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): December 31, 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
Pursuant to a Purchase and Sale Agreement dated December 1, 1997 (the "Village
Arms Purchase Agreement") between Properties II, Inc. and Grove Corporation,
Grove Property Trust (the "Company") acquired Village Arms Apartments ("Village
Arms"), a residential apartment complex located in Acton, Massachusetts, from a
non-affiliated party. The acquisition of Village Arms which became effective
December 31, 1997 was effected through Grove Operating L.P. (the "Operating
Partnership"). The purchase price for Village Arms was $5.2 million which was
paid in cash. The purchase price for Village Arms was determined by arms' length
negotiation between the Company and Properties II, Inc.
Pursuant to a Purchase and Sale Agreement dated November 12, 1997 (the "Ribbon
Mill Purchase Agreement") between Sovereign Group 1984-II and Grove Corporation,
the Company acquired Ribbon Mill Apartments ("Ribbon Mill"), a residential
apartment complex located in Manchester, Connecticut from a non-affiliated
party. The acquisition of Ribbon Mill which became effective December 31, 1997
was effected through the Operating Partnership. The purchase price for Ribbon
Mill was $3,813,000. The purchase price for Ribbon Mill was determined by arms'
length negotiation between the Company and Sovereign Group 1984-II.
Pursuant to a Purchase and Sale Agreement dated November 12, 1997 (the "Briar
Knoll Purchase Agreement") between Briar Knoll Associates and High Ridge
Associates and Grove Corporation, the Company acquired Briar Knoll Apartments
("Briar Knoll") and Hilltop Apartments ("Hilltop"), residential apartment
complexes located in Vernon, Connecticut and Norwich, Connecticut, respectively,
from non-affiliated parties. The acquisitions of Briar Knoll and Hilltop were
effected through the Operating Partnership. The purchase price for Briar Knoll
and Hilltop aggregated $11,187,000. The purchase price for Briar Knoll and
Hilltop were determined by arms' length negotiation between the Company and
Briar Knoll Associates and High Ridge Associates.
The above transactions were financed with cash on hand and a $15.6 million draw
under the Company's Revolving Credit Facility.
Each of the transactions is described in more detail below:
Village Arms
Village Arms is a 124-unit apartment complex located in Acton, Massachusetts
which was originally constructed in 1971. The Company intends to continue to
operate the complex as rental apartments.
Village Arms was acquired from a non-affiliated party pursuant to the Village
Arms Purchase Agreement. The property was acquired by the Operating Partnership,
through GPT-Acton, LLC, a limited liability company in which the Operating
Partnership is the sole member. The purchase price of $5.2 million was paid with
cash on hand
Ribbon Mill
Ribbon Mill is a 104-unit apartment complex located in Manchester, Connecticut
which was originally constructed in 1907 and renovated in 1985. The Company
intends to continue to operate the complex as rental apartments.
Ribbon Mill was acquired from a non-affiliated party pursuant to the Ribbon Mill
Purchase Agreement. The property was acquired by the Operating Partnership,
through GPT-Ribbon Mill, LLC, a limited liability company in which the Operating
Partnership is the sole member. The purchase price of $3,813,000 was paid in
cash using funds available from the Company's line of credit.
Briar Knoll
Briar Knoll is a 150-unit apartment complex located in Vernon, Connecticut which
was originally constructed in 1986. The Company intends to continue to operate
the complex as rental apartments.
Briar Knoll was acquired from a non-affiliated party pursuant to the Briar Knoll
Purchase Agreement. The property was acquired by the Operating Partnership,
through GPT-Briar Knoll, LLC, a limited liability company in which the Operating
Partnership is the sole member. The purchase price of $6,172,500 was paid in
cash using funds available from the Company's line of credit.
Hilltop
Hilltop is a 120-unit apartment complex located in Norwich, Connecticut which
was originally constructed in 1985. The Company intends to continue to operate
the complex as rental apartments.
Hilltop was acquired from a non-affiliated party pursuant to the Briar Knoll
Purchase Agreement. The property was acquired by the Operating Partnership,
through GPT- Hilltop, LLC, a limited liability company in which the Operating
Partnership is the sole member. The purchase price of $5,014,500 was paid in
cash using funds available from the Company's line of credit.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of the sellers 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; provided, however, that in accordance with a
waiver granted by the Securities and Exchange Commission, financial statements
for Properties II, Inc. will be provided in such amendment for the period from
April 17, 1997 through December 30, 1997.
(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, provided, however, that pro forma adjustments relating to
Properties II, Inc. will not be included.
(c) Exhibits.
Exhibit No. Description
- ----------- -----------
2.1 Purchase and Sale Agreement dated December 1, 1997 between
Properties II, Inc. as Seller, and Grove Corporation, as Purchaser.
2.2 Purchase and Sale Agreement dated November 12, 1997 between
Sovereign Group 1984-II as Seller, and Grove Corporation, as
Purchaser.
2.3 Purchase and Sale Agreement dated November 12, 1997 between
Briar Knoll Associates and High Ridge Associates 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: January 15, 1998 By: /s/ Joseph R. LaBrosse
----------------------------
Joseph R. LaBrosse
Chief Financial Officer
<PAGE>
Exhibit Index
Exhibit No. Description
- ----------- -----------
2.1 Purchase and Sale Agreement dated December 1, 1997 between
Properties II, Inc. as Seller, and Grove Corporation, as Purchaser.
2.2 Purchase and Sale Agreement dated November 12, 1997 between
Sovereign Group 1984-II as Seller, and Grove Corporation, as
Purchaser.
2.3 Purchase and Sale Agreement dated November 12, 1997 between
Briar Knoll Associates and High Ridge Associates as Seller, and
Grove Corporation, as Purchaser.
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made by and
between Properties II, Inc., a Delaware corporation ("Seller"), and The Grove
Corporation, Delaware corporation ("Purchaser").
In consideration of the mutual covenants and representations herein
contained, and other good and valuable consideration the receipt and sufficiency
of which are hereby acknowledged, Seller and Purchaser agree as follows:
1.
PURCHASE AND SALE
1.1 Purchase and Sale. Subject to the terms and conditions of this
Agreement, Seller hereby agrees to sell and convey to Purchaser, and Purchaser
hereby agrees to purchase from Seller, all of the Seller's right, title and
interest in and to the following described property (herein collectively called
the "Property"):
(a) Land. That certain tract of land (the "Land") located in the City of
Acton, Middlesex County, Massachusetts, being more particularly described on
Exhibit A attached hereto and made a part hereof.
(b) Easements. All easements, if any, benefiting the Land or the
Improvements (as hereinafter defined).
(c) Rights and Appurtenances. All rights and appurtenances pertaining to
the Land, including any right, title and interest of Seller in and to adjacent
streets, alleys or rights-of-way.
(d) Improvements. All improvements and related amenities known as "Village
Arms Apartments" (the "Improvements") in and on the Land, and having an address
of 419 Great Road, Acton, Massachusetts.
(e) Leases. All leases (the "Leases") of space in the Property, concession
leases, and all tenant security deposits held by Seller on the Closing Date (as
hereinafter defined).
(f) Tangible Personal Property. All appliances, fixtures, equipment,
machinery, furniture, carpet, drapes and other personal property, if any, owned
by Seller and located on or about the Land and the Improvements (the "Tangible
Personal Property").
(g) Contracts. To the extent assignable without the consent of third
parties, the Contracts (as hereinafter defined).
(h) Intangible Property. To the extent assignable without the consent of
third parties, all intangible property (the "Intangible Property"), if any,
owned by Seller and pertaining to the Land, the Improvements, or the Tangible
Personal Property including, without limitation, transferable utility contracts,
transferable telephone exchange numbers, plans and specifications, engineering
plans and studies, floor plans and landscape plans.
1.2 Independent Consideration. Upon execution of this Agreement,
Purchaser has delivered to Seller, and Seller acknowledges receipt of, FIFTY AND
NO/100 DOLLARS ($50.00) (the "Independent Consideration"), as consideration for
Purchaser's right to purchase the Property and for Seller's execution, delivery
and performance of this Agreement. The Independent Consideration is in addition
to and independent of any other consideration or payment provided for in this
Agreement, is non-refundable and shall be retained by Seller notwithstanding any
other provision of this Agreement.
2.
PURCHASE PRICE
2.1 Purchase Price. The purchase price (the "Purchase Price") for
the Property shall be FIVE MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($5,500,000.00) and shall be paid in cash by Purchaser to Seller at the Closing
(as defined herein) by wire transfer in accordance with wire transfer
instructions to be provided by Seller.
3.
EARNEST MONEY
3.1 Earnest Money. Purchaser shall deliver to the Title Company (as
defined in Section 6.1) on or before December 1, 1997, by wire transfer in
accordance with wire transfer instructions provided by the Title Company, the
amount of ONE HUNDRED THOUSAND AND NO/100 DOLLARS ($100,000.00) (which amount,
together with all interest accrued thereon, if any, is herein called the
"Earnest Money") to be invested by the Title Company in an interest-bearing
account as Purchaser and Seller shall direct. Seller shall have the option of
terminating this Agreement if the full amount of Earnest Money is not delivered
to the Title Company as prescribed in this Section 3.1. Purchaser agrees to
promptly deliver or cause the Title Company to deliver written acknowledgment by
the Title Company that the executed copy of this Agreement and the Earnest Money
have been received by and are being held by the Title Company pursuant to the
terms of this Agreement. If the sale of the Property is consummated under this
Agreement, the Earnest Money shall be paid to Seller and applied to the payment
of the Purchase Price at Closing (as hereinafter defined). If Purchaser
terminates this Agreement in accordance with any right to terminate granted to
Purchaser by the terms of this Agreement, the Earnest Money shall be immediately
returned to Purchaser, and no party hereto shall have any further obligations
under this Agreement except for such obligations which by their terms expressly
survive the termination of this Agreement (the "Surviving Obligations").
Purchaser agrees to deliver to Seller copies of all Reports (as defined in
Section 4.2 hereof) at the time the notice to terminate this Agreement is given.
The obligations to deliver the Reports shall survive the termination of this
Agreement. In no event shall any Earnest Money be returned to Purchaser
hereunder until all Reports have been delivered to Seller.
3.2 Additional Deposit. On or before the expiration of the Approval
Period (as hereinafter defined), Purchaser shall make an additional deposit of
ONE HUNDRED THOUSAND AND NO/100 DOLLARS ($100,000.00) (the "Additional Deposit")
with the Title Company, to be held in the account containing the Earnest Money,
which amount shall be retained or disbursed by the Title Company in the same
manner as the Earnest Money in accordance with the terms contained herein.
4.
CONDITIONS TO CLOSING
4.1 Delivery of Documents. Purchaser acknowledges that Seller has
previously delivered to Purchaser the following items, prior to the Effective
Date (as defined in Section 10.13):
(a) Title Commitment. Commitment for Owner's Policy of Title Insurance (the
"Title Commitment") with respect to the Property, issued by the Title Company,
and legible copies of any restrictive covenants, easements, and other items
listed as title exceptions therein.
(b) Contracts. Copies of all contracts pertaining to the Property (the
"Contracts"), including, but not limited to, management contracts, housing
assistance payment contracts, if any, service contracts, equipment leases and
maintenance contracts, to the extent in the possession of GE Capital Realty
Group, Inc. ("GECRG"). Purchaser acknowledges that Seller does not make any
representations or warranties that any Contracts produced are all contracts
concerning the Property.
(c) Rent Roll. A certified rent roll describing all Leases of space in the
Improvements as of the last month GECRG has received such information from the
property manager of the Property.
(d) ACM Notice. Information in Seller's possession, if any, regarding the
presence and location of asbestos-containing material ("ACM") and presumed ACM
on the Property to the extent prescribed by applicable regulations of the
Occupation Safety and Health Administration.
(e) Survey. A current (within the last 6 months) as-built survey of the
Property (the "Survey"), showing the location of all Improvements.
(f) Title V Inspection. Information relating to the summary of Seller's
Title V inspection in accordance with Massachusetts laws: 310 CMR ss. 15.301.
Seller's failure to provide Purchaser with the foregoing items prior to the
expiration of the Approval Period shall not result in the extension of the
Approval Period, and Purchaser's sole remedy therefor shall be Purchaser's right
to terminate this Agreement by delivering written notice thereof to Seller on or
before the expiration of said Approval Period hereof and receive a return of the
Earnest Money, in which event neither party shall have any obligation hereunder
except for the Surviving Obligations.
4.1.1 Purchaser's Satisfaction. Commencing on the Effective Date and ending
December 24th, 1997 (the "Approval Period"), the following matters shall be
conditions precedent to Purchaser's obligations under this Contract:
(a) Purchaser's being satisfied in Purchaser's sole discretion that the
Property is suitable for Purchaser's intended uses; and
(b) Purchaser's being satisfied, in Purchaser's sole discretion, with the
items listed above in Section 4.1(a) through Section 4.1(f) above, including the
information reflected therein.
If Purchaser is not satisfied in its sole discretion as to the suitability of
the Property for Purchaser's intended uses or any of the items listed above in
Section 4.1(a) through Section 4.1(f) above, Purchaser may give notice thereof
to Seller on or before the expiration of the Approval Period, whereupon this
Agreement shall terminate, and upon such termination, Purchaser shall be
entitled to the return of the Earnest Money (subject to Purchaser's delivery of
the Reports to Seller as required by Section 3.1 of this Agreement), and neither
party shall have any further obligation hereunder except for the Surviving
Obligations. If Purchaser fails to give notice to Seller on or before the
expiration of the Approval Period that Purchaser is not satisfied with the
suitability of the Property or any of the items listed in Section 4.1(a) through
Section 4.1(f) above, Purchaser shall be deemed to be satisfied with such
matters and the conditions precedent in this Section 4.1.1 shall be deemed to be
satisfied.
