PURCHASE AND SALE AGREEMENT
6905 E. MCDOWELL ROAD
THIS PURCHASE AND SALE AGREEMENT OF REAL PROPERTY (hereinafter called
the "Agreement"), made and entered into this ___ day of May 1996, by and between
STEVEN KNAPPENBERGER, as Trustee of the Steven Knappenberger Revocable Trust II,
as to an undivided fifty percent interest and BRUCE KNAPPENBERGER, as Trustee of
the Bruce Knappenberger Revocable Trust, as to an undivided fifty percent
interest (collectively and severally, "Seller") and UAG WEST, INC., a Delaware
corporation ("Purchaser").
W I T N E S S E T H:
WHEREAS, Seller desires to sell and Purchaser desires to purchase the
Property (as hereinafter defined), subject to the terms and provisions of this
Agreement.
NOW, THEREFORE, for and in consideration of the premises, the mutual
covenants and agreements hereinafter set forth, and for other good and valuable
consideration, the receipt, adequacy, and sufficiency of which are hereby
acknowledged by the parties hereto, the parties hereto hereby covenant and agree
as follows:
1. AGREEMENT TO SELL AND PURCHASE. Subject to and in accordance
with the terms and provisions hereof, Seller agrees to sell and Purchaser agrees
to purchase all that tract or parcel of land lying and being in Scottsdale,
Arizona and being more particularly described on EXHIBIT "A" attached hereto and
by this reference made a part hereof (the "Land"), together with that certain
building (the "Building"), all other improvements, [VERIFY NO PERSONAL PROPERTY
OWNED BY SELLER] structures, plants, trees, and shrubbery located thereon (the
"Improvements"), and together with all rights, privileges, licenses, permits,
members, reversions, warranties, guarantees, water rights and easements
appurtenant thereto, and all right, title, and interest of Seller, if any, in
and to any land lying in the bed of any street, road, alley, or right-of-way,
open or proposed, adjacent to or abutting the Land (all interests in this
Paragraph 1 are herein collectively referred to as the "Property").
2. EARNEST MONEY. Within three (3) business days after the full
execution of this Agreement, Purchaser shall deliver to First American Title
Insurance Company ("Escrow Agent"), at the address for notices set forth in this
Agreement, Purchaser's check, payable to Escrow Agent, in the amount of FIVE
THOUSAND AND NO/100 DOLLARS ($5,000.00) (the "Earnest Money"), which Earnest
Money shall be held and disbursed by Escrow Agent pursuant to the terms of this
Agreement. In the event the Closing (as hereinafter defined) shall occur, the
Earnest Money and all interest earned thereon shall be credited to the Purchase
Price. If the Earnest Money is forfeited to Seller as provided by this
Agreement, the Earnest Money, with any interest earned thereon, shall be paid
immediately to Seller. If Purchaser is entitled at any time to a return of the
Earnest Money, any interest earned thereon shall be paid to Purchaser.
3. PURCHASE PRICE. Subject to adjustment and credits as otherwise
specified in this Agreement, the purchase price (the "Purchase Price") to be
paid by Purchaser to Seller for the Property shall be NINE HUNDRED FIFTY
THOUSAND AND NO/100 DOLLARS ($950,000.00) plus Purchaser's assumption of that
certain promissory note made by Seller and held by Bank of America ("Bank")
dated ______________, in the original principal amount of ________________
_________________________________ ($______________) ("Promissory Note") secured
by the Property pursuant to that certain Deed of Trust dated ___________,
recorded in Book ____, Page ____, Maricopa County, Arizona, __________ Records
("Deed of Trust").
4. PURCHASER'S INSPECTION AND REVIEW RIGHTS. Commencing on the
effective date of this Agreement, Purchaser and its agents, engineers, and
representatives, with Seller's full cooperation, shall have the privilege of
going upon the Property following reasonable prior notice to Seller as needed to
inspect, examine, test, and survey the Property at all reasonable times and from
time to time. Such privilege shall include the right to make soils tests,
borings, percolation tests, tank tightness, environmental, and other tests to
obtain information necessary to determine surface and subsurface conditions, and
tests and inspections to determine the fitness of the Building and Improvements,
as well as any other tests deemed reasonably necessary by Purchaser. Purchaser
agrees to indemnify and hold Seller harmless from any injury, cost, liability or
expense to person or property arising out of Purchaser's exercise of the
inspection rights granted by this Paragraph and this indemnity shall survive the
Closing or the cancellation of this Agreement. Seller shall make available for
inspection by Purchaser all books, records, and files relating to the ownership
and operation of the Property, including, without limitation, copies of Seller's
title policy and the exceptions shown thereon, surveys, environmental reports,
investigation and governmental filings with respect thereto, appraisals,
contracts, books, accounts, records, licensure, inventory and other information
relating to the Property which is in Seller's possession or control. Seller
further agrees to in good faith assist and cooperate with Purchaser in coming to
a thorough understanding of all such information and to respond to such
additional requests for information as Purchaser may make, provided Seller shall
not be obligated to incur expenses in order to so assist Purchaser except for
reasonable personnel assistance and copying costs. Within three (3) business
days after the effective date of this Agreement, Seller shall deliver to
Purchaser copies of the most recent title
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policy, survey and environmental phase 1 and, if applicable, phase 2 reports in
Seller's possession or control.
