of
all interest of Seller in the utility deposit.
(2) CALCULATION. The prorations and payment shall be
made on the basis of a written statement submitted to Buyer
and Seller by Escrow Holder prior to the Closing Date and
approved by Buyer and Seller. In the event any prorations or
apportionments made under this subparagraph D shall prove to
be incorrect for any reason, then any party shall be entitled
to an adjustment to correct the same. Any item which cannot
be finally prorated because of the unavailability of
information shall be tentatively prorated on the basis of the
best data then available and reprorated when the information
is available.
6. CONDEMNATION OR DESTRUCTION OF PROPERTY. In the event
that, after the date hereof but prior to the Closing Date,
either any portion of the Property is taken pursuant to
eminent domain proceedings or any of the improvements on the
Property are damaged or destroyed by any casualty, Seller
shall have no obligation to repair or replace any such damage
or destruction. Seller shall, upon consummation of the
transaction herein provided, assign to Buyer all claims of
Seller respecting any condemnation or casualty insurance
coverage, as applicable, and all condemnation proceeds or
proceeds from any such casualty insurance received by Seller
on account of any casualty (the damage from which shall not
have been repaired by Seller prior to the Closing Date), as
applicable. In connection with any assignment of insurance
proceeds, Seller shall also pay any applicable deductible
under Seller's insurance (provided, however, Seller shall not
be obligated to pay more than $250,000 in connection
therewith). In the event the condemnation award or the cost of
repair of damage to the Property on account of a casualty, as
<PAGE>
applicable, shall exceed $250,000 (or if such casualty is
uninsured and Seller does not repair the damage caused thereby
or credit Buyer with the reasonable cost to repair the same),
Buyer may, at its option, terminate this Agreement by notice
to Seller, given on or before the Closing Date (in which event
the Escrow Deposit shall be returned to Buyer).
Notwithstanding the foregoing, in connection with any
uninsured casualty, Seller shall be obligated to credit Buyer
up to $100,000 in the aggregate towards the cost to repair any
unrepaired damage (but shall otherwise have no obligation with
respect to any such uninsured casualty). Any repairs performed
by Seller under this paragraph 6 shall be completed to Buyer's
reasonable satisfaction.
7. REPRESENTATIONS. WARRANTIES AND COVENANTS.
A. REPRESENTATIONS. WARRANTIES AND COVENANTS OF SELLER.
(1) GENERAL DISCLAIMER. Except as specifically set forth in
paragraph 7A(2) below or in the Deed, the sale of the Property
hereunder is and will be made on an "as is" basis, without
representations and warranties of any kind or nature, express,
implied or otherwise, including, but not limited to, any
representation or warranty concerning title to the Property,
the physical condition of the Property (including, but not
limited to, the condition of the soil or the Improvements),
the environmental condition of the Property (including, but
not limited to, the presence or absence of hazardous
substances on or respecting the Property), the compliance of
the Property with applicable laws and regulations (including,
but not limited to, zoning and building codes or the status of
development or use rights respecting the Property), the
financial condition of the Property or any other
representation or warranty respecting an income, expenses,
charges, liens or encumbrances, rights or claims on, affecting
or pertaining to the Property or any part thereof. Buyer
acknowledges that, during the Due Diligence Period, Buyer will
examine, review and inspect all matters which in Buyer's
judgment bear upon the Property and its value and suitability
for Buyer's purposes. Except as to matters specifically set
forth in paragraph 7A(2) below or in the Deed, Buyer will
acquire the Property solely on the basis of its own physical
and financial examinations, reviews and inspections and the
title insurance protection afforded by the Owner's Policy.
(2) LIMITED REPRESENTATIONS AND WARRANTIES OF SELLER.
Subject to the provisions of paragraph 7A(1) above, Seller
hereby represents and warrants as follows (it being agreed
that where a representation or warranty is made "to Seller's
knowledge", such
phrase means the present actual knowledge of Brian Ellison, as
portfolio manager, and Thomas Bennett, as head of asset
management, on behalf of Seller (which persons are the
<PAGE>
appropriate individuals within Seller's organization to make
the representations and warranties for which Seller's
knowledge limitations are applicable):
(a) ORGANIZATION. Seller is a general partnership duly
formed and validly existing under the laws of the State of
Illinois.
(b) AUTHORIZATION. The requisite number of the partners
of Seller required by Seller's partnership agreement has
authorized the execution and delivery of this Agreement and
the transactions contemplated hereby.
(c) NO CONFLICTING AGREEMENTS. The execution and delivery
by Seller of, and the performance and compliance by Seller
with the terms and provisions of, this Agreement do not
violate any of the terms, conditions or provisions of (i)
Seller's partnership agreement, (ii) any judgment, order,
injunction, decree, regulation or ruling of any court or other
governmental authority to which Seller is subject, or (iii)
any agreement or contract listed on any Exhibit to this
Agreement or, to Seller's knowledge, any other agreement or
contract to which Seller is a party or to which it or the
Property is subject.
(d) APPROVALS. No authorization, consent, order, approval
or license from, filing with, or other act by any governmental
authority or other person is or will be necessary to permit
the valid execution and delivery by Seller of this Agreement
or the performance by Seller of the obligations to be
performed by it under this Agreement.
(e) UNITED STATES PERSON. Seller is a "United States
person" within the meaning of Sections 1445(f)(3) and
7701(a)(30) of the Internal Revenue Code of 1986, as amended.
(f) ABSENCE OF BANKRUPTCY. Neither Seller nor any partner
of Seller has commenced (within the meaning of any bankruptcy
law) a voluntary case, consented to the entry of an order for
relief against it in an involuntary case, or consented to the
appointment of a custodian of it or for all or any substantial
part of its property, nor has a court of competent
jurisdiction entered an order or decree under any bankruptcy
law that is for relief against Seller or any of its partners
in an involuntary case or appoints a custodian of Seller or
any of its partners or for all or any substantial part of its
or their property.
(g) OPERATING STATEMENTS. The operating statements for
1993, 1994, 1995 and January through June, 1996, delivered to
Buyer by Seller were prepared by Seller in good faith in the
ordinary course of business and were not altered for the sale<PAGE>
contemplated herein.
