OPTION AGREEMENT FOR PURCHASE AND SALE
OF
COMMERCIAL PROPERTY
Agreement Date: ______________________________
Seller: Verde Investments, Inc.
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Buyer: Ugly Duckling Corporation
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Property: Real property situated in Maricopa County,
Arizona, commonly known as ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
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described on Exhibit "A" attached hereto.
Option Agreement For Purchase And Sale
Of
Commercial Property
This Option Agreement For Purchase And Sale Of Commercial Property (this
"Agreement") is made by and between Verde Investments, Inc., an Arizona
corporation ("Seller") and Ugly Duckling Corporation, a Delaware corporation
("Buyer"), effective as of November ___, 2000 (the "Agreement Date").
Recitals
The parties acknowledge that the following recitals are correct statements
of fact, are relied upon by the parties and are a material part of this
Agreement:
A. Seller owns the real property situated in Maricopa County, Arizona,
commonly known as ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, and
legally described on Exhibit "A" attached hereto, together with all
improvements located thereon (the "Property").
B. Seller leases the Property to Buyer's subsidiary pursuant to a
long-term lease (the "Lease") and the Lease is guaranteed by Buyer.
C. Buyer seeks an option to purchase the Property and Seller is
willing to grant to Buyer an option to purchase the Property, all under the
terms of this Agreement.
NOW, THEREFORE, in consideration of the covenants, representations and
warranties of the parties stated herein, the performances of the parties
required hereby and the benefits accruing to the parties hereunder, Seller and
Buyer mutually agree and expressly intend to be legally bound as follows:
Section 1. Option Grant, Exercise and Conveyance
1.1 Option Grant. Under the terms and conditions stated in this Agreement,
Seller hereby to Buyer an option to purchase the Property (the "Option"). The
Option is granted in consideration of Buyer's guaranty of the Lease.
1.2 Option Exercise. The term of the Option (the "Option Term") shall
commence as of the Agreement Date and shall expire on December 31, 2002. The
Option may be exercised by Buyer at any time during the Option Term by Buyer's
delivery to Seller of written notice of exercise of the Option (the "Option
Notice"). If Buyer fails to exercise the Option by delivery of the Option Notice
during the Option Term, then upon expiration of the Option Term, the Option
shall automatically expire and may not be exercised thereafter.
1.3 Conveyance. The Property shall be conveyed within 30 days after
delivery of the Option Notice (the "Closing Date") by Seller's execution,
delivery and recordation of a Quit Claim Deed in the form of Exhibit B attached
hereto and incorporated herein (the "Deed").
Section 2. Purchase Price and Payment.
Buyer shall pay to Seller as the total price for all of Seller's right,
title and interest in the Property $__________________ (the "Purchase Price").
The Purchase Price shall be paid in full on the Closing Date in immediately
available funds.
Section 3. Closing Matters.
3.1 Closing Date. The Closing Date shall occur within 30 days after Buyer's
exercise of the Option. The parties shall complete the purchase and sale of the
Property on or before the Closing Date and neither party is required to consent
to any extension of the Closing Date.
3.2 Escrow Agent. Upon Buyer's exercise of the Option, Seller and Buyer
shall retain a mutually acceptable escrow agent as their mutual agent for
closing the conveyance of the Property pursuant to this Agreement (the "Escrow
Agent"). This Agreement shall constitute the mutual instructions of the parties
to the Escrow Agent and such instructions cannot be modified without the written
consent of both parties. The Escrow Agent shall prepare statements of the
closing of the transactions described herein for review and approval by the
parties prior to the Closing Date (the "Closing Statements"). Escrow Agent shall
also insure the transfer of the Property by the issuance of the Owner's Title
Policy and the senior priority of the Buyer Deed of Trust by issuance of the
Lender's Title Policy. Escrow Agent shall prepare and file all informational
returns, including without limitation, IRS Form 1099-S and shall otherwise
comply with the provisions of Internal Revenue Code Section 6045(e). Escrow
Agent shall indemnify, protect, hold harmless and defend Seller, Buyer and their
respective attorneys for, from and against any and all claims, actions, costs,
loss liability or expense arising out of or in connection with the failure of
Escrow Agent to comply with the provisions of this Section 3.2.
