EXHIBIT 10.1
AGREEMENT OF PURCHASE AND SALE
XXXXXX XXXX APARTMENTS
ARLINGTON, TEXAS
By and Between
JMB INSTITUTIONAL APARTMENT LIMITED
PARTNERSHIP-II
an Illinois limited partnership,
Seller
and
CORNERSTONE REALTY GROUP, INC.,
a Virginia corporation
Purchaser
DATED: October __, 1998
AGREEMENT OF PURCHASE AND SALE
XXXXXX XXXX APARTMENTS, ARLINGTON, TEXAS
THIS AGREEMENT OF PURCHASE AND SALE is made and entered into this ___ day
of October, 1998 by and between JMB INSTITUTIONAL APARTMENT LIMITED
PARTNERSHIP-II, an Illinois limited partnership ("Seller"), having an address of
c/x Xxxxxxx Capital Management Corporation, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxxx 00000-0000, Attention: Xxxxxx X. Xxxxxxx; facsimile
number (000) 000-0000, and CORNERSTONE REALTY GROUP, INC., a Virginia
corporation ("Purchaser"), having an address of 000 X. Xxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxx 00000 Attention: Xxx X. Remppies, facsimile number (000) 000-0000.
RECITALS
Seller is the owner of a parcel of real estate in Arlington, Texas, legally
described on Exhibit A attached hereto and all buildings thereon (the "Real
Property", which together with any and all appurtenances thereto is collectively
referred to as the "Property"), commonly known as the Xxxxxx Xxxx Apartments.
The Property consists of twelve (12) buildings containing two hundred forty
(240) residential apartment units
Subject to and on the terms and provisions of and for the considerations
set forth in this Agreement, Seller has agreed to sell, and Purchaser has agreed
to buy, the Property.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms have the
following meanings:
Closing. Shall have the meaning set forth in Section 4.1 hereof.
Closing Date . As agreed between Seller and Purchaser but no later than
October 28, 1998.
Due Diligence Period. The period commencing on September 28, 1998 and
ending on October 20, 1998.
Escrow Company. Near North National Title Corporation.
Title Company. Near North National Title Corporation, as agent for First
American Title Company.
-1-
2. Sale: Purchase Price.
2.1 Subject to the terms and provisions hereof, Seller agrees to sell and
convey to Purchaser, and Purchaser agrees to purchase from Seller the Property.
2.2 The total purchase price (hereinafter called the "Purchase Price") to
be paid by Purchaser to Seller for the Property shall be Nine Million Three
Hundred Thousand and no/100 Dollars ($9,300,000.00). The Purchase Price shall be
payable in the following manner:
(a) XXXXXXX MONEY. Purchaser shall, within two (2) business days after
the delivery of this Agreement to Seller, deposit with the Escrow Company, as
escrow agent, the amount of Four Hundred Thousand and 00/100 Dollars
($400,000.00) (hereinafter called the "Initial Xxxxxxx Money") which Initial
Xxxxxxx Money shall be in the form of a wire transfer of immediately available
United States of America funds. In the event Purchaser desires an extension of
the Due Diligence Period, Purchaser shall provide Seller with written notice
thereof and deposit with the Escrow Company, as escrow agent, the amount of One
Hundred Thousand and 00/100 Dollars ($ 100,000.00 ) (hereinafter called the
"Additional Xxxxxxx Money") which Additional Xxxxxxx Money shall be in the form
of a wire transfer of immediately available United States of America funds. The
Initial Xxxxxxx Money and the Additional Xxxxxxx Money are collectively,
together with interest earned thereon, hereinafter called the "'Xxxxxxx Money".
The Initial Xxxxxxx Money shall become nonrefundable at the close of business on
October 29, 1998 unless this Agreement is terminated prior to the expiration of
the Due Diligence Period. The Additional Xxxxxxx Money shall become
nonrefundable upon the commencement of the Due Diligence Period extension by
Purchaser's deposit of the Additional Xxxxxxx Money with the Escrow Company. The
Xxxxxxx Money shall be held and disbursed by the Escrow Company acting as escrow
agent pursuant to the Xxxxxxx Money Escrow Agreement in the form of Exhibit B
attached hereto which the parties have executed simultaneously with this
Agreement. The Xxxxxxx Money shall be invested in a federally issued or insured
interest bearing instrument with any interest accruing thereon being deemed part
of the Xxxxxxx Money and shall be paid to the party to which the Xxxxxxx Money
is paid pursuant to the provisions hereof. If the sale hereunder is consummated
in accordance with the terms hereof, the Xxxxxxx Money and any interest thereon
shall be applied to the Purchase Price to be paid by Purchaser at the Closing.
In the event of a default hereunder by Purchaser or Seller, the Xxxxxxx Money
shall be applied as provided herein.
(b) CASH BALANCE. Purchaser shall. pay the balance of the Purchase
Price, subject to the prorations described in Section 5 below, in cash (the
"Cash Balance") by wire transfer of immediately available United States of
America funds to the Title
-2-
Company for payment to Seller, in accordance with the terms and conditions of
this Agreement, no later than 11:00 am (Chicago, Illinois) on the Closing Date.
3. Conditions Precedent. In the event any of the conditions set forth in
Sections 3.2(b) or 3.3 below shall not have been fulfilled, accepted or deemed
accepted or waived as provided herein on or before the applicable dates
specified herein, Purchaser shall have the right to terminate this Agreement by
giving written notice thereof to Seller on or before the respective dates
specified herein, and thereupon all Xxxxxxx Money shall be refunded to Purchaser
and neither party shall have any further rights or obligations hereunder, except
for the Surviving Obligations (as hereinafter defined).
3.1 Seller's Deliveries. Seller has delivered or made available to
Purchaser complete copies of the following items pertaining to the Property
which are in Seller's actual possession:
(a) all leases, occupancy agreements, and amendments thereto listed on
Schedule 1, and referenced in Section 6.6 (the "Leases");
(b) all service contracts, equipment leases and other agreements
listed on Schedule 2 (the "Service Contracts");
(c) copies of the real estate tax bills for the current year and two
prior years, if available;
(d) any existing environmental reports, including any Phase I
environmental report;
(e) the existing owner's title policy;
(f) the existing survey (the "Existing Survey");
(g) annual operating statements for the Property for the last two
calendar years and monthly operating statements for the months in the current
year; and
(h) plans and specifications.
Seller shall provide to Purchaser any documents described in this Section
3.1 and first coming into Seller's possession or produced by Seller after the
initial delivery and continue to provide the same during the pendency of this
Agreement.
-3-
In the event this Agreement terminates for any reason, Purchaser shall
immediately return to Seller all information delivered by Seller or Seller's
agent(s) to Purchaser or Purchaser's agent(s). The foregoing provision shall
survive termination of this Agreement.
3.2 Due Diligence. Purchaser and its representatives shall be permitted to
enter upon the Property at any reasonable time and from time to time before the
Closing Date to examine, inspect and investigate the Property as well as all
records and other documentation provided by Seller or located at the Property
(collectively, "Due Diligence"). The Due Diligence shall be subject to the
terms, conditions and limitations set forth in this Section 3.2 and Purchaser's
conduct thereof shall be in strict compliance with its covenants and agreements
contained herein.
(a) Purchaser shall have a right to enter upon the Property for the
purpose of conducting its Due Diligence provided that in each such instance (i)
Purchaser notifies Seller of its intent to enter the Property to conduct its Due
Diligence not less than forty-eight (48) hours prior to such entry; (ii) the
date and approximate time period are scheduled with Seller, and (iii) Purchaser
is in full compliance with the insurance requirements set forth in Section
3.2(f) hereof. At Seller's election, a representative of Seller shall be present
during any entry by Purchaser or its representatives upon the Property for
conducting its Due Diligence. Purchaser shall take all necessary actions to
ensure that neither it nor any of its representatives interfere with the tenants
or ongoing operations occurring at the Property. Purchaser shall not cause or
permit any mechanic liens, materialmen's liens or other liens to be filed
against the Property as a result of its Due Diligence.