(h) NO EMPLOYEES. Seller does not have any employees at
the Property (such personnel being the employees of Seller's
third-party manager).
(i) CONDEMNATION. Seller has not received from a
governmental authority written notice, and has no knowledge,
of any pending or threatened condemnation proceedings
affecting the Property, or any part thereof.
(j) TITLE TO PERSONAL PROPERTY. Seller has title to the
Personal Property, free and clear of all liens, encumbrances
and security interests, other than liens which will be
released on or before the Closing Date.
(k) COMPLIANCE. Seller has received no written notice
from any governmental authority having jurisdiction over the
Property to the effect that (i) the Property is not in
compliance with applicable laws and ordinances or (ii) Seller
or the Property does not have any licenses or permits which
are necessary for the current operation of the Property.
(l) LABOR UNIONS. Seller is not a party to any contract
or agreement with any labor union.
(m) LITIGATION. Exhibit "H" attached hereto and made a
part hereof contains a complete and correct list of all
investigations, actions, suits, proceedings or claims pending
or, to Seller's knowledge, threatened in writing against
Seller or the Property, at law or in equity or before or by
any federal, state, municipal or other governmental
department, commission, board, agency or instrumentality,
domestic or foreign (collectively, "LITIGATION"), and sets
forth, with respect to each such Litigation, the parties to
such Litigation, the amount claimed as damages (or other
remedies sought) and the status of such Litigation as of the
date hereof. Except as set forth on Exhibit "H" hereto, to
Seller's knowledge, there is no Litigation.
(n) ENVIRONMENTAL MATTERS.
(1) Except as set forth in Exhibit "I" attached hereto
and made a part hereof, Seller has not received any written
notice, and has no knowledge, of the existence, deposit,
storage, removal, burial or discharge of any "Hazardous
Material" at, upon, under or within the Property. Except as
set forth in Exhibit "I" attached hereto, Seller has no
knowledge that the Property has previously been used for the
use, storage, treatment, production, manufacture, generation,
transportation, release or disposal of Hazardous Materials. To
Seller's knowledge, Seller has complied with all
<PAGE>
"Environmental Laws" (as hereinafter defined) affecting the
Property, including notification requirements relating to the
release of Hazardous Materials.
(2) Seller has received no written notice of any pending
or threatened claims, against Seller or the Property, or any
portion thereof, by any governmental authority or other person
relating to any Hazardous Material or pursuant to any
Environmental Law, whether for enforcement, clean-up, removal,
remediation, assertion of liability, cost recovery,
compensation, contribution, recovery of damages, injunction or
other equitable relief or otherwise.
(3) For purposes of this subparagraph the term "HAZARDOUS
MATERIAL" shall mean any flammable, explosive, radioactive or
reactive materials, any asbestos (whether friable or
non-friable), any pollutants, contaminants or other hazardous,
dangerous or toxic chemicals, materials or substances, any
petroleum products or substances or compounds containing
petroleum products, including gasoline, diesel fuel and oil,
any polychlorinated biphenyls or substances or compounds
containing polychlorinated biphenyls, and any other material
or substance defined as a "hazardous substance," "hazardous
material," "hazardous waste," "toxic materials,"
"contamination," and/or "pollution" within the meaning of any
Environmental Law; provided, however, the term "Hazardous
Material" does not include (i) motor oil or gasoline contained
in or discharged from vehicles not used primarily for the
transport of motor oil or gasoline, or (ii) supplies, cleaning
materials or other items which are sold for consumer use or
typically used in the operation, maintenance and repair of
buildings containing residential space.
(4) For purposes of this subparagraph, the term
"ENVIRONMENTAL LAW" shall mean any federal, state or local
law, ordinance, rule, regulation, requirement, guideline,
code, resolution, order or decree (including consent decrees
and administrative orders) in effect on the date of this
Agreement which regulates the use, generation, handling,
storage, treatment, transportation, decontamination, clean-up,
removal, encapsulation, enclosure, abatement or disposal of
any Hazardous Material, including the Comprehensive
Environmental Response, Compensation and Liability Act, 42
U.S.C. Section 9601, et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. Sections 6901, et seq., the Toxic
Substance Control Act, 15 U.S.C. Sections 2601, et seq., the
Clean Water Act, 33 U.S.C. Sections 1251 et seq., the
Hazardous Materials Transportation Act, 49 U.S.C, Section
1802, their state analogues, and any other federal, state or
local statute, law, ordinance, resolution, code, rule,
regulation, order or decree regulating, relating to, or
imposing liability or standards of conduct concerning any
Hazardous Material.
<PAGE>
(o) UNDERGROUND STORAGE TANKS.
Except as described in Exhibit "I" attached hereto and made a part
hereof, (i) to Seller's knowledge, there are no underground storage tanks
located on the Property, (ii) Seller has not removed, or
caused to be removed, any underground storage tanks from the
Property, and (iii) to Seller's knowledge, no underground
storage tanks were removed from the Property before Seller
acquired title to the Property.
(p) NO UNRECORDED LIENS. No lender has a right to
encumber Seller's interest in the Property, or any part
thereof, except for such liens or security interests as will
be discharged on or prior to the Closing Date.
