THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT
EXHIBIT
10.3
THIRD
AMENDMENT TO
This
THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT (this “Third
Amendment”)
is
entered into as of the 6th
day of
August, 2008, by and between Brookside Properties, Inc., a Tennessee corporation
(“Buyer”),
TRB
Chattanooga LLC, a Tennessee limited liability company (the “Seller”),
and
BRT Realty Trust, a Massachusetts business trust (the “Entity
Owner”).
R E C I T A L S:
WHEREAS,
Seller and Buyer entered into a Purchase and Sale Agreement dated as of July
17,
2008, as amended by First Amendment to Purchase and Sale Agreement dated as
of
August 1, 2008 and Second Amendment to Purchase and Sale Agreement dated as
of
August 5, 2008 (as it may be amended from time to time, the “Agreement”)
with
regard to certain real property more particularly described in the Agreement;
and
WHEREAS,
Seller, Buyer and Entity Owner desire to further amend certain terms and
provisions of the Agreement pursuant to the terms hereof.
NOW,
THEREFORE, for and in consideration of the foregoing premises and other valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
Seller, Buyer and Entity Owner hereby further amend the Agreement as
follows:
1. Defined
Terms.
Capitalized terms not otherwise defined herein shall have the meanings set
forth
in the Agreement. Entity Owner is hereby added as a party to the Agreement.
2. Xxxxxxx
Money.
On or
by August 8, 2008, Buyer shall deliver to Escrow Agent the sum of Two Hundred
Fifty Thousand and No/100 Dollars ($250,000.00) (the “Additional
Xxxxxxx Money”)
which
shall be added to and thereafter considered a part of the already existing
Xxxxxxx
Money
as
governed by Section 3 of Agreement.. Upon receipt of the Additional Xxxxxxx
Money, Escrow Agent shall hold the Additional Xxxxxxx Money with the Xxxxxxx
Money in an interest bearing account at an FDIC insured bank. The Xxxxxxx Money
and the Additional Xxxxxxx Money shall be referred to together as the
“Xxxxxxx
Money.”
On
the
Closing Date, the Xxxxxxx Money shall be applied as part payment of the Purchase
Price.
3. Closing
Date.
Section
4
of the
Agreement is hereby deleted in its entirety and the following is hereby inserted
in its place:
“The
closing of the purchase and sale of the Property as described in this Agreement
(the “Closing”)
shall
take place in escrow through the offices of the Escrow Agent on September 30,
2008, subject to being extended as set forth herein (the “Closing
Date”).
This
Agreement and such other agreements or instruments as may be reasonably
necessary to consummate the transaction contemplated hereby shall be
collectively referred to as the “Closing
Documents.”
4. Amendment.
Section
6(a)
and
Section
6(b)
of the
Agreement are hereby deleted in their entirety and the following is hereby
inserted in their place:
“(a)
For
the
purposes of this Agreement, “good
and marketable fee simple title”
shall
mean fee simple ownership that is: (i) free of all claims, liens and
encumbrances of any kind or nature whatsoever other than the Permitted
Exceptions (as defined in this Section
6(a)),
and
(ii) insurable by Escrow Agent, at the then current standard rates under the
standard form of ALTA owner’s policy of title insurance (ALTA Form B or
equivalent), with the standard printed exceptions therein deleted, without
exception other than for the Permitted Exceptions and containing such coverages
and endorsements as shall be reasonably required by Buyer’s counsel (the
“Title
Policy”).
For
the purposes of this Agreement, the term “Permitted
Exceptions”
shall
mean: (A) current taxes not yet due and payable, (B) tenants in possession
under
unrecorded residential leases affecting the Property, as tenants only without
any rights to purchase the Property, and (C) such other matters not specifically
objected to in writing by Buyer on or before August 8, 2008 (the “Title
and Survey Inspection Period”).
(b) During
the Inspection Period, Buyer shall obtain a title insurance commitment from
Xxxxxxx & Xxxxxxxxx Title, Inc., as agent for the Escrow Agent, together
with copies of all of the encumbrances listed therein (the “Commitment”).
During the Title and Survey Inspection Period, Buyer shall examine the
Commitment and the Survey (as defined in Section
7
hereof),
and give Seller written notice of objections that render Seller’s title to the
Property less than good and marketable fee simple title and any objections
to
the Survey (each a “Defect”),
except
that Buyer shall not object to liens for real estate taxes not yet due and
payable and shall not be required to object to voluntary
mortgage liens, security interests, tax liens for delinquent taxes or mechanics
liens placed or caused by Seller’s actions, including without limitation the
Redi-Floors Claim
(as
defined in Section
12(e)
hereof),
it being understood and agreed by the parties the Seller shall be obligated
to
satisfy such liens, or cause such exceptions to be removed from the Title Policy
by Closing.