4.1.2 Title Commitment and Survey.
(a) In the event (i) the Survey shows any easement,
right-of-way, encroachment, conflict, protrusion or other matter
affecting the Property that is unacceptable to Purchaser, or (ii)
any exceptions appear in the Title Commitment that are unacceptable
to Purchaser, Purchaser shall be provided the opportunity until
December 24, 1997, to notify Seller in writing of such facts and
the reasons therefor ("Purchaser's Objections"). The parties agree
that the definition of "Purchaser's Objections" shall automatically
include any nongovernmental mortgages or liens affecting the
Property which arise from and after the Effective Date. After
December 24, 1997, except for Purchaser's Objections if same are
timely raised, Purchaser shall be deemed to have accepted the form
and substance of the Survey, all matters shown thereon, all
exceptions shown on the Title Commitment. Notwithstanding anything
to the contrary contained herein, Seller shall have no obligations
to take any steps or bring any action or proceeding or otherwise to
incur any effort or expense whatsoever to eliminate or modify any
of the Purchaser's Objections; provided, however, Seller shall
undertake reasonable efforts to eliminate any title matters arising
after the date of the Title Commitment (except for the Declaration
of Covenants filed in connection with the acquisition by Seller of
the Property.) In the event Seller is unable or unwilling to
eliminate or modify all of Purchaser's Objections to the reasonable
satisfaction of Purchaser, Purchaser may (as its sole and exclusive
remedy) terminate this Agreement by delivering notice thereof in
writing to Seller by the earlier to occur of (i) the Closing Date
or (ii) three (3) days after Seller's written notice to Purchaser
of Seller's intent to not cure one or more of such Purchaser's
Objections, in which event neither party shall have any obligations
hereunder other than the Surviving Obligations. Notwithstanding
anything contained in this Section 4.1.2 to the contrary, in the
event Purchaser does not obtain a survey prior to the expiration of
the Approval Period, Purchaser's rights shall be to terminate this
Agreement as set forth in Section 4.1, and such rights shall not be
modified or extended by the terms of this Section 4.1.2.
(b) The term "Permitted Encumbrances" as used herein
includes: (i) any easement, right of way, encroachment, conflict,
discrepancy, overlapping of improvements, protrusion, lien,
encumbrance, restriction, condition, covenant, exception or other
matter with respect to the Property that is reflected or addressed
on the Survey or the Title Commitment to which Purchaser fails to
timely object pursuant to Section 4.1.2(a) of this Agreement; (ii)
any Purchaser's Objection that remains uncured, for whatever
reason, at the earlier to occur of (A) Closing hereunder or (B)
three (3) business days after Seller notifies Purchaser that Seller
is unwilling or unable to cure or modify Purchaser's Objections to
the reasonable satisfaction of Purchaser; and (iii) the rights and
interests of parties claiming under the Leases.
4.1.3 Limitations of Seller's Obligations. Notwithstanding anything
contained herein to the contrary, Seller shall have no obligation to take any
steps, bring any action or proceeding or incur any effort or expense whatsoever
to eliminate, modify or cure any objection Purchaser may have pursuant to
Section 4.1.1, Section 4.1.2 or Section 4.2.
4.2 Inspection. Purchaser may inspect, test, and survey: (a) the
Property, (b) all financial records pertaining to the operation of the Property,
and (c) photocopies of all Leases and Contracts in the possession of GECRG and
at the Property, at any reasonable time during business hours at any time during
the Approval Period. Notwithstanding the foregoing, Purchaser must obtain
Seller's prior written approval of the scope and method of any environmental
testing or investigation (other than a Phase I environmental inspection) and any
inspection which would materially alter the physical condition of the Property,
prior to Purchaser's commencement of such inspections or testing. In any event,
Seller and its representatives, agents, and/or contractors shall have the right
to be present during any such testing, investigation, or inspection. If such
inspection reveals any fact or condition unacceptable to Purchaser, Purchaser
shall notify Seller in writing prior to the expiration of the Approval Period of
such unacceptable fact or condition and Seller shall have the right (without any
obligation to do so) to correct same by the Closing Date (as hereinafter
defined). If Seller does not correct such unacceptable fact or condition by the
Closing Date, Purchaser may terminate this Agreement and neither party shall
have any further right or obligation hereunder other than the Surviving
Obligations. If Purchaser does not give such notification to Seller in writing
prior to the expiration of the Approval Period, the said inspection of the
Property shall be deemed satisfactory to Purchaser and Purchaser shall be deemed
to have agreed to assume all obligations from and after the date of Closing with
respect to the Leases and the Contracts provided to Purchaser. All information
provided by Seller to Purchaser or obtained by Purchaser relating to the
Property in the course of Purchaser's review, including, without limitation, any
environmental assessment or audit (collectively, the "Reports") shall be treated
as confidential information by Purchaser and, except to the extent required by
law, Purchaser shall instruct all of its employees, agents, representatives and
contractors as to the confidentiality of all such information. Purchaser shall
restore the Property to its condition existing immediately prior to Purchaser's
inspection thereof, and Purchaser shall be liable for all damage or injury to
any person or property resulting from, relating to or arising out of any such
inspection, whether occasioned by the acts of Purchaser or any of its employees,
agents, representatives or contractors, and Purchaser shall indemnify and hold
harmless Seller and its agents, employees, officers, directors, affiliates and
asset managers from any liability resulting therefrom. This indemnification by
Purchaser shall survive the Closing or the termination of this Agreement, as
applicable.
4.3 Purchaser's Representations and Warranties. Purchaser
represents and warrants to Seller that (a) Purchaser is a partnership or
corporation, duly organized and in good standing under the laws of the Delaware,
(and that the acquiring entity of the Property will be qualified to do business
in the Commonwealth of Massachusetts if required by law); and has the power to
enter into this Agreement and to execute and deliver this Agreement and to
perform all duties and obligations imposed upon it hereunder, and Purchaser has
obtained all necessary partnership and corporate authorizations required in
connection with the execution, delivery and performance contemplated by this
Agreement and has obtained the consent of all entities and parties necessary to
bind Purchaser to this Agreement, and (b) neither the execution nor the delivery
of this Agreement, nor the consummation of the purchase and sale contemplated
hereby, nor the fulfillment of or compliance with the terms and conditions of
this Agreement conflict with or will result in the breach of any of the terms,
conditions, or provisions of any agreement or instrument to which Purchaser, or
any partner or related entity or affiliate of Purchaser, is a party or by which
Purchaser, any partner or related entity or affiliate of Purchaser, or any of
Purchaser's assets is bound, and (c) that, with respect to each source of funds
to be used by it to purchase the Property (respectively, the "Source"), at least
one of the following statements shall be accurate as of the Closing Date: (i)the
Source does not include the assets of (A) an "employee benefit plan" as defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), which is subject to Title I of ERISA, or (B) a "plan" as
defined in Section 4975(a) of the Internal Revenue Code of 1986, as amended
("Code"), or (ii)the Source includes the assets of (A) an "employee benefit
plan" as defined in Section 3(3) of ERISA or (B) a "plan" as defined in Section
4975 of the Code (each of which has been identified to the Seller in writing
pursuant to this paragraph 4.3 at least ten (10) business days prior to the
Closing Date), but the use of such Source to purchase the Property will not
result in a nonexempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code. The Purchaser's representations and warranties set
forth in this Section 4.3 shall survive the Closing or termination of this
Agreement. Purchaser's representations and warranties contained herein must be
true and correct through the Closing Date, and Purchaser's failure to notify
Seller prior to the Closing Date of any inaccuracies shall be a default by
Purchaser under this Agreement.
4.4 Seller's Representations and Warranties. Seller represents and
warrants to Purchaser that (a) Seller has the full partnership/corporate right,
power, and authority, without the joinder of any other person or entity, to
enter into, execute and deliver this Agreement, and to perform all duties and
obligations imposed on Seller under this Agreement, and (b) neither the
execution nor the delivery of this Agreement, nor the consummation of the
purchase and sale contemplated hereby, nor the fulfillment of or compliance with
the terms and conditions of this Agreement conflict with or will result in the
breach of any of the terms, conditions, or provisions of any agreement or
instrument to which Seller is a party or by which Seller or any of Seller's
assets is bound.
4.5 Defective Condition Extension; Termination. The obligations of Seller
hereunder are subject to and contingent upon the following:
In the event that subsequent to the execution of this
Agreement Seller obtains knowledge of, or Purchaser's inspection of
the Property reveals, either (i) the presence of any Hazardous
Materials (as defined in Section 5.2 hereof) or the violation or
potential violation of any Environmental Requirements (as defined
in Section 5.3 hereof) or (ii) any structural or other defect in
the Improvements, whether or not in violation of any applicable
law, ordinance, code, regulation or decree of any governmental
authority having jurisdiction over the Property, other than
asbestos contained in the ceiling tiles and for any obligations
under 310 CMR ss. 15.301 (collectively, a "Defective Condition"),
which Seller, in its reasonable judgment, determines could
constitute a potential liability to Seller after the Closing or
should be remedied prior to the sale of the Property, Seller shall
have the right upon written notice to Purchaser on or before the
scheduled Closing Date either (i) to extend the Closing Date for
the period of time necessary to complete such remediation at
Seller's sole cost and expense, or (ii) to terminate this Agreement
upon written notice to Purchaser, in which event the Earnest Money
shall be refunded to Purchaser and neither party shall have any
further right or obligation hereunder other than the Surviving
Obligations. The terms of this Section 4.6 are solely for the
benefit of Seller and Purchaser shall have no additional right or
remedy hereunder as a result of the exercise by Seller of its
rights under this Section.
4.6 Lead Paint. The parties acknowledge that, under Massachusetts law,
whenever a child or children under six years of age reside in any residential
property in which any paint, plaster or other accessible material contains
dangerous levels of lead, the owner of said premises must remove or cover such
paint, plaster or other material so as to make it inaccessible to children under
six years of age. Purchaser certifies to the following:
1. Purchaser has been informed that the Property may contain such
lead-based materials.
2. Purchaser has been provided not less than ten (10) days to inspect the
Property for lead-based materials.
3. Upon the transfer of title as provided herein, Purchaser agrees to
assume all responsibility for complying with any and all applicable laws
concerning lead-based material in the Property and to indemnify and hold
harmless Seller with respect to any liability from the same arising from and
after the Closing Date.
4. Attached as Exhibit G is Purchaser's Transfer Notification
Certification.
This section shall survive the delivery of the Deed.
5.
NO REPRESENTATIONS OR WARRANTIES BY SELLER;
ACCEPTANCE OF PROPERTY
5.1 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
PURCHASER ACKNOWLEDGES AND AGREES THAT SELLER HAS NOT MADE, DOES NOT MAKE AND
SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES AS DEFINED
BELOW), PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER
WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR
FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO (A) THE VALUE, NATURE, QUALITY
OR CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL AND
GEOLOGY, (B) THE INCOME TO BE DERIVED FROM THE PROPERTY, (C) THE SUITABILITY OF
THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH PURCHASER OR ANY TENANT
MAY CONDUCT THEREON, (D) THE COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION
WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL
AUTHORITY OR BODY, (E) THE HABITABILITY, MERCHANTABILITY, MARKETABILITY,
PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROPERTY, (F) THE
MANNER OR QUALITY OF THE CONSTRUCTION OR MATERIALS, IF ANY, INCORPORATED INTO
THE PROPERTY, (G) THE MANNER, QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF THE
PROPERTY, OR (H) COMPLIANCE WITH ANY ENVIRONMENTAL PROTECTION, POLLUTION OR LAND
USE LAWS, RULES, REGULATIONS, ORDERS OR REQUIREMENTS, INCLUDING THE EXISTENCE IN
OR ON THE PROPERTY OF HAZARDOUS MATERIALS (AS DEFINED BELOW) OR (I) ANY OTHER
MATTER WITH RESPECT TO THE PROPERTY. ADDITIONALLY, NO PERSON ACTING ON BEHALF OF
SELLER IS AUTHORIZED TO MAKE, AND BY EXECUTION HEREOF OF PURCHASER ACKNOWLEDGES
THAT NO PERSON HAS MADE, ANY REPRESENTATION, AGREEMENT, STATEMENT, WARRANTY,
GUARANTY OR PROMISE REGARDING THE PROPERTY OR THE TRANSACTION CONTEMPLATED
HEREIN; AND NO SUCH REPRESENTATION, WARRANTY, AGREEMENT, GUARANTY, STATEMENT OR
PROMISE IF ANY, MADE BY ANY PERSON ACTING ON BEHALF OF SELLER SHALL BE VALID OR
BINDING UPON SELLER UNLESS EXPRESSLY SET FORTH HEREIN. PURCHASER FURTHER
ACKNOWLEDGES AND AGREES THAT HAVING BEEN GIVEN THE OPPORTUNITY TO INSPECT THE
PROPERTY, PURCHASER IS RELYING SOLELY ON ITS OWN INVESTIGATION OF THE PROPERTY
AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER AND AGREES TO
ACCEPT THE PROPERTY AT THE CLOSING AND WAIVE ALL OBJECTIONS OR CLAIMS AGAINST
SELLER (INCLUDING, BUT NOT LIMITED TO, ANY RIGHT OR CLAIM OF CONTRIBUTION)
ARISING FROM OR RELATED TO THE PROPERTY OR TO ANY HAZARDOUS MATERIALS ON THE
PROPERTY. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT ANY INFORMATION
PROVIDED OR TO BE PROVIDED WITH RESPECT TO THE PROPERTY WAS OBTAINED FROM A
VARIETY OF SOURCES AND THAT SELLER HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR
VERIFICATION OF SUCH INFORMATION AND MAKES NO REPRESENTATIONS AS TO THE
ACCURACY, TRUTHFULNESS OR COMPLETENESS OF SUCH INFORMATION. EXCEPT AS SET FORTH
HEREIN, SELLER IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN
STATEMENT, REPRESENTATION OR INFORMATION PERTAINING TO THE PROPERTY, OR THE
OPERATION THEREOF, FURNISHED BY ANY REAL ESTATE BROKER, CONTRACTOR, AGENT,
EMPLOYEE, SERVANT OR OTHER PERSON. EXCEPT AS SET FORTH HEREIN, PURCHASER FURTHER
ACKNOWLEDGES AND AGREES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE SALE OF
THE PROPERTY AS PROVIDED FOR HEREIN IS MADE ON AN "AS IS" CONDITION AND BASIS
WITH ALL FAULTS. IT IS UNDERSTOOD AND AGREED THAT THE PURCHASE PRICE HAS BEEN
ADJUSTED BY PRIOR NEGOTIATION TO REFLECT THAT ALL OF THE PROPERTY IS SOLD BY
SELLER AND PURCHASED BY PURCHASER SUBJECT TO THE FOREGOING. EXCEPT AS PROVIDED
IN SECTION 10.2 HEREOF, PURCHASER HEREBY AGREES TO INDEMNIFY, PROTECT, DEFEND,
SAVE AND HOLD HARMLESS SELLER FROM AND AGAINST ANY AND ALL DEBTS, DUTIES,
OBLIGATIONS, LIABILITIES, SUITS, CLAIMS, DEMANDS, CAUSES OF ACTION, DAMAGES,
LOSSES, FEES AND EXPENSES (INCLUDING, WITHOUT LIMITATION, ATTORNEYS' FEES AND
EXPENSES AND COURT COSTS) IN ANY WAY RELATING TO, OR IN CONNECTION WITH OR
ARISING OUT OF PURCHASER'S ACQUISITION, OWNERSHIP, LEASING, USE, OPERATION,
MAINTENANCE AND MANAGEMENT OF THE PROPERTY. THE PROVISIONS OF THIS SECTION 5
SHALL SURVIVE THE CLOSING OR ANY TERMINATION HEREOF.
