PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement ("Agreement") is made and entered into
September 6, 2001 by and between DCH Technology, Inc. ("Seller") and Xxxxxxx
Investment Corporation or assignee ("Buyer").
RECITALS
A. Seller is the owner of the fee estate in that certain real property in
the City of Valencia, County of Los Angeles, State of California, more
particularly described in Exhibit A attached hereto and made a part
hereof, which is improved with an industrial building of approximately
16,897 square feet located at 00000 Xxxxxx Xxxxxxxxxxx, Xxxxxxxx,
Xxxxxxxxxx (which land and improvements are collectively referred to
as the "Property").
B. Buyer desires to purchase the Property (as hereinafter defined) from
Seller, and Seller desires to sell the Property to Buyer, upon the
terms and conditions stated in this Agreement.
Now, therefore, in consideration of the mutual covenants of the parties herein
contained and other valuable consideration, the parties agree as follows:
ARTICLE 1 - SALE AND PURCHASE
Section 1.1 Sale of Property. Subject to the terms, covenants and
------------ conditions of this Agreement, Seller shall sell to Buyer, and
Buyer shall purchase from Seller, all of the Property.
Section 1.2 The Property. In addition to the fee simple estate, the
------------ Property includes, to the full extent of Seller's ownership
thereof, the following:
(a) Improvements. The buildings and all other improvements,
structures and fixtures of every kind and nature presently
on, in or under or hereafter erected, installed or used in,
on or about the Property (the "Improvements").
(b) Leases. All of Seller's right, title and interest in all of
the leases and tenancy agreements affecting the Property and
any other leases hereafter executed in accordance with this
Agreement (collectively, the "Leases").
(c) Equipment. All renderings, models, and other personal
property of every kind and character owned by Seller and
attached to, appurtenant to, or located on and used in
connection with the operation of the Improvements or the
Property (collectively, the "Tangible Personal Property") as
set forth on the attached Exhibit B. Seller to deliver
through Escrow Holder to Buyer an inventory list and xxxx of
sale of such Tangible Personal Property.
The Property and all of the items referred to in subsections (a) through (c)
above are collectively referred to in this Agreement as the "Property".
ARTICLE 2 - CONSIDERATION
Section 2.1 Purchase Price. The purchase price (the "Purchase Price")
------------ to be paid by Buyer to Seller for the Property is cash in United
States Dollars equal to:
(a) One Million Two Hundred Fifty Six Thousand and No/100
Dollars ($1,256,000.00).
(b) Not less than one (1) day before the Closing Date, Buyer
shall deliver to Escrow Holder (as defined in Section 7.1)
cash, or a cashier's check made payable to Escrow Holder in
the amount of the required purchase price, less the Deposit
referred to in Section 3.1 ("Cash Balance"), and Buyer's
share of escrow costs and prorations as provided in Section
7.3 hereof. Seller shall pay its share of costs and expenses
under this Agreement from the funds of Seller at the close
of escrow.
ARTICLE 3 - DEPOSITS
Section 3.1 Deposit. Within five (5) days of the full execution of
------------ this Agreement, Buyer shall deliver to Escrow Holder a bank
cashier's check payable to Escrow Holder in the amount of Fifty
Thousand and No/100 Dollars ($50,000.00). Said Deposit shall be
held by Escrow Holder in an interest bearing account and any and
all interest accrued thereon shall be credited to Buyer at close
or termination of escrow. For the purposes of this Agreement the
Closing Date or Closing shall be the date on which the Grant Deed
for the Property is recorded in the Official Records of Los
Angeles County.
ARTICLE 4 - CONDITIONS OF TITLE
Section 4.1 Title. Title shall be approved by Buyer in writing through
----------- escrow within seven (7) days of receipt of a current preliminary
title report furnished at Seller's expense. Seller shall furnish
Buyer at Seller's expense a standard California Land Title
Association policy issued by Old Republic Title Company, showing
title vested in Buyer subject only to those items approved by
Buyer as stated above. If Seller is unwilling or unable to
eliminate any title matter disapproved by Buyer as above Buyer
may terminate this Agreement and Escrow Holder shall immediately
refund Buyer's full deposit to Buyer, including any interest
accrued thereon, and escrow shall be canceled as of the date of
delivery of said termination notice to Escrow Holder. All rights
and obligations of the parties existing hereunder shall
immediately terminate and be of no further force or effect
whatsoever.
