AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), is entered into as of the 20th
day of November, 1996, by and between INFINITY ACQUISITIONS, L.L.C., an
Illinois limited liability company ("Purchaser"), and STEEPLECHASE 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 Ten Million Six Hundred Thousand And No/100 Dollars
($10,600,000.00) (the "Purchase Price"), that certain property commonly known
as Steeplechase Apartments, Lexington, Kentucky, legally described on Exhibit A
attached hereto (the "Property"). Included in the Purchase Price is all of the
personal property set forth on Exhibit B attached hereto (the "Personal
Property").
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as follows:
2.1. Upon the execution of this Agreement, the sum of Two Hundred Fifty
Thousand and No/100 Dollars ($250,000.00) (the "Xxxxxxx 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. The assumption by Purchaser of Seller's obligation under the "Loan
Documents" (as hereinafter defined), being an amount equal to the outstanding
principal balance of and all accrued and unpaid interest on the "Notes" (as
hereinafter defined) as of the "Closing Date" (as hereinafter defined); and
2.3. 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 standard title insurance policy issued by Lawyer's Title Insurance, as
agent for Lawyer's Title Insurance Corporation (hereinafter referred to as
"Title Insurer") dated June 6, 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 "Updated
Survey" (hereinafter defined); (d) the Loan Documents; (e) matters caused by
the actions of Purchaser; and (f) the title exceptions set forth in Schedule B
of the Title Commitment as Numbers 1 through 21 inclusive, to the extent that
same affect the Property. All other exceptions to title shall be referred to
as "Unpermitted Exceptions". The Title Commitment shall be conclusive evidence
of good title as therein shown as to all matters to be insured by the title
policy, subject only to the exceptions therein stated. On the Closing Date,
Title Insurer shall deliver to Purchaser a standard title policy in conformance
with the previously delivered Title Commitment, subject to Permitted Exceptions
and Unpermitted Exceptions approved in writing by Purchaser (the "Title
Policy"). Seller and Purchaser shall equally share the costs of the Title
Commitment and Title Policy 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 Xxxxx
Engineering, Inc., dated June 4, 1996 (as revised) (the "Updated Survey").
Purchaser hereby acknowledges that all matters disclosed by the Updated Survey
are acceptable to Purchaser.
3.3. The obligation of Purchaser and Seller to pay various costs set forth
in Paragraphs 3.1 and 3.2 shall survive the termination of this Agreement.
4. PAYMENT OF CLOSING COSTS. In addition to the costs set forth in
Paragraphs 3.1 and 3.2, Purchaser and Seller shall equally share the costs of
the documentary or transfer stamps 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
and all other charges of the Title Insurer in connection with this transaction.
5. CONDITION OF TITLE.
5.1. If, prior to "Closing" (as hereinafter defined), a date-down to the
Title Commitment or the Updated Survey discloses any Unpermitted Exception,
Seller shall have thirty (30) days from the date of the date-down to the Title
Commitment or the Updated Survey, as applicable, at Seller's expense, to (i)
bond over, cure and/or have any Unpermitted Exceptions which, in the aggregate,
do not exceed $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, equal or 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. In such
event, the time of Closing shall be delayed, if necessary, to give effect to
said aforementioned time periods. If Seller fails to cure or have said
Unpermitted Exception removed or have the Title Insurer commit to insure as
specified above within said thirty (30) day period or if Seller elects not to
exercise its rights under (ii) in the preceding sentence, Purchaser may
terminate this Agreement upon notice to Seller within five (5) days after the
expiration of said thirty (30) day period; 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 any unrelated third party) with the intention to prevent 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 11 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 Xxxxxxx 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. Notwithstanding anything to the contrary in this Section 5.1, Seller shall
bond over, cure or remove, prior to or at Closing, any and all liens of a
definitive and ascertainable amount.
