EXHIBIT 1
3/8/02
REAL ESTATE PURCHASE AGREEMENT
COUNTRYBROOK APARTMENTS
This purchase agreement ("Agreement" or "Contract") made and
entered into by and between Realmark - Countrybrook, L.L.C., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Seller") and Research Properties, Inc. on behalf of
an entity to be named, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ #▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Buyer").
RECITALS:
A. Buyer desires to purchase from Seller, and Seller desires to sell to
Buyer, (1) a certain parcel of real property and all of the improvements and
buildings situated thereon, and the hereditaments and appurtenances thereto (the
"Real Property"), consisting of an apartment complex containing 240 residential
apartment units known as Countrybrook Apartments, and (2) all personal property,
equipment, fixtures, supplies, inventories, replacement parts, and intellectual
property (excluding, however, any use of the name "Realmark" or any related or
similar name, it being understood that only the right, title and interest of
Seller to the name of the apartment complex shall be transferred and excluding
computer equipment and software), owned by Seller, utilized in the operation or
management of the apartment complex, and located at said apartment complex,
including without limitation (a) all licenses, permits and certificates of
occupancy held by the Seller for the Property which may be lawfully assigned and
which may be necessary or desirable, in Buyer's opinion, to operate the
Property; (b) any warranties and guaranties from manufacturers, suppliers and
installers pertaining to the Property including roof warranties and warranties
covering appliances within the Property apartment units; (c) the name
"Countrybrook" and all variations thereof; (d) the telephone number(s) for all
of Seller's telephones installed at the Property; (e) all architectural
drawings, plans and specifications and other documents in Seller's possession
pertaining to the construction of the Property; (f) all business records, books
of account, customer lists, correspondence, and files relating to any tenancy or
occupancy of the real property and improvements (on computer disk if requested
by Buyer); (g) all signs on and relating to Countrybrook Apartments; and
generally all other intangible property at the Property (collectively the
"Personal Property"). The Real Property together with the Personal Property
applicable to the apartment complex will be herein referred to as the
"Property".
B. Attached hereto and made a part hereof is the legal description of
the Real Property, marked with the name of the apartment complex and attached as
Exhibit A. A detailed list of the Personal Property is attached to this
Agreement as Exhibit B. Any subsequent amendment to either Exhibit A or Exhibit
B agreed to by Seller and Buyer, or to any other Exhibit to this Agreement, is
to be considered an integral part of this Agreement.
FOR AND IN CONSIDERATION of the mutual promises, covenants and
agreements, hereinafter set forth, the Parties agree as follows:
SECTION 1. PURCHASE PRICE.
(a) The purchase price to be paid Seller for the Property is
$5,200,000.00 ("Purchase Price") to be paid in the following manner:
▇▇▇▇▇▇▇ Money at signing of
Purchase Agreement $ 50,000.00
▇▇▇▇▇▇▇ Money after expiration
of due diligence and financing
contingency $ 50,000.00
Cash at closing (subject to prorations and
allocations per Section 5), and reduced by
assumption of Seller's existing first mortgage
balance at closing $5,100,000.00
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Total $5,200,000.00
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and payable by Buyer on closing of title and delivery of the Deed ("Closing") in
immediately available good, federal funds.
(b) All existing debt (except the first mortgage to be
assumed), liens, (other than tax liens) impositions and similar encumbrances
affecting the Real Property will be discharged or, if annual real estate taxes
or special assessment liens, prorated in accordance with Section 5 and paid at
the Closing.
(c) The ▇▇▇▇▇▇▇ Money (sometime referred to as the
"Deposit")in the amount stated in Section 1 (a) above will be deposited with the
Commonwealth Land Title Insurance Company, as Escrow Agent (the "Escrow Agent"),
within two (2) days from the date of Seller's execution of this Agreement.
Absent any contrary provision of this Agreement, the total ▇▇▇▇▇▇▇ Money in the
amount of $100,000.00 will remain on deposit with the Escrow Agent until the
Closing of the Property or cancellation of escrow. If the ▇▇▇▇▇▇▇ Money deposit
is not made by the date or dates as herein above set forth, Seller may terminate
this Agreement. Interest on the ▇▇▇▇▇▇▇ Money shall belong to Buyer. Buyer shall
have the right to direct the investment of the Deposit so long as it is with a
financial institution the deposits of which are insured up to $100,000 by an
agency of the United States government, and Buyer shall pay any fees required
for placing the Deposit in an interest bearing account. Upon any permitted
termination of this Agreement by Buyer, including but not limited to the failure
of the conditions precedent set out in Section 7, the ▇▇▇▇▇▇▇ Money shall be
returned to Buyer upon demand, and in compliance with all other terms and
provisions of this Agreement.
