PURCHASE AND SALE AGREEMENT by Strategic Storage Trust, Inc.

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Company: Strategic Storage Trust, Inc.
SEC CIK: 1410567
SEC Type: EX-10.1
SIC Code: 6798
SIC Industry: REAL ESTATE INVESTMENT TRUSTS
Date Filed: 2012-06-25

Date Filed: 
06/25/2012
SKU: RDPKMD-C-61O9-2
Stockade Portfolio Purchase Agreement

Exhibit 10.1

PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is executed by and between those various entities listed on Schedule “D” attached hereto and made a part hereof by reference (collectively the “Seller”), and SSTI Acquisitions, LLC, a Delaware limited liability company (“Purchaser”).

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 Purchaser agree as follows:

1.

PURCHASE AND SALE

1.1 Purchase and Sale. Subject to the terms and conditions of this Agreement, Seller hereby agrees to sell and convey to Purchaser, and Purchaser hereby agrees to purchase from Seller, all of the following described property (herein collectively called the “Property”):

(a) Land. (i) That certain tract of land located at 4777 Highway 80 East, Wilmington Island, GA 31410, being more particularly described on Exhibit “A-1” attached hereto and made a part hereof (herein, “Parcel One”), (ii) that other certain tract of land located at 3015 Ricks Industrial Park Dr., Myrtle Beach, SC 29588, being more particularly described on Exhibit “A-2” attached hereto and made a part hereof (herein, “Parcel Two”), (iii) that other certain tract of land located at 1060 King George Blvd., Savannah, GA 31419, being more particularly described on Exhibit “A-3” attached hereto and made a part hereof (herein, “Parcel Three”), (iv) that other certain tract of land located at 782 King George Blvd., Savannah, GA 31419, being more particularly described on Exhibit “A-4” attached hereto and made a part hereof (herein, “Parcel Four”), (v) that other certain tract of land located at 512 Percival Rd., Columbia, SC 29206, being more particularly described on Exhibit “A-5” attached hereto and made a part hereof (herein, “Parcel Five”), (vi) that other certain tract of land located at 890 St. Peters Church Rd., Lexington, SC 29072, being more particularly described on Exhibit “A-6” attached hereto and made a part hereof (herein, “Parcel Six”), (vii) that other certain tract of land located at 1990 NW Federal Hwy 1, Stuart, FL 34994, being more particularly described on Exhibit “A-7” attached hereto and made a part hereof (herein, “Parcel Seven”), (viii) that other certain tract of land located at 120 Northpoint Dr. Lexington, SC 29072, being more particularly described on Exhibit “A-8” attached hereto and made a part hereof (herein, “Parcel Eight”), (ix) that other certain tract of land located at 6195 South Kanner Hwy, Stuart FL 34997, being more particularly described on Exhibit “A-9” attached hereto and made a part hereof (herein, “Parcel Nine”), (x) that other certain tract of land located at 298 Red Cedar St., Bluffton SC 29910, being more particularly described on Exhibit “A-10” attached hereto and made a part hereof (herein, “Parcel Ten”, and together with Parcel One thru Parcel Nine being collectively referred to as the “Phase One Parcels”), (xi) that other certain tract of land located at 1117 Bowman Rd., Mt. Pleasant, SC 29464, being more particularly described on Exhibit “A-11” attached hereto and made a part hereof (herein, “Parcel Eleven”), (xii) that other certain tract of land located at 2343 Savannah Hwy, Charleston, SC 29414, being more particularly described on Exhibit “A-12” attached hereto and made a part hereof (herein, “Parcel Twelve”), (xiii) that other certain tract of land located at 1533 Ashley River Rd., Charleston, SC 29407, being more particularly described on Exhibit “A-13” attached hereto and made a part hereof (herein, “Parcel Thirteen”), (xiv) that other certain tract of land located at 1904 Hwy 17 N, Mt. Pleasant, SC 29464, being more particularly described on Exhibit “A-14” attached hereto and made a part hereof (herein, “Parcel Fourteen”), (xv) that other certain tract of land located at 1951 Maybank Hwy, Charleston, SC 29412, being more particularly described on Exhibit “A-15” attached hereto and made a part hereof (herein, “Parcel Fifteen”), and (xvi) that other certain tract of land located at 1108 Stockade Ln., Mt. Pleasant, SC 29466, being more particularly described on Exhibit “A-16” attached hereto and made a part hereof (herein, “Parcel Sixteen”, and Parcels Eleven thru Parcel Sixteen, being collectively referred to as the “Phase Two Parcels”; the Phase One Parcels and the Phase Two Parcels being collectively called the “Land”, and sometimes individually referred to as a “Parcel”).


