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PURCHASE AND SALE AGREEMENT
WINDSOR AT HAUPPAUGE
Hauppauge, Town of Islip
Suffolk County, New York
This Purchase and Sale Agreement (this "Agreement") is entered into as
of May , 2001, between Windsor at Hauppauge Limited Partnership, a New York
limited partnership having an address c/o General Investment & Development Co.,
000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxxxxx 00000 ("Seller") and Home
Properties of New York, L.P., a New York limited partnership having an address
at 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("Purchaser").
In consideration of the mutual covenants set forth herein and in
consideration of the xxxxxxx money deposit herein called for, whose receipt and
sufficiency are acknowledged by Seller, the parties agree as follows:
Section 1. Sale and Purchase. Seller agrees to sell, convey, and assign
to Purchaser, and Purchaser shall purchase and accept from Seller, for the
Purchase Price (hereinafter defined) and on and subject to the terms and
conditions herein set forth, all of the Seller's right, title and interest in,
to and under the following:
(a) the two parcels of land, more particularly described in
Exhibit A, together with the easements, rights of way and benefits described in
Exhibit A (the "Land"); all improvements located on the Land, including, but not
limited to, 297 residential apartment units, all located at 0000 Xxxxxxxxxx
Xxxx, Xxxxxxxxx, Xxxx of Islip, Suffolk County, New York 11788, in a rental
apartment community commonly known as Windsor Village at Hauppauge (the
"Improvements");
(b) all tangible personal property and fixtures of any kind
owned by Seller and attached to or used in connection with the ownership,
maintenance, use, leasing, or operation of the Land or Improvements, excluding
those items identified in Exhibit B (the "Personalty");
(c) all leases, occupancy agreements, or other agreements
providing for the use or occupancy of, , the residential apartments units within
the Improvements (collectively, the "Leases" and, individually, a "Lease"); ;
and all security deposits with interest as required by law, ("Security
Deposits"), made by tenants (collectively, the "Tenants" and, individually, a
"Tenant") under the Leases; and
(d) all (1) service agreements, supply or maintenance
contracts, relating to the operation of the Improvements (the "Property
Agreements") including but not limited to, those set forth on Exhibit C hereto,
(2) warranties, guaranties, indemnities, and claims against architects,
contractors and suppliers and others, if any, ("Warranties"), (3) licenses and
permits relating to operation of the Improvements ("Licenses"), and (4) trade
names, marks, and other identifying material, excluding, however, the use of the
name "Windsor".
The items listed above in this Section 1 are herein collectively called
the "Property". All of the Property shall be sold, conveyed, and assigned to
Purchaser on the Closing Date (defined below).
Section 2. Purchase Price. The purchase price for which Seller shall
sell, convey, and assign the Property to Purchaser, and which Purchaser shall
pay to Seller, is Forty-Six Million, Five Hundred Thousand and No/100
($46,500,000.00) Dollars (the "Purchase Price") subject to other adjustments and
prorations provided herein, to be paid as follows:
(a) Assumption of Existing Debt. On the closing date,
Purchaser shall assume the obligation to pay the outstanding principal balance
on the closing date of each of the following notes: (" Existing Debt"):
(i) Multifamily Note dated May 28, 1996, in the
original principal amount of Twenty Million, Five Hundred
Thirty-One Thousand, Seven Hundred and No/100 ($20,531,700.00)
Dollars, with monthly installments of One Hundred Fifty
Thousand, Six Hundred Fifty-Four and 34/100 ($150,654.34)
Dollars; and
(ii) Multifamily Note dated December 17, 1998, in the
original principal amount of Five Million, Two Hundred and
No/100 ($5,200,000.00) Dollars, with monthly installments of
Thirty Three Thousand, Six Hundred Twenty-Three and 47/100
($33,623.47) Dollars.
(b) Balance of the Purchase Price. On the Closing Date,
Purchaser shall deliver to Seller by wire transfer of immediately available
funds as directed by Seller, an amount (the "Cash Balance of the Purchase
Price") equal to the Purchase Price less the outstanding Principal balance on
the closing date of the Existing Debt.
Section 3. Deposit.
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(a) Within forty-eight (48) hours of receipt by Escrow Agent
of a fully executed counterpart of this Agreement, Purchaser shall deliver to
First American Title Insurance Company ("Escrow Agent"), whose address is Xxx
Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, by check or wire
transfer of immediately available funds, a deposit in the amount of Seven
Hundred Fifty and No/100 ($750,000.00) Dollars (together with the interest
earned thereon, the "Deposit") which Escrow Agent shall immediately deposit for
collection in an interest-bearing account invested as selected by Purchaser upon
notice to Seller and Escrow Agent. The Deposit shall be held by Escrow Agent in
accordance with the terms of Section 20 hereof.
Section 4. Delivery of Information by Seller.
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(a) Seller, at its expense, has previously delivered or will
cause to be delivered to Purchaser or will make available for Purchaser's
inspection at the Property, within five (5) business days of the execution
hereof, the information identified on Exhibit J (the " Due Diligence
Documents").
Section 5. Right of Inspection; Review Period Notice Regarding
Property Agreements.
(a) From the date of execution of this Agreement by both
parties ("Execution Date") and continuing until June 8, 2001 (the Review
Period"), Purchaser and its representatives may inspect, at reasonable hours,
the Property and the Due Diligence Documents; provided, however, in conducting
its inspection, Purchaser shall not unreasonably interfere with the business and
operations of the Tenants or of Seller. Purchaser shall be entitled to examine
the Property's physical condition, including the right to enter vacant
apartments and upon reasonable notice and the tenant's consent, the right to
enter occupied apartments, provided, that Seller may designate an employee to
accompany Purchaser at all times while Purchaser is on the Property. Purchaser
shall make all inspections in good faith. All inspection fees, appraisal fees,
engineering fees and other expenses of any kind incurred by Purchaser relating
to the inspection of the Property will be solely at Purchaser's expense.
Purchaser shall give Seller reasonable notice prior to making any inspection.
Seller shall make relevant personnel available to answer questions which
Purchaser may ask in its due diligence concerning the Property. Purchaser agrees
to protect, defend, indemnify and hold harmless Seller and its respective
partners, shareholders, affiliates, officers, employees, trustees and
beneficiaries and Seller's tenants, contractors, agents and employees, from and
against any and all injuries, losses, liens, claims, judgments, liabilities,
costs, expenses or damages (including, without limitation, reasonable attorneys'
fees and court costs) sustained by Seller which result from or arise out of any
onsite inspections by Purchaser or its representatives pursuant to this
Agreement. Purchaser agrees to return the Property to the same condition in
which the Property existed prior to Purchaser's making any inspection. Prior to
entering the Property, Purchaser shall provide Seller with an insurance
certificate evidencing comprehensive general liability insurance coverage,
satisfactory in amount, coverage and carrier to Seller, in its uncontrolled
discretion. Purchaser shall keep all information furnished to it by Seller
confidential, but Purchaser may share such information with its partners,
officers, employees, existing and potential financing and equity sources, and
agents and representatives (including, without limitation, counsel, accountants,
experts, consultants and financial advisors). If Purchaser terminates this
Agreement for any reason whatsoever, then Purchaser shall deliver to Seller all
reports, studies, data, and other information acquired by Purchaser or its
representatives from Seller or its representatives
in connection with inspections of the Property. Purchaser's obligations under
this Section 5 shall survive the termination of this Agreement. Purchaser may
not conduct intrusive tests on the Property without the prior written consent of
Seller, which Seller may withhold or grant in its sole discretion.
