PURCHASE AGREEMENT
Exhibit 2.1
THIS PURCHASE AGREEMENT (“Agreement”) is made as of the 18th day of December, 2017 (“Effective Date” to be the day folly executed), by and between REASONS AVIATION, LLC, an Arizona limited liability company (“Seller”) and RICH UNCLES NNN OPERATING PARTNERSHIP, LP, a Delaware limited partnership (“Purchaser”). In consideration of the mutual covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1. SALE OF PROPERTY. Seller agrees to sell, transfer and convey to Purchaser and Purchaser agrees to purchase from Seller, in accordance with the terms of this Agreement to the following (collectively, the “Property”):
(a) Fee title in and to that certain real property consisting of Lot 1 and Lot 2 in the Santan Technology Park, commonly known as 6877 and 0000 Xxxx Xxxx Xxxx, Xxxxxxxx, Xxxxxxxx Xxxxxx (the “County”), Arizona 85226, legally described on Exhibit A attached hereto and incorporated herein by this reference, together with all rights, privileges, easements and interests appurtenant thereto including, but not limited to, all public roads and rights of way adjacent thereto and all abutters and access rights thereto and all water and mineral rights associated therewith (collectively, the “Land”);
(b) Those certain two buildings, one building located of each of the two (2) lots, consisting in the aggregate approximately 162,714 rentable square feet, and all other buildings and improvements, if any, located on the Land (the “Improvements” and together with the Land, the “Real Property”);
(c) Those certain transferable and assignable contracts and warranties listed on attached Schedule 1(c) designated by Purchaser for assignment before the Contingency Date (the “Contracts and Warranties”);
(d) All fixtures, building systems, carpeting, draperies and other tangible items of personal prope1iy owned by Seller both now and as of the Closing Date and presently affixed, attached to, placed or situated upon the Real Property and used in connection with the ownership, operation, maintenance and occupancy of the Real Property, including HVAC systems, plumbing systems and electrical wiring (excluding any items of personal property leased to Seller or otherwise owned by third parties) (collectively, the “Tangible Personal Property 11 and,
(e) All intangible personal property relating to the Real Property which Seller may assign without obtaining the consent of any third parties, including but not limited to: all of the names under which the Real Property is being operated (excluding any use of the Av-Air, Inc. name or logo), the plans and specifications for the Improvements and all architectural and engineering studies, reports, drawings and prints relating to the Improvements, all warranties and guarantees relating to the Real Property and the Tangible Personal Property, all licenses, permits, entitlements, approvals, and other written authorization necessary for the zoning, land use, operating, ownership, construction and maintenance of the Real Properly (“Intangible Property”).
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Seller further agrees to execute, or cause AvAir, Inc., an Arizona corporation (“Tenant”) to execute, that certain lease for the Property dated as of Closing, an initial draft of which is attached hereto and incorporated herein by reference as Exhibit B and which initial draft shall be replaced and superseded by the form of Lease mutually approved by Seller, Purchaser and Tenant under Section 8(g) below (“Lease”).
2. PURCHASE PRICE AND PAYMENT. The purchase price (“Purchase Price”) for the Properly is Twenty-Six Million Five Hundred Thousand and 00/100 Dollars ($26,500,000.00), which shall be paid as follows:
(a) Taxes. All ad valorem real estate taxes (“Taxes”) imposed on the Property for the year in which Closing occurs and any prior year not then clue and payable shall be Seller’s responsibility.
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4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER. In order to induce Purchaser to enter into this Agreement, and in addition to any other representations, warranties or covenants contained herein, Seller makes the following representations, warranties and covenants, each of which is material to the Purchaser and each of which is effective as of the date of this Agreement and will be effective as of the date of Closing and shall survive the Closing. For purposes of this Article 4 the term “Seller’s knowledge” or “actual knowledge” means the actual, present knowledge of Xxxxxx X. Xxxxx. Seller represents and warrants that Xxxxxx X. Xxxxx is the person within Seller’s organization having (i) direct responsibility for the management of the Property and (ii) the most comprehensive knowledge of the matters set forth in this Article 4.