5. INSPECTION PERIOD. Purchaser shall have thirty (30) [MAKE
CONSISTENT WITH SPA] days after the effective date of this Agreement (the
"Inspection Period") in order to determine, in Purchaser's sole and absolute
opinion and discretion, whether the Property is suitable for Purchaser's needs.
Purchaser shall have the right to terminate this Agreement at any time prior to
the expiration of the Inspection Period by giving written notice to Seller of
such election to terminate. In the event Purchaser so elects to terminate this
Agreement, Seller shall be entitled to receive $100.00 of the Earnest Money, the
balance of the Earnest Money shall be refunded by Escrow Agent to Purchaser,
whereupon, except as expressly provided to the contrary in this Agreement, no
party hereto shall have any other or further rights or obligations under this
Agreement. Seller acknowledges that the sum of $100.00 is good and adequate
consideration for the termination rights granted to Purchaser hereunder and that
Purchaser, in reliance on this Agreement, will expend far greater sums in
investigating and examining the Property to determine its suitability for
Purchaser's purposes.
6. GENERAL CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS REGARDING
THE CLOSING. In addition to Purchaser's right to terminate this Agreement as
set forth in Paragraph 5 above, the obligations and liabilities of Purchaser
hereunder shall in all respects be conditioned upon the satisfaction of each of
the following conditions precedent prior to or simultaneously with the Closing,
the failure of any of which shall entitle Purchaser to terminate this Agreement
upon notice to Seller, whereupon the balance of the Earnest Money shall be
refunded by Escrow Agent to Purchaser:
(a) Seller and the other parties thereto have complied with and
otherwise performed each of the covenants and obligations set forth in this
Agreement, in that certain Stock Purchase Agreement of even date herewith
by and among Purchaser, United Auto Group, Inc., Scottsdale Jaguar, Ltd.,
SA Automotive, Ltd., SL Automotive, Ltd., SPA Automotive, Ltd., Scottsdale
Management Group, Ltd., Steven Knappenberger, Jay Beskind and George
Brochick, concerning the purchase of stock and assets regarding the
business conducted at the Property and other businesses ("SPA").
(b) All representations and warranties of Seller as set forth in
this Agreement and of Seller and the other parties thereto in the SPA shall
be in all respects true and correct as of the date of Closing.
(c) Title Company (as hereinafter defined) has issued an owner's
title insurance commitment on the Property and is prepared to issue to
Purchaser upon the Closing the Title Insurance Policy (as hereinafter
defined) with respect to the Property, subject only to the matters approved
by Purchaser.
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(d) The closing of the SPA transactions contemplated by the SPA.
(e) Purchaser's (i) ability to assume the Note and Deed of Trust
on terms acceptable to Purchaser and without any increase in interest rate,
decrease in term or payment of any amount for such assumption, provided
that Purchaser and United Auto Group, Inc. agree to guarantee the Note and
Deed of Trust as part of such assumption; (ii) obtaining written assurances
satisfactory to it that (w) the Deed of Trust is security only for the
Note, and (x) there is no default under the Note, Deed of Trust or any loan
documents related thereto. Seller's obligations and liabilities hereunder
shall be conditioned upon the full release of Seller and Steven
Knappenberger from all liability under the Note, Deed of Trust and all
related guarantees and loan documents related thereto prior to the Closing.
(f) The Lease (as hereinafter defined) is not in default and
Seller provides written evidence reasonably satisfactory to Purchaser to
such effect.
(g) The principal amount together with all accrued and unpaid
interest on the Note together with any other amounts owing with respect to
the Note and Deed of Trust shall not exceed _______________________ [DO WE
NEED TO DEAL WITH OTHER ASSUMED DEBT AMOUNTS?].
Purchaser may waive any of the foregoing conditions except the contingency
benefitting Seller set forth in paragraph 6(e), in Purchaser's sole discretion
on or prior to Closing.
7. PRELIMINARY TITLE REPORT: SURVEY.
(a) Within ten (10) days following the opening of escrow,
Seller, at its expense, shall cause Escrow Agent to deliver a current
preliminary title report (the "Report") on the Property to Purchaser and
Seller. The Report shall show the status of title to the Property as of
the date of the Report and shall be accompanied by legible copies of all
documents referred to in the Report.
(b) Promptly following the delivery of the Report, Purchaser
will cause an ALTA Survey of the Property (the "Survey") to be prepared by
an Arizona licensed civil engineer or land surveyor, at Purchaser's
expense. The Survey shall be certified to be accurate, complete, and
correct to Purchaser, Seller, and Escrow Agent and shall be in a form
acceptable to Escrow Agent for issuance of the Title Insurance Policy
required by Paragraph 8.
(c) Purchaser shall have ten (10) days (the "Review Period")
following receipt of both the Report and the Survey to approve or
disapprove any Survey matters and the status of title as shown by the
Report and the Survey. No later than
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ten (10) days but no earlier than fifteen (15) days prior to Closing,
Seller shall cause Escrow Agent to issue a supplemental or amended title
report and if it shows additional exceptions to title (an "Amended
Report"), Purchaser shall have a period of time equal to five (5) days (a
"Supplemental Review Period") from the date of receipt of the Amended
Report and a copy of each document referred to in the Amended Report in
which to give notice of dissatisfaction as to any additional exceptions.
