EXHIBIT 10.2
CONTRACT OF SALE
THIS CONTRACT OF SALE (this "Contract of Sale") is made this __th day
of August, 2002, by and between XXXXXXX FURNITURE COMPANIES, INC., a Maryland
corporation, as seller ("Haverty"), and HAVERTACQ 11 LLC, a Delaware limited
liability company, as purchaser ("Purchaser").
WITNESSETH:
WHEREAS, Haverty is the owner of fee simple interests in the eleven
parcels of Land and the Improvements thereon located and as more particularly
described on Exhibit "A" attached hereto; and
WHEREAS, Haverty is the owner of the F&E;
WHEREAS, Haverty has agreed to sell and Purchaser has agreed to
purchase each of the Projects upon the terms and conditions hereinafter set
forth; and
WHEREAS, simultaneously with the Closing (as defined in Section 6.1),
Purchaser has agreed to lease each of the Projects to Haverty, as tenant, and
Haverty has agreed to lease the Projects from Purchaser, upon the terms and
conditions described in the form of Lease attached hereto as Exhibit "C";
WHEREAS, Haverty has agreed to indemnify Purchaser from and against any
breach by Haverty of any of its covenants, representations or warranties under
this Contract of Sale and from and against the other matters related to the
transaction as provided herein and in the Lease.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of each party to the others contained herein, the parties hereto mutually
covenant and agree as follows:
ARTICLE I
DEFINITIONS
The capitalized terms used herein and not otherwise defined shall have
the meanings assigned thereto in Appendix A or the Lease for all purposes
hereof; provided that in the event of a conflict between the terms of this
Contract of Sale and the terms of the Lease, the terms and provisions of the
Lease shall govern.
ARTICLE II
PURCHASE AND SALE; PURCHASE PRICE
Subject to the terms and conditions contained herein, Haverty agrees to
sell each of the Projects to Purchaser and Purchaser agrees to purchase each of
the Projects from Haverty at the respective purchase prices ("Purchase Price")
for each Project as set forth on Schedule I attached hereto. The aggregate
purchase price ("Aggregate Purchase Price") for the Projects shall be an amount
equal to [Forty-One Million Seven Hundred Eighty Nine Thousand Eight Hundred One
and 00/100 Dollars ($41,789,801.00)]. The Aggregate Purchase Price shall be
payable in cash by wire transfer to Escrowee (as defined in Section 6.2) at the
Closing.
ARTICLE III
TITLE AND SURVEY
Section 3.01. Haverty has heretofore furnished to Purchaser commitments
from the Title Company to issue to Purchaser or its designee at Closing extended
coverage ALTA Owner's Title Policies (the "Owner's Title Policy") in the amount
of the Purchase Price for each Project, naming Purchaser as the proposed
insured, which commitments obligate the Title Company to insure fee simple title
to each of the Projects subject only to the Permitted Exceptions set forth in
Exhibit "B" attached hereto (and in no event the standard exceptions which are
capable of deletion), which commitments hereby are in form and substance
reasonably acceptable to Purchaser. Haverty has also heretofore furnished to
Purchaser commitments from the Title Company to provide to Lender ALTA Loan
Policies (the "Mortgage Title Policy") with coverage amounts for each Project
equaling in the aggregate the amount of the loan to be obtained by Purchaser to
acquire the Projects and otherwise shall be in form and substance reasonably
acceptable to Lender.
Section 3.02. Haverty shall deliver to Purchaser the Surveys in form
and substance satisfactory to Purchaser and to Lender (the "Surveys").
Section 3.03. The property information and all other information, other
than matters of public record or matters generally known to the public,
furnished to, or obtained through inspection of the Projects by, Purchaser, its
affiliates, lenders, employees, attorneys, accountants and other professionals
or agents relating to the Projects, will be treated by Purchaser, its
affiliates, lenders, employees, agents, and current and prospective investors as
confidential, and Purchaser shall take commercially reasonable steps, except as
required by law, not to disclose such information other than on a need-to-know
basis and to Purchaser's consultants who agree to take commercially reasonable
steps not to disclose such information, and will be returned to Haverty by
Purchaser if the Closing does not occur. The confidentiality provisions of this
Section 3.03 shall not apply to any disclosures made by Purchaser as required by
law, by court order, or in connection with any subpoena served upon Purchaser;
provided Purchaser shall provide Haverty with written notice before making any
such disclosure.
ARTICLE IV
PURCHASER'S CONDITIONS PRECEDENT TO CLOSING
Purchaser's obligation to consummate the transaction described in this
Contract of Sale is subject to the satisfaction or written waiver of the
following conditions:
Section 4.01. Purchaser shall have approved the commitment for the
Owner's Title Policy furnished by Haverty under Section 3.01 and the Title
Company shall remain committed thereunder to issue to Purchaser the Owner's
Title Policy and the Mortgage Title Policy contemplated thereunder.
Section 4.02. Purchaser shall have approved the Surveys furnished by
Haverty under Section 3.02.
Section 4.03. Haverty shall have delivered to Purchaser a Phase I
environmental report addressed to Purchaser and, if as a result of such report,
facts are revealed that would reasonably necessitate a Phase II environmental
report, a Phase II environmental report addressed to Purchaser, each in form and
substance reasonably satisfactory to Purchaser stating that the Project in
question is in compliance with Environmental Laws and that no Hazardous
Materials are present or have been Released or are threatened to be Released at,
on, under, within or emanating to or from the Project in question.
