AGREEMENT FOR PURCHASE AND SALE OF REAL ESTATE
AGREEMENT FOR PURCHASE AND SALE OF REAL ESTATE, made as of the Effective
Date prescribed pursuant to Section 7.3 hereof, by and between Amherst Gardens
Associates, a New York limited partnership, having its address at 6724 Main St.,
Williamsville, New York 14221 ("Seller"), and Homes For America Holdings, Inc.,
a Nevada corporation with its principal office at One Odell Plaza, Yonkers, New
York 10701 ("Purchaser").
WHEREAS, Seller is the owner of 10.7+/- acres of real property at 85-245 E.
Amherst St., Buffalo, New York 14214, as described on Exhibit A attached hereto
and made a part hereof, improved with twelve (12) building complexes containing
a total of 201 rental units and one rental office, and parking for 240
automobiles (collectively, the "Property"); and
WHEREAS, Purchaser desires to purchase the Property, and Seller desires to
sell the Property to Purchaser for the price and upon the provisions herein set
forth.
NOW, THEREFORE, Seller agrees to sell and Purchaser agrees to purchase the
Property, upon the terms and subject to the provisions and conditions
hereinafter set forth.
1. DEFINITIONS The following terms have the following meanings when used in
this Agreement:
1.1 Escrow Agent means the office of Stewart Title Insurance Company or Monroe
Title Insurance Company, or an affiliate of either of them, that is
situated in Buffalo, New York, or of any other title insurance company
designated by Purchaser by written notice to Seller and to which Seller
does not reasonably object.
1.2 Notice means any statement or communication setting forth or incorporating
written information. Unless otherwise provided, any Notice or other
statement from or to any party shall be in writing and shall be deemed
given: (a) if sent by Certified or Registered Mail, Return Receipt
Requested two (2) calendar days after being deposited in the United States
mails, postage prepaid; or (b) if sent by nationally recognized prepaid
overnight courier (such as Federal Express or UPS), one (1) day after being
delivered to such courier; or (c) if sent by facsimile transmission, on the
date sent, if followed by a hard copy sent within one (1) day thereafter by
any other method authorized herein; or (d) if delivered by hand, on the
date of receipt. The foregoing notwithstanding, in the case of any required
Notice hereunder to declare default or breach, or to claim the Deposit, ten
(10) days from the date of receipt or of refusal of delivery shall be added
to any of the foregoing periods.
1.3 Person means any individual, corporation, company, partnership,
association, governmental body, department or agency, trust or any other
entity of any kind or nature.
1.4 Deposits means all Deposits prescribed in Section 2.2 below, and all other
deposits or payments made by or for the account of Purchaser that are
credits against the Purchase Price.
1.5 Personal Property means any and all furniture, fixtures and equipment owned
by or leased to Seller and used in connection with the operation,
management and maintenance of the Property.
2. PRICE AND TERMS OF PAYMENT
2.1 Price. The Purchase Price for the Property is four million, nine hundred
fifty thousand dollars ($4,950,000.00), reduced by the lesser of one-half
of the "Prepayment Fee" described in Section 4.4, if any, or
One-hundred-seventy-five thousand dollars ($175,000.00). The Purchase Price
includes the price of Personal Property consisting of office furniture
having a value of two-hundred fifty dollars ($250.00).
Exhibit 10.25 - Page 1
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2.2 Terms of Payment. The Purchase Price is payable as follows:
(a) Upon the execution of this Agreement by Purchaser, it shall deposit
with Escrow Agent the sum of Ten thousand dollars ($10,000.00) (the
"Initial Deposit").
(b). At the expiration of the "Study Period" as hereinafter prescribed, if
Purchaser does not elect to terminate this Agreement as hereinafter
provided, the Initial Deposit shall become "Conditionally
Non-Refundable" and Purchaser shall deposit with Escrow Agent the
additional sum of Fifteen thousand dollars ($15,000.00) (the "Second
Deposit"), which shall immediately be Conditionally Non-Refundable.
Any Deposit that is or has become Conditionally Nonrefundable shall
not be refundable to Purchaser unless (i) this Agreement is terminated
by Purchaser due to a material breach by Seller that remains uncured
after notice and an opportunity to cure, (ii) this Agreement is
terminated by Seller or Purchaser pursuant to Section 4.4 hereof, or
by Purchaser pursuant to Section 3.3, Section 4.3 or Section 6.2, or
(iii) if Seller is unable or fails to deliver title to the Property
that is good and marketable, and insurable at standard rates (or, if
insurable only at a premium rate, if Seller elects to pay an amount
equal to the difference between the standard and the premium rate for
an owner's policy). For purposes of this Agreement, any title
insurance premium for any standard New York State endorsement, or any
other endorsement that insures against any matter that is insured
against by that certain title insurance policy a true copy of which is
annexed hereto as Exhibit B, shall be deemed a part of the standard
rate and not a premium rate. Furthermore, if there is a termination by
Purchaser pursuant to Section 3.3 more than 45 days after the
Effective Date, with respect to a title objection that is a matter of
public record or actually known to Purchaser on or before the 45th day
after the Effective Date, the amount refundable to Purchaser shall be
subject to the deduction for Seller's attorney's fees provided in
Section 3.2(a) hereof.
