PURCHASE AND SALE AGREEMENT
(WITH OPTION)
BY AND BETWEEN
The Xxxxx Xxxx Companies,
a Nevada corporation
and
RZ Corporation,
a Nevada corporation
AUGUST 12, 1998
EXHIBIT 10.4
TABLE OF CONTENTS
1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . 1
2. SALE OF PROPERTY, PURCHASE PRICE AND DEPOSIT; OPTIONS. . . 3
3. TITLE MATTERS. . . . . . . . . . . . . . . . . . . . . . . 5
4. DUE DILIGENCE. . . . . . . . . . . . . . . . . . . . . . . 6
5. SELLER'S REPRESENTATIONS AND WARRANTIES. . . . . . . . . . 7
6. PURCHASER'S REPRESENTATIONS AND WARRANTIES . . . . . . . . 9
7. SURVIVAL OF REPRESENTATIONS AND WARRANTIES . . . . . . . .10
8. COVENANTS PENDING CLOSING. . . . . . . . . . . . . . . . .10
9. EXPRESS CONDITIONS TO CLOSING. . . . . . . . . . . . . . .11
10. THE CLOSING. . . . . . . . . . . . . . . . . . . . . . . .12
11. CLOSING COSTS, EXPENSES AND PRORATIONS . . . . . . . . . .13
12. INDEMNITIES. . . . . . . . . . . . . . . . . . . . . . . .13
13. REMEDIES UPON DEFAULT. . . . . . . . . . . . . . . . . . .14
14. [INTENTIONALLY DELETED]. . . . . . . . . . . . . . . . . .14
15. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . .14
16. 1031 EXCHANGE. . . . . . . . . . . . . . . . . . . . . . .17
LIST OF EXHIBITS
EXHIBIT "A" [Assignment and Assumption Agreement]. . . . . . . . 20
EXHIBIT "B" [Deed] . . . . . . . . . . . . . . . . . . . . . . . 21
EXHIBIT "C" [Form of Estoppel Certificate] . . . . . . . . . . . 22
EXHIBIT "D" [Permitted Exceptions] . . . . . . . . . . . . . . . 23
EXHIBIT "E" [Leases] . . . . . . . . . . . . . . . . . . . . . . 24
EXHIBIT "F" [Legal Description of the Property]. . . . . . . . . 25
PURCHASE AND SALE AGREEMENT
(WITH OPTION)
This Purchase and Sale Agreement (with Option) ("Agreement")
is entered into on the Effective Date, by and between The Xxxxx
Xxxx Companies, a Nevada corporation, or its designee (hereinafter
"Purchaser") and RZ Corporation, a Nevada corporation (hereinafter
"Seller") based upon the following recitals:
A. Seller is the owner of certain Property, as defined
below.
B. Subject to the terms and conditions as set forth
herein, Seller has agreed to sell its interest in the Property to
Purchaser and Purchaser has agreed to purchase Seller's interest
in the Property from Seller.
NOW, THEREFORE, based upon the foregoing and the
representations and warranties included herein, in consideration
of the mutual promises and covenants hereinafter contained and
subject to the conditions hereinafter set forth, the parties
agree as follows:
1. DEFINITIONS
1.1 "Assignment" shall be defined as the Assignment and
Assumption Agreement in substantially the form of
Exhibit "A" attached hereto, whereby Seller assigns its
rights, duties and obligations as landlord under the
Leases to Purchaser, and Purchaser assumes the same from
Seller.
1.2 "Deposit" shall be defined as the sum of Ten Million and
No/100 Dollars ($10,000,000.00) and all interest accrued
thereon.
1.3 "Closing" shall be defined as set forth in Section 10.1.
1.4 "Condemnation Proceeding" is defined as that certain
condemnation proceeding in Xxxxxxxx Xxxxx, Xxxxx Xxxxxx,
Xxxxxx, Xxxx Xx. X000000.
1.5 "Condemned Parcel" shall be defined as that certain
parcel of real property, consisting of approximately .77
acres, referenced as APN 162-20-603-010, which is the
subject of the Condemnation Proceeding.
1.6 "Deed" shall be defined as the grant, bargain and sale
deed in substantially the form of Exhibit "B" attached
hereto.
1.7 "Due Diligence Period" shall be defined as the period
starting at the Effective Date and ending August 24,
1998.
1.8 "Effective Date" shall mean the date of execution of the
Agreement.
1.9 "Environmental Laws" shall be defined as set forth in
Section 5.15.
1.10 "Environmental Study" shall be defined as set forth in
Section 4.1.
1.11 "Escrow" shall be defined as set forth in Section 2.2.
1.12 "Escrow Agent" shall be defined as Nevada Title Company.
1.13 "Estoppel Certificate" shall be defined as set forth in
Section 9.1.4 and in substantially the form set forth in
Exhibit "C."