(b) Purchaser shall have, through the last day of the Due Diligence
Period in which to conduct its Due Diligence and, in Purchaser's sole
discretion, to determine whether the Property is acceptable to Purchaser.
Purchaser may, for any or no reason, terminate this Agreement by giving written
notice of termination to Seller on or before the last day of the Due Diligence
Period. On or before the expiration of the Due Diligence Period, Purchaser shall
deliver to Seller a written notice indicating whether it will proceed with the
transaction. If Purchaser does not timely give notice of termination as
aforesaid, Purchaser shall be deemed to have elected to purchase the Property in
accordance with the terms and conditions of this Agreement and this Agreement
shall continue in full force and effect. In the event of such termination, the
Xxxxxxx Money, including any interest thereon, shall be returned to Purchaser
and neither party shall have any further obligations to the other party
hereunder, except for the Surviving Obligations.
(c) Purchaser shall assume any or all of the Service Contracts on the
Closing Date. In the event Purchaser desires to cancel any of the Service
Contracts, Purchaser shall, prior to the Closing Date, notify Seller in writing
requesting termination of any or all of the Service Contracts, which are noted
on Schedule 2 as being terminable upon
-4-
thirty (30) days notice, that Purchaser does not elect to assume. If Purchaser
does give notice requesting termination of a Service Contract prior to the
Closing Date, Purchaser shall be deemed to have accepted the assumption of such
Service Contract. Purchaser shall assume all other Service Contracts listed on
Schedule 2.
(d) Purchaser shall have the right to conduct, at its sole cost and
expense, any Inspections, studies or tests that Purchaser deems appropriate in
determining the condition of the Property, provided, however, Purchaser is not
permitted to perform any intrusive testing, including, without limitation, a
Phase II environmental assessment or boring, without (i) submitting to Seller
the scope and inspections for such testing; and (ii) obtaining the prior written
consent of Seller for such testing, which consent shall not be unreasonably
withheld, denied or delayed, except in connection with ground water testing, in
which case Seller may withhold its consent in its sole and absolute discretion.
(e) Purchaser agrees and covenants with Seller not to disclose to any
third party (other than its affiliates, investors, lenders, employees, agents,
attorneys and other professionals and consultants in connection with the
transaction contemplated herein) without Seller's prior written consent unless
Purchaser is obligated by law to make such disclosure, any of the reports or any
other documentation or information obtained by Purchaser which relates to the
Property or Seller in any way, all of which shall be used by Purchaser and its
agents solely in connection with the transaction contemplated hereby. In the
event that this Agreement is terminated, Purchaser agrees that all such
information will be held in strict confidence.
(f) Purchaser agrees to indemnify, protect, defend and hold Seller and
its partners, trustees, beneficiaries, shareholders, members, managers, advisors
and other agents and their respective partners, affiliates, trustees,
beneficiaries, employees, officers, directors and shareholders (collectively,
the "Indemnified Parties") harmless from and against any and all liabilities,
demands, actions, causes of action, suits, claims, losses, damages, costs and
expense (including without limitation actual reasonable attorneys fees and court
costs and litigation expenses) made, brought, sought, suffered or incurred by
any of the Indemnified Parties as a result of or in connection with any
activities of Purchaser (including activities of any of Purchaser's employees,
consultants, contractors or other agents) by reasons directly or indirectly
arising out of, caused by or relating to the inspection of the Property,
including, without limitation, mechanics' liens, damage to the Property, injury
to persons or property resulting from such activities in connection therewith
after notice. In the event that the Property is disturbed or altered in any way
as a result of such activities, Purchaser shall promptly restore the Property to
its condition existing prior to the commencement of such activities which
disturb or alter the Property. Furthermore, Purchaser agrees to maintain and
cause any of its representatives or agents conducting any Due Diligence to
maintain and have in effect commercial general liability insurance with (i)
limits of not less than One Million and 00/100 Dollars (S1,000,000.00) for
personal
-5-
Diligence, to maintain and have in effect commercial general liability insurance
with (i) limits of not less than One Million and 00/100 Dollars ($ 1,000,000.00)
for personal injury, including bodily injury and death, and property damage,
(ii) such insurance shall name JMB Institutional Apartment Limited
Partnership-II, Heitman Capital Management Corporation ("HCMC") and
Xxxxxxx-Xxxxxx Properties, Ltd. as additional insureds and (iii) waiver of
subrogation, if available. Purchaser shall deliver to Seller a copy of the
certificate of insurance effectuating the insurance required hereunder prior to
the commencement of such activities which certificate shall provide that such
insurance shall not be terminated or modified without at least thirty (30) days'
prior written notice to Seller.
(g) Purchaser acknowledges and agrees that it shall have no right to
review or inspect any of the following: (i) internal memoranda, correspondence,
analyses, documents or reports prepared by or for Seller or an affiliate of
Seller in connection with this (A) Agreement (B) the transaction contemplated by
this Agreement, (C) the acquisition of the Property by Seller (other than
environmental reports, if any) or (D) any prior or current contemplated
reorganization of Seller and certain affiliated funds, (ii) communications
between Seller and HCMC, and (iii) appraisals, assessments or other valuations
of the Property in the possession of Seller or HCMC.
(h) Purchaser agrees and covenants with Seller not to conduct or cause
to be conducted any written or oral communications with any tenant regarding
renegotiating current lease terms or renewal lease terms.
(i) Sections 3.2(e) and 3.2(f) and such other provisions in this
Agreement designated as surviving shall survive Closing for a period of four (4)
months or any termination of this Agreement (collectively, the "Surviving
Obligations").
3.3 Title and Survey. Seller shall, at Seller's sole cost and expense,
obtain and deliver to Purchaser for Purchaser's review a commitment for a
standard owner's policy of title insurance along with a copy of each instrument
listed as an exception thereon (the "Title Commitment") on the Real Property
issued by the Title Company and the Updated Survey. During the Due Diligence
Period, Purchaser shall have the right to obtain, at its sole cost and expense,
any desired endorsements to the Title Commitment which are available. Purchaser
may elect to receive modifications to the Updated Survey (the "Modified Survey")
by notifying Seller of such election in writing within five (5) days after
Purchaser's receipt of the Updated Survey. If Purchaser so elects, Seller shall,
at Purchaser's sole cost and expense, obtain and deliver to Purchaser for
Purchaser's review the Modified Survey. Purchaser shall have until the date
which is fifteen days after receipt of the Title Commitment and Updated Survey
(such date being referred to as the "Title Review Date") far examination of
Title Commitment and Updated Survey and the making of any objections thereto,
said objections to be made in writing and delivered to Seller on or before the
Title Review Date. If
-6-
exceptions and matters and any exceptions or matters caused by or through
Purchaser shall be included in the term "Permitted Exceptions" as used herein.
In the event Purchaser elects to receive the Modified Survey, then Purchaser
shall have until the expiration of the Due Diligence Period for examination of
the Modified Survey and the making of objections only to matters shown thereon
that were not shown on the Updated Survey, such objections to be made in writing
and delivered to Seller on or before the expiration of the Due Diligence Period.
