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HomeMy WebLinkAbout5A5 Real Estate Purchase Agreement (Masterbilt Inc) REAL ESTATE PURCHASE AGREEMENT This Real Estate Purchase Agreement (this “Agreement”) is made on September 26, 2019 (the “Contract Date”), by and between the City of South Bend, Indiana, Department of Redevelopment, acting by and through its governing body, the South Bend Redevelopment Commission (“Seller”) and Masterbilt Incorporated, an Indiana corporation with its registered office at 325 S Walnut Street, South Bend, Indiana 46601 (“Buyer”) (each a “Party” and together the “Parties”). RECITALS A. Seller exists and operates pursuant to the Redevelopment of Cities and Towns Act of 1953, as amended, being Ind. Code 36-7-14 (the “Act”). B. In furtherance of its purposes under the Act, Seller owns certain real property located in South Bend, Indiana (the “City”), and more particularly described in attached Exhibit A (the “Property”). C. Pursuant to the Act, Seller adopted its Resolution No. 3322 on January 14, 2016, whereby Seller established an offering price of Nineteen Thousand Two Hundred Fifty Dollars ($19,250.00) per acre for the Property. D. Pursuant to the Act, on January 14, 2016, Seller authorized the publication, on January 22, 2016 and January 29, 2016, respectively, of a notice of its intent to sell the Property and its desire to receive bids for said Property on or before 9:00 a.m. on February 11, 2016. E. Seller received no bids for the Property on February 11, 2016, and, therefore, having satisfied the conditions stated in Section 22 of the Act, Seller now desires to sell the Property to Buyer on the terms stated in this Agreement. THEREFORE, in consideration of the mutual covenants and promises in this Agreement and other good and valuable consideration, the receipt of which is hereby acknowledged, Buyer and Seller agree as follows: 1. OFFER AND ACCEPTANCE A copy of this Agreement, signed by Buyer, constitutes Buyer’s offer to purchase the Property on the terms stated in this Agreement and shall be delivered to Seller, in care of the following representative (“Seller’s Representative”): Daniel Buckenmeyer, Director of Economic Resources and Business Development Department of Community Investment City of South Bend 1400 S. County-City Building 227 W. Jefferson Blvd. South Bend, Indiana 46601 This offer shall expire thirty (30) days after delivery unless accepted by Seller. To accept Buyer’s offer, Seller shall return a copy of this Agreement, counter-signed by Seller in accordance with applicable laws, to the following (“Buyer’s Representative”): Robert Michalak, President Masterbilt Incorporated 325 South Walnut Street South Bend, Indiana 46601 2. PURCHASE PRICE AND EARNEST MONEY DEPOSIT A. Purchase Price. The purchase price for the Property shall be Thirty Thousand Dollars ($30,000.00) (the “Purchase Price”), payable by Buyer to Seller in cash at the closing described in Section 10 below (the “Closing,” the date of which is the “Closing Date”). B. Earnest Money Deposit. Within five (5) business days after the Contract Date, Buyer will deliver to Seller the sum of Three Thousand Dollars ($3,000.00), which Seller will hold as an earnest money deposit (the “Earnest Money Deposit”). Seller will be responsible for disposing of the Earnest Money Deposit in accordance with the terms of this Agreement. The Earnest Money Deposit shall be credited against the Purchase Price at the Closing or, if no Closing occurs, refunded or forfeited as provided below. C. Termination During Due Diligence Period. If Buyer exercises its right to terminate this Agreement by written notice to Seller in accordance with Section 3 below, the Earnest Money Deposit shall be refunded to Buyer. If Buyer fails to exercise its right to terminate this Agreement by written notice to Seller within the Due Diligence Period, then the Earnest Money Deposit shall become non-refundable. D. Liquidated Damages. If Seller complies with its obligations hereunder and Buyer, not having terminated this Agreement during the Due Diligence Period in accordance with Section 3 below, fails to purchase the Property on or before the Closing Date, the Earnest Money Deposit shall be forfeited by Buyer and retained by Seller as liquidated damages in lieu of any other damages. 