Bardenwerper,Talbott 85 Roberts, pllc
ATTORNEYS AT LAW

1000 NORTH HURSTBOURNE PARKWAY,SUITE 200 • LOUISVILLE, KENTUCKY 40223•(502)426-6688• FAX(502)425-0561
WWW.BARDLAW.NET

J. Bissell Roberts
Direct dial 426-0388, ext. 128
Email; bisspll'ghiircllnw.nel

July 2, 2018

Michael J. O'Connell

Jefferson County Attorney
600 W. Main Street

Louisville, KY 40202
RE:

via hand delivery

1300 & 1306 Bardstown Road (the "Bardstown Road Properties")
Louisville Sterling, LLC ("Louisville Sterling") and
John P. Hollenbach, Sr.("John Hollenbach")

Dear County Attorney O'Connell:

I am writing this letter on behalf of my clients, John Hollenbach, and Louisville Sterling,
an LLC of which John Hollenbach is a partner, principal owner and manager. On August 7,
2015 Louisville Sterling contracted with Louisville/Jefferson County Metro Government
("Louisville Metro")to purchase the Bardstown Road Properties(Tab 1 - pictures of properties)
for $500,000.00, subject to a remediation credit of up to $75,000.00(Tab 2). The purchase price
was based upon an appraisal obtained by Louisville Metro prepared by Lin Bell & Associates,
Inc., that appraised the properties for $500,000.00(Tab 3-summary). On November 12, 2015
Louisville Metro declared the Bardstown Road Properties to be surplus property under state and
local law (Tab 4).
Initially, Louisville Sterling's plan for the properties was to restore the properties and
lease portions of the buildings to Sterling Beer Company, as the principal tenant, for operation as
a beer distillery and tap room and to lease to other mixed use tenants, as permitted in the C-2
Commercial zone. After expending hundreds of thousands of dollars for architectural,
engineering, design, environmental, legal fees, loan interest and other expenses on the planned
repurposing and renovation of the buildings for use by tenants, including Sterling Beer, the
principals of Sterling Beer abandoned the project. As a consequence, Louisville Sterling, which
had generated only $1 in income from the properties from a Louisville Metro Lease(Tab 5), was
compelled to pursue an alternative development plan.
In late 2017, a year after Louisville Sterling had purchased the properties from Louisville
Metro, Louisville Sterling was approached by Jeff Sleadd and a group ofinvestors to purchase
the properties. Eventually an agreement was reached whereby Louisville Sterling would sell the

 Bardstown Road Properties to MS Bardstown Road, LLC("MS Bardstown"), and John
Hollenbach would remain an investment partner in the new project, and would invest all of his
share of the net proceeds (approximately $250,000.00) from the sale of the Bardstown Road
Properties, into the new project. The investment was for restoration of both of the deteriorated
buildings for use as a short-term residential rental unit at 1306 Bardstown Road; a ground floor
retail business with a patio adjacent to the retail space (1300 Bardstown Road); and a boutique
mini-storage facility in both buildings, a project that involves the investment of over two million
dollars ($2,000,000.00).
Although he had never spoken with John Hollenbach about the current plans for the
Bardstown Road Properties, Metro Councilman Brandon Coan has been critical of Louisville
Sterling's sale of the properties and the proposed new plans for the properties. In articles
published by Business First and the Courier Journal (Tab 6)Councilman Coan has alleged based
on very limited information that Louisville Sterling's sale of the properties breached the "clear
legal terms of the Purchase Agreement"; that Louisville Sterling should be accountable in court
for not developing the properties as originally planned; that Louisville Sterling should disgorge
any profits from its sale of the Bardstown Road Properties; and that the taxpayers were entitled
to "restitution." Before making statements to the Courier Journal on Monday, June 18, 2018
stating that he intended to seek "restitution" for Metro Government for what he claimed was a

"clear case of unjust enrichment"', Metro Councilman Coan had never contacted representatives
of Louisville Sterling or Sterling Beer Company about any alleged concerns he had about the
sale of the properties to MS Bardstown.
In a recent conversation with a representative of Louisville Forward John Hollenbach was
informed that Councilman Coan declined to meet with him to discuss the situation, until after
Councilman Coan had received a legal opinion from the Jefferson County Attorney's office
about the legality of Louisville Sterling's sale of the Bardstown Road Properties to MS
Bardstown.

My clients have asked me to write this letter to provide your office relevant and material
facts they believe should be considered, before your office issues a legal opinion concerning
these matters.

John Hollenbach is a highly respected developer in this community with a well-earned
reputation for integrity, honesty and following through on all of his commitments for
development of real estate. Over a 30 year career he has successfully developed multiple
Business Parks and individual projects throughout Metro Louisville. These projects have helped
to create thousands ofjobs and more than a billion dollars of investment in our city. The
following projects are a few examples:

'From October 29, 2014, the date of the Bell Appraisal, until now the Dow Jones Industrial Average has grown
42.72%. Had John Hollenbach invested the purchase price and remediation costs for the Bardstown Road Properties
and the hundreds of thousands of dollars he expended for architectural, engineering, design, environmental and legal
fees on the planned repurposing and renovation of the buildings in Dow Jones Stocks that investment likely would
be worth over $999,040.00 today

 •
•
•

Partner and Project Manager of Louisville City Soccer Stadium/ Butchertown
Development District.
Master Developer of Gateway Office Park River Ridge Commerce Center(500 acre
Class A Business Park).
Partner and Managing Member of Blankenbaker Station Business Park (600 acre
Class A Business Park).
Partner and Master Developer of Oldham Reserve (1,000 acre commercial and
residential community).
Project Director of Eastpoint Business Center,(700 acre Class A Business Park.
Director of Commercial Land, NTS Corp. Blankenbaker Crossings(500 acre Class A
Business Park).

