Exhibit 10.1
FIRST MODIFICATION TO PURCHASE CONTRACT
This Modification to Purchase Contract ("Modification") is made and
entered into this 17th day of April 1997 between Cornerstone Realty Group, Inc.
("Purchaser") and Summit Properties Partnership, L.P. d/b/a Summit Properties
Partnership, Limited Partnership ("Seller").
WHEREAS, Purchaser and Seller entered into an Agreement of Sale dated
the 17th day of April 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.
2. Par. 7.1, Closing, is hereby deleted and replaced with the following:
"Closing will be held no later than thirty (30) days after the
completion of the Inspection Period at such place and at such time as the
parties may agree. In the event that Seller cannot transfer title on the date
set forth herein, solely as a result of the failure of the current mortgage
holder to timely permit such transfer, then Purchaser shall have the option as
its sole remedy to either extend the closing date or terminate this Agreement
and Seller shall return the deposit to the Purchaser."
3. Par. 7.2(H) is hereby amended to add to the existing paragraph the
following:
"provided, the right to use the name "Summit" and any logos, trade
marks, service marks or brochures or marketing information containing any of the
foregoing shall not be included within the Property and will not be transferred
to Purchaser. Purchaser covenants and agrees not to use in any manner the name
"Summit"; provided, however, Seller shall provide Purchaser the period expiring
thirty (30) days following Closing within which to remove any existing signage
bearing the name "Summit" from the Property and to provide for the replacement
of brochures and marketing information bearing the name "Summit" with those
prepared by Purchaser which shall not bear the name "Summit". If any
signage, brochures, marketing information or otherwise bearing the name "Summit"
shall not have been removed or remain in use following the expiration of such
thirty (30) day period, Seller shall be permitted to enter upon the Property
following prior notice (but without unreasonable disruption to the business of
Purchaser thereon or to tenants of the Property) to remove such signage,
brochures, marketing information or otherwise bearing the name "Summit".
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/ S. J. Olander
---------------------
Name: S. J. Olander
Its: Senior Vice President
SUMMIT PROPERTIES PARTNERSHIP, L.P.
d/b/a SUMMIT PROPERTIES PARTNERSHIP,
LIMITED PARTNERSHIP
By: SUMMIT PROPERTIES REAL ESTATE INC.
By: /s/ Michael G. Malone
---------------------
Name: Michael G. Malone
Its: Vice President
PURCHASE CONTRACT
THIS AGREEMENT made and entered into this 17th day of April 1997,
between CORNERSTONE REALTY GROUP INC. or its nominee, (hereinafter called
"Purchaser") and SUMMIT PROPERTIES PARTNERSHIP, L.P., a Delaware limited
partnership, d/b/a SUMMIT PROPERTIES PARTNERSHIP, 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 SUMMIT CHARLESTON APARTMENTS
located in CHARLOTTE, NC, with all buildings and improvements located thereon,
as more particularly described in the attached legal description in Exhibit A
including, but not limited to 214 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).
ARTICLE II
PAYMENT OF PURCHASE PRICE
2.1 Purchase Price. The total purchase price shall be NINE MILLION FOUR
HUNDRED SEVENTY FIVE THOUSAND ($9,475,000) DOLLARS as evidenced by cash or cash
equivalent at closing.
2.2 Deposit. ONE HUNDRED THOUSAND ($100,000) DOLLARS payable as follows:
(i) FIFTY THOUSAND ($50,000) DOLLARS upon the execution of this
Agreement by both parties, and
(ii) FIFTY THOUSAND ($50,000) DOLLARS at the end of the
"Inspection Period" described in Article VI below.
Said ONE HUNDRED THOUSAND ($100,000) DOLLARS deposit shall be placed in escrow
with TitleCompany of North Carolina or its authorized agent as an earnest money
deposit which may be credited against the purchase price or applied as per
Article XI below.
ARTICLE III
TITLE MATTERS
3.1 Marketable Title. (A) Seller, shall convey good and marketable title
by Special Warranty Deed, subject only to general taxes for the current year not
yet due and payable and utility easements and other matters of record which do
not interfere with the present use of the Property, or which are not objected to
by Purchaser pursuant to Section 3.2.