(c). On delivery to Purchaser of the deed of conveyance at Closing, a sum
(payable in cash or certified funds) equal to the balance of the
Purchase Price (i.e., the Purchase Price reduced by the aggregate
amount of all Deposits). Such amount shall be further adjusted for all
appropriate Closing adjustments (if any) as provided elsewhere in this
Agreement. In addition, Purchaser shall pay at Closing, in immediately
available funds, the full amount of the Prepayment Fee; such amount
shall be paid to the mortgagee referred to in Section 4.4, or its
assignee or designee, in such form as such payee may reasonably
require 2.3 Escrow. Until Closing or the earlier termination of this
Agreement, all Deposits and any other portion of the Purchase Price or
any other amounts payable to Seller required to be deposited or
advanced under this Agreement prior to such Closing shall be held in
escrow by the Escrow Agent in a federally insured bank or savings
institution as Escrow Agent may choose, or in such other money-market
deposit account or other vehicle as shall be acceptable to both Seller
and Purchaser. The Escrow Agent shall be responsible for delivering
the monies including earnings thereon to the appropriate party, as
specified in this Agreement. Entitlement to the earnings on any monies
delivered to the Escrow Agent shall be deemed to follow entitlement to
the underlying monies; earnings shall not be credited against the
Purchase Price.
3. PURCHASER'S STUDY PERIOD AND DUE DILIGENCE.
3.1 Review Documents. Except as otherwise hereinafter provided, Seller shall
deliver to Purchaser, within fifteen (15) days after the Effective Date of
this Agreement, any of the following "Review Documents" relating to the
Property that have not heretofore been delivered to Purchaser or to its
attorney:
(i) a copy of the most recently updated abstract of title that is in
Seller's possession, if any; a copy of the most recent title insurance
policy issued to Seller or to any mortgagee of Seller is annexed
hereto as Exhibit B and made a part hereof;
(ii) the most recent Phase One environmental assessment of the Property
that is in Seller's possession;
Exhibit 10.25 - Page 2
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(iii)the most recent survey of the Property that is in Seller's
possession;
(iv) a copy of Seller's standard form of lease; Purchaser understands that
some tenants of rental units of the Property receive rental assistance
through government programs and are parties to government-prescribed
agreements but have not entered into Seller's lease form, and that
some others are month-to-month tenants having no written agreement
with Seller;
(v) all contracts and agreements in effect relating to operation,
management and/or maintenance of the Property, that are not cancelable
on notice of thirty (30) days or less ("Contracts"), including the
agreement relating to Seller's acquisition of boilers and payment
therefor (the "Boiler Lease");
(vi) the Rent Roll for the Property;
(vii)copies of real property tax bills and notices of assessment for the
two most recent years; and
(viii) operating statements for the for the Property for the years ending
December 31, 1998 and December 31, 1999, and for the six-month period
ending June 30, 2000, together with a list of capital expenditures
during the period of 24 months prior to April 1, 2000; provided that
if the operating statement for the year ending December 31, 1999 or
the six-month statement for 2000 is not currently available, such
statement shall be provided as soon as it is available.
3.2 Purchaser's Investigation; Financing.
(a) Purchaser shall have a period for investigation that shall extend
until one hundred sixty (160) days after the delivery of all Review
Documents (the "Study Period"). If Purchaser is dissatisfied with any
matter whatsoever, it may, on or before the last day of the Study
Period, give written notice terminating this Agreement. Within ten
(10) days after such termination, Seller shall provide Purchaser and
the Escrow Agent with a statement of attorneys' fees incurred in the
preparation and negotiation of this Agreement and performance thereof
to the date of termination, and the Escrow Agent shall remit to Seller
an amount, from the Initial Deposit, equal to the lesser of such
attorneys' fees or five thousand dollars ($5,000.00), and the balance
of the Initial Deposit shall be refunded to Purchaser. The foregoing
notwithstanding, there shall be no deduction for attorneys' fees if
the Notice of termination is given within forty-five (45) days after
the Effective Date. Neither party hereto shall thereafter have any
other or further liability or obligation to the other party hereto.
Notwithstanding the foregoing, the entire Initial Deposit shall be
refunded to Purchaser if this Agreement is terminated due to an
objection to title as set forth in Section 3.3 hereof.
(b) During the Study Period, Purchaser shall have the right to make such
inspections and investigations as it deems appropriate with respect to
the physical condition of the Property, including but not limited to
all environmental matters or matters that may affect the use,
occupancy and marketability of the Property.
(c) During the Study Period described above, (i) Seller shall allow
Purchaser to have access to and entry in or upon the Property at any
and all reasonable times and allow Purchaser to dig or drill test
holes and conduct inspections and other tests and activities that are
consistent with review of any matters Purchaser deems appropriate,
provided that Purchaser does not interfere with access to and/or
rightful use of the Property by any Person, does not create any hazard
to health or safety, does not create any nuisance and uses its best
efforts to minimize any disruption or disturbance, and, prior to such
entry, provides Seller with a certificate of insurance naming Seller
as an insured for public liability in the amount of not less than
$2,000,000.00; (ii) Seller shall, during normal business hours, allow
Purchaser access to and the right to examine and copy any and all
records, documents, permits, licenses, notices and other printed or
written material relating to the Property and the use thereof.