SECTION 2. PLACE AND TIME OF CLOSING.
(a) Subject to the conditions precedent set forth herein
having been met or waived, the Closing will take place on or before 30 days
after expiration of due diligence and finance contingencies, whichever is later,
unless extended as otherwise set forth in this Agreement, time being of the
essence. As used herein the term "Closing" will mean the meeting of the parties
at which delivery of the Deed and payment of the Purchase Price as called for in
Section 1 occurs for the Property, which may occur through an escrow arrangement
with Escrow Agent.
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(b) This Agreement, as an offer to purchase when signed by
Buyer, shall automatically terminate if not accepted in final form by Seller by
5 P.M., Eastern Standard Time, within three (3) business days from the date on
which Buyer executed this Agreement as indicated below, which acceptance shall
occur by execution of this Agreement and delivery of an executed original to
Buyer.
SECTION 3. ENTRY ON THE PROPERTY/PURCHASER'S CONTINGENCIES.
(a) Due Diligence. Buyer, or its designees, will have a period of
fifteen (15) days after the date on which Seller has delivered to Buyer all
materials called for in Section 3(a)(i) below (the "Due Diligence Period"), to
enter the Property to make inspections, engineering tests, surveys, and other
such tests, examinations and inspections as Buyer may desire as long as such
tests, examinations, etc., do not unreasonably interfere with the operations or
any current use of the Property, and to review all materials to be provided by
Seller pursuant to Section 3(a)(i) below. All entry upon the Property and any
and all contact with on site employees of Seller by Buyer (and Buyer's agents
and representatives) shall be upon prior notice to Seller and, at Seller's
option, accompanied by an agent of Seller. Requests for entry upon the property
or to contact any employees of Seller shall be initiated only through ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and shall be conducted in strict conformance with
the restrictions in this Agreement and specifically this Section 3 and Section
8(d). If Seller does not permit Buyer to make such entry alone or if Seller does
not make available ▇▇. ▇▇▇▇▇▇▇▇▇▇ or ▇▇. ▇▇▇▇▇▇ to accompany Buyer (and Buyer's
agents and representatives) within one day of request by Buyer, then the Due
Diligence Period shall be extended by the number of days Seller delays Buyer.
If the Closing of the Property does not occur, Buyer shall restore any
damage caused to the Property by Buyer to the same condition as prior to any
entry by Buyer.
All due diligence materials previously submitted to Buyer must be
maintained by Buyer or its attorneys or agents on a confidential basis and
returned to Seller if Buyer terminates this Agreement. Buyer agrees that it will
not use the due diligence materials for any purpose other than to determine
whether to acquire the Property and agrees that it will not make contact with
Seller's tenants unless accompanied by a Seller representative as set forth
above, or otherwise with the permission of Seller. Seller will permit Buyer (and
Buyer's agents and representatives) on a timely basis to enter as many occupied
apartment units as may be selected by Buyer and all vacant apartment units to
walk through and inspect such units. In addition, Buyer agrees that it will
under no circumstances make any offer, or use the Due Diligence materials, to
acquire the interest of any partner(s) of the selling entities or the current
fee owner or its affiliates for a period of two (2) years after the date of this
Contract. Buyer and/or its agents will not, under any circumstances, disclose to
any of Seller's employees that it is contemplating acquisition of the Property
without Seller's written consent prior to closing. Buyer will make no contact
with any of Seller's employees without Seller's express written consent; except
for contacts with Seller's employees allowed under Section 8(d) and except for
contacts within three (3) days of closing in connection with takeover and
closing arrangements. Seller acknowledges that certain of Buyer's personnel have
been contacted for jobs by employees of Seller, with Seller's employees
indicating they had heard rumors that the Property was for sale, and that Buyer
acknowledged Buyer was investigating the purchase of the Property. Seller
accepts such disclosure and agrees all such contacts did not violate this
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Agreement, having occurred before this Agreement was executed. All third party
reports desired by Buyer will be ordered by Buyer at Buyer's expense, and Buyer
agrees that it will supply copies to Seller of each and every report upon
receipt.
(i) During the Due Diligence Period, Buyer may inspect the
Property. At the signing of this Agreement or within two (2) days thereafter,
Seller shall provide or make available at the Property or Buyer's office, those
operational and information items which relate to the Property as follows:
1. Current Rent Roll - (Dated within 30 days of execution)
2. Income and Expense Statements for the last two (2) calendar
years
3. Income and Expense Statement for the current calendar year
to date (as of the end of the month previous to execution)
4. Copy of current ad valorem tax bills and a condensed list
of utility bills for the Property, for the last full calendar year
5. As-built survey,
6. Copies of all third-party contracts (e.g., coin laundry
equipment, termite, landscape, pool maintenance, etc.) in effect or which will
be in effect at or after the closing date
7. Copy of the latest insurance declaration covering the
Property (the same may be within a master policy)
8. Make available the standard form lease and originals or
copies of the first and last page of all tenant leases for the Property in
connection with each apartment unit, with a certification that all other pages
are identical to the standard form lease.