If Purchaser shall fail to make any such objections to the Modified Survey on or
before the expiration of the Due Diligence Period, Purchaser shall be deemed to
have accepted the form and substance of the Modified Survey and all matters
shown thereon; all such exceptions and matters and any exceptions or matters
caused by or through Purchaser shall be included as Permitted Exceptions. If any
objections to (i) the Title Commitment or Updated Survey are made on or before
the Title Review Date, or (ii) the Modified Survey with respect to matters not
shown on the Updated Survey are made on or before the expiration of the Due
Diligence Period, then Seller shall have the right but not, the obligation, to
(w) cure (by removal, endorsement or otherwise) such objections on or before the
Closing Date or (x) terminate this Agreement by giving notice to Purchaser on or
before the date which is two (2) business days after the Due Diligence Period.
If no such notice from Seller concerning such election is received by Purchaser
by such date, then Seller shall be deemed to have elected not to cure any such
objections. If this Agreement is not so terminated by Seller, and any such
objections are not cured by Seller by the scheduled Closing Date, then Purchaser
may as its only option, elect to either: (y) waive such objection(s) and
consummate the transaction contemplated by this Agreement without adjustment to
the Purchase Price; or (z) terminate this Agreement in which event the Xxxxxxx
Money shall be returned to Purchaser and neither party shall have any further
obligations to the other party except for the Surviving Obligations.
4. Closing; Conditions; Deliveries.
4.1 Time, Place and Manner of Closing. The Closing shall be held on the
Closing Date in the offices of the Title Company or at any location mutually
acceptable to the parties.
4.2 Condition to Parties' Obligation to Close. In addition to all other
conditions set forth in this Agreement, the obligation of Seller, on the one
hand, and Purchaser, on the other hand, to consummate the transaction
contemplated hereunder shall be contingent upon the following:
(a) The other party's representations and warranties contained herein
shall be true and correct in all material respects as of the date of this
Agreement and the Closing Date;
-7-
(b) As of the Closing Date, the other party shall have performed its
obligations hereunder in all material respects and all deliveries to be made at
Closing by such other party have been tendered;
(c) As of the Closing Date, there shall exist no pending action, suit
or proceeding with respect to the other party before or by any court or
administrative agency which seeks to restrain or prohibit, or to obtain damages
or a discovery order with respect to, this Agreement or the consummation of the
transactions contemplated hereby; and
(d) Simultaneously with execution of this Agreement, Purchaser shall
have delivered to Seller a fully executed original ERISA certificate in the form
of Exhibit F attached hereto.
(e) Seller acknowledges that Purchaser is a public entity and that
Purchaser is required to furnish statements to the Securities and Exchange
Commission in connection with the acquisition of the Property. Seller hereby
agrees to make any information required by the Securities and Exchange
Commission available to Purchaser so that Purchaser may audit the last twelve
(12) months of operation of the Property in order that a report may be generated
in compliance with accounting Regulation S-X of the Securities and Exchange
Commission.
4.3 Deliveries. At Closing each party shall execute and deliver to the
other and/or the Escrow Company the following documents:
(a) Seller shall deliver to Purchaser and/or the Escrow Company:
(i) a special warranty deed (the "Deed") to the Property in
recordable form, duly executed by Seller and acknowledged and in substantially
the same form as set forth in Exhibit G attached hereto, conveying to Purchaser
title to the Real Property, subject to the Permitted Exceptions;
(ii) a xxxx of sale duly executed by Seller and in substantially
the same form as set forth in Exhibit H attached hereto, conveying to Purchaser
title to all personal property owned by Seller and located at the Real Property,
if any;
(iii) an assignment to Purchaser of the Leases duly executed by
Seller and in substantially the same form as set forth in Exhibit I attached
hereto;
(iv) an assignment to Purchaser of the Service Contracts and
other third party contracts pursuant to Section 5.8 hereof being assumed
hereunder, licenses and permits affecting the Property (to the extent freely
assignable) duly executed by Seller and in substantially the same form as set
forth in Exhibit J attached hereto;
-8-
(v) a non-foreign transferor certification pursuant to Section
1445 of the Internal Revenue Code and any similar provisions of applicable state
law, in substantially the same form as set forth on Exhibit K attached hereto
(the "Affidavit");
(vi) a certified resolution of Seller certifying that Seller has
the legal power, right and authority to consummate the sale of the Property;
(vii) originals of the leases and keys to the Property;
(viii) originals or copies of all signed leases and rental
agreements in effect with tenants of the Property not for more than one (1)
year, Purchaser hereby agrees that for purposes of this Section 4.3(a)(viii)
such leases and rental agreements shall be deemed delivered by Seller so long as
such leases and rental agreements are located on the Property;
(ix) 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;
(x) to the extent owned by Seller and assignable, an assignment
to Purchaser of all rights, title and interest of Seller in and to the business
and trade name, "Xxxxxx Xxxx Apartments" and the business telephone number (the
"Intangible Property") in substantially the same form as set forth on Exhibit N;
(xi) a written termination of the management agreement in
substantially the same form attached hereto as Exhibit O;
(xii) a representation letter as normally required by auditors
for a public company in the form attached hereto as Exhibit P. The delivery of
such representation letter shall survive the Closing for a period of four (4)
months; and
(xiii) any such other documents as are required by the Title
Company.
(b) Purchaser shall deliver to Seller or the Escrow Company:
(i) the Cash Balance, by wire transfer, as provided in Section
2.2(b) hereof;
(ii) an assumption duly executed by the Purchaser of the
assignments described in Sections 4.3(a)(iii) and (iv); and
-9-
(iii) a certified resolution of Purchaser certifying that
Purchaser has the legal power, right and authority to consummate the purchase of
the Property.
(c) Seller and Purchaser shall jointly deliver to the Escrow Company:
(i) A closing statement;
(ii) All transfer declarations or similar documentation required
by law;
(iii) Letters to the tenants of the Property in the form of
Exhibit L attached hereto; and
(iv) Notices in substantially the form of Exhibit M attached
hereto to the other party to each Service Contract assumed by Purchaser pursuant
to Section 3.2(c) of this Agreement.
(d) The Escrow Company shall deliver to Purchaser an initialed xxxx-up
of the Title Commitment, extending the effective date to the Closing Date,
insuring Purchaser as owner of the Real Property in the full amount of the
Purchase Price, and removing all exceptions other than Permitted Exceptions.
(e) Seller shall deliver all apartment units vacated at least seven
(7) days prior to the Closing Date in rent ready condition on the Closing Date.
4.4 Permitted Termination. So long as a party is not in default hereunder,
if any condition to such party's obligation to proceed with the Closing
hereunder has not been satisfied or waived as of the Closing Date or such
earlier date as provided herein, such party may, in its sole discretion,
terminate this Agreement by delivering written notice to the other party before
the Closing Date, or elect to close, notwithstanding the non-satisfaction of
such condition, except Seller's obligation to make apartment units rent-ready
and to deliver the Property in the condition set forth herein, in which event
such party shall be deemed to have waived any such condition.
5. Prorations. All items of income and expense shall be paid, prorated or
adjusted as of the close of business on the day prior to the Closing Date (the
"Proration Date") in the manner hereinafter set forth:
5.1 Purchaser shall be credited with the amount of all rents received by
Seller and attributable to any month commencing after the Closing Date, (ii) all
unapplied cash security deposits held by Seller and which were made by tenants
under all leases of the Real Property
-10-
in effect as of the Closing Date, and (iii) all prepaid security deposits for
leases whose terms have not commenced as of the Closing Date.
5.2 Any amounts received from tenants after Closing shall be applied on a
tenant by tenant basis in the following order: (i) first on account of any
amount then due and payable to Purchaser from such tenant(s); (ii) next, on
account of any amount due Seller from such tenant(s) for the period up to and
including the Proration Date and (iii) finally, any balance then remaining to
Purchaser. Seller retains the right to pursue its remedies against tenants after
Closing for any delinquent payments or other amounts owed to Seller, except for
actions or proceedings affecting possession or landlord liens. However, Seller
will not exercise any such rights or remedies unless such delinquent rents have
not been collected by Purchaser and paid to Sell within three (3) months after
the Closing Date. Any money due to Seller shall be remitted to Seller within
five (5) business days after the end of each month in which Purchaser receives
such money.
