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EXHIBIT 2.1
REAL ESTATE SALE AGREEMENT
BETWEEN
SUMMIT PROPERTIES PARTNERSHIP, L.P., A DELAWARE LIMITED
PARTNERSHIP,
AND
HOLLOW CREEK, L.L.C.
A NORTH CAROLINA LIMITED LIABILITY COMPANY,
FOR
SUMMIT GREEN APARTMENTS
CHARLOTTE, NORTH CAROLINA
SUMMIT HOLLOW APARTMENTS - PHASE I
CHARLOTTE, NORTH CAROLINA
SUMMIT CREEK APARTMENTS
CHARLOTTE, NORTH CAROLINA
SUMMIT STATION APARTMENTS
TAMPA, FLORIDA
SUMMIT HILL APARTMENTS - PHASE I
DURHAM COUNTY, NORTH CAROLINA
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TABLE OF CONTENTS
Page
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1. Purchase and Sale.....................................................1
2. Purchase Price; Earnest Money.........................................3
3. Closing...............................................................3
4. Conditions to Closing.................................................6
5. Evidence of Title and Survey..........................................7
6. Seller's Representations and Warranties...............................8
7. Purchaser's Representations and Warranties...........................12
8. Seller's Covenants...................................................12
9. Prorations...........................................................13
10. Transfer Taxes; Title Charges........................................15
11. Risk of Loss.........................................................15
12. Condemnation.........................................................15
13. Default..............................................................16
14. Notice...............................................................17
15. Time of Essence......................................................18
16. Purchaser's Termination of Agreement.................................18
17. Governing Law........................................................18
18. Counterparts.........................................................18
19. Captions.............................................................18
20. Assignment...........................................................19
21. Binding Effect.......................................................19
22. Modifications; Waiver................................................19
23. Entire Agreement.....................................................19
24. Partial Invalidity...................................................19
25. Allocation of Purchase Price.........................................19
26. Broker...............................................................19
27. Confidentiality......................................................20
28. Recording............................................................20
29. Hart-Scott-Rodino Filing.............................................20
30. Termination of Contracts.............................................20
31. Counterparts.........................................................21
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EXHIBIT INDEX
EXHIBIT REFERENCE CONTENT
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EXHIBIT "A" Legal Description
EXHIBIT "B" Inventory of Personal Property
EXHIBIT "C" Rent Rolls
EXHIBIT "D" Service Contracts
EXHIBIT "E" Assignment and Assumption of Intangible Property and Other
Rights
EXHIBIT "F" Escrow Trust Instructions
EXHIBIT "G" Permitted Encumbrances
EXHIBIT "H" Warranty Bill of Sale
EXHIBIT "I" Assignment and Assumption of Leases and Security Earnest Moneys
EXHIBIT "J" Seller's Disclosure Documentation
EXHIBIT "K" Form of Property Management Agreement
EXHIBIT "L" Schedule of Current Insurance
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REAL ESTATE SALE AGREEMENT
THIS AGREEMENT is entered into as of this 20th day of November, 1998,
between SUMMIT PROPERTIES PARTNERSHIP, L.P., a Delaware limited partnership
("SELLER"), and HOLLOW CREEK, L.L.C., a North Carolina limited liability company
("PURCHASER").
1. PURCHASE AND SALE. In consideration of their mutual covenants
set forth in this Agreement, Seller agrees to sell to Purchaser, and Purchaser
agrees to purchase from Seller, for the Purchase Price (as hereinafter defined)
and on the terms and conditions set forth herein, the following:
(a) All of the five (5) parcels of land described on EXHIBIT "A"
attached hereto and made a part hereof, including but not limited to the
apartment complexes commonly known individually as (i) "Summit Green Apartments"
in Charlotte, North Carolina, containing 300 apartment units, on-site parking
spaces, an office/clubhouse, tennis courts, a swimming pool and related
facilities ("SUMMIT GREEN APARTMENTS"); (ii) "Summit Hollow Apartments - Phase
I" in Charlotte, North Carolina, containing 232 apartment units, on-site parking
spaces, an office/clubhouse, tennis courts, a swimming pool and related
facilities ("SUMMIT HOLLOW APARTMENTS"); (iii) "Summit Creek Apartments" in
Charlotte, North Carolina, containing 260 apartment units, on-site parking
spaces, an office/clubhouse, tennis courts, a swimming pool and related
facilities ("SUMMIT CREEK APARTMENTS"); (iv) "Summit Station Apartments" in
Tampa, Florida, containing 230 apartment units, on-site parking spaces, an
office/clubhouse, tennis courts, a swimming pool and related facilities ("SUMMIT
STATION APARTMENTS"); and (v) "Summit Hill Apartments - Phase I" in Durham
County, North Carolina, containing 411 apartment units, on-site parking spaces,
an office/clubhouse, tennis courts, a swimming pool and related facilities
("SUMMIT HILL APARTMENTS"); together with all right, title and interest of
Seller in and to all open or proposed highways, streets, roads, avenues, alleys,
easements, strips, gores and rights-of-way in, on, across, in front of,
contiguous to, abutting or adjoining the land (Summit Green Apartments, Summit
Hollow Apartments, Summit Creek Apartments, Summit Station Apartments, and
Summit Hill Apartments are hereinafter referred to individually as a "COMPLEX"
and collectively as the "REAL ESTATE").
(b) All structures, buildings, and improvements located on the
Real Estate ("IMPROVEMENTS").
(c) All furniture, fixtures, equipment, appliances and other items
of personal property owned by Seller located on or in the Real Estate or
Improvements and used in connection with the operation and maintenance of the
Real Estate or Improvements including by way of example and not by way of
limitation, carpeting, light fixtures, heating and air conditioning units and
equipment, water heaters and equipment, shrubbery, office equipment and
maintenance equipment, and including, but not limited to, the property described
in the inventory attached hereto as EXHIBIT "B" ("PERSONAL PROPERTY").
(d) Seller's interest in all leases, licenses and other agreements
with respect to equipment and other personal property used by Seller in
connection with the operation of the Premises ("EQUIPMENT LEASES"), provided
that such Equipment Leases are assignable by Seller
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without the consent of any other party thereto and without the payment by Seller
of any fees, costs or expenses.
(e) Seller's interest in all leases, licenses, and other
agreements to occupy the Real Estate and/or the Improvements, or any portion
thereof, as amended from time to time, in effect on the Closing Date (as
hereinafter defined) (all such leases, licenses and other agreements being
sometimes collectively referred to herein as "LEASES"), including, but not
limited to, the leases listed on EXHIBIT "C" attached hereto, as well as all
security, pet and other deposits, if any, made by tenants under the Leases.
(f) All intangible property owned by Seller and used in connection
with the Real Estate, Improvements and Personal Property, but without any
warranty as to Seller's rights to use or transfer ownership therein and only to
the extent assignable without the consent of any other party and without the
payment by Seller of any fees, costs or expenses, including all trademarks and
trade names used in connection with any part of the Real Estate and Improvements
specifically including the names "Summit Green Apartments", "Summit Hollow
Apartments", "Summit Creek Apartments", "Summit Station Apartments", and "Summit
Hill Apartments", and all plans and specifications, if any, in the possession of
Seller or Seller's property manager, Summit Management Company ("PROPERTY
MANAGER"), which were prepared in connection with the construction of any of the
Improvements, all hereditaments, privileges, tenements and appurtenances
belonging to the Real Estate, all operating manuals, licenses, permits and
warranties now in effect with respect to the Real Estate, Improvements and
Personal Property, all written contracts listed on EXHIBIT "D" attached hereto
and made a part hereof ("SERVICE CONTRACTS") in effect at Closing (as
hereinafter defined) and which are not terminated as hereinafter provided, in
any way relating to the Premises (as hereinafter defined), which will survive
the Closing ("INTANGIBLE PROPERTY"), all of which shall be transferred to
Purchaser pursuant to an assignment in the form attached hereto as EXHIBIT "E"
("ASSIGNMENT AND ASSUMPTION OF INTANGIBLE PROPERTY AND OTHER RIGHTS").
