Exhibit 4
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (the "Agreement") is made as of the 15th
day of May, 2003 (the "Effective Date"), by and between THE TC-CHARLESMONT
COMPANY, a Maryland general partnership ("Seller"), having an address at 000
Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxxxxx 00000 and XXXXXX REALTY
HOLDINGS, INC., a Massachusetts corporation ("Purchaser"), having an address at
00 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000.
WITNESSETH:
ARTICLE I
PURCHASE AND SALE
1.1 AGREEMENT OF PURCHASE AND SALE. Subject to the terms and conditions
hereinafter set forth, Seller agrees to sell and convey and Purchaser agrees to
purchase the following:
(a) that certain tract or parcel of land situated in the Twelfth
Election District of Baltimore County, Maryland, more particularly
described on EXHIBIT A attached hereto, together with all and singular the
rights and appurtenances pertaining to such property, including any right,
title and interest of Seller in and to adjacent streets, alleys or
rights-of-way (collectively, the "Land");
(b) the apartment buildings, other structures, fixtures and other
improvements on the Land known as the Charlesmont Apartments, including
specifically, without limitation, the 19 garden apartment buildings
containing 565 apartment units (the property described in clause (b) of
this Section 1.1 having a street address of 0000 Xxxxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxx 00000 and being herein referred to collectively as the
"Improvements");
(c) all of Seller's right, title and interest in and to all tangible
personal property upon the Land or within the Improvements, including
specifically, without limitation, any vehicles, appliances, furniture,
carpeting, draperies and curtains, tools and supplies, and other items of
personal property (excluding cash, partnership and corporate books and
records and computer hardware and software) owned by Seller and used in
connection with the operation of the Land and the Improvements, more
particularly described on EXHIBIT B attached hereto (collectively, the
"Personal Property") provided, however, that Purchaser acknowledges that
the furniture and furnishings of the model apartments are provided on a
complimentary revocable lease basis by Xxxxx Rents;
(d) all of Seller's right, title and interest in and to all lease
agreements with apartment tenants (collectively, the "Leases") listed and
described on EXHIBIT C (the "Lease Schedule") attached hereto; and
(e) all of Seller's right, title and interest in and to (i) all
assignable contracts and agreements (collectively, the "Operating
Agreements") listed and described on EXHIBIT D (the "Operating Agreements
Schedule") attached hereto relating to the upkeep, repair, maintenance or
operation of the Land, Improvements or Personal Property which will extend
beyond the date of Closing (as such term is defined in Section 4.1 hereof),
including specifically, without limitation, all assignable equipment
leases, (ii) all assignable existing warranties and guaranties (expressed
or implied) issued to Seller in connection with the Improvements or the
Personal Property, (iii) subject to the exclusions set forth in clause (v)
below, all other assignable intangible personal property owned by Seller
and used exclusively in connection with the ownership, operation, and
maintenance of the Land, Improvements or Personal Property, including
without limiting the generality of the foregoing, all licenses, permits,
entitlements, governmental approvals issued to Seller in connection with
the Improvements or the Personal Property, (iv) the telephone listings of
the Improvements, and (v) the name "Charlesmont" (excluding the name "Town
and Country" or "Town & Country" or "T and C" or "T&C") (the property
described in clause (e) of this Section 1.1 being sometimes herein referred
to collectively as the "Intangibles").
1.2 PROPERTY DEFINED. The Land, the Improvements, the Personal Property,
the Leases and the Intangibles are hereinafter sometimes referred to
collectively as the "Property."
1.3 PERMITTED EXCEPTIONS. The Property shall be conveyed subject to the
matters which are, or are deemed to be, Permitted Exceptions pursuant to Article
II hereof (herein referred to collectively as the "Permitted Exceptions").
1.4 ESCROW. Simultaneously with the execution and delivery of this
Agreement by Seller and Purchaser, an escrow shall be established with Revere
Title Agency, Inc. (the "Escrow Agent") having its office at 0000 Xxxxxxxx Xxxxx
Xxxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxx 00000 (Fax: 000-000-0000) Attention: Xxxxx
X. Xxxxxxx, agent for Lawyers Title Insurance Corporation (the "Title Company"),
which shall serve as escrow agent for the parties. This Agreement, together with
the terms and conditions of the Escrow Agreement attached hereto as Exhibit E
and incorporated herein by reference, which shall be executed simultaneously
herewith, shall serve as escrow instructions for the Escrow Agent; provided,
however, that in the event of any conflict between the provisions of this
Agreement and the Escrow Agreement, the provisions of this Agreement shall
govern. On or before three (3) business days prior to the date established for
the Closing, the Escrow Agent shall furnish Purchaser and Seller with an
estimated pro forma closing statement for their review and approval.
Prior to the date established for the Closing, each of the parties
shall deposit with the Escrow Agent whatever documents or other instruments are
required of each hereunder.
1.5 PURCHASE PRICE. Seller is to sell and Purchaser is to purchase the
Property for a total of Twenty Seven Million Two Hundred Eighty Thousand Dollars
($27,280,000).
1.6 NON-REFUNDABLE PAYMENT. No later than two (2) business days after the
Effective Date, Purchaser shall pay to Seller in good funds by federal wire
transfer the sum of Forty Thousand Seven Hundred Twenty Dollars ($40,720) as
consideration for Seller entering into this Agreement (the "Initial Payment").
The Initial Payment shall be earned by Seller entering into this Agreement and
the Other TC Agreements (hereinafter defined) and shall be non-refundable
(subject to the provisions of Sections 6.2 and 7.2 hereof). The Initial Payment
shall be credited against the Purchase Price in accordance with Section 1.8
hereof.
1.7 XXXXXXX MONEY. No later than one (1) business day after the last day of
the Inspection Period (hereinafter defined), Purchaser shall deposit with the
Escrow Agent the sum of Five Hundred Seventy Thousand Eighty Dollars ($570,080)
(the "Xxxxxxx Money") in good funds, by federal wire transfer. The Escrow Agent
shall hold the Xxxxxxx Money in an interest-bearing account segregated from
Escrow Agent's other funds, in a federally insured bank. All interest accruing
on such sum shall become a part of the Xxxxxxx Money and shall be distributed as
Xxxxxxx Money in accordance with the terms of this Agreement.
1.8 PAYMENT OF PURCHASE PRICE. The Purchase Price, as increased or
decreased by prorations and adjustments as herein provided, shall be payable in
full at Closing by wire transfer of immediately available federal funds to the
Escrow Agent who shall, upon satisfaction of the conditions of this Agreement,
effect the Closing and make transfer of the Purchase Price, as adjusted, by wire
transfer of immediately available federal funds to a bank account designated by
Seller in writing to the Escrow Agent prior to the Closing. The Escrow Agent
shall apply the Xxxxxxx Money to the funds due from Purchaser at Closing.
Purchaser also shall receive a credit against the funds due from Purchaser at
Closing in an amount equal to the Initial Payment.
ARTICLE II
TITLE AND SURVEY
2.1 TITLE EXAMINATION; TITLE COMMITMENT. Purchaser shall have until the
expiration of the Inspection Period (defined in Section 3.1 hereof) to examine
matters affecting title to the Property. During the Inspection Period, Purchaser
shall obtain from the Title Company through the Escrow Agent designated in
Section 1.4 hereof, at Purchaser's expense, an ALTA title insurance commitment
(the "Title Commitment") covering the Property, showing all matters affecting
title to the Property and binding the Title Company to issue at Closing an
Owner's Policy of Title Insurance in the full amount of the Purchase Price
pursuant to Section 2.5 hereof. Purchaser shall instruct the Title Company to
deliver to Purchaser, Seller and the surveyor described in Section 2.3 below
copies of the Title Commitment and copies of all instruments referenced in
Schedule B and Schedule C thereof.
2.2 SURVEY. During the Inspection Period, Purchaser may, at Purchaser's
expense, obtain a current as-built survey of the Property by a registered land
surveyor (the "Survey").
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2.3 TITLE OBJECTIONS; CURE OF TITLE OBJECTIONS. Purchaser shall have until
the expiration of the Inspection Period to notify Seller, in writing, of such
objections as Purchaser may have to anything contained in the Title Commitment
or anything shown on the Survey ("Objection," and, collectively, "Objections").
Any matters contained in the Title Commitment or shown on the Survey to which
Purchaser does not specify an Objection during the Inspection Period shall be
deemed a Permitted Exception. In the event Purchaser shall notify Seller prior
to the expiration of the Inspection Period of any Objections, Seller shall have
the right, but not the obligation, to cure such Objections at Seller's sole
expense; provided that Seller shall cure (i) any consensual liens, such as
mortgage liens, to which the Property was subject when conveyed to Seller, (ii)
any consensual liens created by Seller, such as mortgage liens, and (iii) other
liens, not in excess of $200,000 in the aggregate for all of the Related
Transactions (as defined in Section 10.19, below), which can be cured by the
payment of a fixed sum of money, such as judgment liens or mechanics liens.
