1
SALES CONTRACT
THIS AGREEMENT is made and entered into this 30th day of July,
1997, by and between XXXXXXX PROPERTIES RESIDENTIAL, L.P., a Georgia limited
partnership (hereinafter referred to as the "Seller") and GREAT BEAR INVESTMENT
COMPANY, a Georgia corporation (hereinafter referred to as the "Purchaser").
ARTICLE I - PROPERTY TO BE CONVEYED
A. Seller shall sell to Purchaser, and Purchaser shall
purchase from Seller, upon the terms and conditions hereinafter set forth, that
certain parcel of land (hereinafter referred to as the "Land") described on
Exhibit A attached hereto with the buildings and improvements on the Land
(hereinafter referred to as the "Improvements") and the appliances, furniture,
fixtures, machinery, equipment, supplies and other personal property attached
thereto, located at, or used in connection with the operation, management or
maintenance of the Land or the Improvements, other than personal property owned
by tenants (all of the foregoing real and personal property is hereinafter
collectively referred to as the "Property").
B. The Property shall include all right, title and interest,
if any, of Seller in and to any land lying in the bed of any street, road,
highway or avenue, open or proposed, in front of or adjoining all or any part of
the Land and in all strips, gores or rights-of-way, riparian rights and
easements, and all right, title and interest of Seller, if any, in and to (a)
any award or payment made or to be made (i) for any taking in condemnation or
eminent domain of land lying in the bed of any street, road, highway or avenue,
open or proposed, in front of or adjoining all or any part of the Land, (ii) for
damage to the Property or any part thereof by reason of change of grade or
closing of any such street, road, highway or avenue, (iii) for any taking in
condemnation or eminent domain of any part of the Property, (b) all tenant
leases, rents and profits from and after the Closing Date (as hereinafter
defined), (c) all refundable tenants' security deposits not refunded prior to
the Closing (as hereinafter defined), (d) all intangible assets related to the
Property, including all of Seller's right, title and interest in and to all
warranties and guaranties, and (e) all of Seller's right, title and interest in
and to the name "Windsong Apartments" as used in connection with the Property,
subject to the following sentence. Neither the Property nor the tradename
"Windsong Apartments" and variations thereof includes Seller's trademark
"Creating Communities For Superior Lifestyles", and Purchaser hereby agrees not
to use such trademark at any time. Purchaser's agreement contained in the
preceding sentence shall survive the Closing.
C. The Property is known as The Windsong Apartments and
consists of 232 apartment units and townhouses and related amenities, and is
located on St. Xxxxxx Island, Georgia.
ARTICLE II - PURCHASE PRICE
The purchase price (hereinafter referred to as the "Purchase
Price") for the Property shall be Nine Million Seven Hundred Fifty Thousand and
No/100 Dollars
2
($9,750,000.00), and subject to all prorations and adjustments provided herein,
the Purchase Price shall be paid as follows:
A. Concurrently with the execution of this Agreement,
Purchaser shall pay to Commonwealth Land Title Insurance Company (the
"Escrowee") (Atlanta, Georgia office) $250,000.00 by check subject to collection
or by wire-transfer, such amount to be deposited in an interest-bearing money
market account (which amount, together with all interest earned thereon, is
hereinafter referred to as the "Deposit"). Purchaser hereby certifies that its
federal tax identification number is 00-0000000. The Deposit shall be applied
toward the cash portion of the Purchase Price due at Closing only if the Closing
contemplated hereby is consummated as herein provided, or shall otherwise be
applied as elsewhere provided in this Agreement, including, without limitation,
as specified in Section XII A of this Agreement.
B. The outstanding principal balance on the Closing Date
evidenced by the "Promissory Note" (as hereinafter defined) shall be paid by
Purchaser's assumption of the loan (the "Loan") evidenced by the Promissory Note
and secured by the "Security Deed" (as hereinafter defined), but subject to the
non-recourse provisions contained in the Promissory Note and the Security Deed.
C. An amount equal to the Purchase Price less (i) the
outstanding principal balance on the Closing Date of the Loan, and (ii) the
amount of the Deposit which shall be paid by Escrowee to Seller at Closing,
shall be paid by Purchaser to Seller at Closing by wire-transfer to Seller of
funds immediately available to Seller or to Seller's qualified intermediary, as
directed by Seller.
D. (i) The Escrowee joins in the execution of this Agreement
for the purpose of acknowledging and agreeing to the provisions of this Section
II D. The duties of the Escrowee shall be as follows:
(a) During the term of this Agreement, the Escrowee shall
hold and disburse the Deposit in accordance with the terms and provisions of
this Agreement.
(b) If this Agreement shall be terminated by the mutual
written agreement of Seller and Purchaser, or if the Escrowee shall be unable to
determine at any time to whom the Deposit should be paid, or if a dispute shall
develop between Seller and Purchaser concerning to whom the Deposit should be
paid, then and in any such event, the Escrowee shall pay the Deposit in
accordance with the joint written instructions of the Seller and Purchaser. In
the event that such written instructions shall not be received by the Escrowee
within ten (10) days after the Escrowee has served a written request for
instructions upon Seller and Purchaser, then the Escrowee shall have the right
to pay the Deposit into the Superior Court of Xxxxxx County, Georgia, which
court Seller and Purchaser agree shall have jurisdiction and venue as respects
any dispute in regard to the Deposit, and interplead Seller and Purchaser in
respect thereof, and thereupon the Escrowee shall be discharged of any
obligations in connection with this Agreement.
-2-
3
(c) If costs or expenses are incurred by the Escrowee in its
capacity as Escrowee because of litigation or a dispute between the Seller and
Purchaser arising out of the holding of the Deposit in escrow, Seller and
Purchaser shall each pay the Escrowee one-half of such reasonable costs and
expenses. Except for such costs or expenses, no fee or charge shall be due or
payable to the Escrowee for its services as escrow holder only.
(d) By joining herein, the Escrowee undertakes only to perform
the duties and obligations imposed upon the Escrowee under the terms of this
Agreement and expressly does not undertake to perform any of the other
covenants, terms and provisions incumbent upon the Seller and the Purchaser
hereunder.
(e) Purchaser and Seller hereby agree and acknowledge that the
Escrowee assumes no liability in connection herewith except for breach of trust
or willful misconduct; that the Escrowee shall never be responsible for the
validity, correctness or genuineness of any document or notice referred to under
this Agreement; and that in the event of any dispute under this Agreement, the
Escrowee may seek advice from its own counsel and shall be fully protected in
any action taken by it in good faith in accordance with the opinion of its
counsel. Seller and Purchaser each hereby agrees to indemnify and hold harmless
the Escrowee against any and all losses, liability, claims, demands, damages,
actions, causes of action and suits (other than for willful misconduct or breach
of trust) which may be imposed upon the Escrowee in connection with the
performance of its duties hereunder.
E. Purchaser and Seller hereby expressly acknowledge and agree
that, subject to the truthfulness and accuracy of all representations and
warranties of Seller contained in this Agreement (which are not intended to be
modified or affected by this Section II E) and the performance by Seller of all
its obligations contained in this Agreement, Purchaser is to acquire the
Property (and the Improvements comprising a part thereof) in an "as-is"
condition and that Seller shall have no obligation or liability whatsoever to
Purchaser in respect to the quality, integrity, nature or condition of
construction or merchantability or habitability of the Improvements or any
particular use which may be made thereof. The substance of this Section II E
shall survive the consummation of the transaction contemplated herein and shall
be included in the Special Stipulations to the Closing Statement to be executed
by Purchaser and Seller at Closing.
ARTICLE III - SELLER'S DELIVERY OF DOCUMENTS
Seller has delivered the following to Purchaser concurrently
with the execution of this Agreement:
A. A copy of the latest dated title insurance policy with
respect to the Property in Seller's possession, if any.
B. A complete inventory of all of the personal property,
appliances, furniture, fixtures, equipment, and supplies to be conveyed
hereunder (the "Personal Property").
