AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), is entered into as of the 26 day
of February, 1997, by and between GROUP ONE INVESTMENTS, INC., an Illinois
corporation ("Purchaser"), and 3655 PEACHTREE LIMITED PARTNERSHIP, an Illinois
limited partnership ("Seller").
W I T N E S S E T H:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to sell
at the price of Nine Million Dollars ($9,000,000.00) (the "Purchase Price"),
that certain property commonly known as Howell Station Apartments, Duluth,
Georgia, legally described on Exhibit A attached hereto (the "Property").
The Purchase Price shall also include all of Seller's right, title and
interest in and to the following: (a) intangible property, whether enumerated
in this Agreement or not, now or subsequently used in connection with the
operation or maintenance of the Property, other than any computer software,
including but not limited to all leases, licenses and other agreements to
occupy all or any part of the Property; (b) tenant security deposits; (c) all
unexpired claims, warranties, guarantees and sureties, if any, given in
connection with the construction, improvement or equipment of or on the
Property; (d) all service contracts and management agreements for the benefit
of the Property which Purchaser agrees to assume; (e) all rights to use any
name by which the Property may be commonly called; and (f) all architectural,
engineering and construction plans, tests, reports, drawings and
specifications, if any (collectively the "Intangible Property").
The Purchase Price shall also include all right, title and interest of
Seller (a) to land, if any, lying in the bed of any street, road or avenue,
open or proposed, at the foot of or adjoining the Property to the center line
of such street, road or avenue, (b) to the use of all easements, if any,
whether of record or not, appurtenant to the Property and (c) the use of all
strips and rights-of-way, if any, abutting, adjacent to, contiguous to or
adjoining the Property (collectively the "Appurtenant Rights").
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as follows:
2.1. Upon the execution of this Agreement, the sum of One Hundred
Thousand and No/100 Dollars ($100,000.00) (the "Earnest Money") to be held in
escrow by and in accordance with the provisions of the Escrow Agreement
("Escrow Agreement") attached hereto as Exhibit C; and
2.2. On the "Closing Date" (hereinafter defined), the balance of the
Purchase Price, adjusted in accordance with the prorations, by federally wired
"immediately available" funds, on or before 3:00 p.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 ALTA title insurance policy issued by Guaranty National Title Company
for $10,000,000 (hereinafter referred to as "Title Insurer") dated December 18,
1996, endorsed by Endorsements dated February 3, 4, 5, 7, 10 and 13, 1997, for
the Property (the "Title Commitment"). For purposes of this Agreement, but
subject to the terms and conditions hereinafter set forth, "Permitted
Exceptions" shall mean: (a) matters shown on the "Survey" (hereinafter
defined); (b) matters caused by the actions of Purchaser; and (c) the title
exceptions set forth in Schedule B - Section 2 of the Title Commitment as
Numbers 4, 5, 6, 7, 8, 9, 16, 18, 19, 20, 21 and 23. All other exceptions to
title shall be referred to as "Unpermitted Exceptions". Purchaser has reviewed
and approved the Title Commitment, the Title Exceptions and the Survey, and the
endorsements which the Title Company has committed to issue in the Title
Commitment (the "Endorsements"). 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 or Purchaser's nominee an ALTA
title policy in conformance with the previously delivered Title Commitment,
with extended coverage and including the Endorsements, subject to the Permitted
Exceptions and Unpermitted Exceptions waived by Purchaser (the "Title Policy").
Purchaser shall pay for all of the costs of the Title Commitment and Title
Policy, including, but not limited to, any fees paid to an attorney for an
opinion of counsel required for the Title Insurer to issue the Title Policy.
Purchaser shall also pay for all of the costs of the Endorsements, including,
but not limited to, any fees paid to a Georgia attorney for an opinion of
counsel required for the Title Insurer to issue the Endorsements and fees of
the surveyor to prepare zoning certifications.
3.2. Purchaser has received a survey of the Property prepared by Planners
and Engineers Collaborative dated November 18, 1993 and updated to July 8, 1996
(the "Survey"). The Survey shall be certified to Purchaser, Purchaser's lender
and the Title Insurer, shall be prepared in accordance with the Minimum
Standard Detail Requirements for ALTA/ACSM Land Title Surveys, jointly
established and adopted by ALTA and ACSM in 1992, and shall include the
following item numbers from Table A thereof: 1, 2, 3, 4, 6, 7(a) and (c), 8,
9, 10 and 11(a) - (d), or such other lesser standards acceptable to Purchaser.
The Survey shall also (a) depict the location and the dimensions of the
Property and all of the improvements thereon; (b) indicate the street address
and legal description of the Property, the square footage of the Property and
all of the improvements and the number of parking spaces, if any; (c) show all
curb cuts, driveways, parking spaces, if any, streets and alleys adjacent to
the Property, and vehicular access from the Property to said streets and
alleys; (d) show the present location of all recorded easements, visible
easements, utility lines and building lines on the Property and the location of
any encroachments onto or over easements, building lines, rights of way or any
adjoining property, or onto the Property by any adjoining property; and (e)
certify whether the Property is located in an area identified by an agency or
department of the federal government as having special flood or mudslide
hazards which would require flood insurance under the Flood Insurance Act of
1968, as amended from time to time, or under any other applicable law or
regulation. The parties agree that Purchaser shall not be obligated to
consummate the purchase of the Property unless the Survey is sufficient to
enable the Title Insurer to delete the general survey exception and to issue
the Title Policy free from any survey matters, other than those shown in the
Survey.
