AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), is entered into as of the 30th
day of October, 1996, by and between AMBASSADOR APARTMENTS, L.P., a Delaware
limited partnership ("Purchaser"), and LAKE SUN PARTNERS LIMITED PARTNERSHIP,
an Illinois limited partnership ("Seller").
W I T N E S S E T H:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to sell
at the price of Twenty Four Million Dollars ($24,000,000.00) (the "Purchase
Price"), that certain property commonly known as The Sun Lake Apartments, Lake
Mary, Florida legally described on Exhibit A attached hereto (the "Property").
The Property shall include:
1.1. All of the land situated in unincorporated Lake Mary, Seminole
County, Florida described on Exhibit A, together with all of the rights,
privileges, profits, easements and appurtenances belonging or appertaining to
such land, including, without limitation, any right, title and interest in and
to streets, alleys, open or proposed roads, and rights-of-way adjacent to such
land and all right, title and interest of Seller, if any, in and to any award
made or to be made in lieu thereof and in any grade of street or otherwise and
in any water, sewer and utility pipes of and facilities in or appurtenant
thereto and all inchoate rights, if any, including without limitation, inchoate
rights of adverse possession (such land and all such rights, privileges,
easements and appurtenances are collectively referred to herein as the "Land").
1.2. The 600 unit apartment complex, ancillary parking lots, and any and
all other improvements and structures located on, over, under or in the Land
and any and all fixtures, facilities and other property attached to such
improvements or structures (hereinafter collectively called the
"Improvements"). The Land and Improvements are collectively referred to as the
"Real Estate".
1.3. The personal property set forth on Exhibit B attached hereto (the
"Personal Property"), together with Seller's right, title and interest, if any,
in fixtures and other personal and tangible property or interests therein owned
by Seller located at the Property, including, but not limited to, in the
heating, sprinkler, plumbing, air conditioning and ventilation systems,
furniture, appliances, blinds, offices, equipment and furniture, supplies,
replacements, computer hardware, machinery, tools, equipment and any other
personal property or interest therein owned by Seller located on the Real
Estate or any portion thereof between the date hereof and the Closing Date
(hereinafter defined), or used in connection with the ownership, operation
management or use of the Real Estate or any portion thereof (collectively,
"Personal Property Rights"), specifically excluding from the definitions of
Personal Property and Personal Property Rights all computer software owned by
Seller or used in connection with the Real Estate.
1.4. To the extent transferrable, all of Seller's right, title and
interest, if any, in any intangible property or interest therein owned or held
by Seller between the date hereof and the Closing Date in connection with the
Real Estate (or any portion thereof), the Personal Property or any business or
businesses conducted by Seller on the Real Estate (or any portion thereof), in
connection with the ownership, operation or use thereof, including (1) any
trade style or trade name or mark and telephone and facsimile numbers used in
connection with the Real Estate; (2) any contract rights to the Service
Contracts (hereinafter defined); (3) all "as-built" plans and specifications
and other construction drawings of any type in Seller's possession relating to
the Real Estate; (4) all booklets and manuals, utility contracts, guarantees
and warranties (including guarantees and warranties pertaining to the
construction of the Improvements or pertaining to the acquisition of the Real
Estate (or any portion thereof) or any Personal Property; (5) all licenses and
other governmental permits, approvals and permissions (including, without
limitation, certificates of occupancy) relating to the Real Estate (or any
portion thereof) or the ownership, operation or use thereof and (6) all
non-proprietary tests, studies and reports prepared by third parties which are
in Seller's possession relating to the Real Estate (all of the forgoing are
collectively referred to as the "Intangible Property").
1.5. All leases, occupancy, license or concession agreements for any units
or space in the Improvements or any portion of the Real Estate (each, a "Lease"
and collectively, the "Leases");
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as follows:
2.1. Upon the execution of this Agreement, the sum of Three Hundred
Thousand Dollars ($300,000.00) (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. Notwithstanding anything to the
contrary set forth in this Agreement or any Exhibit, all interest on the
Earnest Money shall accrue for the benefit of the party to whom the Earnest
Money is payable; and
2.2. On the "Closing Date" (hereinafter defined), subject to the
satisfaction or waiver of the conditions for closing set forth in this
Agreement, the balance of the Purchase Price (i.e., $24,000,000.00 less (a) the
then outstanding principal amount of the Bonds (hereinafter defined) and (b)
the amount of the Earnest Money, 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 (the "Title Issuer") dated August 21, 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
assessments, special district taxes and related charges not yet due and
payable; (c) matters shown on the "Survey" (hereinafter defined) except for
those matters set forth on Schedule 3.1; (d) matters caused by the actions of
Purchaser; (e) the Existing Bond and Mortgage Documents including, without
limitation, the Regulatory Agreement (hereinafter defined); (f) the title
exceptions set forth in Schedule B-1 of the Title Commitment as Numbers 4 a.
and b. and in Section B-II 8 through 18 inclusive, except for those matters set
forth on Schedule 3.1, to the extent that same affect the Property; and (g)
those Leases set forth in the Rent Roll (hereinafter defined) delivered
pursuant to the provisions of Paragraph 7.1 that have not expired or been
sooner terminated as of the date of Closing and any additional tenant leases
entered into after the date of the Rent Roll in accordance with the provisions
of this Agreement, all as tenants only. 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, if any, waived by Purchaser
(the "Title Policy"). Seller and Purchaser shall share equally the costs of
the Title Commitment and Title Policy (including all search and exam fees), 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 Blount
Sikes & Associates dated February 17, 1989 and updated August 28, 1995 and June
21, 1996 (the "Survey"). Seller and Purchaser shall each pay for one-half of
the cost of updating the Survey. Purchaser hereby acknowledges that all
matters disclosed by the 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 not survive the termination of this Agreement.
3.4. Seller will furnish Purchaser searches, dated not more than 2 weeks
prior to the Closing Date, of all Uniform Commercial Code financing statements
and tax liens (including, without limitation, Tangible Taxes) related to the
Property filed against Seller, as debtor, with the appropriate public officials
of the States of Florida and Illinois and the appropriate public officials
(including land records) of Seminole County, Florida (the "Searches").
