Exhibit 2.11
REAL ESTATE PURCHASE AGREEMENT
by and between
SMITH PROPERTY HOLDINGS ORLEANS L.L.C.,
OWNER
and
HOME PROPERTIES OF NEW YORK, L.P.,
a New York limited partnership,
BUYER
August 9, 2000
ORLEANS APARTMENTS,
FAIRFAX COUNTY, VIRGINIA
<PAGE>
THIS REAL ESTATE PURCHASE AGREEMENT (this "AGREEMENT"), dated as of August
9, 2000 (the "EXECUTION DATE"), by HOME PROPERTIES OF NEW YORK, L.P., a New
York limited partnership ("BUYER") and SMITH PROPERTY HOLDINGS ORLEANS,
L.L.C. ("OWNER").
WHEREAS, Buyer and Owner desire to enter into an agreement providing for
the sale by Owner to Buyer of certain property described below on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth below, Buyer and Owner agree as follows:
1. ACQUISITION OF PROPERTY BY BUYER.
Subject to the terms and conditions in this Agreement, Owner will sell and
Buyer will buy the Property defined below.
1.1 REAL PROPERTY
The apartment project known as "Orleans Apartments", located in Fairfax
County, Virginia (the "IMPROVEMENTS"), on land (the "LAND") more
particularly described on EXHIBIT A, including all right, title and
interest of Owner in and to all the tenements, hereditaments, improvements,
appurtenances, rights, easements and rights of way incident thereto. The
Land and Improvements are together referred to as the "REAL PROPERTY".
1.2 PERSONAL PROPERTY.
All furniture, fixtures, furnishings, machinery, equipment and other
tangible personal property that is owned by Owner, located on the Real
Property, and used primarily in connection with the ownership, operation
and/or maintenance of the Real Property, excluding property owned by the
management company, venders and tenants, but including the tangible
personal property listed in the inventory to be delivered to Buyer pursuant
to the terms of this Agreement (together, the "PERSONAL PROPERTY"), and
subject to the provisions of this Agreement including provisions regarding
closing prorations, the following intangible property (the "INTANGIBLE
PROPERTY"): (i) all Tenant Leases, and all Service Contracts and Equipment
Leases to be assumed by Buyer in accordance with this Agreement to be
entered into prior to the Closing Date, (ii) all security deposits with
respect to all tenants having leases or possession at Closing, and any
interest accrued thereon to the extent the interest is required by law or
by the terms of the Tenant Leases to paid to the tenants, (iii) all
transferable permits, licenses, authorizations and approvals related to the
operation of the Property (the "PERMITS"), (iv) all right, title and
interest of Owner in all books and operating records (including copies of
all electronically-stored data but excluding (A) software, (B) any
documents regarding the physical or environmental condition of the Property
by the Owner or any affiliate of Owner, and (C) Owner partnership records),
trade names (including Owner's rights, if any, to any the trade name used
by the Owner exclusively in connection with the Property) and development
rights related to the Real Property or any part thereof, and (v) all
transferable warranties and guaranties of any portion of the Improvements
and Personal Property (the "WARRANTIES"). The Real Property, the Personal
Property and the Intangible Property are collectively referred to below as
the "PROPERTY."
2. CONSIDERATION.
2.1 PURCHASE PRICE.
In exchange for the conveyance of the Property to Buyer, Buyer shall pay
Owner the sum of $67,000,000 (the "PURCHASE PRICE") in immediately
available funds on the Closing Date.
2.2 DEPOSIT.
On the Execution Date, Buyer shall deposit $1,000,000 (this deposit, any
additional deposit and any interest on the deposit(s) are referred to as
the "DEPOSIT") with Walker Title & Escrow Company, Inc. ("ESCROW AGENT"),
as escrow agent, to be held in an interest bearing account, in accordance
with this Agreement and any additional customary escrow agreement
reasonably requested by the Escrow Agent from Buyer and Owner, which
Deposit shall be increased by an additional $2,000,000, for a total
aggregate principal Deposit of $3,000,000 no later than the date of
expiration of the Study Period (as defined herein). The Deposit shall be
in the form of cash or an irrevocable "clean sight" letter of credit
expiring after January 31, 2001, from a financial institution and in form
and substance reasonably satisfactory to the Owner, but the Escrow Agent is
hereby irrevocably authorized to convert any letter of credit to cash in
the event that such letter of credit is ever within 14 days of expiration
without the Buyer modifying such letter of credit or replacing such letter
of credit with an expiration date of not less than 30 days from the date of
delivery of such modification or letter of credit.
3. GENERAL REPRESENTATIONS BY OWNER.
3.1 NO IMPLIED REPRESENTATIONS.
Except for the representations, warranties, and covenants of Owner
specifically set forth in (i) this Agreement or (ii) in any closing
document executed by Owner pursuant to this Agreement and delivered to
Buyer at Closing (the "EXPRESS WARRANTIES"), the sale of the Property is
and will be made on an "as is" basis, without representations and
warranties of any kind. Without limiting the generality of this
disclaimer, apart from the Express Warranties, Owner makes no
representation or warranty, implied or otherwise, including, but not
limited to, any representation or warranty concerning title to the
Property, the physical condition of the Property (including, but not
limited to, the condition of the soil or the Improvements), the
environmental condition of the Property (including, but not limited to, the
presence or absence of hazardous substances on or respecting the Property),
the compliance of the Property with applicable laws and regulations
(including, but not limited to, zoning and building codes or the status of
development or use rights respecting the Property), the financial condition
of the Property or any other implied representation or warranty respecting
any income, expenses, charges, liens or encumbrances, rights or claims on,
affecting or pertaining to the Property or any part thereof. Buyer
acknowledges that, during the Study Period, Buyer will examine, review and
inspect all matters which in Buyer's judgment bear upon the Property and
its value and suitability for Buyer's purposes. Buyer acknowledges that
Buyer, through its principals, is a sophisticated buyer, experienced in
purchasing properties similar to the Property and, except as to matters
addressed by Express Warranties, Buyer will acquire the Property solely on
the basis of its own physical, financial and other examinations, reviews
and inspections and the title insurance protection afforded by the Title
Policy as hereinafter defined. Subject to the foregoing, to induce Buyer
to enter into this Agreement and to consummate the transactions
contemplated herein Owner makes the following Express Warranties.
3.2 STATUS AND AUTHORITY.
Owner is an entity duly organized and validly existing under the laws of
the state of its purported formation, and has the full power and authority
to enter into and carry out the terms of this Agreement. Subject to
approval by the Board of Directors or executive committee thereof, as
applicable, of the corporate member of the Owner, the execution, delivery
and performance by Owner of this Agreement and the performance hereof by
Owner have been duly and validly authorized and approved by all requisite
actions of Owner. Owner shall (a) not be obligated to seek such Board or
executive committee approval until expiration of the Study Period (as
defined herein below) and (b) have the right to terminate this Agreement if
such Board or executive committee approval is not obtained by September 14,
2000, by giving written notice to Buyer on the next business day, in which
case the Deposit shall be returned to Buyer.
