Execution Counterpart
Riverside One
PURCHASE AND SALE AGREEMENT
AGREEMENT dated as of January 22, 1996 between Krupp Associates
Riverside Limited Partnership, an Indiana limited partnership ("Seller"),
with an address of c/o Berkshire Property Investors, 470 Atlantic Avenue,
Boston, Massachusetts 02210, Attention: David J. Olney, Telecopier No.
617-574-8334 and BluSky, Inc., an Indiana corporation ("Buyer"), with an
address of 2508 U.S. Highway 41 North, Evansville, Indiana 47711,
Attention: Robert Brenner, Telecopier No. 812-426-1462.
In consideration of the mutual undertakings and covenants herein
contained, Seller and Buyer hereby covenant and agree as follows:
SECTION 1
SALE OF PROPERTY AND ACCEPTABLE TITLE
1.01 Agreement to Buy and to Sell: Property. Seller shall sell to
Buyer, and Buyer shall purchase from Seller, at the price and
upon the terms and conditions set forth in this Agreement the
following:
(a) that certain tract or parcel of land located in the City of
Evansville, Vanderburgh County, Indiana, more particularly
described in Schedule A attached hereto (the "Land");
(b) the 140 unit apartment complex including approximately
30,000 square feet of commercial office space, commonly
known as Riverside One Apartments, which contains related
improvements, facilities, amenities, structures, driveways
and walkways, all of which have been constructed on the
Land (collectively, the "Improvements");
(c) all right, title and interest of Seller in and to any
alleys, strips or gores adjoining the Land, and any
easements, rights-of-way or other interests in, on, under
or to, any land, highway, street, road, right-of-way or
avenue, open or proposed, in, on, under, across, in front
of, abutting or adjoining the Land, and all right, title
and interest of Seller in and to any awards for damage
thereto by reason of a change of grade thereof;
(d) the accessions, appurtenant rights, privileges,
appurtenances and all the estate and rights of Seller in
and to the Land and the Improvements. as applicable, or
otherwise appertaining to any of the property described in
the immediately preceding clauses (a), (b) and/or (c);
(e) the personal property listed in Schedule B attached hereto
owned by Seller and located on or in or used solely in
connection with the Land and Improvements (collectively,
the "Personal Property"); and
(f) all of Seller's interest in any intangible property now or
hereafter, owned by Seller and used solely in connection
with the Land, Improvements and Personal Property,
including without limitation the right to use any trade
style or name now used in connection with the same, any
contract rights, escrow or security deposits, utility
agreements or other rights related to the ownership of or
use and operation of the Property, as hereinafter defined.
All of the items described in subparagraphs (a), (b), (c), (d),
(e) and (f) above are collectively the "Property".
1.02 Title. Seller shall convey to Buyer by special warranty deed (the
"Deed"), and Buyer shall accept the fee simple title to the
Property in accordance with the terms of this Agreement, and
Buyer's obligation to accept said title shall be conditioned upon
Buyer then being conveyed good and clear record and marketable
fee simple title to the Property, subject only to the Permitted
Exceptions (as hereinafter defined).
(a) Within seven (7) days from the date of this Agreement, or
as soon thereafter as Commonwealth Land Title Insurance
Company (the "Title Insurer") may prepare same, Buyer
shall obtain, and deliver a copy to Seller of, a
Commitment For Title Insurance for an ALTA Owner's Form B
Title Insurance Policy (the "Title Policy") and legible
copies of all instruments and plans mentioned therein as
exceptions to title (all of such items are hereinafter
collectively referred to as the "Commitment"). The
Commitment shall be in the amount of the Purchase Price
(as defined in Section 2.01 hereof). The cost of the Title
Policy shall be paid one-half by Buyer and one-half by
Seller. Should such Commitment contain any title
exceptions which are not acceptable to Buyer, in its sole
discretion, Buyer shall, prior to the expiration of the
Inspection Period (as defined in Section 16.01), notify
Seller if any such exceptions are unacceptable. If Buyer
fails to so notify Seller of any unacceptable exceptions
as described above, the exceptions set forth in Schedule B
of the Commitment shall be deemed accepted by Buyer and
included as the "Permitted Exceptions". If any exceptions
are unacceptable to Buyer and Buyer timely notifies Seller
in writing of such fact as above provided, Seller, in
Seller's sole discretion, shall have thirty (30) days from
the date Seller receives notice of such unacceptable
exceptions to remove or cure such exceptions and the date
of Closing shall be extended, if necessary. If Seller
fails or refuses to cure said unacceptable exceptions
within the time period above provided, Buyer may (i)
terminate this Agreement and the Deposit shall be returned
to Buyer, or (ii) waive such exceptions and accept title
subject thereto, in which event there shall be no
reduction in the Purchase Price.
Simultaneously with the delivery of the Deed, Seller shall
enter into, and deliver to Buyer a special warranty bill
of sale and instrument of transfer and assignment (the
"General Instrument"), in form and substance reasonably
satisfactory
to Seller's and Buyer's counsel, assigning and transferring all of the
Seller's right, title and interest in and to all of the tangible and
intangible personal property constituting the Property.
1.03 Survey. Within thirty (30) days from the date hereof, Buyer shall
obtain an as-built survey (the "Survey") of the Land and the
Improvements dated within ninety (90) days of the Closing
prepared by a surveyor or engineer licensed in the state where
the Property is located with a current certificate attached
thereto or endorsed thereon executed by the surveyor in the form
of the Minimum Standard Detail Requirements Certificate for Land
Title Surveys. The cost of the Survey shall be paid one-half by
Buyer and one-half by Seller. Such survey shall indicate all
improvements, easements, highways, rights-of-way and other
matters affecting or abutting the Property and shall be
sufficient in form and content to induce the Title Insurer to
delete all standard and printed survey exceptions contained in
the Title Commitment.
