AGREEMENT OF SALE
THIS AGREEMENT, entered into as of the 15th day of July, 1996, by and
between ERP OPERATING LIMITED PARTNERSHIP, an Illinois limited partnership
("Purchaser") and WOODSCAPE LIMITED PARTNERSHIP, an Illinois limited
partnership ("Seller").
WITNESSETH:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to
sell at the price of NINE MILLION FIVE HUNDRED FIFTY THOUSAND and No/100
Dollars ($9,550,000.00), that certain property ("Property") in Raleigh, North
Carolina more particularly described on Exhibit A attached hereto, which
Property is known as Woodscape Apartments and contains 240 units and
approximately 27 acres. Included in the "Purchase Price" (as hereinafter
defined) is all of Seller's right, title and interest in the personal property
set forth on Exhibit B, which shall be transferred to Purchaser at "Closing"
(as hereinafter defined) by a Bill of Sale; and all right, title and interest
of Seller (whether now or hereafter existing) in and to any land lying in the
bed of any street, alley, road or avenue (whether open, closed or proposed)
within, in front of, behind or otherwise adjoining the Property or any of it;
and all right, title and interest of Seller (whether now or hereafter existing)
in and to any award made or to be made as a result of or in lieu of
condemnation, and in and to any award for damage to the Property or any part
thereof by reason of casualty (all of the foregoing being included within the
term "Property"); and all of the building, structures, fixtures, facilities,
installations and all of Seller's right, title and interest in other
improvements of every kind and description now or hereafter in, on, over and
under the land, including, without limitation, any and all recreational
buildings, structures and facilities, plumbing, air conditioning, heating,
ventilating, mechanical, electrical and other utility systems, parking lots,
landscaping, sidewalks, swimming pools, signs and light fixtures which are not
owned by tenants under leases (all of the foregoing being included within the
term "Property"); and all of Seller's right, title and interest in all of the
following which are in Seller's possession: existing surveys, blue prints,
drawings, plans and specifications (including, without limitation, structural,
HVAC, mechanical and plumbing, water and sewer plans and specifications); all
available tenant lists and data, correspondence with present and prospective
tenants, vendors, suppliers, utility companies and other third parties,
booklets, manuals and promotional and advertising materials concerning the
Property or any part thereof (all of the foregoing being included within the
term "Property"); and all right, title and interest of Seller in and to the
intangible personal property now or hereafter owned by Seller and used in
connection with or arising from the business now or hereafter conducted on or
from the Property or any part thereof, including, without limitation, claims,
choses in action, lease and other contract rights, names and telephone exchange
numbers (all of the foregoing being included within the term "Property"). The
computer software located at the Property is not included in the conveyance to
Purchaser.
2. PURCHASE PRICE. The purchase price (the "Purchase Price") shall be
paid as follows:
A. Upon the execution of this Agreement, the sum of $300,000.00
("Earnest Money") to be held in escrow by the Escrow Agent (as that term
is defined in the "Escrow Agreement" [as hereinafter defined]) by and in
accordance with the provisions of the Escrow Agreement ("Escrow
Agreement") attached hereto as Exhibit C;
B. On the "Closing Date" (as hereinafter defined), the balance of
the Purchase Price adjusted in accordance with the prorations by federally
wired "immediately available" funds delivered to the "Title Insurer" (as
hereinafter defined) no later than 12:00 Noon on the Closing Date. If the
funds are not received by 12:00 Noon, then, on the Closing Date, Purchaser
shall pay Seller an amount equal to any additional mortgage per diem
interest costs incurred by the Seller.
3. TITLE COMMITMENT AND SURVEY.
A. Seller has ordered a title commitment (the "Title Commitment") for an
ALTA Owner's Policy of Title Insurance ("Title Policy") issued by Commonwealth
Land Title Insurance Company (the "Title Insurer") along with copies of all of
the underlying Schedule B documents. Seller will deliver the Title Commitment
and copies of the underlying Schedule B documents to Purchaser promptly
following their receipt by Seller. During the Approval Period Purchaser shall
have the right to review the status of title of the Property (including,
determining what endorsements, if any, the Title Insurer will make available to
Purchaser). If, prior to the expiration of the Approval Period, Purchaser
notifies Seller that Purchaser objects to the status of title, then Seller
shall have five (5) business days thereafter to elect to (i) terminate this
Agreement, in which case the Earnest Money, including interest thereon, shall
be returned to Purchaser immediately following Seller's receipt of the
"Reports" (as hereinafter defined) or (ii) agree to cure the title objections
identified by Purchaser, which cure may be effectuated by causing the Title
Insurer, at Seller's expense, to insure over any title objection, if
applicable. If this Agreement has not been theretofore terminated, then
promptly following the Approval Period, Purchaser and Seller will identify the
exceptions to title which have been agreed to by Purchaser and Seller. Said
exceptions to title are hereinafter referred to as the "Permitted Exceptions".
