Exhibit 10.39
PURCHASE AGREEMENT
BETWEEN
NOM ENTERPRISE, LLC
AS SELLER
AND
SERIES C, LLC
AND/OR ITS NOMINEE
AS BUYER
OCTOBER 25, 2005
PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
DATED: Dated to be effective as of October 25, 2005 (the "Effective Date").
PARTIES: This Purchase Agreement is between NOM ENTERPRISE, LLC, as "Seller",
and SERIES C, LLC, and/or its Nominee, as "Buyer".
RECITALS:
A. As of the Effective Date, Seller is the fee title owner of that certain
improved property located at the intersection of U.S. Highway 84 and Alabama
Highway 248 (a/k/a Glover Avenue), in Enterprise, Alabama, as legally described
on Exhibit A attached hereto (the "Real Property").
B. As of the Effective Date, the Real Property is improved with a building
containing approximately 14,564 square feet, or will be so improved prior to COE
(the "Building"), which Building is leased to Rite Aid Corporation ("Tenant") in
accordance with a written lease (the "Lease"), or will be so leased prior to
COE. The Real Property, the Building, the improvements to the Real Property (the
"Improvements"), the personal property, if any, of Seller located on the Real
Property and Seller's interest in the Lease and all rents issued and profits due
or to become due thereunder are hereinafter collectively referred to as the
"Property."
C. Buyer desires to purchase the Property from Seller and Seller desires to
sell the Property to Buyer free and clear of all liens, all as more particularly
set forth in this Purchase Agreement (the "Agreement").
AGREEMENTS:
NOW THEREFORE, in consideration of the promises set forth in this Agreement
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, Seller and Buyer (the "Parties" or a "Party") hereby
agree as follows:
1. INCORPORATION OF RECITALS. All of the foregoing Recitals are hereby
incorporated as agreements of the Parties.
2. BINDING AGREEMENT. This Agreement constitutes a binding agreement
between Seller and Buyer for the sale and purchase of the Property subject to
the terms set forth in this Agreement. Subject to the limitations set forth in
this Agreement, this Agreement shall bind and inure to the benefit of the
Parties and their respective successors and assigns. This Agreement supersedes
all other written or verbal agreements between the Parties concerning the
transaction embodied in this Agreement. No claim of waiver or modification
concerning the provision of this Agreement shall be made against a Party unless
based upon a written instrument signed by such Party.
3. INCLUSIONS IN PROPERTY.
3.1 The Property. The term "Property" shall also include the
following:
(i) all tenements, hereditaments and appurtenances pertaining to
the Real Property;
(ii) all mineral, water and irrigation rights, if any, running
with or otherwise pertaining to the Real Property;
(iii) all interest, if any, of Seller in any road adjoining the
Real Property, to the center line thereof;
(iv) all interest, if any, of Seller in any award made or to be
made or settlement in lieu thereof for damage to the Property by reason of
condemnation, eminent domain or exercise of police power;
(v) all of Seller's interest in the Building, the Improvements
and any other improvements and fixtures on the Real Property;
(vi) all of Seller's interest in any equipment, machinery and
personal property on or used in connection with the Real Property (the
"Personalty");
(vii) the Lease and security deposit, if any, now or hereafter
due thereunder; and
(viii) all of Seller's interest, to the extent transferable, in
all permits and licenses (the "Permits"), warranties (specifically including,
without limitation, the general contractor's one-year construction warranty with
respect to construction of the Building and other Improvements on the Real
Property and any warranty related to the roof of the Building), contractual
rights and intangibles (including rights to the name of the improvements,
subject to any required approvals, as well as architectural/engineering plans)
with respect to the operation, maintenance, repair or improvement of the
Property (the "Contracts").
3.2 The Transfer Documents. Except for the Personalty which shall be
transferred by that certain bill of sale from Seller to Buyer, a specimen of
which is attached hereto as Exhibit B (the "Bill of Sale"), the Lease which is
to be transferred by that certain assignment of lease, a specimen of which is
attached hereto as Exhibit C (the "Assignment of Lease"), and the Permits and
Contracts which are to be transferred by that certain assignment agreement, a
specimen of which is attached hereto as Exhibit D (the "Assignment Agreement"),
all components of the Property shall be transferred and conveyed by execution
and delivery of Seller's special warranty deed, a specimen of which is attached
hereto as Exhibit E (the "Deed"). The Bill of Sale, the Assignment of Lease, the
Assignment Agreement and the Deed are hereinafter collectively referred to as
the "Transfer Documents".
