AGREEMENT OF PURCHASE AND SALE
▇▇▇▇▇▇'▇ LANDING APARTMENTS
By and Between
▇▇▇▇▇▇ APARTMENTS PARTNERS,
an Illinois general partnership
Seller
and
BRE PROPERTIES, INC.
a Maryland corporation,
Purchaser
DATED: August 14, 1996
AGREEMENT OF PURCHASE AND SALE
▇▇▇▇▇▇'▇ LANDING APARTMENTS
FOSTER CITY, CALIFORNIA
THIS AGREEMENT OF PURCHASE AND SALE ("Agreement") is made and entered
into this 14th day of August, 1996 by and between ▇▇▇▇▇▇ APARTMENTS PARTNERS,
an Illinois general partnership ("Seller"), having an address of c/▇ ▇▇▇▇▇▇▇
Capital Management Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, and BRE
PROPERTIES, INC., a Maryland corporation ("Purchaser"), having an address of
One ▇▇▇▇▇▇▇▇▇▇ Street, Suite 2500, Telesis Tower, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
RECITALS
Seller is the owner of a parcel of real estate in Foster City, California,
legally described on EXHIBIT A attached hereto and all buildings thereon (the
"Real Property", which together with any and all appurtenances thereto is
collectively referred to as the "Property"), commonly known as the ▇▇▇▇▇▇'▇
Landing Apartments. The Property consists of a 490 unit apartment complex.
Subject to and on the terms and provisions of and for the considerations
set forth in this Agreement, Seller has agreed to sell, and Purchaser has agreed
to buy, the Property.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms have the
following meanings:
CLOSING DATE. As agreed between Seller and Purchaser but not later than
September 17, 1996.
DUE DILIGENCE PERIOD. The period which commenced on July 13, 1996, and
ending on August 27, 1996.
ESCROW COMPANY. Near North National Title Corporation, as agent for First
American Title Insurance Company.
TITLE COMPANY. Near North National Title Corporation, agent for agent for
First American Title Insurance Company.
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2. SALE; PURCHASE PRICE.
2.1 Subject to the terms and provisions hereof, Seller agrees to sell and
convey to Purchaser, and Purchaser agrees to Purchase from Seller the Property.
2.2 The total purchase price (hereinafter called the "Purchase Price") to
be paid by Purchaser to Seller for the Property shall be Sixty One Million and
no/100 Dollars ($61,000,000.00). The Purchase Price shall be payable in the
following manner:
(a) ▇▇▇▇▇▇▇ MONEY. Purchaser shall, on or before the third (3rd)
business day after the delivery of this Agreement to Seller, deposit with
Escrow Company, the amount of Five Hundred Thousand and 00/100 Dollars
($500,000.00) (hereinafter called the "▇▇▇▇▇▇▇ Money") which ▇▇▇▇▇▇▇ Money
shall be in the form of a wire transfer of immediately available United
States of America funds. The ▇▇▇▇▇▇▇ Money shall become nonrefundable one (1)
day after the expiration of the Due Diligence Period. The ▇▇▇▇▇▇▇ Money
shall be held and disbursed by the Escrow Company pursuant to the ▇▇▇▇▇▇▇
Money Escrow Agreement in the form of EXHIBIT H attached hereto which the
parties have executed simultaneously with this Agreement. The ▇▇▇▇▇▇▇ Money
shall be invested in a federally insured interest bearing account with any
interest accruing thereon being deemed part of the ▇▇▇▇▇▇▇ Money and shall be
paid to the party to which the ▇▇▇▇▇▇▇ Money is paid in pursuant to the
provisions hereof. If the sale hereunder is consummated in accordance with
the terms hereof, the ▇▇▇▇▇▇▇ Money and any interest thereon shall be applied
to the Purchase Price to be paid by Purchaser at the Closing. In the event of
a default hereunder by Purchaser or Seller, the ▇▇▇▇▇▇▇ Money shall be
applied as provided herein but any interest earned thereon shall be returned
to Purchaser.
(b) CASH BALANCE. Purchaser shall pay the balance of the Purchase
Price, subject to the prorations described in Paragraph 5 below, in cash (the
"Cash Balance") by wire transfer of immediately available United States of
America funds to the Title Company for payment to Seller, in accordance with the
terms and conditions of this Agreement no later than one (1) business day prior
to Closing Date.
3. SELLER'S DELIVERIES; CONDITIONS PRECEDENT. In the event any of the
conditions set forth in Sections 3.2(b), 3.3, 3.4 below shall not have been
fulfilled, accepted or deemed accepted or waived as provided herein on or
before the applicable dates specified herein, Purchaser shall have the right
to terminate this Agreement by giving written notice thereof to Seller on or
before the respective dates specified herein, and thereupon all ▇▇▇▇▇▇▇ Money
shall be refunded to Purchaser and neither party shall have any further
rights or obligations hereunder, except for the Surviving Obligations (as
hereinafter defined).
3.1 SELLER'S DELIVERIES. Except for any Excluded Documents (as
hereinafter defined), Seller has provided to Purchaser and Purchaser
acknowledges receipt of one copy of the following items related to the ownership
and operation of the Real Property:
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(a) all leases and amendments thereto (the "Leases");
(b) all service contracts ("Service Contracts")
(c) copies of the real estate tax bills for the current year and two
prior years and current assessment notices, if available;
(d) any existing environmental reports, including any Phase I
environmental report, and soil reports in Seller's actual possession;
(e) existing owner's title policy and existing survey;
(f) operating statements for the Property for the last three years;
(g) all licenses, permits and certificates of occupancy in Seller's
possession;
(h) all unexpired warranties in Seller's possession;
(i) plans and specifications in Seller's possession; and
(j) that certain letter dated March 20, 1987 from ▇▇▇▇▇▇ Associates
regarding earth work observations and testing services for the Property and that
certain geotechnical investigation report for the Property prepared by ▇▇▇▇▇▇
Associates dated September, 1985 (collectively, the "Geotechnical Reports").
Except for Excluded Documents, Seller shall provide to Purchaser any
documents described above and first coming into Seller's possession or produced
by Seller after the initial delivery of the above and continue to provide the
same during the pendency of this Agreement. In the event this Agreement
terminates for any reason, Purchaser shall immediately return to Seller all
written and other physical materials (whether from Seller, Seller's agents or
otherwise) received by Purchaser relating to the Property or Seller.
Seller makes no representations or warranties, either expressed or implied,
and shall have no liability with respect to the accuracy or completeness of the
information, data, or conclusions contained in the information provided to
Purchaser and Purchaser shall make its own independent inquiry regarding the
economic feasibility, physical condition and environmental state of the Property
during the Due Diligence Period.
3.2. INSPECTIONS AND ACCESS. Purchaser and its representatives shall be
permitted to enter upon the Property at any reasonable time and from time to
time during the Due Diligence Period to examine, inspect and investigate the
Property (collectively, the "Inspections") and, as part of such Inspections,
make copies of all books, records, drawings, and other documentation relating
thereto in Seller's possession, subject to the terms, conditions and limitations
set forth in the following paragraphs.
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(a) Purchaser shall have a right to enter upon the Property for the
purpose of conducting the Inspections and for no other purpose provided that in
each such instance (i) Purchaser notifies Seller of such Inspections not less
than 24 hours prior to such entry; (ii) such Inspections are subject to and
scheduled with Seller's property manager, as available; and (iii) Purchaser is
in full compliance with Section 3.2(e) hereof. At Seller's election, a
representative of Seller's shall be present during any entry by Purchaser or its
representatives upon the Property for conducting said Inspections. Purchaser
shall make all necessary actions to insure that neither it nor any of its
representatives shall unreasonably interfere with the ongoing operations
occurring at the Property during the course of performing any such Inspections.
Purchaser shall not cause or permit any mechanic liens, materialmen's liens or
other liens to be filed against the Property as a result of the Inspections.
(b) Purchaser shall have through the last day of the Due Diligence
Period in which to conduct its due diligence investigations and analysis of the
Property and of all information pertaining to the Property, and, in Purchaser's
sole discretion, to determine whether the Property, is acceptable to Purchaser.