On the Closing Date, Seller shall cause the Title Insurer to issue the Title
Policy or a "marked up" commitment in conformity with the Title Commitment
subject only to Permitted Exceptions or "Unpermitted Exceptions" (as
hereinafter defined) which have been waived by Purchaser. If the Title Policy
or marked-up commitment delivered at Closing discloses exceptions to title
other than Permitted Exceptions, then Purchaser may terminate this Agreement
and obtain a return of its Earnest Money, including interest thereon. Seller
shall pay for the costs of the Title Policy and all endorsements.
B. Purchaser acknowledges receipt of a survey ("Survey") of the
Property prepared by Bass Nixon & Kennedy dated March 10, 1980. Seller has
ordered an updated Survey ("Updated Survey"). Purchaser shall have ten (10)
days from the date of receipt of the Updated Survey to approve the Updated
Survey. If Purchaser disapproves the Updated Survey because it contains
matters which are not acceptable to Purchaser ("Survey Defects"), then upon
notice delivered to Seller by Purchaser within ten (10) days from the date of
receipt of the Updated Survey, Seller shall have five (5) days to either: (i)
cause the Survey Defects to be removed from the Updated Survey or (ii) cause
the title Insurer to insure against loss or damage resulting from the Survey
Defects ("Title Indemnity"). If Seller is unwilling to do either (i) or (ii)
above, then Purchaser shall have the right to elect to terminate this
Agreement. Purchaser shall notify Seller of its election within five (5) days
after receipt of notice from Seller that the Survey Defects will not be removed
or that the Title Insurer will not issue the Title Indemnity. If Purchaser
fails to make the election within the aforesaid five (5) days, then it shall be
conclusively presumed that Purchaser elects to terminate this Agreement
pursuant to this Paragraph, then the Earnest Money plus all accrued interest
shall be delivered to Purchaser immediately following Seller's receipt of the
Reports.
4. CONDITION OF TITLE/CONVEYANCE. Seller agrees to convey fee simple
title to the Property by Special Warranty Deed in the form of Exhibit D
attached hereto (the "Deed") in recordable form subject only to the Permitted
Exceptions. If Seller is unable to convey title to the Property subject only
to the Permitted Exceptions because of the existence of an additional title
exception ("Unpermitted Exception"), then Purchaser can elect to take title to
the Property subject to the Unpermitted Exception or terminate this Agreement.
Notwithstanding the aforesaid, Seller shall be required to remove all
Unpermitted Exceptions which are liens of a definite or ascertainable amount.
If Purchaser elects to terminate this Agreement, then the Earnest Money plus
all accrued interest shall be delivered to the Purchaser.
5. PAYMENT OF CLOSING COSTS. Seller shall pay the costs of the
documentary stamps (if any) to be paid with reference to the Deed and all other
stamps, intangible, documentary, recording, sales tax and surtax imposed by law
with reference to any other documents delivered in connection with this
Agreement as well as for all costs of the Title Commitment, Title Policy, the
Survey, Updated Survey, escrow charges and all other charges of the Title
Insurer in connection with this transaction. Purchaser and Seller shall be
responsible for the costs of their respective attorneys.
6. DAMAGE, CASUALTY AND CONDEMNATION.
A. If the Property suffers damage as a result of any casualty prior
to the Closing Date and can be repaired or restored in the case of real
property for $95,000 or less, or in the case of Personal Property, for
$25,000.00 or less, as determined by Seller in good faith, then Seller shall
either repair such damage prior to Closing or, at Purchaser's option (which
shall be exercised by Purchaser within ten (10) days after notice of such
casualty), allow Purchaser a credit against the Purchase Price in an amount
equal to the reasonably estimated cost of repair. Seller shall retain all
insurance proceeds. If the cost of repair or restoration exceeds the aforesaid
amounts (as determined by Seller in good faith), then Purchaser can, upon
notice to Seller within ten (10) days after notice of such casualty, elect to
either: (a) cause Seller to repair and restore same, in which event the Closing
Date will be extended until such date as may reasonably be required to complete
the repair or restoration; or (b) terminate this Agreement upon notice to
Seller served within ten (10) days of notice of such casualty or (c) accept the
Property in its damaged condition together with an assignment from Seller of
all insurance proceeds and receive a credit at Closing in the amount of the
deductible.
