AGREEMENT OF SALE
This Agreement of Sale ("Agreement") is made on December 4, 2001
between RED XXXX BREWING COMPANY, whose address is 0000 Xxxxxxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 ("Seller" or "Red Xxxx") and
Buyer's Name: Westrum Land Development, LLC ("Buyer")
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Buyer's Address: 000 Xxxxxxxx Xxxxx, Xx. Xxxxxxxxxx, XX 00000
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Buyer's SSN and/or EIN:
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Buyer's Phone Number: 000-000-0000
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Buyer's Fax Number: 000-000-0000
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1. PURCHASE. Seller agrees to sell and Buyer agrees to buy the
Property described in this Agreement.
2. PROPERTY. The Property to be sold consists of (a) the land and all
the buildings, improvements, and fixtures on the land, if any; (b) all of
Seller's rights and obligations relating to the land including, but limited to,
all leasehold interests. Together, these are referred to as the "Property." The
Property to be sold is situate in the City of Philadelphia, Philadelphia County,
Pennsylvania, identified as 3100-3123 0/0 Xxxxxxxxx Xxxxxx and 0000-00 X 00xx
Xxxxxx, and 0000-00 X. Xxxxxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000 and consists of
all of the real property owned by Seller at this location. Seller represents and
warrants that the Property includes all portions of Jefferson Street between
Glenwood Avenue and 31st Street, and that Seller has, and will convey to Buyer,
exclusive right and use of such portion of Jefferson Street at Closing. The
Property is shown on Exhibit "A" attached hereto.
3. PURCHASE PRICE. The purchase price is $890,000 (the "Purchase
Price"). Buyer will pay the Purchase Price as described in this paragraph.
4. PAYMENT OF PURCHASE PRICE. Buyer will pay the Purchase Price as
follows. Upon signing of this Agreement, a deposit of $100,000 (the "Deposit")
will be paid. The Deposit shall be held by Buyer's title insurance company
("Escrow Agent") in a custodial escrow bank account until closing. If closing is
completed in accordance with this Agreement, the principal amount of the Deposit
and any interest earned thereon, shall be credited to Buyer and shall be applied
to reduce the Purchase Price. If there is a dispute between Buyer and Seller
over who is entitled to the Deposit, Escrow Agent will not be responsible to
resolve that dispute and will not be liable to either Buyer or Seller for
refusing to release the Deposit without an adequate written agreement between
Buyer and Seller or a final order of a court of competent jurisdiction.
The balance of the Purchase Price, subject to adjustments, shall be
paid by Buyer in cash or by certified or bank cashier's check at the time of
closing and delivery of the deed.
5. CASH TRANSACTION. The Buyer represents and warrants that Buyer
presently has sufficient cash and assets to pay the Purchase Price in full. This
Agreement is not contingent in any way upon Buyer obtaining a mortgage or any
other type of financing to complete the purchase.
6. TIME AND PLACE OF CLOSING. The closing shall take place on or
before February 4, 2002. The closing shall be held at such mutually convenient
place as may be agreed between Buyer and Seller. The closing date is of the
essence of this Agreement. Buyer shall give Seller at least ten (10) days
written notice of the date and place of settlement.
7. DEFAULT. If Buyer fails to consummate the settlement as required
by, and in compliance with the terms of this Agreement, Seller shall: keep the
Deposit as liquidated damages and not as a penalty (this means that Seller is
conclusively presumed to have suffered damages in the amount of the Deposit and
may keep the Deposit without proving those damages in court) as Seller's sole
and exclusive remedy. In order to enforce the provisions of this Agreement
against Buyer, Seller shall not be required to formally offer (tender) to Buyer
a deed to the Property if Buyer defaults in paying the balance of the Purchase
Price. Buyer acknowledges that its waiver of any right it may have to prove that
Seller has suffered actual damages in an amount less than the Deposit as set
forth above is a material inducement to Seller entering into this Agreement with
Buyer and that were it not for that waiver, Seller would not have entered into
this Agreement with Buyer.
8. TRANSFER OF OWNERSHIP. At the settlement, Seller will transfer
ownership of the Property to Buyer. Seller will give Buyer a properly executed
special warranty deed (the "Deed").
9. PREPARATION OF DOCUMENTS/CONVEYANCING EXPENSES. The Deed shall be
prepared, acknowledged and recorded by Seller, and recorded at the expense of
Buyer. Said document must be presented by Seller to Buyer for examination and
approval at least ten (10) days prior to the date fixed for the settlement. All
other settlement expenses including, without limitation, title searches, title
insurance, and cost of survey shall be paid by Buyer. Buyer agrees to provide
Seller with a copy of Buyer's title insurance commitment at least ten (10) days
before the time fixed for the settlement.