4. PAYMENT OF CLOSING COSTS.
4.1. In addition to the costs set forth in Paragraphs 3.1 and 3.2, Seller
shall pay the transfer tax associated with the sale, and Purchaser and Seller
shall each pay for one-half of the costs of the documentary stamps to be paid
with reference to the "Deed" (hereinafter defined) and all other stamps,
intangible, mortgage 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 not otherwise provided for elsewhere in this
Agreement.
4.2. Purchaser shall pay all costs and expenses incurred in satisfying the
"Conditions Precedent" described in Sections 18.2.1, 18.2.2, 18.2.3 and 18.2.4
hereof.
5. CONDITION OF TITLE.
5.1. If, prior to "Closing" (as hereinafter defined), a date-down to the
Title Commitment discloses any new Unpermitted Exception, Seller shall have
thirty (30) days from the date of the date-down to the Title Commitment, 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 (a "Minor Unpermitted
Exception"), removed from the Title Commitment or to have the Title Insurer
commit to insure against loss or damage that may be occasioned by such
Unpermitted Exceptions, or (ii) have the right, but not the obligation, to bond
over, cure and/or have any Unpermitted Exceptions which, in the aggregate,
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 as reasonably satisfactory to Purchaser. In such event,
the time of Closing shall be delayed, if necessary, to give effect to said
aforementioned time periods, but in no event may Closing be extended more than
2 business days after the thirty (30) day period. 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; provided, however,
and notwithstanding anything contained herein to the contrary, if the
Unpermitted Exception which gives rise to Purchaser's right to terminate was
recorded against the Property as a result of the affirmative, willful action of
Seller (and not by an unrelated third party) which prevents the sale of the
Property in accordance with the terms hereof or if Seller is able to bond over,
cure or remove a Minor Unpermitted Exception for a cost not to exceed $50,000
or the Title Insurer is willing to insure over a Minor Unpermitted Exception
for a cost not to exceed $50,000 in accordance with the terms hereof and Seller
fails to expend said funds in either case, then Purchaser shall have the
additional rights contained in Paragraph herein. 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 Real Estate to
Purchaser by special warranty deed (the "Deed") in recordable form subject only
to the Permitted Exceptions and any Unpermitted Exceptions waived by Purchaser.
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
6.1. Except as provided in the indemnity provisions contained in Paragraph
7.1 of this Agreement, Seller shall bear all risk of loss with respect to the
Property up to the earlier of the dates upon which either possession or title
is transferred to Purchaser in accordance with this Agreement. Notwithstanding
the foregoing, in the event of damage to the Property by fire or other casualty
prior to the Closing Date, repair of which would cost less than or equal to
$100,000.00 (as initially determined by Seller in good faith and as reasonably
acceptable to Purchaser) Purchaser shall not have the right to terminate its
obligations under this Agreement by reason thereof, but Purchaser shall have
the right to elect (i) to require Seller to repair and restore the Property (in
which case the Closing Date shall be extended until completion of such
restoration, which completion shall be diligently pursued in a good and
workmanlike manner), (ii) to require Seller 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, or (iii) or to take title to the Property in accordance with the
terms of this Agreement, with an abatement of the Purchase Price in the amount
agreed to by Seller and Purchaser, as described above and without an assignment
or transfer of insurance proceeds. 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 initially determined by Seller in good
faith and as reasonably acceptable to Purchaser), 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. In the event
that in accordance with the foregoing provisions the insurance proceeds paid or
payable to Seller are assigned and transferred to Purchaser, (a) Seller shall
pay directly to Purchaser the amount of any deductible, and (b) Seller agrees
to cooperate with Purchaser, at no expense or liability to Seller, in enforcing
any rights under Seller's insurance policies, which obligations shall survive
the Closing and delivery of the Deed.
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, in the opinion of Purchaser, the taking of any
part of the Property may: (i) impair access to the Property; (ii) cause any
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) adversely impair the use of
the Property as it is currently being operated or used (hereinafter
collectively referred to as a "Condemnation 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,
whether prior to or at Closing.
6.3. Purchaser shall then notify Seller, within ten (10) 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 ten (10) business day period, Purchaser shall
be deemed to have elected to exercise its rights under Paragraph 6.2.1. If
between the date of this Agreement and the Closing Date, any condemnation or
eminent domain proceedings are initiated which do not constitute a Condemnation
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. In the event that Purchaser exercises its rights under Paragraph
6.2.2, Seller agrees to cooperate with Purchaser, at no expense or liability to
Seller, in enforcing any right in and to any award made in connection with a
condemnation or eminent domain proceeding. In no event shall Seller agree to
settle any claim without the prior written consent of Purchaser. Such
obligations shall survive the Closing and delivery of the Deed.
7. INSPECTION AND AS-IS CONDITION.
7.1. During the period commencing on August 1, 1996 and ending at 5:00
p.m. Chicago time on October 4, 1996 (said period being herein referred to as
the "Inspection Period"), Purchaser and the agents, engineers, employees,
contractors and surveyors retained by Purchaser have entered upon the Property,
to inspect the Property, including a review, audit, transcription or copy of
leases, books and records, cash deposit ledgers and maintenance logs maintained
at the Property, and to conduct and prepare such studies, tests and surveys as
Purchaser deemed reasonably necessary and appropriate. Purchaser may continue
to enter upon the Property after the termination of the Inspection Period. In
connection with Purchaser's review of the Property, Seller has delivered to
Purchaser copies of the current rent roll for the Property, the tax and
insurance bills for the last 3 years, utility account numbers, service
contracts, unaudited monthly 1995 and year-to-date operating statements, and
copies of Existing Bond and Mortgage Documents. Furthermore, if the following
are reasonably available to Seller, Seller shall deliver to Purchaser plans and
specifications.
All of the foregoing tests, investigations and studies to be conducted
under this Paragraph 7.1 by Purchaser are 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, with
the consent of Seller, which consent shall not be reasonably conditioned,
delayed or denied.
