EXHIBIT 10.21
PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
BETWEEN THE CORT JOINT VENTURE
AND
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ VALLEY HOLDINGS, INC.
ESCROW HOLDER: TITLE COMPANY:
Chicago Title Company Chicago Title Company
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ 16969 Von Karman, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Escrow Officer Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇, Title Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Escrow No.: 8307031-M23 Title Order No.: 8300228
PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
This Purchase and Sale Agreement and Joint Escrow Instructions (the
"Agreement") is made as of June 12, 1998 by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ VALLEY
HOLDINGS, INC., a California corporation ("Seller") and ▇▇▇▇▇ DEVELOPMENT
CORPORATION, a Georgia corporation ("Purchaser").
RECITALS
A. Seller is currently the owner of that certain real property
located in the County of Orange, State of California, commonly known as ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and more particularly described in Exhibit "A"
attached hereto and incorporated herein by this reference (the "Land"). The Land
is currently improved by a concrete tilt up office building containing
approximately 52,000 square feet of space (the "Building"). The Land, the
Building and all other improvements, structures and fixtures thereon are
sometimes collectively referred to herein as the "Real Property."
B. Purchaser wishes to purchase from Seller, and Seller wishes to
sell to Purchaser, the Real Property and the other Property described in Section
1 below in accordance with the Letter of Intent and pursuant to the terms and
conditions of this Agreement.
NOW THEREFORE, in consideration of the mutual covenants, promises
and undertakings set forth in this Agreement, Purchaser and Seller agree as
follows:
1. Purchase and Sale. Upon and subject to the terms and conditions set
forth in this Agreement, Seller hereby agrees to sell to Purchaser and Purchaser
hereby agrees to buy the following:
(a) the Real Property, together with all easements,
hereditaments and appurtenances thereto;
(b) all furniture, furnishings, fixtures, equipment,
machinery, and other tangible personal property owned by Seller and
used by Seller in connection with the management, operation,
maintenance and repair of the Real Property and located on the Real
Property (the "Project Personal Property"); and
(c) all governmental approvals, permits and licenses
pertaining to the Real Property (the "Approvals"), and
(d) all right, title and interest of Seller in and to any
site, architectural, mechanical, electrical, plumbing and structural
plans, studies and related documents pertaining to the Real Property
(the "Project Plans").
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The Real Property, the Project Personal Property, the Approvals and the Project
Plans are collectively referred to herein as the "Property".
2. Purchase Price. The purchase price for the Property (the "Purchase
Price") shall be Six Million Five Hundred Thousand and No/100 Dollars
($6,500,000.00).
3. Method of Payment of Purchase Price. The Purchase Price shall be
payable by Purchaser to Seller as follows:
3.1 Deposit. The amount of One Hundred Thousand and No/100 Dollars
($100,000.00) (the "Deposit") shall be deposited in cash by Purchaser into the
Escrow (as defined in Section 4.1) within two (2) Business Days following the
Opening of Escrow (as defined in Section 4.1). Upon receipt of the Deposit,
Escrow Holder shall invest the same in an interest bearing account acceptable to
Purchaser. Unless Purchaser terminates the Escrow pursuant to this Agreement on
or before the Feasibility Date, the Deposit shall become non-refundable to
Purchaser, provided that Seller shall have fulfilled all of its obligations
hereunder. Purchaser shall receive a credit in the amount of the Deposit against
the Purchase Price in the event that the closing of the Escrow (the "Closing")
takes place at the time and in the manner provided in this Agreement. All
interest earned on the Deposit shall be returned to Purchaser.
3.2 Payment of Balance of Purchase Price. The entire balance of the
Purchase Price shall be paid by Purchaser in cash into the Escrow prior to the
Closing. As used in this Agreement, the term "cash" shall mean immediately
available U.S. funds transferred by certified check or wire transfer.
4. Escrow.
4.1 Opening; Joint Instructions. The purchase and sale of the
Property shall be completed through an escrow (the "Escrow") at the office of
the escrow holder identified on page 1 hereof ("Escrow Holder"). This Agreement
shall constitute joint escrow instructions to the Escrow Holder in connection
with the Escrow. The Escrow shall be deemed to be "opened" as of the date (the
"Opening of Escrow") upon which the Escrow Holder holds fully executed original
counterparts of this Agreement executed by Seller and Purchaser. Escrow Holder
shall promptly notify Purchaser and Seller of the date which constitutes the
Opening of Escrow.
4.2 Additional Instructions. Purchaser and Seller hereby agree to
execute such additional instructions not inconsistent with this Agreement as may
be reasonably required by the Escrow Holder.
4.3 Closing Deadline. As used herein, the "Closing Deadline" shall
mean the date which is three (3) Business Days following the Feasibility Date.
