AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), is entered into as of the 26
day of September, 1996, by and between COLONY APARTMENTS CHAPEL HILL LIMITED
PARTNERSHIP, a Maryland limited partnership ("Purchaser"), and COLONY LIMITED
PARTNERSHIP, an Illinois limited partnership ("Seller").
WITNESSETH:
R-1. Seller is the owner of a certain parcel of land which real property
is legally and more particularly described in Exhibit A attached hereto (the
"Land"), together with the improvements thereon consisting of fifteen (15)
buildings containing, in the aggregate, One Hundred Ninety-Eight (198)
residential apartment units and certain other related improvements and
amenities comprising the apartment complex known as Colony Apartments located
at 1250 Ephesus Church Road, Chapel Hill, North Carolina (the "Improvements").
The Land and the Improvements, together with those items described in Section 1
below, shall hereinafter be referred to collectively as the "Property".
R-2. Seller desires to sell and Purchaser desires to purchase fee simple
title to the Property on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and/or other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller and Purchaser hereby agree
as follows:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to
sell at the price of Seven Million One Hundred Thousand and No/100 Dollars
($7,100,000.00 (the "Purchase Price"), the Property, which shall be deemed to
include the Land and the Improvements, together with (i) all appurtenances,
rights, privileges and easements benefitting or pertaining thereto; (ii) all
contracts relating to the operation and maintenance thereof or connected
therewith, unless terminated in accordance with Paragraph 16.2.3 hereof; (iii)
all fixtures, furniture, equipment, inventory, supplies, tools and other
personal property owned by Seller and used in connection with the operation of,
or located at the Property, other than those items owned by tenants and other
than any and all computer hardware and software located at the Property; (iv)
all of Seller's rights in or to condemnation awards or insurance proceeds (to
the extent not applied to restoration); (v) all assignable warranties,
guaranties, bonds, claims and rights running to or assigned to Seller in
connection with the construction, maintenance, operation or repair of the
Property or any component thereof; (vi) all of Seller's rights to any drawings,
plans, specifications, surveys, manuals and contracts relating to construction,
maintenance and operation of the Property; (vii) all assignable operating
licenses and/or permits relating to the Property or any portion thereof; (viii)
all of Seller's interest in and under all eases and occupancy agreements with
tenants or prospective tenants of the Property, including unapplied security
deposits held by Seller in connection therewith; and (ix) all other tangible
and intangible property or rights owned by Seller or in which Seller has an
interest in connection with its ownership and operation of the Property,
including all rights to use the trade name "Colony Apartments." Included in
the Purchase Price is all of the personal property set forth on Exhibit B
attached hereto (the "Personal Property").
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as
follows:
2.1. Upon the execution of this Agreement, the sum of One Hundred
Thousand and No/100 Dollars ($100,000.00) (the "Initial Xxxxxxx Money") to be
held in escrow by and in accordance with the provisions of the Escrow Agreement
("Escrow Agreement") attached hereto as Exhibit C;
2.2. In the event Purchaser elects to extend the "Closing Date"
(hereinafter defined), on or before October 25, 1996, the additional sum of
Fifty Thousand and No/100 Dollars ($50,000.00) (the "Additional Xxxxxxx Money")
to be held in escrow by and in accordance with the provisions of the Escrow
Agreement (the Initial Xxxxxxx Money and the Additional Xxxxxxx Money, if any,
are referred to herein, together, as "Xxxxxxx Money").
2.3. On the "Closing Date" (hereinafter defined), the balance of the
Purchase Price, adjusted in accordance with the prorations, by federally wired
"immediately available" funds, on or before 11:00 a.m Chicago time.
3. TITLE COMMITMENT AND SURVEY.
3.1. Seller has provided to Purchaser a commitment for owner's title
insurance for the Property (the "Title Commitment") from First American Title
Insurance Company (the "Title Company"). Seller shall, within 10 days of the
date hereof, provide Purchaser an update to the existing ALTA Survey dated
November 19, 1983 prepared by Xxxx, Xxxxxx & Associates, Inc., a copy of which
has been provided to Purchaser by Seller (the "Updated Survey"). Seller and
Purchaser shall each pay for one-half of the costs of the Title Commitment, the
title policy issued pursuant thereto, and the Updated Survey. Purchaser shall
pay for the cost of any endorsements to, or extended coverage on, the title
policy.
3.2. On or before the date which is three (3) business days after
receipt by Purchaser of the Updated Survey, Purchaser shall advise Seller by
written notice (the "Purchaser's Title Objection Notice") of any objections
that Purchaser may have to (1) the title exceptions reflected in the Title
Commitment; and (2) any matters reflected on the Updated Survey. Any title
exceptions reflected in the Title Commitment or matters reflected on the
Updated Survey as to which Purchaser does not object in the Purchaser's Title
Objection Notice shall be referred to herein as the "Permitted Title and Survey
Exceptions." Within fifteen (15) days after Seller's receipt of the
Purchaser's Title Objection Notice, Seller shall advise Purchaser by written
notice (the "Seller's Title Notice") as to whether Seller intends to bond-over,
cure or remove the objectionable matters reflected in the Purchaser's Title
Objection Notice. Any objectionable matters that Seller agrees to bond-over,
cure or remove shall be bonded-over, cured or removed in form reasonably
satisfactory to Purchaser by Seller prior to "Closing" (as hereinafter
defined), and the applicable correction of such objectionable matters by Seller
shall be a condition precedent to Purchaser's obligations to proceed to Closing
hereunder. Purchaser shall have the right, exercisable by written notice to
Seller given within five (5) days after delivery to Purchaser of the Seller's
Title Notice which reflects that Seller does not intend to bond-over, cure or
remove some or all of the objectionable matters specified in the Purchaser's
Title Objection Notice, to either: (a) terminate this Contract, in which event
the Xxxxxxx Money shall be returned to Purchaser and the parties shall be
relieved from all further liability or obligation under this Contract (except
with respect to those provisions hereof that are expressly intended to survive
the termination of this Contract as set forth herein); or (b) waive such
objectionable title and/or survey matters and proceed to Closing in conformity
with the terms of this Contract, in which event, such objectionable title
and/or survey matters shall be deemed "Permitted Title and Survey Exceptions"
under this Contract.