3.3. The obligation of Purchaser to pay the various costs set forth in
Paragraphs 3.1 and 3.2 shall survive the termination of this Agreement.
3.4. Purchaser shall obtain containment letters from each utility company
holding an easement encumbering all or any portion of the Property, at
Purchaser's sole expense.
4. PAYMENT OF TRANSFER TAXES AND CLOSING COSTS.
4.1. Seller shall pay for all of the costs of the documentary or transfer
taxes to be paid with reference to the "Deed" (hereinafter defined) and all
other stamps, intangible, transfer, documentary, recording, sales tax and
surtax imposed by law with reference to any other sale documents delivered in
connection with the sale of the Property to Purchaser.
4.2. Purchaser and Seller shall each pay for one-half of all escrow and
other closing fees charged by the Title Insurer in connection with closing the
subject transaction, other than those costs set forth in Paragraph 3.1 and 4.1.
Purchaser and Seller shall each pay for one-half of the cost of updating the
survey to July 8, 1996 of $1,869.77 and of any additional costs for additional
updates or revisions.
5. CONDITION OF TITLE.
5.1. If, prior to "Closing" (as hereinafter defined), a date-down to the
Title Commitment or the delivery of the Survey discloses any new Unpermitted
Exception, Seller shall have until the Closing Date, at Seller's expense
(except with respect to Partnership Unpermitted Exceptions), to bond over, cure
and/or have any Unpermitted Exceptions removed from the Title Commitment or to
have the Title Insurer commit to insure against loss or damage that may be
occasioned by such Unpermitted Exceptions. In such event, Purchaser shall not
be obligated to close prior to the expiration of the aforementioned time
period, unless Seller has bonded over, cured and or had the Unpermitted
Exceptions removed from the Title Commitment or had the Title Insurer commit to
insure against loss or damage that may be accessed by such Unpermitted
Exceptions. If Seller fails to cure or have said Unpermitted Exceptions
removed or have the Title Insurer commit to insure as specified above on or
before the Closing Date, Purchaser may, at its option, either (a) terminate
this Agreement upon notice to Seller within five (5) days after the Closing
Date; or (b) consummate the subject transaction, in which case Purchaser shall
be entitled to a credit at closing equal to the sum of all Unpermitted
Exceptions of a definite or ascertainable amount. Absent notice from Purchaser
to Seller that it has elected to terminate this Agreement, Purchaser shall be
deemed to have elected to take title subject to said Unpermitted Exceptions,
and shall be entitled to the aforesaid credit at closing. If Purchaser
terminates this Agreement in accordance with the terms of this Paragraph 5.1,
this Agreement shall become null and void without further action of the
parties, and all Earnest Money theretofore deposited into the escrow by
Purchaser, together with any interest accrued thereon, shall be returned to
Purchaser, and neither party shall have any further liability to the other,
except for Purchaser's obligation to indemnify Seller and restore the Property,
as more fully set forth in Paragraph 7.
5.2. Seller agrees to convey fee simple title to the Property to
Purchaser or its nominee by special warranty deed (the "Deed") in recordable
form subject only to the Permitted Exceptions and any Unpermitted Exceptions
waived by Purchaser.
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
6.1. Except as provided in the indemnity provisions contained in
Paragraph 7.1 of this Agreement, Seller shall bear all risk of loss with
respect to the Property up to the earlier of the dates upon which either
possession or title is transferred to Purchaser in accordance with this
Agreement. Notwithstanding the foregoing, in the event of damage to the
Property by fire or other casualty prior to the Closing Date, repair of which
would cost less than or equal to $100,000.00 (as determined by Seller in good
faith) Purchaser shall not have the right to terminate its obligations under
this Agreement by reason thereof, but Seller shall have the right to elect to
either repair and restore the Property (in which case the Closing Date shall be
extended until completion of such restoration) or to assign and transfer to
Purchaser on the Closing Date all of Seller's right, title and interest in and
to all insurance proceeds paid or payable to Seller on account of such fire or
casualty. Seller shall promptly notify Purchaser in writing of any such fire
or other casualty and Seller's determination of the cost to repair the damage
caused thereby. In the event of damage to the Property by fire or other
casualty prior to the Closing Date, repair of which would cost in excess of
$100,000.00 (as determined by Seller in good faith), then this Agreement may be
terminated at the option of Purchaser, which option shall be exercised, if at
all, by Purchaser's written notice thereof to Seller within five (5) business
days after Purchaser receives written notice of such fire or other casualty and
Seller's determination of the amount of such damages, and upon the exercise of
such option by Purchaser this Agreement shall become null and void, the Earnest
Money deposited by Purchaser shall be returned to Purchaser together with
interest thereon, and neither party shall have any further liability or
obligations hereunder. In the event that Purchaser does not exercise the
option set forth in the preceding sentence, the Closing shall take place on the
Closing Date and Seller shall assign and transfer to Purchaser on the Closing
Date all of Seller's right, title and interest in and to all insurance proceeds
paid or payable to Seller on account of the fire or casualty.
