EXHIBIT 10.25
AGREEMENT FOR PURCHASE AND SALE
-------------------------------
This Agreement is made and entered into this 13th day of May 1998, by and
between IMAGE ENTERTAINMENT, INC., a California corporation, whose address is
0000 Xxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxx 00000 ("Seller") and XXXXXXX-XXXX
COMPANY, a Texas corporation, whose, address is 0000 Xxxxxx Xxxxxx Xxxxxxx,
Xxxxx 000, Xxx Xxxxx, Xxxxxx 00000 ("Buyer").
1. Recitals. Seller is the owner of that certain unimproved real property
--------
located in the vicinity of Sunset Road and Xxxxxxx Street in Xxxxx County,
Nevada, comprising approximately 8.8 acres, and more particularly described in
Exhibit "1" hereto (the "Property").
2. Purchase and Sale. Through escrow and at closing as hereinafter
-----------------
provided, and conditioned upon full performance by Buyer and Seller of their
obligations under this Agreement, Seller agrees to sell and Buyer agrees to buy
the Property.
3. Purchase Price. The purchase price for the property is Three Million
--------------
One Hundred Thousand Dollars ($3,100,000.00). One Million Five Hundred Fifty
Thousand Dollars ($1,550,000.00) shall be allocated to Parcel A as described on
Exhibit "1" and One Million Five Hundred Fifty Thousand Dollars ($1,550,000.00)
be allocated to Parcel B as described on Exhibit "1", payable as follows:
A. Parcel A.
--------
(1) Upon execution of this Agreement, Buyer shall deposit
Twenty-five Thousand Dollars ($25,000.00) ("Xxxxxxx Money Deposit") with United
Title Company, escrow holder, as and for xxxxxxx money, which, together with any
interest accrued thereon, shall be released to Seller at Close of Escrow (as
hereinafter defined). The Opening of Escrow shall occur upon execution of this
Agreement, simultaneously with the delivery of the Xxxxxxx Money Deposit of
Twenty-five Thousand Dollars ($25,000.00) with Xxxxxx Xxxxxx at United Title
Company, 0000 Xxxxxx Xxxxxx Xxxxxxx, Xxxxx #000, Xxx Xxxxx, Xxxxxx 00000, and
the delivery to Seller the Preliminary Title Report referred to in Paragraph
5(B) and the survey ("Opening of Escrow"). The escrow relating to Parcel A shall
close on or before one hundred and five (105) days after the Opening of Escrow.
(2) The balance of the purchase price for Parcel A shall be
deposited in escrow with United Title Company, by cash or cashier's check, at or
before the Close of Escrow, and released to Seller at closing. At the end of the
Feasibility Period as defined herein, the Xxxxxxx Money Deposit shall be non-
refundable except in the event of Seller's default. The parties agree that if
Buyer fails to perform its obligations under this Agreement, Seller will be
entitled to compensation for the detriment so caused but that it is extremely
difficult and impractical to ascertain the extent of the detriment, therefore,
if Buyer breaches this Agreement, Seller, as its sole remedy shall be entitled
to retain the Xxxxxxx Money as liquidated damages.
B. Parcel B.
--------
(1) At the Close of Escrow of Parcel A, Buyer shall deliver
Fifty Thousand Dollars ($50,000.00) directly to Seller ("Option Payment")
outside of Escrow for an option to purchase Parcel B for One Million Five
Hundred Fifty Thousand Dollars ($1,550,000.00). Said payment becomes the
immediate property of Seller whether or not Buyer exercises the option. Buyer
shall have up to and including December 31, 1998, to notify Seller in writing of
Buyer's intent to exercise the option ("Notice to Exercise Option"). The Close
of Escrow on Parcel B, by and through a separate escrow from Parcel A, shall
occur within sixty (60) days after the date of the Notice to Exercise Option,
however, said closing cannot occur later than March 1, 1999. At the Close of
Escrow the remainder of the purchase price of One Million Five Hundred Thousand
Dollars ($1,500,000.00) shall be deposited in escrow with Buyer having been
given credit for the Fifty Thousand Dollar ($50,000.00) Option Payment.
(2) Buyer may extend the period in which to exercise its option
until June 30, 1999 by paying an additional Seventy-five Thousand Dollars
($75,000.00) directly to Seller outside of escrow prior to December 31, 1998.
Said payment shall become the immediate property of Seller whether or not the
Buyer exercises the option. If Buyer extends the option period, Buyer shall have
until June 30, 1999 to close the escrow with Buyer. Buyer shall deposit the
remaining balance due and owing on the purchase price with credit given to Buyer
for any option payments previously made on Parcel B, however, if the Close of
Escrow does not occur on or before June 30, 1999, this Agreement shall terminate
as to Parcel B and Seller may retain all Option Payments in its possession.
4. Escrow and Escrow Instructions. After the Opening of Escrow the
------------------------------
parties shall promptly execute and deliver such escrow instructions, and
additional documents as may be required to consummate this Agreement, directed
to United Title Company, attn: Xxxxxx Xxxxxx (the "Escrow"), to consummate the
purchase and sale of the Property in accordance with the terms and provisions of
this Agreement. In the event of any conflict between the escrow instructions
and this Agreement, this Agreement will prevail.
5. Conditions. This Agreement is subject to the following conditions:
----------
A. Feasibility Period. Buyer shall have seventy-five (75) days from
------------------
the date of the Opening of Escrow ("Feasibility Period") within which to conduct
studies of the Property, including, but not limited to: soils testing,
environmental study, biological study (including but not limited to tortoise
study), hydrology tests, design criteria and feasibility. Said studies and tests
shall be at no cost or detriment to Seller and Buyer shall deliver to Seller
copies of all reports as they are completed. Such tests and studies shall
hereinafter be collectively referred to as the "Studies". Buyer shall be
entitled to enter the Property to conduct its Studies as provided for under
Section 7 of this Agreement. Furthermore, Seller agrees to cooperate with Buyer
and Buyer's agents in conducting said Studies and, if required, by signing any
documents needed by Buyer to conduct those Studies. Seller will provide Buyer
any documents in its possession or control which pertain to the Property. Buyer
has the obligation to notify Seller of any problems
that result from these Studies. If Buyer does not provide Seller with written
notification of its approval during the 75-day period, this Agreement shall
terminate and the Xxxxxxx Money Deposit shall be returned to Buyer with no
further duties on the part of Buyer or Seller, save and except Buyer shall pay
any title and escrow costs that may have accrued to that date.
B. Preliminary Title Report. Seller shall furnish Buyer, at Seller's
------------------------
expense, a Preliminary Title Report on the Property and by execution of this
Agreement, Buyer acknowledges receipt of said report. Buyer shall have fifteen
(15) days after receipt of the Preliminary Title Report and ALTA Survey to
disapprove in writing any exceptions to title. In the event of such disapproval,
Seller, at its election, may cancel Escrow and cause return to Buyer of the
Xxxxxxx Money Deposit or may have until the date of Close of Escrow within which
to attempt to eliminate any disapproved exceptions from the policy of title
insurance to be issued in favor of Buyer at Close of Escrow, and if not
eliminated, Escrow shall be canceled and the Xxxxxxx Money Deposit shall be
returned to Buyer, unless Buyer then elects to waive its prior disapproval.
Failure of Buyer to disapprove any exceptions within the above mentioned time
limit shall be deemed approval of the Preliminary Title Report. Any exceptions
to which no disapproval is made shall be deemed Permitted Exceptions.
C. Condition of Property. Except as provided in Section 7, Buyer
---------------------
acknowledges that Seller has not made, and will not make, any representation or
warranty respecting the Property, its condition, its suitability for any
purpose, the availability of utilities or any other matter or thing respecting
the Property. The Property is being sold "AS-IS", and the determination of its
actual size, condition, or viability of Buyer's intended use through Studies
and/or other analysis shall be based on Buyer's own independent investigation
and be the sole responsibility of Buyer.
D. Assignment. Buyer may assign this Agreement to an entity in which
----------
Buyer shall have an ownership interest or a right of management.
6. Right of Entry and Inspection. Buyer shall have the right to enter
-----------------------------
upon the Property at any reasonable time prior to Close of Escrow to make such
inspections, environmental audits, tests, surveys and investigations as Buyer
may deem appropriate. All entry and activities by Buyer upon the Property shall
be at Buyer's sole cost, risk and expense. Buyer agrees to restore and repair
any damages to the Property during the performance of its Studies. Buyer
covenants and agrees to hold Seller harmless from all claims arising from or
connected to the Studies conducted on the Property and to provide adequate
insurance during the performance of the Studies.
7. Warranties of Seller. Seller hereby warrants that, to the best of
--------------------
Seller's knowledge, each of the following statements is true:
A. Actions, Suits or Proceedinqs. There are no actions, suits or
-----------------------------
proceedings which are pending or threatened before any governmental department,
commission, board,
bureau, agency or instrumentality that would materially and adversely affect the
Property or the right to occupy or utilize it.
B. No Notice of Pending Condemnation. There are no pending or
---------------------------------
threatened condemnation or eminent domain proceedings affecting the Property, or
any part thereof.
C. Consent. No consent or approval of this Agreement is required to
-------
be obtained by Seller from any third party in order for Seller to consummate
this Agreement.
D. Possessory Rights. No person, except as disclosed by this
-----------------
Agreement or otherwise in writing to Buyer, has any right to possession of the
Property.
E. Mechanics' Liens. There are no unsatisfied mechanics' or
----------------
materialman's lien rights concerning the Property.
F. Bankruptcy Proceedings. Neither Seller nor any part of the
----------------------
Property is the subject of any bankruptcy proceedings.
G. Hazardous Materials. Seller has not received any written notice,
-------------------
nor to the best of Seller's actual knowledge, any other information indicating
that the Property is in violation of any Environmental Law. As used herein,
"Environmental Law" shall mean any Federal, State or local law, ordinance or
regulation relating to flammable explosives, radioactive materials, hazardous
wastes, toxic substances, underground storage tanks or related materials,
including, but not limited to asbestos, petroleum or any petroleum by-products,
urea formaldehyde, foam insulation, polychlorinated biphenlys, and those
substances defined as "hazardous substances," "hazardous materials," or "toxic
substances" in the Comprehensive Environmental Response Compensation and
Liability Act ("CERCLA") as amended, 42 U.S.C. (S)(S)9601 et seg.; the Resource
-- ---
Conservation and Recovery Act ("RCRA"), 42 U.S.C. (S)(S)6901 et seg.; Nevada
-- ---
Revised Statutes Chapter 459 (Hazardous Materials); or in any regulations
adopted in publications promulgated pursuant to such laws and amendments
thereto.
H. Zoning. Seller, to the best of Seller's knowledge, represents and
------
warrants that the Property is zoned MD (Design Manufacturing) by Xxxxx County.
I. Documents Provided by Seller. All information furnished to Buyer
----------------------------
by or on behalf of Seller prior to the execution of this Agreement is to the
best of Seller's knowledge true and correct in all material respects and fairly
and accurately reflects the condition or statement of facts reported to be
represented.
J. Authority. Seller has the requisite corporate authority to
---------
execute this Agreement and consummate this transaction pursuant to the terms of
this Agreement. All persons executing this Agreement hereunder on behalf of
Seller are duly authorized to do so by the corporate action of the Seller.
8. Warranties of Buyer. In addition to other covenants, promises and
-------------------
warranties contained in the other parts of this Agreement, Buyer hereby
represents and warrants for the benefit and reliance of Seller:
A. That Buyer is a Texas corporation duly formed, validly existing,
and in good standing as of the date hereof, and is conducting business in Nevada
at 0000 Xxxxxx Xxxxxx Xxxxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxx 00000, Xxxxx County,
Nevada.
B. That all corporate consents and approvals necessary and proper to
empower Buyer to enter into this Agreement and have been duly and validly sought
and obtained; and that copies thereof shall be delivered to Seller at Seller's
request (but in no event later than Close of Escrow).
C. That the signatories executing this Agreement on behalf of Buyer,
are incumbent officers of Buyer and possessed with appropriate corporate
authority to enter into this Agreement on behalf of Buyer.
D. That Buyer and its officers have not concealed, or neglected or
failed to inform Seller of, any material facts or circumstances which would
adversely affect Buyer's ability to consummate or perform the transaction
contemplated hereby, or which would act to impair or negate any security
interest of Seller hereunder.
9. Close of Escrow.
---------------
A. The Close of Escrow on Parcel A shall occur no later than one
hundred five (105) days from the Opening of Escrow. The Close of Escrow on
Parcel B shall occur no later than sixty (60) days after the date of the Notice
to Exercise Option, subject to any extension contained in Section 3 of this
Agreement, but in no event may Close of Escrow occur after June 30, 1999.
B. As to each respective Parcel, Seller shall deliver to Buyer, at
Close of Escrow:
(1) a general grant, bargain, sale deed conveying good and
marketable title to Seller; and
(2) a standard CLTA Owner's Title Insurance Policy insuring
Buyer in the amount of the Purchase Price and showing the Property to be subject
to no exceptions other than the Permitted Exceptions and such other exceptions
as may be expressly approved by Buyer in writing. Buyer may elect to pay for
ALTA land survey and title policy, but shall be credited the costs of the CLTA
policy.
C. At Close of Escrow, each of the parties shall deliver, to the
escrow agent such sums, instruments and documents as are required by this
Agreement or are customary in
similar transactions in Xxxxx County, Nevada, and they shall do all of the
things reasonably necessary to close this transaction and carry out the purpose
and intent of this Agreement.
D. Taxes on a Parcel shall be prorated as of the date of Close of
Escrow. The recording fees for the deed, and any transfer taxes thereon shall be
paid by Seller. Fees of the escrow agent shall be paid one-half by Seller and
one-half by Buyer.
10. Notices. All notices, requests, demands and other communications
-------
under this Agreement shall be in writing and shall be deemed to have been fully
given on the date of service if served personally, certified mail, postage
prepaid, and return receipt requested, Federal Express (or other nationally
recognized overnight delivery service) or by facsimile transmission (followed by
a hard copy sent by certified mail or Federal Express) on a business day during
normal business hours on the party to whom notice is to be given, or on the
third day after mailing, if mailed to the party to whom notice is to be given,
postage prepaid and properly addressed to the parties as follows:
To: Image Entertainment, Inc.
0000 Xxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx Xxx, Esq.
Chief Administrative Officer and General Counsel
To: Xxxxxxx-Xxxx Company
Attn: Xxxx Xxxxxx
0000 Xxxxx Xx.
Xxxxxx, XX 00000
w/copy to: Xxxx XxXxx
0000 Xxxxxx Xxxxxx Xxxx.
Xxx Xxxxx, XX 00000
Any party may change its address for purposes of paragraph by giving the other
party written notice of the new address in the manner set forth above.
11. Entire Agreement. This Agreement constitutes the entire agreement
----------------
between the parties relating to the subject matter contained in it and
supersedes all prior or contemporaneous agreements, representations and
understanding of the parties. No waiver of any of the provisions of this
Agreement shall be deemed, nor shall constitute, a waiver of any other
provision, whether or not similar, nor shall any waiver constitute a continuing
wavier. No supplement, modification or amendment of this Agreement nor any
waiver of any provision shall be binding unless executed in writing by all the
parties.
12. Exhibits. The Exhibits to this Agreement form an integral part of
--------
this Agreement.
13. Force Majeure. In addition to the specific provisions of this
-------------
Agreement, performance by any party hereunder shall not be deemed to be in
default where delays or defaults are due to war, insurrection, strikes, lock-
outs, riots, floods, earthquakes, fires, casualties acts of God, acts of the
public enemy, epidemics, quarantine restrictions, freight embargoes, lack of
transportation, governmental restrictions or priority, litigation (including
delays beyond the reasonable control of the party) to include, but not be
limited to: unusually severe weather, inability to secure necessary labor,
materials or tools, delays of any contractor, subcontractor or supplier, acts of
another party, acts or the failure to act of any public or governmental agency
or entity, or any other causes beyond the control or without the fault of the
party claiming an extension of time to perform. An extension of time for any
such cause shall only be for the period of the enforced delay, which period
shall commence to run from the time of the commencement of the cause.
14. Attorney Fees. In the event any legal action or proceeding, including
-------------
an arbitration, is commenced to enforce this Agreement, the prevailing party
shall be entitled to recover its attorney's fees and costs.
15. Binding Agreement. This Agreement shall be binding upon and shall
-----------------
inure to the benefit of the parties and their respective heirs, legal
representatives, successors and assigns.
16. Applicable Law and Venue. The laws of the State of Nevada shall apply
------------------------
to the interpretation, construction and enforcement of this Agreement and the
exclusive venue for any litigation relating to this Agreement will be the state
or federal courts sitting in Xxxxx County, Nevada and the parties hereby consent
to such jurisdiction.
17. Time of The Essence. Time shall be of the essence of this Agreement.
-------------------
18. Counterparts. This Agreement may be executed in two or more
------------
counterparts. A set of counterparts containing the signatures of all parties
hereto shall have the same effect as a single Agreement containing the
signatures of all parties.
19. Joint Preparation. The provisions of this document have been
-----------------
negotiated by all parties hereto and should therefore not be interpreted or
construed in favor of or with prejudice against any particular party, but in
accordance with the general tenor of the language used.
20. Brokers. Seller and Buyer each represent and warrant to the other
-------
that they have not entered into any written agreement with any real estate
broker for the payment of real estate commissions in regards to the sale of the
Property under the terms of this Agreement nor have they, by written contract,
retained the services the services of any real estate broker regarding the sale
of the Property.
21. Additional Documents. Before, at and after the Close of Escrow, the
--------------------
parties hereby agree to execute, acknowledge and deliver such additional
documents and instruments as may be reasonably necessary to carry out the full
intent and purpose of this Agreement.
22. Memorandum of Option. The parties agree that Buyer shall have the
--------------------
right to record a memorandum of the option granted pursuant to Section 3(b) of
this Agreement and Seller hereby agrees to execute, in recordable form, a short
form memorandum of option agreement.
Dated as of the year and date above first written.
IMAGE ENTERTAINMENT, INC., XXXXXXX-XXXX COMPANY,
a California corporation, a Texas corporation,
By: /s/ XXXX X. XXXXXX By: /s/ J. XXXXXXX XXXX
------------------ -------------------
Its: CFO Its: Vice President