The Real Estate, Improvements, Personal Property, Equipment Leases,
Leases and Intangible Property are sometimes collectively referred to herein as
"PREMISES".
Within five (5) business days after the Effective Date, Seller shall
deliver to Purchaser (i) the plans and specifications, if any, in the possession
of Seller or Property Manager, for the improvements in all of the Complex; (ii)
copies of all leases shown on EXHIBIT "C"; provided, however, that in lieu of
delivering copies of such Leases, Seller may elect to make the originals
available on site at each Complex for review and copy, at Seller's expense, by
Purchaser and provided further, that in the event an original lease cannot be
located by Seller, it may substitute a copy thereof certified by Seller to be
true, correct and complete in all respects; (iii) copies of certificates of
occupancy for each building within each Complex in the possession of Seller or
Property Manager; and (iv) copies of all title insurance policies and surveys in
Seller's possession.
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2. PURCHASE PRICE; EARNEST MONEY. The purchase price for the
Premises shall be SIXTY-EIGHT MILLION SIX HUNDRED TWENTY-FIVE THOUSAND AND
NO/100 DOLLARS ($68,625,000) ("PURCHASE PRICE"). The Purchase Price shall be
payable as follows:
(a) FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($500,000) ("EARNEST
MONEY") shall be tendered to Seller as earnest money in the form of Purchaser's
cashier's check or certified check made payable jointly to Seller and the Title
Company (as hereinafter defined) or wire transfer to Title Company's escrow
account, within three (3) business days after the date of complete execution of
this Agreement by Seller and Purchaser ("EFFECTIVE DATE"). Unless otherwise
provided by this Agreement, the Earnest Money shall be applied to the Purchase
Price at Closing. Upon execution of this Agreement by Seller, the Earnest Money
shall be deposited with and held by Title Insurance Company of North Carolina,
Inc. at its offices located at 521 East Morehead Street, Suite 140, Charlotte,
North Carolina ("TITLE COMPANY") in accordance with Escrow Instructions
substantially in the form attached hereto as EXHIBIT "F" with such changes as
may be necessary to conform to the particulars of this Agreement, executed by
counsel for Seller and Purchaser ("ESCROW INSTRUCTIONS"). Except in the event of
termination of or failure to close this transaction by reason of Purchaser's
default, any interest earned on the Earnest Money shall belong to Purchaser and
may, at Purchaser's option, be applied to the Purchase Price at Closing. Except
in the event of the failure to close this transaction by reason of a default of
Seller or unless Purchaser is otherwise expressly entitled to the return of all
or a portion of the Earnest Money in accordance with the provisions of this
Agreement, in which case all or any such portion of the Earnest Money shall be
returned to Purchaser in accordance with the applicable terms hereof, the
Earnest Money shall be nonrefundable and shall be paid to Seller as set forth
herein.
(b) Not later than 10:00 a.m., EST, on the Closing Date (as
hereinafter defined), Purchaser shall deposit with the Title Company, in
immediately available funds, the sum necessary, along with the Earnest Money, to
make the total consideration paid to Seller at Closing equal to the Purchase
Price, plus or minus prorations as hereinafter provided.
3. CLOSING.
(a) The consummation of the purchase and sale of the Premises
("CLOSING") shall take place at the offices of Robinson, Bradshaw & Hinson, P.A.
in Charlotte, North Carolina, on a date mutually agreed upon by the parties, but
not later than December 31, 1998, unless such date is extended as expressly
provided in this Agreement or by written agreement of the parties. The date on
which the Closing occurs shall be the date referred to in this Agreement as the
"CLOSING DATE".
(b) The Purchase Price shall be paid and all documents necessary
for the consummation of this transaction shall be executed and delivered on the
Closing Date, and Seller shall deliver possession of the Premises to Purchaser
on the Closing Date.
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(c) At or prior to Closing, Seller shall execute, where necessary,
and deliver to Purchaser the following documents:
(1) Special Warranty Deeds (with respect to the Real
Estate located in the State of North Carolina, on the most current
North Carolina Bar Association form) in recordable form properly
executed on behalf of Seller, conveying to Purchaser the Real Estate
and Improvements in good and marketable fee simple title, free and
clear of all liens, charges and encumbrances, subject only to the lien
of ad valorem property taxes to be pro rated at Closing as provided
below, the title exceptions set forth on EXHIBIT "G" attached hereto
and incorporated herein by reference, and such other matters as may be
accepted by Buyer in writing (the "PERMITTED ENCUMBRANCES");
(2) A Warranty Bill of Sale in the form attached hereto
as EXHIBIT "H" executed by Seller, conveying to Purchaser the Personal
Property free and clear of all liens, charges and encumbrances except
the Permitted Encumbrances;
(3) A duly executed and acknowledged Assignment and
Assumption of Leases and Security Earnest Moneys assigning and
conveying to Purchaser the landlord's interest in, to and under the
Leases, and providing that Seller shall indemnify Purchaser against any
and all leasing commissions and similar compensation, claims, actions,
charges, expenses (including, without limitation, attorneys' fees and
court costs) and liabilities relating to the leases and arising prior
to the Closing Date, and containing an assumption by Purchaser of
Seller's obligations under the Leases accruing from and after the
Closing Date (including any obligations relating to security deposits),
all in the form attached hereto as EXHIBIT "I";
(4) Executed written notices of the sale, in form and
substance approved by Purchaser, addressed and directed to each tenant
of a Complex, giving each tenant notice of this sale and directing each
tenant to pay all rent due under the terms of its tenancy to such
person and at such place as Purchaser shall direct.
(5) Originals of all Leases listed on EXHIBIT "C";
provided, however, that in lieu of delivering the originals of such
Leases at Closing, Seller may elect to make the originals available on
site at each Complex and provided further, that in the event an
original lease cannot be located by Seller, it may substitute a copy
thereof certified by Seller to be true, correct and complete in all
respects. If any changes are made in the leases described on EXHIBIT
"C" between the Effective Date and the Closing Date, Seller shall
deliver to Purchaser a certified and updated rent roll on the Closing
Date, which shall be substituted as EXHIBIT "C". The security and pet
deposits, if any, listed on EXHIBIT "C" shall be sufficient to cover
the landlord's liability therefor under the leases assigned. Seller
shall indemnify, hold harmless and defend Purchaser against any damages
Purchaser may suffer as a result of any inaccuracy in the amount of
security and pet deposits as reflected in EXHIBIT "C", as amended at
closing. Purchaser shall receive a check at closing in the amount of
the security and pet deposits listed on EXHIBIT "C", as amended at
closing.
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(6) An affidavit sworn by an officer of Seller to the
effect that Seller is not a "foreign person" as that term is defined in
Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended,
which affidavit shall be in such form as may be prescribed by federal
regulations;
(7) A duly executed and acknowledged Assignment and
Assumption of Intangible Property and Other Rights in the form attached
hereto as EXHIBIT "E" assigning and conveying to Purchaser the
Intangible Property and providing that Seller shall indemnify Purchaser
against any claims, actions, charges, expenses (including, without
limitation, attorneys' fees and court costs) and liabilities relating
to the Intangible Property and arising prior to the Closing Date
containing an assumption by Purchaser of Seller's obligations arising
out of Seller's ownership of the Intangible Property from and after the
Closing Date;
(8) Seller's Disclosure Documentation set forth on
EXHIBIT "J" attached hereto ("SELLER'S DISCLOSURE DOCUMENTATION");
(9) Counterparts of a closing statement;
(10) All documents and instruments reasonably required by
the Title Company to issue a title policy or policies on the Real
Estate and Improvements in accordance with SECTION 5 of this Agreement;
(11) An affidavit indicating that, as of the Closing Date,
there are no outstanding unsatisfied judgments, tax liens which would
constitute a lien against any of the Premises or bankruptcies against
Seller; and that there are no other unrecorded interests in the Real
Estate of any kind other than the leases listed on EXHIBIT "C".
