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CONTRACT OF SALE
by and between
THE STROH COMPANIES, INC.,
as Seller
and
COPART, INC.,
as Purchaser
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Dated as of March __, 1996
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Property:
7521 Woodman Avenue
Van Nuys, CA
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TABLE OF CONTENTS
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SECTION PAGE
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1. Property ....................................................... 1
2. Purchase Price and Escrow Provisions ........................... 1
3. Condition of Property; Title ................................... 4
4. Time and Place of Closing; Contingency Period; Loan Documents .. 4
5. Conditions to Closing .......................................... 9
6. Seller's Representations and Agreements ........................ 13
7. Purchaser's Representations and Agreements ..................... 16
8. Apportionments ................................................. 19
9. Closing Matters ................................................ 22
10. Title Examination; Survey ...................................... 23
11. Risk of Loss ................................................... 25
12. Brokerage ...................................................... 27
13. Remedies ....................................................... 27
14. Notices ........................................................ 29
15. Choice of Law .................................................. 30
16. Miscellaneous .................................................. 30
EXHIBITS
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A: Legal Description of Land (Section 1)
B: Personal Property (Section 1)
C: Deed (Section 5)
D: Leases and Security Deposits (Section 5(a)(i)(3))
E: Certificates, Licenses and Permits (Section 5(a)(i)(7))
F: Dlilgence Materials
G: California Escrow Provisions (Section 2(c))
H: Bill of Sale (Section 5(a)(i)(2))
I: Assignment and Assumption of Leases, Security Deposits and Prepaid Rents
(Section 5(a)(i)(3))
J: General Assignment and Assumption (Section 5(a)(i)(4))
K: [Intentionally Omitted]
L: Tenant Letter Form (Section 5(a)(i)(11))
M: FIRPTA Affidavit (Section 6(a)(iv))
N: Form of Tenant Estoppel Certificate (Section 5(a)(i)(12))
O: Service Contracts (Section 6(a)(viii))
P: Environmental Disclosure (Section 6(a)(x))
CONTRACT OF SALE
AGREEMENT, made as of March ___, 1996, by and between THE STROH
COMPANIES, INC., a Delaware corporation having an office at 100 River Place,
Detroit, MI 48207-4291 ("SELLER"), and COPART, INC., a California corporation
having an office at 5500 E. Second Street, Second Floor, Benicia, CA 94510
("PURCHASER").
W I T N E S S E T H:
In consideration of the mutual covenants and provisions herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby covenant and
agree as follows:
1. PROPERTY. Seller hereby agrees to sell and Purchaser
hereby agrees to purchase, upon the terms and conditions set forth in this
Agreement, the property (the "PROPERTY") consisting of (a) all those certain
plots, pieces or parcels of land located in the City of Los Angeles, of
County of Los Angeles, State of California, and having a street address at
7521 Woodman Avenue, Van Nuys, CA, and more particularly described in Exhibit
A hereto (the "LAND"), (b) all buildings and all other structures, facilities
or improvements presently located or hereinafter located in or on the Land
(the "IMPROVEMENTS"), (c) all fixtures, machinery, systems, equipment and
items of personal property owned by Seller attached or appurtenant to,
located on and used in connection with the ownership, use, operation or
maintenance of the Land or the Improvements, including, without being
limited. to, the personal property set forth in Exhibit B hereto
(collectively, the "Personal Property") (d) all strips, gores, easements,
privileges, licenses, permits, approvals, authorizations, rights and
appurtenances relating to any of the foregoing, and (e) all of Seller's
right, title and interest in any sewer facility credits relating to the Land
and the Improvements.
2. PURCHASE PRICE AND ESCROW PROVISIONS. (a) The purchase
price for the Property is TEN MILLION FIVE HUNDRED THOUSAND DOLLARS
($10,500,000.00) (the "PURCHASE PRICE").
(b) The Purchase Price shall be payable as follows:
(i) Within three (3) business days after the execution and
delivery of this Agreement, Purchaser shall pay ONE HUNDRED THOUSAND
DOLLARS ($100,000.00) (the "DOWNPAYMENT"), by check delivered and
deposited as provided in Section 2(c) below, subject to collection,
payable to the order of Escrow Agent (as defined in Section 2(c)
below), or wire transfer of same day funds to Escrow Agent's account in
accordance with Escrow Agent's written wiring instructions. The
Downpayment shall be held in accordance with Sections 2(c) and (e)
hereof, and shall only be refundable to Purchaser (a) until the
expiration of the Contingency Period (as
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hereinafter defined), in accordance with Sections 4(c)(i) and 4(c)(ii)
hereof and (b) from and after the expiration of the Contingency Period,
if the Closing (as hereinafter defined) does not occur for any reason
other than default by Purchaser, in accordance with Section 13(c)(i).
On the Closing Date, the Downpayment and all interest earned thereon
shall be credited against the Purchase Price.
(ii) At least one (1) business day prior to the Closing Date (as
hereinafter defined), Purchaser shall execute and deliver to Escrow
Agent the following (the "LOAN DOCUMENTS"), which shall be in the form
agreed upon pursuant to Section 4(g) hereof: (a) a purchase money
note in the amount of $7,500,000.00 (the "PURCHASE LOAN") payable to
the order of Seller (the "NOTE"); (b) a purchase money deed of trust,
security agreement and financing statement securing the Note and
creating a first priority lien on the Property subject only to the
Permitted Title Exceptions (as hereinafter defined) (the "DEED OF
TRUST"); (c) an assignment of rents and leases securing the Note and
granting a present, absolute assignment to Seller of all rents derived
from leases affecting the Property (the "ASSIGNMENT OF RENTS AND
LEASES"); (d) an environmental indemnity from Copart, Inc. and (e) a
UCC financing statement for the Personal Property.
(iii) At least one (1) business day prior to the Closing Date, an
amount, subject to adjustment or withholding pursuant to the terms of
this Agreement, equal to the balance of the Purchase Price (I.E., the
Purchase Price less the sum of (a) the Downpayment and all interest
thereon and (b) $7,500,000.00) shall be paid by wire transfer of
immediately available funds to Escrow Agent's account in accordance
with Escrow Agent's written instructions.
(c) Within three (3) business days after the execution of this
Agreement by Seller and Purchaser, Seller and Purchaser shall open escrow
("ESCROW") with Continental Lawyers Title Company at its offices at 800 East
Colorado Boulevard, Pasadena, CA ("ESCROW AGENT"), by depositing with Escrow
Agent an executed copy of this Agreement and by Purchaser depositing with the
Escrow Agent the Downpayment. Failure by Purchaser to timely deposit the
Downpayment shall result in the automatic termination of this Agreement and
Escrow. The terms of this Agreement, together with Escrow Agent's standard
general instructions, shall be the instructions to Escrow Agent with respect
to the purchase of the Property. The terms of this Agreement shall control
over any inconsistent provisions of Escrow Agent's standard general
instructions, which instructions shall be executed by the parties hereto
following the receipt thereof.
(d) Escrow and title insurance costs, fees and expenses shall be
paid in accordance with Section 9(a) hereof.
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(e) Escrow Agent shall invest and deliver the Downpayment in
accordance with the provisions set forth on the attached Exhibit G.
(f) Prior to the Closing the parties shall deposit the following
items with Escrow Agent:
(i) Seller shall deposit:
(a) the Deed;
(b) the Bill of Sale, the Lease Assignment, the General
Assignment, the California Form 590-RE, and the FIRPTA Affidavit;
and
(c) any other documents to be delivered by Seller and to be
recorded at Closing.
(ii) Purchaser shall deposit:
(a) the Loan Documents;
(b) the Lease Assignment and the General Assignment; and
(c) the balance of the Purchase Price for the Property.
(g) Upon receipt by Escrow Agent of confirmation from each of
Seller and Purchaser that all of the conditions set forth in Section 5 have
been satisfied, Escrow Agent is hereby instructed to take the following
action:
(i) record the Deed (with documentary transfer taxes affixed
after recordation), the Deed of Trust and the Assignment of Rents and
Leases and file with the Secretary of State of California the UCC
financing statement for the Personal Property;
(ii) deliver and disburse to Seller (a) the Note and the balance
of the Purchase Price and all other amounts, subject to adjustment or
withholding pursuant to the terms of this Agreement, and (b) the Deed
of Trust, the Assignment of Rents and Leases and the UCC financing
statements, as recorded or filed, as applicable (to the extent the
foregoing documents are returned to Escrow Agent by the recorder's
office following the recording or filing thereof);
(iii) deliver and disburse to Purchaser the Bill of Sale, the
Lease Assignment, the General Assignment and the FIRPTA Affidavit and
the balance of funds, if any, after the disbursements provided for in
clause (ii) above; and
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(iv) cause the Title Company to issue the owner's and
mortgagee's title policies to Purchaser and Seller, respectively.
3. CONDITION OF PROPERTY; TITLE. (a) Purchaser agrees to
purchase the Property in its present "as is" condition, including, without
limitation, the presence of any asbestos or asbestos containing materials or
other Hazardous Materials (as hereinafter defined), subject to reasonable
use, wear, tear and natural deterioration of the Property between the date
hereof and the Closing Date and except as otherwise expressly provided
herein. Except as set forth in this Agreement and the Exhibits hereto,
Seller has not made any representations as to the physical condition or any
other matter or thing affecting or related to the Property.
(b) Purchaser shall accept title to the Property subject to the
matters agreed upon by the parties on or prior to the Contingency Date
pursuant to Section 10. If Seller shall so request, Purchaser will allow
Escrow Agent, upon the Closing, to pay from the cash balance of the Purchase
Price due Seller as much thereof as may be necessary to satisfy any lien(s)
or encumbrance(s) which Seller is obligated or elects to cure hereunder,
provided the Title Company agrees to remove such liens and encumbrances from
the Title Policy.
4. TIME AND PLACE OF CLOSING; CONTINGENCY PERIOD; LOAN
DOCUMENTS. (a) CLOSING. The closing of the transactions contemplated hereby
(the "CLOSING") shall take place at 8:00 a.m. on May 31, 1996 (the "AGREED
DATE") at the offices of Escrow Agent at 800 East Colorado Boulevard,
Pasadena, California, or at such other place or time as Seller and Purchaser
may mutually agree. Subject to Seller's right to adjourn the Closing
pursuant to Section 10(c)(iii) hereof, TIME IS OF THE ESSENCE for the parties
to consummate the Closing on or prior to the Agreed Date. The term "CLOSING
DATE", as used in this Agreement, shall mean the date when the Deed has been
duly delivered, accepted and recorded.
(b) PRE-CLOSING. Prior to the Agreed Date, the parties shall
cooperate with each other to (i) examine and approve, to the extent
practicable, all of Seller's Closing Documents and all of Purchaser's Closing
Documents (as defined in Section 5 hereof), (ii) agree, to the extent
practicable, upon the apportionments pursuant to Section 8 hereof and (iii)
settle such other matters as are customarily determined in advance of closing.
(c) PURCHASER'S TERMINATION RIGHT. (i) Purchaser shall have
the right, in its sole and absolute discretion, to terminate this Agreement
upon written notice to Seller and Escrow Agent at any time prior to 5:00 p.m.
(Los Angeles time) on May 15, 1996 (the "CONTINGENCY DATE"). TIME IS OF THE
ESSENCE as to receipt of notice of termination on or prior to Contingency
Date. In the event that Purchaser shall have not given Seller and Escrow
Agent such notice on or prior to the Contingency Date, Purchaser shall be
deemed to have waived its right to terminate under this Section 4(c)(i). The
period from the date hereof through the Contingency Date is herein referred
to as the "CONTINGENCY PERIOD".
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(ii) Upon termination of this Agreement pursuant to the Section
4(c)(i) (or Sections 4(g) or 10(c)(ii), as applicable), Purchaser shall be
entitled to the Downpayment and all interest earned thereon and the parties
shall jointly instruct Escrow Agent to promptly return the Downpayment,
together with interest earned thereon, to Purchaser. Upon such return, this
Agreement shall be deemed terminated, and neither party shall have any
further liability or obligation to the other hereunder, except for such
liabilities and obligations as are specifically stated to survive the
termination of this Agreement (and the obligation contained in the following
sentence). If this Agreement is so terminated, Purchaser shall, within five
(5) days following such termination, deliver to Seller copies of all
engineering, environmental and other physical due diligence reports prepared
for Purchaser by Purchaser's third-party consultants (excluding proprietary
matters and without representation or warranty and subject to other
limitations on which such due diligence reports were prepared ) and return to
Seller all of the items delivered to Purchaser pursuant to Section 4(d).
(d) DUE DILIGENCE ITEMS. Purchaser acknowledges receipt of the
following:
(i) a copy of the soils reports, engineering studies, grading
plans, topographical maps and seismic tests, studies, reports or
analyses relating to the Property described on Exhibit "F" hereto;
(ii) copies of the real property tax bills for the Property for
the 1993-1994, 1994-1995 and 1995-1996 tax years;
(iii) a copy of the reports, correspondence, test results and
recommendations relating to the Property described on Exhibit "F"
hereto;
(iv) the description on Exhibit "F" hereto of (a) all pending
causes, claims, proceedings or legal actions instituted against Seller
with respect to the Property, and (b) to Seller's actual knowledge, all
causes, claims, proceedings or legal actions threatened against Seller
with respect to the Property;
(v) complete copies of all of (a) the Leases (as defined in
Section 5(a)(i)(3) hereof) and (b) the Permits (as defined in Section
5(a)(i)(7) hereof);
(vi) the list set forth on Exhibit "F" hereof of all tangible
personal property owned or leased by Seller as of the date hereof which
is included in the sale, which property is attached or appurtenant to,
located on and used in connection with the Land and the Improvements;
(vii) the list set forth on Exhibit "F" hereof, and complete
copies, of certificates of insurance evidencing the insurance policies
currently maintained by
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Seller with respect to the Property, and the list set forth on Exhibit
"F" hereof, and complete copies of, all claims and settlements made
within the last three (3) years; and
(viii) the list set forth on Exhibit "F" hereof of all building
plans and specifications for the Improvements in Seller's possession or
reasonably available to Seller (the "PLANS AND SPECIFICATIONS").
(e) INSPECTION. During the Contingency Period and thereafter so
long as this Agreement has not been terminated, upon reasonable prior notice
to Seller, Purchaser shall have reasonable access during normal business
hours to all of Seller's tenant files for the Property and to all of Seller's
other books and records and files relating to the Property that are not
confidential in nature and to the Plans and Specifications, and Purchaser
shall have the right to communicate directly with any private,
quasi-governmental or governmental authority or entity regarding the
Property, including, without limitation, any party that performed work for or
on behalf of Seller (and Seller shall authorize such parties to communicate
with Purchaser); PROVIDED, HOWEVER, to the extent Seller's books and records
relating to the Property are intermingled with books and records pertaining
to other property of Seller, Seller shall provide Purchaser with copies of
such books and records appropriately redacted; PROVIDED, FURTHER, HOWEVER,
Purchaser shall not be entitled to communicate or otherwise meet with any of
the Tenants unless a representative of Seller is present (and Seller hereby
agrees to make itself or its representative reasonably available for such a
meeting). In addition, Purchaser shall have the right to inspect the
physical condition of the Property at Purchaser's sole cost and expense at
reasonable times during the Contingency Period in accordance with the
following:
(i) Purchaser shall have the right to commence its physical
inspection of the Property after Seller's receipt of written evidence
that Purchaser has procured the insurance required by Section
4(e)(iii). Purchaser's physical inspection of the Property shall be
conducted at times that are reasonably and mutually acceptable to
Purchaser, Seller and any Tenants (as defined in Section 5(a)(i)(3)
hereof). Such inspection shall be conducted in a manner that does not
unreasonably disturb the Tenants and other occupants of the Property
and their use thereof and Purchaser and Purchaser's agents shall
perform inspections only while accompanied by one or more
representatives of Seller (and Seller hereby agrees to make itself or
its representatives reasonably available for such inspections). Upon
completion of its inspection, tests or surveys, Purchaser shall
restore the Property to its condition prior to such inspection, tests
or surveys. No borings may be conducted except upon the prior written
approval of Seller, in its good faith discretion and taking into
account the rights of the Tenants and other occupants of the Property.
