LOAN PURCHASE AND SALE AGREEMENT
THIS LOAN PURCHASE AND SALE AGREEMENT (this "Agreement") is made as of the
9th day of June, 1997, by and between BALCOR PENSION INVESTORS, an Illinois
limited partnership ("Seller"), and NORTH CAPITOL PROPERTIES L.L.C., a Delaware
limited liability company ("Purchaser").
RECITALS
1. Seller has made a certain Thirty Million Five Hundred Twenty Thousand
and 00/100 Dollars ($30,520,000.00) wrap-around mortgage loan (the "Loan") to
North Capitol Limited Partnership, a District of Columbia limited partnership
("Borrower"), which Loan is evidenced by that certain Secured Promissory Note
dated May 20, 1981 in the stated original principal amount of $30,520,000.00
(the "Note") and is secured by: (i) that certain Wrap-Around Deed of Trust
dated May 20, 1981 and recorded in the District of Columbia's Recorder's Office
as Instrument Number 16009; (ii) that certain Wrap-Around Deed of Trust dated
May 20, 1981 and recorded in the District of Columbia's Recorder's Office as
Instrument Number 16010 (together, the "Deeds of Trust"); and (iii) those
documents identified on Exhibit A attached hereto and made a part hereof (the
Note, Deeds of Trust and the documents identified on Exhibit A are sometimes
hereinafter referred to collectively as the "Loan Documents").
2. Seller is the sole owner and holder of the Loan Documents.
3. Seller desires to sell to Purchaser, and Purchaser desires to buy
from Seller, all of Seller's right, title and interest in, to and under the
Loan Documents; together with all of Seller's right, title and interest, if
any, in and to, without limitation, all bankruptcy and other claims, proofs of
claim, collateral and causes of action arising from or relating to the Loan
Documents and the obligations evidenced and/or secured thereby, on the terms
and subject to the conditions set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, for and in consideration of the foregoing recitals, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
1. Purchase and Sale. On the terms and subject to the conditions set
forth in this Agreement, Seller hereby agrees to sell and assign, without
recourse or warranty, except as otherwise provided herein, its rights in, to
and under the Loan Documents to Purchaser, and Purchaser hereby agrees to
purchase, Seller's rights in, to and under the Loan Documents from Seller, for
the "Purchase Price" (as hereinafter defined).
2. Payment of Purchase Price. The aggregate purchase price for the Loan
Documents is $1,000,000 (the "Purchase Price"). There shall be no prorations
or other closing adjustments between the parties.
3. Closing. The closing (the "Closing") of the sale, and delivery of
the Loan Documents, from Seller to Purchaser will take place at the offices of
Commercial Settlement, Inc., 0000 X Xxxxxx Xxxxxxxxx; 00xx xxxxx, Xxxxxxxxxx,
X.X. 00000, on June 19, 1997 (the "Closing Date"). Time is of the essence.
4. Due Diligence. Promptly following the date of the parties execution
of this Agreement, Seller shall deliver or make available to Purchaser the
following items to the extent they are in Seller's possession: (i) copies of
Seller's files relating to insurance, real estate taxes and inspections of the
Property; (ii) copies of filings and pleadings relating to the bankruptcy of
the Borrower, including the associated operating reports; (iii) copies of the
Loan Documents; (iv) copies of Borrower's financial statements; (v) copies of a
1994 consent to Borrower's converting from a limited partnership to a limited
liability company; (vi) copy of a January 24, 1996 forbearance agreement
between Borrower and Lender; and (viii) a record of loan payments made by
Borrower to Seller (said items are hereinafter referred to collectively as the
"Loan Files"). Seller shall not deliver to Purchaser: (i) copies of any
correspondence between Seller and any other party except to the extent Seller
reasonably believes it amends any of the Loan Documents; (ii) Seller's original
underwriting files; (iii) appraisals of the properties secured by the loan
documents; or (iv) files relating to any letters of credit which have expired.
Purchaser shall have until the date two (2) business days prior to the Closing
Date (the "Review Deadline Date") to review the Loan Files. Purchaser shall
have the right to terminate this Agreement at any time prior to the Review
Deadline Date by delivering written notice of such termination to Seller at any
time prior to 5:00 p.m. Chicago time on the Review Deadline Date in which
event, this Agreement shall terminate and be of no further force and effect.
If Purchaser elects to terminate this Agreement as aforesaid, Purchaser shall
promptly return to Seller the Loan Files. If Purchaser fails to terminate this
Agreement as aforesaid, than Purchaser shall be deemed to have elected to go
forward with the transaction and shall no longer have any right to terminate
this Agreement other than as a consequence of a default by Seller.
