Exhibit 2.2
SECOND AMENDMENT TO
REAL ESTATE PURCHASE AGREEMENT
THIS SECOND AMENDMENT TO REAL ESTATE PURCHASE
AGREEMENT (this "Amendment") is made as of this 18th day
of November, 1996, by and between Xxxxxx Xxxx, not
personally, but solely as Trustee under Trust Agreement
#6150-B dated July 3, 1978 ("Seller"), and Valley Park
South Partnership, a New York general partnership
("Purchaser"), as assignee of Home Properties of New
York, L.P., a New York limited partnership ("Home
Properties"). All initially capitalized terms used
herein which are not otherwise defined herein shall have
the meanings ascribed to them in the Purchase Agreement
(as such term is defined below).
RECITALS
A. Purchaser and Home Properties entered into
that certain Real Estate Purchase Agreement, dated
as of September 30, 1996, as amended by that
certain letter agreement, dated as of October 30, 1996,
and further amended by that certain First Amendment to
Real estate Purchase Agreement, dated as of November 8,
1996, by and between Home Properties and Seller (as
amended, the "Purchase Agreement"), for the sale of
certain real property (the "Property") commonly known
as "Valley Park South Apartments" and located in
Bethlehem, Lehigh County, Pennsylvania and more
particularly described in the Purchase Agreement.
B. Home Properties assigned all of its right,
title and interest in and all of the obligations
under the Agreement to Purchaser pursuant to that
certain Assignment of Real Estate Purchase Agreement,
dated November 7, 1996, by and among Purchaser, Home
Properties and Seller.
B. Purchaser and Seller desire to amend the
Purchase Agreement for the purpose of extending the
Closing Date provided for in Section 4(A) of the
Purchase Agreement all in accordance with the terms of
this Amendment.
NOW, THEREFORE, for valuable consideration, the
receipt and sufficiency of which are hereby acknowledged,
Purchaser and Seller agree as follows:
1. Extension of Closing Date. The Closing
shall occur on Friday, November 22, 1996.
2. Reaffirmation. Except as expressly amended
and modified under this Amendment and modified by the
letter agreement dated October 30, 1996, the terms and
provisions of the Purchase Agreement are hereby ratified
and affirmed in their entirety.
3. Counterparts. This Amendment may be signed in
any number of counterparts each of which shall be deemed
to be an original and all of which taken together shall
constitute one and the same instrument.
[Signature Page Follows.]
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IN WITNESS WHEREOF, the parties have executed
and delivered this Amendment as of the date first written
above.
SELLER:
/s/ Xxxxxx Xxxx
XXXXXX XXXX, NOT PERSONALLY,
BUT SOLELY AS TRUSTEE UNDER
TRUST AGREEMENT #6150-B DATED
JULY 3, 1978
PURCHASER:
VALLEY PARK SOUTH PARTNERSHIP,
a New York general partnership
By: Home Properties of New York, L.P.,
a New York limited partnership, its
general partner
By: Home Properties of New York, Inc.,
a New York corporation, its
general partner
By: /s/ Xxx X. XxXxxxxxx
Its: Vice President
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FIRST AMENDMENT TO
REAL ESTATE PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO REAL ESTATE PURCHASE
AGREEMENT (this "Amendment") is made as of this 8th day
of November, 1996, by and between Xxxxxx Xxxx, not
personally, but solely as Trustee under Trust Agreement
#6150-B dated July 3, 1978 ("Seller"), and Valley Park
South Partnership, a New York general partnership
("Purchaser"), as assignee of Home Properties of New
York, L.P., a New York limited partnership ("Home
Properties"). All initially capitalized terms used
herein which are not otherwise defined herein shall have
the meanings ascribed to them in the Purchase Agreement
(as such term is defined below).
RECITALS
A. Purchaser and Home Properties entered into
that certain Real Estate Purchase Agreement, dated
as of September 30, 1996, as amended by that
certain letter agreement, dated as of October 30, 1996,
by and between Home Properties and Seller (as
amended, the "Purchase Agreement"), for the sale of
certain real property (the "Property") commonly known
as "Valley Park South Apartments" and located in
Bethlehem, Lehigh County, Pennsylvania and more
particularly described in the Purchase Agreement.
B. Home Properties assigned all of its right,
title and interest in and all of the obligations
under the Agreement to Purchaser pursuant to that
certain Assignment of Real Estate Purchase Agreement,
dated November 7, 1996, by and among Purchaser, Home
Properties and Seller.
B. Purchaser and Seller desire to amend the
Purchase Agreement for the purpose of extending the
Closing Date provided for in Section 4(A) of the
Purchase Agreement all in accordance with the terms of
this Amendment.
NOW, THEREFORE, for valuable consideration, the
receipt and sufficiency of which are hereby acknowledged,
Purchaser and Seller agree as follows:
1. Extension of Closing Date. The Closing
shall occur on Monday, November 18, 1996.
2. Reaffirmation. Except as expressly amended
and modified under this Amendment and modified by the
letter agreement dated October 30, 1996, the terms and
provisions of the Purchase Agreement are hereby ratified
and affirmed in their entirety.