4. PURCHASE PRICE. The price to be paid by Buyer to Seller for the Property
is THREE MILLION SEVEN HUNDRED FOURTEEN THOUSAND and NO/100 DOLLARS
($3,714,000.00) (the "Purchase Price"), payable as follows:
(i) One Hundred Thousand and No/100 Dollars ($100,000.00) earnest
money (the "Earnest Money Deposit") to be deposited in escrow with Fidelity
National Title Insurance Company, 40 North Central Avenue, Suite 2850, Phoenix,
Arizona 85004, Attention: Ms. Mary Garcia ("Escrow Agent") not later than five
(5) business days following the receipt by Escrow Agent of a fully-executed
original of this Agreement (said receipt by Escrow Agent of both a
fully-executed original of this Agreement and the Earnest Money Deposit, the
"Opening of Escrow"), which Earnest Money Deposit is to be held by Escrow Agent
until released to Seller or Buyer as provided herein or paid to Seller at close
of escrow ("COE"); and
(ii) the balance in additional cash, or other immediately available
funds (as may be increased or decreased by such sums as are required to take
into account any additional deposits, prorations, credits, or other adjustments
required by this Agreement), to be deposited in escrow with Escrow Agent on or
before COE (the "Additional Funds") which is to be held by Escrow Agent until
cancellation of this Agreement as provided herein or paid to Seller at COE.
5. DISPOSITION OF EARNEST MONEY DEPOSIT Seller and Buyer hereby instruct
Escrow Agent to place the Earnest Money Deposit in a federally insured
interest-bearing passbook account on behalf of Seller and Buyer. The Earnest
Money Deposit and interest thereon shall be applied as follows:
(i) if Buyer cancels this Agreement as Buyer is so entitled to do as
provided in this Agreement, the Earnest Money Deposit and all interest earned to
the effective date of withdrawal shall be paid immediately to Buyer;
(ii) if the Earnest Money Deposit is forfeited by Buyer pursuant to
this Agreement, such Earnest Money Deposit and all interest earned to the date
of withdrawal shall be paid to Seller as Seller's agreed and
total liquidated damages, it being acknowledged and agreed that it would be
difficult or impossible to determine Seller's exact damages; and
(iii) if escrow closes, the Earnest Money Deposit and all interest
earned to COE shall be credited to Buyer, automatically applied against the
Purchase Price and paid to Seller at COE.
6. PRELIMINARY TITLE REPORT AND OBJECTIONS. Within two (2) days after the
Opening of Escrow, Seller shall order from Escrow Agent a current Preliminary
Title Report (the "Report") for an ALTA extended coverage title insurance policy
(the "Owner's Policy") on the Property to Buyer and Seller. The Report shall
show the status of title to the Property as of the date of the Report and shall
also describe the requirements of Escrow Agent for the issuance of the Owner's
Policy as described herein. The cost of standard coverage under the Owner's
Policy shall be paid by the Seller. Any additional costs for endorsements
required by Buyer (specifically excluding all endorsements obtained by Seller to
cure one or more title matters objectionable to Buyer) and any additional costs
for extended coverage under the Owner's Policy shall be paid by Buyer. In
addition to the Report, Escrow Agent shall simultaneously deliver to Buyer
legible copies of all documents identified in Part Two of Schedule B of the
Report. If Buyer is dissatisfied with any exception to title as shown in the
Report, then Buyer may either, by giving written notice thereof to Escrow Agent
(i) on or before expiration of the Study Period (as defined below) or (ii) ten
(10) days from Buyer's receipt of the Report, whichever is later, (a) cancel
this Agreement, whereupon the Earnest Money Deposit plus interest shall be
returned to Buyer together with all documents deposited in escrow by Buyer, or
(b) provisionally accept the title subject to Seller's agreement to cause the
removal of any disapproved exceptions or objections, in which case Seller shall
(at its sole cost) remove the exceptions or objections (or, if acceptable to
Buyer, obtain title insurance endorsements over the exceptions and objections)
before COE. Seller shall notify Buyer in writing within five (5) days after
receiving Buyer's written notice of disapproval of any exception, if Seller does
not intend to remove (or endorse over) any such exception and/or objection.
