AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), is entered into as of the 18th
day of October, 1996 (the "Execution Date"), by and between AIMCO PROPERTIES,
L.P., a Delaware limited partnership ("Purchaser"), and CHESAPEAKE ASSOCIATES,
an Illinois limited partnership ("Seller"). All capitalized terms used and
otherwise defined in the text hereof shall have the meaning ascribed thereto in
Paragraph 28 hereof.
RECITALS
A. Purchaser is the owner of a fee simple interest in that certain real
property located at 0000 Xxxxx Xxxx Xxxxx, Xxxxxxx, Xxxxx, 00000 more
particularly described on Exhibit A attached hereto and made a part hereof (the
"Land"). The Land, together with the Improvements, the balance of the Real
Property, the Personal Property, and the Intangible Property, shall be
collectively referred to herein as the "Property."
B. Seller desires to sell, transfer, convey, and assign the Property to
Purchaser, and Purchaser desires to purchase the Property from Seller, upon and
subject to the terms and conditions set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants contained in the
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Purchaser and Seller hereby agree
as follows:
1. PURCHASE AND SALE. Upon and subject to all of the terms and conditions of
this Agreement, Purchaser agrees to purchase from Seller and Seller agrees to
sell to Purchaser at the price of Seven Million Nine Hundred Fifty Thousand And
No/100 Dollars ($7,950,000.00) (the "Purchase Price"), subject to adjustments
as hereinafter provided, the Property.
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as follows:
2.1. On or before the date that is three (3) Business Days following the
Execution Date, the sum of Two Hundred Thousand and No/100 Dollars
($200,000.00) (the "Xxxxxxx Money") to be held in Escrow by and in accordance
with the provisions of the Escrow Agreement (the "Escrow Agreement") attached
hereto as Exhibit B;
2.2. At the "Closing" (as hereinafter defined), subject to the terms of
Paragraph 20 herein, the assumption by Purchaser of Seller's obligations under
the "Loan Documents" (as hereinafter defined), being an amount equal to the
outstanding principal balance of and all accrued unpaid interest on the "Note"
(as hereinafter defined) as of the "Closing Date" (as hereinafter defined); and
2.3. At the Closing, the balance of the Purchase Price, adjusted for
prorations and Closing costs as hereinafter provided, by federally wired
"immediately available" funds, on or before 11:00 a.m. Chicago time.
3. TITLE COMMITMENT AND SURVEY.
3.1. Delivery. Seller has previously delivered to Purchaser a title
commitment for an owner's standard title insurance policy issued by Charter
Title Company, as agents for Lawyers Title Insurance Corporation dated August
30, 1996 (hereinafter referred to as "Charter") for the Property. At
Purchaser's sole cost and expense, Purchaser shall obtain a new title
commitment, a copy of which is attached hereto as Exhibit C (the "Title
Commitment"), together with copies of all documents, if any, referenced as
exceptions therein (the "Underlying Documents") issued by Xxxxxxx Title
Guaranty Company (hereinafter referred to as "Title Insurer") and shall pay any
costs or penalties associated with Seller's cancellation of Seller's policy
with Charter. In addition, Seller has provided Purchaser with an existing
survey or plat map for the Property (the "Existing Survey"). Purchaser may
obtain, at its sole cost and expense, an update of the Existing Survey for the
Property or a new survey of the Property (either of which shall hereinafter be
referred to as the "Updated Survey". 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 caused by the actions of Purchaser; (d) matters relating
to the liens and security interests granted to secure the loan evidenced by the
Note; and (e) Disapproved Title Exceptions which are waived by Purchaser
pursuant to Paragraph 3.2 below and Minor Unpermitted Exceptions and
Unpermitted Exceptions waived by Purchaser pursuant to Paragraph 3.3 below.
All other exceptions to title shall be referred to as "Unpermitted Exceptions".
3.2. Approval. If the Title Commitment or the Updated Survey discloses
any exceptions to title which are unacceptable to Purchaser (other than those
matters set forth in Paragraph 3.1 (a) through (d) inclusive), Purchaser may
give written notice to Seller (the "Title Notice") of Purchaser's disapproval
of any such exceptions (a "Disapproved Title Exception") on or before 5:00 p.m.
Chicago time on October 21, 1996 (the "Title Approval Period"). Any title
exceptions which are set forth in the Title Commitment or on the Updated Survey
to which Purchaser does not object in accordance with the immediately preceding
sentence shall be deemed additional Permitted Exceptions. With regard to a
Disapproved Title Exception for which Purchaser gives Seller a Title Notice,
Seller may but shall not have the obligation to notify Purchaser within five
(5) Business Days of receipt of the Title Notice whether Seller shall bond
over, cure, or cause the Title Insurer to remove such Disapproved Title
Exception. Any such Disapproved Title Exception which Seller elects to bond
over, cure, or cause the Title Insurer to remove (in each case to the
reasonable satisfaction of Purchaser) shall be so bonded over, cured, or
removed by Seller prior to Closing. If Seller fails to comply with the
preceding sentence with respect to an obligation to pay money, and if such
exception can be cured or removed by the payment of money, then Purchaser shall
have the right to discharge such obligation to pay money and deduct said amount
from the Purchase Price. If Seller does not so notify Purchaser, with respect
to any Disapproved Title Exception from the Title Commitment, Purchaser may
either waive its objection and proceed towards closing or terminate this
Agreement by giving written notice to Purchaser of its election within five (5)
additional Business Days. If Purchaser does not give such written notice
within such five (5) additional Business Days: (i) Purchaser shall have waived
its right to terminate this Agreement pursuant to this Paragraph 3.2; (ii) such
Disapproved Title Exception shall be deemed an additional Permitted Exception;
and (iii) the parties shall proceed to Closing. If Purchaser terminates this
Agreement by written notice to Seller within such five (5) additional Business
Days: (i) Purchaser shall promptly deliver to Seller copies of all third-party
studies, reports, and other investigations obtained by Purchaser in connection
with its due diligence of the Property; (ii) the Xxxxxxx Money deposited by
Purchaser shall be immediately paid to Purchaser, together with any and all
interest earned thereon; and (iii) this Agreement shall be null and void,
leaving neither Purchaser nor Seller any right, obligation, or liability under
this Agreement, except as expressly set forth herein.