3.3 BINDING OBLIGATION.
This Agreement constitutes, and all other agreements, documents and
instruments to be executed by Owner pursuant hereto, when duly executed and
delivered by Owner, will each constitute, valid and binding obligations of
Owner.
3.4 NO CONFLICTS.
Neither the execution, delivery or performance by Owner of this Agreement,
the fulfillment of and compliance with the respective terms and provisions
hereof by Owner, nor the consummation of the transactions contemplated
hereby by Owner, will: (i) conflict with, or result in a breach of, any of
the terms, conditions or provisions of, or constitute a default under, or
give rise to any right of termination, acceleration, or cancellation under,
any agreement or other instrument or other obligation to which Owner is a
party or is subject, or to which the Property or any part thereof are
subject; (ii) to Owner's knowledge, constitute a violation of any code,
resolution, law, statute, regulation, ordinance, rule, judgment, decree,
determination, writ or order ("LEGAL REQUIREMENT") applicable to Owner or
the Property; (iii) require the consent of any court, any third party or
entity; or (iv) violate the terms of Owner's organizational documents.
3.5 TITLE TO REAL PROPERTY.
(a) "ENCUMBRANCES" means any liens, mortgages, deeds of trust, security
interests, encroachments, reservations, judgments, rights of way,
easements, covenants, leases, subleases, or other encumbrances against the
Real Property.
(b) Owner has no knowledge of any Encumbrances other than those
Encumbrances as may be disclosed by the Title Commitment or that are
matters of public record.
3.6 TITLE TO PERSONAL PROPERTY.
Owner is the owner of the Personal Property that is listed in an inventory
which Owner will deliver prior to the expiration of the Study Period to
Buyer, free and clear of all liens or encumbrances other than the Permitted
Encumbrances. The inventory shall also list any and all equipment leases
pursuant to which Owner holds any Personal Property (collectively, the
"EQUIPMENT LEASES"), including, without limitation, any laundry lease.
Accurate copies of all Equipment Leases shall be delivered to Buyer prior
to the expiration of the Study Period. Buyer will accept an assignment and
assume all Equipment Leases on such list, and indemnify Owner for all
claims under the Equipment Leases accruing after closing.
3.7 SERVICE CONTRACTS.
Owner has delivered to Buyer an accurate list and copy of each service
contract or similar agreement that Owner desires Buyer to assume affecting
the operation of the Property (the "SERVICE CONTRACTS"), including, without
limitation, any laundry lease. Buyer will accept an assignment and assume
all Service Contracts on such list, and indemnify Owner for all claims
under the Service Contracts accruing after closing.
3.8 SURVEYS.
Buyer acknowledges that Owner has deliver to Buyer a copy of the most
recent owners or lenders title insurance policy, and the most
recent survey of the Real Property, in the possession of Owner.
3.9 LEGAL COMPLIANCE.
To Owner's knowledge, Owner has received no written notice from a
local or federal authority having jurisdiction over the Property of
a material legal violation at the Property within the last year that
has not been cured.
3.10 NO MECHANICS' LIENS.
At or prior to the Closing, Owner shall pay in full, or otherwise make
appropriate provision for payment for all work done at, and materials
supplied to, the Property by or on behalf of Owner, including without
limitation any work in progress on the date hereof, and any labor performed
or material furnished through Closing by or on behalf of Owner, or Owner
shall otherwise cause the Title Company to issue the
Title Policy without exception for, or insuring over,*filed and unfiled
mechanics or materialman liens.
3.11 No Condemnation Proceedings.
There are no condemnation or eminent domain proceedings currently pending
against the Real Property or any part threreof.
3.12 Tenant Leases.
Owner shall deliver a rent roll (the Rent Roll") for the Property to
Buyer in Owner's customary form, containing a listing, which Owner
warrants will be materially accurate, to Owner's knowledge, in all material
respects as of the date shown on the Rent Roll, of all leases, tenancies,
licenses and other rights of occupancy or use for any portion of the
Property in effect on the date of this Agreement, including the lease of
the laundry spaces to a laundry service company (collectively, the "Tenant
Leases"). Owner shall either deliver to Buyer or otherwise make available
for Buyer's review at the Property the Owner's lease files. Owner has no
knowledge of any leasing or other commissions or fees due or to become due
in connection with the operation of the Real Property other than leasing
commissions or fees that will be paid in full by Owner on or before the
Closing Date. Buyer will accept an assignment and assume all Tenant Leases
on such list, and indemnify Owner for all claims under the Tenant Leases
accruing after closing.
3.13 Insurance.
Until Closing, Owner will maintain its existing insurance with respect to
the Property.
3.14 Litigation.
Except as may be disclosed on a list to be delivered by Buyer prior to the
expiration of the Study Period, there are no material actions, suits,
claims, arbitrations, proceedings, orders, judgments or investigations
pending or, to Owner's knowledge, threatened against Owner that question
the validity of this Agreement at law or in equity, or before or by any
federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality.
3.15 Taxes.
Buyer acknowledges that Owner has delivered to Buyer copies of the most
recent real estate tax bills for the Property.
3.16 Hazardous Materials.
(a) For the purposes of this Agreement, "Hazardous Materials" means any of
the following on, under, from or affecting the Property or any soil, water,
vegetation, buildings, personal property, persons or animals located
thereon or any neighboring areas (other than any such items introduced to
the Property following the Closing Date): asbestos-containing materials,
polychlorinated biphenyls (PCBs), flammable materials, explosives,
radioactive materials, petroleum products, and any materials, wastes,
substances, or chemicals that are deemed hazardous, toxic, a pollutant or a
contaminant under the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et seq.),
the Hazardous Materials Transportation Act as amended (49 U.S.C.
Section 1801, et seq.), the Resource Conservation and Recovery Act of 1976,
as amended (42 U.S.C. Section 6901, et seq.), in the regulations adopted or
publications promulgated pursuant thereto, or in any other applicable
federal, state or local laws, ordinances, rules or regulations in effect on
the Closing Date relating to protection of public health, safety or the
environment; provided, however, that the term "Hazardous Materials" shall
not include (i) fuel or heating oil, (ii) motor oil and gasoline contained
in vehicles not used primarily for the transport of motor oil or gasoline,
or (iii) cleaning and painting supplies and other materials that are or
have been used in the ordinary course of operating and maintaining the
Property. Buyer hereby expressly waives any claim or right of recovery or
contribution under the Agreement or under any environmental law including
without limitation the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et seq.),
the Hazardous Materials Transportation Act as amended (49 U.S.C.
Section 1801, et seq.), the Resource Conservation and Recovery Act of 1976,
as amended (42 U.S.C. Section 6901, et seq.) (the "Environmental Laws"),
arising out of the presence of Hazardous Materials at, on, under, or in the
Property.
