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): July 2, 1997
GROVE PROPERTY TRUST
(Exact name of registrant as specified in its charter)
Maryland 1-13080 06-1391084
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification Number)
598 Asylum Avenue, Hartford, Connecticut 06105
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (860) 246-1126
N/A
(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
On July 2, 1997, Grove Property Trust (formerly Grove Real
Estate Asset Trust), a Maryland real estate investment trust (the "Company"),
completed the purchase of 126 condominium units (the "Apartment Units")
constituting a part of Greenfield Village Condominium in Rocky Hill, Connecticut
("Greenfield Village").
The purchase was made pursuant to a Purchase and Sale
Agreement dated May 14, 1997 (the "Purchase Agreement") between Highland Income
Partners, L.P. (the "Seller") and Grove Corporation, an affiliate of the Company
("Grove Corporation"). The rights and obligations of Grove Corporation under the
Purchase Agreement were assigned prior to the purchase to Grove Rocky Hill
Limited Partnership ("Grove Rocky Hill"), a newly-formed limited partnership
which is owned 0.01% by GRHLP, Inc., a wholly owned subsidiary of the Company
and the sole general partner of Grove Rocky Hill, and 99.99% by Grove Operating,
L.P., a Delaware limited partnership of which the Company is the sole general
partner (the "Operating Partnership"), and the sole limited partner of Grove
Rocky Hill. There is no material relationship between the Seller and the
Company, any of the affiliates of the Company or any of the Company's directors
or officers or their affiliates.
The $4,282,500 purchase price for the Apartment Units was paid
by the Company in cash utilizing a portion of the Company's cash and borrowings
under the Company's Revolving Credit Agreement with Rhode Island Hospital Trust
National Bank (a Bank of Boston company). In addition, Grove Rocky Hill assumed
certain obligations of the Seller principally related to security deposits held
by the Seller. The purchase price was determined by arms' length negotiations
between the Seller and the Company taking into account, among other things, a
capitalization rate analysis performed by the Company.
The Apartment Units were held as rental properties by the
Seller, and the Company intends to continue holding the Apartment Units as
rental properties. The Company's ownership of the 126 Apartment Units out of the
total of 231 units at Greenfield Village gives the Company effective control
over Greenfield Village. The Company plans to initiate a number of capital
improvements at Greenfield Village, the cost of which will be borne entirely by
the Company. It is currently anticipated that such capital improvements, which
should be implemented over a two-year period, will have an aggregate cost of
approximately $484,000.
In connection with the purchase of the Apartment Units, the
Company paid $107,000 for expense and overhead reimbursement to National Realty
Services, L.P., a limited partnership owned by four of the executive officers of
the Company.
<PAGE>
Item 7. Financial Statements and Exhibits.
(a) Financial statements of the Seller for the periods
specified in Regulation S-X will be included in an amendment to this report as
soon as practicable, but not later than 60 days after the date on which this
report is required to be filed.
(b) Pro forma financial statements for the periods specified
in Regulation S-K will be included in an amendment to this report as soon as
practicable, but not later than 60 days after the date on which this report is
required to be filed.
(c) Exhibits.
Exhibit No. Description
2.1 Purchase and Sale Agreement dated May 14, 1997 between
Highland Income Partners, L.P., as Seller, and Grove
Corporation, as Purchaser
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GROVE PROPERTY TRUST
Date: July 17, 1997 By: /s/Joseph R. LaBrosse
-----------------------
Joseph R. LaBrosse
Chief Financial Officer
<PAGE>
Exhibit Index
Exhibit No. Description
2.1 Purchase and Sale Agreement dated May 14, 1997 between
Highland Income Partners, L.P., as Seller, and Grove
Corporation, as Purchaser
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
HIGHLAND INCOME PARTNERS, L.P.
AS SELLER
AND
GROVE CORPORATION
AS PURCHASER
GREENFIELD VILLAGE CONDOMINIUM
41 MARSHALL STREET
ROCKY HILL, CONNECTICUT
<PAGE>
TABLE OF CONTENTS
1. Agreement to Purchase and Sell......................................1
2. Purchase Price; Deposits............................................2
3. Closing Date........................................................3
4. Property Inspection Contingency.....................................3
5. Title Commitments and Surveys.......................................4
6. Condemnation........................................................5
7. Casualty............................................................5
8. Seller's Covenants, Representations and Warranties..................5
9. Purchaser's Representations and Warranties.........................8
10. Brokerage Commissions...............................................8
11. Seller' Closing Deliveries..........................................8
12. Default............................................................10
13. Pro-rations, Closing Costs and Adjustments.........................11
14. Notices............................................................12
15. Miscellaneous..................................................... 12
16. Duties and Responsibilities of Escrow Agent........................15
Schedule A Description of Property
Schedule A-1 List of Units
Schedule B Description of Personal Property
Schedule C Rent Roll
Schedule D Service Contracts
<PAGE>
2
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made as of May
1, 1997, by and between HIGHLAND INCOME PARTNERS, L.P., a Delaware limited
partnership, with a mailing address at 30 Jelliff Lane, Southport, Connecticut
06490 Attention: Mr. David Mack ("Seller") and GROVE CORPORATION, a Connecticut
corporation, with a mailing address at 598 Asylum Avenue, CT 06105 Attention:
Mr. Brain Navarro ("Purchaser").
R E C I T A L S:
A. Seller is the fee simple owner of that certain real and personal
property located at 41 Marshall Street, Rocky Hill, Connecticut and commonly
known as the Greenfield Village Condominium.
B Subject to the terms, provisions and conditions of this Agreement,
Purchaser is willing to acquire and Seller is willing to sell the Property (as
hereinafter defined).
