Exhibit 10.1
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
RICHMOND GABLES ASSOCIATES("SELLER")
AND
CORNERSTONE REALTY GROUP, INC. ("BUYER")
GABLES OF ▇▇▇▇ SHADES APARTMENTS
RICHMOND, VIRGINIA
TABLE OF CONTENTS
Page
ARTICLE 1 .....................................................................1
DEFINITIONS ..................................................................1
ARTICLE 2 .....................................................................4
PURCHASE AND SALE.............................................................4
ARTICLE 3 .....................................................................4
PURCHASE PRICE; DEPOSIT; ADJUSTMENTS..........................................4
ARTICLE 4 .....................................................................7
PRECLOSING OPERATION..........................................................7
ARTICLE 5 .....................................................................8
ACCESS, INSPECTION, DILIGENCE ................................................8
ARTICLE 6 ....................................................................13
TITLE AND SURVEY ............................................................13
ARTICLE 7 ....................................................................15
CONDITIONS PRECEDENT AND CLOSING ............................................15
ARTICLE 8 ....................................................................18
CASUALTY AND CONDEMNATION ...................................................18
ARTICLE 9 ....................................................................19
BROKERAGE COMMISSIONS .......................................................19
ARTICLE 10 ...................................................................20
DEFAULT, TERMINATION AND REMEDIES............................................20
ARTICLE 11 ...................................................................21
REPRESENTATIONS AND WARRANTIES ..............................................21
ARTICLE 12 ...................................................................25
MISCELLANEOUS ...............................................................25
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ARTICLE 13 ...................................................................29
IRS FORM 1099-S DESIGNATION .................................................29
LIST OF EXHIBITS
----------------
EXHIBIT A - THE LAND
EXHIBIT B - PERSONAL PROPERTY
EXHIBIT C - PROPERTY CONTRACTS
EXHIBIT D - EAR-NEST MONEY ESCROW INSTRUCTIONS
EXHIBIT E - RENT ROLL
EXHIBIT F - FORM OF ESCROW CLOSING INSTRUCTIONS
EXHIBIT G - LEAD-BASED PAINT DISCLOSURE
EXHIBIT H - DILIGENCE DOCUMENTS
SCHEDULE D - 1099 DESIGNATION AGREEMENT
SCHEDULE E - FORM OF AUDIT LETTER
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PURCHASE AND SALE AGREEMENT
GABLES OF ▇▇▇▇ SHADES APARTMENTS
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into as
of the 26th day of June, 1998 by and between Seller and Buyer, upon the
following terms and conditions:
WHEREAS, Seller desires to sell and Buyer desires to purchase, the
Property (hereinafter defined) on the terms and conditions hereinafter set
forth;
NOW THEREFORE, in consideration of the mutual undertakings, covenants
and agreements contained herein, and other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1
DEFINITIONS
-----------
References in this Agreement to the following terms shall have the
following meanings:
Buyer: Cornerstone Realty Group, Inc., a Virginia corporation
Deposit: See Section 3.1
Documents: all documents listed on EXHIBIT H , attached hereto.
Environmental
Requirements: All laws, ordinances, statutes, codes, rules,
regulations, agreements, judgments, orders and decrees
now or hereafter enacted, promulgated, or amended, of
the United States, the states, the counties, the cities
or any other political subdivisions in which the Real
Property is located and any other political
subdivision, agency or instrumentality exercising
jurisdiction over the owner of the Real Property, the
Real Property or the use of the Real Property relating
to pollution, the protection or regulation of human
health, natural resources or the environment, or the
emission, discharge, release or threatened release of
pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or waste or Hazardous
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Materials into the environment (including, without
limitation, ambient air, surface water, ground water or
land or soil).
Escrowed Amount: See Section 3.1
Hazardous Substances: Any substance which is or contains: (i) any "hazardous
substance" as now or hereafter defined in Section
101(14) of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended (42
U.S.C. Section 9601 et seq.) or any regulations
promulgated under CERCLA; (ii) any "hazardous waste" as
now or hereafter defined in the Recourse Conservation
and Recovery Act (42 U.S.C. Section 6901 et seq.) or
regulations promulgated under RCRA; (iii) any substance
regulated by the Toxic Substances Control Act (15
U.S.C. Section 2601 et. seq.); (iv) gasoline, diesel
fuel or other petroleum hydrocarbons; (v) asbestos and
asbestos containing materials, in any form, whether
friable or nonfriable; (vi) polychlorinated biphenyls;
(vii) radon gas; and (viii) any additional substances
or materials which are now or hereafter classified or
considered to be hazardous or toxic under Environmental
Requirements or the common law, or any other applicable
law related to the Property. Hazardous Materials shall
include, without limitation, any substance, the
presence of which on the Real Property: (A) requires
reporting, investigation or remediation under
Environmental Requirements; (B) causes or threatens to
cause a nuisance on the Real Property or adjacent
property or poses or threatens to pose a hazard to the
health or safeLy of persons on the Real Property or
adjacent property; or (C) if emanated or migrated from
the Real Property, could constitute a trespass.
Improvements: All buildings, structures and other improvements
situated upon the Land and all fixtures, systems and
facilities owned by Seller and located on the Land,
which include 224 rental units.
Intangible Property: All of Seller's right, title and interest, if any, in
all intangible assets of any nature relating to the
Land, the Improvements or the Personal Property,
including, without limitation, all of Seller's right,
title and interest in all (i) warranties and guaranties
relating to the Improvements or Personal Property in
the possession of Seller, (ii) all licenses, permits
and approvals relating to the Real Property, (iii) all
logos and trade names currently used by Seller
exclusively in the operation of the Land and
Improvements, including the use of
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the name Gables of ▇▇▇▇ Shades Apartments, and (iv) all
plans and specifications, in each case to the extent
that Seller may legally transfer the same.
Land: All of the land described on EXHIBIT A. attached
hereto, together with all privileges, rights,
easements, and appurtenances belonging to such land and
all right, title and interest (if any) of Seller in and
to any streets, alleys, passages, and other
rights-of-way or appurtenances included in, adjacent to
or used in connection with such land and all right,
title and interest (if any) of Seller in all mineral
and development rights appurtenant to such land.
Leases: All of Seller's rights in all leases covering any
portion of the Land or Improvements.
Personal Property: All furniture, carpeting, appliances, equipment,
machinery, inventories, supplies, signs and other
tangible personal property of every kind and nature, if
any, owned by Seller and installed, located at and used
in connection with the ownership, occupation and
operation of the Real Property, including, without
limitation, the Personal Property listed on EXHIBIT B
attached hereto. Personal Property specifically
excludes: (i) any items of personal property owned by
tenants at or on the Real Property, and (ii) any items
of personal property owned by third parties and leased
to Seller.
Property. The Real Property, the Personal Property, the Leases,
the Tenant Deposits, the Intangible Property and the
Property Contracts known as Gables of ▇▇▇▇ Shades
Apartments, located at Richmond, Virginia.
Property Contracts: All of Seller's rights, if any, in the contracts listed
on EXHIBIT C attached hereto, being all service, supply
and equipment rental, management, operating and leasing
contracts affecting the Property, to the extent that
(i) Seller is entitled to transfer the same to Buyer,
and (ii) Buyer does not elect to have Seller terminate
them in accordance with Section 4.3 below.
Purchase Price: $11,500,000.00
Real Property: The Land and the Improvements.
Seller: Richmond Gables Associates, a Virginia general
partnership
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Tenant Deposits: Seller's rights to unapplied security deposits under
the Leases.
Title Company: Commonwealth Land Title Insurance Company
ARTICLE 2
PURCHASE AND SALE
-----------------
2.1 Seller hereby agrees to sell and convey the Property to Buyer and
Buyer hereby agrees to buy the Property from Seller for the Purchase Price and
otherwise subject to the covenants, provisions, terms and conditions contained
herein.
ARTICLE 3
PURCHASE PRICE: DEPOSIT: ADJUSTMENTS
------------------------------------
3.1 Deposit. Contemporaneously with the execution and delivery of this
Agreement (and as a condition precedent to the effectiveness of this Agreement),
Buyer shall deposit immediately available funds with the Title Company
(hereinafter the "Escrow Agent") the sum of Two Hundred Fifty Thousand and
00/100 ($250,000.00) Dollars (the "DEPOSIT") to secure Buyer's obligations under
this Agreement. The Escrow Agent shall hold the Deposit in a segregated interest
bearing money market account with an FDIC insured bank reasonably acceptable to
Buyer and Seller. The Deposit and all interest accrued on the Deposit
(collectively, the "ESCROWED AMOUNT") SHALL be maintained by the Escrow Agent in
such account or accounts until the Escrow Agent is required to cause the
Escrowed Amount to be disbursed pursuant to the terms and conditions of this
Agreement and the ▇▇▇▇▇▇▇ Money Escrow Instructions attached hereto as EXHIBIT
D. The Escrowed Amount shall be applied to the Purchase Price if the Closing
occurs, as provided in Section 3.2(c) below.