1.14 "FIRPTA" shall be defined as the Foreign Investment Real
Property Tax Act, Internal Revenue Code Section 1445.
1.15 "Hazardous Substances" shall be defined as set forth in
Section 5.16.
1.16 "Leases" shall be defined as the leases set forth as
Exhibit "E" hereto.
1.17 "Options" shall be defined as set forth in Section 2.3.
1.18 "Option Closings" shall be defined as set forth in
Section 2.3.
1.19 "Option Consideration" shall be defined as set forth in
Section 2.3.
1.20 "Option Periods" shall be defined as set forth in
Section 2.3.
1.21 "Permitted Exceptions" shall be defined as set forth in
Section 3.3 and Exhibit "D".
1.22 "Preliminary Title Report" shall be defined as set forth
in Section 3.3.
1.23 "Property" shall be defined as that certain parcel of
real property consisting of approximately 10.55 acres,
APN 000-00-000000, generally located at the intersection
of Xxxxxx Avenue and Las Vegas Boulevard, in the County
of Xxxxx, State of Nevada, as shown on Exhibit "F",
together with Seller's interest, if any, in any
buildings and improvements located thereon and all
rights, licenses and easements appurtenant to the
Property hereinabove mentioned. Upon completion of the
Survey the legal description of the Property therein
shall be used for all purposes hereunder.
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1.24 "Prorations" shall be defined as set forth in Section
11.
1.25 "Purchase Price" shall be defined as the sum of
ONE HUNDRED FOURTEEN MILLION AND NO/100 DOLLARS
($114,000,000.00).
1.26 "Survey" shall be defined as set forth in Section 3.2.
1.27 "Title Company" shall be defined as set forth in Section
3.1.
1.28 "Title Policy" shall be defined as set forth in Section
3.4.
2. SALE OF PROPERTY, PURCHASE PRICE AND DEPOSIT; OPTIONS
2.1 At the Closing, Seller shall sell, assign, transfer and
convey to Purchaser and Purchaser shall purchase from
Seller the Property free and clear of all liabilities,
claims, liens and encumbrances except for the Permitted
Exceptions and the Leases. The sale of the Property
shall be evidenced by the Deed.
2.2 The Purchase Price shall be payable as follows:
2.2.1 Escrow. No later than one (1) banking day
after the Effective Date, Purchaser shall
cause an escrow (the "Escrow") to be opened at
the office of the Escrow Agent and will
deposit the Deposit as xxxxxxx money into
Escrow. The Deposit shall be placed in an
interest-bearing account by the Escrow Agent
and shall be applied and disbursed as herein-
after set forth. If Purchaser fails to pay the
Deposit as set forth in this section, then the
Agreement will be deemed automatically ter-
minated and will be of no further force and
effect.
2.2.2 Balance of Purchase Price. At Closing,
Purchaser shall pay through Escrow, in
immediately available U.S. funds the balance
of the Purchase Price minus the Deposit and
subject to the Prorations (the "Closing
Payment").
2.3 Options. Seller hereby grants to Purchaser the
following options:
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2.3.1 The First Option. If the Condemnation
Proceeding is abandoned pursuant to NRS 37.180
with respect to all of the Condemned Parcel,
then Purchaser shall have a period of one (1)
year following the date a written notice of
abandonment of the Condemnation Proceeding is
filed (the "First Option Period") in which to
give Seller notice of its intent to exercise
an option to purchase the Condemned Parcel
(the "First Option") for the sum of EIGHT
MILLION, THREE HUNDRED TWENTY THOUSAND DOLLARS
($8,320,000.00) (the "First Option Consider-
ation"). If the Condemnation Proceeding is
abandoned pursuant to NRS 37.180 with respect
to less than all of the Condemned Parcel, then
Purchaser shall have the First Option Period
in which to give Seller notice of its intent
to exercise the First Option for a pro rata
percentage of the First Option Consideration,
which shall be determined by the following
formula: multiply the fraction in which the
numerator is the acreage of the Condemned
Parcel that is abandoned pursuant to the
Condemnation proceeding and the denominator is
.77 acres by the First Option Consideration.