5.3 Operating expenses, including, without limitation, transferable
permits, licenses, membership dues, and any other prepaid expenses, shall be
prorated between Purchaser and Seller based upon the actual days of their
respective ownership of the Property utilizing the actual expenses or reasonable
estimates.
5.4 Real estate taxes shall be prorated between Seller and Purchaser based
upon the actual days of ownership of the parties for the year in which Closing
occurs utilizing the most recent ascertainable tax xxxx(s). Seller and Purchaser
agree to reprorate said real estate taxes upon Purchaser's receipt of the actual
tax xxxx for the tax year in question, if any. Seller shall retain all rights
with respect to any refund of taxes applicable to any period prior to the
Closing Date.
5.5 Except for utilities billed directly to tenants, utilities shall be
prorated as of the Proration Date based upon estimates using the prior month's
actual invoices.
5.6 All insurance policies and property management agreements shall be
terminated as of the Closing Date and there shall be no proration with respect
to these items.
All other items which are customarily prorated in transactions similar to the
transaction contemplated hereby and which were not heretofore dealt with, will
be prorated as of the Proration Date. In the event any prorations or
computations made under this Section are based on estimates or prove to be
incorrect, then either party shall be entitled to an adjustment to correct the
same, provided that it makes written demand on the party from whom it is
entitled to such adjustment within one hundred and twenty days after the end of
the current calendar year.
-11-
6. Seller's Representations, Warranties and Covenants. Seller hereby
represents, warrants and covenants as follows:
6.1 Power. Seller has the legal power, right and authority to enter into
this Agreement and the instruments referenced herein and to consummate the
transactions contemplated hereby.
6.2 Requisite Action. All requisite action (corporate, trust partnership or
otherwise) has been taken by Seller in connection with entering into this
Agreement and the instruments referenced herein and the consummation of the
transactions contemplated hereby. No consent of any partner, shareholder,
member, creditor, investor, judicial or administrative body, authority or other
party is required which has not been obtained to permit Seller to enter into
this Agreement and consummate the transaction contemplated hereby.
6.3 Authority. The individuals executing this Agreement and the instruments
referenced herein on behalf of Seller have the legal power, right and actual
authority to bind Seller to the terms and conditions hereof and thereof.
6.4 Validity. This Agreement and all documents required hereby to be
executed by Seller are and shall be valid, legally binding obligations of and
enforceable against Seller in accordance with their terms.
6.5 Conflicts. None of the execution and delivery of this Agreement and
documents referenced herein, the incurrence of the obligations set forth herein,
the consummation of the transactions herein contemplated or referenced herein
conflicts with or results in the material breach of any terms, conditions or
provisions of or constitutes a default under, any bond, note, or other evidence
of indebtedness or any contract, lease or other agreements or instruments to
which Seller is a party.
6.6 Leases. Attached hereto as Schedule 1 is a complete and accurate list
of the leases, occupancy agreements and amendments thereto (collectively "Lease
Documents") relating to the Property as of the date of this Agreement, which
shall be updated by Seller prior to Closing, if necessary including the addition
thereto of Lease Documents executed after the date of this Agreement through the
Closing Date.
6.7 Service Contracts. Attached hereto as Schedule 2 is a complete and
accurate list of the service contracts, equipment leases and other agreements
relating to the Property as of the date of this Agreement which shall be updated
by Seller prior to Closing, if necessary including the addition thereto of any
such agreements executed after the date of this Agreement through the Closing
Date.
-12-
6.8 Notices. Seller has not received any written notice that the Property,
and all present uses and operations thereof, are in violation of any applicable
zoning, or land-use laws.
6.9 Litigation. Except as set forth on Schedule 3 and except for matters
covered by insurance no litigation has been served upon Seller, nor to the best
of the Seller's knowledge has been filed, or threatened in writing, affecting
the Seller's ability to consummate the transaction contemplated by this
Agreement. Schedule 3 shall be updated by Seller prior to Closing, if necessary.
6. 10 Environmental Condition. Seller has no knowledge of any violation of
Environmental Laws related to the Property or the presence or release (other
than as permitted by law) of Hazardous Materials on or from the Property except
as disclosed in the environmental reports, studies and other information
relating to the environmental condition of the Property delivered by Seller to
Purchaser or made available for Purchaser's review. The term "Environmental
Laws" means the Resource Conservation and Recovery Act and the Comprehensive
Environmental Response Compensation and Liability Act ("CERCLA") and other
federal laws governing the environment as in effect on the date of this
Agreement together with their implementing regulations and guidelines as of the
date of this Agreement, and all state, regional, county, municipal and other
local laws, regulations and ordinances that are equivalent or similar to the
federal laws recited above or that purport to regulate Hazardous Materials in
effect as of the date of this Agreement. "Hazardous Materials" means any
substance which is (i) designated, defined, classified or regulated as a
hazardous substance, hazardous material, hazardous waste, pollutant or
contaminant under any Environmental Law, as currently in effect as of the date
of this Agreement, (ii) petroleum hydrocarbon, including crude oil or any
fraction thereof and all petroleum products, (iii) PCBs, (iv) lead, (v) friable
asbestos, (vi) flammable explosives, (vii) infectious materials, or (viii)
radioactive materials.
6.11 Indemnity. Seller shall indemnify and hold Purchaser harmless from and
against any and all claims, actions, judgments, liabilities, liens, damages,
penalties, fines, costs and reasonable attorneys' fees, foreseen or unforeseen,
asserted against, imposed on or suffered or incurred by Purchaser (or the
Property) directly or indirectly arising out of or in connection with any breach
of the warranties, representations and covenants set forth in this Section 6.
The warranties and representations set forth in this Section 6 shall be deemed
remade as of Closing and updated if necessary, and said warranties and
representations as so remade and updated, and the indemnity obligation set forth
in herein shall survive Closing, provided that any claim by Purchaser based upon
a misrepresentation or breach of any warranty or representation or indemnity
obligation under this Section 6 shall be deemed waived unless Purchaser has (i)
delivered to Seller written notice of such claim prior to the
-13-
date which is four (4) months after the Closing Date, and (ii) filed suit within
two (2) months after delivery to Seller of any such notice of claim.
6.12 Dead-bolt Lock. Seller warrants that it has complied with the keyless,
dead-bolt lock requirement pursuant to Section 92 of the Texas Property Code.
As used in this Section 6, the term "to Seller's knowledge" "actual knowledge"
or "best of Sellers knowledge" or words of similar import (i) shall mean the
actual knowledge of Xxxxxx X. Xxxxxxx and Xxx Xxxxxx and not to any other
persons, (ii) shall mean the actual knowledge of such individuals, without any
investigation or inquiry of any kind, and (iii) shall not mean such individuals
are charged with knowledge of the acts, omissions and/or knowledge of Seller's
agents or employees.
Notwithstanding anything contained in this Agreement to the contrary,
Seller shall have no liability for breaches of any representations, warranties
and certifications (the "Representations") which are made by Seller herein or in
any of the documents or instruments required to be delivered by Seller hereunder
if Purchaser, its officers, employees, shareholders, members, partners, or
agents had knowledge of such breach by Seller (including, without limitation,
knowledge gained by Purchaser in the course of its Due Diligence as to a fact or
circumstance which, by its nature, indicates that a Representation was or has
become untrue or inaccurate) at Closing where Purchaser elects to proceed to
close the transaction contemplated by this Agreement, and Purchaser shall not
otherwise have the right to bring any lawsuit or other legal action against
Seller, nor pursue any other remedies against Seller, as a result of the breach
of such Representation caused thereby, but Purchaser's sole right shall be to
terminate this Agreement in which event, the Xxxxxxx Money shall be returned to
Purchaser.
