Purchase and Sale Agreement between Chicago Five Portfolio LLC and Strategic Capital Holdings for Fort Lee and Weston Properties
Chicago Five Portfolio LLC agrees to sell, and Strategic Capital Holdings agrees to purchase, two storage facility properties located in Fort Lee, New Jersey, and Weston, Florida, for a total price of $23,050,000. The agreement covers the transfer of real estate, improvements, leases, certain contracts, and related personal and intangible property. The buyer must deposit $150,000 in earnest money, with the balance due at closing. The seller must provide good and marketable title, subject to specified exceptions, and both parties have defined rights and obligations regarding title, due diligence, and closing procedures.
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made and entered into as of the Effective Date (as defined in Section 16.20), by and between CHICAGO FIVE PORTFOLIO LLC, a Delaware limited liability company (the "Seller") and STRATEGIC CAPITAL HOLDINGS, a Virginia limited liability company (the "Purchaser").
W I T N E S S E T H
WHEREAS, Seller desires to sell, and Purchaser desires to purchase, the property hereafter described, at the price and on the terms and conditions hereafter set forth.
NOW, THEREFORE, in consideration of the recitals and mutual covenants hereafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
PURCHASE AND SALE- Property.
- the fee simple interests in and to the following real property: (i) the land and improvements thereon having a street address of 550 Main Street, Fort Lee, New Jersey, (the "Fort Lee Property"), comprising approximately 100,361 net rentable square feet of storage space and 998 rental units; and (ii) the land and improvements thereon having a street address of 16400 State Road 84, Weston, Florida, (the "Weston Property"), comprising approximately 52,096 net rentable square feet of storage space and 655 rental units, said real property being more particularly described on Exhibits A-1 and A-2, respectively, attached hereto and made a part hereof, together with all of the estate, right, title and interest of Seller in and to any land lying in the beds of any streets, roads or avenues, open or proposed, public or private, and all easements, rights, licenses, privileges, rights-of-way, strips and gores, rights of ingress and egress, and such o ther real property rights and interests appurtenant to the foregoing (collectively, the "Real Property"); and
- the buildings, structures, improvements, fixtures, facilities, installations, machinery and equipment in, on, under or over the Real Property and including, but not limited to, the foundations and footings therefor, elevators, plumbing, air conditioning, heating, ventilating, mechanical, electrical and utility systems, signs and light fixtures, doors, windows, fences, parking lots, walks and walkways and each and every other type of physical improvement, located at, on or affixed to the Real Property and, to the fullest extent such items constitute realty under the laws of the State in which the Property is located, as applicable (collectively, the "Improvements") (the Real Property and the Improvements are hereinafter jointly referred to as the "Premises"); and
- all written leases, occupancy agreements and rental agreements (collectively, the "Leases") for rental units in the Property, together with all tenant security deposits held by Seller on the Closing Date (as defined below), and (ii) all cellular tower leases relating to the Property, if any, as more particularly described on Exhibit B attached hereto and made a part hereof (the "Tower Leases"); and
- All items of personal property owned by Seller (and expressly excluding any property owned or controlled by Extra Space Storage LLC or its affiliates ("Extra Space") and located on or about the Premises (the "Tangible Personal Property"), including, without limitation, those items of personal property set forth on Exhibit "C" attached hereto; and
- Contracts. Seller's interest (to the extent the same is assignable) under the "Contracts" (as defined below), other than the "Rejected Contracts" (as defined below); and
(f) Intangible Property. All intangible property (the "Intangible Property") owned by Seller (and expressly excluding any intangible property owned or controlled by Extra Space) and pertaining to the Land, the Improvements, or the Tangible Personal Property, including, without limitation, (i) all "yellow page" advertisements, (ii) all transferable utility contracts, (iii) all transferable telephone exchange numbers, (iv) all transferable plans and specifications, (v) all transferable licenses, permits, engineering plans and landscape plans, and (vi) all assignable warranties and guarantees relating to the Property or any part thereof.
All of the foregoing items are also sometimes hereinafter collectively referred to as the "Property".
PURCHASE PRICE; EARNEST MONEY
- Purchase Price.
TITLE INSURANCE; SURVEY
- Title Commitment and Survey.
DUE DILIGENCE; REVIEW; APPPROVAL
- Due Diligence; Other Conditions Precedent to Agreement
- Due Diligence Information. Seller shall use commercial reasonable efforts, to the extent same are in the possession or reasonable control of Seller, to deliver to Purchaser (at Seller's expense), within ten (10) days after the Effective Date, legible copies of all of the due diligence items listed on Exhibit "A" attached hereto and incorporated herein with respect to each of the properties comprising the Property (collectively, the "Due Diligence Items"). Notwithstanding the foregoing, no failure of Seller to deliver any of the Due Diligence Items shall extend the Due Diligence Period nor shall Seller have any liability in connection therewith. Seller and Purchaser agree that (i) Purchaser's obligation to proceed with the Closing is subject to satisfaction, approval or waiver by Purchaser, in its sole and absolute discretion, on or before the expiration of the Due Diligence Period, of all matters pertaining to the physical, structural, electrical, mechani cal, soil, drainage, environmental, zoning, permitting, land use and other governmental compliance matters and conditions with respect to the Property, in accordance with this Article IV, including without limitation the Due Diligence Items, and (ii) commencing upon the Effective Date hereof and continuing for a period of forty-five (45) days thereafter (the "Due Diligence Period"), Purchaser shall have the right to conduct its due diligence on the Property, in accordance with this Article IV.
