Exhibit 10.1
PURCHASE CONTRACT
THIS AGREEMENT made and entered into this 21 day of February 1997
(the "Effective Date"), between CORNERSTONE REALTY GROUP, INC. or its
nominee, (hereinafter called "Purchaser") and INTERCAPITAL PORTFOLIO 944
I LIMITED PARTNERSHIP, an Illinois Limited Partnership, (hereinafter called
"Seller").
ARTICLE I
THE PROPERTY
1.1 Sale of Property. Seller agrees to sell and convey, and Purchaser
agrees to purchase, Seller's real property known as PACES COVE APARTMENTS
located in DALLAS, TX, with all buildings and improvements located thereon,
as more particularly described in the attached legal description in EXHIBIT A
including, but not limited to 328 individually heated and air conditioned
apartment units, with all appurtenances, together with all appliances, drapes,
carpeting, shrubbery and all other personal property used in connection with
the premises, including, the inventory of personal property to be supplied
by Seller and attached hereto as EXHIBIT B (all such real and personal
property hereinafter collectively referred to as the "Property" unless the
context clearly indicates otherwise).
1.2 "As Is". The Property is being sold "as is", except for the
warranties set forth otherwise herein.
ARTICLE II
PAYMENT OF PURCHASE PRICE
2.1 Purchase Price. The total purchase price shall be NINE MILLION TWO
HUNDRED THOUSAND ($9,200,000) DOLLARS as evidenced by cash or cash equivalent
at closing.
2.2 Deposit. ONE HUNDRED THOUSAND ($100,000) DOLLARS to be placed in
escrow at the end of the "Inspection Period" described in Article VI below.
Said deposit shall be placed in escrow with Texas State Title Insurance
Corporation or its authorized agent (the "Title Company") as an xxxxxxx money
deposit which may be credited against the purchase price or applied as per
Article XI below.
2.3 Independent Contract Consideration. Purchaser shall, concurrently
with its execution hereof, deliver to Seller a check in the amount of FIFTY
($50) DOLLARS (the "Independent Contract Consideration"), which amount Seller
and Purchaser agree has been bargained for as consideration for Seller's
execution and delivery of this Contract and Purchaser's right to inspect the
Property. The Independent Contract Consideration is in addition to and
independent of any other consideration or payment provided for in this
Contract and is non-refundable in all events.
ARTICLE III
TITLE MATTERS
3.1 Title. Seller, shall convey good and indefeasible title by Special
Warranty Deed, subject only to general taxes for the current year not yet due
and payable and utility easements which do not interfere with the present use
of the Property, and the "Permitted Exceptions". "Permitted Exceptions" are
those title exceptions listed in the title commitment, which are not objected
to pursuant to section 3.2, or as provided in sections 3.3 and 3.5 below and
acts of Purchaser.
(A) Title shall be free from any and all liens on mortgages
and Seller shall be responsible for any prepayment penalties necessary to
deliver such free title.
3.2 Title Defects; Election to Cure. Seller shall furnish to Purchaser
at Seller's expense a commitment for Title Insurance from the Title Company,
(the "Commitment" or the "Title Report") within fifteen (15) days after the
Effective Date, covering the Property binding the Title Company to issue a
Texas Owner Policy of Title Insurance (the "Title Policy") on the standard
form prescribed by the Texas State Board of Insurance at the Closing, in the
full amount of the Purchase Price, insuring Purchaser's fee simple title to
the Property to be good and indefeasible, together with true and correct
copies of all instruments listed on Schedule B to the Commitment (as well
as any other documents or instruments listed therein which will not be
released at closing). Seller will not pay for any endorsements deleting or
amending the Survey exceptions. If the title commitment shows any exceptions,
which are not acceptable to Purchaser in Purchaser's sole discretion,
Purchaser shall give written notice of such defects in title to Seller's
counsel during the Inspection Period. Seller may, at its option, elect whether
to cure said defects or by written notice to Purchaser indicate its intention
not to cure.
3.3 Election Not to Cure Defects. Should Seller elect not to cure title
defects, this Agreement, at Purchaser's option (exercised by Purchaser
notifying Seller within five (5) days of the notice by Seller that it will
not cure the objections), shall be void; each party shall thereupon be
released from all obligations hereunder; and all deposits shall be
immediately returned to Purchaser. The intent being that if Purchaser does not
waive title defects within five (5) days, this Agreement shall automatically
be null and void.
3.4 Survey. Upon the Effective Date, the Seller shall
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deliver to the Purchaser an existing Survey and as soon as reasonably possible,
and in any event within three (3) days after the expiration of the Inspection
Period, Seller shall, at Seller's expense, deliver or cause to be delivered
to the Seller, the Title Company, and to Purchaser a current or updated
on-the-ground perimeter survey (the "Updated Survey") of the Property prepared
by a Registered Professional Land Surveyor reasonably acceptable to the
Purchaser. The Survey shall show the location and size of all of the
following on or adjacent to the Property, if any:
buildings, buildings lines, improvements, streets,
pavements, easements, rights-of-way, protrusions,
encroachments, fences, 100-year flood plain, apparent
public utilities, and recording information of
easements.
