AGREEMENT OF SALE
THIS AGREEMENT is entered into as of the 20th day of May, 1996, by and
between NEW PLAN REALTY TRUST, a Massachusetts business trust ("Purchaser") and
HAWTHORNE HEIGHTS LIMITED PARTNERSHIP, an Illinois Limited Partnership
("Seller").
WITNESSETH:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to
sell at the price of Eight Million Three Hundred Thousand and No/100 Dollars
($8,300,000.00) ("Purchase Price"), that certain property ("Property") in
Indianapolis, Indiana, more particularly described on Exhibit A attached
hereto, which Property is known as Hawthorne Heights Apartments, including all
easements, tenements, hereditaments, rights, licenses, privileges and
appurtenances, whether or not of record, in any way belonging or relating
thereto and all mineral, oil, gas and other hydrocarbon substances on or under
the land and all development, air, water and other rights in any way belonging
or relating to the land or the improvements thereon, all right, title and
interest in and to any streets, roads, alleys or other public ways adjoining or
serving the land, including any land lying in the bed of any street, road,
alley or other public way, open or proposed, and any strips, gores, culverts
and rights-of-way adjoining or serving the land (including all riparian and
other rights in and to submerged lands). Included in the Purchase Price is all
of the personal property owned by Seller and used in connection with or located
on the Property, including but not limited to all lease files and copies of all
books, records and other files which are used in connection with the ownership
or operation of the Property and the personal property which is set forth on
Exhibit B, which shall be transferred to Purchaser at Closing (as hereinafter
defined) by a Bill of Sale.
2. PURCHASE PRICE. The Purchase Price shall be paid as follows:
a. Upon the execution of this Agreement, the sum of $250,000.00
("Earnest Money") to be held in escrow by the Escrow Agent (as that term
is defined in the Escrow Agreement), by and in accordance with the
provisions of the Escrow Agreement ("Escrow Agreement") attached hereto as
Exhibit C;
b. On the Closing Date (as hereinafter defined), $8,300,000.00
(inclusive of all Earnest Money) adjusted in accordance with the
prorations by federally wired "immediately available" funds delivered to
the Title Insurer (as hereinafter defined) no later than 1:00 P.M. Central
Time on the Closing Date. If the funds are not received by the Title
Insurer by 1:00 P.M. Central Time, then $2,000.00 shall be added to the
cash due at Closing.
3. TITLE COMMITMENT AND SURVEY.
a. Attached hereto as Exhibit D is a title commitment dated March
20, 1996 ("Title Commitment") for an owner's standard coverage title insurance
policy 1992 Form B ("Title Policy") issued by Lawyers Title Insurance Company
("Title Insurer"). The owner's Title Policy issued at Closing will be in the
amount of the Purchase Price subject only to real estate taxes not yet due and
payable, and the special title exceptions set forth in Schedule B-Section 2,
Numbers 7 through 10 and 12 of the Title Commitment. Exceptions 7 through 10
and 12 are hereinafter referred to as the "Permitted Exceptions". The Title
Commitment shall be conclusive evidence of good title as therein shown as to
all matters insured by the policy, subject only to the exceptions therein
stated. On the Closing Date, Seller shall cause the Title Insurer to issue the
Title Policy or a "marked up" commitment in favor of Purchaser containing only
the Permitted Exceptions and the "extended coverage", and the special
endorsements requested by Purchaser. Seller shall pay the costs of the Title
Policy; however, Purchaser shall pay the costs of "extended coverage" or any
special endorsements which Purchaser requires.
b. Purchaser acknowledges receipt of a survey ("Survey") of the
Property prepared by MSE Surveying dated April 12, 1996. Prior to the Closing,
Seller will have the Survey certified to the Purchaser. However, if Purchaser
requires any additional survey work, Purchaser shall pay for the cost of such
additional work.
4. CONDITION OF TITLE/CONVEYANCE. Seller agrees to convey fee simple
title to the Property by Special Warranty Deed ("Deed") in recordable form
subject only to the Permitted Exceptions. If Seller is unable to convey title
to the Property subject only to the Permitted Exceptions because of the
existence of an additional title exception ("Unpermitted Exception"), then
Seller shall make all reasonable efforts to remove the Unpermitted Exception
and shall remove any Unpermitted Exception caused by Seller subsequent to March
20, 1996 with the intention to prevent the consummation of this Agreement. If
Seller is unable to remove the Unpermitted Exception, then Seller shall so
notify Purchaser and Purchaser can elect to take title to the Property subject
to the Unpermitted Exception or terminate this Agreement. If Purchaser elects
to terminate this Agreement, then the Earnest Money plus all accrued interest
shall be delivered to the Purchaser and, subject to the survival provisions of
Paragraph herein, neither party shall have any further liability hereunder.