(a) Title to Property. Subject to matters disclosed by an accurate ALTA survey of the Property, physical inspection of the Property or in the Commitment (as defined below), the Seller is the owner of fee title to the Property. There are no purchase agreements, leases (except a certain lease for the Property between Seller and Tenant in existence as of the date hereof (the “Existing Lease”)), options or other agreements of any kind, written or oral, xxxxxx or inchoate, formal or informal, whereby any person or entity other than Seller has acquired or has any basis to assert any right, title, estate or interest in, or right to possession, use, enjoyment or proceeds of all or any portion of the Property, except as otherwise disclosed in writing to Purchaser. The Existing Lease shall be terminated, and the Lease executed on or before Closing.
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(j) Section 1445(a) Non foreign Person. Seller is not a foreign person for purposes of and is not subject to withholding under Internal Revenue Code Section 1445(a).
(1) Hazardous Waste. The Property is not, in whole or in part, on a landfill and there are no storage tanks or related pipes, vents or other equipment in, on, under or above the surface of the Property. To Seller’s knowledge, there has been no release, disposal, discharge, deposit, injection, dumping, leaking, spilling, pumping, pouring, emitting, leaching, placing or escape of any Hazardous Substance, hereinafter defined, on, in, under the surface or from the Property (hereinafter “Release”), and there is no facility in or on the Property which is used for the treatment, storage or disposal of any Hazardous Substance. Seller shall protect, defend, indemnify and hold harmless the Purchaser from and against any and all claims, demands, damages, fines,judgments, penalties, costs, liabilities, or losses (including, without limitation, any and alI clean up, removal and other remediation costs and sums paid for settlement of claims, attorneys’ fees, consultant, and expert fees, as well as any response costs under the Comprehensive Envirnnmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq, (“CERCLA”)) arising in connection with any Release which occurred prior to Closing. “Hazardous Substance” means any substance which is toxic, ignitable, reactive, corrosive, radioactive, flammable, explosive, or a human health or safety hazard, including but not limited to asbestos, petroleum products, by products and wastes, polychlorinated biphenyls (PCB’s), radon and substances defined as “hazardous substances,” “hazardous materials,” ’‘toxic substances”, or “hazardous wastes” in CERCLA; the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.; the Clean Water Act, 33 U.S.C. Section 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.; and any other applicable statt1tes, laws, ordinances, rules and regulations of any governmental or quasi-governmental authority or body having jurisdiction over the Property.
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(o) Lease and Lease Termination. The Lease in the form of Exhibit B shall be fully executed by Seller and/or Tenant as applicable and delivered to Purchaser (or to Purchaser’s assignee or nominee) at Closing, and a termination of the Existing Lease for the Property shall be executed by Seller and Tenant and any other tenant of the Property in substantially similar form as Exhibit C hereto.
(p) Seller Materials. Prior to the Effective Date, Seller has delivered to Purchaser copies of the documents in Seller’s possession pertaining to the Prope1ty listed on attached Schedule 4(p) (“Seller’s Materials”). Any updates, re-certifications, revisions or amendments to the Seller’s Materials requested by Purchaser shall be at the sole cost and expense of Purchaser. Seller shall deliver to Purchaser any other agreement, document or information reasonably requested by Purchaser in Seller’s possession.
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(q) OFAC. To the best of Seller’s knowledge, Seller is not a person or entity with whom Seller is restricted from doing business under regulations of the Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury (including, but not limited to, those named on OFAC’s Specially Designated and Blocked Persons list) or under any related statute, Executive Order (including, but not limited to, the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism), or other similar governmental action.
(r) Organization. Seller is a limited liability company duly organized, validly existing and in good standing under the laws of Arizona, and is entitled to and has all requisite power and authority to own and operate its assets as they are presently owned and operated, to enter into this Agreement and to carry out the transactions contemplated hereby.
