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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
June 30, 1997
HOME PROPERTIES OF NEW YORK, INC.
(Exact name of Registrant as specified in its Charter)
MARYLAND 1-13136 16-1455126
(State or other (Commission (I.R.S. Employer
jurisdiction file number) Identification
of incorporation
or organization Number)
850 CLINTON SQUARE
ROCHESTER, NEW YORK 14604
(Address of principal executive offices)
Registrant's telephone number, including area code: (716) 546-
4900
Not applicable
(Former name or former address, if changed since last report)
Consecutive No. Page 1 of ___
Exhibit Index at Page ___
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HOME PROPERTIES OF NEW YORK, INC.
CURRENT REPORT
ON FORM 8-K
Item 2. Acquisition of Assets.
Home Properties of New York, L.P. (the "Operating Partnership"),
a New York limited partnership purchased, in unrelated
transactions, two multifamily residential properties and in a
third transaction purchased three additional multifamily
residential properties. Collectively and together with the
acquisition of 1600 East Avenue, which was described on a Current
Report on Form 8-K filed on October 3, 1997, these acquisitions
are deemed "significant acquisitions" pursuant to the regulations
of the Securities and Exchange Commission governing the reporting
of transactions under the Current Report on Form 8-K.
Home Properties of New York, Inc. (the "Company") is the sole
general partner and holder, directly and indirectly through Home
Properties Trust in which the Company holds 100% of the
beneficial interests, of approximately sixty-five percent of the
limited partnership interests in the Operating Partnership.
Woodgate Place Apartments. On June 30, 1997, the Operating
Partnership acquired all of the equity interests in Erie Partner,
LLC, the owner of a 120 unit community (including 64 townhouse
units) located in the Rochester, New York suburb of Spencerport.
The purchase price of $4.25 million was paid in part by
assumption of a loan secured by the property having a principal
balance of approximately $3.5 million, bearing interest at 7.865%
and maturing on January 1, 2007. The balance of the purchase
price was financed under the Operating Partnership's line of
credit then in place, which bore interest at 175 basis points
over the 30-day LIBOR rate. Woodgate Place is approximately 25
years old and was about 95% occupied at the time of the
acquisition. The interests in Erie Partners, L.L.C. were
formerly owned by Robert B. Medina and G. Frederick Dunn.
Mid-Island Estates. On July 1, 1997, the Operating Partnership
acquired Mid-Island Estates, a 232 unit apartment community
located in Bay Shore on Long Island, New York, Mid-Island Estates
was constructed between 1961 and 1966 and was approximately 97%
occupied at the time of acquisition. The community was purchased
from Mid-Island Limited Partnership. The purchase price of
$10,650,000 was paid in part by assumption of the existing
financing secured by the property. That financing had an
approximate principal balance of $6.7 million, bears interest at
fixed rates ranging from 7.25% to 7.75% and matures on May 1,
2006. The balance of the purchase price was financed under the
Operating Partnership's line of credit described above,
Palumbo Portfolio. On October 16, 1997, the Operating
Partnership acquired three communities containing in the
aggregate 452 apartment units and located in the Buffalo suburbs
of Tonawanda and Amherst. The communities were purchased from
Anthony M. and Daniel Palumbo for an aggregate consideration of
$11.3 million. The three acquired
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properties were Tranquillity Estates (324 units in Tonawanda, New
York to be renamed Paradise Lane Apartments at Raintree Island),
Emerson Drive Apartments (96 units in Amherst, New York, to be
renamed Emerson Square) and Colvin Apartments (32 units in
Tonawanda, New York to be renamed Fairways Apartments). The
properties have an average age of 26 years and were approximately
80% occupied at closing. The purchase price was financed under
the Operating Partnership's new $50 million unsecured line of
credit, which bears interest at LIBOR plus 125 basis points or at
an alternate rate acceptable to the Operating Partnership and the
lender and which was 6.875% at the time of this acquisition.
None of the above sellers were affiliated with the Operating
Partnership, the Company, any directors or officers of the
Company or any affiliates of any such director or officer. The
properties were all previously operated as multifamily apartment
properties, and it is the intent of the Company and the Operating
Partnership to continue to operate them as multifamily apartment
communities.
The purchase prices were negotiated with the sellers and based on
an internal analysis by the Company of the historical cash flows
and fair market values of the properties.
Item 7. Financial Statements and Exhibits.
a. Financial Statements of the business acquired:
Financial statements for the interests and
properties acquired and noted in Item 2 are not
available at this time and will be filed by amendment
as soon as practicable, but not later than 60 days from
the date this Form 8-K must be filed.
b. Pro Forma Financial Information:
Pro forma Financial Statements of the Company
reflecting the interests and properties acquired and
noted in Item 2 are not available at this time and will
be filed by amendment as soon as practicable, but not
later than 60 days from the date this Form 8-K must be
filed.
c. Exhibits:
Exhibit 2.1 - Agreement among Home Properties of
New York, L.P. and Erie Partners, L.L.C.
relating to Woodgate Place Apartments, together with
Amendment No. 1
Exhibit 2.2 - Agreement among Home Properties of
New York, L.P. and Mid-Island Limited Partnership
relating to Mid-Island Estates, together with
Amendment No. 1
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Exhibit 2.3 - Purchase and Sale Agreement among
Home Properties of New York, L.P. and Anthony M.
Palumbo and Daniel Palumbo
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
HOME PROPERTIES OF NEW YORK, INC.
(Registrant)
Date: October 30, 1997
By: /s/ David P. Gardner
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David P. Gardner
Vice President
Chief Financial Officer and
Treasurer
Date: October 30, 1997
By: /s/ Norman Leenhouts
----------------------------
Norman Leenhouts
Chairman of the Board of Directors
Co-Chief Executive Officer and Director
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HOME PROPERTIES OF NEW YORK, INC.
EXHIBIT INDEX
Location
--------------
- ----
Exhibit 2.1
Agreement among Home Properties of New York, L.P.
and Erie Partners, L.L.C. relating to Woodgate
Place Apartments, together with Amendment No. 1 Pages __ to __
Exhibit 2.2
Agreement among Home Properties of New
York, L.P. and Mid-Island Limited Partnership
relating to Mid-Island Estates, together with
Amendment No. 1 Pages __ to __
Exhibit 2.3
Purchase and Sale Agreement among Home
Properties of New York, L.P. and Anthony
M. Palumbo and Daniel Palumbo Pages __ to __
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AMENDMENT NO. ONE
TO
PURCHASE AND SALE AGREEMENT
WHEREAS, Home Properties of New York, L.P. ("Buyer") entered into
a Purchase and Sale Agreement, dated April 28, 1997 (the
"Agreement") with Erie Partners, L.L.C. ("Seller");
WHEREAS, Buyer and Seller wish to amend the Agreement to provide
that the transfer will be by assignment of all of the interests
in Erie Partner, L.L.C. rather than by Deed;
WHEREAS, Buyer and Seller also wish to amend the Agreement to
provide for an escrow in the amount of $75,000 to provide for pre-
closing liabilities of Erie Partners, L.L.C.; and
WHEREAS, Buyer and Seller wish to further amend the Agreement to
provide for the disposition of certain funds held in escrow by
the holder of the Existing Loan.
NOW THEREFORE, the parties hereto agree as follows:
1. All capitalized terms used herein and not defined shall have
the meaning given them in the Agreement.
2. Buyer and Seller agree that in lieu of Seller conveying the
Property and the Other Items to Buyer by warranty deed and Bill
of Sale, the current, pre-closing members of the Seller (the "Pre-
Closing Members") will convey to the Buyer all of their interests
in the Seller, free and clear of all encumbrances. Any
references in the Agreement to the Seller after the Closing Date
shall therefore be a reference to the Pre-Closing Members of Erie
Partners, L.L.C.
3. The purchase price shall be Four Million Two Hundred and
Fifty Thousand and no/100 ($4,250,000). The reference to the
location of the Property in the first paragraph of the letter
shall be amended to the Town of Ogden rather than the Town of
Spencerport.
4. The Buyer has agreed to assume only those liabilities of
Erie Partners, L.L.C. and the Property as are specifically
described in the Agreement. The transaction is now being
structured as the assignment of the Pre-Closing Members'
interests in Erie Partners, L.L.C. to Buyer, which will then own
all of the interests in Erie Partners, L.L.C. The Buyer will
therefore have no entity to look to with respect to any
liabilities of Erie Partners, L.L.C. that Buyer has not agreed to
assume or with respect to the breach of any of the Seller's
representations or warranties contained in the Agreement. To
secure those
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obligations, the Seller will place $75,000 in escrow with the
Escrow Agent for four months following the Closing Date on the
terms set forth in the Escrow Agreement attached hereto as
Exhibit A.
5. The Buyer agrees that for a period of 5 years after the
Closing Date, the Buyer will permit the Pre-Closing Members to
have reasonable access to the books and records of the Property
and Erie Partners, L.L.C. relating to the period from the
formation of Erie Partners, L.L.C. to the Closing Date. In
addition, the Buyer agrees to maintain for a period of 5 years
after the Closing Date the books and records of the Property and
Erie Partners, L.L.C. relating to the same period. The
obligations of the Buyer relating to access and maintenance of
the books and records as described above shall only relate to
those books and records delivered to the Buyer at Closing. This
paragraph shall survive Closing.
6. Buyer and Seller agree that to the extent that the $36,090
currently held in escrow by ARCS Commercial Mortgage Co., L.P.
(the "Lender") pursuant to the Completion/Repair and Security
Agreement, dated December 16, 1996 has not been released at or
prior to Closing to pay for repairs made in compliance with that
Agreement, the funds shall remain in place until they are
released to pay for such repairs and Buyer shall not make any
payment to Seller or the Pre-Closing Members of Seller with
respect to such amount. To the extent that the amount of the
escrowed funds exceeds the funds necessary to complete the
repairs described in Completion/Repair and Security Agreement,
the Buyer agrees that it shall, upon completion of the repairs to
the Lender's satisfaction, pay the amount of any excess to Robert
B. Medina, as escrow agent for distribution to the Pre-Closing
Members.
7. As amended hereby, the Agreement remains in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be executed as of the 28th day of May, 1997.
HOME PROPERTIES OF NEW YORK, L.P.
By: Home Properties of New York, Inc.
General Partner
By: /s/ Ann M. McCormick
-------------------------
Title: Vice President
ERIE PARTNERS, L.L.C.
By: /s/ Robert B. Medina
-------------------------
Title: Manager
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ACKNOWLEDGED AND AGREED:
/s/ Robert B. Medina
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Robert B. Medina,
as agent for the Pre-Closing Members
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PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement ("Agreement"), made as
of the 28th day of April, 1997 by and between
HOME PROPERTIES OF NEW YORK, L.P., a New York limited
partnership, having its principal office at 850 Clinton
Square, Rochester, New York 14604, (herein called "Buyer"),
and
ERIE PARTNERS, L.L.C., a New York limited liability company,
having an office at 2 Hollow Road, Skillman, New Jersey
08558 (herein called the "Seller").
W I T N E S S E T H:
WHEREAS, Seller is the fee owner of a certain
residential apartment complex and adjacent land located in the
Town of Spencerport, County of Monroe, State of New York more
commonly known as Woodgate Place Apartments, all as more
particularly described below;
WHEREAS, Seller desires to sell said property to Buyer,
and Buyer desires to purchase that property from Seller, upon the
happening of certain events;
NOW, THEREFORE, in consideration of the property, mutual
covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency whereof being
hereby acknowledged, the parties hereby agree as follows:
1. REAL PROPERTY DESCRIPTION. The Real Property to be conveyed
consists of one or more parcels of land known as Woodgate Place
Apartments which includes 120 apartments (the "Project"), located
in the Town of Spencerport and State of New York, more
particularly described on Exhibit "A", attached hereto, together
and including all buildings and other improvements thereon,
including but not limited to, the 120 apartment units, and all
rights of Seller in and to any and all streets, roads, highways,
alleys, driveways, easements and rights-of-way appurtenant
thereto (the foregoing are hereafter collectively referred to as
the "Property").
2. OTHER ITEMS. The following items now in or on the Property,
are included in this sale and shall become the property of Buyer
at Closing (as hereafter defined):
A all heating, plumbing and lighting fixtures,
B ranges, refrigerators, disposals and dishwashers (one of
each for each apartment unit, except that there are no
dishwashers in the one bedroom units),
C water heaters,
D to the extent owned by Seller any and all bathroom fixtures,
wall-to-wall carpeting, traverse rods, exhaust fans, hoods,
signs, screens, maintenance building, model unit furniture,
fences, carpeting and runners, cabinets, mirrors, shelving,
any humidifier and dehumidifier units, air conditioning
units other than such units owned by
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tenants, mail boxes, office furniture, and related equipment in
connection with the Project,
E any fixtures appurtenant to the Property and any other
furniture or equipment used in connection with the operation
and maintenance of the Property (hereinafter with the items
listed in A-D above, collectively, the "Other Items").
Seller's interest in the Other Items will be
transferred to Buyer by absolute Bill of Sale in substantially
the form attached hereto as Exhibit B.
3. EXCEPTIONS. Buyer agrees to accept title to Seller's
interest in the Property subject only to the matters set forth on
the attached Schedule 1.
4. PRICE AND MANNER OF PAYMENT.
A. The purchase price for the Property shall be a total of
Four Million Nine Hundred Two Hundred and Fifty Thousand and
NO/100 ($4,250,000) (the "Purchase Price") payable as
follows (i) $25,000 payable as a deposit (the "Deposit")
upon execution of this Agreement by both parties; (ii) by
assumption of the first mortgage having a balance of
approximately $3,500,000 (the "Existing Loan"); and (iii)
the remainder payable at Closing by check or by wire
transfer to an account designated by Seller.
B. The Deposit shall be paid to Wien & Malkin, L.L.P. (the
"Escrow Agent"), who shall deposit that amount in an
interest bearing account to be held and disbursed in
accordance with the Rider attached hereto. The Deposit
(with interest) shall be applied against the Purchase Price
at Closing. The Deposit shall be forfeited to Seller as
Seller's sole remedy and as liquidated damages if Buyer
fails to complete this transaction for any reason other than
a termination of this Agreement as permitted herein. In the
event of such a termination, Seller shall promptly instruct
the Escrow Agent to refund the Deposit (with interest) to
Buyer and upon the return of the Deposit this Agreement
shall wholly cease and terminate and neither party shall
have any further claim against the other by reason of this
Agreement.