3. BUYER’S DUE DILIGENCE A. Investigation. Buyer and Seller have made and entered into this Agreement based on their mutual understanding that Buyer intends to use the Property for a consolidated manufacturing facility and headquarters (the “Buyer’s Use”). Seller acknowledges that Buyer’s determination whether Buyer’s Use is feasible requires investigation into various matters (Buyer’s “Due Diligence”). Therefore, Buyer’s obligation to complete the purchase of the Property is conditioned upon the satisfactory completion, in Buyer’s discretion, of Buyer’s Due Diligence, including, without limitation, Buyer’s examination, at Buyer’s sole expense, of zoning and land use matters, environmental matters, real property title matters, and the like, as applicable. B. Due Diligence Period. Buyer shall have a period of sixty (60) days following the Contract Date to complete its examination of the Property in accordance with this Section 3 (the “Due Diligence Period”). C. Authorizations During Due Diligence Period. During the Due Diligence Period, Seller authorizes Buyer, upon Buyer providing Seller with evidence that Buyer has general liability insurance reasonably acceptable to Seller, in the amount of at least One Million Dollars ($1,000,000.00), naming Seller as an additional insured and covering the activities, acts, and omissions of Buyer and its representatives at the Property, to (i) enter upon the Property or to cause agents to enter upon the Property for purposes of examination; provided, that Buyer may not take any action upon the Property which reduces the value thereof and Buyer may not conduct any invasive testing at the Property without Seller’s express prior written consent; further provided, that if the transaction contemplated herein is not consummated, Buyer shall promptly restore the Property to its condition prior to entry, and agrees to defend, indemnify and hold Seller harmless, before and after the Closing Date whether or not a closing occurs and regardless of any cancellations or termination of this Agreement, from any liability to any third party, loss or expense incurred by Seller, including without limitation, reasonable attorney fees and costs arising from acts or omissions of Buyer or Buyer’s agents or representatives; and (ii) file any application with any federal, state, county, municipal or regional agency relating to the Property for the purpose of obtaining any approval necessary for Buyer’s anticipated use of the Property. If Seller’s written consent to or signature upon any such application is required by any such agency for consideration or acceptance of any such application, Buyer may request from Seller such consent or signature, which Seller shall not unreasonably withhold. Notwithstanding the foregoing, any zoning commitments or other commitments that would further restrict the future use or development of the Property, beyond the restrictions in place as a result of the current zoning of the Property, shall be subject to Seller’s prior review and written approval. D. Environmental Site Assessment. Buyer may, at Buyer’s sole expense, obtain a Phase I environmental site assessment of the Property pursuant to and limited by the authorizations stated in this Section 3. E. Termination of Agreement. If at any time within the Due Diligence Period Buyer determines, in its sole discretion, not to proceed with the purchase of the Property, Buyer may terminate this Agreement by written notice to Seller’s Representative, and Buyer shall be entitled to a full refund of the Earnest Money Deposit. 4. SELLER’S DOCUMENTS; ENVIRONMENTAL SITE ASSESSMENT Upon Buyer’s request, Seller will provide Buyer a copy of all known environmental inspection, engineering, title, and survey reports and documents in Seller’s possession relating to the Property. In the event the Closing does not occur, Buyer will immediately return all such reports and documents to Seller’s Representative with or without a written request by Seller. 5. PRESERVATION OF TITLE After the Contract Date, Seller shall not take any action or allow any action to be taken by others to cause the Property to become subject to any interests, liens, restrictions, easements, covenants, reservations, or other matters affecting Seller’s title (such matters are referred to as “Encumbrances”). Seller acknowledges that Buyer intends to obtain, at Buyer’s sole expense, and to rely upon a commitment for title insurance on the Property (the “Title Commitment”) and a survey of the Property (the “Survey”) identifying all Encumbrances as of the Contract Date. The Property shall be conveyed to Buyer free of any Encumbrances other than Permitted Encumbrances (as defined in Section 7 below). 