(b) Owner has not received written notice in the year prior to the date
hereof from any governmental agency of a material violation of an
Environmental Law at the Property, unless disclosed in an environmental
report delivered to the Buyer prior to the expiration of the Study Period.
The Buyer acknowledges that the Property contains lead paint, asbestos and
two underground storage tanks, at least one of which has leaked in the
past.
3.17 Knowledge.
The term "knowledge" as to Owner shall mean the actual knowledge, at time
that the applicable representation or warranty is made, of Ernest Gerardi,
Jr., the President of the corporate general partner of Owner's parent
partnership, Gregory Weingast, Vice President thereof, and Louis Kovalsky,
a Vice President thereof responsible for a group of properties that
includes the Property, without inquiry or investigation except inquiry of
the on-site manager of the Property, and does not include constructive or
imputed knowledge.
3.18 Survival.
Owner's representations and warranties in this Section 3 shall not be
merged into the Deed or otherwise impaired by the Closing, and shall
survive Closing for a period of 30 days, at which time any claim or cause
of action of which Owner has not been given written notice by Buyer citing
this Section shall terminate. To the extent the Buyer has knowledge prior
to Closing of an inaccuracy in a representation or warranty by Owner, then
Buyer shall, by Closing, be deemed to have waived such inaccuracy.
4. Representations, Warranties and Covenants of Buyer.
To induce Owner to enter into this Agreement and to consummate the
transactions contemplated hereby, Buyer makes the following
representations, warranties and covenants:
4.1 Status and Authority.
Buyer is an entity duly organized, validly existing and in good standing
under the laws of the state of its purported formation and is duly
qualified and authorized to transact the business that it presently
conducts. Buyer has the full power and authority to carry on its business
as it is now being conducted to enter into and carry out the terms of this
Agreement. The execution, delivery and performance by Buyer of this
Agreement, the fulfillment of and the compliance with the respective terms
and provisions hereof by Buyer, and the due consummation of the
transactions contemplated hereby by Buyer have been duly and validly
authorized and approved by all requisite corporate actions of Buyer.
4.2 Binding Obligation.
This Agreement constitutes, and all other agreements, documents and
instruments to be executed by Buyer pursuant hereto, when duly executed and
delivered by Buyer, will each constitute, valid and binding obligations of
Buyer.
4.3 No Conflicts.
Neither the execution, delivery or performance by Buyer of this Agreement
or any other agreement contemplated hereby, the fulfillment of and
compliance with the respective terms and provisions hereof or thereof by
Buyer, nor the consummation of the transactions contemplated hereby or
thereby by Buyer, will: (i) conflict with, or result in a breach of, any of
the terms, conditions or provisions of, or constitute a default under, or
give rise to any right of termination, acceleration, or cancellation under,
any material agreement or other material instrument or other material
obligation to which Buyer is a party or is subject; (ii) to the knowledge
of Buyer, constitute a violation of any code, law, statute, regulation,
ordinance, rule, judgment, decree, writ or order applicable to Buyer; or
(iii) require the consent of any court, any governmental authority or any
third person or entity; or (iv) violate the terms of Buyer's organizational
documents.
Disclosure.
Owner previously delivered to Buyer (or to the extent not previously
delivered, Owner will deliver within three (3) business days of the date
hereof) a copy of (a) Owner's title policy and the survey prepared for
Owner when it acquired the Property, and (b) any environmental appraisals
or engineering reports, if any, that were to Owner's knowledge prepared for
Owner by parties unrelated to Owner and its management company ("Third-
Party Reports"), provided (i) that such delivery will not be made if barred
by confidentiality agreement or similar restriction, (ii) that Owner makes
no representation or warranty as to the accuracy or completeness of any
Third Party Report, and (iii) that Buyer will use any Third Party Reports
delivered to it for its information and convenience but will not have any
right or claim against the preparer. Buyer may also at any time on or
after the Execution Date inspect and make copies of Owner's files located
at the Property related to operation and maintenance of the Property (but
not off the Property, and Owner has no responsibility to determine whether
the files at the Property are sufficient) as well as any information
required to be delivered at Closing. Buyer represents and warrants that,
except with respect to Express Warranties, it is not relying on Owner (or
any party preparing any Third-Party Reports or environmental reports for
Owner and not for Buyer) or any information furnished by Owner with respect
to environmental matters, structural or mechanical matters, or what
improvements and/or repairs may be necessary at the Property.
Notwithstanding any other provision of this Agreement, Buyer agrees that,
except as may be expressly required in this Agreement, for example
furnishing copies of Third Party Reports, Owner will not supply to Buyer
any information, recommendation or advice with respect to the physical
condition of the Property and/or any repairs or improvements thereto, and
Buyer will not rely on any such information, recommendation or advice if
any is or was provided. In particular, Buyer acknowledges that Owner will
not provide any engineering or environmental reports or data prepared by
Owner or any of its affiliates, predecessors, or related entities.
4.5 Survival.
Buyer's representations and warranties in this Section 4 shall not be
impaired by the Closing but shall survive for a period of 30 days, at which
time any claim or cause of action of which Buyer has not been given written
notice by Owner citing this Section shall terminate. To the extent the
Owner has knowledge prior to Closing of an inaccuracy in a representation
or warranty by Buyer, then Owner shall, by Closing, be deemed to have
waived such inaccuracy.
5. Obligations Pending Closing.
Between the date hereof and the Closing, Owner covenants and agrees to
perform each of the obligations and comply with each of the requirements
described below.
Title Insurance
Following the Execution Date and during the Study Period, Buyer shall
obtain from Walker Title & Escrow Company, Inc. (the "Title Company") a
commitment (the "Title Commitment") showing all matters affecting title to
the Real Property, together with copies of the instruments referred to
therein, and binding the Title Company to issue at Closing an owners'
policy of title insurance for the Real Property (the "Title Policy").
Owner hereby agrees to furnish the Title Company with such affidavits as
may be reasonably required by the Title Company (and reasonably acceptable
to Owner) in order to issue the Title Policy at the Closing with protection
against (or without exception for) both filed and unfiled mechanics' and
materialmen's liens, violations by Owner of Permitted Encumbrances, and
rights of parties in possession other than under Tenant Leases. Such
requirements by the Title Company shall not expand Owner's obligation to
deliver title to the Property in the condition required by this Agreement.
Following the Execution Date and during the Study Period, Buyer shall have
the right to obtain a current, as-built survey of the Real Property (the
"Survey"). At least seven business days prior to the end of the Study
Period, Buyer shall notify Owner in writing specifying any objections that
Buyer may have to any matter that would be a Permitted Encumbrance. Owner
shall notify Buyer in writing at least three business day prior to the end
of the Study Period whether Owner is willing in its sole discretion to
remove any such matter to which Buyer objected. If Owner agrees in writing
to remove the matter to which Buyer objected, it shall not be a Permitted
Encumbrance. If Owner does not so agree, and Buyer does not terminate this
Agreement during the Study Period, the matter shall be a Permitted
Encumbrance. All Encumbrances that are shown on the Title Commitment, all
Tenant Leases, all matters recorded in the land records on the Effective
Date, and all matters that would be disclosed by an accurate survey of the
Property, are collectively referred to as the "Permitted Encumbrances";
provided that the Permitted Encumbrances shall not include (i) any matter
to which Buyer objected in writing and which Owner agrees as described
above in writing during the Study Period to remove, (ii) any mortgage, deed
of trust, mechanic's or materialman's *lien, or other lien created by Owner,
or (iii) any matter that Owner *creates after the Effective Date in
violation of this Agreement.
