AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT OF PURCHASE AND SALE (this "Agreement") is made by and
between CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP, a
Connecticut limited partnership ("Seller"), and Ronald Gottlieb and/or Assigns
("Purchaser"), as of the "Effective Date" (as defined below).
Article I.
Property
Seller hereby agrees to sell, and Purchaser hereby agrees to buy, all
of the following property: (a) a parcel of real property (the "Land"), located
in Cincinnati, Ohio, more particularly described on Exhibit A attached to this
Agreement; (b) the buildings and other improvements located on the Land, being
an apartment complex generally known as Versailles Village Apartments,
consisting of a 180-unit apartment complex comprised of 16 buildings plus a
leasing office/clubhouse (the "Improvements"); (c) all tenant leases relating to
the Improvements, being the leases referred to on the Rent Roll attached hereto
as Exhibit B (the Land, Improvements, and tenant leases are referred to herein,
collectively, as the "Real Property"); and (d) all fixtures, equipment, and
other personal property (both tangible and intangible, including, without
limitation, any service and maintenance agreements applicable thereto, other
than the property management agreement, which shall be terminated) owned by
Seller and contained in or related to the Improvements (the "Personal Property")
(collectively, the Real Property and the Personal Property are sometimes
referred to herein as the "Property"). Seller will cooperate with Purchaser to
permit Purchaser to continue using the same telephone number currently in use on
the Property.
Article II.
Purchase Price and Deposits
The purchase price which the Purchaser agrees to pay and the Seller
agrees to accept for the Property shall be the sum of Seven Million Two Hundred
Thousand Dollars ($7,200,000.00) (hereinafter referred to as the "Purchase
Price"), subject to adjustment as provided in Article V hereof, payable as
follows:
(a) An earnest money deposit ("Deposit") of Fifty Thousand Dollars
($50,000.00), in cash, to be deposited with Chicago Title
Insurance Company, 46 E. Gay ST., Columbus, OH 43215 (the "Title
Company") within one (1) business day after execution hereof by
both parties, such amount to be held in escrow and deposited in
an interest-bearing account. The Deposit shall be non-refundable
except in the following instances:
(I) Seller is unable to, or chooses not to, cure Purchaser's
objections to the Survey, as described in Paragraph 6.4 of this
Agreement; or
(II) Seller is unable to, or chooses not to, cure Purchaser's
objections to the Title Commitment, as described in Paragraph 6.5
of this Agreement; or
(III) The environment report to be obtained by Purchaser pursuant to
Purchaser's acquisition of the property discloses substantial
environmental hazards not disclosed or included in the January,
1994 environmental report performed by Law Engineering and
Environmental Services, a copy of which has been provided to
Purchaser by Seller, and Seller is unable to, or chooses not to,
cure such hazards.
(b) An additional earnest money deposit (the "Additional Deposit")
of _One Hundred Thousand Dollars ($100,000.00), in cash, to be
deposited by Purchaser with the Title Company, within one (1)
business day after expiration of the Feasibility Period
(hereinafter defined), such amount to be held in escrow and
deposited in an interest-bearing account (the Earnest Deposit
and the Additional Deposit, with interest thereon, will be
referred to hereinafter, collectively, as the "Deposit"); and
(c) The balance of the Purchase Price shall be paid at time of Closing
by Federal wire transfer, with the transfer of funds to Seller to
be completed on the day of the Closing.
The Deposit shall be paid to Seller at the Closing as a credit
against the Purchase Price. Purchaser shall provide the Title
Company with its tax identification number, and all interest shall
be for Purchaser's account for tax purposes. Purchaser will
receive all interest earned on the earnest money deposit.
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In addition to the Deposit, Purchaser shall deposit three (3)
fully executed copies of this Agreement with the Title Company
immediately after both parties have executed it. The Title Company
shall retain one copy of this Agreement and deliver one copy
hereof to each of Purchaser and Seller.
Article III.
Failure to Close
3.1 Purchaser's Default. If Seller has complied with all of the
covenants and conditions contained herein and is ready, willing and
able to convey the Property in accordance with this Agreement and
Purchaser fails to consummate this Agreement and take title, then the
parties hereto recognize and agree that the damages that Seller will
sustain as a result thereof will be substantial, but difficult if not
impossible to ascertain. Therefore, the parties agree that, in the
event of Purchaser's default, Seller shall, as its sole remedy, be
entitled to retain the Deposit as liquidated damages, and neither party
shall have any further rights or obligations with respect to the other
under this Agreement, except for the Surviving Covenants (hereinafter
defined).
3.2 Seller's Default. In the event that Purchaser has complied with all
of the covenants and conditions contained herein and is ready, willing
and able to take title to the Property in accordance with this
Agreement, and Seller fails to consummate this Agreement and convey
title as set forth herein, then Purchaser may, as its sole remedy,
either (I) terminate this Agreement and recover the Deposit, or (II)
enforce specific performance of this Agreement in accordance with and
subject to its terms.
