PURCHASE AND SALE AGREEMENT
AND ESCROW INSTRUCTIONS
This Purchase and Sale Agreement and Escrow Instructions ("Agreement") is
made and effective as of August 8, 2003 ("Effective Date"), by and between
Valence Technology Nevada, Inc., a Nevada corporation ("Seller") and Mars
Partners, a Texas limited partnership or ASSIGNS ("Buyer") and First American
Title Company of Nevada, 0000 Xxxxxx Xxxxxx Xxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxx
00000 Attn: Xxxxx Xxxxxx ("Escrow Holder") based on the following:
R E C I T A L S:
A. Seller owns that certain improved real property, fixtures and tangible
and intangible personal property comprising the Property (collectively, as more
fully described in Paragraph 1, the "Property") located in the City of
Xxxxxxxxx, State of Nevada, known as 000 Xxxxxxxxx Xxx (Assessor's Parcel Number
179-34-104-001); and
B. Seller desires to sell and Buyer desires to purchase the Property on the
terms and conditions set forth herein; and
C. At Close of Escrow (as defined herein), Buyer and Seller will enter into
a Lease Agreement whereby Buyer, as lessor, will lease to Seller, as lessee, the
Property.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and in the other documents referred to herein relating to the
purchase and sale of the Property, and other valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Seller and Buyer agree as
follows:
1. PURCHASE AND SALE OF PROPERTY. In consideration of the Purchase Price
(hereinafter defined in Paragraph 2) and subject to the terms and conditions
hereinafter set forth, Seller shall sell to Buyer, and Buyer shall purchase from
Seller, the following property (collectively, the "Property") as follows:
(a) The real property located in Henderson County, Nevada, being more
fully described on EXHIBIT "A" attached hereto and made a part hereof for all
purposes (the "Land"), together with all and singular the rights and
appurtenances pertaining to the Land, including, without limitation, any and all
mineral interests and riparian rights, adjacent roads, streets, alleys,
easements, strips and gores, and rights-of-way to, from or adjacent to the Land,
all rights of ingress and egress thereto (collectively, the "Appurtenant
Rights");
(b) Any and all buildings, structures and improvements situated,
erected or constructed upon the Land (collectively, the "Improvements");
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(c) Any and all mechanical systems and fixtures placed or installed on
or about the Land or the Improvements and used as a part of or in connection
with the Property, including, without limitation, de-humidifiers and HVAC
equipment associated with "clean" and "dry" rooms, signs, carpeting, all
heating, lighting, plumbing, water, sewer, ventilating, exhaust, electrical,
gas, refrigeration, air-conditioning, fire protection, communications (excluding
Seller's the telephone system), security and life/safety fixtures, equipment and
systems; all water heaters, furnaces, heating controls, motors and boiler
pressure systems and equipment; all incinerating, disposal, cleaning,
maintenance, janitorial and landscaping equipment; all fuels and all appliances;
and all existing surveys and blueprints, as all of the foregoing may be located
in, on, about or used in connection with the Land or the Improvements; but only
to the extent such items are owned by Seller, are in Seller's possession or
control, and are transferable (collectively, the "Personal Property");
(d) All right, title and interest of Seller, if any, in and to (i) any
and all assignable warranties, guarantees and bonds, express or implied (the
"Warranties and Guaranties") issued to Seller in connection with the Land,
Improvements or the Personal Property; and (ii) all certificates, permits
(excluding any and all air pollution control permits issued to Seller),
licenses, authorizations and approvals relating or pertaining to the Land,
Improvements and Personal Property, to the extent the same are assignable
(collectively, the "Permits"); to the extent same are transferable
(collectively, the "Intangibles").
2. PURCHASE PRICE. The purchase price for the Property is Two Million Seven
Hundred Fifty Thousand and no/100ths Dollars ($2,750,000.00) ("Purchase Price").
The Purchase Price shall be paid as follows:
(a) DEPOSIT. Within one (1) calendar day following the Effective Date,
Buyer shall deposit with Escrow Holder the sum of Four Hundred Thousand and
no/100ths Dollars ($400,000.00), which Escrow Holder shall hold in an
interest-bearing account, with all interest credited to Buyer (the $400,000.00
and accrued interest are collectively, the "Deposit"). Unless this Agreement is
terminated as herein provided, the Deposit shall be applied to the Purchase
Price at the Close of Escrow.
(b) PURCHASE PRICE BALANCE. On or before the Closing Date (as defined
in Section 3(b) hereof), Buyer shall deposit into Escrow, in immediately
available funds, the balance of the Purchase Price ("Purchase Price Balance"),
together with Buyer's Closing Costs (as defined in Section 12), net of any
interest accrued on the Deposit for the Close of Escrow of the Property.
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3. ESCROW.
(a) ESCROW INSTRUCTIONS. The purchase and sale of the Property shall
be consummated through an escrow (the "Escrow") to be established at the offices
of Escrow Holder. Within two (2) days following the Effective Date, the Seller
and Buyer agree to open an Escrow and deliver to Escrow Holder a fully executed
copy of this Agreement, which shall constitute Escrow Holder's instructions.