5.2. Seller agrees to convey fee simple title to the Property 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 reasonably 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 reasonably 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 fifteen (15) 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 Xxxxxxx Money deposited by Purchaser shall be
returned to Purchaser together with interest thereon, and neither party shall
have any further liability or obligations hereunder. In the event that
Purchaser does not exercise the option set forth in the preceding sentence, the
Closing shall take place on the Closing Date and Seller shall assign and
transfer to Purchaser on the Closing Date all of Seller's right, title and
interest in and to all insurance proceeds paid or payable to Seller on account
of the fire or casualty.
6.2. If between the date of this Agreement and the Closing Date, any
condemnation or eminent domain proceedings are initiated which might result in
the taking of any part of the Property or the taking or closing of any right of
access to the Property, Seller shall immediately notify Purchaser of such
occurrence. In the event that the taking of any part of the Property shall:
(i) materially impair access to the Property; (ii) cause any material
non-compliance with any applicable law, ordinance, rule or regulation of any
federal, state or local authority or governmental agencies having jurisdiction
over the Property or any portion thereof; or (iii) materially and adversely
impair the use of the Property as it is currently being operated (hereinafter
collectively referred to as a "Material Event"), Purchaser may:
6.2.1. terminate this Agreement by written notice to Seller, in
which event the Xxxxxxx Money deposited by Purchaser, together with interest
thereon, shall be returned to Purchaser and all rights and obligations of the
parties hereunder with respect to the closing of this transaction will cease;
or
6.2.2. proceed with the Closing, in which event Seller shall assign
to Purchaser all of Seller's right, title and interest in and to any award made
in connection with such condemnation or eminent domain proceedings.
6.3. Purchaser shall then notify Seller, within fifteen (15) days after
Purchaser's receipt of Seller's notice, whether Purchaser elects to exercise
its rights under Paragraph 6.2.1 or Paragraph 6.2.2. Closing shall be delayed,
if necessary, until Purchaser makes such election. If Purchaser fails to make
an election within such five (5) business day period, Purchaser shall be deemed
to have elected to exercise its rights under Paragraph 6.2.2. If between the
date of this Agreement and the Closing Date, any condemnation or eminent domain
proceedings are initiated which do not constitute a Material Event, Purchaser
shall be required to proceed with the Closing, in which event Seller shall
assign to Purchaser all of Seller's right, title and interest in and to any
award made in connection with such condemnation or eminent domain proceedings.
7. INSPECTION AND AS-IS CONDITION.
7.1. During the period commencing on October 28, 1996 and ending at 5:00
p.m. Chicago time on December 2, 1996 (said period being herein referred to as
the "Inspection Period"), Purchaser and the agents, engineers, employees,
contractors and surveyors retained by Purchaser may enter upon the Property, at
any reasonable time and upon reasonable prior notice to Seller, to inspect the
Property, including a review of leases located at the Property, and to conduct
and prepare such studies, tests and surveys as Purchaser may deem reasonably
necessary and appropriate. In connection with Purchaser's review of the
Property, Seller agrees to deliver to Purchaser copies of the current rent roll
for the Property, the most recent tax and insurance bills, utility account
numbers, service contracts, unaudited year end 1995 and year-to-date (through
October, 1996) and other documents reasonably available to Seller requested by
Purchaser.
All of the foregoing tests, investigations and studies to be conducted
under this Paragraph 7.1 by Purchaser shall be at Purchaser's sole cost and
expense and Purchaser shall restore the Property to the condition existing
prior to the performance of such tests or investigations by or on behalf of
Purchaser. Purchaser shall defend, indemnify and hold Seller and any
affiliate, parent of Seller, and all shareholders, employees, officers and
directors of Seller or Seller's affiliate or parent (hereinafter collectively
referred to as "Affiliate of Seller") harmless from any and all liability, cost
and expense (including without limitation, reasonable attorney's fees, court
costs and costs of appeal) suffered or incurred by Seller or Affiliates of
Seller for injury to persons or property caused by Purchaser's investigations
and inspection of the Property. Purchaser shall undertake its obligation to
defend set forth in the preceding sentence using attorneys selected by Seller,
in Seller's sole discretion.
