FIRST AMENDMENT TO PURCHASE AGREEMENT
Exhibit 10.8
FIRST AMENDMENT TO PURCHASE AGREEMENT
This FIRST AMENDMENT TO PURCHASE AGREEMENT (this “Amendment”) is entered into as of May 14, 2010
(the “Amendment Date”), by and between CHICAGO TITLE LAND TRUST COMPANY, as Trustee under Trust
Number 00-0000-0 dated August 15, 1967, an Illinois Land Trust by Towne Realty, Inc. d/b/a Lincoln
Tower, Inc., as authorized beneficiary (“Seller”), and STEADFAST ASSET HOLDINGS, INC., a California
corporation, or its assigns (“Buyer”).
RECITALS
A. Seller and Buyer entered into that certain Purchase Agreement dated as of March 25, 2010
(as amended by the Letter Agreements, the “Purchase Agreement”) for the purchase and sale of that
certain real property located at 000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxx.
B. Buyer and Seller have previously extended the expiration of the Inspection Period to May
14, 2010 pursuant to that certain letter agreement dated as of April 23, 2010, that certain letter
agreement dated as of May 7, 2010 and that certain letter agreement dated as of May 12, 2010
(together, the “Letter Agreements”).
C. Buyer and Seller desire to further amend the Purchase Agreement to, among other things,
reduce the Purchase Price and provide for Seller financing, in accordance with the terms of this
Amendment.
NOW, THEREFORE, for and in consideration of the mutual promises and covenants contained
herein, and for other valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows.
1. Capitalized Terms. Capitalized terms used but not defined herein have the meanings
ascribed to them in the Purchase Agreement.
2. Amendments to Purchase Agreement.
(a) Section 1.1 of the Purchase Agreement is hereby amended and restated as follows:
“1.1. Closing. Subject to the express provisions hereof, the consummation of
the transaction contemplated by this Agreement (“Closing”) shall occur, if at all,
on a date selected by Buyer with prior reasonable notice to Seller, which date shall
be no later than July 23, 2010, and shall occur by mail through the offices of the
Title Company (defined below). Buyer may, at Buyer’s request, extend the Closing
one time for up to thirty (30) days beyond the initial Closing date, upon written
notice to Seller delivered on or before June 30, 2010.”
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(b) Section 1.14 of the Purchase Agreement is hereby amended and restated as
follows:
“1.19 Purchase Price. Nine Million Five Hundred Thousand and 00/100 Dollars
($9,500,000.00).”
(c) The last three sentences of Section 3.5 of the Purchase Agreement are hereby
amended and restated as follows:
“Buyer shall have the right during the Condominium Document Review Period (and
thereafter until June 11, 2010, to the extent provided in the next sentence), to
review the proposed Condominium Documents and provide comments thereto.
In the event Buyer objects to any aspect of the proposed Condominium Documents
using reasonable business judgment, Buyer shall give written notice to Seller on or
before May 17, 2010 specifically setting forth Buyer’s basis for such objection.
Seller shall then have until May 21, 2010 to resolve Buyer’s objection and
thereafter the surveyor shall have until June 4, 2010 to revise the Condominium Plat
to accurately reflect the Condominium Documents (after which Buyer and Seller shall
finalize any remaining issues in the proposed Condominium Documents by June 11,
2010), failing which Buyer may accept the proposed Condominium Documents and proceed
to Closing, or Buyer may terminate this Agreement upon written notice to Seller, in
which event (i) this Agreement shall terminate and be of no further force or effect,
(ii) the Deposit shall be returned to Buyer, and (iii) neither party shall have any
further liability or obligation hereunder. Upon execution by Buyer of an
application with a proposed lender (other than Seller), Buyer shall promptly provide
the proposed Condominium Documents to such proposed lender and, if and to the extent
that such proposed lender objects to any provision of the proposed Condominium
Documents, Seller shall promptly revise such Condominium Documents as required by
such lender, failing which Buyer may accept the proposed Condominium Documents and
proceed to Closing, or Buyer may terminate this Agreement upon written notice to
Seller, in which event (i) this Agreement shall terminate and be of no further force
or effect, (ii) the Deposit shall be returned to Buyer, and (iii) neither party
shall have any further liability or obligation hereunder; provided, however, that if
such proposed lender’s objections are not commercially reasonable or in good faith
or materially adversely impact the rights or obligations of the owner of Unit 1,
then Seller shall have no obligation to make such revisions and Buyer shall elect to
proceed with the Seller Financing (as defined below) even if the June 30, 2010
deadline set forth in Section 5.6 below has passed.”
