AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), is entered into as of the 22nd
day of May, 1997, by and between Continental Realty Advisors, Ltd., a Colorado
corporation and Signet Partners, a Colorado corporation, or their permitted
assigns ("Purchaser"), and Chandler Investors, 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 Ten Million Eight Hundred Thousand and No/100 Dollars
($10,800,000.00) (the "Purchase Price"), that certain property commonly known
as Briarwood Place Apartments, Chandler, Arizona, legally described on
Exhibit A attached hereto (the "Property"). Included in the Purchase Price is
all of the personal property set forth on Exhibit B attached hereto (the
"Personal Property").
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as follows:
2.1. Upon the execution of this Agreement, the sum of One Hundred
Thousand and No/100 Dollars ($100,000.00) (the "▇▇▇▇▇▇▇ Money") to be held in
escrow by and in accordance with the provisions of the Escrow Agreement
("Escrow Agreement") attached hereto as Exhibit C (the ▇▇▇▇▇▇▇ Money shall be a
credit against the Purchase Price payable at Closing); and
2.2. 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 11:00 a.m Chicago time.
3. TITLE COMMITMENT AND SURVEY.
3.1. Attached hereto as Exhibit D is a copy of a title commitment for an
owner's standard title insurance policy issued by First American Title
Insurance Company (hereinafter referred to as "Title Insurer") dated February
25, 1997 for the Property (the "Title Commitment"). For purposes of this
Agreement, "Permitted Exceptions" shall mean: (a) general real estate taxes,
association assessments, special assessments, special district taxes and
related charges not yet due and payable; (b) matters shown on the "Existing
Survey" (hereinafter defined); (c) matters caused by the actions of Purchaser;
(d) matters shown on the Condemnation Documents (as hereinafter defined) or
otherwise related to the Condemnation Action (as hereinafter defined); and (e)
the title exceptions set forth in Schedule B of the Title Commitment as Letter
A, and Numbers 1 through 13 inclusive, to the extent that same affect the
Property. All other exceptions to title shall be referred to as "Unpermitted
Exceptions". The Title Commitment shall be conclusive evidence of good title
as therein shown as to all matters to be insured by the title policy, subject
only to the exceptions therein stated. On the Closing Date, Title Insurer
shall deliver to Purchaser a standard title policy in conformance with the
previously delivered Title Commitment, subject to Permitted Exceptions and
Unpermitted Exceptions waived by Purchaser (the "Title Policy"). Seller and
Purchaser shall each pay for half of the costs of the Title Commitment and
Title Policy, and Purchaser shall pay for the cost of any endorsements to, or
extended coverage on, the Title Policy. Notwithstanding any provision of this
Agreement to the contrary, Seller shall convey all of the Personal Property to
Purchaser free and clear of all liens, claims and encumbrances.
3.2. Purchaser has received a survey of the Property prepared by D.N.A.,
Inc. Civil Engineering / Land Surveying dated May 28, 1996 (the "Existing
Survey"). Seller and Purchaser shall each pay for one-half 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, provided,
however, that Purchaser shall have no obligation to pay its one-half of such
costs in the event that Purchaser terminates this Agreement pursuant to the
terms hereof, or in the event that Seller defaults hereunder.
4. PAYMENT OF CLOSING COSTS. In addition to the costs set forth in
Paragraphs 3.1 and 3.2, Purchaser and Seller shall each pay for one-half of the
costs of the documentary or transfer stamps to be paid with reference to the
"Deed" (hereinafter defined), all other stamps, intangible, transfer,
documentary, recording, sales tax and surtax imposed by law with reference to
any other sale documents delivered in connection with the sale of the Property
to Purchaser, and all other charges of the Title Insurer in connection with
this transaction, the Escrow Agreement and the Closing.