(q) LEASES. Exhibit "J" attached hereto (the "LEASE
SCHEDULE") contains a true, correct and complete description
of all leases now in effect at the Property (the "Leases"),
including the name of each tenant thereto, and further
contains, to Seller's knowledge, a true listing of the
apartment unit number and unit type, any remaining rent
waivers and other lease concessions applicable to periods from
and after the Closing Date, the gross monthly rent (stated as
gross rent and/or plus utilities, etc.) payable by each tenant
under its Lease, prepaid rent, rent delinquencies (including
an aging of any such delinquent rent), the expiration date of
each Lease, and the amount of any security deposit paid by the
tenant under each Lease. There are no Leases or other
tenancies for any space in the Property other than those set
forth on the Lease Schedule. Seller has delivered to or will
make available to Buyer true and complete copies of each Lease
described in the Lease Schedule. Except as otherwise disclosed
in the Leases, on the Lease Schedule or elsewhere in this
Agreement:
(1) each of the Leases is in full force and effect;
(2) the gross monthly rent listed opposite the name of
each tenant on the Lease Schedule is the amount actually
collected from such tenant for the month immediately preceding
the date of this Agreement and there is no arrearage in excess
of one month;
(3) the Lease Schedule, to Seller's knowledge, contains
a listing of those apartments which are vacant as of the date
hereof;
(4) none of the tenants is in default in the payment of
any of the rent or other charges payable under its Lease
(other than as disclosed on the Lease Schedule), and to
Seller's knowledge, none of the tenants is in default in any
material respect in the performance or observance of any of
the covenants or conditions to be kept, observed or performed
by it under its Lease;
(5) no renewal or extension options have been granted to
any tenant, except as set forth in such tenant's Lease;
(6) no tenant has an option to purchase the Real
Property, or any part thereof;
(7) no tenant is entitled to any rebate, concession,
deduction or offset, except as set forth in such tenant's
Lease;
(8) no tenant has paid any rent for a period of more than
30 days in advance;
(9) Except for tenant work orders, Seller has not
received from any tenant under a Lease a written notice of
default by Seller in performing any of its obligations as
landlord under such Lease and, to Seller's knowledge, Seller
<PAGE>
is not in default in any material respect in performing any of
its obligations as landlord under any of the Leases;
(10) All alterations, installations, decorations and
other work currently required to be performed by Seller, as
landlord, under the provisions of each Lease have been
completed and fully paid for, or will be completed and fully
paid for on or before the Closing Date; and
(11) Seller has not assigned, pledged, hypothecated, or
otherwise encumbered the right to collect rent under any Lease
other than pursuant to a mortgage to be released at the
Closing.
(r) CONTRACTS. Exhibit "K" attached hereto and made a
part hereof (the "CONTRACT SCHEDULE") contains a complete and
accurate list of all contracts and agreements to which Seller
is a party (or which otherwise is known to Seller and relate
to the Property) providing for the management, operation,
supply, maintenance, repair, advertising or promotion of the
Property and which, pursuant to its terms, will be in effect
as of the Closing Date (collectively, the "CONTRACTS"),
including, to Seller's knowledge, a true listing of expiration
dates, amounts payable by Seller thereunder and a description
of services or materials to be provided. Seller has delivered
or during the Due Diligence Period will make available to
Buyer true and complete copies of each of the Contracts
described on the Contract Schedule. Each of such Contracts is
in full force and effect and has not been modified or amended,
except as indicated on the Contract Schedule. Seller is not in
default of any of its monetary obligations or, to Seller's
knowledge, any of its material non-monetary obligations, under
any of the Contracts described on the Contract Schedule.
(s) EASEMENT AGREEMENTS. Exhibit "L" attached hereto and
made a part hereof (the "EASEMENT AGREEMENT SCHEDULE")
contains a complete and accurate list of all easement
agreements affecting the Property (the "EASEMENT AGREEMENTS")
now in effect, including all amendments, if any, thereto, and,
to Seller's knowledge, a true listing of the gross monthly,
quarterly or annual amount (if any) payable by the owner of
the Property to any other person who is a party to the
Easement Agreement and the gross monthly, quarterly or annual
amount (if any) payable by any other person who is a party to
the Easement Agreement to the owner of the Property. Except as
otherwise disclosed in the Easement Agreements, on the
Easement Agreement Schedule or elsewhere in this Agreement:
(1) each of the Easement Agreements is in full force and
effect; and<PAGE>
(2) neither Seller nor, to Seller's knowledge, any of the
other parties to the Easement Agreements is in default (beyond
any grace period provided by such Easement Agreement) in the
payment of any amount payable by it under the Easement
Agreement, and neither Seller nor, to Seller's knowledge, any
of such parties is in default in the performance or observance
of any of the other covenants or conditions to be kept,
observed or performed by it under the Easement Agreement.
(t) MANAGEMENT AGREEMENT. On the Closing Date, there will
be no contract or agreement in effect for the management of
the Property.
(u) LEASING COMMISSIONS. No commission, fee or other
compensation is payable (or will, with the passage of time or
occurrence of any event or both, be payable), with respect to
any Lease, and there are no leasing commissions, fees or other
compensation payable in respect of renewals of the Leases.
There does not currently exist any exclusive or continuing
leasing or brokerage agreements as to any of the space covered
by the Leases or as to any space in the Property.
B. Representations and Warranties of Buyer. Buyer hereby
represents and warrants to Seller as follows:
(a) ORGANIZATION. Buyer is a limited partnership duly
formed, validly existing and in good standing under the laws
of the State of Delaware.
(b) AUTHORIZATION. The requisite number of the partners
of Buyer required by Buyer's partnership agreement has
authorized the execution and delivery of this Agreement and,
as of the end of the Due Diligence Period will have authorized
the transactions contemplated hereby.
(c) NO CONFLICTING AGREEMENTS. The execution and delivery
by Buyer of, and the performance and compliance by Buyer with
the terms and provisions of, this Agreement do not violate any
of the terms, conditions or provisions of (i) Buyer's
partnership agreement, (ii) any judgment, order, injunction,
decree, regulation or ruling of any court or other
governmental authority to which Buyer is subject, or (iii) any
agreement or contract, any other agreement or contract to
which Buyer is a party.
(d) APPROVALS. No authorization, consent, order, approval
or license from, filing with, or other act by any
governmental authority or other person is or will be necessary
to permit the valid execution and delivery by Buyer of this
Agreement or the performance by Buyer of the obligations to be
performed by it under this Agreement; provided, however, the
performance by Buyer of its obligations to close the
<PAGE>
transactions hereunder shall be dependent on Buyer electing to
proceed upon the expiration of the Due Diligence Period as
provided in paragraph 4B hereof.
(e) ABSENCE OF BANKRUPTCY. Neither Buyer nor any partner
of Buyer has commenced (within the meaning of any bankruptcy
law) a voluntary case, consented to the entry of an order for
relief against it in an involuntary case, or consented to the
appointment of a custodian of it or for all or any substantial
part of its property, nor has a court of competent
jurisdiction entered an order or decree under any bankruptcy
law that is for relief against Buyer or any of its partners in
an involuntary case or appoints a custodian of Buyer or any of
its partners or for all or any substantial part of its or
their property.