(12) An affidavit to the title insurance company
sufficient for Purchaser to obtain title insurance without exception
for mechanic's or materialmen's liens.
(13) All other documents affecting title to and possession
of the Premises and necessary to transfer or assign the same to
Purchaser, free and clear of all liens, charges and encumbrances except
the Permitted Encumbrances.
(14) An opinion by counsel for Seller in form and
substance satisfactory to Purchaser that all of the above-described
instruments have been duly and validly authorized, executed and
delivered by Seller and its duly authorized officers, members, managers
or partners.
(15) A statement certifying that all of the
representations and warranties contained in SECTION 6 of this Agreement
are true and correct as of the Closing Date, which statement shall
survive closing.
(16) A termite inspection report prepared at the sole cost
and expense of Seller by an inspector reasonably acceptable to
Purchaser certifying that all buildings in the Complex are free from
termite or other wood-destroying organism damage or infestation as of
the Closing Date.
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(d) At or prior to Closing, Purchaser shall execute, where
necessary, and deliver to Seller the following documents:
(1) An Assignment and Assumption Agreement, pursuant to
which Purchaser shall assume the obligations of Seller under the leases
and tenancies listed on EXHIBIT "C" from and after the Closing Date and
shall indemnify Seller against any and all leasing commissions and
similar compensation, claims, actions, charges, expenses (including,
without limitation, attorney's fees and court costs) and liabilities
relating to the leases or the security or pet deposits assigned by
Seller to Purchaser, and arising in connection with acts or omissions
occurring after the Closing Date.
(2) An Assignment and Assumption Agreement, pursuant to
which Purchaser shall assume the obligations of Seller under the
service and other contracts set forth on EXHIBIT "D" that are being
assumed by Purchaser, and shall indemnify Seller against any and all
claims, actions, charges, expenses (including, without limitation,
attorney's fees and court costs) and liabilities relating to the
contracts arising in connection with acts or omissions occurring after
the Closing Date.
(3) The Property Management Agreement whereby Purchaser
hires the Property Manager to be the Property Manager for the Premises,
such Property Management Agreement to be in the form and upon the terms
attached hereto as "EXHIBIT K".
4. CONDITIONS TO CLOSING. In addition to all other conditions to
the completion of the transaction described in this Agreement, Seller and
Purchaser agree that the Closing is subject to satisfaction, approval or waiver
by Purchaser of the following conditions:
(a) On or before 5:00 p.m., EST, on November 15, 1998 ("DUE
DILIGENCE PERIOD"), inspection and approval of Seller's Disclosure
Documentation, which shall be or has been made available by Seller to Purchaser.
Purchaser acknowledges that the information supplied to or made available to
Purchaser by Seller as provided in this SECTION 4(a) shall not be released or
disclosed to any other parties unless and until this transaction has closed
without the prior written consent of Seller. Seller shall not withhold its
consent to disclosure of such information to Purchaser's attorney identified in
SECTION 14 of this Agreement, provided such attorney agrees in writing to keep
such information confidential. In the event that this transaction is not closed
for any reason, then Purchaser shall refrain, and shall cause its agents,
representatives and accountants to refrain, from disclosing all such information
to any other party.
If any of the conditions set forth in this SECTION 4(A) are not
satisfied or waived in writing by Purchaser before the expiration of the Due
Diligence Period, Purchaser shall notify Seller and the Title Company in writing
of the termination of this Agreement ("PURCHASER'S TERMINATION NOTICE") prior to
the expiration of the Due Diligence Period. Upon receipt of Purchaser's
Termination Notice, the Earnest Money shall be immediately returned to Purchaser
by the Title Company, both Seller and Purchaser shall be released and discharged
from all further obligations under this Agreement, and neither Seller nor
Purchaser shall be subject to any claim by the other for damages of any kind. If
Purchaser's Termination Notice has not been served upon Seller and Title Company
prior to the expiration of the Due Diligence Period, all conditions in this
SECTION
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4(a) shall be deemed to have been satisfied or waived and Purchaser's
obligations to close shall be firm with respect to the conditions of this
SECTION 4(a).
(b) On or before 5:00 p.m., EST, on the last day of the Due
Diligence Period, inspection and approval, in Purchaser's sole and absolute
discretion, of the physical condition and use of the Premises, at Purchaser's
sole cost, including without limitation, the availability of access, utility
services, zoning, environmental risks, engineering and soil conditions. For the
purpose of conducting physical inspections, Seller agrees to provide Purchaser
and its authorized agents reasonable access to the Premises at all reasonable
times on business days during the Due Diligence Period upon at least twenty-four
(24) hours prior written notice to Seller, and Purchaser shall conduct such
inspections in a manner not disruptive to tenants or to the operation of the
Premises. Such notice shall identify whether Purchaser wishes to have the
Property Manager in attendance at such site visit and shall detail the scope of
the due diligence Purchaser intends to conduct during its access to the
Premises. Purchaser shall not enter the Premises or contact any tenants or
Property Manager without Seller's prior written consent. Purchaser hereby agrees
to indemnify Seller and to hold Seller, Seller's agents and employees and the
Property harmless from and against any and all losses, costs, damages, claims
and liabilities including, but not limited to, mechanics' and materialmen's
liens and attorneys' fees, arising out of or in connection with Purchaser's
access to or entry upon the Premises under this SECTION 4(B). Purchaser's
indemnity and hold harmless pursuant to this SECTION 4(B) shall survive the
termination or expiration of this Agreement by Closing or otherwise.
If any of the conditions set forth in this SECTION 4(B) are not
satisfied or waived in writing by Purchaser before the expiration of the Due
Diligence Period, Purchaser shall notify Seller and the Title Company in writing
of the termination of this Agreement ("PURCHASER'S SECOND TERMINATION NOTICE")
prior to the expiration of the Due Diligence Period. Upon receipt of Purchaser's
Second Termination Notice, the Earnest Money shall be immediately returned to
Purchaser by the Title Company, both Seller and Purchaser shall be released and
discharged from all further obligations under this Agreement, and neither Seller
nor Purchaser shall be subject to any claim by the other for damages of any
kind. If Purchaser's Second Termination Notice has not been served upon Seller
and Title Company prior to the expiration of the Due Diligence Period, all
conditions in this SECTION 4(B) shall be deemed to have been satisfied or waived
and Purchaser's obligations to close shall be firm with respect to the
conditions of this SECTION 4(B).
5. EVIDENCE OF TITLE AND SURVEY.
(a) Title Commitment. On or before the expiration of the Due
Diligence Period, Purchaser shall cause its attorney to examine the title to the
Real Estate and advise Seller in writing of any objections to that title (which
objection shall not include any Permitted Encumbrances). If objections to title
are made as provided in this SECTION 5(A), Seller shall make a good faith effort
to remedy the objection to the reasonable satisfaction of Purchaser and its
attorney within fourteen (14) days from the date of notice of any objection.
Notwithstanding any provision to the contrary, Purchaser shall not be obligated
to object to any title encumbrance that can be removed solely by the payment of
money, such as mortgages or liens, and such encumbrances shall be satisfied or
cancelled of record by Seller at Closing. In the event any objection is not so
cured or remedied within the fourteen (14) day period, the Purchaser, at its
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election, shall have the right to: (a) accept such title subject to the
objection; or (b) terminate this Agreement and receive the return of the Earnest
Money. In the event no such objections are made within the Due Diligence Period,
Purchaser shall have no right to raise objections to title which arise prior to
the date of its examination of title made within the Due Diligence Period.