B. If condemnation proceedings ("Proceedings") have been instituted
against the Property and such Proceedings are in an amount less than $100,000,
then Purchaser shall take the Property subject to the Proceedings and an
assignment of Seller's interest in the Proceedings. If the Proceedings are in
excess of $100,000.00, then Purchaser can elect to either take the Property
subject to the Proceedings and an assignment of Seller's interest in the
Proceedings or terminate this Agreement. If Purchaser elects to terminate this
Agreement, it shall be by notice to the Seller within five (5) days after
Seller notifies Purchaser of the Proceedings.
C. If the Agreement is terminated pursuant to this Paragraph, then
the Earnest Money plus all accrued interest shall be delivered to the
Purchaser.
7. AS-IS CONDITION.
A. Except as may hereinafter be specifically set forth in this
Agreement, Purchaser is not relying on Seller having made any inquiry as to the
condition of the Property or the leases. Purchaser acknowledges and agrees
that, except as may hereinafter be specifically set forth in this Agreement, it
will be purchasing the Property based solely upon its inspection and
investigations of the Property and that Purchaser will be purchasing the
Property "AS IS" and "WITH ALL FAULTS" based upon the condition of the Property
as of the date of this Agreement, subject to reasonable wear and tear and loss
by fire or other casualty or condemnation from the date of this Agreement until
the Closing Date. 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 other
representations or warranties of any kind upon which Purchaser is relying as to
any matters concerning the Property, including, but not limited to, the
condition of the land or any improvements, the existence or nonexistence of
asbestos, lead in water, lead in paint, radon, underground or above ground
storage tanks, petroleum, toxic waste or any "Hazardous Materials" or
"Hazardous Substances" (as such terms are defined below), the tenants of the
Property or the leases affecting the Property, 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 that the
Property complies with Title III of the Americans With Disabilities Act and,
except as may hereinafter be specifically set forth in this Agreement, Seller
makes no representation that the Property complies with any fire codes or
building codes. Purchaser hereby releases Seller from any and all liability in
connection with any claims which Purchaser may have against Seller, and
Purchaser hereby agrees not to assert any claims, for damage, loss,
compensation, contribution, cost recovery or otherwise, against Seller, whether
in tort, contract, or otherwise, relating directly or indirectly to the
existence of asbestos or Hazardous Materials or Hazardous Substances on, or
environmental conditions of, the Property, or arising under the "Environmental
Laws" (as such term is hereinafter defined), or relating in any way to the
quality of the indoor or outdoor environment at the Property. This release
shall survive the Closing. As used herein, the term "Hazardous Materials" or
"Hazardous Substances" means (i) hazardous wastes, hazardous materials,
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 materials," "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, regulation 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, (E) asbestos, (F) lead in water, paint or elsewhere, (G) radon, (H)
Polychlorinated Biphenyls (PCB's) and (I) ureaformaldehyde.
B. 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 may hereinafter be
specifically set forth in 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 from any liability with respect
to such historical information.
8. CLOSING. The closing ("Closing") of this transaction shall be on
August 30, 1996 ("Closing Date"), at the office of the Seller's attorney, at
which time Seller shall deliver possession of the Property to Purchaser.
9. CLOSING DOCUMENTS.
A. On the Closing Date, Purchaser shall deliver to Seller an
executed closing statement, the balance of the Purchase Price, and such other
documents as may be reasonably required in order to consummate the transaction
as set forth in this Agreement.
B. On the Closing Date, Seller shall deliver to Purchaser
possession of the Property; the Deed subject to the Permitted Exceptions and
those Unpermitted Exceptions waived by Purchaser; a UCC search from appropriate
jurisdictions reflecting no liens against Seller, or a termination statement as
to any lien secured by a UCC filing; an inventory of the Personal Property and
a Bill of Sale for the same (in the form of Exhibit E attached hereto); an
executed closing statement; an executed assignment and assumption of all
service contracts (in the form of Exhibit F attached hereto); an executed
assignment and assumption of all leases and security deposits (in the form of
Exhibit G attached hereto); updated rent roll; a notice to the tenants of the
transfer of title and the assumption by Purchaser of the landlord's obligations
under the leases and the obligation to refund the security deposits (in the
form of Exhibit H attached hereto), the original leases to be delivered to
Purchaser at the Property; a non-foreign affidavit (in the form of Exhibit I
attached hereto) 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 and shall cause the Title Company to deliver the Title Policy subject
only to Permitted Exceptions and Unpermitted Exceptions waived by Purchaser.