Seller and Buyer agree to execute and deliver to Escrow Holder such additional
and supplemental instructions as Escrow Holder may require in order to clarify
Escrow Holder's duties under this Agreement; provided, however, that in the
event of any conflict or inconsistency between this Agreement and any
instructions delivered to Escrow Holder, the terms of this Agreement shall
govern the duties of Escrow Holder and the rights and obligations of Seller and
Buyer.
(b) DEFINITION OF CLOSE OF ESCROW. For purposes of this Agreement, the
term "Close of Escrow" with respect to the Property shall mean the time when
Escrow Holder shall have recorded for the Property all of the instruments to be
recorded as set forth in Section 10(a) below.
(c) CLOSE OF ESCROW FOR PROPERTY. Unless the parties otherwise
mutually agree in writing, the Close of Escrow for the Property (the "Closing
Date") shall occur on or before September 20, 2003.
4. CONDITION OF TITLE.
(a) PERMITTED EXCEPTIONS. Seller shall convey to Buyer good and
marketable fee simple title to the Land subject only to the Permitted
Exceptions.
(b) TITLE INSURANCE POLICY. At Close of Escrow, and as a condition
thereto, Escrow Holder shall cause to be issued to Buyer an ALTA owner's policy
of title insurance (the "Title Policy") as to the Land, with policy coverage in
the amount of the Purchase Price, subject only to the Permitted Exceptions.
5. BUYER'S CONTINGENCIES.
(a) TITLE CONTINGENCY. Within ten (10) days following the Effective
Date of this Agreement, Seller shall cause to be delivered to Buyer a
preliminary title report on the Property ("Title Report"), together with copies
of all exceptions thereon and a copy of Seller's existing as-built Survey
(herein so called). Buyer shall have fifteen (15) days after receipt of the
Title Report, exception documents and the Survey (the "Objection Period") in
which to approve or disapprove of or object to, any items or matters whether or
not disclosed therein. If, during the Objection Period, Buyer shall fail to give
written notice to Seller of any such item(s) or matter(s) to which Buyer
objects, Buyer shall have waived its rights to object to any such items or
matters. Those items or matters to which Buyer has not objected (or waived, as
hereinafter provided) shall be referred to individually as a "Permitted
Exception" and collectively as the "Permitted Exceptions." If Buyer shall object
to any such items or matters during such Objection Period, then Seller, during
the ten (10) day period (the "Cure Period") immediately thereafter may (a) cure
or correct such objections to
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Buyer's reasonable satisfaction, but without any obligation to do so (save and
except any liens encumbering the Property, which Seller shall cause to be
released, both in fact and of record, prior to or at Closing whether or not
Buyer objects to same hereunder), or (b) deliver written notice (the "Cure
Response") to Buyer as to which objections Seller will and/or will not cure
prior to or at Closing. If Seller shall fail during the Cure Period to cure or
correct any of Buyer's objections or to commit to do so in the written Cure
Response, then Buyer may, at any time prior to the period expiring on the later
to occur of (i) ten (10) days after the expiration of the Cure Period, or (ii)
the expiration of the inspection contingencies set forth in subparagraph (b),
elect to terminate this Agreement by delivering written notice thereof to
Seller, whereupon the Deposit shall be returned to Buyer, and, upon such return,
Buyer and Seller shall have no further obligations hereunder. In the event that
Buyer does not timely elect to terminate this Agreement in accordance with the
previous sentence, each item or matter to which Buyer has objected and which
Seller has not cured or committed in writing to cure at or prior to Closing Date
shall be waived by Buyer and shall constitute an additional Permitted Exception.
This contingency is for the benefit of Buyer and may, therefore, be waived in
part or all by Buyer.
(b) Purchaser may object to (i) new matters appearing on any update to
the Survey and (ii) to lien matters pertaining to Seller, that appear prior to
Closing on any revised Commitment (an "Intervening Matter"), and if Seller fails
or refuses to cure or commit to cure such Intervening Matter in writing within
three (3) business days of Seller's receipt of Purchaser's written objection to
same, then Purchaser may elect to terminate this Contract by delivering written
notice thereof to Seller, whereupon all of the Xxxxxxx Money shall be returned
to Purchaser and the parties hereto shall have no further rights, obligations or
liabilities one to the other hereunder. In the event that Purchaser does not
timely elect to terminate this Contract in accordance with the immediately
preceding sentence, the Intervening Matter to which Purchaser has objected and
which Seller has not cured or committed in writing to cure shall be waived by
Purchaser and shall constitute an additional Permitted Exception. For purposes
of cure of an Intervening Matter, the word "cure" shall mean, that such
Intervening Matter shall not appear as an exception in the Deed (defined in
Paragraph 9 below) or in the Title Policy, whether or not such Intervening
Matter is actually released.
(c) INSPECTION CONTINGENCY.
(i) ENVIRONMENTAL DOCUMENTS. Within ten (10) days after the
Effective Date, Seller will provide to Buyer a Phase I Environmental Survey and
any other environmental reports and tests in Seller's possession or under
Seller's control ("Environmental Documents").