Purchaser shall also obtain a re-certified Survey prior to Closing
("Amended Survey"). If Purchaser is dissatisfied with any matter shown on
the Survey or Amended Survey or with any exception to title as shown in the
Report or on an Amended Report, then, at Purchaser's sole option, Purchaser
may either (i) cancel this Agreement by giving written notice of
cancellation to Seller and Escrow Agent within five (5) days after the
Review Period, or Supplemental Review Period, as appropriate, or (ii)
Purchaser may provisionally accept the title subject to Seller's removal of
any disapproved matters, exceptions, or objections, or Seller obtaining
title insurance endorsements satisfactory to Purchaser against such
matters, exceptions, and objections before the close of escrow; provided,
however, it is understood and agreed that, except as provided below, Seller
shall have no duty whatsoever to eliminate or secure a title endorsement
against any such matter or exception. If Seller cannot remove such
matters, exceptions, and objections before the close of escrow, then, at
Purchaser's option, the Earnest Money shall be returned to Purchaser upon
demand and, subject to Purchaser's rights herein, all obligations shall
terminate, or Purchaser may close the transaction as scheduled and pursue
any rights it may have hereunder.
(d) Notwithstanding anything herein contained to the contrary, it is
understood and agreed that title to the Property shall be delivered to
Purchaser at the close of escrow free and clear of all (i) monetary liens
and encumbrances (other than the Deed of Trust and any related documents
and the lien for current real property taxes and assessments not yet due
and payable) and that such monetary liens and encumbrances shall be
released from the Property by Seller at Seller's sole expense on or before
the close of escrow or Purchaser may cause their release and the cost
thereof, together with Purchaser's reasonable expenses to accomplish same,
shall be credited against the Purchaser Price; and (ii) matters first
arising after the effective date of the Report which arise by the action or
inaction of Seller and that such matters shall be released from the
Property by Seller at Seller's sole expense on or before the close of
escrow, or Purchaser may cause their release and the cost thereof, together
with Purchaser's reasonable expenses to accomplish same, shall be credited
against the Purchase Price (or if such cannot be so released, Purchaser may
pursue its remedies against Seller for default) (the matters in (i) and
(ii) sometimes referred to as "Seller Defects").
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(e) If Purchaser does not object to a Survey matter or an
exception to title as disclosed by a Report or Amended Report within the
applicable time period, such matter shall be deemed to have been approved
by Purchaser.
(f) Upon a cancellation in accordance with the provisions of
this Paragraph 7, all Earnest Money deposits shall be returned to
Purchaser, together with all documents deposited in escrow by Purchaser.
All documents deposited in escrow by Seller shall be returned to Seller,
and this Agreement shall terminate.
Seller represents and warrants that is currently owns good and
marketable fee simple title to the Property. Title to the Property shall be
conveyed from Seller to Purchaser at the Closing by Special [VERIFY] Warranty
Deed subject to current taxes and assessments not yet due and payable [VERIFY
LESSEE PAYS TAXES], easements, rights-of-way, reservations in patents,
covenants, conditions, restrictions and non-monetary encumbrances, as may appear
of record on the date of this Agreement (unless Seller agrees to remove any such
matters, in which case such shall not be a permitted exception), the Lease, Deed
of Trust and all matters which an accurate survey of the Property or a physical
inspection of the Property on the date of this Agreement would disclose (unless
Seller agrees to remove any such matters, in which case such shall not be a
permitted exception). Water rights, if any, shall be excluded from the coverage
of the deed warranties and shall be transferred by quitclaim only [VERIFY]. If
the Survey reflects a legal description that differs from that in the conveyance
document by which Seller acquired title to the Property, Seller shall also
convey, by quitclaim deed, the Property pursuant to the legal description
reflected on the Survey.
8. TITLE POLICY.
(a) At the close of escrow, Purchaser shall obtain an ALTA
extended coverage owner's policy of title insurance ("Title Insurance
Policy") issued by First American Title Insurance Company (the "Title
Company") in the full amount of the purchase price (including the assumed
amount of the Note obligation), effective as of the close of escrow,
insuring Purchaser that good and marketable fee simple title to the
Property is vested in Purchaser, subject only to the usual printed
exceptions and exclusions contained in such title insurance policies
[VERIFY], to the matters approved by Purchaser as provided above in
Paragraph 7, to any other matters approved in writing by Purchaser, and
containing any endorsements requested by Purchaser.
(b) The obligations of Escrow Agent to provide the Title
Insurance Policy shall be satisfied if, at the close of escrow, Escrow
Agent has issued a binding commitment to issue the policy in the form
required by this Paragraph and if such
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policy is delivered within a reasonable time following the close of escrow.
[VERIFY]
9. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby makes
the following representations and warranties to Purchaser, each of which shall
be deemed material, with knowledge that Purchaser is relying on same in entering
into this Agreement:
(a) NO OTHER AGREEMENTS. There are no leases, service
contracts, management agreements, or other agreements or instruments in
force, either oral or written, that grant to any person whomsoever or any
entity whatsoever any right, title, interest, or benefit in or to all or
any part of the Property or any rights relating to the use, operation,
management, maintenance, or repair of all or any part of the Property,
which will survive the Closing or be binding upon Purchaser except that
certain Lease in favor of SL Automotive, d/b/a Scottsdale Lexus dated
__________ with respect to the Property, a copy of which is attached hereto
and incorporated herein by reference as EXHIBIT "D" ("Lease"), and [VERIFY]
those agreements disclosed in the SPA.
