PURCHASE AND SALE AGREEMENT
between
JEWISH COMMUNITY HOUSING CORPORATION
A New Jersey nonprofit corporation
“Seller”
and
JOINED DEVELOPMENT GROUP LLC,
a New York limited liability company
“Buyer”
July__, 2017
Project Name: Federation Apartments
510 E. 27th Street
Paterson, NJ 07514
TABLE OF CONTENTS
article 1 PURCHASE AND SALE 4
1.1 Purchase and Sale 4
article 2 ESCROW 5
2.1 Escrow 5
article 3 PURCHASE PRICE 5
3.1 Purchase Price 5
3.2 Deposit 6
article 4 INSPECTION OF THE PROPERTY AND APPROVAL PERIOD 6
4.1 Buyer’s Due Diligence 6
4.2 Conditions Precedent to Closing 9
4.3 Seller’s Condition Precedent to Closing 10
4.4 Tenant Income Questionnaires 10
article 5 REPRESENTATIONS AND WARRANTIES/ADDITIONAL BUYER COVENANTS 11
5.1 Buyer’s Representations and Warranties 11
5.2 Seller’s Representations and Warranties….. 11
5.3 Additional Buyer Covenants……………………………………………………...
article 6 CLOSING 14
6.1 Place and Date 14
6.2 Possession 15
6.3 Prorations 15
6.4 Closing Costs 16
6.5 Seller’s Deliveries at Closing 16
6.6 Buyer’s Deliveries at Closing 18
6.7 Documents to be Executed by Seller and Buyer 18
6.8 Intentionally Omitted 18
6.9 Risk of Loss 18
article 7 DEFAULT 19
7.1 Liquidated Damages — Deposit 19
7.2 Buyer’s Remedies 19
article 8 OPERATING AND OTHER COVENANTS 20
8.1 Maintenance of Property 20
8.2 Payment of Costs. etc 20
8.3 Vacated Unit ………………………………………………………………… 20
8.4 Leasing, Contracts 20
8.5 Leasing Reports 20
8.6 Insurance 20
8.7 Litigation…………………………………………………………………………21
8.8 Seller Cooperation 21
8.9 No Modification to Title 21
8.10 1031 Exchanges 21
8.11 No Marketing 21
8.12 Termination of Certain Obligations 21
8.13 Compliance With Property Indebtedness Documents 21
8.14 Compliance Other Requirements 22
8.15 Environmental and Other Notices……………………………………………….22
8.16 Bulk Sales………………………………………………………………………..22
8.17 Required Certificates…………………………………………………………….22
article 9 MISCELLANEOUS 22
9.1 Notices 22
9.2 Real Estate Commissions 23
9.3 Entire Agreement 23
9.4 Amendment 23
9.5 Headings 24
9.6 Time of Essence. 24
9.7 Governing Law 24
9.8 Assignment 24
9.9 Severability 24
9.10 Facsimile or Scan Deemed Original 24
9.11 Attorneys’ Fees 24
9.12 Multiple Counterparts 24
9.13 No Recordation 24
9.14 Survival 20
Exhibit A – Land
Exhibit B – Schedule of Personal Property
Exhibit C – Due Diligence List
Exhibit D – Tenant Notice
Exhibit E – Foreign Person Certification
ii
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is effective July__, 2017 (the “Effective Date”), by and between JEWISH COMMUNITY HOUSING CORPORATION, a New Jersey nonprofit corporation (“Seller”) and JOINED DEVELOPMENT GROUP LLC, a New York limited liability company (“Buyer”).
In consideration of the mutual covenants and representations herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer agree as follows:
article 1PURCHASE AND SALE
1.1 Purchase and Sale
. Subject to the terms and conditions of this Agreement, Seller hereby agrees to sell and convey to Buyer, and Buyer hereby agrees to purchase from Seller (the “Sale”), the property described in this Section1.1 (the “Property”).