7. INVESTIGATION OF THE PROPERTY. From and after the date of this Agreement, Seller grants to Purchaser and its agents and representatives the full right of access to the Property during reasonable times and upon coordination with Xxxx Xxxx of Xxx & Associates, Purchaser may, in addition to the items provided, or to be provided by the Seller, through its agents and representatives, conduct a complete non-invasive physical inspection of the Property including, without limitation, preparation of boundary line, spot and topographical as-built surveys, environmental and hazardous waste and substance investigations and such other engineering and mechanical inspections and investigations as Purchaser may reasonably require. Purchase!’ shall indemnify Seller against any mechanic’s liens or other claims, costs, liabilities or expenses (including attorneys’ fees) against the Property or Seller’s ownership therein resulting from Purchaser’s entry upon the Property or from Purchaser’s inspection, surveying, or other non invasive work performed by or through Purchaser and Purchaser shall restore the Property to substantially the same condition as it existed prior to such investigations. If Purchaser’s agent determines in its reasonable opinion that invasive action is needed, which may include soil sampling and boring tests, Purchaser shall obtain Seller’s written consent to do such further testing, which shall not be unreasonably withheld. In the event Seller unreasonably withholds its consent to do further testing, Purchaser may terminate this Agreement, the Xxxxxxx Money Deposit shall be returned to Purchase1’, and Seller shall reimburse Purchaser for all of its actual out-of-pocket costs and expenses incurred through such date of termination in connection with its investigation of the Prope1ty, including without limitation, Purchaser’s attorneys’ fees, up to the maximum amount of $50,000 (“Investigation Costs”).
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8. CONTINGENCIES FOR PURCHASER’S BENEFIT. In addition to any other conditions set forth in this Agreement, Purchaser’s obligation to consummate the purchase provided for herein shall be subject to the fulfillment, by satisfaction or written waiver, in Purchaser’s sole discretion, on or before December 29, 2017 (the “Contingency Date”), of each of the following contingencies:
(i) Seller has received from Title Company a commitment for an ALTA owner’s policy of title insurance (“Commitment”). Purchaser’s obligations under this Agreement are subject to Purchaser’s approval, in Purchaser’s sole discretion, of (A) the Commitment reflecting good and marketable fee simple title to the Property and all easements and other rights benefiting the Property in a condition approved by Purchaser with such coverage and including such endorsements as Purchaser may require, such Commitment being in a form satisfactory to Purchaser, and (B) an ALTA survey (“Survey”) of the Property satisfactory to Purchaser and Title Company, showing completed buildings and other improvements including walkways, driveways and parking areas, if any, situated on the Property as of Closing in relationship to the final out boundaries, building lines, roadways and easements; the Survey to be certified to Purchaser and Purchaser’s Lender, and the Title Company and prepared by a registered surveyor, licensed in the State of Arizona, who is acceptable to Purchaser and Title Company and is sufficient to delete the standard survey exceptions to the title insurance policy on the Property,
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(ii) Purchaser’s Title Objections (defined below) must be delivered to Seller in writing by no later than seven (7) business days after the Effective Date or Purchaser will be deemed to have approved the Title Commitment and all matters set forth therein. If the Survey or an update or endorsement to the Commitment delivered to Purchaser or a revision to the Survey (“Title/Survey Update”) discloses a title or Survey matter that Purchaser determines in its commercially reasonable discretion materially affects the use of the Property which was not fully disclosed in the Commitment, on the Survey or in a previous Title/Survey Update, Purchaser· may deliver to Seller, within three (3) days following Purchaser’s receipt of the Title/Survey Update a written Objection to such defect first disclosed on the Title/Survey Update accompanied by a copy of the Title/Survey Update.
(iii) If Seller notifies Purchaser in writing that it is unable or unwilling to cure any or all matters objected to by Purchaser as provided in Section 8(f)(ii) above (“Title Objections”) on or before the date that is five (5) days after the date Seller receives written notice of Purchaser’s Title Objections, Purchaser may at its sole option (i) accept the condition of title subject to the defect(s), in which event said conditions and exceptions shall be accepted for all purposes; or (ii) reject the condition of title, in which event this Agreement shall become null and void and of no further force and effect, and the Xxxxxxx Money Deposit shall be returned without further liability of either party to the other; or (iii) cause the Title Company to insure over such defect, and, in such event, Purchaser shall pay any costs or additional premiums in order for Purchaser to obtain such insurance.
(i) Financial Information for Tenant and Guarantor. Seller has approved the financial statements, federal and state tax returns, and operating statements for both Tenant and Guarantor delivered to Purchaser as part of Seller’s Materials.
