CONTRACT OF SALE TRB CHATTANOOGA LLC - Seller - FREEMAN WEBB INVESTMENTS, INC. - Purchaser - as of April 17, 2008
EXHIBIT
10.1
TRB
CHATTANOOGA LLC
-
Seller -
XXXXXXX
XXXX INVESTMENTS, INC.
-
Purchaser -
as
of April 17, 2008
|
Marina
Pointe Apartments
|
|
|
0000
Xxxx Xxxxxx Xxxxx
|
|
|
Xxxxxxxxxxx,
Xxxxxxxxx
|
TABLE
OF CONTENTS
Page:
1. Purchase
Price
2. Escrow
3. Premises
Sold "As Is"
4. Leases
5. Title
6. Acceptance
of the Deed
7. Inspections
8. No
Financing Contingency
9. Authorization
of Purchaser and Seller
10. Included
Premises .
11. Closing
Costs
12. Closing
Date
13. Closing
Documents
14. Preclosing
Obligations of Seller
15. Condemnation
16. Casualty
17. Assignment
18. Brokers
19. Section
1031 Tax Deferred Exchange
20. OFAC
Matters
21. Miscellaneous
i
This
CONTRACT OF SALE (this "Contract") is made and entered into as of the
17th
day of
April, 2008 by and between TRB Chattanooga LLC, a Tennessee limited liability
company having an office at 00 Xxxxxx Xxxx Xxxx, Xxxxx 000, Xxxxx Xxxx, Xxx
Xxxx
00000 ("Seller"), and Xxxxxxx Xxxx Investments, Inc., a Tennessee corporation
having an office at 000 Xxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx
00000-0000 ("Purchaser").
WITNESSETH:
WHEREAS,
Seller is the current owner of the property known as the Marina Pointe
Apartments, 0000 Xxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx and more particularly
described on Exhibit A attached hereto (the "Premises"); and
WHEREAS,
Seller wishes to sell and Purchaser wishes to acquire the Premises in accordance
with the terms hereof.
NOW,
THEREFORE, in consideration of the mutual covenants herein contained, the
sufficiency of which being hereby acknowledged, the parties hereto do hereby
agree as follows:
1. Purchase
Price.
Seller
agrees to sell and Purchaser agrees to acquire the Premises for the sum of
$27,300,000.00 payable as follows:
$300,000.00
within three (3) business days after the execution and delivery of this Contract
of Sale as the nonrefundable (except as specifically set forth herein)
Downpayment (hereinafter defined), by wire transfer to the order of First
American Title Insurance Company, as escrow agent (“Escrow Agent”), which sum
shall be held in escrow pursuant to the terms hereof; and
$27,000,000.00,
at the Closing, by wire transfer of immediately available funds to an account
designated by Seller.
2. Escrow.
Within
three (3) business days after the execution of this Contract of Sale, Purchaser
will deliver to Escrow Agent a wire transfer in the amount of $300,000.00 as
the
downpayment (the "Downpayment"). Escrow Agent shall deposit the Downpayment
into
an interest-bearing account(s) maintained at a federally insured financial
institution(s). Escrow Agent shall deliver the Downpayment in accordance with
this Contract of Sale, or a joint instruction signed by Seller and Purchaser,
or
separate instructions of like tenor signed by Seller and Purchaser, or a final
judgment of a court of competent jurisdiction. Escrow Agent hereby is authorized
and directed to deliver the Downpayment to Seller if, as and when title
closes. If
Escrow
Agent shall receive a written request by one party for the release of the
Downpayment other than as specifically authorized above, Escrow Agent will
give
a copy thereof to the other party. If Escrow Agent shall not receive an
objection from the other party within five (5) business days, then Escrow Agent
shall so release the Downpayment. Provided, however, in the event that Purchaser
requests release of the Downpayment as a result of Purchaser terminating this
Contract prior to the end of the Due Diligence Period, no consent or approval
from the Seller is necessary and the Downpayment shall be immediately returned
to Purchaser. If Escrow Agent receives an objection, then Escrow Agent shall
continue to hold the Downpayment in accordance with the terms hereof. Escrow
Agent at any time may deposit the Downpayment with a court of competent
jurisdiction, and upon notice to Seller and Purchaser of such deposit, Escrow
Agent shall have no further responsibility or liability hereunder. Escrow Agent
may act upon any instruction or other writing believed by Escrow Agent in good
faith to be genuine and to be signed or presented by the proper persons. Except
as otherwise noted herein, any interest or income thereon shall be paid to
the
party entitled to receive the Downpayment; provided that if Seller shall receive
the interest at Closing then such interest shall serve as a credit against
the
purchase price. If Purchase fails to make the deposit of the Downpayment as
required hereunder, this Contract shall terminate and neither party shall have
any further obligations hereunder to the other.
Seller
and Purchaser acknowledge that Escrow Agent is merely a stakeholder, and that
Escrow Agent shall not be liable for any act or omission unless taken or
suffered in bad faith, in willful disregard of this Contract of Sale or
involving gross negligence. Escrow Agent shall not be liable for the failure
of
the institution(s) in which the Downpayment has been deposited or for
establishing accounts in excess of applicable guaranty limits. Seller and
Purchaser agree to indemnify and hold Escrow Agent harmless from and against
any
reasonable costs, claims or expenses incurred in connection with the performance
of the Escrow Agent's duties hereunder, unless such costs, claims or expenses
were occasioned by Escrow Agent's bad faith or its willful disregard of this
Contract of Sale.
Escrow
Agent shall not be bound by any agreement between Seller and Purchaser, whether
or not Escrow Agent has knowledge thereof, and Escrow Agent's only duties and
responsibilities shall be to hold, and to dispose of, the Downpayment and
interest earned thereon in accordance with this Contract of Sale. Escrow Agent
may consult with counsel, and any opinion of counsel shall be full and complete
authorization and protection in respect to any action taken or omitted by Escrow
Agent hereunder in good faith and in reliance upon such opinion.
All
instructions or notices given to the Escrow Agent shall be in writing and
delivered in accordance with the requirements of this Contract of Sale. For
purposes of this paragraph, such instructions and notices shall be deemed
delivered on the date of delivery, if by hand, or on the date of mailing if
mailed, except that no instruction or notice to Escrow Agent shall be deemed
effectively delivered to Escrow Agent until actual receipt thereof by Escrow
Agent.
