EXHIBIT 10.01
AGREEMENT FOR PURCHASE AND SALE
OF REAL PROPERTY AND ESCROW INSTRUCTIONS
(Improved Property)
THIS AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY AND ESCROW INSTRUCTIONS
("Agreement") is made and entered into as of this 15th day of May, 2003, by and
between ▇▇▇▇▇ - Pahrump, LLC, a Virginia limited liability company, ("Seller"),
and Pacific Home Equities LLC ("Buyer"), with reference to the following facts:
A. Seller owns certain real property located in County of ▇▇▇,
State of Nevada and more specifically described in Exhibit A
attached hereto (the "Land"), commonly known as Pahrump Valley
Junction Shopping Center and such other assets, as the same
are herein described.
B. Seller desires to sell to Buyer and Buyer desires to purchase
from Seller the Land and the associated assets.
NOW, THEREFORE, in consideration of the mutual covenants, premises and
agreements herein contained, the parties hereto do hereby agree as follows:
1. Purchase and Sale.
1.1. The purchase and sale includes, and at Close of Escrow
(hereinafter defined) Seller shall sell, assign, grant and
transfer to Buyer, Seller's entire right and interest in and
to all of the following (hereinafter sometimes collectively,
the "Property"):
1.1.1. The Land, together with all structures, buildings,
improvements, machinery, fixtures, and equipment
affixed or attached to the Land and all easements and
rights appurtenant to the Land (all of the foregoing
being collectively referred to herein as the "Real
Property");
1.1.2. All leases (the "Leases"), including associated
amendments, with all persons ("Tenants") leasing the
Real Property or any part thereof or hereafter
entered into in accordance with the terms hereof
prior to Close of Escrow, together with all security
deposits, other deposits held in connection with the
Leases, Lease guarantees and other similar credit
enhancements providing additional security for such
Leases;
1.1.3. All tangible and intangible personal property owned
by Seller located on or used in connection with the
Real Property,
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including, specifically, without limitation,
equipment, furniture, tools and supplies, and all
related intangibles including Seller's interest in
the name "Pahrump Valley Junction Shopping Center"
(the "Personal Property");
1.1.4. All service contracts, agreements, warranties and
guaranties relating to the operation of the Property
(the "Contracts"); and
1.1.5. To the extent transferable, all building permits,
certificates of occupancy and other certificates,
permits, licenses and approvals relating to the
Property (the "Permits").
2. Purchase Price.
The total Purchase Price of the Property shall be NINETEEN MILLION
DOLLARS ($19,000,000.00) ("Purchase Price") payable as follows:
2.1. Deposit/Further Payments/Down Payment.
2.1.1. Upon mutual execution of this Agreement, Buyer shall
deposit into Escrow the amount of $250,000.00 (the
"Initial Deposit"), in the form of a wire transfer
payable to First American Title Company, at ▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ("Escrow Holder"). Thirty days following
mutual execution of this Agreement, Buyer shall
deposit an additional $100,000.00 (the "Additional
Deposit) and the total deposit of $350,000 shall be
deemed non-refundable subject to Buyer qualifying for
assumption of that certain loan made by Key
Commercial Mortgage (the "Lender") to Seller, having
a current outstanding balance of approximately
$11,968,237.01 (the "Loan"). Escrow Holder shall
place the Deposit into an interest bearing money
market account at a bank or other financial
institution reasonably satisfactory to Buyer, and
interest thereon shall be credited to Buyer's
account.
2.1.2. Buyer shall have forty five (45) days from the
opening of escrow to qualify for assumption of the
Loan ("Loan Assumption"). Buyer shall provide the
Seller with written proof that the Buyer has applied
for the Loan Assumption within fourteen (14) days of
the Opening of Escrow.
2.1.4. On or before Close of Escrow, Buyer shall deposit
into Escrow the balance of the Purchase Price less
the outstanding principal balance of the Loan as of
the Close of Escrow of, by wire transfer payable to
Escrow Holder.
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3. Title to Property.
3.1. Title Insurance.
Escrow Holder will obtain a Standard Coverage CLTA owner's
policy of title insurance from First American Title Company
with their standard provisions and exceptions (the "Title
Policy") in the amount of the Purchase Price. The Title Policy
is to be free and clear of encumbrances except as follows:
3.1.1. Real property taxes and assessments, which are a lien
not yet due;
3.1.2. Covenants, conditions, reservations (including
exceptions of oil, gas, minerals, hydrocarbons and/or
lease without right of surface entry), restrictions,
rights of way, and easements for public utilities,
districts, water companies, alleys and streets; and
3.1.3. The permitted exceptions included in such policy and
approved by Buyer.
3.2. Procedure for Approval of Title.
Buyer shall have a period of ten (10) days following the
Buyer's receipt of the Title Documents (hereafter defined)
(the "Title Review Period") to review and approve the Title
Documents. If the Title Documents reflect or disclose any
defect, exception or other matter affecting the Property
("Title Defects") that is unacceptable to Buyer, then prior to
the expiration of the Title Review Period, Buyer shall provide
Seller with written notice of Buyer's objections. Seller may,
at its sole option, elect to cure or remove the objections
made by Buyer; provided, however, Seller shall have the
obligation to act in good faith. Should Seller elect to
attempt to cure or remove the objection, Seller shall have
fifteen (15) days from the date of Buyer's written notice of
objections ("Cure Period") in which to accomplish the cure. In
the event Seller either elects not to cure or remove the
objections or is unable to accomplish the cure prior to the
expiration of the Cure Period, then Seller shall so notify
Buyer in writing specifying which objections Seller does not
intend to or cannot cure, and then Buyer shall be entitled, as
Buyer's sole and exclusive remedies, either to (i) terminate
this Agreement and obtain a refund of the Deposit by providing
written notice of termination to Seller within ten (10) days
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from the date on which Buyer receives Seller's no-cure notice
and returning the Due Diligence Items (hereinafter defined) or
(ii) waive the objections and close this transaction as
otherwise contemplated herein. If Buyer shall fail to notify
Seller in writing within the Title Review Period of any
objections to the state of title to the Property, then Buyer
shall be deemed to have no objections to the state of such
title and any exceptions to title or other conditions or
matters which have not been objected to by Buyer and which are
shown on the Survey or described in the Title Report shall be
deemed "Permitted Exceptions."