Notwithstanding the aforesaid, Seller shall be obligated to remove all liens
which are of a definite or ascertainable amount.
5. PAYMENT OF CLOSING COSTS. Purchaser and Seller shall equally share
the costs of the recording of the Deed.
6. DAMAGE, CASUALTY AND CONDEMNATION.
a. If the Property suffers damage as a result of any casualty prior
to the Closing Date and can be repaired or restored in the case of real
property for $200,000.00 or less, or in the case of Personal Property, for
$10,000.00 or less, Purchaser shall proceed with the Closing and accept the
Property in its damaged condition together with an assignment from Seller of
all insurance proceeds and receive a credit at Closing in the amount of the
deductible. In such event, Purchaser shall have the right to negotiate the
settlement of the insurance claim with the insurance carrier. Seller shall
execute whatever documents are reasonably required in order to enable Purchaser
to conduct those negotiations. If the cost of repair or restoration exceeds
those amounts, then Purchaser, upon notice to Seller served within twenty (20)
days of receipt of notice from Seller of the casualty, can elect to either:
(a) terminate this Agreement or (b) accept the Property in its damaged
condition together with an assignment from Seller of all insurance proceeds and
receive a credit at Closing in the amount of the deductible. In such event,
Purchaser shall have the right to negotiate the settlement of the insurance
claim with the insurance carrier and Seller shall execute whatever documents
are reasonably required in order to enable Purchaser to conduct those
negotiations. If Purchaser has not given its notice prior to the Closing Date
because the twenty (20) day period has not expired, then the Closing Date shall
be extended until one (1) business day after Purchaser is required to give its
notice.
b. If condemnation proceedings ("Proceedings") are instituted
against the Property, or if Seller receives notice that Proceedings are going
to be commenced, then Purchaser can elect to either take the Property subject
to the Proceedings and receive from Seller an assignment of Seller's interest
in the Proceedings and any award pursuant to the Proceedings or terminate this
Agreement. If Purchaser elects to terminate this Agreement, it shall be by
notice to the Seller within five (5) days after Seller notifies Purchaser of
the Proceedings.
c. If the Agreement is terminated pursuant to this Paragraph, then
the Earnest Money plus all accrued interest shall be delivered to the
Purchaser.
7. AS-IS CONDITION.
a. Seller acquired title to the Property by virtue of a deed in
lieu of foreclosure, and therefore, except as may otherwise be specifically set
forth elsewhere in this Agreement, Seller cannot make any representations as to
the condition of the Property upon which Purchaser can rely. Any information
which Seller has as to the leases is based solely upon information which Seller
obtained subsequent to its acquisition of the Property. Purchaser is not
relying on Seller having made any inquiry as to the condition of the Property
or the leases. Purchaser acknowledges and agrees that it will be purchasing
the Property based solely upon its inspection and investigations of the
Property and that, except as may otherwise be specifically set forth elsewhere
in this Agreement, Purchaser 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 (subject to Paragraph )
by fire or other casualty or condemnation from the date of this Agreement until
the Closing Date. Without limiting the foregoing, Purchaser acknowledges that,
except as may otherwise be specifically set forth elsewhere in this Agreement,
neither Seller nor its consultants, brokers or agents have made any other
representations or warranties of any kind upon which Purchaser 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, lead in water, lead in paint, radon, underground or above ground
storage tanks, petroleum, toxic waste or any Hazardous Materials or Hazardous
Substances (as such terms are defined below), 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, except as
may be specifically set forth elsewhere in this Agreement, any fire codes or
building codes. Except for the breach of the representation set forth in
Paragraph b.ix., Purchaser hereby releases Seller from any and all liability in
connection with any claims which Purchaser may have against Seller, and except
for the breach of the representation set forth in Paragraph b.ix., Purchaser
hereby agrees not to assert any claims, for damage, loss, compensation,
contribution, cost recovery or otherwise, against Seller, whether in tort,
contract, or otherwise, relating directly or indirectly to the existence of
asbestos or Hazardous Materials or Hazardous Substances on, or environmental
conditions of, the Property, or arising under the Environmental Laws (as such
term is hereinafter defined), or relating in any way to the quality of the
indoor or outdoor environment at the Property. This release shall survive the
Closing. As used herein, the term "Hazardous Materials" or "Hazardous
Substances" means (i) hazardous wastes, hazardous materials, 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 materials," "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. Section 9601 et seq.; the Toxic Substance
Control Act ("TSCA"), 15 U.S.C. Section 2601 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1802; the Emergency Planning and
Community Right-to-Know Act, 42 U.S.C. Section 1101 et seq.; the Atomic Energy
Act ("AEA"), 42 U.S.C. Section 2011 et seq.; the Resource Conservation and
Recovery Act ("RCRA"), 42 U.S.C. Section 9601, et seq.; the Clean Water Act
("CWA"), 33 U.S.C. Section 1251 et seq.; the Safe Drinking Water Act, 42 U.S.C.