5.2 Certificates of Governmental Authorities.
Owner shall cooperate with Buyer in the transfer or issuance of any and
all Permits necessary to permit the lawful, uninterrupted operation of
the Property by Buyer following the Closing. Buyer shall pay any
applicable municipal, county, or state fee or cost for such transfer or
issuance.
5.3 Maintenance and Operation of Property.
Owner shall cause the Property to be maintained in its present order and
condition, normal wear and tear excepted, subject to destruction by
casualty or other events beyond the control of Owner (with respect to
condemnation and casualty, Owner's obligations are governed by Sections 7.8
and 7.9) and provided that Owner shall not, in order to keep the Property
in its present order and condition, be obligated incur any extraordinary
capital items. To the extent an extraordinary capital item is required,
Owner shall proceed with the item if Buyer agrees to pay at Closing the
share of the excess allocable to periods post-Closing, based on the number
of months in the useful life of the item as determined by Owner and
approved by Buyer in its reasonable discretion. If Buyer does not agree to
pay such share where Owner reasonably deems that Owner must proceed with
the item (for example, if the item is necessary for continued operation of
the Property), then Owner may terminate this Agreement and Buyer shall
receive the Deposit. Owner shall cause the continuation of the normal
operation of the Property, including, without limitation, the purchase and
replacement of supplies and equipment, leasing and marketing to residential
tenants in the ordinary course of business, the maintenance of its
beneficial relations with suppliers and others having business dealings
with Owner, and the continuation of Owner's past practice with respect to
maintenance and repairs, so that, except for normal wear and tear that
remains uncorrected in the ordinary course of business, the Property shall
be in substantially the same condition on the Closing Date as on the
Execution Date. Owner shall not knowingly commit any default under any
Tenant Lease, Service Contract, Equipment Lease, Permit or other agreement
that Buyer will assume and Owner shall pursue, to the extent of good
business practices, remedies available to Owner on account of any default
thereunder by any other party.
5.4 Modification to Warranties, Equipment Leases and Service Contracts.
Owner shall not materially modify or terminate (except for default by
vendor) any of the Warranties, Equipment Leases or Service Contracts that
would bind Buyer after closing, without the prior written consent of Buyer
in each instance (which consent shall not be unreasonably withheld,
conditioned or delayed). Unless, within ten (10) days after receipt by
Buyer of written notice, mentioning this Section, of such a proposed
modification or termination (such notice to include a copy of all proposed
documentation relating thereto), Buyer shall notify Owner in writing of a
reasonable objection thereto, Buyer shall be deemed to have consented
thereto. Buyer shall assume all Service Contracts on the list delivered to
Buyer as provided in Section 3.7.
5.5 Leasing.
Without the prior written consent of Buyer in each instance: (i) except for
renewals permitted below, none of the Tenant Leases will be modified or
amended, or terminated except in the ordinary course of business or in the
event of a material breach by the tenant thereunder; (ii) none of the
Tenant Leases will be renewed or extended for a term other than as a hold-
over tenant at will or for one (1) year or less, and then only for rent and
other charges not less than the rate charged by Owner for similar units,
except for legal limits and concessions that Owner deems necessary in
light of market conditions; and (iii) no new lease of any portion of the
Property will be made for more than one (1) year and then only for rent and
other charges not less than those payable under leases for a comparable
apartment as shown on the Rent Roll (subject to legal limitations and
subject to the foregoing exception for concessions).
5.6 Encumbrances.
Owner shall not grant or permit any new liens, mortgages, deeds of trust,
security interests, encroachments, rights of way, reservations, easements,
or covenants on or about the Property, or amend any of the same as now
exist, without prior written consent of Buyer, except utility and other
development easements regarding the adjacent Ryland Homes development, upon
the Buyer's consent thereto, which consent shall not be unreasonably
withheld, conditioned nor delayed.
5.7 Other Agreements.
Without the prior written consent of Buyer in each instance, or as may be
expressly authorized under other sections of this Agreement, or as may be
required by law or by the instrument itself if Buyer has agreed the
instrument may survive Closing, Owner shall not enter into, modify, renew
or terminate any material agreement or other instrument relating to the
Property or the operations thereof that will survive Closing.
5.8 Deliveries.
To the extent Section 3 above requires the delivery of lists or documents
to Buyer, or requires information or documentation to be made available to
Buyer, all such lists or documents shall be delivered, and all such
information shall be made available, prior to the expiration of the Study
Period.
6. Conditions Precedent to Closing.
Notwithstanding any other provision of this Agreement, Buyer's obligations
are conditioned upon the satisfaction of the conditions set forth in
Sections 6.1(a), 6.2 and 6.3 and the obligations of Owner are conditioned
upon the satisfaction of Sections 6.1(b) and 6.2.
6.1 Accuracy of Representations and Warranties.
(a) All of the representations and warranties made by Owner in this
Agreement (including the attached Exhibits) or in any related document
delivered by Owner pursuant to this Agreement shall be true, accurate and
complete in every material respect as of the Closing Date.
(b) All representations and warranties made by Buyer in this Agreement
shall be true, accurate and complete in every material respect as of the
Closing Date. Buyer shall have made the Deposit when required by this
Agreement.
6.2 Performance by the Other Party
All actions required to have been taken by the other party shall have been
completed and the other party shall have complied with each of the material
requirements imposed upon it by this Agreement.
6.3 Clear Title.
Owner shall be prepared to deliver title to the Property subject only to
the Permitted Encumbrances.
6.4 Failure of Condition.
In the event of the failure of any condition precedent set forth above to
Buyer's obligations, Buyer, at its sole election, may (a) terminate this
Agreement (and receive a return of the Deposit) and (b) waive the condition
and proceed to the Closing. If a failure of condition to Owner's
obligations constitutes Buyer's breach of this Agreement, Owner may avail
itself of its remedies as provided in Section 10.1. Where either party
exercises its right provided above to require the other party to remedy a
failure of condition, the remedying party shall not be required to incur
any material obligation or liability in excess of those imposed by this
Agreement.
7. Closing.
7.1 Date and Time.
The delivery of the Deed and Purchase Price (the "Closing") shall take
place on the date ("Closing Date") chosen by Owner upon 5 days notice to
Buyer prior to December 31, 2000, time being of the essence as to the
Closing Date selected by Owner so as to allow Owner to consummate a 1031
tax free exchange of real estate. The Closing shall take place at the
offices of Charles E. Smith Residential Realty L.P., 2345 Crystal Drive,
10th Floor, Arlington, Virginia 22202, or at such other place as may be
agreed by Owner and Buyer. The delivery of the Deed and the payment of the
Purchase Price may be accomplished through appropriate escrow arrangements
among Owner, Buyer and the Title Company, the form of which shall be
reasonably acceptable to the parties in order to carry out this Agreement.