(b) NO LITIGATION. There are no actions, suits, or proceedings
pending, or, to the best of Seller's knowledge, threatened by any
organization, person, individual, or governmental agency against Seller
with respect to the Property or against the Property or with respect
thereto, nor does Seller know of any basis for such action except as
described in Paragraph 29. Seller also has no knowledge of any pending or
threatened application for changes in the zoning applicable to the Property
or any portion thereof.
(c) NO CONDEMNATION. To the best knowledge of Seller, no
condemnation or other taking by eminent domain of the Property or any
portion thereof has been instituted and, to the best knowledge of Seller,
there are no pending or threatened condemnation or eminent domain
proceedings (or proceedings in the nature or in lieu thereof) affecting the
Property or any portion thereof or its use.
(d) NO PROCEEDINGS AFFECTING ACCESS. To the best knowledge of
Seller, there are no pending or, to the best knowledge of Seller,
threatened proceedings that could have the effect of impairing or
restricting access between the Property and adjacent public roads.
(e) NO ASSESSMENTS. No assessments have been made against the
Property that are unpaid whether or not they have become liens. If the
Property or any part thereof shall be or shall have been affected by an
assessment or assessments, made on or before the date of Closing, and that
are or may become payable in installments, then for the purposes of this
Agreement all of the unpaid installments of any such
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assessments, including those that are to become due and payable after the
Closing, shall be deemed to be due and payable immediately and shall be
paid and discharged in full by Seller at the Closing. [WHO HAS OBLIGATION
UNDER LEASE?]
(f) NO VIOLATIONS. To the best knowledge of Seller, there are
no violations of law, municipal or county ordinances, or other legal
requirements with respect to the Property.
(g) ZONING. The Property is currently zoned in a
___________________ classification under the applicable zoning ordinances
and a new and used car dealership is permitted thereunder.
(h) UTILITIES. To the best knowledge of Seller, all utilities
necessary for the current use of the Property including water, sanitary
sewer, storm sewer, natural gas, electricity, and telephone, are installed
and operational and such utilities either enter the Property through
adjoining public streets, or, if they pass through adjoining private land,
do so in accordance with valid public easements or private easements which
inure to the benefit of the Property. All rights to water with respect to
the Property are permanent and not subject to reduction or termination,
except as disclosed in Paragraph 29. [VERIFY]
(i) NO FLOOD HAZARD. To the best knowledge of Seller, no
portion of the Property is located in a flood plain or an area of special
risk with respect to earth movement, rising groundwater, or other natural
hazards.
(j) NO LIENS. All contractors, subcontractors, and other
persons or entities furnishing work, labor, materials, or supplies by or at
the instance of Seller for the Property are being paid [VERIFY] as their
invoices are submitted in the ordinary course of business, and there are no
claims against the Property or Seller in connection therewith.
(k) NO HAZARDOUS SUBSTANCES. To the best knowledge of Seller,
without any implied obligation to investigate such matters, (i) no
"hazardous substances", as that term is defined in the Comprehensive
Environmental Response, Compensation and Liability Act or any other State,
Federal or local law concerning health or the environment, and the rules
and regulations promulgated pursuant thereto, or any other pollutants,
toxic materials, or contaminants including, but not limited to, petroleum
or petroleum based products have been or shall prior to Closing be
discharged, disbursed, released, stored, treated, generated, disposed of,
or allowed to escape on or migrate under the Property, except for those
hazardous substances stored in compliance with applicable laws in the
normal course of the lessee's business operated on the Property, (ii) no
asbestos or asbestos containing materials have been installed, used,
incorporated into, or
8
disposed of on the Property, (iii) no polychlorinated biphenyls are located
on or in the Property, (iv) there are only ____ (__) underground storage
tanks located on the Property, and Seller has no knowledge of any
underground storage tanks on the Property which have been removed or filled
nor has there been any spill from any past or present underground or
aboveground storage tank, (v) no investigation, administrative order,
consent order or agreement, litigation, or settlement with respect to
hazardous substances is in existence with respect to the Property or, to
the Seller's knowledge, is proposed, threatened or anticipated, and (vi)
the Property has not previously been used as a cemetery, landfill, or as a
dump for garbage or refuse.
(l) NO BANKRUPTCY. The two trusts comprising the Seller are
solvent and neither has made a general assignment for the benefit of
creditors nor been adjudicated a bankrupt or insolvent, nor has a receiver,
liquidator, or trustee for any of either party's properties (including the
Property) been appointed or a petition filed by or against either for
bankruptcy, reorganization, or arrangement pursuant to the Federal
Bankruptcy Act or any similar Federal or State statute, or any proceeding
instituted for the dissolution or liquidation of either.
(m) NO PRE-EXISTING RIGHT TO ACQUIRE. No person or entity has
any right or option to acquire the Property or any portion thereof other
than Purchaser.
(i) TAX RETURNS. There are no property tax returns or
exemptions required to be filed by Seller relating to the Property under
any law, ordinance, rule, regulation, order, or requirement of any
governmental authority.
(n) AUTHORIZATION. This Agreement has been duly executed on
behalf of each Trust comprising Seller and constitutes the valid and
binding agreement of each Trust comprising Seller, enforceable in
accordance with its terms, and all necessary action on the part of such
Trust to authorize the transactions herein contemplated has been taken, and
no further action is necessary for such purpose.