-3-
4
C. A schedule and copies of all the permits, licenses, service
contracts and other agreements which affect the Property or the operation or
maintenance thereof [other than any property management agreement with respect
to the Property, it being agreed and understood that any such property
management agreement will be terminated at Closing and Purchaser will have no
responsibility under such agreement], which Seller represents to Purchaser are,
to the best of Seller's knowledge, all of such items which Seller has been using
to operate the Property. Seller shall assign and transfer to Purchaser at
Closing all of Seller's interest under all of said contracts and agreements
which Purchaser elects to assume; provided, however, that Purchaser must assume
at Closing all contracts and agreements which cannot be terminated by Seller
upon no more than 30 days notice and at no cost to Seller. Seller shall cancel
all the agreements and contracts not assumed by Purchaser; and Purchaser shall
notify Seller no later than August 15, 1997, as to which of the agreements that
Purchaser has the right not to assume as herein specified Purchaser has elected
not to assume. At Closing, Seller shall deliver to Purchaser the original, if
available to Seller, or otherwise a copy of all agreements assumed by Purchaser.
Seller and Purchaser shall execute at the Closing appropriate documents to
evidence the assignment of all agreements and contracts assumed by Purchaser and
the assumption by Purchaser of the obligations in respect thereto arising from
and after the Closing Date which documents shall also contain a cross-indemnity
between Seller and Purchaser with respect to fees payable and obligations for
performance in connection with such agreements and contracts assumed by
Purchaser.
D. A complete and accurate rent roll (the "Rent Roll") for the
Property as of the date of this Agreement, setting forth in respect of each
apartment: the apartment number; the name of the tenant, if any; the current
monthly rental; and the amount of the security deposit held under the lease, if
any.
E. A complete list of all full-time employees engaged in the
operation or maintenance of the Property, setting forth in respect of each
employee: his or her name; his or her position; his or her current salary or
wages; and his or her apartment number if he or she lives on the Property, and
information as to any rent reduction or free rent for such apartment. All of the
employees shall be paid by Seller for all amounts owing to them for all time
periods prior to the Closing including all accrued vacation pay and fringe
benefits.
F. A copy of the latest ad valorem tax xxxx in respect of the
Property in Seller's possession.
G. A copy of the latest dated survey of the Land and the
Improvements in Seller's possession, if any.
H. True and correct copies of the "Promissory Note" and the
"Security Deed". As used herein, the term "Promissory Note" shall mean that
certain Promissory Note dated March 1, 1988, executed by Xxxxxxx Properties-St.
Xxxxxx, X.X., a Georgia limited partnership formerly named Xxxxxxx
Properties-St. Xxxxxx, Ltd. ("St. Xxxxxx") in favor of Xxxx Xxxxxxx Mutual Life
Insurance Company ("Lender") in the original principal amount of $4,400,000.00,
which was amended by that certain Amendment to Promissory Note dated as of March
1, 1988,
-4-
5
executed by St. Xxxxxx and Lender, as further amended and restated by that
certain Amended and Restated Promissory Note dated January 28, 1993, in the
original principal amount of $4,350,000.00 attached as Exhibit A to that certain
Note Modification Agreement dated January 28, 1993 between Lender and St.
Xxxxxx, which Amended and Restated Promissory Note was amended by that certain
Modification to Promissory Note and Security Instruments dated January 28, 1993
between Lender and St. Xxxxxx, recorded in Deed Book 46-U, page 50, Xxxxx
County, Georgia records (the "Modification"), as assumed by Seller pursuant to
that certain Assumption Agreement (the "Assumption Agreement") dated as of
September 27, 1995, between Seller, successor-by-merger to St. Xxxxxx, and
Lender, recorded in Deed Book 60-A, page 275, aforesaid records. As used herein,
the term "Security Deed" shall mean that certain Deed to Secure Debt and
Security Agreement dated March 1, 1988, executed by St. Xxxxxx in favor of
Lender, recorded in Deed Book 30-J, page 455, aforesaid records, as amended by
that certain Modification to Security Instruments (the "Modification to Security
Instruments") dated January 28, 1993, between Lender and St. Xxxxxx, recorded in
Deed Book 46-C, page 305, aforesaid records, and by the Modification, as assumed
by Seller pursuant to the Assumption Agreement; and (ii) that certain Assignment
of Rents, dated March 1, 1988, executed by St. Xxxxxx in favor of Lender,
recorded in Deed Book 30-J, page 474, aforesaid records, as amended by the
Modification to Security Instruments and as assumed by Seller pursuant to the
Assumption Agreement; and (iii) that certain UCC Financing Statement No.
88-00321, having St. Xxxxxx as Debtor, and Lender as Secured Party, filed in the
aforesaid records on March 3, 1988, as continued by Continuation Statement filed
in the aforesaid records on January 14, 1993, as assumed by Seller pursuant to
the Assumption Agreement; and (iv) UCC Financing Statement No. 692900, having
St. Xxxxxx as Debtor, and Lender as Secured Party, filed in the Xxxxxx County,
Georgia records on March 4, 1988, as continued by Continuation Statement filed
in the Xxxxxx County, Georgia records on January 13, 1993, and as assumed by
Seller pursuant to the Assumption Agreement; and (v) UCC Financing Statement
having Seller as Debtor, and Lender as Secured Party, being File No. 00-00-00000
in the Xxxxx County, Georgia records; and UCC-2 Financing Statement having
Seller as Debtor, and Lender as Secured Party, recorded in Book 60-A, page 280,
in the Xxxxx County, Georgia records.
I. Information from the Xxxxx County Zoning Office in Seller's
possession evidencing the zoning approval to construct a clubhouse at the
Property.
J. A copy of Seller's existing hazard insurance policy as
respects the Property. Seller will deliver to Purchaser Seller's new hazard
insurance policy with respect to the Property as soon as it is obtained by
Seller.
K. Operating statements as respects the Property for 1994,
1995, 1996 and 1997 year-to-date.
ARTICLE IV - ITEMS TO BE DELIVERED BY SELLER AT CLOSING
At Closing Seller agrees to deliver the following items to
Purchaser. Except as elsewhere herein specified, drafts of all documents to be
delivered at Closing as specified in this Agreement (except for those specified
in Section V A) shall be prepared by Purchaser's counsel
-5-
6
and submitted to Seller's counsel for review and approval no later than five (5)
days prior to the Closing Date.
A. Title to the Land shall be conveyed by a limited warranty
deed (herein called the "Deed") which will (i) contain a limited warranty of
title to the effect that Seller will warrant title to the Purchaser as against
any claim by any person owning, holding or claiming by, through or under Seller,
but not otherwise, and (ii) be subject only to those title exceptions contained
on Exhibit B attached hereto and made a part hereof (herein called the
"Permitted Exceptions"). Purchaser agrees to acquire title to the Property
subject to the Permitted Exceptions.
Purchaser shall obtain prior to August 1, 1997 (the "Title Out
Date"), the expense of which shall be paid by Purchaser, an owner's title
insurance binder (the "Binder") issued by Commonwealth Land Title Insurance
Company (the "Title Company") committing to insure Purchaser with respect to the
Property in the amount of the Purchase Price. In the event that Purchaser
notifies the Seller no later than the Title Out Date of Material Title
Objections (as hereinafter defined) or of objections as to matters of survey
(the "Survey Objections") in the event Purchaser elects to obtain, at
Purchaser's sole cost and expense, a survey of the Property, affecting the
marketability of the Land, Seller shall within ten (10) days after receipt of
such notice from Purchaser notify Purchaser as to whether or not Seller will be
able to satisfy all such Material Title Objections and Survey Objections as to
which Purchaser has notified Seller. In the event that (i) Seller fails to
notify Purchaser within such ten (10) days as to whether or not Seller will be
able to satisfy such Material Title Objections and Survey Objections or (ii)
Seller notifies Purchaser within such ten (10) days that Seller will not be able
to satisfy such Material Title Objections and Survey Objections, Purchaser shall
have the right only to either (i) elect to terminate this Agreement and receive
from the Escrowee a return of the Deposit after which return this Agreement
shall be null and void and of no further force or effect and neither Purchaser
nor Seller shall have any further rights, duties, liabilities or obligations to
the other by reason hereof, except for the Inspection Indemnity (as hereinafter
defined); or (ii) elect to waive such Material Title Objections and Survey
Objections, in which event Purchaser shall be obligated to accept title with
such Material Title Objections and Survey Objections and to purchase the
Property without reduction of the Purchase Price.
