AGREEMENT OF PURCHASE AND SALE
BETWEEN
CLARION CROSSING LIMITED PARTNERSHIP, SELLER
AND
CORNERSTONE REALTY GROUP, INC., BUYER
This Agreement was prepared by
Xxxxxx X. Xxxx, P.C.
Xxxx Xxx Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
000-000-0000
TABLE OF CONTENTS
Page
ARTICLE 1 PARTIES. ..................................................... 1
ARTICLE 2. PROPERTY TO BE PURCHASED. .................................... 1
ARTICLE 3. PURCHASE PRICE. .............................................. 2
ARTICLE 4. CASH ADJUSTMENTS AND CLOSING COSTS. .......................... 2
ARTICLE 5. CLOSING DATE. ................................................ 4
ARTICLE 6. TITLE AND SURVEY. ............................................ 4
ARTICLE 7. REPRESENTATIONS AND WARRANTIES OF SELLER. .................... 5
ARTICLE 8. REPRESENTATIONS AND WARRANTIES OF BUYER. ..................... 6
ARTICLE 9. COVENANTS OF SELLER .......................................... 7
ARTICLE 10 CONDITIONS PRECEDENT . ....................................... 9
ARTICLE 11 ITEMS TO BE DELIVERED BY SELLER AT CLOSING ................... 10
ARTICLE 12 ITEMS TO BE DELIVERED BY BUYER AT CLOSING .................... 13
ARTICLE 13 DAMAGE, DESTRUCTION OR CONDEMNATION .......................... 13
ARTICLE 14 BROKERAGE COMMISSIONS. OFFER AND ACCEPTANCE. ................. 14
ARTICLE 15 REMEDIES ON DEFAULT. ......................................... 15
ARTICLE 16 ESCROW AGENT. ................................................ 16
ARTICLE 17 OTHER TERMS AND CONDITIONS. .................................. 17
ARTICLE 18 DEFINITIONS. ................................................. 24
ARTICLE 19 OFFER AND ACCEPTANCE. ........................................ 27
LIST OF EXHIBITS
"A" Description of the Land.
"B" Permitted Title Exceptions.
"C" Certificate of Representation and Warranties.
"D" Representations Concerning Audit.
"E" Acceptance by Escrow Agent.
AGREEMENT OF PURCHASE AND SALE
ARTICLE 1. PARTIES.
101. The parties to this Agreement are: (a) CLARION CROSSING LIMITED
PARTNERSHIP ("Seller"), a Georgia limited partnership; and (b) CORNERSTONE
REALTY GROUP, INC. ("Buyer"), a Virginia corporation. Unless otherwise
specified, words and phrases that are capitalized in this Agreement are defined
in Article 18 of this Agreement.
ARTICLE 2. PROPERTY TO BE PURCHASED.
201. In consideration of Ten Dollars ($10.00) cash in hand paid by Buyer to
Seller, the receipt and sufficiency of which are hereby acknowledged, Seller
agrees to sell to Buyer and Buyer agrees to buy from Seller, on the terms and
conditions hereinafter set forth, a 228 unit garden apartment complex known as
"Clarion Crossing Apartments", located in Raleigh, North Carolina, which
consists of that certain parcel of land (the "Land") described in Exhibit "A",
together with all of Seller's right, title and interest in and to: (a) all
buildings and other improvements located on the Land, and all appurtenances
thereto (herein collectively called the "Improvements"); (b) all appliances,
furniture, fixtures, machinery, equipment, inventories, supplies and other
tangible personal property (other than property owned by Tenants) located at and
used in connection with the operation, management or maintenance of the Land or
the Improvements, subject, however, to obsolescence and consumption in the
ordinary course of business between the Contract Date and the Closing Date
(herein collectively called the "Equipment"); (c) any portion of the Land lying
in the right-of-way of any alley, passageway, street, road, highway or avenue,
proposed, open, or closed, adjoining the Land and in all strips and gores; (d)
all riparian rights, hereditaments, easements and other rights, benefits,
privileges and immunities appurtenant to the Land; (e) all awards or payments
for any Condemnation occurring after the Contract Date for damage to the Land or
Improvements, including any damage caused by any change of grade or closing of
any street, road, highway, avenue, alley or other right-of-way; (f) all leases,
rents and profits accruing after Closing with respect to the Land, Improvements,
and Equipment, including the Leases; (g) all Tenant security deposits; and (h)
if and to the extent transferable, all rights, if any, that Seller has to use
the tradename "Clarion Crossing" with respect to the Property (provided,
however, that Seller and its affiliates shall not be prevented from using
"Clarion Crossing, " or "Clarion" or "Crossing" in combination with other words
for other apartment projects, except that Seller does agree that it will not use
the name "Clarion Crossing" with respect to any other apartment project located
in Raleigh, North Carolina), all licenses, franchises, permits, escrow
deposits, contract rights, claims, choses in action, transferable utility
contracts, surveys, blueprints, drawings, plans and specifications (including
structural, HVAC, mechanical and plumbing plans and specifications) Tenant lists
and data, booklets, manuals and promotional and advertising materials in the
possession or control of Seller, with respect to the Land, Improvements, and
Equipment. All of the foregoing real and personal property is hereinafter
collectively called the "Property." Notwithstanding the
foregoing, there shall be specifically excluded from the definition of Property
and from this sale: (x) any books, records and documents that Seller shall
reasonably request to retain for income tax or regulatory purposes; and (y) all
cash, bank accounts, and other revenues and income accruing prior to Closing.
ARTICLE 3. PURCHASE PRICE.
The Purchase Price shall be TEN MILLION SIX HUNDRED THOUSAND AND NO/100
DOLLARS ($10,600,000.00), and, subject to all prorations and adjustments
provided herein, the Purchase Price shall be paid as follows:
301. On or before the Contract Date, Buyer shall deposit with Escrow Agent
good funds in the amount of ONE HUNDRED TWENTY-FIVE THOUSAND AND NO/100 DOLLARS
($125,000.00) (the "Initial Deposit"). If Buyer does not terminate this
Agreement on or before the Due Diligence Date, then, in such event, on or before
the Due Diligence Date, Buyer shall deposit with Escrow Agent additional good
funds in the amount of ONE HUNDRED TWENTY-FIVE THOUSAND AND N0/100 DOLLARS
($125,000.00) (the "Second Deposit"). The Initial Deposit and the Second
Deposit, together with all interest earned thereon shall be the "Xxxxxxx Money".
Escrow Agent shall hold, administer and disburse the Xxxxxxx Money in accordance
with the terms and conditions of this Agreement. If Escrow Agent shall not
otherwise be required to disburse the Xxxxxxx Money as provided in this
Agreement, Escrow Agent shall pay the Xxxxxxx Money to Seller at Closing, and
Buyer shall receive a credit for the amount of the Xxxxxxx Money against the
Purchase Price. If Buyer shall fail or refuse to deposit the Xxxxxxx Money with
Escrow Agent on or before the Contract Date, this Agreement shall automatically
terminate, whereupon no party shall have any further duties, obligations or
liabilities under this Agreement, except the Continuing Obligations. All
interest earned on the Xxxxxxx Money shall be reported by Escrow Agent to the
Internal Revenue Service as income to Buyer. Buyer represents and warrants that
its Taxpayer Identification Number for purposes of reporting income to the
Internal Revenue Service is
302. The net amount of the Purchase Price, after crediting to Buyer the
Xxxxxxx Money and after making the prorations described in Article 4, shall be
paid at Closing in good funds immediately available in Atlanta, Georgia on the
Closing Date by bank wire transfer to an account to be specified by Seller.
ARTICLE 4. CASH ADJUSTMENTS AND CLOSING COSTS.
401. The following items shall be prorated between Seller and Buyer as of
midnight of the day immediately preceding Closing Date, and the net amount of
all such prorations shall increase or decrease, as the case may be, the net
amount payable by Buyer to Seller at Closing, pursuant to Section 302:
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401.1 Rents when, as, and if collected. Rents collected after Closing
shall first be applied to the payment of rents for the month in which Closing
occurs, next to the payment of other rents that accrued prior to Closing, and,
thereafter, to rents accruing after Closing. If and when any rents that accrued
prior to Closing are collected by Buyer, Buyer shall promptly pay said rents to
Seller. Buyer assumes no liability or responsibility for any rents accruing
prior to Closing except as expressly set forth in this Section. Buyer shall have
no obligation to institute any legal action or otherwise employ any attorney or
collection agent with respect to any past due rents. If any Tenant shall be
entitled to any free rent for any period of time on or after the Closing Date,
at Closing, Buyer shall receive a credit in an amount equal to all such free
rent accruing on and after the Closing Date.
401.2 All real and personal ad valorem property taxes imposed on the
ownership of the Property. If Closing shall occur before the amount of any of
said taxes shall have been determined, the proration of such taxes at Closing
shall be made on the basis of the tax rate for the immediately preceding year
applied to the valuation for the year in which Closing occurs. After Closing, at
such time when any of said taxes are capable of an exact determination, the
party having the information permitting the exact determination shall send to
the other party a detailed calculation of the exact determination so made.
