[EAGLE CREST II]
AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement"), is entered into as of the
____ day of January, 1997, by and between Cornerstone Realty Group Incorporated,
a Virginia corporation ("Purchaser"), and Irving Associates, an
Illinois limited partnership ("Seller").
WITNESSETH:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to
sell at the price of SIX MILLION TWO HUNDRED FOURTEEN THOUSAND EIGHT
HUNDRED SEVENTY-SIX AND NO/100 Dollars ($6,214,876.00) (the "Purchase
Price"), that certain property commonly known as Xxxxx Xxxxx XX Xxxxxxxxxx,
Xxxxxx, Xxxxx, legally described on Exhibit A attached hereto and consisting
of 188 units (the "Property"). Included in the Purchase Price is all of the
personal property set forth on Exhibit B attached hereto (the "Personal
Property").
2. PURCHASE PRICE. The Purchase Price shall be paid by Purchaser as
follows:
2.1. Upon the execution of this Agreement, the sum of SEVENTY-FIVE
THOUSAND AND NO/100 Dollars ($75,000.00) (the "Xxxxxxx Money") to be held in
escrow by and in accordance with the provisions of the Escrow Agreement
("Escrow Agreement") attached hereto as Exhibit C; and
2.2. On the "Closing Date" (hereinafter defined), the balance of the
Purchase Price, adjusted in accordance with the prorations, by federally
wired "immediately available" funds, on or before 12:00 p.m Chicago time.
3. TITLE COMMITMENT AND SURVEY.
3.1. Attached hereto as Exhibit D is a copy of a title commitment for an
owner's standard title insurance policy issued by Chicago Title Insurance
Company (hereinafter referred to as "Title Insurer") dated September 9, 1996
for the Property (the "Title Commitment"). For purposes of this Agreement,
"Permitted Exceptions" shall mean: (a) the general printed exceptions
contained in the standard title policy to be issued by Title Insurer
based on the Title Commitment; (b) general real estate taxes, association
assessments, special district taxes and related charges not yet due and
payable; (c) matters shown on the "Existing Survey" (hereinafter defined); (d)
matters caused by the actions of Purchaser; and (e) the title exceptions set
forth in Schedule B of the Title Commitment as Numbers 9(B) through 9(S)
inclusive, to the extent that same effect the Property. All other exceptions
to title shall be referred to as "Unpermitted Exceptions". The Title
Commitment shall be conclusive evidence of good title as therein shown as to all
matters to be insured by the title policy, subject only to the exceptions
therein stated. On the Closing Date, Title Insurer shall deliver to Purchaser a
standard title policy in conformance with the previously delivered Title
Commitment, subject to Permitted Exceptions and Unpermitted Exceptions waived
by Purchaser (the "Title Policy"). Seller shall pay for all of the costs of
the Title Commitment and Title Policy and Purchaser shall pay the cost
of any endorsements to, or extended coverage on, the Title Policy.
3.2. Purchaser has received a survey of the Property prepared by
Landmark Associates, dated May 14, 1996 (the "Existing Survey"). Seller
shall pay for the costs of the Existing Survey and updating the Existing
Survey and Seller shall deliver the updated survey (the "Updated Survey") to
Purchaser prior to Closing. Purchaser hereby acknowledges that all matters
disclosed by the Existing Survey are acceptable to Purchaser.
3.3. The obligation of Purchaser to pay various costs set forth in
Paragraphs 3.1 and 3.2 shall survive the termination of this Agreement.
4. PAYMENT OF CLOSING COSTS.
4.1. Seller shall pay for the costs of the documentary or transfer
stamps to be paid with reference to the "Deed" (hereinafter defined) and
Purchaser shall pay, the costs of all other stamps, intangible, recording,
sales tax and surtax imposed by law with reference to any other sale
documents delivered in connection with the sale of the Property to Purchaser
and all other charges of the Title Insurer in connection with this transaction
except the cost of the Title Commitment and Title Policy as referenced in
Paragraph 3.1.
5. CONDITION OF TITLE.
5.1. If, prior to "Closing" (as hereinafter defined), a date-down to
the Title Commitment or the Updated Survey discloses any new Unpermitted
Exception, Seller shall have thirty (30) days from the date of the
date-down to the Title Commitment or the Updated Survey, as applicable, at
Seller's expense, to (i) bond over, cure and/or have any Unpermitted
Exceptions which, in the aggregate, do not exceed $100,000.00 (a "Minor
Unpermitted Exception"), removed from the Title Commitment or to have the
Title Insurer commit to insure against loss or damage that may be occasioned by
such Unpermitted Exceptions, or (ii) have the right, but not the obligation,
to bond over, cure and/or have any Unpermitted Exceptions which, in the
aggregate, equal or exceed $100,000.00, removed from the Title Commitment or
to have the Title Insurer commit to insure against loss or damage that may be
occasioned by such Unpermitted Exceptions. In such event, the time of Closing
shall be delayed, if necessary, to give effect to said aforementioned time
periods. If Seller fails to cure or have said Unpermitted Exception removed
or have the Title Insurer commit to insure as specified above within said
thirty (30) day period or if Seller elects not to exercise its rights under
(ii) in the preceding sentence, Purchaser may terminate this Agreement
upon notice to Seller within seven (7) days after the expiration of said
thirty (30) day period provided, however, and notwithstanding anything
contained herein to the contrary, if the Unpermitted Exception which gives rise
to Purchaser's right to terminate was recorded against the Property as a result
of the affirmative, willful action of Seller (and not by any unrelated third
party) with the intention to prevent the sale of the Property in accordance
with the terms hereof or if Seller is able to bond over, cure or remove
a Minor Unpermitted Exception for a cost not to exceed $100,000 or the Title
Insurer is willing to insure over a Minor Unpermitted Exception for a cost
not to exceed $100,000 in accordance with the terms hereof and Seller fails
to expend said funds in either case, then Purchaser shall have the additional
rights contained in Paragraph 11 herein. Absent notice from Purchaser to
Seller in accordance with the preceding sentence, Purchaser shall be deemed
to have elected to take title subject to said Unpermitted Exception. If
Purchaser terminates this Agreement in accordance with the terms of this
Paragraph 5.1, this Agreement shall become null and void without further
action of the parties and all Xxxxxxx Money theretofore deposited into the
escrow by Purchaser together with any interest accrued thereon, shall be
returned to Purchaser, and neither party shall have any further liability to
the other, except for Purchaser's obligation to indemnify Seller and restore
the Property, as more fully set forth in Paragraph 7.