The following is a summary of key facts my clients would like your office to consider.
SUMMARY OF FACTS

Louisville Metro was the owner of 1300 Bardstown Road, which it purchased on January
5, 1995 (Tab 7)from the Louisville Ballet Company. This property had previously been
owned and used by Bellsouth Telephone Company. It is believed this building has been
vacant for many years.
Louisville Metro also owned 1306 Bardstown Road, which it acquired on October 2,
1908(Tab 8). For many years that property had been the Highlands Branch of the
Louisville Police Department. In recent years, until June 2018, it had been used and
occupied by MetroSafe.

1300 and 1306 Bardstown Road are zoned C-2 Commercial and neither property is
subject to Louisville Metro's "Plan Certain" ordinance (Tab 9 and 10).
On December 5, 2014 Lin Bell & Associates, Inc., at the request of Louisville Metro,
appraised the "fair market value" of both 1300 and 1306 Bardstown Road for
$500,000.00, as of October 29,2014(the "Bell Appraisal - Tab 3- summary). The Bell
Appraisal noted that the poor condition of the buildings, the lack of off street parking and
potential environmental issues negatively impacted the value of the properties.
Pictures of the buildings on the Bardstown Road Properties included in the Bell Appraisal
and others revealed that both buildings needed repairs and maintenance(Tab 1).
By Resolution No. Ill, Series 2015, Louisville Metro on November 12, 2015 declared
1300 and 1306 Bardstown Road to be surplus properties under Kentucky Statute and
local law. That Resolution stated in that Metro Government had set aside funds to

relocate the MetroSafe equipment. The Resolution recognized "that these properties have
value in that they are located along Bardstown Road commercial corridor in the Tyler
Park neighborhood, and could be restored to a productive use that would generate tax
revenue for the community...." It authorized the Mayor to transfer the properties.

 The principals of Sterling Beer Company made the initial contact with Louisville Metro
about their interest in developing a beer brewery and taproom in the buildings on the
Bardstown Road Properties. After they determined that both properties might be
available from Louisville Metro for their proposed use, as the major tenant, the Sterling
Beer principals contacted John Hollenbach seeking his assistance in redevelopment and
renovation of 1300 and 1306 Bardstown Road buildings.

Since 2014 John Hollenbach estimates that conservatively he has expended over 500
uncompensated hours on planning for the redevelopment of the Bardstown Road
Properties.
On December 22, 2014 Louisville Sterling was organized with John Hollenbach, as its
Manager(Tab 11).
By Purchase Agreement dated August 7, 2015 Louisville Metro agreed to sell the
Bardstown Road Properties to Louisville Sterling, for $500,000.00, subject to a credit of
up to $75,000.00 to the Louisville Sterling if environmental problems were discovered in
the Bardstown Road Properties(Tab 2 -Section 3). Three amendments to the Purchase
Contract extended the date for Closing until December 21, 2016.

Section 12 of the Purchase Agreement allowed Louisville Metro within 120 days of the
date of the Purchase Agreement to request that Louisville Sterling enter into a
Development Agreement for the Bardstown Road Properties. Louisville Metro never
requested a Development Agreement with Louisville Sterling. The Purchase Agreement
imposed no obligations on Louisville Sterling regarding restoration, renovation or
redevelopment to the buildings on the Bardstown Road Properties.
The Purchase Agreement provided no right for Louisville Metro to repurchase or
reacquire the Bardstown Road Properties after Closing.
The Purchase Agreement required Louisville Sterling to Lease the properties to Metro
Louisville for Communications Equipment after the Closing (Tab 2, Section 13). On
December 2,2016 Louisville Sterling and Louisville Metro signed a lease for $1 with the
Interior Equipment to be removed from 1306 Bardstown Road by August 1, 2017(Tab
5). Louisville Metro paid no additional rent, but remained a "hold-over tenant" in 1306
Bardstown Road through late June 2018. preventing any restoration or redevelopment
work on the buildings at 1300 and 1306 Bardstown Road from being undertaken.
On Louisville Metro's web page there is a section regarding Louisville Forward which is
the Louisville Metro's Economic Development Organization. Louisville Forward's page
on the louisvilleky.gov webpage has a section regarding Legal Agreements that lists
various types of Legal Agreements to which Louisville Metro is a party. The webpage
defines Development Agreements as "agreements between a private developer in
Louisville, which requires the developer to perform specified activities in connection with
real estate projects and obligates Louisville to provide certainfinancial or other
incentives, provided the company performs its obligations." The local properties listed as

subject to Development Agreements are: 4^*^ Street Live!; New Bridge Crossings; River

 Park Place; Michter's Distillery; Sempers City; Mohammed Ali Center; 26st Street
Rental Corp (Tab 12). An exemplar Development Agreement between Michter's
Distillery, LLC, at 801 West Main Street and Louisville Metro dated July 1, 2011is
attached (Tab 13). The Bardstown Road Properties are not subject to a Development
Agreement with Louisville Metro.
Louisville Sterling purchased 1300 and 1306 Bardstown Road from Louisville Metro for
$425,000.00 (after credits) by Deed dated December 2, 2016(Tab 14).

When Louisville Metro conveyed the Bardstown Road Properties to Louisville Sterling,
Louisville Metro imposed no Deed Restrictions on the development of the Bardstown
Road Properties, nor did Louisville Metro retain any rights regarding those properties.
No agreement with Metro Louisville was signed by Louisville Sterling or its proposed
tenant, Sterling Beer Company that guaranteed the re-development of the Bardstown
Road Properties for a Sterling Beer distillery and taproom or for any other use permitted
by the C-2 zoning classification.
When Louisville Metro conveyed the Bardstown Road Properties to Louisville Sterling it
retained no Right of First Refusal to repurchase the properties from Louisville Sterling or
retain any right to repurchase the properties if the Bardstown Road Properties were not
developed, in part, for a Sterling Beer distillery and taproom.

