EXHIBIT 10.20
PURCHASE AGREEMENT
AND ESCROW INSTRUCTIONS
THIS PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS (this "Agreement") is
made this 15th day of February, 1996, between GUITAR CENTER MANAGEMENT COMPANY,
INC. ("Seller") and G.C. REALTY LLC, a California limited liability company, or
its nominee ("Purchaser").
ARTICLE I -- PROPERTY TO BE CONVEYED
A. Seller shall sell to Purchaser, and Purchaser shall purchase from
Seller, upon the terms and conditions hereinafter set forth, that certain real
property more particularly described in Exhibit "A" attached hereto and
incorporated herein by this reference (the "Land"), together with the building,
fixtures, and other improvements on the Land (the "Improvements") and the
equipment, supplies, and other personal property attached to, located at, or
used in connection with the operation, management, or maintenance of the Land or
the Improvements (the "Personal Property"). The Land, Improvements, and
Personal Property shall be collectively referred to herein as the "Property".
The Property is located in the City of Arlington, State of Texas, at 000 Xxxx
Xxxxx Xxxxx, Xxxxxxxxx, Xxxxx.
B. The Property shall include all right, title and interest of
Seller, if any, in and to (i) any land lying in the bed of any street, road,
highway or avenue, open or proposed, in front of or adjoining all or any part of
the Property and in and to all rights-of-way, riparian rights and easements;
(ii) all right, title and interest of Seller, if any, in and to any award or
payment made or to be made (a) for any taking in condemnation or eminent domain
of land lying in the bed of any street, road, highway or avenue, open or
proposed, in front of or adjoining all or any part of the Property, (b) for
damage to the Property or any part thereof by reason of change of grade or
closing of any such street, road, highway or avenue, and (c) for any taking in
condemnation or eminent domain of any part of the Property; and (iii) all tenant
leases, and refundable security or other tenant deposits, as well as rents and
profits arising thereunder from and after the "Closing" (as defined in Article
VIII hereof).
ARTICLE II -- AGREEMENT TO SELL AND PURCHASE
Upon the execution of this Agreement by Seller and Purchaser, this
Agreement shall constitute a binding and enforceable agreement between the
parties.
ARTICLE III -- PURCHASE PRICE
The purchase price (the "Purchase Price") for the Property shall be
approximately Eight Hundred Twenty Thousand Dollars ($820,000), subject to all
prorations and adjustments provided herein. The Purchase Price shall be paid on
the Closing Date, Purchaser shall deliver, in cash or its equivalent, a sum
equal to the Purchase Price.
ARTICLE IV -- TITLE CONTINGENCIES
Purchaser's obligations hereunder are subject to satisfaction that on
or before February 28, 1996; Seller shall obtain and deliver to Purchaser, at
Seller's sole cost and expense, a title commitment ("Title Commitment") for an
extended coverage ALTA Owner's Policy of Title Insurance ("Title Policy") from
Chicago Title Company ("Title Company") proposing to insure the Property in the
amount of the Purchase Price. The Title Commitment: (A) shall be effective as
of a date after the date of this Agreement; (B) shall reflect fee estate in
Seller; and (C) shall be accompanied by copies of all documents of record
referred to in the Title Commitment and all other documents relating to the
Title Commitment. With regard to standard printed exceptions and other common
exceptions generally included in title commitments, the Title Commitment shall
not: (i) have any survey exception; (ii) have any exception as to taxes and
special assessments except for those not due and payable as of the Closing Date;
(iii) have any exceptions as to rights of parties in possession, except for
Seller; (iv) have any exceptions as to easements not shown by public records; or
(v) have any exceptions as to mechanic's and materialmen's liens. The Title
Policy, to be issued at Closing, shall insure good and marketable, fee estate to
the Property in Purchaser subject only to those exceptions to title approved or
waived by Purchaser ("Permitted Exceptions"). Seller will pay the cost of the
Title Policy.
ARTICLE V -- REPRESENTATIONS AND WARRANTIES
Seller represents, warrants, and covenants to Purchaser as follows:
A. Seller has all requisite power and authority to own and operate
its properties and to carry on its business. Seller has the authority and
requisite power to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
have been duly authorized by Seller. Upon the execution and delivery of this
Agreement, this Agreement will constitute a legal, valid and binding obligation
of Seller enforceable against it.
B. Entering into this Agreement, and the consummation of the
transactions contemplated hereby, will not constitute or result in a violation
or breach by Seller of any contract to which Seller is bound or the Property is
subject, or any judgment, order, writ, injunction or decree issued against or
imposed upon it, or result in a violation of any applicable law, order, rule or
regulation of any governmental authority. There is no action, suit, proceeding
or investigation pending or threatened (including, without limitation, any
claims for labor or materials provided to or for the benefit of the Property)
which might become a cloud on title to the Property or any portion thereof.
