REAL ESTATE CONTRACT OF SALE
Subject to the terms and provisions contained herein, DALLAS-FORT WORTH
PROPERTIES, L.P., a Texas limited partnership ("Seller"), hereby agrees to sell
and convey to CORNERSTONE REALTY GROUP, INC., a Virginia corporation, or
nominee ("Purchaser"), and Purchaser hereby agrees to buy and agrees to pay for
that certain real property known as the ESTRADA OAKS APARTMENTS, being comprised
of 248 apartment units, and located in Irving, Dallas County, Texas, said real
property being further identified on Exhibit "A" attached hereto and made a part
hereof for all purposes, together with all and singular the rights and
appurtenances pertaining thereto, including any right, title and interest of the
Seller in and to adjacent streets, alleys or rights-of-way (herein collectively
the "Land"); and all of the buildings, structures, fixtures, facilities,
installations and other improvements of every kind and description now or
hereafter in, on, over and under the land, including, without limitations, any
and all plumbing, air conditioning, heating, ventilating, mechanical, electrical
and other utility systems, parking lots and facilities, landscaping, roadways,
sidewalks, swimming pools, and other recreational facilities (collectively the
"Improvements"); and all furniture, furnishings, fixtures, equipment, machinery,
maintenance vehicles and equipment, tools, parts, recreational equipment,
carpeting, window treatments, and other tangible personal property of every kind
and description situated in, on, over, or under the Land or used in connection
with the Land and the Improvements, and all right, title and interest of Seller
in and to the Leases and Service Contracts and other intangible personal
property now or hereafter acquired by Seller in connection with the Land and
Improvements (such tangible and intangible personal property herein colle~tively
the "Personal Property"), such Land, Improvements, and Personal Property, being
hereinafter referred to collectively as the "Property ".
This Real Estate Contract of Sale (the "Contract") is executed as of the
Effective Date (which is defined to be the date on which the Contract is last
executed by Seller as shown on the signature page of this Contract), upon the
following terms and conditions:
1. Purchase Price. The Purchase Price (herein so called) for the Property
shall be the sum of NINE MILLION THREE HUNDRED FIFTY THOUSAND ($9,350,000.00)
DOLLARS. The Purchase Price shall be paid in cash, or cash equivalents, at
Closing (defined below).
2. Xxxxxxx Money: Independent Consideration.
(a) Contemporaneous with Purchaser's execution of this Contract,
Purchaser shall deposit with Title Company (defined below), or may deliver said
Deposit to Seller together with the executed Contract, for delivery to Title
Company upon Seller's execution of the Contract, or by wire transfer of funds to
the Title Company, a deposit in the amount of One Hundred Fifty Thousand and
No/100 Dollars ($150,000.00) (the "Deposit"). If this Contract closes, Purchaser
shall receive a credit for the Deposit made by Purchaser toward the Purchase
Price.
(b) Contemporaneously with Purchaser's execution of this Contract,
Purchaser shall deliver directly to Seller a check (the "Independent Contract
Consideration") in the amount
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of One Hundred and No/100 Dollars ($100.00), which amount the parties bargained
for and agreed to as independent consideration for Seller's execution and
delivery of this Contract. The Independent Contract Consideration is in addition
to and independent of any other consideration and payment retained by Seller
under any other provision of this Contract, including, without limitation, the
Xxxxxxx Money. The Independent Contract Consideration is fully vested in Seller
immediately upon its receipt thereof and is non-refundable under all
circumstances.
3. Survey. Within five (5) days after the Effective Date, Seller, at
Seller's sole cost and expense, shall cause a current survey (the "Survey") to
be made of the Property, dated subsequent to the Effective Date, by a licensed
surveyor or registered professional engineer acceptable to Seller and the Title
Company (defined below) and shall furnish Purchaser with two (2) copies and the
Title Company with one (1) copy of the field notes and survey plat prepared by
such surveyor or engineer. The survey shall conform to the current Texas
Surveyors Association Standards and Specifications for a Category IA, Condition
III land title survey and shall be otherwise sufficient to permit the Title
Company to modify the standard printed exception in its owner's policy of title
insurance pertaining to discrepancies in area or boundary lines, encroachments,
overlapping of improvements or similar matters (herein called the "Survey
Exception ") so as to except only for "shortages in area", after Purchaser's
payment of any additional expenses associated with the Survey Exception. In
addition, the survey plat shall indicate:
(a) That the comers of the Property have been properly monumented;
(b) The perimeter boundaries of the Property;
(c) The location of all improvements upon the Property;
(d) The location of and, if applicable, all recording information for
all easements within or adjoining the Property.;
(e) The location of all roadways crossing or adjoining the Property,
giving recording data where applicable;
(f) That there are no encroachments except as may be specifically
shown on the survey plat; and
(g) The number of gross square feet within the Property.
The Survey shall contain a certification from the surveyor or engineer to
Seller, Purchaser, and the Title Company, certifying that the Survey conforms to
the current Texas Surveyors Association Standards and Specifications for a
Category IA, Condition III land title survey. The Survey legal description will
be used in all conveyance documents and will replace Exhibit "A" attached hereto
only for purposes of defining the Property legal description.