The Updated Survey sometimes hereinafter referred to as the "Survey" shall
show the gross land area. The Updated Survey shall be in a form and of a date
acceptable to Purchaser and to the Title Company, and in acceptable form in
order to allow the Title Company to delete the survey exception from the
Title Policy. The area within the 100-year flood plain shall be as defined
by the Federal Emergency Management Agency or other applicable governmental
authority.
3.5 Subject to the following sentences, the Survey shall show no
encroachments onto the Land from any adjacent property, no encroachments
by or from the Land onto adjacent property and no violation of or encroachments
upon any recorded building lines, restrictions or easements affecting the
Property. If the Survey discloses any such encroachment or violation, Seller
shall have ten (10) days from the date of delivery of the Updated Survey and
receipt of Purchaser's notice (with a commensurate extension of the closing
date) to have the Title Insurer issue its endorsement insuring against damage
caused by such encroachment or violation and to provide evidence thereof to
Purchaser, and if Seller fails to or is unable to have the same insured
against within such ten (10) day period, Purchaser may elect, on or before
the expiration of the Inspection Period, to (i) terminate this Agreement
(in which case the Xxxxxxx Money shall be returned to Purchaser) and neither
party shall have any further liability or obligation to the other hereunder,
or (ii) accept the property subject to any such encroachment or violation, as
"Permitted Exceptions".
3.6 Purchaser agrees to deliver to Seller, within the Inspection
Period, notice as to which items on the title report or the Survey are
objectionable.
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3.7 The Inspection Period shall be extended for a period of ten (10)
days for a review of the Updated Survey delivered pursuant to Paragraph 3.4.
However, in the event that the Updated Survey is delivered after the end of the
original unextended Inspection Period, the Purchaser may only raise such
objections as are brought about as a result of said Survey. Seller shall have
five (5) days from receipt of Purchaser's notice to have the title company issue
its endorsement insuring over the encroachments.
ARTICLE IV
PRORATIONS
4.1 Income and Expense Allocations. The following shall be prorated, on
a calendar-month basis, to the date of delivery of the deed: rents and other
income from the Property; operating expenses (on such service contracts and
other obligations as Purchaser takes subject to); and general and real property
taxes and personal and business property taxes for the year of closing (based on
the most recent assessment and the most recent levy). Purchaser shall get the
benefit of the prorations on the date of closing if the Purchase Price is wired
to the title company and closing occurs by 2:00 CST. If the money is sent later
than 2:00, Seller shall get the prorations on the date of closing.
4.2 Closing Costs. Purchaser and Seller shall pay their customary share
of all taxes, recording fees, if any, imposed on the Deed, or any other
documents executed in connection with the transfer of the Property. Seller
shall pay any prepayment penalty charged by the holders of any existing notes.
4.3 Allocation of Rents. Rents collected by Seller prior to Closing and
rents received by Purchaser for the month of closing shall be prorated as agreed
in 4.1 above. Purchaser shall apply rents received after the month of Closing
first to payment of the current rent due to Purchaser, then to delinquent rents
due to Purchaser, and last to rents due to Seller as of the Closing but
uncollected prior to settlement. Purchaser agrees to use its best efforts in
good faith to collect the amount of any rental arrears from tenants and
Purchaser agrees to remit promptly to Seller any such arrears actually paid by
such tenants to Purchaser. Seller shall retain the right to commence legal
action against a tenant for any delinquent rent apportioned to the Seller.
4.4 Prior Lease Concessions. Seller shall pay to Purchaser, in a lump
sum at closing, all future monetary concessions which Seller has given to
tenants under leases existing at the time of closing.
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ARTICLE V
POSSESSION OF THE PROPERTY
5.1 Possession. Possession of the Property shall be delivered to
Purchaser at closing, subject to the rights of the tenants under existing leases
and rental agreements and any service agreements assumed by Purchaser.
ARTICLE VI
CONDITIONS PRECEDENT TO CLOSING
6.1 Conditions Precedent. Purchaser's obligation to purchase shall be
subject to and contingent upon the satisfaction of the following conditions
precedent:
(A) Receipt by Purchaser at Purchaser's expense of an engineering report
of building and site conditions, satisfactory to Purchaser in its sole
discretion, said report to include in part, a description of any hazardous waste
sites, hazardous wastes and/or hazardous materials affecting the property.
Purchaser shall have fifteen (15) days in which to review the reports set forth
herein and exercise its right to reject the Property based thereon or the
right hereunder shall be deemed waived.
(B) The receipt by Purchaser of Seller documents described in 7.2 below.
(C) On the condition that Sellers representations and warranties
described in Article VIII below remain true and correct.
(D) On the condition that there have been no material or adverse changes
to the property subject to Par. 9 or leases. All leasing shall be pursuant to
past good business practices.
(E) Seller acknowledges that Purchaser is a public entity and that it is
required to furnish financial statements to the Securities and Exchange
Commission in connection with this acquisition. Seller agrees to make the
information available for Purchaser during business hours, upon at least two (2)
business days notice to audit the last 12 months of operation of the Property so
that a report can be generated that is in compliance with accounting Regulation
S-X of the Securities and Exchange Commission. Purchaser acknowledges that the
books and records are kept in the Houston office of the Seller.