3. Counterparts. This Amendment may be signed in
any number of counterparts each of which shall be deemed
to be an original and all of which taken together shall
constitute one and the same instrument.
[Signature Page Follows.]
Page 1
IN WITNESS WHEREOF, the parties have executed
and delivered this Amendment as of the date first written
above.
SELLER:
/s/ Xxxxxx Xxxx
XXXXXX XXXX, NOT PERSONALLY, BUT
SOLELY AS TRUSTEE UNDER TRUST
AGREEMENT #6150-B DATED JULY 3, 1978
PURCHASER:
VALLEY PARK SOUTH PARTNERSHIP, a
New York general partnership
By: Home Properties of New York, L.P.,
a New York limited partnership,
its general partner
By: Home Properties of New
York, Inc., a New York
corporation, its general
partner
By: /s/ Xxx X. XxXxxxxxx
Its: Vice President
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XXXXXX XXXX XXXXX XXXXXXXXXX
XXXX XXXXXX SALE AGREEMENT
THIS REAL ESTATE SALE AGREEMENT (this "Agreement") is made as of the
day of September, 1996, by and between Xxxxxx Xxxx, not personally, but
solely as Trustee under Trust Agreement #6150B dated July 3, 1978 ("Seller"),
with an office c/o Equity Residential Properties Trust, Xxx Xxxxx Xxxxxxxxx
Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000, and Home Properties of New York,
L.P. ("Purchaser"), a New York limited partnership with an office at
000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000.
RECITALS
A. Seller is the owner of a certain parcel of real estate (the "Real
Property") in the City of Bethlehem, County of Lehigh, State of Pennsylvania,
which parcel is more particularly described in attached Exhibit A, and upon
which is located a 384unit apartment community commonly known as "Valley Park
South Apartments".
B. Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, the Property (as such term is hereinafter defined),
each in accordance with and subject to the terms and conditions set forth in
this Agreement.
THEREFORE, in consideration of the above Recitals, the mutual covenants and
agreements herein set forth and the benefits to be derived therefrom, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Purchaser and Seller agree as follows:
1. PURCHASE AND SALE
Subject to and in accordance with the terms and conditions set forth
in this Agreement, Purchaser shall purchase from Seller and Seller shall sell to
Purchaser the Real Property, together with: (i) all buildings and improvements
owned by Seller and any and all of Seller's rights, easements, licenses and
privileges presently thereon or appertaining thereto; (ii) Seller's right,
title and interest in and to the leases (the "Leases") affecting the Property or
any part thereof; (iii) all furniture, furnishings, fixtures, equipment,
maintenance vehicles, tools and other tangible personalty owned by Seller,
located on the Property and used in connection therewith, except that the
computer system, equipment and software used in the operation of the Property
(the "Computer System") shall be retained by Seller; and (iv) all right, title
and interest of Seller under any and all of the maintenance, service,
advertising and other like contracts and agreements with respect to the
ownership and operation of the Property (the "Service Contracts");
all to the extent applicable to the period from and after the Closing (as such
term is hereinafter defined)(items (i) through (iv) above, together with the
Real Property, are collectively referred to in this Agreement as the
"Property"). All of the foregoing expressly excludes all
property owned by tenants or other users or occupants of the Property.
2. PURCHASE PRICE
The purchase price to be paid by Purchaser to Seller for the Property
is Eighteen Million Five Hundred Thousand Dollars ($18,500,000.00) (the
"Purchase Price"). The Purchase Price shall be paid as follows:
X. Xxxxxxx Money.
(i) Upon execution of this Agreement by Purchaser, Purchaser
shall deliver to the Chicago office of Near North National Title Corporation
("Escrowee") xxxxxxx money in the sum of One Hundred Thousand Dollars
($100,000.00), which xxxxxxx money, together with any interest earned thereon
net of investment costs, are
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referred to in this Agreement as the "Xxxxxxx Money".
The Xxxxxxx Money shall be invested as Seller and Purchaser so direct. Any and
all interest earned on the Xxxxxxx Money shall be reported to Purchaser's
federal tax identification number.
(ii) If the transaction closes in accordance with the terms of
this Agreement, at Closing, the Xxxxxxx Money shall be delivered by Escrowee to
Seller as part payment of the Purchase Price. If the transaction fails to close
due to a default on the part of Purchaser, the Xxxxxxx Money shall be
delivered by Escrowee to Seller, such delivery to be without prejudice to the
other rights and remedies of Seller due to such a default as provided in this
Agreement or at law or in equity conferred. If the transaction fails to
close due to: (i) a default on the part of Seller; or (ii) one or more of the
contingencies set forth in Section 8 below is not waived by Purchaser or
satisfied, the Xxxxxxx Money shall be delivered by Escrowee to Purchaser, and
Purchaser shall have the remedy provided for in Section 7(A) below.
B. Cash at Closing. At Closing, Purchaser shall pay
to Seller, by wire transferred current federal funds, an amount equal to the
Purchase Price, minus the sum of the Xxxxxxx Money which Seller receives at
Closing from the Escrowee, minus the outstanding balance of the Existing Loan
(as defined in Section 8(B) hereof), and plus or minus, as the case may require,
the closing prorations and adjustments to be made pursuant to Section 4(C)
below.