4. Due Diligence Items.
4.1. Seller shall deliver to Buyer each of the following within
seven (7) days of the Opening of Escrow (collectively, the
"Due Diligence Items"):
4.1.1. The existing survey of the Property in seller's
possession or control, if any (the "Survey");
4.1.2. A current preliminary title report or title
commitment (the "Title Report") for the issuance of
policy of title insurance to Buyer from the Escrow
Holder, together with good and legible copies of all
documents constituting exceptions to the title as
reflected in the Title Report (collectively referred
to hereinafter as the "Title Documents");
4.1.3. A list of all contracts, including service contracts,
warranties, management, maintenance, leasing
commission or other agreements affecting the
Property, if any, together with copies of the same
shall be available for inspection. Seller agrees not
to enter into any additional contracts or agreements
prior to closing which cannot be canceled upon thirty
(30) days written notice without cost, penalty, or
obligation unless such contracts or other agreements
are approved in writing by Buyer, which approval
shall not be unreasonably withheld or delayed;
4.1.4. All site plans, leasing plans, as-built plans,
drawings, environmental, mechanical, electrical,
structural, soils and similar reports and/or audits
and plans and specifications relative to the Property
in the possession of Seller, if any, shall be made
available for inspection at Seller's offices;
4.1.5. True and correct copies of the real estate and
personal property tax statements covering the
Property or any part thereof for
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each of the two (2) years prior to the current year
and, if available, for the current year;
4.1.6. A schedule of all current or pending litigation with
respect to the Property or any part, thereof, if any;
4.1.7. Operating statements for calendar years 2001, 2002
and 2003 year to date;
4.1.8. The tenant files, books and records relating to the
ownership and operation of the Property shall be
available for inspection by Buyer during ordinary
business hours at Seller's management office; and
4.1.9. An inventory of all personal property located on the
Property, used in the maintenance of the Property or
stored for future use at the Property and an
inventory of all furniture and appliances used in the
units, if any;
4.1.10. Copies of all tenant leases, and amendments thereto.
4.2. Estoppel Certificates.
Seller shall obtain and deliver to Buyer estoppel
certificates, in accordance with their respective Leases, from
tenants. In the event Seller is unable to obtain the estoppel
certificates referred to above despite diligent efforts to do
so, Seller shall not be in default hereunder, provided that
Seller delivers to Buyer an estoppel certificate executed by
Seller and otherwise in the form required by the respective
Leases and approved by Buyer, and thereafter Seller uses
diligent efforts to obtain an estoppel certificate executed by
such lessee. At any time prior to Close of Escrow, Seller may
substitute an estoppel certificate executed by a tenant under
a lease to replace any estoppel certificate executed by Seller
as landlord under the same lease previously delivered by
Seller. Whether executed by the lessee or by Seller, the
matters certified in the estoppel certificate shall be subject
to Buyer's reasonable approval. Buyer shall notify Seller
within three (3) business days of receipt of a copy of the
executed estoppel certificate of its approval or disapproval
and the basis of such disapproval, if disapproved. If Buyer
reasonably disapproves of such estoppel certificate, and
Seller is unable to obtain a reasonably acceptable estoppel
certificate prior to the Close of Escrow, this Agreement shall
terminate, Buyer shall be entitled to a refund of the Deposit,
and
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neither party shall have any further obligation to the other
except Buyer's indemnification obligations under Paragraph 5.
5. Inspections.
Buyer, at its sole expense, shall have the right to conduct
feasibility, environmental, engineering and physical studies or other
tests (the "Inspections") of the Property at any time during the
Inspection Period (hereinafter defined). Buyer, and its duly authorized
agents or representatives, shall be permitted to enter upon the
Property at all reasonable times during the Inspection Period in order
to conduct engineering studies, soil tests and any other Inspections
and/or tests that Buyer may deem necessary or advisable. Buyer must
arrange all Inspections of the Property with Seller at least two (2)
business days in advance of any Inspections. In the event that the
review and/or Inspection conducted pursuant to this paragraph shows any
fact, matter or condition to exist with respect to the Property that is
unacceptable to Buyer, in Buyer's sole subjective discretion, then
Buyer shall be entitled, as its sole and exclusive remedy, to (1)
terminate this Agreement and obtain a refund of the Deposit, or (2)
waive the objection, and close the transaction as otherwise
contemplated herein. Buyer agrees to promptly discharge any liens that
may be imposed against the Property as a result of the Inspections and
to defend, indemnify and hold Seller harmless from all, claims, suits,
losses, costs, expenses (including without limitation court costs and
attorneys' fees), liabilities, judgments and damages incurred by Seller
as a result of any Inspections.
5.1. Approval.
5.1.1. Buyer shall have until June 13 ("Inspection Period")
to approve or disapprove the Inspections. If Buyer
shall fail to notify Seller and Escrow Holder of its
approval of the Inspections in writing within the
Inspection Period, the condition of the Property
shall be deemed disapproved. If Buyer shall
disapprove or be deemed to disapprove the Inspections
within the Inspection Period, this Agreement and the
Escrow shall thereupon be terminated. Buyer shall not
be entitled to purchase the Property, Seller shall
not be obligated to sell the Property to Buyer and
the parties shall be relieved of any further
obligation to each other with respect to the
Property, except as provided in Paragraph 5.