(ii) ENVIRONMENTAL REVIEW. Buyer shall have thirty-five (35) days
following the Effective Date to review the Environmental Documents and to notify
Seller in writing whether Buyer disapproves the same. If Buyer fails to
disapprove the same, this contingency shall be deemed satisfied and removed. If
Buyer notifies Seller of its disapproval of any item within such 35 day period
and Seller does not agree to cure Buyer's objection within ten (10) days after
receipt of such disapproval ("Seller's Cure Period") then Buyer may elect to
waive such disapproval or terminate this Agreement by so notifying
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Seller in writing within five (5) days after the expiration of Seller's Cure
Period. If Buyer elects to terminate this Agreement, the Deposit shall be
returned to Buyer, and, upon such return, Buyer and Seller shall have no further
obligations hereunder. This contingency is for the benefit of Buyer and may,
therefore, be waived in whole or in part by Buyer.
(iii) BUYER'S ACCESS/INSPECTION RIGHTS. Seller warrants that
Buyer and its agents will have access to the Property, upon reasonable notice
from Buyer, for the purpose of conducting a physical inspection of the Property.
Buyer shall have thirty-five (35) days following the Effective Date to inspect
all physical conditions of the Property, including but not limited to all
improvements, roof, structural and soils thereon, and to notify Seller in
writing whether Buyer disapproves or accepts the same. If Buyer notifies Seller
of its disapproval of any item within such thirty-five (35) day period and
Seller does not agree to cure Buyer's objection within Seller's Cure Period,
then Buyer may elect to waive such disapproval and accept the Property or
terminate this Agreement by so notifying Seller within five (5) days after the
expiration of Seller's Cure Period set forth in subparagraph (ii) above. If
Buyer elects to terminate this Agreement or fails to deliver written notice of
its acceptance within said five (5) day period, this Agreement shall
automatically terminate, the Deposit shall be returned to Buyer, and, upon such
return, Buyer and Seller shall have no further obligations hereunder.
6. BUYER'S CONDITIONS PRECEDENT. Buyer's obligations hereunder shall be
expressly conditioned upon the occurrence of, as conditions precedent to Buyer's
obligation to proceed with close of Escrow, the following conditions precedent
("Buyer's Conditions Precedent"):
(a) TITLE POLICY COMMITMENT. Escrow Holder's commitment to issue the
Title Policy at the Close of Escrow, subject only to the Permitted Exceptions;
(b) ACCURACY OF SELLER'S REPRESENTATIONS AND WARRANTIES. Seller's
representations and warranties in this Agreement being correct as of the date of
this Agreement and as of the Close of Escrow in all material respects;
(c) NO CHANGES TO CONDITION OF PROPERTY. No material change to the
Property shall have occurred after the date of this Agreement and prior to the
Close of Escrow without the prior written consent of Buyer, except as may be
specifically provided for herein; and
(d) SELLER'S OBLIGATIONS. Seller performing of all of the obligations
it is required to perform pursuant to this Agreement.
The Buyer's Conditions Precedent are for the benefit of Buyer and may be waived
in whole or in part by Buyer, provided Buyer's waiver shall in no way reduce the
Purchase Price. In the event any Buyer's Conditions Precedent do not occur and
Buyer does not waive the same in writing, then the Deposit shall be returned to
Buyer and, upon such return, neither party shall have any further obligations
hereunder.
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7. SELLER'S CONDITIONS PRECEDENT. Seller's obligations hereunder shall be
expressly conditioned upon the occurrence of, as conditions precedent to
Seller's obligation to proceed with close of Escrow, the following conditions
precedent ("Seller's Conditions Precedent"):
(a) LEASE AGREEMENT. The execution and delivery by Buyer into Escrow
of a Lease Agreement between Buyer, as Lessor and Seller, as Lessee, in
substantially the form attached hereto as EXHIBIT "B" ("Lease Agreement").
(b) ACCURACY OF BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer's
representations and warranties in this Agreement being correct as of the date of
this Agreement and as of the Close of Escrow in all material respects.
(c) BUYER'S OBLIGATIONS. Buyer performing all of the obligations it is
required to perform pursuant to this Agreement.
The Seller's Conditions Precedent are for the benefit of Seller and may be
waived in whole or in part by Seller, provided Seller's waiver shall in no way
reduce the Purchase Price. In the event that any of Seller's Conditions
Precedent do not occur and Seller does not waive the same in writing, then the
Deposit shall be delivered to Seller and, upon such delivery, neither party
shall have any further obligations hereunder.
8. BUYER'S DELIVERIES. Buyer shall deliver into Escrow, the following
described funds and documents:
(a) FUNDS. Immediately available funds in the amount of the Purchase
Price Balance, at least one (1) business day prior to the applicable Closing
Date.
(b) LEASE AGREEMENT. The Lease Agreement.
(c) ADDITIONAL DOCUMENTS. Such other documents as may reasonably be
required to complete the Closing.
In addition to all other conditions precedent to Close of Escrow set forth in
this Agreement, the above-described deliveries by Buyer and the absence of a
Buyer Event of Default (as defined in Section 15(a) hereof) shall constitute
conditions precedent to the obligation of Seller to close the Escrow, and may be
waived only by a written waiver executed by Seller and delivered to Escrow
Holder.
