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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):
October 31, 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 file (I.R.S. Employer
jurisdiction number) Identification
of incorporation or Number)
organization
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, three multifamily residential properties and in a
fourth transaction purchased two additional multifamily
residential properties. Collectively, 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 fifty-six percent of the
limited partnership interests in the Operating Partnership.
Hill Court South and Hudson Arms Apartments. On October 31,
1997, the Operating Partnership acquired Hill Court Apartments
South and all of the equity interests in Lobozzo and Company for
a combined purchase price of $6.6 million, which was paid by the
issuance of 247,634 units of limited partnership in the Operating
Partnership. Hill Court Apartments South is a 95 unit apartment
community. Lobozzo and Company was the owner of a 135 unit
apartment community known as Hudson Arms Apartments. The
communities are located in the Rochester, New York suburb of
Irondequoit, are approximately 35 years old and were 87% occupied
at the time of closing. Hill Court Apartments South were owned
by Hill Court South Apartment Company. The former partners of
Lobozzo and Company whose interests were acquired by the
Operating Partnership are Michael E. McCusker, Claude S. Fedele,
Geraldine B. Lynch, Richard M. Bachelder, Jack P. Schifano and
Joseph M. Lobozzo, II.
Cloverleaf Apartments. On November 3, 1997, the Operating
Partnership acquired the Cloverleaf Apartments, a 148 unit
apartment community located in Pittsburgh, Pennsylvania. The
purchase price of $3.0 million was financed under the Operating
Partnership's line of credit, which bears interest at 125 basis
points over the 30 day LIBOR rate or, at the Operating
Partnership's option, at a money market rate quoted by the lender
and acceptable to the Operating Partnership. The community is
approximately 40 years old and was 94% occupied at the time of
closing. Cloverleaf Apartments were owned by Hudson Palisades
Associates.
Scotsdale Apartments. On November 26, 1997, the Operating
Partnership acquired the Scotsdale Apartments, a 376 unit
apartment community located in the Detroit suburb of Westland.
The purchase price of $13.6 million was paid in cash drawn under
the Operating Partnership's line of credit, which is described
above. The community is approximately 24 years old and was 97%
occupied at the time it was acquired. The
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Scotsdale Apartments were owned by the Trusts of Estelle Kahn,
Kopel I. Kahn, Jerome M. Keywell, Rita Keywell, J. Phillip Levant
and Ethel Levant.
Candlewood Apartments. On February 9, 1998, the Operating
Partnership acquired the Candlewood Apartments, a 310 unit
apartment community located in Mishawaka, Indiana, a suburb of
South Bend. The purchase price of $13,350,000 was paid in cash
drawn under the Company's line of credit to pay off the existing
mortgage and to fund closing costs and by issuance of 185,778
limited partnership units in the Operating Partnership. The
community was built in phases between 1984 and 1989 and was 96%
occupied at closing. Candlewood Apartments were previously owned
by Donald H. Schefmeyer and Stephen W. Hall.
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 - Purchase and Sale Agreements dated
June 17, 1997 among Home Properties of New York,
L.P. and various individuals relating
to Hill Court Apartments South and Hudson Arms
Apartments, together with a letter amendment
dated September 24, 1997
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Exhibit 2.2 - Contract of Sale, dated October 10, 1997,
between Home Properties of New York, L.P. and
Hudson Palisades Associates relating
to Cloverleaf Apartments
Exhibit 2.3 - Contribution Agreement, dated
November 17, 1997 among Home Properties of New
York, L.P. and various
trusts relating to Scotsdale Apartments
Exhibit 2.4 - Contribution Agreement, dated November 7,
1997 among Home Properties of New York, L.P.
and Donald H. Schefmeyer and Stephen W. Hall relating
to Candlewood Apartments, together with Amendment
No. One. dated December 3, 1997
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: February 20, 1998
By: /s/ David P. Gardner
-----------------------
David P. Gardner
Vice President
Chief Financial Officer and Treasurer
Date: February 20, 1998
By: /s/ Norman Leenhouts
-----------------------
Norman Leenhouts
Co-Chief Executive Officer, President and Director
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HOME PROPERTIES OF NEW YORK, INC.
EXHIBIT INDEX
Location
Exhibit 2.1
Purchase and Sale Agreements dated June 17,
1997 among Home Properties of New York, L.P.
and various individuals relating to Hill Court
Apartments South and Hudson Arms Apartments
together with a letter amendment dated Pages ___ to ___
September 24, 1997
Exhibit 2.2
Contract of Sale, dated October 10, 1997,
between Home
Properties of New York, L.P. and Hudson
Palisades Associates Pages ___ to ___
relating to Cloverleaf Apartments
Exhibit 2.3
Contribution Agreement, dated November 17,
1997 among Home Properties of New York, L.P. Pages ___ to ___
and various trusts relating to Scotsdale
Apartments
Exhibit 2.4
Contribution Agreement, dated November 7,
1997, among Home Properties of New York, L.P.
and Donald H. Schefmeyer and Stephen W. Hall
relating to Candlewood Apartments, together
with Amendment No. One, dated December 3, 1997 Pages ___ to ___
Note: Omitted Schedules and Exhibits to the foregoing will be
supplied upon request.
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Exhibit 2.1
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement ("Agreement"), made as of
the 17th day of June, 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
the individuals listed on the attached Schedule A (herein
the "Contributing Partners"), who have addresses as listed
on the attached Schedule A.
W I T N E S S E T H:
WHEREAS, the Contributing Partners are all of the general
partners of Hill Court Apartments South Company, a New York
general partnership (the "Partnership");
WHEREAS, the Partnership owns a 95 unit apartment community
and adjacent land located in the town of Irondequoit, County of
Monroe, State of New York, commonly known as Hill Court
Apartments South, all as more particularly described below;
WHEREAS, Buyer desires to purchase all of the partnership
interests (the "Partnership Interests") in the Partnership and to
thereby acquire that property, 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 acquired
consists of one or more parcels of land known as Hill Court
Apartments South which includes 95 apartments (the "Project"),
located in the Town of Irondequoit 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 95 apartment units, and all
rights of the Partnership 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),
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 in
connection with the Project, and
E any fixtures appurtenant to the Property and any other
furniture or equipment used in connection with the operation and
maintenance of the Property, including the truck used in
connection with the operation and maintenance of the Property
(the "Truck") (hereinafter with the items listed in A-D above,
collectively, the "Other Items").
Substantially all of the Other Items are in good working
order and condition now or will be so at the time of Closing and
will be acquired by the Buyer free and clear of all liens and
encumbrances.
3. EXCEPTIONS. Buyer agrees to accept title to the
Partnership's interest in 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; and
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.
4. PRICE AND MANNER OF PAYMENT.
A The purchase price for the Partnership Interests shall be a
total of Two Million Eight Hundred Ninety-One Thousand Three
Hundred and Four and NO/100 ($2,891,304) (the "Purchase Price")
payable at the option of each of the Contributing Partners by:
(i) issuance of limited partnership units in the Buyer (the
`Units") as described below; or (ii) payment at closing by check
or wire transfer to an account designated by the Representative
(hereinafter defined).
B Each of the Contributing Partners shall have the right to
elect to receive their portion of the Purchase Price in cash or
in Units, provided however that only those Contributing Partners
who can establish that they are Accredited Investors under the
securities laws may elect to receive Units. In the event that a
Contributing Partner elects to receive Units, the number of Units
they will receive will be equal to their percentage share of the
Purchase Price as set forth on the attached Schedule A divided by
the "Market Value" of a Unit. The Market Value of a Unit shall be
equal to the average closing price for 5 consecutive trading days
prior to, but not including, the Closing Date of a share of
common stock of Home Properties of New York, Inc., ("HME") as
listed on the New York Stock Exchange.
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C No less than 5 business days prior to the Closing Date, the
Representative shall notify the Buyer as to each of the
Contributing Partner's election to receive cash or Units.
D The initial distribution payable with respect to Units
issued as part of the Purchase Price shall be made on the date on
which HME pays the dividend to the holders of its common stock
that relates to the earnings for the calendar quarter in which
the Units were issued and shall be pro-rated such that the
Contributing Partners receiving Units shall receive a pro-rata
distribution for the period from the date on which the Units were
issued to and including the last day of the calendar quarter in
which the Units were issued.
5. ADJUSTMENTS AT CLOSING. The following shall be adjusted and
prorated between the Contributing Partners and the Buyer at
Closing as if the Buyer was the owner of the Partnership
Interests and the Property as of midnight of the night preceding
the Closing Date and shall be paid in cash at Closing:
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 any other charges incurred with respect to the Property
which the Partnership is obligated to pay; and
J Rents.
(1) All rent payments due for the month of Closing shall be
deemed collected by the Contributing Partners 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 Contributing Partners and,
if paid to Buyer, Buyer shall promptly send such
rent to the Representative.
(3) All rent collected by the Contributing Partners or
the Partnership, prior to the Closing, for rental
periods subsequent to Closing shall be paid to Buyer
at Closing.
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(4) All rent collected by Buyer, the Partnership or the
Contributing Partners for rental periods after the Closing shall
belong to Buyer and, if paid to the Contributing Partners, the
Contributing Partners shall promptly send such rent to Buyer.
The Buyer agrees to use reasonable efforts
after the Closing to collect delinquent rentals
owed to the Partnership with respect to the
Contributing Partners period of ownership,
provided that nothing herein shall require Buyer
or the Partnership to institute legal proceeding
against any resident whose rental payments are
delinquent. Any rents collected after Closing
which are applicable to arrearages which arose
during the Contributing Partners period of
ownership shall be paid by the Partnership to the
Representative, net of the expenses of collection.
If Buyer fails to collect any rents due to the
Contributing Partners within 90 days following the
Closing, the Representative, on behalf of the
Contributing Partners, may proceed to collect the
same in his own name. Nothing herein shall make
the Buyer liable to the Contributing Partners for
any failure to collect arrearages.
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, and all other costs and expenses incidental to
or in connection with closing this transaction customarily paid
for by the purchaser of similar property. The Contributing
Partners shall pay the transfer tax, attorneys' fees, if any,
incurred by them 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 Representative shall furnish and
deliver to the Buyer 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 Partnership and
the Contributing Partners, dated or redated subsequent hereto,
and a copy of the most recent instrument survey of the Property.
Prior to Closing, the Representative shall deliver to Buyer an
update of the instrument survey 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 must not differ in any material
respects from the survey initially delivered to and reviewed by
Buyer. The Contributing Partners 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.
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8. TITLE DOCUMENTS. At the time of Closing, each of the
Contributing Partners shall tender to Buyer an assignment of all
their Partnership Interests in the Partnership free and clear
from all liens and encumbrances as well as such amendments to the
partnership agreement and certificates of the Partnership as
shall be necessary or appropriate to effectuate the transfer. The
Representative shall also deliver to Buyer a certificate of title
and any necessary transfer documents relating to the Truck, 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. At Closing, the Representative shall deliver
complete originals of each lease listed on the Rent Roll.
9. INSPECTION. Upon and after acceptance of this Agreement by
the Contributing Partners, the Contributing Partners agree that
Buyer and its authorized representatives shall have the right and
privilege to enter upon the Property and the Partnership'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. The Contributing Partners agree to cooperate with Buyer
by making available to Buyer such records, plans, drawings or
other data as may be in their or the Partnership's possession or
control relating to the Property and its operation; provided,
however, that Buyer agrees to indemnify the Contributing Partners
and the Partnership 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.
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 the Representative 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. The Representative 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 The Representative 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 the Representative, the
Contributing Partners shall be obligated to cure the title
objections, if any, made by Buyer. If the Representative notifies
Buyer that it 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 the
Representative, to either:
(1) terminate this Agreement by notice delivered to the
Representative within five (5) banking days of receipt
of the Representative's notice that it cannot cure the
title objections, 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
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(2) proceed with the purchase, provided the Representative 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.
Notwithstanding anything to the contrary
contained herein, Buyer may accept such title as
the Contributing Partners 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 the
Contributing Partners and if Buyer elects to do
so, the Contributing Partners shall have no right
to terminate this Agreement as hereinabove
provided.
D 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 the Partnership or the Contributing
Partners, the Representative will on request deliver to Buyer an
affidavit showing that such judgments, bankruptcies or other
returns are not against the Partnership or the Contributing
Partners.
E The Representative agrees that, upon the request of the
Buyer, it will provide an affidavit in such form and with such
content as shall allow the Buyer to obtain a non-imputation
endorsement to the title policy purchased by the Buyer.
11. USE OF PROPERTY. The Contributing Partners represent 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 within 15 days after
the end of the Due Diligence Period (as hereinafter defined) (the
"Closing" or "Closing Date") at the Buyer'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 assignments
of Partnership Interests, subject only to matters herein provided
for.
14. BROKER'S COMMISSION. The Contributing Partners represent to
Buyer that they did not employ any broker in connection with this
sale. The Buyer represents that it employed Joseph Sanfilippo as
broker and agrees that it will pay any fees or commissions due
as a result of the Buyer's employment of that broker. The
Contributing Partners 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
the Partnership's interest in the Property by fire or other
casualty or by taking by eminent domain, until Closing, shall be
assumed by the Contributing Partners 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 Partnership's share of insurance
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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 Contributing
Partners 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 95apartment 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 Partnership'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 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 Partnership Interests as a result of its findings
during the Due Diligence Period and notifies the Representative
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 16(C).
D It shall also be a condition to Buyer's obligation to close
that during the Due Diligence Period, the Buyer 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 Partnership Interests on the terms and conditions
described herein. If Buyer does not obtain the Board's approval
within the Due Diligence Period, the Buyer shall promptly notify
the Representative in which event 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 the
Representative within the Due Diligence Period of its failure to
obtain Board approval shall be deemed a waiver by Buyer of the
conditions contained in this Section 16(E).
E It shall be a condition to Buyer's obligation to close that
as of the Closing Date each of the Contributing Partners shall
have provided the Buyer with an indemnification in the form of
Exhibit B hereto and shall, upon execution of this Agreement,
also have executed the Agency Agreement in the form attached
hereto as Exhibit C whereby Joseph M. Lobozzo II (the
"Representative") is appointed as the representative of the
Contributing Partners.
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
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waived by the Buyer, the Buyer shall have the right to
terminate this Agreement by written notice to the
Representative. 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, each of the Contributing Partners represents,
warrants, and certifies to Buyer that such Contributing Partner
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 each of the Contributing Partner's
knowledge, the Partnership and such Contributing Partner 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, each
of the Contributing Partners shall immediately provide Buyer with
a copy of any notice, citation, complaint or other directive from
any person, entity or governmental authority whereby the
Partnership's or such Contributing Partner'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. Each of the
Contributing Partners represents and warrants to Buyer as of the
date hereof and as of Closing, that:
A To the best of such Contributing Partner's knowledge after
due inquiry, the Partnership and such Contributing Partner has no
liability or obligation of any nature which in any way affects or
is related to the Property, the Other Items or the Partnership
Interests 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 such Contributing Partners' knowledge, after
due inquiry, there is no litigation, proceeding or investigation
pending, or to the knowledge of such Contributing Partners
threatened, against or affecting the Partnership or such
Contributing Partner 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 Items
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or the Partnership Interests or any part or the
operation thereof, whether or not fully covered by
insurance.