3.3. Seller's Closing Documents. On or before the Closing Date, Seller
shall deliver to Escrow Agent the following, duly executed and acknowledged by
Seller as required:
3.3.1 The Deed.
3.3.2 All other documents reasonably required for Seller and/or Escrow
Agent to perform their respective obligations hereunder.
3.4. Buyer's Closing Documents. On or before the Closing Date, Buyer shall
deliver to Escrow Agent the following, duly executed and acknowledged by Buyer
as required:
3.4.1 All documents reasonably required for Buyer and/or Escrow Agent
to perform their respective obligations hereunder.
3.5 Prorations. All real property taxes, assessments and association dues
on the Property and all expenses of operation of the Property shall not be
prorated but are paid by Buyer's subsidiary pursuant to the Lease.
3.6 Costs.
3.6.1 Buyer. Buyer shall pay all premiums for any title insurance
requested by Buyer. Buyer shall also pay all charges of Escrow
Agent for performing the services required by this Agreement,
including recording and filing fees. All costs payable by Buyer
shall be identified in the Closing Statements. Buyer shall also
pay all costs of Buyer's performance of its obligations
hereunder.
3.6.2 Seller. Seller shall not be required to pay any costs.
3.6.3 Commissions. Neither Seller nor Buyer have dealt with any real
estate brokers that may claim any brokerage fee relating to this
transaction and each party shall indemnify the other for any
claims for brokerage commissions by any such real estate brokers
3.7 1031 Exchanges. If either Seller or Buyer seeks to sell or purchase the
Property or any part thereof as an exchange of like-kind Property pursuant to
Internal Revenue Code Section 1031, the other party shall cooperate therein,
provided such exchange does not change the terms and conditions of this
Agreement and does not impose any additional expense or liability on the other
party.
Section 4. Representations, Warranties and Indemnification by Seller.
On the Agreement Date and on the Closing Date, Seller makes the following
representations, warranties and covenants to Buyer but to no other person or
entity:
4.1 Authority. Seller is duly organized, validly existing and in good
standing under the laws of the State of Arizona, and Seller has full power,
authority and legal right to enter into this Agreement and to perform all
covenants, obligations and agreements of Seller hereunder. Seller has taken all
necessary action to authorize the execution, delivery and performance by Seller
of this Agreement and all other documents or instruments required in connection
with this Agreement, and upon execution and delivery of this Agreement and such
other documents and instruments by Seller and the other parties thereto, this
Agreement and each of such documents and instruments will have been duly
authorized, executed and delivered by Seller and will constitute the legal,
valid and binding obligation of Seller enforceable in accordance with its terms.
Seller is not a foreign entity and no withholdings of the proceeds of the sale
of the Property is required under Section 1445 of the Internal Revenue Code.
4.2 Contracts and Liens. Seller has not entered into any other contracts
for the sale of the Property which would affect Seller's ability to convey the
Property to Buyer. Seller will not, without the prior written consent of Buyer,
subject the Property to any additional liens, encumbrances, covenants,
conditions, easements, rights-of-way, or similar matters after the Agreement
Date which will not be either approved by Buyer or eliminated on or prior to the
Closing Date.
4.3 Legal Actions. There are, and on the Closing Date there shall be, no
pending or threatened legal proceedings against Seller that would adversely
affect, restrict or prohibit Seller's performance of this Agreement.
4.3 No Fraudulent Conveyance. Seller is not entering into the transactions
described in this Agreement with an intent to defraud any creditor or to prefer
the rights of one creditor over any other. Seller and Buyer have negotiated this
Agreement at arms length and the consideration paid represents fair value for
the assets to be transferred.
4.5 Pre-Closing Obligations. Seller shall perform all obligations and pay
all amounts required of the owner of the Property prior to the Closing Date,
subject to Buyer's obligations under the Lease.
4.6 Indemnification. The representations, warranties and covenants of
Seller stated in this Agreement shall survive the Closing Date and the
recordation of the Deed for one year only. Seller shall indemnify Buyer for all
costs, direct damages and liabilities, including reasonable attorney's fees,
incurred by Buyer as a result of any material breach by Seller of any of the
representations, warranties or covenants of Seller stated in this Agreement and
none other, provided a claim therefor is filed in a court of competent
jurisdiction and served on Seller within one year after the Closing Date.