The Closing shall occur as soon as possible after the satisfaction of all of the
conditions contained in this Agreement, but in no event later than the Closing
Deadline. Time is specifically of the essence as to the Closing Deadline. The
Closing Deadline shall not be extended except by the mutual written agreement of
Purchaser and Seller.
4.4 Seller's Deliveries Prior to Closing. Seller shall deliver to
the Escrow Holder, prior to the Closing, the following documents and funds:
(a) a grant deed to the Property, in the form attached hereto
as Exhibit "F", duly executed and acknowledged by Seller and in
recordable form (the "Grant Deed");
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(b) a ▇▇▇▇ of sale in the form attached hereto as Exhibit "B"
fully executed by Seller (the "▇▇▇▇ of Sale");
(c) three executed original counterparts of an assignment and
assumption of contracts and warranties in the form attached hereto
as Exhibit "C", executed by Seller (the "Assignment of Contracts and
Warranties");
(d) three executed original counterparts of an assignment and
assumption of leases in the form attached hereto as Exhibit "D",
executed by Seller (the "Assignment of Leases");
(e) federal and state non-foreign seller affidavits in the
forms attached hereto as Exhibits "E-1" and "E-2", respectively,
executed by Seller (collectively, the "Affidavits");
(f) a statement of documentary transfer tax due and request
that the tax declaration not be made a part of the permanent record,
in the form attached hereto as Exhibit "G" (the "Transfer Tax
Statement");
(g) an executed original of an estoppel certificate (the
"Tenant Estoppel") in substantially the form of Exhibit "H" hereto
pertaining to the lease (the "Lease") with Cort Furniture Rental
Corporation (the "Tenant") and a Subordination, Nondisturbance and
Attornment Agreement (the "SNDA") between the Tenant and Purchaser's
lender (if any) in form and content reasonably acceptable to
Purchaser's lender (if any) and the Tenant. Although Seller shall
use reasonable efforts to obtain the Tenant Estoppel and the SNDA,
Seller's inability to obtain the Tenant Estoppel and the SNDA by the
Closing Deadline shall not constitute a breach or default by Seller.
However, Purchaser's receipt of the Tenant Estoppel and the SNDA
shall be a condition precedent to Purchaser's obligation to acquire
the Property;
(h) an executed original of a lease guaranty (the "Lease
Guaranty") in substantially the form of Exhibit "I" hereto executed
by Cort Business Services Corporation, a Delaware corporation
("Lease Guarantor"). Although Seller shall use reasonable efforts to
obtain the Lease Guaranty, Seller's inability to obtain the Lease
Guaranty by the Closing Deadline shall not constitute a breach or
default by Seller. However, Purchaser's receipt of the Lease
Guaranty shall be a condition precedent to Purchaser's obligation to
acquire the Property; and
(i) all other sums and documents reasonably required of Seller
by Escrow Holder to carry out and close this Escrow pursuant to this
Agreement.
4.5 Purchaser's Deliveries Prior to Closing. Purchaser shall deliver
to the Escrow Holder, prior to the Closing, the balance of the Purchase Price
and the following documents:
(a) three executed original counterparts of the Assignment of
Contracts and Warranties;
(b) three executed original counterparts of the Assignment of
Leases; and
(c) all other sums and documents reasonably required of
Purchaser by Escrow Holder to carry out and close this Escrow.
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4.6 Actions at Closing. At the Closing, the Escrow Holder shall do
the following:
(a) cause the Grant Deed and the SNDA (if any) to be recorded
in the Official Records of Orange County, California and cause the
Transfer Tax Statement to be delivered to the recorder's office with
instructions to attach the Transfer Tax Statement to the Grant Deed
following recordation of the Grant Deed;
(b) cause the ▇▇▇▇ of Sale, complete original counterparts of
the Assignment of Contracts and Warranties, complete original
counterparts of the Assignment of Leases, the Affidavits, the Tenant
Estoppel, the Lease Guaranty and an owner's policy of title
insurance or commitment therefor pursuant to Section 5.3 hereof to
be delivered to Purchaser; and
(c) deliver to Seller complete original counterparts of the
Assignment of Contracts and Warranties, complete original
counterparts of the Assignment of Leases, and the Purchase Price
(less costs and expenses to be paid by Seller under Section 4.8 and
any amounts required to be withheld under Section 4.4(e) hereof).
4.7 Cancellation of Escrow.
(a) In the event that the Closing does not occur at the time
and in the manner provided in this Agreement due to the material
failure of Purchaser to comply with any of its obligations under
this Agreement ("Purchaser Default"), Seller shall have the right to
cancel the Escrow by written notice to Purchaser and the Escrow
Holder. Upon such cancellation, all costs of the Escrow
(collectively, the "Cancellation Costs") shall be paid by Purchaser.