C To the best of such Contributing Partners' knowledge after
due inquiry, the Partnership has complied with and is not in
default under, or in violation of, or received any notice that
the Partnership, 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 To the best of such Contributing Partner's knowledge after
due inquiry, there are no written leases affecting the Property
with a term greater than one (1) year.
E To the best of such Contributing Partner'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 Such Contributing Partner and, to the best of such
Contributing Partner's knowledge, the Partnership 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 the Partnership will be correctly
identified as of Closing with respect to the Property.
H To the best of such Contributing Partner's knowledge after
due inquiry, 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 "B" attached hereto.
I To the best of such Contributing Partner's knowledge after
due inquiry, there are no executory contracts connected with the
Property or the Other Items, except as set forth on Schedule "C"
attached hereto. The Partnership and the Partnership'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, the Partnership shall continue to fulfill all
of its obligations under the terms of the Leases encumbering the
Property, and under the Service Contracts, and the Partnership
shall operate, maintain and repair all landscaping, buildings,
fixtures and facilities, in accordance with normally accepted
business principles, and the Partnership shall continue to
operate the Property in a commercially reasonable manner.
K To the best of such Contributing Partner's knowledge after
due inquiry, the financial information previously provided to
Buyer with respect to the Property is substantially accurate.
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L To the best of such Contributing Partner's knowledge after
due inquiry, all of the ranges and refrigerators located within
the apartment units are the property of the Partnership and not
of the tenants.
M This Agreement has been duly authorized, executed and
delivered and constitutes a legal and binding obligation of such
Contributing Partner, enforceable in accordance with its terms,
except as may be limited by bankruptcy and other laws affecting
creditors' rights generally.
N 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 the Partnership or the Contributing Partner 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 the Partnership, the Contributing Partner or the Property.
O To the best of such Contributing Partner'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 such Contributing Partner, or in connection with the
consummation by such Contributing Partner of the transactions
contemplated by this Agreement.
P The Partnership is now, or will be on the Closing Date, the
lawful owner of 100% of the fee interest in the Property and the
Other Items.
Q The Contributing Partners have the interest in the
Partnership as indicated on the attached Schedule A.
The representations and warranties of the
Contributing Partners 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 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 of the assignment of the Partnership
Interests and shall not merge therein.
Each of the Contributing Partners 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, each of the Contributing Partners shall indemnify,
defend and hold Buyer safe 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 such Contributing
Partner's
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<PAGE>
breach of any warranty or obligation under this
Agreement or if any representation of such Contributing
Partner in this Agreement is wholly or partially
untrue.
Irrespective of anything to the contrary contained
herein the representations and warranties of the
Contributing Partners, 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 any
Contributing Partner.
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.
d) Buyer will cause the Partnership to pay and does hereby
indemnify the Partners against any obligations of the Partners to
pay the legal fees owed to James S. Grossman, Esq. in connection
with the reduction in the real property assessment of the
Property to take effect on September 1, 1997, provided that the
amount of those fees shall not exceed 50% of the savings
resulting from that lower assessment realized with respect to the
1997/1998 town and school tax and the 1998 county tax.
20. ASSIGNMENT. This Agreement, and all rights of Buyer
hereunder, may be assigned byBuyer to any affiliate without the
Contributing Partners' or the Representative's prior consent. Any
other assignment by Buyer shall require the Representative'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.
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 the Contributing Partners Joseph M. Lobozzo II
c/o their Representative: c/o JML Optical Industries,
Inc.
690 Portland Avenue
Rochester, NY 14621-5196
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To Buyer: HOME PROPERTIES OF NEW YORK,
L.P.
Attn: Norman Leenhouts,
Chairman
850 Clinton Square
Rochester, New York 14604
22. PLANS. The Contributing Partners agree to provide Buyer with
all plans and architectural drawings in their possession for the
improvements completed at the Property, including, without
limitation, all "as-built" plans in their possession and the
Contributing Partners further agree that they will endeavor to
turn over the same to Buyer promptly upon execution of this
Agreement.
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 the
Contributing Partners 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. The Representative 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. The
Contributing Partners 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 the Securities and Exchange Commission
(the "Commission") and any registration statement, report or
disclosure statement required to be filed with the Commission.
28. PRE-TRANSFER PARTNERSHIP LIABILITIES. Buyer agrees to assume
only those liabilities with respect to the Partnership, the
Partnership Interests and the Property as are specifically
described herein. To insure payment of any additional liabilities
not assumed by the Buyer herein, Buyer and the Contributing
Partners will enter into the Agreement attached hereto as Exhibit
D relating to the escrow of certain funds to pay for any such
additional liabilities (the "Escrow Agreement'). To the extent
that there are now or in the future any additional liabilities
not assumed by the Buyer herein and not paid for from the
proceeds held under the Escrow Agreement, the Contributing
Partners shall assume responsibility for those payments.
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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
For purposes of agreeing to perform the
obligations of the Representative hereunder.
/s/ Joseph M. Lobozzo II
------------------------------
Joseph M. Lobozzo II
CONTRIBUTING PARTNERS
/s/ Joseph M. Lobozzo II
------------------------------
Joseph M. Lobozzo II
/s/ Gabriel W. Gruttardaro
------------------------------
Gabriel W. Gruttardaro
/s/ Anthony M. Julian
------------------------------
Anthony M. Julian
/s/ John M. DiProsa
------------------------------
John M. DiProsa
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PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement ("Agreement"), made as
of the 17th day of June, 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
the individuals listed on the attached Schedule A
(herein the "Contributing Partners"), who have
addresses as listed on the attached Schedule A.
W I T N E S S E T H:
WHEREAS, the Contributing Partners are all of the general
partners of Hudson Apartments Company, a New York general
partnership (the "Partnership");
WHEREAS, the Partnership owns a 135 unit apartment community
and adjacent land located in the town of Irondequoit, County of
Monroe, State of New York, commonly known as Hudson Arms
Apartments, all as more particularly described below;
WHEREAS, Buyer desires to purchase all of the partnership
interests (the "Partnership Interests") in the Partnership and to
thereby acquire that property, 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 acquired
consists of one or more parcels of land known as Hudson Arms
Apartments which includes 135 apartments (the "Project"), located
in the Town of Irondequoit 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 135 apartment units, and all
rights of the Partnership 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),
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 in connection with the
Project, and
E any fixtures appurtenant to the Property and any other
furniture or equipment used in connection with the operation and
maintenance of the Property, including the truck used
in connection with the operation and maintenance of the
Property (the "Truck") (hereinafter with the items
listed in A-D above, collectively, the "Other Items").
Substantially all of the Other Items are in good
working order and condition now or will be so at the time of
Closing and will be acquired by the Buyer free and clear of all
liens and encumbrances.
3. EXCEPTIONS. Buyer agrees to accept title to the
Partnership's interest in 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; and
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.
4. PRICE AND MANNER OF PAYMENT.
A. The purchase price for the Partnership Interests shall
be a total of Four Million One Hundred Eight Thousand Six Hundred
and Ninety-Six and NO/100 ($4,108,696) (the "Purchase
Price") payable at the option of each of the
Contributing Partners by: (i) issuance of limited
partnership units in the Buyer (the `Units") as
described below; or (ii) payment at closing by check or
wire transfer to an account designated by the
Representative (hereinafter defined).
B. Each of the Contributing Partners shall have the right
to elect to receive their portion of the Purchase Price in cash
or in Units, provided however that only those
Contributing Partners who can establish that they are
Accredited Investors under the securities laws may
elect to receive Units. In the event that a
Contributing Partner elects to receive Units, the
number of Units they will receive will be equal to
their percentage share of the Purchase Price as set
forth on the attached Schedule A divided by the
"Market Value" of a Unit. The Market Value of a Unit
shall be equal to the average closing price for 5
consecutive trading days prior to, but not including,
the Closing Date of a share of common stock of Home
Properties of New York, Inc., ("HME") as listed on the
New York Stock Exchange.
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<PAGE>
C. No less than 5 business days prior to the Closing Date,
the Representative shall notify the Buyer as to each of the
Contributing Partner's election to receive cash or
Units.
D. The initial distribution payable with respect to Units
issued as part of the Purchase Price shall be made on the date on
which HME pays the dividend to the holders of its
common stock that relates to the earnings for the
calendar quarter in which the Units were issued and
shall be pro-rated such that the Contributing Partners
receiving Units shall receive a pro-rata distribution
for the period from the date on which the Units were
issued to and including the last day of the calendar
quarter in which the Units were issued.
5. ADJUSTMENTS AT CLOSING. The following shall be adjusted and
prorated between the Contributing Partners and the Buyer at
Closing as if the Buyer was the owner of the Partnership
Interests and the Property as of midnight of the night
preceding the Closing Date and shall be paid in cash at
Closing:
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 any other charges incurred with respect to the Property
which the Partnership is obligated to pay; and
J Rents.
(1) All rent payments due for the month of Closing shall be
deemed collected by the Contributing Partners 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 Contributing Partners and, if paid to
Buyer, Buyer shall promptly send such rent to the
Representative.
(3) All rent collected by the Contributing Partners or the
Partnership, prior to the Closing, for rental periods
subsequent to Closing shall be paid to Buyer at Closing.
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<PAGE>
(4) All rent collected by Buyer, the Partnership or the
Contributing Partners for rental periods after the Closing shall
belong to Buyer and, if paid to the Contributing Partners, the
Contributing Partners shall promptly send such rent to Buyer.
The Buyer agrees to use reasonable efforts after the
Closing to collect delinquent rentals owed to the
Partnership with respect to the Contributing Partners
period of ownership, provided that nothing herein shall
require Buyer or the Partnership to institute legal
proceeding against any resident whose rental payments
are delinquent. Any rents collected after Closing which
are applicable to arrearages which arose during the
Contributing Partners period of ownership shall be paid
by the Partnership to the Representative, net of the
expenses of collection. If Buyer fails to collect any
rents due to the Contributing Partners within 90 days
following the Closing, the Representative, on behalf of
the Contributing Partners, may proceed to collect the
same in his own name. Nothing herein shall make the
Buyer liable to the Contributing Partners for any
failure to collect arrearages.
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, and all other costs and expenses
incidental to or in connection with closing this transaction
customarily paid for by the purchaser of similar property.
The Contributing Partners shall pay the transfer tax,
attorneys' fees, if any, incurred by them 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 Representative shall furnish and
deliver to the Buyer 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 Partnership and the Contributing Partners, dated
or redated subsequent hereto, and a copy of the most recent
instrument survey of the Property. Prior to Closing, the
Representative shall deliver to Buyer an update of the
instrument survey 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 must not
differ in any material respects from the survey initially
delivered to and reviewed by Buyer. The Contributing
Partners 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.
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8. TITLE DOCUMENTS. At the time of Closing, each of the
Contributing Partners shall tender to Buyer an assignment of
all their Partnership Interests in the Partnership free and
clear from all liens and encumbrances as well as such
amendments to the partnership agreement and certificates of
the Partnership as shall be necessary or appropriate to
effectuate the transfer. The Representative shall also
deliver to Buyer a certificate of title and any necessary
transfer documents relating to the Truck, 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. At Closing, the Representative shall
deliver complete originals of each lease listed on the Rent
Roll. Finally, at Closing, the Representative shall deliver
a fully executed Assignment of Contract in the form attached
hereto as Exhibit E.
9. INSPECTION. Upon and after acceptance of this Agreement by
the Contributing Partners, the Contributing Partners agree that
Buyer and its authorized representatives shall have the
right and privilege to enter upon the Property and the
Partnership'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.
The Contributing Partners agree to cooperate with Buyer by
making available to Buyer such records, plans, drawings or
other data as may be in their or the Partnership's
possession or control relating to the Property and its
operation; provided, however, that Buyer agrees to indemnify
the Contributing Partners and the Partnership 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.
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 the Representative 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. The Representative 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 The Representative 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 the Representative,
the Contributing Partners shall be obligated to cure the title
objections, if any, made by Buyer. If the
Representative notifies Buyer that it 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 the Representative, to either:
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(5) terminate this Agreement by notice delivered to the
Representative within five (5) banking days of receipt of the
Representative's notice that it cannot cure the title objections,
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
(6) proceed with the purchase, provided the Representative 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.
Notwithstanding anything to the contrary contained herein,
Buyer may accept such title as the Contributing Partners 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 the Contributing Partners and if Buyer
elects to do so, the Contributing Partners shall have no right to
terminate this Agreement as hereinabove provided.
D 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 the
Partnership or the Contributing Partners, the
Representative will on request deliver to Buyer an
affidavit showing that such judgments, bankruptcies or
other returns are not against the Partnership or the
Contributing Partners.
E The Representative agrees that, upon the request of the
Buyer, it will provide an affidavit in such form and with such
content as shall allow the Buyer to obtain a non-
imputation endorsement to the title policy purchased by
the Buyer.
11. USE OF PROPERTY. The Contributing Partners represent 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 within 15 days after
the end of the Due Diligence Period (as hereinafter defined)
(the "Closing" or "Closing Date") at the Buyer'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
assignments of Partnership Interests, subject only to
matters herein provided for.
14. BROKER'S COMMISSION. The Contributing Partners represent to
Buyer that they did not employ any broker in connection with this
sale. The Buyer represents that it employed Joseph
Sanfilippo as broker and agrees that it will pay any fees or
commissions due as a result of the Buyer's employment of
that broker. The Contributing Partners 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.
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15. RISK OF LOSS. The risk of loss or damage to all or part of
the Partnership's interest in the Property by fire or other
casualty or by taking by eminent domain, until Closing,
shall be assumed by the Contributing Partners 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
Partnership'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
Contributing Partners 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 120apartment units in rentable
condition, that the remaining 15 apartments shall be in
rentable condition, but for the need for general clean-
up, re-painting and/or carpet replacement and that all
135 units are 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 Partnership'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 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 Partnership Interests as a result of
its findings during the Due Diligence Period and
notifies the Representative 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 16(C).
D It shall also be a condition to Buyer's obligation to
close that during the Due Diligence Period, the Buyer 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 Partnership
Interests on the terms and conditions described herein.
If Buyer does not obtain the Board's approval within
the Due Diligence Period, the Buyer shall promptly
notify the Representative in which event 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 the Representative within the
Due Diligence Period of its failure to obtain Board
approval shall be deemed a waiver by Buyer of the
conditions contained in this Section 16(E).
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E It shall be a condition to Buyer's obligation to close
that as of the Closing Date each of the Contributing Partners
shall have provided the Buyer with an indemnification
in the form of Exhibit B hereto and shall, upon
execution of this Agreement, also have executed the
Agency Agreement in the form attached hereto as Exhibit
C whereby Joseph M. Lobozzo II (the "Representative")
is appointed as the representative of the Contributing
Partners.
