Exhibit 2.1
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement ("Agreement"), made as of
the 17th day of June, 1997 by and between
HOME PROPERTIES OF NEW YORK, L.P., a New York limited
partnership, having its principal office at 000 Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000, (herein called "Buyer"),
and
the individuals listed on the attached Schedule A (herein
the "Contributing Partners"), who have addresses as listed
on the attached Schedule A.
W I T N E S S E T H:
WHEREAS, the Contributing Partners are all of the general
partners of Hill Court Apartments South Company, a New York
general partnership (the "Partnership");
WHEREAS, the Partnership owns a 95 unit apartment community
and adjacent land located in the town of Irondequoit, County of
Monroe, State of New York, commonly known as Hill Court
Apartments South, all as more particularly described below;
WHEREAS, Buyer desires to purchase all of the partnership
interests (the "Partnership Interests") in the Partnership and to
thereby acquire that property, upon the happening of certain
events;
NOW, THEREFORE, in consideration of the property, mutual
covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency whereof being hereby
acknowledged, the parties hereby agree as follows:
1. REAL PROPERTY DESCRIPTION. The Real Property to be acquired
consists of one or more parcels of land known as Hill Court
Apartments South which includes 95 apartments (the "Project"),
located in the Town of Irondequoit and State of New York, more
particularly described on Exhibit A, attached hereto, together
and including all buildings and other improvements thereon,
including but not limited to, the 95 apartment units, and all
rights of the Partnership in and to any and all streets, roads,
highways, alleys, driveways, easements and rights-of-way
appurtenant thereto (the foregoing are hereafter collectively
referred to as the "Property").
2. OTHER ITEMS. The following items now in or on the Property,
are included in this sale and shall become the property of Buyer
at Closing (as hereafter defined):
A all heating, plumbing and lighting fixtures,
B ranges, refrigerators, disposals and dishwashers (one of
each for each apartment unit),
C water heaters,
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D any and all bathroom fixtures, wall-to-wall carpeting,
traverse rods, exhaust fans, hoods, signs, screens, maintenance
building, model unit furniture, fences, carpeting and runners,
cabinets, mirrors, shelving, any humidifier and dehumidifier
units, air conditioning units other than such units owned by
tenants, mail boxes, office furniture, and related equipment in
connection with the Project, and
E any fixtures appurtenant to the Property and any other
furniture or equipment used in connection with the operation and
maintenance of the Property, including the truck used in
connection with the operation and maintenance of the Property
(the "Truck") (hereinafter with the items listed in A-D above,
collectively, the "Other Items").
Substantially all of the Other Items are in good working
order and condition now or will be so at the time of Closing and
will be acquired by the Buyer free and clear of all liens and
encumbrances.
3. EXCEPTIONS. Buyer agrees to accept title to the
Partnership's interest in the Property subject only to the
following:
A Restrictive covenants of record common to the tract or
subdivision, provided same have not been violated, unless said
violations have been released under Section 2001 of the Real
Property Actions and Proceedings Law; and
B water line, sanitary sewer, drainage, gas line and main,
electrical, telephone easements and other easements of record
provided that, no building or other improvements, including
Project signage, are located over the area covered by such
easement or are adversely affected.
4. PRICE AND MANNER OF PAYMENT.
A The purchase price for the Partnership Interests shall be a
total of Two Million Eight Hundred Ninety-One Thousand Three
Hundred and Four and NO/100 ($2,891,304) (the "Purchase Price")
payable at the option of each of the Contributing Partners by:
(i) issuance of limited partnership units in the Buyer (the
`Units") as described below; or (ii) payment at closing by check
or wire transfer to an account designated by the Representative
(hereinafter defined).
B Each of the Contributing Partners shall have the right to
elect to receive their portion of the Purchase Price in cash or
in Units, provided however that only those Contributing Partners
who can establish that they are Accredited Investors under the
securities laws may elect to receive Units. In the event that a
Contributing Partner elects to receive Units, the number of Units
they will receive will be equal to their percentage share of the
Purchase Price as set forth on the attached Schedule A divided by
the "Market Value" of a Unit. The Market Value of a Unit shall be
equal to the average closing price for 5 consecutive trading days
prior to, but not including, the Closing Date of a share of
common stock of Home Properties of New York, Inc., ("HME") as
listed on the New York Stock Exchange.
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C No less than 5 business days prior to the Closing Date, the
Representative shall notify the Buyer as to each of the
Contributing Partner's election to receive cash or Units.
D The initial distribution payable with respect to Units
issued as part of the Purchase Price shall be made on the date on
which HME pays the dividend to the holders of its common stock
that relates to the earnings for the calendar quarter in which
the Units were issued and shall be pro-rated such that the
Contributing Partners receiving Units shall receive a pro-rata
distribution for the period from the date on which the Units were
issued to and including the last day of the calendar quarter in
which the Units were issued.
5. ADJUSTMENTS AT CLOSING. The following shall be adjusted and
prorated between the Contributing Partners and the Buyer at
Closing as if the Buyer was the owner of the Partnership
Interests and the Property as of midnight of the night preceding
the Closing Date and shall be paid in cash at Closing:
A current fiscal year real estate taxes,
B water charges,
C sewer charges,
D fuel,
E electricity,
F all rentals and security deposits (including interest
thereon) pursuant to the leases,
G charges under the Service Contracts,
H laundry income;
I any other charges incurred with respect to the Property
which the Partnership is obligated to pay; and
J Rents.
(1) All rent payments due for the month of Closing shall be
deemed collected by the Contributing Partners and
prorated as between the parties as of the Closing.
(2) All rent collected after Closing, for any period prior
to Closing, shall belong to Contributing Partners and,
if paid to Buyer, Buyer shall promptly send such
rent to the Representative.
(3) All rent collected by the Contributing Partners or
the Partnership, prior to the Closing, for rental
periods subsequent to Closing shall be paid to Buyer
at Closing.
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(4) All rent collected by Buyer, the Partnership or the
Contributing Partners for rental periods after the Closing shall
belong to Buyer and, if paid to the Contributing Partners, the
Contributing Partners shall promptly send such rent to Buyer.
The Buyer agrees to use reasonable efforts
after the Closing to collect delinquent rentals
owed to the Partnership with respect to the
Contributing Partners period of ownership,
provided that nothing herein shall require Buyer
or the Partnership to institute legal proceeding
against any resident whose rental payments are
delinquent. Any rents collected after Closing
which are applicable to arrearages which arose
during the Contributing Partners period of
ownership shall be paid by the Partnership to the
Representative, net of the expenses of collection.
If Buyer fails to collect any rents due to the
Contributing Partners within 90 days following the
Closing, the Representative, on behalf of the
Contributing Partners, may proceed to collect the
same in his own name. Nothing herein shall make
the Buyer liable to the Contributing Partners for
any failure to collect arrearages.
Any error in the calculation of adjustments shall be
corrected subsequent to Closing with appropriate credits to
be given based upon corrected adjustments, provided,
however, that the adjustments (except if errors are caused
by misrepresentations) shall be final upon expiration of the
sixtieth day after Closing.
6. COSTS. Buyer shall pay all recording fees, Buyer's
attorneys' fees, the costs of obtaining a binder or commitment
from a title insurance company, the premium for Buyer's title
insurance policy, and all other costs and expenses incidental to
or in connection with closing this transaction customarily paid
for by the purchaser of similar property. The Contributing
Partners shall pay the transfer tax, attorneys' fees, if any,
incurred by them in connection with this transaction, and all
other costs and expenses incidental to or in connection with
closing this transaction customarily paid for by the seller of
similar property.
7. SEARCH AND SURVEY. The Representative shall furnish and
deliver to the Buyer within ten (10) days after the date of this
Agreement fully guaranteed tax, title and United States District
Court searches, and searches under the Uniform Commercial Code of
records in the appropriate offices as against the Partnership and
the Contributing Partners, dated or redated subsequent hereto,
and a copy of the most recent instrument survey of the Property.