3.3. Date-Downs. If, after the expiration of the Title Approval Period
but prior to Closing, a date-down to the Title Commitment discloses any
exception not described in Paragraph 3.1(a) through (e) above, Seller shall
have thirty (30) days from the date of the date-down, at Seller's expense: to
(i) bond over, cure, and/or have any Unpermitted Exceptions which, in the
aggregate, do not exceed $15,000.00 (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 Minor Unpermitted Exceptions (in
each case to the reasonable satisfaction of Purchaser); 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 $15,000.00, 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 each case
to the reasonable satisfaction of Purchaser). In such event, the time of
Closing shall be delayed, if necessary, to give effect to said aforementioned
time periods. 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) Business Days after the expiration of said thirty (30)
day period, in which event the Xxxxxxx Money, together with all interest
thereon, shall be returned to Purchaser and this Agreement shall be null and
void, leaving neither Purchaser nor Seller any right or obligation under this
Agreement, except as expressly set forth herein; 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) or if Seller is able to bond over, cure,
or remove a Minor Unpermitted Exception for a cost not to exceed $15,000.00 the
Title Insurer is willing to insure over a Minor Unpermitted Exception for a
cost not to exceed $15,000.00 in accordance with the terms hereof and Seller
fails to expend said funds in either case, then Purchaser shall be entitled to
exercise any and all rights and remedies contained in Paragraph 11 herein.
Absent notice from Purchaser to Seller in accordance with the preceding
sentence, Purchaser shall be deemed to have waived its objection to said
Unpermitted Exception.
3.4. Title Policy. On the Closing Date, Title Insurer shall deliver to
Purchaser a standard title policy in conformance with the previously delivered
Title Commitment, subject only to Permitted Exceptions (including, without
limitation, Disapproved Title Exceptions and Unpermitted Exceptions waived by
Purchaser) (the "Title Policy"). Purchaser and Seller shall each pay for
one-half of the costs of the Title Commitment and Title Policy, except that
Purchaser shall pay for the cost of any endorsements to, or extended coverage
on, the Title Policy (other than endorsements obtained by Seller in order to
cure or insure over a Disapproved Title Exception or an Unpermitted Exception,
the cost of which shall be paid by Seller).
3.5. Costs. The obligation of Purchaser and Seller to pay various costs
set forth in Paragraphs 3.1 and 3.4 shall survive the Closing or earlier
termination of this Agreement, respectively.
4. PAYMENT OF CLOSING COSTS.
4.1. In addition to the costs set forth in Sections 3.1 and 3.4,
Purchaser and Seller shall each pay for one-half of the costs of the
documentary or transfer stamps to be paid with reference to the "Deed" (as
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.
4.2. Seller and Purchaser shall each pay one-half (1/2) of all closing and
escrow fees of the "Escrow Agent" (as such term is defined in that certain
Escrow Agreement by and between Purchaser and Seller dated as of the date
hereof). The obligation of Purchaser and Seller to pay various costs set forth
in Paragraphs 4.1 and 4.2 shall survive the Closing or earlier termination of
this Agreement, respectively.
5. DEED.
Seller agrees to convey fee simple title to the Real Property to Purchaser
by special warranty deed (the "Deed") in recordable form subject only to the
Permitted Exceptions (including, without limitation, Disapproved Title
Exception and 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 Closing Date. 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, if Purchaser consents, 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, in which case Seller shall pay to Purchaser at the Closing the amount
equal to Seller's insurance deductible. 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 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 and Seller shall pay to Purchaser at the Closing the
amount equal to Seller's insurance deductible.
6.2. If between the date of this Agreement and the Closing Date, any
condemnation or eminent domain proceedings are initiated which result or 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, in each case,
as reasonably determined by Purchaser (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 this Agreement shall become null
and void and neither Purchaser nor Seller shall have any further rights or
obligations under this Agreement, except as expressly set forth herein; 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 five (5) Business Days
after Purchaser's receipt of Seller's notice, whether Purchaser elects to
exercise its rights under Paragraph 6.2.1 or Paragraph 6.2.2. Closing shall be
delayed, if necessary, until Purchaser makes such election. If Purchaser fails
to make an election within such 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. Seller has provided Purchaser and the agents, engineers, employees,
contractors, and surveyors retained by Purchaser with full and free access to
the Property 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 deemed reasonably necessary or appropriate, including, without
limitation, one or more environmental assessments of the Property
(collectively, the "Environmental Assessments"). Seller shall continue to
provide Purchaser free access to the Property until October 28, 1996 (the
"Inspection Period") for the purpose of obtaining a Phase I environmental
report of the Property. The Environmental Assessments may include any
investigations that Purchaser reasonably finds necessary for assessing the
environmental condition of, and any potential environmental liabilities
associated with, the Property. In addition, Purchaser may, at its own expense,
cause a search for filings pursuant to the Uniform Commercial Code with respect
to the Personal Property (the "UCC Search") to be performed.
In connection with Purchaser's review of the Property, Seller has
delivered to Purchaser copies of the most recent available tax bills, rent
rolls, insurance premiums, the "Service Contracts" (as hereinafter defined),
utility account numbers, and the 1993, 1994, and 1995 Annual Reports with
respect to the Property (collectively, the "Property Documents"). Until the
Closing or earlier termination of this Agreement, Seller shall continue to
allow Purchaser and its Representatives the opportunity to review such other
Contracts, books, records, and other documents and data, including tax returns
(but excluding reports to Seller's Portfolio and Asset Review Committee and
appraisals) as Purchaser reasonably requests. Purchaser and its
Representatives have and shall continue to have the opportunity to make copies
of such Contracts, books and records, tax returns, and other documents and data
(other than computer software, reports to Seller's Portfolio and Asset Review
Committee and appraisals) as they deem advisable. Purchaser acknowledges that
other than Purchaser's right to approve the Title Commitment and Updated Survey
pursuant to Section 3.2 of this Agreement, the Environmental Assessment, the
UCC Search, and the "Property Questionnaire" (as hereinafter defined),
Purchaser has completed its due diligence review of the Property.
All of the foregoing tests, investigations, studies, and Environmental
Assessments to be conducted by Purchaser pursuant to this Paragraph 7 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,
investigations, studies and Environmental Assessments. Purchaser agrees to
indemnify, defend, protect, and hold Seller harmless from any and all loss or
costs, including attorneys' fees, liability or damages which Seller may incur
or suffer as a result of Purchaser conducting its inspection and investigation
of the Property (including the entry of Purchaser, its employees, or agents and
its lender onto the Property), including without limitation, liability for
mechanics' lien claims, but excluding losses, costs, liabilities, and damages
arising from pre-existing conditions.