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.
Purchaser shall have no right to terminate this Agreement on account of
the results of its Inspection. However, Purchaser shall have the right to
terminate this Agreement by giving written notice of such termination to Seller
at any time prior to October 30, 1996 if (i) Purchaser's board of directors
does not approve this Agreement on or before October 30, 1996, (ii) or
Purchaser objects to any of the information set forth on Schedule 16.2.1. If
written notice is not received by Seller pursuant to this Paragraph 7.1 prior
to October 30, 1996 at 5:00 p.m., then the right of Purchaser to terminate this
Agreement pursuant to this Paragraph 7.1 on account of the disapproval by
Purchaser's board of directors shall be waived. If Purchaser terminates this
Agreement by written notice to Seller prior to October 30, 1996 at 5:00 p.m.,
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, the terms of this Paragraph 7.1, shall
survive the Closing and the delivery of the Deed and termination of this
Agreement.
7.2. Purchaser acknowledges and agrees that it will be purchasing the
Property and the Personal Property based solely upon its inspections and
investigations of the Property and the Personal Property, and that Purchaser
will be purchasing the Property and the Personal Property "AS IS" and "WITH ALL
FAULTS", based upon the condition of the Property and the Personal Property as
of the date of this Agreement, wear and tear and loss by fire or other casualty
or condemnation excepted. Without limiting the foregoing, Purchaser
acknowledges that, except as may otherwise be specifically set forth elsewhere
in this Agreement, neither Seller nor its consultants, brokers or agents have
made any representations or warranties of any kind upon which Purchaser is
relying as to any matters concerning the Property or the Personal Property,
including, but not limited to, the condition of the land or any improvements
comprising the Property, the existence or non-existence of "Hazardous
Materials" (as hereinafter defined), economic projections or market studies
concerning the Property, any development rights, taxes, bonds, covenants,
conditions and restrictions affecting the Property, water or water rights,
topography, drainage, soil, subsoil of the Property, the utilities serving the
Property or any zoning or building laws, rules or regulations or "Environmental
Laws" (hereinafter defined) affecting the Property. Seller makes no
representation or warranty that the Property complies with Title III of the
Americans with Disabilities Act or any fire code or building code. Purchaser
hereby releases Seller and the Affiliates of Seller from any and all liability
in connection with any claims which Purchaser may have against Seller or the
Affiliates of Seller, and Purchaser hereby agrees not to assert any claims for
contribution, cost recovery or otherwise, against Seller or the Affiliates of
Seller, relating directly or indirectly to the existence of asbestos or
Hazardous Materials on, or environmental conditions of, the Property, whether
known or unknown. As used herein, "Environmental Laws" means all federal,
state and local statutes, codes, regulations, rules, ordinances, orders,
standards, permits, licenses, policies and requirements (including consent
decrees, judicial decisions and administrative orders) relating to the
protection, preservation, remediation or conservation of the environment or
worker health or safety, all as amended or reauthorized, or as hereafter
amended or reauthorized, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.
Section 9601 et seq., the Resource Conservation and Recovery Act of 1976
("RCRA"), 42 U.S.C. Section 6901 et seq., the Emergency Planning and Community
Right-to-Know Act ("Right-to-Know Act"), 42 U.S.C. Section 11001 et seq., the
Clean Air Act ("CAA"), 42 U.S.C. Section 7401 et seq., the Federal Water
Pollution Control Act ("Clean Water Act"), 33 U.S.C. Section 1251 et seq., the
Toxic Substances Control Act ("TSCA"), 15 U.S.C. Section 260c1 et seq., the
Safe Drinking Water Act ("Safe Drinking Water Act"), 42 U.S.C. Section 300f et
seq., the Atomic Energy Act ("AEA"), 42 U.S.C. Section 2011 et seq., the
Occupational Safety and Health Act ("OSHA"), 29 U.S.C. Section 651 et seq., and
the Hazardous Materials Transportation Act (the "Transportation Act"), 49
U.S.C. Section 1802 et seq. As used herein, "Hazardous Materials" means:
(1) "hazardous substances," as defined by CERCLA; (2) "hazardous wastes," as
defined by RCRA; (3) any radioactive material including, without limitation,
any source, special nuclear or by-product material, as defined by AEA; (4)
asbestos in any form or condition; (5) polychlorinated biphenyls; and (6) any
other material, substance or waste to which liability or standards of conduct
may be imposed under any Environmental Laws. Notwithstanding anything
contained herein to the contrary, the terms of this Paragraph 7.2 shall survive
the Closing and the delivery of the Deed and termination of this Agreement.
7.3. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller owned the Property. Such financial information is the
financial information relied upon by Seller for reporting purposes to Seller's
partners and in the preparation of Seller's tax returns. Seller and Purchaser
hereby acknowledge that such information has been provided to Purchaser at
Purchaser's request solely as illustrative material. Except as otherwise
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 and the Affiliates of Seller from
any liability with respect to such historical information. Notwithstanding
anything contained herein to the contrary, the terms of this Paragraph 7.3
shall survive the Closing and the delivery of the Deed and termination of this
Agreement.
7.4. Seller has provided to Purchaser a true and correct copy the
following existing reports: Phase I Environmental Site Assessment prepared by
Law Associates, Inc. dated October 15, 1991 and the Phase I Environmental
Assessment Report prepared by Consulting Solutions, Inc. dated July 25, 1995
("Existing Reports"). Seller makes no representation or warranty concerning
the accuracy or completeness of the Existing Reports. Seller agrees to
cooperate with Purchaser in obtaining a "reliance letter" from Law Associates,
Inc. Purchaser hereby releases Seller and the Affiliates of Seller from any
liability whatsoever with respect to the Existing Reports, or, including,
without limitation, the matters set forth in the Existing Reports, and the
accuracy and/or completeness of the Existing Reports. Furthermore, Purchaser
acknowledges that it will be purchasing the Property with all faults disclosed
in the Existing Reports. Notwithstanding anything contained herein to the
contrary, the terms of this Paragraph 7.4 shall survive the Closing and the
delivery of the Deed and termination of this Agreement.
