AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), is entered into as of the 17th
day of October, 1996, by and between GROUP ONE INVESTMENTS, INC., an Illinois
corporation ("Purchaser"), and ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ LIMITED PARTNERSHIP, an
Illinois limited partnership ("Seller").
W I T N E S S E T H:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to sell
at the price of Twenty Million, Five Hundred Ten Thousand And No/100 Dollars
($20,510,000.00) (the "Purchase Price"), that certain property commonly known
as ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, legally described
on Exhibit A attached hereto (the "Property").
The Purchase Price shall also include all of Seller's right, title and
interest in and to the following: (a) intangible property, whether enumerated
in this Agreement or not, now or subsequently used in connection with the
operation or maintenance of the Property, other than any computer software,
including but not limited to all leases, licenses and other agreements to
occupy all or any part of the Property; (b) tenant security deposits; (c) all
unexpired claims, warranties, guarantees and sureties, if any, given in
connection with the construction, improvement or equipment of or on the
Property; (d) all service contracts and management agreements for the benefit
of the Property which Purchaser agrees to assume; (e) all rights to use any
name by which the Property may be commonly called; and (f) all architectural,
engineering and construction plans, tests, reports, drawings and
specifications, if any (collectively the "Intangible Property").
The Purchase Price shall also include all right, title and interest of
Seller (a) to land, if any, lying in the bed of any street, road or avenue,
open or proposed, at the foot of or adjoining the Property to the center line
of such street, road or avenue, (b) to the use of all easements, if any,
whether of record or not, appurtenant to the Property and (c) the use of all
strips and rights-of-way, if any, abutting, adjacent to, contiguous to or
adjoining the Property (collectively the "Appurtenant Rights").
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as follows:
2.1. Upon the execution of this Agreement, the sum of One Hundred Fifty
Thousand and No/100 Dollars ($150,000.00) (the "Initial ▇▇▇▇▇▇▇ Money") to be
held in escrow by and in accordance with the provisions of the Escrow Agreement
("Escrow Agreement") attached hereto as Exhibit C; and
2.2. Upon the expiration of the "Inspection Period" (as hereinafter
defined), the sum of One Hundred Thousand and No/100 Dollars ($100,000.00) (the
"Additional ▇▇▇▇▇▇▇ Money", and, collectively with the Initial ▇▇▇▇▇▇▇ Money,
the "▇▇▇▇▇▇▇ Money") to be held in escrow by and in accordance with the
provisions of the Escrow Agreement; and
2.3 The assumption by Purchaser of Seller's obligations under the "Loan
Documents" (as hereinafter defined), being an amount equal to the outstanding
principal balance of and all accrued and unpaid interest on the "Note" (as
hereinafter defined) as of the "Closing Date" (as hereinafter defined); and
2.4 On the "Closing Date" (hereinafter defined), the balance of the
Purchase Price, adjusted in accordance with the prorations, by federally wired
"immediately available" funds, on or before 3:00 p.m. Chicago time.
3. TITLE COMMITMENT AND SURVEY.
3.1. Attached hereto as Exhibit D is a copy of a title commitment for an
owner's ALTA title insurance policy issued by Chicago Title Insurance Company
(hereinafter referred to as "Title Insurer") dated August 29, 1996 for the
Property (the "Title Commitment"), along with copies of each of the documents
referred to as numbers 5-15, inclusive, in Schedule B - Section 2 of the Title
Commitment (collectively, the "Title Exceptions"). For purposes of this
Agreement, but subject to the terms and conditions hereinafter set forth,
"Permitted Exceptions" shall mean: (a) the Title Exceptions; (b) matters shown
on the "Existing Survey" (hereinafter defined); (c) matters caused by the
actions of Purchaser; (d) the Loan Documents; and (e) the title exceptions set
forth in Schedule B - Section 2 of the Title Commitment as Numbers 3 and 4.
All other exceptions to title shall be referred to as "Unpermitted Exceptions".
Notwithstanding anything to the contrary contained herein, Purchaser shall have
ten (10) days after its receipt of a signed counterpart of this Agreement from
Seller in which to review the Title Commitment, the Title Exceptions and the
Existing Survey, and to confirm the availability of such title endorsements as
Purchaser shall require (the "Endorsements"), and to notify Seller of any
objections thereto, and the reasons for Purchaser's objection. In the event
that Purchaser fails to notify Seller of any objections thereto within the
aforesaid ten (10) day period, Purchaser shall be deemed to have approved the
Permitted Exceptions, including the Existing Survey and the Endorsements. In
the event that Purchaser does notify Seller of one or more objections to the
Title Commitment, the Title Exception, the Existing Survey and/or the
Endorsements, and the reasons for Purchaser's objection, within the aforesaid
ten (10) day period, Seller shall have ten (10) days from its receipt of
Purchaser's objection to, at its option, either (i) accept the objections, in
which case the objections shall become Unpermitted Exceptions, or (ii) reject
the objection, in which case, subject to the provisions of the immediately
following sentence, this Agreement shall become null and void without further
action of the parties, and all ▇▇▇▇▇▇▇ Money theretofore deposited into the
escrow by Purchaser, together with any interest accrued thereon, shall be
returned to Purchaser, and neither party shall have any further liability to
the other, except for Purchaser's obligation to indemnify Seller and restore
the Property, as more fully set forth in Paragraph 7. Notwithstanding the
foregoing, if Seller rejects the Purchaser's objection within the aforesaid ten
(10) day period, Purchaser shall have ten (10) days from its receipt of
Seller's rejection to withdraw its objection to the Permitted Exceptions, and
to approve the Permitted Exceptions. Absent notice from Seller that Seller is
terminating this Agreement as a result of Purchaser's objections, Seller shall
be deemed to have accepted the Purchaser's objections, and the objections shall
be deemed Unpermitted Exceptions. The Title Commitment shall be conclusive
evidence of good title as therein shown as to all matters to be insured by the
title policy, subject only to the exceptions therein stated. On the Closing
Date, Title Insurer shall deliver to Purchaser an ALTA title policy in
conformance with the previously delivered Title Commitment, with extended
coverage and including the Endorsements, subject to the Permitted Exceptions
and Unpermitted Exceptions waived by Purchaser (the "Title Policy"). Purchaser
shall pay for all of the costs of the Title Commitment and Title Policy,
including, but not limited to, any fees paid to a North Carolina attorney for
an opinion of counsel required for the Title Insurer to issue the Title Policy.
Purchaser shall also pay for all of the costs of the Endorsements, including,
but not limited to, any fees paid to a North Carolina attorney for an opinion
of counsel required for the Title Insurer to issue the Endorsements.