Section 300f et seq.; the Clean Air Act ("CAA"), 42 U.S.C. Section 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,
(E) asbestos, (F) lead in water, paint or elsewhere, (G) radon,
(H) Polychlorinated Biphenyls (PCB's) and (I) ureaformaldehyde.
b. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Except as may be specifically set
forth elsewhere in this Agreement, Seller makes no representation or warranty
that such material is complete or accurate or that Purchaser will achieve
similar financial or other results with respect to the operations of the
Property, it being acknowledged by Purchaser that Seller's operation of the
Property and allocations of revenues or expenses may be vastly different than
Purchaser may be able to attain. Purchaser acknowledges that it is a
sophisticated and experienced purchaser of real estate and further that
Purchaser has relied upon its own investigation and inquiry with respect to the
operation of the Property and, except as may be specifically set forth
elsewhere in this Agreement, releases Seller from any liability with respect to
such historical financial information.
8. CLOSING. The closing ("Closing") of this transaction shall be on
June 18, 1996 ("Closing Date"), at the office of the Seller's attorney, at
which time Seller shall deliver possession of the Property to Purchaser. The
Closing Date may be extended by Purchaser for two days because of a "force
majeure". The Closing Date is also subject to extension pursuant to Paragraph
and of this Agreement.
9. CLOSING DOCUMENTS.
a. On the Closing Date, Purchaser shall deliver to Seller an
executed closing statement and to the Title Insurer the balance of the Purchase
Price, and such other documents as may be reasonably required by the Title
Insurer in order to consummate the transaction as set forth in this Agreement.
b. On the Closing Date, Seller shall deliver to Purchaser
possession of the Property; the Deed (in the form of Exhibit E attached hereto)
subject to the Permitted Exceptions and those Unpermitted Exceptions waived by
Purchaser; an inventory of the Personal Property and a Bill of Sale for the
same (in the form of Exhibit F attached hereto); an executed closing statement;
an executed assignment and assumption of all service contracts (in the form of
Exhibit G attached hereto); an executed assignment and assumption of all leases
and security deposits (in the form of Exhibit H attached hereto); the tenant
leases which shall be available at the Property; all assignable licenses and
permits relating to the use, occupancy or operation of the Property, together
with an assignment thereof (in the form of Exhibit I attached hereto); updated
Rent Roll (as hereinafter defined) with a list attached of all tenant
concessions and allowances and rental commissions owed; a notice to the tenants
of the transfer of title and the assumption by Purchaser of the landlord's
obligations under the leases and the obligation to refund the security deposits
which have been assigned or credited to Purchaser (in the form of Exhibit J
attached hereto); a non-foreign affidavit (in the form of Exhibit K attached
hereto); an assignment of intangibles (in the form of Exhibit L attached
hereto); a copy of the notice terminating the management agreement effective as
of the Closing Date; and such other documents as may be reasonably required by
the Title Insurer in order to consummate the transaction as set forth in this
Agreement.
10. DEFAULT BY PURCHASER. ALL EARNEST MONEY DEPOSITED INTO THE ESCROW IS
TO SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND
UNDERTAKINGS UNDER THIS AGREEMENT. IN THE EVENT OF ANY DEFAULT OF THE
PURCHASER UNDER THE PROVISIONS OF THIS AGREEMENT, SELLER SHALL RETAIN ALL OF
THE EARNEST MONEY AND THE INTEREST THEREON AS SELLER'S SOLE AND EXCLUSIVE RIGHT
TO DAMAGES OR ANY OTHER REMEDY. THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL
DAMAGES, IN THE EVENT OF A DEFAULT BY PURCHASER, WOULD BE EXTREMELY DIFFICULT
OR IMPRACTICAL TO DETERMINE. THEREFORE, BY PLACING THEIR INITIALS BELOW, THE
PARTIES ACKNOWLEDGE THAT THE EARNEST MONEY HAS BEEN AGREED UPON, AFTER
NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES.
11. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF ALL EARNEST MONEY
TOGETHER WITH ANY INTEREST ACCRUED THEREON PLUS THE RIGHT TO RECOVER THIRD
PARTY EXPENSES IN AN AMOUNT NOT TO EXCEED $100,000.00, AND THIS AGREEMENT SHALL
TERMINATE AND THE PARTIES SHALL HAVE NO FURTHER LIABILITY TO EACH OTHER AT LAW
OR IN EQUITY. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF
SELLER'S DEFAULT IS ITS REFUSAL TO DELIVER THE DEED AND THE DOCUMENTS WHICH
SELLER IS REQUIRED TO DELIVER AT CLOSING, THEN PURCHASER WILL BE ENTITLED TO
SUE FOR SPECIFIC PERFORMANCE OR ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF
$250,000.00. THE PARTIES AGREE THAT PURCHASER'S ACTUAL DAMAGES IN THE EVENT OF
A SELLER'S REFUSAL TO DELIVER THE DEED AND THE DOCUMENTS WOULD BE EXTREMELY
DIFFICULT OR IMPRACTICAL TO DETERMINE. THEREFORE, BY PLACING THEIR INITIALS
BELOW, THE PARTIES ACKNOWLEDGE THAT $250,000.00 HAS BEEN AGREED UPON, AFTER
NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF PURCHASER'S DAMAGES.
12. a. PRORATIONS. Rents (exclusive of delinquent rents, but including
prepaid rents) and other income; refundable security and other deposits (which
will be assigned to and assumed by Purchaser and a check in the amount of the
security and other deposits will be given to Purchaser at Closing); water and
other utility charges; fuels; prepaid and unpaid operating expenses; real and
personal property taxes with 1996 taxes payable in 1997 prorated on 102% of the
1995 taxes which are payable in 1996; and other similar items shall be adjusted
ratably as of 11:59 P.M. on the day preceding the Closing Date ("Proration
Date"), and credited or debited to the balance of the cash due at Closing.
Tenant allowances and concessions and unpaid leasing commissions for leases
entered into prior to the Closing Date will be adjusted and prorated so as to
provide that Seller is responsible for all such matters. If the amount of any
of the items to be prorated is not then ascertainable, the adjustment thereof
shall be on the basis of the most recent ascertainable data. All prorations
will be final except as to Delinquent Rents referred to in b below. If special
assessments have been levied against the Property for completed improvements,
then they shall be paid by the Seller whether the bills are payable prior to or
after the Closing Date. All assessments first coming due after the Closing for
incomplete improvements shall be paid by Purchaser.
b. DELINQUENT RENTS. If, as of the Closing Date, any rent is in
arrears ("Delinquent Rent") for the calendar month in which the Closing occurs,
then Seller's prorata share of such Delinquent Rent collected during the month
of Closing will be delivered to Seller. If any Delinquent Rent is collected by
either Purchaser or Seller after the month in which the Closing occurs, then
such rents so collected shall first be applied to current rent and then to
Delinquent Rent in the inverse order of its maturity. Purchaser and Seller
shall deliver to the other party its pro rata share within 10 days of
Purchaser's receipt of that Delinquent Rent. This subparagraph of this
Agreement shall survive the Closing and the delivery and recording of the Deed.
13. RECORDING. This Agreement shall not be recorded and the act of
recording by Purchaser shall be an act of default hereunder by Purchaser and
shall be subject to the provisions of Paragraph 10.
14. ASSIGNMENT. The Purchaser shall not have the right to assign its
interest in this Agreement without the prior written consent of the Seller.
Any assignment or transfer of, or attempt to assign or transfer, Purchaser's
interest in this Agreement shall be an act of default hereunder by Purchaser
and subject to the provisions of Paragraph . Seller hereby consents to an
assignment to any corporation which is a wholly owned subsidiary of Purchaser,
provided such assignment is effected at least ten (10) days prior to the
Closing Date. However, Purchaser shall remain liable for all of the
Purchaser's obligations and undertakings set forth in this Agreement and the
exhibits attached hereto.
15. BROKER. The parties hereto acknowledge that CB Commercial Real
Estate Group, Inc. ("Broker") is the only real estate broker involved in this
transaction. Seller agrees to pay Broker a commission or fee ("Fee") pursuant
to a listing agreement between Seller and Broker. However, this Fee is due and
payable only from the proceeds of the Purchase Price received by Seller.
