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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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): February 7, 1996
CLOVER INCOME PROPERTIES, L.P.
(Exact name of registrant as specified in its charter)
Delaware 0-16773 22-2772496
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
23 West Park Avenue, Merchantville, New Jersey 08109
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 609-662-1116
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Page 1 of 4 pages
Exhibit Index is on pages 2 and 3
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Item 5. Other Events.
On February 7, 1996, The Willowbrook Joint Venture (the "Joint
Venture"), Berwind Property Group, Inc. ("Berwind") and First Montgomery
Properties, Ltd. ("First Montgomery", and with Berwind, the "Buyers") executed
an Agreement of Sale (as amended, the "Sale Agreement") concerning the sale of
The Willowbrook Apartments (the "Willowbrook Property"). A copy of the Sale
Agreement is attached hereto as Exhibit A and a copy of the First Amendment to
the Sale Agreement, dated the same date, is attached hereto as Exhibit B.
Clover Income Properties, L.P.'s (the "Partnership") only
interest in real estate is its 42.91% interest in the Joint Venture, which owns
the Willowbrook Property. Clover Income Properties II, L.P. ("CIP II") and
Clover Income Properties III, L.P. ("CIP III"), each affiliates of the
Partnership, own the remaining interests in the Joint Venture.
Pursuant to the terms of the Sale Agreement, the Buyers have
agreed to purchase the Willowbrook Property for a purchase price of $10,500,000
(less a $315,000 credit for capital improvements). The completion of the sale of
the Willowbrook Property to Buyers is contingent upon a number of conditions,
including the approval of the holders of more than 50% of the outstanding units
of limited partnership interests in the Partnership and the approval of the
holders of more than 50% of the outstanding units of limited partnership
interests in each of CIP II and CIP III. In addition, for a period of 90 days
from the date of the execution of the Sale Agreement, the Buyers have the right
to cancel and terminate the Sale Agreement for any reason whatsoever.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
<TABLE>
<CAPTION>
Sequentially
Exhibits Numbered Page
<S> <C> <C>
A Agreement of Sale,
dated February 7, 1996
between the Joint Venture
and the Buyers. The Exhibits
to the Agreement of Sale
(the contents of which are
described in the Agreement
of Sale) are not being filed
as Exhibits to this Current
Report on Form 8-K. The
Partnership agrees to
furnish supplementally a
copy of any such Exhibits to the
Securities and Exchange
Commission upon request.
B First Amendment to Agreement
of Sale, dated February 7, 1996
between the Joint Venture
and the Buyers.
</TABLE>
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<PAGE>
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 thereunto duly authorized.
CLOVER INCOME PROPERTIES, L.P.
C.I.P. MANAGEMENT CORP.,
General Partner
Date: March 4, 1996 By: /s/ Donald N. Love
------------------
Donald N. Love
President
-3-
<PAGE>
EXHIBIT A
AGREEMENT OF SALE
THIS AGREEMENT, made this 7th day of February, 1996, by and between
WILLOWBROOK JOINT VENTURE, a New Jersey Joint Venture, of 23 West Park Avenue,
Merchantville, New Jersey 08109, hereinafter referred to as Seller, and BERWIND
PROPERTY GROUP, INC., a Pennsylvania Corporation, and FIRST MONTGOMERY
PROPERTIES, LTD., a Pennsylvania Corporation, c/o Berwind Property Group, Inc.,
3000 Centre Square West, 1500 Market Street, Philadelphia, Pennsylvania 19102,
hereinafter collectively referred to as Buyer.
WHEREAS, Seller is the owner of all that certain tract or parcel of
land and premises situate, lying and being in Baltimore, Maryland, commonly
known and referred to as Willowbrook Apartments; and,
WHEREAS, Seller desires to sell to the Buyer and Buyer desires to
purchase from the Seller said Willowbrook Apartments pursuant to the terms and
conditions hereinafter set forth,
WITNESSETH THAT:
NOW, THEREFORE, in consideration of the mutual covenants, promises and
agreements contained herein, the parties hereto, intending to be legally bound
hereby, do covenant and agree with each other as follows:
1. SALE AND PURCHASE OF PROPERTY:
(a) Seller hereby agrees to sell, convey, transfer, assign and
deliver to Buyer, and Buyer hereby agrees to purchase from Seller, on and
subject to the terms and conditions set forth in this Agreement, all of the
following properties and assets:
(i) All that certain lot, tract or parcel of land
and premises located in Baltimore, Maryland, together with the 299 unit
apartment complex including the two (2) office spaces constructed thereon,
including all recreational facilities, parking areas and amenities and
improvements appurtenant thereto, known as the Willowbrook Apartments, as more
particularly described in the metes and bounds legal description annexed hereto
as EXHIBIT A-1 and Seller's existing title survey annexed hereto as EXHIBIT A-2
(the "Existing Survey"); together with all easements, titles,
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estates, interests, privileges or rights, if any, with respect thereto,
including, without limitation, all right, title and interest, if any, of Seller
in and to any adjacent or abutting lands lying in the beds of streets, roads or
alleyways, open or proposed (collectively, the "Premises").
(ii) All furniture, fixtures, equipment and other
tangible personal property owned by Seller and employed in the operation of the
Premises, the principal items of which are more particularly set forth on the
inventory annexed hereto as EXHIBIT B (the "Personal Property").
(iii) All of Seller's right, title and interest as
landlord, without representation, warranty or recourse except as otherwise
specifically provided in this Agreement, in, to and under all leases of
apartment units constituting portions of the Premises in existence on the date
of Closing (as hereinafter defined) (the "Leases"). The Leases in existence on
the date set forth on the rent roll (the "Rent Roll") annexed hereto as EXHIBIT
C (the "Existing Leases") are more particularly described on the Rent Roll.
(iv) All of Seller's right, title and interest,
without representation, warranty or recourse except as otherwise specifically
provided in this Agreement, in, to and under the contracts and agreements
relating to the use, occupancy and operation of the Premises (the "Service
Contracts"), a schedule of which Service Contracts is annexed hereto as EXHIBIT
D.
(v) All of Seller's right, title and interest, if
any, without representation, warranty or recourse and to the extent assignable,
in and to (1) all certificates (including original certificate(s) of occupancy),
licenses, permits and approvals relating to and required for the operation of
the Premises, (2) all construction documents and as-built plans, architectural
and engineering plans, specifications, studies and reports relating to the
Premises, and (3) the trade or business name "Willowbrook Apartments" employed
in connection with the operation of the Premises or any derivations thereof (the
"Intangible Assets").
(b) The Premises, Personal Property, Leases, Service
Contracts and Intangible Assets are hereinafter sometimes collectively referred
to as the "Property".
(c) This Agreement does not include, and there is hereby
specifically excluded from the sale and purchase contemplated hereby, all cash
in accounts and accounts receivable and accounts payable and any other
obligations of Seller arising in connection
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with Seller's use, occupancy or operation of the Property, and Buyer shall have
no liability for any of such obligations, which shall remain the sole and
exclusive responsibility of and shall be fully paid and discharged by Seller at,
prior to or following Closing, unless otherwise assigned to and assumed by Buyer
pursuant to the terms of this Agreement.
2. PURCHASE PRICE: The total purchase price which the Buyer agrees to
pay to the Seller and which the Seller agrees to accept for the Property is the
sum of TEN MILLION FIVE HUNDRED THOUSAND ($10,500,000.00) DOLLARS (the "Purchase
Price"), which Purchase Price shall be paid by Buyer to Seller as follows:
(a)(i) The sum of FIFTY THOUSAND ($50,000.00) DOLLARS (the
"Initial Deposit") simultaneously with the execution and delivery of
this Agreement and the further sum of ONE HUNDRED FIFTY THOUSAND
($150,000.00) DOLLARS (the "Second Deposit") on or before the
expiration of the Feasibility Period or the Extended Feasibility Period
(as defined in Paragraph 7) unless this Agreement has been terminated
prior to such date. The Initial Deposit shall be hereinafter referred
to as the "Deposit" and the Second Deposit, if and when made, shall be
included within the definition of the "Deposit". The Deposit shall be
deposited with the Escrow Agent, as hereinafter defined, to be held
subject to the terms and conditions hereinafter set forth, and shall be
treated as payment on account of the Purchase Price if Closing is made
for the Property.