3.3. The obligation of Purchaser and Seller to pay various costs set
forth in Paragraphs 3.1 shall survive the termination of this Agreement.
4. PAYMENT OF CLOSING COSTS.
4.1. In addition to the costs set forth in Paragraph 3.1, Purchaser
and Seller shall each pay for one-half of the costs of the documentary or
transfer stamps to be paid with reference to the "Deed" (hereinafter defined)
and all other stamps, intangible, transfer, documentary, recording, sales tax
and surtax imposed by law with reference to any other sale documents delivered
in connection with the sale of the Property to Purchaser and all other charges
of the Title Insurer in connection with this transaction. Purchaser shall pay
all costs related to Purchaser's financing.
5. CONDITION OF TITLE.
5.1. The following conditions concerning title to the Property shall
exist at the time of Closing hereunder, and the obligation of Purchaser to
close hereunder shall be expressly conditioned upon and subject to the
satisfaction (or written waiver by Purchaser) of each such condition:
5.1.1. Title to the entire Property shall be (and is required
to be) good of record and in fact, marketable, and free and clear of all liens,
encumbrances, leases, tenancies, and occupancies, except for: (i) customary
rights of way and/or easements to public authorities and/or public-regulated
utility companies for public street purposes or fire lanes or for utilities or
utilities installations; provided that, none of the same, in Purchaser's
opinion, interfere with or adversely affect Purchaser's ownership, operation,
use or resale of the entire Property; (ii) then-current real estate taxes and
assessments and sewer and water charges not yet due and payable; (iii) those
occupancy leases listed on the rent roll attached hereto as Exhibit L, and any
leases of tenants entered into after the rent roll was prepared and shown on
the updated rent roll to be delivered at Closing pursuant to Section 9.2, which
comply with the covenant set forth in Paragraph 16.3 hereof; (iv) the Permitted
Title and Survey Exceptions; (v) an agreement with the Federal Housing
Commission requiring the Property to be maintained as rental housing until
April 1, 1998; and (vi) any other exceptions or survey matter waived in writing
by Purchaser (collectively, the "Permitted Exceptions").
5.1.2. Title to the entire Property shall be insurable, in an
amount not less than the Purchase Price of the Property, by Title Company, at
standard rates and without the payment of any special premium, under the
current ALTA standard full coverage owner's title insurance policy form, which
shall contain no Schedule B-1 exceptions, except for the Permitted Exceptions.
5.2. In the event that title to the entire Property at Closing is not as
required pursuant to the terms and provisions of Section 5.1 above, then
Purchaser shall have the option, in its sole discretion, exercised by written
notice to the Seller, to: (i) waive such defects and proceed to Closing in
accordance with the terms of this Agreement, or (ii) terminate this Agreement,
obtain a refund of the Xxxxxxx Money and return to Seller all documents related
to the Property delivered to Purchaser by Seller, whereupon all parties hereto
shall be thereupon relieved from any further liability or obligation hereunder
(except with respect to those provisions hereof that are expressly intended to
survive the termination of this Agreement as set forth herein); or (iii) delay
the Closing hereunder for up to thirty (30) days to enable Seller to cure the
title defect (provided that Seller shall not be obligated to cure such title
defect). In the event Seller advises Purchaser by written notice at or prior
to the date closing would have occurred absent such failed condition that
Seller elects not to cure the title defect, then Purchaser shall be required to
exercise either of the remedies set forth in clauses (i) and (ii) above within
five (5) days following receipt of such notice.
5.3. Seller agrees to convey fee simple title to the Property to
Purchaser by special warranty deed (the "Deed") in recordable form subject only
to the Permitted Exceptions and those exceptions otherwise waived by Purchaser
in writing.
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
6.1. Except as provided in the indemnity provisions contained in
Paragraph 7.1 of this Agreement, Seller shall bear all risk of loss with
respect to the Property up to the earlier of the date upon which either
possession or title (by recordation of the Deed) is transferred to Purchaser in
accordance with this Agreement. Notwithstanding the foregoing, in the event of
damage to the Property by fire or other casualty prior to the Closing Date,
repair of which would cost less than or equal to $100,000.00 (as determined by
Seller in good faith) Purchaser shall not have the right to terminate its
obligations under this Agreement by reason thereof, but Seller shall have the
right to elect to either (i) repair and restore the Property (in which case the
Closing Date shall be extended until completion of such restoration) or (ii)
assign and transfer to Purchaser on the Closing Date all of Seller's right,
title and interest in and to all insurance proceeds paid or payable to Seller
on account of such fire or casualty, and Purchaser shall receive a credit
against the Purchase Price for any deductible. In the event Seller elects (i)
above, Purchaser shall have the right, in its sole discretion, by delivering
written notice to Seller of such election within three (3) days of Seller's
election in the previous sentence, to cause Seller to elect (ii) above instead.
Seller shall promptly notify Purchaser in writing of any such fire or other
casualty and Seller's determination of the cost to repair the damage caused
thereby. In the event of damage to the Property by fire or other casualty
prior to the Closing Date, repair of which would cost in excess of $100,000.00
(as determined by Seller in good faith), then this Agreement may be terminated
at the option of Purchaser, which option shall be exercised, if at all, by
Purchaser's written notice thereof to Seller within five (5) business days
after Purchaser receives written notice of such fire or other casualty and
Seller's determination of the amount of such damages, and upon the exercise of
such option by Purchaser this Agreement shall become null and void, the Xxxxxxx
Money deposited by Purchaser shall be returned to Purchaser together with
interest thereon, and neither party shall have any further liability or
obligations hereunder. In the event that Purchaser does not exercise the
option set forth in the preceding sentence, the Closing shall take place on the
Closing Date and Seller shall assign and transfer to Purchaser on the Closing
Date all of Seller's right, title and interest in and to all insurance proceeds
paid or payable to Seller on account of the fire or casualty, and Purchaser
shall receive a credit against the Purchase Price for any deductible.