Within thirty (30) days after both Seller and Buyer shall have received such
written calculation, Seller or Buyer, as the case may be, shall pay to the other
the net difference between the actual amount and the estimated amount upon which
the proration was made at Closing. All special assessments, revenue bond
charges, payback agreements or other charges of any type or nature whatsoever
against the Property, whether of record or not, assessed prior to Closing Date
shall be paid by Seller at Closing, regardless of whether or not the Government
Authority levying said assessment may allow said assessment to be paid after
Closing Date.
401.3 Utility charges, payable by Seller, including water, sewer,
electric, gas, telephone, trash removal, garbage removal and cable television.
To the extent practicable, the parties shall cooperate in seeking to obtain a
transfer of the utility accounts on Closing Date. If any utility accounts are
not transferred on Closing Date, the parties shall cooperate in arranging for
said transfer as soon as practicable after Closing Date. If any final reading
and billing cannot be obtained prior to Closing, said utility expense shall be
prorated at Closing based on an estimate, and when the final xxxx is received,
the actual amount shall be prorated between the parties, with credit being given
for the estimated amount used at Closing. Seller shall receive a credit for the
amount of any utilities deposits to the extent, if any, that they are
transferred to Buyer, if, and only if, Buyer consents to such transfer.
401.4 All charges under the Service Agreements.
402. All salaries, wages and fringe benefits owed to all employees who
operate or maintain the Property, regardless of whether said employees are
employed by Seller, Sellers' manager or one of their affiliates, shall be the
sole responsibility of Seller, and Buyer shall have no responsibility whatsoever
with respect to said expenses or obligations. Seller shall be responsible for
all costs accrued with respect to said employees including salaries, wages,
vacation benefits, employment taxes and withholding taxes.
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403. Premiums on insurance policies relating to the Property shall not be
prorated.
404. Seller shall transfer to Buyer, and Buyer shall assume responsibility
for and the benefit of all unused refundable security deposits paid by Tenants
to Seller.
405. Any item of income or expense required to be prorated under this
Article that for any reason is not prorated at Closing shall be prorated as soon
thereafter as practicable, If any mutual mistake, including any erroneous
mathematical calculation, is made in any proration at Closing, Seller and Buyer
shall, within ninety (90) days after Closing, correct said mistake and make any
payment required to produce an accurate proration.
406. Buyer shall pay all applicable state transfer and documentary stamp
taxes, Buyer's attorneys' fees, all title examination and abstracting fees, the
cost of the owner's title insurance policy, the cost of any lender's title
insurance policy, all recording costs, and the cost of any survey of the
Property. Seller shall pay its own attorneys' fees and all costs required for
the payoff of all existing mortgage loans secured by the Property, including any
applicable prepayment premium.
407. If any apartment that has been vacated by a Tenant and is not covered
by a Lease shall not be in rent ready condition on or before 10.00 a.m. on the
fifth (5th) day preceding the Closing Date, then, in such event, Buyer shall
receive a credit at Closing in an amount equal to the amount necessary to put
such apartment in rent ready condition. Buyer shall not receive any such credit
with respect to any apartment that is vacated by a Tenant after 10:00 a.m. on
the fifth (5th) day preceding the Closing Date, nor shall Buyer receive any such
credit with respect to any apartment that is covered by a Lease as of 10:00 a.m.
on the fifth (5th) day preceding the Closing Date.
ARTICLE 5. CLOSING DATE.
501. Before noon on the earlier of (a) the seventh (7th) day following the
Due Diligence Date or (b) September. 30, 1997, Closing of this transaction shall
be completed through Escrow Agent by wire transfer to an account specified by
Seller of the net amount due to Seller pursuant to Section 302.
ARTICLE 6. TITLE AND SURVEY.
601. At Closing, Seller shall convey fee simple title to the Property to
Buyer by fee simple deed, without warranty of title, subject to the Permitted
Title Exceptions. If Buyer's title insurance commitment or the Survey shall show
any title exception that is unacceptable to Buyer, then, in such event, Buyer
shall give written notice thereof to seller, and seller shall have the right,
but no obligation (except as expressly set forth below), to cause the
Encumbrance or title
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defect evidenced by said exception to be cured or satisfied at or prior to
Closing. If said objection shall not have been cured or satisfied by Seller
prior to Closing, then, in such event, at the option of Buyer, evidenced by
written notice to Seller, Buyer shall have the right to elect (a) to terminate
this Agreement; or (b) to close the purchase, regardless of such title
objection, thereby waiving such objection. If Seller shall properly cure or
satisfy all title objections at or prior to Closing, then, in such event, this
Agreement shall remain in full force and effect. Notwithstanding the foregoing,
if Buyer's title insurance commitment shall take exception for any lien that (i)
is monetary in nature, (ii) can be released by the payment of the underlying
obligation, and (iii) arose during the time when Seller owned the Property, said
lien shall be paid or bonded off by Seller at or prior to Closing.
602. Buyer shall have the right, but no obligation, to obtain a new survey
(the "Survey") of the Land and the Improvements. If the Survey shall show a
legal description different from Exhibit "A", and if the Survey is approved by
Seller and Title Company, which approval shall not be unreasonably withheld, in
addition to the deed provided for in Section 601, Seller shall execute and
deliver at Closing a quitclaim deed containing a legal description based on the
Survey.
ARTICLE 7. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller hereby represents and warrants to Buyer that:
701. (a) Seller is a limited partnership duly organized and, validly
existing under the laws of the State of Georgia; (b) Seller will be duly bound
by the actions of the legal entities executing and delivering this Agreement and
Closing Documents on behalf of Seller, and the individuals executing and
delivering said documents on behalf of said legal entities have all necessary
power and authority to do so; (c) Seller has or will have prior to Closing all
necessary power and authority to execute, deliver and perform this Agreement and
Closing Documents and to complete the transactions provided for herein; (d)
neither the execution, delivery nor performance of this Agreement or any of
Closing Documents, with or without notice, the passage of time, or both, (i)
will constitute or result in a violation or breach by Seller of any judgment,
order, writ, injunction, or decree issued against or imposed on Seller, (ii)
will result in a violation of any Legal Requirement or Private Covenant to which
Seller is a party or which otherwise affects the Property, or (iii) will give
any Person any right to accelerate any debts of Seller; and (e) all consents to
Seller's execution, delivery or performance of this Agreement required from any
Person, including all directors, shareholders, partners, Tenants and lenders of
Seller, have been or will be before Closing obtained in writing.
702. To the knowledge of Seller, no claim or demand has been made and there
is no litigation or administrative proceeding pending against or affecting
Seller that, if upheld or decided adversely to Seller, would impair Seller's
ability to consummate the transactions provided for in this Agreement, and, to
the knowledge of Seller, no such claim, demand, litigation or proceeding has
been threatened.
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703. Seller is exempt from the withholding requirements of Sections 1445
and 6039(c) of the Internal Revenue Code of 1986.
704. To the knowledge of Seller, Seller is the owner in fee simple of the
Property and has the power to convey the same. The provisions of this Section
704 shall terminate at Closing.
705. Seller is not subject to any agreements or arrangements, with the
exception of the provisions of the Existing Mortgage Documents relating to the
Property, that would prevent Seller from selling the Property to Buyer.
706. All necessary action has been taken by Seller to authorize the
execution of this Agreement and the performanco of the obligations contemplated
hereunder, subject to the provisions of the Existing Mortgage Documents.
ARTICLE 8. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer hereby represents and warrants to Seller that:
801. (a) Buyer is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Virginia; (b) Buyer will be duly
bound by the actions of the legal entities executing and delivering this
Agreement and Closing Documents on behalf of Buyer, and the individuals
executing and delivering said documents on behalf of said legal entities have
all necessary power and authority to do so; (c) Buyer has (or will have prior to
Closing) all necessary power and authority to execute, deliver and perform this
Agreement and Closing Documents and to complete the transactions provided for
herein; (d) neither the execution, delivery nor performance of this Agreement or
any of Closing Documents, with or without notice, the passage of time, or both,
(i) will constitute or result in a violation or breach by Buyer of any judgment,
order, writ, injunction, or decree issued against or imposed on Buyer, (ii) will
result in a violation of any Legal Requirement or Private Covenant to which
Buyer is a party or which otherwise affects the Property, or (iii) will give any
Person any right to accelerate any debts of Buyer; and (e) all consents to
Buyer's execution, delivery or performance of this Agreement required from any
Person, including all directors, shareholders, partners and lenders of Buyer,
have been (or will be before Closing) obtained in writing.
802. No claim or demand has been made and there is no litigation or
administrative proceeding pending against or affecting Buyer that, if upheld or
decided adversely to Buyer would impair Buyer's ability to consummate the
transactions provided for in this Agreement, and no such claim, demand,
litigation or proceeding has been threatened.