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4. Title Commitment. Purchaser acknowledges that Seller, at Seller's sole
expense, has previously caused to be furnished to Purchaser a current title
commitment for an owner's title insurance policy (the "Commitment") issued
through Commonwealth Land Title Company, 000 Xxxxxx Xxxx, Xxxxx 000, Xxxxxx,
Xxxxx 00000 (the "Title Company"), setting forth the state of title of the
Property and all exceptions, including easements, restrictions, rights-of-way,
covenants, reservations and other conditions, if any, affecting the Property
which would appear in an Owner's Title Policy (herein so called) if issued,
together with legible copies of all instruments creating such exceptions. In the
event any exceptions appear in the Commitment or matters are reflected on the
Survey that are unacceptable to Purchaser, then Purchaser shall, within ten (10)
days after Purchaser receives the last to be received among the Commitment, the
copies of the instruments creating such exceptions and the Survey, notify Seller
in writing of each exception to which Purchaser objects. Any exceptions to which
Purchaser does not object shall be considered as "Permitted Exceptions ". In the
event Purchaser notifies Seller of unacceptable exceptions or conditions, as
herein provided, Seller shall have ten (10) days thereafter in which to
eliminate or modify such unacceptable exceptions or conditions, but Seller shall
have no obligation to do so. In the event Seller fails or chooses not to
eliminate or modify such unacceptable exceptions or conditions to the reasonable
satisfaction of Purchaser within said ten (10) day period, then and in such
event, Purchaser may within five (5) days following said ten (10) day period,
terminate this Contract by written notice to the Seller and the Title Company,
whereupon this Contract shall, ipso facto, terminate and the Deposit shall be
immediately returned to Purchaser by the Title Company and the parties hereto
shall have no further obligations one to the other hereunder other than the
indemnification obligations of Purchaser in Paragraph 5 below. In the event
Purchaser fails to terminate this Contract by giving such written notice to
Seller and Title Company within the five (5) day time period provided, then
Purchaser shall be deemed conclusively to have accepted all title exceptions set
forth in the Commitment and all matters disclosed by the Survey which Seller has
not cured or agreed to cure and all such exceptions contained in the Commitment
shall be included in the term "Permitted Exceptions".
5. Inspection: Closing Conditions.
(a) Subject to the requirements of this Paragraph 5, during the Inspection
Period Purchaser shall have access to the Property for the purpose of conducting
such inspections, investigations, soil tests, environmental audits, engineering
and feasibility studies of the Property as Purchaser deems necessary or
advisable in connection with the purchase of the Property. In this regard,
Seller agrees that during the Inspection Period, Purchaser and its agents and
representatives shall be entitled to enter upon the Property for inspection and
examination at all reasonable times; provided, however, that: (i) all entries,
audits, inspections and investigations by Purchaser or its authorized agents or
representatives shall not occur until one (1) business day after Seller has
received prior notice of the proposed entry, audit, inspection or investigation,
and Seller or an agent or representative of Seller shall have the option to be
present during each entry or investigation; (ii) Purchaser's activities at the
Property shall be conducted in such a manner so as to not interfere with the
occupancy of any tenant or occupant and their guests or invitees or the
date-to-day operations, maintenance and management of the Property; (iii)
Purchaser shall not cause any material alteration to any of the Property or
otherwise unreasonably disturb the condition of the Property in the course of
any of its activities and Purchaser shall not cut or
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otherwise damage any trees or landscaping on the Property; (iv) Purchaser shall
be responsible for any damages to the Property caused by Purchaser or
Purchaser's agents and representatives; (v) Purchaser shall, at Purchaser's sole
cost and expense, restore the Property to its condition prior to Purchaser's
inspection and testing of same; (vi) if this Contract does not close for reasons
other than Selle's default, Purchaser shall furnish to Seller copies of all
reports, test results, documents, audits and the like obtained by Purchaser in
the conduct of Purchaser's inspection and testing; (vii) Purchaser shall
indemnify and hold Seller and its successors, assigns, affiliates, shareholders,
partners, subsidiaries, principals, directors, trustees, parents, officers,
employees, agents, representatives, designees and attorneys (collectively, the
"Seller Group') harmless from any claims, damages, causes of action, suits,
debts due, obligations, liabilities, losses, demands, cross actions or costs
(including, without limitation, reasonable attorneys' fees, costs of suit and
all costs and-expenses of litigation or administrative proceedings at all
levels) of any kind whatsoever or threats thereof or therefor, known or unknown,
at law or in equity, originating in whole or in part at any time after the date
of Purchaser's execution of the Contract, whether past, present or future, but
the basis of which claim occurred during the period in which the Contract was in
force and affect (collectively, the "Claims') in connection with the rights
granted to Purchaser under this Contract including, without limitation, any and
all property damage or other damage or bodily injury resulting, directly or
indirectly, from the conduct of any of Purchaser or its agents, contractors,
employees, designees or representatives, in connection with the entries,
inspections, investigations and audits conducted by Purchaser or its agents,
contractors, employees, designees or representatives under this Paragraph 5 and,
notwithstanding any other provision in this Contract to the contrary, this
indemnification shall survive for one (1) year following the termination or
Closing of this Contract; and (viii) Purchaser, and Seller, shall keep
confidential the existence of this Contract and all documents, items, materials,
data and information furnished or otherwise made available by Seller pursuant to
this Contract, and, in the event this Contract is terminated for any reason
other than consummation of the transaction contemplated hereby at Closing,
Purchaser shall immediately return to Seller all such documents, items and
materials furnished or otherwise made available by Seller, including all copies
thereof made by Purchaser. As used herein, the term "keep confidential" shall
mean that Purchaser, and Seller, shall not disclose or publish the existence or
terms of this Contract or any negotiations or information in connection herewith
to any person or entity other than its officers, directors, lenders, agents,
employees, attorneys, partners, accountants, contractors and other persons
involved in the negotiation and consummation of the transaction contemplated by
this Contract. Notwithstanding anything to the contrary herein, the Title
Company shall not release the Xxxxxxx Money until Seller has given written
notice (the "Restoration Notice ") that the Property has been restored as
required herein and Purchaser has otherwise complied with all obligations under
this Paragraph 5 which Restoration Notice must be given by Seller within (5)
days following Purchaser's written request for issuance thereof, failing which
satisfactory restoration will be presumed unless Seller specifically notifies
Purchaser to the contrary and gives written notice of any deficiency. After
cure, Purchaser may again submit a written request for Restoration Notice to be
issued. Purchaser's obligations contained in this paragraph shall survive the
Closing or other termination of this Contract.
(b) Purchaser shall have until the twenty-first (21st) day after the
Effective Date (the "Inspection Period') to determine, in Purchaser's sole
discretion and judgment, if the Property is
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suitable for the purposes for which Purchaser intends to utilize the Property.