Within ten (10) days after receipt of Purchaser's notice of Objections, Seller
shall notify Purchaser in writing whether Seller elects to attempt to cure such
Objections ("Seller's Response"). Seller shall be deemed to have given Seller's
Response to Purchaser on the tenth day after receipt of Purchaser's notice of
Objections that Seller refuses to cure any such Objection as to which Seller has
not affirmatively notified Purchaser in writing of Seller's election or refusal
to cure any Objection(s). If Seller elects to attempt to cure any Objections,
and provided that Purchaser shall not have terminated this Agreement in
accordance with Section 3.2 hereof, Seller shall use reasonable commercial
efforts to remove, satisfy or cure the same prior to or at the date of Closing
to the reasonable satisfaction of Purchaser, and Seller may, with the prior
written consent of Purchaser (which consent may be withheld at Purchaser's sole
discretion), adjourn the Closing for a reasonable period of time, not to exceed
sixty (60) days, to effect the same. If Seller elects or is deemed to have
elected not to cure any Objections specified in Purchaser's notice, or if Seller
is unable to effect a cure prior to the Closing (or any date to which the
Closing has been adjourned), Purchaser shall have the following options: (i) to
accept a conveyance of the Property subject to the Permitted Exceptions,
specifically including any Objection(s) which Seller is unwilling or unable to
cure, and without reduction of the Purchase Price; or (ii) to terminate this
Agreement by delivering written notice thereof to Seller within five (5)
business days after receipt of Seller's Response or after Seller is deemed to
have given Seller's Response, and upon timely delivery of such notice of
termination, this Agreement shall terminate and the Xxxxxxx Money shall be
returned to Purchaser, and thereafter neither party hereto shall have any
further rights, obligations or liabilities hereunder except to the extent that
any right, obligation or liability set forth herein expressly survives
termination of this Agreement; provided, however, that if Seller does not cure
prior to Closing (x) any of the liens described in clauses (i), (ii) and (iii)
of the second sentence of this Section 2.3 or (y) liens of the type described in
clause (iii) in excess of $200,000 in the aggregate for all of the Related
Transactions and if by reason of such failure to cure Purchaser elects to
terminate this Agreement, Seller separately shall pay Purchaser an additional
amount equal to the lesser of Twenty Thousand Dollars ($20,000) or the cost of
the out-of-pocket costs incurred by Purchaser for the Survey, its environmental
report and its engineering report respecting the Property. If Purchaser fails to
make a timely election under clauses (i) or (ii) of the preceding sentence,
Purchaser shall be deemed to have elected to proceed under clause (ii).
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2.4 CONVEYANCE OF TITLE. On or prior to the date for Closing, Seller shall
deposit with the Escrow Agent the instruments of conveyance, documents and
writings as are required under this Agreement, in order to enable the Title
Company to issue to Purchaser, at Purchaser's expense, an ALTA Owner's Policy of
Title Insurance (the "Title Policy") covering the Property in the full amount of
the Purchase Price. Notwithstanding anything contained herein to the contrary,
the Property shall be conveyed subject to the following matters, which shall be
deemed to be Permitted Exceptions:
(a) the rights of tenants, as tenants only, under the Leases and any
new Leases entered into between the Effective Date and Closing in
accordance with the terms of this Agreement;
(b) the lien of all ad valorem real estate taxes and assessments,
general and special, for the then current tax period, not yet due and
payable as of the date of Closing;
(c) provisions of existing applicable building and zoning laws in
effect as of the date of Closing, provided that no governmental authority
has asserted that the Property, as of the date of Closing, may not be used
as of right, without special permit or variance other than that which has
already been issued and is in full force and effect, for multi-family
residential use and for accessory uses relating thereto; and
(d) items appearing of record and set forth in the Title Commitment or
shown on the Survey and, in either case, not objected to by Purchaser or
waived or deemed waived by Purchaser in accordance with Sections 2.3 or 2.5
hereof.
2.5 PRE-CLOSING "GAP" TITLE DEFECTS. Whether or not Purchaser shall have
furnished to Seller any notice of title Objections pursuant to the foregoing
provisions of this Agreement, Purchaser may, at or prior to Closing, notify
Seller in writing of any objections to title first raised by the Title Company
or the Surveyor between (a) the date which is the earlier of (i) the effective
date of Purchaser's Title Commitment referred to above or (ii) the expiration of
the Inspection Period, and (b) the Closing. With respect to any objections to
title set forth in such notice, Seller shall have the same option to cure and
Purchaser shall have the same option to accept title subject to such matters or
to terminate this Agreement as those which apply to any notice of Objections
made by Purchaser before the expiration of the Inspection Period. If Seller
elects to attempt to cure any such matters, Seller may, with the prior written
consent of Purchaser (which consent may be withheld at Purchaser's sole
discretion), adjourn the Closing for a reasonable period of time, not to exceed
sixty (60) days, to effect the same.
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ARTICLE III
INSPECTION PERIOD
3.1 RIGHT OF INSPECTION. During the period beginning upon the Effective
Date and ending at 5:00 p.m. (local time at the Property) on June 16, 2003
(hereinafter referred to as the "Inspection Period"), Purchaser and its
employees, agents, independent contractors, lenders and consultants, shall have
the right to enter upon the Property at reasonable times (the "License") for the
purpose of performing certain environmental and other inspections concerning the
Property, as Purchaser desires to conduct in the exercise of its reasonable
discretion, including, but not limited to: (i) research regarding the Property
as is generally conducted in a Phase I environmental audit or survey; (ii) the
performance of engineering or structural investigations or audits of the
Property, (iii) property surveys, (iv) roof inspections, (v) walk-throughs of
any and/or all apartment units, (vi) discussions with on-site staff regarding
the Property, so long as such discussions do not unreasonably interfere with the
performance of the staff's duties, and (vii) reviews of all any operating files
maintained by Seller or its property manager(s) in connection with the leasing,
maintenance and/or management of the Property, including, without limitation,
the leases of apartment units, lease files, operating agreements, bills,
invoices, receipts and other general records relating to the income and expenses
of the Property, correspondence, surveys, plans and specifications, warranties
for services and materials provided to the Property, environmental audits and
similar materials, but excluding materials not directly related to the leasing,
maintenance and/or management of the Property such as Seller's internal
memoranda, financial projections, budgets, appraisals, engineering reports,
accounting and tax records and similar proprietary or confidential information;
provided, all such research, inspections, audits, tests, investigations, studies
and related activities and tests are conducted in accordance with this Agreement
or, if prior to the Effective Date, the License Agreement dated May 5, 2003
between the parties (the "License Agreement"). Purchaser specifically
acknowledges and agrees that Seller makes no representations or warranties of
any kind whatsoever, either express or implied, with respect to any of such
items except as set forth in this Agreement. Additionally, Purchaser understands
and agrees that any on-site inspections of the Property shall be conducted upon
at least twenty-four (24) hours' prior notice to Seller (which may be
telephonic) and in the presence of Seller or its representative; provided,
however, that any on-site inspection of the interior of any occupied apartment
unit shall require at least forty-eight (48) hours' prior notice. Purchaser
agrees to indemnify against, defend and hold Seller harmless from any claim for
liabilities, costs, expenses (including reasonable attorneys' fees actually
incurred) damages or injuries arising out of or resulting from the inspection of
the Property by Purchaser or its agents, and notwithstanding anything to the
contrary in this Agreement, such obligation to indemnify and hold harmless
Seller shall survive Closing or any termination of this Agreement. All
inspections shall occur at reasonable times agreed upon by Seller and Purchaser
and shall be conducted so as not to interfere unreasonably with use of the
Property by Seller or its tenants. All inspections shall be subject to the
provisions of Section 9.1. The provisions of Sections 1.B., 1.D. 4, 5, 6 and 9
of the License Agreement are incorporated by reference herein notwithstanding
any earlier termination of the License Agreement.
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3.2 RIGHT OF TERMINATION. Seller agrees that in the event Purchaser
determines (such determination to be made in Purchaser's sole discretion for any
reason or for no reason) that the Property is not suitable for its purposes,
Purchaser shall have the right to terminate this Agreement by giving written
notice thereof to Seller and the Escrow Agent prior to the expiration of the
Inspection Period. If Purchaser gives such notice of termination within the
Inspection Period, this Agreement shall terminate and the Xxxxxxx Money shall be
returned to Purchaser within five (5) days of such notice of termination.