(F) Purchaser determining during the Inspection Period that all water,
sewer, gas, electric, telephone, and drainage facilities and all other utilities
required by law or by the normal use and operation of the Property are and at
the time of closing will be installed to the property line, are and at the time
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of closing will be connected pursuant to valid permits, and are and at the time
of closing will be adequate to service the Property and to permit full
compliance with all requirements of law and normal usage of the Property by the
tenants thereof and their licensees and invitees.
(G) All of the conditions precedent under 6.1(A), (B) and (F) shall be
deemed satisfied if Purchaser does not terminate this Agreement prior to the
expiration of the Inspection Period.
6.2 Inspection. This Agreement shall be further subject to and
contingent upon Purchaser's satisfactory inspection as follows herein below.
6.2.1 Preparation for Inspection. At the execution of this Agreement,
Seller shall deliver to Purchaser copies of the following: The current rent
roll for the Property; detailed statements of income and expenses with respect
to the Property for the past two years; the most recent tax bills for the
Property; utility bills for the Property for the twelve (12) months previous to
the date hereof; all contract, and other documents creating liens of security
interest on the Property (if not to be released at closing), or any part thereof
and all promissory notes secured thereby; synopsis of all insurance policies
applicable to the Property to include loss runs for the last two (2) years;
Plans and Specifications for the Property if in Seller's possession, service
contracts, Certificates of Occupancy if in Seller's possession, to the extent
reasonably available, if any; a copy of title policy (together with true and
correct copies of the instruments listed thereon which evidence exceptions to
title, except those which will be released at and as a condition of closing) and
most recent survey for the Property. A copy of any environmental or engineering
reports on the property. All these items shall be certified by Seller to be
accurate and complete to the best of its knowledge and belief. Seller does not
warrant the truth or accuracy to the information on the environmental or
engineering reports, or the Plans and Specifications other than to state that
they were received in the ordinary course of business.
6.2.2 Inspection of Books and Records; Access. Upon the signing of this
Agreement by both parties, Purchaser, its employees, agents and contractors
shall have twenty-one (21) days after the Effective Date of this Contract (the
"Inspection Period", as the same may be extended) to enter upon the Property
(subject to the rights of the tenants) during normal business hours for the
purpose of making physical inspections thereof, including but not limited to
roofs, heating, cooling, electrical and plumbing systems, swimming pool,
appliances, and structural elements of the buildings. Upon the conclusion of
the Inspection Period this contract shall be deemed to be a firm agreement of
purchase and sale binding the parties hereto, except as it may be terminated
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prior to the end of the Inspection Period and subject to the other provisions
and conditions contained herein, including but not limited to the condition
imposed by Paragraph 6.1(A) above. There shall be no intrusive testing without
Seller's consent.
6.2.3 Indemnification. Purchaser agrees to indemnify and hold Seller
harmless from any damages, liability, loss, cost, expense, causes of action and
liens arising from Purchaser's inspection of the Property. Purchaser shall
restore any damages caused by any tests, studies or inspections performed by or
on behalf of Purchaser. This indemnification and agreement shall survive
termination of this Agreement and closing for one (1) year (unless an action is
brought within said one (1) year in which event it will survive until final
adjudication) and shall not be subject to any liquidated damages provision.
6.2.4 Right of Termination During Inspection Period. Purchaser shall
also be permitted to review all original leases, expense records, tenant cards
and occupancy data available. If Purchaser is not satisfied, in its sole and
exclusive discretion, with the state of maintenance and repair of the Property
or the rents, occupancy or expenses of the Property, then notwithstanding
anything contained herein to the contrary, Purchaser shall have the right to
terminate this Agreement by giving written notice to Seller before the end of
the Inspection Period, and no party hereto shall have any further liability to
any other party hereto, and all deposits shall be returned to Purchaser. If
Purchaser does not terminate, the condition under Par. 6.2 shall be deemed
satisfied.
6.2.5 "Rent Ready". During the Inspection Period, both Seller and
Purchaser will inspect an apartment unit at the Property and mutually agree that
said apartment shall be representative of a "rent ready" unit by which all other
units shall be judged for "rent ready" condition at closing. All vacant
apartment units, are to be in a "rent ready" condition (as defined above), at
the time of closing, containing, but not limited to the following amenities,
i.e., carpet, refrigerator, range, garbage disposal, if any, heating, plumbing
and electrical systems. Upon failure to agree, then it shall be understood that
"rent ready" shall be deemed clean and painted (if necessary) in accordance with
Seller's normal practice to rent to new occupants and all amenities included
above shall be in good working order, normal wear and tear expected.
6.2.6 Condition of Personal Property at Closing. All personal property
included in the sale and all mechanical, electrical, heating, air conditioning,
sewer, water and plumbing systems will be in the same working order at the time
of closing and in the same condition as at the time of the initial inspection by
Purchaser, except for normal wear and tear. If Seller fails to make reasonable
efforts to conserve the property, Purchaser shall have the option of waiving
such requirement, in writing, and
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proceeding to closing, or Purchaser may void this Agreement and obtain a prompt
return of its deposit, pursuant to Article XI.