C. There is no pending or threatened condemnation, requisition, or
similar proceeding affecting the Property or any portion thereof.
D. There are no violations of any state, federal, municipal or other
governmental law, statute, ordinances, or other legal requirements with respect
to the Property or any portion thereof, including, without limitation, any and
all laws relating to hazardous or
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toxic waste or waste products or hazardous substances. No portion of the
Property constitutes or contains hazardous or toxic waste or waste products or
hazardous substances.
E. There has not been nor is there now existing any default or
breach by Seller under any of the covenants, conditions, restrictions,
rights-of-way, easements, permits, licenses or governmental approvals or under
any note, mortgage, deed of trust, security agreement, leases, or other
instrument affecting the Property or any portion thereof.
F. No special assessments or similar charges have been levied or
threatened against all or any part of the Property. Seller has no knowledge of
any intended assessments or charges against all or any part of the Property.
G. Seller has good and marketable title to the Property, and has the
right to convey and transfer the same. As of the Closing, there shall be no
lien (including, without limitation, any mechanic's liens) or security interest
affecting the Property or any part thereof, other than the Permitted Exceptions.
From the date of this Agreement until the Closing, Seller will not sell, assign,
lease, or convey any right, title, or interest whatsoever, in or to the Property
or create or permit to exist any lien, encumbrance, or charge thereon.
H. From the date of this Agreement until the Closing, Seller:
(a) will not alter or change the condition of the Property, except as permitted
by Purchaser; (b) will pay all obligations arising in connection with the
Property, as payment becomes due or may become due after the Closing; and
(c) will maintain and repair the Property in its present condition.
I. Seller shall pay all invoices in connection with any labor or
materials supplied or performed in and to the Property on or before the Closing
Date.
J. Seller has had an opportunity to review this Agreement with legal
counsel and after such review has agreed to the terms and conditions hereunder.
All of the representations, warranties, and covenants of Seller
contained in this Agreement or in any other document delivered to Purchaser in
connection with the transactions contemplated hereby (i) shall be true and
correct in all material respects and not in default at the time of Closing,
either expressly or by implication, just as though they were made at such time;
and (ii) Purchaser's right to enforce such representations, warranties, and
covenants shall survive the Closing.
Purchaser covenants, represents, and warrants to Seller as follows:
AA. Purchaser has the authority and requisite power to enter into
this Agreement and to consummate the transactions contemplated hereby.
Purchaser has duly authorized the execution and delivery of this Agreement and
upon such execution and delivery will be duly bound to consummate the
transactions contemplated hereby, subject to the terms and conditions hereof.
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BB. Neither entering into this Agreement nor the consummation of the
transactions contemplated hereby will constitute or result in a violation or
breach by Purchaser of any judgment, order, writ, injunction or decree issued
against or imposed upon it, or will result in a violation of any applicable law,
order, rule or regulation of any governmental authority.
ARTICLE VI -- ITEMS TO BE DELIVERED BY SELLER
AND PURCHASER AT CLOSING
On the Closing Date, Seller agrees to deliver the following items to
Title Company:
A. A duly executed warranty grant deed, in a form acceptable for
recording, conveying to Purchaser, or its nominee, the fee estate to the
Property. Seller shall pay all federal, state, municipal and other taxes, fees,
stamps and charges in connection with the delivery and recording of the
aforesaid deed;
B. The Title Policy (reflecting only the Permitted Exceptions); and
C. Any other documents required to be delivered at Closing pursuant
to this Agreement, and any other documents or agreements deemed necessary or
reasonably appropriate by the Purchaser or its counsel.
At Closing, Purchaser agrees to deliver the following items to Seller:
AA. The Purchase Price, in cash or its equivalent, as provided in
Article II hereof; and
BB. Any other documents required to be delivered at Closing pursuant
to this Agreement, and any other documents or agreements deemed necessary or
reasonably appropriate by Seller's counsel.
ARTICLE VII -- CONDITIONS TO CLOSING
The obligations of Purchaser hereunder shall be subject to the
fulfillment of the following conditions on or prior to the Closing Date:
A. Receipt by Purchaser of all items provided herein to be delivered
to Purchaser.
B. The representations and warranties of Seller contained herein
shall be true and correct on and as of the Closing, as if made on and as of such
date.
C. Seller shall have performed all covenants, undertakings and
obligations and complied with all conditions required by this Agreement to be
performed, satisfied and/or complied with by Seller.