(ii) In the event that Closing is extended as
hereinafter provided, then the further sum of ONE HUNDRED THOUSAND
($100,000.00) DOLLARS (the "Third Deposit") at the time provided for in
Paragraph 3. The Third Deposit, if and when made, shall be included
within the definition of the "Deposit". The Third Deposit shall be
deposited with the Escrow Agent, as hereinafter defined, to be held
subject to the terms and conditions hereinafter set forth, and shall be
treated as payment on account of the Purchase Price if Closing is made
for the Property.
(b) At the time of Closing, as hereinafter provided, the
further sum of TEN MILLION THREE HUNDRED THOUSAND ($10,300,000.00) DOLLARS on
account of the Purchase Price by federal funds wire transfer to Seller's account
as designated to Buyer in writing; or if Closing is extended as provided in
Paragraph 3, at the time of the Extended Closing Date, as provided in Paragraph
3, the further sum of TEN MILLION TWO HUNDRED THOUSAND ($10,200,000.00) DOLLARS
on
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account of the Purchase Price, by federal funds wire transfer to Seller's
account as designated to Buyer in writing.
3. CLOSING: The transactions contemplated by this Agreement shall be
consummated (the "Closing") on or before thirty (30) days following the
expiration of the Feasibility Period or the Extended Feasibility Period (the
"Closing Date"), at 10:00 o'clock A.M. at the offices of Sherman, Silverstein,
Kohl, Rose & Podolsky, P.A., 4300 Haddonfield Road, Suite 311, Pennsauken, New
Jersey 08109. Buyer shall have the right to extend the Closing Date for a period
of up to thirty (30) days ("Extended Closing Date"), by serving written notice
thereof upon Seller on or before ten (10) days prior to the Closing Date and
simultaneously therewith delivering to the Escrow Agent, as hereinafter defined,
the Third Deposit required by Paragraph 2(a)(ii). The said time for Closing as
well as all other times for performance set forth in this Agreement are hereby
agreed to be of the essence of this Agreement. Tender of an executed Deed is
hereby waived. Immediately prior to the Closing Date or the Extended Closing
Date, Buyer shall have the right to close the loan (the "Purchase Money Mortgage
Loan"), if any, which is financing a portion of the Purchase Price, at a place
designated by the lender (the "Purchase Money Lender") of the Purchase Money
Mortgage Loan, if required as a condition of closing the Purchase Money Mortgage
Loan by the Purchase Money Lender.
4. TITLE AND CONVEYANCE: (a) The title to the Premises to be conveyed
at Closing by Seller to Buyer shall be conveyed in fee simple by special
warranty deed (with the only covenants being against grantors acts). Title shall
be good and marketable, insurable in the name of Buyer at ordinary premium rates
by a title insurance company of Buyer's selection in the full amount of the
Purchase Price subject, only, to those exceptions set forth herein and/or in
EXHIBIT E attached hereto and made a part hereof (the "Permitted Encumbrances").
(b) Title to the Personal Property to be delivered to Buyer at
Closing shall be free and clear of any and all liens, encumbrances, pledges,
conditional sales or other agreements, security interests, or charges of any
nature or kind, including financing statements of record affecting the same
created by Seller, excepting only those, if any, included in the Permitted
Encumbrances.
(c) If title shall not be as aforesaid, then Buyer shall have
the option of either taking such title as Seller can convey without an abatement
of the Purchase Price, or of terminating and cancelling this Agreement and being
repaid the Deposit; the foregoing shall be Buyer's sole rights and remedies in
the event
A-4
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title shall not be as aforesaid. Notwithstanding the foregoing, at the Closing
Date or the Extended Closing Date Seller shall fully pay and satisfy any liens
in liquidated amounts against the Premises limited to the "net proceeds of sale"
to which Seller is entitled at the time of Closing. For purposes hereof, "net
proceeds of sale" shall mean the amount by which the Purchase Price as adjusted
by the apportionments between the Seller and Buyer under Paragraphs 6(a), (b),
(c) and (e) hereof, exceeds the sum of (i) the costs which are the Seller's
responsibility under Paragraph 6(d) hereof and (ii) the credit to Buyer against
the Purchase Price under subparagraph 6(h) hereof.
5. TITLE CONVEYANCE AND POSSESSION:
(a) Title to the Premises shall be conveyed to Buyer at
Closing as set forth in Paragraph 4(a). Actual possession of the Premises shall
be delivered to Buyer on the Closing Date by delivery of the deed, free and
clear of claims of third parties to possession, except for tenants and occupants
of the Premises under the Leases and otherwise as may be included in the
Permitted Encumbrances.
(b) Title to the Personal Property shall be conveyed from
Seller to Buyer at Closing by special warranty (covenants against grantor's acts
only) bill of sale, without further representation, warranty or recourse, duly
executed and in form and content sufficient to convey title to such Personal
Property.
(c) Seller's interest in the Leases and security deposits
thereunder (including tenants' portion of the interest earned thereon, if
required by applicable law), Service Contracts and Intangible Assets shall be
conveyed to Buyer at Closing by assignments, without representation, warranty or
recourse, except as otherwise specifically provided in this Agreement, duly
executed and in form and content sufficient to transfer, assign and convey to
Buyer all of Seller's right, title and interest, if any, in and to the Leases,
the Service Contracts and Intangible Assets.
(d) Buyer shall accept title to the Property and shall assume,
on the Closing Date (or Extended Closing Date), all of Seller's obligations
arising with respect to periods after Closing under the Leases, and under those
Service Contracts assigned to Buyer hereunder, including Buyer's agreement to
indemnify, save and hold Seller harmless from and against any and all claims
made by the contracting parties or their permitted assigns thereunder which
accrue from and after the date of Closing. Seller shall indemnify, save and hold
Buyer harmless from and against any and all claims made by the contracting
parties or their permitted assigns under
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such Leases and Service Contracts which accrue prior to the date of Closing,
provided, however, that such indemnification and hold harmless agreement shall
expire, and claims thereon shall be made prior to, October 1, 1996. Said
indemnifications shall also include any costs, expenses and reasonable
attorneys' fees.
(e) Buyer and its agents shall have the privilege of entering
upon the Premises during normal working hours upon advance notice to Seller, at
reasonable times between the date hereof and the date of Closing, for the
purpose of making surveys, appraisals, environmental audits and physical
inspections of the Premises and reviewing such information to which Buyer is
entitled under Paragraph 7 hereof, provided no such activity shall in any way
interfere with any tenants in the Premises. Seller will cooperate with Buyer in
making such surveys, appraisals, environmental audits and inspections. Buyer
shall indemnify and save harmless the Seller from any liability, loss, cost or
expense (including reasonable attorney's fees) arising from or in connection
with such entry upon the Premises; said indemnification shall survive Closing
and/or termination of this Agreement.
6. APPORTIONMENTS, ADJUSTMENTS AND INCIDENTAL COSTS:
(a) The following items shall be apportioned pro rata between
Seller and Buyer as of 11:59 p.m. on the date immediately preceding
Closing:
1. Current collected rents, and prepaid rents, if any,
under the Leases;
2. Real estate taxes for the current assessment period
based on the fiscal year used by the taxing authority;
3. Water and sewer charges for the current assessment
period;
4. Any lump sum payment and/or the annual installment(s), if
any, for the year in which Closing occurs for any assessment(s) imposed
by any county, municipal, metropolitan district or commission and/or
governmental authority, based on the fiscal year used by the taxing
authority;
5. Fuel oil, if applicable;
6. Amounts due on any Service Contracts assigned by
Seller to Buyer pursuant to this Agreement;
7. Fees for all transferable state or local licenses
required in the operation of the Premises;
8. Swimming pool, cabana club and laundry facility
revenues, if any (which shall be apportioned on a seasonal
basis); and
9. Any other current charges incurred in connection with
the normal operation of the Premises.
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(b) Effective on the Closing Date (or the Extended Closing
Date) (i) Seller shall cause all accounts for gas, electric and other public
utilities servicing the Premises to be terminated and shall cause to be paid all
billings thereon, and (ii) Buyer shall establish in its own name accounts for
gas, electric and other public utilities servicing the Premises and shall be
responsible for all billings thereon.