If during the Due Diligence Period, Purchaser becomes aware of any problem or
defect in the Property or other aspect of the Property with Purchaser
determines, in its sole and absolute discretion, makes the Property unsuitable
to Purchaser, Purchaser may terminate this Agreement by giving written notice of
termination to Seller on or before the last day of the Due Diligence Period. If
Purchaser accepted the Property and this Agreement shall continue in full force
and effect. In the event of such termination, the ▇▇▇▇▇▇▇ Money shall be
returned to Purchaser and neither party shall have any further obligations to
the other party hereunder, except for the Surviving Obligations.
(c) Purchaser shall, at least thirty (30) days prior to the Closing
Date, notify Seller in writing requesting termination of any or all of the
Service Contracts, Purchaser shall be deemed to have accepted the assumption of
the Service Contracts.
(d) Purchaser shall have the right to conduct, at its sole cost and
expense, any inspections, studies or tests that Purchaser deems appropriate in
determining the condition of the Property, provided, however, Purchaser is not
permitted to perform any intrusive testing, including, without limitation, a
phase II environmental assessment or boring, without the prior written consent
of Seller. Immediately upon receipt of the written request of Seller, Purchaser
shall deliver to Seller a complete copy of any environmental studies, reports,
test results, analyses and similar documents (the "Environmental Reports")
prepared by or on behalf of Purchaser or its agents.
(e) Purchaser agrees and covenants with Seller not to disclose to any
third party (other than lenders, accountants, attorneys and other professionals
and consultants) without Seller's prior written consent, unless Purchaser is
obligated by law to make such
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disclosure, any of the reports or any other documentation or information
obtained by Purchaser which related to the Property or Seller in any way, all of
which shall be used by Purchaser and its agents solely in connection with the
transaction contemplated hereby.
(f) Purchaser agrees to indemnify, defend and hold Seller and its
partners, trustees, beneficiaries, shareholders, managers, advisors and other
agents and their respective employees, officers, directors and shareholders (the
"Indemnified Parties") harmless from and against any and all claims, losses,
damages, costs and expense (including, without limitation, attorneys fees' and
court costs) suffered or incurred by any of the Indemnified Parties as a result
of or in connection with any activities of Purchaser (including activities of
any of Purchaser's employees, consultants, contractors or other agents)
conducted pursuant to this Section 3.2 or otherwise, including, without
limitation, mechanics' liens, damage to the Property and injury to persons or
property resulting from such activities and, in connection therewith, in the
event that the Property is disturbed or altered in any way as a result of such
activities, Purchaser shall promptly restore the Property to substantially the
condition existing prior to the commencement of such activities.
Notwithstanding the foregoing, with respect to only the investigation of
existing dry rot conditions affecting the Property, the parties agree that
Purchaser shall only be required to repair areas damaged by destructive testing
in dry rot areas performed by or at the direction of Purchaser. Purchaser shall
not be required to repair any dry rot repair areas damaged by destructive
testing ordered or required by any party other than Purchaser. The foregoing
limitation on Purchaser's responsibilities only relates to the aforesaid
investigation of the existing dry rot condition at the Property. Furthermore,
Purchaser agrees to maintain and cause any of its representatives or agents
conducting any inspections to maintain and have in effect workers; compensation
insurance, with statutory limits of coverage, and commercial general liability
insurance with (i) appropriate coverages, (ii) waiver of subrogation, and (iii)
limits of not less than One Million and 00/100 ($1,000,000.00) for personal
injury, including bodily injury and death, and property damage. Such insurance
shall name Seller, Heitman Capital Management Corporation and ▇▇▇▇▇▇▇ Properties
Ltd. as additional insured parties and shall be with Companies, with deductibles
and otherwise in form reasonably acceptable to Seller. Purchaser shall deliver
to Seller a copy of the certificate of insurance effectuating the insurance
required hereunder prior to the commencement of such activities.
(g) Purchaser acknowledges and agrees shall have no right to review
or inspect any of the Excluded Documents. "Excluded Documents" shall mean (a)
internal memoranda, internal correspondence, internal analyses, internal
documents or internal reports prepared by or for Seller in connection with the
sale contemplated by this Agreement or in connection with its ownership or
operation of the property, (b) communications between Seller or any affiliate
and their attorneys or other agents or representatives, and (c) appraisals,
assessments or other valuations of the Property in the possession of Seller.
(h) The provisions of this Section 3.2 and such other designated
provisions in this Agreement shall survive Closing or any termination of this
Agreement (collectively,
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the "Surviving Obligations").
3.3 TITLE AND SURVEY. Seller shall, at its sole cost and expense, obtain
and deliver to Purchaser for Purchaser's review: (a) a commitment for a CLTA
owner's policy of title insurance (the "Title Commitment") on the Real
Property issued by the Title Company and (b) an existing ALTA survey of the
Property (the "Survey"). In addition, during the Due Diligence Period,
Purchaser shall have the right to obtain, at its sole cost and expense, any
desired endorsements to the Title Commitment which are available, if any, and an
update to the Survey. The Title Company shall deliver to Purchaser a copy of
each instrument listed as an exception to title or referred to therein.
Purchaser shall have until the close of business on August 30, 1996 (such date
being referred to as the "Title Review Date") for examination of Title
Commitment and Survey and the making of any objections thereto, said objections
to be made in writing and delivered to Seller on or before the end of the Title
Review Date. If Purchaser shall fail to make any objections on or before the
Title Review Date Purchaser shall be deemed to have accepted all exceptions to
the Title Commitment and the form and substance of the Survey, all matters shown
thereon and all such matters shall be included in the term "Permitted
Exceptions" as used herein. If any objections to the Title Commitment or Survey
are made within the Title Review Period, Seller shall have the right, but not
the obligation, to cure (by removal, endorsement or otherwise) such objections
on or before the Closing Date. If the objections are not cured by Seller, or
waived by Purchaser, by the scheduled Closing Date then Purchaser may at its
option, and as its sole remedy, terminate this Agreement, in which event the
▇▇▇▇▇▇▇ Money shall be returned to Purchaser and neither party shall have any
further obligations to the other party except for the Surviving Obligations.
4. CLOSING; CONDITIONS; DELIVERIES.
4.1 TIME, PLACE AND MANNER OF CLOSING. The Closing shall be held on the
Closing Date in the offices of the Title Company or at any location mutually
acceptable to the parties.
4.2 CONDITION TO PARTIES' OBLIGATION TO CLOSE. In addition to all other
conditions set forth herein, the obligation of Seller, on the one hand, and
Purchaser, on the other hand, to consummate the transaction contemplated
hereunder shall be contingent upon the following:
(a) The other party's representations and warranties contained herein
shall be true and correct in all material respects as of the date of this
Agreement and the Closing Date;
(b) As of the Closing Date, the other party shall have performed its
obligations hereunder in all material respects and all deliveries to be made at
Closing have been tendered;
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(c) As of the Closing Date, there shall exist no pending or known
threatened action, suit or proceeding with respect to the other party or the
Property (except to the extent covered by insurance) before or by any court or
administrative agency which seeks to restrain or prohibit, or to obtain damages
or discovery order with respect to, this Agreement or the consummation of the
transactions contemplated hereby;
(d) On or prior to the expiration of the Due Diligence Period,
Purchaser shall have obtained final approval of the transaction contemplated by
this Agreement from Purchaser's Board of Directors ("Board Approval") and shall
have delivered to Seller a copy of such authorizing resolution.