Prior to commencing any such tests, studies and investigations, Purchaser
shall furnish to Seller a certificate of insurance evidencing comprehensive
general public liability insurance insuring the person, firm or entity
performing such tests, studies and investigations and listing Seller and
Purchaser as additional insureds thereunder.
If Purchaser is dissatisfied with the results of the tests, studies or
investigations performed or information received pursuant to this Paragraph
7.1, Purchaser shall have the right to terminate this Agreement by giving
written notice of such termination to Seller at any time prior to the
expiration of the Inspection Period. If written notice is not received by
Seller pursuant to this Paragraph 7.1 prior to the expiration of the Inspection
Period, then the right of Purchaser to terminate this Agreement pursuant to
this Paragraph 7.1 shall be waived. If Purchaser terminates this Agreement by
written notice to Seller prior to the expiration of the Inspection Period: (i)
Purchaser shall promptly deliver to Seller copies of all studies, reports and
other investigations obtained by Purchaser in connection with its due diligence
during the Inspection Period; and (ii) the Xxxxxxx 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. Seller can make no representations or warranties relating to the
condition of the Property or the Personal Property. Purchaser acknowledges and
agrees that it will be purchasing the Property and the Personal Property based
solely upon its inspections and investigations of the Property and the Personal
Property, and that Purchaser will be purchasing the Property and the Personal
Property "AS IS" and "WITH ALL FAULTS", based upon the condition of the
Property and the Personal Property as of the date of this Agreement, wear and
tear and loss by fire or other casualty or condemnation excepted. Without
limiting the foregoing, Purchaser acknowledges that, except as may otherwise be
specifically set forth elsewhere in this Agreement, neither Seller nor its
consultants, brokers or agents have made any representations or warranties of
any kind upon which Purchaser is relying as to any matters concerning the
Property or the Personal Property, including, but not limited to, the condition
of the land or any improvements comprising the Property, the existence or
non-existence of "Hazardous Materials" (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 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 and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Except as expressly set forth in
Section 16, 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 the following existing report:
Environmental Risk Consultants, Inc., dated August 15, 1990 ("Existing
Report"). Seller makes no representation or warranty concerning the accuracy
or completeness of the Existing Report. Purchaser hereby releases Seller and
the Affiliates of Seller from any liability whatsoever with respect to the
Existing Report, or, including, without limitation, the matters set forth in
the Existing Report, and the accuracy and/or completeness of the Existing
Report. Furthermore, Purchaser acknowledges that it will be purchasing the
Property with all faults disclosed in the Existing Report. Notwithstanding
anything contained herein to the contrary, the terms of this Paragraph 7.4
shall survive the Closing and the delivery of the Deeds and termination of this
Agreement.
8. CLOSING. The closing of this transaction (the "Closing") shall be on
January 13, 1997 (the "Closing Date"), at the office of Title Insurer,
Lexington, Kentucky, at which xxxx Xxxxxx 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 Kentucky,
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. 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 and 9.2.4 and such other documents as
may be reasonably required by the Title Insurer in order to consummate the
transaction as set forth in this Agreement.
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),
subject to Permitted Exceptions and those Unpermitted Exceptions waived by
Purchaser;
9.2.2. a quit claim xxxx of sale conveying the Personal Property
(in the form of Exhibit F attached hereto);
9.2.3. assignment and assumption of intangible property (in the form
attached hereto as Exhibit G), including, without limitation, the service
contracts listed in Exhibit H;
9.2.4. an assignment and assumption of leases and security deposits
(in the form attached hereto as Exhibit I);
9.2.5. non-foreign affidavit (in the form of Exhibit J attached
hereto);
9.2.6. original, and/or copies of, leases 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 (Exhibit L)
9.2.12. an assignment and assumption of existing loan documents (in
the form of Exhibit N).