If it should be determined by Purchaser, in Purchaser's sole discretion and
judgment, that the Property is not suitable for the purposes for which the
Purchaser intends to utilize the Property or if Purchaser determines that
Purchaser does not desire, for whatever reason, or for no reason, to consummate
the transaction contemplated by this Contract, then Purchaser shall be entitled
to terminate this Contract by giving written notice thereof to Seller and the
Title Company prior to the expiration of said Inspection Period, whereupon the
Deposit shall be returned to Purchaser by Seller after Seller has delivered the
Restoration Notice, and thereafter Seller and Purchaser shall have no further
obligations or liabilities to each other hereunder other than the
indemnification obligations of Purchaser in this Paragraph 5.
(c) At all times before the termination of this Contract or the Closing,
Purchaser covenants and agrees to provide, maintain and keep in force casualty,
liability and other insurance for all Claims which may arise, directly or
indirectly, as a result of Purchaser's rights under this Contract, including,
without limitation, Purchaser's access to the Property as contemplated by this
Paragraph 5.
(d) During the Inspection Period, Seller shall make available to Purchaser,
with respect to the Property, in order that Purchaser may conduct such
examinations and inspections as Purchaser deems necessary, (i) detailed
statements of income and expenses for the past two calendar years, (ii) a rent
roll, together with all tenant occupancy data available, ,(iii) leases currently
in effect, (iv) current tax statements, (v) utility bills for the past twelve
(12) months, (vi) current insurance policies affecting the Property, and (vii)
all Service Contracts currently in effect.
(e) Notwithstanding anything to the contrary herein contained, should
Purchaser for any reason whatsoever during the Inspection Period desire to
terminate this Contract, Purchaser may do so and be entitled to a refund of the
Deposit if Purchaser gives written notice to Seller of its desire to terminate
this Contract by 5:00 PM on the day which is the twenty-first (21s) day
following the Effective Date, and the parties shall thereupon have no further
liability one to the other, except as is set forth in paragraph 5 hereof.
6. Seller's Representations and Warranties. Seller represents and warrants
to Purchaser as follows:
(a) Seller will convey to Purchaser by special warranty deed, in the
form attached hereto as Exhibit "B", good and indefeasible fee simple title to
the Property, free and clear of any and all encumbrances and title exceptions
other than the Permitted Exceptions, and will convey to Purchaser all Personal
Property by Xxxx of Sale in the form attached hereto as Exhibit "C".
(b) Seller is a limited partnership duly organized and existing under
the laws of the State of Texas, and its general partner is a duly organized and
existing Texas corporation. Seller has full power and authority to enter into
this Contract and to perform its obligations under this Contract. The execution,
delivery and performance of this Contract and the transactions
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contemplated hereby have been duly authorized and approved and no other actions
or proceedings on its part are necessary to authorize the execution, delivery or
performance of this Contract. This Contract constitutes the legal, valid and
binding obligations of Seller enforceable in accordance with its terms.
(c) Seller is not a foreign person as defined in Section 1445 of the
Internal Revenue Code of 1986 or the regulations promulgated thereunder.
(d) That to the best of Seller's knowledge, Seller shall have operated
the Property from the Effective Date to Closing in accordance with customary
business practices to which Seller is accustomed, and Seller shall have kept the
Property in the same condition as of the Effective Date, ordinary wear and tear
excepted.
(e) That to the best of Seller's knowledge, Seller shall be in full
compliance with all federal, state, municipal and other government laws,
ordinances, requirements, rules, regulations, notices and orders issued or
imposed after the Effective Date.
(f) That Seller shall not have further encumbered the Property after
the Effective Date.
(g) That to the best of Seller's knowledge, Seller shall have
xxxxxxxx.xx Purchaser a true and accurate Rent Roll, and copies of Service
Contracts and Leases, and true and accurate financial information with respect
to the operation of the Property as herein requested.
(h) To the best of Seller's knowledge, Seller is not aware of and has
not been advised in writing that it is in default under any lease, rental
agreement, service or equipment contract, or mortgage or othersencumbrances
relating to the property, not otherwise disclosed to Purchaser.
(i) To the best of Seller's knowledge, Seller has not received any
written notice of any existing or threatened litigation which relates to and
would affect the Property. This warranty shall survive the Closing for one (I)
year.
If any of the representations and warranties set forth in this Paragraph 6
are determined at any time on or before the date of Closing to be untrue or
unfulfilled, then Purchaser, as its sole and exclusive remedy, may terminate
this Contract by providing written notice of such termination to Seller, in
which event the Deposit, if received, shall be returned to Purchaser and
thereafter neither Seller nor Purchaser shall have any further liabilities or
obligations unto each other except for Purchaser's indemnifications and
obligations under Paragraph 5 hereof. Seller covenants and agrees to notify
Purchaser of any material change in the representations and warranties set forth
herein which occurs prior to Closing.
The representations and warranties of Seller contained in this Paragraph 6
are given and accepted with the understanding and subject to (i) Seller's right
to provide an explanation to Purchaser as to any material change in the
representations and warranties set forth herein which
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occurs prior to Closing, and (ii) the condition that the liability of any of
Seller for a breach of any such representation and warranty shall require as a
condition precedent to any action thereof written notice from Purchaser
detailing the nature of such breach to be received by Seller no later than one
hundred eighty (180) days following the Closing Date so as to allow Seller an
opportunity to cure same. Further, no action shall be commenced against Seller
for the breach of any representation or warranty following the first (lst)
anniversary date of the Closing of this Contract. Further, the total aggregate
liability for any breach(es) of any representations and/or warranties under this
Contract by Seller (if Purchaser has not elected the remedy under any other
provision of this Contract) shall be limited to a total aggregate dollar amount
not to exceed Fifteen Thousand and No/100 Dollars ($15,000.00), as its sole and
exclusive remedy, it being understood and agreed by the parties hereto that
absent the conditions set forth in clauses (i) and (ii) of this paragraph, the
aforesaid dollar limitation and the aforesaid notice provisions, Seller would
not have given any of the representations and warranties contained in this
Paragraph 6. If Purchaser is entitled to and does not elect the remedy in the
immediately preceding sentence, it shall only be paid an amount up to such
dollar limitation if it has provided to Seller evidence of its actual incurrence
and expenditure of such amount as a result of such breach of the applicable
representations and warranties.