(c) Seller shall be responsible for all wages, salaries,
accrued vacation pay and fringe benefits, if any, for all employees employed at
the Premises to the Closing Date (or Extended Closing Date) and Buyer shall be
responsible for wages, salaries, vacation pay and fringe benefits, if any, for
those employees whose employment Buyer elects to continue, from and after
Closing.
(d) The Seller shall pay for the drawing of the Deed. All
realty transfer fees and/or taxes shall be paid one-half (1/2) by Buyer and
one-half (1/2) by Seller. Buyer shall pay for all title searches, title
insurance, surveys, recording of the Deed and any other conveyancing expenses,
other than Seller's counsel fees and Seller's title charges and closing expenses
which shall be paid by Seller.
(e) The amount of all security deposits paid by tenants under
the Leases (together with tenant's portion of the interest earned thereon, if
required by applicable law) shall be paid or credited to Buyer at Closing except
with respect to those security deposits previously applied against the
obligations of any tenants as specified on the Rent Roll delivered at Closing;
and Buyer will thereafter assume responsibility for repayment or proper
application following Closing of such security deposits so paid or credited at
Closing (and tenant's portion of the interest earned thereon, if required by
applicable law) and Buyer shall indemnify and save harmless the Seller from any
and all claims made by tenants with respect to the application after Closing of
said security deposits (and interest earned thereon, if required by applicable
law); such indemnification shall also include any costs, expenses and reasonable
attorneys' fees.
(f)(i) With respect to the Apartments, all sums collected by
Buyer from tenants under the Leases within ninety (90) days after Closing shall
be applied by Buyer first on account of current rents due Buyer and second on
account of sums due Seller for rents accrued prior to Closing. All sums due
Seller for rents accrued prior to Closing which are collected by Buyer from
tenants at any time within the ninety (90) days after Closing shall be disbursed
by Buyer to Seller within fifteen (15) days after receipt
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by Buyer. Following ninety (90) days after Closing, Seller shall have no further
right in amounts collected from tenants.
(ii) With respect to the office space, all sums due
Seller for minimum monthly rents accrued prior to Closing which are collected by
Buyer from tenants after Closing shall be applied by Buyer in accordance with
subparagraph (f)(i) above.
(iii) With respect to the office space, regarding
the calendar year in which Closing is held, any collected percentage rent and/or
additional rent, including, but not limited to, CAM charges, share of "operating
costs" and/or real estate taxes and insurance required to be paid by tenant
pursuant to the Leases being assigned hereunder shall be apportioned pro rata
between Seller and Buyer as of midnight preceding the date of Closing and any of
such amounts collected by Buyer following Closing shall be paid and disbursed by
Buyer to Seller within fifteen (15) days of receipt of same by Buyer from the
tenants.
(g) Buyer is accepting title subject to any assessments
imposed by any county, municipal, metropolitan district or commission and/or
governmental authority payable on an annual basis, and shall be responsible for
all payments due therefore after Closing.
(h) At Closing, Buyer shall receive a credit against the
Purchase Price in the amount of $315,000.00 for capital improvement requirements
at the Premises.
7. FEASIBILITY PERIOD: (a) For a Feasibility Period of seventy-five
(75) days from the date hereof (the "Feasibility Period"), Buyer is granted the
right to conduct physical inspections, tests and investigations of the Premises
in such a manner as not to inconvenience the tenants and to review copies of the
Leases, Service Contracts, bills for calendar years 1994 and 1995 for real
estate taxes, utilities (water, sewer, gas and electric) insurance premiums and
trash removal pertaining to the Premises. At any time during said Feasibility
Period, Buyer shall have the right, for any reason whatsoever, to cancel and
terminate this Agreement by serving written notice thereof upon Seller on or
before the expiration of said Feasibility Period; if Buyer elects to terminate
this Agreement as permitted herein, then this Agreement shall be cancelled and
terminated and the Deposit, together with interest earned thereon, shall be
returned to Buyer and neither party hereunder shall have any further liability
or obligation to the other hereunder except with respect to the indemnifications
contained in this Paragraph 7, Paragraph 5(e) and Paragraph 22; if Buyer fails
to exercise its right to terminate
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this Agreement as permitted herein, then said right shall automatically lapse,
terminate and become null and void. Buyer shall indemnify and save harmless the
Seller from any liability, loss, cost or expense (including reasonable
attorney's fees) arising from or in connection with such inspection and/or entry
upon the Premises; said indemnification shall survive Closing and/or termination
of this Agreement. Buyer shall have the right to extend the Feasibility Period
for a period of fifteen (15) days (the "Extended Feasibility Period") by serving
written notice thereof upon Seller on or before the expiration of the
Feasibility Period, provided that during the Extended Feasibility Period, Buyer
shall only have the right to terminate this Agreement if Buyer fails to obtain a
commitment for a Purchase Money Mortgage Loan on terms and conditions
satisfactory to Buyer, in Buyer's sole discretion.
(b) In the event the total gross rents required to be paid
under the Existing Leases are more than ten (10%) percent below the total gross
rents as set forth in the Rent Roll attached hereto as EXHIBIT C (a "Material
Rent Roll Discrepancy"), Buyer shall have the right to terminate this Agreement
by serving written notice thereof upon Seller on or before February 21, 1996 and
in that event, this Agreement shall be cancelled and terminated and the Deposit,
together with interest earned thereon, shall be returned to Buyer and neither
party shall have any further liability or obligation to the other hereunder
except with respect to the indemnifications contained in Paragraphs 5(e), 7 and
22; in the absence of exercising said right on or before February 21, 1996, such
right shall be deemed waived and cancelled.
(c) In the event the Purchase Money Lender determines to not
issue a commitment for the Purchase Money Mortgage Loan solely as a result of
the existence of an environmental condition, as determined by the Purchase Money
Lender (an "Environmental Condition"), Buyer shall have the right to terminate
this Agreement by serving written notice thereof upon Seller on or before the
expiration of the Feasibility Period or the Extended Feasibility Period, as the
case may be, and in that event, this Agreement shall be cancelled and terminated
and the Deposit, together with interest earned thereon, shall be returned to
Buyer and neither party shall have any further liability or obligation to the
other hereunder except with respect to the indemnifications contained in
Paragraphs 5(e), 7 and 22; in the absence of exercising said right on or before
the expiration of the Feasibility Period or the Extended Feasibility Period, as
the case may be, such right shall be deemed waived and cancelled.
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8. CONDITION OF PREMISES: Except as specifically set forth in this
Agreement, notwithstanding anything else contained in this Agreement to the
contrary, Seller makes no representation, either prior to or at the Closing,
with respect to the condition or character of the Property or the use or uses to
which the Property may be put. Buyer acknowledges that pursuant to Paragraph 7,
Buyer will carefully and thoroughly examine, inspect and investigate the
Property, those items referred to hereinabove in Paragraph 1 and/or elsewhere in
this Agreement, and the Seller's operations (as to manner, income and expenses),
and provided that Buyer does not elect to terminate this Agreement, Buyer will
be fully satisfied with the same upon completion of the inspections and
examinations referred to in Paragraph 7; and Buyer is purchasing the same on the
basis of such examination, inspection and investigation and not in reliance on
any representation or warranty of Seller or any agent, employee or
representative of Seller of any kind or nature whatsoever. Accordingly, except
as otherwise specifically set forth in this Agreement, Buyer hereby agrees to
accept all of the assets being acquired by Buyer hereunder, whether realty,
personalty or mixed, on an absolutely and unconditionally "as is" basis at the
time of Closing.