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 the
Representative. 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, each of the Contributing Partners represents,
warrants, and certifies to Buyer that such Contributing
Partner 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 each of the
Contributing Partner's knowledge, the Partnership and such
Contributing Partner 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, each of the Contributing
Partners shall immediately provide Buyer with a copy of any
notice, citation, complaint or other directive from any
person, entity or governmental authority whereby the
Partnership's or such Contributing Partner'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. Each of the
Contributing Partners represents and warrants to Buyer as of the
date hereof and as of Closing, that:
A To the best of such Contributing Partner's knowledge
after due inquiry, the Partnership and such Contributing Partner
has no liability or obligation of any nature which in
any way affects or is related to the Property, the
Other Items or
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the Partnership Interests 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 such Contributing Partners' knowledge,
after due inquiry, there is no litigation, proceeding or
investigation pending, or to the knowledge of such
Contributing Partners threatened, against or affecting
the Partnership or such Contributing Partner 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 Items or the Partnership Interests
or any part or the operation thereof, whether or not
fully covered by insurance.
C To the best of such Contributing Partners' knowledge
after due inquiry, the Partnership has complied with and is not
in default under, or in violation of, or received any
notice that the Partnership, 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 To the best of such Contributing Partner's knowledge
after due inquiry, there are no written leases affecting the
Property with a term greater than one (1) year.
E To the best of such Contributing Partner'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 Such Contributing Partner and, to the best of such
Contributing Partner's knowledge, the Partnership 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 the Partnership will be
correctly identified as of Closing with respect to the Property.
H To the best of such Contributing Partner's knowledge
after due inquiry, 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 "B" attached hereto.
I To the best of such Contributing Partner's knowledge
after due inquiry, there are no executory contracts connected
with the Property or the Other Items, except as set
forth on Schedule "C" attached hereto. The Partnership
and the Partnership'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, the Partnership shall continue to
fulfill all of its obligations under the terms of the Leases
encumbering the Property, and under the Service
Contracts, and the Partnership shall operate, maintain
and repair all landscaping, buildings, fixtures and
facilities, in accordance with normally accepted
business
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principles, and the Partnership shall continue to operate the
Property in a commercially reasonable manner.
K To the best of such Contributing Partner's knowledge after
due inquiry, the
financial information previously provided to Buyer with respect
to the Property is substantially accurate.
L To the best of such Contributing Partner's knowledge after
due inquiry, all of the
ranges and refrigerators located within the apartment units are
the property of the Partnership and not of the tenants.
M This Agreement has been duly authorized, executed and
delivered and constitutes a legal and binding obligation of such
Contributing Partner, enforceable in accordance with
its terms, except as may be limited by bankruptcy and
other laws affecting creditors' rights generally.
N 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 the
Partnership or the Contributing Partner 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 the
Partnership, the Contributing Partner or the Property.
O To the best of such Contributing Partner'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 such
Contributing Partner, or in connection with the
consummation by such Contributing Partner of the
transactions contemplated by this Agreement.
P The Partnership is now, or will be on the Closing Date,
the lawful owner of 100% of the fee interest in the
Property and the Other Items.
Q The Contributing Partners have the interests in the
Partnership as indicated on the attached Schedule A.
The representations and warranties of the Contributing
Partners 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 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 of the assignment of the Partnership
Interests and shall not merge therein.
Each of the Contributing Partners 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, each
of the
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Contributing Partners shall indemnify, defend and hold Buyer safe
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 such Contributing Partner's breach
of any warranty or obligation under this Agreement or if any
representation of such Contributing Partner in this
Agreement is wholly or partially untrue.
Irrespective of anything to the contrary contained herein
the representations and warranties of the Contributing Partners,
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
any Contributing Partner.
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.
(d) Buyer will cause the Partnership to pay and
does hereby indemnify the Partners against any obligations of
the Partners to pay the legal fees owed to James S.
Grossman, Esq. in connection with the reduction in the
real property assessment of the Property to take effect
on September 1, 1997, provided that the amount of those
fees shall not exceed 50% of the savings resulting from
that lower assessment realized with respect to the
1997/1998 town and school tax and the 1998 county tax.
20. ASSIGNMENT. This Agreement, and all rights of Buyer
hereunder, may be assigned by Buyer to any affiliate without the
Contributing Partners' or the Representative's prior
consent. Any other assignment by Buyer shall require the
Representative'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.
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<PAGE>
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 the Contributing Partners Joseph M. Lobozzo II
c/o their Representative: c/o JML Optical Industries, Inc.
690 Portland Avenue
Rochester, NY 14621-5196
To Buyer: HOME PROPERTIES OF NEW YORK, L.P.
Attn: Norman Leenhouts, Chairman
850 Clinton Square
Rochester, New York 14604
22. PLANS. The Contributing Partners agree to provide Buyer
with all plans and architectural drawings in their possession for
the improvements completed at the Property, including,
without limitation, all "as-built" plans in their possession
and the Contributing Partners further agree that they will
endeavor to turn over the same to Buyer promptly upon
execution of this Agreement.
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 the
Contributing Partners 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. The Representative 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. The Contributing Partners 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 the
Securities and Exchange Commission (the
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<PAGE>
"Commission") and any registration statement, report or
disclosure statement required to be filed with the
Commission.
28. PRE-TRANSFER PARTNERSHIP LIABILITIES. Buyer agrees to
assume only those liabilities with respect to the
Partnership, the Partnership Interests and the Property as
are specifically described herein. To insure payment of any
additional liabilities not assumed by the Buyer herein,
Buyer and the Contributing Partners will enter into the
Agreement attached hereto as Exhibit D relating to the
escrow of certain funds to pay for any such additional
liabilities (the "Escrow Agreement'). To the extent that
there are now or in the future any additional liabilities
not assumed by the Buyer herein and not paid for from the
proceeds held under the Escrow Agreement, the Contributing
Partners shall assume responsibility for those payments.
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
-----------------------------
For purposes of agreeing to perform the
obligations of the Representative hereunder.
/s/ Joseph M. Lobozzo II
-----------------------------
Joseph M. Lobozzo II
CONTRIBUTING PARTNERS
/s/ Joseph M. Lobozzo II
-----------------------------
Joseph M. Lobozzo II
/s/ Michael E. McCusker
-----------------------------
Michael E. McCusker
/s/ Claude S. Fedele
-----------------------------
Claude S. Fedele
/s/ Geraldine B. Lynch
-----------------------------
Geraldine B. Lynch
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<PAGE>
/s/ Richard L. Bachelder
-----------------------------
Richard L. Bachelder
/s/ Michael A. Julia POA
-----------------------------
Jack P. Schifano
Page 14
<PAGE>
September 24, 1997
Mr. Joseph M. Lobozzo II
c/o JML Optical Industries Inc.
690 Portland Avenue
Rochester, New York 14621-5196
Re: Acquisition of Hillcourt Apartments South Company and
Hudson Arms Apartments
Dear Joe:
Based upon our further discussion, we are prepared to remove our
due diligence contingency and proceed to close the purchase of
subject properties in accordance with the purchase and sale
agreements dated June 17, 1997 with the following revisions:
1. The purchase price is to be revised from $7,000,000 for the
two properties to $6,600,000 with the adjustment allocated
between the two properties on a pro rata basis using the
original contract selling prices as a basis for that
proration; and
2. For those partners electing to receive Home Properties'
operating partnership units, the price is to be set at
$2411/16 ($24.6875).
With your prompt acceptance, we would expect to close this
transaction during the middle or late days of October.
I have provided for your acceptance below.
Sincerely,
Norman P. Leenhouts
Chairman
NPL:bsl
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<PAGE>
HOME PROPERTIES OF NEW YORK, L.P.
By: Homes Properties of New York, Inc.
General Partner
/s/ Norman P. Leenhouts
- ------------------------------
Norman P. Leenhouts, Chairman
For purposes of agreeing to perform the obligations of the
Representatives hereunder.
/s/ Joseph M. Lobozzo II
- ------------------------------
Joseph M. Lobozzo II
CONTRIBUTING PARTNERS FOR HUDSON ARMS APARTMENTS
/s/ Joseph M. Lobozzo II
- ------------------------------
Joseph M. Lobozzo II
/s/ Michael E. McCusker
- ------------------------------
Michael E. McCusker
/s/ Claude S. Fedele
- ------------------------------
Claude S. Fedele
/s/ Geraldine B. Lynch
- ------------------------------
Geraldine B. Lynch
Richard L. Bachelder
- ------------------------------
Richard L. Bachelder
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<PAGE>
/s/ Michael A. Julian, Power of Attorney for
- ------------------------------
Jack P. Schifano
FOR CONTRIBUTING PARTNERS OF HILLCOURT APARTMENTS SOUTH COMPANY
/s/ Joseph M. Lobozzo II
- ------------------------------
Joseph M. Lobozzo II
/s/ Gabriel W. Gruttadaro
- ------------------------------
Gabriel W. Gruttadaro
/s/ Anthony M. Julian
- ------------------------------
Anthony M. Julian
/s/ John DiProsa
- ------------------------------
John DiProsa
Page 3
<PAGE>
Exhibit 2.2
CONTRACT OF SALE
Dated October 10, 1997
between
HUDSON PALISADES ASSOCIATES
as Seller
and
HOME PROPERTIES OF NEW YORK, L.P.,
as Buyer
Affecting Premises Located in the Borough of Pleasant Hills,
County of Allegheny and the Commonwealth of Pennsylvania
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<PAGE>
Table of Contents
Section Page
Included in Sale 1
Purchase Price 2
Permitted Encumbrances 4
Title Review 5
Apportionment 6
Assessments; Notices 7
Closing Costs 7
Date and Place of Closing 8
Delivery At Closing 8
Rent Roll 10
Buyer's/Seller's Representations 10
Bond Financing 12
Casualty; Condemnation 14
Buyer's Default 15
Seller's Default 15
Notices 15
Broker 16
Modifications 16
No Waiver 17
Governing Law/Waiver of Jury 17
Recordation 17
Seller's Obligations 17
Arms Length 17
Entire Agreement 17
Partial Invalidity 17
Headings 17
Counterparts 18
Cumulative Remedies 18
Attorneys' Fees 18
Survival 18
Assignment 18
Tax Deferred Exchange 18
Confidentiality 19
Financial Access 19
Certificate of Occupancy 19
Units Needing Substantial Repair/Renovation 19
Page i
<PAGE>
CONTRACT OF SALE
THIS CONTRACT OF SALE (this "Contract") made as of this 10th
day of October, 1997, by and between HUDSON PALISADES ASSOCIATES,
a New York general partnership, having its principal office at
245 Saw Mill River Road, Hawthorne, New York 10532 ("Seller"),
and HOME PROPERTIES OF NEW YORK, L.P., a New York limited
partnership having its principal office at 850 Clinton Avenue,
Rochester, New York 14604 ("Buyer").
W I T N E S S E T H :
Seller agrees to sell and convey to Buyer, and Buyer agrees to
purchase from Seller, all those certain plots, pieces or parcels
of land with the buildings and improvements erected thereon,
situate, lying and being in the Borough of Pleasant Hills, County
of Allegheny and the Commonwealth of Pennsylvania, being more
particularly described in Exhibit A annexed hereto and made a
part hereof (hereinafter referred to as the " Premises"), all
upon and subject to the terms and conditions herein.
1. Included in Sale: This sale includes all of the
following which are applicable to the Premises (which, together
with the Premises, are hereinafter referred to as the
"Property"):
(a) All right, title and interest of Seller in and to
the buildings, structures and improvements located in, on or
under the Premises; and
(b) All right, title and interest of Seller, if any,
in and to any land lying in the bed of any street, road or avenue
opened or proposed, in front of or adjoining the Premises; and
(c) All right, title and interest of Seller in and to
all personal property, furniture, fixtures, vehicles, office
equipment, computer equipment, maintenance equipment and other
equipment set forth on Exhibit H attached hereto and made a part
hereof (hereinafter referred to as the "Personal Property"); and
(d) All right, title and interest of Seller in and to
all easements, rights-of-way, gores of land, passages, sewer
rights, waters, water courses, water rights and powers and all
estates, rights, titles, interests, privileges, liberties,
hereditaments and appurtenances of any nature whatsoever, in any
way belonging, relating or pertaining to the Premises;
(e) All security deposits held by Seller pursuant to
any leases with tenants at the Premises, now or hereafter made
pursuant to this Contract (such tenants being hereinafter
referred to as "Tenants" and such leases being hereinafter
referred to as
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<PAGE>
"Tenant Leases") and any rents paid or payable pursuant to any
Tenant Leases for the period commencing with the "Closing Date"
(as hereinafter defined), subject, however, to the terms and
conditions hereof; and
(f) All right, title and interest of Seller in and to
all Tenant Leases, permits, certificates, consents, licenses and
concessions of or relating to the possession, use, occupancy or
enjoyment of all or any portion of the Premises, whether now
existing or hereafter made; and
(g) All right, title and interest of Seller in and to
any and all contracts and agreements, written or oral, expressed
or implied, now or hereafter entered into or arising, in
connection with any matter related to the Property including,
without limitation, any and all service contracts and repair
agreements and warranty and guaranty rights, if any; and
(h) All right, title and interest of Seller in and to
the trade name "Cloverleaf Village Apartments".
2. Purchase Price. The purchase price (hereinafter
referred to as the "Purchase Price") for the Property is Three
Million and % ($3,000,000.00) Dollars is payable as follows:
(a) Deposit. Upon the execution and delivery of this
Contract, Buyer shall make a deposit (the "Contract Deposit") in
the amount of One Hundred Thousand and % ($100,000.00) Dollars
with Lawyers Title Insurance Corporation, located at Ten Bank
Street, Suite 1120, White Plains, New York 10606 (hereinafter
referred to as "Escrow Agent"). The Contract Deposit shall be
made by check made payable to Lawyers Title Insurance
Corporation, as Escrow Agent and shall be held in escrow by
Escrow Agent in a Federally insured, interest bearing account,
with interest payable to the party entitled to receive the
Contract Deposit pursuant to the terms of this Contract. The
Contract Deposit, together with all accrued interest thereon,
shall be applied to the Purchase Price at "Closing" (as
hereinafter defined) or if the Closing does not occur shall be
paid to Seller unless this Contract expressly provides that it
shall be paid to Buyer. If for any reason the Closing does not
occur and either party makes a written demand upon the Escrow
Agent for payment of the Contract Deposit, the Escrow Agent shall
give written notice to the other party of such demand. If the
Escrow Agent does not receive a written objection from the other
party to the proposed payment within ten (l0) days after the
giving of such notice, the Escrow Agent is hereby authorized to
make such payment. If the Escrow Agent does receive such written
objection within such ten (l0) day period or if for any other
reason the Escrow Agent in good faith shall elect not to make
such payment, the Escrow Agent shall continue to hold such amount
until otherwise directed by written instructions from the parties
to this Contract or disposition of the same has been directed by
a final, nonappealable court order or Escrow Agent may pay the
Contract Deposit into court in accordance with proper court
procedure. The parties acknowledge that the Escrow Agent is
acting solely as a stakeholder at their request and for their
convenience,
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<PAGE>
that the Escrow Agent shall not be deemed to be the agent of
either of the parties, except as expressly set forth herein, and
that the Escrow Agent shall not be liable to either of the
parties for any act or omission on its part unless taken or
suffered in bad faith, in willful disregard of this Contract or
of any escrow agreement or involving gross negligence. Both
parties shall jointly and severally reimburse and indemnify
Escrow Agent harmless from and against any and all loss,
liability, costs and expenses, including without limitation,
reasonable attorneys' fees and expenses as a result of its
performance of its duties and obligations under this Contract.