4.3 DELIVERIES. At Closing each party shall execute and deliver to the
other and/or the Title Company the following documents:
(a) Seller shall deliver to Purchaser and/or the Title Company:
(i) a grant deed (the "Deed") to the Real Property in
recordable form, duly executed by Seller and acknowledged and in substantially
the same form as set forth in EXHIBIT C attached hereto, conveying to Purchaser
fee simple title to the Real Property, subject only to the Permitted Exceptions;
(ii) a ▇▇▇▇ of sale duly executed by Seller and in
substantially the same form as set forth in EXHIBIT D attached hereto, conveying
to Purchaser title to all personal property owned by Seller and located at the
Real Property, if any;
(iii) an assignment of leases duly executed by Seller and in
substantially the same form as set forth in EXHIBIT E attached hereto, vesting
in Purchaser all of Seller's right, title and interest in and to the Leases;
(iv) an assignment of all service contracts, licenses and
permits affecting the Property (to the extent freely assignable) duly executed
by Seller and in substantially the same form as set forth in EXHIBIT F attached
hereto;
(v) a non-foreign transferor certification pursuant to Section
1445 of the Internal Revenue Code and any similar provisions of applicable state
law, in substantially the same form as set forth on EXHIBIT K attached hereto
(the "Affidavit");
(vi) an assignment, in recordable form, of that certain
Affordable Housing Agreement for ▇▇▇▇▇▇'▇ Landing Project dated April 7, 1986 by
and between the Community Development Agency of the City of ▇▇▇▇▇▇ City and
▇▇▇▇▇▇'▇ Landing Apartments; and
(vii) a certified Resolution of Seller certifying that Seller
has the legal power, right and authority to consummate the sale of the Property.
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(b) Purchaser shall pay or deliver to Seller or the Title Company:
(i) the Cash Balance, by wire transfer, as provided in Section
2.2 hereof;
(ii) an assumption duly executed by the Purchaser of the
assignments described in Paragraphs 4.3(a)(iii), (iv) and (vi);
(iii) a Certified Resolution of Purchaser certifying that
Purchaser has the legal power, right and authority to consummate the purchase
of the Property; and
(iv) evidence satisfactory to Seller that the Broker (as
hereinafter defined) will look solely to Purchaser for payment of any brokerage
commission due Broker.
(c) Seller and Purchaser shall jointly deliver;
(i) A Closing Statement; and
(ii) All transfer declarations or similar documentation required
by law.
(iii) Letters to the tenants of the Property in the form of
EXHIBIT I attached hereto.
(iv) Notices in substantially the form attached hereto as
EXHIBIT J attached hereto to the other party to each Service Contract assumed by
Purchaser pursuant to Section 3.2(c) of this Agreement.
4.4 INTENTIONALLY OMITTED.
4.5 PERMITTED TERMINATION. So long as a party is not in default
hereunder, if any condition to such party's obligation to proceed with the
Closing hereunder has not been satisfied or waived by such party as of the
Closing Date or such earlier date as provided herein, such party may, in its
sole discretion, terminate this Agreement by delivering written notice to the
other party before the Closing Date, or elect to close, notwithstanding the non-
satisfaction of such condition, in which event such party shall be deemed to
have waived any such condition. In the event such party elects to close, there
shall be no liability on the part of any other party hereto for breaches of
representations and warranties of which the party electing to close had actual
knowledge as of the Closing.
5. PRORATIONS. All items of income and expense shall be paid, prorated or
adjusted as of the close of business on the day prior to the Closing Date (the
"Proration Date) in the manner hereinafter set forth:
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5.1 Purchaser shall be credited with (i) the amount of all rents received
by Seller and attributable to any period following the Closing Date and (ii) all
unapplied cash rent and pet security deposits held by Seller and which were made
by tenants under all leases of the Real Property in effect as of the Closing
Date. No credit shall be given to Purchaser for any non-refundable cleaning fee
deposits.
5.2 All rents for the month of Closing shall be prorated between Purchaser
and Seller based upon their respective days of ownership for such month in which
the Closing occurs. Neither Purchaser nor Seller shall receive credit at
Closing for any payments due but not received as of the Proration Date.
5.3 Any rentals received from tenants after Closing shall be applied on a
tenant by tenant basis in the following order: (A) first on account of
any amount currently due Purchaser from such tenant(s); (B) next, on account of
any amount due Seller from such tenant(s) for the period up to and including the
Proration Date and (C) finally, any balance then remaining to Purchaser. Seller
retains the right to pursue its remedies against tenants after Closing for any
delinquent payments or other amounts owed to Seller, except for actions or
proceedings affecting possession or landlord liens. However, Seller will not
exercise any such rights or remedies unless such delinquent rents have not been
collected by Purchaser and paid to Seller within three (3) months after the
Closing Date.
5.4 Operating expenses shall be prorated between Purchaser and Seller
based upon the actual days of their respective ownership of the Property
utilizing the actual expenses or reasonable estimates.
5.5 Real estate taxes shall be prorated between Seller and Purchaser based
upon the actual days of ownership of the parties for such tax year, provided,
however, Purchaser shall be solely responsible for any increase in real estate
taxes (retroactive or otherwise) by reason of the sale of the Property. Seller
reserves the right (a) to meet with governmental officials and to contest any
reassessment governing or affecting Seller's obligations under this Section, and
(b) 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.
5.6 Utilities not directly metered and paid by tenants shall be prorated
as of the Proration Date based upon either meter readings on the Proration Date
or the prior month's actual invoices. Seller shall be credited with any
unapplied utility deposit in effect as of the Closing Date to the extent such
deposit is assignable.
5.7 All insurance policies and property management and leasing agreements
shall be terminated as of the Closing Date and there shall be no proration with
respect to these items.
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All other items which are customarily prorated in transactions similar to the
transaction contemplated hereby and which were not heretofore dealt with, will
be prorated as of the Proration Date. In the event any prorations or
computations made under this Section are based upon estimates or prove to be
incorrect, then either party shall be entitled to an adjustment to correct the
same, provided that it makes written demand on the party from whom it is
entitled to such adjustment within one hundred and twenty days after the end of
the current calendar year subject to those matters relating to the BMR Units, as
described below. Notwithstanding the foregoing, to the extent possible, the
parties shall attempt to reprorate any items not finalized as of the Closing
Date within sixty (60) days after the Closing Date. Purchaser further
acknowledges that Seller shall be entitled to receive the tax credit payments
due Seller with respect to the so-called below market rent units ("BMR Units")
for the period up to and including the Proration Date. Such tax payments may
not be received in full until February, 1997 (with respect to the period from
July 1, 1995 through June 30, 1996), which entire payment is Seller's property,
and until February, 1998 (with respect to the period from July 1, 1996 through
June 30, 1997) which payment shall be apportioned between the parties as of
Closing. If Purchaser receives any payment (in whole or in part)which is
Seller's property as set forth above, Purchaser shall be deemed to be holding
such funds in trust for Seller and shall immediately remit same to Seller.
6. SELLER'S REPRESENTATIONS and WARRANTIES. Seller hereby represents and
warrants as follows:
6.1 POWER. Seller has the legal power, right and authority to enter into
this Agreement and the instruments referenced herein and to consummate the
transactions contemplated hereby.
6.2 REQUISITE ACTION. All requisite action (corporate, trust, partnership
or otherwise) has been taken by Seller in connection with the entering into this
Agreement and the instruments referenced herein and the consummation of the
transactions contemplated hereby. No consent of any partner, shareholder,
creditor, investor, judicial or administrative body, authority or other party is
required which has not been obtained to permit Seller to enter into this
Agreement and consummate the transaction contemplated hereby.
6.3 AUTHORITY. The individuals executing this Agreement and the
instruments referenced herein on behalf of Seller have the legal power, right
and actual authority to bind Seller to the terms and conditions hereof and
thereof.
6.4 VALIDITY. This Agreement and all documents required hereby to be
executed by Seller are and shall be valid, legally binding obligations of and
enforceable against Seller in accordance with their terms.
6.5 CONFLICTS. Neither the execution and delivery of this Agreement and
documents referenced herein, nor the incurrence of the obligations set forth
herein, nor the consummation of the transactions herein contemplated, nor
referenced herein conflict with
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or result in the material breach of any terms, conditions or provisions of or
constitute a default under, any bond, note, or other evidence of indebtedness or
any contractor lease to which Seller is a party.
6.6 LEASES. Attached hereto as SCHEDULE 1 is a complete and accurate
list of the Leases, which shall be updated by Seller prior to Closings if
necessary. In connection therewith, Seller shall provide Purchaser with a copy
of a leasing activity report for the Property on a weekly basis and otherwise in
a manner consistent with Seller's current procedure for the distribution of such
leasing activity report to its principals, management and other interested
parties.