7. Representations and Warranties of Purchaser. Purchaser hereby makes the
following representations and warranties to Seller:
(a) Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Texas. Purchaser has full right,
title, authority and capacity to execute and perform its obligations under this
Contract and to consummate all of the transactions contemplated herein and the
officers of Purchaser who executed and delivered this Contract and all of the
documents to be delivered to Purchaser hereunder are and shall be duly
authorized to do so. Purchaser is authorized to conduct business in the State of
Texas.
(b) There are no attachments, execution, assignments for the benefit
of creditors, receiverships, conservatorships or voluntary or involuntary
proceedings in bankruptcy or pursuant to any debtor relief laws filed by
Purchaser or pending against Purchaser.
(c) Purchaser is not prohibited from consummating the transactions
contemplated in this Contract by any law, regulation, agreement, instrument,
restoration, order or judgment.
(d) Purchaser knows of no facts or circumstances regarding the
Property which, if known by Seller, would make Seller's representations and
warranties contained in Paragraph 6 above incorrect or inaccurate.
(e) Purchaser covenants and agrees with Seller that Purchaser will (i)
do such further acts as may be necessary, desirable or proper to carry out more
effectively the purposes of this Contract, and (ii) not interfere with or hinder
the ownership, use, maintenance or operation of the Property or the surrounding
property or any part thereof prior to the delivery of title thereof to
Purchaser.
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(f) There is no litigation or proceeding pending, or to the best
lcnowledge of Purchaser, threatened against Purchaser which would affect
Purchaser entering into this Contract or completing the transactions
contemplated hereunder.
8. Closing Date and Place. The Closing (herein so called) of this Contract
shall take place at the offices of the Title Company at 10:00 a.m. on the
Closing Date (herein so called) which shall be on or before seven (7) days after
the expiration of the Inspection Period; provided, however, that either Seller
or Purchaser may, if reasonably necessary to complete some remaining requirement
in order to Close, be entitled to a one time extension of the Closing Date for
an additional seven (7) days.
9. Risk of Loss. All risk of loss to the Property resulting from any
casualty prior to the Closing shall remain on Seller. In the event of a casualty
prior to Closing, the parties agree that each may retain such proceeds of
insurance as they may receive, and that Purchaser may, at its option, either
terminate the Contract, or accept the Property in its condition following the
casualty, but, in the later case, there will be no reduction in the Purchase
price in spite of any material damages or destruction to the property; provided,
that if Purchaser elects to purchase the Property, Seller will then assign at
the Closing all of its casualty insurance benefits to Purchaser. If, prior to
Closing, the Property becomes subject to a taking by eminent domain, to any
extent whatsoever, Purchaser may, in Purchaser's sole discretion, either (i)
close this Contract and receive the condemnation award; or (ii) terminate this
Contract and receive back the Deposit.
10. Seller's Obligations at Closing. At the Closing, Seller shall deliver
or cause to be delivered to Purchaser, at Seller's sole cost and expense, each
of the following items:
(a) A special warranty deed in the form attached hereto as EXHIBIT
"B" (the "Deed') and a Xxxx of Sale in the form attached hereto as EXHIBIT "C",
duly executed and acknowledged by Seller, conveying to Purchaser, good,
indefeasible fee simple title in the Property, subject only to the Permitted
Exceptions, and to the Personal Property.
(b) A non-foreign person affidavit sworn to by Seller as required by
Section 1445 of the Internal Revenue Code. In the event that Seller fails to
deliver the affidavit at Closing, then the Title Company shall be entitled to
withhold from the Purchase Price a sum equal to ten percent (10%) of the total
amount which otherwise would have been realized by Seller from such sale, which
sum will be paid by the Title Company to the United States Treasury pursuant to
the requirements of Section 1445 of the Internal Revenue Code and the
regulations promulgated thereunder.
(c) An Owner's Policy of Title Insurance in the amount of the Purchase
Price reflected on the closing statements prepared by the Title Company and
approved by Seller issued by the Title Company on the standard form in use in
the State of Texas on the Policy of a Title Insurance Company licensed to do
business in Texas insuring good and indefeasible fee simple title to the
Property in the purchaser, subject only to the Permitted Exceptions and the
standard printed exceptions, except:
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(i) The exception relating to discrepancies, conflicts or
shortages in area or boundary lines, or any encroachment or any overlapping of
improvements which a survey might show shall be modified to delete such
exception except as to "shortages in area" if the amounts required by the Title
Company to be paid for such deletion are paid by Purchaser; and,
(ii) The exception relating to ad valorem taxes shall except only
to taxes owing for the current year of closing and subsequent years; and
(d) An updated Rent Roll, certified to by Seller as being true and
accurate, together with Originals or copies of all signed Leases and rental
agreements in effect.
(e) All security and cleaning deposits.
(f) All Service Contracts in effect and not otherwise capable of being
terminated even if Purchaser may request termination thereof.
(g) Written Termination of the current management agreement without
cost to Purchaser.
(h) Possession of the Property, together with all keys.
(i) All transfers, if necessary, of utilities.
(j) A notice letter to all residents of the apartment complex as to
change or ownership in form reasonably mutually agreeable to Seller and
Purchaser.
(k) An Assignment of the Leases and Assumption of Obligations by
Purchaser agreement in a form reasonably mutually agreeable to Seller and
Purchaser.
(1) Such evidence or documents as may be reasonably required by
Purchaser or the Title Company evidencing the status and capacity of Seller and
the authority of the person or persons who are executing the various documents
on behalf of Seller in connection with the sale of the Property.
(m) An affidavit from Seller that to the best of Seller's knowledge,
information and belief, there, on the date of Closing, no unsatisfied judgments,
creditor's claims other than in the course of business, tax liens, or pending
bankruptcies involving Seller.
(n) An assignment of all assignable licenses and permits relating to
the operation of the Property, the existing telephone number, and the business
trade name as set forth in Paragraph 1.1 hereof.
