EXHIBIT 10.3
PURCHASE CONTRACT
THIS AGREEMENT made and entered into this 10th day of December, 1996,
between CORNERSTONE REALTY GROUP, INC. or its nominee, (hereinafter called
"Purchaser") and XXXXXXXX-XXXXXXXXX PROPERTIES, a Virginia General Partnership,
(hereinafter called "Seller").
ARTICLE I
THE PROPERTY
1.1 Sale of Property. Seller agrees to sell and
convey, and Purchaser agrees to purchase, Seller's real property known as
XXXXXXXX XXXXXX APARTMENTS located in RICHMOND, VA, with all buildings and
improvements located thereon, as more particularly described in the attached
legal description in Exhibit A including, but not limited to 128 individually
heated and air conditioned apartment units, with all appurtenances, together
with all appliances, drapes, carpeting, shrubbery and all other personal
property used in connection with the premises, including, the inventory of
personal property all of which is currently on the premises, except as set forth
on the attached Exhibit B (all such real and personal property included in the
sale hereinafter collectively referred to as the "Property" unless the context
clearly indicates otherwise).
ARTICLE II
PAYMENT OF PURCHASE PRICE
2.1 Purchase Price. The total purchase price shall be
FOUR MILLION TWO HUNDRED FORTY TWO THOUSAND FIVE HUNDRED SEVENTY
FIVE DOLLARS ($4,242,575.00) as evidenced by cash or cash
equivalent at closing.
2.2 Deposit. $100,000.00 to be placed in escrow (fully
refundable together with any accumulated interest in the event that Purchaser
shall reject the property pursuant to their right under Article VI) with
Commonwealth Land Title Insurance Company as an xxxxxxx money deposit which may
be credited against the purchase price or applied as per Article XI below.
ARTICLE III
TITLE MATTERS
3.1 Marketable Title. Seller, shall convey good and
marketable title by General Warranty Deed, subject only to general taxes for the
current year not yet due and payable and utility easements which do not
interfere with the present use of the Property.
(A) Title shall be free from any and all liens or
mortgages and Seller shall be responsible for any prepayment penalties necessary
to deliver such free title.
3.2 Title Defects; Election to Cure. Purchaser shall
obtain a commitment for Title Insurance, (the commitment). If title is not
marketable, except as stated above in the preceding paragraph, Purchaser shall
give written notice of any defects in title to Seller's counsel within the
Inspection Period (defined in Par. 6.2.2). The report shall include copies of
backup documents relating to any title exceptions, a current survey, a flood
zone certification letter and a Surveyor's Certification letter. Seller may, at
its option, elect whether to cure said defects or by written notice to Purchaser
indicate its intention not to cure.
3.3 Election Not to Cure Defects. Should Seller elect
not to cure title defects, this Agreement, at Purchaser's option, shall be void;
each party shall thereupon be released from all obligations hereunder; and all
deposits shall be immediately returned to Purchaser.
ARTICLE IV
PRORATIONS
4.1 Income and Expense Allocations. The following
shall be prorated, on a calendar-month basis, to the 1st day of the month of the
closing: rents and other income from the Property; operating expenses (on such
service contracts and other obligations as Purchaser may agree to assume); and
general and real property taxes and personal and business property taxes for the
year of closing (based on the most recent assessment and the most recent levy).
4.2 Closing Costs. Purchaser and Seller shall pay
their customary share of all taxes, recording fees, if any, imposed on the Deed,
or any other documents executed in connection with the transfer of the Property.
Purchaser agrees to pay cost of title insurance. Seller shall pay any prepayment
penalty charged by the holders of any existing notes.
4.3 Allocation of Rents. Rents collected by Seller
prior to Closing shall be prorated as agreed in 4.1 above. Purchaser shall apply
rents received after Closing first to payment of the current rent due to
Purchaser, then to delinquent rents due to Purchaser, and last to rents due to
Seller as of the Closing but uncollected prior to settlement. Purchaser agrees
to use its best efforts in good faith to collect the amount of any rental
arrears from tenants and Purchaser agrees to remit promptly to Seller any such
arrears actually paid by such tenants to Purchaser. Seller shall retain the
right to commence legal action against a tenant for any delinquent rent
apportioned to the Seller.
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4.4 Prior Lease Concessions. Seller shall pay to
Purchaser, in a lump sum at closing, all future monetary concessions which
Seller has given to tenants under leases existing at the time of closing.