7.2 Deliveries by Owner.
Owner shall deliver, or cause to be delivered, to Buyer at the Closing the
following documents:
(a) An executed Special Warranty Deed to the Property dated the Closing
Date in a form agreed upon during the Study Period (the "Deed").
(b) An executed blanket bill of sale, assignment and assumption dated the
Closing Date in a form agreed upon during the Study Period, in mutually
agreed form, providing for Owner's transfer to Buyer of the Personal
Property and Intangible Property, and the Owner's assignment of, and
Buyer's assumption of all Tenant Leases, Service Contracts and Equipment
Leases.
(c) The originals of all the Tenant Leases and all tenant files.
(d) The originals of all Equipment Leases, Service Contracts and Permits,
to the extent they are in effect and available to Owner.
(e) All books and records pertaining to the operation of the Property, but
not Engineering Reports or internal partnership or financial records of
Owner.
(f) An affidavit in form reasonably satisfactory to Owner and the Title
Company, stating that all bills have been paid or otherwise provided for
with respect to any improvements to the Real Property, together with such
other customary affidavits, indemnities and closing documents as may be
reasonably required by Buyer's Title Company without expanding Owner's
obligation to deliver title in the condition required by this Agreement.
(g) All plans and specifications and mechanical drawings for the
Improvements in Owner's possession or control.
(h) The originals or accurate copies of any Service Contracts and (except
to the extent provided elsewhere in this Agreement) all books and records
pertaining to the operation and management of the Property.
(i) A statement of Owner in mutually agreed form that Owner is not a
"foreign person" and containing such information as shall be required by
Internal Revenue Code Section 1445 and the regulations issued thereunder.
(j) Possession and occupancy of the Property (together with all keys,
including, without limitation, keys for all security systems and offices),
in accordance with this Agreement, subject only to the Permitted
Encumbrances.
(k) A Rent Roll, updated and re-certified by Owner as accurate to Owner's
knowledge in all material respects through the close of business on the day
prior to Closing.
(l) Notices ("Transfer Notices") to tenants, and service providers executed
by Owner and informing such tenants, and service providers of the
conveyance to Buyer of the Property and containing such other information
as Buyer reasonably requests.
(m) Evidence of the due organization of Owner and the due authorization and
execution of this Agreement and the documents to be delivered by Owner
hereunder, together with such other documents as Buyer or the Title Company
may reasonably request as necessary to complete the conveyance of the
Property to Buyer (provided such other documents do not impose liabilities
or obligations not called for by this Agreement).
(n) The post-closing consulting agreement in the form attached hereto as
Exhibit B.
7.3 Deliveries by Buyer.
Buyer shall deliver to Owner at the Closing the following items:
(a) The Purchase Price required under Section 2 above.
(b) Transfer Notices executed by Buyer.
(c) Evidence of the due organization of Buyer and the due authorization and
execution of this Agreement and the documents to be delivered by Buyer
hereunder, together with such other documents as Owner or the Title Company
may reasonably request as necessary to effectuate the transactions
contemplated herein (provided such other documents do not impose additional
liabilities or obligations not otherwise contemplated herein).
(d) The post-closing consulting agreement in the form attached hereto as
Exhibit B.
7.4 Closing Costs.
Each party shall pay its own attorneys and other advisors. Examination of
title, title insurance, survey, preparation of conveyance documents for the
Real Property and grantee's recording tax shall be the sole cost of Buyer.
Owner shall pay the cost to satisfy any deeds of trust, mortgages,
judgments, or other monetary liens on the Property that were created by
Owner or that Owner agreed in writing during the Study Period to cure prior
to Closing and the grantor's recording tax with respect to the Deed.
7.5 Brokers' Commissions.
Each party represents and warrants to the other that it has not involved
any brokers in this transaction. Each party will indemnify the other for
damages resulting from a breach by the indemnifying party of this
representation and warranty. The indemnity contained herein shall survive
the Closing or earlier termination of this Agreement.
7.6 Payment of Taxes.
All assessments, taxes and other similar charges (general and special,
ordinary and extraordinary) for which a bill has been issued on or before
the Closing Date, whether or not the same are then past due or are payable
thereafter (in installments or otherwise), shall be paid in full by Owner
at the Closing. All ad valorem taxes for the tax year in which the Closing
occurs, and all assessments paid in installments, shall be prorated at
Closing, and the amount accruing through the day preceding Closing shall be
paid by Owner to Buyer at Closing, and Buyer shall assume the entire
obligation for such taxes. Such proration of taxes shall be based on the
most recent tax bill, and shall be subject to further adjustment upon
receipt of the final bill, whereupon either Owner or Buyer, as the case may
be, shall pay promptly to the other any final adjustment amounts due.
7.7 Prorations.
(a) Prorations shall be based on Owner bearing all expenses of the
Property, and receiving all revenue from the Property, up to and including
the day preceding Closing, and Buyer bearing all expenses of the Property,
and receiving all revenue from the Property, accruing on and after the
Closing Date.
(b) All prorations shall be based on the actual number of days in the
period for which the prorated item is paid.
(c) In addition to the tax proration described above, at the Closing, the
following other items shall also be prorated as of the Closing Date:
(i) fixed rental payments and all other fixed charges under any Equipment
Leases expressly assumed by Buyer; (ii) charges for public utilities
serving the Property; (iii) fixed payments under the Service Contracts;
(iv) all charges, if any, under any reciprocal easement and similar
agreements affecting the Property; and (v) all other charges and fees
customarily prorated and adjusted in similar transactions. Owner shall
receive a credit, based on Owner's most recent cost, for any fuel oil at
the Property at Closing.
(d) Security deposits (including interest to the extent the tenant has
any claim to such interest), without deduction, for each unit in which a
tenant is in possession or holds a lease on th Closing Date shall, if
separately escrowed, be assigned, or if not escrowed, shall be adjusted
in cash at the Closing.
(e) Rent shall be prorated as follows. All rent received through the close
of business on the day prior to Closing (the "Cutoff Date") shall be
established. The amount of rent received by Owner or its agents through the
Cutoff Date for periods after the Cutoff Date, including the prorated
balance of the current month, is referred to as the "Prepaid Rent". Buyer
shall receive a credit for the Prepaid Rent. Rents accrued for periods
through the Cutoff Date, and unpaid under any lease as of the close of
business on the Cutoff Date ("Unpaid Rent") shall remain the property of
Owner but Buyer shall have the exclusive right to collect the same and
shall use reasonable efforts to do so. To the extent that within six
months after Closing, Buyer collects Unpaid Rent from any tenant, the
amount of such Unpaid Rent (after crediting such collections first against
the cost of collection and then against all rents for the applicable lease
payable for periods from and after Closing) shall belong to Owner. Buyer
shall pay Owner the aggregate amount, if any, of Unpaid Rent to which Owner
is entitled as provided above in a single payment to be made within seven
months after Closing. With respect to delinquent rents (and any other
amounts or other rights of any kind) respecting tenants who are no longer
tenants of the Property as of the Closing Date, Owner shall retain all
rights relating thereto. After Closing, Owner may not commence litigation
against any tenant who is in place at Closing.