Upon making the delivery of the Contract Deposit and interest
earned thereon in the manner provided in this Contract, Escrow
Agent shall have no further liability hereunder. The Escrow
Agent joins in the execution of this Contract solely for the
purpose of acknowledging receipt of the Contract Deposit and its
agreement to hold the same pursuant to the terms hereof.
Anything contained herein to the contrary notwithstanding, Escrow
Agent shall be free to represent Seller in any and all manner
regarding this Contract and/or any dispute or litigation arising
hereunder.
(b) Balance at Closing. The balance of the Purchase Price
shall be paid by Buyer at the Closing, subject to any credit
and/or prorations provided for in this Contract. Said payment
shall be made by certified or cashier's check payable to Seller
or by wire transfer to Seller's account(s) or at Seller's
direction to Escrow Agent, for the benefit of Seller and as agent
for Seller or as Seller may direct in writing.
3. Permitted Encumbrances. The Property shall be sold and
conveyed subject to the following encumbrances (hereinafter
referred to as the "Permitted Exceptions"):
(a) Any state of facts a survey and/or inspection of the
Property may show;
(b) All present and future laws, statutes, codes,
ordinances, rules, regulations, restrictions and orders affecting
the Property, including without limitation, all zoning and
building ordinances and regulations of the commonwealth, city,
town and/or village in which the Property is located;
(c) The lien of real estate taxes, assessments, water
charges, sewer rents and municipal charges subject to
apportionment as provided for herein;
(d) All covenants, restrictions, easements, reservations,
conditions, consents and agreements of record although Buyer
shall have the right to review the title to the Property pursuant
to paragraph 4 below, provided, however, Buyer shall not have the
right to raise an objection to title to any of those matters set
forth on Exhibit B attached hereto and made a part hereof unless
any of those matters materially interfere with the current use of
the Property, in which case the Buyer will have the right to
object to same in accordance with the terms and provisions of
paragraph 4(b) herein below, provided that such objections shall
be made no later than ten (10) days after receipt of the Title
Commitment (hereinafter defined);
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<PAGE>
(e) All Tenant Leases, subleases, tenancies and rights of
occupancy affecting the Property, all as may be affected by any
rent laws, regulations, court rulings and court decisions; and to
the form of lease being used at the Property, it being understood
and agreed that such leases and tenancies may be terminated or
expire between the date hereof and the Closing because of
expiration, defaults, summary proceedings or for any other reason
whatsoever and Seller shall not be liable therefor;
(f) The rights, if any, relating to construction,
maintenance and operation of public utility lines, wires, poles,
cables, pipes, distributing boxes and other equipment and
installations on, over and under the Property;
(g) All violations of Federal, state and local laws,
ordinances, regulations, rules, orders or requirements according
to or issued by any governmental authority having jurisdiction
with respect to the Property;
(h) All maintenance, supply and service contracts set forth
on Exhibit C annexed hereto and made a part hereof and any and
all other such contracts and amendments, extensions or
modifications thereto which Seller may enter into in the ordinary
course of its business (collectively, the "Service Contracts"),
provided, however, Seller hereby agrees that there will be no
other Service Contracts which will continue in effect after
Closing except as set forth in Exhibit C, except Seller shall
have the right to enter into additional Service Contracts which
would bind Buyer if Seller obtains Buyer's prior consent, which
consent shall not be unreasonably withheld, denied, delayed or
conditioned; and
(i) Encroachments and/or projections of walls, foundations,
stoops, cellar steps, areas, cornices, trim and/or other
improvements and/or installations onto the Property or from the
Property onto adjoining property; party walls and/or party wall
rights; variations between the record lot lines of the Property
and those shown on the tax map; and/or consents of record for the
erection and/or maintenance of any structures on, under or above
any streets or roads in front of or adjoining the Property.
4. Title Review.
(a) Buyer has the right to review title to the Property and
raise objections thereto (except as provided in paragraph 3(d)
above) during the ten (10) day period commencing on the date
Buyer receives the title insurance commitment with respect to the
Property, as discussed below. In the event Buyer wishes to raise
any objections to the title to the Property (except as provided
in paragraph 3(d) above), Buyer shall follow the procedure set
forth in Paragraph 4(b) below. In the event Buyer does not raise
any objections to the title to the Property within said ten (10)
day period, in accordance with paragraph 4(b) below, then Buyer
shall be deemed to have agreed to accept title to the Property in
the state as set forth in the title insurance commitment.
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(b) Buyer shall order, within five (5) days after the date
on which a fully executed counterpart of this Contract is
delivered to Buyer (hereinafter the "Effective Date"), a title
insurance commitment (the "Title Commitment") from a reputable
title insurance company licensed to do business in the
Commonwealth of Pennsylvania (hereinafter referred to as the
"Title Company") which shall commit to insure at Closing Buyer's
title to the Property. Buyer, within ten (10) days after receipt
of the Title Commitment, shall notify Seller in writing of any
objections as to the marketability of title matters reflected in
such Title Commitment (except any exceptions which are shown on
Exhibit B attached hereto, as provided in paragraph 3(d) above).
To the extent that Buyer does not furnish Seller with written
notice of objections to the Title Commitment, within ten (10)
days after receipt of the Title Commitment , Buyer shall be
deemed to have waived any such objections to the Title Commitment
and to the status of title of the Property. If Buyer shall
notify Seller in writing of any objections as to the
marketability of title as reflected in the Title Commitment
within such ten (10) day period , then Seller shall have the
right at its option to cure said objections or the right not to
cure said objections. Seller shall notify Buyer as to its
election within ten (10) days after receipt of Buyer's notice of
objections. If Seller shall elect not to cure said objections,
then Buyer shall have the right to elect either to accept title
subject to such objected items without any reduction in the
Purchase Price or to terminate this Contract. Buyer shall notify
Seller as to its election within seven (7) days of receipt of
Seller's notice to Buyer of its election not to cure said
objections. If Buyer shall fail to give Seller such notice of
Buyer's election either to accept title or to terminate this
Contract within the time specified, it shall be presumed
conclusively that Buyer has elected to accept title to the
Property subject to such objected items without any reduction in
the Purchase Price. If Buyer elects to terminate this Contract
within the time specified above, neither Buyer nor Seller shall
have any further liability hereunder (except as otherwise
expressly provided in this Contract), provided, however, Buyer
shall have the right to a return of the Contract Deposit and
Buyer shall be obligated to pay all charges relating to said
Title Commitment. In the event Seller elects to cure any
objections raised by Buyer concerning said Title Commitment,
Seller shall have a reasonable period of time within which to
cure such objections. After Buyer has approved the state of
title as per the above, Buyer shall have no right to object to
the state of title to the Property, except as to any encumbrances
on title which are caused by Seller between said time title was
so approved and the date of Closing and which render title to the
Property unmarketable.
5. Apportionment.
(a) The following are to be apportioned
as of midnight of the day prior to the Closing Date with respect
to the Property and shall serve to reduce or increase, as the
case may be, the cash to be paid at Closing:
(i) Real estate taxes, sewer rents, water charges and
similar charges (singularly "Imposition" and collectively
"Impositions") on the basis of the respective periods for which
the same are assessed. If the Closing shall occur before any
such Imposition has been fixed, apportionment of such Imposition
shall be based on the
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amount of the Imposition paid for the latest applicable period,
but shall be re-apportioned upon receipt of the applicable bills
therefor and upon demand of either party;
(ii) Utility charges, including without limitation,
water, gas, electrical and telephone services (to the extent not
paid by Tenants), shall be apportioned based on final meter
readings or bills, as the case may be. If the final meter
reading or bill for any utility charge has not been rendered for
the period in which the Closing Date occurs, such utility charges
shall be adjusted at Closing on the basis of the charges for the
most recent prior period, but shall be re-apportioned upon
receipt of the final meter readings or applicable utility bills
and upon the demand of either party;
(iii) Current accounts paid or payable under any
Service Contracts affecting the Property;
(iv) All rents actually collected under the Tenant
Leases for the month in which the Closing occurs. At Closing
Seller shall furnish to Buyer a schedule of all rents and other
charges which are then payable by Tenants of the Property, but
which have not been paid and collected as of the Closing Date.
Any such delinquent rents or charges collected by Buyer
subsequent to the Closing Date for the month in which the Closing
occurs (the "Closing Month") shall be pro-rated as of midnight of
the day prior to the Closing Date and the pro-rated share payable
to Seller shall be remitted to Seller promptly by Buyer, as
hereinafter provided. Until the closing, Seller may (but shall
not be required to) institute any action or proceeding against
any Tenant based upon any default or failure of such Tenant to
perform the terms, covenants or conditions of such Tenant's lease
or tenancy. With respect to any months other than the Closing
Month, if Buyer collects any such delinquent rents or charges
owed by a Tenant or Tenants, then, the first rentals and monies
received by Buyer (other than for the Closing Month) from such
Tenant or Tenants shall be applied first to pay the rent due for
the current month and any excess remaining shall be received in
trust by Buyer for the account of Seller in payment of such past
due rents or charges and shall be promptly remitted by Buyer to
Seller forthwith. Seller shall have the right subsequent to the
Closing to bring a legal proceeding against any Tenant to enforce
collection of past due rents owed to Seller by said Tenant and
Buyer shall make available to Seller all books and records
required therefor and shall otherwise cooperate with Seller in
connection therewith. All rent collected by Seller after Closing
for any rental periods applicable to any time after the Closing
shall belong to Buyer, and if paid to Seller, Seller shall
promptly send such rent to Buyer. The provisions of this
paragraph shall survive Closing.
(v) At closing, Seller will assign all security
deposits given by Tenants at the Property (including interest as
required under applicable law or Tenant Lease) to Buyer, or in
the alternative, at Seller's option, make an equivalent
adjustment to the cash payable at Closing, and Buyer shall
indemnify Seller from and against any and all claims made as a
result of any actions or omissions of Buyer with respect thereto.
Seller will not release any such security deposits in whole or in
part nor retain any security deposits as an
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offset against unpaid rent due from any Tenant unless the said
Tenant is no longer in possession of an apartment at the
Property; and
(vi) All wages of employees of Seller working at the
Property, if applicable.
(b) The obligation pursuant to this paragraph 5
to apportion or re-apportion any of the foregoing items at or
subsequent to the Closing shall survive the Closing for a period
of twelve (12) months. At the expiration of said twelve (12)
month period, unless either Seller or Buyer objects to an
apportionment or demands a re-apportionment within such twelve
(12) month period, all adjustments shall be deemed final.
6. Assessments; Notices. (a) If at the time of delivery
of the "Deed" (as hereinafter defined), the Property or any part
thereof shall be or shall have been affected by an assessment or
assessments which are or may become payable in annual
installments, then, for the purposes of this Contract, all unpaid
installments of any such assessment which are due and payable and
constitute a lien as of the Closing Date shall be paid and
discharged by Seller (subject to apportionment for the period in
which the Closing occurs) and all other unpaid installments of
any such assessment which are due and payable after the Closing
Date shall be the sole responsibility of Buyer.
7. Closing Costs. Seller shall pay at Closing one half (1/2)
of any and all transfer taxes levied or assessed against or upon
the conveyance of title to the Property. Buyer shall pay at
Closing one half (1/2) of any and all transfer tax levied or
assessed against or upon the conveyance of title to the Property
and all other costs in connection with this Contract, including
without limitation, the premiums and all other costs and expenses
charged by the Title Company for the issuance of the Title
Commitment and the title insurance policy to Buyer, any and all
survey costs and costs and expenses in connection with Buyer's
due diligence and other review of the Property. Buyer also shall
pay at Closing the recording fees for the Deed and all other
transfer documents. Except as otherwise expressly set forth
herein, each party shall pay their own respective fees and costs,
including attorney's fees and costs.
8. Date and Place of Closing. Settlement, the delivery of
the Deed and all other "Closing Documents" (as hereinafter
defined) in exchange for the Purchase Price and the closing of
title (herein referred to as the "Closing") shall take place in
escrow, by mail, at the office of the Escrow Agent on the Closing
Date. The Closing Date shall be on or before October 31, 1997,
however, Seller shall have the right in its sole discretion to
extend the Closing Date for a period not to exceed forty-five
(45) days on five (5) days prior written notice. Time shall be
of the essence as to the October 31, 1997 closing date, or if
Seller has so extended the closing date, time shall be of the
essence with respect to such extended closing date. At Closing,
the Escrow Agent shall release the Deed to Buyer for recordation
(or to the Title Company if Buyer so directs) upon Escrow Agent's
receipt of the Purchase Price in readily available Federal funds.
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9. Delivery At Closing.
(a) At the Closing, Seller shall deliver to Buyer all of
the following with respect to the Property (the "Closing
Documents"):
(i) A special warranty deed, in substantially the same
form as set forth in Exhibit D annexed hereto, conveying the
Property to Buyer subject to the Permitted Exceptions and those
exceptions listed on Schedule B of the Title Commitment which
have not been objected to by Buyer or which have been objected to
by Buyer and either been approved or, pursuant to the terms
hereof, deemed approved by Buyer pursuant to paragraph 4(b), or
cured by Seller (herein referred to as the "Deed");
(ii) A Bill of Sale conveying all Personal Property to
Buyer without recourse to Seller in substantially the same form
as set forth in Exhibit E annexed hereto;
(iii) An original executed Assignment and Assumption
of all Tenant Leases and security deposits made under the Tenant
Leases in substantially the same form as set forth in Exhibit I
attached hereto, provided Seller has not elected to make an
adjustment for the security deposits at Closing;
(iv) Notice to all Tenants of the Property, duly
executed by Seller, advising said Tenants of the sale of the
Property to Buyer and directing that all rents and other
payments, as of the Closing Date, be sent to Buyer (or, if Buyer
shall so direct, to Buyer's Agent) at the address to be provided
by Buyer;
(v) Seller's affidavit stating Seller's Federal
taxpayer identification number and certifying that Seller is not
a foreign person, corporation, partnership, trust or estate as
defined in the Internal Revenue Code and Regulations thereunder,
pursuant to the Foreign Investment in Real Property Tax Act of
1980;
(vi) Original executed counterpart of an Assignment
and Assumption of all Service Contracts in substantially the same
form as set forth in Exhibit I attached hereto;
(vii) An affidavit of the party executing the Deed on
behalf of Seller and an appropriate resolution or certificate of
Seller stating that Seller and any persons acting for or on
behalf of Seller are authorized and empowered to make this
Contract and to perform all obligations on Seller's part to be
performed hereunder and to convey title to the Property and to
execute, where necessary, and to deliver all of the Closing
Documents referenced herein to Buyer in accordance with the terms
and provisions of this Contract;
(viii) Properly executed transfer tax returns, to the
extent required;
(ix) Keys to the Property;
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(x) A current "Rent Roll" (as hereinafter defined) as
of the Closing; and
(xi) An original executed counterpart or (to the
extent lost or unavailable) an accurate and complete copy of each
one of the Tenant Leases, which shall be delivered to Buyer at
the Property.