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(o) Execution by Seller of all documents, if any, as may be reasonably
necessary for the transfer of the telephone, electric, water and sewer, and gas
utilities, as may be required by the utility, and which are presented to Seller
at the Closing.
(p) Such other documents as may be reasonably requested by the Title
Company in connection with this transaction.
(q) A representation letter as normally required by auditors for a
public company, in form meeting the reasonable approval of Seller's certified
public accountants.
11. Purchaser's Obligations at Closing. At the Closing, Purchaser shall
deliver to Seller the following items:
(a) The Purchase Price (net of the Deposit) in cash, or cash
equivalents, or by wire transfer to an account designated by Seller.
(b) The Deed and Xxxx of Sale duly executed and acknowledged by
Purchaser evidencing its acceptance thereof.
(c) Such evidence or documents as may reasonably be required by Seller
or the Title Company evidencing the status and capacity of Purchaser and the
autho, rity of the person or persons who are executing the various documents on
behalf of Purchaser in connection with the purchase of the Property.
(d) An executed Assignment of Leases and Assumption of Obligations by
Purchaser agreement in form reasonable mutually agreeable to Seller and
Purchaser.
(e) Such other documents as may be reasonably requested by Title
Company in connection with this transaction.
12. Prorations and Closing Costs. The following shall be prorated between
Seller and Purchaser, and for purposes of determining the prorations, Purchaser
shall be deemed the owner of the Property as of the Closing Date: rents and
other income from the Property, operating expenses, any prepaid rent, advances
and/or consideration on Service Contracts and other assumed obligations, and ad
valorem taxes; provided, that with respect to unpaid and delinquent rent, a true
and accurate schedule of which shall be provided by Seller at the Closing, Upon
collection of rent from a Tenant, Purchaser may apply collections to current
rents due, UNLESS Purchaser collects amounts specified by Tenant as payment of
delinquent rents, in which event, Purchaser shall remit to Seller all such
amounts collected as unpaid and delinquent rent. Seller and Purchaser shall pay
their customary share of all taxes, recording fees, escrow fees, and other costs
imposed by the Title Company. Seller and Purchaser shall be solely responsible
for payment of their own attorneys fees.
13. Seller's Default. In the event of Seller's default hereunder, Purchaser
may, at Purchaser's option and as Purchaser's sole and exclusive remedies,
either: (i) terminate this
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Contract by giving written notice from Purchaser to Seller in which event the
Deposit held by Seller will be immediately returned to Purchaser by the Title
Company, or (ii) enforce specific performance hereunder. In the event Purchaser
elects to enforce specific performance, the exercise of such remedy by Purchaser
shall be expressly contingent upon Purchaser first remitting to the Title
Company the sum of $500,000.00 (the "Additional Deposit"). If Purchaser
prevails, the balance of the Additional Deposit shall be credited against the
Purchase Price, but if Seller prevails, the balance of the Additional Deposit
shall be payable to Seller as liquidated damages, not a penalty, for the damages
caused Seller as a result of the pendency of the litigation thus preventing
Seller from entering into another contract to sell the Property. Purchaser
acknowledges that the extent and amount of actual damages would be extremely
difficult to ascertain, and that therefore, the amount of the Additional Deposit
is agreed upon by Purchaser to represent a fair and reasonable sum of actual
damages sustained by Seller as a result of any enforcement action in which
Purchaser fails to prevail.
14. Purchaser's Default. In the event that Purchaser shall fail to
consummate this Contract for any reason, except Seller's default, Seller, as
Seller's sole and exclusive remedy for such default, shall have the right to
terminate this Contract by notice to Purchaser and receive the Deposit, it being
agreed between Purchaser and Seller that such sum shall be liquidated damages
for a default of Purchaser hereunder because of the difficulty, inconvenience
and uncertainty of ascertaining actual damages for such default. Notwithstanding
the provisions of this paragraph, nothing contained herein shall limit Seller's
right to recover damages and pursue all other legal remedies available to it in
the event Purchaser fails to indemnify Seller for damages resulting from
Purchaser's activities in and about the Property pursuant to Paragraph 5a.
above.
15. Notice. Any notice or document required to be delivered hereunder shall
be in writing and shall be deemed effective when delivered and shall be deemed
delivered when actually received, or, if earlier and whether or not received,
one day after it is deposited in the United States mail, postage prepaid,
certified or registered mail (with or without return receipt requested)
addressed to the parties hereto at the respective addresses set out opposite
their names below, or at such other address as they have heretofore specified by
written notice delivered in accordance herewith:
To Seller: Dallas-Fort Worth Properties, L.P.
c/o DFWP, INC., its general partner
0000 Xxxxxxxxx, XX-00, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn.: Xxxxx X. Xxxxx, President
Telephone: (000) 000-0000
Fax: (000) 000-0000
with copy to: Xxxxxx, Xxxxx, Xxxxxx, L.L.P.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn.: R. Xxxx Xxxxxx, Esq.
Telephone: (000) 000-0000; Fax: (000) 000-0000
Page - 11
To Purchaser: Cornerstone Realty Group, Inc.
Attn: Xxx Xxxxxxxx
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
With copy to: Xxxxx X. Xxxxxxxxxx, Esq.
Xxxxxxxxxx & Taubenfeld
000 Xxxxxxxx Xxxxxx
X. X. Xxx 000
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
and/or
Xxxxxx X. Xxxxxxxx, Esq.
Brown, McCarroll, Oaks, and Hartline
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Notice may also be given by telefacsimile transmission or by federal express
delivery, but shall not be deemed delivered unless and until actually received,
proof of which shall lie on the party relying upon the notice.
16. Governing Law and Venue. THIS CONTRACT SHALL BE CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS
WITHOUT REGARD TO THE APPLICATION OF CHOICE OF LAW PRINCIPLES, AND SELLER AND
PURCHASER HEREBY CONSENT TO THE PERSONAL JURISDICTION OF THE DISTRICT COURTS OF
DALLAS COUNTY OF THE STATE OF TEXAS IN ANY ACTION THAT MAY BE COMMENCED RELATING
TO THE TRANSACTION CONTEMPLATED HEREBY.