(B) Title shall be free from any and all liens or mortgages and
Seller shall be responsible for any prepayment penalties necessary to deliver
such free title.
3.2 Title Defects; Election to Cure. Seller shall furnish to Purchaser a
commitment for Title Insurance, (the "Commitment"). If title is not marketable,
except as stated above in the preceding paragraph, Purchaser shall give written
notice of any defects in title to Seller's counsel within the earlier of the end
of the Inspection Period or fifteen (15) days after Purchaser's receipt of the
Commitment which report shall include copies of backup documents relating to any
title exceptions, a current survey, a flood zone certification letter and a
Surveyor's Certification letter. Seller may, at its option, elect whether to
cure said defects or by written notice to Purchaser indicate its intention not
to cure. The Commitment shall be furnished without cost to Purchaser, except and
unless Purchaser obtains a policy.
3.3 Election Not to Cure Defects. Should Seller elect not to cure title
defects, this Agreement, at Purchaser's option, shall be void; each party shall
thereupon be released from all obligations hereunder; and all deposits shall be
immediately returned to Purchaser.
3.4 Notwithstanding anything to the contrary set forth herein, Purchaser
shall be required to object to any matters or conditions relating to the
Property, including, without limitation, those matters or conditions described
in Section 3.2, 6.1(A), 6.1(F), 6.1(G) and 6.2, on or prior to the period which
expires thirty (30) days from the date of this Agreement (the "Inspection
Period") or such right, and any right of Purchaser to terminate hereunder with
respect to such matters or conditions existing as of the expiration of the
Inspection Period shall be deemed waived.
ARTICLE IV
PRORATIONS
4.1 Income and Expense Allocations. The following shall be prorated to
the day of the closing: rents and other income from the Property; operating
expenses (on such service contracts and other obligations as Purchaser may agree
to assume);
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and general and real property taxes and personal and business property taxes, if
any, for the year of closing (based on the most recent assessment and the most
recent levy).
4.2 Closing Costs. Purchaser and Seller shall pay their customary share
of all taxes, recording fees, if any, imposed on the Deed, or any other
documents executed in connection with the transfer of the Property. Purchaser
agrees to pay cost of title insurance, including search and examination fees,
and the cost of its inspections, audit, reports, surveys and other due diligence
review. Seller shall pay any prepayment penalty charged by the holders of any
existing notes.
4.3 Allocation of Rents. Rents collected by Seller prior to closing
shall be prorated as agreed in 4.1 above. Purchaser shall apply rents received
after Closing first to payment of the current rent due to Purchaser, then to
delinquent rents due to Purchaser, and last to rents due to Seller as of the
Closing but uncollected prior to settlement. Purchaser agrees to use its best
efforts in good faith to collect the amount of any rental arrears from tenants
and Purchaser agrees to remit promptly to Seller any such arrears actually paid
by such tenants to Purchaser. Seller shall retain the right to commence legal
action against a tenant for any delinquent rent apportioned to the Seller.
4.4 Prior Lease Concessions. Seller shall pay to Purchaser, in a lump
sum at closing, all future monetary concessions which Seller has given to
tenants under leases existing at the time of closing.
ARTICLE V
POSSESSION OF THE PROPERTY
5.1 Possession. Possession of the Property shall be delivered to
Purchaser at closing, subject to the rights of the tenants under existing leases
and rental agreements.
ARTICLE VI
CONDITIONS PRECEDENT TO CLOSING
6.1 Conditions Precedent. Purchaser's obligation to purchase shall be
subject to and contingent upon the satisfaction of the following conditions
precedent:
(A) Receipt by Purchaser of an engineering report of building and
site conditions, satisfactory to Purchaser in its sole discretion, said report
to include in part, a description of any hazardous waste sites, hazardous wastes
and/or hazardous materials affecting the property. Purchaser may during the
Inspection Period review the reports set forth herein and exercise its right to
reject the Property based thereon or the right hereunder shall be deemed waived.
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(B) The receipt by Purchaser of Seller documents described in 7.2
below.