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ARTICLE 9. COVENANTS OF SELLER.
901, Seller hereby covenants and agrees with Buyer that, from the Contract
Date until Closing, Seller shall maintain and operate the Property in
substantially the same manner as it is being maintained and operated.
902. Seller hereby covenants and agrees with Buyer that, from the Contract
Date until Closing, Seller shall not, without the prior written consent of
Buyer, which consent shall not be unreasonably delayed, conditioned or withheld:
(a) enter into any new Lease or Service Agreement affecting the Property, except
in the ordinary course of business; (b) terminate, modify, amend or supplement
any of the Leases, except in the ordinary course of business; (c) collect any
rents with respect to any of the Leases more than two (2) months in advance of
the stated due date thereof, (d) initiate, consent to, approve, acquiesce in or
otherwise take any action with respect to any change in any zoning, special use
permit or subdivision regulation with respect to the Property; (e) terminate,
modify, alter, or supplement any appurtenant easement; (f) place any Encumbrance
on the Property; or (g) transfer, assign, convey or sell the Property to any
Person other than Buyer.
903. On or before the fifth (5th) Business Day following the Contract Date,
Seller shall deliver to Buyer copies of the following items:
903.1 Seller's existing owner's title insurance policy.
903.2 Seller's existing surveys of the Land and Improvements that are
in the possession of Seller.
903.3 All Service. Agreements.
903.4 Operating statements for the Property for the past twenty-four
(24) months.
903.5 A Schedule of Leases (rent roll) showing with respect to each
apartment, the name of the tenant, the amount of the monthly rent payable, the
apartment number, the date to which rent has been paid, any advance payment of
rent, and the amount of any escrow or security deposit held by Seller with
respect to said Lease.
903.6 A Schedule of Equipment.
903.7 A Schedule of all equipment leases relating to the Equipment.
903.8 A letter substantially in the form of Exhibit "D" signed by
Seller's Manager.
903.9 Such other items as may be reasonably requested by Buyer.
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904. Seller hereby covenants and agrees with Buyer that, from the Contract
Date until Closing, Seller will provide to Buyer, its agents, representatives
and contractors, the right to enter upon the Property at reasonable times to
make such reasonable investigations, surveys, tests and studies as may be
requested by Buyer; provided, however, that (a) neither Buyer, nor its agents,
representatives or contractors, shall interfere with the normal operation of the
Property or the quiet enjoyment of the Tenants or cause any material damage to
the Property, and (b) Buyer shall promptly pay for all work performed by order
of Buyer, its agents, representatives, or contractors with respect to the
Property and shall not cause the creation of any lien with respect to the
Property in favor of any Person, including any contractor, subcontractor,
materialman, mechanic, surveyor, architect or laborer; provided, however, that
no work ordered by Buyer shall be performed unless Buyer shall have given to
Seller at least twenty-four (24) hours prior notice by telephone.
Notwithstanding any provision of this Agreement, Buyer shall not have the right
to undertake any environmental study or test beyond the scope of a standard
"Phase I" audit without the prior written consent of Seller, which consent shall
not be unreasonably withheld. In connection with Buyer's physical inspection of
the Property, Buyer shall have the right, at Buyer's expense, to enter and
inspect each and every apartment unit and Seller shall make available a
representative to accompany Buyer on each and every such inspection. Buyer shall
indemnify and hold harmless Seller against and from all losses, claims, damages,
liabilities and expenses, including reasonable costs of investigation and legal
fees and disbursements, that may be imposed upon the Property or Seller or
incurred by Seller as a result of personal injury, property damage or liens
asserted by any Person arising from Buyer's exercise of its rights under this
section.
905. Prior to any entry by Buyer or any of Buyer's designees onto the
Property, Buyer shall: (a) secure a policy of commercial general liability
insurance, issued by an insurer reasonably satisfactory to Seller, covering all
Buyer's activities with respect to the Property, with a single limit of
liability (per occurrence and aggregate) of not less than Three Million and
No/100 Dollars ($3,000,000.00); and (b) deliver to Seller a certificate of
insurance, evidencing that such insurance policy is in full force and effect,
and evidencing that Seller has been named as an additional insured thereunder
with respect to all activities of Buyer and its designees with respect to the
Property. Such insurance shall be written on an "occurrence" basis, and shall be
maintained in full force and effect until the earlier of (x) the termination of
this Agreement and the conclusion of all entry onto the Property by Buyer; or
(y) Closing.
906. Prior to Closing, Buyer and its agents and representatives shall not
use for its or their own benefit (except for Buyer's investigation of the
Property with respect to this Agreement), and shall hold in strict confidence
and not disclose (except when required by law) (a) any data or information
relating to Seller, its partners, or the Property obtained from those parties in
connection with this Agreement that is clearly labeled on its face as
"Confidential," or (b) any data and information relating to the financial
statements, conditions and operations of the Property that is confidential in
nature and not generally known to the public (clauses (a) and (b) together, the
"Confidential Information"). If the transactions contemplated in this Agreement
are not consummated for any reason, buyer shall return to seller all data,
information and any other written material obtained by Buyer from Seller in
connection with these transactions and any
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copies, summaries or extracts thereof, and except as noted herein, shall refrain
from disclosing any of the Confidential Information to any third party or using
any of the Confidential Information for its own benefit or that of any other
Person,
907. Except as otherwise required by law, any notices, releases, statements
and communications to employees of Seller, and other persons operating or
maintaining the Property including parties to the Service Agreements and
Tenants, and to the general public and the press relating to the transactions
covered by this Agreement shall be made only at such times and in such manner as
may be mutually agreed upon by Buyer and Seller.
ARTICLE 10. CONDITIONS PRECEDENT.
1001. Notwithstanding any other provision of this Agreement, Buyer shall
not be obligated to purchase the Property unless and until each and every of the
following conditions precedent shall have been satisfied in full:
1001.1. Buyer shall have the right to terminate this Agreement for any
reason by sending to Seller, before Midnight on the Twenty First (21st) day
following the Contract Date (the "Due Diligence Date"), a written termination
notice. Upon such termination, Escrow Agent shall return the Eamest Money to
Buyer. Notwithstanding the foregoing, if Buyer does not receive all of the items
listed in Section 903 on or before the fifth (5th) Business Day following the
Contract Date, then, in such event, the Due Diligence Date shall be extended for
each day following the fifth (5th) Business Day following the Contract Date when
all of said items have not been received by Buyer.
1001.2. Prior to Closing: (a) Buyer shall have received all items
required by this Agreement to be delivered by Seller at or prior to Closing; (b)
there shall not exist any material default, material event of default, or event
that with the passage of time, the giving of notice, or both, would constitute a
material default or material event of default by Seller under this Agreement;
and (c) each representation and warranty made by Seller in this Agreement shall
be true and correct in every material respect.
1002. If said conditions precedent set forth in Section 1001 shall not have
been satisfied in prior to the applicable dates set forth above in this Article,
Buyer shall have the right, at its option: (a) to terminate this Agreement (upon
which termination, Escrow Agent shall return the Xxxxxxx Money to Buyer); (b) to
close the transaction contemplated hereby regardless of such unsatisfied
conditions precedent, without any reduction in the Purchase Price, or (c) to
exercise any other available right or remedy if Seller is in default under this
Agreement.
1003. Notwithstanding any other provision of this Agreement, Seller shall
not be obligated to sell the Property unless and until each and every of the
following conditions precedent shall have been satisfied in full:
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1003.1. At Closing: (a) Seller shall have received all material items
required by this Agreement to be delivered by Buyer at or prior to Closing; (b)
there shall not exist any material default, material event of default, or event
that with the passage of time, the giving of notice, or both, would constitute a
material default or material event of default by Buyer under this Agreement; and
(c) each representation and warranty made by Buyer in this agreement shall be
true and correct in every material respect.
1004. If each and every of said conditions precedent set forth in Section
1003 shall not have been satisfied in full prior to the applicable dates set
forth above in this Article, Seller shall have the right, at its option: (a) to
terminate this Agreement, whereupon Seller and Buyer shall have no further
rights, duties and obligations under this Agreement except for tile Continuing
Obligations; or (b) to close the transaction contemplated hereby regardless of
such unsatisfied conditions precedent; or (c) to exercise any other available
right or remedy if Buyer is in default under this Agreement.
ARTICLE 11. ITEMS TO BE DELIVERED BY SELLER AT CLOSING.
At Closing, Seller shall deliver to Buyer:
1101. Three (3) counterparts of a closing statement, itemizing all credits
between Seller and Buyer and all closing costs disbursed through the escrow
account of the Escrow Agent in connection with Closing.