5. ADJUSTMENTS AT CLOSING. The following shall be adjusted and
prorated between the parties at Closing as if the Buyer was the
owner of the Property as of midnight of the night preceding the
Closing Date:
A current fiscal year real estate taxes,
B water charges,
C sewer charges,
D fuel,
E electricity,
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F all rentals and security deposits (including interest
thereon) pursuant to the leases,
G charges under the Service Contracts,
H laundry income;
I interest on the Existing Loan and any reserves required
under the Existing Loan;
J any other charges incurred with respect to the Property
which Seller is obligated to pay; and
K Rents.
(1) All rent payments due for the month of Closing shall be
deemed collected by the Seller and prorated as between the
parties as of the Closing.
(2) All rent collected after Closing, for any period prior to
Closing, shall belong to Seller and, if paid to Buyer, Buyer
shall promptly send such rent to Seller.
(3) All rent collected by Seller, prior to the Closing, for
rental periods subsequent to Closing shall be paid to Buyer at
Closing.
(4) All rent collected by Buyer or Seller for rental periods
after the Closing shall belong to Buyer and, if paid to Seller,
Seller shall promptly send such rent to Buyer.
The Buyer agrees to use reasonable efforts after the Closing
to collect delinquent rentals owed to the Seller, provided
that nothing herein shall require Buyer to institute legal
proceeding against any resident whose rental payments are
delinquent. Any rents collected after Closing which are
applicable to arrearages which arose prior to Closing shall
be paid by Buyer to Seller, net of the expenses of
collection. If Buyer fails to collect any rents due to
Seller within 90 days following the Closing, the Sellers may
proceed to collect the same in their own name. Nothing
herein shall make the Buyer liable to the Seller for any
failure to collect arrearages.
In addition, to the extent that the holder of the Existing
Loan requires that any reserves and escrows established by
the Seller remain in place after the Closing, the Buyer
shall make a payment to the Seller in the amount of the
reserves and escrows in place on the Closing Date, such
payment to be made on the Closing Date and in the same
manner as the payment of the Purchase Price.
Any error in the calculation of adjustments shall be
corrected subsequent to Closing with appropriate credits to
be given based upon corrected adjustments, provided,
however, that the adjustments (except if errors are caused
by misrepresentions) shall be final upon expiration of the
sixtieth day after Closing.
6. COSTS. Buyer shall pay all recording fees, Buyer's
attorneys' fees, the costs of obtaining a binder or commitment
from a title insurance company, the premium for Buyer's title
insurance policy, one-half of any assumption fees or other costs
charged by
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the holder of the Existing Loan in connection with the assumption
of the Existing Loan and all other costs and expenses
incidental to or in connection with closing this transaction
customarily paid for by the purchaser of similar property.
Seller shall pay the transfer tax, attorneys' fees, if any,
incurred by Seller in connection with this transaction, one-
half of any assumption fees or other costs charged by the
holder of the Existing Loan in connection with the
assumption of the Existing Loan and all other costs and
expenses incidental to or in connection with closing this
transaction customarily paid for by the seller of similar
property.
7. SEARCH AND SURVEY. Seller has furnished to Buyer a copy of
the most recent survey and title insurance policy relating to the
Project.
8. INSPECTION. Upon and after acceptance of this Agreement by
Seller, Seller agrees that Buyer and its authorized
representatives shall have the right and privilege to enter upon
the Property and Seller's offices, upon reasonable notice, during
regular business hours, for the purpose of gathering such
information and conducting such environmental and engineering
studies or other tests and reviews as Buyer may deem appropriate
and necessary. All such inspections, studies, tests and reviews
shall be at Buyer's sole expense. Seller agree to cooperate with
Buyer by making available to Buyer such records, plans, drawings
or other data as may be in Seller's possession or control
relating to the Property and its operation; provided, however,
that Buyer agrees to indemnify Seller of and from any loss or
damage occasioned by such entry, and agrees further to restore to
its original condition, at Buyer's own cost and expense, any
property disturbed by such entry.
9. TITLE DOCUMENTS. At the time of Closing, Seller shall
deliver to Buyer the following:
A A warranty deed conveying good and marketable title to the
Property.
B A Bill of Sale conveying good title, free of all
encumbrances to the Other Items.
C A current rent roll ("Rent Roll") certified, as of the date
of Closing, which shall include a list of all tenants, all rental
obligations of each tenant with respect to the Property and all
security deposits.
D Complete originals of each lease listed on the Rent Roll,
together with an assignment of all leases encumbering the
Property to Buyer in substantially the form attached hereto as
Exhibit C and in recordable form.
E An assignment, assumption, and indemnity agreement of all of
Seller's rights and obligations to all contracts affecting the
Property (the "Service Contracts).
F An assignment, assumption, and indemnity agreement whereby
the security deposits (including interest thereon) are
transferred to the Buyer, who shall assume the responsibility
therefor. In lieu of an assignment of the security deposits, the
Seller may provide Purchaser with a credit at Closing for all
security deposits (with interest thereon) held by Seller with
respect to all leases encumbering the Property.
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10. TITLE EXAMINATION; OBJECTIONS TO TITLE.
A Within ten (10) banking days after execution of the
Agreement by both parties Buyer agrees to furnish to
Seller's attorneys a specification in writing of any
objection to title that Buyer believes it is not required to
take title subject to, which shall not include the
exceptions permitted in Section 3 of this Agreement. Seller
may, but shall not be required to, bring any action or
proceedings or take such other action as may be appropriate
to render title to the Property marketable.
B Seller shall have ten (10) banking days from receipt of
notice, if any, from Buyer of its title objections within
which it must notify Buyer in writing if it cannot cure.
C In the absence of such notice from Seller, Seller shall be
obligated to cure the title objections, if any, made by
Buyer. If Seller notifies Buyer that Seller is unable to
convey a good and marketable title to the property described
above, subject to and in accordance with the provisions of
this contract, then, except as hereinafter provided, Buyer
may elect, by written notice to Seller, to either:
(1) terminate this Agreement by notice delivered to the Seller
within five (5) banking days of receipt of Seller's notice that
Seller cannot cure the title objections, in which event the sole
obligation of Seller shall be to refund the Deposit and, upon the
return of the Deposit, this Agreement shall wholly cease and
terminate, and neither party shall have any further claim against
the other by reason of this Agreement,; or
(2) proceed with the purchase, provided Seller is able to obtain
a commitment for title insurance and thereafter pay the premium
for said title insurance endorsement(s) which insure the
exception(s) on behalf of the Buyer.
(3) Notwithstanding anything to the contrary contained herein,
Buyer may accept such title as Seller may be able to convey,
without reduction of the Purchase Price or any credit or
allowance against the same and without any other liability on the
part of Seller and if Buyer elects to do so, Seller shall have no
right to terminate this Agreement as hereinabove provided. The
acceptance of the deed by Buyer shall be deemed to be a full
performance and discharge of every agreement and obligation on
the part of Seller to be performed pursuant to the provisions of
this Agreement, except those, if any, which are herein
specifically stated to survive the delivery of the deed.
(4) If a search of the title discloses judgments, bankruptcies
or other returns against other persons having names the same as
or similar to that of Seller, Seller will on request deliver to
Buyer an affidavit showing that such judgments, bankruptcies or
other returns are not against Seller.
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11. USE OF PROPERTY. Seller represents that the Property and
any improvement thereon are in full compliance with restrictive
covenants, statutes, ordinances, regulations, and/or other
administrative enactments including, but not limited to building
codes and zoning ordinances for the present use as a multi
residential dwelling.
12. CLOSING DATE. The Closing shall occur on the earlier of: (i)
within 15 days after the end of the Due Diligence Period (as
hereinafter defined); or (ii) receipt of the consent by the
holder of the Existing Loan to the transaction contemplated
herein and the assumption by the Buyer of the borrower's
obligations under the Existing Loan, (the "Closing" or "Closing
Date") at the Seller's office, or at such other time and place as
may be mutually agreed upon.
13. POSSESSION. Buyer shall have possession and occupancy of
the Property from and after the date of delivery of the deed,
subject only to matters herein provided for.
14. BROKER'S COMMISSION. Buyer represents to Seller that it did
not employ any broker in connection with this sale. Seller
represents that it employed Richard Slavin of Houlihan-Parnes,
Realtors as broker and agrees that it will pay any fees or
commissions due as a result of the Seller's employment of that
broker. Seller and Buyer each agree to indemnify the other for
any and all claims and expenses, including legal fees, if any
other fees or commission is determined to be due by reason of the
employment of any other broker by the indemnifying party. This
representation and indemnity shall survive the Closing.
15. RISK OF LOSS. The risk of loss or damage to all or part of
Seller's interest in the Property by fire or other casualty or by
taking by eminent domain, until Closing, shall be assumed by
Seller and upon the happening of such event, Buyer shall have the
election of terminating this Agreement without further liability
hereunder, or of completing this purchase and receiving the
Seller's share of insurance monies, collectible for such loss or
damage, or the award for such taking by eminent domain.
16. CONDITIONS PRECEDENT.
A It shall be a condition to Buyer's obligations to close that
all of the representations and warranties of the Seller are
true and correct as of the Closing;
B It shall be a condition to Buyer's obligation to close that
there are at Closing 120 apartment units in rentable
condition, which are all in compliance with federal, state,
county or local laws, ordinances, rules and regulations;
C Buyer shall have thirty (30) days after the date of this
Agreement (the "Due Diligence Period") within which to
review and inspect the Property and the Other Items
(including, but not limited to, performing engineering and
Phase I environmental studies), the Seller's books and
records pertaining to the Property and the Other Items,
matters relating to zoning compliance and compliance by the
Property and the Other Items with other applicable
governmental regulations,
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the market in which the Property operates, the documents relating
to the Existing Loan, the tax assessment on the Property as
it relates to the purchase price and to the assessment on
comparable properties and such other matters as Buyer shall
deem reasonably necessary or appropriate in connection with
the Property and the Other Items. If Buyer determines that
it does not wish to purchase the Property and the Other
Items as a result of its findings during the Due Diligence
Period and notifies Seller of such decision within the Due
Diligence Period, the Deposit shall be returned to Buyer,
at which time this Agreement shall be null and void and
neither party shall have any further rights or obligations
under this Agreement. Buyer's failure to object within the
Due Diligence Period shall be deemed a waiver by Buyer of
the condition contained in this Section 8(C).
D Buyer shall take title to the Property subject to the terms
of the Existing Loan held by Federal National Mortgage
Association (the "Lender") on the Property, except that as
a condition of Buyer to close, Lender shall have approved
the assumption by Buyer of the Existing Loan and the
Existing Loan shall contain the following specific
requirements:
(i) the outstanding principal balance of the Existing Loan
at Closing shall be approximately Three Million Five
Hundred Thousand Dollars ($3,500,000.00);
(ii) the Existing Loan shall be current and no defaults
shall have occurred thereunder as of the Closing Date.
Seller shall provide Buyer with a copy of the documents
pertaining to the Existing Loan within 10 days of the
execution of this Agreement by both parties. Seller and
Buyer agree that they will work together in good faith to
obtain the Lender's approval of the assumption, it being the
parties intention that the Seller make the initial contacts
with the Lender with regard to the assumption.
E It shall also be a condition to Buyer's obligation to close
that during the Due Diligence Period, the Purchaser shall
obtain the approval of the Board of Directors (the "Board")
of its general partner - Home Properties of New York, Inc.,
- to the acquisition of the Property on the terms and
conditions described herein. If Buyer does not obtain the
Board's approval within the Due Diligence Period, the
Purchaser shall promptly notify Seller in which event the
Deposit shall be returned to Buyer, at which time this
Agreement shall be null and void and neither party shall
have any further rights or obligations under this
Agreement. Buyer's failure to notify Seller within the Due
Diligence Period of its failure to obtain Board approval
shall be deemed a waiver by Purchaser of the conditions
contained in this Section 8(E).
It is understood that the contingencies set forth herein are
for Buyer's benefit and may be waived by Buyer at any time.
If the above contingencies are not satisfied or waived by
the Buyer, the Buyer shall have the right to terminate this
Agreement by written notice to Seller. In the event of such
a termination, Seller shall promptly return the Deposit to
Buyer as provided in paragraph (B) of Section 4 of this
Agreement and the Rider attached hereto, at which time this
Agreement shall be null and void and neither party shall
have any further rights or obligations under this Agreement.
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17. ENVIRONMENTAL CERTIFICATION. By acceptance of this
Agreement, Seller represents, warrants, and certifies to Buyer
that Seller has no knowledge of any violation, and has received
no notice of any violation of any applicable Environmental Laws
(below defined). To the best of Seller's knowledge, Seller has
not, nor has any other person, used, generated, stored, dumped,
released, buried, dispersed or emitted any Hazardous Substance
on the Property nor are there any transformers or underground
tanks on the Property, nor is there a violation of any
Environmental Laws with respect to the current use of the
Property. "Environmental Laws" shall mean all federal, state
and local environmental, health, chemical use, safety and
sanitation laws, statutes, ordinances and codes relating to the
protection of the environment and/or governing the use, storage,
treatment, generation, transportation, processing, handling,
production or disposal of any Hazardous Substance and the rules,
regulations, and orders with respect thereto. "Hazardous
Substance" means, without limitation, any flammable, explosive
or radioactive material, polychlorinated biphenyl, petroleum or
petroleum product, methane, hazardous materials, hazardous
wastes, hazardous or toxic substances or related materials, as
defined in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C.
Sections 9601, et seq.), the Hazardous Materials Transportation
Act, as amended (49 U.S.C. Appendix Sections 1801, et seq.), the
Resource Conservation and Recovery Act, as amended (42 U.S.C.
Sections 6901, et seq.), the Toxic Substances Control Act, as
amended (15 U.S.C. Sections 2601, et seq.), Articles 15 and 27 of
the New York State Environmental Conservation Law or any other
Environmental Law and the regulations promulgated thereunder
applicable on the effective date of this Agreement. From the
date of acceptance hereof to and including the date of Closing,
Seller shall immediately provide Buyer with a copy of any
notice, citation, complaint or other directive from any person,
entity or governmental authority whereby Seller's compliance with
Environmental Laws is called into question, and immediately
notify Buyer of any new information or other developments which
could tend to supplement or modify the information contained
herein.
18. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and
warrants to Buyer as of the date hereof and as of Closing, that:
A To the best of Seller's knowledge after due inquiry, Seller
has no liability or obligation of any nature which in any
way affects or is related to the Property or the Other
Items whether now due or to become due, absolute, contingent
or otherwise, including liabilities for taxes (or any
interest or penalties thereto) other than disclosed in this
Agreement.
B To the best of Seller's knowledge, after due inquiry, there
is no litigation, proceeding or investigation pending, or
to the knowledge of Seller threatened, against or affecting
Seller that might affect or relate to the validity of this
Agreement, any action taken or to be taken pursuant hereto,
or the Property, the Other Item or any part or the
operation thereof, whether or not fully covered by
insurance or any proceeding pending for the increase or
decrease of the assessed valuation of all or a portion of
the Property.
C To the best of Seller's knowledge after due inquiry, Seller
has complied with and is not in default under, or in
violation of, or received any notice that the Seller, the
Property or the Other Items may be in violation of, any law,
ordinance, rule,
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regulation or code or condition in any approval or permit
pursuant thereto (including without limitation, any zoning,
sign, environmental, labor, safety, health or price or wage
control, ordinance, rule, regulation or order of) applicable
to the ownership, development, operation or maintenance of
the Property or the Other Items.
D There are no written leases affecting the Property with a
term greater than one (1) year.
E To the best of Seller's knowledge after due inquiry, there
is no pending condemnation of the Property, or any part
thereof, or of any plans for improvements which might
result in a special assessment against the Property.
F Seller has not received any written notice or request from
any insurance company, Board of Fire Underwriters (or
organization exercising functions similar thereto)
requesting the performance of any work or alteration in
respect of the Property or the Other Items.
G Security deposits held by Seller will be correctly
identified by Seller as of Closing with respect to the
Property.
H There are no Service Contracts with respect to the Property
or the Other Items which will continue in effect after the
Closing except as set forth on Schedule "2" attached hereto.
I There are no executory contracts connected with the Property
or the Other Items, except as set forth on Schedule "3"
attached hereto. Seller and Seller's employees and agents
have not let, and will not let any contracts for
improvements to the Property which will not be fully
completed and fully paid for prior to Closing.
J Until Closing, Seller shall continue to fulfill all of its
obligations under the terms of the Leases encumbering the
Property, and under the Service Contracts, and Seller shall
operate, maintain and repair at Seller's expense, all
landscaping, buildings, fixtures and facilities, in
accordance with normally accepted business principles, and
Seller shall continue to operate the Property in a
commercially reasonable manner.
K The Rent Roll to be given by Seller to Buyer at Closing will
be true and correct. The rent roll (as of 3/31/97)
attached hereto as Schedule "4" is true and correct as of
the date of shown thereon and indicates all apartment units
which are the subject of Section 8 contracts.
L The financial information previously provided to Buyer with
respect to the Property is substantially accurate.
M All of the ranges and refrigerators located within the
apartment units are the property of the Seller and not of
the tenants.
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N This Agreement has been duly authorized, executed and
delivered and constitutes a legal and binding obligation of
Seller, enforceable in accordance with its terms, except as
may be limited by bankruptcy and other laws affecting
creditors' rights generally.
O Neither the entry into this Agreement, nor the carrying out
of the transactions contemplated herein has resulted or
will result in any violation of, or be in conflict with, or
result in the creation of, any mortgage, lien, encumbrance
or charge (other than those contemplated hereby) upon any
of the properties or assets of Seller pursuant to, or
constitute a default under, any certificate of
incorporation, by-law, partnership agreement, or mortgage,
indenture, contract, agreement, instrument, franchise,
permit, judgment, decree, order, statute, rule or regulation
applicable to Seller or the Property.
P To the best of Seller's knowledge, no consent or approval
by, or authorization of, or filing, registration or
qualification with, any federal, state or local
governmental authority, bureau, department or agency, or any
corporation, person or other entity is required as of the
Closing either for the execution, delivery or performance
of this Agreement by Seller, or in connection with the
consummation by Seller of the transactions contemplated by
this Agreement, except for such consents, approvals,
authorizations, filings, registrations or qualifications as
have been obtained by Seller as of the date hereof and
disclosed and accepted by Buyer.
Q Seller shall permit Buyer to examine and copy all of the
leases encumbering the Property, including all additions,
amendments or modifications thereto as provided herein. To
the best of Seller's knowledge, there is not now and there
will not be as of the Closing, a default in the leases for
more than 2% of the apartment units. Seller shall not
accept any prepayment in excess of one month of any rent
due under any leases with respect to the Property.
The representations and warranties of Seller contained in
this Agreement, the statements in any Exhibit or Schedules
attached to this Agreement, or other instruments furnished
to Buyer at or prior to Closing pursuant to this Agreement,
or in connection with the transactions contemplated by
Seller pursuant to this Agreement, do not contain any untrue
statements of a material fact, or fail to state a material
fact necessary to make it not misleading.
The representations and warranties contained herein shall
survive delivery and recording of the deed and shall not
merge therein.
Seller acknowledges that each of the representations made by
it in this paragraph 18 and elsewhere in this Agreement is
material to Buyer hereunder. As to any representation or
warranty set forth herein, Seller shall indemnify, defend
and hold Buyer sale and harmless from and against any and
all loss, damage, claim, counterclaim, cause of action, cost
or expense, including, without limitation, reasonable
attorneys' fees and disbursements at both trial and
appellate levels, suffered, paid or incurred by, or asserted
against Buyer, directly or indirectly, whether foreseen or
unforeseen, and whether for personal injury or death or for
property damage or otherwise by reason of Seller's breach of
any warranty or obligation under this Agreement or if any
representation of Seller in this Agreement is wholly or
partially untrue.
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Irrespective of anything to the contrary contained herein the
representations and warranties of Seller, herein contained,
shall expire and be of no further effect upon the expiration
of 12 months after Closing. This expiration shall not apply
to any breach of warranty or representation which arises out
of an intentional material misrepresentation made by Seller.
19. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Seller as of the date hereof and as of the Closing:
(a) Buyer is and will be as of the date of Closing duly
organized, validly existing and in good standing under
the laws of the State of New York and has all the
requisite power and authority to enter into and carry
out this Agreement according to its terms.
(b) Subject to the receipt of the approval of the Board,
this Agreement has been duly authorized, executed and
delivered and constitutes a legal and binding
obligation of Buyer, enforceable in accordance with its
terms, except as may be limited by bankruptcy and other
laws affecting creditors' rights generally.
(c) To the best of its knowledge after due inquiry, there
is no litigation, proceeding or investigation pending,
or to the knowledge of Buyer threatened, against or
affecting Buyer or the partners of Buyer that might
affect or relate to the validity of this Agreement or
any action taken or to be taken pursuant hereto, or
that might have a material adverse effect on the
business or operations of the Buyer.
20. ASSIGNMENT. This Agreement, and all rights of Buyer
hereunder, may be assigned by Buyer to any affiliate without
Seller's prior consent. Any other assignment by Buyer shall
require the Seller's prior written consent, which consent shall
not be unreasonably withheld. Any assignment by the Buyer shall
not relieve the Buyer of any obligation of the Buyer created by
this Agreement. Seller may convey its interest in the Property
to an affiliate without the Buyer's prior written consent,
provided that the assignee shall agree in writing to be subject
to the terms of this Agreement.
21. NOTICE. All notices given pursuant to any provisions of
this Agreement shall be in writing and shall be effective only
if delivered personally, or sent by registered or certified
mail, postage prepaid or sent by a national over-night carrier,
to the addresses set forth below:
To Seller: ERIE PARTNERS, L.L.C.
2 Hollow Road
Skillman, New Jersey 08558
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with a copy to: Wien & Malkin, LLP
60 East 42nd Street
New York, New York 10165-0015
Attn: Thomas N. Keltner, Jr.
To Buyer: HOME PROPERTIES OF NEW YORK, L.P.
Attn: Norman Leenhouts, Chairman
850 Clinton Square
Rochester, New York 14604
22. PLANS, WARRANTIES AND GUARANTIES. Seller agree to provide Buyer
with all plans and architectural drawings in Seller's possession
for the improvements completed at the Property, including,
without limitation, all "as-built" plans in Seller's possession
and Seller further agrees that it will endeavor to turn over the
same to Buyer promptly upon execution of this Agreement. Seller
shall assign to Buyer at Closing any and all guaranties and
warranties Seller has with respect to the Property, the
improvements thereon, and the equipment relating to the
Property, if any.
23. APPLICABLE LAW. This Agreement shall be construed and
governed in accordance with the laws of the State of New York.
24. ENTIRE AGREEMENT. This Agreement shall constitute the
entire agreement between the parties, and any and all prior
understandings or agreements, whether written or oral, are
hereby merged into this Agreement. This Agreement cannot be
modified except by a written instrument signed by the parties
hereto.
25. BINDING AGREEMENT. This Agreement shall not be binding or
effective until properly executed by Buyer and Seller.
26. CONFIDENTIALITY. By execution of this Agreement and except as
otherwise provided herein, prior to the Closing each of Seller
and Buyer agree to keep any and all information with respect
to the transactions contemplated by this Agreement strictly
confidential, and will not disclose any such information, without
the other's prior written consent. Buyer may disclose the
existence of this Agreement to the extent necessary to conduct
its due diligence with respect to the Property.
27. FINANCIAL ACCESS. Seller will provide a signed
representation letter as prescribed by Generally Accepted
Auditing Standards as promulgated by the Auditing Standards
Division of the American Institute of Public Accountants which
representation is required to enable an Independent Public
Accountant to render an opinion on such financial statements.
Seller will provide access by Buyer's representatives, to all
financial and other information relating to the Property as is
sufficient to enable them to prepare audited financial
statements, at Buyer's expense, in conformity with Regulation S-X
of
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the Securities and Exchange Commission (the "Commission") and any
registration statement, report or disclosure statement required
to be filed with the Commission.
IN WITNESS WHEREOF, the parties hereto have caused this
Instrument to be executed as of the day and date first above
written.
HOME PROPERTIES OF NEW YORK, L.P.
By: Home Properties of New York, Inc.
General Partner
By: /s/ Norman Leenhouts
--------------------------------
Title: Chairman
--------------------------------
ERIE PARTNERS, L.L.C.
By: /s/ Robert B. Medina
--------------------------------
Title: Manager
--------------------------------
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AMENDMENT NO. ONE TO
AGREEMENT
Dated as of the 16th day of June, 1997
WHEREAS, Mid-Island Limited Partnership ("Seller") and Home
Properties of New York, L.P. ("Purchaser") have entered into an
Agreement, dated April 10,1997 (the "Agreement") relating to the
purchase and sale of the Mid-Island Apartments located in the
city of Bayshore, County of Suffolk, State of New York;
WHEREAS, by letter dated May 7,1997 Purchaser exercised its right
to terminate the Agreement;
WHEREAS, Purchaser and Seller desire to re-institute the
Agreement and to amend certain of its terms:
NOW THEREFORE, the parties hereto agree as follows:
1. DEFINITIONS. All capitalized terms used herein and not defined
shall have the meaning given to them in the Agreement.
2. PURCHASE PRICE. Sub-paragraph B of Paragraph First of the
Agreement shall be revised to provide that the Purchase Price
shall be Ten Million Six Hundred Fifty Thousand Dollars
($10,650,000) payable as follows:
a. $3,975,000 on the Closing Date by wire transfer; and
b. Subject to the provisions of Paragraph Ninth of the
Agreement. $6,675,000 on the Closing Date by Purchaser's
assumption of the Note and Mortgage.
3. Buyer further agrees to execute any and all documents (subject
to the reasonable approval of Buyer's counsel) as are reasonably
necessary in connection therewith, provided that the close of
this transaction for the conveyance of Seller's property shall
not be contingent upon or subject to the completion of such
exchange. Buyer understands and acknowledges that the seller is
participating in the First American Tax Deferred Exchange
Program. Seller agrees to indemnify and hold Buyer free and
harmless from any cost, expense or liability, including
attorney's fees resulting from Buyer's participation in such
exchange.
4. CLOSING DATE. Paragraph Second of the Agreement shall be
amended to provide that the Closing shall occur by mail and wire
transfer on or before June 30,1997(the "Closing Date") with
time being of the essence.
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5. DUE DILIGENCE PERIOD. Purchaser and Seller agree that the Due
Diligence Period is over and that Purchaser hereby waives its
right to terminate the Agreement as provided in Paragraph Tenth
and Eleventh. Seller will provide the signed representation
letter as described in sub-paragraph (e) of Paragraph Eleventh.
In addition, Seller agrees that prior to the Closing Date, final
inspections will be successfully completed with respect to the
open permits listed on the attached Building Division
Certificate.
6. TITLE. Purchaser hereby acknowledges that it has no Objection
to Title as described in Paragraph Fifteenth of the Agreement,
provided that Purchaser retains the right to object to any
exceptions raised by the Title Company in a continuation at or
prior to Closing.
7. ESCROW AGREEMENT. The provisions of Paragraph Twenty-First of
the Agreement no longer apply as there is no Deposit and shall be
removed in their entirety.
8. BOARD APPROVAL. The Purchaser represents that it has obtained
the consent of the Board of Directors of Home Properties of New
York, Inc. to the Agreement as amended hereby.
9. REINSTATEMENT. As amended hereby, the Agreement is re-instated and shall
continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement the day and year first above written.
MID-ISLAND LIMITED PARTNERSHIP
By: /s/ Eli Schron
------------------------------
Title: Vice President
------------------------------
Name: Eli Schron
------------------------------
HOME PROPERTIES OF NEW YORK, L.P.
By: Home Properties of New York, Inc., General Partner
/s/ Ann M. McCormick
------------------------------
Title: Vice President
------------------------------
Name: Ann M. McCormick
------------------------------
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AGREEMENT
THIS AGREEMENT made this 10th day of April, I997, by and between
MidIsland Limited Partnership, a New York limited partnership,
having a place of business at 42 Broadway, New York, New York
10004 (hereinafter referred to as "Seller"), and Home Properties
of New York, L.P. (hereinafter referred to as "Purchaser").