6.2. If between the date of this Agreement and the Closing Date, any
condemnation or eminent domain proceedings are initiated which might result in
the taking of any part of the Property or the taking or closing of any right of
access to the Property, Seller shall immediately notify Purchaser of such
occurrence. In the event that the taking of any part of the Property shall:
(i) materially impair access to the Property; (ii) cause any non-compliance
with any applicable law, ordinance, rule or regulation of any federal, state or
local authority or governmental agencies having jurisdiction over the Property
or any portion thereof; (iii) materially and adversely impair the use of the
Property as it is currently being operated; or (iv) take more than 10% of the
Property or any portion of any building on the Property (hereinafter
collectively referred to as a "Material Event"), Purchaser may:
6.2.1. terminate this Agreement by written notice to seller, in
which event the Xxxxxxx Money deposited by Purchaser, together with interest
thereon, shall be returned to Purchaser and all rights and obligations of the
parties hereunder with respect to the closing of this transaction will cease;
or
6.2.2. proceed with the Closing, in which event Seller shall
assign to Purchaser all of Seller's right, title and interest in and to any
award made in connection with such condemnation or eminent domain proceedings.
6.3. Purchaser shall then notify Seller, within five (5) business
days after Purchaser's receipt of Seller's notice, whether Purchaser elects to
exercise its rights under Paragraph 6.2.1 or Paragraph 6.2.2. Closing shall be
delayed, if necessary, until Purchaser makes such election. If Purchaser fails
to make an election within such five (5) business day period, Purchaser shall
be deemed to have elected to exercise its rights under Paragraph 6.2.2. If
between the date of this Agreement and the Closing Date, any condemnation or
eminent domain proceedings are initiated which do not constitute a Material
Event, Purchaser shall be required to proceed with the Closing, in which event
Seller shall assign to Purchaser all of Seller's right, title and interest in
and to any award made in connection with such condemnation or eminent domain
proceedings.
7. INSPECTION AND AS-IS CONDITION.
7.1. During the period commencing on the date hereof and ending at
9:00 p.m. Washington time on October 1, 1996 (said period being herein referred
to as the "Financing Period"), Purchaser shall attempt to receive a written
commitment for financing acceptable to Purchaser in its sole discretion
("Financing").
In the event that Purchaser does not receive the Financing, Purchaser
shall have the right to terminate this Agreement by giving written notice of
such termination to Seller at any time prior to the expiration of the Financing
Period. If written notice is not received by Seller pursuant to this Paragraph
7.1 prior to the expiration of the Financing Period, then the right of
Purchaser to terminate this Agreement pursuant to this Paragraph 7.1 shall be
waived. If Purchaser terminates this Agreement by written notice to Seller
prior to the expiration of the Financing Period: (i) Purchaser shall promptly
deliver to Seller copies of all studies, reports and other investigations
obtained by Purchaser in connection with its due diligence during the Financing
Period; and (ii) the Xxxxxxx Money deposited by Purchaser shall be immediately
paid to Purchaser, together with any interest earned thereon, and neither
Purchaser nor Seller shall have any right, obligation or liability under this
Agreement, except for Purchaser's obligation to indemnify Seller and restore
the Property, as more fully set forth in this Paragraph 7.1. Notwithstanding
anything contained herein to the contrary, the terms of this Paragraph 7.1,
shall survive the Closing and the delivery of the Deed and termination of this
Agreement.
All of the tests, investigations and studies conducted by Purchaser
shall be at Purchaser's sole cost and expense and Purchaser shall restore the
Property to the condition existing prior to the performance of such tests or
investigations by or on behalf of Purchaser. Purchaser shall defend, indemnify
and hold Seller and any affiliate, parent of Seller, and all shareholders,
employees, officers and directors of Seller or Seller's affiliate or parent
(hereinafter collectively referred to as "Affiliate of Seller") harmless from
any and all liability, cost and expense (including without limitation,
reasonable attorney's fees, court costs and costs of appeal) suffered or
incurred by Seller or Affiliates of Seller for injury to persons or property
caused by Purchaser's investigations and inspection of the Property. Purchaser
shall undertake its obligation to defend set forth in the preceding sentence
using attorneys selected by Seller, and reasonably satisfactory to Purchaser.
7.2. Seller acquired title to the Property by foreclosure (or
deed-in-lieu thereof). Seller can make no representations or warranties
relating to the condition of the Property or the Personal Property. Except as
may be otherwise specifically set forth elsewhere in this Agreement, Purchaser
acknowledges and agrees that it will be purchasing the Property and the
Personal Property based solely upon its inspections and investigations of the
Property and the Personal Property and that Purchaser will be purchasing the
Property and the Personal Property "AS IS" and "WITH ALL FAULTS", based upon
the condition of the Property and the Personal Property as of the date of this
Agreement, reasonable and normal wear and tear and loss by fire or other
casualty or condemnation excepted. Without limiting the foregoing, Purchaser
acknowledges that, except as may otherwise be specifically set forth elsewhere
in this Agreement, neither Seller nor its consultants, brokers or agents have
made any representations or warranties of any kind upon which Purchaser is
relying as to any matters concerning the Property or the Personal Property,
including, but not limited to, the condition of the land or any improvements
comprising the Property, the existence or non-existence of "Hazardous
Materials" (as hereinafter defined), economic projections or market studies
concerning the Property, any development rights, taxes, bonds, covenants,
conditions and restrictions affecting the Property, water or water rights,
topography, drainage, soil, subsoil of the Property, the utilities serving the
Property or any zoning or building laws, rules or regulations or "Environmental
Laws" (hereinafter defined) affecting the Property. Seller makes no
representation or warranty that the Property complies with Title III of the
Americans with Disabilities Act or any fire code or building code. Purchaser
hereby releases Seller and the Affiliates of Seller from any and all liability
in connection with any claims which Purchaser may have against Seller or the
Affiliates of Seller, and Purchaser hereby agrees not to assert any claims for
contribution, cost recovery or otherwise, against Seller or the Affiliates of
Seller, relating directly or indirectly to the existence of asbestos or
Hazardous Materials on, or environmental conditions of, the Property, whether
known or unknown. As used herein, "Environmental Laws" means all federal,
state and local statutes, codes, regulations, rules, ordinances, orders,
standards, permits, licenses, policies and requirements (including consent
decrees, judicial decisions and administrative orders) relating to the
protection, preservation, remediation or conservation of the environment or
worker health or safety, all as amended or reauthorized, or as hereafter
amended or reauthorized, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.