6.2. Subject to the provisions hereinafter set forth in this Section 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, and
provide Purchaser with copies of any documentation received by Seller in
connection therewith (collectively, the "Condemnation Notice"). In the event
that the taking of any part of the Property shall: (a) materially impair access
to the Property; (b) cause any material non-compliance with any applicable law,
ordinance, rule or regulation of any federal, state or local authority or
governmental agencies having jurisdiction over the Property or any portion
thereof; or (c) materially and adversely impair the use of the Property as it
is currently being operated (hereinafter collectively referred to as a
"Material Event"), Purchaser may:
(i) 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
(ii) proceed with the Closing, in which event Seller shall assign to
Purchaser all of Seller's right, title and interest in and to any award made in
connection with such condemnation or eminent domain proceedings.
6.3. Purchaser shall then notify Seller, within five (5) business days
after Purchaser's receipt of the Condemnation Notice, whether Purchaser elects
to exercise its rights under Paragraph 6.2(i) or Paragraph 6.2(ii). Closing
shall be delayed, if necessary, until Purchaser makes such election. If
Purchaser fails to make an election within such five (5) business day period,
Purchaser shall be deemed to have elected to exercise its rights under
Paragraph 6.2(ii). If between the date of this Agreement and the Closing Date,
any condemnation or eminent domain proceedings are initiated which do not
constitute a Material Event, Purchaser shall be required to proceed with the
Closing, in which event Seller shall assign to Purchaser all of Seller's right,
title and interest in and to any award made in connection with such
condemnation or eminent domain proceedings.
7. INSPECTION AND AS-IS CONDITION.
7.1. During the period commencing on the date hereof and ending at 5:00
p.m. Chicago time on January 10, 1997 (said period being herein referred to as
the "Inspection Period"), Purchaser and the agents, engineers, employees,
contractors and surveyors retained by Purchaser may enter upon the Property, at
any reasonable time and upon reasonable prior notice to Seller, to inspect the
Property, including a review of leases located at the Property, and to conduct
and prepare such studies, tests and surveys as Purchaser may deem reasonably
necessary and appropriate, including, but not limited to, any appraisals,
engineering, environmental and other due diligence studies, tests and surveys.
In connection with Purchaser's review of the Property, Seller agrees to deliver
to Purchaser actual and complete copies of the current rent roll for the
Property, the most recent tax and insurance bills, utility account numbers,
service contracts, the Survey, and unaudited year end 1995 and year to date
(through August 30, 1996) operating statements. Furthermore, to the extent
that any of the following items are (a) in the possession of Seller or the
"Asset Manager" (as hereinafter defined), or (b) readily available to Seller or
the Asset Manager, Seller shall deliver to Purchaser actual and complete copies
of the following:
(i) unaudited year end 1993, 1994, 1995 and 1996 year to date operating
statements;
(ii) all licenses, permits, authorizations and approvals issued to Seller
by all governmental authorities having jurisdiction over the Property;
(iii) the most recent bills for water charges and other utilities for
the past 12 months, together with proof of payment;
(iv) the insurance loss history report, including all insurance claims and
settlements relating to the Property within the past three (3) years;
(v) copies of tax bills for the past three (3) years, petitions for
appeal of property taxes and/or assessments for the Property which have been
contested by Seller over the immediately preceding three (3) year period and
the results thereof;
(vi) all "as built" plans and specifications for the improvements and
copies of all reports or studies relating to the engineering, environmental
conditions, physical conditions and/or operation of the Property;
(vii) any operations and maintenance plan or plans implemented for the
Property by Seller; and
(viii) any other information that Purchaser shall reasonably request.
All of the foregoing tests, investigations and studies to be conducted
under this Paragraph 7.1 by Purchaser shall be at Purchaser's sole cost and
expense, and Purchaser shall restore the Property to the condition existing
prior to the performance of such tests or investigations by or on behalf of
Purchaser. Purchaser shall defend, indemnify and hold Seller and any
affiliate, parent of Seller, and all shareholders, employees, officers and
directors of Seller or Seller's affiliate or parent (hereinafter collectively
referred to as "Affiliate of Seller") harmless from any and all liability, cost
and expense (including without limitation, reasonable attorney's fees, court
costs and costs of appeal) suffered or incurred by Seller or Affiliates of
Seller for injury to persons or property caused by Purchaser's investigations
and inspection of the Property. Purchaser shall undertake its obligation to
defend set forth in the preceding sentence using attorneys (x) selected by
Purchaser, and (y) reasonably acceptable to Seller.
Prior to commencing any such tests, studies and investigations, Purchaser
shall furnish to Seller a certificate of insurance evidencing comprehensive
general public liability insurance insuring the person, firm or entity
performing such tests, studies and investigations and listing Seller and
Purchaser as additional insureds thereunder.