(b) In the event that the Closing does not occur at the time
and in the manner provided in this Agreement due to the material
failure of Seller to comply with any of its obligations under this
Agreement ("Seller Default"), Purchaser shall have the right to
cancel the Escrow by written notice to Seller and the Escrow Holder.
Upon such cancellation, Seller shall return the Deposit to Purchaser
and the Cancellation Costs shall be paid by Seller.
(c) In the event that the Closing does not occur at the time
and in the manner provided in this Agreement for any reason other
than a Purchaser Default or Seller Default, either Purchaser or
Seller may, at any time after the Closing Deadline, cancel the
Escrow by written notice to the other and to the Escrow Holder. Upon
such cancellation, Seller shall return the Deposit to Purchaser and
the Cancellation Costs shall be divided equally between Purchaser
and Seller.
(d) Upon any cancellation of the Escrow, all instruments and
documents deposited with the Escrow Holder shall be returned to the
parties who deposited the same.
(e) The rights and remedies set forth in this Section 4.7
shall not be exclusive of any other rights or remedies which
Purchaser or Seller may have by law or in equity in the event of
breach of this Agreement, provided however that Seller's exclusive
remedy in the event of a Purchaser Default shall be to receive the
Deposit as full liquidated damages and to require Purchaser to pay
the Cancellation Costs pursuant to Section 4.7(a), above.
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4.8 Fees, Closing Costs and Prorations. The costs incidental to the
Closing shall be paid as follows:
(a) Seller shall pay: (i) the documentary transfer tax payable
in connection with the recordation of the Grant Deed as set forth in
the Transfer Tax Statement; (ii) the premium for the CLTA standard
coverage owner's title policy obtained by Purchaser or, if Purchaser
obtains an ALTA extended coverage owner's policy, then that portion
of the premium which would have been payable for a CLTA standard
coverage owner's policy; (iii) one-half (2) of the Escrow Holder's
escrow fees; and (iv) the broker's commission to ▇▇▇▇▇▇▇ Commercial
Corporation.
(b) Purchaser shall pay: (i) the cost of any title insurance
endorsements requested by Purchaser and, if Purchaser elects to
obtain an ALTA extended coverage owner's policy rather than a CLTA
standard coverage owner's policy, then the portion of the premium
attributable to the ALTA extended coverage; (ii) the cost of
obtaining any survey of the Property obtained by Purchaser; (iii)
the cost of recording the Grant Deed and the SNDA (if any); and (iv)
one-half (2) of the Escrow Holder's escrow fees.
(c) Purchaser and Seller shall each pay their own legal fees
and other incidental expenses incurred in connection with the
transaction contemplated by this Agreement.
(d) Rents which have actually been received by Seller for the
month ("Current Month") in which the Closing occurs shall be
prorated as of the Closing. All rents or charges due prior to the
Current Month and Seller's pro rata share of any unpaid rent for the
Current Month ("Current Month Unpaid Rent") shall be the property of
Seller, and shall be paid over to Seller by Purchaser immediately
upon receipt by Purchaser. Purchaser shall apply payments received
after Closing first to current rent then due and then to past rent
starting with the most recent delinquency. All prepaid rents and
charges for the period following the Closing and all security
deposits or other deposits of tenants held by Seller shall be paid
by Seller to Purchaser at Closing.
(e) All utility charges, maintenance and repair expenses,
taxes, assessments, insurance premiums and all other operating
expenses which are the landlord's responsibility under the Lease
shall be prorated as of the Closing based upon the latest available
information. Any such items which are the responsibility of the
tenant under the Lease shall not be prorated. If supplemental real
property taxes are the landlord's responsibility under the Lease,
then Seller agrees that, after the Closing and upon receipt of a
Supplemental Tax ▇▇▇▇ from the County of Orange Tax Assessor's
Office by Seller or Purchaser, Seller will meet with Purchaser to
determine the amount of any Supplemental Taxes affecting the
Property. Seller shall pay to Purchaser the portion of the
Supplemental Taxes which the parties agree is attributable to the
period of time prior to the Closing.
(f) Any other costs or expenses in connection with the
transaction contemplated by this Agreement shall be apportioned in
the manner customary in the County in which the Property is located.
5. Title.
5.1 Preliminary Title Report. Seller shall obtain and deliver to
Purchaser on or prior to the Opening of Escrow a current preliminary title
report prepared by Chicago Title Insurance Company with respect to the Property
(the "Preliminary Title
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Report") and copies of all underlying title documents referenced in the
Preliminary Title Report.