3. Premises
Sold "AS
IS".
A. PURCHASER
EXPRESSLY UNDERSTANDS AND AGREES AND ACKNOWLEDGES THAT SELLER WOULD NOT HAVE
ENTERED THIS CONTRACT OF SALE WITHOUT THE EXPRESS PROVISIONS OF THIS PARAGRAPH
3. IN PARTICULAR, PURCHASER ACKNOWLEDGES THAT SELLER ONLY RECENTLY ACQUIRED
THE
PREMISES BY DEED IN LIEU OF FORECLOSURE AND THEREFORE SELLER IS BOTH UNWILLING
AND UNABLE TO MAKE ANY MORE REPRESENTATIONS OR WARRANTIES CONCERNING THE
PREMISES THAN THE ONES SET FORTH IN THIS CONTRACT OF SALE AND THOSE CONTAINED
IN
THE CLOSING DOCUMENTS TO BE DELIVERED PURSUANT TO SECTION 13 HEREOF. IT IS
UNDERSTOOD THAT THE PREMISES AND ALL IMPROVEMENTS AND FIXTURES SHALL BE
DELIVERED "AS
IS",
“WHERE
IS”
IN
THEIR PRESENT CONDITION AND WITH ALL FAULTS, SUBJECT TO REASONABLE WEAR AND
TEAR
AND DETERIORATION BETWEEN NOW AND THE CLOSING DATE. SELLER SHALL NOT BE LIABLE
FOR ANY LATENT OR PATENT DEFECTS IN THE PREMISES. PURCHASER ACKNOWLEDGES THAT,
EXCEPT AS HEREIN SPECIFICALLY SET FORTH, NEITHER SELLER NOR ANY OF ITS
REPRESENTATIVES, EMPLOYEES, MEMBERS, OFFICERS, DIRECTORS, SHAREHOLDERS,
TRUSTEES, MEMBERS, PARTNERS, COUNSEL OR AGENTS HAS MADE OR WILL IN THE FUTURE
MAKE ANY DISCLOSURES, REPRESENTATIONS OR WARRANTIES AS TO THE PHYSICAL
CONDITION, STATE OF REPAIR, TENANCY, INCOME, EXPENSES OR OPERATION OF THE
PREMISES. EXCEPTING ONLY THOSE REPRESENTATIONS (IF ANY) SPECIFICALLY SET FORTH
IN THIS CONTRACT OF SALE, PURCHASER ACKNOWLEDGES THAT IT HAS NOT RELIED ON
ANY
REPRESENTATIONS, WARRANTIES OR OTHER STATEMENTS WHETHER ORAL OR WRITTEN IN
ITS
DECISION TO ACQUIRE THE PREMISES IN ACCORDANCE WITH THE TERMS HEREOF.
2
IN
PARTICULAR, EXCEPT AS HEREIN SPECIFICALLY SET FORTH, SELLER HAS NOT MADE (AND
IS
UNWILLING TO MAKE) ANY DISCLOSURES, REPRESENTATIONS OR WARRANTIES IN RESPECT
OF
(I) THE PHYSICAL CONDITION OF THE PREMISES (INCLUDING, WITHOUT LIMITATION,
IN
RESPECT OF THE PRESENCE, NON-PRESENCE OR CONDITION OF HAZARDOUS MATERIALS
(HEREAFTER DEFINED), (II) THE COMPLIANCE OR NON-COMPLIANCE OF THE PREMISES
WITH
ANY PLANS OR SPECIFICATIONS OR WITH APPLICABLE LAWS (INCLUDING, WITHOUT
LIMITATION, THOSE RELATING TO THE PROTECTION OF THE ENVIRONMENT OR THE HEALTH,
SAFETY, ACCESSIBILITY OR WELFARE OF EMPLOYEES, WORKERS OR GUESTS TO THE PREMISES
(INCLUDING BUT NOT LIMITED TO THE OCCUPATIONAL SAFETY AND HEALTH ACT, AS
AMENDED, AND THE AMERICAN WITH DISABILITIES ACT, AS AMENDED)), (III) THE
REVENUES, INCOME OR EXPENSES OF THE PREMISES, (IV) THE ADEQUACY OR INADEQUACY
OF
THE UTILITIES, IF ANY, PROVIDED TO THE PREMISES, (V) THE ZONING OF THE PREMISES
OR (VI) ANY OTHER MATTER WHATSOEVER AND WHETHER OR NOT CONCERNING THE PREMISES.
PURCHASER ACKNOWLEDGES THE FOREGOING AND WARRANTS AND REPRESENTS THAT IT (OR
ITS
PRINCIPAL OFFICER IF PURCHASER SHALL BE AN ENTITY) HAS HAD SUFFICIENT TIME
AND
OPPORTUNITY (OR THAT THIS CONTRACT OF SALE PROVIDES FOR SUFFICIENT TIME AND
OPPORTUNITY) TO INSPECT THE PREMISES AND OTHER MATTERS DEEMED IMPORTANT TO
PURCHASER, THAT IT (OR ITS PRINCIPAL OFFICER IF PURCHASER SHALL BE AN ENTITY)
IS
EXPERIENCED IN OWNING REAL PROPERTY SIMILAR TO THE PREMISES AND THAT IT IS
REPRESENTED BY ADVISORS AND COUNSEL OF ITS CHOOSING.
3
For
purposes hereof, “Hazardous Wastes” shall mean and refer to explosives,
radioactive materials, asbestos, asbestos-containing materials, polychlorinated
biphenyls, lead, lead-based paint, radon, under and/or above ground storage
tanks, hazardous materials, toxic substances, hazardous wastes, hazardous
substances, mold, petroleum, petroleum based materials or any other materials
or
substances which are listed or regulated in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections
6901, et seq.),
the
Resources Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901,
et seq.),
the
Clean Water Act (33 U.S.C. Section 1251, et seq.),
the
Safe Drinking Water Act (14 U.S.C. Section 1401, et seq.),
the
Hazardous Materials Transportation Act (49 U.S.C. Section 1801, et seq.),
the
Toxic Substance Control Act (15 U.S.C. Section 2601, et seq.),
or any
other applicable federal, state or local laws.