(a) Land. All that certain parcel(s) or piece(s) of ground in the City of Paterson, County of Passaic, State of New Jersey, as described on Exhibit A attached hereto (the “Land”) with an address of 510 E. 27th Street, Paterson, NJ 07514, together with all easements and other rights appurtenant to such Land, all on-site parking and other parking rights appurtenant to such Land, and all mineral or similar rights, riparian rights and water rights appurtenant to such Land (the “Land”).
(b) Improvements. All buildings and other improvements located on the Land including, but not limited to the142 apartment units known as the “FEDERATION APARTMENTS” (the “Improvements”).
(c) Leases and Contracts. All leases (the “Leases”) of space in the Property and Seller’s interest in all refundable security deposits or other refundable tenant deposits of any kind and all prepaid rent, if any, the existing United States Department of Housing and Urban Development Section 8 Housing Assistance Payments Contract for the Property (the “HAP Contract”), the agreements and documents evidencing the assistance provided for the Property under the United States Department of Housing and Urban Development IRP Section 236 Program (collectively, the “236 Agreement”), any City of Paterson and/or Paterson Housing Authority rental and/or housing assistance and/or subsidy agreements (collectively, the “Local Housing Assistance Contract”), and to the extent assignable, the Assumed Contracts (as hereinafter defined).
(d) Fixtures and Personal Property. All appliances, fixtures, equipment, machinery, furniture, carpet, drapes, supplies, manuals, books and records and other personal property, if any, owned by Seller and located on or about the Land and the Improvements or used in the ownership, use, leasing, maintenance or operation thereof (the “Personal Property”).
(e) Intangible Property. To the extent assignable, all intangible property (the “Intangible Property”), in which Seller has a transferable right and pertaining to the Land, the Improvements or the Personal Property. For the purposes of this Agreement, Intangible Property shall include but not be limited to Seller’s right, if any, but without any warranty with respect thereto, to use of the name “FEDERATION APARTMENTS ” in connection with the Property, and any other trademarks, trade names or other intangible personal property or rights associated with the Property, or used in the ownership, use, leasing, maintenance or operation thereof, and in which Seller has a transferable right including, without limitation, guarantees or warranties from third parties relating to the construction, operation and/or use of the Property, original governmental permits, approvals or licenses granted to or in the possession of Seller with respect to the ownership, construction, use, occupancy and operation of the Property, surveys, environmental reports and documentation, title reports, plans, specifications, rent rolls, tenant files, personal files, real estate tax and other bills and invoices, tax returns, monthly and other financial and operating statements, accounting books, records and files, and other information, and any telephone numbers associated with onsite management and leasing operations, the parties acknowledge that the transfer of telephone number are subject to telephone service provider approval.
(f) Reserves. All funds held in any replacement reserve accounts, residual receipts accounts and other reserves and escrows maintained in connection with or for the benefit of the Property (the “Transferred Reserve Account Funds”).
article 2ESCROW
2.1 Escrow
. Upon the execution of this Agreement by Buyer and Seller, in writing, this Agreement shall constitute the joint escrow instructions of Buyer and Seller to Land Track Title Agency, LLC (the “Title Company” or “Escrow Holder”) to open an escrow, if not already opened, (the “Escrow”) for the consummation of the sale of the Property to Buyer pursuant to the terms of this Agreement. Upon Title Company’s receipt of the Deposit (as hereinafter defined), Title Company is authorized to act in accordance with the terms of this Agreement. Prior to the Closing Date, Seller and Buyer each may give appropriate written escrow instructions, consistent with this Agreement, to the Title Company for the Closing in accordance with this Agreement and upon giving such instructions such party need not be physically present at the Closing.