Article IV.
Closing and Transfer of Title
4.1 Closing. The parties hereto agree to conduct a closing of this sale
(the "Closing") on or before 10:00 a.m. on November 15, 1999 ("Closing
Date") in the principal office of ___________________________, or at
such other place as may be agreed upon by the parties hereto. This
Agreement shall terminate if transfer of title is not completed by the
Closing Date (unless such failure to close is due to Seller's default,
the date for Closing is extended pursuant to any provision hereof,
including, without limitation, the matters described in Sections 6.3,
6.4, 6.5 and Article VII hereof, or the date for Closing is extended by
agreement of the parties, which agreement shall be confirmed in
writing). Notwithstanding the foregoing, or any other provision herein,
Seller shall have no obligation to close if the closing and transfer of
title does not occur on or prior to November 30, 1999, unless such
failure to close is due solely to the default of Seller.
4.2 Closing Procedure. Seller shall execute and deliver or cause to be
delivered (a) a Special Warranty Deed, in the form attached hereto as
Exhibit C, proper for recording, conveying Seller's interest in the
Real Property to Purchaser, subject, however, to (I) restrictions as
reported in the Title Commitment (defined in Section 6.5) or shown on
the Survey (as defined in Section 6.4) and either approved by Purchaser
or as to which objection has been waived by Purchaser, (II) taxes not
yet due and payable, (III) the rights of lessees and licensees of space
in the Improvements at the time of Closing (to the extent shown on the
Rent Roll), and (iv) any encumbrances created or permitted by the terms
of this Agreement; (b) a Bill of Sale in the form attached hereto as
Exhibit D, dated as of the date of Closing conveying to Purchaser any
and all Personal Property; (c) an Assignment of Leases in the form
attached hereto as Exhibit E, dated the date of Closing, assigning all
of the landlord's right, title and interest in and to any tenant and
other leases covering all or any portion of the Real Property; (d)
Tenant Notification Agreements (the "Tenant Notices"), dated the date
of the Closing, executed by Seller, and complying with applicable
statutes in order to relieve Seller of liability for tenant security
deposits (provided the security deposits are paid to Purchaser),
notifying the tenants of the Real Property that the Property has been
sold to Purchaser and directing the tenants to pay rentals to Purchaser
(or Purchaser's designated agent); (e) to the extent in Seller's
possession or under Seller's control, the originals of all leases and,
to the extent in Seller's possession or under Seller's control,
as-built plans and specifications and maintenance and service contracts
that are to be assumed; (f) an indemnification agreement (the
"Indemnification Agreement") in the form attached as Exhibit F, dated
the date of Closing; (i) an updated Rent Roll, in the form of the Rent
Roll attached hereto as Exhibit B, dated within fifteen (15) days of
the date of the Closing; (j) an affidavit
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that Seller is not a "foreign person" in the form attached as Exhibit
G; (k) a master key or duplicate key for all locks in the Improvements;
and (l) to the extent in the possession of Seller or Seller's property
management company, all maintenance records.
4.3 Purchaser's Performance. At the Closing, Purchaser will cause the
Purchase Price to be delivered to the Title Company, will execute and
deliver the Tenant Notices, the Indemnification Agreement, the
Assignment of Leases, and the Bill of Sale.
4.4 Evidence of Authority; Miscellaneous. Both parties will deliver to
the Title Company and each other such evidence or documents as may
reasonably be required by the Title Company or either party hereto
evidencing the power and authority of Seller and Purchaser and the due
authority of, and execution and delivery by, any person or persons who
are executing any of the documents required hereunder in connection
with the sale of the Property. Both parties will execute and deliver
such other documents as are reasonably required to effect the intent of
this Agreement.
Article V
Prorations of Rents, Taxes, Etc.
Real estate taxes and assessments not yet due and payable through the
date of Closing shall be prorated as of the date of Closing either
using actual tax figures or, if actual figures are not available, then
using as a basis for said proration the most recent assessed value of
the Real Property multiplied by the current tax rate, with a subsequent
cash adjustment to be made between Purchaser and Seller when actual tax
figures are available. Personal property taxes, annual permit or
inspection fees, sewer charges and other expenses normal to the
operation and maintenance of the Property shall also be prorated as of
the date of Closing. Rents that have been collected for the month of
the Closing will be prorated at the Closing, effective as of the date
of Closing. With regard to rents that are delinquent as of the date of
Closing, (I) no proration will be made at the Closing, (II) Purchaser
will make a good faith effort after the Closing to collect the rents in
the usual course of Purchaser's operation of the Property, and (III)
Purchaser will apply all rents collected first to the current rents and
the excess amount, if any, shall be applied to the delinquent rent owed
to Seller. It is agreed, however, that Purchaser will not be obligated
to institute any lawsuit or other collection procedures to collect
delinquent rents. Rents collected by Purchaser after the Closing Date,
to which Seller is entitled, shall be promptly paid to Seller.