3.2 Purchase Price. The Purchase Price, subject to adjustment as
provided herein, shall be as specified in Article I above and shall be paid on
the Closing Date (as hereinafter defined) in United States dollars by wire
transfer of federal funds, less the Escrowed Amount (the "Cash Balance").
3.3 Tax Proration. All due and payable real estate taxes, all general
and special assessments on the Land and ad valorem taxes, if any, on the
Personal Property (based on the most recent ascertainable taxes) attributable to
the Property through the Closing Date shall be prorated and adjusted as of the
Closing Date. In no event shall Seller be charged with or be responsible for any
increase in the taxes on the Property resulting from the sale of the Property or
from any improvements made or leases entered into on or after the Closing Date.
If the tax
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statements for the fiscal year during which the Closing Date occurs are not
finally determined, then the tax figures for the immediately prior fiscal year
shall be used for the purposes of prorating taxes on the Closing Date, provided
that there shall be no ftirther adjustment to be made after the Closing Date.
Any tax refunds or proceeds (including interest thereon) on account of a
favorable determination resulting from a challenge, protest, appeal or similar
proceeding relating to taxes and assessments relating to the Property (i) for
all tax periods occurring prior to the applicable tax period in which the
Closing occurs shall be retained by and paid exclusively to Seller and (ii) for
the applicable tax period in which the Closing occurs shall be prorated as of
the Closing Date after reimbursement to Seller and Buyer, as applicable, for all
fees, costs and expenses (including reasonable attorneys' and consultants' fees)
incurred by Seller or Buyer, as applicable, in connection with such proceedings
such that Seller shall retain and be paid that portion of such tax refunds or
proceeds as is applicable to the portion of the applicable tax period prior to
the Closing Date and Buyer shall retain and be paid that portion of such tax
refunds or proceeds as is applicable to the portion of the applicable tax period
from and after the Closing Date. Neither Seller nor Buyer shall settle any tax
protests or proceedings in which taxes for the tax period for which the other
party is responsible are being adjudicated without the consent of such party,
which consent shall not be unreasonably withheld, conditioned or delayed. After
the Closing, Buyer shall be responsible for and control any tax protests or
proceedings for any period for which taxes are adjusted between the parties
under this Agreement and for any later period. Buyer and Seller shall cooperate
in pursuit of any such proceedings and in responding to reasonable requests of
the other for information concerning the status of and otherwise relating to
such proceedings; provided, however, that neither party shall be obligated to
incur any out-of-pocket fees, costs or expenses in responding to the requests of
the other.
3.4 Contract Proration. To the extent Property Contracts are not
terminated pursuant to Section 4.3, (a) prepaid or past due amounts and (b)
prepaid fees or bonuses under any Property Contracts which are assigned to Buyer
at Closing shall be prorated and adjusted as of the Closing Date.
3.5 Utility Proration. Seller shall use commercially reasonable efforts
to terminate its accounts for electricity, gas, water, sewer or other public
utility usage at the Property as of the Closing Date, and the Seller shall pay
all charges for such utilities which have accrued on or prior to the Closing
Date; provided, however, that if and to the extent such charges are paid
directly by tenants, no such termination or payment shall be required. Buyer
shall activate its own account as of the Closing Date. If Seller is unable to
terminate any of its accounts, the Seller shall cause all meters for
electricity, gas, water, sewer or other public utility usage at the Property to
be read as of the day immediately preceding the Closing Date, and the Seller
shall pay all charges for such utilities which have accrued on or prior to the
Closing Date; provided, however, that if and to the extent such charges are paid
directly by tenants, no such reading or payment shall be required. If the
utility companies are unable or refuse to read meters for which payment by the
Seller is required, all charges for such utilities to the extent unpaid shall be
prorated and adjusted as of the Closing Date based on the most recent bills
therefor and no further adjustment shall be
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made. The Seller shall provide notice to the Buyer within five (5) days of the
Closing Date setting forth (i) whether utility accounts will be terminated by
Seller or (ii) whether utility meters will be read as of the Closing Date and
shall provide a copy of the most recent ▇▇▇▇ for any utility charges which are
to be prorated and adjusted as of the Closing Date.
3.6 Income and Expense Proration. Collected rents for the then current
and any future period, prepaid rentals, and all expenses and other charges in
connection with the operation of the Property shall be apportioned and full
value shall be adjusted as of the Closing Date, and the net amount thereof, if
in favor of Seller, shall be added to the Purchase Price, or if in favor of
Buyer, shall be deducted from the Purchase Price. Security deposits which have
not been previously applied by Seller shall be added to the Purchase Price. From
and after Closing all security deposits credited to Buyer shall thereafter be
deemed transferred to Buyer and Buyer shall assume and be solely responsible for
the payments of security deposits to tenants in accordance with the Leases and
applicable law. Seller shall be entitled to retain or if transferred to Buyer
receive a credit for any utility deposits and any deposits for third parties
under any of the Property Contracts. For a period of sixty (60) days after the
Closing Date, Buyer shall use commercially reasonable efforts to collect owing
past due or uncollected rents as of the Closing Date, and such past due or
uncollected rents, less reasonable expenses of collection thereof, shall be
apportioned between Buyer and Seller (if and when collected). If Seller has
committed to give any future monetary concessions to tenants under existing
leases to which Buyer would become liable, then such amount shall be deducted
from the Purchase Price at Closing.
3.7 Prorations Generally. A statement of prorations and other
adjustments shall be prepared by Seller in conformity with the provisions of
this Article 3 and submitted to Buyer for review and approval not less than two
(2) business days prior to the Closing Date. For purposes of making prorations,
Seller shall be deemed to be in title to the Property and entitled to the income
from and responsible for the expenses thereof, on the closing Date.
3.8 Closing Costs.
(a) Seller shall pay: (i) its legal fees and expenses related to
the negotiation and preparation of this Agreement and all documents
required to close the transaction contemplated hereby, (ii) 50% of the
escrow fees of the Escrow Agent, (iii) grantor's tax and (iv) all
expenses of satisfaction and prepayment of the any outstanding
mortgages on the Property.
(b) Buyer shall pay: (i) 50% of the escrow fees of the Escrow
Agent, (ii) charges to record the deed, and evidence of Buyer's
existence or authority, (iii) Buyer's legal fees and expenses related
to the negotiation of this Agreement and all documents required to
close the transaction contemplated hereby, (iv) all costs related to
the Buyer's inspection and due diligence, including, without
limitation, the cost of appraisals, architectural, engineering, credit
and environmental reports, (v) all costs associated with
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title examination and preparation of a title commitment as well as all
charges and premiums for an owner's title policy, (vi) all costs
allocable to preparation of the survey, (vii) the cost of the Phase I
Report update, and (viii) all state and county taxes associated with
the transfer of the property.
(c) All other closing costs shall be paid by Seller or Buyer in
accordance with the custom in the jurisdiction where the Property is
located.
ARTICLE 4
PRECLOSING OPERATION
--------------------
4.1 Leases. A rent roll (the "Rent Roll") containing a list of all
occupants of the Property pursuant to the Leases as of the date hereof is
attached hereto as EXHIBIT E . During the pendency of this Agreement, Seller may
-enter into Leases with new tenants or modifications of Leases with existing
tenants substantially in accordance with Seller's existing leasing practices,
provided that in all events any new or modified Leases shall (i) be at or near
market rent, (ii) be for a term of not more than one (1) year (with respect to
residential Leases only), and (iii) on the Seller's current standard form of
lease.
4.2 Conduct of Business. At all times prior to Closing, Seller shall
continue (a) to conduct business with respect to the Property in the same manner
in which said business has been heretofore conducted, (b) to insure the Property
substantially as currently insured, and (c) maintain the Property in its current
condition, reasonable wear and tear and damage by casualty excepted, including
ordinary preparation for occupancy of residential units vacated prior to
Closing.
4.3 Propery Contracts. Seller shall make copies of all Property
Contracts available for Buyer to review promptly after the date hereof. On or
before the Diligence Date (as defined below), unless Buyer has provided written
notice to Seller of Buyer's election to terminate this Agreement, Buyer shall
provide written notice to Seller of the Property Contracts that Buyer desires to
have terminated by Seller, and Seller will terminate the Property Contracts so
identified at or before Closing, provided that such Property Contracts may be
terminated without cost or liability to Seller and if there is cost or liability
to Seller, Buyer shall be responsible for any such liability. At Closing, Seller
shall assign and Buyer shall assume the Property Contracts, except those
Property Contracts which Seller has agreed to terminate. Buyer and Seller shall
indemnify, defend and hold the other harmless from and against any and all
claims under the Property Contracts which relate to its respective period of
ownership. Notwithstanding the foregoing, Seller's existing management contract
and exclusive brokerage contract for the Property shall be terminated by Seller
effective as of the Closing Date at no cost to Buyer.
