AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), is entered into as of the 20th
day of January, 1997, by and between Cornerstone Realty Group Incorporated, a
Virginia corporation ("Purchaser"), and Northgate Drive Limited Partnership, an
Illinois limited partnership ("Seller").
W I T N E S S E T H:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to sell
at the price of NINE MILLION SEVEN HUNDRED EIGHTY-FIVE THOUSAND ONE HUNDRED
TWENTY-FOUR AND NO/100 Dollars ($9,785,124.00) (the "Purchase Price"), that
certain property commonly known as Xxxxx Xxxxx X Xxxxxxxxxx, Xxxxxx, Xxxxx,
legally described on Exhibit A attached hereto and consisting of 296 units (the
"Property"). Included in the Purchase Price is all of the personal property
set forth on Exhibit B attached hereto (the "Personal Property").
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as follows:
2.1. Upon the execution of this Agreement, the sum of SEVENTY-FIVE
THOUSAND AND NO/100 Dollars ($75,000.00) (the "Xxxxxxx Money") to be held in
escrow by and in accordance with the provisions of the Escrow Agreement
("Escrow Agreement") attached hereto as Exhibit C; and
2.2. 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 12:00 p.m Chicago time.
3. TITLE COMMITMENT AND SURVEY.
3.1. Attached hereto as Exhibit D is a copy of a title commitment for an
owner's standard title insurance policy issued by Chicago Title Insurance
Company (hereinafter referred to as "Title Insurer") dated September 9, 1996
for the Property (the "Title Commitment"). For purposes of this Agreement,
"Permitted Exceptions" shall mean: (a) the general printed exceptions contained
in the standard title policy to be issued by Title Insurer based on the Title
Commitment; (b) general real estate taxes, association assessments, special
district taxes and related charges not yet due and payable; (c) matters shown
on the "Existing Survey" (hereinafter defined); (d) matters caused by the
actions of Purchaser; and (e) the title exceptions set forth in Schedule B of
the Title Commitment as Numbers 9(B) through 9(N) inclusive, to the extent that
same effect the Property. All other exceptions to title shall be referred to
as "Unpermitted Exceptions". The Title Commitment shall be conclusive evidence
of good title as therein shown as to all matters to be insured by the title
policy, subject only to the exceptions therein stated. On the Closing Date,
Title Insurer shall deliver to Purchaser a standard title policy in conformance
with the previously delivered Title Commitment, subject to Permitted Exceptions
and Unpermitted Exceptions waived by Purchaser (the "Title Policy"). Seller
shall pay for all of the costs of the Title Commitment and Title Policy and
Purchaser shall pay the cost of any endorsements to, or extended coverage on,
the Title Policy.
3.2. Purchaser has received a survey of the Property prepared by Landmark
Associates, dated May 1, 1996 (the "Existing Survey"). Seller shall pay for
the costs of the Existing Survey and updating the Existing Survey and Seller
shall deliver the updated survey (the "Updated Survey") to Purchaser prior to
Closing. Purchaser hereby acknowledges that all matters disclosed by the
Existing Survey are acceptable to Purchaser.
3.3. The obligation of Purchaser to pay various costs set forth in
Paragraphs 3.1 and 3.2 shall survive the termination of this Agreement.
4. PAYMENT OF CLOSING COSTS.
4.1. Seller shall pay for the costs of the documentary or transfer stamps
to be paid with reference to the "Deed" (hereinafter defined) and Purchaser
shall pay, the costs of all other stamps, intangible, 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 except the cost of the
Title Commitment and Title Policy as referenced in Paragraph 3.1.