ARTICLE V
POSSESSION OF THE PROPERTY
5.1 Possession. Possession of the Property shall be
delivered to Purchaser at closing, subject to the rights of the tenants under
existing leases and rental agreements.
ARTICLE VI
CONDITIONS PRECEDENT TO CLOSING
6.1 Conditions Precedent. Purchaser's obligation to
purchase shall be subject to and contingent upon the satisfaction
of the following conditions precedent:
(A) Receipt by Purchaser of an engineering
report of building and site conditions, satisfactory to Purchaser in its sole
discretion, said report to include in part, a description of any hazardous waste
sites, hazardous wastes and/or hazardous materials affecting the property.
Purchaser shall have until the end of the Inspection Period in which to review
the reports set forth herein and exercise its right to reject the Property based
thereon or the right hereunder shall be deemed waived.
(B) The receipt by Purchaser of Seller
documents described in 7.2 below.
(C) On the condition that Sellers
representations and warranties described in Article VIII below remain true and
correct.
(D) On the condition that there have been no
material or adverse changes to the property or leases.
(E) Seller acknowledges that Purchaser is a public
entity and that it is required to furnish financial statements to the Securities
and Exchange Commission in connection with this acquisition. Seller agrees to
make the information available for Purchaser to audit the last 12 months of
operation of the Property so that a report can be generated that is in
compliance with accounting Regulation S-X of the Securities and Exchange
Commission.
(F) Survey which shall show no encroachments onto
the Land from any adjacent property, no encroachments by or from the Land onto
adjacent property and no violation of or encroachments upon any recorded
building lines, restrictions or easements affecting the Property. If the Survey
discloses any such
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encroachment or violation, Seller shall have thirty (30) days from the date of
delivery of the Survey (with a commensurate extension of the closing date) to
have the Title Insurer issue its endorsement insuring against damage caused by
such encroachment or violation and to provide evidence thereof to Purchaser, and
if Seller fails to or is unable to have the same insured against within such
thirty (30) day period, Purchaser may elect, on or before the Closing Date, to
(i) terminate this Agreement (in which case the Xxxxxxx Money shall be returned
to Purchaser) and neither party shall have any further liability or obligation
to the other hereunder, or (ii) accept the property subject to any such
encroachment or violation.
6.2 Inspection. This Agreement shall be further
subject to and contingent upon Purchaser's satisfactory inspection as follows
herein below.
6.2.1 Preparation for Inspection. At the execution of
this Agreement, Seller shall deliver to Purchaser copies of the following: The
current rent roll for the Property; detailed statements of income and expenses
with respect to the Property for the past two years; the most recent tax bills
for the Property; utility bills for the Property for the twelve (12) months
previous to the date hereof; all contracts, or any part thereof and all
promissory notes secured thereby; all insurance policies applicable to the
Property to include loss runs for the last five (5) years if available; Plans
and Specifications for the Property, service contracts, Certificates of
Occupancy, to the extent reasonably available; a copy of the title policy and
most recent survey for the Property. A copy of any environmental or engineering
reports on the property. All these items shall be certified by Seller to be
accurate and complete to the best of its knowledge and belief.
6.2.2 Inspection of Books and Records; Access. Upon
receipt by Purchaser of all documents requested in the paragraph above,
Purchaser, its employees, agents and contractors shall have 30 days (the
"Inspection Period") to enter upon the Property subject to the rights of the
tenants during normal business hours for the purpose of making physical
inspections thereof, including but not limited to roofs, heating, cooling,
electrical and plumbing systems, swimming pool, appliances, and structural
elements of the buildings. Upon the conclusion of the Inspection Period this
contract shall be deemed to be a firm agreement of purchase and sale binding the
parties hereto, except as it may be terminated by other provisions and
conditions contained herein, including but not limited to the condition imposed
by Paragraph 6.1(A) above.
6.2.3 Right of Termination During Inspection Period.
Purchaser shall also be permitted to review all original leases, expense
records, tenant cards and occupancy data available. If Purchaser is not
satisfied, in its sole and exclusive discretion,
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with the state of maintenance and repair of the Property or the rents, occupancy
or expenses of the Property, then notwithstanding anything contained herein to
the contrary, Purchaser shall have the right to terminate this Agreement by
giving written notice to Seller before the end of the Inspection Period, and no
party hereto shall have any further liability to any other party hereto, and all
deposits shall be returned to Purchaser.