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ARTICLE 5
ACCESS, INSPECTION , DILIGENCE
-----------------------------
5.1 Access/Purchaser's Responsibilities/Purchaser's Indemnity.
(a) From the date hereof through the Diligence Date (hereinafter defined),
Seller agrees that Buyer and its authorized agents or representatives shall be
entitled to enter upon the Real Property during normal business hours upon
advance written notice to Seller and make such reasonable, nondestructive
investigations, studies and tests including, without limitation, surveys and
engineering studies as Buyer deems necessary or advisable, provided, however,
that Buyer shall not be permitted to conduct physical testing without Seller's
prior written consent, which consent shall not be unreasonably withheld,
conditioned or delayed. Seller's prior written consent for physical inspections
or testing may be conditioned upon receipt of a detailed description of the
proposed physical inspection or testing, a list of contractors who will be
performing the physical inspection or testing, evidence of insurance
satisfactory to Seller, and such other information as Seller reasonably requires
in connection with such proposed inspection or testing. Buyer acknowledges that
Seller has delivered to Buyer or has made available to Buyer at the Property, on
or before the date hereof, all Documents.
(b) Buyer agrees that in conducting any inspections, investigations or
tests of the Property and/or the Documents, Buyer and its agents and
representatives shall (i) not unreasonably interfere with the operation and
maintenance of the Property, (ii) not unreasonably disturb the tenants under the
Leases or unreasonably interfere with their use of the Property pursuant to
their respective Leases, (iii) not damage any part of the Property or any
personal property owned or held by any tenant or third party, (iv) not injure of
otherwise cause bodily harm to Seller, the property manager, or their respective
guests, agents, invitees, contractors ad employees or any tenant or their guests
or invitees, (v) maintain comprehensive general liability insurance in terms and
amounts reasonably acceptable to Seller covering any accident arising in
connection with the presence of Buyer, its agents and representatives on the
Property, and deliver a certificate of insurance verifying such coverage to
Seller prior to entry upon the Property; (vi) promptly pay when due the costs of
all tests, investigations and examinations done with regard to the Property;
(vii) not permit any liens to attach to the Real Property by reason of the
exercise of Buyer's rights hereunder, (viii) fully restore the Property to the
condition in which the same was found before any such inspection or tests were
undertaken; and (ix) not reveal or disclose any information obtained during the
due diligence period concerning the Property and the Documents to anyone outside
Buyer's organization, except in accordance with the confidentiality standards
set forth in Section 5.5 herein.
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(c) Buyer will indemnify, defend, and hold Seller and its property
manager harmless from all losses, costs, liens, claims, causes of
action, liability, damages and outof pocket expenses, including,
without limitation, reasonable attorneys' fees incurred by Seller as a
result of the entry upon or inspections, tests or investigations of the
Property conducted by or on behalf of Buyer. This indemnity obligation
of Buyer shall survive the termination of this Agreement for any
reason.
(d) Buyer acknowledges and agrees that the Documents are provided
to Buyer for informational purposes only and do not constitute
representations or warranties of Seller or its agents, employees or
representatives of any kind as to the truth, accuracy or completeness
of the Documents or the source(s) thereof. Seller has not undertaken
any independent investigation as to the truth, accuracy or completeness
of the Documents, and is providing the Documents solely as an
accommodation to Buyer.
5.2 Diligence. Subject to Section 5.1 , above, Buyer shall promptly
commence and actively pursue the following due diligence items:
(a) Review title and survey matters;
(b) Review Property Contracts;
(c) Obtain and review engineering reports;
(d) Review environmental reports on oil, hazardous waste, and
asbestos;
(e) Review applicable zoning and other land use controls, and
other permits, licenses, permissions, approvals and consents; and
(f) Review all Leases affecting the Property.
Buyer shall complete its due diligence on or before July 8, 1998
(the "DILIGENCE DATE"). Notwithstanding any other term or provision herein to
the contrary, in the event that Buyer's due diligence shall reveal any matters
which are not acceptable to Buyer, in Buyer's sole discretion, Buyer may elect,
by written notice to Seller, received by Seller on or before the Diligence Date,
not to proceed with this purchase, in which event this Agreement shall
terminate, the Escrow Agent shall return the Escrowed Amount to the Buyer and
this Agreement shall be null and void without recourse to either party hereto
(except to the extent such recourse arises in connection with a provision of
this Agreement which is intended to survive termination). In the event that
Buyer does not terminate this Agreement pursuant to this Paragraph 5.2, the
Escrowed Amount shall become nonrefundable and shall either be (a) applied to
the Purchase Price as provided in Section 3.2, or (b) in the event of default,
casualty or condemnation, disbursed to either Buyer or Seller according to the
applicable terms hereof. BUYER ACKNOWLEDGES THAT,
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PURSUANT TO THE TERMS OF THIS AGREEMENT, BUYER SHALL BE AFFORDED A FULL
OPPORTUNITY TO INSPECT THE PROPERTY, OBSERVE ITS PHYSICAL CHARACTERISTICS AND
EXISTING CONDITIONS AND CONDUCT SUCH INVESTIGATIONS AND STUDIES ON AND OF SAID
PROPERTY AS IT DEEMS NECESSARY AND THAT, UNLESS BUYER TERMINATES THIS AGREEMENT
PURSUANT TO THIS SECTION 5.3 BUYER SHALL BE DEEMED TO HAVE WAIVED ON THE
DILIGENCE DATE ANY AND ALL OBJECTIONS TO OR COMPLAINTS REGARDING (INCLUDING, BUT
NOT LIMITED TO, FEDERAL, STATE OF COMMON LAW BASED ACTIONS AND ANY PRIVATE RIGHT
OF ACTION UNDER STATE AND FEDERAL LAW TO WHICH THE PROPERTY IS OR MAY BE
SUBJECT, INCLUDING BUT NOT LIMITED TO, CERCLA AND RCRA) PHYSICAL CHARACTERISTICS
AND EXISTING CONDITIONS, INCLUDING, WITHOUT LIMITATION, STRUCTURAL AND GEOLOGIC
CONDITIONS, SUBSURFACE SOIL AND WATER CONDITIONS AND SOLID AND HAZARDOUS WASTE
AND HAZARDOUS SUBSTANCES ON, UNDER, ADJACENT TO OR OTHERWISE AFFECTING THE
PROPERTY. BUYER FURTHER HEREBY ASSUMES THE RISK OF CHANGES IN APPLICABLE LAWS
AND REGULATIONS RELATING TO PAST, PRESENT AND FUTURE ENVIRONMENTAL CONDITIONS ON
THE PROPERTY AND THE RISK THAT ADVERSE PHYSICAL CHARACTERISTICS AND CONDITIONS,
INCLUDING, WITHOUT LIMITATION, THE PRESENCE OF HAZARDOUS SUBSTANCES OR OTHER
CONTAMINANTS, MAY NOT HAVE BEEN REVEALED BY ITS INVESTIGATION.
5.3 Copies of Reports/Return of Documents.
(a) Seller has delivered to Buyer a copy of the Phase I
Environmental Site Assessment for the Gables Apartments prepared by
CURA, Inc. dated September 13, 1994 (the "Phase I Report"). If the
Phase 1 Report indicates the existence or reasonable potential
existence of any environmental, hazardous waste or Hazardous Substance
contamination of any portion of the Property, Buyer may terminate this
Agreement by giving written notice to Seller by the Diligence Date.
Upon such termination, in accordance with paragraphs (b) and (c) below,
the Escrowed Amount shall be promptly returned to Buyer and neither
Buyer nor Seller shall have any further obligation or liability to the
other hereunder, except those obligations arising under provisions of
this Agreement which are expressly intended to survive termination.
Buyer hereby acknowledges and agrees that if it fails to terminate this
Agreement pursuant to this Section 5.3(a), it waives its right to
terminate this Agreement pursuant to Section 5.2 above for any reason
pertaining to or in connection with information contained in the Phase
I Report.
(b) If this Agreement is terminated for any reason whatsoever,
Buyer shall promptly deliver to Seller all Documents delivered to Buyer
or Buyer's agents,
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representatives or designees by Seller or Seller's agents,
representatives or employees pursuant to this Agreement.
(c) The return of the Escrowed Amount to Buyer under this Agreement
shall be contingent upon Buyer's fulfillment of its obligations under
Section 5.4(a) and (b).
5.4 Confidentiality. Buyer acknowledges and agrees that any and all of
the Documents are proprietary and confidential in nature and will be delivered
to Buyer solely to assist Buyer in determining the feasibility of purchasing the
Property. Further, each party hereto agrees to maintain in confidence, and not
to discuss with or to disclose to any person or entity who is not a party to
this Agreement, any material term of this Agreement or any aspect of the
transactions contemplated hereby, except as provided in this Section. Seller may
publicly disclose the existence of this Agreement provided that the identity of
Buyer is not disclosed. Buyer shall not disclose to anyone other than its
partners and financiers the Documents and/or any information disclosed by Seller
to Buyer which is not generally known by the public regarding Seller's
operations and/or the Property. Each party hereto may discuss with and disclose
to its accountants, attorneys, existing or prospective lenders, investment
bankers, underwriters, rating agencies, partners, consultants and other advisors
to the extent such parties reasonably need to know such information and are
bound by a confidentiality obligation identical in all material respects to the
one created by this Section. Additionally, each party may discuss and disclose
such matters to the extent necessary to comply with any requirements of the
Securities and Exchange Commission or in order to comply with any law or
interpretation thereof or court order. This provision shall survive termination
of this Agreement but shall terminate upon the Closing. Any press release to be
made regarding any matter which is the subject of the confidentiality obligation
created in this Section shall be subject to the reasonable approval of Buyer and
the Seller, respectively both as to timing and content.