Prior to Closing, the Representative shall deliver to Buyer an
update of the instrument survey previously delivered, dated or
redated subsequent hereto certified to such persons and
organizations as may be designated by Buyer, made by a land
surveyor duly licensed by the State of New York, showing the
boundaries of the land conveyed hereunder, all improvements
thereon and the location of all easements, all improvements
thereon and the location of all easements, rights-of-way or
similar encroachments affecting same, prepared and certified in
accordance with the code of practice adopted by the New York
State Association of Professional Land Surveyors. Notwithstanding
the foregoing, the redated survey must not differ in any material
respects from the survey initially delivered to and reviewed by
Buyer. The Contributing Partners shall pay for the continuation
of said tax, title, United States District Court, local tax and
Uniform Commercial Code searches to and including the date of
Closing and for any required revenue stamps in connection with
the transfer.
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8. TITLE DOCUMENTS. At the time of Closing, each of the
Contributing Partners shall tender to Buyer an assignment of all
their Partnership Interests in the Partnership free and clear
from all liens and encumbrances as well as such amendments to the
partnership agreement and certificates of the Partnership as
shall be necessary or appropriate to effectuate the transfer. The
Representative shall also deliver to Buyer a certificate of title
and any necessary transfer documents relating to the Truck, a
current rent roll ("Rent Roll") certified, as of the date of
Closing, which shall include a list of all tenants, all rental
obligations of each tenant with respect to the Property and all
security deposits. At Closing, the Representative shall deliver
complete originals of each lease listed on the Rent Roll.
9. INSPECTION. Upon and after acceptance of this Agreement by
the Contributing Partners, the Contributing Partners agree that
Buyer and its authorized representatives shall have the right and
privilege to enter upon the Property and the Partnership's
offices, upon reasonable notice, during regular business hours,
for the purpose of gathering such information and conducting such
environmental and engineering studies or other tests and reviews
as Buyer may deem appropriate and necessary. All such
inspections, studies, tests and reviews shall be at Buyer's sole
expense. The Contributing Partners agree to cooperate with Buyer
by making available to Buyer such records, plans, drawings or
other data as may be in their or the Partnership's possession or
control relating to the Property and its operation; provided,
however, that Buyer agrees to indemnify the Contributing Partners
and the Partnership of and from any loss or damage occasioned by
such entry, and agrees further to restore to its original
condition, at Buyer's own cost and expense, any property
disturbed by such entry.
10. TITLE EXAMINATION; OBJECTIONS TO TITLE.
A Within ten (10) banking days after receipt of the title and
survey documents described in Section 7 above, Buyer agrees to
furnish to the Representative a specification in writing of any
objection to title that Buyer believes it is not required to take
title subject to, which shall not include the exceptions
permitted in Section 3 of this Agreement. The Representative may,
but shall not be required to, bring any action or proceedings or
take such other action as may be appropriate to render title to
the Property marketable.
B The Representative shall have ten (10) banking days from
receipt of notice, if any, from Buyer of its title objections
within which it must notify Buyer in writing if it cannot cure.
C In the absence of such notice from the Representative, the
Contributing Partners shall be obligated to cure the title
objections, if any, made by Buyer. If the Representative notifies
Buyer that it is unable to convey a good and marketable title to
the property described above, subject to and in accordance with
the provisions of this contract, then, except as hereinafter
provided, Buyer may elect, by written notice to the
Representative, to either:
(1) terminate this Agreement by notice delivered to the
Representative within five (5) banking days of receipt
of the Representative's notice that it cannot cure the
title objections, in which event, this Agreement shall
wholly cease and terminate, and neither party shall
have any further claim against the other
by reason of this Agreement; or
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(2) proceed with the purchase, provided the Representative is
able to obtain a commitment for title insurance and thereafter
pay the premium for said title insurance endorsement(s) which
insure the exception(s) on behalf of the Buyer.
Notwithstanding anything to the contrary
contained herein, Buyer may accept such title as
the Contributing Partners may be able to convey,
without reduction of the Purchase Price or any
credit or allowance against the same and without
any other liability on the part of the
Contributing Partners and if Buyer elects to do
so, the Contributing Partners shall have no right
to terminate this Agreement as hereinabove
provided.
D If a search of the title discloses judgments, bankruptcies
or other returns against other persons having names the same as
or similar to that of the Partnership or the Contributing
Partners, the Representative will on request deliver to Buyer an
affidavit showing that such judgments, bankruptcies or other
returns are not against the Partnership or the Contributing
Partners.
E The Representative agrees that, upon the request of the
Buyer, it will provide an affidavit in such form and with such
content as shall allow the Buyer to obtain a non-imputation
endorsement to the title policy purchased by the Buyer.
11. USE OF PROPERTY. The Contributing Partners represent that
the Property and any improvement thereon are in full compliance
with restrictive covenants, statutes, ordinances, regulations,
and/or other administrative enactments including, but not limited
to building codes and zoning ordinances for the present use as a
multi residential dwelling.
12. CLOSING DATE. The Closing shall occur within 15 days after
the end of the Due Diligence Period (as hereinafter defined) (the
"Closing" or "Closing Date") at the Buyer's office, or at such
other time and place as may be mutually agreed upon.
13. POSSESSION. Buyer shall have possession and occupancy of the
Property from and after the date of delivery of the assignments
of Partnership Interests, subject only to matters herein provided
for.
14. BROKER'S COMMISSION. The Contributing Partners represent to
Buyer that they did not employ any broker in connection with this
sale. The Buyer represents that it employed Xxxxxx Xxxxxxxxxx as
broker and agrees that it will pay any fees or commissions due
as a result of the Buyer's employment of that broker. The
Contributing Partners and Buyer each agree to indemnify the other
for any and all claims and expenses, including legal fees, if any
other fees or commission is determined to be due by reason of the
employment of any other broker by the indemnifying party. This
representation and indemnity shall survive the Closing.
15. RISK OF LOSS. The risk of loss or damage to all or part of
the Partnership's interest in the Property by fire or other
casualty or by taking by eminent domain, until Closing, shall be
assumed by the Contributing Partners and upon the happening of
such event, Buyer shall have the election of terminating this
Agreement without further liability hereunder, or of completing
this purchase and receiving the Partnership's share of insurance
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monies, collectible for such loss or damage, or the award
for such taking by eminent domain.
16. CONDITIONS PRECEDENT.
A It shall be a condition to Buyer's obligations to close that
all of the representations and warranties of the Contributing
Partners are true and correct as of the Closing;
B It shall be a condition to Buyer's obligation to close that
there are at Closing 95apartment units in rentable condition,
which are all in compliance with federal, state, county or local
laws, ordinances, rules and regulations;
C Buyer shall have thirty (30) days after the date of this
Agreement (the "Due Diligence Period") within which to review and
inspect the Property and the Other Items (including, but not
limited to, performing engineering and Phase I environmental
studies), the Partnership's books and records pertaining to the
Property and the Other Items, matters relating to zoning
compliance and compliance by the Property and the Other Items
with other applicable governmental regulations, the market in
which the Property operates, the documents relating to the
Existing Loan, the tax assessment on the Property as it relates
to the Purchase Price and to the assessment on comparable
properties and such other matters as Buyer shall deem reasonably
necessary or appropriate in connection with the Property and the
Other Items. If Buyer determines that it does not wish to
purchase the Partnership Interests as a result of its findings
during the Due Diligence Period and notifies the Representative
of such decision within the Due Diligence Period, this Agreement
shall be null and void and neither party shall have any further
rights or obligations under this Agreement. Buyer's failure to
object within the Due Diligence Period shall be deemed a waiver
by Buyer of the condition contained in this Section 16(C).
D It shall also be a condition to Buyer's obligation to close
that during the Due Diligence Period, the Buyer shall obtain the
approval of the Board of Directors (the "Board") of its general
partner - Home Properties of New York, Inc., - to the acquisition
of the Partnership Interests on the terms and conditions
described herein. If Buyer does not obtain the Board's approval
within the Due Diligence Period, the Buyer shall promptly notify
the Representative in which event this Agreement shall be null
and void and neither party shall have any further rights or
obligations under this Agreement. Buyer's failure to notify the
Representative within the Due Diligence Period of its failure to
obtain Board approval shall be deemed a waiver by Buyer of the
conditions contained in this Section 16(E).