Sterling Beer Company acquired the brand name of"Sterling Beer," and it developed a
different version of that beer, which it began selling in March of2013. Louisville
Sterling intended to lease a large part (if not all) of the Bardstown Road Properties to a
Sterling Beer Company organized by brothers, Todd Jackson and Ken Jackson on
January 17, 2012(Tab 15). The Sterling Beer Company owned by the Jacksons had
planned to operate a Sterling Beer brewery and tap house in the Bardstown Road
Properties.
After Louisville Sterling had expended hundreds of thousands of dollars in architectural,
engineering, design, legal, loan interest expense and planning fees for constructing the
facilities required by the Sterling Beer Company,that company in early 2017 determined
that it was not financially feasible to continue with the project, and withdrew completely
from the project.

Louisville Sterling advised Louisville Metro that the Sterling Beer Company project had
fallen through and the property would have to be developed in a different manner, but,
that it still intended to repurpose and renovate the existing buildings on the Bardstown
Road Properties.
On or about October 2017, Jeff Sleadd on behalf of an investment group contacted John
Hollenbach to discuss a proposed purchase of the Bardstown Road Properties from
Louisville Sterling. During several months John Hollenbach and Jeff Sleadd negotiated
the terms of a redevelopment contract for the Bardstown Road Properties so that the
Bardstown Road Properties would be redeveloped at the cost of over two million dollars

 m

($2,000,000.00). As part of this development arrangement Louisville Sterling sold the
Bardstown Road Properties to MS Bardstown Road, LLC for $950,000.00. As part of the
redevelopment agreement John Hollenbach agreed to invest his entire share of the net
proceeds from the sale of the Bardstown Road Properties back into the MS Bardstown
project to help facilitate the renovation and restoration of the properties.
• Before the sale of the Bardstown Road Properties to MS Bardstown was consummated on
March 2, 2018(Tab 16), John Hollenbach disclosed to Louisville Metro the proposed redevelopment of the Bardstown Road Properties by MS Bardstown.

^

• As part of the proposed redevelopment MS Bardstown as owner applied with the
Louisville Metro Planning & Design Services for an Overlay District Permit in Case No.
18BROD1006(Tab 17). That application was filed on June 11, 2018 and it is believed it
is pending approval.
• On June 11, 2018 an application for a Conditional Use Permit("CUP")for "storage/short
term rental/retail" for the Bardstown Road Properties was filed with Planning & Design
Services of Louisville Metro. It includes a boutique mini-storage facility, a one-unit
short term residential rental at 1306 Bardstown Road, and a first floor retail use at 1300
Bardstown Road (Tab 18). Also filed was a Site Plan (Tab 19) and Architectural

*

renderings prepared by Architect Edward Eiche of buildings on the properties(Tab 20).
The CUP Application in Case No. 18CUP1072 is pending.
If your office writes a legal opinion about this matter or provides legal advice to the
Louisville Metro Council or any ofits members about this matter my clients, John Hollenbach,
and Louisville Sterling, request that your office consider the undisputed facts summarized above.
If you have questions or need additional information, please let me know.

^

Respectfully,
J. Bissell Roberts

_

JBR/lar

 PURCHASK ACKF.rMFNT

THIS AGREEMENT ("Agreemem") is made as of ihe last dale of execution of this

Agieeineni as set forth on the signature page ("Agreement Date"), by and between
LOdlSVlLLE/JEFFERSON COUNTY METRO GOVERNMENT,a Kentucky consolidated
local government, acting by and through LOUISVILLE FORWARD, with an office located at
444 S. ni'th Street, Suite 600, Louisville, Kentucky 40202 ("Seller"), and LOUISVILLE
STERLING, LLC. a Kentucky limited liability company with its principal address located at
4965 US Highway 42, Suite 2800, Louisville, Kentucky 40222("Buyer"),
RECITALS:

WHEREAS, the Seller owns the properties located in Louisville, Kentucky as more
pariiculaiiy described in Exhibit A attached hereto ('-Properties" ); and

WHEREAS, Buyer desires to purchase the Properties from Seller for the purposes of
Buyer and/or an alllliate ot Buyer operating a corporate headquarters, offices, brewery,
microbrewery, retail store, production facility, product test kitchen and/or tasting room, or for
other use or uses consistent with a C-2 zoning classification ("Project*'): and

WHEREAS, Seller, because the Project would create jobs, enhance the tax base of

Louisville, enhance economic development and make use of an otherwise non-productive
properly and liirther the public purposes of the Seller, is willing to sell to Buyer said Properties
in accordance with the terms and conditions ol this Agreement^ and

VVHER£.\S, Buyer desires to purchase the Properties for the purposes described in these

recitals and to construct the Project In accordance with the terms of the Development Agreement
as defined in Section 12 hereof, and in accordance with the terms and conditions of this
Agreement.
AGREEMENT:

NOW, THEREFORE, In consideration of the foregoing premises, which are

incoiporated as a part of this Agreement, the conveyance of the premises, the mutual promises,
coveitaiits and agreements hereinafter set fbnh and for other good and valuable cotrsideralion, the

mutuality, receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby
iiuree as follows:

i'ai-,' i or I-I

 Saic of Properties. In considerdtion of purchase price of the Properties, Seller
agrees to convey said Properties to Buyer pursuant to the terms and conditions contained in this
Agreement.

2.
Declaration of Surplus Proncrts'. Upon agreement of the purchase price and
fomial release tVoni the Buyer ol all conditions precedent, Seller agrees to place a resolution on
the agenda of the Legislative Council of the Louisville/Jefferson County Metro Government
requesting that the Properties be declared surplus as soon as practicable.
f-l

3.
PHrcha.se Price. The purchase price for the Properties (the "Purchase Price'')
shall be determined prior to the closing of the sale and purchase of the Properties pursuant to this
Agreement (the "Closing"). Seller has obtained an appraisal of the Properties, which values them
together at $500,000. However, Seller and Buyer agree that the Properties are in need of
substantial repairs and possible enviromnental remediation to address lead paint and asbestos-

containing materials, and that these costs payable to third-parties, as determined by Buyer and
reasonably agreed to by Seller during the Review Period, will be offset in establishing the
Purchase Price to be paid at the Closing. These factors were not fully considered in the appraisal
value. In no case shall the Purchase Price be greater than S500.000, and in no case shall tlie
Purchase Price be less than $425,000.
4.