(f) If accurate prorations and other adjustments cannot be made at the
Closing because current bills are not obtainable (as, for example, in the
case of utility bills), the parties shall prorate on the best available
information, subject to adjustment upon receipt of the final bill,
whereupon either Owner or Buyer, as the case may be, shall pay promptly to
the other any final adjustment amounts due. Owner shall use its best
efforts to have all utility meters read on the Closing Date so as to
determine accurately its share of current utility bills.
7.8 Condemnation or Casualty.
(a) Owner shall bear all risk of loss to the Property until the delivery of
the Deed to Buyer (including delivery through the Escrow Agent). If, prior
to the Closing, (i) condemnation proceedings are commenced against all or
any material portion of the Property, or (ii) the Property is materially
damaged by fire or other casualty (i.e., to the extent that the cost of
repairing such damage shall be $3,000,000 or more), Owner shall promptly
notify Buyer of the applicable event and the extent of any insurance
coverage, and Buyer shall have the right, upon notice in writing to Owner
delivered within the earlier of five days (A) after actual notice of such
condemnation, fire or other casualty or (B) the Closing Date, to terminate
this Agreement, whereupon the Deposit shall be returned immediately to
Buyer, and neither party shall have any further liability to the other
hereunder. If Buyer does not elect to terminate this Agreement, the
Closing shall proceed (and the Purchase Price shall be reduced as
hereinafter set forth) but Buyer shall be entitled to an assignment of all
of Owner's share of the proceeds of fire or other casualty insurance and
rent insurance proceeds (if any) payable with respect to the period after
Closing or of the condemnation award, as the case may be, and Owner shall
have no obligation to repair or restore the Property; provided, however,
that the Purchase Price shall be reduced by the sum of (1) the deductible
applied by Owner's insurer with respect to such fire or casualty; (2) the
amount by which the proceeds of such insurance will be reduced by reason of
the application of any co-insurance clause in Owner's insurance policy; and
(3) any other uninsured portion of the casualty, provided that if such
uninsured portion (other than the deductible or coinsurance amount) exceeds
$100,000, then unless Buyer agrees to bear such excess uninsured amount,
Owner may terminate this Agreement whereupon the Deposit shall be returned
to Buyer.
(b) If this Agreement is not terminated in connection with a casualty, (i)
Buyer shall be permitted to participate in any negotiations or proceedings
related to such events, and Owner shall not compromise, settle or adjust
any claims to such proceeds or awards, without Buyer's prior written
consent (which shall not be unreasonably withheld or unduly delayed) and
(ii) Owner shall have no responsibility for the restoration and repair of
that portion of the Property condemned, destroyed or damaged. Owner shall
promptly provide to Buyer written notice of any such condemnation, fire or
other casualty, or litigation.
7.9 Insubstantial Events.
If, prior to Closing, condemnation proceedings commence against an
immaterial portion of the Real Property, the Closing shall proceed and at
Closing Owner shall pay or assign to Buyer, as applicable, the respective
condemnation proceeds. If the Property or any part thereof is damaged by
fire or other casualty to the extent that the cost of repairing the same
shall be less than $3,000,000, Owner need not make repairs (except to the
extent necessary to properly operate the Property and to comply with
applicable law) and the Closing shall proceed but Owner shall assign to
Buyer all insurance proceeds (except to the extent of funds applied by
Owner to required repairs prior to Closing) and the Purchase Price shall be
reduced in the manner provided in Section 7.8 to reflect any amount not to
be paid by Owner's insurance.
Parking Additions.
The Buyer acknowledges that the Owner is in the process of redeveloping the
south pool area of the Property to additional surface paved parking area
for approximately 55 vehicle parking spaces. In the event such
redevelopment has not been completed prior to the Closing, the Owner shall
assign to Buyer, and Buyer shall accept and assume all contracts related to
such redevelopment, and receive a credit against the Purchase Price in the
amount equal to the cost and expense of such redevelopment not then paid by
the Owner, with a reciprocal indemnity agreement with respect to any
claims, expenses and liabilities under such contracts.
8. Indemnification.
Mutual Indemnity for Obligations Under Service Contracts.
(a) Owner shall indemnify and hold Buyer and its partners, and any
officer, director, employee or agent of any of them and their respective
successors and assigns (individually, each a "Buyer Indemnitee" and
collectively, the "Buyer Indemnitees") from all claims and causes of action
that accrue prior to the Closing Date under any Service Contract or
Equipment Leases.
(b) Buyer hereby indemnifies and agrees to defend and hold harmless Owner
and its partners, and any officer, director, employee or agent of any of
them and their respective successors and assigns (individually, each a
"Owner Indemnitee" and collectively, the "Owner Indemnitees") from all
claims and causes of action accruing from and after the Closing Date under
any Service Contract or Equipment Leases.
8.2 Indemnification Terms.
Each indemnification under this Agreement shall be subject to the following
provisions: The indemnitee shall notify indemnitor of any such claim
against indemnitee within 30 days after it has notice of such claim, but
failure to notify indemnitor shall in no case prejudice the rights of
indemnitee under this Agreement unless indemnitor shall be prejudiced by
such failure and then only to the extent of such prejudice. Should
indemnitor fail to discharge or undertake to defend indemnitee against such
liability within thirty (30) days after the indemnitee gives the indemnitor
written notice of the same, then indemnitee may settle such liability on
such terms as it may deems appropriate in good faith, and such settlement
shall not impair the indemnitor's liability.
8.3 Limitations of Liability.
(a) The aggregate liability of Owner for damages for a breach of its
representations, warranties, indemnifications, covenants or other
obligations under or relating to this Agreement (or any document executed
or delivered in connection herewith) shall not exceed five percent (5%) of
the Purchase Price.
(b) After Closing, except for any final closing pro-rations and other post-
closing adjustments provided for in Section 7.6 and 7.7, neither party
shall have any liability pursuant to or in connection with the
representations, warranties, indemnifications, covenants or other
obligations (whether express or implied) of that party under this Agreement
(or any document executed or delivered in connection herewith) unless and
until such liabilities, in the aggregate, exceed $50,000.