17. No Survival. Except for Purchaser's indemnifications, agreements,
obligations, representations and covenants in Paragraphs 5, 12, 20, 24, 25, 26,
27 and 28 hereof and Seller's obligations, representations and covenants in
Paragraphs 6, 12, 20, 26, 27 and 28 hereof, no other covenant, agreement,
representation or warranty contained herein shall survive Closing.
18. Capacity. Each person executing this Contract hereby represents and
warrants that he has the authority to do so and that his signature shall bind
the entity for which he signed. Each party hereto shall provide the other parry
and the Title Company with such documentation as the Title Company or
Purchaser's or Seller's attorney deems necessary to evidence the authority of
that party to perform the actions contemplated herein.
Page - 12
19. Timing. Time is of the essence of this Contract. For purposes hereof,
the Effective Date shall be the date this Contract is deposited with and
receipted for by the Title Company.
20. Attorneys' Fees and Costs. In the event either party hereto files a
suit to enforce this Contract or any provisions contained herein, the party
prevailing in such action shall be entitled to recover, in addition to all other
remedies or damages, its costs, including reasonable attorneys' fees, incurred
in such suit.
21. No Assignability. This Contract may not be assigned by Purchaser
without the prior written consent of Seller, which consent need not be given.
However, the Contract may be assigned to a limited partnership or limited
liability company controlled by Purchaser without Seller's prior written
consent.
22. Gender. Where required for proper interpretation, words in the singular
shall include the plural and the masculine gender shall include the neuter and
the feminine gender and vice versa.
23. Headings. The descriptive headings of the several Paragraphs contained
in this Contract are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
24. WAIVER OF CONSUMER RIGHTS: DTPA WAIVER. PURCHASER AND SELLER EACH HAVE
KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS THAT ENABLE THEM TO
ANALYZE THE MERITS AND RISKS OF THE TRANSACTION CONTEMPLATED HEREBY, AND NEITHER
IS IN A SIGNIFICANTLY DISPARATE BARGAINING POSITION WITH RESPECT TO THE OTHER OR
SUCH TRANSACTION. PURCHASER AND SELLER EACH HEREBY KNOWINGLY, VOLUNTARILY ANDs
INTENTIONALLY WAIVE AND RELEASE, AFTER ADVICE OF COMPETENT COUNSEL, ANY AND ALL
RIGHTS, BENEFITS AND REMEDIES EITHER MAY HAVE AGAINST THE OTHER, NOW OR AT ANY
TIME HEREAFTER, UNDER OR PURSUANT TO SUB-CHAPTER E OF CHAPTER 17 OF THE TEXAS
BUSINESS AND COMMERCE CODE, AS NOW OR HEREAFTER AMENDED, AND/OR ANY OTHER OR
SUCCESSOR LAWS, RULES, REGULATIONS, OR JUDICIAL DOCTRINES WITH RESPECT TO
DECEPTIVE TRADE PRACTICES. AS SUCH, PURCHASER SPECIFICALLY 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 OF PURCHASER'S OWN SELECTION,
PURCHASER VOLUNTARILY CONSENTS TO THIS WAIVER.
25. Environmental Waiver and Release. Purchaser expressly acknowledges that
there may be certain environmental issues and/or risks with respect to the
Property. Purchaser has been expressly advised by Seller to conduct an
independent investigation and inspection of the
Page - 13
Property utilizing experts as Purchaser deems to be necessary for an independent
assessment of all environmental liability and risk with respect to the Property.
Purchaser further acknowledges and agrees that, having been given the
opportunity to inspect the Property, Purchaser is relying solely on its own
investigation of the Property and not on any information provided or to be
provided by Seller and hereby covenants for itself and its successors in title
not to xxx Seller with respect to any claims of an environmental nature arising
from or related to the Property or to any "Hazardous Materials" (as defined
below) on the Property. For purposes of this Contract, the term "Hazardous
Materials" shall mean any substance which is or contains: (i) any "hazardous
substance" as now or hereafter defined in ' Section 101(14) of the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended (42
U.S.C. Section 9601 et seq.) ("CERCLA") or any regulations promulgated under
CERCLA; (ii) any "hazardous waste" as now or hereafter defined in the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.) ("RCRA") or
regulations promulgated under RCRA; (iii) any substance regulated by the Toxic
Substances Control Act (I 5 U.S.C. Section 2601 et. seq.); (iv) gasoline, diesel
fuel or other petroleum hydrocarbons; (v) asbestos and asbestos containing
materials, in any form, whether friable or non-friable; (vi) polychlorinated
biphenyls; (vii) radon gas; and (viii) any additional substances or materials
which are now or hereafter classified or considered to be hazardous or toxic
under "Environmental Requirements" (as hereinafter defined) or the common law,
or any other applicable laws related to the Property. Hazardous Materials shall
include, without limitation, any substance, the presence of which on the
Property (A) requires reporting, investigation or remediation under
Environmental Requirements; (B) causes or threatens to cause a nuisance on the
Property or adjacent property or poses or threatens to pose a hazard to the
health or safety of persons on the Property or adjacent property; or (C) which,
if emanated or migrated from the Property, could constitute a trespass.
For purposes of this Contract, the term "Environmental Requirements" shall
mean all laws, ordinances, statutes, codes, rules, regulations, agreements,
judgments, orders and decrees now or hereafter enacted, promulgated or amended,
of the United States, the states, the counties, the cities or any other
political subdivisions in which,the Property is located and any other political
subdivision, agency or instrumentality exercising jurisdiction over the owner of
the Property, the Property or the use of the Property relating to pollution, the
protection or regulation of human health, natural resources or the environment,
or the emission, discharge, release or threatened release of pollutants,
contaminants, chemicals or industrial, toxic or hazardous substances or waste or
Hazardous Materials into the environment (including, without limitation, ambient
air, surface water, ground water or land or soil).