Hold Harmless and Indemnification.

a.

Buyer shall indemnify, hold hannless, and defend Seller, its elected and

appointed officers, employees, agents and successors in interest (each as "Seller Party" and
collectively "Seller Parties"), from all claims, damages, losses and expenses including reasonable
attorneys' fees, arising out of or resulting, directly or indirectly, from the Buyer's (or Buyer's
subcontractors, if any) perlormance or breach of the Agreement, provided that such claim,
damage, loss, or expen.se is: (1) not due to a pre-exi.sting condition; (2) not attributable to

personal injury, bodily injury, sickness, death, or to injury to or de,struction of property,
including the loss of use resulting therefrom, or breach of the terms of the Agreement, due to the
acts or omissions ot Seller or its agents or subcontractors, if iuiy: and (3) not caused by the
willful misconduct of a Seller Party acting within the scope of such Seller Party\s employment.
The provi.sions of this Section shall in no vvay be limited by any financial responsibility or
insurance requirements and shall survive the terminalion of this Agreement.

b.

If any action or proceeding is taken or brought against the Seller by any

third party by rea.son of any of the foregoing acts for which the Seller is indemnified teach a

l'a"c 1 01 1-t

 "Third Parly Clainr'), Buyer shall, upon receipt of notice of such Third I^arty Claim, take

necessary and appropriate action to protect such Seller's interests with regard to such Third Parly
Claim. Bu\c.r shall, at all times, have the right to direct the detense of, including without
limitation the hirijig ot counsel, and to accept or reject any oiler to settle any such Third Party
Claim, provided that Buyer pays the costs of any such settlement, and thai Seller is not required
to admit any liability with respect to any such Third Parly Claim and that the Seller is fully
released from any such Third Party Claim.

c.

At least five (5) days prior to the initial entry on the Properties, without

limiting Buyer's indemnification obligations, Buyer shall provide evidence of an acceptable
coninieicial geneial liability occurrence based insurance policy on a primary noncontributory
basis to insure its activities on the Properties and shall name Seller as an additional insured. Such

insurance shall be ai a minimum limit ofS1,000,000 per occurrence/$2,000,000 aggregate. Buyer
shall also provide evidence of workers compensation insurance for its employees, if any, in
accordance with KRS Chapter 342. Buyer shall provide Seller with a certificate as evidence of

said insiiiance. Ihese same insuiance requirements may be applied to those provided access to
the premises as referenced in Section 5, Entiy upon Properties.

5*

Entry upon Properties. Buyer and its respective officers, employees, enuineers,

surveyors and other agents and assigns (each a "Buyer Party," and collectively the "Buyer
Parties"), shall have, and are hereby granted by Seller, the right to enter upon the Properties from
time to time upon reasonable notice with prior approval of Seller and shall have the right of
ingress and egiess ovei. tlu'ough and from the Properties, for the purpose of inspecting, testing,
making surveys, and making such other reasonable observations and inspections of the
f ropertics as aic deemed necessary or appropriate by Buyer ("Investigations"), and upon
execution ot this Agreement Seller shall provide Buyer with access to the Properties when and as
necessiiry toi Buyei to conduct all necessary due diligence. All Investigations shall be done in a

manner that causes the least possible disturbance to Seller's possession. During the course of the
Investigations, Biner Party shall not pemiit or create any unsafe or dangerous condition on the

Properties. Buyer shall compensate Seller for any damage to the Properties caused by the
Investigations if Buyer fails to close under this Agreement,

.A..s.signment of .Agreement. Buyer may not assign thi.s Agreement without the

piioi v\iii,cn consent ol .Sellei, othei than to an affiliate ot Buyer or ol anv principals of Biiver.
Repre-seiitations, Warranties and Covenants of Seller.

('•uc.) i>i" U

 a.

Seller hereby represents and vvananls to Buyer as follows, which

representations and warranties shall be automatically deemed to be restated as of the Closing
Date, and all of which shall survive the execution and the delivery of deeds (the "Deeds") by
Seller to Buyer and the recordation thereof:

i.

Seller vvill have as of the Closing Date, good, fee simple,

marketable title to the Properties, free and clear of all covenants, conditions,
restiiclions, ea.sements, liens, leases, charges, mortgages and encumbrances of
every nature, kind or character whatsoever, except for the Permitted Exceptions,

as such term is defined in Section 9 and, consistent with Section 12, Buyer may,
at its sole cost and expense, select a title insurance company ('-Title Company")to
insure the title to the Properties upon delivery of the Deeds to Buyer, which title
insurance shall be pursuant to a standard ALIA Policy (Eorm B)at standard rates,
in an luiiount equal to the lesser of the Purchase Price or the fair market value of

the Properties, and without any exceptions whatsoever, except for the Pennitted
Exceptions.

ii.
Seller is not aware of any condemnation or similar proceeding
which is pending or threatened against the Properties or any part thereof, nor is
any Seller aware of any governmental plans to appropriate or purchase the
Properties or any part thereof.

iii. Seller makes no warranties with respect to the Properties except
those specifically set out in this Agreement and Buyer shall accept the Properties
AS IS.

iv.

Seller has received no notification from any governmental agency,

authojity or in.strumentalily of any pending or threatened assessments on or

against the Properties to secure ihe cost of public improvements made or to be
made with respect to the Properties or any part thereof:

V.

This Agreement has been executed and delivered by Seller's duly

authorized representative.

vi.

Time is of the essence with regard to this .Agreement,

b.
Seller hereb>' covenants with Buyer thai, during the one (I) year period
after the execution ot this Agreement, unless Buyer is engaged in an administrative, judicial or
govemmental proceedings related to the use, zoning, development plan approval or improvement
Pace t v>t" I -}

 ol either ol the Propenies, iji which case said covenants shall remain in effect until ninety (90)
days following the unappealable end of all such proceedings. Seller shall not:

i.