5. CONDITION OF TITLE.
5.1. If, prior to "Closing" (as hereinafter defined), a date-down to the
Title Commitment or the Updated Survey discloses any new Unpermitted Exception,
Seller shall have thirty (30) days from the date of the date-down to the Title
Commitment or the Updated Survey, as applicable, at Seller's expense, to (i)
bond over, cure and/or have any Unpermitted Exceptions which, in the aggregate,
do not exceed $100,000.00 (a "Minor Unpermitted Exception"), removed from the
Title Commitment or to have the Title Insurer commit to insure against loss or
damage that may be occasioned by such Unpermitted Exceptions, or (ii) have the
right, but not the obligation, to bond over, cure and/or have any Unpermitted
Exceptions which, in the aggregate, equal or exceed $100,000.00, removed from
the Title Commitment or to have the Title Insurer commit to insure against loss
or damage that may be occasioned by such Unpermitted Exceptions. In such
event, the time of Closing shall be delayed, if necessary, to give effect to
said aforementioned time periods. If Seller fails to cure or have said
Unpermitted Exception removed or have the Title Insurer commit to insure as
specified above within said thirty (30) day period or if Seller elects not to
exercise its rights under (ii) in the preceding sentence, Purchaser may
terminate this Agreement upon notice to Seller within seven (7) days after the
expiration of said thirty (30) day period provided, however, and
notwithstanding anything contained herein to the contrary, if the Unpermitted
Exception which gives rise to Purchaser's right to terminate was recorded
against the Property as a result of the affirmative, willful action of Seller
(and not by any unrelated third party) with the intention to prevent the sale
of the Property in accordance with the terms hereof or if Seller is able to
bond over, cure or remove a Minor Unpermitted Exception for a cost not to
exceed $100,000 or the Title Insurer is willing to insure over a Minor
Unpermitted Exception for a cost not to exceed $100,000 in accordance with the
terms hereof and Seller fails to expend said funds in either case, then
Purchaser shall have the additional rights contained in Paragraph 11 herein.
Absent notice from Purchaser to Seller in accordance with the preceding
sentence, Purchaser shall be deemed to have elected to take title subject to
said Unpermitted Exception. If Purchaser terminates this Agreement in
accordance with the terms of this Paragraph 5.1, this Agreement shall become
null and void without further action of the parties and all Xxxxxxx Money
theretofore deposited into the escrow by Purchaser together with any interest
accrued thereon, shall be returned to Purchaser, and neither party shall have
any further liability to the other, except for Purchaser's obligation to
indemnify Seller and restore the Property, as more fully set forth in
Paragraph 7.
5.2. Seller agrees to convey fee simple title to the Property to
Purchaser by special warranty deed (the "Deed") in recordable form subject only
to the Permitted Exceptions and any Unpermitted Exceptions waived by Purchaser.
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
6.1. Except as provided in the indemnity provisions contained in
Paragraph 7.1 of this Agreement, Seller shall bear all risk of loss with
respect to the Property up to the earlier of the dates upon which either
possession or title is transferred to Purchaser in accordance with this
Agreement. Notwithstanding the foregoing, in the event of damage to the
Property by fire or other casualty prior to the Closing Date, repair of which
would cost less than or equal to $100,000.00 (as determined by Seller's
insurance adjuster) Purchaser shall not have the right to terminate its
obligations under this Agreement by reason thereof, but Seller shall have the
right to elect to either repair and restore the Property (in which case the
Closing Date shall be extended until completion of such restoration) or to
assign and transfer to Purchaser on the Closing Date all of Seller's right,
title and interest in and to all insurance proceeds paid or payable to Seller
on account of such fire or casualty, including proceeds of loss of rent
insurance for any period of time arising after the Closing Date, and Seller
shall pay to Purchaser at the Closing the amount of Seller's insurance
deductible. Within ten (10) days of such an occurrence, Seller shall 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's
insurance adjuster), 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 seven (7) 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, including
proceeds of loss of rent insurance for any period of time arising after the
Closing Date, and Seller shall pay to Purchaser at the Closing the amount of
Seller's insurance deductible.
6.2. If between the date of this Agreement and the Closing Date, any
condemnation or eminent domain proceedings are initiated which 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) 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; or (iii) and adversely impair the use of the Property as it is
currently being operated (hereinafter collectively referred to as a "Material
Event"), Purchaser may:
6.2.1. terminate this Agreement by written notice to Seller, in
which event the Xxxxxxx Money deposited by Purchaser, together with interest
thereon, shall be returned to Purchaser and all rights and obligations of the
parties hereunder with respect to the closing of this transaction will cease;
or
6.2.2. proceed with the Closing, in which event Seller shall assign
to Purchaser all of Seller's right, title and interest in and to any award made
in connection with such condemnation or eminent domain proceedings.
6.3. Purchaser shall then notify Seller, within seven (7) 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 seven (7) 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 December 26, 1996 and ending at 5:00
p.m. Chicago time on January 21, 1997 (said period being herein referred to as
the "Inspection Period"), Purchaser and the agents, engineers, employees,
contractors and surveyors retained by Purchaser may enter upon the Property, at
any reasonable time and upon reasonable prior notice to Seller, to inspect the
Property, including a review of leases located at the Property, and to conduct
and prepare such studies, tests and surveys as Purchaser may deem reasonably
necessary and appropriate. In connection with Purchaser's review of the
Property, Seller agrees to deliver to Purchaser copies of the current rent roll
for the Property, the most recent tax and insurance bills, utility account
numbers and service contracts.