3.2. Purchaser has received a survey of the Property prepared by ▇▇▇▇▇ ▇.
▇▇▇▇, dated October 30, 1985, and last revised on September 11, 1995, (the
"Existing Survey"). Purchaser shall pay for all of the costs of updating the
Existing Survey, and Seller shall deliver the updated survey (the "Updated
Survey") to Purchaser within 30 days after the date hereof. The Updated Survey
shall be certified to Purchaser and the Title Insurer, shall be prepared in
accordance with the Minimum Standard Detail Requirements for ALTA/ACSM Land
Title Surveys, jointly established and adopted by ALTA and ACSM in 1992, and
shall include the following item numbers from Table A thereof: 1, 2, 3, 4, 6,
7(a) and (c), 8, 9, 10 and 11(a) - (d), or such other lesser standards
acceptable to Purchaser. The Updated Survey shall also (a) depict the location
and the dimensions of the Property and all of the improvements thereon; (b)
indicate the street address and legal description of the Property, the square
footage of the Property and all of the improvements and the number of parking
spaces, if any; (c) show all curb cuts, driveways, parking spaces, if any,
streets and alleys adjacent to the Property, and vehicular access from the
Property to said streets and alleys; (d) show the present location of all
recorded easements, visible easements, utility lines and building lines on the
Property and the location of any encroachments onto or over easements, building
lines, rights of way or any adjoining property, or onto the Property by any
adjoining property; and (e) certify whether the Property is located in an area
identified by an agency or department of the federal government as having
special flood or mudslide hazards which would require flood insurance under the
Flood Insurance Act of 1968, as amended from time to time, or under any other
applicable law or regulation. The parties agree that Purchaser shall not be
obligated to consummate the purchase of the Property unless the Updated Survey
is sufficient to enable the Title Insurer to delete the general survey
exception and to issue the Title Policy free from any survey matters, other
than those shown in the Existing Survey.
3.3. The obligation of Purchaser to pay the various costs set forth in
Paragraphs 3.1 and 3.2 shall survive the termination of this Agreement.
4. PAYMENT OF TRANSFER TAXES AND CLOSING COSTS.
4.1. Seller shall pay for all of the costs of the documentary or transfer
stamps to be paid with reference to the "Deed" (hereinafter defined) and all
other stamps, intangible, transfer, documentary, recording, sales tax and
surtax imposed by law with reference to any other sale documents delivered in
connection with the sale of the Property to Purchaser, other than those
pertaining to the Loan Documents. Costs relating to the Loan Documents shall
be deemed to be "Lender Consent Costs" (as hereinafter defined), and shall be
governed by the provision set forth in Paragraph 25.
4.2. Purchaser and Seller shall each pay for one-half of all escrow and
other closing fees charged by the Title Insurer in connection with closing the
subject transaction, other than those costs set forth in Paragraph 3.1 and 4.1.
5. CONDITION OF TITLE.
5.1. If, prior to "Closing" (as hereinafter defined), a date-down to the
Title Commitment or the delivery of the Updated Survey discloses any new
Unpermitted Exception, Seller shall have thirty (30) days from the date of the
date-down to the Title Commitment or the delivery of the Updated Survey, as
applicable, at Seller's expense, to bond over, cure and/or have any Unpermitted
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
Unpermitted Exceptions. In such event, the time of Closing shall be delayed,
if necessary, to give effect to said aforementioned time period, it being
understood that Purchaser shall not be obligated to close prior to the
expiration of the aforementioned time period, unless Seller has bonded over,
cured and or had the Unpermitted Exceptions removed from the Title Commitment
or had the Title Insurer commit to insure against loss or damage that may be
accessed by such Unpermitted Exceptions. If Seller fails to cure or have said
Unpermitted Exceptions removed or have the Title Insurer commit to insure as
specified above within said thirty (30) day period, Purchaser may, at its
option, either (a) terminate this Agreement upon notice to Seller within five
(5) days after the expiration of said thirty (30) day period; or (b) consummate
the subject transaction, in which case Purchaser shall be entitled to a credit
at closing equal to the sum of all Unpermitted Exceptions of a definite or
ascertainable amount. Absent notice from Purchaser to Seller that it has
elected to terminate this Agreement, Purchaser shall be deemed to have elected
to take title subject to said Unpermitted Exceptions, and shall be entitled to
the aforesaid credit at closing. If Purchaser terminates this Agreement in
accordance with the terms of this Paragraph 5.1, this Agreement shall become
null and void without further action of the parties, and all ▇▇▇▇▇▇▇ Money
theretofore deposited into the escrow by Purchaser, together with any interest
accrued thereon, shall be returned to Purchaser, and neither party shall have
any further liability to the other, except for Purchaser's obligation to
indemnify Seller and restore the Property, as more fully set forth in Paragraph
7.
5.2. Seller agrees to convey fee simple title to the Property to
Purchaser or its nominee by special warranty deed (the "Deed") in recordable
form subject only to the Permitted Exceptions and any Unpermitted Exceptions
waived by Purchaser.
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
6.1. Except as provided in the indemnity provisions contained in
Paragraph 7.1 of this Agreement, Seller shall bear all risk of loss with
respect to the Property up to the earlier of the dates upon which either
possession or title is transferred to Purchaser in accordance with this
Agreement. Notwithstanding the foregoing, in the event of damage to the
Property by fire or other casualty prior to the Closing Date, repair of which
would cost less than or equal to $100,000.00 (as determined by Seller in good
faith) Purchaser shall not have the right to terminate its obligations under
this Agreement by reason thereof, but Seller shall have the right to elect to
either repair and restore the Property (in which case the Closing Date shall be
extended until 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. Seller shall promptly notify Purchaser in writing of any such fire
or other casualty and Seller's determination of the cost to repair the damage
caused thereby. In the event of damage to the Property by fire or other
casualty prior to the Closing Date, repair of which would cost in excess of
$100,000.00 (as determined by Seller in good faith), then this Agreement may be
terminated at the option of Purchaser, which option shall be exercised, if at
all, by Purchaser's written notice thereof to Seller within five (5) business
days after Purchaser receives written notice of such fire or other casualty and
Seller's determination of the amount of such damages, and upon the exercise of
such option by Purchaser this Agreement shall become null and void, the ▇▇▇▇▇▇▇
Money deposited by Purchaser shall be returned to Purchaser together with
interest thereon, and neither party shall have any further liability or
obligations hereunder. In the event that Purchaser does not exercise the
option set forth in the preceding sentence, the Closing shall take place on the
Closing Date and Seller shall assign and transfer to Purchaser on the Closing
Date all of Seller's right, title and interest in and to all insurance proceeds
paid or payable to Seller on account of the fire or casualty.