It is the intent of this Agreement that Seller and Purchaser will close on the Land in accordance with and subject to the terms of this Agreement. If Purchaser fails to close on the Phase One Parcels for any reason other than Seller’s default or any other provision of this Agreement which allows Purchaser to terminate as to one or more Parcels, this Agreement shall be terminated.

(b) Easements. All easements, if any, benefiting the Land or the Improvements (as defined in Section 1.1(d) of this Agreement).

(c) Rights and Appurtenances. All rights and appurtenances pertaining to the Land, including any right, title and interest of Seller in and to adjacent streets, alleys or rights-of-way.

(d) Improvements. (i) All improvements and related amenities in and on Parcel One, comprising approximately 69,355 net rentable square feet of storage space and 572 rental units, and being commonly known as “Stockade Storage” (herein, the “Parcel One Improvements”), (ii) all improvements and related amenities in and on Parcel Two, comprising approximately 72,630 net rentable square feet of storage space and 481 rental units, and being commonly known as “Stockade Storage” (herein, the “Parcel Two Improvements”), (iii) all improvements and related amenities in and on Parcel Three, comprising approximately 68,740 net rentable square feet of storage space and 588 rental units, and being commonly known as “Stockade Storage” (herein, the “Parcel Three Improvements”), (iv) all improvements and related amenities in and on Parcel Four, comprising approximately 67,075 net rentable square feet of storage space and 448 rental units, and being commonly known as “Stockade Storage” (herein, the “Parcel Four Improvements”), (v) all improvements and related amenities in and on Parcel Five, comprising approximately 65,375 net rentable square feet of storage space and 487 rental units, and being commonly known as “Stockade Storage” (herein, the “Parcel Five Improvements”), (vi) all improvements and related amenities in and on Parcel Six, comprising approximately 35,375 net rentable square feet of storage space and 247 rental units, and being commonly known as “Stockade Storage” (herein, the “Parcel Six Improvements”), (vii) all improvements and related amenities in and on Parcel Seven, comprising approximately 51,543 net rentable square feet of storage space and 367 rental units, and being commonly known as “Stockade Storage” (herein, the “Parcel Seven Improvements”), (viii) all improvements and related amenities in and on Parcel Eight, comprising approximately 86,450 net rentable square feet of storage space and 583 rental units, and being commonly known as “Stockade Storage” (herein, the “Parcel Eight Improvements”), (ix) all improvements and related amenities in and on Parcel Nine, comprising approximately 54,675 net rentable square feet of storage space and 383 rental units, and being commonly known as “Stockade Storage” (herein, the “Parcel Nine Improvements”), (x) all improvements and related amenities in and on Parcel Ten, comprising approximately 78,890 net rentable square feet of storage space and 659 rental units, and being commonly known as “Stockade Storage” (herein, the “Parcel Ten Improvements”, and together with the Parcel One Improvements thru the Parcel Nine Improvements being collectively referred to as the “Phase One Improvements”), (xi) all improvements and related amenities in and on Parcel Eleven, comprising approximately 40,970 net rentable square feet of storage space and 393 rental units, and being commonly known as “Stockade Storage” (herein, the “Parcel Eleven Improvements”), (xii) all improvements and related amenities in and on Parcel Twelve, comprising approximately TBD net rentable square feet of storage space and TBD rental units, and also being commonly known as “Stockade Storage” (herein, the “Parcel Twelve Improvements”), (xiii) all improvements and related amenities in and on Parcel Thirteen, comprising approximately 47,050 net rentable square feet of storage space and 426 rental units, and also being commonly known as “Stockade Storage” (herein, the “Parcel Thirteen Improvements”), (xiv) all improvements and related amenities in and on Parcel Fourteen, comprising approximately 63,545 net rentable square feet of storage space and 591 rental units, and also being commonly known as “Stockade Storage” (herein, the “Parcel Fourteen Improvements”), (xv) all improvements and related amenities in and on Parcel Fifteen, comprising approximately 66,335 net rentable square feet of storage space and 573 rental units, and also being commonly known as “Stockade Storage” (herein, the “Parcel Fifteen Improvements”), and (xvi) all improvements and related amenities in and on Parcel Sixteen, comprising approximately 195,072 net rentable square feet of storage space and 1,372 rental units, and also being commonly known as “Stockade Storage” (herein, the “Parcel Sixteen Improvements”, and together with the Parcel Eleven Improvements thru the Parcel Fifteen Improvements being collectively referred to as the “Phase Two Improvements”; the Phase One Improvements and the Phase Two Improvements being herein collectively called the “Improvements”).