However, if any additional title objection arises after Purchaser's examination
of title made during the Due Diligence Period and prior to Closing Date,
Purchaser shall have the same rights and elections with respect to that
subsequent objection that it had with respect to objections arising during its
examination of title made within the Due Diligence Period. If any such
additional title objection is a lien or encumbrance which may be removed by the
payment of a definite and ascertainable amount, Seller shall, at its election,
either pay same or post a bond to cover such payment, and upon such payment or
the posting of a bond, as the case may be, Purchaser shall proceed to purchase
the Premises.
(b) Survey. On or before 5:00 p.m., EST, on December 11, 1998
("SURVEY PERIOD"), Purchaser shall cause to be prepared an accurate survey of
the Real Estate and Improvements associated with each Complex certified by a
registered land surveyor in the state in which the Complex is located. Each
survey shall show the boundaries and the acreage, to the nearest 1000th of an
acre, of the Complex, the location of all easements, buildings, improvements
and/or encroachments, if any, located thereon, together with a legal description
of the Real Estate that is associated with the Complex. If the legal description
in any survey differs from the applicable legal description attached hereto,
then, in addition to the deed to be delivered by Seller at Closing, Seller will
execute in favor of Purchaser a non-warranty deed which uses the legal
description from Purchaser's new survey. Seller shall execute any reasonable
affidavit which is customarily required by the Title Company providing the
owner's title insurance policy referred to in this section to issue the policy
to Purchaser without any survey exception.
If any survey of a Complex reveals an encroachment, a title defect or
other physical condition of a material nature, including without limitation that
any of the Improvements are non-conforming structures under either the
applicable zoning regulations or the applicable building codes, that are not
"legally non-conforming," and that was not revealed in connection with the title
examination conducted by Purchaser pursuant to SECTION 5(A) of this Agreement or
the physical inspection of the Premises conducted by Purchaser pursuant to
SECTION 4(B) of this Agreement, Purchaser shall advise Seller in writing of any
survey objections prior to the expiration of the Survey Period. If objections to
survey are made as provided in this SECTION 5(B), Seller shall make a good faith
effort to remedy the survey objection to the reasonable satisfaction of
Purchaser and its attorney within fourteen (14) days from the date of notice of
any objection In the event any survey objection is not so cured or remedied
within the fourteen (14) day period, the Purchaser, at its election, shall have
the right to: (a) accept the Premises subject to the survey objection; or (b)
terminate this Agreement and receive the return of the Earnest Money.
6. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and
warrants that as of the date of this Agreement and as of the Closing Date:
(a) Seller has all requisite power and authority to execute this
Agreement, the closing documents listed in SECTION 3 of this Agreement and all
other documents required to be delivered by Seller, and to assume and perform
all of its obligations under this Agreement; the execution
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and delivery of this Agreement and the performance by Seller of its obligations
hereunder have been duly authorized by such action as may be required; the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereunder on the part of Seller do not and will not
violate the organizational documents of Seller and do not and will not conflict
with or result in the breach of any condition or provision of, or constitute a
default under, the terms of any contract, mortgage, lien, lease, agreement,
indenture, instrument or judgment to which Seller is a party or which affects
the Premises other than any "due-on-sale" or similar clause in a mortgage
instrument being satisfied at Closing;
(b) Seller is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware and is
duly qualified or licensed to do business and is in good standing in North
Carolina and Florida. Seller has full power and authority to carry on its
business as now conducted and to own or lease and to operate its properties and
assets now owned or leased and operated by it;
(c) Attached hereto as EXHIBIT "C" is a true, correct, and
complete rent roll for each Complex, identifying each apartment unit; the name
of each tenant; the monthly rent paid by each tenant, including any rent or
other monetary concessions made by Seller; any delinquency in the payment of
such rents; the term and expiration date of each lease; a statement of any
defaults existing under each Lease; the amounts and terms of each tenant's
security and pet deposits, if any; and a list of all vacancies. To the best of
Seller's knowledge, the Leases are in full force and effect, have been validly
executed and there have been no written or oral modifications, alterations or
amendments of or to the leases, except as set forth on EXHIBIT "C". There are no
leasing commissions payable with respect to any of the Leases other than
customary apartment finders fees which have been paid in full by Seller for all
Leases currently in effect or which will become in effect prior to Closing. To
the best of Seller's knowledge, Seller has fulfilled all of its duties and
obligations in connection with the Leases, and Seller is not in default in any
material respect under any of the terms and provisions of the Leases. Seller has
not received any written notice from any tenant under any of the Leases claiming
a default by the landlord under a Lease other than as described on EXHIBIT "C".
All Leases comply with the requirements of the laws of the state in which the
apartment unit is located, including without limitation, requirements applicable
to security deposits. There are no occupants of any Complex except those listed
on EXHIBIT "C";
(d) On the Closing Date, Seller will own all of the properties and
assets being conveyed by this Agreement, free and clear of all liens, charges
and encumbrances except the Permitted Encumbrances;
(e) On the Closing Date, there will be no liabilities which
encumber the Premises, no obligations, direct or contingent, relating to the
Premises, and no service, maintenance, property management, leasing or other
contracts affecting the Premises which will be in existence as of the Closing
Date, other than those contracts described on EXHIBIT "D", each of which may be
assumed by Purchaser and each of which is terminable on not less than thirty
(30) days' written notice;
(f) A complete schedule of the current insurance policies covering
"all-risk" property damage, rent loss, business interruption, workers'
compensation, general commercial liability
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and all other insurance maintained by Seller with respect to the Premises is
attached as EXHIBIT "L". Seller will cause all such insurance policies to be
maintained in full force and effect through the Closing Date, and will assist
Purchaser, at Purchaser's election, in making application prior to Closing to
keep such policies in force;
(g) Seller has received no notice of administrative agency action,
litigation, condemnation proceeding or proceeding of any kind pending against
Seller which relates to or affects the Premises, including any requests for
public dedication, nor does Seller know of any basis for any such action;
(h) To the best of Seller's knowledge, (i) the Premises does not
contain any "HAZARDOUS MATERIALS" (as defined below) in violation of applicable
"ENVIRONMENTAL LAWS" (as defined below), (ii) the Premises is not subject to
federal, state or local regulations or liability because of the presence of
stored, leaked, spilled or disposed petroleum products, waste materials or
debris, underground storage tanks, "PCB's" or PCB items (as defined in 40 C.F.R.
ss. 761.3), "asbestos" (as defined in 40 C.F.R. ss. 763.63), or the past or
present accumulation, treatment, storage, disposal, spillage or leakage of any
Hazardous Materials; (iii) no portion of the Real Estate is filled land, or is
classified as a wetland or tidal water, as those terms are defined in 33 C.F.R.
ss.328.3; and (iv) no condition exists on the Premises which is or may be
characterized by any federal, state or local government or agency as an actual
or potential threat or danger to public health or the environment. Seller
further represents and warrants to Purchaser that the Premises shall be
maintained through the Closing Date in the condition represented and warranted
above. On or after the Effective Date and prior to the Closing Date, Purchaser
may, at its election and at its expense, have the Property investigated by an
engineer for the presence or suspected presence of the substances referenced
above. As used in this SECTION 6, the term "HAZARDOUS MATERIALS" shall mean any
hazardous wastes, hazardous substances, hazardous materials, toxic substances,
hazardous air pollutants or toxic pollutants, as those terms are defined in
Environmental Laws, and the term "ENVIRONMENTAL LAWS" shall mean the Resource
Conservation and Recovery Act (42 U.S.C.A. ss.ss. 6901 et seq.), the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42
U.S.C.A. ss.ss. 9601 et seq.), the Hazardous Materials Transportation Act (49
U.S.C.A. ss.ss. 1801 et seq.), the Toxic Substances Control Act (15 U.S.C.A.