Section 9601 et seq., the Resource Conservation and Recovery Act of 1976
("RCRA"), 42 U.S.C. Section 6901 et seq., the Emergency Planning and Community
Right-to-Know Act ("Right-to-Know Act"), 42 U.S.C. Section 11001 et seq., the
Clean Air Act ("CAA"), 42 U.S.C. Section 7401 et seq., the Federal Water
Pollution Control Act ("Clean Water Act"), 33 U.S.C. Section 1251 et seq., the
Toxic Substances Control Act ("TSCA"), 15 U.S.C. Section 2601 et seq., the Safe
Drinking Water Act ("Safe Drinking Water Act"), 42 U.S.C. Section 300f et seq.,
the Atomic Energy Act ("AEA"), 42 U.S.C. Section 2011 et seq., the Occupational
Safety and Health Act ("OSHA"), 29 U.S.C. Section 651 et seq., and the
Hazardous Materials Transportation Act (the "Transportation Act"), 49 U.S.C.
Section 1802 et seq. As used herein, "Hazardous Materials" means:
(1) "hazardous substances," as defined by CERCLA; (2) "hazardous wastes," as
defined by RCRA; (3) any radioactive material including, without limitation,
any source, special nuclear or by-product material, as defined by AEA; (4)
asbestos in any form or condition; (5) polychlorinated biphenyls; and (6) any
other material, substance or waste to which liability or standards of conduct
may be imposed under any Environmental Laws. Notwithstanding anything
contained herein to the contrary, the terms of this Paragraph 7.2 shall survive
the Closing and the delivery of the Deed and termination of this Agreement.
7.3. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Except as specifically set forth
herein, Seller makes no representation or warranty that such material is
complete or accurate or that Purchaser will achieve similar financial or other
results with respect to the operations of the Property, it being acknowledged
by Purchaser that Seller's operation of the Property and allocations of
revenues or expenses may be vastly different than Purchaser may be able to
attain. Purchaser acknowledges that it is a sophisticated and experienced
purchaser of real estate and further that Purchaser has relied upon its own
investigation and inquiry with respect to the operation of the Property and
releases Seller and the Affiliates of Seller from any liability with respect to
such historical information. Notwithstanding anything contained herein to the
contrary, the terms of this Paragraph 7.3 shall survive the Closing and the
delivery of the Deed and termination of this Agreement.
7.4. Seller has provided to Purchaser the following existing report:
Phase I Environmental Site Assessment and Limited Asbestos Survey dated January
7, 1992, prepared by Law Associates, Inc. ("Existing Report"). Seller makes
no representation or warranty concerning the accuracy or completeness of the
Existing Report. Purchaser hereby releases Seller and the Affiliates of Seller
from any liability whatsoever with respect to the Existing Report, or,
including, without limitation, the matters set forth in the Existing Report,
and the accuracy and/or completeness of the Existing Report. Furthermore,
Purchaser acknowledges that it will be purchasing the Property with all faults
disclosed in the Existing Report. Notwithstanding anything contained herein to
the contrary, the terms of this Paragraph 7.4 shall survive the Closing and the
delivery of the Deeds and termination of this Agreement.
8. CLOSING.
8.1. The closing of this transaction (the "Closing") shall be on the
later to occur of (i) October 31, 1996, (ii) three (3) business days after
receipt from the Federal Housing Commissioner of written approval to the sale
of the Property and the prepayment of the existing financing encumbering the
Property, or (iii) in the event that Purchaser deposits the Additional Xxxxxxx
Money with the Escrow Agent on or before October 25, 1996, November 29, 1996
(the "Closing Date"), at the office of Title Insurer, Chapel Hill, North
Carolina, at which xxxx Xxxxxx shall deliver possession of the Property to
Purchaser. This transaction shall be closed through an escrow with Title
Insurer, in accordance with the general provisions of the usual and customary
form of deed and money escrow for similar transactions in North Carolina, or at
the option of either party, the Closing shall be a "New York style" closing at
which the Purchaser shall wire the Purchase Price to Title Insurer on the
Closing Date and prior to the release of the Purchase Price to Seller,
Purchaser shall receive the Title Policy or marked up commitment dated the date
of the Closing Date. In the event of a New York style closing, Seller shall
deliver to Title Insurer any customary affidavit in connection with a New York
style closing. All closing and escrow fees shall be divided equally between
the parties hereto. In the event Seller does not receive from the Federal
Housing Commissioner the written approval to the sale of the Property and the
prepayment of the existing financing encumbering the Property on or before
December 31, 1996, this Agreement shall automatically terminate, Purchaser
shall promptly deliver to Seller copies of all studies, reports and other
investigations obtained by Purchaser in connection with its due diligence, the
Xxxxxxx Money deposited by Purchaser shall be immediately paid to Purchaser,
together with any interest earned thereon, and neither Purchaser nor Seller
shall have any right, obligation or liability under this Agreement, except for
Purchaser's obligation to indemnify Seller and restore the Property, as more
fully set forth in Paragraph 7.1.