Further if Purchaser shall elect to terminate due to the unmarketability of
title to the Property (after taking into account Purchaser's Objections and
giving effect to Seller's Response pursuant to Section 2.3), then in addition to
the Xxxxxxx Money, Seller shall return to Purchaser an amount equal to the
Initial Payment. If Purchaser fails to give Seller a notice of termination prior
to the expiration of the Inspection Period, Purchaser shall no longer have any
right to terminate this Agreement under this Section 3.2 and (subject to the
provisions of Section 2.6) shall be bound to proceed to Closing and consummate
the transaction contemplated hereby pursuant to the terms of this Agreement.
Time is of the essence with respect to the provisions of this Section 3.2.
3.3 NO APPLICATION. Without Seller's prior written consent, until Closing
Purchaser shall not make application to any governmental agency for any permits,
approval license, occupancy certificate or other entitlement for the Property or
the use or development thereof. Notwithstanding the foregoing, Purchaser shall
have the right to contact governmental agencies in connection with its rights of
inspection to determine zoning compliance and building, environmental or other
legal compliance.
ARTICLE IV
CLOSING
4.1 TIME AND PLACE. The consummation of the transaction contemplated hereby
("Closing") shall take place through the escrow hereinabove established at 10:00
a.m. July 31, 2003. Prior to Closing, Seller and Purchaser shall perform the
obligations set forth in, respectively, Section 4.2 and Section 4.3, the
performance of which obligations shall be concurrent conditions.
4.2 SELLER'S OBLIGATIONS AT CLOSING. At Closing (or prior thereto, if
hereinafter specified), Seller shall:
(a) deposit with the Escrow Agent one day prior to Closing a duly
executed special warranty deed (the "Deed") in favor of Purchaser (or its
nominee designated by Purchaser by written notice to Seller at least seven
(7) days prior to Closing) in recordable form, conveying good of record and
marketable fee simple title to the Land and Improvements, subject only to
the Permitted Exceptions; the warranty of title in the Deed will be only as
to claims made by, through or under Seller and not otherwise;
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(b) deposit with the Escrow Agent one (1) day prior to Closing a duly
executed xxxx of sale in favor of Purchaser conveying Seller's right, title
and interest in and to the Personal Property without warranty, expressed or
implied, as to merchantability and fitness for any purpose;
(c) deposit with the Escrow Agent one (1) day prior to Closing an
updated Lease Schedule dated not earlier than four (4) days prior to
Closing certified by Seller to Purchaser as being true and correct in all
material respects;
(d) assign to Purchaser, and Purchaser shall assume, the
landlord/lessor interest in and to the Leases by duly executed assignment
and assumption agreement deposited with the Escrow Agent three (3) days
prior to Closing pursuant to which (i) Seller shall indemnify Purchaser and
hold Purchaser harmless from and against any and all claims pertaining to
the Leases accruing prior to Closing and (ii) Purchaser shall indemnify
Seller and hold Seller harmless from and against any and all claims
pertaining to the Leases accruing from and after the Closing, including
without limitation, claims made by tenants with respect to tenants'
security deposits to the extent paid, credited or assigned to Purchaser at
Closing;
(e) to the extent assignable, assign to Purchaser, and Purchaser shall
assume, Seller's interest in the Operating Agreements listed on the
Operating Agreements Schedule (other than those terminated pursuant to
Section 5.4(f)) and in the other Intangibles by duly executed assignment
and assumption agreement deposited with the Escrow Agent three (3) days
prior to Closing pursuant to which (i) Seller shall indemnify and defend
Purchaser and hold Purchaser harmless from and against any and all claims
pertaining to the Operating Agreements listed on the Operating Agreements
Schedule or the other Intangibles accruing prior to Closing and (ii)
Purchaser shall indemnify and defend Seller and hold Seller harmless from
and against any and all claims pertaining to the Operating Agreements
listed on the Operating Agreements Schedule or the other Intangibles
accruing from and after the Closing;
(f) join with Purchaser outside of escrow to execute a notice in form
and content reasonably satisfactory to Purchaser and Seller which Purchaser
shall send to each tenant under each of the Leases informing such tenant of
the sale of the Property and of the assignment to Purchaser of Seller's
interest in, and obligations under, the Leases (including, if applicable
any security deposits) and directing that all rent and other sums payable
after the Closing under each such Lease shall be paid as set forth in the
notice;
(g) deliver to Purchaser such evidence as Purchaser's counsel and/or
the Title Company may reasonably require as to the authority of the person
or persons executing documents on behalf of Seller;
(h) deliver to Purchaser and the Escrow Agent an affidavit duly
executed by Seller stating that Seller is not a "foreign person" as defined
in the Federal Foreign Investment in Real Property Tax Act of 1980 and the
1984 Tax Reform Act;
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(i) deliver to Purchaser outside of escrow or make available at the
office of the Property the originals of all the Leases, Operating
Agreements and licenses and permits respecting the Property, if any, in the
possession of Seller or Seller's agents, together with such leasing and
property files and records, plans, specifications, warranties and other
items which are material in connection with the continued operation,
leasing and maintenance of the Property and any keys or key cards used to
gain access to any part or area of the Property. Purchaser shall cooperate
with Seller for a period of seven (7) years after Closing in case of
Seller's need in response to any legal requirement, financial statement
audit, a tax audit, tax return preparation or litigation threatened or
brought against Seller, by allowing Seller and its agents or
representatives access, upon reasonable advance notice (which notice shall
identify the nature of the information sought by Seller), at all reasonable
times to examine and make copies of any and all instruments, files and
records, which right shall survive the Closing;
(j) deliver to Purchaser possession and occupancy of the Property in
the same condition as existed on the Effective Date, reasonable wear and
tear, fire and other casualty excepted (subject to the provisions of
Article VII), subject to the Permitted Exceptions and persons on the
Property with the knowledge of tenants in possession;
(k) join with Purchaser in executing the Closing Statement(s) to be
prepared by the Escrow Agent and reviewed and approved by Seller and
Purchaser showing the prorations and adjustments to the Purchase Price and
charges to the parties that are provided in this Agreement;
(l) terminate any existing management agreement respecting the
Property;
(m) deliver to Purchaser copies of any certificates of occupancy
respecting the Property in Seller's possession;
(n) deliver to Purchaser a certificate updating all of Seller's
representations and warranties contained in this Agreement to the date of
Closing, and certifying same as being true and correct in all material
respects;
(o) deliver duly executed certificate of title to any titled vehicle
being transferred to Purchaser; and
(p) deliver to the Title Company (i) such affidavits and documents
from Seller as shall be required by the Title Company to (A) eliminate the
standard exception in its Title Policy relating to mechanics liens, (B)
eliminate or affirmatively insure against any exception other than the
Permitted Exceptions and (C) insure over any "gap" period resulting from
any delay in recording of documents or later-dating the title insurance
file, (ii) such other affidavits and certificates as customarily are
furnished by sellers of real estate in the vicinity of the Property, and
(iii) such organizational documents and certificates as are customarily
provided upon closing, including, without limitation,
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Seller's partnership agreement and any certificates from the state taxing
authority required by the Title Company pursuant to Schedule B-Section 1 of
its Title Commitment, so as to enable the Title Company to issue its
Owner's Policy of Title Insurance.
4.3 PURCHASER'S OBLIGATIONS AT CLOSING. At Closing (or prior thereto if
hereinafter specified), Purchaser shall:
(a) Prior to 10:00 a.m. Cleveland, Ohio time on the date of Closing,
direct Purchaser's bank and other sources providing Purchaser's funds for
Closing to immediately send by wire transfer to the Escrow Agent for
payment to Seller in the full amount of the Purchase Price, as increased or
decreased by prorations and adjustments as herein provided, it being agreed
that at Closing the Xxxxxxx Money and other Purchase Price funds on deposit
with the Escrow Agent, as so adjusted, shall be delivered by the Escrow
Agent to Seller and applied towards payment of the Purchase Price;
(b) join Seller in execution, and where applicable deposit in the
escrow three (3) days prior to Closing, of the instruments (or counterparts
thereof) described in Sections 4.2(d), 4.2(e) and 4.2(f) above;
(c) deliver to Seller such evidence as Seller's counsel and/or the
Title Company may reasonably require as to the authority of the person or
persons executing documents on behalf of Purchaser;
(d) join with Seller in executing the Closing Statement(s) to be
prepared by the Escrow Agent and reviewed and approved by Seller and
Purchaser showing the prorations and adjustments to the purchase price and
charges to the parties that are provided in this Agreement; and
(e) deliver such additional documents as shall be reasonably required
to consummate the transaction contemplated by this Agreement.