Should such Survey contain any encumbrances, encroachments or
other survey defects (collectively "survey matters") which are
not acceptable to Buyer in its sole discretion, Buyer shall,
prior to the later of ten (10) days after receipt of the Survey
or the expiration of the Inspection Period (as defined in
Section 16.01), notify Seller if any such survey matters are
unacceptable. If Buyer fails to so notify Seller of the
unacceptable survey matters as described above, the Survey shall
be deemed accepted by Buyer. If any survey matters are
unacceptable to Buyer and Buyer timely notifies Seller in writing
of such fact as above provided, Seller, in Seller's sole
discretion, shall have thirty (30) days from the date Seller
receives notice of such unacceptable survey matters to cure such
survey matters and the date of Closing shall be extended, if
necessary. If Seller fails or refuses to cure said unacceptable
survey matters within the time period provided, Buyer may (i)
terminate this Agreement and the Deposit shall be returned to
Buyer, or (ii) waive such survey matters and accept title subject
thereto, ln which event there shall be no reduction in the
Purchase Price.
SECTION 2
PURCHASE PRICE, ACCEPTABLE FUNDS,
DEPOSIT AND ESCROW OF DEPOSIT
2.01 Purchase Price. The purchase price ("Purchase Price") to be paid
by Buyer to Seller for the Property is Four Million Five Hundred
Thousand Dollars ($4,500,000.00) subject to the prorations and
adjustments as hereinafter provided in this Agreement.
2.02 Payment of Monies. All monies payable under this Agreement,
unless otherwise specified in this Agreement, shall be paid by
wire transfer.
2.03 Payment of Purchase Price. The Purchase Price, subject to
prorations and adjustments, shall be paid as follows:
(a) Fifty Thousand Dollars ($50,000.00) have been paid as a
deposit this day (the "Initial Deposit"): and
(b) The balance of the Purchase Price shall be paid at the
time of delivery of the Deed by wire transfer in
accordance with wiring instructions to be provided by
Seller.
2.04 Deposit; Escrow Agent. The Initial Deposit shall be delivered by
Buyer to Jeffrey A. Bosse, Esq. (the "Escrow Agent")
simultaneously with the complete execution of this Agreement.
(The Initial Deposit together with interest accrued thereon, are
collectively referred to herein as the "Deposit"). Upon receipt
from Buyer of the Deposit, Escrow Agent shall invest the Deposit
in an interest-bearing account or money market fund agreeable to
Buyer. All interest on the Deposit shall accrue to the Buyer,
except as otherwise provided in Section 12.03 hereof. At the
Closing, Escrow Agent shall release the Deposit to Seller, which
Deposit shall be credited against the balance of the Purchase
Price owed by Buyer to Seller. Escrow Agent shall agree to hold
and dispose of the Deposit in accordance with the terms and
provisions of this Agreement.
2.05 Escrow Provisions. Escrow Agent hereby acknowledges receipt by
Escrow Agent of the Deposit paid by Buyer to be applied on the
Purchase Price of the Property under the terms hereof. Escrow
Agent agrees to hold, keep and deliver said Deposit and all other
sums delivered to it pursuant hereto in accordance with the terms
and provisions of this Agreement. Escrow Agent shall not be
entitled to any fees or compensation for its services hereunder.
Escrow Agent shall be liable only to hold said sums and deliver
the same to the parties named herein in accordance with the
provisions of this Agreement, it being expressly understood that
by acceptance of this agreement Escrow Agent is acting in the
capacity of a depository only and shall not be liable or
responsible to anyone for any damages, losses or expenses unless
same shall have been caused by the gross negligence or willful
malfeasance of Escrow Agent. In the event of any disagreement
between Buyer and Seller resulting in any adverse claims and
demands being made in connection with or for the monies involved
herein or affected hereby, Escrow Agent shall be entitled to
refuse to comply with any such claims or demands so long as
disagreement may continue; and in so refusing Escrow Agent shall
make no delivery or other disposition of any of the monies then
held by it under the terms of this Agreement, and in so doing
Escrow Agent shall not become liable to anyone for such refusal;
and Escrow Agent shall be entitled to continue to refrain from
acting until (a) the rights of the adverse claimants shall have
been finally adjudicated in a court of competent jurisdiction of
the monies involved herein or affected hereby, or (b) all
differences shall have been adjusted by agreement between Seller
and Buyer, and Escrow Agent shall have been notified in writing
of such agreement signed by the parties hereto. Escrow Agent
shall not be required to disburse any of the monies held by it
under this Agreement unless in accordance with either a joint
written instruction of Buyer and Seller or an Escrow Demand from
either Buyer or Seller in accordance with the provisions
hereinafter. Upon receipt by Escrow Agent from either Buyer or
Seller (the "Notifying Party") of any notice or request (the
"Escrow Demand") to perform any act or disburse any portion of
the monies held by Escrow Agent under the terms of this
Agreement, Escrow Agent shall give written notice to the other
party (the "Notified Party"). If within five (5) days after the
giving of
such notice, Escrow Agent does not receive any written objection
to the Escrow Demand from the Notified Party, Escrow Agent shall
comply with the Escrow Demand. If Escrow Agent does receive
written objection from the Notified Party in a timely manner,
Escrow Agent shall take no further action until the dispute
between the parties has been resolved pursuant to either clause
(a) or (b) above. Further Escrow Agent shall have the right at
all times to pay all sums held by it (i) to the appropriate party
under the terms hereof, or (ii) into any court of competent
jurisdiction after a dispute between or among the parties hereto
has arisen, whereupon Escrow Agent's obligations hereunder shall
terminate.
Seller and Buyer jointly and severally agree to indemnify and
hold harmless said Escrow Agent from any and all costs, damages
and expenses, including reasonable attorneys' fees, that said
Escrow Agent may incur in its compliance of and in good faith
with the terms of this agreement; provided, however, this
indemnity shall not extend to any act of gross negligence or
willful malfeasance on the part of the Escrow Agent.
SECTION 3
THE CLOSING
3.01 Closing. Except as otherwise provided in this Agreement, the
delivery of all documents necessary for the closing of this
transaction pursuant to this Agreement (the "Closing") shall take
place in the offices of Jeffery A. Bosse, 522 Main Street,
Evansville, Indiana 47708 or, if requested by Buyer's lender, at
the offices of such lender's counsel in Evansville, Indiana or
such other place as Seller and Buyer shall mutually agree, at
10:00 A.M. local time on April 22, 1996. It is agreed that time
is of the essence of this Agreement.