6.7 SERVICE CONTRACTS. Attached hereto as SCHEDULE 2 is a complete and
accurate list of the Service Contracts, which shall be updated by Seller prior
to Closing, if necessary.
6.8 NOTICES. Seller has not received any written notice in the past three
years that the Property, or any of its present uses and operations thereof, are
in current violation of any applicable zoning, land-use, building, fire, health,
labor, safety, subdivision and other laws or regulations.
6.9 LITIGATION. To the best of Seller's knowledge, except as set forth
on SCHEDULE 3 no litigation has been served upon Seller, filed, or threatened in
writing, with respect to Seller and the Property, which would materially and
adversely affect the ability of Seller to carry out the transactions
contemplated by this Agreement. SCHEDULE 3 shall be updated by Seller prior to
Closing, if necessary.
6.10 ENVIRONMENTAL CONDITION. Seller has no knowledge of any violation of
Environmental Laws related to the Property or the presence or release of
Hazardous Materials on or from the Property except as disclosed in SCHEDULE 3
attached hereto and in the environmental reports delivered by Seller to
Purchaser or made available for Purchaser's review. The term "Environmental
Laws" includes without limitation the Resource Conservation and Recovery Act and
the Comprehensive Environmental Response Compensation and Liability Act
("CERCLA") and other federal laws governing the environment as in effect on the
date of this Agreement together with their implementing regulations and
guidelines as of the date of this Agreement, and all state, regional, county,
municipal and other local laws, regulations and ordinances that are equivalent
or similar to the federal laws recited above or that purport to regulate
Hazardous Materials in effect as of the date of this Agreement. "HAZARDOUS
MATERIALS" means any substance which is (i) designated, defined, classified or
regulated as a hazardous substance, hazardous material, hazardous waste,
pollutant or contaminant under any Environmental Law, as currently in effect as
of the date of this Agreement (ii) petroleum hydrocarbon, including crude oil or
any fraction thereof and all petroleum products, (iii) PCBs, (iv) lead, (v)
friable asbestos, (vi) flammable explosives, (vii) infectious materials or
(viii) radioactive materials.
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6.11 INDEMNITY. Seller shall indemnify and hold Purchaser harmless from
and against any and all claims, actions, judgments, liabilities, liens, damages,
penalties, fines, costs and reasonable attorneys' fees, forseen or unforeseen,
asserted against, imposed on or suffered or incurred by Purchaser (or the
Property) directly or indirectly arising out of or in connection with any breach
of the warranties and representations set forth in this Section 6. The
warranties and representations set forth in this Section 6 shall be deemed
remade as of Closing, and said warranties and representations as so remade, and
the indemnity obligation set forth in herein shall survive Closing, provided
that any claim by Purchaser based on a misrepresentation or breach of any
warranty or representation or indemnity obligation under this Section 6 shall be
deemed waived unless Purchaser has given Seller written notice of such claim
prior to the date which is six (6) months from the Closing Date.
As used in this Section 6, the term "to Seller's knowledge" "actual knowledge or
"best of Seller's knowledge" (i) shall mean and apply to the actual knowledge of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ and H.D. ▇▇▇▇▇▇▇▇▇ and not to any other parties,
(ii) shall mean the actual knowledge of such individuals, without any
investigation or inquiry of any kind, it being understood and acknowledged that
such individuals, in some instances, are not involved in the day-to-day
operations of the Property and in some instances were not involved in the
negotiation or execution of any leases, management contracts, or service
contracts; (iii) shall not mean such individuals are charged with knowledge of
the acts, omissions and/or knowledge of the predecessors in title to the
Property or with knowledge of the acts, omissions and/or knowledge of Seller's
agents or employees; (iv) shall not apply to or to be construed to apply to
information or material which may be in the possession of Seller generally or
incidentally, but which is not actually known to the individuals who are
directly engaged in the management of the Property and the sale and purchase
transaction described herein.
Notwithstanding anything contained in this Agreement to the contrary, all
of the representations, warranties and certifications (the "Representations")
which are made by Seller and set forth herein or in any of the documents or
instruments required to be delivered by Seller hereunder, shall be subject to
the following conditions and limitations: (i) there shall be no liability on the
part of Seller for breaches of Representations of which Purchaser had knowledge
of at Closing; and (ii) in the event that prior to the time of Closing, during
the course of Purchaser's inspections, studies, tests and investigations
conducted pursuant to Paragraph 3.2 hereof, or through other sources, Purchaser
gains knowledge of a fact or circumstance which, by its nature, indicates that a
Representation was or has become untrue or inaccurate, and such fact or
circumstance was not intentionally withheld from Purchaser by Seller with the
intent to defraud Purchaser, then Purchaser shall not have the right to bring
any lawsuit or other legal action against Seller, nor pursue any other remedies
against Seller, as a result of the breach of the Representation caused thereby,
but Purchaser's sole right shall be to terminate this Agreement in which event,
the ▇▇▇▇▇▇▇ Money shall be returned to ▇▇▇▇▇▇▇▇▇.
-▇▇-
▇. ▇▇▇▇▇▇▇▇ AS-IS. EXCEPT FOR THE REPRESENTATIONS OF SELLER EXPRESSLY SET
FORTH IN SECTION 6 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" 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 6 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, 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 MATERIALS 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 INCLUDING WITHOUT LIMITATION ALL
SUBSURFACE CONDITIONS DISCLOSED IN THE GEOTECHNICAL REPORTS. PURCHASER
EXPRESSLY ACKNOWLEDGES THAT THE PROPERTY WAS CONSTRUCTED ON FILL IN AN ACTIVE
SEISMIC AREA. PURCHASER ACKNOWLEDGES AND AGREES THAT, EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES OF SELLER CONTAINED IN SECTION 6 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
IN 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 6 OF
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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.
8. PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser hereby represents
and warrants as follows:
8.1 POWER. Purchaser has the legal power, right and authority to enter
into this Agreement and the instruments referenced herein and to consummate
the transactions contemplated hereby.
8.2 REQUISITE ACTION. All requisite action (corporate, trust, partnership
or otherwise) has been taken by Purchaser in connection with the entering
into this Agreement and the instruments referenced herein and the consummation
of the transactions contemplated hereby. Except for the Board Approval, no
consent of any partner, shareholder, creditor, investor, judicial or
administrative body, authority or other party is required which has not been
obtained to permit Purchaser to enter into this Agreement and consummate the
transaction contemplated hereby, including but not limited to, any consent
from Purchaser's board of directors.
8.3 AUTHORITY. The individuals executing this Agreement and the
instruments referenced herein on behalf of Purchaser have the legal power,
right and actual authority to bind Purchaser to the terms and conditions
hereof and thereof.
8.4 VALIDITY. This Agreement and all documents required hereby to be
executed by Purchaser are and shall be valid, legally binding obligations of
and enforceable against Purchaser in accordance with their terms.
8.5 CONFLICTS. Neither the execution and delivery of this Agreement and
documents referenced herein, nor the incurrence of the obligations set
forth herein, nor the consummation of the transactions herein contemplated,
nor referenced herein conflict with or result in the material breach of any
terms, conditions or provisions of or constitute a default under, any bond,
note, or other evidence of indebtedness or any contract, lease or other
agreements or instruments to which Purchaser is a party.
8.6 LITIGATION. There is no action, suit or proceeding pending or
threatened against Purchaser in any court or by or before any other
governmental agency or instrumentality which would materially and adversely
affect the ability of Purchaser to carry out the transactions contemplated by
this Agreement.
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8.7 INDEMNITY. Purchaser shall indemnify and hold the Indemnified Parties
harmless from and against any and all claims, actions, judgments,
liabilities, liens, damages, penalties, fines, costs and reasonable
attorneys' fees, foreseen or unforeseen, asserted against, imposed on or
suffered or incurred by Seller directly or indirectly arising out of or in
connection with any breach of the warranties, representations and covenants
set forth in this Section 8. The warranties and representations set forth in
this Section 8 shall be deemed remade as of Closing, and said warranties and
representations as so remade, and the indemnity obligation set forth in herein
shall be deemed waived unless Seller has given Purchaser written notice of
any claim prior to the date which is six (6) months from the Closing Date.
