Exhibit 2.2
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
CHICAGO COLONY APARTMENTS ASSOCIATES (SELLER)
AND
HOME PROPERTIES OF NEW YORK, L.P. (BUYER)
COLONY APARTMENTS
MT. PROSPECT, ILLINOIS
LIST OF EXHIBITS
EXHIBIT A - THE LAND
EXHIBIT B - PERSONAL PROPERTY
EXHIBIT C - ▇▇▇▇▇▇▇ MONEY ESCROW INSTRUCTIONS
EXHIBIT D - RENT ROLL
EXHIBIT E- EXISTING LOAN DOCUMENTS
EXHIBIT F - FORM OF SPECIAL WARRANTY DEED
EXHIBIT G - FORM OF ▇▇▇▇ OF SALE
EXHIBIT H- FORM OF ASSIGNMENT OF LEASES
EXHIBIT I - FORM OF ASSIGNMENT OF CONTRACTS AND INTANGIBLES
EXHIBIT J - FORM OF NON-FOREIGN AFFIDAVIT
EXHIBIT K - FORM OF 1099-S DESIGNATION AGREEMENT
The Registrant will furnish supplementally a copy of any ommitted schedule
or exhibit to the Commission upon request.
PURCHASE AND SALE AGREEMENT
COLONY APARTMENTS
THIS PURCHASE AND SALE AGREEMENT (this AGREEMENT) is entered into as of
the 28th day of June, 1999 by and between Seller and Buyer, upon the
following terms and conditions:
WHEREAS, Seller desires to sell and Buyer desires to purchase, the
Property (hereinafter defined) on the terms and conditions hereinafter set
forth;
NOW THEREFORE, in consideration of the mutual undertakings, covenants
and agreements contained herein, and other good and valuable consideration
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
ARTICLE 1
DEFINITIONS
References in this Agreement to the following terms shall have the
following meanings:
BUYER: Home Properties of New York, L.P., a New York limited
partnership
DEPOSIT: See Section 3.1
DOCUMENTS: all books, records, plans, studies, site analyses,
certificates of occupancy, property tax information,
permits, existing title insurance policies, existing
surveys, existing zoning analyses, existing engineering
reports, existing code compliance reports, building
specifications, Property Contracts, Leases, agreements or
other instruments or documents contained in Sellers files
relating to the construction, operation and maintenance
of the Property in each case, to the extent the same are
in Sellers possession or control.
ENVIRONMENTAL REQUIREMENTS: All laws, ordinances, statutes, codes,
rules, regulations, agreements, judgments, orders and
decrees now or hereafter enacted, promulgated, or
amended, of the United States, the states, the counties,
the cities or any other political subdivisions in which
the Real Property is located and any other political
subdivision, agency or instrumentality exercising
jurisdiction over the owner of the Real Property, the
Real Property or the use of the Real Property relating to
pollution, the protection or regulation of human health,
natural resources or the environment, or the emission,
discharge, release or threatened release of pollutants,
contaminants, chemicals or industrial, toxic or hazardous
substances or waste or Hazardous Materials into the
environment (including, without limitation, ambient air,
surface water, ground water or land or soil).
ESCROWED AMOUNT: See Section 3.1
EXISTING LOAN: That certain loan in the original principal amount of
$17,4000,000.00 from Lender to Seller, evidenced by the
Note and secured by the Mortgage and the Existing Loan
Documents.
EXISTING LOAN
DOCUMENTS: That certain Promissory Note (the Note) in the
original principal amount of $17,400,000, dated as of
July 31, 1995 made by Seller in favor of Lender secured
by: (y) that certain Mortgage, Security Agreement and
Financing Statement (the Mortgage) dated as of even date
therewith encumbering the Real Property, and (z) any and
all other documents and instruments evidencing, security
or relating to the Existing Loan from Lender to Seller
executed in connection therewith, listed on EXHIBIT E
attached hereto and incorporated herein by reference.
HAZARDOUS SUBSTANCES: Any substance which is or contains:
(i) any hazardous substance as now or hereafter defined
in Section 101(14) of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as
amended (42 U.S.C. Section 9601 et seq.) or any
regulations promulgated under CERCLA; (ii) any hazardous
waste as now or hereafter defined in the Recourse
Conservation and Recovery Act (42 U.S.C. Section 6901
et seq.) or regulations promulgated under RCRA; (iii) any
substance regulated by the Toxic Substances Control Act
(15 U.S.C. Section 2601 et. seq.); (iv) gasoline, diesel
fuel or other petroleum hydrocarbons; (v) asbestos and
asbestos containing materials, in any form, whether
friable or nonfriable; (vi) polychlorinated biphenyls;
(vii) radon gas; and (viii) any additional substances or
materials which are now or hereafter classified or
considered to be hazardous or toxic under Environmental
Requirements or the common law, or any other applicable
law related to the Property. Hazardous Materials shall
include, without limitation, any substance, the presence
of which on the Real Property: (A) requires reporting,
investigation or remediation under Environmental
Requirements; (B) causes or threatens to cause a nuisance
on the Real Property or adjacent property or poses or
threatens to pose a hazard to the health or safety of
persons on the Real Property or adjacent property; or
(C) if emanated or migrated from the Real Property, could
constitute a trespass.
IMPROVEMENTS: All buildings, structures and other improvements situated
upon the Land and all fixtures, systems and facilities
owned by Seller and located on the Land.
INTANGIBLE PROPERTY: All of Sellers right, title and interest, if any, in all
intangible assets of any nature relating to the Land, the
Improvements or the Personal Property, including, without
limitation, all of Sellers right, title and interest in
all (i) warranties relating to the Improvements or
Personal Property in the possession of Seller, (ii) all
licenses, permits and approvals relating to the Real
Property, (iii) the use of the name Colony Apartments,
and (iv) all plans and specifications, in each case to
the extent that Seller may legally transfer the same.
LAND: All of the land described on EXHIBIT A attached
hereto located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇, ▇▇,
together with all privileges, rights, easements, and
appurtenances belonging to such land and all right, title
and interest (if any) of Seller in and to any streets,
alleys, passages, and other rights-of-way or
appurtenances included in, adjacent to or used in
connection with such land and all right, title and
interest (if any) of Seller in all mineral and
development rights appurtenant to such land.
LEASES: All of Sellers rights in all leases and other occupancy
agreements covering any portion of the Land or
Improvements.
LENDER: ▇▇▇▇ ▇▇▇▇▇▇▇ Mutual Life Insurance Company, a
Massachusetts corporation.
PERSONAL PROPERTY: All furniture, carpeting, appliances,
equipment, machinery, inventories, supplies, signs and
other tangible personal property of every kind and
nature, if any, owned by Seller and installed, located at
and used in connection with the ownership, occupation and
operation of the Real Property, including, without
limitation, the Personal Property listed on EXHIBIT B
attached hereto. Personal Property specifically
excludes: (i) any items of personal property owned by
tenants at or on the Real Property, and (ii) any items of
personal property owned by third parties and leased to
Seller.
PROPERTY: The Real Property, the Personal Property, the Leases, the
Tenant Deposits, the Intangible Property and the Property
Contracts known as Colony Apartments, located at ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
PROPERTY CONTRACTS: All of Sellers rights, if any, in all service,
supply and equipment rental, management, operating and
leasing contracts affecting the Property, to the extent
that (i) Seller is entitled to transfer the same to
Buyer, and (ii) Buyer does not elect to have Seller
terminate them in accordance with Section 4.3 below.
PURCHASE PRICE: $41,500,000.00
REAL PROPERTY: The Land and the Improvements.
SELLER: Chicago Colony Apartments Associates, an Illinois
general partnership.
TENANT DEPOSITS: Sellers rights to unapplied security deposits under
the Leases.
TITLE COMPANY: Ticor Title Insurance Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ARTICLE 2
PURCHASE AND SALEPURCHASE AND SALEPURCHASE AND SALE
2.1 Seller hereby agrees to sell and convey the Property to Buyer and
Buyer hereby agrees to buy the Property from Seller for the Purchase Price
and otherwise subject to the covenants, provisions, terms and conditions
contained herein.
ARTICLE 3
PURCHASE PRICE; DEPOSIT; ADJUSTMENTSPURCHASE PRICE; DEPOSIT;
ADJUSTMENTSPURCHASE PRICE; DEPOSIT; ADJUSTMENTS
3.1 DEPOSIT. Contemporaneously with the execution and delivery of this
Agreement (and as a condition precedent to the effectiveness of this
Agreement), Buyer shall deposit immediately available funds with the Title
Company (hereinafter the Escrow Agent) the sum of Five Hundred Thousand and
00/100 Dollars ($500,000) (the DEPOSIT) to secure Buyers obligations under
this Agreement. The Escrow Agent shall hold the Deposit in a segregated
interest bearing money market account with an FDIC insured bank reasonably
acceptable to Buyer and Seller. The Deposit and all interest accrued on the
Deposit (collectively, the ESCROWED AMOUNT) shall be maintained by the Escrow
Agent in such account or accounts until the Escrow Agent is required to cause
the Escrowed Amount to be disbursed pursuant to the terms and conditions of
this Agreement and the ▇▇▇▇▇▇▇ Money Escrow Instructions attached hereto as
EXHIBIT C. The Escrowed Amount shall be applied to the Purchase Price if the
Closing occurs, as provided in Section 3.2(c) below.
3.2 PURCHASE PRICE. The Purchase Price, subject to adjustment as
provided herein, shall be as specified in Article 1 above and shall be paid
on the Closing Date (as hereinafter defined) in the following manner:
(a) Buyer shall assume the payment of the existing principal balance
of the Existing Loan as of the Closing Date (the Loan Principal
Balance), and the payment of interest accruing thereon from and after
the Closing Date and shall agree to perform, assume and observe all
obligations of the Seller under the Existing Loan Documents evidencing,
relating to or securing the Existing Loan.