6.2.4 "Rent Ready". During the "Inspection Period", both
Seller and Purchaser will inspect an apartment unit at the Property and mutually
agree that said apartment shall be representative of a "rent ready" unit by
which all other units shall be judged for "rent ready" condition at closing. All
vacant apartment units, are to be in a "rent ready" condition (as defined
above), at the time of closing, containing, but not limited to the following
amenities, i.e., carpet, refrigerator, range, garbage disposal, heating,
plumbing and electrical systems.
6.2.5 Condition of Personal Property at Closing. All
personal property included in the sale and all mechanical, electrical, heating,
air conditioning, sewer, water and plumbing systems will be in the same working
order at the time of closing and in the same condition as at the time of the
initial inspection by Purchaser. If Seller fails to make reasonable efforts to
conserve the property, Purchaser shall have the option of waiving such
requirement, in writing, and proceeding to closing, or Purchaser may void this
Agreement and obtain a prompt return of its deposit.
ARTICLE VII
CLOSING
7.1 Closing. Closing will be held within 60 days from
the completion of the inspection period, at such place and at such time as the
parties may agree.
7.2 Seller's Deliveries. At closing, Seller shall
execute and deliver to Purchaser the General Warranty Deed referred to in
Paragraph 3 hereof and shall also execute, where necessary, and deliver to
Purchaser, the following:
(A) A Xxxx of Sale, with warranty of title
transferring the personal property (as shown in Schedule B) to Purchaser free of
all liens, charges and encumbrances.
(B) Originals or copies of all signed leases and
rental agreements in effect with tenants of the Property.
(C) All security deposits made by such tenants.
Seller will give the tenants the required notice of such transfer in compliance
with the laws of Virginia.
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(D) An affidavit of Seller in such form as will
cause the Title Company to omit from the title insurance policy the exclusion
relating to unrecorded mechanic's and materialmen's liens.
(E) A rent roll certified by Seller to be true
and correct as of the date of closing showing the name of, and the amount of
monthly rental payable, by each tenant of the Property, the apartment occupied
by the tenant, the date to which rent has been paid, any advance payment of
rent, and the amount of any escrow, or security deposit of tenant.
(F) An affidavit of Seller that to the best of
its information and belief there are, on the date of closing, no unsatisfied
judgments, creditor's claims, tax liens, or pending bankruptcies involving
Seller.
(G) Seller shall provide, a certificate from a
licensed extermination contractor, who is regularly engaged in the business of
pest control, that all buildings are free from any termite or other wood-boring
insect infestation. Said certificate shall be dated within 90 days of closing,
bearing the Contractor's name, contractors license number, the signature of the
party authorized to sign for the Contractor and the date of the inspection.
Should damage exist, Seller shall proceed to have any corrective work completed
prior to closing or Purchaser, at its option, may either proceed to settlement
and have such sums required for repairs deducted from Seller's proceeds, or may
in its sole discretion terminate this Agreement. Seller shall promptly return
Purchaser's deposit upon such termination.
(H) Assignments of all Seller's interest in the
following: (1) all assignable licenses, and permits relating to the operation of
the Property, (2) the leases and rental agreements with tenants of the Property,
(3) the existing Property telephone number and (4) the business and trade name
as set forth in Par. 1.1.
(I) Assignments of all warranties and
guarantees to the extent such are still in effect and provide Purchaser with
copies of all such warranties and guarantees without limitation for all
appliances, dishwashers, disposals, refrigerators, heating and air conditioning
units, washers and dryers.
(J) Consent of the Seller's authorized officer
to the sale of the Property and any other approvals required under Seller's
articles or by-laws, which may affect Seller's ability to convey marketable
title.
(K) Provide documents for the transfer of the
telephone, electric, water and sewer, and gas utilities, as may be required by
the utility, for execution at closing.
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(L) Satisfactory evidence of the power and
authority of Seller to enter into and consummate this agreement, including but
not limited to:
(i) An opinion of Seller's counsel, in
a form satisfactory to Purchaser, stating that:
(a) The individual(s) executing
the deed and related documents are duly authorized to do all such acts as are
necessary to consummate this sale, without further consent of any other party.
(b) That the partner or officer
can bind the Partnership or Corporation.
(M) Affidavit that Seller has no actual
knowledge of the presence of asbestos and/or any other hazardous material at the
Property.
(N) Seller shall provide a satisfactory and valid
written termination of the management agreement executed by the existing
management and rental agent for the Property, without cost to the Purchaser.
(O) A notice letter to all the residents of the
apartment complex as to change of ownership in the form prepared by the
Purchaser.