As of the Closing Date, Purchaser shall be entitled to a credit for any
tenant deposits under the leases. Final readings on all gas, water and
electric meters shall be made as of the date of closing, if possible.
If final readings are not possible, gas, water and electricity charges
will be prorated based on the most recent period for which costs are
available. Any deposits made by Seller with utility companies shall be
returned to Seller. Purchaser shall be responsible for making all
arrangements for the continuation of utility services. After the
Closing, Purchaser will assume full responsibility for all security
deposits and advance rental deposits of current tenants of the Real
Property currently held by Seller, which items will be itemized by
Seller and transferred and paid over to Purchaser at the Closing.
Except as otherwise specifically provided above with respect to real
estate taxes and assessments, all items (including taxes) that are not
subject to an exact determination shall be estimated by the parties.
When any item so estimated is, after the Closing capable of exact
determination, the party in possession of the facts necessary to make
the determination shall send the other party a detailed report on the
exact determination so made and the parties shall adjust the prior
estimate within thirty (30) days after both parties have received said
reports.
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ARTICLE VI.
Purchaser Inspections and Contingencies
6.1 Document Inspection. Seller has made or will make available to
Purchaser within ten (10) days from the Effective Date of this
Agreement the following items relating to the Real Property
for review by Purchaser:
(1) Copies of all service and maintenance agreements;
(2) A Rent Roll prepared as of the first day of the month in which
this Agreement is executed, reflecting, as of the date
thereof, with respect to each tenant of the Real Property: (I)
apartment number; (II) name of tenant; (III) monthly rental;
(IV) the amount of such tenant's security deposit (and any
other deposits), if any; (V) the date through which the
tenant's rental is paid; (VI) the expiration date of such
tenant's lease; (VII) any rents or other charges in arrears or
prepaid thereunder and the period for which such rents and
other charges are in arrears or have been prepaid; and (VIII)
the utilities which are furnished as part of the rent.
(3) Copies of all tenant leases;
(4) Copies of any certificates of occupancy (to the extent in
Seller's or its property manager's possession);
(5) Copies of any major warranties currently in effect (if any and
to the extent available in Seller's or its property manager's
possession);
(6) Books and records of the Property in Seller's or its
property manager's possession; and
(7) Copies of any environmental or engineering studies in Seller's
possession.
(8) List of all personal property and equipment to be included in
the sale.
Purchaser agrees that if for any reason the Closing is not
consummated, Purchaser will immediately return to Seller all materials
furnished to Purchaser pursuant to this Section 6.1.
Purchaser further acknowledges and agrees that Seller's having made
available to Purchaser any information and material relating to the
Real Property constitutes a good faith undertaking only and does not
constitute a representation and warranty on the part of Seller with
respect to any such information and material.
6.2 Physical Inspection. In addition to the items set forth in Section
6.1, Seller will make the Property available for inspection by
Purchaser and Purchaser shall, at Purchaser's risk, conduct an
engineering and/or market and economic feasibility study of the
Property and undertake such physical inspection of the Property as
Purchaser deems appropriate as soon as possible after the Effective
Date of this Agreement. Such inspection shall be conducted at
reasonable times upon reasonable oral or written notice to Seller's
property manager. Seller shall have the right to designate a
representative to accompany Purchaser's employees, agents, and
independent contractors on any such inspections.
Purchaser hereby agrees to pay, protect, defend, indemnify and save
Seller harmless against all liabilities, obligations, claims (including
mechanic's lien claims), damages, penalties, causes of action,
judgments, costs and expenses (including, without limitation,
attorneys' fees and expenses) imposed upon, incurred by or asserted
against Seller in connection with or arising out of the entry upon the
Real Property by Purchaser's employees, agents or independent
contractors and the actions of such persons on the Real Property. In
the event any part of the Property is damaged or excavated by
Purchaser, its employees, agents or independent contractors, Purchaser
agrees in the event its purchase hereunder is not consummated, to make
such additional payments to Seller as may be reasonably required to
return the Property to its condition immediately prior to such damage
or excavation or, at Seller's option, to cause such work to be done.
Not withstanding any provision to the contrary herein, Purchaser's
obligations under this subparagraph shall survive the expiration or
termination of this Agreement, and shall survive Closing.