9. Tests and Studies Contingency.
9.1 Study Period.
(a) During the Study Period (and thereafter to the extent reasonably
necessary), Buyer shall have the right, upon reasonable notice to Owner, at
its own risk, cost and expense and at any date or dates during normal
business hours prior to the Closing, to enter, or cause its agents or
representatives to enter, upon the Property for the purpose of making
surveys or other tests, test borings, inspections, investigations and/or
studies of the Property, including air quality tests, asbestos,
environmental, soil contamination and other tests; provided, however, (i)
Owner shall have the right to have a representative present at all such
inspections, and (ii) in no event shall any intrusive testing (such as test
borings or the like) be undertaken without Owner's prior written approval
of appropriate arrangements to mitigate disruption to tenants and to repair
any damage. In addition, Buyer may conduct such architectural,
environmental, economic and other studies of the Property as Buyer, in its
sole and absolute discretion, may deem desirable. Regardless of whether
Closing occurs, Buyer shall indemnify Owner against liability for any
personal injury or property damage arising out of Buyer's, its agents', or
its contractors' activities on the Property under this right of access, and
Buyer shall restore the Property from any damage caused by such tests and
studies. Buyer's indemnity and restoration obligations in this Section
shall survive the Closing or earlier termination of this Agreement. Buyer
shall have no liability for the consequence of discovery by Buyer of
harmful or dangerous conditions present on, under or about the Property.
Buyer shall have complete access to, and may photocopy, all documentation,
agreements and other information about the Property in the possession of
Owner or Owner's agents related to the Property (but not Engineering
Reports or internal partnership or financial records of Owner), and Owner
shall instruct its agents accordingly, but no such agent shall have any
obligation or liability to Buyer.
(b) If, during the period ending at 5pm eastern time on August 31, 2000
(the "Study Period"), Buyer gives Owner written notification ("Study
Termination Notice") that Buyer elects for any reason whatsoever not to
consummate the acquisition of the Property pursuant to this Agreement, this
Agreement shall terminate, Buyer shall receive the Deposit and neither
party shall have any further right or liability to the other under this
Agreement, except as provided in Section 9.1(a) or in Section 7.5. If
Buyer does not give the Study Termination Notice on or before expiration of
the Study Period, this Agreement shall remain in effect.
10. Defaults.
10.1 Remedies on Buyer's Failure to Close.
(a) Buyer and Owner acknowledge that it would be extremely impracticable
and difficult to ascertain the actual damages which would be suffered by
Owner if Buyer fails to consummate the transactions contemplated herein for
any reason other than the failure of any of the conditions to Buyer's
obligations. Buyer and Owner have considered carefully the loss to Owner
occasioned by taking the Property off the market as a consequence of the
negotiation and execution of this Agreement, the expenses of Owner incurred
in connection with the preparation of this Agreement and Owner's
performance hereunder, and the other damages, general and special, which
Buyer and Owner realize and recognize Owner would sustain but which Owner
cannot at this time calculate with absolute certainty. Based on all those
considerations, Owner agrees that all damages to Owner would reasonably be
expected to amount to the Deposit and Owner hereby waives all actual,
consequential and other damages in excess of the Deposit.
(b) Accordingly, if Owner is not in material default hereunder
and Buyer fails or refuses to consummate the transactions
contemplated herein as and when required, then Escrow Agent shall pay
the entire Deposit (not just the Anon-refundable portion) to Owner as
full and complete liquidated damages. Upon proper payment of the Deposit
to Owner, no party to this Agreement shall have any liability to any
other party to this Agreement, other than under Sections 9.1(a) and 7.5,
and this Agreement shall be terminated.
(c) The prevailing party in any litigation over entitlement to the Deposit
shall be entitled to recover its reasonable attorneys' fees in such
litigation.
10.2 Owner's Default.
If Buyer is not in material default and Owner fails to convey the Property
to Buyer when, if, and in the condition required by this Agreement, Buyer
shall as its sole remedy either (i) hold Owner in default and terminate
this Agreement, in which case the Deposit shall be returned to Buyer free
and clear of claims of Owner and Buyer may institute any action it
determines necessary at law or equity to recover its actual damages which
shall be limited to $1,500,000 or (ii) seek specific performance of this
Agreement, together with Buyer's reasonable attorneys' fees, or (iii) as to
breach of Owner's covenants with respect to the condition of, or title to,
the Property, proceed to Closing and waive the breach except for a mutually
acceptable reduction in the Purchase Price. "Actual damages" means Buyer's
out-of-pocket costs and shall exclude incidental and consequential damages.
In no event shall Buyer be entitled to any damages other than actual
damages.
10.3 Grace Period.
Neither party shall be entitled to terminate this Agreement for the other
party's default until the defaulting party has been given written notice
of, and ten (10) days' opportunity to cure, the default; provided, however,
that such grace period shall not cause an extension or other delay of the
Closing Date.
11. Miscellaneous.
11.1 Further Assurances.
Each party agrees that it will, at any time, prior to, at or after the
Closing, duly execute and deliver to the other any additional conveyances,
assignments, documents and instruments, and shall take or cause to be taken
such further actions (including the making of filings), which the parties
may reasonably agree are necessary to the proper consummation of the
transactions contemplated herein; provided, however, neither party will be
obliged to incur liability or obligations not contemplated herein.
11.2 Notices.
(a) If, under this Agreement, the consent of a party is required, the
consent shall be in writing and shall be executed by a duly authorized
officer or agent.
(b) All notices, demands, requests or other communications which may be or
are required to be given, served or sent by either party to the other party
pursuant to this Agreement shall be in writing and shall be either hand
delivered, sent by recognized overnight delivery service or mailed by
first-class, registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
(i) If to Owner:
c/o Smith Realty Companies
2345 Crystal Drive, 11th Floor
Arlington, Virginia 22202
Attention: Mr. Gregory M. Weingast, Vice President
with a copy (which shall not constitute notice) to:
Smith Realty Companies
2345 Crystal Drive, 10th Floor
Arlington, Virginia 22202
Attention: Mr. Gerald R. Best, Assistant General Counsel
(ii) If to Buyer:
Home Properties of New York
850 Clinton Square
Rochester, NY 14604
Attention: Mr. John Smith, Head of Acquisitions
with a copy (which shall not constitute notice) to:
Home Properties of New York
850 Clinton Square
Rochester, NY 14604
Attention: Ms. Ann M. McCormick, Esquire
Any party may designate by notice in writing a new address to which any
notice, demand, request or communication may thereafter be so given, served
or sent. Each notice, demand, request, or communication which shall be
mailed or delivered in the manner described above, shall be deemed
sufficiently given, served, sent or received for all purposes at such time
as it is delivered to the addressee (with the delivery or return receipt
being deemed conclusive evidence of such delivery), or at such time as
delivery is refused by the addressee upon presentation.
11.3 Severability.
If fulfillment of any provision of this Agreement, or performance of any
transaction related hereto, at the time such fulfillment or performance
shall be due, shall involve transcending the limit of validity prescribed
by law, then the obligation to be fulfilled or performed shall be reduced
to the limit of such validity; and if any clause or provision contained in
this Agreement operates or would operate prospectively to invalidate this
Agreement in whole or in part, then, if possible without substantially
diminishing either party's rights hereunder, such clause or provision only
shall be held ineffective, as though not herein contained, and the
remainder of this Agreement shall remain operative and in full force and
effect.