(o) SELLER NOT A FOREIGN PERSON. Seller is not a "foreign
person" which would subject Purchaser to the withholding tax provisions of
Section 1445 of the Internal Revenue Code of 1986, as amended.
(p) WARRANTIES CORRECT. All representations and warranties of
Seller contained in this Agreement are true and correct as of the date
hereof.
(q) KNOWLEDGE. As used herein, knowledge shall mean that Seller
knows or, in the exercise of reasonable diligence
9
by a property owner of an improved commercial property, would or should
have known of the particular matter referred to.
At Closing, Seller shall reaffirm in writing that all such
representations and warranties in this Agreement remain true and correct as of
the date of the Closing and they shall agree to indemnify and hold harmless
Purchaser of and from all loss, cost, liability, damage, expense (including, but
not limited to, attorney's fees), action and suit arising out of any breach of
such representation or warranty. This indemnity shall survive the Closing for a
period of ______________ (___) months. Notwithstanding such limitation,
however, Seller agrees that if there is any Hazardous Substance on, or under the
Property as of the date of Closing, arising as a result of Seller's actions or
for which Seller has liability under any applicable State, Federal or local law,
Seller shall indemnify and hold harmless Purchaser from all loss, cost, damage,
liability, expense (including, but not limited to, investigative costs and
remediation expense and attorneys' fees and expenses) action and proceeding
arising or alleged to arise as the result thereof. If there is any change in
any representations or warranties from the date of this Agreement to the
Closing, Seller shall promptly notify Purchaser and Purchaser may, at
Purchaser's option, (i) close and consummate the transaction contemplated by
this Agreement, except that after such closing and consummation Purchaser shall
not have the right to bring any claim against Seller with respect to the matter
disclosed by Seller prior to the Closing, unless such matter is the result of
any action or inaction of Seller in which event Purchaser may seek monetary
damages from Seller, or (ii) terminate this Agreement by written notice to
Seller, whereupon the Earnest Money shall be immediately returned to Purchaser,
and thereafter the parties hereto shall have no further rights or obligations
hereunder, except only (1) for such rights or obligations that, by the express
terms hereof, survive any termination of this Agreement and (2) that Purchaser
shall have the right to seek monetary damages from Seller for any
representations and warranties breached by them as a result of their actions or
inactions, including, but not limited to, Purchaser's out-of-pocket costs and
expenses in connection with the negotiation of this Agreement and all due
diligence and investigations in connection therewith ("Costs"); or (iii) if the
change is as a result of Seller's action or inaction, then Purchaser may treat
such change as a Seller default and the Closing may, at Purchaser's option, be
postponed to permit Purchaser to pursue its rights against Seller as provided in
Paragraph 17 hereof. In addition, with respect to any representation or
warranty made to Seller's knowledge, if Seller does not have knowledge that such
representation or warranty is false, and if the factual underpinning of any such
representation or warranty changes, regardless of Seller's knowledge, Purchaser
shall also have the right to terminate this Agreement by notice to Seller on or
prior to Closing, Escrow Agent shall return the Earnest Money to Purchase and no
party shall have liability to the other except for those expressly stated herein
to survive termination of this Agreement.
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10. SELLER'S ADDITIONAL COVENANTS. Seller hereby covenants and
agrees that from and after the date hereof until the Closing, Seller shall not,
without the prior written consent of Purchaser, change or alter the physical
condition of the Property, remove or alter any Improvements, or remove any
trees, or grant or otherwise create or consent to the creation of any easement,
restriction, lien, assessment, or encumbrance affecting the Property or any
portion or portions thereof; PROVIDED, HOWEVER, the lessee under the Lease may
make such alterations in the ordinary course of business as are permitted under
the Lease including, without limitation, painting the Building. Seller
covenants that, from the date of this Agreement up to and including the date of
Closing, Seller shall not negotiate with any third party respecting the sale of
the Property or any interest therein. Seller shall keep all insurance policies
regarding the Property in full force and effect until Closing. Seller shall pay
and perform all obligations under the Note and Deed of Trust until Closing.
11. CLOSING. Provided that all of the conditions set forth in this
Agreement are theretofore fully satisfied or performed, it being fully
understood and agreed, however, that Purchaser may waive expressly and in
writing, at or prior to Closing, any conditions benefitting Purchaser that are
unsatisfied or unperformed at such time, the consummation of the sale by Seller
and purchase by Purchaser of the Property (herein referred to as the "Closing")
shall be held on the Closing Date as defined in the SPA, or at such specific
time and date as shall be mutually agreed upon by Seller and Purchaser.
12. SELLER'S CLOSING DOCUMENTS. For and in consideration of, and as
a condition precedent to Purchaser's delivery to Seller of the Purchase Price
described in Paragraph 3 hereof, Seller shall obtain or execute, at Seller's
expense, and deliver to Escrow Agent at Closing the following documents, all of
which shall be duly executed, acknowledged and notarized where required, in form
and substance reasonably satisfactory to Purchaser and Purchaser's legal
counsel, and shall survive the Closing:
(a) WARRANTY DEED. A Special [VERIFY] Warranty Deed conveying
the Property to Purchaser in the form required by the Title Company to
issue the Title Insurance Policy;
(b) QUIT CLAIM DEED. A quitclaim deed, if required by the terms
of Paragraph 7;
(c) PROPERTY VALUE AFFIDAVIT. An affidavit of property value as
required by law;
(d) SELLER'S CERTIFICATE. A certificate evidencing the
reaffirmation of the truth and accuracy of the Seller's representations and
warranties set forth in this Agreement;
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(e) AFFIDAVITS. Affidavits from Seller and/or the Trusts
comprising Seller required by the Title Company to enable it to issue the
Title Insurance Policy.