7. Purchase As-Is. EXCEPT FOR THE REPRESENTATIONS OF SELLER EXPRESSLY SET
FORTH IN SECTION 6 OF THIS AGREEMENT, PURCHASER WARRANTS AND ACKNOWLEDGES TO AND
AGREES WITH SELLER THAT PURCHASER IS PURCHASING THE PROPERTY IN ITS "AS-IS,
WHERE IS" CONDITION "WITH ALL FAULTS" AS OF THE CLOSING DATE AND SPECIFICALLY
AND EXPRESSLY WITHOUT ANY WARRANTIES, REPRESENTATIONS OR GUARANTEES, EITHER
EXPRESS OR IMPLIED, AS TO ITS CONDITION, FITNESS FOR ANY PARTICULAR PURPOSE,
MERCHANTABILITY, OR ANY OTHER WARRANTY OF ANY KIND, NATURE, OR TYPE WHATSOEVER
FROM OR ON BEHALF OF SELLER. EXCEPT FOR THE REPRESENTATIONS OF SELLER EXPRESSLY
SET FORTH IN SECTION 6 OF THIS AGREEMENT, SELLER SPECIFICALLY DISCLAIMS ANY
WARRANTY, GUARANTY OR REPRESENTATION, ORAL OR WRITTEN, PAST OR PRESENT, EXPRESS
OR IMPLIED, CONCERNING (A) THE VALUE, NATURE, QUALITY OR CONDITION OF THE
PROPERTY, INCLUDING, WITHOUT LIMITATION, THE WATER,
-14-
STRUCTURAL INTEGRITY, SOIL AND GEOLOGY; (B) THE INCOME TO BE DERIVED FROM THE
PROPERTY; (C) THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND
USES WHICH PURCHASER MAY CONDUCT THEREON, INCLUDING THE POSSIBILITIES FOR FUTURE
DEVELOPMENT OF THE PROPERTY; (D) THE COMPLIANCE OF OR BY THE PROPERTY OR ITS
OPERATION WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY APPLICABLE
GOVERNMENTAL AUTHORITY OR BODY; (E) THE HABITABILITY, MERCHANTABILITY,
MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE
PROPERTY; (F) THE MANNER OR QUALITY OF THE CONSTRUCTION OR MATERIALS, IF ANY,
INCORPORATED INTO THE PROPERTY; (G) THE MANNER, QUALITY, STATE OF REPAIR OR LACK
OF REPAIR OF THE PROPERTY; (H) THE PRESENCE OR ABSENCE OF HAZARDOUS MATERIALS
AT, UNDER, OR ADJACENT TO THE PROPERTY OR ANY OTHER ENVIRONMENTAL MATTER OR
CONDITION OF THE PROPERTY; OR (I) ANY OTHER MATTER WITH RESPECT TO THE PROPERTY.
PURCHASER ACKNOWLEDGES AND AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND
WARRANTIES OF SELLER CONTAINED IN SECTION 6 OF THIS AGREEMENT, ANY INFORMATION
PROVIDED BY OR ON BEHALF OF SELLER WITH RESPECT TO THE PROPERTY WAS OBTAINED
FROM A VARIETY OF SOURCES AND THAT SELLER HAS NOT MADE ANY INDEPENDENT
INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND MAKES NO REPRESENTATIONS
AS TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. SELLER WARRANTS TO
PURCHASER THAT ALL OF THE DOCUMENTATION RELATING TO THE PROPERTY PROVIDED TO
PURCHASER BY SELLER HAS BEEN PREPARED IN THE ORDINARY COURSE OF BUSINESS. SELLER
IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY ORAL OR WRITTEN STATEMENTS,
REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY, OR THE OPERATION
THEREOF, FURNISHED BY ANY REAL ESTATE BROKER, AGENT, EMPLOYEE, SERVANT OR OTHER
PERSON EXCEPT FOR THE EXPRESS REPRESENTATIONS SET FORTH IN SECTION 6 OF THIS
AGREEMENT. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT PURCHASER IS A
SOPHISTICATED AND EXPERIENCED PURCHASER OF PROPERTIES SUCH AS THE PROPERTY AND
HAS BEEN DULY REPRESENTED BY COUNSEL IN CONNECTION WITH THE NEGOTIATION OF THIS
AGREEMENT. EXCEPT AS MAY OTHERWISE BE PROVIDED HEREIN, SELLER HAS MADE NO
AGREEMENT TO ALTER, REPAIR OR IMPROVE ANY OF THE PROPERTY.
8. Confidentiality. Seller agrees and covenants with Purchaser not to disclose
to any third party (other than its affiliates, investors, employees, agents,
attorneys and other professionals and consultants in connection with the
transaction contemplated herein) without Purchaser's prior written consent,
unless Seller is obligated by law to make such disclosure, any of the reports or
any other documentation or information obtained by Seller
-15-
which relates to the Property or Purchaser in any way, all of which shall be
used by Seller and its agents solely in connection with the transaction
contemplated hereby. In the event that this Agreement is terminated, Seller
agrees that all such information will be held in strict confidence.
9. Purchaser's Representations, Warranties and Covenants. Purchaser hereby
represents, warrants and covenants as follows:
9.1 Power, Purchaser has the legal power, right and authority to enter into
this Agreement and the instruments referenced herein and to consummate the
transactions contemplated hereby.
9.2 Requisite Action. All requisite action (corporate, trust, partnership
or otherwise) has been taken by Purchaser in connection with entering into this
Agreement and the instruments referenced herein and the consummation of the
transactions contemplated hereby. No consent of any partner, shareholder,
member, creditor, investor, judicial or administrative body, authority or other
party is required which has not been obtained or shall not be obtained prior to
the Closing Date to permit Purchaser to enter into this Agreement and consummate
the transaction contemplated hereby.
9.3 Authority. The individuals executing this Agreement and the instruments
referenced herein on behalf of Purchaser have the legal power, right and actual
authority to bind Purchaser to the terms and conditions hereof and thereof.
9.4 Validity. This Agreement and all documents required hereby to be
executed by Purchaser are and shall be valid, legally binding obligations of and
enforceable against Purchaser in accordance with their terms.
9.5 Conflicts. Neither the execution and delivery of this Agreement and
documents referenced herein, nor the incurrence of the obligations set forth
herein, nor the consummation of the transactions herein contemplated, nor
referenced herein conflict with or result in the material breach of any terms,
conditions or provisions of or constitute a default under, any bond, note, or
other evidence of indebtedness or any contract, lease or other agreements or
instruments to which Purchaser is a party.
9.6 Litigation. There is no action, suit or proceeding pending or
threatened against Purchaser in any court or by or before any other governmental
agency or instrumentality which would materially and adversely affect the
ability of Purchaser to carry out the transactions contemplated by this
Agreement.
9.7 Indemnity. Upon timely written notice to Purchaser by any indemnified
Party, Purchaser shall have the right to defend the Indemnified Parties against
any third party claims
-16-
or actions. Purchaser shall also indemnify, protect and hold the Indemnified
Parties harmless from and against any and all claims, actions, judgments,
liabilities, liens, damages, penalties, fines, costs and reasonable attorneys'
fees, foreseen or unforeseen, asserted against, imposed on or suffered or
incurred by Seller directly or indirectly arising out of or in connection with
any breach of the warranties, representations and covenants set forth in this
Section 8 or the inaccuracy of the ERISA Certificate. The warranties,
representations and indemnities set forth in this Section 8 shall be deemed
remade as of Closing and shall survive Closing, and said warranties and
representations as so remade, and the indemnity obligation set forth in herein
shall be deemed waived unless Seller has given Purchaser written notice of any
such claim prior to the date which is four (4) months from the Closing Date.