Seller's lack of response shall be deemed as Seller's refusal to remove any of
the objectionable exceptions (or obtain title insurance endorsements over said
exceptions and objections) prior to COE. In the event the Report is amended to
include new exceptions that are not set forth in a prior Report, Buyer shall
have until the later of (i) the expiration of the Study Period, or (ii) the date
seven (7) days after Buyer's receipt of the amended Report and copies of the
documents identified in the new exceptions or new requirements, within which to
cancel this Agreement and receive a refund of the Earnest Money Deposit plus
interest or to provisionally accept the title subject to Seller's agreement to
cause the removal of any disapproved exceptions or objections. If Seller serves
notice to Buyer that Seller does not intend to remove such exceptions and
objections before COE, Buyer shall, within ten (10) days thereafter, notify
Seller and Escrow Agent in writing of Buyer's election to either (i) terminate
this Agreement, whereupon the Earnest Money Deposit plus interest shall be
returned to Buyer and all obligations shall terminate, or (ii) Buyer may waive
such objections and the transaction shall close as scheduled. If written notice
of dissatisfaction is not timely given by Buyer to Seller pursuant to this
Article 6, then Buyer shall be deemed to have approved of the condition of the
title of the Property as shown by the Report.
7. BUYER'S STUDY PERIOD.
7.1 The Study Period. Buyer shall have until the later of 5:00 p.m.
MST on (i) the thirtieth (30th) day after the Opening of Escrow, (ii) thirty
(30) days from Buyer's receipt of all deliveries of Seller's Diligence Materials
(as hereinafter defined), (iii) that day which is ten (10) days from Buyer's
receipt of the Report and legible copies of all documents identified in Part Two
of Schedule B of the Report, or (iv) that day which is ten (10) days from
Buyer's receipt of the Survey (as hereinafter defined) (the "Study Period"), at
Buyer's sole cost, within which to conduct and approve any investigations,
studies or tests deemed necessary by Buyer, in Buyer's sole discretion, to
determine the feasibility of acquiring the Property, including, without
limitation, Buyer's right to: (i) review and approve the Survey, the Lease,
Seller's operating statements with respect to the Property, and the Contracts;
(ii) subject to advance notice to Seller and Tenant, meet and confer with
Tenant; and, (iii) obtain, review and approve an environmental study of the Real
Property and Building (collectively, "Buyer's Diligence").
7.2 Right of Entry. Subject to the prior rights of the Tenant of the
Property, Seller hereby grants to Buyer and Buyer's agents, employees and/or
contractors the right to enter upon the Property, at any time or times during
the Study Period, to conduct Buyer's Diligence. In consideration therefor, Buyer
shall and does hereby agree to indemnify and hold Seller harmless from any and
all liabilities, claims, losses or damages, including, but
not limited to, court costs and attorneys' fees, which may be incurred by Seller
as a direct result of Buyer's Diligence. Buyer's indemnity and hold harmless
obligation shall survive cancellation of this Agreement or COE.
7.3 Cancellation. Unless Buyer so notifies Seller or Escrow Agent, in
writing, on or before the end of the Study Period of Buyer's acceptance of
Buyer's Diligence and waiver of the contingencies as set forth in this Article
7, this Agreement shall be canceled and the Earnest Money Deposit plus interest
shall be returned immediately to Buyer and, except as otherwise provided in this
Agreement, neither of the Parties shall have any further liability or obligation
under this Agreement.
8. DELIVERY OF SELLER'S DILIGENCE MATERIALS.
8.1 Deliveries to Buyer. Seller agrees to deliver to Buyer
contemporaneously with the Opening of Escrow all information in Seller's
possession or control relating to the leasing, operating, maintenance, repair,
zoning (including any zoning verification letters), platting, engineering, soil
tests, water tests, environmental tests, construction (including the Certificate
of Occupancy for the Property), master planning, architectural drawings and like
matters regarding the Property (collectively, "Seller's Diligence Materials"),
all at no cost to Buyer. The foregoing deliveries shall include those items
listed on the attached Exhibit F.
8.2 Delivery by Buyer. If this Agreement is canceled for any reason,
except Seller's willful default hereunder, Buyer agrees to deliver to Seller
upon payment by Seller to Buyer of Buyer's cost thereof, copies of those
investigations, studies and/or tests which Buyer may have elected to obtain.
9. THE SURVEY. Buyer, at Buyer's cost, shall cause a certified ALTA survey
of the Real Property, Building and Improvements (the "Survey") to be completed
by a surveyor licensed in the State of Alabama and delivered to Escrow Agent and
Seller, whereupon the legal description in the Survey shall control over the
description in Exhibit A attached hereto to the extent they may be inconsistent.