ARTICLE VII
CLOSING
7.1 Closing. Closing will be held on March 24, 1997, at such place and
at such time as the parties may agree. However, either party shall be entitled
to one (1) extension of seven (7) days upon request.
7.2 Seller's Deliveries. At closing, Seller shall execute and deliver
to Purchaser the Special Warranty Deed referred to in Paragraph 3 hereof and
shall also execute, where necessary, and deliver to Purchaser, the following in
a form reasonably acceptable to Purchaser:
(A) A Xxxx of Sale, with special warranty of title transferring the
personal property (as shown in Schedule B) to Purchaser free of all liens,
charges and encumbrances.
(B) The Title Policy issued by the underwriter for the Title Company
pursuant to the Title Commitment, subject only to the Permitted Exceptions, in
the full amount of the Purchase Price, dated as of the date of Closing.
(C) Originals or copies of all signed leases and rental agreements
in effect with tenants of the Property (with respect to residential leases) not
for more than one (1) year.
(D) All security and cleaning deposits made by such tenants. Seller
will give the tenants the required notice of such transfer in compliance with
the laws of TEXAS.
(E) 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.
(F) A rent roll certified by Seller to be true and correct as of the
date of closing showing the name of, and the amount of monthly rental payable,
by each tenant of the Property, the apartment occupied by the tenant, the date
to which rent has been paid, any advance payment of rent, and the amount of any
escrow, or security deposit of tenant.
(G) An affidavit of Seller sufficient to satisfy the title company
that to the best of its information and belief there are, on the date of
closing, no unsatisfied judgments, creditor's claims other than in the course of
business, tax liens, or pending bankruptcies involving Seller.
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(H) Assignments of all Seller's interest in the following: (1) all
assignable licenses, and permits relating to the operation of the Property, (2)
the leases and rental agreements with tenants of the Property, (3) the existing
Property telephone number and (4) the business and trade name as set forth in
Par. 1.1.
(I) Assignments without recourse of all warranties and guarantees,
if any, to the extent such are still in effect and provide Purchaser with copies
of all such warranties and guarantees without limitation for all appliances,
dishwashers, disposals, refrigerators, heating and air conditioning units,
washers and dryers.
(J) Consent of the Seller's authorized officer to the sale of the
Property and any other approvals required under Seller's articles, by-laws or
other organizational documents, which may affect Seller's ability to convey
marketable title.
(K) Provide documents for the transfer of the telephone, electric,
water and sewer, and gas utilities, as may be required by the utility, for
execution at closing, provided Purchaser will post new bonds or security
deposits if required by the utility company.
(L) Satisfactory evidence of the power and authority of Seller to
enter into and consummate this agreement.
(M) Affidavit that Seller has received no actual notice of the
presence of asbestos and/or any other hazardous material at the Property (except
as may be disclosed in the environmental report delivered to Purchaser).
(N) Seller shall provide a satisfactory and valid written
termination of the management agreement executed by the existing management and
rental agent for the Property, without cost to the Purchaser.
(O) A notice letter to all the residents of the apartment complex as
to change of ownership in the form prepared by the Purchaser, a copy of which is
annexed hereto as EXHIBIT C.
(P) All such other documents as are normally transferred at
settlement in the jurisdiction in which the property is located or are
reasonably requested by Purchaser or its counsel.
(Q) A representation letter as normally required by auditors for a
public company in the form attached hereto as EXHIBIT D. This clause shall
survive closing for one year.
(R) Closing Memorandum and Indemnification Agreement in the form
attached hereto as EXHIBIT E.
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7.3 Purchaser's Deliveries. At closing and contemporaneously with the
Seller's compliance with the provisions of Section 7.2, Purchaser shall:
(A) Pay to Seller the cash portion of the purchase price, adjusted
for the prorations herein provided for in Article IV.
(B) Execute and deliver an assumption of obligations under leases,
securities, any contracts which Purchaser shall take subject to and any other
obligations specifically set forth herein, a copy of which is annexed hereto as
EXHIBIT F.
(C) Deliver to the Seller a resolution of the Purchaser that:
(i) This Agreement has been duly authorized, executed and
delivered by the Purchaser and is a valid and binding agreement of Purchaser,
and
(ii) Purchaser has complete unrestricted power to buy
the Property from the Seller and to execute any documents required to
effectuate the transfer.
(D) Execute all such other documents as are normally
transferred at settlement in the jurisdiction in which the property is
located or are reasonably requested by Seller or its counsel.
ARTICLE VIII
SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
8.1 Representations of the Parties. Seller warrants (which
warranties shall not survive settlement unless designated to the
contrary) that as of the date hereof and as of closing hereof:
(A) That Seller, is the owner in fee simple of the Property
and has the power to convey same.
(B) That Seller is not subject to any other agreements or
arrangements, with the exception of those contained in any existing
mortgage documents which would prevent Seller from selling the Property
to Purchaser. This warranty shall survive for one year following
closing.
(C) All necessary action has been taken by Seller to
authorize the execution of this Agreement and the performance of the
obligations contemplated hereunder, which are not excluded elsewhere in
existing mortgage documents. This warranty shall survive for one year
following closing.