5.1.2. Notwithstanding anything to the contrary contained
herein, Buyer hereby agrees that, in the event this
Agreement is terminated for any reason, then Buyer
shall promptly and at its
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sole expense return to Seller all Due Diligence Items
which have been delivered by Seller to Buyer in
connection with the Inspections, along with copies of
all reports, drawings, plans, studies, summaries,
surveys, maps and other data prepared by or for
Buyer's right to make any such materials available to
Seller that are imposed in any agreement with a third
party consultant preparing any such reports or
materials ("Buyer's Reports"). Buyer shall cooperate
with Seller at no expense to Buyer in order to obtain
a waiver of any such limitations.
5.1.3. Notwithstanding any contrary provision of this
Agreement, Buyer acknowledges that Seller is not
representing or warranting that any of the Due
Diligence Items prepared by third parties are
accurate or complete, such as the Survey, engineering
reports and the like. Seller advises Buyer to
independently verify the facts and conclusions set
forth therein, provided however, Seller warrants that
it has no knowledge of any material errors or
misstatements in such information regarding the
Property.
6. Escrow.
6.1. Opening.
Purchase and sale of the Property shall be consummated through
an escrow ("Escrow") to be opened with Escrow Holder within
two (2) business days after the execution of this Agreement by
Seller and Buyer. Escrow shall be deemed to be opened as of
the date fully executed copies (or counterparts) of this
Agreement are delivered to Escrow Holder by Buyer and Seller
("Opening of Escrow"). This Agreement shall be considered as
the Escrow instructions between the parties, with such further
instructions as Escrow Holder shall require in order to
clarify its duties and responsibilities. If Escrow Holder
shall require further Escrow instructions, Escrow Holder may
prepare such instructions on its usual form. Such further
instructions shall be promptly signed by Buyer and Seller and
returned to Escrow Holder within three (3) business days of
receipt thereof. In the event of any conflict between the
terms and conditions of this Agreement and such further
instructions, the terms and conditions of this Agreement shall
control.
6.2. Close of Escrow.
6.2.1. Escrow shall close ("Close of Escrow") fifteen (15)
days following Lender's approval of the Loan
Assumption.
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6.3. Buyer Required to Deliver.
Buyer shall deliver to Escrow the following:
6.3.1. Concurrently with the Opening of Escrow, the Deposit;
6.3.2. On or before Close of Escrow, the payment required by
Paragraph 2.1.2; provided, however that Buyer shall
not be required to deposit the amount specified in
Paragraph 2.1.2 until Buyer has been notified by
Escrow Holder that (i) Seller has delivered to Escrow
each of the documents and instruments to be delivered
by Seller in connection with Buyer's purchase of the
Property, (ii) Title Company has committed to issue
and deliver the Title Policy to Buyer and Seller and
(iii) the only impediment to Close of Escrow is
delivery of such amount by or on behalf of Buyer;
6.3.3. On or before Close of Escrow, such other documents as
Title Company may require from Buyer in order to
issue the Title Policy;
6.3.4. An original assignment and assumption agreement (the
"Assignment and Assumption Agreement") duly executed
by Seller assigning and conveying to Buyer all of
Seller's right, title and interest in and to the
Leases and the Contracts.
6.3.5. An original counterpart of a loan assumption
agreement pursuant to which the Buyer assumes the
outstanding principal balance of the loan (the "Loan
Assumption Agreement")
6.4. Seller Required to Deliver.
On or before Close of Escrow, Seller shall deliver to Escrow
the following:
6.4.1. A duly executed and acknowledged grant deed,
conveying fee title to the Property in favor of Buyer
(the "Grant Deed");
6.4.2. An executed Certificate of Non-Foreign Status;
6.4.3. A ▇▇▇▇ of sale or other assignment of the Personal
Property, if any, in favor of Buyer and duly executed
by Seller;
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6.4.4. Such other documents as Title Company may require
from Seller in order to issue the Title Policy;
6.4.5. Tenant estoppel certificates;
6.4.6. Seller shall deliver to Buyer all keys to all
buildings and other improvements located on the
Property, combinations to any safes thereon, and
security devices therein in Seller's possession;
6.4.7. Seller shall deliver all records and files relating
to the management or operation of the Property,
including, without limitation, all insurance
policies, all security contracts, all tenant files
(including correspondence), property tax bills, and
all calculations used to prepare statements of rental
increases under the Leases and statements of common
area charges, insurance, property taxes and other
charges which are paid by tenants of the Project;
6.4.8. A counterpart original of the Assignment and
Assumption Agreement; and
6.4.9. A letter from the seller to tenants, informing
tenbants of the sale, date of sale, and new owner.
6.5. Buyer's Costs.
Buyer shall pay the following:
6.5.1. One-half (1/2) of Escrow Holder's fees, costs and
expenses;
6.5.2. The cost of recording the Loan Assumption Agreement;
6.5.3. All other costs customarily borne by purchasers of
real property in County of ▇▇▇, Nevada; and
6.5.4. If Buyer elects to obtain extended coverage title
insurance, the amount by which the premium for an
extended coverage policy of title insurance in the
amount of the Purchase Price exceeds the premium for
the Title Policy.
6.6. Seller's Costs.
Seller shall pay the following:
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6.6.1. One-half (1/2) of Escrow Holder's fees, costs and
expenses;
6.6.2. The cost of recording the Grant Deed, including
documentary transfer taxes;
6.6.3. Title Company's premium for the Title Policy; and
6.6.4. All other costs customarily borne by sellers of real
property in County of ▇▇▇, Nevada.