Sell, grant, convey, mortgage, encumber or dispose of the

Properties;

ii.

Allow any defects, liens, adverse claims, demands or

encumbrances oi any jiature, kind or character to be asserted against the
Properties or any part thereof, other than Permitted Exceptions.
ill. Grant any easement, license or right-of-way in, other than to

c.vtcnd utility stivices to the Pioperties, to or through the Properlie.s or any pan
thereof which cannot be terminated as of the Closing Date.
iv. Create nor allow to be created, any condition, re.siriction or

covenant of any kind, character or nature whatsoever with respect to the
Piopeities except those listed as a Permiltcd E.xception in Section 9 of this
Agreement.

V.

Seek any change in the zoning of the Properties without the

Buyer's prior consent.

c.

Seller makes no warranties with respect to the Properties except those

specifically set out in this Agreement and Buyer shall accept the Properties AS IS.
8.

Environmental Condition of Properties.

a.

Seller makes no wan anties concerning the environmental condition of the

I roperties, oi the existence or nonexistence of Hazardous Materials(as hereinatiter described) in,
on or under the Properties, however Seller acknowledges tliai the Properties have been used as a

private telephone interchange, a police station and radio communications center, and, briefly, a
Ere station.

b.
Buyer shall be solely responsible for perfomiing any testing, assessments
or other examinations to determine whether Hazardous Materials arc present in, on or under the
Properties ("Environmental Testing"). If the Environmental Testing determines that

contamination of the Properties by any Hazardous Material has occurred and Buyer is required
by any local, state or lederal government agency("Agency") to remove such Hazardous Material
trom the Properties or otherwise remediate or manage such Hazardous Material ("Remedial

iVIeasuies ). the costs ol the Remedial Measures shall be the sole responsibility of Buver alter
Buyer has purchased the Properties. Seller agrees to assist Buyer in any negotiations with the
I'ime 5 of 14

 Agency concerning the leinovaK remediation or management of Hazardous Material and rurilter

agiees to use its best elforts to enable Buyer to cxpeditiousK obtain all necessary a])provals from
the Agency. As used herein, the term "Hazardous Material" jneans any hazardous or to.xic
substance, material or waste which is or becomes regulated by any applicable federal, state or
local governmemal agency or authority, including without limitation, any material or substance
which is (i) petroleum, (ii) asbestos, (ill) designated as a "hazardous substance" pursuant to
Section 31 1 of the Federal Water Pollution Control Act(33 USC Section 1317),(iv) defined as a
"hazardous waste" pursuant to Section 1004 of the Federal Resource Conservation and Recover
Act(42 use Section 6903).(v) defined as a "hazardous substance" pursuant to Section 101(14)
of the Comprehensive environmental Response Compensation and Liability Act ("CERCLA")
(42 USC Section 9601), or (vi) defined as a "pollutant" or "contaminant" pursuant to Section
101(33)ofCERCLA.

Survey; Title Commitment; Permttted Excentions. Buyer, at its sole expense,
may obtain an ALIA survey of the Properties prepared and duly cenified to Buyer by a licensed
land surveyor. Buyer may obtain, at its sole cost and expense, an owner's title insurance

commitment with respect to the Properties. The following items shall be deemed to be permitted
title exceptions(hereinafter referred to as the "Permitted Exceptions"):

a.

All ad valorem property taxes and assessments on the Properties, if any,

not yet due and payable;

b.
.Matters shown on a survey which would not materially and adversely
afiect Buyer's use and enjoyment of the Properties for the purpose intended by the Project.
c.

Easements, restrictions and stipulations that appeiir of public record as of

the date of this Agreement.

d.

Such other matters acceptable to Buyer.

Buyer's and Seller' Closing and Other Obligations,

Selicr^s Obligations. .At the Closing, Seller shall deliver to Buyer the
following with respect to the Properties:

1.

Special vvananty deeds, conveying an unencumbered, good, marketable,

fee simple title to the Properties to Buyer, without any e.xceptions, except for the
Permitted Exceptions (the "Deeds'). The Deeds shall be in proper form for recording,
duly executed by Seller, with the signature of Seller duly acknowledged in the
appropriate place.

Pa«c() ol" 14

 ii.

An AHidavit, executed by Seller iincler the penalty of perjury, which

contplics with Section 1445 ot the Internal Revenue Code ot 1986. as amended, and the
regulations promulgated thereunder.

iii.

.An atfidavit ot Seller in a form reiusonably acceptable to Buyer sufficient

to enable Buyei s title company to insure over any exception for mechanics liens or
parlies in possession.

i\.
Ihe Development Agreement, unless waived by Seller, refeiTed to in
Section 12 and the Lease reteiTed to in Section 13 of this Agreement executed on behalf
of Seller.

Buyer's Obligations. At the Closing, Buyer shall deliver to Seller:
i.

I he Purchase Price as specified in Section 5.

ii.

The DeveJopment Agreement, unless waived by Seller, referred to in

.Section 12 and the Lease referred to in Section 13 of this Agreement executed by the
Buyer.

iii. If Buyer is other than a natural person, a copy, certified by a duly
authoiized lepiesentative of Buyer, of resolutions ol Buyer authorizing the acquisition of
the Properties pursuant to this .Agreement and the Development Agreement.
IT

Conditions to Closing. No parly shall be obligated to close on the sale of the

Properties unless the following conditions have been satisfied or waived by the applicable party,
as applicable:

a.