(f) FIRPTA CERTIFICATE. A FIRPTA Certificate from both Trusts
comprising Seller in the form set forth in EXHIBIT "F" attached hereto and
by this reference made a part hereof;
(g) EVIDENCE OF CORPORATE AUTHORITY. Evidence of authority as
may be required by the Title Company to issue the Title Insurance Policy;
(h) LEASE ASSIGNMENT. An executed and acknowledged Assignment,
Indemnity and Assumption of Lease Agreement whereby Seller's interest as
lessor under the Lease is assigned to Purchaser, Seller indemnifies
Purchaser against defaults by Seller under the Lease prior to Closing and
Purchaser assumes Seller's obligations under the Lease on and after
Closing;
(i) SETTLEMENT STATEMENT. A settlement statement setting forth
the amounts paid by or on behalf of and/or credited to each of Purchaser
and Seller pursuant to this Agreement; and
(j) OTHER DOCUMENTS. Such other documents as may be necessary
or appropriate to transfer and convey the Property to Purchaser and to
otherwise consummate this transaction in accordance with the terms of this
Agreement
13. BUYER'S CLOSING DOCUMENTS. On or before the Closing, Purchaser
shall deposit with Escrow Agent the following documents for delivery to Seller
at the Closing, each of which shall have been duly executed, and where
appropriate, acknowledged and shall be in form and substance reasonably
satisfactory to Seller and Seller's legal counsel:
(a) ASSUMPTION DOCUMENTS. All documents required by the Bank in
connection with assumption of the Note and Deed of Trust by Purchaser;
(b) PROPERTY VALUE AFFIDAVIT. An Affidavit of Property Value as
required by law;
(c) LEASE ASSIGNMENT. An executed and acknowledged Assignment,
Indemnity and Assumption of Lease Agreement whereby Purchaser assumes
Seller's interest as lessor under the Lease from and after Closing; and
(d) OTHER DOCUMENTS. Such other documents as may be necessary
or appropriate to consummate this transaction in accordance with the terms
of this Agreement.
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14. CLOSING COSTS.
(a) Upon the Closing, Seller agrees to pay one-half of the
escrow charges, the attorneys' fees of Seller, and cost of the Report and
the Amended Report and all other costs and expenses incurred by Seller in
connection with this transaction.
(b) Upon the Closing, Purchaser agrees to pay one-half of the
escrow charges, the entire cost of the owner's policy of title insurance
including the cost of any endorsements requested by Purchaser [VERIFY], the
attorneys' fees of Purchaser, and all other costs and expenses incurred by
Purchaser in connection with this transaction.
15. PRORATIONS. Ad valorem real property taxes and any assessments
[VERIFY] against the Property for the calendar year of Closing shall be prorated
as of the date of Closing based on the latest available information. If at
Closing actual real estate tax statements are not available, then following the
Closing and within thirty (30) days of receipt by either party of actual tax
statements, the parties shall reprorate real estate taxes and assessments
[VERIFY] among themselves and make any necessary adjusting payment. The terms
and provisions of this paragraph shall expressly survive the Closing and shall
not merge upon execution and delivery of the Special [VERIFY] Warranty Deed.
16. PURCHASER'S DEFAULT. Except with respect to Purchaser's
indemnity set forth in Paragraph 4 above, in the event of default by Purchaser
under the terms of this Agreement, Seller's sole and exclusive remedy shall be
to receive the Earnest Money as liquidated damages and thereafter the parties
hereto shall have no further rights or obligations hereunder whatsoever. It is
hereby agreed that Seller's damages will be difficult to ascertain and that the
Earnest Money then held by Escrow Agent constitutes a reasonable estimate
thereof and is intended not as a penalty, but as fully liquidated damages.
Seller agrees that in the event of a default by Purchaser, it shall not initiate
any proceeding to recover damages from Purchaser, but shall limit its recovery
to the retention of the Earnest Money.
17. SELLER'S DEFAULT. In the event of default by Seller under the
terms of this Agreement, at Purchaser's option: (i) Purchaser may terminate this
Agreement by written notice to Seller, whereupon the Earnest Money shall be
immediately returned by Escrow Agent to Purchaser, and Purchaser may sue for
damages including, but not limited to, all out-of-pocket costs and expenses
incurred by Purchaser in negotiating this Agreement and conducting its due
diligence hereunder, or (ii) Purchaser shall be entitled to pursue against
Seller any remedy granted to Purchaser at law or in equity, including, without
limitation, an action for specific performance of this Agreement against Seller.