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Purchaser may disapprove any of the contingencies set forth above in its sole discretion and terminate this Agreement by delivery of written notice (“Purchaser’s Disapproval Notice”) before 5:00 p.m. (Pacific Time Zone) on the Contingency Date. If Purchaser does not timely deliver Purchaser’s Disapproval Notice to Seller, then then all contingencies as set f01ih in this Article 8 shall be deemed to have been approved by Purchaser, this Agreement shall remain in full force and effect, the Xxxxxxx Money Deposit shall immediately become no1Hefundable to Purchaser (except as otherwise provided herein, including without limitation, Seller’s default hereunder) and the parties shall proceed to Closing as provided herein. If Purchaser timely terminates this Agreement as provided herein, than this Agreement shall be terminated and of no further force or effect and the Xxxxxxx Money Deposit and interest thereon shall be returned to Purchaser (less the sum of Fifty Dollars ($50.00) which shall be paid to Seller in consideration for Purchaser’s right to investigate the Property), and thereafter neither party shall have any further liability or obligation hereunder
At any time prior to the date of Closing, Purchaser shall have the right, but not the obligation, to take any and all steps desired by Purchaser to cure any defect in title, survey; or other matter relating to the Property. Nothing contained in this paragraph or any actions taken by Purchaser in furtherance of this paragraph shall negate 01· void any obligations of Seller, which Seller has agreed to undertake, to use its good faith, commercially reasonable efforts to cure any such defects, nor shall this paragraph or any actions taken by Purchaser in furtherance of this paragraph negate or void any right of Purchaser to terminate this Agreement as provided in this Section.
(i) Deed. The Special Warranty Deed in a form of attached Exhibit D (the “Deed”) properly executed and acknowledged by Seller, conveying fee simple title to the Property to Purchaser in accordance with the requirements of the Commitment, subject to (i) real estate taxes for the year of Closing which are not then due and payable; (ii) those restrictions, easements, building lines and conditions of record, if any, set forth in the Commitment for title insurance approved by Purchaser hereunder, and (iii) zoning regulations (the “Permitted Exceptions”). The following shall be automatically deemed not to be approved by Purchaser and shall not be deemed Permitted Exceptions: (a) standard exceptions that are typically removed by a standard Seller’s affidavit or a survey, (b) liens and monetary encumbrances, and (c) mortgages or deeds of trust or other similar documents securing a loan.
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(iv) Rent Due under Lease. Cash in the amount of all rent and other sums to be paid to Purchaser by Tenant under the Lease on the Commencement Date (“Tenant's Rent”).
(v) Releases. Written release of any lien, security interest, mortgage or deed of trust, mechanic's lien or other encumbrance affecting the Property which is not assumed by Purchaser.
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(ii) Lease. Two (2) counterparts of the Lease properly executed by Purchaser.
Notwithstanding the foregoing, Purchaser shall not be obligated to close on the purchase of the Property if (i) there is a change of circumstances in any of the contingencies provided for in Section 8 which would render such contingencies unfulfilled or unsatisfied as of the Closing Date; or, (ii) each of the representations and warranties of Seller made herein are not true and correct in all material respects; or (iii) Seller has not performed all covenants and agreements made herein; or (iv) Seller has not delivered to Title Company all of the closing documents required pursuant to Section 9(c) hereof; or (v) Title Company has not unconditionally and irrevocably committed to issue to Purchaser its 2006 ALTA Owners Policy of Title Insurance in the amount of the Purchase Price, insuring that Purchaser has good and marketable fee simple title to the Property, subject only to the Permitted Exceptions (the “Title Policy”).
If all of the foregoing Closing conditions have not occurred, then Purchaser may, at Purchaser’s sole option: (A) terminate this Agreement, and if Seller is in default hereunder, exercise Purchaser’s remedy under Section 14(a) below; (B) extend the Closing Date for the number of days necessary for Seller to fulfill, satisfy or cause to be fulfilled or satisfied any such contingencies provided such Closing Date is not extended by more than thirty (30) days; (C) waive any of the foregoing contingencies and proceed to close on its purchase of the Property; or (D) if Seller is in default hereunder, file an action for specific performance of this Agreement as permitted under Section 14(a) below. If Purchaser terminates this Agreement, this Agreement shall be of no further force or effect and the Xxxxxxx Money Deposit and interest thereon shall be returned to Purchaser (less the sum of Fifty Dollars ($50.00) which shall be paid to Seller in consideration for Purchaser’s right to investigate the Property). If Seller is in default hereunder, Seller shall also pay to Purchaser its Investigation Costs and thereafter neither party shall have any further liability or obligation hereunder.
(t) Title Company’s Duties. Immediately following the Closing, Title Company shall:
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(i) First, record the Deed in the Official Records of the County;
(ii) Second, cause the Title Policy to be issued to Purchaser;
(iii) Third, (i) disburse to Seller the Purchase Price less Seller’s share of any prorated items under Sections 3(a) and (b) above, the cost of releasing all encumbrances under Section 3(c). Seller’s share of any closing expenses under Section 3(d) above, and the amount of any other closing expenses payable by Seller pursuant to the terms of this Agreement, (ii) disburse payment of all items chargeable to the account of Purchaser, (iii) disburse the Rent to Purchaser; and (iv) disburse the balance of the funds deposited by Purchaser, if any, to Purchaser in accordance with the Closing Statement approved by Purchaser; and,
(iv) Finally,
(A) deliver to Purchaser a conformed copy of the Deed, a fully executed Lease, Tenant’s Rent, a fully executed Xxxx of Sale and Assignment, the fully executed Lease Termination of the Existing Lease, the FIRPTA executed by Seller, the Guaranty executed by Guarantor and the final Closing Statement; and,
(B) deliver to Seller a conformed copy of the recorded Deed, a fully executed Lease, a fully executed Xxxx of Sale and Assignment and the final Closing Statement,
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If to Seller: |
Reasons Aviation, LLC 0000 Xxxx Xxxxxxx Xxxxx Xxxxxxxx, Xxxxxxx 00000 Attn: Xxxxxx Xxxxx Telephone: (000) 000-0000 Fax: (000) 000-0000 |
With a copy to: |
Xxxxxxx & Xxxxx, P.A. 0000 Xxxx Xxxxxxxxx Xxxx, 0xx Xxxxx Xxxxxxx, Xxxxxxx 00000 Attn: Xxxx X. Xxxx, Esq. Telephone: (000) 000-0000 Fax: (000) 000-0000 |
With a copy to: | Xxxx Xxxx |
Xxx & Associates | |
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000 | |
Xxxxxxx, Xxxxxxx 00000 | |
Telephone: (000) 000-0000 | |
Fax: (000) 000-0000 | |
If to Purchaser: |
Rich Uncles NNN Operating Partnership, LP 0000 Xxxxxxx Xxxxxx, Xxxxx 000 |
Xxxxx Xxxx, Xxxxxxxxxx 00000 Attn: Xxxxx X. Xxxxxx Telephone: (000) 000-0000 Fax:N/A | |
With a copy to: | Xxxxxx X. Xxxxxx, Esq. |
0000 XxxXxxxxx Xxxxx, Xxxxx 000 Xxxxxxx Xxxxx, Xxxxxxxxxx 00000 Telephone (000) 000-0000 | |
Fax: (000) 000-0000 |
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The parties may change their respective addresses and/or telefax/telecopy numbers for the receipt of notice hereunder by giving notice thereof to the other party in accordance herewith. Notices 011 behalf of a party may be sent by that party’s legal counsel.
(i) the waive the default and close the purchase of the Property pursuant to provisions hereof; or
(ii) specifically enforce the provisions of this Agreement (Purchaser must file any lawsuit within 45 days of the default or be deemed to have waived its right to xxx); or
(iii) cancel and terminate this Agreement and in such event all Xxxxxxx Money Deposit and interest thereon shall immediately be paid to Purchaser and if Seller is in default Seller shall reimburse Purchaser for its Investigation Costs as Purchaser’s sole and exclusive remedy.
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(g) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the state of Arizona.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date first above written.
SELLER: | REASONS AVIATION, LLC, an Arizona limited | ||
liability company | |||
By: | /s/ Xxxxxx X. Xxxxx | ||
Xxxxxx X. Xxxxx, its | |||
Manager | |||
PURCHASER: | RICH UNCLES NNN OPERATING | ||
PARTNERSHIP, LP, a Delaware limited partnership | |||
By: | RW Holdings NNN REIT, Inc. a Maryland corporation, its General Partner | ||
By: | /s/ Xxxxx X. Xxxxxx, | ||
Xxxxx X. Xxxxxx, its Chief Investment Officer |
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