7.5. Between the date of the execution of this Agreement and the Closing
Date, Seller shall:
7.5.1. operate and manage the Property in the same manner that it
has managed, maintained and operated the Property during the period of Seller's
ownership, subject to reasonable wear and tear and casualty (subject to the
provisions of Paragraph 6);
7.5.2. keep and perform all of the material obligations to be
performed by the Seller under each and every of the Leases and the Service
Contracts as performed by Seller in the ordinary course of its business;
7.5.3. neither execute any new lease nor renew or modify any
existing Lease without Purchaser's prior written consent. However, Purchaser's
consent shall not be required if such lease, as entered into, renewed or
modified is made in accordance with each of the following criteria:
(A) such lease is on the form presently used by Seller, a copy of
which has been furnished by Seller's manager to Purchaser;
(B) the terms of such lease is for not less than six (6) months or
more than one (1) year;
(C) such lease provides for the payment of rent in any amount equal
to or greater than the rent charged by Seller under leases for comparable units
in the Property executed within three (3) months preceding the date of this
Agreement, such rent being free of concession or incentives that would result
in more than one month's free rent or have value in excess of one (1) month's
rental; and
(D) the tenant under such lease is not related to or affiliated with
Seller.
No such lease shall violate the terms of any of the Lease or any of the
Existing Bond and Mortgage Documents.
Subject to the foregoing, Seller shall, in the ordinary course of its
business, seek tenants for all units that are now vacant or that will become
vacant prior to the end of the month following the Closing and render vacant
and unoccupied apartment units market-ready at current market rates. Without
the prior written consent of Purchaser, which consent shall not be unreasonable
withheld, Seller shall not terminate any of the Leases unless the tenant
thereunder shall have defaulted under its lease. Seller shall not accept from
any of the tenants of the Property payment of rent more than one month in
advance or apply any security deposit to rent due for any tenant unless such
tenant shall be in default under its lease. Seller shall furnish Purchaser
with monthly Rent Rolls, which shall show all leases entered into by Seller
after the date hereof;
7.5.4. Not mortgage, hypothecate or further encumber the Property or
any portion thereof or permit any liens on the Property or any portion thereof
to arise by operation of laws, or otherwise;
7.5.5. Maintain its current insurance coverage on the Property, in
full force and effect, through the Closing Date;
7.5.6. Not enter into any new or renewal Service Contract or any
other agreement relating to the Property or extension or cancellation thereof
except in the ordinary course of business and except as may be canceled upon
thirty (30) days notice, without the prior consent of Purchaser, which consent
shall not be unreasonably withheld;
7.5.7. Continue Seller's existing program of maintenance, repair and
replacement, in the ordinary course of Seller's business;
7.5.8. Except in connection with replacements, repairs and
maintenance, not convey or remove from the Property or any portion thereof any
of the Improvements, Personal Property or Intangible Property;
7.5.9. Promptly send to Purchaser copies of all written notices it
receives from governmental or regulatory authorities concerning Seller, or the
Property or the operation, use or maintenance thereof; and
7.5.10. Maintain and repair the Property in the ordinary course of
Seller's business.
8. CLOSING.
8.1. The closing of this transaction (the "Closing") shall be on November
15, 1996 (the "Closing Date"), at the office of Title Insurer, First American
Title Insurance Company, at which time Seller shall deliver possession of the
Property to Purchaser. However, in the event that all of the Conditions
Precedent have not been satisfied prior to September 12, 1996, Seller shall
grant an extension of the Closing Date to December 15, 1996 on the condition
that Purchaser demonstrates to Seller's reasonable satisfaction that it (i) has
submitted all applications required to meet the obligations under Paragraph
18.2; (ii) has submitted all information that any of the Issuer, Trustee,
Berkshire (hereinafter defined), Fannie Mae and any other applicable parties
have requested as of the date Purchaser has requested such extension from
Seller; (iii) has paid all fees and expenses relating to such applications then
payable to or at the direction of any of the Issuer, Trustee, Berkshire, Fannie
Mae and any other applicable parties; (iv) has provided Seller with copies of
all documents that Purchaser has received from any of the Issuer, Trustee,
Berkshire, Fannie Mae and any other applicable parties; and (v) is using its
commercially reasonable best efforts to obtain the approval of such
applications. Alternatively, Seller may extend the Closing Date, in its sole
discretion, to December 15, 1996, upon written notice to Purchaser to such
effect. This transaction shall be closed with escrow instructions acceptable
to Seller and Purchaser to the Title Insurer, in accordance with the general
provisions of the usual and customary form of deed and money escrow for similar
transactions as 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. Seller
shall deliver to Title Insurer any customary affidavit in connection with a New
York style closing. Unless otherwise specified in this Agreement, all closing
and escrow fees shall be divided equally between the parties hereto.
8.2. On the Closing Date, the Purchaser shall assume all obligations of
the Seller under the Bonds, including all payment obligations and all other
obligations, arising on or after the Closing Date as evidenced and/or secured
by, among other items, the Indenture (hereinafter defined), the Financing
Agreement (hereinafter defined), the Regulatory Agreement, the Multifamily Note
(hereinafter defined) and the Multifamily Deed to Secure Debt (hereinafter
defined), which Bonds have an outstanding principal balance of approximately
$15,535,000.00 as of November 1, 1996. Purchaser shall not assume or be liable
for any obligation of Seller arising prior to the Closing Date regardless of
when a claim respecting such obligation is first raised. Seller hereby
authorizes Purchaser to discuss any and all issues relating to the Bonds and
the Existing Bond and Mortgage Documents with Fannie Mae, the Issuer, the
Trustee, Berkshire (all such terms, hereinafter defined) and any other
interested parties. Seller will reasonably cooperate with Purchaser in
facilitating such discussions.