(ii) Purchaser agrees that Purchaser shall, effective upon the
expiration of the Contingency Period, be deemed to have represented and
warranted that (a) Purchaser
7
has conducted such tests, surveys and inspections, and made such
boring, percolation, geologic, environmental and soils tests and other
studies of the Property, and (b) Seller has provided Purchaser with
adequate opportunity to make such inspection of the Property
(including, an inspection for zoning, land use, environmental and other
laws, regulations and restrictions), in each case, as Purchaser has, in
Purchaser's discretion, deemed necessary or advisable as a condition
precedent to Purchaser's purchase of the Property and to determine the
physical, environmental and land use characteristics of the Property
(including without limitation, its subsurface) and its suitability for
Purchaser's intended use.
(iii) Purchaser shall obtain at Purchaser's sole cost and
expense, prior to commencement of any investigative activities on the
Property, a policy of commercial general liability insurance covering
any and all liability of Purchaser and Seller with respect or arising
out of any investigative activities or other activities while on the
Property. Such policy of insurance shall be kept and maintained in
force during the term of this Agreement and shall cover claims arising
as a result of the acts of Purchaser, Purchaser's employees, agents,
contractors, suppliers, consultants or other related parties during the
term of this Agreement in respect of such activities. Such policy of
insurance shall have liability limits of not less than $1,000,000.00
combined single limit per occurrence for bodily injury, personal injury
or property damage liability, and shall (a) include general liability
insurance covering all liability of Purchaser, Purchaser's employees,
agents, contractors, suppliers, consultants or other related parties
with respect to any investigative activities on the Property, extended
coverage and coverage for contractual liability (limited to bodily
injury and/or property damage and including the matters set forth in
Section 4(e)(iv)), owner's protective liability, independent
contractor's liability and completed operations liability, (b) be in
form and substance and issued by an insurance company reasonably
satisfactory to Seller, and (c) name Seller as an additional insured.
Purchaser agrees that if said aggregate limit applied to the Property
is reduced by the payment of a claim or the establishment of a reserve,
Purchaser shall take all practical immediate action to have the
aggregate limit restored by endorsement to the existing policy or the
purchase of an additional insurance policy complying with these
requirements. Upon request from time to time Purchaser shall provide
Seller with information regarding the insurance covering the Property.
(iv) Purchaser shall indemnify Seller from and against all
liability to persons or in respect of property resulting from
Purchaser's inspection and testing of the Property (including, without
limitation, repairing any and all damages to any portion of the
Property and restoring the Property to its condition prior to any
inspection, test or survey), arising out of or related to Purchaser's
conducting such inspections, surveys, tests, and studies, except to the
extent such liability arises from Seller's acts, if any, in conducting
such inspections, surveys, tests, and studies with Purchaser. The
8
foregoing indemnification shall not include any liability to Seller
arising from the results or information derived from any such
inspections, surveys, tests, and studies. Purchaser shall keep the
Property free and clear of mechanic's liens or materialmen's liens
related to Purchaser's right of inspection and the activities
contemplated by Section 4(e). Purchaser's indemnification obligations
set forth herein shall survive the Closing and shall survive the
termination of this Agreement and Escrow.
(f) RELEASE. Purchaser irrevocably and unconditionally waives
and releases Purchaser's right (if any) to recover from Seller and its
directors, officers, employees, representatives and agents, any and all
damages, losses, liabilities, costs or expenses whatsoever, and claims
therefor, whether direct or indirect, known or unknown, or foreseen or
unforeseen, which may arise from or be related to the presence, existence,
use, generation, release, discharge, storage, disposal or transportation of
any asbestos or asbestos-containing materials located on the Property to the
extent disclosed by Seller in writing, known by Purchaser or disclosed by any
written material obtained by Purchaser in connection with Purchaser's due
diligence on or prior to the Closing Date. Purchaser hereby agrees,
represents and warrants that Purchaser realizes and acknowledges that factual
matters now unknown to it and Seller may have given or may hereafter give
rise to causes of action, claims, demands, debts, controversies, damages,
costs, losses and expenses which are presently unknown, unanticipated and
unsuspected, and Purchaser further agrees, represents and warrants that the
waivers and releases herein have been negotiated and agreed upon in light of
that realization and that Purchaser nevertheless hereby intends, and by
consummating the transactions contemplated hereby shall be deemed
affirmatively, to release, discharge and acquit Seller from any such Released
Claims. Purchaser expressly waives the benefits of Section 1542 of the
California Civil Code, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THE CREDITOR DOES NOT KNOW
TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN TO HIM MUST HAVE MATERIALLY AFFECTED THE SETTLEMENT WITH THE
DEBTOR.
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SELLER'S PURCHASER'S
INITIALS INITIALS
The provisions of this Section 4(f) shall survive the Closing.
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(g) LOAN DOCUMENTS. The parties shall endeavor to agree upon
and finalize prior to May 8, 1996 the form of the Loan Documents. If the
form of the Loan Documents is not finalized by such date for any reason, then
from and after such date, either party may terminate this Agreement upon
written notice to the other and Escrow Agent at any time prior to the Loan
Documents being finalized. Upon termination of this Agreement pursuant to
the preceding sentence, the provisions of Section 4(c)(ii) shall apply.
5. CONDITIONS TO CLOSING. (a) PURCHASER'S CONDITIONS.
Purchaser's obligation to pay the Purchase Price, to accept title to the
Property and otherwise to consummate the transactions contemplated hereby
shall be subject to the satisfaction of the following conditions precedent on
and as of the Closing Date:
(i) Seller shall deliver to Purchaser (and to Escrow Agent, to
the extent required pursuant to Section 2(f) hereof) on or before the
Closing Date the following ("SELLER'S CLOSING DOCUMENTS"):
(1) a Grant Deed (the "DEED") in the form annexed hereto
as Exhibit C, for recording, duly executed and acknowledged by
Seller, sufficient to convey to Purchaser fee simple title to the
Property (to the extent that the same shall consist of real
property) free of all liens and encumbrances other than the
Permitted Title Exceptions;
(2) a bill of sale, in substantially the form annexed
hereto as Exhibit H (the "BILL OF SALE"), duly executed and
acknowledged by Seller;
(3) an assignment by Seller and assumption by Purchaser,
in substantially the form annexed hereto as Exhibit I (the "LEASE
ASSIGNMENT"), duly executed and acknowledged by Seller and by
Purchaser, of all of Seller's obligations, right, title and
interest in, to and under the leases and the amendments,
extensions, modifications and supplements thereto set forth on
Exhibit D hereto, as updated to the Closing Date (the "LEASES"),
and of all security deposits and prepaid rents made by the
tenants or any other persons having rights under the Leases (the
"TENANTS"); PROVIDED, HOWEVER, the Lease Assignment shall not
include the Copart Leases;
(4) an assignment by Seller and assumption by Purchaser,
in substantially the form annexed hereto as Exhibit J (the
"GENERAL ASSIGNMENT"), duly executed and acknowledged by Seller
and by Purchaser, of all of Seller's obligations, right, title
and interest in, to and under the Permits (as defined in Section
5(a)(i)(7) hereof), the Service Contracts and the sewer facility
credits;
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(5) a certificate of a duly authorized officer of Seller
to the effect that the warranties and representations of Seller
set forth in this Agreement are true and complete in all material
respects on and as of the Closing Date (which certificate shall
be subject to the survival limitations applicable to the
representations and warranties contained in Section 6) ("SELLER'S
REPRESENTATIONS CERTIFICATE");
(6) original, fully executed, complete copies of all
Leases other than the Copart Leases (or, if any such original
copy is unavailable, a duplicate copy thereof, certified by
Seller as accurate, complete and identical to original thereof);
(7) to the extent the same are in Seller's possession, the
originals (or, if any such original copy is unavailable, a
duplicate copy thereof, certified by Seller as accurate, complete
and identical to original thereof) of the certificates, licenses
and permits for the Property (including all amendments,
modifications, supplements and extensions thereof) listed in
Exhibit E hereto (the "PERMITS"), except to the extent the same
are required to be and are affixed at the Property;
(8) to the extent the same are in Seller's possession, a
complete set of keys for the Property, each marked to indicate
its purpose;
(9) a letter by Seller and Purchaser to the Tenants in the
form annexed hereto as Exhibit L informing them of the change in
ownership of the Property;
(10) the Foreign Investment in Real Property Tax Act
affidavit required by Section 6(a)(iv) hereof;
(11) a completed California Form 590-RE;
(12) estoppel letters from each of the Tenants under the
SMSA Lease and the Moving Lease (each as defined in Exhibit D)
dated within thirty (30) days prior to the Closing Date and
substantially in the form annexed hereto as Exhibit K hereto;
PROVIDED, HOWEVER, an estoppel letter from the Tenant under the
Moving Lease shall satisfy the conditions hereof notwithstanding
the inclusion within such estoppel letter of a qualification to
the effect that such Tenant is entitled to a rent abatement for
the period from January 1, 1997 to March 31, 1997. With respect
to each such estoppel letter received by Purchaser, upon the
earlier of the Closing Date or five (5) business days after
Purchaser's receipt of such estoppel letter, Purchaser shall
notify Seller in writing whether Purchaser accepts such estoppel
letter or rejects such estoppel
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letter on the grounds that such estoppel letter, in Purchaser's
opinion, fails to satisfy the conditions set forth in this
Section 5(a)(i)(12). Purchaser's failure to timely notify Seller
of its acceptance or rejection of any such estoppel letter shall
be deemed to be an acceptance of such estoppel letter. If
Purchaser rejects any estoppel letter and Seller agrees that such
estoppel letter fails to satisfy the conditions set forth in this
Section 5(a)(i)(12), then this Agreement shall terminate upon
notice from Seller to Purchaser, and upon such termination
neither party shall have any liability to the other hereunder,
except that Seller shall be obligated to instruct Escrow Agent to
return to Purchaser the Downpayment and any interest thereon),
and except for such liabilities and obligations as are
specifically stated to survive the termination of this Agreement;
(13) a certificate from the Secretary or an Assistant
Secretary of Seller with respect to the due authorization of
Seller to enter in this Agreement and consummate the transactions
contemplated hereby; and
(14) such additional documentation as reasonably necessary
or desirable in connection with the transactions contemplated by
this Agreement.
(ii) Purchaser shall receive from Continental Lawyers Title
Company (the "TITLE COMPANY"), a current ALTA Form B owner's form of
title insurance policy in the form agreed to pursuant to Section 10(b)
hereof, or an irrevocable and unconditional binder to issue the same,
in an amount equal to the Purchase Price, dated, or updated to, the
Closing Date, insuring, at its ordinary premium rates (including,
without limitation, normal fees for upgrades, endorsements and
affirmative insurance requested by Purchaser), Purchaser's title to the
Property subject only to the Permitted Title Exceptions (as hereinafter
defined).
(iii) [Intentionally Omitted]
(iv) Subject to Section 6(e) hereof, the representations and
warranties of Seller contained in this Agreement shall be true and
complete in all material respects at and as of the Closing Date as if
such representations and warranties were made at and as of the Closing
Date.
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(b) SELLER'S CONDITIONS. Seller's obligation to deliver title
to the Property and to otherwise consummate the transactions contemplated
hereby shall be subject to compliance by Purchaser with the following
conditions precedent on and as of the Closing Date:
(i) Purchaser shall deliver to Escrow Agent, in accordance with
Section 2(b)(iii) hereof, the balance of the Purchase Price due
pursuant to Section 2(b) hereof and such other amounts as are due
Seller hereunder, subject to adjustment of such amount pursuant to
Section 8 hereof.
(ii) Purchaser shall deliver to Seller (and to Escrow Agent, to
the extent required pursuant to Section 2(f) hereof, with an original
to Seller) on or before the Closing Date the following, each of which
shall be in form and substance satisfactory to Seller ("PURCHASER'S
CLOSING DOCUMENTS"):
(1) a certificate of a duly authorized Secretary of
Purchaser to the effect that the warranties and representations
of Purchaser set forth in this Agreement are true and complete in
all material respects on and as of the Closing Date;
(2) duly executed and acknowledged counterparts of the
Lease Assignment and the General Assignment;
(3) a receipt for the security deposits transferred to
Purchaser;
(4) appropriate transfer tax returns of Purchaser, if
applicable;
(5) the Loan Documents, duly executed, and where
appropriate, acknowledged by Purchaser and in appropriate form
for recording; and
(6) such additional documentation as reasonably necessary
or desirable in connection with the transactions contemplated by
this Agreement.
(iii) The representations and warranties of Purchaser contained
in this Agreement shall be true and complete in all material respects
at and as of the Closing Date as if such representations and warranties
were made at and as of the Closing Date.
(iv) Seller shall receive from the Title Company, a current ALTA
mortgagee's form of title insurance policy, or an irrevocable and
unconditional binder to issue the same, in an amount equal to the
principal amount of the Note, dated, or updated to, the Closing Date,
insuring, or committing to insure, at its ordinary premium rates, that
13
the Deed of Trust creates a first priority lien on the Property subject
only to the Permitted Title Exceptions (as hereinafter defined).
(c) CONDITIONS GENERALLY. The foregoing conditions are for the
benefit only of the party for whom they are specified to be conditions
precedent and such party may, in its sole discretion, waive any or all of
such conditions and close title under this Agreement without any increase in,
abatement of or credit against the Purchase Price.
6. SELLER'S REPRESENTATIONS AND AGREEMENTS.
(a) REPRESENTATIONS. Seller represents and warrants to
Purchaser as follows:
(i) Seller is a corporation that has been duly organized and is
validly existing in good standing under the laws of the State of
Delaware and is qualified to do business in and is in good standing
under the laws of the State of California.
(ii) Seller has full power and right to enter into and perform
its obligations under this Agreement and the other agreements
contemplated herein to be executed and performed by it, including,
without being limited to, conveying the Property as herein provided.
(iii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby on the part of
Seller (a) have been duly authorized by all necessary corporate acts on
the part of Seller and (b) do not and will not (1) except as to the
transfer of the Permits, require any governmental or other consent, (2)
violate or conflict with any judgment, decree or order of any court
applicable to or affecting Seller, (3) violate or conflict with any law
or governmental regulation applicable to Seller, (4) violate or
conflict with the organizational documents of Seller and (5) result in
the breach of or constitute a default under any agreement, contract,
indenture or other instrument or other obligation to which Seller is a
party or is otherwise bound. Upon the assumption that this Agreement
constitutes the legal, valid and binding obligation of Purchaser, this
Agreement constitutes the legal, valid and binding obligation of Seller.