8.8 REPRESENTATIONS. Notwithstanding anything contained in this Agreement
to the contrary, all of the representations, warranties and certifications
(the "Representations") which are made by Purchaser and set forth herein or
in any of the documents or instruments required to be delivered by Purchaser
hereunder, shall be subject to the following conditions and limitations: (i)
there shall be no liability on the part of Purchaser for breaches of
Representations of which Seller had knowledge of at Closing; and (ii) in the
event that prior to the time of Closing, Seller gains knowledge of a fact or
circumstance which, by its nature, indicates that a Representation was or
has become untrue or inaccurate, and such fact or circumstance was not
intentionally withheld from Seller by Purchaser with the intent to defraud
Seller, then Seller shall not have the right to bring any lawsuit or other
legal action against Purchaser, nor pursue any other remedies against
Purchaser, as a result of the breach of the Representation caused thereby,
but Seller's sole right shall be to terminate this Agreement in which event,
the ▇▇▇▇▇▇▇ Money shall be returned to Purchaser.
9. CLOSING COSTS. Seller shall pay the following expenses incurred to
consummate the transaction described herein: (i) costs to obtain a base (i.e.
without endorsements) CLTA owner's title policy, (ii) one-half of all closing
escrow fees, and (iii) Seller's legal fees and expenses. Purchaser shall pay
(a) the additional costs for an ALTA owner's title policy and for any
endorsements and the costs to obtain a current survey (or an update to any
existing survey delivered by Seller to Purchaser), (b) one-half of all
closing escrow fees, (c) the fee for the recording of the Deed, (d) all costs
and expenses incurred in connection with the transfer of any transferable
permits or licenses in connection with the ownership or operation of the
Property, (e) all documentary stamp taxes and transfer taxes and (f)
Purchaser's legal fees and expenses.
10. COMMISSIONS. Purchaser shall be solely responsible for the payment of any
commission to ▇▇▇▇▇▇ & ▇▇▇▇▇▇ ("Broker"). Seller and Purchaser each warrant
and represent to the other that (other than Broker) neither has had any
dealings with any broker, agent, or finder relating to the sale of the
Property or the transactions contemplated hereby, and each agrees to
indemnify and hold the other and their respective advisors (including ▇▇▇▇▇▇▇
Capital Management Corporation, Seller's advisor) harmless against any claim
for brokerage commissions, compensation or fees by any broker, agent, or
finder in
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connection the sale of the Property or the transactions contemplated hereby
resulting from the acts of the indemnifying party.
11. ESCROW. On or prior to the Closing Date, the parties or their respective
attorneys shall establish a deed escrow with the Title Company, as Escrowee,
and a money escrow with Escrow Company through which the transaction
contemplated hereby shall be closed. Upon opening of such escrow, the ▇▇▇▇▇▇▇
Money (plus interest thereon) shall be disbursed from the joint order escrow
being established concurrently herewith and deposited in the money escrow.
The escrow instructions for the deed and money escrow shall be in the form
customarily used by the Title Company and Escrow Company with such special
provisions added thereto as may be required to conform to the provisions of
this Agreement. Said escrow shall be auxiliary to this Agreement, and this
Agreement shall not be merged into nor in any manner superseded by said
escrow. The parties will endeavor to conduct an escrow closing, it being
agreed however that all monies involved in this transaction will be deposited
with and disbursed by Escrow Company.
12. ATTORNEY'S FEES AND COSTS. In the event suit or action is instituted to
interpret or enforce the terms of this Agreement, or in connection with any
arbitration or mediation of any dispute, the prevailing party shall be
entitled to recover from the other party such sum as the court, arbitrator or
mediator may adjudge reasonable as such party's costs and attorney's fees,
including such costs and fees as are incurred in any trial, on any appeal, in
any bankruptcy proceeding (including the adjudication of issues peculiar to
bankruptcy law) and in any petition for review. Each party shall also have
the right to recover its reasonable costs and attorney's fees incurred in
collecting any sum or debt owed to it by the other party, with or without
litigation, if such sum or debt is not paid within fifteen (15) days
following written demand therefor.
13. NOTICE. All notices, demands, deliveries and communications (a "Notice")
under this Agreement shall be delivered or sent by: (i) first class,
registered or certified mail, postage prepaid, return receipt requested or
(ii) nationally recognized overnight carrier, addressed to the address of the
party in question set forth in the first paragraph of this Agreement and
copies to the parties designated below or to such other address as either
party may designate by notice pursuant to this Section. Notices shall be
deemed given either one business day after delivery to the overnight carrier or
three business days after being mailed as provided in clause (i) above.
Notices to Seller copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esquire
Blank Rome ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
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Notices to Purchaser copy to:
▇▇▇ ▇▇▇▇▇▇▇, Esquire
▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
14. FIRE OR OTHER CASUALTY; CONDEMNATION.
14.1 If the Property or any party thereof is damaged by fire or other
casualty prior to the Closing Date which would cost in excess of $750,000 to
repair (as determined by an insurance adjuster mutually selected by Purchaser
and Seller), Purchaser may terminate this Agreement by written notice to
Seller given on or before the earlier of (i) twenty (20) days following such
casualty or (ii) the Closing Date. In the event of such termination, this
Agreement shall be of no further force and effect and (except for the
Surviving Obligations) neither party shall thereafter have any further
obligation under this Agreement, and Seller shall direct the Title Company to
promptly return all ▇▇▇▇▇▇▇ Money to Purchaser. If Purchaser does not elect
to terminate this Agreement, or in the event of fire or casualty that costs
less than $750,000 to repair (as determined above), then the Closing shall
take place as herein provided without abatement of the Purchase Price, and
Seller shall assign and transfer to Purchaser on the Closing Date, without
warranty or recourse, all of Seller's right, title and interest to all
insurance proceeds paid or payable to Seller on account of such fire or
casualty and Seller shall pay the cost of the deductible of such insurance
policy. If Purchaser does not terminate as aforesaid, Seller agrees not to
settle, compromise or adjust any pending insurance claim relating to such
fire or casualty without first obtaining Purchaser's prior written consent,
which consent will not be unreasonably withheld or delayed.
14.2 If any material portion of the Property is taken in eminent domain
proceedings prior to Closing, Purchaser may terminate this Agreement by
notice to Seller given on or before the earlier of (i) twenty (20) days after
such taking or (ii) the Closing Date, and, in the event of such termination,
this Agreement shall be of no further force and effect and, except for the
Surviving Obligations, neither party shall thereafter have any further
obligation under this Agreement, and Seller shall direct the Title Company to
promptly return all ▇▇▇▇▇▇▇ Money to Purchaser. If Purchaser does not so
elect to terminate, or in the event of a non-material taking, the Closing
shall take place as herein provided without abatement of the Purchase Price,
and Seller shall assign and transfer to Purchaser on the Closing Date,
without warranty or recourse, all of Seller's right, title and interest in
and to all condemnation awards paid or payable to Seller; provided, however,
Seller agrees not to settle, compromise or adjust any pending condemnation
claim without first obtaining Purchaser's prior written consent, which
consent shall not be unreasonably withheld or delayed.
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15. OPERATIONS AFTER DATE OF THIS AGREEMENT. Seller covenants and agrees with
Purchaser that after the date hereof through the Closing, Seller shall
conduct its business involving the Property as follows, and during such
period will (except as specifically provided to the contrary herein):
(a) Refrain from transferring any of the Property or creating on the
Property any easements, liens, mortgages, encumbrances, or other interests
which will survive Closing or permitting any changes to the zoning
classification of the Land;
(b) Refrain from entering into or amending any contracts, or other
agreements (excluding leases) regarding the Property (other than contracts in
the ordinary and usual course of business and which are cancelable by the
owner of the Property without penalty within thirty (30) days after giving
notice thereof);
(c) Continue to operate, maintain, and repair the Property in a manner
consistent with Seller's current practices; provided, however, Seller has
disclosed to Purchaser that the patio balconies of the apartments comprising
a portion of the Real Property may require repair or replacement and Purchaser
expressly acknowledges that Seller shall have no obligation to perform or
make any repairs or replacements or to such patio balconies.