6. TITLE COMMITMENT AND POLICY REQUIREMENTS Buyer shall obtain the Title Commitment for an owner’s policy of title insurance issued by a title company selected by Buyer and reasonably acceptable to Seller (the “Title Company”) within twenty (20) days after the Contract Date. The Title Commitment shall (i) agree to insure good, marketable, and indefeasible fee simple title to the Property (including public road access) in the name of the Buyer for the full amount of the Purchase Price upon delivery and recordation of a special warranty deed (the “Deed”) from the Seller to the Buyer, and (ii) provide for issuance of a final ALTA owner’s title insurance policy, with any endorsements requested by Buyer, subject to the Permitted Encumbrances. Regardless of whether this transaction closes, Buyer shall be responsible for all of the Title Company’s title search charges and all costs of the Title Commitment and owner’s policy. 7. REVIEW OF TITLE COMMITMENT AND SURVEY Within twenty (20) days after Buyer’s receipt of the Title Commitment, Buyer shall give Seller written notice of any objections to the Title Commitment. Within twenty (20) days after Buyer’s receipt of the Survey, Buyer shall give Seller written notice of any objections to the Survey. Any exceptions identified in the Title Commitment or Survey to which written notice of objection is not given within such period shall be a “Permitted Encumbrance.” If the Seller is unable or unwilling to correct the Buyer’s title and survey objections within the Due Diligence Period, Buyer may terminate this Agreement by written notice to Seller prior to expiration of the Due Diligence Period, in which case the Earnest Money Deposit shall be refunded to Buyer. If Buyer fails to so terminate this Agreement, then such objections shall constitute “Permitted Encumbrances” as of the expiration of the Due Diligence Period, and Buyer shall acquire the Property without any effect being given to such title and survey objections. 8. DISPUTE RESOLUTION A. Forum. Any action to enforce the terms or conditions of this Agreement or otherwise concerning a dispute under this Agreement will be commenced in the courts of St. Joseph County, Indiana, unless the Parties mutually agree to an alternative method of dispute resolution. B. Waiver of Jury Trial. Both Parties hereby waive any right to trial by jury with respect to any action or proceeding relating to this Agreement. 9. NOTICES All notices required or allowed by this Agreement, before or after Closing, shall be delivered in person or by certified mail, return receipt requested, postage prepaid, addressed to Seller in care of Seller’s Representative (with a copy to South Bend Legal Department, 1200 S. County-City Building, 227 W. Jefferson Blvd., South Bend, IN 46601, Attn: Corporation Counsel), or to Buyer in care of Buyer’s Representative at their respective addresses stated in Section 1 above. Either Party may, by written notice, modify its address or representative for future notices. 10. CLOSING A. Timing of Closing. Unless this Agreement is earlier terminated, the Closing shall be held at the office of the Title Company, and the Closing Date shall be a mutually agreeable date not later than thirty (30) days after the end of the Due Diligence Period. B. Closing Procedure. (i) At Closing, Buyer shall deliver the Purchase Price to Seller, conditioned on Seller’s delivery of the Deed, in the form attached hereto as Exhibit B, conveying the Property to Buyer, free and clear of all liens, encumbrances, title defects, and exceptions other than Permitted Encumbrances, and the Title Company’s delivery of the marked-up copy of the Title Commitment (or pro forma policy) to Buyer in accordance with Section 6 above. (ii) Possession of the Property shall be delivered to the Buyer at Closing, in the same condition as it existed on the Contract Date, ordinary wear and tear and casualty excepted. C. Conditions Precedent to Closing. Unless waived by the Parties before or at Closing, Seller shall have no obligation to complete the transaction contemplated in this Agreement unless, before the Closing Date, Seller has received and the City’s Planning Department has approved, in its sole discretion, Buyer’s design, plans, and specifications for lot improvements and landscaping on the Property consistent with City standards (Buyer’s “Lot Improvements”), which Lot Improvements will cost no less than One Million Two Hundred Thousand Dollars ($1,200,000.00). Notwithstanding any provision of this Agreement to the contrary, in the event this transaction is not completed due to the failure of one or more of the foregoing conditions, Seller shall have no liability for any of Buyer’s losses, damages, costs, or expenses of any kind, including attorney fees, incurred in connection with its proposed acquisition of the Property under this Agreement, except for the return of the Earnest Money Deposit, if appropriate in accordance with the terms of this Agreement. D. Closing Costs. Buyer shall pay all of the Title Company’s closing and/or document preparation fees and all recordation costs associated with the transaction contemplated in this Agreement. 