9. CLOSING DOCUMENTS.
9.1. On or prior to the Closing Date, Seller and Purchaser shall execute
and deliver to one another a joint closing statement. In addition, Purchaser
shall deliver to Seller the balance of the Purchase Price, an assumption of the
documents set forth in Paragraph 9.2.3, 9.2.4 and 9.2.13 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), duly
executed and acknowledged by Seller, subject to Permitted Exceptions and those
Unpermitted Exceptions waived by Purchaser;
9.2.2. a special warranty bill of sale as to the Personal Property
and a quit claim bill of sale as to the Personal Property Rights conveying the
Personal Property and Personal Property rights (in the form of Exhibit F
attached hereto), duly executed and acknowledged by Seller;
9.2.3. an assignment and assumption of Intangible Property (in the
form attached hereto as Exhibit G), duly executed and acknowledged by Seller,
including, without limitation, the service contracts listed in Exhibit H (the
"Service Contracts"). However, if a Service Contract is not assignable or
assumable and Purchaser does not want to assume such Service Contract, Seller
will cooperate with Purchaser, at no cost or expense to Seller, to terminate
such Service Contract;
9.2.4. an assignment and assumption of leases and security deposits
(in the form attached hereto as Exhibit I), duly executed and acknowledged by
Seller;
9.2.5. non-foreign affidavit (in the form of Exhibit J attached
hereto);
9.2.6. original, and/or copies of, leases, lease files, service
contracts and all other contracts, agreements or other documentation assigned
to Purchaser in accordance with Paragraphs 9.2.3 and 9.2.4 affecting the
Property in Seller's possession, which shall be delivered at the Property;
9.2.7. all documents and instruments reasonably required by the
Title Insurer to issue the Title Policy;
9.2.8. possession of the Property to Purchaser, subject to the terms
of leases;
9.2.9. evidence of the termination of the management agreement;
9.2.10. notice to the tenants of the Property of the transfer of
title and assumption by Purchaser of the landlord's obligation under the leases
and the obligation to refund the security deposits (in the form of Exhibit K);
9.2.11. an updated Rent Roll certified as true and correct and dated
no later than two (2) business days prior to Closing;
9.2.12. originals, to the extent in Seller's possession or control,
or copies of Existing Bond and Mortgage Documents;
9.2.13. an assignment and assumption of Existing Bond and Mortgage
Documents (in the form of Exhibit M) duly executed and acknowledged by Seller;
9.2.14. an opinion of bond counsel approved by Purchaser satisfying
the requirements of Paragraph 18.2.2 below; and
9.2.15. a certificate of Seller recertifying that the representations
and warranties made in this Agreement remain true, in all material respects, as
of the Closing, or specifying such ways in which they do not remain true, and
if any such representations or warranties do not remain true in all material
respects, Purchaser may terminate this Agreement, in which event the Earnest
Money deposited by Purchaser shall immediately be paid to Purchaser, with
interest thereon. The terms of this paragraph 9.2.15 shall survive termination
of this Agreement.
10. PURCHASER'S DEFAULT. 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 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 (i) ITS (AND NOT AN UNRELATED THIRD PARTY'S) AFFIRMATIVE,
WILLFUL ACTION WHICH RESULTS IN THE RECORDING OF AN ENCUMBRANCE AGAINST THE
PROPERTY WHICH PREVENTS THE SALE OF THE PROPERTY IN ACCORDANCE WITH THE TERMS
HEREOF OR WHICH GIVES RISE TO PURCHASER'S RIGHT TO TERMINATE THIS AGREEMENT
PURSUANT TO PARAGRAPH 5 HEREOF; (ii) ITS FAILURE TO EXPEND $50,000 IF (a)
SELLER IS ABLE TO BOND OVER, CURE OR REMOVE A MINOR UNPERMITTED EXCEPTION FOR A
COST NOT TO EXCEED $50,000 OR (b) THE TITLE INSURER IS WILLING TO INSURE OVER A
MINOR UNPERMITTED EXCEPTION FOR A COST NOT TO EXCEED $50,000 IN ACCORDANCE WITH
THE TERMS HEREOF OR (iii) ITS WILLFUL REFUSAL TO DELIVER THE DEED, THEN
PURCHASER WILL BE ENTITLED TO SUE FOR SPECIFIC PERFORMANCE.
12. PRORATIONS.
12.1. Rents (exclusive of delinquent rents, but including prepaid rents);
prepaid associations dues, refundable security deposits (which will be assigned
to and assumed by Purchaser and credited to Purchaser at Closing); interest on
and any fees including, without limitation, credit enhancement, issuer or
trustee fees respecting the Bonds; water and other utility charges, if any;
fuels; prepaid reasonable and customary operating expenses; real and personal
property taxes; and other similar items shall be adjusted ratably as of 11:59
p.m. on the day prior to the Closing Date, and credited against the balance of
the cash due at Closing. To the extent any escrows or bond repayment deposits
for taxes and insurance established in connection with the Bonds or Existing
Bond and Mortgage Documents are not refunded to Seller at Closing, the proceeds
in said escrows shall be assigned to Purchaser and the amounts thereof shall be
a credit to Seller at the 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 12.2 below and except for real estate taxes which will be reprorated
upon receipt of actual bills. If any unit has remained vacant for more than 9
days without being made "rent ready", Seller will give Purchaser a credit of
$250 for such unit for cleaning, painting touch-up, carpet shampoo and minor
appliance repair. If such a unit requires carpet replacement or other
renovation not covered by the preceding sentence, Purchaser and Seller will
agree on the amount of the credit to Purchaser. If Seller receives a credit
for a utility deposit, Seller shall execute an assignment thereof substantially
in the form attached as Exhibit N.
12.2. All monies received after Closing by Purchaser from any tenant of
the Property who is indebted under a lease for rent for any period prior to the
Closing Date will first be applied to rent or other charges currently due to
Purchaser under the applicable lease. Any balance remaining after the
application of such monies to current rent shall be deemed a "Post-Closing
Receipt", but only to the extent such pre-closing indebtedness has not been
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 good faith efforts to collect all amounts which, upon
collection, would constitute Post-Closing Receipts hereunder. Within 120 days
after the Closing Date, Purchaser shall deliver to Seller a reconciliation
statement of Post-Closing Receipts through the first 90 days after the Closing
Date. Upon the delivery of the Post-Closing Receipts reconciliation, Purchaser
shall deliver to Seller any Post-Closing Receipts owing to Seller and not
previously delivered to Seller in accordance with the terms hereof. Paragraph
12.2 of this Agreement shall survive the Closing and the delivery and recording
of the Deed.