3. EVIDENCE OF TITLE
Seller shall, within ten (10) days after the date of this Agreement,
deliver to Purchaser: (a) a current (that is, effective after the date of
this Agreement) commitment for an ALTA Owner's Title Insurance Policy (the
"Title Commitment"), in the amount of the Purchase Price, issued by Near North
National Title Corporation (the "Title Insurer"); and (b) copies of all existing
surveys of the Property currently in the possession or control of Seller. At
Closing, Seller shall deliver to Purchaser a later-dated commitment in the
amount of the Purchase Price reflecting the conveyance of the Property to
Purchaser, subject only to those exceptions which are more fully described
on attached Exhibit B and exceptions which become Permitted Exceptions
pursuant to this Section 3 (collectively, the "Permitted Exceptions"). If the
Title Commitment discloses exceptions other than those Permitted Exceptions
which are noted on attached Exhibit B, then Purchaser shall have ten (10) days
after its receipt of the Title Commitment within which to notify Seller of any
such exceptions to which it objects. If any such exceptions arise between the
date of the Title Commitment and the Closing, Purchaser shall have five (5) days
after its receipt of written notice of same within which to
notify Seller of any such exception to which it objects. Any such exceptions
not objected to by Purchaser as aforesaid shall become Permitted Exceptions. If
Purchaser objects to any such exceptions, Seller shall have until Closing (but
in any event at least fifteen (15) days after it receives notice of Purchaser's
objection(s)) to remove such exceptions by waiver or endorsement by the Title
Insurer. If Seller fails to remove any such exceptions as aforesaid, Purchaser
may, as its sole and exclusive remedy, terminate this Agreement and obtain a
return of the Xxxxxxx Money. If Purchaser does not elect to terminate
this Agreement, Purchaser shall consummate the Closing and accept title
to the Property subject to all such exceptions (in which event, all such
exceptions shall be deemed "Permitted Exceptions").
4. CLOSING
A. Closing Date. Provided that the contingencies set forth in
Section 8 have been waived by the Purchaser or satisfied and the Purchaser
has not terminated this Agreement as provided in Section 8, the "Closing" of
the transaction contemplated by this Agreement (that is, the payment of the
Purchase Price, the transfer of title to the Property, the assumption of the
Existing Loan by Purchaser and the satisfaction of all other terms and
conditions of this Agreement) shall occur at 9:00 a.m. on the date which is
fifteen (15) days after the expiration of the Review Period, at the Chicago
office of the
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Title Insurer, or at such other time and place as Seller and Purchaser shall
agree in writing. The "Closing Date" shall be the date of Closing. If the
date for Closing above provided for falls on a Saturday, Sunday or legal
holiday, then the Closing Date shall be the next business day.
B. Closing Documents.
(i) Seller. At Closing, Seller shall deliver to Purchaser the
following:
(a) a "special" Warranty Deed, subject to
Permitted Exceptions, and in form acceptable to the Title Insurer;
(b) a "special" warranty xxxx of sale
sufficient to transfer to Purchaser title to the tangible
personal property and expressly disclaiming any warranties
other than as to title as aforesaid;
(c) a letter advising tenants under the
Leases of the change in ownership of the Property;
(d) an assignment of the Leases and
Service Contracts along with the original or a certified
copy of each of the Leases and Service Contracts; provided,
however, that Seller shall have no obligation to deliver these
Leases and Service Contracts at Closing if such Leases and
Service Contracts are available at the Property;
(e) an affidavit stating, under
penalty of perjury, Seller's U.S. taxpayer identification
number and that Seller is not a foreign person within the
meaning of Section 1445 of the Internal Revenue Code;
(f) a closing statement to be executed by
Seller and Purchaser, setting forth the prorations and
adjustments to the Purchase Price as required by Section
4(C) below;
(g) a current rent roll certified as of the
Closing, which shall include a list of all residents, all
rental obligations of each resident and all security
deposits; and
(h) an assignment of any and all
guarantees and warranties Seller has with respect to the
Property.
(ii) Purchaser. Purchaser shall deliver or cause to be delivered
to Seller at Closing:
(a) the funds required pursuant to Section
2(B) above; and
(b) an assumption agreement whereby
Purchaser assumes all liabilities and agrees to
perform all obligations of Seller under the Leases and
Service Contracts arising after the Closing Date.
