PURCHASE AND SALE AGREEMENT
DATED MARCH 1st, 1997
BETWEEN
CORNERSTONE REALTY INCOME TRUST, INC., AS BUYER,
AND
PACES ARBOR APARTMENTS LIMITED PARTNERSHIP
AND
PACES FOREST APARTMENTS LIMITED PARTNERSHIP,
AS SELLER
TABLE OF CONTENTS
1. Description of Property . . . . . . . . . . . . . . . . . . . 1
2. Purchase Price and Manner of Payment . . . . . . . . . . . . . 2
3. Binder Deposit and Escrow Agent's Rights and Duties. . . . . . 2
4. Site Analysis Period . . . . . . . . . . . . . . . . . . . . . 3
5. Survey and Title Insurance . . . . . . . . . . . . . . . . . . 7
6. Seller's Closing Documents and Escrow . . . . . . . . . . . . 8
7. Buyer's Closing Documents . . . . . . . . . . . . . . . . . . 10
8. Closing and Closing Date . . . . . . . . . . . . . . . . . . 11
9. Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . 11
10. Closing Costs and Expenses . . . . . . . . . . . . . . . . . 12
11. Seller's Covenants . . . . . . . . . . . . . . . . . . . . . 13
12. Seller's Representations . . . . . . . . . . . . . . . . . . 15
13. Buyer's Representations and Warranties . . . . . . . . . . . 18
14. Remedies on Default: Treatment of Binder Deposit. . . . . . . 19
15. Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . 20
16. Survival of Provisions . . . . . . . . . . . . . . . . . . . 21
17. Assignment of Buyer's Interest . . . . . . . . . . . . . . . 21
18. Closing Adjustments and Apportionments . . . . . . . . . . . 21
19. Memorandum of Agreement . . . . . . . . . . . . . . . . . . . 23
20. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
21. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . 24
i
STATE OF NORTH CAROLINA
PURCHASE AND SALE AGREEMENT
COUNTY OF WAKE
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made and entered
into as of the 1st day of March, 1997, by and between PACES ARBOR APARTMENTS
LIMITED PARTNERSHIP, a North Carolina limited partnership and PACES FOREST
APARTMENTS LIMITED PARTNERSHIP, a North Carolina limited partnership,
hereinafter collectively referred to as the "Seller"; and CORNERSTONE REALTY
INCOME TRUST, INC., a corporation, hereinafter referred to as the "Buyer."
(Seller and Buyer are sometimes hereinafter referred to collectively as the
"Parties," and each of Seller and Buyer is sometimes hereinafter referred to as
a "Party.")
W I T N E S S E T H:
FOR AND IN CONSIDERATION OF the mutual agreements and undertakings
herein set forth and other valuable considerations, the receipt and sufficiency
of which are hereby acknowledged, Seller agrees to sell and convey to Buyer, and
Buyer agrees to purchase from Seller, the Property described in Paragraph 1
herein on the terms and conditions hereinafter set forth:
1. Description of Property. The property which is subject to this
Agreement (the "Property") consists of:
a. approximately 10.33 acres of land known as "Paces Arbor Apartments"
and 19.54 acres of land known as "Paces Forest Apartments," each in
Wake County, Raleigh, North Carolina and more particularly described
on Exhibit A and Exhibit A-1 attached hereto and incorporated herein
by reference (collectively the "Land");
b. all of Seller's right, title and interest to buildings (including 117
apartment units at Paces Forest Apartments and 1O1 apartment units at
Paces Arbor Apartments), the parking lots, driveways, curb, gutter,
sidewalks, pavement and all other improvements located on the Land
(collectively, the "Improvements");
c. all easements, if any, benefitting the Land;
d. all rights and appurtenances pertaining to the Land, including any
right, title and interest of Seller in and to adjacent streets,
alleys or rights of way;
e. all of Seller's right, title and interest in and to all fixtures,
equipment, apparatus, machinery, appliances, furnishings, books and
records (or copies thereof) wherever located (including computer
stored data, programs, etc., not including software), and other
tangible personal property owned by Seller and used in connection
with the operation and ownership of the Improvements, and all
leasehold improvements located thereon(collectively, the "Personal
Property"), such Personal Property to include without limitation, the
personal property described on the schedule to be delivered to Buyer
pursuant to Paragraph 4(a)(v); and
f. All of Seller's right, title and interest in and to all intangible
property now or hereafter owned or held by Seller between the date of
this Agreement and the "Closing Date" (as hereinafter defined) and
used solely in connection with the Land, the Leases (as defined in
Paragraph 6(b)), the Improvements, or the Personal Property,
including, but not limited to, all assignable guarantees and
warranties (including guarantees and warranties pertaining to the
Improvements); all assignable licenses and other governmental permits
and permissions relating to the Land, the Improvements, and the
operation thereof; all assignable contracts and contract rights; and
all trade names, trademarks, and logos used in connection with the
ownership and operation of the Improvements, including, but not
limited to, the names "Paces Arbor" and "Paces Forest" (collectively,
the "Intangible Property"), provided Seller shall have no obligation
to incur cost in connection with any such transfer or assignment,
except as otherwise expressly permitted herein. Notwithstanding
anything contained herein to the contrary, Seller shall be obligated
to fulfill its prior obligations with respect to the Intangible
Property which have accrued prior to Closing.
2. Purchase Price and Manner of Payment. Subject to adjustment, if any,
as hereinafter provided, the purchase price (the "Purchase Price") to be paid
for the Property shall be Twelve Million and No/100 Dollars ($12,000,000.00).
The Purchase Price shall be payable in United States currency by way of Federal
wire transfer or other immediately available funds at Closing.
3. Binder Deposit and Escrow Agent's Rights and Duties. Upon expiration
of the Site Analysis Period (as herein defined), Buyer shall pay and deliver to
The Title Company of North Carolina, Inc. (the "Escrow Agent") Two Hundred
Thousand and No/100 Dollars ($200,000.00) in the form of cash or other
immediately available funds to be held by Escrow Agent pursuant to this
Agreement. The cash deposit shall serve as a binder deposit (the "Binder
Deposit") to be held in trust for the mutual benefit of the parties, subject
to the following terms and conditions:
a. If Escrow Agent shall be unable to determine at any time to whom the
Binder Deposit should be delivered or if a dispute should develop
between Seller and Buyer concerning the disposition of the Binder
Deposit, then in any such event, Escrow Agent shall deliver the
Binder Deposit in accordance with the joint (or consistent) written
instructions of Seller and Buyer. In the event that such joint (or
consistent) written instructions shall not be received by Escrow
Agent within ten (10) days after Escrow Agent shall have served
written requests for such joint (or consistent) written instructions
upon Seller and Buyer, Escrow Agent shall have the right to deposit
the Binder Deposit with a state court in Raleigh, North Carolina,
having jurisdiction relative to such matter and to interplead Seller
and Buyer in respect thereof; and, thereafter, Escrow Agent shall be
discharged of any further or continuing obligations in connection
with the Binder Deposit.