1102. If Seller is a corporation or if Seller is a partnership and any or
all of the general partners of Seller is a corporation, (a) a true, correct and
complete copy of the articles of incorporation of Seller (or all corporate
general partners of Seller, as applicable), certified by the Secretary or an
Assistant Secretary of Seller (or all corporate general partners of Seller, as
applicable), together with evidence that Seller (or all corporate general
partners of Seller, as applicable) is duly qualified to do business in each
state in which a part of the Property is located; (b) copies of corporate
resolutions duly adopted by the Board of Directors of Seller (or all corporate
general partners of Seller, as applicable) authorizing the execution, delivery
and performance of this Agreement, duly certified by the Secretary or an
Assistant Secretary of Seller (or all corporate general partners of Seller, as
applicable); (c) an incumbency certificate, evidencing that the individuals
executing and delivering this Agreement and all of Closing Documents on behalf
of Seller (or all corporate general partners of Seller, as applicable) are duly
elected, qualified and serving officers of Seller (or all corporate general
partners of Seller, as applicable), setting forth the particular office held by
each of said individuals, duly executed and delivered by the Secretary or an
Assistant Secretary of Seller (or all corporate general partners of Seller, as
applicable).
1103. If Seller is a partnership, (a) a true, correct and complete copy of
the partnership agreement and certificate of partnership, if any, of Seller,
certified by a general partner of Seller, together with evidence that Seller is
duly qualified to do business in each state in which a part of
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the Property is located; (b) copies of written authorizations, approvals or
consents properly executed by all partners who have not executed this Agreement
and Closing Documents authorizing the execution, delivery and performance of
this Agreement and Closing Documents, duly certified by a general partner of
Seller; (c) an incumbency certificate, evidencing that the partners executing
and delivering this Agreement and all of Closing Documents on behalf of Seller
are duly qualified general partners of Seller, duly executed and delivered by a
general partner of Seller; all of which documents shall be reasonably acceptable
to Title Company.
1104. A duly executed certificate by Seller reaffirming the representations
and warranties made in Article 7 of this Agreement, except for the sections in
Article 7 that are specified to terminate at Closing.
1105. An updated Schedule of Leases in effect at the time of Closing,
containing all the information required by, and otherwise conforming to the
provisions of Section 903.5, certified to be true, correct, and complete in all
material respects by Seller's Manager.
1106. A duly executed fee simple deed, without warranty, in form acceptable
for recording, conveying all Sellers' right, title and interest in and to the
Land and the Improvements, subject to the Permitted Title Exceptions.
1107. A duly executed xxxx of sale assigning and transferring to Buyer: (a)
all the Equipment, with a general warranty of free and clear title, subject only
to the Permitted Title Exceptions; and (b) all intangible property constituting
a part of the Property, including all assignable licenses and permits relating
to the operation of the Property and the existing telephone number of the
Property, with a limited warranty of free and clear title, warranting said title
with respect to all claims made by, through or under Seller, subject only to the
Permitted Title Exceptions.
1108. Two counterparts of a duly executed assignment of leases and
assumption agreement in which Seller assigns to Buyer all Seller's right, title
and interest as landlord in and to all the Leases, subject to the Permitted
Title Exceptions, and agrees to defend, indemnify and hold harmless Buyer, its
manager and their affiliates with respect to all claims, damages, liabilities,
losses, actions, and expenses, including all attorneys' fees and expenses at
both the trial and appellate levels, that may be incurred by any of said
indemnified parties as a result of Seller's failure to fulfill the landlord's
duties and obligations accruing under the Leases prior to Closing, and in which
Buyer assumes all landlord's obligations and duties accruing subsequent to
Closing under the Leases, acknowledges receipt from Seller of the deposits for
which Buyer is receiving a credit, and agrees to defend, indemnify and hold
harmless Seller, its manager, and their affiliates with respect to all claims,
damages, liabilities, losses, actions, and expenses, including all attorneys'
fees and expenses at both the trial and appellate levels, that may be incurred
by any of said indemnified parties as a result of Buyer's failure to fulfill the
landlord's duties and obligations accruing under any or all the Leases
subsequent to Closing. Landlord's duties and obligations, as used in this
Section, shall include the obligations to hold and apply all Tenant deposits in
accordance with the Leases and applicable law.
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1109, Two counterparts of a duly executed assignment of contracts and
assumption agreement in which: (a) Seller shall assign to Buyer all Sellers'
right, title and interest in and to (i) the Service Agreements, and (ii) all
warranties and guaranties, if any, of which Seller is the beneficiary with
respect to the Property; (b) Seller shall agree to defend, indemnify and hold
harmless Buyer, its manager, and their affiliates with respect to all claims,
damages, liabilities, losses, actions, and expenses, including all attorney's
fees and expenses at both the trial and appellate levels, that may be incurred
by any of said indemnified parties as a result of Sellers' failure to fulfill
its duties and obligations accruing under the assumed Service Agreements prior
to Closing, and (c) Buyer shall assume all Sellers' duties and obligations
accruing subsequent to Closing under the assumed Service Agreements and agrees
to defend, indemnify and hold harmless Seller, its manager, and their affiliates
with respect to all claims, including all attorney's fees and expenses at both
the trial and appellate levels, damages, liabilities, losses, actions, and
expenses that may be incurred by any of said indemnified parties as a result of
Buyer's failure to fulfill said assumed duties and obligations accruing under
the assumed Service Agreements subsequent to Closing. Seller shall also deliver
to Buyer all originals of the assumed Service Agreements and the warranties and
guaranties assigned pursuant to this Section, to the extent that Seller has them
in its possession or is reasonably able to obtain them prior to Closing.
1110. A duly executed affidavit of title with respect to the Property in
form and substance reasonably satisfactory to the Title Company.
1111. A duly executed certificate with respect to Section 1445 of the
Internal Revenue Code of 1986, as amended, stating, among other things, that
Seller is not a foreign corporation or non-resident alien, as defined in the
Code and regulations issued pursuant thereto.
1112. A duly executed letter, in form reasonably acceptable to both Seller
and Buyer, addressed to each of the Tenants stating that the Property, the
Leases and the security deposits have been conveyed, transferred and assigned to
Buyer and that all rents, utilities charges and other payments that Tenants are
obligated to pay to the landlord after Closing should be paid to Buyer or
Buyer's designee.
1113. All original Leases and Service Agreements (or copies if the
originals are not available), to the extent they are in the possession of
Seller.
1114. Physical possession of all the Property and all keys, including all
master keys, to all the Improvements in the possession or control of Seller and
its agents, including its managing and leasing agents.
1115. A Certificate of Representations and Warranties from Seller's
Manager, substantially in the form of Exhibit "C".
1116. A copy of a written termination of the management agreement presently
existing between Seller and Seller's Manager with respect to the Property.
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1117. Such other documents as may be reasonably requested by Title Company
or Buyer.
ARTICLE 12. ITEMS TO BE DELIVERED BY BUYER AT CLOSING.
At Closing, Buyer shall deliver to Seller:
1201. The Closing statements described in Section 1101.
1202. A certificate executed by Buyer reaffirming the representations and
warranties made in Article 8 of this Agreement.
1203. The duly executed assignment of leases and assumption agreement
described in Section 1108 hereof.
1204. The duly executed assignment of contracts and assumption agreement
described in Section 1109 hereof.
1205. Such other documents as may be reasonably requested by Title Company
or Seller.
ARTICLE 13. DAMAGE, DESTRUCTION OR CONDEMNATION.
1301. If, prior to Closing, to Seller's knowledge, there shall occur any
damage or destruction to the Property, including termite damage or infestation,
Seller shall give prompt written notice thereof to Buyer. If such damage or
destruction would require more than One Hundred Thousand and No/100 Dollars
($100,000.00) or longer than thirty (30) days to repair, Buyer shall have the
option, in its sole judgment and discretion, (a) to terminate this Agreement or
(b) to proceed with Closing without any adjustment in the Purchase Price, in
which event, at Closing, Seller shall transfer and assign to Buyer all Seller's
right, title and interest in and to all proceeds from all termite bonds, if any,
and insurance policies owned by Seller with respect to the Property (including
loss of rents insurance benefits accruing on and after Closing Date, with
Seller's retaining such loss of rents insurance benefits accruing prior to
Closing Date) for such damage or destruction, after deduction therefrom of any
reasonable costs incurred by Seller to collect such proceeds and any amounts
expended by Seller prior to Closing for the repair or restoration of the
Property, and, at Closing, Buyer shall receive a credit against the Purchase
Price in an amount equal to the applicable deductible on said bonds or insurance
policies. If Buyer shall elect to terminate this Agreement, Buyer shall give
written notice thereof to Seller and to Escrow Agent within ten (10) days after
Buyer shall have received written notice of such damage or destruction (the
Closing Date shall be extended if necessary to provide said ten (10) day
period). If Buyer does not give such notice within such time, Buyer shall be
conclusively deemed to have elected to proceed with Closing, and shall not have
any further right to terminate this Agreement as a result of such damage or
destruction.
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1302. If, prior to Closing, there shall occur any damage or destruction to
the Property that would require One Hundred Thousand and no/100 Dollars
($100,000.00) or less and not longer than thirty (30) days to repair, Buyer
shall not have the option to terminate this Agreement, as provided in Section
1301(a), but Closing shall proceed in the manner specified in Section 1301 (b).