C. SURVIVAL. Any cause of action of a party for a breach
of the foregoing representations, warranties or agreements set
forth herein shall survive for a one year period commencing on
the Closing Date, at which time such representations,
warranties and agreements (and any cause of action resulting
from a breach thereof not then in litigation) shall terminate.
Notwithstanding the foregoing, if Buyer shall have actual
knowledge as of the Closing Date that any of the
representations or warranties of Seller contained herein are
false or inaccurate or that Seller is in breach or default of
any of its obligations under this Agreement, and Buyer
nonetheless closes the transactions hereunder and acquires the
Property, then Seller shall have no liability or obligation
respecting such false or inaccurate representations or
warranties or other breach or default (and any cause of action
resulting therefrom shall terminate upon such closing
hereunder).
D. INTERIM COVENANTS OF SELLER. Until the Closing Date or
the sooner termination of this Agreement:
(1) Seller shall maintain the Property in the same manner
as prior hereto pursuant to its normal course of business
(such maintenance obligations not including extraordinary
capital expenditures or expenditures not incurred in such
normal course of business), subject to reasonable wear and
tear and further subject to destruction by casualty or other
events beyond the control of Seller. Seller shall give Buyer
prompt notice of any extraordinary capital expenditures or
expenditures not incurred in the ordinary course of business
which are required by any tenant, insurance company, lender,
or governmental authority and which Seller does not intend to
make prior to the Closing Date.
(2) Seller shall not enter into any additional contracts
without the prior consent of Buyer, except those deemed
<PAGE>
reasonably necessary by Seller which are cancelable on 30
days' notice.
(3) With respect to the apartment units at the Property,
Seller shall continue to offer apartment units at the Property
for lease (for terms not in excess of one year) only in
accordance with the provisions set forth in Exhibit "M"
attached hereto and made a part hereof ("LEASING GUIDELINES").
With respect to the commercial spaces at the Property, Seller
shall have the right, during the Due Diligence Period, to
enter into new leases for such spaces or to modify existing
leases. Seller shall give Buyer prior written notice of the
proposed provisions of any such new or modified leases
respecting the commercial spaces. If Buyer shall disapprove of
such new or modified commercial leases during the Due
Diligence Period, Seller shall nonetheless have the right to
enter into such new or modified leases. After the expiration
of the Due Diligence Period, Seller shall not enter into any
new leases of commercial spaces or material modifications of
existing leases of commercial spaces thereafter without the
consent of Buyer.
(4) Seller shall deliver to Buyer, (i) promptly after the
preparation thereof by Seller in a manner consistent with its
past practice (but at least as often as monthly), a summary
showing leasing activity at the Property, including new
rentals and eviction notices sent by Seller or its managing
agent, and (ii) promptly after its receipt by Seller, (A) any
written notice from a tenant claiming that Seller is in
default under such tenant's Lease or that such tenant will be
vacating its apartment unit, (B) any written notice of
violation issued by governmental authorities with respect to
the Property and (C) written notices from the service
providers under any Contracts.
(5) Seller shall notify Buyer, promptly after Seller
acquires knowledge thereof, of any facts or events which would
cause any of Seller's representations and warranties to be
untrue or incorrect in any material respect.
(6) Seller shall not voluntarily grant, create, assume or
permit to exist any mortgage, lien, lease, encumbrance,
easement, covenant, condition, right-of-way or restriction
upon the Property other than the exceptions to title to the
Property permitted by the provisions of this Agreement or as
may otherwise be required by law.
(7) Seller shall not make any commitment or incur any
liability to any labor union, through negotiations or
otherwise.
(8) Seller shall not remove any Personal Property from
<PAGE>
the Property unless the same is replaced with similar items of
equal or better quality before the Closing Date.
(9) Seller shall not enter into a contract for the sale
of the Property to any other person, whether or not such
contract is contingent on the termination of this Agreement.
(10) Seller shall perform, observe and comply with all
terms and provisions of all Easement Agreements to be
performed, observed or complied with by Seller as owner of the
Property prior to the Closing Date; provided, however, the
foregoing obligation shall be subject to the limitations on
expenditures provided for in paragraph 7D(1) hereof.
E. CANCELLATION OF CONTRACTS. Seller shall cancel, as of
the Closing Date, all Contracts designated for cancellation by
Buyer in a written notice given to Seller prior to the end of
the Due Diligence Period, provided (i) such Contracts are
capable of being so cancelled as of the Closing Date, and (ii)
Buyer pays all fees, costs or expenses as may be required in
connection with any such cancellation.
F. OBLIGATION TO CURE. Notwithstanding anything to the
contrary contained herein, if either (i) a breach or default
in Seller's representations or warranties contained in this
Agreement shall be discovered prior to the Closing Date, or
(ii) a written notice shall have been received after the end
of the Due Diligence Period but prior to the Closing Date from
a governmental authority to the effect that the Property is in
violation of applicable laws or ordinances, then Seller shall
either (x) cure such breach, default or violation or (y)
credit Buyer with an amount reasonably agreed to by Buyer and
Seller to cure such breach, default or violation; provided,
however, (i) Seller shall have no liability or obligation to
cure (or credit Buyer with the cost to cure) any breach,
default or violation, and the same shall not permit Buyer to
terminate this Agreement, unless and until the cost to cure
all such breaches, defaults or violations exceeds $10,000 in
the aggregate; (ii) Seller shall have no obligation hereunder
to expend or credit more than $75,000 in the aggregate towards
the cure of all such breaches, defaults or violations; and
(iii) Buyer shall have no obligation to close hereunder if the
applicable breaches, defaults or violations are not cured and
the cost to cure such breaches, defaults or violations shall
exceed $75,000 in the aggregate.
8. INDEMNIFICATION.
A. BY BUYER. Buyer shall hold harmless, indemnify and
defend Seller from and against: (1) any and all third party
claims for Buyer's torts or breaches of contract related to
the Property and occurring on or after the Closing Date, (2)
<PAGE>
any and all loss, damage or third party claims in any way
arising from Buyer's inspections or examinations of the
Property prior to the Closing Date; and (3) all costs and
expenses, including reasonable attorney's fees, incurred by
Seller as a result of the foregoing.