5.5 Buyer's Acknowledgmen. BUYER ACKNOWLEDGES THAT AS OF THE DILIGENCE
DATE IT HAS HAD AN OPPORTUNITY TO CONDUCT DILIGENCE ON THE PROPERTY AND IS
ACQUIRING THE PROPERTY IN ITS CURRENT CONDITION BASED ON ITS DILIGENCE. BUYER
FURTHER ACKNOWLEDGES THAT NEITHER SELLER NOR ITS EMPLOYEES, AGENTS OR
REPRESENTATIVES HAVE MADE ANY REPRESENTATION OR WARRANTY AS TO THE CONDITION OF
THE PROPERTY OR THE PRESENCE OR ABSENCE OF ANY HAZARDOUS MATERIALS ON, IN, UNDER
OR WITHIN THE PROPERTY OR A PORTION THEREOF WHICH SURVIVE CLOSING HEREUNDER. THE
BUYER ACKNOWLEDGES AND AGREES THAT THE PROPERTY IS TO BE CONVEYED BY THE SELLER
TO THE "BUYER AS, IS"," WITH ALL FAULTS", AND SUBSTANTIALLY IN ITS CURRENT
CONDITION. THE BUYER FURTHER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY
CONTAINED HEREIN, NEITHER THE SELLER NOR ANY AGENT, EMPLOYEE OR OTHER
REPRESENTATIVE OF THE SELLER (OR PURPORTED AGENT, EMPLOYEE OR OTHER
REPRESENTATIVE OF THE SELLER) HAS MADE ANY GUARANTEE,
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REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED (AND THE SELLER SHALL NOT HAVE
ANY LIABILITY WHATSOEVER) AS TO THE VALUE, USES, HABITABILITY, CONDITION,
DESIGN, OPERATION, FINANCIAL CONDITION OR PROSPECTS, OR FITNESS FOR PURPOSE OR
USE OF THE PROPERTY (OR ANY PART THEREOF) OR ANY OTHER GUARANTEE, REPRESENTATION
OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY (OR ANY
PART THEREOF) OR INFORMATION SUPPLIED TO BUYER WITH RESPECT THERETO. FURTHER,
THE SELLER SHALL HAVE NO LIABILITY FOR ANY LATENT, HIDDEN, OR PATENT DEFECT AS
TO THE PROPERTY OR THE FAILURE OF THE PROPERTY, OR ANY PART THEREOF, TO COMPLY
WITH ANY APPLICABLE LAWS AND REGULATIONS. IN PARTICULAR, THE BUYER ACKNOWLEDGES
AND AGREES THAT ANY INFORMATION PROVIDED TO BUYER BY SELLER WITH RESPECT TO THE
PROPERTY UNDER THIS AGREEMENT (AND ANY OTHER INFORMATION THE BUYER MAY HAVE
OBTAINED REGARDING IN ANY WAY ANY OF THE PROPERTY, INCLUDING WITHOUT LIMITATION,
ITS OPERATIONS OR ITS FINANCIAL HISTORY OR PROSPECTS FROM THE SELLER OR ITS
AGENTS, EMPLOYEES OR OTHER REPRESENTATIVES) IS DELIVERED TO THE BUYER AS A
COURTESY, WITHOUT REPRESENTATION OR WARRANTY AS TO ITS ACCURACY OR COMPLETENESS,
AND NOT AS AN INDUCEMENT TO ACQUIRE THE PROPERTY; THAT NOTHING CONTAINED IN SUCH
DELIVERIES SHALL CONSTITUTE OR BE DEEMED TO BE A GUARANTEE, REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, IN ANY REGARD AS TO ANY OF THE PROPERTY (EXCEPT AS
EXPRESSLY PROVIDED HEREIN); AND THAT THE BUYER IS RELYING ONLY UPON THE
PROVISIONS OF THIS AGREEMENT AND ITS OWN INDEPENDENT ASSESSMENT OF THE PROPERTY
AND ITS PROSPECTS IN DETERMINING WHETHER TO ACQUIRE THE PROPERTY. THE PROVISIONS
OF THIS PARAGRAPH SHALL SURVIVE CLOSING.
5.6 Buyer's Release of Seller. SELLER AND ITS PROPERTY MANAGER ARE
HEREBY RELEASED FROM ALL RESPONSIBILITY AND LIABILITY REGARDING THE CONDITION
(INCLUDING THE PRESENCE IN THE SOIL, AIR, STRUCTURES AND SURFACE AND SUBSURFACE
WATERS, OF MATERIALS OR SUBSTANCES THAT HAVE BEEN OR MAY BE IN THE FUTURE
DETERMINED TO BE TOXIC, HAZARDOUS, UNDESIRABLE OR SUBJECT TO REGULATION AND THAT
MAY NEED TO BE SPECIALLY TREATED, HANDLED AND/OR REMOVED FROM THE PROPERTY UNDER
CURRENT OR FUTURE FEDERAL, STATE AND LOCAL LAWS, REGULATIONS OR GUIDELINES),
VALUATION, SALABILITY OR UTILITY OF THE PROPERTY, OR ITS SUITABILITY FOR ANY
PURPOSE WHATSOEVER. BUYER ACKNOWLEDGES THAT ANY INFORMATION OF ANY TYPE WHICH
BUYER HAS RECEIVED OR MAY RECEIVE FROM SELLER, ITS PROPERTY MANAGER OR THEIR
RESPECTIVE AGENTS, INCLUDING, WITHOUT LIMITATION, ANY ENVIRONMENTAL REPORTS AND
SURVEYS, IS FURNISHED ON THE EXPRESS CONDITION THAT BUYER SHALL MAKE AN
INDEPENDENT VERIFICATION OF THE ACCURACY OF SUCH
12
INFORMATION, ALL SUCH INFORMATION BEING FURNISHED WITHOUT ANY WARRANTY
WHATSOEVER.
ARTICLE 6
TITLE AND SURVEY
----------------
6.1 Title and Survey. Promptly following the execution of this
Agreement, shall obtain:
(a) A current ALTA as-built survey of the Real Property or an
update of Seller's survey (the "Survey"); and
(b) A commitment for an ALTA Owner's Policy of Title Insurance from
the Escrow Agent (the "TITLE COMMITMENT"). Buyer shall cause a copy of
the completed Title Commitment to be forwarded to Seller.
If the Survey or matters listed as exceptions in the Title Commitment
are not satisfactory to Buyer, Buyer shall, five (5) business days before the
Diligence Date, provide Seller with written notice of such objections (the
"Title Objections"). Seller, at its sole cost and expense shall have the right,
but not the obligation, to cure or remove any Title Objections and shall give
Buyer written notice on or prior to the Diligence Date, identifying those Title
Objections, if any, that Seller agrees to use reasonable efforts to cure;
provided, however, that Seller shall not be obligated to incur any costs or
expenses in excess of $10,000 in connection with any such cure undertaken by
Seller. If there are Title Objections which Seller is unable or unwilling to
cure by the Diligence Date, Buyer may terminate this Agreement as provided in
Section 5.3 , above or waive such objections which Seller is not willing or able
to cure and proceed to closing. Those exceptions or title deficiencies which (i)
Buyer does not object to pursuant to this Section 6.1 or (ii) are waived because
Seller is unwilling or unable to cure shall be the "Permitted Exceptions.'
6.2 Deed. On the Closing Date, Seller shall convey by good and
sufficient special warranty deed to Buyer good and clear record and marketable
fee simple title to all of the Real Property free and clear of all liens,
encumbrances, conditions, easements, assessments, restrictions and other
conditions, except for the following:
(a) All Leases;
(b) All zoning, building and other laws applicable to the Property;
(c) All matters which arise after the Diligence Date which are agreed
consented to by Buyer;
13
(d) The lien, if any, for real estate taxes for current year not due
and payable prior to the Closing Date (subject to proration in accordance
with Section 3.3 herein);
(e) All matters shown on Schedule B of the Title Commitment or of
public record as of the effective date of the Title Commitment and which
Seller has not agreed to cure pursuant to Section 6.1, above;
(f) The Permitted Exceptions;
(g) Any matters shown on the Survey; and
(h) All matters, whether or not of record, to the extent caused by
Buye agents, representatives or contractors.
6.3 Lease Assignment. At the Closing, Seller shall assign the Leases to
Buyer and Buyer shall assume Seller's obligations thereunder and Seller shall
convey the Personal Property to Buyer by quitclaim ▇▇▇▇ of sale.