- Entry; Inspection. During the Due Diligence Period, Seller shall provide Purchaser with reasonable access to the Property, in accordance with the terms and conditions of this Section 4(b), in order for Purchaser to conduct such inspections, tests and studies as Purchaser may elect of the physical condition of the Property, including, without limitation, inspection and testing for the presence of hazardous materials, and for structural, mechanical, seismic, electrical and other physical and environmental conditions and/or characteristics of the Property. Such access, inspections, tests and studies shall be permitted and conducted on the following terms and conditions:
- Such inspections, tests and studies and Purchaser's access to the Property shall be subject to the rights of existing tenants, licensees or occupants;
- Purchaser shall pay for (and be solely responsible for) all inspections, tests and studies ordered by Purchaser and all inspection fees, appraisal fees, engineering fees and other costs and expenses of any kind incurred by Purchaser or any of Purchaser's agents, representatives, or other persons designated by Purchaser relating to such inspection and its other access shall be at the sole cost and expense of Purchaser;
- In connection with any entry by Purchaser or its agents, employees or contractors onto the Property, Purchaser shall give Seller reasonable advance notice of such entry, but in no event less than twenty-four (24) hours notice, which may be verbal, and shall conduct such entry and any inspections in connection therewith so as to minimize interference with Seller's business on, and Seller's tenants' occupancy of, the Property. Furthermore, Purchaser shall only conduct such entry or inspection with a representative of Seller (designated by Seller) present to accompany the Purchaser, unless Seller otherwise agrees, and Seller agrees to have such representative reasonably available;
- Purchaser shall indemnify and hold Seller (and its officers, directors, shareholders, partners, principals, members, property managers, employees, agents, affiliates and representatives, and any successors or assigns of the foregoing) harmless from and against all costs, expenses, damages, liabilities, liens or claims, including, without limitation, reasonable attorneys' fees and court costs, arising from any entry on the Property by Purchaser, its agents, representatives, employees or contractors in the course of performing inspections, tests and/or inquiries provided for under this Agreement, or resulting from any conditions on the Property created by Purchaser's entry and testing (but not including any claims resulting from the discovery or disclosure of pre-existing physical or environmental conditions on, in, under or about the Property). Furthermore, Purchaser agrees to pay Seller on demand the reasonable cost of repairing and restoring any damage or disturbance which Purchaser or any of Purchaser's agents, representatives, or other persons designated by Purchaser shall cause to the Property upon receipt of reasonably satisfactory evidence of the extent of such damage and reasonably satisfactory evidence of the cost to repair the same, such indemnification shall survive the termination of this Agreement for a period of ten (10) months;
- Prior to conducting any physical inspection or testing at the Property, Purchaser shall obtain, and during the period of such inspection or testing shall maintain, at its sole cost and expense, commercial general liability insurance, including a contractual liability endorsement, and personal injury liability coverage, with Seller and its managing agent, if any, named as additional insureds, from an insurer reasonably acceptable to Seller, which insurance policies shall have limits for bodily injury and death of not less than Three Million Dollars ($3,000,000) for any one occurrence and not less than Three Million Dollars ($3,000,000) for property damage liability for any one occurrence. Prior to making any entry upon the Property, Purchaser shall furnish to Seller a certificate of insurance and a copy of the insurance policy evidencing the foregoing coverages. Purchaser's obligation to obtain and maintain such insurance shall survive the termination of this Agreement for a period of ten (10) months;
- In conducting any inspection of the Property or otherwise accessing the Property, Purchaser shall at all times comply with all laws and regulations of all applicable governmental authorities;
- In the event that Closing hereunder shall not occur for any reason whatsoever, Purchaser shall promptly return to Seller copies of all due diligence materials delivered by Seller to Purchaser and shall destroy all copies and abstracts thereof, however the delivery of such items shall in no event be a condition to the return of the Earnest Money to Purchaser; and
- Notwithstanding anything to the contrary set forth herein, Purchaser or any of Purchaser's agents, representatives, or other persons designated by Purchaser shall not be permitted to conduct borings of the Property or drilling in or on the Property, or any other invasive testing, in connection with the preparation of an environmental audit or in connection with any other inspection of the Property without the prior written consent of Seller, which consent may be conditioned or withheld at Seller's sole and absolute discretion (and if such consent is given, Purchaser shall be obligated to pay to Seller on demand the cost of repairing and restoring any such damage). The preceding sentence shall not be deemed to prohibit Purchaser from conducting Phase I environmental site assessments of the Property,
- Due Diligence Review; Approval. If, prior to the expiration of the Due Diligence Period, based upon such review, examination or inspection, Purchaser determines, in its sole and absolute discretion, for any reason or no reason, that it no longer desires to acquire the Property, then Purchaser shall have the right to terminate this Agreement upon written notice to Seller (the "Termination Notice") prior to the expiration of the Due Diligence Period, whereupon the Earnest Money promptly shall be returned to Purchaser by the Escrow Agent, without the consent or joinder of Seller being required and notwithstanding any contrary instructions which may be provided by Seller to Escrow Agent, and this Agreement, and the obligations of the parties to purchase and sell the Property hereunder, shall terminate, except that Purchaser's obligations under Sections 4(b)(iv) and 4(b)(vii) above shall survive such termination . If, however, on or before the expiration of the Due Diligence Period, Purchaser determines that the foregoing due diligence matters are acceptable to Purchaser and that it intends to proceed with the acquisition of the Property and the Closing hereunder, then Purchaser shall notify Seller of such determination in writing (the "Approval Notice"). However, if Purchaser fails to deliver a Termination Notice or an Approval Notice to Seller prior to the expiration of the Due Diligence Period, then Purchaser shall be deemed to have elected to proceed to Closing, subject to all of the terms and conditions of this Agreement and the obligations of the parties hereunder shall not terminate, but shall continue in full force and effect. Following the Due Diligence Period, Purchaser shall continue to have the right to enter upon the Property, subject to the conditions set forth above, but shall have no further right to terminate this Agreement in connection with any inspections thereafter conducted by Purchaser.