(b) In the event that Purchaser shall determine, in its sole
judgment, that the inspection is not satisfactory, then in that event (and not
later than the end of the Review Period), Purchaser may terminate this
Agreement, by delivering to Seller a notice of termination. If Purchaser does
not, in its sole and absolute discretion, elect to terminate this Agreement,
then Purchaser shall be deemed to have elected to waive forever its right to
terminate this Agreement under this Section 5.
(c) On or prior to the last day of the Review Period Purchaser
shall notify Seller in writing of those Property Agreements it will elect to
assume, and those which it will not assume. If Purchaser fails to give such
notice, then it shall be deemed that Purchaser has elected to assume all of the
Property Agreements. If the Seller elects not to terminate all of those Property
Agreements which the Purchaser has elected not to assume, Purchaser may
terminate this Agreement.
(d) Notwithstanding the forgoing, as partial consideration for
Seller's sale, conveyance and assignment of the Property to Purchaser, at the
Closing Purchaser agrees to assume the Easement Agreement and the Operating
Agreement of Sewage Disposal Facilities for the construction, operation and
maintenance of mutual sewage treatment facility and disposal plant each dated
October 14, 1968, and identified as items 2 and 3 on Exhibit A-1 hereto (the
"Sewer Agreements"). Upon Closing, Purchaser agrees to continue to perform, pay
and fulfill Seller's obligations under the Sewer Agreements as Seller is
currently performing, paying and fulfilling (all of which shall be disclosed to
Purchaser during or prior to the Review Period).
(e) Seller is the borrower of the Existing Debt shown in
Section 2 (b) (i) and (ii), which Existing Debt is secured by, inter-alia,
mortgage liens on the Property. As provided in Section 2 herein and, provided
that no default exists under the Existing Debt as of the Closing, Seller and
Purchaser have agreed that a portion of the Purchase Price in the amount of the
principal amount of the Exiting Debt on the Closing Date shall be paid by
Purchaser assuming the Existing Debt. Any and all escrowed or similar funds held
by the holder of the Existing Debt shall either be i) returned to Seller by the
holder of the Existing Debt or ii) added to the Purchase Price if such escrows
continue to be required by the holder of the Existing Debt.
(f) Within two (2) days after the execution of this Agreement,
Seller and Purchaser shall request the approval of the holder of the Existing
Debt to the assumption of the Existing Debt by Purchaser.
(g) The Seller and Purchaser shall act diligently and in good
faith to secure the approval of the holder of the Existing Debt of Purchaser's
assumption of the Existing Debt. The terms of any documents evidencing such
approval ("Assumption Documents") must be under terms acceptable to Seller,
Purchaser and Lender but in any event must contain the following condition:
(h) Upon execution and delivery of the Assumption Documents
neither Seller nor any guarantor of all or any portion of the Existing Debt,
under a contingent guaranty or otherwise, shall have any further obligation for
the payment of the Existing Debt or the guaranty of any obligations thereunder
or under any guaranty related thereto. Notwithstanding the foregoing, Seller
agrees to accept the standard Xxxxxx Xxx assumption agreement.
Section 6. Title.
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(a) As between Seller and Purchaser, Purchaser agrees to
accept the title commitment obtained by Seller (the "Title Commitment") dated
April 3, 2001 issued by First American Title Insurance Company (the "Title
Company") setting forth the status of the title of the Land and Improvements and
Purchaser agrees to accept the updated survey obtained by Seller, (the "Survey")
dated April 19, 2001, prepared by Xxxxx Xxxx Xxxxxxxxxx, Land Surveyor, a
surveyor registered with and licensed by the State of New York. Said Survey
conforms to the current standards of the American Congress of Land Surveyors. If
any matter objected to is unsupported by such Survey conforming to such
standards, then such matter shall be deemed irrelevant to the willingness of the
parties to proceed. Purchaser hereby agrees to reimburse Seller the cost the
preparation of said Survey and Title Commitment.
(b) Purchaser may, at any time prior to the expiration of the
Review Period (the "Title Review Period"), object in writing to any liens,
encumbrances, and other matters reflected by the Title Commitment or Survey. All
such matters to which Purchaser so objects shall be "Non-Permitted
Encumbrances"; if no such objection notice is given during the Review Period,
except as otherwise provided below, all matters reflected by the Survey and
Title Commitment shall be "Permitted Encumbrances". If, prior to Closing,
Purchaser receives notice of additional liens, encumbrances or other matters not
reflected in the initial Title Commitment or Survey, then Purchaser may submit a
revised list adding additional Non-Permitted Encumbrances. Nor shall Purchaser
have the right to object to the mortgages and related instruments pertaining to
Security for the Existing Debt (collectively, "Existing Debt Security
Instruments")
(c ) Seller may, but shall not be obligated to, at its cost,
cure, remove or insure around all Non-Permitted Encumbrances and give Purchaser
written notice thereof within ten days after the Title Review Period expires;
provided, however, Seller at its cost shall be obligated to cure, or otherwise
remove by Closing all mortgages, deeds of trust, judgment liens, mechanic's and
materialmen's liens, and other liens and encumbrances created by, under or
through Seller against the Property (other than liens for taxes and assessments
which are not delinquent) which either secure indebtedness or can be removed by
payment of a liquidated sum of money ("Monetary Liens"), except that Seller
shall have no obligation to cure, remove or insure around the Existing Debt
Security Instruments.. In no event, however, shall Seller be obliged to expend
more than $50,000 to remove all Monetary Liens other than all mortgages and
deeds of trust, (excluding , as aforesaid, the Existing Debt Security
Instruments), judgment liens and mechanic's and materialmen's liens which Seller
shall be obligated to remove regardless of the amount secured thereby. If Seller
does not timely cause all of the Non-Permitted Encumbrances to be removed or
cured, if applicable, then Purchaser may, as its sole and exclusive remedy,
either (a) terminate this Agreement by delivering notice to Seller or (b)
purchase the Property subject to the Non-Permitted Encumbrances (other than
Monetary Liens which Seller shall be obligated to cure) and such Non-Permitted
Encumbrances (other than Monetary Liens which Seller shall be obligated to cure)
shall thereafter be Permitted Encumbrances and with respect to the Monetary
Liens, apply a portion of the Purchase Price to satisfy such Monetary Liens.
Section 7. Seller's Representations, Warranties, and Covenants.
Seller hereby represents and warrants to, and covenants with, Purchaser that:
(a) Tenant Rent Roll. To the best of Seller's knowledge and
belief the Tenant rent roll dated as of ________, 2001 (the "Tenant Rent Roll")
is true and correct in all material respects and accurately represents the
subject matter thereof as the date thereof, and there are no other Leases
affecting the Property other than those Leases set forth on the Tenant Rent
Roll.
(b) Tenant Leases. To the best of Seller's knowledge and
belief with respect to each Tenant except as otherwise set forth on the Tenant
Rent Roll: (1) such Tenant's Lease is in full force and effect and no uncured
breach or default exists on the part of the Seller or Tenant thereunder; (2) no
rent called for under such Tenant's Lease has been paid more than 30 days in
advance of its due date; (3) such Tenant has not asserted any claim of offset or
other defense in respect of its or the landlord's obligations under its Lease;
and (4) such Tenant is not entitled to any concession, rebate, allowance, or
period of occupancy free of rent under its Lease or any other agreement with
Seller.
(c) Actions. To the best of Seller's knowledge and belief
there are no actions, suits, claims, assessments, or proceedings pending or
threatened, that could materially adversely affect the ownership, operation, or
maintenance of the Property or Seller's ability to perform hereunder.
(d) Property Agreements. Attached hereto as Exhibit C is a
complete and correct list of all Property Agreements . All of the Property
Agreements may be canceled on thirty (30) days' notice without premium or
penalty unless otherwise specified on Exhibit C.