ARTICLE 3
article 3PURCHASE PRICE
3.1 Purchase Price
. The total purchase price (the “Purchase Price”) for the Property shall be the sum of Nine Million Dollars no/100 Dollars ($9,000,000.00). Such Purchase Price shall include the Deposit, which, together with the remainder of the Purchase Price to be paid by Buyer, in immediately available funds, to the Title Company on the Closing Date, shall then be paid on such Closing Date by the Title Company to the Seller through the Escrow, in immediately available funds, all as adjusted as provided in this Agreement,.
3.2 Deposit
. Within five (5)business days after the full execution of this Agreement and the opening of Escrow, Buyer shall deliver to the Title Company cash in the amount of One Hundred Thousand Dollars ($100,000) (the “Initial Deposit”). The Initial Deposit and any Extension Deposits (as hereinafter defined) are defined herein, collectively, as the “Deposit” shall be applicable to the purchase price. The Title Company shall deposit such portion of the Deposit as it is holding in an non-interest bearing account as directed by Buyer. If this Agreement terminates at any time, except as a result of default by Buyer hereunder, including Seller default, failure of any conditions precedent or Buyer’s election to terminate this Agreement pursuant to the provisions hereof, the Title Company shall immediately return the Deposit to Buyer. If this Agreement terminates at any time as a result of default by Buyer hereunder, the Title Company shall immediately return the Deposit to the Seller.
article 4
INSPECTION OF THE PROPERTY AND APPROVAL PERIOD
4.1 Buyer’s Due Diligence
. Buyer shall have sixty(60) business days, commencing on the later of the date of, as the case may be, the delivery to Buyer, its agents, contractors, architects, engineers, consultants, surveyors, attorneys, agents, designees and employees (collectively, the “Buyer Inspectors”) or the making available to such to Buyer Inspectors for their examination, investigation, inspection and review, of all Due Diligence Items (as defined in Section 4.1.2) such sixty (60) business day period being hereinafter referred to as the “Approval Period”) for such Buyer Inspectors to, from time to time, during such Approval Period and thereafter, enter into the Property to make such inspections, examinations and investigations as Buyer deems necessary and to review the Due Diligence Items and approve all aspects of the Property. If Buyer is not satisfied in its sole and absolute discretion with such inspections, examinations, investigations, and review, Buyer may terminate this Agreement by giving written notice (the “Termination Notice”) thereof to Seller on or before the expiration of the Approval Period (subject, however, to the provisions of Section 4.1.1(a)), in which event the Deposit shall be returned to Buyer, this Agreement shall become null and void and the Parties hereto shall have no further obligations to each other hereunder, except for those, which, by the express terms of this Agreement, survive such termination. If Buyer is satisfied with such inspections, examinations, investigations, and review, it shall notify Seller, within ten (10) business days after the expiration of the Approval Period, of the list of the Contracts (defined below) that Buyer is willing to assume at Closing (the “Assumed Contracts”). Failure by Buyer to give notice of such list of Assumed Contracts will result in Buyer’s waiver of its right to assume such Contracts at Closing. In the event the Closing does not occur or this Agreement is terminated, Buyer shall promptly return to Seller all copies of material Buyer has received pursuant to Section 4.1.2 below.
4.1.1 Inspection
. Buyer shall have the right to commence Buyer’s physical inspection of the Property immediately after the Effective Date and such right shall continue until Closing, upon twenty-four (24)hours prior notice to Seller. Buyer’s physical inspection of the Property shall be conducted during normal business hours at times mutually acceptable to Buyer and Seller. Inspection of any occupied interior units shall require two (2)days written notice to Seller. No invasive testing or boring shall be done without the prior notification of Seller and Seller’s consent, which shall not be unreasonably withheld, delayed or conditioned.