5.2 Hazardous Materials. "Hazardous Materials" shall mean any
substance which is or contains (i) any "hazardous substance" as now or hereafter
defined in ss.101(14) of the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amend (42 U.S.C. ss.9601 et seq.) ("CERCLA") or
any regulations promulgated under CERCLA; (ii) any "hazardous waste" as now or
hereafter defined in the Resource Conservation and Recovery Act (42 U.S.C.
ss.6901 et seq.) ("RCRA") or regulations promulgated under RCRA; (iii) any
substance regulated by the Toxic Substances Control Act (15 U.S.C. ss.2601 et
seq.); (iv) gasoline, diesel fuel, or other petroleum hydrocarbons; (v) asbestos
and asbestos containing materials, in any form, whether friable or non-friable;
(vi) polychlorinated biphenyls; (vii) radon gas; (viii) any additional
substances or materials which are now or hereafter classified or considered to
be hazardous or toxic under Environmental Requirements (as hereinafter defined)
or the common law, or any other applicable laws relating to the Property.
Hazardous Materials shall include, without limitation, any substance, the
presence of which on the Property, (A) requires reporting, investigation or
remediation under Environmental Requirements; (B) causes or threatens to cause a
nuisance on the Property or adjacent property or poses or threatens to pose a
hazard to the health or safety of persons on the Property or adjacent property;
or (C) which, if it emanated or migrated from the Property, could constitute a
trespass; and (ix) as defined in Massachusetts General Laws, Chapter 21C, and
Massachusetts General Laws, Chapter 21E, as amended.
5.3 Environmental Requirements. "Environmental Requirements" shall
mean all laws, ordinances, statutes, codes, rules, regulations, agreements,
judgments, orders, and decrees, now or hereafter enacted, promulgated, or
amended, of the United States, the states, the counties, the cities, or any
other political subdivisions in which the Property is located, and any other
political subdivision, agency or instrumentality exercising jurisdiction over
the owner of the Property, the Property, or the use of the Property, relating to
pollution, the protection or regulation of human health, natural resources, or
the environment, or the emission, discharge, release or threatened release of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or waste or Hazardous Materials into the environment (including,
without limitation, ambient air, surface water, ground water or land or soil).
6.
CLOSING
6.1 Closing. The Closing (the "Closing") shall be held at the
offices of Chicago Title Insurance Company (the "Title Company") at 10 Columbus
Boulevard, Hartford, Connecticut 06106, Attn: Tom Covill, on or before December
30, 1997 (the "Closing Date"), unless the parties mutually agree in writing upon
another place, time or date.
6.2 Possession. Possession of the Property shall be delivered to Purchaser
at the Closing, subject to the Permitted Encumbrances.
6.3 Proration. All rents, other amounts payable by the tenants
under the Leases, income, utilities and all other operating expenses with
respect to the Property for the month in which the Closing occurs, and real
estate and personal property taxes and other assessments with respect to the
Property for the year in which the Closing occurs, shall be prorated to the date
Seller receives the Purchase Price in immediately available funds with Seller
receiving the benefits and burdens of ownership on the Closing Date.
(a) If the Closing shall occur before rents and all other
amounts payable by the tenants under the Leases and all other
income from the Property have actually been paid for the month in
which the Closing occurs, the apportionment of such rents and other
amounts and other income shall be upon the basis of such rents,
other amounts and other income actually received by Seller.
Subsequent to the Closing, if any rents and other income are
actually received by Purchaser, all such amounts shall first be
applied to post-closing rents due to Purchaser and the balance
shall be immediately paid by Purchaser to Seller. Purchaser shall
make a good faith effort and attempt to collect any such rents and
other amounts and other income not apportioned at the Closing for
the benefit of Seller, however, Purchaser shall not be required to
expend any funds or institute any litigation in its collection
efforts. Nothing in this paragraph shall restrict Seller's right to
collect delinquent rents directly from a tenant by any legal means
provided, however, Seller shall not have the right to pursue the
eviction of any tenant of the Property.
(b) If the Closing shall occur before the tax rate or the
assessed valuation of the Property is fixed for the then current
year, the apportionment of taxes shall be upon the basis of the tax
rate for the preceding year applied to the latest assessed
valuation. Subsequent to the Closing, when the tax rate and the
assessed valuation of the Property is fixed for the year in which
the Closing occurs, the parties agree to adjust the proration of
taxes and, if necessary, to refund or repay such sums as shall be
necessary to effect such adjustment. If the Property is not
assessed as a separate parcel for tax or assessment purposes, then
such taxes and assessments attributable to the Property shall be
determined by Purchaser and Seller. If, as of the Closing, the
Property is not being treated as a separate tax parcel, then within
thirty (30) days after the Closing, Purchaser shall, at its sole
cost and expense, have the Property assessed separately for tax and
assessment purposes.
(c) If the Closing shall occur before the actual amount
of utilities and all other operating expenses with respect to the
Property for the month in which the Closing occurs are determined,
the apportionment of such utilities and other operating expenses
shall be upon the basis of an estimate by Seller of such utilities
and other operating expenses for such month. Subsequent to the
Closing, when the actual amount of such utilities and other
operating expenses with respect to the Property for the month in
which the Closing occurs are determined, the parties agree to
adjust the proration of such utilities and other operating expenses
and, if necessary, to refund or repay such sums as shall be
necessary to effect such adjustment.
The agreements of Seller and Purchaser set forth in this Section 6.3 shall
survive the Closing.
6.4 Closing Costs. Except as otherwise expressly provided herein,
Seller shall pay, on the Closing Date, the cost of any transfer fees, one-half
(1/2) of any escrow fees and other customary charges of the Title Company, and
Purchaser shall pay, on the Closing Date, the title insurance premium for the
Owner's Policy (as defined in Section 6.6), the cost of the Survey and all
updates thereto, all recording costs, one-half (1/2) of any escrow fees and
other customary charges of the Title Company. Except as otherwise provided
herein, each party shall pay its own attorneys' fees.
6.5 Seller's Obligations at the Closing. At the Closing, Seller shall
deliver to Purchaser the ------------------------------------ following:
(a) Evidence of Authority. Such organizational and
authorizing documents of Seller as shall be reasonably required by
the Title Company to evidence Seller's authority to consummate the
transactions contemplated by this Agreement.
(b) Foreign Person. An affidavit of Seller certifying that Seller is not a
"foreign person," as defined in the federal Foreign Investment in Real Property
Tax Act of 1980, and the 1984 Tax Reform Act, as amended.
(c) Leases. The originals of all of the Leases in the possession of GECRG.
Purchaser shall receive a credit against the Purchase Price for the security
deposit liability (i.e. all amounts due to tenants under the Leases) and
Seller's liability for the last month's rent.
(d) Contracts. The originals of all of the Contracts, if any, in the
possession of GECRG.
(e) Excise Tax Waiver. Seller shall either obtain an excise tax lien waiver
from the Massachusetts Department of Revenue for the transactions contemplated
by this Agreement on or prior to the Closing to the satisfaction of the Title
Company or insert a clause into the Deed reflecting that such transfer and
conveyance is not a sale of all or substantially all of the assets of Seller in
the Commonwealth of Massachusetts.
(f) Title Affidavits. Such other affidavits from Seller as may be
reasonably be required by the Title Company.
6.6 Purchaser's Obligations at the Closing. At the Closing, Purchaser shall
deliver to Seller the following:
(a) Purchase Price. The Purchase Price by wire transfer of immediately
available funds.
(b) Evidence of Authority. Such organizational and
authorizing documents of Purchaser as shall be reasonably required
by Seller and/or the Title Company authorizing Purchaser's
acquisition of the Property pursuant to this Agreement and the
execution of this Agreement and any documents to be executed by
Purchaser at the Closing.
(c) Taxpayer I.D. Certification, in the form attached to this Agreement as
Exhibit E.
In the event Purchaser so elects, Purchaser may obtain, at
Purchaser's expense, an Owner's Policy of Title Insurance in
standard form (the "Owner's Policy"), naming Purchaser as insured,
in the amount of the Purchase Price, insuring that Purchaser owns
good and indefeasible fee simple title to the Property, subject
only to the Permitted Encumbrances. Purchaser, at Purchaser's sole
expense, may elect to cause the Title Company to amend the survey
exception to read "any shortages in area."
6.7 Documents to be Executed by Seller and Purchaser. At the Closing,
Seller and Purchaser shall also execute and deliver the following:
(a) Deed. Quitclaim Deed (the "Deed") conveying the Land
and the Improvements to Purchaser subject to no exceptions other
than the Permitted Encumbrances, in the form attached to this
Agreement as Exhibit B.
(b) Tenant Notices. Signed statements or notices to all
tenants of the Property notifying such tenants that the Property
has been transferred to Purchaser and that Purchaser is responsible
for security deposits (specifying the amounts of such deposits).
(c) Assignment and Assumption of Personal Property, Service Contracts,
Warranties and Leases. Assignment in the form attached to this Agreement as
Exhibit C.
(d) ACM Notice. Notice from Seller to Purchaser in
substantially the form attached to this Agreement as Exhibit D (the
"ACM Notice") pursuant to which Seller shall provide Purchaser with
information in Seller's possession, if any, regarding the presence
and location of asbestos-containing material ("ACM") and presumed
ACM on the Property to the extent prescribed by applicable
regulations of the Occupational Safety and Health Administration.
(e) Lead Paint Notice. Notice from Seller to Purchaser in
substantially the form attached to this Agreement as Exhibit G (the
"Lead Paint Notice") pursuant to which Seller shall provide
Purchaser with information in Seller's possession, if any, of the
presence and location of lead-based paint to the extent prescribed
by applicable law.
7.
RISK OF LOSS
7.1 Condemnation. If, prior to the Closing, action is initiated to
take any of the Property by eminent domain proceedings or by deed in lieu
thereof, Purchaser may either at or prior to Closing (a) terminate this
Agreement, or (b) consummate the Closing, in which latter event all of Seller's
right, title and interest in and to the award of the condemning authority shall
be assigned to Purchaser at the Closing and there shall be no reduction in the
Purchase Price.
7.2 Casualty. Except as provided in Sections 4.2 of this Agreement,
Seller assumes all risks and liability for damage to or injury occurring to the
Property by fire, storm, accident, or any other casualty or cause until the
Closing has been consummated. If the Property, or any part thereof, suffers any
damage in excess of $100,000.00 prior to the Closing from fire or other
casualty, which Seller, at its sole option, does not elect to repair (which
election shall be made within 120 days of Closing), Purchaser may either at or
prior to Closing (a) terminate this Agreement, or (b) consummate the Closing, in
which latter event all of Seller's right, title and interest in and to the
proceeds of any insurance covering such damage (less an amount equal to any
expenses and costs incurred by Seller to repair or restore the Property and any
portion of such proceeds paid or to be paid on account of the loss of rents or
other income from the Property for the period prior to and including the Closing
Date, all of which shall be payable to Seller), to the extent the amount of such
insurance does not exceed the Purchase Price, plus an amount equal to Seller's
deductible under its insurance policy (the aggregate of such amounts shall not
exceed the Purchase Price) shall be assigned to Purchaser at the Closing. If the
Property, or any part thereof, suffers any damage less than $100,000.00 prior to
the Closing, Purchaser agrees that it will consummate the Closing and accept the
assignment of the proceeds of any insurance covering such damage plus an amount
equal to Seller's deductible under its insurance policy and there shall be no
reduction in the Purchase Price.
