<PAGE>
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
__________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) August 1, 1994
--------------
Pennsylvania Real Estate Investment Trust
--------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Pennsylvania 1-6300 23-6216339
-------------- ----------- -----------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
455 Pennsylvania Avenue, Suite 135, Ft. Washington, Pennsylvania 19034
- - -----------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (215) 542-9250
-----------------
- - -----------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
<PAGE> 2
Item 2. Acquisition or Disposition of Assets.
Registrant on August 1, 1994 purchased from Pembroke
Associates Limited Partnership, a Wisconsin limited partnership
("Seller"), The Palms of Pembroke Apartments, a 348-unit garden
apartment community, in Pembroke Pines, Broward County, Florida,
for $20,496,500. The purchase price was allocated $20,096,500
for the real property and $400,000 for the personal property. In
addition, closing costs, brokers fees and other expenses paid by
Registrant aggregated approximately $1,039,000 after
apportionments. The purchase was pursuant to a Purchase and Sale
Agreement dated May 9, 1994 as amended on June 28, 1994 by and
between the Trustees of Registrant and Seller. (The Purchase and
Sale Agreement and Amendment No. 1 to the Purchase and Sale
Agreement are attached hereto as Exhibit 10.7 and made a part
hereof.) There is no relationship between any Trustee, officer
or affiliate of the Registrant and any partner of the Seller.
Registrant paid cash for the apartment complex,
borrowing all the required proceeds from two banks. The
borrowing totaled $21,583,000, which included the purchase price,
closing costs, 1994 real estate taxes and miscellaneous expenses
incurred or to be incurred in connection with the acquisition.
Of the amount borrowed, $15,000,000 was from Meridian Bank, a
Pennsylvania banking corporation, Philadelphia, Pennsylvania at
the per annum rate equal to Meridian's National Commercial Rate
for a term of one year or such later date as may be established
by written agreement; and the balance of $6,583,000 was from
CoreStates Bank, N.A., a national banking association,
Philadelphia, Pennsylvania pursuant to an unsecured revolving
credit loan agreement at CoreStates' Prime Rate for a term of the
earlier of one year or three days after the closing by Registrant
of an offering of its equity securities. Both loans are general
obligations of Registrant.
Registrant anticipates spending an additional $500,000 for
installation of washers and dryers in the individual apartments,
an entry gate for controlled access, enhancements to the
landscaping and general refurbishing.
Location: The property is located on 24.5 acres on
Palms Boulevard, midway between Interstate 75 and the Florida
Turnpike. It is approximately one mile east of the Pembroke
Lakes Regional Mall and adjacent to a public park.
Description: The Palms of Pembroke was constructed in
1988 and consists of 31 two and three story buildings of concrete
block and wood frame construction, with pitched roofs and a
stucco exterior. The apartments are a mix of one, two and three
bedroom units, ranging in size from 568 to 1,159 square feet.
Some of the two and three bedroom units are townhouses. Tenants
have the use of a club house, swimming pool, jacuzzi, fitness
center and laundry facilities, all of which are part of the
premises. Of the 348 apartment units, 112 units have either canal
or lake view.
Taxes: In 1993 the ad valorem property taxes with
maximum discount were $325,684 and the 1993 personal property
taxes with maximum discount were $14,934.
Mortgage Payable: The property is unencumbered by debt.
<PAGE>
<PAGE> 3
Occupancy Percentage and Rentals: The following table
sets forth the number and types of apartment units, square
footage without balconies and the current renewal rent.
Sq. Ft. Per Unit Current Renewal
Number of Units Unit Type (without Balconies) Rent
24 Small 1 Bedroom 568 $ 600
1 Bath
48 1 Bedroom 1 Bath 660 645
48 1 Bedroom 1 Bath, 830 695
Den (or 2 Bedroom
1 Bath)
104 2 Bedroom 2 Bath 958 775
102 2 Bedroom 2.5 Bath 1,075 835
(Townhouse)
22 3 Bedroom 2.5 Bath 1,159 1,025
--- (Townhouse)
Average 919 767
Club House 3,942
348 Aggregate Sq. Ft. 323,874
===
The apartments are generally rented for a term of one
year and then automatically renew on a month-to-month basis. At
July 31, 1994 there were seven vacancies, for an occupancy rate
of 98%, 50 notices of intention to vacate and 22 applications for
units at the complex, leaving 35 (10%) units to lease.
Competition: There are numerous apartment complexes in
the immediate vicinity of The Palms of Pembroke, some of which
have been constructed within the past three years. Of the
competing apartment complexes, some have monthly rents which are
higher and some have monthly rents which are lower. Registrant
believes that the area in which The Palms of Pembroke is located
is where 50% of Broward County's population growth is expected to
occur through the year 2000.
Environmental: Registrant had a Phase I environmental
study performed prior to its acquisition of The Palms of Pembroke.
The property was also tested for Radon gas, which was found in 84
of the ground floor units. Registrant will perform additional
tests in an effort to determine if the level of Radon gas is
within federal and state guidelines. Radon is a naturally
occurring radioactive gas that, when it has accumulated in a
building in sufficient quantities, may present health risks to
persons who are exposed to it over time.
Management Arrangement: The apartment complex will be
managed by employees of the Registrant.
<PAGE>
<PAGE> 4
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits
(a) Financial Statements
(3) The Palms of Pembroke - Statements of Revenues
and Certain Expenses as of the Year Ended
August 31, 1993 and the Nine-Month Period
Ended May 31, 1994 (unaudited) Together with
Auditors' Report.
(b) Pro Forma Financial Information
1. Unaudited Pro Forma Consolidating
Balance Sheet as of May 31, 1994 and
Consolidating Statements of Operations for
the Year Ended August 31, 1993 and the
Nine-Month Period Ended May 31, 1994.
(c) Exhibits
10.7 Purchase and Sale Agreement between
Robert G. Rogers and Jonathan B. Weller, as Trustees, and on
behalf of all other Trustees of the Pennsylvania Real Estate
Investment Trust and Pembroke Associates Limited Partnership
dated May 9, 1994 (without exhibits); and Amendment No. 1 to
Purchase and Sale Agreement between Robert G. Rogers and Jonathan
B. Weller, as Trustees, and on behalf of all other Trustees of
the Pennsylvania Real Estate Investment Trust and Pembroke
Associates Limited Partnership dated June 28, 1994.
<PAGE>
<PAGE> 5
Item 7.(a) Financial Statements (3)
- - -----------------------------------
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
THE PALMS OF PEMBROKE
STATEMENTS OF REVENUES AND CERTAIN EXPENSES
AS OF THE YEAR ENDED AUGUST 31, 1993, AND THE
NINE-MONTH PERIOD ENDED MAY 31, 1994 (UNAUDITED)
TOGETHER WITH AUDITORS' REPORT
<PAGE>
<PAGE> 6
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Pennsylvania Real Estate Investment Trust:
We have audited the accompanying statement of revenues and certain
expenses of The Palms of Pembroke for the year ended August 31, 1993.
This financial statement is the responsibility of The Palms of Pembroke's
management. Our responsibility is to express an opinion on this financial
statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statement
is free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statement. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides
a reasonable basis for our opinion.
As described in Note 1, the accompanying statement of revenue and certain
expenses was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission and is not intended
to be a complete presentation of The Palms of Pembroke's revenues
and expenses.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the revenues and certain expenses of The Palms
of Pembroke for the year ended August 31, 1993, in conformity with
generally accepted accounting principles.
ARTHUR ANDERSEN & CO.
Philadelphia, Pa.,
August 5, 1994
<PAGE>
<PAGE> 7
THE PALMS OF PEMBROKE
---------------------
STATEMENTS OF REVENUES AND CERTAIN EXPENSES (NOTE 1)
----------------------------------------------------
Year Ended Nine-Month
August 31, Period Ended
1993 May 31, 1994
--------- -------------
(Unaudited)
REVENUES:
Rental income $ 2,799,119 $2,242,054
Miscellaneous income 166,413 134,507
----------- ----------
Total revenues 2,965,532 2,376,561
----------- ----------
CERTAIN EXPENSES:
Real estate and personal property taxes 340,618 266,662
Repairs and maintenance 279,528 246,381
Property management and administration 75,616 59,099
Insurance 32,407 31,130
Utilities 128,458 107,201
----------- ----------
Total certain expenses 856,627 710,473
----------- ----------
REVENUES IN EXCESS OF CERTAIN EXPENSES $ 2,108,905 $1,666,088
=========== ==========
The accompanying note is an integral part of these statements.
<PAGE>
<PAGE> 8
THE PALMS OF PEMBROKE
---------------------
NOTE TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES
----------------------------------------------------
1. BASIS OF PRESENTATION:
- - -------------------------
The statements of revenues and certain expenses reflect the operations of
The Palms of Pembroke (the "Property"), a 348-unit apartment complex
located in Pembroke Pines, Florida. The Property was acquired by Pennsylvania
Real Estate Investment Trust (the "Trust") from unaffiliated parties on
August 1, 1994.
The accompanying statements of revenues and certain expenses, in accordance
with certain rules and regulations of the Securities and Exchange Commission,
exclude certain expenses such as interest, depreciation and amortization, and
other costs not directly related to the future operations of the Property that
may not be comparable to the expenses expected to be incurred by the Trust in
the proposed future operations of the Property.
<PAGE>
<PAGE> 9
Item 7.(b) PRO FORMA FINANCIAL INFORMATION(1)
- - ---------------------------------------------
The following Pro Forma Consolidating Balance Sheet as of May 31, 1994, and
the Pro Forma Consolidating Statements of Operations for the year ended
August 31, 1993, and the nine-month period ended May 31, 1994, have been
prepared to reflect the acquisition transaction and the adjustments
described in the accompanying notes. The pro forma financial information is
based on the historical financial statements and should be read in conjunction
with the notes and management's assumptions thereto. The Pro Forma
Consolidating Balance Sheet was prepared as if the acquisition transaction
occurred on May 31, 1994. The pro forma financial information is unaudited
and not necessarily indicative of the consolidated results which actually
would have occurred if the acquisition transaction had been consummated at the
beginning of fiscal year 1993, nor does it purport to represent the future
financial position and results of operations from future periods.
<PAGE>
<PAGE> 10
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
-----------------------------------------
PRO FORMA CONSOLIDATING BALANCE SHEET
-------------------------------------
AS OF MAY 31, 1994
------------------
(unaudited)
<TABLE>
<CAPTION>
Pennsylvania
Real Estate
Pennsylvania Investment
Real Estate The Trust
Investment Trust Acquisition Consolidated
Historical (Note 2) Pro Forma
---------------- ------------- ------------
<S> <C> <C> <C>
ASSETS:
INVESTMENTS IN REAL ESTATE, at cost:
Apartment buildings $ 94,214,969 $21,535,800 (A) $115,750,769
Industrial properties 5,078,024 5,078,024
Shopping centers and retail stores 32,276,128 32,276,128
------------ ----------- ------------
Total investments in real estate 131,569,121 21,535,800 153,104,921
Less- Accumulated depreciation 32,768,165 32,768,165
------------ ----------- ------------
98,800,956 21,535,800 120,336,756
INVESTMENTS IN PARTNERSHIPS AND JOINT
VENTURES, AT EQUITY 15,970,944 15,970,944
ADVANCES TO PARTNERSHIPS AND JOINT VENTURES 2,304,413 2,304,413
NOTES RECEIVABLE 1,648,796 1,648,796
------------ ----------- ------------
118,725,109 21,535,800 140,260,909
LESS- Allowance for possible losses 1,680,000 1,680,000
------------ ----------- ------------
117,045,109 21,535,800 138,580,909
OTHER ASSETS:
Cash and cash equivalents 1,694,588 1,694,588
U.S. Treasury obligations, at cost 1,257,833 1,257,833
Rents and sundry receivables 351,869 351,869
Prepaid real estate taxes and expenses 3,178,985 47,200 (A) 3,226,185
------------ ----------- ------------
$123,528,384 $21,583,000 $145,111,384
============ =========== ============
The accompanying notes and management's assumptions are an integral part of this statement.
(Continued)
</TABLE>
<PAGE>
<PAGE> 11
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
-----------------------------------------
PRO FORMA CONSOLIDATING BALANCE SHEET
-------------------------------------
AS OF MAY 31, 1994
------------------
(unaudited)
(Continued)
<TABLE>
<CAPTION>
Pennsylvania
Real Estate
Pennsylvania Investment
Real Estate The Trust
Investment Trust Acquisition Consolidated
Historical (Note 2) Pro Forma
---------------- ------------- ------------
<S> <C> <C> <C>
LIABILITIES AND BENEFICIARIES' EQUITY:
Mortgage notes payable $ 44,184,656 $44,184,656
Bank loans payable 14,553,205 $ 21,583,000 (A) 36,136,205
Tenants' deposits and deferred rents 841,844 841,844
Accrued pension and retirement benefits 1,085,657 1,085,657
Accrued expenses and other liabilities 2,122,247 2,122,247
Minority interest in consolidated partnership 363,913 363,913
Beneficiaries' equity 60,376,862 60,376,862
------------ ------------ ------------
$123,528,384 $ 21,583,000 $145,111,384
============ ============ ============
The accompanying notes and management's assumptions are an integral part of this statement.
</TABLE>
<PAGE>
<PAGE> 12
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
-----------------------------------------
PRO FORMA CONSOLIDATING STATEMENTS OF OPERATIONS
------------------------------------------------
FOR THE YEAR ENDED AUGUST 31, 1993
----------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Pennsylvania
Real Estate The Palms of Pro Forma
Investment Trust Pembroke Adjustments Total
---------------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
REVENUES:
Gross revenues from real estate $21,083,218 $2,965,532 $ $24,048,750
Interest and other income 541,453 541,453
----------- ---------- --------- -----------
Total revenues 21,624,671 2,965,532 24,590,203
----------- ---------- --------- -----------
EXPENSES:
Property operating expenses 8,958,769 856,627 9,815,396
Depreciation and amortization 2,783,646 426,000(a) 3,209,646
General and administrative expenses 1,873,214 1,873,214
Mortgage and bank loan interest 2,222,253 1,295,000(b) 3,517,253
Provision for losses on investments 320,000 320,000
----------- ---------- --------- -----------
Total expenses 16,157,882 856,627 1,721,000 18,735,509
----------- ---------- --------- -----------
Income before minority interest, equity in income of
partnerships and joint ventures and gains on sales
of interests in real estate 5,466,789 2,108,905 (1,721,000) 5,854,694
MINORITY INTEREST (91,537) (91,537)
EQUITY IN INCOME OF PARTNERSHIPS AND
JOINT VENTURES 4,749,825 4,749,825
GAINS ON SALES OF INTERESTS IN REAL ESTATE 3,875,414 3,875,414
----------- ---------- --------- -----------
NET INCOME $14,000,491 $2,108,905 $(1,721,000) $14,388,396
----------- ---------- --------- -----------
NET INCOME PER SHARE $ 1.62 $ 1.66
----------- -----------
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 8,643,223 8,643,223
----------- -----------
The accompanying notes and management's assumptions are an integral part of this statement.