6.3. Feasibility Period. Purchaser shall have a period ending twenty
one (21) days after the Effective Date of this Agreement to conduct its
inspection of the documents delivered in accordance with Section 6.1
and to conduct a physical inspection of the Property as set forth in
Section 6.2 (the "Feasibility Period"). On or before the last day of
the Feasibility Period, Purchaser may, in its sole discretion without
obligation to specify which aspect of its inspection was
unsatisfactory, terminate this Agreement by providing a written notice
to Seller so providing. Upon receipt of such notice, this Agreement
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shall terminate and Seller shall instruct the Title Company to remit
the Deposit to Seller, unless the Deposit is determined to be
refundable to Purchaser due to one of the three conditions described in
Article II, paragraph (a)(I) to (a)(iii) of this Agreements, in which
case the Title Company shall be instructed to return the Deposit to
Purchaser. In either case, neither party hall have any obligation to
the other, except for the Surviving Covenants. If Purchaser fails to
provide such notice of termination on or before the last day of the
Feasibility Period, Purchaser shall be deemed to have approved such
inspections and this Agreement shall remain in full force and effect.
6.4. Survey Contingency. Purchaser's obligation to purchase the
Property is subject to its receipt, within ten (10) days of the
Effective Date of this Agreement, of a survey of the Real Property by a
registered surveyor (the "Survey") at Purchaser's sole cost and
expense. The Survey shall show the location of all improvements,
structures, driveways, parking areas, easements, rights of way, and any
encroachments and shall specify whether the Property is within the 100
year flood plain or flood way. The Survey shall further set forth a
legal description of the boundaries of the Real Property in accordance
with local practices. Seller will immediately provide Purchaser with a
copy of its most recent survey of the property.
Purchaser shall have until the earlier to occur of the last day of the
Feasibility Period or the date fifteen (15) days after the receipt of
the Survey by Purchaser to object in writing to the Survey, including
any objection to the boundaries set forth in the Survey and to the
legal description. This contingency shall be deemed satisfied or waived
if Seller has not received written notice of Purchaser's objection
before such date. Any such written notice shall state all of
Purchaser's objections with specificity. Upon receipt of such notice,
Seller may, but shall not be obligated to, cure such objections. If
Seller cures such objections within fifteen (15) days, or, if such
objections are such that they cannot be cured within such fifteen (15)
day period, and Seller has commenced curing such objections and
thereafter diligently proceeds to perfect such cure (but in no event
beyond forty-five (45) days unless agreed to by Purchaser), then this
Agreement shall continue in force and effect, and the Closing Date
shall be adjusted accordingly. If Seller is unable to, or chooses not
to, cure such objections within the time permitted, this Agreement
shall terminate, Seller shall instruct the Title Company to return the
Deposit less one-half the escrow fee charged by the Title Company, if
any, (the "Escrow Fee") to Purchaser, and neither party shall have any
further obligations hereunder except for the Surviving Covenants. Not
withstanding the foregoing, however, Purchaser may waive such
objections that Seller is unable to or chooses not to cure, and upon
receipt by Seller of such waiver in full from Purchaser within ten (10)
days of notice from Seller that it is unable or chooses not to cure
such objections, this Agreement shall remain in full force and effect
with no reduction in the Purchase Price.
If requested by Seller, Purchaser will confirm in writing whether
this survey contingency has been satisfied and, if so, the date on
which it was satisfied.
6.5. Title Contingency. Purchaser's obligation to purchase the Property
is subject to its receipt of a commitment for an Owner's Title
Insurance Policy (the "Title Commitment"), dated not earlier than the
Effective Date of this Agreement, issued by the Title Company, together
with legible copies of all items and documents referred to in the Title
Commitment. The Title Commitment and accompanying documents shall be
delivered by Seller within ten (10) days after the Effective Date of
this Agreement. The Title Commitment will commit the Title Company to
issue the Owner's Title Policy to Purchaser at the Closing in the
amount of the Purchase Price. Upon receipt of the Title Commitment and
accompanying documents by Purchaser, Purchaser shall have until the
earlier to occur of the last day of the Feasibility Period or the date
fifteen (15) days after receipt of all such items to state any
objections in writing. This contingency shall be deemed satisfied or
waived if such written notice of objection is not received by Seller
within such fifteen (15) day period. Such written notice of objection
shall state all of Purchaser's objections with specificity. Upon
receipt of such notice, Seller may, but shall not be obligated to, cure
such objection. If Seller cures such objections within fifteen (15)
days after receipt of such notice, or, if such objections are such that
they cannot be cured within fifteen (15) days and Seller has commenced
curing such objections and thereafter diligently proceeds to perfect
such cure, then this Agreement shall continue in full force and effect
and the Closing Date shall be adjusted accordingly. If Seller is unable
or chooses not to cure such objections within the time permitted, then
this Agreement shall terminate, and Seller shall instruct the Title
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Company to return the Deposit less one-half of the Escrow Fee, if any,
to Purchaser, and neither party shall have any further obligations
hereunder except for the Surviving Covenants. Not withstanding the
foregoing, however, Purchaser may waive such objections that Seller is
unable or chooses not to cure within ten (10) days after receipt of a
notice that Seller is unable or chooses not to cure such objections,
and upon receipt by Seller of such waiver in full from Purchaser, this
Agreement shall remain in full force and effect with no reduction in
the Purchase Price.