Section 4.04. Purchaser shall have received an appraisal of each of the
Projects addressed to Purchaser substantiating the fair market value of each of
the Projects as equal to the allocated portion of the Purchase Price
attributable thereto performed by Xxxxxxx & Xxxxxxxxx and otherwise in form and
substance acceptable to Purchaser in its sole discretion. Purchaser shall be
satisfied that the Projects shall be in the condition described in such
appraisals. The appraiser shall certify to Purchaser the remaining useful life
of the Improvements.
Section 4.05. Purchaser shall have completed all other inquiries,
investigations, review and other due diligence matters pertaining to the
Projects, and Haverty as Purchaser elects and Purchaser shall have approved the
results of the same in the sole discretion of Purchaser. Each of the Projects
shall be acceptable to Landlord and Lender in their sole discretion.
Section 4.06. On the Closing Date, Haverty shall not be in breach of
any covenant or agreement to be performed by Haverty under this Contract of Sale
or under the Other Operative Documents.
Section 4.07. Purchaser's credit committee shall have approved the
transactions contemplated by this Contract of Sale, the Lease and the Operative
Documents.
Section 4.08. No Material Adverse Change to any Project or any part of
any thereof shall have occurred from the date of inspection by either Landlord
or Lender.
Section 4.09. Haverty shall have delivered evidence satisfactory to
Landlord and Lender to the effect that all insurance required by the Lease to be
maintained with respect to the Premises is in full force and effect and all
premiums with respect thereto have been paid in full.
Section 4.10. Haverty shall have executed and delivered the Lease in
the form attached hereto as Exhibit "C".
Section 4.11. All representations and warranties made by Haverty in
this Contract of Sale and the other Operative Documents shall be true and
correct as of the Closing Date.
Section 4.12. Lender shall have provided non-recourse first mortgage
financing to Purchaser with respect to the Projects with a term of not less than
10 years, in an amount not less than 68% of the Aggregate Purchase Price, with
an amortization schedule of not less than 25 years and otherwise upon terms and
conditions acceptable to Purchaser.
Section 4.13. Purchaser shall have received a tax opinion from an
independent counsel selected by Purchaser as to certain tax matters in form and
substance satisfactory to Purchaser and its tax counsel.
Section 4.14. Purchaser shall have received the opinions from Haverty's
counsel as described in Section 10.1.
Section 4.15. There shall have occurred no Material Adverse Change
since March 13, 2002. Haverty's credit rating shall be at least NAIC 2.
Section 4.16. All Taxes, if any, due and payable on or before the
Closing Date in connection with the sale contemplated hereunder or with the
execution, delivery, recording and filing of any of the Operative Documents or
any document or instrument contemplated thereby shall have been duly paid in
full or funds therefor made available to Escrowee for the payment thereof.
Section 4.17. No change shall have occurred in Applicable Laws and
Regulations or the interpretation thereof by any competent court of other
Governmental Authority that would make it illegal for Purchaser to participate
in the transaction or would result in a Material Adverse Effect.
Section 4.18. Haverty shall have paid the Excess Fees, if any; referred
to in Section 11.02.
Section 4.19. Haverty shall have provided with respect to each Project
request, for the benefit of Landlord and Lender, estoppel certificates in form
and substance satisfactory to Landlord and Lender.
Section 4.20. Haverty shall have provided either (a) a zoning opinion,
(b) a zoning letter from the city in which each Project is located, (c) a zoning
endorsement to the Owner's Title Policy and the Mortgage Title Policy or (d) a
statement from the surveyor upon the face of each Survey that confirms the
zoning description, that such Project is in compliance with such zoning
and that there are no outstanding zoning violations, in each case reasonably
satisfactory to Landlord and Lender.
Section 4.21. No change shall have occurred in Applicable Law and
Regulations or the interpretations thereof by any competent court or other
Governmental Authority that would make it illegal for Purchaser to participate
in the transaction or would result in a Material Adverse Effect.
ARTICLE V
HAVERTY'S CONDITIONS PRECEDENT TO CLOSING
Haverty's obligation to consummate the transaction described in this
Contract of Sale is subject to the satisfaction or written waiver of the
following conditions:
Section 5.01. Purchaser shall have executed the Lease in the form
attached as Exhibit "C".
Section 5.02. On the Closing Date, Purchaser shall not be in breach of
any covenant or agreement to be performed by Purchaser under this Contract of
Sale.
Section 5.03. All representations and warranties made by Purchaser in
this Contract of Sale shall be true and correct as of the Closing Date.
Section 5.04. Haverty and Lender shall have executed a Subordination,
Non-disturbance and Attornment Agreement in form and substance reasonably
acceptable to Lender and Haverty.
Section 5.05. Purchaser shall have deposited or caused to be deposited
the Aggregate Purchase Price with the Escrowee.
Section 5.06. No change shall have occurred in Applicable Law and
Regulations or the interpretations thereof by any competent court or other
Governmental Authority that would make it illegal for Haverty to participate in
the transaction or would result in a Material Adverse Effect.
ARTICLE VI
CLOSING
Section 6.01. Provided all conditions precedent set forth in Articles 4
and 5 have been satisfied and/or waived, the consummation of the transaction
contemplated hereunder (hereinafter referred to as "Closing") shall take place
at the offices of Purchaser's counsel in New York, New York on the Closing Date
or such other date and/or location mutually agreed-upon between Haverty and
Purchaser.
Section 6.02. The Closing shall take place through an escrow with the
Title Company, as escrowee ("Escrowee"), pursuant to a written escrow agreement
among the attorneys for
Purchaser and Haverty and Escrowee, containing terms and conditions consistent
with the terms and conditions of this Contract of Sale (which shall in all
events be controlling) and mutually satisfactory to Purchaser and Haverty.