- Contracts. Purchaser shall notify Seller prior to the expiration of the Due Diligence Period which of the "Contracts" (as defined below) Purchaser will require Seller to cancel at Closing (the "Rejected Contracts"), and Seller hereby agrees to cancel same not later than Closing. However, if any of the Contracts are not terminable upon thirty (30) days notice or less, and without payment of a fee or penalty, then Purchaser agrees to assume such Contracts at Closing, provided they are assignable. Any Rejected Contracts which are not assignable shall be cancelled by Seller at Purchaser's written request, but Purchaser shall pay any fee or penalty Closing. If Purchaser shall notify Seller in writing during the Due Diligence Period that there are Rejected Contracts that are not cancellable and are not assumable, then Seller and Purchaser shall reasonably and in good faith cooperate with each other to either obtain consent to Purchaser's as sumption thereof or the cancellation thereof.
COVENANTS
- Seller's Covenants.
- Except as agreed upon in writing by Purchaser, such agreement not to be unreasonably withheld, delayed or conditioned, Seller will not make any alterations or physical changes to the Property, except in the ordinary course of business or as required under applicable law or under the existing mortgage loan documents, and Seller will maintain the Property in keeping with its current practices.
- Seller will not sell, transfer, convey or encumber, or cause to be sold, transferred, conveyed or encumbered, the Property, or any part thereof or interest therein, or consent to or acquiesce in any alteration or amendment to the zoning classification of the Property.
- Seller agrees to operate and maintain the Property in the normal course of business substantially in accordance with Seller's past practices with respect to the Property, normal wear and tear excepted, subject, however, to the requirements of Article XV.
- Seller agrees to enter into only those third-party contracts that are cancellable on thirty (30) days written notice or less, without payment of any fee or penalty.
- Seller agrees not to (i) enter into any new leases, other than month-to-month leases entered into on market terms, or (ii) amend or terminate (other than due to a default thereunder) any existing leases, including the Tower Leases, of the Property, without the prior written consent of Purchaser not to be unreasonably withheld, delayed or conditioned.
- Seller agrees to promptly provide Purchaser with copies of any and all notices which Seller receives from and after the Effective Date concerning (i) any proposed or threatened condemnation of the Property, (ii) any alleged violations of the Property with respect to applicable governmental laws or requirements, or (iii) any litigation filed or threatened against Seller or the Property.
- Seller will continue to maintain all insurance policies currently in force with respect to the Property in such amounts as is maintained by Seller on the date of this Agreement (or replacements thereof containing substantially similar coverage to the extent available on commercially reasonable terms). Copies of such insurance policies are attached hereto as Exhibit J.
REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
- Seller's Representations and Warranties.
- Seller is a limited liability company, duly organized and validly existing under the law of the State of Delaware. Seller has the full right, power and authority to enter into this Agreement and to sell and convey the Property to Purchaser as provided herein and to carry out its obligations hereunder. None of the execution, delivery or performance of this Agreement by Seller does or will, with or without the giving or notice, lapse of time or both (1) violate, conflict with, constitute a default under (A) the organization documents of Seller or any agreement, instrument or other document to which Seller is a party or by which it is bound, or (B) any judgment, decree, order, statute, injunction, rule, regulation or the like or a governmental unit, authority, agency or instrumentality applicable to Seller or (2) result in the creation of any lien upon the Property.
- This Agreement constitutes, and when so executed and delivered Seller's Closing Deliveries will constitute, the legal, valid and binding obligations of Seller, enforceable against Seller in accordance with its and their terms.
- There is no litigation, action, suit, arbitration or governmental investigation pending, or to Seller's actual knowledge threatened, against or relating to Seller or the Property, except as set forth on Exhibit "D" attached hereto.
- Seller is not a "foreign person" as such term is defined in Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended.
- There are no pending (or to Seller's actual knowledge, threatened) condemnation or similar proceeding or public improvements affecting the Property or any part thereof.
- No portion of the Property comprises part of a tax parcel which includes property other than property comprising all or a portion of the Premises. To Seller's actual knowledge, no application or proceeding (other than a pending tax reduction proceeding with respect to the Weston Property) is pending with respect to a reduction or an increase of such taxes and there are no tax refund proceedings relating to the Property which are currently pending. Seller has not received written notice of, and has no actual knowledge concerning, any special tax or assessment to be levied against the Property.
- Seller has not received any notice from any insurance company or inspection or rating bureau setting forth any requirements as a condition to the continuation of any insurance coverage on or with respect to the Property or the continuation of such insurance coverage at the existing premium rates and otherwise has no actual knowledge of any such requirements.
- Seller has not (i) made a general assignment for the benefit of its creditors, (ii) filed any voluntary petition in bankruptcy or suffered the filing of any involuntary petition by Seller's creditors, (iii) suffered the appointment of a receiver to take possession of all, or substantially all, of Seller's assets, or (iv) admitted in writing its inability to pay its debts as they become due.
