EXHIBIT 10.11
AGREEMENT OF SALE AND PURCHASE
COTTONWOOD CROSSING APARTMENTS
ARLINGTON, TEXAS
THIS AGREEMENT OF SALE AND PURCHASE (this "Agreement") is entered into by
and between COTTONWOOD REALTY ASSOCIATES, a New York general partnership
("Seller") and CORNERSTONE REALTY INCOME TRUST, INC., a Virginia corporation
("Purchase") to be effective as of July __, 1998.
RECITALS
WHEREAS, Seller is the owner of (i) that certain parcel of real property
located in Arlington, Tarrant County, Texas, as more particularly described in
Exhibit A (collectively, the "Land"), (ii) the approximately 200-unit apartment
complex located on the Land and commonly known as "Cottonwood Crossing
Apartments" and (iii) certain furnishings, fixtures, equipment, tangible
personal property and intangible property contained therein and used in
connection therewith; and
WHEREAS, Purchaser desires to purchase such real and personal property on
the terms and conditions hereinafter set forth, and Seller is agreeable to the
sale and to such terms and conditions.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the respective
undertakings of the parties hereinafter set forth, as well as other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
I.
SALE OF PROPERTY
1.1 In consideration of the Purchase Price (as hereinafter defined) and
upon the terms and conditions hereinafter set forth, Seller shall sell to
Purchaser and Purchaser shall purchase from Seller:
1.1.1 The Land, together with all rights and appurtenances pertaining
to such real estate, including, without limitation, any and all rights of
Seller in and to all roads, alleys, easements, streets and ways adjacent to
the Land, strips and gores and rights of ingress and egress thereto;
1.1.2 All improvements, structures and fixtures placed, constructed or
installed on the Land (the "Improvements");
1.1.3 All equipment, furnishings, materials, inventory, supplies and
other tangible personal property, to the extent transferable (the "Personal
Property") owned by Seller and placed or installed on the Land or
Improvements and used as part thereof and appearing on the inventory
attached hereto as Exhibit 1 (the "Personal Property
Inventory"), expressly excluding, however, all computers, monitors,
software and printers, which shall remain the property of Seller; and
1.1.4 All rights, title and interest of Seller in and to all
intangible property (the "Intangible Property") now or hereafter owned or
held by Seller in connection with the Land, Improvements or Personal
Property, or the apartment rental business now conducted thereon,
including, without limitation, all right, title and interest of Seller, if
any, in and to the name "Cottonwood Crossing Apartments."
1.2 The Land, the Improvements, the Personal Property and the Intangible
Property are collectively referred to herein as the "Property" or the "Project."
II.
PURCHASE PRICE AND XXXXXXX MONEY
2.1 The purchase price (the "Purchase Price") for the Property shall be
Five Million Seven Hundred Thousand Dollars ($5,700,000.00) and shall be payable
in the manner set forth in Article III below, and shall be adjusted to reflect
the appropriate prorations and adjustments set forth in Article IX of this
Agreement.
2.2 Within three (3) business days after the date of this Agreement,
Purchaser shall deposit xxxxxxx money in the amount of One Hundred Thousand
Dollars ($100,000,00) (the "Xxxxxxx Money") in escrow with Chicago Title
Insurance Company, 000 Xxxxx Xx. Xxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000 (Attn:
Xxxxxx Xxxx) (the "Title Company"). The Xxxxxxx Money shall be deposited in
cash. Should Purchaser fail to terminate this Agreement on or prior to the
expiration of the Review Period (hereinafter defined) in accordance with the
provisions of Section 5.4 hereof, the Xxxxxxx Money shall automatically become
nonrefundable to Purchaser for any reason except in the event Seller defaults in
the performance of its covenants, duties and obligations under the terms of this
Agreement. The Xxxxxxx Money deposited pursuant hereto shall be placed in an
interest-bearing account pursuant to the instructions of Purchaser, with all
interest accruing thereon becoming a part of said Xxxxxxx Money. Any interest
which accrues on the Xxxxxxx Money shall be deemed to have been deposited in
escrow with the Title Company by Purchaser under the terms of this Agreement.
The Xxxxxxx Money shall be held and disbursed by the Title Company in accordance
with the terms of this Agreement. In the event the closing of the transaction
contemplated herein shall not occur on or prior to the Closing Date (hereinafter
defined) for any reason except Seller's default hereunder or because Purchaser
has timely exercised its right to terminate this Agreement in accordance with
the terms and conditions hereof, the Xxxxxxx Money shall be immediately funded
by the Title Company to Seller.
2.3 In addition to the Xxxxxxx Money, Purchaser shall deliver to Seller,
prior to the expiration of three (3) business days from the date hereof, a check
in the amount of One Hundred Dollars ($100.00) (the "Independent Contract
Consideration"), which amount the parties bargained for and agreed to as
consideration for Seller's execution and delivery of this Agreement. This
Independent Contract Consideration is in addition to and independent of any
other consideration or payment provided in this Agreement, is non-refundable
under any circumstances and shall be retained by Seller notwithstanding any
other provision of this Agreement.
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III.
PAYMENT OF PURCHASE PRICE
3.1 The entire Purchase Price shall be paid by Purchaser's delivering cash,
a cashier's check or another form of current, collected federal funds in that
amount to the Title Company for disbursement by it to Seller or for Seller's
account at the Closing (hereinafter defined).
3.2 At Purchaser's option, the Xxxxxxx Money shall either be applied at
Closing to the Purchase Price due on such date in accordance with Section 3.1
above or returned to Purchaser at Closing.
IV.