Thereafter, Buyer shall have until the Closing Date in which to reexamine the
Commitment and Survey and in which to give Seller written notice of any
additional objections for matters not existing during the Title and Survey
Inspection Period and disclosed by such reexamination (each a “Defect”).
Seller shall have until ten (10) days prior to the Closing Date in which to
satisfy all Defects specified in Buyer’s initial notice of title objections, and
until the Closing Date in which to satisfy the Defects specified in the
subsequent notice by Buyer of title objections first disclosed during the
re-examination provided for in the third sentence of this Section
6(b).
Seller
shall notify Buyer that a Defect has been cured upon the curing of such Defect.
The parties hereto hereby agree that the letter from Buyer to Seller dated
August 5, 2008 regarding Title Objections is hereby rescinded and is of no
further force and effect.”
5. Purchase
of the Entity.
The
following is hereby inserted immediately following Section
37
of the
Agreement.
“38. Purchase
of the Entity.
(a) At
Buyer’s election exercised in writing, at least seven (7) days prior to Closing,
Buyer may elect to purchase 100% of the membership interest in TRB Chattanooga
LLC, a Tennessee limited liability company (the “Ownership
Interest”),
as
set forth in this Section
38.
In the
event Buyer elects to purchase the Ownership Interest in Seller, Entity Owner
shall deliver at Closing a duly executed and acknowledged Assignment of the
Ownership Interest in the form attached hereto as Exhibit
N
conveying Entity Owner’s Ownership Interest in Seller, and if applicable, any
certificates representing such Ownership Interest properly endorsed for
transfer. Entity Owner’s delivery of the Assignment of Ownership Interest
pursuant to this Section
38
shall be
in place of Seller’s delivery of the items in Section
10(a)(i)
through
(v)
and
Section
10(a)(viii)
of this
Agreement and Owner’s delivery of the Assignment of Ownership Interest pursuant
to this Section
38
shall
relieve Seller of Seller’s obligation to deliver the items in Section
10(a)(i)
through
(v)
and
Section
10(a)(viii)
of this
Agreement to Buyer.
(b) In
connection with the purchase and sale of the Ownership Interest pursuant to
this
Section
38,
Seller
and Entity Owner hereby covenant, warrant, and represent the following as of
the
August 6, 2008 (the “Effective
Date”)
and
again at Closing:
| (1) |
Entity
Owner owns 100% of the Ownership Interest in Seller, free and clear
of all
security interests, liens, claims, pledges, options, warrants, judgments
and encumbrances whatsoever.
|
| (2) |
There
are no outstanding agreements or commitments, oral or written, options,
warrants, or other rights to purchase or acquire the Ownership Interest
in
Seller or the Property.
|
| (3) |
Entity
Owner shall cause to be filed a final income tax return for the short
period ending on the Closing Date. Seller has not filed any tax returns
on
either a state or federal level.
|
| (4) |
To
Seller’s knowledge, Seller has maintained continuous insurance coverage
for casualty and liability with respect to the Property from the
time of
its acquisition of the Property through the Closing Date and shall
deliver
prior to Closing a current certificate of casualty and liability
insurance. There are no open or pending claims regarding such insurance.
Buyer understands that Seller shall be terminating its insurance
on the
Property as of the Closing Date and that Buyer must arrange for its
own
new insurance.
|
| (5) |
Entity
Owner shall cause the Closing Adjustments to be made in accordance
with
Section
9
of
this Agreement. On or prior to and in any event within ninety (90)
days
after Closing, Entity Owner shall cause all invoices, bills and other
payment obligations incurred by Seller prior to the Closing in the
ordinary course of business that relate in any way to the ownership
or
operation of the Property prior to the Closing to be paid, excluding
only
payment obligations for which Buyer receives a credit or apportionment
at
Closing.
|
| (6) |
The
Seller has never engaged in any business activity other than the
ownership
and operation of the Property and does not own and has never owned
any
other assets except the Property.
|
| (8) |
Seller
shall deliver to Buyer an accounts payable ledger or equivalent by
August
13, 2008 and shall update same within five (5) days before Closing,
and
shall represent and warrant that such ledger is accurate and correct
in
all material respects.
|
| (9) |
Entity
Owner hereby affirms the representations and warranties contained
in
Xxxxxxxx 00 (x) - (x), (x), (x) and (o) of this Agreement.
|
(c) If
Buyer
shall purchase the Ownership Interest at Closing, Entity Owner hereby agrees
to
indemnify, defend, save, and hold harmless Buyer, and Buyer’s officers,
directors, members, partners, employees, agents, successors, and assigns,
against and in respect to all Damages (as hereinafter defined), provided a
written claim is made by Buyer to Entity Owner on or prior to a date that is
six
(6) months following the Closing Date. “Damages”
as
used
herein shall include only loss or damage (but not consequential damages) in
respect of a breach of a representation and warranty in Section 38(b).