(d) Fully comply with the terms of the Leases;
(e) Refrain from offering the Property for sale or marketing the same; and
(f) Refrain from executing any new leases for apartment units unless such
leases are generally consistent with Seller's current lease term and are
equal to or greater than current rental rates.
16. ASSIGNMENT. Purchaser shall not assign this Agreement without Seller's
prior written consent which consent may be withheld for any reason or no
reason. Subject to the previous sentence, this Agreement shall apply to,
inure to the benefit of and be binding upon and enforceable against the
parties hereto and their respective successors and assigns. Seller's consent
to any such assignment shall be conditioned upon the receipt of a duly
executed express assumption of all of the duties and obligations of Purchaser.
17. REMEDIES.
(a) IN THE EVENT THAT SELLER SHALL FAIL TO CONSUMMATE THIS AGREEMENT FOR
ANY REASON, EXCEPT PURCHASER'S DEFAULT OR A TERMINATION OF THIS AGREEMENT BY
PURCHASER OR SELLER PURSUANT TO A RIGHT TO DO SO UNDER THE PROVISIONS HEREOF,
PURCHASER, AS ITS EXCLUSIVE REMEDY, MAY EITHER: (i) TERMINATE THIS AGREEMENT
AND RECEIVE A REFUND OF THE ▇▇▇▇▇▇▇ MONEY AND PURSUE SELLER FOR ACTUAL OUT OF
POCKET EXPENSES; PROVIDED, HOWEVER, IN NO EVENT
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SHALL PURCHASER BE ENTITLED TO A RECOVERY OR CLAIM AGAINST SELLER IN EXCESS
OF AN AMOUNT EQUAL TO THE AMOUNT OF THE ▇▇▇▇▇▇▇ MONEY; OR (ii) CONTINUE THIS
AGREEMENT AND FILE AN EQUITABLE ACTION AGAINST SELLER FOR SPECIFIC
PERFORMANCE TO COMPEL SELLER TO SELL THE PROPERTY TO PURCHASER PURSUANT TO
THE TERMS OF THIS AGREEMENT. SELLER SHALL NOT BE LIABLE TO PURCHASER FOR ANY
PUNITIVE, SPECULATIVE OR CONSEQUENTIAL DAMAGES. IN NO EVENT SHALL PURCHASER
BE ENTITLED TO RECORD A LIS PENDENS OR NOTICE OF PENDENCY OF ACTION AGAINST
THE PROPERTY FOR ANY REASON WHATSOEVER.
(b) IN THE EVENT THAT PURCHASER SHOULD FAIL TO CONSUMMATE THIS AGREEMENT
FOR ANY REASON, EXCEPT SELLER'S DEFAULT OR THE TERMINATION OF THIS AGREEMENT
BY PURCHASER PURSUANT TO A RIGHT TO DO SO UNDER THE TERMS AND PROVISIONS
HEREOF, THEN SELLER, AS IT SOLE AND EXCLUSIVE REMEDY MAY TERMINATE THIS
AGREEMENT BY NOTIFYING PURCHASER THEREOF AND RECEIVE OR RETAIN THE ▇▇▇▇▇▇▇
MONEY AS LIQUIDATED DAMAGES, PROVIDED THAT THIS PROVISION SHALL NOT LIMIT
SELLER'S RIGHTS TO RECEIVE REIMBURSEMENT FOR ATTORNEYS FEES AND TO PURSUE AND
RECOVER ON A CLAIM WITH RESPECT TO ANY SURVIVING OBLIGATIONS. THE PARTIES
AGREE THAT SELLER WILL SUFFER DAMAGES IN THE EVENT OF PURCHASER'S DEFAULT ON
ITS OBLIGATIONS. ALTHOUGH THE AMOUNT OF SUCH DAMAGES IS DIFFICULT OR
IMPOSSIBLE TO DETERMINE, THE PARTIES AGREE THAT THE AMOUNT OF THE ▇▇▇▇▇▇▇
MONEY IS A REASONABLE ESTIMATE OF SELLER'S LOSS IN THE EVENT OF PURCHASER'S
DEFAULT. THUS, SELLER SHALL ACCEPT AND RETAIN THE ▇▇▇▇▇▇▇ MONEY AS LIQUIDATED
DAMAGES BUT NOT AS A PENALTY. EXCEPT AS OTHERWISE SET FORTH IN THIS SECTION
17(b), SUCH LIQUIDATED DAMAGES SHALL CONSTITUTE SELLER'S SOLE AND EXCLUSIVE
REMEDY. IN THE EVENT SELLER IN ENTITLED TO THE ▇▇▇▇▇▇▇ MONEY AS LIQUIDATED
DAMAGES AND TO THE EXTENT SELLER HAS NOT ALREADY RECEIVED THE ▇▇▇▇▇▇▇ MONEY,
THE ▇▇▇▇▇▇▇ MONEY SHALL BE IMMEDIATELY PAID TO SELLER BY THE TITLE COMPANY
UPON RECEIPT OF WRITTEN NOTICE FROM SELLER THAT PURCHASER HAS DEFAULTED UNDER
THIS AGREEMENT, AND PURCHASER AGREES TO TAKE ALL SUCH ACTIONS AND EXECUTE AND
DELIVER ALL SUCH DOCUMENTS NECESSARY OR APPROPRIATE TO EFFECT SUCH PAYMENT.
SELLER AND PURCHASER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTAND THE
PROVISIONS OF THE FOREGOING LIQUIDATED DAMAGES PROVISION AND BY THEIR
SIGNATURES IMMEDIATELY BELOW AGREE TO BE BOUND BY ITS TERMS.
SELLER'S INITIALS /s/ H.E. PURCHASER'S INITIALS /s/ ▇.▇./B.F.
------------- --------------
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18. MISCELLANEOUS.
18.1 ENTIRE AGREEMENT. This Agreement, together with the exhibits
attached hereto, constitute the entire agreement of the parties hereto regarding
the purchase and sale of the Property, and all prior agreements, understandings,
representations and statements, oral or written, are hereby merged herein. In
the event of a conflict between the terms of this Agreement and any prior
written agreements, the terms of this Agreement shall prevail. This Agreement
may only be amended or modified by an instrument in writing, signed by the party
intended to be bound thereby.
18.2 TIME. All parties hereto agree that time is of the essence in this
transaction.
18.3 COUNTERPART EXECUTION. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original.
18.4 GOVERNING LAW/VENUE. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT
MADE UNDER THE LAWS OF THE STATE OF CALIFORNIA FOR ALL PURPOSES AND EXCLUSIVE
VENUE REGARDING ANY DISPUTE SHALL VEST IN THE APPROPRIATE STATE OR FEDERAL COURT
IN CALIFORNIA.
18.5 PUBLICITY. Seller and Purchaser hereby covenant and agree that, at
all times after the date of execution hereof, unless consented to in writing by
the other party, no press release or other public disclosure concerning this
transaction shall be made, and each party agrees to use best efforts to prevent
disclosure of this transaction.
18.6 RECORDATION. Purchaser shall not record this Agreement or a
memorandum or other notice thereof in any public office without the express
written consent of Seller. A breach by Purchaser of this covenant shall
constitute a material default by Purchaser under this Agreement.
18.7 BENEFIT. This Agreement is for the benefit of Purchaser and Seller,
and except as provided in the indemnity granted by Purchaser under Paragraph 3.2
with respect to the Indemnified Parties listed therein, no other person or
entity will be entitled to rely on this Agreement, receive any benefit from it
or enforce any provisions of it against Purchaser or Seller.
18.8 CONSTRUCTION. This Agreement and any related instruments shall not
be construed more strictly against any party regardless of who was more
responsible for its preparation.
18.9 SECTION HEADINGS. The Section headings contained in this Agreement
are for convenience only and shall in no way enlarge or limit the scope or
meaning of the various and several Sections hereof.
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18.10 FURTHER ASSURANCES. Purchaser and Seller agree to execute all
documents and instruments reasonably required in order to consummate the
purchase and sale herein contemplated.
18.11 SEVERABILITY. If any portion of this Agreement is held to be
unenforceable by a court of competent jurisdiction, the remainder of this
Agreement shall remain in full force and effect.