(P) All such other documents as are normally
transferred at settlement in the jurisdiction in which the property is located
or are reasonably requested by Purchaser or its counsel.
(Q) A representation letter as normally required
by auditors for a public company in the form attached hereto as Exhibit C. This
clause shall survive closing for one year.
7.3 Purchaser's Deliveries. At closing and
contemporaneously with the Seller's compliance with the provisions of Section
7.2, Purchaser shall:
(A) Pay to Seller the cash portion of the
purchase price, adjusted for the prorations herein provided for in Article IV.
(B) Execute and deliver an assumption of
obligations under leases, securities, any contracts which may be accepted by the
Purchaser and any other obligations specifically set forth herein.
(C) Deliver to the Seller a resolution of the
Purchaser that:
(i) This Agreement has been duly
authorized,
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executed and delivered by the Purchaser and is a valid and binding agreement of
Purchaser, and
(ii) Purchaser has complete unrestricted
power to buy the Property from the Seller and to execute any documents required
to effectuate the transfer.
ARTICLE VIII
SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
8.1 Representations of the Parties. Seller warrants
(which warranties shall not survive settlement unless designated to the
contrary) that as of the date of closing hereof:
(A) That Seller, is the owner in fee simple of
the Property and has the power to convey same.
(B) That Seller is not subject to any other
agreements or arrangements, with the exception of those contained in any
existing mortgage documents which would prevent Seller from selling the Property
to Purchaser. This warranty shall survive for one year following closing.
(C) All necessary action has been taken by
Seller to authorize the execution of this Agreement and the performance of the
obligations contemplated hereunder, which are not excluded elsewhere in existing
mortgage documents. This warranty shall survive for one year following closing.
(D) Seller has no actual knowledge and has not
been advised in writing that it is in default under any lease, rental agreement
service or equipment contract, or mortgage or other encumbrances relating to the
Property. This warranty shall survive for one year the following closing.
(E) Seller has no actual knowledge of any
patent or latent defect in the Property or any part thereof. This warranty
shall survive for one year following closing.
(F) Seller has no actual knowledge of any
existing or threatened litigation which relates to or which would affect the
Property. This warranty shall survive for one year following closing.
(G) The Property abuts on and has direct
vehicular access to a public road.
(H) All building and other improvements at the
Property are located entirely within the boundary lines of the Property.
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(I) a. Seller has no actual knowledge that any
part of the Property or the operation of the Property, is in violation or may
violate any governmental statute, regulation, ordinance or building code or of
any private restriction, that any governmental authority requires any work to be
done on or affecting the Property, or that any governmental authority has
expressed an intent to condemn or to make special improvements for the benefit
of the Property or any part thereof. This paragraph shall apply only to the
period preceding closing.
b. Purchaser acknowledges that it is not
relying on Seller's compliance with the Americans with Disability Act.
(J) That to the best knowledge of the Seller,
the drainage within the project is satisfactory and complies in all respects
with all government regulation. This warranty shall survive for one year
following closing.
(K) That Seller is not a "foreign person"
within the meaning of the Internal Revenue Code of 1954, as amended (the
"Code"), and that Seller will furnish to Purchaser prior to closing an affidavit
in form satisfactory to Purchaser confirming the same.
(L) That to the best of Seller's knowledge, the
Property was never utilized as a disposal site for hazardous waste products and
will furnish to Purchaser an affidavit confirming same.
(M) Seller covenants and agrees that, between
this date and the date of closing, Seller shall continue to maintain, operate
and manage the Property in a manner consistent with its prior practices, making
every reasonable effort to do nothing which might damage the reputation of the
Property or the relationships with the tenants. Seller shall not permit the
modification, extension or cancellation of any tenant lease (except in
accordance with the terms of such lease) or any dealing with any tenant other
than the ordinary course of managing the Property, without the prior written
consent of Purchaser. If the leases of any tenants expire before thirty (30)
days after the date of closing, Seller shall, up to the date of closing and
without cost to the Purchaser, continue its normal course of operation with
respect to causing tenants to be obtained for apartments which are unrented.
8.2 Continuation of Representations, Warranties and
Covenants to the Date of Closing. If each of the warranties set forth in this
section does not remain true up to and including the time of closing as to any
material matters, this Agreement, at Purchaser's election, shall be terminated,
Seller shall return all payments made by Purchaser, or Purchaser may elect to
close the sale and waive failure of the warranties.
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8.3 Breach of Representations, Warranties and
Covenants. Notwithstanding the provisions of 8.2 above, Seller shall indemnify
Purchaser for all reasonable costs incurred as a result of the failure of any of
Seller's representations, warranties or covenants contained herein to remain
true as of the date of closing.