10. Closing Costs. Seller shall pay the following expenses: (i) the costs to
obtain a standard owner's title policy; (ii) the costs to obtain the Updated
Survey; (iii) one-half of all closing escrow fees, including "New York Style"
closing fees; and (iv) Seller's legal fees and expenses. Purchaser shall pay the
following expenses: (a) the costs for any endorsements to the title policy; (b)
the cost of any reinsurance of the title policy; (c) the costs to obtain
modifications to the Updated Survey; (d) one-half of all closing escrow fees,
including "New York Style" closing fees; (e) the fee for the recording of the
Deed; (f) all costs and expenses incurred in connection with the transfer of any
transferable permits, warranties or licenses in connection with the ownership or
operation of the Property; (g) all costs and expenses associated with
Purchaser's financing, if any; and (h) Purchaser's legal fees and expenses. The
provisions of this Section 9 shall survive Closing or any termination of this
Agreement.
11. Commissions. Seller shall be solely responsible for the payment of the
commission to X'Xxxxx Properties, Inc. Seller and Purchaser each warrant and
represent to the other that (other than X'Xxxxx Properties, Inc.) neither has
had any dealings with any broker, agent, or finder relating to the sale of the
Property or the transactions contemplated hereby, and each agrees to indemnify
and hold the other harmless against any claim for brokerage commissions,
compensation or fees by any broker, agent, or finder in connection the sale of
the Property or the transactions contemplated hereby resulting from the acts of
the indemnifying party. The provisions of this Section 10 shall survive Closing.
12. New York Style Closing. It is contemplated that the transaction shall be
closed by means of a so-called New York Style Closing, with the concurrent
delivery of the documents of title, transfer of interest, delivery of the title
policy or marked-up title commitment described in Section 4.3(d) and the payment
of the Purchase Price. Seller and Purchaser agree that disbursement of the
Purchase Price, as adjusted by the prorations, shall not be conditioned upon the
recording of the Deed, but rather, upon the agreement by the Title Company to
issue the title policy. Seller and Purchaser shall each provide any undertaking
to the Title Company necessary to accommodate the New York Style Closing.
-17-
13. Attorneys' Fees and Costs. In the event suit or action is instituted to
interpret or enforce the terms of this Agreement, or in connection with any
arbitration or mediation of any dispute, the prevailing party shall be entitled
to recover from the other party such sum as the court, arbitrator or mediator
may adjudge reasonable as such party's costs and attorney's fees, including such
costs and fees as are incurred in any trial, on any appeal, in any bankruptcy
proceeding (including the adjudication of issues peculiar to bankruptcy law) and
in any petition for review. Each party shall also have the right to recover its
reasonable costs and attorney's fees incurred in collecting any sum or debt owed
to it by the other party, with or without litigation, if such sum or debt is not
paid within fifteen (15) days following written demand therefor.
14. Notice. All notices, demands, deliveries and communications (a "Notice")
under this Agreement shall be delivered or sent by: (i) first class, registered
or certified mail, postage prepaid, return receipt requested, (ii) nationally
recognized overnight carrier, or (iii) facsimile with original Notice sent via
overnight delivery addressed to the address of the party in question set forth
in the first paragraph of this Agreement and copies to the parties designated
below or to such other address as either party may designate by Notice pursuant
to this Section 13. Notices shall be deemed given (x) three business days after
being mailed as provided in clause (i) above, (y) one business day after
delivery to the overnight carrier as provided in clause (ii) above, or (z) on
the day of the transmission of the facsimile so long as it is received in its
entirety by 5:00 pm (New York City, New York Time) on such day and the original
of such Notice is received the next business day via overnight mail as provided
in clause (iii) above.
Notices to Seller copy to: Altheimer & Xxxx
00 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn.: Xxxxxx X. Xxxxx
Facsimile No.: (000) 000-0000
Notices to Purchaser copy to: Xxxxx X. Xxxxxxxxxx, Esq.
Xxxxxxxxxx & Xxxxxxxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
And Xxx Xxxxxxxx, Esq.
Xxxxx XxXxxxxxx & Oak Hartline
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
-18-
15. Fire or Other Casuality; Condemnation.
15.1 If the Property or any part thereof is damaged by fire or other
casualty prior to the Closing Date which would cost in excess of $200,000.00 to
repair (as determined by an insurance adjuster selected by the insurance
carriers), Purchaser may terminate this Agreement by written notice to Seller
given on or before the earlier of (i) twenty (20) days following such casualty
or (ii) the Closing Date. In the event of such termination, this Agreement shall
be of no further force and effect and, except for the Surviving Obligations,
neither party shall thereafter have any further obligation under this Agreement,
and Seller shall direct the Escrow Company to promptly return all Xxxxxxx Money
to Purchaser. If Purchaser does not elect to terminate this Agreement or the
cost of repair is determined by said adjuster to be less than $200,000.00, then
the Closing shall take place as herein provided without abatement of the
Purchase Price, and Seller shall assign and transfer to Purchaser on the Closing
Date, without warranty or recourse, all of Seller's right, title and interest to
the balance of insurance proceeds paid or payable to Seller on account of such
fire or casualty remaining after reimbursement to Seller for the total amount of
all costs and expenses incurred by Seller in connection therewith including but
not limited to making emergency repairs, securing the Property and complying
with applicable governmental requirements. Seller shall reimburse Purchaser for
any rent loss suffered by Purchaser which occurs after the Closing Date. Seller
shall pay to Purchaser the amount of the deductible of any of Seller's
applicable insurance policies.
15.2 If any material portion of the Property is taken in eminent domain
proceedings prior to Closing or a notice of intent to take is provided to Seller
by any condemning authority, Purchaser may terminate this Agreement by notice to
Seller given on or before the earlier of (i) twenty (20) days after such taking
or (ii) the Closing Date, and, in the event of such termination, this Agreement
shall be of no further force and effect and, except for the Surviving
Obligations, neither party shall thereafter have any further obligation under
this Agreement, and Seller shall direct the Escrow Company to promptly return
all Xxxxxxx Money to Purchaser. If Purchaser does not so elect to terminate or
if the taking is not material, then the Closing shall take place as herein
provided without abatement of the Purchase Price, and Seller shall deliver or
assign to Purchaser on the Closing Date, without warranty or recourse, all of
Seller's right, title and interest in and to all condemnation awards paid or
payable to Seller. For purposes of this Section 15.2, the term "material" shall
be defined as any diminution of the parking area or any taking of the Property
which exceeds $200,000. Seller hereby agrees that in the event eminent domain
proceedings occur within four (4) months after the Closing Date, Seller shall
cooperate in any settlement or lawsuit between Purchaser and a condemning
authority by providing Purchaser with reasonable information, in Seller's sole
discretion, requested by Purchaser in assisting Purchaser with the valuation of
the Property.
-19-
16. Operations After Date of This Agreement. Seller covenants and agrees with
Purchaser that:
(a) after the date hereof through the Closing, Seller will (except as
specifically provided to the contrary herein):
(i) Refrain from transferring any of the Property or creating on the
Property any easements, liens, mortgages, encumbrances, or other interests
which will survive Closing or permitting any changes to the zoning
classification of the Land;
(ii) Refrain from entering into or amending any contracts, or other
agreements (excluding leases) regarding the Property (other than contracts
in the ordinary and usual course of business and which are cancelable by
the owner of the Property without penalty within thirty (30) days after
giving notice thereof);
(iii) Continue to operate, maintain, and repair the Property in a
manner consistent with Seller's current practices;
(iv) Comply with all of the material terms of the Leases; Refrain from
offering the Property for sale or marketing the same; and
(vi) Deliver to Purchaser copies of all Lease Documents entered into
after the date hereof; and
(vii) Enter into new leases only at market rates.