8.
DEFAULT
8.1 Breach by Seller. Except as Purchaser's remedies may otherwise
be expressly limited by the terms of this Agreement (including, without
limitation, the terms of Section 4):
(a) Breach by Seller. In the event that Seller shall fail
to consummate the transactions contemplated by this Agreement for
any reason, except Purchaser's default or a termination of this
Agreement by Purchaser or Seller pursuant to a right to do so under
the provisions hereof, Purchaser, as its sole and exclusive
remedies may either (i) terminate this Agreement, receive a refund
of the Earnest Money and Additional Deposit, if any, and pursue
Seller for actual damages, provided, however, in no event shall
Purchaser be entitled to a recovery or claim against Seller in
excess of an amount equal to the amount of the Earnest Money and
Additional Deposit, if any, Seller shall not be liable to Purchaser
for any punitive, speculative or consequential damages or (ii)
pursue the remedy of specific performance of Seller's obligations
under this Agreement; provided, however that (a) any such suit for
specific performance must be filed within sixty (60) days after
Purchaser becomes aware of the default by Seller, (b) Purchaser is
not in default under this Agreement, (c) Purchaser has tendered the
Purchase Price, less Purchaser's good faith reasonable estimate of
proration credits that would be credited against the Purchase
Price, to the Title Company in immediately available funds and the
Title Company has acknowledged receipt of same, in writing, to
Seller, and (d) Purchaser has furnished ten (10) days prior written
notice to Seller of its intent and election to seek specific
enforcement of this Agreement; and further provided that
notwithstanding anything to the contrary contained herein if
Purchaser seeks specific performance under this Agreement Purchaser
agrees to accept the Property in its "WHERE IS, AS IS" condition.
Purchaser hereby agrees that prior to its exercise of any right or
remedies as a result of any defaults by Seller, Purchaser will
first deliver written notice of said default to Seller and give
Seller ten (10) days thereafter in which to cure said default, if
Seller so elects. In no event whatsoever shall Purchaser file any
instrument of record against title to the Property until it has
complied with the provisions of (a) through (d) above.
Notwithstanding any of the foregoing to the contrary, in no event
whatsoever, shall Purchaser have the right to seek money damages of
any kind as a result of any default by Seller under any of the
terms of this Agreement except as provided for herein. In no event
shall Seller be liable to Purchaser for any punitive, speculative
or consequential damages. If for any reason the remedy of specific
performance is denied Purchaser following all available court
proceedings, or Purchaser discontinues the action for specific
performance, then all funds deposited by Purchaser pursuant to (c)
above shall be returned to Purchaser and the Seller shall then be
released from any further liability to Purchaser in reference to
this Contract but Purchaser may be liable to Seller for costs or
damages as provided under this Agreement or by law.
8.2 Breach by Purchaser.
(a) If Purchaser fails to comply with Section 6 of this
Agreement, Seller may terminate this Agreement and thereupon shall
be entitled to the Earnest Money and Additional Deposit, if any, as
liquidated damages (and not as a penalty) and as Seller's sole
remedy at law or in equity (except for the Surviving Obligations).
Seller and Purchaser have made this provision for liquidated
damages because it would be difficult to calculate, on the date
hereof, the amount of actual damages for such breach, and Seller
and Purchaser agree that these sums represent reasonable
compensation to Seller for such breach.
(b) In the event of any default by Purchaser under this
Agreement, other than Purchaser's failure to comply with Section 6
of this Agreement, Seller shall have any and all rights and
remedies available at law or in equity by reason of such default.
The provisions of this Section 8.2 shall not limit or affect any of
Purchaser's indemnities as provided in other Sections of this Agreement.
9.
FUTURE OPERATIONS
9.1 Future Operations. From the date of this Agreement until the Closing or
earlier
termination of this Agreement:
(a) Seller will keep and maintain the Property
in substantially its condition as of the date of this
Agreement and continue to lease in the ordinary course of
business consistent with Seller's past practice with
respect to the Property;
(b) Seller will perform all Seller's
obligations under the Contracts. Seller will not, without
the prior written consent of Purchaser, modify, enter
into, or renew any Contract which cannot be cancelled
upon thirty (30) days prior written notice.
10.
MISCELLANEOUS
10.1 Notices. All notices, demands and requests which may be given
or which are required to be given by either party to the other, and any exercise
of a right of termination provided by this Agreement, shall be in writing and
shall be deemed effective either: (a) on the date personally delivered to the
address below, as evidenced by written receipt therefore, whether or not
actually received by the person to whom addressed; (b) on the third (3rd)
business day after being sent, by certified or registered mail, return receipt
requested, addressed to the intended recipient at the address specified below
with a copy via telecopy; or (c) on the first (1st) business day after being
deposited into the custody of a nationally recognized overnight delivery service
such as Federal Express Corporation, Emery or Purolator, addressed to such party
at the address specified below. For purposes of this Section 10.1, the addresses
of the parties for all notices are as follows (unless changed by similar notice
in writing given by the particular person whose address is to be changed):
If to Seller: Properties II, Inc.
c/o GE Capital Realty Group, Inc.
16479 Dallas Parkway, Suite 400
Dallas, Texas 75248-2605
Attention: Scott Kocurek
Tel: (214) 447-2604
Fax: (214) 447-2667
with a copy to: Locke Purnell Rain Harrell
(A Professional Corporation)
2200 Ross Avenue, Suite 2200
Dallas, Texas 75201-6776
Attention: Brian Forbes
Tel: (214) 740-8467
Fax: (214) 740-8800
If to Purchaser: The Grove Corporation
598 Asylum Avenue
Hartford, Connecticut 06105
Attention: Brian Navarro
Tel: (860) 246-1126
Fax: (860) 947-6960
with a copy to: Rogin, Nassau, Caplan, Lassman & Hirtle
CityPlace I, 22nd Floor
185 Asylum Street
Hartford, Connecticut 06103-3460
Attention: Peter Sorokin
Tel: (860) 278-7480
Fax: (860) 278-2179
If to Title
Company: Chicago Title Insurance Company
7616 LBJ Freeway, Suite 300
Dallas, Texas 75251
Attention: Ellen Schwab
Tel: (972) 663-0414
Fax: (972) 404-8731
10.2 Real Estate Commissions. Except for Cushman and Wakefield,
which Purchaser agrees to pay a two percent (2%) commission upon consummation of
this transaction, neither Seller nor Purchaser has authorized any broker or
finder to act on Purchaser's behalf in connection with the sale and purchase
hereunder and neither Seller nor Purchaser has dealt with any broker or finder
purporting to act on behalf of any other party. Purchaser agrees to indemnify
and hold harmless Seller from and against any and all claims, losses, damages,
costs or expenses of any kind or character arising out of or resulting from any
agreement, arrangement or understanding alleged to have been made by Purchaser
or on Purchaser's behalf with any broker or finder in connection with this
Agreement or the transaction contemplated hereby. Seller agrees to indemnify and
hold harmless Purchaser from and against any and all claims, losses, damages,
costs or expenses of any kind or character arising out of or resulting from any
agreement, arrangement or understanding alleged to have been made by Seller or
on Seller's behalf with any broker or finder in connection with this Agreement
or the transaction contemplated hereby. Notwithstanding anything to the contrary
contained herein, this Section 10.2 shall survive the Closing or any earlier
termination of this Agreement.
10.3 Entire Agreement. This Agreement embodies the entire agreement
between the parties relative to the subject matter hereof, and there are no oral
or written agreements between the parties, nor any representations made by
either party relative to the subject matter hereof, which are not expressly set
forth herein.
10.4 Amendment. This Agreement may be amended only by a written instrument
executed by the party or parties to be bound thereby.
10.5 Headings. The captions and headings used in this Agreement are
for convenience only and do not in any way limit, amplify, or otherwise modify
the provisions of this Agreement.
10.6 Time of Essence. Time is of the essence of this Agreement;
however, if the final date of any period which is set out in any provision of
this Agreement falls on a Saturday, Sunday or legal holiday under the laws of
the United States or the Commonwealth of Massachusetts, then, in such event, the
time of such period shall be extended to the next day which is not a Saturday,
Sunday or legal holiday.
10.7 Governing Law. This Agreement shall be governed by the laws of the
Commonwealth of Massachusetts and the laws of the United States pertaining to
transactions in such State.
10.8 Successors and Assigns; Assignment. This Agreement shall bind
and inure to the benefit of Seller and Purchaser and their respective heirs,
executors, administrators, personal and legal representatives, successors and
permitted assigns. Purchaser shall not assign Purchaser's rights under this
Agreement without the prior written consent of Seller, which consent may be
withheld absolutely; provided, however, Purchaser shall be entitled to assign
its interest in this Agreement to an entity in which either the Grove Property
Trust or Brian Navarro holds a principal ownership interest. In the event Seller
consents to such assignment, Purchaser and such assignee shall execute and
deliver an Assignment of Purchase and Sale Agreement in the form attached hereto
as Exhibit F. Any subsequent assignment may be made only with the prior written
consent of Seller. No assignment of Purchaser's rights hereunder shall relieve
Purchaser of its liabilities under this Agreement. This Agreement is solely for
the benefit of Seller and Purchaser; there are no third party beneficiaries
hereof. Any assignment of this Agreement in violation of the foregoing
provisions shall be null and void.
10.9 Invalid Provision. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under present or future laws, such
provision shall be fully severable; this Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part of this Agreement; and, the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by
such illegal, invalid, or unenforceable provision or by its severance from this
Agreement.
10.10 Attorneys' Fees. In the event it becomes necessary for either
party hereto to file suit to enforce this Agreement or any provision contained
herein, the party prevailing in such suit shall be entitled to recover, in
addition to all other remedies or damages, as provided herein, reasonable
attorneys' fees incurred in such suit.
10.11 Multiple Counterparts. This Agreement may be executed in a
number of identical counterparts which, taken together, shall constitute
collectively one (1) agreement; in making proof of this Agreement, it shall not
be necessary to produce or account for more than one such counterpart with each
party's signature.
10.12 Expiration. The execution of this Agreement by Purchaser and
the delivery hereof to Seller shall constitute an offer which shall be
automatically withdrawn, revoked and terminated unless Seller accepts the same
by executing this Agreement and delivering one fully executed counterpart hereof
to the Title Company prior to 4:00 p.m. Central Standard Time the 5th day of
December, 1997.
10.13 Effective Date. As used herein the term "Effective Date"
shall mean the first date the Title Company is in receipt of both this Agreement
executed by Purchaser and Seller (whether in counterparts or not) and the
Earnest Money.
10.14 Exhibits. The following exhibits are attached to this
Agreement and are incorporated into this Agreement by this reference and made a
part hereof for all purposes:
(a) Exhibit A, the legal description of the Land.
(b) Exhibit B, the form of the Deed.
(c) Exhibit C, the form of the Assignment and Assumption of
Personal Property,Service Contracts, Warranties and Leases.
(d) Exhibit D, the form of ACM Notice.
(e) Exhibit E, the form of the Taxpayer I.D. Certification.
(f) Exhibit F, the form of Assignment of Purchase and Sale Agreement.
(g) Exhibit G, the form of Lead Paint Notice.
10.15 No Recordation. Seller and Purchaser hereby acknowledge that
neither this Agreement nor any memorandum or affidavit thereof shall be recorded
of public record in Middlesex County, Massachusetts or any other county. Should
Purchaser ever record or attempt to record this Agreement, or a memorandum or
affidavit thereof, or any other similar document, then, notwithstanding anything
herein to the contrary, said recordation or attempt at recordation shall
constitute a default by Purchaser hereunder, and, in addition to the other
remedies provided for herein, Seller shall have the express right to terminate
this Agreement by filing a notice of said termination in the county in which the
Land is located.
10.16 Merger Provision. Except as otherwise expressly provided
herein, any and all rights of action of Purchaser for any breach by Seller of
any representation, warranty or covenant contained in this Agreement shall merge
with the Deed and other instruments executed at Closing, shall terminate at
Closing and shall not survive Closing.
10.17 Jury Waiver. PURCHASER AND SELLER DO HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THEIR RIGHT TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, OR UNDER OR IN CONNECTION WITH
THIS AGREEMENT, THE DOCUMENTS DELIVERED BY PURCHASER AT CLOSING OR SELLER AT
CLOSING, OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ANY ACTIONS OF EITHER PARTY ARISING OUT OF OR RELATED IN
ANY MANNER WITH THIS AGREEMENT OR THE PROPERTY (INCLUDING WITHOUT LIMITATION,
ANY ACTION TO RESCIND OR CANCEL THIS AGREEMENT AND ANY CLAIMS OR DEFENSES
ASSERTING THAT THIS AGREEMENT WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR
VOIDABLE). THIS WAIVER IS A MATERIAL INDUCEMENT FOR SELLER TO ENTER INTO AND
ACCEPT THIS AGREEMENT AND THE DOCUMENTS DELIVERED BY PURCHASER AT CLOSING AND
SHALL SURVIVE THE CLOSING OF TERMINATION OF THIS AGREEMENT.