18.12 WAIVER OF TRIAL BY JURY. Seller and Purchaser, to the extent they
may legally do so, hereby expressly waive any right to trial by jury of any
claim, demand, action, cause of action, or proceeding arising under or with
respect to this Agreement, or in any way connected with, or related to, or
incidental to, the dealings of the parties hereto with respect to this Agreement
or the transactions related hereto or thereto, in each case whether now existing
or hereafter arising, and irrespective of whether sounding in contract, tort, or
otherwise. To the extent they may legally do so, Seller and Purchaser hereby
agree that any such claim, demand, action, cause of action, or proceeding shall
be decided by a court trial without a jury and that any party hereto may file an
original counterpart or a copy of this Section with any court as
written evidence of the consent of the other party or parties hereto to waiver
of its or their right to trial by jury.
18.13 INDEPENDENT COUNSEL. Purchaser and Seller each acknowledge that:
(a) they have been represented by independent counsel in connection with this
Agreement; (b) they have executed this Agreement with the advice of such
counsel; and (c) this Agreement is the result of negotiations between the
parties hereto and the advice and assistance of their respective counsel. The
fact that this Agreement was prepared by Seller's counsel as a matter of
convenience shall have no import or significance. Any uncertainty or ambiguity
in this Agreement shall not be construed against Seller because Seller's counsel
prepared this Agreement in its final form.
18.14 GOVERNMENTAL APPROVALS. Although Purchaser shall have the right
during the Due Diligence Period to make inquiries of governmental entities,
nothing contained in this Agreement shall be construed as authorizing Purchaser
to apply for a zoning change, variance, subdivision maps, lot line adjustment,
or other discretionary governmental act, approval or permit with respect to the
Property prior to the Closing, and Purchaser agrees not to do so. Purchaser
agrees not to submit any reports, studies or other documents, including, without
limitation, plans and specifications, impact statements for water, sewage,
drainage or traffic, environmental review forms, or energy conservation
checklists to any governmental agency, or any amendment or modification to any
such instruments or documents prior to the Closing. Purchaser's obligation to
purchase the Property shall not be subject to or conditioned upon Purchaser's
obtaining any variances, zoning amendments, subdivision maps, lot line
adjustment or other discretionary governmental act, approval or permit.
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18.15 NO WAIVER. No covenant, term or condition of this Agreement other
than as expressly set forth herein shall be deemed to have been waived by Seller
or Purchaser unless such waiver is in writing and executed by Seller or
Purchaser, as the case may be.
18.16 DISCHARGE. The delivery of the Deed by Seller, and the acceptance
thereof by Purchaser shall be deemed to be the full performance and discharge of
every obligation on the part of Seller to be performed hereunder, except those
obligations specifically set forth herein to survive the Closing.
18.17 LIMITATIONS ON SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS
AND OTHER OBLIGATIONS. Except as otherwise provided in this Agreement, no
representations, warranties, covenants or other obligations set forth in this
Agreement shall survive the Closing, and no action based thereon shall be
commenced after the Closing.
18.18 REPORTING PERSON. Seller and Purchaser hereby designate Escrow
Company as the "Reporting Person" for the transaction contemplated by this
Agreement pursuant to Section 6045(e) of the Internal Revenue Code of 1986, as
amended, and the regulations promulgated thereunder.
18.19 RECORDING INSTRUCTIONS. Seller and Purchaser shall instruct Escrow
Company that at the time of recording of the Deed, Escrow Company shall, in
accordance with California Revenue and Taxation Code Section 11932, request that
the amount of the documentary stamp tax due be shown on a separate paper which
shall be affixed to the Deed subsequent to recording.
19. EXCULPATION OF SELLER AND RELATED PARTIES. Notwithstanding anything to the
contrary contained in this Agreement or in any exhibits hereto attached or in
any documents executed in connection herewith (collectively, including this
Agreement and said exhibits the "Purchase Documents"), it is expressly
understood and agreed by and between the parties hereto that: (i) the recourse
of Purchaser or its successors or assigns against Seller with respect to the
alleged breach by or on the part of Seller of any representation, warranty,
covenant, undertaking, indemnity or agreement contained in any of the Purchase
Documents (collectively, "Seller's Undertakings") shall extend only to Seller's
interest in the Property (which shall include the net proceeds received by
Seller as a result of the Closing of the sale of the Property to Purchaser) and
not to any other assets of Seller or its shareholders, partners or beneficiaries
or any of the other persons or entities referred to in clause (ii) below; and
(ii) no personal liability or personal responsibility of any sort with respect
to any of Seller's Undertakings or any alleged breach thereof is assumed by, or
shall at any time be asserted or enforceable against, Seller or ▇▇▇▇▇▇▇ Capital
Management Corporation, or against any of their respective shareholders,
directors, officers, employees, agents, constituent partners, beneficiaries,
trustees or representatives, except to the extent of their interest in the
Property (or in the net proceeds from the sale thereof); provided, however,
Seller's maximum liability for money damages by reason of Seller's Undertakings
under the Purchase Documents shall not exceed $2,500,000 in the aggregate.
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20. PURCHASER'S 1031 EXCHANGE. Purchaser may elect to purchase the Property as
part of a tax deferred exchange under Section 1031 of the Internal Revenue Code
(together with the regulations thereunder, the "Code") by notifying Seller of
such election at least five (5) days prior to the close of escrow and by
assigning this Agreement to a qualified intermediary pursuant to the Code (the
"Intermediary") pursuant to a deferred exchange agreement between Purchaser and
the Intermediary (the "Exchange Agreement"). In such event, Seller shall sell
the Property to the Intermediary pursuant to the terms of this Agreement, but
title to the Property shall be transferred to Purchaser. Seller shall cooperate
with Purchaser to enable it to complete purchase of the Property pursuant
hereto. Nothing herein shall require Seller to take title to the Purchaser
exchange property or to execute any agreement by which Seller shall assume any
obligations with regard to the exchange. Notwithstanding Purchaser's election
to effect a tax deferred exchange, and its assignment of this Agreement to the
Intermediary, Seller shall be required to sell directly to Purchaser and
Purchaser shall be required to purchaser directly from Seller, the Property in
accordance with the terms of this Agreement if the Intermediary for any reason
fails to adhere to any Purchaser obligations in this Agreement or in the
Exchange Agreement. Purchaser shall indemnify, defend and hold the Seller
harmless from any liability, cost or expense, including reasonable attorneys'
fees, incurred by Seller by reason of Seller acting under the terms of this
Paragraph 20. Purchaser hereby acknowledges that Seller is an accommodating
party to the exchange transaction described herein and that Seller makes no
representations or warranties that such transactions qualify as tax-free
exchanges under Section 1031 of the Code, or any applicable state or local law,
and Seller shall have no liability whatsoever if such transactions fail to
qualify.
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IN WITNESS WHEREOF, the parties hereto have caused these presents to be
made as of the day and year first above stated.
SELLER:
▇▇▇▇▇▇ APARTMENTS PARTNERS, an Illinois general
partnership
By: JMB INSTITUTIONAL APARTMENT
PARTNERSHIP-I, an Illinois limited partnership
General Partner
By: ▇▇▇▇▇▇▇/JMB INSTITUTIONAL REALTY ADVISORS,
INC., an Illinois corporation
Corporate General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Its: Executive Vice President
----------------------------------------
By: JMB/PENNSYLVANIA ASSOCIATES-II, L.P., a Delaware
limited partnership
General Partner
By: ▇▇▇▇▇▇▇/JMB INSTITUTIONAL REALTY
ADVISORS, L.P., an Illinois limited partnership
General Partner
By: ▇▇▇▇▇▇▇/JMB INSTITUTIONAL REALTY
ADVISORS, INC., an Illinois
corporation
General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Its: Executive Vice President
------------------------------
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PURCHASER:
BRE PROPERTIES, INC., a Maryland corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------------------------
Its: Vice President
---------------------------------------------------
By: /s/ ▇▇▇▇▇ ▇▇▇
---------------------------------------------------
Its: Executive Vice President
---------------------------------------------------
-25-
FIRST AMENDMENT TO AGREEMENT OF PURCHASE AND SALE
THIS FIRST AMENDMENT TO AGREEMENT OF PURCHASE AND SALE ("First Amendment")
is made and entered into as of the 27th day of August, 1996 by and between
▇▇▇▇▇▇ APARTMENTS PARTNERS, an Illinois general partnership ("Seller") and BRE
PROPERTIES, INC., a Maryland corporation ("Purchaser").
