EXHIBIT 99
AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), entered into as of the 5th day
of June, 1995, by and between PRICE REALTY CORPORATION, a Texas corporation
("Purchaser"), and BALCOR PENSION INVESTORS - III, 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 And No/100 Dollars ($10,000,000.00) (the "Purchase
Price"), that certain property commonly known as Candlewyck Apartments, Dallas,
Texas, generally described on Exhibit A attached hereto subject to that legal
description being corrected to conform to the description revealed by an
accurate survey and to rectify various scrivener's errors(the "Property").
Included in the Purchase Price is all of the personal property set forth in
Exhibit B 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 Two Hundred
Thousand and No/100 Dollars ($200,000.00) (the "Earnest 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. 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 Partners Title Company as
agent for Chicago Title Insurance Company, (hereinafter referred to as "Title
Insurer") dated May 4, 1995 for the Property (the "Title Commitment"). For
purposes of this Agreement, "Permitted Exceptions" shall mean: (a) the general
printed exceptions contained in the standard title policy to be issued by Title
Insurer based on the Title Commitment; (b) general real estate taxes,
association assessments, special district taxes and related charges not yet due
and payable; (c) matters shown on the "Existing Survey" (hereinafter defined);
(d) matters caused by the actions of Purchaser; and (e) the title exceptions
set forth in Schedule B of the Title Commitment as Numbers 1 through 6
inclusive and 9B. through P., 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 the amount of the Purchase price in
conformance with the previously delivered Title Commitment, subject only to
Permitted Exceptions and Unpermitted Exceptions waived by Purchaser (the "Title
Policy"). Seller shall pay for 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.
3.2. Purchaser has received a survey of the Property prepared by Donald
E. Davis Consulting Engineers (the "Existing Survey"). Seller shall pay for the
costs of updating the Existing Survey and Seller shall deliver the updated
survey (the "Updated Survey") to Purchaser within 20 days after the date
hereof. Purchaser hereby acknowledges that all matters disclosed by the
Existing Survey are acceptable to Purchaser.
3.3. The obligations of Seller and Purchaser to pay various costs, if any,
set forth in Paragraphs 3.1 and 3.2 shall survive the termination of this
Agreement.
4. PAYMENT OF CLOSING COSTS.
4.1. In addition to the costs set forth in Paragraphs 3.1 and 3.2, Seller
shall pay for 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 and all other charges of the Title Insurer in
connection with this transaction.
5. CONDITION OF TITLE.
5.1. If, prior to Closing, a date-down to the Title Commitment 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
$50,000.00, 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, 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 $50,000.00, 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. Absent notice from Purchaser to Seller in accordance with the
preceding sentence, Purchaser shall be deemed to have elected to take title
subject to said 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 Earnest 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 by special warranty deed ("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 any indemnity provisions 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 $200,000.00 (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 $200,000.00 (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 Earnest 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 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 Seller and Purchaser reasonably agree 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 impairs 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 Earnest 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.
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 June 7, 1995 (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 and any other materials located at the
Property which Seller and Purchaser reasonably agree are relevant to the
transaction set forth herein, 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, unaudited year
end 1994 and year to date 1995 operating statements, and other materials which
Seller and Purchaser reasonably agree are relevant to the transaction set forth
herein.
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
Purchaser and 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 Purchaser is dissatisfied with the results of the tests, studies or
investigations performed or information received pursuant to this Paragraph 7.1
for any reason at Purchaser's sole discretion, 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 given by Purchaser 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 Earnest Money 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, Purchaser's obligation to indemnify Seller and restore the Property,
as more fully set forth in this Paragraph 7.1, shall survive the termination of
this Agreement.
7.2. Seller 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 toxic waste and/or any hazardous
materials or substances, 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, environmental or building laws, rules or regulations 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 or substances on, or
environmental conditions of, the Property, whether known or unknown. As used
herein, the term "hazardous materials or substances" means (i) hazardous
wastes, hazardous substances, hazardous constituents, toxic substances or
related materials, whether solids, liquids or gases, including but not limited
to substances defined as "hazardous wastes," "hazardous substances," "toxic
substances," "pollutants," "contaminants," "radioactive materials," or other
similar designations in, or otherwise subject to regulation under, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended ("CERCLA"), 42 U.S.C. Section 9601 et seq.; the Toxic Substance
Control Act ("TSCA"), 15 U.S.C. Section 2601 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1802; the Resource Conservation and
Recovery Act ("RCRA"), 42 U.S.C. Section 9601. et seq.; the Clean Water Act
("CWA"), 33 U.S.C. Section 1251 et seq.; the Safe Drinking Water Act, 42 U.S.C.