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10. TRANSFER TAXES. All real estate transfer taxes imposed upon this
sale shall be divided and borne equally between the Buyer and the Seller.
11. CONDITION OF TITLE AND COSTS.
(a) The Property is to be conveyed free and clear of all liens,
encumbrances, and easements, excepting however the following: existing
ordinances, easements of record, privileges or rights of public service
companies (the "Encumbrances"), if any; otherwise the title to the Property
shall be good and marketable and such as will be insured, by a reputable title
insurance company licensed to do business in Pennsylvania, at regular rates. The
Encumbrances of record shall be limited to the exceptions at nos. 3, 4 and 5 on
page 7 of the title commitment attached hereto as Exhibit "B" (the "Title
Commitment") and Buyer shall have confirmed that such Encumbrances do not
adversely impact the use of the Property.
(b) In the event Seller is unable to give good and marketable title
and such as will be insured by a reputable title insurance company at regular
rates, as aforesaid, Buyer shall have the option of taking such title as Seller
can give without changing the Purchase Price or of being repaid all monies paid
by Buyer to Seller on account of the Purchase Price in which event this
Agreement shall become null and void.
(c) Buyer shall pay for the following:
The premium for mechanics' lien insurance and/or any title search;
The premium for flood insurance and/or fire insurance with extended coverage;
Buyer's customary settlement costs and charges.
(d) Seller shall produce such documentation and pay such amounts as
are required to remove exception nos. 12 through 25 of the Title Commitment.
Seller is not aware of any mortgages or other encumbrances recorded against the
Property except the mortgages and other encumbrances set forth in the Title
Commitment.
(e) Seller shall not encumber the Property after the date of this
Agreement.
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If Seller is unable to transfer title as required by this Agreement,
Seller shall have an additional sixty (60) days from the date fixed for
settlement to correct any defect in title. If at the end of the additional sixty
(60) days Seller is still unable to transfer title in accordance with this
Agreement, Buyer may cancel this Agreement. If Buyer cancels this Agreement,
Seller shall instruct Escrow Agent in writing to pay to Buyer the entire amount
of the Deposit held by Escrow Agent, this Agreement shall become null and void,
and Seller shall not be liable for any other claim. In lieu of canceling this
Agreement, Buyer may, however, accept such title as Seller can convey, without
any reduction in the Purchase Price.
12. ZONING AND CODE COMPLIANCE MATTERS. The zoning classification
applicable to the premises is "Industrial (G-2)". The Buyer is advised that a
Use Registration Permit must be obtained prior to making use of the premises.
Seller covenants and agrees that at Closing the Property will be in compliance
with all governmental and quasi-governmental laws, rules, regulations and
ordinances. Seller shall provide to Buyer at or before Closing a written
certification from City of Philadelphia, Department of Licenses and Inspection
confirming the zoning classification of the Property as Industrial (G-2), and
that there are no notices of any uncorrected municipal code violations.
13. HIGHWAY ACCESS. Access to a public road may require issuance of a
highway occupancy permit from the Department of Transportation.
14. ASSESSMENTS FOR MUNICIPAL IMPROVEMENTS. Certain municipal
improvements such as sidewalks and sewers may result in the municipality
charging the property owners to pay for the improvement. All assessed charges
against the Property for work completed before the date of this Agreement will
be paid by Seller at or before the settlement. Seller shall not be liable for
any work done or ordered done after the date of execution of this Agreement by
any municipality, agency, or other public authority, or for any notice issued
after the date of execution of this Agreement which directs any action to be
done or not to be done on, in, or to the Property by any municipality, agency,
or other public authority, and Buyer agrees to take title subject to any lien
that may be recorded as a result thereof.
15. ADJUSTMENTS AT SETTLEMENT. Buyer and Seller agree to adjust the
following expenses as of the settlement date (with Buyer responsible for amounts
due on the date of settlement): (1) all real estate taxes and assessments on the
Property for the current year (in no event shall Seller be charged with or
responsible for any increase in the real estate taxes after the settlement); and
(2) any and all utility charges, if any.
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16. POSSESSION. At the settlement, Buyer will be given possession of
the Property by delivery of the Deed, subject to existing leases.
17. LEASES.
(a) Buyer acknowledges that this sale is subject to certain leases.
At Settlement, the parties shall execute an Assignment of Leases, whereby Seller
shall assign to Buyer all rights and duties of all leases not terminated as of
the date of Settlement.