(iv) Seller is not a "foreign person" within the meaning of
section 1445 of the United States Internal Revenue Code of 1986, as
amended, and the regulations issued thereunder (the "Code"), and Seller
shall deliver to Purchaser on the Closing Date an affidavit in the form
annexed hereto as Exhibit M.
(v) (a) There are no leases, tenancies or rights to occupy
presently affecting the Property other than the Leases; (b) Seller has
heretofore delivered to Purchaser true and complete copies of each of
the Leases; (c) the Leases are in full force and
14
effect, except to the extent that, on or prior to the Closing Date, (1)
any such Lease shall have expired in accordance with its terms (and not
because of any termination or other acceleration of the stated
expiration date therefor), or (2) with respect to the SMSA Lease or
Moving Lease (as such Leases are defined in Exhibit D), the respective
Tenants thereof have terminated such Leases pursuant to an express
right granted thereunder; (d) to the best of Seller's knowledge, Seller
is not in default in any material respect under any Lease; (e) Seller
has not sent notice to any Tenant claiming that such Tenant is in
default under its Lease, except to the extent that any such default as
to which notice has been given has been cured to the knowledge of
Seller; (f) the Leases have not been modified or amended, except as set
forth on Exhibit D hereto; and (g) there are no security deposits paid
by Tenants under their Leases, except as set forth on Exhibit D hereto.
For purposes of the representations set forth in this Section 6(a)(v)
being made as of the Closing Date, the term "Leases" shall include New
Leases (as hereinafter defined).
(vii) To Seller's actual knowledge, the Permits listed on
Exhibit E hereto are all of the material certificates, licenses and
permits from governmental authorities held by Seller in connection with
the ownership of the Property and Seller has delivered to Purchaser
true and complete copies of the Permits.
(viii) Except as set forth in Exhibit O hereto, Seller is
neither a party to any written or oral agreement of any type pertaining
to the operation, maintenance, management and/or repair of the Property
("SERVICE CONTRACTS") nor has assumed in writing any such agreement,
except for any such agreement that will be terminated prior to the
Closing.
(ix) There is no action or proceeding instituted by Seller or in
which Seller is a named party before any court, agency or official with
respect to the validity of any statutes, ordinances, regulations or
restrictions or any permits or approvals thereunder relating to the
Property.
(x) Seller has not received written notice that the Property is
subject to any removal or remediation order from any federal, state or
local regulatory authority regarding the disposal or storage of any
materials (including, without limitation, asbestos and asbestos
containing materials) (collectively, "HAZARDOUS MATERIALS") regulated
by any applicable local, state or federal law, rule or regulation
pertaining to contamination, clean-up or disclosure (collectively,
"ENVIRONMENTAL LAWS") on or about the Property, whether such order
relates to actions or omissions by Seller or any other party. Except
as set forth in any of the Environmental Reports (as defined in Exhibit
F hereto) or Exhibit P hereto, all operations or activities upon, or
use or occupancy of, the Property and Improvements, or any portion
thereof, by Seller, or, to the best of Seller's knowledge, by any prior
tenant or occupant or owner of the
15
Property, or any portion thereof, or any current tenant or occupant of
the Property (other than Copart), or any portion thereof, is in all
material respects in compliance with all Environmental Laws, and
neither Seller nor, to the best of Seller's knowledge, any prior tenant
or occupant of the Property or any portion thereof, has engaged in or
permitted any dumping, discharge, disposal, spillage or leakage
(whether legal or illegal, accidental or intentional) of any Hazardous
Materials at, on, in, under or about the Property or any portion
thereof in violation of any Environmental Law. Except as set forth in
any of the Environmental Reports or Exhibit P hereto, (a) to the best
of Seller's knowledge, there has been no production, storage or
disposal on the Property of any Hazardous Materials, and (b) there are
not now and, to the best of Seller's knowledge, have never been any
underground storage tanks located on the Property.
(xi) The documents listed in Addendum F(i)(iii) attached to
Exhibit F hereto together with the LAFD Application for Certificate of
Disclosure of Hazardous Substances (file 036081-001-0) referred to in
Exhibit P constitute all of the reports, surveys, evaluations,
investigations and assessments in Seller's possession with respect to
Hazardous Materials on the Property.
(b) MISCELLANEOUS AGREEMENTS. Seller, during the term of this
Agreement, will (i) operate and maintain the Property in substantially the
same manner as it has heretofore operated and maintained the same, subject to
the rights of Tenants under the Leases as in effect on the date hereof, (ii)
not, without Purchaser's consent, which consent Purchaser agrees not to
unreasonably withhold or delay, enter into any new service, maintenance or
operating agreement unless the same may be terminated by Seller (and, after
the Closing, by Purchaser) upon not more than thirty (30) days written notice
without the payment of any premium or penalty by Purchaser, (iii) not enter
into any leases for all or any portion of the Property nor modify, amend,
supplement, extend, renew or terminate any existing Lease or consent to the
surrender or assignment of any existing Lease or to any subleasing under any
existing Lease, in each case without Purchaser's prior consent, which consent
Purchaser agrees not to unreasonably withhold or delay (any such lease,
amendment, supplement, extension, renewal or termination with Purchaser's
consent being herein a "NEW LEASE"), and if Purchaser shall consent or not
object to a New Lease, Schedule D hereof shall be amended to include the
appropriate information, (iv) not take any action which will or would cause
any of the representations or warranties in this Agreement to become untrue
or be violated, and (v) not apply any of the security deposits, in whole or
in part, given by Tenants under the Leases to the payment of delinquent rent.
Seller shall deliver to Purchaser a notice of each proposed action
hereunder, stating, if applicable, whether Seller is willing to consent to
such action and setting forth the relevant information therefor and, if
applicable, the number of days within which Seller must respond to the
proposed action under the terms of the applicable Lease or other agreement,
and any other material information supplied to Seller as to the proposed
action. Purchaser shall have ten (10) days after delivery to it of such
notice and information to determine whether or not to approve such action. If
Purchaser shall not give notice of its
16
disapproval within such ten (10) day period, Purchaser shall be deemed to
have approved such action. If any Lease or other agreement (or any provision
thereof) requires that Seller's consent not be unreasonably withheld or
delayed, then Purchaser shall not unreasonably delay or withhold its consent
to such action. If any Lease or other agreement provides Seller with fewer
than ten (10) days within which to grant any such approval or disapproval,
such ten (10) day period provided for above shall be reduced to two (2) days
less than the number of days provided for in such Lease or other agreement.
Notwithstanding anything to the contrary set forth in this Section 6(b) or
elsewhere in this Agreement, during the Contingency Period, Seller reserves
the right to negotiate the purchase and sale of the Property with other
prospective purchasers.
(c) ACCESS. Subject to and in accordance with the provisions of
Section 4(e), Seller shall, during normal business hours upon reasonable
prior notice, allow Purchaser or its representatives access for the purpose
of inspection of the Property.
(d) SURVIVAL. The representations and warranties of Seller
contained in this Agreement, and the covenants contained in clauses (ii) and
(iii) of Section 6(b) shall survive for one (1) year after the Closing.
Purchaser shall have no right to make, and hereby waives, any claim based
upon such representations and warranties or such covenants after the date
that is one (1) year after the Closing.
(e) CERTAIN LIMITATIONS ON SELLER'S REPRESENTATIONS AND
WARRANTIES. The representations and warranties of Seller set forth in
Section 6(a) are subject to the following express limitations:
(i) Seller does not represent or warrant that any particular
Lease will be in force or effect as of the Closing or that the Tenants
will not be in default under their respective Leases, except to the
extent so represented in Seller's Representation Certificate; and
(ii) the termination of any Lease shall not affect the
obligations of Purchaser hereunder.
7. PURCHASER'S REPRESENTATIONS AND AGREEMENTS.
(a) REPRESENTATIONS. Purchaser represents and warrants to Seller as follows:
(i) Purchaser is a corporation that has been duly organized and
is validly existing in good standing under the laws of the State of
California;
(ii) Purchaser has full power and right to enter into and
perform its obligations under this Agreement, the Loan Documents and
the other agreements contemplated herein to be executed and performed
by it;
17
(iii) Purchaser is not in the hands of a receiver nor is
application for a receiver pending, Purchaser has not made an
assignment for the benefit of creditors, nor has Purchaser filed, or
had filed against it, any petition in bankruptcy; and
(iv) The execution and delivery of this Agreement, the Purchaser
Closing Documents and the Loan Documents and the consummation of the
transactions contemplated hereby on the part of Purchaser (1) have been
(or, with respect to the Loan Documents, will be as of the Closing
Date) duly authorized by all necessary corporate acts on the part of
Purchaser, and (2) do not and will not (a) require any governmental or
other consent, (b) violate or conflict with any judgment, decree or
order of any court applicable to or affecting Purchaser, (c) violate or
conflict with any law or governmental regulation applicable to
Purchaser, (d) violate or conflict with the organizational documents of
Purchaser and (e) do not and will not result in the breach of, or
constitute a default under, any agreement, contract, indenture or other
instrument or obligation to which Purchaser is a party or is otherwise
bound. Upon the assumption that this Agreement constitutes the legal,
valid and binding obligation of Seller, this Agreement constitutes the
legal, valid and binding obligation of Purchaser, and the Loan
Documents, when executed and delivered by Purchaser, will constitute
the legal, valid and binding obligation of Purchaser.
(v) (a) Purchaser has not relied on any verbal or written
representations, warranties, promises or guaranties whatsoever made by
Seller or any of the employees, agents or attorneys of Seller to
Purchaser with respect to the physical condition or operation of
Property, the actual or projected revenue and expenses of the Property,
the zoning and other laws, regulations and rules applicable to the
Property or the compliance of the Property therewith, the quantity,
quality or condition of the articles of personal property and fixtures
included in the transactions contemplated hereby, the use or occupancy
of the Property or any part thereof or any other matter or thing
affecting or related to the Property or the transactions contemplated
hereby, except as, and solely to the extent, herein (and in the
Exhibits hereto) expressly and specifically set forth, and (b)
Purchaser has entered into this Agreement after having made and relied
solely on (1) its own independent investigation, inspection, analysis,
appraisal, examination and evaluation of the facts and circumstances,
(2) Seller's representations and warranties contained in this Agreement
and the Exhibits hereto and (3) the written materials Seller has
provided to Purchaser pursuant to this Agreement (PROVIDED, HOWEVER,
that Seller shall not be liable for any untrue or inaccurate statements
contained in any such written materials prepared by a consultant or
other third party)).
(b) RELEASE. Purchaser irrevocably and unconditionally waives
and releases Purchaser's right (if any) to recover from Seller and its
directors, officers, employees, representatives and agents, any and all
damages, losses, liabilities, costs or expenses whatsoever, and claims
therefor, whether direct or indirect, known or unknown, or foreseen or
18
unforeseen, which may arise from or be related to any breach of a
representation or warranty made by Seller in this Agreement (including any
Exhibit hereto) to the extent actually known to Purchaser on or prior to the
Closing Date (the "RELEASED CLAIMS"). The foregoing waiver and release
shall not affect Purchaser's rights under Section 5(a)(iv) hereof. Only in
this connection and to the extent permitted by law, Purchaser hereby agrees,
represents and warrants that Purchaser realizes and acknowledges that factual
matters now unknown to it and Seller may have given or may hereafter give
rise to causes of action, claims, demands, debts, controversies, damages,
costs, losses and expenses which are presently unknown, unanticipated and
unsuspected, and Purchaser further agrees, represents and warrants that the
waivers and releases herein have been negotiated and agreed upon in light of
that realization and that Purchaser nevertheless hereby intends, and by
consummating the transactions contemplated hereby shall be deemed
affirmatively, to release, discharge and acquit Seller from any such Released
Claims. Purchaser expressly waives the benefits of Section 1542 of the
California Civil Code, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THE CREDITOR DOES NOT KNOW
TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN TO HIM MUST HAVE MATERIALLY AFFECTED THE SETTLEMENT WITH THE
DEBTOR.
-------- ---------
-------- ---------
SELLER'S PURCHASER'S
INITIALS INITIALS
The foregoing provisions of this Section 7(b) are not intended to affect the
rights of Purchaser with respect to any breach of a representation or
warranty made by Seller in this Agreement (including the Exhibits hereto)
that is not disclosed in writing by Seller to Purchaser prior to the Closing,
which rights shall be subject to Section 6(d) hereof. The provisions of this
Section 7(b) shall survive the Closing.
(c) SURVIVAL. The representations and warranties set forth in
this Section 7, as applicable at the Closing Date, shall survive for one (1)
year after the Closing. Seller shall have no right to make, and hereby
waives, any claim based upon such representations and warranties after the
date that is one (1) year after the Closing.
19
8. APPORTIONMENTS. (a) The following items shall be
apportioned at the Closing as of the close of business on the day immediately
preceding the Closing Date:
(i) Rents and all other charges (including cost reimbursement
payments) payable under the Copart Lease as of the Closing Date
(whether or not collected).
(ii) Rents and all other charges (including cost reimbursement
payments) payable under the Leases other than the Copart Leases as and
when collected; PROVIDED, HOWEVER, that if any rents under any of such
Leases shall be accrued and unpaid at the Closing Date, the rents
collected by Purchaser on or after the Closing Date shall first be
applied to all rents due at the time of such collection with respect to
the period after the Closing Date with the balance payable to Seller to
the extent of rents delinquent as of the Closing Date; and, PROVIDED
FURTHER that Purchaser shall not be required to institute any
proceeding to collect any rents accrued and unpaid on the Closing Date.
If Seller shall not have received all accrued and unpaid rents due it
as of the Closing Date within ninety (90) days thereafter, Seller, at
it sole cost and expense, shall be entitled to bring such actions or
proceedings not affecting possession or enforcing landlord's liens as
it shall desire to collect any such accrued and unpaid rents, and
Purchaser shall cooperate with Seller in any such action.
(iii) Real estate taxes and assessments.
(iv) Water rates and charges.
(v) Sewer and vault taxes and rents.
(vi) Annual license, permit and inspection fees with respect
only to those Permits transferred to Purchaser at the Closing.
(vii) All charges and payments for fuel and steam, gas,
electricity and all other utility services supplied to the Property
which are not charged directly to Tenants; PROVIDED, HOWEVER, that if
there is no meter or if the current bill for any of such utilities has
not been issued prior to the Closing Date, the charges therefor shall
be adjusted at the Closing on the basis of the charges for the prior
period for which bills were issued and shall be further adjusted when
the bills for the current period are issued.
(viii) Payments and other charges under Service Contracts which
are transferred to Purchaser at the Closing.
(ix) All other income from and expenses related to the Property
of every type and nature.
20
If any of the foregoing cannot be apportioned at the Closing because of the
unavailability of the amounts which are to be apportioned, or additional
information regarding any of the foregoing apportioned at the Closing is made
available after the Closing, such items shall be apportioned or
reapportioned, as the case may be, as soon as practicable after the Closing
Date.