(a) Seller shall provide Buyer with adequate opportunity to make such surveys, test, studies and inspections of the Property as Buyer has, in Buyer’s discretion, deemed necessary or advisable as a condition precedent to Buyer’s purchase of the Property and to determine the physical, environmental and land use characteristics of the Property and its suitability for Buyer’s intended use. In addition to any surveys, tests, studies and inspections of the Property as Buyer shall require, Buyer’s inspection shall include, without limitation, a complete and satisfactory physical review of the Property and its structural, plumbing and electrical systems, and other physical components by Buyer Inspectors. In such regard, notwithstanding anything elsewhere in this Agreement (and, in particular, Section 4.1) to the contrary, if Buyer is not satisfied, in its sole and absolute discretion, with any inspections, examinations, investigations, or review of or relating to the environmental condition of the Property, Buyer may terminate this Agreement by giving written notice thereof to Seller on or before the Closing Date, in which event the Deposit shall be returned to Buyer, this Agreement shall become null and void and the Parties hereto shall have no further obligations to each other hereunder, except for those, which, by the express terms of this Agreement, survive such termination.
(b) Buyer shall indemnify, defend and hold Seller harmless from and against any and all claims, costs, expenses, liabilities, including, without limitation, reasonable attorney’s fees (collectively, “Liabilities”), for damages or injuries arising out of or resulting from the activities of Buyer Inspectors on the Property, except to the extent caused by a pre-existing condition, or the negligence or willful misconduct of Seller or its agents, contractors, architects, engineers, consultants, surveyors, attorneys, agents, designees and employees. Buyer’s indemnification obligations set forth herein shall survive the Closing and shall not be merged with the deed, and shall survive the termination of this Agreement prior to the Closing.
(c) Buyer shall, at its sole cost and expense, promptly repair and/or restore any damage or alteration of the physical condition of the Property which results from any inspections conducted by the Buyer Inspectors.
4.1.2 Due Diligence Items
. Seller will deliver to or make available for examination, investigation, inspection by the Buyer Inspectors, promptly after the Effective Date, to the extent such items are within Seller’s possession or control, the following due diligence items (the “Due Diligence Items”): (a)Seller’s existing policy of title insurance, and if available a recent preliminary title report and any other documents or items relating to the state of title to the Property (b)Seller’s existing survey of the Property, if any, and any updated, recertified or new survey obtained by Buyer at its sole cost and expense (the “Survey”); (c)the Leases; (d)copies of all contracts pertaining to the Property (the “Contracts”); (e)a rent roll (the “Rent Roll”) which contains an accurate and complete list of all presently effective Leases and listing each tenant, the monthly base rent payable, lease expiration date, refundable security deposit and any other refundable deposits or prepaid rent paid by such tenant, reflecting any rent due at the time the Rent Roll is prepared, provided, however, Buyer shall comply with any Federal or State requirements to maintain the privacy requirements of tenants’ information contained on Rent Roll; (f)financial statements and operating budgets for the Property including operating statements for the Property for the most recent calendar year, certificates of occupancy and reports on historical and proposed capital expenditures; (g)all other documentation required by Buyer to assess the impact of the sale and purchase of the Property on the Property’s real estate taxes (i.e., assessment); (h)any engineering or environmental reports prepared by or on behalf of Seller, soil boring tests, as-built plans and specifications; (i)to the extent not listed in clauses (a) through (i) above, the documents, information and other materials as set forth in the Due Diligence List attached hereto as Exhibit C; and (j)any other agreements, documents, plans or information, including but not limited to environmental or hazardous material information, in the possession or control of Seller that materially affect the ownership, use or operation of the Property (provided that such information is not privileged or contains Seller’s internal underwriting or financial analysis of the Property). All information provided by Seller to Buyer or obtained by Buyer relating to the Property in the course of Buyer’s review, including, without limitation, any environmental assessment or audit (collectively, the “Reports”) shall be treated as confidential information by Buyer and Buyer shall instruct all Buyer Inspectors as to such information’s confidentiality. Seller acknowledges that Buyer may to apply for financing for the acquisition of the Property from public agencies and that information required by and actually submitted to such agencies, including any Reports, will become public records that will not be subject to any agreement between Buyer and Seller regarding confidentiality.