In the event that within such ten (10) days Seller notifies
Purchaser that Seller will be able to satisfy such Material Title Objections and
Survey Objections, Seller shall have until the Closing Date the right to satisfy
all such Material Title Objections and Survey Objections, and if Seller fails to
satisfy such Material Title Objections and Survey Objections by the Closing,
Purchaser shall have the right only to either (i) elect to terminate this
Agreement and receive from the Escrowee a return of the Deposit after which
return this Agreement, except for the Inspection Indemnity, shall be null and
void and of no further force or effect and neither Purchaser nor Seller shall
have any further rights, duties, liabilities or obligations to the other by
reason hereof; or (ii) elect to waive such Material Title Objections and Survey
Objections, in which event the Purchaser shall be obligated to accept title with
such Material Title Objections and Survey Objections and to purchase the
Property without reduction of the Purchase Price.
-6-
7
Additionally, Purchaser shall have the right to update its
title examination of the Property until the Closing Date. In the event that a
Material Title Objection first arises after the effective date of Purchaser's
original title examination as respects the Property (as to title matters) or in
the event an objection as to matters of survey (a "Survey Objection") first
arises after the date of the survey in the event Purchaser elects to obtain a
survey of the Property (as to survey matters), Purchaser shall have the right to
notify Seller prior to the Closing Date as to such new Material Title Objections
and Survey Objections, and if Seller fails to satisfy such Material Title
Objections and Survey Objections by the Closing, Purchaser shall have the right
only to either (i) elect to terminate this Agreement and receive from the
Escrowee a return of the Deposit after which return this Agreement, except for
the Inspection Indemnity, shall be null and void and of no further force or
effect and neither Purchaser nor Seller shall have any further rights, duties,
liabilities or obligations to the other by reason hereof; or (ii) as to any such
new Material Title Objections and Survey Objections which can be cured by the
payment of a liquidated amount of money (other than the documents evidencing and
securing the Loan) Purchaser shall be entitled to pay at Closing the amount
required to cure and remove such matter from the title to the Property and
deduct the amount thereof from the Purchase Price otherwise payable to Seller at
Closing.
The words Material Title Objections as used herein shall mean
any matter which the Title Company is unwilling to insure against in an owner's
title insurance policy (1986 ALTA Form) other than (i) the Permitted Exceptions,
or (ii) a matter caused by any act or omission of Purchaser. In the event
Purchaser fails to notify Seller no later than the Title Out Date of a Material
Title Objection which was in existence on the effective date of the Binder, such
failure of Purchaser to notify Seller shall mean that Purchaser agrees to accept
title to the Property subject to such matter and that such matter is no longer a
Material Title Objection but is a Permitted Exception.
B. A duly executed Xxxx of Sale, with a list of inventory
attached (which list will be the same as that previously delivered by Seller to
Purchaser pursuant to Section III B hereof subject to additions and deletions
incurred in the normal course of business), conveying to Purchaser that portion
of the Property which is or may be considered to be personal property, with a
warranty of title, except for the Permitted Exceptions, but with no other
warranty or representation, as such property is being conveyed to Purchaser on
an "as is" basis.
C. A duly executed Assignment assigning to Purchaser the
Seller's interest as lessor in the leases with respect to the Property, with a
warranty only as to free and clear title except for the Permitted Exceptions.
Purchaser shall execute such Assignment to assume Seller's obligations as lessor
in the leases with respect to the Property from and after the Closing. This
Assignment shall contain a cross-indemnity pursuant to which Seller shall
indemnify and hold Purchaser harmless as to tenant claims arising prior to
Closing and Purchaser shall indemnify and hold Seller harmless as to tenant
claims arising after Closing.
D. An Affidavit of Seller's general partner (in a form
customarily utilized in Georgia and which is acceptable to the Title Company and
will enable the Title Company to remove the mechanic's lien exception from the
owner's title insurance policy to be issued to
-7-
8
Purchaser) showing that all debts for labor and materials in respect of the
Property have been paid in full and that there are no outstanding claims, suits,
debts, liens or judgments against the Property, except for the Permitted
Exceptions.
E. Such evidence or documents as reasonably may be required by
the Purchaser or the Title Company evidencing the status and capacity of Seller
and the authority of the person or persons who are executing the various
documents on behalf of Seller in connection with the sale of the Property.
F. A certification from Seller that Seller is not a foreign
partnership (as defined in the Internal Revenue Code and Income Tax
Regulations).
G. A Certificate which will have attached to it a rent roll as
of three days prior to the Closing Date, pursuant to which Certificate Seller
will certify that the rent roll attached thereto is to the best of Seller's
knowledge true, correct and complete in all material respects.
H. An Affidavit of Seller's Residence as respects O.C.G.A. ss.
48-7-128.
I. An IRS Form 1099, and a Designation of Reporting Agent and
Transferor Identification Form.
J. Such documents as may reasonably be required by the Lender
in connection with Purchaser's assumption of the Loan and the release by Lender
of Seller's liability in respect thereto.
K. Appropriate corporate resolutions of Seller's general
partner's directors signed and sealed by such general partner's secretary
certifying that Seller is a corporate validly existing and in good standing
under the laws of the State of Georgia, with full power and authority to carry
on the business in which it is engaged, to enter into this Agreement, to sell
the Property, and to perform Seller's obligations contemplated herein, and
authorizing one or more officers of such general partner to sign this Agreement
and all necessary documentation involved in this transaction, together with a
certificate of incumbency as respects such officers of Seller's general partner.
L. Any other documents referred to or specified in this
Agreement or reasonably requested by Purchaser.
M. With respect to the Breezeway Work specified in Section XI
C of this Agreement, the contracts, invoices and lien waivers unless Seller has
ceased doing the Breezeway Work as instructed by Purchaser as set forth in
Section XI C hereof.
-8-
9
ARTICLE V - ITEMS TO BE DELIVERED BY PURCHASER AT CLOSING
At Closing, Purchaser agrees to deliver the following items to
Seller. Drafts of the documents to be delivered at Closing by Purchaser which
are specified in Section V A are to be prepared by Purchaser's counsel and shall
be submitted to Seller's counsel for review no later than five (5) days prior to
the Closing Date.
A. Appropriate corporate resolutions of Purchaser's directors
signed and sealed by Purchaser's secretary certifying that Purchaser is a
corporation validly existing and in good standing under the laws of the state of
its incorporation, duly qualified to do business in the State of Georgia, with
full power and authority to carry on the business in which it is engaged, to own
the Property which it is purchasing hereunder, to enter into this Agreement, and
to perform Purchaser's obligations contemplated herein, and authorizing the
president or a vice president and the secretary or an assistant secretary of
Purchaser to sign this Agreement and all necessary documentation involved in
this transaction, and if Purchaser's rights hereunder are assigned to anyone
other than an individual, appropriate corporate resolutions of such
corporation's shareholders and directors signed and sealed by such corporation's
secretary certifying that such assignee is a corporation validly existing and in
good standing under the laws of the state of its incorporation, duly qualified
to do business in the State of Georgia, with full power and authority to carry
on the business in which it is engaged, to own the Property which it is
purchasing hereunder, to enter into this Agreement, and to perform such
corporation's obligations contemplated herein, and authorizing an officer of
such corporation to sign this Agreement and all necessary documentation involved
in this transaction. If such assignee is other than a corporation, similar
documents acceptable to Seller's counsel with respect to the authority of those
acting for such assignee, and in particular, if such assignee is a limited
partnership, a true and correct copy of such assignee's partnership agreement
and recorded certificate of limited partnership, and if such assignee is a
limited liability company, a true and correct copy of such assignee's articles
of organization and operating agreement.