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18. CONDEMNATION. If, prior to the Closing, all or any part of the
Property is subjected to a bona fide threat of condemnation by a body having the
power of eminent domain or is taken by eminent domain or condemnation (or sale
in lieu thereof), or if Seller has received notice that any condemnation action
or proceeding with respect to the Property is contemplated by a body having the
power of eminent domain, Seller shall give Purchaser immediate written notice of
such threatened or contemplated condemnation or of such taking or sale, and
Purchaser may by written notice to Seller given within ten (10) days after the
receipt of such notice from Seller, elect to cancel this Agreement. If
Purchaser chooses to cancel this Agreement in accordance with this Paragraph 18,
then the Earnest Money shall be returned immediately to Purchaser by Escrow
Agent and the rights, duties, obligations, and liabilities of the parties
hereunder, except for Purchaser's indemnity as set forth in Paragraph 4 above,
shall immediately terminate and be of no further force and effect. If Purchaser
does not elect to cancel this Agreement in accordance herewith, this Agreement
shall remain in full force and effect and the sale of the Property contemplated
by this Agreement, less any interest taken by eminent domain or condemnation, or
sale in lieu thereof, shall be effected with no further adjustment and without
reduction of the Purchase Price, and at the Closing, Seller shall assign,
transfer, and set over to Purchaser all of the right, title, and interest of
Seller in and to any awards that have been or that may thereafter be made for
such taking. At such time as all or a part of the Property is subjected to a
bona fide threat of condemnation and Purchaser shall not have elected to
terminate this Agreement as hereinabove provided, Purchaser shall be permitted
to participate in the proceedings as if Purchaser were a party to the action.
Seller shall not settle or agree to any award or payment pursuant to
condemnation, eminent domain, or sale in lieu thereof without obtaining
Purchaser's prior written consent thereto in each case.
19. DAMAGE OR DESTRUCTION. If at any time prior to Closing all or
any part of the Improvements be damaged or destroyed, from any cause whatsoever,
then Purchaser shall have the right to: (i) terminate this Agreement and receive
a full refund of the Earnest Money from Escrow Agent in which case this
Agreement shall be null and void and of no further force and effect; or (ii)
proceed to Closing and accept the Property in its condition with no decrease in
the Purchase Price, however, all insurance proceeds received on account of such
damage or destruction shall be paid to Purchaser upon receipt thereof. Seller
shall give immediate notice of any damage or destruction to the Property.
20. ASSIGNMENT. This Agreement and Purchaser's rights, duties, and
obligations hereunder may be delegated, transferred, and assigned by Purchaser
without the prior written consent of Seller.
21. NO BROKER. Purchaser and Seller hereby represent
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each to the other than they have not discussed this Agreement or the subject
matter thereof with any real estate broker, agent, or salesman, so as to create
any legal right in any such broker, agent, or salesman, to claim a real estate
commission, fee or other compensation with respect to the conveyance of the
Property contemplated by this Agreement. Seller hereby agrees to indemnify and
hold Purchaser harmless from and against any and all liability, loss, cost,
damage, and expense, including attorneys' fees and costs of litigation,
Purchaser shall ever suffer or incur because of any claim by any agent,
salesman, or broker, whether or not meritorious, for any fee, commission or
other compensation with regard to this Agreement or the sale and purchase of the
Property contemplated hereby, and arising out of any acts or agreements of
Seller. Likewise, Purchaser hereby agrees to indemnify and hold Seller free and
harmless from and against any and all liability, loss, cost, damage, and
expense, including attorneys' fees and costs of litigation, Seller shall ever
suffer or incur because of any claim by any agent, salesman, or broker, whether
or not meritorious, for any fee, commission or other compensation with respect
to this Agreement or the sale and purchase of the Property contemplated hereby
and arising out of the acts or agreements of Purchaser. This Paragraph 21 shall
survive the Closing or any termination of this Agreement.
22. NOTICES. Wherever any notice or other communication is required
or permitted hereunder, such notice or other communication shall be in writing
and shall be delivered by overnight courier (such as Airborne or Federal
Express) for next business day delivery, by hand delivery, or by U.S.
registered, or certified mail, return receipt requested, postage prepaid, to the
addresses set out below or at such other addresses as are specified by written
notice delivered in accordance herewith:
PURCHASER: United Auto Group, Inc.
375 Park Avenue
Suite 2201
New York, NY 10152
ATTN: George G. Lowrance, Esq.
with a copy to: Rogers & Hardin
2700 Cain Tower
299 Peachtree Street, NE
Atlanta, GA 30303
ATTN: Stephen R. Leeds, Esq.
SELLER: Steven Knappenberger, as Trustee
___________________________
___________________________
___________________________
Bruce Knappenberger, as Trustee
___________________________
___________________________
___________________________
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ESCROW AGENT: First American Title Insurance Company
111 West Monroe
Suite 202
Phoenix, Arizona 85003
ATTN: Carol Peterson, Escrow Officer
Telephone: 602/252-5941
Any notice or other communication as hereinabove provided shall be deemed
effectively given and received on the date of delivery, if delivered by hand, or
on the next business day following deposit with an overnight courier, or on the
third (3rd) business day following deposit in the U. S. mail.
23. POSSESSION. Full and exclusive possession of the Property,
subject to the Lease and the lessee's rights thereunder, shall be delivered by
Seller to Purchaser on the date of Closing.
24. TIME PERIODS. If the time period by which any right, option, or
election provided under this Agreement must be exercised, or by which any act
required hereunder must be performed, or by which the Closing must be held,
expires on a Saturday, Sunday, or holiday, then such time period shall be
automatically extended through the close of business on the next regularly
scheduled business day.
25. SURVIVAL OF PROVISIONS. All covenants, warranties, and
agreements set forth in this Agreement shall survive the execution or delivery
of any and all deeds and other documents at any time executed or delivered
under, pursuant to or by reason of this Agreement, and shall survive the payment
of all monies made under, pursuant to, or by reason of this Agreement.