Section 5. Representations, Warranties and Indemnification by Buyer.
On the Agreement Date and on the Closing Date, Buyer makes the following
representations, warranties and covenants to Seller:
5.1 Authority. Buyer is duly organized, validly existing and in good
standing under the laws of the State of Delaware and Buyer has full power,
authority and legal right to enter into this Agreement and to perform all
covenants, obligations and agreements of Buyer hereunder. Buyer has taken all
necessary action to authorize the execution, delivery and performance by Buyer
of this agreement and all other documents or instruments required in connection
with this Agreement, and upon execution and delivery of this Agreement and such
other documents and instruments by Buyer and the other parties thereto, this
Agreement and each of such documents and instruments will have been duly
authorized, executed and delivered by Buyer and will constitute the legal, valid
and binding obligation of Buyer enforceable in accordance with its terms.
5.2 Legal Actions. There are, and on the Closing Date there shall be, no
pending or threatened legal proceedings against Buyer that would adversely
affect, restrict or prohibit Buyer's performance of this Agreement.
5.3 Post Closing Obligations. Buyer shall perform all obligations and pay
all amounts required of the owner of the Property from and after the Closing
Date.
5.4 Property Taken As-Is. Except for the representations, warranties and
covenants of Seller stated expressly in this Agreement, the Property is being
conveyed AS-IS and Seller does not make any representations, warranties or
covenants with respect to the Property. Buyer hereby assumes all risks,
obligations and liability of any and all direct, indirect, consequential,
special or other damages of any kind which are or may be associated with or
arise out of the Property and agrees that Seller shall not be liable to Buyer
for any direct, indirect, consequential, special or other damages of any kind
which are or may be associated with or arise out of the Property.
5.5 Indemnification. The representations, warranties and covenants of Buyer
stated in this Agreement shall survive the Closing Date and the recordation of
the Deed. Buyer shall indemnify Seller for all costs, damages and liabilities,
including reasonable attorney's fees, incurred by Seller as a result of any
material breach by Buyer of any of the representations, warranties or covenants
of Buyer stated in this Agreement and none other.
Section 6. Remedies for not Closing.
6.1 Seller. If Buyer has exercised the Option and on the Closing Date this
Agreement is in full force and effect, and if Buyer has tendered full
performance but Seller fails to convey the Property to Buyer in accordance with
this Agreement, then in such event, Buyer may elect one of the following two
remedies as its exclusive remedy: (a) terminate this Agreement; or (b) continue
this Agreement and immediately prosecute a claim for specific performance of
this Agreement.
6.2 Buyer. If Buyer has exercised the Option and on the Closing Date this
Agreement is in full force and effect, and if Seller has tendered full
performance but Buyer fails to purchase the Property in accordance with this
Agreement, then in such event, Seller shall be entitled to terminate this
Agreement as its exclusive remedy.
Section 7. General Provisions.
7.1 Notice. All notices and communications hereunder shall be in writing
and shall be given by personal delivery, overnight delivery, facsimile
telephonic transmission or mailed first class, registered or certified mail,
postage prepaid, and shall be deemed given and received upon the earlier of
actual delivery or three days after deposit in the United States Mail as
aforesaid. Notices shall be delivered or mailed to the addresses stated in Page
1 of this Agreement.
7.2 Negotiation and Integration. The terms and provisions of this Agreement
represent the results of negotiations between the parties, each of which has
been represented by counsel or other representative of its own choosing and
neither of which have acted under duress or compulsion, whether legal, economic
or otherwise. This Agreement is entered into after full investigation, neither
party relying upon any statements or representations made by the other not
embodied in this Agreement. All prior and contemporaneous statements,
representations, implications, understandings and agreements between the parties
are superseded by and merged in this Agreement, which alone fully and completely
expresses their entire agreement. There are no other agreements between the
parties regarding the conveyance of the Property.