Purchaser agrees to indemnify, defend and hold harmless the Seller and any
partner, affiliate, parent of Seller, and all shareholders, employees, officers
and directors of Seller or Seller's partner, parent or affiliate (each of the
above is individually referred to as a "Seller Indemnitee") from all claims,
including attorneys' fees and costs incurred by a Seller Indemnitee as a result
of anyone's (except Broker) claiming by or through Purchaser any brokerage fee,
commission or compensation on account of this Agreement, its negotiation or the
sale hereby contemplated. Seller agrees to indemnify, defend and hold harmless
the Purchaser and all shareholders, employees, trustees, officers and directors
of Purchaser or Purchaser's parent or affiliate (each of the above is
individually referred to as a "Purchaser Indemnitee") from all claims,
including attorneys' fees and costs incurred by a Purchaser Indemnitee as a
result of anyone's claiming by or through Seller any brokerage fee, commission
or compensation (including the Broker) on account of this Agreement, its
negotiation or the sale hereby contemplated.
16. DOCUMENTS, INSPECTION OF PROPERTY AND APPROVAL PERIOD.
a. Seller has delivered to Purchaser copies of the most recent
available tax bills, rent rolls, insurance premiums, and service contracts
(collectively the "Documents"). All of the Documents and other matters to be
reviewed by Purchaser shall be subject to review by Purchaser by the close of
business (5:00 P.M. Central Daylight Time) on June 11, 1996 ("Approval
Period"). During the Approval Period, upon reasonable notice (which may be
given verbally no later than 24 hours prior thereto unless the law requires
longer notice with respect to inspection of the interior of the apartments) to
the Seller, the Purchaser shall have the right to inspect the Property
including the interior of the apartments and Seller's books and records, leases
and other files pertaining to the Property and the environmental condition of
the Property, during normal business hours. During Purchaser's inspection of
the books and records and other files pertaining to the operation, maintenance
and leasing of the Property, Seller will provide Purchaser with copies of those
documents which are specifically requested by Purchaser. Purchaser agrees to
indemnify, defend, protect and hold Seller harmless from any and all claims for
personal injury and property damage and mechanic lien claims which Seller may
incur or suffer as a result of Purchaser's conducting its inspection and
investigation of the Property including the entry of Purchaser, its employees
or agents and its lender onto the Property, including without limitation,
liability for mechanics' lien claims.
b. Purchaser agrees to defend and hold Seller harmless from any
injuries, damages or claims of any nature whatsoever which Purchaser's
servants, agents or employees may have as a result of Purchaser's inspection of
the Property. Purchaser further agrees to restore any damage to the Property
which may arise as a result of Purchaser's inspection of the Property.
c. On or prior to the expiration of the Approval Period, Purchaser
shall have the right to terminate this Agreement for any reason or no reason in
Purchaser's sole and exclusive discretion by serving a notice ("Notice of
Disapproval") delivered to Seller and the Escrow Agent prior to the expiration
of the Approval Period. Upon receipt of the Notice of Disapproval, the Earnest
Money plus the interest accrued thereon shall be returned to the Purchaser and
this Agreement shall be terminated. If Purchaser does not deliver a Notice of
Disapproval to Seller, then it shall be conclusively presumed that Purchaser
has waived its right to terminate this Agreement with respect to the provisions
of this Paragraph 16.
17. SELLER'S RIGHT TO CURE.
a. If on or prior to the Closing Date, Deborah Hartigan, Steve
Siegel or Tom Farrell discover that any representation or warranty of Seller is
untrue in any material respect or that Seller is in default under this
Agreement or that Seller has failed to perform a required covenant
(individually or collectively, a "Breach"), then Purchaser may waive such
Breach or give Seller notice of such Breach. Upon receipt of notice from
Purchaser, Seller shall have ten (10) days in order to cure such Breach and, if
necessary, the Closing Date shall be extended until the second business day
after the Breach has been cured. If, after making all reasonable efforts,
Seller is unable to cure the Breach within such ten (10) day period, then
Purchaser shall elect by notice to Seller to either (i) waive the Breach or
(ii) terminate this Agreement, in which case, Purchaser shall have a right to
recover actual third party expenses in an amount not to exceed $100,000.00 as
provided in Paragraph 11 of this Agreement. In the event of termination, all
Earnest Money plus the interest accrued thereon shall be returned to Purchaser.