5. CONDITION OF TITLE.
5.1. If, prior to "Closing" (as hereinafter defined), a date-down to the
Title Commitment, the Existing Survey, or the Updated Survey discloses any new
Unpermitted Exception, Seller shall have thirty (30) days from the date of the
date-down to the Title Commitment or the Updated Survey, as applicable, at
Seller's expense, to (i) bond over, cure and/or have any Unpermitted Exceptions
which, in the aggregate, do not exceed $100,000.00 (a "Minor Unpermitted
Exception"), removed from the Title Commitment or to have the Title Insurer
commit to insure against loss or damage that may be occasioned by such
Unpermitted Exceptions, or (ii) have the right, but not the obligation, to bond
over, cure and/or have any Unpermitted Exceptions which, in the aggregate,
equal or exceed $100,000.00, removed from the Title Commitment or to have the
Title Insurer commit to insure against loss or damage that may be occasioned by
such Unpermitted Exceptions. In such event, the time of Closing shall be
delayed, if necessary, to give effect to said aforementioned time periods. If
Seller fails to cure or have said Unpermitted Exception removed or have the
Title Insurer commit to insure as specified above within said thirty (30) day
period or if Seller elects not to exercise its rights under (ii) in the
preceding sentence, Purchaser may terminate this Agreement upon notice to
Seller within five (5) days after the expiration of said thirty (30) day
period. In the event Seller elects not to exercise its right under clause (ii)
of this Paragraph 5.1, and if Purchaser, as a result of the Unpermitted
Exception which Seller has elected not to cure, terminates this Agreement, then
Seller shall, immediately upon demand by Purchaser, reimburse purchaser for all
documented third-party costs and expenses incurred by Purchaser in connection
with this Agreement, up to a maximum of $25,000. Such third party costs shall
include, without limitation, fees and expenses payable by Purchaser to its
legal counsel, costs of third-party, tests and investigations obtained by
Purchaser in its examination of the Property, and travel expenses incurred by
Purchaser and its employees and agents in connection with Purchaser's
examination of the Property. Absent notice from Purchaser to Seller of
Purchaser's election to terminate this Agreement as a result of an Unpermitted
Exception, Purchaser shall be deemed to have elected to take title subject to
said Unpermitted Exception. If Purchaser terminates this Agreement in
accordance with the terms of this Paragraph 5.1, this Agreement shall become
null and void without further action of the parties and all ▇▇▇▇▇▇▇ 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, and Seller's obligation to reimburse Seller for expenses as set forth in
this Paragraph 5.1 above.
5.2. Seller agrees to convey fee simple title to the Property to
Purchaser by special warranty deed (the "Deed") in recordable form subject only
to the Permitted Exceptions and any Unpermitted Exceptions waived by Purchaser.
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, either Seller or Purchaser
may elect to proceed to Closing in which case Purchaser shall receive an
assignment and transfer on the Closing Date of 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. If between the date of this Agreement and the Closing Date, any
condemnation or eminent domain proceedings are initiated, other than the
Condemnation Action, which might result in the taking of any part of the
Property or the taking or closing of any right of access to the Property,
Seller shall immediately notify Purchaser of such occurrence. In the event
that the taking of any part of the Property shall: (i) materially impair access
to the Property; (ii) cause any material non-compliance with any applicable
law, ordinance, rule or regulation of any federal, state or local authority or
governmental agencies having jurisdiction over the Property or any portion
thereof; or (iii) materially and adversely impair the use of the Property as it
is currently being operated (hereinafter collectively referred to as a
"Material Event"), Purchaser may:
6.2.1. 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
6.2.2. proceed with the Closing, in which event Seller shall assign
to Purchaser all of Seller's right, title and interest in and to any award made
in connection with such condemnation or eminent domain proceedings.
6.3. Purchaser shall then notify Seller, within five (5) business days
after Purchaser's receipt of Seller's notice, whether Purchaser elects to
exercise its rights under Paragraph 6.2.1 or Paragraph 6.2.2. Closing shall be
delayed, if necessary, until Purchaser makes such election. If Purchaser fails
to make an election within such five (5) business day period, Purchaser shall
be deemed to have elected to exercise its rights under Paragraph 6.2.2. If
between the date of this Agreement and the Closing Date, any condemnation or
eminent domain proceedings are initiated which do not constitute a Material
Event, Purchaser shall be required to proceed with the Closing, in which event
Seller shall assign to Purchaser all of Seller's right, title and interest in
and to any award made in connection with such condemnation or eminent domain
proceedings.