CLOSING
4.1 The closing of the transaction contemplated herein shall be held on or
before the date which is five (5) days after the expiration of the Review Period
(as hereinafter defined) (or if such date falls on a Saturday, Sunday or
holiday, then on the first business day thereafter) (the "Closing Date" or the
"Closing"), and the exact date of Closing shall be designated by Purchaser in a
written notice to Seller and the Title Company; provided, however, that if
Seller fails to deliver both the Commitment and the Survey (as each is
hereinafter defined) within ten (10) days after the execution of this Agreement,
then the Closing shall be extended one (1) day for each day after the expiration
of such ten-day period until both the Commitment and the Survey have been
delivered to Purchaser. The Closing shall be held at the offices of the Title
Company or at another location acceptable to both parties. The procedure to be
followed by the parties in connection with the Closing shall be as follows:
4.1.1 At the Closing the Seller shall cause to be delivered to the
Title Company (sometimes herein referred to as the "Escrow Agent") or to
Purchaser, as applicable, the following documents and instruments, duly
executed and acknowledged (where appropriate):
4.1.1.1 A special warranty deed (the "Deed") dated as of the
Closing Date, in the form of Exhibit B attached hereto and made a part
hereof by reference for all purposes, in favor of Purchaser or its
Permitted Assignee (hereinafter defined);
4.1.1.2 An assignment and assumption of leases (the "Assignment
of Leases") dated as of the Closing Date, in the form of Exhibit C
attached hereto and made a part hereof by reference for all purposes,
in favor of Purchaser or its Permitted Assignee assigning all tenant,
commercial and other leases (the "Leases"), security deposits and
prepaid rents, covering all or any part of the Land, Improvements or
Personal Property;
4.1.1.3 A blanket conveyance, xxxx of sale, assignment and
assumption (the "Xxxx of Sale"), conveying and assigning to Purchaser
or its Permitted Assignee all Personal Property and all Intangible
Property, and assigning to Purchaser or its Permitted Assignee such
service contracts and maintenance agreements as may be designated by
Purchaser, which may be in
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force with regard to the Property, such instrument to be in the form
of Exhibit D attached hereto and made a part hereof by reference for
all purposes;
4.1.1.4 A certificate (the "Bills Paid Certificate") executed by
or on behalf of Seller and dated as of the Closing Date, in the form
of Exhibit E attached hereto and made a part hereof by reference for
all purposes or in such other form as may be acceptable to the Title
Company, Seller and Purchaser;
4.1.1.5 A certified rent roll (the "Rent Roll Certificate") for
the Project, certified by Seller to be true and correct as of the
Closing Date, with such certificate to be in the form of Exhibit F
attached hereto and made a part hereof by reference for all purposes;
4.1.1.6 Evidence reasonably acceptable to Purchaser and the Title
Company, authorizing the consummation by Seller of the purchase and
sale transaction contemplated hereby and the execution and delivery of
the closing documents on behalf of Seller;
4.1.1.7 All keys to all locks on the Property and all documents
in the possession of the Seller pertaining to tenants of the Property,
including, but not limited to all original leases, applications,
correspondence and credit reports relating to each such tenant (which
items referred to in this Section 4.1.1.7 may be delivered at the
Project rather than at the Closing);
4.1.1.8 To the extent not previously delivered to Purchaser, and
in Seller's possession and control, all necessary permits issued by
appropriate governmental authorities and utility companies when the
Improvements were completed;
4.1.1.9 To the extent not previously delivered to Purchaser, and
in Seller's possession and control, one copy of each of the plans,
specifications, mechanical, electrical and plumbing layouts, operating
manuals, leasing information and the like in the possession of Seller
and utilized in connection with the operation of the Property;
4.1.1.10 To the extent not previously delivered to Purchaser, and
to the extent in Seller's possession and control, current tax
statements, if available, and tax certificates for the preceding two
(2) years;
4.1.1.11 The Notice to Tenants (herein so called) addressed to
each tenant of the Project and in the form of Exhibit G attached
hereto and incorporated herein by reference for all purposes; and
4.1.1.12 An audit letter (the "Audit Letter") substantially in
the form of Exhibit K attached hereto and made a part hereof by
reference for all purposes.
4.1.2 At the Closing, the Purchaser, or its assignee, shall cause to
be delivered to the Title Company the following documents and instruments,
duly executed and acknowledged (where appropriate);
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4.1.2.1 Funds payable to the Title Company representing the
Purchase Price due in accordance with Article III hereof, less, if
applicable, the Xxxxxxx Money already deposited which is to be applied
to the Purchase Price, as adjusted to reflect the appropriate
prorations and adjustments set forth in Article IX of this Agreement;
4.1.2.2 Evidence reasonably acceptable to Seller and the Title
Company, authorizing the consummation by Purchaser of the purchase and
sale transaction contemplated hereby and the execution and delivery of
the closing documents on behalf of Purchaser;
4.1.2.3 The Assignment of Leases wherein Purchaser assumes the
lessor's obligations under the Leases;
4.1.2.4 The Xxxx of Sale wherein Purchaser assumes the Approved
Service Contracts (as defined in Section 5.4 hereof); and
4.1.2.5 The Notice to Tenants.
4.1.3 At the Closing, Seller and Purchaser shall cause to be delivered
to the Title Company such other instruments and documents as may be
necessary and appropriate and required hereunder in order to complete the
Closing of the transaction contemplated hereunder.
4.1.4 At the Closing, Seller shall deliver to Purchaser and the Title
Company a certificate in such form as may be required by the Internal
Revenue Service pursuant to Section 1445 of the Internal Revenue Code of
1986, as amended, or the regulations issued pursuant thereto, certifying as
to the non-foreign status of a transferor, with such certificate to be
substantially in the form of Exhibit H attached hereto and made a part
hereof for all purposes, or such variation thereof as may be required by
the Internal Revenue Service.
4.2 Upon the completion of the deliveries specified in Section 4.1 above,
the Escrow Agent shall be authorized to cause the appropriate closing documents
to be immediately recorded in the appropriate records of Tarrant County, Texas,
and shall deliver the proceeds from the sale to Seller.
4.3 As a condition precedent to Closing, Seller shall furnish Purchaser
with an Owner's Policy of Title Insurance (the "Owners Title Policy") at
Closing, in the full amount of the Purchase Price, wherein the Title Company
shall insure that fee simple title to the Project is vested in Purchaser,
containing no exception to such title other than the Permitted Exceptions
(hereinafter defined) and the standard printed exceptions (provided that the
area and boundaries exceptions shall not be amended to except only to "Shortages
in Area" unless the additional premium therefore is paid by Purchaser, the
exception for restrictive covenants shall be endorsed "Deleted in its Entirety"
or shall list only those restrictive covenants as may be Permitted Exceptions,
and the exception for standby fees, taxes and assessments shall be limited to
standby fees, taxes and assessments for the year in which Closing occurs and
subsequent years (and subsequent assessments for prior years due to change in
land usage or ownership)), any exception for parties in possession of the
Property shall be limited to rights of tenants in possession, as
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tenants only, pursuant to unrecorded written leases, and there shall be no
exception for visible and apparent easements, roads and highways or any other
matters which would be disclosed by a current survey of the Property.
4.4 Seller shall pay the cost of the Owner's Title Policy provided for
above excluding any premium for amendment of the survey exception. Any escrow
fee charged by the Title Company shall be paid one-half (1/2) by Seller and
one-half (1/2) by Purchaser. Purchaser shall pay the fee for the recording of
the Deed(s) and other instruments delivered by Seller to Purchaser hereunder.
All other closing costs shall be allocated to and paid by Seller and Purchaser
in accordance with the manner in which such costs are customarily borne by such
parties in sales of similar property in Tarrant County, Taxes, on the date of
Closing; provided, however, Purchaser shall pay all costs, including without
limitation, all third-party costs and inspection fees incurred by Purchaser in
connection with its feasibility studies on the Project. Each party shall pay its
own attorneys' fees.