b. If costs and expenses (including reasonable attorneys' fees) are
incurred by Escrow Agent because of litigation or any dispute between
Seller and Buyer arising out of the holding of the Binder Deposit,
the non-prevailing party (i.e., either Seller or Buyer) shall
reimburse Escrow Agent for such reasonable costs and expenses
incurred. Seller and Buyer hereby agree and acknowledge that Escrow
Agent assumes no liability in connection with the holding of the
Binder Deposit pursuant hereto, except for the negligence or willful
misconduct of Escrow Agent and its employees and agents. Escrow Agent
shall not be responsible for the validity, correctness or genuineness
of any document or notice referred to herein; and, in the event of
any dispute under this Agreement relating to the disposition of the
Binder Deposit, Escrow Agent may seek advice from its own counsel and
shall be fully protected in any action taken in good faith in
accordance with the opinion of Escrow Agent's counsel.
c. Escrow Agent's address for purposes of mailing or delivering
documents and notices hereunder is as follows:
The Title Company of North Carolina, Inc.
150 Fayetteville Street Mall, Suite 2710
Raleigh, North Carolina 27601
Attention: Alice Murdock
Telephone: 800-277-0081
Facsimile: 919-832-0877
4. Site Analysis Period.
a. Seller's Information. Within five (5) days after the Effective Date
(as hereinafter defined), Seller agrees to make available to Buyer at the
Property or at Seller's offices in Charlotte, North Carolina for copying at
Buyer's expense, documents relating to the Property which Buyer may reasonably
request, to the extent not delivered prior to the date of this Agreement,
including without limitation:
(i) utility bills, property tax assessments and tax bills and all
correspondence pertaining to Property taxes with respect to the
Property for the past three (3) calendar years;
(ii) feasibility studies, market studies, appraisals and any such
matters as may be material to an evaluation of the Property, if
available;
(iii) existing soil reports, engineering and architectural studies,
grading plans, topographical maps and similar data relating to
the Property, if available;
(iv) all service and maintenance contracts and management agreements
and other written agreements of any kind pertaining to the
Property, and all amendments and modifications thereto, that
Seller or its agents and affiliates have entered into in
connection with the construction, development, maintenance,
ownership, and operation of the Property and that might survive
the Closing, together with a schedule listing such contracts.
(v) a schedule listing all Personal Property;
(vi) leases, including all modifications or amendments thereto, and
any default notices sent to any tenant or, if no such default
notices exist, a certification to that effect;
(vii) a rent roll certified as true and correct by Seller dated no
earlier than five (5) calendar days prior to the date of this
Agreement, to be supplemented by a rent roll as Buyer may
reasonably request from time to time, showing the name and
address of each tenant, the unit type, the commencement and
expiration dates of each lease and the rent, security, key, pet
and cleaning deposits (collectively, the "Security Deposits"),
market rent and offsets, if any;
(viii) an existing Phase I environmental site assessment, if available,
verifying that the Property is free of any toxic contamination,
including radon, and that the Improvements are free of any
asbestos, delivered during the Site Analysis Period;
(ix) monthly and annual income and operating statements for the
Property for the past thirty-six (36) months;
(x) any existing title insurance policies and the most recent
surveys of the Property;
(xi) a list and complete copies of all licenses, permits, maps,
certificates of occupancy, building inspection approvals,
covenants, conditions and restrictions with respect to
the Property, if available;
(xii) to the extent in Seller's possession, copies of insurance
loss runs for the immediately preceding five (5) years;
(xiii) to the extent in Seller's possession, plans and specifica-
tions and certificates of occupancy relating to the Property;
and
(xiv) to the extent in Seller's possession engineering reports, if
any, relating to the Property.
All copies of the documents referenced above are true, correct, and
complete. In no event shall Seller's failure to provide the foregoing extend the
Site Analysis Period (as hereinafter defined).
b. Access. Seller shall provide Buyer, and Buyer's agents and representa-
tives complete access to any portion of the Property for the purpose of making a
physical inspection of the Property and copying any documents relating to the
Property to determine whether the Property is suitable for Buyer's purposes.
Such inspection may include, among other things, termite, engineering,
environmental and feasibility studies. Buyer's rights hereunder to conduct said
investigation shall, however, be subject to the following requirements and
limitations: (i) any entry upon the Property by Buyer, Buyer's authorized agents
and employees, as well as others authorized by Buyer, shall require reasonable
advance notice to Seller of the date and time of the entry and the specific
investigations to be conducted in connection with the entry, (ii) Seller shall
be entitled to have one or more representatives present to observe the
investigations on the Property, (iii) Buyer shall not be entitled to conduct any
environmental investigations on the Property beyond a "Phase I" environmental
site assessment (i.e. no sampling, drilling, etc.) without first obtaining
Seller's prior written consent, not to be unreasonably withheld, subject to
reasonable restrictions and (iv) said investigation shall not result in any
damage to the Property or adverse change to the physical characteristics of the
Property. Buyer hereby agrees to indemnify and hold harmless Seller against any
loss, liability, damages, costs or expenses including reasonable attorneys'
fees, incurred by Seller as a result of any property damage or personal injury
resulting from the inspections conducted by Buyer under this Paragraph 4.b.
Buyer acknowledges and agrees that any such inspection conducted by Buyer or
Buyer's agents and representatives shall be solely at the risk of Buyer.
c. Site Analysis Period. Buyer shall have the Site Analysis Period (as
hereinafter defined) in which to ascertain whether the Property is acceptable to
Buyer, including but not limited to the review of the leases, title issues,
survey, contracts, taxes and financial information relative to the Property. The
"Site Analysis Period" shall mean the period commencing on the Effective Date
(as defined in Paragraph 21(a) herein) and expiring at 5:00 p.m. EST on March
24, 1997. If Buyer determines in Buyer's sole and absolute discretion that the
Property is unacceptable, then Buyer shall have the right to terminate this
Agreement by giving written notice of termination to Seller prior to the
expiration of the Site Analysis Period, in which event Seller and Buyer shall
pay their respective costs incurred as of the termination date in accordance
with Paragraph 10 hereof and neither Party shall have any further rights or
obligations hereunder except for the Indemnification Obligations (as herein
defined).
In the event Buyer fails to terminate this Agreement prior to the
expiration of the Site Analysis Period, as same may be extended in writing by
mutual agreement of Buyer and Seller, except in the case of a default by Seller
hereunder (which shall be governed by the terms of Paragraph 14.b herein) and
except in the event of a termination of this Agreement by either party pursuant
to any specific termination rights set forth herein which requires the return of
the Binder Deposit to Buyer, the Binder Deposit shall be paid over to the Escrow
Agent in accordance with Paragraph 3 and shall be deemed for all purposes under
this Agreement to be non-refundable to Buyer. Buyer agrees that it will forward
to Seller copies of all reports and due diligence materials and information
obtained by Buyer relative to the Property within a reasonable time after
receipt of same. At Closing, the Binder Deposit shall be applied to the Purchase
Price or, at the election of Buyer and provided substitute proceeds are
delivered to Seller at Closing, returned to Buyer.