Purchaser agrees that the provisions and disclaimers in this Paragraph 25
may either be inserted in the Special Warranty Deed in the form attached hereto
to be delivered at Closing or, alternatively, in a certificate dated as of
Closing reflecting the foregoing to be executed by Purchaser at Closing, but in
any event, or in lieu thereof, shall survive the termination or Closing of this
Contract. In the event the information in the Deed is to be contained in a
Certificate rather than the Deed, at the very minimum, the Special Warranty Deed
shall include the disclaimer clause of paragraph 40 hereof.
Page - 14
26. Brokers. Purchaser agrees to pay a brokerage fee to XXX XXXXX, pursuant
to a separate agreement. Said brokerage fee shall be deemed earned if, and only
if, settlement and Closing occurs hereunder, and shall not be deemed earned even
if Purchaser and/or Seller wrongfully fail(s) to consummate the purchase and
sale herein contemplated. Seller agrees to pay a brokerage fee of four percent
(4.00%) to XXXXX COMMERCIAL CAPITAL, INC., pursuant to a separate agreement,
which fee shall also not be deemed earned until settlement and Closing occurs
hereunder. The parties acknowledge that no other brokerage fees are due in
connection with this Contract. Seller agrees to indemnify Purchaser and hold
Purchaser harmless from any loss, liability, damage, cost or expense (including,
without limitation, reasonable attorney's fees) paid or incurred by Purchaser by
reason of any claim to any broker's, finder's or other fee in connection with
this transaction by any party claiming by, through or under Seller. Purchaser
agrees to indemnify Seller and hold Seller harmless from any loss, liability,
damage, cost or expense (including, without limitation, reasonable attorney's
fees) paid or incurred by Seller by reason of any claim to any broker's,
finder's or other fee in connection with this transaction by any party claiming
by, through or under Purchaser. Purchaser acknowledges that at the time of the
execution of this Contract, the Agent advised Purchaser by this writing that
Purchaser should have an abstract covering the Property examined by an attorney
of Purchaser's own selection and should be furnished with or obtain a policy of
title insurance.
27. Complete Agreement. This Contract embodies the complete agreement
between the parties hereto and cannot be varied or terminated except by written
agreement of the parties.
28. No Partnership. Nothing contained in this Contract shall be deemed or
construed by any party, person or entity as creating any relationship of
principal and agent, of parmership, of joint venture, or any association
whatsoever between the parties hereto. No provision of this Contract and no act
or failure to act of the parties shall be deemed to create any relationship
between the parties other than the relationship of vendor or vendee.
29. Delay. No delay on the part of a party to this Contract in exercising
any rights or remedies hereunder shall operate as a waiver thereof, nor shall
any specific waiver by a party hereto of any right or remedy hereunder operate
or be construed as a waiver of any other right or remedy hereunder, nor shall
any single or partial exercise of any right or remedy hereunder preclude any
other or further exercise thereof, or the exercise of any other right or remedy
hereunder (unless the provisions of this Contract which establish any such right
or remedy provide otherwise).
30. No Third Party Beneficiary. Except for the Purchaser and Seller, no
person or entity has any rights or benefits under this Contract and no person or
entity is a third party beneficiary of this Contract.
31. Counterparts. Numerous copies of this Contract may have been executed
by the parties hereto. Each such executed copy shall have the full force and
effect of an original executed instrument.
Page - 15
32. Day. If any date herein set forth for the performance of any obligations
by Seller or Purchaser or for the delivery of any instrument or notice as herein
provided should be on a Saturday, Sunday or legal holiday, the compliance with
such obligations or delivery shall be deemed acceptable on the next day
following such Saturday, Sunday or legal holiday. As used here, the term "legal
holiday" means any state or federal holiday for which financial institutions or
post offices are generally closed for observance thereof, and the term "day"
means any calendar day including Saturday, Sunday or a legal holiday.
33. Reporting Requirements. Purchaser agrees to comply with any and all
reporting requirements applicable to the transaction which is the subject of
this Contract which are set forth in any law, statute, ordinance, rule,
regulation, order or determination of any governmental authority, including but
not limited to The International Investment Survey Act of 1976, The Agricultural
Foreign Investment Disclosure Act of 1978, The Foreign Investment in Real
Property Tax Act of 1980 and the Tax Reform Act of 1984 and further agree upon
request of Seller to furnish Seller with evidence of such compliance. This
provision shall survive the termination of the Contract or the Closing. Seller
acknowledges that Purchaser has stated that it is a public entity and that it is
required to furnish financial statements to the Securities and Exchange
Commission in connection with this purchase. Seller agrees to the extent
reasonably required, and at the sole cost and expense of Purchaser with approval
of Seller's certified public accountants, to make information available for
Purchaser, at no cost or obligation to Seller, to audit the last 12 months of
operation of the Property so that a report can be generate.d that is in
compliance with accounting Regulation S-X of the Securities and Exchange
Commission.
34. Contract Construction. The parties acknowledge that their attorneys
have reviewed and revised this Contract and that the normal rule of construction
to the effect that any ambiguities are to be resolved against the drafting
'party shall not be employed in the interpretation of this Contract or any
amendments or exhibits hereto.
35. Reporting Party. Seller and Purchaser hereby designate the Title
Company as, and the Title Company agrees to act as and perform the duties and
obligations of, the "reporting person" with respect to the transaction
contemplated by this Contract for purposes of 26 C.F.R. Section 1.6045-4(e)(5)
relating to the requirements for information reporting on real estate
transactions closed on or after January 1, 1991. In this regard, Seller,
Purchaser and the Title Company each agree to execute the Designation Agreement
designating the Title Company as the reporting person with respect to the
transactions contemplated by this Contract.
36. Illegal. If any provision of this Contract is found by a court of
competent jurisdiction to be in violation of any law, and if such court should
declare such provision of this Contract to be unlawful, void, illegal or
unenforceable in any respect, the remainder of this Contract shall be severable,
and the rights, obligations and interests of the parties hereto under the
remainder of this Contract shall continued to be in full force and effect. To
the extent permitted by applicable law, the parties hereto waive any provision
of law which prohibits or renders void or unenforceable any provision hereof. If
the invalidity of any part or provision of this Contract shall deprive any party
of the economic benefit intended to be conferred by this Contract, the parties
shall negotiate, in good faith, to develop a structure, the economic effect of
Page - 16
which is nearly as possible as the economic effect of this Contract without
regard to such invalidity.