V.
REQUIREMENTS AND CONDITIONS
5.1 Upon execution of this Agreement, Purchaser and/or Seller, as the cash
may be, shall perform the following within the time stated, each of which shall
be a condition precedent to Closing:
5.1.1 Seller shall, within five (5) days after the execution of this
Agreement, deliver to Purchaser a Commitment for Title Insurance (the
"Commitment") issued by the Title Company, showing Seller's title to the
Property to be good and indefeasible, together with true, correct and
legible copies of all items and documents referred to therein. In the event
that Purchaser disapproves of any or all items referred to in the
Commitment, Purchaser shall deliver written notice of same to Seller
("Purchaser's Title Objection Letter") within five (5) business days after
Purchaser's receipt of the Commitment. Those items listed in the Commitment
and not timely disapproved of by Purchaser shall be referred to as the
"Permitted Exceptions." Seller shall have a period of ten (10) days after
receipt of Purchaser's Title Objection Letter within which it may, but
without obligation to spend any sum of money or to pursue any litigation,
cure or remove such exceptions to Purchaser's reasonable satisfaction. In
the event Seller is unable or unwilling to cure all such items to
Purchaser's reasonable satisfaction within the ten (10) day cure period,
Purchaser shall have the right, exercisable within two (2) days after the
expiration of said ten (10) days cure period, (i) to waive its objections
to the uncured items and close the transactions contemplated herein (in
which case, any such items shall become Permitted Exceptions), or (ii) to
terminate this Agreement by written notice to Seller, whereupon the Title
Company is hereby authorized to, and shall, upon written request of
Purchaser, return to Purchaser all Xxxxxxx Money that has been paid or
deposited by Purchaser to it under or in connection with this Agreement,
and the parties hereto shall be released from all obligations hereunder,
except the obligation of Purchaser to indemnify Seller as set forth in
Section 5.4. If Purchaser does not timely terminate this Agreement in the
manner set forth above, Seller shall deliver the title in its existing
condition, and Purchaser shall, by acceptance of such title, waive any
objections to such title which have not been cured prior to the Closing
Date, except as to any warranties contained in the documents of conveyance.
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5.1.2 Within ten (10) days after the date of this Agreement, Seller,
at Seller's sole cost and expense, shall cause to be prepared and furnished
to Purchaser and the Title Company a survey of the Property (the "Survey"),
prepared by a duly licensed land surveyor reasonably acceptable to the
Title Company. The Survey shall be dated not earlier than the date of this
Agreement, shall show the location on the Property of all improvements,
recorded building and set-back lines, fences, evidence of abandoned fences,
ponds, creeks, streams, rivers, the approximate location of officially
designated flood hazard zones, canals, watercourses, easements, roads,
rights-of-way, encroachments and such other exceptions located on the
Property as may be described in the Commitment; and shall contain a legal
description of the boundaries of the Property by metes and bounds which
shall also include a reference to the recorded plat, if any. The surveyor
shall certify to Purchaser, Purchaser's lender and to the Title Company
that the Survey is correct and was made on the ground; and that there are
no visible discrepancies, conflicts, encroachments, overlapping of
improvements, violations of recorded set-back lines, fences, evidence of
abandoned fences, ponds, creeks, streams, rivers, officially designated
100-years flood plains or flood prone areas, canals, watercourses,
easements, roads or rights-of-way except as are shown on the Survey. All
recorded easements, licenses or similar exceptions referenced in the
Commitment shall be shown on said Survey and shall be legibly identified by
appropriate volume and page recording references. If Purchaser timely
disapproves of the Survey, Purchaser shall have the right, within the time
periods provided for in Section 5.1.1, as Purchaser's sole and exclusive
remedy, to terminate this Agreement by written notice to Seller and, upon
such termination, all Xxxxxxx Money previously deposited shall be
immediately refunded to Purchaser, and the parties hereto shall have no
further liability or obligations hereunder, except the obligation of
Purchaser to indemnify Seller as set forth in Section 5.4.
5.1.3 As soon as possible, but not later than three (3) days after the
execution of this Agreement, Seller shall provide Purchaser with the
following items, to the extent in Seller's possession or under Seller's
control (to the extent the same have not previously been delivered to
Purchaser):
5.1.3.1 A true, correct and complete copy of any and all service
contracts, construction contracts under which work is still being
performed or under which warranties are still in effect, and, if in
Seller's possession or under Seller's control, any bonds, warranties
and guarantees and copies of all building permits and certificates of
occupancy relating to or affecting the Property. Copies of all leases
shall be made available at the Project for Purchaser's inspection but
need not be delivered to Purchaser.
5.1.3.2 A rent roll for the Project certified by Seller as of the
date hereof and showing for each unit the tenant name, unit number,
monthly rental, security deposit held, any defaults in any lease, the
expiration date of each lease, any rental concessions granted and
designating any rights to renew or extend a lease.
5.1.3.3 Insurance information for the Property, including the
type and limits of coverage currently in place, the premiums paid by
Seller therefor and
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a list of all claims, if any, made during the immediately preceding
2-year period, including the amount of any such claims.
5.1.3.4 To the extent within Seller's control and possession, a
copy of tax receipts for the preceding two (2) years. Copies of the
utility receipts will be made available at the Project or at Seller's
office.
5.1.3.5 Financial and operating statements for the Project for
fiscal years 1996 and 1997, and operating statements for calendar year
1998 to the date of this Agreement.
5.1.3.6 To the extent within Seller' control and possession, a
list of all utility deposits pertaining to the Project.
5.1.3.7 To the extent within Seller's control and possession,
real estate tax statements for calendar year and 1997, together with
the current assessed valuation of the Project to calendar year 1998.
5.2 If Seller shall have failed to deliver any item required pursuant to
Section 5.1 and the subsections thereof set out above, Purchaser shall, within
five (5) days after the date hereof, provide Seller notice of any item which it
has not previously received, and Seller shall promptly forward such item to
Purchaser.
5.3 During the Review Period (defined in Section 5.4), Purchaser may
inspect the Property to determine that the entire Property is free and clear of
all termites, fungus, dry rot, beetles and other wood-destroying insects and
pests.