11. BUYER’S POST-CLOSING DEVELOPMENT OBLIGATIONS A. Property Improvements; Proof of Investment. Within Twenty-Four (24) months after the Closing Date, Buyer will expend an amount not less than One Million Two Hundred Thousand Dollars ($1,200,000.00) to redevelop the Property to allow Buyer's Use thereof (“Property Improvements”). Promptly upon completing the Property Improvements, Buyer will submit to Seller satisfactory records, as determined in Seller’s sole discretion, proving the above required expenditures and will permit Seller (or its designee) to inspect the Property to ensure that Buyer’s Property Improvements were completed satisfactorily. B. Certificate of Completion. Promptly after Buyer completes the Property Improvements and satisfactorily proves the same in accordance with the terms of Section 11.A. above, Seller will issue to Buyer a certificate acknowledging such completion and releasing Seller’s reversionary interest in the Property (the “Certificate of Completion”). The Parties agree to record the Certificate of Completion immediately upon issuance, and Buyer will pay the costs of recordation. C. Remedies Upon Default. In the event Buyer fails to complete the Property Improvements, or satisfactorily to prove such performance, in accordance with Section 11.A above, then, in addition to pursuing any other remedies available at law or in equity, Seller shall have the right to: (i) re-enter and take possession of the Property and to terminate and revest in Seller the estate conveyed to Buyer at Closing and all of Buyer’s rights and interests in the Property without offset or compensation for the value of any improvements made by Buyer; or, alternatively, (ii) recover from Buyer a cash payment in an amount equal to the Appraised Value of the Property, due to Seller immediately upon demand by Buyer. The Parties agree that Seller’s conveyance of the Property to Buyer at Closing will be made on the condition subsequent set forth in the foregoing sentence. Further, the Parties agree that Seller’s reversionary interest in the Property will be subordinate to the first-priority mortgage encumbering the Property, if any, arising out of Buyer’s contemporaneous financing of the redevelopment of the Property, provided that Buyer notifies Seller in advance of the execution or recording of such first-priority mortgage. 12. ACCEPTANCE OF PROPERTY AS-IS Buyer agrees to purchase the Property “as-is, where-is” and without any representations or warranties by Seller as to the condition of the Property or its fitness for any particular use or purpose. Seller offers no such representation or warranty as to condition or fitness, and nothing in this Agreement will be construed to constitute such a representation or warranty as to condition or fitness. 13. TAXES Buyer, and Buyer’s successors and assigns, shall be liable for any and all real property taxes assessed and levied against the Property with respect to the year in which the Closing takes place and for all subsequent years. Seller shall have no liability for any real property taxes associated with the Property, and nothing in this Agreement shall be construed to require the proration or other apportionment of real property taxes resulting in Seller’s liability therefor. 14. REMEDIES Upon any default in or breach of this Agreement by either Party, the defaulting Party will proceed immediately to cure or remedy such default within thirty (30) days after receipt of written notice of such default or breach from the non-defaulting Party, or, if the nature of the default or breach is such that it cannot be cured within thirty (30) days, the defaulting Party will diligent pursue and prosecute to completion an appropriate cure within a reasonable time. In the event of a default or breach that remains uncured for longer than the period stated in the foregoing sentence, the non- defaulting Party may terminate this Agreement, commence legal proceedings, including an action for specific performance, or pursue any other remedy available at law or in equity. All the Parties’ respective rights and remedies concerning this Agreement and the Property are cumulative. 15. COMMISSIONS The Parties mutually acknowledge and warrant to one another that neither Buyer nor Seller is represented by any broker in connection with the transaction contemplated in this Agreement. Buyer and Seller agree to indemnify and hold harmless one another from any claim for commissions in connection with the transaction contemplated in this Agreement. 16. INTERPRETATION; APPLICABLE LAW Both Parties having participated fully and equally in the negotiation and preparation of this Agreement, this Agreement shall not be more strictly construed, nor shall any ambiguities in this Agreement be presumptively resolved, against either Party. This Agreement shall be interpreted and enforced according to the laws of the State of Indiana. 