All of the foregoing tests, investigations and studies to be conducted
under this Paragraph 7.1 by Purchaser shall be at Purchaser's sole cost and
expense and Purchaser shall restore the Property to the condition existing
prior to the performance of such tests or investigations by or on behalf of
Purchaser. Purchaser shall defend, indemnify and hold Seller and any
affiliate, parent of Seller, and all shareholders, employees, officers and
directors of Seller or Seller's affiliate or parent (hereinafter collectively
referred to as "Affiliate of Seller") harmless from any and all liability, cost
and expense (including without limitation, reasonable attorney's fees, court
costs and costs of appeal) suffered or incurred by Seller or Affiliates of
Seller for injury to persons or property caused by Purchaser's investigations
and inspection of the Property. Seller shall notify Purchaser if Seller
receives written notice of threatened, or actually instituted claims, for
injury to persons or property caused by Purchaser's investigations and
inspection of the Property. Purchaser shall undertake its obligation to defend
set forth in the preceding sentence using attorneys selected by Seller, in
Seller's sole discretion.
Prior to commencing any such tests, studies and investigations, Purchaser
shall furnish to Seller a certificate of insurance evidencing comprehensive
general public liability insurance insuring the person, firm or entity
performing such tests, studies and investigations and listing Seller and
Purchaser as additional insureds thereunder.
If Purchaser is dissatisfied with the results of the tests, studies or
investigations performed or information received pursuant to this Paragraph
7.1, Purchaser shall have the right to terminate this Agreement by giving
written notice of such termination to Seller at any time prior to the
expiration of the Inspection Period. If written notice is not received by
Seller pursuant to this Paragraph 7.1 prior to the expiration of the Inspection
Period, then the right of Purchaser to terminate this Agreement pursuant to
this Paragraph 7.1 shall be waived. If Purchaser terminates this Agreement by
written notice to Seller prior to the expiration of the Inspection Period: (i)
Purchaser shall promptly deliver to Seller copies of all studies, reports and
other investigations obtained by Purchaser in connection with its due diligence
during the Inspection Period; and (ii) the Xxxxxxx Money deposited by Purchaser
shall be immediately paid to Purchaser, together with any interest earned
thereon, and neither Purchaser nor Seller shall have any right, obligation or
liability under this Agreement, except for Purchaser's obligation to indemnify
Seller and restore the Property, as more fully set forth in this Paragraph 7.1.
Notwithstanding anything contained herein to the contrary, the terms of this
Paragraph 7.1, shall survive the Closing and the delivery of the Deed and
termination of this Agreement.
7.2. Purchaser acknowledges and agrees that it will be purchasing the
Property and the Personal Property based solely upon its inspections and
investigations of the Property and the Personal Property, and that Purchaser
will be purchasing the Property and the Personal Property "AS IS" and "WITH ALL
FAULTS", based upon the condition of the Property and the Personal Property as
of the date of this Agreement, wear and tear and loss by fire or other casualty
or condemnation excepted. Without limiting the foregoing, Purchaser
acknowledges that, except as may otherwise be specifically set forth elsewhere
in this Agreement, neither Seller nor its consultants, brokers or agents have
made any representations or warranties of any kind upon which Purchaser is
relying as to any matters concerning the Property or the Personal Property,
including, but not limited to, the condition of the land or any improvements
comprising the Property, the existence or non-existence of "Hazardous
Materials" (as hereinafter defined), economic projections or market studies
concerning the Property, any development rights, taxes, bonds, covenants,
conditions and restrictions affecting the Property, water or water rights,
topography, drainage, soil, subsoil of the Property, the utilities serving the
Property or any zoning or building laws, rules or regulations or "Environmental
Laws" (hereinafter defined) affecting the Property. Seller makes no
representation or warranty that the Property complies with Title III of the
Americans with Disabilities Act or any fire code or building code. Purchaser
hereby releases Seller and the Affiliates of Seller from any and all liability
in connection with any claims which Purchaser may have against Seller or the
Affiliates of Seller, and Purchaser hereby agrees not to assert any claims for
contribution, cost recovery or otherwise, against Seller or the Affiliates of
Seller, relating directly or indirectly to the existence of asbestos or
Hazardous Materials on, or environmental conditions of, the Property, whether
known or unknown. As used herein, "Environmental Laws" means all federal,
state and local statutes, codes, regulations, rules, ordinances, orders,
standards, permits, licenses, policies and requirements (including consent
decrees, judicial decisions and administrative orders) relating to the
protection, preservation, remediation or conservation of the environment or
worker health or safety, all as amended or reauthorized, or as hereafter
amended or reauthorized, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.