11.4 Time of Essence.
Time is of the essence of this agreement.
11.5 Cumulative Remedies.
Except as otherwise provided in this Agreement, the rights, benefits, and
remedies provided to Buyer by this Agreement, or any document executed
pursuant to this Agreement, are cumulative, and shall not be exclusive of
any other rights, remedies and benefits allowed to Buyer by this Agreement,
at law or in equity. Any claim of Owner in the event the Closing does not
occur shall be subject to the liquidated damages provisions of
Section 10.1.
11.6 Waiver.
Neither the waiver by either of the parties hereto of a breach of or a
default under any of the provisions of this Agreement, nor the failure of
either of the parties, on one or more occasions, to enforce any of the
provisions of this Agreement or to exercise any right or privilege
hereunder shall thereafter be construed as a waiver of any subsequent
breach or default of a similar nature, or as a waiver of any of such
provisions, rights, or privileges hereunder.
11.7 Successors and Assigns.
Subject to any provisions hereof restricting assignment, this Agreement
shall be binding upon and inure to the benefit of the parties hereto, and
their respective successors and assigns.
11.8 Assignment.
If Buyer so elects, Buyer may assign this Agreement to an
entity in which Buyer has complete and effective management control (a
"Subsidiary") which will assume Buyer's obigations hereunder but
Buyer will not be relieved of any liability hereunder under an
assignment agreement in form reasonably acceptable to Owner.
Otherwise, neither party shall assign or transfer or permit the
assignment or transfer of its rights or obligations under this
Agreement without the prior written consent of the other.
11.9 Amendment.
No amendment, modification or discharge of this Agreement, and no waiver
hereunder, shall be valid or binding unless set forth in writing and duly
executed by the party against whom enforcement of the amendment,
modification, discharge or waiver is sought.
11.10 Construction.
Each party hereto hereby acknowledges that all parties hereto participated
equally in the negotiation and drafting of this Agreement and that,
accordingly, no court construing this Agreement shall construe it more
stringently against one party than against the other.
11.11 Entire Agreement.
This Agreement and the Exhibits attached hereto (which are incorporated
herein by this reference) constitute the entire agreement between the
parties hereto with respect to the transactions contemplated herein, and
this Agreement supersedes all prior oral or written agreements, commitments
or understandings (including without limitation any letter of intent or
term sheet with respect to the Property) with respect to the matters
provided for herein. No representations or warranties have been made by
Buyer or Owner except as specifically set forth in this Agreement, and in
particular, no oral or written expression, or nonverbal conduct of a person
intended by such person as a substitute for oral or written expression,
will be attributed to Buyer or Owner as a warranty or representation,
except as specifically set forth in this Agreement.
11.12 Pronouns.
All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, neuter, singular or plural, as the identity of the
person or entity may require.
11.13 No Negotiations.
Except as otherwise required by law, so long as this Agreement is in full
force and effect, Owner shall not (i) consider any offer from any other
person or entity for the purchase or other acquisition, directly or
indirectly, of the Property or any part thereof or interest therein, or
(ii) solicit any offer from any person or entity or enter into any
negotiations with respect to any such purchase or other acquisition,
directly or indirectly, of the Property or any part thereof or interest
therein.
11.14 Headings.
Section and subsection headings contained in this Agreement are inserted
for convenience of reference only, shall not be deemed to be a part of this
Agreement for any purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof.
11.15 Tax Free Exchange.
The Buyer shall reasonably cooperate with Owner, at Owner expense for any
out of pocket expense (excluding attorneys' fees) incurred by Buyer at the
request of the Owner, to structure the transactions contemplated by this
Agreement as either a simultaneous or deferred 1031 tax free exchange of
real estate.
11.16 Governing Law.
This Agreement, the rights and obligations of the parties hereto, and any
claims or disputes relating thereto shall be governed by and construed
under the laws of the jurisdiction where the Land is located (but not
including the choice of law rules thereof).
11.17 Waiver of Jury Trial.
Owner and Buyer each hereby waives any right to jury trial in the event any
party files an action relating to this Agreement or to the transactions or
obligations contemplated hereunder.
11.18 Counterparts.
To facilitate execution, this Agreement may be executed in as many
counterparts as may be required; and it shall not be necessary that the
signatures of, or on behalf of, each party, or that the signatures of all
persons required to bind any party, appear on each counterpart; but it
shall be sufficient that the signature of, or on behalf of, each party, or
that the signatures of the persons required to bind any party, appear on
one or more of the counterparts. All counterparts shall collectively
constitute a single agreement.
11.19 Confidentiality.
Until the Closing, the parties shall keep the existence and terms of this
Agreement confidential except for disclosures that in Buyer's or Owner's
reasonable opinion are required by law or reasonably necessary to the
accomplishment of the transactions, including without limitation
disclosures to tenants, lenders, engineers, consultants, and third parties
involved in financing Buyer*s acquisition of the Property. If this
Agreement is terminated prior to Closing, Buyer shall not disclose
(except to the extent Buyer, in its reasonable discretion, deems required
by applicable law) information provided by Owner to Buyer in connection with
this Agreement. Each party acknowledges that, after Closing, the other
party may publicly disclose the material terms of this Agreement, and that
prior to Closing, such party may publicly disclose information about this
transaction to the extent that such party deems reasonably necessary to
ensure legal compliance.
11.20 Financial Information.
Buyer has disclosed to Owner that audited financial statements pertaining
to the Property for a minimum of one, and a maximum of three, prior
calendar year(s) of operation, and the portion of the calendar year in which
the Closing occurs, up to the Closing Date, will be required to be filed by
Buyer with the Securities and Exchange Commission after the Closing.
Accordingly, the Owner agrees to provide Buyer, and its accountant, with
access to the books and records of the Owner pertaining to the Property
after the Closing, upon reasonable advance notice, in order for Buyer's
accountant to conduct the required audit, at the expense of Buyer. After
the Closing, the Owner will provide, or cause to be provided to Buyer's
accountant, a signed Representation Letter, in the form substantially
attached as Exhibit C.
IN WITNESS WHEREOF, the undersigned have executed this Agreement, or have
caused this Agreement to be duly executed on their behalf, as of the day
and year specified below.
<PAGE>
SIGNATURE PAGE
REAL ESTATE PURCHASE AGREEMENT
ORLEANS APARTMENTS
FAIRFAX COUNTY, VIRGINIA
SMITH PROPERTY HOLDING ORLEASN, L.L.C.
By: Charles E. Smith Residential Realty, L.P.
sole member
By: Charles E. Smith Reisdential Realty, Inc.,
sole general partner
By: _______________________
Name: ______________________
Title: _____________________
HOME PROPERTIES OF NEW YORK, L.P., a New York limited partnership
By: Home Properties of New York, Inc., a Maryland corporation
By: ______________________
Name: ____________________
Title: ____________________