9. CONTINGENCIES: Closing under this Agreement is subject
to and conditioned upon completion of closing under all, but not
less than all, of the Agreements of Sale described on EXHIBIT F
attached hereto. Notwithstanding the foregoing to the contrary,
(a) if any one or more of the Agreements of Sale described on
EXHIBIT F attached hereto is terminated by Buyer as a result of (1) fire or
other casualty loss pursuant to Paragraph 16(b) thereof, (2) a condemnation
pursuant to Paragraph 17(a) thereof, (3) the seller's inability to deliver the
title required pursuant to Paragraph 4(a) thereof, (4) a willful and intentional
material breach or misrepresentation by the seller pursuant to Paragraph 24(c)
thereof, (5) a Material Rent Roll Discrepancy as defined in Paragraph 7(b)
thereof or (6) inability to obtain and deliver a "non-applicability letter"
pursuant to Paragraph 7(d) of the Burnt Mill, Moorestowne Woods, Roberts Mill
and Vineland Village Agreements, Seller and Buyer shall nevertheless complete
Closing under this Agreement, and Buyer shall nevertheless complete Closing
under all of the other Agreements of Sale described on EXHIBIT F attached hereto
which have not been terminated pursuant to a Permitted Termination (as defined
below).
(b) Seller's obligation to close under this Agreement is
subject to and conditioned upon the receipt of any and all approvals and
consents necessary for Seller to consummate the transaction contemplated by
this Agreement. Seller will use its
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best efforts to endeavor to obtain said approvals and consents. If all such
approvals and consents necessary for Seller to consummate the transaction
contemplated by this Agreement are not received within ninety (90) days from the
date hereof, then this Agreement shall be automatically cancelled and
terminated, the Deposit, together with interest earned thereon, shall be
returned to the Buyer, and neither party shall have any further liability or
obligation to the other hereunder except with respect to the indemnifications
contained in Paragraphs 5(e), 7 and 22.
(c)(i) If two (2) or less of the Agreements of Sale described
on EXHIBIT F attached hereto are terminated by the Buyer as a result of
an Environmental Condition pursuant to Paragraph 7(c) thereof, Seller
and Buyer shall nevertheless complete Closing under this Agreement, and
Buyer shall nevertheless complete Closing under all of the other
Agreements of Sale described on EXHIBIT F attached hereto which have
not been terminated pursuant to a Permitted Termination.
(ii) Notwithstanding Paragraph 9(c)(i) to the contrary, if
three (3) or more of the Agreements of Sale described on EXHIBIT F
attached hereto are terminated by the Buyer as a result of an
Environmental Condition pursuant to Paragraph 7(c) thereof, Seller
shall have the right to complete Closing under this Agreement provided
that each seller under each of the other Agreements of Sale described
on EXHIBIT F attached hereto which have not been terminated pursuant to
a Permitted Termination, exercise its right to complete Closing
thereunder, in which event the Buyer shall be obligated to complete
Closing under this Agreement and all of the other Agreements of Sale
described on EXHIBIT F attached hereto which have not been terminated
pursuant to a Permitted Termination; if each seller under each of the
other Agreements of Sale described in EXHIBIT F attached hereto which
have not been terminated pursuant to a Permitted Termination does not
exercise its right to complete Closing thereunder, then this Agreement
shall be terminated, and thereupon the Deposit, together with interest
earned thereon, shall be returned to Buyer, and upon such termination
Seller shall pay to Buyer the sum of TWENTY THOUSAND ($20,000.00)
DOLLARS as liquidated damages as Buyer's sole and exclusive remedy.
Seller shall exercise its right to complete Closing under this
Agreement by serving written notice thereof upon Buyer within ten (10)
days after Seller receives written notice from Buyer of Buyer's
termination of three (3) or more of
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the Agreements of Sale described on EXHIBIT F attached hereto as a
result of an Environmental Condition pursuant to Paragraph 7(c)
thereof, as set forth above.
(d) If any one (1) or more of the Agreements of Sale described
on EXHIBIT F attached hereto is terminated as a result of a Third Party
Action pursuant to Paragraph 34 thereof, Seller and Buyer shall
nevertheless complete Closing under this Agreement, and Buyer shall
nevertheless complete Closing under all of the other Agreements of Sale
described on EXHIBIT F attached hereto which have not been terminated
pursuant to a Permitted Termination.
A termination of any of the Agreements of Sale described on EXHIBIT F attached
hereto pursuant to Paragraphs 16(b), 17(a), 4(a), 24(c), 7(b), 7(c) or 34
thereof, or Paragraph 7(d) (with respect to the Burnt Mill, Moorestowne Woods,
Roberts Mill and Vineland Village Agreements only) is referred to herein as a
"Permitted Termination".
10. REPRESENTATIONS, WARRANTIES AND CERTAIN COVENANTS OF SELLER: As a
material inducement to cause Buyer to enter into this Agreement, Seller hereby
represents, warrants and covenants as follows:
(a) Leases. The Premises contains 299 apartment units
including the two (2) office spaces. The Rent Roll is a true, correct and
complete list, as of the date thereof, of all Existing Leases affecting the
Premises; the expiration dates of the Existing Leases; the rents payable by
tenants thereunder; and security deposits made by tenants and held by Seller,
and tenant's portion of any accrued interest thereon, if required by applicable
law. No tenant has any unilateral right or option to renew or extend the term of
its lease except as otherwise disclosed in the Rent Roll. There are no sums to
be credited to any tenant or any set-offs against rent which may be claimed by
any tenant by reason of any alterations, pre-paid rent, rental allowances,
repairs, free rent, or otherwise pursuant to any written agreement between such
tenant and Seller, except as otherwise disclosed in the Rent Roll. Any payments
due to any tenant under any Existing Lease have been made. Except as disclosed
on EXHIBIT D, no brokers or other intermediaries are entitled to receive any
leasing, brokerage or other compensation out of or with respect to rents
accruing under any Existing Leases pursuant to a written agreement between such
brokers or other intermediaries and Seller, and no future Leases will make
provision therefor. All obligations of Seller as landlord pursuant to Leases,
including, without limitation thereto, decorating and alteration work, which
shall have accrued at or
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prior to Closing will have been performed by Seller at or prior to Closing. No
apartment is being rented free to any person except as shown on the Rent Roll.
Copies of all Existing Leases, together with any modifications or amendments
thereto are available for review during the Feasibility Period by Buyer at the
Premises. To the best of Seller's knowledge, all Existing Leases are in full
force and effect, except as otherwise disclosed in the Rent Roll. The provisions
of this subparagraph (a) shall survive Closing until October 1, 1996.
(b) Bargaining Agreements. There are no collective bargaining
agreements or union contracts now in existence with respect to persons employed
on the Premises, or any part thereof, and no demand has been made upon Seller
for recognition of a union or collective bargaining agent. The provisions of
this subparagraph (b) shall survive Closing until October 1, 1996.
(c) Litigation. There is no litigation or proceeding pending
(nor to Seller's knowledge, has Seller received any written threats thereof)
against or relating to the Premises, other than possible claims adequately
covered by insurance and/or tenancy actions in the ordinary course of business,
except as set forth on EXHIBIT G. Seller will be responsible for all claims
disclosed on EXHIBIT G and Buyer shall have no responsibility therefore. The
provisions of this subparagraph (c) shall survive Closing until October 1, 1996.
(d) Condemnation. There is no pending, nor to the best of
Seller's knowledge, has Seller received written notice of any threatened,
condemnation or eminent domain proceedings which would affect the Premises or
any part thereof. The provisions of this subparagraph (d) shall survive Closing
until October 1, 1996.
(e) Insurance. All insurance policies maintained by Seller
with respect to the Property are listed on EXHIBIT H, annexed hereto, are in
full force and effect, and will be so maintained in full force and effect with
all premiums paid until the Closing Date (or the Extended Closing Date).