Section 300f et seq.; the Clean Air Act ("CAA"), 42 U.S.C. Section 7401 et
seq.; and in any permits, licenses, approvals, plans, rules, regulations or
ordinances adopted, or other criteria and guidelines promulgated pursuant to
the preceding laws or other similar federal, state or local laws, regulations,
rules or ordinance now or hereafter in effect relating to environmental matters
(collectively the "Environmental Laws"); and (ii) any other substances,
constituents or wastes subject to any applicable federal, state or local law,
regulator or ordinance, including any Environmental Law, now or hereafter in
effect, including but not limited to (A) petroleum, (B) refined petroleum
products, (C) waste oil, (D) waste aviation or motor vehicle fuel and (E)
asbestos.
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. 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.
7.4. Seller has provided to Purchaser the following existing report:
Phase I environmental report by Law Engineering, Inc., dated April 8, 1994
("Existing Report"). 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, or, including, without limitation, the matters set
forth in the Existing Report, and the accuracy and/or completeness of the
Existing Report. Furthermore, Purchaser acknowledges that it will be
purchasing the Property with all faults disclosed in the Existing Report.
8. CLOSING. The closing of this transaction (the "Closing") shall be on July
31, 1995 (the "Closing Date"), at the office of Title Insurer, Dallas, Texas at
which time Seller shall deliver possession of the Property to Purchaser.
Notwithstanding the foregoing, provided that Purchaser is not in default under
the terms of this Agreement, Purchaser may elect to extend the Closing Date to
August 31, 1995 by depositing, as additional Earnest Money, a non-refundable
amount of FIFTY THOUSAND AND NO/100 DOLLARS ($50,000.00) in accordance with the
Escrow Agreement, on or before July 20, 1995. 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 Texas, or at the option of either party, the Closing shall be a
"New York style" closing at which the Purchaser shall wire the balance of the
Purchase Price(with Purchaser receiving a credit against the Purchase Price for
all Earnest Money, including the additional Earnest Money referenced above) 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 the Closing Date, Seller and Purchaser shall execute and deliver
to one another 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 special warranty bill of sale conveying the Personal
Property (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;
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;
9.2.9. 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
9.2.10. a rent roll updated within 5 days prior to the Closing Date.
10. DEFAULT BY PURCHASER. ALL EARNEST 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 EARNEST 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 EARNEST 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 (i) THE RETURN OF ALL EARNEST MONEY
TOGETHER WITH ANY INTEREST ACCRUED THEREON, AND (ii) REIMBURSEMENT OF ACTUAL
THIRD-PARTY EXPENSES INCURRED BY PURCHASER IN CONNECTION WITH THIS AGREEMENT IN
AN AMOUNT NOT TO EXCEED THE EARNEST MONEY HELD PURSUANT TO THE ESCROW AGREEMENT
AT THE TIME OF SELLER'S 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
SUE FOR SPECIFIC PERFORMANCE, IN WHICH CASE PURCHASER SHALL NOT BE ENTITLED TO
THE REIMBURSEMENT SET FORTH IN THIS PARAGRAPH 11.
12. PRORATIONS.
12.1. At Closing, the following items shall be prorated in cash as of the
date of Closing: Prepaid rents; fees and assessments; prepaid expenses and
obligations under the service contracts; accrued expenses; real and personal ad
valorem taxes ("Ad Valorem Taxes") for the year of Closing but using the most
recent assessed valuation for purposes of real estate taxes. If the tax rate
for the year of Closing is not known, taxes shall be estimated based on the tax
rate for the year prior to Closing. Assessments payable in installments which
are due subsequent to the Closing Date shall be paid by Purchaser. All
prorations will be final except as to delinquent rent referred to in Paragraph
12.3 below.