ss.ss. 2601 et seq.), the Clean Air Act (42 U.S.C.A. ss.ss. 7401 et seq.), and
the Clean Water Act (33 U.S.C.A. ss.ss. 1251 et seq.), or any amendments
thereto, or any regulations promulgated pursuant thereto, or any applicable
state or local law, regulation or ordinance relating to the foregoing matters;
(i) To the best of Seller's knowledge, all Improvements fully
conform with all applicable zoning regulations and building codes and
restrictions;
(j) To the best of Seller's knowledge, the Real Estate may be used
for the operation of an apartment complex without violating any federal, state,
local, or any other governmental building, zoning, health, safety, platting,
subdivision or other statute, ordinance or regulation, or any applicable private
restriction; and no notice of the violation of any of the same has been received
by Seller. Seller has obtained all licenses and permits necessary to operate
each Complex in the manner in which they are operated as of the Effective Date
except to the extent that failure to do so would not have a material adverse
effect on such operation;
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(k) To the best of Seller's knowledge, each Complex is currently
served by the public utility services sufficient for the safe and efficient
operation of such Complex. Seller will cooperate with Purchaser to assure that
those utility services will continue after the closing without action by or
expense to Purchaser, other than the payment of normal security deposits and the
bills for the period from and after the Closing Date;
(l) Seller has furnished Purchaser with accurate income and
expense statements of each Complex for calendar years 1996 and 1997, and for the
months of January through September of 1998. Since the date of the most recent
statement, no material changes have occurred which have adversely affected any
Complex;
(m) Seller has filed all sales, use or other excise tax returns
that it was required to file pertaining to the Premises and rents or other
income derived therefrom. Seller shall pay all sales and/or use taxes due on
rents and other revenues received and purchases pertaining to the Premises made
through the day before the Closing Date. Seller shall indemnify and hold
harmless Purchaser from and against, and reimburse Purchaser with respect to,
any and all claims, demands, causes of action, losses, damages, liabilities,
costs and expenses (including reasonable attorneys' fees and court costs)
asserted against or incurred by Purchaser by reason of or arising from any sales
and/or use taxes due on rents and other revenues received and purchases made
through the Closing Date or from a breach by Seller of any statutory provisions
relating to sales and use tax necessary for Purchaser to avoid transferee
liability for same. Purchaser shall, with respect to the Premises, indemnify and
hold harmless Seller from and against, and reimburse Seller with respect to, any
and all claims, demands, causes of action, losses, damages, liabilities, costs
and expenses (including reasonable attorneys' fees and court costs) asserted
against or incurred by Seller by reason of or arising from all sales and/or use
taxes due on rents and other revenues received and purchases made after Closing
Date;
(n) There are no taxes (existing or deferred), charges or
assessments of any nature or description arising out of the conduct of Seller's
business or the operation or ownership of the Premises, which would constitute a
lien against the Premises, that will be unpaid at the Closing Date, except for
the lien of ad valorem property taxes due for each Complex located in North
Carolina to be prorated and paid at Closing as provided below;
(o) On the Closing Date, Seller will have complied with all of its
obligations under this Agreement, unless such compliance has been waived in
writing by Purchaser, and all warranties made in this SECTION 6 shall be true
and correct on that date;
(p) To the best of Seller's knowledge, there are no legal actions
or proceedings pending or proceedings or threatened against the Premises which
are not covered by adequate insurance nor has Seller received any notices of any
violations of any zoning, land use, building codes or other statutes affecting
the use, occupancy and enjoyment of the Premises that have not been cured; and
(q) Seller has heretofore delivered to Purchaser true, complete,
and correct copies of the Service Contracts. Except as may be shown on EXHIBIT
"D", all of the Service Contracts are in full force and effect, Seller has not
sent or received any notices of default under the Service Contracts, and, to the
knowledge of Seller, there are no defaults or events which, with the
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passage of time or giving of notice, or both, could become a default under the
Service Contracts. All charges under the Service Contracts have been paid
according to the terms of the Service Contracts, except as may be shown on
EXHIBIT "D".
Seller hereby agrees that the truthfulness of each of the foregoing
representations and warranties and of all other representations and warranties
made in this Agreement as of the Effective Date and as of the Closing Date is a
condition precedent to the performance by Purchaser of its obligations under
this Agreement, and all of the foregoing representations and warranties shall be
deemed to be repeated at Closing. Upon the material breach by Seller of any
representation or warranty made in this SECTION 6, Purchaser, may, prior to the
Closing Date, terminate this Agreement and receive the return of the Earnest
Money. The foregoing shall be considered an exclusive remedy of Purchaser unless
the breach resulted from the intentional action of the Seller.
7. PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser
represents and warrants to Seller that Purchaser is a duly organized and validly
existing limited liability company under the laws of the State of North Carolina
and the execution and delivery of this Agreement and the transaction
contemplated hereby have been duly authorized by Purchaser.
8. SELLER'S COVENANTS. Between the date of the execution of this
Agreement and the Closing, Seller agrees to continue to maintain, operate and
manage the Premises in the same manner between the Effective Date and the
Closing Date as it currently is being managed and operated, making every
reasonable effort to do nothing which might damage the reputation of the
Premises or its relations with its tenants. Seller agrees to enter into no
material agreements or contracts and to incur no major expenses relating to the
Premises prior to the Closing Date except for material agreements and contracts
in replacement or extension of existing agreements and contracts and on terms
and provisions generally consistent with the existing contracts or current
market conditions and except for major expenses which are consistent with
existing operating or capital budgets for the Premises, without Purchaser's
prior written consent, which consent shall not be unreasonably withheld. Each
Complex shall be in the same condition on the Closing Date as on the Effective
Date, reasonable and ordinary wear and tear from normal use excepted.
Notwithstanding the foregoing, on the Closing Date, all apartments that have
been vacated at least five (5) business days prior to the Closing Date shall be
in rentable condition and prepared and ready for occupancy. As used in this
Agreement, the term "in rentable condition" shall mean that all mechanical,
electric and plumbing systems in that apartment unit are operational, and that
all decor items, such as paint, wall coverings and carpet, are in a clean and
presentable condition.
Purchaser and its representatives shall have the right from and after
the Effective Date to enter upon each Complex during normal business hours for
the purposes of examining the same and conducting such inspections, tests and
investigations of each Complex and the Premises as it may desire, so long as
Purchaser and its representatives do not unreasonably interfere with the
operation of the Premises. Purchaser agrees to indemnify and hold Seller
harmless from and against any liens, claims, actions, charges, damages, expenses
(including, without limitation, attorney's fees and court costs) and liabilities
incurred through the exercise by Purchaser of the privilege granted in the
preceding sentence.
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At all reasonable times prior to and after the Closing Date, Seller
shall give Purchaser, and its counsel, accountants and representatives, full
access to all books and records with respect to the ownership, management and
operation of the Premises, shall permit them to copy the same and shall furnish
Purchaser with all such information concerning the same as Purchaser may
reasonably request. Upon request by Purchaser (which such request will be made
not more frequently than monthly) after the Effective Date and prior to the
Closing Date, Seller shall furnish Purchaser for each Complex with a cash flow
statement for the prior month, an updated rent roll and a schedule of vacant
apartment units and the current asking rents for each vacant unit. All such
information shall be kept confidential by Purchaser and shall be returned to
Seller, with all copies thereof, if the sale of the Premises does not close.