9. A list of all equipment leases and/or any financing
documents for personal property, equipment, etc., affecting the apartment
complex
10. A copy of the financing documents for the current loan to
be assumed, including without limitation the promissory note, mortgage, fixture
filing, assignment of rents and leases, and a statement showing the current
principal balance and the amount of all funds escrowed with the lender or a
third party acting on behalf of lender.
11. All architectural drawings, plans, and specifications, in
Seller's possession.
12. Seller will also make available to Buyer at Seller's
office during due diligence, access to all repair and maintenance records for
the year previous to the date of this Agreement, and other documents in Seller's
possession pertaining to the construction and maintenance of the Property
All of the foregoing will either be at the Property location or submitted to
Buyer by Seller within two (2) days after execution of this Agreement by both
parties.
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(ii) During the Due Diligence Period, Buyer will conduct a
review of the economics and feasibility of acquiring and operating the Property,
including any inspection of all zoning and other government permits and
regulations and all other matters and documents relating to the operation of the
Property, including the items supplied by Seller under Section 3(a) hereof.
(iii) After Seller provides all required documents to the
Buyer, Buyer agrees to accept or reject the Property and all documents prior to
the end of the Due Diligence Period, except that Buyer shall have a period of
thirty (30) days after the end of the Due Diligence Period to perform such
environmental studies of the Property as desired by Buyer, and to make a
determination as to whether the environmental condition of the Property is
acceptable to Buyer (however Buyer may not terminate this Agreement if such
environmental studies do not reflect a material negative difference from the
existing environmental study of Seller submitted to Buyer.) If Buyer does not
cancel this Contract during the Due Diligence Period, as extended for
environmental studies, or does not cancel this Contract during the extended due
diligence period for environmental matters deemed unacceptable to Buyer, Buyer
shall be deemed to have accepted the Property and it will close on the Property
in accordance with this Contract, except for cancellation in accordance with
certain other specific provisions of this Contract, including without limitation
the provisions of Sections 3(b), Section 4(c), Section 7 and Section 8. During
said Due Diligence Period, however, as extended for environmental studies as set
forth above, Buyer shall have the right, in its sole discretion, except as
limited above relative to any difference in the environmental studies, to
terminate this Agreement within the due diligence period, and upon said
termination, Buyer shall receive back its Deposit and neither party shall have
any further liability.
(b) Financing. Buyer agrees to apply for approval of the
assumption by Buyer of Seller's existing first Mortgage held by ▇▇▇▇▇ Fargo
Bank, with the approximate current balance of $3,933,000.00, bearing interest at
the rate of 7.89% and due and payable in full September 11, 2009. Buyer has
submitted financial information and management profile/credentials to Seller.
Seller shall have the right to submit said information to the Lender for
preliminary review. In the event said Lender indicates disapproval of said
submission, Buyer or Seller shall have the right to terminate this Agreement in
which event the Deposit shall be returned to Buyer and neither party shall have
any further liability. Buyer agrees to begin the application process for such
approval in good faith within fifteen (15) days of execution of this Agreement.
Buyer will process said application with due diligence and comply with all
reasonable requests of said holder. Seller agrees to cooperate with Buyer's
application. Buyer shall pay all fees, deposits, and expenses incurred in
obtaining such approval and any transfer or assumption fees payable to said
holder; provided, however, that if any required deposits or nonrefundable fees
exceed $10,000.00, Buyer may terminate this Agreement and receive a refund of
the Deposit. Provided further, Buyer shall not be required to pay any fees,
deposits, or expenses to the lender until after the 15-day due diligence period
has expired. Buyer and Seller agree to execute such documents as may be
reasonably required by said holder to complete said application and to confirm
the assumption by Buyer of said mortgage loan. If said approval is not obtained
by Buyer within thirty (30) days after execution of this Agreement, either party
may terminate this Agreement upon written notice to the other, in which event
the Deposit shall be returned to Buyer and neither party shall have any further
liability to the other.
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SECTION 4. DEED AND TITLE.