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ARTICLE VIII -- TIME AND PLACE OF CLOSING
The closing of the transactions contemplated by this Agreement shall
take place on or before April 1, 1996, or at such other time and place as Seller
and Purchaser shall mutually agree upon in writing. The closing shall be
consummated through the Title Company and shall occur when the grant deed
provided for in Article VI hereof is recorded (the "Closing").
ARTICLE IX -- APPORTIONMENTS, SECURITY DEPOSITS
The following items shall be apportioned as of the Closing Date:
(A) collected rents and other income, if any; (B) real and personal property tax
payments or assessments; and (C) utility, water and sewer charges. Seller will
pay at Closing all fees, charges and taxes due as a result of the sale of the
Property at Closing, including, without limitation, any documentary stamp tax,
recording fees, sales tax, or franchise tax.
ARTICLE X -- CONDEMNATION AND PHYSICAL LOSS
A. If prior to the Closing all of the Property shall be taken by
condemnation or eminent domain, this Agreement shall be automatically terminated
and, thereafter, this Agreement shall be null and void and of no further force
or effect, and neither Purchaser nor Seller shall have any further rights,
duties, liabilities or obligations to the other by reason hereof. If prior to
the Closing (i) less than all of the Property shall be taken by condemnation or
eminent domain, or (ii) there is any taking of land lying in the bed of any
street, road, highway or avenue, open or proposed, in front of or adjoining all
or any part of the Property, or (iii) there is any change of grade of any such
street, road, highway or avenue, provided such taking or change of grade
involves a diminution in value of more than $50,000, then Purchaser may, at its
option, terminate this Agreement and, thereafter, this Agreement shall be null
and void and of no further force or effect, and neither Purchaser nor Seller
shall have any further rights, duties, liabilities, or obligations to the other
by reason thereof. If this Agreement is not terminated in accordance with the
foregoing, or if such taking involves a diminution in value of $50,000 or less,
Purchaser shall accept title to the Property subject to the taking or change of
grade, in which event the proceeds of the award or payment shall be assigned by
Seller to Purchaser at the Closing and any moneys theretofore received by Seller
in connection with such taking or change in grade shall be paid over to
Purchaser.
B. If, prior to the Closing, the Property is damaged as the result
of fire or other casualty, Purchaser shall have the option to either accept
title to the Property without any abatement of the Purchase Price whatsoever, in
which event, at the Closing all of the insurance proceeds shall be assigned by
Seller to Purchaser and any moneys theretofore received by Seller in connection
with such fire or other casualty shall be paid over to Purchaser, or if such
loss exceeds $50,000, terminate this Agreement, and Purchaser and Seller shall
have no further rights or obligations to the other. Seller shall maintain
adequate insurance on the Property to cover the replacement value of the
building and other improvements which are part of the Property in case of any
fire or other casualty occurring before the Closing.
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ARTICLE XI -- NOTICES
All notices, demands, consents, approvals and other communications
which are required or desired to be given by either party to the other hereunder
shall be in writing and shall be either hand delivered or sent by United States
First Class mail, postage prepaid, or Federal Express or other private courier
service, addressed to the appropriate party at its address set forth below, or
at such other address as such party shall have last designated by notice to the
other. Notices, demands, consents, approvals, and other communications shall be
deemed given when hand delivered or when mailed:
To Seller: Guitar Center Management Company, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
Attention: Mr. Xxxxx Xxxxxx
To Purchaser: G.C. Realty LLC
0000 Xxxxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
Attention: Xx. Xxx Xxxxxx
ARTICLE XII -- NO ORAL MODIFICATION; ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties
relating to the subject matter hereof and is intended to supersede all prior
writings and understandings of the parties and cannot be changed or modified
other than by a written instrument executed by both parties.
ARTICLE XIII -- SUCCESSORS BOUND
The provisions of this Agreement shall extend to, bind and inure to
the benefit of the parties hereto and their respective successors and assigns.
ARTICLE XIV -- ASSIGNMENT
Notwithstanding any provisions to the contrary, whether express or
implied, Purchaser shall have the right to assign this Agreement and Purchaser's
rights and benefits hereunder to any person or assignee. Seller shall accept
the performance of Purchaser's obligations hereunder by any such person or
assignee provided such person or assignee assumes all obligations of Purchaser
hereunder and promptly notifies Seller of such assignment. If this Agreement is
assigned, any reference in this Agreement to Purchaser shall thereafter be
deemed to refer to such person or assignee.
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ARTICLE XV -- WAIVER
The Purchaser and Seller reserve the right to waive, in whole or in
part, any provision hereof which is for their respective benefits.