(d) Section 3.6 of the Purchase Agreement is hereby amended to insert the following
at the end thereof:
“The parties hereby acknowledge and agree that on May 13, 2010, Buyer received the
revised Commitment required in the second sentence hereof and purporting to
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address the objections in the manner set forth in Seller letter dated April 16,
2010. Buyer shall have until 4:00 p.m. Central Time on May 17, 2010 to
determine if such revised Commitment complies with the requirements of the second
sentence hereof, and if it does not, Seller shall have until 4:00 p.m. Central Time
on May 19, 2010 to remedy the same, failing which Buyer shall have the
rights set forth in the fourth sentence hereof notwithstanding that the Inspection
Period shall have expired.”
(e) The first sentence of Section 4.4 of the Purchase Agreement is hereby amended
and restated in its entirety as follows:
“Seller acknowledges and agrees that, as of the date hereof, certain repairs or
modifications are required to be made by Seller at its sole costs and expense to the
Real Property relating to (y) the renovation of apartments 407, 1705 and 1712 in
accordance with rent-ready conditions consistent with the other apartments at the
Real Property, and (z) the installation of a sub-meter for any water line currently
servicing both Xxxx 0 and Unit 2 (collectively, the “Required Work”).”
(f) Section 4.4 of the Purchase Agreement is hereby further amended by inserting the
following at the end thereof:
“Notwithstanding subsection (ii) of the previous sentence, in the event that,
despite good faith diligent efforts by Seller, apartments 407, 1705 and 1712 are not
in rent-ready condition consistent with the other apartments at the Real Property by
the Closing date, then on the Closing date Seller shall deposit with Buyer an amount
reasonably determined by Buyer to be necessary to promptly complete said renovations
and, at Buyer’s option, the remaining Required Work shall be performed by Seller
(with the deposited funds being released upon lien-free completion thereof, unless
Buyer, in its sole discretion, elects to permit disbursements therefrom as and when
invoices and lien-waivers for said Required Work are received by Seller), or by
Buyer (with the deposited funds being released to Buyer as and when invoices for
said Required Work are received by Buyer).”
(g) Section 5 of the Purchase Agreement is hereby amended by inserting the following
at the end thereof as a new Section 5.6:
“5.6 Seller Financing. In the event that Xxxxxx Xxx does not provide
financing to Buyer for a portion of the Purchase Price on terms reasonably
acceptable to Buyer, then, at Buyer’s option, Seller shall provide financing for a
portion of the Purchase Price in the amount not to exceed $6,650,000.00 (the
“Maximum Seller Financing”, with the actual amount of financing provided hereunder
being the “Seller Financing”). If Buyer so elects, it shall provide written notice
of such election and the amount of the Seller Financing (not to exceed the Maximum
Seller Financing amount) to Seller on or before June 30, 2010, and the terms of this
Agreement shall automatically be revised to provide
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that at the Closing, in lieu of Purchase Price, Buyer shall pay to Seller the
difference between the Purchase Price and the Seller Financing, subject to
adjustment and proration as provided in this Agreement. The Seller Financing shall
be in the form of a Purchase Money Note (“Note”) secured by a Purchase Money Deed of
Trust (“Deed of Trust”) encumbering the Real Property. The Note shall be
non-recourse and shall be secured only by the Real Property, and shall be in the
standard form utilized by Xxxxxx Mae, with mutually acceptable modifications
thereto. The Note shall bear interest at the rate of six percent (6%) per annum
(payable monthly in arrears) and shall have a maturity date on the fifth
(5th) anniversary of the Closing (the “Initial Maturity Date”), subject,
however, to two (2) one year extensions at Buyer’s sole option provided Buyer pays
to Seller an extension fee in the amount of 25 basis points of the outstanding
principal amount of the Seller Financing on the Initial Maturity Date (or, with
respect to the second such option, on the first anniversary of the Initial Maturity
Date), and provided no default beyond applicable notice or cure periods then exists
(each, an “Extension”). The Note may be prepaid at any time without penalty. No
payments of principal shall be required under the Note prior to the Initial Maturity
Date. During the period of any Extension, the Note shall bear interest at a fixed
rate which is equal to the “Prime Rate” as published in the Wall Street Journal
immediately prior to the Initial Maturity Date plus two percent (2%), but in no
event less than six percent (6%) per annum, and principal and interest shall be
payable monthly in arrears, with the principal component being based on a 25 year
amortization schedule. The Deed of Trust shall secure payment of the Note and shall
be in the standard form utilized by Xxxxxx Xxx, with mutually acceptable
modifications thereto, but without any requirement for replacement or other reserves
or escrows for taxes or insurance. At Closing, Buyer shall provide Seller, at
Buyer’s expense, with a loan policy from the Title Company insuring the Deed of
Trust in the amount of the Seller Financing as a first lien on the Real Property
subject to no liens or encumbrances other than those existing as of the date of
Closing. Buyer shall also pay to Seller $10,000 for Seller’s legal fees and
expenses in connection with the Seller Financing and the recording costs of the Deed
of Trust, but there shall be no origination or other fees or expenses payable by
Buyer.”