1303. Buyer acknowledges that Seller makes no representation or warranty as
to the amount of any termite bond, if any, or insurance policy proceeds, if any,
that will be available to Buyer in the event of a Closing pursuant to Section
1301(b) or Section 1302.
1304. If, prior to Closing, to the knowledge of Seller, there shall occur
any Condemnation of the Property that is likely to have a material adverse
effect on the use of the Property, Seller shall give prompt written notice
thereof to Buyer, and Buyer shall have the option, in its sole judgment and
discretion, either (a) to terminate this Agreement by giving written notice of
termination to Seller within ten (10) days after Buyer shall have received
written notice of such Condemnation (the Closing Date shall be extended if
necessary to provide said ten (10) day period) or (b) to complete the
transaction provided for in this Agreement, in which event, at Closing, all
Condemnation proceeds, if any, collected by Seller prior to Closing shall be
paid by Seller to Buyer, after deduction therefrom of any reasonable costs
incurred by Seller to collect such proceeds and any amounts expended by Seller
prior to Closing for the repair or restoration of the Property, and, at Closing,
Seller shall assign to Buyer all Condemnation proceeds that have not been paid
at that time.
1305. If, prior to Closing, there shall occur any Condemnation of the
Property that is not likely to have a material adverse effect on the use of the
Property, Buyer shall not have the option to terminate this Agreement, as
provided in Section 1304(a), but Closing shall proceed in the manner specified
in Section 1304(b). Buyer acknowledges that Seller makes no representation or
warranty as to the amount of any Condemnation proceeds, if any, that will be
available to Buyer in the event of a Closing pursuant to Section 1304(b) or this
Section 1305.
1306. For purposes of Sections 1304 and 1305, a Condemnation shall be
deemed to have a material adverse effect on the use of the Property if (a) it
causes the loss of more than five percent (5%) of all the parking spaces, (b) it
causes the Property to violate any zoning ordinance, or (c) it reduces the
number or size of any buildings composing the Property.
1307. The risk of loss with respect to the Property prior to Closing shall
be born by Seller.
ARTICLE 14. BROKERAGE COMMISSIONS.
1401. Seller shall indemnify, hold harmless and defend Buyer against all
claims for sales commissions or other similar compensation that may be
asserted by any Person with respect to this transaction to the extent that the
liability for said compensation shall be based upon actions of Seller. Buyer
shall indemnify, hold harmless and defend Seller against all claims
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for sales commissions or other similar compensation that may be asserted by any
Person, including Austin Realty Advisors, with respect to this transaction to
the extent that the liability for said compensation shall be based upon actions
of Buyer.
ARTICLE 15. REMEDIES ON DEFAULT.
1501. If (a) Seller shall not be in default in any material respect in its
performance of this Agreement, and (b) Buyer shall fail or refuse to acquire the
Property as provided in this Agreement, then, in such event, Seller shall have
the option to terminate this Agreement by giving written notice of termination
to Buyer and Escrow Agent, whereupon Escrow Agent shall pay to Seller all the
Xxxxxxx Money being held by Escrow Agent, as liquidated damages, which shall be
the sole remedy of Seller against Buyer for said failure or refusal to acquire
the Property. Seller and Buyer hereby agree that if Buyer should default on its
obligation to acquire the Property pursuant to this Agreement, (a) the amount of
damages to Seller would be difficult, if not impossible, to determine, and (b)
the amount of liquidated damages stated above constitutes a reasonable good
faith estimate by the parties, as of the Contract Date, of the actual damages
that Seller might incur if Buyer should fail or refuse to acquire the Property
pursuant to this Agreement. If Buyer shall default with respect to any indemnity
set forth in Section 904, 1401 or 1601, then, in such event, Seller shall have
all rights and remedies available at law or in equity with respect to such
default, and the foregoing liquidated damages provision shall not apply to such
default, but the Xxxxxxx Money shall be available as a source of payment of any
such nonliquidated damages, so long as it has not been paid to satisfy the
liquidated damages obligation.
1502. If (a) Buyer shall not be in default in any material respect in its
performance of this Agreement, and (b) Seller shall fail or refuse to convey the
Property to Buyer as provided in this Agreement, then, in such event, as its
sole and exclusive remedy for such failure or refusal to sell, Buyer shall have
the right to exercise any one of the following remedies: (x) to terminate this
Agreement, subject to Section 1715(j); or (y) to xxx Seller for specific
performance. Seller shall not be liable for monetary damages for its failure or
refusal to sell the Property; provided, however, that if Buyer shall be unable
to obtain a decree of specific performance, because of the intervening rights of
an innocent third party, as a result of any breach of any covenant contained in
this Agreement by Seller, then, in such event, Seller shall be liable to Buyer
for monetary damages in an amount equal to the sum of (a) Buyer's reasonable out
of pocket expenses incurred in connection with this Agreement, plus (b) the
lesser of (i) One Hundred Thousand and No/100 Dollars ($100,000.00); or (ii) the
amount of other actual damages suffered by Buyer, but in no event shall Seller
be liable for any punitive damages, indirect damages, or consequential damages.
1503. If any representation or warranty in this Agreement is true as of the
Contract Date and is untrue as of Closing Date as a result of events occurring
between the Contract Date and Closing Date other than an act or omission on the
part of the party (the "Representing Party") making said representation or
warranty, and the Representing Party gives written notice to the other party
(the "Beneficiary Party") before Closing that said events have occurred, then,
in such
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event, the Beneficiary Party's sole remedy shall be either: (a) to waive said
representation or warranty in writing and proceed with Closing of this
transaction without any change in the Purchase Price; or (b) to terminate this
Agreement by giving written notice to the other party prior to Closing. If
either party terminates this Agreement in accordance with the immediately
preceding sentence, Escrow Agent shall promptly refund to Buyer all the Xxxxxxx
Money being held by Escrow Agent, whereupon neither Seller nor Buyer shall have
any further rights or duties under this Agreement, except for the Continuing
Obligations, Notwithstanding the foregoing, if (a) any representation or
warranty made by Seller in this Agreement is true on the Contract Date, but is
untrue at Closing, (b) said representation or warranty relates to the Schedule
of Leases or to the performance by any Tenant, and (c) the untruthfulness of
said representation or warranty is not caused by any breach of this Agreement by
Seller, then, in such event, Buyer shall not have the right to terminate this
Agreement because of the untruthfulness of said representation or warranty as of
Closing.
1504. If Buyer purchases the Property from Seller, and if (a) Buyer shall
breach any covenant contained in this Agreement, (b) any representation made in
this Agreement by Buyer shall be untrue in any material respect, (c) Buyer shall
breach any warranty contained in this Agreement in any material respect, or (d)
Buyer shall fail or refuse to perform, satisfy or pay when due any duty,
obligation or liability that Buyer has assumed under this Agreement, then, in
such event, Buyer shall and does hereby agree to defend, indemnify and hold
harmless Seller from and against all losses, claims, damages, liabilities and
expenses, including reasonable costs of investigation and legal fees and
disbursements at both the trial and appellate levels, that Seller may incur as a
result thereof
1505. If Buyer purchases the Property from Seller, and if (a) Seller shall
breach any covenant contained in this Agreement, (b) any representation made in
this Agreement by Seller shall be untrue in any material respect, (c) Seller
shall breach any warranty contained in this Agreement in any material respect,
or (d) Seller shall fail or refuse to perform, satisfy or pay any duty,
obligation or liability of Seller that Buyer is not required to assume under
this Agreement, then, in such event, Seller shall and does hereby agree to
defend, indemnify and hold harmless Buyer from and against all losses, claims,
damages, liabilities and expenses, including reasonable costs of investigation
and legal fees and disbursements at both the trial and appellate levels, that
Buyer may incur as a result thereof.
1506. Notwithstanding any other provision of this Agreement, if Buyer
purchases the Property from Seller, Buyer shall have no right to assert any
remedies against Seller for the breach of any representation or warranty by
Seller if Buyer had knowledge of said breach prior to Closing.
ARTICLE 16. ESCROW AGENT.