6.2. Subject to the provisions hereinafter set forth in this Section 6.2,
if between the date of this Agreement and the Closing Date, any condemnation or
eminent domain proceedings are initiated which might result in the taking of
any part of the Property or the taking or closing of any right of access to the
Property, Seller shall immediately notify Purchaser of such occurrence, and
provide Purchaser with copies of any documentation received by Seller in
connection therewith (collectively, the "Condemnation Notice"). In the event
that the taking of any part of the Property shall: (a) materially impair access
to the Property; (b) 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 (c) 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 ▇▇▇▇▇▇▇ Money deposited by Purchaser, together with interest thereon,
shall be returned to Purchaser and all rights and obligations of the parties
hereunder with respect to the closing of this transaction will cease; or
(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.
Notwithstanding anything to the contrary contained in this Section 6.2,
the parties hereto acknowledge that the Department of Transportation of
Mecklenburg County, North Carolina, Case 96-CVS 6875 seeks to condemn a portion
of the Property for the widening of Providence Road (the "Providence Road
Condemnation"), and agree that (a) any condemnation award relating to the
Providence Road Condemnation shall be credited to Purchaser by Seller at
closing, if Seller has already received the benefit of such award, or (b)
Seller shall assign to Purchaser at closing all of Seller's right, title and
interest in and to the condemnation award relating to the Providence Road
Condemnation.
6.3. Purchaser shall then notify Seller, within five (5) business days
after Purchaser's receipt of the Condemnation Notice, whether Purchaser elects
to exercise its rights under Paragraph 6.2(i) or Paragraph 6.2(ii). Closing
shall be delayed, if necessary, until Purchaser makes such election. If
Purchaser fails to make an election within such five (5) business day period,
Purchaser shall be deemed to have elected to exercise its rights under
Paragraph 6.2(ii). If between the date of this Agreement and the Closing Date,
any condemnation or eminent domain proceedings are initiated which do not
constitute a Material Event, Purchaser shall be required to proceed with the
Closing, in which event Seller shall assign to Purchaser all of Seller's right,
title and interest in and to any award made in connection with such
condemnation or eminent domain proceedings.
7. INSPECTION AND AS-IS CONDITION.
7.1. During the period commencing on the date hereof and ending at 5:00
p.m. Chicago time on October 30, 1996 (said period being herein referred to as
the "Inspection Period"), Purchaser and the agents, engineers, employees,
contractors and surveyors retained by Purchaser may enter upon the Property, at
any reasonable time and upon reasonable prior notice to Seller, to inspect the
Property, including a review of leases located at the Property, and to conduct
and prepare such studies, tests and surveys as Purchaser may deem reasonably
necessary and appropriate, including, but not limited to, any appraisals,
engineering, environmental and other due diligence studies, tests and surveys.
In connection with Purchaser's review of the Property, Seller agrees to deliver
to Purchaser actual and complete copies of the current rent roll for the
Property, the most recent tax and insurance bills, utility account numbers,
service contracts, the Existing Survey, and unaudited year end 1995 and year to
date (through August 30, 1996) operating statements. Furthermore, to the
extent that any of the following items are (a) in the possession of Seller or
the "Asset Manager" (as hereinafter defined), or (b) readily available to
Seller or the Asset Manager, Seller shall deliver to Purchaser actual and
complete copies of the following:
(i) unaudited year end 1993 and 1994 operating statements;
(ii) all licenses, permits, authorizations and approvals issued to Seller
by all governmental authorities having jurisdiction over the Property;
(iii) the most recent bills for water charges and other utilities,
together with proof of payment;
(iv) the insurance loss history report, including all insurance claims and
settlements relating to the Property within the past three (3) years;
(v) petitions for appeal of property taxes and/or assessments for the
Property which have been contested by Seller over the immediately preceding
three (3) year period and the results thereof;
(vi) all "as built" plans and specifications for the improvements and
copies of all reports or studies relating to the engineering, environmental
conditions, physical conditions and/or operation of the Property;
(vii) the most recent termite report for the Property;
(viii) any operations and maintenance plan or plans implemented for the
Property by Seller; and
(ix) any other information that Purchaser shall reasonably request.
All of the foregoing tests, investigations and studies to be conducted
under this Paragraph 7.1 by Purchaser shall be at Purchaser's sole cost and
expense, and Purchaser shall restore the Property to the condition existing
prior to the performance of such tests or investigations by or on behalf of
Purchaser. Purchaser shall defend, indemnify and hold Seller and any
affiliate, parent of Seller, and all shareholders, employees, officers and
directors of Seller or Seller's affiliate or parent (hereinafter collectively
referred to as "Affiliate of Seller") harmless from any and all liability, cost
and expense (including without limitation, reasonable attorney's fees, court
costs and costs of appeal) suffered or incurred by Seller or Affiliates of
Seller for injury to persons or property caused by Purchaser's investigations
and inspection of the Property. Purchaser shall undertake its obligation to
defend set forth in the preceding sentence using attorneys (x) selected by
Purchaser, and (y) reasonably acceptable to Seller.
Prior to commencing any such tests, studies and investigations, Purchaser
shall furnish to Seller a certificate of insurance evidencing comprehensive
general public liability insurance insuring the person, firm or entity
performing such tests, studies and investigations and listing Seller and
Purchaser as additional insureds thereunder.
If, for any reason, Purchaser is dissatisfied with the results of the
tests, studies or investigations performed or information received pursuant to
this Paragraph 7.1, Purchaser shall have the right to terminate this Agreement
by giving written notice of such termination to Seller at any time prior to the
expiration of the Inspection Period. If written notice is not received by
Seller pursuant to this Paragraph 7.1 prior to the expiration of the Inspection
Period, then the right of Purchaser to terminate this Agreement pursuant to
this Paragraph 7.1 shall be waived. If Purchaser terminates this Agreement by
written notice to Seller prior to the expiration of the Inspection Period, (i)
Purchaser shall promptly deliver to Seller copies of all studies, reports and
other investigations obtained by Purchaser in connection with its due diligence
during the Inspection Period; and (ii) the Initial ▇▇▇▇▇▇▇ Money deposited by
Purchaser shall be immediately paid to Purchaser, together with any interest
earned thereon, and neither Purchaser nor Seller shall have any right,
obligation or liability under this Agreement, except for Purchaser's obligation
to indemnify Seller and restore the Property, as more fully set forth in this
Paragraph 7.1. Notwithstanding anything contained herein to the contrary, the
terms of this Paragraph 7.1, shall survive the Closing and the delivery of the
Deed and termination of this Agreement.
Upon the expiration of the Inspection Period, unless Purchaser has elected
to terminate this Agreement in accordance with the provisions of the Escrow
Agreement, Purchaser shall deposit the Additional ▇▇▇▇▇▇▇ Money with Title
Insurer.