(f) Violations. Neither Seller nor any agent of Seller has
received from any governmental authority, any written notices asserting any
violation of any applicable law, regulation or other governmental requirement
except those violations set forth on EXHIBIT K, attached hereto and made a part
hereof, which violations Seller will correct, at Seller's sole cost and expense,
prior to Closing. In the event any such additional notices are served or
received prior to the date of this Agreement, Seller will effect full compliance
therewith prior to Closing, (or as soon thereafter
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as may be practicable). If between the date of this Agreement and the Closing
Date (or Extended Closing Date), Seller receives any written notice of any
violations issued by any governmental authority with respect to the Premises,
the parties will, on or prior to Closing, (or as soon thereafter as may be
practicable) expend up to the maximum sum of One Hundred Thousand ($100,000.00)
Dollars to cure or toward the cure of same as follows:
1. Buyer shall pay the initial Twenty Five Thousand
($25,000.00) Dollars,
2. Seller shall pay the next Twenty Five Thousand
($25,000.00) Dollars, and
3. Buyer and Seller shall share equally the next Fifty
Thousand ($50,000.00) Dollars
and Closing shall be completed hereunder. If the cost to cure said violations
exceeds the sum of One Hundred Thousand ($100,000.00) Dollars, then either
Seller or Buyer shall have the right, but not the obligation, to pay such excess
in which event Closing shall be completed hereunder; if neither Seller nor Buyer
elects to pay such excess, then this Agreement shall be cancelled and
terminated, the Deposit, together with interest earned thereon, shall be
returned to the Buyer and neither party shall have any further liability or
obligation to the other hereunder, except with respect to the indemnifications
contained in Paragraphs 5(e), 7 and 22. The provisions of this subparagraph (f)
shall survive Closing until October 1, 1996.
(g) Environment. To the actual knowledge of Steven Zalkind,
during the past three years, except as set forth on EXHIBIT I attached hereto
and made a part hereof, the Seller has received no written notice of any
violation arising from the existence, storage, or disposal of hazardous
substances or hazardous waste as defined in any applicable federal, state or
local statute, law or regulation, at or affecting the Premises, from any
governmental authority having jurisdiction over the Premises. The provisions of
this subparagraph (g) shall survive Closing until October 1, 1996.
(h) Warranties. At Closing, Seller shall assign, without
representation, warranty or recourse, to Buyer all manufacturers or other
warranties, if any, held by Seller with respect to the Premises and Personal
Property.
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(i) Contracts. The schedule of Service Contracts attached
hereto as EXHIBIT D is a true, correct and complete list of all contracts which
affect the Premises, identifying the contractor, its duties, the term of the
Service Contract, the rate of compensation payable and the length of notice
required to cancel such Service Contract. At Closing, Seller shall assign,
without representation, warranty or recourse, except as otherwise specifically
provided in this Agreement, to Buyer such Service Contracts. The provisions of
this subparagraph (i) shall survive Closing until October 1, 1996.
(j) Employees.
(i) The schedule of employees, annexed hereto as
EXHIBIT J, is a true, correct and complete list of all persons
presently employed (and their position) in connection with the
management, operation or maintenance of the Premises. None of
such persons is covered by a written employment agreement, and
the employment of all such persons is subject to termination
on not more than thirty (30) days notice, without cause,
premium or penalty.
(ii) For a period of twelve (12) months following
Closing, Seller shall not, and shall use its best efforts to
cause any property manager engaged by Seller at the Premises
to not, solicit for employment or employ, whether as employee
or independent contractor, any person employed at the Premises
identified on EXHIBIT J or any replacement of a person
identified on EXHIBIT J.
The provisions of subparagraph (j)(i) shall survive Closing until October 1,
1996 and the provisions of subparagraph (j)(ii) shall survive Closing for a
period of twelve (12) months following Closing.
(k) Foreign Person. Seller is not a foreign person as defined
in Section 1445(f)(3) of the Code. Seller will deliver to Buyer at Closing a
Certificate of Nonforeign Status, in the form reasonably requested by Buyer,
certifying the correctness of this subparagraph.
(l) The Purchase Price exceeds the outstanding balance(s) of
the existing mortgage lien(s) encumbering the Premises.
(m) Until October 1, 1996, Seller will maintain its
existence as a limited partnership, will maintain its principal
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office at 23 West Park Avenue, Merchantville, New Jersey 08109 and will maintain
a cash balance of at least $50,000.00 in Seller's existing accounts. The
provisions of this subparagraph (m) shall survive Closing until October 1, 1996.
11. DELETED PRIOR TO EXECUTION.
12. DELETED PRIOR TO EXECUTION.
13. OPERATIONS PRIOR TO CLOSING: Between the date of this
Agreement and the Closing Date (or Extended Closing Date):
(a) Seller may rent any apartment on the Premises now vacant
or which becomes vacant prior to Closing and may extend or renew Existing
Leases, provided such initial, extended or renewal term may not exceed one (1)
year and shall be effected on forms and under the terms in use by Seller at the
time of execution of this Agreement at a monthly rental equivalent to the market
rent for that type of unit.
(b) Seller shall continue to operate, maintain and manage the
Premises in the same manner as it has done in the past, until Seller gives
possession to Buyer at Closing which includes complying with landlord's
obligations, and enforcement of the tenant's obligations, under the Leases.
(c) Except as provided in subparagraph (a) hereof, Seller will
not enter into any contract for, or on behalf of, or affecting the Premises
which cannot be terminated by Buyer upon thirty (30) days notice, without cause
and without charge, cost, penalty or premium.
(d) Without Buyer's consent, Seller will not voluntarily incur
any obligations or liabilities for which the Buyer will be responsible following
Closing and Seller will not voluntarily mortgage, pledge or subject the Premises
to a consensual lien or other encumbrance; Buyer's consent to the foregoing
shall not be unreasonably withheld or delayed as long as the transaction for
which consent is requested is in the ordinary course of Seller's business and
will not affect Seller's performance of its obligations under this Agreement.
(e) Seller will not remove or permit to be removed (without
replacing same with items of equal utility and value) any items of furniture,
furnishings, fixtures, equipment or other items of personal property owned by
Seller from any of the apartment units within the Premises.
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(f) Seller will maintain and renew all insurance policies
affecting the Premises which are currently in force and effect or replace them
with insurance policies providing comparable coverage.
14. DOCUMENTS TO BE DELIVERED AT CLOSING.
(a) At Closing, Seller will deliver to Buyer the following,
executed and if applicable, acknowledged and in recordable form, as appropriate:
(1) the special warranty deed (with the only
covenants being against grantors acts) to the Premises;
(2) the special warranty bill of sale for the
Personal Property;
(3) an assignment or assignments, without
representation, warranty or recourse except as otherwise specifically
provided in this Agreement, of the Leases and security deposits
(together with tenant's portion of the interest earned thereon, if
required by applicable law) as provided herein, and the Service
Contracts together with the original Leases and the Service Contracts,
and such other documents and instruments as shall be necessary to
transfer to Buyer all of Seller's right, title and interest in and to
the Leases and the security deposits thereunder, together with tenant's
portion of any interest earned thereon, if required by law, and the
Service Contracts;
(4) all Intangible Assets in Seller's possession,
together with, to the extent assignable, an assignment assigning,
without representation, warranty or recourse, the Intangible Assets to
Buyer;
(5) the Rent Roll for the Premises, dated as of the
date of Closing, certified by Seller as true, correct and complete;
(6) notices to all tenants, prepared by and in form
and substance reasonably satisfactory to Buyer, instructing tenants to
make all future rent payments to Buyer or its designee;
(7) evidence reasonably satisfactory to Buyer of
termination effective as of Closing of the property
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management agreement for the Property with NPI-CL Management L.P.
(8) all licenses, permits, approvals and certificates
required by local law to transfer the Premises to Buyer. Seller shall
obtain such licenses, permits, approvals and certificates, but the cost
to correct any violations or comply with any requirements necessary to
obtain same shall be borne by Buyer and Seller in the same manner, in
accordance with and as part of the provision of Paragraph 10(f)
pertaining to the obligation to cure violations and the allocation
between Buyer and Seller of the cost thereof;
(9) assignment, without representation, warranty or
recourse, of all assignable warranties and guaranties affecting any
portion of the Premises and the Personal Property, together with the
originals of such warranties and guaranties;
(10) a certificate of Seller's general partner(s),
dated as of the date of Closing, to the effect that (i) Seller is duly
organized and validly existing under the laws of the State of its
organization, and is duly authorized to conduct business in the State
of Maryland, (ii) Seller has sufficient partnership authority to carry
out the terms of, and consummate Closing under, this Agreement, (iii)
this Agreement has been duly authorized, executed and delivered, (iv)
this Agreement is a valid and binding obligation of Seller, (v) the
executing partner(s) are fully authorized to act on behalf of Seller
and the consent, if any, of all partners required therefor has been
obtained and remains in full force and effect, (vi) Seller has taken or
caused to be taken all requisite partnership or other action in order
to authorize the performance by it of its obligations under this
Agreement, and (vii) those representations, warranties and covenants of
Seller contained in Paragraphs 10(a), 10(b), 10(c), 10(e), 10(g), 10(i)
and 10(j) of this Agreement are true and correct in all material
respects as of the date of Closing except for (i) variations which
occur in the ordinary course of Seller's business, (ii) variations
disclosed in writing to Buyer prior to Closing, or (iii) any matter or
occurrence discovered by the Buyer during or following the Feasibility
Period; this Paragraph 14(a)(10)(vii) shall not be construed as
limiting Buyer's rights under Paragraph 24.