Seller and Buyer shall have complied with their respective obligations

pursuant to Section 10 of this Agreement; and

b.
Buyer and Seller shall have executed a Development Agreement as
provided in Section 12 and a Lease as provided in Section 13 of this Agreement.
c.
Buyer shall have concluded that all desirable environmental due diligence
ha.s been completed to Buyer's satisfaction. Buyer is otherwise fully satisfied with the condition
of the Properties and the anticipated costs ot the Project, and Buyer has received all non-

appealable governmental permits and approvals for the Project desired by Buyer: and
d.
Buyei shall have concluded that adequate utility services and parking can
be secured for the Project.

e.
The Legislative Council of the Loui.'j\ille'Jetlerson County Metro
Ciovernment shall have approved d resolution declaring the Properties to be surplus.
l';ifee7ori-4

 I he C losing shall be held ai the olTices of Buyer's counsel, or at another location in Metro

l.ouisville nuilually acceptable to the parties, on a date (the "Closing Date"') designated b) Buyer
in writing to Seller and falling within sixty (60) days after Buyer has satistied or waived the
conditions precedent set out above. Buyer may terminate this Agreement upon written notice to
Seller upon failure olany ofthe above conditions precedent, or within one (1) year of the date of

this Agreement should Buyer otherwise deteimine that the Properties are not acceptable to Buyer
for any reason.

12.

Dcvcioomcnt Agreement. Within one-hundred-ivveniy (120) days of the date of

this .Agreement, if Seller wishes to enter into a Development Agreement, Seller shall deliver to
Buyer for review a draft of a development agreement which will establish the terms and

conditions for the development of the Properties and the construction of the Project
("Development .-Agreement"), the mutually agreed form of which Development Agreement will
be entered into by Buyer and Seller at or before the Closing unless waived by Seller. .At a
minimum, the Development .Agreement shall contain, in pertinent part, the following provisions:
a.

A description, in reasonable detail, of the Project which shall include, but

not be limited to:

i.

.A conceptual master plan for the entire site.

it.

A detailed phasing plan for construction of the Project.

iii.

A detailed budget for the Project.

iv.

A detailed financial plan for funding the Project, including equity, debt,

proposed city contribution, if any, and other sources offunds.

b.

A requirement that Buyer, prior to commencing construction, submit

preliminary plans for the Project to Develop Louisville, an agency of the Louisville/JelTerson

County Metro OovermTient ("DL") for approval, including design review and approvaf in
accordance with its customary requirements, which approval DL will process in a manner
consistent with the schedule for construction of the Project. In no case shall DL"s approval be
unreasonably withheld, delayed or conditioned.

c.

A pledge of nondiscrimination in hiring, construction, occupancy and use

of the Project.

ease 8 or 14

 d.
A pledge by Buyer thai it shall use its best commercially reasonable
efforts to have its contractor constructing the Project to utilize 20% minority, 5% female and '/;%
disabled subcontractors and suppliers.

e.

A requirement that Buyer demonstrate to Seller s reasonable satisfaction

that the ihpject's pre-dcvelopment approvals, including any approval required by the Louisville
Metro Planning Commission or Board of Zoning Adjustment, Bardstovvn Road/Ba.xter Avenue

Corridoi De\elopnienl Review Overlay Board, or the Kentucky Department of Environmental

Protection, will be underway within one (I) year after the Closing Date, subject to automatic
e.xleiision for any appeals or challenges of such approvals. In the event the Project fails to
commence within one year after the Closing Date, then Buyer shall, upon notice from Seller
given within one hundred eighty (180) days following thereafter, be obligated to re-convey the
Properties to Seller for an amount equal to the Purchase Price. 'Ihe Project will be deemed to
have commenced upon the stail of any environmental remediation, demolition, repairs or
construction on either of the Propertietj, or the expenditure of jiiateriai funds by Buyer with
respect thereto.

t.

A provision that if Buyer fails to complete Ihe Project to the extent that the

Project, or any other business conducted on either of the Properties, has not been opened for
business iti at least one of the Properties within five (5) years after the Closing Date, then Buyer
shall, upon notice from Seller given within one hundred eighty (180) days following thereafter,
be obligated to re-convey the Propenies to Seller for an amount equal to the Purchase Price.'
This language shall survive the transfer of the Properties to Seller regardless of whether a
Development .Agreement is executed.

g.

Such other provisions usually and customarily contained in development

agreements of the Seller.

13.

Lease. Seller and Buyer acknowledge that Seller maintains critical

commiinicaiions equipment I the "Equipment .Array") at the Propenies, a portion of which
occupies interior building space ("interior Equipment"), and a portion of which is contained in

an exterior compound that houses equipment and a large antenna (the "Exterior Equipment").
Seller anticipates an ongoing need to maintain the Equipment Array at the Properties. Seller and
Buyer agree that, prior to the Closing Date, a Lease will be e.xecuted to allow Seller to maintain

the Inieriur Equipment until such time as it can be consolidated with the Exterior Equipment, and

Paecy.V 14

 then to allow ihe Bxterior HquipmeiU to remain at the Properties. Such Lease shall contain in
l^nineni pan the following provisions:

a.

A schedule for the consolidation of the Interior Equipment with the

l:xternal Equipment, that gives Seller no less than three (3) years to remove the Interior
Hquipincnt.

I).

A term of 99 years for the use, repair and maintenance of the External

Equipment at the Properties.

c.

A provision that no use of the Properties shall interfere with Seller's use.

repair and maintenance of the Equipment during the 99-year term; provided, that the use of the
Properties and operation of any businesses thereon, including, without limitation, the Project, in

accordance with applicable laws, rules and regulations, including zoning regulations, and the
terms of the L.ease which shall outline provisions for maintaining access to the Equipment which
access will not unreasonably intcrlere with the Buyer's use of the Properties for ail proper
purposes, will not in any way be deemed to interfere with Seller's use, repair and maintenance of
the Equipment.
(I.

A rental rate of SI for the entire term of the Lease.

c.
Provisions Ibr access, maintenance and repairs to the Exterior Equipment,
property maintenance and security, none of which will unreasonably or materially interfere with
the use of the Properties for the Project.

f.

Such other provisions usually and customarily contained in leases of the

g.

A provision tliat stales that, pursuant to Ordinance No. 11, Series 2003, the

Seller.