(e) Environmental Matters. Seller has not and will not (at any
time prior to Closing) and Seller has not authorized and will not authorize (at
any time prior to Closing) any agent, employee, contractor, tenant or third
party to use, generate, treat, store, dispose of, or otherwise introduce, any
Hazardous Substances into or on the Property except as permitted by applicable
law. Seller has received no written notice of any unlawful presence,
accumulation or storage of any Hazardous Substances in, on, under or affecting
the Property or of the presence or suspected presence of any underground storage
tanks on the Property, nor does Seller have any knowledge of the same. As used
in this paragraph, the term "Hazardous Substances" shall mean and include any
toxic and/or hazardous substances and defined in Section 101(14) of the
Comprehensive Environmental Response, Compensation and Liability Act, as amended
, 42 U.S.C. Section 9601 (14)(1990) in effect as of the date of this Agreement.
Seller has no knowledge of any adverse environmental effect on the Property
except as noted in the Phase I Environmental Site Assessment Report prepared by
Comprehensive Environmental Assessments dated February 27, 1996, the Lead-Based
Paint Inspection Report prepared by Comprehensive Environmental Assessments
dated February 14, 2000 and the Phase I Environmental Site Assessment Report
prepared by Comprehensive Environmental Assessments dated March 22, 2001.
(f) Notices. Seller has not received any written notices from
governmental agencies stating that the Property has been constructed and is
being occupied, maintained, and operated in violation of any applicable law or
regulation; or with respect to any violations of building codes and/or zoning
ordinances or other governmental laws, regulations or orders with respect to the
Property, pending or threatened condemnation proceedings with respect to the
Property, or any proceedings which could or would cause the change, redefinition
or other modification of the zoning classification applicable to the Property or
any part hereof.
(g) Rights to the Property, Rights of First Refusal.
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(1) Other than the conduct of rental housing
business in the ordinary course, Seller has
not committed nor obligated itself in any
manner whatsoever to sell, lease or encumber
the Property or any interest therein to any
party.
(2) No rights of first refusal regarding the
Property exist under the organizational
documents of Seller or under any agreement
by which Seller may be bound or affected
which have not been waived.
(h) Liens. Seller agrees to keep the Property free from
mechanics' and materialmen's liens or other new monetary liens through the date
of Closing, other than Permitted Encumbrances.
(i) Unrecorded or Equitable Interests. To the best of
Seller's knowledge and belief there are no unrecorded or undisclosed legal or
equitable interests in the Property owned or claimed by any party other
than Seller.
(j) Collective Bargaining Agreements and Benefit Plans.
No collective bargaining agreements between Seller and any labor organization
apply to the operation and/or management of the Property.
(k) Approvals with Respect to Transaction. To the best of
Seller's knowledge, there are no consents, approvals and authorizations from any
person, required entity or governmental authority which are required in order
for Seller to consummate transactions contemplated herein.
(l) Bankruptcy, Etc. No bankruptcy, insolvency,
rearrangement or similar action involving the Property, whether voluntary or
involuntary, is pending or threatened, and Seller has never:
(1) filed a voluntary petition in bankruptcy;
(2) been adjudicated a bankrupt or insolvent or
filed a petition or action seeking any
reorganization, arrangement,
recapitalization, readjustment, liquidation,
dissolution or similar relief under any
Federal bankruptcy act or any other laws;
(3) sought or acquiesced in the appointment of
any trustee, receiver or liquidator
of all or any substantial part of its or his
properties or the Property; or
(4) made an assignment for the benefit of
creditors or admitted in writing its or his
inability to pay its or his debts generally
as the same become due.
Seller is not anticipating or contemplating any of the actions
set forth in (1) through (4) of this subsection.
(m) Litigation. Except as disclosed on Exhibit D, there are no
pending or, to Seller's current actual knowledge, threatened, judicial,
municipal or administrative proceedings with respect to, or in any material and
adverse manner affecting the Property or in which Seller is or will be a party
by reason of Seller's ownership of the Property or any portion thereof,
including without limitation, proceedings for or involving tenant evictions
(other than those which have been disclosed to Purchaser in writing),
collections (other than those which have been disclosed to Purchaser in
writing), condemnations, eminent domain, alleged building code, zoning or
environmental violations, or personal injuries or property damage alleged to
have occurred on the Property or by reason of the construction of any
improvements thereon or the use and operation of the Property or any present
plan or study by any governmental authority, agency or employee thereof which in
any way materially challenges, affects or would challenge or affect the
continued authorization of the ownership, construction, use and operation of the
Property.
(n) Good Standing. Seller is a limited partnership duly
organized, validly existing and in good standing in the state of its
organization and duly qualified to do business and in good standing in the state
where the Property is located with the power to hold and convey the Property.
(o) Due Authority. Seller has all requisite power and
authority to execute and deliver this Agreement and to carry out its obligations
hereunder and the transactions contemplated hereby. This Agreement has been, and
the documents contemplated hereby will be, duly executed and delivered by Seller
and constitute the Seller's legal, valid and binding obligations enforceable
against Seller in accordance with its terms. The consummation by Seller of the
sale of the Property is not in violation of or in conflict with nor does it
constitute a default under any term or provision of the organizational documents
of Seller, or any of the terms of any agreement or instrument to which Seller is
or may be bound, or of any provision of any applicable law, ordinance, rule or
regulation of any governmental authority or of any provision of any applicable
order, judgment or decree of any court, arbitrator or governmental authority.
(p) When used herein, the terms "to Seller's current actual
knowledge" "knowledge", "to the best of Seller's knowledge and belief" or
derivations thereof shall mean the current actual knowledge of Xxxxxxx X.
Xxxxxxx, Senior Vice President and Director of Portfolio Management of General
Investment & Development Co. and Xxxx Xxxxx Xxxxx, Manager. If (1) any of
Seller's representations and warranties set forth in this Section 7 are untrue
in any material respect, or (2) at any time at or before Closing there is any
material change with respect to the matters represented and warranted by Seller
pursuant to this Section 7, then Seller shall give Purchaser prompt written
notice thereof, and Purchaser may terminate this Agreement by delivering written
notice to Seller at any time at or before the Closing. All of Seller's
representations and warranties shall survive the Closing; however, Purchaser may
not maintain an action for breach of such representations and warranties unless
it shall have commenced suit against Seller not later than a date which is six
months from the Closing Date. Such period from the Closing Date to a date six
months thereafter shall be hereinafter the "Survival Period."
(q) Purchaser acknowledges that Purchaser will have the
opportunity to independently and personally inspect the Property and that
Purchaser has entered into this Agreement based upon its ability to make such
examination and inspection.