</TABLE>
<PAGE>
<PAGE> 13
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
-----------------------------------------
PRO FORMA CONSOLIDATING STATEMENTS OF OPERATIONS
------------------------------------------------
FOR THE NINE-MONTH PERIOD ENDED MAY 31, 1994
--------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Pennsylvania
Real Estate The Palms of Pro Forma
Investment Trust Pembroke Adjustments Total
---------------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
REVENUES:
Gross revenues from real estate $20,065,528 $2,376,561 $ $22,442,089
Interest and other income 202,403 202,403
----------- ---------- --------- -----------
Total revenues 20,267,931 2,376,561 22,644,492
----------- ---------- --------- -----------
EXPENSES:
Property operating expenses 8,402,600 710,473 9,113,073
Depreciation and amortization 2,557,986 320,000(a) 2,877,986
General and administrative expenses 1,789,948 1,789,948
Mortgage and bank loan interest 2,825,089 998,000(b) 3,823,089
Provision for losses on investments 240,000 240,000
----------- ---------- --------- -----------
Total expenses 15,815,623 710,473 1,318,000 17,844,096
----------- ---------- --------- -----------
Income before minority interest, equity in income of
partnerships and joint ventures and gains on sales
of interests in real estate 4,452,308 1,666,088 (1,318,000) 4,800,396
MINORITY INTEREST (170,897) (170,897)
EQUITY IN INCOME OF PARTNERSHIPS AND
JOINT VENTURES 3,629,138 3,629,138
GAINS ON SALES OF INTERESTS IN REAL ESTATE 12,329,707 12,329,707
----------- ---------- --------- -----------
NET INCOME $20,240,256 $1,666,088 $(1,318,000) $20,588,344
----------- ---------- --------- -----------
NET INCOME PER SHARE $ 2.34 $ 2.38
----------- -----------
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 8,661,786 8,661,786
----------- -----------
The accompanying notes and management's assumptions are an integral part of this statement.
</TABLE>
<PAGE>
<PAGE> 14
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
-----------------------------------------
NOTES AND MANAGEMENT'S ASSUMPTIONS
----------------------------------
TO UNAUDITED PRO FORMA
----------------------
CONSOLIDATING FINANCIAL STATEMENTS
----------------------------------
1. BASIS OF PRESENTATION
---------------------
Pennsylvania Real Estate Investment Trust ("the Trust") acquired The Palms
of Pembroke (the "Property"), a 348-unit apartment complex located in
Pembroke Pines, Florida, for a purchase price of $21,535,800. The Trust
acquired the Property by borrowing all of the required purchase price and
$47,200 of additional funding for certain escrows from two lenders.
The accompanying unaudited pro forma consolidating balance sheet is
presented as if the acquisition transaction occurred on May 31, 1994.
The accompanying unaudited pro forma consolidated statements of
operations are presented as if the acquisition transaction had been
made as of September 1, 1992.
These pro forma financial statements should be read in conjunction with the
historical financial statements and notes thereto as of August 31, 1993.
In management's opinion, all adjustments necessary to reflect the effects
of the acquisition of the Property by the Trust have been made.
The unaudited pro forma consolidated financial statements are not
necessarily indicative of the actual financial position at May 31,
1994, or what the actual results of operations of the Trust would have
been assuming the acquisition of the Property had been completed as of
September 1, 1992, nor are they indicative of the results of operations
for future periods.
2. ADJUSTMENTS TO PRO FORMA CONSOLIDATING BALANCE SHEET
----------------------------------------------------
(A) To reflect the acquisition of the Property for $21,535,800 and the
funding of certain escrows for $47,200 and the related $21,583,000 of
bank debt obtained to finance these amounts.
<PAGE>
<PAGE> 15
3. ADJUSTMENTS TO PRO FORMA CONSOLIDATING STATEMENTS OF OPERATIONS
---------------------------------------------------------------
Nine-Month
Period
Year Ended Ended
August 31, May 31,
1993 1994
---------- ----------
(a) To reflect the increase in depreciation
expense from the Property over a
40-year useful life $ 426,000 $ 320,000
---------- ---------
(b) To reflect an increase in interest
expense related to the $21,583,000
of new bank borrowings, at the prime
rate, for the acquisition of the
Property $1,295,000 $ 998,000
---------- ---------
<PAGE>
<PAGE> 16
Signatures
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
Pennsylvania Real Estate Investment Trust
Date: August 11, 1994 /s/ Dante J. Massimini
------------------------------------------
Dante J. Massimini, Vice President-Finance
and Treasurer
<PAGE>
<PAGE>
<PAGE> 1 EXHIBIT 10.7
PURCHASE AND SALE
AGREEMENT
FOR
THE PALMS OF PEMBROKE
INDEX
Section Page
1. PROPERTY BEING SOLD . . . . . . . . . . . . . . . . . . . 1
1.1 Real Property. . . . . . . . . . . . . . . . . . . . 1
1.2 Personal Property. . . . . . . . . . . . . . . . . . 1
1.3 Leases . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Right to Name. . . . . . . . . . . . . . . . . . . . 2
2. PURCHASE PRICE AND MANNER OF PAYMENT. . . . . . . . . . . 2
2.1 Purchase Price . . . . . . . . . . . . . . . . . . . 2
2.2 Manner of Payment. . . . . . . . . . . . . . . . . . 2
2.2.1 Deposit. . . . . . . . . . . . . . . . . . 2
2.2.2 Cash Balances. . . . . . . . . . . . . . . 3
2.3 Allocation . . . . . . . . . . . . . . . . . . . . . 3
3. TITLE . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . 3
4.1 Maintenance. . . . . . . . . . . . . . . . . . . . . 3
4.2 Alterations. . . . . . . . . . . . . . . . . . . . . 3
4.3 Lease. . . . . . . . . . . . . . . . . . . . . . . . 3
4.4 Security Deposits. . . . . . . . . . . . . . . . . . 4
4.5 Leasing Activity Reports . . . . . . . . . . . . . . 4
4.6 Notice to Buyer. . . . . . . . . . . . . . . . . . . 4
4.7 Update Rent Roll . . . . . . . . . . . . . . . . . . 4
4.8 Comply with Lease. . . . . . . . . . . . . . . . . . 4
4.9 No New Agreement . . . . . . . . . . . . . . . . . . 5
4.10 Tax Disputes . . . . . . . . . . . . . . . . . . . . 5
4.11 Employees. . . . . . . . . . . . . . . . . . . . . . 5
5. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . 5
5.1 Seller's Authority For Binding Agreement . . . . . . 5
5.2 Employment on "At-Will" Basis. . . . . . . . . . . . 6
5.3 Service Contracts. . . . . . . . . . . . . . . . . . 6
5.4 Condemnation . . . . . . . . . . . . . . . . . . . . 6
5.5 No Lawsuits. . . . . . . . . . . . . . . . . . . . . 6
5.6 No Tax Assessments . . . . . . . . . . . . . . . . . 6
5.7 Premises Leases. . . . . . . . . . . . . . . . . . . 6
5.8 Compliance with Law. . . . . . . . . . . . . . . . . 8
5.9 Insurance. . . . . . . . . . . . . . . . . . . . . . 9
5.10 Current Use is Unrestricted. . . . . . . . . . . . . 9
5.11 Leasing Commissions. . . . . . . . . . . . . . . . . 9
5.12 All Adequate Utilities . . . . . . . . . . . . . . . 9
5.13 All Permits, Approvals and Certificates. . . . . . . 9
5.14 Good Title to Property . . . . . . . . . . . . . . . 10
5.15 All Taxes and Assessments Paid . . . . . . . . . . . 10
5.16 FIRPTA . . . . . . . . . . . . . . . . . . . . . . . 10
5.17 Intentionally omitted. . . . . . . . . . . . . . . . 10
5.18 Mechanic's Liens . . . . . . . . . . . . . . . . . . 10
5.19 Inventory Schedule . . . . . . . . . . . . . . . . . 10
5.20 Correct Copies of Documents. . . . . . . . . . . . . 10
6. POSSESSION. . . . . . . . . . . . . . . . . . . . . . . . 11
<PAGE>
<PAGE> 2 EXHIBIT 10.7
7. BUYER'S INSPECTION AND APPROVAL . . . . . . . . . . . . . 11
7.1 Title Binder . . . . . . . . . . . . . . . . . . . . 11
7.2 Survey . . . . . . . . . . . . . . . . . . . . . . . 12
7.3 Physical and Financial Inspection. . . . . . . . . . 12
7.3.1 Leases . . . . . . . . . . . . . . . . . . 13
7.3.2 Contracts, Licenses, Documents . . . . . . 13
7.3.3 Utility Costs. . . . . . . . . . . . . . . 13
7.3.4 Schedule of Inventory. . . . . . . . . . . 13
7.3.5 Three Year's Maintenance Expenses. . . . . 13
7.3.6 Two Years' Tax Bills . . . . . . . . . . . 13
7.3.7 Three Years' Operating Statements. . . . . 13
7.3.8 Schedule of Violations . . . . . . . . . . 14
7.3.9 Schedule of Notices. . . . . . . . . . . . 14
7.3.10 Schedule of Required Improvements. . . . . . 14
7.3.11 Schedule of Replacements and Repairs . . . . 14
7.3.12 Zoning, Site Plan, Subdivision Plan or
Plat. . . . . . . . . . . . . . . . . . . . . . 14
7.3.13 Planned Developments. . . . . . . . . . . . 14
7.3.14 Takings or Changes . . . . . . . . . . . . . 14
7.3.15 Tax Assessments, Appeals and Increases. . . 14
7.3.16 Litigation. . . . . . . . . . . . . . . . . 15
7.3.17 Insurance Policies. . . . . . . . . . . . . 15
7.3.18 Schedule of Employees . . . . . . . . . . . 15
7.3.19 Crime History Report . . . . . . . . . . . 15
7.4 Intentionally omitted. . . . . . . . . . . . . . . . 15
7.5 Buyer's Indemnity for Inspection . . . . . . . . . . 15
7.6 Termination of Agreement . . . . . . . . . . . . . . 15
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. . . . . . . . 15
9. FIRE OR OTHER CASUALTY. . . . . . . . . . . . . . . . . . 16
9.1 Maintain Insurance . . . . . . . . . . . . . . . . . 16
9.2 Minimal Damage . . . . . . . . . . . . . . . . . . . 16
9.3 Substantial Damage . . . . . . . . . . . . . . . . . 16
9.4 Closing After Substantial Damage . . . . . . . . . . 16
9.5 Rent Insurance . . . . . . . . . . . . . . . . . . . 17
10. CONDEMNATION. . . . . . . . . . . . . . . . . . . . . . . 17
11. EXPENSE ALLOCATIONS . . . . . . . . . . . . . . . . . . . 17
12. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . 18
12.1 Time and Date and Place. . . . . . . . . . . . . . . 18
12.2 Documents. . . . . . . . . . . . . . . . . . . . . . 18
12.2.1 Seller's Documents and Other Items . . . . 18
12.2.1.1 Deed. . . . . . . . . . . . . . . . . 18
12.2.1.2 Bill of Sale. . . . . . . . . . . . . 18
12.2.1.3 Original Leases . . . . . . . . . . . 18
12.2.1.4 Original Licenses, Contract
Documents and Other
Personal Property . . . . . . . . . . 18
12.2.1.5 Assignment of Leases. . . . . . . . . 18
12.2.1.6 FIRPTA Certificates . . . . . . . . . 18
12.2.1.7 Tenant Letter . . . . . . . . . . . . 18
12.2.1.8 Intentionally omitted . . . . . . . . 19
12.2.1.9 Title Insurance Certificates. . . . . 19
12.2.1.10 Updated Rent Schedule . . . . . . . . 19
12.2.1.11 Seller Certificate. . . . . . . . . . 19
12.2.1.12 Organization Certifications . . . . . 19
12.2.1.13 Keys. . . . . . . . . . . . . . . . . 19
12.2.1.14 Tax Bills . . . . . . . . . . . . . . 19
12.2.1.15 Tax Reduction Rights. . . . . . . . . 19
12.2.1.16 Seller's General Partner's Change
of Name. . . . . . . . . . . . . . . . . . 19
<PAGE>
<PAGE> 3 EXHIBIT 10.7
12.2.1.17 Intentionally omitted . . . . . . . . 19
12.2.1.18 Intentionally omitted . . . . . . . . 20
12.2.1.19 Assignment of Intangible Personal
Property . . . . . . . . . . . . . . . . . 20
12.2.2 Buyer's Documents. . . . . . . . . . . . . 20
12.2.2.1 Balance of Purchase Price . . . . . . 20
12.2.2.2 Intentionally omitted . . . . . . . . 20
12.2.2.3 Secretary's Certificate . . . . . . . 20
12.2.2.4 Security Deposit Receipt. . . . . . . 20
12.2.3 Title Insurance. . . . . . . . . . . . . . 20
12.2.4 Necessary Documents. . . . . . . . . . . . 20
13. DEFAULT REMEDIES. . . . . . . . . . . . . . . . . . . . . 20
13.1 Seller's Default . . . . . . . . . . . . . . . . . . 20
13.2 Damages for Seller's Default . . . . . . . . . . . . 21
13.3 Liquidated Damages for Buyer's Default . . . . . . . 21
14. CONDITIONS PRECEDENT TO CLOSING . . . . . . . . . . . . . 21
14.1 Correctness of Warranties and Representations. . . 21
14.2 Compliance with Terms and Conditions . . . . . . . . 21
14.3 Buyer's Satisfaction with Inspection . . . . . . . . 22
15. PRORATIONS. . . . . . . . . . . . . . . . . . . . . . . . 22
15.1 Operating Expenses . . . . . . . . . . . . . . . . . 22
15.1.1 Rents. . . . . . . . . . . . . . . . . . . 22
15.1.2 Taxes. . . . . . . . . . . . . . . . . . . 22
15.1.3 Intentionally omitted. . . . . . . . . . . 22
15.1.4 Water, Sewer and Other Utility Charges.. . 22
15.1.5 Assigned Contracts.. . . . . . . . . . . . 23
15.1.6 Gas. . . . . . . . . . . . . . . . . . . . 23
15.1.7 Security Deposits. . . . . . . . . . . . . 23
15.2 Assessments. . . . . . . . . . . . . . . . . . . . . 23
15.3 Application of Prorations. . . . . . . . . . . . . . 23
15.4 Schedule of Prorations . . . . . . . . . . . . . . . 23
15.5 Readjustments. . . . . . . . . . . . . . . . . . . . 23
16. BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . 23
17. ESCROW AGENT. . . . . . . . . . . . . . . . . . . . . . . 24
17.1 Payment to Seller. . . . . . . . . . . . . . . . . . 24
17.2 Notice of Dispute. . . . . . . . . . . . . . . . . . 24
17.3 Escrow Subject to Dispute. . . . . . . . . . . . . . 24
17.4 Escrow Agents Rights and Liabilities . . . . . . . . 24
18. GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . 25
18.1 Notices. . . . . . . . . . . . . . . . . . . . . . . 25
18.2 Binding Effect . . . . . . . . . . . . . . . . . . . 26
18.3 Entire Agreement.. . . . . . . . . . . . . . . . . . 26
18.4 Governing Law. . . . . . . . . . . . . . . . . . . . 26
18.5 No Recording . . . . . . . . . . . . . . . . . . . . 26
18.6 Tender . . . . . . . . . . . . . . . . . . . . . . . 26
18.7 Execution in Counterparts. . . . . . . . . . . . . . 27
18.8 Further Instruments. . . . . . . . . . . . . . . . . 27
18.9 Time . . . . . . . . . . . . . . . . . . . . . . . . 27
18.10 Assignment of Agreement . . . . . . . . . . . . 27
18.11 Effective Date. . . . . . . . . . . . . . . . . 27
18.12 Time for Acceptance . . . . . . . . . . . . . . 27
18.13 Trustee Exculpation . . . . . . . . . . . . . . 28
18.14 Enforcement Costs . . . . . . . . . . . . . . . 28
18.15 Jurisdiction and Venue. . . . . . . . . . . . . 28
18.16 Radon Gas . . . . . . . . . . . . . . . . . . . 28
<PAGE>
<PAGE> 4 EXHIBIT 10.7
Exhibits to Agreement of Sale
"A" - Legal Description
"B" - Schedule of Inventory
"C" - Permitted Encumbrances
"D" - Rent Roll
"E" - Lease Form
"F" - Rental Rates
"G" - Service Contracts
"H" - Intentionally Omitted
"I" - Intentionally Omitted
"J" - Tenant Letter
<PAGE>
<PAGE> 5 EXHIBIT 10.7
PURCHASE AND SALE AGREEMENT
AGREEMENT OF SALE made this 9th day of May of 1994,
between ROBERT G. ROGERS AND JONATHAN B. WELLER, AS TRUSTEES, and
on behalf of all other Trustees of the Pennsylvania Real Estate
Investment Trust, pursuant to the Trust Agreement last amended
and restated as of December 16, 1987 and recorded in the Office
of the Recording of Deeds in Norristown, Montgomery County,
Pennsylvania, in Deed Book 4864, Page 1463, designated as
Pennsylvania Real Estate Investment Trust, having its principal
office at 455 Pennsylvania Avenue, Suite 135, Fort Washington, PA
19034 ("Buyer"), and PEMBROKE ASSOCIATES LIMITED PARTNERSHIP, a
Wisconsin limited partnership authorized to transact business in
Florida as PEMBROKE ASSOCIATES LIMITED PARTNERSHIP OF WISCONSIN,
having its principal office at 902 Clint Moore Road, Suite 104,
Boca Raton, FL 33487 ("Seller").