 

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(e) Leases. Seller’s interest under (i) all written leases, occupancy agreements and rental agreements (collectively, the “Leases”) for rental units in the Property, including all tenant leasing files, together with all tenant security deposits held by Seller on the Closing Date (as defined in Section 6.1 of this Agreement), and (ii) all cellular tower leases and billboard leases relating to the Property, if any, as more particularly described on Schedule “B” attached hereto and incorporated herein (the “Additional Leases”).

(f) Tangible Personal Property. All appliances, fixtures, equipment, machinery, furniture, carpet, drapes and other items of personal property owned by Seller and located on or about the Land and the Improvements (the “Tangible Personal Property”), including, without limitation, those items of personal property set forth on Exhibit “D” attached hereto, and further including all golf carts and on site moving trucks owned by Seller or its affiliates, if any, listed on Exhibit “D” hereto (herein collectively, the “Motor Vehicles”). The golf carts at Stockade Facility “I” at Ridgeland and at Daniel Island will be excluded. Of the five (5) trucks, three (3) trucks will convey and one (1) will remain at Stockade Facility “I” and one (1) will remain at Daniel Island.

(g) Boxes, Packing Supplies, Quilts and Locks. Prior to Closing, Seller will inventory (subject to verification by Purchaser) all the boxes, packing supplies, quilts and locks and these will be conveyed to Purchaser at closing for the amount of Seller’s costs.

(h) Contracts. Seller’s interest (to the extent the same is assignable) under the “Contracts” (as defined below), other than the “Rejected Contracts” (as defined below).