(D) Seller has no actual knowledge and has not been advised
in writing that it is in default under any lease,
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rental agreement service or equipment contract, or mortgage or other
encumbrances relating to the Property. This warranty shall survive for one year
the following closing.
(E) Seller has no actual knowledge of any existing or threatened
litigation which relates to or which would affect the Property. This warranty
shall survive for one year following closing.
(F) Seller has not received any notice, written or oral, nor has
actual knowledge of any code violation without duty to investigate. Seller has
not received any notice of condemnation proceedings with respect to the
Property. This warranty shall survive for one year following closing. Knowledge
shall be referred to as knowledge of the Property manager of Xxxx Xxxxxx, Vice
President of Seller.
(G) That Seller is not a "foreign person" within the meaning of the
Internal Revenue Code of 1954, as amended (the "Code"), and that Seller will
furnish to Purchaser prior to closing an affidavit in form satisfactory to
Purchaser confirming the same.
(H) Seller covenants and agrees that, between this date and the date
of closing, Seller shall continue to maintain, operate and manage the Property
in a manner consistent with its prior practices, making every reasonable effort
to do nothing which might damage the reputation of the Property or the
relationships with the tenants. Seller shall not modify, extend or cancel any
tenant lease (except in accordance with the terms of such lease or in accordance
with good business practice) or any dealing with any tenant other than in the
ordinary course of managing the Property, without the prior written consent of
Purchaser. If the leases of any tenants expire before thirty (30) days after
the date of closing, Seller shall, up to the date before closing and without
cost to the Purchaser, continue its normal course of operation with respect to
causing tenants to be obtained for apartments which are unrented.
8.2 Continuation of Representations, Warranties and Covenants to the
Date of Closing. If upon ten (10) days' notice to Seller calling for the curing
of a breach of warranties prior to closing (during which period Seller may cure
the breach of warranties), each of the warranties set forth in this section does
not remain true up to and including the time of closing as to any material
matters, this Agreement, at Purchaser's election, shall be terminated, Seller
shall return all payments made by Purchaser, or Purchaser may elect to close the
sale and waive failure of the warranties.
8.3 Willful Breach of Representations, Warranties and Covenants.
Notwithstanding the provisions of 8.2 above, Seller shall indemnify Purchaser
for all reasonable costs incurred as a
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result of the willful failure of any of Seller's representations, warranties or
covenants contained in this Par. 8 to remain true as of the date of closing,
however, Seller's liability shall not exceed $50,000.
ARTICLE IX
CONDEMNATION; RISK OF LOSS
9.1 Property Damage. If, prior to closing, any part of the Property is
damaged by fire or other casualty in an amount of more than One Hundred Thousand
($100,000) Dollars, Seller shall advise Purchaser if Seller will repair such
damage before the date provided herein for closing. If such damage cannot be
repaired by such time, this Agreement may be canceled at the option of the
Purchaser delivered to Seller within ten (10) days of Seller's notice. In the
event of cancellation as aforesaid, this Agreement shall become null and void
and the parties shall be released and all payments made shall be returned.
Should Purchaser not elect to cancel this Agreement despite such damage or if
the loss shall be less than One Hundred Thousand ($100,000) Dollars, the parties
shall close without a reduction of Purchase Price and Seller shall assign to
Purchaser all insurance proceeds and any deductible arising from such damage and
will compensate Purchaser for lost rent collections to the extent of insurance
proceeds received by Seller. Seller shall promptly notify Purchaser in writing
upon the occurrence of any such damage.
9.2 Condemnation. In the event of any actual or threatened taking,
pursuant to the power of eminent domain, all or any part thereof, or any actual
or proposed sale in lieu thereof, the Seller shall give written notice thereof
to the Purchaser promptly after Seller learns or receives notice thereof. Upon
a taking of a material part of the Property (any part of the building or more
than 5% of the parking area), Purchaser may elect within ten (10) days of
receipt of notice to either (a) terminate this Agreement, in which event the
Deposit shall be immediately returned to Purchaser and all other rights and
obligations of the parties hereunder shall terminate immediately, or (b) to
waive its right to terminate this Agreement and proceed to closing, in which
event all proceeds, awards and other payments arising out of such condemnation
or sale (actual or threatened) shall be paid to the Purchaser at closing, if
such payment has been received or Seller shall assign to Purchaser the rights to
such payments without a diminution of the Purchase Price.
9.3 Risk of Loss. Prior to closing, all risks of loss or damage by
every casualty shall be borne by the Seller.
ARTICLE X
BROKER'S COMMISSION
10.1 Commission. Seller agrees to pay a brokerage fee to KET INC. and
Purchaser agrees to pay a brokerage fee to XXXXX, XXXXXX & COMPANY, pursuant to
separate agreements. Said
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brokerage fees shall be deemed earned if, and only if, settlement occurs
hereunder, and shall not be deemed earned even if Purchaser and/or Seller
wrongfully fail(s) to consummate the purchase and sale herein contemplated.
Seller and Purchaser represent and warrant to each other that no other brokerage
fees are or shall be owing in connection with this transaction or in any way
with the Apartments and Seller and Purchaser hereby indemnify and hold the other
harmless from any and all claims of any other person so claiming.