5. Closing Deliveries.
5.1. Deliveries of Seller. At the Closing, Seller will deliver the
following to Purchaser:
5.1.1. a duly executed Assignment and Assumption of Loan
Documents in the form attached hereto as Exhibit B (the "Assignment");
5.1.2. the original Note and originals (or certified copies
in a form reasonably acceptable to Purchaser) of the other Loan Documents;
5.1.3. a duly executed Allonge endorsement of the Note to
Purchaser, without recourse or warranty, in the form of Exhibit C attached
hereto;
5.1.4. a duly executed Uniform Commercial Code financing
statement assignment to Purchaser for each financing statement showing Seller
as a secured party in connection with the Loan;
5.1.5. originals (or copies if originals are not available)
of the Loan Files;
5.1.6. copy of the lender's policy or policies of title
insurance issued to Seller in connection with the Loan; and
5.1.7. duly executed originals of such other documents and
instruments as are reasonably necessary to close the transactions contemplated
by this Agreement.
5.2. Deliveries of Purchaser. At the Closing, Purchaser will
deliver the following to the title company to be held in escrow pending
recordation of the Assignment and issuance to Purchaser of an endorsement of
Seller's policy of title insurance showing no intervening liens and showing the
Deeds of Trust to be valid third liens; whereupon the following will be
immediately delivered to Seller:
5.2.1. Purchase Price by official check of a member bank of
the Federal Reserve System (if sufficient for the title company to wire
transfer the proceeds of the Purchase Price to Seller on the same day as
receipt by title company of such check) or by wire transfer of immediately
available funds (delivery of the Purchase Price from the title company to
Seller shall in any case be by wire transfer);
5.2.2. a duly executed counterpart of the Assignment; and
5.2.3. duly executed originals of such documents and
instruments as are reasonably necessary to close the transactions contemplated
by this Agreement.
6. Seller's Representations and Warranties. Seller hereby represents
and warrants to Purchaser as follows, which representations and warranties
shall not survive Closing:
6.1. Organization and Authority. Seller is a limited partnership
duly organized, validly existing and in good standing under the laws of the
State of Illinois. Seller has the requisite power and authority to execute
this Agreement and to consummate and perform the transaction contemplated by
this Agreement. This section 6.1 shall survive Closing.
6.2. No Encumbrances. The Loan Documents are owned by Seller free
and clear of all security interests, liens, adverse claims, pledges, options,
rights of first refusal, and other encumbrances of any nature whatsoever,
except as may be set forth in the Loan Documents. The parties agree that the
representations contained in this Section 6.2 shall survive Closing for a
period of sixty (60) 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 sixty (60) days immediately following Closing).
6.3. Loan. To Seller's knowledge, Exhibit A sets forth a true,
correct and complete list of the Loan Documents. Seller has previously
delivered to Purchaser a copy of each of the Loan Documents which are true,
correct and complete in all material respects. To Seller's knowledge: (i) the
Loan Documents are in full force and effect and have not been amended or
modified, whether orally or in writing; (ii) Seller has not received notice
from any governmental agency regarding an uncured violation of any
environmental law; (iii) Seller has not consented to any plan of reorganization
in any bankruptcy proceeding in which the Loan is at issue; and (iv) Seller is
not holding any escrow for the payment of taxes or insurance with respect to
the Property. The outstanding principal balance under the Loan as of the date
of this Agreement is $30,443,927.00. Seller shall advise Purchaser in writing,
prior to Closing, in the event Seller receives any monies or other things of
value received on account of the Loan from the date hereof until the Closing
and shall turn over to Purchaser any such monies received by Seller after
Closing (the obligation to turn over any such monies shall survive Closing).
6.4. Knowledge. Any reference in this Agreement to Seller's
knowledge or notice of any matter or thing shall only mean such knowledge or
notice that has actually be received by Xxxx Xxxxxxxx ("Seller's
Representative") and any representation or warranty of the Seller is limited to
matters of which 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.
7. Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to Seller that Purchaser is a limited liability
company, duly organized, validly existing and in good standing under the laws
of the State of Delaware. Purchaser has the full right, power and authority to
execute this Agreement and consummate the transactions contemplated by this
Agreement.