(C) On the condition that Sellers representations and warranties
described in Article VIII below remain true and correct.
(D) On the condition that there have been no material or adverse
changes to the Property or leases.
(E) Seller acknowledges that Purchaser is a public entity and that
it is required to furnish financial statements to the Securities and Exchange
Commission in connection with this acquisition. Seller agrees to make the
information available for Purchaser to audit the last 12 months of operation of
the Property so that a report can be generated that is in compliance with
accounting Regulation S-X of the Securities and Exchange Commission.
(F) Survey which shall show no encroachments onto the Land from
any adjacent property, no encroachments by or from the Land onto adjacent
property and no violation of or encroachments upon any recorded building lines,
restrictions or easements affecting the Property. If the Survey discloses any
such encroachment or violation, Seller shall have thirty (30) days from the date
of Purchaser's objections prior to the end of the Inspection Period as to any
such matters disclosed on the Survey (with a commensurate extension of the
closing date) to have the Title Insurer issue its endorsement insuring against
damage caused by such encroachment or violation and to provide evidence thereof
to Purchaser, and if Seller fails to or is unable to have the same insured
against within such thirty (30) day period, Purchaser may elect, on or before
the closing date, to (i) terminate this Agreement (in which case the Earnest
Money shall be returned to Purchaser) and neither party shall have any further
liability or obligation to the other hereunder, other than any indeminification
obligations set forth herein, or (ii) accept the property subject to any such
encroachment or violation.
(G) Evidence satisfactory to Purchaser 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 of closing
will be connected pursuant to valid permits, and are and at the time of closing
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.
6.2 Inspection. This Agreement shall be further subject to and
contingent upon Purchaser's satisfactory inspection as follows herein below.
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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 insurance policies applicable to the Property to include loss runs
for the last five (5) years; Plans and Specifications for the Property, service
contracts, Certificates of Occupancy, to the extent reasonably available; a copy
of the title policy and most recent survey for the Property. A copy of any
environmental or engineering reports on the property. All documents delivered by
Seller shall be certified as being actual records of the Seller or reports that
were received in the due course of business and relied upon.
6.2.2 Inspection of Books and Records; Access. Upon receipt by Purchaser
of all documents requested in the paragraph above, Purchaser, its employees,
agents and contractors shall be permitted to enter upon the Property subject to
the rights of the tenants during normal business hours for the purpose of making
physical inspections thereof, including but not limited to roofs, heating,
cooling, electrical and plumbing systems, swimming pool, appliances, and
structural elements of the buildings. Upon the conclusion of the Inspection
Period this contract shall be deemed to be a firm agreement of purchase and sale
binding the parties hereto, except as it may be terminated by other provisions
and conditions contained herein. It is agreed that unless the parties
specifically extend any dates herein, this Paragraph is subject to the terms and
conditions of Paragraph 3.4.
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 obligation shall survive closing or
the termination of this Agreement.
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, other than any indemnification obligations set forth
herein, and all deposits shall be returned to Purchaser.
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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; provided,
however, Purchaser and Seller agree that "rent ready" shall be determined based
on the general operating condition of the unit and habitability thereof and not
as to the quality or age of fixtures or finish. All apartment units vacant or
vacated at least five (5) days prior to closing shall be in a "rent ready"
condition (as defined above), at the time of closing, containing, but not
limited to the following amenities, i.e., carpet, refrigerator, range, garbage
disposal, heating, plumbing and electrical systems, to the extent the same are
provided by Seller in such unit or units as part of Seller's standard rent
package. However, for any units vacated prior to closing for less than five (5)
days, which are not in a "rent ready" condition, Seller shall give to Purchaser
an allowance in the amount of $200 per Unit, which is to compensate for cleaning
and painting. In the event that there is additional damage (carpet needs
replacement and/or missing equipment), to any Units vacated prior to closing for
less than five (5) days, the parties shall agree to a proper compensation as to
the damage to such Units and Purchaser shall be entitled to a credit against the
Purchase Price in the amount of the agreed upon compensation at closing.