7.2. Seller or Seller's predecessor-in-interest acquired title to the
Property by foreclosure (or deed-in-lieu thereof) and, therefore, Seller can
make no representations or warranties relating to the condition of the Property
except as may otherwise be specifically set forth in this Agreement. Purchaser
acknowledges and agrees that, except with respect to the representations and
warranties contained herein, it will be purchasing the Property based solely
upon its inspections and investigations of the Property, and that Purchaser
will be purchasing the 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 have made any representations or warranties of any kind upon
which Purchaser is relying as to any matters concerning the Property,
including, but not limited to, the condition of the land or any improvements
comprising the Property, the existence or non-existence of "Hazardous
Materials" (as hereinafter defined), economic projections or market studies
concerning the Property, any development rights, taxes, bonds, covenants,
conditions and restrictions affecting the Property, water or water rights,
topography, drainage, soil, subsoil of the Property, the utilities serving the
Property or any zoning or building laws, rules or regulations or "Environmental
Laws" (hereinafter defined) affecting the Property. Seller makes no
representation or warranty that the Property complies with Title III of the
Americans with Disabilities Act or any fire code or building code. Except with
respect to a breach by Seller of any representation or warranty expressly
contained herein, Purchaser hereby releases Seller and the Affiliates of Seller
from any and all liability in connection with any claims which Purchaser may
have against Seller or the Affiliates of Seller, and Purchaser hereby agrees
not to assert any claims for contribution, cost recovery or otherwise, against
Seller or the Affiliates of Seller, relating directly or indirectly to the
existence of asbestos or Hazardous Materials on, or environmental conditions
of, the Property, whether known or unknown. As used herein, "Environmental
Laws" means all federal, state and local statutes, codes, regulations, rules,
ordinances, orders, standards, permits, licenses, policies and requirements
(including consent decrees, judicial decisions and administrative orders)
relating to the protection, preservation, remediation or conservation of the
environment or worker health or safety, all as amended or reauthorized, or as
hereafter amended or reauthorized, including without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), 42 U.S.C. Section 9601 et seq., the Resource Conservation and
Recovery Act of 1976 ("RCRA"), 42 U.S.C. Section 6901 et seq., the Emergency
Planning and Community Right-to-Know Act ("Right-to-Know Act"), 42 U.S.C.
Section 11001 et seq., the Clean Air Act ("CAA"), 42 U.S.C. Section 7401
et seq., the Federal Water Pollution Control Act ("Clean Water Act"), 33 U.S.C.
Section 1251 et seq., the Toxic Substances Control Act ("TSCA"), 15 U.S.C.
Section 2601 et seq., the Safe Drinking Water Act ("Safe Drinking Water Act"),
42 U.S.C. Section 300f et seq., the Atomic Energy Act ("AEA"), 42 U.S.C.
Section 2011 et seq., the Occupational Safety and Health Act ("OSHA"),
29 U.S.C. Section 651 et seq., and the Hazardous Materials Transportation Act
(the "Transportation Act"), 49 U.S.C. Section 1802 et seq. As used herein,
"Hazardous Materials" means: (1) "hazardous substances," as defined by CERCLA;
(2) "hazardous wastes," as defined by RCRA; (3) any radioactive material
including, without limitation, any source, special nuclear or by-product
material, as defined by AEA; (4) asbestos in any form or condition; (5)
polychlorinated biphenyls; and (6) any other material, substance or waste to
which liability or standards of conduct may be imposed under any Environmental
Laws. Notwithstanding anything contained herein to the contrary, the terms of
this Paragraph 7.2 shall survive the Closing and the delivery of the Deed and
termination of this Agreement.
7.3. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller owned the Property. Seller makes no representation or
warranty that such material is complete or accurate or that Purchaser will
achieve similar financial or other results with respect to the operations of
the Property, it being acknowledged by Purchaser that Seller's operation of the
Property and allocations of revenues or expenses may be vastly different than
Purchaser may be able to attain. Purchaser acknowledges that it is a
sophisticated and experienced purchaser of real estate and further that
Purchaser has relied upon its own investigation and inquiry with respect to the
operation of the Property and the representations and warranties of Seller
expressly contained herein, and releases Seller and the Affiliates of Seller
from any liability with respect to such historical information, except with
respect to a breach of a representation or warranty of Seller contained herein.
Notwithstanding anything contained herein to the contrary, the terms of this
Paragraph 7.3 shall survive the Closing and the delivery of the Deed and
termination of this Agreement.
7.4. Seller has provided to Purchaser the following existing reports: (a)
Construction Acquisitions Report dated July 30, 1985, (b) the Environmental
Site Evaluation dated August 14, 1990 prepared by Environmental Risk
Consultants, Inc., (c) the Update Phase I Environmental Site Assessment dated
December 10, 1992 prepared by Law Engineering, Inc. and Law Environmental, and
(d) the Architectural/Engineering Assessment Phase One Environmental Assessment
dated July 17, 1995 prepared by Omni Associates, Inc. (collectively, the
"Existing Report"). Except as expressly set forth herein, Seller makes no
representation or warranty concerning the accuracy or completeness of the
Existing Report. Purchaser hereby releases Seller and the Affiliates of Seller
from any liability whatsoever with respect to the Existing Report, including,
without limitation, the matters set forth in the Existing Report, and the
accuracy and/or completeness of the Existing Report, except with respect to a
breach of a representation or warranty of Seller contained herein.
Furthermore, Purchaser acknowledges that it will be purchasing the Property
with all faults disclosed in the Existing Report. Notwithstanding anything
contained herein to the contrary, the terms of this Paragraph 7.4 shall survive
the Closing and the delivery of the Deeds and termination of this Agreement.
8. CLOSING. Subject to the provisions set forth below and subject to the
provisions of Paragraph 25 below, the closing of this transaction (the
"Closing") shall be on December 2, 1996 (the "Closing Date"), at the loop
office of Title Insurer, Chicago, Illinois, at which ▇▇▇▇ ▇▇▇▇▇▇ shall deliver
possession of the Property to Purchaser. This transaction shall be closed
through an escrow with Title Insurer, in accordance with the general provisions
of the usual and customary form of deed and money escrow for similar
transactions in Chicago, Illinois, or at the option of either party, the
Closing shall be a "New York style" closing at which the Purchaser shall wire
the Purchase Price to Title Insurer on the Closing Date and prior to the
release of the Purchase Price to Seller, Purchaser shall receive the Title
Policy or marked up commitment dated the date of the Closing Date. In the
event of a New York style closing, Seller shall deliver to Title Insurer any
customary affidavit in connection with a New York style closing. All closing
and escrow fees shall be divided equally between the parties hereto.
Simultaneously with the execution of this Agreement, Seller and Purchaser
have entered into a separate agreement for the sale of certain other property
(the "Other Property"). The conveyance of the Other Property shall occur
simultaneously with the Closing on the Closing Date through an escrow with
Title Insurer, and neither party shall be obligated to consummate the closing
if the closing on the Other Property does not occur simultaneously.