Purchaser shall restore the Property to substantially its condition as
at the date of Purchaser's first entry upon the Property in connection
with its investigation.
Exhibit 10.25 - Page 3
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(d) Ninety days after the Study Period begins, Purchaser shall give Seller
a status report setting forth the progress of its activities to
procure financing for the purchase, and of its Study Period
investigations.
(e) Promptly upon receipt of notice of any decision on any and all
applications by Purchaser for financing to be used in consummating the
purchase, or of any commitment for financing, Purchaser shall advise
Seller of such decision or commitment.
3.3 Termination or Cure of Title Objection; Extension of Deadlines.
(a) If Purchaser on or before the last day of the Study Period shall find
or discover any basis for objection to Seller's title, as determined
in accordance with the standards of title examination of the Erie
County Bar Association, or any matter that would cause such title to
be unmarketable or uninsurable, Purchaser shall give Seller Notice of
the objection. No objection shall be made based upon any of the
following "Permitted Encumbrances:" (i) any tenant lease, (ii) an
existing security interest against boilers on the Property to secure
the payment of Seller's obligations in connection with the procurement
thereof, (iii) any exception set forth in Schedule B of the title
insurance policy that is annexed hereto as Exhibit B; (iv) any
easement for any public utility; (v) any easement or encumbrance for
the widening or alteration of any street, road or right of way or
granted or conveyed to any public or governmental body or agency
relating to pedestrian or vehicular traffic; or (vi) any matter that
is a standard exception in a title insurance policy issued in New York
State. Any matters to which Purchaser does not object on or before the
expiration of the Study Period (except for matters that arise
thereafter) shall be deemed acceptable to Purchaser. Within ten (10)
days after receipt of Notice of an objection from Purchaser, Seller
shall give Notice to Purchaser either that this Agreement is
terminated (in which event the Initial Deposit shall be refunded to
the extent and in accordance with the provisions of Section 3.2(a)
above, and Seller shall reimburse Purchaser for the reasonable costs
of its title examination), or that Seller will make reasonable efforts
to cure the objection at its expense, specifying a period of time
within which such effort to cure shall be completed (the "Cure
Period"). In the event Purchaser notifies Seller of any title
objection, and Seller fails within the time set forth above to notify
Purchaser of Seller's election to cure such objection or terminate
this Agreement, Seller shall be deemed to have elected to terminate
this Agreement. If Seller elects (or is deemed to have elected) to
terminate this Agreement, Purchaser shall have the right, in its sole
discretion, by written Notice to Seller given within ten (10) days
after Seller's Notice, to waive the title objection and accept title
as is, in which event the termination of this Agreement by Seller
shall be null and void.
(b) If Seller has elected to cure the objection and the cure has not been
effectuated by the end of the Cure Period, then unless efforts to
effectuate the cure have been initiated and are continuing in good
faith, either party hereto may terminate this Agreement, and the
Initial Deposit shall be refunded to Purchaser to the extent and in
accordance with the provisions of Section 3.2(a) above, except that if
the objection is in the nature of a mortgage, lien or other
encumbrance that is curable solely by the payment of money, notice by
Seller that such cure will be effectuated at Closing from the proceeds
of sale shall constitute an adequate cure within the Cure Period.
(c) Purchaser shall have the right to re-examine the title to the Property
at Closing and to object to any defects or encumbrances that (i) shall
not have been the subject of an objection given by Purchaser pursuant
to paragraph (a) above and (ii) shall have been placed of record
following the earlier of the date of Purchaser's initial title report
(a copy of which shall be provided to Seller) or the 45th day after
the Effective Date (any such defects or encumbrances being the
"Subsequent Objections"). If any Subsequent Objections shall have
arisen, Purchaser may (x) waive the Subsequent Objections and proceed
to Closing, (y) by written Notice to Seller, terminate this Agreement
and receive a full refund of the Deposits (together with interest
earnings thereon, if any, and the reasonable costs of its title
Exhibit 10.25 - Page 4
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examination), or (z) by written Notice to Seller, extend the Closing
Date for 90 days and demand that Seller cure any Subsequent Objections
prior to Closing. If Purchaser has elected to terminate this
Agreement, Seller by written Notice given within ten (10) days of
Purchaser's Notice, may elect to cure such Subsequent Objections, and
specify a Cure Period therefor, in which event Purchaser's election to
terminate this Agreement shall be null and void. If Seller fails to
effectuate cure within the Cure Period, or if Purchaser shall have
demanded a cure and Seller has not effectuated same within 90 days
after Purchaser's demand, Purchaser may declare Seller to be in
default under this Agreement and pursue an action for specific
performance. Notwithstanding the foregoing, however, Seller shall not
be required to cure any Subsequent Objection that is in the nature of
a judgment, lis pendens or similar lien or encumbrance, for an amount
in excess of any insurance coverage, that arises out of an action,
suit or proceeding for injury to person or property, wrongful death,
or any environmental occurrence.