ARTICLE VII
HAVERTY'S REPRESENTATIONS, WARRANTIES, AND COVENANTS
Section 7.01. Haverty represents and warrants to Purchaser as follows:
(a) Due Organization. Haverty is a corporation duly organized,
validly existing and in good standing under the laws of the State of Maryland,
and has the full corporate power and authority to conduct its business as now
conducted, to own or hold under lease its property and to enter into, and
perform its obligations under this Contract of Sale and each of the other
Operative Documents to which it is a party, and Haverty is duly qualified as a
foreign corporation to do business and is in good standing in the State of
Georgia and in every other jurisdiction in which each Project is located.
(b) Due Authorization, Execution, Delivery. The execution by
Haverty of, the consummation by it of the transactions provided for in, and the
compliance by it with all of the provisions of, each Operative Document to which
it is party have been duly authorized by all necessary corporate action on its
part and neither the execution and delivery thereof, nor the consummation of the
transactions contemplated thereby, nor compliance by it with any of the terms
and provisions thereof (i) requires any approval of its stockholders, or
approval or consent of any trustee or holders of any of its indebtedness or
obligations, except for such approvals and consents as have been duly obtained
and are in full force and effect, (ii) contravenes any Applicable Laws and
Regulations or Governmental Action applicable to or binding on it or any
Project, which contravention would result in a Material Adverse Effect, (iii)
contravenes or results in any breach of or constitutes any default under, or
results in the creation of any Lien (other than Permitted Exceptions) upon any
of its properties under any indenture, mortgage, chattel mortgage, deed of
trust, conditional sales contract, bank loan or credit agreement, corporate
charter, by-laws or other agreement or instrument to which it is a party, by
which it may be bound or affected or by which any Project may be affected, which
contravention, breach or default would result in a Material Adverse Effect, or
(iv) requires any Governmental Action, except for the filings and recordings
necessary or advisable to perfect the rights of Purchaser and Lender intended to
be created by the Operative Documents and any filings that are required in the
ordinary course of business in connection with the ownership, use and operation
of the Premises.
(c) Enforceability. Each of the Operative Documents to which
Haverty is a party has been duly executed and delivered by Haverty. Assuming the
due authorization, execution and delivery by the other parties to each Operative
Document to which Haverty is a party, each such Operative Document is,
respectively, a legal, valid and binding obligation of Haverty enforceable
against Haverty in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
(d) No Actions Pending. There is no action, suit, proceeding
or to the best of Haverty's knowledge, investigation at law or in equity by or
before any court, governmental body, agency, commission or other tribunal now
pending or, to Haverty's Actual Knowledge, threatened against Haverty or
affecting Haverty or any Project or naming Haverty as a party (i) which
questions the validity or enforceability of this Contract of Sale, the Lease or
any of the other Operative Documents to which Haverty is or is to become a party
or (ii) that is reasonably likely, if adversely determined (individually or in
the aggregate), to have a Material Adverse Effect. To Haverty's Actual
Knowledge, Haverty is not in default with respect to any order or other decree
of any Governmental Authority, the default under which is reasonably likely to
cause a Material Adverse Effect.
(e) No Material Adverse Change. Since the date of Haverty's
most recent financial statement set forth on Form 10-Q there has been no
Material Adverse Change in the financial condition of Haverty and its
consolidated Subsidiaries, taken as a whole, except for such changes as have
been disclosed in filings made by Haverty with the Securities and Exchange
Commission or in press releases by Haverty. The credit rating of Haverty is at
least the minimum standard set forth in Section 4.15.
(f) Disclosure. To Haverty's Actual Knowledge (i) nothing
disclosed in writing by Haverty to Purchaser or any agent of Purchaser contains
any untrue statement of material fact or omits to state a material fact
necessary to make the statements therein not misleading and (ii) there is no
fact peculiar to Haverty or existing on or in any Project or relating to their
compliance with Applicable Laws and Regulations of which Haverty has Actual
Knowledge that Haverty has not disclosed in writing to Purchaser which would
have a Material Adverse Effect.
(g) No Defaults. If the Operative Documents had been in effect
immediately prior to the execution of this Agreement no default, or event or
occurrence that but for the giving of notice or the passage of time would
constitute a default, under any of the Operative Documents on the part of
Haverty would have occurred and be continuing.
(h) Bankruptcy. Haverty has not filed a voluntary petition in
bankruptcy or been adjudicated a bankrupt or insolvent, or filed any petition or
answer seeking any reorganization, liquidation, dissolution or similar relief
under any federal bankruptcy, insolvency, or other law relating to relief for
debtors, or sought or consented to or acquiesced in the appointment of any
trustee, receiver, conservator or liquidator of all or any part of its
properties. No court of competent jurisdiction has entered an order, judgment,
or decree approving a petition filed against Haverty seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any federal bankruptcy act, and no other liquidator has been
appointed for Haverty or of all or any part of its properties and no such action
is pending. Haverty has not given notice to any governmental authority of
insolvency or pending insolvency, or suspension or pending suspension of
operations. Haverty is not insolvent and will not become insolvent by reason of
the transactions contemplated by the Operative Documents.
(i) Investment Company Act. Neither Haverty nor any Guarantor
is an "investment company" or an "affiliated person" of an "investment company"
within the meaning of the Investment Company Act of 1940.
(j) Title. Haverty owns good, marketable and indefeasible fee
simple title to each Project free and clear of all liens and encumbrances other
than Permitted Exceptions. Each Project is located upon a separate tax parcel.
(k) Systems. In all material respects, to Haverty's Actual
Knowledge, the electrical, plumbing, heating, drainage, air conditioning,
ventilation and other mechanical and electrical systems on and in the
Improvements to each Project are (i) in good working order and repair, and (ii)
are adequate in quality and quantity for the operation and maintenance of such
Improvements in the manner required under the Lease and such Improvements are in
compliance with all Applicable Laws and Regulations in all material respects.