The Survey shall set forth the legal description and boundaries of the Property
and all easements, encroachments and improvements thereon.
10. IRS SECTION 1445. Seller shall furnish to Buyer in escrow by COE a
sworn affidavit (the "Non-Foreign Affidavit") stating under penalty of perjury
that Seller is not a "foreign person" as such term is defined in Section
1445(f)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). If
Seller does not timely furnish the Non-Foreign Affidavit, Buyer may withhold (or
direct Escrow Agent to withhold) from the Earnest Money Deposit and/or the
Additional Funds, an amount equal to the amount required to be so withheld
pursuant to Section 1445(a) of the Code, and such withheld funds shall be
deposited with the Internal Revenue Service as required by such Section 1445(a)
and the regulations promulgated thereunder. The amount withheld, if any, shall
nevertheless be deemed to be part of the Purchase Price paid to Seller.
11. DELIVERY OF POSSESSION. Seller shall deliver possession of the Property
to Buyer at COE subject only to the rights of Tenant under the Lease as approved
by Buyer as part of Buyer's Diligence.
12. BUYER'S CONDITIONS PRECEDENT. In addition to all other conditions
precedent set forth in this Agreement, Buyer's obligations to perform under this
Agreement and to close escrow are expressly subject to the following:
(i) the delivery by Seller to Escrow Agent, for delivery to Buyer at
COE, of the executed original Transfer Documents;
(ii) the issuance of the Owner's Policy (or a written commitment
therefor) subject only to those matters approved or deemed approved by Buyer
pursuant to this Agreement;
(iii) the delivery by Seller to Buyer at COE of all security deposits
and pre-paid/abated rents under the Lease in the form of a credit in favor of
Buyer against the Additional Funds;
(iv) the deposit by Seller with Buyer prior to expiration of the Study
Period of (i) an original estoppel certificate naming Buyer (or its designee)
and Wachovia Bank, National Association as addressees, which certificate must be
reasonably acceptable to Buyer, in Tenant's standard form, without any punch
list items
remaining, and (ii) a subordination, non-disturbance and attornment agreement,
in form and substance reasonably acceptable to Tenant, for the benefit of
Wachovia Bank, National Association, both executed by Tenant under the Lease;
(v) the deposit with Escrow Agent and Buyer prior to the expiration of
the Study Period of an executed waiver by Tenant of any right of first refusal
under the Lease;
(vi) the deposit with Escrow Agent of an executed final lien waiver by
the general contractor, an executed affidavit of Seller and such other
documentation as may be reasonably required by Escrow Agent to allow for the
deletion of the mechanics' lien exception from the Owner's Policy;
(vii) the delivery by Seller to Buyer of the final Certificate of
Occupancy for the Improvements;
(viii) the delivery by Seller to Buyer of an architect's affidavit in
the form attached hereto as Exhibit G;
(ix) the delivery by Seller to Buyer of the leasehold title insurance
policy provided to Tenant pursuant to the Lease, if any;
(x) the deposit with Escrow Agent of a letter from Seller to Tenant
requesting that future rent under the Lease be paid to Buyer;
(xi) delivery of the SEC Filing Information (as hereinafter defined)
and the SEC Filings Letter (as hereinafter defined) by Seller to Buyer not less
than five (5) days prior to COE; and
(xii) delivery to Buyer of originals of the Lease, the Contracts, and
Permits, if any, in the possession of Seller or Seller's agents and any
correspondence with respect thereto, together with such non-proprietary leasing
and property manuals, files and records which are material in connection with
the continued operation, leasing and maintenance of the Property.
If the foregoing conditions have not been satisfied by the specified date or COE
as the case may be, then Buyer shall have the right, at Buyer's sole option, by
giving written notice to Seller and Escrow Agent, to cancel this Agreement,
whereupon the Earnest Money Deposit plus interest shall be paid immediately by
Escrow Agent to Buyer and, except as otherwise provided in this Agreement,
neither of the Parties shall have any further liability or obligation under this
Agreement.