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 expiration of the
Inspection Period. If Seller fails to make reasonable efforts to conserve the
property, Purchaser shall have the option of waiving such requirement, in
writing, and proceeding to closing, or Purchaser may void this Agreement and
obtain a prompt return of its deposit.
ARTICLE VII
CLOSING
7.1 Closing. Closing will be held no later than thirty (30) days after
the completion of the Inspection Period at such place and at such time as the
parties may agree. In the event that Seller cannot transfer title on the date
set forth herein, Purchaser shall have the option to extend the closing date or
terminate this Agreement and Seller shall return the deposit to the Purchaser.
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:
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(A) Bill of Sale, with warranty of title transferring the personal
property (as shown in Schedule B) to Purchaser free of all liens, charges and
encumbrances.
(B) Originals or copies of all signed leases and rental agreements
in effect with tenants of the Property.
(C) All security deposits made by such tenants. Seller will give
the tenants the required notice of such transfer in compliance with the laws of
North Carolina.
(D) An affidavit of Seller in such form as will cause the Title
Company to omit from the title insurance policy the exclusion relating to
unrecorded mechanic's and materialmen's liens.
(E) A rent roll certified by Seller to be true and correct as of
the date of closing showing the name of, and the amount of monthly rental
payable, by each tenant of the Property, the apartment occupied by the tenant,
the date to which rent has been paid, any advance payment of rent, and the
amount of any escrow, or security deposit of tenant.
(F) An affidavit of Seller that to the best of its information and
belief there are, on the date of closing, no unsatisfied judgments, creditor's
claims, tax liens, or pending bankruptcies involving Seller.
(G) Seller shall provide to Purchaser's satisfaction, a report
from a licensed extermination contractor, who is regularly engaged in the
business of pest control, that all buildings are free from any termite or other
wood-boring insect infestation. Said report shall be dated within 30 days from
the Effective Date of this Agreement bearing the contractor's name, contractors
license number, the signature of the party authorized to sign for the contractor
and the date of the inspection. Should damage exist, Seller shall, subject to
the following sentence, proceed to have any corrective work completed prior to
closing. Seller's obligation to undertake any corrective work shall be limited
to its expenditure of out-of-pocket costs and expenses not exceeding $5,000,
and, if such costs are reasonably estimated by the contractor preparing the
report to exceed $5,000, Seller shall not be obligated to undertake any such
corrective work and Purchaser may, if Seller elects not to undertake such work,
terminate this Agreement or proceed to settlement and have $5,000 deducted from
Seller's proceeds; provided, however, if Seller undertakes such work,
Purchaser's offset right shall be reduced by the actual out of-pocket costs and
expenses paid or incurred by Seller up to and including $5,000. If Purchaser
elects to close, Purchaser shall be responsible for all costs related to such
corrective work in excess of $5,000. Seller shall promptly return Purchaser's
deposit upon such termination.
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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, and (3) the
existing Property telephone number.
(I) Assignments of all warranties and guarantees to the extent
such are still in effect and are assignable and provide Purchaser with copies of
all such warranties and guarantees without limitation for all appliances,
dishwashers, disposals, refrigerators, heating and air conditioning units,
washers and dryers.
(J) Consent of the Seller's authorized officer to the sale of the
Property and any other approvals required under Seller's articles or by-laws,
which may affect Seller's ability to convey marketable title.
(K) Satisfactory evidence of the power and authority of Seller to
enter into and consummate this agreement, including but not limited to:
(i) An opinion of Seller's counsel, in a form satisfactory to
Purchaser, stating that:
(a) The individual(s) executing the deed and related
documents are duly authorized to do all such acts as are necessary to consummate
this sale, without further consent of any other party.
(b) That the partner or officer can bind the Partnership
or Corporation.
(L) 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.
(M) A notice letter to all the residents of the apartment complex
as to change of ownership in the form prepared by the Purchaser.
(N) 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.
(O) A representation letter as normally required by auditors for a
public company in the form attached hereto as Exhibit C. This clause shall
survive closing for one year.
7.3 Purchaser's Deliveries. At closing and contemporaneously with the
Seller's compliance with the provisions of Section 7.2, Purchaser shall.