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5.2. Seller agrees to convey fee simple title to the Property to
Purchaser by special warranty deed (the "Deed") in recordable form subject
only to the Permitted Exceptions and any Unpermitted Exceptions waived by
Purchaser.
6. CONDEMNATION, EMINENT DOMAIN, DAMAGE AND CASUALTY.
6.1. Except as provided in the indemnity provisions contained in
Paragraph 7.1 of this Agreement, Seller shall bear all risk of loss with
respect to the Property up to the earlier of the dates upon which either
possession or title is transferred to Purchaser in accordance with this
Agreement. Notwithstanding the foregoing, in the event of damage to the
Property by fire or other casualty prior to the Closing Date, repair of
which would cost less than or equal to $100,000.00 (as determined by Seller's
insurance adjuster) Purchaser shall not have the right to terminate its
obligations under this Agreement by reason thereof, but Seller shall have
the right to elect to either repair and restore the Property (in which case the
Closing Date shall be extended until completion of such restoration) or to
assign and transfer to Purchaser on the Closing Date all of Seller's right,
title and interest in and to all insurance proceeds paid or payable to Seller on
account of such fire or casualty, including proceeds of loss of rent insurance
for any period of time arising after the Closing Date, and Seller shall pay
to Purchaser at the Closing the amount of Seller's insurance deductible.
Within ten (10) days of such an occurrence, Seller shall notify Purchaser in
writing of any such fire or other casualty and Seller's determination of the
cost to repair the damage caused thereby. In the event of damage to the
Property by fire or other casualty prior to the Closing Date, repair of
which would cost in excess of S100,000.00 (as determined by Seller's insurance
adjuster), then this Agreement may be terminated at the option of Purchaser,
which option shall be exercised, if at all, by Purchaser's written notice
thereof to Seller within seven (7) business days after Purchaser receives
written notice of such fire or other casualty and Seller's determination of the
amount of such damages, and upon the exercise of such option by Purchaser this
Agreement shall become null and void, the Xxxxxxx Money deposited by Purchaser
shall be returned to Purchaser together with interest thereon, and neither party
shall have any further liability or obligations hereunder. In the event that
Purchaser does not exercise the option set forth in the preceding sentence,
the Closing shall take place on the Closing Date and Seller shall assign and
transfer to Purchaser on the Closing Date all of Seller's right, title
and interest in and to all insurance proceeds paid or payable to Seller on
account of the fire or casualty, including proceeds of loss of rent insurance
for any period of time arising after the Closing Date, and Seller shall pay
to Purchaser at the Closing the amount of Seller's insurance deductible.
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6.2. If between the date of this Agreement and the Closing
Date, any condemnation or eminent domain proceedings are initiated which
might result in the taking of any part of the Property or the taking or closing
of any right of access to the Property, Seller shall immediately notify
Purchaser of such occurrence. In the event that the taking of any part of the
Property shall: (i) impair access to the Property; (ii) cause any non-compliance
with any applicable law, ordinance, rule or regulation of any federal, state
or local authority or governmental agencies having jurisdiction over the
Property or any portion thereof; or (iii) and adversely impair the use
of the Property as it is currently being operated (hereinafter collectively
referred to as a "Material Event"), Purchaser may:
6.2.1. terminate this Agreement by written notice to Seller, in which
event the Xxxxxxx Money deposited by Purchaser, together with interest thereon,
shall be returned to Purchaser and all rights and obligations of the parties
hereunder with respect to the closing of this transaction will cease; or
6.2.2. proceed with the Closing, in which event Seller shall assign to
Purchaser all of Seller's right, title and interest in and to any award made in
connection with such condemnation or eminent domain proceedings.
6.3. Purchaser shall then notify Seller, within seven (7) business
days after Purchaser's receipt of Seller's notice, whether Purchaser elects to
exercise its rights under Paragraph 6.2.1 or Paragraph 6.2.2. Closing shall
be delayed, if necessary, until Purchaser makes such election. If Purchaser
fails to make an election within such seven (7) business day period, Purchaser
shall be deemed to have elected to exercise its rights under Paragraph 6.2.2. If
between the date of this Agreement and the Closing Date, any condemnation or
eminent domain proceedings are initiated which do not constitute a Material
Event, Purchaser shall be required to proceed with the Closing, in which event
Seller shall assign to Purchaser all of Seller's right, title and interest in
and to any award made in connection with such condemnation or eminent domain
proceedings.