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller and Purchaser hereby agree
as follows:
1. Agreement to Purchase and Sell.
(a) Seller hereby agrees to sell to Purchaser, and Purchaser
hereby agrees to acquire from Seller, subject to the terms, provisions and
conditions of this Agreement, the Units (as such term is defined on Exhibit A
attached hereto) and the related Allocated Interests (as defined in Exhibit A)
and applicable Declarant Rights (as defined in Exhibit A) and any and all other
rights of Seller in respect of such Units, as more particularly described in and
subject to Exhibit A attached hereto, together with (i) all easements, rights of
way, reservations, privileges, appurtenances, and other estates and rights of
Seller pertaining to such Units, (ii) all right, title and interest of Seller in
and to the appliances, fixtures, machinery, equipment, supplies and other
articles of personal property attached or appurtenant to such Units, or used in
connection therewith (the "Personal Property"), (iii) all right, title and
interest of Seller, if any, in and to the trade name of the buildings and (iv)
all right, title and interest of Seller, if any, in and to all strips and gores,
all alleys adjoining the land, and the land lying in the bed of any street, road
or avenue, opened or proposed, in front of or adjoining the land to the center
line thereof, and all right, title and interest of Seller, if any, in and to any
award made or to be made in lieu thereof and in and to any unpaid award for any
taking by condemnation or any damages to the land or the buildings by reason of
a change of grade of any street, road or avenue, (v) all right, title and
interest of Seller under all leases, licenses or other occupancy agreements and
tenancies affecting said Units, (vi) all right, title and interest of Seller in
and to all warranties and guaranties affecting the buildings and the Personal
Property (the Units, the Allocated Interests, the Declarant Rights, together
with all of the items listed in the foregoing clauses being hereinafter
collectively referred to as the "Property").
2. Purchase Price; Deposits.
(a) Purchaser agrees to pay a purchase price of Four Million
Two Hundred Eighty-Three Thousand Seventy-One Dollars and No/100 ($4,283,071.00)
(the "Purchase Price") for the Property. The Purchase Price, plus or minus
pro-rations, credits and adjustments, if any, as hereinafter provided, shall be
payable as follows:
(i) Fifty Thousand Dollars ($50,000) (the "Initial Deposit")
shall be deposited by Purchaser in escrow with a title company mutually
acceptable to Purchaser and Seller (the "Escrow Agent") upon the full
execution and delivery of this Agreement.
(ii) Within five (5) business days after the Inspection Period
Expiration Date (defined below), and provided that Purchaser has not
exercised its right to terminate this Agreement on or before such date
as provided in Section 4 below, Purchaser shall deliver in escrow with
Escrow Agent the additional sum of Fifty Thousand Dollars ($50,000)
(the "Additional Deposit"; the Initial Deposit and the Additional
Deposit are sometimes individually and collectively referred to as the
"Deposit").
The Deposit shall be held by the Escrow Agent in an interest bearing
escrow account. Interest earned on the Deposit shall be deemed part of the
Deposit. All references to the Deposit contained in this Agreement shall mean
and refer to the Deposit, together with any interest accrued thereon. Except as
otherwise provided herein, the Deposit shall be credited to Seller at Closing.
(b) The balance of the Purchase Price, Four Million One
Hundred Sixty-Six Thousand One Hundred Forty-One Dollars and No/100
($4,183,071.00) plus or minus pro-rations, credits and adjustments as aforesaid,
shall be payable at the Closing (as hereinafter defined) to a bank account
designated by Seller through a wire transfer of immediately available funds.
3. Closing Date.
The transaction contemplated by this Agreement shall be closed
(the "Closing") at a location in the State in which the Property is located (as
designated by Purchaser's mortgagee, if any, or as otherwise mutually agreed by
Purchaser and Seller) on the date which is five (5) days after Purchaser's
written notice to Seller, but in the absence of such notice, on the thirtieth
(30th) day after the Inspection Period Expiration Date (such date, the "Closing
Date"). If the Closing Date established pursuant to the preceding sentence is a
Saturday, Sunday or legal holiday, the Closing Date shall be the next business
day thereafter.
4. Property Inspection Contingency.
(a) For a period of thirty (30) days after the full execution and delivery
of this Agreement (such period, the "Inspection Period"; the last day of such
period, the "Inspection Period Expiration Date"), Purchaser and its employees,
consultants, agents and independent contractors shall have the right and
permission to enter upon the Property at reasonable times for the purpose of
conducting studies, inspections and tests, including, without limitation,
physical, geotechnical and environmental tests and inspections and such other
tests and inspections as Purchaser deems appropriate. Without limiting the
generality of the foregoing, Purchaser shall have the right to review any and
all files and other records and data relating to the management, maintenance and
operation of the Property, including, without limitation, all warranties,
guaranties and agreements relating or pertaining to the Property, as-built plans
and specifications for the buildings thereon and all site plans and studies in
respect of the Property, and any and all financial information with respect to
the management, maintenance and operation of the Property (collectively, the
"Financial Information"), including, without limitation, all records and books
of account, or copies thereof, relating to the Property. The foregoing studies,
inspections and tests shall be conducted at the sole cost and expense of
Purchaser.
(b) In conducting the studies, inspections and tests contemplated hereby,
Purchaser (i) will not unreasonably interfere with the existing uses of the
Property by persons in possession thereof, (ii) shall afford reasonable prior
notice to Seller with respect to the timing and scope of any physically
intrusive tests or inspections and (iii) will restore promptly any physical
damage caused by such studies, inspections or tests. Purchaser hereby agrees to
indemnify, defend, and hold Seller free and harmless from any loss, injury,
damage, claim, lien, cost or expense, including reasonable attorney's fees and
costs, resulting from or arising out of any such study, inspection or test;
provided, however, that such indemnity shall not extend to claims arising with
respect to any conditions existing on the Property not caused by Purchaser or
its employees, agents, consultants or independent contractors.