If Purchaser fails to give Seller notice of a Breach, then Purchaser shall have
waived its rights to assert any claims for such Breach.
b. Notwithstanding anything to the contrary contained in the
Section 17 or elsewhere in this Agreement, it is understood and agreed that to
the extent any representation or warranty made by Seller in this Agreement is
made to the knowledge of Seller or is based on the receipt of notice by Seller,
in the event that Seller first acquires such knowledge or first receives such
notice after the date of this Agreement and as a result thereof, Seller is
unable to reaffirm and restate the accuracy of such representation and
warranty, such failure shall not constitute a default by Seller under this
Agreement, but Purchaser shall nonetheless have the right to either (i) waive
such ability to reaffirm and restate said representation and warranty, or (ii)
terminate this Agreement and receive all Earnest Money plus the interest
accrued thereon (said return of the Earnest Money and interest thereon being
Purchaser's sole remedy in such event).
18. SURVIVAL OF INDEMNITIES. Notwithstanding anything in this Agreement
to the contrary, the parties' obligations to indemnify, defend and hold each
other harmless under various provisions of this Agreement shall survive the
termination of this Agreement or the Closing and delivery and recording of the
Deed.
19. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
a. Any reference herein to Seller's knowledge, or notice of any
matter or thing, shall only mean such knowledge or notice that has actually
been received by Phillip Schechter or Gregg Handrich (the asset manager), and
any representation or warranty of the Seller is based upon those matters of
which Phillip Schechter or Gregg Handrich (the asset manager) has actual
knowledge. Any knowledge or notice given, had or received by any of Seller's
agents, servants or employees (other than Phillip Schechter or Gregg Handrich)
shall not be imputed to Seller or the individual partners or the general
partner of Seller.
b. Subject to the limitations set forth in subparagraph a above,
Seller hereby makes the following representations, warranties and covenants,
all of which are made to the best of Seller's knowledge, and all of which shall
be reaffirmed and restated on and as of the Closing Date subject to Insert 17A
and which shall survive the Closing and delivery of the Deed for a period of
one hundred twenty (120) days:
i. The present use and occupancy of the Property conform with
applicable building and zoning laws, rules and regulations and Seller has
received no written notice that any such laws, rules or regulations are
being violated.
ii. The rent roll ("Rent Roll") attached hereto as Exhibit M is
true and accurate and neither party to the leases is in default thereunder
except as noted on the delinquency report attached to the Rent Roll. An
updated Rent Roll will be delivered at Closing and will be true and
accurate.
iii. There are no pending or threatened litigation, claims,
causes of action or administrative proceedings concerning the Property nor
does Seller have any knowledge for the basis for such litigation, claims,
causes of action or administrative proceedings.
iv. This Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary action on
the part of Seller and, upon the assumption that this Agreement
constitutes a legal, valid and binding obligation of Purchaser, this
Agreement constitutes a legal, valid and binding obligation of Seller.
v. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby by Seller do not and
will not (a) violate or conflict with the organizational documents of
Seller, (b) violate or conflict with any judgment, decree or order of any
court applicable to or affecting Seller, (c) breach the provisions of, or
constitute a default under, any contract, agreement, instrument or
obligation to which Seller is a party or by which Seller is bound, or (d)
violate or conflict with any law or governmental regulation or permit
applicable to Seller.
vi. Seller has not received written notice of any pending or
threatened condemnation of all or any portion of the Property.
vii. Attached hereto as Exhibit O is a list of all service,
maintenance and supply contracts affecting the Property in effect on the
date hereof and which shall survive Closing (the "Service Contracts"), and
except as set forth on Exhibit O, neither party to any service contract is
in default thereunder.
viii. Seller is not a "foreign person" as defined in the
Federal Foreign Investment in Real Property Tax Act of 1980 and the 1984
Tax Reform Act, as amended.
ix. Seller has not received written notice from any
governmental authority that the Property contains Hazardous Substances or
Hazardous Materials or is in violation of any Environmental Laws.
x. Seller has not executed and to Seller's actual knowledge,
without inquiry, no agreement exists involving the Property with any
governmental authority for or in respect of subsidized tenants or housing
rents.
xi. Seller does not own, directly or indirectly, any other real
estate which is contiguous to or is located within a one mile radius of
the Property.
xii. Seller has not received written notice from a governmental
authority or any public utility that the water supply or sewage disposal
systems presently servicing the Property are inadequate to distribute the
water supply and dispose of the sewage for the Property.
xiii. The unaudited operating statements for 1995 and 1996
to date which Seller has delivered to Purchaser is the same information
which Seller relies upon in making reports to its limited partners and in
filing its federal income tax returns.
c. Seller covenants that:
i. The management, operation, leasing and maintenance of the
Property, as conducted by the Seller during the past three (3) months,
shall continue until the Closing Date.
ii. The management agreement pertaining to the leasing of
apartments will be terminated as of the Closing Date. Seller will request
a release in favor of the Purchaser from the management company.
iii. For the period commencing from the date of execution of
this Agreement until the Closing Date, Seller will not terminate more than
ten (10) tenant leases because of a default by any tenant under any such
lease without Purchaser's prior written consent, which consent will not be
unreasonably withheld or delayed.