E It shall be a condition to Buyer's obligation to close that
as of the Closing Date each of the Contributing Partners shall
have provided the Buyer with an indemnification in the form of
Exhibit B hereto and shall, upon execution of this Agreement,
also have executed the Agency Agreement in the form attached
hereto as Exhibit C whereby Xxxxxx X. Xxxxxxx XX (the
"Representative") is appointed as the representative of the
Contributing Partners.
It is understood that the contingencies set forth
herein are for Buyer's benefit and may be waived by
Buyer at any time. If the above contingencies are not
satisfied or
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waived by the Buyer, the Buyer shall have the right to
terminate this Agreement by written notice to the
Representative. In the event of such a termination, this
Agreement shall be null and void and neither party shall
have any further rights or obligations under this Agreement.
17. ENVIRONMENTAL CERTIFICATION. By acceptance of this
Agreement, each of the Contributing Partners represents,
warrants, and certifies to Buyer that such Contributing Partner
has no knowledge of any violation, and has received no notice of
any violation of any applicable Environmental Laws (below
defined). To the best of each of the Contributing Partner's
knowledge, the Partnership and such Contributing Partner has not,
nor has any other person, used, generated, stored, dumped,
released, buried, dispersed or emitted any Hazardous Substance on
the Property nor are there any transformers or underground tanks
on the Property, nor is there a violation of any Environmental
Laws with respect to the current use of the Property.
"Environmental Laws" shall mean all federal, state and local
environmental, health, chemical use, safety and sanitation laws,
statutes, ordinances and codes relating to the protection of the
environment and/or governing the use, storage, treatment,
generation, transportation, processing, handling, production or
disposal of any Hazardous Substance and the rules, regulations,
and orders with respect thereto. "Hazardous Substance" means,
without limitation, any flammable, explosive or radioactive
material, polychlorinated biphenyl, petroleum or petroleum
product, methane, hazardous materials, hazardous wastes,
hazardous or toxic substances or related materials, as defined in
the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (42 U.S.C. Sections 9601, et
seq.), the Hazardous Materials Transportation Act, as amended (49
U.S.C. Appendix Sections 1801, et seq.), the Resource
Conservation and Recovery Act, as amended (42 U.S.C. Sections
6901, et seq.), the Toxic Substances Control Act, as amended (15
U.S.C. Sections 2601, et seq.), Articles 15 and 27 of the New
York State Environmental Conservation Law or any other
Environmental Law and the regulations promulgated thereunder
applicable on the effective date of this Agreement. From the date
of acceptance hereof to and including the date of Closing, each
of the Contributing Partners shall immediately provide Buyer with
a copy of any notice, citation, complaint or other directive from
any person, entity or governmental authority whereby the
Partnership's or such Contributing Partner's compliance with
Environmental Laws is called into question, and immediately
notify Buyer of any new information or other developments which
could tend to supplement or modify the information contained
herein.
18. REPRESENTATIONS AND WARRANTIES OF SELLER. Each of the
Contributing Partners represents and warrants to Buyer as of the
date hereof and as of Closing, that:
A To the best of such Contributing Partner's knowledge after
due inquiry, the Partnership and such Contributing Partner has no
liability or obligation of any nature which in any way affects or
is related to the Property, the Other Items or the Partnership
Interests whether now due or to become due, absolute, contingent
or otherwise, including liabilities for taxes (or any interest or
penalties thereto) other than disclosed in this Agreement.
B To the best of such Contributing Partners' knowledge, after
due inquiry, there is no litigation, proceeding or investigation
pending, or to the knowledge of such Contributing Partners
threatened, against or affecting the Partnership or such
Contributing Partner that might affect or relate to the validity
of this Agreement, any action taken or to be taken pursuant
hereto, or the Property, the Other Items
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or the Partnership Interests or any part or the
operation thereof, whether or not fully covered by
insurance.
C To the best of such Contributing Partners' knowledge after
due inquiry, the Partnership has complied with and is not in
default under, or in violation of, or received any notice that
the Partnership, the Property or the Other Items may be in
violation of, any law, ordinance, rule, regulation or code or
condition in any approval or permit pursuant thereto (including
without limitation, any zoning, sign, environmental, labor,
safety, health or price or wage control, ordinance, rule,
regulation or order of) applicable to the ownership, development,
operation or maintenance of the Property or the Other Items.
D To the best of such Contributing Partner's knowledge after
due inquiry, there are no written leases affecting the Property
with a term greater than one (1) year.
E To the best of such Contributing Partner's knowledge after
due inquiry, there is no pending condemnation of the Property, or
any part thereof, or of any plans for improvements which might
result in a special assessment against the Property.
F Such Contributing Partner and, to the best of such
Contributing Partner's knowledge, the Partnership has not
received any written notice or request from any insurance
company, Board of Fire Underwriters (or organization exercising
functions similar thereto) requesting the performance of any work
or alteration in respect of the Property or the Other Items.
G Security deposits held by the Partnership will be correctly
identified as of Closing with respect to the Property.
H To the best of such Contributing Partner's knowledge after
due inquiry, there are no Service Contracts with respect to the
Property or the Other Items which will continue in effect after
the Closing except as set forth on Schedule "B" attached hereto.
I To the best of such Contributing Partner's knowledge after
due inquiry, there are no executory contracts connected with the
Property or the Other Items, except as set forth on Schedule "C"
attached hereto. The Partnership and the Partnership's employees
and agents have not let, and will not let any contracts for
improvements to the Property which will not be fully completed
and fully paid for prior to Closing.
J Until Closing, the Partnership shall continue to fulfill all
of its obligations under the terms of the Leases encumbering the
Property, and under the Service Contracts, and the Partnership
shall operate, maintain and repair all landscaping, buildings,
fixtures and facilities, in accordance with normally accepted
business principles, and the Partnership shall continue to
operate the Property in a commercially reasonable manner.
K To the best of such Contributing Partner's knowledge after
due inquiry, the financial information previously provided to
Buyer with respect to the Property is substantially accurate.
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L To the best of such Contributing Partner's knowledge after
due inquiry, all of the ranges and refrigerators located within
the apartment units are the property of the Partnership and not
of the tenants.
M This Agreement has been duly authorized, executed and
delivered and constitutes a legal and binding obligation of such
Contributing Partner, enforceable in accordance with its terms,
except as may be limited by bankruptcy and other laws affecting
creditors' rights generally.
N Neither the entry into this Agreement, nor the carrying out
of the transactions contemplated herein has resulted or will
result in any violation of, or be in conflict with, or result in
the creation of, any mortgage, lien, encumbrance or charge (other
than those contemplated hereby) upon any of the properties or
assets of the Partnership or the Contributing Partner pursuant
to, or constitute a default under, any certificate of
incorporation, by-law, partnership agreement, or mortgage,
indenture, contract, agreement, instrument, franchise, permit,
judgment, decree, order, statute, rule or regulation applicable
to the Partnership, the Contributing Partner or the Property.
O To the best of such Contributing Partner's knowledge, no
consent or approval by, or authorization of, or filing,
registration or qualification with, any federal, state or local
governmental authority, bureau, department or agency, or any
corporation, person or other entity is required as of the Closing
either for the execution, delivery or performance of this
Agreement by such Contributing Partner, or in connection with the
consummation by such Contributing Partner of the transactions
contemplated by this Agreement.
P The Partnership is now, or will be on the Closing Date, the
lawful owner of 100% of the fee interest in the Property and the
Other Items.
Q The Contributing Partners have the interest in the
Partnership as indicated on the attached Schedule A.
The representations and warranties of the
Contributing Partners contained in this Agreement, the
statements in any Exhibit or Schedules attached to this
Agreement, or other instruments furnished to Buyer at
or prior to Closing pursuant to this Agreement, or in
connection with the transactions contemplated pursuant
to this Agreement, do not contain any untrue statements
of a material fact, or fail to state a material fact
necessary to make it not misleading.
The representations and warranties contained herein
shall survive delivery of the assignment of the Partnership
Interests and shall not merge therein.