6.4. If there is a Material Event and Purchaser elects to exercise its
rights under Paragraph 6.2.2, or if there is a condemnation or eminent domain
proceeding which does not constitute a Material Event, then, in either event,
(i) until expiration of the Inspection Period (as hereinafter defined) Seller
shall notify Purchaser of all communications and negotiations with the
governmental authority that initiated the condemnation or eminent domain
proceeding, and of all developments in the eminent domain or condemnation
litigation, if any, but shall not be required to obtain Purchaser's consent to
any settlement or condemnation award; and (ii) after expiration of the
Inspection Period, Seller shall continue to keep Purchaser informed as
described in clause (i), and Seller shall not agree to any settlement or
condemnation award without Purchaser's prior written consent.
6.5. Notwithstanding any other terms and provisions of this Agreement, the
Condemnation Action shall not constitute a Material Event giving rise to
Purchaser's right to terminate as set forth in Paragraph 6.2.1 above except in
the event that there is a material adverse change in said Condemnation Action
which occurs after the termination of the Inspection Period and prior to
Closing. Notwithstanding the immediately preceding sentence, until the Closing
Date (as hereinafter defined), Seller shall notify Purchaser of all
communications and negotiations from the date hereof with the governmental
authority that initiated the Condemnation Action, and of all developments in
the Condemnation Action, if any, and shall not agree to any settlement or
condemnation award with respect to the Condemnation Action without Purchaser's
prior written consent which consent shall not be unreasonably withheld or
delayed.
7. INSPECTION AND AS-IS CONDITION.
7.1. During the period commencing on the date of this Agreement and
ending at 5:00 p.m. Chicago time on the date which is forty-five days following
the date hereof (said period being herein referred to as the "Inspection
Period"), Purchaser and the agents, engineers, employees, contractors and
surveyors retained by Purchaser may enter upon the Property, at any reasonable
time and upon reasonable prior notice to Seller, to inspect the Property,
including a review of leases located at the Property, and to conduct and
prepare such studies, tests and surveys as Purchaser may deem reasonably
necessary and appropriate. In connection with Purchaser's review of the
Property, Seller agrees to deliver to Purchaser copies of the current rent roll
for the Property, the most recent tax and insurance bills, utility account
numbers, service contracts, and unaudited year end 1995, 1996 and year-to-date
1997 operating statements. In addition, Purchaser shall have complete access,
during normal business hours, at the on-site management office of the Property,
to all business records of every type and description, maintained by Seller and
by Seller's management company with respect to the Property. Purchaser and
Purchaser's agents shall have the right, at Purchaser's expense, to review,
inspect and copy such business records (provided that if Purchaser elects to
terminate this Agreement prior to the expiration of the Inspection Period as
provided below, then Purchaser shall return to Seller all copies of the
business records of Seller and Seller's management company that Purchaser shall
have made).
All of the foregoing tests, investigations and studies to be conducted
under this Paragraph 7.1 by Purchaser shall be at Purchaser's sole cost and
expense and Purchaser shall restore the Property to the condition existing
prior to the performance of such tests or investigations by or on behalf of
Purchaser. Purchaser shall defend, indemnify and hold Seller and any
affiliate, parent of Seller, and all shareholders, employees, officers and
directors of Seller or Seller's affiliate or parent (hereinafter collectively
referred to as "Affiliate of Seller") harmless from any and all liability, cost
and expense (including without limitation, reasonable attorney's fees, court
costs and costs of appeal) suffered or incurred by Seller or Affiliates of
Seller for injury to persons or property caused by Purchaser's investigations
and inspection of the Property. Purchaser shall undertake its obligation to
defend set forth in the preceding sentence using attorneys selected by Seller,
in Seller's sole discretion.
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 Purchaser is dissatisfied with the results of the tests, studies or
investigations performed or information received or reviewed pursuant to this
Paragraph 7.1, including, without limitation, the Existing Survey, the Updated
Survey, the Title Commitment or the Condemnation Action, Purchaser shall have
the right, at Purchaser's unrestrained discretion, to terminate this Agreement
at any time prior to the expiration of the Inspection Period. If Purchaser is
satisfied with the results of its due diligence during the Inspection Period,
Purchaser shall give written notice to Seller and Escrow Agent that Purchaser
has elected not to exercise its termination rights hereunder. If such written
notice is not received by Seller pursuant to this Paragraph 7.1 prior to the
expiration of the Inspection Period, then Purchaser shall be deemed to have
elected to terminate this Agreement as of the end of the Inspection Period in
which case the ▇▇▇▇▇▇▇ 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.