If requested by Seller, Purchaser will confirm in writing whether
this title contingency has been satisfied and, if so, the date on which
it was satisfied.
As a condition to Closing, the Title Company shall deliver to
Purchaser an A.L.T.A. Owner's Title Insurance Policy (the "Owner's
Title Policy") dated no earlier than the date of the recording of the
Deed, in the full amount of the Purchase Price, insuring that good and
indefeasible marketable fee simple title to the Real Property is vested
in Purchaser, containing no exceptions to such title other than the
standard printed exceptions (unless the same are deleted in connection
with Purchaser obtaining an A.L.T.A. Owner's Title Policy), and those
items listed on Schedule "B" of the Title Report that either were
approved by Purchaser or as to which objection has been expressly
waived by Purchaser or cured by Seller, and any other encumbrances
created or permitted by the terms of this Agreement (collectively, the
"Permitted Encumbrances"). If the Title Company, through no fault of
Seller, cannot deliver the Owner's Title Policy to Purchaser as
described herein, this Agreement shall terminate, and Seller shall
instruct the Escrow Holder to return the Deposit less one-half the
Escrow Fee, if any, to Purchaser, and neither party shall have any
further obligations hereunder except for the Surviving Covenants.
Article VII.
Loss due to Casualty or Condemnation
7.1 Loss due to Condemnation. In the event of a condemnation of all or
a Substantial Portion (as hereinafter defined) of the Real Property
which condemnation shall or would render a Substantial Portion of the
Real Property untenantable, or if any portion of the building or
parking area is taken, either party may, upon written notice to the
other party given within ten (10) days of receipt of notice of such
event, cancel this Agreement, in which event Seller shall instruct the
Title Company to return the Deposit to Purchaser, this Agreement shall
terminate and neither party shall have any rights or obligations here
under except for the Surviving Covenants. In the event that neither
party elects to terminate, or if the condemnation affects less than a
Substantial Portion or does not affect the building or parking area,
then this Agreement shall remain in full force and effect, and Seller
shall be entitled to all monies received or collected by reason of such
condemnation prior to Closing. In such event, the transaction hereby
contemplated shall close in accordance with the terms and conditions of
this Agreement except that there will be an abatement of the Purchase
Price equal to the amount of the net proceeds, less costs and
attorney's fees, which are received by Seller by reason of such
condemnation prior to Closing. If the condemnation proceeding shall not
have been concluded prior to the Closing, then there shall be no
abatement of the Purchase Price and Seller shall assign any interest it
has in the pending award to Purchaser. For purposes of this Section
7.1, a "Substantial Portion" shall mean a condemnation of in excess of
$770,000.00 in value of the Real Property.
7.2 Loss due to Casualty. In the event of Substantial Loss or Damage
(as hereinafter defined) to the Real Property by fire or other casualty
(not resulting from acts of Purchaser), either party may, upon written
notice to the other party given within ten (10) days of receipt of
notice of such event, cancel this Agreement in which event Seller shall
instruct the Title Company to return the Deposit to Purchaser and this
Agreement shall terminate and neither party shall have any rights or
obligations hereunder except for the Surviving Covenants. In the event
that neither party elects to terminate, or if the casualty results in
less than Substantial Loss or Damage, then this Agreement shall remain
in full force and effect and Seller shall be entitled to all insurance
proceeds received or collected by reason of such damage or loss,
whereupon the transaction hereby contemplated shall close in accordance
with the terms and conditions of this Agreement except that there will
be abatement of the Purchase Price equal to the amount of the net
proceeds, less costs and attorney's fees, which are received by Seller
as a result of such damage or loss, provided that such abatement will
be reduced by the amount expended by Seller in accordance with
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Article VIII hereof for restoration or preservation of the Property
following the casualty. Alternatively, Purchaser may, in its
discretion, have Seller repair or replace the damaged Property, and
there shall be no abatement of the Purchase Price in such case.
However, Purchaser shall not be entitled to require Seller to effect
repair or replacement unless the loss is entirely covered by insurance
(except for any applicable deductible) and the repair or replacement
will take no more than three (3) months to complete. For purposes of
this Section 7.2, "Substantial Loss or Damage" shall mean loss or
damage, the cost for repair of which exceeds $770,000.00.
Article VIII.
Maintenance of the Property
Between the time of execution of this Agreement and the Closing, Seller
shall maintain the Property in good repair, reasonable wear and tear excepted,
shall perform all work required to be done under the terms of any lease or
agreement relating to the Property, and shall timely make all repairs,
maintenance and replacements of equipment or improvements, the same as though
Seller were retaining the Property; except that in the event of a fire or other
casualty, damage or loss, Seller shall have no duty to repair said damage.