(b) At the Closing, Buyer shall deliver to Seller all of
the following:
(i) Payment of the Purchase Price as required by and
as adjusted pursuant to the terms and provisions of this
Contract;
(ii) An affidavit of the party executing this Contract
on behalf of Buyer and an appropriate resolution or certificate
of Buyer, in form reasonably satisfactory to Seller, stating that
Buyer and any persons acting for or on behalf of Buyer are
authorized and empowered to make this Contract and to perform all
obligations on Buyer's part to be performed hereunder and to
execute, where necessary, and to deliver all of the Closing
Documents referenced herein in accordance with the terms and
provisions of this Contract;
(iii) Original executed counterpart of Assignment and
Assumption of all Tenant Leases and security deposits made under
the Tenant Leases if Seller has not elected to make an adjustment
for security deposits at Closing; and
(iv) Original executed counterpart of Assignment and
Assumption of all Service Contracts.
(c) It is understood and agreed that the Assignment and
Assumption Agreements referred to above in paragraphs 9(a)(iii),
9(a)(vi), 9(b)(iii) and 9(b)(iv) shall contain an indemnity
provision pursuant to which Seller will agree to indemnify Buyer
and hold Buyer harmless from and against any loss, cost,
liability or damages (including reasonable attorneys' fees) which
result from, arise out of or relate to (i) any claims arising out
of any of the Tenant Leases pertaining to any period prior to the
Closing Date or (ii) any claims arising out of any of the Service
Contracts pertaining to any period prior to the Closing Date,
respectively. Notwithstanding the foregoing, the parties hereto
hereby understand and agree that Buyer is purchasing the
Properties on an "as is" basis and therefore Seller's obligation
to indemnify and hold harmless Buyer, as hereinabove provided,
shall not include any claim, loss, cost, liability or damages
arising out of the condition of the Property (including without
limitation, the environmental condition of the Property) or any
portion thereof and that Buyer shall be responsible for all costs
of repair, maintenance, environmental clean-up and replacement of
the Properties and/or any portion thereof and shall not have any
claim against Seller in connection therewith.
(d) It is understood and agreed that the Assignment and
Assumption Agreements referred to above in paragraphs 9(a)(iii),
9(a)(vi), 9(b)(iii) and 9(b)(iv) shall contain an
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indemnity agreement pursuant to which Buyer will agree to
indemnify Seller and hold Seller harmless from and against any
loss, cost, liability or damages (including reasonable attorneys'
fees) which result from, arise out of or relate to (i) any claims
arising out of any of the Tenant Leases or security deposits
pertaining to any period after the Closing Date commencing with
the Closing Date or (ii) any claims arising out of any of the
Service Contracts pertaining to any period after the Closing Date
commencing with the Closing Date, respectively. Notwithstanding
the foregoing, the parties hereto hereby understand and agree
that Buyer is purchasing the Properties on an "as is" basis and
therefore Buyer shall indemnify and hold harmless Seller from and
against any claim, loss, cost, liability and/or damages arising
out of the condition of the Properties (including without
limitation, the environmental condition of the Property) and/or
any portion thereof regardless of when any such claim, loss,
cost, liability or damages arises on, prior to or after the
Closing Date.
10. Rent Roll.
Annexed hereto and made a part hereof as Exhibit F is a
complete and correct rent roll with respect to the Property
(herein referred to as the "Rent Roll") which sets forth: (i)
the name of each Tenant; (ii) each Tenant's apartment; (iii) the
current rent; (iv) the expiration date; (v) the rent actually
collected; and (vi) the security deposit. The Rent Roll to be
delivered to Buyer at the Closing will be made current as of the
Closing Date.
11. Buyer's/Seller's Representations. (a) Buyer hereby
warrants, represents and agrees that the following are true as of
the Effective Date and will be true on the Closing Date and shall
survive the Closing Date:
(i) Buyer is a duly organized and validly existing
limited partnership under the laws of the State of New York, has
all requisite power and authority to execute and deliver this
Contract and all other documents and instruments to be executed
and delivered by it hereunder, and to perform its obligations
hereunder and under such other documents and instruments in order
to consummate this Contract in accordance with the terms and
conditions hereof, and all necessary actions of the Buyer have
been taken to confer all necessary power and authority upon the
persons executing this Contract and all documents which are
contemplated by this Contract on behalf of Buyer, except that
Seller acknowledges that it is a condition of Buyer's obligations
hereunder that the Board of Directors of the general partner of
Buyer approve this Contract on or before October 31, 1997,
although it is understood and agreed that Buyer's sole right and
remedy in the event such approval is not obtained by such date
shall be the right to terminate this Contract and receive a
refund of the Contract Deposit; and
(ii) There is no litigation, action, proceeding or law
suit pending against Buyer which might adversely effect Buyer's
ability to consummate this Contract in accordance with the terms
and provisions hereof.
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(b) Seller represents and warrants to Buyer that to the
best of Seller's knowledge without any independent inquiry:
(i) There is no litigation, proceeding or
investigation pending or, to the best of Seller's knowledge,
threatened against or affecting the Property that might affect or
relate to the validity of this Contract, other than those fully
covered by insurance;
(ii) There is no pending condemnation of the Property
or any part thereof;
(iii) Until Closing, Seller shall make all reasonable
efforts not to default under it obligations under the terms of
the Tenant Leases encumbering the Property and under the Service
Contracts, subject to Seller's sole but reasonable discretion in
exercising its rights and remedies under the Tenant Leases and
Service Contracts and at law and in equity, and Seller shall
continue to operate the Property in a commercially reasonable
manner;
(iv) 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 of any rent due under any such
leases for a period greater than one (1) month in advance other
than security deposits;
(v) Seller has not received any written notice of any
violations of Federal, state and local laws, ordinances,
regulations, rules, orders or requirements according to or issued
by any governmental authority having jurisdiction with respect to
the Property.
(c) Irrespective of anything to the contrary contained
herein, the representations of Buyer and Seller herein contained
shall expire and be of no further effect upon the expiration of
six (6) months after Closing. This expiration shall not apply to
any breach of representation which arises out of an intentional,
material misrepresentation made by Buyer or Seller.
(d) The phrase "to the best of Seller knowledge" or its
equivalent shall be deemed to mean the personal and actual
knowledge of Samuel Ginsburg.
12. (a) Buyer is hereby granted a period commencing on the
Effective Date and terminating on October 14, 1997 (herein
referred to as the "Due Diligence Period") to inspect the
Property, at Buyer's sole cost and expense. Seller hereby
authorizes Buyer, upon reasonable notice and during reasonable
business hours and provided Buyer is accompanied at all times
with an authorized representative of Seller, to enter upon the
Property in order to inspect the same. If Buyer elects not to
acquire the Property pursuant to the terms and conditions hereof,
Buyer must notify Seller in writing prior to 5:00 PM on October
31, 1997 (the "Due Diligence Expiration Date"). If such written
notice is not delivered to Seller by Buyer prior to the Due
Diligence Expiration Date, Buyer shall be obligated to close the
transaction contemplated hereby pursuant to the terms and
conditions hereof, and shall have and shall be deemed to have
waived any and all rights to
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terminate this Contract pursuant to this paragraph. In the event
Buyer does timely notify Seller in writing that it has elected to
terminate this Contract, the Contract Deposit shall be returned
to Buyer and this Contract shall be deemed to be terminated and
neither party shall have any further rights against or
obligations to the other, except as otherwise expressly provided
in this Contract.
(b) It is expressly agreed and understood that Buyer is
purchasing the Property to be conveyed hereunder in its "as is"
condition as of the date hereof and with all faults and Buyer
hereby assumes the responsibility of all use, wear, tear and
deterioration between the date of this Contract and the date of
Closing, except that Seller shall continue to operate the
Property in accordance with its current standard practice. It is
understood and agreed that, except as specifically set forth in
paragraph 11(b) herein above, Seller is not making and
specifically disclaims any warranties or representations of any
kind or character, express or implied, with respect to the
Property, including, but not limited to, warranties or
representations as to matters of title, zoning, tax consequences,
bond financing, tax credits, physical or environmental
conditions, occupancy, availability of access, ingress or egress,
operating history or projections, valuation, governmental
approvals, governmental regulations or any other matter or thing
relating to or affecting the Property including, without
limitation: (i) the value, condition, merchantability,
marketability, profitability, suitability or fitness for a
particular use or purpose of the Property, and (ii) the manner,
quality, state of repair or lack of repair of the Property.
Buyer agrees that with respect to the Property, Buyer has not
relied upon and will not rely upon, either directly or
indirectly, any representation or warranty of Seller or any
agent, broker, employee, servant, representative or affiliate of
Seller. Buyer represents and warrants that it is a knowledgeable
buyer of property and that it is relying solely on its own
expertise and that of Buyer's consultants, and that Buyer shall
assume the risk that adverse matters, including, but not limited
to, adverse physical and environmental conditions, may not be
revealed by any inspections or investigations which Buyer may
perform. Buyer acknowledges and agrees that there are no oral
agreements, warranties or representations collateral to or
affecting the Property by Seller or any agent or affiliate of
Seller or any third party. Buyer expressly agrees that the terms
and conditions of this paragraph shall expressly survive the
Closing and not merge therein and Seller is not liable or bound
in any manner for any verbal or written statements,
representations or information pertaining to the Property
furnished by any agent, broker, employee, servant, representative
or affiliate of Seller or any other person.
(c) For and in consideration of the right to inspect the
Property, Buyer agrees to restore any and all damage to the
Property and/or any portion thereof caused by Buyer and/or
Buyer's agents, representatives, brokers, contractors,
subcontractors, employees and/or licensees and to indemnify,
defend and hold Seller harmless from and against any and all
suits, actions, proceedings, damages, losses, liabilities, liens,
repairs, fees, costs and expenses (including reasonable
attorneys' fees, costs and expenses) caused by Buyer or its
agents, representatives, brokers, contractors, subcontractors,
employees and/or licensees and/or arising out of and/or relating
to Buyer's (and/or Buyer's agents', representatives', brokers',
contractors', subcontractors', employees' and/or licensees')
inspection, activities
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and/or entrance on the Property. The aforesaid obligation to
restore and aforesaid indemnity shall survive the Closing or the
earlier termination of this Contract.
13. Condemnation/Casualty.
(a) Buyer shall have no right
to terminate this Contract in the event a casualty occurs, or in
the event of the institution of any proceedings, judicial,
administrative or otherwise, prior to Closing which shall relate
to the proposed taking of any portion of the Property by eminent
domain (or deed in lieu thereof), or in the event notice of such
proceeding is given before Closing, or in the event of the taking
of any portion of the Property by eminent domain (or deed in lieu
thereof), prior to Closing. In the event of any of the
foregoing, there shall be no reduction to the Purchase Price
payable by Buyer hereunder and Seller, at Closing, shall assign
and/or pay over to Buyer all proceeds and awards of such casualty
or taking which Seller received after the Effective Date, less
any amount which Seller may have been obligated to pay to any
lender holding a mortgage on the Property or any portion thereof
(to the extent such amount is not applied to reduction of loan
principal), for repairs or restoration of the damage and/or in
negotiating and obtaining the award or proceeds.
(b) Upon the expiration of the Due Diligence Period, Seller
shall not settle any claim with respect to any eminent domain
proceeding concerning the Property or any part thereof without
obtaining Buyer's prior written consent in each case, which
consent shall not be unreasonably withheld, denied or delayed.
(c) Seller hereby agrees to furnish Buyer with written
notification of any such eminent domain proceeding within five
(5) business days after receipt by Seller of notice of the same.
14. Buyer's Default. Should Buyer default in the
performance of (i) any of the terms of this Contract, except
under paragraph 32 hereof, Seller's sole remedy with respect
thereto shall be to receive immediately and retain the Contract
Deposit paid on account of this Contract, together with any and
all accrued interest thereon, as liquidated damages, whereupon
this Contract shall become null and void, neither party having
any further rights against the other, except as otherwise
expressly provided in this Contract, and/or (ii) any of the terms
of paragraph 32 of this Contract, Seller shall have the right to
receive immediately and retain the Contract Deposit together with
all interest earned thereon and in addition thereto shall have
the right to pursue any and all other rights and/or remedies
which Seller may have under this Contract, at law and/or in
equity, including without limitation, compensatory and
consequential damages. The foregoing notwithstanding, if Buyer's
default consists of any act or failure to act, Seller shall give
Buyer written notice describing such default and shall afford
Buyer ten (10) days to cure such default before availing itself
of Seller's remedy under this paragraph.
15. Seller's Default. Should Seller default in the
performance of any of the terms of this Contract, Buyer shall
have the right to terminate this Contract by giving written
notice of termination to Seller. If Buyer should elect to
terminate this Contract, the Contract Deposit, with any and all
accrued interest thereon, shall be immediately
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refunded to Buyer. The foregoing notwithstanding, if Seller's
default consists of any act or failure to act, Buyer shall give
Seller written notice describing such default and shall afford
Seller ten (10) days to cure such default before availing itself
of Buyer's remedies under this paragraph.
16. Notices. All notices given or required to be given
hereunder shall be deemed to be duly given only if sent by
registered or certified mail, return receipt requested and
deposited postage prepaid in a post office branch or box
regularly maintained or if sent by a reputable national overnight
service (for next day delivery) addressed to the parties at their
respective addresses set forth herein below or if sent by
facsimile transmission to the numbers indicated below:
If to Seller: Ginsburg Development Corp.
245 Saw Mill River Road
Hawthorne, New York 10532
Attn: Samuel Ginsburg
Fax: (914) 747-1608
With a copy to: Mark D. Ginsburg, Esq.
Ginsburg & Redmond, P.C.
245 Saw Mill River Road
Hawthorne, New York 10532
Fax: (914) 747-9893
If to Buyer: Home Properties of New York, L.P.
850 Clinton Square
Rochester, New York 14604
Attn: Richard J. Crossed
Fax: (716) 546-5433
With a copy to: Robin L. Stein, Esq.
Home Properties of New York, L.P.
850 Clinton Square
Rochester, New York 14604
Fax: (716) 546-5433
or to such other address as either party may designate in
accordance with this paragraph. Any such notice shall be deemed
effective on the earlier of receipt (with acknowledgment) or the
third business day after mailing or the next day after delivery
to such overnight service or, in the case of a facsimile
transmission, upon receipt of a statement indicating that the
transmission was successfully completed, except that any notice
of change of address shall be effective only upon actual receipt.
The attorney for each party shall have the power to give any
notice required or desired to be given under this Contract with
the same force and effect as if the same had been given by such
party.
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17. Broker.
(a) Each party hereto represents to the other
that it has had no dealings with any broker, agent or finder in
connection with this transaction.
(b) Buyer and Seller each represents and warrants to
the other that in the event any claim is made for a broker's
commission or finder's fee as a result of acts or actions of one
of them with respect to this transaction, the party because of
whose acts or actions such claim is made (hereinafter referred to
as the "Indemnitor"), its successor and assigns, hereby agrees to
indemnify, defend and hold harmless the other party (hereinafter
referred to as the "Indemnitee") from and against any and all
loss, cost, damage, liability or expense (including reasonable
attorney's fees and expenses) which Indemnitee may sustain, incur
or be exposed to by reason of any such claim. The provisions of
this subparagraph 17(b) shall survive the Closing or any earlier
termination of this Contract.
18. Modifications. This Contract may not be modified or
supplemented except by an instrument in writing signed by the
party to be charged or such party's attorney.