- To Seller's actual knowledge, the list of contracts attached hereto as Exhibit E (the "Contracts"), is a true, correct and complete list of all service contracts, equipment leases and/or maintenance agreements affecting the Property, and there are no other such agreements affecting the Property.
- Seller has no actual knowledge of, and has not received, with respect to the Property, written notice from any governmental authority regarding, any change to the zoning classification, any condemnation proceedings or proceedings to widen or realign any street or highway adjacent to the Property or that otherwise affects the Real Property or the Improvements.
- except for those tenants in possession of the Property under written leases for space in the Property, as shown on the rent roll attached hereto as Exhibit F (the "Rent Roll"), there are no parties in possession of, or claiming any possession to, any portion of the Property.
- Seller has no actual knowledge of, and has not received, any written notice of any violation of any governmental requirements (including "Environmental Requirements", as defined below) concerning the Property, which have not been remedied.
- At Closing there will be no unpaid bills or claims in connection with any repair of the Property by or on behalf of Seller that could result in the filing of a lien against the Property.
- The Rent Roll (which is effective as of the date indicated thereon), and as the same shall be updated and recertified at Closing by Seller, is and shall be true, correct and complete in all material respects and no concessions, discounts or other periods of free or discounted rent have been given other than those reflected on such Rent Roll.
- Seller has no actual knowledge, and has received no notice, regarding any environmental contamination on, at or adjacent to the Property.
- Seller has not received any written or verbal notice or request from any insurance company or board of fire underwriters (or any organization exercising functions similar thereto) requesting the performance of any work or alterations with respect to the Property, except those as to which Seller has completed remedial action.
- There are no employment agreements of any kind to which Seller is a party, including union or collective bargaining agreements, which will be binding on Purchaser after the Closing.
- Except as disclosed in any inspection, site assessment, engineering or similar report provided to or obtained by Purchaser, Seller has no actual knowledge of any material defects in the drainage systems, foundations, roofs, walls, superstructures, plumbing, air conditioning and heating equipment, electrical wiring, boilers, hot water heaters or other portions of the Property.
- To Seller's actual knowledge, except as disclosed in any environmental, site assessment or similar report provided to or obtained by Purchaser, the Improvements are free from the presence or suspected presence of any form of mold, including those producing mycotoxins, specifically including, but not limited to, Aspergillus, Penicillium, and Stachybotrys.
(t) To Seller's actual knowledge, except as disclosed in any environmental, site assessment or similar report provided to or obtained by Purchaser, there are no underground storage tanks located on or under the Property, there are no conditions on, at or relating to the Property which are in non-compliance with "Environmental Requirements" (as defined below), and there are no "Hazardous Materials" (as defined below) on, in or under the Property in quantities that require reporting, investigation or remediation under Environmental Requirements.
Seller shall deliver a certificate to Purchaser at Closing (the "Reaffirmation Certificate"), updating and recertifying all of the foregoing representations and warranties to Purchaser as of the Closing Date or setting forth, as applicable, any changes or qualification to such representations and warranties.
Any and all uses of the phrase "to Seller's actual knowledge" or other references to Seller's knowledge in this Agreement, shall mean the actual, present, conscious knowledge of Seller as to a fact at the time given, without any affirmative duty of investigation or inquiry. Without limiting the foregoing, Purchaser acknowledges that the Seller may not have performed and is not obligated to hereafter perform any investigation or review of any files or other information in the possession of Seller, or to make any inquiry of any persons, or to take any other actions in connection with the representations or warranties of Seller set forth in this Agreement. Neither the actual, present, conscious knowledge of any other individual or entity, nor the constructive knowledge of the Seller or of any other individual or entity, shall be imputed to the Seller.
The representations and warranties of Seller set forth in this Section 6.1 are subject to the following limitations: (i) to the extent, at any time prior to Closing, that Seller shall deliver to Purchaser (or any of its representatives) written information with respect to the Property that contains provisions inconsistent with any of such representations and warranties, then such representations and warranties shall be deemed modified to conform to such provisions and Purchaser shall be deemed to have knowledge thereof and (ii) in the event that, prior to Closing, Purchaser shall obtain knowledge of any information that is contradictory to, and would constitute the basis of a breach of, any representation or warranty or failure to satisfy any condition on the part of Seller, then, promptly thereafter (and, in all events, prior to Closing), Purchaser shall deliver to Seller notice of such information specifying the representation, warranty or condition to which such information relates, and Purchaser further acknowledges that such representation or warranty will not be deemed breached in the event Purchaser shall have, prior to Closing, obtained knowledge of any information that is contradictory to such representation or warranty and shall have failed to disclose same to Seller as required hereby, and Purchaser shall not be entitled to bring any action after the Closing Date based on such breach or failure. Notwithstanding the foregoing, if Purchaser shall have disclosed to Seller the contradictory information that forms the basis of a breach that would cause the failure of any of Purchaser's conditions to closing set forth in Section 8.1 hereof, then Purchaser, as Purchaser's sole remedy in connection with the failure of such condition, absent a cure of such breach on the part of Seller pursuant to the terms hereof, shall have the right to terminate this Agreement upon notice to Seller, whereupon the Earnest Money shall be returned to Purchaser, and neither party shall have any obligations h ereunder other than the Surviving Obligations. Without limiting the generality of the foregoing, Purchaser shall be deemed to know that any representation or warranty contained herein is untrue, inaccurate or breached to the extent that (1) Purchaser or its representatives has actual knowledge of any fact or information which is inconsistent with such representation or warranty or (2) this Agreement or written information with respect to the property delivered by or on behalf of Seller to Purchaser or its representatives contain provisions inconsistent with any of such representations and warranties.