9. SELLER'S DELIVERIES. Seller shall deliver into the Escrow on or before
the Closing Date, the following:
(a) THE DEED. A grant, bargain and sale deed in form acceptable to
Buyer (the "Deed"), executed by Seller (or its successor in title) and
acknowledged, conveying title to the Property to Buyer.
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(b) SELLER'S IRS SECTION 1445 AFFIDAVIT. An affidavit executed in
satisfaction of the requirements of Section 1445 of the United States Internal
Revenue Code.
(c) SELLER'S CHARGES. If the funds deposited with Escrow Holder by
Buyer are insufficient to (i) discharge all record encumbrances other than those
which are Permitted Exceptions and (ii) pay the charges to Seller under Section
11 of this Agreement entitled "Prorations, Credits and Costs", Seller shall
deliver to Escrow Holder sufficient funds and instruments to discharge and pay
such encumbrances and charges.
(d) ADDITIONAL DOCUMENTS. Such other documents as may reasonably be
required to complete the Closing.
In addition to all other conditions precedent to Close of Escrow set forth in
this Agreement, the above-described deliveries by Seller and the absence of a
Seller Event of Default (as defined in Section 15(b) hereof) shall constitute
conditions precedent to the obligation of Buyer to close the Escrow, and may be
waived only by a written waiver executed by Buyer and delivered to Escrow
Holder.
10. CLOSINGS; ESCROW CANCELLATION.
(a) CONDITIONS TO CLOSING. Escrow Holder shall close Escrow on or
before the Closing Date by (i) filing for record the Deed (and such other
documents as are required to be recorded at the Close of Escrow pursuant to the
terms hereof); and (ii) delivering funds and documents to the parties as
appropriate WHEN AND ONLY WHEN each of the following conditions has been
satisfied:
(i) DELIVERIES. All funds and/or documents described in Section
8, Section 9 and Section 12 for such Closing have been delivered to Escrow
Holder.
(ii) CLOSING STATEMENT. Escrow Holder shall have delivered to the
parties and the parties shall have approved a proposed closing statement.
(iii) TITLE POLICY. Escrow Holder is prepared to issue the Title
Policy, insuring that fee simple title to the Land vests in Buyer subject only
to (i) standard printed form exclusions from coverage of such policy of title
insurance, (ii) general and special real estate taxes which are, as of Close of
Escrow, not delinquent, and (iii) the Permitted Exceptions.
(iv) OTHER CONDITIONS PRECEDENT. All other Conditions Precedent
hereunder have been fully satisfied.
(b) BUYER'S TERMINATION NOTICE. In the event that Buyer desires to
terminate this Agreement in accordance with the terms of this Agreement, Buyer
shall notify Seller and Escrow Holder in writing. Buyer's notice to Seller and
Escrow Holder of its termination of this Agreement shall terminate this
Agreement, and in such event the Deposit shall be refunded to Buyer within
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three (3) business days after Buyer's notification of Buyer's termination to
Escrow Holder and Seller without requiring any consent or approval or any other
confirmation from Seller that Buyer is entitled to a return of the Deposit, and
neither party shall have any further rights or obligations hereunder. If Buyer
so determines not to proceed with the purchase of the Property, Buyer shall (a)
pay Escrow Holder's escrow cancellation fee and any additional fees charged by
Escrow Holder, if any; and (b) return to Seller all Environmental Documents and
other documents which Buyer has obtained in connection with Buyer's
investigation of the Property within three (3) business days after such
determination not to proceed.
11. PRORATIONS, CREDITS AND COSTS.
(a) PRORATIONS. Escrow Holder shall prorate to the Closing Date on the
basis of a 30-day month, the following:
(i) TAXES. General and special real estate taxes based on the
regular tax xxxx for the fiscal year in which the Escrow closes (or, if such tax
xxxx has not been issued as of the Closing Date, the regular tax xxxx for the
fiscal year preceding that in which the Escrow closes).
(ii) OTHER ITEMS. All other items customarily prorated between a
seller and buyer of real property at Close of Escrow.
12. CLOSING COSTS.
(a) COSTS TO BE PAID BY SELLER. Seller shall pay the following costs
("Seller's Closing Costs"):
(i) The premium for a CLTA standard coverage title policy with a
limit of liability equal to that of the Buyer's title policy.
(ii) The real property transfer tax imposed pursuant to NRS
Chapter 375.
(iii) Fees for recording the documents described in this
Agreement, which are to be recorded at such Closing.
(iv) One-half (1/2) of the escrow fee charged by Escrow Holder.
(v) Fifty Thousand Dollars and 00/100ths ($50,000.00),
representing one-half (1/2) of the real estate commission to be paid to Tower
Realty Group.
(b) COSTS TO BE PAID BY BUYER. Buyer shall pay the following costs
("Buyer's Closing Costs"):
(i) The difference in cost between the ALTA title policy premium
for the Title Policy described in Section 4(b) hereof and the premium for a CLTA
standard coverage
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owner's title policy with the same coverage amount, and the cost of any
endorsements requested by Buyer.
(ii) One-half (1/2) of the escrow fee charged by Escrow Holder.
(iii) Fifty Thousand Dollars and 00/100ths ($50,000.00),
representing one-half (1/2) of the real estate commission to be paid to Tower
Realty Group.
13. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents,
warrants to and covenants with Buyer that the following matters are true and
correct as of the Effective Date and will also be true and correct as of the
Closing Date:
(i) GOOD STANDING. Seller is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Nevada.
(ii) AUTHORIZATION AND VALIDITY. This Agreement is, and all the
documents executed by Seller which are to be delivered to Buyer at the Closing
will be, duly authorized, executed, and delivered by Seller, and are and will be
legal, valid, and binding obligations of Seller enforceable against Seller in
accordance with their respective terms, and do not and will not violate any
provisions of any agreement to which Seller is a party or to which it is
subject.
(iii) NO BANKRUPTCY PROCEEDINGS. Seller has not (i) made a
general assignment for the benefit of creditors, (ii) filed any voluntary
petition in bankruptcy or suffered the filing of any involuntary petition by
Seller's creditors, (iii) suffered the appointment of a receiver to take
possession of all or substantially all of Seller's assets, or (iv) suffered the
attachment or other judicial seizure of all or substantially all of Seller's
assets.
(iv) NON-FOREIGN PERSON. Seller is not a "foreign person" as
defined in Section 1445 of the Internal Revenue Code of 1986, as amended (the
"Code"), and any related regulations.
(v) HAZARDOUS MATERIALS.
(1) DEFINITION OF HAZARDOUS MATERIALS. For purposes of this
Agreement, "Hazardous Materials" shall include, but shall not be limited to: (1)
any chemical, compound, material, mixture, substance or other matter which has
been defined, listed, classified or determined by any regulation, order or rule,
or any proposed regulation, order or rule, promulgated by any governmental
agency of appropriate jurisdiction, to constitute a hazardous substance,
hazardous material, hazardous waste, extremely hazardous waste, infectious
waste, toxic substance, toxic pollutant, radioactive material, flammable
explosive or other designation intended to
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define, list or classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive
toxicity or "EP toxicity"; and (2) petroleum, natural gas, natural gas liquids,
liquefied natural gas, synthetic gas usable for fuel, gasoline, diesel fuel,
motor oil, ash produced by a resource recovery facility utilizing a municipal
solid waste stream, and drilling fluids, produced waters and other wastes
associated with the exploration, development or production of crude oil, natural
gas or geothermal resources.
(2) DEFINITION OF ENVIRONMENTAL LAWS. "Environmental Laws"
means any and all present and future federal, state and local laws, statutes,
ordinances, regulations, policies, guidelines, decisions or orders and any other
requirements of any governmental body governing the generation, storage,
release, discharge, transportation, removal, remediation, reduction or disposal
of hazardous or toxic materials, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended
(CERCLA), 42 U.S.C. ss.9601, ET SEQ., the Resource Conservation and Recovery
Act, as amended (RCRA), 42 U.S.C. ss.6901, ET SEQ., the Hazardous Materials
Transportation Act, as amended, 49 U.S.C. ss.1801, ET SEQ., the Federal Water
Pollution Control Act, as amended, 33 U.S.C. ss.1251, ET SEQ., the Toxic
Substance Control Act, as amended (TSCA), 15 U.S.C. ss.9601, ET SEQ., the
Endangered Species Act, as amended, the Clean Water Act, as amended, 33 U.S.C.
ss.1251, ET SEQ., the Occupational Safety and Health Act, as amended, the
Emergency Planning and Community Right-to-Know Act of 1986 (EPCRTKA), 42 U.S.C.
ss.11001, ET SEQ., the Clean Air Act, 42 U.S.C. ss.7401, ET SEQ., the Pollution
Prevention Act of 1990, 42 U.S.C. ss.13101, ET seq., the applicable provisions
of Nevada Revised Statutes ("NRS") Chapters 444, 445A, 445B, 459, 590 and 618;
and the Uniform Fire Code (1988 Edition), each as hereafter amended from time to
time, and the present and future rules, regulations and guidance documents
promulgated under any of the foregoing.
(b) NO HAZARDOUS MATERIALS. To Seller's actual knowledge, after due
inquiry, there are no Hazardous Materials present on the Property, except in
compliance with Environmental Laws, and there has not been any release or
discharge of Hazardous Materials in, upon, on or below any portion of the
Property, including, but not limited to, soils and groundwater in and around the
Property.
(c) NO VIOLATIONS; NO NOTICE. To Seller's actual knowledge, as of the
Closing Date, the Property will not be in violation of any federal, state or
local law, ordinance or regulation relating to industrial hygiene. Seller has
received no notice and has no independent knowledge that there is any proceeding
or inquiry by any governmental authority with respect to the presence of
Hazardous Materials on the Property or the migration thereof from or to other
property.
(d) AGREEMENTS. Seller has not entered into any other agreements
affecting title to the Property, except the Lease.
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(e) NO BREACH. Neither the execution of this Agreement nor the
consummation of the transactions contemplated herein will constitute a breach
under any contract or agreement to which Seller is a party or by which Seller is
bound or affected which affects the Property or any part thereof.
(f) MARKETABLE TITLE. Seller has and shall convey to Buyer good,
marketable and insurable fee title to the Property, subject only to the
Permitted Exceptions. From and after the Effective Date, Seller shall take no
action to encumber the Property with any lien, easement or other title matter
without the consent of Buyer, which Buyer shall not unreasonably withhold or
delay.