4.4 CREDITS AND PRORATIONS.
(a) The following shall be apportioned by the Escrow Agent with
respect to the Property as of 12:01 a.m., on the day of Closing, as if
Purchaser were vested with title to the Property during the entire day upon
which Closing occurs:
(i) rents which have been collected in respect of the month in
which Closing occurs (the term "rents" as used in this Agreement
includes all payments due and payable by tenants under the Leases);
(ii) taxes (including personal property taxes on the Personal
Property) and current installments of special assessments levied
against the Property;
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(iii) income and expenses under the Operating Agreements; a
(iii) income and expenses under the Operating Agreements; and
(iv) any other income or operating expenses or other items
pertaining to the Property which are customarily prorated between a
purchaser and a seller in the area in which the Property is located,
including, without limitation, any prepaid rent, deposit and
concession income.
(b) Notwithstanding anything contained in the foregoing provisions:
(i) At Closing, the Escrow Agent shall credit the account of
Purchaser with an amount equal to any security deposits actually held
by Seller pursuant to the Leases (to the extent such security deposits
have not been applied against delinquent rents or otherwise as
provided in the Leases).
(ii) Any such apportionment of taxes made with respect to a tax
year for which the tax rate or assessed valuation, or both, have not
yet been fixed shall be based upon the tax rate and/or assessed
valuation last fixed and an appropriate adjustment shall be made when
such real property taxes are billed by the applicable governmental
authorities.
(iii) Seller shall cause final water, sewer, gas, electric and
all other utility meter readings to be made as of the day of Closing
or as close thereto as reasonably possible, and shall cooperate so as
to cause the utilities to be transferred to Purchaser without
interruption of service. Seller shall pay the final bills rendered by
each such utility. Purchaser shall make application to and post any
deposits required by the utility companies. The Escrow Agent shall
have no responsibility for the proration of any such utility charges.
Seller's obligation to pay any final utility xxxx shall survive the
Closing.
(iv) The Personal Property is included in this sale, without
further charge, except that Purchaser shall pay the amount of any and
all sales or similar taxes payable in connection with the Personal
Property and Purchaser shall execute and deliver any tax returns
required of it in connection therewith, said obligations of Purchaser
to survive Closing.
(v) ALLOCATION OF RENTALS. Seller and Purchaser agree that all
rent received by Seller or Purchaser during the month in which the
Closing occurs shall be applied to rent due for such month (if
previously unpaid). All rent received by Seller or Purchaser
thereafter shall be applied first to current rentals and then to
delinquent rentals, if any, in inverse order of maturity (i.e. to the
month of collection, then to the immediately prior month, then to the
month prior thereto, etc.). Purchaser will make a good faith effort
after Closing to collect all rents in the usual course of Purchaser's
operation of the Property, but Purchaser will not be obligated to
institute any lawsuit or other collection procedures to collect
delinquent rents. Seller reserves the right after Closing to pursue
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collection of any rent which was delinquent on the date of Closing but
shall have no right to evict or dispossess any tenant in connection
therewith.
COLLECTION OF RENTALS POST-CLOSING. Unpaid and delinquent
rent collected by Seller and Purchaser after the date of Closing shall
be delivered as follows: (a) if Seller collects any unpaid or
delinquent rent for the Property, Seller shall, within fifteen (15)
days after the receipt thereof, deliver to Purchaser any such rent to
which Purchaser is entitled under "Allocation of Rentals" relating to
the date of Closing and any period thereafter, and (b) if Purchaser
collects any unpaid or delinquent rent from the Property, Purchaser
shall, within fifteen (15) days after the receipt thereof, deliver to
Seller any such rent to which Seller is entitled under "Allocation of
Rentals" relating to the period prior to the date of Closing.
(c) The provisions of this Section 4.4 shall survive Closing.
4.5 CLOSING COSTS. Seller shall pay (a) the fees of any counsel
representing Seller in connection with this transaction, (b) one-half (1/2) of
any conveyance fee, transfer tax, documentary stamp tax or similar tax which
becomes payable by reason of the transfer of the Property; and (c) one-half
(1/2) of any escrow fee which may be charged by the Escrow Agent or Title
Company. Purchaser shall pay (t) the fees of any counsel representing Purchaser
in connection with this transaction; (u) the fee for the title examination and
the Title Commitment, (v) the premium for the Owner's Policy of Title Insurance
and any endorsements to be issued to Purchaser by the Title Company at Closing;
(w) the cost of the Survey; (x) one-half (1/2) of any conveyance fee, transfer
tax, documentary stamp tax or similar tax which becomes payable by reason of the
transfer of the Property; (y) the fees for recording the deed conveying the
Property to Purchaser; and (z) one-half (1/2) of any escrow fees charged by the
Escrow Agent or Title Company. All other costs and expenses incident to this
transaction and the closing thereof shall be paid by the party incurring same.
4.6 CONDITIONS PRECEDENT TO OBLIGATION OF PURCHASER. The obligation of
Purchaser to consummate the transaction hereunder shall be subject to the
fulfillment on or before the date of Closing of all of the following conditions,
any or all of which may be waived by Purchaser in its sole discretion:
(a) Seller shall have delivered to Purchaser or deposited with the
Escrow Agent, as the case may be, all of the items required to be delivered
by Seller to Purchaser or deposited with the Escrow Agent by Seller
pursuant to the terms of this Agreement, including but not limited to,
those provided for in Section 4.2.
(b) All of the representations and warranties of Seller contained in
this Agreement shall be true and correct in all material respects as of the
date of Closing (with appropriate modifications as the context shall
require and not adverse to Purchaser).
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(c) Seller shall have performed and observed, in all material
respects, all covenants and agreements of this Agreement to be performed
and observed by Seller as of the date of Closing.
(d) No proceeding for exercise of the power of eminent domain with
respect to the Property or any part thereof shall then be pending.
(e) No proceeding to change the zoning or other land use regulations
affecting the Property or any part thereof, except as may be initiated by
Purchaser (provided, however, that notwithstanding the foregoing, Seller
shall not be deemed to have consented to, or approved of, any such
initiation or action by Purchaser), shall then be pending.
(f) There shall exist no actions, suits, arbitrations, claims,
attachments, proceedings, assignments for the benefit of creditors,
insolvency, bankruptcy, reorganization or other proceedings, pending or
threatened against Seller that would materially adversely affect Seller's
ability to perform its obligations under this Agreement.
(g) There shall exist no pending or threatened action, suit or
proceeding with respect to Seller or the Property before or by any court or
administrative agency which seeks to restrain or prohibit, or to obtain
damages or a discovery order with respect to, this Agreement or the
consummation of the transaction contemplated hereby.
4.7 CONDITIONS PRECEDENT TO OBLIGATION OF SELLER. The obligation of Seller
to consummate the transaction hereunder shall be subject to the fulfillment on
or before the date of Closing of all of the following conditions, any or all of
which may be waived by Seller in its sole discretion:
(a) The Purchase Price as adjusted pursuant to and payable in the
manner provided for in this Agreement shall have been deposited with the
Escrow Agent for payment to Seller or as otherwise contemplated by the
Exchange (hereinafter defined).
(b) Purchaser shall have delivered to Seller or deposited with the
Escrow Agent, as the case may be, all of the items required to be delivered
by Purchaser to Seller or deposited with the Escrow Agent pursuant to the
terms of this Agreement, including but not limited to, those provided for
in Section 4.3.
(c) All of the representations and warranties of Purchaser contained
in this Agreement shall be true and correct in all material respects as of
the date of Closing.
(d) Purchaser shall have performed and observed, in all material
respects, all covenants and agreements of this Agreement to be performed
and observed by Purchaser as of the date of Closing.
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ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS
5.1 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby makes the
following representations and warranties to Purchaser effective as of the
Effective Date and as of the Closing:
(a) ORGANIZATION AND AUTHORITY. Seller is a general partnership, duly
organized and validly existing under the laws of Maryland. Seller has the
full right and authority to enter into this Agreement and to transfer all
of the Property to be conveyed by Seller pursuant hereto and to consummate
or cause to be consummated the transactions contemplated herein to be made
by Seller. The person signing this Agreement on behalf of Seller is
authorized to do so.
(b) PENDING ACTIONS. There is no action, suit, arbitration,
unsatisfied order or judgment, governmental investigation or proceeding
pending, or to Seller's knowledge, threatened, against Seller, the Property
or the transaction contemplated by this Agreement, which, if adversely
determined, could individually or in the aggregate have a material adverse
effect on title to the Property or any portion thereof or which could in
any material way interfere with the consummation by Seller of the
transaction contemplated by this Agreement, or the operation of the
Property.