Section 9601 et seq., the Resource Conservation and Recovery Act of 1976
("RCRA"), 42 U.S.C. Section 6901 et seq., the Emergency Planning and Community
Right-to-Know Act ("Right-to-Know Act"), 42 U.S.C. Section 11001 et seq., the
Clean Air Act ("CAA"), 42 U.S.C. Section 7401 et seq., the Federal Water
Pollution Control Act ("Clean Water Act"), 33 U.S.C. Section 1251 et seq., the
Toxic Substances Control Act ("TSCA"), 15 U.S.C. Section 2601 et seq., the Safe
Drinking Water Act ("Safe Drinking Water Act"), 42 U.S.C. Section 300f et seq.,
the Atomic Energy Act ("AEA"), 42 U.S.C. Section 2011 et seq., the Occupational
Safety and Health Act ("OSHA"), 29 U.S.C. Section 651 et seq., and the
Hazardous Materials Transportation Act (the "Transportation Act"), 49 U.S.C.
Section 1802 et seq. As used herein, "Hazardous Materials" means:
(1) "hazardous substances," as defined by CERCLA; (2) "hazardous wastes," as
defined by RCRA; (3) any radioactive material including, without limitation,
any source, special nuclear or by-product material, as defined by AEA; (4)
asbestos in any form or condition; (5) polychlorinated biphenyls; and (6) any
other material, substance or waste to which liability or standards of conduct
may be imposed under any Environmental Laws. Notwithstanding anything
contained herein to the contrary, Purchaser's obligations, as more fully set
forth in 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. 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, Purchaser's obligations, as more
fully set forth in 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 Assessment prepared by Gaiatech Incorporated, Report No.
1688-60, May 24, 1996 ("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, Purchaser's obligations, as more fully set forth in this Paragraph
7.4 shall survive the Closing and the delivery of the Deeds and termination of
this Agreement.
8. CLOSING.
The closing of this transaction (the "Closing") shall be on January 29,
1997 (the "Closing Date"), at the office of Title Insurer, Irving, Texas, 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.
9. CLOSING DOCUMENTS.
9.1. On the Closing Date, Seller and Purchaser shall execute and deliver
to one another a joint closing statement. In addition, Purchaser shall deliver
to Seller the balance of the Purchase Price, an assumption of the documents set
forth in Paragraph 9.2.3 and 9.2.4 and such other documents as may be
reasonably required by the Title Insurer in order to consummate the transaction
as set forth in this Agreement.
9.2. On the Closing Date, Seller shall deliver to Purchaser the
following:
9.2.1. the Deed (in the form of Exhibit E attached hereto),
subject to Permitted Exceptions and those Unpermitted Exceptions waived by
Purchaser;
9.2.2. a xxxx of sale conveying the Personal Property (in the
form of Exhibit F attached hereto);
9.2.3. assignment and assumption of intangible property (in the form
attached hereto as Exhibit G), including, without limitation, the service
contracts listed in Exhibit H;
9.2.4. an assignment and assumption of leases and security deposits
(in the form attached hereto as Exhibit I);
9.2.5. non-foreign affidavit (in the form of Exhibit J attached
hereto);
9.2.6. original, and/or copies of, leases affecting the Property in
Seller's possession;
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;
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);
and
9.2.11. a certified updated rent roll.
10. DEFAULT BY PURCHASER. ALL XXXXXXX MONEY DEPOSITED INTO THE ESCROW IS TO
SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND UNDERTAKINGS
UNDER THIS AGREEMENT. IN THE EVENT OF A DEFAULT OF THE PURCHASER UNDER THE
PROVISIONS OF THIS AGREEMENT, SELLER SHALL RETAIN ALL OF THE XXXXXXX MONEY AND
THE INTEREST THEREON AS SELLER'S SOLE RIGHT TO DAMAGES OR ANY OTHER REMEDY,
EXCEPT FOR PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER AND RESTORE THE PROPERTY
AS SET FORTH IN PARAGRAPH 7.1 HEREOF. THE PARTIES HAVE AGREED THAT SELLER'S
ACTUAL DAMAGES, IN THE EVENT OF A DEFAULT BY PURCHASER, WOULD BE EXTREMELY
DIFFICULT OR IMPRACTICAL TO DETERMINE. THEREFORE, BY PLACING THEIR INITIALS
BELOW, THE PARTIES ACKNOWLEDGE THAT THE XXXXXXX MONEY HAS BEEN AGREED UPON,
AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES.