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(11) such affidavits as may be reasonably required by
Buyer's title company to enable the title company to insure Buyer's
title to the Premises without exception for unfiled mechanics' or
materialmen's liens, without payment of any special or additional
premiums;
(12) the Certificate of Non-foreign Status as
required hereunder;
(13) such other documents as may be reasonably
required to effectuate this Agreement; and
(14) Seller shall use its best efforts to obtain and
deliver to Buyer Estoppel Certificates from all of the office space
tenants at the Premises, which Estoppel Certificates shall be dated no
earlier than thirty (30) days prior to the Closing Date, shall be
addressed to Seller, Buyer and Purchase Money Lender and shall be in
the form of Estoppel Certificate attached hereto and made a part hereof
and marked EXHIBIT L; if Seller is unable to obtain any of the Estoppel
Certificates as required herein, then Buyer shall accept such Estoppel
Certificates as Seller has been able to obtain, Seller will deliver to
Buyer Seller's Estoppel Certificate (which shall expire and terminate
on October 1, 1996) with respect to any office space tenant for which
Seller has not obtained an Estoppel Certificate as required hereunder
and Closing shall be completed in accordance with the terms hereof.
Following Closing, Seller shall have the right to obtain and deliver to
Buyer an Estoppel Certificate as required hereunder from any office
space tenant for which Seller has not obtained an Estoppel Certificate
at the time of Closing, and in such event Seller's Estoppel Certificate
with respect to such office space tenant shall terminate.
(b) At Closing, Buyer shall deliver, or cause to be
delivered, to Seller the following:
(1) the portion of the Purchase Price required to be
paid at Closing pursuant to Paragraph 2(b) above;
(2) a certificate of Buyer's general partner(s),
dated as of the date of Closing, to the effect that (i) Buyer is duly
organized and validly existing under the laws of the State of its
organization, and is duly authorized to conduct business in the State
of Maryland, (ii) Buyer has sufficient partnership authority to carry
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out the terms of, and consummate Closing under, this Agreement, (iii)
this Agreement has been duly authorized, executed and delivered, (iv)
this Agreement is a valid and binding obligation of Buyer, (v) the
executing partner(s) are fully authorized to act on behalf of Buyer,
and the consent, if any, of all partners required therefor has been
obtained and remains in full force and effect, and (vi) Buyer has taken
or caused to be taken all requisite partnership or other action in
order to authorize the performance by it of its obligations under this
Agreement. Reference to Buyer herein shall include and mean Buyer's
assignee as permitted in Paragraph 20.
(3) such other documents as may be reasonably
required to effectuate this Agreement.
15. BUYER'S AND SELLER'S STATUS: (a) Buyer represents and warrants to
Seller that Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the Commonwealth of Pennsylvania and same shall be
true at the time of Closing; Buyer has full power and authority to consummate
the purchase of the Premises as contemplated hereby, and all requisite action as
required by law to authorize the execution, delivery and performance hereof by
Buyer has been taken.
(b) Seller represents and warrants to Buyer that Seller is a
limited partnership duly organized, validly existing and in good standing under
the laws of the State of New Jersey and same shall be true at the time of
Closing; Seller has full power and authority to consummate the sale of the
Premises as contemplated hereby, and all requisite action as required by law to
authorize the execution, delivery and performance hereof by Seller has been
taken.
16. FIRE OR OTHER CASUALTY: (a) Damage to the Premises by fire or other
insured-against casualty between the date hereof and the time of Closing shall
not impair the obligations of either party under this Agreement. In
consideration thereof, Seller agrees to continue to maintain full insurance
risks generally known as extended coverage, at Seller's cost and expense, until
Closing. At Closing, the net proceeds of such insurance (but specifically
excluding rent insurance) collected prior to Closing, together with the amount
of all deductibles, will be credited on account of the Purchase Price by
reducing the amount due Seller at Closing, and all unpaid claims and rights in
connection with losses under such policies (but specifically excluding rent
insurance) will be assigned to Buyer at Closing. The amount of any unpaid claims
will not, however, be credited on account of the Purchase Price. The
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term "net proceeds" as used above shall mean those insurance proceeds remaining
after application of the gross insurance proceeds for restoration and repair.
(b) Notwithstanding anything contained in Paragraph 16(a) to
the contrary, in the event that the cost of restoration or repair of damage to
the Premises by fire or other casualty between the date hereof and the time of
Closing (1) is less than ten (10%) percent of the Purchase Price for the
Premises hereunder and the Purchase Money Lender determines to not close the
Purchase Money Mortgage Loan solely as a result of the fire or other casualty,
or (2) exceeds ten (10%) percent of the Purchase Price for the Premises
hereunder, Buyer shall have the right to terminate this Agreement by serving
written notice thereof upon Seller within fifteen (15) days following receipt of
notice of such fire or other casualty and in that event, this Agreement shall be
cancelled and terminated and the Deposit, together with interest earned thereon,
shall be returned to Buyer and neither party shall have any further liability or
obligation to the other hereunder except with respect to the indemnifications
contained in Paragraphs 5(e), 7 and 22; in the absence of exercising said right
within said fifteen (15) day period, such right shall be deemed waived and
cancelled.
17. EMINENT DOMAIN: (a) In the event Seller receives any notice of any
condemnation proceedings, or other proceedings in the nature of eminent domain,
Seller will forthwith send a copy of such notice to Buyer. If (1) a Substantial
Portion (being defined herein as a taking which will result in an award in
condemnation and/or damages in excess of ten (10%) percent of the Purchase Price
for the Premises hereunder) of the Premises is taken by eminent domain or (2)
less than a Substantial Portion of the Premises is taken by eminent domain and
the Purchase Money Lender determines to not close the Purchase Money Mortgage
Loan solely as a result of such taking, Buyer may, upon written notice to Seller
within fifteen (15) days after receipt of notice of such taking, elect to cancel
this Agreement, and in such event the Deposit, together with interest earned
thereon, shall be returned to Buyer hereunder and neither party shall have any
further liability or obligation to the other hereunder except with respect to
the indemnifications contained in Paragraphs 5(e), 7 and 22. If a Substantial
Portion of the Premises is taken or condemned and this Agreement is not
cancelled, Seller shall, at Closing assign to Buyer all of Seller's right, title
and interest in and to any awards in condemnation, or damages of any kind, to
which Seller is or may have become entitled, but has not received, by reason of
any exercise of the power of eminent domain with respect to or for the taking of
the Premises or any part thereof, or credit on account of the Purchase Price by
reducing the amount due Seller at Closing, the amount of
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any such awards or damages which Seller has theretofore received.
(b) If less than a Substantial Portion of the Premises is
taken by eminent domain, and this Agreement is not cancelled pursuant to
Paragraph 17(a)(2) above, the obligations of the parties under this Agreement
shall not be impaired and this Agreement shall not be cancelled, and Seller
shall, at Closing, assign to Buyer all of Seller's right, title and interest in
and to any awards in condemnation, or damages of any kind, to which Seller is or
may become entitled, but has not received, by reason of any exercise of the
power of eminent domain with respect to or for the taking of any part of the
Premises, or credit on account of the Purchase Price by reducing the amount due
Seller at Closing, the amount of any such awards or damages which Seller has
theretofore received.