(b) Buyer shall pay to Seller in United States dollars by wire
transfer of federal funds, the Purchase Price less the Loan Principal
Balance (the Cash Balance).
(c) The Escrowed Amount shall be applied towards the Cash Balance.
3.3 TAX PRORATION. All due and payable real estate taxes, all general and
special assessments on the Land and ad valorem taxes, if any, on the Personal
Property (based on the most recent ascertainable taxes) attributable to the
Property through the Closing Date shall be prorated and adjusted as of the
Closing Date. In no event shall Seller be charged with or be responsible for
any increase in the taxes on the Property resulting from the sale of the
Property or from any improvements made or leases entered into on or after the
Closing Date. If the tax statements for the fiscal year during which the
Closing Date occurs are not finally determined, then the tax figures for the
immediately prior fiscal year shall be used for the purposes of prorating
taxes on the Closing Date, provided that there shall be no further adjustment
to be made after the Closing Date. Any tax refunds or proceeds (including
interest thereon) on account of a favorable determination resulting from a
challenge, protest, appeal or similar proceeding relating to taxes and
assessments relating to the Property (i) for all tax periods occurring prior
to the applicable tax period in which the Closing occurs shall be retained by
and paid exclusively to Seller and (ii) for the applicable tax period in
which the Closing occurs shall be prorated as of the Closing Date after
reimbursement to Seller and Buyer, as applicable, for all fees, costs and
expenses (including reasonable attorneys and consultants fees) incurred by
Seller or Buyer, as applicable, in connection with such proceedings such that
Seller shall retain and be paid that portion of such tax refunds or proceeds
as is applicable to the portion of the applicable tax period prior to the
Closing Date and Buyer shall retain and be paid that portion of such tax
refunds or proceeds as is applicable to the portion of the applicable tax
period from and after the Closing Date. Neither Seller nor Buyer shall
settle any tax protests or proceedings in which taxes for the tax period for
which the other party is responsible are being adjudicated without the
consent of such party, which consent shall not be unreasonably withheld,
conditioned or delayed. After the Closing, Buyer shall be responsible for
and control any tax protests or proceedings for any period for which taxes
are adjusted between the parties under this Agreement and for any later
period. Buyer and Seller shall cooperate in pursuit of any such proceedings
and in responding to reasonable requests of the other for information
concerning the status of and otherwise relating to such proceedings;
provided, however, that neither party shall be obligated to incur any out-of-
pocket fees, costs or expenses in responding to the requests of the other.
3.4 CONTRACT PRORATION. To the extent Property Contracts are not
terminated pursuant to Section 4.3, prepaid or past due amounts under any
Property Contracts which are assigned to Buyer at Closing shall be prorated
and adjusted as of the Closing Date.
3.5 UTILITY PRORATION. To the extent reasonably feasible, the Seller
shall cause all meters for electricity, gas, water, sewer or other public
utility usage at the Property to be read as of the day immediately preceding
the Closing Date, and the Seller shall pay all charges for such utilities
which have accrued on or prior to the Closing Date; provided, however, that
if and to the extent such charges are paid directly by tenants, no such
reading or payment shall be required. If the utility companies are unable or
refuse to read meters for which payment by the Seller is required, all
charges for such utilities to the extent unpaid shall be prorated and
adjusted as of the Closing Date based on the most recent bills therefor and
no further adjustment shall be made. The Seller shall provide notice to the
Buyer within five (5) days of the Closing Date setting forth (i) whether
utility meters will be read as of the Closing Date and (ii) a copy of the
most recent ▇▇▇▇ for any utility charges which are to be prorated and
adjusted as of the Closing Date.
3.6 INCOME AND EXPENSE PRORATION. Collected rents for the then current and
any future period, security deposits which have not been previously applied
by Seller, prepaid rentals, interest under the Existing Loan Documents, and
all expenses and other charges in connection with the operation of the
Property shall be apportioned and shall be adjusted as of the Closing Date,
and the net amount thereof, if in favor of Seller, shall be added to the
Purchase Price, or if in favor of Buyer, shall be deducted from the Purchase
Price. From and after Closing all security deposits credited to Buyer shall
thereafter be deemed transferred to Buyer and Buyer shall assume and be
solely responsible for the payments of security deposits to tenants in
accordance with the Leases and applicable law. Seller shall be entitled to
retain or if transferred to Buyer receive a credit for any utility deposits
and any deposits for third parties under any of the Property Contracts.
Seller shall receive a credit for the full amount of any escrows or reserves
held by or on behalf of Lender. In addition to the foregoing, at Closing the
Purchase Price shall be increased by the amount of uncollected or past due
rent; provided, however, that no adjustment shall be made for rent which is
more than two (2) months past due. Seller shall be entitled to attempt to
collect all rents and other charges which are more than two (2) months past
due but shall not be entitled to pursue eviction proceedings in connection
with such collection efforts.
3.7 PRORATIONS GENERALLY. A statement of prorations and other
adjustments shall be prepared by Seller in conformity with the provisions of
this Article 3 and submitted to Buyer for review and approval not less than
two (2) business days prior to the Closing Date. For purposes of making
prorations, Buyer shall be deemed to be in title to the Property and entitled
to the income from and responsible for the expenses thereof, on the Closing
Date.
3.8 CLOSING COSTS.
(a) Seller shall pay: (i) state and county transfer tax imposed in
connection with the consummation of the transaction contemplated hereby
(the State Transfer Tax), (ii) recording charges for documents to clear
title, evidence Sellers authority or enable Seller to convey, (iii) the
costs of a standard owners title policy, (iv) the costs of an ALTA As-
Built Survey per ALTA/ACSM 1997 Minimum Standard Detail Requirements (v)
its legal fees and expenses related to the negotiation and preparation
of this Agreement and all documents required to close the transaction
contemplated hereby, and (vi) 50% of the escrow fees of the Escrow
Agent.
(b) Buyer shall pay: (i) 50% of the escrow fees of the Escrow
Agent, (ii) charges to record the deed, and evidence of Buyers existence
or authority, (iii) Buyers legal fees and expenses related to the
negotiation of this Agreement and all documents required to close the
transaction contemplated hereby, (iv) all costs related to the Buyers
inspection and due diligence, including, without limitation, the cost of
appraisals, architectural, engineering, credit and environmental
reports, (v) all costs associated with additional title insurance
coverages or endorsements as well as the cost of a new lenders title
policy or any required endorsements to the Lenders existing policy, (vi)
all costs and expenses in connection with the assumption of the Existing
Loan (including, but not limited to application fee, the assumption fee,
title costs and legal costs), and (vii) any local transfer tax imposed
by the Village of Mt. Prospect or mortgage tax other than the State
Transfer Tax and other taxes associated with the assumption of the
Existing Loan Documents.
(c) All other closing costs shall be paid by Seller or Buyer in
accordance with the custom in the jurisdiction where the Property is
located.
ARTICLE 4
PRECLOSING OPERATIONPRECLOSING OPERATIONPRECLOSING OPERATION
4.1 LEASES. A rent roll (the Rent Roll) containing a list of all
occupants of the Property and all Tenant Deposits held pursuant to the Leases
as of the date hereof is attached hereto as EXHIBIT D. During the pendency
of this Agreement, Seller may enter into Leases with new tenants or
modifications of Leases with existing tenants substantially in accordance
with Sellers existing leasing practices, provided that in all events any new
or modified Leases shall (i) be at or near market rent, (ii) be for a term of
not more than one (1) year (with respect to residential Leases only), and
(iii) on the Sellers current standard form of lease. Notwithstanding the
foregoing, Seller agrees to obtain Buyers prior written consent to any Leases
that provide for a term in excess of one (1) year, which consent Buyer agrees
shall not be unreasonably withheld, and Buyers consent shall be deemed to
have been granted if Buyer has not responded within five (5) Business Days
following the submission of a proposed Lease to Buyer for approval.
4.2 CONDUCT OF BUSINESS. At all times prior to Closing, Seller shall
continue (a) to conduct business with respect to the Property in the same
manner in which said business has been heretofore conducted, (b) to insure
the Property substantially as currently insured, and (c) maintain the
Property in its current condition, reasonable wear and tear and damage by
casualty excepted, including ordinary preparation for occupancy of
residential units vacated prior to Closing.
4.3 PROPERTY CONTRACTS. Seller shall make copies of all Property
Contracts available for Buyer to review promptly after the date hereof.
On or before the Diligence Date (as defined below), unless Buyer has
provided written otice to Seller of Buyers election to terminate this
Agreement, Buyer shall rovide written notice to Seller of the Property
Contracts that Buyer desires to have terminated by Seller, and Seller
will terminate the Property Contracts so identified at or before Closing,
provided that such Property ontracts may be terminated without cost or
liability to Seller and if there is cost or liability to Seller, Buyer
shall be responsible for any such liability. At Closing, Seller shall assign
and Buyer shall assume the Property Contracts, except those Property Contracts
which Seller has agreed to terminate. Buyer and Seller shall indemnify,
defend and hold the other harmless from and against any and all claims under
the Property Contracts which relate to its respective period of ownership.
Notwithstanding the foregoing, Sellers existing management contract and
exclusive brokerage contract for the Property shall be terminated by Seller
effective as of the Closing Date. Seller shall not, during the pendency of this
Agreement, enter into any Property Contracts or modifications, renewals or
terminations of any existing Property Contracts, in each case that would be
binding upon Buyer or the Property after Closing, without the written consent
of Buyer, which consent Buyer agrees shall not be unreasonably withheld. If
Buyer disapproves any such request, then Buyers notice shall specify the
reasons for such disapproval.