For purposes of this Agreement, "Hazardous Materials" shall mean any substance which is or contains (i) any "hazardous substance" as now or hereafter defined in Section 101(14) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section 9601 et seq.) ("CERCLA") or any regulations promulgated under CERCLA; (ii) any "hazardous waste" as now or hereafter defined in the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.) ("RCRA") or regulations promulgated under RCRA; (iii) any substance regulated by the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.); (iv) gasoline, diesel fuel, or other petroleum hydrocarbons; (v) asbestos and asbestos containing materials, in any form, whether friable or non-friable; (vi) polychlorinated biphenyls; (vii) radon gas; (viii) any radioactive material, including any "source material", "special nuclear material" or "byproduct material", as now or hereafter defined in 42 U.S.C. Section 2011 et seq.; and (ix) any additional substances or materials which are now or hereafter classified or considered to be hazardous or toxic under "Environmental Requirements" (as defined below) or the common law, or any other applicable laws relating to the Property. Hazardous Materials shall include, without limitation, any substance, the presence of which on the Property, (A) requires reporting, investigation or remediation under Environmental Requirements; or (B) causes or threatens to cause a nuisance on the Property or adjacent property or poses or threatens to pose a hazard to the health or safety of persons on the Property or adjacent property. Further, for purposes of this Agreement, "Environmental Requirements" shall mean all laws, ordinances, statutes, codes, rules, regulations, agreements, judgments, orders, an d decrees, now or hereafter enacted, promulgated, or amended, of the United States, the states, the counties, the cities, or any other political subdivisions in which the Property is located, and any other political subdivision, agency or instrumentality exercising jurisdiction over the owner of the Property, the Property, or the use of the Property, relating to pollution, the protection or regulation of human health, natural resources, or the environment, or the emission, discharge, release or threatened release of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or waste or Hazardous Materials into the environment (including, without limitation, ambient air, surface water, ground water or land or soil).
- Purchaser is a limited liability company, duly organized, validly existing and in good standing under the law of the State of Virginia and is, or at Closing will be, in good standing and qualified to do business under the laws of the State in which each Property is located. Purchaser has the full right, power and authority to enter into this Agreement and to purchase the Property from Seller as provided herein and to carry out its obligations hereunder. None of the execution, delivery or performance of this Agreement by Purchaser does or will, with or without the giving or notice, lapse of time or both (1) violate, conflict with, constitute a default under (A) the organization documents of Purchaser or any agreement, instrument or other document to which Purchaser is a party or by which it is bound, or (B) any judgment, decree, order, statute, injunction, rule, regulation or the like of a governmental unit, authority, agency or instrumentality applicable to Purchaser, or (2) require the approval or waiver of or filing with any person (including, without limitation, any governmental unit, authority, agency or instrumentality). The person signing this Agreement on behalf of Purchaser is authorized to do so.
- This Agreement constitutes, and when so executed and delivered Purchaser's Closing Deliveries will constitute, the legal, valid and binding obligations of Purchaser, enforceable against Purchaser in accordance with its and their terms.
- There are no judgments, orders or decrees of any kind against Purchaser unpaid or unsatisfied of record and no legal action, suit or other legal or administrative proceeding pending before any court or administrative agency which has, or is likely to have, any material adverse effect on (i) the business or assets or the condition, financial or otherwise, of Purchaser or (ii) the ability of Purchaser to perform its obligations under this Agreement.
- Purchaser has not (i) made a general assignment for the benefit of its creditors, (ii) filed any voluntary petition in bankruptcy or suffered the filing of any involuntary petition by Purchaser's creditors, (iii) suffered the appointment of a receiver to take possession of all, or substantially all, of Purchaser's assets, or (iv) admitted in writing its ability to pay its debts as they become due.
- Purchaser is not acquiring the Property with the assets of an employee benefit plan (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended "ERISA"). Purchaser is not a "party in interest" within the meaning of Section 3(3) of ERISA with respect to any beneficial owner of Seller.
- Neither Purchaser nor any member, partner or shareholder of Purchaser, nor any owner of a direct or indirect interest in Purchaser (x) is listed on any Governmental Lists (as defined below), (y) is a person or entity who has been determined by competent authority to be subject to the prohibitions contained in Executive Order No. 13224 (Sept. 23, 2001) or any other similar prohibitions contained in the rules and regulations of OFAC (as defined below) or in any enabling legislation or other Executive Orders in respect thereof, or (z) is currently under investigation by any governmental authority for alleged criminal activity or Patriot Act Offenses. For purposes hereof, the term "Patriot Act Offenses" shall mean any violation of the criminal laws of the United States of America or of any of the several states, or that would be a criminal violation if committed within the jurisdiction of the United States of America or any of the several states, relating to terrorism or the laundering of monetary instruments, including any offense under (A) the criminal laws against terrorism; (B) the criminal laws against money laundering; (C) the Bank Secrecy Act, as amended; (D) the Money Laundering Control Act of 1986, as amended; or (E) the Patriot Act. "Patriot Act Offenses" shall also include the crimes of conspiracy to commit, or aiding and abetting another to commit, a Patriot Act Offense. For purposes hereof, "Governmental Lists" shall mean (I) the Specially Designated Nationals and Blocked Persons Lists maintained by the Office of Foreign Assets Control ("OFAC"), (II) any other list of terrorists, terrorist organizations or narcotics traffickers maintained pursuant to any of the Rules and Regulations of OFAC, or (III) any similar lists maintained by the United States Department of State, the United States Department of Commerce or any other governmental authority or pursuant to any Executive Order of the President of the United States of America.