However, Seller may repair any such damage with Purchaser's prior, written
approval and may, without Purchaser's approval, repair damage where such repair
is necessary in Seller's reasonable opinion to preserve and protect the health
and safety of tenants of the Property or to preserve the Property from imminent
risk of further damage or if required to do so by Seller's insurance carrier.
Any such emergency repairs shall be reported to Purchaser within forty-eight
(48) hours of their completion. Seller agrees to continue to rent vacant units
and to do ordinary and customary Aturns@ (painting, cleaning etc.) of vacant
units according to the normal guidelines and procedures followed prior to the
execution of this contract.
Article IX.
Broker
Purchaser and Seller represent to each other that they have dealt with
no agent or broker who in any way has participated as a procuring cause of the
sale of the Property, except Corson and Associates (the "Broker"). Seller shall
pay a commission of two percent (2%) of the Purchase Price to the Broker at the
Closing, and the Broker shall be responsible for paying any applicable co-broker
under terms of any separate agreement between them. Purchaser and Seller each
agree to defend, indemnify and hold harmless the other for any and all
judgments, costs of suit, attorneys' fees, and other reasonable expenses which
the other may incur by reason of any action or claim against the other by any
broker, agent, or finder with whom the indemnifying party has dealt arising out
of this Agreement or any subsequent sale of the Property to Purchaser, except
for the above-described commissions, which shall be paid by Seller. The
provisions of this Article IX shall survive the Closing and any termination of
this Agreement.
Article X.
Representations and Warranties
10.1 Limitations on Representations and Warranties. Purchaser hereby
agrees and acknowledges that, except as set forth in Section 10.2 below, neither
Seller nor any agent, attorney, employee or representative of Seller has made
any representation whatsoever regarding the subject matter of this sale, or any
part thereof, including (without limiting the generality of the foregoing)
representations as to the physical nature or condition of the Property or the
capabilities thereof, and that Purchaser, in executing, delivering and/or
performing this Agreement, does not rely upon any statement and/or information
to whomever made or given, directly or indirectly, orally or in writing, by any
individual, firm or corporation. Purchaser agrees to take the Real Property and
the Personal Property "as is," as of the date hereof, reasonable wear and tear,
and minor damage caused by the removal of any personal property or fixtures not
included in this sale, excepted. SELLER MAKES NO REPRESENTATIONS OR WARRANTIES
AS TO THE PHYSICAL CONDITION OF THE PROPERTY OR THE SUITABILITY THEREOF FOR ANY
PURPOSE FOR WHICH PURCHASER MAY DESIRE TO USE IT. SELLER HEREBY EXPRESSLY
DISCLAIMS ANY WARRANTIES OF MERCHANTABILITY AND/OR FITNESS FOR A PARTICULAR
PURPOSE AND ANY OTHER WARRANTIES OR REPRESENTATIONS AS TO THE PHYSICAL CONDITION
OF THE PROPERTY. PURCHASER, BY ACCEPTANCE OF THE DEED, AGREES THAT IT HAS
INSPECTED THE PROPERTY AND ACCEPTS SAME "AS IS" AND "WITH ALL FAULTS".
Purchaser understands that any financial statements and data, including,
without limitation, gross rental income, operating expenses and cash flow
statements, to be made available by Seller to Purchaser, will be unaudited
financial statements and data not prepared or reviewed by independent public
accountants, and that Seller makes no representation as to the accuracy or
completeness thereof.
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10.2 Representations and Warranties of Seller. Seller makes the
following representations and warranties and agrees that Purchaser's obligations
under this Agreement are conditioned upon the truth and accuracy of such
representations and warranties, both as of this date and as of the date of the
Closing:
(a) Seller has the requisite partnership power and authority to enter
into this Agreement and convey the Property to Purchaser in accordance with and
subject to the terms and conditions of this Agreement.
(b) To the best of Seller's knowledge, Seller has received no written
notice of any existing, pending or threatened litigation, administrative
proceeding or condemnation or sale in lieu thereof, with respect to any portion
of the Real Property, except as noted on Exhibit H attached hereto.
(c) Except for those tenants and licensees in possession of the Real
Property under written leases or license agreements for space in the Real
Property, as shown in the Rent Roll, to the best of Seller's knowledge there are
no parties in possession of, or claiming any possession to, any portion of the
Real Property as lessees, tenants at sufferance, licensees, trespassers or
otherwise.
(d) The updated Rent Roll for the Real Property, which shall be
delivered at the Closing, will be true, correct and complete as of the date set
forth thereon; no tenant will be entitled to any rebates, rent concessions, or
free rent (other than as reflected in said Rent Roll) and no rents due under any
of the tenant or other leases will have been assigned, hypothecated, or
encumbered, to any party except pursuant to documents to be released at Closing.