Seller agrees that all vacant apartment units at the Property shall be
maintained in "rent ready" condition in a manner which is consistent with the
past practices of Seller at the Property relative to vacated units. All
apartment units vacant or vacated at least five days (5) prior to Closing shall
be in a "rent ready" condition at Closing and shall contain, without limitation,
the following: carpet, refrigerator, range, garbage disposal, heating, plumbing
and electrical systems.
5. Survey and Title Insurance. Buyer may cause an "as built" survey
(the "Survey") of the Property to be prepared by a professional licensed land
surveyor (the "Surveyor") during the Site Analysis Period. A copy of the Survey
shall be provided to Seller at the earliest practicable time after completion of
same, but in any event, not later than the expiration of the Site Analysis
Period. In addition, Buyer shall, at Buyer's sole cost and expense, (i) cause a
national title insurance company selected by Buyer (the "Title Company") to
issue to Buyer a current commitment (having an effective date not earlier than
the Effective Date) for an ALTA policy of owner's title insurance (the "Title
Commitment") setting forth the state of title to the Property and committing
the Title Company to issue to Buyer an owner's policy of title insurance
insuring Buyer's fee simple interest in the Property with such endorsements
thereto as Buyer may require, and (ii) deliver to Seller a complete copy of the
Title Commitment along with a legible copy of any recorded instruments (if any)
that are disclosed in the Title Commitment.
Buyer shall have until the expiration of the Site Analysis Period to
give Seller written notice of Buyer's objection to the condition of title to the
Property, as reflected by the Survey and the Title Commitment. The failure of
Buyer to provide such notice to Seller prior to the expiration of the Site
Analysis Period shall constitute a waiver of all of Buyer's rights under this
Paragraph 5 as such rights relate to title matters of record or existing as of
the effective date and time of the Title Commitment. Such matters not objected
to shall be hereinafter referred to as the "Permitted Exceptions." Additionally,
if Buyer gives written notice to Seller of title objections as permitted herein
prior to the expiration of the Site Analysis Period, Seller shall have five (5)
days from receipt of such written notice either (A) to have such objections
satisfied and removed or to commit to Buyer in writing to cause such objections
to be satisfied and removed at or prior to the Closing or (B) to give Buyer
written notice of Seller's inability or refusal to satisfy the objections. If
any such objection is not properly satisfied and removed within said five (5)
day period or Seller does not commit to Buyer in writing within said five (5)
day period to cause any such objection to be satisfied and removed at or prior
to the Closing, Buyer, as its sole and exclusive remedy, may elect either (i) to
terminate this Agreement or (ii) to accept and approve all such unsatisfied
objections and to complete the purchase of the Property (in which case all such
unsatisfied objections shall automatically become Permitted Exceptions under
this Agreement), with the right to pay at Closing and deduct from the Purchase
Price only the amount of liens of a definite, ascertainable amount, subject to
Seller's right to require said amount to be escrowed under terms and conditions
reasonably acceptable to Seller pending Seller's own contest of the validity or
amount of such lien(s); provided, however, the escrow of said funds shall be
structured so as to allow the Title Company to insure title to the Property
without exception for said lien(s). Buyer shall notify Seller of its election
pursuant to the immediately preceding sentence within five (5) days after the
earlier to occur of the following two events: (1) the receipt by Buyer of
Seller's written notice of Seller's inability or refusal to satisfy the
objections (or any of them) or (2) the passage of the five (5) day period during
which Seller is permitted to respond with regard to the objections. Subject to
the conditions set forth herein, if Buyer elects to terminate this Agreement as
provided in this Paragraph 5, the Binder Deposit shall be promptly returned by
Escrow Agent to Buyer, whereupon the parties hereto shall have no further
rights, obligations or liabilities with respect to each other hereunder, except
for the indemnification obligations under Paragraph 4.b herein (the
"Indemnification Obligations").
6. Seller's Closing Documents and Escrow.
At Closing Seller shall execute and deliver the following documents for
each apartment complex comprising the Property:
a. Deed. A special warranty deed (the "Deed") in the form attached
hereto as Exhibit B, conveying to Buyer good, marketable and insurable title to
the Property, without exception except as to the Permitted Exceptions and
additional Permitted Exceptions (if any) created or established under this
Agreement.
b. Assignment of Leases. An assignment of the original leases (the
"Lease Assignment") in the form attached hereto as Exhibit C assigning all of
the Seller's right, title and interest as lessor under the leases, tenancies,
occupancy agreements, rental agreements, options, licenses and concessions
relating to the Property, and all guaranties of the foregoing (collectively, the
"Leases"), all of which are (i) described on the Rent Roll, as hereinafter
defined, or (ii) hereafter consented to by Buyer, together with all Security
Deposits made by the tenants (the "Tenants") under the Leases.
c. Rent Roll. A rent roll (the "Rent Roll"), certified as true and
complete as of the Closing Date by Seller, showing unleased units and itemizing
Leases and Security Deposits on a Tenant-by-Tenant basis for the Property. The
Rent Roll as of the Effective Date is attached hereto as Exhibit D and Exhibit
D-1.
d. Bill of Sale. A bill of sale in the form attached hereto as Exhibit
E, transferring and conveying to Buyer all of Seller's right, title and interest
to the Personal Property.
e. Assignment of Contracts. To the extent assignable and at no cost to
Seller, an assignment (the "Contract Assignment") in the form attached hereto as
Exhibit F, of all of Seller's right, title and interest as the owner of the
Property under the service contracts and agreements, personal property leases
and agreements (collectively, the "Contracts") which are described on Exhibit H
attached hereto. Subject to Paragraph 6.h herein, Buyer agrees to assume all
such Contracts at Closing; provided, however, Buyer may inform Seller not less
than ten (10) business days prior to the Closing, which Contracts, if any, Buyer
wishes Seller to terminate as of Closing, and Seller will do so provided such
termination can occur without expense to Seller.
f. Title Insurance Affidavit. Seller agrees to provide at Closing an
executed Owner's Affidavit or other document required by the Title Company in
issuing an owner's title insurance policy to Buyer without exception to the
possible lien claims of mechanics, laborers and materialmen.
g. FIRPTA Certificate/Withholding. A certificate in the form and
substance attached hereto as Exhibit G ("FIRPTA Affidavit");
h. Termination of Management and Seller Affiliated Contracts.