EXCEPT FOR THE REPRESENTATIONS OF SELLER EXPRESSLY SET FORTH IN SECTION
7 OF THIS AGREEMENT, PURCHASER WARRANTS AND ACKNOWLEDGES TO AND AGREES WITH
SELLER THAT PURCHASER IS PURCHASING THE PROPERTY IN ITS "AS-IS, WHERE IS"
CONDITION "WITH ALL FAULTS" AND DEFECTS AS OF THE CLOSING DATE AND SPECIFICALLY
AND EXPRESSLY WITHOUT ANY WARRANTIES, REPRESENTATIONS OR GUARANTEES, EITHER
EXPRESS OR IMPLIED, AS TO ITS CONDITION, FITNESS FOR ANY PARTICULAR PURPOSE,
MERCHANTABILITY, OR ANY OTHER WARRANTY OF ANY KIND, NATURE, OR TYPE WHATSOEVER
FROM OR ON BEHALF OF SELLER. EXCEPT FOR THE REPRESENTATIONS OF SELLER EXPRESSLY
SET FORTH IN SECTION 7 OF THIS AGREEMENT, SELLER SPECIFICALLY DISCLAIMS ANY
WARRANTY, GUARANTY OR REPRESENTATION, ORAL OR WRITTEN, PAST OR PRESENT, EXPRESS
OR IMPLIED, CONCERNING (A) THE VALUE, NATURE, QUALITY OR CONDITION OF THE
PROPERTY, INCLUDING, WITHOUT LIMITATION, THE WATER, STRUCTURAL INTEGRITY, SOIL
AND GEOLOGY; (B) THE INCOME TO BE DERIVED FROM THE PROPERTY; (C) THE SUITABILITY
OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH PURCHASER MAY CONDUCT
THEREON, INCLUDING THE POSSIBILITIES FOR FUTURE DEVELOPMENT OF THE PROPERTY; (D)
THE COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION WITH ANY LAWS, RULES,
ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY OR BODY; (E)
THE HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OF THE PROPERTY; (F) THE MANNER OR QUALITY OF THE
CONSTRUCTION OR MATERIALS, IF ANY, INCORPORATED INTO THE PROPERTY; (G) THE
MANNER, QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF THE PROPERTY; (H) THE
PRESENCE OR ABSENCE OF HAZARDOUS SUBSTANCES AT, ON, UNDER, OR ADJACENT TO THE
PROPERTY OR ANY OTHER ENVIRONMENTAL MATTER OR CONDITION OF THE PROPERTY; OR (I)
ANY OTHER MATTER WITH RESPECT TO THE PROPERTY. PURCHASER ACKNOWLEDGES AND AGREES
THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF SELLER CONTAINED IN
SECTION 7 OF THIS AGREEMENT, ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLER
WITH RESPECT TO THE PROPERTY WAS OBTAINED FROM A VARIETY OF SOURCES AND THAT
SELLER HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH
INFORMATION AND MAKES NO REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS OF
SUCH INFORMATION. SELLER IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY ORAL OR
WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY,
OR THE OPERATION THEREOF, FURNISHED BY ANY REAL ESTATE BROKER, AGENT, EMPLOYEE,
SERVANT OR OTHER PERSON EXCEPT FOR THE EXPRESS REPRESENTATIONS SET FORTH IN
SECTION 7 OF THIS AGREEMENT. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT
PURCHASER IS A SOPHISTICATED AND EXPERIENCED PURCHASER OF PROPERTIES SUCH AS THE
PROPERTY AND HAS BEEN DULY REPRESENTED BY COUNSEL IN CONNECTION WITH THE
NEGOTIATION OF THIS AGREEMENT. EXCEPT AS MAY OTHERWISE BE PROVIDED HEREIN,
SELLER HAS MADE NO AGREEMENT TO ALTER, REPAIR OR IMPROVE ANY OF THE PROPERTY.
Seller agrees that Purchaser has the right to inspect the Property and
to investigate, test and review the information provided in accordance with this
Agreement. Notwithstanding anything to the contrary herein, the effect of the
representations and warranties made in this Agreement shall not be diminished or
deemed to be waived by any such inspections, tests or investigations made by
Purchaser or its agents except to the extent Purchaser has actual knowledge of a
breach of representation and warranty of Seller as a result of said inspections,
tests or investigations and discloses same to Seller prior to Closing.
Nothing in this Agreement shall require Seller to incur any expense of
any kind whatsoever to repair, restore or otherwise cure any condition or state
of facts with respect to the Property which Purchaser discovers during the
Review Period.
Seller shall have no obligation under this Agreement to cure any
violation of laws, ordinance, regulation and orders relating to the Property,
including, without limitation, those relating to zoning, building design,
environmental protection, hazardous substances, occupational safety and health
and architectural access discovered by Purchaser during the Review Period.
Section 8. Purchaser's Representations, Warranties and
Covenants. As a material inducement to Seller to execute this Agreement and
consummate this transaction, Purchaser represents and warrants to Seller that:
(a) Organization and Authority. Purchaser has been duly
organized and is validly existing as a limited partnership in good standing in
the State of New York. Purchaser has the full right and authority and has
obtained any and all consents required to enter into this Agreement and to
consummate or cause to be consummated the transactions contemplated hereby. This
Agreement has been, and all of the documents to be delivered by Purchaser at the
Closing will be, authorized and properly executed and constitutes, or will
constitute, as appropriate, the valid and binding obligation of Purchaser,
enforceable in accordance with their terms.
(b) Conflicts and Pending Action. There is no agreement to
which Purchaser is a party or to Purchaser's knowledge binding on Purchaser
which is in conflict with this Agreement. There is no action or proceeding
pending or, to Purchaser's knowledge, threatened against Purchaser which
challenges or impairs Purchaser's ability to execute or perform its obligations
under this Agreement.
Section 9. Closing. The consummation of the transaction contemplated
herein ("Closing") shall occur on June 15, 2001 (the "Closing Date") at 10:00
a.m. at the offices of the Escrow Agent or at such other time and place as
agreed to by the parties. Notwithstanding the foregoing Seller shall have the
right to extend the closing date to a business day which is no later than August
1, 2001 provided Seller gives written notice to Purchaser of Seller's election
to so extend and the extended Closing Date and provided further, Seller gives
such written notice to Purchaser no later than five (5) business days prior to
the date set forth in the preceding sentence as the Closing Date. Closing shall
occur through an escrow with the Escrow Agent. Funds shall be deposited into and
held by Escrow Agent in a closing escrow account with a bank satisfactory to
Purchaser and Seller. Upon satisfaction or completion of all closing conditions
and deliveries, the parties shall direct the Escrow Agent to immediately record
and deliver the closing documents to the appropriate parties and make
disbursements according to the closing statements executed by Seller and
Purchaser. The Escrow Agent shall agree in writing with Purchaser that (1)
recordation of the Deed constitutes its representation that it is holding the
closing documents, closing funds and closing statements and is prepared and
irrevocably committed to disburse the closing funds in accordance with the
closing statement and (2) release of funds to the Seller shall irrevocably
commit it to issue the Title Policy in accordance with this Agreement. Provided
such supplemental escrow instructions are not in conflict with this Agreement as
it may be amended in writing from time to time, Seller and Purchaser agree to
execute such supplemental escrow instructions as may be appropriate to enable
Escrow Agent to comply with the terms of this Agreement. Escrow Agent's escrow
fee, if any, charged for conducting the Closing shall be shared equally by
Seller and Purchaser.
At the Closing the following, which are mutually concurrent conditions,
shall occur:
(a) At least one (1) business day prior to the Closing Date or on the
Closing Date in the case of subsection (1) below, Purchaser, at its expense,
shall deliver or cause to be delivered in escrow to the Escrow Agent the
following:
(1) Funds available for immediate value to the Escrow
Agent, in the amount of the Cash Balance of the
Purchase Price as specified in Section 2(a), adjusted
in accordance with this Section 9;
(2) Assumption of Existing Debt in a form to be agreed
upon by Seller and Purchaser during
the Review Period;
(3) Evidence satisfactory to Seller and Title Company
that the person executing the Closing documents on
behalf of Purchaser has full right, power, and
authority to do so;
(4) Executed counterparts, as applicable, of the
documents listed in 9(b) below; and
(5) Any additional documents that Seller, Escrow Agent,
or Title Company may reasonably require for the
proper consummation of the transaction contemplated
by this Agreement.