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ARTICLE 7
CONDITIONS PRECEDENT AND CLOSING
--------------------------------
7.1 Buyer's Conditions Precedent. In addition to any other conditions
precedent in favor of Buyer as may be set forth elsewhere in this Agreement,
Buyer's obligations under this Agreement are expressly subject to the timely
fulfillment of the conditions set forth in this Section 7.1 on or before the
Closing Date, or such earlier date as is set forth below. Each condition may be
waived in whole or in part only by written notice of such waiver from Buyer to
Seller.
(a) Seller performing and complying in all material respects with
all of the terms of this Agreement to be performed and complied with by
Seller prior to or at the Closing.
Notwithstanding the foregoing, if any conditions of Closing (other than
an obligation of Buyer under Section 7.2 below) shall not have been fulfilled on
or before the Closing Date, Seller shall have the right (in its sole
discretion), exercisable by written notice to Buyer at or before the Closing, to
extend the Closing Date for a period of up to forty-five (45) days to provide
additional time for the fulfillment of such conditions. Upon any such extension,
the term "Closing Date" as used herein shall mean the date set forth in such
written notice from Seller. If Buyer's conditions as set forth in this Section
7.1 have not been met as of the Closing Date (as the same may be extended as
aforesaid) then Buyer shall have the right to terminate this Agreement by
written notice to Seller, and upon receipt of such notice Seller shall direct
the Escrow Agent to return the Escrowed Amount to Buyer and this Agreement shall
thereupon terminate and be of no further force or effect.
7.2 Seller's Conditions Precedent. In addition to any other conditions
precedent in favor of Seller as may be set forth elsewhere in this Agreement,
Seller's obligations under this Agreement are expressly subject to the timely
fulfillment of the conditions set forth in this Section 7.2 on or before the
Closing Date, or such earlier date as is set forth below. Each condition may be
waived in whole or part only by written notice of such waiver from Seller to
Buyer.
(a) Buyer performing and complying in all material respects with
all of the terms of this Agreement to be performed and complied with by
Buyer prior to or at the Closing, including, without limitation,
payment by the Buyer of the Purchase Price (as adjusted as otherwise
provided herein).
(b) On the Closing Date, all of the representations of Buyer set
forth in this Agreement shall continue to be true, accurate and
complete.
15
7.3 Closing Date. Subject to Seller's right to extend the Closing Date
as provided in Section 7.1 and Buyer's right to extend the Closing Date as
provided below , the consummation of the purchase and sale contemplated in this
Agreement (the "CLOSING") shall occur through an escrow closing arrangement as
described in EXHIBIT F attached hereto on July 15, 1998 (the "Closing Date"), at
the office of the Escrow Agent or through the escrow closing arrangements set
forth in the Form of Escrow Closing Instructions attached hereto as EXHIBIT F.
It is agreed that time is of the essence in this Agreement.
Buyer shall have the right to extend the Closing Date for up to ten
(10) additional business days upon the deposit with Escrow Agent of the sum of
One Hundred Thousand Dollars ($100,000.00) (the "Additional Deposit"). The
Escrow Agent will hold the Additional Deposit with the Deposit, together with
all interest earned thereon, as the Escrowed Amount. The Escrowed Amount shall
be maintained by the Escrow Agent until the Escrow Agent is required to cause
the Escrowed Amount to be disbursed pursuant to the terms and conditions of this
Agreement and the ▇▇▇▇▇▇▇ Money Escrow Instructions. The Escrowed Amount,
including the Additional Deposit, shall be applied to the Purchase Price if the
Closing occurs, as provided in Section 3.2(c), above.
7.4 Closing Deliveries. On the Closing Date, Seller shall deliver or
cause to be delivered:
(a) A duly executed and acknowledged special warranty deed
conveying the Land and the Improvements to Buyer;
(b) A duly executed quitclaim ▇▇▇▇ of sale and general assignment
conveying the Personal Property and the Intangible Property to Buyer;
(c) A duly executed assignment and assumption of the Leases and
Tenant Deposits (the "ASSIGNMENT OF LEASES");
(d) A duly executed assignment and assumption of Property Contracts
being assumed (the "ASSIGNMENT OF CONTRACTS");
(e) A certificate or certificates of non-foreign status from
Seller;
(f) Customary affidavits sufficient for the Escrow Agent to delete
any exceptions for mechanic's or materialmen's liens and parties in
possession from Buyer's title policy and such other affidavits relating
to such title policy as the Escrow Agent may reasonably request;
(g) An updated Rent Roll (including a list if all delinquent and
prepaid rents) certified by the Seller as true and correct as of the
Closing Date;
16
(h) Such other instruments as Buyer or the Escrow Agent may
reasonably request to effectuate the transactions contemplated by this
Agreement;
(i) A duly executed counterpart original of the closing statement
setting forth the Purchase Price, the closing adjustments and the
application of the Purchase Price as adjusted,
(j) Evidence or documents as may reasonably be required by the
Escrow Agent evidencing the status and capacity of Seller to sell the
Property and the authority of the person or persons executing the
various documents on behalf of Seller in connection with the sale of
the Property;
(k) Originals, or where unavailable, copies of all Property
Contracts, Leases (with all amendments and modifications thereto),
operating information, permits, warranties and financial information
about the Property in Seller's possession or control relating to the
Property;
(1) All keys to all locks on the Property and similar items, to the
extent in Seller's possession;
(m) An indemnity pursuant to Section 4.3 with respect to each
Property Contract;
(n) To the extent required, documents for the transfer of
telephone, electric, water and sewer, and gas utilities, as may be
required by the utility; and
(o) A satisfactory and valid written termination of the management
agreement executed by the existing management and rental agent for the
Property.
7.5 Buyer's Deliveries. On the Closing Date, Buyer shall deliver or
cause to be delivered at its expense each of the following to Seller:
(a) The Purchase Price for the Property, as such Purchase Price may
have been adjusted pursuant to the provisions of this Agreement and
credited for any portion of the Escrowed Amount paid to Seller, in the
manner provided for in Article 3;
(b) Evidence in form and substance reasonably satisfactory to
Escrow Agent and Seller of Buyer's authority to purchase the Property;
(c) The Assignment of Leases;
(d) The Assignment of Contracts;
17
(e) Such other instruments as Seller or Escrow Agent may reasonably
request to effectuate the transactions contemplated by this Agreement;
(f) A duly executed counterpart original of the closing statement
setting forth the Purchase Price, the closing adjustments and the
application of such amounts;
(g) Such evidence or documents as may reasonably be required by the
Escrow Agent evidencing the status and capacity of Buyer and the
authority of the person or persons who are executing the various
documents on behalf of Buyer in connection with the purchase of the
Property;
(h) Acknowledgment by Buyer of Buyer's receipt from Seller of the
Tenant Deposits;
(i) An indemnity pursuant to Section 4.3 of this Agreement with
respect to each Property Contract assumed by Buyer; and
(j) Executed counterparts of any other documents listed in Section
7.4 required to be signed by Buyer.
7.6 Possession. Possession of the Property shall be delivered to Buyer
by Seller at the Closing, subject only to those items listed in Section 6.2 of
this Agreement and rights arising under any Property Contracts not terminated by
Buyer pursuant to Section 4.3. Seller and Buyer covenant and agree to execute,
at Closing, a written notice of the acquisition of the Property by Buyer, for
duplication and transmittal to all tenants affected by the sale and purchase of
the Property (or otherwise in such manner as will comply with applicable law
respecting notification of tenants). Such notice shall be prepared by Buyer and
approved by Seller, shall notify the tenants of the sale and transfer and shall
contain appropriate instructions relating to the payment of future rentals, the
giving of future notices, and other matters reasonably required by Buyer or
required by law. Unless a different procedure is required by applicable law, in
which event such laws shall be controlling, Buyer agrees to transmit or
otherwise deliver such letters to the tenants promptly after the Closing.
ARTICLE 8
CASUALTY AND CONDEMNATION
-------------------------
8.1 Casualty. If the Improvements are materially damaged by fire or any
other casualty and are not substantially restored to the condition immediately
prior to such casualty before the Closing Date, Buyer shall have the following
elections:
18
(a) to purchase the Property in its then condition and pay the
Purchase Price, in which event Seller shall pay over or assign to Buyer
as the case may be, on the Closing Date, (i) any deductible, (ii) rent
loss insurance proceeds and (iii) amounts recovered or recoverable by
Seller on account of any insurance as a result of such casualty up to
the amount of the Purchase Price, less any amounts reasonably expended
by Seller for partial restoration; or
(b) if any portion of the Improvements suffers damage in excess of
$350,000.00 from fire or any other casualty which Seller, in its sole
option, elects not to repair, to terminate this Agreement by giving
notice of termination to Seller on or before that date which is thirty
(30) days after the occurrence of the fire or other casualty or on the
Closing Date, whichever occurs first, in which event the Escrow Agent
shall return the Escrowed Amount to Buyer, this Agreement shall
terminate and neither Seller nor Buyer shall have any recourse against
the other (except to the extent such recourse arises in connection with
a provision of this Agreement which is intended to survive
termination).
