AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement") is entered into as of the __ day
of April, 1996, by and between EARL PHILLIPS, L.L.C., a Georgia limited
liability company ("Purchaser"), and CUMBERLAND PINES 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 Nine Million Two Hundred Thousand and No/100 Dollars
($9,200,000.00) (the "Purchase Price") that certain property commonly known as
Cumberland Pines Apartments, Atlanta, Georgia 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 Fifty
Thousand and No/100 Dollars ($150,000.00) (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 First American Title
Insurance Company (hereinafter referred to as "Title Insurer") dated
February 26, 1996 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 5, and 7
through 10 inclusive, to the extent that same effect 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"). Purchaser shall pay for all of the
costs of the Title Commitment and Title Policy (including, without limitation,
the costs of any endorsements to the Title Policy requested by Purchaser).
3.2. Purchaser has received a survey of the Property prepared by Planners
and Engineers Collaborative, revised July 13, 1982 (the "Existing Survey").
Purchaser shall pay for the costs of updating the Existing Survey. Purchaser
hereby acknowledges that all matters disclosed by the Existing Survey are
acceptable to Purchaser.
3.3. The obligation of Purchaser to pay various costs 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 Purchaser shall pay for 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" (hereinafter defined), 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 $25,000.00, 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 $25,000.00, 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 limited 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 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 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 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 April 3, 1996 and ending at 5:00
p.m. Chicago time on May 3, 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. 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 and year-to-date 1996
operating statements.
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 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 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
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, Purchaser's obligation to indemnify Seller and restore the Property,
as more fully set forth in this Paragraph 7.1, shall survive the Closing and
the delivery of the Deed and termination of this Agreement.
7.2. 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" (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, Purchaser's obligations, as more fully set
forth in 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. 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, Purchaser's obligations, as more
fully set forth in 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 report:
Phase I Environmental Site Assessment, prepared by Law Associates, Inc., dated
August 16, 1991 ("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. Notwithstanding anything contained herein to the
contrary, Purchaser's obligations, as more fully set forth in this
Paragraph 7.4 shall survive the Closing and the delivery of the Deeds and
termination of this Agreement.
8. CLOSING. The closing of this transaction (the "Closing") shall be on the
date which is fifteen (15) days following the expiration of the Inspection
Period (the "Closing Date"), at the office of Slutzky, Wolfe and Bailey, agent
for Title Insurer, at which time Seller shall deliver possession of the
Property to Purchaser; provided, however, that Purchaser may accelerate the
Closing Date upon three (3) business days' prior written notice to Seller.
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 the State of Georgia, 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.
9. FINANCING CONTINGENCY. Purchaser's and Seller's obligations under this
Agreement are contingent upon Purchaser's ability to procure a commitment for
first mortgage financing for the acquisition of the Property in an amount of
not less than $6,500,000 at the then-current market rate of interest (the
"Financing Contingency") on or before May 3, 1996. Purchaser acknowledges and
agrees that it shall submit its application for a commitment for first mortgage
financing in accordance with the provisions set forth above within seven (7)
days from the date hereof, and shall provide Seller with a letter from the
lender evidencing that said application has been received and completed within
fourteen (14) days from the date hereof. In the event Purchaser has complied
with the requirements set forth in the preceding sentence, but is unable to
satisfy the Financing Contingency on or before May 3, 1996, then Purchaser
shall have the option, upon written notice to Seller, exercised no later than
May 3, 1996, to terminate this Agreement, in which case 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 delivered to Seller, and neither party shall
have any further liability to the other, except for those covenants and
obligations hereunder which expressly survive the termination of this
Agreement. In the event Purchaser fails to deliver such notice to Seller, the
Financing Contingency shall be deemed satisfied and the parties hereto shall
proceed to Closing.
10. CLOSING DOCUMENTS.
10.1. 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 Paragraphs 10.2.3 and 10.2.4 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.