(e) There are no attachments or executions affecting the Property,
general assignments for the benefit of creditors, or voluntary or involuntary
proceedings in bankruptcy, pending or, to the best of Seller's knowledge,
threatened against Seller.
(f) During the period of Seller's ownership of the Property, Seller has
not itself, and to the best of Seller's knowledge, no prior owner or current or
prior tenant or other occupant of all or any part of the Property at any time
has, used Hazardous Materials (hereinafter defined) on, from, or affecting the
Property in any manner that violates federal, state, or local laws, ordinances,
rules, or regulations governing the use, storage, treatment, transportation,
generation, or disposal of Hazardous Materials (collectively, the "Environmental
Laws"), and to the best of Seller's knowledge no Hazardous Materials have been
disposed of on the Property. "Hazardous Materials" shall mean any flammable
substances, explosives, radioactive materials, hazardous wastes, toxic
substances, pollutants, pollution, or related materials regulated under any of
the Environmental Laws.
10.3 Seller's Knowledge. Whenever the term "to the best of Seller's
knowledge" is used in this Agreement or in any representations and warranties
given to Purchaser at Closing, such knowledge shall be the actual knowledge of
William S. Woodsome (the "Key Personnel"), the personnel assigned to the Real
Property by CIGNA Investments, Inc., authorized agent for Seller, after review
of the files of CIGNA Investments, Inc. and inquiry of Seller's property
manager. Seller shall have no duty to conduct any further inquiry in making any
such representations and warranties, and no knowledge of any other person shall
be imputed to the Key Personnel.
10.4 Survival. All representations and warranties contained in Section
10.2 will survive the Closing of this transaction (but only as to the status of
facts as they exist as of the Closing, it being understood that Seller makes no
representations or warranties which would apply to changes or other matters
occurring after the Closing), but shall expire on the date one year from the
date of Closing, and no action on such representations and warranties may be
commenced after such expiration.
Article XI.
Liability of Seller
Neither Seller nor any independent property manager which Seller has
hired to manage the Property shall, by entering into this Agreement, become
liable for any costs or expenses incurred by Purchaser subsequent to the date of
Closing, including any labor performed on, or materials furnished to, the Real
Property, or for any leasing commissions or other fees or commissions due for
renewals or extensions of existing leases or otherwise, or for compliance with
any laws, requirements or regulations of, or taxes, assessments or other charges
thereafter due to any governmental authority, or for any other charges or
expenses whatsoever pertaining to the Property or to the ownership, title,
possession, use, or occupancy of the Property, whether or not such costs and
expenses were incurred pursuant to obligations of Purchaser under this Agreement
(including, without limitation, any costs of compliance with presently -existing
and future environmental laws, any environmental remediation costs, and any
costs of, or awards of damages for, damage to the environment, to natural
resources, or to any third party), it being the intent of this Agreement,
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as between Purchaser and Seller, to shift all such liability to Purchaser,
except for any liability of Seller under the provisions of Article X hereof, and
Purchaser hereby agrees to defend, indemnify and hold Seller and any independent
property manager hired by Seller, harmless from any such liability for such
costs and expenses. The provisions of this Article XI shall survive Closing.
Article XII.
Assignment
This Agreement may not be assigned or transferred by Purchaser without
prior written consent of Seller. No assignment shall relieve Purchaser of any of
its obligations under this Agreement. Seller=s consent shall not be unreasonably
withheld.
Article XIII.
Notices
All notices hereunder or required by law shall be sent via United
States Mail, postage prepaid, certified mail, return receipt requested, or via
any nationally recognized commercial overnight carrier with provisions for
receipt, addressed to the parties hereto at their respective addresses set forth
below or as they have theretofore specified by written notice delivered in
accordance herewith:
PURCHASER:
Ronald Gottlieb
P.O. Box 40366
Cincinnati, OH 45240
with a copy to:
Stan Ruby
Schwartz, Manes & Ruby
441 Vine St., Suite #2900
Cincinnati, Ohio 45202
SELLER:
Connecticut General Realty Investors III
Limited Partnership
c/o CIGNA Investments, Inc.
900 Cottage Grove Road
Hartford, CT 06152-2311
Attn: William Woodsome
Real Estate Investments Department
Asset Management, S-311
with a copy to:
CIGNA Corporation
Investment Law Department
Attn: Andrea Levy
Mortgage and Real Estate Group, S-215A
900 Cottage Grove Road
Hartford, CT 06152-2215
Title Company:
Chicago Title Insurance Co.
C/O Central City Title Agency
74 South Fourth Street
Columbus, Ohio 43215
Attn: Ms.Terry Ross, Vice President, Title Operations
Delivery will be deemed complete upon actual receipt or refusal to accept
delivery.
Article XIV.