FIRST: A. Subject to the terms and conditions of this
Agreement, Seller shall sell to Purchaser, and Purchaser shall
purchase from Seller, all of Seller's right, title and interest
in and to the following (collectively, the "Property"):
( 1 ) that certain land located in the City of Bayshore,
County of Suffolk, State of New York, located at 361 Main Street
and 2053 Union Boulevard, as more particularly described in
Exhibit A annexed hereto and incorporated herein by this
reference (the "Land"), together with all right, title and
interest of Seller in and to (I) the land lying in the bed of any
street, highway, road or avenue, opened or proposed, in front of
or adjoining the Land, to the center line thereof, (ii) any
rights of way, appendages, appurtenances, sidewalks, alleys,
gores or strips of land adjoining or appurtenant to the Land and
used in connection therewith and (iii) any award made or to be
made in lieu of any of the foregoing and any award for damage to
the Land or the Improvements (as defined below) by reason of
change of grade of any street, road or avenue;
(2) all improvements, structures and fixtures located upon
the Land (the "Improvements");
(3) all tangible personal property (the "Personal Property")
located on and used in
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connection with all or any portion of the Land and Improvements
(except for a refrigerator, typewriter and Xerox machine in the
office);
(4) the interest of the landlord in, to and under all leases
of space of all or any portion of the Land and Improvements; and
(5) all contracts, agreements, permits, licenses and
warranties held solely for use in connection with all or any
portion of the Land, Improvements or Personal Property (the
"Intangible Property")
B. The purchase price for the Property (the "Purchase
Price") shall be Eleven Million ($ 11,000,000) Dollars, payable
as follows:
a. $500,000.00 (the "Deposit") upon the signing of this
Agreement, receipt of which, by check made payable to the order
of Allen Bodner, Esq., as escrowee, is hereby acknowledged,
subject to collection, nonpayment of which check in due course
will give Seller the option of canceling this Agreement, which
Deposit shall be held and disbursed pursuant to the provisions of
this Agreement. Interest earned on the Deposit shall belong to
the party entitled to receive the Deposit proceeds.
b. $3,825,000 on the Closing Date by (I) an unendorsed
teller's check or certified check of Purchaser, drawn on a bank
which is a member of the New York Clearing House Association
directly to the order of Seller or (ii) at Seller's election, by
wire transfer of immediately available funds through the Federal
Reserve System.
c. Subject to the provisions of Paragraph NINTH hereinbelow,
$6,675,000.000 on the Closing Date by Purchaser's assumption of
the note and mortgage (the "Note and Mortgage")
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presently held by the Jamaica Savings Bank ("JSB") in the
principal sum of $6,675,000.00, encumbering the Property. A copy
of said Note and Mortgage has previously been delivered to
Purchaser, and is annexed hereto as Exhibit B.
SECOND: The Closing shall occur at the office of Allen
Bodner, Esq., One Whitehall Street, New York, New York 10004, or
a lending institution, at 10:00 a.m. within fifteen (15) days
after the conclusion of the Due Diligence period (the "Closing
Date"). Purchaser shall be entitled to one adjournment of the
Closing Date to a date not later than June 20,1997 (the
"Adjourned Closing Date"), if Purchaser notifies Seller of the
Adjourned Closing Date, in writing, prior to May 5, 1997. TIME
SHALL BE OF THE ESSENCE AS TO PURCHASER'S OBLIGATION TO CLOSE ON
JUNE 20, 1997.
THIRD: The Premises are hereby sold and are to be conveyed
subject only to the following (the "Permitted Encumbrances"):
a. (I) Any state of facts an updated survey may show
provided same do not render title unmarketable or prohibit the
existing structures or the use of the Premises as currently used.
(ii) Any state off acts a personal inspection of the
Premises would show and/or reveal, provided title is not thereby
rendered unmarketable.
b. (I) All leases, subleases, tenancies, and rights of
occupancy thereunder or otherwise and any renewals,
modifications or replacements thereof (collectively, the
"Leases"), as the same may be affected by rent regulations or
laws now or hereafter in effect, and rulings, decisions or
interpretations by any court, agency or administrative body.
(ii) Any new leases entered into by Seller and subleases,
tenancies and rights of
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occupancy thereunder and any renewals, modifications or
replacements thereof as may be made by Seller in accordance with
the terms hereof, subject to the provisions of Paragraph SEVENTH
hereof.
c. Rights of any utility company to erect, maintain and
operate lines, wires, poles, cables and distribution boxes, in,
over and upon the Premises.
d. Possible projections and/or encroachments of retaining
walls, stoops, areas, steps, sills, trim, cornices, standpipes,
fire escapes, coal chutes, casings, ledges, water tables,
lintels, porticos, keystones, bay windows, hedges, copings,
cellar doors, sidewalk elevators, fences, fire escapes and the
like, or similar projections or objects on, under or above any
adjoining streets or the premises, or within any set-back areas,
and variations between the lines or record title and fences,
retaining walls, hedges, and the like.
e. Maintenance, rental agreements, employment agreements and
service contracts, if any, charges for which shall be apportioned
on the Closing Date (the "Maintenance Contracts").
f. The mortgage hereinbefore referred to in Paragraph First,
subject further to the provisions of Paragraph NINTH.
g. Radio antenna and television antenna violations or
violations arising out of tenant air conditioner(s).
h. Building and zoning restrictions, ordinances, and
regulations affecting the Premises adopted by the city, town or
village in which the Premises lie or by any other governmental
authority having jurisdiction thereof, and all amendments or
additions thereto now or which will be in force and effect on the
Closing Date.
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i. Rights contained in instruments of record, if any, so
far as the same may be of present force or effect, in favor of
any public or quasi-public utility and not violated by existing
structures.
j. Violations of laws, regulations, ordinances, orders or
requirements, if any, noted in or issued prior to or subsequent
to the date hereof by any governmental or municipal department or
authority having jurisdiction over the Premises and any
conditions constituting such violations, although not so noted or
issued.
k. Any and all assessments becoming liens subsequent to the
date hereof, provided however that Seller will be responsible for
any prior period for which the assessment applies.
l. Unpaid real estate taxes, water and sewer charges, which
shall be apportioned on the Closing Date.
FOURTH: Except as otherwise herein expressly provided, the
"customs in respect to title closings" adopted by the Real Estate
Board of New York, Inc., shall apply to the apportionments and
other matters herein mentioned.
The following are to be apportioned on the Closing Date:
a. Prepaid Rents and Additional Rents as and when collected,
and any payments or subsidies of such rents under the County of
Suffolk's Section 8 Program;
b. Water meter charges and sewer rents, if any; unfixed
water meter charges, if any, shall be apportioned on the basis of
the last meter reading, provided, however, that if the Premises
are sold subject to any lease or leases under which the tenant or
tenants are obligated to pay water charges, such water charges
shall not be apportioned, and Purchaser shall look solely to the
said tenants for the payment of same, and Purchaser shall take
title subject to any such unpaid water meter charges
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owing by subject tenant or tenants, and same shall not be deemed
an objection to title;
c. Taxes on the basis of the fiscal year. If the closing
shall occur before a new tax rate is fixed, the apportionment of
taxes at the Closing shall be upon the basis of the old tax rate
for the preceding period applied to latest assessed valuation.
Promptly after the new tax rate is fixed, the apportionment of
taxes shall be recomputed. Any discrepancy resulting from such
recomputation and any errors or omissions in computing
apportionments at Closing shall be promptly corrected, which
obligations shall survive the Closing;
d. Security Deposits (I) made with LILCO for gas and
electric service to the Premises and (ii) made with the Suffolk
County Water Authority for water service to the Premises, in the
event such Deposits are not refundable to the Seller. Purchaser
shall pay same to Seller and Seller shall assign said Deposits to
Purchaser. It is not intended that said Deposits be apportioned.
e. Wages and payroll expenses, including, but not limited
to, social security, unemployment compensation, taxes, employee
disability insurance, and workmen's compensation insurance.
Adjustments shall be made to Purchaser for such expense
obligations assumed by Purchaser, including, but not limited to,
any vacations with pay and any other benefits due to employees
that may be accrued to those employees as listed on Schedule 1
annexed hereto and/or any replacements or new employees for those
employees listed on such Schedule, the same, if any, to be
assumed by Purchaser;
f. Charges, if any, arising out of service and maintenance
agreements and any replacements and/or renewals thereof;
g. Revenues, if any, arising out of waste collection
privileges, telephone booths, vending
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machines, and submetering agreements;
h. Charges for gas, steam and electricity;
I. Vault tax or charges, if any;
l. Interest on tenant securities to the extent permitted
under applicable law;
j. Any and all other items commonly adjusted between sellers
and purchasers of real property.
FIFTH: If any tenant is in arrears in the payment of rent on
the Closing Date, rents received from such tenant after the
Closing shall be applied in the following order or priority: a)
first to the month in which the Closing occurred; b) then to any
month or months following the month in which the Closing
occurred; c) then to the month preceding the month in which the
Closing occurred; and (d) then to the period prior to the month
preceding the month in which the Closing occurred. If rents or
any portion thereof received by Seller or Purchaser after the
Closing are payable to the other party by reason of this
allocation, the appropriate sum, less a proportionate share of
any reasonable attorneys' fees, costs and expenses of collection
thereof, shall be promptly paid to the other party, which
obligations shall survive the Closing. If any tenants are
required to pay percentage rent, escalation charges for real
estate taxes, operating expenses, cost-of living adjustments,
major capital improvement increases or other charges of a
similar nature ("Additional Rents") and any Additional Rents
are collected by Purchaser after the Closing which are
attributable in whole or in part to any period prior to the
Closing, then Purchaser shall promptly pay to Seller Seller's
proportionate share thereof, less a proportionate share of any
reasonable attorneys' fees, costs and expenses of collection
thereof, if and when the tenant paying the same has made all
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payments of rent and Additional Rent then due to Purchaser
pursuant to the tenant's Lease, which obligation shall survive
the Closing.
In the event any such arrears attributable to a period prior
to Closing exists 120 days after the Closing, then Purchasers, at
Seller's option, shall assign such arrearage amounts to Seller
who may sue or otherwise proceed to collect same.
SIXTH: To the extent that any of the tenants in the
buildings on the Premises have deposited rent securities pursuant
to the terms of their respective leases, said security deposits
(where not prohibited by the terms of a lease) will be delivered
to Purchaser at Closing against a receipt and indemnity agreement
in the form annexed hereto as Exhibit ""C". Seller will not apply
security deposits between the date hereof and the Closing Date
unless a tenant has been evicted from the Premises. (Rent and
Security Schedules annexed as Exhibit ""D").
SEVENTH: Seller may enter into new leases, or renewals or
modifications of existing leases, for the premises, or any
portions thereof, (a) without first obtaining Purchaser's consent
thereto, provided same is required by law or, (b) if not required
by law, provided any such new lease, renewal or modification
provides for annual rental payments not less than the average
market rent for comparable apartments at the Property, and the
tenant is of the same general character and financial stability
as other tenants to whom Seller has rented to in the past.
EIGHTH: Purchaser represents that if it elects to proceed
with the transaction after the investigation described in the
TENTH and ELEVENTH paragraphs, it will have inspected the
Premises, the buildings constituting part of the Premises, the
uses thereof and the fixtures, equipment and personal property
included in the sale, if any, to its satisfaction, that it
will have independently
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investigated, analyzed and appraised the value and profitability
thereof; that it will have reviewed all documents which are
referred to herein with respect to the Premises and any other
documents Purchaser desired; that it is thoroughly acquainted
with all of the foregoing and that it will take title to the
premises "AS IS" and in its present condition, subject to
reasonable use, wear, tear and natural deterioration between the
date hereof and the Closing Date; provided, however, that Seller
will use its reasonable efforts to continue to maintain the
Premises in the same general condition as it has been maintained
between the date hereof and the Closing Date. Purchaser expressly
acknowledges that, except as expressly provided herein, Seller
(or any of its agents or representatives) has not made and does
not make, and is unwilling to make, any representation or
warranties as to the physical condition, rents leases or tenants,
expenses, use or operation or any other matter or thing affecting
or related to the premises and Purchaser hereby expressly
acknowledges that no such representations have been made and
Seller has held out no inducements to Purchaser to execute this
Agreement. Without limiting the generality of the foregoing,
Purchaser has not relied on any representations or warranties, in
either case express or implied, except as expressly hereinafter
set forth, as to (a) the current or future real estate tax
liability, assessment or valuation of the Premises; (b) the
potential qualification of the Premises for any and all benefits
conferred by federal, state or municipal laws, whether for
subsidies, special real estate tax treatment, insurance,
financing, or any other benefits, whether similar or dissimilar
to those enumerated; (c)the compliance of the Premises, in its
current or any future state with applicable zoning ordinances and
the ability to obtain a variance in respect to the Premises and
possible noncompliance with said zoning ordinances; (d) the
availability of any financing for the purchase, alteration,
rehabilitation or operating of the Premises from any source,
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including, but not limited to, state, city or federal governments
or any institutional lenders; (e) the current or future use of
the Premises; (f) the present operating state of any and all
machinery or equipment on the Premises, subject to reasonable
wear and tear, or their suitability or rehabilitation or
renovation; (g) the presence or absence of any rules or notices
of violations of law issued by any governmental authority subject
to the provisions hereof; (h) the layout, area, square feet
dimensions in any schedule of lease, leases, rents, income,
expenses or operation of the Premises; and (I) the presence or
absence of any asbestos or any other hazardous substances on,
under or about the Premises.
NINTH: As described in Paragraph NINTH hereof, the Premises
are presently encumbered by a first mortgage to the favor of JSB
in the principal amount of $6,675,000.00. A copy of said Mortgage
and the Mortgage Note have previously been delivered to
Purchasers. Seller acknowledges that Purchaser intends to apply
to JSB for consent to the assumption by Purchaser of the Note and
Mortgage, and Seller and Purchaser agree that Purchaser's
obligations under this Agreement are expressly conditioned upon
the granting by JSB of its consent to such assumption of the Note
and Mortgage by Purchaser. Seller agrees to cooperate with
Purchaser and Seller shall use all commercially reasonable
efforts to cause JSB to consent to the transfer of the Property
to Purchaser, and to permit the assumption of the Note and
Mortgage by Purchaser. Purchaser shall promptly apply to JSB for
consent to assumption by the Purchaser of the Note and Mortgage,
and shall comply with all of the reasonable terms and conditions
of JSB with respect thereto and shall pay the reasonable fees
and disbursements of JSB's attorneys in connection therewith;
provided further, that Purchaser shall be responsible for the
payment of the l% assumption fee set forth in the Note and
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Mortgage, or, alternatively, for obtaining JSB's waiver of its
right to impose and collect the 1%% assumption fee.