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
or the Personal Property. Purchaser acknowledges and agrees that it will be
purchasing the Property and the Personal Property based solely upon its
inspections and investigations of the Property and the Personal Property, and
that Purchaser will be purchasing the Property and the Personal Property "AS
IS" and "WITH ALL FAULTS", based upon the condition of the Property and the
Personal Property as of the date of this Agreement, wear and tear and loss by
fire or other casualty or condemnation excepted. Without limiting the
foregoing, Purchaser acknowledges that, except as may otherwise be specifically
set forth elsewhere in this Agreement, neither Seller nor its consultants,
brokers or agents have made any representations or warranties of any kind upon
which Purchaser is relying as to any matters concerning the Property or the
Personal Property, including, but not limited to, the condition of the land or
any improvements comprising the Property, the existence or non-existence of
"Hazardous Materials" (as hereinafter defined), economic projections or market
studies concerning the Property, any development rights, taxes, bonds,
covenants, conditions and restrictions affecting the Property, water or water
rights, topography, drainage, soil, subsoil of the Property, the utilities
serving the Property or any zoning or building laws, rules or regulations or
"Environmental Laws" (hereinafter defined) affecting the Property. Seller
makes no representation or warranty that the Property complies with Title III
of the Americans with Disabilities Act or any fire code or building code.
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 and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Except as otherwise set forth in
Paragraph 16.2 of this Agreement, Seller makes no representation or warranty
that such material is complete or accurate or that Purchaser will achieve
similar financial or other results with respect to the operations of the
Property, it being acknowledged by Purchaser that Seller's operation of the
Property and allocations of revenues or expenses may be vastly different than
Purchaser may be able to attain. Purchaser acknowledges that it is a
sophisticated and experienced purchaser of real estate and further that
Purchaser has relied upon its own investigation and inquiry with respect to the
operation of the Property and releases Seller and the Affiliates of Seller from
any liability with respect to such historical information. 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:
Architectural and Engineering Evaluation Report prepared for Equity Residential
Properties Trust by GTG Consultants Inc., dated May 22, 1996, and Phase I
Environmental Site Assessment of Briarwood Place prepared for Balcor Management
Services, Incorporated by EMG, dated April 10, 1996 ("Existing Reports").
Seller makes no representation or warranty concerning the accuracy or
completeness of the Existing Reports. Purchaser hereby releases Seller and the
Affiliates of Seller from any liability whatsoever with respect to the Existing
Reports, or, including, without limitation, the matters set forth in the
Existing Reports, and the accuracy and/or completeness of the Existing Reports.
Furthermore, Purchaser acknowledges that it will be purchasing the Property
with all faults disclosed in the Existing Reports. 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.
7.5. Seller has provided to Purchaser documents in Seller's possession
(the "Condemnation Documents") related to a pending condemnation action
affecting a portion of the Property (the "Condemnation Action"). Seller makes
no representation or warranty concerning the accuracy or completeness of the
Condemnation Documents. Purchaser hereby releases Seller and the Affiliates of
Seller from any liability whatsoever with respect to the Condemnation
Documents, or, including, without limitation, the accuracy and/or completeness
of the Condemnation Documents. Furthermore, Purchaser acknowledges that it
will be purchasing the Property subject to the Condemnation Action.
Notwithstanding anything contained herein to the contrary, the terms of this
Paragraph 7.5 shall survive the Closing and the delivery of the Deed and
termination of this Agreement.
8. CLOSING. The closing of this transaction (the "Closing") shall be thirty
days after expiration of the Inspection Period (the "Closing Date"), at the
office of Title Insurer, Chandler, Arizona 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 Arizona, or at the option of Purchaser, 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.