PURCHASER AND SELLER AGREE THAT A DEFAULT BY PURCHASER UNDER ANY OF THE
TERMS OR CONDITIONS OF THE COMPANION CONTRACT (AS HEREINAFTER DEFINED) SHALL BE
DEEMED A DEFAULT OF PURCHASER UNDER THIS AGREEMENT. IN ADDITION, PURCHASER AND
SELLER AGREE THAT A DEFAULT BY PURCHASER UNDER THIS AGREEMENT SHALL BE DEEMED A
DEFAULT OF PURCHASER UNDER THE COMPANION CONTRACT. IF THE TRANSACTION
CONTEMPLATED BY THE COMPANION CONTRACT FAILS TO CLOSE FOR ANY REASON
WHATSOEVER, PURCHASER SHALL NOT BE ENTITLED TO ANY RIGHTS OF SETOFF UNDER THIS
AGREEMENT IN CONNECTION WITH ANY LIABILITY ARISING UNDER THE COMPANION
CONTRACT.
11. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF ALL XXXXXXX MONEY
TOGETHER WITH ANY INTEREST ACCRUED THEREON, AND THIS AGREEMENT SHALL THEN
BECOME NULL AND VOID AND OF NO EFFECT AND THE PARTIES SHALL HAVE NO FURTHER
LIABILITY TO EACH OTHER AT LAW OR IN EQUITY, EXCEPT FOR PURCHASER'S OBLIGATIONS
TO INDEMNIFY SELLER AND RESTORE THE PROPERTY AS SET FORTH MORE FULLY IN
PARAGRAPH 7 AND PURCHASER'S RIGHT TO RECEIVE FROM SELLER ITS ACTUAL, DOCUMENTED
THIRD PARTY EXPENSES INCURRED IN THE PERFORMANCE OF ITS DUE DILIGENCE HEREUNDER
AND THE PREPARATION OF THIS AGREEMENT, NOT TO EXCEED $25,000. NOTWITHSTANDING
ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF SELLER'S DEFAULT IS (I) ITS (AND
NOT AN UNRELATED THIRD PARTY'S) AFFIRMATIVE, WILLFUL ACTION WHICH RESULTS IN
THE RECORDING OF AN ENCUMBRANCE AGAINST THE PROPERTY WITH THE INTENTION TO
PREVENT THE SALE OF THE PROPERTY IN ACCORDANCE WITH THE TERMS HEREOF AND WHICH
GIVES RISE TO PURCHASER'S RIGHT TO TERMINATE THIS AGREEMENT PURSUANT TO
PARAGRAPH 5 HEREOF; (II) ITS FAILURE TO EXPEND UP TO $100,000 IF (A) SELLER IS
ABLE TO BOND OVER, CURE OR REMOVE A MINOR UNPERMITTED EXCEPTION FOR A COST NOT
TO EXCEED $100,000 OR (B) THE TITLE INSURER IS WILLING TO INSURE OVER A MINOR
UNPERMITTED EXCEPTION FOR A COST NOT TO EXCEED $100,000 IN ACCORDANCE WITH THE
TERMS HEREOF OR (III) ITS WILLFUL REFUSAL TO DELIVER THE DEED, THEN PURCHASER
WILL BE ENTITLED TO XXX FOR SPECIFIC PERFORMANCE.
PURCHASER AND SELLER AGREE THAT A DEFAULT BY IRVING ASSOCIATES, AN
ILLINOIS LIMITED PARTNERSHIP, UNDER ANY OF THE TERMS OR CONDITIONS OF THE
COMPANION CONTRACT SHALL BE DEEMED A DEFAULT OF SELLER UNDER THIS AGREEMENT.
IN ADDITION, SELLER AND PURCHASER AGREE THAT A DEFAULT BY SELLER UNDER THIS
AGREEMENT SHALL BE DEEMED A DEFAULT OF IRVING ASSOCIATES UNDER THE COMPANION
CONTRACT.
12. PRORATIONS.
12.1. Rents (exclusive of delinquent rents, but including prepaid rents);
refundable security deposits (which will be assigned to and assumed by
Purchaser and credited to Purchaser at Closing); water and other utility
charges; fuels; prepaid operating expenses; incentive fees paid pursuant to any
laundry contract; provided, however, such fee shall only be prorated if
actually received by Seller and only to the extent any fee was not used to
improve the laundry facilities at the Property; real and personal property
taxes and other similar items shall be adjusted ratably as of 11:59 p.m. on the
Closing Date, and credited to the balance of the cash due at Closing.