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7. INSPECTION AND AS-IS CONDITION.
7.1. During the period commencing on December 26, 1996 and ending at
5:00 p.m. Chicago time on January 21, 1997 (said period being herein referred
to as the "Inspection Period"), Purchaser and the agents, engineers,
employees, contractors and surveyors retained by Purchaser may enter upon the
Property, at any reasonable time and upon reasonable prior notice to Seller,
to inspect the Property, including a review of leases located at the Property,
and to conduct and prepare such studies, tests and surveys as Purchaser may
deem reasonably necessary and appropriate. In connection with Purchaser's
review of the Property, Seller agrees to deliver to Purchaser copies of the
current rent roll for the Property, the most recent tax and insurance bills,
utility account numbers and service contracts.
All of the foregoing tests, investigations and studies to be
conducted under this Paragraph 7.1 by Purchaser shall be at Purchaser's sole
cost and expense and Purchaser shall restore the Property to the condition
existing prior to the performance of such tests or investigations by or on
behalf of Purchaser. Purchaser shall defend, indemnify and hold Seller and
any affiliate, parent of Seller, and all shareholders, employees, officers
and directors of Seller or Seller's affiliate or parent (hereinafter
collectively referred to as "Affiliate of Seller") harmless from any and all
liability, cost and expense (including without limitation, reasonable
attorney's fees, court costs and costs of appeal) suffered or incurred by Seller
or Affiliates of Seller for injury to persons or property caused by
Purchaser's investigations and inspection of the Property. Seller shall notify
Purchaser if Seller receives written notice of threatened, or actually
instituted claims, for injury to persons or property caused by Purchaser's
investigations and inspection of the Property. Purchaser shall undertake
its obligation to defend set forth in the preceding sentence using attorneys
selected by Seller, in Seller's sole discretion.
Prior to commencing any such tests, studies and investigations,
Purchaser shall furnish to Seller a certificate of insurance evidencing
comprehensive general public liability insurance insuring the person, firm or
entity performing such tests, studies and investigations and listing Seller and
Purchaser as additional insureds thereunder.
If Purchaser is dissatisfied with the results of the tests,
studies or investigations performed or information received pursuant to this
Paragraph 7.1, Purchaser shall have the right to terminate this Agreement by
giving written notice of such termination to Seller at any time prior to the
expiration of the Inspection Period. If written notice is not received by
Seller pursuant to this Paragraph 7.1 prior to the expiration of the Inspection
Period, then the right of Purchaser to terminate this Agreement pursuant to
this Paragraph 7.1 shall be waived. If Purchaser terminates this Agreement by
written notice to Seller prior to the expiration of the Inspection Period: (i)
Purchaser shall promptly deliver to Seller copies of all studies, reports and
other investigations obtained by Purchaser in connection with its due
diligence during the Inspection Period; and (ii) the Xxxxxxx Money deposited
by Purchaser shall be immediately paid to Purchaser, together with any
interest earned thereon, and neither Purchaser nor Seller shall have any right,
obligation or liability under this Agreement, except for Purchaser's
obligation to indemnify Seller and restore the Property, as more fully set
forth in this Paragraph 7.1. Notwithstanding anything contained herein to
the contrary, the terms of this Paragraph 7.1, shall survive the Closing and the
delivery of the Deed and termination of this Agreement.
7.2. Purchaser acknowledges and agrees that it will be purchasing the
Property and the Personal Property based solely upon its inspections and
investigations of the Property and the Personal Property, and that Purchaser
will be purchasing the Property and the Personal Property "AS IS" and "WITH ALL
FAULTS", based upon the condition of the Property and the Personal
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Property as of the date of this Agreement, wear and tear and loss by fire or
other casualty or condemnation excepted. Without limiting the foregoing,
Purchaser acknowledges that, except as may otherwise be specifically set forth
elsewhere in this Agreement, neither Seller nor its consultants, brokers or
agents have made any representations or warranties of any kind upon which
Purchaser is relying as to any matters concerning the Property or the Personal
Property, including, but not limited to, the condition of the land or any
improvements comprising the Property, the existence or non-existence of
"Hazardous Materials" (as hereinafter defined), economic projections or market
studies concerning the Property, any development rights, taxes, bonds,
covenants, conditions and restrictions affecting the Property, water or water
rights, topography, drainage, soil, subsoil of the Property, the utilities
serving the Property or any zoning or building laws, rules or regulations or
"Environmental Laws" (hereinafter defined) affecting the Property. Seller makes
no representation or warranty that the Property complies with Title III of the
Americans with Disabilities Act or any fire code or building code. Purchaser
hereby releases Seller and the Affiliates of Seller from any and all liability
in connection with any claims which Purchaser may have against Seller or the
Affiliates of Seller, and Purchaser hereby agrees not to assert any claims for
contribution, cost recovery or otherwise, against Seller or the Affiliates of
Seller, relating directly or indirectly to the existence of asbestos or
Hazardous Materials on, or environmental conditions of, the Property, whether
known or unknown. As used herein, "Environmental Laws" means all federal, state
and local statutes, codes, regulations, rules, ordinances, orders, standards,
permits, licenses, policies and requirements (including consent decrees,
judicial decisions and administrative orders) relating to the protection,
preservation, remediation or conservation of the environment or worker health or
safety, all as amended or reauthorized, or as hereafter amended or reauthorized,
including without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), 42 U.S.C. ss. 9601 et seq.,
the Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. ss.