Notwithstanding anything contained herein to the contrary, Seller agrees to
deliver agreements signed by (i) the parties to any management agreement for the
Property and (ii) the parties to all Contracts between the Seller or its
predecessors in interest and parties affiliated with or controlled by Seller
which terminate such agreements as of the Closing, without any liability or
obligation on the part of the Buyer or the Property.
i. Permits. Upon the request of Buyer, original or copies of Permits
which Seller shall transfer to Buyer to the extent transferable without cost to
Seller. Seller agrees to keep such Permits in full force and effect and to
comply with all terms and conditions thereof prior to Closing.
j. Closing Statement. A closing statement executed by Seller.
k. Escrow Instructions. Signed escrow instructions, reasonably
satisfactory to Escrow Agent, in form and substance acceptable to the parties
and sufficient to carry out the Closing.
l. Partnership Resolution. A partnership resolution evidencing the
authority of Seller to consummate the sale of the Property, and the authority of
the general partner to execute any and all documents necessary to consummate the
transaction, together with a Certificate of Good Standing from the state of
Seller's organization evidencing that Seller is duly organized, validly existing
and in good standing in the state of Seller's organization.
m. Letter to Tenants. An executed letter to be sent to each of the
Tenants stating that the Property together with the Security Deposits (as herein
defined) and other tenant deposits, if any, have been transferred to Buyer and
directing the Tenants thereafter to pay all rent to Buyer or its designee.
n. Non-Resident Seller Form. To the extent Seller is a foreign limited
partnership, a NC-1099NRS to be filed with the North Carolina Department of
Revenue.
o. Termite Bonds. Any existing standard termite bonds for the Property
in Seller's possession. Any additional termite bonds for the Property and any
required corrective work may be requested by Buyer and shall be conducted at
Buyer's sole cost and expense.
p. Assignment. Assignments of all Seller's interest in the following:
(i) all assignable licenses and permits relating to the operation of the
Property, (ii) the existing Property telephone number, and (iii) the business
and trade name as herein set forth.
q. Assignment of Warranties. Assignments of all warranties and
guarantees to the extent in Seller's possession and still in effect. Seller
agrees to provide Buyer with copies of all such warranties and guarantees, to
the extent in Seller's possession, for all appliances, dishwashers, disposals,
refrigerators, heating and air-conditioning units, washers and dryers.
r. Transfer of Utilities. All appropriate documents, if any, for the
transfer of the telephone, electric, water and sewer, and gas utilities, as may
be required by the utility company, for execution at Closing.
s. Representation Letter. A representation letter as reasonably required
by auditors for a public company acquiring property of the same type and size as
the Property. The form will be similar to that attached hereto as Exhibit I.
This clause shall survive Closing for three (3) months.
t. Other Documents. Such other documents as may be reasonably required
to close the transaction contemplated by this Agreement.
7. Buyer's Closing Documents.
At Closing Buyer shall execute and deliver to Seller the following
documents to Escrow Agent for each apartment complex comprising the Property:
a. Assignment of Leases. The Lease Assignment, acknowledging the
assumption by Buyer of Seller's obligations under the Leases which accrue after
the Closing Date.
b. Assignment of Contracts. The Contract Assignment, acknowledging the
assumption by Buyer of Seller's obligations under the Contracts which accrue
after the Closing Date.
c. Closing Statement. A closing statement executed by Buyer.
d. Escrow Instructions. Signed escrow instructions, reasonably
satisfactory to Escrow Agent, in form and substance acceptable to the parties
and sufficient to carry out the Closing.
e. Other Documents. Such other documents as may be reasonably required
to close the transaction contemplated by this Agreement.
8. Closing and Closing Date. The consummation of the sale and purchase
of the Property hereunder (the "Closing") shall take place on March 27, 1997
unless otherwise extended in accordance with the terms herein. The Closing may
occur on a prior date selected by Buyer upon at least three (3) days prior
written notice to Seller, at a mutually convenient time and location in Raleigh,
North Carolina. Exclusive possession of the Property shall be delivered to Buyer
at Closing. The date on which the Closing actually occurs is hereinafter
referred to as the "Closing Date."
9. Risk of Loss.
a. Seller shall bear all risk of loss to the Property until the Closing
Date. If, between the date of this Agreement and the Closing Date, all or any
portion of the Property is damaged or destroyed by fire or other casualty and
the cost to repair and restore the Property is more than $200,000.00, Buyer at
its sole option, may elect to terminate this Agreement within ten (10) days
after notice of such casualty without cost, obligation, or liability on Buyer's
part, in which event all rights and obligations of the parties hereunder shall
cease and the full Binder Deposit shall be returned to Buyer. If this Agreement
is not terminated, Seller shall assign to Buyer all of Seller's right, title,
and interest in and to any insurance proceeds (including any rental interruption
proceeds) payable as a result of such damage or destruction and Buyer shall
receive a credit to the Purchase Price equal to any deductibles applicable to
such insurance proceeds. If Buyer fails to notify Seller of its election, such
failure shall constitute an election to terminate this Agreement as aforesaid
and Escrow Agent shall immediately return the Binder Deposit to Buyer and
thereafter, neither party shall have any liability, or obligation to the other
hereunder, except for the indemnities set forth in this Agreement, which shall
survive termination hereunder. The Closing Date shall be adjusted, if necessary,
to allow for such election.
b. If, between the date of this Agreement and the Closing Date, any
condemnation or eminent domain proceedings are initiated that might result in
the taking of any material part of the Improvements or the Land (other than the
Leadmine Road condemnation, which for purposes of this Agreement shall not
deemed "material"), Buyer, at its sole option, may elect to terminate this
Agreement without cost, obligation, or liability on the part of Buyer, in which
event all rights and obligations of the parties hereunder shall cease. If this
Agreement is not terminated, Seller shall assign to Buyer all of Seller's right,
title, and interest in and to any award pertaining to the Property made in
connection with such condemnation or eminent domain proceedings.
10. Closing Costs and Expenses.
a. Expenses.
i. Seller shall pay any and all fees or costs required to be
paid by Seller to the holder of any loans encumbering the
Property, in connection with the sale of the Property,
including, but not limited to prepayment fees, lender's
consent fees or lender's counsel fees, if any.
ii. Buyer shall pay the costs and expenses of: (i) any
environmental audit of the Property and any other
investigations of the Property undertaken by Buyer, if
Buyer elects to obtain an environmental audit or to
undertake any other investigation of the Property, (ii) the
Survey, (iii) the Commitment and Title Policy, and (iv) the
cost of the per-page recording charges for filing the Deed
and any mortgage taxes applicable to the Closing.
iii. Each Party shall pay its own attorney's fees.
iv. Seller shall pay the cost and expense for preparing the
Deed and any documentary or transfer tax stamps to be
affixed to the Deed.
v. Other than as specifically provided herein (i) Seller shall
bear all costs and expenses that are normally and
customarily borne by sellers of similar real estate in the
locale where the Property is located; and (ii) Buyer shall
bear all costs and expenses that are normally and
customarily borne by buyers of similar real estate in the
locale where the Property is located.
11. Seller's Covenants. In addition to other covenants and agreements
of Seller in this Agreement, Seller hereby covenants as follows:
a. In the event Seller obtains written notice at any time prior to the
Closing of any pending condemnation action affecting the Property
(or any portion thereof), Seller shall promptly notify Buyer.