(g) LITIGATION AND OTHER PROCEEDINGS. There are no judgments
unsatisfied against Seller or the Property or consent decrees or injunctions to
which Seller or the Property is subject, and there is no litigation, claim or
proceeding pending or, to the best of Seller's knowledge and belief, threatened
against or relating to Seller and Seller's ownership, operation of or title to
the Property, nor does Seller know or have reasonable grounds to know of any
basis for any such action or of any governmental investigation relative to
Seller or the Property. Seller is not in the hands of a receiver, nor has Seller
committed an act of bankruptcy, nor has an order for relief been entered with
respect to Seller.
(h) COMPLIANCE OF PROPERTY WITH ZONING AND OTHER LAWS. No notice or
warning from any governmental authority with respect to any failure or alleged
failure of Seller to comply with any law, regulation or order has been received
by Seller nor, to the best of Seller's knowledge, is any such notice or warning
proposed or threatened.
(i) CHANGED CIRCUMSTANCES. In the event Seller obtains actual
knowledge, before Closing, of any fact which is materially contrary to, or which
Seller reasonably believes may materially affect, any of the representations or
warranties contained herein, Seller agrees to promptly notify Buyer of that
fact, in writing. On or before 5:00 p.m. Pacific Time on the third (3rd)
business day after Buyer's receipt of any such notification, Buyer may elect (i)
to proceed with the purchase and sale of the Property, as provided herein, or
(ii) to request that Seller cure the untrue representation prior to the Closing
Date. Buyer's failure to request that Seller cure any untrue representation
within the time provided for in this Section 13 shall constitute Buyer's waiver
of any claim based upon such representation and Buyer's election to proceed with
the purchase and sale of the Property as provided herein. On or before the third
(3rd) business day following its receipt of any request from Buyer, pursuant to
this Section 13, to cure any untrue representation, Seller shall notify Buyer
whether or not Seller will so cure the untrue representation. In the event
Seller elects not to cure the untrue representation or fails to notify Buyer
whether or not Seller will cure any such untrue representation within the time
period provided by the preceding sentence, Buyer shall have until 5:00 p.m.
Pacific Time on the third (3rd) business day following the expiration of the
time period provided in the preceding sentence to elect to terminate this
Agreement. Buyer's failure to terminate this Agreement within the specific time
period provided in this Section 13 shall constitute Buyer's waiver of any claim
based upon such representation and Buyer's election to waive its right to
terminate this Agreement pursuant to this Section 13 and Buyer shall proceed
with the purchase and sale of the Property pursuant to the terms of this
Agreement. In the event that Buyer elects to
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terminate this Agreement in accordance with this Section 13, Buyer shall provide
written notice of termination to Seller and Escrow Holder upon which Escrow
Holder shall promptly return the Deposit to Buyer and Buyer and Seller shall
have no further rights or obligations pursuant to this Agreement except as
otherwise expressly provided in this Agreement.
14. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants
to Seller that the following matters are true and correct as of the execution of
this Agreement and will also be true and correct as of the Closing:
(a) GOOD STANDING. Buyer is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of Texas and
is in good standing and authorized to do business in the State of Nevada.
(b) AUTHORIZATION AND VALIDITY. This Agreement is, and all the
documents executed by Buyer which are to be delivered to Seller at the Closing
will be, duly authorized, executed, and delivered by Buyer, and are and will be
legal, valid, and binding obligations of Buyer enforceable against Buyer in
accordance with their respective terms, and do not and will not violate any
provisions of any agreement to which Buyer is a party or to which it is subject.
(c) NO BANKRUPTCY PROCEEDINGS. Buyer has not (i) made a general
assignment for the benefit of creditors, (ii) filed any voluntary petition in
bankruptcy or suffered the filing of any involuntary petition by Buyer's
creditors, (iii) suffered the appointment of a receiver to take possession of
all or substantially all of Buyer's assets, or (iv) suffered the attachment or
other judicial seizure of all or substantially all of Buyer's assets.
15. DEFAULT BY SELLER OR BUYER.
(a) SELLER'S REMEDIES. If Buyer fails to complete the purchase of the
Property, or to satisfy any other material obligation of Buyer pursuant to this
Agreement, and such failure constitutes a breach of this Agreement ("Buyer Event
of Default"), and Seller is not in material breach of this Agreement, the
parties agree that Seller may terminate this Agreement and the Deposit shall
constitute liquidated damages to Seller for such breach by Buyer, and shall be
the sole and exclusive remedy of Seller for any breach by Buyer. Buyer and
Seller agree that the actual damages Seller will incur because of such breach
are difficult to ascertain at this time and that the Deposit is a reasonable
estimated amount for liquidated damages for a breach in light of the
circumstances existing at the time this Agreement is entered into.
(b) BUYER'S REMEDIES. If Seller fails to complete the sale of the
Property or to satisfy any other material obligation of Seller under this
Agreement, and such failure constitutes a breach of this Agreement ("Seller
Event of Default"), and Buyer is not in material breach of this Agreement,
Buyer's remedies shall be limited to either (a) a refund of Deposit, or (b)
specific performance of the Agreement; provided however, that if specific
performance is not an available remedy due to Seller's acts or omissions, then
Buyer may seek to recover actual damages.