BACKGROUND
The Background of this Agreement is as follows:
A. Seller is the owner of a certain parcel of land at 9450
Palm Circle North, Pembroke Pines, Florida 33025, as legally
described on Exhibit "A" attached hereto together with the
improvements erected thereon, known as The Palms of Pembroke; and
B. The Seller desires to sell to Buyer and Buyer desires
to purchase from the Seller the property referred to in this
Agreement upon the terms and conditions set forth herein.
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and with the preceding Background
paragraphs incorporated by reference, the parties hereto,
intending to he legally bound hereby, as follows:
1. PROPERTY BEING SOLD.
Seller shall sell, transfer and convey to Buyer on the
Closing Date (as hereinafter defined),
1.1 Real Property. Fee simple interest in the tract
of land of approximately 24.5 acres described on Exhibit "A" with
all buildings and improvement thereon, and easements, rights of
way, privileges, hereditaments, appurtenances, and rights to any
land lying in the beds of any street, road or avenue, open or
proposed, adjoining thereto, and inuring to the benefit of said
land (hereinafter referred to as the "Premises"); and
1.2 Personal Property. All equipment, fixtures,
machinery and personalty of every description attached to or used
exclusively in connection with the Premises (and not owned by
tenants under leases of the Premises), including, without
limitation, those (a) listed on the Schedule of Inventory
attached hereto as Exhibit "B" (the "Tangible Personal
Property"), (b) all service, equipment, supply and maintenance
contracts with respect to or affecting the Premises ("Service
Contracts") which Buyer elects to assume, (c) all contract
rights, guaranties and warranties of any nature, and all
architect, engineer, surveyor or other real estate professional
plans, specifications, certification, contracts, reports, audits,
<PAGE>
<PAGE> 6 EXHIBIT 10.7
data or other technical descriptions ("Contract Documents"), (d)
to the extent assignable all governmental permits, licenses,
certificates, and approvals in connection with the ownership of
the Premises ("Licenses"), (e) all escrow accounts, deposits
(other than deposits made by Seller with utility service
companies and similar service companies), (f) all computers and
computer software programs located on or used exclusively in
connection with the Premises, and data, promotional materials and
business records pertaining to the Premises, but excluding the
right to the property management software and the Certiflex
accounting software (g) all of Seller's rights, claims, and
causes of action if any, to the extent they are assignable, under
any warranties and/or guarantees of manufacturers, contractors or
installers, rights against tenants and others relating to the
Premises or the operation or maintenance thereof, including to
the extent applicable, any warranties from any previous owners of
the Premises, and (h) all other personal property owned by the
Seller and exclusively used in connection with the ownership,
operation and maintenance of the Premises and other property
related to the Premises, (all of the foregoing collectively
referred to as "Personal Property"); and
1.3 Leases. All leases, licenses (to the extent
transferable) and other occupancy agreements for any part of the
Premises, and all prepaid rent and unapplied security deposits,
as of the Adjustment Date (the "Leases").
1.4 Right to Name. Any right, title and interest of
Seller in and to the name "The Palms of Pembroke" and the right
to all printing styles, trademarks and logos ("Name").
The Premises, Personal Property, Leases and Name are sometimes
herein referred to as "Property."
2. PURCHASE PRICE AND MANNER OF PAYMENT.
2.1 Purchase Price. Buyer shall pay the sum of Twenty
Million Seven Hundred Forty-Six Thousand Five Hundred Dollars
($20,746,500) (hereinafter referred to as the "Purchase Price")
subject to adjustment as provided in this Agreement, including,
without limitation, the Expenses set forth in Section 11.
2.2 Manner of Payment. The Purchase Price shall be
paid in the following manner:
2.2.1 Deposit. By delivery, contemporaneously
with the signing of this Agreement, of Buyer's good check in the
amount of $50,000 to Cohen, Shapiro, Polisher, Shiekman and Cohen
(hereinafter referred to as "Escrow Agent" or "Escrowee"). This
sum and all other sums paid by Buyer to the Escrow Agent under
this Agreement, together with all interest therein, (hereinafter
referred to as the "Deposit") shall be held by Escrow Agent in a
federally insured money market account at an institution to be
designated by Buyer until termination or consummation of this
Agreement. Unless Buyer exercises its right to cancel this
Agreement, upon the earlier of (a) the expiration of the
Inspection Period or (b) waiver by Buyer of its rights to object
to the condition of the matters subject to inspection under
Section 7, Buyer shall pay an additional $150,000 to the Escrow
Agent to be added to the Deposit upon the expiration of the
Inspection Period.
<PAGE>
<PAGE> 7 EXHIBIT 10.7
2.2.2 Cash Balances. The balance by delivery
to the Seller on the Closing Date by wire transfers of federal
funds in the amount of $20,546,500, subject to adjustment as
herein provided.
2.3 Allocation. The purchase price shall be allocated
as follows: (a) $20,346,500 shall be allocated to the Premises,
and (b) $400,000 to Personal Property.
3. TITLE. On the Closing Date Seller shall convey to
Buyer good and marketable fee simple title to the Premises
subject only to those rights of way, easements, covenants
restrictions, and objections to title ("Permitted Exceptions")
listed on Exhibit "C" and in the Title Binder (defined below),
unless identified by Buyer to Seller as Title Objections (defined
below) and Seller has agreed to remove them, and subject to the
rights of tenants listed on the rent roll attached hereto as
Exhibit "D", and tenants under new leases permitted under the
terms of this Agreement, which title shall be insurable at
regular rates by a reputable title insurance company ("Title
Company") under an ALTA 1970 Form B (Revised 10/17/70 and
3/30/84) title insurance policy ("Title Policy"), and shall, to
the extent available, permit mortgage insurance to issue at
simultaneous issue rates. Seller and Buyer consent to use
Chicago Title Insurance Company as the Title Company, through its
issuing agent, the law firm of Shutts & Bowen of West Palm Beach,
Florida.
4. COVENANTS. In addition to the covenants contained in
the other Sections of this Agreement, Seller covenants, it shall:
4.1 Maintenance. At all times prior to the Closing
Date, maintain the Property in good condition and repair,
reasonable wear and tear excepted; clean roof, paint building
exteriors and restore ancillary landscaping of the buildings
which have not been painted within the previous 24 months in the
same fashion as performed for buildings painted within such
period and, in accordance with the same schedule currently being
following by Seller (accordingly, 4 buildings will not be painted
and their landscape will not be restored prior to the Closing
Date); operate the Property with the same management practices
and leasing standards as currently maintained; and, pay in the
normal course of business sums due for work, materials or service
furnished or otherwise incurred in the ownership and operation of
the Property prior to Closing.
4.2 Alterations. Not make or permit to be made any
alterations, improvements or additions to the Property without
the prior written consent of Buyer, except those made by tenants
pursuant to the right to do so under their leases or by Seller if
required under any lease or those made in the ordinary course of business.
4.3 Lease. Except in the case of entering into new
Leases where Seller uses the form of lease attached hereto as
Exhibit "E" ("Lease Form") with rents at a rate no less than
those set forth in the attached Exhibit "F" ("Rental Rates"), not
enter into any new lease, nor amend, modify or, except in the
event of a material default by the tenant thereunder, terminate
any existing Lease, except in the ordinary course of business,
without Buyer's consent. Seller may renew existing Leases at the
rates set forth in "Exhibit F-1".
<PAGE>
<PAGE> 8 EXHIBIT 10.7
4.4 Security Deposits. Not apply any tenant's
security deposit to the discharge of such tenant's obligations,
except in the event Seller terminates such tenant's lease as a
result of a material default by such tenant under its lease.
4.5 Leasing Activity Reports. Notify Buyer each
Monday of the prior week's (i) number of vacant units, (ii)
number of rental applications with deposit, and (iii) number of
notices for move out.
4.6 Notice to Buyer. Notify Buyer promptly of the
occurrence of any of the following:
(i) a fire or other casualty causing damage to
the Property;
(ii) receipt of notice of eminent domain
proceedings or condemnation of all or any part of the Property;
(iii) receipt of a notice from any
governmental authority or insurance underwriter relating to the
condition, use or occupancy of the Property or any real property
adjacent to the Property or setting forth any requirements with
respect thereto;
(iv) receipt or delivery of any default for which
the lease can be terminated or termination notice or claim of
offset or defense to the payment of rent from any tenant of all
or any portion of the Property;
(v) receipt of any notice of default from the
holder of any lien or security interest in the Property or any
portion thereof which could affect Seller's ability to complete
its obligations under this Agreement or Buyer's rights under this
Agreement;
(vi) notice of any actual or threatened litigation
affecting or relating to the Property;
(vii) the commencement of any strike,
lock-out, boycott or other organized labor trouble effecting the
Property; or
4.7 Update Rent Roll. Every thirty (30) days
hereafter and at the Closing Date, provide Buyer with an update
of the rent roll as of one day prior thereto.
4.8 Comply with Lease. Perform all obligations of the
landlord with respect to tenants in possession under the Leases
as required by the Leases or by any order or direction of any
governmental authority having jurisdiction thereof, and to the
extent required by law, maintain all security deposits held under
all Leases for all or any part of the Premises by posting a bond
in compliance with Florida law.
4.9 No New Agreement. Except for agreements which can
be terminated on not more than 30 days' notice and the execution
of Leases permitted pursuant to Section 4.3 hereof, not enter
into or renew any other agreements which affect the Property or
the transactions contemplated by this Agreement without the prior
written consent of Buyer; and, not permit the creation of any
liability which shall bind Buyer, or the Premises after Closing,
other than real estate taxes, special assessments or utility
charges and other liabilities permitted under this Agreement.
<PAGE>
<PAGE> 9 EXHIBIT 10.7
4.10 Tax Disputes. Notify Buyer of any tax assessment
disputes (pending or threatened) prior to Closing and Seller will
not agree to any changes in the real estate tax assessment, nor
settle, withdraw or otherwise compromise any pending claims with
respect to prior tax assessments without Buyer's participation
and prior written consent. If any proceedings shall result in
any reduction of assessment and/or tax for the tax year in which
the Closing occurs, it is agreed that the amount of tax savings
or refund for such tax year less the fees and disbursements in
connection with such proceedings ("Costs of Proceedings"), shall
be apportioned between the parties as of the date real estate
taxes are apportioned under this Agreement. The Costs of
Proceedings shall be reimbursed to Buyer and Seller upon delivery
of actual paid receipts, itemized in detail as to time and
materials expended on the proceedings.