(d) If
Buyer
shall purchase the Ownership Interest at Closing, then the full Purchase Price
shall be paid to Entity Owner and in addition, Buyer shall reimburse Entity
Owner the sum of $30,000 at Closing towards its closing costs and
prorations.
(e) The
provisions of this Section 38
shall
survive the Closing and delivery of the Assignment to Buyer for a period of
six
(6) months following the Closing.”
6. Inspection
Period.
Buyer
hereby acknowledges that the Inspection Period has expired and therefore the
optional termination provisions of Section
5(c)
of the
Agreement are hereby waived and of no further force and effect.
7. Governing
Law.
This
Third Amendment shall be governed by and construed in accordance with the laws
of the State of Tennessee.
8. Counterparts.
This
Third Amendment may be executed by each of the parties hereto in separate
counterparts with the same effect as if all parties hereto executed the same
counterpart. Each such counterpart shall be deemed an original and all of such
counterparts together shall constitute one and the same instrument. A
counterpart executed by a party hereto and transmitted to the other parties
hereto via facsimile or electronic mail transmission will have the same effect
as the delivery of the original counterpart.
9. Full
Force and Effect.
Except
as herein modified and amended, the terms and conditions of the Agreement shall
remain in full force and effect.
SIGNATURE
PAGE TO FOLLOW.
THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
IN
WITNESS WHEREOF, the parties hereto have executed this Third Amendment as of
the
date first written above.
|
BUYER:
Brookside
Properties, Inc., a Tennessee corporation
By:_________________________________________
Print
Name:_________________________________
Title:________________________________________
SELLER:
TRB
Chattanooga LLC, a Tennessee limited liability company
By:_________________________________________
Print
Name:________________________________
Title:_____________________________________
ENTITY
OWNER:
BRT
Realty Trust, a Massachusetts business trust
By:_________________________________________
Print
Name:________________________________
Title:_____________________________________
|
Exhibit
N
Form
of Assignment of Ownership Interest
This
Assignment
(this
“Assignment”)
is
made and entered into as of the ___ day of _____________, 2008, by and between
_______________________, a __________________ (“Assignor”)
and
_____________________________, a _____________________ (“Assignee”).
Recitals
A. Assignor
owns the all of the membership interests (the “Interests”)
in TRB
Chattanooga LLC, a Tennessee limited liability company (the “Entity”).
B. Pursuant
to that certain Purchase and Sale Agreement (as amended and assigned, the
“Purchase
Agreement”),
dated
as of July 17, 2008, by and between Brookside Properties, Inc., a Tennessee
corporation, and TRB Chattanooga LLC, a Tennessee limited liability company,
Assignor has agreed to assign to Assignee all of its right, title and interest
in and to the Interests as herein provided.
Agreement
Now,
Therefore,
in
consideration of the foregoing Recitals and the warranties and mutual covenants
set forth herein, Assignor hereby agrees as follows:
1. Assignment
of Interests.
Effective as of the date hereof, and in consideration of the purchase price
and
other consideration set forth in the Purchase Agreement, Assignor hereby sells,
assigns, transfers, conveys and delivers to Assignee, all of Assignor’s right,
title and interest in and to each of the Interests, including, but not limited
to, all of Assignor’s right, title and interest in and to the properties (real
and personal), capital, cash flow distributions, profits and losses of the
Entity and all other rights to which Assignor may be entitled under Entity’s
articles of organization, operating agreement or other organizational
documents.
2 Representations
and Indemnity of Assignor.
Assignor hereby affirms the representations and warranties set forth in
Section
38(b)
of the
Purchase Agreement. The indemnity provisions of Section
38(c)
of the
Purchase Agreement are hereby incorporated.
3. Further
Assurances.
Upon
request of Assignee, Assignor shall execute and deliver such further instruments
and do or cause to be done such further acts as may be necessary to be done
by
Assignor to effectuate and confirm the assignment of the Interests.
4. Successors
and Assigns.
This
Assignment shall be binding upon and inure to the benefit of Assignor and
Assignee, respectively, and each of their respective heirs, legal
representatives, successors and assigns.
5. Survival
of Representations.
The
representations, warranties, covenants, indemnities and agreements contained
herein shall survive the consummation of the transactions contemplated hereby
for a period of six (6) months.
6. Governing
Law.
This
Assignment shall be construed and enforced in accordance with the laws of the
State of Tennessee applicable to agreements made and to be performed entirely
within said state.
7. As
-
Is. This
is
Assignment is expressly made on an “as-is” basis except as otherwise set forth
in Section
37
of the
Purchase Agreement. The provisions of Section
37
of the
Purchase Agreement are hereby incorporated by reference.
Signature
Page Follows
In
Witness Whereof,
this
Assignment has been executed as of the day and year first above
written.
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Assignor:
__________________________,
a
_____________
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By:
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Name:
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Title:
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