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(c) CURE PERIOD. Anything herein to the contrary notwithstanding, in
the event of a Buyer Event of Default, Seller Event of Default, or any other
breach of this Agreement, the party alleging a default or breach shall give the
other party written notice thereof, whereupon the party receiving said notice
shall have ten (10) days after receipt of such notice to cure any monetary
default and thirty (30) days after receipt of such notice to cure any
non-monetary default, provided, however, such cure period shall in no event
extend the applicable Closing Date by more than ten (10) days unless agreed to
by the parties in writing.
16. INDEMNIFICATION.
(a) Except as otherwise provided in the Lease to be executed by the
parties at Closing, Seller agrees to indemnify and hold Buyer free and harmless
from any and all liabilities arising from or related to the Property which
occurred or are alleged to have occurred prior to the Closing Date.
(b) Except as otherwise provided in the Lease to be executed by the
parties at Closing, Buyer agrees to indemnify and hold Seller free and harmless
from any and all liabilities arising from or related to the Property, which
occurs or are alleged to have occurred on or following the Closing Date.
17. BUYER EXCHANGE. This Agreement is not contingent upon Buyer's ability
to effectuate a tax deferred exchange; provided, however that Seller agrees to
cooperate with Buyer in effecting an exchange (IRS Code 1031 tax deferred
exchange) provided that: (a) Seller shall not incur any additional liability or
financial obligations as a consequence of Buyer's exchange; (b) Buyer's exchange
shall in no way reduce the net amount to which Seller is entitled under the
terms of this Agreement; and (c) Buyer shall indemnify and hold Seller harmless
from any and all liabilities, claims, losses or actions which Seller incurs or
to which Seller may be exposed as a result of Seller's participation in the
contemplated exchange.
18. DESTRUCTION OF IMPROVEMENTS. If the improvements of the property are
destroyed, materially damaged, or found to be materially defective as a result
of such damage (collectively, "damage") prior to the Closing Date, Buyer may
terminate this agreement. In the event Buyer does not elect to terminate the
agreement, Buyer may elect either of the following two alternatives. First,
Buyer may elect to require that the damage be repaired by Seller, prior to Close
of Escrow, and if such cannot be completed prior to the scheduled Closing Date,
at Buyer's election, Close of Escrow may be delayed or the repair may be
completed after Close of Escrow. Under this alternative, Seller's financial
obligation shall be limited to any insurance proceeds payable on account of the
damage, and Buyer shall pay for any cost in excess of such sum. Second, Buyer
may elect to close escrow without Seller making the repairs and receive from
Seller, in addition to the Property, the sum of any insurance proceeds payable
on account of the damage and a credit to the Purchase Price for the amount of
any deductibles.
19. NOTICES. All notices required or permitted hereunder shall be made and
given to the parties in writing. Any such writing may be sent to the parties by
mail, air express (government or private carrier), telecopier, or facsimile
machine to the following address:
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If to Seller:
Valence Technology Nevada Inc.
000 Xxxxxxxxx Xxx
Xxxxxxxxx, Xxxxxx 00000
Attention: Xxxxx Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxx Xxxx Peek Xxxxxxxx and Xxxxxx
0000 X. Xxxxxx Xxx., 0xx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Buyer:
Mars Partners
0000 X. Xxxxxxxx Xxxxx
Xxxxx Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx X. Xxxxx, III
Xxxxx, Xxxxx & Xxxxxxxx, P.C.
0000 X. Xxxxxxx Xxxxxxxxxx
Xxxxx 000, X.X. 00
Xxxxxx, Xxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
20. AUTHORITY TO SIGN. Each of the persons signing below on behalf of Buyer
or Seller, respectively, represents and warrants that Buyer or Seller, as the
case may be, is duly and properly organized and authorized to transact business
in the State of Nevada, and that the undersigned has been authorized on behalf
of Buyer or Seller, as the case may be, to enter into and execute this Agreement
on such entity's behalf.
21. NO WAIVER. Waiver by one party of the performance of any covenant,
condition or promise shall not invalidate this Agreement, nor shall it be
considered to be a waiver by such party of any other covenant, condition or
promise hereunder.
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22. SEVERABILITY. If for any reason, any provision of this Agreement shall
be held to be unenforceable, it shall not affect the validity or enforceability
of any other provision of the Agreement.
23. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Nevada.
24. ENTIRE AGREEMENT. Any and all Exhibits and addenda attached hereto and
either signed or initialed by the parties shall be deemed a part hereof. This
Agreement, including Exhibits and addenda, if any, expresses the entire
agreement of the parties and supersedes any and all previous agreements between
the parties with regard to the Property. There are no other understandings, oral
or written, which in any way alter or enlarge its terms, and there are no
warranties or representations of any nature whatsoever, either expressed or
implied, except as may be set forth herein. Any and all future modifications of
this Agreement will be effective only if it is in writing and signed by the
parties hereto. The terms and conditions of any and all addenda attached hereto
and any and all future modifications of this Agreement shall supersede and
replace any inconsistent provisions in this Agreement.