4.11 Employees. Seller shall terminate the employment
of all of its employees as of the Closing Date. Not less than
fifteen (15) days prior to the Closing Date, Buyer shall notify
Seller of all employees of Seller whom Buyer intends to employ
after the Closing Date.
5. REPRESENTATIONS AND WARRANTIES. In order to induce the
Buyer to enter into this agreement, the Seller hereby warrants
and represents to the Buyer in addition to any other
representations and warranties contained in this Agreement, that
the following warranties and representations are true now and
will be true at Closing:
5.1 Seller's Authority For Binding Agreement. Seller
is a duly organized and existing limited partnership formed under
the laws of Wisconsin, and is duly qualified to conduct business
in the State in which the Premises are located. Seller has full
power, right and authority to own its properties, to carry on its
business as now conducted, and to enter into and fulfill its
obligations under this Agreement. Each of the persons executing
this Agreement on behalf of Seller is authorized to do so. This
Agreement is the valid and legally binding obligation of Seller,
enforceable against Seller in accordance with its terms. The
execution and delivery of this Agreement and compliance with its
terms will not conflict with or result in the breach of any
applicable law, judgment, order, writ, injunction, decree, rule
or regulation of any court, administrative agency or other
governmental or quasi-governmental authority applicable to
Seller. The execution and delivery of this Agreement and
compliance with its terms will not conflict with or result in the
breach of any provision or of any other agreement, document or
instrument to which Seller is a party or by which it or the
Premises is bound. Seller shall deliver to Buyer such
documentation as Buyer may reasonably request to evidence the
foregoing, including, without limitation, the items identified in
Section 12 of this Agreement.
5.2 Employment on "At-Will" Basis. All persons and
entities presently employed in connection with the operation and
maintenance of the Premises are employed on an "at will" basis;
are dischargeable upon no more than thirty (30) days notice, and,
shall be terminated by Seller as of Closing. To the best of
Seller's knowledge, there are no organized labor disputes pending
or contemplated pertaining to the operation or maintenance of the
Premises or any part thereof. Seller is not party to any
collective bargaining agreement or labor contract; nor has Seller
agreed to recognize any union or collective bargaining unit.
<PAGE>
<PAGE> 10 EXHIBIT 10.7
5.3 Service Contracts. Exhibit "G" attached hereto is
a complete list of all Service Contracts with respect to or
affecting the Premises, and except as otherwise disclosed on
Exhibit "G", each of such Service Contracts is terminable at will
without penalty or cancellation fee upon no more than thirty (30)
days notice except for the Agreement with Erin Communications,
the agreement with Haas Publishing, and the common laundry room
equipment lease with Cleanco (collectively, the "Assumed
Agreements") and, unless otherwise directed by Buyer, shall
(other than the Assumed Agreements) be terminated by Seller as of
Closing. Except as set forth on Exhibit "G", no written notice
of default or breach by Seller in the terms of any of such
Service Contracts have been received by Seller. To Seller's best
knowledge, Seller has performed, and at Closing, shall have
performed all obligations which it has under said Service
Contracts.
5.4 Condemnation. To Seller's best knowledge, there
is no condemnation or eminent domain proceeding pending with
regard to any part of the Property and the Seller does not know
of any proposed condemnation proceeding with regard to the
Property or any part thereof.
5.5 No Lawsuits. There are no claims, lawsuits or
proceedings pending, or to the best of the Seller's knowledge,
threatened in any court or before any governmental agency against
or relating to Seller or the Property or which could affect
Seller's performance of its obligations or Buyer's rights under
this Agreement (whether or not covered by Seller's liability
insurance) except for actions for possession, damages and or rent
against defaulted tenants as disclosed in Exhibit "D" and the
actions disclosed pursuant to Section 7.3.16. Any litigation for
eviction of tenants which may be pending as of the Closing Date
shall be assumed by Buyer and Buyer shall be substituted for
Seller in such actions and Buyer's counsel shall be substituted
for Seller's counsel as counsel of record in such actions.
5.6 No Tax Assessments. To Seller's best knowledge,
there are no public improvements in the nature of off-site
improvements, or otherwise, which have been ordered to be made
and/or which have not heretofore been assessed, and, there are
neither special or general assessments currently affecting or
pending against the Property except as set forth in the Title
Binder, nor any pending threatened, or proposed changes to public
or private roads which provide access or major traffic service to
the Premises.
5.7 Premises Leases. There are no oral or written
leases or rights of occupancy or grants or claims of right, title
or interest in any portion of the Premises other than the leases
(the "Leases") listed on the rent roll which is attached hereto
as Exhibit "D" and made a part hereof. The rent roll attached
hereto as Exhibit "D" has been prepared by Seller, using its
reasonable efforts to identify (i) each unit by number, (ii)
each vacancy, (iii) each tenant of the Premises, (iv) the initial
date of that tenant's lease, (v) the expiration date of that
tenant's lease, (vi) the monthly minimum rental charge, (vii)
arrearages, if any and whether the latest rent due has been paid,
(viii) the amount of prepaid rent, if any, and (ix) the amount of
the security deposit plus all interest to which the tenant is
entitled. The rent roll shall be supplemented by a written
disclosure from Seller to Buyer to the extent such information
<PAGE>
<PAGE> 11 EXHIBIT 10.7
applies, prepared by Seller, using its reasonable efforts to
identify (i) a description of the documents constituting said
Tenant's Lease, including all modifications, if different from
the Lease Form; (ii) the amount or description of any
concessions, allowances, rebates, refunds, refunds, pet deposits,
key deposits, cleaning fees, setoffs, reduced rent, escrow or
security deposits made by the tenant under said Tenant's Lease;
(iii) any options to renew, extend, purchase, cancel or
terminate; (iv) any defaults, outstanding notices of defaults of
any kind or nature whatsoever, claims of defaults or similar
claim under Leases, (v) whether such tenant is an employee of
Seller, (vi) whether such tenant is providing or provided
occupancy on a basis other than an individual or family long-term
basis, such as in connection with a corporate or company lease
arrangement, a short-term basis or a transient basis, (vii)
whether landlord is obligated to provide special services to such
tenant, such as furnishings, housecleaning, or maid service, and
(viii) such other information as Buyer's lender may request. No
tenant has asserted in writing that Seller is in default under
any of the Leases or asserted in writing any claim or basis for
any claim for free or reduced rent or right of setoff against the
landlord or the rent under the Leases, and Seller and its agent
have no knowledge of any default or any event which has taken
place which, with the passage of time, could become an event of
default. Seller has the sole right to collect any rents under
the Leases and neither such right nor any of the Leases has been
assigned, pledged, hypothecated or otherwise encumbered by Seller
except as additional collateral for the existing mortgage upon
the Premises which shall be satisfied at Closing. No holder of
any such collateral assignment has asserted or exercised any of
its right to collect such rents. Each of the Leases is in the
form of the Lease Form, is valid and subsisting and in full force
and effect, to Seller's best knowledge the tenant is in actual
possession in the normal course and the rents set forth in
Exhibit "D" are the actual rents, income and charges being
collected by Seller under the Leases. The amount of each
security deposit and prepaid rent contains, where required by law
or otherwise applicable, interest which has accrued in accordance
with law. No tenant or other person has any right or option to
acquire the Premises, or any part thereof, or to terminate any of
the rights currently appurtenant to the Premises, and there are
no restrictive covenants in any leases. No tenant of the
Premises under any of the Leases has, and shall not at Closing
have, prepaid any rent under any of the Leases for more than one
(1) month, except prepaid rent which shall be credited to Buyer
at Closing. Except as otherwise set forth on Exhibit "D" no
security deposits by tenants have heretofore been returned or
applied to charges against the tenants. Seller shall deliver to
Buyer at Closing an updated rent roll, certifying the same as
true, correct and complete as of the day before Closing. It is
understood that Seller has prepared the rent roll in good faith
and without any intention to misstate or omit any of the
information set forth in the rent roll. However, Buyer
acknowledges that the rent roll may contain unintentional errors
or omissions and the terms of the Leases shall control with
respect to any discrepancies between information set forth in the
Leases and information set forth in the rent roll.
<PAGE>
<PAGE> 12 EXHIBIT 10.7
5.8 Compliance with Law.
(i) To Seller's best knowledge, but without
independent investigation, the Property and the continued
maintenance, operation, and use of them comply with all
requirements of federal, state and local law, and all
requirements of all governmental bodies or agencies having
jurisdiction thereof, including, without limitation, the Fair
Housing Act, as amended from time to time; and, there are no
outstanding notices of any violations issued by governmental
authority having jurisdiction of the Property.
(ii) To Seller's knowledge, but without
independent investigation, no Hazardous Substances (defined
below) and no Wastes (defined below) are present on the Premises
and there has been no use of the Premises that may, under any
federal, state or local environmental statute, ordinance or
regulation, require, at any time, any closure or cessation of the
use or occupancy of the Premises and/or impose, at any time, upon
the owner of the Premises any clean-up or other monetary
obligation. Seller hereby further represents and warrants that
to Seller's best knowledge, but without independent
investigation, it has not been identified in any litigation,
administrative proceeding or investigation as a responsible party
or potentially responsible party for any liability for clean-up
costs, natural resource damages or other damages or liability for
prior disposal or release of Hazardous Substances, Wastes or
other environmental pollutants or contaminants, and that no lien
or superlien has been recorded, filed or otherwise asserted
against any real or personal property of Sellers for any clean-up
costs or other responses costs incurred in connection with any
environmental contamination that is attributable, in whole or in
part, to Seller. Seller hereby indemnifies and holds Buyer
harmless from (a) any governmental authority, and (b) any other
third party, but as to such other third party only for a claim
made within the twelve months succeeding Closing, as to any and
all liability, loss or damage suffered or incurred as a result of
a claim, demand, cost or judgment arising from the deposit,
storage, disposal, burial, dumping, injecting, spilling, leaking,
or other placement or release in or on the Premises of Hazardous
Substances or Wastes arising prior to the Closing Date. This
indemnification shall not apply to any matters which are
disclosed in the environmental audit to be obtained by Seller
pursuant to this section or as to which Seller leanrs or with
reasonable diligence could have been learned of prior to Closing.
For purposes of this Agreement, "Hazardous Substances" means
those elements and compounds which are designated as such in
Section 101(14) of the Comprehensive Response, Compensation and
Liability Act ("CERCLA"), 42 U.S.C. Section 9601 (14), as amended
through the date hereof, all petroleum products and by products,
and any other hazardous substances as that term may be further
defined in any current applicable federal state or local laws
which are in concentrations, quantities or containers which
violate applicable laws or require permits, licenses or approvals
which have not been obtained to comply with applicable laws;
which have not been obtained and excepting elements and compounds
which are present or are used in compliance with applicable law
and "Hazardous Wastes" means any hazardous waste, residential or
household waste, solid waste, or other waste as defined in
applicable federal, state or local laws which are in
concentrations, quantities or containers which violate applicable
<PAGE>
<PAGE> 13 EXHIBIT 10.7
laws or require permits, licenses or approvals which have not
been obtained to comply with applicable laws which have not been
obtained and excepting elements and compounds which are present
or are used in compliance with applicable law. Seller has not
received any summons, citation, directive, letter or other
communication, written or oral, from any governmental or quasi-
governmental authority concerning any intentional or
unintentional action or omission on Seller's part which (a)
resulted in the releasing, spilling, leaking, pumping, pouring,
emitting, emptying or dumping of Hazardous Substances or Wastes,
or (b) related in any way to the generation, storage, transport,
treatment or disposal of Hazardous Substances or Wastes. Seller
represents and warrants that to Seller's best knowledge, without
independent investigation, the Premises have not been identified
on the federal CERLIS, the National Priorities List (40 C.F.R.
Part 300, App. B) or any state or local list of potential
hazardous waste disposal sites. Seller represents and warrants
that to Seller's best knowledge, without independent
investigation, there are no wetlands or fresh-water wetlands on
the Premises as those terms are defined in applicable state
and/or federal laws nor are there any other environmental
features present on the Premises which would inhibit the
continuation of the Current Use (defined below). Without
limiting the generality of any other provision of this Agreement,
it is specifically understood that Seller has made no independent
investigation with respect to any of the representations and
warranties set forth in this subsection 5.8. Buyer shall, at its
expense, obtain an environmental audit from a reputable
consultant, carrying liability insurance of at least $500,000,
with respect to the Property during the Inspection Period (as
defined below) which audit shall be certified to and may be
relied upon by both Seller and Buyer.
5.9 Insurance. During the inspection period, Seller
shall provide Buyer with copies of all insurance policies
affecting the Property and the operation thereof. All of said
insurance policies shall remain in full force and effect until
the completion of Closing hereunder. Seller has not received any
written notice from any insurance company board of fire
underwriters or rating organization (or other body exercising
similar functions) (i) claiming any defects or deficiencies which
have not been cured or corrected, or (ii) requesting the
performance of any repairs, alterations or other work which have
not been performed, or (iii) claiming any default which, if not
corrected, would result in a cancellation of insurance coverage.
If assignable, Seller shall at Closing, upon Buyer's prior notice
and payment of the pro rata share of the premium, assign such
insurance policies to Buyer as the successor owner of the
Premises.
5.10 Current Use is Unrestricted. To Seller's best
knowledge, the current use of the Premises is as a 348 unit
multi-family project with accessory tennis court, swimming pools,
and offstreet parking spaces as represented on the survey
("Current Use").
5.11 Leasing Commissions. No brokerage or leasing
commission or other compensation is will at Closing be due or
payable to any person, firm, corporation, or other entity with
respect to or on account of any of the Leases, or any extensions
or renewals thereof.
<PAGE>
<PAGE> 14 EXHIBIT 10.7
5.12 All Adequate Utilities. To Seller's best
knowledge, without independent investigation, usable public
sanitary and storm sewers, public water facilities, electric
facilities and, if any, gas facilities (collectively, the
"Utilities"), are installed in, and are duly connected to, the
Premises and can be used without charge except the normal and
usual metered utility charges and water and sewer charges. All
of said Utilities are installed and operating and all
installation, connection, and "tap-in" charges have been paid for
in full.