(c) If, as a result of its various investigations, Purchaser determines in
its sole and absolute discretion that the Property is not a suitable investment
for its purposes, Purchaser shall have the right to terminate this Agreement by
giving written notice of its election to terminate (the "Termination Notice") at
any time prior to the Inspection Period Expiration Date. If Purchaser fails to
deliver a Termination Notice on or before the expiration of such period,
Purchaser shall conclusively be deemed to have waived its right to terminate
this Agreement based on this Section 4. If Purchaser delivers the Termination
Notice to Seller prior to the Inspection Period Expiration Date, Escrow Agent
shall thereupon promptly return the Deposit to Purchaser.
(d) Purchaser acknowledges that upon the expiration of the
Inspection Period and provided Purchaser has not delivered a Termination Notice,
Purchaser will have been granted access to and will have inspected the Property
and, in such case, Purchaser agrees and represents that Purchaser is purchasing
and will accept the Property "as-is" as existed at the time of expiration of the
Inspection Period, subject to reasonable wear and tear, without any covenants,
representations or warranties, express or implied, including without limitation,
those of merchantability, habitability or fitness for any particular purpose
(other than those representations and warranties contained in Section 8 hereof).
Notwithstanding the foregoing, if, as of the Closing Date, an adverse change in
the condition of the Property has occurred thereby reducing the Property's
market value by an amount exceeding Fifty Thousand Dollars ($50,000) as a result
of acts or omissions after the expiration of the Inspection Period, then, in
such event, Purchaser shall have the right to terminate this Agreement and
Escrow Agent shall thereupon promptly return the Deposit to Purchaser.
5. Title Commitments and Surveys.
(a) Purchaser shall, at Purchaser's expense, obtain (i) a title commitment
(the "Commitment") for an Owner's Title Insurance Policy issued by a title
insurance company satisfactory to Purchaser in the amount of the Purchase Price,
covering title to the Property and (ii) a survey of the Property (the "Survey").
Purchaser shall have until the expiration of the Inspection Period to provide
written notice to Seller of any matters shown by the Commitment and Survey
affecting the Property which are not satisfactory to Purchaser, which notice (a
"Title and Survey Notice") must specify the reason such matter(s) are not
satisfactory and the curative steps necessary to remove the basis for
Purchaser's disapproval. The parties shall then have thirty (30) days after the
date of such Title and Survey Notice to make such arrangements or take such
steps as they shall mutually agree to satisfy Purchaser's objection(s). If the
parties fail to agree on the necessary steps, Purchaser shall have a right to
terminate this Agreement during the ten (10) day period following the expiration
of the aforesaid thirty (30) day period. If Purchaser exercises such right,
Escrow Agent shall thereupon promptly return the Deposit to Purchaser.
(b) Except as otherwise provided herein, Seller shall have no
obligation whatsoever to expend any funds or cure any title or survey
objections, and Seller shall not be deemed to have any obligation to cure unless
Seller expressly undertakes such an obligation by a written notice to or written
agreement with Purchaser. Notwithstanding anything to the contrary herein, if
the Commitment shall disclose interests, encumbrances or liens of definite or
ascertainable amounts which may be removed by the payment of money, Seller shall
clear such item(s) (i) prior to the Closing Date, by using its own funds, or
(ii) on the Closing Date, by using the Purchase Price payable to Seller by
Purchaser.
(c) From and after the execution of this Agreement until the Closing Date
or termination of this Agreement, Seller covenants and agrees that no
encumbrance, lien or other interest shall be created with respect to the
Property without first obtaining the prior written consent of Purchaser thereto,
such consent to be granted or denied by Purchaser in its sole and absolute
discretion, provided, however, that no such consent shall be required in respect
of new leases at the Property entered into by or on behalf of Seller in
accordance with the terms, provisions and conditions set forth in Section 9(g)
below. On the Closing Date, Purchaser shall conduct a search of title for the
Property from the date of the Commitment through the Closing Date. Any new
matters appearing of record during such rundown period not previously approved
by Purchaser in writing shall constitute title defects hereunder. If any such
title defects exist on the Closing Date, Purchaser may exercise its remedies for
breach by Seller as provided in Section 12 below.
(d) All notes or notices of violations of law or municipal ordinances,
orders or requirements noted in or issued by any health or other federal, state
or municipal departments having jurisdiction against or affecting the Property
(collectively, the "Violations"), shall be complied with by Seller prior to the
Closing Date and the Property shall be conveyed free thereof.
6. Condemnation. If, prior to the Closing Date, all or any portion of
the Property is taken by eminent domain, Purchaser shall have the option to
terminate this Agreement, in which event the Deposit shall be promptly returned
to Purchaser. In the event that Purchaser has not elected to terminate this
Agreement within thirty (30) days after receiving notice from the taking
authority of such taking, then Purchaser shall be deemed to have elected to
proceed with the Closing without any reduction or adjustment to the Purchase
Price. In such case, Seller shall assign to Purchaser, at the Closing, all
rights that Seller has to any of the proceeds from such eminent domain
proceedings. Seller and Purchaser agree to deliver any notice of condemnation
proceedings or any actual knowledge thereof to the other promptly upon receipt
thereof.