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 THIS TRANSACTION FAILS TO
CLOSE DUE TO THE 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. 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 ACTUAL DAMAGES NOT TO EXCEED THE
AMOUNT OF THE EARNEST MONEY THEN ON DEPOSIT WITH THE ESCROW AGENT, PLUS THE
RETURN OF ALL EARNEST MONEY TOGETHER WITH ANY INTEREST ACCRUED THEREON, AND
THIS AGREEMENT SHALL TERMINATE AND THE PARTIES SHALL HAVE NO FURTHER LIABILITY
TO EACH OTHER AT LAW OR IN EQUITY. NOTWITHSTANDING ANYTHING CONTAINED HEREIN
TO THE CONTRARY, IF SELLER'S DEFAULT IS ITS REFUSAL TO DELIVER THE DEED, THEN
PURCHASER WILL BE ENTITLED TO SUE FOR SPECIFIC PERFORMANCE.
12.
A. PRORATIONS. Rents for the month of the Closing (exclusive of
delinquent rents, but including prepaid rents); any previously paid signing
bonus or similar payment relating to any laundry room, cable, telephone or
similar agreement in effect as of the Closing, refundable security deposits
with interest if required by local law (which will be assigned to and assumed
by Purchaser and credited to Purchaser at Closing); refundable and
non-refundable pet and cleaning fees and deposits, water and other utility
charges; fuels; prepaid operating expenses; real and personal property taxes
(as provided for in the next following sentence); and other similar items shall
be adjusted ratably as of 11:59 P.M. on the Closing Date ("Proration Date"),
and credited or debited to the balance of the cash due at Closing. Real
property taxes shall be prorated based on the current year tax bill if
available and if the current year tax bill is not available, then real property
taxes shall be prorated based on an assessed valuation of the Property of
$6,398,000 and a tax rate equal to 102% of the tax rate for the 1995 calendar
year. In addition, the parties shall prorate any applicable waste fees.
All prorations will be final except as to Delinquent Rents referred to in
12B below, and errors in calculation on the closing statement. If special
assessments have been levied against the Property for completed improvements,
then the amount of any installments which are due prior to the Closing Date
shall be paid by the Seller; and the amount of installments which are due after
the Closing Date shall be paid by the Purchaser. All assessments for
incomplete improvements shall be paid by Purchaser.
B. DELINQUENT RENTS. If, as of the Closing Date, any rent is in
arrears ("Delinquent Rent") for thirty (30) days or less, then the first rent
collected by Purchaser will be delivered to Seller for the Delinquent Rent. If
Delinquent Rent is in arrears for more than thirty (30) days, then rents
collected by Purchaser shall first be applied to current rent and then to
Delinquent Rent. Purchaser shall deliver Seller's pro rata share within 10
days of Purchaser's receipt of that Delinquent Rent. Within 120 days after the
Closing Date, Purchaser shall deliver to Seller a reconciliation statement of
rents collected by Purchaser 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 reconciliation statement and if such audit discloses that additional funds
are owing , then the party owing such funds shall promptly pay such sums to the
party so owed. This subparagraph 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
shall be subject to the provisions of Paragraph 10.
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 an entity directly or indirectly controlled by Purchaser. Any
non-permitted 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. Seller hereby
consents to an assignment to an entity which is an affiliate of Purchaser,
provided Purchaser notifies Seller of the assignment at least five (5) business
days prior to the Closing Date.
15. BROKER. The parties hereto hereby each represent and warrant to
the other that neither has retained the services of a broker in connection with
this transaction except for CB Commercial Real Estate Group, Inc. ("CB")
retained by Seller and whose commission will be paid by Seller. Purchaser
agrees to indemnify, defend and hold harmless the Seller and any partner,
affiliate, parent of Seller, and all shareholders, employees, officers and
directors of Seller or Seller's partner, parent or affiliate (each of the above
is individually referred to as a "Seller Indemnitee") from all claims,
including attorneys' fees and costs incurred by a Seller Indemnitee as a result
of anyone's claiming by or through Purchaser any fee, commission or
compensation on account of this Agreement, its negotiation or the sale hereby
contemplated (except for CB). Seller agrees to indemnify, defend and hold
harmless the Purchaser and any partner, affiliate, parent of Purchaser and all
shareholders, employees, officers and directors of Purchaser or Purchaser's
parent or affiliate (each of the above is individually referred to as a
"Purchaser Indemnitee") from all claims, including attorneys' fees and costs
incurred by a Purchaser Indemnitee as a result of anyone's claiming by or
through Seller any fee, commission or compensation on account of this
Agreement, its negotiation or the sale hereby contemplated.