5.13 All Permits, Approvals and Certificates. To
Seller's best knowledge, without independent investigation, all
required certificates of occupancy for each unit at the Property
and all other licenses, permits, authorizations and approvals
necessary for the operation of the Property have been validly
issued and are in good standing and shall remain so upon
consummation of Closing. To Seller's best knowledge, without
independent investigation, all charges and fees for such have
been paid in full.
5.14 Good Title to Property. Seller holds good and
marketable, indefeasible legal title to the Property, free and
clear of liens and encumbrances other than the lien of security
interests securing any existing mortgage loans, and the Permitted
Encumbrances.
5.15 All Taxes and Assessments Paid. To Seller's best
knowledge, Seller will have paid, prior to Closing, all taxes and
assessments, including assessments payable in installments, which
are to become due and payable and/or a lien on the Property,
except for taxes for the current year which shall be prorated at
Closing.
5.16 FIRPTA. Seller is not a "foreign person" as such
term is defined in Section 1445(f)(3) of the Internal Revenue
Code of 1954, as amended (the "Code"). In the event that Seller
is a "foreign person", or in the event that Seller fails or
refuses to deliver the certificate required pursuant to Section
12.2.1.6 hereof, or in the event that Buyer receives notice from
any "transferor's agent" or "transferee's agent" (as such terms
are defined in Section 1445(d) of the Code) that, or Buyer has
actual knowledge that, such certificate is false, Buyer shall
deduct and withhold from the Purchase Price a tax equal to 10%
thereof, as required by Section 1445 of the Code. In the event
of any such withholding, the Closing hereunder shall not be
otherwise affected, Buyer shall remit such amount to and file the
required form with the Internal Revenue Service, and Seller, in
the event of any claimed over-withholding, (i) shall be limited
solely to an action against the Internal Revenue Service for a
refund, and (ii) hereby waives any right of action against Buyer
on account of such withholding.
5.17 Intentionally omitted.
5.18 Mechanic's Liens. To Seller's best knowledge, No
work has been performed or is in progress at, and no materials
have been furnished to the Premises which, though not presently
the subject of might give rise to mechanic's, materialmen's, or
other liens against the Premises or any portion thereof, except
that for which full and complete releases have been obtained. If
any lien for any such work is filed before or after Closing,
Seller shall promptly discharge the same or transfer it to a bond
pursuant to Florida law.
<PAGE>
<PAGE> 15 EXHIBIT 10.7
5.19 Inventory Schedule. The Schedule of Inventory
contains a correct and complete list of personal property owned
by Seller and located at or used in connection with the operation
of the Property.
5.20 Correct Copies of Documents. Where copies of any
documents have been delivered by Seller to Buyer, pursuant to
this Agreement, such copies:
(i) are exact copies of the originals of said
documents, as executed and delivered by all of the
parties thereto;
(ii) to the best of Seller's knowledge,
constitute, in each case, the entire agreement between
the parties thereto with respect to the subject matter
thereof, and the original instruments in the form
delivered to the Buyer, are now in full force and
effect, and, to Seller's best knowledge, no party
thereto is in default and no claim of default by any
party has been made or is now pending and there does
not now exist any default which, after either the
giving of notice or the passing of time, or both, will
or may constitute a default, or would excuse
performance by any party thereto; and
(iii) have not been changed or amended except
for amendments, if any, specifically referred to
therein.
5.21 As used in this Agreement, the term "to the best
of Seller's knowledge" means the actual current recollection of
Ronald A. Gargano and Daniel T. Mendicino and does not include
constructive knowledge of any matters or information. This term
does not imply that Seller has undertaken any independent
investigation to determine the existence or absence of any facts
or circumstances.
B. In order to induce the Seller to enter into this
Agreement, the Buyer hereby warrants and represents to the
Seller, in addition to any other representations and warranties
contained in this Agreement, that the following warranties and
representations are true now and will be true at Closing: Buyer
is a duly organized and validly existing trust formed under the
laws of Pennsylvania and is duly qualified to conduct business in
the State in which the Premises are located. Buyer has full
power, right and authority to own its properties, to carry on its
business as now conducted, and to enter into and fulfill its
obligations under this Agreement. Each of the persons executing
this Agreement on behalf of Buyer is authorized to do so. This
Agreement is the valid and legally binding obligation of Buyer,
enforceable against Buyer in accordance with its terms. The
execution and delivery of this Agreement and compliance with its
terms will not conflict with or result in the breach of any
applicable law, judgment, order, writ, injunction, decree, rule
or regulation of any court, administrative agent or other
governmental or quasi-governmental authority applicable to Buyer.
The execution and delivery of this Agreement and compliance with
its terms will not conflict with or result in the breach of any
provision of any other agreement, document or instrument to which
Buyer is a party or by which it or the Premises is bound. Buyer
shall deliver to Seller such documentation as Seller may
reasonably request to evidence the foregoing.
<PAGE>
<PAGE> 16 EXHIBIT 10.7
6. POSSESSION. Possession of the Premises is to be given
to Buyer, subject to the right of tenants under the Leases, on
the Closing Date by delivery of keys thereto on the Closing Date.
7. BUYER'S INSPECTION AND APPROVAL.
7.1 Title Binder. Within seven (7) days after the
date of this Agreement, Seller shall deliver a title commitment
("Title Binder") from the Title Company together with true,
correct and legible copies of all recorded documents listed as
exceptions therein (collectively the "Backup Documents"). Buyer
shall have until the Inspection Period Expiration Date (as
hereinafter defined) to examine the condition of title and the
terms and provisions of all said items, documents and Survey, and
to approve or disapprove the same. If Buyer shall disapprove the
condition of title, Buyer shall notify Seller of such disapproval
("Disapproval Notice") of the condition of title to the Premises
or any of the terms, provisions or contents of said items,
documents or Survey which are disapproved by Buyer ("Title
Objections"). Subject to the provisions of the succeeding
portion of this Section 7.1, Seller shall have the right by
written notice to Buyer within three (3) business days of the
receipt of Disapproval Notice to elect to cure or eliminate all
items which Buyer disapproves in the Disapproval Notice, and to
furnish evidence satisfactory to Buyer and the Title Company that
all such items have been cured or eliminated or that arrangements
have been made with the Title Company and any parties in interest
to cure or eliminate the same at or prior to the Closing,
provided such cure must be completed within forty-five (45) days
after the date of its receipt of the Disapproval Notice ("Title
Cure Expiration Date"). At any time during the forty-five (45)
day cure period, Seller may advise Buyer in writing that Seller
has determined that it will be impractical (for economic or other
reasons) to cure or eliminate the objections. In such event, or
if Seller fails or is unable to cure or remove such objections
within the thirty (30) day cure period, Buyer, as Buyer's sole
option, may, within three (3) business days thereafter, advise
Seller in writing that Buyer has elected either to (i) accept
title to the Premises in its then existing condition, on a
Closing Date no earlier than ten (10) days after such notice, or
such earlier date as Buyer may designate or (ii) terminate this
Agreement, in which event the Deposit shall be refunded to Buyer
and thereafter this Agreement will be null and void and the
parties will have no further rights or obligations hereunder,
except with respect to obligations which expressly survive the
termination of this Agreement. If Buyer fails to give written
notice of its election as and when required, Buyer shall be
deemed to have elected option (ii). If Buyer declines or fails
to object to any condition of title during the Inspection Period,
Buyer will be deemed to have accepted and approve the form and
substance of the Title Binder and the Survey and the title to the
Premises.
7.2 Survey. Buyer may obtain a current survey (the
"Survey") of the Premises prepared by a duly licensed land
surveyor reasonably acceptable to Seller. Seller shall cooperate
with Buyer in the ordering and preparation of the Survey. Buyer
shall have until the Inspection Period Expiration Date in which
to examine the Survey and to approve or disapprove the same. If
Buyer shall disapprove of anything shown on the Survey, Buyer
shall notify Seller of such disapproval in the manner provided in
Section 7.1 on or prior to the Inspection Period Expiration Date.
In such event, any such matters shall be treated in the same
manner as Title Objections pursuant to Section 7.1.
<PAGE>
<PAGE> 17 EXHIBIT 10.7
7.3 Physical and Financial Inspection. For the period
("Inspection Period") from the date hereof until 5:00 P.M. on
June 30, 1994 ("Inspection Period Expiration Date"), Buyer shall
have the right to have performed a physical and mechanical
inspection, measurement and audit of the Property and an
inspection of all books and records and financial information
pertaining thereto, and Seller shall cooperate with Buyer and
shall furnish or make available for its inspection and
photocopying to Buyer such information, materials and documents
as Buyer may reasonably request and shall have its accountant
available throughout such period to assist in Buyer's inspection
and review. The inspection, audit and measurement of the
Property's operation, condition and maintenance shall include,
without limitation, environmental inspections, reviews and
assessments that Buyer deems appropriate. Seller shall provide
sufficient staff for Buyer to gain entry to inspect all units and
other portions of the Property from time to time. If Buyer, in
Buyer's sole judgment, shall find such inspection to be
unsatisfactory for any reason whatsoever, Buyer shall have the
right, at its option, to terminate this Agreement on or before
the Inspection Period Expiration Date, and, upon such
termination, the Deposit shall be immediately returned to Buyer
and thereupon the parties hereto shall have no further
liabilities one to the other with respect to the subject matter
of this Agreement. Buyer agrees that it shall not unreasonably
interfere with Tenants in performing its inspection. In
connection with such inspection, and without limiting the
generality of Seller's obligations hereunder, Seller agrees to
deliver to Buyer or, except as otherwise specifically required,
make available to Buyer for its inspection and photocopying,
within five (5) days after the date hereof, the following items,
and such other items as Buyer may reasonably request, in the
forms herein set forth, in each case certified by Seller as being
true, correct and complete:
7.3.1 Leases. Seller shall deliver all the
cover pages of all Leases as of the date hereof, and shall make
available the balance of the Leases, all tenant work orders,
including a list of those which have not been completed and are
more than 48 hours old, Property and tenant repair records,
tenant files and tenant correspondence;
7.3.2 Contracts, Licenses, Documents. Seller
shall deliver to Buyer all Service Contracts, and to the extent
same are either in Seller's possession or readily available to
Seller, copies of the Contract Documents, and the Licenses,
including, without limitation, all building permits, certificates
of occupancy, insurance policies applicable to the Property non-
Federal (state, county, municipality) environmental (including
wetlands) applications, permits and approvals and any other
documents evidencing rights described in Section 1.2 hereof;
7.3.3 Utility Costs. Seller shall deliver
copies of vendor invoice summaries and payments for the last 12
months and will make available computer files for the last 3
years of electricity, storm water discharge, sanitary sewer
discharge, water bill and all of other such bills in Seller's
possession;
<PAGE>
<PAGE> 18 EXHIBIT 10.7
7.3.4 Schedule of Inventory. Seller shall
deliver a schedule of inventory of the Property, to Seller's
knowledge, including, without limitation, (i) the typical size
and typical features of each of the 348 residential units'
refrigerators, air conditioners, hot water heaters, stoves,
washing machines, garbage disposals and trash compactors, (ii)
all tools, furniture, fixtures, machinery, and equipment used in
connection with the Premises, and (iii) recreational, fitness,
pool and jacuzzi furniture and equipment, and copies, to the
extent in Seller's possession of invoices, bills of sale, and
other evidence supporting the Schedule of Inventory;
7.3.5 Three Year's Maintenance Expenses.
Seller shall deliver operating statements, including maintenance
expenses for 1992 through the present;
7.3.6 Two Years' Tax Bills. Seller shall
deliver copies of all tax bills and assessments applicable to the
year 1992 and 1993, including real estate, personal property, use
and occupancy, business privilege and others related to the
Property, as well as assessed values, millages, and taxes on the
Premises;
7.3.7 Three Years' Operating Statements.
Seller shall deliver all of Seller's operating statements related
to the Property for the years 1992 through the present, and
income tax returns for 1991 through the present;
7.3.8 Schedule of Violations. Seller shall
deliver a schedule setting forth to Seller's best knowledge all
material violations of any law, ordinance, regulation, rule or
requirement of any governmental body having jurisdiction, or
public or private restrictions whether existing or prospective,
of which Seller has received written notice, issued or noted
during the past three years, and copies of any notices,
terminations or correspondence relating to the past four
municipal inspections;
7.3.9 Schedule of Notices. Seller shall
deliver a schedule setting forth to Seller's best knowledge any
written material demands, requests, requirements or
recommendations, with copies attached, regarding the operation,
maintenance, repair or replacement of the Property or any portion
thereof, of which Seller has received notice during the past
three years, from any governmental body, the holder of any
mortgage or deed of trust, any insurance company or any board of
fire underwriters, any real estate associations, dominant estate
holder or like entity, and will make available to Buyer copies of
all correspondence relating thereto.
7.3.10 Schedule of Required Improvements. Seller
shall deliver a schedule setting forth to Seller's best knowledge
all notices of outstanding private or public requirements to
perform curbing, re-curbing, paving, re-paving, or other
construction or improvements, or any other special assessments,
and will make available to Buyer copies of such notices for the
past three years.
7.3.11 Schedule of Replacements and Repairs.
Seller shall deliver any documentation in Seller's possession of
replacements and repairs to the Property commencing with Seller's
acquisition of the Property.
<PAGE>
<PAGE> 19 EXHIBIT 10.7
7.3.12 Zoning, Site Plan, Subdivision Plan or
Plat. To the extent in Seller's possession, Seller will make
available all conditional and permanent zoning, site plan,
subdivision, building, housing, safety, fire and health
approvals, including, without limitation, the local governmental
applications, resolutions and approvals supporting the same.
7.3.13 Planned Developments. To the extent in
Seller's possession, Seller will make available all permits,
licenses, and approvals under any master plan development
association, whether homeowners association or otherwise,
relating to the continued operation and use of the premises and
its appurtenances (including recreational facilities, food
concessions, parking facilities, water bodies, canopies, etc.)
and the conditions and fees for the transfers.
7.3.14 Takings or Changes. Seller will make
available copies of written notices to Seller of proposed or
threatened takings or changes with respect to the land or major
access roads within a reasonable radius which would affect the
access to the Premises by prospective occupants.
7.3.15 Tax Assessments, Appeals and Increases.
Seller will make available copies of written notices to Seller of
all filed, proposed or threatened tax assessment appeals or tax
assessment increases related to the Premises.