20. ENVIRONMENTAL REPORT. Attached to this Agreement as Exhibit N is a
report of Preliminary Environmental Site Assessment and Limited Asbestos Survey
dated July 2, 1990 prepared by Law Associates, Inc. ("Environmental Report") of
the Property, which Seller is delivering to Purchaser, at Purchaser's request.
Seller makes no representation or warranty that the Environmental Report is
accurate or complete. Purchaser hereby releases Seller from any liability
whatsoever with respect to the Environmental Report, including, without
limitation, the matters set forth in the Environmental Report or the accuracy
and/or completeness of the Environmental Report.
21. LIMITATION OF LIABILITY.
a. No general or limited partner of Seller, nor any of its
respective beneficiaries, shareholders, partners, officers, 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 Purchaser hereby waives for itself and
anyone who may claim by, through or under Purchaser any and all rights to sue
or recover on account of any such alleged personal liability.
b. This Agreement and all documents, agreements, understandings and
arrangements relating to this transaction have been negotiated, executed and
delivered on behalf of Purchaser by the trustees or officers thereof in their
representative capacity under the Amended and Restated Declaration of Trust of
New Plan Realty Trust dated as of January 15, 1996 and not individually, and
bind only the trust estate of Purchaser, and no trustee, officer, employee,
agent or shareholder of Purchaser shall be bound or held to any personal
liability or responsibility in connection with the agreements, obligations and
undertakings of Purchaser thereunder, and any person or entity dealing with
Purchaser in connection therewith shall look solely to the trust estate for the
payment of any claim or for the performance of any agreement, obligation or
undertaking thereunder. Seller acknowledges and agrees that each agreement and
other document executed by Purchaser in accordance with or in respect of this
transaction shall be deemed and treated to include in all respects and for all
purposes the foregoing exculpatory provision.
22. RIGHT TO AUDIT. Without limiting any other rights or remedies of
Purchaser, Purchaser shall have the right after the Closing to audit the books
and records of Seller in respect of the Property for those last two entire
fiscal years of Seller's ownership of the Property ending immediately preceding
the Closing plus any "stub" period thereafter to such Closing; provided,
however, any matters disclosed by such audit (other than fraud) shall not be
the basis or the foundation for a claim of a breach of a representation or
warranty by the Seller.
23. TIME OF ESSENCE. Time is of the essence of this Agreement.
24. NOTICES. Any notice or demand which either party hereto is required
or may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by overnight courier
such as Federal Express or made by United States registered or certified mail
addressed as follows:
TO SELLER: c/o The Balcor Company
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attn: Ilona Adams
847/267-1600
847/317-4462 (FAX)
with copies to: The Balcor Company
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 60015
Attn: Al Lieberman
847/267-1600
847/317-4462 (FAX)
and
Morton M. Poznak
Schwartz & Freeman
Suite 1900
401 North Michigan Avenue
Chicago, Illinois 60611
312/222-0800
312/222-0818 (FAX)
TO PURCHASER: New Plan Realty Trust
1120 Avenue of the Americas
New York, New York 10036
Attn: Deborah Hartigan
Thomas Farrell
212/869-3000
212/302-4776 (FAX)
with a copy to: Robert Horwitch
Altheimer & Gray
10 S. Wacker Drive
Suite 4000
Chicago, Illinois 60606
312/715-4000
312/715-4800 (FAX)
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be
deemed to be delivered or made on the next business day if sent by overnight
courier, or on the 4th business day after the same is deposited in the United
States Mail as registered or certified matter, addressed as above provided,
with postage thereon fully prepaid. Any such notice, demand or document not
given, delivered or made by registered or certified mail or by overnight
courier as aforesaid shall be deemed to be given, delivered or made upon
receipt of the same by the party to whom the same is to be given, delivered or
made. Any party's above named attorney may give an effective and binding
notice in accordance with this Paragraph on behalf of such party.