(c) LEASES. Seller is the lessor or landlord under the Leases. Except
as set forth in the Leases or the Lease Schedule, there are no other leases
or occupancy agreements to which Seller is a party affecting the Property.
No tenant has any option to purchase the Property or any portion thereof.
Except as otherwise set forth in the Leases, no presently effective rent
concessions have been given to any tenants and no rent has been paid in
advance by any tenants respecting a period subsequent to the Closing except
to the extent a proration of rents is contemplated by Section 4.4(a)(i). To
Seller's knowledge, except as disclosed to Purchaser in writing, no
material default exists on the part of any tenant except as set forth in
the respective tenant's lease file or as shown on the delinquency report
included in the Lease Schedule. Seller does not represent or warrant that
any particular Lease will be in force or effect at Closing or that the
tenants under the Leases will have performed their obligations thereunder.
The termination of any Lease prior to Closing by reason of the expiration
thereof, tenant's default or other termination thereof in the ordinary
course of business shall not affect the obligations of Purchaser under this
Agreement in any manner or entitle Purchaser to an abatement of or credit
against the Purchase Price or give rise to any other claim on the part of
Purchaser. The Lease Schedule and copies of the Leases furnished, and to be
furnished, by Seller to Purchaser are, and will be, true and correct in all
material respects as of the date indicated thereon.
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(d) NO VIOLATIONS. Seller has not received any written notification
from any governmental or public authority that the Property is in violation
of any applicable fire, health, building, use, occupancy or zoning laws
where such violation remains outstanding. Seller promptly shall furnish
Purchaser copies of any such notices received by Seller after the Effective
Date.
(e) TAXES AND ASSESSMENTS. True and complete copies of the most recent
real estate tax bills for the Property have been delivered to Purchaser.
Seller has not received notice from any governmental authority of any
pending municipal betterments for which a lien could be imposed on the
Property.
(f) CONDEMNATION. There are no condemnation proceedings pending, or to
Seller's knowledge, threatened, against all or any part of the Property.
(g) ENVIRONMENTAL MATTERS. Except as set forth in any environmental
assessment reports in Seller's possession and disclosed to Purchaser in
writing, Seller has received no written notification that any governmental
or quasi-governmental authority has determined that there are any
violations of environmental statutes, ordinances or regulations affecting
the Property.
(h) OPERATING STATEMENTS. The historical operating statements, if any,
delivered by Seller to Purchaser are true copies of the operating
statements on which Seller relies in the management and operation of the
Property.
(i) DEFAULT UNDER AGREEMENTS. Seller has received no written notice of
any failure to comply with the requirements of: (i) any insurance policy
insuring the Property; (ii) any board of fire underwriters or other body
exercising similar functions; or (iii) any mortgage securing the Property,
which failure has not been cured. Further, Seller has received no written
notice from any insurer advising Seller of a condition on the Property
which would render any insurance policy void or voidable.
(j) EMPLOYEES. There are no employees of Seller to whom Seller has
made any promise for or on behalf of Purchaser for continued employment by
Purchaser subsequent to Closing.
(k) OTHER AGREEMENTS. Except for this Agreement, the Leases, the
Operating Agreements and the Permitted Exceptions, there are no agreements
or contracts affecting all or any part of the Property or the use thereof
to which Seller is a party which would be binding upon or otherwise affect
Purchaser that would not be terminable at will by Purchaser without penalty
from and after the Closing.
5.2 KNOWLEDGE DEFINED. References to the "knowledge" of Seller shall refer
only to the actual knowledge of the Designated Employees (as hereinafter
defined) of The Town and Country Management Company, the manager of the Property
("T&C"), and shall not be construed, by imputation or otherwise, to refer to the
knowledge of Seller, T&C or any affiliate
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of either of them, to any property manager, or to any other officer, agent,
manager, representative or employee of Seller or T&C or any affiliate thereof or
to impose upon such Designated Employees any duty to investigate the matter to
which such actual knowledge, or the absence thereof, pertains. As used herein,
the term "Designated Employees" shall refer to the following persons: (a) Xxxxx
Xxxxxxxx, who holds the position of Regional Manager of Seller with
responsibility for management and control of the Property and (b) Xxxxx Xxxxxxx,
who holds the position of District Manager of Seller with responsibility for
management and control of the Property.
5.3 SURVIVAL OF SELLER'S REPRESENTATIONS AND WARRANTIES. The representation
and warranty of Seller set forth in Section 5.1(a) shall survive Closing and
shall be a continuing representation and warranty without limitation. All other
representations and warranties of Seller set forth in Section 5.1, shall survive
Closing for a period of one hundred eighty (180) days. No claim for a breach of
any representation or warranty of Seller shall be actionable or payable (a) if
the breach in question results from or is based on a condition, state of facts
or other matter which was known to Purchaser prior to Closing, (b) unless the
valid claims for all such breaches collectively aggregate more than Twenty Five
Thousand Dollars ($25,000) (the "Floor"), in which event the full amount of such
valid claims shall be actionable up to the cap set forth in the following
sentence, and (c) unless written notice containing a description of the specific
nature of such breach shall have been given by Purchaser to Seller prior to the
expiration of said one hundred eighty (180) day period and an action shall have
been commenced by Purchaser against Seller within two hundred twenty (220) days
of Closing. Further Purchaser agrees that any recovery against Seller for any
breach of Seller's covenants, agreements, representations and warranties
hereunder or under any other agreement, document, certificate or instrument
delivered by Seller to Purchaser, or under any law applicable to the Property or
this transaction, shall be limited to Purchaser's actual damages not in excess
of One Million and 00/100 Dollars ($1,000,000) in the aggregate and that in no
event shall Purchaser be entitled to seek or obtain any other damages of any
kind, including, without limitation, consequential, indirect or punitive
damages. Notwithstanding anything to the contrary in the foregoing, the Floor
and the cap will not apply to actual damages incurred by Purchaser to the extent
such damage was caused by Seller's fraud.
5.4 COVENANTS OF SELLER. Seller hereby covenants with Purchaser as follows:
(a) From the Effective Date hereof until the Closing or earlier
termination of this Agreement, Seller shall (i) operate and maintain the
Property in the same condition as existed on the Effective Date, reasonable
wear and tear, fire and other casualty excepted, and (ii) lease vacant
apartment units in a manner and on financial terms generally consistent
with the manner and financial terms in which Seller has operated and
maintained the Property and leased vacant apartment units prior to the
Effective Date; provided, however, that, following the expiration of the
Inspection Period, Seller, without the prior written consent of Purchaser
(which consent may be withheld at Purchaser's sole discretion), shall not
(y) rent apartment units at a rate lower than the rates used prior to the
expiration of the Inspection Period or (z) offer concessions of a greater
value that those offered prior to the expiration of the Inspection Period .
Without limiting the
15
generality of the foregoing, all apartment units vacated more than seven
(7) days prior to the Closing shall be made rent ready (as defined below)
by Seller in its customary manner at Seller's expense. Purchaser shall
receive a credit against the funds due from Purchaser at Closing in an
amount equal to One Thousand Dollars ($1,000) for each apartment unit
vacated more than seven (7) days prior to Closing which is not rent ready.
For purposes of this Agreement, "rent ready" means that the apartment has
been cleaned and painted (as needed), the carpets have been cleaned or
replaced (as needed), the appliances are in working order and all doors and
windows are operable.
(b) Seller shall not voluntarily create any liens, encumbrances,
defects in title, restrictions or easements (other than Permitted
Exceptions) without the prior written consent of Purchaser.
(c) From the Effective Date until the Closing or earlier termination
of this Agreement, Seller shall not enter into any agreements which will be
binding upon the Property following Closing, except for (i) service
contracts entered into in the ordinary course of business which are
terminable on not more than thirty (30) days notice without payment of any
fee and (ii) Leases in the ordinary course of business pursuant to Section
5.4(a) which have a term of no more than thirteen (13) months.
(d) Seller shall pay any leasing commissions (including incentive
bonuses due to Property employees) in respect of any Leases which are
signed by a tenant prior to Closing.
(e) Seller shall pay any costs incurred for any tenant improvements
which have been performed prior to Closing.
(f) Effective as of Closing, Seller shall cause to be terminated such
of the Operating Agreements listed on Exhibit D (i) which are cancelable
without payment or premium and (ii) which have been specified in a written
notice from Purchaser to Seller not later than the expiration of the
Inspection Period; provided, however, that notwithstanding the foregoing to
the contrary, in any event, Seller shall cause any management agreement and
the laundry service agreement to be terminated as of the Closing.