(a) Seller shall deliver to Buyer at Closing, a Special or
Limited Warranty Deed ("Deed") in a form reasonably acceptable to Buyer and
Escrow Agent, conveying good and marketable fee simple title to the Real
Property, subject only to the existing first mortgage to be assumed by Buyer,
and to such easements, restrictions of record and title exceptions set forth in
the commitment for title insurance specifically approved by Buyer, and taxes not
delinquent. In addition, Seller shall convey title to the Personal Property to
Buyer, free and clear of all liens and encumbrances (except the existing first
mortgage, and those disclosed and deemed approved during due diligence; e.g.,
equipment leases or personal property financing documents), by the execution and
delivery at Closing of a ▇▇▇▇ of Sale in form and substance reasonably
satisfactory to Buyer, without warranty, except as to Seller's title.
(b) Seller agrees to provide a copy of its most recent
existing title insurance policy or title insurance commitment to Buyer. Buyer
shall then obtain at Buyer's expense an ALTA Form B Title Insurance Commitment
(the "Title Commitment"), within fifteen (15) days of the date of execution of
this Contract by both parties, issued by a title insurance company selected by
Buyer, committing to insure fee simple title to the Property in the amount of
the Purchase Price for such Property in Buyer's name, with all standard
exceptions removed (except for the rights of tenants under unrecorded leases
and/or except for standard exceptions normally not removed pursuant to local
custom with respect to the Real Property), and containing no other exceptions
not specifically approved by Buyer. Buyer will provide a copy of said title
commitment to Seller immediately after same is completed, but no later than 20
days after signing this Agreement. Buyer shall have ten (10) days after receipt
of the Title Commitment to examine the Title Commitment and the existing survey
provided by Seller to Buyer to inform Seller of Buyer's objection to any
exception contained in or title defect revealed by the Title Commitment or the
existing survey. It is understood that Buyer may elect to obtain an updated
survey of the Property. Buyer shall have the right to object to any new matters
shown on the updated survey, but Buyer shall have no right to object if the
updated survey does not reveal any objectionable exceptions. In no event shall
Buyer have the right to object to any matters on the updated survey after the
expiration of thirty (30) days from the execution of this Agreement.
(c) If Buyer's examination of the Title Commitment or the
survey reveals that the Title Commitment for the Real Property contains
objectionable exceptions or that the title to the Real Property is defective and
thereafter, the issuing title insurance company refuses to delete the
objectionable exceptions or the defects cannot be cured by Seller within a
reasonable period of time after written notice by Buyer, specifically pointing
out the objection/defects, then Buyer may elect to terminate this Agreement upon
written notice to Seller and receive a refund of the Deposit.
(d) Seller will pay for preparation of the Deed for the Real
Property, for State and local transfer taxes affecting the Real Property, and
for any sales or use taxes affecting the Personal Property.
(e) Buyer will pay for any updated survey of the Property for
the title insurance commitment and for all title insurance premiums, and for the
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recording of the Deed for the Property and the recording of any assumption
document.
(f) Seller and Buyer will each pay their own attorney's and
other professional fees and expenses.
(g) At Closing, Seller shall execute and deliver to Buyer a
mechanics and materialmen's lien and owner's affidavit and indemnity acceptable
to Buyer's title insurance company, evidence of the authority of the person or
persons executing the documents on behalf of Seller, acceptable to Buyer's title
insurance company, and a "non-foreign" certificate as required by Section 1445
of the Internal Revenue Code, and (if requested by Buyer) letters to all tenants
of the Property advising them of the change in ownership and directing them to
pay all rents to Buyer or Buyer's designee.
SECTION 5. PRORATIONS AND ALLOCATIONS.
(a) Collected rents, interest on the first mortgage, laundry
income, service contracts, equipment leases or other personal property
financing, utility deposits, insurance and other expenses whether or not a lien,
assessed or to be assessed for the year in which the transaction is consummated
will be prorated as to the Property as of the date of the Closing. All utility
bills relating to the period prior to the Closing Date shall be paid by Seller.
Seller shall terminate all utility relationships with respect to the Property as
of the Closing Date. Buyer shall pay Seller cash at closing for all escrows held
by the existing first mortgage holder or by an entity acting on behalf of that
lender at Closing. With respect to any delinquent or uncollected rents at the
time of Closing, either Buyer or Seller may collect or attempt to collect such
rents. If collected by Buyer, Buyer shall remit to Seller (net of expenses of
collection) Seller's prorated share as if such rents were collected as of
Closing. If collected by Seller, Seller shall remit to Buyer (net of expenses of
collection) Buyer's prorated share as if such rents were collected as of
Closing. Seller shall have no right to collect or attempt to collect such rents
after 90 days after Closing.
(b) Security deposits held by Seller or paid by any tenants or
lessees at the Property will be transferred to Buyer in full at Closing,
including any interest earned thereon and payable to the tenant or lessee under
State law.
(c) Real Estate taxes and personal property taxes and special
assessments shall be prorated based on the custom in Louisville, Kentucky.