6901 et seq., the Emergency Planning and Community Right-to-Know Act
("Right-to-Know Act"), 42 U.S.C. ss. 11001 et seq., the Clean Air Act ("CAA"),
42 U.S.C. ss. 7401 et seq., the Federal Water Pollution Control Act ("Clean
Water Act"), 33 U.S.C. ss. 1251 et seq., the Toxic Substances Control Act
("TSCA"), 15 U.S.C. ss. 2601 et seq., the Safe Drinking Water Act ("Safe
Drinking Water Act"), 42 U.S.C. ss. 300f et seq., the Atomic Energy Act
("AEA"), 42 U.S.C. ss. 2011 et seq., the Occupational Safety and Health Act
("OSHA"), 29 U.S.C. ss. 651 et seq., and the Hazardous Materials
Transportation Act (the "Transportation Act"), 49 U.S.C. ss. 1802 et seq. As
used herein, "Hazardous Materials" means: (1) hazardous substances," as
defined by CERCLA; (2) "hazardous wastes," as defined by RCRA; (3) any
radioactive material including, without limitation, any source, special nuclear
or by-product material, as defined by AEA; (4) asbestos in any form or
condition; (5) polychlorinated biphenyls; and (6) any other material, substance
or waste to which liability or standards of conduct may be imposed under any
Environmental Laws. Notwithstanding anything contained herein to the contrary,
Purchaser's obligations, as more fully set forth in this Paragraph 7.2 shall
survive the Closing and the delivery of the Deed and termination of this
Agreement.
Purchaser's Initials ILLEGIBLE Seller's Initials ILLEGIBLE .
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7.3. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at
Purchaser's request solely as illustrative material. Seller makes no
representation or warranty that such material is complete or accurate or
that Purchaser will achieve similar financial or other results with respect
to the operations of the Property, it being acknowledged by Purchaser that
Seller's operation of the Property and allocations of revenues or expenses may
be vastly different than Purchaser may be able to attain. Purchaser
acknowledges that it is a sophisticated and experienced purchaser of real
estate and further that Purchaser has relied upon its own investigation and
inquiry with respect to the operation of the Property and releases Seller and
the Affiliates of Seller from any liability with respect to such historical
information. Notwithstanding anything contained herein to the contrary,
Purchaser's obligations, as more fully set forth in this Paragraph 7.3 shall
survive the Closing and the delivery of the Deed and termination of this
Agreement.
Purchaser's Initials ILLEGIBLE Seller's Initials ILLEGIBLE .
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7.4. Seller has provided to Purchaser the following existing report:
Phase I Environmental Assessment prepared by Gaiatech Incorporated, Report No.
1688-60, May 24, 1996 ("Existing Report"). Seller makes no representation or
warranty concerning the accuracy or completeness of the Existing Report.
Purchaser hereby releases Seller and the Affiliates of Seller from any liability
whatsoever with respect to the Existing Report, or, including, without
limitation, the matters set forth in the Existing Report, and the accuracy
and/or completeness of the Existing Report. Furthermore, Purchaser
acknowledges that it will be purchasing the Property with all faults disclosed
in the Existing Report. Notwithstanding anything contained herein to the
contrary, Purchaser's obligations, as more fully set forth in this Paragraph
7.4 shall survive the Closing and delivery of the Deeds and termination of this
Agreement.
Purchaser's Initials ILLEGIBLE Seller's Initials ILLEGIBLE.
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8. CLOSING.
The closing of this transaction (the "Closing") shall be on January
29, 1997 (the "Closing Date"), at the office of Title Insurer, Irving, Texas,
at which xxxx Xxxxxx shall deliver possession of the Property to
Purchaser. This transaction shall be closed through an escrow with Title
Insurer, in accordance with the general provisions of the usual and customary
form of deed and money escrow for similar transactions in North Carolina, or
at the option of either party, the Closing shall be a "New York style" closing
at which the Purchaser shall wire the Purchase Price to Title Insurer on the
Closing Date and prior to the release of the Purchase Price to Seller, Purchaser
shall receive the Title Policy or marked up commitment dated the date of the
Closing Date. In the event of a New York style closing, Seller shall deliver to
Title Insurer any customary affidavit in connection with a New York style
closing. All closing and escrow fees shall be divided equally between the
parties hereto.
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9. CLOSING DOCUMENTS.
9.1. On the Closing Date, Seller and Purchaser shall execute and
deliver to one another a joint closing statement. In addition, Purchaser
shall deliver to Seller the balance of the Purchase Price, an assumption of
the documents set forth in Paragraph 9.2.3 and 9.2.4 and such other documents as
may be reasonably required by the Title Insurer in order to consummate the
transaction as set forth in this Agreement.