During the Inspection Period, Purchaser shall maintain public liability
insurance insuring the person, firm, or entity performing any tests, studies,
and investigations.
If: (i) the Environmental Assessments show the existence of any Hazardous
Materials at the Property; or (ii) if the UCC Searches disclose any liens on
the Personal Property other than liens in connection with the "First Mortgage
Loan" (as hereinafter defined), 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 such written notice
is not delivered to Seller on or before 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 delivered to Seller on or before the expiration of the
Inspection Period, 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 and all interest earned thereon; and (iii) this Agreement
shall be null and void, and neither Purchaser nor Seller shall have any further
right, obligation, or liability under this Agreement, except as expressly set
forth in this Agreement. Notwithstanding anything contained herein to the
contrary, the terms of this Paragraph 7.1 shall survive the Closing and the
delivery of the Deed or earlier termination of this Agreement.
7.2. To Seller's knowledge, Seller has provided to Purchaser a complete
copy of the Phase I Environmental Site Assessment of Chesapeake Apartments,
dated April 11, 1996 (the "Existing Report"). Seller makes no representation
or warranty concerning the accuracy of the Existing Report. Subject to the
completeness of the Existing Report, Purchaser hereby releases Seller and the
Affiliates of Seller from any liability with respect to the Existing Report,
including, without limitation, the matters set forth in the Existing Report,
and the accuracy 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 7.2 shall survive the Closing and the delivery of
the Deeds and termination of this Agreement.
8. CLOSING; CONDITIONS PRECEDENT
8.1. The closing of this transaction (the "Closing") shall be on the date
(the "Closing Date") ten (10) Business Days following the delivery of the
"Lender Consent" (as hereinafter defined). Unless otherwise mutually agreed to
in writing by the parties, 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 Texas 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.
8.2. The obligation of Purchaser to purchase the Property in accordance
with this Agreement is subject to the following conditions precedent and, with
respect to deliveries to be made at the Closing, conditions concurrent
(collectively, "Purchaser's Closing Conditions"), which conditions may be
waived, or the time for satisfaction thereof extended, by Purchaser only in a
writing executed by Purchaser (provided, however, that any such waiver shall
not affect Purchaser's ability to pursue any remedy it may have with respect to
any breach hereunder by Seller):
(a) all of the representations and warranties of Seller set forth in
this Agreement shall be true, correct and complete in all material respects as
of the Closing Date; and
(b) Seller, on or prior to the Closing Date, shall have complied
and/or performed all of the obligations, covenants and agreements required on
the part of Seller to be complied with or performed pursuant to the terms of
this Agreement (including, without limitation, all of Seller's covenants and
obligations pursuant to Section 9.2 hereof).
8.3. Subject to Purchaser's rights under Section 11 hereof with respect to
any default by Seller, if any of the Purchaser's Closing Conditions have not
been fulfilled within the applicable time periods, Purchaser may:
(a) waive the Purchaser's Closing Condition and close in accordance
with this Agreement, without adjustment or abatement of the Purchase Price; or
(b) terminate this Agreement by written notice to Seller and to
Escrow Agent, in which event Escrow Agent shall return the Xxxxxxx Money,
together with all interest earned thereon, to Purchaser, this Agreement shall
be null and void and neither Purchaser nor Seller shall have any right,
obligation or liability under this Agreement except as expressly set forth
herein.
9. CLOSING DELIVERIES.
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: (i) the balance of the Purchase Price, net of all
prorations and closing costs as provided herein; (ii) an executed counterpart
of the assignment and assumption documents set forth in Paragraph 9.2.3 and
9.2.4; (iii) evidence of the assumption by Purchaser of Seller's obligations
under the Loan Documents and the release of Seller by the "Lender" (as
hereinafter defined) from all liability in connection with the Loan Documents;
and (iv) 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 or before the Closing Date, Seller shall deliver to Purchaser
executed and, if applicable, acknowledged originals of the following:
9.2.1 the Deed (in the form of Exhibit D attached hereto), subject
only to Permitted Exceptions (including, without limitation, those Unpermitted
Exceptions waived by Purchaser);
9.2.2 a special warranty xxxx of sale conveying the Personal
Property (in the form of Exhibit E attached hereto);
9.2.3 a counterpart of an assignment and assumption of intangible
property (in the form attached hereto as Exhibit F), conveying the Intangible
Personal Property and the Service Contracts;
9.2.4 a counterpart of an assignment and assumption of Tenant Leases
and security deposits (in the form attached hereto as Exhibit G);
9.2.5 a counterpart of an assignment and assumption by Purchaser of
Seller's obligations under the Loan Documents;
9.2.6. a non-foreign affidavit (in the form of Exhibit H attached
hereto);
9.2.7 originals (or copies, if originals are not in Seller's
possession) of the Tenant Leases;
9.2.8 all documents and instruments reasonably required by the Title
Insurer to issue the Title Policy including, without limitation, the
Certification and Indemnity Agreement in the form of Exhibit O attached hereto;
9.2.9 possession of the Real Property to Purchaser, subject to the
terms of the Tenant Leases;
9.2.10 evidence of the termination of the current management
agreement; and
9.2.11 notice to the tenants of the Property of the transfer of title
and assumption by Purchaser of the landlord's obligation under the Tenant
Leases and the obligation to refund the security deposits (in the form of
Exhibit I).
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 THAT THIS SALE IS NOT COMPLETED BECAUSE 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 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 ACTUAL DAMAGES NOT TO EXCEED, IN THE
AGGREGATE, $200,000.00, PLUS 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 AS EXPRESSLY SET FORTH HEREIN. NOTWITHSTANDING
ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF SELLER'S DEFAULT IS THE RESULT
OF: (A) ANY WILLFUL ACTION WHICH WAS TAKEN WITH THE INTENT TO IMPEDE, DELAY, OR
PREVENT THE SALE OF THE PROPERTY; OR (B) SELLER'S WILLFUL REFUSAL TO DELIVER
THE CLOSING DOCUMENTS DESCRIBED IN SECTION 9.2 OF THIS AGREEMENT, THEN
PURCHASER WILL BE ENTITLED TO XXX FOR SPECIFIC PERFORMANCE.