B. As
of the
expiration of the Due Diligence Period, Purchaser will have, or will have had
ample opportunities to have:
(i) Examined
and inspected the Premises and will know and be satisfied with the physical
condition, quality, quantity and state of repair of the Premises in all
respects, and by proceeding with this transaction following the expiration
of
the Due Diligence Period will be deemed to have determined that the same is
satisfactory to Purchaser in all respects;
(ii) Reviewed
the Lease(s) and all other premises information and all other instruments,
records and documents which Purchaser deems appropriate or advisable to review
in connection with this transaction, and Purchaser, by proceeding with this
transaction following the expiration of the Due Diligence Period, will be deemed
to have determined that the same and the information and data contained therein
and evidenced thereby are satisfactory to Purchaser in all
respects;
(iii) Reviewed
all applicable laws, ordinances, rules and governmental regulations (including,
but not limited to, those relating to building, zoning and land use) affecting
the development, use, occupancy or enjoyment of the Premises and the conformance
and non-conformance of the Premises with same, and Purchaser, by proceeding
with
this transaction following the expiration of the Due Diligence Period, will
be
deemed to have determined that the same are satisfactory to
Purchaser;
(iv) Investigated,
examined and approved the presence or absence of Hazardous Materials, in, on
or
under the Premises, which investigations, examinations or audits shall be
performed or arranged by Purchaser, at Purchaser’s sole expense, prior to the
end of the Due Diligence Period;
4
(v) Investigated,
examined and approved the quality, nature, adequacy and physical condition
and
aspects of the Premises, including, but not limited to, the structural elements,
foundation, roof, appurtenances, access, landscaping, parking facilities and
the
electrical, mechanical, HVAC, plumbing, sewage, and utility systems, facilities
and appliances, the square footage within the improvements on the
Premises;
(vi) Investigated,
examined and approved the quality, nature, adequacy, and physical condition
of
soils, geology and any groundwater;
(vii) Investigated,
examined and approved the existence, quality, nature, adequacy and physical
condition of utilities serving the Premises;
(viii) Investigated,
examined and approved the zoning or other legal status of the Premises or any
other public or private restrictions on use of the Premises; and
(ix) Investigated,
examined and approved the compliance and non-compliance of the Premises or
its
operation with any applicable codes, laws, regulations, statutes, ordinances,
covenants, conditions and restrictions of any governmental or quasi-governmental
entity or of any other person or entity.
C. By
closing this transaction without further documentation, Purchaser, on behalf
if
itself and all of its officers, directors, members, managers, trustees,
beneficiaries, shareholders, employees, representatives, successors and assigns,
and their affiliates (collectively, the “Releasors”), will automatically be
deemed to have waived and relinquished any and all claims, rights and remedies
Releasors may now or hereafter have against Seller, its successors, assigns,
officers, directors, members, managers, trustees, beneficiates, shareholders,
employees, representatives, and their respective successors, assigns and
affiliates (the “Seller Parties”), whether known or unknown, which may arise
from or be related to this Contract of Sale or in any manner related to the
Premises (including without limitation any past, present or future presence
or
existence of Hazardous Materials on, under or about the Premises, any past
present or future violation of any rules, regulations or laws, now or hereafter
enacted relating to the Premises, the physical or structural condition of the
Premises, the financial performance of the Premises or any other matter or
claim
in any manner related to this Contract of Sale or the Premises); provided,
however, that the release contained herein shall not be deemed to void the
effect of any representations or warranties of Seller specifically contained
in
this Contract of Sale which representations or warranties by their terms are
specifically set forth to survive Closing, or to release Seller Parties from
any
liabilities they may have under the closing documents delivered under Section
13
of this Contract. This section shall survive the Closing and the recordation
of
the deed and will not be deemed merged into the deed upon its recordation.
If
requested by Seller, Purchaser agrees to execute a separate release and waiver
at the Closing confirming and acknowledging the foregoing.
5
D. Purchaser
acknowledges that Seller may have information concerning the
condition of the property, including information about its environmental
and/or structural condition including possibly prior environmental or structural
inspection reports. Purchaser also specifically acknowledges
that Seller is under no obligation or duty to disclose such
information to Purchaser, other than as specifically agreed to herein, and
that Purchaser is not entitled to and does not expect any such
disclosure other than as specifically agreed to herein. Purchaser acknowledges
that Seller does not wish to expose itself to any potential claims (including
without limitation that any such information (including without limitation
environmental and building condition reports) is in any manner deficient or
that
the information disclosed is not all of the relevant information that Seller
may
have on the matter) and Purchaser agrees that it has or will be having its
own
environmental and structural reports commissioned by licensed and insured
consultants chosen by Purchaser and that Purchaser will be relying solely on
those reports in making any assessments or conclusions as to the environmental
and/or physical condition of the Premises. Purchaser agrees that Seller shall
have no obligation to provide any information regarding the environmental or
physical condition of the Premises but in the event that Seller should provide
any such information (notwithstanding that Seller has no obligation to do so),
Purchaser acknowledges that any such information may not be all such information
available to Seller on any particular topic. Purchaser hereby waives any claim
against Seller and the Seller Parties related to any such information, except
for any claims arising out of the breach of any representations and warranties
specifically set forth herein (including without limitations claims that such
information is wrong, is inaccurate, is incomplete or that Seller knew or should
have known that such information is wrong, is inaccurate and/or is incomplete).
E. [INTENTIONALLY
DELETED]
F. This
Section shall survive the Closing or earlier termination of this Contract of
Sale.
4. Seller
Representations.
A.
Seller warrants and represents that attached hereto as Exhibit B is a copy
of a
rent roll for the Premises which is materially true and correct as of the date
thereon. Seller represents and warrants that it will make available to Purchaser
during the Due Diligence Period, copies or originals of all lease files in
its
possession or in possession of the management company. However, since Seller
has
only recently acquired the Premises by deed-in-lieu of foreclosure Seller makes
no representations or warranties that the lease files it possesses are complete
or accurate. Seller represents and warrants that it has no knowledge of any
leases other than as disclosed to Purchaser on Exhibit
B,
and
that there are no written or oral agreements with tenants, to its knowledge,
other than as disclosed on Exhibit
B.