5.5 REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby
represents and warrants to Seller as follows:
(a) Purchaser has been duly organized and is validly existing under
the laws of Massachusetts. Purchaser has the full right, power and
authority to purchase the Property as provided in this Agreement and to
carry out Purchaser's obligations hereunder, and all requisite action
necessary to authorize Purchaser to enter into this Agreement and to carry
out its obligations hereunder have been taken. The person signing this
Agreement on behalf of Purchaser is authorized to do so.
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(b) There is no action, suit, arbitration, unsatisfied order or
judgment, government investigation or proceeding pending against Purchaser
which, if adversely determined, could individually or in the aggregate
materially interfere with the consummation of the transaction contemplated
by this Agreement.
5.6 SURVIVAL OF PURCHASER'S REPRESENTATIONS AND WARRANTIES. The
representation and warranty of Purchaser set forth in Section 5.5(a) shall
survive Closing and shall be a continuing representation and warranty without
limitation. All other representations and warranties of Purchaser shall survive
Closing for a period of one hundred twenty (120) days.
ARTICLE VI
DEFAULT
6.1 DEFAULT BY PURCHASER. If Purchaser fails to consummate this Agreement
for any reason other than a failure of any condition to Purchaser's obligation
to close, a default by Seller or the termination of this Agreement pursuant to
any termination right granted to Purchaser hereunder, then Seller shall have the
right, as its sole and exclusive remedy, to terminate this Agreement and receive
and retain an amount equal to (i) the Xxxxxxx Money hereunder PLUS (ii) the
Initial Payment, as liquidated damages and not as a penalty, the parties
acknowledging that it is impossible to compute exactly the damages which Seller
would incur in such event. The parties have taken these facts into account in
computing the amount of the Xxxxxxx Money and the Initial Payment.
6.2 DEFAULT BY SELLER. In the event that Seller fails to consummate this
Agreement for any reason, other than Purchaser's default or the termination of
this Agreement pursuant to any termination right granted to Seller hereunder,
then Purchaser shall be entitled, as its sole remedy, either (a) to receive a
sum of (i) the Xxxxxxx Money, plus (ii) an amount equal to the Initial Payment,
plus (iii) the lesser of (A) Twenty Thousand Dollars ($20,000) and (B) the
out-of-pocket costs incurred by Purchaser for the Survey, its environmental
report and its engineering report respecting the Property, which return shall
operate to terminate this Agreement and release Seller from any and all
liability hereunder, or (b) to enforce specific performance of Seller's
obligations hereunder. Purchaser expressly waives its rights to seek damages in
the event of Seller's default hereunder. Purchaser shall be deemed to have
elected to terminate this Agreement and receive back the Xxxxxxx Money plus an
amount equal to the Initial Payment if Purchaser fails to file suit for specific
performance against Seller in a court having jurisdiction in the county and
state in which the Property is located, on or before ninety (90) days following
the date (including adjournments) upon which Closing was to have occurred.
ARTICLE VII
RISK OF LOSS
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7.1 RISK OF LOSS. Subject to Sections 7.2, 7.3 and 7.4, prior to Closing,
risk of loss with respect to the Property shall remain with Seller. Upon
Closing, full risk of loss with respect to the Property shall pass to Purchaser.
7.2 MINOR DAMAGE. In the event of loss or damage to the Property or any
portion thereof which is not "major" (as hereinafter defined), this Agreement
shall remain in full force and effect and Seller shall perform, at its sole cost
and expense, all necessary repairs or, at Seller's option, (i) assign to
Purchaser all of Seller's right, title and interest to any claims and proceeds
Seller may have with respect to any casualty insurance policies or condemnation
awards relating to the premises in question and (ii) in the case of a casualty,
pays Purchaser an amount equal to the deductible on Seller's applicable casualty
insurance policies. Seller, at its sole cost and expense, shall carry, from the
Effective Date until the Closing, one hundred percent (100%) replacement cost
and twelve (12) months loss of rents insurance with respect to the Property. In
the event that Seller elects to make all necessary repairs but fails to do so by
Closing, Purchaser shall receive a credit against the funds due from Purchaser
at Closing in an amount equal to (i) the cost of completing such repairs plus
(ii) an amount equal to the estimated amount of rent that will be lost following
Closing by reason of such casualty and Seller shall make claim under its loss of
rents insurance.
In the event that Seller elects to perform repairs upon the Property,
Seller shall use reasonable efforts to complete such repairs promptly and Seller
may, with the prior written consent of Purchaser (which consent may be withheld
at Purchaser's sole discretion), adjourn the Closing for a reasonable period of
time (not to exceed the lesser of one hundred twenty (120) days or three (3)
days less than the maximum number of days allowable for the Closing to take
place within the time limits in force to allow the sale of the Property to be
part of the reverse LKE (hereinafter defined) initiated by Seller), to complete
such repairs. If Seller elects to assign a casualty claim to Purchaser, the
Purchase Price shall be reduced by an amount equal to the deductible amount
under Seller's insurance policy. Upon Closing, full risk of loss with respect to
the Property shall pass to Purchaser.
7.3 MAJOR DAMAGE. In the event of a "major" loss or damage, Purchaser may
terminate this Agreement by written notice, in which event the Xxxxxxx Money
plus an amount equal to the Initial Payment shall be returned to Purchaser. If
Purchaser does not elect to terminate this Agreement within ten (10) days after
Seller sends Purchaser written notice of the occurrence of major loss or damage,
then Purchaser shall be deemed to have elected to proceed with Closing, in which
event Seller shall, at Seller's option, either (a) perform any necessary
repairs, or (b)(i) assign to Purchaser all of Seller's right, title and interest
to any claims and proceeds Seller may have with respect to any casualty
insurance policies or condemnation awards relating to the premises in question
and (ii) in the case of a casualty, pays Purchaser an amount equal to the
deductible on Seller's applicable casualty insurance policies. In the event that
Seller elects to perform repairs upon the Property, Seller shall use reasonable
efforts to complete such repairs promptly and the date of Closing shall be
extended a reasonable time (not to exceed one hundred twenty (120) days) in
order to allow for the completion of such repairs. If Seller elects to assign a
casualty claim to Purchaser, the Purchase Price shall be reduced by an amount
equal to the deductible amount under Seller's insurance policy.
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7.4 DEFINITION OF "MAJOR" LOSS OR DAMAGE. For purposes of Sections 7.2 and
7.3, "major" loss or damage refers to the following: (i) loss or damage to the
Property or any portion thereof such that the cost of repairing or restoring the
premises in question to a condition substantially identical to that of the
premises in question prior to the event of damage would be, in the opinion of an
architect selected by Seller and reasonably approved by Purchaser, equal to or
greater than Five Hundred Thousand Dollars ($500,000), and (ii) any loss due to
a condemnation which permanently and materially impairs the current use of the
Property. If Purchaser does not give notice to Seller of Purchaser's reasons for
disapproving an architect within five (5) business days after receipt of notice
of the proposed architect, Purchaser shall be deemed to have approved the
architect selected by Seller.
ARTICLE VIII
COMMISSIONS
8.1 BROKERAGE COMMISSIONS. In the event the transaction contemplated by
this Agreement is consummated, but not otherwise, Seller agrees to pay to CB
Xxxxxxx Xxxxx, Inc., 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000-0000 (the
"Broker"), through the escrow at Closing, a brokerage commission pursuant to a
separate written agreement between Seller and the Broker. Each party agrees that
should any claim be made for brokerage commissions or finder's fees by any
broker or finder other than the Broker by, through or on account of any acts of
said party or its representatives, said party will indemnify, defend and hold
the other party free and harmless from and against any and all loss, liability,
cost, damage and expense in connection therewith. The provisions of this
paragraph shall survive Closing.
ARTICLE IX
DISCLAIMERS AND WAIVERS
9.1 NO RELIANCE ON DOCUMENTS. Except as expressly stated herein, Seller
makes no representation or warranty as to the truth, accuracy or completeness of
any materials, data or information delivered by Seller to Purchaser in
connection with the transaction contemplated hereby. Purchaser acknowledges and
agrees that all materials, data and information delivered by Seller to Purchaser
in connection with the transaction contemplated hereby and all materials viewed
by Purchaser in conducting inspections pursuant to Section 3.1 are provided to
Purchaser as a convenience only and that any reliance on or use of such
materials, data or information by Purchaser shall be at the sole risk of
Purchaser, except as otherwise expressly stated herein. Without limiting the
generality of the foregoing provisions, Purchaser acknowledges and agrees that
(a) any environmental or other report with respect to the Property which is
delivered by Seller to Purchaser shall be for general informational purposes
only, (b) Purchaser shall not have any right to rely on any such report
delivered by Seller to Purchaser, but rather will rely on its own inspections
and investigations of the Property and any reports commissioned by Purchaser
19
with respect thereto, and (c) neither Seller, any affiliate of Seller nor the
person or entity which prepared any such report delivered by Seller to Purchaser
shall have any liability to Purchaser for any inaccuracy in or omission from any
such report.