ARTICLE 5 - DELIVERIES BY SELLER AND CONDITIONS PRECEDENT
Section 5.1 Deliveries by Seller. Within five (5) calendar days after
------------ the date of this Agreement, Seller shall deliver to Buyer the
following items:
(A) As built approved building plans
(B) Notice(s) of completion
(C) Expense records for the property
(D) Copies of unexpired warranties regarding the Property
(E) Studies, reports, documents, or any other agreements,
if any, that will affect the Property beyond the
Closing.
(F) Completed American Industrial Real Estate Association
Property Information Form
Seller shall provide Buyer with all of the items required from
Seller as set forth in this Section on or before the fifth (5th)
calendar day following the date of this Agreement. In the event
Seller does not do so, the Contingency Period and the Closing
Date shall be extended one (1) day for each day of Seller's
delay.
Section 5.2 Conditions Precedent.
------------ Buyer's obligation to purchase the Property shall be subject
to:
(A) Buyer's delivery within three (3) days from Buyer's receipt
of those items detailed in Section 5.1 of written
instructions to Escrow Holder stating that Buyer intends to
proceed with the Closing (such time period shall deemed the
"Contingency Period").
(B) Seller's (as Lessee) and Buyer's (as Lessor) execution
within five (5) days of the date of this Agreement of a
mutually acceptable lease with Base Rent starting at
$10,425.45 per month (61.7" per foot) on a triple net basis
for ten years with annual 3.5% fixed increases.
(C) Seller's performance of each and every obligation of Seller
set forth herein.
Seller's obligation to sell the Property shall be subject to:
(A) Buyer's delivery to escrow of the amounts referred to in
Section 5.1 and Buyer's performance of each and every
obligation of Buyer set forth herein.
Should either i) Buyer, in its sole and absolute discretion and for any reason
whatsoever, fail to deliver written notice as detailed in Section 5.2 (A) above
to Escrow Holder within the Contingency Period or ii) Buyer and/or Seller not
execute a lease in accordance with Section 5.2(B) above within the time periods
referenced therein, then without any further instruction from Buyer or Seller
this Agreement and the escrow contemplated hereunder shall be deemed terminated
and the Deposit along with any and all accrued interest thereon shall be
immediately returned to Buyer. In such case, the obligations of each party to
the other shall cease.
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES
Section 6.1 Seller agrees that the Property shall be maintained in its
------------ present condition by Seller until close of escrow at which xxxx
Xxxxxx further agrees that all systems on the Property, including
but not limited to electrical, heating, air conditioning, and
plumbing will be in good working condition and the roof will be
in good repair without leakage. Grounds will be maintained free
of debris, and there shall be no broken window glass. Seller
further represents that he has no knowledge of any material
defects affecting said Property.
Section 6.2 Seller represents and warrants that (1) Seller is the owner
----------- of the Property and has the full right, power and authority to
sell, convey and transfer the Property to Buyer as provided
herein, and to perform Seller's obligations hereunder; (2)Seller
has no knowledge of any actions, suits or proceedings pending or
threatened before any commission, board, bureau, agency,
instrumentality, arbitrator(s) court or tribunal that would
affect the Property or the right to occupy or utilize same; (3)
Seller has not received any notice of public improvements that
will involve any charge against the Property; (4) Seller has no
knowledge, except as otherwise disclosed to Buyer in writing, of
the existence or prior existence on the Property of any Hazardous
Substance nor of the existence or prior existence of any above or
below ground storage tank or tanks; and (5) Seller is not the
subject of a current or contemplated bankruptcy, insolvency or
probate proceeding.
Section 6.3 Seller represents and warrants that Seller shall not cause
------------ a Material Change, as hereinafter defined, to have occurred with
respect to the Property that has not been approved in writing by
Buyer. For purposes of this Agreement, a "Material Change" shall
be a change in the status of the use, occupancy, tenants, or
condition of the Property that occurs after the date of this
Agreement and prior to the Closing. Should a Material Change
occur prior to Closing, Buyer shall have ten (10) days following
receipt of written notice from any source of any such Material
Change within which to approve or disapprove same. Unless
otherwise notified in writing by either Party or Broker(s),
Escrow Holder shall assume that no Material Change has occurred
prior to the Closing. If there occurs a Material Change and Buyer
does not approve of same, Buyer may elect to cancel this
Agreement as a result of such Material Change and the Deposit
plus any accrued interest thereon shall be returned to Buyer and
the Grant Deed shall be returned to Seller.
Section 6.4 Seller shall indemnify Buyer and shall hold Buyer harmless
------------ from any and all loss, damages, suits, penalties, costs,
liability, and expenses including legal expenses arising out of
any claim for loss or damage to the Property, injuries to or
death of persons, contamination of or adverse effects on the
environment, or any violation of statutes, ordinances, orders,
rules, or regulations of any governmental entity or agency,
caused by or resulting from any hazardous material, substance, or
waste currently on, in, or under the Property and existing
improvements as of the date of close of escrow.