5.4 For a period (the "Review Period") expiring at 5:00 p.m. (Dallas, Texas
time) on July 7, 1998, Purchaser shall have the right to have performed any and
all inspections or studies of the Property which Purchaser may desire, including
but not limited to a physical and mechanical inspection of the Property, an
environmental inspection of the Property, an economic feasibility study of the
Property, an inspection of all books and records and financial information
pertaining thereto and an inspection of all items delivered pursuant to Section
5.1.3 above. Purchaser shall have the right to make and retain copies of any
document or item reviewed by Purchaser during its inspection. If either party
terminates this Agreement for any reason, Purchaser shall not disclose any such
item to any third party and Purchaser shall promptly deliver to Seller (i) all
documents and items and copies thereof from Seller or obtained at the Project
and (ii) shall transfer and convey to Seller the proprietary rights of Purchaser
in and to any and all environmental reports, physical and mechanical reports,
financial due diligence materials and all other reports, studies, audits and
information pertaining to the Property which were obtained by Purchaser from
third party consultants during its due diligence review of the Property. On or
before the expiration of the Review Period, Purchaser shall send to Seller a
written notice setting forth the service contracts (the "Approved Service
Contracts") which Purchaser desires to assume. If Purchaser shall not so notify
Seller of any Approved Service Contracts, then it shall be assumed Purchaser doe
not desire to assume any service contracts. Seller shall, to the extent
reasonably possible, on or before Closing, terminate all service contracts which
are not Approved Service Contracts. If, however, Seller is unable to terminate
some or all service contracts (the "Non-Cancelable Service Contracts"), and
Purchaser does not timely exercise its right to terminate this Agreement in
accordance with the terms and conditions
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hereof, then Purchaser must assume all such Non-Cancelable Service Contracts
together with the Approved Service Contracts at Closing. The Non-Cancelable
Service Contracts are listed on Exhibit J attached hereto and made a part hereof
by reference for all purposes. If Purchaser shall find such inspections or
studies to be unsatisfactory, for any reason, or if Purchaser otherwise
determines that the Property is not suitable for its intended use thereof, for
any reason whatsoever, in Purchaser's sole discretion Purchaser shall have the
right, at its option and as its sole and exclusive remedy, to terminate this
Agreement prior to the expiration of the Review Period by written notice to
Seller and, upon such termination, all Xxxxxxx Money previously deposited shall
be immediately refunded to Purchaser, and the parties hereto shall have no
further liabilities hereunder. Purchaser may thus terminate this Agreement by
delivering a written statement to Seller and to the Title Company stating "the
Agreement is terminated pursuant to Section 5.4 thereof" on or before the
expiration of the Review Period. Prior to such time as Purchaser or Purchaser's
authorized representative enters the Property, Purchaser shall obtain policies
of general liability insurance which shall name Seller as an additional named
insured and which are with such insurance companies, provide such coverage and
carry such limits as Seller shall reasonably require. Purchaser shall indemnify
and hold Seller harmless from any and all liability or damage sustained by
Seller as a result of or arising out of any injuries, accidents or damage to or
on the Property caused by Purchaser or Purchaser's inspecting agents during
Purchaser's inspections. With respect to inspecting individual apartment units,
Purchaser shall give Seller written notice of Purchaser's desire to inspect such
units at least three (3) days in advance of the inspection. Further, if any
inspections may reasonably be expected to materially damage or alter the
Property, Purchaser shall not conduct same except upon Seller's prior written
approval. If Purchaser shall not have terminated this Agreement on or before the
expiration of the Review Period (which termination shall be at Purchaser's sole
discretion), then Purchaser shall be deemed to have waived its rights to
terminate pursuant to this Section 5.4.
VI.
REPRESENTATIONS, WARRANTIES AND COVENANTS
6.1 Seller makes the following representations, warranties and covenants,
to Seller's current, actual (but not constructive, implied or imputed) knowledge
without inquiry or investigation, each of which shall be true and correct in all
material respects as of the Closing Date, and the truth of which (in all
material respects) shall be a condition precedent to Purchaser's obligations to
close the transaction contemplated herein:
6.1.1 Seller has received no written notice of any pending or proposed
changes or modifications to the current zoning of the Property.
6.1.2 Seller has good and indefeasible title to the Property, and the
Property is free and clear from any liens or encumbrances except those
described herein, shown on the Survey or set forth in the Commitment.
6.1.3 The executed copies of the leases to be delivered to Purchaser
(and to be assigned at Closing) shall be true and correct, and Seller is
not in default thereunder. No such tenants are entitled to any rebates,
rent concessions or free rent except as shown on the rent roll referred to
in Section 5.1.3.2. If any current tenants are owed any such rebates, rent
concessions or free rent, then Purchaser shall be credited for same on a
dollar-for-dollar basis at Closing.
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6.1.4 There are no attachments, executions, assignments for the
benefit of creditors or voluntary or involuntary proceedings in bankruptcy
pending against or contemplated by Seller, and no such actions have been
threatened against it.
6.1.5 Neither the execution and delivery of this Agreement by Seller
nor Seller's performance of its obligations hereunder will result in a
violation or breach of any term or provision or constitute a default or
accelerate the performance required under any other agreement or document
to which Seller is a party or is otherwise bound or to which the Property,
or any part thereof, is subject, and will not constitute a violation of any
law, ruling, regulation or order to which Seller is subject.
6.1.6 Except as set forth in Section 6.4 below, Seller has received no
written notice that the maintenance, operation, use and occupancy of the
buildings and other improvements presently constituting part of the
Property violate any zoning, building, health, fire, safety or similar law
or ordinance, order or regulation, or the certificate or certificates of
occupancy issued or to be issued for the Property. Seller shall provide to
Purchaser copies of any notices of such violations it may receive following
the date hereof.
6.1.7 As of the Closing Date, Seller shall have obtained all necessary
consents and permissions related to the transactions herein contemplated
and required under any covenant, agreement, encumbrance, law or regulation.
6.1.8 No portion of the Property is subject to a special ad valorem
tax valuation, such that a change of ownership or use will cause additional
ad valorem taxes to be imposed upon the Property or any part thereof.
6.1.9 Except as set forth in Section 6.4 below, Seller has received no
written notices that the Property is in violation in any material respect
of any existing, applicable Environmental Law, or that the Property is
subject to any existing, pending or threatened investigation or inquiry by
any governmental authority or that the Property is subject to any remedial
action or obligations under any Environmental Law. To Seller's actual
knowledge and belief, no underground storage tanks have been or are now
located on the Property, and no hazardous substances or toxic wastes have
been disposed of on the Property during the period of xxxx Xxxxxx has owned
the Property. As used herein, the term "Environmental Law" shall mean any
law, statute, ordinance, rule, regulation, order or determination of any
governmental authority or agency affecting the Property and pertaining to
health or the environment including, but not limited to, the Comprehensive
Environmental Response, Compensation and Liability Act of 1982 and the
Resource Conservation and Recovery Act of 1986. Seller agrees to promptly
notify Purchaser of any fact of which Seller becomes aware which would
cause this representation to become false or of any notice that Seller
receives regarding the matters set forth in this Section 6.1.9.
6.1.10 Seller has received no written notice of any pending
improvements, liens or special assessments to be made against the Property
by any governmental authority.
6.1.11 No person, firm or corporation or other entity has any right or
option to acquire the Property, or any part thereof, from Seller.