B. An Indemnity Agreement in favor of Seller to the effect
that the tenants' refundable security deposits being transferred by Seller to
Purchaser will be safeguarded, held, administered and paid out by Purchaser as
provided by applicable Georgia law and in accordance with the applicable tenant
leases, and that Purchaser agrees to indemnify, defend and hold harmless Seller
from any loss, cost, or expense (including attorney's fees) suffered or incurred
by Seller in respect thereto.
C. The cash portion of the Purchase Price as required by and
in the manner specified in Section II C hereof.
D. An Assumption of the service contracts as specified in
Section III C hereof and an Assumption with respect to the leases specified in
Section IV C hereof.
E. Such documents as may reasonably be required by the Lender
in respect to Purchaser's assumption of the Loan.
-9-
10
F. Any other documents referred to or specified in this
Agreement or reasonably requested by Seller.
ARTICLE VI - TIME AND PLACE OF CLOSING AND CLOSING COSTS
A. The consummation of the transaction contemplated herein
shall take place at the offices of Purchaser's counsel in Atlanta, Georgia
commencing at 10:00 A.M. on November 17, 1997, which date for consummation of
the transaction contemplated herein is subject to being postponed as specified
in Article XVIII hereof. The date such consummation occurs is herein referred to
as the "Closing" or "Closing Date".
B. At Closing, Seller shall be responsible for and shall pay
the Georgia transfer tax incident to the Deed. Seller and Purchaser will each
pay their own attorney's fees, and their own other costs and expenses, including
those costs and expenses specifically elsewhere herein mentioned. Purchaser
shall pay the cost of any survey obtained by Purchaser, all recording fees, the
premium incident to any title insurance policies to be issued to Purchaser, any
incidental escrow fees charged by the Title Company in connection with the
transaction contemplated hereby, and all costs associated with obtaining
approval from the holder of the Loan to the transaction contemplated herein and
the assumption of the Loan by Purchaser. Purchaser shall reimburse to Seller at
Closing up to $90,000 for the Breezeway Work specified in Section XI C hereof
which has been completed as of the Closing Date, upon presentation by Purchaser
to Seller of the contracts and invoices and paid receipts in respect to such
completed Breezeway Work.
C. Possession of the Property, subject to the rights of
tenants in possession, will be delivered by Seller to Purchaser on the Closing
Date.
ARTICLE VII - APPORTIONMENTS, SECURITY DEPOSITS
The following items shall be apportioned at Closing and as of
the Closing Date:
A. Collected rents;
B. Interest accrued on the Promissory Note for the month
during which the Closing Date occurs. Purchaser shall pay to Seller the amount
of any escrows for taxes and insurance held in connection with the Loan and
Seller shall transfer and assign to Purchaser all of Seller's right, title and
interest thereunto;
C. Payments under service contracts assumed by Purchaser;
D. Fees for transferable licenses and permits, if any;
E. All real property taxes, including the current installment
for any assessment (special, bond, or otherwise), and personal property ad
valorem taxes, if any. In the event that the current year's taxes are not
available as of the Closing Date, the current year's taxes
-10-
11
shall be based upon such taxes for 1996, but the tax proration shall be
readjusted between Purchaser and Seller as soon as the current year's taxes are
available and upon demand being made by either party. Seller shall be entitled
to receive a return of all utility deposits placed with any utility company, and
Purchaser shall be responsible to place its own deposits with any such utility
company. Seller shall be entitled to receive all income in respect of the
Property and shall be obligated to pay all expenses, including utility charges,
in respect of the Property for all time periods prior to and including the day
prior to the Closing Date. Purchaser shall be entitled to receive all such
income and shall be obligated to pay all such expenses, including utility
charges, for all time periods commencing with the Closing Date. In the event
that any rent or other income or any expense item relating to the period prior
to the Closing Date is received or appears after the Closing, such item(s) shall
be adjusted between the Seller and the Purchaser immediately after such is
discovered, but in any event within sixty (60) days after the Closing Date after
which sixty (60) days, such prorations shall be final as between Seller and
Purchaser, except that the readjustment of the tax proration shall occur as soon
as practicable after the amount of such taxes has become final at the conclusion
of the currently pending appeal of such taxes. This Section VII E shall survive
the Closing of the transaction contemplated herein.
F. At the Closing, Seller shall pay to Purchaser by means of a
credit against the cash portion of the Purchase Price due at Closing a sum equal
to the aggregate of the as-then unrefunded refundable tenants' security
deposits, and such refundable security deposits shall be safeguarded, held,
administered and paid out by the Purchaser as provided by applicable Georgia law
and in accordance with the applicable leases, and Purchaser shall execute at
Closing in favor of Seller the Indemnity Agreement hereinbefore mentioned.
G. Purchaser shall use its reasonable efforts in collecting
Seller's accounts receivable for rent attributable to the period prior to the
Closing Date which are outstanding on the Closing Date. Rents collected by
either Seller or Purchaser after the Closing Date shall be applied first to
rents due and payable for the month during which the Closing Date occurs; then
to rents then owing for any month subsequent to the month during which the
Closing Date occurs; and then to rents owing to Seller for months prior to the
month during which the Closing Date occurs.
H. If on the Closing Date fewer than 220 of the apartment
units at the Property (including those units, but not to exceed 5, for which
tenants will move in within five (5) days after the Closing Date) are occupied
by bona fide tenants paying full rent in accordance with their respective
leases, including as bona fide tenants paying full rent, no more than three
employees of the Property paying rent in accordance with signed leases and as
reflected on the Rent Roll (collectively, "bona fide tenants"), then, at
Closing, an escrow shall be established with the Escrowee, pursuant to an Escrow
Agreement mutually satisfactory to Seller, Purchaser and the Escrowee, out of
the cash portion of the Purchase Price otherwise payable by Purchaser to Seller
as herein specified, in an amount equal to (i) multiplied by (ii) multiplied by
(iii), where: (i) is the number of apartment units at the Property fewer than
220 occupied by bona fide tenants; and (ii) is $638.00; and (iii) is 2. On the
65th day after the Closing Date (or the next business day thereafter if the 65th
day is not a business day), Seller and Purchaser shall give the Escrowee
instructions as to the disbursement of the money being held in escrow as
follows: (a) in the event
-11-
12
that the number of apartment units at the Property occupied by bona fide tenants
each day during the sixty (60) days after Closing is the same or fewer than the
number of apartment units occupied by bona fide tenants on the Closing Date, all
of the funds being held in escrow shall be disbursed to Purchaser; or (b) in the
event that at any time during the sixty (60) days after the Closing Date the
number of apartment units at the Property occupied by bona fide tenants is more
than the number of apartment units occupied by bona fide tenants on the Closing
Date, a proration of the monies held in escrow shall be effected between Seller
and Purchaser equitably so that Seller receives out of the escrowed funds an
amount thereof equal to the amount of the escrowed funds multiplied by a
fraction, the numerator of which is equal to the aggregate number of days each
apartment unit at the Property is occupied by a bona fide tenant in excess of
the number of apartment units at the Property occupied by bona fide tenants on
the Closing Date, and the denominator of which is equal to sixty (60) multiplied
by the number of apartment units at the Property on the Closing Date fewer than
220 occupied by bona fide tenants; and the balance of the escrow funds shall be
disbursed to Purchaser.
ARTICLE VIII - PURCHASER'S CONDITIONS PRECEDENT
Purchaser shall not be required to purchase the Property
unless the following conditions precedent have been satisfied:
A. The Property shall be maintained in its current condition
by Seller until the Closing Date, normal wear and tear excepted.