12.2. Purchaser shall take all steps necessary to effectuate the transfer
of all utilities to its name as of the Closing Date, and where necessary, post
deposits with the utility companies. Purchaser shall further ensure that all
utility meters are read as of the Closing Date. Seller shall pay all utilities
up to and including the Closing Date and all utilities thereafter used shall be
paid for by Purchaser. Seller shall be entitled to recover any and all
deposits held by any utility company as of the date of Closing; to the extent
Purchaser fails to provide, where required, deposits to any such utility
company(s) so as to prevent the timely release of Seller's deposit(s) by the
utility company(s) on the Closing Date, Purchaser shall pay Seller interest on
all such deposits not timely released at the rate of ten percent (10%) per
annum from the fifth (5th) day following the Closing Date until Seller actually
receives its deposits. Such covenant shall expressly survive the Closing.
Refundable tenant security deposits shall be assigned to and assumed by
Purchaser and credited to Purchaser at Closing.
12.3. Seller shall at Closing pay to Purchaser, in cash, the amount of
any rents paid to the Seller by tenants of the Property, for periods subsequent
to the Closing Date. Seller shall be entitled to all rents for the Closing
Date. No proration shall be made for rents delinquent as of the Closing Date
(hereinafter called the "Delinquent Rents"). All Delinquent Rents collected on
or after the Closing Date shall be allocated to the latest month for which
rental is due for that tenant. Any Delinquent Rents collected by Purchaser
after Closing which are owing to the Seller by tenants of the Property for
periods prior to and including the Closing Date, shall be forthwith paid by
Purchaser to Seller. Once any Delinquent Rents are in excess of ninety (90)
days past due, all rights to pursue collection of such amounts shall vest
solely in Seller, provided, however, Seller shall not be entitled to pursue
eviction proceedings in connection with any such legal action. Purchaser shall
use its best efforts to collect all amounts which, upon collection, would
constitute Delinquent Rents hereunder. Within 120 days after the Closing Date,
Purchaser shall deliver to Seller a reconciliation statement of Delinquent
Rents through the first 90 days after the Closing Date. 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 Delinquent Rents
reconciliation statement and upon the verification of additional funds owing to
Seller, Purchaser shall pay to Seller said additional Delinquent Rents and the
cost of performing Seller's audit. Paragraph 12.3 of this Agreement shall
survive the Closing and the delivery and recording of the deed.
13. RECORDING. This Agreement shall not be recorded and the act of recording
by Purchaser shall be an act of default hereunder by Purchaser and subject to
the provisions of Paragraph 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, except to
any entity in which Purchaser or Michael J. Ochstein has an ownership interest.
Any assignment or transfer of, or attempt to assign or transfer, Purchaser's
interest in this Agreement other than as set forth herein shall be an act of
default hereunder by Purchaser and subject to the provisions of Paragraph 10
hereof.
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 Cushman & Wakefield and $100,000 to Purchaser (to be paid by
Seller). Seller's commission to Cushman & Wakefield and Purchaser 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 Cushman & Wakefield and
Purchaser. 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. SELLER'S 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 Phillip A. Schechter (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
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 not received any written notice of violation of any
Environmental Laws; (iii) Seller has the power to execute this Agreement and
consummate the transactions contemplated herein; and (iv) the rent rolls which
Seller has submitted to the Purchaser and updated as of the Closing Date are
accurate as of the date set forth thereon.
17. LIMITATION OF LIABILITY. Neither Seller, nor any of its respective
beneficiaries, shareholders, partners, officers, agents or employees, heirs,
successors or assigns shall have any personal liability of any kind or nature
for or by reason of any matter or thing whatsoever under, in connection with,
arising out of or in any way related to this Agreement and the transactions
contemplated herein, and Purchaser hereby waives for itself and anyone who may
claim by, through or under Purchaser any and all rights to sue or recover on
account of any such alleged personal liability.
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 or made by United States registered or certified mail
addressed as follows:
TO SELLER: c/o The Balcor Company
Bannockburn Lake Office Complex
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attention: Ilona Adams
with copies to: The Balcor Company
Bannockburn Lake Office Complex
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
(708) 677-2900
(708) 982-4027 (FAX)
and to: Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, Illinois 60661-3693
Attention: Daniel J. Perlman, Esq.
(312) 902-5532
(312) 902-1061 (FAX)
TO PURCHASER: Price Realty Corporation
5495 Belt Line Road
Suite 335
Dallas, Texas 75240
Attention: Mr. Michael J. Ochstein
(214) 788-1925
(214) 788-4665 (FAX)
and one copy to: Klineman, Rose & Wolf
135 North Pennsylvania
Suite 2000
Indianapolis, Indiana 46204
Attention: Robert Rose, Esq.