(d) Upon a termination of this Agreement pursuant to this Section (if not
nullified as provided above), the parties hereto shall be released
from any further liabilities or obligations hereunder or with respect
to the subject matter hereof, except for (i) Seller's obligation to
cause all or a portion of the Initial Deposit to be refunded as
provided herein and to pay reasonable costs of Purchaser's title
examination, (ii) Purchaser's obligation to restore the Property
pursuant to Section 3.2(c) above, or (iii) as otherwise expressly
provided in this Agreement. Furthermore, it is understood and agreed
that except for the refund of Deposits in accordance with the
provisions of this Agreement, and reimbursement to Purchaser for its
title examination expenses, Seller shall in no event have any
liability for direct or consequential damages arising or alleged to
arise out of any failure by Seller to perform this Agreement.
3.4 Assumption or Termination of Contracts. If Purchaser does not terminate
this Agreement as of the end of the Study Period, it shall give written
notice to Seller specifying any and all Contracts that Purchaser intends to
assume ("Assumed Contracts"). If any Assumed Contract will expire prior to
the Closing Date, Purchaser will be free to determine, in the exercise of
its reasonable business judgment, whether or not to renew or extend such
Assumed Contract. Purchaser shall assume the Boiler Lease. If, however,
Purchaser elects to not assume a contract, or to not renew any Assumed
Contract, in either case that relates to the provision of goods or services
that Seller reasonably requires for the operation of the Premises in the
ordinary course of business, Seller may nevertheless elect to either renew
such contract or enter into a substitute or replacement therefor, provided
that the term thereof shall not be longer than twelve (12) months, and
Purchaser shall assume any such renewal or substitute contracts (which
shall also be Assumed Contracts for purposes of this Agreement).
4. CONDITIONS PRECEDENT AND CLOSING; EXTENSIONS
4.1 Closing and Pre-Closing Deliveries.
(a) Unless extended as provided in Section 4.2 below, the Closing Date
shall be the 28th day of September, 2001. Closing shall take place at
the Office of the Erie County Clerk, or at such other location in
Buffalo, New York as Purchaser may reasonably specify.
(b) At Closing Seller shall deliver to Purchaser:
(i) a deed in the form of Exhibit "C" annexed hereto, giving good and
marketable title in fee simple, including a warranty against
grantor's acts, and free and clear of liens or encumbrances
except Permitted Encumbrances;
(ii) the originals of all tenant leases and tenant rental assistance
agreements then in effect and of all Assumed Contracts
accompanied by assignments, in form satisfactory to Purchaser, of
such leases, agreements and Assumed Contracts and written
evidence satisfactory to Purchaser that any necessary consents of
third parties, to any such Assignments, are in effect;
(iii) a Bill of Sale, for the Personal Property;
Exhibit 10.25 - Page 5
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(iv) any and all documents, certificates, affidavits and instruments
as may be required by any issuer of title insurance to Purchaser
or to any mortgagee of Purchaser, in an amount equal to the
Purchase Price, at standard rates (as defined in Section 2.2(b)
hereof), on an ALTA Form 1992 Owner's Policy with standard New
York State endorsements, free and clear of any and all liens,
defects, encumbrances, occupancies, leases, easements, covenants,
restrictions or other matters whatsoever, whether recorded or
unrecorded, except for Permitted Encumbrances; and
(v) possession of the Property, including the Personal Property.
As of the date prior to Closing, all utility and water and sewer charges
and all non-delinquent property and other taxes and assessments of any kind
imposed with respect to ownership and use of the Property shall be apportioned
between the Seller and Purchaser on the basis of the number of elapsed days in
the period or cycle for which the tax or charge is imposed. Seller shall be
responsible for all past due taxes and charges and any penalties and interest
thereon. Purchaser shall receive a credit for any and all pre-paid rents,
apportioned as of the Closing Date, and Purchaser shall pay Seller the amount of
any unpaid rents, apportioned to the Closing Date.
(c) At Closing, Purchaser shall deliver to Seller:
(i) the balance of the Purchase Price;
(ii) an amount equal to any applicable sales taxes on Personal
Property; and
(iii)Purchaser's written agreement, in a form acceptable to Seller,
accepting and assuming all Assumed Contracts and all tenant
leases and rental assistance agreements, and indemnifying Seller
for all obligations of Seller (as landlord) under all such
Assumed Contracts, tenant leases and rental assistance
agreements, which duty of indemnification shall survive until all
of such obligations have been performed or discharged.
(iv) Seller shall also pay the full amount of the Prepayment Fee to
the appropriate payee thereof.
(d) Seller shall pay all transfer taxes. Purchaser shall pay the costs for
recording the deed, but Seller shall pay for the discharge of any
encumbrance of record that is not a Permitted Encumbrance. Purchaser
shall pay premiums for title insurance, if desired. Each party shall
pay its own attorney's fees. Any other cost or expense of Closing
shall be adjusted between the parties consistent with customary
practice in Erie County, New York.
(e) Seller covenants that it will, at any time and from time to time after
Closing hereunder, upon request of the Purchaser, and without
incurring any material expense, do, execute, acknowledge and deliver,
or will use reasonable efforts to cause to be done, executed,
acknowledged, or delivered, all such further acts, deeds, conveyances
and assurances as may reasonably be required for the better conveying,
transferring, assuring and confirming the conveyance of title to the
Property to Purchaser in accordance with Section 4.1(b)(i).