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(A) Pay to Seller the cash portion of the purchase price, adjusted
for the prorations herein provided for in Article IV.
(B) Execute and deliver an assumption of obligations under leases,
securities, any contracts which may be accepted by the Purchaser and any other
obligations specifically set forth herein.
(C) Deliver to the Seller a resolution of the Purchaser that:
(i) This Agreement has been duly authorized, 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) Purchaser shall procure all the documents necessary for the
transfer of the telephone, electric, water and sewer, and gas utilities, as may
be required by the utility, for execution at closing. Seller agrees to cooperate
with the Purchaser in order to accomplish said transfer.
ARTICLE VIII
SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
8.1 Representations of the Parties. Seller warrants (which warranties
shall not survive settlement unless designated to the contrary) that as of the
date of closing hereof:
(A) That Seller, is the owner in fee simple of the Property and
has the power to convey same.
(B) That Seller is not subject to any other agreements or
arrangements, with the exception of those contained in any existing mortgage
documents which would prevent Seller from selling the Property to Purchaser.
This warranty shall survive for one year following closing.
(C) All necessary action has been taken by Seller to authorize
the execution of this Agreement and the performance of the obligations
contemplated hereunder, which are not excluded elsewhere in existing mortgage
documents. This warranty shall survive for one year following closing.
(D) Seller has no actual knowledge and has not been advised in
writing that it is in default under any lease, rental agreement service or
equipment contract, or mortgage or
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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 received no written notice that any part of the
Property or the operation of the Property, is in violation or may violate any
governmental statute, regulation, ordinance or building code or of any private
restriction, that any governmental authority requires any work to be done on or
affecting the Property, or that any governmental authority has expressed an
intent to condemn or to make special improvements for the benefit of the
Property or any part thereof. This warranty shall survive for one year following
closing.
(G) That Seller is not a "foreign person" within the meaning of
the Internal Revenue Code, 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 permit the
modification, extension or cancellation of any tenant lease (except in
accordance with the terms of such lease) or any dealing with any tenant other
than the ordinary course of managing the Property, without the prior written
consent of Purchaser. If the leases of any tenants expire before thirty (30)
days after the date of closing, Seller shall, up to the date of closing and
without cost to the Purchaser, continue its normal course of operation with
respect to causing tenants to be obtained for apartments which are unrented.
(I) If, after the date of this Agreement and on or prior to
closing, Seller first obtains knowledge or first receives notice of a fact,
matter or circumstance, which fact, matter or circumstance is not attributable
to any action or inaction of Seller or its agents or representatives, which
causes any of Seller's representations or warranties made in this Section to be
inaccurate, Seller shall submit written notice thereof to Purchaser (a
"Disclosure Memorandum") specifying in reasonable detail the fact, matter or
circumstance causing such inaccuracy. Seller agrees to disclose any such
inaccuracy in good faith as soon as possible and Seller shall not knowingly fail
to promptly disclose to Purchaser any such inaccuracy. In the event that Seller
shall deliver to Purchaser a Disclosure Memorandum pursuant to this Section,
then Purchaser shall have the option by written notice to Seller within seven
(7) days following Purchaser's receipt of such
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Disclosure Memorandum (and closing shall be deemed to be postponed to
accommodate such seven (7) day period) to (i) elect to terminate this Agreement,
or (ii) elect not to terminate this Agreement in which case Seller shall be
relieved of any representation, warranty or indemnification obligation with
respect to such fact, matter or circumstance giving rise to such inaccuracy,
subject to any mutual agreement with respect to such fact, matter of
circumstance. For purposes of this Section 8.1, the term "to Seller's knowledge"
or like terms shall not include any knowledge imputed to Seller and shall mean
only the actual knowledge of Raymond V. Jones and Michael G. Malone
(collectively, "Seller's Representatives"). For purposes of this Section 8.1 any
reference to Seller's receipt of notice shall not include any notice imputed to
Seller and shall mean only actual written notice received by either or both of
Seller's Representatives.