B.
Except
as
may be listed on Exhibit C attached hereto, Seller warrants and represents
that
to its knowledge no tenant at the Premises is in monetary default.
6
C. Seller
warrants and represents that Seller has not nor will it in the future collect
rent more than thirty (30) days in advance, nor does it have any knowledge
that
there are rents that have been prepaid more than thirty (30) days in advance
except as may be specifically listed on Exhibit
B
and
identified as prepaid rents.
D. Seller
warrants and represents that it has no knowledge that there are any service
contracts pending in respect of the Premises that are not terminable on thirty
(30) days or less notice, except those which Seller will disclose to Purchaser
during the Due Diligence Period.
E. Seller
warrants and represents that there are no employees at the Premises who
Purchaser would be responsible for following Closing.
F. As
of the
date hereof, Seller warrants and represents that it has no knowledge of any
pending or contemplated condemnation proceedings affecting the Premises or
any
part thereof.
G. Seller
warrants and represents that it has not received, nor to its knowledge have
there been issued, any notices of non-compliance of the Premises or its
operation with any applicable codes, laws, regulations, statutes, ordinances,
covenants, conditions or restrictions of any governmental or quasi-governmental
entity or of any other person or entity, which have not been fully and duly
complied with.
H. Seller
warrants and represents that, to the best of its knowledge, any and all state,
federal, and municipal payroll taxes, including, but not limited to,
unemployment taxes, due for employees of the Property have been properly paid
and will continue to be properly paid prior to Closing.
I. The
warranties and representations contained in this Section 4 shall survive the
Closing for a period of six (6) months.
5. Title.
A.
Purchaser agrees to promptly order a commitment for title insurance from Escrow
Agent.
Seller
agrees to promptly furnish to Purchaser an updated ALTA survey of the Premises.
Purchaser shall have until the end of the Due Diligence Period to notify Seller
in writing of any objections it may have to said title commitment or survey,
otherwise Purchaser shall be deemed to have waived any objections it may have
to
Seller's title to the Premises and shall be required to close on its acquisition
of the Premises without offset or abatement. Purchaser agrees to take title
if
insurable by Escrow Agent at standard premiums and subject only to the Permitted
Exceptions (hereafter defined). If Purchaser shall timely notify Seller of
a
defect in Seller's title or survey, Seller shall notify Purchaser within ten
(10) days after receipt of such notice whether Seller will attempt to cure
such
defects. If Seller elects to cure such defects, then Seller shall be entitled,
at its option, to extensions of the Closing Date (hereafter defined) for up
to
thirty (30) days in the aggregate to attempt to cure such defect(s). If Seller
shall have elected to attempt to cure such defects and should Seller not cure
such defect(s) regardless of the reason within ten (10) days prior to the
Closing Date, or if Seller elects not to cure such defects, then Purchaser
shall
have the option to close on its purchase of the Premises in accordance with
the
terms hereof, with no abatement or offset, or to terminate this Contract, in
which event the Downpayment, together with interest thereon, shall be returned
to Purchaser and the parties shall have no other liability to each other.
Purchaser shall have three (3) days following its receipt of an update title
commitment (but in no event later than the Closing Date) to notify Seller of
any
new title defects raised thereby which did not exist at the time of the issuance
of the initial title commitment or survey and the provisions above of this
Paragraph shall apply in respect of such new title defects.
7
B.
The
Premises are sold subject to the following (collectively, the "Permitted
Exceptions"):
(1) any
matters of record (other than liens or judgments for the payment of money)
which
do not adversely affect the marketability or insurability of title;
(2) current
city, state and county ad valorem taxes not yet due and payable;
(3) easements
and rights-of-way for the installation or maintenance of public utilities,
streets and sidewalks, such do not interfere with the operation of the
Premises;
(4) the
rights of tenants, as tenants only, under the apartment leases; and
(5) such
other matters, if any, as are not objected to by Purchaser as provided in A
above or which are accepted by Purchaser.
Notwithstanding
anything in this agreement to the contrary, under no circumstances shall any
liens or mortgages or deeds of trust, mechanic’s liens, attachments, liens to
secure the payment of income taxes of Seller or Seller’s constituents, or
delinquent property taxes against the Property be considered to be Permitted
Exceptions and Purchaser’s failure to object to same shall not be deemed to be a
waiver by Purchaser.
C. Purchaser
agrees to accept a limited warranty deed (or the local equivalent), in form
satisfactory for recording, for the sale of the Premises.
6. Acceptance
of Deed.
The
acceptance of the deed by Purchaser shall constitute and be deemed and
considered full compliance by Seller of all the terms and conditions of this
Contract of Sale on the part of Seller to be performed. It is further expressly
agreed that none of the provisions of this Contract of Sale shall survive the
delivery and acceptance of the deed, except insofar as may herein otherwise
be
expressly and specifically provided.
7. Inspections.
A. At
Purchaser's cost and expense, Purchaser and its advisors shall be permitted
to
inspect the Premises for structural integrity, compliance with applicable laws,
to perform an environmental audit of the Premises, to review the historical
and
projected financial information relative to the operations of the Premises
and
any such other matters as Purchaser shall deem significant (the "Inspections").
Purchaser agrees to indemnify and hold harmless Seller from any damage to person
or property that may be caused by the Inspections. Purchaser shall not do any
invasive testing (i.e. conducting borings) without the prior written consent
of
Seller, which consent shall not be unreasonably withheld.
8
B.
Purchaser
shall have until 5:00 p.m., CDT on the date which is 45 days after the Effective
Date (as hereinafter defined) (the “Due Diligence Period”) in which to conduct
the Inspections and to conduct all such other investigations of the Premises
as
Purchaser desires necessary to determine whether the Premises is suitable and
satisfactory to Purchaser. Purchaser may, in Purchaser’s sole discretion and for
any reason, terminate this Contract at any time prior to the end of the Due
Diligence Period by giving written notice to Seller of such election. In the
event Purchaser so terminates this Contract then the Downpayment shall be
immediately returned to Purchaser, except for the sum of $100 which shall be
retained by Seller as full consideration for the execution of this Contract
and
the parties shall have no liability to each other.