(b) At least one (1) business day prior to the Closing Date Seller, at
its expense, shall deliver or cause to be delivered in escrow to the Escrow
Agent:
(1) Bargain and Sale Deed in the form of Exhibit E, fully
executed and acknowledged by Seller, conveying to
Purchaser the Land and Improvements, subject only to
the Permitted Encumbrances;
(2) Xxxx of Sale in the form of Exhibit F;
---------
(3) Assignment and Assumption in the form of Exhibit G,
fully executed and acknowledged by Seller, assigning,
conveying, and transferring all of Seller's right,
title and interest in and to the Property other than
the Land and Improvements, to Purchaser, subject only
to the Permitted Encumbrances;
(4) Affidavits and indemnities required by the Title
Company, including, without limitation, mechanics'
liens, parties in possession and gap affidavits, if
available in New York;
(5) Evidence satisfactory to Purchaser and the Title
Company that the persons executing and delivering the
Closing documents on behalf of Seller have full
right, power and authority to do so;
(6) Certificate executed by Seller stating that, as of
the Closing Date, each of Seller's representations
and warranties set forth in Section 7 is true and
correct in all material respects;
(7) Certificate in the form of Exhibit H meeting the
requirements of Section 1445 of the
Internal Revenue Code of 1986, executed and sworn to
be Seller;
(8) Current Tenant Rent Roll, certified by Tenant to be
true, correct and complete, dated no earlier than 10
days prior to the Closing Date;
(9) Originals of all Leases, including all amendments
thereto and all consents or waivers with respect
thereto that modify or supplement the provisions
thereof in any respect, and all Property Agreements
(the foregoing may be constructively delivered to the
Purchaser by delivery of possession of the Land to
Purchaser);
(10) A Notice to the Tenants advising them of the sale of
the Property in the form attached
hereto as Exhibit H-1;
(11) A termination letter from the current property
manager effective the date of Closing;
(12) Such other instruments as are reasonably requested by
Purchaser, to effectuate the conveyance of property
similar to the Property, with the effect that, after
the Closing, Purchaser will have succeeded to all of
the rights, titles, and interests of Seller related
to the Property and Seller will no longer have any
rights, titles, or interests in and to the Property,
except as expressly provided herein;
(13) Indemnity Escrow Agreement in the form of Exhibit I
and the cash deposit; and
(14) Termination letters with respect to service contracts
that are not being assumed by the
Purchaser.
(c) Seller shall pay all transfer, or similar taxes and fees imposed in
connection with this transaction under applicable state or local law.
(d) Seller shall pay all fees for releasing liens and encumbrances.
Purchaser shall pay any and all assumption fees or similar fees in connection
with Purchaser's assumption of the Existing Debt. Purchaser shall pay all
mortgage recording taxes(if any) in connection with the recordation of the
assumption agreement in connection with Purchaser's assumption of the Existing
Debt as herein contemplated (subject to a limit based upon the outstanding
principal balance of the existing debt on the closing date). Purchaser shall pay
the fee for recording the Deed. Purchaser and Seller shall respectively pay such
other costs in connection with the Closing as is customary in the State of New
York.
(e) The following shall be apportioned between Seller and Purchaser as
of 12:00 midnight on the Closing Date (the "Proration Date"). Any apportionments
and prorations which are not expressly provided for in this subsection shall be
made in accordance with the customary practice in the State of New York. Seller
and Purchaser shall prepare a schedule of adjustments (a "Closing Statement")
before the Proration Date. Any net adjustment in favor of Purchaser shall be
credited against the Purchase Price at Closing. Any net adjustment in favor of
Seller shall be paid in cash at the Closing by Purchaser. A copy of a Closing
Statement agreed upon by Seller and Purchaser shall be executed by Seller and
Purchaser and delivered to the Escrow Agent at the Closing.
(1) Collected Rent. All collected rent and
other collected income (and any
applicable state or local tax on rent) under
Leases in effect on the Closing
Date but excluding non-refundable fees.
Seller shall be charged with any rent
collected by Seller before Closing but
applicable to any period of time after
Closing. Uncollected rent and other income
shall not be prorated.
(2) Uncollected Rent. All rentals received after
the Proration Date shall be
applied, first, to current and, then,
delinquent obligations, the latter of
which shall be paid to Seller; provided,
however, nothing herein shall operate
to require Purchaser to institute a lawsuit
to recover such amounts. Seller
shall not be charged for uncollected rent
for the month within which the
Proration Date shall occur, it being the
intent of the parties to prorate only
the rents that have been collected at such
date. Any delinquent rents for
periods prior to the Proration Date and a
prorated portion of rents for the
month uncollected as of the Proration Date
which are collected by Purchaser and
which are not necessary to bring a tenant
current as described above shall be
forwarded to Seller.
(3) Prepaid Rents, Fees and Security Deposits.
Prepaid rents and security and
other tenant deposits (including but not limited to pet deposits but not
including non-refundable pet or other fees and deposits paid to Seller by
Tenants), if any, under assigned leases shall be turned over to Purchaser by
Seller at Closing as part of its obligation to transfer the Property to
Purchaser (except to the extent that any such deposits have been applied to a
tenant obligation as permitted under a Tenant Lease). Purchaser shall assume
full liability therefore and indemnify and hold Seller harmless with respect to
all such deposits.
(4) Property Taxes. Property taxes shall be
apportioned on the basis of the fiscal period for which assessed. If the
Proration Date shall occur either before an assessment is made or a tax rate is
fixed for the tax period in which the Closing Date occurs, the apportionment of
such Property Taxes based thereon shall be made at the Proration Date by
applying the tax rate for the preceding year to the latest assessed valuation.
Purchaser shall provide to Seller written evidence of such assessment and/or tax
rate for the current year within ten (10)days of Purchaser's receipt of same.
The apportionment thereof shall be recalculated and Seller or Purchaser, as the
case may be, shall promptly make an appropriate payment to the other based on
such recalculation within said ten (10) day period.
(5) Service Contracts. Prepaid or unpaid
amounts under those Service Contracts which shall be assigned to assumed by
Purchaser at Closing shall be prorated.
(6) Utilities. Utilities, including water,
electric and gas, based upon the last
reading of meters prior to the Closing shall be pro-rated. Seller shall endeavor
to obtain meter readings on the day before the Closing Date, and if such
readings are obtained, there shall be no proration of such items. Seller shall
pay at Closing the bills therefor for the period to the Closing Date and
Purchaser shall pay the bills therefor for the period subsequent thereto. If any
utility company will not issue separate bills, Purchaser will receive a credit
against the Purchase Price against Seller's portion and will pay the entire xxxx
prior to delinquency after Closing. If Seller has paid any utilities no more
than 30 days in advance in the ordinary course of business, then Purchaser shall
be charged its portion of such payment at Closing
(7) All Other Operating Expenses. All operating
expenses shall be prorated between
Seller and Purchaser as of the Proration Date on an accrual basis, based on the
actual number of days in the month during which the Proration Date occurs.
Seller shall be responsible for all Operating Expenses attributable to the
period before the Proration Date and Purchaser shall be responsible for all
Operating Expenses attributable to the period on and after the Proration Date.
To that end, Seller shall be responsible for all interest on the Existing Debt
attributable to the period before the Proration Date and Purchaser shall be
responsible for all interest on the existing Debt attributable to the period on
and after the Proration Date.
(8) Final Bills.
In the event that final bills (including but not limited to real
estate tax bills) are not available or cannot be issued prior to the Closing
Date for any item being prorated under Section 9(e), then Purchaser and Seller
agree to allocate such items on a fair and equitable basis as soon as such bills
are available, final adjustment to be made as soon as reasonably possible after
the Closing Date. Payments in connection with final adjustment shall be due
within thirty (30) days of written notice. Seller shall have, at its sole cost
and expense, reasonable access to, and the right to inspect and audit,
Purchaser's books and records to confirm the final proration.