(b) Seller represents and warrants to Buyer that the existing
leases at the Property consist only of the following:
1. A month-to-month lease with Red Xxxx Brewery for 18,500
square feet (as shown on the plan attached hereto as Exhibit "C") (the "Red Xxxx
Space"); and
2. A month-to-month lease with Allied Moving and Storage, Inc.
("Allied") for 6,100 square feet currently occupied by Allied as of the date of
this Agreement (the "Allied Space"); and
3. A month-to-month lease with Friendly's Distribution, Inc.
(d/b/a Welches) ("Friendly's") for 23,979 square feet (as shown on the plan
attached hereto as Exhibit "E") (the "Friendly's Space"); and
4. A lease agreement dated January 7, 1999 with Nextel
Communications of Mid-Atlantic, Inc., a copy of which is attached hereto as
Exhibit "F" (the "Nextel Lease").
(c) Seller further represents and warrants to Buyer that there are
no leases encumbering the Property except as set forth in subsection (b) above.
(d) At the time of Closing, Seller will deliver to Buyer a written
assignment of all of its right, title and interest in and to the Nextel Lease.
(e) Between the date of this Agreement and Closing, Seller and
Buyer will enter into a written agreement of lease for the Red Xxxx Space (the
"Red Xxxx Lease"), which Red Xxxx Lease will have a term of two (2) years from
the date of Closing, will have a rental of $27,600 per annum for the first year
and $28,290 per annum for the second year, and will otherwise be on such terms
and conditions as will be acceptable to Buyer and Seller. Red Xxxx shall be
entitled to receive a rental credit of $200 per month for each month that the
Friendly's Lease (as hereinafter defined) is in full force and effect to
reimburse Red Xxxx for the electricity being paid by Red Xxxx for the Friendly's
Space.
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(f) Prior to the completion of Closing, Red Xxxx will provide to
Buyer the following:
1. A written lease with Friendly's for the Friendly's Space
with a term of one (1) year from the date of Closing, a rental of $28,200 per
annum, and on such other terms and conditions as are acceptable to Buyer (the
"Friendly's Lease'); and
2. A written lease with Allied for the Allied Space with a term
of one (1) year from the date of Closing, a rental of $13,800 per annum, and on
such other terms and conditions as are acceptable to Buyer (the "Allied Lease").
3. Buyer and the respective tenants will execute the Allied
Lease and the Friendly's Lease at or prior to Closing.
(g) Prior to the completion of Closing, Red Xxxx will provide to
Buyer a written guaranty agreement, on such terms and conditions as are
acceptable to Red Xxxx and Buyer, whereby Red Xxxx agrees to guaranty and act as
surety for the payment of the rental and other payments due under the Red Xxxx
Lease, the Nextel Lease, the Friendly's Lease and the Allied Lease for the first
year of each lease, up to an aggregate amount of $90,120.
(h) In the event that Red Xxxx obtains a tenant for the available
space in the Property (other than Friendly's or Allied) and Buyer executes a
lease with such tenant(s), Red Xxxx shall be entitled to a finder's fee of 25
percent of the monthly rental payments as and when received by Buyer in the
first year of the term of such lease and 15% of the monthly rental payments as
and when received by Buyer for each year of the term thereafter.
(i) If any new tenants occupy any portions of the Property, Buyer
and Seller agree to provide such tenants with electrical service in a fair and
equitable manner.
(j) Office Space. The Red Xxxx Lease shall provide that Buyer will
have the right to use any available office space located in the Red Xxxx Space.
18. INSPECTION OF THE PROPERTY. BUYER ACKNOWLEDGES THAT BUYER HAS BEEN
GIVEN THE OPPORTUNITY TO AND HAS ADEQUATELY INSPECTED THE PROPERTY AND/OR HAS
WAIVED THE OPPORTUNITY TO MAKE SUCH AN INSPECTION. BUYER FURTHER ACKNOWLEDGES
THAT BUYER HAS ENTERED INTO THIS AGREEMENT AS A RESULT OF THE INSPECTION MADE BY
BUYER AND NOT AS A RESULT OF ANY ADVERTISEMENT, HANDBILL, OR ANY OTHER
REPRESENTATION, OR WARRANTY, EITHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, MADE BY
SELLER, ANY OF ITS EMPLOYEES, REPRESENTATIVES, AGENTS, OR THE LIKE, ANY SELLING
AGENT OR BY XXXXXXX. BUYER FURTHER AGREES THAT NEITHER SELLER NOR XXXXXXX SHALL
BE RESPONSIBLE FOR ANY ERRORS IN ANY ADVERTISEMENT, HANDBILLS, OR ANNOUNCEMENT
MADE BY SELLER OR XXXXXXX, NOR FOR ANY AGREEMENT, CONDITION, OR REPRESENTATION,
INCLUDING BUT NOT LIMITED TO ANY REPRESENTATION REGARDING THE VALUE OF ANY REAL
ESTATE, OR ANY STIPULATION, ORAL OR WRITTEN, NOT CONTAINED IN THIS AGREEMENT.