8.2 Condemnation. If any substantial portion of or interest in the
Property shall be taken or is in the process of being taken by exercise of the
power of eminent domain or if any governmental authority notifies Seller prior
to the Closing Date of its intent to take or acquire any portion of or interest
in the Property (each an "EMINENT DOMAIN TAKING"), Seller shall give notice
promptly to Buyer of such event and Buyer shall have the option to terminate
this Agreement by providing notice to Seller to such effect on or before the
date which is ten (10) days from Seller's notice to Buyer of such Eminent Domain
Taking or on the Closing Date, whichever occurs first, in which event the Escrow
Agent shall return the Escrowed Amount to Buyer, this Agreement shall terminate,
and neither Seller nor Buyer shall have any recourse against the other (except
to the extent such recourse arises in connection with a provision of this
Agreement which is intended io survive termination). If Buyer does not timely
notify Seller of its election to terminate this Agreement, Buyer shall purchase
the Property and pay the Purchase Price, and Seller shall pay over or assign to
Buyer on delivery of the deed awards recovered or recoverable by Seller on
account of such Eminent Domain Taking up to the amount of the Purchase Price,
less any amounts reasonably expended by Seller in obtaining such award.
"Substantial portion or interest" shall mean (i) a portion of the Property
valued in excess of $350,000.00 or (ii) a portion of the parking area such that
the Property is no longer in compliance with zoning requirements.
ARTICLE 9
BROKERAGE COMMISSIONS
---------------------
Seller and Buyer each mutually represent and warrant to the other that
they have not dealt with, and are not obligated to pay, any fees or commissions
to any broker in connection with the transaction contemplated by this Agreement
other than Insignia/ESG, Inc. (the "BROKER"). Seller
19
agrees to pay all commissions, payments and fees due to the Broker at the
Closing. Buyer agrees to indemnify, defend and hold Seller harmless from and
against all loss, liabilities, costs, damages and expenses (including reasonable
attorneys' fees) arising from any claims for brokerage or finder's fees,
commissions or other similar fees in connection with the transaction covered by
this Agreement insofar as such claims shall be based upon alleged arrangements
or agreements made by Buyer or on Buyer's behalf. Seller hereby agrees to
indemnify, defend and hold Buyer harmless from and against all loss,
liabilities, costs, damages and expenses (including reasonable attorneys' fees)
arising from any claims for brokerage or finders' fees, commissions or other
similar fees, including any claim made by the Broker, in connection with the
transaction covered by this Agreement as such claims shall be based upon alleged
arrangements or agreements made by Seller or on Seller's behalf. The covenants
and agreements contained in this Article shall survive the termination of this
Agreement or the Closing of the transaction contemplated hereunder.
ARTICLE 10
DEFAULT, TERMINATION AND REMEDIES
---------------------------------
10.1 Seller's Default. In the event that Seller shall have failed in
any material respect adverse to Buyer as of the Closing Date to have performed
any of the covenants and agreements contained in this Agreement which are to be
performed by Seller on or before the Closing Date or Seller defaults in its
obligation to close hereunder, Buyer shall have the right to terminate this
Agreement and receive (a) the Escrowed Amount and (b) reimbursement for actual
costs incurred by Buyer in conducting its due diligence pursuant to this
Agreement in a total amount not to exceed $35,000.00, whereupon this Agreement
shall terminate without further recourse. Buyer hereby waives and relinquishes
any right to ▇▇▇ Seller for any reason whatsoever, and agrees that Seller shall
not be liable to Buyer for any actual, punitive, speculative, consequential or
other damages for breach by Seller prior to the Closing, except for payment of
the Escrowed Amount. IN NO EVENT SHALL SELLER, ITS DIRECT OR INDIRECT PARTNERS,
SHAREHOLDERS, OWNERS OR AFFILIATES, ANY OFFICER, DIRECTOR, EMPLOYEE OR AGENT OF
THE FOREGOING, OR ANY AFFILIATE OR CONTROLLING PERSON THEREOF, HAVE ANY
LIABILITY BEYOND ITS INTEREST IN THE PROPERTY FOR ANY CLAIM, CAUSE OF ACTION OR
OTHER LIABILITY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE PROPERTY,
WHETHER BASED ON COMMON LAW, CONTRACT, STATUTE, EQUITY OR OTHERWISE.
10.2 Buyer's Default. In the event that Buyer shall have failed in any
material respect adverse to Seller as of the Closing Date to have performed any
of the covenants and agreements contained in this Agreement which are to be
performed by Buyer on or before the Closing Date, or if Buyer defaults in its
obligation to close hereunder, Seller shall be entitled to receive the Escrowed
Amount as liquidated damages, in lieu of all other remedies available to Seller
at law or
20
in equity for such default, and Buyer shall direct the Escrow Agent to release
the Escrowed Amount to Seller. Seller and Buyer agree that the damages resulting
to Seller as a result of such default by Buyer as of the date of this Agreement
are difficult or impossible to ascertain and the liquidated damages set forth in
the preceding sentence constitute Buyer's and Seller's reasonable estimate of
such damages.
10.3 Indemnity. Buyer agrees to indemnify, hold harmless and defend
Seller from and against any and all claims, demands, causes of action, loss,
liabilities, damages, costs and expenses (including reasonable attorneys' fees
and court costs) of every kind and character asserted against or incurred by
Seller at any time and from time to time by reason of or arising as a result of
the ownership, occupancy, operation, use, and/or maintenance of the Property by
Buyer for the period from and after the Closing Date. Seller agrees to
indemnify, hold harmless and defend Buyer from and against any and all claims,
demands, causes of action, loss, liabilities, damages, costs and expenses
(including reasonable attorneys' fees and court costs) of every kind and
character asserted against or incurred by Buyer at any time and from time to
time by reason of or arising as a result of the ownership, occupancy, operation,
use, and/or maintenance of the Property by Seller for the period prior to the
Closing Date. Each indemnifying party shall be given notice of any claims by the
indemnified party. The provisions of this Section 10.3 shall survive the
Closing.
ARTICLE 11
REPRESENTATIONS AND WARRANTIES
------------------------------
11.1 Buyer's Representations and Warranties. Buyer represents and
warrants to Seller that:
(a) Buyer is a corporation, duly organized and in good standing
under the laws of the Commonwealth of Virginia, is qualified to do
business in the Commonwealth of Virginia and has the power and
authority to enter into this Agreement and to execute and deliver this
Agreement and to perform all duties and obligations imposed upon it
hereunder. As of the date of this Agreement, Buyer has obtained all
necessary corporate, partnership or other organizational authorizations
required in connection with the execution and delivery of this
Agreement. Each of the individuals executing this Agreement on Buyer's
behalf is authorized to do so. Buyer has the financial ability to pay
the Purchase Price by tendering the Cash Balance, and to perform the
other covenants of Buyer set forth in this Agreement.
(b) Neither the execution nor the delivery of this Agreement, nor
the consummation of the purchase and sale transaction contemplated
hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement conflict with or will result in the breach
of any of the terms, conditions or provisions of any agreement
21
or instrument to which Buyer is a party or by which Buyer or any of
Buyer's assets is bound;
(c) Buyer is not in any way affiliated with Seller;
(d) No approval, consent, order or authorization of, or
designation, registration or declaration with, any of the United
States, the Commonwealth of Virginia, any department, board, agency,
office, commission or other subdivisions thereof, or any official
thereof or any third party is required in connection with the valid
execution and delivery of, and performance of the covenants of, this
Agreement by Buyer.
(e) There are no actions, suits or proceedings pending or, to the
knowledge of Buyer, threatened, against or affecting Buyer which, if
determined adversely to Buyer, would adversely affect its ability to
perform its obligations hereunder.
As a condition precedent to Seller's obligation to close the purchase
and sale transaction contemplated in this Agreement, Buyer's representations and
warranties contained herein must remain and be true and correct as of the
Closing Date. Prior to the Closing Date, Buyer shall notify Seller in writing of
any facts, conditions or circumstances which render any of the representations
and warranties set forth in this Section 11.1 in any way inaccurate, incomplete,
incorrect or misleading.
11.2 Seller's Representations and Warranties. Seller is a general
partnership existing under the laws of the Commonwealth of Virginia.
(a) Seller has full right, power and authority and is duly
authorized to enter into this Agreement, to perform each of the
covenants on its part to be performed hereunder and to execute and
deliver, and to perform its obligations under all documents required to
be executed and delivered by it pursuant to this Agreement and this
Agreement constitutes the valid and binding obligation of Seller
enforceable in accordance with its terms.
(b) Seller has directed its manager to deliver or to make available
to Buyer (i) complete copies of all Leases and (ii) the Rent Roll.
(c) Seller has caused its property manager to deliver or to make
available copies of all Property Contracts.
(d) Seller has not been served with notice of any actions, suits,
or proceedings against or affecting the Seller or the Property that
either (i) are not covered by applicable insurance or (ii) if
determined adversely to Seller would materially affect the ownership or
22
operation of the Property or Seller's ability to perform its
obligations under this Agreement.