7. Fire or Other Casualty. If, prior to the Closing Date, all
or any portion of the Property shall be destroyed or damaged by fire or other
casualty, Seller shall give to Purchaser written notice thereof. Purchaser shall
have the option to terminate this Agreement within thirty (30) days after
receiving notice from Seller of such fire or other casualty, in which event the
Escrow Agent shall promptly return the Deposit to Purchaser. In the event that
Purchaser has not elected to terminate this Agreement as aforesaid, then, at
Purchaser's option, (i) the Closing hereunder shall be adjourned hereunder for a
period not to exceed sixty (60) days, during which period Seller shall restore
the Property to the condition thereof on the date hereof (in which case, upon
completion of such restoration and the approval thereof by Purchaser the Closing
shall be scheduled on the date which is five (5) business days after such
approval) or (ii) Purchaser shall receive a credit against the Purchase Price at
Closing equal to the estimated cost of such restoration. Seller shall maintain
throughout the term of this Agreement casualty insurance with respect to the
buildings and the contents thereof in an amount not less than one hundred
percent (100%) of the full replacement cost of such buildings and contents, and
provided that Seller so maintains such insurance, then Seller may terminate this
Agreement by delivering notice to Purchaser within thirty (30) days of such fire
or other casualty if Seller shall be required to expend more than Five Hundred
Thousand Dollars ($500,000) in excess of available insurance proceeds in order
to meet its obligation to restore the Property as set forth above.
8. Seller's Covenants, Representations and Warranties.
Seller covenants, represents and warrants to Purchaser as follows:
(a) Seller (i) is a limited partnership, duly organized, validly
existing and in good standing under the laws of the State of Delaware; (ii) has
the authority and power to enter this Agreement and to consummate the
transactions contemplated hereby; and (iii) has duly authorized the execution
and delivery of this Agreement and is duly bound to consummate the transactions
contemplated hereby.
(b) Neither this Agreement nor the consummation of the transaction
contemplated hereby will constitute or result in a violation or breach by Seller
of any agreement or contract to which Seller is bound or the Property is
subject, or any judgment, order, writ, injunction or decree issued against or
imposed upon it, or will result in a violation of any applicable law, order,
rule or regulation of any government authority.
(c) Seller has not received any notification of any pending or
threatened condemnation, requisition or similar proceeding affecting the
Property or any portion thereof.
(d) Except as otherwise disclosed in writing to Purchaser, Seller has
not received and, to the best of Seller's knowledge, there are no notices,
orders, decrees or judgments issued, pending issuance or threatened relating to
any alleged or actual violation of fire, health, safety, traffic, sanitation,
water pollution, environmental or other laws affecting, against or with respect
to the Property nor is Seller aware of any defects, structural or otherwise, in
respect of the buildings and improvements situated on the Property . Seller has
not received any written notification of any action, suit, proceeding or
investigation pending or threatened which might become a cloud on the title to
the Property or any portion thereof. From and after the date hereof, Seller
shall send to Purchaser (within three (3) days of delivery to or receipt by
Seller) copies of all correspondence, notices or other communications delivered
to or received by Seller from federal, state or local governmental authorities
or agencies in connection with the Property.
(e) To the best of Seller's knowledge, there are no defaults or
breaches by Seller or the Property of any of the covenants, conditions,
restrictions, rights-of-way, or easements or other instruments encumbering the
Property or any portion thereof.
(f) To the best of Seller's knowledge, no special taxes or assessments
have been levied, assessed or imposed on or against the Property or any part
thereof that have not been fully and finally paid, and neither Seller, nor any
of its agents or employees have received any notice, or have any knowledge, of
contemplated, threatened or pending special taxes or assessments affecting the
Property or any part thereof.
(g) To the best of Seller's knowledge, attached hereto as Exhibit C is
a true, correct and complete rent roll for the Property including each and every
lease, license or other occupancy agreement affecting any portion of the
Property as of the date hereof. Prior to Closing, Seller will not, without
Purchaser's prior written consent (i) collect any rent for more than the then
current month; (ii) give any rent concessions or agree to do any work for, or
give any consideration other than possession to, any tenant except in the
ordinary course of business; (iii) lease any units at the Property for a term in
excess of twelve (12) months; (iv) or lease any units to any person(s) other
than at market rates.
(h) There is no union contract affecting the Property or the employees
thereat and Seller will not enter into any such contract prior to Closing.
(i) To the best of Seller's knowledge, there are no permits, licenses,
other than ordinary business licenses, or consents required by any governmental
authority in connection with the use and occupancy of the Property that have not
already been obtained.
(j) Seller has good and indefeasible title to the Property in fee
simple, and the Personal Property, and has the right to convey and transfer
same, subject to the existing tenant leases and encumbrances of record.
(k) From the date of this Agreement until Closing, Seller (i) shall
maintain and repair the Property in its normal course of operations; (ii) shall
operate the Property in its normal course of operations, including continuing to
make units ready and continuing leasing; (iii) will pay all obligations arising
from the Property, as payment becomes due; (iv) shall make no material
alterations to the Property; and (v) shall maintain each of the apartment units
at the Property in its current conditions, reasonable wear and tear excepted.
(l) All of Seller's employees at the Property will be paid by Seller
prior to Closing to the end of their last pay period. Benefits or compensation
accrued prior to Closing due or claimed to be due either before or after Closing
to employees or former employees of Seller shall not constitute obligations of
Purchaser. All persons who are currently employed by Seller in connection with
the management, operation or maintenance of the Property shall be terminated by
Seller at or prior to Closing insofar as their employment relates to the
Property.
(m) No portion of the Property (including, without limitation, rental,
security, or damage deposits to be conveyed to the Purchaser hereunder) shall be
subject at the Closing to the burdens or obligations of any management agreement
respecting the Property, so that Purchaser shall receive the Property free and
clear of any such burdens or obligations and shall be free to enter into a
management agreement or arrangement with a manager of its own choice. Unless
approved by Purchaser in writing prior to Closing or listed on Exhibit D
attached hereto and approved by Purchaser, as of the Closing, there will not be
any service, supply or maintenance agreements with respect to the Property or
any portion thereof unless the same can be canceled upon thirty (30) days notice
without the necessity of payment of any termination penalty or premium.