4.2 Extensions.
(a) On or before August 21, 2001, Purchaser may extend the Closing
deadline to the last business day (and no other day without Seller's
consent) in any remaining calendar month in the year 2001, provided
that the Closing Date so designated is at least seventy (70) calendar
days after Purchaser's Notice to Seller of such extension. Upon the
giving of any such Notice, Purchaser shall make a "Third Deposit," of
Fifteen thousand dollars ($15,000.00), payable directly to Seller,
which shall be Conditionally Non-Refundable and applicable to the
Purchase Price. If the Closing Date as extended by Purchaser is
subsequent to October 31, 2001, Purchaser shall make a "Fourth
Deposit" of Fifteen thousand dollars on October 31, 2001, and (unless
the extended Closing Date is November 30, 2001), a "Fifth Deposit" of
Fifteen thousand dollars on November 30, 2001. The Fourth and Fifth
Deposits shall also be payable directly to Seller, and shall be
Conditionally Non-Refundable and applicable to the Purchase Price.
Exhibit 10.25 - Page 6
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(b) Purchaser acknowledges that (i) Seller may be required to give sixty
(60) days or greater notice to the holder of the Mortgage (or its
designee) of the date as of which the Closing will occur and the
Mortgage will be paid, and (ii) that an application fee, processing
fee or similar fee or charge (a "Consent Fee") may be imposed prior to
the Closing date in connection with Seller's application or request
for consent to prepayment and discharge of the Mortgage. Accordingly,
Purchaser hereby agrees as follows:
(i) Notwithstanding the date set forth in paragraph 4.2(a) above,
Seller shall have the right to submit any such request or
application at any time on or after July 20, 2001, unless
Purchaser shall have given Seller written notice of an extension
of the Closing Date. Within seven (7) days after demand by
Seller, Purchaser shall remit, directly to Seller, the amount of
any such Consent Fee, which for all purposes of this Agreement
shall be included in the Prepayment Fee as a component thereof if
Closing thereafter occurs.
(ii) If Purchaser elects, under paragraph 4.2(a) above, to extend the
date of Closing, its Notice thereof shall be accompanied by a
remittance of the amount of the Consent Fee that Seller will be
required to pay. The first such remittance shall be included in
the Prepayment Fee as a component thereof if Closing thereafter
occurs. If, however, more than one Consent fee is required to be
paid because Purchaser failed to give Notice of extension of the
Closing Date to Seller prior to July 20, 2001 or because
Purchaser extends the Closing Date on more than one occasion,
Purchaser shall be fully liable for the amount of all Consent
Fees (which liability shall survive a termination of this
Agreement), and the amount of any Consent Fee in excess of the
first Consent Fee paid under this Agreement shall not be included
in the Prepayment Fee.
(iii)If, after a Consent Fee has been paid, Closing fails to occur
other than due to Seller's breach of or default under this
Agreement, any remittance(s) paid by Purchaser under the
preceding subparagraphs (i) and/or (ii) shall be retained by
Seller, and if Purchaser has failed to make any required
remittance, it shall remain liable to Seller therefor
notwithstanding any other provision of this Agreement regarding
termination and the liability of the parties.
4.3 Purchaser's Conditions. Anything in this Agreement to the contrary
notwithstanding, and in addition to any other provision under this
Agreement providing for termination of this Agreement, Purchaser may
terminate this Agreement and decline to purchase of the Property if:
(a) There has been any material loss or damage to the Property that is not
covered by insurance, unless there is an equitable adjustment of the
Purchase Price to cover the cost of repair or replacement;
(b) Seller has breached or failed to perform any agreement or covenant
under this Agreement, or any representation or warranty by Seller
proves to be untrue at any time on or after the date hereof, in any
material respect;
(c) There is a taking of all or any portion of the Property by any
governmental or private authority;
(d) Except for tenants in occupancy in the ordinary course of business,
any Person, by lease or otherwise, shall have (or be in actual or
constructive possession and claim to have) any right of use, occupancy
or possession of all or any part of the Property; or
(e) Compared to the "Comparison Period," there has been a material
increase in recurring operating expenses or in vacancies or in rental
delinquencies, or any material decrease in rents or other revenues,
such that the "Net Operating Income" from the Property for the "Test
Period" utilizing consistent methods of accounting during both
periods, would be less than $560,000,00. As used in this subparagraph
(e), the following terms have the following meanings:
Exhibit 10.25 - Page 7
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(i) Comparison Period is the period from July 1, 1999 through June
30, 2000.
(ii) "Test Period" means the period from July 1, 2000 through June 30,
2001.
(iii)Net Operating Income, for the applicable period, means gross
income from rental, fees and charges paid by tenants or on
account of any rental arrangement, such as late charges, reduced
by the sum of the following items: real property taxes, insurance
premiums, payroll and employee benefits, payroll taxes, payments
or premiums relating to workers compensation, unemployment
insurance and disability insurance, water, gas, electric, sewer,
garbage removal, cable television and other utilities, materials
and supplies, advertising, rental expenses, telephone and office
expenses, landscaping and lawn care, painting and decorating,
recurring or ordinary maintenance and repairs, payments under the
Boiler Lease, and deposits to any replacement reserve or similar
account maintained by Seller (but exclusive of any amounts so
deposited that are intended, under the terms of Seller's current
mortgage, to be applied to items that are capital in nature).