5.2 Permitted Exceptions. Seller shall convey to Purchaser fee
simple title to the Property, subject only to the following (referred to
collectively herein as the "Permitted Exceptions"):
(a) The Title Company's standard printed exceptions and
exclusions on its standard form CLTA (or, if Purchaser so elects,
its ALTA extended coverage) owner's policy of title insurance;
(b) All other covenants, conditions, restrictions, exceptions,
reservations, rights, rights of way, easements and other matters
(other than deeds of trust and other monetary encumbrances which are
to be paid at Closing) affecting title shown in the Preliminary
Title Report, except any of the same which pursuant to Section 8 are
(i) disapproved by Purchaser, and (ii) which Seller agrees in
writing to cure;
(c) General and special taxes and assessments not then
delinquent; and
(d) Instruments recorded with the mutual approval of Purchaser
and Seller.
5.3 Title Insurance. At the Closing, the Escrow Holder shall deliver
to Purchaser a CLTA standard coverage owner's policy of title insurance (or, if
Purchaser so elects pursuant to Section 5.4, an ALTA extended coverage owner's
policy of title insurance) issued by the Title Company or a commitment by the
Title Company to issue such a policy, with liability in the amount of the
Purchase Price, showing title to the Property to be vested in Purchaser subject
only to the Permitted Exceptions.
5.4 ALTA Extended Coverage Title Policy; Supplements to Preliminary
Title Report. Purchaser may elect to receive an American Land Title Association
extended coverage owner's policy of title insurance, provided that (i) Purchaser
pays for any required survey and the increased premium of an ALTA extended
coverage owner's policy over the premium for a CLTA standard coverage owner's
policy, and (ii) neither the obtaining of any required survey nor the issuance
of an ALTA extended coverage owner's policy shall delay the Closing beyond the
Closing Deadline. If any timely obtained ALTA survey, or any supplements to the
Preliminary Title Report, disclose any title defects that materially affect
Purchaser's use of the Property (minor encroachments and easements not
materially affecting Purchaser's use of the Property shall be deemed Permitted
Exceptions), Purchaser's sole remedy shall be to terminate this Agreement upon
written notice to Seller and Escrow Holder on or before the Feasibility Date, in
which event the Deposit shall be returned to Purchaser and Section 4.7(c) hereof
shall apply.
6. Lease and Contracts.
6.1 Delivery of Lease, Contracts and Other Documents. Seller shall,
on or before the Opening of Escrow, deliver to Purchaser copies of (i) the Lease
and any commission agreements relating to the Lease, (ii) all contracts,
representations, warranties and agreements pertaining to the ownership,
operation, management, maintenance and use of the Property for the past two
years (collectively, the "Contracts"), (iii) any existing boundary, as-built and
topographic surveys, appraisals, environmental reports and building inspection
reports of the Property in Seller's possession, and (iv) operating statements
for the Property for the past two years. Further, Seller shall use reasonable
efforts to obtain prior to the Feasibility Date (at Purchaser's sole cost and
expense) reliance letters addressed to Purchaser, Purchaser's assigns and any
lender, by the parties
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who prepared the appraisal, environmental report and building inspection
reports. In no event shall Seller's failure to obtain such reliance letters
constitute a breach or default by Seller.
6.2 Performance of Lease and Contracts. From and after the Opening
of Escrow until the Closing, Seller agrees that it will continue to perform all
of its obligations under the Lease and the Contracts. From and after the Opening
of Escrow, Seller will not amend or terminate the Lease or any of the Contracts
without the express prior written consent of Purchaser, which consent shall not
be unreasonably withheld.
6.3 Originals at Closing. At the Closing, Seller shall deliver to
Purchaser outside of Escrow the executed originals of those Contracts (if any)
which will survive the Closing, and the Lease (including any amendments
thereto), together with all property management books, records, operating
reports and files pertaining to the Property.
7. Purchaser's Inspection. Purchaser and Purchaser's agents are hereby
granted a license, for a period of thirty (30) calendar days following the
Opening of Escrow (the "Feasibility Period"), to enter upon and inspect the
Property and all improvements, fixtures, equipment and personal property located
thereon or affixed thereto. Seller agrees to cooperate with Purchaser and
Purchaser's agents in connection with such inspection, and to make available for
Purchaser's inspection and copying (any copying to be at Purchaser's expense)
all of Seller's books and records, appraisals, building plans and
specifications, soils reports, engineering studies, environmental reports and
other materials in Seller's possession relating to the Property. Seller further
understands that Purchaser or Purchaser's representatives may contact the Tenant
(and/or any guarantor of the Lease) during the Feasibility Period in an effort
to obtain financial information concerning the Tenant (and/or any guarantor of
the Lease), and Seller has no objection to such efforts by Purchaser or
Purchaser's representatives. Purchaser shall repair any damage to the Property,
and shall defend, indemnify and hold Seller, its shareholders, directors,
officers, employees and agents harmless from and against any and all claims,
suits, judgments, losses, damages or liabilities of any nature (including
without limitation reasonable attorneys fees and costs of suit) directly arising
from the entry upon the Property by Purchaser, its employees, agents,
independent contractors and consultants.