(n) Except as disclosed by Seller, Seller, to the best of Seller's
knowledge, has not at any time, and no other party has at any time, handled,
buried, stored, retained, refined, transported, processed, manufactured,
generated, produced, spilled, pumped, poured, emitted, emptied, discharged,
injected, dumped, transferred or otherwise disposed of or dealt with Hazardous
Substances (as hereinafter defined) on, to or from the Property. Seller, to the
best of Seller's knowledge, knows of no seepage, leak, escape, leech, discharge,
injection, release, emission, pumping, pouring, emptying or dumping of Hazardous
Substances into waters on or adjacent to the Property, or onto lands from which
such hazardous or toxic waste or substances might seep, flow or drain into such
waters. The term "Hazardous Substances" shall mean and refer to any and all
pollutants, contaminants, toxic or hazardous wastes or any other substances that
might pose a hazard to health or safety, the removal of which may be required or
the manufacture, use, maintenance or handling of which is restricted, prohibited
or penalized by any Environmental Law (including, without limitation, asbestos,
urea formaldehyde foam insulation and polychlorinated biphenyls). The term
"Environmental Law" shall mean and refer to any law, ordinance, rule,
regulation, order, judgment, injunction or decree relating to pollution,
Hazardous Substances or environmental protection (including, without limitation,
the Resource Conservation and Recovery Act, the Comprehensive Environmental
Response, Compensation and Liability Act, Chapters 445 and 446k of the
Connecticut General Statutes, all amendments and supplements to any of the
foregoing and all regulations issued pursuant thereto).
(o) No condominium fees or special assessments have been levied,
assessed or imposed on or against the Property or any part thereof that have not
been fully and finally paid, and neither Seller, nor any of its agents or
employees have received any notice, or have any knowledge, of contemplated,
threatened or pending special assessments affecting the Property or any part
thereof.
(p) There is no uncompleted work or obligations to be performed or fees
or costs to be paid by the holder of the Declarant Rights. Seller is not a party
to, is not aware of and has not received any written notification of any action,
suit, proceeding or investigation pending or threatened which would affect the
Declarant Rights or the holder of the Declarant Rights.
The representations and warranties of Seller set forth above shall be
true, accurate and correct in all material respects upon the date of execution
of this Agreement and shall be deemed remade by Seller as of the Closing Date
with the same force and effect as if first made as of and on such date. Seller's
covenants, representations and warranties contained in this Section shall
survive the Closing for a period of four months. Purchaser agrees to provide
prompt written notification to Seller upon Purchaser's discovery of a default or
breach of such covenants, representations and warranties. Any action brought by
Purchaser to enforce Purchaser's rights with respect to such covenants,
representations and warranties must by commenced promptly after discovery
thereof by Purchaser and in any event no such action shall be commenced after
the expiration of the aforesaid one year period.
9. Purchaser Representations and Warranties.
Purchaser represents and warrants to Seller that Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, has duly authorized the execution and performance of
this Agreement, and such execution and performance will not violate any terms of
its organizational documents.
10. Brokerage Commissions. Each party represents and warrants to the
other that it has not dealt with any entity or person who would be entitled to a
brokerage commission, finder's fee or other similar compensation in connection
with the transactions described herein payable from or in respect of the
Purchase Price. Each party agrees to indemnify, defend, protect and hold forever
harmless the other from and against any and all loss, liability, cost, damage
and reasonable expense, including, without limitation, reasonable attorney's
fees, which the other may incur, suffer or sustain by reason of any other right,
claim, demand or damage made or asserted by any person or persons for the
payment of a brokerage commission, finder's fee or similar compensation on
account of a breach of this representation and warranty. The terms of this
section shall survive Closing .
11. Seller' Closing Deliveries. On the Closing Date, Seller shall
deliver to Purchaser the following documents and instruments with respect to the
Property (collectively, "Seller's Closing Deliveries"), duly executed by Seller,
acknowledged where appropriate and otherwise in form and content reasonably
satisfactory to Purchaser's counsel. Seller, not later than fifteen (15) days
prior to the Closing Date, shall deliver to Purchaser's counsel, for approval
thereby, draft photocopies of Seller's Closing Deliveries:
(a) a general warranty deed for the Property (the "Deed"),
which shall be in proper statutory form for recording, subject only to the
matters permitted hereby, so as to convey to Purchaser fee simple title to the
Property as provided herein;
(b) a bill of sale conveying the Personal Property.
(c) an Assignment and Assumption of Leases, assigning the
Leases in effect as of Closing and any new leases entered into in accordance
with the terms of this Agreement, together with (i) copies of such Leases, and
(ii) a Notice to Tenants in form and substance approved by Purchaser.
(d) a listing of the security deposit obligations (including a
breakdown of statutory interest accrued thereon) of Landlord pursuant to the
Leases, certified as true, correct and complete by an officer of Seller.
(e) a Certificate of Seller with respect to (i) prepaid rents
held by Seller with respect to the Property, and (ii) those tenants in arrears
with respect to the payment of rent and other amounts payable under the Leases
("Delinquent Rents"), certified as true, correct and complete by an officer of
Seller.
(f) copies of all contracts relating to the Property, if any,
which Purchaser has agreed to assume, together with an assignment of such
contracts to Purchaser.
(g) an assignment of all transferable warranties and
guarantees then in effect, if any, with respect to the improvements located on
the Property or any repairs or renovations to such improvements and Personal
Property being conveyed hereunder.
(h) All books and records at the Property held by or for the
account of Seller, including without limitation, plans and specifications and
lease applications, as available.