Each of the Contributing Partners acknowledges that
each of the representations made by it in this paragraph 18
and elsewhere in this Agreement is material to Buyer
hereunder. As to any representation or warranty set forth
herein, each of the Contributing Partners shall indemnify,
defend and hold Buyer safe and harmless from and against any
and all loss, damage, claim, counterclaim, cause of action,
cost or expense, including, without limitation, reasonable
attorneys' fees and disbursements at both trial and
appellate levels, suffered, paid or incurred by, or asserted
against Buyer, directly or indirectly, whether foreseen or
unforeseen, and whether for personal injury or death or for
property damage or otherwise by reason of such Contributing
Partner's
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breach of any warranty or obligation under this
Agreement or if any representation of such Contributing
Partner in this Agreement is wholly or partially
untrue.
Irrespective of anything to the contrary contained
herein the representations and warranties of the
Contributing Partners, herein contained, shall expire and be
of no further effect upon the expiration of 12 months after
Closing. This expiration shall not apply to any breach of
warranty or representation which arises out of an
intentional material misrepresentation made by any
Contributing Partner.
19. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents
and warrants to Seller as of the date hereof and as of the
Closing:
a) Buyer is and will be as of the date of Closing duly
organized, validly existing and in good standing under the laws
of the State of New York and has all the requisite power and
authority to enter into and carry out this Agreement according to
its terms.
b) Subject to the receipt of the approval of the Board, this
Agreement has been duly authorized, executed and delivered and
constitutes a legal and binding obligation of Buyer, enforceable
in accordance with its terms, except as may be limited by
bankruptcy and other laws affecting creditors' rights generally.
c) To the best of its knowledge after due inquiry, there is no
litigation, proceeding or investigation pending, or to the
knowledge of Buyer threatened, against or affecting Buyer or the
partners of Buyer that might affect or relate to the validity of
this Agreement or any action taken or to be taken pursuant
hereto, or that might have a material adverse effect on the
business or operations of the Buyer.
d) Buyer will cause the Partnership to pay and does hereby
indemnify the Partners against any obligations of the Partners to
pay the legal fees owed to Xxxxx X. Xxxxxxxx, Esq. in connection
with the reduction in the real property assessment of the
Property to take effect on September 1, 1997, provided that the
amount of those fees shall not exceed 50% of the savings
resulting from that lower assessment realized with respect to the
1997/1998 town and school tax and the 1998 county tax.
20. ASSIGNMENT. This Agreement, and all rights of Buyer
hereunder, may be assigned byBuyer to any affiliate without the
Contributing Partners' or the Representative's prior consent. Any
other assignment by Buyer shall require the Representative's
prior written consent, which consent shall not be unreasonably
withheld. Any assignment by the Buyer shall not relieve the Buyer
of any obligation of the Buyer created by this Agreement.
21. NOTICE. All notices given pursuant to any provisions of this
Agreement shall be in writing and shall be effective only if
delivered personally, or sent by registered or certified mail,
postage prepaid or sent by a national over-night carrier, to the
addresses set forth below:
To the Contributing Partners Xxxxxx X. Xxxxxxx XX
c/o their Representative: c/o JML Optical Industries,
Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
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To Buyer: HOME PROPERTIES OF NEW YORK,
L.P.
Attn: Xxxxxx Xxxxxxxxx,
Chairman
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
22. PLANS. The Contributing Partners agree to provide Buyer with
all plans and architectural drawings in their possession for the
improvements completed at the Property, including, without
limitation, all "as-built" plans in their possession and the
Contributing Partners further agree that they will endeavor to
turn over the same to Buyer promptly upon execution of this
Agreement.
23. APPLICABLE LAW. This Agreement shall be construed and
governed in accordance with the laws of the State of New York.
24. ENTIRE AGREEMENT. This Agreement shall constitute the entire
agreement between the parties, and any and all prior
understandings or agreements, whether written or oral, are hereby
merged into this Agreement. This Agreement cannot be modified
except by a written instrument signed by the parties hereto.
25. BINDING AGREEMENT. This Agreement shall not be binding or
effective until properly executed by Buyer and Seller.
26. CONFIDENTIALITY. By execution of this Agreement and except
as otherwise provided herein, prior to the Closing each of the
Contributing Partners and Buyer agree to keep any and all
information with respect to the transactions contemplated by this
Agreement strictly confidential, and will not disclose any such
information, without the other's prior written consent. Buyer may
disclose the existence of this Agreement to the extent necessary
to conduct its due diligence with respect to the Property.
27. FINANCIAL ACCESS. The Representative will provide a signed
representation letter as prescribed by Generally Accepted
Auditing Standards as promulgated by the Auditing standards
Division of the American Institute of Public Accountants which
representation is required to enable an Independent Public
Accountant to render an opinion on such financial statements. The
Contributing Partners will provide access by Buyer's
representatives, to all financial and other information relating
to the Property as is sufficient to enable them to prepare
audited financial statements, at Buyer's expense, in conformity
with Regulation S-X of the Securities and Exchange Commission
(the "Commission") and any registration statement, report or
disclosure statement required to be filed with the Commission.
28. PRE-TRANSFER PARTNERSHIP LIABILITIES. Buyer agrees to assume
only those liabilities with respect to the Partnership, the
Partnership Interests and the Property as are specifically
described herein. To insure payment of any additional liabilities
not assumed by the Buyer herein, Buyer and the Contributing
Partners will enter into the Agreement attached hereto as Exhibit
D relating to the escrow of certain funds to pay for any such
additional liabilities (the "Escrow Agreement'). To the extent
that there are now or in the future any additional liabilities
not assumed by the Buyer herein and not paid for from the
proceeds held under the Escrow Agreement, the Contributing
Partners shall assume responsibility for those payments.
Page 12
IN WITNESS WHEREOF, the parties hereto have caused this
Instrument to be executed as of the day and date first above
written.
HOME PROPERTIES OF NEW YORK, L.P.
By: Home Properties of New York, Inc.
General Partner
By: /s/ Xxxxxx Xxxxxxxxx
Title: Chairman
For purposes of agreeing to perform the
obligations of the Representative hereunder.
/s/ Xxxxxx X. Xxxxxxx XX
------------------------------
Xxxxxx X. Xxxxxxx XX
CONTRIBUTING PARTNERS
/s/ Xxxxxx X. Xxxxxxx XX
------------------------------
Xxxxxx X. Xxxxxxx XX
/s/ Xxxxxxx X. Gruttardaro
------------------------------
Xxxxxxx X. Gruttardaro
/s/ Xxxxxxx X. Xxxxxx
------------------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxx X. XxXxxxx
------------------------------
Xxxx X. XxXxxxx
Page 13
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement ("Agreement"), made as
of the 17th day of June, 1997 by and between
HOME PROPERTIES OF NEW YORK, L.P., a New York limited
partnership, having its principal office at 000 Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000, (herein called
"Buyer"), and
the individuals listed on the attached Schedule A
(herein the "Contributing Partners"), who have
addresses as listed on the attached Schedule A.
W I T N E S S E T H:
WHEREAS, the Contributing Partners are all of the general
partners of Xxxxxx Apartments Company, a New York general
partnership (the "Partnership");
WHEREAS, the Partnership owns a 135 unit apartment community
and adjacent land located in the town of Irondequoit, County of
Monroe, State of New York, commonly known as Xxxxxx Arms
Apartments, all as more particularly described below;
WHEREAS, Buyer desires to purchase all of the partnership
interests (the "Partnership Interests") in the Partnership and to
thereby acquire that property, upon the happening of certain
events;
NOW, THEREFORE, in consideration of the property, mutual
covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency whereof being
hereby acknowledged, the parties hereby agree as follows:
1. REAL PROPERTY DESCRIPTION. The Real Property to be acquired
consists of one or more parcels of land known as Xxxxxx Arms
Apartments which includes 135 apartments (the "Project"), located
in the Town of Irondequoit and State of New York, more
particularly described on Exhibit A, attached hereto, together
and including all buildings and other improvements thereon,
including but not limited to, the 135 apartment units, and all
rights of the Partnership in and to any and all streets, roads,
highways, alleys, driveways, easements and rights-of-way
appurtenant thereto (the foregoing are hereafter collectively
referred to as the "Property").