26. SEVERABILITY. This Agreement is intended to be performed in
accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules and regulations. If any provision of this Agreement, or the
application thereof to any person or circumstance, shall, for any reason and to
any extent be invalid or unenforceable, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby but rather shall be enforced to the greatest extent permitted
by law.
27. GENERAL PROVISIONS. No failure of either party to exercise any
power given hereunder or to insist upon strict compliance with any obligation
specified herein, and no custom or practice at variance with the terms hereof,
shall constitute a waiver of either party's right to demand exact compliance
with the terms hereof. This Agreement contains the entire agreement of the
parties hereto, and no representations, inducements, promises, or agreements,
oral or otherwise, between the parties not embodied herein shall be of any force
or effect. Any amendment to this Agreement shall not be binding upon Seller or
Purchaser unless such amendment is in writing and executed by both Seller and
Purchaser. The provisions of this Agreement
16
shall inure to the benefit of and be binding upon the parties hereto and their
respective heirs, legal representatives, successors, and assigns. Time is of
the essence in this Agreement. This Agreement may be executed in multiple
counterparts, each of which shall constitute an original, but all of which taken
together shall constitute one and the same agreement. The headings inserted at
the beginning of each paragraph are for convenience only, and do not add to or
subtract from the meaning of the contents of each paragraph. This Agreement
shall be construed and interpreted under the laws of the State of Arizona.
Except as otherwise provided herein, all rights, powers, and privileges
conferred hereunder upon the parties shall be cumulative but not restrictive to
those given by law. All personal pronouns used in this Agreement, whether used
in the masculine, feminine, or neuter gender shall include all genders, and all
references herein to the singular shall include the plural and vice versa.
28. EFFECTIVE DATE. The "effective date" of this Agreement shall be
deemed to be the date this Agreement is fully executed by both Purchaser and
Seller and a fully executed original counterpart of this Agreement has been
received by both Purchaser and Seller.
29. GENERAL STREAM ADJUDICATION. Purchaser acknowledges that
Purchaser is aware that there is pending in Maricopa County Superior Court a
general stream adjudication of all rights to use water in and from the Lower
Gila River system and source and that such adjudication may involve rights to
use water on and from the Property. [VERIFY]
30. FORM 1099-B. Escrow Agent is hereby authorized and instructed to
file with the U.S. Internal Revenue Service Form 1099-B, Proceeds From Real
Estate, Broker, and Barter Exchange Transactions, as required by Section 6045(e)
of the Internal Revenue Code of 1986.
31. SECTION 1031 EXCHANGE. This Agreement is intended to constitute
an Exchange Escrow and these provisions shall control the agreement of the
parties. Either or both entities comprising the Seller may elect to exchange
the Property for other property of like kind in order to qualify such exchange
under Section 1031 of the Internal Revenue Code. The exchange of the Property
may be handled in accordance with one or more of the following provisions, at
Seller's election, but subject in any event to the requirement that no such
exchange shall delay the Closing and in no event shall Purchaser be obligated to
take title to any property other than the Property:
(a) SIMULTANEOUS EXCHANGE WITH THIRD-PARTY PARTICIPATION.
Seller may exchange the Property for other property so long as the party or
parties acquiring the Property are obligated to sell the Property to
Purchaser at the purchase price and on the terms and conditions set forth
in this Agreement and that such conveyance is not a default
17
under the Note and/or Deed of Trust. The close of any such exchange escrow
shall be contingent upon the contemporaneous closing of the escrow provided
for herein. In the event Seller does not effect such an exchange at the
time set for the closing of this escrow, Seller than agrees to sell, and
Purchaser agrees to buy, the Property at the purchase price and upon the
terms and conditions set forth in this Agreement.
(b) EXCHANGE WITH INTERMEDIARY. Seller may, prior to the close
of escrow, assign this Agreement to an intermediary of Seller's sole and
absolute choice (including all rights of Seller and subject to all
conditions and obligations of Seller hereunder). Notwithstanding such
assignment, Seller, or Seller's assignee, shall convey the Property
directly to Purchaser at close of escrow pursuant to this Agreement.
(c) PURCHASER COOPERATION. Purchaser agrees to cooperate fully
with Seller and Seller's intermediary, if applicable, in facilitating and
accomplishing the 1031 exchange contemplated herein.
(d) NO FINANCIAL OBLIGATION OF PURCHASER. Purchaser shall have
no liability or obligation whatsoever for any additional costs or expenses,
including attorneys' fees, which may be incurred by virtue of the exchange
transactions contemplated by this Paragraph 31.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective seals to be affixed hereunto as of the day,
month and year first above written.
SELLER:
STEVEN KNAPPENBERGER, as Trustee of
the Steven Knappenberger Revocable
Trust II
/s/ Steven Knappenberger
-----------------------------------
STEVEN KNAPPENBERGER, as Trustee as
aforesaid
BRUCE KNAPPENBERGER, as Trustee of
the Bruce Knappenberger Revocable
Trust
/s/ Bruce Knappenberger
-----------------------------------
BRUCE KNAPPENBERGER, as Trustee as
aforesaid
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PURCHASER:
UAG WEST, INC., a Delaware
corporation
By: /s/ illegible
--------------------------
Its:
-------------------------
Date: Attest:
------------------- ----------------------
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