16. DOCUMENTS, INSPECTION OF PROPERTY AND APPROVAL PERIOD.
A. Seller has delivered to Purchaser copies of the most recent
available tax bills, rent rolls, insurance premiums, service contracts, utility
account numbers, year-end 1995 and year-to-date 1996 operating statements
(collectively the "Documents"). All of the Documents shall be subject to
approval by Purchaser by the close of business (5:00 P.M. Central Daylight
Time) on August 9, 1996 ("Approval Period"). During the Approval Period, upon
reasonable notice to the Seller, the Purchaser shall have the right to inspect
and approve the condition of the Property including the interior of the
apartments, during normal business hours. Purchaser shall maintain public
liability insurance policies insuring against claims arising as a result of the
inspections of the Property being conducted by Purchaser. Purchaser agrees to
indemnify, defend, protect and hold Seller harmless from any and all loss,
costs, including attorneys' fees, liability or damages which Seller may incur
or suffer as a result of Purchaser's conducting its inspection and
investigation of the Property including the entry of Purchaser, its employees
or agents and its lender onto the Property, including without limitation,
liability for mechanics' lien claims.
B. Purchaser agrees to defend and hold Seller harmless from any
injuries, damages or claims of any nature whatsoever which Purchaser's
servants, agents or employees may have as a result of Purchaser's inspection of
the Property. Purchaser further agrees to restore any damage to the Property
which may arise as a result of Purchaser's inspection of the Property.
C. If Purchaser disapproves the Documents or the condition of the
Property, in its sole and absolute discretion, it must be by a notice ("Notice
of Disapproval") delivered to Seller and the Escrow Agent prior to the
expiration of the Approval Period. The Notice of Disapproval delivered to
Seller shall be accompanied by copies of all third-party reports ("Reports")
which Purchaser has received during the Approval Period. Upon receipt of the
Notice of Disapproval and copies of the Reports, the Earnest Money plus the
interest accrued thereon shall be returned to the Purchaser. If Purchaser does
not timely deliver a Notice of Disapproval and copies of the Reports to Seller,
then it shall be conclusively presumed that Purchaser has approved the
Documents and the condition of the Property and all Earnest Money plus the
interest accrued thereon shall belong to Seller unless Seller is in default
hereunder.
17. SURVIVAL OF INDEMNITY. Notwithstanding anything in this Agreement to
the contrary, the parties' obligations to indemnify, defend and hold each other
harmless under various provisions of this Agreement shall forever survive the
termination of this Agreement or the Closing and delivery and recording of the
Deed.
18. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
A. Any reference herein to Seller's knowledge, representation,
warranty or notice of any matter or thing, shall only mean such knowledge or
notice that has actually been received by Alan Lieberman and Phillip Schechter,
and any representation or warranty of the Seller is based upon those matters of
which Alan Lieberman and Phillip Schechter have actual knowledge. A copy of
this Paragraph 18 shall be delivered to the resident manager of the Property
within two (2) days after the execution by Seller of this Agreement, with a
request to advise Phillip Schechter within five (5) business days after receipt
by the resident manager as to the accuracy and truthfulness of the
representations and warranties. Phillip Schechter shall notify Purchaser as to
the response of the resident manager by July 22, 1996 if the resident manager
indicated that any of the representations or warranties were incorrect. If Mr.
Schechter fails to so notify Purchaser, Purchaser shall be entitled to conclude
that the resident manager reviewed the representations and warranties and that
they are correct. Any knowledge or notice given, had or received by any of
Seller's agents, servants or employees shall not be imputed to Seller or the
individual partners or the general partner of Seller.
B. Subject to the limitations set forth in subparagraph "A" above,
Seller hereby makes the following representations and warranties, all of which
are made to the Seller's knowledge. The parties agree that the representations
contained herein shall survive Closing for a period of 120 days (i.e. the
claiming party shall have no right to make any claims against the other party
for a breach of a representation or warranty after the expiration of 120 days
immediately following Closing.)
(1) Except as set forth on Exhibit J attached hereto, the
present use and occupancy of the Property conform with applicable building
and zoning laws and Seller has received no written notice that any such
laws, rules or regulations are being violated.