25. NO ONE DEEMED DRAFTER. Buyer and Seller hereby agree that neither Buyer
nor Seller shall be deemed to be the drafter of this Agreement and that in the
event this Agreement is ever construed by a court of law, such court shall not
construe this Agreement or any provision hereof against either Buyer nor Seller
as the drafter hereof. Buyer and Seller hereby waive any and all rights to
claims against the other party relating in any way to the foregoing matter.
26. BROKER. If, and only if, as and when the transactions contemplated
hereby are fully closed and funded, Seller and Buyer shall each pay half of a
real estate commission in cash at Closing to Xx Xxxxxxx of Tower Realty Company
(whether one or more, the "Broker"), in the amount of One Hundred Thousand
Dollars and 00/100ths ($100,000.00). It is expressly understood, acknowledged
and agreed that the Broker's right to such commission shall vest only upon the
actual consummation and funding of the Closing, and no commission shall be
earned, due or owing in the event the purchase and sale transaction contemplated
herein shall fail to close for any reason whatsoever including, but not limited
to, the default of either Seller or Buyer. Each party hereto represents to the
other that, except as set forth above with respect to the Broker, it has not
authorized any broker or finder to act on its behalf in connection with the sale
and purchase transaction contemplated hereby and that it has not dealt with any
broker or finder purporting to act for any other party. Each party hereto agrees
to save, defend, indemnify and hold harmless the other party from and against
any and all liabilities, costs, damages and expenses of any kind or character
arising from any claims for brokerage or finder's fees, commissions or other
similar fees in connection with the transactions covered by this Agreement
insofar as such claims shall be based upon alleged arrangements or agreements
made by such party or on its behalf, which indemnity shall (notwithstanding
anything to the contrary contained or implied elsewhere in this Agreement)
expressly survive any termination or Closing of this Agreement.
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27. MANDATORY ARBITRATION. Any controversy or claim between or among the
parties hereto, including but not limited to those arising out of or relating to
this Agreement or any claim based on or arising from an alleged tort, shall be
determined by binding arbitration in accordance with the rules and procedures of
the American Arbitration Association. Judgment upon any arbitration award may be
entered in any court having jurisdiction. The arbitration hearing shall be
conducted in Xxxxx County, Nevada.
28. ATTORNEY'S FEES. If this Agreement gives rise to any arbitration or
other legal proceeding between any of the parties hereto, the prevailing party
shall be entitled to recover its actual costs and expenses, including costs of
arbitration, court costs and reasonable attorneys' fees, in addition to any
other relief to which such party may be entitled.
29. TIME. Time is of the essence of this Agreement and every provision
thereof.
30. COUNTERPARTS. The parties may execute this Agreement, any and all
addenda attached hereto, and any and all future modifications of this Agreement
in two or more counterparts which shall, in the aggregate, be signed by all the
parties; each counterpart shall be deemed an original instrument as against any
party who has signed it.
31. OTHER.
(a) LIQUIDATED DAMAGES. AS CONTEMPLATED IN SECTION 15(A), IF BUYER
FAILS TO COMPLETE THE PURCHASE OF THE PROPERTY AS PROVIDED BY THIS AGREEMENT BY
REASON OF ANY DEFAULT OF BUYER, SELLER SHALL BE RELEASED FROM ITS OBLIGATION TO
SELL THE PROPERTY TO BUYER, AND SHALL BE ENTITLED TO EXERCISE ITS REMEDIES
HEREUNDER; PROVIDED, HOWEVER, THAT BUYER AND SELLER HEREBY ACKNOWLEDGE AND AGREE
THAT IT WOULD BE IMPRACTICAL AND/OR EXTREMELY DIFFICULT TO FIX OR ESTABLISH THE
ACTUAL DAMAGE SUSTAINED BY SELLER AS A RESULT OF SUCH A DEFAULT BY BUYER AND
AGREE THAT THE AMOUNT OF DEPOSIT MADE BY BUYER IS A REASONABLE APPROXIMATION
THEREOF AND NOT A PENALTY. ACCORDINGLY, IN THE EVENT THAT THE BUYER BREACHES
THIS AGREEMENT BY DEFAULTING IN COMPLETION OF THE PURCHASE, BUYER'S DEPOSIT
SHALL CONSTITUTE AND BE DEEMED TO BE THE AGREED AND LIQUIDATED DAMAGES OF SELLER
AND SELLER'S SOLE AND EXCLUSIVE REMEDY. SELLER AGREES TO WAIVE ALL OTHER
REMEDIES AGAINST THE BUYER WHICH SELLER MIGHT OTHERWISE HAVE IN LAW OR EQUITY BY
REASON OF SUCH DEFAULT BY BUYER.
UPON DEPOSIT: SELLER'S INITIALS /s/ RW BUYER'S INITIALS /s/ SR
-------- --------
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SELLER:
Valence Technology Nevada, Inc.,
a Nevada corporation
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Its: Vice President
BUYER:
Mars Partners,
a Texas limited partnership
By: /s/ Xxxxxx X. Xxxx
---------------------------------------
Xxxxxx X. Xxxx, General Partner
ESCROW HOLDER:
First American Title Company of Nevada
By: ________________________________________
Its: ________________________________________
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