Expenses
Seller shall pay its own attorney's fees, all conveyance fees and
transfer taxes, and one-half the Escrow Fee, if any. All other costs and
expenses related to the transaction or this Agreement including, but not limited
to, all of Purchaser's attorneys' fees and expenses, recording charges, one-half
of the Escrow Fee, if any, the cost of obtaining the Survey, the Title
Commitment, the Owner's Title Policy, and any title insurance premium required
by any mortgagee of Purchaser (if any) shall be paid by Purchaser, not
withstanding any local practice to the contrary.
Article XV.
Miscellaneous
15.1 Successors and Assigns. All the terms and conditions of this
Agreement are hereby made binding upon the executors, heirs, administrators,
successors and permitted assigns of both parties hereto.
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15.2 Gender. Words of any gender used in this Agreement shall be held
and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise.
15.3 Captions. The captions in this Agreement are inserted only for the
purpose of convenient reference and in no way define, limit or prescribe the
scope or intent of this Agreement or any part hereof.
15.4 Construction. No provision of this Agreement shall be construed by
any Court or other judicial authority against any party hereto by reason of such
party's being deemed to have drafted or structured such provisions.
15.5 Entire Agreement. This Agreement constitutes the entire contract
between the parties hereto and there are no other oral or written promises,
conditions, representations, understandings or terms of any kind as conditions
or inducements to the execution hereof and none have been relied upon by either
party.
15.6 Recording. The parties agree that this Agreement shall not be
recorded. If Purchaser causes this Agreement or any notice or memorandum there
of to be recorded, this Agreement shall be null and void at the option of the
Seller.
15.7 No Continuance. Purchaser acknowledges that there shall be no
assignment, transfer or continuance of any of Seller's insurance coverage or of
the property management contract.
15.8 Time of Essence. Time is of the essence in this transaction.
15.9 Original Document. This Agreement may be executed by both parties
in counterparts in which event each shall be deemed an original.
15.10 Governing Law. This Agreement shall be construed, and the rights
and obligations of Seller and Purchaser hereunder, shall be determined in
accordance with the laws of the State of Ohio.
15.11 Acceptance of Offer. This Agreement constitutes Seller's offer to
sell to Purchaser on the terms set forth herein and must be accepted by
Purchaser by signing three (3) copies hereof and delivering them together with
the Initial Deposit to the Title Company no later than ____________, 1999. If
Purchaser has not accepted this Agreement by such date, then this Agreement and
the offer represented hereby shall automatically be revoked and shall be of no
further force or effect.
15.12 Confidentiality. Purchaser and Seller agree that all documents
and information concerning the Property delivered to Purchaser, the subject
matter of this Agreement, and all negotiations will remain confidential.
Purchaser and Seller will disclose such information only to those parties
required to know it, including, without limitation, employees of either of the
parties, consultants and attorneys engaged by either of the parties, and
prospective or existing investors and lenders.
15.13 Surviving Covenants. Notwithstanding any provisions hereof to the
contrary, the provisions of the second paragraph of Section 6.2 hereof and the
provisions of Article IX hereof (collectively, the "Surviving Covenants") shall
survive the closing and any termination of this Agreement.
15.14 Approval. Seller's obligation to perform its duties hereunder is
contingent upon approval of the transaction by all required boards and
committees in accordance with the standard policies and procedures of CIGNA
Investments, Inc. Seller will seek such approvals during the period commencing
on the Effective Date hereof to and including September 10, 1999, and will
notify Purchaser promptly of the decision of such boards and committees. If the
transaction is not approved, then Seller may terminate this Agreement by giving
notice thereof to Purchaser, whereupon the Deposit shall be returned to
Purchaser and neither party shall have any further rights or duties hereunder
except for the Surviving Covenants.
15.15 Effective Date. The "Effective Date" of this Agreement shall be
the latest execution date by a party as indicated below.
15.16 Business Day. As used herein, the term "Business Day" shall mean
any day other than a Saturday, Sunday, or day on which banks are closed in
Connecticut or Ohio.
EXECUTED BY PURCHASER this 10th day of September, 1999.
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PURCHASER:
/S/Ronald Gottlieb
----------------------------------
By: Ronald Gottlieb
--------------------
Name: Ronald Gottlieb
Title: Managing Member
EXECUTED BY SELLER this 10th day of September, 1999.
SELLER:
CONNECTICUT GENERAL REALTY INVESTORS
III LIMITED PARTNERSHIP
By: CIGNA Realty Resources, Inc. - Fifth
By: /S/John D. Carey
---------------------
Name: John D. Carey
Title: President
Receipt of three (3) original copies of this Agreement, together with the
Initial Deposit (as defined herein) executed by Seller and Purchaser is
acknowledged this 15th day of September, 1999.
TITLE COMPANY:
--------------------------------
Central City Title Agency
By: /S/Teresa Ross
---------------------------------
Name: Teresa L. Ross
Title: Vice President Of Operations
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