1601. In performing its duties hereunder, Escrow Agent shall not incur any
liability to anyone for any damages, losses or expenses, except for its gross
negligence or willful misconduct, and it shall accordingly not incur any such
liability with respect (a) to any action
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taken or omitted in good faith upon advice of its counsel or (b) to any action
taken or omitted in reliance upon any instrument, including any written notice
or instruction provided for in this Agreement, not only as to its due execution
and the validity and effectiveness of its provisions, but also as to the truth
and accuracy of any information contained therein, that Escrow Agent shall in
good faith believe to be genuine, to have been signed or presented by a proper
Person, and to conform to the provisions of this Agreement. Seller and Buyer
hereby agree to indemnify and hold harmless Escrow Agent against all losses,
claims, damages, liabilities and expenses, including reasonable costs of
investigation and legal fees and disbursements, that may be imposed upon Escrow
Agent or incurred by Escrow Agent in connection with its acceptance or
performance of its duties hereunder, including any litigation arising out of
this Agreement or involving the subject matter hereof If any dispute shall arise
between Seller and Buyer sufficient in the discretion of Escrow Agent to justify
its doing so, Escrow Agent shall be entitled to tender into the registry or
custody of the clerk of the Superior Court of the County in which the Land is
located, or the clerk for the United States District Court, having jurisdiction
over the county in which the Land is located, any or all money, property or
documents in its hands relating to this Agreement, together with such legal
pleadings as it shall deem appropriate, and thereupon be discharged from all
further duties and liabilities under this Agreement. Seller and Buyer shall bear
all costs and expenses of any such legal proceedings.
1602. If Buyer does not terminate this Agreement pursuant to Section 1001.3
prior to the Due Diligence Date, and if thereafter Seller or Buyer (the
"Objecting Party") and Escrow Agent shall receive written notice ("Xxxxxxx Money
Demand") from the other party ("Demanding Party") alleging that the Demanding
Party is at that time entitled to receive payment of the Xxxxxxx Money under
this Agreement, and if the Objecting Party in good faith believes that the
Demanding Party is not at that time entitled to receive payment of the Xxxxxxx
Money, then, in such event, the Objecting Party shall have the right to give
written notice to the Demanding Party and to the Escrow Agent objecting to the
payment of the Xxxxxxx Money to the Demanding Party. At any time when Escrow
Agent shall receive any Xxxxxxx Money Demand, Escrow Agent shall hold the
Xxxxxxx Money for at least five (5) Business Days after receipt by Escrow Agent
of said Xxxxxxx Money Demand before paying the Xxxxxxx Money to any Person. If
Escrow Agent shall receive any such written objection prior to the payment of
the Xxxxxxx Money to the Demanding Party, then, in such event, Escrow Agent
shall hold the Xxxxxxx Money until receipt by Escrow Agent of either (a)
consistent written instructions from Seller and Buyer with respect to the
disposition of the Xxxxxxx Money or (b) a court order issued by a court of
competent jurisdiction directing the disposition of the Xxxxxxx Money. Nothing
contained in this Section shall prevent Escrow Agent from exercising any of its
rights under Section 1601.
ARTICLE 17. OTHER TERMS AND CONDITIONS.
1701. Time is of the essence of each and every provision in this Agreement.
If any provision of this Agreement requires that action be taken on or before a
particular date that falls on a day that is not a Business Day, the time for the
taking of such action shall automatically be postponed until the next following,
Business Day.
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1702. The Continuing Obligations shall survive the execution and delivery
of this Agreement, the termination of this Agreement prior to Closing (if
applicable), Closing, and the delivery of Closing Documents, except as otherwise
specifically agreed in writing by Seller and Buyer or as may be satisfied by the
delivery of Closing Documents. Except as otherwise provided in this Agreement,
all other representations, warranties, covenants, indemnities, agreements and
obligations under this Agreement shall survive Closing and the delivery of
Closing Documents for a period of ninety (90) days after Closing Date, and any
claim thereunder to be effective must be asserted in writing prior to such
expiration, except as otherwise specifically agreed to in writing by Seller and
Buyer or as may be satisfied by the delivery of Closing Documents, and none of
such representations, warranties, covenants, indemnities, agreements or
obligations shall merge with the transfer of title. The representations,
warrantees, covenants, indemnities, agreements and obligations under the Closing
Documents shall not be affected by the provisions of this Section 1702.
1703. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective representatives, heirs, successors and
assigns, provided, however, that neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned prior to Closing by either
party without the prior written consent of the other party, which consent may be
withheld for any reason, or for no reason, at the sole and absolute discretion
of the party whose consent is required. Seller hereby consents to an assignment
of the rights of Buyer under this Agreement by Buyer to Cornerstone Realty
Income Trust, Inc., a Virginia corporation.
1704. Any notice, request, demand, instruction or other communication (a
"Notice') to be given to any party with respect to Us Agreement may be given
either by the party or its counsel and shall be deemed to have been properly
sent and given when delivered by hand, when sent by certified mail, return
receipt requested, or by reputable overnight courier service, or when
transmitted by facsimile. If delivered by hand, a Notice shall be deemed to have
been sent, given and received when actually delivered to the address specified
in, or pursuant to, this section. If sent by certified mail, a Notice shall be
deemed to have been sent and given when properly deposited with the United
States Postal Service with the proper address and postage paid therewith, and
shall be deemed to have been received on the third (3rd) Business Day following
the date of such deposit, whether or not actually received by addressee. If sent
by courier service, a Notice shall be deemed to have been sent and given when
delivered to said courier service with the proper address and delivery charges
either prepaid or charged to a proper account, and shall be deemed to have been
received when actually delivered to the address specified in, or pursuant to,
this section. If sent by facsimile, a Notice shall be deemed to have been sent,
given and received when transmitted to the proper facsimile number, provided
that said Notice shall also be sent on the same date by overnight courier
service, in compliance with the immediately preceding sentence. The addresses to
which Notices shall be sent are:
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If to Seller:
Clarion Crossing Limited Partnership
c/o Xx. Xxxxxx X. Xxxxxxxx, President
Sterling Trust
Xxx Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
With a copy to:
Xxxxxx X. Xxxx, Esq.
Xxxx Xxx Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
If to Buyer:
Cornerstone Realty Group, Inc.
Attn: Mr. Xxx X. Remppies
V.P. Acquisitions
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Tel. 000-000-0000
Fax: 000-000-0000
With copies to:
Xxxxxxxxxx & Xxxxxxxxxx
Attn: Xxxxx Xxxxxxxxxx, Esq.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
and
Xxx Xxxxxx, Esq.
Xxxxxxx, Xxxxxx & Xxxxxxx
500 UCB Plaza
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
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If to Escrow Agent:
First American Title Insurance Company
x/x Xxx Xxxxx Xxxxxxx xx Xxxxx Xxxxxxxx
Attn: Xxxxx X. Xxxxxxx
000 Xxxxxxxxxxxx Xxxxxx Xxxx
X.X. Xxx 0000 Xxxxxxx, XX 00000
Each party shall have the right to change the address or facsimile number to
which Notices to it are to be sent by giving written notice of said change to
the other parties as provided in this Section. If any notice shall be given in
accordance with this section and the addressee shall fail or refuse to accept
delivery of said Notice, or the address or facsimile number specified in, or
pursuant to, this section shall not be the correct address or facsimile number,
then, in such event, said Notice shall conclusively be deemed to have been
received by the addressee on the earlier to occur of (a) the time specified
above in this section or (b) the date when an attempt is made to deliver said
Notice to the address or facsimile number specified in, or pursuant to, this
section.
1705. This Agreement constitutes the sole and entire agreement between the
parties hereto, and no modification, alteration, or amendment of this Agreement
shall be binding unless signed by the party against whom such modification,
alteration, or amendment is sought to be enforced. No representation, warranty,
covenant, inducement or obligation not included in this Agreement shall be
binding upon either party hereto.
1706. Each party agrees to use reasonable efforts to cause all conditions
precedent to Closing to be satisfied promptly.
1707. This Agreement shall be governed by and construed in accordance with
the laws of the State of North Carolina. If any provision of this Agreement
shall be declared invalid or unenforceable under applicable law, then the
performance of such portion shall be excused to the extent of such invalidity or
unenforceability, but the remainder of this Agreement shall remain in full force
and effect; provided, however, that if the excused performance of such
unenforceable provision shall materially adversely affect the interest of either
party, the party so affected shall have the right to terminate this Agreement by
written notice thereof to the other party and Escrow Agent, whereupon this
Agreement shall become null and void, except for those indemnities that are
specified in this Agreement to survive the termination of this Agreement prior
to Closing.
1708. This Agreement may be executed in multiple counterparts, each of
which shall be an original and all of which together shall constitute one and
the same Agreement. It shall not be necessary that each party execute: each
counterpart, or that any one counterpart be executed by more than one party, so
long as each party executes at least one counterpart.
1709. Each party shall have the right, in its sole discretion, for any
reason or for no reason, to waive any condition precedent or contingency
contained in this Agreement for the
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benefit of said party, provided that such waiver shall be in writing and if any
such waiver occurs, this Agreement shall be interpreted and construed as if such
condition precedent or contingency had never been a part of this Agreement,
except to the extent that said condition precedent or contingency is stated in
this Agreement to be also for the benefit of the other party.
1710. If any dispute shall arise between Seller and Buyer with respect to
this Agreement, the prevailing party in any related litigation shall be
reimbursed by the other for all reasonable costs incurred as a result of said
dispute, including reasonable attorneys' fees at both the trial and appellate
levels.