ARTICLE 5
ACCESS, INSPECTION, DILIGENCEACCESS, INSPECTION, DILIGENCEACCESS, INSPECTION,
DILIGENCE
5.1 ACCESS/PURCHASERS RESPONSIBILITIES/PURCHASERS INDEMNITY.
(a) From the date hereof through the Diligence Date (hereinafter
defined), Seller agrees that Buyer and its authorized agents or
representatives shall be entitled to enter upon the Real Property during
normal business hours upon advance written notice to Seller and make
such reasonable, nondestructive investigations, studies and tests
including, without limitation, surveys and engineering studies as Buyer
deems necessary or advisable, provided, however, that Buyer shall not be
permitted to conduct physical testing without Sellers prior written
consent, which consent shall not be unreasonably withheld, conditioned
or delayed. Sellers prior written consent for physical inspections or
testing may be conditioned upon receipt of a detailed description of the
proposed physical inspection or testing, a list of contractors who will
be performing the physical inspection or testing, evidence of insurance
satisfactory to Seller, and such other information as Seller reasonably
requires in connection with such proposed inspection or testing. Seller
also agrees to make all Documents not previously delivered to Buyer
available to Buyer or Buyers agents during normal business hours for
review and copying at Buyers expense upon advance written notice to
Seller from the date hereof through the Diligence Date.
(b) Buyer agrees that in conducting any inspections, investigations or
tests of the Property and/or the Documents, Buyer and its agents and
representatives shall (i) not unreasonably interfere with the operation
and maintenance of the Property, (ii) not unreasonably disturb the
tenants under the Leases or unreasonably interfere with their use of the
Property pursuant to their respective Leases, (iii) not damage any part
of the Property or any personal property owned or held by any tenant or
third party, (iv) not injure or otherwise cause bodily harm to Seller,
the property manager, or their respective guests, agents, invitees,
contractors and employees or any tenant or their guests or invitees, (v)
maintain comprehensive general liability insurance in terms and amounts
reasonably acceptable to Seller covering any accident arising in
connection with the presence of Buyer, its agents and representatives on
the Property, and deliver a certificate of insurance verifying such
coverage to Seller prior to entry upon the Property; (vi) promptly pay
when due the costs of all tests, investigations and examinations done
with regard to the Property; (vii) not permit any liens to attach to the
Real Property by reason of the exercise of Buyers rights hereunder,
(viii) fully restore the Property to the condition in which the same was
found before any such inspection or tests were undertaken; and (ix) not
reveal or disclose any information obtained during the due diligence
period concerning the Property and the Documents to anyone outside
Buyers organization, except in accordance with the confidentiality
standards set forth in Section 5.5 herein.
(c) Buyer will indemnify, defend, and hold Seller and its property
manager harmless from all losses, costs, liens, claims, causes of
action, liability, damages and out-of pocket expenses, including,
without limitation, reasonable attorneys fees incurred by Seller as a
result of the entry upon or inspections, tests or investigations of the
Property conducted by or on behalf of Buyer. This indemnity obligation
of Buyer shall survive the termination of this Agreement for any reason.
(d) Buyer acknowledges and agrees that the Documents including,
without limitation, the documents listed in Section 5.2 below are
provided to Buyer for informational purposes only and do not constitute
representations or warranties of Seller or its agents, employees or
representatives of any kind as to the truth, accuracy or completeness of
the Documents or the source(s) thereof. Seller has not undertaken any
independent investigation as to the truth, accuracy or completeness of
the Documents, and is providing the Documents solely as an accommodation
to Buyer.
5.2 DILIGENCE. Subject to SECTION 5.1, above, Buyer shall promptly
commence and actively pursue the following due diligence items:
(a) Review title and survey matters;
(b) Review Property Contracts;
(c) Obtain and review engineering reports;
(d) Obtain and review environmental reports on oil, hazardous waste,
and asbestos;
(e) Review applicable zoning and other land use controls, and other
permits, licenses, permissions, approvals and consents;
(f) Review all Leases affecting the Property; and
(g) Review the Existing Loan Documents.
Buyer shall complete its due diligence on or before the date which is fifteen
(15) days from the date hereof (the DILIGENCE DATE). Notwithstanding any
other term or provision herein to the contrary, but subject to provisions of
Section 5.1(e) above, in the event that Buyers due diligence shall reveal any
matters which are not acceptable to Buyer, in Buyers sole discretion, Buyer
may elect, by written notice to Seller received by Seller on or before the
Diligence Date, not to proceed with this purchase, in which event this
Agreement shall terminate, the Escrow Agent shall return the Escrowed Amount
to the Buyer and this Agreement shall be null and void without recourse to
either party hereto (except to the extent such recourse arises in connection
with a provision of this Agreement which is intended to survive termination).
BUYER ACKNOWLEDGES THAT, PURSUANT TO THE TERMS OF THIS AGREEMENT, BUYER SHALL
BE AFFORDED A FULL OPPORTUNITY TO INSPECT THE PROPERTY, OBSERVE ITS PHYSICAL
CHARACTERISTICS AND EXISTING CONDITIONS AND CONDUCT SUCH INVESTIGATIONS AND
STUDIES ON AND OF SAID PROPERTY AS IT DEEMS NECESSARY AND THAT, UNLESS BUYER
TERMINATES THIS AGREEMENT PURSUANT TO THIS SECTION 5.3 BUYER SHALL BE DEEMED
TO HAVE WAIVED ON THE DILIGENCE DATE ANY AND ALL OBJECTIONS TO OR COMPLAINTS
REGARDING (INCLUDING, BUT NOT LIMITED TO, FEDERAL, STATE OR COMMON LAW BASED
ACTIONS AND ANY PRIVATE RIGHT OF ACTION UNDER STATE AND FEDERAL LAW TO WHICH
THE PROPERTY IS OR MAY BE SUBJECT, INCLUDING BUT NOT LIMITED TO, CERCLA AND
RCRA) PHYSICAL CHARACTERISTICS AND EXISTING CONDITIONS, INCLUDING, WITHOUT
LIMITATION, STRUCTURAL AND GEOLOGIC CONDITIONS, SUBSURFACE SOIL AND WATER
CONDITIONS AND SOLID AND HAZARDOUS WASTE AND HAZARDOUS SUBSTANCES ON, UNDER,
ADJACENT TO OR OTHERWISE AFFECTING THE PROPERTY. BUYER FURTHER HEREBY
ASSUMES THE RISK OF CHANGES IN APPLICABLE LAWS AND REGULATIONS RELATING TO
PAST, PRESENT AND FUTURE ENVIRONMENTAL CONDITIONS ON THE PROPERTY AND THE
RISK THAT ADVERSE PHYSICAL CHARACTERISTICS AND CONDITIONS, INCLUDING, WITHOUT
LIMITATION, THE PRESENCE OF HAZARDOUS SUBSTANCES OR OTHER CONTAMINANTS, MAY
NOT HAVE BEEN REVEALED BY ITS INVESTIGATION.
5.3 COPIES OF REPORTS/RETURN OF DOCUMENTS.
(a) As additional consideration for the transaction contemplated herein,
Buyer shall promptly deliver to Seller copies of any and all reports,
tests or studies involving structural or geologic conditions,
environmental, hazardous waste or Hazardous Substances contamination of
the Property and all other materials obtained in connection with Buyers
diligence, which reports, tests and studies shall be addressed to both
Buyer and Seller at no cost to Seller, provided, however, that Buyer
shall have no obligation to cause any such tests or studies to be
performed on the Property. If such reports, tests or studies indicate
the existence or reasonable potential existence of any environmental,
hazardous waste or Hazardous Substance contamination of any portion of
the Property, Seller may terminate this Agreement by giving written
notice to Buyer within ten (10) business days after Buyer provides
Seller with copies of such reports, tests or studies. Upon such
termination, in accordance with paragraphs (b) and (c) below, the
Escrowed Amount shall be promptly returned to Buyer and neither Buyer
nor Seller shall have any further obligation or liability to the other
hereunder, except those obligations arising under provisions of this
Agreement which are expressly intended to survive termination.
(b) If this Agreement is terminated for any reason whatsoever, Buyer
shall promptly deliver to Seller all Documents delivered to Buyer or
Buyers agents, representatives or designees by Seller or Sellers agents,
representatives or employees pursuant to this Agreement.
(c) The return of the Escrowed Amount to Buyer under this Agreement
shall be contingent upon Buyers fulfillment of its obligations under
Section 5.3(a) and (b).
5.4 CONFIDENTIALITY. Buyer acknowledges and agrees that any and all of
the Documents are proprietary and confidential in nature and will be
delivered to Buyer solely to assist Buyer in determining the feasibility of
purchasing the Property. Further, each party hereto agrees to maintain in
confidence, and not to discuss with or to disclose to any person or entity
who is not a party to this Agreement, any material term of this Agreement or
any aspect of the transactions contemplated hereby, except as provided in
this Section. Seller may publicly disclose the existence of this Agreement
provided that the identity of Buyer is not disclosed. Buyer shall not
disclose to anyone other than its partners and financiers the Documents
and/or any information disclosed by Seller to Buyer which is not generally
known by the public regarding Sellers operations and/or the Property. Each
party hereto may discuss with and disclose to its accountants, attorneys,
existing or prospective lenders, investment bankers, underwriters, rating
agencies, partners, consultants and other advisors to the extent such parties
reasonably need to know such information and are bound by a confidentiality
obligation identical in all material respects to the one created by this
Section. Additionally, each party may discuss and disclose such matters to
the extent necessary to comply with any requirements of the Securities and
Exchange Commission or in order to comply with any law or interpretation
thereof or court order. This provision shall survive termination of this
Agreement but shall terminate upon the Closing. Any press release to be made
regarding any matter which is the subject of the confidentiality obligation
created in this Section shall be subject to the reasonable approval of Buyer
and the Seller, respectively both as to timing and content.
5.5 BUYERS ACKNOWLEDGMENT. BUYER ACKNOWLEDGES THAT AS OF THE DILIGENCE DATE
IT HAS HAD AN OPPORTUNITY TO CONDUCT DILIGENCE ON THE PROPERTY AND IS
ACQUIRING THE PROPERTY IN ITS CURRENT CONDITION BASED ON ITS DILIGENCE.