(b) Seller shall furnish readings of the water, gas and electric
meters located on the Property, if any, other than meters measuring the
computation of utilities which are the direct responsibility of any Tenant,
to a date not more than thirty (30) days prior to the Closing Date and the
unfixed water rates and charges, sewer taxes and rents and gas and
electricity charges, if any, based thereon for the intervening time shall be
apportioned on the basis of such last readings. If such readings are not
obtainable by the Closing Date, then, at the Closing, any water rates and
charges, sewer taxes and rents and gas and electricity charges which are
based on such readings shall be prorated based upon the per diem charges
obtained by using the most recent period for which such readings shall then
be available. Upon the taking of subsequent actual readings, the
apportionment of such charges shall be recalculated and Seller or Purchaser,
as the case may be, promptly shall make a payment to the other based upon
such recalculation.
(c) The amount of any unpaid real property taxes and
assessments, water rates and charges and sewer taxes and rents which Seller
is obligated to pay and discharge may, at the option of Seller, be paid out
of the cash balance of the Purchase Price (and therefore reducing the cash to
be paid by Purchaser to Seller at Closing), provided that official bills
therefor, indicating the interest and penalties, if any, thereon, are
furnished by Seller by the Closing.
(d) If any refunds of real property taxes or assessments, water
rates and charges or sewer taxes and rents shall be made after the Closing,
the same shall be held in trust by Seller or Purchaser, as the case may be,
and shall first be applied to the unreimbursed costs incurred in obtaining
the same, then paid to any Tenant who is entitled to the same and the
balance, if any, shall be paid to Seller to the extent such refunds are for
the period prior to the Closing Date and to Purchaser to the extent such
refunds are for the period commencing with the Closing Date.
(e) In the event the apportionments hereinabove provided which
are to be made at the Closing result in a credit balance to either party,
such sum shall be paid at the Closing by increasing or decreasing, as
appropriate, the Purchase Price by the amount of such credit balance in favor
of Seller or Purchaser, as the case may be.
(f) If any proceeding for reassessment or other proceeding to
determine the assessed value of the Property or the real property taxes
payable with respect to the Property shall have been commenced prior to the
date hereof and be continuing as of the Closing Date,
21
Seller shall be entitled to control the prosecution of such proceeding or
proceedings to completion and to settle or compromise any claim therein.
Purchaser agrees to cooperate with Seller and to execute any and all
documents reasonably requested by Seller in furtherance of the foregoing.
(g) No insurance policies of Seller are to be transferred to
Purchaser, and no apportionment of the premiums therefor shall be made.
Purchaser acknowledges that it shall be responsible for securing its own
insurance for the Property.
(h) [Intentionally Omitted].
(i) (i) If any rents (including cost reimbursement payments)
are payable or accruable under the Leases on the basis of estimates or
formulae and are subject to adjustment after the Closing Date, such rents
shall be apportioned at the Closing to the extent collected on the basis of
the then current charges or accruals, as applicable, and shall be subject to
reapportionment on the basis of the amounts as finally determined to be owing
under the Leases. Apportionment of escalation rent shall be made on the
basis of a 365 day year and the actual number of days elapsed. Within a
reasonable time after Purchaser has made its calculations of the final cost
reimbursement payments in respect of the pertinent fiscal periods and prior
to billing tenants therefor, Purchaser shall prepare and submit to Seller a
final calculation of the amounts and other items to be apportioned pursuant
to this Agreement as of the Closing Date (the "Final Report"). Seller shall
raise any objections it has to the Final Report within fifteen (15) days
after the submission thereof by written notice to Purchaser given within said
fifteen (15) day period and stating in reasonable detail Seller's objections,
and Purchaser shall allow Seller and its authorized representatives
reasonable access during business hours to its books and records pertinent to
the Property to permit Seller to review the Final Report and to ascertain its
accuracy.
(ii) If Seller shall raise any objections to the Final Report as
provided above, the parties shall meet within ten (10) days after submission
of Seller's notice thereof and attempt to resolve such objections. If any
objections are not resolved within said ten (10) day period, such objections
may thereafter be submitted by either party to any certified public
accountant reasonably acceptable to the parties for determination. The
determination of such firm shall be final and conclusive on the parties and
judgment may be entered thereon in any court of competent jurisdiction.
(iii) The Final Report shall be deemed amended by agreement of
the parties or determination of such firm, and, within ten (10) days after
such agreement or determination (or, if Seller raises no objections to the
Final Report, the expiration of the fifteen (15) day objection period),
Purchaser shall bill the tenants therefor. Thereafter, Seller promptly shall
pay to Purchaser, or Purchaser shall pay to Seller promptly upon collection,
as the case may
22
be, the amount determined to be due from such party to the other in
accordance with this Section 8 based upon the Final Report, as the same may
have been amended.
(iv) If a determination is required, the parties shall bear the
fees and expenses of the firm handling such determination equally.
(j) The obligations of the parties hereto under this Section 8
shall survive the Closing.
9. CLOSING MATTERS. The following items shall be provided for
at the Closing:
(a) PAYMENT OF RECORDING, TITLE AND OTHER FEES.
(i) TRANSFER TAXES AND RECORDING FEES. Seller shall pay
to the appropriate governmental (state, county, city and other)
authority all documentary, stamp, intangible and other transfer
taxes in connection with the transfer of the Property. Purchaser
shall pay all state, city, county, municipal and other
governmental recording fees and charges in connection with the
transactions contemplated by this Agreement.
(ii) TITLE AND SURVEYOR FEES. (a) Seller shall pay the
cost of (1) all premiums, charges and fees of the Title Company
and surveyor in connection with a CLTA Standard Coverage owner's
title policy (without endorsement) and the Survey to be delivered
to Purchaser hereunder; PROVIDED, HOWEVER, that if an ALTA
owner's form of title insurance policy shall be delivered at the
Closing, Seller shall only be obligated to pay the premiums for a
current form CLTA policy (the "CLTA COST") and Purchaser shall
pay the incremental amount necessary to obtain such other form
policy and any CLTA Endorsements; (2) one-half (1/2) of the
escrow fees; and (3) all costs incurred in the preparation of the
Deed.
(B) Purchaser shall pay (1) all premiums, charges and
fees of the Title Company in connection with the increased cost
of the title policy to the extent that such cost shall exceed the
CLTA Cost and the cost of all endorsements to the title policy;
and (2) one-half (1/2) of the escrow fees. If escrow fails to
close because of the default of either Seller or Purchaser,
without limiting the rights and remedies of the other party, the
defaulting party shall bear all costs and fees of escrow.
(iii) OTHER CHARGES. Other charges, if any, shall be paid
in the manner in which purchasers and sellers of real property in
Los Angeles County, California customarily divide such charges.
23
(b) Seller shall pay over to Purchaser all prepaid rents or
other sums held by Seller and not applied against the Tenant's
obligations thereunder for the period prior to the Closing Date.
(c) Seller shall pay all brokerage commissions and finders' fees
applicable to the current terms of Leases existing on the date hereof.
Purchaser shall be responsible for all brokerage commissions which
Seller has disclosed in writing to Purchaser prior to the Contingency
Date in respect of (a) renewals and extensions of the Leases
(including, without being limited to, any brokerage commissions due in
respect of a Tenant waiving or failing to exercise a cancellation
right) and (b) expansions of the premises demised thereunder, whether
or not such renewals, extensions or expansions are provided for in the
Leases.
The obligations of the parties under this Section 9 shall survive the Closing.
10. TITLE EXAMINATION; SURVEY. (a) Purchaser acknowledges
receipt from the Title Company of the Title Company's ALTA title insurance
commitment, dated January 30, 1996, under Order No. 5093787-39 (the "ORIGINAL
REPORT") and all the documents underlying the exceptions thereto. Seller and
Purchaser hereby confirm that the Title Company shall deliver to Seller and
Purchaser any updates or continuations thereof or any supplements thereto
("TITLE UPDATES"). Purchaser further acknowledges receipt of an as-built
ALTA survey of the Property prepared by Psmoas and Associates dated March 26,
1996 (the "SURVEY").
(b) The parties shall endeavor to agree prior to the Contingency
Date upon the form of the owner's title insurance policy to be issued to
Purchaser by the Title Company at the Closing, including the endorsements
thereto and the matters subject to which Purchaser shall accept title to the
Property (such matters being the "PERMITTED TITLE EXCEPTIONS"), such
agreement to be evidenced by a "Pro-Forma" title insurance policy prepared by
the Title Company.
(c) (i) Within fifteen (15) days of the date hereof, Purchaser
shall deliver to Seller a written statement (a "PURCHASER'S TITLE NOTICE")
setting forth in reasonable detail its objections to any liens or
encumbrances affecting, or other defects in or objections to, title to the
Property ("TITLE DEFECTS") disclosed by the Original Report, and within five
(5) business days after the issuance of each Title Update (or by the earlier
to occur after the issuance of each Title Update of the Agreed Date or the
Closing), Purchaser shall deliver to Seller a Purchaser's Title Notice
setting forth in reasonable detail its objections to any other Title Defects
disclosed by such Title Update. The failure by Purchaser to deliver any such
Purchaser's Title Notice within the time period specified for the Original
Report shall constitute a waiver by Purchaser of any Title Defect set forth
in the Original Report, and any such Title Defect not so objected shall
constitute a Permitted Title Exception. The failure by Purchaser to deliver
any such Purchaser's Title Notice within the time period specified for
24
any Title Update shall constitute a disapproval by Purchaser of any Title
Defect set forth in such Title Update.
(ii) If Purchaser disapproves (or is deemed to have disapproved)
any Title Defect shown in the Original Report or any Title Update by timely
delivering a Purchaser's Title Notice (or by failing to deliver a Purchaser's
Title Notice in the case of any Title Update), then Seller shall indicate (a)
which Title Defects Seller intends to remove from the Title Policy (and as
exceptions to title to the Property) and the manner in which Seller intends
to do so, (b) which Title Defects Seller shall remove from the Title Policy
(and as exceptions to title to the Property) and the manner in which Seller
shall do so and (c) which Title Defects Seller does not intend to remove, by
delivering written notice thereof to Purchaser ("SELLER'S TITLE NOTICE")
within ten (10) business days after receiving a Purchaser's Title Notice
(and with respect to Title Defects on Title Updates for which Seller has not
received a Purchaser's Title Notice, at any time). If Seller fails to timely
deliver Seller's Title Notice, then Seller shall be deemed to have elected
not to remove any of the Title Defects referred to in the applicable
Purchaser's Title Notice or set forth in the applicable Title Update (as to
which Purchaser has disapproved or is deemed to have disapproved). Purchaser
shall have the right to disapprove Seller's Title Notice, or Seller's
election or deemed election not to remove any Title Defects referred to in
the applicable Purchaser's Title Notice, as applicable, by delivering written
notice thereof to Seller within five (5) days after the earlier of (x)
receipt of Seller's Title Notice or (y) the deadline for delivery of Seller's
Title Notice; and Purchaser's failure to timely do so shall constitute
Purchaser's disapproval thereof. If Purchaser disapproves or is deemed to
have disapproved of Seller's Title Notice or Seller's election not to remove
any Title Defects referred to in Purchaser's Title Notice, such disapproval
or deemed disapproval shall constitute an election by Purchaser to terminate
this Agreement as of the date of disapproval or deemed disapproval, in which
event the provisions of Section 13(c)(i) shall apply. If Purchaser approves
Seller's Title Notice, then the removal of any Title Defect as to which
Seller has notified Purchaser that it shall remove or intends to remove the
same shall be a condition to Purchaser's obligation to consummate the
transactions contemplated hereby, and by the Closing Date (subject to
adjournment as provided in clause (iii) below) Seller shall remove any Title
Defect as to which Seller has notified Purchaser that it shall remove the
same.
Notwithstanding the foregoing, Purchaser hereby objects to all
liens in respect of due and unpaid monetary obligations or securing unpaid
indebtedness (other than liens for non-delinquent real property taxes and
assessments) ("MONETARY LIENS") and Seller agrees to cause all Monetary Liens
for mortgages or deeds of trust or other security instruments entered into by
Seller, mechanic's liens for work done by Seller and judgment liens for
judgments against Seller to be removed at Seller's sole cost at or prior to
the Closing Date, up to an aggregate amount not to exceed $100,000.00.
Regarding the standard nonspecific exception in the Title Policy for parties
in possession, Purchaser hereby objects thereto, and Seller agrees to deliver
to the Title Company an appropriate affidavit (provided the form thereof is
25
acceptable to Seller) certifying that the only tenants under written leases
with Seller in respect of the Property are the Tenants under the Leases. With
respect to the standard nonspecific exception in the Title Policy for
materials furnished to and labor performed in connection with the
construction of improvements on the Property within the last ninety (90) days
prior to the Closing, Purchaser hereby objects thereto, and Seller agrees to
provide the Title Company with an appropriate affidavit with respect to
materials furnished to and labor performed in connection with the
construction of improvements on the Property by or on behalf of Seller within
such period, but not as to any of the materials furnished or labor performed
by or on behalf of any Tenants of the Property. Seller also agrees to
provide the Title Company with an appropriate "gap period" affidavit with
respect to any agreements or instruments affecting title to the Property and
entered into or granted by Seller during the period commencing on the latest
date prior to the Closing for which the land records of Los Angeles County
are current and ending on the Closing Date.
(iii) Seller shall be entitled to reasonable adjournments of the
Closing (but in no event more than thirty (30) days) to attempt to remove any
Title Defect, and notwithstanding anything to the contrary, Seller shall not
be required to bring any action or proceeding, or take any steps, or
otherwise incur any expense to remove any Title Defect except to the extent
Seller has notified Purchaser in Seller's Title Notice that it shall remove
any such Title Defect.
11. RISK OF LOSS. (a) Neither Seller nor Purchaser shall have
the right to terminate this Agreement if the Property is destroyed or damaged
by fire or other casualty. If there is damage to or destruction of the
Property by fire or other casualty, there shall be no abatement of the
Purchase Price, Seller shall assign to Purchaser (without recourse) at the
Closing the rights of Seller to the proceeds, if any, under Seller's
insurance policies covering the Property with respect to such damage or
destruction, and Purchaser shall be entitled to receive and keep any monies
received from such insurance policies. Purchaser shall have the right to
participate with Seller in the settlement of all insurance claims, and Seller
shall not agree to any adjustment of claims without the prior written consent
of Purchaser, which consent shall not be unreasonably withheld or delayed.
If Purchaser reasonably rejects or otherwise reasonably withholds its consent
to any such adjustment acceptable to Seller, then Purchaser may contest the
claim and if Purchaser so seeks to contest any such claim in court or by
other proceeding, Purchaser shall be responsible for the payment of all
reasonable attorneys fees and other expenses incurred by Seller in commencing
and prosecuting any action under the applicable insurance policies.
Notwithstanding anything to the contrary contained in the preceding portions
of this Section 11(a), if there is damage to or destruction of the Property
by a casualty that is not covered by Seller's insurance and the reasonably
estimated cost to repair the damage or destruction caused thereby exceeds
$100,000, Seller shall notify Purchaser of such casualty promptly following
the occurrence thereof, and Purchaser shall have the right to terminate this
Agreement by giving notice to the other not later than ten (10) days after
the giving of Seller's notice. If Purchaser elects to terminate
26
this Agreement as aforesaid, this Agreement shall terminate and be of no
further force and effect and neither party shall have any liability to the
other hereunder, except that Seller shall be obligated to instruct Escrow
Agent to return to Purchaser the Downpayment and interest earned thereon;
PROVIDED, HOWEVER, Seller shall have the right to require Purchaser to
consummate the transactions contemplated hereby (subject to the other
provisions of this Agreement) by giving notice to Purchaser not later than
ten (10) days after the giving of Purchaser's notice to terminate, provided
that Purchaser shall be entitled to an abatement of the Purchase Price in the
amount reasonably estimated to repair the damage or destruction caused by
such uninsured casualty.