19. No Waiver. No waiver by either party of any failure or
refusal by the other party to comply with its obligations under
this Contract shall be valid unless in writing and signed by the
party to be charged or such party's attorney and no such waiver
shall be deemed a waiver of any other or subsequent failure or
refusal to so comply.
20. Governing Law/Waiver of Jury. This Contract and all
transactions contemplated by this Contract shall be governed by
and construed and enforced in accordance with the laws of the
State of New York without regard to principles of conflicts of
laws. Both Buyer and Seller hereby irrevocably waive all right
to trial by jury in any action, proceeding or counterclaim
arising out of or relating to this Contract.
21. Recordation. Buyer covenants and agrees that in no
event will Buyer record or cause to be recorded this Contract or
any memorandum thereof or any affidavit, assignment or other
document relating to this Contract and that if Buyer breaches the
provisions of this paragraph, Seller shall have the option of
terminating this Contract and retaining the Contract Deposit as
liquidated damages in addition to any other rights that Seller
may have.
22. Seller's Obligations: If Seller is unable to transfer
title to Buyer in accordance with this Contract, Seller's sole
obligation shall be to refund the Contract Deposit (or so much
thereof as has been deposited) to Buyer. After the Contract
Deposit (or so much thereof as has been deposited) is paid to
Buyer, neither party shall have any rights or obligations to the
other and this Contract shall be null and void, except as
otherwise expressly provided in this Contract.
23. Arms Length. This Contract and any exhibits hereto
have been negotiated at arms length by Seller and Buyer and the
parties hereto mutually agree that, for the purpose of construing
the terms of this Contract or any of the exhibits hereto, neither
party shall be deemed to have been responsible for the drafting
thereof.
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24. Entire Agreement. All prior understandings, agreements
and negotiations by and between the parties hereto are merged in
this Contract, which also constitutes the entire agreement of the
parties and shall inure to and bind the successors and permitted
assigns of the respective parties hereto.
25. Partial Invalidity. If any term or provision of this
Contract or the application thereof to any person or
circumstances shall, to any extent, be invalid or unenforceable,
the remainder of this Contract or the application of such term or
provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected
thereby, and each term and provision of this Contract shall be
valid and enforceable to the fullest extent of the law.
26. Headings. The headings of the paragraphs of this
Contract have been inserted for convenience of reference only and
shall not constitute a part hereof.
27. Counterparts. This Contract may be signed by the
parties in counterparts, both of which, when taken together,
shall be deemed an original Contract.
28. Cumulative Remedies. Each and every of the rights,
benefits and remedies conferred by this Contract or any document
executed pursuant to this Contract, are cumulative and shall not
be exclusive of any other of said rights, remedies and benefits
allowed by law or equity to the parties, subject, however, to the
provisions of paragraphs 14 and 15 hereof.
29. Attorneys' Fees. Seller and Buyer agree that, in the
event of any litigation arising between the parties in connection
with this Contract, the losing party shall be responsible for
payment of the reasonable attorneys' fees of the successful party
(at trial and all appellate levels).
30. Survival. Buyer agrees that upon the delivery of the
Deed at Closing for the Properties, it shall be deemed and
considered as full compliance by Seller of all representations
and warranties made by Seller in this Contract, if any, and all
obligations and agreements by Seller to be performed unless
expressly stated herein to survive.
31. Assignment. This Contract may be assigned without the
consent of Seller to a single-purpose entity of which Buyer is
the general partner. This Contract otherwise may not be assigned
by Buyer without the consent of Seller. In the event of any
permitted assignment , the assignee must assume all of the
obligations and liabilities of Buyer hereunder and in no event
Buyer shall be released from any liability and/or obligations
hereunder.
32. Tax Deferred Exchange. Seller has advised Buyer of its
intention to seek to effect a tax deferred exchange pursuant to
Section 1031 of the Internal Revenue Code, in connection with the
conveyance of the Property (or any portion thereof). If Seller
is able
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<PAGE>
to negotiate terms acceptable to Seller for the transfer or
acquisition of an exchange property or properties, then Buyer
agrees to accommodate Seller in seeking to effect a tax deferred
exchange for that property or properties. Seller shall have the
right, expressly reserved here, to transfer the Property (or any
portion thereof) in exchange for such exchange property or
exchange properties so identified by Seller so that Seller shall
become the owner of the exchange property or properties and the
owner of the exchange property or properties shall become the
owner of the Property (or any portion thereof) subject to all
obligations of Seller hereunder. The owner of the exchange
property then shall complete this Contract. In the alternative,
Buyer agrees to cooperate with Seller with respect to such
exchange and agrees to execute all documentation required to
effectuate such exchange, including, but not limited to, an
Exchange Trust Agreement, Designation of Exchange Property and
Notice of Assignment of Contract of Sale For Relinquished
Property in accordance with the forms as set forth in Exhibit G
annexed hereto and made a part hereof. Buyer makes no warranty
whatsoever with respect to the qualification of the transaction
for tax deferred exchange treatment under Section 1031 and Buyer
shall have no responsibility, obligation or liability with
respect to the tax consequences to Seller. Buyer's expenses with
respect to the conveyance of the Properties shall be limited to
the expenses as set forth in this Contract (although Buyer shall
be responsible for its own attorneys' fees and expenses). The
covenants and obligations contained in this Paragraph shall
survive the Closing. Notwithstanding the foregoing, Seller
agrees that the Deed conveying title to the Property from Seller
to Buyer shall be executed and delivered directly by Seller in
accordance with subparagraph 9(a)(i) herein above.
33. Confidentiality. By executing this Agreement and
except as otherwise provided herein, prior to Closing Seller
agrees to keep any and all information with respect to the
transactions contemplated under this Contract strictly
confidential, and will not disclose any such information without
the Buyer's prior written consent except as may be necessary to
satisfy Seller's obligations hereunder and/or to close the
transaction contemplated hereby.
34. Financial Access. Seller will certify to Seller that
its records accurately reflect the operation of the Property on a
cash basis. Such certification shall be in substantially the
same form as Exhibit J annexed hereto. Seller will provide
access by Buyer's representatives, upon reasonable notice and
during reasonable business hours 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 the Securities and Exchange
Commission (the "Commission") and any registration statement,
report or disclosure required to be filed with the Commission.
35. Certificate of Occupancy. To the extent that any state
or local laws or regulations require the issuance of a current
Certificate of Occupancy in connection with the transfer of the
Property, Seller shall use its reasonable best efforts to provide
an unconditional Certificate of Occupancy at Closing, provided
that Seller shall not be obligated to expend any sum in excess of
$100,000 in connection with the issuance of
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<PAGE>
such Certificate of Occupancy. Seller shall have the right to
terminate this Contract if, in Seller's sole but reasonable
discretion, the cost to provide such Certificate of Occupancy
will exceed $100,000.00. The foregoing notwithstanding, Buyer
shall have the right (but not the obligation) to vitiate Seller's
termination of this Contract pursuant to this paragraph by giving
Seller written notice within five (5) days after Buyer's receipt
of Seller's notice of termination that Buyer agrees to accept
title to the Property without such Certificate of Occupancy, in
which event, Seller shall give Buyer at Closing a credit against
the Purchase Price in the amount of $100,000.00.
IN WITNESS WHEREOF, this Contract has been duly executed by
the parties hereto as of the day and year first above written.
SELLER:
HUDSON PALISADES ASSOCIATES,
a New York general partnership
By:
/s/ Samuel Ginsburg
-----------------------------
Samuel Ginsburg, General Partner
BUYER:
HOME PROPERTIES OF NEW YORK,
L.P., a New York limited partnership
By: Home Properties of New York, Inc.,
its general partner
ATTEST
By: By:
/s/ Robin L. Stein /s/ Ann M. McCormick (Seal)
- ------------------ --------------------------------
Name:Robin L. Stein Ann M. McCormick
Title:Assistant Counsel Vice President
The undersigned has executed this Contract solely to acknowledge
receipt of the Contract Deposit and to confirm its acceptance of
the duties of Escrow Agent as set forth in paragraph 2(a) hereof.
Lawyers Title Insurance Corporation
By:
/s/ Mack Marsh
- -------------------------------
Name: Mack Marsh
Title Senior Vice President
Page 18
<PAGE>
Exhibit 2.3
CONTRIBUTION AGREEMENT
This Contribution Agreement ("Agreement"), made as of the
17th day of November, 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
the individuals or entities listed on the attached Schedule
A (herein collectively the "Contributors" and individually
a "Contributor"), who have addresses as listed on the
attached Schedule A.
W I T N E S S E T H:
WHEREAS, the Contributors are all of the general partners of
the Scotsdale Apartments, a Michigan co-partnership (the
"Partnership");
WHEREAS, the Partnership owns a certain apartment complex
and adjacent land located in the State of Michigan, all as more
particularly described on Exhibit A;
WHEREAS, the Contributors prior to Closing (as hereinafter
defined) will cause the Partnership to convey one hundred percent
of the fee interest in the Property (as hereinafter defined) to
them in the percentages listed on the attached Schedule A to be
held as tenants-in-common;
WHEREAS, each of the Contributors wish to contribute their
interest in the Property ("Property Interests") in exchange for
cash or limited partnership interests in the Buyer;
WHEREAS, Buyer desires to acquire the Property upon the
happening of certain events;
NOW, THEREFORE, in consideration, 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
contributed by the Contributors consists of an apartment complex
commonly known as Scotsdale Apartments, which includes 376
apartments (two of which are currently used as model apartments)
(the " Project"), located in the City of Westland, State of
Michigan, on land more particularly described on Exhibit A,
attached hereto, together and including all buildings and other
improvements thereon, including but not limited to, the 376
apartment units, and all rights 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 Agreement and shall become the property of
Buyer at Closing (as hereafter defined):
A all heating, plumbing and lighting fixtures,
B ranges, refrigerators and disposals (one of each for each
apartment unit),
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<PAGE>
C water heaters,
D any and all pools and pool equipment, 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 portable dishwashers, air conditioning units other than
such units owned by tenants, mail boxes, office furniture,
clubhouse facilities, and any and all related equipment in
connection with the Property, and
E any fixtures appurtenant to the Property and any other
furniture or equipment used in connection with the operation
and maintenance of the Property, including any vehicles used
in connection with the operation and maintenance of the
Property (hereinafter with the items listed in A-D above,
collectively, the "Other Items").
3. PRICE AND MANNER OF PAYMENT.
A. The purchase price for the contribution of the Property
Interests shall be a total of Thirteen Million Six Hundred
Thousand and no/100 ($13,600,000) (the "Consideration").
The Consideration shall be payable as follows: to the
holder of the Note that is secured by a mortgage on the
Property in an amount sufficient to release the lien of that
mortgage and to pay all amounts outstanding under the Note
with the balance (the "Net Consideration") payable by (1)
issuance of limited partnership units in the Buyer (the
`Units") as described below; and (2) the balance, if any,
at closing by wire transfer to an account or accounts
designated by Jerome M. Keywell for distribution to the
appropriate Contributors.
B. Each of the Contributors shall have the right to elect to
receive all or a portion of their portion of the Net
Consideration in cash or in Units, provided however that
only those Contributors who can establish that they are
Accredited Investors under the securities laws may elect to
receive Units. In the event that a Contributor elects to
receive Units, the number of Units they will receive will be
equal to their percentage share of the Net Consideration as
set forth on the attached Schedule A divided by $25.25. The
price of $25.25 a Unit shall prevail regardless of whatever
the price of a share of the common stock of Home Properties
of New York, Inc. ("HME") is on the Closing Date.
C. No less than one business day prior to the Closing Date,
each of the Contributors shall notify the Buyer as to their
election to receive cash or Units.
D. The initial distribution payable with respect to Units
issued as part of the Consideration shall be made on the date on
which HME pays the dividend to the holders of its common
stock that relates to the earnings for the calendar quarter
in which the Units were issued and shall be pro-rated such
that the Contributors receiving Units shall receive a pro-
rata distribution for the period from the date on which the
Units were issued to and including the last day of the
calendar quarter in which the Units were issued.
4. ADJUSTMENTS AT CLOSING. The following shall be adjusted and
prorated between the Contributors and the Buyer at Closing as if
the Buyer was the owner of the Property as of the Closing Date.
At the option of the Contributors, any net adjustment in favor of
the Contributors may be made in cash or Units.
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<PAGE>
A current fiscal year real estate taxes,
B water charges,
C sewer charges,
D security deposits pursuant to the leases, unless the
security deposits are assigned to the Buyer,
E charges under the service contracts assumed by Buyer,
F laundry income;
G any other charges incurred with respect to the Property
which the Partnership or the Contributors are obligated to pay;
H Rents.
(1) All rent payments collected as of the Closing Date for the
month of Closing shall be prorated as between the parties as of
the Closing Date.
(2) All rent collected after Closing, for any period prior to
Closing, shall belong to Contributors and, if paid to Buyer,
Buyer shall promptly send such rent to the Contributors c/o
Jerome M. Keywell.
(3) All rent collected by the Contributors or the Partnership,
prior to the Closing, for rental periods subsequent to Closing
shall be paid to Buyer at Closing.
(4) All rent collected by Buyer, the Partnership or the
Contributors for rental periods after the Closing shall belong to
Buyer and, if paid to the Contributors, the Contributors shall
promptly send such rent to Buyer.
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.
5. COSTS. Buyer shall pay all recording fees, Buyer's
attorneys' fees, and all other costs and expenses incidental to
or in connection with closing this transaction customarily
paid for by the purchaser of similar property. The
Contributors shall pay the transfer tax, if any, the costs
of obtaining the Title Commitment (hereinafter defined) and
title policy, attorneys' fees, if any, incurred by them 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.
6. EVIDENCE OF TITLE. Contributors have already provided
Buyer with evidence of title in the form of Ticor Title Policy
Commitment No. 82-353839, a UCC search and survey pursuant
to the prior Contribution Agreement of the parties dated
September 16, 1997, which has been terminated. This
Agreement replaces the terminated agreement. Buyer
acknowledges that the Ticor Commitment, the UCC search and
the survey received by the Buyer pursuant to the terminated
agreement are, subject to the exceptions provided
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<PAGE>
below, accepted, and that Buyer has no objection to the
disclosures made in the Ticor Commitment, the UCC search and
the survey, except Contributors shall cause the financing
statement reflected on the UCC Search and the Reilly
Mortgage documents reflected in the Ticor Commitment to be
terminated as of the Closing Date. As promptly after closing
as possible, Contributors, at their expense, (except, for
any special endorsements that Buyer may want) shall have
delivered to Buyer a final Ticor Title Policy showing
marketable title as of the date of closing.
7. TITLE DOCUMENTS. At the time of Closing, each of the
Contributors shall deliver to Buyer the following:
A. A warranty deed;
B. A Bill of Sale;
C. A current rent roll ("Rent Roll") certified, as of the
date of Closing, which shall include a correct list of all
tenants, all rental obligations of each tenant with respect to the
Property and all security deposits (with any interest due to the
tenants);
D. The Assignment attached hereto as Exhibit B. In lieu of
an assignment of the security deposits, the Contributors may
provide Buyer with a credit at Closing for all security
deposits held by Contributors with respect to all leases
encumbering the Property.