7.3.16 Litigation. Seller shall deliver copies
of all pending and written notices to Seller of threatened
litigation, including litigation involving tenants, affecting the
Property or this transaction.
7.3.17 Insurance Policies. Seller shall deliver
copies of all insurance policies of Seller related to the
Property.
7.3.18 Schedule of Employees. Seller shall
deliver a schedule of all current employees of the Property,
setting forth the name, residence, salary, hourly wages, benefit
package, bonuses, and other prerequisites of their employment.
7.3.19 Crime History Report. Seller shall
deliver a crime history report of the Premises for the past three
years as provided by the City of Pembroke Pines.
7.4 Intentionally omitted.
7.5 Buyer's Indemnity for Inspection. Buyer shall
cause all operations performed during the Inspection Period to be
conducted so as not to unreasonably interfere with the operations
on the Property. Buyer shall, at Buyer's expense, restore the
Property to its condition prior to Buyer's entry. All
information furnished by Seller to Buyer and obtained by Buyer in
the course of its investigations shall be treated by Buyer as
confidential information, with the same level of confidentiality
as Buyer treats its own confidential information. Buyer agrees
to indemnify and save harmless Seller, its partners and their
officers, employees, directors and agents, against and from all
liabilities, damages, claims, costs and expenses, which may be
imposed upon or incurred by or asserted against Seller by reason
of any act of Buyer or any of its agents, contractors, servants,
<PAGE>
<PAGE> 20 EXHIBIT 10.7
employees, subtenants, licensees or invitees occurring on the
Property during Buyer's inspection of same. If any claim, action
or proceeding shall be made or commenced, as the case may be,
against Seller as to which the indemnification provided for in
this Section may be applicable, Seller shall give Buyer prompt
notice thereof and shall afford Buyer the opportunity, at Buyer's
sole cost and expense, to resist or defend against such claim,
action or proceeding by counsel selected by Buyer, subject to
Seller's approval, not to be unreasonably withheld, provided that
Buyer shall within thirty (30) days of notice of any such claim,
action or proceeding, notify Seller of its election so to resist
and defend, and Seller shall not settle the same without Buyer's
consent, which shall not be unreasonably withheld. The
provisions of this Section shall survive Closing or termination
of this Agreement.
7.6 Termination of Agreement. Upon the termination of
this Agreement, pursuant to this Section 7 or for any other
reason whatsoever, Buyer will return to Seller plans, insurance
binders, and surveys provided by Seller to Buyer.
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Buyer and Seller set forth
herein shall survive Closing and delivery of the deed for twelve
months. Seller shall be liable for any breach of warranty or
representation contained in this Agreement which results in
damages in excess of $50,000, such liability limited to actual
damages not to exceed Five Hundred Thousand Dollars ($500,000) in
the aggregate; provided, however, Seller will not be liable for
breaches of warranty or representation as to Service Agreements
except for damages suffered by Buyer from third parties after a
final adjudication of such issues. Any claim by Buyer with
respect to any representations and warranties of Seller set forth
in this Agreement which is not made within twelve (12) months of
the Closing Date shall be barred. Seller will not be responsible
for any alleged breach of a warranty or representation contained
in this Agreement if Buyer received information prior to Closing
from which it determined or could have determined with reasonable
diligence that the representation or warranty was untrue. Except
as expressly set forth in this Section, the acceptance of the
Deed by Buyer shall be deemed to be a full performance and
discharge of every agreement and obligation on the part of the
Seller to be performed pursuant to the provisions of this
Agreement (including, but not limited to, all liability with
respect to any representations or warranties made on behalf of
Seller as set forth in this Agreement), except those which are
specifically described in this Agreement as surviving the Closing
and delivery of the Deed under this Agreement.
9. FIRE OR OTHER CASUALTY.
9.1 Maintain Insurance. Seller shall maintain in
effect until the Closing Date the insurance policies (or like
policies) now in effect with respect to the Premises and Personal
Property as set forth in Exhibit "H".
9.2 Minimal Damage. If prior to the Closing Date any
portion of the Property is damaged or destroyed by fire or other
casualty, and the cost of repair or restoration thereof shall be
$250,000 or less (as established by good faith estimates obtained
by Buyer), this Agreement shall remain in force.
<PAGE>
<PAGE> 21 EXHIBIT 10.7
9.3 Substantial Damage. If prior to the Closing Date
any portion of the Property is damaged or destroyed by fire or
other casualty, and the cost of repair or restoration thereof
shall be more than $250,000 (as established by good faith
estimates obtained by Buyer), Buyer may within 10 days after
receipt of notice ("Damage Notice") of said damage or
destruction, terminate this Agreement by giving written notice
thereof to Seller ("Buyer's Notice of Election"), and if this
Agreement is so terminated, then the Deposit and all interest
accrued thereon shall be paid to Buyer, and thereafter neither
party shall have any further liability hereunder thereafter. If
Buyer does not so terminate this Agreement it shall remain in
full force and effect, and Buyer shall accept the Property at
Closing as so damaged.
9.4 Closing After Substantial Damage. So long as this
Agreement shall remain in force under Section 9.2 or 9.3 then
either (a) (i) all proceeds of insurance collected prior to
Closing (plus the amount of deductible under Seller's insurance
policy) shall be adjusted subject to Buyer's approval and
participation in any adjustments and shall be credited to Buyer
against the Purchase Price payable by Buyer at Closing less any
amounts expended by Seller in connection with repairs, and (ii)
all unpaid claims and rights in connection with losses shall be
assigned to Buyer at Closing, or (b) Seller, by its written
notice to Buyer within ten (10) days after either (y) receipt of
Buyer's Notice of Election not to terminate or (z) the absence of
such receipt within twenty days after Seller's Damage Notice,
shall (i) restore the Property by Closing to its condition
immediately preceding the casualty, subject to the approval of
Buyer and Buyer's lender, if any, that the Property can be
restored by such time, (ii) remain liable for any damages
resulting from the failure to complete the repair by Closing and
(iii) include Buyer in, and obtain Buyer's approval to, any
adjustments made by Seller.
9.5 Rent Insurance. All rental loss insurance and the
proceeds thereof shall be allocated to Seller for any period
prior to Closing and to Buyer for any period subsequent to
Closing shall be paid or assigned to Buyer at Closing.
10. CONDEMNATION. If, prior to the Closing Date, all or
any portion of the Premises is taken by eminent domain or a
notice of any eminent domain proceedings with respect to the
Premises or any part thereof is received by the Seller, then
Seller shall within five (5) days thereafter give notice thereof
to Buyer and Buyer shall have the option to (a) complete the
purchase hereunder or (b) if such taking, in Buyer's reasonable
opinion, materially adversely affects the Premises or its current
economic viability, terminate this Agreement, in which event the
Deposit shall be immediately returned to Buyer and this Agreement
shall be null and void. Buyer shall deliver written notice of
its election to the Seller within ten (10) days after the date
upon which the Buyers receive written notice of such eminent
domain proceedings. If notice of condemnation is received by
Buyer and it fails to deliver said written notice of its election
within said time period, such failure shall constitute a waiver
by Buyer of its right to terminate this Agreement. If this
Agreement is not so terminated and Closing is completed, Buyer
shall be entitled to all awards or damages by reason of any
exercise of the power of eminent domain or condemnation with
respect to or for the taking of the Premises or any portion
thereof. Any negotiation for, or agreement to, and all contests
of any offers and awards relating to eminent domain proceedings
shall be conducted with the joint approval and consent of the
Seller and the Buyer.
<PAGE>
<PAGE> 22 EXHIBIT 10.7
11. EXPENSE ALLOCATIONS.
11.1 Seller shall pay all recording fees and similar
expenses related to the execution, delivery and recording of the
Deed, Bill of Sale, and other Closing Documents. Whether Closing
occurs hereunder or not, Seller shall pay for one-half the cost
of the Survey.
11.2 Whether Closing occurs hereunder or not, Buyer
shall pay for one-half of the cost of the Survey. Buyer shall
pay for its consultant's performing the inspections described in
Section 7.3 of this Agreement. Only if Closing occurs hereunder,
Buyer shall pay for the title expenses, including owner's Title
Policy premium at the minimum promulgated rate, the Ragland &
Associates, Inc. broker fee of $648,000, and the documentary
stamps to be affixed to the deed for recording.
11.3 Buyer and Seller shall be responsible for paying
their own attorney's fees in connection with this transaction.
12. CLOSING.
12.1 Time and Date and Place. The Closing on the sale
of the Property (herein referred to as the "Closing") shall take
place no later than August 1, 1994 ("Closing Date") by mail or,
as specified by Buyer in writing to Seller at least ten (10) days
prior to the specified Closing Date, at such earlier date and by
meeting at either the offices of Seller or Seller's counsel,
commencing at 10:00 a.m.
12.2 Documents. Prior to Closing, the parties
indicated shall simultaneously execute and deliver the following:
12.2.1 Seller's Documents and Other Items.
Seller shall execute and deliver or cause to be executed and
delivered to Buyer in proper form for recording:
12.2.1.1 Deed. A special warranty deed (the
"Deed"), conveying the Premises to Buyer, duly executed for
recording;
12.2.1.2 Bill of Sale. A bill of sale
prepared by Seller's counsel in form reasonably satisfactory to
Buyer, duly executed by Seller, assigning, conveying and
transferring to Buyer, all of the Tangible Personal Property,
without representation, recourse, or warranty as to the quality
of such property.
12.2.1.3 Original Leases. All Leases,
tenant files, tenant correspondence and repair records.
12.2.1.4 Original Licenses, Contract
Documents and Other Personal Property. All Licenses, Contract
Documents, Service Contracts and other Personal Property
described in Section 1.2 of this Agreement in Seller's possession.
12.2.1.5 Assignment of Leases. An
assignment and assumption agreement (the "Assignment") prepared
by Seller's counsel in form reasonably satisfactory to Buyer,
duly executed by Seller and Buyer, assigning, conveying and
transferring to Buyer the Personal Property, the Leases,
including without limitation the security deposits, and the Name
<PAGE>
<PAGE> 23 EXHIBIT 10.7
that are assignable according to their terms, including Buyer's
assumption of and indemnity of Seller for the obligations and
liabilities arising thereunder from and after the Closing Date,
and Seller's indemnity of Buyer from obligations and liabilities
thereunder arising prior to the Closing Date.
12.2.1.6 FIRPTA Certificates. Certificates
required under Section 1445 of the Code.
12.2.1.7 Tenant Letter. Letters to each
tenant advising of the change in ownership and directing the
payment of rent to such party as the Buyer shall designate, said
letter to be in form reasonably satisfactory to Buyer, attached
as Exhibit "J" ("Tenant Letter").
12.2.1.8 Intentionally omitted.
12.2.1.9 Title Insurance Certificates. Such
affidavit of title or other certifications as shall be required
by the Title Company to insure Buyer's title to the Premises as
set forth in Section 3, and to provide affirmative endorsements
for (a) no mechanic's liens, (b) environmental endorsement 8.1,
(c) removal of any exceptions for matters which an accurate
survey would disclose, and (d) such endorsements as Buyer may
reasonably request and which are available in Florida.
12.2.1.10 Updated Rent Schedule. An updated
schedule of Tenant Leases, containing all information required to
be set forth in Exhibit "D", which schedule is correct and
complete as of the date of closing.
12.2.1.11 Seller Certificate. A written
certification confirming that as of Closing no representation or
warranty of Seller contained in this Agreement contains any
untrue statement of a material fact or knowingly omits to state a
material fact necessary to make any representation or warranty
contained herein misleading.
12.2.1.12 Organization Certifications.
Confirmation of the good standing and existence of Seller and
Seller's partners that are not individuals and the due authority
of those executing for them, including, without limitation, the
following documents issued no earlier than 30 days prior to
Closing: (a) good standing certificate in state of organization
and in the State in which the Premises are located, (b) articles
of incorporation, partnership agreement or other formation
instrument certified by the secretary of state of the state of
incorporation, (c) a certificate from the secretary of the
corporation or managing general partner of the partnership
confirming the incumbency of the signatories and the current
force and effect of the resolution authorizing their execution of
the documents required under this Agreement.
12.2.1.13 Keys. All keys and combinations to
all locks to the Property;
12.2.1.14 Tax Bills. Current tax bills and,
if available, tax bills for each of the years of Seller's
ownership of the Property;
12.2.1.15 Tax Reduction Rights. An
instrument assigning to Buyer any claims for the reduction of
real or personal property taxes assessed against any portion of
the Property for the fiscal year in which the Closing takes
place; any refund for such year shall be prorated when received;
<PAGE>
<PAGE> 24 EXHIBIT 10.7
12.2.1.16 Seller's General Partner's Change
of Name. Seller's general partner, Palms of Pembroke II, Inc.,
delivery of a counterpart copy of the original name change filed
with the Florida Secretary of State, so that its name will no
longer be associated with the Name.
12.2.1.17 Intentionally omitted.
12.2.1.18 Intentionally omitted.
12.2.1.19 Assignment of Intangible Personal
Property. An Assignment and Assumption Agreement prepared by
Seller's counsel in form reasonably satisfactory to Buyer, duly
executed by Seller and Buyer, assigning, conveying, and
transferring to Buyer the Personal Property, other than the
Tangible Personal Property, that is assignable according to its
terms, including the Assumed Agreements and containing Buyer's
assumption of and indemnity of Seller for the obligations and
liabilities arising thereunder from and after the Closing Date,
and Seller's indemnity of Buyer from obligations and liabilities
thereunder arising prior to the Closing Date.
12.2.1.20 Intentionally omitted.
12.2.2 Buyer's Documents. Buyer shall deliver
or cause to be delivered to Seller:
12.2.2.1 Balance of Purchase Price. The
amounts required to be paid to Seller pursuant to this Agreement;
12.2.2.2 Intentionally omitted.
12.2.2.3 Secretary's Certificate.
Secretary's certificate of the good standing and existence of
Buyer and the authority of those executing for them.
12.2.2.4 Security Deposit Receipt. A
receipt for all security deposits in accordance with Florida law.