11.
Title V Inspection
11.1 Title V Inspection. The Purchaser acknowledges that a Title V
Inspection pursuant to Section 15.301 of Title V of 310 CMR ss. 15.000, ss. 314
CMR 3,4, 5 and 6, has been performed with respect to the Property, and Purchaser
agrees to undertake the obligations, if any, required by said section of Title V
of the owner of the Property, including, but not limited to, upgrading the
current septic and/or sewage system currently in use with respect to the
Property. Purchaser acknowledges that Seller is also delivering the Title V
report to the appropriate governmental authorities. Purchaser agrees to
indemnify and hold Seller harmless from and against any losses, claims, costs
and expenses (including reasonable attorneys' fees) incurred by Seller arising
out of Purchaser's failure to comply with either this section or Massachusetts
laws relating to Title V. The obligations and indemnities contained in this
Section 11 shall survive the Closing indefinitely.
12.
Title Company
12.1 Investment of Earnest Money. Title Company shall hold the
Earnest Money in an interest-bearing account at a banking institution with which
Title Company has an established banking relationship as directed by the
Purchaser and shall invest the Earnest Money in such accounts as the Purchaser
and Seller shall from time to time direct or approve. Title Company shall
promptly advise Seller and Purchaser if the Earnest Money is not received by
Title Company in a timely fashion.
12.2 Payment at Closing. If the Closing takes place under this
Agreement, Title Company shall deliver the Earnest Money to, or upon the
instructions of, Seller on the Closing Date.
12.3 Payment of Earnest Money. Upon the receipt of written
certification from the Seller claiming the Earnest Money pursuant to the
provisions of this Agreement, Title Company shall promptly forward a copy
thereof to the Purchaser and, unless Purchaser within two (2) business days of
receipt thereof notifies Title Company of any objection to such requested
disbursement of the Earnest Money, Title Company shall disburse the Earnest
Money to Seller and shall thereupon be released and discharged from any further
duty or obligation hereunder. Purchaser acknowledges that, in the event
Purchaser shall object to the transfer of the Earnest Money to Seller, Title
Company shall either retain said Earnest Money or bring an appropriate action or
proceeding for leave to deposit the Earnest Money and Additional Deposit, if
any, in a court of competent jurisdiction pending such determination, and Title
Company shall have no further obligations hereunder. Title Company shall have no
responsibility or obligation with respect to the Additional Earnest Money.
12.4 Exculpation of Title Company. It is agreed that the duties of
Title Company are herein specifically provided and are purely ministerial in
nature, and that Title Company shall incur no liability whatsoever except for
its willful misconduct or gross negligence so long as Title Company is acting in
good faith. Seller and Purchaser do each hereby release Title Company from any
liability for any error of judgment or for any act done or omitted to be done by
Title Company in the good faith performance of its duties hereunder and do each
hereby indemnify Title Company against, and agree to hold, save, and defend
Title Company harmless from, any costs, liabilities, and expenses incurred by
Title Company in serving as Title Company hereunder and in faithfully
discharging its duties and obligations hereunder.
12.5 Stakeholder. Title Company is acting as a stakeholder only
with respect to the Earnest Money. If there is any dispute as to whether Title
Company is obligated to deliver the Earnest Money or as to whom the Earnest
Money is to be delivered, Title Company may refuse to make any delivery and may
continue to hold the Earnest Money until receipt by Title Company of an
authorization in writing, signed by Seller and Purchaser, directing the
disposition of the Earnest Money. In the absence of such written authorization,
Title Company shall hold the Earnest Money until a final determination of the
rights of the parties in an appropriate proceeding and may bring an appropriate
action or proceeding for leave to deposit the Earnest Money in a court of
competent jurisdiction pending such determination. Title Company shall be
reimbursed for all costs and expenses of such action or proceeding, including,
without limitation, reasonable attorneys' fees and disbursements, by the party
determined not to be entitled to the Earnest Money. Upon making delivery of the
Earnest Money in any of the manners herein provided, Title Company shall have no
further liability or obligation hereunder.
12.6 Interest. All interest and other income earned on the Earnest
Money deposited with Title Company shall inure to the benefit of Purchaser.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the date set forth below.
PURCHASER:
Date of Execution THE GROVE CORPORATION,
by Purchaser:
11/26/97 a Delaware Corporation
- ---------------------------
By: /s/Brian Navarro
--------------------
Brian Navarro, Vice President
SELLER: PROPERTIES II, INC.,
a Delaware Corporation
Date of Execution
by: Seller:/s/Joe Elsener
-------------------------
Name: Mr. Joe Elsener
Title:VP
The undersigned Title Company hereby acknowledges receipt of the Earnest Money
and a copy of this Agreement, and agrees to hold and dispose of the Earnest
Money in accordance with the provisions of this Agreement.
Date of Execution by
Title Company: CHICAGO TITLE INSURANCE COMPANY
12/1/97 By:/s/
Authorized Officer
<PAGE>
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
SOVEREIGN GROUP 1984-II
AS SELLER
AND
GROVE CORPORATION
AS PURCHASER
Ribbon Mill Apartments, Manchester, CT
<PAGE>
TABLE OF CONTENTS
1. Agreement to Purchase and Sell.................................. 1
2. Purchase Price; Deposits........................................ 2
3. Closing Date.................................................... 2
4. Property Inspection Contingency................................. 4
5. Title Commitment and Survey..................................... 6
6. Condemnation.................................................... 7
7. Fire or Other Casualty.......................................... 7
.
8. Seller's Covenants, Representations and Warranties .............. 8
9. Purchaser's Representations and Warranties ..................... 10
10. Brokerage Commissions........................................... 10
11. Seller's Closing Deliveries..................................... 11
12. Default......................................................... 12
13. Pro-rations, Closing Costs and Adjustments ..................... 13
14. Notices......................................................... 14
15. Miscellaneous................................................... 15
16. Duties and Responsibilities of Escrow Agent .................... 16
Exhibit A Description of Land
Exhibit B Rent Roll
Exhibit C Description of Existing Note, Mortgage and Foreclosure Action
Exhibit D Service, Supply and Maintenance agreements
<PAGE>
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made as of
November 12, 1997 (the "Effective Date"), by and SOVEREIGN GROUP 1984-II, a
Connecticut partnership ("Sovereign"), with a mailing address at c/o Richmond
Realty, 149 Chapel Road, Manchester CT 06040 Attention: David Harding ("Seller")
and GROVE CORPORATION, a Connecticut corporation, with a mailing address at 598
Asylum Avenue, Hartford CT 06105 Attention: Mr. Brian Navarro ("Purchaser").
R E C I T A L S:
WHEREAS, Sovereign is the fee simple owner of that certain real and
personal property located in the Town of Manchester, Hartford County,
Connecticut with a mailing address of 150 Pine Street, Manchester, CT 06040,
commonly known as the Ribbon Mill apartment complex containing 104 residential
units (the "Property"). Subject to the terms, provisions and conditions of this
Agreement, Purchaser is willing to acquire and Seller is willing to sell the
Property.
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. 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 fee interests of Seller
in the parcel of land more particularly described on Exhibit A attached hereto,
together with (i) all buildings and other improvements situated thereon and
known as Ribbon Mill apartment complex, (ii) all easements, rights of way,
reservations, privileges, appurtenances, and other estates and rights of Seller
pertaining to such land and buildings, (iii) 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 land or
buildings, or used in connection therewith (collectively, the "Personal
Property"), (iv) all right, title and interest of Seller, if any, in and to the
trade name of the buildings (v) 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, (vi) all right, title and interest of Seller under all
leases, licenses or other occupancy agreements and tenancies affecting said land
and buildings, and (vii) all right, title and interest of Seller in and to all
warranties and guaranties affecting the buildings and the Personal Property (the
land, together with all of the foregoing items listed in clauses (i)-(vii) above
being hereinafter collectively referred to herein as the "Property" or the
"Properties").
2. Purchase Price; Deposits.
(a) Purchaser agrees to pay an aggregate purchase price for
the Property (the "Purchase Price") equal to the lesser of (i) Three Million
Eight Hundred Thirteen Thousand and No/100 Dollars ($3,813,000.00); or (ii) if
Seller enters into the Settlement Agreement, the sum of (A) Five Hundred Eight
Thousand Four Hundred and No/100 Dollars ($508,400.00) and (B) the Settlement
Amount (defined below), or (iii) if the Purchaser enters into the Loan Sale
Agreement, Four Hundred Forty Four Thousand Eight Hundred Fifty and No/100
Dollars ($444,850.00) . The Purchase Price, plus or minus pro-rations, credits
and adjustments, if any, as hereinafter provided, shall be payable as follows:
(i) Fifty Seven Thousand One Hundred Ninety-Five and No/100
Dollars ($57,195.00) (the "Initial Deposit") shall be deposited by
Purchaser in escrow with Commonwealth Land Title Insurance Company
(sometimes hereinafter called the "Title Company" or the "Escrow
Agent") upon the full execution and delivery of this Agreement.
(ii) Within five (5) business days after the date, if any,
that Purchaser receives notice from Seller that Seller has executed and
delivered a binding settlement agreement with the Existing Holder
(defined below) (such agreement, the "Settlement Agreement") regarding
the settlement of the Foreclosure (defined below) and the satisfaction
of the Existing Mortgage (defined below) and is ready and able to
consummate the Closing, such notice to be accompanied by a true and
correct copy of the Settlement Agreement as certified by an authorized
officer of Seller (such notice and supporting documentation, the
"Settlement Notice"), and provided that the Inspection Period
Expiration Date has occurred and Purchaser has not exercised any right
to terminate this Agreement pursuant to Section 4(c), Purchaser shall
deliver in escrow with Escrow Agent the sum of Fifty Seven Thousand One
Hundred Ninety-Five and No/100 Dollars ($57,195.00)(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, if any, 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, 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.
(a) Subject to subsection (b) and (c) below, the transaction
contemplated by this Agreement shall be closed (the "Closing") at a location in
the State of Connecticut as designated by Purchaser's mortgagee, if any, or as
otherwise mutually agreed by Purchaser and Seller on the date (the "Closing
Date") which is ten (10) days after Purchaser receives the Settlement Notice,
provided, however, in the event that Seller fails to obtain the Settlement
Agreement and Purchaser elects to directly acquire the Existing Mortgage as
provided hereinbelow, the transaction contemplated hereby shall be closed on or
about the date which is thirty (30) days after the execution and delivery of the
Loan Sale Agreement (defined below) provided, further, that if the purchase
agreement in respect of the Briar/ Hilltop Properties (defined below) is in full
force and effect and the "Closing Date" (as defined in such purchase agreement)
is extended in accordance with the terms of such agreement, then the Closing
Date hereunder shall be co-extended to such "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.
Notwithstanding anything to the contrary contained in this Agreement, Purchaser
and Seller shall each have the one-time right to extend the closing hereunder
for a period of up to thirty (30) days by written notice of such election to the
other party.
(b) Notwithstanding anything to the contrary contained herein,
if Seller fails to deliver the Settlement Notice and Settlement Agreement to
Purchaser on or before February 1, 1998 (such date, the "Initial Outside Date"),
then, in such event, Purchaser, at Purchaser's option exercised in its sole and
absolute discretion by written notice to Seller on or before February 10, 1998,
may (i) terminate this Agreement by written notice to Seller, in which case the
Deposit shall be returned to Purchaser, or (ii) elect to directly acquire the
Existing Mortgage and the indebtedness secured thereby. In the event Purchaser
elects to directly acquire the Existing Mortgage and the indebtedness secured
thereby, Purchaser shall be afforded a period of sixty (60) days after the
Initial Outside Date to enter into a Loan Sale Agreement with the Existing
Holder on terms and conditions acceptable to Purchaser in its sole discretion.
If Purchaser fails to enter into a binding Loan Sale Agreement on or before the
expiration of such sixty (60) day period, then this Agreement shall
automatically terminate, whereupon Escrow Agent shall promptly return the
Deposit to Purchaser and this Agreement shall be of no further force or effect.
Seller agrees to cooperate as reasonably required by Purchaser in connection
with the aforesaid effort and agrees to execute, or cause to be executed, such
documents and instruments as are reasonably requested by Purchaser to facilitate
the transactions contemplated hereby, including, without limitation, the
execution and delivery of a general release by Seller for the benefit of the
Existing Holder releasing such holder from any and all claims of Seller arising
from or related to the Existing Indebtedness.
If, for any reason other than the default of Purchaser under the Loan
Sale Agreement, the Existing Holder is not willing or able or shall fail to
assign, transfer and convey all of its interest in the Existing Mortgage to
Purchaser on the Closing Date, then, notwithstanding anything to the contrary
contained in this Agreement, Purchaser shall have the right to extend the
closing hereunder for a period of up to thirty (30) days by written notice of
such election to Seller. In the event that the Mortgage Holder is not willing or
able or shall fail to assign, transfer and convey all of its interest in the
Existing Mortgage to Purchaser on or before the expiration of such thirty day
period, Purchaser may terminate this Agreement by giving Seller written notice
of its election to terminate this Agreement, whereupon Escrow Agent shall
promptly return the Deposit to Purchaser.