10. PURCHASER'S DEFAULT. ALL XXXXXXX 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 XXXXXXX 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 XXXXXXX 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 XXXXXXX 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 AND PURCHASER'S RIGHT TO RECEIVE FROM SELLER ITS ACTUAL, DOCUMENTED
THIRD PARTY EXPENSES INCURRED IN THE PERFORMANCE OF ITS DUE DILIGENCE HEREUNDER
AND THE PREPARATION OF THIS AGREEMENT, NOT TO EXCEED $25,000 IN THE AGGREGATE.
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 WITH THE
INTENTION TO PREVENT THE SALE OF THE PROPERTY IN ACCORDANCE WITH THE TERMS
HEREOF AND WHICH GIVES RISE TO PURCHASER'S RIGHT TO TERMINATE THIS AGREEMENT
PURSUANT TO PARAGRAPH 5 HEREOF; (ii) ITS FAILURE TO EXPEND UP TO $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 EITHER XXX FOR SPECIFIC PERFORMANCE OR RECEIVE
FROM SELLER ITS ACTUAL DAMAGES, NOT TO EXCEED $250,000 IN THE AGGREGATE.
12. PRORATIONS.
12.1. Rents (exclusive of delinquent rents, but including prepaid rents);
refundable security deposits (which will be assigned to and assumed by
Purchaser and credited to Purchaser at Closing); water and other utility
charges; accrued but unpaid interest on the Notes; fuels; prepaid operating
expenses; real and personal property taxes; and other similar items shall be
adjusted ratably as of 11:59 p.m. on the Closing Date, and credited against the
balance of the cash due at Closing. Assessments payable in installments which
are due subsequent to the Closing Date shall be paid by Purchaser. If the
amount of any of the items to be prorated is not then ascertainable, the
adjustments thereof shall be on the basis of the most recent ascertainable
data. In addition, Purchaser shall give Seller a credit at Closing for all
escrows, reserves and holdbacks, held by the Lender under the Loan Documents.
All prorations will be final except as to delinquent rent referred to in
Paragraph 12.2 below.
12.2. All basic rent paid following the Closing Date by any tenant of the
Property who is indebted under a lease for rent for any period prior to and
including the Closing Date after the payment to Purchaser of all current 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.
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. 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 10 hereof.
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 Insignia Mortgage & Investment Company ("Insignia") (to be paid
by Seller). Seller's commission to Insignia 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 Insignia, and Seller shall indemnify Purchaser and
hold Purchaser harmless from any claim brought against Purchaser by Insignia in
connection with Insignia's broker commission on this transaction. 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 Xxxxx Xxxxxxxxx or Xxxxxxx Xxxxxx, the asset manager (together, the
"Seller's Representatives"), and any representation or warranty of the Seller
is based upon those matters of which the Seller's Representatives have 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 Representatives.
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 and which shall
not survive Closing: (i) Seller has no knowledge of any pending or threatened
litigation, claim, cause of action or administrative proceeding concerning the
Property; (ii) Seller has the power to execute and deliver this Agreement and
consummate the transactions contemplated herein; (iii) the rent roll attached
hereto as Exhibit L which Seller will update as of the Closing Date is accurate
as of the date set forth thereon; (iv) 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
Environmental Law with respect to the Property; (v) Seller is not subject to
any agreement or obligation, including any right of first refusal, redemption
rights or option to purchase in favor of a third party, which would prevent
Seller from performing its obligations pursuant to this Agreement; (vi) Seller
has not received any notice from a tenant of the Property alleging a material
default by Seller as landlord under any of the Property leases; (vii) Seller
has no direct employees at the Property, and (viii) the unaudited operating
statements for 1995 and 1996 to date which Seller has delivered to Purchaser
are the same information which Seller relies upon in making reports to its
limited partners and in filing its federal income tax returns.
16.3. 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.
16.4. Seller covenants to (i) 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; (ii) pay on or before the Closing Date any leasing commission due
after the Closing Date; and (iii) terminate its management agreement for the
Property effective on the Closing Date.