9.2. On the Closing Date, Seller shall deliver to Purchaser the
following:
9.2.1. the Deed (in the form of Exhibit E attached hereto), subject to
Permitted Exceptions and those Unpermitted Exceptions waived by Purchaser;
9.2.2. a xxxx of sale conveying the Personal Property (in the form of
Exhibit F attached hereto);
9.2.3. assignment and assumption of intangible property (in the form
attached hereto as Exhibit G), including, without limitation, the service
contracts listed in Exhibit H;
9.2.4. an assignment and assumption of leases and security deposits (in
the form attached hereto as Exhibit I);
9.2.5. non-foreign affidavit (in the form of Exhibit J attached hereto);
9.2.6. original, and/or copies of, leases affecting the Property in
Seller's possession;
9.2.7. all documents and instruments reasonably required by the Title
Insurer to issue the Title Policy;
9.2.8. possession of the Property to Purchaser;
9.2.9. evidence of the termination of the management agreement;
9.2.10. notice to the tenants of the Property of the transfer of title
and assumption by Purchaser of the landlord's obligation under the leases and
the obligation to refund the security deposits (in the form of Exhibit K); and
9.2.11. a certified updated rent roll.
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10. DEFAULT BY PURCHASER. ALL XXXXXXX MONEY DEPOSITED INTO THE ESCROW IS TO
SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND UNDERTAKINGS
UNDER THIS AGREEMENT. IN THE EVENT OF A DEFAULT OF THE PURCHASER UNDER THE
PROVISIONS OF THIS AGREEMENT, SELLER SHALL RETAIN ALL OF THE XXXXXXX MONEY AND
THE INTEREST THEREON AS SELLER'S SOLE RIGHT TO DAMAGES OR ANY OTHER REMEDY,
EXCEPT FOR PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER AND RESTORE THE PROPERTY
AS SET FORTH IN PARAGRAPH 7.1 HEREOF. THE PARTIES HAVE AGREED THAT SELLER'S
ACTUAL DAMAGES, IN THE EVENT OF A DEFAULT BY PURCHASER, WOULD BE EXTREMELY
DIFFICULT OR IMPRACTICAL TO DETERMINE. THEREFORE, BY PLACING THEIR INITIALS
BELOW, THE PARTIES ACKNOWLEDGE THAT THE XXXXXXX MONEY HAS BEEN AGREED UPON,
AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S
DAMAGES.
PURCHASER AND SELLER AGREE THAT A DEFAULT BY PURCHASER UNDER ANY OF THE
TERMS OR CONDITIONS OF THE COMPANION CONTRACT (AS HEREINAFTER DEFINED) SHALL BE
DEEMED A DEFAULT OF PURCHASER UNDER THIS AGREEMENT. IN ADDITION, PURCHASER
AND SELLER AGREE THAT A DEFAULT BY PURCHASER UNDER THIS AGREEMENT SHALL BE
DEEMED A DEFAULT OF PURCHASER UNDER THE COMPANION CONTRACT. IF THE TRANSACTION
CONTEMPLATED BY THE COMPANION CONTRACT FAILS TO CLOSE FOR ANY REASON WHATSOEVER,
PURCHASER SHALL NOT BE ENTITLED TO ANY RIGHTS OF SETOFF UNDER THIS AGREEMENT IN
CONNECTION WITH ANY LIABILITY ARISING UNDER THE COMPANION CONTRACT.
Purchaser's Initials ILLEGIBLE Seller's Initials ILLEGIBLE.
_________ _________
11. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF ALL XXXXXXX MONEY
TOGETHER WITH ANY INTEREST ACCRUED THEREON, AND THIS AGREEMENT SHALL THEN
BECOME NULL AND VOID AND OF NO EFFECT AND THE PARTIES SHALL HAVE NO FURTHER
LIABILITY TO EACH OTHER AT LAW OR IN EQUITY, EXCEPT FOR PURCHASER'S
OBLIGATIONS TO INDEMNIFY SELLER AND RESTORE THE PROPERTY AS SET FORTH MORE FULLY
IN PARAGRAPH 7 AND PURCHASER'S RIGHT TO RECEIVE FROM SELLER ITS ACTUAL,
DOCUMENTED THIRD PARTY EXPENSES INCURRED IN THE PERFORMANCE OF ITS DUE DILIGENCE
HEREUNDER AND THE PREPARATION OF THIS AGREEMENT, NOT TO EXCEED $25,000.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF SELLER'S DEFAULT
IS (I) ITS (AND NOT AN UNRELATED THIRD PARTY'S) AFFIRMATIVE, WILLFUL ACTION
WHICH RESULTS IN THE RECORDING OF AN ENCUMBRANCE AGAINST THE PROPERTY WITH THE
INTENTION TO PREVENT THE SALE OF THE PROPERTY IN ACCORDANCE WITH THE TERMS
HEREOF AND WHICH GIVES RISE TO PURCHASER'S RIGHT TO TERMINATE THIS AGREEMENT
PURSUANT TO PARAGRAPH 5 HEREOF; (II) ITS FAILURE TO EXPEND
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UP TO $100,000 IF (A) SELLER IS ABLE TO BOND OVER, CURE OR REMOVE A MINOR
UNPERMITTED EXCEPTION FOR A COST NOT TO EXCEED $100,000 OR (B) THE TITLE INSURER
IS WILLING TO INSURE OVER A MINOR UNPERMITTED EXCEPTION FOR A COST NOT TO EXCEED
$100,000 IN ACCORDANCE WITH THE TERMS HEREOF OR (III) ITS WILLFUL REFUSAL
TO DELIVER THE DEED, THEN PURCHASER WILL BE ENTITLED TO XXX FOR
SPECIFIC PERFORMANCE.