C. Seller
agrees to cooperate, and to cause its property manager to cooperate, with
Purchaser in connection with the Inspections referenced above and to provide
access to the Premises in connection therewith (subject to the provisions of
applicable leases).
8. No
Financing Contingency.
It is
expressly understood and agreed that the obligations of Purchaser hereunder
are
NOT contingent on Purchaser being able to secure financing for all or any
portion of the purchase price.
9. Authorization
of Purchaser and Seller.
A.
Purchaser warrants and represents that it was duly organized and is in good
standing in its jurisdiction of organization and that it is in good standing
in
the State in which the Premises is located. Purchaser warrants and represents
that it has the authority to enter into this Contract of Sale and agrees to
supply to Seller such information as Seller may require (such as its certificate
of incorporation, by-laws and resolutions adopted by its board of directors)
to
establish to Seller's reasonable satisfaction the accuracy of the warranties
and
representations contained in this paragraph. Purchaser represents that its
signatory is fully authorized to execute and deliver this Contract of Sale
on
its behalf.
B.
Seller
warrants and represents that it was duly organized and is in good standing
in
its jurisdiction of organization and that it is in good standing in the State
in
which the Premises is located. Seller warrants and represents that it has the
authority to enter into this Contract of Sale and agrees to supply to Purchaser
such information as Purchaser may require (such as its articles of organization,
operating agreement and resolutions adopted by its members) to establish to
Purchaser's reasonable satisfaction the accuracy of the warranties and
representations contained in this paragraph. Seller represents that its
signatory is fully authorized to execute and deliver this Contract of Sale
on
its behalf.
9
10. Included
Premises.
This
sale includes all the right, title and interest of Seller in and to all
easements, rights of way, privileges, transferrable permits, records, reports,
transferrable licenses, appurtenances and rights to the same belonging to and
inuring to the benefit of the Premises, supplies, fixtures and articles of
personal property (including, but not limited to, machinery, computers, drills
and other tools, snow removal equipment, landscaping equipment, and all other
personal property located in apartments at the Premises including without
limitation (as applicable) air conditioners, dishwashers, refrigerators and
stoves) attached to or appurtenant to the Premises or used in connection with
the operation of the Premises and owned by Seller. This sale also includes
all
the right, title and interest of Seller in and to any intangible property
associated with the Premises, including, without limitation, building and trade
names and all of Seller’s interest in and to any oral or written lease, covering
any portion of the Premises.
11. Closing
Costs.
A.
Purchaser shall pay for all of its costs of closing including its own attorney
fees and Purchaser shall pay for the transfer taxes, stamps and recording fees
and costs (and similar items) in respect of the sale. Seller shall pay for
all
of its costs of closing including its own attorney fees and Seller shall pay
for
the cost of Purchaser’s standard title insurance premiums and for the cost of an
updated survey certified in favor of Purchaser. The parties shall split the
costs, if any, of Escrow Agent for serving as escrow and closing agent for
this
transaction.
B. Real
property taxes, rents, wages, utilities, water/sewer charges and other operating
expenses shall be adjusted as of the day before the Closing Date. For delinquent
rent not adjusted pursuant to the previous sentence and received after the
Closing Date, Purchaser shall be entitled to credit first the month during
which
the rent is received and then shall apply the balance, if any, to unpaid rent
for the immediately preceding month(s) and agrees to send to Seller its prorata
share, if any, of such rent. Purchaser agrees to use its good faith efforts
to
attempt to collect such delinquencies and Seller shall retain its contract
rights as against the delinquent tenants for such delinquent rent, but Seller
shall have no right to terminate any lease. If the actual taxes or other charges
shall not have been set by the Closing Date, the apportionment shall be upon
the
basis of the tax rate (or other charge) for the previous year applied to the
latest assessed valuation and such taxes shall be reprorated once the final
tax
bills for the year of Closing are available. Seller shall be responsible to
pay
the installments of any special assessments that are due and payable through
the
Closing Date and the Purchaser shall be responsible for the installments for
the
periods following the Closing Date.
12. Closing
Date.
A. The
parties agree that the closing (the "Closing") shall occur on or before thirty
(30) days following the expiration of the Due Diligence Period (the "Closing
Date"). The Closing shall take place in escrow through the offices of Escrow
Agent.
B.
Notwithstanding anything contained in this Contract of Sale to the contrary
it
is understood and agreed that in the event of any default on the part of
Purchaser, Seller agrees to look solely to the Downpayment in accordance with
the terms hereof as its liquidated damages and waives any claim for specific
performance or any other claim either against the Purchaser or against any
person disclosed or undisclosed. In the event Seller shall default hereunder
(or
in the event of any claim of Purchaser against Seller related to this Contract
of Sale or the Premises other than a breach of any representations, warranties
or agreement which should survive the Closing), except as specifically set
forth
herein, Purchaser's sole right shall be to either recover its Downpayment with
interest thereon or to seek specific performance of this Contract of Sale,
with
it being understood that Seller shall in no event be liable for consequential
or
other monetary damages in respect of this Contract of Sale, the Premises or
the
transaction contemplated hereby. Seller and Purchaser acknowledge that the
amount of damages of Seller occasioned by a default of Purchaser hereunder
would
be difficult or impossible to accurately predict and Seller and Purchaser,
after
consultation with counsel of their own choosing, agree that the liquidated
damages provided for in this paragraph are reasonable sums to be used as
liquidated damages. In connection with any obligations which are specifically
agreed herein to survive the Closing, a party may be entitled to monetary
damages from the other, but shall not be entitled to any special or
consequential damages.
10
13. Closing
Documents.
A.
Seller agrees to execute and deliver to Purchaser on the Closing Date all
documents, in form reasonably satisfactory to Purchaser, necessary to effectuate
the provisions hereof including, without limitation:
a.
The
deed.
b.
An
assignment and assumption of leases, together with appropriate indemnifications,
together with an assignment of the security deposits, if any, held in respect
of
the leases as listed on the then rent roll.
c.
A
notice of sale to the tenants, if any, of the Premises directing the tenants
to
make all further rent payments to Purchaser as Purchaser may
direct.
d.
The
original lease and property files and keys in Seller's possession.
e.