- Subject to the representations and warranties of Seller set forth in Section 6.1 of this Agreement, Purchaser, for itself and its agents, affiliates, successors and assigns, hereby releases and forever discharges Seller, its employees, agents, affiliates, successors and assigns from any and all rights, claims and demands at law or in equity, whether known or unknown at the time of this Agreement, which Purchaser has or may have in the future, arising out of the physical, environmental, economic or legal condition of the Property, including, without limitation, any claim for indemnification or contribution arising under environmental laws or any similar federal, state or local statute, rule or ordinance relating to liability of property owners for environmental matters.
ESCROW AND CLOSING
- Closing.
CONDITIONS TO CLOSING
- Purchaser's Conditions to Closing.
- There shall have been no uncured breach of any representation or warranty given by Seller herein that would have a material adverse effect on the use, value or operation of the Property;
- Seller shall have substantially performed all of the other covenants and other obligations to be performed by it under this Agreement, after the expiration of any applicable notice and cure periods set forth in Article XII below; other than the obligations required to be performed by Seller at Closing, which must be fully performed by Seller at Closing;
- Purchaser shall have received the Title Policy (or a signed, marked title commitment) from the Title Company, as further described in Section 3.3 above; and
- There shall be no litigation or proceeding threatened or pending before any state, federal or local court, tribunal, arbitrator, or governmental agency which would (A) adversely affect Seller's obligations to be performed at Closing, or (B) adversely affect, other than to a de minimis extent, (a) the performance by Seller of its obligations under this Agreement other than its obligations to be performed at Closing, or (b) the Property.
In the event that any of the foregoing conditions to Purchaser's obligation to close has not been either fulfilled or waived in writing by Purchaser as of the Closing Date (as extended by cure or by the Extension Option in each case pursuant to Section 7.1 hereof) then Purchaser shall be entitled to terminate this Agreement and receive a refund of the Earnest Money, in addition to any other remedies, if and to the extent applicable, available to Purchaser hereunder.
CONDITIONS TO SELLER'S OBLIGATION TO CLOSE
- Seller's Conditions to Closing.
- There shall have been no uncured breach of any material representation or warranty given by Purchaser herein;
- Purchaser shall have substantially performed all covenants and other obligations to be performed by it under this Agreement (including, without limitation, delivery to Escrow Agent of the full balance of the Purchase Price), subject to any applicable notice and cure period provided for herein other than the obligations required to be performed by Purchaser at Closing, which must be fully performed by Purchaser at Closing; and
- There shall be no litigation or proceeding pending before any state, federal or local court, tribunal, arbitrator, mediator or any other forum or governmental agency which would be reasonably likely to have a material adverse effect on Seller or Seller's ability to convey the Property to Purchaser.
In the event that either of the conditions set forth in Section 9.1(i) or 9.1(ii) above has not been either fulfilled or waived in writing by Seller as of the Closing Date (as extended by cure or by the Extension Option in each case pursuant to Section 7.1 hereof), then Seller shall be entitled to terminate this Agreement and receive the Earnest Money, as provided in Section 12.1 below. Notwithstanding the foregoing, in the event that the condition set forth in Section 9.1(iii) above has not been satisfied or waived in writing by both Seller and Purchaser as of the Closing Date (as extended by cure or by the Extension Option in each case pursuant to Section 7.1 hereof), then either Seller or Purchaser shall be entitled to terminate this Agreement upon notice to the other party, whereupon the Earnest Money shall be returned to Purchaser.
CLOSING DELIVERIES
- Seller's Closing Deliveries.
- a duly executed bargain and sale deed with covenant against grantor's assets for the Fort Lee Property to be conveyed pursuant to this Agreement, in the form attached hereto as Exhibit "G-1";
- a duly executed deed for the Weston Property to be conveyed pursuant to this Agreement, in the form attached hereto as Exhibit "G-2",;
- a duly executed Assignment of Personal Property, Service Contracts, Warranties and Leases (the "Bill of Sale") in the form of Exhibit "H" attached hereto;
- an affidavit stating Seller's U.S. taxpayer identification number and that Seller is a "United States person", as defined by Internal Revenue Code Section 1445(f)(3) and Section 7701(b), in the form attached hereto as Exhibit "I";
- originals, to the extent in Seller's possession or reasonable control, or copies of all of the Leases and the Tower Leases, which may be delivered on-site, together with all security and other deposits which, under the terms of the Leases in effect at Closing, are required to be returned to the tenants thereunder (which deposits shall be applied as a credit against the Purchase Price at Closing);
- originals, to the extent in Seller's possession or reasonable control, or copies of all of the Contracts other than Rejected Contracts, and evidence that all Rejected Contracts have been cancelled;
- evidence of the termination of any and all management agreements affecting the Property, effective as of the Closing Date, and duly executed by Seller and the property manager;
- Such organizational and authorizing documents of Seller as shall be reasonably required by Purchaser and the Title Company to evidence Seller's authority to consummate the transactions contemplated by this Agreement;
- the Reaffirmation Certificate;
- One signed statement or notice to all tenants of the Property prepared by Purchaser and reasonably approved by Seller notifying such tenants that the Property has been transferred to Purchaser and that Purchaser is responsible for security deposits (specifying the amounts of such deposits) returnable under the Leases and notifying such tenants of the new address where tenants are to make rental payments after the Closing (the "Tenant Notice Letter"). The amounts of the security deposits set forth in the tenant notices shall correspond to the security deposits set forth in the Rent Roll, which shall be updated to a date not earlier than two (2) days prior to Closing, and delivered by Seller to Purchaser at Closing;
- an executed settlement statement prepared by the Title Company; and
- such other documents and instruments as may be required by any other provision of this Agreement or as may reasonably be required to carry out the terms and intent of this Agreement.