2. OTHER ITEMS. The following items now in or on the Property,
are included in this sale and shall become the property of Buyer
at Closing (as hereafter defined):
A all heating, plumbing and lighting fixtures,
B ranges, refrigerators, disposals and dishwashers (one of
each for each apartment unit),
C water heaters,
Page 1
D any and all bathroom fixtures, wall-to-wall carpeting,
traverse rods, exhaust fans, hoods, signs, screens, maintenance
building, model unit furniture, fences, carpeting and
runners, cabinets, mirrors, shelving, any humidifier
and dehumidifier units, air conditioning units other
than such units owned by tenants, mail boxes, office
furniture, and related equipment in connection with the
Project, and
E any fixtures appurtenant to the Property and any other
furniture or equipment used in connection with the operation and
maintenance of the Property, including the truck used
in connection with the operation and maintenance of the
Property (the "Truck") (hereinafter with the items
listed in A-D above, collectively, the "Other Items").
Substantially all of the Other Items are in good
working order and condition now or will be so at the time of
Closing and will be acquired by the Buyer free and clear of all
liens and encumbrances.
3. EXCEPTIONS. Buyer agrees to accept title to the
Partnership's interest in the Property subject only to the
following:
A. Restrictive covenants of record common to the tract or
subdivision, provided same have not been violated, unless said
violations have been released under Section 2001 of the
Real Property Actions and Proceedings Law; and
B. water line, sanitary sewer, drainage, gas line and
main, electrical, telephone easements and other easements of
record provided that, no building or other
improvements, including Project signage, are located
over the area covered by such easement or are adversely
affected.
4. PRICE AND MANNER OF PAYMENT.
A. The purchase price for the Partnership Interests shall
be a total of Four Million One Hundred Eight Thousand Six Hundred
and Ninety-Six and NO/100 ($4,108,696) (the "Purchase
Price") payable at the option of each of the
Contributing Partners by: (i) issuance of limited
partnership units in the Buyer (the `Units") as
described below; or (ii) payment at closing by check or
wire transfer to an account designated by the
Representative (hereinafter defined).
B. Each of the Contributing Partners shall have the right
to elect to receive their portion of the Purchase Price in cash
or in Units, provided however that only those
Contributing Partners who can establish that they are
Accredited Investors under the securities laws may
elect to receive Units. In the event that a
Contributing Partner elects to receive Units, the
number of Units they will receive will be equal to
their percentage share of the Purchase Price as set
forth on the attached Schedule A divided by the
"Market Value" of a Unit. The Market Value of a Unit
shall be equal to the average closing price for 5
consecutive trading days prior to, but not including,
the Closing Date of a share of common stock of Home
Properties of New York, Inc., ("HME") as listed on the
New York Stock Exchange.
Page 2
C. No less than 5 business days prior to the Closing Date,
the Representative shall notify the Buyer as to each of the
Contributing Partner's election to receive cash or
Units.
D. The initial distribution payable with respect to Units
issued as part of the Purchase Price shall be made on the date on
which HME pays the dividend to the holders of its
common stock that relates to the earnings for the
calendar quarter in which the Units were issued and
shall be pro-rated such that the Contributing Partners
receiving Units shall receive a pro-rata distribution
for the period from the date on which the Units were
issued to and including the last day of the calendar
quarter in which the Units were issued.
5. ADJUSTMENTS AT CLOSING. The following shall be adjusted and
prorated between the Contributing Partners and the Buyer at
Closing as if the Buyer was the owner of the Partnership
Interests and the Property as of midnight of the night
preceding the Closing Date and shall be paid in cash at
Closing:
A current fiscal year real estate taxes,
B water charges,
C sewer charges,
D fuel,
E electricity,
F all rentals and security deposits (including interest
thereon) pursuant to the leases,
G charges under the Service Contracts,
H laundry income;
I any other charges incurred with respect to the Property
which the Partnership is obligated to pay; and
J Rents.
(1) All rent payments due for the month of Closing shall be
deemed collected by the Contributing Partners and prorated as
between the parties as of the Closing.
(2) All rent collected after Closing, for any period prior to
Closing, shall belong to Contributing Partners and, if paid to
Buyer, Buyer shall promptly send such rent to the
Representative.
(3) All rent collected by the Contributing Partners or the
Partnership, prior to the Closing, for rental periods
subsequent to Closing shall be paid to Buyer at Closing.
Page 3
(4) All rent collected by Buyer, the Partnership or the
Contributing Partners for rental periods after the Closing shall
belong to Buyer and, if paid to the Contributing Partners, the
Contributing Partners shall promptly send such rent to Buyer.
The Buyer agrees to use reasonable efforts after the
Closing to collect delinquent rentals owed to the
Partnership with respect to the Contributing Partners
period of ownership, provided that nothing herein shall
require Buyer or the Partnership to institute legal
proceeding against any resident whose rental payments
are delinquent. Any rents collected after Closing which
are applicable to arrearages which arose during the
Contributing Partners period of ownership shall be paid
by the Partnership to the Representative, net of the
expenses of collection. If Buyer fails to collect any
rents due to the Contributing Partners within 90 days
following the Closing, the Representative, on behalf of
the Contributing Partners, may proceed to collect the
same in his own name. Nothing herein shall make the
Buyer liable to the Contributing Partners for any
failure to collect arrearages.
Any error in the calculation of adjustments shall be
corrected subsequent to Closing with appropriate
credits to be given based upon corrected adjustments,
provided, however, that the adjustments (except if
errors are caused by misrepresentations) shall be final
upon expiration of the sixtieth day after Closing.
6. COSTS. Buyer shall pay all recording fees, Buyer's
attorneys' fees, the costs of obtaining a binder or commitment
from a title insurance company, the premium for Buyer's
title insurance policy, and all other costs and expenses
incidental to or in connection with closing this transaction
customarily paid for by the purchaser of similar property.
The Contributing Partners shall pay the transfer tax,
attorneys' fees, if any, incurred by them in connection with
this transaction, and all other costs and expenses
incidental to or in connection with closing this transaction
customarily paid for by the seller of similar property.
7. SEARCH AND SURVEY. The Representative shall furnish and
deliver to the Buyer within ten (10) days after the date of this
Agreement fully guaranteed tax, title and United States
District Court searches, and searches under the Uniform
Commercial Code of records in the appropriate offices as
against the Partnership and the Contributing Partners, dated
or redated subsequent hereto, and a copy of the most recent
instrument survey of the Property. Prior to Closing, the
Representative shall deliver to Buyer an update of the
instrument survey previously delivered, dated or redated
subsequent hereto certified to such persons and
organizations as may be designated by Buyer, made by a land
surveyor duly licensed by the State of New York, showing the
boundaries of the land conveyed hereunder, all improvements
thereon and the location of all easements, all improvements
thereon and the location of all easements, rights-of-way or
similar encroachments affecting same, prepared and certified
in accordance with the code of practice adopted by the New
York State Association of Professional Land Surveyors.
Notwithstanding the foregoing, the redated survey must not
differ in any material respects from the survey initially
delivered to and reviewed by Buyer. The Contributing
Partners shall pay for the continuation of said tax, title,
United States District Court, local tax and Uniform
Commercial Code searches to and including the date of
Closing and for any required revenue stamps in connection
with the transfer.
Page 4
8. TITLE DOCUMENTS. At the time of Closing, each of the
Contributing Partners shall tender to Buyer an assignment of
all their Partnership Interests in the Partnership free and
clear from all liens and encumbrances as well as such
amendments to the partnership agreement and certificates of
the Partnership as shall be necessary or appropriate to
effectuate the transfer. The Representative shall also
deliver to Buyer a certificate of title and any necessary
transfer documents relating to the Truck, a current rent
roll ("Rent Roll") certified, as of the date of Closing,
which shall include a list of all tenants, all rental
obligations of each tenant with respect to the Property and
all security deposits. At Closing, the Representative shall
deliver complete originals of each lease listed on the Rent
Roll. Finally, at Closing, the Representative shall deliver
a fully executed Assignment of Contract in the form attached
hereto as Exhibit E.