PURCHASER AND SELLER AGREE THAT A DEFAULT BY NORTHGATE DRIVE LIMITED
PARTNERSHIP, AN ILLINOIS LIMITED PARTNERSHIP, UNDER ANY OF THE TERMS OR
CONDITIONS OF THE COMPANION CONTRACT SHALL BE DEEMED A DEFAULT OF SELLER UNDER
THIS AGREEMENT. IN ADDITION, SELLER AND PURCHASER AGREE THAT A DEFAULT BY SELLER
UNDER THIS AGREEMENT SHALL BE DEEMED A DEFAULT OF IRVING ASSOCIATES UNDER THE
COMPANION CONTRACT.
Purchaser's Initials ILLEGIBLE Seller's Initials ILLEGIBLE.
_________ _________
12. PRORATIONS.
12.1. Rents (exclusive of delinquent rents, but including prepaid
rents); refundable security deposits (which will be assigned to and assumed by
Purchaser and credited to Purchaser at Closing); water and other utility
charges; fuels; prepaid operating expenses; incentive fees paid pursuant
to any laundry contract; provided, however, such fee shall only be
prorated if actually received by Seller and only to the extent any fee was
not used to improve the laundry facilities at the Property; real and personal
property taxes and other similar items shall be adjusted ratably as of 11:59
p.m. on the Closing Date, and credited to the balance of the cash due at
Closing. Assessments payable in installments which are due subsequent to
the Closing Date shall be paid by Purchaser. If the amount of any of the
items to be prorated is not then ascertainable, the adjustments thereof
shall be on the basis of the most recent ascertainable data. All prorations
will be final except as to delinquent rent referred to in Paragraph 12.2 below.
12.2. All basic rent paid following the Closing Date by any
tenant of the Property who is indebted under a lease for basic rent for any
period prior to and including the Closing Date shall be deemed a "Post-Closing
Receipt" until such time as all such indebtedness is paid in full. Within
ten (10) days following each receipt by Purchaser of a Post-Closing Receipt,
Purchaser shall pay such Post-Closing Receipt to Seller. Purchaser shall use its
best efforts to collect all amounts which, upon collection, would
constitute Post-Closing Receipts hereunder. Within 120 days after the Closing
Date, Purchaser shall deliver to Seller a reconciliation statement of
Post-Closing Receipts through the first 90 days after the Closing Date. Upon
the delivery of the Post-Closing Receipts reconciliation, Purchaser shall
deliver to Seller any Post-Closing Receipts owing to Seller and not previously
delivered to Seller in accordance with the terms hereof. Seller retains the
right to conduct an audit, at reasonable times and upon reasonable notice,
of Purchaser's books and records to verify the accuracy of the Post-Closing
Receipts reconciliation statement and upon the verification of additional
funds owing to Seller,
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Purchaser shall pay to Seller said additional Post-Closing Receipts and the cost
of performing Seller's audit. Paragraph 12.2 of this Agreement shall survive the
Closing and the delivery and recording of the deed.
13. RECORDING. Neither this Agreement nor a memorandum thereof shall be
recorded and the act of recording by Purchaser shall be an act of default
hereunder by Purchaser and subject to the provisions of Paragraph 10 hereof.
14. ASSIGNMENT. The Purchaser shall not have the right to assign its
interest in this Agreement without the prior written consent of the Seller. Any
assignment or transfer of, or attempt to assign or transfer, Purchaser's
interest in this Agreement shall be an act of default hereunder by Purchaser
and subject to the provisions of Paragraph 10 hereof. Notwithstanding the
foregoing, Purchaser may assign its interest in this Agreement without the
consent of Seller to Apple Residential Trust Inc. provided that Purchaser
remains liable for and the assignee assumes the obligations of Purchaser
hereunder.
15. BROKER. The parties hereto represent and warrant that no broker
commission or finder fee is due and payable in connection with this transaction
other than to Xxxxxxx & Xxxxxxxxx of Texas, Inc. (to be paid by Seller).
Seller's commission to Xxxxxxx & Wakefield of Texas, Inc. shall only be payable
out of the proceeds of the sale of the Property in the event the transaction
set forth herein closes. Purchaser and Seller shall indemnify, defend and
hold the other party hereto harmless from any claim whatsoever (including
without limitation, reasonable attorney's fees, court costs and costs of
appeal) from anyone claiming by or through the indemnifying party any fee,
commission or compensation on account of this Agreement, its negotiation or
the sale hereby contemplated other than to Xxxxxxx & Xxxxxxxxx of Texas, Inc.
The indemnifying party shall undertake its obligations set forth in this
Paragraph 15 using attorneys selected by the indemnifying party and
reasonably acceptable to the indemnified party. The provisions of this Paragraph
15 will survive the Closing and delivery of the Deed.
16. REPRESENTATIONS AND WARRANTIES.
16.1. Any reference herein to Seller's knowledge or notice of any
matter or thing shall only mean such knowledge or notice that has actually been
received by Xxxxxxxxx Xxxxxxxxx (the "Seller's Representative"), and any
representation or warranty of the Seller is based upon those matters of
which the Seller's Representative has actual knowledge. Any knowledge or
notice given, had or received by any of Seller's agents, servants or
employees shall not be imputed to Seller, the general partner or limited
partners of Seller, the subpartners of the general partner or limited partners
of Seller or Seller's Representative.