8.2 Continuation of Representations, Warranties and Covenants to the
Date of Closing. If each of the warranties set forth in this section does not
remain true up to and including the time of closing as to any material matters,
this Agreement, at Purchaser's election, shall be terminated, and Purchaser
shall be entitled to the return of the Deposit, or Purchaser may elect to close
the sale and waive failure of the warranties.
8.3 Breach of Representations, Warranties and Covenants. Notwithstanding
the provisions of 8.2 above, Seller shall correct, where possible, and if breach
is as a result of Purchaser's action or failure to act where reasonably
required, and Purchaser elects to terminate this Agreement, then in that event
Seller shall indemnify Purchaser for all reasonable costs incurred (up to a
maximum of $15,000) as a result of the failure of any of Seller's
representations, warranties or covenants contained herein to remain true as of
the date of closing.
ARTICLE IX
CONDEMNATION; RISK OF LOSS
9.1 Property Damage. If any time prior to closing any portion of the
Property is destroyed or damaged by fire or any other casualty whatsoever,
Seller shall give notice thereof to Purchaser within one (1) business day after
Seller becomes aware of such casualty, but in any event prior to Closing. The
rights and obligations of the parties by reason of such destruction or damage
shall be as follows:
(a) If the cost of repair and restoration of such destruction or
damage shall be $200,000 or less, Seller shall repair such damage as promptly as
is reasonably possible, restoring the damaged Property at least to its condition
immediately prior to such damage; and in such event, Purchaser may elect to
defer closing until such repair is made to Purchaser's reasonable satisfaction
or accept the proceeds of Seller's insurance plus
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deductible and loss of rent reimbursement for the period after closing.
(b) If the cost of repair and restoration of such destruction or
damage, as agreed to by Purchaser and Seller, shall exceed $200,000, Purchaser
may elect to terminate this Agreement; and if Purchaser does not elect to
terminate this Agreement, closing shall occur as scheduled, whereupon Seller
shall pay to Purchaser, at closing, all insurance proceeds payable for such
damage, plus an amount equal to any deductible and reimbursement for loss of
rent for the period after closing and the sale shall be closed without Seller's
repairing such damage. In the event Purchaser elects to terminate this
Agreement, this Agreement shall be rendered null and void, the deposit shall be
returned, and the parties shall have no further obligations or liabilities
hereunder, other than any indemnification obligations set forth herein.
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 less than TWO HUNDRED THOUSAND
($200,000) DOLLARS, or any part of the building or more than 5% of the parking
area or where reduction of parking shall violate the current zoning
requirements, Purchaser may elect to either (a) terminate this Agreement, in
which event the Deposit shall be immediately returned to Purchaser and all other
rights and obligations of the parties hereunder shall terminate immediately,
other than any indemnification obligations set forth herein, or (b) to waive its
right to terminate this Agreement and proceed to closing, in which event all
proceeds, awards and other payments arising out of such condemnation or sale
(actual or threatened) shall be paid to the Purchaser at closing, if such
payment has been received or Seller shall assign to Purchaser the rights to such
payments.
9.3 Risk of Loss. Prior to closing, all risks of loss or damage by every
casualty shall be borne by the Seller.
ARTICLE X
BROKER'S COMMISSION
10.1 Commission. Seller agrees to pay a brokerage fee to DICKINSON,
LOGAN, TODD & BARBER, INC., pursuant to a separate agreement between Seller and
Brokers. Said brokerage fee 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.
Purchaser shall not be obligated for any brokerage fees to any broker, and
Seller agrees to hold Purchaser harmless in connection with such fees. Seller
and Purchaser
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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, as its sole remedy, either (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.
11.3 Purchaser's Default. Upon Purchaser's default, this Agreement shall
be terminated and both parties released from all obligations hereunder, and the
deposit shall be retained by the Seller as liquidated damages. Seller shall have
no other remedy against Purchaser in the event of Purchaser's default.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Entire Agreement. This Agreement sets forth the entire
understanding between the parties; it supersedes all previous agreements and
representations which are deemed merged herein and may not be modified except in
writing.
12.2 Assignment. Purchaser may assign this Agreement without the consent
of Seller.