BUYER FURTHER ACKNOWLEDGES THAT NEITHER SELLER NOR ITS EMPLOYEES, AGENTS OR
REPRESENTATIVES HAVE MADE ANY REPRESENTATION OR WARRANTY AS TO THE CONDITION
OF THE PROPERTY OR THE PRESENCE OR ABSENCE OF ANY HAZARDOUS MATERIALS ON, IN,
UNDER OR WITHIN THE PROPERTY OR A PORTION THEREOF WHICH SURVIVE CLOSING
HEREUNDER. THE BUYER ACKNOWLEDGES AND AGREES THAT THE PROPERTY IS TO BE
CONVEYED BY THE SELLER TO THE BUYER AS IS, WITH ALL FAULTS, AND SUBSTANTIALLY
IN ITS CURRENT CONDITION. THE BUYER FURTHER ACKNOWLEDGES AND AGREES THAT,
EXCEPT AS EXPRESSLY CONTAINED HEREIN, NEITHER THE SELLER NOR ANY AGENT,
EMPLOYEE OR OTHER REPRESENTATIVE OF THE SELLER (OR PURPORTED AGENT, EMPLOYEE
OR OTHER REPRESENTATIVE OF THE SELLER) HAS MADE ANY GUARANTEE, REPRESENTATION
OR WARRANTY, EXPRESS OR IMPLIED (AND THE SELLER SHALL NOT HAVE ANY LIABILITY
WHATSOEVER) AS TO THE VALUE, USES, HABITABILITY, CONDITION, DESIGN,
OPERATION, FINANCIAL CONDITION OR PROSPECTS, OR FITNESS FOR PURPOSE OR USE OF
THE PROPERTY (OR ANY PART THEREOF) OR ANY OTHER GUARANTEE, REPRESENTATION OR
WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY (OR ANY
PART THEREOF) OR INFORMATION SUPPLIED TO BUYER WITH RESPECT THERETO.
FURTHER, THE SELLER SHALL HAVE NO LIABILITY FOR ANY LATENT, HIDDEN, OR PATENT
DEFECT AS TO THE PROPERTY OR THE FAILURE OF THE PROPERTY, OR ANY PART
THEREOF, TO COMPLY WITH ANY APPLICABLE LAWS AND REGULATIONS. IN PARTICULAR,
THE BUYER ACKNOWLEDGES AND AGREES THAT ANY INFORMATION PROVIDED TO BUYER BY
SELLER WITH RESPECT TO THE PROPERTY UNDER THIS AGREEMENT (AND ANY OTHER
INFORMATION THE BUYER MAY HAVE OBTAINED REGARDING IN ANY WAY ANY OF THE
PROPERTY, INCLUDING WITHOUT LIMITATION, ITS OPERATIONS OR ITS FINANCIAL
HISTORY OR PROSPECTS FROM THE SELLER OR ITS AGENTS, EMPLOYEES OR OTHER
REPRESENTATIVES) IS DELIVERED TO THE BUYER AS A COURTESY, WITHOUT
REPRESENTATION OR WARRANTY AS TO ITS ACCURACY OR COMPLETENESS, AND NOT AS AN
INDUCEMENT TO ACQUIRE THE PROPERTY; THAT NOTHING CONTAINED IN SUCH DELIVERIES
SHALL CONSTITUTE OR BE DEEMED TO BE A GUARANTEE, REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, IN ANY REGARD AS TO ANY OF THE PROPERTY (EXCEPT AS
EXPRESSLY PROVIDED HEREIN); AND THAT THE BUYER IS RELYING ONLY UPON THE
PROVISIONS OF THIS AGREEMENT AND ITS OWN INDEPENDENT ASSESSMENT OF THE
PROPERTY AND ITS PROSPECTS IN DETERMINING WHETHER TO ACQUIRE THE PROPERTY.
THE PROVISIONS OF THIS PARAGRAPH SHALL SURVIVE CLOSING.
5.6 BUYERS RELEASE OF SELLER. SELLER AND ITS PROPERTY MANAGER ARE HEREBY
RELEASED FROM ALL RESPONSIBILITY AND LIABILITY REGARDING THE CONDITION
(INCLUDING THE PRESENCE IN THE SOIL, AIR, STRUCTURES AND SURFACE AND
SUBSURFACE WATERS, OF MATERIALS OR SUBSTANCES THAT HAVE BEEN OR MAY BE IN THE
FUTURE DETERMINED TO BE TOXIC, HAZARDOUS, UNDESIRABLE OR SUBJECT TO
REGULATION AND THAT MAY NEED TO BE SPECIALLY TREATED, HANDLED AND/OR REMOVED
FROM THE PROPERTY UNDER CURRENT OR FUTURE FEDERAL, STATE AND LOCAL LAWS,
REGULATIONS OR GUIDELINES), VALUATION, SALABILITY OR UTILITY OF THE PROPERTY,
OR ITS SUITABILITY FOR ANY PURPOSE WHATSOEVER. BUYER ACKNOWLEDGES THAT ANY
INFORMATION OF ANY TYPE WHICH BUYER HAS RECEIVED OR MAY RECEIVE FROM SELLER,
ITS PROPERTY MANAGER OR THEIR RESPECTIVE AGENTS, INCLUDING, WITHOUT
LIMITATION, ANY ENVIRONMENTAL REPORTS AND SURVEYS, IS FURNISHED ON THE
EXPRESS CONDITION THAT BUYER SHALL MAKE AN INDEPENDENT VERIFICATION OF THE
ACCURACY OF SUCH INFORMATION, ALL SUCH INFORMATION BEING FURNISHED WITHOUT
ANY WARRANTY WHATSOEVER.
ARTICLE 6
TITLE AND SURVEYTITLE AND SURVEYTITLE AND SURVEY
6.1 TITLE AND SURVEY. Not more than five (5) days after Sellers
execution of this Agreement, Seller shall deliver to Buyer: (a) a current
▇▇▇▇ ▇▇▇▇▇ As-Built Survey of the Real Property per ALTA/ACSM 1997 Minimum
Standard Detail Requirements (the Survey); (b) a commitment for an ALTA
Owners Policy of Title Insurance from the Escrow Agent (the Title
Commitment); and (c) a Phase I Environmental Inspection Report prepared by
Dames & ▇▇▇▇▇ (the Phase I)
If (i) the Survey, (ii) matters listed as exceptions in the Title
Commitment, or (iii) matters disclosed in the Phase I Report are not
satisfactory to Buyer, Buyer shall, no less than five (5) business days
before the Diligence Date, provide Seller with written notice of such
objections (the Title Objections). Seller, at its sole cost and expense
shall have the right, but not the obligation, to cure or remove any Title
Objections and shall give Buyer written notice on or prior to the Diligence
Date, identifying those Title Objections, if any, that Seller agrees to use
reasonable efforts to cure; provided, however, that Seller shall not be
obligated to incur any costs or expenses in excess of $10,000 in connection
with any such cure undertaken by Seller. If there are Title Objections which
Seller is unable or unwilling to cure by the Diligence Date, Buyer may
terminate this Agreement as provided in SECTION 5.2, above or waive such
objections which Seller is not willing or able to cure and proceed to
closing. Those exceptions or title deficiencies which (i) Buyer does not
object to pursuant to this SECTION 6.1 or (ii) are waived because Seller is
unwilling or unable to cure shall be the Permitted Exceptions.
6.2 DEED. On the Closing Date, Seller shall convey by good and
sufficient special warranty deed to Buyer good and clear record and
marketable fee simple title to all of the Real Property free and clear of all
liens, encumbrances, conditions, easements, assessments, restrictions and
other conditions, except for the following:
(a) All Leases;
(b) All zoning, building and other laws applicable to the Property;
(c) All matters which arise after the Diligence Date which are
agreed upon or consented to by Buyer;
(d) The Existing Loan Documents;
(e) The lien, if any, for real estate taxes for current year not due
and payable prior to the Closing Date (subject to proration in
accordance with Section 3.3 herein);
(f) All matters shown on Schedule B of the Title Commitment or of
public record as of the effective date of the Title Commitment and which
Seller has not agreed to (or is not obligated to) cure pursuant to
SECTION 6.1, above;
(g) The Permitted Exceptions;
(h) Any matters shown on the Survey; and
(i) All matters, whether or not of record, to the extent caused by
Buyer or its agents, representatives or contractors.
6.3 LEASE ASSIGNMENT. At the Closing, Seller shall assign the Leases
to Buyer and Buyer shall assume Sellers obligations thereunder and Seller
shall convey the Personal Property to Buyer by quitclaim ▇▇▇▇ of sale.
6.4 EXISTING LOAN.
(a) The obligations of Seller under this Agreement are contingent
and conditioned upon the following:
i. Lenders approval of the assignment to Buyer of the
Existing Loan; and
ii. Receipt by Seller from Lender at Closing of a release of
all of its obligations as borrower under the Loan
Documents, including, without limitation, a release by
Lender of Seller from its obligations under the
Certificate and Indemnity Agreement listed on EXHIBIT E;
provided however, that, at its option, Seller may waive
the condition set forth in this Section 6.4(a)(ii).
(b) Within three (3) days of the date hereof, Seller shall provide
Buyer with a true, correct and complete copy of all Loan Documents
executed in connection with the Existing Loan, which documents are listed
on EXHIBIT E attached hereto.