C. Closing Prorations and Adjustments. The following items are to
be prorated or adjusted (as appropriate) as of the close of business on the
Closing Date, it being understood that for purposes of prorations and
adjustments, Seller shall be deemed the owner of the Property on such day and
Purchaser shall be deemed the owner of the Property as of the day after the
Closing Date:
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(i) real estate and personal property taxes and assessments,
including, but not limited to, special taxes and assessments (on the basis of
the most recent ascertainable tax xxxx if the current xxxx is not then
available);
(ii) the "minimum" or "base" rent plus any additional monthly
fees payable by tenants under the Leases; provided, however, that rent and all
other sums which are due and payable to Seller by any tenant but uncollected as
of the Closing Date shall not be adjusted, but Purchaser shall cause the
rent and other sums for the period prior to the Closing Date to be remitted to
Seller if, as and when collected. At Closing, Seller shall deliver to
Purchaser a schedule of all such past due but uncollected rent and other sums
owed by tenants. Purchaser shall include the amount of such rent and other sums
in the first bills thereafter submitted to the
tenants in question after the Closing Date, and shall continue to do so for
twelve (12) months thereafter. Purchaser shall promptly remit to Seller any
such rent or other sums paid by scheduled tenants, but only if a deficiency in
the then current rent is not thereby created;
(iii) the amount of security deposits and pet deposits paid
under the Leases, but specifically excluding the amount of any non-
refundable administrative fees paid under the Leases;
(iv) water, electric, telephone and all other utility and fuel
charges, fuel on hand (at cost plus sales tax), and any deposits with utility
companies (to the extent possible, utility prorations will be handled by
meter readings on the day immediately preceding the Closing Date);
(v) amounts due and prepayments under the Service Contracts;
(vi) assignable license and permit fees;
(vii) reserves, escrows and interest on the Existing Loan
for which amounts Seller shall receive a credit at the Closing unless Lender
returns such amounts directly to Seller;
(viii) rent-ready credits, if any, in accordance with
Section 12(D) below; and
(ix) other similar items of income and expenses of operation.
Notwithstanding anything to the contrary contained in this
Section 4, Seller reserves the right (i) to meet with governmental officials and
to contest any reassessment governing or affecting Seller's obligations under
Section 4(C)(i) above and (ii) to contest any assessment of the Property or any
portion thereof and to attempt to obtain a refund for any taxes previously paid.
Seller shall retain all rights with respect to any refund of taxes applicable
to any period prior to the Closing Date.
D. Transaction Costs.
Seller shall be responsible for the costs of its own
legal counsel, the base premium for an owner's policy of title insurance, the
costs incurred to remove all monetary liens other than the Permitted Exceptions
and one-half of the cost of any escrow fees, transfer taxes and documentary
stamps. Purchaser shall be responsible for the costs of its own legal counsel,
any costs in excess of the base premium for an owner's policy of title
insurance, including, without limitation, the cost
of extended coverage, the costs of any endorsements issued in connection with
such policy, the costs incurred in connection with the assumption by
Purchaser of the Existing Loan, one-half of the cost of any escrow fees,
transfer taxes and documentary stamps, all costs
incurred in connection with its own due diligence activities (including, without
limitation, engineering and environmental reports, lease and expense audits and
survey updates) and all other
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closing and other transaction costs (including, without limitation, sales and
use taxes, intangible taxes, recording charges and
similar taxes or charges), whether or not the Closing occurs.
E. Possession.
Upon Closing, Seller shall deliver to Purchaser possession of the
Property, subject to such matters as are permitted by or pursuant to this
Agreement.
5. CASUALTY LOSS AND CONDEMNATION
A. If, prior to Closing, the Property or any part
thereof shall be condemned, or destroyed or materially damaged by fire or other
casualty (that is, damage or destruction which Seller reasonably believes could
be in excess of $250,000.00 or which impedes
access), Seller shall promptly so notify Purchaser. In such event, either party
shall have the option either to terminate this Agreement or to consummate the
transaction contemplated by this Agreement notwithstanding such
condemnation, destruction or damage. If either of the parties elects to
consummate the transaction contemplated by this Agreement, Purchaser shall be
entitled to receive the condemnation proceeds or settle the loss under all
policies of insurance applicable to the destruction or damage and receive the
proceeds of insurance applicable thereto, Purchaser shall receive at Closing a
credit against the Purchase Price in an amount equal to any deductible(s) and
uninsured amounts applicable thereto and Seller shall, at Closing, execute and
deliver to Purchaser all customary proofs of loss, assignments of claims and
other similar items. If either of the parties elects to terminate this
Agreement, the Xxxxxxx Money shall be returned to
Purchaser by the Escrowee, in which event this Agreement shall, without further
action of the parties, become null and void and neither party shall have any
further rights or obligations under this Agreement.
B. If, prior to Closing, there is any other damage or destruction
(that is, damage or destruction which Seller reasonably believes could be
$250,000.00 or less, or which does not impede access) to the Property or any
part thereof, Purchaser shall be entitled to settle the loss under all policies
of insurance applicable to the destruction or damage and receive the proceeds of
insurance applicable thereto, Purchaser shall receive at Closing a credit
against the Purchase Price in an amount equal to
any deductible(s) and uninsured amounts applicable thereto and Seller shall, at
Closing, execute and deliver to Purchaser all customary proofs of loss,
assignments of claims and other similar items.
6. BROKERAGE
Seller agrees to pay upon Closing (but not otherwise) a brokerage
commission of due to Commercial Realty Services, Inc. for services rendered in
connection with the sale and purchase of the Property. Seller and Purchaser
shall each indemnify and hold the other harmless from and against any and all
claims of all other brokers and finders claiming by, through or under the
indemnifying party and in any way related to the sale and purchase of the
Property, this Agreement or otherwise, including,
without limitation, attorneys' fees and expenses incurred by the indemnified
party in connection with such claim.