Seller hereby discloses that it has received notice from the City
of Raleigh attached hereto as Exhibit J (the "City Notice")
relative to the potential widening of Leadmine Road which is
adjacent to one of the apartment complexes constituting the
Property.
b. If Seller has actual notice thereof prior to the Closing, Seller
shall advise Buyer promptly of any litigation, arbitration or
administrative hearing concerning or affecting the use and
development of the Property.
c. From the Effective Date until the Closing, Seller shall:
(i) pay in full, or prior to the Closing Date, all bills and
invoices for labor, goods, materials, and services of any kind
relating to the Property, and all utility charges subject to the
prorations and adjustments made at Closing for any such items;
(ii) promptly notify Buyer of any material adverse change in
any physical condition with respect to the Property or of any event
or circumstance of which Seller has actual knowledge (with no duty
to investigate) which makes any representation or warranty of
Seller under this Agreement materially untrue or misleading, or any
material covenant of Seller under this Agreement incapable of being
performed;
(iii) cause the Property to be staffed, operated, repaired,
maintained (including the preparation of vacant apartment units for
re-leasing) and managed in a manner consistent with the management
of the Property during the 12-month period immediately proceeding
the date of this Agreement;
(iv) maintain the Personal Property and all mechanical,
electrical, heating, air conditioning, sewer, water and plumbing
systems in their current condition, subject to customary usage and
wear and tear in the normal course of Seller's business.
d. Between the date of this Agreement and the Closing Date, Seller will
not, without first obtaining the written consent of Buyer:
(i) except in the ordinary course of business, make any
lease or rental of the Property, or any portion thereof,
or negotiate or enter into any other letter of intent,
contract or option for the sale of the Property, or any
portion thereof, or further voluntarily or consensually
encumber title to the Property with any restriction,
easement or other title encumbrance, except for a
Permitted Exception;
(ii) except in the ordinary course of business, sell, convey,
or remove from the Property any Personal Property or
Intangible Property, without replacing said Personal
Property or Intangible Property with similar, like-kind
property;
(iii) cancel or permit cancellation of any hazard or liability
insurance carried with respect to the Property or its
operation unless substantially equivalent replacement
insurance is obtained;
(iv) unless such activity does not impose any obligation on
Buyer, materially extend, renew, modify, or replace any
of the Contracts without Buyer's prior consent, not to
be unreasonably withheld;
(v) convey an interest in any licenses, permits, plans and
specifications, or any of the other Personal Property or
Intangible Property;
e. If Seller acquires knowledge of any fact(s) rendering any of the
representations and warranties of Seller under this Agreement
(including representations of Seller under Paragraph 12 herein)
incorrect in any material respect at any time prior to Closing,
Seller shall promptly notify Buyer in writing of such fact(s).
f. Seller acknowledges that Buyer 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 Buyer to audit the last
twelve (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.
12. Seller's Representations. Seller hereby makes the following
representations to Buyer:
a. Seller is not a party to any other contract, agreement, or commitment
to sell, to convey, to assign, to transfer, or otherwise to dispose
of any portion or portions of the Property other than this Agreement.
b. Seller has full right, power and authority and has taken all
requisite action to enter into this Agreement and to sell and convey
the Property to Buyer as provided in this Agreement and to carry out
its obligation as set forth hereunder.
c. Seller is now, and at the Closing will be, a limited partnership duly
organized and validly existing under the laws of the state of its
formation and is and will be duly licensed and qualified to do
business in the state in which the Property is located.
d. Seller has made available to Buyer true, correct and complete copies
of all Leases and other agreements with tenants of the Property,
including all amendments thereto and modifications thereof. To the
best of Seller's actual knowledge, Seller is not in material default
of any of its obligations under the Leases.
e. Seller has or will furnish Buyer with true, correct and complete
copies of all Contracts, none of which, to the best of Seller's
knowledge, are in default.
f. Except for the City Notice, there is no actual litigation pending or,
to the best of Seller's knowledge without independent investigation
and except as may be disclosed by documents made available to Buyer
for review during the Site Analysis Period or otherwise disclosed to
or discovered by Buyer through its due diligence, threatened which
Seller has actual notice against Seller or the Property that relates
to or, if decided adversely, could have a material adverse effect
upon, the Property (including condemnation or similar proceeding).
g. To the best of Seller's knowledge, there are no other existing
actions, suits, proceedings, judgments, orders, decrees, defaults,
delinquencies or deficiencies pending, outstanding or, to the best of
Seller's knowledge, threatened of which Seller has actual notice
against the Property or against Seller or relating to its business
properties or assets that could affect Seller's ability to carry out
its obligations under this Agreement and the documents to be executed
in connection therewith; and to the best of Seller's knowledge there
are no facts that might reasonably give rise to such actions, claims,
or proceedings.
h. All Personal Property is located on or at the Property.
i. The financial statements with respect to the Property supplied to
Buyer in connection with this Agreement, as of their respective
dates, are to the best of Seller's knowledge, materially true,
complete and accurate.
j. To the best of Seller's actual knowledge without independent
investigation and except as may be disclosed by documents made
available to Buyer for review during the Site Analysis Period or
otherwise disclosed to or discovered by Buyer through its due
diligence, there are not presently pending, and Seller has received
no notice of, any special assessments of any nature with respect to
the Property or any part thereof (other than currently outstanding
assessments totalling approximately $7,917.00 for paving, sewer and
sidewalk improvements which have been disclosed to Buyer (the "Known
Assessments")), nor has Seller received any notice of any special
assessments being contemplated that would increase the real estate
taxes on the Property.
k. All required federal, state, county, and municipal tax returns with
respect to Seller and the Property have been filed, and all taxes due
thereunder have been or will be paid prior to Closing.
l. To the best of Seller's actual knowledge, Seller has not placed or
stored on the Property any hazardous or toxic chemical, material,
substance or waste that may be prohibited, limited or regulated by
any federal, state or local authority, and Seller has not knowingly
permitted any other person or entity to place or store same on the
Property in violation of applicable environmental laws. To the best
of Seller's actual knowledge without independent investigation and
except as otherwise disclosed by environmental reports of the
Property (copies of which have been provided to Buyer), the Property
contains no hazardous or toxic materials except for ordinary cleaning
and sanitizing materials which have been used, stored and disposed of
in material compliance with applicable laws.
m. No attachments, execution proceedings, assignments for the benefit of
creditors, insolvency, bankruptcy, reorganization, or other
proceeding are pending or, to the best of Seller's knowledge,
threatened against Seller, or the Property, and no such proceedings
are contemplated by Seller.
n. Any property management contract affecting the Property will be
terminated as of the Closing Date.
o. To the best of Seller's actual knowledge without independent
investigation, there are no material actions, suits, claims and other
legal or administrative proceedings affecting the Property nor has
Seller received actual notice of any threatened actions, suits,
claims or other legal or administrative proceedings affecting the
Property.