8. Purchaser's Approval Items. This Agreement and each of Purchaser's
obligations in connection herewith are expressly conditioned upon Purchaser's
approval, in the exercise of Purchaser's sole and absolute discretion, of each
of the following items on or before the last day of the Feasibility Period (the
"Feasibility Date"):
(a) the Lease and the financial condition of the Tenant and
the guarantor of the Lease;
(b) all Contracts;
(c) the Preliminary Title Report and underlying recorded
documents;
(d) the status and condition of the Property and any
improvements, fixtures, appurtenances and equipment located thereon
or affixed thereto;
(e) all items made available for Purchaser's inspection
pursuant to Section 7 above; and
(f) all other aspects of the Property.
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If Purchaser fails to give written notice to Seller and Escrow Holder of
Purchaser's approval of all of the foregoing items on or prior to the
Feasibility Date, Purchaser shall be deemed to have disapproved such matters and
the Escrow shall terminate immediately following the Feasibility Date, in which
event Section 4.7(c) shall apply. If Purchaser notifies Seller and Escrow Holder
in writing of Purchaser's approval of all of the foregoing items on or prior to
the Feasibility Date, then the Deposit shall become non-refundable to Purchaser
pursuant to Section 3.1 hereof.
9. Seller's Representations and Warranties. As used in this Section 9, the
phrase "to the best knowledge and belief of Seller" means to the actual
knowledge of ▇▇▇▇ ▇▇▇▇▇▇, Seller's Vice President, without any independent
investigation or inquiry. ▇▇▇▇ ▇▇▇▇▇▇ is the corporate officer of Seller having
primary responsibility for management of the Property and, as a result, the most
knowledge of any corporate officers of Seller regarding the Property. Seller
hereby makes the following representations, covenants and warranties, each of
which shall survive for a period of 18 months following the Closing:
(a) Seller is a corporation, duly organized and validly
existing under the laws of the State of California. Seller has the
requisite right, power, legal capacity and authority to enter into
and fully perform each and all of its obligations under this
Agreement. The individuals executing this Agreement on behalf of
Seller have the requisite right, power, legal capacity and authority
to execute and enter into this Agreement on behalf of Seller, to
legally bind Seller to the terms and provisions of this Agreement
and to execute all other documents and take all other actions as may
reasonably be necessary to perform each and all of Seller's
obligations under this Agreement.
(b) To the best knowledge and belief of Seller, there is
presently no pending or contemplated condemnation of the Real
Property or any part thereof, and Seller has made no commitment to
any governmental or quasi-governmental entity or to any other person
or entity which relates to the Real Property or imposes upon Seller
or Seller's successors or assigns any obligation to pay or
contribute property or money or to construct, install or maintain
any improvements on or off the Real Property.
(c) To the best knowledge and belief of Seller, the closing of
the transaction contemplated by this Agreement will not constitute
or result in any default or event which, with or without notice or
lapse of time, or both, would result in a violation of any
applicable law, ordinance or regulation or a default, breach or
violation of, or the creation of any lien or other encumbrance
pursuant to, any agreement, instrument or arrangement by which
Seller or the Real Property or any portion thereof is bound.
(d) To the best knowledge and belief of Seller, the Real
Property, including the improvements as constructed and as operated
by Seller, conforms to, and is operated, maintained, and leased in
accordance with all applicable city, county, state, federal and
other applicable laws, statutes, ordinances, rules and regulations.
Seller has not received any notification from any city, county,
state or federal authority alleging that the Real Property,
including the improvements, as constructed and as operated by
Seller, do not conform to or are not operated, maintained, and
leased in accordance with all such applicable laws, statutes,
ordinances, rules and regulations.
(e) Except as disclosed in the environmental reports made
available for Purchaser's inspection pursuant to Section 7 hereof,
Seller has received no written notice from any third parties, prior
owners of the Real
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Property, or any federal, state or local governmental agency,
indicating that any Hazardous Substance remedial or clean-up work
will be required on the Real Property. To the best knowledge and
belief of Seller, there have not been any on-site spills, releases,
discharges or disposal of Hazardous Substances which have occurred
on the Property during Seller's ownership of the Real Property. For
purposes of this Agreement, the term "Hazardous Substances" shall
include all substances which are classified as hazardous substances
or hazardous wastes under any of the following laws, rules and
regulations: (i) the Toxic Substances Control Act, 15 U.S.C.,
Section 2601 et. seq., (ii) the Clean Water Act, 33 U.S.C., Section
1251 et seq., (iii) the Resource and Conservation and Recovery Act,
42 U.S.C., Section 6901 et seq., (iv) the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C.,
Section 9601, et seq., (v) the Hazardous Materials Transportation
Act, 49 U.S.C., Section 1801, et seq., (vi) the California Hazardous
Waste Control Act, Health and Safety Code, Section 25100 et seq.,
(vii) the California Hazardous Substance Account Act, Health and
Safety Code, Section 25249.5 et seq., (viii) the California Waste
Management Act, Health and Safety Code, Section 25170.1 et seq.,
(ix) Health and Safety Code, Section 2550, Hazardous Materials
Release Response Plans and Inventory, (x) the California
▇▇▇▇▇▇-Cologne Water Quality Control Act, Water Code, Section 13000
et seq., or (xi) other federal or state laws, rules and regulations,
all as amended.