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; fuels; prepaid operating expenses; 1995 (if not paid) and 1996 real
and personal property taxes and assessments; accrued but unpaid interest on the
outstanding indebtedness owed to the Lender and other similar items shall be
adjusted ratably as of 12:01 a.m. on the Closing Date. Assessments payable in
installments which are due subsequent to the Closing Date shall be paid by
Purchaser. In addition, Purchaser shall give Seller a credit at Closing for
all escrows, reserves, and holdbacks held by the Lender under the Loan
Documents, including, without limitation, any real estate tax reserves,
insurance reserves, debt service reserves, and capital replacement reserves,
subject to the provisions of Paragraph 12.2 below. After the Closing, the
Seller shall have no right to proceed in any manner or make any claim against
Tenants occupying the Property from and after Closing for rents that were
delinquent as of the Closing Date. Except as otherwise specified in Paragraph
12.2 below, thirty (30) days after the Closing Date, Seller and Purchaser shall
make a final reconciliation of all Closing prorations.
12.2. All basic rent paid to Purchaser, its Affiliates, or their
Representatives on or after the Closing Date by any Tenant of the Property who
is indebted under a lease for basic rent attributable to any period prior to
the Closing Date shall, after payment therefrom to Purchaser of all current
basic rent from such Tenant, be deemed a "Seller Receipt" until such time as
all such indebtedness is paid in full. Within ten (10) days following each
receipt by Purchaser of a Seller Receipt, Purchaser shall pay such Seller
Receipt to Seller. Purchaser shall use all commercially reasonable efforts to
collect any amounts which, upon collection, would constitute Seller Receipts
hereunder. Within 120 days after the Closing Date, Purchaser shall deliver to
Seller a reconciliation statement of Seller Receipts through the first 90 days
after the Closing Date. Upon the delivery of the Seller Receipts
reconciliation, Purchaser shall deliver to Seller any Seller 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 Seller Receipts reconciliation statement and upon the verification of
additional funds owing to Seller, Purchaser shall pay to Seller said additional
Seller Receipts and the cost of performing Seller's audit. This Paragraph 12.2
shall survive the Closing.
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. 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, or the principals of
Purchaser, provided that Purchaser remains liable for, and the assignee assumes
the obligations of Purchaser hereunder. If any assignee of Purchaser under
this Agreement petitions or applies for relief in bankruptcy or such assignee
is adjudicated as a bankrupt or insolvent, or such assignee files any petition,
application for relief or answer-seeking or acquiescing in any reorganization,
arrangement, composition, readjustment, liquidation, dissolution, or similar
relief for itself under any present or future federal, state, or other statute,
Law, code, or regulation relating to bankruptcy, insolvency, or other relief
for debtors (collectively, a "Bankruptcy Filing") on or before the Closing
Date, said Bankruptcy Filing shall be a default under this Agreement and
Purchaser shall indemnify Seller for all costs, attorney's fees, and expenses
of Seller resulting from Seller's efforts to obtain the Xxxxxxx Money as
liquidated damages and to clear title to the Property from any encumbrance
resulting from the Bankruptcy Filing.
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 Sage Properties (to be paid by Seller). Purchaser and Seller
shall indemnify, defend, and hold the other party hereto harmless from and
against any and all claims (including, without limitation, reasonable
attorney's fees, charges and disbursements, court costs, and costs of appeal)
as a result of anyone claiming by or through the Indemnifying Party any fee,
commission, or compensation on account of this Agreement, its negotiation, or
the sale contemplated hereby other than to Sage Properties. 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 OF SELLER.
16.1. Organization and Qualification. Seller is a limited partnership
duly organized, validly existing and in good standing under the Laws of the
State of Illinois; and has the requisite power and authority and all necessary
governmental approvals to own, lease and operate its properties and to carry on
its business as it is now being conducted; and is duly qualified or licensed as
a foreign limited partnership in each jurisdiction where the character of the
properties owned, leased, or operated or the nature of the business conducted
by it makes such qualification or licensing necessary.
16.2. Authority Relative to this Agreement. Subject to the
satisfaction of the conditions set forth in Paragraph 20, Seller has all
necessary power and authority to execute and deliver this Agreement, to perform
its obligations hereunder, and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by Seller and the
consummation by Seller of the transactions contemplated hereby have been duly
and validly authorized by all necessary action and no other proceedings are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Seller and, assuming the due authorization, execution, and
delivery thereof by the other parties hereto, constitutes the legal, valid, and
binding obligation of Seller, enforceable against Seller in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium, or other similar Laws relating to creditors' rights generally and
by equitable principles to which the remedies of specific performance and
injunctive and similar forms of relief are subject.
16.3. Consents and Approvals; No Violation. The execution and
delivery by Seller of this Agreement, the consummation by Seller of the
transactions contemplated hereby and compliance by Seller with the provisions
hereof will not: (a) subject to the satisfaction of the conditions set forth
in Paragraph 20, conflict with, result in a breach of, cause a dissolution or
require the consent or approval of any Person under any provision of the
Organizational Documents of Seller; (b) to Seller's knowledge, require any
consent, approval, authorization or permit of, or filing with or notification
to, any Governmental Authority; (c) subject to the satisfaction of the
conditions set forth in Paragraph 20, and to Seller's knowledge, conflict with,
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any Contract, or give to any third party any right
of termination, cancellation, amendment or acceleration under any Contract or
result in the creation of a Lien on any assets or properties of Seller; or (d)
subject to the satisfaction of the conditions set forth in Paragraph 20, to
Seller's knowledge, violate or conflict with any judgment, order, writ,
injunction or Law applicable to Seller.
16.4. Financial Statements. Seller has previously delivered to
Purchaser, to Seller's knowledge, true, accurate, and complete copies of the
annual report for Seller for each of the years ended December 31, 1993, 1994,
and 1995 (the "Annual Reports"). Seller makes no representation or warranty
that Purchaser will achieve similar financial results with respect to the
operations of the Property, it being acknowledged by Purchaser that Seller's
operation of the Property and allocations of revenue or expenses may be vastly
different than Purchaser may be able to attain. Purchaser hereby releases
Seller, the Affiliates of Seller, and their respective Representatives from any
liability with respect to such historical information, except with respect to a
breach of a representation or warranty of Seller contained herein. Each of the
financial statements included in the Annual Reports has been prepared in
accordance with accounting principles consistently applied during the periods
involved, except as otherwise noted therein, and each presents fairly the
financial position of Seller as of its date and the results of its operations
and changes in financial position for the period presented therein, as the case
may be.