9.2 PURCHASER EXAMINATION AND ACKNOWLEDGMENT. Purchaser agrees that if
Purchaser fails to exercise its right of termination as provided in Section 3.2,
Purchaser shall be deemed to be fully familiar and satisfied with the condition
and repair of the Property, the value, income, expenses and operation thereof,
applicable zoning and land use ordinances and regulations, legal compliance and
the uses which may be made of the Property and any other matter with respect
thereto, subject, however, to the representations and warranties contained in
this Agreement. Without limiting the generality of the foregoing, Purchaser
acknowledges that certain materials and substances that were in common use
without regulation at and since the original construction of the Improvements
are now deemed to be hazardous materials or hazardous substances under
applicable law or the use, or the method of use, of such items may now be
prohibited or regulated, that some of those materials and substances may have
been used in the original construction of the Improvements or the subsequent
maintenance of the Property, that prior owners of the Property or adjacent
premises may have stored, released, transported or otherwise disposed of
material on such properties deemed to be hazardous substances under applicable
law, and that, notwithstanding Seller making available any environmental
studies, reports and investigations, subject to the representations and
warranties set forth in Section 5.1, above, Purchaser will be solely responsible
for all investigation or inquiry into such items and all costs of removal and
remediation (including consequential damages) of such items, including without
limitation asbestos-containing materials, lead-based paint and any such
materials described in said environmental studies, reports and investigations.
Purchaser further acknowledges that the Improvements were constructed prior to
the enactment of the Americans with Disabilities Act and other laws pertaining
to the availability of public accommodations for disabled persons and that the
Improvements may not be in compliance with such laws.
9.3 DISCLAIMERS. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT AND IN THE
CLOSING DOCUMENTS DELIVERED BY SELLER, IT IS UNDERSTOOD AND AGREED THAT SELLER
IS NOT MAKING AND HAS NOT AT ANY TIME MADE ANY WARRANTIES OR REPRESENTATIONS OF
ANY KIND OR CHARACTER, EXPRESSED OR IMPLIED, WITH RESPECT TO THE PROPERTY,
INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS AS TO
HABITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE (OTHER
THAN SELLER'S LIMITED WARRANTY OF TITLE TO BE SET FORTH IN THE DEED), ZONING,
TAX CONSEQUENCES, LATENT OR PATENT PHYSICAL OR ENVIRONMENTAL CONDITION,
UTILITIES, OPERATING HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS,
THE COMPLIANCE OF THE PROPERTY WITH GOVERNMENTAL LAWS, THE TRUTH, ACCURACY OR
COMPLETENESS OF THE PROPERTY DOCUMENTS OR ANY OTHER INFORMATION PROVIDED BY OR
ON BEHALF OF SELLER TO PURCHASER, OR ANY OTHER MATTER OR THING REGARDING THE
PROPERTY. PURCHASER ACKNOWLEDGES AND AGREES THAT UPON CLOSING SELLER SHALL SELL
AND CONVEY TO PURCHASER AND PURCHASER SHALL ACCEPT THE PROPERTY "AS IS, WHERE
IS,
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WITH ALL FAULTS", EXCEPT TO THE EXTENT EXPRESSLY PROVIDED OTHERWISE IN THIS
AGREEMENT. PURCHASER HAS NOT RELIED AND WILL NOT RELY ON, AND SELLER IS NOT
LIABLE FOR OR BOUND BY, ANY EXPRESSED OR IMPLIED WARRANTIES, GUARANTIES,
STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY OR
RELATING THERETO (INCLUDING SPECIFICALLY, WITHOUT LIMITATION, PROPERTY
INFORMATION PACKAGES DISTRIBUTED WITH RESPECT TO THE PROPERTY) MADE OR FURNISHED
BY SELLER, THE MANAGER OF THE PROPERTY, OR ANY REAL ESTATE BROKER OR AGENT
REPRESENTING OR PURPORTING TO REPRESENT SELLER, TO WHOMEVER MADE OR GIVEN,
DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING, UNLESS SPECIFICALLY SET FORTH IN
THIS AGREEMENT. PURCHASER REPRESENTS TO SELLER THAT PURCHASER HAS CONDUCTED, OR
WILL CONDUCT PRIOR TO CLOSING, SUCH INVESTIGATIONS OF THE PROPERTY, INCLUDING
BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS
PURCHASER DEEMS NECESSARY TO SATISFY ITSELF AS TO THE CONDITION OF THE PROPERTY
AND THE EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE TAKEN WITH RESPECT TO
ANY HAZARDOUS OR TOXIC SUBSTANCES ON OR DISCHARGED FROM THE PROPERTY, AND WILL
RELY SOLELY UPON SAME AND NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF
SELLER OR ITS AGENTS OR EMPLOYEES WITH RESPECT THERETO, OTHER THAN SUCH
REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AS ARE EXPRESSLY SET FORTH
IN THIS AGREEMENT.
9.4 SURVIVAL OF DISCLAIMERS. Seller and Purchaser agree that the provisions
of this Article IX shall survive Closing.
ARTICLE X
MISCELLANEOUS
10.1 CONFIDENTIALITY. Purchaser and its representatives shall hold in
strictest confidence all data and information obtained with respect to Seller or
its business, whether obtained before or after the execution and delivery of
this Agreement, and shall not disclose the same to others unless required by
law; provided, however, that it is understood and agreed that Purchaser may
disclose such data and information to the employees, consultants, accountants
and attorneys of Purchaser provided that such persons agree in writing to treat
such data and information confidentially. In the event this Agreement is
terminated or Purchaser fails to perform hereunder, Purchaser shall promptly
return to Seller any statements, documents, schedules, exhibits or other written
information obtained from Seller in connection with this Agreement or the
transaction contemplated herein and shall deliver all documents, correspondence,
reports, books, photographs or other written materials prepared by third party
suppliers and consultants that concern, result from or are prepared in
connection with the transaction contemplated herein. In the event of a breach or
threatened breach by Purchaser or its agents or representatives of this Section
10.1, Seller, as its sole remedy, shall be entitled to an injunction restraining
Purchaser or
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its agents or representatives from disclosing, in whole or in part, such
confidential information to compel production of documents described above in
this Section 10.1. The provisions of this Section 10.1 shall survive Closing.
10.2 PUBLIC DISCLOSURE. No release to the public of information with
respect to the sale contemplated herein or any matters set forth in this
Agreement will be made except only in the form approved by Purchaser and Seller
and their respective counsel. Notwithstanding anything to the contrary in the
foregoing, Purchaser acknowledges that Seller's parent company, a public
company, has certain required disclosure obligations with which it is required
to comply and any such disclosure shall not be deemed a violation of the first
sentence of this Section 10.2.
10.3 DISCHARGE OF OBLIGATIONS. The acceptance and recording of the Deed by
Purchaser shall be deemed to be a full performance and discharge of every
agreement and obligation on the part of Seller to be performed pursuant to the
provisions of this Agreement, except those which are herein specifically stated
to survive Closing or which by their nature will not be performed or discharged
until after Closing.
10.4 ASSIGNMENT. Purchaser may not assign its rights under this Agreement
without first obtaining Seller's written approval, which approval may be given
or withheld in Seller's sole discretion; provided, however, that Purchaser may
assign its rights under this Agreement to a corporation, general partnership,
limited partnership, limited liability company or other lawful entity authorized
to do business in the state in which the Property is located provided Purchaser
or its principals or affiliates retain more than a one percent (1%) ownership
interest in such assignee. No assignment shall release Purchaser from primary
liability on this Agreement.
10.5 NOTICES. Any notice pursuant to this Agreement shall be given in
writing by (a) personal delivery, or (b) reputable overnight delivery service
with proof of delivery, or (c) United States Mail, postage prepaid, registered
or certified mail, return receipt requested, or (d) legible facsimile
transmission (transmitted between the hours of 9:00 a.m. and 5:00 p.m. at the
place of intended receipt) sent to the intended addressee at the address(es) set
forth below, or to such other address or to the attention of such other person
as the addressee shall have designated by written notice sent in accordance
herewith, and shall be deemed to have been given either at the time of personal
delivery, or, in the case of expedited delivery service or mail, as of the date
of first attempted delivery at the address and in the manner provided herein,
or, in the case of facsimile transmission, as of the date of the facsimile
transmission provided that an original of such facsimile is also sent to the
intended addressee by means described in clauses (a), (b) or (c) above. Unless
changed in accordance with the preceding sentence, the addresses for notices
given pursuant to this Agreement shall be as follows:
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If to Seller: The Town and Country Trust
0 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
ATTN: Xxxxxx X. Xxxxxx
TELECOPY: 000-000-0000
with a copy to: Squire, Xxxxxxx & Xxxxxxx L.L.P.