(l) Compliance with Applicable Laws and Regulations. Haverty
has received no notices, complaints or orders of violation or noncompliance of
any nature whatsoever, or to Haverty's Actual Knowledge, no notice of violation
or noncompliance is threatened or contemplated by any Governmental Authority (as
hereinafter defined) with respect to any Project or any part thereof other than
in each case routine, minor or immaterial matters. Haverty has obtained all
licenses, permits, franchises and other governmental authorizations material to
the conduct of its business and the maintenance, operation and ownership of each
Project; provided, however, that this paragraph (l) shall not apply to
environmental matters, which is governed solely by paragraph (p) below.
(m) Rights in Respect of the Projects. Haverty is not a party
to any contract or agreement to sell any interest in any Project or any part
thereof other than pursuant to this Contract of Sale.
(n) No Loss or Taking. There is no action pending or, to
Haverty's Actual Knowledge, threatened by a Governmental Authority or other
Person to initiate a Condemnation with respect to any Project or any part
thereof. There is no Casualty with respect to any Project.
(o) Use of Proceeds. None of the transactions contemplated by
the Operative Documents will result in a violation of Section 7 of the
Securities Exchange Act of 1934, as amended, or any regulation issued pursuant
thereto.
(p) Environmental Matters.
(i) Haverty complies and at all times has been
in full compliance with, and each of the Projects complies and has at all times
been in full compliance with, in all material respects, all Environmental Laws;
(ii) Haverty and each of the Projects has
obtained and is in compliance with, all permits, licenses, authorizations,
registrations and other governmental consents ("Environmental Permits") required
by applicable Environmental Laws, and has made all appropriate filings for the
issuance or renewal of such Environmental Permits;
(iii) no written notices, complaints or claims of
violation or non-compliance with Environmental Laws or potential liability under
Environmental Laws or relating to environmental matters have been received by
Haverty and, no federal, state or local environmental investigation or
proceeding is pending or to Haverty's Actual Knowledge,
threatened with regard to any Project or any use thereof or any alleged
violation of Environmental Laws with regard to any Project;
(iv) except as set forth in the Phase I
environmental reports delivered to Purchaser, none of the Projects, or any
portion thereof, has been used by Haverty or, to Haverty's Actual Knowledge, by
any prior owner for the generation, manufacture, storage, handling, use,
transfer, treatment, recycling, transportation, processing, production,
refinement or disposal of any Hazardous Material;
(v) except as set forth in the Phase I
environmental reports delivered to Purchaser, no underground storage tanks or
surface impoundments have been installed in any Project by Haverty or, to
Haverty's Actual Knowledge, by any other person or entity, and there exists no
Hazardous Material contamination at, on, under, or within any Project, whether
originating on or off the applicable Project; and
(vi) except as otherwise specifically set forth
in the Phase I environmental reports delivered to Landlord in connection with
its acquisition of the Projects, no Hazardous Materials (including, without
limitation, asbestos) are present or have been Released or are threatened to be
Released at, on, under, within or emanating to or from any of the Projects or
any portion thereof.
(q) Utility Services. To Haverty's Actual Knowledge, each
Project has connected all services of public facilities and other utilities
sufficient and necessary for the use and operation of such Project for the
current use made of such Project, including, without limitation, water, gas,
electricity, sewer and telephone.
(r) Use and Operation of the Projects. All agreements,
easements (including without limitation Permitted Exceptions) and other rights,
public or private (including, without limitation, all Applicable Laws and
Regulations), which are necessary to permit the lawful use and operation of each
Project in the manner in which such use is currently made and which are
necessary to permit the lawful intended use and operation of all presently
existing utilities, driveways, roads and other means of egress and ingress to
and from the same have been obtained and are in full force and effect and
Haverty has not has received notice of any pending modification or cancellation
of any of the same; the use of each Project does not in any material respect
depend on any variance, special exception or other municipal approval, permit or
consent that has not been obtained for its continuing legal use; and all
required building and use related permits, approvals and consents have been
issued and are in full force and effect.
(s) Special Assessments. There is no action pending or, to
Haverty's Actual Knowledge, threatened by a Governmental Authority or other
Person to specially assess any Project for any public improvements constructed
or to be constructed that is reasonably likely to have a Material Adverse Effect
or an adverse effect on the value, utility or useful life of such Project.
(t) Access; Egress. Access to and egress from each Project are
available and provided by public streets and authorized use of private roadways.
To Haverty's Actual Knowledge, there are no plans of any Governmental Authority
to change the highway or road
system in the vicinity of any Project, or to restrict or change access from any
such highway or road to any Project, in either case, in any manner which would
reasonably be expected to materially interfere with or prevent the use,
occupancy or operation of such Project as contemplated by the Operative
Documents.
(u) Occupancy and Possession. There are no leases or other
occupancy agreements currently affecting any portion of any Project and Haverty
or an Affiliate of Haverty is in sole occupancy and possession of the entirety
of each Project.
(v) Tax Exempt Use Property. During the period from the
commencement date of the Lease Term (as set forth in Schedule C to the Lease)
through expiration or earlier termination of the Lease with respect to any
Project, the Projects will not, as a result of any use or action by, or the
status of Haverty, any sublessee, or any other user (other than the Purchaser)
constitute "tax exempt use property" within the meaning of Section 168(h) of the
Code.
(w) Nonseverable Improvements As of the commencement of the
Lease Term, Haverty has no present intention to make any material nonseverable
improvement to the Projects.