17. LIMITATION OF LIABILITY. Neither Seller, nor any 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 xxx or recover on account of any such
alleged personal liability.
18. TIME OF ESSENCE. Time is of the essence of this Agreement.
19. 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: x/x Xxx Xxxxxx Xxxxxxx
Xxxxxxxxxxx Xxxx Xxxxxx Xxxxx
0000 Xxxxxxxx Xxxx
Xxxxx X-000
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxx
with copies to: The Balcor Company
Bannockburn Lake Office Plaza
0000 Xxxxxxxx Xxxx
Xxxxx X-000
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxx
(000) 000-0000
(000) 000-0000 (FAX)
and to: Xxxxxx Xxxxxx & Xxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
(000) 000-0000
(000) 000-0000 (FAX)
TO PURCHASER: Infinity Acquisitions, L.L.C.
000 Xxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
(000) 000-0000
(000) 000-0000 (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.
20. 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 Xxxxxxx 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) Xxxxxxx 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.
21. GOVERNING LAW. The provisions of this Agreement shall be governed by the
laws of Kentucky, except that with respect to the retainage of the Xxxxxxx
Money as liquidated damages the laws of the State of Illinois shall govern.
22. 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.
23. 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.
24. 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.
25. ASSUMPTION OF LOAN. The Property is currently encumbered by those certain
three Mortgage and Security Agreements (the "Mortgages") by Seller to Value
Line Mortgage Corporation, each facility as assigned, by intermediate
assignments, to Commercial Mortgage Corporation of America (the "Lender"), and
each dated May 21, 1993, which secure those certain three Promissory Notes (the
"Notes") made by Seller in favor of Value Line Mortgage Corporation, and
assigned on May 21, 1993 to Lender, in the original principal amounts of (i)
Three Million Four Hundred Twenty Seven Thousand Dollars ($3,427,000.00), (ii)
Three Million Two Hundred Three Thousand Five Hundred Dollars ($3,203,500.00),
and (iii) Eight Hundred Nineteen Thousand Five Hundred Dollars ($819,500.00)
(the Mortgages and the Notes, together with all other documents or instruments
enter into in connection with the Mortgages and the Notes, are hereinafter
referred to as the "Loan Documents"). Seller has delivered to Purchaser copies
of those Loan Documents set forth on Exhibit M. In addition, within thirty (30)
business days of the date hereof, Seller shall provide Purchaser with a list of
all escrows, reserves and holdbacks held by Lender under the Loan Documents.
Notwithstanding anything contained in this Agreement to the contrary,
Purchaser and Seller agree that the obligation of each party to consummate the
transactions contemplated by this Agreement are contingent upon the occurrence
of the following on or before the expiration of the Inspection Period (the
"Condition Precedent"): Lender consenting, in writing, to (i) the assumption by
Purchaser of Seller's obligations under the Loan Documents on terms reasonably
acceptable to Purchaser and (ii) a release by Lender of Seller from any
liability under the Loan Documents (together, the "Lender Consent"). If
Purchaser does not terminate this Agreement on or before the expiration of the
Inspection Period in accordance with Paragraph 7, then Purchaser acknowledges
that for purposes of this Agreement the Lender Consent shall be deemed
reasonable if it provides for the assumption by Purchaser of Seller's
obligations under the Loan Documents on terms and conditions which do not
expand the existing obligations under the Loan Documents, including, without
limitation, the payment by Purchaser in connection with obtaining the Lender
Consent of the application fee set forth in the Loan Documents or in the
absence of a specified amount in the Loan Documents a reasonable application
fee imposed by Lender, an assumption fee in a maximum amount of one percent
(1%) of the outstanding principal balance of the Notes and the reasonable costs
and expenses of the Lender, including Lender's $1,500 application fee for each
of the Mortgages (a total of $4,500). Purchaser agrees to promptly commence
and diligently pursue obtaining the Lender Consent. Purchaser shall keep
Seller advised of and allow Seller to participate in the process of obtaining
the Lender Consent and Seller agrees to cooperate with Purchaser (at no expense
to Seller) in Purchaser's efforts to obtain the Lender Consent.