Notwithstanding the foregoing, Purchase acknowledges that it has had a
full opportunity to inspect the Property during the Inspection Period and that
it has no right to terminate this Agreement on account of the results of such
inspection, all such rights being waived.
7.2. Seller makes no representations or warranties relating to the
condition of the Property except as may otherwise be specifically set forth in
this Agreement. Purchaser acknowledges and agrees that, except with respect to
the representations and warranties contained herein, it will be purchasing the
Property based solely upon its inspections 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, 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, 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. Except with respect to a breach by Seller of any
representation or warranty expressly contained herein, Purchaser hereby
releases Seller and the Affiliates of Seller from any and all liability in
connection with any claims which Purchaser may have against Seller or the
Affiliates of Seller, and Purchaser hereby agrees not to assert any claims for
contribution, cost recovery or otherwise, against Seller or the Affiliates of
Seller, relating directly or indirectly to the existence of asbestos or
Hazardous Materials on, or environmental conditions of, the Property, whether
known or unknown. As used herein, "Environmental Laws" means all federal,
state and local statutes, codes, regulations, rules, ordinances, orders,
standards, permits, licenses, policies and requirements (including consent
decrees, judicial decisions and administrative orders) relating to the
protection, preservation, remediation or conservation of the environment or
worker health or safety, all as amended or reauthorized, or as hereafter
amended or reauthorized, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.
Section 9601 et seq., the Resource Conservation and Recovery Act of 1976
("RCRA"), 42 U.S.C. Section 6901 et seq., the Emergency Planning and Community
Right-to-Know Act ("Right-to-Know Act"), 42 U.S.C. Section 11001 et seq., the
Clean Air Act ("CAA"), 42 U.S.C. Section 7401 et seq., the Federal Water
Pollution Control Act ("Clean Water Act"), 33 U.S.C. Section 1251 et seq., the
Toxic Substances Control Act ("TSCA"), 15 U.S.C. Section 2601 et seq., the Safe
Drinking Water Act ("Safe Drinking Water Act"), 42 U.S.C. Section 300f et seq.,
the Atomic Energy Act ("AEA"), 42 U.S.C. Section 2011 et seq., the Occupational
Safety and Health Act ("OSHA"), 29 U.S.C. Section 651 et seq., and the
Hazardous Materials Transportation Act (the "Transportation Act"), 49 U.S.C.
Section 1802 et seq. As used herein, "Hazardous Materials" means:
(1) "hazardous substances," as defined by CERCLA; (2) "hazardous wastes," as
defined by RCRA; (3) any radioactive material including, without limitation,
any source, special nuclear or by-product material, as defined by AEA; (4)
asbestos in any form or condition; (5) polychlorinated biphenyls; and (6) any
other material, substance or waste to which liability or standards of conduct
may be imposed under any Environmental Laws. Notwithstanding anything
contained herein to the contrary, the terms of this Paragraph 7.2 shall survive
the Closing and the delivery of the Deed and termination of this Agreement.
7.3. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller owned the Property. Seller 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 the representations and warranties of Seller
expressly contained herein, and releases Seller and the Affiliates of Seller
from any liability with respect to such historical information, except with
respect to a breach of a representation or warranty of Seller contained herein.
Notwithstanding anything contained herein to the contrary, the terms of this
Paragraph 7.3 shall survive the Closing and the delivery of the Deed and
termination of this Agreement.
7.4. Seller has provided to Purchaser the following existing report: Phase
I Environmental Site Assessment prepared by H+GCL dated November 23, 1993 (the
"Existing Report"). Except as expressly set forth herein, Seller makes no
representation or warranty concerning the accuracy or completeness of the
Existing Report. Purchaser hereby releases Seller and the Affiliates of Seller
from any liability whatsoever with respect to the Existing Report, including,
without limitation, the matters set forth in the Existing Report, and the
accuracy and/or completeness of the Existing Report, except with respect to a
breach of a representation or warranty of Seller contained herein.
Furthermore, Purchaser acknowledges that it will be purchasing the Property
with all faults disclosed in the Existing Report. Notwithstanding anything
contained herein to the contrary, the terms of this Paragraph 7.4 shall survive
the Closing and the delivery of the Deeds and termination of this Agreement.
8. CLOSING. Subject to the provisions set forth below and subject to the
provisions of Paragraph 25 below, the closing of this transaction (the
"Closing") shall be on March 21, 1997 subject to extension to April 4, 1997,
upon Purchaser's election, to be sent to Seller in writing prior to March 20,
1997 (the "Closing Date"), at the loop office of Title Insurer, Chicago,
Illinois, at which time Seller shall deliver possession of the Property to
Purchaser. This transaction shall be closed through an escrow with Title
Insurer, in accordance with the general provisions of the usual and customary
form of deed and money escrow for similar transactions in Chicago, Illinois, or
at the option of either party, the Closing shall be a "New York style" closing
at which the Purchaser shall wire the Purchase Price to Title Insurer on the
Closing Date and prior to the release of the Purchase Price to Seller,
Purchaser shall receive the Title Policy or marked up commitment dated the date
of the Closing Date. In the event of a New York style closing, Seller shall
deliver to Title Insurer any customary affidavit in connection with a New York
style closing. All closing and escrow fees shall be divided equally between
the parties hereto.