7. DEFAULT AND REMEDIES
A. Notwithstanding anything to the contrary contained in this
Agreement, if Seller fails to perform in accordance with the terms of this
Agreement, then, as Purchaser's sole and exclusive remedy hereunder and at
Purchaser's option, either (i) the Xxxxxxx Money shall be returned to
Purchaser, in which event this Agreement shall be null and void, and neither
party shall have any rights or obligations
under this Agreement, or (ii) upon notice to Seller not less than ten (10) days
after Purchaser becomes aware of which failure, and provided an action is filed
within thirty (30) days thereafter, Purchaser may seek performance of this
Agreement and damages; provided,
however, that such damages shall (i) be limited to
out-of-pocket costs and expenses incurred as a result of Seller's failure to
perform in accordance with the terms of this Agreement and (ii) shall not exceed
$15,000.00. Purchaser's failure to seek specific performance as aforesaid shall
constitute its election to proceed under clause (i) above.
B. If Purchaser fails to perform in accordance with the terms of
this Agreement, the Xxxxxxx Money may be retained by Seller as Seller's sole and
exclusive remedy against Purchaser.
C. After Closing, Seller and Purchaser shall, subject to the terms
and conditions of this Agreement, have such rights and remedies as are available
at law or in equity, except that neither Seller nor Purchaser shall be entitled
to recover from the other consequential or special damages.
8. CONDITION PRECEDENT
A. Subject to Section 13(G) below, Purchaser shall have thirty (30)
days after the date of this Agreement within which to review and inspect the
Property (including, but not limited to, performing engineering and Phase I
environmental studies), the Seller's books and records pertaining to the
Property, matters relating to zoning compliance and compliance by the Property
with other applicable governmental regulations, the market in which the
Property operates, the documents relating to the Existing Loan, the tax
assessment on the Property as it relates to the
Purchase Price and to the assessment on comparable properties and such other
matters as Purchaser shall deem reasonably necessary or appropriate in
connection with the Property (the "Review Period"). If Purchaser determines
that it does not wish to purchase the Property
as a result of its findings during the Review Period and notifies Seller of such
decision within the Review Period (such notice to contain Purchaser's
certification that it has elected not to purchase the Property and identifying
the reason or reasons), the Xxxxxxx Money shall be returned to Purchaser, at
which time this Agreement shall be null and
void and neither party shall have any further rights or obligations under this
Agreement. Purchaser's failure to object within the Review Period shall be
deemed a waiver by Purchaser of the condition contained in this Section 8(A).
B. Purchaser shall take title to the Property subject to the terms
of the existing lien held by Washington Capital DUS, Inc. (the "Lender") on the
Property ("Existing Loan"), except that as a condition of Purchaser to close,
Lender shall have approved the assumption by Purchaser of the Existing Loan and
the Existing Loan shall contain the following specific requirements:
(i) the outstanding principal
balance of the Existing Loan at
Closing shall be approximately Nine
Million Six Hundred Fifty Thousand
Dollars ($9,650,000.00);
(ii) Seller shall be completely
released from any and all obligations under
the Existing Loan.
Purchaser shall be responsible for securing the necessary approvals and
completing the documentation to assume the Existing Loan, at its sole cost and
expense, and Seller shall provide its reasonable cooperation in connection
therewith. Purchaser shall keep Seller informed of its progress in the approval
and assumption process. Purchaser shall pay all fees and costs charged by the
Lender relating to said assumption. In the event that the Lender will not
approve of the assumption by Purchaser of the Existing Loan or the Existing Loan
does not comply with the requirements specified in Sections 8(B)(i) and
8(B)(ii) above, Purchaser shall promptly notify Seller in which event the
Xxxxxxx Money shall be returned to Purchaser, at
which time this Agreement shall be null and void and neither party shall have
any further rights or obligations under this Agreement.
C. It shall also be a condition to Purchaser's obligation to close that
during the Review Period, the Purchaser shall obtain the approval of the Board
of Directors (the "Board") of its general partner - Home Properties of New York,
Inc., - to the acquisition of the Property on the terms and conditions
described herein. If Purchaser does not obtain the Board's approval within
fifteen (15) days of the date of this Agreement, the Purchaser shall promptly
notify Seller in which event the Xxxxxxx Money shall be returned to Purchaser,
at which time this Agreement shall be null and void and neither party shall
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have any further rights or obligations under this
Agreement. Purchaser's failure to notify Seller within ten (10) days of the
date of this Agreement of its failure to obtain Board approval shall be deemed a
waiver by Purchaser of the conditions contained in this Section 8(C).
D. It shall also be a condition to Purchaser's obligation to Close that
all of the Seller's representations and warranties contained in this Agreement
shall be true and correct on the Closing Date.