(d) Seller will assign to Buyer all of Seller's right to the
proceeds of a insurance policies relating to fire losses at the Property,
whether such amount has yet been determined. If Seller has received any such
proceeds prior to Closing, the amount received by Seller shall be credited
against and applied to the cash portion of the Purchase Price.
SECTION 6. CONDEMNATION OR CASUALTY. Seller agrees to give Purchaser
prompt written notice of any fire or other casualty occurring to all or any
portion of the improvements at the Real Property and/or Personalty between the
date hereof and the date of closing. If prior to the closing, there shall occur:
(i) damage to the improvements at the Property caused by fire
or other casualty which would cost 5% of the Purchase Price of the Property or
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more to repair based on the estimate of a reputable third party contractor
chosen by Seller; or
(ii) the taking or condemnation of all or any portion of the
Real Property and/or the improvements as aforesaid as would materially interfere
with the use thereof; then, if any of such events set forth in (i) or (ii) above
occurs, Buyer or Seller, at its option, may terminate its obligations under this
Agreement by written notice given to the other within seven (7) days after Buyer
has received the notice referred to above or at the closing, whichever is
earlier. If Buyer or Seller does not elect to terminate its obligations as
aforesaid, the closing shall take place as provided herein without an abatement
of the purchase price (except that Buyer shall be allowed a credit for any
deductible under Seller's insurance) and there shall be assigned to the Buyer at
closing, all interest of the Seller in and to any insurance proceeds or
condemnation awards which may be payable to Seller on account of such
occurrence, or if Seller has received any such proceeds or awards, the amount
received by Seller shall be credited against and applied to the cash portion of
the Purchase Price.
If, prior to the closing, there shall occur:
(i) damage to the Property caused by fire or other casualty
which would cost less than 5% of the Purchase Price of the Property based on the
estimate of a reputable third party contractor chosen by Seller to which Buyer
has no reasonable objection; or
(ii) the taking or condemnation of all or any portion of the
said Real Property and/or improvements as aforesaid which is not material to the
use, thereof; then, if any of such events set forth in (i) or (ii) above occurs,
Buyer shall have no right to terminate its obligations under this Agreement, but
there shall be assigned to Buyer at closing all interest of Seller in and to any
insurance proceeds or condemnation awards which may be payable to Seller on
account of any such occurrence, and in addition, Buyer shall be allowed a credit
for any deductible under Seller's insurance policy, or if Seller has received
any such proceeds or awards, the amount received by Seller shall be credited
against and applied to the cash portion of the Purchase Price.
Seller shall be responsible for maintaining fire and extended
coverage insurance prior to closing as is currently in place.
SECTION 7. ADDITIONAL CONDITIONS. The following shall be conditions
precedent to Buyer's obligations hereunder, unless specifically waived in whole
or in part in writing by Buyer:
(a) Litigation. There being no existing or pending claims,
lawsuits, or governmental proceedings, or appeals, which challenge Seller's
title to the Property.
(b) Title Insurance Policy. Title to the Property at Closing
being marketable or insurable (Buyer agrees to request that the title company
issuing the title commitment list any questions of marketability in the title
commitment) and/or in accordance with the provisions of Section 4 above, free
and clear of all liens and encumbrances, except the existing first mortgage. In
addition, Buyer receiving assurances at Closing from the title insurance company
issuing the Title Commitment, that after Closing, Buyer will be issued at
Buyer's expense, an ALTA Form B Title Insurance Policy, with all standard
exceptions removed, except as set forth in Section 4 above, and all other
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exceptions validly objected to by Buyer deleted from such policy, insuring fee
simple marketable title to the Property or in accordance with Section 4 above,
in the amount of the Purchase Price, in Buyer's name, free and clear of all
liens and encumbrances not otherwise specifically agreed to by Buyer prior to
Closing.
(c) Personal Property. Seller conveying title to the Personal
Property to Buyer at Closing free and clear of all liens and encumbrances
(except for the existing first mortgage and for equipment leases and personal
property financing disclosed during due diligence) by a ▇▇▇▇ of Sale without
warranties except as to title in form and substance reasonably satisfactory to
Buyer.
(d) Compliance With Representations and Warranties. Seller
will be in substantial compliance with all other representations and warranties
made herein in Section 8, or elsewhere in this Agreement, at Closing to the
reasonable satisfaction of Buyer.
(e) Condition. The condition of the Personal Property and Real
Property shall be in substantially the same condition at closing as they were on
the date of execution hereof.
(f) Insurance Amount. Buyer confirming that the amount of
insurance proceeds payable with respect to existing damage to the Property is
acceptable to Buyer during Buyer's due diligence period set forth in Section
3(a).