(2) The rent roll attached hereto as Exhibit K and which shall
be updated as of the Closing Date is true and accurate. No tenant under
any lease has any option or right of first refusal to acquire any
ownership interest in the Property or any right to terminate its lease or
is entitled to any rebate or concession except as set forth in its lease
or on Exhibit K.
(3) Except as set forth on Exhibit J attached hereto, Seller
has no knowledge of any pending or threatened litigation, claim, cause of
action or administrative proceeding concerning the Property.
(4) Attached hereto as Exhibit L are copies of all licenses and
permits which are in Seller's possession and all service contracts
affecting the Property (none of which is in default), except for the
management agreement which shall be terminated as of the Closing Date; and
Seller shall not enter into any new service contracts which cannot be
terminated within 30 days written notice or modify or extend any existing
service contracts without the prior consent of Purchaser which consent
shall not be unreasonably withheld or delayed.
(5) Seller has not received any written notice from any tenant
occupying the Property that Seller is in default under that tenant's
lease.
(6) Except as set forth on Exhibit K attached hereto, Seller
has not received from any governmental authority, any written notice of
zoning, building, fire, health code or other violations with respect to
the Property, or any part thereof, that will not have been corrected prior
to Closing solely at Seller's expense.
(7) Seller is duly organized, validly existing, qualified and
empowered to conduct its business, and has full power and authority to
perform and comply with the terms of this Agreement. Neither the
execution and delivery of this Agreement nor its performance will conflict
with or result in the breach of Seller's partnership agreement or any
contract or agreement to which Seller is a party or by which Seller is
bound.
(8) This Agreement is valid and enforceable against Seller in
accordance with its terms and each instrument to be executed by Seller
pursuant to this Agreement or in connection herewith will, when executed
and delivered, be valid and enforceable against Seller in accordance with
its terms.
(9) Seller has not received written notice from any
governmental authority alleging that the Property presently contains
Hazardous Materials or Hazardous Substances.
(10) As of the Closing Date, no leasing commissions will be due
subsequent to the Closing Date.
(11) None of the on-site employees is employed by the Seller.
(12) Through the Closing Date, Seller shall continue to operate,
manage and maintain the Property in the same manner as prior to the
execution of this Agreement.
(13) Seller shall not extend or otherwise renew any lease
without the prior written consent of Purchaser, except for any renewal or
other extension of a lease providing for a monthly rental of not less than
the monthly rental being presently charged for a similar apartment and for
a period of time not to exceed twelve (12) months.
(14) Seller agrees not to distribute the net proceeds of the
Purchase Price up to a maximum amount of $500,000 to its partners for one
hundred twenty (120) days after the Closing Date.
(15) Exhibit B attached hereto is a list of all the personal
property owned by Seller and used in the operation of the Property. The
computer software used at the Property will not be transferred to the
Purchaser.
(16) The unaudited operating statements heretofore or hereafter
delivered to Purchaser by Seller are and shall be true, complete and
correct in all material respects.
C. For the period commencing with the execution of this Agreement,
and expiring at the earlier of a termination of this Agreement or the Closing
Date, Seller will not offer the Property for sale to any other third party.
D. Seller shall furnish to Purchaser unaudited operating
statements, rent rolls and a leasing status report on a monthly basis.
E. Upon at least two (2) days' prior notice, Purchaser shall have
the right, during normal business hours, to visit the Property and the
interiors of the apartments.
F. Seller shall not apply security deposits towards delinquent rent
except for (i) those tenants who have vacated their apartments or (ii) tenants
who are in arrears for rent for more than thirty (30) days and Seller has
commenced the process of evicting the tenant.
G. Seller hereby agrees to remake the aforesaid representations and
warranties at Closing. If at any time after the execution of this Agreement,
Seller becomes aware of information which makes a representation or warranty
contained in this Agreement to become untrue in any material respect, Seller
shall promptly disclose said information to Purchaser. Provided the
representation or warranty was true when made and further provided that Seller
did not take any deliberate actions to cause the representation or warranty in
question to become untrue in any material respect, Seller shall not be in
default under this Agreement and the sole remedy of Purchaser shall be to
terminate this Agreement. Notwithstanding anything contained herein to the
contrary, if the status of any of the tenancies changes from the date of the
rent roll attached hereto and the date of the rent roll delivered at Closing,
provided the change in status is not caused by a breach of Seller's covenants
contained herein, then Purchaser shall not have the right to terminate this
Agreement or make any claim for a breach of a representation or warranty
hereunder involving the rent roll or tenancies thereunder. Purchaser and
Seller are prohibited from making any claims against the other party hereto
after the Closing with respect to any breaches of the other party's
representations and warranties contained in this Agreement that the claiming
party had actual knowledge of prior to Closing.