Seller reserves the right to update the representations and warranties
made by it herein. All of Seller's representations and warranties shall be
deemed to be updated by information disclosed to or obtained by Purchaser in
connection with its due diligence investigations.
11.3 Seller: Seller's Knowledge. Whenever a representation is made to
"Seller's knowledge", or a term of similar import, the accuracy of such
representation shall be based solely on the actual knowledge of ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇"), without independent investigation or inquiry except for
inquiry of Seller's property manager for the Property. ▇▇▇▇▇▇▇▇ is an officer of
a general partner of Seller who has had primary responsibility for the sale of
the Property to Buyer. Notwithstanding the foregoing, if, prior to the Closing,
Buyer obtains actual knowledge that any representation or warranty of Seller is
inaccurate and Buyer nonetheless proceeds with the Closing, Seller shall have no
liability for any such matter regarding which Buyer had actual knowledge prior
to Closing.
11.4 Property Conveyed "AS IS". (a) NOTWITHSTANDING ANYTHING CONTAINED
HEREIN TO THE CONTRARY, IT IS UNDERSTOOD AND AGREED THAT, EXCEPT AS EXPRESSLY
SET FORTH HEREIN, SELLER AND ITS PROPERTY MANAGER HAVE NOT MADE AND ARE NOT NOW
MAKING, AND THEY SPECIFICALLY DISCLAIM, ANY OTHER WARRANTIES, REPRESENTATIONS OR
GUARANTIES OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST,
PRESENT OR FUTURE, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO,
WARRANTIES, REPRESENTATIONS OR GUARANTEES AS TO (I) MATTERS OF TITLE (OTHER THAN
SELLER'S WARRANTY. OF TITLE SET FORTH IN THE DEED (HEREINAFTER DEFINED) TO BE
DELIVERED AT CLOSING), (II) ENVIRONMENTAL MATTERS RELATING TO THE PROPERTY OR
ANY PORTION THEREOF, (III) GEOLOGICAL CONDITIONS, INCLUDING, WITHOUT LIMITATION,
SUBSIDENCE, SUBSURFACE CONDITIONS, WATER TABLE, UNDERGROUND WATER RESERVOIRS,
LIMITATIONS REGARDING THE WITHDRAWAL OF WATER, AND EARTHQUAKE FAULTS AND THE
RESULTING DAMAGE OF PAST AND/OR FUTURE EARTHQUAKES, (IV) WHETHER, AND TO THE
EXTENT TO WHICH THE PROPERTY OR ANY PORTION THEREOF IS AFFECTED BY ANY STREAM
(SURFACE OR UNDERGROUND), BODY OF WATER, FLOOD PRONE AREA, FLOOD PLAIN, FLOODWAY
OR SPECIAL FLOOD HAZARD, (V) DRAINAGE, (VI) SOIL CONDITIONS, INCLUDING THE
EXISTENCE OF INSTABILITY, PAST SOLID REPAIRS, SOIL ADDITIONS OR CONDITIONS OF
SOIL FILL, OR SUSCEPTIBILITY TO LANDSLIDES, OR THE SUFFICIENCY OF ANY
UNDERSHORING, (VII) ZONING TO WHICH THE PROPERTY OR ANY PORTION THEREOF MAY BE
SUBJECT, (VIII) THE AVAILABILITY OF ANY UTILITIES TO THE PROPERTY OR ANY PORTION
23
THEREOF INCLUDING, WITHOUT LIMITATION, WATER, SEWAGE, GAS AND ELECTRIC, (IX)
USAGES OF ADJOINING PROPERTY, (X) ACCESS TO THE PROPERTY OR ANY PORTION THEREOF,
(XI) THE VALUE, COMPLIANCE WITH THE PLANS AND SPECIFICATIONS, SIZE, LOCATION,
AGE, USE, DESIGN, QUALITY, DESCRIPTION, SUITABILITY, STRUCTURAL INTEGRITY,
OPERATION, TITLE TO, OR PHYSICAL OR FINANCIAL CONDITION OF THE PROPERTY OR ANY
PORTION THEREOF, OR ANY INCOME, EXPENSES, CHARGES, LIENS, ENCUMBRANCES, RIGHTS
OR CLAIMS ON OR AFFECTING OR PERTAINING TO THE PROPERTY OR ANY PART THEREOF, OR
ANY INCOME, EXPENSES, CHARGES, LIENS, ENCUMBRANCES, RIGHTS OR CLAIMS ON OR
AFFECTING OR PERTAINING TO THE PROPERTY OR ANY PART THEREOF, (XII) THE PRESENCE
OF HAZARDOUS SUBSTANCES (HEREINAFTER DEFINED) IN OR ON, UNDER OR IN THE VICINITY
OF THE PROPERTY, (XIII) THE CONDITION OR USE OF THE PROPERTY OR COMPLIANCE OF
THE PROPERTY WITH ANY OR ALL PAST, PRESENT OR FUTURE FEDERAL, STATE OR LOCAL
ORDINANCES, RULES, REGULATIONS OR LAWS, BUILDING, FIRE OR ZONING ORDINANCES,
CODES OR OTHER SIMILAR LAWS, (XIV) THE EXISTENCE OR NON-EXISTENCE OF UNDERGROUND
STORAGE TANKS, (XV) ANY OTHER MATTER AFFECTING THE STABILITY OR INTEGRITY OF THE
REAL PROPERTY, (XVI) THE POTENTIAL FOR FURTHER DEVELOPMENT OF THE PROPERTY,
(XVII) THE EXISTENCE OF VESTED LAND USE, ZONING OR BUILDING ENTITLEMENTS
AFFECTING THE PROPERTY, (XVIII) THE MERCHANTABILITY OF THE PROPERTY OR FITNESS
OF THAT PROPERTY FOR ANY PARTICULAR PURPOSE (BUYER AFFIRMING THAT BUYER HAS NOT
RELIED ON SELLER'S OR ITS PROPERTY MANGER'S SKILL OR JUDGMENT TO SELECT OR
FURNISH THE PROPERTY FOR ANY PARTICULAR PURPOSE, AND THAT SELLER MAKES NO
WARRANTY THAT THE PROPERTY IS FIT FOR ANY PARTICULAR PURPOSE), OR (XIX) TAX
CONSEQUENCES.
(b) BUYER HAS NOT RELIED UPON AND WILL NOT RELY UPON, EITHER
DIRECTLY OR INDIRECTLY, ANY REPRESENTATION OR WARRANTY OF SELLER OR ITS PROPERTY
MANAGER OR ANY OF THEIR RESPECTIVE AGENTS, EXPECT AS EXPRESSLY SET FORTH HEREIN,
AND ACKNOWLEDGES THAT NO OTHER SUCH REPRESENTATIONS HAVE BEEN MADE. BUYER
REPRESENTS THAT IT IS A KNOWLEDGEABLE, EXPERIENCED AND SOPHISTICATED BUYER OF
REAL ESTATE AND THAT IT IS RELYING SOLELY ON ITS OWN EXPERTISE AND THAT OF
BUYER'S CONSULTANTS IN PURCHASING THE PROPERTY. BUYER WILL CONDUCT SUCH
INSPECTIONS AND INVESTIGATIONS OF THE PROPERTY AS BUYER DEEMS NECESSARY,
INCLUDING, BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS
THEREOF, AND SHALL RELY UPON SAME. UPON CLOSING, BUYER SHALL ASSUME THE RISK
THAT ADVERSE MATTERS, INCLUDING, BUT NOT LIMITED TO, ADVERSE PHYSICAL AND
ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY
24
BUYER'S INSPECTIONS AND INVESTIGATIONS. BUYER ACKNOWLEDGES AND AGREED THAT UPON
CLOSING, SELLER SHALL SELL AND CONVEY TO BUYER AND BUYER SHALL ACCEPT THE
PROPERTY "AS IS, WHERE ISI~, WITH ALL FAULTS. BUYER FURTHER ACKNOWLEDGES AND
AGREES THAT THERE ARE NO ORAL AGREEMENTS, WARRANTIES OR REPRESENTATIONS,
COLLATERAL TO OR AFFECTING THE PROPERTY BY SELLER, ANY AGENT OF SELLER OR ANY
THIRD PARTY. THE TERMS AND CONDITIONS OF THIS SECTION 11.4(B) SHALL EXPRESSLY
SURVIVE THE CLOSING, NOT MERGE WITH THE PROVISIONS OF ANY CLOSING DOCUMENTS AND
SHALL BE INCORPORATED INTO THE DEED. SELLER IS NOT LIABLE OR BOUND IN ANY MANNER
BY ANY ORAL OR WRITTEN STATEMENTS, REPRESENTATIONS, OR INFORMATION PERTAINING TO
THE PROPERTY FURNISHED BY ANY REAL ESTATE BROKER, AGENT, EMPLOYEE, SERVANT OR
OTHER PERSON, UNLESS THE SAME ARE SPECIFICALLY SET FORTH OR REFERRED TO HEREIN.