16.5. Litigation. To Seller's knowledge after consultation with
Seller's legal counsel, except as set forth on Exhibit N: (a) Seller has
received no notice of any action, suit, or proceeding before any judicial or
quasi-judicial body, by any Governmental Authority or other third party,
pending, or overtly threatened against or affecting Seller or all or any
portion of the Property; (b) there are no actions, suits, or proceedings
pending or overtly threatened in connection with Seller or all or any portion
of the Property; and (c) Seller has not received notice of any attachments,
execution proceedings, assignments for the benefit of creditors, insolvency,
bankruptcy, reorganization, or other proceedings pending against the Seller.
To Seller's knowledge, except as set forth on Exhibit N: (a) there is no Order
to which Seller or the Property is subject; and (b) Seller has not received any
written notice from any Governmental Authority regarding any violation of, or
failure to comply with, any term or requirement of any Order to which the
Seller or the Property is subject.
16.6. Employee Matters. Seller does not have and has never had any
employees. Seller: (i) does not have any liability under any past or present
employee benefit plan that has not been paid or assumed by Seller or an ERISA
Affiliate of Seller; (ii) does not have any liability to any employees of
Seller or any employees of any Affiliate of Seller; and (iii) is not a party to
or bound by any collective bargaining or similar labor Contract.
16.7. The Property. The Property constitutes all of the real,
personal, and intangible property currently used in the conduct of the business
of Seller. Seller has not granted any options or rights of first refusal or
rights of first offer to third parties to purchase or otherwise acquire an
interest in the Property. To Seller's knowledge, the Seller owns the Property
free and clear of all Liens, encumbrances, claims, rights, demands, easements,
leases, agreements, covenants, conditions, and restrictions of any kind, except
for: (i) those shown on the Title Commitment; (ii) the Tenant Leases; (iii) the
Contracts; (iv) the Licenses and Permits; and (v) the Loan Documents. To
Seller's knowledge, there are not presently pending: (i) any special
assessments; or (ii) condemnation actions against the Property or any part
thereof, other than those set forth on the Title Commitment, and Seller has not
received written notice of any contemplated special assessments or eminent
domain proceedings that would affect the Property. To Seller's knowledge,
Seller has provided Purchaser with a copy of all certificates of occupancy for
the Property in Seller's possession. Seller has no knowledge of a violation of
any Law applicable to the Property. Except as expressly set forth herein,
Seller does not make any representations or warranties relating to the
condition of the Property. Purchaser acknowledges and agrees that it will be
purchasing the Property based upon its inspections and investigations of the
Property, and that Purchaser is purchasing the Property "AS IS" and "WITH ALL
FAULTS", based upon the condition of the Property as of the date of this
Agreement. Without limiting the foregoing, Purchaser acknowledges that, except
as may otherwise be specifically set forth in this Agreement, neither Seller
nor any of 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 defined hereinafter); 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; or rules or
regulations or Environmental Laws 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 its Affiliates from any and all liability in
connection with any claims which Purchaser may have against Seller or the
Affiliates of Seller with respect to the condition of the Property, 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, except for: (i) such matters as
to which Seller has knowledge and which are not disclosed in the Existing
Report; and (ii) third party claims brought against Purchaser and with respect
to which Purchaser names Seller as a third party defendant.
16.8. Tenant Leases. To Seller's knowledge, Exhibit J is a true,
correct, and complete statement of all: (i) apartment leases, tenancies, and
occupancies now in effect in connection with the Property (the "Tenant
Leases"); (ii) the tenants at the Property; (iii) the dates of the expiration
of Tenant Leases; (iv) the base rents payable under the Tenant Leases; and (v)
all security deposits under the Tenant Leases. To Seller's knowledge, no rent
has been prepaid under any Tenant Lease, except as set forth on Exhibit J. To
Seller's knowledge, as of the Closing Date, there will be: (a) no brokerage or
other leasing commissions payable in connection with any of the tenants or the
Tenant Leases or any new leases or amendments of existing Tenant Leases; and
(b) no work specifically required to be performed under the Tenant Leases
(other than work to be performed in the ordinary course of business). To
Seller's knowledge, the Tenant Leases are in full force and effect. Seller has
not received notice of any default by the landlord thereunder. No tenant under
any Tenant Lease has any option or right of first refusal to acquire any
ownership interest in the Property or any right to terminate its lease or is
entitled to any rebate or concession. Seller has not applied any security
deposits towards delinquent rent except for: (i) those tenants who have
vacated their apartments; and (ii) those tenants who are in arrears for rent
for more than thirty (30) days and with respect to whom Seller has commenced
the process of eviction.
16.9. Personal Property. To Seller's knowledge, Exhibit K contains a
list of all personal property owned by the Seller used in connection with the
operation of the Property (the "Personal Property"). To Seller's knowledge,
Seller owns good and indefeasible title to, or has a valid leasehold interest
in or has a valid right under contract to use the Personal Property. The
Personal Property is owned by Seller free and clear of all Liens, other than
liens for current Taxes not yet due ("Permitted Liens"), and the loan evidenced
by the Note.
16.10. Business of the Partnership. The only business conducted by
Seller at any time since its formation is the ownership, operation, management,
financing, and development of the Property.
16.11. Contracts. Exhibit L sets forth a true and complete list of all
contracts (the "Contracts"). Seller has made available to Purchaser a true
copy of each Contract, as presently in effect, and Seller has not received any
notice from any party to any such Contract of the termination thereof. Neither
Seller nor, to the knowledge of Seller, any other party to any Contract is
currently in material violation or breach of or default under any such Contract
or, with or without notice or lapse of time or both, would be in material
violation or breach of or default under any such Contract.
16.12. Compliance with Law; Permits and Approvals. The business of
Seller has been and is currently being conducted in compliance in all material
respects with all Laws, excluding applicable building and zoning Laws. To
Seller's knowledge, Seller holds, and is in compliance in all material respects
with, all permits, licenses, variances, exemptions, orders and approvals of all
Governmental Authorities necessary for the lawful conduct of its business
(collectively, the "Licenses and Permits").
16.13. Notice of Environmental Violations. Except as set forth in the
Existing Report, Seller has not received written notice from any Governmental
Authority or other Person alleging that the Property presently contains
Hazardous Materials that Seller is in violation of any Law relating to
Hazardous Materials.