BUYER HAS MADE AN INDEPENDENT DETERMINATION OF THE VALUE OF THE PROPERTY AND HAS
NOT RELIED ON ANY INFORMATION FROM SELLER OR SELLER'S AGENT(S) REGARDING THE
PROPERTY'S VALUE.
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19. PHYSICAL CONDITION OF THE PROPERTY. The Property is being sold "As
Is, Where Is" and "with all faults and defects", and Buyer acknowledges that
Seller has not made and Buyer has not relied upon any representation or warranty
regarding the Property, except as set forth in this Agreement. Seller does not
make any claims or promises whatsoever about the Property including, without
limitation, the condition or value of the Property. Neither Seller nor Xxxxxxx
Corporation ("Xxxxxxx") makes any representations as to the presence or absence
of any hazardous or toxic substances on the Property.
20. ENVIRONMENTAL ISSUES. Buyer, at Buyer's expense, has the right to
have the premises inspected for possible environmental hazards, if it deems the
same necessary, by a reputable environmental investigation company. A copy of
said company's report shall be submitted to Seller within twenty (20) days of
the date of this Agreement. If the inspection reveals evidence of environmental
hazards of such degree that Buyer desires to have said hazards remediated,
Seller shall have thirty (30) days from the date of Seller's receipt of said
report to notify Buyer whether Seller will effect the remediation, and upon what
terms and conditions or decline to do so. If Seller declines, Buyer shall have
ten (10) days thereafter to notify Seller whether Buyer will go to settlement
without said remediation being effected (with no diminution of sale price), or
declare this Agreement null and void, in which event all down money shall be
returned to Buyer and copies of this Agreement shall be returned to Escrow Agent
for cancellation. If Seller agrees to remediate, then Seller and Buyer shall
have ten (10) days to agree to the terms and conditions of Seller's remediation
proposal. Failing notification in writing to the contrary, Buyer shall be deemed
to have accepted Seller's remediation proposal. If Seller and Buyer do not agree
to the terms of the remediation, then Buyer can terminate this Agreement and the
deposit monies shall be returned to Buyer.
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Buyer shall not conduct any testing permitted hereunder in a manner so
as to cause damage, loss, cost, or expense to Seller or the Property, and Buyer
will indemnify, protect, defend, and hold Seller and the Property harmless from
and against any damage, loss, liability, cost, or expense, including, without
limitation, Seller's reasonable counsel fees and costs of suit which are
suffered as a result of Buyer's inspections or testing of the Property. The
foregoing indemnity shall survive closing or the termination or cancellation of
this Agreement. Without limiting the foregoing, if any inspection or test
conducted by Buyer pursuant hereto damages the Property in any way, Buyer will
restore the Property to the same condition as existed before the inspection or
test. Prior to any testing, Buyer's contractors shall produce evidence of
insurance satisfactory to Seller and shall name Seller as an additional insured
on that policy.
21. FLOOD PLAIN. Buyer acknowledges that portions of said Property may
be in a flood plain area.
22. FIXTURES. All plumbing, heating and lighting fixtures and systems
in and upon the Property and forming a part thereof, and other permanent
fixtures affixed to the Property that are owned by Seller, are included in this
sale and the purchase price.
23. PERSONAL PROPERTY. This sale is for real estate only; the
furniture, furnishings, personal property, contents and equipment, whether or
not physically attached to the Property, are not included in this sale or
covered by this Agreement and may be removed by the owners thereof or their
agent prior to Settlement.
24. TAKING OF THE PROPERTY BY EMINENT DOMAIN. If all or a material part
of the Property is taken between the date of this Agreement and the date of
settlement by the exercise of the power of eminent domain by any local, state,
or federal body, Buyer may either: (a) cancel this Agreement and receive a
refund of the Deposit; or (b) complete settlement at the full Purchase Price, in
which case Buyer shall be entitled to an assignment of all rights to the eminent
domain award or compensation.