(f) To the best knowledge and belief of Seller, there are no
taxes, assessments (special, general or otherwise) or bonds of any
nature affecting the Real Property, or any portion thereof, except
as disclosed in the Preliminary Title Report.
(g) The Lease is the only existing lease or rental agreement
pursuant to which any person or entity is occupying any portion of
the Real Property. The Lease is in full force and effect and, to the
best knowledge and belief of Seller (i) there are no present uncured
defaults thereunder, and (ii) no commissions are due and payable
with respect to the Lease or any renewal thereof.
(h) Seller acknowledges that Purchaser may be required by the
Securities and Exchange Commission to file audited financial
statements for one to three years with regard to the Property. At no
cost or liability to Seller, Seller shall (i) cooperate with
Purchaser, its counsel, accountants, agents, and representatives,
provide them with access to Seller's books and records with respect
to the ownership, management, maintenance, and operation of the
Property for the applicable period, and permit them to copy the
same, (ii) execute a form of "rep" letter in form and substance
reasonably satisfactory to Seller, and (iii) furnish Purchaser with
such additional information concerning the same as Purchaser shall
reasonably request. Purchaser will pay all costs and expenses
associated with any such audit.
10. Purchaser's Representations and Warranties. Purchaser hereby makes the
following representations, covenants and warranties, each of which shall survive
for a period of one year following the Closing:
(a) Purchaser is a corporation, duly organized and existing
under the laws of the State of Georgia and is duly qualified to
transact business in the State of California, to the extent such
qualification is necessary; and
(b) Purchaser has the requisite right, power, legal capacity
and authority to enter into and fully perform each and all of its
obligations under this Agreement. The individuals executing this
Agreement on behalf of Purchaser have the requisite right, power,
legal capacity and authority to execute and enter into this
Agreement on behalf of Purchaser, to legally bind Purchaser to the
terms
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and provisions of this Agreement and to execute all other documents
and take all other actions as may reasonably be necessary to perform
each and all of Purchaser's obligations under this Agreement.
11. Change in Circumstance. If, following the Opening of Escrow, either
Seller or Purchaser (the "representing party") first becomes aware of some
changed fact or circumstance which would require material changes to any of the
representations or warranties made by the representing party in Section 9 or 10
above in order to make such representations or warranties accurate, then the
representing party shall immediately give written notice of such changed fact or
circumstance to the other party, but such notice shall not relieve the
representing party of its obligation to consummate this transaction. When the
representing party notifies the other party of any changed fact or circumstance,
then the other party may terminate this Agreement, in which event Section 4.7(c)
shall apply (except that the representing party shall pay all Cancellation
Costs). So long as the representations and warranties made by the representing
party were true and accurate as of the Opening of Escrow, such representing
party shall not be liable to the other party if a changed fact or circumstance
makes a representation or warranty untrue and if the representing party
discloses such fact to the other party in accordance with this Section 11.
12. As-Is Purchase.
(a) Purchaser's Investigation. Purchaser is, or prior to the
Feasibility Date will be, familiar with the Property and has or will
make such independent investigations as it deems necessary or
appropriate concerning the use or sale of the Property, including
but not limited to (i) any desired investigations or analysis of the
economic value of the Property or the feasibility of marketing the
Property for the purposes intended by Purchaser; (ii) soils reports
and hazardous waste and toxic materials studies; (iii) the physical
condition of the Real Property; (iv) the use of the Building for
Purchaser's intended purpose; (v) the size, dimensions, location or
topography of the Real Property; (vi) the adequacy of water, sewage
or any other utilities serving the Building; and (vii) all other
matters concerning the use, development or sale of the Property.
(b) No Reliance. Purchaser is relying solely upon its own
inspection, investigation and analysis of the foregoing matters in
purchasing the Property and is not relying in any way upon any
representations, cost information, statements, agreements,
warranties, studies, reports, descriptions, guidelines or other
information or material furnished by Seller or its representatives,
whether oral or written, express or implied, of any nature
whatsoever regarding any of the foregoing matters, except as
specifically set forth in Section 9 of this Agreement.