8. Indemnification.
8.1. Indemnification By Purchaser. From and after Closing,
Purchaser will indemnify, defend and hold harmless Seller, Seller's Affiliates
and their Representatives (each, a "Seller Indemnitee") from and against any
and all third party claims, demands or suits, losses, liabilities, actual or
punitive damages, fines, excise taxes, penalties, obligations, payments, costs
and expenses, paid or incurred, including without limitation the costs and
expenses of any and all actions, suits, proceedings, demands, assessments,
judgments, settlements and compromises relating thereto and reasonable
attorneys' fees and expenses (individually and collectively, "Indemnifiable
Losses") asserted against, resulting from or suffered or incurred by any Seller
Indemnitee and arising out of any claims by the Borrower arising out of any act
or omission of Purchaser occurring after the Closing resulting from Purchaser's
administration of the Loan.
8.2. Defense of Claims. If any Seller Indemnitee receives notice of
the assertion of any claim or of the commencement of any action or proceeding
by any person or entity that is not a party to this Agreement or an Affiliate
of such party ("Third Party Claim") against such Seller Indemnitee, Seller
Indemnitee will timely notify Purchaser. With respect to claims as to which
Purchaser is obligated to provide indemnification under this Agreement, such
Seller Indemnitee will give Purchaser reasonably prompt notice thereof.
Purchaser shall assume the defense of such Third Party Claim, at its own
expense and by its own counsel reasonably satisfactory to such Seller
Indemnitee. Without the prior written consent of such Seller Indemnitee,
Purchaser shall not enter into any settlement of any Third Party Claim which
would lead to liability or create any financial or other obligation on the part
of such Seller Indemnitee.
9. Limitation Of Seller's Liability. Except as expressly set froth in
this Agreement, the sale of the Note and the other Loan Documents shall be
without recourse to Seller and Seller makes no representations concerning the
Loan Documents and hereby disclaims all warranties of any kind or nature
whatsoever, whether expressed or implied. Purchaser acknowledges that this is
an arm's-length transaction and that Purchaser is not relying upon any
representation of any kind or nature made by Seller (or any other person or
entity on behalf of Seller) in entering into and consummating the transactions
contemplated under this Agreement other than those expressly set forth herein.
No officer, partner, affiliate, shareholder, director, agent or employee of
Seller shall have any personal liability of any kind or nature for or by reason
of any matter or thing whatsoever under or in connection with, arising out of,
or in any way related to this Agreement or the transactions provided for herein
and Purchaser, its Affiliates and all persons claiming by, through or under
Purchaser or its Affiliates, hereby waive any and all right to xxx or recover
on account of any such personal liability, whether real or claimed.
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 $25,000. Purchaser hereby waives for
itself and anyone who may claim by, through or under Purchaser any and all
rights to xxx or recover from Seller any amount greater than said limit.
10. Default.
10.1. Default by Purchaser. In the event this transaction fails
to close due to the default of the Purchaser under the provisions of this
Agreement, Seller shall be able to pursue all of its rights and remedies at law
or equity.
10.2. Default by Seller. In the event this transaction fails to
close due to the default of Seller under the provisions of this Agreement,
Purchaser shall have the right to terminate this Agreement and Seller shall pay
to Purchaser the actual costs and expenses incurred by Purchaser in connection
with this transaction up to a maximum amount of $10,000 or alternatively
Purchaser may pursue an action for specific performance. In the event
Purchaser is not able to obtain the endorsement to Seller's existing title
insurance policy required by Purchaser, Seller shall not be in default hereof
and Purchaser's sole remedy shall be to terminate the Agreement.
11. Brokers. The parties hereto represent and warrant that no broker
commission or finder fee is due and payable in connection with this
transactions. 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 cost of appeal) from anyone
claiming by or through the indemnifying party any fees, commission or
compensation on account of this Agreement, its negotiation or the sale hereby
contemplated. The indemnifying party shall undertake its obligations set forth
in this Paragraph 10 using attorneys selected by the indemnifying party and
reasonably acceptable to the indemnified party. The provisions of this
Paragraph 10 shall survive the Closing or termination of this Agreement.
12. Closing Costs. Except as may be otherwise expressly provided in this
Agreement, each party shall pay its own costs incurred in negotiating,
executing, delivering and performing this Agreement.
13. Notices. Any notice or demand which either party hereto is required
or may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by overnight courier
such as Federal Express or by facsimile or made by United States registered or
certified mail addressed as follows:
TO SELLER: c/o The Balcor Company
0000 Xxxxxxxx Xxxx; Xxxxx X000
Xxxxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxxx
with a copy to: Xxxxxx Xxxxxx & Xxxxx
000 X. Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Small, Esq.
TO PURCHASER: North Capitol Properties L.L.C.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx, President
with a copy to: Pavelic & Levites P.C.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be
deemed to be delivered or made on the next business day if sent by overnight
courier, or on the same day if sent by facsimile before the close of business,
or the next day if sent by facsimile after the close of business, or on the 4th
business day after the same is deposited in the United States Mail as
registered or certified matter, addressed as above provided, with postage
thereon fully prepaid. Any such notice, demand or document not given,
delivered or made by registered or certified mail or by overnight courier or by
facsimile as aforesaid shall be deemed to be given, delivered or made upon
receipt of the same by the party to whom the same is to be given, delivered or
made.