An
affidavit pursuant to Section 1445 of the Internal Revenue Code, as
amended.
f.
A xxxx
of sale covering all personal property and intangible property referred to
in
Section 10 hereof.
g.
Such
other documents that shall reasonably be required to consummate the transactions
herein contemplated, including an Owner’s Affidavit in such form as may be
required by the title company in order to allow them to remove the related
standard exceptions from the title policy.
11
B. Purchaser
agrees to execute and deliver to Seller on the Closing Date all documents,
in
form reasonably satisfactory to Seller, necessary to effectuate the provisions
hereof including, without limitation:
a.
The
balance of the cash portion of the purchase price referred to
hereinabove.
b.
The
assignment and assumption of the leases, together with appropriate
indemnifications.
c.
Such
other documents that shall reasonably be required to consummate the transactions
herein contemplated.
14.
Pre-Closing
Obligations of Seller.
Between
the date hereof and the Closing Date, Seller shall:
a.
Keep
the Premises and all parts thereof in the same state of repair and condition
as
they are currently in (including making ordinary repairs and replacements)
reasonable wear and tear excepted; provided that nothing in this Contract shall
require Seller to expend more than $10,000.00 in the aggregate on repairs and/or
replacements to the Premises. Seller shall promptly notify Purchaser of any
repairs or replacements which exceed the $10,000 limitation as set forth above,
and which Seller does not intend to complete; Purchaser shall then have 10
days
from such notification within which to terminate this Contract if it so chooses
and receive an immediate refund of the Downpayment.
b.
Not
apply all or any part of the security deposit of any tenant, to the extent
Seller shall have any, unless such tenant's lease has terminated and such tenant
has vacated the Premises.
c.
Not
withdraw, settle or compromise any reduction proceeding affecting real estate
taxes assessed against the Premises without the prior consent of Purchaser
which
consent shall not be unreasonably withheld or delayed. Any future refunds and
fees of counsel shall be prorated between Purchaser and Seller as of the Closing
Date. This Paragraph 14(c) shall survive the Closing and the delivery of the
deed.
d.
Not
remove from the Premises any fixture, equipment or personal property included
in
this sale unless the same is replaced with items of at least equal value prior
to the Closing Date.
e.
Subject to the leases for the Premises, permit Purchaser or its representatives
access to the Premises upon reasonable prior notice and at reasonable
times.
12
f.
Seller
will not alter, amend or modify the terms and provisions of any leases, or,
enter into new tenant leases with a term in excess of twelve (12) months, or
at
rental rates below those set forth in the rent roll, without the prior written
approval of Purchaser.
g.
Seller
will not grant or purport to create to any third party any interest in the
Premises or any part thereof or further encumber the Premises without the prior
written approval of the Purchaser.
h.
Seller
will not enter into any maintenance, management or other service contracts
without the prior written approval of Purchaser.
i.
Seller
will cause fire and extended coverage insurance relating to the Premises to
be
maintained in full force and effect at an amount no less than the full
replacement cost of the Premises.
j.
Seller
will promptly notify Purchaser in writing of any violation, alleged violation
or
anticipated violation, or any law, regulation, ordinance, order or other
requirement of any governmental authority having jurisdiction over or affecting
the Premises, or any part thereof, of which it is notified.
k.
Seller
will not, without the prior written consent of Purchaser, permit any structural
modifications or additions to the Premises.
l.
Seller
shall not execute an assignment of any of the tenant leases or an assignment
of
any rent accruing under a tenant lease.
m.
Seller
shall continue to maintain, operate and manage the Premises in the same manner
that Seller has heretofore maintained and operated the Premises, and shall
use
good faith efforts to preserve for Purchaser the relationships of Seller and
tenants.
15. Condemnation.
A. As
of the date hereof, Seller has no knowledge of any pending or contemplated
condemnation proceedings affecting the Premises or any part
thereof.
B.
If
prior to the Closing, all of the Premises shall be taken by condemnation,
eminent domain or deed in lieu thereof, this Contract of Sale shall be
automatically terminated, the Downpayment together with any interest thereon
shall be returned to Purchaser and thereupon neither party shall have any
further liability or obligation to the other. If prior to the Closing Date,
a
portion, but less than all, of the Premises shall be taken by condemnation,
eminent domain or deed in lieu thereof, which shall have a material, adverse
financial impact on the value or use of the Premises then Purchaser may, at
Purchaser’s option, terminate this Contract of Sale by sending written notice
thereof to Seller within thirty (30) days of such condemnation or other taking,
in which event the Downpayment and the interest thereon shall be returned to
Purchaser and thereupon neither party shall have any further liability or
obligations to the other. If this Contract of Sale is not terminated as provided
above Purchaser shall (a) accept title to the Premises subject to the
condemnation or other taking, and (b) pay in full the purchase price and on
the
Closing Date the net proceeds of the award or payment (after payment of all
actual collection costs) shall be assigned by Seller to Purchaser and net monies
theretofore received by Seller in connection with such condemnation or other
taking shall be paid over to Purchaser or allowed as a credit against the
purchase price hereunder (unless previously used by Seller in connection with
the repair of the Premises in connection therewith). This Paragraph shall govern
to the extent inconsistent with any applicable law.