(9) Prior to the Closing Date.
Seller shall pay all costs and liabilities relating
to the Property that arise out of or are attributable to the period prior to the
Closing Date, and shall indemnify and hold harmless Purchaser from such costs
and liabilities and from all reasonable attorneys' fees expended by Purchaser in
connection therewith. Seller shall have the right to receive all proceeds
relating to the Property that are properly allocable to the period before the
Closing Date, and Purchaser shall have the right to receive all proceeds
relating to the Property that are properly allocable to the period from and
after the Closing Date. Purchaser shall pay all costs and liabilities relating
to the Property that arise out of or are attributable to the period from and
after the Closing Date, except such costs and liabilities that arise out of or
result from a breach by Seller of its representations and warranties set forth
in Section 7 and for which a claim is timely made under Section 7, and Purchaser
shall indemnify and hold harmless Seller from such costs and liabilities and
from all reasonable attorneys' fees expended by Seller in connection therewith.
This Section 9(e) shall survive the Closing.
(f) Upon completion of the Closing, Seller shall deliver to Purchaser
possession of the Property free and clear of all tenancies of every kind and
parties in possession, except for the Permitted Encumbrances and the Leases,
with all parts of the Property (including without limitation the Leases,
Improvements and Personalty) in the same condition as on the date hereof, normal
wear only excepted.
Section 10. Conditions Precedent to Purchaser's and Seller's
Performance.
(a) Purchaser's obligation under this Agreement to close the
transactions contemplated hereby shall be contingent upon satisfaction of the
following conditions precedent:
(1) Seller shall have delivered to Escrow Agent
the documents set forth in Section
9(b) at Closing;
(2) The representations and warranties of Seller
contained herein shall be true,
accurate and correct in all material
respects as of the Closing Date;
(3) Seller shall have performed all other
covenants, undertakings and obligations, and
complied with all conditions required by
this Agreement to be complied with by Seller
at or prior to the Closing, and
(4) The current holder of the Existing Debt
shall have permitted the assumption by
Purchaser of the Existing Debt and all
instruments necessary to effect such
assumption shall have been executed and
delivered to the Escrow Agent.
(b) Seller's obligations under this Agreement to close the
transactions contemplated hereby shall be contingent upon the following
conditions precedent:
(1) Purchaser shall have delivered the Purchase
Price as provided in Section
9(a)(1);
(2) Purchaser shall have delivered all the
documents required to effectuate Closing
as set forth in Section 9(a) at Closing;
(3) Purchaser shall have performed all of its
obligations under this Agreement; and
(4) The current holder of the Existing Debt
shall have permitted the assumption by
Purchaser of the Existing Debt and all
instruments necessary to effect such
assumption shall have been executed and
delivered to the Escrow Agent.
(c) Purchaser hereby acknowledges that it is the intent of
Seller to effect a deferred exchange under ss.1031 of the Code which will not
(i) delay the closing, (ii) cause any income or other tax consequences for the
Purchaser, or (iii) cause additional expense, cost or liability to the Purchaser
(provided that the Purchaser will accept nominal liability in the event that
Seller is unable, despite having expended reasonable efforts to do so, to make
arrangements with another intermediary to be involved in such exchange, and
further provided that Seller shall in such event indemnify Purchaser against any
ultimate liability arising out of such exchange), and Purchaser specifically
agrees that Seller shall have the right to effectuate such an exchange in
connection with the consummation of the sale and purchase transactions
contemplated hereby. The Seller's rights and obligations under this Agreement
may be assigned to an intermediary for the purpose of completing such an
exchange provided, however, that no such assignment shall relieve or in any
manner reduce Seller's liability or obligations under this Agreement. Purchaser
agrees to cooperate with the Seller and such intermediary in a manner necessary
to complete the exchange, except that under no circumstance will Purchaser be
required to take title to any real or personal property other than the Property
as part of this exchange. However, Seller's inability to consummate the
transactions contemplated by this Agreement as a deferred exchange under ss.1031
for any reason (other than Purchaser's refusal to cooperate in such exchange
transaction on the terms expressly set forth above) shall not relieve Seller of
its obligation to convey the Property to Purchaser in accordance with the other
terms of this Agreement.
(d) Seller hereby acknowledges that it is the intent of
Purchaser to effect a deferred exchange under ss.1031 of the Code which will not
(i) delay the closing, (ii) cause any income or other tax consequences for the
Seller, or (iii) cause additional expense, cost or liability to the Seller
(provided that the Seller will accept nominal liability in the event that
Purchaser is unable, despite having expended reasonable efforts to do so, to
make arrangements with another intermediary to be involved in such exchange, and
further provided that Purchaser shall in such event indemnify Seller against any
ultimate liability arising out of such exchange), and Seller specifically agrees
that Purchaser shall have the right to effectuate such an exchange in connection
with the consummation of the sale and purchase transactions contemplated hereby.
The Purchaser's rights and obligations under this Agreement may be assigned to
an intermediary for the purpose of completing such an exchange provided,
however, that no such assignment shall relieve or in any manner reduce
Purchaser's liability or obligations under this Agreement. Seller agrees to
cooperate with the Purchaser and such intermediary in a manner necessary to
complete the exchange. However, Purchaser's inability to consummate the
transactions contemplated by this Agreement as a deferred exchange under ss.1031
for any reason (other than Seller's refusal to cooperate in such exchange
transaction on the terms expressly set forth above) shall not relieve Purchaser
of its obligation to purchase the Property in accordance with the other terms of
this Agreement.
Section 11. Commissions. Seller and Purchaser represent and warrant
each to the other that they have not dealt with any real estate broker, sales
person or finder in connection with this transaction other than Xxxxxxx &
Xxxxxxxxx. Seller will pay the commission due Xxxxxxx & Wakefield. In the event
of any other claim for broker's or finder's fees or commissions in connection
with the negotiation, execution or consummation of this Agreement or the
transactions contemplated hereby, each party shall indemnify and hold harmless
the other party from and against any such claim, loss, cost, liability or
expense, including, but not limited to, attorneys fees.
Section 12. Additional Operating Covenants of Seller.
----------------------------------------
(a) Operation of the Property. Seller, at its expense, will
operate the Property until Closing in the normal course of business in
accordance with practices heretofore conducted by Seller with respect to the
Property. Until Closing, Seller shall continue the operation of the Property in
the normal and usual manner. As of the Closing, Seller will place vacant
apartment units at the Property, except such units that are vacated within five
(5) days of Closing, in "rent ready" condition per the normal timing, scheduling
and quality standards of Seller's property manager.
(b) Service Agreements. Without Purchaser's Consent, Seller
agrees not to enter into any Property Agreements prior to the Closing which
shall survive the Closing or are not terminable upon thirty (30) days' prior
written notice without penalty or termination charge.
(c) Insurance Policies. Seller shall, at its own expense, keep
and maintain in full force and effect through the Closing, a policy or policies
of all risk and general liability insurance covering the Property, from time to
time on the Property, against loss or damage by fire, vandalism, malicious
mischief, lightning, windstorm, water, accidents, contingent liability and other
insurable perils, and rent loss insurance in amounts not less than those in
force as of the date hereof. Any policy proceeds shall be used for the repair or
replacement of the Property damaged or destroyed.
(d) Change in Condition. From the end of the Review Period and
until Closing, Seller shall, to the best of its ability and to the extent of its
current actual knowledge, promptly notify Purchaser of any material and adverse
change in any condition with respect to the Property or of any event or
circumstance which makes any representation or warranty of Seller to Purchaser
under this Agreement untrue or misleading. If Seller provides notice to
Purchaser under this Section and Purchaser shall elect to proceed with the
Closing, Seller shall be relieved of any liability for a breach by Seller of any
of its representations, warranties or covenants under this Agreement.