37. No Personal Liability. This Contract and all documents, agreements,
understandings and arrangements relating hereto and to the transactions
contemplated hereby have been negotiated, executed and delivered on behalf of
Seller and its officers in their respective capacities and not individually, and
bind only the assets of Seller and no officer, director, employee, agent or
shareholder of any of the Seller Group shall be bound or held to any personal
liability or responsibility in connection with the agreements, obligations and
undertakings of Seller hereunder. Any person dealing with Seller in connection
herewith shall look solely to the assets of Seller for the payment of any claim
or for the performance of any of its agreements, obligations or undertakings
hereunder. Purchaser acknowledges and agrees that each agreement and any other
document executed by any of Seller in accordance or in respect of this Contract
and the transactions contemplated hereby shall be deemed and treated to include
in all respects and for all purposes the provisions of this Paragraph.
Provisions of this Paragraph shall survive the Closing or earlier termination
thereof.
38. No Memorandum to be Recorded. Purchaser and Seller hereby agree that
neither this Contract nor any memorandum hereof shall be recorded. Each party
hereby agrees to indemnify and hold harmless the other for all Claims incurred
by the other by reason of a breach of the foregoing covenant. This provision
shall survive the Closing or earlier termination of this Contract.
39. Consent to Contract. Each of Purchaser and Seller hereby acknowledge
for the benefit of the other that: (i) it has thoroughly read and reviewed the
terms and provisions of this Contract and each of the other documents and
certificates to be executed in connection herewith and is familiar with the
same; (ii) the terms and provisions hereof and thereof are clearly understood
and have been fully consented to; (iii) it has had the full benefit and advice
of counsel of its own selection, in regard to understanding the terms and
provisions hereof and thereof, the meaning and effect of this Contract and each
of the other documents and certificates to be executed in connection herewith
and otherwise as desired; and (iv) all such documents have been entered into
freely, voluntarily, in good faith and with full knowledge of the consequences
hereof and without duress.
40. DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, ITS IS
UNDERSTOOD AND AGREED THAT SELLER IS NOT MAKING AND HAS NOT MADE ANY WARRANTIES
OR REPRESNETATIONS OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO
THE PROPERTY, INCLUDING BUT NOT LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS AS
TO HABITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE
ZONING, TAX CONSEQUENCES, LATENT OR PATENT PHYSICAL OR ENVIRONMENTAL CONDITION,
UTILITIES, OPERATING HISORY OR PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS,
THE COMPLIANCE OF THE PROPERTY WITH GOVERNMENTAL LAWS, THE TRUTH ACCURACY OR
COMPLETENESS OF ANY INFORMATIONS PROVIDED BY OR
PAGE - 17
ON BEHALF OF SELLER TO PURCHASER, OR ANY OTHER MATTER OR THING REGARDING THE
PROPERTY. PURCHASER ACKNOWLEDGES AND AGREES THAT UPON THE CLOSING, SELLER SHALL
SELL, TRANSFER AND XXXXXXX TO PURCHASER AND PURCHASER SHALL ACCEPT THE PROPERTY
"AS IS, WHEREIS, WITH ALL FAULTS", EXCEPT TO THE EXTENT EXPRESSLY PROVIDED
OTHERWISE IN THIS AGREEMENT. PURCHASER HAS NOT RELIED UPON AND WILL NOT RELY ON,
AND SELLER IS NOT LIABLE FOR OR BOUND BY ANY EXPRESS OR IMPLIED WARRANTIES,
GUARANTIES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE
PROPERTY OR RELATING THERETO (INCLUDING WITHOUR LIMITATION, PROPERTY INFORMATION
PACKAGES DISTRIBUTED WITH RESPECT TO THE PROPERTY OR ANY REAL ESTATE BROKER OR
AGENT REPRESENTING OR PURPORTING TO REPRESENT SELLER, TO WHOMEVER MADE OR GIVEN,
DIRECTLY OIR INDIRECTLY, ORALLY OR IN WRITING, UNLESS SPECIFICALLY SET FORTH IN
THIS AGREEMENT.
41. This Contract constitutes an offer by Purchaser which must be accepted
and signed by Seller on or before three (3) business days after the date this
Contract is signed by Purchaser AND received by Seller; provided, however, that
if Purchaser chooses to make the Deposit by wire transfer of funds to the Title
Company, Seller shall not be required to sign the Contract until after Seller
has been notified by the Title Company, in writing by facsimile transmission, of
its receipt of the Deposit from Purchaser. If this Contract is not signed by
Seller withif/said three (3) day period, AND, if appropriate as a result of
Purchaser making the Deposit by wire transfer of funds, after receipt of written
notice from the Title Company as described above in this paragraph, this
Contract shall be deemed revoked.
SIGNED by Purchaser this 2nd day of July, 1998.
PURCHASER:
CORNERSTONE REALTY GROUP, INC.,
a Virginia corporation
By: /s/ Xxx X. Remppies
----------------------------------
Name: Xxx X. Remppies
--------------------------------
Title: V. P.
-------------------------------
SIGNED by Seller this 6th day of July, 1998.
SELLER:
DALLAS-FORT WORTH PROPERTIES, L.P.
a Texas limited partnership
Page - 18
BY: DFWP, INC.,
a Texas corporation, its general partner
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Xxxxx X. Xxxxx, President
--------------------------------------------------------------------------------
EXHIBITS:
Exhibit A - Property
Exhibit B - Special Warranty Deed
Exhibit C - Xxxx of Sale
--------------------------------------------------------------------------------
RECEIPT BY TITLE COMPANY
Contract has been received by the undersigned this, the 6th day of July,
1998 (the "Effective Date").
COMMONWEALTH LAND TITLE COMPANY
By: /s/ Xxxx Xxxx
----------------------------
Name: Xxxx Xxxx
--------------------------
Title: Escrow Officer
-------------------------
PAGE - 19