1711. It is hereby agreed that no Person other than the named parties
hereto, the partners in Seller or their successors or permitted assigns shall
have any claim, right, title or interest to or in any amounts by virtue of this
Agreement. This Agreement is personal to the named parties hereto, the partners
in Seller or their successors or permitted Assigns, and is not intended for the
benefit of, and is not intended to be relied upon by any other Person, and no
other Person (or any other Person acting on its behalf) shall be entitled to the
benefit of or to enforce this Agreement.
1712. Seller shall have the right to consummate this transaction as part of
a tax deferred exchange pursuant to Internal Revenue Code Section 103 1. In such
event, Seller shall have the right to assign its rights and obligations under
this Agreement to a qualified intermediary, as a part of, and in furtherance of,
such tax deferred exchange. Buyer agrees to assist and cooperate in such
exchange for the benefit of Seller, and Buyer further agrees to execute any and
all documents reasonably requested by Seller in connection with such exchange.
As part of such exchange, the Property shall be conveyed directly to Buyer, and
Buyer shall not be obligated to acquire or convey any other property as part of
such exchange or to incur any additional expenses, obligations or liabilities.
Seller shall indemnify, hold harmless and defend Buyer with respect to any such
additional expenses, obligations or liabilities,
1713. Neither Seller nor any entity comprising Seller shall have any
liability or responsibility for any duty, obligation or liability under this
Agreement beyond its interest in the Property. No recourse shall be sought, and
no action shall be taken, against any other assets of Seller or any entity
comprising Seller, for the payment or satisfaction of any such duty, obligation,
or liability.
1714. The following rules of construction shall apply for all purposes of
this Agreement and all documents or instruments supplemental hereto, unless the
context shall otherwise clearly require:
(a) The terms "include", "including" and similar terms shall be
construed followed by the phrase "without being limited to".
(b) [This subsection intentionally omitted.]
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(c) Words of masculine, feminine or neuter gender shall mean and
include the correlative words of the other genders, and words importing the
singular number shall mean and include the plural number, and vice versa.
(d) The term "provisions", when used with respect hereto or to any
other document or instrument, shall be construed as if preceded by the phrase
"terms, covenants, agreements, requirements, conditions and/or".
(e) All section and exhibit captions herein are used for convenience
and reference only and in no way define, limit or describe the scope or intent
of, or in any way affect, this Agreement.
(f) No inference in favor of or against any party shall be drawn from
the fact that such party has drafted any portion hereof.
(g) Each exhibit referred to in this Agreement is hereby incorporated
herein by reference and made a part of this Agreement with the same effect as if
it were restated word for word in this Agreement.
(h) If any party is designated in this Agreement to be more than one
Person, then, in such event, each Person so designated shall be jointly and
severally liable for all duties, obligations and liabilities of said party.
(i) [This subsection intentionally omitted.]
(j) If Buyer intends to terminate this Agreement pursuant to any
provision of this Agreement giving Buyer the right to terminate this Agreement,
Buyer shall give written notice of termination to Seller and Escrow Agent. Upon
receipt of any such termination notice by Escrow Agent, Escrow Agent : shall
promptly refund all the Xxxxxxx Money to Buyer and no party shall have any
further duties, obligations or liabilities under this Agreement except the
Continuing Obligations.
(k) Whenever the phrase "to the knowledge of," or any similar phrase is
used in this Agreement with respect to Seller, said phrase shall refer to the
actual present knowledge, without any investigation, of Xxxxxx X. Xxxxxxxx, who
is the asset manager of the Property for Seller.
(1) BUYER ACKNOWLEDGES AND AGREES THAT BUYER IS EXPERIENCED IN THE
OWNERSHIP AND OPERATION OF PROPERTIES SIMILAR TO THE PROPERTY AND THAT BUYER IS
QUALIFIED TO INSPECT AND EVALUATE THE PROPERTY. BUYER ACKNOWLEDGES THAT, EXCEPT
FOR THE EXPRESS REPRESENTATIONS, WARRANTIES AND COVENANTS (DEFINED BELOW), BUYER
IS FULLY RELYING ON (OR REPRESENTATIVES') INSPECTIONS OF THE PROPERTY AND NOT
UPON ANY STATEMENTS (ORAL OR WRITTEN) WHICH MAY HAVE BEEN MADE OR MAY BE MADE BY
SELLER OR ANY OF ITS REPRESENTATIVES. BUYER
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ACKNOWLEDGES THAT BUYER HAS (OR REPRESENTATIVES HAVE), OR PRIOR TO THE CLOSING
DATE WILL HAVE, THOROUGHLY INSPECTED AND EXAMINED THE PROPERTY TO THE EXTENT
DEEMED NECESSARY BY BUYER TO ENABLE BUYER TO EVALUATE THE PHYSICAL, LEGAL AND
FINANCIAL CONDITION OF THE PROPERTY AND ALL OTHER ASPECTS OF THE PROPERTY
(INCLUDING THE ENVIRONMENTAL CONDITION OF THE PROPERTY, COMPLIANCE OR NON-
COMPLIANCE OF THE PROPERTY WITH ALL LEGAL REQUIREMENTS, INCLUDING ALL ZONING
ORDINANCES, BUILDING CODES AND SET-BACK REQUIREMENTS, AND COMPLIANCE OR
NON-COMPLIANCE OF THE PROPERTY WITH ALL RESTRICTIVE COVENANTS, EASEMENTS, AND
OTHER PRIVATE AGREEMENTS), AND BUYER ACKNOWLEDGES THAT, EXCEPT FOR THE EXPRESS
REPRESENTATIONS, WARRANTIES AND COVENANTS, BUYER IS RELYING SOLELY UPON ITS OWN
(OR ITS REPRESENTATIVES') INSPECTION, EXAMINATION AND EVALUATION OF THE
PROPERTY. AS A MATERIAL PART OF THE CONSIDERATION FOR THIS AGREEMENT AND THE
PURCHASE, SUBJECT TO ARTICLES 9, 10 AND 13 OF THIS AGREEMENT, BUYER. HEREBY
AGREES TO ACCEPT THE PROPERTY ON THE CLOSING DATE IN ITS "AS IS," "WHERE IS"
CONDITION, WITH ALL FAULTS, AND WITHOUT REPRESENTATIONS AND WARRANTIES OF ANY
KIND, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW, EXCEPT ONLY (A) THE
TITLE AND OWNERSHIP REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THE
CLOSING DOCUMENTS AND (B) THE REPRESENTATIONS, WARRANTIES AND COVENANTS OF
SELLER EXPRESSLY SET FORTH IN THIS AGREEMENT [(A) AND (B) BEING HEREIN REFERRED
TO COLLECTIVELY AS THE "EXPRESS REPRESENTATIONS, WARRANTIES AND COVENANTS"],
WITHOUT IN ANY WAY LIMITING THE GENERALITY OF THE FOREGOING, IN CONNECTION WITH
THE SALE OF THE PROPERTY TO BUYER, EXCEPT FOR THE EXPRESS REPRESENTATIONS,
WARRANTIES AND COVENANTS, THE SALE OF THE PROPERTY IS WITHOUT ANY WARRANTY, AND
SELLER AND OFFICERS, AGENTS, DIRECTORS, EMPLOYEES, ATTORNEYS, CONTRACTORS AND
AFFILIATES (COLLECTIVELY, "RELATED PARTIES") HAVE MADE NO, AND EXPRESSLY
SPECIFICALLY DISCLAIM, AND BUYER ACCEPTS THAT SELLER AND RELATED PARTIES HAVE
DISCLAIMED, ANY AND ALL REPRESENTATIONS, GUARANTIES OR WARRANTIES, EXPRESS OR
IMPLIED, OR ARISING BY OPERATION OF LAW (EXCEPT THE EXPRESS REPRESENTATIONS,
WARRANTIES AND COVENANTS AS HEREINABOVE PROVIDED), OF OR RELATING TO THE
PROPERTY, INCLUDING: (1) THE USE, INCOME POTENTIAL, EXPENSES, OPERATION,
CHARACTERISTICS OR CONDITION OF THE PROPERTY OR ANY PORTION THEREOF, INCLUDING
WARRANTIES OF SUITABILITY, HABITABILITY, MERCHANTABILITY, DESIGN OR FITNESS FOR
ANY SPECIFIC PURPOSE OR A PARTICULAR PURPOSE, OR GOOD AND WORKMANLIKE
CONSTRUCTION; (2) THE NATURE, MANNER, CONSTRUCTION, CONDITION, STATE OF REPAIR
OR LACK OF REPAIR OF ANY IMPROVEMENTS LOCATED ON THE PROPERTY, ON THE SURFACE OR
SUBSURFACE THEREOF, WHETHER OR NOT OBVIOUS, VISIBLE OR APPARENT; (3) THE NATURE
OR QUALITY OF CONSTRUCTION, STRUCTURAL DESIGN OR ENGINEERING OF THE PROPERTY;
(4) THE ENVIRONMENTAL CONDITION OF THE PROPERTY AND THE
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PRESENCE OR ABSENCE OF OR CONTAMINATION BY HAZARDOUS MATERIALS, OR THE
COMPLIANCE OF THE PROPERTY WITH ALL REGULATIONS OR LAWS PERTAINING TO HEALTH OR
THE ENVIRONMENT, INCLUDING BUT NOT LIMITED TO, THE COMPREHENSIVE ENVIRONMENTAL
RESPONSE, COMPENSATION AND LIABILITY ACT, THE RESOURCE CONSERVATION AND RECOVERY
ACT, THE CLEAN WATER ACT, AND THE INDIANA ENVIRONMENTAL LAWS, EACH AS MAY BE,