(x) Accuracy of Information to Appraiser All written
information provided by Haverty to the Appraiser with respect to the Projects,
and identified by the Appraiser as information it has relied on, will be
accurate at the time provided and on the commencement date of the Lease Term (as
set forth in Schedule C of the Lease), and Haverty did not withhold any
information in connection with any request by the Appraiser for information that
would render the information actually provided misleading.
(y) No Deductions During the Lease Term, Haverty will not
claim to be the owner of the Projects or claim the MACRS Deductions, the
Interest Deductions or Amortization Deductions or take any position on any
income tax return that is inconsistent with the Purchaser's ownership of the
Projects or with the reporting of Basic Rent in accordance with Schedule D of
the Lease.
Section 7.02. The representations and warranties of Haverty contained
in Section 7.01 shall be true as of the date hereof, shall be deemed remade by
Haverty as of the Closing Date, shall survive the Closing Date without
limitation and shall run in favor of, and benefit, Purchaser and its successors
and assigns.
ARTICLE VIII
PURCHASER'S REPRESENTATIONS, WARRANTIES, AND COVENANTS
Section 8.01. Purchaser represents and warrants to Haverty as follows:
(a) Due Organization. Purchaser is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware, and has the full limited liability company power and
authority to conduct its business as now conducted, to own or hold under lease
its property and to enter into, and perform its obligations under this Contract
of Sale and each of the other Operative Documents to which it is a party, and it
is duly qualified
as a foreign corporation to do business and is in good standing in each other
jurisdiction in which its failure to be so qualified would have a material
adverse effect on any Project or the financial condition of Purchaser.
(b) Due Authorization, Execution and Delivery. The execution
by Purchaser of, the consummation by it, of the transactions provided for in,
and the compliance by it with all of the provisions of, each Operative Document
to which it is party have been duly authorized by all necessary limited
liability company action on its part and neither the execution and delivery
thereof, nor the consummation of the transactions contemplated thereby, nor
compliance by it with any of the terms and provisions thereof (i) requires any
approval of its members, or approval or consent of any trustee or holders of any
of its indebtedness or obligations, except for such approvals and consents as
have been duly obtained and are in full force and effect, (ii) contravenes any
Applicable Laws and Regulations or Governmental Action applicable to or binding
on it or any Project, which contravention would result in a Material Adverse
Effect, (iii) contravenes or results in any breach of or constitutes any default
under, or results in the creation of any Lien (other than Permitted Exceptions)
upon any of its properties under, any indenture, mortgage, chattel mortgage,
deed of trust, conditional sales contract, bank loan or credit agreement,
limited liability company agreement or other agreement or instrument to which it
is a party, by which it may be bound or affected or by which any Project may be
affected, which contravention, breach or default would result in a material
adverse effect on any Project or the financial condition of Purchaser, other
than any Lien (such as that in favor of the Lender) contemplated by the
Operative Documents or (iv) requires any Governmental Action, except for the
filings and recordings necessary or advisable to perfect the rights of Purchaser
and Lender intended to be created by the Operative Documents and any filings
that are required in the ordinary course of business in connection with the
ownership, use and operation of any Project.
(c) Enforceability. Each of the Operative Documents to which
Purchaser is a party has been duly executed and delivered by Purchaser. Assuming
the due authorization, execution and delivery by the other parties to each
Operative Document to which Purchaser is a party, each such Operative Document
is, respectively, a legal, valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
(d) No Actions Pending. There is no action, suit, proceeding
or investigation at law or in equity by or before any court, governmental body,
agency, commission or other tribunal served on Purchaser or, to Purchaser's
Actual Knowledge, threatened against Purchaser or affecting Purchaser or naming
Purchaser as a party (i) which questions the validity or enforceability of this
Contract of Sale, the Lease or any of the Other Operative Documents to which
Purchaser is or is to become a party or (ii) that is reasonably likely, if
adversely determined (individually or in the aggregate), to have a material
adverse effect on any Project or the financial condition of Purchaser. Purchaser
is not in default with respect to any order of any Governmental Authority, the
default under which is reasonably likely to cause a material adverse effect on
any Project or the financial condition of Purchaser.
(e) Bankruptcy. Purchaser has not filed a voluntary petition
in bankruptcy or been adjudicated a bankrupt or insolvent, or filed any petition
or answer seeking any
reorganization, liquidation, dissolution or similar relief under any federal
bankruptcy, insolvency, or other law relating to relief for debtors, or sought
or consented to or acquiesced in the appointment of any trustee, receiver,
conservator or liquidator of all or any part of its properties. No court of
competent jurisdiction has entered an order, judgment, or decree approving a
petition filed against Purchaser seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
federal bankruptcy act, and no other liquidator has been appointed for Purchaser
or of all or any part of its properties and no such action is pending. Purchaser
has not given notice to any governmental authority of insolvency or pending
insolvency, or suspension or pending suspension of operations. Purchaser is not
insolvent and will not become insolvent by reason of the transactions
contemplated by the Operative Documents.
Section 8.02. The representations, warranties, indemnities, covenants
and agreements of Purchaser contained in Section 8.1 shall be true as of the
date hereof, shall be deemed remade by Purchaser as of the Closing Date, shall
survive the Closing without limitation and shall run in favor of, and benefit,
Haverty and its successors and assigns.
ARTICLE IX
DEFAULTS
Section 9.01. In the event of the breach by Purchaser of this Contract
of Sale on the Closing Date, which breach is not cured within five (5) days from
the date of Haverty's written notice to Purchaser, Haverty, at its option, may:
(a) terminate its obligations under this Contract of Sale by further written
notice thereof to Purchaser; (b) specifically enforce the terms and provisions
of this Contract of Sale against Purchaser; (c) avail itself of any other rights
and remedies available to Haverty at law or in equity as a result of such
failure by Purchaser; or (d) avail itself of any combination of the foregoing.