25. DISTRIBUTIONS. For a period of one hundred and twenty (120) days
after the Closing Date, Seller shall not distribute $250,000.00 from the
proceeds of the net cash received from the Purchaser at the Closing. If
Purchaser alleges a claim for damages against Seller after the Closing Date,
but prior to the expiration of the aforesaid one hundred twenty (120) day
period ("Claim"), then the Seller shall continue to withhold distribution of
the funds in an amount equal to the lesser of (i) the amount of the Claim, or
(ii) $250,000.00, until the Claim is resolved. The Claim shall specify the
exact representation or warranty which was breached and the amount of damages
the Purchaser alleges it has sustained.
26. EXECUTION BY THE BALCOR COMPANY. The Balcor Company executes this
Agreement solely for the purpose of assuring to Purchaser that if the Seller
fails to withhold or pay the sums required pursuant to Paragraph above and if
Purchaser is successful in any claim asserted against the Seller for a breach
of a representation or warranty, then The Balcor Company shall pay the amount
of such claim(s), the total of which shall not exceed $250,000.00.
27. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute
three (3) copies of this Agreement and three (3) copies of the Escrow Agreement
and forward them to Seller for execution, accompanied with the Earnest Money
payable to the Escrow Agent. Seller will forward one (1) copy of the executed
Agreement to Purchaser and will forward the following to the Escrow Agent:
a. Earnest Money;
b. One (1) fully executed copy of this Agreement; and
c. Three (3) copies of the Escrow Agreement signed by the parties
with a direction to execute two (2) copies of the Escrow Agreement after
receipt of the Earnest Money and deliver a fully executed copy to the Purchaser
and the Seller.
28. GOVERNING LAW. The provision contained herein with reference to
retention of the Earnest Money in the event of Purchaser's default shall be
governed by the laws of the State of Illinois. The remaining provisions of
this Agreement shall be governed by the laws of the State of Indiana.
29. FURTHER ASSURANCES. In addition to the obligations required to be
performed under this Agreement by Seller on the Closing Date, from time to time
subsequent to such Closing Date, Seller shall perform such other acts and shall
execute and deliver such other agreements and documents as Purchaser reasonably
may request in order to effectuate the consummation of this transaction.
Likewise, in addition to the obligations required to be performed under this
Agreement by Purchaser on the Closing Date, from time to time subsequent to
such Closing Date, Purchaser shall perform such other acts and shall execute
and deliver such other agreements and documents as Seller reasonably may
request in order to effectuate the consummation of this transaction.
30. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all other negotiations, understandings and
representations made by and between the parties and the agents, servants and
employees.
31. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
32. CAPTIONS. Paragraph titles or captions contained herein are inserted
as a matter of convenience and for reference, and in no way define, limit,
extend or describe the scope of this Agreement or any provision hereof.
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date set forth above.
Executed by Purchaser on PURCHASER:
May 20, 1996.
NEW PLAN REALTY TRUST, a Massachusetts
business trust
By: /s/James M. Steuterman
------------------------------
Executive Vice President
Executed by Seller on SELLER:
May 22, 1996.
HAWTHORNE HEIGHTS LIMITED
PARTNERSHIP, an Illinois limited partnership
By: Hawthorne Heights Partners, Inc., an
Illinois corporation, its general partner
By: /s/Phillip Schechter
----------------------------------
Authorized agent
ACCEPTED AND AGREED TO SOLELY AS TO PARAGRAPH 26
OF THIS AGREEMENT.
THE BALCOR COMPANY
By: /s/Phillip Schechter
----------------------------------
Its: Authorized agent
----------------------------------
Hawthorne Heights
CB Commercial Real Estate Group, Inc. ("Broker") executes this Agreement in its
capacity as a real estate broker and acknowledges that the fee or commission
("Fee") due to it as a result of the transaction described in this Agreement is
the amount as set forth in the listing agreement between Broker and Seller and
Purchaser has no liability or responsibility whatsoever for such Fee. Broker
also acknowledges that payment of the aforesaid Fee is conditioned upon the
Closing and the receipt of the Purchase Price by the Seller. Broker agrees to
deliver a receipt to the Seller and Purchaser at the Closing for the Fee and a
release stating that no other fees or commissions are due to Broker from Seller
or Purchaser.
CB COMMERCIAL REAL ESTATE GROUP,INC.
By:
-----------------------------------
EXHIBITS
A - Legal
B - Personal Property
C - Escrow Agreement
D - Title Commitment
E - Deed
F - Bill of Sale
G - Assignment of Service Contracts
H - Assignment of Leases and Security Deposits
I - Assignment of Licenses and Permits
J - Notice to Tenants
K - Non-Foreign Affidavit
L - Assignment of Intangibles
M - Rent Roll
N - Environmental Report
O - Service Contracts