9. CLOSING DOCUMENTS.
9.1. On or prior to the Closing Date, Seller and Purchaser shall execute
and deliver to one another joint escrow instructions to the Title Insurer and a
joint closing statement. In addition, Purchaser shall deliver to Seller the
balance of the Purchase Price, an assumption of the documents set forth in
Paragraph 9.2.3 and 9.2.4 and such other documents as may be reasonably
required by the Title Insurer in order to consummate the transaction as set
forth in this Agreement.
9.2. On the Closing Date, Seller shall deliver to Purchaser the
following:
9.2.1. the Deed (in the form of Exhibit E attached hereto),
subject to Permitted Exceptions and those Unpermitted Exceptions waived by
Purchaser;
9.2.2. a ▇▇▇▇ of sale conveying the Personal Property to
Purchaser free and clear of all liens, claims and encumbrances (in the form of
Exhibit F attached hereto);
9.2.3. assignment and assumption of intangible property (in the form
attached hereto as Exhibit G), including, without limitation, the service
contracts listed in Exhibit H;
9.2.4. an assignment and assumption of leases and security deposits
(in the form attached hereto as Exhibit I);
9.2.5. non-foreign affidavit (in the form of Exhibit J attached
hereto);
9.2.6. original, and/or copies of, leases affecting the Property in
Seller's possession (which shall be delivered at the Property);
9.2.7. all documents and instruments reasonably required by the
Title Insurer to issue the Title Policy;
9.2.8. possession of the Property to Purchaser, subject to the terms
of leases;
9.2.9. evidence of the termination of the management agreement;
9.2.10. notice to the tenants of the Property of the transfer of
title and assumption by Purchaser of the landlord's obligation under the leases
and the obligation to refund the security deposits (in the form of Exhibit K);
9.2.11. an updated rent roll certified as true and correct subject
to the limitations contained within Paragraph 16.1 hereof;
9.2.12. UCC Searches covering the Property and releases of all
liens, claims and encumbrances of every type and description, including
security interests under Article 9 of the Uniform Commercial Code and tax
liens, affecting all or any part of the Personal Property; and
9.2.13. an Assignment of Condemnation Action.
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, 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 AND PURCHASER'S RIGHT TO RECEIVE FROM SELLER ITS ACTUAL, DOCUMENTED
THIRD PARTY EXPENSES INCURRED IN THE PERFORMANCE OF ITS DUE DILIGENCE HEREUNDER
AND THE PREPARATION OF THIS AGREEMENT, NOT TO EXCEED $25,000 IN THE AGGREGATE.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF SELLER'S DEFAULT
IS (I) ITS (AND NOT AN UNRELATED THIRD PARTY'S) AFFIRMATIVE, WILLFUL ACTION
WHICH RESULTS IN THE RECORDING OF AN ENCUMBRANCE AGAINST THE PROPERTY WITH THE
INTENTION TO PREVENT THE SALE OF THE PROPERTY IN ACCORDANCE WITH THE TERMS
HEREOF AND WHICH GIVES RISE TO PURCHASER'S RIGHT TO TERMINATE THIS AGREEMENT
PURSUANT TO PARAGRAPH 5 HEREOF; (II) ITS FAILURE TO EXPEND UP TO $100,000 IF
(A) SELLER IS ABLE TO BOND OVER, CURE OR REMOVE A MINOR UNPERMITTED EXCEPTION
FOR A COST NOT TO EXCEED $100,000 OR (B) THE TITLE INSURER IS WILLING TO INSURE
OVER A MINOR UNPERMITTED EXCEPTION FOR A COST NOT TO EXCEED $100,000 IN
ACCORDANCE WITH THE TERMS HEREOF WITH THE TERMS HEREOF OR (III) ITS WILLFUL
REFUSAL TO DELIVER THE DEED, THEN PURCHASER WILL BE ENTITLED TO ▇▇▇ FOR
SPECIFIC PERFORMANCE, OR DAMAGES, OR BOTH. THE DAMAGES RECOVERABLE BY
PURCHASER SHALL NOT EXCEED $1,000,000, PLUS COSTS AND REASONABLE ATTORNEY'S
FEES.