p. Seller is not a "foreign person," as that term is used in Section
1445 of the Internal Revenue Code of 1986, as amended.
q. No consent or approval of any third party (including without
limitation, any Government) is or was required to execute and deliver
this Agreement or consummate this transaction.
r. Upon the signing and delivery of this Agreement, it will be legally
binding upon Buyer in accordance with all of its provisions, except
as may be limited by bankruptcy, moratorium, insolvency or other laws
generally affecting creditors' rights.
s. Seller has no actual knowledge that any portion of the Property or
the operation of the Property is in violation or may violate any
governmental statute, regulation, ordinance or building code or of
any private restriction, that any government authority requires any
work to be done on or effecting the Property or that any governmental
authority has expressed an intent to condemn or to make special
improvements for the benefit of the Property or any part thereof.
t. Seller covenants and agrees that between the date hereof and the date
of Closing, Seller shall continue to maintain, operate and manage the
Property in a manner consistent with its prior practices, making
every reasonable effort to do nothing which might damage the
reputation of the Property or the relationships with the Tenants.
Seller shall not permit the modification, extension or cancellation
of any tenant lease other than in the ordinary course of Seller's
business or in accordance with the terms of such lease, or any
dealing with any tenant other than in the ordinary course of managing
the Property, without the prior written consent of Buyer. If any
Lease is expired before thirty (30) days after the date of Closing,
Seller shall, up to the date of Closing and without cost to Buyer,
continue its normal course of operation with respect to causing
tenants to be obtained for apartments which are unrented.
All representations of Seller contained in this Agreement or any
document or exhibit required to be executed by Seller pursuant hereto shall be
true at the Closing as though such representations were made at such time. If
any such representation is not true when made and at the Closing (except to the
extent any such representation, although true as of the Effective Date, is no
longer true at the Closing as a result of a matter, event or circumstance beyond
Seller's reasonable control), Buyer may consider same as an event of default
hereunder and may pursue such remedies as set forth in Paragraph 14 herein. If
any representation of Seller herein, although true as of the Effective Date, is
no longer true at the Closing as a result of a matter, event or circumstance
beyond Seller's reasonable control, Buyer may not consider same as an event of
default hereunder; but rather, in such case, Buyer may, at Buyer's option and as
Buyer's sole and exclusive remedy, terminate this Agreement and have the Binder
Deposit refunded by Escrow Agent, whereupon the parties hereto shall have no
further rights, obligations or liabilities with respect to each other hereunder,
except for the Indemnification Obligations. Further, if Seller acquires
knowledge of any fact(s) rendering any of the foregoing representations and
warranties false at any time prior to Closing, Seller shall promptly notify
Buyer in writing of such fact(s).
13. Buyer's Representations and Warranties. Buyer represents and
warrants to Seller that:
a. Buyer is a corporation duly organized and validly existing pursuant
to the law of the jurisdiction of its incorporation.
b. Buyer is authorized and empowered to enter into this Agreement and
perform all of its obligations under this Agreement.
c. No consent or approval of any third party (including without
limitation, any Government) is or was required to execute and deliver
this Agreement or consummate this transaction.
d. Upon the signing and delivery of this Agreement, it will be legally
binding upon Buyer in accordance with all of its provisions, except
as may be limited by bankruptcy, moratorium, insolvency or other
laws generally affecting creditors' rights.
e. The person signing this Agreement on behalf of Buyer has been duly
authorized to sign and deliver this Agreement on behalf of Buyer.
f. Buyer has not committed any act or permitted any action to be taken
which would materially adversely affect its ability to perform all
of its obligations under this Agreement.
g. The execution and delivery of this Agreement by Buyer and Buyer's
performance of its obligations under this Agreement shall not
conflict with any Law or any contract or other agreement to which
Buyer is a party or otherwise bound.
14. Remedies on Default; Treatment of Binder Deposit.
a. Buyer's Default. In the event that the terms and conditions of this
Agreement have been satisfied and Buyer refuses or is unable to
settle on this Agreement within the time limits herein set forth,
Seller, as Seller's sole and exclusive remedy, shall be entitled to
declare this Agreement canceled, and the Binder Deposit shall be
paid over to Seller as full liquidated damages. The amount
identified in this Paragraph 14.a as liquidated damages has been
agreed upon by Seller and Buyer after due deliberation and
discussion, and the same constitutes good faith estimates of the
damages of the Seller, the Seller's actual damages being difficult,
if not impossible, to ascertain. Upon the delivery of the Binder
Deposit to Seller, the Parties shall have no further rights,
obligations or liabilities with respect to each other hereunder.
b. Seller's Default. In the event that Seller is unable to convey title
to the Property or to deliver or comply with any other item herein
required of Seller at Closing or to otherwise perform pursuant to
the terms of this Agreement, Buyer shall have the right and option,
as Buyer's sole and exclusive remedy, to either (i) immediately
terminate this Agreement upon written notice to Seller and receive
back the full amount of the Binder Deposit, or (ii) demand and
compel by legal proceedings, using diligent and good faith efforts,
the remedy of specific performance, including, without limitation,
the immediate conveyance of the Property by Seller; provided,
however, that
(i) Buyer has furnished ten (10) days prior written notice
to Seller of its intent and election to seek specific
enforcement of this Agreement;
(ii) Buyer is not in material default under this Agreement;
and
(iii) any such suit for specific performance must be filed
within sixty (60) days after the scheduled Closing
Date or any extensions thereto which have been agreed
upon by Buyer and Seller.
(iv) Notwithstanding anything to the contrary contained
herein, if Buyer seeks specific performance under this
Agreement, Buyer agrees to accept the Property in
accordance with the provisions of this Agreement.
In the event Buyer elects to pursue specific
performance upon Seller's default, Seller agrees to
reimburse Buyer for all reasonable costs incurred by
Buyer in obtaining specific performance, including
without limitation, reasonable attorneys' fees.
c. Notice and Cure. Notwithstanding anything contained herein to the
contrary, each party shall be entitled to written notice of default
from the other once prior to Closing and four (4) days within which
to cure such default, but in no event shall Closing be delayed by
either Buyer or Seller beyond 11:00 a.m. EST on March 31, 1997.
15. Brokerage. Other than Dickinson, Logan, Todd & Barber, Inc. and BNP
Management, Inc. (collectively, the "Broker"), Seller and Buyer represent and
warrant each to the other that they have not dealt with any broker in connection
with this transaction. Except for the Broker, whose compensation shall be the
exclusive obligation of Seller, each Party agrees to indemnify and save the
other harmless from and against any and all claims, suits, liabilities, costs,
judgments and expenses, including reasonable attorneys' fees, for brokerage
commissions resulting from or arising out of its actions in connection with the
purchase and sale contemplated hereby.
16. Survival of Provisions. All covenants, representations, warranties,
obligations and agreements set forth in this Agreement shall survive the Closing
for a period of three (3) months.