SECTION 4
SELLER'S PRE-CLOSING DELIVERIES
Seller shall furnish to Buyer for inspection and approval by
Buyer the following:
4.01 Leases. Seller shall provide Buyer with access on-site to the
originals of all leases and related lease files.
4.02 Permits. Copies of all certificates of occupancy (if any), and
other permits and licenses (if any) required for the occupancy
and operation of the Property.
4.03 Taxes. A copy of 1994 and 1995 (if available) real estate and
personal property tax statements for the Property.
4.04 Current Rent Roll. A list of the current rents now being
collected on each of the apartment units in the Improvements
which includes: apartment number, unit type, unit status, tenant
name, commencement and termination dates, market rent, lease
rent, deposits and details of any concessions.
4.05 Service Contracts. Copies of all service, maintenance, supply and
management contracts affecting the use, ownership, maintenance
and/or operation of the Property.
4.06 Utility Bills. Copies of all utility bills (gas, electric, water
and sewer) relating to the Property for the immediately prior 12
month period.
SECTION 5
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as of the date hereof
as follows:
5.01 Ownership. Seller is the sole owner of the Property.
5.02 Leases. As of the date of the Agreement there are no leases,
subleases, licenses or other rental agreements or occupancy
agreements (written or verbal) which grant any possessory
interest in and to any space situated on or in the Improvements
or that otherwise give rights with regard to use of the
improvements other than the leases (the "Leases") described in
Schedule C attached hereto (the "Rent Roll"). The Rent Roll is
true, accurate and complete as of the date hereof. Except as
otherwise specifically set forth in the Rent Roll or elsewhere in
this Agreement:
(a) the Leases are in full force and effect and none of them
has been modified, amended or extended;
(b) Seller has neither sent written notice to any tenant of the
Property, nor received any notice from any such tenant,
claiming that such tenant, or Seller, as the case may be,
is in default, which default remains uncured other than as
shown on Schedule C attached hereto;
(c) to the best knowledge of Seller, no action or proceeding
instituted against Seller by any tenant of any unit in the
Property is presently pending;
(d) there are no security deposits or other deposits other than
those set forth in the Rent Roll;
(e) no rent has been paid more than thirty (30) days in advance
under any lease of any unit in the Property other than as
shown on the Rent Roll; and
(f) no leasing commission shall be due from Buyer for any
period subsequent to Closing and Buyer shall not be liable
for any leasing commission incurred by Seller prior to
Closing unless such leasing commission arises pursuant to a
new lease entered into after the date of this Agreement and
approved by Buyer pursuant to Section 8.01.
5.03
Service and Management Contracts. Schedule D attached hereto
lists all services, maintenance, supply and management contracts
(collectively, "Service Contracts") affecting the operation of
the Property. At Closing, Buyer shall be required to assume the
obligations, as owner, under those Service Contracts which are
non-cancelable and are designated by the letters "NC" on
Schedule D (the "Non-Cancelable Service Contracts"). With
respect to all other Service Contracts, Buyer may give written
notice to Seller at any time prior to the expiration of the
Inspection Period designating the Service Contracts which Buyer
elects not to assume. Buyer shall be deemed to have approved,
and agreed to assume, all Services Contracts as to which Buyer
does not give such written notice on a timely basis. At Closing,
Buyer shall assume the Non-Cancelable Service Contracts and all
other Service Contracts, which Buyer has or is deemed to have,
approved (collectively the "Assumed Service Contracts") and
Seller shall terminate all other Service Contracts.
5.04 Ability to Perform. Seller has full power to execute, deliver
and carry out the terms and provisions of this Agreement and has
taken all necessary action to authorize the execution, delivery
and performance of this Agreement, and this Agreement
constitutes the legal, valid and binding obligation of Seller
enforceable in accordance with its terms. Except as set forth in
this Agreement, no order, permission, consent, approval,
license, authorization, registration or validation of, or filing
with, or exemption by, any governmental agency, commission,
board or public authority is required to authorize, or is
required in connection with, the execution, delivery and
performance of this Agreement by Seller or the taking by Seller
of any action contemplated by this Agreement.
5.05 No Actions. There are no pending, or to Seller's knowledge,
threatened legal actions or proceedings against or relating to
Seller or the ownership of the Property.
5.06 No Violation Notice. Seller has not received written notice:
(a) from any federal, state, county or municipal authority
alleging any fire, health, safety, building, pollution,
environmental, zoning or other violation of law in respect
of the Property or any part thereof, which has not been
entirely corrected;
(b) concerning the possible or anticipated condemnation of any
part of the Property, or the widening, change of grade or
limitation on use of streets abutting the same or
concerning any special taxes or assessments levied or to be
levied against the Property or any part thereof;
(c) from any insurance company or bonding company of any
defects or inadequacies in the Property or any part
thereof, which would adversely affect the insurability of
the same or cause the imposition of extraordinary premiums
or charges therefor or of any termination or threatened
termination of any policy of insurance or bond; or
(d) concerning any change in the zoning classification of the
Property or any part thereof.
5.07 No Management Contracts, Employment Contracts, Unions, Pension
Plans. Seller has not entered into any management contracts,
employment contracts or labor union contracts and has not
established any retirement, pension or profit sharing plans
relating to the operation or maintenance of the Property which
shall survive the Closing or for which Buyer shall have any
liability or obligation.
5.08 Environmental Compliance. Seller has no actual knowledge, and
has not received written notice from any governmental authority
or other person, that (a) the Property is in violation of any
Environmental Law (as defined in Section 6.01) or (b) the
Property or Seller is the subject of any administrative or
judicial action or proceeding pursuant to any Environmental Law
in connection with the property.
5.09 No Employment Contracts, Unions, Pension Plans. Seller has not
entered into any employment contracts or labor union contracts
and has not established any retirement, pension or profit
sharing plans relating to the operation or maintenance of the
Property which shall survive the Closing or for which Buyer
shall have any liability or obligation.
Any reference in this Section 5 to Seller's knowledge,
representation, warranty or notice of any matter, shall only
mean such knowledge or notice that is actually known by or has
actually been received by David J. Olney or Eric A. Calub, the
authorized agents of Seller. Any representation or warranty of
the Seller is based solely upon those matters of which David J.