(c) Buyer shall, at its sole cost and expense, simultaneously with
the execution of this Agreement, deliver to Seller a check payable to
Seller in the amount of $5,000.00 (the Application Fee) to reimburse
Seller for the fee charged to Seller by Lender for applying for its
consent to the assignment and assumption of the Existing Loan. In the
event Purchaser does not deliver the Application Fee to Seller as
provided in the immediately preceding sentence, Seller may offset the
Application Fee against the ▇▇▇▇▇▇▇ Money without further action or
consent by Buyer. Buyer and Seller agree to diligently pursue such
application until Lender grants its approval of the assignment and
assumption of the Existing Loan to Buyer. In the event that Lender has
not granted its approval of the assignment and assumption of the
Existing Loan to Buyer within thirty (30) days from the expiration of
the Diligence Date, then either Buyer or Seller may elect to terminate
this Agreement by written notice to the other party, and the Escrowed
Amount shall be returned to Buyer and this Agreement shall thereupon
terminate and be of no further force and effect. In connection with
such application, Buyer agrees to simultaneously provide Seller with
copies of all materials submitted to Lender and Buyer agrees that it
shall not withdraw or amend its application without Sellers prior
written consent.
(d) Buyer agrees to submit all materials requested by Lender and/or
those documents required to be submitted to Lender pursuant to the
applicable provisions of the Loan Documents on or before expiration of
the Diligence Date. Buyer acknowledges that such application documents
include, without limitation, the following:
(i) information regarding Buyers finances and credit;
(ii) information regarding Buyers management experience and
general reputation in the community; and
(iii) information regarding the ownership structure of Buyer,
including a list of all persons having or proposing to have
more than a ten percent (10%) ownership interest in
Buyer.
(e) Buyer shall pay all fees and costs, if any, charged by the
Lender relating to the assignment and assumption of the Existing Loan.
(f) Buyer and Seller agree to cooperate with Buyers efforts to
obtain Lenders consent. Subject to the other provisions of this
Agreement, Buyer and Seller each agree to execute and deliver any and
all documents or instruments or take such other action as may be
necessary or proper to effectuate, confirm, perform or carry out the
assignment and assumption of the Existing Loan.
ARTICLE 7
CONDITIONS PRECEDENT AND CLOSINGCONDITIONS PRECEDENT AND CLOSINGCONDITIONS
PRECEDENT AND CLOSING
7.1 BUYERS CONDITIONS PRECEDENT. In addition to any other conditions
precedent in favor of Buyer as may be set forth elsewhere in this Agreement,
Buyers obligations under this Agreement are expressly subject to the timely
fulfillment of the conditions set forth in this Section 7.1 on or before the
Closing Date, or such earlier date as is set forth below. Each condition may
be waived in whole or in part only by written notice of such waiver from
Buyer to Seller.
(a) Seller performing and complying in all material respects with
all of the terms of this Agreement to be performed and complied with by
Seller prior to or at the Closing;
(b) Buyer shall have received approval of the Board of Directors of
Home Properties of New York, Inc., provided that if Buyer has not
terminated this Agreement for failure to obtain such approval on or
before the Diligence Date, then Buyer shall be deemed to have waived
this condition to Closing; and
(c) Satisfaction in full of the requirements of Section 6.4 with
respect to the Existing Loan.
Notwithstanding the foregoing, if the conditions set forth in
Sections 7.1(a)-(c) or any other condition of Closing (other than an
obligation of Buyer under Section 7.2 below) shall not have been fulfilled on
or before the Closing Date, Seller shall have the right (in its sole
discretion), exercisable by written notice to Buyer at or before the Closing,
to extend the Closing Date for a period of up to thirty (30) days to provide
additional time for the fulfillment of such conditions. Upon any such
extension, the term Closing Date as used herein shall mean the date set forth
in such written notice from Seller. If Buyers conditions as set forth in
this Section 7.1 have not been met as of the Closing Date (as the same may be
extended as aforesaid) then Buyer shall have the right to terminate this
Agreement by written notice to Seller, and upon receipt of such notice Seller
shall direct the Escrow Agent to return the Escrowed Amount to Buyer and this
Agreement shall thereupon terminate and be of no further force or effect.
7.2 SELLERS CONDITIONS PRECEDENT. In addition to any other conditions
precedent in favor of Seller as may be set forth elsewhere in this Agreement,
Sellers obligations under this Agreement are expressly subject to the timely
fulfillment of the conditions set forth in this Section 7.2 on or before the
Closing Date, or such earlier date as is set forth below. Each condition may
be waived in whole or part only by written notice of such waiver from Seller
to Buyer.
(a) Buyer performing and complying in all material respects with all of
the terms of this Agreement to be performed and complied with by Buyer
prior to or at the Closing, including, without limitation, payment by
the Buyer of the Purchase Price (as adjusted as otherwise provided
herein);.
(b) On the Closing Date, all of the representations of Buyer set
forth in this Agreement shall continue to be true, accurate and
complete.
(c) Satisfaction of the requirements of Section 6.4 with respect to
the Existing Loan.
(d) The release by Lender of Seller from any and all obligations and
liability under the Existing Loan Documents and the form of the
assumption and release documents being satisfactory to Seller in their
sole, but reasonable discretion.
7.3 CLOSING DATE. Subject to Sellers right to extend the Closing Date
as provided in Section 7.1, the consummation of the purchase and sale
contemplated in this Agreement (the CLOSING) shall occur through an escrow
closing arrangement on the date that is fifteen (15) days from the Diligence
Date (the CLOSING DATE), at the office of the Escrow Agent or through the
escrow closing arrangements. It is agreed that time is of the essence in
this Agreement.
7.4 CLOSING DELIVERIES. On the Closing Date, Seller shall deliver or
cause to be delivered:
(a) A duly executed and acknowledged special warranty deed conveying
the Land and the Improvements to Buyer in the form attached hereto as
EXHIBIT F;
(b) A duly executed quitclaim ▇▇▇▇ of sale conveying the Personal
Property to Buyer in the form attached hereto as EXHIBIT G;
(c) A duly executed assignment and assumption of the Leases and
Tenant Deposits (the ASSIGNMENT OF LEASES) in the form attached hereto
as EXHIBIT H;
(d) A duly executed assignment and assumption of contracts and
intangibles (the ASSIGNMENT OF CONTRACTS) conveying the Property
Contracts and the Intangible Property, in the form attached hereto as
EXHIBIT I;
(e) A certificate or certificates of non-foreign status from Seller
in the form attached hereto as EXHIBIT J;
(f) Customary affidavits sufficient for the Escrow Agent to delete any
exceptions for mechanics or materialmens liens and parties in possession
from Buyers title policy and such other affidavits relating to such
title policy as the Escrow Agent may reasonably request including lien
waivers from the Broker (as hereinafter defined) and the property
manager;
(g) An updated Rent Roll (including a list of all delinquent,
prepaid rents and Tenant Deposits) certified by the Seller as true and
correct as of the Closing Date;
(h) Such other instruments as Buyer, Lender or the Escrow Agent may
reasonably request to effectuate the transactions contemplated by this
Agreement including a duly executed Transfer Tax Declaration form;
(i) A duly executed counterpart original of the closing statement
setting forth the Purchase Price, the closing adjustments and the
application of the Purchase Price as adjusted;
(j) Evidence or documents as may reasonably be required by the
Escrow Agent evidencing the status and capacity of Seller to sell the
Property and the authority of the person or persons executing the
various documents on behalf of Seller in connection with the sale of the
Property;
(k) Originals, or where unavailable, copies of all Property
Contracts, Leases (with all amendments and modifications thereto),
operating information, permits, warranties and financial information
about the Property in Sellers possession or control relating to the
Property;
(l) All keys to all locks on the Property and similar items, to the
extent in Sellers possession; and
(m) The following documents with respect to the assignment and
assumption of the Existing Loan:
(i) Assignment and Assumption of the Mortgage;
(ii) Assignment of Assignment of Leases and Rents;
(iii) UCC-3 Assignments of Financing Statements; and
(iv) Written approval of Lender to the assignment to Buyer of
the Existing Loan to Buyer.
7.5 BUYERS DELIVERIES. On the Closing Date, Buyer shall deliver or
cause to be delivered at its expense each of the following to Seller:
(a) The Purchase Price for the Property, as such Purchase Price may
have been adjusted pursuant to the provisions of this Agreement and
credited for any portion of the Escrowed Amount paid to Seller, in the
manner provided for in Article 3;
(b) Evidence in form and substance reasonably satisfactory to
Escrow Agent and Seller of Buyers authority to purchase the Property;
(c) The Assignment of Leases;
(d) The Assignment of Contracts;
(e) Duly executed assumption agreement regarding the Existing Loan
Documents and such other instruments as Lender may require in connection
with and to evidence the assumption of the Existing Loan Documents by
Buyer;
(f) Such other instruments as Seller or Escrow Agent may reasonably
request to effectuate the transactions contemplated by this Agreement;
(g) A duly executed counterpart original of the closing statement
setting forth the Purchase Price, the closing adjustments and the
application of such amounts;
(h) Such evidence or documents as may reasonably be required by the
Escrow Agent evidencing the status and capacity of Buyer and the
authority of the person or persons who are executing the various
documents on behalf of Buyer in connection with the purchase of the
Property;
(i) Acknowledgment by Buyer of Buyers receipt from Seller of the
Tenant Deposits; and
(j) The following documents with respect to the assignment and
assumption of the Existing Loan:
(i) Written approval of Lender to the assignment to Buyer of
the Existing Loan;
(ii) Assignment and Assumption of the Mortgage;
(iii) Assignment of Assignment of Leases and Rents;
(iv) UCC-3 Assignments of Financing Statements; and
(v) Release of Sellers obligations under the Loan Documents
(hereinafter defined), including, without limitation, a release of
Seller from its obligations pursuant to the Certificate and
Indemnity Agreement executed in connection with the Existing Loan,
all in forms reasonably satisfactory to Seller; and
(vi) Such other documents as may be reasonably requested by
Lender in connection with the assignment of the Existing Loan to
Purchaser and the assumption of the obligations under the Existing
Loan by Purchaser, including, without limitation, an Environmental
Indemnity Agreement.