12.3 Severability. If any provision, sentence, phrase or word of this
Agreement or the application thereof to any person or circumstance shall be held
invalid, the remainder of this Agreement or the application of such provision,
sentence, phrase, or word to persons or circumstances, other than those as to
which it is held invalid, shall remain in full force and effect.
12.4 Binding Effect. The parties to the Agreement
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mutually agree that it shall be binding upon and inure to the benefit of their
respective heirs, representatives, successors in interest and assigns.
12.5 Controlling Law. It is the intent of the parties hereto that all
questions with respect to the construction of this Agreement and the rights and
liabilities of the parties shall be determined in accordance with the provisions
of the laws of the State set forth in Par. 1.1.
12.6 Counterparts. To facilitate execution, this Agreement may be
executed in as many counterparts as may be required. It shall not be necessary
that the signature on behalf of both parties hereto appear in each counterpart
hereof, and it shall be sufficient that the signature on behalf of both parties
hereto appear on one or more such counterparts. All counterparts shall
collectively constitute a single contract.
12.7 Incorporation by Reference. All of the Exhibits referred to herein
and/or attached hereto shall be deemed to constitute a part of the Agreement.
12.8 Headings. The headings of the Articles and sections hereof are
inserted for convenience only and shall not be deemed to constitute a part of
the Agreement.
12.9 Construction of Contract. Each party hereto have reviewed and
revised (or requested revisions of) this Agreement, and therefore the normal
rule of construction that any ambiguities are to be resolved against a
particular party shall not be applicable in the construction and interpretation
of this Contract or any amendments or exhibits hereto.
ARTICLE XIII
NOTICE
13.1 Notice. All notices required or permitted to be given under this
Agreement shall be in writing and shall be sent or delivered to the address set
forth below (or such other address as may be hereafter specified in writing):
To Seller: SUMMIT PROPERTIES PARTNERSHIP, L.P.
212 S. Tryon Street - Suite 500
Charlotte, NC 28281
Attention: Michael G. Malone, Esq.
Fax: (704) 333-8340
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With a copy to
Seller's Attorneys: KENNEDY COVINGTON LOBDELL
HICKMAN, L.L.P.
NationsBank Corporate Center
Suite 4200
100 North Tryon Street
Charlotte, NC 28202-4006
Attention: David H. Jones, Esq.
Fax: (704) 331-7598
To Purchaser: Mr. Gus Remppies
Cornerstone Realty Group, Inc.
306 E. Main Street
Richmond, VA 23219
Fax: (804) 782-9302
With a copy to
Purchaser's Attorneys: Harry S. Taubenfeld, Esq.
Zuckerbrod & Taubenfeld
575 Chestnut St., P.O. Box 488
Cedarhurst, NY 11516
Fax: (516) 374-3490
-and-
Ted Oliver, Esq.
Manning, Fulton & Skinner
500 UCB Plaza
3605 Glenwood Avenue
Raleigh, NC 27612
Fax: (919) 781-0811
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.
ARTICLE XIV
LIKE-KIND EXCHANGE
14.1 Sction 1031 Exchange. Purchaser agrees to cooperate with Seller in
effecting a Section 1031 exchange, including executing documents required by the
exchange trustee or intermediary, provided, however, such cooperation shall be
at no cost or liability to Purchaser.
14.2 Hold Harmless. At closing, Seller will deliver to Purchaser an
agreement to hold the Purchaser harmless as to any claims as a result of the
Like-Kind Exchange set forth in Paragraph
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14.1.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused this
Agreement to be executed this day and date first written above.
SELLER:
SUMMIT PROPERTIES PARTNERSHIP, L.P.,
d/b/a SUMMIT PROPERTIES PARTNERSHIP, LIMITED PARTNERSHIP
By: SUMMIT PROPERTIES INC.,
d/b/a SUMMIT PROPERTIES REAL ESTATE INC.
By: /s/ Michael G. Malone
---------------------
Its: Vice President
PURCHASER:
CORNERSTONE REALTY GROUP, INC.
By: /s/ S. J. Olander
-----------------
Its: Vice President
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