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6.1.12 Seller is neither a "foreign person" nor a "foreign
corporation" as those terms are defined in Section 7701 of the Internal
Revenue Code of 1986, as amended.
6.1.13 From and after the date hereof, and until the Closing or
earlier termination of this Agreement, Seller shall not sell, assign or
create any right, title or interest whatsoever in or to the Property or
create any lien, encumbrance or charge thereon, other than liens or
encumbrances either noted in the Commitment or those which shall be
released at Closing.
6.1.14 From and after the date hereof, and until the Closing or
earlier termination of this Agreement, Seller shall not intentionally take
any action, or intentionally omit to take any action, which action or
omission would have the effect of violating any of the representations,
warranties or covenants of Seller contained in this Agreement.
6.1.15 Seller shall satisfy any and all claims for mechanics' or
materialmen's liens against the Property or any part thereof on or prior to
Closing; provided, however, Seller shall have the right to contest any such
claims so long as a bond is posted by Seller and/or other procedures
reasonably acceptable to Purchaser are followed in order to protect the
Property, so long as no exception therefor appears in the Owner's Title
Policy described in Section 4.3 hereof.
6.1.16 Seller shall neither transfer nor remove any Personal Property
or fixtures from the Property subsequent to the date hereof without the
prior written consent of Purchaser, except as provided for in this
Agreement or for purposes of replacement thereof, in which case such
replacements shall be promptly installed prior to Closing and shall be
comparable in quantity to the item(s) being replaced.
6.1.17 From and after the date hereof, and until the Closing or
earlier termination of this Agreement, Seller will not execute any new
employment, maintenance, management or service contracts pertaining to the
Property which cannot be canceled or terminated without any liability upon
written notice of thirty (30) days or less.
6.1.18 Seller shall operate and maintain the Property through Closing
in accordance with its current management practices.
6.1.19 From the date hereof, and until the Closing or earlier
termination of this Agreement, Seller shall conduct its leasing activities
in the normal course of business and shall execute no new tenant leases
other than on the form of lease currently used by Seller or such other form
as may be reasonably approved by Purchaser, with such new tenant leases
being for a term (including renewals) no longer than one (1) year past the
Closing Date without Purchaser's prior written approval, which approval
shall not be unreasonably withheld, conditioned or delayed. A copy of any
new tenant lease so executed by Seller shall be transmitted to Purchaser
immediately upon the execution thereof.
6.2 Seller shall have no liability with respect to any of the foregoing
representations and warranties if, prior to the Closing, Buyer discovers or
learns of information, from whatever source, including without limitation, as a
result of Buyer's due diligence tests, investigations and inspections of the
Property or disclosure by Seller or Seller's agents and employees, that
11
contradicts any of the foregoing representations and warranties, or renders any
of the foregoing representations and warranties untrue or incorrect, and Buyer
nevertheless consummates the transaction contemplated by this Agreement.
6.3 NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT OR
IN ANY EXHIBIT ATTACHED HERETO, IT IS UNDERSTOOD AND AGREED THAT THE PROPERTY IS
BEING SOLD AND CONVEYED HEREUNDER "AS IS" WITH ANY AND ALL FAULTS AND LATENT AND
PATENT DEFECTS WITHOUT ANY EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY BY
SELLER OR ANY REPRESENTATIVE OF SELLER OR ANY OTHER PERSON ACTING OR PURPORTING
TO ACT FOR OR ON BEHALF OF SELLER, EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN
ANY EXHIBIT ATTACHED HERETO. SELLER HAS NOT MADE, DOES NOT HEREBY MAKE AND
HEREBY SPECIFICALLY DISCLAIMS (EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN ANY
EXHIBIT ATTACHED HERETO) ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR
CHARACTER WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY (OTHER
THAN SELLER'S SPECIAL WARRANTY OF TITLE CONTAINED IN THE SPECIAL WARRANTY DEED
TO BE DELIVERED AT CLOSING), ITS CONDITION (INCLUDING WITHOUT LIMITATION ANY
REPRESENTATION OR WARRANTY REGARDING QUALITY OF CONSTRUCTION, STATE OF REPAIR,
WORKMANSHIP, MERCHANTABILITY, SUITABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE), ITS COMPLIANCE WITH ENVIRONMENTAL LAWS OR OTHER LAWS, AVAILABILITY OF
ACCESS, INGRESS OR EGRESS, INCOME TO BE DERIVED THEREFROM OR EXPENSES TO BE
INCURRED WITH RESPECT THERETO, THE OBLIGATIONS, RESPONSIBILITIES OR LIABILITIES
OF THE OWNER THEREOF, OR ANY OTHER MATTER OR THING RELATING TO OR AFFECTING THE
PROPERTY, AND SELLER HEREBY DISCLAIMS AND RENOUNCES ANY OTHER REPRESENTATION OR
WARRANTY TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW. PURCHASER
ACKNOWLEDGES AND AGREES THAT PURCHASER IS ENTERING INTO THIS AGREEMENT WITHOUT
RELYING (EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN ANY EXHIBIT ATTACHED HERETO)
UPON ANY REPRESENTATION, WARRANTY, STATEMENT OR OTHER ASSERTION, ORAL OR
WRITTEN, MADE BY SELLER OR ANY REPRESENTATIVE OF SELLER OR ANY OTHER PERSON
ACTING OR PURPORTING TO ACT FOR OR ON BEHALF OF SELLER WITH RESPECT TO THE
PROPERTY BUT RATHER IS RELYING UPON ITS OWN EXAMINATION AND INSPECTION OF THE
PROPERTY. PURCHASER REPRESENTS THAT IT IS A KNOWLEDGEABLE AND EXPERIENCED
PURCHASER OF REAL ESTATE, THAT IT HAS CONDUCTED WHATEVER STUDIES, TESTS,
EXAMINATIONS AND ANALYSES THAT IT DETERMINES TO BE NECESSARY OR DESIRABLE AND
THAT IT IS RELYING SOLELY ON ITS OWN EXPERTISE AND THAT OF ITS CONSULTANTS IN
ALL MATTERS RELATING TO PURCHASER'S DECISION TO PURCHASE THE PROPERTY. THE TERMS
AND CONDITIONS OF THIS PARAGRAPH SHALL EXPRESSLY SURVIVE THE CLOSING, SHALL NOT
MERGE WITH THE PROVISIONS OF ANY CLOSING DOCUMENT AND SHALL BE INCORPORATED INTO
THE SPECIAL WARRANTY DEED TO BE DELIVERED BY SELLER AT CLOSING. PURCHASER
FURTHER ACKNOWLEDGES AND AGREES
12
THAT THE PROVISIONS OF THIS PARAGRAPH WERE A MATERIAL FACTOR IN THE
DETERMINATION OF THE PURCHASE PRICE FOR THE PROPERTY.