In the event Purchaser exercises the First
Option, Purchaser shall pay to Seller the
First Option Consideration, or the pro rata
share thereof as described in this Section
2.3, within ten (10) business days thereafter
(the "First Option Closing"). At the First
Option Closing: (1) the Condemned Parcel or
that portion with respect to which the
Condemnation Proceeding has been abandoned,
shall be conveyed to Purchaser free and clear
of any liens, encumbrances, mortgages,
pledges, obligations, etc., imposed by Seller,
by grant, bargain and sale deed in sub-
stantially the form of Exhibit "B" hereto; (2)
Seller shall assign to Purchaser its right, if
any, to damages arising from occupancy of the
Condemned Parcel pursuant to NRS 37.180(2);
and (3) Seller's representations and
warranties contained in Sections 5.2 through
5.6 herein shall be true and correct as if
originally and additionally made with refer-
ence to the Condemned Parcel. In the event
the Condemnation Proceeding is abandoned,
Seller shall return any compensation as
described in NRS 37.100(4) that it received
for the Condemned Parcel to the County of
Xxxxx or the appropriate governmental entity
that first paid said compensation to Seller by
no later than the First Option Closing, or, in
the alternative, Purchaser may remit said
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compensation to the County of Xxxxx or the
appropriate governmental entity and reduce the
Option Consideration by that same amount.
2.3.2 The Second Option. Following the Closing, at
any time prior to the expiration of the 30-day
period following the entry of a final judgment
under the Condemnation Proceeding, or the
abandonment of the Condemnation Proceeding,
whichever event shall first occur, Purchaser
shall have the option to acquire all of
Seller's rights in and to the Condemnation
Parcel and in the Condemnation Proceeding (the
"Second Option") in consideration for payment
to the Seller of the sum of Five Million Nine
Hundred Sixteen Thousand Five Hundred Dollars
($5,916,500) (the "Second Option Consider-
ation"). In the event that Purchaser exercises
the Second Option, Purchaser shall pay to
Seller the Second Option Consideration within
ten (10) business days thereafter (the "Second
Option Closing"). At the Second Option Closing
(i) Seller's title to the Condemned Parcel
shall be conveyed to Purchaser free and clear
of any liens, encumbrances, mortgages,
pledges, obligations, etc., imposed by Seller,
except for the Condemnation Proceeding, by
Grant, Bargain, and Sale Deed in substantially
the form of Exhibit "B" hereto; (ii) Seller
shall take such actions, and execute and
deliver such documents, as may reasonably be
required to transfer Seller's rights in the
Condemnation Proceeding to Purchaser; and
(iii) Seller's representations and warranties
contained in Sections 5.2-5.6 herein shall be
true and correct as if originally and
additionally made with reference to the
Condemned Parcel. In the event the
Condemnation Proceeding is abandoned after
Purchaser's exercise of the Second Option,
Purchaser shall be obligated to refund to
Xxxxx County the sums previously paid to
Seller in the Condemnation Proceeding, not to
exceed the amount of Two Million Four Hundred
Three Thousand Five Hundred Dollars
($2,403,500) plus interest thereon, if any, is
required to be paid.
2.3.3 Memorandum of Options. At Closing, the parties
shall record a Memorandum of Options to provide
public notice that Purchaser has obtained
options to acquire the Condemned Parcel from
Seller subject to the Condemnation Proceeding.
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2.3.4 Purchaser's Effort. Purchaser agrees to use
reasonable good faith efforts to cause the
County of Xxxxx to pursue the Condemnation
Proceeding to completion. If the Second Option
is exercised, Purchaser shall have no further
obligation under the preceding sentence.
3. TITLE MATTERS.
3.1 Title Company. Nevada Title Company shall provide the
Title Policy, unless both parties agree that another
title company shall provide the Title Policy (the "Title
Company"), however, such selection of a substitute title
company shall not delay the Closing.
3.2 Survey. Purchaser shall cause the firm of Xxxxxxxx &
Xxxxxx, Civil Engineers, or such other firm as Purchaser
shall select, to promptly commence preparation of an
ALTA-ACSM survey of the Property to be delivered to
Purchaser (the "Survey"). The Survey shall comply with
all requirements of the Title Company for issuance of the
Title Policy, shall show that no private property, other
than the Condemned Parcel, exists between Xxxxxx and the
Property, and shall be generally and otherwise acceptable
to Purchaser.
3.3 Permitted Exceptions. Purchaser has obtained a
preliminary report with respect to title to the Real
Property ("Preliminary Title Report") from the Title
Company dated as of August 3, 1998, No. 98-03-1300 DTL,
2nd Amendment. Purchaser acknowledges and agrees that
Purchaser has reviewed the Preliminary Title Report
and all exceptions to title of the Real Property dis-
closed therein and Purchaser agrees to accept conveyance
of and take title to the Property at Closing, upon the
Title Company's delivery at Closing of the Title Policy
and the endorsements to that Title Policy described in
this Agreement, and Seller agrees to convey to Purchaser
title to the Property at Closing, subject only to the
exceptions set forth on Exhibit "D" hereto (the
"Permitted Exceptions"), and the Leases.
3.4 Title Policy. The Closing is subject to the Title
Company delivering to Purchaser an ALTA Extended Coverage
Owners Policy of Title Insurance ("Title Policy") issued
by the Title Company, dated on the date of the Closing,
in the amount of the Purchase Price, insuring Purchaser
as owner of fee title to the Property subject only to the
Permitted Exceptions and the Leases. The cost of the
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Title Policy shall be apportioned between the parties in
such a manner that Seller shall only be obligated to pay
that amount which would have been charged for a CLTA
policy and Purchaser shall pay the difference between the
cost of CLTA policy and the ALTA policy and shall pay for
any special endorsements to the Title Policy as Purchaser
requires.
3.5 Liens, Encumbrances Etc. Except for the Permitted
Exceptions and the Leases, Seller will transfer and
convey good and marketable title to the Property to
Purchaser at Closing, free and clear of any liens,
encumbrances or security interests of any nature whatso-
ever, and Purchaser shall not succeed to or be
responsible for any liens, claims, charges, encumbrances,
mortgages, pledges, obligations or liabilities of any
kind whatsoever, whether known or unknown, fixed or
contingent, contractual or statutory, of Seller
including, without limitation:
3.5.1 Any liabilities or obligations relating to the
operation of the businesses conducted on the
Property by Seller or its tenants or sub-
tenants, or their predecessors, accruing or
arising prior to the date of Closing;
3.5.2 Any of Seller's liabilities or obligations for
federal, state, local or foreign taxes,
assessments, impositions, deficiencies,
penalties or interest, whether or not imposed
on or measured by income, except for real
estate taxes and assessments due following the
Closing;
3.5.3 (i) Any liabilities or obligations with respect
to any claims, actions, suits or demands, or
any legal, administrative, arbitration or other
proceedings or judgments, with respect to
causes or actions accruing, or arising out of
events occurring, on or prior to the date of
Closing or based on any state of facts existing
on or prior to the date of Closing, or (ii) any
claims for personal injury or property damage
accruing, or arising out of events occurring on
or before the date of Closing;
3.5.4 Any contract obligations with third parties of
any nature whatsoever, except as specifically
assumed by Purchaser in writing, and in
Purchaser's sole and unlimited discretion and
except for the Leases; or
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3.5.5 Any claims for wages or benefits of any of the
Seller's employees.
4. DUE DILIGENCE.
4.1 Environmental Study. Purchaser shall cause the firm of
Kleinfelder or such other firm as Purchaser shall select,
to promptly commence preparation of a Phase I
Environmental Study of the Property to be delivered to
Purchaser and to be relied upon in connection with the
acquisition of the Property (the "Environmental Study").
4.2 Access to Property. Purchaser and its authorized
representatives and agents shall have reasonable access
to the Property to conduct such surveys and studies as it
deems necessary and proper. Purchaser shall indemnify,
defend and hold Seller harmless from any and all claims,
demands, damages, judgments, liabilities, costs and
expenses (including without limitation attorneys' fees)
resulting from or arising out of the inspection and study
referred to herein, including, without limitation, the
Environmental Study, but excluding (i) liabilities
resulting from the Environmental Study discovering
conditions requiring remediation, and (ii) damages or
injuries caused by Seller's or its agents' negligent acts
or omissions.
4.3 Due Diligence Period. During the Due Diligence Period,
Purchaser may review the Survey and the Environmental
Study. Purchaser may also inspect the Property, as
permitted by Subsection 4.2. Any time prior to the
expiration of the Due Diligence Period, in Purchaser's
sole and unlimited discretion, for any reason, Purchaser
may terminate this Agreement and shall be entitled to the
return of the Deposit.
5. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller hereby
represents and warrants, which representations and warranties
shall be true and correct as of the date of Closing (unless
otherwise specified below):
5.1 That Seller is the owner of the Property and is able to
convey good, marketable title thereto, subject to the
matters disclosed in the Preliminary Title Report and the
Leases.
5.2 That Seller is duly organized and validly existing as a
corporation in its state of incorporation, in good
standing and qualified to conduct its business, to own
real property and to consummate the transactions
8
contemplated herein under the laws of the State of
Nevada.
5.3 That all necessary corporate action has been taken to
authorize all transactions herein contemplated.
5.4 That the execution, delivery and performance of this
Agreement by Seller will not, with or without the giving
of notice and/or the passage of time, violate or
constitute a default under any provision of law, any
administrative regulation or any judicial, administrative
or arbitration order, award, judgment or decree
applicable to Seller or the Property or conflict with,
violate, result in a breach or termination of or cause a
default under Seller's articles of incorporation or
bylaws, or any other agreement or obligation by which
Seller or the Property are bound.
5.5 That no consent or approval of this Agreement is required
by any third party.
5.6 That there are no actions or claims pending or to
Seller's knowledge threatened before any court, govern-
mental agency, arbitrator or other tribunal which would
prevent Seller from completing the transactions provided
herein in accordance with the terms of this Agreement.
5.7 That it has not received any notice of zoning changes or
any actions threatening condemnation of any part of the
Property through exercise of eminent domain by any
governmental authority.
5.8 That it has no actual knowledge of any violations of law,
municipal or county ordinances or other legal require-
ments affecting the Property, or with respect to the use
of occupancy thereof.
5.9 That to the best of Seller's knowledge, all documents
that will affect title to the Property at Closing have
been provided to Purchaser.
5.10 That there are no mechanic's liens recorded against the
Property and none threatened to Seller's knowledge; and
all contractors, subcontractors, workmen, materialmen and
employees engaged by Seller have been paid in full for
any labor, services or materials supplied or delivered to
the Property.
5.11 That Seller has not caused and shall not cause to be
created any encumbrances on the Property in favor of any
9
person other than Purchaser, other than the existing
Leases as disclosed in the Preliminary Title Report or
liens that have been previously released.
5.12 That all taxes, governmental assessments and utility
charges to the Property billed to Seller are current and
not delinquent.
5.13 That all representations and warranties made by Seller
and all information contained in any of the documents
furnished or to be furnished to Purchaser pursuant to
this Agreement, do not and shall not contain any untrue
statement of a material fact or omit to state any fact
necessary in order to make the statements contained here-
in or therein not misleading.
5.14 That Seller has not received nor is Seller aware of any
notification, demand or request (or any pending or
threatened action or litigation) from governmental or
quasi-governmental authority having jurisdiction,
requiring any work or construction to be done on or
affecting the Property or indicating an intent to condemn
the Property or any portion thereof.
5.15 Except as disclosed in the Environmental Study or as
disclosed below in this Section 5.15, that to the best of
its knowledge: (i) Seller is not in violation of any
applicable environmental, health and safety laws,
ordinances or regulations including those relating to air
and water pollution and Hazardous Substances (as defined
below) ("Environmental Laws"), in connection with its
ownership of the Property or conduct of its activities
thereon; (ii) except as noted in Section 6.4, Hazardous
Substances are not currently present on the Property and
have not been generated, used, treated, stored, trans-
ported to or from, or released or disposed of on the
Property; (iii) that without limiting the generality of
the foregoing, there are not now and have not been any
underground storage tanks, asbestos or any transformers
or other electrical devices containing polychlorinated
biphenyls on the Property; and (iv) that the Property has
never been used as a dump or landfill. The Property was
used as a staging area by Xxxxxxx Xxxxxx Construction in
connection with the New York, New York Hotel & Casino and
was also used as a staging area for the Strip Beautifi-
cation Project. The term "Hazardous Substances" for
purposes of this Agreement means (i) petroleum or
petroleum products, (ii) radioactive materials, (iii)
asbestos in any form, (iv) any items that contains or has
contained polychlorinated biphenyls, (v) any other
chemicals, materials or substances defined as or included
10
in the definition of "Hazardous Substances," "Hazardous
Waste," "Hazardous Materials," "Hazardous Air
Pollutants," "Extremely Hazardous Substances,"
"Restricted Hazardous Waste," "Toxic Substances,"
"Pollutants," "Contaminants," or words of any similar
import under any applicable Environmental Law, and/or any
other chemical or substance, exposure to which is pro-
hibited, limited or regulated by any governmental
authority as harmful under applicable Environmental Laws.
Seller has not received any notice from any governmental
authority, and has no knowledge of any governmental
inquiry, with respect to any actual or alleged violation
of any Environmental Laws in connection with the owner-
ship of the Property or Seller's activities thereon.
5.16 As of Closing, the Property shall not have generated
total revenues in excess of three million dollars
$3,000,000.00) during the preceding thirty-six (36)
months prior to the Closing.
5.17 That Seller has attached hereto as Exhibit "E" true and
correct copies of the Leases and all amendments and
modifications thereto; that there are no leases affecting
the Property currently in effect not contained in Exhibit
"E,"; that the Leases are in full force and effect and
that no party thereto is in default; and that the Leases
contain no options to purchase any part of the Property.
5.18 That the amount paid to Seller by the County in the
Condemnation Proceeding to date is Two Million Four
Hundred Three Thousand Five Hundred Dollars ($2,403,500).
6. PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser hereby
represents and warrants, which representations and warranties
shall be true and correct as of the date of Closing (unless
otherwise specified below):
6.1 That the execution, delivery and performance of this
Agreement by Purchaser will not, with or without the
giving of notice and/or the passage of time, violate or
constitute a default under any provision of law, any
administrative regulation or any judicial, administrative
or arbitration order, award, judgment or decree
applicable to Purchaser or conflict with, violate, result
in a breach or termination of or cause a default under
Purchaser's articles of incorporation or bylaws, or any
other agreement or obligation by which Purchaser is
bound.
6.2 That no consent or approval of this Agreement is required
by any third party.
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6.3 That there are no actions or claims pending or to
Purchaser's knowledge threatened before any court,
governmental agency, arbitrator or other tribunal which
would prevent Purchaser from completing the transactions
provided herein in accordance with the terms of this
Agreement.
6.4 That Purchaser has actual knowledge that helicopters are
operated on the Property and fuel trucks have serviced
and come upon the Property on a daily basis for some
period of time to fuel the helicopters, which is a sub-
ject of one or more of the Leases. Neither party has any
knowledge that any spills have occurred on the Property
that require remedial action.
6.5 That Purchaser is duly organized and validly existing as
a corporation in its state of incorporation, in good
standing and qualified to conduct its business, to own
real property and to consummate the transactions contem-
plated herein under the laws of the State of Nevada.
6.6 That all necessary corporate action has been taken to
authorize all transactions herein contemplated.
6.7 That the execution, delivery and performance of this
Agreement by Purchaser will not, with or without the
giving of notice and/or the passage of time, violate or
constitute a default under any provision of law, any
administrative regulation or any judicial, administrative
or arbitration order, award, judgment or decree
applicable to Purchaser or conflict with, violate, result
in a breach or termination of or cause a default under
Purchaser's articles of incorporation or bylaws, or any
other agreement or obligation by which Purchaser is
bound.
6.8 That all representations and warranties made by Purchaser
and all information contained in any of the documents
furnished or to be furnished to Seller pursuant to this
Agreement, do not and shall not contain any untrue
statement of a material fact or omit to state any fact
necessary in order to make the statements contained here-
in or therein not misleading.
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7. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of Seller's
and Purchaser's Representations and Warranties set forth in
Sections 5 and 6 shall survive for a period of thirty (30)
months.
8. COVENANTS PENDING CLOSING
8.1 Pending and prior to the Closing, Seller covenants and
agrees as follows, subject to the provisions of the
Leases:
8.1.1 That Seller shall not cause or allow any waste
to occur on the Property.
8.1.2 That Seller shall not place or store any
Hazardous Substances on or under the Property.
8.1.3 That Seller, without prior written consent of
Purchaser, shall not cause any liens or encum-
brances to be filed or recorded against the
Property and shall not assign, transfer,
encumber, hypothecate or convey any or all of
Seller's interest in the Property to any third
party or parties.
8.1.4 That Seller shall pay or cause to be paid
current to Closing, all taxes and expenses
related to the Property.
8.1.5 That Seller shall give Purchaser written notice
of any casualty occurring on the Property or of
any condemnation or proposed condemnation of
all or any part of the Property of which Seller
has or obtains actual knowledge.
9. EXPRESS CONDITIONS TO CLOSING
9.1 Purchaser's obligation to proceed to Closing shall be
subject to satisfaction of the following:
9.1.1 Seller shall not be in material default of any
of its covenants set forth herein.
9.1.2 Seller's representations and warranties as set
forth herein shall be true and correct as of
the date of Closing.
9.1.3 The Title Company shall be irrevocably com-
mitted to issue the Title Policy.
9.1.4 Seller shall have executed and delivered into
Escrow an Estoppel Certificate from each of the
two (2) tenants under the Leases, in
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substantially the form attached hereto as
Exhibit "C," stating that each of said Leases
is in full force and effect, there are no
breaches or events of default, and that each of
said Leases are terminable upon ninety (90)
days notice.
9.1.5 Seller shall have executed and delivered the
Assignment into Escrow.
9.1.6 Seller shall have executed and delivered into
Escrow all other documents and instruments and
shall have taken all actions necessary to
consummate the transactions contemplated hereby
in accordance with the terms of this Agreement.
9.2 Seller's obligation to proceed to Closing shall be sub-
ject to satisfaction of the following:
9.2.1 Purchaser shall not be in material default of
any of its covenants set forth herein.
9.2.2 Purchaser's representations and warranties as
set forth herein shall be true and correct as
of the date of Closing.
9.2.3 Purchaser shall have deposited the Closing Pay-
ment into Escrow.
9.2.4 Purchaser shall have executed and delivered the
Assignment into Escrow.
9.2.5 Purchaser shall have executed and delivered
into Escrow all other documents and instruments
and shall have taken all actions necessary to
consummate the transactions contemplated hereby
in accordance with the terms of this Agreement.
10. THE CLOSING
10.1 Subject to satisfaction of the conditions set forth in
Article 9, closing of the purchase of the Property (the
"Closing") shall occur on August 25, 1998.
10.2 At the Closing, Seller shall deliver or cause to be
delivered to Purchaser the following:
10.2.1 The Deed to Escrow for recordation in the
property records of Xxxxx County, with subse-
quent delivery to Purchaser;
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10.2.2 A FIRPTA affidavit;
10.2.3 To Purchaser, Escrow Agent or Title Company, as
applicable, any other documents, fully
executed, as are customarily executed in the
State of Nevada in connection with the convey-
ance of real property, including all required
closing statements, releases, affidavits and
any other instrument that the parties may agree
to in good faith;
10.2.4 Possession of the Property, subject to the
Leases, and the Permitted Exceptions; and
10.2.5 the Assignment.
10.3 At the Closing, Purchaser shall deliver or cause to be
delivered the following:
10.3.1 The Purchase Price, subject to the Prorations,
in immediately available U.S. funds, to Escrow
Agent, for disbursement together with the
Deposit pursuant to Seller's instructions;
10.3.2 To Seller, Escrow Agent or Title Company, as
applicable, any other documents, fully
executed, as are customarily executed in the
State of Nevada in connection with the convey-
ance of real property, including all required
closing statements, releases, affidavits and
any other instrument that the parties may agree
to in good faith; and
10.3.3 The Assignment.
11. CLOSING COSTS, EXPENSES AND PRORATIONS. All of the
following closing costs, expenses and prorations shall be
collectively defined as the "Prorations."
11.1 Seller hereby agrees to pay for the following costs and
expenses associated with the consummation of this Agree-
ment and the Closing:
11.1.1 The premium for the CLTA portion of the Title
Policy;
11.1.2 All real property transfer taxes and documenta-
tion taxes;
11.1.3 One-half (1/2) of any escrow or closing fees
charged by the Escrow Agent; and
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11.1.4 Any other closing costs customarily paid by a
seller of real property in the State of Nevada.
11.2 Purchaser hereby agrees to pay for the following costs
and expenses associated with the consummation of this
Agreement and the Closing:
11.2.1 Recording fees for the Deed;
11.2.2 One-half (1/2) of any escrow or closing fees
charged by the Escrow Agent;
11.2.3 The difference in cost between the CLTA portion
of the Title Policy and the ALTA portion of the
title Policy and any special endorsements
required by Purchaser;
11.2.4 The cost of the Survey;
11.2.5 The cost of the Environmental Study;
11.2.6 Any other closing costs customarily paid by a
purchaser of real property in the State of
Nevada.
11.3 All real estate taxes, assessments and utilities
relating to the Property and not paid by a tenant under
the Leases shall be prorated as of the Closing between
Seller and Purchaser. Nothing herein shall limit the
parties' respective obligations under Section 12.
12. INDEMNITIES
12.1 From and after the Closing, Seller shall indemnify,
defend and hold Purchaser harmless from any and all
claims, demands, liabilities, judgments or expenses
(including without limitation attorney's fees) arising
out of or resulting from (i) Seller's breach of any of
its representations, warranties or covenants set forth
herein, or (ii) events occurring on or with respect to
the Property accruing prior to the Closing, except for
claims or damages with respect to Hazardous Substances or
Environmental Laws unless such claims or damages result
from a condition or occurrence not disclosed to Purchaser
in breach of Section 5.15, above.
12.2 From and after the Closing, Purchaser shall indemnify,
defend and hold Seller harmless from any and all claims,
demands, liabilities, judgments or expenses (including
without limitation attorney's fees) arising out of or
resulting from (i) Purchaser's breach of any of its
representations, warranties or covenants set forth here-
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in, or (ii) events occurring on or with respect to the
Property accruing after Closing.
12.3 If either party receives notice of any matter which
would give rise to a claim for indemnity under Sections
12.1 and 12.2, that party shall promptly notify the other
party, and such other party shall be entitled to defend
the claim at its own expense with counsel of its own
choosing, subject to the approval of such counsel by the
indemnified party, which approval shall not unreasonably
be withheld or delayed.
13. REMEDIES UPON DEFAULT
13.1 If Closing fails to occur solely as a result of Seller's
default, Purchaser shall be entitled as its only remedies
either (i) to a return of the Deposit, reasonable costs
spent for Due Diligence, and to terminate the Escrow; or
(ii) to obtain a decree of specific performance.
13.2 If Purchaser defaults under this Agreement, Seller, as
Seller's sole and exclusive remedy for such default,
shall be entitled to the Deposit. It is agreed between
Purchaser and Seller that Seller will suffer substantial
damages in the event of such default and the Deposit
shall be liquidated damages for a default of Purchaser
under this Agreement because of the difficulty, incon-
venience and uncertainty of ascertaining actual damages
for such default. It is further agreed between Purchaser
and Seller that such amount of liquidated damages
constitute a reasonable estimate of actual damages
that would be incurred by Seller as a result of a default
by Purchaser.
14. [INTENTIONALLY DELETED]
15. MISCELLANEOUS
15.1 Attorney's Fees. Each party shall pay all attorneys' fees
incurred by that party in the negotiation and delivery of
this Agreement. However, in the event that any action or
proceeding is instituted to interpret or enforce the
terms and provisions of this Agreement, the prevailing
party shall be entitled to its costs and attorneys' fees,
in addition to any other remedies it may obtain or
be entitled to.
15.2 Brokers' Commissions. The parties each represent one to
the other that no broker, finder or other financial
consultant has acted on their behalf in connection with
this agreement or the transactions contemplated hereby.
The parties each agree to indemnify and hold the other
harmless from any claim, settlement, cost or demand for
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commission or other compensation by any broker, finder,
financial consultant or similar agent claiming to have
been employed by or on behalf of the indemnifying party,
and to bear the cost of legal expenses incurred in
defending against such claims.
15.3 Notices. Any notices desired or required to be given
hereunder shall be faxed, with the original deposited in
the U.S. Mail, postage prepaid, or sent by overnight
courier service, and shall be deemed received upon the
earlier of attempted delivery or receipt. Either party
hereto may change its address hereunder by providing the
other party with notice of such changed address.
If to Seller, addressed to:
A. Xxxxxx Xxxx, Esq.
RZ Corporation
000 Xxxxxx Xxxxxx, #000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
With a copy to:
Xxxx Xxxxxx, Esq.
Xxxxxx Xxxxxx & Xxxxxxx
000 X. 0xx Xx., 00xx Xxxxx
Xxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
If to Purchaser, addressed to:
Xxxxx X. Xxxxxxxx
The Xxxxx Xxxx Companies
c/o Bernhard & Xxxxxx
0000 Xxxxxx Xxxxxx Xxxxxxx, #000
Xxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
With a copy to:
Xxxxx Xxxxx, Esq.
Xxxxxxx Xxxxxx
000 X. 0xx Xx., 00xx Xxxxx
Xxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
15.4 Counterparts. This agreement may be executed in
multiple counterparts, which together shall constitute
one and the same document.
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15.5 Entire Agreement. This Agreement constitutes the entire
agreement between Purchaser and Seller regarding the
Property, and supersedes all prior discussions,
negotiations and agreements between them, whether oral or
written. This Agreement may not be amended or modified
except in writing signed by both parties hereto.
15.6 Governing Law. This Agreement shall be governed by the
laws of the State of Nevada applicable to contracts made
in that state.
15.7 Forum. The parties agree that the proper forum and venue
for any dispute involving this Agreement or the trans-
action contemplated thereby shall be the state and
federal courts of Xxxxx County, Nevada.
15.8 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the successors, assigns,
nominees, designees and affiliates of the parties hereto.
15.9 Waiver. No waiver of any provisions of this Agreement
shall be deemed or shall constitute a waiver of any other
provision, whether or not similar, nor shall any waiver
constitute a continuing waiver, and no waiver shall be
binding unless evidenced by an instrument in writing and
executed by the party making the waiver. If any pro-
vision, covenant or condition of this Agreement should be
held or found to be invalid, void or unenforceable, that
provision shall be deemed severable and all provisions,
covenants and conditions not held invalid, void or
unenforceable shall continue in full force and effect
and shall in no way be affected, impaired or invalidated
thereby.
15.10Further Assurances. The parties agree to negotiate
diligently and in good faith at all times, to execute and
deliver such other and further documents and instruments
as may be necessary to fully effectuate the transactions
contemplated hereby. The parties further agree to execute
and deliver to the Escrow Agent and Title Company such
other and further escrow instructions, documents and
instruments as may be reasonably necessary to effectuate
this transaction in accordance with its terms.
16. 1031 EXCHANGE. Seller agrees to cooperate with Purchaser in
qualifying this transaction as a tax-free exchange under
Section 1031 of the Internal Revenue Code as long as such
cooperation does not result in any additional expense,
liability, or obligation on the part of Seller or in the
delay of the Closing. Failure to qualify this transaction as
a tax-free exchange will not release Purchaser from its
obligations hereunder.
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year shown opposite
their respective signatures below.
SELLER:
RZ Corporation, a Nevada corporation
By: A. XXXXXX XXXX
-------------------------------------
Xxxxxx Xxxx, President
Dated: August 12, 1998
PURCHASER:
The Xxxxx Xxxx Companies, a
Nevada corporation
By: XXXXX X. XXXXXXXX
-------------------------------------
Xxxxx X. Xxxxxxxx, President
Dated: August 12, 1998
TITLE COMPANY
RECEIPT AND CONSENT
The Title Company acknowledges receipt of an executed copy of
the Agreement and agrees to perform as Escrow Agent thereunder.
Nevada Title Company, a Nevada corporation
By: XXXX XXXXXXXX
-------------------------------------
Xxxx Xxxxxxxx, Title Officer
Dated: August 13, 1998
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