ARTICLE 7 - CLOSING
Section 7.1 Closing. The sale and purchase transaction contemplated by
------------ this Agreement ("Closing") shall be consummated through an escrow
to be opened with OLD REPUBLIC TITLE COMPANY. Escrow shall be
opened by delivery to Escrow Holder of a counterpart of this
Agreement, executed by Seller and Buyer and the delivery of
Buyer's Deposit to Escrow Holder. This Agreement shall constitute
Escrow Holder's instructions respecting the closing of the
purchase and sale of the Property.
Section 7.2 Closing Date. Escrow shall close on or before the third
------------ (3rd) day following Buyer's receipt of the those items required
to be delivered by Seller to Buyer as detailed in Section 5.1 or
such other date as the parties may hereafter determine in
writing.
Section 7.3 Closing Costs. At Closing, Seller shall pay the following
------------ costs of Closing: Documentary transfer taxes, the premium for the
CLTA Owner's Policy of Title Insurance and one half of the escrow
fee. Any bond or assessment which is a lien shall be paid by
Seller. Buyer shall pay one half of the escrow fee. Property
taxes, premiums on insurance acceptable to Buyer, shall be
prorated as of the Closing Date.
Section 7.4 Estimated Closing Statement. Escrow shall provide both
------------ Buyer and Seller an estimated closing statement no later than
three days prior to Closing.
ARTICLE 8 - MISCELLANEOUS
Section 8.1 Buyer reserves the right to assign on the same price and
------------ terms contained herein, and Seller agrees to cooperate in
effecting an I.R.C. Section 1031 tax deferred exchange prior to
close of escrow upon Buyer's written notice through escrow of
intention to do so. Buyer shall pay any additional costs incurred
in said exchange(s) and Seller shall incur no liability by
cooperating with Buyer in this regard.
Section 8.2 Time is of the essence of this Agreement. "Days" as used
------------ herein shall mean business days unless otherwise specified.
Section 8.3 IN THE EVENT BUYER FAILS OR REFUSES TO PERFORM ANY OF THE
------------ COVENANTS CONTAINED HEREIN TO BE PERFORMED BY BUYER, OR IF BUYER
SHALL FAIL TO CLOSE ESCROW FOR ANY OTHER REASON OTHER THAN
SELLERS DEFAULT OR TERMINATION OF THIS AGREEMENT PURSUANT TO THE
PROVISIONS OF THIS AGREEMENT, THEN SELLERS SOLE AND EXCLUSIVE
REMEDY SHALL BE TO TERMINATE THIS AGREEMENT AND ESCROW BY NOTICE
TO BUYER AND ESCROW HOLDER AND RECEIVE THE FUNDS DEPOSITED BY
BUYER WITH ESCROW HOLDER PLUS ANY INTEREST ACCRUED THEREON, IT
BEING EXPRESSLY UNDERSTOOD AND AGREED THAT SUCH AMOUNT SHALL BE A
REASONABLE APPROXIMATION OF THE DAMAGES SUFFERED BY SELLER SINCE
THE SAME ARE DIFFICULT TO ASCERTAIN, AND THEREAFTER NEITHER PARTY
SHALL HAVE ANY OBLIGATIONS TO THE OTHER, EXCEPT THAT ALL COSTS OF
CANCELLATION SHALL BE PAID BY BUYER. SELLER AND BUYER ACKNOWLEDGE
AND AGREE THAT SUCH REMUNERATION IS REASONABLE AS LIQUIDATED
DAMAGES AND SHALL BE IN LIEU OF ANY OTHER RELIEF, RIGHT OR
REMEDY, AT LAW OR IN EQUITY, TO WHICH SELLER MIGHT OTHERWISE BE
ENTITLED BY REASON OF BUYERS DEFAULT.