13. RECORDING. Neither this Agreement nor a memorandum thereof shall be
recorded and the act of recording by Purchaser shall be an act of default
hereunder by Purchaser and subject to the provisions of Paragraph 10 hereof.
14. ASSIGNMENT. Except for any affiliate of Purchaser or an entity that is
directly owned or controlled by Purchaser or an entity in which Purchaser has
an ownership interest and is a general partner with the power and authority
customarily held by a general partner (each, a "Permitted Assignee"), Purchaser
shall not have the right to assign its interest in this Agreement without the
prior written consent of the Seller. Except for any assignment to a Permitted
Assignee, any assignment or transfer of, or attempt to assign or transfer,
Purchaser's interest in this Agreement shall be an act of default hereunder by
Purchaser and subject to the provisions of Paragraph 10 hereof. Seller shall
not assign its rights under or its interest in this Agreement, and any
assignment of proceeds of the sale of the Property shall include a payment
direction executed by Seller.
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 of Florida, Inc. (to be paid by Seller).
Seller's commission to Cushman & Wakefield of Florida, Inc. 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 of Florida,
Inc. Seller hereby agrees to indemnify, defend and hold Purchaser harmless
from any claims whatsoever (including, without limitation, reasonable
attorneys' fees, court costs and costs of appeal) from any claim or demand by
Cushman & Wakefield of Florida, Inc. (and its successors and assigns). The
indemnifying party shall undertake its obligations set forth in this Paragraph
15 using attorneys selected by the indemnifying party and reasonably acceptable
to the indemnified party. The provisions of this Paragraph 15 will survive the
Closing and delivery of the Deed.
16. REPRESENTATIONS AND WARRANTIES.
16.1. Any reference herein to Seller's knowledge or notice of any
matter or thing shall only mean such knowledge or notice that has actually been
received by Daniel L. Charleston (Vice President, Property Sales for The Balcor
Company) or Michael Becker (Vice President of Asset Management for The Balcor
Company) (together, "Seller's Representative"), and any representation or
warranty of the Seller is based upon those matters of which the Seller's
Representative has actual knowledge. Seller's Representatives shall deliver a
copy of the representations and warranties contained in Paragraph 16.2 below to
the existing day-to-day on-site property manager, for its review and request
the day-to-day on-site property manager inform Seller's Representative of any
inaccuracies contained in such representations and warranties. Any knowledge
or notice given, had or received by any of Seller's agents, servants or
employees shall not be imputed to Seller, the general partner or limited
partners of Seller, the subpartners of the general partner or limited partners
of Seller or Seller's Representative.
16.2. Subject to the limitations set forth in Paragraph 16.1, Seller
hereby makes the following representations and warranties, which
representations and warranties are made to Seller's knowledge as of the date
hereof and as of the date of Seller's recertification in connection with
Closing, and which shall, subject to Paragraph 16.4, be remade at Closing, and
shall survive Closing to the extent set forth in Paragraph 16.4:
16.2.1. Seller has no knowledge of any pending or threatened
litigation, governmental investigation, governmental inquiry, claim, cause of
action or administrative proceeding concerning the Property except as described
in Schedule 16.2.1;
16.2.2. Seller has not received written notice from any governmental
or regulatory authority that the use and operation of the Property is in
violation of applicable codes or laws which has not previously been corrected;
16.2.3. The Rent Roll attached hereto as Exhibit L which Seller will
update as of the Closing Date is true, accurate, correct and complete (as to
the matters shown thereon) as of the date set forth thereon;
16.2.4. Except as may be set forth in the Existing Report, Seller
has not received any written notice from any governmental authority having
jurisdiction over the Property of any uncured violation of any Environmental
Law with respect to the Property;
16.2.5. The Existing Reports are the only environmental report of
the Property provided to or obtained by Seller since October 15, 1991;
16.2.6. Seller has not received any written notice that Seller is in
default under any of the Existing Bond and Mortgage Documents to which it is a
party;
16.2.7. Seller has all necessary and requisite authority to enter
into this Agreement and to consummate all of the transactions contemplated
hereby, and the persons executing this Agreement and all other documents
required to consummate the transaction contemplated hereby on behalf of Seller
are duly authorized to execute this Agreement and such other documents on
behalf of Seller, and are authorized to bind Seller;
16.2.8. Seller is a limited partnership duly formed and validly
existing under the laws of the State of Illinois and, to the extent required by
law, is qualified to do business in and in good standing as a foreign limited
partnership under the laws of the State of Florida;
16.2.9. Seller is a "United States person", as defined by Internal
Revenue Code Section 1445 and Section 7701;
16.2.10. The execution of this Agreement by Seller does not, and the
performance by Seller of the transaction contemplated by this Agreement will
not, violate or constitute a breach of the partnership agreement or any
partners' resolution of Seller or any contract, permit, license, order or
decree to which Seller is a party or by which Seller or its assets are bound;
16.2.11. Except as shown on the Rent Roll attached hereto as Exhibit
L, as updated as of the Closing Date, no party, person or entity is in
possession of the Property nor any portion thereof except for Seller's manager,
any party to a laundry service contract or cable television contract and no
party, person or entity has any interest in the Property, or any portion
thereof, except Seller, parties to laundry service contracts and cable
television service contracts;
16.2.12. Seller has not received any written notice of a special
assessment or any such special assessment being contemplated;
16.2.13. There are no service contracts affecting the Property other
than the Service Contracts;
16.2.14. There are not outstanding contracts made by Seller (or any
of its agents or affiliates) for the work or materials in connection with the
Property or for any improvements to the Property which have not been, or will
not be on or before the Closing Date, fully paid for on a timely basis;
16.2.15. No person or entity has any right or option to acquire all
or any portion of the Property, other than Purchaser pursuant to this
Agreement;
16.2.16. Seller holds, and at all times through the Closing will
hold, marketable title to the Personal Property, free and clear of any liens,
encumbrances or adverse claims other than the Existing Bond and Mortgage, and
Seller has, and at all times through the Closing will have, the right and
authority to convey or assign to Purchaser all of the Personal Property;
16.2.17. Seller does not now owe and will not owe any taxes or any
penalties or interest thereon pursuant to any governmental law, statute or
regulation for which Purchaser is or will be obligated to or liable for a
withholding of funds from the Purchaser Price pursuant to any so called "bulk
sales" law or other applicable law, statute or regulation, or which could
subject the Real Estate to any liens or the Purchaser to any liability;
16.2.18. Seller has no employees;
16.2.19. The income and expense schedule and operating and
maintenance budget delivered to Purchaser in accordance with Paragraph 7.1 are
those relied on by Seller in its management of the Property;
16.2.20. The Existing Bond and Mortgage Documents delivered by
Seller to Purchaser are true and complete in all material respects and have not
been modified, supplemented or amended in writing;
16.2.21. Based on information provided by Berkshire, as servicer
under the Existing Bond and Mortgage Documents, as of November 1, 1996, the
principal amount of the bonds outstanding is $15,535,000;
16.2.22. Seller has not received written notice that an
investigation, enforcement proceeding or litigation has been commenced by the
Securities and Exchange Commission or the Internal Revenue Service respecting
the Bonds; and
16.2.23. Seller has made available to Purchaser all books, records,
agreements and Service Contracts kept at the Property.