9. FINANCING CONTINGENCY. Purchaser's and Seller's obligations under this
Agreement are contingent upon Purchaser's ability to procure a commitment for
mortgage financing for the acquisition of the Property in an amount of not less
than $8,500,000 with an interest rate of not more than 165 basis points over
ten (10) years U.S. Treasury Bills per annum and a 25 year amortization and
reasonably acceptable to Purchaser in all material respects (the "Financing
Contingency") on or before February 28, 1997. Purchaser acknowledges and
agrees that it shall submit its application (or equivalent) for a commitment
for such financing in accordance with the provisions set forth above by five
(5) business days after execution of this Agreement and pay all application and
other fees associated therewith. Upon Seller's request, Purchaser shall
provide Seller with a letter from the proposed lender evidencing that said
application (or equivalent) has been received and completed 10 business days
after execution of this Agreement. In the event Purchaser has complied with
the requirements set forth in the preceding sentence, but is unable to satisfy
the Financing Contingency on or before February 28, 1997, then Purchaser shall
have the option, upon written notice to Seller, exercised no later than
February 28, 1997, to terminate this Agreement, in which case this Agreement
shall become null and void without further action of the parties and all
Earnest Money theretofore deposited into the escrow by Purchaser together with
any interest accrued thereon, shall be delivered to Purchaser, and neither
party shall have any further liability to the other, except for those covenants
and obligations hereunder which expressly survive the termination of this
Agreement. In the event Purchaser fails to deliver such notice to Seller, the
Financing Contingency shall be deemed satisfied and the parties hereto shall
proceed to Closing.
10. CLOSING DOCUMENTS.
10.1. On or prior to the Closing Date, Seller and Purchaser shall execute
and deliver to one another a joint closing statement. In addition, (a)
Purchaser shall deliver in Escrow to Title Insurer the balance of the Purchase
Price and an assumption of the documents set forth in Paragraph 10.2.2 and
10.2.3 hereof, and (b) Purchaser and Seller shall each execute and deliver in
Escrow to the Title Insurer 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 allow the Title Insurer to issue the Endorsements,
including, but not limited to: (i) an ALTA Statement; (ii) a GAP Undertaking;
(iii) complete state, county and local transfer tax declarations, to the extent
applicable; and (iv) all applicable partnership and corporate resolutions
and/or certificates of existence.
10.2. On the Closing Date, Seller shall deliver to Purchaser the
following:
10.2.1. the Deed (in the form of Exhibit E attached hereto), subject
to Permitted Exceptions and those Unpermitted Exceptions waived by Purchaser;
10.2.2. assignment and assumption of intangible property (in the
form attached hereto as Exhibit G), including, without limitation, any
warranties, certificates, licenses, permits and existing termite bonds and the
service contracts listed in Exhibit H;
10.2.3. an assignment and assumption of leases and security deposits
(in the form attached hereto as Exhibit I);
10.2.4. non-foreign affidavit (in the form of Exhibit J attached
hereto);
10.2.5. original, and/or copies of, leases affecting the Property in
Seller's possession (which shall be delivered at the Property);
10.2.6. keys to the improvements;
10.2.7. possession of the Property to Purchaser, subject to the
terms of leases;
10.2.8. evidence of the termination of the management agreement;
10.2.9. notice to the tenants of the Property of the transfer of
title and assumption by Purchaser of the landlord's obligation under the leases
and the obligation to refund the security deposits (in the form of Exhibit K);
10.2.10. an updated rent roll, certified by Seller as being actual
and complete;
10.2.11. State of Georgia Real Estate Transfer Tax Declaration; and
10.2.12. Assignment of Development Agreement referenced to in
Exception 19 of the Title Commitment.
10.2.13. Affidavits sufficient to satisfy the requirements of
O.C.G.A. e 48-7-128.
11. 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.
12. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF ALL EARNEST MONEY,
TOGETHER WITH ANY INTEREST ACCRUED THEREON, PLUS ACTUAL DOCUMENTED THIRD PARTY
EXPENSES PAID OR INCURRED BY PURCHASER IN CONNECTION WITH THIS AGREEMENT, BUT
NOT TO EXCEED THE AMOUNT OF THE EARNEST MONEY ON DEPOSIT WITH THE ESCROW AGENT
AT THE TIME OF DEFAULT, AND THIS AGREEMENT SHALL THEN BECOME NULL AND VOID AND
OF NO EFFECT AND THE PARTIES SHALL HAVE NO FURTHER LIABILITY TO EACH OTHER AT
LAW OR IN EQUITY, EXCEPT FOR PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER AND
RESTORE THE PROPERTY AS SET FORTH MORE FULLY IN PARAGRAPH 7. NOTWITHSTANDING
ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF SELLER'S DEFAULT IS ITS WILLFUL
REFUSAL TO DELIVER THE DEED, THEN PURCHASER WILL BE ENTITLED TO SUE FOR
SPECIFIC PERFORMANCE.