(k) Executed counterparts of any other documents listed in Section
7.4 required to be signed by Buyer.
7.6 POSSESSION. Possession of the Property shall be delivered to Buyer
by Seller at the Closing, subject only to those items listed in Section 6.2
of this Agreement and rights arising under any Property Contracts not
terminated by Buyer pursuant to Section 4.3. Seller and Buyer covenant and
agree to execute, at Closing, a written notice of the acquisition of the
Property by Buyer, for duplication and transmittal to all tenants affected by
the sale and purchase of the Property (or otherwise in such manner as will
comply with applicable law respecting notification of tenants). Such notice
shall be prepared by Buyer and approved by Seller, shall notify the tenants
of the sale and transfer and shall contain appropriate instructions relating
to the payment of future rentals, the giving of future notices, and other
matters reasonably required by Buyer or required by law. Unless a different
procedure is required by applicable law, in which event such laws shall be
controlling, Buyer agrees to transmit or otherwise deliver such letters to
the tenants promptly after the Closing.
ARTICLE 8
CASUALTY AND CONDEMNATIONCASUALTY AND CONDEMNATIONCASUALTY AND CONDEMNATION
8.1 CASUALTY. If the Improvements are materially damaged by fire or
any other casualty and are not substantially restored to the condition
immediately prior to such casualty before the Closing Date, Buyer shall have
the following elections:
(a) to purchase the Property in its then condition and pay the
Purchase Price, in which event Seller shall pay over or assign to Buyer
as the case may be, on the Closing Date, amounts recovered or
recoverable by Seller on account of any insurance as a result of such
casualty up to the amount of the Purchase Price, less any amounts
reasonably expended by Seller for partial restoration; or
(b) if any portion of the Improvements suffers damage in excess of
$1,500,000 from fire or any other casualty which Seller, in its sole
option, elects not to repair, to terminate this Agreement by giving
notice of termination to Seller on or before that date which is thirty
(30) days after the occurrence of the fire or other casualty or on the
Closing Date, whichever occurs first, in which event the Escrow Agent
shall return the Escrowed Amount to Buyer, this Agreement shall
terminate and neither Seller nor Buyer shall have any recourse against
the other (except to the extent such recourse arises in connection with
a provision of this Agreement which is intended to survive termination).
8.2 CONDEMNATION. If any substantial portion of or interest in the
Property shall be taken or is in the process of being taken by exercise of
the power of eminent domain or if any governmental authority notifies Seller
prior to the Closing Date of its intent to take or acquire any portion of or
interest in the Property (each an EMINENT DOMAIN TAKING), Seller shall give
notice promptly to Buyer of such event and Buyer shall have the option to
terminate this Agreement by providing notice to Seller to such effect on or
before the date which is ten (10) days from Sellers notice to Buyer of such
Eminent Domain Taking or on the Closing Date, whichever occurs first, in
which event the Escrow Agent shall return the Escrowed Amount to Buyer, this
Agreement shall terminate, and neither Seller nor Buyer shall have any
recourse against the other (except to the extent such recourse arises in
connection with a provision of this Agreement which is intended to survive
termination). If Buyer does not timely notify Seller of its election to
terminate this Agreement, Buyer shall purchase the Property and pay the
Purchase Price, and Seller shall pay over or assign to Buyer on delivery of
the deed awards recovered or recoverable by Seller on account of such Eminent
Domain Taking up to the amount of the Purchase Price, less any amounts
reasonably expended by Seller in obtaining such award.
ARTICLE 9
BROKERAGE COMMISSIONSBROKERAGE COMMISSIONSBROKERAGE COMMISSIONS
Seller and Buyer each mutually represent and warrant to the other that they
have not dealt with, and are not obligated to pay, any fees or commissions to
any broker in connection with the transaction contemplated by this Agreement
other than ▇▇▇▇▇▇▇ ▇. Montana of ▇▇▇▇▇▇ and ▇▇▇▇▇▇ (the BROKER). Seller
agrees to pay all commissions, payments and fees due to the Broker at the
Closing. Buyer agrees to indemnify, defend and hold Seller harmless from
and against all loss, liabilities, costs, damages and expenses (including
reasonable attorneys fees) arising from any claims for brokerage or finders
fees, commissions or other similar fees in connection with the transaction
covered by this Agreement insofar as such claims shall be based upon alleged
arrangements or agreements made by Buyer or on Buyers behalf. Seller hereby
agrees to indemnify, defend and hold Buyer harmless from and against all
loss, liabilities, costs, damages and expenses (including reasonable
attorneys fees) arising from any claims for brokerage or finders fees,
commissions or other similar fees, including any claim made by the Broker, in
connection with the transaction covered by this Agreement as such claims
shall be based upon alleged arrangements or agreements made by Seller or on
Sellers behalf.
ARTICLE 10
DEFAULT, TERMINATION AND REMEDIESDEFAULT, TERMINATION AND REMEDIESDEFAULT,
TERMINATION AND REMEDIES
10.1 SELLERS DEFAULT. In the event that Seller shall have failed in any
material respect adverse to Buyer as of the Closing Date to have performed
any of the covenants and agreements contained in this Agreement which are to
be performed by Seller on or before the Closing Date or Seller defaults in
its obligation to close hereunder, Buyer shall have the right to terminate
this Agreement and receive the Escrowed Amount and may bring an action
against Seller to recover its actual costs incurred to third parties in
connection with its examination of the Property prior to Closing in an amount
not to exceed $25,000, whereupon this Agreement shall terminate without
further recourse. Except as otherwise provided in this Section 10.1, Buyer
hereby waives and relinquishes any right to ▇▇▇ Seller for any reason
whatsoever, and agrees that Seller shall not be liable to Buyer for any
actual, punitive, speculative, consequential or other damages for breach by
Seller prior to the Closing, except for payment of the Escrowed Amount. IN
NO EVENT SHALL SELLER, ITS DIRECT OR INDIRECT PARTNERS, SHAREHOLDERS, OWNERS
OR AFFILIATES, ANY OFFICER, DIRECTOR, EMPLOYEE OR AGENT OF THE FOREGOING, OR
ANY AFFILIATE OR CONTROLLING PERSON THEREOF, HAVE ANY LIABILITY BEYOND ITS
INTEREST IN THE PROPERTY FOR ANY CLAIM, CAUSE OF ACTION OR OTHER LIABILITY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE PROPERTY, WHETHER BASED
ON COMMON LAW, CONTRACT, STATUTE, EQUITY OR OTHERWISE.
10.2 BUYERS DEFAULT. In the event that Buyer shall have failed in any
material respect adverse to Seller as of the Closing Date to have performed
any of the covenants and agreements contained in this Agreement which are to
be performed by Buyer on or before the Closing Date, or if Buyer defaults in
its obligation to close hereunder, Seller shall be entitled to receive the
Escrowed Amount as liquidated damages, in lieu of all other remedies
available to Seller at law or in equity for such default, and Buyer shall
direct the Escrow Agent to release the Escrowed Amount to Seller. Seller and
Buyer agree that the damages resulting to Seller as a result of such default
by Buyer as of the date of this Agreement are difficult or impossible to
ascertain and the liquidated damages set forth in the preceding sentence
constitute Buyers and Sellers reasonable estimate of such damages.
Notwithstanding the foregoing, in the event of Buyers default or a
termination of this Agreement, Seller shall have all remedies available at
law or in equity in the event Buyer or any party related to or affiliated
with Buyer asserts any claims or rights to the Property that would otherwise
delay or prevent Seller from having clear, indefeasible and marketable title
to the Property.
ARTICLE 11
REPRESENTATIONS AND WARRANTIESREPRESENTATIONS AND WARRANTIESREPRESENTATIONS
AND WARRANTIES
11.1 BUYERS REPRESENTATIONS AND WARRANTIES. Buyer represents and
warrants to Seller that:
(a) Buyer is a limited partnership, duly organized and in good
standing under the laws of the State of New York, is qualified to do
business in the State of Illinois and has the power and authority to
enter into this Agreement and to execute and deliver this Agreement and
to perform all duties and obligations imposed upon it hereunder. As of
the date of this Agreement, except for the approval described in Section
7.1(b), Buyer has obtained all necessary corporate, partnership or other
organizational authorizations required in connection with the execution
and delivery of this Agreement. Each of the individuals executing this
Agreement on Buyers behalf is authorized to do so. Buyer has the
financial ability to pay the Purchase Price by (i) tendering the Cash
Balance, and (ii) assuming the Existing Loan, and to perform the other
covenants of Buyer set forth in this Agreement.
(b) Neither the execution nor the delivery of this Agreement, nor
the consummation of the purchase and sale transaction contemplated
hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement conflict with or will result in the breach
of any of the terms, conditions or provisions of any agreement or
instrument to which Buyer is a party or by which Buyer or any of Buyers
assets is bound;
(c) Buyer is not in any way affiliated with Seller;
(d) Except for the approval by Lender of Buyers assumption of the
Existing Loan as described in Section 6.4, no approval, consent, order
or authorization of, or designation, registration or declaration with,
any of the United States, the State of Illinois, any department, board,
agency, office, commission or other subdivisions thereof, or any
official thereof or any third party is required in connection with the
valid execution and delivery of, and performance of the covenants of,
this Agreement by Buyer.
(e) There are no actions, suits or proceedings pending or, to the
knowledge of Buyer, threatened, against or affecting Buyer which, if
determined adversely to Buyer, would adversely affect its ability to
perform its obligations hereunder.
As a condition precedent to Sellers obligation to close the purchase and sale
transaction contemplated in this Agreement, Buyers representations and
warranties contained herein must remain and be true and correct as of the
Closing Date. Prior to the Closing Date, Buyer shall notify Seller in
writing of any facts, conditions or circumstances which render any of the
representations and warranties set forth in this SECTION 11.1 in any way
inaccurate, incomplete, incorrect or misleading.