13
16. Casualty.
The
risk of loss or damage or destruction to the Premises by fire or other casualty
is assumed by Seller until the Closing, but, except as specifically set forth
in
this Paragraph, Seller shall not be obligated to repair or replace any such
loss
or damage. In the event of fire or other casualty, Seller shall have thirty
(30)
days to notify Purchaser whether it intends to rebuild the Premises, but if
Seller shall fail to notify Purchaser of its election within such thirty (30)
day period Seller shall be deemed to have elected not to rebuild. If Seller
elects (or is deemed to have elected) not to repair or replace any such loss
or
damage to the Premises then Purchaser shall have the option of declaring this
Contract of Sale terminated within thirty (30) days of Seller's election not
to
rebuild, in which event Seller or Purchaser shall instruct Escrow Agent to
refund to Purchaser, with the interest earned thereon, the Downpayment whereupon
this Contract of Sale and all rights of Purchaser hereunder and to the Premises
shall terminate and neither Seller nor Purchaser shall have any further claim
against the other; provided that if neither party shall have elected to
terminate this Contract as aforesaid then Purchaser shall close title in
accordance with this Contract and pay in full the Purchase Price, without any
abatement thereof or claim against Seller for such loss or damage, and accepting
an assignment, without recourse, of Seller's rights, if any, to any payments
to
be made under any applicable hazard insurance policies, if any, together with
any payments under such policies made to Seller prior to the Closing not
expended to repair or replace such loss, damage or destruction and Seller shall
credit to Purchaser the amount of any insurance deductible. If Seller elects
to
repair or replace any such loss or damage, Seller shall be entitled to
reasonable adjournments of the Closing Date in which to perform the work, not
exceeding one hundred twenty (120) days in the aggregate. If Seller elects
to
repair or replace any such loss or damage to the Premises and if such loss
or
damage is not repaired (substantial completion thereof) prior to the Closing
Date, as adjourned by Seller pursuant to this Paragraph, Purchaser shall have
the option of: (a) declaring this Contract of Sale terminated, in which event
Seller or Purchaser shall instruct Escrow Agent to refund to Purchaser, with
the
interest earned thereon, the Downpayment whereupon this Contract of Sale and
all
rights of Purchaser hereunder and to the Premises shall terminate and neither
Seller nor Purchaser shall have any further claim against the other or (b)
closing title in accordance with this Contract of Sale and paying in full the
Purchase Price, without any abatement thereof or claim against Seller for such
loss or damage, and accepting an assignment, without recourse, of Seller's
rights, if any, to any payments to be made under any applicable hazard insurance
policies for work not yet completed, together with any payments under such
policies made to Seller prior to the Closing not expended to repair or replace
such loss, damage or destruction; provided that if Purchaser shall have failed
to timely make an election it shall be deemed to have chosen (b) above.
Notwithstanding the foregoing, if the cost of the repairs and replacements
is
less than $25,000, as determined by an independent third party professional
chosen by Seller and acting reasonably, Purchaser shall close title with a
credit against the purchase price in such amount which shall not exceed $25,000
and Seller shall retain the rights to the insurance proceeds, if any, in respect
of such casualty. This Paragraph shall govern to the extent inconsistent with
any applicable law.
14
17. Assignment.
Purchaser will not, without the prior written consent of Seller (which consent
may be withheld in Seller's absolute discretion), sell, assign or transfer
its
interest in this Contract of Sale. The sale of more than a 25% interest in
Purchaser (if Purchaser shall be other than a natural person) shall be deemed
an
assignment requiring the consent of Seller as set forth in the preceding
sentence. Notwithstanding the foregoing, Purchaser shall be permitted to assign
this Contract to a corporation, partnership or other entity which is
beneficially owned in whole or in part by Xxxxxxx X. Xxxxxxx, Xxxxx X. Xxxx,
III
and/or Xxxx X. Xxxxx. Any purported assignment of this Contract of Sale in
violation of this Paragraph 17 shall be ineffective and void ab
initio.
18. Brokers.
Purchaser and Seller each represents and warrants that, except for CB Xxxxxxx
Xxxxx, Inc. (“Broker"): (i) it has not dealt with any broker in respect of the
sale of the Premises to Purchaser and (ii) no broker brought the Premises to
the
attention of the Purchaser or was otherwise involved in the Purchaser's interest
in the Premises. Seller agrees to compensate Broker as per a separate agreement.
Each party shall indemnify, defend and hold harmless the other for any claims
which would constitute a breach of the foregoing representations and warranties.
The provisions of this Paragraph shall survive the Closing and the delivery
of
the deed or the other termination of this Contract of Sale.
19. -Section
1031 Tax Deferred Exchange.
At the
option of either Seller or Purchaser, each party agrees to cooperate with the
other to qualify this transaction as a like-kind exchange of property described
in Section 1031 of the Internal Revenue Code of 1986, as amended. Seller and
Purchaser further agree to consent to the assignment of this Contract of Sale
to
a "Qualified Intermediary" and/or take such other action reasonably necessary
to
qualify this transaction as a like-kind exchange provided that (i) such exchange
shall be at the cost and expense of the requesting party, (ii) the other party
shall incur no liability as a result of such exchange and (iii) no such
assignment of this Contract of Sale shall relieve the requesting party of its
obligations under this Contract of Sale and the requesting party shall remain
liable for the performance of its obligations hereunder including, without
limitation, the representations, warranties, and covenants given by it under
this Contract of Sale.
20. OFAC
Matters.
Each of
Seller and Purchaser represent, warrant and agree as follows as applicable
to
each of them:
A.
Seller
and Purchaser, and all direct or to their knowledge indirect beneficial owners
of Seller and Purchaser, are in compliance with all laws, statutes, orders,
legislation, rules and regulations of any federal, state or local governmental
authority in the United States of America applicable to such Persons (as
hereinafter defined), including, without limitation, the requirements of
Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) (the “Order”) and
other similar requirements contained in the rules and regulations of the Office
of Foreign Asset Control, Department of the Treasury (“OFAC”) and in any
enabling legislation or other Executive Orders in respect thereof (the Order
and
such other laws, statutes, rules, regulations, legislation, or orders are
collectively called the “Orders”). For purposes of this subsection, “Person”
shall mean any corporation, partnership, limited liability company, joint
venture, individual, trust, real estate investment trust, banking association,
federal or state savings and loan institution and any other legal entity,
whether or not a party hereto; and
15
B. Neither
Seller nor Purchaser nor any of the direct or to their knowledge indirect
beneficial owners of Seller nor Purchaser:
1. is
listed
on the Specially Designated Nationals and Blocked Persons List maintained by
OFAC pursuant to the Order and/or on any other list of terrorists or terrorist
organizations maintained pursuant to any of the rules and regulations of OFAC
or
pursuant to any other applicable Orders (such lists are collectively referred
to
as the “Lists”);
2. has
been
determined by competent authority to be subject to the prohibitions contained
in
the Orders;
3. is
owned
or controlled by, nor acts for or on behalf of, any Person on the Lists or
any
other Person who has been determined by competent authority to be subject to
the
prohibitions contained in the Orders;
4. shall
transfer or permit the transfer of any interest in Seller or such parties to
any
Person who is, or whose beneficial owners are, listed on the Lists;
or
5. shall
assign this Contract of Sale or any interest herein, to any Person who is listed
on the Lists or who is engaged in illegal activities (or to a Person in which
a
Person who is listed on the Lists or who is engaged in illegal activities has
any beneficial interest).