8.2. The following conditions shall exist at the time of Closing
hereunder, and the obligation of Purchaser to close hereunder shall be
expressly conditioned upon and subject to the satisfaction (or written waiver
by Purchaser) of each such condition:
8.2.1. Each of the representations and warranties made by
Seller in Section 16.2 hereof shall be true and correct in all material
respects on the date of Closing, subject to appropriate modifications of such
representations or warranties permitted under Section 16.3 of this Agreement.
For purposes of this Section, a representative or warranty shall be deemed to
be materially true and correct unless the difference between the representation
and warranty made by Seller and the accurate state of facts existing at Closing
has a material adverse effect on Purchaser and/or the Property.
8.2.2. The Property shall be in the same physical condition
as it was upon the date hereof, subject to normal and usual wear and tear.
If any one or more of the conditions set forth in Section 8.2.1 or 8.2.2
above are not satisfied as of the date specified for Closing hereunder, then
Purchaser shall have the option, in its sole discretion, exercised by written
notice to Seller, to: (i) waive such condition and complete the Closing under
this Contract in accordance with the terms and conditions hereof, without any
reduction or adjustment in the Purchase Price, except as specifically provided
herein; or (ii) terminate this Contract and obtain a refund of its Xxxxxxx
Money and all interest earned thereon, whereupon Seller and Purchaser shall be
thereupon released from all further liability or obligation under this Contract
except with respect to the provisions hereof which are expressly intended to
survive the termination of this Contract for any reason. Notwithstanding
anything contained herein to the contrary, if the status of any of the
tenancies changes from the date of the rent roll attached hereto and the date
of the rent roll delivered at Closing, provided the change in status is not
caused by a breach of the covenant made by Seller pursuant to Paragraph 16.4,
then Purchaser shall not have the right to terminate this Agreement or make any
claim for breach of a representation or warranty hereunder involving the rent
roll or tenancies thereunder.
9. CLOSING DOCUMENTS.
9.1. On or prior to the Closing Date, Seller and Purchaser shall
execute and deliver to one another a joint closing statement. In addition,
Purchaser shall deliver to Seller (i) the balance of the Purchase Price, (ii)
an assumption of the documents set fourth in Paragraph 9.2.3 and 9.2.4, (iii)
if required by the Federal Housing Commissioner, an agreement with the Federal
Housing Commissioner requiring the Property to be maintained as rental housing
until April 1, 1998, (iv) a release in favor of Seller and all Affiliates of
Seller in form reasonably acceptable to Seller from Xxxx Xxxxx and First State
Holdings, Inc. with respect to any claim from anyone claiming by or through
Xxxx Xxxxx or First State Holdings, Inc. for any fee, commission or
compensation on account of this Agreement, its negotiation or the sale hereby
contemplated, and (v) such other documents as may be reasonably required by the
Title Insurer in order to consummate the transaction as set forth in this
Agreement.
9.2. On the Closing Date, Seller shall deliver to Purchaser the
following:
9.2.1. the Deed (in the form of Exhibit E attached hereto),
subject to the Permitted Exceptions and any other exceptions waived by
Purchaser in writing;
9.2.2. a quit claim xxxx of sale conveying the Personal
Property (in the form of Exhibit F attached hereto);
9.2.3. assignment and assumption of intangible property (in the
form attached hereto as Exhibit G), including, without limitation, the service
contracts listed in Exhibit H;
9.2.4. an assignment and assumption of leases and security
deposits (in the form attached hereto as Exhibit I);
9.2.5. non-foreign affidavit (in the form of Exhibit J attached
hereto);
9.2.6. original, and to the extent original not in Seller's
possession, copies of, leases affecting the Property in Seller's possession, to
be delivered at the Property;
9.2.7. all documents and instruments reasonably required by the
Title Insurer to issue the Title Policy;
9.2.8. possession of the Property to Purchaser, including all
appropriate keys, subject to the terms of leases;
9.2.9. evidence of the termination of the management agreement;
9.2.10. notice to the tenants of the Property of the transfer of
title and assumption by Purchaser of the landlord's obligation under the leases
and the obligation to refund the security deposits (in the form of Exhibit K);
9.2.11. an updated rent roll; and,
9.2.12. to the extent in Seller's possession, copies of all
books and records specifically requested by Purchaser, licenses and permits,
and certificates of occupancy, to be delivered at the Property.
10. PURCHASER'S DEFAULT. ALL XXXXXXX MONEY DEPOSITED INTO THE ESCROW IS
TO SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND
UNDERTAKINGS UNDER THIS AGREEMENT. IN THE EVENT OF A DEFAULT OF THE PURCHASER
UNDER THE PROVISIONS OF THIS AGREEMENT, AND IF SELLER HAS NOT DEFAULTED IN ITS
OBLIGATIONS UNDER THIS AGREEMENT, SELLER SHALL RETAIN ALL OF THE XXXXXXX MONEY
AND THE INTEREST THEREON AS SELLER'S SOLE RIGHT TO DAMAGES OR ANY OTHER REMEDY,
EXCEPT FOR PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER AND RESTORE THE PROPERTY
AS SET FORTH IN PARAGRAPH 7.1 HEREOF. THE PARTIES HAVE AGREED THAT SELLER'S
ACTUAL DAMAGES, IN THE EVENT OF A DEFAULT BY PURCHASER, WOULD BE EXTREMELY
DIFFICULT OR IMPRACTICAL TO DETERMINE. THEREFORE, BY PLACING THEIR INITIALS
BELOW, THE PARTIES ACKNOWLEDGE THAT THE XXXXXXX MONEY HAS BEEN AGREED UPON,
AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES.
11. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF ALL XXXXXXX MONEY
TOGETHER WITH ANY INTEREST ACCRUED THEREON, AND THIS AGREEMENT SHALL THEN
BECOME NULL AND VOID AND OF NO EFFECT AND THE PARTIES SHALL HAVE NO FURTHER
LIABILITY TO EACH OTHER AT LAW OR IN EQUITY, EXCEPT FOR PURCHASER'S OBLIGATIONS
TO INDEMNIFY SELLER AND RESTORE THE PROPERTY AS SET FORTH MORE FULLY IN
PARAGRAPH 7. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF
SELLER'S DEFAULT IS ITS WILLFUL REFUSAL TO DELIVER THE CLOSING DOCUMENTS SET
FORTH IN SECTION 9.2 HEREOF, THEN PURCHASER WILL BE ENTITLED TO XXX FOR
SPECIFIC PERFORMANCE.
12. PRORATIONS.
12.1. All Rents (exclusive of delinquent rents, but including
prepaid rents), expenses, taxes, water and sewer rents, or similar charges of
fees, are to be adjusted as of midnight of the day of Closing. Real and
personal property taxes, general and special, are to be adjusted according to
the certificate of taxes issued by the taxing authority, and Purchaser shall
assume charges therefor accruing from and after Closing.
12.2. All contracts and agreements relative to the operation,
servicing and/or maintenance of the Property to be assigned to Purchaser or
terminated (to the extent the term extends beyond the Closing Date) shall be
adjusted between the parties as of midnight of the day of Closing.
12.3. Purchaser shall have no obligation to collect any past-due
rents except that Purchaser shall use commercially reasonable efforts to
collect delinquent rents and promptly reimburse Seller for such past-due rents
when, as and if collected,net of costs of collection. Monies received from
delinquent tenants after Closing by Purchaser shall be applied as follows: (1)
first, pro rata to Purchaser and Seller for the month the Closing takes place;
(2) second, to Purchaser in an amount equal to all rentals due from such
tenants accruing after Closing; (3) third, to costs of collection; and (4)
fourth, to Seller in an amount equal to any remaining unpaid rental arrearages
owed by such tenants to Seller as of the Closing Date.
12.4. At Closing, Seller shall deliver to Purchaser, or make
appropriate adjustments for, all tenant security deposits and the like,
together with statutory or contractual interest owed to tenants, together with
a detailed statement of the security deposits and all such accrued interest
held for the account of each tenant. Purchaser shall receipt for the same and
shall indemnify, defend and save Seller harmless from and against any claims
relating to Purchaser's application or holding of such deposits and interest,
which Seller has delivered or for which an adjustment has been made at
Closing,from and after Closing. Seller shall indemnify, defend and save
Purchaser harmless from and against any claims relating to Seller's application
or holding of such deposits and interest prior to Closing.
13. RECORDING. Neither this Agreement nor a memorandum thereof shall be
recorded and the act of recording by Purchaser shall be an act of default
hereunder by Purchaser and subject to the provisions of Paragraph 10 hereof.
14. ASSIGNMENT. The Purchaser shall not have the right to assign its
interest in this Agreement without the prior written consent of the Seller.
Any assignment or transfer of, or attempt to assign or transfer, Purchaser's
interest in this Agreement shall be an act of default hereunder by Purchaser
and subject to the provisions of Paragraph 10 hereof. Notwithstanding the
foregoing, Purchaser may make one (1) assignment of its interest in this
Agreement without the consent of Seller to any entity affiliated with or
controlled by Purchaser (the "Assignee"), provided that Purchaser remains
liable for and the Assignee assumes the obligations of Purchaser hereunder. If
the Assignee petitions or applies for bankruptcy or Assignee is adjudicated as
a bankrupt or insolvent, or Assignee files any petition, application for relief
or answer-seeking or acquiescing in any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief for
itself under any present or future federal, state or other statute, law, code
or regulation relating to bankruptcy, insolvency, or other relief for debtors
(collectively, a "Bankruptcy Filing") on or before the Closing Date, said
Bankruptcy Filing shall be a default under this Agreement and Purchaser shall
indemnify Seller for all costs, attorney's fees and expenses of Seller
resulting from Seller's efforts to obtain the Xxxxxxx Money as liquidated
damages and to clear title to the Property from any encumbrance resulting from
the Bankruptcy Filing.
15. BROKER. The parties hereto represent and warrant that no broker
commission or finder fee is due and payable in connection with this transaction
other than to CB Commercial Real Estate Group, Inc. (to be paid by Seller).
Seller's commission to CB Commercial Real Estate Group, Inc. shall only be
payable out of the proceeds of the sale of the Property in the event the
transaction set forth herein closes. Purchaser and Seller shall indemnify,
defend and hold the other party hereto harmless from any claim whatsoever
(including without limitation, reasonable attorney's fees, court costs and
costs of appeal) from anyone claiming by or through the indemnifying party any
fee, commission or compensation on account of this Agreement, its negotiation
or the sale hereby contemplated other than to CB Commercial Real Estate Group,
Inc. The indemnifying party shall undertake its obligations set forth in this
Paragraph 15 using attorneys selected by the indemnifying party and reasonably
acceptable to the indemnified party. The provisions of this Paragraph 15 will
survive the Closing and delivery of the Deed.
16. REPRESENTATIONS AND WARRANTIES.
16.1. Any reference herein to Seller's knowledge or notice of any
matter or thing shall only mean such knowledge or notice that has actually been
received by Xxxxxxx Xxxxxxxxx or Xxxx Xxxxxxxx (the "Seller's Representative"),
and any representation or warranty of the Seller is based upon those matters of
which the Seller's Representative has actual knowledge. Any knowledge or
notice given, had or received by any of Seller's agents, servants or employees
shall not be imputed to Seller, the general partner or limited partners of
Seller, the subpartners of the general partner or limited partners of Seller or
Seller's Representative.
