Purchase Agreement dated July 29, 2005 between Twelve Oaks Management, LLC and Wilshire Enterprises, Inc.
Exhibit
10.3
Purchase
Agreement dated July 29, 2005 between Twelve Oaks Management, LLC and Wilshire
Enterprises, Inc.
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1.
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PURCHASE
AND SALE:
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As
a
result of the efforts of Southeast Apartment Partners LLC ("Broker"), a licensed
real estate broker, the undersigned purchaser ("Purchaser"), agrees to buy,
and
the undersigned seller ("Seller"), agrees to sell, as of this date, July 29,
2005, subject to the terms and conditions set forth herein, all that tract
of
land known as 72 units known as Twelve
Oaks Apartments,
000 Xxx
Xxxx Xxxx, Xxxxxxxxx, XX 00000, Property ID: 13-139a-00b-0022 (See Attached
Legal Description “Exhibit A”) attached hereto and by this reference made a part
hereof, together with all improvements now located thereon, including, but
not
limited to, all electrical, mechanical, plumbing and other systems and all
fixtures located therein and thereon, and all personal property owned by Seller
used specifically for the use of this property and also all that property that
is used by the tenants and owned by Seller and located therein, as well as
plants, trees and shrubbery thereon and the related tenant leases and all rights
under those leases with respect to the period from and after Closing
(collectively, the "Property").
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2.
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PURCHASE
PRICE AND METHOD OF
PAYMENT:
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The
purchase price of the Property shall be One
Million Seven Hundred Twenty Five Thousand & 00/100 Dollars (U.S.)
($1,725,000.00)
(the
“Purchase Price”), to be paid in cash or immediately available funds at
Closing.
| 3. |
XXXXXXX
MONEY:
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Within
five (5) business days of execution of this Agreement, Purchaser shall deposit
Ten
Thousand & 00/100 dollars ($10,000.00) with
Xxxx
Xxxxxx (Xxxx Xxxxxx Esq.) (“Escrow
Agent”), as "Xxxxxxx Money" which shall be credited against the Purchase Price
of the Property at the time the sale is consummated. The Xxxxxxx Money is
non-refundable, except as otherwise provided in this Agreement. The parties
to
this Agreement understand and agree that the disbursement of Xxxxxxx Money
held
by the Escrow Agent can occur only (A) at Closing; (B) upon written agreement
signed by all parties having an interest in the funds; (C) upon court order;
(D)
upon the failure of any contingency or failure of either party to fulfill his
obligations as set forth in this Agreement or (E) as otherwise set out herein.
In the event of a dispute between Purchaser and Seller, the Escrow Agent shall
interplead all or any disputed pan of the Xxxxxxx Money into court, and
thereupon be discharged from all further duties and liabilities hereunder.
The
filing of any such interpleader action shall not deprive Escrow Agent of any
of
its rights under this Agreement Purchaser and Seller agree that Escrow Agent
shall be entitled to be compensated by the party who does not prevail in the
interpleader action for its costs and expenses, including reasonable attorney's
fees, in filing said interpleader action. Seller and Purchaser agree to execute
an escrow agreement agreeable to all of Purchaser, Seller and Escrow Agent
regarding establishment of the escrow account.
| 4. |
TITLE
EXAMINATION:
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For
purposes of this Agreement, “good and marketable fee simple title” shall mean
such title as is insurable by a title insurance company licensed to do business
in Georgia, under its standard form of ALTA Owner’s Policy of Title Insurance,
1992 Form B, at its standard rates, subject only to the Permitted Exceptions
(defined below). Fee simple title to the Property shall be conveyed to Purchaser
by Seller pursuant to a limited warranty deed executed and delivered by Seller
at the Closing subject to the following (collectively, the “Permitted Title
Exceptions”): (a) taxes for the year in which the Closing shall occur, the
payment of which Purchaser shall assume at the Closing, subject to the
provisions of this Agreement; (b) any and all zoning ordinances, rules and
regulations; (c) those matters set forth in the Title Commitment (defined below)
to be obtained by Purchaser pursuant to the terms of this Agreement, with the
exception of those objections as set forth in Purchaser’s Title Notice (defined
below); (d) all matters shown by a current survey of the Property, with the
exception of those objections as set forth in Purchaser’s Title Notice (defined
below) to the extent Seller has elected to cure same; and (e) other matters
as
disclosed in this Agreement. At Closing, Seller shall also execute usual and
customary documents to facilitate the closing of the transaction, including
without limitation, settlement statements and seller’s affidavits.