10.2. On the Closing Date, Seller shall deliver to Purchaser the
following:
10.2.1. the Deed (in the form of Exhibit E attached hereto), subject
to Permitted Exceptions and those Unpermitted Exceptions waived by Purchaser;
10.2.2. a quit claim bill of sale conveying the Personal Property
(in the form of Exhibit F attached hereto);
10.2.3. assignment and assumption of intangible property (in the
form attached hereto as Exhibit G), including, without limitation, the service
contracts listed in Exhibit H;
10.2.4. an assignment and assumption of leases and security deposits
(in the form attached hereto as Exhibit I);
10.2.5. non-foreign affidavit (in the form of Exhibit J attached
hereto);
10.2.6. original, and/or copies of, leases affecting the Property in
Seller's possession;
10.2.7. all documents and instruments reasonably required by the
Title Insurer to issue the Title Policy;
10.2.8. possession of the Property to Purchaser;
10.2.9. evidence of the termination of the management agreement;
10.2.10. 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
10.2.11. an updated rent roll.
11. 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.
12. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF ALL EARNEST MONEY
TOGETHER WITH 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. 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.
13. PRORATIONS.
13.1. 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; management fees in the amount of
6.0%; real and personal property taxes; and other similar items shall be
adjusted ratably as of 11:59 p.m. on the Closing Date and credited to the
balance of the cash due at Closing. Assessments payable in installments which
are due subsequent to the Closing Date shall be paid by Purchaser. If the
amount of any of the items to be prorated is not then ascertainable, the
adjustments thereof shall be on the basis of the most recent ascertainable
data. All prorations will be final except as to delinquent rent referred to in
Paragraph 13.2 below.
13.2. 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 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 one hundred twenty (120) days after the Closing
Date, Purchaser shall deliver to Seller a reconciliation statement of
Post-Closing Receipts through the first ninety (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 13.2 of this Agreement shall survive the Closing and the delivery and
recording of the deed.
14. 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 11 hereof.
15. 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 11 hereof.
16. 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 Apartment Realty Advisors (to be paid by Seller). Seller's
commission to Apartment Realty Advisors 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 Apartment Realty Advisors. The indemnifying party
shall undertake its obligations set forth in this Paragraph 16 using attorneys
selected by the indemnifying party and reasonably acceptable to the indemnified
party. The provisions of this Paragraph 16 will survive the Closing and
delivery of the Deed.
17. REPRESENTATIONS AND WARRANTIES.
17.1. 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 Daniel L. Charleston (the "Seller's Representative"), and any
representation or warranty of the Seller is based upon those matters of which
the Seller's Representative has actual knowledge. 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.
17.2. Subject to the limitations set forth in Paragraph 17.1, 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 the power to execute this Agreement and consummate
the transactions contemplated herein; (iii) the rent roll attached hereto as
Exhibit L which Seller will update as of the Closing Date is accurate as of the
date set forth thereon; and (iv) Seller has no knowledge that any of the units
are down or unrentable.
17.3. Purchaser hereby represents and warrants to Seller that
Purchaser has the full right, power and authority to execute this Agreement and
consummate the transactions contemplated herein.
18. LIMITATION OF LIABILITY. Neither Seller, nor any Affiliate of Seller, nor
any of their 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.
19. TIME OF ESSENCE. Time is of the essence of this Agreement.
20. 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: Cumberland Pines Limited Partnership
c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attention: Ilona Adams
with copies to: The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attention: Alan Lieberman
(708) 317-4360
(708) 317-4462 (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: Earl Phillips, L.L.C.
c/o Phillips Properties
638 Longview Street
Carrollton, Georgia 30117
Attention: Earl Phillips
(770) 830-8133
(770) 830-8999 (FAX)
and one copy to: Wiggins and Camp
203 Tanner Street
Carrollton, Georgia 30117
Attention: William Wiggins, Esq.
(770) 832-2482
(770) 830-7915 (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.
21. 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 (the "Escrow
Agent"). 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) 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.
22. GOVERNING LAW. The provisions of this Agreement shall be governed by the
laws of the State of Georgia, except that with respect to the retainage of the
Earnest Money as liquidated damages, the laws of the State of Illinois shall
govern.