(i) Intangible Property. All intangible property (the “Intangible Property”) owned by Seller and pertaining to the Land, the Improvements, or the Tangible Personal Property, including, without limitation, (i) all “yellow page” advertisements (Purchaser to pay for yellow page advertisement fees accruing from and after the date of Closing which will be included in the phone bill), (ii) all transferable utility contracts, (iii) all transferable telephone exchange numbers, including the telephone numbers and telecopy numbers set forth on Exhibit “H” attached hereto, (iv) all plans and specifications, (v) all licenses, permits, engineering plans and landscape plans, (vi) all assignable warranties and guarantees relating to the Property or any part thereof, (vii) all internet websites and other internet related property rights owned by Seller and/or any affiliate thereof and relating to the Property, including, without limitation, the domain name “www.stockadestorage.com”, and the website information, paid search campaigns and local listing information listed on Exhibit “J” attached hereto, and (viii) all of Seller’s right, title and interest in and to the trade name “Stockade Storage”. Provided, however, if Purchaser fails to close the Phase Two Property (hereinafter defined) for any reason other than Seller’s default or any other provision of this Agreement which allows Purchaser to terminate as to one or more Parcels, the assignments in this Section 1.1(i), (vii) and (viii) above shall automatically terminate and Seller shall have all rights to reinstate all internet related property, including, without limitation, the domain name “www.stockadestorage.com” and to use the trade name “Stockade Storage”. At the Phase One Closing (as hereinafter defined), Purchaser shall grant a license to Seller without cost to Seller to use the name “Stockade Storage” for the Phase Two Property, the Stockade Facility “I” at Ridgeland (“Ridgeland Facility”), the facility at Daniel Island, South Carolina (the “Daniel Island Facility”), and any other facility located on a Parcel of the Property not conveyed to Purchaser under the terms of this Agreement. Seller and Purchaser shall use commercially reasonable efforts to agree to the form of license agreement during the Approval Period. In addition, after the Phase One Closing, Seller may set up a separate website for the Ridgeland Facility and the Daniel Island Facility and any other facility located on a Parcel of the Property not conveyed to Purchaser under the terms of this Agreement, and, if Seller elects to set up a website for said facilities, Purchaser agrees to provide a link on the “SmartStop” website to Seller’s new website. Seller shall not be required to change the name of its existing entities known as: Stockade Storage of Charleston, LLC, Stockade Storage, LLC and Stockade Business Park Association, Inc.

The Phase One Parcels, the Phase One Improvements and all easements, rights, appurtenances, Leases, Additional Leases, Tangible Personal Property, Motor Vehicles, Contracts and Intangible Properties associated with the Phase One Parcels and the Phase One Improvements being herein collectively referred to as the “Phase One Property”.

 

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The Phase Two Parcels, the Phase Two Improvements and all easements, rights, appurtenances, Leases, Additional Leases, Tangible Personal Property, Motor Vehicles, Contracts and Intangible Properties associated with the Phase Two Parcels and the Phase Two Improvements being herein collectively referred to as the “Phase Two Property”.

1.2 Excluded Property. Subject to the terms of this Section 1.2, the real property described on Exhibit “I” attached hereto shall be excluded from the property to be conveyed and/or transferred hereunder. Seller shall be responsible, at its sole cost and expense, for securing a subdivision plat creating a separate parcel for each Excluded Property (each such plat being referred to herein as a “Replat”). Each Replat shall be subject to the written approval of Purchaser, not to be unreasonably withheld, before such Replat is submitted or resubmitted for review and approval by any governmental entity. If the Replat for any Excluded Property has not received final approval by the appropriate governmental entity and been filed of record in the applicable real property records at least twenty (20) days prior to the scheduled Closing Date for said Parcel, the Closing Date for all Parcels included in the phase in which said Excluded Property was to close (i.e., the Phase One Closing or the Phase Two Closing, as said terms are hereafter defined) shall automatically be extended for thirty (30) days (the “First Extended Closing Date”). Likewise, if the Replat for any Excluded Property has not received final approval by the appropriate governmental entity and been filed of record in the appropriate real property records at least twenty (20) days prior to the First Extended Closing Date for said Parcel, the First Extended Closing Date for all Parcels included in the phase in which said Excluded Property was to close shall automatically be extended for an additional thirty (30) days (the “Second Extended Closing Date”). If the Replat for any Excluded Property has not received final approval by the appropriate governmental entity and been filed of record in the appropriate real property records at least twenty (20) days prior to the Second Extended Closing Date for said Parcel, such Excluded Parcel or Excluded Parcels will be included in the sale of the Property, with no adjustment to the Purchase Price.

2.

PURCHASE PRICE

2.1 Purchase Price. The purchase price for the Property shall be the sum of (i) Thirty Six Million Four Hundred Thousand and no/100 Dollars ($36,400,000.00) for the Phase One Property (herein referred to as the “Phase One Purchase Price”), and (ii) Forty Million and no/100 Dollars ($40,000,000.00) for the Phase Two Property (herein referred to as the “Phase Two Purchase Price”; the Phase One Purchase Price and the Phase Two Purchase Price being herein collectively referred to as the “Purchase Price”), subject to prorations and adjustments as set forth in this Agreement, and shall be paid by Purchaser to Seller at the Parcel One Closing (as hereafter defined) and the Parcel Two Closing (as hereafter defined), respectively, by wire transfer of immediately available funds to the Escrow Agent on the respective Closing Date in accordance with wire transfer instructions to be provided by the Escrow Agent. The Purchase Price shall be allocated among the projects comprising the Property, as set forth on Schedule “C” attached hereto and incorporated herein.