6.7. Prorations.
6.7.1. Real property taxes, assessments, rents, security
deposits, and cam expenses shall be prorated through
Escrow between Buyer and Seller as of Close of
Escrow. Rents, security deposits and cam expenses
shall be approved by Buyer prior to Close of Escrow.
Any delinquent rents collected by Buyer shall be paid
to Seller. Seller shall have the right to pursue any
Tenant for delinquent rent, but shall not cause a
Tenant to be delinquent for their current rent or
become financially unstable. Tax and assessment
prorations shall be based on the latest available tax
▇▇▇▇. If, after Close of Escrow, Buyer receives any
further or supplemental tax ▇▇▇▇ relating to any
period prior to Close of Escrow, or Seller receives
any further or supplemental tax ▇▇▇▇ relating to any
period after Close of Escrow, the recipient shall
promptly deliver a copy of such tax ▇▇▇▇ to the other
party, and not later than ten (10) days prior to the
delinquency date shown on such tax ▇▇▇▇ Buyer and
Seller shall deliver to the taxing authority their
respective shares of such tax ▇▇▇▇, prorated as of
Close of Escrow.
6.7.2. All leasing commissions owing and tenant improvements
with respect to the Property transactions entered
into prior to execution of this Agreement shall be
paid by Seller, and Seller shall indemnify and hold
Buyer harmless for Lease commission claims brought
against the Property arising therefrom. All leasing
commissions for new Leases and for Lease renewals and
expansion options executed after the date of this
Agreement shall be prorated between Buyer and Seller
as their respective periods of ownership bear to the
primary term of the new Lease.
6.7.3. Seller agrees to indemnify and hold Buyer harmless of
and from any and all liabilities, claims, demands,
suits, and judgments, of
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any kind or nature, including court costs and
reasonable attorneys' fees (except those items which
under the terms of this Agreement specifically become
the obligation of Buyer), brought by third parties
and based on events occurring on or before the date
of closing and which are in any way related to the
Property, and all expenses related thereto, including
but not limited to court costs and attorneys' fees.
6.7.4. Buyer agrees to indemnify and hold Seller harmless of
and from any and all liabilities, claims, demands,
suits and judgments, of any kind or nature, including
court costs and reasonable attorneys' fees, brought
by third parties and based on events occurring
subsequent to the date of closing and which are in
any way related to the Property, and all expenses
related thereto, including, but not limited to, court
costs and attorneys' fees.
6.8. Determination of Dates of Performance.
Promptly after delivery to Buyer of the Title Report, Escrow
Holder shall prepare and deliver to Buyer and Seller a
schedule which shall state each of the following dates:
6.8.1. The date of Opening of Escrow pursuant to Paragraph
6.1;
6.8.2. The date of receipt of the Title Report by Buyer;
6.8.3. The date by which title must be approved by Buyer
pursuant to Paragraph 3.2;
6.8.4. The date by which the Inspections must be approved by
Buyer pursuant to Paragraph 5.1.1;
6.8.5. The date by which the amounts described in Paragraph
2 must be deposited by Buyer, for which determination
Escrow Holder shall assume satisfaction of the
condition expressed in Paragraph 2 on the last date
stated for its satisfaction; and
6.8.6. The date of Close of Escrow pursuant to Paragraph
6.2.
If any events which determine any of the aforesaid dates occur
on a date other than the date specified or assumed for its
occurrence in this Agreement, Escrow Holder shall promptly
redetermine as appropriate each of the dates of performance in
the aforesaid schedule and notify Buyer and Seller of the
dates of performance, as redetermined.
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7. Representations, Warranties, and Covenants.
Seller hereby represents and warrants as of the date hereof to Buyer as
follows:
7.1. Seller is a limited liability company duly formed and validly
existing under the laws of the Commonwealth of Virginia.
Seller has full power and authority to enter into this
Agreement, to perform this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and
performance of this Agreement and all documents contemplated
hereby by Seller have been duly and validly authorized by all
necessary action on the part of Seller and all required
consents and approvals have been duly obtained and will not
result in a breach of any of the terms or provisions of, or
constitute a default under any indenture, agreement or
instrument to which Seller is a party. This Agreement is a
legal, valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms, subject to the
effect of applicable bankruptcy, insolvency, reorganization,
arrangement, moratorium or other similar laws affecting the
rights of creditors generally.
7.2. Seller has good and marketable title to the Property, subject
to the conditions of title. There are no outstanding rights of
first refusal, rights of reverter or option relating to the
Property or any interest therein. To Seller's knowledge, there
are no unrecorded or undisclosed documents or other matters
which affect title to the Property. Subject to the Leases,
Seller has enjoyed the continuous and uninterrupted quiet
possession, use and operation of the Property, without
material complaint or objection by any person.
7.3. Seller is not a "foreign person" within the meaning of Section
1445(f) of the Internal Revenue Code of 1986, as amended (the
"Code").
7.4. Covenants of Seller. Seller hereby covenants as follows:
7.4.1. At all times from the date hereof through the date of
closing, Seller shall cause to be in force fire and
extended coverage insurance upon the Property, and
public liability insurance with respect to damage or
injury to persons or property occurring on the
Property in at least such amounts as are maintained
by Seller on the date hereof;
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7.4.2. From the date of execution of this Agreement through
the date of closing, Seller will not enter into any
new lease with respect to the Property, without
Buyer's prior written consent, which shall not be
unreasonably withheld. Buyer's consent shall not be
required for the exercise of a renewal option. Any
brokerage commission payable with respect to a new
lease shall be prorated between Buyer and Seller in
accordance with their respective periods of ownership
as it bears to the primary term of the new lease.