2
Purchaser
agrees to cause a title examination of the Property to be conducted by a title
company mutually acceptable to both Purchaser and Seller (the “Title Company”)
and to cause such title company to issue an owner’s title commitment for the
benefit of Purchaser on its standard form of ALTA Form B owner's policy (the
“Title Commitment”). If the Title Commitment discloses any defects in title or
objections, as determined in the sole discretion of Purchaser or Purchaser’s
lender, Purchaser shall notify Seller in writing of such defects or objections
no later than the end of Inspection Period ("Purchaser's Title Notice"). Within
five
(5)
days
after receipt of Purchaser’s Title Notice, Seller shall deliver to Purchaser a
written notice specifying which, if any, items contained in Purchaser’s Title
Notice Seller shall cure prior to or at Closing (the “Seller’s Cure Notice”).
Notwithstanding anything contained herein, Seller shall have no obligation
or
duty to cure any title objection(s) other than those items that Seller agrees
to
cure in Seller’s Cure Notice. In the event Seller is unable to cure or unwilling
to cure all objections raised in Purchaser’s Title Notice, Purchaser's only
remedy is (i) within two (2) business days after receipt of Seller’s Cure
Notice, to terminate this Agreement as provided herein and receive, within
five
(5) days of delivery of such termination notice and with or without consent
of
the Seller, the return of the Xxxxxxx Money, including all interest thereon,
less $100.00 which shall be paid over to Seller, or (ii) to waive such objection
and close the transaction contemplated by this Agreement. Seller is to pay
for
title examination. At closing, purchaser shall reimburse seller for the cost
of
the title examination.
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5.
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WARRANTIES:
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Seller
represents that to the best of Seller's knowledge, (A) Seller has good and
marketable fee simple title to the Property; (B) The Property will be in
substantially the same condition upon Closing as on the date of Seller’s
execution hereof; (C) There is no planned or pending rezoning affecting the
Property; (D) There are no assessments, condemnations, or eminent domain
proceedings or governmental orders pending or threatened against the Property
or
any portion thereof; (E) There is no option to purchase, right of first refusal
to purchase or agreement for the sale and purchase of the Property or any
portion thereof to any person or entity; (F) No consent or approval of any
other
person or entity is required in order for this Agreement to be legal, valid
and
binding upon Seller; (G) There are no pending or threatened suits, proceedings,
judgments, bankruptcies, or liens of claim thereof that might affect the title
to the Property or executions against the present or former owners thereof,
either in the county in which the Property is located or any other county in
the
State of Georgia
that
might affect title to the Property; and (H) Seller has not received any written
notice from any tenant at the Property that a tenant has asserted any defense,
set-off, or counterclaim with respect to its tenancy or its obligation to pay
rent and other charges pursuant to its lease. If, prior to Closing, Seller
or
Purchaser shall become aware of any past or present matters that may cause
any
of the warranties or representations set forth in this Section 6 to be or become
false, inaccurate, or misleading in any material respect (whether or not Seller
has had knowledge thereof), Purchaser shall have the right to terminate this
Agreement without further recourse by Seller and receive refund of the Xxxxxxx
Money. The warranties stated herein shall survive the Closing for a period
of
Ninety
(90) days.
Any
claim for a breach of warranty must be filed during such Ninety
(90) day
period
or shall be forever waived.
3
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6.
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CONDITION
OF PROPERTY:
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Purchaser
acknowledges and agrees that upon Closing, Seller shall sell and convey to
Purchaser and Purchaser shall accept the Property “AS IS, WHERE IS, WITH ALL
FAULTS,” except to the extent expressly warranted or provided otherwise in this
Agreement and any document executed by Seller and delivered to Purchaser at
Closing. Purchaser acknowledges that it will have the opportunity to inspect
the
Property during the Inspection Period. Purchaser acknowledges that during such
Inspection Period it will have the opportunity to observe the physical
characteristics and existing conditions of the Property and to conduct such
investigation and study on and of the Property and adjacent areas as Purchaser
deems necessary. It is understood and agreed that Seller has not at any time
made, is not now making and specifically disclaims any warranties or
representations of any kind or character, express or implied, with respect
to
the presence or absence of Hazardous Materials, in, on, under or in the vicinity
of the Property. Until Closing, Seller shall, at Seller's expense, maintain
in
full force
and
affect the same fire and extended coverage insurance carried by Seller on the
Property on the date of this Agreement. However, should the Property be
destroyed or substantially damaged before Closing, then at the election of
Purchaser: (A) this Agreement may be immediately canceled by Purchaser, and
Seller shall refund the Xxxxxxx Money within five (5) days of the notice of
cancellation; or (B) Purchaser may consummate this Agreement and receive such
insurance proceeds as are paid on the claim of loss. The election to terminate
or consummate this Agreement, if not earlier terminated, must be exercised
within ten
(10)
days
after Seller provides Purchaser written notice of the casualty.