ARTICLE XI
DEFAULT
11.1 Default Defined. Default for the purpose of this Agreement shall
mean any failure by Seller or Purchaser to fulfill all the terms, conditions and
covenants contained herein, however, it shall not be an event of default for
either party to exercise its rights to terminate this contract as contained in
other provisions herein.
11.2 Seller's Default. Upon Seller's default, the Purchaser, at
it's election, may either as its sole and exclusive remedies (1) require
specific performance of Seller, (2) cancel this Agreement and obtain a
prompt return of the deposit, in which case this Agreement shall be
terminated and the parties released from all obligations hereunder, or
(3) the Purchaser may waive such defaults and proceed to settlement.
Seller shall indemnify Purchaser for any reasonable costs incurred by
Purchaser if Purchaser elects to pursue its option (1) noted above, to
include reasonable attorney fees. In the event that the Purchaser shall
commence an action for specific performance and the Court shall hold
against it, then Seller shall be entitled to reimbursement of reasonable
costs to include reasonable attorney fees.
11.3 Purchaser's Default. Upon Purchaser's default, this
Agreement shall be terminated and both parties released from all
obligations hereunder, and the deposit shall be retained by the Seller
as liquidated damages. This section does not apply to Purchaser's
obligation under Par. 6.2.3. Seller shall have no other remedy against
Purchaser in the event of Purchaser's default.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Entire Agreement. This Agreement sets forth the entire
understanding between the parties; it supersedes all previous agreements
and representations which are deemed merged herein and may not be
modified except in writing.
12.2 Assignment. Purchaser may assign this Agreement without the
consent of Seller to APPLE RESIDENTIAL INCOME TRUST, INC.
12.3 Severability. If any provision, sentence, phrase or word of this
Agreement or the application thereof to any person or circumstance shall be held
invalid, the remainder of this Agreement or the application of such provision,
sentence, phrase, or word to persons or circumstances, other than those as to
which it is held invalid, shall remain in full force and effect.
12.4 Binding Effect. The parties to the Agreement mutually agree that it
shall be binding upon and inure to the benefit of their respective heirs,
representatives, successors in interest and assigns.
12.5 Controlling Law. It is the intent of the parties hereto that all
questions with respect to the construction of this Agreement and the rights and
liabilities of the parties shall be determined in accordance with the provisions
of the laws of the State of Texas.
12.6 Counterparts. To facilitate execution, this Agreement may be
executed in as many counterparts as may be required. It shall not be necessary
that the signature on behalf of both parties hereto appear in each counterpart
hereof, and it shall be sufficient that the signature on behalf of both parties
hereto appear on one or more such counterparts. All counterparts shall
collectively constitute a single contract.
12.7 Incorporation by Reference. All of the Exhibits referred to herein
and/or attached hereto shall be deemed to constitute a part of the Agreement.
12.8 Headings. The headings of the Articles and sections hereof are
inserted for convenience only and shall not be deemed to constitute a part of
the Agreement.
12.9 Construction of Contract. Each party hereto have reviewed and
revised (or requested revisions of) this Agreement, and therefore the normal
rule of construction that any ambiguities are to be resolved against a
particular party shall not be applicable in the construction and interpretation
of this Contract or any amendments or exhibits hereto.
12.10 Confidentiality. All information acquired by or supplied to
Purchaser in connection with the Property of any other operations of Seller
shall be confidential and shall be disseminated only upon Seller's written
approval.
12.11 Holidays. If any of the deadlines in this Contract ends on, or if
any event is to occur on, a Saturday, Sunday, or legal holiday, the deadline or
the date for performance shall automatically be extended to the next day which
is not a Saturday, Sunday, or legal holiday.
12.12 Lead Warning Statement. Every purchaser of any interest in
residential real property on which a residential dwelling was built prior to
1978 is notified that such property may present exposure to lead from lead-based
paint that may place young children at risk of developing lead poisoning. Lead
poisoning in young children may produce permanent neurological damage, including
learning disabilities, reduced intelligence quotient, behavioral problems, and
impaired memory. Lead poisoning also poses a particular risk to pregnant women.
The seller of any interest in residential real property is required to provide
the buyer with any information on lead-based paint hazards from risk assessments
or inspections in the seller's possession and notify the buyer of any known
lead-based paint hazards. A risk assessment or inspection for possible
lead-based paint hazards is recommended prior to purchase.
12.12.1 Seller has no actual knowledge of lead-based paint and/or
lead-based paint hazard in the housing.
12.12.2. Seller has no written reports or records pertaining to
lead-based paint and/or lead-based paint hazards in the housing, except, if any,
in the environmental report delivered to Purchaser.
12.12.3. Purchaser is hereby granted a 10-day opportunity (or the length
of the Inspection Period, whichever is longer) to conduct a risk assessment or
inspection for the presence of lead-based paint and/or lead-based paint hazards.