3.

EARNEST MONEY

3.1 Earnest Money. Purchaser shall deliver to Republic Title of Texas, Inc., 2626 Howell Street, 10th Floor, Dallas, Texas 75204, Attn: Jennifer Haden (“Escrow Agent”), as agent for Chicago Title Insurance Company (“Title Company”), within three (3) business days after the “Effective Date” (as defined below), an earnest money deposit (the “Initial Deposit”) in the amount of One Million and no/100 Dollars ($1,000,000.00), which shall be deposited by Escrow Agent in its account with Wells Fargo, N.A. Prior to the expiration of the “Approval Period” (as defined below), in the event Purchaser elects not to terminate this Agreement, Purchaser shall make an additional earnest money deposit (the “Additional Deposit”) with Escrow Agent in the amount of One Million and no/100 Dollars ($1,000,000.00), which shall be deposited by Escrow Agent in its account with Wells Fargo, N.A. The Initial Deposit, together with the Additional Deposit, if and when made, and together with all interest accrued thereon, is herein collectively called the “Earnest Money”. The Earnest Money shall be invested by the Escrow Agent in an FDIC-insured, interest-bearing account with Wells Fargo, N.A., separate from other funds held by Escrow Agent, as Purchaser shall direct. If the sale of the Property is consummated under this

 

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Agreement, the Earnest Money shall be paid to Seller and applied as a credit against the Purchase Price at the Parcel Two Closing. At the time the Additional Deposit is made, the entire Earnest Money shall become nonrefundable except in the event of a Seller default or other provision of this Agreement which allows Purchaser to terminate and receive a refund of the Earnest Money. If Purchaser terminates this Agreement in accordance with any right to terminate granted to Purchaser by the terms of this Agreement, the Earnest Money shall be returned to Purchaser, and neither party hereto shall have any further obligations under this Agreement except for such obligations which by their terms expressly survive the termination of this Agreement (the “Surviving Obligations”). The Earnest Money shall be allocated among the properties comprising the Property, as set forth on Schedule “C”, attached hereto and incorporated herein,

4.

CONDITIONS TO CLOSING

4.1 Seller’s Obligations. Seller shall deliver to Purchaser (at Seller’s expense), by July 5, 2012, true, correct, complete and legible copies of all of the due diligence items listed on Schedule “A” attached hereto and incorporated herein with respect to the Property (collectively, the “Due Diligence Items”).

4.1.1 Approval Period. During the period commencing on the Effective Date and expiring at 5:00 p.m. Central Time on the forty fifth (45th) day following the Effective Date (the “Approval Period”), the following matters shall be conditions precedent to Purchaser’s obligations under this Agreement:

(a) Purchaser’s being satisfied in Purchaser’s sole discretion that the Property is suitable for Purchaser’s intended use; and

(b) Purchaser’s being satisfied, in Purchaser’s sole discretion, with all of the Due Diligence Items.

Purchaser may (but shall not be obligated to) terminate this Agreement by delivering written notice of such termination to Seller at any time prior to the expiration of the Approval Period, if, in Purchaser’s sole and absolute discretion, Purchaser decides not to consummate the purchase of the Property contemplated hereby. In such event, this Agreement will terminate as of the date of such notice, and neither party shall have any further obligation hereunder except for the Surviving Obligations. If, in Purchaser’s sole and absolute discretion, Purchaser determines that it desires to consummate the purchase of the Property contemplated hereby, then Purchaser will give written notice thereof (the “Closing Notice”) to Seller, prior to the expiration of the Approval Period. In the event that Purchaser

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