(b) If, prior to the Closing Date, all or any material portion
of the Property is taken by eminent domain (or is the subject of a pending
taking which has not yet been consummated) or access to the Property or the
available parking area therefor is reduced as a result of eminent domain or
restricted or reduced as a result of eminent domain, in any such case such
that the Property as it is currently used is not in compliance with
applicable zoning requirements or any Tenant can terminate its Lease by
reason of such taking or pending taking, Seller shall notify Purchaser of
such fact promptly after obtaining knowledge thereof and Purchaser shall have
the right to terminate this Agreement by giving notice to Seller not later
than ten (10) days after the giving of Seller's notice. For purposes hereof,
a "material portion" of the Property shall mean such a portion of the
Property as shall have a value, as reasonably determined by Seller, in excess
of $100,000. If Purchaser elects to terminate this Agreement as aforesaid,
this Agreement shall terminate and be of no further force and effect and
neither party shall have any liability to the other hereunder, except that
Seller shall be obligated to instruct Escrow Agent to return to Purchaser the
Downpayment and interest earned thereon. If Purchaser shall not elect to
cancel this Agreement, or if there has not been a taking by eminent domain or
otherwise that gives rise to the right of Purchaser to terminate, then the
sale of the Property shall be consummated as herein provided at the Purchase
Price (without abatement) and Seller shall assign to Purchaser (without
recourse) at the Closing all of Seller's right, title and interest in and to
all awards, if any, for the taking to be delivered, and Purchaser shall be
entitled to receive and keep all awards to be delivered for the taking of the
Property or such portions thereof. Unless or until this Agreement is
terminated, Seller shall take no action with respect to any eminent domain
proceeding without the prior written consent of Purchaser, which shall not be
unreasonably withheld, unless any such action is necessary to preserve
Seller's rights in any such proceeding.
(c) The parties' obligations, if any, under this Section 11
shall survive the Closing. The provisions of this Section 11 are and shall
be an express provision contrary to and in lieu of the provisions of the
Uniform Vendor and Purchaser Act of the State of California (Section 1662 of
The Civil Code of the State of California) which the parties agree shall be
inapplicable to the transactions contemplated hereby and the parties further
agree that the provisions of this Section 11 shall govern.
27
12. BROKERAGE. Each of Purchaser and Seller represents and
warrants to the other that it has not hired, retained or dealt with any
broker, consultant, intermediary or finder in connection with the
negotiation, execution or delivery of this Agreement or the consummation of
the transactions contemplated hereby other than Cushman & Wakefield of
California Inc. Seller shall pay the brokerage commission due such broker
pursuant to a separate agreement, and Seller hereby agrees to indemnify
Purchaser from and against liability arising out of or in connection with any
claims by such broker with respect to this Agreement. Seller and Purchaser
each covenant and agree to indemnify each other from and against liability
arising out of or in connection with any claim by any other broker or agent
that the aforesaid representation or warranty is untrue. The provisions of
this Section 12 shall survive the Closing.
13. REMEDIES. (a) IN THE EVENT THE CLOSING AND THE
CONSUMMATION OF THE TRANSACTION HEREIN CONTEMPLATED DOES NOT OCCUR AS AND AT
THE TIME HEREIN PROVIDED BY REASON OF A DEFAULT OF PURCHASER, PURCHASER AND
SELLER AGREE THAT IT WOULD BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTIMATE
THE DAMAGES WHICH SELLER MAY SUFFER. THEREFORE PURCHASER AND SELLER DO
HEREBY AGREE THAT A REASONABLE ESTIMATE OF THE TOTAL NET DETRIMENT THAT
SELLER WOULD SUFFER IN THE EVENT THAT PURCHASER DEFAULTS AND FAILS TO
COMPLETE THE PURCHASE OF THE PROPERTY IS AND SHALL BE, AS SELLER'S SOLE AND
EXCLUSIVE REMEDY (WHETHER AT LAW OR IN EQUITY), AN AMOUNT EQUAL TO THE
DOWNPAYMENT (INCLUDING ANY INTEREST THEREON). SAID AMOUNT SHALL BE THE FULL,
AGREED AND LIQUIDATED DAMAGES FOR THE BREACH OF THIS AGREEMENT BY PURCHASER,
ALL OTHER CLAIMS TO DAMAGES OR OTHER REMEDIES BEING HEREIN EXPRESSLY WAIVED
BY SELLER, EXCEPT FOR SUCH LIABILITIES OR OBLIGATIONS WHICH ARE SPECIFICALLY
STATED TO SURVIVE THE TERMINATION OF THIS AGREEMENT. THE PAYMENT OF SUCH
AMOUNT AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY
WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS
INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA
CIVIL CODE SECTIONS 1671, 1676 AND 1677. SELLER HEREBY WAIVES THE PROVISIONS
OF CALIFORNIA CIVIL CODE SECTION 3389. UPON DEFAULT BY PURCHASER, THIS
AGREEMENT SHALL BE TERMINATED AND NEITHER PARTY SHALL HAVE ANY FURTHER RIGHTS
OR OBLIGATIONS HEREUNDER, EACH TO THE OTHER, EXCEPT FOR THE RIGHT OF SELLER
TO COLLECT SUCH LIQUIDATED DAMAGES FROM PURCHASER AND ESCROW HOLDER AND
EXCEPT FOR SUCH LIABILITIES OR OBLIGATIONS WHICH ARE SPECIFICALLY STATED TO
SURVIVE THE TERMINATION OF THIS AGREEMENT.
28
---------- ----------
---------- ----------
Seller's Purchaser's
Initials Initials
(b) As material consideration to Seller's entering into this
Agreement with Purchaser, subject to Section 13(c) hereof, Purchaser
expressly waives the (i) remedy of specific performance on account of
Seller's default under this Agreement and (ii) any right under California
Code of Civil Procedure, Part II, Title 4.5 (Sections 409 through 409.9) or
at common law or otherwise to record or file a lis pendens or a notice of
pendency of action or similar notice against all or any portion of this
Property.
(c) In the event that on the Closing Date, Seller shall be
unable to perform its obligations or to satisfy any condition applicable to
Seller hereunder (including the conditions set forth in Section 5(a)) in
accordance with the provisions of this Agreement or title to the Property
shall not be in accordance with this Agreement and provided that Purchaser is
not in default of Purchaser's obligations under this Agreement, the Purchaser
shall have the right, at Purchaser's option, either (i) to terminate this
Agreement and the Escrow by giving written notice thereof to Seller and to
Escrow Agent, whereupon the sole liability of Seller shall be to instruct the
Escrow Agent to return the Downpayment (and any interest thereon) to
Purchaser, and upon such return, this Agreement shall be deemed terminated
and Seller shall not have any further liability or obligation to Purchaser
hereunder nor shall Purchaser have any further liability or obligation to
Seller hereunder, except for such liabilities or obligations as are
specifically stated to survive the termination of this Agreement, or (ii) to
obtain specific performance by Seller of its obligations under this
Agreement, PROVIDED, HOWEVER, that (a) as a condition precedent to
Purchaser's right under this Section 13(c) to obtain specific performance by
Seller and to commence an action therefore and to record a notice of lis
pendens or other notice or filing in the county records, Purchaser shall
fully perform all of its obligations under this Agreement, including, without
being limited to, delivery to Escrow Agent of the Loan Documents and the
balance of the Purchase Price pursuant to Section 2(b) hereof and the
performance of all other obligations of Purchaser under this Agreement; and
(b) Seller shall not be obligated, nor may Purchaser seek in such action for
specific performance to compel Seller, to perform any obligation as to which
(1) Seller does not have exclusive control for the full performance thereof
nor can such exclusive control be readily obtained or (2) Seller has not been
the cause of such default and the reason for the failure of such act to be
performed or (3) Seller does not have the express affirmative obligation to
perform under this Agreement (as for example, Purchaser may not compel Seller
to remove any Title Defect unless Seller shall have notified Purchaser in
Seller's Title Notice that Seller shall remove such Title Defect or unless
Seller is obligated to remove such Title Defect pursuant to the second
paragraph of Section 10(c)(ii)); PROVIDED, HOWEVER, that Seller and
29
Purchaser agree that the foregoing do not apply to the act of execution and
delivery by Seller of the Deed.
14. NOTICES. All notices and other communications required or
permitted hereby shall be in writing and shall be deemed to have been duly
and sufficiently given if (a) personally delivered with proof of delivery
thereof (any notice or communication so delivered being deemed to have been
received at the time so delivered), or (b) sent by Federal Express (or other
similar overnight courier) designating early morning delivery (any notice or
communication so delivered being deemed to have been received on the business
day following receipt by the courier), or (c) sent by United States
registered or certified mail, postage prepaid, at a post office regularly
maintained by the United States Postal Service (any notice or communication
so sent being deemed to have been received two (2) business days after
mailing in the United States), or (d) sent by telecopier or facsimile (any
notice or communication so delivered shall be effective upon receipt and
shall be deemed to have been received (i) on the business day so sent, if so
sent prior to 4:30 P.M. (based on the recipient's time) of the business day
so sent, and (ii) on the business day following the day so sent, if so sent
on a nonbusiness day or on or after 4:30 P.M. (based on the recipient's time)
of the business day so sent, in any such case addressed to the respective
parties as follows:
(i) if to Seller:
The Stroh Companies, Inc.
100 River Place
Detroit, MI 48207-4291
Attention: Vincent M. Abatemarco
Telephone: (313) 446-2475
Fax: (313) 446-2816
with a copy to:
Shearman & Sterling
153 East 53rd Street
New York, New York 10022
Attention: Benzion J. Westreich, Esq.
Telephone: (212) 848-4668
Fax: (212) 848-5252
(ii) if to Purchaser:
Copart, Inc.
5500 E. Second Street
Second Floor
30
Benicia, CA 94510
Attention: Paul A. Styer, Esq.
Telephone: (707) 748-5007
Fax: (707) 748-5088
(iii) if to Escrow Agent:
Continental Lawyers Title Company
800 East Colorado Boulevard
Pasadena, CA 91101
Attention: Andrea Mendoza
Telephone: (818) 304-0040
Fax: (818) 793-4906
Either party may, by notice given as aforesaid, change the person or persons
and/or address or addresses, or designate an additional person or persons or
an additional address or addresses, for its notices, PROVIDED, HOWEVER, that
notices of change of address or addresses shall only be effective upon
receipt.
15. CHOICE OF LAW. The interpretation, enforcement and
performance of this Agreement shall be governed by the laws of the State of
California applicable to agreements made and to be performed wholly within
such State.
16. MISCELLANEOUS. (a) ENTIRE AGREEMENT; EXHIBITS. This
Agreement, together with the Exhibits hereto, constitute the entire agreement
of the parties hereto regarding the subject matter of this Agreement and all
prior or contemporaneous agreements, understandings, representations and
statements, oral or written, are hereby merged herein. Exhibits A through P
annexed hereto are hereby incorporated herein and made a part hereof by
reference as fully as though set forth herein.
(b) AMENDMENTS. This Agreement may not be modified, amended,
altered, supplemented or cancelled except pursuant to the terms hereof or an
instrument in writing signed by the parties hereto.
(c) ACCEPTANCE OF THE DEED. The acceptance of the Deed to the
Property by Purchaser shall be deemed an acknowledgment by Purchaser that
Seller has fully complied with all of its obligations hereunder and that
Seller is discharged therefrom and that Seller shall have no further
obligation or liability with respect to any of the agreements made by Seller
in this Agreement, except for those provisions of this Agreement which
expressly provide that any obligation of Seller shall survive the Closing,
including, but not limited to, the provisions of Sections 4(e)(iv), 4(f),
6(a), 7, 8, 9, 12 and 16(p).
31
(d) INDEMNIFICATION GENERALLY. (i) Wherever it is provided in
this Agreement or in any agreement or document delivered pursuant hereto that
a party shall indemnify another party hereunder against liability or damages,
such phrase and words of similar import shall mean that the indemnifying
party hereby agrees to and does indemnify, defend and hold harmless the
indemnified party and such party's direct and indirect shareholders or
partners and their respective past, present and future officers, directors,
employees and agents from and against any and all costs, claims, demands,
suits, causes of action, judgments, interests, damages, losses, liabilities
and expenses (including, without being limited to, reasonable attorneys' fees
and disbursements) to which they or any of them may become subject or which
may be incurred by or asserted against any or all of them attributable to,
arising out of or in connection with the matters provided for in such
provision.
(ii) If any action, suit or proceeding is commenced, or if any
claim, demand or assessment is asserted in respect of which a party is
indemnified hereunder or under any agreement or document delivered pursuant
hereto, the indemnified party shall give notice thereof to the indemnifying
party and the indemnifying party shall be entitled to control the defense,
compromise or settlement thereof, at its own cost and expense, with counsel
reasonably satisfactory to the indemnified party, and the indemnified party
shall cooperate fully and make available to the indemnifying party such
information under its control or in its possession relating thereto and may,
at its own cost and expense, participate in such defense.
(e) BINDING EFFECT. This Agreement does not constitute an offer
to sell and shall not bind Seller unless and until Seller elects to be bound
hereby by executing and delivering to Purchaser an executed original
counterpart hereof and depositing the Downpayment in accordance with the
terms of this Agreement and such funds having cleared.
(f) PARTIAL INVALIDITY. If any term or provision of this
Agreement or the application thereof to any persons or circumstances shall,
to any extent, be invalid or unenforceable, the remainder of this Agreement
or the application of such term or provision to persons or circumstances
other than those as to which it is held invalid or unenforceable shall not be
affected thereby, and each term and provision of this Agreement shall be
valid and enforceable to the fullest extent permitted by law.
(g) RECORDATION OF AGREEMENT; WAIVER OF LIS PENDENS. Neither
Seller nor Purchaser may record this Agreement. Subject to Section 13(c),
Purchaser hereby waives, to the extent permitted by law, any right to file a
lis pendens or other form of attachment against the Property in connection
with this Agreement or the transactions contemplated hereby. To the extent
that any such filing is made in violation of this Agreement, Purchase shall
indemnify Seller against any damages incurred by Seller in connection
herewith. The provisions of this Section 16(g) shall survive termination of
this Agreement.
32
(h) FURTHER ASSURANCES. The parties mutually agree to execute
and deliver to each other, at the Closing, such other and further documents
as may be reasonably required by the parties to carry into effect the
purposes and intents of this Agreement, provided such documents are
customarily delivered in real estate transactions in the City of Los Angeles
and do not impose any material obligations upon any party hereunder except as
set forth in this Agreement.