19. PURCHASER'S REPRESENTATIONS AND WARRANTIES. 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.
20. ENVIRONMENTAL REPORT. Attached to this Agreement as Exhibit M are
the following reports (together, the "Existing Reports") of the Property, which
Seller is delivering to Purchaser, at Purchaser's request: Phase I
Environmental Site Assessment and Limited Asbestos Survey prepared by Law
Associates, Inc. dated July 24, 1991 under Project No. 1391-2075-01. Seller
makes no representation or warranty that the Existing Reports are accurate or
complete. Purchaser hereby releases Seller from any liability whatsoever with
respect to the Existing Reports or, including, without limitation, the matters
set forth in the Existing Reports, the accuracy and/or completeness of the
Existing Reports.
21. LIMITATION OF SELLER'S LIABILITY. No general or limited partner of
Seller, nor any of its respective beneficiaries, shareholders, partners,
officers, agents, 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. Notwithstanding the foregoing to the contrary, for
any claims against Seller following Closing, if Seller fails to retain the net
proceeds of the Purchase Price up to a maximum amount of $500,000 (the "Cap")
for 120 days after the Closing Date, then the general partner of Seller shall
be liable for actual damages sustained by Purchaser as a result of Seller's
breach of a representation or warranty contained in Paragraph 18 of this
Agreement in an amount not to exceed the Cap. The foregoing Cap on liability
for a claim against the Seller following Closing shall not apply, and Seller's
general partner shall be liable, if Seller has entered into leases at the
Property for more than one year in breach of the representation identified in
Paragraph 18(B)(2) hereof and Purchaser makes a claim against Seller for a
breach of said representation within 120 days immediately following Closing.
22. ORGANIZATIONAL DOCUMENTS.
A. On or before the Closing Date, Purchaser will provide Seller's
attorney with copies of its organizational documents, including a certified
copy of its recorded certificate of limited partnership and a true copy of its
Partnership Agreement or a certified copy of its Articles of Incorporation,
corporate resolutions authorizing the transaction, and an incumbency
certificate, whichever is applicable.
B. On or before the Closing Date, Seller will deliver copies of its
partnership agreement and appropriate certificates of authority to the
Purchaser.
23. TIME OF ESSENCE. Time is of the essence of this Agreement.
24. 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 by facsimile or made by United States registered or
certified mail addressed as follows:
TO SELLER: c/o The Balcor Company
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attn: Ilona Adams
with copies to: The Balcor Company
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attn: Al Lieberman
708/267-1600
708/317-4462 (FAX)
and
Andrew D. Small, Esq.
Katten Muchin & Zavis
Suite 2100
525 W. Monroe Street
Chicago, Illinois 60661
312/902-5532
312/222-1061 (FAX)
TO PURCHASER: Alan George
c/o Equity Residential Properties Trust
Two North Riverside Plaza
Suite 450
Chicago, Illinois 60606-2639
312/466-3932
312/454-9678 (FAX)
with a copy to: Bruce Strohm
c/o Equity Residential Properties Trust
Two North Riverside Plaza
Suite 450
Chicago, Illinois 60606-2639
312/466-3624
312/454-0434 (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 same day if sent by facsimile before the close of business,
or the next day if sent by facsimile after the close of business, 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 or by
facsimile 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.
25. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute
three (3) copies of this Agreement and three (3) copies of the Escrow Agreement
and forward them to Seller for execution. Seller will forward one (1) copy of
the executed Agreement to Purchaser and will forward the following to the
Escrow Agent:
A. One (1) fully executed copy of this Agreement, and
B. 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 the Purchaser and the Seller. Purchaser shall deposit
the initial $300,000 of Earnest Money immediately following receipt by
Purchaser of a fully executed Purchase Agreement and Escrow Agreement.
26. GOVERNING LAW. The provision contained herein with reference to
retention of the Earnest Money in the event of Purchaser's default shall be
governed by the laws of the State of Illinois. The remaining provisions of
this Agreement shall be governed by the laws of the State of North Carolina.
27. 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.
28. 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.
29. 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.
30. FINANCIAL STATEMENTS. Seller acknowledges that audited financial
statements pertaining to the Property for one prior calendar year of operation
and the portion of the calendar year in which the Closing occurs up to the
Closing Date are required to be filed by the Purchaser with the Securities and
Exchange Commission after the Closing. Accordingly, Seller agrees that for a
period of six (6) months after the Closing Date it shall provide Purchaser and
its representatives with access to Seller's books and records after the Closing
upon reasonable advance notice in order to conduct the required audit, which
shall be done at Purchaser's cost and expense.