Seller shall provide operating statements to Purchaser, (A) for the
Comparison Period, within 60 days after the Effective Date, and (B) for the Test
Period, at least ten days prior to the Closing Date, and (C) for the two
calendar years 1998 and 1999. If Seller provides its Test Period operating
statement more than thirty (30) days prior to the Closing Date, Purchaser may
not decline to close under this Section 4.3(e) after the thirtieth (30th) day
following its receipt of such statement.
4.4 Prepayment Fee Condition. Purchaser acknowledges that the Property is
subject to a mortgage made in May, 1999, securing indebtedness having a
principal balance exceeding $3,600,000.00 (the "Mortgage"), and that the
terms of such indebtedness prohibit prepayment prior to its third
anniversary, and that a yield maintenance fee or other prepayment premium
is applicable thereafter. Purchaser further acknowledges that if the
mortgagee's consent is obtained for prepayment of the Mortgage prior to the
third anniversary of the Mortgage, the cost or fee that may be incurred in
connection therewith may differ from an amount calculated on the basis of a
formula set forth in the Mortgage, and the total that may be required to be
paid cannot be calculated or determined at his time. As used in this
Agreement, "Prepayment Fee" means the aggregate amount of any and all yield
maintenance charge and other premiums, penalties, fees, charges or costs
that may be required to be paid to procure a discharge of the Mortgage
other than principal, interest and late charges (if any). Seller undertakes
to use efforts that in its sole judgment are reasonable to seek the
mortgagee's consent to prepayment of such indebtedness, and to minimize the
amount of the Prepayment Fee. Purchaser agrees to pay the Prepayment Fee in
full if it does not exceed Three-hundred fifty-thousand dollars
($350,000.00). If such mortgagee does not consent by the Closing Date to
payment of such indebtedness in full and release of the Mortgage, or if the
Prepayment Fee exceeds $350,000.00, either of the parties hereto may
terminate this Agreement, whereupon all Deposits, whether or not
Conditionally Non-refundable, shall be refunded to Purchaser in full, and
neither party hereto shall thereafter have any liability or obligation
whatsoever to the other relating to the subject matter of this Agreement;
provided, however, that Seller shall not terminate this Agreement because
the Prepayment Fee exceeds $350,000.00 if Purchaser agrees to pay the
entire amount of the Prepayment Fee.
4.5 Time of the Essence. The time set forth herein for Closing, after giving
effect to any extensions, is of the essence. If Purchaser fails to close by
the Closing Date established under this Agreement (including any
extensions), Seller may at any time thereafter give written Notice to
Purchaser that if it fails to close on a date specified in Seller's Notice
(which is at least 7 days after the giving of such Notice), this Agreement
shall be deemed terminated and all Deposits shall become the property of
Seller.
5. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller warrants and represents to
Purchaser as follows:
5.1 Title. Seller is the owner of record of the Property in fee simple
absolute, and does not hold title to the Property as nominee or trustee of
any other person.
Exhibit 10.25 - Page 8
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5.2 Existence, Organization and Authority, Status. Seller has all requisite
legal power and authority to own the Property, to enter into this
Agreement, and to perform its obligations thereunder. Seller is not under
the jurisdiction of a trustee, receiver or liquidator; has not filed or had
filed against it a petition in bankruptcy or for like relief under any Law;
is not a Foreign Corporation or Foreign Person or an Exempt Organization
(as any such term is defined in the Internal Revenue Code of 1986, as
amended); is not a not-for-profit organization or a professional
corporation or a fiduciary.
5.3 Taxes, Liens, Encumbrances.
(a) All taxes, charges, assessments, levies and impositions of any and
every kind against the Property (collectively "Charges") are current,
and Seller covenants that all Charges shall be paid when due for all
periods prior to the Closing date so long as this Agreement remains in
effect. Seller has no knowledge of any special taxes, levies, or
assessments pending or contemplated that would affect the Property.
(b) Other then liens for taxes not yet due and payable and Permitted
Encumbrances, and subject to Section 4.4 hereof, there are no liens or
encumbrances of any kind or nature affecting the Property that will
not be discharged as of Closing.
5.4 Absence of Other Agreements or Commitments. Neither the Seller nor the
Property is subject to or bound by any oral or written contract or
agreement or any indenture, document, instrument, order, decree, judgment
or injunction whereby any other person has or may have any right, title or
interest of any kind or nature whatsoever in the Property, or under which
the making and/or performance of this Agreement or any portion hereof by
Seller would constitute a breach, default or violation. The making and
performance of this Agreement by Seller is not prohibited by and will not
constitute a violation of any material provision of law. There are no
proceedings or actions pending or litigation pending or threatened against
the Seller, and/or affecting or involving the Property, the outcome of
which could prevent, prohibit or impair the performance by Seller of this
Agreement or any of its obligations hereunder.
5.5 Condemnation; Special Taxes. Seller has received no Notice of and to the
best of its knowledge there are no proceedings pending or contemplated,
with respect to a taking for public use of all or any portion of the
Property. Seller has received no Notice of any special tax, levy or
assessments affecting the Property.