Further, Seller will not modify any existing Lease
covering space in the Property without first
obtaining the written consent of Buyer which shall
not be unreasonably withheld. Buyer shall have five
(5) business days in which to approve or disapprove
of any new lease for which it has a right to consent.
Failure to respond in writing within said time period
shall be deemed to be consent;
7.4.3. From the date of execution of this Agreement through
the date of closing, Seller shall not sell, assign,
or convey any right, title or interest whatsoever in
or to the Property, or create or permit to attach any
lien, security interest, easement, encumbrance,
charge, or condition affecting the Property (other
than the Permitted Exceptions) without promptly
discharging the same prior to closing;
7.4.4. Seller shall not, without Buyer's written approval,
(a) amend or waive any right under any Service
Contract, or (b) enter into any agreement of any type
affecting the Property that would survive the Closing
Date;
7.4.5. Seller shall fully and timely comply with all
obligations to be performed by it under the Leases,
the Contracts, and all permits, licenses, approvals
and laws, regulations and orders applicable to the
Property.
7.5 Approval of Property. The consummation of the purchase and
sale of the Property pursuant to this Agreement shall be
deemed Buyer's acknowledgement that it has had an adequate
opportunity to make such legal, factual and other inspections,
inquiries and investigations as it deems necessary, desirable
or appropriate with respect to the Property. Such inspections,
inquiries and investigations of Buyer shall be deemed to
include, but shall not be limited to, any leases and contracts
pertaining to the Property, the physical components of all
portions of the Property, the physical condition of the
Property, such state of facts as an accurate survey,
environmental report and
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inspection would show, the present and future zoning
ordinance, ordinances, resolutions. Buyer shall not be
entitled to and shall not rely upon, Seller or Seller's agents
with regard to, and Seller will not make any representation or
warranty with respect to: (i) the quality, nature, adequacy or
physical condition of the Property including, but not limited
to, the structural elements, foundation, roof, appurtenances,
access, landscaping, parking facilities, or the electrical,
mechanical, HVAC, plumbing, sewage or utility systems,
facilities, or appliances at the Property, if any; (ii) the
quality, nature, adequacy or physical condition of soils or
the existence of ground water at the Property; (iii) the
existence, quality, nature, adequacy or physical condition of
any utilities serving the Property; (iv) the development
potential of the Property, its habitability, merchantability,
or the fitness, suitability, or adequacy of the Property for
any particular purpose; (v) the zoning or other legal status
of the Property; (vi) the Property or its operations'
compliance with any applicable codes, laws, regulations,
statutes, ordinances, covenants, conditions or restrictions of
any governmental or quasi-governmental entity or of any other
person or entity; (vii) the quality of any labor or materials
relating in any way to the Property; or (viii) the condition
of title to the Property or the nature, status and extent of
any right-of-way, lease, right of redemption, possession,
lien, encumbrance, license, reservation, covenant, condition,
restriction, or any other matter affecting the Property except
as expressly set forth in this Agreement. EXCEPT AS EXPRESSLY
PROVIDED IN THIS AGREEMENT AND THE GRANT DEED, SELLER HAS NOT,
DOES NOT, AND WILL NOT MAKE ANY WARRANTIES OR REPRESENTATIONS
WITH RESPECT TO THE PROPERTY AND SELLER SPECIFICALLY DISCLAIMS
ANY OTHER IMPLIED WARRANTIES OR WARRANTIES ARISING BY
OPERATION OF LAW, INCLUDING, BUT IN NO WAY LIMITED TO, ANY
WARRANTY OF CONDITION, MERCHANTABILITY, HABITABILITY, OR
FITNESS FOR A PARTICULAR PURPOSE OR USE. FURTHERMORE, SELLER
HAS NOT, DOES NOT, AND WILL NOT MAKE ANY REPRESENTATION OR
WARRANTY WITH REGARD TO COMPLIANCE WITH ANY ENVIRONMENTAL
PROTECTION, POLLUTION, OR LAND USE LAWS, RULES, REGULATIONS,
ORDERS, OR REQUIREMENTS INCLUDING, BUT NOT LIMITED TO, THOSE
PERTAINING TO THE HANDLING, GENERATING, TREATING, STORING OR
DISPOSING OF ANY HAZARDOUS WASTE OR SUBSTANCE INCLUDING,
WITHOUT LIMITATION, ASBESTOS, PCB AND RADON. BUYER
ACKNOWLEDGES THAT BUYER IS A SOPHISTICATED BUYER FAMILIAR WITH
THIS TYPE OF
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PROPERTY AND THAT, SUBJECT ONLY TO THE EXPRESS WARRANTIES SET
FORTH IN THIS AGREEMENT AND CLOSING DOCUMENTS, BUYER WILL BE
ACQUIRING THE PROPERTY "AS IS AND WHERE IS, WITH ALL FAULTS,"
IN ITS PRESENT STATE AND CONDITION, SUBJECT ONLY TO NORMAL
WEAR AND TEAR AND BUYER SHALL ASSUME THE RISK THAT ADVERSE
MATTERS AND CONDITIONS MAY NOT HAVE BEEN REVEALED BY BUYER'S
INSPECTIONS AND INVESTIGATIONS. BUYER SHALL ALSO ACKNOWLEDGE
AND AGREE THAT THERE ARE NO ORAL AGREEMENTS, WARRANTIES OR
REPRESENTATIONS, COLLATERAL TO OR AFFECTING THE PROPERTY BY
SELLER, ANY AGENT OF SELLER OR ANY THIRD PARTY. THE TERMS AND
CONDITIONS OF THIS PARAGRAPH SHALL SURVIVE THE CLOSING, AND
NOT MERGE WITH THE PROVISIONS OF ANY CLOSING DOCUMENTS. SELLER
SHALL NOT BE LIABLE OR BOUND IN ANY MANNER BY ANY ORAL OR
WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING
TO THE PROPERTY FURNISHED BY ANY REAL ESTATE BROKER, AGENT,
EMPLOYEE, SERVANT OR OTHER PERSON, UNLESS THE SAME ARE
SPECIFICALLY SET FORTH OR REFERRED TO IN THIS AGREEMENT.