17. Assignment. Purchaser shall not assign this Agreement without Seller's
prior written consent which consent may be withheld for any reason or no reason.
Notwithstanding the foregoing, the parties hereby agree that Purchaser may
assign this Agreement to any entity whereby Purchaser is the controlling partner
without obtaining Seller's consent but with prior notice to Seller. Subject to
the previous sentence, this Agreement shall apply to, inure to the benefit of
and be binding upon and enforceable against the parties hereto and their
respective successors and assigns. Seller's consent to any such assignment shall
be conditioned upon Seller's receipt of the following not less than five (5)
business days prior to the Closing Date: (i) a duly executed express assumption
of all of the duties and obligations of Purchaser by the proposed assignee in a
form acceptable to Seller, and (ii) an ERISA certificate, in the form of Exhibit
F attached hereto and the content of which is satisfactory to Seller.
18. Remedies.
-20-
(a) (i) IN THE EVENT THAT SELLER SHALL FAIL TO CONSUMMATE THIS AGREEMENT
AND SUCH FAILURE IS NOT A RESULT OF PURCHASER'S DEFAULT OR A TERMINATION OF THIS
AGREEMENT BY PURCHASER OR SELLER PURSUANT TO A RIGHT TO DO SO UNDER THE
PROVISIONS HEREOF, PURCHASER, IN THE CASE WHERE SUCH FAILURE IS BASED UPON A
VOLUNTARY BREACH BY SELLER ("SELLER'S DEFAULT"), SHALL ONLY BE ENTITLED TO SEEK
AT ITS ELECTION, EITHER: (A) THE REMEDY OF SPECIFIC PERFORMANCE, OR (B) DAMAGES
IN AN AMOUNT NOT TO EXCEED $250,000.00 IN THE AGGREGATE FOR ALL RECOURSE OF
PURCHASER UNDER THE PURCHASE DOCUMENTS (AS DEFINED IN SECTION 19 HEREOF). IN THE
EVENT PURCHASER ELECTS THE REMEDY OF SPECIFIC PERFORMANCE, SELLER SHALL
INDEMNIFY PURCHASER FOR ANY REASONABLE COSTS INCURRED BY PURCHASER, INCLUDING
REASONABLE ATTORNEY'S FEES. IN NO EVENT SHALL SELLER BE LIABLE TO PURCHASER FOR
ANY PUNITIVE, SPECULATIVE OR CONSEQUENTIAL DAMAGES. IN THE CASE WHERE SUCH
FAILURE IS BASED UPON AN INVOLUNTARY BREACH BY SELLER, PURCHASER, AS ITS SOLE
AND EXCLUSIVE REMEDY, MAY TERMINATE THIS AGREEMENT AND RECEIVE A REFUND OF THE
XXXXXXX MONEY. IN NO EVENT SHALL PURCHASER BE ENTITLED TO RECORD A LIS PENDENS
OR NOTICE OF PENDENCY OF ACTION AGAINST THE PROPERTY FOR ANY REASON WHATSOEVER..
(ii) PURCHASER SHALL (A) NOTIFY SELLER OF ITS ELECTION TO SEEK THE
REMEDY OF SPECIFIC PERFORMANCE ON OR BEFORE THE DATE WHICH IS FORTY FIVE (45)
DAYS AFTER THE DATE OF A SELLER'S DEFAULT AND (B) INSTITUTE PROCEEDINGS SEEKING
SUCH REMEDY ON OR BEFORE THE DATE WHICH IS THIRTY (30) DAYS AFTER THE DATE OF
PURCHASER'S NOTICE.
(iii) PURCHASER SHALL BE DEEMED TO HAVE WAIVED ITS ELECTION TO SEEK
TEE REMEDY OF SPECIFIC PERFORMANCE IF PURCHASER DOES NOT (x) NOTIFY SELLER OF
SUCH ELECTION AS PROVIDED IN SECTION 17(a)(ii)(A) HEREINABOVE, OR (y) INSTITUTE
PROCEEDINGS, SEEKING SUCH REMEDY AS PROVIDED IN SECTION 17(a)(ii)(B)
HEREINABOVE.
(iv) NOTWITHSTANDING ANYTHING IN THIS SECTION 17(a) TO THE CONTRARY,
FAILURE OF A CONDITION PRECEDENT (AS SUCH TERM IS DEFINED IN SECTION 3) SHALL BE
CONSIDERED AN INVOLUNTARY BREACH UNDER THIS SECTION 17(a).
(b) IN THE EVENT THAT PURCHASER SHOULD FAIL TO CONSUMMATE THIS AGREEMENT
FOR ANY REASON, EXCEPT SELLER'S DEFAULT OR THE
-21-
TERMINATION OF THIS AGREEMENT BY PURCHASER OR SELLER PURSUANT TO A RIGHT TO DO
SO UNDER THE TERMS AND PROVISIONS HEREOF, THEN SELLER, AS ITS SOLE AND EXCLUSIVE
REMEDY MAY TERMINATE THIS AGREEMENT BY NOTIFYING PURCHASER THEREOF AND RECEIVE
OR RETAIN THE XXXXXXX MONEY AS LIQUIDATED DAMAGES, PROVIDED THAT THIS PROVISION
SHALL NOT LIMIT SELLER'S RIGHTS TO RECEIVE REIMBURSEMENT FOR ATTORNEYS FEES AND
TO PURSUE AND RECOVER ON A CLAIM WITH RESPECT TO ANY SURVIVING OBLIGATIONS. THE
PARTIES AGREE THAT SELLER WILL SUFFER DAMAGES IN THE EVENT OF PURCHASER'S
DEFAULT ON ITS OBLIGATIONS. ALTHOUGH THE AMOUNT OF SUCH DAMAGES IS DIFFICULT OR
IMPOSSIBLE TO DETERMINE, THE PARTIES AGREE THAT THE AMOUNT OF THE XXXXXXX MONEY
IS A REASONABLE ESTIMATE OF SELLER'S LOSS IN THE EVENT OF PURCHASER'S DEFAULT.
THUS, SELLER SHALL ACCEPT AND RETAIN THE XXXXXXX MONEY AS LIQUIDATED DAMAGES BUT
NOT AS A PENALTY. EXCEPT AS OTHERWISE SET FORTH IN THIS SECTION 17(b), SUCH
LIQUIDATED DAMAGES SHALL CONSTITUTE SELLER'S SOLE AND EXCLUSIVE REMEDY. IN THE
EVENT SELLER IS ENTITLED TO THE XXXXXXX MONEY AS LIQUIDATED DAMAGES AND TO THE
EXTENT SELLER HAS NOT ALREADY RECEIVED THE XXXXXXX MONEY, THE XXXXXXX MONEY
SHALL BE IMMEDIATELY PAID TO SELLER BY THE ESCROW COMPANY UPON (I) THE ESCROW
COMPANY'S RECEIPT OF WRITTEN NOTICE FROM SELLER THAT PURCHASER HAS DEFAULTED
UNDER THIS AGREEMENT, AND PURCHASER AGREES TO TAKE ALL SUCH ACTIONS AND EXECUTE
AND DELIVER ALL SUCH DOCUMENTS NECESSARY OR APPROPRIATE TO EFFECT SUCH PAYMENT
AND (II) THE ESCROW COMPANY DELIVERING TO THE PURCHASER THREE (3) BUSINESS DAYS'
PRIOR WRITTEN NOTICE OF THE ESCROW COMPANY'S INTENT TO DELIVER THE XXXXXXX MONEY
TO SELLER.