25. RECORDING. Buyer shall not record this Agreement or any memorandum
of this Agreement in any state, county, or municipal recording office. Any
recording or attempt at recording will be deemed a breach of this Agreement and
be null and void.
26. XXXXXXX AGENT ONLY. Xxxxxxx represents Seller and not Buyer, and
Xxxxxxx'x commission shall be paid by Seller in accordance with the Listing
Agreement for the Sale of Real Estate between Seller and Xxxxxxx. Buyer warrants
that Buyer has not dealt with any real estate agent, broker or salesperson other
than Xxxxxxx, unless such person or entity previously registered with Xxxxxxx in
accordance with Xxxxxxx'x rules and regulations. Buyer covenants to indemnify,
defend and hold Seller harmless from and against claims of any person or entity
for a real estate commission or other compensation arising out of Buyer's
dealing with such other party.
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27. ESCROWEE. It is understood and agreed that Escrow Agent shall not
be held liable by either Seller or Buyer for the performance or nonperformance
of any provision of this Agreement, except to account for any Deposit paid to
it. The obligation of this paragraph shall survive settlement.
28. RISK OF LOSS. Seller shall bear the risk of loss from fire or other
casualties until the time of settlement. In the event of damage by fire or other
casualty to any property included in this sale that is not repaired or replaced
prior to settlement, Buyer shall have the option of rescinding this Agreement
and promptly receiving all monies paid on account of the Purchase Price or
accepting the Property in its then condition together with the proceeds of any
insurance recovery obtainable by Seller. Buyer is hereby notified that Buyer may
insure Buyer's equitable interest in the Property as of the time of execution of
this Agreement.
29. pennsylvania real estate recovery fund. A Real Estate Recovery Fund
has been established by the Commonwealth of Pennsylvania to reimburse any person
who has obtained a final civil judgment against a Pennsylvania real estate
licensee as a result of fraud, misrepresentation, or deceit in a real estate
transaction, if that person has been unable to collect the judgment after
exhausting all legal and equitable remedies. For complete details about the
Fund, call (000) 000-0000.
30. NOTICES. All notices, requests, and other communications under this
Agreement shall be in writing and shall be delivered (i) in person, (ii) by
registered or certified mail, return receipt requested, or (iii) by recognized
overnight delivery service providing positive tracking of items (for example,
Federal Express).
31. MISCELLANEOUS.
(a) All of the representations and warranties contained in this
Agreement, all covenants, agreements, and indemnities made herein, and all
obligations to be performed under the provisions hereof shall survive
settlement.
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(b) The captions in this Agreement are inserted for convenience of
reference only and in no way define, describe, or limit the scope or intent of
this Agreement or any of the provisions hereof.
(c) Formal tender of an executed deed and purchase money is hereby
waived.
(d) This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, legal representatives, successors, and permitted assigns.
(e) This Agreement, including the exhibits attached hereto,
contains the whole agreement as to the Property between Seller and Buyer, and
there are no other terms, obligations, agreements, covenants, representations,
statements, or conditions, oral or otherwise, of any kind whatsoever, concerning
this sale and purchase. This Agreement shall not be altered, amended, changed,
or modified except in writing executed by the parties hereto.
(f) This Agreement shall be construed in accordance with the laws
of the Commonwealth of Pennsylvania.
(g) Both parties to this Agreement have participated fully and
equally in the negotiation and preparation hereof, and therefore, this Agreement
shall not be more strictly construed, or any ambiguities within this Agreement
resolved, against either party hereto.
32. STOCK. At Closing, Seller shall convey to Buyer, free and clear of
all restrictions and/or legends, (i) 25,000 registered shares of the common
stock of Red Xxxx Brewing Company, and (ii) 25,000 registered options to
purchase the commons stock of Red Xxxx Brewing Company at any time after one (1)
year after the Closing at a strike price of $.50 per share.
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IN WITNESS WHEREOF, intending to be legally bound, the parties have
caused this Agreement to be duly executed, under seal, as of the day and year
first above written.
SELLER:
By: /s/ Xxxxx X. Xxxx, President
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By:_____________________________________
By:_____________________________________
BUYER:
By: /s/ Xxxx Xxxxxx
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Westum Land Development LLC
By: Xxxx X. Westum, Managing Member
By:_____________________________________
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EXHIBITS
Exhibit A As-Built Plan prepared by Xxxxxx
Associates, Inc. dated 1/31/97
Exhibit B Title Commitment
Exhibit C Red Xxxx Space
Exhibit D Intentionally Deleted
Exhibit E Friendly's Space
Exhibit F Nextel Lease
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