(i) an affidavit of title, certified by Seller, and such documents and
instruments in respect of Seller's authority to sell the Property (including,
without limitation, resolutions, incumbency certificate(s) and a certificate of
good standing from the state of Seller's incorporation and any entity signing
any of Seller's Closing Deliveries), in the form customarily required by title
insurance companies in the State of Connecticut.
(j) a nonforeign affidavit sufficient for the purposes of establishing and
documenting the nonforeign affidavit exemption described in Section 1445 of the
Internal Revenue Code (the "FIRPTA Affidavit).
(k) completed conveyance tax returns for the Property in the form required
by the applicable governmental authority.
(l) an indemnification agreement pursuant to which Seller shall represent
and warrant to Purchaser that (i) all costs and expenses relating to the
ownership and operation of its Property arising prior to the Closing Date have
been paid in full, and (ii) that all service contracts for the applicable
Property (other than those contracts listed on Exhibit D and approved by
Purchaser or contracts that can be canceled upon thirty (30) days notice without
the necessity of payment of any termination penalty or premium) have been
terminated on or before the Closing Date, and by which such Seller shall
indemnify and hold Purchaser harmless from and against all loss, cost and
expenses arising by reason of a breach of such representations and warranties.
(m) a rent roll for the Property, in the form of the rent roll
attached hereto, dated as of the first day of the calendar month in which the
Closing occurs, together with a certification of Seller with respect to any
changes to such rent roll from the date thereof.
(n) an Assignment of Declarant Rights, assigning Seller's
declarant rights under the Condominium declaration, bylaws and other documents.
(o) such additional instruments, agreements and other
documents as may be necessary or convenient in order to effectuate the
provisions of this Agreement.
12. Default.
(a) If Purchaser shall default under this Agreement, the Deposit shall be
retained by Seller as liquidated damages, and both parties shall be relieved of
and released from any further liability hereunder, except for the
indemnification obligations of Purchaser pursuant to Section 4(b) above. In such
case, Seller and Purchaser agree that the Deposit is a fair and reasonable
amount to be retained by Seller as agreed and liquidated damages in light of
Seller's removal of the Property from the market and the costs incurred by
Seller and shall not constitute a penalty or a forfeiture.
(b) Seller acknowledges that the Property is of a special,
unique and extraordinary character, and that any violation of this Agreement by
Seller would be highly injurious to Purchaser, and therefore, if Seller shall
default in the performance or observance of any of its covenants, agreements, or
obligations for any reason other than a default by Purchaser, or if Seller shall
violate any of its representations, warranties or covenants contained in this
Agreement, Purchaser shall, in addition to the rights hereinafter provided, be
entitled to the immediate return of the Deposit. Upon any such Seller default,
Purchaser, at Purchaser's election, may (i) exercise any and all rights and
remedies available to Purchaser at law or in equity, including, without
limitation, the right to enforce specific performance by Seller of the terms of
this Agreement, or (ii) if Purchaser determines in its sole discretion that such
rights and remedies are not adequate, Purchaser may elect to terminate this
Agreement and recover from Seller Purchaser's out-of-pocket expenses incurred in
connection with this Agreement, not to exceed Fifty Thousand Dollars ($50,000).
If this Agreement is terminated by Purchaser following Seller's default, Escrow
Agent shall promptly return the Deposit to Purchaser.
(c) For purposes hereof, a breach by either party hereunder
shall constitute a "default" only after written notice by the non-defaulting
party to the other specifically stating the alleged breach and the failure of
the defaulting party to thereafter cure such breach within five (5) days after
the receipt of such written notice.
13. Prorations, Closing Costs and Adjustments.
(a) The following items shall be apportioned between Seller and Purchaser
as of midnight of the day preceding the Closing Date:
(i) Real estate taxes, assessments and sewer use charges.
(ii) rent, parking charges, laundry machine and vending
machine revenues and other amounts paid by tenants if, as and when received.
(iii) fuel and other utilities (including, without limitation,
electricity, water and gas).
(iv) personal property taxes, if any.
(v) such other items as are customarily adjusted in connection
with commercial real estate transactions of this type.
(b) Purchaser shall receive a credit at Closing against the Purchase
Price for the aggregate security deposit liability under the Leases, including,
without limitation, any and all interest accrued thereon through the Closing
Date.
(c) Seller shall pay the conveyance taxes applicable to the transfer of
the Property. Purchaser shall pay all recording fees. The fees and expenses of
the Escrow Agent in connection with the administration of this Agreement, if
any, shall be borne equally by Seller and Purchaser.
(d) Except as provided in subparagraph (e) below with respect
to Delinquent Rents, all prorations, adjustments and credits made and determined
as provided herein shall be final as of the Closing Date; provided, however,
that if subsequent to the Closing Date an error or omission in the determination
or computation of any of such prorations, adjustments or credits shall be
discovered, immediately upon discovery thereof the appropriate adjustments
required to correct such error or omission shall be made. Except as expressly
provided herein, the purpose and intent as to the provisions of prorations and
apportionments set forth herein is that Seller shall bear all expenses of
ownership and operation of the Property accruing through midnight at the end of
the day preceding the Closing Date and Purchaser shall bear all such expenses
accruing thereafter. Any items not specifically listed herein but shall be
adjusted as aforesaid at Closing. This provision shall survive the Closing.
(e) With regard to Delinquent Rents as set forth in the schedule delivered
to Purchaser pursuant to Section 11(e) above:
(i) the first rents received by Purchaser after the Closing
Date from any tenant on such certificate shall be applied first to then current
rents due from such tenant and any amount remaining after such application (but
in no event in excess of six month's rent payable by such tenant, including the
month in which the Closing shall occur,) shall be paid by Purchaser to Seller on
account of such Delinquent Rents, provided, however, that Purchaser shall have
the right to deduct therefrom the costs of collection of such Delinquent Rents.