BY INITIALING THIS CLAUSE, BUYER AND SELLER INDICATE THEIR
AWARENESS AND ACCEPTANCE OF EACH AND EVERY PROVISION HEREOF AND
ACKNOWLEDGES THAT BOTH BUYER AND SELLER HAVE HAD THE OPPORTUNITY
TO SEEK ADVICE FROM LEGAL COUNSEL ABOUT ITS MEANING AND
SIGNIFICANCE
BUYER'S INITIALS:______________ SELLER'S INITIALS:_______________
EXCEPT FOR CIRCUMSTANCES BEYOND SELLER'S CONTROL IF SELLER SHALL
FAIL TO CONVEY THE PROPERTY TO BUYER IN ACCORDANCE WITH THE
PROVISIONS OF THIS AGREEMENT, AND SUCH FAILURE CONSTITUTES A
DEFAULT BY SELLER HEREUNDER, THEN BUYER SHALL HAVE THE RIGHT TO
TERMINATE THIS AGREEMENT AND RECEIVE BACK THE DEPOSIT PLUS
$375,000 AS LIQUIDATED DAMAGES AT WHICH TIME THE PARTIES SHALL
HAVE NO FURTHER OBLIGATIONS TO EACH OTHER AND THIS AGREEMENT
SHALL BE TERMINATED. EXCEPT FOR CIRCUMSTANCES WITHIN SELLER'S
CONTROL IF SELLER SHALL FAIL TO CONVEY THE PROPERTY TO BUYER IN
ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT, AND SUCH
FAILURE CONSTITUTES A DEFAULT BY SELLER HEREUNDER, THEN BUYER
SHALL HAVE THE RIGHT TO EITHER ONE AND ONLY ONE OF THE FOLLOWING
REMEDIES; (A) THE RIGHT TO PURSUE THE SPECIFIC PERFORMANCE OF
THIS AGREEMENT, OR (B) TERMINATE THIS AGREEMENT AND RECEIVE BACK
THE DEPOSIT PLUS $50,000 AS LIQUIDATED DAMAGES AT WHICH TIME THE
PARTIES SHALL HAVE NO FURTHER OBLIGATIONS TO EACH OTHER AND THIS
AGREEMENT SHALL BE TERMINATED. IF BUYER FAILS TO FILE SUIT FOR
SPECIFIC PERFORMANCE AGAINST SELLER IN AN APPROPRIATE COURT ON OR
BEFORE THE DATE WHICH IS THIRTY (30) DAYS FOLLOWING THE LAST DATE
UPON WHICH THE CLOSING DATE COULD HAVE OCCURRED WITHOUT SELLER
BEING IN DEFAULT, THEN BUYER SHALL BE DEEMED TO HAVE ELECTED THE
REMEDY UNDER CLAUSE (B) PRECEDING. SELLER AND BUYER ACKNOWLEDGE
THAT THEY HAVE READ AND UNDERSTAND THE PROVISIONS OF THIS SECTION
8.4 AND BY THEIR INITIALS IMMEDIATELY BELOW AGREE TO BE BOUND BY
ITS TERMS.
BUYER'S INITIALS:_______ SELLER'S INITIALS:_______
Section 8.4 ARBITRATION OF DISPUTES. ANY CONTROVERSY AS TO WHETHER
------------ SELLER IS ENTITLED TO THE LIQUIDATED DAMAGES AND/OR BUYER IS
ENTITLED TO THE RETURN OF DEPOSIT MONEY, SHALL BE DETERMINED BY
BINDING ARBITRATION BY AND UNDER THE COMMERCIAL RULES OF THE
AMERICAN ARBITRATION ASSOCIATION ("COMMERCIAL RULES").
ARBITRATION HEARINGS SHALL BE HELD IN THE COUNTY WHERE THE
PROPERTY IS LOCATED. ANY SUCH CONTROVERSY SHALL BE ARBITRATED BY
THREE ARBITRATORS WHO SHALL BE IMPARTIAL REAL ESTATE BROKERS WITH
AT LEAST 5 YEARS OF FULL TIME EXPERIENCE IN BOTH THE AREA WHERE
THE PROPERTY IS LOCATED AND THE TYPE OF REAL ESTATE THAT IS THE
SUBJECT OF THIS AGREEMENT. THEY SHALL BE APPOINTED UNDER THE
COMMERCIAL RULES. THE ARBITRATORS SHALL HEAR AND DETERMINE SAID
CONTROVERSY IN ACCORDANCE WITH APPLICABLE LAW, THE INTENTION OF
THE PARTIES AS EXPRESSED IN THIS AGREEMENT AND ANY AMENDMENTS
THERETO, AND UPON THE EVIDENCE PRODUCED AT AN ARBITRATION
HEARING. PRE-ARBITRATION DISCOVERY SHALL BE PERMITTED IN
ACCORDANCE WITH THE COMMERCIAL RULES OR STATE LAW APPLICABLE TO
ARBITRATION PROCEEDINGS. THE AWARD SHALL BE EXECUTED BY AT LEAST
TWO OF THE THREE ARBITRATORS, BE RENDERED WITHIN 30 DAYS AFTER
THE CONCLUSION OF THE HEARING, AND MAY INCLUDE ATTORNEYS FEES AND
COSTS TO THE PREVAILING PARTY. JUDGEMENT MAY BE ENTERED ON THE
AWARD IN ANY COURT OF COMPETENT JURISDICTION NOTWITHSTANDING THE
FAILURE OF A PARTY DULY NOTIFIED OF THE ARBITRATION HEARING TO
APPEAR THEREAT.