16.3. If at any time after the execution of this Agreement, either
Purchaser or Seller become aware of information which makes a representation
and warranty contained in this Agreement to become untrue in any material
respect, said party shall promptly disclose said information to the other party
hereto. Provided the party making the representation or warranty did not take
any deliberate actions to cause the representation or warranty in question to
become untrue in any material respect, said party shall not be in default under
this Agreement and the sole remedy of the other party shall be to terminate
this Agreement, except for Purchaser's obligation to indemnify Seller and
restore the Property, as more fully set forth in Paragraph 7. Notwithstanding
anything contained herein to the contrary, if the status of any of the
tenancies changes from the date of the Rent Roll 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 or representations contained in Paragraph herein, then
Purchaser shall not have the right to terminate this Agreement or make any
claim for a breach of a representation or warranty hereunder involving the Rent
Roll or tenancies thereunder. Purchaser and Seller are prohibited from making
any claims against the other party hereto after the Closing with respect to any
breaches of the other party's representations and warranties contained in this
Agreement that the claiming party has actual knowledge of prior to the Closing.
16.4. The parties agree that the representations contained herein
shall survive Closing for a period ending 5:00 p.m. central time on December
23, 1996 (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 5:00
p.m. central time on December 23, 1996.
17. LIMITATION OF LIABILITY. No affiliate of Seller, nor any of Seller or its
affiliate's beneficiaries, shareholders, partners, officers, directors, agents
or employees, heirs, successors or assigns shall have any personal liability of
any kind or nature for or by reason of any matter or thing whatsoever under, in
connection with, arising out of or in any way related to this Agreement and the
transactions contemplated herein, and Purchaser hereby waives for itself and
anyone who may claim by, through or under Seller, any and all rights to sue or
recover on account of any such alleged personal liability.
Notwithstanding anything contained herein to the contrary, Purchaser
hereby agrees that the maximum aggregate liability of Seller, in connection
with, arising out of or in any way related to a breach by Seller under this
Agreement or any document or conveyance agreement in connection with the
transaction set forth herein after the Closing shall be $300,000. Purchaser
hereby waives for itself and anyone who may claim by, through or under
Purchaser any and all rights to sue or recover from Seller any amount greater
than said limit.
Seller agrees to retain and reserve, and not disburse or distribute,
proceeds of the Purchase Price in an amount at least equal to the sum of
$300,000 until 5:01 p.m. (Central Time) on December 23, 1996.
No affiliate of Purchaser, nor any of Purchaser or its affiliate's
beneficiaries, shareholders, partners, officers, directors, agents or
employees, heirs, successors or assigns shall have any personal liability of
any kind or nature for or by reason of any matter or thing whatsoever under, in
connection with, arising out of or in any way related to this Agreement and the
transactions contemplated herein, and Seller hereby waives for itself and
anyone who may claim by, through or under Seller, any and all rights to sue or
recover on account of any such alleged personal liability.
18. CONDITIONS PRECEDENT.
18.1. The Property is currently encumbered by those certain
Multifamily Housing Revenue Refunding Bonds, 1995 Series B (Sun Lakes Apartment
Project) in the original aggregate principal amount of $15,700,000 (the
"Bonds") as evidenced and/or secured by, among other items, the following
documents (collectively with any other documents made in connection with the
Bonds and the financing and/or refinancing relating thereto with respect to the
Property are hereinafter referred to as the "Existing Bond and Mortgage
Documents"): (a) the Multifamily Note made by Seller payable to Berkshire
Mortgage Finance Limited Partnership ("Berkshire") endorsed by Berkshire to the
Federal National Mortgage Association ("Fannie Mae"); (b) that certain Trust
Indenture dated as of October 1, 1995 (the "Indenture") among Orange County
Housing Finance Authority (the "Issuer") and Sun Bank, National Associates (the
"Trustee"); (c) the Replacement Reserve and Security Agreement between Seller
and Berkshire, (d) the Completion/Repair and Security Agreement between Seller
and Berkshire; (e) the Amended and Restated Land Use Restriction Agreement
dated as of October 1, 1995 (the "Regulatory Agreement") among Issuer and
Borrower; (f) the Multifamily Mortgage, Assignment of Rents and Security
Agreement made by Seller for the benefit of Berkshire and assigned to Fannie
Mae; (g) the Assumption of Regulatory Agreement and Deed of Trust dated as of
October 1, 1996 among Seller, Issuer and Seller; (h) the Financing Agreement
dated October 1, 1995 among Seller, Issuer, Trustee and Berkshire; (i) all
documents evidencing Seller's acquisition of the Property and assumption of the
obligations respecting the Bonds; and (j) those documents listed on Exhibit M
attached hereto.