8. Representations and Warranties of Buyer. Buyer hereby represents and
warrants to Seller as follows:
8.1. Buyer is a limited liability company duly organized and
validly existing under the laws of the State of California.
Buyer has full power and authority to enter into this
Agreement, to perform this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and
performance of this Agreement and all documents contemplated
hereby by Buyer have been duly and validly authorized by all
necessary action on the part of Buyer and all required
consents and approvals have been duly obtained and will not
result in a breach of any of the terms or provisions of, or
constitute a default under any indenture, agreement or
instrument to which Buyer is a party. This Agreement is a
legal, valid and binding obligation of Buyer, enforceable
against Buyer in accordance with its terms, subject to the
effect of applicable bankruptcy, insolvency, reorganization,
arrangement, moratorium or other similar laws affecting the
rights of creditors generally.
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9. Conditions Precedent to Closing.
The obligations of Buyer pursuant to this Agreement shall, at the
option of Buyer, be subject to the following conditions precedent:
9.1. All of the representations, warranties and agreements of
Seller set forth in this Agreement shall be true and correct
in all material respects as of the date hereof, and Seller
shall not have on or prior to closing, failed to meet, comply
with or perform in any material respect any conditions or
agreements on Seller's part as required by the terms of this
Agreement.
9.2. There shall be no change in the matters reflected in the Title
Report, and there shall not exist any encumbrance or title
defect affecting the Property not described in the Title
Report except for the Permitted Exceptions or matters to be
satisfied at closing.
9.3. Unless Seller receives notice from Buyer at least thirty (30)
days prior to closing, effective as of closing, the management
agreement affecting the Property shall be terminated by Seller
and any and all termination fees incurred as a result thereof
shall be the sole obligation of Seller.
9.4. Seller shall have operated the Property from and after the
date hereof in substantially the same manner as prior thereto.
9.5. If any such condition is not fully satisfied by closing, Buyer
shall so notify Seller and may terminate this Agreement by
written notice to Seller whereupon this Agreement may be
canceled, upon return of the Due Diligence Items the Deposit
shall be paid to Buyer and, thereafter, neither Seller nor
Buyer shall have any continuing obligations hereunder.
9.6. If Buyer notifies Seller of a failure to satisfy the
conditions precedent set forth in this paragraph, Seller may,
within five (5) days of receipt of Buyer's Notices agree to
satisfy the condition by written notice to Buyer, and Buyer
shall thereupon be obligated to close the transaction provided
Seller so satisfies such condition. If Seller fails to agree
to cure or fails to cure such condition by the Closing Date,
this Agreement shall be canceled and the Deposit shall be
returned to Buyer and neither party shall have any further
liability hereunder.
9.7. If Buyer's acquisition of the Property is part of a
tax-deferred exchange pursuant to Section 1031 of the Code, it
is a condition precedent to the closing of this Escrow that
Buyer is able to complete an exchange for all or a portion of
its relinquished property pursuant to an Exchange
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Agreement between Buyer and Accommodator. Seller agrees to
execute such documents or instruments as may be necessary or
appropriate to evidence such exchange, provided that Seller's
cooperation in such regard shall be at no additional cost,
expense, or liability whatsoever to Seller, and that no
additional delays in the scheduled Close of Escrow are
incurred unless mutually agreed upon by all parties to this
Agreement.
The obligations of Seller pursuant to this Agreement shall, at the option of
Seller, be subject to the following conditions precedent:
9.8. All of the representations, warranties and agreements of Buyer
set forth in this Agreement shall be true and correct in all
material respects as of the date hereof, and Buyer shall not
have on or prior to closing, failed to meet, comply with or
perform in any material respect any conditions or agreements
on Buyer's part as required by the terms of this Agreement.
9.9. The Lender has approved the Loan Assumption on terms which
release the Seller and all current guarantors from liability
for the Loan.
10. Damage or Destruction Prior to Close of Escrow.
In the event that the Property should be damaged by any casualty prior
to the Close of Escrow, then if the cost of repairing such damage, as
estimated by an architect or contractor retained pursuant to the mutual
agreement of the parties, is:
10.1. Less than Two Hundred Fifty Thousand Dollars ($250,000), the
Close of Escrow shall proceed as scheduled and any insurance
proceeds shall be distributed to Buyer to the extent not
expended by Seller for restoration;
or if said cost is:
10.2. Greater than Two Hundred Fifty Thousand Dollars ($250,000),
then either Seller or Buyer may elect to terminate this
Agreement, in which case upon return of the Due Diligence
Items the Deposit shall be returned to Buyer and neither party
shall have any further obligation to the other except for
Buyer's indemnification obligations under Paragraph 5.
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11. Eminent Domain.