Olney or Eric A.
Calub has actual knowledge. Any knowledge or notice given, had or received
by any of Seller's agents, servants or employees, other than David J.
Olney or Eric A. Calub, shall not be imputed to Seller.
SECTION 6
AS-IS CONDITION
6.01 As Is. Buyer acknowledges and agrees that it will be purchasing
the Property based solely upon its inspection and investigations
of the Property and that Buyer will be purchasing the Property
"AS IS" and "WITH ALL FAULTS" based upon the condition of the
Property as of the date of this Agreement, subject to reasonable
wear and tear and loss by fire or other casualty or condemnation
from the date of this Agreement until the Closing. Without
limiting the foregoing, Buyer acknowledges that, except as may
otherwise be specifically set forth elsewhere in this Agreement,
neither Seller nor its consultants or agent have made any other
representations or warranties of any kind upon which Buyer is
relying as to any
matters concerning the Property, including, but not limited to,
the condition of the land or any Improvements, the existence or
nonexistence of asbestos, toxic water or any hazardous material,
the tenants of the Property or the leases affecting the
Property, economic projections or market studies concerning the
Property, any development rights, taxes, bonds, covenants,
conditions and restrictions affecting the Property, water or
water rights, topography, drainage, soil, subsoil of the
Property, the utilities serving the Property or any zoning,
environmental or building laws, rules or regulations affecting
the Property. Seller makes no representation that the Property
complies with Title III of the Americans with Disabilities Act
or any fire codes or building codes. Buyer hereby releases
Seller from any and all liability in connection with any claims
which Buyer may have against Seller, and Buyer hereby agrees not
to assert any claims, for contribution, cost recovery or
otherwise, against Seller, relating directly or indirectly to
the existence of asbestos or hazardous materials or substances
on, or environmental conditions of, the Property. As used
herein, the term "Hazardous Materials" or "Hazardous Substances"
means (i) hazardous wastes, hazardous substances, hazardous
constituents, toxic substances or related materials, whether
solids, liquids or gases, including but not limited to
substances defined as "hazardous wastes," "hazardous
substances," toxic substances," pollutants," "contaminants,"
"radioactive materials," or other similar designations in, or
otherwise subject to regulation under, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980,
as amended ("CERCLA"), 42 U.S.C. 9601 et seq.; the Toxic
Substance Control Act ("TSCAS"), 15 U.S.C. 2601 et seq.; the
Hazardous Materials Transportation Act, 49 U.S.C. 1802; the
Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C.
9601, et seq.; the Clean Water Act ("CWA"), 33 U.S.C. 1251 et
seq.; the Safe Drinking Water Act, 42 U.S.C. 300f et seq.; the
Clean Air Act ("CAA"), 42 U.S.C. 7401 et seq.; and in any
permits, licenses, approvals, plans, rules, regulations or
ordinances adopted, or other criteria and guidelines promulgated
pursuant to the preceding laws or other similar federal, state
or local laws, regulations, rules or ordinance now or hereafter
in effect relating to environmental matters (collectively the
"Environmental Laws"); and (ii) any other substances,
constituents or wastes subject to any applicable federal, state
or local law, regulation or ordinance, including any
environmental law, now or hereafter in effect, including but not
limited to (A) petroleum, (B) refined petroleum products, (C)
waste oil, (D) waste aviation or motor vehicle fuel and (E)
asbestos.
6.02 No Financial Representation. Seller has provided to Buyer
certain unaudited historical financial information regarding the
Property relating to certain periods of time in which Seller
owned the Property. Seller and Buyer hereby acknowledge that
such information has been provided to Buyer and Buyer's request
solely as illustrative material. Seller makes no representation
or warranty that such material is complete or accurate or that
Buyer will achieve similar financial or other results with
respect to the operations of the Property, it being acknowledged
by Buyer that Seller's operation of the Property and allocations
of revenues or expenses may be vastly different than Buyer may
be able to attain.
Buyer acknowledges that it is a sophisticated and experienced
purchaser of real estate and further that Buyer has relied upon
its own investigation and inquiry with respect to the operation
of the Property and releases Seller from any liability with
respect to such historical information.
SECTION 7
INSURANCE
7.01 Maintenance of Insurance. Until the Closing, Seller shall
maintain its present insurance on the Property which insurance
in respect of fire and casualty shall be covered by a standard
All-Risk Policy in the amounts as currently insured. Subject to
the provisions of Section 7.02, the risk of loss in and to the
Property shall remain vested in Seller until the Closing. Buyer
will obtain its own insurance on the Property at Closing.
7.02 Casualty or Condemnation. If prior to the Closing, the
Improvements or any material portion thereof (having a
replacement cost equal to or in excess of $100,000.00) are
damaged or destroyed by fire or casualty, or any part of the
Property is taken by eminent domain by any governmental entity,
then Buyer or Seller shall have the option, exercisable by
written notice given to the other party at or prior to the
Closing, to terminate this Agreement, whereupon all obligations
of all parties hereto shall cease, the Deposit shall be returned
to Buyer and this Agreement shall be void and without recourse
to the parties hereto except for provisions which are expressly
stated to survive such termination. If neither Buyer nor Seller
elects to terminate this Agreement or if such damage or
destruction or taking has a replacement cost or is in an amount
of less than $100,000.00, Buyer shall proceed with the purchase
of the Property without reduction or offset of the Purchase
Price, and in such case unless Seller shall have previously
restored the Property to its condition prior to the occurrence
of any such damage or destruction, Seller shall pay over or
assign to Buyer all amounts received or due from, and all claims
against, any insurance company or governmental entity as a
result of such destruction or taking.