17. Assignment of Buyer's Interest. Seller and Buyer understand and
agree that this Agreement is personal to Buyer and that Buyer may not, without
Seller's prior written consent (which consent Seller may withhold or deny in
Seller's sole discretion), assign Buyer's right, title and interest in and to
this Agreement at any time to any party.
18. Closing Adjustments and Apportionments. All of the items of income
and expense mentioned in this Paragraph 18 shall be apportioned or adjusted
between Seller and Buyer. All apportionments and adjustments shall be made as of
12 a.m. on the Closing Date, except those items which are not susceptible of
determination on the Closing Date on which this Paragraph 18 expressly provides
are to be determined on a subsequent date, which shall be apportioned or
adjusted after Closing, but computed as of 12 a.m. on the Closing Date. To the
extent that the apportionments and adjustments at the Closing are not based upon
final figures or there are any errors or omissions in the calculation or
determination thereof, promptly after notice (and no later than thirty (30) days
after notice) of such final figures or errors or omissions, the Parties shall
readjust or reapportion and make the payment required as a result thereof.
a. Rents. There shall be an adjustment to the funds Buyer is obligated
to deliver at Closing, based on a proration as of 12:00 a.m. of the Closing Date
on a per diem basis for rents ("Rents") which have been collected by Seller
under Leases, and without limitation, other payments payable by tenants,
licensees, concessionaires, and other persons using or occupying the Property or
any part thereof, for or in connection with such use or occupancy not including,
however, any security deposits held by Seller pursuant to the Leases; provided,
however, any installments of assessments for sewer, sidewalk or paving
improvements on the Property payable after Closing shall be the exclusive
responsibility of Buyer. Any of the Rents applicable to any period of time on or
prior to the Closing Date which are due and payable by the Tenants, but which
have not been collected by the Seller on or prior to the Closing Date, and which
are paid after the Closing Date (the "Arrears") shall be first applied to the
current month's rent due, then to delinquent rents for any period occurring from
and after the Closing Date, and then paid to Seller, and if the Arrears are
received by Buyer, Buyer shall pay the Arrears to Seller after collection by
Buyer in accordance with the above described distribution plan. Notwithstanding
anything contained herein to the contrary, Seller shall retain the right to
independently pursue the collection of any Arrears; provided, however, Buyer
shall not be obligated to evict or otherwise pursue summary proceedings against
any such tenant or join in any of the Seller's collection proceedings.
b. Utilities. To the extent not payable by Tenants, the actual or
estimated charges for utilities accrued and payable by Seller, provided Buyer is
required by law or elects to assume Seller's account. Deposits for utilities
(the "Utility Deposits"), plus any interest on the Utility Deposits to which
Seller is or will be entitled, held by the provider of the utilities and which
are freely transferable to Buyer, shall at the election of the Buyer, be
assigned by Seller to Buyer and Buyer shall pay Seller the full amount thereof
at Closing, in addition to the Purchase Price. Seller shall retain the right to
obtain a refund of any Utility Deposits which are not required to be assigned to
Buyer and Buyer will cooperate with Seller in obtaining any refund. With respect
to water, sewer, electric and gas charges, Seller shall make reasonable efforts
to obtain a reading of the meter or other consumption measuring device as of the
Closing Date. If the Seller is unable to obtain such a reading Seller shall
furnish a reading as of a date not more than ten (10) days prior to the Closing
Date and the unknown charges shall be apportioned on the basis of an estimate
computed by utilizing such reading and the most recent bill from the utility
provider.
c. Contracts. Prepaid charges, payments and accrued charges under the
Contracts.
d. Taxes. Ad valorem taxes on the basis of the most recent available tax
bill shall be apportioned at Closing, provided, however, in the event that the
tax bill for the tax year in which the Closing Date occurs is not available at
Closing and the Parties prorate on the basis of the prior tax year's bill, Taxes
shall be reprorated after Closing between the Parties outside of escrow when the
bill for the tax year in which the Closing Date occurs is available. The Party
who is determined to owe any additional amount as a result of such reproration
shall promptly pay such amount to the other Party. Buyer shall receive at
Closing a credit to the Purchase Price in the amount of $7,197.00 which
represents the currently outstanding Known Assessments.
e. Permits. Permit or license fees to the extent transferred and
government inspection fees, if any.
f. Security Deposits. Buyer shall receive a credit against the funds due
at Closing, in an amount equal to the sum of the Security Deposits and interest
thereon, if payable to tenants under state or local law, if any, which Seller is
holding pursuant to the Leases as reflected on the Rent Roll.
g. Customary Items. Any other items of income and expense not
specifically mentioned in this Paragraph 18 which are customarily apportioned in
real property transactions of the character contemplated by this Agreement.
19. Memorandum of Agreement. Neither party shall be entitled to record
this Agreement or any memorandum thereof in any land record office where land
records (e.g., conveyance and encumbrance instruments) relating to the Property
are customarily recorded.
20. Notices. Any notices, requests, or other communications required or
permitted to be given hereunder shall be in writing and shall be either (i)
delivered by hand, (ii) mailed by United States registered mail, return receipt
requested, postage prepaid, (iii) sent by a reputable, national overnight
delivery service (e.q., Federal Express, Airborne, etc.) or (iv) sent by
facsimile (with the original being sent by one of the other permitted means or
by regular United States mail) and addressed to each party at the applicable
address set forth herein. Any such notice, request, or other communication shall
be considered given or delivered, as the case may be, on the date of hand
delivery (if delivered by hand), on the fifth (5th) day following deposit in the
United States mail (if sent by United States registered mail), on the next
business day following deposit with an overnight delivery service with
instructions to deliver on the next day or on the next business day (if sent by
overnight delivery service), or on the day sent by facsimile (if sent by
facsimile, provided the original is sent by one of the other permitted means as
provided herein in this Paragraph 20 or by regular United States mail). However,
the time period within which a response to any notice or request must be given,
if any, shall commence to run from the date of actual receipt of such notice,
request, or other communication by the addressee thereof. Rejection or other
refusal to accept or inability to deliver because of a changed address of which
no notice was given shall be deemed to be receipt of the notice, request, or
other communication. By giving at least five (5) days prior written notice
thereof, any party hereto may, from time to time and at any time, change its
mailing address hereunder.
Seller: Paces Arbor Apartments Limited Partnership
Paces Forest Apartments Limited Partnership
c/o Boddie Investment Company
P. O. Box 1908
Rocky Mount, N.C. 27802-1908
Attention: Douglas E. Anderson
Telephone: (919) 937-2000
Facsimile: (919) 937-2978
With a copy to: Kennedy Covington Lobdell & Hickman,
L.L.P.
100 North Tryon Street, Suite 4200
Charlotte,North Carolina 28202-4006
(704) 331-7400
Attention: E. Allen Prichard, Esq.
Telephone: (704) 331-7497
Facsimile: (704) 331-7598
Buyer: Cornerstone Realty Group, Inc.