Purchaser shall immediately notify Seller upon obtaining the Lender
Consent. If Purchaser is unable to obtain the Lender Consent on or before five
(5) business days prior to the Closing Date, then this Agreement shall be
terminated; provided however, this Agreement shall not terminate if Purchaser
delivers a notice to Seller on or before five (5) business days prior to the
Closing Date, stating that Purchaser (i) agrees to consummate this transaction
without the assuming the Loan Documents, and (ii) will be responsible for the
full payment of all costs incurred by Seller in connection with Seller's
prepayment of the Notes, including but not limited to the 4% prepayment premium
required by the Loan Documents. If this Agreement is terminated in accordance
with the immediately preceding sentence, then (i) Purchaser shall promptly
deliver to Seller copies of all studies, reports and other investigations
obtained by Purchaser in connection with its due diligence during the
Inspection Period; (ii) the Xxxxxxx Money deposited by Purchaser shall be
immediately paid to Purchaser, together with any interest earned thereon, and
(iii) 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 Paragraph 7.
Provided Purchaser obtains the Lender Consent, at the Closing (i)
Purchaser shall assume all of Seller's obligation under the Loan Documents and
(ii) Seller shall be released from any liability under the Loan Documents. In
connection therewith, Purchaser and Seller agree to execute customary and
necessary documents reflecting such assumption and such release reasonably
required by the Lender and reasonably acceptable to Purchaser and Seller.
26. SERVICE CONTRACTS. Attached hereto as Exhibit H is a list of service
contracts affecting the Property. Seller shall assign the service contracts to
Purchaser at Closing, and Purchaser shall assume responsibility and obligations
under the service contracts. Seller agrees not to enter into any other service
contracts affecting the Property. Seller agrees to terminate any and all
management agreements affecting the Property as of the Closing Date.
27. LIKE KIND EXCHANGE. The Property is intended by Purchaser to constitute
replacement property, in an exchange under Section 1031 of the Internal Revenue
Code, for certain property which Purchaser currently owns (the "Relinquished
Property"). Seller will cooperate with Purchaser (at no cost to Seller) in
effecting such an exchange in compliance with the Internal Revenue Code and
applicable treasury regulations, to the extent that Seller will consent to and
acknowledge an assignment of Purchaser's rights under this Agreement to the
Title Insurer, or to another qualified intermediary designated by Purchaser for
purposes of acquiring the Property with proceeds from the disposition of the
Relinquished Property. Seller will not be responsible for the tax consequences
to Purchaser of the transactions contemplated under this Agreement and under
the agreement to sell the Relinquished Property. Seller will not be required
to accept title to the Relinquished Property and will have no obligations
whatsoever to the owner of the Relinquished Property. The assignment by
Purchaser of its rights hereunder to the Title Company, or to another qualified
intermediary, for purposes of effecting such an exchange, will not relieve
Purchaser of any of its obligations under this Agreement.
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date first set forth above.
PURCHASER:
INFINITY ACQUISITIONS, L.L.C., an Illinois
limited liability company
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
-----------------------------------
Its: Manager
-----------------------------------
SELLER:
STEEPLECHASE PARTNERS LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Steeplechase Partners, Inc., an Illinois
corporation, its general partner
By: /s/ Xxxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxxxx
----------------------------------
Its: Authorized Representative
----------------------------------
Steeplechase
of Insignia Mortgage & Investment Company ("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 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.
Insignia Mortgage & Investment Company
By:
-----------------------------------
Exhibits
A - Legal
B - Personal Property
C - Escrow Agreement
D - Title Commitment
E - Deed
F - Xxxx 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 Loan Documents
N - Assignment and Assumption of Existing Loan Documents