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7.
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AGENCY
DISCLOSURE:
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Purchaser
and Seller acknowledge that Broker has acted as an agent for Seller. Broker
shall not owe any duty to Seller greater than what is set forth in the Brokerage
Relationships in Real Estate Transaction Act, Official Code of Georgia Annotated
Section 10-6A-1 et
seq.
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8.
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REAL
ESTATE COMMISSION:
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In
negotiating this Agreement, Broker has rendered a valuable service and shall
be
paid a Commission in cash at Closing by Seller per a separate agreement.
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9.
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DISCLAIMER:
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Seller
and Purchaser acknowledge that they have not relied upon the advise or
representations, if any, of Brokers, or their associate brokers or salespersons,
concerning: (A) the legal and tax consequences of this Agreement in the sale
of
the Property: (B) the terms and conditions of financing; (C) the purchase and
ownership of the Property; (D) the structural condition of the Property (E)
the
operating condition of any business; (F) the operating condition of the
electrical, heating, air conditioning, plumbing, water heating systems and
appliances on the Property; (G.) the availability of utilities to the Property;
(H) the investment potential or resale value of the Property; (I) the financial
ability of Purchaser, (J) any conditions existing off the Property which may
affect the Property; or (K) any matter which could have been revealed through
a
survey, title search or inspection of the Property. Seller and Purchaser both
acknowledge that if such matters have been a concern to them, they have sought
and obtained independent advice relative thereto.
4
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10.
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ASSIGNMENT:
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This
Agreement and the rights and obligations hereunder may be assigned by Purchaser
to an entity owned by Purchaser or under Purchaser’s control, but not otherwise.
Notwithstanding anything contained herein to the contrary, any such assignee
shall assume
in
writing all of the obligations and liabilities of Purchaser hereunder, and
a
copy of such assignment shall be provided to Seller in writing within two (2)
days after it is signed by Purchaser and assignee.
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11.
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BINDING
EFFECT:
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This
Agreement shall bind and inure to the benefit of Seller, Purchaser and Brokers,
and their respective heirs, executors, legal representatives, successors and
assigns.
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12.
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RESPONSIBILITY
TO COOPERATE:
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Seller
and Purchaser agree that such documentation as is reasonably necessary to carry
out the terms of this Agreement shall be produced, executed and/or delivered
by
such parties within the time required to fulfill the terms and conditions of
this Agreement.
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13.
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DEFAULT;
REMEDIES:
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In
the
event the sale is not closed because of Seller's inability, failure or refusal
to perform any of Seller's obligations herein, and if Seller fails to cure
any
default within ten
(10)
days
after Seller’s receipt of written notice of such default from Purchaser, then
Purchaser may elect to either terminate this Agreement, in which event Escrow
Agent shall return the Xxxxxxx Money to Purchaser and the parties shall have
no
further rights or obligations hereunder except for any provisions of this
Agreement surviving termination, or to seek specific performance of Seller’s
obligations under this Agreement, Purchaser specifically acknowledging that
the
remedy at law for damages is excluded and Purchaser hereby specifically waives
any right to xxx for damages. Purchaser agrees that if the sale is not closed
because of Purchaser's inability, failure or refusal to perform any of
Purchaser's obligations herein, and if Purchaser fails to cure any default
within ten (10) days after Purchaser’s receipt of written notice of such default
from Seller, Seller may elect to terminate this Contract in which event the
Xxxxxxx Money shall be paid to Seller as liquidated damages and Seller's sole
and exclusive remedy for such default, the parties hereby acknowledging that
the
actual damages of Seller would be difficult if not impossible to ascertain
and
the amount of the Xxxxxxx Money constitutes a reasonable estimate of such
damages. Notwithstanding anything in this Agreement to the contrary, in the
event that the transaction contemplated by the Agreement does not close for
any
reason whatsoever, Broker shall not be entitled to receive any commission with
respect to the purchase and sale of the Property, and in such event neither
Seller nor Purchaser shall be obligated to pay any commission to
Broker.
5
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14.