13. PRORATIONS.
13.1. Rents (exclusive of delinquent rents, but including prepaid rents);
refundable security deposits and, if applicable under the laws of the State of
Georgia, interest thereon (which will be assigned to and assumed by Purchaser
and credited to Purchaser at Closing); water and other utility charges; fuels;
prepaid operating expenses; real and personal property taxes, operating
expenses which are reimbursable by the tenants for the period prior to the
Closing Date less any amount previously paid by the Tenants shall be credited
to Seller; and other similar items shall be adjusted ratably as of 11:59 p.m.
on the Closing Date, and credited against the balance of the cash due at
Closing. If real estate tax bills for the year 1997 are not available, real
estate taxes for the year 1997 shall be prorated based on 105% of 1996 taxes.
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.
13.2. All basic rent paid following the Closing Date by any tenant of the
Property who is indebted under a lease for basic rent for any period prior to
and including the Closing Date, after the payment to Purchaser of all current
basic rent, shall be deemed a "Post-Closing Receipt" until such time as all
such indebtedness is paid in full. Within ten (10) days following each receipt
by Purchaser of a Post-Closing Receipt, Purchaser shall pay such Post-Closing
Receipt to Seller. Purchaser shall use its best efforts to collect all amounts
which, upon collection, would constitute Post-Closing Receipts hereunder.
Within 120 days after the Closing Date, Purchaser shall deliver to Seller a
reconciliation statement of Post-Closing Receipts through the first 90 days
after the Closing Date. Upon the delivery of the Post-Closing Receipts
reconciliation, Purchaser shall deliver to Seller any Post-Closing Receipts
owing to Seller and not previously delivered to Seller in accordance with the
terms hereof. Seller retains the right to conduct an audit, at reasonable
times and upon reasonable notice, of Purchaser's books and records to verify
the accuracy of the Post-Closing Receipts reconciliation statement and upon the
verification of additional funds owing to Seller, Purchaser shall pay to Seller
said additional Post-Closing Receipts and the cost of performing Seller's
audit. Paragraph 12.2 of this Agreement shall survive the Closing and the
delivery and recording of the deed.
14. RECORDING. Neither this Agreement nor a memorandum thereof shall be
recorded and the act of recording by Purchaser shall be an act of default
hereunder by Purchaser and subject to the provisions of Paragraph 11 hereof.
15. ASSIGNMENT. The Purchaser shall not have the right to assign its interest
in this Agreement without the prior written consent of the Seller. Any
assignment or transfer of, or attempt to assign or transfer, Purchaser's
interest in this Agreement shall be an act of default hereunder by Purchaser
and subject to the provisions of Paragraph 11 hereof. Notwithstanding the
foregoing, Purchaser may assign its interest in this Agreement without the
consent of Seller (1) to any entity in which Purchaser's principals or
Purchaser's nominee owns a controlling interest, provided that Purchaser
remains liable for and the assignee assumes the obligations of Purchaser
hereunder, and (2) to a trust or trusts designated by Purchaser provided that
Purchaser remains liable for and the assignee assumes the obligations of
Purchaser hereunder, and that if Purchaser's proposed lender does not approve
of the ownership structure proposed by Purchaser, Purchaser shall change such
structure to be acceptable to such lender.
16. BROKER. The parties hereto represent and warrant that no broker
commission or finder fee is due and payable in connection with this transaction
other than to (a) Apartment Realty Advisors ("Seller's Broker") (to be paid by
Seller) and (b) to First Group Properties ("Purchaser's Broker") (to be paid by
Purchaser). Seller's commission to Seller's Broker shall only be payable out
of the proceeds of the sale of the Property in the event the transaction set
forth herein closes, and Purchaser's commission to Purchaser's Broker shall
only be payable in the event that 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 Seller's Broker or to Purchaser's Broker. The indemnifying party shall
undertake its obligations set forth in this Paragraph 16 using attorneys
selected by the indemnifying party and reasonably acceptable to the indemnified
party. The provisions of this Paragraph 16 will survive the Closing and
delivery of the Deed. At Closing, Purchaser, Seller, Purchaser's broker and
Seller's broker shall execute and deliver such affidavits and lien waivers
which are necessary to satisfy the requirements of O.C.G.A. e 44-14-600 et seq.
17. REPRESENTATIONS AND WARRANTIES.
17.1. Any reference herein to Seller's knowledge or notice of any matter
or thing shall only mean such knowledge or notice that has actually been
received by Michael Becker, the manager of the Property (the "Asset Manager"),
and Daniel Charleston (Daniel Charleston and the Asset Manager are collectively
referred to as the "Seller's Representative"), and any representation or
warranty of the Seller is based upon those matters of which the Seller's
Representative has actual knowledge. Any knowledge or notice given, had or
received by any of Seller's agents, servants or employees shall not be imputed
to Seller, the general partner or limited partners of Seller, the subpartners
of the general partner or limited partners of Seller or Seller's
Representative.