11.1. If, before the Close of Escrow, proceedings are commenced for
the taking by exercise of the power of eminent domain of all
or a material part of the Property which, as reasonably
determined by Buyer, would render the Property unacceptable to
Buyer or unsuitable for Buyer's intended use, Buyer shall have
the right, by giving notice to Seller within thirty (30) days
after Seller gives notice of the commencement of such
proceedings to Buyer, to terminate this Agreement, in which
event this Agreement shall terminate, the Deposit shall be
returned to Buyer and neither party shall have any further
obligation to the other except for Buyer's indemnification
under Paragraph 5. If, before the Close of Escrow, proceedings
are commenced for the taking by exercise of the power of
eminent domain of less than such a material part of the
Property, or if Buyer has the right to terminate this
Agreement pursuant to the preceding sentence but Buyer does
not exercise such right, then this Agreement shall remain in
full force and effect and, at the Close of Escrow, the
condemnation award (or, if not therefore received, the right
to receive such portion of the award) payable on account of
the taking shall be transferred in the same manner as title to
the Property is conveyed. Seller shall give notice to Buyer
within three (3) business days after Seller's receiving notice
of the commencement of any proceedings for the taking by
exercise of the power of eminent domain of all or any part of
the Property.
12. Notices.
12.1. All notices, demands, or other communications of any type
given by any party hereunder, whether required by this
Agreement or in any way related to the transaction contracted
for herein, shall be void and of no effect unless given in
accordance with the provisions of this Paragraph. All notices
shall be in writing and delivered to the person to whom the
notice is directed, either in person, by United States Mail,
as a registered or certified item, return receipt requested by
telecopy or by Federal Express. Notices delivered by mail
shall be deemed given when received. Notices by telecopy or
Federal Express shall be deemed received on the business day
following transmission. Notices shall be given to the
following addresses:
Seller: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Triple Net Properties, LLC
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇. #▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
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(▇▇▇) ▇▇▇-▇▇▇▇ fax
With Required Copy to: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
The Federal Reserve Bank Building,
15th Floor
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ fax
Buyer: Pacific Home Equitites LLC
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ Fax
With Required Copy to: ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇, ext11
(▇▇▇) ▇▇▇-▇▇▇▇
13. Remedies.
13.1. Defaults by Seller. If there is any default by Seller under
this Agreement, following notice to Seller and seven (7) days,
during which period Seller may cure the default, Buyer may, at
its option, (a) declare this Agreement terminated in which
case the Deposit shall be returned to Buyer or (b) treat this
Agreement as being in full force and effect and bring an
action against Seller for specific performance.
13.2. Defaults by Buyer. If there is any default by Buyer under this
Agreement, following notice to Buyer and seven (7) days,
during which period Buyer may cure the default, then Seller
may, as its sole remedy, declare this Agreement terminated, in
which case the Deposit shall be paid to Seller as liquidated
damages and each party shall thereupon be relieved of all
further obligations and liabilities, except any which survive
termination. In the event this Agreement is terminated due to
the default of Buyer hereunder, Buyer shall deliver to Seller,
at no cost to Seller, the Due Diligence Items and all of
Buyer's Reports.
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13.3. ARBITRATION OF DISPUTES. ANY CLAIM, CONTROVERSY OR DISPUTE,
WHETHER SOUNDING IN CONTRACT, STATUTE, TORT, FRAUD,
MISREPRESENTATION OR OTHER LEGAL THEORY, RELATED DIRECTLY OR
INDIRECTLY TO THIS AGREEMENT, WHENEVER BROUGHT AND WHETHER
BETWEEN THE PARTIES TO THIS AGREEMENT OR BETWEEN ONE OF THE
PARTIES TO THIS AGREEMENT AND THE EMPLOYEES, AGENTS OR
AFFILIATED BUSINESSES OF THE OTHER PARTY, SHALL BE RESOLVED BY
ARBITRATION AS PRESCRIBED IN THIS SECTION. THE FEDERAL
ARBITRATION ACT, 9 U.S.C. Sections 1-15, NOT STATE LAW, SHALL
GOVERN THE ARBITRABILITY OF ALL CLAIMS, AND THE DECISION OF
THE ARBITRATOR AS TO ARBITRABILITY SHALL BE FINAL.
A SINGLE ARBITRATOR WHO IS A RETIRED FEDERAL OR CALIFORNIA
JUDGE SHALL CONDUCT THE ARBITRATION UNDER THE THEN CURRENT
RULES OF THE AMERICAN ARBITRATION ASSOCIATION (THE "AAA"). THE
ARBITRATOR SHALL BE SELECTED BY MUTUAL AGREEMENT ON THE
ARBITRATOR WITHIN THIRTY (30) DAYS OF WRITTEN NOTICE BY ONE
PARTY TO THE OTHER INVOKING THIS ARBITRATION PROVISION, IN
ACCORDANCE WITH AAA PROCEDURES FROM A LIST OF QUALIFIED PEOPLE
MAINTAINED BY THE AAA. THE ARBITRATION SHALL BE CONDUCTED IN
SANTA ANA, CALIFORNIA AND ALL EXPEDITED PROCEDURES PRESCRIBED
BY THE AAA RULES SHALL APPLY.
THERE SHALL BE NO DISCOVERY OTHER THAN THE EXCHANGE OF
INFORMATION WHICH IS PROVIDED TO THE ARBITRATOR BY THE
PARTIES. THE ARBITRATOR SHALL HAVE AUTHORITY ONLY TO GRANT
SPECIFIC PERFORMANCE AND TO ORDER OTHER EQUITABLE RELIEF AND
TO AWARD COMPENSATORY DAMAGES, BUT SHALL NOT HAVE THE
AUTHORITY TO AWARD PUNITIVE DAMAGES OR OTHER NONCOMPENSATORY
DAMAGES OR ANY OTHER FORM OF RELIEF. THE ARBITRATOR SHALL
AWARD TO THE PREVAILING PARTY ITS REASONABLE ATTORNEYS' FEES
AND COSTS AND OTHER EXPENSES INCURRED IN THE ARBITRATION,
EXCEPT THE PARTIES SHALL SHARE EQUALLY THE FEES AND EXPENSES
OF THE ARBITRATOR. THE ARBITRATOR'S DECISION AND AWARD SHALL
BE FINAL AND BINDING, AND JUDGMENT ON THE AWARD RENDERED BY
THE ARBITRATOR MAY BE ENTERED IN ANY COURT HAVING JURISDICTION
THEREOF.