Assessments payable in installments which are due subsequent to the Closing
Date shall be paid by Purchaser. If the amount of any of the items to be
prorated is not then ascertainable, the adjustments thereof shall be on the
basis of the most recent ascertainable data. All prorations will be final
except as to delinquent rent referred to in Paragraph 12.2 below.
12.2. All basic rent paid following the Closing Date by any tenant of the
Property who is indebted under a lease for basic rent for any period prior to
and including the Closing Date shall be deemed a "Post-Closing Receipt" until
such time as all such indebtedness is paid in full. Within ten (10) days
following each receipt by Purchaser of a Post-Closing Receipt, Purchaser shall
pay such Post-Closing Receipt to Seller. Purchaser shall use its best efforts
to collect all amounts which, upon collection, would constitute Post-Closing
Receipts hereunder. Within 120 days after the Closing Date, Purchaser shall
deliver to Seller a reconciliation statement of Post-Closing Receipts through
the first 90 days after the Closing Date. Upon the delivery of the
Post-Closing Receipts reconciliation, Purchaser shall deliver to Seller any
Post-Closing Receipts owing to Seller and not previously delivered to Seller in
accordance with the terms hereof. Seller retains the right to conduct an
audit, at reasonable times and upon reasonable notice, of Purchaser's books and
records to verify the accuracy of the Post-Closing Receipts reconciliation
statement and upon the verification of additional funds owing to Seller,
Purchaser shall pay to Seller said additional Post-Closing Receipts and the
cost of performing Seller's audit. Paragraph 12.2 of this Agreement shall
survive the Closing and the delivery and recording of the deed.
13. RECORDING. Neither this Agreement nor a memorandum thereof shall be
recorded and the act of recording by Purchaser shall be an act of default
hereunder by Purchaser and subject to the provisions of Paragraph 10 hereof.
14. ASSIGNMENT. The Purchaser shall not have the right to assign its interest
in this Agreement without the prior written consent of the Seller. Any
assignment or transfer of, or attempt to assign or transfer, Purchaser's
interest in this Agreement shall be an act of default hereunder by Purchaser
and subject to the provisions of Paragraph 10 hereof. Notwithstanding the
foregoing, Purchaser may assign its interest in this Agreement without the
consent of Seller to Apple Residential Trust Inc. provided that Purchaser
remains liable for and the assignee assumes the obligations of Purchaser
hereunder.
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 Xxxxxxx & Xxxxxxxxx of Texas, Inc. (to be paid by Seller).
Seller's commission to Xxxxxxx & Wakefield of Texas, 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 Xxxxxxx & Xxxxxxxxx of Texas, 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 Xxxxxxxxx Xxxxxxxxx (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 Seller's knowledge and which shall,
subject to Paragraph 16.4, be remade at Closing: (i) Seller has no knowledge
of any pending or threatened litigation, claim, cause of action or
administrative proceeding concerning the Property; (ii) Seller has the power to
execute this Agreement and consummate the transactions contemplated herein;
(iii) the rent roll (which includes a list of actual security deposits)
attached hereto as Exhibit L which Seller will update as of the Closing Date is
accurate as of the date set forth thereon; (iv) Seller has not received written
notice from any governmental agency that the Property is in violation of any
government statute or regulation; (v) except as may be set forth in the
Existing Report, Seller has not received any notice from any governmental
authority having jurisdiction over the Property of any uncured violation of any
Environmental Law with respect to the Property; and (vi) except as may be set
forth on the rent roll, Seller has not delivered any coupons or similar items
to any of the tenants at the Property which would allow any such tenant to
remit to the owner of the Property following the Closing such coupon or similar
item in complete or partial satisfaction of said tenant's monthly rental
obligation.
16.3. Purchaser hereby represents and warrants to Seller that
Purchaser has the full right, power and authority to execute this Agreement and
consummate the transactions contemplated herein.
16.4. If at any time after the execution of this Agreement, either
Purchaser or Seller become aware of information which makes a representation
and warranty contained in this Agreement to become untrue in any material
respect, said party shall promptly disclose said information to the other party
hereto. Provided the party making the representation or warranty did not take
any deliberate actions to cause the representation or warranty in question to
become untrue in any material respect, said party shall not be in default under
this Agreement and the sole remedy of the other party shall be to terminate
this Agreement. 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 Seller's covenants contained
in Article 16 herein, then Purchaser shall not have the right to terminate this
Agreement or make any claim for a breach of a representation or warranty
hereunder involving the rent roll or tenancies thereunder. Purchaser and
Seller are prohibited from making any claims against the other party hereto
after the Closing with respect to any breaches of the other party's
representations and warranties contained in this Agreement that the claiming
party has actual knowledge of prior to the Closing.