SELLER AND PURCHASER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTAND THE
PROVISIONS OF THE FOREGOING LIQUIDATED DAMAGES
-22-
PROVISION AND BY THEIR SIGNATURES IMMEDIATELY BELOW AGREE TO BE BOUND BY ITS
TERMS.
SELLER: PURCHASER:
JMB INSTITUTIONAL APARTMENT CORNERSTONE REALTY GROUP,
LIMITED PARTNERSHIP-II, INC., a Virginia corporation
an Illinois limited partnership
By: Xxxxxxx/JMB Institutional By:
Realty Advisors, Inc., an ----------------------------
Illinois corporation Name:
Its: Corporate General Partner --------------------------
Its:
---------------------------
By:
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Its: Executive Vice President
19. Miscellaneous.
19.1 Entire Agreement. This Agreement, together with the exhibits attached
hereto, constitute the entire agreement of the parties hereto regarding the
purchase and sale of the Property, and all prior agreements, understandings,
representations and statements, oral or written, are hereby merged herein. In
the event of a conflict between the terms of this Agreement and any prior
written agreements, the terms of this Agreement shall prevail. This Agreement
may only be amended or modified by an instrument in writing, signed by the party
intended to be bound thereby.
19.2 Time. All parties hereto agree that time is of the essence in this
transaction. If the time for performance of any obligation hereunder shall fall
on a Saturday, Sunday or holiday (national, in the State of Illinois or the
state in which the Property is located) such that the obligation hereby can not
be performed, the time for performance shall be extended to the next such
succeeding day where performance is possible.
19.3 Counterpart Execution. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original.
19.4 Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER THE LAWS OF THE STATE OF TEXAS AND FOR
-23-
ALL PURPOSES SHALL, BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF TEXAS.
19.5 Publicity. Seller and Purchaser hereby covenant and agree that, at all
times after the date of execution hereof and continuing after the Closing,
unless consented to in writing by the other party, no press release or other
public disclosure concerning this transaction shall be made, and each party
agrees to use best efforts to prevent disclosure of this transaction.
19.6 Recordation. Purchaser shall not record this Agreement or a memorandum
or other notice thereof in any public office without the express written consent
of Seller. A breach by Purchaser of this covenant shall constitute a material
default by Purchaser under this Agreement.
19.7 Benefit. This Agreement is for the benefit of Purchaser and Seller,
and except as provided in the indemnities granted by Purchaser in this Agreement
and in the Purchase Documents (as defined in Section 19) with respect to the
Indemnified Parties listed therein, no other person or entity will be entitled
to rely on this Agreement, receive any benefit from it or enforce any provisions
of it against Purchaser or Seller.
19.8 Section Headings. The Section headings contained in this Agreement are
for convenience only and shall in no way enlarge or limit the scope or meaning
of the various and several Sections hereof
19.9 Further Assurances. Purchaser and Seller agree to execute all
documents and instruments reasonably required in order to consummate the
purchase and sale herein contemplated.
19.10 Severability. If any portion of this Agreement is held to be
unenforceable by a court of competent jurisdiction, the remainder of this
Agreement shall remain in full force and effect.
19.11 Waiver of Trial by Jury. Seller and Purchaser, to the extent they may
legally do so, hereby expressly waive any right to trial by jury of any claim,
demand, action, cause of action, or proceeding arising under or with respect to
this Agreement, or in any way connected with, or related to, or incidental to,
the dealings of the parties hereto with respect to this Agreement or the
transaction related hereto or thereto, in each case whether now existing or
hereafter arising, and irrespective of whether sounding in contract, tort, or
otherwise. To the extent they may legally do so, Seller and Purchaser hereby
agree that any such claim, demand, action, cause of action, or proceeding shall
be decided by a court trial without a jury and that any party hereto may file an
original counterpart or a copy of this
-24-
Section with any court as written evidence of the consent of the other party or
parties hereto to waiver of its or their right to trial by jury.
19.12 Independent Counsel. Purchaser and Seller each acknowledge that: (a)
they have been represented by independent counsel in connection with this
Agreement; (b) they have executed this Agreement with the advice of such
counsel; and (c) this Agreement is the result of negotiations between the
parties hereto and the advice and assistance of their respective counsel. The
fact that this Agreement was prepared by Seller's counsel as a matter of
convenience shall have no import or significance. Any uncertainty or ambiguity
in this Agreement shall not be construed against Seller because Seller's counsel
prepared this Agreement in its final form.
19.13 Governmental Approvals. Nothing contained in this Agreement shall be
construed as authorizing Purchaser to apply for a zoning change, variance,
subdivision maps, lot line adjustment, or other discretionary governmental act,
approval or permit with respect to the Property prior to the Closing, and
Purchaser agrees not to do so. Purchaser agrees not to submit any reports,
studies or other documents, including, without limitation, plans and
specifications, impact statements for water, sewage, drainage or traffic,
environmental review forms, or energy conservation checklists to any
governmental agency, or any amendment or modification to any such instruments or
documents prior to the Closing. Purchaser's obligation to purchase the Property
shall not be subject to or conditioned upon Purchaser's obtaining any variances,
zoning amendments, subdivision maps, lot line adjustment or other discretionary
governmental act approval or permit.
19.14 No Waiver. No covenant term or condition of this Agreement other than
as expressly set forth herein shall be deemed to have been waived by Seller or
Purchaser unless such waiver is in writing and executed by Seller or Purchaser,
as the case may be.
19.15 Discharge and Survival, The delivery of the Deed by Seller, and the
acceptance thereof by Purchaser shall be deemed to be the full performance and
discharge of every covenant and obligation on the part of Seller to be performed
hereunder except the Surviving Obligations or warranties that survive the
Closing. No action shall be commenced after the Closing on any covenant or
obligation except the Surviving Obligations.
20. Exculpation of Seller and Related Parties. Notwithstanding anything to the
contrary contained in this Agreement or in any exhibits attached hereto or in
any documents executed or to be executed in connection herewith (collectively,
including this Agreement said exhibits and any such document, the "Purchase
Documents"), it is expressly understood and agreed by and between the parties
hereto that from and after the Closing: (i) the recourse of Purchaser or its
successors or assigns against Seller with respect to the alleged breach by or on
the part of Seller of any representation, warranty, covenant, undertaking,
indemnity or agreement contained in any of the Purchase Documents (collectively,
"Seller's
-25-
Undertakings") shall be limited to an amount not to exceed $250,000.00 in the
aggregate of all recourse of purchaser under the Purchase Documents; and (ii) no
personal liability or undertakings an alleged personal responsibility of any
sort with respect to any of Seller's Undertakings or any breach thereof is
assumed by, or shall at any time be asserted or enforceable against, Seller or
HCMC, or against any of their respective shareholders, directors, officers,
employees, agents, constituent partners, members, beneficiaries, trustees or
representatives except as provided in (i) above with respect to Seller.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be as
of the day and year first above stated.
SELLER:
JMB INSTITUTIONAL APARTMENT
LIMITED PARTNERSHIP-II an Illinois limited
partnership
By: Xxxxxxx/JMB Institutional Realty
Advisors, Inc., an Illinois corporation
Its: Corporate General Partner
By:
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Its: Executive Vice President
PURCHASER:
CORNERSTONE REALTY GROUP, INC., a
Virginia corporation
By:
----------------------------------------
Name:
--------------------------------------
Its:
---------------------------------------
-26-