9. SECTION 1031 EXCHANGE
Seller may structure the disposition of the Property as a like-
kind exchange under Internal Revenue Code Section 1031 at Seller's sole cost and
expense. Purchaser shall reasonably cooperate therein, provided that
Purchaser shall incur no costs, expenses or liabilities in connection with
Seller's exchange. Seller shall indemnify, defend and hold Purchaser
harmless therefrom and Purchaser shall not be required to take title to or
contract for purchase of any other property. If Seller uses a qualified
intermediary to effectuate the exchange, any assignment of the rights or
obligations of Seller hereunder shall not relieve, release or absolve Seller of
its obligations to Purchaser.
10. REPRESENTATIONS AND WARRANTIES.
Seller represents and warranties to Purchaser on the date of
this Agreement as follows:
A. Seller is a duly organized trust.
B. The trustee executing and delivering this
Agreement has been duly appointed as trustee and is duly authorized and
empowered to execute and deliver this Agreement. The execution, delivery and
performance of this Agreement by Seller have been duly and properly authorized
in accordance with applicable law and with the Trust Agreement.
C. There are no contracts with respect to the
Property which will continue in effect after the Closing except as set forth on
Exhibit D attached hereto.
D. The rent roll attached hereto as Exhibit E is materially true
and correct as of September 1, 1996.
E. To the best of Seller's knowledge, after the due inquiry of Xxxx
Xxxxxxxx and Xxxx Xxxxxxxxxxx, there is no litigation, proceeding or
investigation pending or threatened against or affecting the Seller or the
Property that might affect or relate to the validity of this Agreement or any
action taken or to be taken pursuant hereto, other than those fully covered by
insurance.
F. To the best of Seller's knowledge, after the due inquiry of Xxxx
Xxxxxxxx and Xxxx Xxxxxxxxxxx, Seller has not received any notice that Seller or
the Property is or may be in violation of any material law, ordinance, rule,
regulation or code (including without limitation, any zoning, sign,
environmental, labor, safety, health or price or wage control ordinance, rule,
regulation or order) applicable to the ownership, development, operation or
maintenance of the Property.
G. This Agreement has been duly executed and
delivered by the Seller and constitutes a legal and binding obligation of Seller
and, to the best of Seller's knowledge, is enforceable in accordance with its
terms, except as may be limited by bankruptcy, insolvency and other laws
affecting creditors' rights generally and by equitable principles of general
applicability.
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11. LIMITATION OF LIABILITY.
A. Notwithstanding anything to the contrary contained herein, if the
Closing shall have occurred (and Purchaser shall not have waived,
relinquished or released any applicable rights in further limitation), the
aggregate liability of Seller arising pursuant to or in connection with the
representations, warranties, indemnifications, covenants or other
obligations (whether express or implied) of Seller under this Agreement (or any
document executed or delivered in connection herewith) shall not exceed
$1,000,000.
B. Except for the direct beneficiary of Seller, EQRValley Park
South Financing Limited Partnership, an Illinois limited partnership ("Financing
Partnership"), and subject in all instances to Section 11(A) above, no
constituent partner in or agent of Seller, nor any advisor, trustee,
director, officer, employee, beneficiary other than Financing Partnership,
shareholder, participant, representative or agent of any corporation or trust
that is or becomes a constituent partner in
Seller (including, but not limited to, ERP Operating Limited Partnership and
Equity Residential Properties Trust) shall have any personal liability,
directly or indirectly, under or in connection with this Agreement or any
agreement made or entered into under or pursuant to the provisions of this
Agreement, or any amendment or amendments to any of the foregoing made at any
time or times, heretofore or hereafter, and
Purchaser and its successors and assigns and, without limitation, all other
persons and entities, shall look solely to the Seller's assets, subject to
Section 13(N) below, and the Financing Partnership's assets for the payment of
any claim or for any performance, and Purchaser, on behalf of itself and its
successors and assigns, hereby waives any and all such personal liability.
Notwithstanding anything to the contrary contained in this Agreement, neither
the negative capital account of any
constituent partner in Seller (or in any other constituent partner of Seller),
nor any obligation of any constituent partner
in Seller (or in any other constituent partner of Seller) to restore a negative
capital account or to contribute capital to Seller (or to any other constituent
partner of Seller), shall at any time be deemed to be the property or an asset
of Seller or any such other constituent partner (and neither Purchaser nor any
of its successors or assigns shall have any
right to collect, enforce or proceed against or with respect to any such
negative capital account of partner's obligations to restore or contribute).
12. SELLER'S COVENANTS
A. Until the Closing, the Seller shall fulfill all of its material
obligations under the Leases and under the Service Contracts, shall continue to
manage and operate the Property in substantially the same manner as
heretofore managed and operated by Seller and shall keep the Property in
substantially the same condition as it exists on the date hereof subject to
ordinary wear and tear and casualty loss.
B. Within ten (10) days of the execution of this Agreement by both
parties, Seller shall deliver to Purchaser a copy of the following:
(i) if currently within the control or possession of Seller, all
environmental studies and operation and maintenance plans relating to the
Property and completed or adopted, as the case may be, within the last ten (10)
years;
(ii) if currently within the control or possession of Seller,
certificate(s) of occupancy relating to the Property;
(iii) if possible, a hard printed copy of all of the information
and reports relating to the Property and located on the Computer System; and
(iv) the documents relating to the Existing Loan.