(g) Property Insurance. Buyer being able to obtain and have in
place at closing at an annual premium cost less than $40,000.00 casualty and
liability insurance with such coverage as is deemed appropriate by Buyer. If
requested by Buyer and approved by Seller's insurance company, Seller will
assign to Buyer its insurance policy(ies) affecting the Property, and Seller
grants to Buyer the right to seek such an assignment. Without limiting the
effect of other conditions set forth in this Agreement, if this condition is not
satisfied by closing, Seller agrees to allow a cash credit to Buyer at Closing
for any excess premiums over $40,000.00 for the first year following Closing,
provided Buyer's coverages are the same as Sellers. In addition, Seller shall
allow a credit at closing for $5,000.00 for anticipated insurance increases.
SECTION 8. SELLER'S WARRANTIES. The following representations
and warranties of Seller shall survive the Closing for a period of six (6)
months and shall be reaffirmed as true and accurate by Seller at Closing.
Wherever any of the following are based on Seller's knowledge and/or belief,
such knowledge and/or belief shall be limited to knowledge and/or belief of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and/or ▇▇▇▇ ▇▇▇▇▇▇.
(a) The legal description of the Property contained in the
recitals to this Agreement is substantially correct and will be confirmed by any
survey obtained by Buyer and/or confirmed by the title company.
(b) Seller has not received written notification that the
Property is not in compliance with any federal, state, county and municipal
laws, ordinances and regulations, including but not limited to all federal,
state, county and municipal environmental laws and regulations, applicable to or
affecting the Property, and to Seller's best knowledge and belief, the Property
is in compliance with all federal, state, county and municipal laws, ordinances
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and regulations, including but not limited to all federal, state, county and
municipal environmental laws and regulations, applicable to or affecting the
Property, with Seller to have the right to cure any misrepresentation before
Closing to the reasonable satisfaction of Buyer, or to escrow funds to complete
such cure after closing not to exceed $25,000.00. If the cost exceeds $25,000.00
and if Seller elects not to cure same, Buyer may terminate this Agreement and
receive back its Deposit.
(c) Seller will convey fee simple, marketable or insurable
title to the Property to Buyer at Closing and will convey title to the Personal
Property to Buyer at Closing by ▇▇▇▇ of Sale, in form and substance reasonably
satisfactory to Buyer, free and clear of all liens and encumbrances, except as
provided in this Agreement.
(d) Seller will not interfere with Buyer's opportunity to hire
Seller's on-site employees who work at the Property, but Buyer will have no
obligation to hire any of those individuals. Buyer will make no efforts to hire
such employees until after all contingencies have been removed and no earlier
than 10 days before closing. Buyer will make no efforts to hire any of Seller's
off-site employees whatsoever.
(e) Seller shall be responsible for (and Buyer shall not
assume the obligation of) all employee wages, benefits (including payments for
accrued bonuses, vacation or sick pay, unemployment compensation, employment
taxes, medical claims or similar payments), contributions under any benefit
programs or agreements, severance pay obligations and other related employee
costs arising as a result of any events, acts (or failures to act) prior to the
Closing Date with respect to the Property at which such persons are employed,
whether or not disclosed on the schedules to this Agreement.
(f) Seller retains all liability and responsibility for
fulfilling all federal and/or state COBRA and continuation of group health
insurance coverage requirements (pursuant to Section 4980B of the Code, sections
601-608 of ERISA, and any applicable state laws) with respect to Seller's
current or former employees (and their dependents). Buyer does not hereby and
will not at the Closing of the Property assume any obligation to provide medical
insurance coverage to persons that it employs because it acquires the Property.
(g) The physical condition of the Personal Property and Real
Property shall be maintained in substantially the same condition as they were at
the expiration of Buyer's due diligence period through the Closing Date.
(h) Seller agrees to continue its standard leasing practices
and advertising through the Closing Date, including its customary rent schedule
for new tenants, customary credit and application review and procedures,
customary security deposits, and customary concessions, if any.
(i) Seller represents and warrants that there are no
management or similar agreements that would in any way bind Buyer after Closing.
(j) Seller represents and warrants that, except as disclosed
on Exhibit C, all occupied apartment units are in rentable condition with
working appliances and free of material defects. All vacant apartments as of
execution or as of closing shall be in "as is" condition.
(k) Seller has full right and power to enter into this
Agreement and, when executed and delivered, all parties having any interest in
the Property shall be lawfully bound by this Agreement. The execution and
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delivery of this Agreement and the consummation of the transactions contemplated
by this Agreement will not violate or result in a breach by Seller of any
agreement or instrument to which Seller is a party. Seller is a limited
liability company in good standing in the state in which it is formed and in
good standing and duly qualified to transact business in the Commonwealth of
Kentucky.