9. CLOSING DOCUMENTS.
9.1. On or prior to the Closing Date, Seller and Purchaser shall execute
and deliver to one another a joint closing statement. In addition, (a)
Purchaser shall deliver in Escrow to Title Insurer the balance of the Purchase
Price and an assumption of the documents set forth in Paragraph 9.2.3 and 9.2.4
hereof, and (b) Purchaser and Seller shall each execute and deliver in Escrow
to the Title Insurer such other documents as may be reasonably required by the
Title Insurer in order to consummate the transaction as set forth in this
Agreement and allow the Title Insurer to issue the Endorsements, including, but
not limited to: (i) an ALTA Statement; (ii) a GAP Undertaking; (iii) complete
state, county and local transfer tax declarations, to the extent applicable;
and (iv) all applicable partnership and corporate resolutions and/or
certificates of existence.
9.2. On the Closing Date, Seller shall deliver to Purchaser the
following:
9.2.1. the Deed (in the form of Exhibit E attached hereto),
subject to Permitted Exceptions and those Unpermitted Exceptions waived by
Purchaser;
9.2.2. Intentionally Deleted;
9.2.3. assignment and assumption of intangible property (in the form
attached hereto as Exhibit G), including, without limitation, any warranties,
certificates, licenses, permits and existing termite bonds and the service
contracts listed in Exhibit H;
9.2.4. an assignment and assumption of leases and security deposits
(in the form attached hereto as Exhibit I);
9.2.5. non-foreign affidavit (in the form of Exhibit J attached
hereto);
9.2.6. original, and/or copies of, leases affecting the Property in
Seller's possession (which shall be delivered at the Property);
9.2.7. keys to the improvements;
9.2.8. possession of the Property to Purchaser, subject to the terms
of leases;
9.2.9. evidence of the termination of the management agreement;
9.2.10. notice to the tenants of the Property of the transfer of
title and assumption by Purchaser of the landlord's obligation under the leases
and the obligation to refund the security deposits (in the form of Exhibit K);
and
9.2.11. an updated rent roll, certified by Seller as being actual
and complete.
10. PURCHASER'S DEFAULT. ALL ▇▇▇▇▇▇▇ MONEY DEPOSITED INTO THE ESCROW IS TO
SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND UNDERTAKINGS
UNDER THIS AGREEMENT. IN THE EVENT OF A DEFAULT OF THE PURCHASER UNDER THE
PROVISIONS OF THIS AGREEMENT, SELLER SHALL RETAIN ALL OF THE ▇▇▇▇▇▇▇ MONEY AND
THE INTEREST THEREON AS SELLER'S SOLE RIGHT TO DAMAGES OR ANY OTHER REMEDY,
EXCEPT FOR PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER AND RESTORE THE PROPERTY
AS SET FORTH IN PARAGRAPH 7.1 HEREOF. THE PARTIES HAVE AGREED THAT SELLER'S
ACTUAL DAMAGES, IN THE EVENT OF A DEFAULT BY PURCHASER, WOULD BE EXTREMELY
DIFFICULT OR IMPRACTICAL TO DETERMINE. THEREFORE, BY PLACING THEIR INITIALS
BELOW, THE PARTIES ACKNOWLEDGE THAT THE ▇▇▇▇▇▇▇ MONEY HAS BEEN AGREED UPON,
AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES.
11. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF ALL ▇▇▇▇▇▇▇ MONEY,
TOGETHER WITH ANY INTEREST ACCRUED THEREON, PLUS ACTUAL DOCUMENTED THIRD PARTY
EXPENSES PAID OR INCURRED BY PURCHASER IN CONNECTION WITH THIS AGREEMENT, BUT
NOT TO EXCEED THE AMOUNT OF THE ▇▇▇▇▇▇▇ MONEY ON DEPOSIT WITH THE ESCROW AGENT
AT THE TIME OF DEFAULT, AND THIS AGREEMENT SHALL THEN BECOME NULL AND VOID AND
OF NO EFFECT AND THE PARTIES SHALL HAVE NO FURTHER LIABILITY TO EACH OTHER AT
LAW OR IN EQUITY, EXCEPT FOR PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER AND
RESTORE THE PROPERTY AS SET FORTH MORE FULLY IN PARAGRAPH 7. NOTWITHSTANDING
ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF SELLER'S DEFAULT IS ITS WILLFUL
REFUSAL TO DELIVER THE DEED, THEN PURCHASER WILL BE ENTITLED TO ▇▇▇ FOR
SPECIFIC PERFORMANCE.
12. PRORATIONS.
12.1. Rents (exclusive of delinquent rents, but including prepaid rents);
refundable security deposits and, if applicable under the laws of the State of
North Carolina, interest thereon (which will be assigned to and assumed by
Purchaser and credited to Purchaser at Closing); water and other utility
charges; fuels; prepaid operating expenses; real and personal property taxes,
operating expenses which are reimbursable by the tenants for the period prior
to the Closing Date less any amount previously paid by the Tenants shall be
credited to Seller; and other similar items shall be adjusted ratably as of
11:59 p.m. on the Closing Date, and credited against 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. In addition, subject to
the provisions of Paragraph 25 below, Purchaser shall give Seller a credit at
closing for all escrows, reserves and holdbacks held by the lender under the
Loan Documents, which escrows, reserves and holdbacks shall be assigned to
Purchaser. All prorations will be final except as to delinquent rent referred
to in Paragraph 12.2 below.
12.2. All basic rent paid following the Closing Date by any tenant of the
Property who is indebted under a lease for basic rent for any period prior to
and including the Closing Date, after the payment to Purchaser of all current
basic rent, shall be deemed a "Post-Closing Receipt" until such time as all
such indebtedness is paid in full. Within ten (10) days following each receipt
by Purchaser of a Post-Closing Receipt, Purchaser shall pay such Post-Closing
Receipt to Seller. Purchaser shall use its best efforts to collect all amounts
which, upon collection, would constitute Post-Closing Receipts hereunder.
Within 120 days after the Closing Date, Purchaser shall deliver to Seller a
reconciliation statement of Post-Closing Receipts through 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 and upon the
verification of additional funds owing to Seller, Purchaser shall pay to Seller
said additional Post-Closing Receipts and the cost of performing Seller's
audit. Paragraph 12.2 of this Agreement shall survive the Closing and the
delivery and recording of the deed.
13. RECORDING. Neither this Agreement nor a memorandum thereof shall be
recorded and the act of recording by Purchaser shall be an act of default
hereunder by Purchaser and subject to the provisions of Paragraph 10 hereof.