TENTH: a) Purchaser shall have the right for a period of
thirty days (30) from the execution of this Contract by the
parties (the "Due Diligence Period"), to conduct, or cause to be
conducted, an Environmental Inspection of the Property by an
inspector selected by Purchaser. The cost and expense of such
Environmental Inspection shall be paid solely by Purchaser.
b) Seller agrees to cooperate fully with Purchaser with
respect to the Environmental Inspection. In the event the results
of the Environmental Inspection disclose any deficiency in the
compliance of the Property with any applicable Environmental law
or disclose the presence of any Hazardous Substance, Purchaser
may either (I) waive such deficiency and consummate the
transactions contemplated by this Agreement, or (ii) terminate
this Agreement.
ELEVENTH: a) During the Due Diligence period described in
paragraph TENTH hereinabove, Purchaser shall have reasonable
access to the Properly, either personally or by authorized agent,
to inspect the Property, and the Personal Property (including,
but not limited to performing engineering and Phase I
environmental studies), the Seller's books and records
pertaining to the Property and the Personal Property, matters
relating to zoning compliance and compliance by the Property and
the Personal Property with other applicable governmental
regulations, the market in which the property is located,
Maintenance Contracts, the tax assessment on the Property as it
relates to the purchase price and to the assessment on comparable
properties and such other matters as Purchaser shall deem
reasonably necessary or appropriate in connection with the
Property and the Personal Property.
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b) Purchaser shall be allowed access to the entire Property,
including, at Purchaser's option, an opportunity to inspect
apartment units, all mechanical equipment, systems and fixtures
forming a part thereof subject, however, to Seller's reasonable
notice and timing constraints. Furthermore, as a part of
Purchaser's inspections, Purchaser shall be entitled to
cause such engineering and Environmental Inspections to be
conducted at the property as Purchaser may reasonably desire,
including, without limitation, inspections or studies which may
require the drilling of holes in the parking lot or non-
structural components of the Improvements, the removal of small
soil, carpet or similar samples, and the conducting of air tests
as Purchaser may require. In conducting any such entry,
investigation, test, or inspection, such inspections may be
conducted at all reasonable times; however, no party permitted
entry hereunder will unreasonable interfere with the operation of
the Property or the peaceable possession by individual tenants of
their respective apartment units.
c) Purchaser agrees to fully and completely repair and
restore the Property in the event of any damage whatsoever
arising out of the acts or omissions of Purchaser, Purchaser's
agents or consultants in connection with the inspections
conducted during such period. Purchaser hereby indemnifies and
holds Seller harmless from and against any loss, damage, injury,
claim or cause of action Seller may suffer or incur and arising
out of Purchaser's inspections of the Property undertaken
pursuant to this Agreement.
d) In the event Purchaser disapproves of any matter reviewed
or discovered during the Due Diligence Period, Purchaser shall
have the right to terminate this Agreement by the delivery of
written notice of termination on or before the expiration of such
period.
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e) Seller will provide a signed representation letter as
prescribed by Generally Accepted Auditing Standards as
promulgated by the Auditing Standards Division of the American
Institute of Public Accountants which representation is required
to enable an Independent Public Accountant to render an opinion
on such financial statements. Seller will provide access by
Purchaser's representatives, to all financial and other
information relating to the Property as Seller possesses.
f) If Purchaser terminates this Agreement in accordance with
this paragraph, Purchaser shall receive a full refund of the
Deposit, including any interest or other earnings thereon, and
thereafter Seller and Purchaser shall have no further obligations
or liabilities hereunder, one to the other. In the event the
Agreement is not terminated in accordance with the foregoing
provision, the Deposit shall become non-refundable upon the
expiration of such Period.
TWELFTH: Seller shall not be liable or bound for any verbal
or written statements, representation, real estate brokers'
"setups" or information pertaining to the Premises furnished by
any real estate broker, agent, employee, servant, or any other
person, unless the same are specifically set forth herein. All
oral or written prior statements, representations, or promises,
if any, and all prior negotiations and agreements are superseded
by this Agreement and merged herein.
THIRTEENTH: Seller and Purchaser hereby represents and
warrant that it has dealt with no broker in connection with this
Contract or the transaction hereunder, except for Gilbert L.
Snyder of Charles H. Greenthal Commercial Corp., who shall be
compensated by Seller as per separate agreement. Sellers and
Purchasers hereby agree they shall, jointly and severally,
indemnify and hold the other and/or their affiliates harmless
from and against any damages, judgments, claims, costs and
expenses (including reasonable attorneys fees) which may be
incurred by the indemnified party
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and/or its affiliates by reason of the claims of any broker who
asserts that he is due, all or part, of a commissions for this
transaction claiming that he (or any persons or entities
affiliated with, or claiming through such person) dealt with the
indemnifying party. This paragraph shall survive the Closing
Date.
FOURTEENTH: In the event of default by Purchaser in the
performance of any of the material terms and/or provisions of
this Agreement, the Deposit, together with interest earned
thereon, if any, shall be retained by Seller as liquidated
damages and not as a penalty (it being agreed that actual damages
in such event are difficult if not impossible to ascertain) and
upon such retention this Agreement shall be deemed null, void and
of no further force or effect and neither party hereto shall have
any further rights and/or liabilities each with respect to the
other arising from or out of this Agreement.
FIFTEENTH Purchaser agrees, at is expense, to order promptly
a commitment (the "Title Commitment") for fee title insurance to
the Premises. The Title Commitment shall (a) be in the amount of
the Purchase Price and (b) be a commitment to issue a policy (the
"Title Policy") of fee title insurance with respect to the
Premises, insuring title to the Premises subject only to: (I) the
Permitted Encumbrances and (ii) the standard printed exclusions
contained in the Title Commitment and the Title Policy. Purchaser
shall give Seller written notice as to any matters contained in
the Title Commitment which are not in accordance with this
Agreement and to which Purchaser has elected not to take title
subject to. Delivery of a copy of the Title Commitment shall be
deemed such written notice, so long as same is delivered to
Seller's counsel not less than fifteen (15) days prior to the
Closing Date, except for any exceptions not set forth by the
Title Company in the Title
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commitment, but subsequently raised by the Title Company prior to
Closing in a continuation. If it shall appear that any such
objections (the "Objections") to title may be removable according
to reasonable expectation within ninety (90) days after the date
set forth in paragraph SECOND hereof as the Closing Date, Seller
shall have the option(s) to extend the Closing Date for up to
ninety (90) days, with Purchaser's obligations hereunder to
remain in full force and effect during such extension(s). If the
Objections are not removed within such ninety (90) day period,
then either party shall have the right to terminate this
Contract. Nothing herein contained shall require Seller to bring
any action or proceeding, or to incur any expense or make any
payment in order to eliminate such Objections.
SIXTEENTH: (a) In the event the Closing fails to occur
solely by reason of Seller's inability to perform hereunder,
excepting Seller's willful default, then this Agreement shall
terminate (except as herein expressly provided), the Deposit,
together with interest, if any, earned thereon, shall be refunded
to Purchaser and both parties shall be relieved of any further
rights or obligations hereunder. Notwithstanding anything to the
contrary, Seller shall not be required to expend any money in
order to eliminate title defects or otherwise perform hereunder,
except as specifically set forth in Paragraph TWENTY-THIRD
hereof. If Seller willfully defaults hereunder, Purchaser shall
be entitled to any and all remedies at all or in equity
including, but not limited to, specific performance of this
Contract.
(b) Notwithstanding the foregoing, Purchaser may accept such
title as Seller may be able to convey, without reduction of the
Purchase Price or any credit or allowance against the same and
without any other liability on the part of Seller. The acceptance
of Seller's Deed by Purchaser shall
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be deemed to be full performance and discharge of every agreement
and obligation on the part of Seller to be performed pursuant to
the provisions of this Agreement except those, if any, which are
herein specifically stated to survive the Closing Date.
SEVENTEENTH: Seller makes no representations and assumes no
responsibility with respect to the continued occupancy of the
Premises or any part thereof by any tenant. The removal of
tenants whether by summary proceedings or otherwise prior to the
Closing Date shall not give rise to any claim on the part of
Purchaser. Further, Purchaser agrees that it shall not be an
objection to title that any tenants now or hereafter in
possession of parts of the Premises may be holdover tenants or in
default under their leases on the Closing Date.
EIGHTEENTH: The parties hereto agree that no part of the
purchase price paid hereunder has been paid by Purchaser for any
personal property. However, if any federal, state or local
governmental body deems any part of the purchase price to have
paid for any personal property, Purchaser agrees to pay to Seller
on the Closing Date or subsequent thereto the amount of any sales
tax payable in connection herewith. The provisions of this
Paragraph shall survive the Closing Date.
NINETEENTH: Seller represents that it has filed a proceeding
for the reduction of real estate taxes with respect to the Premises,
which proceeding is currently pending. Seller shall inform Purchaser
as to the particulars of such proceeding and Purchaser, at its
option, may continue the prosecution of the claim for reduction of
real estate taxes. In the event Purchaser elects to do so and tax
savings are effectuated, then Seller shall receive such savings
as are referable to the period prior to the Closing.
TWENTIETH: a) Any notice or demand which, under the
provisions of this Agreement
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or otherwise, must or may be given or made by any party hereto,
shall be in writing and shall be given or made by (x) mailing the
same by postage prepaid certified mail, return receipt requested,
or (y) sending same by any express mail or national overnight
delivery service addressed (I)to Seller, at the address set forth
above with a copy to Seller's attorneys as follows: Allen Bodner,
Esq., One Whitehall Street, New York, New York 10004; (ii) to
Purchaser at the address set forth above with a copy to
Purchaser's attorney as follows: Ann McCormick, Esq., Home
Properties, 850 Clinton Square, Rochester, New York 14604. Either
party may designate by notice in writing a new or other address
to which such notice or demand shall thereafter be so given, made
or mailed. Any notice given hereunder (I) by mail shall be deemed
delivered when deposited in a United States general or branch
post office, enclosed in a certified, prepaid wrapper, return
receipt requested addressed as hereinbefore provided or (ii) by
express mail or national overnight delivery service shall be
deemed delivered when delivered by such service or when delivery
is refused.
b) Copies required to be delivered to the parties' attorney
by subparagraph (a) may be delivered by (x) certified first-class
mail, return receipt requested, (y) hand or (z) any express mail
or national overnight delivery service.
c) The respective attorneys for each party shall have the
right, but not the obligation, to give any notice or demand on
behalf of its respective client and any such notice or demand so
given by such attorney shall be deemed to have been given by such
attorney's client.
TWENTY-FIRST a) Seller and Purchaser hereby designate Allen
Bodner, Esq., ("Bodner") One Whitehall Street, New York, New York
10004 as Escrow Agent to receive and hold subject to the
provisions of this Paragraph TWENTY-FIRST the Deposit delivered
herewith by
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Purchaser in accordance with Paragraph FIRST hereof and Allen
Bodner agrees to act as such Escrow Agent subject to the
provisions of this Paragraph TWENTY-FIRST. All interest earned on
the Deposit shall be paid to the party entitled to the Deposit
hereunder and wherever the term "Deposit" is used herein,
same shall be deemed to mean the "Deposit" and all
interest earned thereon.
b) On receipt by Bodner of a statement executed by
Purchaser, prior to, on or after the Closing Date that title to
the Premises has not closed under this Agreement because of a
default by Seller under this Agreement or because of Seller's
inability to convey title to the Premises in accordance with the
provisions of this Agreement or if the Contract is terminated,
Bodner shall, within two (2) business days, deliver a copy of
said statement to Seller and return the Deposit to Purchaser on
the fifth (5th) business day after receipt by Bodner of said
statement unless Bodner, prior to such return, receives from
Seller a statement contesting the accuracy of Purchaser's
statement and demanding retention of said Deposit by Bodner.
c) On receipt by Bodner of a statement executed by Seller
prior to, on or after the Closing Date that title to the Premises
has not closed under this Agreement because of a default by
Purchaser under this Agreement, Bodner shall, within two (2)
business days, deliver said statement to Purchaser and deliver
the Deposit to Seller on the fifth (5th) business day after
receipt by Bodner of such statement by Seller unless Bodner prior
to such delivery receives from Purchaser a statement contesting
the accuracy of Seller' s statement and demanding retention of
said Deposit by Bodner.
d) On receipt by Bodner of a statement from Seller under
subparagraph "b" above or from Purchaser under subparagraph "c"
above, Bodner shall retain the Deposit and thereafter deliver
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the same to either Seller or Purchaser as Seller or Purchaser may
direct by a statement executed by them both, provided Bodner may,
at any time after receiving such a statement to retain the
Deposit transfer the Deposit to a court of competent jurisdiction
for such disposition as may be directed by such court.
e) Bodner shall not be liable to either Seller or Purchaser
in connection with its performance as Escrow Agent hereunder
except in the event of willful misconduct or gross negligence.
f) Upon delivery of the Deposit to either Purchaser, Seller
or a court of competent jurisdiction under and pursuant to the
provisions of this Paragraph TWENTY-FIRST. Bodner shall be
relieved of all liability, responsibility or obligation with
respect to or arising out of the Deposit and any and all of its
obligations arising therefrom.
g) The parties hereby agree to indemnify Bodner for, and
hold Bodner harmless against, any loss, liability or expense,
incurred without willful misconduct or gross negligence on the
part of Bodner, arising out of, in connection with, its
acceptance of, or the performance of, its duties and obligations
under this Agreement, as well as the costs and expenses of
defending against any claim or liability arising out of or
relating to this Agreement. This subparagraph shall survive the
Closing Date.
h) Bodner shall be fully protected in acting on and relying
upon any written advice, certificate, notice, direction,
instrument, request or other paper or document which Bodner in
good faith believes to be genuine and to have been signed or
presented by the proper party or parties. Bodner may assume that
any person purporting to give such advice, certificate, notice,
direction,
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instrument, request or other paper or document has been duly
authorized so to do. Bodner assumes no responsibility for the
accuracy of the recitals thereof. This subparagraph shall
survive the Closing Date.