ARTICLE XVI -- BROKERS
Seller and Purchaser each warrant and represent to the other that
Seller and Purchaser have not dealt with any real estate agents or brokers, and
in the event any claims for real estate commissions, fees, or compensation arise
in connection with the transaction contemplated in this Agreement, the party so
incurring or causing such claims shall indemnify and hold harmless the other
party from any loss or damage which said other party suffers because of said
claim.
ARTICLE XVII -- DELIVERY OF POSSESSION
Purchaser shall be granted full possession of the Property upon
Closing subject to the rights of no other parties-in-possession, except for
Seller. Prior to the Closing, Purchaser shall have the right to enter the
Property for any purpose related to Purchaser's intended purchase.
ARTICLE XVIII -- GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of California.
ARTICLE XIX -- COUNTERPARTS
This Agreement may be executed in more than one counterpart, each of
which shall be deemed an original.
ARTICLE XX -- FURTHER ASSURANCES
Seller shall, without further consideration, execute, acknowledge and
deliver to Purchaser at the Closing, or thereafter upon request of Purchaser,
any instruments or documents, or take such other actions, reasonably required to
fully consummate the transactions contemplated hereunder.
ARTICLE XXI -- CAPTIONS
The captions of this Agreement are inserted for convenience of
reference only and do not define, describe or limit the scope or intent of this
Agreement or any term hereof.
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ARTICLE XXII -- ATTORNEYS' FEES AND COSTS
In the event of any action involving or relating in any manner to a
default under this Agreement, the court in such action shall award a reasonable
sum as attorneys' fees to the party in whose favor judgment is entered and said
party shall be entitled to recover in addition, costs of suit and filing fees on
any appeal.
ARTICLE XXIII -- SEVERABILITY
In case any provision of this Agreement shall be invalid, illegal or
unenforceable, such provision shall be severable from the rest of this Agreement
and the validity, legality and enforceability of the remaining provisions shall
not in any way be affected.
ARTICLE XXIV -- TIME OF THE ESSENCE
Time is of the essence of this Agreement.
ARTICLE XXV -- INDEMNIFICATION
To the fullest extent permitted by law, Seller agrees to protect,
indemnify, defend and save harmless Purchaser, its directors, officers, agents
and employees from and against any and all liability, expense or damage of any
kind or nature, from any suits, claims, or demands, including reasonable legal
fees and expenses on account of any matter or thing or action or failure to act
by Seller, whether in suit or not, arising out of any breach of any
representation, warranty or covenant set forth in this Agreement or otherwise,
unless such suit, claim or damage is caused solely by an act or willful
misconduct of Purchaser, its directors, officers, agents and employees. Upon
receiving knowledge of any suit, claim or demand asserted by a third party that
Purchaser believes is covered by this indemnity, Purchaser shall give Seller
notice of the matter and an opportunity to defend it, at Seller's sole cost and
expense, with legal counsel satisfactory to Purchaser. Purchaser may also
require Seller to so defend the matter. This obligation on the part of Seller
shall survive the Closing.
ARTICLE XXVI -- EXPENSES
Except as provided hereunder, Seller and Purchaser shall each pay all
of their respective expenses incurred by or on behalf of each of them in
connection with this Agreement and the transactions contemplated hereunder.
ARTICLE XXVII -- SURVIVAL OF CONDITIONS
Notwithstanding any presumption to the contrary, all covenants,
conditions, warranties and representations contained in this Agreement, which by
their nature impliedly or expressly involve performance in any particular after
Closing, or which cannot be ascertained to have been fully performed until after
Closing shall survive the Closing.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, sealed and delivered the day and year first above written.
PURCHASER:
G.C. REALTY LLC
a California limited liability company
XXXXXX LIVING TRUST, dated April 3, 1990, member
By: /s/ XXXXXXX XXXXXX
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Xxxxxxx Xxxxxx, Trustee
By: /s/ XXXXX XXXXXX
---------------------------------------------------------
Xxxxx Xxxxxx, Trustee
By: /s/ XXXXXXX XXXXXX
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Xxxxxxx Xxxxxx, Member
By: /s/ XXXXX XXXXXX
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Xxxxx Xxxxxx, Member
SELLER:
GUITAR CENTER MANAGEMENT COMPANY, INC.
a California corporation
By: /s/ XXXXX XXXXXX
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Xxxxx Xxxxxx
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EXHIBIT "A"
LEGAL DESCRIPTION
Xxxxx X-X, Xxxxx 0, XXXXXXX XXXXXXX ADDITION to the City of Arlington, Tarrant
County, Texas, according to plat recorded in Volume 388-155, Page 31, Deed
Records of Tarrant County, Texas.