BUYER ACKNOWLEDGES THAT THE PURCHASE PRICE REFLECTS THE "AS IS" NATURE OF THIS
SALE AND ANY FAULTS, LIABILITIES, DEFECTS OR OTHER ADVERSE MATTERS THAT MAY BE
ASSOCIATED WITH THE PROPERTY. BUYER HAS FULLY REVIEWED THE DISCLAIMERS AND
WAIVERS SET FORTH IN THE THIS AGREEMENT WITH ITS COUNSEL AND UNDERSTANDS THE
SIGNIFICANCE AND EFFECT THEREOF.
GGR
----------------
Buyer's Initials
ARTICLE 12
MISCELLANEOUS
-------------
12.1 Successors and Assigns. Without the prior written consent of
Seller, Buyer shall not, directly or indirectly, assign this Agreement or any of
its rights hereunder. Any attempted assignment in violation hereof shall, at the
election of Seller in its sole discretion, be of no force or effect and shall
constitute a default by Buyer. Notwithstanding the foregoing Buyer may elect to
have a nominee entity accept title to the Property at Closing, provided that any
such nominee must be an affiliated entity controlled by or under common control
with Buyer, and Buyer shall give written notice of such nominee to Seller,
together with any reasonable evidence of affiliation requested by Seller, a
minimum of fifteen (15) days prior to Closing. No designation of a nominee to
receive title shall release Buyer from its obligations under this Agreement.
12.2 Notices. Except as otherwise specifically provided herein, any
notice required or permitted to be delivered under this Agreement shall be in
writing and shall be deemed given (i) when delivered or refused if sent by hand
during regular business hours, (ii) three (3) days after being sent by United
States Postal Service, registered or certified mail, postage prepaid, return
25
receipt requested, or (iii) on the next business day when sent by a reputable
overnight express mail service that provides tracing and proof of receipt or
refusal of items mailed, addressed to Seller or Buyer, as the case may be, at
the address or addresses set forth below or such other addresses as the parties
may designate in a notice similarly sent. Any notice given by a party to Escrow
Agent shall be simultaneously given to the other party. Any notice given by a
party to the other party relating to its entitlement to the Escrowed Amount
shall be simultaneously given to the Escrow Agent.
(1) If to Seller:
c/▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Properties Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President
and
Mr. ▇▇▇▇▇ ▇▇▇▇
CTJ Real Estate, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇, Procter & ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
(2) If to Buyer:
Cornerstone Realty Group, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇ ▇. Remppies
26
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(3) If to the Escrow Agent:
▇▇▇▇ ▇▇▇▇▇▇▇
Commonwealth Land Title Insurance Company
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
12.3 Construction. Words of any gender used in this Agreement shall be
held and construed to include any other gender, and words of a singular number
shall be held to include the plural and vice versa, unless the context requires
otherwise.
12.4 Captions. The captions used in connection with the Articles of
this Agreement are for convenience only and shall not be deemed to extend, limit
or otherwise define or construe the meaning of the language of this Agreement.
12.5 No Other Parties. Nothing in this Agreement, express or implied,
is intended to confer upon any person, other than the parties hereto and their
respective successors and assigns, any rights or remedies under or by reason of
this Agreement.
12.6 Amendments. This Agreement may be amended only by a written
instrument executed by Seller and Buyer (or Buyer's assignee or transferee).
12.7 Severability. If any provision of this Agreement or application
to any party or circumstance shall be determined by any court of competent
jurisdiction to be invalid and unenforceable to any extent, the remainder of
this Agreement or the application of such provision to such person or
circumstances, other than those as to which it is so determined invalid or
unenforceable, shall not be affected thereby, and each provision hereof shall be
valid and shall be enforced to the fullest extent permitted by law.
27
12.8 Applicable Law. This Agreement shall be construed under and in
accordance with the laws of state in which the Property is located.
12.9 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be an original but such counterparts together
shall constitute one and the same instrument notwithstanding that both Buyer and
Seller are not signatory to the same counterpart.
12. 10 Time of the Essence. Time is expressly declared to be of the
essence of this Agreement, provided, however that in the event any date
hereunder falls on a Saturday, Sunday or legal holiday, the date applicable
shall be the next business day.
12.11 No Personal Liability. The obligations of Seller hereunder shall
be binding only on the Property and neither Buyer nor anyone claiming by,
through or under Buyer shall be entitled to obtain any judgment extending
liability beyond the Property or creating personal liability on the part of the
partners of the Seller or of the officers, directors, shareholders, advisors or
agents-of Seller or Seller's partners or any of their successors.
12.12 No Recordation. Without the prior written consent of Seller,
there shall be no recordation of either this Agreement or any memorandum hereof,
or any affidavit pertaining hereto, and any such recordation of this Agreement
or memorandum hereto by Purchaser without the prior written consent of Seller
shall constitute a default hereunder by Buyer, whereupon this Agreement shall,
at the option of Seller, terminate and be of no further force and effect. Upon
termination, the Escrowed Amount shall be immediately delivered to Seller,
whereupon the parties shall have no further duties or obligations to one another
except as otherwise specifically provided herein.
12.13 Waiver. The excuse or waiver of the performance by a party of
any obligation of the other party under this Agreement shall only be effective
if evidenced by a written statement signed by the party so excusing or waiving.
No delay in exercising any right or remedy shall constitute a waiver thereof,
and no waiver by Seller or Buyer of the breach of any covenant of this Agreement
shall be construed as a waiver of any preceding or succeeding breach of the same
or any other covenant or condition of this Agreement.
12.14 Binding On Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
12.15 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the transactions
contemplated herein, and it supersedes all prior discussions, understandings or
agreements between the parties. All Exhibits and Schedules attached hereto are a
part of this Agreement and are incorporated herein by reference.
28
12.16 Construction of Agreement. This Agreement shall not be construed
more strictly against one party than against the other merely by virtue of the
fact that it may have been prepared primarily by counsel for one of the parties,
it being recognized that both Buyer and Seller have contributed substantially
and materially to the preparation of this Agreement.
12.17 Further Instruments. Each party, promptly upon the request of
the other, shall execute and have acknowledged and delivered to the other or to
Escrow Agent, as may be appropriate, any and all further instruments reasonably
requested or appropriate to evidence or give effect to the provisions of this
Agreement and which are consistent with the provisions of this Agreement.
12.18 Buyer Represented by Counsel. Buyer hereby represents and
warrants to Seller that (i) Buyer is not in a significantly disparate bargaining
position in relation to Seller, (ii) Buyer is represented by legal counsel in
connection with the transaction contemplated by this Agreement, and (iii) Buyer
is buying the Property for business, commercial, investment or other similar
purpose and not for use as Buyer's residence.
12.19 Preparation of Documents. All of the documents to be executed at
the Closing shall be in the form prepared to the reasonable satisfaction of
Seller's and Buyer's counsel and delivered to Buyer on or before five (5) days
prior to the Closing Date, provided that the failure to timely deliver such
documents shall not constitute a default by Seller hereunder.
12.20 Public Entity. Seller acknowledges that Buyer is a public entity
and that it is required to furnish financial statements to the Securities and
Exchange Commission in connection with this acquisition. To the extent available
and in Seller's possession, Seller agrees, from the date of this Agreement and
for a period of ninety (90) days following the Closing Date, 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. In
addition, Seller agrees to submit to the form of letter attached hereto as
Schedule E to the property manager for signature.
ARTICLE 13
IRS FORM 1099-S DESIGNATION
---------------------------
In order to comply with information reporting requirements of Section
6045(e) of the Internal Revenue Code of 1986, as amended, and the Treasury
Regulations thereunder, the parties agree (1) to execute an IRS Form 1099-S
Designation Agreement in the form attached hereto as Schedule D at or prior to
the Closing to designate the Escrow Agent (the "DESIGNEE") as the party who
shall be responsible for reporting the contemplated sale of the Property to the
Internal Revenue Service (the "IRS") on IRS Form 1099-S; (2) to provide the
Designee with the information necessary to complete Form 1099-S; (3) that the
Designee shall not be liable for the
29
actions taken under this Agreement, or for the consequences of those actions,
except as they may be the result of gross negligence or willful misconduct on
the part of the Designee; and (4) that the Designee shall be indemnified by the
parties for any costs or expenses incurred as a result of the actions taken
hereunder, except as they may be the result of gross negligence or willful
misconduct on the part of the Designee. The Designee shall provide all parties
to this transaction with copies of the IRS Forms 1099-S filed with the IRS and
with any other documents used to complete IRS Form 1099-S.
[Signatures on next page.]
30
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first set forth above.
SELLER:
RICHMOND GABLES ASSOCIATES, a Virginia general
partnership
By: PaineWebber Equity Partners Two Limited
Partnership, a Virginia limited partnership,
general partner
By: Second Equity Partners, Inc., a
Delaware corporation, managing general
partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
31
BUYER:
CORNERSTONE REALTY GROUP, INC., a Virginia
corporation
By: /s/ ▇▇▇ ▇. Remppies
-----------------------------------
Name: ▇▇▇ ▇. Remppies
Title: Vice President
32