Louisville/Jefferson County Metro Government is self-insured for all properly asserted General
Liability claims brought against it to which the Louisville/Jefferson County Metro Government
does not otherwise have a legal defense. In addition, the Louisville./Jefferson County Metro
Government agrees to keep in full force and effect Excess Self Insurance coverage for all
properly asserted claims brought against it to which the Louisville/JeiTerson County Vieiro

Government does not otherwise have a legal defense covering Bodily Injury: Properly Damage
and Personal injurv Liability under the Louisville .Area Governmental Self Insurance I rust; as

long as such coverage is a\ailable. The Limit of Liability provided by such Excess coverage
shall be at least S5.00(),U00 per Occurrence under a Combined Single Limit format. Limits of
liability shall be reviewed and reassessed every 20 vears based on Metro's liability protections

PIIJC 10 oi 14

 a\ ailuble at that time. 1 he Louisville/Jetlcrson County Metro Government agrees to provide
ikiyer with a Certillcatc of Self Insurance from the Louisville Area Governmental Self Insurance

Trust, if requested. The Trust Bylaws do not allow including additional insureds on Members
co\ erages. however. Broad Form Contractual Liability coverages are provided.
Miscellaneous.

Notices. All notices., elections, consents, requests, demands and other

communications hereimder shall be in writing and shall be personally delivered or .sent by
e.xpress courier serv ice or by first class United Slates mail, postage prepaid, addressed to the

parties as follows, or by lacsimile to the phone numbers indicated (or to such other person or
place or facsimile of which either party hereto shall have given written notice to the other):

if 10 Buyer:

c/o Jolin Hollenbach
Mollenbach-Oakley, LLC
PC Bo.x 7368

Louisville, KY 40257
.502-253-1200

johmj^hollenbach-oakley.com
Copy to:

Greg Compton
Middleton Reullinger
4965 US Highway 42,.Suite 2800
Louisville, KY 40222
502-625-2862

gcompton@niiddre ut.com
if to Seller:

Louisville Forward

444 South Fifth Street. Suite 600

Louisville, Kentucky 40202
502.574.4140

Atln: Deputy Chief

Copy to:

Jefferson County Attorney
531 Court Place, Suite 900

Louisville, Kentucky 40202
Ann: Edward S. Carle
502.574-3348

.All such notices, elections, requests, demands and other communications shall be

deemed to have been given when actually delivered or two (2) business days after havina been

I'aae 11 ,)j 11

 deposited in the linited Stales mails in accordance with the foregoing, except that iacsimiles
shall be deemed given on the date received by die recipient.

bBinding Agreement This Agreement shall lie binding upon and shall
inure to the benellt of the parties hereto and their respective permitted successors and iis.signs.

Efforts ill Dealing with Governmental Agencic.s. Seller approves of the
use of the Properties for the Project, and agrees to publicly express support for the Project and to
use reasonable etToils to assist Buyer in coordinating the work of various goveininental entities

and utilities with respect to servicing and peiTnitting the development and use of the Properties
for the Project.

d.

AHthori'/.ation of Buyer and Seller. Fach representative of Buyer

executing this .Agreement hereby represents and warrants to Seller, and each representative of
Seller executing this Agreement hereby represents and warrants to Buyer, that they each,
respectively, have been duly authorized and directed to execute and deliver this Agreement.
e.
Entire Agreement. This Agreement constitutes the entire agreement of
the parlies hereto penaining to its subject matter, and supersedes all prior or contemporaneous
agreements, undertakings and understandings of the parties in connection with the subject matter
hereof.

f.

Cioverning Law. This Agreement has been made, delivered and is

intended to be performed in the Commonwealth of Kentucky and shall be construed and

enforced in accordance with the laws of such Commonwealth. If any provision of this
Agreement or the application thereof to any person or in any circumstance shall be invalid or

unenforceable to any extent, the remainder of this Agreement and the applicatioji of such
provision to other persons or in other circumstances siiall not be affected thereby and shall be
enforced to the greatest extent permitted by law.
g.

Headings. In the event of any inconsistency between the section headings

and captions in this .Agreement and the provisions hereof, the provisions shall control.
h.

Coinmission.s. Seller and Buyer hereby represent and wan-ant that there

are no commissiojis or brokerage fees now due or hereafter to become due in connection with the

sale of the Properties to liuyer. Buyer and Seller shall each indemnify and hold the other

harmle.ss from and again.st any and all claims, liabilities, costs and expenses, including, wiihout
limitation, reasonable attorney's fees, incurred b\ the other as a result of any claims that may be

hu'v: 12.>1-14

 made against the other by any person claiming a commission, brokerage fee or other
compensation from the oilier in consequence of the transaction evidenced by this Agreement.

iliiterprctnlion. No provision ol this Agreejnent shall be construed against
or interpreted to the disadvantage of either Buyer or Seller by any coiiri or other governmental or
judicial authority b)' reason ol such parly having or deemed to have slinctured or dictated such
provision.

f*r

I'aae 13 i»i" 14

 IN WITNESS WHEREOF, the duly authorized representatives of the Seller and the
Buyer have executed this Agreement.
SELLER:

Louisville/Jefferson

County

Government

Dated:

ihji

Bv:

Greg Fischer, Mayor

BUYER:

Louisville Sterling, LLC

Dated:

Title

Approved as to form:
Miciiael J. O'Connell

Jefferson County Attorney
BY:

Assiajgfnt Jefferson County Attorney
53l^ouit Place
Suite 900
Louisville. KY 40202

(502)574-3348

f^ase 14 of 14

Metro

 EmST AMENDMENT TO PURCHASE AGREEMENT

THIS FIRST AMENDMENT TO PURCHASE AGREEMENT ("Amendmeait") is

made as of die first date of execution of this Amendment as set forth on the signature page
C'Agreement Date"), by and between LODISVILLE/JEFFERSON COUNTY METRO

GOVERNMENT, a KentuclQr consolidated local government, acting by and through ite
DEPARTMENT OF ECONOMIC DEVELOPMENT,with an office located at 444 S. Fifth

Street, Suite 600, Louisville, Kentucky 40202 ("Seller**), and LOUISVILLE STERLING,
LLC, a Kentucky limited liability company with its principal address located at 4965 US
Highway 42,Suite 2800,Louisville, Kentucky 40222("Buyer**).
RECITALS:

WHEREAS,Seller and Buyer entered into a Purchase Agreement dated August 7,2015
(the "Purchase Agreemenf*) for the sale of certain property located in Louisville, as more
particularly described in the Purchase Agreement,and

WHEREAS, and said Purchase Agreement will terminate on August 7, 2016 unless
Seller and Buyer agree to amend it in writing; and

WHEREAS,Seller and Buyer agree that the Purchase Agreement should be extended to
allow Buyer additional time to complete certain due diligence;
NOW,THEREFORE,the parties hereto agree as ffiUows.
AGREEMENT;

1. The date applicable to Section 7.b. of the Purchase Agreement shall be extended to
October 31,2016.

2. The date applicable to Section 11 of the Purchase Agreement shall be extended to
October 31,2016,

3. The Purchase Agreement is hereby extended to October 31,2016.

 IN WITNESS WHEREOF, the duly authori2Bd representatives of the Seller and the
Buyer have executed this Amendment
SELLER:

Loiiisville/Jeifferson County Metro
Government

Bated: ?/ 5"/

By:

Greg Fischer, Mayor

BUYER:

Looisvi^fTSterling,LLC
Bated:

Iti •i'
Approved as to form:
Michael J. O'Coimell

Jeflferson Comity Attorney
By:

Assii^mt County Attorn^
531 CourtPlace, Suite 900
Louisville,KY 40202
(502)574-3348

 SECOND AMENDMENT TO PURCHASE AGREEMENT

THIS SECOND AMENDMENT TO PURCHASE AGREEMENT ("Amendment") is

made as ot the llrst date ot execution of this Amendment as set forth on the sisnature page
("Agreement Date"), by and between LOUISVILLE/JEFFERSON COUNTY METRO

GOVERNMENT, a Kentucky consolidated local government, acting by and through its
DEPARTMENT OF ECONOMIC DEVELOPMENT, with an office located at 444 S. Fifth

Street, Suite 600, Louisville. Kentucky 40202 C^Sellei"), and LOUISVILLE STERLING,
LLC, a Kentucky limited liability company with its principal address located at 4965 US
Highway 42, Suite 2800. L.ouisville, Kentucky 40222("Buyei").

RECITALS:

WHEREAS, Seller and Buyer entered into a Purchase Agreement dated August 7, 2015,
as amended by that First Amendment to Purchase Agreement dated August 7. 2016 (the

''Purchase Agreement")for the sale of certain property located in Louisville, as more particularly
described in the Purchase Agreement, and

WHEREAS, and said Purchase Agreement will terminate on October 31, 2016 unless
Seller and Buyer agree to amend it in writing; and

WHEREAS, Seller and Buyer agree that the Purchase Agreement should be extended to
allow Buyer additional time to complete certain due diligence;
NOW,THEREFORE,the parties hereto agree as follows.

AGREEMENT:

1. The dale applicable to Section 7.b. of the Purchase Agreement shall be extended to
November 30, 2016.

2. The date applicable to Section 11 of the Purchase Agreement shall be extended to
November 30, 2016.

3. 1 he Purcha.se .Xgreemcnt is hereby extended to November 30, 2016.

 IN WITNESS WHEREOF, the duly authorized representatives of the Seller and the
Buyer have executed this Amendment.
SELLER:

Louisville/Jefferson County Metro
Government
Dated:

ByGreg Fischer, Mayor

BUYER:
Louisville

Dated: jP
Title:

Approved as to form:
Michael J. O'Coimell

Jefferson County Attorney
By:
Assistant County Attorney
531 Court Place, Suite 900
Louisville, KY 40202
(502)574-3348

 THIRP AMENDMENT TO PURCHASE AGREEMENT

TfflS THIRD AMENDMENT TO PURCHASE AGREEMENT ("Amendment") is
made as of the first date of execution of this Amendment as set forth on the signature page
("Agreement Date"), by and between LOUISVILLE/JEFFERSON COUNTY METRO

GOVERNMENT, a Kentucky consolidated local government, acting by and throu^ its
DEPARTMENT OF ECONOMIC DEVELOPMENT, with an office located at 444 S. Fifth

Street, Suite 600, Louisville, Kentucky 40202 ("Seller"), and LOUISVILLE STERLING,
LLC, a Kentucky limited liability company with its principal address located at 4965 US
Highway 42, Suite 2800, Louisville, Kentucky 40222("Buyer").

RECITALS:

WHEREAS,Seller and Buyer entered into a Purchase Agreement dated August 7, 2015,
as amended by that First Amendment to Purchase Agreement dated August 7, 2016 and that

Second Amendment to Purchase Agreement dated October 31, 2016 (collectively, the 'Turchase

Agreement")for the sale of certain property located in Louisville, as more particularly described
in the Purchase Agreement,and

WHEREAS,and said Purchase Agreement will terminate on November 30, 2016 unless
Seller and Buyer agree to amend it in writing; and
WHEREAS, Seller and Buyer agree that the Purchase Agreement should be extended to

allow Buyer additional time to complete certain due diligence;

NOW,THEREFORE,the parties hereto agree as follows.

AGREEMENT:

1. The date applicable to Section 7.b. of the Purchase Agreement shall be extended to
December 21,2016.

2. The date applicable to Section 11 of the Purchase Agreement shall be extended to
December 21,2016.

3. The Purchase Agreement is hereby extended to December 21, 2016.

 EV WITNESS WHEREOF, the duly authorized representatives of the Seller and the
Buyer have executed this Amendment.
SELLER:

LouisyiUe/Jefirerson County Metro
Government
Dated

■. jLfMllL

By:

Greg Fischer, Mayor

BUYER:

Louisville Sterling, LLC
Dated:

By:
Title:

Approved as to form:
Michael J. O'Connell

Jelferson County Attorney

By:
Assistant County Attorney
531 Court Place, Suite 900
Louisville, KY 40202
(502) 574-3348

/