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14. Assignment.
Buyer may assign its rights under this Agreement to an entity in which
Buyer has a significant interest.
15. Interpretation and Applicable Law.
This Agreement shall be construed and interpreted in accordance with
the laws of the state in which the Property is located (the "State").
Where required for proper interpretation, words in the singular shall
include the plural; the masculine gender shall include the neuter and
the feminine, and vice versa. The terms "successors and assigns" shall
include the heirs, administrators, executors, successors, and assigns,
as applicable, of any party hereto.
16. Amendment.
This Agreement may not be modified or amended, except by an agreement
in writing signed by the parties. The parties may waive any of the
conditions contained herein or any of the obligations of the other
party hereunder, but any such waiver shall be effective only if in
writing and signed by the party waiving such conditions and
obligations.
17. Attorney's Fees.
In the event it becomes necessary for either party to file a suit or
arbitration to enforce this Agreement or any provisions contained
herein, the prevailing party shall be entitled to recover, in addition
to all other remedies or damages, reasonable attorneys' fees and costs
of court incurred in such suit or arbitration.
18. Entire Agreement; Survival.
This Agreement (and the items to be furnished in accordance herewith)
constitutes the entire agreement between the parties pertaining to the
subject matter hereof and supersedes all prior and contemporaneous
agreements and understandings of the parties in connection therewith.
No representation, warranty, covenant, agreement, or condition not
expressed in this Agreement shall be binding upon the parties hereto
nor affect or be effective to interpret, change, or restrict the
provisions of this Agreement. The obligations of the parties hereunder
and all other provisions of this Agreement shall survive the closing or
earlier termination of this Agreement, except as expressly limited
herein.
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19. Multiple Originals only; Counterparts.
Numerous agreements may be executed by the parties hereto. Each such
executed copy shall have the full force and effect of an original
executed instrument. This Agreement may be executed in any number of
counterparts, all of which when taken together shall constitute the
entire agreement of the parties.
20. Acceptance.
Time is of the essence of this Agreement. The date of execution of this
Agreement by Seller shall be the date of execution of this Agreement.
If the final date of any period falls upon a Saturday, Sunday, or legal
holiday under Federal law, the laws of the State or the laws of the
State of California if it is not the State, then in such event the
expiration date of such period shall be extended to the next day which
is not a Saturday, Sunday, or legal holiday under Federal law, the laws
of the State or the State of California if it is not the State.
21. Real Estate Commission.
Seller and Buyer each represent and warrant to the other that neither
Seller nor Buyer has contracted or entered into any agreement with any
real estate broker, agent, finder or any other party in connection with
this transaction, and that neither party has taken any action which
would result in any real estate broker's, finder's or other fees or
commissions being due and payable to any party with respect to the
transaction contemplated hereby, except that Seller has contracted with
Marcus & Millichap as its broker and will pay any commission due to
said broker. Each party hereby indemnifies and agrees to hold the other
party harmless from any loss, liability, damage, cost, or expense
(including reasonable attorneys' fees) resulting to the other party by
reason of a breach of the representation and warranty made by such
party in this paragraph.
22. Approval.
The consummation of this transaction shall be subject to the final
approval by the ▇▇▇▇▇ Board. The Seller shall provide written notice to
the Buyer no later than May 29, 2003 as to whether the ▇▇▇▇▇ Board has
approved the transaction. The Seller shall, within three business days
of the date this Agreement is fully executed, deposit with the Escrow
Holder funds in the amount of Fifty Thousand Dollars ($50,000.00)
("Seller's Deposit"). In the event that the ▇▇▇▇▇ Board does not
approve this transaction, the Seller
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shall direct the Escrow Holder to release the Seller's Deposit to the
Buyer. Upon receipt from the Seller that the ▇▇▇▇▇ Board has approved
the transaction, the Escrow Holder shall immediately release the
Seller's Deposit to the Seller.
23. Confidentiality.
Buyer agrees that, prior to the closing, all Property information
received by Buyer shall be kept confidential as provided in this
paragraph. Without the prior written consent of Seller, prior to the
closing, the Property information shall not be disclosed by Buyer or
its representatives, in any manner whatsoever, in whole or in part,
except (1) to Buyer's representatives who need to know the Property
information for the purpose of evaluating the Property and who are
informed by the Buyer of the confidential nature of the Property
information; (2) as may be necessary for Buyer or Buyer's
representatives to comply with applicable laws, including, without
limitation, governmental, regulatory, disclosure, tax and reporting
requirements; to comply with other requirements and requests of
regulatory and supervisory authorities and self-regulatory
organizations having jurisdiction over Buyer or Buyer's
representatives; to comply with regulatory or judicial processes; or to
satisfy reporting procedures and inquiries of credit rating agencies in
accordance with customary practices of Buyer or its affiliates; and (3)
to prospective tenants of the Property.
THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK
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SIGNATURE PAGE FOR
Pahrump Valley Junction Shopping Center
EXECUTED on this the ____ day of _________, 2003.
SELLER:
▇▇▇▇▇ - Pahrump, LLC, a Virginia limited liability company
By: Triple Net Properties, LLC, a Virginia limited
liability company, its Manager
By:_________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
EXECUTED on this the ____ day of _________, 2003.
BUYER:
Pacific Home Equities LLC
By:________________________________________________
▇▇▇▇ ▇▇▇▇▇
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