9. INSPECTION. Upon and after acceptance of this Agreement by
the Contributing Partners, the Contributing Partners agree that
Buyer and its authorized representatives shall have the
right and privilege to enter upon the Property and the
Partnership's offices, upon reasonable notice, during
regular business hours, for the purpose of gathering such
information and conducting such environmental and
engineering studies or other tests and reviews as Buyer may
deem appropriate and necessary. All such inspections,
studies, tests and reviews shall be at Buyer's sole expense.
The Contributing Partners agree to cooperate with Buyer by
making available to Buyer such records, plans, drawings or
other data as may be in their or the Partnership's
possession or control relating to the Property and its
operation; provided, however, that Buyer agrees to indemnify
the Contributing Partners and the Partnership of and from
any loss or damage occasioned by such entry, and agrees
further to restore to its original condition, at Buyer's own
cost and expense, any property disturbed by such entry.
10. TITLE EXAMINATION; OBJECTIONS TO TITLE.
A Within ten (10) banking days after receipt of the title
and survey documents described in Section 7 above, Buyer agrees
to furnish to the Representative a specification in
writing of any objection to title that Buyer believes
it is not required to take title subject to, which
shall not include the exceptions permitted in Section 3
of this Agreement. The Representative may, but shall
not be required to, bring any action or proceedings or
take such other action as may be appropriate to render
title to the Property marketable.
B The Representative shall have ten (10) banking days
from receipt of notice, if any, from Buyer of its title
objections within which it must notify Buyer in writing
if it cannot cure.
C In the absence of such notice from the Representative,
the Contributing Partners shall be obligated to cure the title
objections, if any, made by Buyer. If the
Representative notifies Buyer that it is unable to
convey a good and marketable title to the property
described above, subject to and in accordance with the
provisions of this contract, then, except as
hereinafter provided, Buyer may elect, by written
notice to the Representative, to either:
Page 5
(5) terminate this Agreement by notice delivered to the
Representative within five (5) banking days of receipt of the
Representative's notice that it cannot cure the title objections,
in which event, this Agreement shall wholly cease and terminate,
and neither party shall have any further claim against the other
by reason of this Agreement; or
(6) proceed with the purchase, provided the Representative is
able to obtain a commitment for title insurance and thereafter
pay the premium for said title insurance endorsement(s) which
insure the exception(s) on behalf of the Buyer.
Notwithstanding anything to the contrary contained herein,
Buyer may accept such title as the Contributing Partners may be
able to convey, without reduction of the Purchase Price or any
credit or allowance against the same and without any other
liability on the part of the Contributing Partners and if Buyer
elects to do so, the Contributing Partners shall have no right to
terminate this Agreement as hereinabove provided.
D If a search of the title discloses judgments,
bankruptcies or other returns against other persons
having names the same as or similar to that of the
Partnership or the Contributing Partners, the
Representative will on request deliver to Buyer an
affidavit showing that such judgments, bankruptcies or
other returns are not against the Partnership or the
Contributing Partners.
E The Representative agrees that, upon the request of the
Buyer, it will provide an affidavit in such form and with such
content as shall allow the Buyer to obtain a non-
imputation endorsement to the title policy purchased by
the Buyer.
11. USE OF PROPERTY. The Contributing Partners represent that
the Property and any improvement thereon are in full compliance
with restrictive covenants, statutes, ordinances,
regulations, and/or other administrative enactments
including, but not limited to building codes and zoning
ordinances for the present use as a multi residential
dwelling.
12. CLOSING DATE. The Closing shall occur within 15 days after
the end of the Due Diligence Period (as hereinafter defined)
(the "Closing" or "Closing Date") at the Buyer's office, or
at such other time and place as may be mutually agreed upon.
13. POSSESSION. Buyer shall have possession and occupancy of
the Property from and after the date of delivery of the
assignments of Partnership Interests, subject only to
matters herein provided for.
14. BROKER'S COMMISSION. The Contributing Partners represent to
Buyer that they did not employ any broker in connection with this
sale. The Buyer represents that it employed Xxxxxx
Xxxxxxxxxx as broker and agrees that it will pay any fees or
commissions due as a result of the Buyer's employment of
that broker. The Contributing Partners and Buyer each agree
to indemnify the other for any and all claims and expenses,
including legal fees, if any other fees or commission is
determined to be due by reason of the employment of any
other broker by the indemnifying party. This representation
and indemnity shall survive the Closing.
Page 6
15. RISK OF LOSS. The risk of loss or damage to all or part of
the Partnership's interest in the Property by fire or other
casualty or by taking by eminent domain, until Closing,
shall be assumed by the Contributing Partners and upon the
happening of such event, Buyer shall have the election of
terminating this Agreement without further liability
hereunder, or of completing this purchase and receiving the
Partnership's share of insurance monies, collectible for
such loss or damage, or the award for such taking by eminent
domain.
16. CONDITIONS PRECEDENT.
A It shall be a condition to Buyer's obligations to close
that all of the representations and warranties of the
Contributing Partners are true and correct as of the
Closing;
B It shall be a condition to Buyer's obligation to close
that there are at Closing 120apartment units in rentable
condition, that the remaining 15 apartments shall be in
rentable condition, but for the need for general clean-
up, re-painting and/or carpet replacement and that all
135 units are in compliance with federal, state, county
or local laws, ordinances, rules and regulations;
C Buyer shall have thirty (30) days after the date of
this Agreement (the "Due Diligence Period") within which to
review and inspect the Property and the Other Items
(including, but not limited to, performing engineering
and Phase I environmental studies), the Partnership's
books and records pertaining to the Property and the
Other Items, matters relating to zoning compliance and
compliance by the Property and the Other Items with
other applicable governmental regulations, the market
in which the Property operates, the documents relating
to the Existing Loan, the tax assessment on the
Property as it relates to the Purchase Price and to the
assessment on comparable properties and such other
matters as Buyer shall deem reasonably necessary or
appropriate in connection with the Property and the
Other Items. If Buyer determines that it does not wish
to purchase the Partnership Interests as a result of
its findings during the Due Diligence Period and
notifies the Representative of such decision within the
Due Diligence Period, this Agreement shall be null and
void and neither party shall have any further rights or
obligations under this Agreement. Buyer's failure to
object within the Due Diligence Period shall be deemed
a waiver by Buyer of the condition contained in this
Section 16(C).
D It shall also be a condition to Buyer's obligation to
close that during the Due Diligence Period, the Buyer shall
obtain the approval of the Board of Directors (the
"Board") of its general partner - Home Properties of
New York, Inc., - to the acquisition of the Partnership
Interests on the terms and conditions described herein.
If Buyer does not obtain the Board's approval within
the Due Diligence Period, the Buyer shall promptly
notify the Representative in which event this Agreement
shall be null and void and neither party shall have any
further rights or obligations under this Agreement.
Buyer's failure to notify the Representative within the
Due Diligence Period of its failure to obtain Board
approval shall be deemed a waiver by Buyer of the
conditions contained in this Section 16(E).
Page 7
E It shall be a condition to Buyer's obligation to close
that as of the Closing Date each of the Contributing Partners
shall have provided the Buyer with an indemnification
in the form of Exhibit B hereto and shall, upon
execution of this Agreement, also have executed the
Agency Agreement in the form attached hereto as Exhibit
C whereby Xxxxxx X. Xxxxxxx XX (the "Representative")
is appointed as the representative of the Contributing
Partners.
It is understood that the contingencies set forth
herein are for Buyer's benefit and may be waived by Buyer at any
time. If the above contingencies are not satisfied or
waived by the Buyer, the Buyer shall have the right to
terminate this Agreement by written notice to the
Representative. In the event of such a termination,
this Agreement shall be null and void and neither party
shall have any further rights or obligations under this
Agreement.