Page 8
C. Seller will provide a signed representation letter in
the form of the letter attached hereto as Exhibit C. Upon prior written notice
and during normal business hours, Seller will
provide access by Purchaser's representatives to all financial and
other information relating to the Property as is sufficient to enable
Purchaser's representatives 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.
D. Seller shall put all unoccupied rental units on the
Property that have been vacant for more than one (1) week prior to Closing in
rent-ready condition in accordance with Seller's past practices and standards or
Purchaser shall be given a credit against the Purchase Price at Closing in an
amount required to put said units in rent-ready condition; provided, however,
that such credit shall not exceed $500.00 per
unoccupied rental unit. Notwithstanding the foregoing in this Section 12(D), if
any of such unoccupied rental units on the Property has sustained substantial
and unusual damage, then the credit against the Purchase Price at Closing
shall not be limited to $500.00 but shall be an amount required to put said
units in rent-ready condition in accordance
with Seller's past practices and standards as reasonably determined by
Seller.
13. MISCELLANEOUS
A. All understandings and agreements heretofore had between Seller
and Purchaser with respect to the Property are merged in this Agreement,
which alone fully and completely expresses the agreement of the parties.
Purchaser acknowledges that it has inspected or will inspect the Property
and that, except as otherwise specifically provided herein, it accepts
same in its "as is" condition subject to use, ordinary wear and tear and natural
deterioration. Purchaser further acknowledges that, except as expressly
provided in this Agreement, neither Seller nor any agent or representative of
Seller has made, and Seller is not liable for or bound in any manner by, any
express or implied warranties, guaranties, promises, statements,
inducements, representations or information pertaining to the Property.
B. Neither this Agreement nor any interest hereunder shall be
assigned or transferred by Purchaser without first
obtaining the Seller's prior written consent. Seller may assign or otherwise
transfer its interest under this Agreement to a qualified intermediary
pursuant to Section 9 above or to any entity directly or indirectly controlled
by Equity Residential Properties Trust.
As used in this Agreement, the term "Seller" shall be deemed to include any
assignee or other transferee of any Seller. Subject to the foregoing, this
Agreement shall inure to the benefit of and shall be binding upon Seller and
Purchaser and their respective successors and assigns.
C. This Agreement shall not be modified or amended except in a
written document signed by Seller and Purchaser.
D. Time is of the essence of this Agreement.
E. This Agreement shall be governed and interpreted in accordance
with the laws of the State of Pennsylvania.
F. All notices, requests, demands or other communications required
or permitted under this Agreement shall be in writing and delivered personally,
by certified mail, return receipt requested, postage prepaid, by overnight
courier (such as Federal Express), or by facsimile transmission with a copy to
follow by certified mail, return receipt requested, postage paid or by overnight
courier, addressed as follows:
Page 9
1. If to Seller:
c/o Equity Residential Properties Trust
Suite 000
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxx
With a copy to:
Equity Residential Properties Trust
Suite 000
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
2. If to Purchaser:
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxx
All notices given in accordance with the terms hereof shall be deemed received
forty-eight (48) hours after posting, or when delivered personally or otherwise
received. Either party hereto may change the address for receiving notices,
requests, demands or other communication by notice sent in accordance with the
terms of this Section 13(F).
G. Purchaser's right of inspection pursuant to Section 8 above
shall be subject to the rights of tenants under the Leases and other occupants
and users of the Property. No inspection shall be undertaken without reasonable
prior notice to Seller. Seller shall have the right to be present at any or
all inspections. Neither Purchaser nor its agents or representatives shall
contact any tenants without the prior consent of Seller. No inspection shall
involve the taking of samples or other physically invasive procedures without
the prior consent of Seller. Notwithstanding anything to the contrary
contained in this Agreement, Purchaser shall indemnify and hold Seller and its
employees and agents, and each of them, harmless from and against any and all
losses, claims, damages and liabilities (including, without limitation,
attorneys' fees incurred in connection therewith) arising out of or resulting
from Purchaser's exercise of its right of inspection as provided for in
Section 8 above.
H. (i) ACKNOWLEDGING THE PRIOR USE OF THE PROPERTY
AND PURCHASER'S OPPORTUNITY TO INSPECT THE PROPERTY, EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED IN THIS AGREEMENT, PURCHASER AGREES TO TAKE THE PROPERTY
"AS IS" WITH ALL FAULTS AND CONDITIONS THEREON. ANY INFORMATION, REPORTS,
STATEMENTS, DOCUMENTS OR RECORDS ("DISCLOSURES") PROVIDED OR MADE TO
PURCHASER OR ITS CONSTITUENTS BY SELLER, ITS AGENTS OR EMPLOYEES CONCERNING THE
ENVIRONMENTAL CONDITION OF THE PROPERTY SHALL NOT BE REPRESENTATIONS OR
WARRANTIES. PURCHASER SHALL NOT RELY ON SUCH DISCLOSURES, BUT RATHER, PURCHASER
SHALL RELY ONLY ON ITS OWN INSPECTION OF THE PROPERTY.