18.2. Purchaser and Seller agree that the performance of their
obligations under this Agreement shall be subject to the parties (as specified
below) unconditionally procuring, using commercially reasonable efforts, on or
before the Closing Date the following:
18.2.1. Seller and Purchaser obtaining, on terms acceptable to
Purchaser, in Purchaser's sole and absolute discretion, the written consent of
Issuer, Trustee, Berkshire and Fannie Mae and any other applicable parties to
(a) the assignment to and assumption by Purchaser of the Bonds and the Existing
Bond and Mortgage Documents, and (b) the sale of the Property to Purchaser;
18.2.2. Purchaser and Seller satisfying all other conditions to the
assumption of the obligations arising out of the Existing Bond and Mortgage
Documents upon terms acceptable to Purchaser in Purchaser's sole and absolute
discretion, including, without limitation, any bond counsel's opinion or
opinion of Purchaser's counsel required by the Existing Bond and Mortgage
Documents respecting such transfer;
18.2.3. Purchaser and Seller obtaining, on terms acceptable to
Seller in Seller's sole and absolute discretion, the written acknowledgment of
Issuer, Trustee, Berkshire and Fannie Mae to the release of Seller and Seller's
affiliated entities in connection with any and all liabilities and obligations
arising out of the Bonds and Existing Bond and Mortgage Documents; and
18.2.4. Purchaser, at Purchaser's sole cost and expense, an opinion
of nationally recognized bond counsel acceptable to Purchaser to the effect
that (i) the transfer of the Property complies with the provisions of the
Existing Bond and Mortgage Documents, (ii) the transfer of the Property and the
execution of the Assignment and Assumption Agreement do not, in and of
themselves, adversely affect the exclusion of interest on the Bonds from gross
income for purposes of federal income tax, and (iii) income from the Bonds is
excludeable from gross income for purposes of federal income tax.
The foregoing conditions set forth in Paragraphs 18.2.1, 18.2.2, 18.2.3 and
18.2.4 shall hereinafter be referred to as the "Conditions Precedent". Both
Seller and Purchaser shall fully cooperate with each other and use good faith
efforts to satisfy the Conditions Precedent, including, but not limited to,
Purchaser submitting to Issuer, Trustee, Berkshire and Fannie Mae all
reasonably requested financial and other information.
18.3. Except for fees and expenses of Seller's attorneys with respect
to the performance of Paragraph 18.2.1 and 18.2.2, Purchaser shall pay all
costs and expenses associated with the satisfaction of the Conditions
Precedent, the assignment to Purchaser of the Bond Documents, the assumption of
the Bond Documents by Purchaser and obtaining Issuer's and Trustee's consent to
the foregoing. Purchaser shall cooperate with Seller satisfying the conditions
in Section 18.2.3 so that all submissions and requests by Purchaser made to
satisfy the "Conditions Precedent" under Sections 18.2.1, 18.2.2 and 18.2.4 are
accompanied by the release provided for in Section 18.2.3. In providing such
cooperation, Purchaser shall not be obligated to incur out-of-pocket expenses
on behalf of Seller.
18.4. In the event any of the Conditions Precedent are not satisfied
on or before the Closing Date, then, unless the Closing Date is extended as
provided in Section , this Agreement shall be terminated, and the Earnest Money
shall be immediately paid to Purchaser, together with any interest earned
thereon, and neither Seller nor Purchaser shall have any right, obligation or
liability under this Agreement, except for the indemnities set forth in
Paragraphs 7 and 15 of this Agreement.
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: 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
(847) 317-4360
(847) 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: Ambassador Apartments, L.P.
77 West Wacker Drive
Suite 4040
Chicago, IL 60601
Attention: Richard F. Cavenaugh
(312) 917-4410
(312) 917-9910 (FAX)
and one copy to: Ballard Spahr Andrews and Ingersoll
1735 Market Street, 51st Floor
Philadelphia, PA 19103
Attention: Michael L. Lehr
(215) 864-8318
(215) 864-8999 (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 three
(3) 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) 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 Florida, 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.
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date first set forth above.
PURCHASER:
AMBASSADOR APARTMENTS, L.P., a Delaware
limited partnership
By: Ambassador Apartments, Inc.,
a Maryland corporation
By: /s/ Richard F. Cavenaugh
-----------------------------------
Name:
-----------------------------------
Its:
-----------------------------------
SELLER:
LAKE SUN PARTNERS LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Lake Sun Partners, Inc., an Illinois
corporation, its general partner
By: /s/ Daniel L. Charleston
-------------------------------------
Name: Daniel L. Charleston
-------------------------------------
Its:
-------------------------------------
Larry D. Richey of Cushman & Wakefield of Florida, Inc.
("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 March 15, 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, in the appropriate form, stating that no other
fees or commissions are due to it from Seller or Purchaser.
Cushman & Wakefield of Florida, Inc.
By:
------------------------------------
SCHEDULE 3.1
I. Survey
1. Encroachments:
a) sidewalk on the northwest property line;
2. Legal description must match title commitment.
3. Certification must match the one given in The Crossings and should
include the Title Company.
4. Note 3 must refer to the Title Commitment.
5. The six-space parking area at the southeastern corner of the property
is marked as containing six spaces, but lines are drawn only for five.
6. The 100 year flood evaluation must be reverified.
7. Those easements that are plottable must be plotted or where only
approximate locations can be given, such should be given. All easements must
be listed.
II. Title Commitment
1. The reference to Tangible Taxes in Schedule B-II-8 should be deleted.
2. The reference to Maintenance Assessments in Schedule B-II-17 should
be deleted or endorsed over.
SCHEDULE 16.2.1
None
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
L - Rent Roll
M - List of Bond Documents
N - Assignment of Sewer, Water, and Utilities Permits, Rights and
Deposits