16.14. Loan Documents. Seller has previously delivered to Purchaser
copies of all of the material documents in Seller's possession evidencing or
securing the first mortgage loan (the "First Mortgage Loan Documents")
encumbering the Property. Furthermore, except as disclosed by Seller to
Purchaser, Seller has not received notice from any Lender that the First
Mortgage Loan is in default. Seller has not entered into any written
modifications of the First Mortgage Loan which have not been delivered to
Purchaser.
16.15. Responsibilities of Seller's Personnel. Xxxxx Xxxxxxxxx,
Vice-President of Balcor, is responsible for financing and disposition of the
Property. The asset manager and the resident manager of the Property are
collectively responsible for the management of the Property on behalf of
Seller.
16.16. Additional Review. A copy of Paragraph 16 shall be delivered to
each of the asset manager and the resident manager of the Property within two
(2) days after the execution by Seller of this Agreement, with a request to
advise Xx. Xxxxxxxxx within five (5) business days after receipt by the asset
manager and the resident manager, as the case may be, as to the accuracy and
truthfulness of the representations and warranties. Xx. Xxxxxxxxx shall notify
Purchaser as to the response of each of the asset manager and the resident
manager within seven (7) business days if the asset manager or the resident
manager indicated that any of the representations or warranties were incorrect,
and the provisions of Paragraph 18.3 shall govern. If Xx. Xxxxxxxxx fails to
so notify Purchaser, Purchaser shall be entitled to conclude that the asset
manager and the resident manager reviewed the representations and warranties
and that the representations and warranties are correct as of the date of
execution.
17. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby represents
and warrants to Seller as follows:
17.1.Authority. Purchaser hereby represents and warrants to Seller that
Purchaser has the full right, power, and authority to execute this Agreement
and consummate the transactions contemplated by this Agreement.
17.2.Compliance with Laws. Except as described on Schedule 17.2,
Purchaser has complied with all Laws applicable to it or to the operation of
its business and has not received any notice of any material alleged claim or
threatened claim, violation of, or liability or potential responsibility under,
any such Law which has not heretofore been cured and for which there is no
remaining liability.
18. PRE-CLOSING COVENANTS.
00.0.Xxxxx Releases. Prior to the Closing, no party or Affiliate of a
party will issue or cause publication of any press release or other
announcement or public communication with respect to this Agreement or the
transactions contemplated herein, including without limitation a general
announcement to such party's employees, without the prior consent of the other
party, which consent will not be unreasonably withheld; provided, however, that
nothing herein will prohibit any party (or Affiliate) from issuing or causing
publication of any such press release, announcement or public communication to
the extent that such party (or Affiliate) reasonably determines such action to
be required by Law or the rules of any national stock exchange applicable to
it, in which case the party (or Affiliate) making such determination will use
reasonable efforts to allow the other party reasonable time to comment on such
release or announcement in advance of its issuance or to make any disclosure
necessary to: (i) obtain any consent required under Paragraph 20 below; or
(ii) obtain the Title Commitment, the Updated Survey, or the UCC Search. Upon
the execution of this Agreement and the Closing, Purchaser and Seller shall
agree upon the wording of joint press releases announcing such execution and
Closing, respectively, provided that in no event shall the parties issue any
press release prior to the expiration or waiver of the Inspection Period set
forth in Paragraph 7.
18.2. Conduct Of Business. Except as contemplated herein or otherwise
consented to by Purchaser in writing:
18.2.1. Affirmative Covenants. Seller covenants and agrees that
from the date hereof until the Closing, except for those matters beyond
Seller's Control, Seller will continue to operate the Property in substantially
the same manner as it is presently operated. Seller shall furnish to Purchaser
unaudited operating statements, rent rolls, and a leasing status report on a
monthly basis.
18.2.2. Negative Covenants. Seller will not, and will not agree
to:
(i) apply security deposits towards delinquent rent except for: (a)
those tenants who have vacated their apartments on the Property; or (b) tenants
who are in arrears for rent for more than thirty (30) days and Seller has
commenced the process of evicting the tenant;
(ii) sell, transfer, pledge, mortgage, hypothecate, or assign, or offer
to sell, transfer, pledge, mortgage, hypothecate, or assign all or any portion
of the Property other than in the ordinary course of business; or
(iii) enter into any Contract which is not terminable by the giving of
thirty (30) days' notice (other than Tenant Leases);
(iv) terminate or modify any Contract, except the termination of any
Contract in the ordinary course of business;
(v) default with respect to the performance of any material obligation
relating to the Property, including, without limitation, the payment of all
amounts due and the performance of all obligations arising under the Loan
Documents;
(vi) enter into any new lease or extend any Lease for a term in
excess of one (1) year; or
(vii) authorize any of, or commit or agree to take any of, the
foregoing actions.
18.3.Additional Information. If at any time after the execution of this
Agreement, any party becomes aware of information which makes a representation
or warranty in this Agreement untrue in any material respect, such party shall
promptly disclose said information to the other parties. Provided the
representation or warranty was true when made and further provided that the
party making such representation or warranty did not take any action or omit to
take any action that caused the representation or warranty in question to
become untrue in any material respect, such party shall not be in default under
this Agreement as a result of a breach of such representation or warranty
arising from such disclosed information, and the sole remedy of the other party
shall be to terminate this Agreement in which event the Xxxxxxx Money, together
with interest thereon, shall be returned to Purchaser, this Agreement shall be
null and void, and neither Purchaser nor Seller shall have any further rights,
obligations, or liabilities hereunder, except as expressly set forth herein.
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 on
Exhibit J and the date of the rent roll delivered at Closing, provided the
change in status is not caused by a breach of Seller's covenants contained
herein, then Purchaser shall not have the right to terminate this Agreement or
make any claim for a breach of a representation or warranty hereunder involving
the rent roll or tenancies thereunder. Purchaser and Seller are prohibited
from making any claims against the other party hereto after the Closing with
respect to any breaches of the other party's representations and warranties
contained in this Agreement that the claiming party had actual knowledge of
prior to Closing. For the purposes of this Paragraph 18.3, the "actual
knowledge" of Purchaser shall mean only the actual knowledge of Xxxxx Xxxxxxxxx
and Xxxxx Xxxxxxxxx. Notwithstanding the foregoing, prior to Closing, each of
Xxxxx Xxxxxxxxx and Xxxxx Xxxxxxxxx shall cause the individuals responsible for
the performance of Purchaser's due diligence in connection with the
transactions contemplated herein to advise him of any information discovered in
the performance of such due diligence which makes a representation or warranty
in this Agreement untrue in any material respect.