Section 13. Destruction, Damage, or Taking Before Closing. If, before
Closing, all or any material part of the Land, Improvements or Personalty are
destroyed or damaged, or become subject to condemnation or eminent domain
proceedings, then Seller shall promptly notify Purchaser thereof. Purchaser may
elect to proceed with the Closing (subject to the other provisions of this
Agreement) by delivering notice thereof to Seller within ten (10) business days
of receipt of Seller's notice respecting the damage, destruction, or taking, but
Purchaser shall be entitled to all insurance proceeds or condemnation awards
payable as a result of such damage or taking and, to the extent the same may be
necessary or appropriate, Seller shall assign to Purchaser at Closing Seller's
rights to such proceeds or awards. If, within five business days of receipt of
Seller's notice respecting the damage, destruction, or taking, Purchaser
notifies Seller of its intent to terminate this Agreement, or if Purchaser gives
no notice within such period, then Purchaser shall be deemed to have terminated
this Agreement pursuant to Section 13. For the purposes of this Section 13, a
damage or a taking shall be considered to be "material" if either (1) Existing
Lender does not permit the proceeds thereof or award thereon to be used to
restore the Property or (2) the value of the portion of the Land, Improvements,
or Personalty damaged or taken exceed $500,000 in value, or, in the case of a
taking, if the portion of the Land, Improvements, or Personalty taken are such
that (i) they materially adversely affect the ability to use the remainder for
the purposes for which they are presently used, (ii) access to the parking lot
of the building is materially impaired, (iii) more than 10% of the parking spots
are taken or (iv) the entrance to the Property is materially and adversely
affected.
Section 14. Termination and Remedies.
------------------------
(a) If Purchaser fails to consummate the purchase of the
Property pursuant to this Agreement for any reason other than termination hereof
pursuant to a right granted to Purchaser in Sections 5, 6, 7 or 13, then Seller,
as its sole remedy, may terminate this Agreement by notifying Purchaser thereof,
in which event Escrow Agent shall deliver the Deposit to Seller as liquidated
damages, whereupon neither Purchaser nor Seller shall have any further rights or
obligations hereunder, except for those which survive the termination of this
Agreement. In addition to the foregoing, Seller shall also be entitled to
recover all expenses, including reasonable attorney's fees and litigation costs,
incurred in connection with recovering the Deposit following a breach hereof by
Purchaser.
(b) If Purchaser terminates this Agreement pursuant to
Sections 5, 6, 7 or 13, then Escrow Agent shall return the Deposit to Purchaser,
whereupon neither party hereto shall have any further rights or obligations
hereunder, except for those which survive the termination of this Agreement.
(c) If Seller fails to consummate the sale of the Property
pursuant to this Agreement for any reason other than Purchaser's failure to
perform its obligations hereunder in all material respects or termination hereof
by Purchaser in accordance with Section 14(a), then Purchaser may, as its
exclusive remedies therefor: (1) terminate this Agreement by notifying Seller
thereof, in which case Escrow Agent shall deliver the Deposit to Purchaser, and
in addition, Purchaser shall also be entitled to recover all expenses, including
reasonable attorney's fees and litigation costs, incurred in connection with
recovering the Deposit following a failure to consummate the transaction hereof
by Seller and neither party hereto shall have any further rights or obligations
hereunder, except for those which survive the termination of this Agreement, or
(2) seek specific performance of the obligations of Seller hereunder, and all
expenses, including reasonable attorneys' fees and litigation costs, incurred in
enforcing its rights and remedies hereunder.
(d) The provision for payment of liquidated damages in Section
14(a) has been included because, in the event of a breach by Purchaser, the
actual damages to be incurred by Seller can reasonably be expected to
approximate the amount of liquidated damages called for herein and because the
actual amount of such damages would be difficult if not impossible to measure
accurately.
Section 15. Notices. All notices provided or permitted to be given
under this Agreement must be in writing and may be served by depositing same in
the United States mail, addressed to the party to be notified, postage prepaid
and registered or certified with return receipt requested; by delivering the
same to such party by recognized delivery service; by nationally recognized
overnight delivery service or by facsimile copy transmission with a copy sent by
prepaid nationally recognized overnight delivery service. Notice given in
accordance herewith shall be effective upon delivery to the address of the
addressee. For purposes of notice, the addresses of the parties shall be as
follows:
If to Seller, to: Windsor at Hauppauge Limited Partnership
X/X Xxxxxxx Xxxxxxxxxx & Xxxxxxxxxxx Xx.
Xxxxx 0000
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx, Senior Vice
President
With a copy to: Xxxxxx X. Xxxxxxx
Executive Vice President and General Counsel
General Investment & Development Co.
Suite 2000
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
and
==============================
If to Purchaser, to:
Home Properties of New York, L.P.
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxx, Chairman
with a copy to:
Xxxxxxxx X. Xxxxx, Esq.
At Purchaser's address above
Either party hereto may change its address for notice by giving three
days prior written notice thereof to the other party. Notices may be given by
the above named counsel to a party.
Section 16. Assigns, Beneficiaries. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
legal representatives, successors and assigns. Except as herein otherwise
provided, this Agreement is for the sole benefit of Seller and Purchaser, and no
third party is intended to be a beneficiary of this Agreement. Notwithstanding
the foregoing, Purchaser may assign its rights hereunder to any entity which is
an affiliate of Purchaser or to an exchange agent as provided in Section 10(d)
above . Such assignment shall not relieve Purchaser of its obligations under
this Agreement. In addition, the Purchaser expressly acknowledges and agrees
that Seller may transfer, convey and/or donate all or an undivided interest in
the Property (either directly or indirectly, for example, by transfer of all or
a portion of the partnership interests in Seller) provided that (i) such
successor, transferee and/or donee expressly assumes to be bound by and to
observe all liabilities and obligations of Seller hereunder, (ii) Seller
continues to be bound, jointly and severally with such successor, transferee
and/or donee, for all representations, warranties and covenants of Seller
hereunder, (iii) such transfer, conveyance and/or donation will not delay the
Closing hereunder and (iv) such transfer, conveyance and/or donation will not
cause additional expense, cost or liability to the Purchaser. Purchaser agrees
to cooperate with the Seller and any such successor, transferee and/or donee,
including, without limitation, to divide the Cash Balance of the Purchase Price
in accordance with the directions of the Seller and such successor, transferee
and/or donee. Purchaser acknowledges that between the date of this Agreement and
the Closing Date all or some of the partners of Seller may transfer, convey
and/or donate a portion of the partnership interests in Seller to a nonprofit
entity and, if so, then the obligations of Seller hereunder shall be subject to
the additional condition precedent that such nonprofit entity consents to
consummation of the transactions contemplated by this Agreement.
Section 17. Governing Law. This Agreement shall be governed
and construed in accordance with the laws of the State of New York.
Section 18. Entire Agreement. This Agreement is the entire agreement
between Seller and Purchaser concerning the sale of the Property, and no
modification hereof or subsequent agreement relative to the subject matter
hereof shall be binding on either party unless reduced to writing and signed by
the party to be bound. All Exhibits attached hereto are incorporated herein by
this reference for all purposes.
Section 19. Rule of Construction; No Waiver. Purchaser and Seller
acknowledge that each party has reviewed this Agreement and that the 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 amendments hereto. No provision of this Agreement shall be deemed to have
been waived by either party unless the waiver is in writing and signed by that
party. No custom or practice which may evolve between the Purchaser and Seller
during the term of this Agreement shall be deemed or construed to waive or
lessen the right of either of the parties hereto to insist upon strict
compliance of the terms of this Agreement.