14. Merger; No Amendment to Loan Documents. This Agreement, together
with the exhibits contain the entire agreement between the parties respecting
the matters herein set forth and supersedes all prior agreements between the
parties hereto about such matters. Nothing in this Agreement will be deemed to
constitute an amendment or modification of, and this Agreement will not in any
way amend or modify, any of the Loan Documents.
15. Governing Law. The validity, performance and enforcement of this
Agreement and all documents contemplated herein, unless expressly provided
herein or therein to the contrary, shall be governed by the laws of the
District of Columbia, without giving effect to the principles of conflicts of
law thereof.
16. Execution In Counterparts. This Agreement may be executed in
multiple counterparts, transmitted by facsimile with originals promptly
provided thereafter, each of which shall be deemed an original, but all of
which together shall constitute one and the same Agreement.
17. Titles And Headings. Titles and headings to Articles or Sections
herein are inserted for convenience of reference only, and are not intended to
be a part of or to affect the meaning or interpretation of this Agreement.
18. Assignment. Purchaser shall not have the right to assign its
interest in this Agreement without the prior written consent of 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.
Notwithstanding the foregoing, Purchaser may assign its interest in this
Agreement without the consent of Seller to any entity affiliated with
Purchaser, provided that Purchaser remains liable for, and the assignee assumes
the obligations of, Purchaser hereunder. This provision shall not survive
Closing.
19. Certain Interpretive Matters And Definitions.
(a) Unless the context otherwise requires, (i) all references to
Sections, Articles or Schedules are to the Sections, Articles or Schedules of
or to this Agreement, (ii) each term defined in this Agreement has the meaning
assigned to it, and (iii) words in the singular include the plural and vice
versa.
(b) No provision of this Agreement will be interpreted in favor of,
or against, any of the parties hereto by reason of the extent to which any such
party or its counsel participated in the drafting thereof or by reason of the
extent to which any such provision is inconsistent with any prior draft hereof
or thereof.
(c) For purposes of this Agreement, the following terms have the
meanings set forth below:
"Affiliate" shall mean, with respect to any Person, any other
Person that directly or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with such Person.
"Person" shall mean any natural person, corporation, general
partnership, limited partnership, proprietorship, trust, union, association,
court, tribunal, agency, government, department, commission, self-regulatory
organization, arbitrator, board, bureau, instrumentality, or other entity,
enterprise, authority, or business organization.
"Representative" shall mean, with respect to any Person, any
director, officer, employee, agent, advisor, counsel, accountant, lender or
other representative of such Person or of any Affiliate of such Person or any
Representative of any of the foregoing.
20. Further Assurances. The following covenants shall survive the
Closing for ninety (90) days. Seller shall:
20.1. promptly execute and deliver any documents as may be
reasonably necessary to further effectuate the purpose of this Agreement and to
vest Purchaser with good title to the Loan Documents and the obligations
evidenced or secured thereby;
20.2. at Purchaser's sole cost and expense and with no liability
to Seller, in good faith assist and cooperate with Purchaser in the event of
any litigation with third parties in respect of this Agreement or the Loan
Documents.
21. Confidentiality. Seller shall for a period of 180 days from the date
hereof use its good faith efforts not to disclose nor affirm the existence or
particulars of this Agreement except: (i) to its investors as required by law
or consistent with its past practices; (ii) as may be required by law; (iii) to
its lawyers, accountants, consultants, officers, directors and any other person
or entity to which Seller customarily discloses the existence of agreements of
this type; and (iv) to the extent the existence or particulars of this
Agreement is otherwise generally available to the public.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
BALCOR PENSION INVESTORS, an Illinois
limited partnership
By: Balcor Mortgage Advisors, an Illinois
general partnership, its general partner
By: RGF-Balcor Associates, an Illinois
general partnership, a partner
By: The Balcor Company, a Delaware
corporation, a partner
By: /s/ Xxxxx Xxxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxxx
---------------------------------
Its: Authorized Representative
---------------------------------
NORTH CAPITOL PROPERTIES L.L.C.,
a Delaware limited liability company
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
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Its: Manager
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