SECTION 8
SELLER'S OBLIGATIONS PRIOR TO CLOSING
Seller covenants that between the date of this Agreement and
the Closing:
8.01 No Lease Amendments. Prior to Closing, Seller shall continue its
efforts to lease the Property in a manner consistent with
Seller's prior business practice. Seller shall not, without
Buyer's prior written consent (a) enter into any new lease for
an apartment unit or office space with a first-time tenant
unless the lease is for a period of no more than one year and
the rent shall be not less than the amount of the market rent
noted on the Rent Roll for the respective apartment or office
space; or (b) enter into, amend, renew or extend any Lease for
an apartment unit or office space with an existing tenant unless
the lease is for a period of not more than one year and that the
rent for the amended, renewal or extension term shall not be
less than the amount of rent noted on
the Rent Roll, for the respective apartment or office space; or
(c) terminate any Lease except by reason of a default by the
tenant thereunder or by reason of the provisions contained in
the Lease.
8.02 Continuation of Service Contracts. Seller shall not modify or
amend any Service Contract or enter into any new service
contract for the Property, without the prior written consent of
Buyer which consent shall not be unreasonably withheld or
delayed provided the same is terminable without penalty by the
then owner of the Property upon not more than thirty (30) days
notice.
8.03 Replacement of Personal Property. No personal property included
as part of the Property shall be removed from the Property
unless the same is replaced with similar items of at least equal
quality prior to the Closing.
8.04 Tax Procedure. Seller shall not withdraw, settle or otherwise
compromise any protest or reduction proceeding affecting real
estate taxes assessed against the Property for any fiscal period
in which the Closing is to occur or any subsequent fiscal period
without the prior written consent of Buyer. Real estate tax
refunds and credits received after the Closing which are
attributable to the fiscal tax year during which the Closing
occurs shall be apportioned between Seller and Buyer, after
deducting the expenses of collection thereof, based upon the
relative time periods each owns the Property, which obligation
shall survive the Closing.
8.05 Access. Seller shall allow Buyer or Buyer's representatives
access to the Property, the Leases and other documents required
to be delivered under this Agreement upon reasonable prior
notice at reasonable times, including Buyer shall be permitted
to make a final inspection of the Property immediately prior to
Closing.
8.06 Operations. Seller shall continue to operate and maintain the
Property in a manner consistent with Seller's prior business
practice; provided in no event shall Seller be obligated to make
any capital improvements, repairs or replacements.
SECTION 9
SELLER'S CLOSING OBLIGATIONS
9.01 Closing, Deliveries and Obligations. At the Closing, Seller
shall deliver the following to Buyer:
(a) Deed. The Deed and the General Instrument of
transfer, in form reasonably satisfactory to Buyer's
and Seller's counsel, duly executed and acknowledged,
which together convey the Property to Buyer, subject
only to Permitted Exceptions.
(b) Assignment of Leases and Security Deposits. An
assignment of the Leases and Security Deposits in
form reasonably satisfactory to Buyer's and Seller's
counsel.
(c) Lease Records. Original copies of all Leases, and
related documents in the possession or under the
control of Seller. Such records shall include a
schedule of all cash security deposits and a check or
credit to Buyer in the amount of such security
deposits held by Seller at the Closing under the
Leases together with appropriate instruments of
transfer or assignment with respect to any lease
securities which are other than cash and a schedule
updating the Rent Roll and setting forth all arrears
in rents and all prepayments of rents.
(d) Permits. Seller shall deliver, to the extent in the
possession of Seller: original copies of all
certificates, licenses, permits, authorizations and
approvals issued for or with respect to the Property
by governmental authorities having jurisdiction,
except that photocopies may be substituted if the
originals are posted at the Property.
(e) Service Contracts. An assignment of the Assumed
Service Contracts, in form reasonably satisfactory to
Buyer's and Seller's counsel, together with all
Assumed Service Contracts in Seller's possession or
control which are in effect at the Closing.
(f) Title Affidavits. Such affidavits as the Title
Insurer may reasonably require in order to omit from
its title insurance policy all exceptions for (i)
parties in possession other than under the rights to
possession granted under the Leases; and
(ii)mechanics' liens.
(g) Files. Seller shall make all of its tiles and records
relating to the Property available to Buyer at the
Property upon reasonable prior notice for copying,
which obligation shall survive the Closing.
(h) Notices of Sales. Sufficient letters, executed by
Seller, advising the tenants under the Leases of the
sale of the Property to Buyer and directing that all
rents and other payments thereafter becoming due
under the Leases be sent to Buyer or as Buyer may
direct.
(i) Non-Foreign Affidavit. Seller shall execute and
deliver to Buyer and Buyer's counsel, at Closing such
evidence as may be reasonably requires by Buyer to
show compliance by Seller with the Foreign Investment
and Real Property Tax Act, IRC Section 1445(b)(2), as
amended.
9.02 Seller's Expenses. Seller shall pay its own counsel fees and
one-half of: (i) transfer taxes and documentary stamps, (ii)
Title Insurance costs, (iii) Survey costs, (iv) escrow and
recording fees, and (v) all other customary closing costs in
transactions of this nature in Evansville, Indiana.
SECTION 10
BUYER'S CLOSING OBLIGATIONS
At the Closing, Buyer shall:
10.01 Payment of Purchase Price. Deliver to Seller the Purchase Price,
as adjusted for (i) apportionments under Section 11, and (ii)
any adjustments thereto required pursuant to the express
provisions this Agreement.
10.02 Assumption. Deliver to Seller assumption agreements signed by
Buyer with respect to the performance by Buyer of the landlords
obligations under the Leases, Security Deposits and the Assumed
Service Contracts, in each case in respect of the period from
and after the Closing.
10.03 Recording Deed. Cause the Deed to be recorded.
10.04 Other Documents. Deliver any other documents required by this
Agreement to be delivered by Buyer.
10.05 Buyer's Expenses. Pay its own counsel fees and one half of: (i)
transfer taxes and documentary stamps, (ii) Title Insurance
costs, (iii) Survey costs, (iii) escrow and recording fees, and
(v) all other customary closing costs in transactions of this
nature in Evansville, Indiana.