(c) In the event that Seller has entered into the Settlement
Agreement, then, on or before the Closing Date, Seller shall (i) record a
satisfaction and discharge of the Existing Mortgage, or shall cause a
satisfaction and discharge to be deposited with the Title Company with an
irrevocable instruction by the holder of the Existing Indebtedness to release
and record the same upon receipt of the full amount provided under the
Settlement Agreement and (ii) shall deposit such other instruments and documents
as are required by the Title Company for purposes of issuing its ALTA Owner's
Policy of Title Insurance naming Purchaser, upon consummation of the
transactions contemplated hereby, as the fee simple owner of the Property
without any exception for the Existing Mortgage, the Foreclosure, the
receivership affecting the Property or any and all other actions or proceedings
of the Existing Holder in respect of the Existing Indebtedness.
(d) For purposes of this Agreement, the following terms
shall have the following meanings:
"Existing Holder" shall mean Ocwen Federal Bank, FSB.
"Existing Indebtedness" shall mean the indebtedness evidenced
by the Existing Note and secured by the Existing Mortgage.
"Existing Mortgage" shall mean that certain mortgage more
particularly described on Exhibit C secured by the Property.
"Existing Note" shall mean that certain note more particularly
described on Exhibit C evidencing the Existing Indebtedness payable by the
Seller to the Existing Holder.
"Foreclosure" shall mean the foreclosure proceedings in
respect of the Existing Mortgage more particularly described on Exhibit C.
"Loan Sale Agreement" shall mean a purchase and sale agreement
by and between Purchaser and the Existing Holder with respect to the purchase by
Purchaser of the Existing Note and Existing Mortgage on terms and conditions
acceptable to Purchaser in its sole and absolute discretion.
"Settlement Amount" shall mean the amount paid by Seller to
the Existing Holder in full satisfaction of the Existing Indebtedness, provided,
however, that if such amount is in excess of $3,304,600.00, then for purposes of
this Agreement the term "Settlement Amount" shall be deemed to mean
$3,304,600.00.
(d) Seller confirms and agrees that Purchaser's obligation to
consummate the transactions contemplated by this Agreement shall be conditioned
and contingent upon the prior or simultaneous acquisition by Purchaser (or
Purchaser's permitted assignee) of the properties known as the Briar Knoll
Apartments, Vernon, Connecticut and the Hilltop Apartments, Norwich, Connecticut
(collectively, the "Briar/Hilltop Properties"). If, for any reason, Purchaser is
unable to acquire Briar/Hilltop Properties, then, in such event, Purchaser may,
at Purchaser's sole discretion, elect to terminate this Agreement or waive such
condition and proceed to consummate the transaction contemplated hereby. If
Purchaser elects to terminate this Agreement based on such event, Purchaser
shall be entitled to the return of the Deposit.
4. Property Inspection Contingency.
(a) For a period of twenty-one (21) days after November 17, 1997 (such
period, the "Inspection Period"; the last day of such period, December 8, 1997,
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. The foregoing studies,
inspections and tests shall be conducted at the sole cost and expense of
Purchaser. Notwithstanding the foregoing, Seller shall be responsible for fifty
percent (50%) of Purchaser's out-of-pocket costs in the event that (a) Seller
shall fail to procure the Settlement Agreement, or (b) Purchaser shall elect to
terminate this Agreement under the provisions of Paragraph 5(e) below; provided
that in no event shall Seller's liability for such costs exceed Five Thousand
Dollars ($5,000.00). Such reimbursement by Seller, if applicable, shall be made
within five (5) business days after Purchaser provides Seller with written
evidence of such out-of-pocket costs. The aforesaid liability of Seller, if any,
is cumulative with the liability, if any, of Neil Ellis pursuant to that certain
letter executed by Neil Ellis for the benefit of Purchaser.
(b) In conducting the studies, inspections and tests contemplated hereby,
Purchaser (i) shall 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) shall 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. To the extent
that the scope of work in conducting such studies, inspections and tests entails
physically intrusive work, Purchaser shall provide Seller with evidence of
liability insurance naming Seller as an additional insured for each consultant
or contractor performing such physically intrusive work on the Property.
(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 physical condition of 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, a material adverse change in the condition of the Property has
occurred 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 Commitment and Survey.
(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 an amount determined by
Purchaser, 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 a
Commitment shall disclose interests, encumbrances or liens of definite or
ascertainable amounts which may be removed by the payment of money
("Ascertainable Interests"), 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 (other than in the ordinary course of business) without first obtaining
the prior written consent of Purchaser thereto, such consent not to be
unreasonably withheld by Purchaser, 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 8(i) 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.
Notwithstanding the foregoing, should (i) such notice, order, or requirement
necessitate the payment of Fifty Thousand Dollars ($50,000) or more by Seller,
and (ii) Seller in good faith disputes the amount of such notice, order, or
requirement, then Seller shall, prior to the Inspection Period Expiration Date,
notify Purchaser of its election to either (a) terminate this Agreement, in
which event all Deposits shall immediately be returned to Purchaser and, except
as otherwise provided in Section 4(a), this Agreement shall be of no further
force or effect; or (b) clear such item prior to or on the Closing Date. In the
event that Seller elects to terminate this Agreement in accordance with this
subsection (d), Purchaser shall then have the right to nullify Seller's
termination notice by written notice, given to Seller within five (5) business
days of Seller's election, declaring that Purchaser will assume responsibility
for all amounts over Fifty Thousand Dollars ($50,000) to be paid in connection
with such disputed notice, order, or requirement. In such event, the Agreement
shall be reinstated and continue in full force and effect.
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
Purchaser shall be deemed to have elected to proceed with the Closing with an
equitable reduction or adjustment to the Purchase Price by reason of such
casualty. Alternatively, so long as Seller has maintained replacement cost
insurance sufficient for purposes of effectuating the aforesaid equitable
adjustment, Seller shall assign to Purchaser, at the Closing, the proceeds of
any such insurance policy(ies) payable to Seller by reason of such fire or other
casualty. Seller agrees to 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.
8. Seller's Covenants, Representations and Warranties.
Seller covenants, represents and warrants to Purchaser as follows:
(a) Sovereign (i) is a partnership, duly organized, validly existing
and in good standing under the laws of the State of Connecticut; (ii) has the
authority and power to enter this Agreement and to consummate the transactions
contemplated hereby; and (iii) subject to obtaining the consent of the limited
partners of Sovereign, 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 other than as disclosed herein.
(d) Seller has not received and, to the best of Seller's knowledge,
there are no notices, orders, decrees or judgments issued 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. Except for the Foreclosure, 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) Except for the Foreclosure, 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) 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.
Without limiting the generality of the preceding sentence, there is no pending
assessment made by the Town of Manchester or any other authority with respect to
the repair, maintenance or expansion of any water or sewage systems that may be
located in any public right of way adjacent to the Property, or for any other
public improvements or betterments of any type which would or could give rise to
an assessment against the Property.
(g) Attached hereto as Exhibit B 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; or (iii) lease any units
at the Property for a term in excess of twelve (12) months or at less than fair
market rental 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) Seller has received no notice that there are 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) shall 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 condition, 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, as of the Closing, there will
not be any service, supply or maintenance agreements with respect to the
Property or any portion thereof, other than as listed on Exhibit D attached
hereto, 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 and except for the possible presence
of lead paint on the Property, Seller, to its 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, allowed to
seep, leak, escape or leech, or 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 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).
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 one year. 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's Representations and Warranties. Purchaser represents and
warrants to Seller that Purchaser is a partnership duly organized, validly
existing and in good standing under the laws of the State of Connecticut, 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's Closing Deliveries. On the Closing Date, Seller shall
deliver to Purchaser the following documents and instruments with respect to its
Property (collectively, "Seller's Closing Deliveries"), duly executed by the
applicable 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
(with the exception of items (a), (b), and (c) below, which shall be prepared by
Purchaser):
(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 for the Property conveying the
Personal Property.
(c) an Assignment and Assumption of Leases for the Property,
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 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,
certified as true, correct and complete by 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 each state of Seller's incorporation for 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 from Seller 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 have been terminated on or before the Closing Date, and by which 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) if requested by Purchaser, a general release for the
benefit of the Existing Holder releasing Existing Holder from any and all claims
that Seller may have against Existing Holder with respect to the Existing
Mortgage.
(p) evidence of all necessary approvals by Seller's limited partners.
(q) 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) Purchaser acknowledges that any failure of Purchaser to close hereunder
will be highly injurious to Seller and therefore if Purchaser shall fail to
close for any reason other than the default of Seller hereunder or as otherwise
permitted in accordance with the terms of this Agreement, then, in such case,
Seller may, at Seller's election and in lieu of all other remedies, (i) enforce
specific performance by Purchaser of the terms of this Agreement , or,
alternatively, (ii) terminate this Agreement, retain the Deposit and, to the
extent that Purchaser shall incur actual damages in an amount greater than the
Deposit retained by Seller as aforesaid, Seller shall be entitled to recover
such excess amount from Purchaser, provided, however, that the maximum
obligation of Purchaser in respect of any damages of Seller hereunder, including
the Deposit, shall be $444,850.00.
(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 Seller's default,
Purchaser, at Purchaser's election made in its sole and absolute discretion, may
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. 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) If on the Closing Date any tenant is in arrears in the payment of
rent or has not paid the rent payable by it for the month in which the Closing
occurs (whether or not it is in arrears for such month on the Closing Date), any
rents received by Purchaser or Seller from such tenant after the Closing Date
shall be paid to Purchaser. Purchaser shall use commercially reasonable efforts
(not including eviction) to collect any rents which relate solely to a rental
period prior to the Closing Date. If such amounts are recovered by Purchaser,
Seller shall be paid the amount in respect of past due amounts recovered net of
reasonable attorney's fees and costs of collection incurred by Purchaser. With
respect to any rents recovered by Purchaser from any tenant after the Closing
Date, Purchaser may apply such rents first to any rents owed for the period
after the Closing Date and any amount received in excess of such rentals shall
be payable to Seller for application to any arrearage arising prior to the
Closing Date as hereinafter defined. . Notwithstanding the foregoing, if as of
the expiration of the sixth full calendar month following the Closing Date, any
tenant that was, as of the Closing Date, in arrears less than 3 months in the
payment of rent under its lease has, from and after the Closing Date, made
monthly payments of rent in accordance with the lease for such 6 month period
and, in addition, has not been served with a notice to quit by Purchaser, then,
with respect to such tenants only, Purchaser shall, within ten days after the
expiration of such six month period, remit to Seller an amount equal to the
aggregate arrearages of such tenant (less any amounts previously received by
Seller in respect of such arrearages) Seller Seller shall not pursue collection
of any rentals owed by tenants as of the Closing Date. The provisions of this
Paragraph shall survive the closing.
(d) Purchaser 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.
(e) 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. Notwithstanding the foregoing, if as of the
expiration of the sixth full calendar month following the Closing Date, any
tenant that was, as of the Closing Date, in arrears less than 3 months in the
payment of rent under its lease has, from and after the Closing Date, made
monthly payments of rent in accordance with the lease for such 6 month period
and, in addition, has not been served with a notice to quit by Purchaser, then,
with respect to such tenants only, Purchaser shall, within ten days after the
expiration of such six month period, remit to Seller an amount equal to the
aggregate arrearages of such tenant (less any amounts previously received by
Seller in respect of such arrearages) Any items not specifically listed herein
but shall be adjusted as aforesaid at Closing. This provision shall survive the
Closing.
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: Sovereign Group 1984-II
149 Chapel Road
Manchester, CT 06040
Attention: David Harding
with a copy to: Jeffrey Carlson,
Esq. Richmond Realty
149 Chapel Road
Manchester, CT 06040
If to Purchaser: Grove Corporation
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.
Escrow Agent: Commonwealth Land Title Insurance Company
111 Founders Plaza, 17th Floor
East Hartford, CT 06108
Attn: George Browne, 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 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 affiliated entity 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 between
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
the Town of Vernon, the City of Norwich and the Town of Manchester .
(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) SurvivalSurvival. 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 SellerKnowledge 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 actual
knowledge of Seller after inquiry and investigation by Seller of its officers
and representative having responsibility for the operation and management of 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 filed within
two (2) years of the Closing 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, or (ii) the failure by
Seller to pay, perform or discharge when due any liabilities, agreements,
Commitment or obligations not specifically assumed by Purchaser pursuant to this
Agreement. The provisions of this subsection shall survive the Closing. The
liability of Seller with respect to the foregoing indemnity shall be joint and
several.
(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; or (ii) 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.
(p) Confidentiality. Seller and Purchaser agree that no party
shall disclose or publicize the terms of this Agreement to any third party
without the prior written consent of the other parties; provided, however, that
the terms hereof may be disclosed without the requirement of any such consent to
those persons assisting Purchaser in connection with this transaction, provided,
further, that nothing herein shall prevent the disclosure, publication or use of
this Agreement or any terms hereof that is required to be disclosed in
connection with any administrative, legislative or judicial proceeding or
pursuant to the order of any administrative agency or tribunal or any court of
competent jurisdiction.