18.4. No Negotiations. Seller shall use commercially reasonable efforts
to cause its Affiliates and their Representatives or any other Person acting
for or on behalf of any of them to refrain from, soliciting, entertaining
offers from, negotiating with, or in any manner discussing, encouraging,
recommending, agreeing to any proposal, or providing information relating to
the sale of the Property or any interest therein. If Seller, its Affiliates or
any of their Representatives receives from any Person any offer, proposal or
information request that may be subject to this Paragraph, Seller shall
promptly advise such Person, by written notice, of the terms of this Paragraph.
18.5. Property Questionnaire. On or before October 18, 1996, Seller shall
deliver to Purchaser a completed Property Questionnaire, in the form of Exhibit
M attached hereto and made a part hereof (the "Property Questionnaire"). If
Purchaser reasonably determines that the consummation of the transactions
contemplated by the Agreement could jeopardize the status of Apartment
Investment and Management Company, a Maryland corporation, as a real estate
investment trust, as defined in ee 856-860 of the Internal Revenue Code of
1986, as amended, based upon the information contained in the Property
Questionnaire, Purchaser shall have the right, but not the obligation, to
terminate this Agreement by delivery of a written notice of termination to
Seller prior to the expiration of the Inspection Period, in which event the
Xxxxxxx Money, together with any and all interest thereon, shall be returned to
Purchaser, this Agreement shall terminate and be null and void, and neither
Seller nor Purchaser shall have any further rights, obligations, or liabilities
hereunder, except as expressly set forth herein.
19. SURVIVAL; LIMITATIONS.
19.1. Survival Of Representations And Warranties. Following Closing,
each of the representations and warranties contained herein will survive and
remain in full force and effect for one hundred eighty (180) days after the
Closing (i.e., the claiming party shall not have the right to make any claims
against the other party for a breach of a representation or warranty after the
expiration of such 180-day period immediately following the Closing).
19.2. Limitation Of Seller's Liability. Neither Seller nor any Affiliate
of Seller nor any of their respective beneficiaries, shareholders, partners,
officers, agents, employees, heirs, successors or assigns shall have any
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 liability,
except for an amount not to exceed $200,000.00, in the aggregate, for a claim
based upon a breach of a representation or warranty of Seller following the
Closing.
19.3. Distributions. Seller shall not distribute $200,000.00 from the
proceeds of the net cash received from the Purchaser at the Closing prior to
180 days after the Closing. If Purchaser alleges a claim for damages against
Seller after the Closing Date, but prior to 180 days after the Closing (a
"Claim"), then the Seller shall continue to withhold distribution of the funds
in an amount equal to the lesser of: (i) the amount of the Claim; or (ii)
$200,000.00, until the Claim is resolved. The Claim shall specify the exact
representation or warranty which was breached and the amount of damages the
Purchaser alleges it has sustained. Upon written notice from Seller that it
contests the Claim, Seller shall have the right to distribute the $200,000.00
unless Purchaser files a complaint alleging the Claim in a court of competent
jurisdiction with thirty (30) days of Seller's written notice.
20. ASSUMPTION OF LOAN.
20.1 The Property is currently encumbered by that certain First Mortgage
Loan by Seller to USGI, Inc. (the "Lender"), dated June 23, 1993, which secures
that certain Promissory Note (the "Note") made by Seller in favor of Lender in
the original principal amount of $5,185,000.00 (the First Mortgage Loan and the
Note, together with all other documents or instruments entered into by Seller
in connection with the First Mortgage Loan and the Note are hereinafter
referred to as the "Loan Documents" and the loan described in and evidenced by
the Loan Documents is hereinafter referred to as the "First Mortgage Loan").
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 (the "Condition Precedent") on or before the date sixty (60)
days after the date hereof (the "Consent Date"): Lender consenting, in writing,
to: (i) the assumption by Purchaser of Seller's obligations under the Loan
Documents; and (ii) a release by Lender of Seller from any liability under the
Loan Documents (together, the "Lender Consent"). Purchaser will use its
reasonable efforts (without being obligated to pay any amounts to Lender in
excess of the fees or other charges set forth in the Loan Documents in
connection with the assumption of the Loan Documents, but in no event shall
Purchaser be obligated to pay to Lender an amount in excess of one percent (1%)
of the outstanding principal amount of the Note plus an application fee not to
exceed $2,000.00) to obtain the Lender Consent. In connection with Purchaser's
efforts to obtain the Lender Consent: (i) Purchaser agrees to take all actions
and deliver such documents as may be reasonably required by Lender; and (ii)
Purchaser shall pay all fees imposed by Lender as a result of the assumption of
the Loan Documents, but in no event shall Purchaser be obligated to pay to
Lender an amount in excess of one percent (1%) of the outstanding principal
amount of the Note plus an application fee not to exceed $2,000.00.
20.2 If Purchaser is unable to obtain the Lender Consent on or before the
Consent Date, then subject to the provisions of Paragraph 20.3, this Agreement
shall automatically terminate. If this Agreement is terminated in accordance
with the immediately preceding sentence, then the Xxxxxxx Money deposited by
Purchaser, together with any interest earned thereon, shall be paid to
Purchaser promptly, this Agreement shall be null and void, and neither
Purchaser nor Seller shall have any right, obligation or liability under this
Agreement, except as expressly set forth herein. Notwithstanding anything
contained herein to the contrary, Purchaser shall have the one-time right upon
written notice to Seller no later than seven (7) days prior to the Consent Date
to extend the Consent Date for up to thirty (30) days upon which the Closing
Date shall correspondingly be extended.
20.3 Provided the Lender Consent is obtained, then at the Closing: (i)
Purchaser shall assume all of Seller's obligations under the Loan Documents;
and (ii) Seller shall be released from any liability under the Loan Documents
(or Purchaser shall provide to Seller the indemnification identified above).
In connection therewith, Purchaser and Seller agree to execute customary and
necessary documents (the "Assumption Documents") reflecting such assumption and
such release reasonably required by the Lender and reasonably acceptable to
Purchaser and Seller. Notwithstanding the foregoing to the contrary, Purchaser
may elect, in its sole discretion, to cause Seller to use the Purchase Price to
prepay the First Mortgage Loan at Closing, provided that Purchaser shall give
adequate advance notice to Lender of the prepayment in accordance with the Loan
Documents and Purchaser pay all fees and other costs charged by the Lender in
connection with the prepayment of the First Mortgage Loan, including without
limitation all prepayment fees. In the event that Purchaser so elects to
prepay the First Mortgage Loan, Purchaser shall not be obligated to use
reasonable efforts to obtain the Lender Consent and the payment of the Purchase
Price shall be made without a reduction for the assumption of the Loan
Documents as set forth in Paragraph 2.2 herein.