6.4 Purchaser acknowledges that Seller has advised Purchaser that the
improvements comprising a part of the Property may contain lead-based paint and
may contain asbestos containing material (as defined in 29 CFR Section
1926.1101(b) and/or other applicable laws, regulations or governmental
requirements, "ACM") and presumed asbestos containing material (as defined in 29
CFR Section 1926.1101(b) and/or other applicable laws, regulations or
governmental requirements, "PACM"). As used herein: "ACM" includes any material
containing more than one percent (1%) asbestos; and "PACM" includes, in
buildings constructed no later than 1980, thermal system insulation (such as
insulation applied to pipes, fittings, boilers, breeching, tanks, ducts or other
structural components) and sprayed or troweled on, or otherwise applied,
surfacing material (such as asphalt and vinyl flooring material, acoustical
plaster on ceilings and fireproofing materials on structural members).
NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT, ANY EXHIBIT HERETO OR ANY
CLOSING DOCUMENT(S) TO BE DELIVERED IN CONNECTION HEREWITH TO THE CONTRARY,
SELLER MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO
THE PRESENCE, ABSENCE OR EFFECT OF LEAD-BASED PAINT, ACM AND/OR PACM IN OR ON
THE PROPERTY, INCLUDING BUT NOT LIMITED TO VIOLATION OR COMPLIANCE OR
NONCOMPLIANCE WITH ENVIRONMENTAL, HEALTH, SAFETY OR OTHER LAWS, RULES,
REGULATIONS, ORDINANCES OR ORDERS OF THE UNITED STATES OR ANY AGENCY OR
DEPARTMENT THEREOF OR OF ANY STATE, LOCAL OR OTHER POLITICAL SUBDIVISION THEREOF
OR ANY AGENCY OR DEPARTMENT OR OTHER BODY ORGANIZED UNDER ANY OF THE FOREGOING.
Purchaser agrees that Seller shall have no liability or responsibility to take
or for failure to take any action to comply with such laws, rules, regulations,
ordinances or orders and shall have no liability to Purchaser for claims or
causes of action asserted by third parties against Purchaser in any way arising
out of or relating to the presence of lead based paint or asbestos containing
materials in or on the Property as of the Closing Date. The terms and provisions
of this Section 6.4 shall survive delivery and recordation of the Deed.
6.5 Purchaser makes the following representations and warranties, which
shall be true and correct in all material respects as of the Closing Date and
which shall survive the Closing for a period of six (6) months, the truth of
which (in all material respects) shall be a condition precedent to Seller's
obligations hereunder:
6.5.1 Purchaser is duly organized and legally existing as a Virginia
corporation. The execution and delivery of, and performance under, this
Agreement are within Purchaser's powers and have been duly authorized by
all requisite corporate action. The person executing this Agreement on
behalf of Purchaser has the authority to do so. This Agreement constitutes
the legal, valid and binding obligation of Purchaser enforceable in
accordance with its terms, subject to laws applicable generally to
creditor's rights. Performance of this Agreement will not result in any
breach of, or constitute any default under, any agreement or other
instrument to which Purchaser is a party or by which Purchaser might be
bound.
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VII.
SURVIVAL AND LIMITATIONS
7.1 All warranties and representations contained in this Agreement shall
survive the execution and delivery of the Deed and shall survive the Closing
hereof for a period of six (6) months. Any claim brought by Seller or Purchaser
for a breach of any of the representations and warranties of Seller or Purchaser
set forth in this Agreement must be filed in a court of law having appropriate
jurisdiction within the six (6) month period after the Closing. To the extent
that either Seller or Purchaser fails to bring such a claim against the other
party by appropriate proceedings in a court of law having proper jurisdiction
within such six (6) month period, all of such claims will be forever barred.
Notwithstanding anything in this Agreement to the contrary, Purchaser may not
bring suit against Seller for a breach of any of the representations and
warranties in Section 6 unless Purchaser suffers losses directly resulting from
such breach in an amount not less than $25,000, and in no event shall Seller be
liable to Purchaser for any amount in excess of the Purchase Price.
VIII.
POSSESSION
8.1 Purchaser shall be entitled to full possession of the Property at
Closing, subject only to tenant leases and the Permitted Exceptions and Approved
Service Contracts.
IX.
PRORATIONS AND ADJUSTMENTS
9.1 Collected rents, operating expenses, ad valorem taxes on the Property
for the current year, utility charges and all other items (including prepaid
items) of income and expense shall be prorated at the Closing, effective as of
the Closing Date, utilizing the best available computations of such items. If
current ad valorem tax assessments are unavailable at Closing, said ad valorem
taxes shall be adjusted based on the tax rate for the immediately preceding year
applied to the latest assessed value of the Property; provided, however, all
special tax assessments made by any taxing authority with respect to the Project
prior to Closing shall be the sole responsibility of Seller and shall be paid by
Seller at Closing and those assessed after the Closing Date shall be paid by
Purchaser. If the taxes for the current year are more or less than the taxes for
the preceding year, Seller and Purchaser shall adjust the proration of such
taxes and Seller or Purchaser, as the case may be, shall pay to the other any
amount required as a result of such adjustment, and this covenant shall not
merge with the Deed delivered hereunder but shall survive the Closing. Purchaser
shall receive a credit for tenant security deposits that are not yet forfeited.
With respect to delinquent rents, Seller and Purchaser agree that only amounts
paid in rent to Seller prior to Closing for periods after Closing shall be paid
by Seller to Purchaser and that delinquent rents will not be prorated. In the
event there are rents due but unpaid on the Closing Date which are collected
after Closing by Purchaser, that portion of the rent paid for periods prior to
Closing shall be delivered by Purchaser to Seller. Purchaser shall have the
obligation to take all reasonable efforts to collect delinquent rents owing to
Seller, provided that Purchaser shall not be obligated to file suit or incur any
out-of-pocket expenses to collect delinquent rents. Any funds paid by any tenant
after Closing shall be applied first to the current rents due and owing to
Purchaser and the balance to the oldest outstanding delinquent rents. If Seller
receives any rents after Closing relating to periods of time after Closing,
Seller shall remit such rents to Purchaser.
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X.