16.2. Subject to the limitations set forth in Paragraph 16.1, Seller
hereby makes the following representations and warranties, which
representations and warranties are made to Seller's knowledge and which
shall, subject to Paragraph 16.4, be remade at Closing: (i) Seller has no
knowledge of any pending or threatened litigation, claim, cause of action or
administrative proceeding concerning the Property; (ii) Seller has the power to
execute this
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Agreement and consummate the transactions contemplated herein; (iii) the rent
roll (which includes a list of actual security deposits) attached hereto as
Exhibit L which Seller will update as of the Closing Date is accurate as of the
date set forth thereon; (iv) Seller has not received written notice from any
governmental agency that the Property is in violation of any government statute
or regulation; (v) except as may be set forth in the Existing Report, Seller has
not received any notice from any governmental authority having jurisdiction over
the Property of any uncured violation of any Environmental Law with respect to
the Property; and (vi) except as may be set forth on the rent roll, Seller has
not delivered any coupons or similar items to any of the tenants at the Property
which would allow any such tenant to remit to the owner of the Property
following the Closing such coupon or similar item in complete or partial
satisfaction of said tenant's monthly rental obligation.
16.3. Purchaser hereby represents and warrants to Seller that Purchaser
has the full right, power and authority to execute this Agreement and
consummate the transactions contemplated herein.
16.4. If at any time after the execution of this Agreement, either
Purchaser or Seller become aware of information which makes a representation
and warranty contained in this Agreement to become untrue in any material
respect, said party shall promptly disclose said information to the other party
hereto. Provided the party making the representation or warranty did not take
any deliberate actions to cause the representation or warranty in question
to become untrue in any material respect, said party shall not be in default
under this Agreement and the sole remedy of the other party shall be to
terminate this Agreement. Notwithstanding anything contained herein to the
contrary, if the status of any of the tenancies changes from the date of the
rent roll attached hereto and the date of the rent roll delivered at Closing,
provided the change in status is not caused by a breach of Seller's covenants
contained in Article 16 herein, then Purchaser shall not have the right to
terminate this Agreement or make any claim for a breach of a representation or
warranty hereunder involving the rent roll or tenancies thereunder. Purchaser
and Seller are prohibited from making any claims against the other party
hereto after the Closing with respect to any breaches of the other party's
representations and warranties contained in this Agreement that the claiming
party has actual knowledge of prior to the Closing.
16.5. The parties agree that the representations contained herein shall
survive Closing for a period of sixty (60) days (i.e., the claiming party shall
have no right to make any claims against the other party for a breach
of a representation or warranty after the expiration of sixty (60) days
immediately following Closing).
16.6. Seller covenants to operate and manage the Property in the
same manner that it has managed, maintained and operated the Property during
the period of Seller's ownership, subject to reasonable wear and tear and
casualty.
17. LIMITATION OF LIABILITY. Neither Seller, nor any of its respective
beneficiaries, shareholders, partners, officers, agents or employees, heirs,
successors or assigns shall have any personal liability of any kind or nature
for or by reason of any matter or thing whatsoever under,
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in connection with, arising out of or in any way related to this Agreement and
the transactions contemplated herein, and Purchaser hereby waives for itself and
anyone who may claim by, through or under Purchaser any and all rights to xxx or
recover on account of any such alleged personal liability.
18. TIME OF ESSENCE. Time is of the essence of this Agreement.
19. NOTICES. Any notice or demand which either party hereto is required or
may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by overnight courier
such as Federal Express, by facsimile transmission or made by United States
registered or certified mail addressed as follows:
TO SELLER: x/x Xxx Xxxxxx Xxxxxxx
Xxxxxxxxxxx Xxxx Xxxxxx Xxxxx
0000 Xxxxxxxx Xxxx
Xxxxx X-000
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxx
with copies to: The Balcor Company
Bannockburn Lake Office Plaza
0000 Xxxxxxxx Xxxx
Xxxxx X-000
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
(000) 000-0000
(000) 000 0000 (FAX)
and to: Xxxxxx Xxxxxx & Zavis
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
(000) 000-0000
(000) 000-0000 (FAX)
TO PURCHASER: Cornerstone Realty Group Incorporated
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxx Xxxxxxxx and Xx. Xxx Xxxxxxx
(000) 000-0000
(000) 000-0000 (FAX)
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and one copy to: Xxxxxxxxxx & Taubenfeld
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxxx, Esq.
(000) 000-0000
(000) 000-0000 (FAX)
and one copy to: Xxxxx XxXxxxxxx & Oaks Xxxxxxxx
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
(000) 000-0000
(000) 000-0000 (FAX)
subject to the right of either party to designate a different address for itself
by notice similarly given. Any notice or demand so given shall be deemed to be
delivered or made on the next business day if sent by overnight courier, or the
same day as given if sent by facsimile transmission and received by 5:00 p.m.