B. Purchaser and its agents and representatives shall have
been permitted to make a complete physical inspection of the Property and
investigation of Seller's income and expense records for 1994, 1995, 1996 and
1997 year-to-date pertaining to Seller's ownership and operation of the
Property. Seller shall permit Purchaser to make the foregoing investigations.
Subsequent to such inspection, Purchaser shall determine whether the physical,
financial and general condition of the Property is in Purchaser's estimation,
satisfactory for operation and ownership by Purchaser in the manner and on the
basis contemplated by Purchaser. If Purchaser, in its sole discretion,
determines not to conclude its purchase of the Property, Purchaser shall, on or
before the close of business on July 28, 1997, so notify Seller and Escrowee
that the Property is not satisfactory and this condition precedent shall have
failed and Escrowee shall return the Deposit (less $100.00 which shall be paid
by Escrowee to Seller in consideration of Seller's having held the Property off
the market) to Purchaser and thereafter this Agreement shall terminate and be
null and void and of no further force or effect, and no party shall have any
further liabilities or obligations to the others hereunder, except for the
Inspection Indemnity.
C. Intentionally deleted.
D. All apartment units at the Property which become vacant at
least two (2) days prior to the Closing Date shall be in rent-ready condition on
the Closing Date.
E. All payments due in respect to the Loan shall be current.
-12-
13
ARTICLE IX - DAMAGE, DESTRUCTION OR EMINENT DOMAIN
A. If, prior to the Closing Date, there is $100,000.00 (based
upon estimates to repair by third party contractors) or more of damage to the
Property by fire or other casualty whether or not insured against by Seller
under its property damage insurance policy, Seller shall promptly give Purchaser
notice of such fact, and Purchaser may elect to terminate this Agreement within
ten (10) business days after receiving written notice from Seller of the
occurrence of such casualty. If Purchaser so elects to terminate this Agreement,
it shall give Seller and Escrowee written notice thereof and the Deposit shall
be returned by Escrowee to Purchaser, and this Agreement shall terminate and be
null and void and of no further force or effect, except for the Inspection
Indemnity, and neither Purchaser nor Seller shall have any further rights,
duties, liabilities or obligations to the other hereunder. Failure of Purchaser
to so notify Seller and Escrowee within said ten (10) business days that
Purchaser has elected to terminate this Agreement shall be deemed to mean that
Purchaser has elected not to terminate this Agreement. If Purchaser has elected
not to terminate this Agreement in the event of $100,000.00 or more of damage to
the Property, and if the damage has not been repaired prior to Closing,
Purchaser shall proceed to the Closing and shall pay the full Purchase Price,
less the amount of the deductible under Seller's applicable insurance policy,
and shall receive all insurance proceeds paid or payable as a result of such
damage or destruction, except for the amount of rental loss insurance applicable
to the period prior to the Closing Date, which shall be paid to and retained by
Seller. If prior to the Closing Date there is less than $100,000.00 of damage or
destruction to the Property by fire or other casualty which is covered by
insurance, this Agreement shall not terminate, and Purchaser shall proceed to
Closing, and if the damage has not been repaired prior to Closing, shall pay the
full Purchase Price and receive all insurance proceeds payable as a result of
such damage or destruction, except for the amount of rental loss insurance
applicable to the period prior to the Closing Date which shall be retained by
Seller. Until the Closing, Seller agrees to maintain in respect of the Property
hazard insurance and rental loss insurance and until Closing all risk of loss
shall be on the Seller.
B. If, prior to the Closing Date, all of the Property is taken
by condemnation or eminent domain or same is pending, this Agreement shall
terminate as of the day title to the Property or possession thereof vests in the
condemning authority, the Deposit shall be returned by Escrowee to Purchaser,
and upon such return this Agreement shall terminate and be null and void and of
no further force or effect, except for the Inspection Indemnity, and neither
Purchaser nor Seller shall have any further rights, remedies, duties,
liabilities or obligations to the other hereunder. If, prior to the Closing
Date, there shall be any condemnation or eminent domain proceedings instituted
or pending against less than all of the Property, and same would interfere with
Purchaser's ability to operate the Property as an apartment complex, then
Purchaser may elect to terminate this Agreement by written notice given to
Seller and Escrowee within ten (10) business days after Purchaser has received
notice from Seller of such proceedings. Upon such notice to Seller and Escrowee
the Deposit shall be returned to Purchaser by Escrowee, and upon such return
this Agreement shall terminate and be null and void and of no further force or
effect, except for the Inspection Indemnity, and neither Purchaser nor Seller
shall have any further rights, remedies, duties, liabilities or obligations to
the other hereunder. Failure of Purchaser to so notify Seller and Escrowee
within said ten (10) business days that Purchaser has elected to
-13-
14
terminate this Agreement shall be deemed to mean that Purchaser has elected not
to terminate this Agreement. If Purchaser does not so elect to terminate this
Agreement, then the Closing shall take place as provided herein without
abatement of the Purchase Price, and there shall be assigned to Purchaser at the
Closing, all interest of Seller in and to any condemnation awards which may be
payable to Seller on account of such occurrence.
ARTICLE X - SELLER'S REPRESENTATIONS AND WARRANTIES
Seller represents and warrants to Purchaser that:
A. To the best of Seller's knowledge, the conveyance of the
Property to Purchaser pursuant to this Agreement will not be a violation by
Seller of any applicable statute, ordinance, governmental restriction, or
regulation, or any private restriction or agreement.
B. To the best of Seller's knowledge, no special assessments
of any kind (special, bond or otherwise) are pending or levied against the
Property which are outstanding and unpaid.
C. The books and records to be made available by Seller to
Purchaser are the true books and records maintained by Seller in connection with
the Property.
D. Seller has no written employment contracts with any
employees of the Property, or if Seller has any such contracts, they will be
terminated effective as of the Closing Date and Seller shall indemnify Purchaser
in respect of any such written employment contracts.
E. Seller has not received notices of any violations by the
Property of state or municipal ordinances, orders or requirements.
F. The Rent Roll delivered by Seller to Purchaser accurately
sets forth for each apartment unit at the Property, the tenant's name, apartment
number, monthly rental and security deposit held. There are no leases for
apartments which affect the Property other than as set forth on the Rent Roll,
and there are no non-residential leases at the Property other than a lease to
the laundry room equipment company.
G. There is no litigation or proceeding pending for which
Seller has received notice or service of process or, to the best of Seller's
knowledge, threatened against Seller or the Property which could affect
Purchaser or the Property upon or subsequent to the Closing Date.
H. To the best of Seller's knowledge, there are no
condemnation or environmental proceedings pending, nor are there any proposed
changes in zoning or other land use regulations contemplated, against all or any
part of the Property. No portion of the Property has been affected by fire or
other casualty, except for such portions as have been fully repaired or restored
to their condition prior to such fire or other casualty.
-14-
15
I. Seller has received no notice of default under any of the
service contracts delivered by Seller to Purchaser in accordance with Section
III C of this Agreement.
J. Seller is not a "foreign person" as such term is defined in
Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended.
K. Each person executing and delivering this Agreement and all
documents to be executed and delivered by Seller at Closing represents and
warrants to Purchaser that he has due and proper authority to execute and
deliver same. Seller has the full right, power and authority to sell and convey
the Property to Purchaser as provided herein and to carry out its obligations
hereunder. The consummation by Seller of the transaction which is the subject of
this Agreement will not conflict with or result in a breach of any of the terms
of any agreement or instrument to which Seller is a party or by which Seller is
bound or constitute a default thereunder and the Board of Directors of Seller's
sole general partner, Xxxxxxx Realty Investors, Inc., has authorized and
approved the execution and delivery of this Agreement, the transaction which is
the subject of this Agreement, and all documents to be executed and delivered by
Seller at Closing, and the consent of the limited partners in Seller or the
shareholders in Xxxxxxx Realty Investors, Inc. is not required therefor.