TWENTY-SECOND: : Seller shall not be required to perform any
repairs and/or restoration of any apartment at the Premises after
the tenant thereof vacates the same other than ordinary cleaning
and repainting required to re-rent the same.
TWENTY-THIRD: Subject to the terms of Paragraph SIXTEENTH
hereof, no liens, encumbrances or defects affecting title to the
Premises on the Closing Date, except as stated in this Agreement,
shall be objections to title provided that the same may be
satisfied, discharged or released of record upon the payment or
deposit of a fixed sum of money and the Title Company marks same
"omitted" from the title policy, and provided further that Seller
allows to Purchaser out of the purchase price the said sum
together with interest and penalties to the day reasonably
required by the Title Company and the approximate amount of any
filing, docketing or recording fees. In the event the cost of
curing such liens, encumbrances and defects exceeds the sum or
$25,000, Seller shall have the option of terminating this
Contract.
TWENTY-FOURTH: The provisions of Section 5-1311 of the
General Obligations Law shall apply to the sale and purchase
provided for in this Contract.
TWENTY-FIFTH: Except as hereinafter provided, this Agreement
may not be assigned by Purchaser and any assignment or attempted
assignment by Purchaser shall constitute a default by Purchaser
hereunder. Notwithstanding the foregoing, this Agreement may be
assigned by Purchaser to an entity controlled by Home Properties
of New York, Inc. so long as Purchaser delivers to Seller,
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at least twenty (20) days prior to the Closing Date:
I) a copy of the written assignment and assumption
agreement, in form and substance satisfactory to Seller.
TWENTY-SIXTH: (a) On the Closing Date Seller shall pay any
and all New York State Real Property Transfer Taxes imposed by
Section 1402 of Article 31 of the New York State Tax Law, and
will also deliver to Purchaser copies of the returns required by
the said statutes and the regulations issued pursuant to the
authority thereof, duly signed and sworn to by Seller; Purchaser
and Seller agree to sign and swear to the said returns and Seller
shall cause said returns to be delivered to the Title Company on
the Closing Date.
(b) Purchaser, if request is made within three (3) days
prior to the Closing Date, shall provide at the Closing a
separate certified or official bank check drawn on any banking
institution described in Paragraph FIRST in the amount of the
taxes under this Paragraph TWENTYSIXTH, which amount shall be
credited against the balance of the Purchase Price payable at the
Closing.
The provisions of this Paragraph TWENTY-SIXTH shall survive
the delivery of the deed.
TWENTY-SEVENTH: At the Closing, Seller shall deliver the
following to Purchaser: a) Bargain and Sale Deed with covenants
against grantor's acts.
b) Bill of Sale of personal property.
c) Assignment of Leases.
d) To the extent they are in Seller's possession or control,
all lease files and leases.
e) A certified schedule of all security deposits certified
by the Seller and, the most recent reports with respect thereto
issued by each banking organization in which they are deposited
pursuant
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to GOL Section 7-103D and a check or credit to Purchaser in the
amount of any cash security deposits, including any interest
thereon, held by Seller on the Closing Date.
f) A schedule, prepared by the Seller updating the rent
schedule and setting forth all arrears in rents and all
prepayments of rents, all summary proceedings and copies of all
documents relative thereto.
g) All Maintenance Contracts which are in effect on the
Closing Date.
1. h) Assignment of Maintenance Contracts.
I) To the extent they are then not posted at the Premises,
copies of certificates of occupancy, certificates, .licenses,
permits, authorizations and approvals issued for or with respect
to the Premises by governmental and quasi-governmental
authorities having jurisdiction, provided they are in Seller's
possession.
j) Such affidavits as Purchaser's title company shall
reasonably require in order to omit from its title insurance
policy all exceptions for judgments, bankruptcies or other
returns against persons or entities whose names are the same as
or similar to Seller's name.
k) (1) Checks to the order of the appropriate governmental
authorities in payment of all applicable real property transfer
taxes and copies of any required tax returns therefor executed by
Seller, which checks shall be certified or official bank checks
if required by the taxing authority, unless Seller elects to have
Purchaser pay any of such taxes on reasonable prior notice (not
less than three (3) days) and credit Purchaser with the amount
thereof, and (2) a certification of non-foreign status, in form
required by the code Withholding Section, signed under penalty
of perjury. Seller understands that such certification will be
retained by Purchaser and will be made available to the
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Internal Revenue Service on request.
l) An original letter, executed by Seller or by its agent,
advising the tenants of the sale of the Premises to Purchaser and
directing that rents and other payments thereafter be sent to
Purchaser or as Purchaser may direct.
m) Possession of the Premises in the condition required by
this Contract, subject to the leases and tenancies, and keys
therefor.
n) Any other documents required by this Contract to be
delivered by Seller or reasonably requested by Purchaser.
At the Closing, Purchaser shall:
1 ) Deliver to Seller checks in payment of the portion of
the Purchase Price payable at the Closing as adjusted for
apportionments, plus the amount of escrow deposits, if any,
assigned pursuant to this Contract.
2) Deliver to Seller an agreement indemnifying and agreeing
to defend Seller against any claims made by tenants with respect
to tenants' security deposits in accordance with Exhibit C
hereof.
3) Cause the deed to be recorded, duly complete all required
real property transfer tax returns and cause all such returns and
checks in payment of such taxes to be delivered to the
appropriate officers promptly after the Closing.
4) Deliver any other documents required by this Contract to
be delivered by Purchaser or reasonably requested by Seller.
TWENTY-EIGHTH: If a search of title discloses judgments,
bankruptcies, or other returns
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against other persons having names the same as or similar to that
of Seller, Seller will on request deliver to Purchaser an
affidavit showing that such judgments, bankruptcies or other
returns are not against Seller.
TWENTY-NINTH: Purchaser represents the following, which
representations shall survive the Closing Date:
a) Purchaser is or will be at closing, a New York limited
partnership, validly existing and in good standing under the laws
of the State of New York.
b) Purchaser has full power and authority and has taken all
corporate or partnership action, as the case may be, necessary to
enter into and perform the terms, covenants and conditions of
this Contract.
c) The execution, delivery, performance and consummation of
the transaction contemplated by this Contract do not and will not
(i) contravene any provisions of the partnership agreement and
certificate of Purchaser, (ii) conflict with or result in a
breach of any agreement or instrument to which Purchaser is a
party, or by which any of Purchaser's properties or assets are
bound, (iii) violate or require any consent or approval under any
judgment, injunction, order, writ, license or decree of any court
of governmental authority applicable to Purchaser, or (iv)
require any consent or approval of, notice to or filing,
registration or qualification with, any governmental authority
other than as contemplated by ( 1 ) any state or local sales tax
laws, and (2) the New York State Real Estate Transfer Tax. This
Contract has been, and at the Closing the other instruments and
documents required or contemplated hereby will have been, duly
authorized, executed and delivered by Purchaser and this Contract
constitutes, and such other instruments and documents when
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delivered will constitute, the valid and binding obligations of
Purchaser, enforceable against it in accordance with their
respective terms (except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally or by the
principles governing the availability of equitable remedies).
d) (I) No consent, approval or authorization of any
governmental entity is required for the execution, delivery and
performance by Purchaser of this Contract and other instruments
and documents required or contemplated hereby, and (ii) no
consent of any person is required for the execution, delivery and
performance by Purchaser of this Contract and such other
instruments, agreements and documents or the consummation of the
transactions contemplated hereby, other than the Board of
Directors of Home Properties of New York, Inc.
THIRTIETH: Seller represents the following, which
representations shall survive the Closing Date:
a) Seller is a New York limited partnership, validly
existing and in good standing under the laws of the State of New
York.
b) Seller has full power and authority and has taken all
corporate or partnership action, as the case may be, necessary to
enter into and perform the terms, covenants and conditions of
this Contract.
c) The execution, delivery, performance and consummation of
the transaction contemplated by this Contract do not and will not
(I)contravene any provisions of the partnership agreement and
certificate of Seller, (ii) conflict with or result in a breach
of any agreement or instrument to which Seller is a party, or by
which any of Seller's properties or assets are bound, (iii)
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violate or require any consent or approval under any judgment,
injunction, order, writ, license or decree of any court of
governmental authority applicable to Seller, or (iv) require any
consent or approval of, notice to or filing, registration or
qualification with, any governmental authority other than as
contemplated by ( 1 ) any state or local sales tax laws, and (2)
the New York State Real Estate Transfer Tax. This Contract has
been, and at the Closing the other instruments and documents
required or contemplated hereby will have been, duly authorized,
executed and delivered by Seller, and this Contract constitutes,
and such other instruments and documents when delivered will
constitute, the valid and binding obligations of Seller,
enforceable against it in accordance with their respective terms
(except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally or by the principles
governing the availability of equitable remedies).
d) (I) No consent, approval or authorization of any
governmental entity is required for the execution, delivery and
performance by Seller of this Contract and other instruments and
documents required or contemplated hereby, and (ii) no consent of
any person is required for the execution, delivery and
performance by Seller of this Contract and such other instruments
,agreements and documents or the consummation of the transactions
contemplated hereby.
e) To the best of Seller's knowledge after due inquiry,
Seller has no liability or obligation of any nature which in any
way affects or is related to the Property or the Personal
Property whether now due or to become due, absolute, contingent
or otherwise, including liabilities for taxes (or any interest of
penalties thereto) other than disclosed in this Agreement.
f) To the best of Seller's knowledge, after due inquiry,
there is no litigation, proceeding
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or investigation pending, or to the knowledge of Seller
threatened, against or affecting Seller that might affect or
relate to the validity of this Agreement, any action taken or to
be taken pursuant hereto, or the Property, the Personal Property
or any part of the operation thereof, whether or not fully
covered by insurance or any proceeding pending for the increase
or decrease of the assessed valuation of all or a portion of the
Property.
g) There are no Maintenance Contracts with respect to the
Property or the Personal Property which will continue in effect
after the Closing except as set forth on Schedule 2 attached
hereto. Seller and Seller's employees and agents will not enter
into any additional Maintenance Contracts, prior to the Closing
unless such contract is terminable on no more than 30 days notice
or Purchaser has consented to such Contract.
h) There are no executory contracts connected with the
Property or the Personal Property, except as set forth on
Schedule 2 attached hereto. Seller and Seller's employees and
agents have not let, and will not let any contracts for
improvements to the Property which will not be fully completed
and fully paid for prior to Closing.
i) Until Closing, Seller shall continue to fulfill all of
its obligations under the terms of the leases encumbering the
Property, and under the Maintenance Contracts, and Seller shall
operate, maintain and repair at Seller's expense, all
landscaping, buildings, fixtures and facilities, in accordance
with normally accepted business principles, and Seller shall
continue to operate the Property in a commercially reasonable
manner.
j) All of the ranges and refrigerators located the apartment
units are the property of the Seller and not of the tenants
within
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THIRTY-FIRST: a) This Agreement shall not be altered,
amended, changed, waived, terminated or otherwise modified in any
respect or particular unless the same shall be in writing and
signed by or on behalf of the party to be charged therewith.
b) This Agreement shall be interpreted and enforced in
accordance with the laws of the State of New York. If any
provisions of this Agreement shall be unenforceable or invalid,
the same shall not affect the remaining provisions of this
Agreement and to this end, the provisions of this Agreement are
intended to be and shall be severable.
c) This Agreement shall be binding upon and shall inure to
the benefits of the parties hereto and to their respective heirs,
executors, administrators, successors and assigns.
d) All prior understandings and agreements between the
parties are merged in this Agreement which alone fully and
completely expresses the agreement between them, and which is
entered into after full investigation, neither party relying upon
any statement or representation made by the other not embodied in
reasonable construction in accordance with the intention of the
parties hereto.
e) This Agreement shall be construed without regard to or
aid of any presumption, rule or canon requiring construction
against the grantor, Seller or party drawing this Agreement.
f) This Agreement shall not be recorded by Purchaser and any
recordation or attempted recordation by Purchaser hereof shall be
void and shall constitute a default by Purchaser hereunder.
g) No failure or delay of either party in the exercise of
any right given to such party hereunder or the waiver by any
party of any condition hereunder for its benefit (unless the time
specified herein for exercise of such right, or satisfaction of
such condition, has expired) shall
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constitute a waiver of any other or further right nor shall any
single or partial exercise of any right preclude any other or
further exercise thereof or any other right. The waiver of any
breach hereunder shall not be deemed to be a waiver of any other
or any subsequent breach hereof.
h) Each party hereto shall from time to time execute,
acknowledge and deliver such further instruments and perform such
additional acts as the other party may reasonably request to
effectuate the intent of this Agreement.
I) Each of the exhibits and schedules referred to herein and
attached hereto is incorporated herein by this reference.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement the day and year first above written.
SELLER:
MID-ISLAND LIMITED PARTNERSHIP
By: /s/ Mid-Island Corporation
---------------------------
By: /s/ Eli Schron
---------------------------
PURCHASER:
Home Properties of New York, L.P.
General Partner
By: Home Properties of New York, Inc.
By: /s/ Norman Leenhouts
-----------------------------
Escrow Agent:
/s/ Allen Bodner Esq.
-----------------------------
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PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement ("Agreement"), made as of
the 2nd day of September, 1997 by and between
HOME PROPERTIES OF NEW YORK, L.P., a New York limited
partnership, having its principal office at 850 Clinton
Square, Rochester, New York 14604, (herein called "Buyer"),
and
ANTHONY M. PALUMBO AND DANIEL PALUMBO, having an office at
2567 Sheridan Drive, Tonawanda, NY 14150 (herein called the
"Seller").