18. DEFAULT BY BUYER: In the event the Buyer fails to comply with or
otherwise defaults in any of the provisions of this Agreement, the Deposit shall
be retained by the Seller as liquidated damages; the foregoing shall be Seller's
sole remedy in the event Buyer fails to comply with or otherwise defaults in any
of the provisions of this Agreement. Furthermore, in the event the Buyer
defaults under the terms of any of the Agreements of Sale described on SCHEDULE
F attached hereto, same shall constitute a default by Buyer under the terms of
this Agreement, and the Deposit shall be retained by the Seller as liquidated
damages. Notwithstanding anything contained in this Paragraph 18 to the
contrary, the indemnifications contained in Paragraphs 5(e), 7 and 22 shall
survive termination of this Agreement and remain in full force and effect.
19. SURVIVAL: Except as otherwise specifically provided in this
Agreement, none of the covenants, conditions, representations, warranties, and
agreements of Seller contained in this Agreement shall survive Closing
hereunder, notwithstanding any legal presumption which may be to the contrary.
20. ASSIGNMENT: This Agreement of Sale shall not be assigned by Buyer
except to an entity in which a wholly owned subsidiary of Berwind Property
Group, Inc. and an affiliate of First Montgomery Properties, Ltd. in which
Mitchell Morgan owns not less than fifty (50%) percent of the equity, are
general partners.
21. RECORDATION: The parties hereto agree that this Agreement of Sale
shall not be recorded by either party in any public recording office or
elsewhere. Recordation of this Agreement by Buyer shall be deemed to be a
substantial breach by Buyer of this Agreement and, at Seller's option, this
Agreement may
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thereby be declared to be null and void and Buyer hereby grants to Seller,
without further authorization, its Power of Attorney to do whatever is necessary
to make, execute, acknowledge and deliver any and all proper documents and/or
instruments in order to discharge the said recordation of this Agreement.
22. BROKERAGE: The parties represent and warrant to each other that no
finders, real estate brokers or other persons entitled to claim a fee or
commission have interested either of them in this transaction; and the parties
hereto expressly agree to indemnify and save harmless each other of and from the
payment of any and all finders' and brokers' fees and commissions caused and/or
created by the acts or conduct of the other. The provisions of this paragraph
shall survive Closing or the termination of this Agreement.
23. ESCROW OF DEPOSIT: (a) The Deposit shall be held in escrow by
Sherman, Silverstein, Kohl, Rose & Podolsky, P.A., Attorneys-at-Law, herein
referred to as Escrow Agent, who shall pay the same over to the Seller at the
time of Closing hereunder or shall pay the same over to the party entitled
thereto upon the cancellation or termination of this Agreement of Sale, and in
either event said Escrow Agent shall thereupon be discharged from all
liabilities therefor.
(b) Said Escrow Agent shall be responsible only for the
safekeeping of the Deposit and shall not be responsible for the resolution of
any questions of fact or law. In the event of a dispute arising between the
parties, said Escrow Agent is authorized to deposit the Deposit into Court or
hold the same until said dispute is resolved. The parties hereto understand and
agree that in the event of any such dispute, none of the parties hereto shall
assert or allege that Escrow Agent has a conflict of interest respecting its
obligations hereunder, and Escrow Agent shall be permitted to represent Seller
in connection with any such dispute.
(c) The Escrow Agent shall hold/invest the Deposit in such
interest-bearing account(s) in a federally insured bank or savings institution
or investment as may be designated by the Buyer. The interest earned on the
Deposit being held in escrow shall be paid to the party entitled to the Deposit
pursuant to Paragraph 23(a) above.
24. DEFAULT BY SELLER: (a) Prior to title passing and the completion of
Closing, in the event of Seller's default hereunder, Buyer's sole remedies shall
be that of specific performance without abatement of purchase price or
termination of this Agreement and
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return of the Deposit, together with interest earned thereon; in no event shall
Buyer be entitled to damages of any kind or nature.
(b) Prior to title passing and completion of Closing, with
respect to any representations or warranties of Seller contained in this
Agreement, Buyer's obligations hereunder are contingent upon such
representations and/or warranties contained in this Agreement being true and
correct as of the date hereof and where the context indicates, as of the date of
Closing, but recision of this Agreement and return of the Deposit, together with
interest earned thereon, shall be Buyer's exclusive remedy for any breach of any
representation and/or warranty by Seller.
(c) Notwithstanding the foregoing, in the event of a willful
and intentional material breach of a covenant or warranty by Seller under this
Agreement or if Seller makes a willful and intentional material
misrepresentation in this Agreement, Buyer shall be entitled to terminate this
Agreement and to the return of the Deposit, together with interest earned
thereon, and to recourse against Seller for actual damages sustained by Buyer in
connection with this Agreement; the foregoing shall be Buyer's sole remedies
under this subparagraph.
(d) Subsequent to title passing and the completion of Closing,
Buyer shall have recourse against Seller for actual damages sustained solely for
Seller's breach of representations and warranties which survive Closing, which
breach is discovered by Buyer after Closing; the right to pursue said recourse
shall expire and terminate, as to any right on which action has not then been
initiated, at the expiration of the survival periods set forth herein.
25. ENTIRE AGREEMENT: This Agreement together with the Exhibits annexed
hereto constitutes and expresses the whole agreement of the parties hereto with
reference to the subject matter hereof and to any of the matters or things
herein provided for or hereinbefore discussed or mentioned in reference to the
subject matter hereof; all prior promises, undertakings, representations,
agreements, understandings and arrangements relative thereto being herein and
therein merged.
26. MODIFICATION: This Agreement may not be modified, altered, amended
or changed except by an instrument in writing duly and validly executed by the
parties hereto.
27. CONSTRUCTION/JURISDICTION: (a) This Agreement shall be governed by
and construed according to the substantive laws of the State of Maryland.
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(b) Any judicial proceeding brought by or against any of the
parties to this Agreement on any dispute arising out of this Agreement or any
matter related thereto shall be brought in the Superior Court of the State of
New Jersey, or in the United States District Court for the District of New
Jersey, in Camden County, New Jersey, shall be governed by the procedural rules
of such court and, by execution and delivery of this Agreement, each of the
parties to this Agreement accepts and agrees to submit to the exclusive
jurisdiction of such courts, and irrevocably agrees to be bound by any judgment
rendered thereby in connection with this Agreement.
28. WAIVER: Failure to insist upon strict compliance with any of the
terms, covenants, or conditions hereof shall not be deemed a waiver of such
term, covenant or condition, nor shall any waiver or relinquishment of any right
or power hereunder at any one time or more times be deemed a waiver or
relinquishment of such right or power at any other time or times.
29. NOTICES: (a) All notices to be given by either party to the other
shall be in writing, shall be served in person, by Federal Express or other
overnight delivery, or by depositing such notice in the United States mails,
certified, with certification and postage charges prepaid, properly addressed
and directed to the party to receive the same as follows:
As to the Seller:
Willowbrook Joint Venture,
A New Jersey Joint Venture
ATTN: Steven Zalkind
23 West Park Avenue
Merchantville, New Jersey 08109
Telephone No.: (609) 662-4757
FAX No.: (609) 662-2154
cc: Sherman, Silverstein, Kohl, Rose & Podolsky, P.A.
ATTN: M. Zev Rose, Esquire
4300 Haddonfield Road, Suite 311
Pennsauken, NJ 08109
Telephone No.: (609) 662-0700
FAX No.: (609) 662-0165
A-25
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As to the Buyer:
Berwind Property Group, Inc.,
A Pennsylvania Corporation
ATTN: Joseph F. Mullen
3000 Centre Square West
1500 Market Street
Philadelphia, PA 19102
Telephone No.: (215) 575-2429
FAX No.: (215) 496-0431
cc: Loretta Kelley, Esquire
Berwind Property Group, Inc.,
3000 Centre Square West
1500 Market Street
Philadelphia, PA 19102
Telephone No.: (215) 575-2422
FAX No.: (215) 496-0431
Mr. Mitchell L. Morgan
First Montgomery Properties
160 Clubhouse Road
King of Prussia, Pennsylvania 19406
Telephone No.: 610-265-2800
FAX No.: 610-265-5889
Howard I. Grossman, Esquire
Mesirov, Gelman, Jaffe, Cramer & Jamieson
3800 Mellon Bank Center
1735 Market Street
Philadelphia, PA 19103
Telephone No.: (215) 994-1195
FAX No.: (215) 994-1111
(b) Either party may designate a different person or entity or
place to or at which notices shall be given by delivering a written notice to
that effect to the other party, which notice shall be effective after the same
is actually received by the other party. In lieu of mailing, the parties may
deliver any such notice, documents or papers to the aforesaid addresses.