Seller shall continue in its normal course of business to use its best
efforts to avoid having any tenant delinquent in the payment of rent or
otherwise in default under the terms of its lease on the Closing Date. Seller
shall not permit the acceptance of any prepayment of rent more than one month
beyond the Closing Date and shall not permit the modification, alteration,
amendment, extension, renewal, termination or cancellation of any lease (except
in accordance with the terms of any such lease), without the prior written
consent of Purchaser, which consent shall not be unreasonably withheld or
delayed in the case of a default by a tenant. If the leases of any tenants
expire before or within thirty (30) days after the Closing Date, Seller shall,
without cost or expense to Purchaser, up to the Closing Date, continue its
normal course of operations with respect to causing new leases to be obtained
with those tenants or causing new tenants to be obtained for those apartments;
and Seller shall, up to the Closing Date, continue its normal course of
operations with respect to causing tenants to be obtained for apartments which
are not rented on the Effective Date; provided, however, that all such leases
shall be drawn upon the form of lease presently used by Seller; shall be for a
term no longer than one (1) year; and shall include rents in amounts approved in
advance by Purchaser.
9. PRORATIONS. The following adjustments to the Purchase Price
paid hereunder shall be made between Seller and Purchaser:
(a) All real estate taxes, special assessments and personal
property taxes payable with respect to the Premises for the calendar or fiscal
year, as the case may be, in which the Closing Date occurs, accrued but to be
paid after the Closing Date, shall be prorated between Seller and Purchaser as
of the Closing Date. If the actual amount of taxes and assessments is not known
on the Closing Date, they shall be prorated on the basis of the amount of taxes
and assessments payable for 1997 and shall be adjusted between the parties when
the actual amount of taxes and assessments payable for 1998 is known to
Purchaser and Seller. If any special assessments exist or are levied on any
Complex prior to the Closing Date, Seller shall cause such assessments to be
paid in full at Closing. The ad valorem property taxes due for the each Complex
located in North Carolina shall be prorated between Seller and Purchaser and
paid as of the Closing Date. The provisions of this SECTION 9 shall survive
Closing.
(b) All income and expenses of the Premises shall be prorated on a
daily basis between Seller and Purchaser as of the Closing Date. Through the
Closing Date, Seller shall pay when due any payments of principal and interest
secured by any liens or encumbrances on any Complex. Seller shall be responsible
for all expenses of the Premises, and shall be entitled to all income from the
Premises, attributable to the period prior to the Closing Date. Seller agrees
that
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all expenses, charges, bills, or trade accounts maintained or incurred by Seller
or its agents in connection with the management or operation of the Premises or
otherwise accrued for the period prior to the Closing Date shall be paid in full
on the Closing Date; provided, however, that all such expenses, charges, bills,
or trade accounts which have accrued but have not yet been billed shall be paid
in full by Seller at the time the bills are received. Seller shall have sole
responsibility for the payment of all sales taxes, excise taxes, payroll taxes,
withholding taxes or other taxes collected or payable by Seller or its agents in
connection with the management or operation of the Premises for or during that
period. Seller shall indemnify Purchaser against and shall hold Purchaser
harmless from any costs, expenses, penalties or damages, including reasonable
attorneys' fees, which may result from any failure by Seller to pay or cause to
be paid any of the items described in this SECTION 9. Purchaser shall indemnify
Seller against and shall hold Seller harmless from any costs, expenses,
penalties or damages, including reasonable attorneys' fees, which may result
from the failure of Purchaser to pay or cause to be paid any of the items
described in this SECTION 9 that are attributable to the period after the
Closing Date.
Without limiting the generality of the foregoing, the following items
shall be adjusted as of the Closing Date:
(1) Rents and other charges received for the calendar
month in which the Closing Date occurs. Purchaser shall use its best
efforts to assist Seller in collecting all rents and other accounts
receivable that are outstanding as of the Closing Date. If Purchaser
receives any payment from a debtor under any such account, the payment
shall first be applied by Purchaser to rent or other payments due from
that debtor from and after the Closing Date and the excess, if any,
shall be applied to the account receivable.
(2) All other gross receipts, including, without
limitation, net revenue from vending machines and laundry facilities.
(3) Any premium of coverage for the policy year in which
the Closing Date occurs under any policy of hazard, liability, rent
loss, business interruption and/or worker's compensation insurance
covering the Premises, in the event Purchaser elects to purchase or
assume any such policy now in force and effect and is permitted to do
so. If Purchaser elects to cancel and replace any such policy, Seller
shall be entitled to any refund of any prepaid premiums.
(4) Water and utility charges and sanitary sewer taxes,
if any.
(5) Charges under service, management or other
agreements, if any, which remain in effect after the Closing Date.
(6) Other operating expenses not covered by any of the
above subsections.
(7) Immediately after Closing, Seller shall make
available at the offices of Property Manager, or on site, all
contracts, Leases and leasing correspondence, receipts
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for deposits, and unpaid bills which pertain to the Premises, together
with all advertising materials, booklets, and keys, if any, used in
the operation of the Premises other than those items delivered to
Purchaser on or before the Closing as provided for herein. The
foregoing shall not include the separate books, records,
correspondence and other documentation of Seller located at its
offices.
All prorations and adjustments under this SECTION 9 shall be made
against the cash sum otherwise payable by Purchaser to Seller pursuant to
SECTION 3 of this Agreement.
10. TRANSFER TAXES; TITLE CHARGES. Seller and Purchaser agree to
execute any real estate transfer declarations required by the state, county or
municipality in which the Real Estate is located. Seller shall pay the cost of
any state or county deed, documentary or transfer taxes. Purchaser shall pay the
cost of recording the instruments of conveyance, all mortgage registration
taxes, if any, the cost of any municipal transfer taxes, and all sales and
transfer taxes or other fees assessed by any governmental authority against the
Personal Property as the result of the sale and transfer of same as contemplated
hereby. If this transaction is terminated by Purchaser prior to the expiration
of the Due Diligence Period, Seller and Purchaser shall pay all escrow costs
billed by the Title Company on an equal basis. If this transaction is terminated
by either party on account of default by the other, the defaulting party shall
pay all escrow costs billed by the Title Company. If this transaction shall
close as provided in this Agreement, Closing escrow costs shall be divided
equally between Seller and Purchaser; provided, however, that Purchaser shall be
solely responsible for any escrow costs and other closing charges relating to
Purchaser's financing, if any. The obligations of Seller and Purchaser under
this SECTION 10 shall survive the Closing.
Each party shall pay its own attorneys' fees except as otherwise
provided in this Agreement.
11. RISK OF LOSS. If, prior to the Closing Date, any Complex or
any part thereof is damaged or destroyed by fire, the elements or any other
destructive force or cause to the extent that repairing such damage or
destruction is reasonably estimated to cost $250,000 per Complex or more, then,
within ten (10) days of any such damage or destruction, Seller shall give a
written notice to Purchaser specifying the insurance carrier's estimate of the
amount of insurance payable as the result of such damage or destruction. Within
ten (10) days after Purchaser has received the written notice described in the
preceding sentence, Purchaser may elect to terminate this Agreement by delivery
of written notice to Seller, in which case the Earnest Money and all interest,
if any, earned thereon shall be returned to Purchaser and this Agreement shall
be deemed null and void. If Purchaser elects to consummate the purchase despite
the damage or destruction, or if any lesser damage or destruction has occurred,
there shall be no reduction in or abatement of the Purchase Price except for an
amount equal to the deductible under Seller's insurance policy, and Seller shall
assign to Purchaser all of Seller's right, title and interest in and to all
insurance proceeds resulting from the damage or destruction.