17.2. Subject to the limitations set forth in Paragraph 17.1, Seller
hereby makes the following representations and warranties, which
representations and warranties are made to Seller's knowledge and which shall
be remade at Closing, subject to Paragraph 17.5:
(a) Seller has no knowledge of any pending or threatened litigation,
claim, cause of action or administrative proceeding concerning the Property;
(b) Seller has the power to execute and deliver this Agreement and
consummate the transactions contemplated herein;
(c) the rent roll attached hereto as Exhibit M, which Seller will update
as of the Closing Date, is actual and complete as of the date set forth
thereon;
(d) Seller has not given or suffered any assignment, pledge or encumbrance
with respect to any of the tenant leases or its interests thereunder except as
additional collateral for the existing loan secured by the Property;
(e) except as may be set forth in the Existing Report, Seller has not
received any notice from any governmental authority having jurisdiction over
the Property of any uncured violation of any building, zoning or Environmental
Law with respect to the Property, Seller has no knowledge of the existence of
any environmental or engineering reports, other than the Existing Report;
(f) there are and shall be no liens, claims or unpaid taxes against Seller
and/or applicable to the Property for federal withholding taxes or state sales,
retail or occupation or unemployment taxes, or any other taxes or charges
whatsoever, except general real estate taxes and special assessments, if any,
which are not yet due and payable, and Seller shall obtain all appropriate
releases and make all necessary filings required under applicable law;
(g) Seller's Representative has not received any notice from any insurance
company of any defects or inadequacies in the Property which might adversely
affect the insurability of the Property;
(h) no fact or condition exists to Seller's knowledge which would result
in the termination of access to the Property from any adjoining public or
private streets or ways or which would result in discontinuation of adequate
sewer, water, gas, electric, telephone or other utility service;
(i) Seller has no knowledge of any pending or threatened special taxes or
assessments with respect to the Property, or any proposed increase in the
assessed valuation of the Property for real estate tax purposes;
(j) Seller has no knowledge of any representations made to the tenants of
the Property relating to repairs, alterations and/or other matters which will
not have been performed or otherwise satisfied to Purchaser's reasonable
satisfaction prior to the Closing Date;
(k) neither this Agreement, nor anything required to be done under this
Agreement, violates or shall violate any contract, agreement or instrument to
which Seller is a party or which affects the Property or any part thereof, and
the sale, conveyance or assignment of the Property contemplated under this
Agreement does not require the consent of any party, other than Lender, which
has not been obtained; and
(l) there are no contracts that Purchaser must assume, other than the
Service Contracts.
17.3. Purchaser hereby represents and warrants to Seller that
Purchaser has the full right, power and authority to execute and deliver this
Agreement and consummate the transactions contemplated herein.
17.4. 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. 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
in Paragraph 17.6 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.
17.5. The parties agree that the representations and warranties
contained herein shall survive Closing for a period of ninety (90) 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
ninety (90) days immediately following Closing).
17.6. Seller covenants to 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, including the maintenance of the current tenant
rental qualification standards, subject to reasonable wear and tear and
casualty. Seller further covenants that with respect to security deposits and
delinquent rents, after the date of this Agreement, none of the security
deposits shall be applied by Seller to delinquent rents, unless such tenant
shall have vacated the Property or been evicted from the Property prior to the
Closing Date.
18. LIMITATION OF LIABILITY.
18.1. Neither Seller nor Affiliate of Seller, nor any of their
respective beneficiaries, shareholders, partners, officers, directors, agents
or employees, heirs, successors or assigns shall have any personal liability of
any kind or nature for or by reason of any matter or thing whatsoever under, in
connection with, arising out of or in any way related to this Agreement and the
transactions contemplated herein, and Purchaser hereby waives for itself and
anyone who may claim by, through or under Purchaser any and all rights to sue
or recover on account of any such alleged personal liability.
18.2. 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 $100,000.
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 $100,000.
18.3. Seller further agrees not to distribute $100,000 of the proceeds
of the Purchase Price to its partners for the longer of (a) ninety (90) days
after the Closing and (b) final resolution of any claims by Purchaser and
asserted in writing against Seller prior to the expiration of the ninety (90)
days after the Closing in accordance with the terms of this Agreement
("Claims"); provided, however, that if any Claims are disputed by Seller,
Seller shall have the right, by written notice to Purchaser, to require
Purchaser to file suit in a court of competent jurisdiction within thirty (30)
days after such notice to Purchaser; otherwise said notice with respect to the
Claim in question shall no longer prevent Seller from distributing the
proceeds, and further provided that, at the end of the ninety (90) day period,
Seller shall be entitled to distribute all proceeds of the Purchase Price in
excess of the aggregate amount of the Claims theretofore made in writing by
Purchaser.
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: Daniel Charleston
(847) 267-1600
(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: Group One Investments, Inc.
77 West Washington Street
Suite 1005
Chicago, Illinois 60602
Attention: Robert Weitzman
(312) 346-3434
(312) 346-2382 (FAX)
and one copy to: Much, Shelist, Freed, Denenberg
Ament, Bell & Rubenstein, P.C.
200 N. LaSalle Street
Suite 2100
Chicago, Illinois 60601
Attention: Michael Sadoff, Esq.