B. BY SELLER. Seller shall hold harmless, indemnify and
defend Buyer from and against: (1) any and all third party
claims for Seller's torts or breaches of contract related to
the Property and occurring prior to the Closing Date; and (2)
all costs and expenses, including reasonable attorney's fees,
incurred by the Buyer as a result of such claims. The
foregoing indemnity shall not cover any matters relating to
title or marketability of the Property (Buyer relying on the
coverage provided by the Owner's Policy and the special
warranty of title contained in the Deed as to such
matters). C. GENERALLY. Each indemnification under this
Agreement shall be subject to the following provisions: The
indemnitee shall notify indemnitor of any such claim against
indemnitee within 30 days after it has notice of such claim,
but failure to notify indemnitor shall in no case prejudice
the rights of indemnitee under this Agreement unless
indemnitor shall be prejudiced by such failure and then only
to the extent of such prejudice. Should indemnitor fail to
discharge or undertake to defend indemnitee against such
liability within 10 days after the indemnitee gives the
indemnitor written notice of the same, then indemnitee may
settle such liability, and indemnitor's liability to
indemnitee shall be conclusively established by such
settlement the amount of such liability to include both the
settlement consideration and the reasonable costs and
expenses, including attorneys' fees, incurred by indemnitee in
effecting such settlement.
9. REMEDIES FOR FAILURE TO CLOSE: DISPOSITION OF DEPOSIT.
(A) BUYER'S RIGHT TO RETURN OF DEPOSIT. IF THE
TRANSACTION HEREIN PROVIDED SHALL NOT BE CLOSED BY REASON OF
SELLER'S DEFAULT UNDER THIS AGREEMENT OR THE FAILURE OF
SATISFACTION OF THE CONDITIONS DESCRIBED IN PARAGRAPH 4 HEREOF
OR THE TERMINATION OF THIS AGREEMENT IN ACCORDANCE WITH
PARAGRAPH 6 HEREOF, AND BUYER SHALL NOT HAVE DEFAULTED UNDER
THIS AGREEMENT, THEN THE ESCROW DEPOSIT SHALL BE RETURNED TO
BUYER, AND NEITHER PARTY SHALL HAVE ANY FURTHER OBLIGATION OR
LIABILITY TO THE OTHER.
(B) BUYER'S SPECIFIC PERFORMANCE RIGHTS AND RIGHTS TO
REIMBURSEMENT OF COSTS. IF THE TRANSACTIONS HEREUNDER SHALL
FAIL TO CLOSE SOLELY BY REASON OF A MATERIAL DEFAULT BY SELLER
(INCLUDING, BUT NOT LIMITED TO, A MATERIAL OMISSION OR UNTRUTH
IN THE REPRESENTATIONS AND WARRANTIES SET FORTH IN PARAGRAPH
<PAGE>
7A (2 ) HEREOF EXISTING AS OF THE CLOSING DATE), AND BUYER
SHALL HAVE FULLY PERFORMED ITS OBLIGATIONS HEREUNDER AND SHALL
BE READY, WILLING AND ABLE TO CLOSE, THEN BUYER SHALL BE
ENTITLED TO EITHER (1) TERMINATE THIS AGREEMENT, RECEIVE A
RETURN OF THE ESCROW DEPOSIT AND TO OBTAIN REIMBURSEMENT FROM
SELLER FOR BUYER'S ACTUAL OUT-OF-POCKET EXPENSES PAID TO
UNAFFILIATED THIRD PARTIES IN CONNECTION WITH ITS DUE
DILIGENCE REVIEWS HEREUNDER (SUCH REIMBURSEMENT OBLIGATION NOT
TO EXCEED $75,000 IN THE AGGREGATE OR (2) SPECIFICALLY ENFORCE
THIS AGREEMENT.
(C) BUYERS RIGHTS TO LIQUIDATED DAMAGES. IF THE
TRANSACTIONS HEREUNDER SHALL FAIL TO CLOSE SOLELY BY REASON OF
SELLER'S DEFAULT IN ITS OBLIGATION TO DELIVER ANY OF THE
CONVEYANCING DOCUMENTS SPECIFIED IN PARAGRAPHS 5B(1) (a), (b),
(c), (d), (e), (f), (g), (h), (k) and (m) HEREOF, AND BUYER
SHALL HAVE FULLY PERFORMED ITS OBLIGATIONS HEREUNDER AND SHALL
BE READY, WILLING AND ABLE TO CLOSE, THEN BUYER SHALL HAVE THE
RIGHT EITHER TO (1) SPECIFICALLY ENFORCE SUCH OBLIGATION OR
(2) TERMINATE THIS AGREEMENT, RECEIVE A RETURN OF TEE DEPOSIT
AND CAUSE SELLER TO PAY BUYER AN AMOUNT EQUAL TO $500,000 AS
LIQUIDATED DAMAGES IN SUCH EVENT (SUCH AMOUNT BEING PAYABLE
ONLY IN THE EVENT SPECIFICALLY SET FORTH IN THIS SENTENCE AND
NOT BY REASON OF ANY OTHER DEFAULT OR BREACH HEREUNDER BY
SELLER). BUYER HEREBY ACKNOWLEDGES THAT EXCEPT AS SPECIFICALLY
SET FORTH IN THIS PARAGRAPH 9, NO ACTION FOR DAMAGES OR
OTHERWISE SHALL BE PERMITTED.
D. SELLER'S RIGHTS TO ESCROW DEPOSIT. IN THE EVENT THE
TRANSACTION HEREIN PROVIDED SHALL NOT CLOSE SOLELY BY REASON
OF BUYER'S DEFAULT, THEN THE ESCROW DEPOSIT SHALL BE DELIVERED
TO SELLER AS FULL COMPENSATION AND AS LIQUIDATED DAMAGES UNDER
AND IN CONNECTION WITH THIS AGREEMENT.