(317) 264-5000
(317) 264-5400 (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 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 or by overnight
courier 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 Earnest 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) Earnest Money;
(B) One (1) 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 Texas, except that with respect to the retainage of the Earnest 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. WAIVER OF DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT. To the
extent permitted by law, Purchaser hereby waives the provisions of the Texas
Deceptive Trade Practices-Consumer Protection Act, Chapter 17, subchapter E
Section 17.41 through 17.63 inclusive, Vernon's Texas Code Annotated, Business
and Commerce Code. In order to evidence this ability to grant such waiver,
Purchaser hereby represents and warrants to Seller that Purchaser (i) is
represented by legal counsel in the purchase of the Property, and (ii) is not
in a significantly disparate bargaining position in relation to the Seller.
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of the
date first set forth above.
PURCHASER:
PRICE REALTY CORPORATION,
a Texas corporation
By: /s/Michael J. Ochstein
-----------------------
Name: Michael J. Ochstein
-----------------------
Its: President
-----------------------
SELLER:
BALCOR PENSION INVESTORS - III, an Illinois
limited partnership
By: Balcor Mortgage Advisors - II, 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/Philip Schechter
-------------------------
Name: Philip Schechter
-------------------------
Its: Authorized Agent
-------------------------
The undersigned, being Purchaser's local counsel in connection with the
Purchaser's purchase of the Property, hereby executes this Agreement solely for
the purpose of acknowledging that Purchaser is not in a significantly disparate
bargaining position in relation to Seller.
Klineman, Rose and Wolf, P.C.
By: /s/Robert A. Rose
-------------------------
Robert A. Rose
of Cushman & Wakefield ("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 shall be based on a purchase price of $9,900,000, and is otherwise 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 stating that no other fees or commissions are due
to it from Seller or Purchaser.
Cushman & Wakefield
By:
--------------------------------
Name:
------------------------------
Its:
-------------------------------
Exhibits
A - Legal
B - Personal Property
C - Escrow Agreement
D - Title Commitment
E - Deed
F - Bill 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
FIRST AMENDMENT TO AGREEMENT OF SALE
THIS FIRST AMENDMENT TO AGREEMENT OF SALE (this "Amendment") is made and
entered into this 13th day of June, 1995, by and between Price Realty
Corporation, a Texas corporation ("Purchaser") and Balcor Pension Investors -
III, an Illinois limited partnership ("Seller").
RECITALS:
A. Seller and Purchaser are parties to that certain Agreement of Sale,
dated June 5, 1995 (the "Agreement"), pursuant to which Purchaser has agreed to
purchase and Seller has agreed to sell that certain Property (as defined in the
Agreement) commonly known as Candlewyck apartments, Dallas, Texas, legally
described and depicted on Exhibit A attached to the Agreement.
B. Seller and Purchaser desire to amend the Agreement in accordance with
the terms of this Amendment
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. All terms not otherwise defined herein shall have the meanings ascribed to
each in the Agreement.
2. Purchaser shall receive a $150,000 credit against the Purchase Price at
Closing to compensate Purchaser for certain deferred maintenance items.
3. Seller agrees to complete the termite remediation work set forth in the
proposal by Orkin on or before the Closing Date.
4. The Inspection Period shall end at 12:00 p.m. Chicago time on June 16,
1995.
5. Except as amended hereby, the Agreement shall be and remain unchanged in
full force and effect in accordance with its terms.
6. This Amendment may be executed in counterparts each of which shall be
deemed an original, but all of which, when taken together shall constitute one
and the same instrument.
IN WITHNESS WHEREOF, the parties have executed this Amendment as of the
date first set forth above.
PURCHASER:
PRICE REALTY CORPORATION,
a Texas corporation
By: /s/Michael J. Ochstein
-------------------------------
Name: Michael J. Ochstein
-------------------------------
Its: President
-------------------------------
SELLER:
BALCOR PENSION INVESTORS - III, an Illinois limited
partnership
By: Balcor Mortgage Advisors - II, an Illinois
general partnership, a 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/Al Lieberman
----------------------------
Name: Al Lieberman
----------------------------
Its: Senior V.P.
----------------------------