12. CONDEMNATION. If, prior to the Closing Date, any judicial,
administrative, or other condemnation proceedings are instituted in which a
taking of any Complex is proposed which exceeds $250,000 per Complex in value,
including any consequential damages to the Complex, or which affects the zoning
of the Complex, renders it a non-conforming use, affects the income
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producing potential of the Complex, or materially affects access to or parking
available on the Real Estate associated with the Complex, then within five (5)
days of receipt by it of notice of the institution of any judicial,
administrative, or other condemnation proceedings involving the Complex, Seller
shall give a written notice to Purchaser. Within ten (10) days after Purchaser
has received the written notice described in the preceding sentence, Purchaser
may elect to terminate this Agreement by delivery of written notice to Seller,
in which case the Earnest Money and all interest, if any, earned thereon shall
be returned to Purchaser and this Agreement shall be deemed null and void. If
Purchaser elects to consummate the purchase despite the institution of
condemnation proceedings, or if it appears that the value of the proposed
taking, including any consequential damages to the Complex, shall total $250,000
per Complex or less, there shall be no reduction in or abatement of the Purchase
Price, and Seller shall assign to the Purchaser all of Seller's right, title,
and interest in and to any award or settlement made or to be made in the
condemnation proceedings.
13. DEFAULT. Upon the breach by Seller of any of the
representations and warranties contained in SECTION 6 of this Agreement, which
is discovered by Purchaser prior to the Closing Date, or the default by Seller
in the performance of any other obligation of Seller set forth in this
Agreement, Purchaser may, as its sole remedies available to it (except to the
extent otherwise provided in SECTION 6 of this Agreement): (a) terminate this
Agreement by delivery of written notice to Seller, in which event Purchaser
shall be entitled to the return of the Earnest Money and all interest, if any,
earned thereon; or (b) institute proceedings in any court of competent
jurisdiction to specifically enforce the performance by Seller of the terms of
this Agreement. Upon the breach by Seller of any representations and warranties
contained in SECTION 6 of this Agreement which is not discovered by Purchaser
until after the Closing Date, then Purchaser may exercise all remedies available
to it at law or equity including asserting an action for money damages as a
result of Seller's default; provided however, with respect to a breach of any
representation or warranty contained in subsection (c), (e), (f), (g), (h), (i),
(j), (k), (l), (m), (n), or (o), of SECTION 6 of this Agreement, Seller must
have delivered to Purchaser in writing, a notice of any such alleged breach
specifying in detail the nature of said alleged breach on or before the first
anniversary of the Closing Date and must file an appropriate complaint or other
proceeding attempting to seek remedies for such alleged breach on or before the
end of the fifteenth (15th) calendar month commencing after the Closing Date or
be forever barred from alleging any such breach or seeking any remedy resulting
therefrom.
If Purchaser defaults in the performance of any of its
obligations under this Agreement, Seller shall be entitled to receive and retain
the Earnest Money and all interest, if any, earned thereon, and to receive from
Purchaser copies of all surveys, inspections, evaluations and other reports on
each Complex prepared by or for Purchaser, as Seller's liquidated damages and
sole remedy for Purchaser's breach, and neither party shall have any other claim
against the other (except for Purchaser's breach of SECTION 28 of this
Agreement, in which event Seller will be entitled to exercise all remedies
available to it, at law or in equity). The parties agree that the Earnest Money
is a fair and reasonable measure of the damages to be suffered by Seller in the
event of such default and that the exact amount of Seller's damages is incapable
of ascertainment.
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14. NOTICE. All notices required or permitted hereunder shall be
in writing and shall be served on the parties at the following address:
If to Seller: Summit Properties Partnership, L.P.
212 South Tryon Street, Suite 500
Charlotte, North Carolina 28281
Attention: Mr. Douglas E. Brout
Telephone No.: (704) 334-9905
Facsimile No.: (704) 333-8340
With Copies to:
Summit Properties Partnership, L.P.
212 South Tryon Street, Suite 500
Charlotte, North Carolina 28281
Attention: Mr. Michael G. Malone, Esq.
Telephone No.: (704) 334-9905
Facsimile No.: (704) 334-4496
and
David H. Jones, Esq.
Kennedy, Covington, Lobdell & Hickman, L.L.P.
NationsBank Corporate Center
100 North Tryon Street, Suite 4200
Charlotte, North Carolina 28202
Telephone No.: (704) 331-7481
Facsimile No.: (704) 441-7598
If to Purchaser: Hollow Creek, L.L.C.
One Tower Square - 9PB (for regular mail)
205 Columbus Boulevard - 9PBA (for express mail)
Hartford, CT 06183-2030
Attention: William P. Geary
Telephone No.: (860) 277-7637
Facsimile No: (860) 954-1186
With Copies to: The Travelers Insurance Company
One Tower Square - 9PB (for regular mail)
205 Columbus Boulevard - 9PBA (for express mail)
Hartford, CT 06183-2030
Attention: William P. Geary
Telephone No.: (860) 277-7637
Facsimile No: (860) 954-1186
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and
Caroline Wannamaker Sink, Esq.
Robinson, Bradshaw & Hinson, P.A.
101 North Tryon Street, Suite 1900
Charlotte, North Carolina
Telephone No: (704) 377-8302
Facsimile No: (704) 373-3902
Any such notices shall be either (a) sent by certified mail, return receipt
requested, in which case notice shall be deemed delivered (i) three (3) business
days after deposit, postage prepaid in the U.S. mail, or (ii) upon deposit if a
copy is also sent via facsimile to the above number at the time of deposit; or
(b) sent by a nationally recognized overnight courier, in which case notice
shall be deemed delivered one (1) business day after deposit with such courier.
The above addresses may be changed by written notice to the other party;
provided, however, that no notice of a change of address shall be effective
until actual receipt of such notice. Copies of notices are for informational
purposes only, and a failure to give or receive copies of any notice shall not
be deemed a failure to give notice.
15. TIME OF ESSENCE. Time is of the essence of this Agreement. If
the time period by which any right, option or election provided under this
Agreement must be exercised, or by which any act required under this Agreement
must be performed, or by which Closing must be held, expires on a Saturday,
Sunday or a holiday, then such time period shall be automatically extended to
the next business day.
16. PURCHASER'S TERMINATION OF AGREEMENT. Notwithstanding any of
the provisions of this Agreement to the contrary, this Agreement shall terminate
ten (10) days from the Effective Date unless within such time Purchaser shall
deliver to Seller (which delivery may be by facsimile transmission to Seller or
Seller's attorney) a letter stating that Purchaser's member, The Travelers
Insurance Company, corporate headquarters in Hartford, Connecticut has approved
Purchaser's purchase of the Premises pursuant to the provisions of this
Agreement. Purchaser may take such action for any reason whatsoever and is not
required to furnish Seller with any statement or explanation of such reason or
reasons. Thereupon, Seller will forthwith return the Earnest Money, with
interest, to Purchaser, and Seller and Purchaser will thereupon be released from
any further obligations hereunder.
17. GOVERNING LAW. The validity, meaning and effect of this
Agreement shall be determined in accordance with the laws of the State of North
Carolina.
18. COUNTERPARTS. This Agreement may be executed in two (2) or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
19. CAPTIONS. The captions in this Agreement are inserted for
convenience of reference and in no way define, describe or limit the scope or
intent of this Agreement or any of the provisions hereof.
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20. ASSIGNMENt. This Agreement may not be assigned by either party
without the express written consent of the other party hereto.
21. BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective legal representatives,
successors and permitted assigns.
22. MODIFICATIONS; WAIVER. No waiver, modification amendment,
discharge or change of this Agreement shall be valid unless the same is in
writing and duly executed by both parties.
23. ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties relating to the transactions contemplated hereby and all
prior or contemporaneous agreements, understandings, representations or
statements, oral or written, are superseded hereby.