23. 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.
24. 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.
25. 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.
[EXECUTION PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date first set forth above.
PURCHASER:
EARL PHILLIPS, L.L.C., a Georgia limited
liability company
By: /s/Earl Phillips
------------------------------------
Name: Earl Phillips
-----------------------------------
Its: Manager
------------------------------------
SELLER:
CUMBERLAND PINES LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Cumberland Pines Partners, Inc., an
Illinois corporation, its General Partner
By: /s/Phillip Schechter
---------------------------------
Name: Phillip Schechter
-------------------------------
Its: Authorized agent
-------------------------------
of Apartment Realty Advisors ("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 2/16,
1996 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.
APARTMENT REALTY ADVISORS
By: /s/Jay T. Clark
--------------------------------
Name: Jay T. Clark
------------------------------
Its: President
------------------------------
Exhibits
A - Legal Description
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
L - Rent Roll
CUMBERLAND PINES LIMITED PARTNERSHIP
April ___, 1996
Mr. Earl Phillips
Managing Partner
Phillips Properties
638 Longview Street
Carrollton, Georgia 30117
Re: Cumberland Pines Apartments, Atlanta, Georgia
Dear Mr. Phillips:
Reference is hereby made to the certain Agreement of Sale (the
"Agreement") dated April ___, 1996 by and between Cumberland Pines Limited
Partnership, an Illinois limited partnership ("Seller"), and Earl Phillips,
L.L.C., a Georgia limited liability company ("Purchaser"). All capitalized
terms which are used herein but which are not otherwise defined herein shall
have the meaning desribed to them in the Agreement.
Section 9 of the Agreement provides that the Purchaser satisfy the
Financing Contingency on or before May 3, 1996. The parties hereby agree that
if Purchaser has submitted its application for first mortgage financing in
accordance with the provisions of Section 9 of the Agreement and has delivered
to Seller a copy of a letter from the potential lender evidencing that said
application has been received and completed within the time periods set forth
in said Section 9, but the Financing Contingency has not been satisfied by May
3, 1996 (the "Initial Deadline"), Purchaser shall have the right, upon written
notice to Seller and Escrow Agent delivered no later than 2:00 p.m. Chicago
time on May 3, 1996, to extend the Initial Deadline to June 2, 1996 (such
extended date being referred to herein as the "Extended Deadline"), provided
Purchaser shall deposit an additional Fifty Thousand and No/100 Dollars
($50,000.00) into escrow with the Escrow Agent no later than 2:00 p.m. Chicago
time on May 3, 1996, which sum shall be treated as additional Earnest Money.
In such event, the "Financing Contingency Date" (as defined in the Escrow
Agreement) shall be amended from "May 3, 1996" to the Extended Deadline, and
the Closing Date shall be extended to the date fifteen (15) days following the
Extended Deadline. If the Financing Contingency is not satisfied on or before
the Extended Deadline, then Purchaser shall have the right, upon written notice
to Seller, delivered no later than 2:00 p.m. Chicago time on June 2, 1996, to
terminate the Agreement, in which case the Agreement shall become null and void
without further action of the parties and all funds deposited into the escrow
by Purchaser, together with any interest accrued thereon, shall be delivered 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 of the Agreement. In the event that
Purchaser fails to deliver said notice to Seller, the Financing Contingency
shall be deemed satisfied and the parties shall proceed to Closing.
Please acknowledge your agreement to the foregoing by executing a copy of
this letter and returning it to the undersigned.
Very truly yours,
Cumberland Pines Limited Partnership,
an Illinois limited partnership
By: Cumberland Pines Partners, Inc.,
an Illinois corporation, its General
Partner
By: /s/ Phillip Schechter
--------------------------
Name: Phillip Schechter
---------------------------
Its: Authorized Agent
-----------------------------
ACCEPTED AND AGREED to
this _____day of April, 1996
EARL PHILLIPS, L.L.C., a Georgia
limited liability company
BY: /s/ Earl Phillips
----------------------
Name: Earl Phillips
Its: Manager