(i) NONIMPUTATION. Neither party to this Agreement nor any
other corporation or entity referred to herein shall have imputed to it or be
deemed to have the knowledge of any agent, officer, servant or employee
thereof unless and until such agent, officer, servant or employee has actual
knowledge of the relevant event, notice, condition, occurrence, fact or
situation or has reasonable cause to know, or should reasonably be aware
thereof and then only if such event, notice, condition, occurrence, fact or
situation is related to matters as to which such agent, officer, servant or
employee is entrusted and has authority to deal with.
(j) PREVAILING PARTY COSTS. In the event any dispute between
the parties hereto results in litigation, the prevailing party shall be
reimbursed and indemnified by the party not prevailing in such dispute for
all costs and expenses reasonably incurred by the prevailing party in
enforcing or establishing its rights hereunder, including, without being
limited to, court costs and reasonable attorneys' fees. The prevailing party
shall be determined by the court based upon an assessment of which party's
major arguments or positions taken in the proceedings could fairly be said to
have prevailed over the other party's major arguments or positions on major
disputed issues.
(k) HEADINGS; SECTION AND EXHIBIT REFERENCES. The Section
headings used herein are for reference purposes only and do not control or
affect the meaning or interpretation of any term or provision hereof and
shall not be deemed in any manner to modify, explain, qualify or restate any
of the provisions of this Agreement. All references in this Agreement to
Sections and Exhibits are to the Sections hereof and the Exhibits annexed
hereto, respectively.
(l) COUNTERPARTS. This Agreement may be executed in any number
of counterparts with the same effect as if all parties hereto had executed
the same document. All such counterparts shall be construed together and
shall constitute one instrument.
(m) ASSIGNMENT. Purchaser shall have the right to assign its
rights, interests or obligations hereunder to an affiliate (as hereinafter
defined) of Purchaser provided such assignment is made no less than one (1)
day prior to the Closing and Purchaser gives notice thereof to Seller. Any
other assignment shall be null and void and without any force or effect
unless approved by Seller. Subject to and without limiting the preceding two
sentences, this Agreement shall bind and inure to the benefit of the
respective heirs, executors, administrators, personal representatives,
successors and assigns of the parties hereto. As used
33
in this paragraph, the term "AFFILIATE" means, as to any person, any other
person that, directly or indirectly, controls, is controlled by or is under
common control with such person, and the term "CONTROL" (including the terms
"CONTROLLING," "CONTROLLED BY" and "UNDER COMMON CONTROL with") of a person
means the possession, direct or indirect, of the power to vote 100% of the
voting stock of such person (if such person is a corporation) or 100% of the
partnership interests of such person (if such person is a partnership).
(n) NO WAIVER. The failure of any party hereto to enforce at
any time any of the provisions of this Agreement shall in no way be construed
as a waiver of any of such provisions, or the right of any party thereafter
to enforce each and every such provision. No waiver of any breach of this
Agreement shall be held to be a waiver of any other or subsequent breach.
(o) NO OTHER PARTIES. Except as otherwise expressly provided
herein, the execution and delivery of this Agreement shall not be deemed to
confer any rights upon, nor obligate any of the parties hereto, to any person
or entity other than the parties hereto.
(p) TERMINATION OF COPART LEASES. Upon the Closing, the Copart
Leases shall be deemed to be terminated. Notwithstanding the termination of
the Copart Leases, Copart shall remain liable for any escalation payments for
operating expenses and/or taxes accruing prior to the Closing. In addition,
the Closing shall constitute an acknowledgment by Seller and Copart that
neither party is in default of any obligations owing to the other under the
Copart Leases. The provisions of this Section 16(p) shall survive the
Closing.
34
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be signed as of the day and year first above written.
SELLER:
THE STROH COMPANIES, INC.
By:
------------------------
Name: Christopher T. Sortwell
Title: Treasurer
PURCHASER:
COPART, INC.
By:
------------------------
Name:
Title:
Escrow Agent hereby agrees to abide by the terms of Section 2 hereof and
Exhibit G hereto.
ESCROW AGENT:
CONTINENTAL LAWYERS TITLE COMPANY
By:
-------------------------
Name:
Title:
EXHIBIT A
LEGAL DESCRIPTION OF LAND
ALL THAT CERTAIN piece, parcel and tract of land, situated in the
State of California, County of Los Angeles and City of Los Angeles, described
as follows:
PARCEL 1:
THAT PORTION OF LOT A, AS SHOWN ON A MAP OF THE LANDS OF LOS ANGELES FARMING
AND MILLING COMPANY, IN THE CITY OF LOS ANGELES, IN THE COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA, ATTACHED TO DEED RECORDED JULY 20, 1910, AS PER
MAP RECORDED IN BOOK 4232 PAGE 118 OF DEEDS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COUNTY, BOUNDED AS FOLLOWS:
BOUNDED ON THE NORTHEAST BY THE SOUTHWESTERLY LINE OF THE LAND DESCRIBED IN
DEED TO THE SOUTHERN PACIFIC RAILROAD COMPANY RECORDED AUGUST 26, 1902 AS
INSTRUMENT NO. 39 IN BOOK 1634 PAGE 94 OF DEEDS, IN SAID RECORDER'S OFFICE;
BOUNDED ON THE EAST BY THE WESTERLY LINE OF TRACT NO. 1081, IN SAID CITY,
COUNTY AND STATE, AS PER MAP RECORDED IN BOOK 17 PAGE 130 OF MAPS, IN SAID
RECORDER'S OFFICE; BOUNDED ON THE SOUTH BY THE NORTHERLY LINES OF LOTS 215
AND 216 AND THE WESTERLY PROLONGATION OF SAID NORTHERLY LINES OF TRACT 1000,
IN SAID CITY, COUNTY AND STATE, AS PER MAP RECORDED IN BOOK 19 PAGES 1 ET
SEQ., OF MAPS, IN SAID RECORDER'S OFFICE; AND BOUNDED ON THE WEST BY THE
NORTHERLY PROLONGATION OF THE CENTER LINE OF HAZELTINE AVE., 50 FEET WIDE AS
DESCRIBED IN THE DEED TO TECHNICOLOR MOTION PICTURE CORPORATION RECORDED
SEPTEMBER 26, 1946 AS INSTRUMENT NO. 1065 IN BOOK 23761 PAGE 237, OFFICIAL
RECORDS, IN SAID RECORDER'S OFFICE.
EXCEPT THEREFROM THAT PORTION OF SAID PARCEL 1 DESCRIBED AS FOLLOWS:
BEGINNING AT THE MOST NORTHERLY CORNER OF TRACT NO. 1081 IN SAID CITY, COUNTY
AND STATE, AS PER MAP RECORDED IN BOOK 17 PAGES 130 AND 131 OF MAPS, IN SAID
RECORDERS; THENCE ALONG THE WESTERLY LINE OF SAID TRACT NO. 1081 SOUTH 285.90
FEET TO A LINE THAT IS PARALLEL WITH AN DISTANT NORTHERLY, 30 FEET, MEASURED
AT RIGHT ANGELES, FROM THAT CERTAIN CENTER LINE COURSE AND ITS WESTERLY
PROLONGATION DESCRIBED IN DEED RECORDED IN BOOK 4857 PAGE 393 OFFICIAL
RECORDERS IN SAID RECORDERS OFFICE AS HAVING A LENGTH OF
A-2
480.98 FEET; THENCE ALONG SAID PARALLEL LINE NORTH 88 DEG. 40' 09" WEST 41.05
FEET TO THE EASTERLY TERMINUS OF THAT CERTAIN CURVE DESCRIBED IN THE EASEMENT
DEED TO THE CITY OF LOS ANGELES RECORDED ON FEBRUARY 19, 1960 AS DOCUMENT NO.
2092 IN BOOK D 755 PAGE 555, OFFICIAL RECORDS, IN SAID RECORDERS OFFICE;
THENCE NORTHWESTERLY ALONG SAID CURVE TO A LINE THAT IS PARALLEL WITH AND
DISTANT EASTERLY 51 FEET FROM THAT CERTAIN CENTER LINE DESCRIBED IN SAID
EASEMENT DEED; THENCE NORTHERLY ALONG SAID LAST MENTIONED PARALLEL LINE TO
THE SOUTHERLY LINE OF THE SOUTHERN PACIFIC RAILROAD COMPANY'S RIGHT OF WAY,
AS SHOWN ON SAID MAP OF SAID TRACT NO. 1081; THENCE EASTERLY ALONG SAID
SOUTHERLY LINE A DISTANCE OF 37.57 FEET TO THE POINT OF BEGINNING.
PARCEL 2:
A EASEMENT FOR STREET PURPOSES OVER THAT PORTION OF LOT A, AS SHOWN ON A MAP
OF THE LANDS OF THE LOS ANGELES FARMING AND MILLING COMPANY, IN THE CITY OF
LOS ANGELES, IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, ATTACHED TO
THE DEED RECORDED JULY 20, 1910 IN BOOK 4232 PAGE 118 OF DEEDS, IN THE OFFICE
OF THE COUNTY RECORDER OF SAID COUNTY, INCLUDED WITHIN A STRIP OF LAND 25
FEET IN WIDTH, EXTENDING FROM THE EASTERLY PROLONGATION OF THE NORTHERLY LINE
OF LOT 217 OF TRACT NO. 1000, AS PER MAP RECORDED IN BOOK 19 PAGE 1, ET SEQ.,
OF MAPS, IN SAID RECORDERS OFFICE TO THE WESTERLY PROLONGATION OF THE
NORTHERLY LINE OF THE LAND DESCRIBED IN PARCEL 1 IN THE DEED TO JOS. SCHLITZ
BREWING COMPANY, RECORDED MAY 15, 1969 AS INSTRUMENT NO. 368 IN BOOK D 4370
PAGE 24, OFFICIAL RECORDS, IN SAID RECORDER'S OFFICE, THE EASTERLY LINE OF
SAID 25 FOOT STRIP BEING THE WESTERLY LINE OF PARCEL 1 IN SAID DEED TO JOS.
SCHLITZ BREWING COMPANY.
Assessor's Parcel Number: 2215-2-1 and 2215-2-3
EXHIBIT B
DESCRIPTION OF PERSONAL PROPERTY
1 steel desk
2 office chairs (wood structure, cloth padded)
1 wood bookcase
1 steel safe
1 4-drawer, filing cabinet
1 supply steel cabinet
1 wood steel framed table
1 water cooler
3 small plastic trash containers
3 100 ft. hoses
2 weeder grass cutters
1 submersible sump pump (3 horsepower) located Southeast of bottling plant
1 sump pump located in powerhouse basement
EXHIBIT C
DEED
----
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
____________________________
____________________________
____________________________
Attn: ________________________
MAIL TAX STATEMENTS TO:
Copart, Inc.
5500 E. Second Street
Second Floor
Benecia, CA 94510
Attn: ____________________________
- ------------------------------------------------------------------------------
SPACE ABOVE THIS LINE FOR RECORDER'S USE
CORPORATION GRANT DEED
A.P.N.________________
The undersigned grantor declares:
Documentary transfer tax is $_______
(x) computed on full value of property conveyed, or
( ) computed on full value less value of liens and encumbrances remaining at
time of sale.
( ) Unincorporated area:( ) City of Los Angeles, and
FOR A VALUABLE CONSIDERATION, RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED, THE
STROH COMPANIES, INC., a corporation organized under the laws of the State of
Delaware, hereby GRANTS to COPART, INC., a California corporation, all that
real property situated in the City of Los Angeles, County of Los Angeles,
State of California, described in Exhibit A attached hereto.
C-2
TOGETHER WITH all buildings, facilities, structures and other improvements
located thereon and all tenements, hereditaments, appurtenances, privileges
and other rights and interest benefitting or relating thereto (collectively,
the "Property").
TO HAVE AND TO HOLD the same unto Grantee and the successors and
assigns of Grantee, forever.
Grantor hereby covenants that Grantor has not conveyed the
Property, or any right, title or interest therein, to any person other than
Grantee, other than the matters set forth on Exhibit B hereto
[matters entered into by Grantor].
In Witness Whereof, said corporation has caused its corporate
name and seal to be affixed hereto and this instrument to be executed.
Dated: ______________________ , 1996 GRANTOR:
THE STROH COMPANIES, INC.,
a Delaware corporation
By:
-------------------------------
Name: Christopher T. Sortwell
Title: Treasurer
STATE OF __________ )
) ss.
COUNTY OF _________ )
On ____________, 1996, before me, ______________, a Notary
Public, personally appeared CHRISTOPHER T. SORTWELL, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person
whose name is subscribed to the within instrument and acknowledged to me that
he executed the same in his authorized capacity, and that by his signature on
the instrument the person, or the entity upon behalf of which the person
acted, executed said instrument.
WITNESS my hand and official seal.
Signature ___________________________ (SEAL)
EXHIBIT A
Legal Description of the Property
EXHIBIT B
List of Matters Executed by Grantor
EXHIBIT D
LEASES
Lease by and between The Stroh Companies, Inc.,as Landlord and Copart, Inc.,
as Tenant, dated as of August 31, 1995, as amended by Letter Agreement
between The Stroh Companies, Inc.and Copart, Inc. regarding the fire
sprinkler system, dated as of August 31, 1995. (the "COPART LEASE").
Security Deposit: $15,279.
License by and between The Stroh Companies, Inc.,as Licensor and Copart,
Inc., as Licensee, dated as of August 31, 1995, as amended by Letter
Agreement between The Stroh Companies, Inc.and Copart, Inc. regarding the
fire sprinkler system, dated as of August 31, 1995 (the "COPART LICENSE";
together with the Copart Lease, the "COPART LEASES"). Security Deposit:
$14,721.
Lease by and between The Stroh Companies, Inc., as Landlord, and Los Angeles
SMSA Limited Partnership, as Tenant, dated as of January 31, 1995 (the "SMSA
LEASE").
Lease by and between The Stroh Companies, Inc., as Lessor, and California
Moving and Storage Company, as Lessee, dated December 1, 1994 (the "MOVING
LEASE"). Security Deposit: $13,650.
EXHIBIT E
CERTIFICATES, LICENSES AND PERMITS
City of Los Angeles Steam Boiler or Pressure Vessel Certificate of
Inspection and Permit to Operate, No. AC 4103, issued April 19, 1995.
County of Los Angeles Public Health License No. 400496, issued October
17, 1995.
EXHIBIT F
DUE DILIGENCE ITEMS
(i) and (iii) The list of soil reports, engineering studies, grading plans,
topographical maps and seismic tests, studies, reports or
analyses relating to the Property and the list of reports,
correspondence, test results and recommendations relating to
the Property are attached hereto as Addendum F(i)(iii).
The reports, surveys, evaluations, investigations and
assessments in Addendum F(i)(iii) are referred to in this
Agreement as the "ENVIRONMENTAL REPORTS." For purposes of
Section 6(a)(x), the term "Environmental Reports" also includes
the LAFD Application for Certificate of Disclosure of Hazardous
Substances (file 036081-001-0) December 1986.
Other correspondence and recommendations relating to the Property:
Letter dated September 29, 1995 from Paul A. Styer, Senior
Vice President, General Counsel, Copart, Inc. to J. Tim
Hersch, PIC Environmental Services.
Letter dated September 19, 1995 from J. Tim Hersch, PIC
Environmental Services to Paul Styer, Copart, Inc.
(iv) (a) There are no pending causes, claims, proceedings or legal
actions instituted against Seller with respect to the Property
and (b) to Seller's actual knowledge, there are no causes,
claims, proceeding or legal action threatened against Seller
with respect to the Property.