L. To the best of Seller's knowledge, the schedule of Personal
Property delivered by Seller to Purchaser pursuant to Section III B of this
Agreement contains a correct and complete list of all material personal property
owned by Seller and located at or used in connection with the operation of the
Property. All Personal Property is, and as of the Closing Date will be, owned by
Seller free from encumbrances or liens except for the Security Deed.
M. To the best of Seller's knowledge, Seller has not received
any notice from any applicable governmental agency seeking any information or
alleging any violation of Environmental Law (as hereinafter defined). To the
best of Seller's knowledge, and except as disclosed in that certain
environmental report dated August 1, 1995 prepared by Environmental Corporation
of America, which Seller has previously delivered to Purchaser, Seller has not
caused or permitted the Property to be used to generate, manufacture, refine,
transport, treat, store, handle, dispose, transfer, produce or process any
Hazardous Materials (as hereinafter defined) or solid waste, except in
compliance with all applicable Environmental Laws, and Seller has not caused or
permitted, and has no knowledge of, any Release (as hereinafter defined) by
Seller of any hazardous materials on-site or off-site of the Property.
"Hazardous Materials" shall mean all substances regulated or deemed or defined
as toxic or hazardous under Environmental Law, including, without limitation,
any flammable explosives, radioactive materials, hazardous materials, hazardous
wastes, hazardous or toxic substances, or related materials, asbestos or any
materials containing asbestos. "Environmental Law" shall mean any Federal, state
or local environmental law, ordinance, rule, or regulation including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended (42 U.S.C. Section 9601, et seq.), the Hazardous
Materials Transportation Act, as amended (49 U.S.C. Section 1801, et seq.), the
Resource Conservation and Recovery Act, as amended (42 U.S.C. Section 9601 et
seq.), and the rules and regulations adopted and publications promulgated
pursuant thereto. "Release" shall mean releasing, spilling, leaking, pumping,
emitting, emptying, discharging,
-15-
16
ejecting, escaping, leaching, disposing, seeping, infiltrating, draining or
dumping, including both the present and past tense, as appropriate.
N. To the best of Seller's knowledge, neither Seller nor
Seller's managing agent has received any written notice which remains
outstanding from any insurance company or inspection or rating bureau setting
forth any requirements as a condition to the continuation of any insurance
coverage on or with respect to the Property or the continuation thereof at the
existing premium rates. The Promissory Note, the Security Deed and the other
loan documents (collectively, the "Loan Documents") have not been further
amended, and Seller has received no notice from Lender of a default under the
Loan Documents or of the existence of a fact, condition or circumstance that
will, if not remedied, cause a default thereunder with the passing of time or
the giving of notice, or both.
The term "knowledge" when applied to Seller in this Agreement,
means the actual, but not constructive, knowledge of Xxxxxxx X. Xxxxxxx, the
President of the sole general partner of Seller, after due inquiry of the
resident manager of the Property, the maintenance supervisor of the Property,
the staff accountant for the Property, and the Vice President of Operations of
the property management company for the Property, and not anything which he
should have known, but did not know. Whenever reference is made in this
Agreement to a notice having been received by Seller the same shall mean a
notice which actually has been received by Xxxxxxx X. Xxxxxxx or of which he has
been advised after due inquiry of the resident manager of the Property.
Seller's warranties and representations shall survive the
consummation of the transaction contemplated herein through May 1, 1998. Any
lawsuit or other proceeding by Purchaser against Seller in respect of any such
warranties or representations must be commenced by Purchaser, if at all, no
later than May 15, 1998. If Purchaser fails to notify Seller no later than May
1, 1998 of a breach by Seller of any warranty or representation contained in
this Agreement, or if Purchaser fails to file suit against Seller no later than
May 15, 1998 in respect of any breach by Seller of a warranty or representation
contained in this Agreement, Purchaser's right to file suit against Seller or
otherwise recover against Seller in respect of any such breach of a warranty or
representation shall be terminated and null and void. Notwithstanding the
foregoing, if Purchaser has knowledge that any of the representations and
warranties of Seller in this Agreement are inaccurate in any respect prior to
the Closing Date, and if such inaccuracy does not result from any act or
omission of Seller between the date hereof and the Closing Date, Purchaser's
sole and exclusive remedy, waiving all other remedies, is either to (i)
terminate this Agreement by giving notice to Seller in which event Escrowee
promptly shall return to Purchaser the Deposit, and thereafter this Agreement
shall terminate and be null and void and of no further force or effect, except
for the Inspection Indemnity, and neither Purchaser nor Seller shall have any
further rights, remedies, duties, liabilities or obligations to the other, or
(ii) waive that representation and warranty as to such inaccuracy and proceed to
consummate the transaction contemplated herein. Purchaser acknowledges that
Seller shall have no liability for any representations or warranties of Seller
in this Agreement which were true when made and as of the Closing Date, but
which become untrue following the Closing Date. As used in the previous
-16-
17
sentence, Purchaser's knowledge shall mean the actual, but not constructive
knowledge, of Xxxxxxxx Xxxxx, and not anything which he should have known, but
did not know.
ARTICLE XI - SELLER'S COVENANTS PRIOR TO CLOSING
Seller covenants and agrees that:
A. Seller will cancel the currently existing management
agreement for the Property effective as of the Closing.
B. From the date of execution hereof until the Closing (i)
Seller shall make every reasonable effort to do nothing which might materially
damage the reputation of the Property or Seller's relations with its tenants,
(ii) Seller will continue to operate the Property in the same manner as Seller
is currently operating the Property, and (iii) Seller will continue to maintain
the Property in its current condition, including the roof, paving, landscaping
and HVAC units, normal wear and tear excepted.
C. Seller has just recently commenced certain work with
respect to the breezeways of the buildings at the Property (herein referred to
as the "Breezeway Work"). Within thirty (30) days of the date of this Agreement,
representatives of Purchaser shall meet with representatives of the Seller at
the Property so that Seller can explain to Purchaser the proposed scope of the
Breeezeway Work with the scope fully outlined in writing, and so that Purchaser
can inform Seller whether or not to continue with the Breezeway Work. In the
event that Purchaser instructs Seller within thirty (30) days after the date of
this Agreement to terminate the Breezeway Work, Seller will cease the Breezeway
Work, and there will be no obligation of Purchaser to reimburse Seller for the
cost of the Breezeway Work. In the event Purchaser does not within thirty (30)
days after the date of this Agreement instruct Seller to terminate the Breezeway
Work, at the Closing, Purchaser shall reimburse Seller for that part of the
Breezeway Work which has been completed prior to the Closing Date, up to, but
not in excess of $90,000, based upon copies of the contracts and paid invoices
for such work. While the Breezeway Work is underway, Seller will provide to
Purchaser copies of the lien waivers obtained by Seller as it makes payment for
the Breezeway Work. Seller will obtain and deliver to Purchaser at Closing, a
one year warranty from the subcontractor effecting the Breezeway Work with
respect to its workmanship and installation, and a manufacturer's warranty with
respect to the materials being used for the Breezeway Work.
ARTICLE XII - DEFAULT AND REMEDIES
A. In the event that the transaction contemplated herein is
not closed and consummated because of Purchaser's failure or breach to perform
its obligations hereunder, Seller may obtain the Deposit from Escrowee as
agreed-upon liquidated damages and not as a penalty, it being otherwise
difficult or impossible to estimate or determine Seller's actual damages, and
which liquidated damages shall be in lieu of any other damages or the right to
specific performance, and, upon Seller's receipt of such liquidated damages,
this Agreement shall terminate and be null and void and of no further force or
effect, and neither Seller nor Purchaser
-17-
18
shall have any further rights, remedies, duties, liabilities or obligations to
the other hereunder, except for the Inspection Indemnity.