8. AS-IS SALE. Buyer affirms that it has thoroughly inspected
the physical condition of the Project and all financial
information and data pertaining to the operation of the
Project. Buyer acknowledges that it is satisfied with its
findings and that, except as specifically provided in the
Agreement, Contributors have made no representations or
warranties with respect to the financial operation of the
Project or its physical condition, and that the Buyer takes
the Project at closing in its as-is condition.
9. CLOSING DATE. The closing shall take place by mail and wire
transfer on November 26, 1997 (the "Closing Date"), time
being of the essence.
10. POSSESSION. Buyer shall have possession and occupancy of
the Property from and after the date of delivery of the
deed.
11. BROKER'S COMMISSION. Buyer and the Contributors represent
to each other that the only broker employed in connection
with this transaction is the Dietz Organization and the
Contributors hereby agree to pay any and all commission due
to that broker. The Contributors and Buyer each represent
to the other that there are no other fees or commissions
due as a result of their employment of any Broker. The
Contributors 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.
12. RISK OF LOSS. The risk of loss or damage to all or part of
the Property by fire or other casualty or by taking by eminent
domain, until Closing, shall be assumed by the Contributors
and upon the happening of such event, Buyer shall have the
election of terminating this Agreement without further
liability hereunder, or of completing this
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<PAGE>
purchase and receiving the Contributors; share of insurance
monies, collectible for such loss or damage, or the award
for such taking by eminent domain.
13. CONDITIONS PRECEDENT.
A It shall be a condition to Buyer's obligation to close that
there are at Closing 376 apartment units (including 2 model
apartments), which are all in compliance with federal,
state, county or local laws, ordinances, rules and
regulations;
B It shall be a condition to Buyer's obligation to close
that on or before the Closing Date, all management agreements
relating to the Property shall have been terminated.
C It shall be a condition to Buyer's obligation to close that
on the Closing Date it shall acquire 100% of the fee
interest in the Property.
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 the Contributors. 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,
14. ASSIGNMENT. This Agreement, and all or any portion of the
rights of Buyer hereunder, may not be assigned by Buyer
without the prior written consent of the Contributors, which
shall not be unreasonably withheld.
15. 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, or by telecopy with confirmation of receipt to the
addresses set forth below:
To the Contributors: c/o Jerome M. Keywell
60 1/2 Grantour Court
Pontiac, Michigan 48340
Telecopy No: (248) 373-5503
To Buyer: HOME PROPERTIES OF NEW YORK, L.P.
Attn: Norman Leenhouts, Chairman
850 Clinton Square
Rochester, New York 14604
Telecopy No.: (716) 546-5433
16. PLANS. The Contributors have provided Buyer with all plans
and architectural drawings in their possession for the
improvements completed at the Properties, including, without
limitation, all "as-built" plans in their possession and the
Contributors further agree that they will endeavor to turn
over the same to Buyer at the Seller's office or at the
Property during the Due Diligence Period.
17. APPLICABLE LAW. This Agreement shall be construed and
governed in accordance with the laws of the State of Michigan.
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<PAGE>
18. 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.
19. BINDING AGREEMENT. This Agreement shall not be binding or
effective until properly executed by Buyer and the Contributors.
20. CONFIDENTIALITY. By execution of this Agreement and except
as otherwise provided herein, prior to the Closing each of the
Contributors 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.
21. CONTRIBUTOR COVENANTS.
A. The Contributors will provide, or cause to be
provided, a signed representation letter substantially
in the form attached hereto as Exhibit C. The
Contributors 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
the Securities and Exchange Commission (the
"Commission") and any registration statement, report or
disclosure statement required to be filed with the
Commission.
B. Prior to the Closing Date, the Contributors shall
continue to operate the Property in a commercially
reasonable manner with standards and procedures of no
less quality than those currently in place.
22. BUYER COVENANTS.
A. After Closing, any Contributor shall have the right to
convert Units into cash or one-for-one shares of common
stock of Home Properties of New York, Inc. (HME) as
provided in Section 6.08 of the Second Amended and
Restated Agreement of Limited Partnership of Buyer
dated September 23, 1997 (the "Limited Partnership
Agreement"), which is hereby incorporated by reference.
B. Buyer commits itself to perform the terms and
conditions of the Registration Rights Agreement, in the
form of Exhibit D attached hereto.
C. Within 30 days of the Closing Date, the Buyer agrees to
file a registration statement (the "Registration
Statement") with the Commission registering the resale
of the shares of common stock of HME into which the
Units may be converted and to use reasonable commercial
efforts to have the registration promptly thereafter
declared effective by the Commission. In the event
that the Buyer has not filed the Registration Statement
within 30 days of the Closing Date, then for and with
respect to each day after that 30th day and prior to
the date on which the Registration Statement is filed
with the Commission, the Buyer shall pay to the
Contributors in the aggregate the sum of $2,000 per
diem.
D. Prior to the Closing Date, the Buyer agrees to amend
the first sentence of paragraph (a) of Section 6.08 of
the Partnership Agreement to read as follows:
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<PAGE> "Subject to Section 6.08(c) hereof, until such
time as is within 30 days of any dissolution of the
Partnership under subparagraph (i) or (ii) of Section
7.01(a) hereof, each Limited Partner (other than the
General Partner or the QRS, if the General Partner or
the QRS is also a Limited Partner) shall have the right
(the "Purchase Right") to require the Partnership to
purchase on the Specified Purchase Date all or a
portion of the Units held by such Limited Partner at a
price equal to and in the form of the Cash Amount to be
paid by the Partnership."
E. For a period of five years after the Closing Date,
the Buyer shall not sell, exchange, transfer or
otherwise dispose of the Project unless done as a tax
free exchange.
22. EMPLOYEES. The Buyer agrees that for a period of 60 days
following the Closing, it shall not terminate the employment
of any person currently employed at the Property, except for
good cause.
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/ Amy L. Tait
------------------------------
Amy L. Tait
Title: Executive Vice President
CONTRIBUTORS:
/s/ Jerome M. Keywell
------------------------------
Jerome M. Keywell, by power of attorney on behalf of
Kopel I. Kahn, Co-Trustee under Trust Agreement of
Estelle Kahn, dated 10/30/84, as amended, Susan Kahn
Sovel, Co-Trustee under Trust Agreement of Estelle
Kahn, dated 10/30/84, as amended, Alyssa K. Mertz, Co-
Trustee under Trust Agreement of Estelle Kahn, dated
10/30/84, as amended, Kopel I. Kahn, Trustee under
Kopel I. Kahn Trust Agreement, dated 10/30/84, as
amended, Jerome M. Keywell, Trustee under Jerome M.
Keywell Agreement of Trust, dated 6/26/92, as amended,
Rita Keywell, Trustee under Rita Keywell Agreement of
Trust, dated 6/26/92, as amended, Ethel Levant, Co-
Trustee of the J. Phillip Levant Trust Agreement, dated
1/5/88, as amended, Julian M. Levant, Co-Trustee of the
J. Phillip Levant Trust Agreement, dated 1/5/88, as
amended, Ethel Levant, Trustee under Ethel Levant
Revocable Trust Agreement, dated 1/5/88, as amended
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<PAGE>
Exhibit 2.4
CONTRIBUTION AGREEMENT
This Contribution Agreement ("Agreement"), made as of the
7th day of November, 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
the individuals or entities listed on the attached Schedule
A (herein collectively the "Contributors" and individually
a "Contributor"), who have addresses as listed on the
attached Schedule A.
W I T N E S S E T H:
WHEREAS, the Contributors are the holders of all of the
equity interests in Candlewood Associates Partnership, an Indiana
partnership (the "Partnership");
WHEREAS, the Partnership owns a certain apartment complex
and adjacent land located in the State of Indiana, all as more
particularly described on Exhibit A;
WHEREAS, the Contributors prior to Closing (as hereinafter
defined) will cause the Partnership to convey one hundred percent
of the fee interest in the Property (as hereinafter defined) to
them in the percentages listed on the attached Schedule A to be
held as tenants-in-common;
WHEREAS, each of the Contributors wish to contribute their
interest in the Property in exchange for cash or limited
partnership interests in the Buyer;
WHEREAS, Buyer desires to acquire the Property upon the
happening of certain events;
NOW, THEREFORE, in consideration, 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
contributed by the Contributors consists of an apartment complex
commonly known as Candlewood Apartments, which includes 310
apartments and 107 garages, a maintenance garage and storage
facility and 209 carports (the " Project"), located in the Town
of Mishawaka, State of Indiana, on land more particularly
described on Exhibit A, attached hereto, together and including
all buildings and other improvements thereon, including but not
limited to, the 310 apartment units and 107 garages, and all
rights 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 Agreement and shall become the property of
Buyer at Closing (as hereafter defined):
A all heating, air-conditioning, plumbing and lighting
fixtures,
B ranges, refrigerators, dishwashers and disposals (one of
each for each apartment unit) and washers and dryers (208 of
each),
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C water heaters,
D any and all pools and pool equipment, 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, ceiling fans, mail boxes,
office furniture, clubhouse facilities, sauna, jacuzzi
and any and all related equipment in connection with
the Property, and
E any fixtures appurtenant to the Property and any other
furniture or equipment used in connection with the operation and
maintenance of the Property, including any vehicles
used in connection with the operation and maintenance
of the Property (hereinafter with the items listed in A-
D above, collectively, the "Other Items").
Substantially all of the Other Items are in good working
order and condition now or will be so at the time of Closing and
will be acquired by the Buyer free and clear of all liens and
encumbrances.
3. PRICE AND MANNER OF PAYMENT.
A. The purchase price for the contribution of the Property
shall be a total of Fourteen Million Four Hundred Fifteen
Thousand and no/100 ($14,415,000) (the "Aggregate
Contribution Value"). The net contribution value (the
"Net Contribution Value") for the Property shall be an
amount equal to the Aggregate Contribution Value less
the principal balance and accrued interest outstanding
upon the existing financing with respect to the
Property (the "Existing Financing") on the Closing
Date. The Net Contribution Value shall be payable as
follows: (1) issuance of limited partnership units in
the Buyer (the `Units") as described below; and (2)
the balance, if any, at closing by wire transfer to an
account or accounts designated by the Contributors to
the extent one or more of them have not elected to
receive Units.
B. Each of the Contributors shall have the right to elect
to receive their portion of the Net Contribution Value in
cash or in Units, provided however that a Contributor must
establish that he is an Accredited Investor under the
securities laws in order to elect to receive Units. In
the event that a Contributor elects to receive Units,
the number of Units he will receive will be equal to
his percentage share of the Net Contribution Value as
set forth on the attached Schedule A divided by the
"Market Value" of a Unit. The Market Value of a Unit
shall be equal to the average closing price for 20
consecutive trading days prior to, but not including,
the Closing Date of a share of common stock of Home
Properties of New York, Inc., ("HME") as listed on the
New York Stock Exchange.
C. No less than one business day prior to the Closing
Date, each of the Contributors shall notify the Buyer as to his
election to receive cash or Units.
D. The initial distribution payable with respect to Units
issued hereunder shall be made on the date on which HME
pays the dividend to the holders of its common stock
that relates to the earnings for the calendar quarter
in which the Units
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were issued and shall be pro-rated such that the
Contributors receiving Units shall receive a pro-rata
distribution for the period from the date on which the
Units were issued to and including the last day of the
calendar quarter in which the Units were issued.
4. ADJUSTMENTS AT CLOSING. The following shall be adjusted and
prorated between the Contributors and the Buyer at Closing as if
the Buyer was the owner of the Property as of the Closing
Date:
A current fiscal year real estate taxes,
B water charges,
C sewer charges,
D fuel, electricity and other utilities,
E security deposits pursuant to the leases (including interest
thereon), unless the security deposits are assigned to the Buyer,
F charges under the service contracts assumed by Buyer,
G laundry income;
H any other charges incurred with respect to the Property
which the Partnership or the Contributors are obligated to pay;
H Rents.
(1) All rent payments collected as of the Closing Date for the
month of Closing shall be prorated as between the parties as of
the Closing Date.
(2) All rent collected after Closing, for any period prior to
Closing, shall belong to Contributors and, if paid to Buyer,
Buyer shall promptly send such rent to the Contributors c/o Don
Schefmeyer.
(3) All rent collected by the Contributors or the Partnership,
prior to the Closing, for rental periods subsequent to Closing
shall be paid to Buyer at Closing.
(4) All rent collected by Buyer, the Partnership or the
Contributors for rental periods after the Closing shall belong to
Buyer and, if paid to the Contributors, the Contributors shall
promptly send such rent to Buyer.
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.
5. COSTS. Buyer shall pay all recording fees, Buyer's
attorneys' fees, and all other costs and expenses incidental to
or in connection with closing this transaction customarily
paid for by the purchaser of similar property. The
Contributors shall pay the transfer tax, if any, the costs
of obtaining the Title Commitment (hereinafter defined) and
title policy, attorneys' fees, if any, incurred by them in
connection with this transaction,
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and all other costs and expenses incidental to or in connection
with closing this transaction customarily paid for by the
seller of similar property.
6. EVIDENCE OF TITLE. The Contributors shall furnish to the
Buyer, at Contributor's expense, and within ten (10) days from
the execution hereof, an A.L.T.A. commitment for an owner's
title insurance policy ("Title Commitment") issued by a
nationally recognized title insurer (the "Title Company")
without standard exceptions, including ALTA zoning
endorsement 3.1, contiguous endorsement, and comprehensive
endorsement, in an amount equal to the Aggregate
Contribution Value, naming the Buyer as the insured,
undertaking to insure title in the condition required
hereunder, with a policy pursuant thereto to be issued as
soon after Closing as possible. The cost of the Title
Commitment and policy shall be paid by the Contributors.
The Contributors shall also furnish Buyer, at Contributors'
expense, a UCC search with reference to the Other Items
within 15 days of the date of this Agreement. The
Contributors shall also provide Buyer with a copy of the
most recent instrument survey of the Property.
7. TITLE DOCUMENTS. At the time of Closing, each of the
Contributors shall deliver to Buyer the following:
A. A warranty deed;
B. A Bill of Sale in the form attached hereto as
Exhibit B;
C. A current rent roll ("Rent Roll") certified, as of the
date of Closing, which shall include a correct list of
all tenants, all rental obligations of each tenant with
respect to the Property and all security deposits;
D. An Assignment of leases and security deposits in the form
attached hereto as Exhibit C . In lieu of an assignment of the
security deposits, the Contributors may provide Buyer with a
credit at Closing for all security held by Contributors with
respect to all leases encumbering the Property.
8. INSPECTION. Upon and after acceptance of this Agreement by
the Contributors, the Contributors agree that Buyer and its
authorized representatives shall have the right and
privilege to enter upon the Property and the Partnership'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. The Contributors agree to
cooperate with Buyer by making available to Buyer such
records, plans, drawings or other data as may be in their or
the Partnerships' possession or control relating to the
Property and their operation; provided, however, that Buyer
agrees to indemnify the Contributors and the Partnership 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; TITLE EXAMINATION; OBJECTIONS TO TITLE.
A The Contributors shall convey to Buyer good, marketable
and insurable fee simple title to all of the Property by warranty
deed. Title to all Other Items purchased herein, if
any, shall be conveyed to Buyer by bill of sale with
covenants and warranties of title, free and clear of
all security interests, liens and encumbrances.