E. GENERAL. IN THE EVENT THE TRANSACTION HEREIN PROVIDED
SHALL CLOSE, THE ESCROW DEPOSIT SHALL BE APPLIED AS A PARTIAL
PAYMENT OF THE PURCHASE PRICE. IN CONNECTION WITH THE MATTERS
SPECIFIED HEREIN, THE PARTIES RECOGNIZE THAT SELLER WILL INCUR
EXPENSE IN CONNECTION WITH THE TRANSACTION CONTEMPLATED BY
THIS AGREEMENT AND THAT THE PROPERTY WILL BE REMOVED FROM THE
MARKET; FURTHER, THAT IT IS EXTREMELY DIFFICULT AND
IMPRACTICABLE TO ASCERTAIN THE EXTENT OF DETRIMENT TO A PARTY
CAUSED BY THE BREACH BY THE OTHER PARTY UNDER THIS AGREEMENT
AND THE FAILURE OF THE CONSUMMATION OF THE TRANSACTION
CONTEMPLATED BY THIS AGREEMENT OR THE AMOUNT OF COMPENSATION
SELLER SHOULD RECEIVE AS A RESULT OF BUYER'S BREACH OR
DEFAULT. IN THE EVENT THE SALE OF THE PROPERTY SHALL NOT BE
CONSUMMATED ON ACCOUNT OF BUYER'S DEFAULT, THEN THE RETENTION
OF THE ESCROW DEPOSIT SHALL BE SELLER'S SOLE AND EXCLUSIVE
REMEDIES UNDER THIS AGREEMENT BY REASON OF SUCH DEFAULT,
SUBJECT TO THE PROVISIONS OF PARAGRAPH 10I HEREOF. IF THE SALE
OF THE PROPERTY SHALL NOT BE CONSUMMATED ON ACCOUNT OF
SELLER'S DEFAULT, THEN THE PROVISIONS SET FORTH IN
SUBPARAGRAPHS 9A, 9B AND 9C HEREOF SHALL BE BUYER'S SOLE AND
EXCLUSIVE REMEDIES UNDER THIS AGREEMENT BY REASON OF SUCH
DEFAULT, SUBJECT TO THE PROVISIONS OF PARAGRAPH 10I HEREOF
BKE
- - ---------------- ----------------------
Sellers Initials Buyer's Initials
10. MISCELLANEOUS.
A. BROKERS.
(1) Except as provided in subparagraph (2) below, Seller
represents and warrants to Buyer, and Buyer represents and
warrants to Seller, that no broker or finder has been engaged
by it, respectively, in connection with any of the
transactions contemplated by this Agreement or to its
knowledge is in any way connected with any of such
transactions. In the event of a claim for broker's or
finder's fee or commissions in connection herewith, then
Seller shall indemnify and defend Buyer from the same if it
shall be based upon any statement or agreement alleged to have
been made by Seller, and Buyer shall indemnify and defend
Seller from the same if it shall be based upon any statement
or agreement alleged to have been made by Buyer. The
indemnification obligations under this paragraph 10 A(1) shall
survive the closing of the transactions hereunder or the
earlier termination of this Agreement.
(2) If and only if the sale contemplated herein closes,
Seller agrees to pay a brokerage commission to Richard Ellis,
LLC ("BROKER") pursuant to a separate written agreement.
B. LIMITATION OF LIABILITY.
(1) Notwithstanding anything to the contrary contained
herein, if the closing of the transactions hereunder shall
have occurred (and Buyer shall not have waived, relinquished
or released any applicable rights in further limitation), the
aggregate liability of Seller arising pursuant to or in
connection with the representations, warranties,
indemnifications, covenants or other obligations (whether
express or implied) of Seller under this Agreement (or any
document executed or delivered in connection herewith) shall
not exceed $625,000. Without limitation on the foregoing in no
event shall Seller have any liability for damages hereunder
other than for actual damages (and in no event shall Seller
have any liability for consequential or contingent damages or
the like).
(2) Buyer and its successors and assigns and, without
limitation, all other persons and entities, shall look solely
to the assets of Seller or Carlyle Income Plus, Ltd., or
<PAGE>
SELLER'S DEFAULT, THEN THE PROVISIONS SET FORTH IN
SUBPARAGRAPHS 9A, 9B AND 9C HEREOF SHALL BE BUYER'S SOLE AND
EXCLUSIVE REMEDIES UNDER THIS AGREEMENT BY REASON OF SUCH
DEFAULT, SUBJECT TO THE PROVISIONS OF PARAGRAPH 10I HEREOF
MBA
- - ---------------- ----------------------
Sellers Initials Buyer's Initials
10. MISCELLANEOUS.
A. BROKERS.
(1) Except as provided in subparagraph (2) below, Seller
represents and warrants to Buyer, and Buyer represents and
warrants to Seller, that no broker or finder has been engaged
by it, respectively, in connection with any of the
transactions contemplated by this Agreement or to its
knowledge is in any way connected with any of such
transactions. In the event of a claim for broker's or
finder's fee or commissions in connection herewith, then
Seller shall indemnify and defend Buyer from the same if it
shall be based upon any statement or agreement alleged to have
been made by Seller, and Buyer shall indemnify and defend
Seller from the same if it shall be based upon any statement
or agreement alleged to have been made by Buyer. The
indemnification obligations under this paragraph 10 A(1) shall
survive the closing of the transactions hereunder or the
earlier termination of this Agreement.
(2) If and only if the sale contemplated herein closes,
Seller agrees to pay a brokerage commission to Richard Ellis,
LLC ("BROKER") pursuant to a separate written agreement.
B. LIMITATION OF LIABILITY.
(1) Notwithstanding anything to the contrary contained
herein, if the closing of the transactions hereunder shall
have occurred (and Buyer shall not have waived, relinquished
or released any applicable rights in further limitation), the
aggregate liability of Seller arising pursuant to or in
connection with the representations, warranties,
indemnifications, covenants or other obligations (whether
express or implied) of Seller under this Agreement (or any
document executed or delivered in connection herewith) shall
not exceed $625,000. Without limitation on the foregoing in no
event shall Seller have any liability for damages hereunder
other than for actual damages (and in no event shall Seller
have any liability for consequential or contingent damages or
the like).