17. ENVIRONMENTAL CERTIFICATION. By acceptance of this
Agreement, each of the Contributing Partners represents,
warrants, and certifies to Buyer that such Contributing
Partner has no knowledge of any violation, and has received
no notice of any violation of any applicable Environmental
Laws (below defined). To the best of each of the
Contributing Partner's knowledge, the Partnership and such
Contributing Partner has not, nor has any other person,
used, generated, stored, dumped, released, buried, dispersed
or emitted any Hazardous Substance on the Property nor are
there any transformers or underground tanks on the Property,
nor is there a violation of any Environmental Laws with
respect to the current use of the Property. "Environmental
Laws" shall mean all federal, state and local environmental,
health, chemical use, safety and sanitation laws, statutes,
ordinances and codes relating to the protection of the
environment and/or governing the use, storage, treatment,
generation, transportation, processing, handling, production
or disposal of any Hazardous Substance and the rules,
regulations, and orders with respect thereto. "Hazardous
Substance" means, without limitation, any flammable,
explosive or radioactive material, polychlorinated biphenyl,
petroleum or petroleum product, methane, hazardous
materials, hazardous wastes, hazardous or toxic substances
or related materials, as defined in the Comprehensive
Environmental Response, Compensation and Liability Act of
1980, as amended (42 U.S.C. Sections 9601, et seq.), the
Hazardous Materials Transportation Act, as amended (49
U.S.C. Appendix Sections 1801, et seq.), the Resource
Conservation and Recovery Act, as amended (42 U.S.C.
Sections 6901, et seq.), the Toxic Substances Control Act,
as amended (15 U.S.C. Sections 2601, et seq.), Articles 15
and 27 of the New York State Environmental Conservation Law
or any other Environmental Law and the regulations
promulgated thereunder applicable on the effective date of
this Agreement. From the date of acceptance hereof to and
including the date of Closing, each of the Contributing
Partners shall immediately provide Buyer with a copy of any
notice, citation, complaint or other directive from any
person, entity or governmental authority whereby the
Partnership's or such Contributing Partner's compliance with
Environmental Laws is called into question, and immediately
notify Buyer of any new information or other developments
which could tend to supplement or modify the information
contained herein.
18. REPRESENTATIONS AND WARRANTIES OF SELLER. Each of the
Contributing Partners represents and warrants to Buyer as of the
date hereof and as of Closing, that:
A To the best of such Contributing Partner's knowledge
after due inquiry, the Partnership and such Contributing Partner
has no liability or obligation of any nature which in
any way affects or is related to the Property, the
Other Items or
Page 8
the Partnership Interests whether now due or to become due,
absolute, contingent or otherwise, including
liabilities for taxes (or any interest or penalties
thereto) other than disclosed in this Agreement.
B To the best of such Contributing Partners' knowledge,
after due inquiry, there is no litigation, proceeding or
investigation pending, or to the knowledge of such
Contributing Partners threatened, against or affecting
the Partnership or such Contributing Partner that might
affect or relate to the validity of this Agreement, any
action taken or to be taken pursuant hereto, or the
Property, the Other Items or the Partnership Interests
or any part or the operation thereof, whether or not
fully covered by insurance.
C To the best of such Contributing Partners' knowledge
after due inquiry, the Partnership has complied with and is not
in default under, or in violation of, or received any
notice that the Partnership, the Property or the Other
Items may be in violation of, any law, ordinance, rule,
regulation or code or condition in any approval or
permit pursuant thereto (including without limitation,
any zoning, sign, environmental, labor, safety, health
or price or wage control, ordinance, rule, regulation
or order of) applicable to the ownership, development,
operation or maintenance of the Property or the Other
Items.
D To the best of such Contributing Partner's knowledge
after due inquiry, there are no written leases affecting the
Property with a term greater than one (1) year.
E To the best of such Contributing Partner's knowledge
after due inquiry, there is no pending condemnation of the
Property, or any part thereof, or of any plans for
improvements which might result in a special assessment
against the Property.
F Such Contributing Partner and, to the best of such
Contributing Partner's knowledge, the Partnership has not
received any written notice or request from any
insurance company, Board of Fire Underwriters (or
organization exercising functions similar thereto)
requesting the performance of any work or alteration in
respect of the Property or the Other Items.
G Security deposits held by the Partnership will be
correctly identified as of Closing with respect to the Property.
H To the best of such Contributing Partner's knowledge
after due inquiry, there are no Service Contracts with respect to
the Property or the Other Items which will continue in
effect after the Closing except as set forth on
Schedule "B" attached hereto.
I To the best of such Contributing Partner's knowledge
after due inquiry, there are no executory contracts connected
with the Property or the Other Items, except as set
forth on Schedule "C" attached hereto. The Partnership
and the Partnership's employees and agents have not
let, and will not let any contracts for improvements to
the Property which will not be fully completed and
fully paid for prior to Closing.
J Until Closing, the Partnership shall continue to
fulfill all of its obligations under the terms of the Leases
encumbering the Property, and under the Service
Contracts, and the Partnership shall operate, maintain
and repair all landscaping, buildings, fixtures and
facilities, in accordance with normally accepted
business
Page 9
principles, and the Partnership shall continue to operate the
Property in a commercially reasonable manner.
K To the best of such Contributing Partner's knowledge after
due inquiry, the
financial information previously provided to Buyer with respect
to the Property is substantially accurate.
L To the best of such Contributing Partner's knowledge after
due inquiry, all of the
ranges and refrigerators located within the apartment units are
the property of the Partnership and not of the tenants.
M This Agreement has been duly authorized, executed and
delivered and constitutes a legal and binding obligation of such
Contributing Partner, enforceable in accordance with
its terms, except as may be limited by bankruptcy and
other laws affecting creditors' rights generally.
N Neither the entry into this Agreement, nor the carrying
out of the transactions contemplated herein has resulted or will
result in any violation of, or be in conflict with, or
result in the creation of, any mortgage, lien,
encumbrance or charge (other than those contemplated
hereby) upon any of the properties or assets of the
Partnership or the Contributing Partner pursuant to, or
constitute a default
under, any certificate of incorporation, by-law, partnership
agreement, or mortgage, indenture, contract, agreement,
instrument, franchise, permit, judgment, decree, order,
statute, rule or regulation applicable to the
Partnership, the Contributing Partner or the Property.
O To the best of such Contributing Partner's knowledge,
no consent or approval by, or authorization of, or filing,
registration or qualification with, any federal, state
or local governmental authority, bureau, department or
agency, or any corporation, person or other entity is
required as of the Closing either for the execution,
delivery or performance of this Agreement by such
Contributing Partner, or in connection with the
consummation by such Contributing Partner of the
transactions contemplated by this Agreement.
P The Partnership is now, or will be on the Closing Date,
the lawful owner of 100% of the fee interest in the
Property and the Other Items.
Q The Contributing Partners have the interests in the
Partnership as indicated on the attached Schedule A.
The representations and warranties of the Contributing
Partners contained in this Agreement, the statements in any
Exhibit or Schedules attached to this Agreement, or other
instruments furnished to Buyer at or prior to Closing
pursuant to this Agreement, or in connection with the
transactions contemplated pursuant to this Agreement, do not
contain any untrue statements of a material fact, or fail to
state a material fact necessary to make it not misleading.
The representations and warranties contained herein shall
survive delivery of the assignment of the Partnership
Interests and shall not merge therein.
Each of the Contributing Partners acknowledges that each of
the representations made by it in this paragraph 18 and
elsewhere in this Agreement is material to Buyer hereunder.
As to any representation or warranty set forth herein, each
of the
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Contributing Partners shall indemnify, defend and hold Buyer safe
and harmless from and against any and all loss, damage,
claim, counterclaim, cause of action, cost or expense,
including, without limitation, reasonable attorneys' fees
and disbursements at both trial and appellate levels,
suffered, paid or incurred by, or asserted against Buyer,
directly or indirectly, whether foreseen or unforeseen, and
whether for personal injury or death or for property damage
or otherwise by reason of such Contributing Partner's breach
of any warranty or obligation under this Agreement or if any
representation of such Contributing Partner in this
Agreement is wholly or partially untrue.
Irrespective of anything to the contrary contained herein
the representations and warranties of the Contributing Partners,
herein contained, shall expire and be of no further effect upon
the expiration of 12 months after Closing. This expiration shall
not apply to any breach of warranty or representation which
arises out of an intentional material misrepresentation made by
any Contributing Partner.
19. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Seller as of the date hereof and as of the Closing:
(a) Buyer is and will be as of the date of Closing
duly organized, validly existing and in good standing
under the laws of the State of New York and has all the
requisite power and authority to enter into and carry
out this Agreement according to its terms.