B. In the event that the transaction contemplated herein is
not closed and consummated because of Seller's failure or breach to perform its
obligations hereunder or because of a breach by Seller of any of the
representations and warranties made herein by Seller, Purchaser shall have the
right only (i) to terminate this Agreement by giving notice thereof to Seller
and Escrowee, and upon receipt of such notice Escrowee shall return the Deposit
to Purchaser and thereafter this Agreement shall terminate and be null and void
and of no further force or effect, except for the Inspection Indemnity, and
neither Seller nor Purchaser shall have any further rights, remedies, duties,
liabilities or obligations to the other hereunder, or (ii) to xxx Seller for
specific performance of its obligations under this Agreement; which remedies
specified in (i) and (ii) shall be in lieu of any other rights or remedies for
Purchaser, including, without limitation, any right or claim for damages;
provided, however, in the event that the remedy of specific performance is not
available to Purchaser because Seller has conveyed or encumbered the Property,
Purchaser may pursue a claim against Seller for compensatory damages not to
exceed $100,000.00. If Purchaser consummates the transaction contemplated in
this Agreement it shall be conclusively deemed to have waived any breach by
Seller of any covenant, representation or warranty under this Agreement which
the Purchaser knew existed prior to the Closing.
ARTICLE XIII - NOTICES
Whenever any notice, demand, or request is required or
permitted hereunder, such notice, demand or request shall be in writing and
shall be hand-delivered in person or sent by FedEx or similar expedited courier
service, to the addresses set forth below:
To Seller:
Xxxxxxx Properties Residential, L.P.
c/o Roberts Properties, Inc.
0000 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Mr. Xxxxx Xxxxxxxx
Facsimile No. (000) 000-0000
With a copy to:
Xxxxxxx X. Xxxxxxx, Esq.
Xxxx Xxx Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Facsimile No. (000) 000-0000
-18-
19
To Purchaser:
Great Bear Investment Company
c/o Wilson & Xxxxx Southeast, Inc.
00 Xxxxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xx. Xxxxxxxx X. Xxxxx
Facsimile No. (000) 000-0000
With a Copy to:
Xxxxxxxxx X. Xxxx, Esq.
Xxxxxx & Xxxxxxxx
XxxxxxxXxxx Xxxxx, Xxxxx 0000
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Facsimile No. (000) 000-0000
To Escrowee:
Commonwealth Land Title Insurance Company
0000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx
Facsimile No. (000) 000-0000
Any notice, demand, or request which shall be served upon any of the parties in
the manner aforesaid shall be deemed sufficiently given for all purposes
hereunder (i) at the time such notice, demand or request is hand-delivered in
person, or (ii) on the day such notices, demands or requests are deposited with
FedEx or other expedited courier service in accordance with the preceding
portion of this Article XIII. Either Purchaser or Seller or Escrowee shall have
the right from time to time to designate by written notice to the other such
other person or persons and at such other places in the United States as
Purchaser or Seller or Escrowee desires written notices, demands, or requests to
be delivered or sent in accordance herewith; provided, however, at no time shall
any party be required to send more than an original and two (2) copies of any
such notice, demand or request required or permitted hereunder. Anything
contained in this Article XIII to the contrary notwithstanding, all notices from
Purchaser to Seller or from Seller to Purchaser may be executed by and sent by
and to their respective counsel, Xxxxxxx X. Xxxxxxx, Esquire, Seller's attorney
and Xxxxxxxxx X. Xxxx, Esquire, Purchaser's attorney.
-19-
20
ARTICLE XIV - SETTLEMENT ITEMS
In addition to the items specifically mentioned in this
Agreement to be delivered at the Closing, Seller shall deliver the following
items to Purchaser at the Closing: a then current employee list; a then current
rent roll; warranties and guaranties of suppliers and contractors, if any, (and
an assignment thereof); an assignment of all of Seller's right, title and
interest in and to the name "Windsong Apartments"; Seller's supply of printed
brochures, floor plans and other advertising literature; all original tenant
leases and all amendments and modifications thereof; all original service
contracts being assumed by Purchaser, if available, otherwise copies of such
service contracts; any sewer, water and other utility bills and assessment bills
any part of which is to be paid by Purchaser; and a complete and accurate
statement setting forth the necessary information upon which any adjustment
shall be made at the Closing.
ARTICLE XV - ACCESS
Purchaser and its agents and representatives shall have the
right to enter upon the Property prior to the Closing Date on a not-to-interfere
basis with the tenants of the Property after having given Seller no less than
forty-eight hours prior written notice, for any lawful purpose, including,
without limitation, investigations, tests and studies, structural inspection,
and survey purposes; provided, however, Purchaser shall pay for all such work
performed on the Property and shall not permit the creation of any lien in favor
of any contractor, subcontractor, materialman, mechanic, surveyor, architect or
laborer, and Purchaser hereby expressly agrees to indemnify and hold Seller
harmless with respect thereto; and provided further, however, that Purchaser
hereby expressly agrees to indemnify and hold Seller harmless against any claim,
damage or injury to either persons or property arising out of Purchaser's or its
agent's, employees' or representatives' actions under this Article XV. This
Article XV shall survive the Closing of the transaction contemplated herein or
any other termination of this Agreement. The indemnifications and hold harmless
provisions of this Article XV are referred to in this Agreement as the
"Inspection Indemnity". Purchaser may conduct conversations with employees of
the Property only in the presence of either Xxxxx X.Xxxxxxxx or Xxxxxxx X.
Xxxxxxx or after having obtained express written permission from either of them,
including discussing the possibility of future employment with Purchaser if it
does in fact acquire the Property, but no such conversations shall be had with
the employees as to the amount of compensation or benefits proposed to be paid.
ARTICLE XVI - BROKERS
Purchaser and Seller warrant and represent each to the other
that neither has dealt with any broker, agent or finder in connection with the
purchase and sale of the Property except Xxxxxx & Xxxxx Southeast, Inc. (the
"Broker") to whom Seller shall pay a real estate commission in the amount of
$150,000.00 only in the event the transaction contemplated in this Agreement is
closed in accordance with the terms hereof. In the event any other claim(s) for
real estate commissions, fees or compensation arise in connection with this
Agreement and the transaction contemplated herein, the party so incurring or
causing such other claim(s) shall indemnify, defend and hold harmless the other
party from any loss, claim or damage which the other party
-20-
21
suffers because of said other claim(s). This Article XVI shall survive the
Closing of the transaction contemplated herein or any other termination of this
Agreement. By its execution hereof, Broker agrees (i) to execute on the Closing
Date an unconditional waiver and release of commercial real estate broker's lien
with respect to the transaction contemplated in this Agreement, and (ii) this
Agreement may be amended by Purchaser and Seller without execution of any such
amendment by Broker provided such amendment does not affect Broker's entitlement
to its commission.
ARTICLE XVII - CONDITION PRECEDENT FOR BOTH
PURCHASER AND SELLER
Seller shall not be required to sell the Property and Purchaser shall
not be required to purchase the Property unless Seller shall have received and
delivered to Purchaser on or before September 2, 1997 (the "Lender Approval
Date"), the written consent (the "Lender Consent") executed by the holder of the
Promissory Note and the Security Deed or its authorized agent, in a form
reasonably satisfactory to Seller and Purchaser, to the transaction contemplated
herein and the assumption of the Loan by Purchaser subject to the non-recourse
provisions thereof, the secondary financing to be placed against the Property by
Purchaser, and the release of Seller from any liability in connection with the
Loan, with no changes required in the amounts to be paid or the interest rate
under the First Note, and without the requirement of the payment of any fee or
compensation to such holder, except for a transfer fee plus reimbursement of
such holder's attorney's fees and out-of-pocket expenses incurred in connection
with obtaining such consent. Seller and Purchaser agree to cooperate with each
other and to use their good faith reasonable efforts in order to obtain such
consent. Seller will initiate contact with the holder of the Promissory Note or
its authorized agent within five (5) days after the date of this Agreement.