12. PRORATIONS.
12.1. Rents (exclusive of delinquent rents, but including prepaid rents);
refundable security deposits (which will be assigned to and assumed by
Purchaser and credited to Purchaser at Closing); water and other utility
charges; fuels; prepaid operating expenses; real and personal property taxes
and similar items 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 and
Assessments payable in installments which are attributable to the period of
time prior to Closing shall be paid by Seller. If the amount of any of the
items to be prorated is not then ascertainable, the adjustments thereof shall
be on the basis of the most recent ascertainable data. All prorations will be
final except as to delinquent rent referred to in Paragraph 12.2 below.
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, subject to proration for the month of Closing. 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. Seller will pay 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 affiliated with Purchaser 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 Insignia Mortgage & Investment Company (to be paid by Seller).
Seller's commission to Insignia Mortgage & Investment Company shall only be
payable out of the proceeds of the sale of the Property in the event the
transaction set forth herein closes. Purchaser and Seller shall indemnify,
defend and hold the other party hereto harmless from any claim whatsoever
(including without limitation, reasonable attorney's fees, court costs and
costs of appeal) from anyone claiming by or through the indemnifying party any
fee, commission or compensation on account of this Agreement, its negotiation
or the sale hereby contemplated other than to Insignia Mortgage & Investment
Company. 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, the asset manager of the Property (the "Seller's
Representative"), and any representation or warranty of the Seller is based
upon those matters of which the Seller's Representative has actual knowledge.
Seller's Representative shall deliver a copy of the representations and
warranties in Paragraph 16.2 below to the on-site property manager for its
review along with a request for the on-site property manager to inform Seller's
Representative of any inaccuracies contained within such representations and
warranties. 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 (except with
respect to subsection (ii) of this Paragraph), Seller hereby makes the
following representations and warranties, which representations and warranties
are made to Seller's knowledge and which shall not survive Closing: (i) Seller
has no knowledge of any pending or threatened litigation, claim, cause of
action or administrative proceeding concerning the Property; (ii) Seller has
the power to execute and deliver this Agreement and consummate the transactions
contemplated herein; (iii) the rent roll attached hereto as Exhibit M which
Seller will update as of the Closing Date is accurate as of the date set forth
thereon; (iv) Seller is not in possession of any environmental reports
respecting the Property other than the Existing Reports; (v) Seller is not in
possession of any documents prepared by any municipality or governmental entity
related to the Condemnation Action other than the Condemnation Documents; and
(vi) the unaudited historical financial information regarding the Property
which has been furnished to Purchaser is the same financial information which
Seller uses in preparing reports to its investors.
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.
17. LIMITATION OF LIABILITY. Neither Seller, nor any 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.
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: ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Zavis
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (FAX)
TO PURCHASER: Continental Realty Advisors, Ltd.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (FAX)
and to: Signet Partners, a corporation
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (FAX)
and one copy to: ▇▇▇▇▇ Professional Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, 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) ▇▇▇▇▇▇▇ 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 Arizona.
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.
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date first set forth above.
PURCHASER:
Continental Realty Advisors, Ltd.,
a Colorado corporation; and Signet Partners, a
Colorado Corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Its: Chairman
------------------------------
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Its: Exec. Vice President
------------------------------
SELLER:
▇▇▇▇▇▇▇▇ INVESTORS, an Illinois limited
partnership
By: Balcor Partners-XV, an Illinois general
partnership, its general partner
By: RGF-Balcor Associates-II, an Illinois
general partnership, a general partner
By: The Balcor Company, a Delaware
corporation, a general partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
----------------------------
Its: Senior Vice President
----------------------------
[Briarwood Place Apartments]
of Insignia Mortgage & Investment Company ("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.
INSIGNIA MORTGAGE & INVESTMENT COMPANY
By:
-----------------------------------
Name:
-----------------------------------
Exhibits
A - Legal
B - Personal Property
C - Escrow Agreement
D - Title Commitment
E - Deed
F - ▇▇▇▇ of Sale
G - Assignment and Assumption of Intangible Property
H - Service Contracts
I - Assignment and Assumption of Leases and Security Deposits
J - Non-Foreign Affidavit
K - Notice to Tenants
L - Rent Roll
