The Association of Owners of The Five Hundred and One Building Inc.
Board of Directors Meeting Minutes
January 27, 2017
The Association of Owners of The Five Hundred and One Building Inc. (“Association”) met on January 27, 2017, 3:30 P.M. in the 7th Floor Conference Room at the 501 Union Street Building, Nashville, Tennessee. The purpose of the meeting was to review and discuss the letter of intent received from the Ardent Companies to purchase the 501 Union Street Building.
I. ESTABLISHMENT OF QUORM
Those present, establishing a quorum, were Barbara, Perutelli representing Schulman, Leroy and Bennett and Top Floor Associates, Hope Jackson representing GNRC, Wolfgang Sauermann, Angela Evans, and Wayne Miller representing TOSS. Also present representing Colliers Real Estate Services was Richard Fulton.
II. MEETING COMMENCEMENT
Wolfgang Sauermann, Secretary, introduced the meeting and asked Richard Fulton to review the purchase offer submitted by the Ardent Companies and to discuss the Purchaser’s ability to consummate the proposed purchase transaction. Mr. Fulton stated that the Ardent Companies was financially very strong and had the reputation for closing on the purchases of other transactions in the past. He felt that the offer they presented was a good offer and had a short time frame to the closing of the sale. A copy of the offer is attached as Exhibit “A” (“LOI”) and the terms of the proposal are summarized as follows:
a) Purchase Price : $9,000,000.00
b) Initial Earnest Money: $100,000.00
c) Due Diligence Period: Purchaser has 60 Days after execution of the purchase and sale contract to conduct inspections and a due diligence investigation of the Property. Purchaser to pay cost for any inspections, surveys, appraisals, environmental reports and any other items as may be required by Purchaser to assess the Property. Purchaser to have an additional 30 days to complete 3rd party reports. Purchaser may terminate the contract for any reason within the 90 day Due Diligence Period with the Earnest Money being fully refundable.
d) Contingency Removal. Upon expiration of 90 day Due Diligence Period Purchaser has the option of removing the all contract contingencies and increases the Earnest Money to $200,000.00. Thereafter all Earnest Money is non-refundable but applicable to the Purchase Price.
e) Closing: Within 30 days of expiration date of Due Diligence period.
f) Extensions: Purchaser may extend closing date by one 30 day period upon increasing the non-refundable Earnest Money Deposit to a total $200,000.00.
g) Purchaser’s Exclusivity: During Purchaser’s Due Diligence Period, Seller may not enter into any “Competing Transactions” or conduct discussions about the sale of the Property with other parties or Seller is subject to pay Purchaser 2% of the Property Purchase Price as liquidated damages for Due Diligence expenses incurred by Purchaser.
Prior to the meeting, the Board received comments and proposed LOI addendum submitted by Ernie Williams who is the Association’s corporate counsel in this matter. The Board reviewed and discussed Mr. William’s comments and proposed addendum which are attached as Exhibit “B.”
After further discussion, the Board unanimously agreed that the sale price and basic terms of Ardent Company’s LOI proposal were acceptable with the following clarifications and modifications.
a) Purchase and Sale Contract Completion: Purchaser to prepare and submit final purchase and sale contract to Seller on or before January 10, 2017.
b) Exclusivity Requirement: Purchaser’s exclusivity requirement with Seller’s liquidated damages to be removed from contract. Standards of practice for buyers and sellers as established by the National Association of Realtors and Tennessee Association of Realtors for real estate transactions under contract shall apply.
c) During Purchaser’s 90 day Due Diligence Period Purchaser to submit copies of all inspections, surveys, environmental, structural and any other work to Seller for Seller’s review. In the event Purchaser terminated contract for any reason then Seller shall be entitled to the ownership of any such items prepared by Purchaser at no cost to Seller.
The Board instructed Mr. Sauermann to work with Ernie Williams and Collier’s Representatives Richard Fulton and Vickie Saito in finalizing the Association’s LOI counter proposal attached as Exhibit “C,” to be submitted to the Ardent Companies on 1/30/17 with the Board’s prior approval.
Upon securing the final LOI with the Ardent Companies, the Board will send copies of all documents to the Association owners.
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III. ADJOURNMENT
There being no further business the meeting was adjourned.
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President
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Secretary
Date:______
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EXHIBIT “A”
LOI OFFER TO PURCHASE 501 UNION STREET BUILDING
1/26/17
EXHIBIT “B”
LOI COMMENTS & ADDENDUM FROM ERNIE WILLIAMS
1/27/17
ADDENDUM TO LOI
1. Initial Earnest Money Deposit with American Realty Title, LLC as agent for an on behalf of Old Republic National Title Insurance Company pursuant to Escrow Agreement to be provided within 2 days of execution of LOI.
2. Initial PSA to be provided by Counsel for Seller, Ernest B. Williams IV, PLLC within 7 business days.
3. Title Commitment to be provided by Seller within __ days following PSA.
4. Seller shall pay for Title Commitment and Standard Owners Title Policy with Lender Simultaneous Issue not to exceed Purchase Price.. Purchaser shall pay for any Title Policy endorsements.
5. Purchaser shall pay Transfer Tax.
6. Purchaser pays for all inspections.
Who pays for:
a. Survey (ALTA surveys can be expensive?
b. Environmental?
c. Any zoning and Planning Approval?
d. Engineering, Inspections and Soil Reports?
e. What is Purchaser doing about tenants including retail?
f. Access to premises and notice?
EXHIBIT “C”
EXECUTED LETTER OF INTENT FOR SALE OF 501 UNION BUILDING
BUYER: ARDENT COMPANIES – SELLER: 501 UNION ST. ASSOC.
2/3/17