5.6 No Violation of Contracts. Neither the Seller nor any other party is in
violation of or default under any Contract, nor has there been any act or
omission that with the passage of time or giving of notice would constitute
or give rise to any such violation or default. Until the Closing Date,
Seller will perform all Contracts in accordance with their terms.
5.7 No Physical Changes. Prior to Closing, Seller shall not make any material
physical alterations of the Property other than in the ordinary course of
maintenance and repairs, without Purchaser's prior approval, except as may
be occasioned by a disaster or emergency or to prevent or eliminate a
public health or safety hazard, or as may be ordered by any court or
governmental agency having jurisdiction, or as may be required by the
holder of the Mortgage. Seller makes no representation or warranty as to
the physical condition of the Property.
5.8 No Violation of Laws. To the best knowledge of Seller there exists no
material violation of any law, regulation, orders or requirements issued by
any governmental agency or authority having jurisdiction, nor any action in
any court on account thereof, against or affecting the Property.
5.9 No Environmental Hazard. To the best knowledge of Seller the Property is
not currently being used nor has it at any time since 1950 been used for
landfill, dumping, or other waste disposal or operations, and except for
the presence of asbestos insulating materials and lead-based paint, there
are in existence at the Property no materials, substances, products or
wastes of a toxic or hazardous nature (as hazardous wastes are defined in
the federal Resource Conservation and Recovery Act, 42 U.S.C. 6901 et.
seq., or other applicable law) such that their existence would violate
applicable laws or regulations. If Seller learns at any time that this
Exhibit 10.25 - Page 9
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representation and warranty is no longer true and correct (other than due
to any act of Purchaser) then Seller shall immediately deliver written
notice thereof to Purchaser whereupon Purchaser's sole remedy shall be to
elect to terminate this Agreement and obtain a full refund of the Deposits,
and thereafter the parties shall have no further rights or obligations
under this Agreement. Seller has
6. GENERAL PROVISIONS
6.1 Conveyances. Seller covenants and agrees that from and after the date of
this Agreement and for so long as this Agreement remains in force, Seller
will not sell, assign, rent, lease (except to tenants in the ordinary
course, subject to the provisions of this Agreement), convey (absolutely or
as security), grant a security interest in, grant any easement or license
or right to use with respect to, or otherwise dispose of the Property (or
any interest or estate therein) without the prior Consent of Purchaser, nor
suffer or permit any judgment or lien with respect to the Property, or make
any other Agreement having an effect contrary to Section 5.4 hereof.
6.2 Default. Failure by Purchaser to make, when due, any payment of any sum
required to be made by Purchaser hereunder, where such failure shall
continue for a period of five (5) days after written notice from Seller of
Purchaser's failure to make such payment, shall constitute a default
("Event of Default") hereunder by Purchaser. Upon the occurrence of any
Event of Default under this Section, Seller if not then in default of any
obligation on its part hereunder, may terminate this Agreement effective
ten (10) days following Seller's giving of Notice thereof, unless Purchaser
cures the default within such ten (10) day period. In the event Seller
rightfully terminates the Agreement as provided for in this Section, Seller
shall retain the Deposits paid hereunder as liquidated damages and neither
party shall have any further rights against or obligations to the other.
All amounts paid or payable by Purchaser hereunder that are Conditionally
Non-Refundable shall be refunded to Purchaser, except as otherwise
specified in Section 3.2(a) hereof, in the event that this Agreement is
terminated (i) at any time prior to the expiration of the Study Period
(including any extensions thereof), or (ii) at any time after the Study
Period due to failure of any condition to the obligations of Purchaser or
due to any breach or violation by Seller of this Agreement or due to the
inability or failure of Seller to convey title as required by this
Agreement, provided that Purchaser shall have the right to seek a decree of
specific performance upon a failure by Seller to consummate the transaction
provided for herein, in accordance with and subject to the provisions of
this Agreement. Except as provided above, and except for Seller's right to
recover any cost of restoration of any physical damage to the Property that
may have been caused by Purchaser if this Agreement is terminated without a
breach by Seller, neither party hereto shall have any claim against the
other for damages, direct or consequential, for any alleged breach or
failure of performance of this Agreement.
6.3 Brokers. The Seller shall be responsible for payment of real estate
brokerage commissions or fees or similar compensation to Reid, Meyers &
Associates, LLC ("RMA"), in the amount that may be payable pursuant to a
written agreement between Seller and RMA as a result of the making of this
Agreement and consummation of the transactions contemplated hereby. Each
party respectively represents to the other that no other broker has been
retained by either of them in connection with the transaction contemplated
by this Agreement. Each party agrees to indemnify the other against all
loss, cost, damage or expense arising out of claims against the other for
fees or commissions of any person[s] other than RMA. employed, retained or
alleged to have been employed or retained by such indemnifying party as a
broker, finder or consultant.
6.4 Declaration of Invalidity. If any provision of this Agreement should be
declared invalid or unenforceable by any authority of competent
jurisdiction, the remaining provisions of this Agreement shall remain in
full force and effect as if the invalid or unenforceable provision was
omitted in its entirety from the Agreement, unless it shall be determined
that the enforcement of the remaining provisions of this Agreement would
result in unjust enrichment or be inequitable in any material respect.