(l) There are no actions, suits or proceedings, including
without limitation eminent domain or similar condemnation proceedings, pending
or, to the best knowledge of Seller, threatened by or before any judicial body
or governmental agency or authority against or affecting any portion of the
Property.
(m) There are no outstanding contracts to sell or options to
purchase with respect to the Property.
SECTION 9. NON-PERFORMANCE.
(a) If Seller fails to deliver the Deed, perform its
obligations hereunder, or meet any of the conditions hereof, Buyer, at Buyer's
sole option, may (i) terminate this Agreement whereupon the ▇▇▇▇▇▇▇ Money shall
be returned to Buyer on demand or (ii) Buyer may bring an action for specific
performance, and if Buyer prevails, all reasonable costs and expenses of any
such action shall be paid by Seller as a reduction of the Purchase Price, or
(iii) bring an action for monetary damages. The foregoing shall be the sole and
exclusive remedies of Buyer. However, if Buyer elects to bring an action for
monetary damages, they shall be specifically limited, if proven, to an amount
equal to the ▇▇▇▇▇▇▇ Money on deposit as set forth hereinabove. Any damages
resulting from a breach of any warranty or representation either before or after
Closing shall be subject to the same limitation and aggregated with any damages
for breach of this Agreement as set forth above. The foregoing sentence shall
not be applicable with respect to fraud, or any material intentional
misrepresentation.
(b) If Buyer defaults at any time, Seller and Buyer agree that
it will be extremely difficult or impractical to fix Seller's actual damages.
Therefore, in such an event, the entire ▇▇▇▇▇▇▇ Money shall be delivered to
Seller as liquidated damages for loss of a bargain and not as a penalty. Buyer
will then be released from all liability to Seller related to this Agreement,
such liquidated damages being Seller's sole remedy.
SECTION 10. BROKERS, AGENTS AND CONSULTANTS. Seller represents and
warrants to Buyer that no broker, consultant or agent is due a commission or fee
from the proceeds of the Closing, claiming by, through or under Seller except as
stated herein, and Seller hereby agrees to indemnify and hold harmless Buyer
from the claims of any agent, consultant or broker for the payment of any such
commission or commissions.
Buyer represents and warrants to Seller that no broker, consultant or
agent is due a commission or fee from the proceeds of the Closing claiming by,
through or under Buyer except the ▇▇▇▇▇▇▇▇▇▇ Investments, whose commission shall
be paid by Seller, and hereby agrees to indemnify and hold harmless Seller and
the Property from the claims of any other agent, consultant or broker for the
payment of any commission, finder's fee or other compensation.
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SECTION 11. LEASES/ASSIGNMENT OF INTANGIBLES.
(a) Seller agrees that prior to the Closing it will not enter
into any commercial leases or service agreements without the prior written
consent of Buyer, unless they may be cancelled at Closing.
(b) Seller shall assign the existing tenant leases to Buyer at
Closing along with all service contracts and other agreements affecting the
Property. Buyer shall execute an assumption agreement or other agreements with
respect to all tenant leases and service contracts or other agreements from and
after the date of closing.
(c) On the Closing Date, Seller shall assign to Buyer all of
its right, title and interest in and to all of the Property not conveyed by the
Special or Limited Warranty Deed, including without limitation: (a) all
licenses, certificates of occupancy and permits then held by the Seller for the
Property which may be lawfully assigned and which may be necessary or desirable,
in Buyer's opinion, to operate the Property; (b) any warranties and guaranties
from manufacturers, suppliers and installers pertaining to the Property
including roof warranties and warranties covering appliances within the Property
apartment units; (c) the name "Countrybrook" and all variations thereof; (d) the
telephone number(s) for all of Seller's telephones installed at the Property;
(e) all architectural drawings, plans and specifications and other documents in
Seller's possession pertaining to the construction of the Property; (f) all
business records, books of account, customer lists, correspondence, and files
relating to any tenancy or occupancy of the real property and improvements (on
computer disk if requested by Buyer); (g) all signs on and relating to
Countrybrook Apartments; and all other intangible property at the Property. The
foregoing shall not include any computer equipment or software whatsoever.
SECTION 12. INSURANCE. Seller will cancel its insurance coverage on the
Property effective at Closing of the Property, and Buyer will place new
insurance coverage on the Property effective on the same date.
SECTION 13. ASSIGNMENT. Buyer shall not have the right to assign this
Agreement, in whole or in part, to any party with whom it is not affiliated
without the express written consent of Seller. Buyer shall have the right to
assign this Agreement to any affiliate of Buyer without such consent. Upon any
such assignment, the assignee shall assume the obligations of Buyer. Seller's
consent, if required, pursuant to this section shall be in its sole discretion
and shall include approval of all proposed assignment documents. In accordance
with the foregoing, the Buyer shall have the right to assign to an entity with
which the Buyer is affiliated provided the Buyer herein remains liable for
performance of this Contract.