W I T N E S S E T H:
WHEREAS, Seller is the fee owner of certain residential
apartment complexes and adjacent land located in the Towns of
Tonawanda and Amherst, County of Erie, State of New York more
commonly known as Tranquillity Estates and the Emerson Drive and
Colvin Apartments, all as more particularly described below;
WHEREAS, Seller desires to sell said property to Buyer, and
Buyer desires to purchase that property from Seller, upon the
happening of certain events;
NOW, THEREFORE, in consideration of the property, mutual
covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency whereof being hereby
acknowledged, the parties hereby agree as follows:
1. REAL PROPERTY DESCRIPTION. The Real Property to be conveyed
consists of one or more parcels of land known as Tranquillity
Estates, which includes 324 apartments ("Tranquillity")Emerson
Drive Apartments, which includes 96 apartments ("Emerson") and
Colvin Apartments, which includes 32 apartments ("Colvin")
(collectively, the "Projects"), located in the Towns of Tonawanda
and Amherst and State of New York, more particularly described on
Exhibit "A", attached hereto, together and including all
buildings and other improvements thereon, including but not
limited to, the 452 apartment units, and all rights of Seller in
and to any and all streets, roads, highways, alleys, driveways,
easements and rights-of-way appurtenant thereto (the foregoing
are hereafter collectively referred to as the "Property").
2. OTHER ITEMS. The following items now in or on the Property,
are included in this sale and shall become the property of Buyer
at Closing (as hereafter defined):
A all heating, plumbing and lighting fixtures,
B ranges (one for each apartment), refrigerators (one for
each apartment, except that some of the refrigerators at Colvin
are owned by residents), and dishwashers (one for each apartment
at Tranquility),
C water heaters,
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D any and all bathroom fixtures, wall-to-wall carpeting,
traverse rods, exhaust fans, hoods, signs, screens, maintenance
building, model unit furniture, fences, carpeting and runners,
cabinets, mirrors, shelving, any humidifier and dehumidifier
units, air conditioning units other than such units owned by
tenants, mail boxes, office furniture, and related equipment, if
any, in connection with the Project,
E any fixtures appurtenant to the Property and any other
furniture or equipment, used in connection with the operation and
maintenance of the Property (hereinafter with the items listed in
A-D above, collectively, the "Other Items").
Seller's interest in the Other Items will be transferred to
Buyer by absolute Bill of Sale in substantially the form attached
hereto as Exhibit B. Seller makes no warranties, representations
or covenants with respect to the condition of the Other Items.
Seller shall convey the Other Items to Buyer in their current "as
is" condition, subject to reasonable wear and tear.
3. EXCEPTIONS. Buyer agrees to accept title to the Property
subject only to the following:
A. Restrictive covenants of record common to the tract or
subdivision, provided same have not been violated, unless said
violations have been released under Section 2001 of the Real
Property Actions and Proceedings Law.
B. Water line, sanitary sewer, drainage, gas line and
main, electrical, telephone easements and other easements of
record provided that, no building or other improvements,
including Project signage, are located over the area covered by
such easement or are adversely affected.
C. The existing financing that is secured by the Property
(the "Existing Loan") in the event that Buyer elects to assume
such Existing Loan and provided that such Existing Loan is
current and is not in default and no event which could result in
a default shall be in existence on the Closing Date (as
hereinafter defined
4. PRICE AND MANNER OF PAYMENT.
A. The purchase price for the Property shall be a total of
Eleven Million Three Hundred Thousand and NO/100 ($11,300,000)
(the "Purchase Price") payable as follows: (i) by payment of
$10,000 (the "Deposit") as a deposit; (ii) by assumption of the
Existing Loan if Buyer so elects to assume the Existing Loan; and
(iii) the remainder payable at Closing by check or by wire
transfer to an account designated by Seller.
B The Deposit shall be paid to Renaldo, Myers & Palumbo
(the "Escrow Agent"), who shall deposit that amount in an
interest bearing account. The Deposit (with interest) shall be
applied against the Purchase Price at Closing. The Deposit shall
be forfeited to Seller as Seller's sole remedy and as liquidated
damages if Buyer fails to complete this transaction for any
reason other than a termination of this Agreement as permitted
herein. In the event of such a termination, Seller
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<PAGE>
shall promptly instruct the Escrow Agent to refund the Deposit
(with interest) to Buyer and upon the return of the Deposit this
Agreement shall wholly cease and terminate and neither party
shall have any further claim against the other by reason of this
Agreement.
5. ADJUSTMENTS AT CLOSING. The following shall be adjusted and
prorated between the parties at Closing as if the Buyer was the
owner of the Property as of midnight of the night preceding the
Closing Date:
A current fiscal year real estate taxes,
B water charges,
C sewer charges,
D fuel,
E electricity,
F all rentals and security deposits (including interest
thereon) pursuant to the leases,
G charges under the Service Contracts,
H laundry income;
I interest on the Existing Loan and any reserves required
under the Existing Loan;
J any other charges incurred with respect to the Property
which Seller is obligated to pay; and
K Rents.
(1) All rent payments due for the month of Closing
shall be deemed collected by the Seller and prorated as
between the parties as of the Closing.
(2) All rent collected after Closing, for any period
prior to Closing, shall belong to Seller and, if paid to
Buyer, Buyer shall promptly send such rent to Seller.
(3) All rent collected by Seller, prior to the Closing,
for rental periods subsequent to Closing shall be paid to
Buyer at Closing.
(4) All rent collected by Buyer or Seller for rental
periods after the Closing shall belong to Buyer and, if paid
to Seller, Seller shall promptly send such rent to Buyer.
The Buyer agrees to use reasonable efforts after the
Closing to collect delinquent rentals owed to the Seller,
provided that nothing herein shall require Buyer to institute
legal proceeding against any resident whose rental payments are
delinquent.
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Any rents collected after Closing which are applicable to
arrearages which arose prior to Closing shall be paid by Buyer to
Seller, net of the expenses of collection. If Buyer fails to
collect any rents due to Seller within 90 days following the
Closing, the Seller may proceed to collect the same in their own
name. Nothing herein shall make the Buyer liable to the Seller
for any failure to collect arrearages.
In addition, to the extent that the holder of the Existing
Loan requires that any reserves and escrows established by the
Seller remain in place after the Closing, the Buyer shall make
a payment to the Seller in the amount of the reserves and escrows
in place on the Closing Date, such payment to be made on the
Closing Date and in the same manner as the payment of the
Purchase Price.
Any error in the calculation of adjustments shall be
corrected subsequent to Closing with appropriate credits to be
given based upon corrected adjustments, provided, however,
that the adjustments (except if errors are caused by
misrepresentations) shall be final upon
expiration of the sixtieth day after Closing.
6. COSTS. Buyer shall pay all recording fees, Buyer's
attorneys' fees, the costs of obtaining a binder or commitment
from a title insurance company, the premium for Buyer's title
insurance policy, if Buyer elects to assume the Existing Loan any
assumption fees or other costs charged by the holder of the
Existing Loan in connection with the assumption of the Existing
Loan, and all other costs and expenses incidental to or in
connection with closing this transaction customarily paid for by
the purchaser of similar property. Seller shall pay the transfer
tax, attorneys' fees, if any, incurred by Seller in connection
with this transaction, and all other costs and expenses
incidental to or in connection with closing this transaction
customarily paid for by the seller of similar property.
7. SEARCH AND SURVEY. The Seller shall order within ten (10) days
after the date of this Agreement fully guaranteed tax, title and
United States District Court searches, and searches under the
Uniform Commercial Code of records in the appropriate offices as
against the Sellers, dated or redated subsequent hereto, and a
copy of the most recent title policies and instrument survey(s)
of the Property. Prior to Closing, the Seller shall deliver to
Buyer an update of the instrument survey(s) previously delivered,
dated or redated subsequent hereto certified to such persons and
organizations as may be designated by Buyer, made by a land
surveyor duly licensed by the State of New York, showing the
boundaries of the land conveyed hereunder, all improvements
thereon and the location of all easements, all improvements
thereon and the location of all easements, rights-of-way or
similar encroachments affecting same, prepared and certified in
accordance with the code of practice adopted by the New York
State Association of Professional Land Surveyors. Notwithstanding
the foregoing, the redated survey(s) must not differ in any
material respects from the survey initially delivered to and
reviewed by Buyer. The Seller shall pay for the continuation of
said tax, title, United States District Court, local tax and
Uniform Commercial Code searches to and including the date of
Closing and for any required revenue stamps in connection with
the transfer.
8. INSPECTION. Upon and after acceptance of this Agreement by
Seller, Seller agrees that Buyer and its authorized
representatives shall have the right and privilege to enter
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upon the Property and Seller's offices, upon reasonable notice,
during regular business hours, for the purpose of gathering such
information and conducting such environmental and engineering
studies or other tests and reviews as Buyer may deem appropriate
and necessary. All such inspections, studies, tests and reviews
shall be at Buyer's sole expense. Seller agree to cooperate with
Buyer by making available to Buyer such records, plans, drawings
or other data as may be in Seller's possession or control
relating to the Property and its operation; provided, however,
that Buyer agrees to indemnify Seller of and from any loss or
damage occasioned by such entry, and agrees further to restore to
its original condition, at Buyer's own cost and expense, any
property disturbed by such entry.
9. TITLE DOCUMENTS. At the time of Closing, Seller shall
deliver to Buyer the following:
A A warranty deed conveying good and marketable title to
the Property.
B A Bill of Sale conveying good title, free of all
encumbrances to the Other Items.
C A current rent roll ("Rent Roll") certified, as of the
date of Closing, which shall include a list of all tenants, all
rental obligations of each tenant with respect to the Property
and all security deposits (with interest).
D Complete originals of each lease listed on the Rent
Roll, together with an assignment of all leases encumbering the
Property to Buyer in substantially the form attached hereto as
Exhibit C and in recordable form.
E An assignment, assumption, and indemnity agreement of
all of Seller's rights and obligations to all contracts affecting
the Property (the "Service Contracts).
F An assignment, assumption, and indemnity agreement
whereby the security deposits (including interest thereon) are
transferred to the Buyer, who shall assume the responsibility
therefor. In lieu of an assignment of the security deposits, the
Seller may provide Purchaser with a credit at Closing for all
security deposits (with interest thereon) held by Seller with
respect to all leases encumbering the Property. In either case,
Buyer will indemnify and hold the Seller harmless from any claims
from residents with respect to security deposits transferred to
Buyer or for which Buyer is provided a credit at Closing as the
case may be.
10. TITLE EXAMINATION; OBJECTIONS TO TITLE.
A Within ten (10) banking days after receipt of the title
and survey documents described in Section 7 above, Buyer agrees
to furnish to Seller's attorneys a specification in writing of
any objection to title that Buyer believes it is not required to
take title subject to, which shall not include the exceptions
permitted in Section 3 of this Agreement. Seller may, but shall
not be required to, bring any action or proceedings or take such
other action as may be appropriate to render title to the
Property marketable.
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B Seller shall have ten (10) banking days from receipt of
notice, if any, from Buyer of its title objections within which
it must notify Buyer in writing if it cannot cure.
C In the absence of such notice from Seller, Seller shall
be obligated to cure the title objections, if any, made by Buyer.
If Seller notifies Buyer that Seller is unable to convey good and
marketable title to the property described above, subject to and
in accordance with the provisions of this contract, or is not
able or unwilling to obtain a commitment for title insurance and
thereafter pay the premium for said title insurance to insure the
exception(s) on behalf of the Buyer then, except as hereinafter
provided, Buyer may elect, by written notice to Seller, to
either:
(1) terminate this Agreement by notice delivered to the
Seller within five (5) banking days of receipt of Seller's
notice that Seller cannot cure the title objections, or is
unwilling or unable to obtain title insurance in which event
this Agreement shall wholly cease and terminate, and neither
party shall have any further claim against the other by
reason of this Agreement; or
(2) Notwithstanding anything to the contrary contained
herein, Buyer may accept such title as Seller may be able to
convey, without reduction of the Purchase Price or any
credit or allowance against the same and without any other
liability on the part of Seller and if Buyer elects to do
so, Seller shall have no right to terminate this Agreement
as hereinabove provided. The acceptance of the deed by Buyer
shall be deemed to be a full performance and discharge of
every agreement and obligation on the part of Seller to be
performed pursuant to the provisions of this Agreement,
except those, if any, which are herein specifically stated
to survive the delivery of the deed.
(3) If a search of the title discloses judgments,
bankruptcies or other returns against other persons having
names the same as or similar to that of Seller, Seller will
on request deliver to Buyer an affidavit showing that such
judgments, bankruptcies or other returns are not against
Seller.
11. USE OF PROPERTY. Seller represents that, to the best of
Seller's knowledge, the Property and any improvement thereon are
in full compliance with restrictive covenants, statutes,
ordinances, regulations, and/or other administrative enactments
including, but not limited to building codes and zoning
ordinances for the present use as a multi residential dwelling.
12. CLOSING DATE. The Closing shall occur on the earlier of: (i)
within 15 days after the end of the Due Diligence Period (as
hereinafter defined); or (ii) receipt of the consent by the
holder of the Existing Loan to the transaction contemplated
herein and the assumption by the Buyer of the borrower's
obligations under the Existing Loan, (the "Closing" or "Closing
Date") at the Seller's office, or at such other time and place as
may be mutually agreed upon.
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13. POSSESSION. Buyer shall have possession and occupancy of the
Property from and after the date of delivery of the deed, subject
only to matters herein provided for.
14. BROKER'S COMMISSION. Buyer represents to Seller that it did
not employ any broker in connection with this sale. Seller
represents to Buyer that it did not employ any broker in
connection with this sale except for Network One Realty and that
Seller shall be responsible for the payment of all fees and
commissions to that broker. Seller and Buyer each agree to
indemnify the other for any and all claims and expenses,
including legal fees, if any other fees or commission is
determined to be due by reason of the employment of any other
broker by the indemnifying party. This representation and
indemnity shall survive the Closing.
15. RISK OF LOSS. The risk of loss or damage to more than 50% of
the Seller's interest in each of Tranquility, Emerson and Colvin
by fire or other casualty or by taking by eminent domain, until
Closing, shall be assumed by Seller and upon the happening of
such event, Buyer shall have the election of terminating this
Agreement without further liability hereunder, or of completing
this purchase and receiving the Seller's share of insurance
monies, collectible for such loss or damage, or the award for
such taking by eminent domain. Notwithstanding the above, Buyer
may terminate this Agreement as it relates to Emerson and Colvin
in the event that more than 50% of Tranquility is so damaged or
condemned.