Page 10
(ii) PURCHASER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS
OTHERWISE SPECIFICALLY PROVIDED IN THIS AGREEMENT, SELLER HAS NOT MADE, DOES NOT
MAKE AND SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS, WARRANTIES, PROMISES,
COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER
EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO,
CONCERNING OR WITH RESPECT TO (A) THE NATURE, QUALITY OR CONDITION OF THE
PROPERTY, INCLUDING, WITHOUT LIMITATION, THE WATER, 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, (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 OR FITNESS FOR A
PARTICULAR PURPOSE OF THE PROPERTY, OR (F) ANY OTHER MATTER WITH RESPECT TO THE
PROPERTY, AND SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS REGARDING TERMITES OR
WASTES, AS DEFINED BY THE U.S. ENVIRONMENTAL PROTECTION AGENCY
REGULATIONS AT 40 C.F.R., OR ANY HAZARDOUS SUBSTANCE, AS DEFINED BY THE
COMPREHENSIVE ENVIRONMENTAL RESPONSE COMPENSATION AND LIABILITY ACT OF 1980
("CERCLA"), AS AMENDED, AND REGULATIONS PROMULGATED THEREUNDER. PURCHASER, ITS
SUCCESSORS AND ASSIGNS, HEREBY WAIVE, RELEASE AND AGREE NOT TO MAKE ANY CLAIM
OR BRING ANY COST RECOVERY ACTION OR CLAIM FOR CONTRIBUTION OR OTHER ACTION OR
CLAIM AGAINST SELLER OR ITS AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS,
ATTORNEYS, OR ASSIGNS (COLLECTIVELY, "SELLER AND ITS AFFILIATES") BASED ON (A)
ANY FEDERAL, STATE, OR LOCAL ENVIRONMENTAL OR HEALTH AND SAFETY LAW OR
REGULATION, INCLUDING CERCLA OR ANY STATE EQUIVALENT, OR ANY SIMILAR LAW NOW
EXISTING OR HEREAFTER ENACTED, (B) ANY DISCHARGE, DISPOSAL, RELEASE, OR ESCAPE
OF ANY CHEMICAL, OR ANY MATERIAL WHATSOEVER, ON, AT, TO, OR FROM THE
PROPERTY; OR (C) ANY ENVIRONMENTAL CONDITIONS WHATSOEVER ON, UNDER, OR IN
THE VICINITY OF THE PROPERTY.
I. In any lawsuit or other proceeding initiated by
Purchaser under or with respect to this Agreement, Purchaser waives any right it
may have to trial by jury. In addition, Purchaser waives any right to seek
rescission of the transaction provided for in this Agreement.
J. Except as may be required by law, without the
prior written consent of the other party, and unless the Closing occurs, neither
party shall disclose to any third party the existence of this Agreement or any
term or condition thereof or the results of any inspections or studies
undertaken in connection herewith. During the
period commencing on the Closing Date and ending on the date which is ten (10)
days after the Closing Date, each party shall
submit for the prior review of the other party any press release planned to be
issued to disclose the Closing. Such proposed press releases must be provided
to the reviewing party at least 24 hours prior to the time they are to be issued
and must be approved by the reviewing party during such 24-hour period, which
approval shall not be unreasonably withheld. If the reviewing party fails
to approve or disapprove such press releases within such 24-hour period, such
press releases shall be deemed to have been approved by the reviewing party.
K. If for any reason Purchaser does not consummate the
Closing, then Purchaser shall, upon Seller's request, assign and transfer to
Seller all of its right, title and interest in and to any and all studies,
reports, surveys and other information, data and/or documents relating to the
Property or any part thereof prepared by or at the request of Purchaser, its
employees and agents, and shall deliver to Seller copies of all of the
foregoing.
Page 11
M. Seller and Purchaser hereby designate Escrowee to act as and
perform the duties and obligations of the "reporting person" with respect to the
transaction contemplated by this Agreement for purposes of 26 C.F.R.
Section 1.6045-4(e)(5) relating to the requirements for information reporting on
real estate transaction closed on or after January 1, 1991. In this regard,
Seller and Purchaser each agree to execute at Closing, and to cause the
Escrowee to execute at Closing, a Designation Agreement, designating
Escrowee as the reporting person with respect to the transaction contemplated
by this Agreement.
N. This Agreement is executed by Xxxxxx Xxxx in the exercise of the
power and authority conferred upon and invested in him as such trustee. It is
expressly understood and agreed by all parties in this Agreement that nothing
herein contained shall be construed as creating any personal liability on Xxxxxx
Xxxx, all such liability, if any, being expressly waived.
Pae 12
IN WITNESS WHEREOF, Seller and Purchaser have executed and delivered
this Agreement as of the date first above written.
SELLER:
/s/ Xxxxxx Xxxx
XXXXXX XXXX, NOT PERSONALLY, BUT SOLELY AS
TRUSTEE UNDER TRUST AGREEMENT #6150-B DATED
JULY 3, 1978
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: /s/ Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxxx, Chairman
EXHIBITS
A - Legal Description
B - Permitted Exceptions
C - Form of Representation Letter
D - Ongoing Contracts
E - Rent Roll
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