Purchaser agrees to furnish whatever information is reasonably required by the
holder of the First Note as respects the background, financial and management
ability of Purchaser and the like so as to allow the holder the of the
Promissory Note to evaluate Purchaser as the owner of the Property subject to
the Loan. Although the matters set forth in this Article XVII are a condition
precedent for both Seller and Purchaser, as long as Purchaser and Seller use
their good faith reasonable efforts to obtain the consent from the holder of the
Promissory Note and provide such information in connection therewith as herein
specified, neither Seller nor Purchaser shall have any liability to the other
for failure to obtain such consent. If the Lender Consent has not been obtained
on or before the Lender Approval Date, the Escrowee shall return the Deposit to
Purchaser and thereafter this Agreement shall terminate and be null and void and
of no further force or effect, and no party shall have any further liabilities
or obligations to the others hereunder, except for the Inspection Indemnity.
ARTICLE XVIII - SELLER'S TAX-FREE EXCHANGE
AND CONDITION PRECEDENT FOR SELLER
A. Rather than sell the Property to Purchaser, Seller desires
to accomplish an exchange of the Property for "like-kind" property which will
qualify as such pursuant to Section 1031 of the Internal Revenue Code of 1986,
as amended, and all the Regulations promulgated thereunder. Purchaser is willing
to cooperate with Seller in an exchange, provided Purchaser
-21-
22
incurs no additional expense or liability and does not take title to the
"like-kind" exchange property. Purchaser also agrees that Purchaser will, at the
direction of Seller or a third party intermediary acting at Seller's direction,
pay all proceeds of the sale of the Property to the third party intermediary who
will facilitate the "like-kind" exchange for Seller pursuant to an intermediary
exchange agreement between Seller and such third party intermediary, and
Purchaser will execute documents to effectuate the exchange provided that such
documents impose no liability upon Purchaser and do not require Purchaser to
take title to any other property.
B. It shall be a condition precedent to the obligation of
Seller to consummate the transaction contemplated herein that Seller, no later
than November 10, 1997, shall have both (i) entered into one or more sales
contracts to acquire one or more replacement properties so as to allow Seller to
effect the ss. 1031 exchange referred to in Section XVIII A hereof, and (ii) (to
the extent such contracts contain inspection periods) either not terminated such
sales contracts within the inspection periods provided therein or waived
Seller's rights so to terminate the same (the occurrence of either such event in
this clause (ii) being referred to herein as the "Consummation Election").
Seller agrees to use its good faith reasonable efforts in order to enter into
such sales contract(s) (hereinafter collectively referred to as "Exchange
Contract") and complete Seller's related inspections (if any) no later than
November 10, 1997, and Seller shall advise Purchaser immediately upon the
execution and delivery of any Exchange Contract and upon the completion of such
inspections and Seller's decision to make or not make the Consummation Election.
In the event that Seller is not able to enter into the
Exchange Contract, complete such inspections, if any, and make the Consummation
Election (if the Exchange Contract provides for such inspections) no later than
November 10, 1997, Seller shall have the right to so notify Purchaser and to
further notify Purchaser that Seller has extended for a period of time ending on
December 10, 1997 (hereinafter referred to as the "Extended Exchange Date")
Seller's right to enter into the Exchange Contract and make the Consummation
Election, and the Closing Date shall be automatically extended to December 19,
1997 so as to allow Seller to have the full period of time until the Extended
Exchange Date, and to allow Purchaser and Seller seven business days thereafter
within which to consummate the transaction contemplated herein. Whether or not
Seller has been able to enter into a satisfactory Exchange Agreement and make
the Consummation Election no later than the Extended Exchange Date, Seller shall
be obligated to consummate the transaction contemplated in this Agreement on or
before December 19, 1997.
ARTICLE XVIX -- MISCELLANEOUS
A. This Agreement constitutes the entire agreement between the
parties hereto and cannot be changed or modified other than by a written
agreement executed by both Purchaser and Seller.
B. There shall also be executed and delivered at Closing all
other documents and instruments reasonably required or necessary to effect the
transaction contemplated herein.
-22-
23
C. Irrespective of the place of execution or performance, this
Agreement shall be governed by and construed in accordance with the laws of the
State of Georgia. This Agreement shall be construed without regard to any
presumption or other rule requiring construction against the party causing this
Agreement to be drafted. If any words or phrases in this Agreement shall have
been stricken out or otherwise eliminated, whether or not any other words or
phrases have been added, this Agreement shall be construed as if the words or
phrases so stricken out or otherwise eliminated were never included in this
Agreement and no implication or inference shall be drawn from the fact that said
words or phrases were so stricken out or otherwise eliminated. All terms and
words used in this Agreement regardless of the number or gender in which they
are used, shall be deemed to include any other number and any other gender as
the context may require.
D. This Agreement may be executed in more than one
counterpart, each of which shall be deemed an original.
E. The captions of this Agreement are inserted for convenience
or reference only and do not define, describe or limit the scope or intent of
this Agreement or any of the terms hereof.
F. Time is of the essence of this Agreement and each term and
provision hereof.
G. If any term, covenant or condition of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement and the application of
such terms, covenants and conditions to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be affected
thereby and each term, covenant and condition of this Agreement shall be valid
and be enforced to the fullest extent permitted by law.
H. All rights, powers and privileges conferred hereunder upon
the parties unless otherwise provided shall be cumulative and not restricted to
those given by law.
I. No failure of any party to exercise any power given such
party hereunder or to insist upon strict compliance by any other party to its
obligations hereunder, and no custom or practice of the parties in variance with
the terms hereof, shall constitute a waiver of any party's right to demand exact
compliance with the terms hereof.
J. Purchaser shall have the right to waive any condition or
contingency herein in Purchaser's favor and Seller shall have the right to waive
any condition or contingency herein in Seller's favor.
K. Anything contained in this Agreement to the contrary
notwithstanding, (i) except as specifically set forth in this Agreement to the
contrary, the terms and provisions of this Agreement shall not survive Closing
and shall be merged into the Deed; and (ii) except as specifically set forth in
this Agreement to the contrary, Seller does not make any warranties or
-23-
24
representations of any kind or character, expressed or implied, with respect to
the Property, its physical condition, income to be derived therefrom or expenses
to be incurred with respect thereto, or any other matter or thing relating to or
affecting the Property, and there are no oral or written agreements, warranties
or representations with respect to the Property, except as otherwise expressly
set forth in this Agreement.
L. The provisions of this Agreement shall extend to, bind and
inure to the benefit of the parties hereto and their respective successors,
assigns and the legal representatives of their estates.
M. This Agreement may not be assigned by Purchaser except to a
corporation, limited partnership or limited liability company in which Great
Bear Investment Company has a majority controlling interest.
N. The Disclosure of Information on Lead-Based Paint and/or
Lead-Based Paint Materials is attached hereto as Exhibit C and is incorporated
herein by reference and made a part hereof.
-24-
25
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, sealed and delivered the day and year first above
written.
SELLER:
XXXXXXX PROPERTIES RESIDENTIAL, L.P., a
Georgia limited partnership
By: Xxxxxxx Realty Investors, Inc., a Georgia
corporation, its sole general partner
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
(CORPORATE SEAL)
PURCHASER:
GREAT BEAR INVESTMENT COMPANY, a
Georgia corporation
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------------
Xxxxxxxx X. Xxxxx
Vice President
(CORPORATE SEAL)
The undersigned Broker executes this Agreement for the purpose of
agreeing to the provisions of Article XVI hereof, as of the day and year first
above written.
XXXXXX & XXXXX SOUTHEAST, INC.
By: /s/ Xxxxxxxx X. Xxxxx
Xxxxxxxx X. Xxxxx
----------------------------------
President
-25-
26
Escrowee joins in the execution of this Agreement under seal
for the purpose of acknowledging the agreements as to the holding of the Deposit
in escrow.
ESCROWEE:
COMMONWEALTH LAND TITLE INSURANCE COMPANY.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Asst. Vice President
NTS Counsel
(CORPORATE SEAL)
-26-