- Payment of the balance of the Purchase Price payable at the Closing (as adjusted pursuant to Article XI of this Agreement);
- a duly executed Bill of Sale;
- a duly executed Tenant Notice Letter;
- an executed settlement statement prepared by the Title Company;
- duly executed originals of any applicable transfer tax forms or similar forms;
- such organizational and authorizing documents of Purchaser as shall be reasonably required by Seller and the Title Company to evidence Purchaser's authority to consummate the transactions contemplated by this Agreement; and
- such other documents and instruments as may be required by any other provision of this Agreement or as may reasonably be required to carry out the terms and intent of this Agreement.
PRORATIONS AND ADJUSTMENTS
- Prorations and Adjustments.
- Utilities including, without limitation, water, electricity, gas, telephone, fuel and other utility charges, shall not be prorated (except to the extent set forth below). Seller shall use good-faith reasonable efforts to cause meters to be read as of the day prior to Closing and service to be turned over to Purchaser in Purchaser's name as of the Closing Date, such that Seller shall be responsible for charges incurred up to the date of Closing and Purchaser shall be responsible for same commencing on the date of Closing; provided, however, to the extent such utility meters are not read as of the day prior to Closing, such utilities shall be prorated based on the most recent bill for same, with such proration to be adjusted following Closing when the actual bills become available, which obligation shall survive Closing;
- All (i) general real estate and personal property taxes and (ii) all payments under the Contracts assumed by Purchaser at Closing, in each case paid in advance by Seller in respect of periods after the Closing Date;
- All accrued but unpaid general real estate and personal property taxes, as well as all special and general assessments affecting the Property, will be prorated on the basis of the actual taxes for the Premises for the calendar year in which the Closing occurs, and if the actual taxes are not known as of the Closing Date, then on the basis of the most recently ascertainable taxes for the Property. Any tax proration based on an estimate shall be adjusted between Seller and Purchaser within thirty (30) days of the date that exact amounts are available, which obligation shall survive Closing. At Closing, Purchaser shall assume the obligations to pay all such taxes for the calendar year in which the Closing occurs;
- All rents, other amounts payable by the tenants under the Leases and the Tower Leases, and all other income with respect to the Property for the month in which the Closing occurs, shall be prorated to the Closing Date. If the Closing shall occur before rents and all other amounts payable by the tenants under the Leases and the Tower Leases and all other income from the Property have actually been paid for the month in which the Closing occurs, the apportionment of such rents and other amounts and other income shall be upon the basis of such rents, other amounts and other income actually received by Seller, with Purchaser receiving the portion of all such rentals attributable to the period from and after Closing. For a period of thirty (30) days following Closing, if any rents which are delinquent as of Closing are actually received by Purchaser, in good funds, all such amounts shall first be applied to post-closing rents and other amounts due to Purchaser for the period from and afte r Closing, and the balance shall be paid by Purchaser to Seller within ten (10) days following Purchaser's receipt thereof, to the extent, and only to the extent of any rental delinquencies owed by any such tenant to Seller for the period prior to Closing. Notwithstanding the foregoing provisions of this Section 11.1(d), all rentals that are received by Purchaser more than thirty (30) days following Closing shall be retained by Purchaser, and Seller shall have no rights with respect thereto. If, subsequent to the Closing, any rents or other income are actually received by Seller, Seller shall promptly remit Purchaser's pro-rata share thereof calculated as aforesaid, to Purchaser. Seller agrees that, after the Closing, it shall not file any eviction action in an effort to collect any outstanding rents that remain owing to Seller after the Closing.
- License and permit fees, if any, under assigned licenses and permits;
- All other items customarily prorated in real estate closings in the State in which the Property is located, or expressly required by any other provision of this Agreement to be prorated or adjusted.
DEFAULT
- Purchaser's Default.
EXPENSES
- Purchaser's Expenses
BROKERS
- Brokers.