SECTION 11
APPORTIONMENTS AND ADJUSTMENTS TO PURCHASE PRICE
11.01 Apportionments. The following apportionments shall be made
between the parties at the Closing as of the close of the
business day prior to the Closing:
(a) prepaid and collected rent;
(b) security deposits;
(c) inasmuch as all current employees of the Property are the
employees of Seller's management agent, Buyer shall have no
liability for, and there shall be no adjustment for payment
of, wages, vacation pay, pension and welfare benefits and
other fringe benefits of any persons employed at the
Property;
(d) real estate and personal property taxes, water charges,
sewer rents and vault charges, if any, on the basis of the
fiscal period for which assessed, except that if there is a
water meter on the Property, apportionment at the Closing
shall be based on the last available reading, subject to
adjustment after the Closing on a per diem basis, when the
next reading is available;
(e) Seller shall receive a credit for utility deposits for any
utility accounts which are transferred to Buyer;
(f) charges or prepayments under transferable Service
Contracts;
(g) all other income and expenses relating to the Property.
If the Closing shall occur before a new tax rate is fixed, the
apportionment of taxes at the Closing shall be upon the basis of the old
tax rate for the preceding period applied to the latest assessed
valuation. Promptly after the new tax rate is fixed, the
apportionment of taxes shall be recomputed. Any discrepancy resulting from
such recomputation and any errors or omissions in computing apportionments
at the Closing shall be promptly corrected, which obligation shall survive
the Closing.
11.02 Application of Rent Payments. If any tenant is in arrears in
the payment of rent at the Closing, rents received from such
tenant within thirty (30) days after the Closing shall be
applied in the following order of priority: (a) first to the
month in which the Closing occurred, (b) then to the period
prior to the month in which the Closing occurred, and (c) then
to any month or months following the month in which the Closing
occurred. If rents or any portion thereof received by Seller or
Buyer after the Closing are payable to the other party by reason
of this allocation, the appropriate sum shall be paid to the
other party within thirty (30) days from the receipt thereof,
which obligation shall survive the Closing. Thereafter, Seller
shall be entitled to attempt to collect directly from tenants
any rents which were due Seller prior to Closing, but Buyer
shall have no further obligations with respect thereto.
SECTION 12
FAILURE TO PERFORM
12.01 Buyer's Election. If Seller is unable to give title or to make
conveyance, or to satisfy all of Seller's closing obligations as
set forth in this Agreement, Buyer shall notify Seller in
writing on or prior to Closing specifying in detail the nature
of Seller's default. Seller, in its sole discretion, may, but
shall not be obligated to, extend the Closing for a period not
to exceed thirty (30) days during which period Seller may
attempt to cure any such default described in Buyer's notice. If
either Seller elects, in its sole discretion, not to attempt to
cure such default or Seller extends the Closing but is unable to
cure such default, Buyer shall have the right to elect, in its
sole discretion, at the Closing or the extended Closing, if
applicable, to accept such title as Seller can deliver to the
Property in its then condition and to pay therefor the Purchase
Price without reduction or offset, in which case Seller shall
convey such title for such price.
12.02 Seller's Default. If at the Closing, Seller is unable to give
title or to make conveyance, or to satisfy all of Seller's
obligations as set forth in this Agreement, and Buyer does not
elect to take title as provided in Section 12.01, Seller shall
be in default under this Agreement and all Deposits made
hereunder shall be forthwith returned to Buyer. In addition to
the foregoing, if Buyer desires to purchase the Property in
accordance with the terms of
this Agreement and Seller refuses to perform Seller's
obligations hereunder, Buyer, at its option, and as Buyers sole
and exclusive remedy, shall have the right to compel specific
performance by Seller hereunder in which event any deposit made
hereunder shall be credited against the Purchase Price.
12.03 Buyer's Default. The parties acknowledge that in the event of
Buyer's failure to fulfill its obligations hereunder it is
impossible to compute exactly the damages which would accrue to
the Seller in such event. The parties have taken these facts
into account in setting the amount of the Deposit, required
pursuant to Section 2.04, for Fifty Thousand Dollars
($50,000.00) and hereby agree that: (i) such amount together
with the interest earned thereon is the pre-estimate of such
damages which would accrue to Seller; (ii) such amount
represents damages and not any penalty against Buyer; and (iii)
if this Agreement shall be terminated by Seller by reason of
Buyer's failure to fulfill Buyer's obligations hereunder, the
Deposit together with the interest thereon shall be Seller's
full and liquidated damages and shall be Seller's sole and
exclusive remedy in lieu of all other rights and remedies which
Seller may have against Buyer at law or in equity.
SECTION 13
BROKERAGE AND FINANCING FEES
13.01 Brokerage Fees. Seller and Buyer mutually represent and warrant
that Newcomb Realty and Investments ("Broker") is the only
broker with whom they have dealt in connection with this
purchase and sale and that neither Seller nor Buyer knows of any
other broker who has claimed or may have the right to claim a
commission in connection with this purchase and sale. The
commission of the Broker in the sum of Sixty-Seven Thousand Five
Hundred Dollars ($67,500.00} shall be paid by the Seller, but
Seller shall be obligated to pay such commission only if, as and
when the Deed is recorded. In any event, Buyer shall have no
obligation to pay a brokerage commission to Broker or any other
broker. Seller and Buyer shall indemnify and defend each other
against any costs, claims or expenses, including attorneys'
arising out of the breach on their respective parts of any
representations, warranties or agreements contained in this
Section. The representations and obligations under this Section
shall survive the Closing or, if the Closing does not occur, the
termination of this Agreement.
13.02 Financing Fees. Buyer shall pay any and all commitment fees
required by Buyer's lender in connection with the financing by
Buyer of the purchase of the Property. In addition, Buyer shall
pay all other fees and expenses required by Buyer's lender in
connection with the obtaining of the financing of the Property.
SECTION 14
NOTICES
14.01 Effective Notices. All notices under this Agreement shall be in
writing and shall be delivered personally or shall be sent by
Federal Express or other comparable overnight delivery courier,
addressed as set forth at the beginning of this Agreement or by
telecopier to the telecopier number as set forth at the
beginning of this Agreement. Notices shall be deemed effective,
when so delivered. Copies of all such notices to Buyer shall be
sent to Allison K. Comstock, Esq., Law Office of Jeffrey A.
Bosse, 522 Main Street, Evansville, Indiana 47708, Telecopier
No. 812-421-4077 and copies of all such notices to Seller shall
be sent to Joel H. Sirkin, Esquire, Hale and Dorr, 60 State
Street, Boston, Massachusetts 02109, Telecopier No.