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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE FOLLOWS]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
SELLER:
SOVEREIGN GROUP 1984-II
By: Its General Partner Parker Street Corp
------------------------------------------
By: /s/Neil H. Ellis
--------------------
Print Name: Neil H. Ellis
Its: President
PURCHASER:
GROVE CORPORATION
By:/s/Brian Navarro
-------------------
Print Name: Brian Navarro
Its: President
ESCROW AGENT:
COMMONWEALTH LAND TITLE INSURANCE COMPANY
By: /s/George Browne
--------------------
George Browne
Its Vice President
<PAGE>
EXHIBIT A
DESCRIPTION OF LAND
<PAGE>
EXHIBIT B
RENT ROLL
<PAGE>
EXHIBIT C
DESCRIPTION OF EXISTING NOTE, MORTGAGE AND FORECLOSURE ACTION
<PAGE>
EXHIBIT D
SERVICE, SUPPLY AND MAINTENANCE AGREEMENTS
<PAGE>
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
BRIAR KNOLL ASSOCIATES
and
HIGH RIDGE ASSOCIATES
AS SELLER
AND
GROVE CORPORATION
AS PURCHASER
Briar Knoll Apartments, Vernon, CT
Hilltop Apartments, Norwich, CT
<PAGE>
TABLE OF CONTENTS
1. Agreement to Purchase and Sell; Simultaneous Acquisition........ 1
2. Purchase Price; Deposits........................................ 2
3. Closing Date.................................................... 3
4. Property Inspection Contingency................................. 5
5. Title Commitment and Survey..................................... 6
6. Condemnation.................................................... 8
7. Fire or Other Casualty.......................................... 8
.
8. Seller's Covenants, Representations and Warranties .............. 8
9. Purchaser's Representations and Warranties ..................... 11
10. Brokerage Commissions........................................... 11
11. Seller's Closing Deliveries..................................... 11
12. Default......................................................... 13
13. Pro-rations, Closing Costs and Adjustments ..................... 14
14. Notices......................................................... 15
15. Miscellaneous................................................... 16
16. Duties and Responsibilities of Escrow Agent .................... 18
Exhibit A-1 Description of Land-Briar Knoll
Exhibit A-2 Description of Land-Highridge
Exhibit B-1 Rent Roll-Briar Knoll
Exhibit B-2 Rent Roll-Highridge
Exhibit C Allocation of Purchase Price
Exhibit D Description of Existing Notes, Mortgages and Foreclosure Action
Exhibit E Service, Supply and Maintenance agreements
Exhibit F PBGC Lien
<PAGE>
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made as of
November 12, 1997 (the "Effective Date"), by and between BRIAR KNOLL ASSOCIATES,
a Connecticut partnership ("Briar"), and HIGH RIDGE ASSOCIATES, a Connecticut
partnership ("Highridge"), each with a mailing address at c/o Richmond Realty,
149 Chapel Road, Manchester CT 06040 Attention: David Harding (Briar and
Highridge are hereinafter sometimes individually and collectively referred to as
"Seller") and GROVE CORPORATION, a Connecticut corporation, with a mailing
address at 598 Asylum Avenue, Hartford CT 06105 Attention: Mr. Brian Navarro
("Purchaser").
R E C I T A L S:
A. Briar is the fee simple owner of that certain real and personal
property located at Route 83 and Thrall Road in the Town of Vernon, Tolland
County, Connecticut with a mailing address of 401-89 Talcottville Road, Vernon,
CT 06066 commonly known as the Briar Knoll apartment complex containing 150
residential units (the "Briar Knoll Property").
B. Highridge is the fee simple owner of that certain real and personal
property located in the City of Norwich, New London County, Connecticut with a
mailing address of 4B Plumtree Drive, Norwich, CT 06360, commonly known as the
Hilltop apartment complex containing 120 residential units (the "Highridge
Property").
C. 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; Simultaneous Acquisition.
(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 respective fee interests of each Seller in the
two parcels of land more particularly described on Exhibit A-1, and Exhibit A-2
attached hereto, together with (i) all buildings and other improvements situated
thereon and respectively known as the Briar Knoll and Hilltop apartment
complexes, (ii) all easements, rights of way, reservations, privileges,
appurtenances, and other estates and rights of Seller pertaining to such land
and buildings, (iii) 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 land or buildings, or used in
connection therewith (collectively, the "Personal Property"), (iv) all right,
title and interest of Seller, if any, in and to the trade name of the buildings
(v) 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, (vi) all right,
title and interest of Seller under all leases, licenses or other occupancy
agreements and tenancies affecting said land and buildings, and (vii) all right,
title and interest of Seller in and to all warranties and guaranties affecting
the buildings and the Personal Property (the land, together with all of the
foregoing items listed in clauses (i)-(vii) above being hereinafter collectively
referred to herein as the "Property" or the "Properties").
(b) Purchaser and each Seller confirm and agree that the transfers of
the Property contemplated by this Agreement shall be consummated
contemporaneously in order that Purchaser shall simultaneously acquire each
Property. Each Seller confirms and agrees that Purchaser's obligation to
consummate the transactions contemplated by this Agreement shall be conditioned
and contingent upon the simultaneous acquisition of each Property. If, for any
reason (other than Purchaser's default hereunder), either Seller is unable to or
fails to convey its Property, then, in such event, Purchaser may elect to
terminate this Agreement. If Purchaser elects to terminate this Agreement based
on such inability or failure to convey, Purchaser shall, in addition to any and
all other remedies hereunder, be entitled to the return of the Deposit.
2. Purchase Price; Deposits.
(a) Purchaser agrees to pay an aggregate purchase price for
the Property (the "Purchase Price") equal to the lesser of (i) Eleven Million
One Hundred Eighty-Seven Thousand and No/100 Dollars ($11,187,000.00) or (ii) if
Seller enters into the Settlement Agreement, the sum of (A) One Million Four
Hundred Ninety-one Thousand Six Hundred and No/100 Dollars ($1,491,600.00) and
(B) the Settlement Amount (defined below), or (iii) if Purchaser enters into the
Loan Sale Agreement (defined below), One Million Three Hundred Five Thousand One
Hundred Fifty and No/100 Dollars ($1,305,150.00). For conveyance tax and other
closing purposes, the Purchase Price shall be allocated among the Properties as
set forth in Exhibit C attached hereto. The Purchase Price, plus or minus
pro-rations, credits and adjustments, if any, as hereinafter provided, shall be
payable as follows:
(i) One Hundred Sixty Seven Thousand Eight Hundred Five and
No/100 Dollars ($167,805.00) (the "Initial Deposit") shall be deposited
by Purchaser in escrow with an Commonwealth Land Title Insurance
Company (hereinafter sometimes called the "Title Company" or the
"Escrow Agent") upon the full execution and delivery of this Agreement.
(ii) Within five (5) business days after the date, if any,
that Purchaser receives notice from Seller that Seller has executed and
delivered a binding settlement agreement with the Existing Holder
(defined below) (such agreement, the "Settlement Agreement") regarding
the settlement of the Foreclosure (defined below) and the satisfaction
of the Existing Mortgages (defined below), and that Seller has obtained
the PBGC Discharge and is ready and able to consummate the Closing,
such notice to be accompanied by a true and correct copy of the
Settlement Agreement and PBGC Discharge as certified by an authorized
officer of Seller (such notice and supporting documentation, the
"Settlement Notice"), and provided that the Inspection Period
Expiration Date has occurred and Purchaser has not exercised any right
to terminate this Agreement pursuant to Section 4(c), Purchaser shall
deliver in escrow with Escrow Agent the sum of One Hundred Sixty Seven
Thousand Eight Hundred Five and No/100 Dollars ($167,805.00)(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, if any, 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, 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.
(a) Subject to subsection (b) (c) and (d) below, the
transaction contemplated by this Agreement shall be closed (the "Closing") at a
location in the State of Connecticut as designated by Purchaser's mortgagee, if
any, or as otherwise mutually agreed by Purchaser and Seller on the date (the
"Closing Date") which is ten (10) days after Purchaser receives the Settlement
Notice, provided, however, in the event that Seller fails to obtain the
Settlement Agreement and Purchaser elects to directly acquire the Existing
Mortgages as provided hereinbelow, the transaction contemplated hereby shall be
closed on or about the date which is thirty (30) days after the execution and
delivery of the Loan Sale Agreement (defined below). 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.
Notwithstanding anything to the contrary contained in this Agreement, Purchaser
and Seller shall each have the one-time right to extend the closing hereunder
for a period of up to thirty (30) days by written notice of such election to the
other party.
(b) Notwithstanding anything to the contrary contained herein,
if Seller fails to deliver the Settlement Notice and Settlement Agreement to
Purchaser on or before February 1, 1998 (such date, the "Initial Outside Date"),
then, in such event, Purchaser, at Purchaser's option exercised in its sole and
absolute discretion by written notice to Seller on or before February 10, 1998,
may (i) terminate this Agreement by written notice to Seller, in which case the
Deposit shall be returned to Purchaser, or (ii) elect to directly acquire the
Existing Mortgages and the indebtedness secured thereby. In the event Purchaser
elects to directly acquire the Existing Mortgages and the indebtedness secured
thereby, Purchaser shall be afforded a period of sixty (60) days after the
Initial Outside Date to enter into a Loan Sale Agreement with the Existing
Holder on terms and conditions acceptable to Purchaser in its sole discretion.
If Purchaser fails to enter into a binding Loan Sale Agreement on or before the
expiration of such sixty (60) day period, then this Agreement shall
automatically terminate, whereupon Escrow Agent shall promptly return the
Deposit to Purchaser and this Agreement shall be of no further force or effect.
Seller agrees to cooperate as reasonably required by Purchaser in connection
with the aforesaid effort and agrees to execute, or cause to be executed, such
documents and instruments as are reasonably requested by Purchaser to facilitate
the transactions contemplated hereby, including, without limitation, the
execution and delivery of a general release by Seller for the benefit of the
Existing Holder releasing such holder from any and all claims of Seller arising
from or related to the Existing Indebtedness.
If, for any reason other than the default of Purchaser under the Loan
Sale Agreement, the Existing Holder is not willing or able or shall fail to
assign, transfer and convey all of its interest in the Existing Mortgages to
Purchaser on the Closing Date, then, notwithstanding anything to the contrary
contained in this Agreement, Purchaser shall have the right to extend the
closing hereunder for a period of up to thirty (30) days by written notice of
such election to Seller. In the event that the Mortgage Holder is not willing or
able or shall fail to assign, transfer and convey all of its interest in the
Existing Mortgages to Purchaser on or before the expiration of such thirty day
period, Purchaser may terminate this Agreement by giving Seller written notice
of its election to terminate this Agreement, whereupon Escrow Agent shall
promptly return the Deposit to Purchaser.
(c) If either Seller shall default in the performance of any
of its covenants, agreements, conditions or obligations hereunder, and, as
result thereof, the simultaneous closing of the conveyance of the Property shall
be prevented or delayed thereby, and, in such case, Purchaser has elected to
exercise its remedy of specific performance provided hereunder, then, in such
event, the non-defaulting Seller hereby agrees to extend the Closing Date for
that period of time necessary to permit Purchaser to exercise such remedy
against the defaulting Seller, such agreement to extend by the applicable Seller
conditioned upon Purchaser's prompt commencement and diligent pursuit of any
such specific enforcement action against the defaulting Seller.
(d) Notwithstanding anything to the contrary contained herein,
if either (x) Seller has entered into the Settlement Agreement on or before the
Initial Outside Date but has not obtained and recorded the PBGC Discharge as of
the Closing Date or (ii) Seller has not entered into the Settlement Agreement on
or before the Initial Outside Date but Purchaser has elected to directly acquire
the Existing Indebtedness, has entered into a Loan Sale Agreement and as of the
Closing Date Seller has not obtained and recorded the PBGC Discharge, then, in
either such event, the Closing Date hereunder shall at Purchaser's option,
exercised in its sole and absolute discretion, be extended one or more periods
of ninety (90) days, for purposes of affording Seller additional time to obtain
the PBGC Discharge. Purchaser shall furnish notice to Seller of its election to
extend the Closing Date under this subsection (d) within ten days after then
existing Closing Date. If Purchaser elects to extend the Closing Date as
aforesaid, the extended Closing Date shall be the date which is ten (10)
business days after the date that Seller has recorded the PBGC Discharge.
Notwithstanding anything to the contrary contained herein, this Closing Date
following any extension under this subsection (d) shall not extend beyond the
earlier to occur of (i) December 31, 1998 or (ii) the full and complete
termination of the Settlement Agreement or the Loan Sale Agreement, as the case
may be. Seller covenants to exercise reasonably diligent efforts to obtain and
record the PBGC Discharge.
(e) In the event that Seller has entered into the Settlement
Agreement, then, on or before the Closing Date, Seller shall (i) record a
satisfaction and discharge of the Existing Mortgages, or shall cause a
satisfaction and discharge to be deposited with the Title Company with an
irrevocable instruction by the holder of the Existing Indebtedness to release
and record the same upon receipt of the full amount provided under the
Settlement Agreement and (ii) shall deposit such other instruments and documents
as are required by the Title Company for purposes of issuing its ALTA Owner's
Policy of Title Insurance naming Purchaser, upon consummation of the
transactions contemplated hereby, as the fee simple owner of the Property
without any exception for the Existing Mortgages, the Foreclosure, the
receivership affecting the Property or any and all other actions or proceedings
of the Existing Holder in respect of the Existing Indebtedness.
(f) For purposes of this Agreement, the following terms shall have the
following meanings:
"Existing Holder" shall mean Ocwen Federal Bank, FSB.
"Existing Indebtedness" shall mean the indebtedness evidenced
by the Existing Notes and secured by the Existing Mortgages.
"Existing Mortgages" shall mean those certain mortgages more
particularly described on Exhibit D secured by the Property.
"Existing Notes" shall mean those certain notes more
particularly described on Exhibit D evidencing the Existing Indebtedness payable
by the applicable Seller to the Existing Holder.
"Foreclosure" shall mean the foreclosure proceedings in
respect of the Existing Mortgages more particularly described on Exhibit D.
"Loan Sale Agreement" shall mean a purchase and sale agreement
by and between Purchaser and the Existing Holder with respect to the purchase by
Purchaser of the Existing Notes and Existing Mortgages on terms and conditions
acceptable to Purchaser in its sole and absolute discretion.