16.5. The parties agree that the representations 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
a representation or warranty after the expiration of sixty (60) days
immediately following Closing).
16.6. 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.
17. LIMITATION OF LIABILITY. Neither Seller, nor any of its respective
beneficiaries, shareholders, partners, officers, 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 X. Xxxxxxxxx
(000) 000-0000
(000) 000-0000 (FAX)
and to: Xxxxxx Xxxxxx & Zavis
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
(000) 000-0000
(000) 000-0000 (FAX)
TO PURCHASER: Cornerstone Realty Group Incorporated
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxx Xxxxxxxx and Xx. Xxx Xxxxxxx
(000) 000-0000
(000) 000-0000 (FAX)
and one copy to: Xxxxxxxxxx & Taubenfeld
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxxx, Esq.
(000) 000-0000
(000) 000-0000 (FAX)
and one copy to: Xxxxx XxXxxxxxx & Oaks Xxxxxxxx
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, 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 Texas, except that with respect to the retainage of the
Xxxxxxx Money as liquidated damages the laws of the State of Illinois shall
govern.
22. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties and supersedes all other negotiations, understandings and
representations made by and between the parties and the agents, servants and
employees.
23. COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.
24. CAPTIONS. Paragraph titles or captions contained herein are inserted as a
matter of convenience and for reference, and in no way define, limit, extend or
describe the scope of this Agreement or any provision hereof.
25. AUDIT. Seller will make available to Purchaser such books, accounts and
records necessary for Purchaser to conduct an audit of the Property's preceding
fiscal year. This audit will be conducted solely at Purchaser's expense for
the purpose of satisfying its requirements as a publicly held entity. Seller
agrees to execute and deliver a disclosure letter prepared by the auditors of
Purchaser in substantially the form attached hereto as Exhibit M. The terms of
this Paragraph 25 shall survive the Closing for a period of one (1) year from
the Closing Date.
26. LITIGATION COSTS. In the event of any action or proceeding at law or in
equity between Seller and Purchaser to enforce any provision of this Agreement
or to protect or establish any right or remedy of either party hereunder, the
unsuccessful party to such litigation shall pay the prevailing party all
litigation costs and expenses, including reasonable attorneys' fees incurred
therein by such prevailing party, and if such prevailing party shall recover
judgment in any such action or proceeding, such costs and expenses (including
such attorneys' fees) shall be included in and as a part of such judgment.
27. CONSIDERATION. On or before the execution of this Agreement, Purchaser
shall deliver to Seller One Hundred And No/100 Dollars ($100.00) cash (the
"Independent Contract Consideration"), which amount has been bargained for and
agreed to as consideration for Purchaser's right to purchase the Property
pursuant to this Agreement and for Seller's execution and delivery of this
Agreement. The Independent Contract Consideration is in addition to and
independent of all other consideration provided in this Agreement, and is
nonrefundable in all events.
28. WAIVER OF DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT. Purchaser
waives its rights under the Deceptive Trade Practices-Consumer Protection Act,
Section 17.41 et seq., Business & Commerce Code, a law that gives consumers
special rights and protections. After consultation with an attorney/legal
counsel of Purchaser's own selection, Purchaser voluntarily consents to this
waiver. Purchaser covenants, represents and warrants that such attorney/legal
counsel was not directly or indirectly identified, suggested, or selected by
Seller or an agent of Seller.
29. COMPANION PROPERTY. Notwithstanding anything contained in this Agreement
to the contrary, it is a condition precedent to Seller's and Purchaser's
obligations to perform under this Agreement that Purchaser acquire that certain
property commonly known as the Eagle Crest II Apartments (the "Other Property")
in accordance with the terms of that certain Agreement of Sale (the "Companion
Contract") by and between Irving Associates, an Illinois limited partnership,
an affiliate of Seller, and Purchaser of even date herewith for the sale of the
Other Property to Purchaser. If this Agreement is terminated pursuant to
Paragraph 7 hereof or pursuant to any other section of this Agreement, then the
Companion Contract shall also be deemed terminated. Similarly, if the
Companion Contract is terminated pursuant to Paragraph 7 thereof or pursuant to
any other paragraph of the Companion Contract, then this Agreement shall also
be deemed terminated. Nothing contained in this Paragraph 29 shall be deemed
to circumvent the terms of Paragraph 10 if this Agreement is terminated as a
result of a default of Purchaser and nothing in this Paragraph 29 shall be
deemed to circumvent the terms of Paragraph 11 if this Agreement is terminated
as a result of a default of Seller.