12.2.3 Title Insurance. As a condition to
Buyer's obligations at Closing, Title Company shall furnish Buyer
at Closing either (a) the Title Policy, in the form required by
Section 3, in the full amount of the Purchase Price, wherein the
Title Company shall insure fee simple title to the Property in
Buyer or its designee as of the Closing Date containing no
exceptions to title other than those which Buyer shall take
subject to pursuant to Section 3 hereof, or (b) a marked Title
Binder initialed and signed by the Title Company insuring Buyer's
fee in accordance with the terms of this Agreement and a
commitment to have the Title Policy issued by the Title Company
pursuant to the Title Binder as soon as possible after the
Closing in accordance with the requirements of Section 12.2.3(a).
12.2.4 Necessary Documents. Buyer and Seller
shall execute and deliver such other documents and instruments as
may be reasonably necessary to complete the transaction
contemplated by this Agreement.
<PAGE>
<PAGE> 25 EXHIBIT 10.7
13. DEFAULT REMEDIES
13.1 Seller's Default. Except to the extent otherwise
provided in this Agreement, in the event that any of Seller's
representations, warranties or covenants contained in this
Agreement are untrue in any material respect or if Seller shall
have failed to have performed any of the covenants and/or
agreements contained in this Agreement which are to be performed
by Seller, on or before the date set forth in this Agreement for
the performance thereof, then Buyer may, at its option, rescind
this Agreement by giving written notice of such rescission to
Seller and Seller shall immediately thereafter return the Deposit
and thereupon the parties shall have no further liability to each
other hereunder. In the alternative, but without limiting
Buyer's right upon any default by Seller hereunder to receive the
prompt return of the Deposit, Buyer may seek to enforce specific
performance of this Agreement.
13.2 Damages for Seller's Default. Notwithstanding
anything contained in this Agreement to the contrary, Buyer shall
be entitled to seek damages (in addition to the remedies provided
for in paragraph 13.1), in the event that (i) specific
performance is not effectively available to Seller because of
acts or omissions by Seller which affect title to the Premises
and (ii) any of Seller's (a) representations or warranties
contained in this Agreement are intentionally untrue, or (b)
covenants or agreements contained in this Agreement are not
performed as and, when required to be performed due to Seller's
willful misconduct, malicious acts, or bad faith.
13.3 Liquidated Damages for Buyer's Default. Buyer
recognizes that the Property will be removed by Seller from the
market during the existence of this Agreement and that if this
purchase and sale is not consummated because of Buyer's default
Seller shall be entitled to compensation for such detriment.
Seller and Buyer acknowledge that it is extremely difficult and
impracticable ascertain the extent of the detriment, and to avoid
this problem, Seller and Buyer agree that if the purchase and
sale contemplated in this Agreement is not consummated because of
Buyer's default under this Agreement, Seller shall be entitled to
retain the Deposit, as liquidated damages. The parties agree
that the sum stated above as liquidated damages shall be in lieu
of any other relief to which Seller might otherwise be entitled,
Seller hereby specifically waiving any and all rights which it
may have to damages or specific performance as a result of
Buyer's default under this Agreement.
14. CONDITIONS PRECEDENT TO CLOSING.
The obligations of Buyer hereunder are subject to the
fulfillment of the following conditions prior to or on the
Closing Date (any one of which may be waived in whole or in part
by Buyer at or prior to the Closing) and in the event any of the
conditions are not complied with, Buyer may terminate this
Agreement by notifying the Seller and Escrow Agent and thereupon
shall be returned the Deposit and thereafter this Agreement shall
be null and void:
14.1 Correctness of Warranties and Representations.
The warranties and representations made by Seller in this
Agreement shall be true in all material respects on the Closing
Date as though such representations and warranties were made on
the Closing Date (except for changes in the Leases permitted
under the terms of this Agreement).
<PAGE>
<PAGE> 26 EXHIBIT 10.7
14.2 Compliance with Terms and Conditions. Seller
shall have performed and complied with all of the terms and
conditions required by this Agreement to be performed and
complied with by it prior to or on the Closing Date.
14.3 Buyer's Satisfaction with Inspection. Buyer shall
have notified Seller of Buyer's satisfaction with the inspections
performed under Section 7 of this Agreement, or shall fail to
notify Seller by June 30, 1994 of Buyer's dissatisfaction with
the results of such inspection.
15. PRORATIONS.
15.1 Operating Expenses. The following items shall be
prorated at Closing as of close of business of the day
immediately preceding Closing ("Adjustment Date"):
15.1.1 Rents. Rents collected under the
Leases, and rent tax applicable thereto, if any, shall be
apportioned on the Closing Date pro rata on a per diem basis as
if rents were collected as of the Adjustment Date and the portion
thereof allocable to any period from and after the Closing Date
shall be paid or credited to Buyer at Closing. If any tenant is
in arrears in the payment of rent or additional rent on the
Closing Date, and such tenant's lease is terminated within twelve
months after the Closing Date, Buyer shall apply the rents it
receives from such tenant, including the security deposit held
for such tenant in the following order of priority: (a) to the
Buyer, so long as such tenant is in arrears for current or prior
rent arising after Closing, then (b) to Seller for all rent in
arrears prior to the Closing Date; and then (c) to Buyer with no
further claim by Seller thereto. Except as herein provided,
Buyer has the sole right (but not any obligation) to collect
rents in arrears from tenants, whether for the benefit of Seller
or otherwise. Except as otherwise provided herein for payments
by Buyers. Seller shall have no claim to rents collected after
the Closing Date.
15.1.2 Taxes. Real estate and personal
property taxes, if any, on the basis of the fiscal year for which
assessed. If the Closing shall occur before the tax rate or
assessment is fixed, the apportionment of such real estate and
personal property taxes at the Closing shall be upon the basis of
the tax rate for the next preceding year applied to the latest
assessed valuation. Final adjustment will be made upon the
actual tax amount, when determined.
15.1.3 Intentionally omitted.
15.1.4 Water, Sewer and Other Utility Charges.
If the companies providing utility services other than gas, make
a final reading and transfer service as of the Adjustment Date,
there will be no proration; otherwise, utility (except gas)
charges will be prorated on the basis of the most recent bills
available, but if there are meters on the Property, Seller, to
the extent the same is obtainable, shall furnish a reading
effective as of the Adjustment Date, or if not so obtainable, to
a date not more than thirty (30) days prior to the Adjustment
Date, and the unfixed meter charges based thereon for the
intervening period shall be apportioned on the basis of such last
reading. Upon the taking of a subsequent actual reading, such
apportionment shall be readjusted and Seller or Buyer, as the
case may be, will promptly deliver to the other the amount
<PAGE>
<PAGE> 27 EXHIBIT 10.7
determined to be so due upon such readjustment. If Seller is
unable to furnish such prior reading, any reading subsequent to
the Closing will be apportioned on a per diem basis from the date
of such reading immediately prior thereto and Seller shall pay
the proportionate charges due up to the date of Closing.
15.1.5 Assigned Contracts. Amounts paid or
payable in respect of any service and maintenance contracts
assigned to Buyer in accordance herewith.
15.1.6 Gas. If the utility company providing
such gas service will make a final reading and transfer service
as of the Adjustment Date, there will be no proration; otherwise,
fuel, if any, based on meter readings or a fuel company letter
showing measurement no more than two (2) days prior to the
Adjustment Date and valued at current prices.
15.1.7 Security Deposits. Buyer shall receive
a credit against the Purchase Price in an amount equal to all
Tenant security deposits and prepaid rent and accrued interest to
which Tenants may be entitled which Seller is holding pursuant to
the Leases which are to be assigned to Buyer at the time of
Closing.
15.2 Assessments. If at Closing the Premises or any
part thereof shall be affected by a pending or current special
assessment, then for purposes of this Agreement, all such
assessments, including, without limitation unpaid installments of
any such assessments, shall be paid and discharged by Seller at
Closing, if work has commenced with respect thereto prior to
Closing; provided, however, if the assessment is more than
$10,000 then Seller can elect to cancel this Agreement by prompt
written notice to Buyer, provided, however, Buyer may reinstate
Seller's obligations under this Agreement by prompt written
notice to Seller of Buyer's waiver of Seller's liability for such
assessment. Pending liens as of the Closing Date for assessments
related to work which has not been commenced prior to Closing
shall be assumed by Buyer. Pending liens for which Seller shall,
at Closing, be responsible will be initially charged at an amount
equal to the last estimate of the assessment for the improvement
by the public body.
15.3 Application of Prorations. If such prorations
result in a payment due Buyer, the cash payable at Closing shall
be reduced by such sum. If such prorations result in a payment
due Seller, the same shall be paid by wire funds at Closing.
15.4 Schedule of Prorations. The parties shall
endeavor to jointly prepare a proposed schedule of prorations no
less than five (5) days prior to Closing.
15.5 Readjustments. The parties shall correct any
errors in prorations as soon after the Closing as amounts are
finally determined.
16. BROKERS. Buyer and Seller hereby represent and warrant
to each other that they have not employed or retained any broker
or finder in connection with the transactions contemplated by
this Agreement except that Seller has dealt with Ragland and
Associates, Inc., and Buyer has dealt with Igor Altern,
originally of Capital Alliance, and that they have not had any
dealings with any other person which may entitle that person to a
fee or commission. Buyer shall be responsible for any fee or
<PAGE>
<PAGE> 28 EXHIBIT 10.7
commission due to Igor Altern or Capital Alliance, and a fee of
$648,000 to Ragland & Associates, Inc. Seller shall be
responsible for any other fee or commission due to Ragland &
Associates, Inc. Buyer shall indemnify Seller from any claims by
Igor Altern, Capital Alliance, the $648,000.00 due to Ragland &
Associates, Inc., or any other party claiming to have dealt with
Buyer with respect to this transaction. Seller shall indemnify
Buyer against any claims by Ragland & Associates, Inc. for a
commission in excess of $648,000.00 or for any claims made by
third parties claiming to have dealt with Seller with respect to
this transaction. The indemnifications set forth in this Section
shall include any and all costs, losses, or damages sustained by
the indemnified party including attorneys' and paralegals' or
legal assistants' reasonable fees incurred in connection with any
such claim, whether or not suit is brought and through and
including all post judgment and appellate levels.
17. ESCROW AGENT. The parties hereto have requested that
the Deposit be held in escrow by the Escrow Agent to be applied
at the Closing or prior thereto in accordance with this
Agreement. The Escrow Agent will deliver the Deposit to Seller
or to Buyer, as the case may be under the following conditions:
17.1 Payment to Seller. To Seller on the Closing Date
upon the consummation of Closing;
17.2 Notice of Dispute. If either Seller or Buyer
believes that it is entitled to the Deposit or any part thereof
it shall make written demand therefor upon the Escrow Agent. The
Escrow Agent shall promptly mail a copy thereof to the other
party Certified Mail, Return Receipt Requested. The other party
shall have the right to object to the delivery of the Deposit, by
filing written notice of such objections with the Escrow Agent at
any time within fifteen (15) days after the mailing of such copy
to it Certified Mail, Return Receipt Requested, but not
thereafter. Such notice shall set forth the basis for objection
to the delivery of the Deposit. Upon receipt of such notice, the
Escrow Agent shall promptly mail a copy thereof to the party who
filed the written demand.
17.3 Escrow Subject to Dispute. In the event the
Escrow Agent shall have received the notice of objection provided
for in 17.2 above of this Section and within the time therein
prescribed, the Escrow Agent shall continue to hold the Deposit
until (i) the Escrow Agent receives written notice from both
Seller and Buyer directing the disbursement of the Deposit in
which case the Escrow Agent shall then disburse said Deposit in
accordance with said direction, or (ii) litigation arises between
Seller and Buyer, in which event the Escrow Agent shall deposit
the Deposit with the Clerk of the Court in which said litigation
is pending, or (iii) the Escrow Agent takes such affirmative
steps as the Escrow Agent may, at the Escrow Agent's option elect
in order to terminate the Escrow Agent's duties including, but
not limited to, deposit in Court an action for interpleader in
Broward County, Florida, or to hold the same pending the
unanimous direction of Buyer and Seller or an order of Court.
17.4 Escrow Agents Rights and Liabilities. Nothing
herein contained shall prohibit or prevent Escrow Agent from
representing Buyer in any capacity either before or after such
funds have been deposited in Court as aforesaid. Escrow Agent
shall not, as such, be required to determine questions of fact or
law, and may act upon any instrument or other writing believed by
it in good faith to be genuine and to be signed and presented by
<PAGE>
<PAGE> 29 EXHIBIT 10.7
the proper person, and shall not be liable in connection with the
performance of any duties imposed upon the Escrow Agent by the
provisions of this Agreement, except for the Escrow Agent's own
willful default or gross negligence. The Escrow Agent shall have
no duties or responsibilities except those set forth herein. The
Escrow Agent shall not be bound by any modification of this
Agreement, unless the same is in writing and signed by Buyer and
seller, and, if the Escrow Agent's duties hereunder are affected,
unless Escrow Agent shall have given prior written consent
thereto. In the event that the Escrow Agent shall be uncertain
as to the Escrow Agent's duties or rights hereunder, or shall
receive instructions from Buyer or Seller which, in the Escrow
Agent's opinion, are in conflict with any of the provisions
hereof, the Escrow Agent shall be entitled to hold and apply the
Deposit, pursuant to 17.3 of the above Section and may decline to
take any other action.
18. GENERAL PROVISIONS.
18.1 Notices. All notices or other communications
required or permitted to be given under the terms of this
Agreement shall be in writing, and shall be deemed effective when
sent by (i) nationally recognized overnight courier, (ii)
facsimile with original following by regular mail, or (iii)
United States certified mail, postage prepaid, addressed as
follows:
18.1.1 If to Buyer, addressed to:
Pennsylvania Real Estate Investment Trust
455 Pennsylvania Avenue
Fort Washington, Pennsylvania 19034
Attention: Jeffrey A. Linn, Vice President
FAX: (215) 542-9179
with a courtesy copy to:
Gregory G. Gosfield, Esquire
Cohen, Shapiro, Polisher,
Shiekman and Cohen
22nd Floor, PSFS Building
Philadelphia, PA 19107
FAX: (215) 592-4329
18.1.2 If to Seller, addressed to:
Pembroke Associates Limited Partnership
902 Clint Moore Road, Suite 104
Boca Raton, FL 33487
FAX: (407) 241-9151
with a courtesy copy to:
Arthur J. Menor, Esq.