14. ASSIGNMENT. The Purchaser shall not have the right to assign its interest
in this Agreement without the prior written consent of the Seller. Any
assignment or transfer of, or attempt to assign or transfer, Purchaser's
interest in this Agreement shall be an act of default hereunder by Purchaser
and subject to the provisions of Paragraph 10 hereof. Notwithstanding the
foregoing, Purchaser may assign its interest in this Agreement without the
consent of Seller to any entity in which Purchaser's principals or Purchaser's
nominee owns a controlling interest, provided that Purchaser remains liable for
and the assignee assumes the obligations of Purchaser hereunder.
15. BROKER. The parties hereto represent and warrant that no broker
commission or finder fee is due and payable in connection with this transaction
other than to (a) CB Commercial Real Estate Group ("Seller's Broker") (to be
paid by Seller) and (b) to First Group Properties ("Purchaser's Broker") (to be
paid by Purchaser). Seller's commission to Seller's Broker shall only be
payable out of the proceeds of the sale of the Property in the event the
transaction set forth herein closes, and Purchaser's commission to Purchaser's
Broker shall only be payable in the event that the transaction set forth herein
closes. Purchaser and Seller shall indemnify, defend and hold the other party
hereto harmless from any claim whatsoever (including without limitation,
reasonable attorney's fees, court costs and costs of appeal) from anyone
claiming by or through the indemnifying party any fee, commission or
compensation on account of this Agreement, its negotiation or the sale hereby
contemplated, other than to Seller's Broker or to Purchaser's Broker. The
indemnifying party shall undertake its obligations set forth in this Paragraph
15 using attorneys selected by the indemnifying party and reasonably acceptable
to the indemnified party. The provisions of this Paragraph 15 will survive the
Closing and delivery of the Deed.
16. REPRESENTATIONS AND WARRANTIES.
16.1. Any reference herein to Seller's knowledge or notice of any matter
or thing shall only mean such knowledge or notice that has actually been
received by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, the manager of the Property (the
"Asset Manager", and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and the Asset Manager are collectively
referred to as the "Seller's Representative"), and any representation or
warranty of the Seller is based upon those matters of which the Seller's
Representative has actual knowledge. Any knowledge or notice given, had or
received by any of Seller's agents, servants or employees shall not be imputed
to Seller, the general partner or limited partners of Seller, the subpartners
of the general partner or limited partners of Seller or Seller's
Representative.
16.2. Subject to the limitations set forth in Paragraph 16.1, Seller
hereby makes the following representations and warranties, which
representations and warranties are made to Seller's knowledge and which shall
be remade at Closing, subject to Paragraph 16.5: (a) Seller has no knowledge
of any pending or threatened litigation, claim, cause of action or
administrative proceeding concerning the Property; (b) Seller has the power to
execute and deliver this Agreement and consummate the transactions contemplated
herein; (c) the rent roll attached hereto as Exhibit M, which Seller will
update as of the Closing Date, is actual and complete as of the date set forth
thereon, (d) the Seller has not given or suffered any assignment, pledge or
encumbrance with respect to any of the tenant leases or its interests
thereunder except as additional collateral for the existing loan secured by the
Property; (e) except as may be set forth in the Existing Report, Seller has not
received any notice from any governmental authority having jurisdiction over
the Property of any uncured violation of any building, zoning or Environmental
Law with respect to the Property, Seller has no knowledge of the existence of
any environmental or engineering reports, other than the Existing Report; (f)
there are and shall be no liens, claims or unpaid taxes against Seller and/or
applicable to the Property for federal withholding taxes or state sales,
retailor occupation or unemployment taxes, or any other taxes or charges
whatsoever, except general real estate taxes and special assessments, if any,
which are not yet due and payable, and Seller shall obtain all appropriate
releases and make all necessary filings required under applicable law; (g)
Seller's Representative has not received any notice from any insurance company
of any defects or inadequacies in the Property which might adversely affect the
insurability of the Property; (h) no fact or condition exists to Seller's
knowledge which would result in the termination of access to the Property from
any adjoining public or private streets or ways or which would result in
discontinuation of adequate sewer, water, gas, electric, telephone or other
utility service; (i) Seller has no knowledge of any pending or threatened
special taxes or assessments with respect to the Property, or any proposed
increase in the assessed valuation of the Property for real estate tax
purposes; (j) Seller has no knowledge of any representations made to the
tenants of the Property relating to repairs, alterations and/or other matters
which will not have been performed or otherwise satisfied to Purchaser's
reasonable satisfaction prior to the Closing Date; (k) neither this Agreement,
nor anything required to be done under this Agreement, violates or shall
violate any contract, agreement or instrument to which Seller is a party or
which affects the Property or any part thereof, and the sale, conveyance or
assignment of the Property contemplated under this Agreement does not require
the consent of any party, other than Lender, which has not been obtained, and
(l) there are no contracts that Purchaser must assume, other than the Service
Contracts.
16.3. Purchaser hereby represents and warrants to Seller that
Purchaser has the full right, power and authority to execute and deliver this
Agreement and consummate the transactions contemplated herein.
16.4. If at any time after the execution of this Agreement, either
Purchaser or Seller become aware of information which makes a representation
and warranty contained in this Agreement to become untrue in any material
respect, said party shall promptly disclose said information to the other party
hereto. Provided the party making the representation or warranty did not take
any deliberate actions to cause the representation or warranty in question to
become untrue in any material respect, said party shall not be in default under
this Agreement, and the sole remedy of the other party shall be to terminate
this Agreement. Notwithstanding anything contained herein to the contrary, if
the status of any of the tenancies changes from the date of the rent roll
attached hereto and the date of the rent roll delivered at Closing, provided
the change in status is not caused by a breach of Seller's covenants contained
in Paragraph 16.6 herein, then Purchaser shall not have the right to terminate
this Agreement or make any claim for a breach of a representation or warranty
hereunder involving the rent roll or tenancies thereunder. Purchaser and
Seller are prohibited from making any claims against the other party hereto
after the Closing with respect to any breaches of the other party's
representations and warranties contained in this Agreement that the claiming
party has actual knowledge of prior to the Closing.
16.5. The parties agree that the representations and warranties
contained herein shall survive 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).
16.6. Seller covenants to operate and manage the Property in the same
manner that it has managed, maintained and operated the Property during the
period of Seller's ownership, including the maintenance of the current tenant
rental qualification standards, subject to reasonable wear and tear and
casualty. Seller further covenants that with respect to security deposits and
delinquent rents, after the date of this Agreement, none of the security
deposits shall be applied by Seller to delinquent rents, unless such tenant
shall have vacated the Property or been evicted from the Property prior to the
Closing Date.