17. DISPUTE RESOLUTION; WAIVER OF JURY TRIAL Any action to enforce the terms or conditions of this Agreement or otherwise concerning a dispute under this Agreement will be commenced in the courts of St. Joseph County, Indiana, unless the Parties mutually agree to an alternative method of dispute resolution. The Parties acknowledge that disputes arising under this Agreement are likely to be complex and they desire to streamline and minimize the cost of resolving such disputes. In any legal proceeding, each Party irrevocably waives the right to trial by jury in any action, counterclaim, dispute, or proceeding based upon, or related to, the subject matter of this Agreement. This waiver applies to all claims against all parties to such actions and proceedings. This waiver is knowingly, intentionally, and voluntarily made by both Parties. 18. WAIVER Neither the failure nor any delay on the part of a Party to exercise any right, remedy, power, or privilege under this Agreement shall operate as a waiver thereof, nor shall nay single or partial exercise of any right, remedy, power, or privilege preclude any other or further exercise of the same or of any right, remedy, power, or privilege with respect to any occurrence be construed as a waiver of any such right, remedy, power, or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver. 19. SEVERABILITY If any term or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining terms and provisions of this Agreement shall continue in full force and effect unless amended or modified by mutual consent of the Parties. 20. FURTHER ASSURANCES The Parties agree that they will each undertake in good faith, as permitted by law, any action and execute and deliver any document reasonably required to carry out the intents and purposes of this Agreement. 21 ENTIRE AGREEMENT This Agreement embodies the entire agreement between Seller and Buyer and supersedes all prior discussions, understandings, or agreements, whether written or oral, between Seller and Buyer concerning the transaction contemplated in this Agreement. 22. ASSIGNMENT Buyer and Seller agree that this Agreement or any of Buyer’s rights hereunder may not be assigned by Buyer, in whole or in part, without the prior written consent of Seller. In the event Buyer wishes to obtain Seller’s consent regarding a proposed assignment of this Agreement, Buyer shall provide any and all information reasonably demanded by Seller in connection with the proposed assignment and/or the proposed assignee. 23. BINDING EFFECT; COUNTERPARTS; SIGNATURES All the terms and conditions of this Agreement will be effective and binding upon the Parties and their successors and assigns at the time the Agreement is fully signed and delivered by Buyer and Seller. This Agreement may be separately executed in counterparts by Buyer and Seller, and the same, when taken together, will be regarded as one original Agreement. Electronically transmitted signatures will be regarded as original signatures. 24. AUTHORITY TO EXECUTE; EXISTENCE The undersigned persons executing and delivering this Agreement on behalf of the respective Parties represent and certify that they are the duly authorized representatives of each and have been fully empowered to execute and deliver this Agreement and that all necessary corporate action has been taken and done. Further, the undersigned representative of Buyer represents and warrants that Buyer is duly organized, validly existing, and in good standing under the laws of the State of Indiana. 25. TIME Time is of the essence of this Agreement. [Signature page follows.] IN WITNESS WHEREOF, the Parties hereby execute this Real Estate Purchase Agreement to be effective as of the Contract Date stated above. BUYER: Masterbilt Incorporated, an Indiana corporation __________________________ Robert Michalak, President Dated: SELLER: City of South Bend, Department of Redevelopment, by and through its governing body, the South Bend Redevelopment Commission __________________________ Marcia I. Jones, President ATTEST: __________________________ Quentin Phillips, Secretary EXHIBIT A Description of Property Lot One of the Kemble Street and Indiana Avenue Minor Subdivision, being a part of the Northeast Quarter of Section 14, Township 37 North, Range 2 East, City of South Bend, Portage Township, St. Joseph County, Indiana, recorded as Document No. 2019-11131 on May 20, 2019 in the Office of the Recorder of St. Joseph County, Indiana, subject to all legal rights-of-way, easements, and restrictions of record. Parcel Key No. 018-8024-0972 EXHIBIT B Form of Special Warranty Deed Page 1 of 2 AUDITOR’S RECORD TRANSFER NO.