Section 20. Escrow Provisions.
-----------------
(a) Concurrently with delivery of the balance of the Purchase
Price due at Closing, the Deposit shall be refunded to Purchaser. The party
entitled to the Deposit shall be charged with all income on any earnings on the
Deposit and shall receive any such earnings. Purchaser represents and warrants
to Escrow Agent and Seller that its taxpayer identification number is correctly
set forth below its signature.
(b) If for any reason the Closing does not occur on or prior
to the Closing Date, or this Agreement is terminated, and either party makes a
written demand upon Escrow Agent for payment of the Deposit in accordance with
the terms of this Agreement, then Escrow Agent shall give written notice as
provided in this Agreement to the other party of such demand. If Escrow Agent
does not receive a written objection from the other party to the demand for the
Deposit within five (5) business days after the date when notice is deemed given
as provided in this Agreement, Escrow Agent is hereby authorized deliver the
Deposit in accordance with such demand. If Escrow Agent does receive such
written objection within such five (5) business day period, Escrow Agent shall
continue to hold the Deposit until otherwise directed by written instructions
from the parties to this Agreement or a final nonappealable judgment of a court
of competent jurisdiction. Escrow Agent shall have the right at any time to
deposit the Escrow Funds with the Clerk of Court of Suffolk County, New York,
and Escrow Agent shall give written notice of such deposit to Seller and
Purchaser.
(c) Escrow Agent shall not be or become liable in any way or
to any person for its refusal to comply with adverse claims and demands being
made for the Deposit. Escrow Agent shall not be responsible for any act or
failure to act on its part nor shall it have any liability under this Agreement
or in connection herewith except in the case of its own willful default or gross
negligence. This Agreement shall terminate and Escrow Agent shall be
automatically released from all obligation, responsibility and liability
hereunder upon Escrow Agent's delivery or deposit of the Deposit in accordance
with the provisions of this Agreement.
(d) It is expressly understood that Escrow Agent acts
hereunder as a stakeholder for the convenience and accommodation of the parties
hereto and as a depository only and is not responsible or liable in any manner
whatsoever for the sufficiency, correctness, genuineness or validity of any
instrument received by or deposited with it, or for the form of execution of
such instruments, or for the identity, authority or right of any person
executing or depositing the same, or for the terms and conditions of any
instrument pursuant to which Escrow Agent may act.
(e) The duties of Escrow Agent are purely ministerial. Escrow
Agent shall not have any duties or responsibilities except those set forth in
this Agreement and shall not incur any liability in acting upon any signature,
notice, request, waiver, consent, receipt or other paper or document believed by
Escrow Agent to be genuine, and Escrow Agent may assume that any person
purporting to give it any notice on behalf of any party in accordance with the
provisions hereof has been duly authorized to do so.
(f) Escrow Agent may act or refrain from acting in respect of
any matter referred to herein in full reliance upon and by and with the advice
of counsel which may be selected by it.
(g) Seller and Purchaser hereby jointly and severally agree to
indemnify and save Escrow Agent harmless from any and all loss, damage, claim,
liability, judgment and other cost and expense of every kind and nature which
may be incurred by Escrow Agent by reason of its acceptance of, and its
performance under, this Agreement (including, without limitation, reasonable
attorneys' fees, disbursements and court costs) except in the case of its own
willful default or gross negligence.
(h) Upon delivery of the Deposit in accordance with this
Agreement, Purchaser and Seller hereby release Escrow Agent from all obligation
and liability hereunder.
Section 21. Miscellaneous.
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(1) Time. Time is of the essence in the performance of
this Agreement.
(2) No Recording. Neither party will record this
Agreement or any memorandum thereof. Any attempt to do so will be void ab
initio and shall be a material breach of this Agreement by the recording party.
(3) Invalidity and Waiver. If any portion of this Agreement is
held invalid or inoperative, then so far as is reasonable and possible the
remainder of this Agreement shall be deemed valid and operative, and effect
shall be given to the intent manifested by the portion held invalid or
inoperative. The failure of either party to enforce against the other any term
or provision of this Agreement shall not be deemed to be a waiver of such
party's right to enforce against the other party the same or any other term or
provision in the future.
(4) Headings. The section headings of this Agreement
are for convenience only and in no way limit or enlarge the scope or meaning of
the language hereof.
(5) Attorneys' Fees. Should either party employ attorneys to
enforce the provisions hereof, the party against whom any final judgment is
entered agrees to pay the prevailing party all reasonable costs, charges and
expenses, including attorneys' fees, expended or incurred in connection
therewith.
(6) Calculation of Time Periods. Unless otherwise specified,
in computing any period of time described herein, 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 for national banks where the Property
is located or the states or cities in which the parties are 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 last day of any period of time shall be
deemed to end at 5:00 p.m. Eastern Standard Time.
(7) Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original
and all of such counterparts shall constitute one Agreement.
(8) Signage. Purchaser and Seller agree that:
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(1) Purchaser shall within sixty (60) days of the
Closing, and at its sole cost and expense, remove any signs or
other symbols (herein collectively referred to as the "Signs")
located on or about the Property and/or the Improvements and
which contain or refer to the name "Windsor" and that
subsequent to Closing Purchaser shall not use the name
"Windsor" in referring to, identifying or otherwise naming the
Property.
(2) In the event that Purchaser fails to remove the
Signs as required herein, Seller shall have the right and
Purchaser hereby grants Seller an irrevocable license, to
enter upon the Property, at reasonable times and in a
reasonable manner in order to remove the Signs, at the cost
and expense of the Purchaser.
Section 22. Audit. Upon the request of Purchaser, the Seller will
provide, or cause to be provided, a signed representation letter in favor of
PricewaterhouseCoopers. The terms of the representation letter shall be mutually
acceptable to Seller, Purchaser and PricewaterhouseCoopers. The Purchaser and
Seller shall endeavor during the Review Period, in good faith, to agree upon the
terms of the representation letter. Whether or not Seller, Purchaser and
PricewaterhouseCoopers reach agreement with respect to the terms of the
representation letter, the Seller will provide access to PricewaterhouseCoopers,
to all financial and other information relating to the Property as is reasonably
sufficient to enable it to prepare audited financial statements, at Purchaser'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. Seller's
obligation to provide such access to PricewaterhouseCoopers shall expire on the
first anniversary of the Closing Date.
IN WITNESS WHEREOF, that parties hereto have duly executed this
Agreement as of the date first set forth above.
SELLER:
WINDSOR AT HAUPPAUGE LIMITED
PARTNERSHIP, a New York limited partnership
By: WINDSOR AT HAUPPAUGE, INC., a New York
corporation
By:
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Name:
-------------------------------------
Title:
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PURCHASER:
HOME PROPERTIES OF NEW YORK, L.P., a New York
limited partnership
By: Home Properties of New York, Inc., a Maryland
corporation, its general partner
By: ______________________________
Its: _______________________________
Tax Identification Number: 00-0000000
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ESCROW AGENT:
First American title Insurance Company
By:
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Name:
---------------------------------
Title:
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Schedule of Exhibits
A - Description of Land
A-1 - Permitted Exceptions
B - Excluded Personalty
C - List of Property Agreements
D - Litigation
E - Form of Bargain and Sale Deed
F - Form of Xxxx of Sale
G - Form of Assignment and Assumption
H - Form of FIRPTA Certificate
H-1 - Form of Notice to Tenants
I - Form of Indemnity Escrow Agreement
J - Due Diligence Documents