ARTICLE IX
CONDEMNATION; RISK OF LOSS
9.1 Property Damage. If, prior to closing, any part of
the Property is damaged by fire or other casualty, Seller shall repair such
damage before the date provided herein for closing. If such damage cannot be
repaired by such time, this Agreement may be canceled at the option of the
Purchaser. In the event of cancellation as aforesaid, this Agreement shall
become null and void and the parties shall be released and all payments made
shall be returned. Should Purchaser elect to carry out this Agreement despite
such damage Seller shall assign to Purchaser all insurance proceeds, and any
deductible, arising from such damage and will compensate Purchaser for lost rent
collections to the extent of insurance proceeds received. Seller shall promptly
notify Purchaser in writing upon the occurrence of any such damage.
9.2 Condemnation. In the event of any actual or
threatened taking, pursuant to the power of eminent domain, all or any part
thereof, or any actual or proposed sale in lieu thereof, the Seller shall give
written notice thereof to the Purchaser promptly after Seller learns or receives
notice thereof. Upon a taking of a material part of the Property (any part of
the building or more than 5% of the parking area), Purchaser may elect to either
(a) terminate this Agreement, in which event the Deposit shall be immediately
returned to Purchaser and all other rights and obligations of the parties
hereunder shall terminate immediately, or (b) to waive its right to terminate
this Agreement and proceed to closing, in which event all proceeds, awards and
other payments arising out of such condemnation or sale (actual or threatened)
shall be paid to the Purchaser at closing, if such payment has been received or
Seller shall assign to Purchaser the rights to such payments.
9.3 Risk of Loss. Prior to closing, all risks of loss
or damage by every casualty shall be borne by the Seller.
ARTICLE X
BROKER'S COMMISSION
10.1 Commission. Purchaser agrees to pay a brokerage
fee to First Union Mortgage Corporation, Richmond office, pursuant to a separate
agreement between Purchaser and Broker. Said brokerage fee shall be deemed
earned if, and only if,
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settlement 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 shall not be obligated for any brokerage fees to any
broker, and Purchaser agrees to hold Seller harmless in connection with such
fees. Seller and Purchaser represent and warrant to each other that no other
brokerage fees are or shall be owing in connection with this transaction or in
any way with the Apartments and Seller and Purchaser hereby indemnify and hold
the other harmless from any and all claims of any other person so claiming.
ARTICLE XI
DEFAULT
11.1 Default Defined. Default for the purpose of this
Agreement shall mean any failure by Seller or Purchaser to fulfill all the
terms, conditions and covenants contained herein, however, it shall not be an
event of default for either party to exercise its rights to terminate this
contract as contained in other provisions herein.
11.2 Seller's Default. Upon Seller's default, the Purchaser,
may cancel this Agreement and obtain a prompt return of the deposit. In
addition, the Seller shall pay to the Purchaser $100,000 as liquidated damages,
recognizing that the exact damages are difficult to assess and that there is an
obligation to reimburse Purchaser for its time and expenses., in which case this
Agreement shall be terminated and the parties released from all obligations
hereunder.
11.3 Purchaser's Default. Upon Purchaser's default, this
Agreement shall be terminated and both parties released from all obligations
hereunder, and the deposit shall be retained by the Seller as liquidated
damages. Seller shall have no other remedy against Purchaser in the event of
Purchaser's default.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Entire Agreement. This Agreement sets forth the
entire understanding between the parties; it supersedes all previous agreements
and representations which are deemed merged herein and may not be modified
except in writing.
12.2 Assignment. Purchaser may assign this Agreement
without the consent of Seller.
12.3 Severability. If any provision, sentence, phrase or
word of this Agreement or the application thereof to any person or circumstance
shall be held invalid, the remainder of this Agreement or the application of
such provision, sentence, phrase, or word to persons or circumstances, other
than those as to which
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it is held invalid, shall remain in full force and effect.
12.4 Binding Effect. The parties to the Agreement
mutually agree that it shall be binding upon and inure to the benefit of their
respective heirs, representatives, successors in interest and assigns.
12.5 Controlling Law. It is the intent of the parties
hereto that all questions with respect to the construction of this Agreement and
the rights and liabilities of the parties shall be determined in accordance with
the provisions of the laws of the State set forth in Par. 1.1.