(c) "AS-IS". Purchaser acknowledges that it is a sophisticated
purchaser who is familiar with this type of property and that it is
acquiring the Property "AS-IS," without representation by Seller or
its representatives as to any matter except as specifically set
forth in Section 9 of this Agreement.
13. No Assignment by Purchaser. Except as otherwise provided in this
Section 13, Purchaser shall be permitted to assign Purchaser's rights and
delegate Purchaser's obligations hereunder only with the prior written consent
of Seller, which consent may be granted or withheld in Seller's sole and
absolute discretion. Notwithstanding the foregoing, Purchaser shall, upon
written notice to Seller but without the need for Seller's consent, be permitted
to assign Purchaser's rights and delegate Purchaser's obligations hereunder to
another entity which is an affiliate of Purchaser.
14. Treatment of Deposit. The Deposit shall be credited toward the
Purchase Price in the event that the Closing takes place at the time and in the
manner provided in
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this Agreement. The Deposit shall be retained by Seller as liquidated damages
upon cancellation of the Escrow by Seller pursuant to Section 4.7(a) following a
Purchaser Default. The Deposit shall be returned to Purchaser upon cancellation
of the Escrow pursuant to Section 4.7(b) or 4.7(c) hereof.
15. LIQUIDATED DAMAGES ON PURCHASER DEFAULT. PURCHASER AND SELLER HEREBY
ACKNOWLEDGE AND AGREE THAT, IN THE EVENT OF A PURCHASER DEFAULT, SELLER WILL
SUFFER DAMAGES IN AN AMOUNT WHICH WILL, DUE TO THE SPECIAL NATURE OF THE
TRANSACTION CONTEMPLATED BY THIS AGREEMENT AND THE SPECIAL NATURE OF THE
NEGOTIATIONS WHICH PRECEDED THIS AGREEMENT, BE IMPRACTICAL OR EXTREMELY
DIFFICULT TO ASCERTAIN. IN ADDITION, PURCHASER WISHES TO HAVE A LIMITATION
PLACED UPON THE POTENTIAL LIABILITY OF PURCHASER TO SELLER IN THE EVENT OF A
PURCHASER DEFAULT, AND WISHES TO INDUCE SELLER TO WAIVE OTHER REMEDIES WHICH
SELLER MAY HAVE IN THE EVENT OF A PURCHASER DEFAULT. PURCHASER AND SELLER, AFTER
DUE NEGOTIATION, HEREBY ACKNOWLEDGE AND AGREE THAT THE AMOUNT OF THE DEPOSIT (AS
THE SAME EXISTS FROM TIME TO TIME UNDER THIS AGREEMENT) REPRESENTS A REASONABLE
ESTIMATE OF THE DAMAGES WHICH SELLER WILL SUSTAIN IN THE EVENT OF SUCH PURCHASER
DEFAULT. PURCHASER AND SELLER HEREBY AGREE THAT SELLER MAY, IN THE EVENT OF A
PURCHASER DEFAULT, TERMINATE THIS AGREEMENT BY WRITTEN NOTICE TO PURCHASER AND
ESCROW HOLDER, CANCEL THE ESCROW AND RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES.
SUCH RETENTION OF THE DEPOSIT BY SELLER IS INTENDED TO CONSTITUTE LIQUIDATED
DAMAGES TO SELLER PURSUANT TO SECTIONS 1671, 1676 AND 1677 OF THE CALIFORNIA
CIVIL CODE, AND SHALL NOT BE DEEMED TO CONSTITUTE A FORFEITURE OR PENALTY WITHIN
THE MEANING OF SECTION 3275 OR SECTION 3369 OF THE CALIFORNIA CIVIL CODE, OR ANY
SIMILAR PROVISION. FOLLOWING TERMINATION OF THIS AGREEMENT, CANCELLATION OF THE
ESCROW AND RETENTION OF THE DEPOSIT AS LIQUIDATED DAMAGES PURSUANT TO THIS
SECTION 15, ALL OF THE RIGHTS AND OBLIGATIONS OF PURCHASER AND SELLER UNDER THIS
AGREEMENT SHALL BE TERMINATED.
PURCHASER AND SELLER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTAND THE
PROVISIONS OF THIS SECTION 15 AND BY THEIR INITIALS IMMEDIATELY BELOW AGREE TO
BE BOUND BY ITS TERMS.