Section 9.02. In the event of the breach by Haverty of this Contract of
Sale on the Closing Date, which failure is not cured within five (5) days from
the date of Purchaser's written notice to Haverty, Purchaser, at its option,
may: (a) terminate its obligations under this Contract of Sale by further
written notice thereof to Haverty; (b) specifically enforce the terms and
provisions of this Contract of Sale against Haverty; (c) avail itself of any
other rights and remedies available to Purchaser at law or in equity as a result
of such failure by Haverty, including the right to record a lis pendens against
any or all of the Projects; or (d) avail itself of any combination of the
foregoing.
ARTICLE X
CLOSING DOCUMENTS
Section 10.01. At the Closing, Haverty shall execute and/or deliver, or
cause to be executed and/or delivered to Purchaser and, where, applicable, the
Title Company the following:
(a) The Owner's Title Policy and the Mortgage Title
Policy in form and content required under Section 3.01; provided that the
Owner's Title Policy and the Mortgage Title
Policy may be delivered after Closing if that is customary in the locality,
provided that Purchaser receives a "marked" title binder at Closing reasonably
acceptable to Purchaser.
(b) A duly executed and acknowledged Limited or Special
Warranty Deed conveying fee simple title to the Land and Improvements with
respect to each Project to Purchaser, subject only to the Permitted Exceptions.
(c) A duly executed Xxxx of Sale conveying all of
Haverty's right, title and interest in the F&E with respect to each Project to
Purchaser free and clear of all liens, security interests and adverse claims,
subject only to the Permitted Exceptions.
(d) Such other documents and instruments as are
reasonably required to transfer Haverty's interest in each Project to Purchaser.
(e) Certified copies of resolutions by Haverty's Board of
Directors authorizing the execution of this Contract of Sale and consummation of
the transactions described herein.
(f) The Lease, and related short forms or memoranda of
the Lease for recording purposes.
(g) The Environmental Indemnity Agreement for the benefit
of Landlord and Lender.
(h) Certificates of occupancy with respect to each
Project satisfactory to Landlord and Lender.
(i) The opinion of Xxxxx, Xxxxxxxx & Xxxxxxx, LLP,
substantially in the form of Exhibit "D-1" attached hereto.
(j) Such other documents reasonably required by Lender
and customary in transactions similar to the transaction contemplated by this
Contract of Sale.
Section 10.02. At the Closing, Purchaser shall execute and/or deliver
to Haverty the following:
(a) The Aggregate Purchase Price in accordance with
Article 2 hereof.
(b) The Lease, and related short forms or memoranda of
the Lease for recording purposes.
(c) The opinion of Xxxxx Xxxxxxxxxx LLP, substantially in
the form of Exhibit "E" attached hereto.
Section 10.03. At the Closing, Haverty and Purchaser shall jointly
deliver: (a) an escrow agreement and (b) state, county and local transfer tax
declarations, if any, and all such other instruments and documents requested by
the Title Company customarily delivered in connection with the closing of the
sale and purchase of similar properties.
ARTICLE XI
CLOSING ADJUSTMENTS
Section 11.01. There shall be no proration of real estate or personal
property taxes at the Closing.
Section 11.02. The following costs shall be payable out of the
Aggregate Purchase Price, assuming consummation of the transactions contemplated
hereby: (a) all transfer taxes, lease taxes and all other costs associated with
the transfer of title to the Projects, including title insurance premiums,
survey costs and recording fees (including mortgage taxes), (b) appraisal fees,
fees and expenses for third-party environmental reports (including search fees)
and engineering inspections (collectively, "Capitalized Closing Costs"). Except
as provided in the second succeeding sentence, Purchaser shall pay the
following, assuming consummation of the transactions contemplated hereby: (v)
the fee of SunTrust Xxxxxxxx Xxxxxxxx (w) Lender's origination fee, (x) the fees
and expenses of counsel for Purchaser and Lender, respectively, (y) fees and
expenses of local counsel engaged by Landlord on behalf of the transaction and
(z) the fees of Purchaser's advisors. To the extent the fees and expenses
described in clauses (x) and (y) above equal less than $550,000 in the
aggregate, the difference shall be applied to the payment of Capitalized Closing
Costs. To the extent the fees and expenses described in clauses (x) and (y)
above exceed $650,000, Haverty shall pay such excess amounts (the "Excess
Fees"). If the transactions contemplated hereby shall fail to be consummated for
any reason other than Purchaser's failure to close after all conditions
precedent have been satisfied, Haverty shall pay all transaction expenses
described in this Section 11.02 and any others waived by or on behalf of
Landlord or Lender, including but not limited to legal fees and expenses related
to due diligence.