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B Buyer shall have ten (10) days from and after its
receipt of the Title Commitment and the UCC search to approve
or object to the condition of title disclosed in the Title
Commitment or UCC search. Buyer's approval of title
shall be a condition precedent to Buyer's obligation to
close the transaction contemplated by this Agreement,
which condition Buyer reserves the right to waive. If
objection to the title is made, Buyer, at its option,
may either terminate this Agreement or give the
Contributors ten (10) days from the date it is notified
in writing of the particular defects claimed, either to
remedy the title, or to terminate this Agreement if
unable to remedy the title or obtain title insurance.
10. CLOSING DATE. Unless this Agreement is terminated as
provided herein, the Closing shall occur within 30
days after the end of the Due Diligence Period (as
hereinafter defined) (the "Closing" or "Closing Date")
at the Contributor's attorney's office, or at the
offices of the Title Company.
11. POSSESSION. Buyer shall have possession and occupancy of
the Property from and after the date of delivery of the deed.
12. BROKER'S COMMISSION. The Contributors and Buyer each
represent to the other that there are no fees or
commissions due as a result of their employment of any
Broker. The Contributors 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.
13. RISK OF LOSS. The risk of loss or damage to all or part of
the Property by fire or other casualty or by taking by eminent
domain, until Closing, shall be assumed by the Contributors
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 Contributors; share of insurance monies,
collectible for such loss or damage, or the award for such
taking by eminent domain.
14. CONDITIONS PRECEDENT.
A It shall be a condition to Buyer's obligation to close
that there are at Closing 310 apartment units in rentable
condition and which are all in compliance with federal,
state, county or local laws, ordinances, rules and
regulations;
B 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 Partnership'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 markets
in which the Property operates, any service or other
contracts relating to the Property, the tax assessment
on the Property and 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 as a result of its findings
during the Due Diligence Period and notifies the
Contributors of such decision within the Due Diligence
Period, this Agreement shall be null and void and
neither party shall have any further rights
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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 14(B).
C It shall also be a condition to Buyer's obligation to
close that during the Due Diligence Period, the Buyer 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 Buyer shall promptly
notify the Contributors in which event 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 the Contributors within the
Due Diligence Period of its failure to obtain Board
approval shall be deemed a waiver by Buyer of the
conditions contained in this Section 14(C).
D It shall be a condition to Buyer's obligation to close
that on or before the Closing Date, all management agreements
relating to the Property shall have been terminated.
E It shall be a condition to Buyer's obligation to close
that on the Closing Date it shall acquire 100% of the fee
interest in the Property.
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 the Contributors. 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.
15. ENVIRONMENTAL CERTIFICATION. By acceptance of this
Agreement, each of the Contributors represents, warrants, and
certifies to Buyer that such Contributor 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 each of the Contributor's knowledge, the
Partnership and such Contributor 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.), or any
other Environmental Law and the regulations promulgated
thereunder applicable on the effective date of this
Agreement.
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From the date of acceptance hereof to and including the date of
Closing, each of the Contributors shall immediately provide
Buyer with a copy of any notice, citation, complaint or
other directive from any person, entity or governmental
authority whereby the Partnership's or such Contributor'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.
16. REPRESENTATIONS AND WARRANTIES OF SELLER. Each of the
Contributors represents and warrants to Buyer as of the date
hereof and as of Closing, that:
A To the best of such Contributor's knowledge after due
inquiry, the Partnership and such Contributor has no liability
or obligation of any nature which in any way affects or is
related to the Property, the Other Items or the
Partnership 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 such Contributor's knowledge, after due
inquiry, there is no litigation, proceeding or investigation
pending, or to the knowledge of such Contributor
threatened, against or affecting the Partnership or
such Contributor 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 Items
or the Partnership or any part or the operation
thereof, whether or not fully covered by insurance.
C To the best of such Contributor's knowledge after due
inquiry, the Contributor and the Partnership has complied with
and is not in default under, or in violation of, or
received any notice that the Contributor, the
Partnership, 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 To the best of such Contributor's knowledge after due
inquiry, there are no written leases affecting the Property with
a term greater than one (1) year.
E To the best of such Contributor'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 Security deposits held by the Partnership or the
Contributors will be correctly
identified as of Closing with respect to the Property.
G To the best of such Contributing Partner's knowledge
after due inquiry, the
financial information previously provided to Buyer with respect
to the Property is substantially accurate.
H This Agreement has been duly authorized, executed and
delivered and constitutes a legal and binding
obligation of such Contributor, enforceable in
accordance with its terms, except as may be limited by
bankruptcy and other laws affecting creditors' rights
generally.
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I 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 the
Partnership or the Contributor 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 the Partnership, the
Contributor or the Property.
J To the best of such Contributor'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 such Contributor, or
in connection with the consummation by such Contributor
of the transactions contemplated by this Agreement.
The representations and warranties of the Contributors
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 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 of the assignment of the deed and shall not
merge therein.
Each of the Contributors acknowledges that each of the
representations made by it in this paragraph 16 and
elsewhere in this Agreement is material to Buyer hereunder.
As to any representation or warranty set forth herein, each
of the Contributor shall indemnify, defend and hold Buyer
safe 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 such Contributor's breach of any
warranty or obligation under this Agreement or if any
representation of such Contributor in this Agreement is
wholly or partially untrue.
Irrespective of anything to the contrary contained herein
the representations and warranties of the Contributor,
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 any Contributor.
17. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents
and warrants to each of the Contributors as of the date hereof and as
of the Closing:
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(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
The representations and warranties of the Buyer
contained in this Agreement, the statements in any Exhibit
or Schedules attached to this Agreement, or other
instruments furnished to Contributors at or prior to Closing
pursuant to this Agreement, or in connection with the
transactions contemplated pursuant to this Agreement, do not
contain any untrue statements or 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 of the assignment of the deed and
shall not merge therein.
The Buyer acknowledges that each of the representations
made by it in this paragraph 17 and elsewhere in this
Agreement is material to the Contributors. As to any
representation or warranty set forth herein, Buyer shall
indemnify, defend and hold the Contributors safe 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 the Contributors,
directly or indirectly, whether foreseen or unforeseen, and
whether for personal injury or death or for property damage
or otherwise by reason of Buyer's breach of any warranty or
obligation under this Agreement or if any representation of
Buyer in this Agreement is wholly or partially untrue.
Irrespective of anything to the contrary contained
herein the representations and warranties of the Buyer,
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 Buyer.
18. ASSIGNMENT. This Agreement, and all or any portion of the
rights of Buyer hereunder, may not be assigned by Buyer
without the prior written consent of the Contributors, which
shall not be unreasonably withheld.
19. 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, or by telecopy with confirmation of receipt to the
addresses set forth below:
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To the Contributors: Don Schefmeyer
c/o Action Management
300 South St. Louis Blvd.
Suite 202
South Bend, IN 46617
Telecopy No: (219) 282-2129
To Buyer: HOME PROPERTIES OF NEW YORK, L.P.
Attn: Norman Leenhouts, Chairman
850 Clinton Square
Rochester, New York 14604
Telecopy No.: (716) 546-5433
20. PLANS. The Contributors agree to provide Buyer with all
plans and architectural drawings in their possession for the
improvements completed at the Properties, including, without
limitation, all "as-built" plans in their possession and the
Contributors further agree that they will endeavor to turn
over the same to Buyer at the Contributor's office or at the
Property during the Due Diligence Period.
21. APPLICABLE LAW. This Agreement shall be construed and
governed in accordance with the laws of the State of Indiana.
22. 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.
23. BINDING AGREEMENT. This Agreement shall not be binding or
effective until properly executed by Buyer and the Contributors.
24. CONFIDENTIALITY. By execution of this Agreement and except
as otherwise provided herein, prior to the Closing each of the
Contributors 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.
25. CONTRIBUTOR COVENANTS.
A. The Contributors will provide, or cause to be
provided, a signed representation letter substantially
in the form attached hereto as Exhibit D. The
Contributors 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
the Securities and Exchange Commission (the
"Commission") and any registration statement, report or
disclosure statement required to be filed with the
Commission.
B. Prior to the Closing Date, the Contributors shall
continue to fulfill all of their obligations under the
terms of the leases encumbering the Property and under
the Service Contracts and the Partnership and the
Contributors shall operate, maintain and repair all
landscaping, buildings, fixtures and facilities in
accordance with normally accepted business principles
and operate the Property
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in a commercially reasonable manner with standards and
procedures of no less quality than those currently in
place.
26. EXISTING FINANCING. There currently exists mortgage
financing with respect to the Property having a current
principal balance of approximately $8.0 million and held by
First Financial Bank, F.S.B. (the "Existing Lender"). If
Buyer elects to assume the Existing Financing, Buyer shall
be responsible for the payment of any assumption fees and
other related costs and an additional closing adjustment
shall be made with respect to all reserves and escrows held
by the Existing Lender with respect to the Existing
Financing if and to the Existing Lender requires those
reserves and escrows remain in place after the assumption by
the Buyer of the Existing Financing. The Contributors
acknowledge that Buyer has made no representation that it
intends to assume the Existing Financing.
27. TAX DEFERRED EXCHANGE. The Contributors have advised Buyer
that one or both of them may seek to effect a tax deferred
exchange pursuant to Section 1031 of the Internal Revenue
Code in connection with the conveyance of the Property (or
any portion thereof). If either or both of the Contributors
are able to negotiate terms acceptable to them for the
transfer or acquisition of an exchange property or
properties, then Buyer agrees to accommodate the
Contributors in seeking to effect a tax deferred exchange
for that property or properties. Buyer agrees to cooperate
with the Contributors with respect to such exchange and
agrees to execute all documentation required to effectuate
such exchange, provided: (a) Buyer makes no warranty
whatsoever with respect to the qualification of the
transaction for tax deferred exchange treatment under
Section 1031; (b) Buyer shall have no responsibility,
obligation or liability with respect to the tax consequences
to Seller; and (c) Buyer's expenses with respect to the
conveyance of the Property shall be limited to the expenses
as set forth in this Agreement and Buyer shall have no
additional expense as a result of such an exchange. The
covenants and obligations contained in this Section shall
survive the Closing.
28. COVENANTS.
(a) The Buyer hereby covenants to the Contributors as follows:
(i) For a period of five (5) years from and after the
Closing Date, the Buyer shall allocate to each of the
Contributors, from time to time, for Federal income tax
purposes, pursuant to Section 752 of the Internal
Revenue Code of 1986, as amended, nonrecourse debt of
the Buyer in an aggregate amount not less than the
Negative Basis of the respective Contributor in the
Property. "Negative Basis" shall mean and refer to the
deficit cost basis of each of the Contributors in the
Property at the Closing Date.
(ii) For a period of five (5) years from and after the
Closing Date, the Buyer shall not sell, exchange,
transfer or otherwise dispose of the Property unless
such transaction occurs in a manner as to be tax free
to the Contributors.
(b) The Contributors hereby covenant as follows:
Within thirty (30) days of the Closing Date, each
of the Contributors shall provide the Buyer with a
schedule showing: (i) each of the Contributor's share
of the principal balance of the Existing Loan as of the
Closing Date, which allocation will be consistent with
the allocation set forth on Schedule 1 attached hereto;
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and (ii) the net book value of the Property and Other
Items as of the Closing Date The information on the
schedule shall be calculated in a manner consistent
with the calculations made and to be made for Federal
income tax purposes.
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/ Amy L. Tait
------------------------------------
Amy L. Tait
Title: Executive Vice President
CONTRIBUTORS:
/s/ Don Schefmeyer
------------------------------------
Don Schefmeyer
/s/ Stephen Hall
------------------------------------
Stephen Hall
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AMENDMENT NO. ONE
TO
CONTRIBUTION AGREEMENT
This Amendment No. One is dated the 3rd day of December, 1997 and
amends the Contribution Agreement, dated November 7, 1997 by and
between Home Properties of new York, L.P. (the "Buyer") and Don
Schefmeyer and Stephen Hall (the "Contributors").
All capitalized terms used herein and not defined shall have the
meaning given them in the Contribution Agreement.
The Contribution Agreement is hereby amended as follows:
1. Section 3.A of the Contribution Agreement shall be amended
to provide that the Aggregate Contribution Value shall be a total
of Thirteen Million Three Hundred Fifty Thousand and no/100
($13,350,000).
2. Section 3.B. of the Contribution Agreement shall be amended
to provide that the Market Value of a Unit shall not exceed
$27.25 per Unit regardless of the 20 day average closing price.
3. Section 5 of the Agreement shall be amended to provide that,
in addition to the other costs that Buyer is obligated to pay,
Buyer shall pay up to $136,500 toward the prepayment penalty with
respect to the Existing Financing. The Contributors shall pay
any portion of the prepayment penalty in excess of $136,500.
4. Section 6 of the Contribution Agreement shall be deleted in
its entirety and the following shall be substituted in its place:
"6. Evidence of Title. The Buyer acknowledges that the
Contributors have provided a title commitment issued by
Chicago Title Insurance Company (No. 00139068) (the "Title
Commitment"). Within fifteen days of the date of Amendment
No. One to the Contribution Agreement, the Contributors shall
provide the Buyer with a UCC search conducted in the State of
Indiana as against the Partnership and the Contributors. The
cost of the Title Commitment, title policy and UCC searches
shall be paid by the Contributors."
5. Section 9.B. of the Contribution Agreement shall be deleted
in its entirety and the following shall be substituted in its
place:
"Attached hereto as Exhibit B is a list of Buyer's comments
and questions with respect to the Title Commitment. It shall
be a condition to Buyer's obligation to close that the
Contributors shall have resolved the matters set forth on
Exhibit B to the Buyer's reasonable satisfaction at or prior
to Closing. In addition, if the UCC searches provided
pursuant to Section 6 of this Agreement reveal any
encumbrances on the Property or the Other Items, it shall be a
condition to Buyer's obligation to close that the Contributors
shall have caused those encumbrances to be removed at or prior
to Closing."
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6. Section 10 shall be amended to provide that the Closing
shall occur on or before January 6, 1998. Notwithstanding the
above, if the holder of the Existing Financing is unwilling to
permit the transfer of the Property to the Buyer without the
payment of an assumption fee and without the imposition of a
default rate of interest, then the Buyer shall have the right to
extend the Closing Date to no later than January 31, 1998 in
order to be able to place substitute financing on the Property.
7. Section 14.B. shall be deleted in its entirety and the
following shall be substituted in its place:
"B. It shall be a condition to Buyer's obligation to close
that the Contributors shall have caused to be constructed on
the Property a lift station that shall be sufficient to
adequately drain surface water from the parking areas located
on the Property."
8. Section 14.C. shall be deleted in its entirety.
The parties acknowledge and agree that the covenants contained in
Section 28 of the Contribution Agreement shall only apply if and
to the extent that the Contributors elect to receive their
portion of the Net Contribution Value in Units.
As amended hereby, the Contribution Agreement shall remain in
full force and effect.
HOME PROPERTIES OF NEW YORK, L.P.
By: Home Properties of New York, Inc.
By: /s/ Ann M. McCormick
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Ann M. McCormick
Title: Vice President
/s/ Don Schefmeyer
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Don Schefmeyer
/s/ Stephen W. Hall
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Stephen Hall
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