"Settlement Amount" shall mean the amount paid by Seller to
the Existing Holder in full satisfaction of the Existing Indebtedness, provided,
however, that if such amount is in excess of $9,695,400.00, then for purposes of
this Agreement the term "Settlement Amount" shall be deemed to mean
$9,695,400.00.
4. Property Inspection Contingency.
(a) For a period of twenty-one (21) days after November 17, 1997 (such
period, the "Inspection Period"; the last day of such period, December 8, 1997,
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. The foregoing studies,
inspections and tests shall be conducted at the sole cost and expense of
Purchaser. Notwithstanding the foregoing, Seller shall be responsible for fifty
percent (50%) of Purchaser's out-of-pocket costs in the event that (a) Seller
shall fail to procure the Settlement Agreement, or (b) Purchaser shall elect to
terminate this Agreement under the provisions of Paragraph 5(e) below; provided
that in no event shall Seller's liability for such costs exceed Ten Thousand
Dollars ($10,000.00). Such reimbursement by Seller, if applicable, shall be made
within five (5) business days after Purchaser provides Seller with written
evidence of such out-of-pocket costs. The aforesaid liability of Seller, if any,
is cumulative with the liability, if any, of Neil Ellis pursuant to that certain
letter executed by Neil Ellis for the benefit of Purchaser.
(b) In conducting the studies, inspections and tests contemplated hereby,
Purchaser (i) shall 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) shall 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. To the extent
that the scope of work in conducting such studies, inspections and tests entails
physically intrusive work, Purchaser shall provide Seller with evidence of
liability insurance naming Seller as an additional insured for each consultant
or contractor performing such physically intrusive work on the Property.
(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 physical condition of 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, a material adverse change in the condition of the Property has
occurred 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) title commitments
(the "Commitments") for an Owner's Title Insurance Policy issued by a title
insurance company satisfactory to Purchaser in an amount determined by
Purchaser, covering title to each Property and (ii) a survey of each Property
(the "Surveys"). Purchaser shall have until the expiration of the Inspection
Period to provide written notice to Seller of any matters shown by the
Commitments and Surveys 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 a
Commitment shall disclose interests, encumbrances or liens of definite or
ascertainable amounts (other than the PBGC Lien, as defined below) which may be
removed by the payment of money ("Ascertainable Interests"), 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 (other than in the ordinary course of business) without first obtaining
the prior written consent of Purchaser thereto, such consent not to be
unreasonably withheld by Purchaser, 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 8(i) below. On the Closing Date, Purchaser shall conduct a
search of title for the Property from the date of the Commitments 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, excluding, however, the PBGC Lien (collectively, the
"Violations"), shall be complied with by Seller prior to the Closing Date and
the Property shall be conveyed free thereof. Notwithstanding the foregoing,
should (i) such notice, order, or requirement necessitate the payment of Fifty
Thousand Dollars ($50,000) or more by Seller, and (ii) Seller in good faith
disputes the amount of such notice, order, or requirement, then Seller shall,
prior to the Inspection Period Expiration Date, notify Purchaser of its election
to either (a) terminate this Agreement, in which event all Deposits shall
immediately be returned to Purchaser and, except as otherwise provided in
Section 4(a), this Agreement shall be of no further force or effect; or (b)
clear such item prior to or on the Closing Date. In the event that Seller elects
to terminate this Agreement in accordance with this subsection (d), Purchaser
shall then have the right to nullify Seller's termination notice by written
notice, given to Seller within five (5) business days of Seller's election,
declaring that Purchaser will assume responsibility for all amounts over Fifty
Thousand Dollars ($50,000) to be paid in connection with such disputed notice,
order, or requirement. In such event, the Agreement shall be reinstated and
continue in full force and effect.
(e) Seller has disclosed to Purchaser the existence of a lien
on the Property in favor of the Pension Benefit Guaranty Corporation (the "PBGC
Lien"), a copy of which is attached hereto as Exhibit F. Notwithstanding
anything contained herein to the contrary, if Seller fails to obtain and record
a release, discharge, or other similar instrument fully discharging the PBGC
Lien on or before the Closing Date (the "PBGC Discharge"), Purchaser, at
Purchaser's option, may elect to either (i) consummate the transactions
contemplated hereby, or (ii) terminate this Agreement. If Purchaser elects to so
terminate, all Deposits shall be immediately returned to Purchaser, and except
as otherwise provided in Section 4(a), this Agreement shall have no further
force or effect.
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
Purchaser shall be deemed to have elected to proceed with the Closing with an
equitable reduction or adjustment to the Purchase Price by reason of such
casualty. Alternatively, so long as Seller has maintained replacement cost
insurance sufficient for purposes of effectuating the aforesaid equitable
adjustment, Seller shall assign to Purchaser, at the Closing, the proceeds of
any such insurance policy(ies) payable to Seller by reason of such fire or other
casualty. Seller agrees to 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.
8. Seller's Covenants, Representations and Warranties.
Seller covenants, represents and warrants to Purchaser as follows:
(a) Briar (i) is a partnership, duly organized, validly existing and in
good standing under the laws of the State of Connecticut; (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) Highridge (i) is a partnership, duly organized, validly existing
and in good standing under the laws of the State of Connecticut; (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.
(c) 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.
(d) Seller has not received any notification of any pending or
threatened condemnation, requisition or similar proceeding affecting the
Property or any portion thereof other than as disclosed herein.
(e) Seller has not received and, to the best of Seller's knowledge,
there are no notices, orders, decrees or judgments issued 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. Except for the Foreclosure, 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.
(f) Except for the Foreclosure, 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.
(g) 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.
Without limiting the generality of the preceding sentence, there is no pending
assessment made by the Town of Vernon or Town of Norwich or any other authority
with respect to the repair, maintenance or expansion of any water or sewage
systems that may be located in any public right of way adjacent to the Property,
or for any other public improvements or betterments of any type which would or
could give rise to an assessment against the Property.
(h) Attached hereto as Exhibits B-1 and Exhibit B-2 are true, correct
and complete rent rolls 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;
or (iii) lease any units at the Property for a term in excess of twelve (12)
months or at less than fair market rental rates.
(i) There is no union contract affecting the Property or the employees
thereat and Seller will not enter into any such contract prior to Closing.
(j) Seller has received no notice that there are 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.
(k) 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.
(l) 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) shall 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.
(m) 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.
(n) 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, as of the Closing, there will
not be any service, supply or maintenance agreements with respect to the
Property or any portion thereof, other than as listed on Exhibit E attached
hereto, unless the same can be canceled upon thirty (30) days notice without the
necessity of payment of any termination penalty or premium.
(o) Except as disclosed by Seller and except for the possible presence
of lead paint on the Property, Seller, to its 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, allowed to
seep, leak, escape or leech, or 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 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).
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 one year. 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's 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 Connecticut, 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's Closing Deliveries. On the Closing Date, each Seller
shall deliver to Purchaser the following documents and instruments with respect
to its Property (collectively, "Seller's Closing Deliveries"), duly executed by
the applicable 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
(with the exception of items (a), (b), and (c) below, which shall be prepared by
Purchaser):
(a) a general warranty deed for each 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 for each Property conveying the
Personal Property.
(c) an Assignment and Assumption of Leases for each Property,
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 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,
certified as true, correct and complete by 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 each state of Seller's incorporation for 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 from each Seller 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 each 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 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 each 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) if requested by Purchaser, a general release for the benefit of the
Existing Holder releasing Existing Holder from any and all claims that Seller
may have against Existing Holder with respect to the Existing Mortgages.
(o) a permanent, unconditional Certificate of Occupancy for the Property
issued by the appropriate local authority.
(p) 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) Purchaser acknowledges that any failure of Purchaser to close hereunder
will be highly injurious to Seller and therefore if Purchaser shall fail to
close for any reason other than the default of Seller hereunder or as otherwise
permitted in accordance with the terms of this Agreement, then, in such case,
Seller may, at Seller's election and in lieu of all other remedies, (i) enforce
specific performance by Purchaser of the terms of this Agreement , or,
alternatively, (ii) terminate this Agreement, retain the Deposit and, to the
extent that Purchaser shall incur actual damages in an amount greater than the
Deposit retained by Seller as aforesaid, Seller shall be entitled to recover
such excess amount from Purchaser, provided, however, that the maximum
obligation of Purchaser in respect of any damages of Seller hereunder, including
the Deposit, shall be $1,305,150.00.
(b) Each Seller acknowledges that the Property is of a
special, unique and extraordinary character, and that any violation of this
Agreement by such Seller would be highly injurious to Purchaser, and therefore,
if any such 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 any such 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
made in its sole and absolute discretion may 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. The liability of Sellers with respect to the any liability
hereunder shall be joint and several. If this Agreement is terminated by
Purchaser following Seller's default, Escrow Agent shall promptly return the
Deposit to Purchaser. Purchaser hereby acknowledges that the failure of Seller
to obtain the Settlement Agreement or a release of the PBGC Lien does not
constitute a default by Seller under this Agreement.
(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) If on the Closing Date any tenant is in arrears in the payment of
rent or has not paid the rent payable by it for the month in which the Closing
occurs (whether or not it is in arrears for such month on the Closing Date), any
rents received by Purchaser or Seller from such tenant after the Closing Date
shall be paid to Purchaser. Purchaser shall use commercially reasonable efforts
(not including eviction) to collect any rents which relate solely to a rental
period prior to the Closing Date. If such amounts are recovered by Purchaser,
Seller shall be paid the amount in respect of past due amounts recovered net of
reasonable attorney's fees and costs of collection incurred by Purchaser. With
respect to any rents recovered by Purchaser from any tenant after the Closing
Date, Purchaser may apply such rents first to any rents owed for the period
after the Closing Date and any amount received in excess of such rentals shall
be payable to Seller for application to any arrearage arising prior to the
Closing Date as hereinafter defined. Notwithstanding the foregoing, if as of the
expiration of the sixth full calendar month following the Closing Date, any
tenant that was, as of the Closing Date, in arrears less than 3 months in the
payment of rent under its lease has, from and after the Closing Date, made
monthly payments of rent in accordance with the lease for such 6 month period
and, in addition, has not been served with a notice to quit by Purchaser, then,
with respect to such tenants only, Purchaser shall, within ten days after the
expiration of such six month period, remit to Seller an amount equal to the
aggregate arrearages of such tenant (less any amounts previously received by
Seller in respect of such arrearages) Seller shall not pursue collection of any
rentals owed by tenants as of the Closing Date. The provisions of this Paragraph
shall survive the Closing.
(d) Purchaser shall pay the conveyance taxes applicable to the transfer
of each 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.
(e) 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.
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: Sovereign Group 1984-II
149 Chapel Road
Manchester, CT 06040
Attention: David Harding
with a copy to: Jeffrey Carlson,
Esq. Richmond Realty
149 Chapel Road
Manchester, CT 06040
If to Purchaser: Grove Corporation
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.
Escrow Agent: Commonwealth Land Title Insurance Company
111 Founders Plaza, 17th Floor
East Hartford, CT 06108
Attn: George Browne, 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 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 affiliated entity 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 between
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
the Town of Vernon and the City of Norwich.
(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 actual
knowledge of Seller after inquiry and investigation by Seller of its officers
and representative having responsibility for the operation and management of 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 filed within
two (2) years of the Closing 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, or (ii) 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. The
liability of Sellers with respect to the foregoing indemnity shall be joint and
several.
(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; or (ii) 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.
(p) Confidentiality. Seller and Purchaser agree that no party
shall disclose or publicize the terms of this Agreement to any third party
without the prior written consent of the other parties; provided, however, that
the terms hereof may be disclosed without the requirement of any such consent to
those persons assisting Purchaser in connection with this transaction, provided,
further, that nothing herein shall prevent the disclosure, publication or use of
this Agreement or any terms hereof that is required to be disclosed in
connection with any administrative, legislative or judicial proceeding or
pursuant to the order of any administrative agency or tribunal or any court of
competent jurisdiction.
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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE FOLLOWS]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
SELLERS:
BRIAR KNOLL ASSOCIATES
By: Its General Partner Parker Street Corp
------------------------------------------
By: /s/Neil H. Ellis
--------------------
Print Name: Neil H. Ellis
Its: President
HIGH RIDGE ASSOCIATES
By: Its General Partner Parker Street Corp
------------------------------------------
By: /s/Neil H. Ellis
--------------------
Print Name: Neil H. Ellis
Its: President
PURCHASER:
GROVE CORPORATION
By:/s/Brian Navarro
-------------------
Print Name: Brian Navarro
Its: President
ESCROW AGENT:
COMMONWEALTH LAND TITLE INSURANCE COMPANY
By:/s/George Browne
-------------------
George Browne
Its Vice President
<PAGE>
EXHIBITS A-1 and A-2
DESCRIPTIONS OF LAND
<PAGE>
EXHIBITS B-1 and B-2
RENT ROLLS
<PAGE>
EXHIBIT C
ALLOCATION OF PURCHASE PRICE
Briar Knoll Apartments, Vernon, CT - $6,172,500.00
Hilltop Apartments, Norwich, CT - $5,014,500.00
<PAGE>
EXHIBIT D
DESCRIPTION OF EXISTING NOTES, MORTGAGES AND FORECLOSURE ACTION
<PAGE>
EXHIBIT E
SERVICE, SUPPLY AND MAINTENANCE AGREEMENTS
<PAGE>
EXHIBIT F
PBGC LIEN