COMMISSIONS
10.1 In connection with the transaction describe in this Agreement, Seller
hereby agrees to pay a real estate commission to (a) Xxxxxxx X. Xxxxxx in an
amount equal to one percent (1%) of the Purchase Price and (b) Price Realty
Corporation in an amount equal to one percent (1%) of the Purchase Price, if and
only if the transactions contemplated herein shall close. If such transactions
are not closed for any reason, including without limitation failure of title or
default by Seller or Purchaser or termination of this Agreement pursuant to the
terms hereof, then such commission will not be deemed to have been earned and
shall not be due or payable. Seller does hereby agree to indemnify Purchaser
against and hold Purchaser harmless from any and all real estate commissions,
claims for such commissions or similar fees, including attorneys' fees incurred
in any lawsuit regarding such commissions or fees arising by, through or under
Seller. Purchaser does hereby agree to indemnify Seller against and hold Seller
harmless from any and all real estate commissions, claims for such commissions
or similar fees including, attorneys' fees incurred in any lawsuit regarding
such commissions or fees, arising by, through or under Purchaser. In connection
therewith, Purchaser and Seller hereby represent and warrant to each other that
neither such party, their officers, employees and agents, have contracted for
any such real estate commissions, nor have they, without knowledge of the other,
contacted real estate agents or brokers, other than the parties set forth in
this Section 10.1, nor have they, without the other's knowledge, acted in a
manner so as to give rise to a claim for such real estate commissions or similar
fees. The provisions of this Section 10.1 shall survive the execution and
delivery of the Deed and shall survive the Closing hereof.
10.2 By its execution hereof Purchaser acknowledges that it has been
informed by the parties set forth in Section 10.1 above that the Purchaser
should have an abstract covering the Property examined by an attorney of the
Purchaser's selection or that the Purchaser should be furnished with or obtain
an owner's policy of title insurance covering the Property.
XI.
FURTHER INSTRUMENTS
11.1 Seller will, whenever and as often as it shall be reasonably requested
so to do by Purchaser, and Purchaser will, whenever and as often as it shall be
reasonably requested so to do by Seller, execute, acknowledge and deliver, or
cause to be executed, acknowledged and delivered, any and all conveyances,
assignments and all other instruments and documents as may be reasonably
necessary in order to complete the transaction herein provided and to carry out
the intent and purposes of this Agreement.
XII.
TERMINATION AND REMEDIES
12.1 If Purchaser is not then in default in its obligations or agreements
hereunder, and any of the Seller's representations or warranties contained
herein are untrue or if Seller shall have failed to have performed any of the
covenants and/or agreements contained herein which are to be performed by
Seller, or if any of the conditions precedent to Purchaser's obligation to
consummate the transactions contemplated hereby shall have failed to occur,
Purchaser may, as its sole and exclusive remedy, either (i) terminate this
Agreement by giving written notice of termination to Seller and receive a full
and immediate refund of any and all Xxxxxxx Money
15
previously deposited, or (ii) seek to enforce specific performance of this
Agreement. If Purchaser chooses to seek specific performance of this Agreement,
and is ultimately successful on such claim, then, upon receipt of a written
invoice therefore, Seller shall reimburse Purchaser for the documented,
out-of-pocket, third-party expenses actually incurred by Purchaser in connection
with Purchaser's suit for specific performance of this Agreement.
12.2 If Seller is not then in default in its obligations or agreements
hereunder, and Purchaser has not terminated this Agreement pursuant to any of
the provisions authorizing such termination, and Purchaser fails to close the
transaction contemplated hereby, Seller shall be entitled to receive such
Xxxxxxx Money as may have been previously deposited as liquidated damages, and
as Seller's sole and exclusive remedy for such failure, Seller hereby
specifically waiving any and all rights which it may have to other damages or
specific performance as a result of Purchaser's default under this Agreement.
XIII.
RISK OF LOSS; CONDEMNATION
13.1 Risk of loss until the Closing shall be borne by Seller. In the event
that damage, loss or destruction of the Property, which requires less than
$250,000.00 to be expended to repair or restore the damaged Property, by fire or
other casualty occurs prior to the actual Closing of the transactions
contemplated hereby, Purchaser shall not have the right to terminate this
Agreement but shall be obligated to close the transaction contemplated hereby
and take an assignment of and receive in cash all insurance proceeds payable as
a result of such casualty loss and receive a credit against the Purchase Price
due at Closing in the amount of any deductible applicable to such insurance
coverage, or, if such proceeds are not made available by the holder or holders
of any indebtedness secured by liens against the Property, to receive a credit
against the Purchase Price in the amount of such casualty loss. In the event
that damage, loss or destruction of the Property, which requires $250,000.00 or
more to be expended to repair or restore the damaged Property, by fire or other
casualty occurs prior to the actual closing of the transactions contemplated
hereby, the Purchaser shall, at its option, elect one of the following:
13.1.1 To terminate this Agreement and receive an immediate refund of
all Xxxxxxx Money previously deposited; or
13.1.2 To close the transactions contemplated hereby and take an
assignment of and receive in cash all insurance proceeds (including
proceeds from any "loss of rent" policy, if any, then in force) payable as
a result of such casualty loss and receive a credit against the Purchase
Price due at Closing in the amount of any deductible applicable to such
insurance coverage, or, if such proceeds are not made available by the
holder or holders of any indebtedness secured by liens against the
Property, to receive a credit against the Purchase Price in the amount of
such casualty loss. If the Purchaser elects to proceed under this Section
13.1.2, then Purchaser shall have the right to settle any claim with the
applicable insurance company. Other than receiving a credit against the
Purchase Price due at Closing as provided in this Section 13.1.2, there
shall be no reduction in the Purchase Price by reason of such damage.
13.2 Notwithstanding the foregoing, in the event that damage, loss or
destruction of the Property occurs which requires more than $250,000.00 but less
than $1,000,000.00 to be expended to repair or restore the damaged Property, by
fire or other casualty. Seller shall have the
16
right to elect to repair and restore the Property and extend the Closing Date
for a period of time up to one hundred eight (180) days in order to complete
such repair or restoration. Should Seller make such election to repair and
restore the Property and provide Purchaser with written notice of such election
within ten (10) days of the date of such damage or destruction, Purchaser shall
be obligated to agree to extend the Closing Date for the period of time
necessary to complete such repairs or restoration (but not to exceed 180 days),
and there shall be no reduction in the Purchase Price; provided, however, that
if Seller delivers to Purchaser the notice contemplated in this Section 13.2,
then Purchaser shall have the option, exercisable by written notice to Seller
within five (5) days of Purchaser's receipt of Seller's notice, to close the
transactions contemplated herein and take an assignment of the insurance
proceeds, if any, payable as a result of the casualty, as more fully set forth
in Section 13.1.2 above. If for any reason Seller fails to elect to repair and
restore the Property within such ten (10) day period, Purchaser may terminate
this Agreement and obtain a refund of its Xxxxxxx Money.
13.3 The risk of loss resulting from any pending or threatened condemnation
or eminent domain proceeding which is commenced prior to Closing remains with
Seller until Closing. If, prior to the Closing, all or any material portion of
the Property shall be subjected to a bona fide threat of condemnation, eminent
domain or other proceeding, Seller so notify Purchaser, and Purchaser may elect
to (i) terminate this Agreement, in which event the Xxxxxxx Money shall be
returned to Purchaser by the Title Company, or (ii) Purchaser may declare this
Agreement to remain in full force and effect and at Closing, Seller shall
assign, transfer and set over to Purchaser all of the right, title and interest
of Seller in and to any awards or claims that may thereafter be made for such
taking.