Shutts & Bowen
Suite 1000
Esperante Building
222 Lakeview Avenue
West Palm Beach, FL 33401
FAX: (407) 650-8530
<PAGE>
<PAGE> 30 EXHIBIT 10.7
18.1.3 If to Escrow Agent, addressed to:
Gregory G. Gosfield, Esquire
Cohen, Shapiro, Polisher,
Shiekman & Cohen
PSFS Building, 22nd Floor
12 S. 12th Street
Philadelphia, PA 19107
or to such-other address or addresses and to the attention of
such other person or persons as any of the parties may notify the
other in accordance with the provisions of this Agreement.
18.2 Binding Effect. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, successors and
assigns.
18.3 Entire Agreement. All Exhibits attached to this
Agreement are incorporated herein and made a part hereof. This
Agreement constitutes the entire agreement between the parties
hereto and supersedes all prior negotiations, understandings and
agreements of any nature whatsoever with respect to the subject
matter hereof. This Agreement may not be modified or amended
other than by an agreement in writing. The captions included in
this Agreement are for convenience only and in no way define,
describe or limit the scope or intent of the terms of this
Agreement.
18.4 Governing Law. This Agreement shall be construed
and interpreted in accordance with the laws of the State of
Florida.
18.5 No Recording. Neither this Agreement nor any
notice of it shall be recorded in any public records and the
execution of this Agreement and the payment of monies under this
Agreement shall not create any equitable interest or title, lien
or lien right in favor of the Buyer, the Buyer hereby expressly
waiving and relinquishing any such equitable interest or title.
Any attempt at recordation shall be a nullity and shall
constitute a material breach of this Agreement. This provision
shall survive the closing of title hereunder.
18.6 Tender. Tender of Deed by Seller and the tender
by Buyer of the Purchase Price at Closing, are hereby mutually
waived, but nothing herein contained shall be construed as a
waiver of Seller's obligation to deliver the documents required
at Closing or the concurrent obligation of Buyer to pay the
Purchase Price.
18.7 Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be
deemed to be an original as against any party whose signature
appears thereon, and all of which shall together constitute one
and the same instrument. This Agreement shall become binding
when one or more counterparts hereof, individually or taken
together, shall bear the signatures of all of the parties
reflected hereon as the signatories.
<PAGE>
<PAGE> 31 EXHIBIT 10.7
18.8 Further Instruments. Seller will, whenever and as
often as it shall be reasonably request so to do by Buyer, and
Buyer will, whenever and as often as it shall be reasonably
requested so to do by Seller, execute, acknowledge and deliver,
or cause to be executed, acknowledged and delivered, any and all
conveyances, assignments, correction instruments and all other
instruments and documents as may be reasonably necessary in order
to complete the transaction provided for in this Agreement and to
carry out the intent and purposes of this Agreement. All such
instruments and documents shall be satisfactory to the respective
attorneys for Buyer and Seller. The provisions of this Article
shall survive the Closing.
18.9 Time. Time is of the essence. In the event the
last day permitted for the performance of any act required or
permitted under this Agreement falls on a Saturday, Sunday, or
legal holiday of the United States, Florida, or Pennsylvania, the
time for such performance will be extended to the next succeeding
business day.
18.10 Assignment of Agreement. Buyer will have the
right to assign this Agreement and the Deposit upon giving Seller
five days' notice of such assignment prior to Closing. No
permitted assignment of Buyer's rights under this Agreement will
be effective against Seller unless and until an executed
counterpart of the instrument of assignment will have been
delivered to Seller and Seller will have been furnished with the
name and address of the assignee. The term "Buyer" will be
deemed to include the assignee under any such effective
assignment. No such assignment will relieve Buyer of its
obligations hereunder.
18.11 Effective Date. Whenever the term or phrase
"effective date hereof" or "date hereof" or other similar phrases
describing the date this Agreement becomes binding on Seller and
Buyer are used in this Agreement, such terms or phrases shall
mean and refer to the date on which the last party to execute
this Agreement so executes it.
18.12 Time for Acceptance. This Agreement shall
constitute an offer to buy or sell the Property, as case may be,
on the terms herein set forth only when executed by the Seller or
Buyer. Thereafter, this Agreement may be accepted by the party
receiving such executed Agreement only by executing this
Agreement and delivering an original signed copy hereof to the
Escrow Agent and an originally signed copy hereof to the other
party hereto within five (5) business days after such receipt.
Failure to accept in the manner and within the time specified
shall constitute a rejection and termination of such officer.
18.13 Trustee Exculpation. The name and
designation Pennsylvania Real Estate Investment Trust is the
designation of the Trustees from time to time under the Trust
Agreement amended and restated as of December 16, 1987 and
recorded in the Office for the Recording of Deeds in Norristown,
Montgomery County, Pennsylvania, in Deed Book 4864, page 1463,
and all persons dealing with the Pennsylvania Real Estate
Investment Trust must look solely to the Trust property for the
enforcement of any claims against Pennsylvania Real Estate
Investment Trust, as neither the Trustees, officers, agents or
shareholders of the Pennsylvania Real Estate Investment Trust
assumes any personal liability for obligations entered into by
the Pennsylvania Real Estate Investment Trust by reason of their
status as said Trustee, officer, agent or shareholder.
<PAGE>
<PAGE> 32 EXHIBIT 10.7
18.14 Enforcement Costs. In connection with any
suit, action, or other proceeding, including arbitration or
bankruptcy, arising out of or in any manner relating to this
Agreement, the successful or prevailing party or parties shall be
entitled to recover reasonable attorneys', paralegals' and/or
legal assistants' fees and disbursements (including disbursements
which would not otherwise be taxable as costs in the proceeding)
and expert witness fees through and including all post-judgment
and appellate levels.
18.15 Jurisdiction and Venue. The parties hereby
irrevocably consent that any legal action or proceeding arising
out of or in any way connected with this Agreement may be
instituted or brought in any court (federal or state) located in
Broward County, Florida and hereby irrevocably submit to the
jurisdiction of such court in any such legal action or
proceeding. In addition, the parties irrevocably and
unconditionally waive any objection which they may now or
hereafter have to the laying of venue of any of the aforesaid
actions or proceedings in the aforesaid courts and hereby further
irrevocably and unconditionally waive the right to plead or claim
that any such action or proceeding brought in any such court has
been brought in an inconvenient forum.
18.16 Radon Gas. Florida law requires the
inclusion of the following notification in connection with any
Florida real estate transaction involving the occupancy of a
building: "RADON GAS: Radon is a naturally occurring radioactive
gas that, when it has accumulated in a building in sufficient
quantities, may present health risks to persons who are exposed
to it over time. Levels of radon that exceed federal and state
guidelines have been found in buildings in Florida. Additional
information regarding radon and radon testing may be obtained
from your county public health unit." Seller shall allow Buyer
or Buyer's representative to test for radon gas in any or all
of the units or other portions of the property and to post
pre-testing notices informing Tenants of its intention to
perform such testing.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed the day and year first above
written.
SELLER: PEMBROKE ASSOCIATES LIMITED BUYER: PENNSYLVANIA REAL
PARTNERSHIP, by all of its ESTATE INVESTMENT
General Partners TRUST
PALMS OF PEMBROKE II, INC. BY: /s/ Jonathan B. Weller
---------------------------
Jonathan B. Weller, Trustee
By: /s/ Ronald A. Gargano
---------------------- BY: /s/ Robert G. Rogers
President --------------------------
Robert G. Rogers, Trustee
Attest:
----------------------
Secretary
GMP PEMBROKE, INC.
By: /s/ Ronald A. Gargano
--------------------------
Attest:
--------------------------
Agreed to by Escrow Agent with regard
to the obligations, terms, covenants
and conditions contained in this
Agreement relating to Escrow Agent.
Cohen, Shapiro, Polisher,
Shiekman & Cohen
By: /s/ Gregory G. Gosfield
---------------------------------
<PAGE>
<PAGE> 33 EXHIBIT 10.7
AMENDMENT NO. 1
TO PURCHASE AND SALE AGREEMENT
FOR THE PALMS OF PEMBROKE
This Amendment Agreement is made this 28th day of June 1994,
between ROBERT G. ROGERS and JONATHAN B. WELLER, as Trustees, and
on behalf of all other Trustees of the Pennsylvania Real Estate
Investment Trust, pursuant to the Trust Agreement last amended
and restated as of December 16, 1987 and recorded in the Office
of the Recording of Deeds in Norristown, Montgomery County,
Pennsylvania, in Deed Book 4864, Page 1463, designated as
Pennsylvania Real Estate Investment Trust, or its nominee or
assignee having its principal office at 455 Pennsylvania Avenue,
Suite 135, Fort Washington, PA 19034 ("Buyer"), and PEMBROKE
ASSOCIATE LIMITED PARTNERSHIP, a Wisconsin limited partnership
authorized to transact business in Florida as PEMBROKE ASSOCIATES
LIMITED PARTNERSHIP OF WISCONSIN, having its principal office at
902 Clint Moore Road, Suite 104, Boca Raton, FL 33487 ("Seller").
BACKGROUND
A. Buyer and Seller entered into a certain Purchase and
Sale Agreement last executed the 10th day of May, 1994.
B. The capitalized terms used in this Amendment shall have
the same meanings as in the Agreement, unless otherwise defined
herein, or the context of the Amendment clearly requires
otherwise.
C. The Buyer and Seller desire to amend certain provisions
of that Agreement as set forth herein.
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and with the preceding background
paragraphs incorporated by reference, the parties hereto,
intending to be legally bound hereby, agree as follows:
1. Section 2.1 is amended to delete the amount "Twenty
Million Seven Hundred Forty-six Thousand Five Hundred Dollars
($20,746,500)" and insert in its stead the amount "Twenty Million
Four Hundred Ninety-six Thousand Five Hundred Dollars
($20,496,500)".
2. Section 2.2.2 is amended to delete the amount
"$20,546,500" and insert in its stead the amount "$20,296,500".
3. Section 4.1 is amended to delete from the first
sentence the language "in the same fashion as performed for
buildings painted within such period and, in accordance with the
same schedule currently being followed by Seller (accordingly,
four buildings will not be painted and their landscape will not
be restored prior to the Closing Date)" and insert in its stead
the following clause: "such that all buildings will have roofs
cleaned, exteriors painted, and ancillary landscaping restored
within the twenty four months prior to the Closing Date,
including the four buildings which were previously intended to
remain unpainted and their landscapes unrestored; seal and
restripe all vehicular access and parking areas throughout the
Property;"
<PAGE>
<PAGE> 34 EXHIBIT 10.7
4. Section 8 is amended by deleting the second sentence
and substituting in its place the following: "Seller shall be
liable for any breach of warranty or representation contained in
this Agreement which results in damages in excess of $50,000,
such liability limited to actual damages not to exceed $500,000
in the aggregate for the first sixty days after Closing, and
thereafter reduced to $300,000 until the end of the twelfth month
after Closing; provided, however, Seller will not be liable for
breaches of warranties or representations as to Service
Agreements except for damages suffered by Buyer from third
parties after a final adjudication of such issues."
5. Section 11.2 is amended to delete the amount "$648,000"
and substitute in its stead the amount "$615,000".
6. The reduction in the Purchase Price reflected in
Paragraph 1 of this Amendment is in consideration for issues
raised by Buyer with respect to the presence of radon gas at the
Property. In consideration of the reduction in the Purchase
Price, Buyer hereby releases Seller of and from any and all
liability of any type or nature arising out of or in connection
with the presence of radon gas at the Property including, but not
limited to, any claims relative to radon which Buyer may make
with respect to breaches of representations and warranties in the
Agreement, any claims for a further reduction of the Purchase
Price, or any claims pursuant to Section 8 of this Agreement;
provided, however, such disclaimer and waiver shall not affect
Seller's obligations to indemnify and hold Buyer harmless from
(a) any governmental authority, and (b) any other third party,
but as to such other third party only for a claim made within the
twelve months succeeding Closing, as to any and all liability,
loss or damage suffered or incurred as a result of a claim,
demand, cost or judgment arising from any radon presence, or
deposit, storage, disposal, burial, dumping, injecting, spilling,
leaking, or other placement or release in or on the Premises of
Hazardous Substances or Wastes arising prior to the Closing Date.
7. This Amendment is conditioned upon receipt by Seller of
the consent of a majority in interest of the limited partners of
Seller to this Amendment on or before July 13, 1994. Should
Seller be unable to obtain sufficient consents from the limited
partners by July 13, 1994, Seller may cancel this Amendment by
written notice to Buyer on or before the end of business on July
13, 1994. Should Seller cancel this Amendment, Buyer may cancel
the Agreement by written notice to Seller on or before July 20,
1994 and obtain a return of all deposits in which event neither
party shall have any further liability under the Agreement except
as expressly stated in the Agreement in the event of a
termination of the Agreement.
8. Buyer and Seller hereby warrant and represent, each as
to itself, the following:
(a) The Agreement is binding and enforceable upon it
and nothing done pursuant to this Amendment shall affect the
binding nature and enforceability of the Agreement.
(b) It is in full and complete compliance with all of
its obligations under the Agreement.
(c) Except for this Amendment, it has not otherwise
amended or modified the Agreement, either orally or in writing,
and the Agreement represents the entire agreement between it and
the other party with respect to the Property.
<PAGE>
<PAGE> 35 EXHIBIT 10.7
(d) It has no actual knowledge of any default by the
other party under the Agreement and it does not have any actual
knowledge of any state of facts which, but for the giving of
notice and/or the passage of time, would be a default by either
party under the Agreement.
9. Except as otherwise modified hereby, the terms and
provisions of the Agreement shall remain unmodified and in full
force and effect.
10. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs,
executives, administrators, successors and assigns. This
Amendment shall not be effective unless signed by all the parties
hereto on or before the close of business of June 29, 1994. This
Amendment may be executed in one or more counterparts
all of which together shall be deemed one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed the day and year written below.
SELLER: PEMBROKE ASSOCIATES LIMITED BUYER: PENNSYLVANIA REAL
PARTNERSHIP, by all of its ESTATE INVESTMENT
General Partners TRUST
PALMS OF PEMBROKE II, INC. BY: /s/ Jonathan B. Weller
-------------------------
Jonathan Weller, Trustee
By: BY: /s/ Robert G. Rogers
-------------------------- -------------------------
President Robert G. Rogers, Trustee
Attest:
----------------------
Secretary
GMP PEMBROKE, INC.
By:
--------------------------
Attest:
----------------------
<PAGE>