(b) Subject to the receipt of the approval of the
Board, this Agreement has been duly authorized,
executed and delivered and constitutes a legal and
binding obligation of Buyer, enforceable in accordance
with its terms, except as may be limited by bankruptcy
and other laws affecting creditors' rights generally.
(c) To the best of its knowledge after due inquiry,
there is no litigation, proceeding or investigation
pending, or to the knowledge of Buyer threatened,
against or affecting Buyer or the partners of Buyer
that might affect or relate to the validity of this
Agreement or any action taken or to be taken pursuant
hereto, or that might have a material adverse effect on
the business or operations of the Buyer.
(d) Buyer will cause the Partnership to pay and
does hereby indemnify the Partners against any obligations of
the Partners to pay the legal fees owed to Xxxxx X.
Xxxxxxxx, Esq. in connection with the reduction in the
real property assessment of the Property to take effect
on September 1, 1997, provided that the amount of those
fees shall not exceed 50% of the savings resulting from
that lower assessment realized with respect to the
1997/1998 town and school tax and the 1998 county tax.
20. ASSIGNMENT. This Agreement, and all rights of Buyer
hereunder, may be assigned by Buyer to any affiliate without the
Contributing Partners' or the Representative's prior
consent. Any other assignment by Buyer shall require the
Representative's prior written consent, which consent shall
not be unreasonably withheld. Any assignment by the Buyer
shall not relieve the Buyer of any obligation of the Buyer
created by this Agreement.
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21. NOTICE. All notices given pursuant to any provisions of
this Agreement shall be in writing and shall be effective only if
delivered personally, or sent by registered or certified
mail, postage prepaid or sent by a national over-night
carrier, to the addresses set forth below:
To the Contributing Partners Xxxxxx X. Xxxxxxx XX
c/o their Representative: c/o JML Optical Industries, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
To Buyer: HOME PROPERTIES OF NEW YORK, L.P.
Attn: Xxxxxx Xxxxxxxxx, Chairman
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
22. PLANS. The Contributing Partners agree to provide Buyer
with all plans and architectural drawings in their possession for
the improvements completed at the Property, including,
without limitation, all "as-built" plans in their possession
and the Contributing Partners further agree that they will
endeavor to turn over the same to Buyer promptly upon
execution of this Agreement.
23. APPLICABLE LAW. This Agreement shall be construed and
governed in accordance with the laws of the State of New York.
24. ENTIRE AGREEMENT. This Agreement shall constitute the
entire agreement between the parties, and any and all prior
understandings or agreements, whether written or oral, are
hereby merged into this Agreement. This Agreement cannot be
modified except by a written instrument signed by the
parties hereto.
25. BINDING AGREEMENT. This Agreement shall not be binding or
effective until properly executed by Buyer and Seller.
26. CONFIDENTIALITY. By execution of this Agreement and except
as otherwise provided herein, prior to the Closing each of the
Contributing Partners and Buyer agree to keep any and all
information with respect to the transactions contemplated by
this Agreement strictly confidential, and will not disclose
any such information, without the other's prior written
consent. Buyer may disclose the existence of this Agreement
to the extent necessary to conduct its due diligence with
respect to the Property.
27. FINANCIAL ACCESS. The Representative will provide a signed
representation letter as prescribed by Generally Accepted
Auditing Standards as promulgated by the Auditing standards
Division of the American Institute of Public Accountants
which representation is required to enable an Independent
Public Accountant to render an opinion on such financial
statements. The Contributing Partners will provide access
by Buyer's representatives, to all financial and other
information relating to the Property as is sufficient to
enable them to prepare audited financial statements, at
Buyer's expense, in conformity with Regulation S-X of the
Securities and Exchange Commission (the
Page 12
"Commission") and any registration statement, report or
disclosure statement required to be filed with the
Commission.
28. PRE-TRANSFER PARTNERSHIP LIABILITIES. Buyer agrees to
assume only those liabilities with respect to the
Partnership, the Partnership Interests and the Property as
are specifically described herein. To insure payment of any
additional liabilities not assumed by the Buyer herein,
Buyer and the Contributing Partners will enter into the
Agreement attached hereto as Exhibit D relating to the
escrow of certain funds to pay for any such additional
liabilities (the "Escrow Agreement'). To the extent that
there are now or in the future any additional liabilities
not assumed by the Buyer herein and not paid for from the
proceeds held under the Escrow Agreement, the Contributing
Partners shall assume responsibility for those payments.
IN WITNESS WHEREOF, the parties hereto have caused this
Instrument to be executed as of the day and date first above
written.
HOME PROPERTIES OF NEW YORK, L.P.
By: Home Properties of New York, Inc.
General Partner
By: /s/ Xxxxxx Xxxxxxxxx
-----------------------------
Title: Chairman
-----------------------------
For purposes of agreeing to perform the
obligations of the Representative hereunder.
/s/ Xxxxxx X. Xxxxxxx XX
-----------------------------
Xxxxxx X. Xxxxxxx XX
CONTRIBUTING PARTNERS
/s/ Xxxxxx X. Xxxxxxx XX
-----------------------------
Xxxxxx X. Xxxxxxx XX
/s/ Xxxxxxx X. XxXxxxxx
-----------------------------
Xxxxxxx X. XxXxxxxx
/s/ Xxxxxx X. Xxxxxx
-----------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxxxxx X. Xxxxx
-----------------------------
Xxxxxxxxx X. Xxxxx
Page 13
/s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------
Xxxxxxx X. Xxxxxxxxx
/s/ Xxxxxxx X. Xxxxx POA
-----------------------------
Xxxx X. Xxxxxxxx
Page 14
September 24, 1997
Xx. Xxxxxx X. Xxxxxxx XX
c/o JML Optical Industries Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000-0000
Re: Acquisition of Hillcourt Apartments South Company and
Xxxxxx Arms Apartments
Dear Xxx:
Based upon our further discussion, we are prepared to remove our
due diligence contingency and proceed to close the purchase of
subject properties in accordance with the purchase and sale
agreements dated June 17, 1997 with the following revisions:
1. The purchase price is to be revised from $7,000,000 for the
two properties to $6,600,000 with the adjustment allocated
between the two properties on a pro rata basis using the
original contract selling prices as a basis for that
proration; and
2. For those partners electing to receive Home Properties'
operating partnership units, the price is to be set at
$2411/16 ($24.6875).
With your prompt acceptance, we would expect to close this
transaction during the middle or late days of October.
I have provided for your acceptance below.
Sincerely,
Xxxxxx X. Xxxxxxxxx
Chairman
NPL:bsl
Page 1
HOME PROPERTIES OF NEW YORK, L.P.
By: Homes Properties of New York, Inc.
General Partner
/s/ Xxxxxx X. Xxxxxxxxx
------------------------------
Xxxxxx X. Xxxxxxxxx, Chairman
For purposes of agreeing to perform the obligations of the
Representatives hereunder.
/s/ Xxxxxx X. Xxxxxxx XX
------------------------------
Xxxxxx X. Xxxxxxx XX
CONTRIBUTING PARTNERS FOR XXXXXX ARMS APARTMENTS
/s/ Xxxxxx X. Xxxxxxx XX
------------------------------
Xxxxxx X. Xxxxxxx XX
/s/ Xxxxxxx X. XxXxxxxx
------------------------------
Xxxxxxx X. XxXxxxxx
/s/ Xxxxxx X. Xxxxxx
------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxxxxx X. Xxxxx
------------------------------
Xxxxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxxxx
Page 2
/s/ Xxxxxxx X. Xxxxxx, Power of Attorney for
------------------------------
Xxxx X. Xxxxxxxx
FOR CONTRIBUTING PARTNERS OF HILLCOURT APARTMENTS SOUTH COMPANY
/s/ Xxxxxx X. Xxxxxxx XX
------------------------------
Xxxxxx X. Xxxxxxx XX
/s/ Xxxxxxx X. Xxxxxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxxxxx
/s/ Xxxxxxx X. Xxxxxx
------------------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxx XxXxxxx
------------------------------
Xxxx XxXxxxx
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