ARTICLE XII
INDEMNIFICATION
Section 12.01. (a) Haverty shall defend all actions against any of (i)
Landlord (ii) any owner, beneficial owner, trustee, partner, member, officer,
director, shareholder or agent of Landlord, and of any of Landlord's partners or
members, and (iii) the holder of any indebtedness of Landlord secured by a
mortgage, deed of trust or other security interest in the Premises, including
without limitation, Lender, or any owner, beneficial owner, partner, member,
officer, director, shareholder, or agent of any such holder, including without
limitation, Lender, (iv) together with their respective successors and assigns
(herein, collectively, "Indemnified Parties") with respect to, and shall pay,
protect, indemnify and save harmless the Indemnified Parties from and against,
any and all liabilities, losses, damages, costs, expenses (including reasonable
attorneys' fees and expenses), causes of action, suits, claims, demands or
judgments of any nature (SPECIFICALLY INCLUDING CLAIMS RESULTING FROM THE STRICT
OR ABSOLUTE LIABILITY OF AN INDEMNIFIED PARTY OR FROM THE NEGLIGENCE OF AN
INDEMNIFIED PARTY, but specifically excluding claims resulting from the gross
negligence or willful misconduct of an Indemnified Party, subject to the
provisions of Section 12.01(b) and excluding consequential or punitive damages
assessed against Landlord as a result of the commission of an overt act by
Landlord constituting gross negligence
or willful misconduct, subject to the provisions of Section 12.01(b))) (a) to
which any Indemnified Party is subject because of Landlord's estate in any
Project or the receipt of any Basic Rent or Additional Rent under the Lease or
(b) arising from (i) any accident, injury to or death of any person or loss of
or damage to property occurring in, on or about any Project or portion thereof
or on the adjoining sidewalks, curbs, parking areas, streets or ways; (ii) any
use, non-use or condition in, on or about, or ownership, possession, alteration,
repair, operation, maintenance, leasing, subleasing or management of, any
Project or any portion thereof or on the adjoining sidewalks, curbs, parking
areas, streets or ways; (iii) the construction, design, purchase, acceptance,
rejection, modification, substitution or condition of any Project, including
without limitation claims or penalties arising from any violation of Legal
Requirements, without regard to whether compliance therewith is required by the
terms of the Lease or liability in tort (strict or otherwise), (iv) any failure
on the part of Haverty to perform or comply with any of the terms, covenants or
conditions of the Lease or any other instrument, contract, document or agreement
to which Haverty is a party relating to the Premises or any Project (a "Related
Document"); (v) any representation or warranty made herein, in any certificate
delivered in connection herewith or in any other Related Document, or pursuant
thereto, being false or misleading in any material respect as of the date that
such representation or warranty was made; (vi) performance of any labor or
services or the furnishing of any materials or other property in respect to any
Project or any portion thereof, (vii) any Imposition, including without
limitation, any Imposition attributable to the execution, delivery, filing or
recording of any Related Document, the Lease or any memorandum thereof; (viii)
any lien, encumbrance or claim arising on or against any Project or any portion
thereof under any Legal Requirement or otherwise which Haverty is obligated to
remove and discharge pursuant to the Lease or any liability asserted against the
Indemnified Parties with respect thereto, (ix) the claims of any subtenants (of
any tier), licensees or other persons claiming through or under Haverty of all
or any portion of any Project or any other Person acting through or under
Haverty or otherwise acting under or as a consequence of the Lease or any
sublease (of any tier), (x) any act or omission of Haverty or its agents,
contractors, employees, licensees, subtenants or invitees or of any of the
Persons described in clause (ix), and (xi) any contest referred to in Section
2.6 of the Lease; provided, however, that Haverty shall not be required to
indemnify an Indemnified Party under this Section 12.01 with respect to any
liability arising with respect to a Project to the extent attributable to acts
or events which occur after (and are not attributable to acts or events
occurring or accruing prior to) the later of (A) the expiration or earlier
termination of the Lease with respect to such Project and (B) the surrender of
possession of such Project to the Landlord.
(b) Under no circumstance shall Landlord or any
Indemnified Party be deemed to have acted negligently, grossly negligently or
willfully merely by Landlord's or such Indemnified Party's ownership of the
Premises, and in no event shall any occurrence relating to any Project, whether
negligent, grossly negligent or willful, be imputed to Landlord or any
Indemnified Party by reason of Landlord's or such Indemnified Party's interest
in such Project, it being understood that all obligations with respect to the
Premises are the responsibility of Haverty under the Lease. In order to have
acted negligently, grossly negligently or willfully, Landlord or any Indemnified
Party must have committed an affirmative act.
Nothing in this Section 12.01 shall be construed as a guaranty by
Haverty of any residual value in any Project.
Section 12.02. Haverty agrees to indemnify, reimburse, defend, and hold
harmless the Indemnified Parties for, from, and against all demands, claims,
actions or causes of action, assessments, losses, damages, liabilities, costs
and expenses, including, without limitation, interest, penalties, punitive and
consequential damages, costs of any Remedial Work, reasonable attorneys' fees,
disbursements and expenses, and reasonable consultants' fees, disbursements and
expenses and administrative and similar costs of the Indemnified Parties, but
excluding internal overhead), asserted against, resulting to, imposed on, or
incurred by the Indemnified Parties, directly or indirectly, in connection with
any of the following:
(a) events, circumstances, or conditions which are
alleged to, or do, (1) relate to the presence or Release or threatened Release
on, at, under, within or emanating to or from any of the Projects or portion
thereof of any Hazardous Substance, (2) form the basis of any violation or
alleged violation, of, or liability or alleged liability under, any
Environmental Law by Haverty (or any subtenants or assignees), Landlord or
Lender (except for violations or liability arising from the gross negligence or
willful misconduct of Landlord or Lender as qualified by Section 12.01(b) above)
or with respect to any such Projects, or (3) constitute Environmental
Violations;
(b) any pollution, loss or damage to property or natural
resources or threat to human health or safety or the health or safety of other
living organisms, or the environment that is related in any way to Haverty's (or
any subtenants or assignees') or any previous owner's or operator's management,
use, control, ownership or operation of any Project, including, without
limitation, all onsite and offsite activities involving Hazardous Substances,
and whether occurring, existing or arising prior to or from and after the date
hereof;
(c) any Environmental Claim against any person or entity
whose liability for such Environmental Claim Haverty or Landlord has or may have
assumed or retained either contractually or by operation of law;
(d) any Remedial Work required to be performed pursuant
to any Environmental Law or the terms hereof; or
(e) the breach of any environmental representation,
warranty or covenant set forth in the Lease, (collectively, "Indemnified
Environmental Losses"), INCLUDING IN EACH CASE, WITHOUT LIMITATION, WITH RESPECT
TO EACH OF THE INDEMNIFIED PARTIES, AS THE CASE MAY BE, TO THE EXTENT SUCH
INDEMNIFIED ENVIRONMENTAL LOSSES RESULT FROM THE STRICT OR ABSOLUTE LIABILITY OF
SUCH INDEMNIFIED PARTY OR ITS NEGLIGENCE, EXCEPT IN EACH CASE, TO THE EXTENT
THAT THEY RESULT SOLELY FROM THE INDEMNIFIED PARTY'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT (SUBJECT TO THE PROVISIONS OF SECTION 12.01(b))).