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NOTICES:
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Except
as
may otherwise be provided for in this Agreement, all notices required or
permitted to be given hereunder shall be in writing and shall be deemed
delivered either (A) in person, (B) by overnight delivery service prepaid,
(C)
by facsimile (FAX) transmission, or (D) US. Postal Service, postage prepaid,
registered or certified, return receipt requested, to the party being given
such
notice at the appropriate address set forth below.
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As
to Purchaser:
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As
to Seller:
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Name:
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Interstate
East Management, Inc.
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Name:
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Wilshire
Enterprises, Inc
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Address:
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0000
Xxxxxxxxxx Xxxxx, XX
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Address:
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000
Xxxxxx Xxxxxx
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Xxxx,
Xxxxx, XXX:
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Xxxxxxx,
XX 00000
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City,
State, ZIP:
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Xxxxxx Xxxx, XX 00000 |
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Attn:
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Xxxx
Xxxx
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Attn:
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Xxxxxx
Xxxxx, President/COO
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Fax
No:
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000-000-0000
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Fax
No.:
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000-000-0000
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Telephone
No.:
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000-000-0000
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Telephone
No.:
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000-000-0000
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E-mail:
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xxxxxxxx@xxxxxxx.xxx
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As
to Broker:
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As
to Escrow Agent:
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Name:
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Southeast
Apartment Partners, LLC
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Name:
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Xxxx
& Xxxxxx, LLP
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Address:
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0000
Xxxxxxxxx Xxxx, Xxxxx 000
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Address:
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000
X. Xxxxxxxxx Xxxxxx Xxx. 000
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Xxxx,
Xxxxx, XXX:
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Xxxxxxx,
XX 00000
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City,
State, Zip:
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Xxxxxxx, XX 00000 |
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Attn:
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Xxxxxx
Xxxxxxxx
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Attn:
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Xxxx
Xxxxxx
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Fax
No:
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000-000-0000
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Fax
No.:
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000-000-0000
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Telephone
No.:
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000-000-0000
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Telephone
No.:
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000-000-0000
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E-mail:
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xxxxxxxxx@xxxxxxxxxxxxx.xxx
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E-mail:
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xxxxxxx@xxxx.xxx
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Such
notices shall be deemed to have been given as of the date and time actually
received by the receiving party. In the event no address for purpose of notice
is specified with respect to a particular party as required by this paragraph,
any other party may direct notices to such party at any business or resident
address known to such other party. Any such notice to an unspecified address
shall be effective when delivered personally or with respect to mailed notices,
upon actual receipt by the party to whom such notice is directed, as shown
on
the return receipt therefore.
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15.
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TIME:
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Time
is of the essence of this Agreement.
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16.
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ENTIRE
AGREEMENT; AMENDMENT; SURVIVAL:
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This
Agreement constitutes the sole and entire agreement between the parties hereto
with respect to the subject matter hereof, and no modification of this Agreement
shall be binding unless signed by all parties to this Agreement. No
representation, promise or inducement not included in this Agreement shall
be
binding upon any party hereto. Except as expressly provided herein, none of
the
provisions of this Agreement shall survive the closing of the transaction
contemplated herein.
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17.
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MISCELLANEOUS/CLOSING:
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Real
estate taxes and utilities, including all sanitary taxes and charges applicable
to the Property, for the calendar year in which the sale is closed shall be
prorated as of the date of Closing. Seller shall provide the Purchaser a Rent
Roll listing the tenant’s names, unit numbers, the commencement date of the
lease, the amount of the monthly rent, and the termination date of the lease
within five (5) days after the execution date of this Agreement. Collected
Rents
shall be prorated as of the date of Closing. Any uncollected rents will be
transferred to Purchaser and any rents collected by Purchaser from those tenants
will first go to the payment of current rents due and only after all current
rents are paid will the payments be applied to rents due to seller and shall
be
paid to Seller. All tenant security deposits shall be delivered by Seller to
Purchaser at Closing. Seller shall provide to the extent they exist or can
be
obtained with reasonable effort, Tenant Estoppel Certificates like the ones
attached hereto as Exhibit B from all Tenants in addition to the originals
of
all associated leases at or prior to the Closing.
6
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A.
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| B. |
Seller
agrees to provide a standard termite clearance letter at
Closing.
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| C. |
The
sale of the Property shall be closed (the “Closing”) on or before
Forty-five
(45) days
from the execution of purchase agreement, at a time and location
acceptable to Purchaser and Seller. If the time period by which any
right,
option or election provided under this Agreement must be exercised,
or by
which any act required hereunder must be performed, or by which the
Closing must be held, expires on a Saturday, Sunday or legal holiday,
then
such time period shall be automatically extended to the close of
business
on the next regular business day.