17. LIMITATION OF LIABILITY.
17.1. Neither Seller nor Affiliate of Seller, nor any of their
respective beneficiaries, shareholders, partners, officers, directors, agents
or employees, heirs, successors or assigns shall have any personal liability of
any kind or nature for or by reason of any matter or thing whatsoever under, in
connection with, arising out of or in any way related to this Agreement and the
transactions contemplated herein, and Purchaser hereby waives for itself and
anyone who may claim by, through or under Purchaser any and all rights to ▇▇▇
or recover on account of any such alleged personal liability.
17.2. Notwithstanding anything contained herein to the contrary,
Purchaser hereby agrees that the maximum aggregate liability of Seller, in
connection with, arising out of or in any way related to a breach by Seller
under this Agreement or any document or conveyance agreement in connection with
the transaction set forth herein after the Closing, shall be $150,000 (or
$250,000, if Purchaser has made the Additional ▇▇▇▇▇▇▇ Money Deposit).
Purchaser hereby waives for itself and anyone who may claim by, through or
under Purchaser any and all rights to ▇▇▇ or recover from Seller any amount
greater than $150,000 (or $250,000, if Purchaser has made the Additional
▇▇▇▇▇▇▇ Money Deposit).
17.3. Seller further agrees not to distribute $250,000 of the proceeds
of the Purchase Price to its partners for the longer of (a) ninety (90) days
after the Closing and (b) final resolution of any claims by Purchaser and
asserted in writing against Seller prior to the expiration of the ninety (90)
days after the Closing in accordance with the terms of this Agreement
("Claims"); provided, however, that if any Claims are disputed by Seller,
Seller shall have the right, by written notice to Purchaser, to require
Purchaser to file suit in a court of competent jurisdiction within thirty (30)
days after such notice to Purchaser; otherwise said notice with respect to the
Claim in question shall no longer prevent Seller from distributing the
proceeds, and further provided that, at the end of the ninety (90) day period,
Seller shall be entitled to distribute all proceeds of the Purchase Price in
excess of the aggregate amount of the Claims theretofore made in writing by
Purchaser.
18. TIME OF ESSENCE. Time is of the essence of this Agreement.
19. NOTICES. Any notice or demand which either party hereto is required or
may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by overnight courier
such as Federal Express, by facsimile transmission or made by United States
registered or certified mail addressed as follows:
TO SELLER: ▇/▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
with copies to: The Balcor Company
Bannockburn Lake Office Plaza
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (FAX)
and to: ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (FAX)
TO PURCHASER: Group One Investments, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (FAX)
and one copy to: Much, Shelist, Freed, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, P.C.
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (FAX)
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be
deemed to be delivered or made on the next business day if sent by overnight
courier, or the same day as given if sent by facsimile transmission and
received by 5:00 p.m. Chicago time or on the 4th business day after the same is
deposited in the United States Mail as registered or certified matter,
addressed as above provided, with postage thereon fully prepaid. Any such
notice, demand or document not given, delivered or made by registered or
certified mail, by overnight courier or by facsimile transmission as aforesaid
shall be deemed to be given, delivered or made upon receipt of the same by the
party to whom the same is to be given, delivered or made. Copies of all
notices shall be served upon the Escrow Agent.
20. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute two
(2) copies of this Agreement and three (3) copies of the Escrow Agreement and
forward them to Seller for execution, accompanied with the ▇▇▇▇▇▇▇ Money
payable to the Escrow Agent set forth in the Escrow Agreement. Seller will
forward one (1) copy of the executed Agreement to Purchaser and will forward
the following to the Escrow Agent:
(A) Initial ▇▇▇▇▇▇▇ Money;
(B) One (1) fully executed copy of this Agreement; and
(C) Three (3) copies of the Escrow Agreement signed by the parties with a
direction to execute two (2) copies of the Escrow Agreement and deliver a fully
executed copy to each of the Purchaser and the Seller.
21. GOVERNING LAW. The provisions of this Agreement shall be governed by the
laws of the State of North Carolina, except that with respect to the retainage
of the ▇▇▇▇▇▇▇ Money as liquidated damages the laws of the State of Illinois
shall govern.
22. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties and supersedes all other negotiations, understandings and
representations made by and between the parties and the agents, servants and
employees.
23. COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.
24. CAPTIONS. Paragraph titles or captions contained herein are inserted as a
matter of convenience and for reference, and in no way define, limit, extend or
describe the scope of this Agreement or any provision hereof.
25. ASSUMPTION OF LOAN. The Property is currently encumbered by that certain
Multifamily Deed of Trust, Assignment of Rents and Security Agreement (the
"Mortgage") by Seller to Berkshire Mortgage Finance Limited Partnership (the
"Lender"), dated as of September 15, 1995, which secures that certain
Multifamily Note (the "Note") made by Seller in favor of Lender in the original
principal amount of Seventeen Million Dollars ($17,000,000.00), that certain
Replacement Reserve and Security Agreement by and between Lender and Seller,
dated September 15, 1995 (the "Replacement Reserve Agreement"), and that
certain Completion/ Repair and Security Agreement by and between Lender and
Seller, dated September 15, 1995 (the "Completion Reserve Agreement", and the
Mortgage, the Note, the Replacement Reserve Agreement, the Completion Reserve
Agreement, together with all other documents or instruments entered into in
connection with the Mortgage and the Note, are hereinafter referred to as the
"Loan Documents"). Seller has delivered to Purchaser copies of the Note, the
Mortgage, the Replacement Reserve Agreement and the Completion Reserve
Agreement. In addition, within ten (10) business days of the date hereof,
Seller shall provide Purchaser with a list of all escrows, reserves and
holdbacks held by Lender under the Loan Documents.
The parties acknowledge that, in accordance with the terms of the
Completion Reserve Agreement, as heretofore amended, Seller is obligated to
complete the repairs described on Exhibit N attached hereto (the "Repairs") on
or before October 31, 1996 (the "Deadline"). Seller covenants and agrees that
it shall diligently pursue the completion of the Repairs at all times after the
execution of this Agreement and that it shall use its best efforts to complete
the Repairs prior to the Closing. In the event that Seller completes the
Repairs to the satisfaction of Lender prior to the Closing, Seller shall be
entitled to receive all remaining "Collateral Account Funds" (as defined in the
Completion Reserve Agreement). In the event that a portion, but not all, of
the Repairs have been completed prior to Closing (a) Seller shall use its best
efforts to have Lender extend the Deadline to a date that is acceptable to
Purchaser, (b) Seller shall be entitled to receive that portion of the
Collateral Account Funds attributable to the Repairs that have been completed,
as determined by Lender, (c) Seller shall assign all of its right, title and
interest in the remaining Collateral Account Funds (after its receipt of the
funds described in (b) above) (the "Remaining Collateral Funds"), to Purchaser
at the time of Closing, without any credit to the Purchase Price, and (d)
Purchaser shall assume the obligation of completing the Repairs, as required by
the Loan Documents. Purchaser and Seller agree to "reprorate" the cost of
completing the Repairs within thirty (30) days of the completion of the
Repairs, as follows. Upon the completion of the Repairs, Purchaser shall
advise Seller in writing of (a) the actual amount spent by Purchaser to
complete the Repairs (the "Repair Cost"), and (b) the amount of the Remaining
Collateral Funds disbursed to Purchaser pursuant to the Completion Reserve
Agreement, and shall provide evidence of same to Seller. In the event that the
Repair Cost exceeds the Remaining Collateral Funds, Seller shall pay said
excess amount to Purchaser, and in the event that the Remaining Collateral
Funds exceed the Repair Cost, Purchaser shall pay said excess amount to Seller,
in either event, within thirty (30) days after the aforesaid notice is sent by
Purchaser to Seller. The parties' agreement to reprorate as set forth in this
paragraph shall survive closing.