16.2. Subject to the limitations set forth in Paragraph 16.1, Seller
hereby makes the following representations and warranties, which
representations and warranties are made to the Seller's knowledge:
16.2.1. Seller has full right, power and authority to enter
into this Agreement. The parties executing this Agreement on behalf of Seller
have full power and authority bind Seller to the obligations of Seller set
forth herein.
16.2.2. Seller is a duly formed, validly existing limited
partnership, and is in good standing under the laws of the State of Illinois.
Seller has obtained all consents and approvals necessary to make this Agreement
binding upon Seller and to permit consummation of the transactions contemplated
herein in accordance with the terms of this Agreement. This Agreement does not
violate the terms of any other contract or instrument to which Seller is a
party or by which Seller or the Property is bound.
16.2.3. Except as disclosed on Exhibit H attached hereto and
incorporated herein by this reference or as may be disclosed on the Purchaser's
Title Commitment, no service, contracts of any kind or description are in
existence with respect to the Property. Seller agrees not to enter into any
other service contracts affecting the Property, except for service contracts
which are terminable on not more than thirty (30) days written notice.
Purchaser shall assume all contracts and agreements in existence with respect
to the Property at Closing, except for those contracts or agreements that are
by their terms terminable without premium or penalty which Purchaser has
expressly instructed Seller, by written notice delivered prior to October 2,
1996 (the "Service Contract Termination Notice"), to terminate at or prior to
the time of Closing hereunder. In the event that Purchaser timely delivers the
Service Contract Termination Notice to Seller in conformity with this Section
16.2, Seller shall deliver notice of termination under the applicable contracts
or agreements to the parties thereto at or prior to the time of Closing
hereunder.
16.2.4. The rent roll attached hereto as Exhibit L is true,
accurate and complete as of the date of said rent roll and reflects any
delinquencies as of the date hereof.
16.2.5. There is not any pending or threatened litigation,
governmental proceeding, judgment or cause of action againSt or related to the
Property.
16.2.6. Seller is not a "foreign person" within the meaning of
the Internal Revenue Code of 1986, as amended to date (the "Code"), and the
transaction contemplated hereby does not constitute a deposition of a U.S. real
property interest by a foreign person. At Closing, Seller shall deliver to
Purchaser an affidavit (the "Section 1445 Affidavit") certifying, under
penalties of perjury, Seller's U.S. taxpayer identification number and that
Seller is not a foreign person.
16.2.7. Seller has received no written notice from any
governmental authority of any uncured violations of any Environmental Laws.
16.2.8. All items of personal property, if any, which are
included in the Property and listed on Exhibit B, are owned by Seller and shall
be owned by Seller on the date of Closing, free and clear of all liens, debts,
charges, and encumbrances of every nature, kind, and description.
16.2.9. Seller has received no written notice from the Federal
Housing Commission or any of Seller's insurance carriers of any uncured
violations of covenants regarding the physical condition of the Property.
16.3. From and after full execution hereof until Closing, Seller
shall notify Purchaser of any events or circumstances arising after the
Effective Date hereof, of which Seller has actual knowledge, and which, if not
disclosed to Purchaser, would render any of the foregoing representations and
warranties untrue in any material way. As to any events or circumstances
arising after the expiration of the Financing Period, within ten (10) days
after receipt of Seller's notice (but no later than the Closing date),
Purchaser shall notify Seller in writing whether Purchaser either: (i) accepts
the modified representation or warranty and will proceed to Closing; or (ii)
elects not to accept the modified representation or warranty and will not
proceed to Closing, whereupon the Xxxxxxx Money shall be refunded to Purchaser,
and the parties shall have not further obligations or liabilities hereunder
except with respect to those provisions hereof that are expressly intended to
survive the termination of this Agreement as set forth herein. The parties
agree that the representations and warranties contained herein shall survive
Closing for a period of sixty (60) days (i.e., the claiming party shall have no
right to make any claims against the other party for a breach of representation
or warranty after the expiration of sixty (60) days immediately following
Closing). Purchaser and Seller are prohibited from making any claims against
the other party hereto after Closing with respect to any breaches of the other
party's representations and warranties contained in this Agreement that the
claiming party had actual knowledge of prior to Closing.
16.4. Seller covenants to operate and manage the Property in the
same manner that it has managed, maintained and operated the Property during
the period of Seller's ownership, subject to reasonable wear and tear and
casualty. Seller shall not enter into any leases for units in the Property for
rents less than Seller is currently charging for comparable units in the
Property.
16.5. Purchaser makes the following representations and warranties
to Seller, each of which shall be true and correct on the date of execution
hereof (except as otherwise specifically provided) and on the date of Closing:
16.5.1. Purchaser is a duly formed, validly existing limited
partnership, and is in good standing under the laws of the State of Maryland.
16.5.2. Purchaser has full right, power and authority to enter
into this Agreement, and this Agreement has been duly authorized by all
appropriate action of Purchaser. The parties executing this Agreement on
behalf of Purchaser have full power and authority to bind Purchaser to the
obligations of Purchaser set forth herein, and upon execution and delivery of
this Agreement, all closing documents executed by Purchaser will constitute
valid and binding instruments of Purchaser enforceable against Purchaser in
accordance with their terms.
16.5.3. The entry into and performance of Purchaser's
obligations under this Agreement will not violate or result in a breach of any
contract or agreement by which Purchaser is bound.
16.5.4. There is no litigation or injunctive action or
proceeding pending or, to the best of Purchaser's knowledge, threatened against
Purchaser which would prevent the performance of Purchaser's obligations under
this Agreement at Closing.
16.5.5. All actions and consents necessary have been taken or
obtained to authorize Purchaser to enter into this Agreement and to perform the
transaction contemplated herein.