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| D. |
Conditions
precedent to the obligation of either party to close hereunder, if
any,
are for the benefit of such party only, and any and all of said conditions
may be waived in the discretion of the party benefited
thereby.
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| E. |
Seller
and Purchaser agree to comply with and to execute and delivery such
certifications, affidavits and statements as are required at the
Closing
in order to meet the requirements of Internal Revenue Code Section
1445
(Foreign/Non-Foreign Sellers).
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| F. |
This
Agreement shall be construed under the laws of the State of
Georgia.
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| G. |
The
Seller shall grant possession of the Property to Purchaser no later
than
the Closing Date, subject to the Permitted Title Exceptions and the
rights
of the tenants occupying the
Property.
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| H. |
Personal
Property:
A
Xxxx of Sale containing only a limited warranty of title for all
air
conditioners, water heaters, ovens, stoves, refrigerators, washers,
dryers, office furniture, fixtures, bank operating account, and any
and
all other personal property owned by the Seller which is located
and used
as a part of the business of the operation of the property will be
conveyed to Buyer. The price of these items are included in the Purchase
Price for the Property, and Buyer agrees to accept all such personal
property in “as is” condition.
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18.
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LEAD-BASED
PAINT DISCLOSURE
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Every
purchaser of any interest in residential real property built prior to 1978
is
notified that such property may present exposure to lead from lead-based paint
that may place young children at risk of developing lead poisoning. Lead
poisoning also poses a particular risk to pregnant women. A risk assessment
or
inspection for possible lead-based hazards is recommended prior to purchase.
Purchaser and Seller agree to execute a "Lead-Based Paint Disclosure Addendum"
that will be annexed to this Agreement.
7
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19.
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SPECIAL
STIPULATIONS:
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The
following Special Stipulations shall, if conflicting with the foregoing,
control:
A. Tax-Free
Exchange.
Both
Seller and Purchaser shall have the right to cause the Closing to occur as
part
of a “like-kind” exchange pursuant to the provisions of Section 1031 of the
Internal Revenue Code of 1986, as amended, and the regulations thereunder.
Seller and Purchaser agree to cooperate with each other in effecting a
qualifying like-kind exchange; provided, however, if either party (the “Electing
Party”) elects to affect a qualifying like-kind exchange:
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(1)
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The
other party shall not be obliged to incur any costs, expenses, losses,
liabilities or damages greater than such party would have incurred
had the
Electing Party not elected to effect a like-kind exchange, subject
to any
provisions contained in this Agreement, and the Electing Party shall
indemnify the other party against
same;
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(2)
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In
no event shall the other party be required to acquire title to any
other
property, whether by deed or contract right, for the benefit of the
Electing Party or it assignee.
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| (3) |
The
Closing shall not be delayed as a result of such like kind exchange.
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| (4) |
Agreement
is subject to Purchaser obtaining satisfactory
financing.
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Seller
and Purchaser make no representations to each other that the sale or purchase,
respectively, of the Property will qualify for tax-free exchange
treatment.
| B. |
Once
this Agreement becomes effective, (a) Seller agrees not to enter
into any
new service contracts on the Property which Purchaser will be required
to
assume without Purchaser’s consent, and (b) Seller agrees not enter into
any leases with tenants with an expiration date greater than
one year, without Purchaser’s
consent.
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This
instrument shall be regarded as an offer by the first party to sign it and
is
open for acceptance by the other party until 5:00
o'clock P.M. on _________________, 2005,
by
which time written acceptance of such offer must have been actually received
by
Broker, who shall promptly notify the other party of such
acceptance.
Purchaser
acknowledges that Purchaser has read and understood the terms of this Agreement
and has received a copy of it.
The
date
of this Agreement shall be deemed the date that this Agreement has been fully
executed by Purchaser and Seller.
8
IN
WITNESS WHEREOF, Purchaser, Seller and Broker have hereunto set their hands
and
seals as of the date indicated below.
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PURCHASER:
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SELLER:
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|
Xxxx
Xxxx
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Xxxxxx
X. Xxxxx
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|
__________________________(SEAL)
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____________________________(SEAL)
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Twelve
Oaks Management, LLC.
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Wilshire
Enterprises, Inc.
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Date:
__________________
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Date:
__________________
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BROKER:
|
|
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Xxxxxx
Xxxxxxxx
|
|
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By:
__________________________(SEAL)
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|
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Southeast
Apartment Partners, LLC
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Date:
__________________
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