This
Section 20 shall survive the Closing.
21. Miscellaneous.
A. If
either party shall be required to employ an attorney to enforce or defend the
rights of such party related to this transaction or the Premises, the prevailing
party shall be entitled to recover reasonable attorneys' fees. This paragraph
shall survive the Closing or earlier termination of this Contract of
Sale.
B.
This
Contract of Sale contains the complete agreement between the parties, supersedes
all prior agreements (oral or written) and no term hereof may be waived or
amended except by the written agreement of the party to be charged by such
waiver or amendment. This Contract of Sale has been negotiated and shall not
be
construed against its drafter. The parties agree that there are no oral
agreements, understandings, representations or warranties which are not
expressly set forth herein.
16
C. All
notices, demands and other communications required or permitted to be given
hereunder shall be in writing and shall be deemed to have been properly given
if
delivered by hand or sent by United States registered or certified mail, return
receipt requested, or sent by Federal Express, United Parcel Service or other
reputable overnight delivery service, to Seller (for the attention of Xxxxxxx
X.
Xxxxx) at its address set forth above with a copy to Xxxx X. Xxxxx, TRB
Chattanooga LLC, 00 Xxxxxx Xxxx Xxxx, Xxxxx Xxxx, Xxx Xxxx 00000 and with a
copy
to Xxxx X. XxXxxxx, Esq., Xxxx and Xxxxxxx, PLC, Xxxxx 0000, Xxx Xxxxxxxxx
Xxxxx, 000 0xx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxx 00000-0000 or at such other
addresses as it may designate by notice hereunder and to Purchaser at its
address set forth above (for the attention of Xxxx X. Xxxxx) with a copy to
Xxxx
X. Xxxx, Xx., Esq., Xxxxxx & Marin PLLC, 000 0xx Xxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxxx, or at such other addresses as it may designate by notice hereunder.
The address for Escrow Agent is 000 Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx,
Xxxxxxxxx 00000.
D. The
respective attorneys for Seller and Purchaser are authorized to give and receive
any notices required or permitted to be sent hereunder and are permitted to
agree on adjournments of the Closing Date.
E. This
Contract of Sale shall not be binding until executed and delivered by Seller
and
Purchaser. Once fully executed and delivered, this Contract of Sale shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, executors, administrators, successors and permitted assigns.
F. This
Contract of Sale shall be governed by and construed in accordance with the
laws
of the State in which the Premises is located.
G. Purchaser
agrees to make the checks or wire payments for the Purchase Price to such
parties as Seller shall direct.
H. If
any
provision hereof shall be deemed unenforceable, the remaining terms of this
Contract of Sale shall be unaffected thereby and shall remain in full force
and
effect.
I. The
headings herein are for reference purposes only and shall not be deemed to
affect the interpretation of this Contract of Sale.
J. SELLER
AND PURCHASER HEREBY WAIVE ANY AND ALL RIGHTS THAT EITHER MAY HAVE TO A JURY
TRIAL IN RESPECT OF ANY DISPUTE CONCERNING THIS CONTRACT OF SALE OR THE
PREMISES.
17
K. Each
of
Seller and Purchaser expressly understands and agrees and acknowledges that
neither party would have entered this Contract of Sale without the express
provisions of this Subparagraph K. Notwithstanding anything to the contrary
set
forth in this Contract of Sale, in no event shall either party ever be liable
to
the other party for consequential, compensatory or any other monetary damages
in
respect of this Contract of Sale, the Premises or the transaction contemplated
hereby, except in connection with any claims arising out of those obligations
set forth herein that specifically survive Closing. In connection with any
obligations which are specifically agreed herein to survive Closing, the parties
agree that a party may be entitled to monetary damages from the other, but
shall
not be entitled to any special or consequential damages.. In addition, each
party hereby agrees that in no event shall either party make or bring any claim
for any matter whatsoever against any member, shareholder, partner, officer,
director, trustee, employee, agent, representative or counsel of or for the
other party. Each party acknowledges that it agrees to this Subparagraph K
and
that it has consulted with counsel of its own choosing in so agreeing. This
Subparagraph shall survive the Closing or earlier termination of this Contract
of Sale.
L. Purchaser
understands and agrees that it shall not be permitted to record this Contract
or
a memorandum hereof and any breach of this provision shall constitute a default
by Purchaser under this Contract in which event Seller shall be entitled to
the
Downpayment, this Contract shall be terminated and Seller shall (notwithstanding
any other provisions of this Contract) be entitled to such remedies as are
available in law or equity.
M. Time
is
of the essence in this Contract.
N. For
the
purpose of this agreement, all references to the Effective Date shall mean
the
latest
date
upon which the Seller or Purchaser executes this agreement. In the event any
time period specified in this agreement expires on a Saturday, Sunday or banking
holiday, then the time period so expiring shall be extended to expire on the
next business day.
[SIGNATURES
ON FOLLOWING PAGE]
18
IN
WITNESS WHEREOF, the undersigned have executed and delivered this Contract
of
Sale as of the date first hereinabove written.
|
Date
Signed: ______________________
|
TRB
CHATTANOOGA LLC, as Seller
|
|
Tax
ID # ________________________
|
|
|
|
By:_______________________________
|
|
|
Xxxx
X. Xxxxx
|
|
|
Senior
Vice President of the sole member
|
|
Date
Signed: _____________________
|
XXXXXXX
XXXX INVESTMENTS, INC., as
|
|
Tax
ID #________________________
|
Purchaser
|
|
|
By:_______________________________
|
|
Xxxx
X. Xxxxx
|
|
|
President
|
|
|
|
First
American Title Insurance Company, solely in its capacity as Escrow
Agent
|
|
|
By:_______________________________
|
|
|
Name:_____________________________
|
|
|
Title:_____________________________
|
19
EXHIBIT
A
Legal
Description
EXHIBIT
B
Rent
Roll
EXHIBIT
C
Delinquency
List
EXHIBIT
D
Employees