30. CAPTIONS: The captions contained herein are not a part of this
Agreement. They are only for the convenience of the parties and do not in any
way modify, amplify, or give full notice of any of the terms, covenants or
conditions of this Agreement.
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<PAGE>
31. NUMBER AND GENDER: For purposes of this Agreement, the masculine
shall be deemed to include the feminine and the neuter, and the singular shall
be deemed to include the plural, and the plural the singular, as the context may
require.
32. BINDING EFFECT: This Agreement of Sale shall inure to the benefit
of and be binding upon the parties hereto and their respective legal or personal
representatives, heirs, executors, administrators, successors and assigns.
33. COOPERATION: Each party shall execute, acknowledge, seal and
deliver, after the date hereof, such further assurances, instruments and
documents as the other may reasonably request in order to fulfill the intent of
this Agreement and the transactions contemplated hereby.
34. THIRD PARTY ACTION: In the event that any action commenced in a
court of appropriate jurisdiction against Seller by any person other than Buyer
or an affiliate of Buyer (a "Third Party Action") enjoins or restrains Seller
from Closing under this Agreement, then, and in that event, this Agreement shall
be cancelled and terminated and the Deposit, together with interest earned
thereon, shall be returned to Buyer and neither party shall have any further
liability or obligation to the other hereunder except with respect to the
indemnifications contained in Paragraphs 5(e), 7 and 22.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Agreement to be signed the day and year first above
written.
SIGNED, SEALED AND DELIVERED WILLOWBROOK JOINT VENTURE,
IN THE PRESENCE OF: A New Jersey Joint Venture
BY: Clover Income Properties, L.P.,
A New Jersey Limited Partnership
Joint Venturer
By: C.I.P. Management Corporation,
A New Jersey Corporation,
General Partner
BY: /s/ Steven Zalkind
-------------------------------------
STEVEN ZALKIND, Vice President
A-27
<PAGE>
BY: Clover Income Properties II, L.P.,
A New Jersey Limited Partnership
Joint Venturer
By: C.I.P. II Management Corporation,
A New Jersey Corporation,
General Partner
BY: /s/ Steven Zalkind
-------------------------------------
STEVEN ZALKIND, Vice President
BY: Clover Income Properties III, L.P.,
A New Jersey Limited Partnership
Joint Venturer
By: Crown Management Corporation,
A New Jersey Corporation,
General Partner
BY: /s/ Steven Zalkind
-------------------------------------
STEVEN ZALKIND, Vice President
BERWIND PROPERTY GROUP, INC.,
A Pennsylvania Corporation
_______________________ BY: /s/ Loretta Kelly
--------------------------
LORETTA KELLY, Vice President
FIRST MONTGOMERY PROPERTIES, LTD.,
A Pennsylvania Corporation
______________________ BY: /s/ Mitchell Morgan
--------------------------
MITCHELL MORGAN, President
The undersigned Escrow Agent hereby joins in this Agreement solely with
respect to the obligations contained in Paragraph 23 of this Agreement.
ESCROW AGENT:
SHERMAN, SILVERSTEIN, KOHL, ROSE &
PODOLSKY, P.A.
BY: /s/ M. Zev Rose
-------------------------------------------
M. ZEV ROSE, President
A-28
<PAGE>
EXHIBIT B
FIRST AMENDMENT TO AGREEMENT OF SALE
THIS FIRST AMENDMENT TO AGREEMENT OF SALE made this 7th day of
February, 1996 by and between WILLOWBROOK JOINT VENTURE, a New Jersey Joint
Venture, of 23 West Park Avenue, Merchantville, New Jersey 08109, hereinafter
referred to as Seller, and BERWIND PROPERTY GROUP, INC., a Pennsylvania
Corporation, and FIRST MONTGOMERY PROPERTIES, LTD., a Pennsylvania Corporation,
c/o Berwind Property Group, Inc., 3000 Centre Square West, 1500 Market Street,
Philadelphia, Pennsylvania 19102, hereinafter collectively referred to as Buyer.
BACKGROUND
A. Buyer and Seller executed a certain Agreement of Sale dated February
7th, 1996 (the "Agreement of Sale"), pursuant to the provisions of which Buyer
agreed to purchase from Seller and Seller agreed to sell to Buyer that certain
tract or parcel of land and premises situate, lying and being in Baltimore,
Maryland, commonly known and referred to as Willowbrook Apartments.
B. Buyer and Seller now desire to amend the Agreement of Sale
pursuant to the provisions of this First Amendment.
NOW, THEREFORE, in consideration of the mutual covenants, promises and
agreements contained herein, the parties hereto, intending to be legally bound
hereby, do covenant and agree with each other as follows:
1. Except as specifically defined herein, initially capitalized terms
herein shall have the meaning ascribed thereto in the Agreement of Sale.
2. Paragraph 7(a) of the Agreement of Sale is hereby amended
in its entirety as follows:
"7. FEASIBILITY PERIOD: (a) For a Feasibility Period
of ninety (90) days from the date hereof (the "Feasibility
Period"), Buyer is granted the right to conduct physical
inspections, tests and investigations of the Premises in such
a manner as not to inconvenience the tenants and to review
copies of the Leases, Service Contracts, bills for calendar
years 1994 and 1995 for real estate taxes, utilities (water,
sewer, gas and electric) insurance premiums and trash removal
pertaining
B-1
<PAGE>
to the Premises. At any time during said Feasibility Period,
Buyer shall have the right, for any reason whatsoever, to
cancel and terminate this Agreement by serving written notice
thereof upon Seller on or before the expiration of said
Feasibility Period; if Buyer elects to terminate this
Agreement as permitted herein, then this Agreement shall be
cancelled and terminated and the Deposit, together with
interest earned thereon, shall be returned to Buyer and
neither party hereunder shall have any further liability or
obligation to the other hereunder except with respect to the
indemnifications contained in this Paragraph 7, Paragraph 5(e)
and Paragraph 22; if Buyer fails to exercise its right to
terminate this Agreement as permitted herein, then said right
shall automatically lapse, terminate and become null and void.
Buyer shall indemnify and save harmless the Seller from any
liability, loss, cost or expense (including reasonable
attorney's fees) arising from or in connection with such
inspection and/or entry upon the Premises; said
indemnification shall survive Closing and/or termination of
this Agreement."
3. All references in the Agreement of Sale to the "Extended
Feasibility Period" are hereby deleted.
4. Except as specifically set forth herein, the Agreement of
Sale remains effective in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Agreement to be signed the day and year first above
written.
SIGNED, SEALED AND DELIVERED WILLOWBROOK JOINT VENTURE,
IN THE PRESENCE OF: A New Jersey Joint Venture
BY: Clover Income Properties, L.P.,
A New Jersey Limited Partnership
Joint Venturer
By: C.I.P. Management Corporation,
A New Jersey Corporation,
General Partner
BY: /s/ Steven Zalkind
----------------------------------------
STEVEN ZALKIND, Vice President
B-2
<PAGE>
BY: Clover Income Properties II, L.P.,
A New Jersey Limited Partnership
Joint Venturer
By: C.I.P. II Management Corporation,
A New Jersey Corporation,
General Partner
BY: /s/ Steven Zalkind
----------------------------------------
STEVEN ZALKIND, Vice President
BY: Clover Income Properties III, L.P.,
A New Jersey Limited Partnership
Joint Venturer
By: Crown Management Corporation,
A New Jersey Corporation,
General Partner
BY: /s/ Steven Zalkind
----------------------------------------
STEVEN ZALKIND, Vice President
BERWIND PROPERTY GROUP, INC.,
A Pennsylvania Corporation
_______________________ BY: /s/ Loretta Kelly
--------------------------
LORETTA KELLY, Vice President
FIRST MONTGOMERY PROPERTIES, LTD.,
A Pennsylvania Corporation
______________________ BY: /s/ Mitchell Morgan
--------------------------
MITCHELL MORGAN, President
B-3
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