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date first set forth above.
PURCHASER:
CORNERSTONE REALTY GROUP INCORPORATED,
a Virginia corporation
By: /s/ X. X. Xxxxxxx
-------------------------------------
Name: X. X. Xxxxxxx
-------------------------------------
Its: Senior Vice President
-------------------------------------
SELLER:
NORTHGATE DRIVE LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Northgate Drive of Illinois, Inc.,
an Illinois corporation, its general partner
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxxx
-----------------------------------
Its: Authorized Representative
-----------------------------------
of Xxxxxxx & Xxxxxxxxx of Texas, 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 stating that no other fees or commissions are due to it from Seller
or Purchaser.
XXXXXXX & WAKEFIELD OF TEXAS, INC.
By:
---------------------------------
Name:
---------------------------------
Its:
---------------------------------
Exhibits
A - Legal
B - Personal Property
C - Escrow Agreement
D - Title Commitment
E - Deed
F - Xxxx of Sale
G - Assignment and Assumption of Intangible Property
H - Service Contracts
I - Assignment and Assumption of Leases and Security Deposits
J - Non-Foreign Affidavit
K - Notice to Tenants
L - Rent Roll
M - Disclosure Letter
January 21, 1997
By Fax: (000) 000-0000
x/x Xxx Xxxxxx Xxxxxxx
Xxxxxxxxxxx Xxxx Xxxxxx Xxxxx
0000 Xxxxxxxx Xxxx, Xxxxx X-000
Xxxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxx
Dear Xx. Xxxxx:
Re: Eagle Crest I
Eagle Crest II
As required under the terms of the contracts, please be advised that our
client, Cornerstone Realty Group, Inc., has not as yet completed its due
diligence.
We are, therefore, requesting an extension to January 23, 1997 in which to
complete the due diligence.
In the event that you cannot grant this extension, please consider this
notice of termination of the agreements.
However, if this meets with your approval, would you kindly signify your
agreement by signing where indicated below and faxing a copy of this letter to
us.
Very truly yours,
XXXXXXXXXX & XXXXXXXXXX
By: /s/ Xxxxx X. Xxxxxxxxxx
---------------------------------
Xxxxx X. Xxxxxxxxxx
HST:gj
AGREED AND CONSENTED TO:
/s/ Xxxxx X. Xxxxxxxxx
------------------------------
cc: The Balcor Company
Att. Xxxxx X. Xxxxxxxxx
By Fax: (000) 000-0000
Xxxxxx Xxxxxx & Xxxxx
Att. Xxxxxx X. Xxxxxxx, Esq.
By Fax: (000) 000-0000
January 23, 1997
VIA FACSIMILE (000) 000-0000
x/x Xxx Xxxxxx Xxxxxxx
Xxxxxxxxxxx Xxxx Xxxxxx Xxxxx
0000 Xxxxxxxx Xxxx, Xxxxx X-000
Xxxxxxxxxxx, Xxxxxxxx 00000
Attn.: Xxxxx Xxxxx
Re: Eagle Crest I; Eagle Crest II
Dear Xx. Xxxxx:
As required under the terms of the contracts, please be advised that our
client, Cornerstone Realty Group, Inc., has not as yet completed its due
diligence.
We are, therefore, requesting an extension to 5:00 p.m. (Dallas time) on
January 24, 1997 in which to complete the due diligence. We also request an
extension of the Closing Date to 5:00 p.m. (Dallas time) on January 30, 1997.
In the event that you cannot grant these extensions, please consider this
notice of termination of the agreements.
However, if this meets with your approval, please signify your agreement
by signing where indicated below and faxing a copy of this letter to us.
Very truly yours,
/s/ Xxxx Xxxxxxxx
Xxxx Xxxxxxxx
AGREED AND CONSENTED TO:
/s/ Xxxxx Xxxxxxxx
---------------------------
JB/cb
cc: Xxxxx X. Xxxxxxxxx, The Balcor Company (via facsimile (000) 000-0000)
Xxxxxx X. Xxxxxxx, Esq., Xxxxxx Xxxxxx & Xxxxx
(via facsimile (000) 000-0000)
Xxx Xxxxxxxx, Cornerstone Realty Group, Inc.
(via facsimile (000) 000-0000)
Xxxxx Xxxxxxxxxx, Esq., Xxxxxxxxxx & Taubenfeld
(via facsimile (000) 000-0000)