24. PARTIAL INVALIDITY. Any provision of this Agreement which is
unenforceable or invalid or the inclusion of which would adversely affect the
validity, legality or enforcement of this Agreement shall be of no effect, but
all the remaining provisions of this Agreement shall remain in full force and
effect.
25. ALLOCATION OF PURCHASE PRICE. Seller and Purchaser hereby
agree that, for all accounting and federal income tax reporting purposes, the
Purchase Price shall be allocated as follows:
Summit Green Apartments: $21,600,000
Summit Hollow Apartments - Phase I: $ 7,500,000
Summit Creek Apartments: $14,000,000
Summit Station Apartments: $11,000,000
Summit Hill Apartments - Phase I: $14,525,000
Seller and Purchaser agree to work and cooperate with each other to
coordinate their completion of Form 8594, Asset Acquisition Statement ("FORM"),
under Section 1060 of the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder, or any successor form, so that the amounts
allocated as set forth on such Form will be consistent.
26. BROKER. Seller and Purchaser represent each to the other that
each has had no dealings with any broker, finder or other party concerning
Purchaser's purchase of the Premises. Seller and Purchaser each hereby agrees to
indemnify and hold the other harmless from all loss, cost, damage or expense
(including reasonable attorneys' fees) incurred by the other as a result of any
claim arising out of the acts of the indemnifying party (or others on its
behalf) for a commission, finder's fee or similar compensation made by any
broker, finder or any party who claims to have dealt with such party other than
Broker. The representations and warranties contained in this SECTION 26 shall
survive the Closing or the termination of this Agreement.
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At Closing each party will deliver to the Title Company such
documentation as required by the Title Company to obtain the title insurance
policy to be obtained by Purchaser free of any exceptions relating to possible
liens for brokerage claims, and, in addition Seller will deliver a lien waiver
from the current leasing and management company for the Premises.
27. CONFIDENTIALITY. Seller and Purchaser agree to keep this
Agreement confidential and not make any public announcements or disclosures with
respect to the subject matter hereof without the written consent of the other
party except to the extent, if any, that such announcements or disclosures would
be required by law. Seller may, however, disclose the existence of this
Agreement to prospective purchasers during the Due Diligence Period.
28. RECORDING. Seller and Purchaser agree that neither this
Agreement nor any memorandum thereof may be recorded in any public registry.
29. HART-SCOTT-RODINO FILING. Seller and Purchaser agree to
cooperate in making any filing required by the Hart-Scott-Rodino Antitrust
Improvement Act of 1976 ("HSR ACT"), as amended, and the regulations thereunder.
Each party shall make all filings required under the HSR Act within ten (10)
days after the execution of this Agreement, and upon the request of the Federal
Trade Commission and/or the Department of Justice, shall make any additional
filings and furnish all additional information required to comply with the
provisions of the HSR Act. If either the Justice Department, the Federal Trade
Commission, or any other governmental agency commences action to suspend or
prevent the transactions contemplated by this Agreement, and such action is not
finally dismissed prior to the Closing Date, then either party may by written
notice given to the other party prior to the Closing Date terminate this
Agreement, in which case this Agreement shall terminate and neither party shall
have any further rights or obligations hereunder.
30. TERMINATION OF CONTRACTS. On or before the expiration of the
Due Diligence Period, Purchaser shall advise Seller, in writing, which of the
Service Contracts it intends to assume and which Purchaser requests that Seller
terminate on or before the Closing Date. Within five (5) business days after
receipt of Purchaser's notice, Seller shall advise whether any Service Contracts
Purchaser has requested Seller to terminate cannot be terminated or can be
terminated only with the payment of a fee or penalty and:
(a) with respect to those Service Contracts which cannot be
terminated, Purchaser shall advise, within five (5) business days of receipt of
Seller's notice, that Purchaser has either agreed to assume such Service
Contracts or has elected to terminate this Agreement in which latter instance,
the Earnest Money and any interest accrued thereon shall be refunded to
Purchaser and neither Seller nor Purchaser shall have any further liability to
the other; and
(b) with respect to those Service Contracts which can be
terminated, but only with the payment of a fee or penalty, Purchaser shall
advise Seller, within five (5) business days of receipt of Seller's notice, that
Purchaser has either agreed to pay the termination fee or penalty or has elected
to terminate this Agreement, in which latter instance the Earnest Money and any
interest accrued thereon shall be refunded to Purchaser and neither party shall
have any further liability to the other.
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On or before the Closing Date, Seller shall terminate all contracts
related to the management and operation of the Premises (other than the Service
Contracts which Purchaser has elected to assume in the manner provided herein),
including, without limitation, any property management and leasing agreements,
and shall deliver evidence of such termination pursuant to documentation
reasonably acceptable to Purchaser. Seller shall defend, indemnify and hold
Purchaser harmless from any claims or damages arising from terminated Service
Contracts (unless pursuant to the terms of the Service Contract in question such
Service Contract may not be terminated or unless and to the extent Purchaser is
obligated to pay a termination fee or penalty in connection with the termination
of a Service Contract as set forth above) or from any claims of employees whose
employment was not continued after the Closing Date.
31. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which, together
shall constitute but one and the same instrument
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IN WITNESS WHEREOF, the parties hereto have executed this Real Estate
Sale Agreement under seal as of the day and year first above written.
PURCHASER:
HOLLOW CREEK, L.L.C., a North Carolina
limited liability company (SEAL)
BY: THE TRAVELERS INSURANCE
COMPANY, a Connecticut corporation, its sole
member
By: /s/ B. Charles Milner
--------------------------------------
Its: Vice President
--------------------------------------
[CORPORATE SEAL]
SELLER:
SUMMIT PROPERTIES PARTNERSHIP, L.P.,
a Delaware limited partnership (SEAL)
BY: SUMMIT PROPERTIES INC., a Maryland
corporation, its sole general partner
By: /s/ Gregg D. Adzema
--------------------------------------
Its: Vice President
--------------------------------------
[CORPORATE SEAL]
(signatures continued on following page)
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26
STATE OF NORTH CAROLINA
COUNTY OF MECKLENBURG
This 11th day of December, 1998, personally came before me Gregg D.
Adzema, who being by me duly sworn, says that he/she is the Vice President of
SUMMIT PROPERTIES INC., a Maryland corporation, and sole general partner of
SUMMIT PROPERTIES PARTNERSHIP, L.P., a Delaware limited partnership, and that
the seal affixed to the foregoing instrument in writing is the corporate seal of
the corporation, and that said writing was signed and sealed by him/her, in
behalf of said corporation acting in its capacity as general partner of the
limited partnership, by authority duly given. And the said Vice President
acknowledged the said writing to be the act and deed of said corporation in its
capacity as general partner of the limited partnership.
/s/Tamera M. Sanders
----------------------------------------
Notary Public
My Commission Expires: Printed: Tamera M. Sanders
-------------------------------
June 2, 2002
- -------------------------
[NOTARIAL SEAL]
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27
STATE OF CONNECTICUT
COUNTY OF HARTFORD
This 14th day of December, 1998, personally came before me B. Charles
Miller, who being by me duly sworn, says that he/she is the Vice President of
THE TRAVELERS INSURANCE COMPANY, a Connecticut corporation, and sole member of
HOLLOW CREEK, L.L.C., a North Carolina limited liability company, and that the
seal affixed to the foregoing instrument in writing is the corporate seal of the
corporation, and that said writing was signed and sealed by her, on behalf of
said corporation acting in its capacity as sole member of the limited liability
company, by authority duly given. And the said Vice President acknowledged the
said writing to be the act and deed of said corporation in its capacity as sole
member of the limited liability company.
/s/Cari B. Rich
----------------------------------------
Notary Public
My Commission Expires: Printed: Cari B. Rich
-------------------------------
September 30, 2002
- -------------------------
[NOTARIAL SEAL]
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