31. CONVEYANCE OF PARTNERSHIP INTERESTS. If requested to do so by
Purchaser, Seller hereby agrees, at no cost or expense to Seller, to cooperate
in good faith with Purchaser in structuring the conveyance of Property by the
Seller to Purchaser as a conveyance of title to such Property by the Seller
into a partnership or limited liability company having the Seller and/or
affiliates of the Seller as its sole partners (or members) and then, at
Closing, assigning to Purchaser the partnership (or membership) interests in
the partnership (or limited liability company). In such case, the Purchaser
hereby agrees to indemnify and hold the Seller harmless from and against any
and all loss, cost, expense, liability or damage (including reasonable
attorneys fees) incurred by Seller arising out of Seller's conveyance in and
out of such partnership (or limited liability company) provided that such loss,
cost, expense, liability or damage (including reasonable attorneys fees) would
not have been suffered or incurred by such Seller if such Property had been
conveyed directly by Seller to Purchaser. This Paragraph 31 shall survive the
Closing and the delivery of the Deed.
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date set forth above.
Executed by Purchaser on PURCHASER:
July 12, 1996.
ERP OPERATING LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Equity Residential Properties Trust,
a Maryland real estate investment trust
By: /s/Alan W. George
------------------------------
Name: Alan W. George
------------------------------
Title: Senior Vice President
------------------------------
Executed by Seller on SELLER:
July 15, 1996.
WOODSCAPE LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Woodscape Partners, Inc., an Illinois
corporation, its general partner
By: /s/Phillip A. Schechter
------------------------------
Name: Phillip A. Schechter
------------------------------
Title: Authorized Agent
------------------------------
BROKER JOINDER
of CB Commercial Real Estate Group, Inc. ("CB") 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 _______ __, 1996 between Seller and CB (the "Listing Agreement"). CB
acknowledges that payment of the aforesaid fee or commission is conditioned
upon the Closing and the receipt of the Purchase Price by the Seller. CB
agrees to deliver a receipt to the Seller at the Closing for the fee or
commission due CB and a release, in the appropriate form, stating that no other
fees or commissions are due to it from Seller or Purchaser.
CB COMMERCIAL REAL ESTATE GROUP, INC.
By:
------------------------------------
EXHIBITS
A - Legal
B - Personal Property
C - Escrow Agreement
D - Deed
E - Bill of Sale
F - Assignment of Service Contracts
G - Assignment of Leases and Security Deposits
H - Notice to Tenants
I - Non-Foreign Affidavit
J - Compliance with Laws and Notice of Litigation
K - Rent Roll
L - Licenses, Permits and Service Contracts
M - Existing Reports
July 22, 1996
VIA FACSIMILE MAIL
Woodscape L.P. The Balcor Company Daniel J. Perlman, Esq.
c/o The Balcor Company 2355 Waukegan Road Katten Muchin & Zavis
2355 Waukegan Road Suite A200 Suite 2100
Suite A200 Bannockburn, IL 60015 Chicago, IL 60661
Bannockburn, IL 60015 Attn.: Al Lieberman
Attn.: Ilona Adams
Re: Agreement of Sale, dated as of the 15th day of July, 1996
(the "Agreement") between Woodscape Limited Partnership,
as Seller, and ERP Operating Limited Partnership, as Purchaser, for
the purchase of Woodscape Apartments, Raleigh, North Carolina
(the "Property").
Dear Ms. Adams and Messrs. Lieberman and Perlman:
Purchaser hereby requests an extension of the Approval Period, as such
term is defined in Section 16(A) of the Agreement, from August 9, 1996 until
5:00 CDT on August 16, 1996. Please acknowledge Seller's acceptance of this
modification to the Agreement by executing this letter in the space provided
below and returning it via facsimile mail to Purchaser.
ERP OPERATING LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Equity Residential Properties Trust,
a Maryland Real Estate Investment
Trust, its general partner
By: /s/ Shelley L. Dunck
------------------------------------
Shelley L. Dunck
Vice President
Approved and Accepted this 22nd day of July, 1996
WOODSCAPE LIMITED PARTNERSHIP, an Illinois
limited partnership
By: Woodscape Partners, Inc., an Illinois corporation
By: /s/ Alan G. Lieberman
------------------------------
Alan G. Lieberman
Senior Vice President