617-526-5000.
SECTION 15
LIMITATIONS ON SURVIVAL
15.01 Representations and Warranties. Except as otherwise expressly
provided in this Agreement, no representations, warranties,
covenants or other obligations of Seller set forth in this
Agreement shall survive the Closing, and no action based thereon
shall be commenced after Closing. The representations,
warranties, covenants and other obligations of Seller set forth
in Section 5 shall survive until one hundred twenty (120) days
after the Closing, and no action based thereon shall be
commenced more than one hundred twenty (120) days after the
Closing.
15.02 Merger. The delivery of the Deed by Seller, and the acceptance
and recording thereof by Buyer, shall be deemed the full
performance and discharge of each and every obligation on the
part of Seller to be performed hereunder and shall be merged in
the delivery and acceptance of the Deed, except as provided in
Section 15.01 and except for such other obligations of Seller
which are expressly provided herein to survive the Closing.
SECTION 16
CONDITIONS
16.01 Inspection Condition. It shall be a condition of this Agreement
that on or before February 21, 1996 (the "Inspection Period"),
Buyer shall have approved in its sole discretion, (i) the
matters set forth in Section 4; (ii) all zoning, building code
and other governmental laws, ordinances, rules, regulations,
rulings and decision applicable to the Property; (iii) an
appraisal of the Property; (iv) an engineering and physical
inspection of the Property; and (v) an inspection of the
financial books and records relating to all income and expenses
of the Property. In the conduct of its inspection of the
Property, Buyer shall not unreasonably interfere with the
operation of the Property or the occupancy of the tenants. To
the extent any of the inspections disrupt the condition of the
Property, Buyer shall restore the Property to its prior
condition thereafter and Buyer shall indemnify Seller against
any loss or damage to person or property arising from the
conduct of Buyer's inspection of the Property. The foregoing
provisions of this Agreement shall survive the Closing or any
termination of this Agreement.
In the event that Buyer deems any inspection matter unacceptable
to Buyer, in Buyer's sole discretion, Buyer shall be entitled to
terminate this Agreement by written notice given to Seller on or
before the expiration of the Inspection Period, at which time,
the Deposit together with the interest thereon shall be promptly
returned to Buyer, and, thereafter this Agreement shall be void
and without recourse to either party except for provisions which
are expressly stated to survive termination of this Agreement.
In the event Buyer does not so timely deliver written notice of
termination prior to the expiration of the Inspection Period,
then the foregoing Inspection Condition set forth in Section
16.01 shall automatically be deemed waived by Buyer and
satisfied in full. In the event Buyer timely elects to terminate
this Agreement during the Inspection Period as permitted above,
and as additional consideration for Seller granting Buyer the
foregoing condition precedent, Buyer shall deliver to Seller
with Buyer's notice of termination copies of all studies,
surveys, plans, investigations and reports obtained by or
prepared by Buyer in connection with Buyer's inspection of the
Property. Buyer makes no warranty or representation as to the
accuracy of any information contained in such documents.
16.02 Environmental Condition. It shall be a condition of this
Agreement that on or before March 22, 1996 (the "Environmental
Inspection Period"), Buyer shall have obtained, at Buyer's
expense, and approved, in its sole discretion, a report (the
"Environmental Survey") prepared by a qualified consultant
selected by Buyer ("Buyer's Consultant") and addressed to Buyer
concerning the presence of any (i) contamination of the Property
by Hazardous Materials (as defined in Section 6.01); (ii)
apparent violation of Environmental Laws (as defined in Section
6.01); upon or associated with activities upon the Property; or
(iii) potential incurrence of Environmental Damages (as
hereinafter defined) by the owners or operators of the Property
(collectively "Environmental Exceptions"). The Environmental
Survey may be performed at any time or times, except that entry
upon the Property shall be on reasonable notice and under
reasonable conditions established by Seller. Buyer's Consultants
are hereby authorized to enter upon the Property for such
purposes and to perform such testing and take such samples as
may be necessary to conduct the Environmental Survey in the
reasonable opinion of the Buyer's Consultant.
The Environmental Survey shall include, without limitation, the
results of:
(i) a site inspection;
(ii) interviews of present occupants of the
Property;
(iii) a review of public records concerning the
Property and other properties in the
vicinity of the Property; and
(iv) a review of aerial photographs of the
Property and other evidence of historic land
uses.
The Environmental Survey shall include, if determinable by the
Buyer's Consultant, based upon this scope of work, the estimated
cost and period of time required to remediate any Environmental
Exceptions.
The term "Environmental Damages" means all claims, judgments,
damages, losses, penalties, fines, liabilities (including strict
liability), encumbrances, liens, costs and expenses of
investigation and defense of claim, whether or not such claim is
ultimately defeated, and of any good faith settlement or
judgment of whatever kind or nature, contingent or otherwise,
matured or unmatured, foreseeable or unforeseeable, including,
without limitation, reasonable attorney fees and disbursements
and consultant fees, any of which are incurred at any time as a
result of the existence of Hazardous Material upon, about, or
beneath the Property or migrating or threatening to migrate to
or from the Property, or the existence of a violation of
Environmental Laws pertaining to the Property regardless of
whether the existence of such Hazardous Material or the
violation of Environmental Laws arose prior to the present
ownership or operation of the Property.
If the Environmental Survey requires or recommends an additional
Environmental Survey, such Additional Survey may be promptly
performed at Buyer's expense, if Buyer so elects.
To the extent any of the inspections disrupt the condition of
the Property, Buyer shall restore the Property to its prior
condition thereafter and Buyer shall indemnify Seller against
any loss or damage to person or property arising from the
conduct of Buyer's inspection of the Property. The foregoing
provisions of this Agreement shall survive the Closing or any
termination of this Agreement.