0000 Xxx Xxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
ATTN: Xxxxxx X. Xxxxxxxx, Esq.
TELECOPY: 000-000-0000
If to Purchaser: Xxxxxx Realty Holdings, Inc.
00 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
ATTN: Xxxxx Xxxxxxxxx
TELECOPY: 000-000-0000
with a copy to: Seyfarth Xxxx
World Trade Center Xxxx
Xxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
ATTN: Xxxxxx X. Xxxxxxxxxx, Esq.
TELECOPY: 000-000-0000
10.6 MODIFICATIONS. This Agreement cannot be changed orally, and no
executory agreement shall be effective to waive, change, modify or discharge it
in whole or in part unless such executory agreement is in writing and is signed
by the parties against whom enforcement of any waiver, change, modification or
discharge is sought.
10.7 CALCULATION OF TIME PERIODS. Unless otherwise specified, in computing
any period of time described in this Agreement, the day of the act or event
after which the designated period of time begins to run is not to be included
and the last day of the period so computed is to be included, unless such last
day is a Saturday, Sunday or legal holiday under the laws of the State in which
the Property is located, in which event the period shall run until the end of
the next day which is neither a Saturday, Sunday or legal holiday. The final day
of any such period shall be deemed to end at 5:00 p.m., local time.
10.8 BINDING; SUCCESSORS AND ASSIGNS. The terms and provisions of this
Agreement are to apply to and bind the permitted successors and assigns of the
parties hereto.
10.9 ENTIRE AGREEMENT. This Agreement, including the Exhibits, contains the
entire agreement between the parties pertaining to the subject matter hereof and
supersedes all prior
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written or oral agreements and understandings between the parties pertaining to
such subject matter.
10.10 FURTHER ASSURANCES. Each party agrees that it will without further
consideration execute and deliver such other documents and take such other
action, whether prior or subsequent to Closing, as may be reasonably requested
by the other party to consummate more effectively the purposes or subject matter
of this Agreement. The provisions of this Section 10.10 shall survive Closing.
10.11 COUNTERPARTS. This Agreement may be executed in counterparts, and all
such executed counterparts shall constitute the same agreement.
10.12 SEVERABILITY. If any provision of this Agreement is determined by a
court of competent jurisdiction to be invalid or unenforceable, the remainder of
this Agreement shall nonetheless remain in full force and effect.
10.13 APPLICABLE LAW. This Agreement is performable in the state in which
the Property is located and shall in all respects be governed by, and construed
in accordance with, the substantive federal laws of the United States and the
laws of such state.
10.14 EXHIBITS AND SCHEDULES. The following schedules or exhibits attached
hereto shall be deemed to be an integral part of this Agreement:
(a) EXHIBIT A - Legal Description of the Land
(b) EXHIBIT B - Personal Property
(c) EXHIBIT C - Lease Schedule
(d) EXHIBIT D - Operating Agreements Schedule
(e) EXHIBIT E - Escrow Agreement
10.15 CAPTIONS. The section headings appearing in this Agreement are for
convenience of reference only and are not intended, to any extent and for any
purpose, to limit or define the text of any section or any subsection hereof.
10.16 CONSTRUCTION. The parties acknowledge that the parties and their
counsel have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any exhibits or amendments hereto.
10.17 TERMINATION OF AGREEMENT. It is understood and agreed that if either
Purchaser or Seller terminates this Agreement pursuant to a right of termination
granted hereunder, such termination shall operate to relieve Seller and
Purchaser from all obligations under this
24
Agreement, except any obligation to return the Xxxxxxx Money, and except for
such obligations as are specifically stated herein to survive the termination of
this Agreement. In the event of such termination each party is responsible for
its respective expenses incurred pursuant to this Agreement and each shall pay
one-half (1/2) the fees of the Escrow Agent incurred to the date of termination.
10.18 1031 EXCHANGE. Seller and Purchaser acknowledge that Seller desires
to structure the sale of the Property as part of a tax-deferred exchange
pursuant to Section 1031 of the Internal Revenue Code of 1986 and the Treasury
Regulations thereunder ("forward LKE"), and/or a so-called "reverse" like-kind
exchange under Revenue Procedure 2000-37, 2000-2 C.B. 308 ("reverse LKE") (any
such forward LKE or reverse LKE is referred to herein as an "Exchange").
Notwithstanding any other provisions in this Agreement to the contrary,
Purchaser agrees to cooperate with respect to Seller's structuring the
transaction as an Exchange, including any of the following as Seller may
request: (a) executing an Assignment of Rights with respect to Seller's rights
(but not its duties and obligations) under this Agreement or other documents in
order to establish a forward LKE, or (b) executing an assignment of this
Agreement to one or more corporations, limited liability companies or other
entities ("Parking Entities"), and transferring title to the Property to one or
more Parking Entities in order to establish a reverse LKE; provided that in all
events (i) the Closing shall not be delayed by reason of the Exchange nor shall
the consummation or accomplishment of the Exchange be a condition precedent or
condition subsequent to Seller's obligations under this Agreement; (ii)
Purchaser will not be required to take title to or be in the chain of title to
any property other than the Property; and (iii) Purchaser shall incur no
additional cost, expense or liability of any kind or nature in connection with
the Exchange. Notwithstanding any Assignment of Rights or other assignment (as
the case may be), Seller shall not be relieved of its obligations under this
Agreement. Seller shall prepare, at its expense, any documents in order to
accomplish an Exchange.
10.19 RELATED AGREEMENTS. Simultaneously herewith The TC-Fox Haven Company
and The TC-Woodmoor Company, entities affiliated with Seller, have entered into
with Purchaser or with an affiliate of Purchaser Purchase and Sale Agreements
for the conveyance of certain real property commonly known as Foxhaven and
Woodmoor apartments, respectively (the "Other TC Agreements"). This Agreement
and the Other TC Agreements are referred to collectively as the "Related
Agreements" and the transactions described in the Related Agreements, including
this Agreement, are collectively referred to as the "Related Transactions."
Except to the extent the parties expressly agree otherwise in writing, in the
event either of the Other TC Agreements is terminated pursuant to any
termination provision of such Related Agreement, this Agreement shall terminate
automatically simultaneously with the termination of either of the Other TC
Agreements, whereupon this Agreement shall be void and without recourse to all
parties, except for provisions which are expressly stated to survive the
termination of this Agreement. The Closing under this Agreement shall occur
simultaneously with the closing under the Other TC Agreements. In the event the
closing under either of the Other TC Agreements is cancelled or postponed, the
Closing under this Agreement shall be cancelled or postponed. In the event the
Purchaser or Seller, as applicable, defaults under the Other TC Agreements,
Purchaser or Seller, as applicable, shall be deemed in default under this
Agreement.
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10.20 TRUST DISCLAIMER. The First Amended and Restated Declaration of Trust
establishing The Town and Country Trust (the "Trust"), dated June 24, 1993, a
copy of which is duly filed with the Department of Assessments and Taxation of
the State of Maryland, provides that no trustee, officer, shareholder, employee
or agent of the Trust shall be held to any personal liability, jointly or
severally, for any obligation of, or claim against, the Trust. All persons
dealing with the Trust, in any way, shall look only to the assets of the Trust
for the payment of any sum or the performance of any obligation.
[SIGNATURES ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the Effective Date.
SELLER:
THE TC-Charlesmont COMPANY, a Maryland general
partnership
By: The TC Property Company, a Maryland general
partnership, General Partner
By: The TC Operating Limited Partnership,
a Maryland limited partnership,
General Partner
By: The Town and Country Trust, a
Maryland real estate investment
trust, General Partner
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------
Title: Executive Vice President
--------------------------
Co-Chief Operating Officer
--------------------------
PURCHASER:
XXXXXX REALTY HOLDINGS, INC., a Massachusetts
corporation
By: /s/ Xxxx X. Xxxxxx
---------------------------------------------
Name: Xxxx X. Xxxxxx
--------------------------------------
Title: Vice President
--------------------------------------
And:
-------------------------------------------
Name:
-------------------------------------------
Title:
-------------------------------------------
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