13.4 Seller shall maintain the current insurance coverage for the Property
in full force and effect through the Closing Date.
XIV.
NOTICES
14.1 Any notice, request, demand, instruction or other communication to be
given to either party hereunder, except those required to be delivered at
Closing, shall be in writing, and shall be deemed to be given upon receipt, if
hand delivered, delivered by express delivery service, transmitted by facsimile
with confirming receipt, or as of the date of first attempted delivery at the
address provided herein if sent by registered or certified mail, return receipt
requested, addressed as follows:
IF TO PURCHASER: COPY TO:
---------------- --------
Cornerstone Realty Income Trust, Inc. Xxxxxxxxxx & Xxxxxxxxxx
000 Xxxx Xxxx Xxxxxx 000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000 X.X. Xxx 000
Attn: Xxx X. Remppies Xxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000 Attn: Xxxxx X. Xxxxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
17
AND COPY TO:
------------
Xxxxx XxXxxxxxx & Oaks Xxxxxxxx
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
IF TO SELLER: COPY TO:
------------- --------
First Worthing Company Xxxxxx, Xxxx & Xxxxxxxx LLP
0000 Xxxxxx Xxxx Xxxx 0000 Xxxx Xxxxxx
Xxxxx 000, XX-0 Xxxxx 0000
Xxxxxx, XX 00000 Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx Attn: Xxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000 Facsimile No.: (000) 000-0000
14.2 The addresses and addressees for the purposed of this Section 14 may
be changed by either party by giving notice of such change to the other party in
the manner provided herein for giving notice. For the purpose of changing such
addresses or addressees only, unless and until such written notice is received,
the last address and addressee stated herein shall be deemed to continue in
effect for all purposes.
XV.
MISCELLANEOUS
15.1 Entire Agreement. This Agreement and the exhibits attached hereto
contain the entire agreement between the parties, and no promise,
representation, warranty or covenant not included in this Agreement or any such
referenced agreements has been or is relied upon by either party.
15.2 Reliance. Neither party has made any representations, warranties or
covenants to the other concerning any tax benefits or tax treatment which may
accrue to be given to the other party in connection with the transactions
contemplated hereby. Each party has relied upon its own examination of the full
Agreement and the provisions thereof, and the counsel of its own advisors, and
the warranties, representations and covenant expressly contained in this
Agreement itself.
15.3 No Oral Modification. No modification or amendment of this Agreement
shall be of any force or effect unless made in writing and executed by both
Purchaser and Seller.
15.4 Choice of Law and Venue. In the event that any litigation arises
hereunder, it is specifically stipulated that this Agreement shall be
interpreted and construed according to the laws of the State of Texas.
15.5 Attorneys' Fees. Should either party hereto institute any action or
proceeding in court to enforce any provision hereof or for damages by reason of
any alleged breach of this
18
Agreement or for any other judicial remedy, the prevailing party in any
litigation between the parties arising under this Agreement shall be entitled to
recover reasonable attorneys' fees and all court costs in connection therewith
from the losing party.
15.6 Counterparts: Headings. This Agreement may be executed in any number
of counterparts which together shall constitute the agreement of the parties.
The article headings herein contained are for purposes of identification only
and shall not be considered in construing this Agreement.
15.7 Assignment. This Agreement, and the rights and obligations hereunder,
may not be assigned by Purchaser at any time except to an entity (a "Permitted
Assignee") which is owned by Purchaser, owns or is under common ownership with
Purchaser or is an entity which Purchaser or an affiliate of Purchaser manages
or controls. In the event of any such Permitted Assignment (herein so called),
Purchaser shall notify Seller in writing of such assignment and shall execute
and deliver a written assumption agreement under which all of the obligations of
Purchaser hereunder are expressly assumed by the Permitted Assignee.
15.8 Date of Agreement. All references in this Agreement to "the date
hereof" or similar references shall be deemed to refer to the last date, in
point of time, on which all parties hereto have executed this Agreement.
15.9 Parties Bound. This Agreement and the terms and provisions hereof
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns whenever the context so requires or admits.
15.10 Enforceability. If any provisions of this Agreement are held to be
illegal, invalid or unenforceable under present or future laws, such provisions
shall be fully severable, and this Agreement shall be construed and enforced as
if such illegal, invalid or unenforceable provision had never comprised a part
of this Agreement, and the remaining provisions of this Agreement shall remain
in full force and effect and not be affected by the illegal, invalid or
unenforceable provision or by its severance from this Agreement, provided that
both parties hereto may still effectively realize the complete benefit of the
transaction contemplated hereby.
15.11 Gender; Number. Any references to one gender used herein, whether
masculine, feminine or neuter, shall be deemed to be a reference to any other
gender as may be appropriate under the circumstances; further, the singular
shall include the plural and the plural the singular.
15.12 Term of Offer. This Agreement constitutes an offer by Purchaser to
purchase the Property on the terms and conditions and for the Purchaser Price
specified herein. Unless sooner terminated or withdrawn by notice in writing to
Seller, this offer shall lapse and terminate at 5:00 p.m. (Dallas, Texas time)
on the third business day following execution hereof by Purchaser, unless, prior
to such time, Seller has executed and returned to Purchaser two (2) fully
executed copies of this Agreement.
15.13 Waiver. Purchaser acknowledges that it has been represented by
competent counsel of its choice throughout the negotiation and documentation of
the transaction contemplated by this Agreement, and Purchaser waives its right
to file or pursue any claim or action with respect to the rule that ambiguities
in this Agreement or any other document delivered pursuant to it are to be
resolved against the drafting party.
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XVI.
MISCELLANEOUS
16.1 Confidentiality. All information relating to the Property which is
acquired by either party hereto, or any information regarding the operation of
Seller or Purchaser, shall be confidential and shall not be disseminated without
the prior written approval of the other party, which approval may be withheld in
such party's sole discretion.
[signatures appear on next page]
20
EXECUTED by Purchaser this 2 day of July, 1998.
CORNERSTONE REALTY INCOME TRUST, INC.,
a Virginia corporation
By: /s/ Xxx X. Remppies
-------------------------------
Name: Xxx X. Remppies
-----------------------------
Title: V.P.
----------------------------
EXECUTED by Seller this ___ day of July, 1998.
COTTONWOOD REALTY ASSOCIATES,
a New York general partnership
By: Captiva Developement Corp.,
a New York corporation,
General Partner
By:
---------------------------
Name:
-------------------------
Title:
------------------------
21