12.6 Counterparts. To facilitate execution, this Agreement
may be executed in as many counterparts as may be required. It shall not be
necessary that the signature on behalf of both parties hereto appear in each
counterpart hereof, and it shall be sufficient that the signature on behalf of
both parties hereto appear on one or more such counterparts. All counterparts
shall collectively constitute a single contract.
12.7 Incorporation by Reference. All of the Exhibits
referred to herein and/or attached hereto shall be deemed to constitute a part
of the Agreement.
12.8 Headings. The headings of the Articles and sections
hereof are inserted for convenience only and shall not be deemed to constitute a
part of the Agreement.
12.9 Construction of Contract. Each party hereto have
reviewed and revised (or requested revisions of) this Agreement, and therefore
the normal rule of construction that any ambiguities are to be resolved against
a particular party shall not be applicable in the construction and
interpretation of this Contract or any amendments or exhibits hereto.
ARTICLE XIII
NOTICE
13.1 Notice. All notices required or permitted to be given
under this Agreement shall be in writing and shall be sent or delivered to the
address set forth below (or such other address as may be hereafter specified in
writing):
To Seller: Xxxxxxxx-Xxxxxxxxx Properties
0000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
With a copy to Seller's Attorneys:
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To Purchaser: Xxx Xxxxxxxx
Cornerstone Realty Group, Inc.
000 X. Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Fax No. 000-000-0000
With a copy to
Purchaser's Attorneys: Xxxxx X. Xxxxxxxxxx, Esq.
Xxxxxxxxxx & Taubenfeld
000 Xxxxxxxx Xx., X.X. Xxx 000
Xxxxxxxxxx, XX 00000
Fax No. 000-000-0000
Additional copy to: Xxxxx Xxxxxxx, Esq.
XxXxxxx Xxxx
000 Xxxx Xxxx Xxxxxx - 00xx Xx.
Xxxxxxxx, XX 00000
13.2 Delivery of Notice. Notices sent either by Registered
or Certified Mail, Return Receipt Requested, or by overnight express mail shall
be deemed given when deposited in the United States Mail, postage prepaid, or
delivered to a reliable overnight courier or fax. Notices sent in any other
manner shall be deemed given only when actually delivered at the specified
address.
ARTICLE XIV
LIKE-KIND EXCHANGE
14.1 Like-Kind Exchange. Seller may wish to effect a tax
free exchange pursuant to Section 1031 of the Internal Revenue Service Code of
1986 (the "Tax Code") in connection with Seller's Conveyance of the Property to
Purchaser. Consequently, if prior to Settlement, Seller designates a property or
properties (collectively the "Exchange Property"), Purchaser will use reasonable
efforts to contract to acquire the Exchange Property for use in an exchange with
Seller. Purchaser's obligation to contract to purchase the Exchange Property is
specifically contingent upon (1) the conditions precedent set forth in paragraph
6.1 being satisfied, (ii) the costs of acquisition (including apportionments
being equal to or less than the Purchase Price (including apportionments) for
the Property, or if in excess of such Purchase Price, Seller's commitment and
agreement to pay such excess in cash (the "Excess") at the closing of the
acquisition of the Exchange Property, (iii) Seller's approval of the Exchange
Property, (iv) Purchaser not becoming subject to any additional liability in
connection with such exchange, (v) Purchaser assigning the contract to acquire
the Exchange Property to a qualified Intermediary of the excess, if any, of the
Purchase Price for the Property plus apportionments (over the purchase price for
the Exchange Property plus acquisition costs and apportionments). Upon request
of Seller, Purchaser will execute an appropriate escrow agreement
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deemed necessary by Seller's counsel to obtain for Seller the tax benefits
allowed under Section 1031 of the Internal Revenue Code of 1986 (Purchaser not
to bear any such tax benefits), provided that such escrow agreement clearly
limits Purchaser's obligations and liability to the delivery of the proceeds of
the Purchase Price to the qualified Intermediary.
14.2 Hold Harmless. At closing, Seller will deliver to
Purchaser an agreement to hold the Purchaser harmless as to any claims as a
result of the Like-Kind Exchange set forth in paragraph 14.1 and an opinion of
counsel as to the validity of the transaction.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused
this Agreement to be executed this day and date first written above.
SELLER:
XXXXXXXX-XXXXXXXXX PROPERTIES
By: /s/ [illegible]
____________________________
Its: Managing Partner
___________________________
PURCHASER:
CORNERSTONE REALTY GROUP, INC.
By: /s/ X. X. Xxxxxxx
____________________________
Its: Senior Vice President
___________________________
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