(iv) The list of all tangible personal property owned or leased by
Seller as of the date hereof which is included in the sale is
attached to this Agreement as Exhibit B.
(vii) The certificate of insurance evidencing the insurance policies
currently maintained by Seller with respect to the Property is
attached hereto as Addendum F(vii). There are no claims and
settlements of $50,000.00 or more made within the last three
(3) years.
(viii) The list of all building plans and specifications for the
Improvements in Seller's possession or reasonably available to
Seller is attached hereto as Addendum F(viii).
EXHIBIT G
ESCROW PROVISIONS
1. (a) Following collection, Escrow Agent shall invest the
Downpayment in an interest bearing money market account (insured by the
Federal Deposit Insurance Corporation) at Bank of America (the "BANK") (any
such investment being an "APPROPRIATE INVESTMENT"), at such a yield as shall
be available. Escrow Agent shall use reasonable efforts to keep the
Downpayment invested for a period to end prior to, but as nearly
contemporaneous as is reasonable with, the Contingency Date and thereafter,
if this Agreement is not terminated, the Closing Date, having due regard to
the fact that the Downpayment may have to be available on the Contingency
Date and, if this Agreement is not terminated, must be available on the
Closing Date. If the Closing Date is changed from May 31, 1996, the
scheduled Closing Date set forth in Section 4 of the Agreement to which this
Exhibit G is attached, or from any rescheduled Closing Date, Seller and
Purchaser shall give prompt written notice thereof to Escrow Agent, which
notice shall specify the new closing date (the "NEW CLOSING DATE"). If the
Appropriate Investment held by Escrow Agent at the time Escrow Agent receives
such notice matures prior to the New Closing Date set forth in any such
notice, Escrow Agent may, but will have no obligation to, reinvest the
Downpayment in an Appropriate Investment which matures on a date on or prior
to the New Closing Date set forth in such notice. Escrow Agent shall bear no
liability for any loss occasioned by reasonable investment of the Downpayment
as herein provided, by any reasonable delays in investing or reinvesting the
Downpayment or by any failure to achieve the maximum possible yield from the
Downpayment. If the Appropriate Investment held by Escrow Agent does not
mature before the Closing Date, Escrow Agent, at the election of the party
entitled to the Downpayment, shall either deliver the certificate or other
evidence of the Appropriate Investment to such party or shall sell them prior
to maturity. For purposes of these Escrow Provisions, transfer of the
certificate or other documentation evidencing the Appropriate Investment to a
designated party shall be deemed to constitute delivery thereof.
(b) The Downpayment, plus any interest earned from the
investment thereof in accordance with the terms of subparagraph 1(a) above,
less any and all transaction or account fees, costs, expenses or charges,
including, without limitation, brokerage and custodial fees, attributable to
such investment (such sum hereinafter called the "INVESTED DOWNPAYMENT"),
shall be delivered by Escrow Agent to Seller, to Purchaser or, if pursuant to
Paragraph 4 hereof, to substitute impartial party or a court having
appropriate jurisdiction, in accordance with the terms of these Provisions.
Delivery of the Invested Downpayment in accordance with the terms of these
Provisions shall be made by uncertified, unendorsed check of Escrow Agent or
by cashier's check, at Escrow Agent's option. Escrow Agent agrees, upon
request, to provide the parties with its (or the Bank's) computation of the
Invested Downpayment. It shall be conclusively presumed that: (i) any and
all investments made by Escrow Agent in an Appropriate Investment are
authorized and permitted under the terms of these Provisions; (ii) the
parties hereto have agreed to and concurred in all such Appropriate
Investments; (iii) by so investing the Downpayment, Escrow Agent has complied
with its investment obligations pursuant to these Provisions; and (iv)
G-2
Escrow Agent's (or the Bank's) computation of the Invested Downpayment is
correct in the absence of manifest error.
2. If all of the conditions to Closing, as set forth in Section
5 of the Agreement to which this Exhibit G is attached, shall be met and the
Closing shall be consummated on the Closing Date, then on the Closing Date
Escrow Agent shall deliver to Seller the Invested Downpayment against a
signed receipt therefor. Escrow Agent shall also deliver the Invested
Downpayment in accordance with written instructions signed by both Purchaser
and Seller, specifying the party to whom the same is to be delivered (the
"DESIGNATED PARTY") and the time and place where the same is to be delivered,
such delivery to be made against a signed receipt therefor from the
Designated Party. If Escrow Agent shall receive written instructions signed
by either Purchaser or Seller specifying itself as the Designated Party and a
time and place where the Invested Downpayment is to be delivered to such
party, Escrow Agent shall deliver the same to such party against a signed
receipt therefor from such party; PROVIDED, HOWEVER, that: (a) such
Designated Party shall have delivered to Escrow Agent a written certification
to the effect that such party has delivered or contemporaneously is
delivering a copy of said written instructions to the other party (together
with a certificate of mailing from the United States postal service therefor
in the case of a copy sent to the other party by mail and a shipping receipt
in the case of a copy sent by express courier) and (b) Escrow Agent shall not
have received within ten (10) days after the sending of said copy contrary
instructions from the said other party; PROVIDED, FURTHER, HOWEVER, that
compliance with the preceding clause (b) shall not be required for any notice
of termination given by Purchaser prior to the Contingency Date. In the
event that Escrow Agent shall receive such contrary instructions, Escrow
Agent shall not so deliver the Invested Downpayment but shall hold or deposit
the same in accordance with the terms of Paragraph 4 hereof. Upon the
delivery of the Invested Downpayment in accordance with this Paragraph 2,
Escrow Agent shall thereupon be relieved of and discharged and released from
any and all liability hereunder and with respect to the Invested Downpayment.
3. If at any time Escrow Agent shall receive a certificate of
either Seller or Purchaser (the "CERTIFYING PARTY") to the effect that: (i)
the other party (the "OTHER PARTY") has defaulted under this Agreement or
that this Agreement has otherwise been terminated or cancelled; (ii) a copy
of the certificate and a statement in reasonable detail of the basis for the
claimed default, termination or cancellation was mailed as provided herein to
the Other Party prior to or contemporaneous with the giving of such
certificate to Escrow Agent; and (iii) in the case of a claimed default, to
the knowledge of the Certifying Party, the claimed default has not been
cured, then, unless Escrow Agent shall have received contrary instructions
from the Other Party within ten (10) days of Escrow Agent's receipt of said
certificate, Escrow Agent shall, within ten (10) days of the expiration of
such ten (10) day period, deliver the Invested Downpayment to the Certifying
Party and thereupon be relieved of and discharged and released from any and
all liability hereunder and with respect to the Invested Downpayment. If
Escrow Agent shall receive contrary instructions from the Other Party within
ten (10) days of Escrow
G-3
Agent's receipt of said certificate, Escrow Agent shall not so deliver the
Invested Downpayment but shall hold or deposit the same in accordance with
the terms of Paragraph 4 hereof.
4. In the event that: (i) Escrow Agent shall not have received
instructions pursuant to this Agreement on or prior to the latest of the
originally scheduled Closing Date and all New Closing Dates, if any (the
"LATEST CLOSING DATE"); (ii) the closing under this Agreement shall not have
occurred on or prior to the Latest Closing Date; (iii) Escrow Agent shall
receive contrary instructions from the parties hereto; (iv) any dispute shall
arise as to any matter arising under these Provisions; (v) any alleged
default by Seller or Purchaser under this Agreement shall occur; or (vi)
there shall be any uncertainty as to the meaning or applicability of any of
these Provisions, Escrow Agent's duties, rights or responsibilities hereunder
or any written instructions received by Escrow Agent pursuant hereto, Escrow
Agent may, at its option at any time thereafter, deposit the funds and/or
instruments then being held by it in escrow into any court having appropriate
jurisdiction, or take such affirmative steps as it may elect in order to
substitute an impartial party to hold any and all escrowed funds and/or
instruments, and upon making such deposit, shall thereupon be relieved of and
discharged and released from any and all liability hereunder and with respect
to the Invested Downpayment or any portion thereof so deposited.
5. Escrow Agent shall be entitled to rely upon the authenticity
of any signature and the genuineness and/or validity of any writing received
by Escrow Agent pursuant to or otherwise relating to these Provisions.
6. If any term, condition or provision of these Provisions, or
the application thereof to any circumstance or party hereto, shall ever be
held to be invalid or unenforceable, then in each such event the remainder of
these Provisions or the application of such term, condition or provision to
any other circumstance or party hereto (other than those as to which it shall
be invalid or unenforceable) shall not be thereby affected, and each term,
condition and provision hereof shall remain valid and enforceable to the
fullest extent permitted by law.
EXHIBIT H
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS, that THE STROH COMPANIES, INC., a
Delaware corporation having an office at 100 River Place, Detroit, MI
48207-4291 ("SELLER"), for Ten Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
paid by COPART, INC., a California corporation having an office at 5500 E.
Second Street, Second Floor, Benicia, CA 94510 ("PURCHASER"), has granted,
conveyed, bargained and sold and by these presents does grant, convey,
bargain and sell unto Purchaser, its successors and assigns, all of Seller's
right, title and interest in and to fixtures, equipment and personal property
listed on Schedule 1 attached hereto and hereby made a part hereof and to all
of Seller's right, title and interest in and to all of the other fixtures,
equipment and personal property, if any, owned by Seller and attached or
appurtenant to, located on and used in connection with the ownership, use,
operation or maintenance of that certain property and having a street address
at 7521 Woodman Avenue, Los Angeles, CA, and more particularly described in
Schedule 2 hereto and the buildings, structures, facilities or improvements
presently located or hereinafter located thereon (all of the foregoing being
hereinafter collectively referred to as the "Personal Property").
TO HAVE AND TO HOLD the Personal Property unto Purchaser, its
successors and assigns, forever.
SELLER hereby sells, transfers, delivers, grants and conveys the
Personal Property in its "AS IS" condition, without any representation,
warranty or recourse, and any representation or warranty of merchantability
or fitness and any right to recourse against Seller is hereby expressly
excluded, except that Seller represents and warrants that the personal
property described on Schedule 1 is free and clear of all liens or
encumbrances.
IN WITNESS WHEREOF, Seller has duly executed this Bill of Sale,
as of this [______________].
SELLER:
THE STROH COMPANIES, INC.
By:
-------------------------------
Name: Christopher T. Sortwell
Title: Treasurer
SCHEDULE 1 TO EXHIBIT H
DESCRIPTION OF THE PERSONAL PROPERTY
1 steel desk
2 office chairs (wood structure, cloth padded)
1 wood bookcase
1 steel safe
1 4-drawer, filing cabinet
1 supply steel cabinet
1 wood steel framed table
1 water cooler
3 small plastic trash containers
3 100 ft. hoses
2 weeder grass cutters
1 submersible sump pump (3 horsepower) located Southeast of bottling plant
1 sump pump located in powerhouse basement
SCHEDULE 2 TO EXHIBIT H
LEGAL DESCRIPTION OF LAND
ALL THAT CERTAIN piece, parcel and tract of land, situated in the
State of California, County of Los Angeles and City of Los Angeles, described
as follows:
Assessor's Parcel Number:
EXHIBIT I
ASSIGNMENT AND ASSUMPTION OF
LEASES, SECURITY DEPOSITS AND PREPAID RENTS
THIS ASSIGNMENT AND ASSUMPTION, made as of [______________], by
and between THE STROH COMPANIES, INC., a Delaware corporation having an
office at 100 River Place, Detroit, MI 48207-4291 ("SELLER"), and COPART,
INC., a California corporation having an office at 5500 E. Second Street,
Second Floor, Benicia, CA 94510 ("PURCHASER").
W I T N E S S E T H :
WHEREAS, by Contract of Sale, dated as of __________ ___, 1996
(the "CONTRACT OF SALE"), between Seller and Purchaser, Purchaser agreed to
purchase from Seller and Seller agreed to sell to Purchaser certain real
property described on Schedule 1 annexed hereto and made a part hereof and
the buildings and other improvements thereon, as more fully described in the
Contract of Sale (the "PROPERTY"); and
WHEREAS, the Contract of Sale provides, INTER ALIA, that Seller
shall assign to Purchaser all of Seller's interest in and to the leases and
licenses and other agreements granting rights of occupancy to tenants and
affecting the Property and that Purchaser shall accept such assignment and
assume the obligations of landlord under the said leases, licenses and other
agreements all as more fully provided in the Contract of Sale.
NOW, THEREFORE, in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are
acknowledged, Seller and Purchaser hereby agree as follows:
1. ASSIGNMENT AND ASSUMPTION OF THE LEASES. Seller hereby
assigns, sets over and transfers to Purchaser, to have and to hold from and
after the date hereof, all of Seller's right, title and interest, as
landlord, in, to and under those certain leases and other agreements listed
on Schedule 2 annexed hereto and made a part hereof (the "LEASES"),
including, without being limited to, all of Seller's right, title and
interest in, to and under any prepaid rent, security deposits or other sums
held by Seller as landlord under any of the Leases. Purchaser hereby accepts
the within assignment and assumes and agrees with Seller to perform and
comply with and to be bound by all of the terms, covenants, agreements,
provisions and conditions of the Leases on the part of the landlord
thereunder to be performed on and after the date hereof, in the same manner
and with the same force and effect as if Purchaser had originally executed
the Leases as landlord. Seller shall remain liable for all leasing
commissions, fees or expenses, if any, due with respect to the current term
of Leases entered into on or prior to the date of the Contract of Sale
regardless of when such commissions are due or accrue (excluding, however,
I-2
with respect to all renewals, or extensions or expansions thereof) and hereby
unconditionally, absolutely and irrevocably agrees to indemnify, defend and
hold harmless Purchaser of, from and against any and all costs, claims,
obligations, damages, penalties, causes of action, losses, injuries,
liabilities and expenses (including, without being limited to, reasonable
attorney's fees and disbursements), of whatever kind or nature, arising out
of, in connection with or with respect to (i) any claim for any such leasing
commissions or (ii) any breach by Seller under the Leases with respect to
the period prior to the date hereof.
2. INDEMNIFICATION. Purchaser hereby unconditionally,
absolutely and irrevocably agrees to indemnify and to hold harmless Seller
of, from and against any and all costs, claims, obligations, damages,
penalties, causes of action, losses, injuries, liabilities and expenses
(including, without being limited to, reasonable attorney's fees and
disbursements), of whatever kind or nature, arising out of, in connection
with or accruing under the Leases from and after the date hereof, including,
without being limited to, any such liabilities or expenses arising in
connection with any prepaid rent, security deposit or other sums held by
Purchaser as the landlord under any of the Leases or arising in connection
with brokerage commissions for any renewal, extension or expansion options
exercised from and after the date of the Contract of Sale (including, without
limitation, in respect of any Lease entered into on or prior to the date of
the Contract of Sale), regardless of when such commissions are due or accrue.
3. MISCELLANEOUS. This Assignment and the obligations of Seller
and Purchaser hereunder shall survive the closing of the transactions
referred to in the Contract of Sale, shall be binding upon and inure to the
benefit of Seller and Purchaser and their respective successors and assigns,
shall be governed by and construed in accordance with the laws of the State
of California and may not be modified or amended in any manner other than by
a written agreement signed by the party to be charged therewith.