DESTRUCTION OF IMPROVEMENTS; CONDEMNATION
- Casualty; Condemnation
- Damage or Destruction. If, prior to Closing, all or any portion of the Property is damaged or destroyed by fire, earthquake or other casualty (other than any of the foregoing caused by Purchaser or its agents), Seller shall promptly notify Purchaser of such fact and if such damage or destruction is "Material" (as defined below), then Purchaser shall have the option to terminate this Agreement (as to both Properties only) upon notice to Seller given not later than five (5) business days after receipt of Seller's written notice. If (a) Purchaser does not elect to terminate this Agreement with respect to a Material casualty within such five (5) business day period, or (b) there is damage to or destruction of a Property that is not Material, then (i) Purchaser shall close escrow as provided in this Agreement and at the Closing, Seller shall, unless Seller has repaired such damage or destruction prior to the Closing (which repairs shall be subject to Purchaser's re asonable approval), assign and turn over to Purchaser, and Purchaser shall be entitled to receive and keep, all right, title and interest of Seller in and to any uncollected insurance proceeds (including rent loss insurance for the period after Closing) which Seller may be entitled to receive as a result of such damage or destruction, (ii) Purchaser shall receive, as a credit against the Purchase Price, an amount equal to the deductible amount, if any, with respect to such insurance proceeds, (unless Seller has repaired such damage or destruction prior to the Closing), (iii) Seller shall deliver to Purchaser at closing all insurance proceeds theretofore received by Seller and not expended toward the repair of the Property, including rent loss insurance for the period after Closing, and (iv) Purchaser shall have the right to participate in the adjustment of any insurance claim which may occur prior to Closing. For purposes hereof, "Material" damage to or destruction of the Property shall mea n damage or destruction to all or any portion of the Property that is either uninsured or insured, the cost of repair or replacement related to which exceeds Three Hundred Fifty Thousand and No/100 Dollars ($350,000.00), as applicable, as reasonably estimated by an independent insurance claims adjuster doing business in the county in which the affected Property is located, which claims adjuster shall be reasonably satisfactory to Seller and Purchaser.
- Condemnation. If, prior to the Closing Date, all or any of an individual Property is taken by eminent domain or condemnation (or is the subject of a pending taking which has not been consummated), Seller shall promptly notify Purchaser of such fact and if such taking involves a "Significant Portion" (as defined below) of the Property, Purchaser shall have the option to terminate this Agreement (as to both Properties only) upon notice to Seller given not later than five (5) business days after receipt of Seller's written notice. If Purchaser does not elect to terminate this Agreement, or if any taking by eminent domain or condemnation of the Property is not a Significant Portion of the Property, then at the Closing Seller shall assign and turn over, and Purchaser shall be entitled to receive and keep, all awards or other proceeds for such taking by eminent domain or condemnation. A "Significant Portion" of the Property means (i) a material por tion of any legally required driveway on the Land or other access if such driveway or other access is the principal means of ingress thereto or egress therefrom, (ii) any taking where the condemnation award exceeds or is reasonably expected to exceed Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00), or (iii) any other taking of all or any portion of the Property which materially or adversely affects the continued operation of either project comprising the Property as a self storage facility.
- Election to Terminate. If Purchaser elects to terminate this Agreement pursuant to Sections 15.1(a) or 15.1(b) above, then (a) this Agreement shall terminate and neither party shall have any further rights, obligations or liabilities hereunder, except for the obligations that expressly survive the expiration or termination of this Agreement, (b) Purchaser shall be entitled to return of the Earnest Money, and (c) the Purchaser and Seller shall each pay 50% of the cancellation charges, if any, of the Escrow Agent and Title Company (not to exceed the sum of One Thousand and no/100 Dollars ($1,000.00) in the aggregate).
GENERAL PROVISIONS
- Entire Agreement.
If to Purchaser: Strategic Capital Holdings, LLC
111 Corporate Drive, Suite 120
Ladera Ranch, CA 92694
Attn: H. Michael Schwartz
Phone: (949) 429-6600
Fax: (949) 429-6606
E-mail: ***@***
With copies to: Strategic Capital Holdings, LLC
5949 Sherry Lane, Suite 1050
Dallas, TX 75225
Attn: Wayne Johnson
Phone: (214) 217-9797
Fax: (214) 217-9798
E-mail: ***@***
Mastrogiovanni Schorsch & Mersky, P.C.
2001 Bryan Street, Suite 1250
Dallas, Texas 75201
Attn: Charles Mersky, Esq.
Tel: (214) 922-8800
Fax: (214) 922-8801
E-mail: ***@***
If to Seller: Chicago Five Portfolio LLC
c/o Babcock & Brown Real Estate Investments LLC
1 Dag Hammarskjold Plaza
885 Second Avenue, 49th Floor
New York, New York 10017
Attn: Adam Nadborny, Esq.
Phone: (212) 796-3904
Fax: (212) 935-8949
E-mail: ***@***
With a Copy to: Thomas G. Maira, Esq.
Reed Smith LLP
599 Lexington Avenue
New York, New York 10022
Phone: (212) 205-6110
Fax: ###-###-####
E-mail: ***@***
If to Escrow Agent
or Title Company: Title Associates
A Division of Stewart Title Insurance Company
825 Third Avenue, 30th Floor
New York, New York 10022
Attn: John Caruso
Fax: 212 ###-###-####
E-mail: ***@***
(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST PURCHASER OR SELLER ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN NEW YORK COUNTY, NEW YORK AND PURCHASER AND SELLER WAIVE ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND PURCHASER AND SELLER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING AND HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY CLAIM THAT ANY SUCH LEGAL SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) PURCHASER AND SELLER HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING HEREUNDER OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND PURCHASER AND SELLER HEREBY AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH OF THE SIGNATORIES HERETO TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the day and year first above written.
PURCHASER
:STRATEGIC CAPITAL HOLDINGS LLC, a Virginia limited liability company
By: /s/ H. Michael Schwartz
Name: H. Michael Schwartz
Title: President
Date: December 15, 2009
SELLER
:CHICAGO FIVE PORTFOLIO LLC, a Delaware limited liability company
By: /s/ Karen Fagerstrom
Name: Karen Fagerstrom
Title: President
Date: January 20, 2010