(ii) Purchaser shall not be obligated to incur any expense or
institute any action or proceeding to collect any such Delinquent Rents, nor
shall Purchaser be prohibited from terminating any lease as the result of such
delinquencies.
14. Notices.
Any notice regarding this Agreement or any transaction or other matter
arising in connection herewith shall be in writing and be served upon the party
to which it is directed at the following addresses:
If to Seller: Highland Income Partners, L.P.
30 Jelliff Lane
Southport, Connecticut 06490
Attention: Mr.David Mack
with a copy to George J.Lawler, Esq.
965 White Plains Road
Trumbull, CT 06107
If to Purchaser: Grove Investment Group, Inc.
598 Asylum Avenue
Hartford, CT 06105
Attention: Mr. Brian Navarro
with a copy to Kroll, McNamara & Evans
29 South Main Street
West Hartford, CT 06107
Attention: Edward J. McNamara, Esq.
Any notice may be served personally or be sent by certified mail,
return receipt requested or by Airborne, UPS, Federal Express or similar
overnight express service. If sent by certified mail, a notice shall be deemed
to have been given the next day following the date deposited with the United
States Postal Service, postage prepaid. If sent by overnight express service, a
notice shall be deemed to have been given one (1) business day after pickup by
such overnight service. The address at which notice is to be given to either
party may be changed by giving notice to the other party as provided above.
15. Miscellaneous.
(a) Entire Agreement. The Recitals set forth at the beginning
of this Agreement and the Exhibits attached hereto are incorporated in and made
a part of this Agreement by this reference. This Agreement is the entire
agreement between the parties with respect to the subject matter hereof, and any
and all prior conversations or writings, including, without limitation, that
certain letter of intent dated April 11, 1997 between Seller and Purchaser, are
merged herein and extinguished. No alteration, modification or interpretation
hereof shall be binding unless in writing and signed by Seller and Purchaser.
(b) Severability If any provision of this Agreement or application to any
party or circumstances shall be determined by any court of competent
jurisdiction to be invalid and unenforceable to any extent, the remainder of
this Agreement or the application of such provision to such person or
circumstances, other than those as to which it is so determined invalid or
unenforceable, shall not be affected thereby, and each provision hereof shall be
valid and shall be enforced to the fullest extent permitted by law.
(c) Applicable Law. This Agreement shall be construed and
enforced in accordance with the laws of the State of Connecticut.
(d) Assignability. Purchaser shall have the right, on or before the Closing
Date, to transfer or assign its rights and obligations under this Agreement to
an investment trust or any other entity owned by or controlled by Purchaser, the
principals of Purchaser or by any entity affiliated with Purchaser or such
principals, without the consent of Seller. Purchaser shall provide to Seller a
copy of the executed instrument of assignment effectuating any such assignment,
together with the name and address of the assignee. Any permitted assignee shall
be deemed to have assumed, agreed to and be bound by all of Purchaser's
obligations and liabilities under this Agreement. Upon any such assignment, the
Purchaser named in and which signed this Agreement shall thereafter be released
and relieved from any obligation or liability under this Agreement.
(e) Successors Bound. This Agreement shall be binding upon and inure to the
benefit of Purchaser and Seller and their respective heirs, executors,
administrators, personal representatives, successors and assigns.
(f) Captions. The captions in this Agreement are
inserted only as a matter of convenience and for reference and in no way define,
limit or describe the scope of this Agreement or the scope or content of any of
its provisions.
(g) Attorneys' Fees. In the event of any litigation arising out of this
Agreement, the prevailing party shall be entitled to reasonable attorneys' fees
and costs.
(h) No Partnership or Joint Venture. Nothing contained in this
Agreement shall be construed to create a partnership or joint venture
relationship among Seller and Purchaser.
(i) Time of Essence. Time is of the essence for all purposes
of this Agreement.
(j)Recordation. Purchaser and Seller agree not to record this Agreement or
any memorandum hereof. So long as no default by Purchaser exists hereunder, upon
expiration of the Inspection Period Seller and Purchaser shall execute a
memorandum with respect to this Agreement for recordation in the land records of
Rocky Hill, Connecticut.
(k) Tax Protest. If, as of the Closing Date, there shall be any tax
certiorari proceedings or tax protest proceedings pending with respect to any
portion or all of the Property, all benefits obtained thereby including, without
limitation, any tax refunds, after deducting the cost of such proceedings,
including attorneys fees, shall: (i) if attributable to any tax year ended prior
to the Closing Date, be paid to Seller; (ii) if attributable to any tax year
commencing after the Closing Date, be retained by Purchaser; and (iii) if
attributable to the tax year in which the Closing Date occurs, be apportioned
between Seller and Purchaser as of the Closing Date. This provision shall
survive the Closing.
(l) Survival. The provisions of this Agreement expressly stating that they
survive the Closing shall survive the Closing and shall not merge with the deed
to be delivered at the Closing.
(m) Knowledge of Seller. Except as otherwise provided, whenever a
representation or warranty is made in this Agreement on the basis of the
knowledge of Seller, such representation and warranty is made to the best of
Seller's knowledge after inquiry and investigation by Seller of its officers,
employees, agents and representative having responsibility for the Property.
(n) Indemnification.
(i) Seller shall indemnify and hold harmless Purchaser from and against any
and all liability, loss or damage, and any actions, suits, proceedings, demands,
assessments, judgments, costs and expenses (including reasonable attorneys' fees
and expenses) incident thereto, resulting from (i) causes of action or claims of
any kind or character for actions, omissions or obligations of Seller relating
to the Property prior to the Closing Date, including, without limitation,
off-site disposal of Hazardous Materials (ii) a breach of any representation or
warranty of Seller set forth in Section 8 hereof, and (iii) the failure by
Seller to pay, perform or discharge when due any liabilities, agreements,
commitments or obligations not specifically assumed by Purchaser pursuant to
this Agreement. The provisions of this subsection shall survive the Closing.