(312) 621-1494
(312) 621-1750 (FAX)
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be
deemed to be delivered or made on the next business day if sent by overnight
courier, or the same day as given if sent by facsimile transmission and
received by 5:00 p.m. Chicago time or on the 4th business day after the same is
deposited in the United States Mail as registered or certified matter,
addressed as above provided, with postage thereon fully prepaid. Any such
notice, demand or document not given, delivered or made by registered or
certified mail, by overnight courier or by facsimile transmission as aforesaid
shall be deemed to be given, delivered or made upon receipt of the same by the
party to whom the same is to be given, delivered or made. Copies of all
notices shall be served upon the Escrow Agent.
21. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute two
(2) copies of this Agreement and three (3) copies of the Escrow Agreement and
forward them to Seller for execution, accompanied with the Earnest Money
payable to the Escrow Agent set forth in the Escrow Agreement. Seller will
forward one (1) copy of the executed Agreement to Purchaser and will forward
the following to the Escrow Agent:
(A) Earnest Money;
(B) One (1) fully executed copy of this Agreement; and
(C) Three (3) copies of the Escrow Agreement signed by the parties with a
direction to execute two (2) copies of the Escrow Agreement and deliver a fully
executed copy to each of the Purchaser and the Seller.
22. GOVERNING LAW. The provisions of this Agreement shall be governed by the
laws of the State of Georgia, except that with respect to the retainage of the
Earnest Money as liquidated damages the laws of the State of Illinois shall
govern.
23. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties and supersedes all other negotiations, understandings and
representations made by and between the parties and the agents, servants and
employees.
24. COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.
25. CAPTIONS. Paragraph titles or captions contained herein are inserted as a
matter of convenience and for reference, and in no way define, limit, extend or
describe the scope of this Agreement or any provision hereof.
26. EXISTING LOAN. The Property is currently encumbered by a Deed to Secure
Debt and Security Agreement (the "Mortgage") by Seller to Value Line Mortgage
Corporation and assigned, by intermediate assignments, to State Street Bank and
Trust Company, as Trustee for the Registered Holders of Kidder Peabody
Acceptance Corporation I, Multifamily Mortgage Pass Through Certificate dated
December 17, 1993, which secures that certain Promissory Note (the "Note") made
by Seller payable to the order of Lender in the original principal amount of
Six Million Six Hundred Fifty Thousand Dollars ($6,650,000). Seller shall pay
any prepayment fee associated with the repayment of the Note at closing.
27. SECTION 1031 EXCHANGE. Purchaser's nominee desires to exchange other
property of like kind and qualifying use within the meaning of Section 1031 of
the Internal Revenue Code of 1986 ("IRC"), as amended and the Regulations
promulgated thereunder, for fee title in the Land which is the subject of this
contract. Purchaser's nominee expressly reserves the right to assign its
rights, but not its obligations, hereunder to a Qualified Intermediary as
provided in IRC regulation 1.1031(k)-1(g)(4) on or before the closing date.
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date first set forth above.
PURCHASER:
GROUP ONE INVESTMENTS, INC.,
an Illinois corporation
By: /s/ Robert H. Weitzman
----------------------------------
Name: Robert H. Weitzman
----------------------------------
Its: President
----------------------------------
SELLER:
3655 PEACHTREE LIMITED PARTNERSHIP,
an Illinois limited partnership
By: 3655 Peachtree, Inc., an Illinois
corporation, its general partner
By: /s/ Daniel L. Charleston
------------------------------------
Name: Daniel L. Charleston
------------------------------------
Its: Authorized Agent
------------------------------------
Howell Station
Jay Clark of Apartment Realty Advisors ("Seller's Broker") executed this
Agreement in its capacity as a real estate broker and acknowledges that the fee
or commission due it from Seller as a result of the transaction described in
this Agreement is as set forth in that certain Listing Agreement, dated
February 16, 1996 between Seller and Seller's Broker (the "Listing Agreement").
Seller's Broker also acknowledges that payment of the aforesaid fee or
commission is conditioned upon the Closing and the receipt of the Purchase
Price by the Seller. Seller's Broker agrees to deliver a receipt to the Seller
at the Closing for the fee or commission due Seller's Broker and a release, in
the appropriate form, stating that no other fees or commissions are due to it
from Seller or Purchaser.
Apartment Realty Advisors
By:
------------------------------------
Howell Station
of First Group Properties ("Purchaser's Broker") executed
this Agreement in its capacity as a real estate broker and acknowledges that
the fee or commission due it from Purchaser as a result of the transaction
described in this Agreement is as set forth in that certain ,
dated , 199 between Purchaser and Purchaser's Broker. Purchaser'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. Purchaser's Broker agrees to deliver a receipt to the Purchaser at the
Closing for the fee or commission due Purchaser's Broker and a release, in the
appropriate form, stating that no other fees or commissions are due to it from
Seller or Purchaser.
FIRST GROUP PROPERTIES
By: /s/ Howard Wolkoff
--------------------------------
Exhibits
A - Legal
B - Intentionally Deleted
C - Escrow Agreement
D - Title Commitment
E - Deed
F - Intentionally Deleted
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 - Intentionally Deleted
M - Rent Roll