11.2 SELLERS REPRESENTATIONS AND WARRANTIES. Seller is a general
partnership existing under the laws of the State of Illinois.
(a) Seller has full right, power and authority and is duly
authorized to enter into this Agreement, to perform each of the
covenants on its part to be performed hereunder and to execute and
deliver, and to perform its obligations under all documents required to
be executed and delivered by it pursuant to this Agreement and this
Agreement constitutes the valid and binding obligation of Seller
enforceable in accordance with its terms.
(b) A list of all notes, mortgages loan agreements and other
financing documents relating to the Existing Loan is attached to this
Agreement as EXHIBIT E. To Sellers knowledge, no default exists or is
claimed to exist on the part of the borrower under the Existing Loan,
and to Sellers knowledge, no event or condition exists which, with the
giving of notice, passage of time or both could constitute such a
default.
(c) Seller has directed its property manager to deliver or to make
available to Buyer (i) complete copies of all Leases and (ii) the Rent
Roll.
(d) Seller has directed its property manager to deliver or to make
available to Buyer copies of all Property Contracts.
(e) To Sellers knowledge, Seller has not been served with notice of
any actions, suits, or proceedings against or affecting the Seller or
the Property that either (i) are not covered by applicable insurance or
(ii) if determined adversely to Seller would materially affect the
ownership or operation of the Property or Sellers ability to perform its
obligations under this Agreement.
Seller reserves the right to update the representations and warranties
made by it herein. All of Sellers representations and warranties shall be
deemed to be updated by information disclosed to or obtained by Purchaser in
connection with its due diligence investigations. As a condition precedent
to Buyers obligation to close the purchase and sale transaction contemplated
in this Agreement, Sellers representations and warranties contained herein
shall be true and correct as of the Closing Date.
11.3 SELLER; SELLERS KNOWLEDGE. Whenever a representation is made to
Sellers knowledge, or a term of similar import, the accuracy of such
representation shall be based solely on the actual knowledge of Rock ▇▇▇▇▇▇▇,
without independent investigation or inquiry except for inquiry of Sellers
property manager for the Property. Notwithstanding the foregoing, if, prior
to the Closing, Buyer obtains actual knowledge that any representation or
warranty of Seller is inaccurate and Buyer nonetheless proceeds with the
Closing, Seller shall have no liability for any such matter regarding which
Buyer had actual knowledge prior to Closing.
11.4 PROPERTY CONVEYED AS IS. (a) NOTWITHSTANDING ANYTHING CONTAINED
HEREIN TO THE CONTRARY, IT IS UNDERSTOOD AND AGREED THAT, EXCEPT AS EXPRESSLY
SET FORTH HEREIN, SELLER AND ITS PROPERTY MANAGER HAVE NOT MADE AND ARE NOT NOW
MAKING, AND THEY SPECIFICALLY DISCLAIM, ANY OTHER WARRANTIES, REPRESENTATIONS
OR GUARANTIES OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, ORAL OR WRITTEN,
PAST, PRESENT OR FUTURE, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT
LIMITED TO, WARRANTIES, REPRESENTATIONS OR GUARANTIES AS TO (I) MATTERS OF
TITLE (OTHER THAN SELLERS WARRANTY OF TITLE SET FORTH IN THE DEED
(HEREINAFTER DEFINED) TO BE DELIVERED AT CLOSING), (II) ENVIRONMENTAL MATTERS
RELATING TO THE PROPERTY OR ANY PORTION THEREOF, (III) GEOLOGICAL CONDITIONS,
INCLUDING, WITHOUT LIMITATION, SUBSIDENCE, SUBSURFACE CONDITIONS, WATER
TABLE, UNDERGROUND WATER RESERVOIRS, LIMITATIONS REGARDING THE WITHDRAWAL OF
WATER, AND EARTHQUAKE FAULTS AND THE RESULTING DAMAGE OF PAST AND/OR FUTURE
EARTHQUAKES, (IV) WHETHER, AND TO THE EXTENT TO WHICH THE PROPERTY OR ANY
PORTION THEREOF IS AFFECTED BY ANY STREAM (SURFACE OR UNDERGROUND), BODY OF
WATER, FLOOD PRONE AREA, FLOOD PLAIN, FLOODWAY OR SPECIAL FLOOD HAZARD, (V)
DRAINAGE, (VI) SOIL CONDITIONS, INCLUDING THE EXISTENCE OF INSTABILITY, PAST
SOLID REPAIRS, SOIL ADDITIONS OR CONDITIONS OF SOIL FILL, OR SUSCEPTIBILITY
TO LANDSLIDES, OR THE SUFFICIENCY OF ANY UNDERSHORING, (VII) ZONING TO WHICH
THE PROPERTY OR ANY PORTION THEREOF MAY BE SUBJECT, (VIII) THE AVAILABILITY
OF ANY UTILITIES TO THE PROPERTY OR ANY PORTION THEREOF INCLUDING, WITHOUT
LIMITATION, WATER, SEWAGE, GAS AND ELECTRIC, (IX) USAGES OF ADJOINING
PROPERTY, (X) ACCESS TO THE PROPERTY OR ANY PORTION THEREOF, (XI) THE VALUE,
COMPLIANCE WITH THE PLANS AND SPECIFICATIONS, SIZE, LOCATION, AGE, USE,
DESIGN, QUALITY, DESCRIPTION, SUITABILITY, STRUCTURAL INTEGRITY, OPERATION,
TITLE TO, OR PHYSICAL OR FINANCIAL CONDITION OF THE PROPERTY OR ANY PORTION
THEREOF, OR ANY INCOME, EXPENSES, CHARGES, LIENS, ENCUMBRANCES, RIGHTS OR
CLAIMS ON OR AFFECTING OR PERTAINING TO THE PROPERTY OR ANY PART THEREOF, OR
ANY INCOME, EXPENSES, CHARGES, LIENS, ENCUMBRANCES, RIGHTS OR CLAIMS ON OR
AFFECTING OR PERTAINING TO THE PROPERTY OR ANY PART THEREOF, (XII) THE
PRESENCE OF HAZARDOUS SUBSTANCES IN OR ON, UNDER OR IN THE VICINITY OF THE
PROPERTY, (XIII) THE CONDITION OR USE OF THE PROPERTY OR COMPLIANCE OF THE
PROPERTY WITH ANY OR ALL PAST, PRESENT OR FUTURE FEDERAL, STATE OR LOCAL
ORDINANCES, RULES, REGULATIONS OR LAWS, BUILDING, FIRE OR ZONING ORDINANCES,
CODES OR OTHER SIMILAR LAWS, (XIV) THE EXISTENCE OR NON-EXISTENCE OF
UNDERGROUND STORAGE TANKS, (XV) ANY OTHER MATTER AFFECTING THE STABILITY OR
INTEGRITY OF THE REAL PROPERTY, (XVI) THE POTENTIAL FOR FURTHER DEVELOPMENT
OF THE PROPERTY, (XVII) THE EXISTENCE OF VESTED LAND USE, ZONING OR BUILDING
ENTITLEMENTS AFFECTING THE PROPERTY, (XVIII) THE MERCHANTABILITY OF THE
PROPERTY OR FITNESS OF THAT PROPERTY FOR ANY PARTICULAR PURPOSE (BUYER
AFFIRMING THAT BUYER HAS NOT RELIED ON SELLERS OR ITS PROPERTY MANAGERS SKILL
OR JUDGMENT TO SELECT OR FURNISH THE PROPERTY FOR ANY PARTICULAR PURPOSE, AND
THAT SELLER MAKES NO WARRANTY THAT THE PROPERTY IS FIT FOR ANY PARTICULAR
PURPOSE), OR (XIX) TAX CONSEQUENCES.
(b) BUYER HAS NOT RELIED UPON AND WILL NOT RELY UPON, EITHER DIRECTLY OR
INDIRECTLY, ANY REPRESENTATION OR WARRANTY OF SELLER OR ITS PROPERTY MANAGER
OR ANY OF THEIR RESPECTIVE AGENTS, EXPECT AS EXPRESSLY SET FORTH HEREIN, AND
ACKNOWLEDGES THAT NO OTHER SUCH REPRESENTATIONS HAVE BEEN MADE. BUYER
REPRESENTS THAT IT IS A KNOWLEDGEABLE, EXPERIENCED AND SOPHISTICATED BUYER OF
REAL ESTATE AND THAT IT IS RELYING SOLELY ON ITS OWN EXPERTISE AND THAT OF
BUYERS CONSULTANTS IN PURCHASING THE PROPERTY. BUYER WILL CONDUCT SUCH
INSPECTIONS AND INVESTIGATIONS OF THE PROPERTY AS BUYER DEEMS NECESSARY,
INCLUDING, BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS
THEREOF, AND SHALL RELY UPON SAME. UPON CLOSING, BUYER SHALL ASSUME THE RISK
THAT ADVERSE MATTERS, INCLUDING, BUT NOT LIMITED TO, ADVERSE PHYSICAL AND
ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY BUYERS INSPECTIONS
AND INVESTIGATIONS. BUYER ACKNOWLEDGES AND AGREES THAT UPON CLOSING, SELLER
SHALL SELL AND CONVEY TO BUYER AND BUYER SHALL ACCEPT THE PROPERTY AS IS,
WHERE IS, WITH ALL FAULTS. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT THERE
ARE NO ORAL AGREEMENTS, WARRANTIES OR REPRESENTATIONS, COLLATERAL TO OR
AFFECTING THE PROPERTY BY SELLER, ANY AGENT OF SELLER OR ANY THIRD PARTY.