(ii) Purchaser shall indemnify and hold harmless Seller from and against
any and all liability, loss or damage, and any actions, suits, proceedings,
demands, assessments, judgments, costs and expenses (including reasonable
attorneys' fees and expenses) incident thereto, resulting from: (i) causes of
action or claims of any kind or character for actions, omissions or obligations
assumed by Purchaser hereunder relating to Property on or after the Closing
Date; (ii) breach of any representation or warranty of Purchaser set forth in
Section 9 hereof; or (iii) Purchaser's use and operation of the Property after
the Closing Date. The provisions of this subsection shall survive the Closing.
(o) Construction. This Agreement shall be construed without
regard to any presumption or other rule requiring construction against the party
causing this Agreement or any part hereof to be drafted.
16. Duties and Responsibilities of Escrow Agent
(a) Seller and Purchaser acknowledge and agree that Escrow
Agent (i) shall not be responsible for any of the agreements referred to herein
but shall be obligated only for the performance of such duties as are
specifically set forth herein; (ii) shall not be obligated to take any legal or
other action hereunder which might in its judgment involve any expense or
liability unless it shall have been furnished with acceptable indemnification;
and (iii) may rely on and shall be protected in acting or refraining from acting
upon any written notice, instruction, instrument, statement, request or document
furnished to it hereunder and believed by it to be genuine and to have been
signed or presented by the proper person, and shall have no responsibility for
determining the accuracy thereof.
(b) Neither Escrow Agent nor any of its directors, officers,
partners or employees shall be liable to anyone for any action taken or omitted
to be taken by it except in the case of gross negligence or willful misconduct.
Seller and Purchaser jointly and severally, covenant and agree to indemnify
Escrow Agent and hold it harmless without limitation from and against any loss,
liability or expense of any nature incurred by Escrow Agent arising out of or in
connection with the administration of its duties hereunder, including but not
limited to legal fees and other costs and expenses of defending or preparing to
defend against any claim or liability, unless such loss, liability or expense
shall be caused by Escrow Agent's willful misconduct or gross negligence.
(c) Seller and Purchaser, jointly and severally, agree to
assume any and all obligations imposed now or hereafter by any applicable tax
law with respect to the payment of Deposit under this Agreement, and to
indemnify and hold Escrow Agent harmless from and against any taxes, interest,
penalties and other expenses, that may be assessed against Escrow Agent on any
such payment or other activities under this Agreement. Seller and Purchaser,
jointly and severally, agree to indemnify and hold Escrow Agent harmless from
any liability on account of taxes, assessments or other governmental charges,
including without limitation the withholding or deduction or the failure to
withhold or deduct same, and any liability for failure to obtain proper
certifications or to properly report to governmental authorities, to which
Escrow Agent may be or become subject in connection with or which arises out of
this Agreement, including costs and expenses (including reasonable legal fees),
interest and penalties.
(d) Seller agrees to pay or reimburse Escrow Agent for any fees and costs
incurred in connection with the services hereunder.
(e) Seller and Purchaser agree that if any dispute arises with
respect to the delivery, ownership, right of possession, or disposition of the
Deposit, Escrow Agent upon receipt of written notice of such dispute or claim,
is authorized and directed to retain in its possession without liability to
anyone, all or any of said Fund until such dispute shall have been settled
either by the mutual agreement of the parties involved or by a final order,
decree or judgment of a Court in the United States of America, the time for
perfection of an appeal of such order, decree or judgment having expired. Escrow
Agent may, but shall be under no duty whatsoever to, institute or defend any
legal proceedings which relate to the Deposit.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
SELLER:
HIGHLAND INCOME PARTNERS, L.P.
By: /s/Oliver P. MacKinnon, Jr.
-------------------------------
Print Name: Oliver P. MacKinnon, Jr.
Its: General Partner, duly authorized
PURCHASER:
GROVE CORPORATION
By:/s/Brian Navarro
-------------------------
Print Name: Brian Navarro
Its: President, duly authorized
<PAGE>
EXHIBIT A
DESCRIPTION OF PROPERTY
The condominium units listed on Exhibit A-1 attached hereto (individually, a
"Unit" and collectively, the "Units") created pursuant to and in accordance with
the Connecticut Common Interest Ownership Act, as the same may be amended from
time to time (the "Act"), constituting 126 Units comprised of 70 one-bedroom and
56 two-bedroom units, together with (1) the "Allocated Interests" (as defined in
the Act) allocated to each Unit, including, without limitation, the undivided
percentage interest allocated to each Unit in and to any and all "Common
Elements" and "Limited Common Elements" (as such terms are defined in the Act),
and (2) any and all "Special Declarant Rights," including, without limitation,
the right to exercise any and all "Development Rights" (as such terms are
defined in the Act), reserved in the Declaration (defined below), provided,
however, that the Purchaser may elect in its sole and absolute discretion to
exclude any and all such Special Declarant Rights from the transfer of Units and
Allocated Interests contemplated hereby. For purposes hereof, "Declaration"
shall mean that certain declaration entitled "Declaration of Greenfield Village"
dated December 31, 1987, recorded in the Rocky Hill Land Records in Volume 197,
Page 145, pursuant to which the Land was submitted to the provisions of the Act
and established as a condominium, together with any amendments thereto.
<PAGE>
EXHIBIT B
LIST OF UNITS
<PAGE>
EXHIBIT C
RENT ROLL
<PAGE>
EXHIBIT D
SERVICE CONTRACTS