6.5 Waiver. No provision of this Agreement shall be waived or modified to any
extent, and no course of dealing or performance between the parties or any
usage of trade shall be effective, to modify any provision hereof or create
Exhibit 10.25 - Page 10
<PAGE>
any agreement with respect to any subject matter hereof, unless reduced to
writing and signed by the Person against whom enforcement is sought. No
prior oral or written agreement shall have any force or effect after the
signing of this Agreement. All such matters shall be merged herein, and be
superseded hereby. Neither party has made representations or agreements
other than those contained in this Agreement. Failure of a party to enforce
or insist upon performance of any of the provisions of this Agreement, no
matter how long such failure continues, will not be construed as a waiver
of any other provision, or as a waiver of any future right to enforce or
insist upon the performance of the same provision.
6.6. Security Deposits. At Closing, Seller shall deliver to Purchaser an
instrument of assignment, in form satisfactory to Purchaser, of all
tenants' security deposits held by Seller as of the Closing Date, together
with any and all bank accounts in which such deposits are held and
documentation sufficient to give Purchaser dominion and control of such
monies and accounts, together with a certified statement itemizing the
amount of each tenant's security deposit. Seller shall indemnify and hold
Purchaser harmless against any liability for any security deposit in excess
of the amount thereof transferred to Purchaser. Purchaser shall indemnify,
defend and hold Seller harmless against any claim of or liability to any
tenant in connection with any security deposit of such tenant delivered by
Seller to Purchaser at Closing. This Section shall survive the Closing.
7. COUNTERPARTS, EFFECTIVE DATE AND GOVERNING LAW
7.1 This Agreement shall not be binding or enforceable against either party
hereto until it (or multiple counterparts) shall have been executed by
Seller and by Purchaser, and a counterpart or counterparts hereof executed
by Purchaser and Seller, together with the Initial Deposit, shall have been
delivered to the Escrow Agent.
7.2 This Agreement may be executed in multiple counterparts, which shall
nevertheless constitute but one and the same Agreement, provided that no
counterpart bearing the signature of one party only shall be effective
unless an identical counterpart bearing the signature of the other part is
produced.
7.3 Effective Date. The Effective Date of this Agreement shall be the latest
date set forth below under a party's signature.
7.4 This Agreement shall be deemed made in and shall be governed by the laws of
the State of New York.
7.5 This Agreement and the exhibits and schedules annexed hereto contains the
entire understanding between the parties hereto with respect to the
Property and is intended to be an integration of any and all prior or
contemporaneous agreements, conditions, covenants or undertakings between
the parties hereto; and there are no promises, agreements, conditions,
undertakings, covenants, warranties or representations, oral or written,
express or implied, between and among the parties hereto with respect to
the Property or the subject matter hereof, other than as set forth herein.
No changes or modifications of this Agreement shall be valid unless the
same is in writing and signed by Seller and Purchaser. No purported or
alleged waiver of any of the provisions of this Agreement shall be valid or
effective unless in writing and signed by the party against whom it is
sought to be enforced.
7.6 All representations, warranties and covenants herein shall survive the
Closing hereunder for a period of twelve (12) months after the Closing
Date. If a party incurs reasonable attorney fees or costs in connection
with a dispute, breach, default or misrepresentation and is the prevailing
party in a legal action or proceeding to enforce the terms of this
Agreement, that party shall be entitled to recover those fees and costs
from the other party as and to the extent determined by the court or
arbitrator that determines such action or proceeding. Nothing in this
paragraph, however, shall be deemed to create any cause of action or right
to any remedy (other than recovery of such reasonable fees or costs) to
which a party would not be entitled under any other provision of this
Agreement.
Exhibit 10.25 - Page 11
<PAGE>
8. TAX-FREE EXCHANGE.
8.1 At Seller's option, the transaction contemplated hereby shall be structured
as an exchange under Section 1031 of the Internal Revenue Code, and
Purchaser shall co-operate with Seller and do any and all lawful things
that may be requested provided that Purchaser incurs no cost in so doing
(except costs advanced by Seller) and title to the Property is conveyed to
Purchaser at closing as otherwise required under this Agreement. Seller
agrees, however, that it shall not elect to structure the transaction as a
Section 1031 exchange if doing so would prevent the Mortgage from being
discharged as an encumbrance against the Property as contemplated in
Section 4.4 hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date set forth opposite their signatures below.
PURCHASER: HOMES FOR AMERICA HOLDINGS, INC.
by:------------------------------------------------------------------
Date
SELLER: AMHERST GARDENS ASSOCIATES
by:--------------------------------- and ------------------------------------
a general partner Date a general partner Date
ACCEPTANCE BY ESCROW AGENT
Niagara Square Abstract Company, having an office at 69 Delaware Avenue,
Buffalo, NY 14202, and being an authorized agency of Stewart Title Insurance
Company, does hereby (i) acknowledge the foregoing Agreement For Purchase And
Sale Of Real Estate by and between Amherst Gardens Associates as Seller and
Homes For America Holdings, Inc. as Purchaser, (ii) accept appointment as Escrow
Agent thereunder, and (iii) agree to receive and hold any and all Deposits paid
to it, and to distribute same, in accordance with the provisions of said
Agreement.
Niagara Square Abstract Company
by: ---------------------------------
Exhibit 10.25 - Page 12
<PAGE>