306 E. Main Street
Richmond, Virginia 23219
Attention: Mr. Gus Remppies
Telephone: (804) 782-9302
Facsimile: (804) ----------
With a copy to: Harry S. Taubenfeld, Esq.
Zuckerbrod & Taubenfeld
575 Chestnut Street
Post Office Box 488
Cedarhurst, New York 11516
Telephone: (516) 374-3490
Facsimile: (516) ------------
Ted Oliver, Esq.
Manning, Fulton & Skinner
500 UCB Plaza
3605 Glenwood Avenue
Raleigh, North Carolina 27612
Telephone: (919) --------------
Facsimile: (919) 781-0811
21. Miscellaneous.
a. The term "Effective Date," as used in this Agreement, shall be deemed to
refer to the date a fully executed original of this Agreement is delivered
to each party hereto as mutually agreed upon by Buyer and Seller, or an
agent thereof, and the Effective Date shall be inserted as the date of this
Agreement in the introductory paragraph of this Agreement.
b. Buyer and Seller acknowledge and agree that except as otherwise provided
herein, the Property is being conveyed in its "AS-IS" condition.
c. This Agreement constitutes the entire agreement between the parties hereto
with respect to the transaction contemplated herein; and it is understood
and agreed that all undertakings, negotiations, representations, promises,
inducements and agreements heretofore had between these parties are merged
herein. This Agreement may not be changed orally, but only by an agreement
in writing signed by both Buyer and Seller; and no waiver of any of the
provisions in this Agreement shall be valid unless in writing and signed by
the party against whom such waiver is sought to be enforced.
d. The provisions of this Agreement shall inure to the benefit of, and shall be
binding upon, the parties hereto and their respective heirs and permitted
successors and assigns, as may be applicable.
e. Except as otherwise expressly set forth herein, TIME IS OF THE ESSENCE. In
addition, if the final day of any period of time set out in any provision of
this Agreement, including, without limitation, the date of Closing and the
Investigation Period, falls on a Saturday, Sunday or Federal holiday then in
such case, such period shall be deemed extended to the next day which is not
a Saturday, Sunday or Federal holiday.
f. No presumption shall be created in favor of or against Seller or Buyer with
respect to the interpretation of any term or provision of this Agreement due
to the fact that this Agreement was prepared by or on behalf of one of said
parties.
g. Words of any gender used in this Agreement shall be held and construed to
include any other gender, and words in the singular number shall be held to
include the plural and vice versa, unless the context requires otherwise.
h. The captions used in connection with the paragraphs of this Agreement are
for reference and convenience only and shall not be deemed to construe or
limit the meaning of the language contained in this Agreement or be used in
interpreting the terms and provisions of this Agreement.
i. Whenever any statement, representation or warranty is made in this Agreement
"to the best of Seller's knowledge" is limited "to the knowledge of Seller"
or is similarly limited, such statement, representation or warranty shall be
deemed made hereunder based solely upon the actual knowledge, information and
belief of Douglas E. Anderson, Vice President of Boddie Investment Company,
corporate general partner of Seller, without independent investigation or any
duty (actual or constructive) to investigate any set of facts or to be aware
of any legal or other requirements. Furthermore, in no event shall the
knowledge of any non-employee agents of Seller or any affiliated company be
attributed to Seller relative to any statement, representation or warranty
made by Seller in this Agreement.
j. This Agreement may be executed in two or more counterparts and shall be
deemed to have become effective when and only when one or more of such
counterparts shall have been signed by or on behalf of each of the parties
hereto (although it shall not be necessary that any single counterpart be
signed by or on behalf of each of the Parties hereto, and all such
counterparts shall be deemed to constitute but one and the same instrument),
and shall have been delivered by each of the Parties to the other.
k. When anything is described or referred to in this Agreement in general terms
and one or more examples or components of what has been described or referred
to generally is associated with that description (whether or not following
the word "including"), the examples or components shall be deemed
illustrative only and shall not be construed as limiting the generality of
the description or reference in any way.
l. If any provision of this Agreement is held to be illegal, invalid or
unenforceable under present or future laws, such provision shall be fully
severable; this Agreement shall be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part of this
Agreement; and the remaining provisions of this Agreement shall remain in
full force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance from this Agreement. Furthermore,
in lieu of such illegal, invalid or unenforceable provision, there shall be
added automatically as a part of this Agreement a provision as similar in
terms to such illegal, invalid or unenforceable provision as may be possible
and be legal, valid or enforceable.
m. This Agreement is intended to be performed in the State in which the Property
is located and shall be construed and enforced in accordance with the laws of
said State.
n. Each Party hereto represents and warrants to the other party that the
execution of this Agreement and any other documents required or necessary to
be executed pursuant to the provisions hereof are valid, binding obligations
and are enforceable in accordance with their terms.
o. The exhibits set forth below and attached to this Agreement are hereby
incorporated by reference in their entirety with the same force and effect as
if they were set forth at length in this Agreement.
Exhibit A - Legal Description
Exhibit B - Deed
Exhibit C - Lease Assignment
Exhibit D - Rent Roll
Exhibit E - Bill of Sale
Exhibit F - Contract Assignment
Exhibit G - FIRPTA Affidavit
Exhibit H - Contracts
Exhibit I - Representation Letter
Exhibit J - City Notice
p. The Parties shall at any time, and from time to time on and after the Closing
Date, upon the request of the other Party, do, execute, acknowledge and
deliver all such further acts, deeds, assignments and other instruments as
may be reasonably required for the consummation of this transaction.
q. Buyer shall not contact any of Seller's non-management employees or any
Tenants until this Agreement has been fully executed by both Buyer and
Seller, and such contact shall be subject to the following limitations: (i)
Buyer shall not disclose the terms of this Agreement or discuss the contents
of any materials pertaining to the Property with any party other than Buyer's
officers, directors, employees, agents, advisors, consultants, investors,
attorneys and representatives of Buyer's lender, each of whom agrees to
maintain the confidentiality thereof, and (ii) no public announcement of this
Agreement or the closing thereof shall be made prior to the Closing Date.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by persons duly empowered to bind the parties to perform their
respective obligations hereunder the day and year first above written.
"BUYER"
CORNERSTONE REALTY GROUP, INC.
[SEAL]
/s/ Stanley J. Olander, Jr.
By:-------------------------------
Its: S.V. President
"SELLER"
PACES ARBOR APARTMENTS LIMITED
PARTNERSHIP [SEAL]
By: Residential Equity Portfolio
Limited Partnership, General
Partner [SEAL]
By: Boddie Investment Company,
Corporate General Partner
/s/ Douglas E. Anderson
By: -------------------------------
Vice President
PACES FOREST APARTMENTS LIMITED
PARTNERSHIP [SEAL]
By: Residential Equity Portfolio
Limited Partnership, General
Partner [SEAL]
By: Boddie Investment Company,
Corporate General Partner
/s/ Douglas E. Anderson
By:--------------------------------
Vice President