(2) Buyer and its successors and assigns and, without
limitation, all other persons and entities, shall look solely
to the assets of Seller or Carlyle Income Plus, Ltd., or
<PAGE>
Carlyle Income Plus, L.P.-II, as general partners of Seller
(the "GENERAL PARTNERS"), for the payment of any claim or for
any performance under or in connection with this Agreement (it
being understood that the General Partners shall be fully
responsible and liable for any and all obligations and
liabilities of Seller under this Agreement). No agent of
Seller and no constituent partner in agent of any of the
General Partners, nor any advisor, trustee, director, officer,
employee, beneficiary, shareholder, participant,
representative or agent of any corporation or trust that is or
becomes a constituent partner in Seller or any of the General
Partners (including, but not limited to, Carlyle Income
Managers, Inc.) shall have any personal liability, directly or
indirectly, under or in connection with this Agreement or any
agreement made or entered into under or pursuant to the
provisions of this Agreement, or any amendment or amendments
to any of the foregoing made at any time or times, heretofore
or hereafter and Buyer, on behalf of itself and its successors
and assigns, hereby waives any and all such personal
liability. Notwithstanding anything to the contrary contained
in this Agreement, neither the negative capital account of any
constituent partner in Seller (or in any other constituent
partner of Seller), nor any obligation of any constituent
partner in Seller (or in any other constituent partner of
Seller) to restore a negative capital account or to contribute
capital to Seller (or to any other constituent partner of
Seller), shall at any time be deemed to be the property or an
asset of Seller or any such other constituent partner (and
neither Buyer nor any of its successors or assigns shall have
any right to collect, enforce or proceed against or with
respect to any such negative capital account of partner's
obligation to restore or contribute).
(3) The general partner of Buyer is a real estate
investment trust organized under Maryland law. Under the terms
of the Declaration of Trust of the general partner, all
persons dealing with the general partner shall look solely to
the trust property of the general partner for satisfaction of
claims of any nature, and no trustee, officer or agent of the
general partner shall be held to any personal liability
whatsoever, in tort, contract or otherwise.
C. ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties respecting the matters herein
set forth and supersedes all prior agreements between the
parties hereto respecting such matters. This Agreement may not
be modified or amended except by written agreement signed by
both parties.
D. TIME OF THE ESSENCE. Time is of the essence of this
Agreement.
<PAGE>
E. INTERPRETATION. Paragraph headings shall not be used
in construing this Agreement. Each party acknowledges that
such party and its counsel, after negotiation and
consultation, have reviewed and revised this Agreement. As
such, the terms of this Agreement shall be fairly construed
and the usual rule of construction, to the effect that any
ambiguities herein should be resolved against the drafting
party, shall not be employed in the interpretation of this
Agreement or any amendments, modifications or exhibits hereto
or thereto.
F. GOVERNING LAW. This Agreement shall be construed and
enforced in accordance with the laws of the Commonwealth of
Virginia.
G. SUCCESSORS AND ASSIGNS. Buyer may not assign or
transfer its rights or obligations under this Agreement
without the prior written consent of Seller (in which event
such transferee shall assume in writing all of the
transferor's obligations hereunder, but such transferor shall
not be released from its obligations hereunder); provided,
however, Buyer may assign its interest in this Agreement to a
limited partnership or other entity in which Buyer or an
affiliate of Buyer (i.e., an entity controlling, controlled by
or under common control with Buyer) has not less than a 51%
interest in capital and profits. No consent given by Seller to
any transfer or assignment of Buyer's rights or obligations
hereunder shall be construed as a consent to any other
transfer or assignment of Buyer's rights or obligations
hereunder. No transfer or assignment in violation of the
provisions hereof shall be valid or enforceable. Subject to
the foregoing, this Agreement and the terms and provisions
hereof shall inure to the benefit of and be binding upon the
successors and assigns of the parties.
H. NOTICES. Any notice which a party is required or may
desire to give the other shall be in writing and shall be sent
by personal delivery, telecopy (with overnight mail
confirmation) or by mail (either [i] by United States
registered or certified mail, return receipt requested,
postage prepaid, or [ii] by Federal Express or similar
generally recognized overnight carrier regularly providing
proof of delivery), addressed as follows (subject to the right
of a party to designate a different address for itself by
notice similarly given):
<PAGE>
TO BUYER:
c/o Washington Real Estate Investment Trust
10400 Connecticut Avenue
Concourse Level
Kensington, Maryland 20895
Attention: Ms. Mary Beth Avedesian
Vice President - Investments
WITH COPY TO:
Arent Fox Kintner Plotkin & Kahn
1050 Connecticut Avenue
Washington, D.C. 20036
Attention: Michael H. Leahy, Esq.
TO SELLER:
900 North Michigan Avenue
l9th Floor
Chicago, Illinois 60611
Attention: Mr. Brian Ellison
WITH COPIES TO:
Pircher, Nichols & Meeks
1999 Avenue of the Stars
Suite 2600
Los Angeles, California 90067
Attention: Real Estate Notices (GML)
AND TO:
Richard Ellis, LLC
Three First National Plaza
Chicago, Illinois 60602
Attention: Mr. Jeffrey M. Bramson
Any notice so given by mail shall be deemed to have been given
as of the date of delivery (whether accepted or refused)
established by U.S. Post Office return receipt or the
overnight carrier's proof of delivery, as the case may be. Any
such notice not so given shall be deemed given upon receipt of
the same by the party to whom the same is to be given.
I. LEGAL COSTS. Except as otherwise provided herein, the
parties hereto agree that they shall pay directly any and all
legal costs which they have incurred on their own behalf in
the preparation of this Agreement, all deeds and other
agreements pertaining to this transaction and that such legal
costs shall not be part of the closing costs. In addition, if
<PAGE>
either Buyer or Seller brings any suit or other proceeding
with respect to the subject matter or the enforcement of this
Agreement, the prevailing party (as determined by the court,
agency or other authority before which such suit or proceeding
is commenced), in addition to such other relief as may be
awarded, shall be entitled to recover reasonable attorneys'
fees, expenses and costs of investigation actually incurred.