Section 12.03. The obligations of Haverty under this Article 12 shall
survive the Closing and the expiration or earlier termination of the Lease. No
Indemnified Party shall be entitled to payment of any amount hereunder to the
extent of any prior payment with respect to the same claim under any other
indemnity from Haverty.
ARTICLE XIII
BROKER
Purchaser agrees to pay all commissions and fees due and payable to
SunTrust Xxxxxxxx Xxxxxxxx in connection with this transaction, but only if and
when the transactions contemplated hereby are consummated. Haverty agrees to and
does hereby indemnify Purchaser from all loss, damage, cost, or expense
(including reasonable attorneys' fees) that Purchaser may suffer as a result of
any claim or action brought by any broker or advisor, other than Sun Trust
Xxxxxxxx Xxxxxxxx or other than upon consummation of the transactions
contemplated hereby, acting or allegedly acting on behalf of Haverty in
connection with this transaction, and Purchaser agrees to and does hereby
indemnify and hold Haverty harmless from all loss, damage, cost, or expense
(including reasonable attorneys' fees) that Haverty may suffer as a result of
any claim or action brought by any broker or advisor, other than Sun Trust
Xxxxxxxx Xxxxxxxx, acting or allegedly acting on behalf of Purchaser in
connection with this transaction. Any compensation payable to U.S. Realty
Advisors, LLC shall be the sole liability and obligation of Purchaser.
ARTICLE XIV
MISCELLANEOUS
Section 14.01. All notices to be given hereunder shall be in writing
and sent by United States mail, by nationally recognized courier service or by
hand and any such notice shall become effective when received, or if sent by
nationally recognized courier for next day delivery, on the next day after
delivery of such notice to such courier service, and shall be directed to the
Address of such Person. From time to time any party may designate a new Address
for purposes of notice hereunder by notice to each other parties hereto.
Section 14.02. This Contract of Sale, the Exhibits attached hereto and
the other Operative Documents embody the entire agreement among the parties in
connection with this transaction and there are no oral or parole agreements,
representations or inducements existing between the parties relating to this
transaction which arc not expressly set forth herein and covered hereby. This
Contract of Sale may not be modified except by a written agreement signed by all
of the parties.
Section 14.03. No written waiver by any party at any time of any breach
of any provision of this Contract of Sale shall be deemed a waiver of a breach
of any other provision herein, or a consent to any subsequent breach of the same
or any other provision. If any action by any party shall require the consent or
approval of another party, such consent or approval of such action on any one
occasion shall not be deemed a consent to or approval of such action on any
subsequent occasion or a consent to or approval of any other action on the same
or any subsequent occasion.
Section 14.04. The captions, paragraphs, numbers and article numbers
appearing in this Contract of Sale are inserted only as a matter of convenience
and do not define, limit, construe or
describe the scope or intent of such paragraphs or articles of this Contract of
Sale or in any way affect this Contract of Sale.
Section 14.05. All parties hereto agree that time is of the essence in
this transaction and that this Contract of Sale may be executed in counterparts
and shall be governed by and interpreted in accordance with the laws of the
State of New York (without giving effect to the conflict of laws rules and
principles of such state), and the United States of America.
Section 14.06. Purchaser and Haverty shall not and shall not permit any
agent or broker to publicize the transaction contemplated by this Contract of
Sale without the consent of the other party. This Contract of Sale shall remain
subject to any confidentiality agreement previously executed by and between the
parties hereto or their Affiliates.
Section 14.07. Haverty at its own cost and expense, shall cause to
promptly and duly take, execute, acknowledge and deliver all such further acts,
documents and assurances as Purchaser reasonably may request from time to time
in order to carry out more effectively the intent and purposes of this Contract
of Sale and the other Operative Documents.
Section 14.08. In the event of any proceeding or litigation involving
this Contract of Sale, (including any appeals or bankruptcy matter) the party
prevailing in such proceeding or litigation shall be entitled to recover from
the other party all attorneys' fees and expenses and all costs incurred by the
prevailing party in connection therewith, together with interest thereon from
the date of such demand until paid at the Rate.
Section 14.09. The parties hereto hereby consent to an assignment by
Purchaser to the Lender of the Purchaser's rights under this Contract of Sale.
Section 14.10. The parties intend this agreement to constitute a sale
and not a financing for all purposes.
[Signatures on following page]
IN WITNESS WHEREOF, the parties hereto have executed this Contract of
Sale the day and year first above written.
HAVERTY:
Xxxxxxx Furniture Companies, Inc.,
a Maryland corporation
By:
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Its:
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PURCHASER:
HAVERTACQ 11 LLC,
a Delaware limited liability company
By: General Electric Capital Corporation
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Its: Manager
By:
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Xxxxxxx Xxxxx
Its: Authorized Signatory
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