__________ TAXING UNIT___________ DATE __________________ KEY NO. 018-8024-0972 SPECIAL WARRANTY DEED THIS INDENTURE WITNESSETH, that the City of South Bend, Department of Redevelopment, by and through its governing body, the South Bend Redevelopment Commission, 1400 S. County-City Building, 227 W. Jefferson Boulevard, South Bend, Indiana (the “Grantor”) CONVEYS AND SPECIALLY WARRANTS to Masterbilt Incorporated, an Indiana corporation with its registered office at 325 South Walnut Street, South Bend, Indiana 46601 (the “Grantee”), for and in consideration of One Dollar ($1.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the following real estate located in St. Joseph County, Indiana (the “Property”): Lot One of the Kemble Street and Indiana Avenue Minor Subdivision, being a part of the Northeast Quarter of Section 14, Township 37 North, Range 2 East, City of South Bend, Portage Township, St. Joseph County, Indiana, recorded as Document No. 2019-11131 on May 20, 2019 in the Office of the Recorder of St. Joseph County, Indiana, subject to all legal rights-of-way, easements, and restrictions of record. Parcel Key No. 018-8024-0972 The Grantor warrants title to the Property only insofar as it might be affected by any act of the Grantor during its ownership thereof and not otherwise. The Grantor hereby conveys the Property to the Grantee free and clear of all leases or licenses; subject to real property taxes and assessments; subject to all easements, covenants, conditions, restrictions, and other matters of record; subject to rights of way for roads and such matters as would be disclosed by an accurate survey and inspection of the Property; subject to all applicable building codes and zoning ordinances; and subject to all provisions and objectives contained in the Commission’s development area plan, and any design review guidelines associated therewith. The Grantor conveys the Property to the Grantee subject to the limitation that the Grantee, and its successors and assigns, shall not discriminate against any person on the basis of race, creed, color, sex, age, or national origin in the sale, lease, rental, use, occupancy, or enjoyment of the Property or any improvements constructed on the Property. Page 2 of 2 Pursuant to Section 11 of the Purchase Agreement, the Grantor conveys the Property to the Grantee by this deed subject to certain conditions subsequent. In the event the Grantee fails to perform the Property Improvements, or satisfactorily to prove such performance, in accordance with Section 11 of the Purchase Agreement, then the Grantor shall have the right to re-enter and take possession of the Property and to terminate and revest in the Grantor the estate conveyed to the Grantee by this deed and all of the Grantee’s rights and interests in the Property without offset or compensation for the value of any improvements to the Property made by the Grantee. The recordation of a Certificate of Completion in accordance with Section 11 of the Purchase Agreement will forever release and discharge the Grantor’s reversionary interest stated in this paragraph. Each of the undersigned persons executing this deed on behalf of the Grantor represents and certifies that s/he is a duly authorized representative of the Grantor and has been fully empowered, by proper action of the governing body of the Grantor, to execute and deliver this deed, that the Grantor has full corporate capacity to convey the real estate described herein, and that all necessary action for the making of such conveyance has been taken and done. GRANTOR: CITY OF SOUTH BEND, DEPARTMENT OF REDEVELOPMENT ______________________________ Marcia I. Jones, President ATTEST: ______________________________ Quentin Phillips, Secretary STATE OF INDIANA ) ) SS: ST. JOSEPH COUNTY ) Before me, the undersigned, a Notary Public, in and for said County and State, personally appeared Marcia I. Jones and Quentin Phillips, known to me to be the President and Secretary, respectively, of the South Bend Redevelopment Commission and acknowledged the execution of the foregoing Special Warranty Deed. IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal on the _____ day of ______________, 2019. ____________________________________ Mary C. Brazinsky, Notary Public Residing in St. Joseph County, Indiana Commission Expires: December 12, 2024 I affirm, under the penalties for perjury, that I have taken reasonable care to redact each Social Security number in this document, unless required by law. Sandra L. Kennedy. This instrument was prepared by Sandra L. Kennedy, Assistant City Attorney, City of South Bend Department of Law, 1200S County-City Building, 227 W Jefferson Blvd., South Bend, Indiana 46601.