BUYER'S RESORT TO OR PARTICIPATION IN SUCH ARBITRATION
PROCEEDINGS SHALL NOT BAR SUIT IN A COURT OF COMPETENT
JURISDICTION BY THE BUYER FOR DAMAGES AND/OR SPECIFIC PERFORMANCE
UNLESS AND UNTIL THE ARBITRATION RESULTS IN AN AWARD TO THE
SELLER OF LIQUIDATED DAMAGES, IN WHICH EVENT SUCH AWARD SHALL ACT
AS A BAR AGAINST ANY ACTION BY BUYER FOR DAMAGES AND/OR SPECIFIC
PERFORMANCE.
NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE
ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THIS
"ARBITRATION OF DISPUTES" PROVISION DECIDED BY NEUTRAL
ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP
ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A
COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE
GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS
SUCH RIGHTS ARE SPECIFICALLY INCLUDED IN THIS ARBITRATION OF
DISPUTES PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER
AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE
UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE.
YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.
BY INITIALING THIS CLAUSE, BUYER AND SELLER INDICATE THEIR
AWARENESS AND ACCEPTANCE OF EACH AND EVERY PROVISION HEREOF AND
ACKNOWLEDGES THAT BOTH BUYER AND SELLER HAVE HAD THE OPPORTUNITY
TO SEEK ADVICE FROM LEGAL COUNSEL ABOUT ITS MEANING AND
SIGNIFICANCE.
BUYER'S INITIALS:__________ SELLER'S INITIALS:____________
Section 8.5 Any and all agreements affecting the Property not
------------ specifically approved and assumed by Buyer in writing shall be
terminated by Seller prior to the close of escrow so that said
agreements, after the close of escrow, shall have no further
force or effect nor shall be in any way binding upon the Buyer.
Section 8.6 If any party brings an action or proceeding (including
------------ arbitration) involving the Property, to enforce the terms hereof,
or to declare rights hereunder, the Prevailing Party (as
hereinafter defined) in any such proceeding, action, or appeal
thereon, shall be entitled to reasonable attorneys' fees. Such
fees may be awarded in the same suit or recovered in a separate
suit, whether or not such action or proceeding is pursued to
decision or judgement. The term "Prevailing Party" shall include,
without limitation, a party who substantially obtains or defeats
the relief sought, as the case may be, whether by compromise,
settlement, judgement, or the abandonment by the other party of
its claim or defense. The attorneys' fees award shall not be
computed in accordance with any court fee schedule, but shall be
such as to fully reimburse all attorneys' fees reasonably
incurred.
Section 8.7 Buyer and Seller acknowledge that there are no oral or
------------ written agreements made outside this Agreement not contained
herein in writing and all parties agree that they are not acting
on any representations whatsoever except as is specifically set
forth in writing herein.
Section 8.8 Seller is aware that Buyer is a real estate licensee who in
----------- no manner represent the interests of Seller.
Section 8.9 Buyer and Seller hereby acknowledge and agree that Xxxx
------------ Commercial Real Estate Services is the procuring cause of this
transaction. Xxxx Commercial Real Estate Services represents
Seller only and in no manner whatsoever is a subagent and/or
representative of Buyer. Buyer and Seller each represent and
warrant to the other that he/she/it has had no dealing with any
person, firm, broker or finder in connection with the negotiation
of this Agreement and/or the consummation of the purchase and
sale contemplated herein, other than the Broker(s) named above
and no broker or other person, firm or entity, other than said
Broker(s) is/are entitled to any commission or finder's fee in
connection with this transaction as the result of any dealings or
acts of such Party.
Section 8.10 This Agreement shall be binding upon, and inure to the
------------- benefit of, Seller and Buyer and their respective successors and
assigns, except as otherwise provided herein.
The offer made by this Purchase and Sale Agreement dated September 6, 2001 shall
remain open until 5:00 PM on that date and must be accepted as presented and
returned with receipt acknowledged by Buyer on or before that time, in writing,
or otherwise this Agreement shall be of no further force or effect.
BUYER: XXXXXXX INVESTMENT CORPORATION
______________________________ _________________________________
Xxxxx X. Xxxxxxx, Secretary Xxxxx X. Xxxxxxx, Vice President
SELLER:
______________________________ _________________________________