(h) Section 13 of the Purchase Agreement is hereby amended by inserting the
following at the end thereof as a new Section 13.23:
“13.23. Post-Closing Operation. Concurrently with Closing, Buyer’s
management agent (“Manager”) and Seller shall execute a “Management Agreement” in
form and substance mutually acceptable to both parties with a term of three (3)
years, pursuant to which Manager shall provide to Seller administrative and
maintenance management services with respect to Unit 1 for a fee $60,000.00 per
year, payable in monthly installments in arrears; it being understood and agreed
that such fee shall be a net fee to Manager and that Seller shall be solely
responsible for all third party costs and expenses of repairs, replacement, snow
removal, waste removal, etc.”
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3. Miscellaneous. Except as herein modified or amended, the provisions, conditions
and terms of the Purchase Agreement shall remain unchanged and in full force and effect. This
Amendment may not be modified, except by an agreement in writing signed by the party against whom
enforcement of any changes, termination or waiver is sought. This Amendment shall be binding upon,
and inure to the benefit of the parties hereto, their respective legal representatives, successors
and assigns. This Amendment shall be governed by the laws of the State of Illinois, without regard
to the choice of laws rules thereof. Seller and Buyer have participated equally in the preparation
of this Amendment, and, therefore, this Amendment and each provision thereof shall not be construed
in favor of or against any party to this Amendment by reason of one party’s being deemed to
prepared this Amendment or imposed such provision.
4. Counterparts. This Amendment may be signed in one or more counterparts, which
together shall constitute one and the same instrument. Signatures shall be binding on the signer
when delivered, regardless of whether delivery is in hard copy or by electronic means
(notwithstanding any statutory or decisional law to the contrary). Any defense(s) to the
enforcement of this Amendment based on the form of signature hereto by either party are hereby
waived.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, Buyer and Seller have executed this Amendment as of the Amendment
Date.
BUYER:
| Steadfast Asset Holdings, Inc. |
|||||
| By: | /s/ Xxx Xxxxx del Rio | ||||
| Name: | Xxx Xxxxx del Rio | ||||
| Title: | Secretary | ||||
| Date: | May 14, 2010 | ||||
SELLER:
| Chicago Title Land Trust Company, as Trustee under Trust Number 00-0000-0 dated August 15, 1967, an Illinois Land Trust By: Towne Realty, Inc. d/b/a Lincoln Tower, Inc., authorized beneficiary |
||||
| By: | /s/ Xxxxxx X. Xxxxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxxxx | |||
| Title: | Vice President | |||
| Date: | May 14, 2010 | |||
Signature Page — First Amendment to Purchase Agreement
JOINDER
The undersigned hereby approves the foregoing Amendment and acknowledges and agrees that its
Joinder dated March 25, 2010 shall continue in full force and effect with respect to the Purchase
Agreement, as modified by the foregoing Amendment.
Executed as of May 14, 2010.
BENEFICIARY:
| TOWNE REALTY, INC. d/b/a LINCOLN TOWER, INC.,
as authorized beneficiary under Trust Number 00-0000-0 dated
August 15, 1967, an Illinois Land Trust |
||||
| By: | /s/ Xxxxxx X. Xxxxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxxxx | |||
| Title: | Vice President | |||
| Date: | May 14, 2010 | |||
Signature Page — First Amendment to Purchase Agreement