SECTION 14. ENTIRE AGREEMENT. All prior understandings and agreements
of the parties are merged herein, and this Agreement reflects the entire
understanding of the parties. This Agreement may not be changed or terminated
orally.
SECTION 15. SUCCESSORS AND ASSIGNS. The terms of this Agreement shall
be binding upon and inure to the benefit of the parties hereto, their respective
legal representatives, successors and assigns.
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SECTION 16. INDEMNIFICATIONS.
(a) SELLERS INDEMNITY. Seller shall indemnify, defend and hold
Buyer harmless from any claim, demand, loss, liability, damage, or expense
(including reasonable attorneys' fees) in connection with third-party claims for
injury or damage to personal property in connection with the ownership or
operation of the Properties prior to Closing. These indemnification obligations
of Seller shall be repeated at and shall survive the Closing.
(b) BUYERS INDEMNITY. Buyer shall indemnify, defend and hold
Seller harmless from any claim, demand, loss, liability, damage, or expense
(including reasonable attorneys' fees), due to Buyers operation of the Property
from and after Closing. The indemnification obligations of Buyer shall be
repeated at and shall survive the Closing.
SECTION 17. NOTICES. All notices required or permitted hereby shall be
in writing and delivered either in person or sent electronically, and by
national overnight express carrier. Notices shall be deemed to have been given
when sent as follows:
Buyer: Research Properties, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ #▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Copy to: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.S.C.
The ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Seller: Realmark - Countrybrook, LLC
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Amigone, Sanchez, Mattrey & ▇▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
SECTION 18. CONSTRUCTION. Time shall be construed to be of the essence.
SECTION 19. GOVERNING LAW. This Agreement will be governed by and
construed according to Kentucky law.
SECTION 20. BUYER'S LIABILITY. Neither Buyer nor any assignee or
designee of Buyer (nor any principal, shareholder, employee, member, manager,
director or officer of Buyer or any assignee of Buyer) shall be personally or
individually liable with respect to any obligations under this Agreement, all
such personal liability and individual liability, if any, being hereby waived by
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Seller on its behalf and on behalf of all parties claiming by or through Seller.
SECTION 21. DISCLOSURE. Buyer discloses to Seller that ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇▇, a principal of Buyer, is licensed real estate broker acting only
as an officer of Buyer and is buying for his company's own account.
SECTION 22. ESCROW. The Escrow Agent hereby acknowledges receipt of the
▇▇▇▇▇▇▇ Money and agrees to hold the same in escrow until the closing or sooner
termination of this Agreement and shall pay over and apply the proceeds thereof
in accordance with the terms of this Agreement. If, for any reason, the closing
does not occur and either party makes a written demand upon the Escrow Agent for
payment of the ▇▇▇▇▇▇▇ Money, the Escrow Agent shall give written notice to the
other party of such demand. If the Escrow Agent does not receive a written
objection from the other party to the proposed payment within five (5) business
days after the giving of such notice, the Escrow Agent is hereby authorized to
make such payment. If the Escrow Agent does receive such written objection
within such five (5) day period, or if for any reason the Escrow Agent in good
faith shall elect not to make such payment, the Escrow Agent shall continue to
hold the ▇▇▇▇▇▇▇ Money until otherwise directed by written instructions from the
parties to this Agreement or until a final judgment (beyond any applicable
appeal period) by a Court of competent jurisdiction is rendered disposing of
such ▇▇▇▇▇▇▇ Money.
The Escrow Agent shall be liable as a depository only and its
duties hereunder are limited to the safekeeping of the ▇▇▇▇▇▇▇ Money and the
delivery of same in accordance with the terms of this Agreement. The Escrow
Agent will not be liable for any act or omission done in good faith, or for any
claim, demand, loss or damage made or suffered by any party to this Agreement,
excepting such as may arise through or be caused by the Escrow Agent's
negligence or willful misconduct.
IN WITNESS WHEREOF, this Agreement has been executed by the parties, or
by the duly authorized officer of the parties, on the day and year shown below.
BUYER:
Executed March 12, 2002
RESEARCH PROPERTIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
----------------------------
SELLER:
Executed March 11, 2002
REALMARK- COUNTRYBROOK, LLC
Realmark-Countrybrook Management, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
RECEIPT OF ESCROW AGENT
The undersigned hereby acknowledges receipt of the ▇▇▇▇▇▇▇ Money provided for
herein, and that the same is being held as Escrow Agent pursuant to the terms of
the above Purchase Agreement.
By: ___________________________
As Escrow Agent
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