THE TERMS AND CONDITIONS OF THIS SECTION 11.4(B) SHALL EXPRESSLY SURVIVE THE
CLOSING, NOT MERGE WITH THE PROVISIONS OF ANY CLOSING DOCUMENTS AND SHALL BE
INCORPORATED INTO THE DEED. SELLER IS NOT LIABLE OR BOUND IN ANY MANNER BY
ANY ORAL OR WRITTEN STATEMENTS, REPRESENTATIONS, OR INFORMATION PERTAINING TO
THE PROPERTY FURNISHED BY ANY REAL ESTATE BROKER, AGENT, EMPLOYEE, SERVANT OR
OTHER PERSON, UNLESS THE SAME ARE SPECIFICALLY SET FORTH OR REFERRED TO
HEREIN. BUYER ACKNOWLEDGES THAT THE PURCHASE PRICE REFLECTS THE AS IS NATURE
OF THIS SALE AND ANY FAULTS, LIABILITIES, DEFECTS OR OTHER ADVERSE MATTERS
THAT MAY BE ASSOCIATED WITH THE PROPERTY. BUYER HAS FULLY REVIEWED THE
DISCLAIMERS AND WAIVERS SET FORTH IN THIS AGREEMENT WITH ITS COUNSEL AND
UNDERSTANDS THE SIGNIFICANCE AND EFFECT THEREOF.
ALT
---------------
Buyers Initials
ARTICLE 12
MISCELLANEOUS
12.1 SUCCESSORS AND ASSIGNS. Without the prior written consent of
Seller, Buyer shall not, directly or indirectly, assign this Agreement or any
of its rights hereunder. Any attempted assignment in violation hereof shall,
at the election of Seller in its sole discretion, be of no force or effect
and shall constitute a default by Buyer. Notwithstanding the foregoing and
so long as it will not affect the Lenders consent to or the timing of the
Closing, Buyer may elect to have a nominee entity accept title to the
Property at Closing, provided that any such nominee must be an affiliated
entity controlled by or under common control with Buyer, and Buyer shall give
written notice of such nominee to Seller, together with any reasonable
evidence of affiliation requested by Seller, a minimum of fifteen (15) days
prior to Closing. No designation of a nominee to receive title shall release
Buyer from its obligations under this Agreement.
12.2 NOTICES. Except as otherwise specifically provided herein, any
notice required or permitted to be delivered under this Agreement shall be in
writing and shall be deemed given (i) when delivered or refused if sent by
hand during regular business hours, (ii) three (3) days after being sent by
United States Postal Service, registered or certified mail, postage prepaid,
return receipt requested, (iii) on the next business day when sent by a
reputable overnight express mail service that provides tracing and proof of
receipt or refusal of items mailed, or (iv) when received by the addressee if
by telecopier transmission addressed to Seller or Buyer, as the case may be,
at the address or addresses set forth below or such other addresses as the
parties may designate in a notice similarly sent. Any notice given by a
party to Escrow Agent shall be simultaneously given to the other party. Any
notice given by a party to the other party relating to its entitlement to the
Escrowed Amount shall be simultaneously given to the Escrow Agent.
(1) If to Seller:
▇▇▇▇▇ ▇▇▇▇▇▇ Properties Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Mr. Rock ▇. ▇▇▇▇▇▇▇
and
Chicago Colony Apartments Company, L.P.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇, Procter & ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
(2) If to Buyer:
Home Properties
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
with a copy to:
Home Properties
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
(3) If to the Escrow Agent:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Escrow Officer
Ticor Title Insurance Company
▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
12.3 CONSTRUCTION. Words of any gender used in this Agreement shall be
held and construed to include any other gender, and words of a singular
number shall be held to include the plural and vice versa, unless the context
requires otherwise.
12.4 CAPTIONS. The captions used in connection with the Articles of this
Agreement are for convenience only and shall not be deemed to extend, limit
or otherwise define or construe the meaning of the language of this
Agreement.
12.5 NO OTHER PARTIES. Nothing in this Agreement, express or implied,
is intended to confer upon any person, other than the parties hereto and
their respective successors and assigns, any rights or remedies under or by
reason of this Agreement.
12.6 AMENDMENTS. This Agreement may be amended only by a written
instrument executed by Seller and Buyer (or Buyers assignee or transferee).
12.7 SEVERABILITY. If any provision of this Agreement or application to
any party or circumstance shall be determined by any court of competent
jurisdiction to be invalid and unenforceable to any extent, the remainder of
this Agreement or the application of such provision to such person or
circumstances, other than those as to which it is so determined invalid or
unenforceable, shall not be affected thereby, and each provision hereof shall
be valid and shall be enforced to the fullest extent permitted by law.
12.8 APPLICABLE LAW. This Agreement shall be construed under and in
accordance with the laws of state in which the Property is located.
12.9 COUNTERPARTS. This Agreement may be executed in two (2) or more
counterparts, each of which shall be an original but such counterparts
together shall constitute one and the same instrument notwithstanding that
both Buyer and Seller are not signatory to the same counterpart.
12.10 TIME OF THE ESSENCE. Time is expressly declared to be of the
essence of this Agreement, provided, however that in the event any date
hereunder falls on a Saturday, Sunday or legal holiday, the date applicable
shall be the next business day.
12.11 NO PERSONAL LIABILITY. The obligations of Seller hereunder shall
be binding only on the Property and neither Buyer nor anyone claiming by,
through or under Buyer shall be entitled to obtain any judgment extending
liability beyond the Property or creating personal liability on the part of
the partners of the Seller or of the officers, directors, shareholders,
advisors or agents of Seller or Sellers partners or any of their successors.
12.12 NO RECORDATION. Without the prior written consent of Seller, there
shall be no recordation of either this Agreement or any memorandum hereof, or
any affidavit pertaining hereto, and any such recordation of this Agreement
or memorandum hereto by Purchaser without the prior written consent of Seller
shall constitute a default hereunder by Buyer, whereupon this Agreement
shall, at the option of Seller, terminate and be of no further force and
effect. Upon termination, the Escrowed Amount shall be immediately delivered
to Seller, whereupon the parties shall have no further duties or obligations
to one another except as otherwise specifically provided herein.
12.13 WAIVER. The excuse or waiver of the performance by a party of any
obligation of the other party under this Agreement shall only be effective if
evidenced by a written statement signed by the party so excusing or waiving.
No delay in exercising any right or remedy shall constitute a waiver thereof,
and no waiver by Seller or Buyer of the breach of any covenant of this
Agreement shall be construed as a waiver of any preceding or succeeding
breach of the same or any other covenant or condition of this Agreement.
12.14 BINDING ON SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
12.15 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the transactions contemplated
herein, and it supersedes all prior discussions, understandings or agreements
between the parties. All Exhibits and Schedules attached hereto are a part
of this Agreement and are incorporated herein by reference.
12.16 CONSTRUCTION OF AGREEMENT. This Agreement shall not be construed
more strictly against one party than against the other merely by virtue of
the fact that it may have been prepared primarily by counsel for one of the
parties, it being recognized that both Buyer and Seller have contributed
substantially and materially to the preparation of this Agreement.
12.17 FURTHER INSTRUMENTS. Each party, promptly upon the request of the
other, shall execute and have acknowledged and delivered to the other or to
Escrow Agent, as may be appropriate, any and all further instruments
reasonably requested or appropriate to evidence or give effect to the
provisions of this Agreement and which are consistent with the provisions of
this Agreement.
12.18 BUYER REPRESENTED BY COUNSEL. Buyer hereby represents and warrants
to Seller that (i) Buyer is not in a significantly disparate bargaining
position in relation to Seller, (ii) Buyer is represented by legal counsel in
connection with the transaction contemplated by this Agreement, and (iii)
Buyer is buying the Property for business, commercial, investment or other
similar purpose and not for use as Buyers residence.
12.19 PREPARATION OF DOCUMENTS. All of the documents to be executed at
the Closing shall be in the form prepared to the reasonable satisfaction of
Sellers and Buyers counsel and delivered to Buyer on or before five (5)
business days prior to the Closing Date, provided that the failure to timely
deliver such documents shall not constitute a default by Seller hereunder.
ARTICLE 13
IRS FORM 1099-S DESIGNATION
In order to comply with information reporting requirements of Section
6045(e) of the Internal Revenue Code of 1986, as amended, and the Treasury
Regulations thereunder, the parties agree (1) to execute an IRS Form 1099-S
Designation Agreement in the form attached hereto as EXHIBIT K at or prior to
the Closing to designate the Escrow Agent (the DESIGNEE) as the party who
shall be responsible for reporting the contemplated sale of the Property to
the Internal Revenue Service (the IRS) on IRS Form 1099-S; (2) to provide the
Designee with the information necessary to complete Form 1099-S; (3) that the
Designee shall not be liable for the actions taken under this Agreement, or
for the consequences of those actions, except as they may be the result of
gross negligence or willful misconduct on the part of the Designee; and (4)
that the Designee shall be indemnified by the parties for any costs or
expenses incurred as a result of the actions taken hereunder, except as they
may be the result of gross negligence or willful misconduct on the part of
the Designee. The Designee shall provide all parties to this transaction
with copies of the IRS Forms 1099-S filed with the IRS and with any other
documents used to complete IRS Form 1099-S.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first set forth above.
SELLER:
CHICAGO COLONY APARTMENTS ASSOCIATES
By: Chicago Colony Apartments Company, L.P., general
partner
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing General Partner
By: PaineWebber Income Properties Seven Limited
Partnership, general partner
By: Seventh Income Properties Fund, Inc.,
managing general partner
By:/s/ Rock ▇. ▇'▇▇▇▇▇▇
-------------------------
Name: Rock ▇. ▇'▇▇▇▇▇▇
Title: Vice President
BUYER:
HOME PROPERTIES OF NEW YORK, L.P.
By: Home Properties of New York, Inc., General
Partner
By: /s/▇▇▇ ▇. ▇▇▇▇
-------------------------
Name: ▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
ESCROW AGENT:
TICOR TITLE INSURANCE COMPANY
By:/s/______________________
Name:
Title: