EXHIBIT 2.2
PURCHASE AND SALE AGREEMENT
(WITH ESCROW INSTRUCTIONS)
THIS PURCHASE AND SALE AGREEMENT (WITH ESCROW INSTRUCTIONS) (this
"Agreement") is made as of the 20th of March, 2000, by and between C & C Capital
Investment, Inc., an Arizona corporation ("Seller"), and Xxxxxxxxxxxx.xxx
(Washington), Inc., a Washington corporation ("Buyer").
RECITALS
A. Seller is the owner of an auction-house commercial property located at
7303 East Xxxxx Drive, Scottsdale, Maricopa County, Arizona (the "Property," as
more specifically described below).
B. Buyer desires to purchase the Property from Seller, and Seller desires
to sell the Property to Buyer, through an escrow (the "Escrow") with Chicago
Title Insurance Company ("Escrow Agent" or "Title Company," as applicable), all
upon the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the obligations and undertakings
hereinafter set forth, and in consideration of the sums to be paid by Buyer, and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Seller and Buyer agree as follows:
ARTICLE I
PURCHASE AND SALE OF THE PROPERTY
Section 1.1. Purchase. For the consideration hereinafter set forth, but
subject to the terms, provisions, covenants and conditions contained herein,
Seller hereby agrees to sell and convey to Buyer, and Buyer agrees to purchase
from Seller, all of the following (collectively, the "Property"):
(a) the real property described on Exhibit A attached hereto and made
a part hereof by reference (the "Land");
(b) the existing buildings and other improvements, structures, parking
facilities and fixtures owned by Seller and constructed, installed or
located on the Land (collectively, the "Improvements"; the Land and the
Improvements are sometimes hereinafter collectively referred to as the
"Real Property");
(c) all equipment and other tangible personal property owned by Seller
(and not otherwise included in the sale of assets by Xxxxxx'x Auction House
of Scottsdale, L.L.C., an
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Arizona limited liability company ("Xxxxxx'x") to Buyer) and located,
placed or installed on or about the Real Property and used in the operation
thereof (the "Personal Property");
(d) all right, title and interest of Seller in and to all contracts
(not otherwise included in the sale of assets by Xxxxxx'x to Buyer),
including, without limitation, all contracts for repair or maintenance and
contracts for the provision of services (e.g., the maintenance of
landscaping or mechanical systems), relating to the operation of the Real
Property or the Personal Property, all of which existing as of the date
hereof are listed on Exhibit B attached hereto (the "Contracts"), to the
extent that they are assignable and provided they are accepted by Buyer,
will be transferred to and assumed by Buyer;
(e) all right, title and interest of Seller in and to all unexpired
third-party warranties, guaranties and bonds (not otherwise included in the
sale of assets by Xxxxxx'x to Buyer), including, without limitation,
contractors' and manufacturers' warranties or guaranties, relating to the
Real Property or the Personal Property, to the extent that they are
assignable (the "Warranties");
(f) all right, title and interest of Seller in and to all governmental
permits, licenses, certificates and authorizations (not otherwise included
in the sale of assets by Xxxxxx'x to Buyer), including, without limitation,
certificates of occupancy, relating to the construction, use or operation
of the Real Property or the Personal Property, to the extent that they are
assignable (the "Permits"); and
(g) any and all other easements, hereditaments and other rights
appurtenant to the Real Property.
Section 1.2. Purchase Price. The purchase price for the Property (the
"Purchase Price") shall be Three Million Five Hundred Dollars ($3,500,000.00),
to be paid as set forth below:
(a) Buyer shall deposit via wire transfer in Escrow upon Closing (as
hereinafter defined) One Million Two Hundred Thousand Dollars
($1,200,000.00) in immediately available funds, to be applied by Escrow
Agent as set forth herein;
(b) Assumption by Buyer of that certain Wrap-Around Promissory Note
(the "Wrap Note"), dated July 24, 1998, in the original principal sum of
One Million Sixty-Five Thousand Dollars ($1,065,000.00), wherein C&C
Capital Investments, Inc., an Arizona corporation, is the Maker, and Xxxxx
Xxxxxxxxx of Scottsdale, a California limited partnership, is the Payee,
with an approximate remaining unpaid principal balance as of the date
hereof of One Million Fifty Thousand Dollars ($1,050,000.00); and
(c) The balance of the Purchase Price, by Buyer causing the issuance
by Buyer's parent company, Xxxxxxxxxxxx.xxx, Inc., a Florida corporation
(the "Parent"), to Seller of a certificate for that number of shares of the
Parent's common stock which is determined by dividing (i) the balance of
the Purchase Price by (ii) eight (8).
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Section 1.3. Escrow Agent; Title Company; Escrow Provisions
(a) Seller and Buyer hereby appoint Chicago Title Insurance Company as
the Escrow Agent for the transaction contemplated by this Agreement, with
Escrow to be opened as of the date of signed acceptance by Escrow Agent of
a fully executed original of this Agreement (the "Opening of Escrow").
(b) Escrow Agent, acting in its capacity as a Title Insurance Company
("Title Company"), shall issue and underwrite the ALTA Owner's Extended
Coverage Title Insurance Policy in accordance with this Agreement.
(c) Escrow Agent, as the party designated as the person responsible
for closing the transaction contemplated hereby within the meaning of
Section 6045(a)(2)(A) of the Internal Revenue Code, shall file all
necessary information, reports, returns and statements regarding this
transaction as required by the Code, including, without limitation, any tax
reports required pursuant to Section 6045 of the Code.
(d) If Closing fails to occur because of Seller's default, Seller
shall be liable for any expenses, fees or cancellation charges of Escrow
Agent. If Closing fails to occur because of Buyer's default, Buyer shall be
liable for any expenses, fees or cancellation charges of Escrow Agent. If
Closing fails to occur for any other reason, including a termination by
Buyer as allowed hereunder, Seller and Buyer shall each be liable for
one-half of any reasonable and customary expenses, fees or cancellation
charges of Escrow Agent.
(e) The parties agree to the following general provisions regarding
Escrow Agent's duties hereunder, provided that nothing set forth below
shall in any way limit the Escrow Agent/Title Company's obligations
otherwise set forth in this Agreement and/or attached Escrow Instructions.
(i) For the purpose of closing adjustments and prorations (such
as are addressed in Section 4.5 hereof) as of "Closing" or the
"Closing Date," Escrow Agent shall consider that "Closing" and the
"Closing Date" occur on the date that the instrument transferring
title to the Real Property is delivered to Buyer and recorded.
(ii) Funds due Seller shall be disbursed by the Escrow Agent by
bank certified or cashier's check or by wire transfer pursuant to such
instructions as Seller or Seller's counsel may provide in writing to
Escrow Agent prior to or at Closing.
(iii) Any change of this Agreement shall be given in writing
signed by all parties hereto. In the event conflicting demands are
made or notices served upon Escrow Agent with respect to the Escrow in
a situation where this Agreement does not expressly grant one party or
the other the exclusive right to direct the Escrow Agent or does not
expressly specify the action to be taken by Escrow Agent, such that
Escrow Agent is reasonably unsure how it is obligated to proceed, the
parties hereto agree that Escrow Agent shall have the right at Escrow
Agent's election to do either
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or both of the following: (i) withhold and stop all further
proceedings in, and performance of, the Escrow; or (ii) file a suit in
interpleader in Maricopa County, Arizona and obtain an order from the
court requiring the parties to interplead and litigate in such court
their several claims and rights among themselves. In the event such
interpleader suit is brought, Escrow Agent shall thereupon be fully
released and discharged from all obligations to further perform any
and all duties or obligations imposed upon Escrow Agent in the Escrow,
and the parties jointly and severally agree to pay all reasonable
costs, expenses, and reasonable attorneys' fees expended or incurred
by Escrow Agent, the amount thereof to be fixed and a judgment
therefor entered by the court in such suit.
(iv) Except for Escrow Agent's breach of contract, negligence or
willful misconduct or as provided under applicable law, Escrow Agent
shall not be held liable for the identity, authority or rights of any
person executing any document deposited in the Escrow, or for Seller
or Buyer's failure to comply with any of the provisions of any
agreement, contract or other instrument deposited in the Escrow, and
Escrow Agent's duties hereunder shall be limited to the safekeeping of
such money, instruments, or other documents received by Escrow Agent
as escrow holder, and for the disposition of same in accordance with
the written instructions accepted by Escrow Agent in the Escrow.
(v) Except for Escrow Agent's breach of contract, negligence or
willful misconduct, Seller and Buyer agree, jointly and severally, to
pay on demand, as well as to indemnify and hold Escrow Agent harmless
from and against, all costs, damages, judgments, attorneys' fees,
expenses, obligations and liabilities which in good faith Escrow Agent
may, consistent with this Agreement, reasonably incur or sustain in
connection with or arising out of the Escrow.
(vi) It is agreed by the parties to this Agreement that so far as
Escrow Agent's rights and liabilities are concerned, this transaction
is an escrow and not any other legal relation.
Section 1.5. Title Insurance. Seller shall cause the Escrow Agent, in its
capacity as a Title Insurance Company ("Title Company"), to issue at Closing, or
to unconditionally commit at Closing to issue, an extended coverage owner's
title insurance policy insuring Buyer's title to the Real Property in the amount
of the Purchase Price (the "Owner's Policy"), subject only to the Permitted
Exceptions as specified in Section 2.1(e). Seller shall pay the premium charge
for that portion of the Owner's Policy attributable to standard coverage. Buyer
shall pay the premium charge for the extended coverage portion of the Owner's
Policy. If further endorsements are desired by Buyer, Buyer shall order same
directly from Escrow Agent and shall undertake all actions and pay all
additional premiums and all other costs in excess of those which would be
required by the Title Company for a standard coverage Owner's policy.
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ARTICLE II
INVESTIGATION OF THE PROPERTY
Section 2.1. Title Report and Objections.
(a) Seller shall cause Title Company to issue and deliver to Seller
and Buyer a preliminary commitment for title insurance concerning the Real
Property, together with copies of all instruments referred to therein which
will remain as exceptions to title following Closing (the "Title Report"),
within two (2) days following the Opening of Escrow (or as soon thereafter
as Title Company may be able to provide such Title Report). The Title
Report is to be preliminary to the Owner's Policy to be issued by Title
Company. Buyer shall have until one business day before the Closing Date to
advise Seller, in writing, either (i) that the condition of title to the
Real Property as evidenced by the Title Report is acceptable; or (ii) to
object to any easements, liens, encumbrances or other items, exceptions or
requirements in the Title Report (collectively "Buyer's Title Objections"),
except for (A) the Wrap-Around Deed of Trust and Assignment of Rents (the
"Wrap Deed of Trust") securing the Wrap Note referred to in Section 1.2(b)
and the American Savings Life Insurance Company Promissory Note and Deed of
Trust wrapped thereby, and (B) matters (such as taxes and assessments not
yet delinquent) which will be prorated between the parties at Closing. If
Buyer shall not have notified Seller of Buyer's Title Objections within
such time specified above, Buyer shall be deemed to have approved of the
condition of title of the Real Property as shown by the Title Report.
(b) Seller shall have one (1) business day after Seller's receipt of
Buyer's Title Objections (if any) within which to cure any or all of
Buyer's Title Objections.
(c) If Seller shall not have cured all of Buyer's Title Objections,
Buyer shall either: (i) waive, in writing, the curing of such Buyer's Title
Objections as Seller shall have been unwilling or unable to cure and
proceed to close this Agreement; or (ii) elect to terminate this Agreement
by giving written notice to Seller, in which event this Agreement and the
Escrow shall be deemed immediately terminated, and neither party shall have
any liability or further obligation to the other.
(d) If at any time prior to Closing Title Company shall issue a
supplemental title report which discloses additional matters which render
title unmarketable (other than matters created by or with the written
consent of Buyer or arising as a result of any work performed by or other
activities of Buyer regarding the Property), the provisions set forth above
in this Section 2.1 shall govern the review, objection and objection
resolution obligations of the parties with respect to such additional
matters.
(e) All matters which are either approved or deemed approved pursuant
to this Section shall be referred to as the "Permitted Exceptions."
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Section 2.2. Inspection of Property.
(a) Buyer shall have from the Opening of Escrow until the Closing Date
(the "Inspection Period") to investigate the Property and all matters
relevant to its acquisition, development, usage, occupancy, operation or
marketability, except for matters relating to title as provided in Section
2.1 above. Such right of investigation shall include, without limitation,
the right to review or to have made, at Buyer's expense, any surveys,
architectural and engineering studies, environmental studies, soil borings
and similar examinations, tests, studies and inspections of the Property as
Buyer may deem necessary or appropriate (collectively, the "Inspections").
Buyer agrees to cause each Inspection report or study of the Property which
is obtained from a third party to be addressed to and certified (if
customarily certified) to Seller, at Buyer's expense, if Buyer does not
proceed to Closing for any reason other than a default by Seller. Buyer
shall and does hereby agree to repair any damage to the Property resulting
from the Inspections and to indemnify, defend, protect and hold harmless
Seller from any and all liabilities, claims, losses, costs, damages and
expenses, including but not limited to court costs and attorneys' fees and
any liens placed upon the Property, which may be incurred by Seller because
of the Inspections. Any provision of this Agreement to the contrary
notwithstanding, the indemnity of Buyer set forth in this Section shall
survive Closing or any termination of this Agreement.
(b) Seller agrees to cooperate reasonably with any such Inspections
made by Buyer or at Buyer's direction, so long as such cooperation is at no
expense to Seller, and to make Seller's books, records and files concerning
the Property (exclusive of any confidential or proprietary information)
reasonably available to Buyer at the offices of Seller in Phoenix, Arizona.
(c) On or before the expiration of the Inspection Period as scheduled
pursuant to Section 2.2(a) above, Buyer may provide Seller written notice
setting forth Buyer's dissatisfaction with the Property or its condition
for any reason whatsoever ("Buyer's Inspection Objections"). If Buyer
expressly elects in such written notice to terminate this Agreement, this
Agreement and Escrow shall terminate immediately, and neither party shall
have any liability or further obligation to the other party. If no notice
of termination or dissatisfaction is timely received by Seller, Buyer shall
conclusively be deemed to have approved the condition of the Property, and
this Agreement shall remain in full force and effect in accordance with its
terms.
(d) If Buyer provides notice of Buyer's Inspection Objections at least
one (1) day prior to Closing and does not therein elect to terminate this
Agreement, Seller shall have until the Closing to cure all of Buyer's
Inspection Objections.
(e) If Seller shall not have cured all of Buyer's Inspection
Objections by the Closing, Buyer shall either: (i) waive, in writing, the
curing of such Buyer's Inspection Objections as Seller shall have been
unwilling or unable to cure and proceed to close this Agreement; or (ii)
elect to terminate this Agreement and Escrow by giving written notice to
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Seller, in which event this Agreement shall terminate immediately as
provided in Section 2.3 hereof. If Buyer fails to so provide such notice,
Buyer shall conclusively be deemed to have elected to proceed to Closing
rather than terminate.
Section 2.3. Termination. Upon any termination by either of the parties
hereto as expressly allowed under this Agreement, (a) Buyer shall deliver to
Seller all Inspection studies and reports to Seller as provided in Section
2.2(a); (b) Buyer shall return to Seller any informative materials concerning
the Property previously delivered by Seller to Buyer; and (c) the parties shall
thereafter be relieved from any further liability to one another hereunder,
except with respect to any obligations under this Agreement, including without
limitation indemnity obligations of Buyer and Seller, which are expressly stated
to survive any termination of this Agreement. A copy of any notice of
termination allowed under this Agreement shall be sent to Escrow Agent by the
party electing to terminate.
Section 2.4. Estoppel Certificate. In connection with Buyer's assumption of
the Wrap Note and Wrap Deed of Trust referenced in Section 1.2(b) and Section
2.1(a), Seller shall obtain and deliver to Buyer prior to Closing an estoppel
certificate, in substance and form acceptable to Buyer, wherein the Seller and
Payee of the Wrap Note each certifies to Buyer (i) the remaining unpaid
principal balance of the Wrap Note as of a date no earlier than ten (10) days
prior to the Closing Date, (ii) there is no default by Seller under any of the
terms of the Wrap Note or the Wrap Deed of Trust, (iii) there are no outstanding
or unpaid late fees under the Wrap Note or Wrap Deed of Trust, (iv) no late fees
have been added to or are part of the unpaid principal balance of the Wrap Note
(pursuant to Paragraph No. 5), or, if there are any such late fees which are
part of the unpaid principal, the amount thereof is $ , (v) no default rate of
interest is applicable to all or any portion of the paid or unpaid principal
amounts owing under the Wrap Note, (vi) there is no assumption fee or any other
cost or fee (other than the recording fee) relating to the assignment and
assumption of the Wrap Note or Wrap Deed of Trust, (vii) the amount of the
remaining unpaid principal balance of the American Savings Life Insurance
Company Note (the "ASL Note") around which the Note is wrapped, (viii) there is
no default under the ASL Note or the Deed of Trust securing such ASL Note, and
the conveyance of the Property to Buyer will not constitute a default under the
ASL Note or Deed of Trust, and (ix) Buyer shall have no personal liability under
the Wrap Note and/or Wrap Deed of Trust. Provided such certificate is acceptable
to Buyer, Buyer agrees to assume the Note and Deed of Trust at Closing, subject
to and provided that the provisions of Paragraph No. 5 of the Wrap Note and the
third paragraph of Paragraph No. 11 and Paragraph No. 16 of the Wrap Deed of
Trust are and shall remain applicable to Buyer, its successors and assigns.
ARTICLE III
WARRANTIES AND REPRESENTATIONS
Section 3.1. Seller's Warranties and Representations Seller warrants and
represents to Buyer (with the express understanding that Buyer is relying on
each and all of such warranties and representations by Seller as a material and
significant inducement to Buyer to enter into this Agreement) as follows:
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(a) Authority. Seller is a corporation duly organized, existing and in
good standing under the laws of the State of Arizona. Seller has the full
right and authority to enter into this Agreement and consummate the
transaction contemplated by this Agreement. All requisite action has been
and will be taken by and on behalf of Seller in connection with the
entering into of this Agreement, the instruments referenced herein and the
consummation of the transaction contemplated hereby. The persons and/or
entities signing this Agreement on behalf of Seller are authorized to do
so. Seller shall furnish to Buyer such documentation to evidence such
authority as Buyer shall reasonably request.
(b) Consents; Binding Obligations. Any third-party approvals or
consents which may be required for Seller to enter into this Agreement or
to consummate the transaction contemplated hereby have been, or will prior
to Closing be, obtained by Seller. This Agreement and all documents
required hereby to be executed by Seller are and shall be valid, legally
binding obligations of Seller, enforceable against Seller in accordance
with their terms.
(c) Property Matters.
(i) Seller has received no notice of any, and to the best of
Seller's knowledge there are no, suits, arbitrations, claims,
proceedings (including condemnation proceedings), governmental
actions, or investigations pending or threatened against or affecting
Seller or the Property;
(ii) To the best of Seller's knowledge, there are no prescriptive
easements or adverse claims by any person or persons (including but
not limited to adjoining property owners) and, except as shown on a
survey of the Property by Consulting Land Surveyors dated June 10,
1998, no encroachments onto or from the Property;
(iii) Seller has received no notice of any, and to the best of
Seller's knowledge there is no, alleged existing violation of any
material governmental law, regulation, ordinance or code applicable to
the Property.
(iv) Seller has not sold, conveyed, assigned, leased or otherwise
transferred or agreed to sell, convey, assign, lease or transfer, all
or any part of the Property except to Buyer. There are no written or
oral options agreements or rights of first refusal (to purchase or
lease), leases, licenses or other agreements affecting all or any part
of the Land and/or the Improvements;
(v) Buyer acknowledges Seller has advised Buyer that (A) Buyer
occupies the first floor of the Improvements subject to a City of
Scottsdale (the "City") inspector's inspection notice and approval of
temporary occupancy, (B) the second floor is subject to inspection by
the City, (c) provided authorized representatives from Buyer and
Seller (and Seller agrees it will make available its authorized
representative upon request by Buyer) meet with the City Development
Services
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Department promptly after the Closing, the City will issue the
necessary new documentation to Buyer for temporary occupancy of the
first floor, (D) the second floor of the Improvements are not subject
to occupancy until certain "tenant improvements" have been completed,
and (E) additionally, the ceiling and interior walls of approximately
3,000 to 4,000 square feet of space on the first floor have not been
completely finished. However, Seller warrants and represents that, to
the best of its knowledge, the first floor Improvements, plumbing,
HVAC system and equipment, the electrical system and equipment
pertaining thereto, and all other utilities in and leading to the
Improvements on the first floor are in good and operable working order
and condition and that the bearing walls and roof of the Improvements
are structurally sound and in good condition.
(vi) The Contracts listed in Exhibit B hereto constitute all
existing Contracts in effect (other than those included in the sale of
assets by Xxxxxx'x to Buyer) which in any way pertain to or affect all
or any part of the Property as of the date of this Agreement;
(vii) Seller has received no notice from its insurers of any
alleged existing defects or inadequacies in the Improvements which
have materially affected the insurability of same or caused the
imposition of extraordinary premiums therefor;
(viii) To the best of Seller's knowledge, no portion of the
Property is located in an area having special flood hazards;
For purposes of subsection 3.1(c), references to Seller's "knowledge" or
"notice" mean to the knowledge of Xxxxxx Friend, the President of Seller. The
foregoing warranties and representations are true as of the date hereof and
shall be true as if made on the Date of Closing of Escrow.
Section 3.2. Buyer's Warranties and Representations. Buyer warrants and
represents to Seller (with the express understanding that Seller is relying on
each and all of such warranties and representations by Buyer as an inducement to
Seller to enter into this Agreement) as follows:
(a) Authority. Buyer is a corporation duly organized, existing and in
good standing under the laws of the State of Washington. Buyer has the full
right and authority to enter into this Agreement and consummate the
transaction contemplated by this Agreement. All requisite action has been
and will be taken by Buyer in connection with the entering into this
Agreement, the instruments referenced herein and consummating the
transaction contemplated hereby. The persons and/or entities signing this
Agreement on behalf of Buyer are authorized to do so. Buyer shall furnish
to Seller such documentation to evidence such authority as Seller shall
reasonably request.
(b) Consents; Binding Obligations. Any third-party approvals or
consents which may be required for Buyer to enter into this Agreement or to
consummate the transaction contemplated hereby have been, or will prior to
Closing be, obtained by Buyer. This Agreement and all documents required
hereby to be executed by Buyer are and shall be valid,
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legally binding obligations of Buyer, enforceable against Buyer in
accordance with their terms.
Section 3.3. Seller's Operation of the Property.
(a) Until the earlier of the Closing or the termination of this
Agreement Seller agrees that Seller shall:
(i) Not do anything which would impair the status of title as
shown on the Title Report or undertake any alterations or work to the
Property (other than ordinary repairs and maintenance);
(ii) Operate and maintain the Property in substantially the same
manner as heretofore, reasonable wear and tear and damage by fire or
other casualty excepted, and timely pay all sales taxes related
thereto;
(iii) Not enter into any service contract which, following
Closing, will be binding upon Buyer or the Property; and
(iv) Not transfer or further encumber any of Seller's interest in
the Property, except subject to the terms of this Agreement.
ARTICLE IV
CLOSING
Section 4.1. Time of Closing. The Closing shall take place in the offices
of Escrow Agent on March 20, 2000, unless otherwise agreed upon in writing by
Seller and Buyer at their sole discretion.
Section 4.2. Buyer's Obligation to Close. Buyer shall not be obligated to
close hereunder unless each of the following conditions shall exist on the
Closing Date:
(a) Title Policy. The Title Company shall be prepared to issue (or
prepared to unconditionally commit to issue) the Owner's Policy as
described in Section 1.5, subject to (i) matters affecting Buyer (such as,
for example, judgment or tax liens or qualification to do business), and
(ii) Permitted Exceptions and the other matters set forth in Section
4.4(a).
(b) Accuracy of Warranties and Representations. The warranties and
representations made by Seller in Article III shall be true and correct in
all material respects on and as of the Closing Date with the same force and
effect as if made on and as of the Closing Date.
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(c) Condition of Repair. Subject to the provisions of Section
3.1(c)(v), the Improvements and all systems thereof and the Personal
Property shall be in the same good condition and repair as on the Opening
of Escrow, ordinary wear and tear and damage by casualty (as addressed in
Section 4.8) excepted.
(d) Seller's Performance. Seller shall have performed all covenants
and obligations and satisfied all conditions required by this Agreement to
be performed or satisfied by Seller on or before the Closing Date.
Section 4.3. Seller's Obligation to Close. Seller shall not be obligated to
close hereunder unless each of the following conditions shall exist on the
Closing Date: (a) no Buyer Event of Default (as defined in Section 5.2) shall
have occurred and be continuing; (b) the representations and warranties made by
Buyer in Article III shall be true and correct in all material respects on and
as of the Closing Date with the same force and effect as if made on and as of
the Closing Date; (c) Buyer shall have performed all covenants and obligations
and all conditions required by this Agreement to be performed or satisfied by
Buyer on or before the Closing Date, and (d) the conditions of Section 6.14 are
fully satisfied.
Section 4.4. Closing Deliveries. At the Closing the following shall occur:
(a) Seller shall deliver to Buyer a duly executed and acknowledged
Affidavit of Property Value and Special Warranty Deed in form attached as
Exhibit C (the "Deed") conveying good and marketable title to the Real
Property to Buyer, subject only to (i) current (non-delinquent) taxes,
assessments, improvement liens and similar matters to be prorated between
the parties at Closing; and (ii) the "Permitted Exceptions" accepted by the
Buyer pursuant to Section 2.1.
(b) Buyer shall pay to Seller the Purchase Price as provided in
Section 1.2, subject to the adjustments described in Section 4.5.
(c) Possession of the Property shall be delivered to Buyer.
(d) Seller shall execute and deliver to Buyer and the Title Company an
affidavit that evidences that Seller is exempt from the withholding
requirements of Section 1445 of the Internal Revenue Code, in the form
attached as Exhibit D.
(e) Seller shall execute and deliver to Buyer a Xxxx of Sale and
Assignment in form attached as Exhibit E, conveying to Buyer the Personal
Property and the Warranties, Permits and Related Property (not otherwise
transferred to Buyer pursuant to the sale of assets by Xxxxxx'x to Buyer),
and shall deliver to Buyer the originals of any Warranties or Permits in
Seller's possession.
(f) Seller and Buyer shall execute and deliver an Assignment and
Assumption of the Wrap Note referenced in Section 1.2(b) and the Wrap Deed
of Trust (dated July 24,
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1998, recorded on July 24, 1998 at Recorder's No. 98-0639755, records of
Maricopa County, Arizona, in the form attached as Exhibit F.
(g) Seller and Buyer shall execute and deliver an Assignment and
Assumption of the Contracts being assigned, in form attached as Exhibit G.
Seller shall also deliver to Buyer originals, to the extent in Seller's
possession, of all such assigned contracts.
(h) Seller shall execute and deliver a certified Resolution(s) of all
of the Seller's shareholders and directors, in form acceptable to Buyer,
authorizing and directing the Seller to sell and convey the Property to
Buyer, and authorizing and directing Xxxxxx Friend, as President of Seller,
to execute and deliver this Agreement, the Special Warranty Deed, and any
and all other instruments required to be delivered by Seller to Buyer
pursuant to the terms of this Agreement. Seller's counsel, Xxxxxxxx X.
Xxxxx, shall execute and deliver to Buyer an opinion letter opining that
Seller, and that Xxxxxx Friend as President of the Seller, are fully
authorized and empowered to sell and convey the Property to Buyer and that
upon Closing the conveyance of the Property to Buyer is and shall be legal,
valid and binding and enforceable against Seller in accordance with the
terms of this Agreement.
(i) Seller shall deliver the estoppel certificate referenced in
Section 2.4.
(j) Seller shall execute and deliver a Certificate in the form
attached as Exhibit H pertaining to Seller's warranties and
representations.
(k) Buyer shall deliver into Escrow, for delivery to Seller, at
Closing, a certificate for the shares of stock (the "Share") of Buyer's
Parent as specified in Section 1.2(c), with the following legend affixed
thereto:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER UNITED
STATES FEDERAL OR STATE SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE,
SOLD OR OTHERWISE TRANSFERRED OR ASSIGNED FOR VALUE, DIRECTLY OR
INDIRECTLY, NOR MAY THE SECURITIES BE TRANSFERRED ON THE BOOKS OF THE
CORPORATION, WITHOUT REGISTRATION UNDER ALL APPLICABLE UNITED STATES
FEDERAL OR STATE SECURITIES LAWS OR COMPLIANCE WITH AN APPLICABLE EXEMPTION
THEREFROM, SUCH COMPLIANCE, AT THE OPTION OF THE CORPORATION, TO BE
EVIDENCED BY AN OPINION OF THE HOLDER'S COUNSEL, IN FORM ACCEPTABLE TO THE
CORPORATION, THAT NO VIOLATION OF SUCH REGISTRATION PROVISIONS WOULD RESULT
FROM ANY PROPOSED TRANSFER OR ASSIGNMENT."
(l) After Closing, the Seller agrees that it will not sell, assign,
pledge, give, transfer, or otherwise dispose of the Shares or any interest
therein, or make any offer or attempt to do any of the foregoing, except
pursuant to a registration of the Shares under the United States Securities
Act of 1933 (the "Securities Act") and all applicable state securities laws
or in a transaction that is exempt from the registration provisions of the
Securities Act and all applicable state securities laws.
12
Any attempted sale, assignment, or other transfer of the Shares without
compliance with the provisions of this Agreement will be void, and the
provisions of Section 4.4(k), (l) and (m) shall survive the Closing.
(m) Seller shall deliver an Accredited Investor Questionnaire in the
form of Exhibit I.
(n) See Exhibit J attached hereto for piggy back registration rights.
(o) Seller shall deliver to Buyer state and city transaction privilege
sales tax clearances with respect to Seller's receipts from the Property
which are subject to sales or transaction privilege taxes.
Section 4.5. Closing Adjustments. The funds delivered by Buyer at Closing
pursuant to Section 1.2 shall be subject to adjustment as of the Closing Date in
accordance with the following provisions:
(a) Taxes and Assessments. Current (non-delinquent) taxes,
assessments, improvement liens and similar matters affecting the Property
shall be prorated between Seller and Buyer as of the Closing Date based
upon the current year's assessed valuation established by the Maricopa
County Assessor and the 1999 tax rate, and Seller and Buyer agree that
there shall be no post-Closing re-proration of any such charges.
(b) Utilities. To the extent possible, the parties shall cause all
utility meters to be read on the day preceding the Closing Date and
transferred to Buyer as of the Closing Date. Seller shall be responsible
for the payment of all utility charges incurred prior to the Closing Date,
and Buyer shall assume and pay all charges incurred from and after the
Closing Date. Any utility company deposits shall be and remain the property
of Seller.
(c) Contracts. Amounts payable under any of the Contracts assigned to
and assumed by Buyer hereunder shall be prorated as of the Closing Date.
(d) Liens and Encumbrances. Seller shall pay at Closing an amount
sufficient to obtain the release of the Property from any and all existing
financing liens and any other monetary encumbrance or lien upon the
Property (other than the Wrap Deed of Trust and the ASL Deed of Trust).
(e) Closing Costs. Seller shall pay the premium for the Owner's Policy
as set forth in Section 1.5 hereof, one-half (1/2) of the escrow fees, the
cost of recording any instruments required to discharge any liens or
encumbrances against the Property which Seller is obligated hereunder to
discharge, the fees and expenses of Seller's attorneys, and Seller's other
customary closing costs. Seller also shall pay any Assumption Fee charged
with respect to the Wrap Note and/or Wrap Deed of Trust. Buyer shall pay
for recording the Deed, the entire cost of the extended coverage or special
endorsements to the Owner's Policy requested by Buyer, the fees and
expenses of Buyer's attorneys, one-half (1/2) of the escrow fees, and
Buyer's other customary closing costs.
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Section 4.6. Settlement Statement. At the Closing, Seller and Buyer shall
execute a closing settlement statement to reflect the credits, prorations and
adjustments contemplated by or specifically provided for in this Agreement.
Section 4.7. Eminent Domain. If prior to the Closing the entire Property or
any portion thereof shall be taken by any governmental authority under a power
of eminent domain, or if a suit relating thereto shall be filed or overtly
threatened, then this Agreement shall terminate as provided in Section 2.3.
Section 4.8. Casualty; Risk of Loss. All risk of loss with respect to the
Property shall be Seller's until the Closing. However, if the Property shall be
damaged by fire or other casualty prior to Closing to the extent that it will
require $50,000 or more to repair such damage, as determined by an adjustor
reasonably acceptable to Buyer and Seller (such determination being the "Repair
Estimate"), then Buyer shall elect, by written notice to Seller within two (2)
business days following Buyer's receipt of the Repair Estimate and all
applicable information in the insurance policy, either to (i) proceed to
Closing, whereupon (A) Seller shall assign to Buyer Seller's right to receive
any casualty insurance proceeds payable as a result of such casualty damage, up
to the amount of the Repair Estimate, (B) Seller shall pay to Buyer any amount,
up to the deductible amount on Seller's casualty policy, by which the Repair
Estimate exceeds the insurance proceeds, and (c) Buyer shall not then be able to
seek any other damages or compensation from Seller; or (ii) terminate this
Agreement, in which event this Agreement shall terminate as provided in Section
2.3. If Buyer fails to so provide such notice, Buyer shall conclusively be
deemed to have elected to terminate this Agreement, which termination shall
occur as provided in Section 2.3. In the event of any casualty resulting in
damage that will require less than $50,000 to repair, the parties at Buyer's
option shall proceed to Closing, whereupon (X) Seller shall assign to Buyer
Seller's right to receive any casualty insurance proceeds payable as a result of
such casualty damage, up to the amount of the Repair Estimate, (Y) Seller shall
pay to Buyer the applicable deductible amount and any uninsured portion of such
damage, and (Z) Buyer shall not then be able to seek any other damages or
compensation from Seller. Notwithstanding the foregoing, all risk of loss as to
the Property shall remain with Seller until Closing.
ARTICLE V
BREACH; REMEDIES
Section 5.1. Breach by Seller. Time is of the essence of Seller's
obligations hereunder. If Seller, by reason of any breach or default by Seller,
materially fails to comply with any of its obligations hereunder and such
failure shall continue for five (5) days after Seller's receipt of written
notice from Buyer of such breach or default, then Buyer, at Buyer's option,
shall be entitled to either (1) terminate this Agreement by written notice to
Seller, in which event this Agreement shall terminate as provided in Section
2.3, or (2) waive such breach and proceed to Closing. Buyer hereby waives all
right Buyer may have to seek any other remedy Buyer may have at law or in
equity, except that Buyer shall have the right to seek (a) specific performance
of the conveyance of the Property against Seller; or (b) damages, but only to
the extent specific performance is not available due to the act of Seller. If
Buyer seeks specific performance of the conveyance of the Property, Seller's
sole
14
obligation, if such specific performance is awarded, shall be to convey the
Property as provided in Section 4.4 hereof upon tender by Buyer of the Purchase
Price, and under no circumstances shall Seller be obligated or required to
otherwise cure any defaults, expend any moneys, secure any permits or approvals,
change the condition of the Property or restore the Property, or take any other
action whatsoever, except as required under this Agreement. In no event shall
Buyer be entitled to obtain monetary damages for Seller's breach of this
Agreement (other than an award of Buyer's reasonable attorneys' fees and costs
as described in Section 6.14 below or as provided in clause (b) above).
Section 5.2. Breach by Buyer. Time is of the essence of Buyer's obligations
hereunder. If (a) a Buyer Event of Default (as defined below in this section)
occurs or (b) Buyer otherwise fails to complete the acquisition on the Closing
Date as herein provided by reason of any breach or default by Buyer, Seller
shall be entitled to terminate this Agreement by written notice to Buyer, in
which event Seller shall be entitled to receive Ten Thousand Dollars
($10,000.00) as liquidated damages, and this Agreement shall terminate as
provided in Section 2.3. The parties hereby agree that it would be difficult or
impossible to determine Seller's actual damages, and that, under the
circumstances of the parties' desired abnormally accelerated Closing, $10,000.00
is a fair and reasonable estimate of the total detriment that Seller would
suffer in the event of Buyer's default hereunder. "Buyer Event of Default" shall
mean the occurrence of any of the following events:
(i) Buyer shall fail to pay or deposit any monies or deliver the
certificate for Shares of stock in accordance with this Agreement by the
stated due date (and provided Buyer has not elected to terminate this
Agreement as herein provided);
(ii) Buyer shall fail to fully and timely perform any of Buyer's
obligations (other than monetary obligations as provided in (i) above)
arising under this Agreement and such failure shall continue for five (5)
days after Buyer's receipt of written notice from Seller of such default;
(iii) Buyer shall (A) voluntarily be adjudicated a bankrupt or
insolvent; (B) seek, consent to or not contest the appointment of a
receiver or trustee for itself or for all or any part of its property; (c)
file a petition seeking relief under the bankruptcy, arrangement,
reorganization or other debtor relief laws of the United States, any state
or any other competent jurisdiction; or (D) make a general assignment for
the benefit of its creditors; or
(iv) If (A) a petition is filed against Buyer seeking relief under the
bankruptcy, arrangement, reorganization or other debtor relief laws of the
United States, any state or any other competent jurisdiction; or (B) a
court of competent jurisdiction enters an order, judgment or decree
appointing, without the consent of Buyer, a receiver or trustee for Buyer,
or for all or any part of Buyer's property, and such petition, order,
judgment or decree shall not be discharged or stayed within a period of 60
days after its entry.
15
ARTICLE VI
GENERAL PROVISIONS
Section 6.1. Commissions.
(a) Seller and Buyer each hereby represents and warrants to the other
that it has not engaged any broker, finder, consultant or any other person
or agent who would be entitled to any commission, finder's fee or other
compensation in connection with the execution of this Agreement or the
consummation of the transaction contemplated hereby, except that Xxxxx
Xxxxxx (the "Broker") is providing certain brokerage services.
(b) Seller is solely responsible for, and agrees to deliver a
commission to the Broker pursuant to the terms of a separate written
agreement between Seller and Broker. In no event shall the Broker have any
claim to all or any part of the commission unless and until the transaction
contemplated by this Agreement closes and the Property is conveyed to
Buyer.
(c) The parties agree that, if any person ("Claimant") shall assert a
claim to a finder's fee, brokerage commission or other compensation on
account of alleged employment as a finder, broker or other consultant or
agent in connection with the transaction embodied by this Agreement
(including the Broker), the party under whom the Claimant is claiming
(i.e., the party who is alleged to have retained or utilized the services
of the Claimant) shall indemnify and hold the other party harmless from and
against any such claim and all costs, expenses and liabilities incurred in
connection with such claim or any action or proceeding brought on such
claim, including, but not limited to, attorneys and witness fees and court
costs in defending against such claims. This indemnity obligation shall
survive the Closing or any termination of this Agreement.
Section 6.2. Notices. All notices, demands, requests, consents, approvals
or other instruments required or permitted to be given pursuant hereto shall be
in writing and shall, subject to Section 6.5, be deemed to have been given and
received upon (i) receipt, if hand delivered, (ii) transmission, if delivered by
facsimile transmission, (iii) the next business day, if delivered by express
delivery service or overnight courier service, or (iv) the third business day
following the day of deposit of such notice in registered or certified mail,
return receipt requested. Notices shall be provided to the addresses (or
facsimile numbers, as applicable) specified below:
If to Seller: C&C Capital Investment, Inc.
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
16
with a copy to: Xxxxxxxx X. Xxxxx
Xxxxx & Xxxxxxxx, PC
0000 Xxxx Xxxxxxxx, Xxxxx X-000
Xxxxxxx, Xxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Buyer: Xxxxxxxxxxxx.xxx (Washington), Inc.
00000 00xx Xxxxxx X.X.
Federal Way, Washington 98023-2105
Attn: Xxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Xxxxxxx X. Xxxxx, Barrister & Solicitor
Page Fraser & Associates
1700 - 0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx X0X 0X0
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and with a copy to: Xxxx X. Xxxxxxxxx
0000 Xxxxx Xxxxxxx Xxx., Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Escrow Agent: Chicago Title Insurance Company
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxxx, Escrow Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Seller or Buyer may at any time change its address for such notices by
delivering to the other, as aforesaid, a notice of such change.
Section 6.3. Further Assurances. Each of the parties hereto undertakes and
agrees to execute and deliver such documents, writings and further assurances as
may reasonably be required to carry out the intent and purpose of this
Agreement.
Section 6.4. Amendment; Waiver; Entire Agreement. No change or modification
of this Agreement shall be valid unless the same is in writing and signed by the
parties hereto. No waiver of any of the provisions of this Agreement shall be
valid unless in writing and signed by the party against whom it is sought to be
enforced. This Agreement contains the entire agreement between
17
the parties relating to the purchase and sale of the Property. All prior
negotiations between the parties and any and all letters of intent executed by
the parties are merged in this Agreement, and there are no promises, agreements,
conditions, undertakings, warranties or representations, oral or written,
express or implied, between the parties other than as herein set forth.
Section 6.5. Dates and Times. Time is of the essence of this Agreement.
Unless expressly stated otherwise, all time periods shall be measured in
calendar days. If any date set forth in this Agreement for the delivery of any
document or notice or the happening of any event (such as, for example, the
expiration of the Closing Date) should, under the terms hereof, fall on a
weekend or holiday, then such date shall be automatically extended to the next
succeeding business day. Deliveries or events occurring subsequent to 5:00 p.m.
on a business day in the location of occurrence shall be deemed to have occurred
on the next business day (e.g., notices due on a certain date must be received
by 5:00 p.m. on such date).
Section 6.6. Governing Law. This Agreement shall be construed and enforced
in accordance with the laws of the State of Arizona and venue for bringing any
action hereunder shall be Maricopa County, Arizona. Any and all recitals or
disclosures required by such laws or necessary thereunder to effectuate the
expressed intent of the parties herein are hereby deemed incorporated into this
Agreement by this reference; provided that should any such incorporated
provision conflict with the express printed provisions hereof, the latter shall
in all respects be controlling.
Section 6.7. Headings. The paragraph headings which appear in some of the
Sections of this Agreement are for purposes of convenience and reference and are
not in any sense to be construed as modifying the Sections in which they appear.
Section 6.8. Assignment. Buyer shall be entitled to assign its interest
hereunder only to any person or entity controlling; controlled by or under
common control with the Buyer, without the prior written consent of Seller. In
the event any such assignment is made, any assignee shall assume all obligations
imposed on Buyer as if the assignee were the original purchaser named in this
Agreement; provided that no such assignment shall release Buyer from liability
hereunder unless expressly so agreed in writing by Seller. Any attempted
assignment in contravention of this Section shall be null and void.
Section 6.9. Successors and Assigns. Subject to Section 6.8, this Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and assigns.
Section 6.10. Survivability. All covenants and agreements of the parties,
including, but not limited to, all indemnity obligations, which, by the context
of this Agreement, are to be performed after or are to survive the termination
of this Agreement or the Closing, shall, as the case may be, survive the Closing
or the termination of this Agreement.
Section 6.11. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original but all of which shall constitute only
one agreement.
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Section 6.12. Attorneys' Fees. In the event of any action at law or in
equity between Seller and Buyer to enforce any of the provisions and/or rights
under this Agreement or on account of a breach of any term or provision hereof,
the unsuccessful party to such litigation agrees to pay to the prevailing party
all costs and expenses, including reasonable attorneys' fees, incurred therein
by such prevailing party, including any such costs and expenses incurred in any
appeal, and if such prevailing party shall recover judgment in any action or
proceeding, such costs, expenses and fees shall be included in and as a part of
such judgment. As used herein the term "prevailing party" shall be the party to
such litigation which receives, whether by settlement or judgment, substantially
the relief prayed for in such litigation. This provision shall survive Closing
or any termination of this Agreement.
Section 6.13. Construction. The terms and provisions of this Agreement
represent the results of negotiations between Seller and Buyer, each of which
are financially sophisticated parties and each of which has been represented or
been given the opportunity to be represented by counsel of its own choosing, and
neither of which has acted under any duress or compulsion, whether legal,
economic or otherwise. Consequently, the terms and provisions of this Agreement
shall be interpreted and construed in accordance with their usual and customary
meanings, and Seller and Buyer each hereby waive the application of any rule of
law which would otherwise be applicable in connection with the interpretation
and construction of this Agreement that ambiguous or conflicting terms or
provisions contained in this Agreement shall be interpreted or construed against
the party whose attorney prepared the executed Agreement or any earlier draft of
the same.
Section 6.14. Concurrent Purchases and Closings. Buyer has also entered
into an Asset Purchase Agreement with Xxxxxx'x dated March 20, 2000. The
transaction provided for in the Xxxxxx'x Purchase Agreement shall close
concurrently with the transaction provided for in this Agreement, and this
transaction shall not close unless the Xxxxxx'x transaction closes concurrently.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives as of the date first written above.
SELLER: BUYER:
C&C Capital Investment, Inc., Xxxxxxxxxxxx.xxx (Washington), Inc.,
an Arizona corporation a Washington corporation
By: /s/ Xxxxxx Friend By: /s/ Xxxxx Xxxxx
------------------------------ -----------------------------------
Name (Printed): Xxxxxx Friend Name (Printed) Xxxxx Xxxxx
Title: President Title President
19
ESCROW AGENT'S ACCEPTANCE
ACCEPTED AND AGREED to this 20th day of March, 2000, which shall be deemed the
date of "Opening of Escrow" for the foregoing Agreement, and the Escrow Number
assigned to the transaction covered by the foregoing Agreement shall be 2003010.
CHICAGO TITLE INSURANCE COMPANY
By: /s/ Xxxxx Xxxxxx
-------------------------------------------
Xxxxx Xxxxxx
Escrow Officer