AMENDED FROM TIME TO TIME, AND INCLUDING ANY AND ALL REGULATIONS, RULES OR
POLICIES PROMULGATED THEREUNDER ("ENVIRONMENTAL LAWS"); (5) THE QUALITY OF THE
LABOR AND MATERIALS INCLUDED IN THE PROPERTY; (6) THE SOIL CONDITIONS, DRAINAGE,
FLOODING CHARACTERISTICS, UTILITIES OR OTHER CONDITIONS EXISTING IN, ON, OR
UNDER THE PROPERTY, AND (7) COMPLIANCE OR NON-COMPLIANCE OF THE PROPERTY WITH
ANY LEGAL REQUIREMENTS OR PRIVATE AGREEMENTS. EXCEPT TO THE EXTENT RESULTING
FROM A BREACH OF THE EXPRESS REPRESENTATIONS, WARRANTIES AND COVENANTS, BUYER
HEREBY EXPRESSLY AGREES THAT SELLER SHALL NOT BE LIABLE TO BUYER FOR ANY
SPECIAL, DIRECT, INDIRECT, CONSEQUENTIAL, OR OTHER DAMAGES RESULTING OR ARISING
FROM OR RELATED TO THE PROPERTY OR THE OWNERSHIP, USE, CONDITION, LOCATION,
MAINTENANCE, REPAIR OR OPERATION THEREOF. SUBJECT TO ARTICLES 9, 10. AND 13 OF
THIS AGREEMENT, BUYER ACKNOWLEDGES THAT ANY CONDITION OF THE PROPERTY THAT BUYER
DISCOVERS OR DESIRES TO CORRECT OR IMPROVE PRIOR TO OR AFTER THE CLOSING DATE
SHALL BE AT SOLE EXPENSE. EXCEPT TO THE EXTENT RESULTING FROM A BREACH OF THE
EXPRESS REPRESENTATIONS, WARRANTIES AND COVENANTS, BUYER EXPRESSLY WAIVES ANY
CLAIMS AGAINST SELLER UNDER FEDERAL, STATE OR OTHER LAW (INCLUDING COMMON LAW,
WHETHER SOUNDING IN CONTRACT OR TORT, AND ANY AND ALL ENVIRONMENTAL LAWS) THAT
BUYER MIGHT HAVE AGAINST SELLER RELATING TO THE USE, CHARACTERISTICS OR
CONDITION OF THE PROPERTY. NOTHING CONTAINED IN THIS AGREEMENT IS INTENDED TO
RELEASE ANY PARTY FROM ANY FRAUD OR OTHER INTENTIONAL MISCONDUCT. THE PROVISIONS
OF THIS SECTION SHALL SURVIVE THE CLOSING AND THE TERMINATION OF THIS AGREEMENT
PRIOR TO CLOSING.
ARTICLE 18. DEFINITIONS.
1801. Unless the context shall clearly indicate otherwise, when used in
this Agreement the words and phrases set forth below shall be defined as
follows:
"Business Day" shall mean each and every day, other than Saturdays and
Sundays, when the main office of NationsBank in Raleigh, North Carolina is open
for business.
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"Closing" shall mean the simultaneous payment of monies and execution and
delivery of substantially all Closing Documents evidencing the consummation of
the transactions provided for in this Agreement.
"Closing Date" shall mean the effective date of Closing, which shall be the
date upon which Closing actually occurs or such other date as shall be agreed to
in writing by Seller and Buyer.
"Closing Document" shall mean each and every document, instrument,
agreement, closing statement, certificate, and affidavit executed and delivered
pursuant to this Agreement in connection with the consummation of the
transactions provided for by this Agreement, whether executed or delivered
prior, at, or subsequent to Closing.
"Condemnation" shall mean any taking or notice of intent to take any
property by any Government Authority or other entity having the power of eminent
domain, or any voluntary conveyance in lieu of any such taking.
"Continuing Obligations" shall mean the indemnities of Buyer under Section
904 and the indemnities of Seller and Buyer under Sections 1401 and 160 1,
"Contract Date" shall mean the date specified on the signature page of this
Agreement as the "Contract Date".
"Due Diligence Date" is defined in Section 1001.1.
"Xxxxxxx Money" is defined in Section 301.
"Encumbrance" shall mean any mortgage, deed to secure debt, deed of trust,
restrictive covenant, lien, conditional sales contract, contract retaining
title, security agreement, security interest, contract of sale, lease, license,
easement, contract for deed, option to acquire or lease, cloud on title, tax, or
any other right to possession or control of the Property or the rents or
proceeds of the Property.
"Equipment" shall mean all appliances, furniture, fixtures, machinery,
equipment, inventory, supplies and other tangible personal property located at
and used in connection with the operation, management or maintenance of the
Property, but excluding all personal property owned by Tenants (other than
Seller).
"Escrow Agent" shall mean the title Company.
"Existing Mortgage Documents" shall mean all documents evidencing and
securing the mortgage loan that is presently encumbering the Property, which
loan shall be paid off at Closing, and which loan documents shall be cancelled
at Closing.
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"Government Authority" shall mean each municipal, county, state and federal
government agency, authority, department, division, court and official having
jurisdiction over the subject matter.
"Improvements" shall mean all buildings and other improvements located on
the Land, and all appurtenances thereto.
"Land" shall mean the land described in Exhibit "A".
"Leases" shall mean each and every lease of the Property, including all
amendments, modifications, alterations, addenda and supplements thereto.
"Legal Requirement" shall mean each applicable law, statute, code, act,
ordinance, order, judgment, decree, injunction, rule, regulation and other
requirement of each Government Authority.
"Permitted Title Exceptions" shall mean those matters described in Exhibit
"B".
"Person" shall mean any natural or artificial legal entity whatsoever,
including any individual, general partnership, limited partnership,
unincorporated association, sole proprietorship, corporation, trust, business
trust, real estate investment trust, joint venture or Government Authority.
"Private Covenant" shall mean each instrument, agreement, covenant,
restriction, indenture, loan agreement, promissory note, or Encumbrance that
creates any private legal right, privilege, immunity, duty, liability or
obligation.
"Property" shall mean the Land, Improvements, Equipment, Leases, and other
property described in Article 2.
"Purchase Price" is defined in Article 3.
"Schedule of Leases" is defined in Section 903.
"Seller's Manager" shall mean Lane Company, which manages the Property for
Seller.
"Service Agreements" shall mean each and every maintenance, construction,
advertising, management, leasing, franchising, employment, union, leasing
commission, or utilities agreement or other agreement relating to the Property
or otherwise affecting the Property or arising out of its ownership or
operation.
"Tenants" shall mean the tenants under the Leases.
"Title Company" shall mean First American Title Insurance Company.
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ARTICLE 19. OFFER AND ACCEPTANCE.
1901. This document shall constitute an offer by Seller that shall be open
for acceptance by Buyer until 5:00 o'clock, p.m., Atlanta, Georgia time, on the
Contract Date. If this offer shall be so accepted by Buyer, it shall become a
binding, legally enforceable contract of sale and purchase. If this offer shall
not be so accepted within said time limit by Buyer, it shall become totally null
and void. Upon due acceptance of this offer by Buyer, as described above,
Seller shall forward a fully executed counterpart of this Agreement to Escrow
Agent, together with a request that Escrow Agent execute and deliver to Buyer
and Seller an original Acceptance of Escrow Agent substantially in the form of
Exhibit "E". If, for any reason, the Escrow Agent identified in this Agreement
shall fail or refuse to serve as Escrow Agent, then Seller shall have the right
to designate Chicago Title Insurance Company or First American Title Insurance
Corporation to serve as Escrow Agent, in which event, upon acceptance of the
duties under this Agreement by any one of said title insurance companies, this
Agreement shall be deemed to have been automatically amended to designate said
accepting title insurance company as the Escrow Agent and the Title Company.
SIGNED, SEALED AND DELIVERED as of the ___ day of September, 1997, which
shall be the "Contract Date."
Seller: Buyer:
CLARION CROSSING LIMITED CORNERSTONE REALTY GROUP, INC.
PARTNERSHIP
Name: X. X. Xxxxxxx
By: GOLDCREST CLARION CORP., a Title: S.V.P.
Georgia corporation, General Partner
[CORPORATE SEAL]
By:/s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxx, President
Title: Vice President
[CORPORATE SEAL]
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