IN WITNESS WHEREOF, Seller and Purchaser have duly executed this
Assignment as of the day and year first above written.
SELLER:
THE STROH COMPANIES, INC.
By:
-------------------------------
Name: Christopher T. Sortwell
Title: Treasurer
I-3
PURCHASER:
COPART, INC.
By:
------------------------
Name:
Title:
I-4
STATE OF ______________)
) ss.:
COUNTY OF _____________)
On this day of , in the year of 1996, before me
[HERE INSERT NAME AND QUALITY OF THE OFFICER], personally appeared
Christopher T. Sortwell, personally known to me (or proved to me on the basis
of satisfactory evidence) to be the person who executed the within instrument
as president (or secretary) or on behalf of the corporation therein named and
acknowledged to me that the corporation executed it.
______________________________
[Notary Public]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ____________ )
On this ____ day of ____________, in the year 1996, before me
[HERE INSERT THE NAME AND QUALITY OF THE OFFICER], personally appeared
__________, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person who executed the within instrument as
president (or secretary) or on behalf of the corporation therein named and
acknowledged to me that the corporation executed it.
______________________________
[Notary Public]
SCHEDULE 1 TO EXHIBIT I
DESCRIPTION OF LAND
ALL THAT CERTAIN piece, parcel and tract of land, situated in the
State of California, County of Los Angeles and City of Los Angeles, described
as follows:
Assessor's Parcel Number:
SCHEDULE 2 TO EXHIBIT I
LEASES AND OTHER OCCUPANCY AGREEMENTS
I. LEASES
Lease by and between The Stroh Companies, Inc., as Landlord, and Los Angeles
SMSA Limited Partnership, as Tenant, dated as of January 31, 1995.
Lease by and between The Stroh Companies, Inc., as Lessor, and California
Moving and Storage Company, as Lessee, dated December 1, 1994.
EXHIBIT J
GENERAL ASSIGNMENT AND ASSUMPTION
THIS ASSIGNMENT AND ASSUMPTION, made as of [______________], by
and between THE STROH COMPANIES, INC., a Delaware corporation having an
office at 100 River Place, Detroit, MI 48207-4291 ("SELLER"), and COPART,
INC., a California corporation having an office at 5500 E. Second Street,
Second Floor, Benicia, CA 94510 ("PURCHASER").
W I T N E S S E T H :
WHEREAS, by Contract of Sale, dated as of _____ __, 1996 (the
"CONTRACT OF SALE"), between Seller and Purchaser, Purchaser agreed to
purchase from Seller and Seller agreed to sell to Purchaser certain real
property described on Schedule I annexed hereto and made a part hereof and
the buildings and other improvements thereon and other property all as more
fully defined in the Contract of Sale as the "PROPERTY"; and
WHEREAS, the Contract of Sale provides, INTER ALIA, that Seller
shall assign to Purchaser the certificates, licenses and permits listed on
Schedule II annexed hereto (collectively, the "PERMITS"), the service,
maintenance, supply and management contracts and agreements listed on
Schedule II annexed hereto (collectively, the "SERVICE CONTRACTS") and all of
Seller's right, title and interest in the sewer facility charges relating to
the Property (the "SEWER FACILITY CREDITS"), and that Purchaser shall accept
such assignment and assume the obligations of Seller under the Service
Contracts, all as more fully provided in the Contract of Sale.
NOW, THEREFORE, in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Seller hereby agrees as follows:
1. Seller hereby assigns, sets over and transfers to Purchaser,
to have and to hold from and after the date hereof, all of Seller's right,
title and interest in, to and under the Permits, the Service Contracts and
the Sewer Facility Credits, and Purchaser hereby accepts the within
assignment and assumes and agrees with Seller to perform and comply with and
to be bound by all the terms, covenants, agreements, provisions and
conditions of the Service Contracts on the part of the owner of the Property
thereunder to be performed on and after the date hereof, in the same manner
and with the same force and effect as if Purchaser had originally executed
the Service Contracts as the owner of the Property.
J-2
2. Purchaser hereby unconditionally, absolutely and irrevocably
agrees to indemnify and hold Seller harmless of, from and against any and all
costs, claims, obligations, damages, penalties, causes of action, losses,
injuries, liabilities and expenses, including, without limitation, reasonable
attorneys' fees and disbursements, arising out of, in connection with or
accruing under the Service Contracts on and after the date hereof.
3. Seller hereby unconditionally, absolutely and irrevocably
agrees to indemnify and hold Purchaser harmless of, from and against any and
all costs, claims, obligations, damages, penalties, causes of action, losses,
injuries, liabilities and expenses, including, without limitation, reasonable
attorneys' fees and disbursements, arising out of, in connection with or
accruing under the Service Contracts before the date hereof.
4. (a) This Agreement shall not be construed as a
representation or warranty by Seller as to the transferability of the
Permits, the Service Contracts or the Sewer Facility Credits, and Seller
shall have no liability to Purchaser in the event that any or all of the
Permits, the Service Contracts or the Sewer Facility Credits (i) are not
transferable to Purchaser or (ii) are cancelled or terminated by reason of
this assignment or any acts of Purchaser. The within assignment of the Sewer
Facility Credits is made without any representation or warranty of, or
recourse to, Seller.
(b) This Assignment and the obligations of Seller and Purchaser
hereunder shall survive the closing of the transactions referred to in the
Contract of Sale, shall be binding upon and inure to the benefit of Seller
and Purchaser, and their respective successors and assigns, shall be governed
by and construed in accordance with the laws of the State of California and
may not be modified or amended in any manner other than by a written
agreement signed by the party to be charged therewith.
IN WITNESS WHEREOF, Seller and Purchaser have duly executed this
Assignment as of the day and year first above written.
SELLER:
THE STROH COMPANIES, INC.
By: ________________________________
Name: Christopher T. Sortwell
Title: Treasurer
J-3
PURCHASER:
COPART, INC.
By: _____________________________
Name:
Title:
J-4
STATE OF_________ )
) ss.:
COUNTY OF _______ )
On this ____ day of ___________ , in the year 1996, before me
[HERE INSERT NAME AND QUALITY OF THE OFFICER], personally appeared
Christopher T. Sortwell, personally known to me (or proved to me on the basis
of satisfactory evidence) to be the person who executed the within instrument
as president (or secretary) or on behalf of the corporation therein named and
acknowledged to me that the corporation executed it.
______________________________
[Notary Public]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF _____________ )
On this ____ day of ___________ , in the year 1996, before me
[HERE INSERT THE NAME AND QUALITY OF THE OFFICER], personally appeared
_________________, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person who executed the within instrument as
president (or secretary) or on behalf of the corporation therein named and
acknowledged to me that the corporation executed it.
______________________________
[Notary Public]
SCHEDULE I TO EXHIBIT J
DESCRIPTION OF LAND
ALL THAT CERTAIN piece, parcel and tract of land, situated in the
State of California, County of Los Angeles and City of Los Angeles, described
as follows:
Assessor's Parcel Number:
SCHEDULE II TO EXHIBIT J
PERMITS
SERVICE CONTRACTS
EXHIBIT K
[Intentionally Omitted]
EXHIBIT L
TENANT LETTER FORM
[LETTERHEAD OF SELLER]
_______________________ , 19__
[Name and Address of Tenant]
7521 WOODMAN AVENUE
Gentlemen:
This is to inform you that The Stroh Companies, Inc., has this
day sold the captioned property to Copart, Inc. ("PURCHASER") and has
transferred to Purchaser all leases, security deposits, if any, and other
matters relating to your tenancy.
Purchaser has appointed [Name new Managing Agent] to manage the
captioned property. After the date hereof, you should make all payments of
rent and direct all notices and requests regarding your tenancy to
[Name and address of recipient of rent and notices].
Very truly yours,
SELLER:
THE STROH COMPANIES, INC.
By: ________________________________
Name: Christopher T. Sortwell
Title: Treasurer
L-2
PURCHASER:
COPART, INC.
By: __________________________________
Name:
Title:
EXHIBIT M
FIRPTA AFFIDAVIT
Section 1445 of the Internal Revenue Code provides that a
transferee of a U.S. real property interest must withhold tax if the
transferor is a foreign person. To inform Copart, Inc. that withholding of
tax is not required upon the disposition of a U.S. real property interest by
The Stroh Companies, Inc., the undersigned hereby certifies the following on
behalf of The Stroh Companies, Inc.:
1. The Stroh Companies, Inc. is not a foreign corporation,
foreign partnership, foreign trust, or foreign estate (as those terms
are defined in the Internal Revenue Code and Income Tax Regulations);
2. The Stroh Companies, Inc.'s U.S. employer identification
number is [______________]; and
3. The Stroh Companies, Inc.'s office address is 100 River
Place, Detroit, MI 48207-4291.
The Stroh Companies, Inc. understands that this certification may be
disclosed to the Internal Revenue Service by transferee and that any false
statement contained herein could be punished by fine, imprisonment, or both.
Under penalties of perjury I declare that I have examined this
certification and to the best of my knowledge and behalf it is true, correct
and complete, and I further declare that I have authority to sign this
document on behalf of The Stroh Companies, Inc.
Date: [______________]
SELLER:
THE STROH COMPANIES, INC.
By: ________________________________
Name: Christopher T. Sortwell
Title: Treasurer
EXHIBIT N
FORM OF TENANT ESTOPPEL CERTIFICATE
_______________________ , 1996
To:
______________________________
______________________________
______________________________
______________________________
Re: Lease Dated: _____________________________________
Landlord: ____________________________________________
_______________________________ ("Landlord")
Tenant: ____________________________________________
_________________________________ ("Tenant")
Premises: Approximately _______ square feet located at
_______________________________ ("Premises")
Ladies and Gentlemen:
The undersigned hereby certifies to Landlord and _____________________
______________, a ______________________, or its assigns ("Buyer") as of the
date hereof as follows:
1. The undersigned is the "Tenant" under the above-referenced
lease ("Lease") covering the above-referenced Premises ("Premises").
2. The Lease, attached hereto as EXHIBIT "A", constitutes the
entire agreement between Landlord and Tenant with respect to the Premises and
the Lease has not been modified, changed, altered or amended in any respect
as follows (if none, so state): _____________________________________________
_____________________________________________________________________________.
3. The term of the Lease commenced on _____________, 19__,
and, including any presently exercised option or renewal term, will expire on
_____________, 19__. Tenant has accepted complete possession of the Premises
and is the actual occupant in possession and, except for ____________, has
not sublet, assigned or hypothecated or otherwise transferred all or any
portion of Tenant's leasehold interest. All improvements to be constructed
on the Premises by Landlord have been completed to the satisfaction of Tenant
and accepted by Tenant and any tenant construction allowances have been paid
in full. All duties of an inducement nature required of the Landlord in the
Lease have been fulfilled. All of the Landlord's obligations which have
accrued prior to the date hereof have been performed.
N-2
4. To Tenant's knowledge, there exists no breach or default,
nor state of facts nor condition which, with notice, the passage of time, or
both, would result in a breach or default on the part of either Tenant or
Landlord. To the best of Tenant's knowledge, no claim, controversy, dispute,
quarrel or disagreement exists between Tenant and Landlord.
5. Tenant is currently obligated to pay base annual rental in
monthly installments of $___________ per month and monthly installments of
annual rental have been paid through _______________, 19__. No other rent
has been paid in advance and Tenant has no claim or defense against Landlord
under the Lease and is asserting no offsets or credits against either the
rent or Landlord. Tenant has no security, rental, cleaning or other
deposits, except for a security deposit in the amount of $________________
which was paid pursuant to the Lease.
6. The Lease is in full force and effect in accordance with
its terms and is a binding obligation of the undersigned.
7. The undersigned has received no notice of prior sale,
transfer, assignment, hypothecation or pledge of the Lease or of the rents
secured therein, except to Buyer.
8. Tenant has no option or preferential right to purchase all
or any part of the Premises (or the real property of which the Premises are a
part) nor any right or interest with respect to the Premises or the real
property of which the Premises are a part other than as set forth in the
Lease. Tenant has no right to renew or extend the terms of the Lease or
expand the Premises except as set forth in the Lease.
9. Tenant has made no agreement with Landlord or any agent,
representative or employee of Landlord concerning free rent, partial rent,
rebate of rental payments or any other type of rental or other economic
inducement or concession except as expressly set forth in the Lease.
10. There has not been filed by or against Tenant a petition in
bankruptcy, voluntary or otherwise, any assignment for the benefit of
creditors, any petition seeking reorganization or arrangement under the
bankruptcy laws of the United States, or any state thereof, or any other
action brought under said bankruptcy laws with respect to Tenant.
11. All insurance required of Tenant by the Lease has been
provided by Tenant and all premiums paid.
12. The undersigned (i) is not presently engaged in nor does it
presently permit, (ii) has not at any time in the past engaged in nor
permitted, any operations or activities upon, or any use or occupancy of the
Premises, or any portion thereof, for the purpose of or in any way involving
the handling, manufacturing, treatment, storage, use, transportation,
spillage, leakage, dumping, discharge or disposal (whether legal or illegal,
accidental or intentional) of any
N-3
radioactive, toxic or hazardous substances, materials or wastes, or any
wastes regulated under any local, state or federal law, except as follows:
___________________________________________________________________________
_________________________________________________ (if none, so state).
13. The undersigned acknowledges that:
(a) Buyer or Buyer's assignee is purchasing Landlord's interest
in the property which includes the Premises and, in connection with that
purchase, will be receiving an assignment of Landlord's interest under the
Lease;
(b) Landlord, Buyer and Buyer's successors, agents and assigns
(including, but not limited to subsequent purchasers, lenders and title
insurers) will be relying upon each of the statements contained herein in
connection with Buyer's purchase of the property of which the Premises are a
part and but for the assurances and agreements contained herein Buyer would
not purchase the property of which the Premises are a part; and
(c) The undersigned will attorn to and recognize Buyer as the
Landlord under the Lease and will pay all rents and other amounts due
thereunder to Buyer upon notice to the undersigned that Buyer has become the
owner of Landlord's interest in the Premises under the Lease.
______________________________,
a ____________________________
By: __________________________
Its: _____________________
EXHIBIT O
SERVICE CONTRACTS
1. Wells Fargo Guard Services security
2. Stay Green, Inc. landscaping
3. Waste Management trash
4. Arrowhead bottled water
EXHIBIT P
ENVIRONMENTAL DISCLOSURE
Copart uses, stores, handles and disposes of Hazardous Materials in
connection with its salvage pool business conducted on the Property.
Asbestos containing materials are present in the roofing materials of the
buildings on the Property.
Former brewery operations involved the storage and use of hazardous materials
as defined by the Los Angeles Fire Department. The brewery was registered
with the Los Angeles Fire Department (File 036081-001-0) for disclosure of
hazardous substances onsite. (See LAFD Application for Certificate of
Disclosure of Hazardous Substances (file 036081-001-0) December 1986.)
Former underground storage tanks were closed and removed from the Property as
follows:
1,000 gallon gasoline removed 1989
30,000 gallon No. 5 fuel oil removed 1990
30,000 gallon No. 5 fuel oil removed 1990
50,000 gallon No. 5 fuel oil removed 1990
50,000 gallon No. 5 fuel oil removed 1990