ARTICLE XIII
NOTICE
13.1 Notice. All notices required or permitted to be given under this
Agreement shall be in writing and shall be sent or delivered to the address set
forth below (or such other address as may be hereafter specified in writing):
To Seller: Intercapital Portfolio 944 I Limited
Partnership
0000 Xxxxxxx Xx Xxx Xxxxxx - Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxx
Fax: (000) 000-0000
With a copy to
Seller's Attorneys: Xxxxxxx X. Xxxx, Esq.
Xxxxxx, Firsel & Xxxxxx, Ltd.
Suite 1910
000 Xxxxx Xx Xxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Fax: (000) 000-0000
15
To Purchaser: Xx. Xxx Xxxxxxxx
Cornerstone Realty Group, Inc.
000 X. Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
With a copy to
Purchaser's Attorneys: Xxxxx X. Xxxxxxxxxx, Esq.
Xxxxxxxxxx & Taubenfeld
000 Xxxxxxxx Xx., X.X. Xxx 000
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
-and-
Xxxxxx X. Xxxxxxxx, Esq.
Xxxxx XxXxxxxxx & Oaks Xxxxxxxx
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Fax: (000) 000-0000
13.2 Delivery of Notice. Notices sent either by Registered or Certified
Mail, Return Receipt Requested, or by overnight express mail shall be deemed
given when deposited in the United States Mail, postage prepaid, or delivered to
a reliable overnight courier or by fax. Notices sent in any other manner shall
be deemed given only when actually delivered at the specified address.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused this
Agreement to be executed this day and date first written above.
SELLER:
INTERCAPITAL PORTFOLIO 944 I, LIMITED PARTNERSHIP
By: INTERCAPITAL PORTFOLIO, INC.
General Partner
By: /s/ Xxxx X. Xxxxxx
--------------------
Its: Vice President
PURCHASER:
CORNERSTONE REALTY GROUP, INC.
By: /s/ X. X. Xxxxxxx
-----------------------
Its: Senior Vice President
16
MODIFICATION TO PURCHASE CONTRACT
---------------------------------
This MODIFICATION TO PURCHASE CONTRACT ("Modification") is made and entered
into this day of March, 1997, between CORNERSTONE REALTY GROUP, INC.
("Purchaser") and INTERCAPITAL PORTFOLIO 944 I LIMITED PARTNERSHIP ("Seller").
WHEREAS, Purchaser and Seller entered into an Agreement of Sale dated the
21st day of February 1997 ("Agreement"); and
WHEREAS, Purchaser and Seller now desire to modify and amend the Agreement
as set forth herein.
NOW, THEREFORE, in consideration of the premises and the respective
agreements hereinafter set forth, Seller and Purchaser agree as follows:
1. All terms not specifically defined herein shall have the same meaning as
ascribed to them in the Agreement unless previously modified.
2. ARTICLE II, Paragraph 2.2 Deposit, is hereby amended to read:
"ONE HUNDRED FIFTY THOUSAND ($150,000) DOLLARS to be placed in escrow at
the end of the "Inspection Period" described in Article VI below. Said
deposit shall be placed in escrow with Texas State Title Insurance
Corporation or its authorized agent (the "Title Company") as an
xxxxxxx money deposit which may be credited against the purchase price
or applied as per Article XI below."
3. ARTICLE VII, Paragraph 7.1 Closing, is hereby modified to read as
follows:
"Closing will be held on April 15, 1997, at such place and at such time
as the parties may agree. However, either party shall be entitled to
one (1) extension of seven (7) days upon request."
4. Except as herein modified, the terms and provisions of the Agreement
shall remain in full force and effect.
5. In the event there is any conflict in the terms of this Modification
and the terms of the Agreement, the terms of this Modification shall govern.
6. This Modification may be executed in separate counterparts, each of
which shall be deemed an original and all of which taken together will
constitute one agreement between the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this agreement on the
date first above written.
CORNERSTONE REALTY GROUP, INC.,
a Virginia Corporation
By: /s/ X. X. Xxxxxxx
---------------------------
Name: X. X. Xxxxxxx
--------------------------
Its: Secretary
---------------------------
INTERCAPITAL PORTFOLIO 944 I
LIMITED PARTNERSHIP
By: INTERCAPITAL PORTFOLIO, INC.
Its: General Partner
By: /s/ Xxxx X. Xxxxxx
------------------------------
Name: Xxxx X. Xxxxxx
----------------------------
Its: Vice President
----------------------------
2
SECOND MODIFICATION TO PURCHASE CONTRACT
----------------------------------------
This Second Modification to Purchase Contract ("Second Modification") is
made and entered into this 29th day of April, 1997 between Cornerstone Realty
Group, Inc. ("Purchaser") and Intercapital Portfolio 944 I Limited Partnership
("Seller").
WHEREAS, Purchaser and Seller entered into an Agreement of Sale dated the
21st day of February 1997 ("Agreement"); and
WHEREAS, Purchaser and Seller entered into a First Modification to Purchase
Contract on the day of March 1997; and
WHEREAS, Purchaser and Seller now desire to further modify and amend the
Agreement as set forth herein.
NOW, THEREFORE, in consideration of the premises and the respective
agreements hereinafter set forth, Seller and Purchaser agree as follows:
1. All terms not specifically defined herein shall have the same meaning as
ascribed to them in the Agreement unless previously modified.