16.6. From and after full execution hereof until Closing, Purchaser
shall notify Seller of any events or circumstances arising after the Effective
Date hereof, which, if not disclosed to Seller, would render any of the
foregoing representations and warranties untrue in any material way. As to any
events or circumstances arising after the expiration of the Financing Period,
within ten (10) days after receipt of Purchaser's notice (but no later than the
Closing date), Seller shall notify Purchaser in writing whether Seller either:
(i) accepts the modified representation or warranty and will proceed to
Closing; or (ii) elects not to accept the modified representation or warranty
and not to proceed to Closing, whereupon Seller shall have the right to
terminate this Agreement, the Xxxxxxx Money shall be refunded to Purchaser, and
the parties shall have not further obligations or liabilities hereunder except
with respect to those provisions hereof that are expressly intended to survive
the termination of this Contract as set forth herein.
17. LIMITATION OF LIABILITY. No Affiliate of Seller, nor any of Seller's
respective beneficiaries, shareholders, partners, officers, directors, agents
or employees, heirs, successors or assigns shall have any personal liability of
any kind or nature for or by reason of any matter or thing whatsoever under, in
connection with, arising out of or in any way related to this Agreement and the
transactions contemplated herein, and Purchaser hereby waives for itself and
anyone who may claim by, through or under Purchaser any and all rights to xxx
or recover on account of any such alleged personal liability.
18. TIME OF ESSENCE. Time is of the essence of this Agreement.
19. NOTICES. Any notice or demand which either party hereto is required
or may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by overnight courier
such as Federal Express, by facsimile transmission or made by United States
registered or certified mail addressed as follows:
TO SELLER: x/x Xxx Xxxxxx Xxxxxxx
Xxxxxxxxxxx Xxxx Xxxxxx Xxxxx
0000 Xxxxxxxx Xxxx
Xxxxx X-000
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxx
with copies to: The Balcor Company
Bannockburn Lake Office Plaza
0000 Xxxxxxxx Xxxx
Xxxxx X-000
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxx
(000) 000-0000
(000) 000-0000 (FAX)
and to: Xxxxxx Xxxxxx & Xxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
(000) 000-0000
(000) 000-0000 (FAX)
TO PURCHASER: c/o Tarheel Investments, LLC
c/o The Goldstar Group
0000 Xxxx-Xxxx Xxxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxxx
(000) 000-0000
(000) 000-0000 (FAX)
and one copy to: David, Hagner, Xxxxx & Xxxxxx, P.C.
0000 00xx Xxxxxx, XX #000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxxxx X. Xxx, Esq.
(000) 000-0000
(000) 000-0000 (FAX)
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be
deemed to be delivered or made on the next business day if sent by overnight
courier, or the same day as given if sent by facsimile transmission and
received by 5:00 p.m. Chicago time or on the 4th business day after the same is
deposited in the United States Mail as registered or certified matter,
addressed as above provided, with postage thereon fully prepaid. Any such
notice, demand or document not given, delivered or made by registered or
certified mail, by overnight courier or by facsimile transmission as aforesaid
shall be deemed to be given, delivered or made upon receipt of the same by the
party to whom the same is to be given, delivered or made. Copies of all
notices shall be served upon the Escrow Agent.
20. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute
two (2) copies of this Agreement and three (3) copies of the Escrow Agreement
and forward them to Seller for execution, accompanied with the Xxxxxxx Money
payable to the Escrow Agent set forth in the Escrow Agreement. Seller will
forward one (1) copy of the executed Agreement to Purchaser and will forward
the following to the Escrow Agent:
(A) Xxxxxxx Money;
(B) One (1) fully executed copy of this Agreement; and
(C) Three (3) copies of the Escrow Agreement signed by the parties with a
direction to execute two (2) copies of the Escrow Agreement and deliver a fully
executed copy to each of the Purchaser and the Seller.
21. GOVERNING LAW. The provisions of this Agreement shall be governed by
the laws of the State of North Carolina, except that with respect to the
retainage of the Xxxxxxx Money as liquidated damages the laws of the State of
Illinois shall govern.
22. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all other negotiations, understandings and
representations made by and between the parties and the agents, servants and
employees.
23. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
24. CAPTIONS. Paragraph titles or captions contained herein are inserted
as a matter of convenience and for reference, and in no way define, limit,
extend or describe the scope of this Agreement or any provision hereof.
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date first set forth above.
PURCHASER:
COLONY APARTMENTS CHAPEL HILL
LIMITED PARTNERSHIP, a Maryland limited
partnership
By: TARHEEL INVESTMENTS, LLC,
A Maryland limited liability company
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxxx
---------------------------------
Its: Managing Member
---------------------------------
SELLER:
COLONY LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Colony Partners, Inc., an Illinois
corporation, its general partner
By: /s/ Xxxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxxxx
----------------------------------
Its: Authorized Representative
----------------------------------
_________________ of CB Commercial Real Estate Group, Inc. ("Seller's Broker")
executed this Agreement in its capacity as a real estate broker and
acknowledges that the fee or commission due it from Seller as a result of the
transaction described in this Agreement is as set forth in that certain Listing
Agreement, dated __, 199_ between Seller and Seller's Broker (the "Listing
Agreement"). Seller's Broker also acknowledges that payment of the aforesaid
fee or commission is conditioned upon the Closing and the receipt of the
Purchase Price by the Seller. Seller's Broker agrees to deliver a receipt to
the Seller at the Closing for the fee or commission due Seller's Broker and a
release, in the appropriate form, stating that no other fees or commissions are
due to it from Seller or Purchaser.
CB COMMERCIAL REAL ESTATE GROUP, INC.
By:
-------------------------------------
Name:
-------------------------------------
Its:
-------------------------------------
Exhibits
A - Legal
B - Personal Property
C - Escrow Agreement
D - Intentionally Deleted
E - Deed
F - Xxxx of Sale
G - Assignment and Assumption of Intangible Property
H - Service Contracts
I - Assignment and Assumption of Leases and Security Deposits
J - Non-Foreign Affidavit
K - Notice to Tenants
L - Rent Roll