Notwithstanding anything contained in this Agreement to the contrary,
Purchaser and Seller agree that the obligation of each party to consummate the
transactions contemplated by this Agreement are contingent upon the occurrence
of the following on or before the Closing Date (collectively, the "Lender's
Conditions Precedent"): (a) Lender consenting, in writing, to (i) the
assumption by Purchaser of Seller's obligations under the Loan Documents on
terms reasonably acceptable to Purchaser and (ii) a release by Lender of Seller
from any liability under the Loan Documents (together, the "Lender Consent"),
and (b) Lender's executing and delivering to Seller and Purchaser an estoppel
letter stating that there are no defaults under the Loan Documents, and listing
all escrows, reserves and holdbacks held by Lender under the Loan Documents
(the "Estoppel"), which Estoppel may, at Lender's option, be incorporated into
the terms of the Lender Consent. Purchaser acknowledges that for purposes of
this Agreement, the Lender Consent shall be deemed reasonable if it provides
(x) for the assumption by Purchaser of Seller's obligations under the Loan
Documents on terms and conditions which do not expand the existing obligations
under the Loan Documents, and (y) the aggregate costs charged by Lender for
giving the Lender consent do not exceed the sum of (i) an assumption fee in a
maximum amount of one percent (1%) of the outstanding principal balance of the
Note (the "Assumption Fee"), (ii) a $3,000 non-refundable application fee, and
(iii) the reasonable out-of-pocket costs and expenses of the Lender incurred in
connection with the assumption, to the extent such costs and expenses exceed
$3,000 (said costs are hereinafter collectively referred to as the "Lender
Consent Costs"). The Lender Consent Costs shall be apportioned between Seller
and Purchaser as follows: (1) Seller shall pay the Assumption Fee; (2)
Purchaser shall pay the next $3,000 of the Lender Consent Costs; (3) Seller
shall pay the next $3,000 of the Lender Consent Costs after the payment
described in (2) above; and (4) all other Lender Consent Costs shall be shared
equally between Seller and Purchaser. Purchaser agrees to promptly commence
and diligently pursue obtaining the Lender Consent and the Estoppel. Purchaser
shall keep Seller advised of and allow Seller to participate in the process of
obtaining the Lender Consent and the Estoppel, and Seller agrees to cooperate
with Purchaser in Purchaser's efforts to obtain the Lender Consent and the
Estoppel.
Purchaser shall immediately notify Seller upon the satisfaction of the
Lender's Conditions Precedent. Subject to the provisions of the last sentence
of this paragraph, if Purchaser is unable to satisfy the Lender's Conditions
Precedent on or before the Closing Date, then this Agreement shall be
terminated. If this Agreement is terminated in accordance with the immediately
preceding sentence, then (i) Purchaser shall promptly deliver to Seller copies
of all studies, reports and other investigations obtained by Purchaser in
connection with its due diligence during the Inspection Period; (ii) the
▇▇▇▇▇▇▇ 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. Notwithstanding anything to the
contrary contained herein, either party shall have the right to extend the
Closing Date for up to an additional thirty (30) days, if necessary, in order
to satisfy the Lender's Conditions Precedent, which right shall be exercised by
providing written notice of same to the other prior to the Closing Date.
Provided that the Lender's Conditions Precedent are satisfied, at the
Closing (a) Purchaser shall assume all of Seller's obligations under the Loan
Documents and (b) Seller shall be released from any liability under the Loan
Documents. In connection therewith, Purchaser and Seller agree to execute
customary and necessary documents reflecting such assumption and such release
reasonably required by the Lender and reasonably acceptable to Purchaser and
Seller.
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date first set forth above.
PURCHASER:
GROUP ONE INVESTMENTS, INC., an Illinois
corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name:
-----------------------------------
Its: President
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SELLER:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ LIMITED
PARTNERSHIP, an Illinois limited partnership
By: Balcor Current Income Partners-85, Inc., an
Illinois corporation, its general partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
------------------------------------
Name:
------------------------------------
Its: President
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Providence Square
of CB Commercial Real Estate ("Seller's Broker") executed
this Agreement in its capacity as a real estate broker and acknowledges that
the fee or commission due it from Seller as a result of the transaction
described in this Agreement is as set forth in that certain Listing Agreement,
dated __, 199_ between Seller and Seller's Broker (the "Listing Agreement").
Seller's Broker also acknowledges that payment of the aforesaid fee or
commission is conditioned upon the Closing and the receipt of the Purchase
Price by the Seller. Seller's Broker agrees to deliver a receipt to the Seller
at the Closing for the fee or commission due Seller's Broker and a release, in
the appropriate form, stating that no other fees or commissions are due to it
from Seller or Purchaser.
CB COMMERCIAL GROUP REAL ESTATE
By:
-----------------------------------
Providence Square
of First Group Properties ("Purchaser's Broker")
executed this Agreement in its capacity as a real estate broker and
acknowledges that the fee or commission due it from Purchaser as a result of
the transaction described in this Agreement is as set forth in that certain
__________________, dated __, 199_ between Purchaser and Purchaser's Broker.
Purchaser's Broker also acknowledges that payment of the aforesaid fee or
commission is conditioned upon the Closing and the receipt of the Purchase
Price by the Seller. Purchaser's Broker agrees to deliver a receipt to the
Purchaser at the Closing for the fee or commission due Purchaser's Broker and a
release, in the appropriate form, stating that no other fees or commissions are
due to it from Seller or Purchaser.
FIRST GROUP PROPERTIES
By:
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Exhibits
A - Legal
B - Intentionally Deleted
C - Escrow Agreement
D - Title Commitment
E - Deed
F - Intentionally Deleted
G - Assignment and Assumption of Intangible Property
H - Service Contracts
I - Assignment and Assumption of Leases and Security Deposits
J - Non-Foreign Affidavit
K - Notice to Tenants
L - Intentionally Deleted
M - Rent Roll
N - Repair Items