In the event that Buyer deems any matter disclosed by the
Environmental Survey unacceptable to Buyer, in Buyer's sole
discretion, Buyer shall be entitled to terminate this Agreement
by written notice given to Seller on or before the expiration of
the Environmental Inspection Period, at which time, the Deposit
together with the interest thereon shall be promptly returned to
Buyer, and, thereafter this Agreement shall be void and without
recourse to either party except for provisions which are
expressly stated to survive termination of this Agreement. In
the event Buyer does not so timely deliver written notice of
termination prior to the expiration of the Environmental
Inspection Period, then the foregoing Environmental Condition
set forth in Section 16.02 shall automatically be deemed waived
by Buyer and satisfied in full. In the event Buyer timely elects
to terminate this Agreement during the Inspection Period as
permitted above, and as additional consideration for Seller
granting Buyer the foregoing condition precedent, Buyer shall
deliver to Seller with Buyer's notice of termination copies of
all environmental surveys obtained by or prepared by Buyer in
connection with Buyer's inspection of the Property. Buyer makes
no warranty or representation as to the accuracy of any
information contained in such documents.
16.03 Financing Condition. If Buyer does not terminate this Agreement
pursuant to either Section 16.01 or 16.02, Buyer shall be deemed
to have approved the inspection matters described in Section
16.01
and the environmental matters described in Section 16.02 and it
shall be a condition of this Agreement that on or before March
22, 1996 (the Financing Period"), Buyer shall have obtained a
financing commitment (the "Financing Commitment") for a loan in
an amount and on such other terms as are acceptable to Buyer in
connection with the purchase of the Property. Buyer shall use
diligent efforts to apply for and obtain the Financing
Commitment. In the event Buyer does not obtain the Financing
Commitment, Buyer shall be entitled to terminate this Agreement
by written notice given to Seller on or before the expiration of
the Financing Period, at which time the Deposit shall be
promptly returned to Buyer, and thereafter this Agreement shall
be void and without recourse to either party except for
provisions which are expressly stated to survive termination of
this Agreement. In the event Buyer does not so timely deliver
written notice of termination prior to the expiration of the
Financing Period, then the foregoing Financing Condition shall
automatically be deemed waived by Buyer and satisfied in full.
SECTION 17
MISCELLANEOUS PROVISIONS
17.01 Assignment. Buyer shall be entitled to assign this Agreement and
its rights hereunder to a corporation, general partnership,
limited partnership or other lawful entity entitled to do
business in the state in which the Property is located provided
such corporation or partnership, shall be controlled,
controlling or under the common control with Buyer ("Assignee").
In the event of such an assignment of this Agreement to Assignee
(a) Buyer shall notify Seller promptly (b) Buyer shall not be
released from liability under this Agreement and from and after
such assignment, Buyer and Assignee shall be jointly and
severally liable hereunder, (c) Assignee shall assume all
obligations of Buyer under this Agreement and (d) from and after
any such assignment the term "Buyer" shall be deemed to mean the
Assignee under any such assignment.
17.02 Limitation of Liability. No shareholders of Seller, nor any of
its respective officers, directors, agents, employees, heirs,
successors or assigns shall have any personal liability of any
kind or nature for or by reason of any matter or thing
whatsoever under. in connection with, arising out of or in any
way related to this Agreement and the transactions contemplated
herein, and Buyer hereby waives for itself and anyone who may
claim by, through or under Buyer any and all rights to sue or
recover on account of any such alleged personal liability.
No shareholders of Buyer, nor any of its respective officers,
directors, agents, employees, heirs, successors or assigns shall
have any personal liability of any kind or nature for or by
reason of any matter or thing whatsoever under, in connection
with, arising out of or in any way related to this Agreement and
the transactions contemplated herein, and Seller hereby waives
for itself and anyone who may claim by, through or under Seller
any and all rights to sue or recover on account of any such
alleged personal liability.
17.03 Integration. This Agreement embodies and constitutes the entire
understanding between the parties with respect to the
transaction contemplated herein, and all prior agreements,
understandings, representations and statements, oral or written,
are merged into this Agreement. Neither this Agreement nor any
provision hereof may be waived. modified, amended, discharged or
terminated except by an instrument signed by the party against
whom the enforcement of such waiver, modification, amendment,
discharge or termination is sought, and then only to the extent
set forth in such instrument.
17.04 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the state in which the Property
is located.
17.05 Captions. The captions in this Agreement are inserted for
convenience of reference only and in no way define, describe or
limit the scope or intent of this Agreement or any of the
provisions hereof.
17.06 Bind and Inure. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective
successors and assigns.
17.07 Drafts. This Agreement shall not be binding or effective until
properly executed and delivered by both Seller and Buyer. The
delivery by Buyer to Seller of an executed counterpart of this
Agreement shall constitute an offer which may be accepted by the
delivery to Buyer of a duly executed counterpart of this
Agreement and the satisfaction of all conditions under which
such offer is made. but such offer may be revoked by Buyer by
written notice given at any time prior to such acceptance and
satisfaction.
17.08 Number and Gender. As used in this Agreement, the masculine
shall include the feminine and neuter, the singular shall
include the plural and the plural shall include the singular, as
the context may require.
17.09 Attachments. If the provisions of any schedule or rider to this
Agreement are inconsistent with the provisions of this
Agreement. the provisions of such schedule or rider shall
prevail. Schedules A, B, C and D, attached are hereby
incorporated as integral Parts of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this agreement
under seal as of the date first above written.
WITNESS: SELLER:
KRUPP ASSOCIATES RIVERSIDE LIMITED
PARTNERSHIP, an Indiana limited partnership
By: The Krupp Corporation
General Partner a Massachusetts
corporation
Maureen Clougher By: David J. Olney
Authorized Agent
BUYER:
BLUSKY, INC.
Allison K. Comstock By: Robert Brenner
Its: President
The undersigned Broker joins in the execution of this Agreement to
acknowledge and agree to the terms of Section 13.01 hereof.
WITNESS: BROKER:
NEWCOMB REALTY AND INVESTMENTS
Allison K. Comstock By: Kenneth Newcomb
Its: Owner
RECEIPT
The Purchase and Sale Agreement, together with Buyer's Deposit, has been
received by the Escrow Agent on this the 22nd day of January, 1996, and
the Escrow Agent acknowledges the terms thereof and agrees to perform as
Escrow Agent in accordance therewith.
ESCROW AGENT
By:Jeffrey A. Bosse