"Seller": "Purchaser":
/s/ [ILLEGIBLE] /s/ BMC
--------------------------------- ---------------------------------
16. Risk of Loss. It shall be a condition to Purchaser's obligation to
purchase the Property that no damage, destruction or loss (whether or not
covered by insurance) in excess of Fifty Thousand and No/100 Dollars
($50,000.00), and no other event or condition, not existing on the Feasibility
Date, shall have occurred and shall exist at Closing. In the event of damage,
destruction or loss which is $50,000 or less (i) to the extent that the damage,
destruction or loss is not insured, then there shall be a reduction in the
Purchase Price in any amount necessary to repair such damage, destruction or
loss, and (ii) to the extent that the damage, destruction or loss is insured,
any insurance proceeds shall be assigned to Purchaser at Closing, or shall be
used to cure such damage in a timely manner, provided such insurance proceeds
are sufficient to cure the damage.
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17. Brokers. Purchaser and Seller each represent and warrant to each other
that it has not engaged or dealt with any broker, finder or other agent in
connection with this Agreement or the transactions contemplated hereby other
than ▇▇▇▇▇▇▇ Commercial Corporation (the "Broker"). Seller shall pay, outside of
Escrow pursuant to a separate agreement, a real estate commission to the Broker,
and Purchaser shall have no responsibility therefor. Purchaser and Seller each
hereby indemnify and hold the other harmless from and against all costs,
expenses or liabilities (including without limitation attorneys fees and court
costs, whether or not taxable and whether or not any action is prosecuted to
judgment) incurred by the indemnified party in connection with any claim or
demand by a person or entity for any broker's, finder's or other commission or
fee in connection with the indemnifying party's entry into this Agreement and
the transactions contemplated hereby.
18. Condemnation. At Closing, no part of the Property shall be subject to
notice of acquisition or condemnation or shall previously have been acquired by
authority of any governmental agency in the exercise of its power of eminent
domain or by private purchase in lieu thereof, nor at Closing shall there be any
written threat or written evidence of the imminence of any such acquisition or
purchase.
19. Miscellaneous.
19.1 Notices. All notices, approvals, disapprovals or elections
required or permitted to be given under this Agreement shall be in writing and
shall be (i) delivered personally, (ii) sent via Federal Express (or another
comparable overnight messenger service), or (iii) sent via telefacsimile to the
parties at the following addresses:
If to Seller: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Valley Holdings, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile:(▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Sheppard, Mullin, ▇▇▇▇▇▇▇ & Hampton LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esquire
Facsimile:(▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser: ▇▇▇▇▇ Development Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇'▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇▇▇, Esquire
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Personally delivered notices shall be deemed given upon actual personal delivery
to the intended recipient. Notices given by telefacsimile shall be deemed given
upon completion of transmission to the receiving telefacsimile machine. Notices
sent via Federal Express (or another comparable overnight messenger service)
shall be deemed given the immediately following business day.
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19.2 Attorneys' Fees. In the event of any action between Purchaser
and Seller for enforcement of any of the terms or conditions of this Agreement,
the prevailing party in such action shall be entitled to recover its reasonable
costs and expenses, including without limitation taxable court costs and
attorneys' fees, as awarded by a court of competent jurisdiction.
19.3 Entire Agreement. This Agreement contains all of the agreements
of Purchaser and Seller with regard to the transactions contemplated hereby, and
supersedes all prior agreements, understandings and negotiations, whether
written or oral.
19.4 Amendment. This Agreement shall not be modified or amended
except by an instrument in writing duly executed by both Purchaser and Seller.
19.5 Successors. Subject to the restrictions on Purchaser's right to
assign as set forth in Section 13 hereof, the provisions of this Agreement shall
be binding upon and shall inure to the benefit of the successors in interest and
assigns of Purchaser and Seller.
19.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
19.7 Headings. The paragraph headings and captions in this Agreement
are for convenience only and shall not limit or define the contents of this
Agreement.
19.8 Time. Time is of the essence of this Agreement, it being
understood that the time for performance of each obligation, including without
limitation the Closing Deadline, has been the subject of negotiation by the
parties.
19.9 Further Assurances. Seller and Purchaser agree that they will,
at any time and from time to time after the Closing, upon the request of the
other party, execute, acknowledge and deliver all such further deeds,
assignments, transfers, conveyances, powers of attorney and assurances as may be
reasonably required for the effective assignment, transferring, granting or
conveying of any or all of the assets or property to be assigned to them as
provided herein, at the cost of the requesting party.
19.10 Business Days. As used herein, "Business Days" means all days
other than Saturdays, Sundays, federal holidays and holidays in the State of
California.
IN WITNESS WHEREOF, this Agreement has been executed as of the day
and year first above written.
"Purchaser":
▇▇▇▇▇ DEVELOPMENT CORPORATION, a
Georgia corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇ - Executive Vice President
--------------------------------------------
[Printed Name and Title]
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"Seller":
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ VALLEY HOLDINGS, INC.,
a California corporation
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇, its Vice President
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