2. Par. 2.2, Deposit, is hereby further amended (First Amendment dated the
day of March 1997) to add to the existing paragraph the following:
"ONE HUNDRED THOUSAND ($100,000) DOLLARS upon the execution of
this Second Modification (making a total deposit of TWO
HUNDRED FIFTY THOUSAND ($250,000) DOLLARS) to be placed in escrow
with Texas State Title Company ("Title Company") or its
authorized agent as an additional xxxxxxx money deposit which
shall be credited against the purchase price.
The Title Company is authorized to release to Seller the sum
of Fifty Thousand ($50,000) Dollars upon its receipt of a fully
executed copy of this Second Modification and the additional one
Hundred Thousand (100,000) Dollars set forth herein."
3. ARTICLE VII, Paragraph 7.1 Closing, is hereby modified to read as
follows:
"Closing will be held on May 23, 1997,..."
4. Except as herein modified, the terms and provisions of the Agreement
shall remain in full force and effect.
5. In the event there is any conflict in the terms of this Second
Modification and the terms of this Agreement, the terms of this Second
Modification shall govern.
6. This Second Modification may be executed, in separate counterparts, each
of which shall be deemed an original and all of which taken together will
constitute one agreement between the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Second
Modification on the date first above written.
CORNERSTONE REALTY GROUP, INC.
a Virginia corporation
By: /s/ X. X. Xxxxxxx
---------------------------
Name: X. X. Xxxxxxx
--------------------------
Its: Secretary
---------------------------
INTERCAPITAL PORTFOLIO 944 I
LIMITED PARTNERSHIP
By: INTERCAPITAL PORTFOLIO, INC.
General Partner
By: /s/ Xxxx X. Xxxxxx
------------------------------
Name: Xxxx X. Xxxxxx
----------------------------
Its: Vice President
----------------------------
THIRD MODIFICATION TO PURCHASE CONTRACT
---------------------------------------
This Third Modification to Purchase Contract ("Third Modification") is
made and entered into this day of May 1997 between Cornerstone Realty
Group, Inc. ("Purchaser") and Intercapital Portfolio 944 I Limited Partnership
("Seller").
WHEREAS, Purchaser and Seller entered into an Agreement of Sale dated the
21st day of February 1997 ("Agreement"); and
WHEREAS, Purchaser and Seller entered into a First Modification to
Purchase Contract on the day of March 1997; and
WHEREAS, Purchaser and Seller entered into a Second Modification to
Purchase Contract on the 29th day of April 1997; and
WHEREAS, Purchaser and Seller now desire to further modify and amend the
Agreement as set forth herein.
NOW, THEREFORE, in consideration of the promises and the respective
agreements hereinafter set forth, Seller and Purchaser agree as follows:
1. All terms not specifically defined herein shall have the same meaning
as ascribed to them in the Agreement unless previously modified.
2. ARTICLE II, Paragraph 2.1 Purchase Price, is hereby amended to read:
"The total purchase price shall be NINE MILLION TWO HUNDRED
FIFTEEN THOUSAND ($9,215,000) DOLLARS as evidenced by cash or cash
equivalent at closing.
However, in the event that the closing takes place on or before
May 30, 1997, Paragraph 2.1 shall not be amended and the purchase
price shall remain as set forth in the Agreement, to wit: NINE
MILLION TWO HUNDRED THOUSAND ($9,200,000) DOLLARS.*
3. ARTICLE VII, Paragraph 7.1 Closing, is hereby modified to read as
follows:
"Closing will be held on or about June 24, 1997,..."
4. Except as herein modified, the terms and provisions of the Agreement
shall remain in full force and effect.
*Purchaser shall give Seller written notice on or before May 27, 1997 of
Purchaser's intention to close on May 30, 1997.
5. In the event there is any conflict in the terms of this Third
Modification and the terms of the Agreement, the terms of this third
Modification shall govern.
6. This Third Modification may be executed in separate counterparts, each
of which shall be deemed an original and all of which taken together will
constitute one agreement between the parties hereto.
7.** (See Paragraph 7, hereinbelow, fully incorporated herein)
IN WITNESS WHEREOF, the parties hereto have executed this Third
Modification on the date first above written.
CORNERSTONE REALTY GROUP, INC.
a Virginia Corporation
By: /s/ X.X. Xxxxxxx
Name: X.X. Xxxxxxx
Its: Senior Vice President
INTERCAPITAL PORTFOLIO 944 I LIMITED
PARTNERSHIP
By: INTERCAPITAL PORTFOLIO 944, Inc.
General Partner
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Its: Vice President
**7. The Agreement and all modifications thereto, though executed by the duly
authorized officers of Intercapital Portfolio 944, Inc., the general partner of
the Seller, were executed by such general partner under the name "Intercapital
Portfolio, Inc.", due to a scrivener's error. The Seller and Purchaser hereby
acknowledge and agree that all references to the name "Intercapital Portfolio,
Inc." in the Agreement and all amendments and modifications thereto, including
but not limited to any such reference made in the preambles and signature lines,
were, are and shall be references to the name "Intercapital Portfolio 944,
Inc.".