16. CONDITIONS PRECEDENT.
A It shall be a condition to Buyer's obligations to close
that all of the representations and warranties of the Seller are
true and correct as of the Closing;
B It shall be a condition to Buyer's obligation to close
that there are at Closing 452 apartment units in rentable
condition, and to the best of Seller's knowledge which are all in
compliance with federal, state, county or local laws, ordinances,
rules and regulations;
C Buyer shall have thirty (30) days after the date of
this Agreement (the "Due Diligence Period") within which to
review and inspect the Property and the Other Items (including,
but not limited to, performing engineering and Phase I
environmental studies), the Seller's books and records pertaining
to the Property and the Other Items, matters relating to zoning
compliance and compliance by the Property and the Other Items
with other applicable governmental regulations, the market in
which the Property operates, the documents relating to the
Existing Loan, the tax assessment on the Property as it relates
to the purchase price and to the assessment on comparable
properties, service contracts, executory contracts and such other
matters as Buyer shall deem reasonably necessary or appropriate
in connection with the Property and the Other Items. If Buyer
determines that it does not wish to purchase the Property and the
Other Items as a result of its findings during the Due Diligence
Period and notifies Seller of such decision within the Due
Diligence Period, this Agreement shall be null and void and
neither party shall have any further rights or obligations under
this Agreement. Buyer's failure to object within the Due
Diligence Period shall be deemed a waiver by Buyer of the
condition contained in this Section 8(C).
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It is understood that the contingencies set forth herein are
for Buyer's benefit and may be waived by Buyer at any time. If
the above contingencies are not satisfied or waived by the Buyer,
the Buyer shall have the right to terminate this Agreement by
written notice to Seller. In the event of such a termination,
this Agreement shall be null and void and neither party shall
have any further rights or obligations under this Agreement.
17. ENVIRONMENTAL CERTIFICATION. By acceptance of this Agreement,
Seller represents, warrants, and certifies to Buyer that Seller
has no knowledge of any violation, and has received no notice of
any violation of any applicable Environmental Laws (below
defined). To the best of Seller's knowledge, Seller has not, nor
has any other person, used, generated, stored, dumped, released,
buried, dispersed or emitted any Hazardous Substance on the
Property nor are there any transformers or underground tanks on
the Property, nor is there a violation of any Environmental Laws
with respect to the current use of the Property. "Environmental
Laws" shall mean all federal, state and local environmental,
health, chemical use, safety and sanitation laws, statutes,
ordinances and codes relating to the protection of the
environment and/or governing the use, storage, treatment,
generation, transportation, processing, handling, production or
disposal of any Hazardous Substance and the rules, regulations,
and orders with respect thereto. "Hazardous Substance" means,
without limitation, any flammable, explosive or radioactive
material, polychlorinated biphenyl, petroleum or petroleum
product, methane, hazardous materials, hazardous wastes,
hazardous or toxic substances or related materials, as defined in
the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (42 U.S.C. Sections 9601, et
seq.), the Hazardous Materials Transportation Act, as amended (49
U.S.C. Appendix Sections 1801, et seq.), the Resource
Conservation and Recovery Act, as amended (42 U.S.C. Sections
6901, et seq.), the Toxic Substances Control Act, as amended (15
U.S.C. Sections 2601, et seq.), Articles 15 and 27 of the New
York State Environmental Conservation Law or any other
Environmental Law and the regulations promulgated thereunder
applicable on the effective date of this Agreement. From the date
of acceptance hereof to and including the date of Closing, Seller
shall immediately provide Buyer with a copy of any notice,
citation, complaint or other directive from any person, entity or
governmental authority whereby Seller's compliance with
Environmental Laws is called into question, and immediately
notify Buyer of any new information or other developments which
could tend to supplement or modify the information contained
herein.
18. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents
and warrants to Buyer as of the date hereof and as of Closing,
that:
A To the best of Seller's knowledge after due inquiry,
Seller has no liability or obligation of any nature which in any
way affects or is related to the Property or the Other Items
whether now due or to become due, absolute, contingent or
otherwise, including liabilities for taxes (or any interest or
penalties thereto) other than disclosed in this Agreement.
B To the best of Seller's knowledge, after due inquiry,
there is no litigation, proceeding or investigation pending, or
to the knowledge of Seller threatened, against or affecting
Seller that might affect or relate to the validity of this
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Agreement, any action taken or to be taken pursuant hereto, or
the Property, the Other Item or any part or the operation
thereof, whether or not fully covered by insurance or any
proceeding pending for the increase or decrease of the assessed
valuation of all or a portion of the Property.
C To the best of Seller's knowledge after due inquiry,
Seller has complied with and is not in default under, or in
violation of, or received any notice that the Seller, the
Property or the Other Items may be in violation of, any law,
ordinance, rule, regulation or code or condition in any approval
or permit pursuant thereto (including without limitation, any
zoning, sign, environmental, labor, safety, health or price or
wage control, ordinance, rule, regulation or order of) applicable
to the ownership, development, operation or maintenance of the
Property or the Other Items.
D There are no written leases affecting the Property with
a term greater than one (1) year.
E To the best of Seller's knowledge after due inquiry,
there is no pending condemnation of the Property, or any part
thereof, or of any plans for improvements which might result in a
special assessment against the Property.
F Seller has not received any written notice or request
from any insurance company, Board of Fire Underwriters (or
organization exercising functions similar thereto) requesting the
performance of any work or alteration in respect of the Property
or the Other Items.
G Security deposits held by Seller will be correctly
identified by Seller as of Closing with respect to the Property.
H [Reserved]
I Seller and Seller's employees and agents have not let,
and will not let any contracts for improvements to the Property
which will not be fully completed and fully paid for prior to
Closing.
J Until Closing, Seller shall continue to fulfill all of
its obligations under the terms of the Leases encumbering the
Property, and under the Service Contracts, and Seller shall
operate, maintain and repair at Seller's expense, all
landscaping, buildings, fixtures and facilities, in accordance
with normally accepted business principles, and Seller shall
continue to operate the Property in a commercially reasonable
manner.
K The Rent Roll to be given by Seller to Buyer at Closing
will be true and correct.
L The financial information previously provided to Buyer
with respect to the Property is substantially accurate.
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M All of the ranges and refrigerators located within the
apartment units are the property of the Seller and not of the
tenants, except with respect to certain of the refrigerators at
Colvin.
N This Agreement has been duly authorized, executed and
delivered and constitutes a legal and binding obligation of
Seller, enforceable in accordance with its terms, except as may
be limited by bankruptcy and other laws affecting creditors'
rights generally.
O Neither the entry into this Agreement, nor the carrying
out of the transactions contemplated herein has resulted or will
result in any violation of, or be in conflict with, or result in
the creation of, any mortgage, lien, encumbrance or charge (other
than those contemplated hereby) upon any of the properties or
assets of Seller pursuant to, or constitute a default under, any
certificate of incorporation, by-law, partnership agreement, or
mortgage, indenture, contract, agreement, instrument, franchise,
permit, judgment, decree, order, statute, rule or regulation
applicable to Seller or the Property.
P To the best of Seller's knowledge, no consent or
approval by, or authorization of, or filing, registration or
qualification with, any federal, state or local governmental
authority, bureau, department or agency, or any corporation,
person or other entity is required as of the Closing either for
the execution, delivery or performance of this Agreement by
Seller, or in connection with the consummation by Seller of the
transactions contemplated by this Agreement, except for such
consents, approvals, authorizations, filings, registrations or
qualifications as have been obtained by Seller as of the date
hereof and disclosed and accepted by Buyer.
Q Seller shall permit Buyer to examine and copy all of
the leases encumbering the Property, including all additions,
amendments or modifications thereto as provided herein. Seller
shall not accept any prepayment in excess of one month of any
rent due under any leases with respect to the Property.
The representations and warranties of Seller contained in this
Agreement, the statements in any Exhibit or Schedules attached to
this Agreement, or other instruments furnished to Buyer at or
prior to Closing pursuant to this Agreement, or in connection
with the transactions contemplated by Seller pursuant to this
Agreement, do not contain any untrue statements of a material
fact, or fail to state a material fact necessary to make it not
misleading.
The representations and warranties contained herein shall survive
delivery and recording of the deed and shall not merge therein.
Seller acknowledges that each of the representations made by it
in this paragraph 18 and elsewhere in this Agreement is material
to Buyer hereunder. As to any representation or warranty set
forth herein, Seller shall indemnify, defend and hold Buyer sale
and harmless from and against any and all loss, damage, claim,
counterclaim, cause of action, cost or expense, including,
without limitation, reasonable attorneys' fees and disbursements
at both trial and appellate levels, suffered, paid or incurred
by, or asserted against Buyer, directly or indirectly, whether
foreseen or
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unforeseen, and whether for personal injury or death or for
property damage or otherwise by reason of Seller's breach of any
warranty or obligation under this Agreement or if any
representation of Seller in this Agreement is wholly or partially
untrue.
Irrespective of anything to the contrary contained herein the
representations and warranties of Seller, herein contained, shall
expire and be of no further effect upon the expiration of 12
months after Closing. This expiration shall not apply to any
breach of warranty or representation which arises out of fraud or
an intentional material misrepresentation made by Seller.
19. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Seller as of the date hereof and as of the Closing:
(a) Buyer is and will be as of the date of Closing duly
organized, validly existing and in good standing under the laws
of the State of New York and has all the requisite power and
authority to enter into and carry out this Agreement according to
its terms.
(b) Subject to the receipt of the approval of the Board,
this Agreement has been duly authorized, executed and delivered
and constitutes a legal and binding obligation of Buyer,
enforceable in accordance with its terms, except as may be
limited by bankruptcy and other laws affecting creditors' rights
generally.
(c) To the best of its knowledge after due inquiry, there is
no litigation, proceeding or investigation pending, or to the
knowledge of Buyer threatened, against or affecting Buyer or the
partners of Buyer that might affect or relate to the validity of
this Agreement or any action taken or to be taken pursuant
hereto, or that might have a material adverse effect on the
business or operations of the Buyer.
20. ASSIGNMENT. This Agreement, and all rights of Buyer
hereunder, may be assigned by Buyer to any affiliate without
Seller's prior consent. Any other assignment by Buyer
shall require the Seller's prior written consent, which consent
shall not be unreasonably withheld. Any assignment by the Buyer
shall not relieve the Buyer of any obligation of the Buyer
created by this Agreement. Seller may convey its interest in the
Property to an affiliate without the Buyer's prior written
consent, provided that the assignee shall agree in writing to be
subject to the terms of this Agreement.
21. NOTICE. All notices given pursuant to any provisions of this
Agreement shall be in writing and shall be effective only if
delivered personally, or sent by registered or certified mail,
postage prepaid or sent by a national over night carrier, to the
addresses set forth below:
To Seller: Mr. Anthony Palumbo
Mr. Daniel Palumbo
2567 Sheridan Drive
Tonawanda, NY 14150
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with a copy to:
Jeffrey D. Palumbo
Renaldo, Myers & Palumbo, P.C.
350 Essjay Road
Suite 200
Williamsville, NY 14221-8200
To Buyer:
HOME PROPERTIES OF NEW YORK, L.P.
Attn: Norman Leenhouts, Chairman
850 Clinton Square
Rochester, New York 14604
22. PLANS, WARRANTIES AND GUARANTIES. Seller agree to provide
Buyer with all plans and architectural drawings in Seller's
possession for the improvements completed at the Property,
including, without limitation, all "as-built" plans in Seller's
possession and Seller further agrees that it will endeavor to
turn over the same to Buyer promptly upon execution of this
Agreement. Seller shall assign to Buyer at Closing any and all
guaranties and warranties Seller has with respect to the
Property, the improvements thereon, and the equipment relating to
the Property, if any.
23. APPLICABLE LAW. This Agreement shall be construed and
governed in accordance with the laws of the State of New York.
24. ENTIRE AGREEMENT. This Agreement shall constitute the entire
agreement between the parties, and any and all prior
understandings or agreements, whether written or oral, are
hereby merged into this Agreement. This Agreement cannot be
modified except by a written instrument signed by the parties
hereto.
25. BINDING AGREEMENT. This Agreement shall not be binding or
effective until properly executed by Buyer and Seller.
26. CONFIDENTIALITY. By execution of this Agreement and except as
otherwise provided herein, prior to the Closing each of Seller
and Buyer agree to keep any and all information with respect to
the transactions contemplated by this Agreement strictly
confidential, and will not disclose any such information, without
the other's prior written consent. Buyer may disclose the
existence of this Agreement to the extent necessary to conduct
its due diligence with respect to the Property.
27. FINANCIAL ACCESS. Seller will provide a signed representation
letter in substantially the form attached hereto as Exhibit Dto
enable an Independent Public Accountant to render an opinion on
such financial statements. Seller will provide access by Buyer's
representatives, to all financial and other information relating
to the Property as is sufficient to enable them to prepare
audited financial statements, at Buyer's expense, in
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conformity with Regulation S-X of the Securities and Exchange
Commission (the "Commission") and any registration statement,
report or disclosure statement required to be filed with the
Commission.
28. JOINT AND SEVERAL. The obligations hereunder of each of the
two individuals who constitute the Seller shall be joint and
several.
29. PAYMENTS WITH RESPECT TO TAX ASSESSMENT REDUCTIONS. The
parties acknowledge that Seller engaged the services of Real
Property Services in connection with tax assessment reductions
for each of Emerson, Colvin and Tranquility. The parties further
acknowledge that Real Property Services was successful in having
the tax assessment reduced in each case and that pursuant to the
Agreement between Seller and Real Property Services, Seller owes
Real Property Services one half of the tax savings for each
project. Heretofore, Real Property Services submitted to Seller
invoices for each project, said invoices being attached hereto as
Exhibit E. The parties further acknowledge that Seller has paid
Real Property Services the amount due for the Emerson project,
however, the invoices for Colvin and Tranquility remain unpaid.
The parties hereby agree that Buyer will receive the benefit of
the tax assessment reduction and, therefore, will be responsible
for and assume the obligations of Seller to Real Property
Services including reimbursement to Seller of the monies
heretofore paid by Seller. Payment by Buyer will take place at
Closing and will appear as an adjustment on the closing
statement.
IN WITNESS WHEREOF, the parties hereto have caused this
Instrument to be executed as of the day and date first above
written.
HOME PROPERTIES OF NEW YORK, L.P.
By: Home Properties of New York, Inc.
General Partner
By: /s/ Norman Leenhouts
___________________________
Title: Chairman
__________________________
/s/ Anthony M. Palumbo
___________________________
Anthony M. Palumbo
/s/ Daniel Palumbo
---------------------------
Daniel Palumbo
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