7.3 Assignment and Modification. This Agreement shall be binding upon the
successors and assigns of the parties. This Agreement may not be assigned by
Buyer to any person or entity without the prior written consent of Seller, which
consent shall not be unreasonably withheld. However, Buyer may assign this
Agreement to any entity the majority of which is owned by Buyer and such
assignment does not require the prior written consent of Seller. The assignment
of this Agreement by Buyer shall not release Buyer of any obligations hereunder.
Notwithstanding the foregoing restrictions on assignment, Seller and Buyer may
assign this Agreement to a qualified intermediary in an exchange of the
Property, or any portion thereof, pursuant to Internal Revenue Code Section
1031. This Agreement may not be changed orally, but only by an agreement in
writing, signed by the parties.
7.4 Severability. If any provision of this Agreement is held by a court to
be void or unenforceable, the balance of the Agreement shall remain valid and
enforceable.
7.5 Other Agreements. Except in the ordinary course, Seller shall not enter
into any contracts, leases, agreements or amendments to existing agreements or
encumbrances affecting the Property while this Agreement remains in force
without the express prior written consent of Buyer, which consent shall not be
unreasonably withheld.
7.6 No Agency. It is expressly agreed and understood by the parties hereto
that neither party is the agent, partner nor joint venture partner of the other.
It is also expressly agreed and understood that neither Seller nor Buyer has any
obligations or duties to the other regarding the purchase and sale of the
Property except as specifically provided for in this Agreement.
7.7 Attorney's Fees. In the event any party hereto finds it necessary to
bring an action at law or other proceeding against the other party to enforce
this Agreement or any instrument executed pursuant to this Agreement, or by
reason of any breach hereunder, the party prevailing in any such action or other
proceeding shall be paid all costs and reasonable attorney's fees by the
defaulting party, and in the event any judgment is secured by such prevailing
party all such costs and attorneys' fees shall be included in any such judgment,
attorney's fees to be set by the court.
7.8 Time. Time is of the essence of this Agreement. However, if any action
is required to be taken on a Saturday, Sunday, or legal holiday, the action
shall be deemed timely if it is taken on the next regular business day.
7.9 State Law and Jurisdiction. This Agreement shall be governed by the
laws of the State of Arizona. Any judicial action relating to this Agreement
shall be prosecuted in a court of competent jurisdiction in Maricopa County,
Arizona as the court of exclusive jurisdiction and proper venue and the parties
hereby consent to the jurisdiction and venue of said court. The parties jointly
waive trial by jury in any action relating to this Agreement. All parties hereby
irrevocably waive all rights to trial by jury in any and all actions relating to
this Agreement.
7.10 Counterparts. This Agreement may be executed in counterparts, and the
signature of any person required by this Agreement shall be effective if signed
on any and or all counterparts. All counterparts together shall be considered
one and the same Agreement. Signatures produced by facsimile telephonic
transmission shall be accepted as originals.
IN WITNESS WHEREOF, the parties have entered into this Agreement effective
as of the Agreement Date.
Seller: Verde Investments, Inc.,
an Arizona corporation
By: ___________________________________
Name: _________________________________
Its: __________________________________
Buyer: Ugly Duckling Corporation,
a Delaware corporation
By: ___________________________________
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By: ___________________________________
▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Secretary
EXHIBITS
A. Description of Property
B. Quit Claim Deed
EXHIBIT A
Description of Property
EXHIBIT B
Quit Claim Deed
WHEN RECORDED, RETURN TO:
Ugly Duckling Corporation
Attention: General Counsel
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QUIT-CLAIM DEED
For the consideration of Ten and 00/100 Dollars, and other valuable
consideration, Verde Investments, Inc. ("Grantor") hereby quit-claims to Ugly
Duckling Corporation, a Delaware corporation ("Grantee") the interest of
Grantor, if any, in the real property situated in Maricopa County, State of
Arizona and legally described in Exhibit A attached hereto.
Dated: ___________________. Verde Investments, Inc.,
an Arizona corporation
By: __________________________________
Name: ________________________________
Its: _________________________________
STATE OF ARIZONA )
)ss
COUNTY OF MARICOPA )
The foregoing instrument was acknowledged before me, the undersigned Notary
Public, this ___ day of _____________, 20___ by ___________________, as
________________ of Verde Investments, Inc., an Arizona corporation.
My commission expires: ____________________ _____________________________
Notary Public