21. TIME OF ESSENCE. Time is of the essence of this Agreement.
22. 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: AIMCO
0000 Xxxxx Xxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxx
Xxxxx Xxxxxxxxx
(000) 000-0000 (FAX)
with copies to: Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Rand S. April
(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 fourth (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.
23. 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.
24. GOVERNING LAW. The provisions of this Agreement shall be governed by the
Laws of the State of Texas, except that with respect to the retainage of the
Xxxxxxx Money as liquidated damages the Laws of the State of Illinois shall
govern.
25. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties and supersedes all prior or contemporaneous negotiations,
understandings and representations made by and between the parties and their
respective Representatives.
26. 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.
27. 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.
28. DEFINITIONS. 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.
"Business Day" shall mean a day other than Saturday, Sunday, or any
day on which the principal commercial banks located in Illinois are authorized
or obligated to close under the Laws of Illinois.
"Control" (and its derivative terms "Controlled," "Controls," etc.)
shall mean the power and right to direct the management and policies of another
Person, whether by ownership of voting securities, the ability to elect a
majority of the board of directors or other managing board or committee,
management Contract, or otherwise.
"Environmental Laws" shall mean 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 workers 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.
"Governmental Authority" shall mean any government or any agency,
bureau, board, commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government, whether Federal, state,
local, domestic or foreign.
"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 are imposed under any Environmental
Laws.
"Improvements" shall mean, with respect to the Land, all buildings,
improvements, structures and fixtures located on or in the Land.
"Intangible Property" shall mean, with respect to any Real Property,
all intangible property owned by the Seller and used by the Seller in
connection with the Real Property and/or the Personal Property relating
thereto, including, without limitation, all of the Seller's right, title and
interest in, to and under: (i) the Leases, all Contract rights, books, reports,
test results, environmental assessments, as-built plans, specifications and
other similar documents and materials relating to the use, operation,
maintenance, repair, construction or fabrication of the Real Property or the
Personal Property; (ii) all trademarks and trade names, (iii) all transferable
business licenses, architectural, site, landscaping or other permits,
applications, approvals, authorizations and other entitlements affecting the
Real Property; and (iv) all transferable guarantees, warranties and utility
Contracts relating to the Real Property. Notwithstanding the foregoing to the
contrary, computer software shall not be included within the definition of
Intangible Property.
"Law" shall mean all laws, rules, regulations, ordinances, decrees,
and orders of all applicable Federal, state, city, and other Governmental
Authorities.
"Lien" shall mean any mortgage, pledge, assessment, security
interest, lease, sublease, lien, adverse claim, levy, charge, option or other
encumbrance of any kind, whether imposed by agreement, understanding, law or
equity, or any conditional sale contract, title retention contract, or other
contract to give or to refrain from giving any of the foregoing, provided,
however, that "Lien" shall not include Tenant Leases.
"Order" shall mean any order, decree, injunction, judgment, edict,
ruling, assessment, pronouncement, determination, decision, opinion, sentence,
subpoena, writ or award issued, made, entered or rendered by any court,
administrative agency or other Governmental Authority or by any arbitrator.
"Organizational Documents" shall mean (i) with respect to a
corporation, its certificate or articles of incorporation and bylaws, (ii) with
respect to any limited liability company, its certificate of formation,
articles of organization, regulations, operating agreement and limited
liability company agreement, as applicable, (iii) with respect to any limited
partnership, its certificate of limited partnership and limited partnership
agreement, (iv) with respect to any general partnership, its partnership
agreement, and (v) all other similar organizational documents.
"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.
"Real Property" shall mean (i) the Land, (ii) the Improvements
thereon, (iii) all apparatus, equipment and appliances affixed to and used in
connection with the operation or occupancy of the Land and the Improvements
(such as heating, air conditioning or mechanical systems and facilities used to
provide any utility services, refrigeration, ventilation, waste disposal or
other services) and now or hereafter located on or in the Land or the
Improvements, and (ii) all of the Seller's right, title, and interest in and to
all of the rights, privileges and easements appurtenant to or used in
connection with the Land and the Improvements, including, without limitation,
all minerals, oil, gas and other hydrocarbon substances, all development
rights, air rights, water, water rights and water stock relating to the Land,
all strips and gores, any streets, alleys, easements, rights-of-way, public
ways, or other rights appurtenant, adjacent or connected to the Land.
"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.
"Seller's Knowledge" shall mean, and any reference in this Agreement
to "Seller's knowledge" or to "knowledge of Seller" or notice of any matter or
thing, shall only mean the knowledge of, or notice that has actually been
received by, Xxxxx Xxxxxxxxx. Except as set forth in the preceding sentence,
any knowledge or notice given, had or received by any of Seller's agents,
servants or employees shall not be imputed to Seller or the individual
shareholders or officers of Seller.
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date first set forth above.
SELLER:
CHESAPEAKE ASSOCIATES, an Illinois limited partnership
By: Chesapeake Investors, an Illinois limited
partnership, its general partner
By: Balcor Partners-XV, an Illinois general
partnership, its general partner
By: RGF-Balcor Associates-II, an Illinois
general partnership, a general partner
By: The Balcor Company, a Delaware
corporation, a general partner
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxxxx
-----------------------------
Title: Authorized Rep
-----------------------------
PURCHASER:
AIMCO PROPERTIES, L.P., a Delaware limited partnership
By: AIMCO-GP, Inc., a Delaware corporation
By: /s/ Xxxxx Xxxxxx
-------------------------------
Name: Xxxxx Xxxxxx
-------------------------------
Title: Vice President
-------------------------------
[Chesapeake Apartments]
_________________ of Sage Properties ("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.
SAGE PROPERTIES
By:
-------------------------------
Its:
-------------------------------
Exhibits
A - Legal Description
B - Escrow Agreement
C - Title Commitment
D - Special Warranty Deed
E - Special Warranty Xxxx of Sale
F - Assignment and Assumption of Intangible Property
G - Assignment and Assumption of Leases and Security Deposits
H - FIRPTA Statement
I - Notice to Tenants
J - Rent Roll
K - Personal Property
L - Contracts
M - Property Questionnaire
N - Litigation
O - Certification and Indemnity Agreement