Chicago time or on the 4th business day after the same is deposited in the
United States Mail as registered or certified matter, addressed as above
provided, with postage thereon fully prepaid. Any such notice, demand or
document not given, delivered or made by registered or certified mail, by
overnight courier or by facsimile transmission as aforesaid shall be deemed to
be given, delivered or made upon receipt of the same by the party to whom the
same is to be given, delivered or made. Copies of all notices shall be served
upon the Escrow Agent.
20. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute two
(2) copies of this Agreement and three (3) copies of the Escrow Agreement
and forward them to Seller for execution, accompanied with the Xxxxxxx
Money payable to the Escrow Agent set forth in the Escrow Agreement. Seller
will forward one (1) copy of the executed Agreement to Purchaser and will
forward the following to the Escrow Agent:
(A) Xxxxxxx Money;
(B) One (1) fully executed copy of this Agreement; and
(C) Three (3) copies of the Escrow Agreement signed by the
parties with a direction to execute two (2) copies of the Escrow Agreement and
deliver a fully executed copy to each of the Purchaser and the Seller.
21. GOVERNING LAW. The provisions of this Agreement shall be governed by the
laws of the State of Texas, except that with respect to the retainage of the
Xxxxxxx Money as liquidated damages the laws of the State of Illinois shall
govern.
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22. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all other negotiations, understandings and
representations made by and between the parties and the agents, servants and
employees.
23. COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.
24. CAPTIONS. Paragraph titles or captions contained herein are inserted as
a matter of convenience and for reference, and in no way define, limit, extend
or describe the scope of this Agreement or any provision hereof.
25. AUDIT. Seller will make available to Purchaser such books, accounts
and records necessary for Purchaser to conduct an audit of the Property's
preceding fiscal year. This audit will be conducted solely at Purchaser's
expense for the purpose of satisfying its requirements as a publicly held
entity. Seller agrees to execute and deliver a disclosure letter prepared by
the auditors of Purchaser in substantially the form attached hereto as
Exhibit M. The terms of this Paragraph 25 shall survive the Closing for a
period of one (1) year from the Closing Date.
26. LITIGATION COSTS. In the event of any action or proceeding at law or
in equity between Seller and Purchaser to enforce any provision of this
Agreement or to protect or establish any right or remedy of either party
hereunder, the unsuccessful party to such litigation shall pay the
prevailing party all litigation costs and expenses, including reasonable
attorneys' fees incurred therein by such prevailing party, and if such
prevailing party shall recover judgment in any such action or proceeding, such
costs and expenses (including such attorneys' fees) shall be included in and as
a part of such judgment.
27. CONSIDERATION. On or before the execution of this Agreement, Purchaser
shall deliver to Seller One Hundred And No/100 Dollars ($100.00) cash
(the "Independent Contract Consideration"), which amount has been bargained
for and agreed to as consideration for Purchaser's right to purchase the
Property pursuant to this Agreement and for Seller's execution and delivery
of this Agreement. The Independent Contract Consideration is in addition
to and independent of all other consideration provided in this Agreement,
and is nonrefundable in all events.
28. WAIVER OF DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT.
Purchaser waives its rights under the Deceptive Trade Practices-Consumer
Protection Act, Section 17.41 et seq., Business & Commerce Code, a law that
gives consumers special rights and protections. After consultation with
an attorney/legal counsel of Purchaser's own selection, Purchaser voluntarily
consents to this waiver. Purchaser covenants, represents and warrants that
such attorney/legal counsel was not directly or indirectly identified,
suggested, or selected by Seller or an agent of Seller.
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29. COMPANION PROPERTY. Notwithstanding anything contained in this
Agreement to the contrary, it is a condition precedent to Seller's and
Purchaser's obligations to perform under this Agreement that Purchaser acquire
that certain property commonly known as the Eagle Crest I Apartments (the
"Other Property") in accordance with the terms of that certain Agreement of
Sale (the "Companion Contract") by and between Northgate Drive Limited
Partnership, an Illinois limited partnership, an affiliate of Seller, and
Purchaser of even date herewith for the sale of the Other Property to Purchaser.
If this Agreement is terminated pursuant to Paragraph 7 hereof or pursuant
to any other section of this Agreement, then the Companion Contract shall
also be deemed terminated. Similarly, if the Companion Contract is
terminated pursuant to Paragraph 7 thereof or pursuant to any other paragraph
of the Companion Contract, then this Agreement shall also be deemed terminated.
Nothing contained in this Paragraph 29 shall be deemed to circumvent the terms
of Paragraph 10 if this Agreement is terminated as a result of a default of
Purchaser and nothing in this Paragraph 29 shall be deemed to circumvent the
terms of Paragraph 11 if this Agreement is terminated as a result of a default
of Seller.
[EXECUTION PAGE TO FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of the
date first set forth above.
PURCHASER:
CORNERSTONE REALTY GROUP
INCORPORATED, a Virginia corporation
By: /s/ X. X. Xxxxxxx
---------------------------------
Name: X. X. Xxxxxxx
--------------------------------
Its: Senior Vice President
---------------------------------
SELLER:
IRVING ASSOCIATES, an Illinois limited
partnership
By: Eagle Crest Associates, an Illinois limited
partnership, its general partner
By: Balcor Realty Partners-IV, Inc., a
Delaware corporation, its general
partner
By: /s/ XXXXX X. XXXXXXXXX
------------------------
Name: XXXXX X. XXXXXXXXX
-------------------------
Its: AUTHORIZED REPRESENTATIVE
-------------------------
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