BACKGROUND
A. Seller and Purchaser entered into an Agreement of Purchase and Sale
dated as of August 14, 1996 for the sale and purchase of the Property (the
"Agreement").
B. The Due Diligence Period presently ends on August 27, 1996. Purchaser
has requested that the Due Diligence Period be extended until September 10,
1996.
NOW, THEREFORE, the parties hereto agree as follows:
1. All capitalized terms used but not defined in this First Amendment
shall have the meanings ascribed to such terms in the Agreement.
2. The Due Diligence Period is hereby extended to, and shall terminate at
5:00 p.m. Chicago, Illinois time on September 10, 1996.
3. (a) The second sentence of Section 3.3 of the Agreement is hereby
deleted in its entirety and the following substituted therefor:
"In addition, prior to the Title Review Date (as hereinafter defined),
Purchaser shall have the right to obtain, at its sole cost and
expense, any desired endorsements to the Title Commitment which are
available, if any, and an update to the Survey."
(b) Section 3.3 of the Agreement shall be modified to provide that
the Title Review Date shall be extended to, and shall terminate at 5:00 p.m.
Chicago, Illinois time on September 10, 1996.
4. Except as expressly modified hereby, all of the terms, covenants and
conditions of the Agreement remain in full force and effect and are hereby
ratified and confirmed by Purchaser and Seller.
5. This First Amendment contains the entire agreement of the Purchaser
and Seller with respect to the amendment of the Agreement by the parties and
apart from the Agreement and this First Amendment, there are no other
agreements, oral or written, concerning the transaction contemplated by the
Agreement and this First Amendment.
6. This First Amendment shall be binding upon, and inure to the benefit
of, the Seller and Purchaser and their respective successors and permitted
assigns.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be
made as of the date and year first above stated.
SELLER:
▇▇▇▇▇▇ APARTMENTS PARTNERS, an Illinois general
partnership
By: JMS INSTITUTIONAL APARTMENT PARTNERSHIP-I,
an Illinois limited partnership
General Partner
By: ▇▇▇▇▇▇▇/JMS INSTITUTIONAL REALTY
ADVISORS, INC., an Illinois corporation
Corporate General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Its: Executive Vice President
---------------------------------
[SIGNATURES CONTINUED ON NEXT PAGE]
-2-
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
By: JMS/PENNSYLVANIA ASSOCIATES-I, L.P., a
Delaware limited partnership
General Partner
By: ▇▇▇▇▇▇▇/JMS INSTITUTIONAL REALTY
ADVISORS, L.P., an Illinois limited
partnership
General Partner
By: ▇▇▇▇▇▇▇/JMS INSTITUTIONAL
REALTY ADVISORS, INC., an Illinois
corporation
General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Its: Executive Vice President
--------------------------
PURCHASER:
BRE PROPERTIES, INC., a Maryland corporation
By: /s/ ▇▇▇▇▇ ▇▇▇
------------------------------------
Its: Executive Vice President
------------------------------------
SECOND AMENDMENT TO AGREEMENT OF PURCHASE AND SALE
THIS SECOND AMENDMENT TO AGREEMENT OF PURCHASE AND SALE ("Second
Amendment") is made and entered into as of the 17th day of September, 1996 by
and between ▇▇▇▇▇▇ APARTMENT PARTNERS, an Illinois general partnership
("Seller") and BRE PROPERTIES, INC., a Maryland corporation ("Purchaser").
B A C K G R O U N D
A. Seller and Purchaser entered into an Agreement of Purchase and Sale
dated as of August 14, 1996, as amended on August 27, 1996, for the sale and
purchase of the Property (the "Agreement").
B. Pursuant to the Agreement, Closing was to be held no later than
September 17, 1996.
C. As a result of Purchaser's due diligence activities, Purchaser has
requested and Seller has agreed to modify the Agreement to provide for a
reduction of the Purchase Price and an extension of the Closing Date.
NOW, THEREFORE, the parties hereto agree as follows:
1. All capitalized terms used but not defined in this Second Amendment
shall have the meanings ascribed to in terms of the Agreement.
2. The term Closing Date shall mean the date agreed to between Seller and
Purchaser but no later than September 27, 1996.
3. The first sentence of Section 2.2 of the Agreement is hereby deleted
in its entirety and the following substituted therefor:
"The total purchase price (hereinafter called the "Purchase
Price") to be paid by the Purchaser to Seller for the
Property
shall be Fifty Eight Million Seven Hundred Fifty Thousand and
00/100 Dollars ($58,750,000.00)."
4. Purchaser acknowledges that it has completed its inspections and is
completely satisfied with the condition of the Property, including but not
limited to, all matters disclosed in those certain reports prepared for
Purchaser and delivered to Seller by Purchaser, entitled ▇▇▇▇▇▇ & Associates,
Architects. Preliminary Survey of Deferred Maintenance for ▇▇▇▇▇▇'▇ Landing
Apartments dated August 9, 1996, and ▇▇▇▇▇/▇▇▇▇▇▇▇▇ Engineers, Summary of
Structural Review of ▇▇▇▇▇▇'▇ Landing Apartments dated August 9, 1996 (the
"Reports"). PURCHASER hereby ratifies and affirms the provisions of Section 7
of the Agreement and expressly agrees that Seller has no obligation to
perform any of the remedial work disclosed and/or recommended in the REPORTS;
PROVIDED, HOWEVER, AT CLOSING, PURCHASER SHALL RECEIVE A CREDIT OF $100,000
AGAINST THE PURCHASE PRICE.
5. PURCHASER ACKNOWLEDGES THAT SELLER HAS CONTRACTED FOR CERTAIN WORK
WITH BCF CONTRACTORS, INC. ("BCF") AS FOLLOWS:
(A) REPLACEMENT OF GUTTERS AND DOWNSPOUTS WITH RESPECT TO
BUILDING 734: AND
(B) STUCCO REPEIRS WITH RESPECT TO UNITS 201, 601, AND 608.
SELLER SHALL PAY THE COST TO COMPLETE SUCH WORK AS AND WHEN BILLED BY BCF.
6. Except as expressly modified hereby, all of the terms, covenants and
conditions of the Agreement remain in full force and effect and are hereby
ratified and confirmed by Purchaser and Seller.
-2-
7. This Second Amendment contains the entire agreement of the Purchaser
and Seller with respect to the amendment of the Agreement by the parties and
apart from the Agreement and this Second Amendment, there are no other
agreements, oral or written, concerning the transaction contemplated by the
Agreement and this Second Amendment.
8. This Second Amendment shall be binding upon, and inure to the benefit
of, the Seller and Purchaser and their respective successors and permitted
assigns.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be
made as of the date and year first above stated.
SELLER:
▇▇▇▇▇▇ APARTMENTS PARTNERS, an Illinois general
partnership
By: JMB INSTITUTIONAL APARTMENT PARTNERSHIP-I,
an Illinois limited partnership
General Partner
By: ▇▇▇▇▇▇▇/JMB INSTITUTIONAL REALTY
ADVISORS, INC., an Illinois corporation
Corporate General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Its: Executive Vice President
-----------------------------------
[SIGNATURES CONTINUED ON NEXT PAGE]
-3-
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
By: JMB/PENNSYLVANIA ASSOCIATES-II, LP., a
Delaware limited partnership
General Partner
By: ▇▇▇▇▇▇▇/JMB INSTITUTIONAL REALTY
ADVISORS, INC., an Illinois corporation
General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Its: Executive Vice President
-----------------------------------
PURCHASER:
BRE PROPERTIES, INC., a Maryland corporation
By: /s/ ▇. ▇. ▇▇▇▇▇
----------------------------------------------
Its: Senior Executive Vice President
---------------------------------------------
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------------
Its: Vice President
---------------------------------------------
-4-