The foregoing includes, but is not limited to, attorneys'
fees, expenses and costs of investigation (including, without
limitation, those incurred in appellate proceedings), costs
incurred in establishing the right to indemnification, or in
any action or participation in, or in connection with, any
case or proceeding under Chapter 7, 11 or 13 of the Bankruptcy
Code (11 United States Code Sections 101 et seq.), or any
successor statutes.
J. NONREFUNDABLE CONSIDERATION. Contemporaneously with
the execution and delivery of this Agreement, Buyer has
delivered to Seller and Seller hereby acknowledges the receipt
of cash in the amount of $100.00 ("INDEPENDENT CONTRACT
CONSIDERATION"), which amount the parties bargained for and
agreed to as consideration for Buyer's right to inspect and
purchase the Property pursuant to this Agreement and for
Seller's execution, delivery and performance of this
Agreement. The Independent Contract Consideration is in
addition to and independent of any other consideration or
payment provided in this Agreement, i8 nonrefundable, and it
is fully earned and shall be retained by Seller
notwithstanding any other provision of this Agreement.
K. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, which, taken together, shall constitute one
agreement.
L. FURTHER ASSURANCES. Each party agrees that it will, at
any time and from time to time after the Closing Date, upon
request of the other party, do, execute, acknowledge and
deliver, or will cause to be done, executed, acknowledged and
delivered, all such further acts, deeds, assignments,
transfers, conveyances and assurances as may reasonably be
required to effectuate the intent of this Agreement (provided
the same do not materially increase the costs to, or liability
or obligations of, Seller or Buyer in a manner not otherwise
provided for herein).
M. EFFECTIVE DATE. The Effective Date shall be the date
that the later to sign this Agreement executes and delivers
this Agreement, as indicated by the dates below the signatures
of the parties as set forth below.
N. SEC REQUIREMENTS. If required by rules of the
Securities and Exchange Commission, Seller grants Buyer the
<PAGE>
right, at Buyer's sole expense, to prepare an audited income
statement of the Property for the most recent fiscal year(s)
as specified by Rule 3-14 of Regulation S-X under the
Securities Act of 1933 and the Securities Exchange Act of
1934, and Seller shall reasonably cooperate, at Buyer's
expense, in making available any and all such other data and
financial information which shall be available to Seller
(including, without limitation, data and information
obtainable from Seller's management agent for the Property) in
connection with Buyer's disclosure obligations as a public
company subject to the rules and regulations of the Securities
and Exchange Commission.
O. BUSINESS DAYS. Whenever under the terms of this
Agreement the time for performance of a covenant falls upon a
Saturday, Sunday or national or Commonwealth of Virginia
holiday, such time for performance shall be extended to the
next business day.
P. SELLER CURE RIGHTS. Notwithstanding anything to the
contrary contained in this Agreement, if any condition is not
satisfied as of the Closing Date (as the same is determined
pursuant to paragraph 5 hereof) or if Seller shall be in
breach or default of any representation, warranty or covenant
hereunder, then prior to any termination of this Agreement or
exercise of any rights or remedies in connection therewith,
Seller shall have the right to cause such condition to be
satisfied or such breach or default to be cured within thirty
(30) days of the Closing Date, as the same is determined
pursuant to paragraph 5 hereof (and, in connection therewith,
Seller shall have the right to extend such Closing Date to
effectuate such cure for up to thirty (30) days but
in no event beyond October 15, 1996).
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
CIP/ASHBY PARTNERS,
an Illinois general partnership "Seller"
By: CARLYLE INCOME PLUS, LTD.,
an Illinois limited partnership,
General Partner
By: JMB REALTY CORPORATION,
a Delaware corporation,
General Partner
By: Brian K. Ellison
------------------------
Name: BRIAN K. ELLISON
------------------------
Title:Vice President
------------------------
By: CARLYLE INCOME PLUS, L.P.-II
a Delaware limited partnership,
General Partner
By: JMB REALTY CORPORATION,
a Delaware corporation,
General Partner
By: Brian K. Ellison
-------------------------
Name: BRIAN K. ELLISON
-------------------------
Title: Vice President
-------------------------
WRIT LIMITED PARTNERSHIP,
a Delaware limited partnership
By: Washington Real Estate Investment Trust,
General Partner
By:
-------------------
Name: EDMUND B. CRONIN, JR.
Title: President and Chief
Executive Officer "Buyer"
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
CIP/ASHBY PARTNERS,
an Illinois general partnership
By: CARLYLE INCOME PLUS, LTD.,
an Illinois limited partnership,
General Partner
By: JMB REALTY CORPORATION,
a Delaware corporation,
General Partner
By:
-----------------
By:
-----------------
Title:
----------------
By: CARLYLE INCOME PLUS, L.P.-II,
a Delaware limited partnership,
General Partner
By: JMB REALTY CORPORATION,
a Delaware corporation,
General Partner
By:
----------------
Name:
----------------
Title:
----------------
WRIT LIMITED PARTNERSHIP,
a Delaware limited partnership "Buyer"
By: Washington Real Estate Investment
Trust, General Partner
By: Mary Beth Avedesian
--------------------------
Name: MARY BETH AVEDESIAN
Title: Vice President,
Investments
<PAGE>
ESCROW HOLDER'S ACKNOWLEDGEMENT
-------------------------------
The undersigned hereby executes this Agreement to
evidence its agreement to act as Escrow Holder in accordance
with the terms of this Agreement.
Date: 7-22-96 TICOR TITLE INSURANCE COMPANY,
-------- a California Corporation
----------------------
By: JAMES F. SHAW
----------------------------
Name: James F. Shaw
Title: Senior Commercial Closing Officer
----------------------------------
"Escrow Holder"
<PAGE>
EXHIBIT LIST
-----------
"A" -Property Description
"B" -Personal Property
"C" -Form of Tenant Estoppel Certificate
"D" -Deed
"E" -Lease Assignment and Assumption
"F" -Contract Assignment and Assumption
"G" -Bill of Sale
"H" -Litigation Schedule
"I" -Environmental Disclosures
"J" -Lease Schedule
"K" -Contract Schedule
"L" -Easement Agreement Schedule
"M" - Leasing Guidelines
"N" - Assignment of Licenses, Intangibles and
Warranties
<PAGE>