13. SELLER'S WARRANTIES. Seller hereby represents and warrants to Buyer as
of the Effective Date and again as of COE that:
(i) there are no unrecorded leases (other than the Lease), liens or
encumbrances which may affect title to the Property;
(ii) to the best of Seller's knowledge, no notice of violation has
been issued with regard to any applicable regulation, ordinance, requirement,
covenant, condition or restriction relating to the present use or occupancy of
the Property by any person, authority or agency having jurisdiction; and, if any
such notice of violation is issued subsequent to the Effective Date of this
Agreement and prior to COE Seller may, at Seller's sole option, immediately
correct any claimed violations and bear all expenses, fees or related
expenditures in connection therewith arising from or being related to a time
prior to COE either directly or by credit to the Additional Funds due at COE;
(iii) to the best of Seller's knowledge, there are no intended public
improvements which will or could result in any charges being assessed against
the Property which will result in a lien upon the Property;
(iv) to Seller's knowledge, after due inquiry, there is no impending
or contemplated condemnation or taking by inverse condemnation of the Property,
or any portion thereof, by any governmental authorities;
(v) there are no suits or claims pending or, to the best of Seller's
knowledge, threatened with respect to or in any manner affecting the Property,
nor does Seller know of any circumstances which should or could reasonably form
the basis for any such suits or claims which have not been disclosed in writing
to Buyer by Seller;
(vi) Seller has not entered into and there is not existing any other
agreement, written or oral, under which Seller is or could become obligated to
sell the Property, or any portion thereof, to a third party and Seller will not
enter into nor execute any such agreement without Buyer's prior written consent;
(vii) Seller has not and will not, without the prior written consent
of Buyer, take any action before any governmental authority having jurisdiction
thereover, the object of which would be to change the present zoning of or other
land-use limitations, upon the Property, or any portion thereof, or its
potential use, and, to the best of Seller's knowledge, there are no pending
proceedings, the object of which would be to change the present zoning or other
land-use limitations;
(viii) this transaction will not in any way violate any other
agreements to which Seller is a party;
(ix) Seller has full power and authority to execute, deliver and
perform under this Agreement as well as under the Transfer Documents, specimens
of which are attached hereto as Exhibits;
(x) prior to COE or any earlier termination of this Agreement, Seller
will not enter into or execute any, employment, management or service contract
with respect to the Real Property without Buyer's prior written consent, which
consent shall not be unreasonably withheld, provided that any such contract so
entered by Seller with Buyer's consent shall provide that such contract can be
terminated by Seller, or Seller's successor, at any time without penalty, upon
not more than 30 days' prior written notice to the other party thereto. When any
such contracts are fully executed, Seller shall deliver a copy thereof to Buyer;
(xi) no default of Seller exists under any of the Contracts and, to
Seller's knowledge after due inquiry, no default of the other parties exists
under any of the Contracts. Between the Effective Date and COE, or any earlier
termination of this Agreement, Seller, without Buyer's prior written consent
which consent will not be unreasonably withheld, shall not amend, modify or
terminate any Contract or waive any substantial right thereunder;
(xii) if, at any time after the end of the Study Period and prior to
COE, Buyer delivers at least 5 days' prior written demand to Seller requesting
that Seller send a written notice terminating a Contract, Seller shall promptly
do so, provided, however, that such notice shall provide that: [a] the
termination effected thereby is subject to COE taking place; [b] as to the
Contract, the effective date of the termination shall be in accordance with the
Contract being terminated thereby; and, [c] Seller shall fully and timely pay to
the other party to the Contract being terminated all termination costs or
penalties which may be required in accordance with the Contract being
terminated;
(xiii) no consent of any third party is required in order for Seller
to enter into this Agreement and perform Seller's obligations hereunder. Without
limiting the generality of the foregoing, to Seller's knowledge after due
inquiry, no consent of any third party is required in order for Seller to assign
to Buyer the approved Contracts or the Lease;
(xiv) except for any item to be prorated at COE in accordance with
this Agreement, all bills or other charges, costs or expenses arising out of or
in connection with or resulting from Seller's use, ownership, or operation of
the Property up to COE shall be paid in full by Seller;
(xv) all general real estate taxes, assessments and personal property
taxes that have become due with respect to the Property (except for those that
will be prorated at COE) have been paid or will be so paid by Seller prior to
COE;
(xvi) between the Effective Date and COE or any earlier termination of
this Agreement, Seller shall not execute or enter into any lease, or terminate,
amend, modify, extend or waive any rights under the Lease without Buyer's prior
written consent, which consent may be withheld at Buyer's discretion;
(xvii) Seller agrees that, between the Effective Date and COE or any
earlier termination of this Agreement, Seller shall, at its sole cost:
[a] continue to operate the Property as heretofore operated by
Seller subject to Buyer's rights under this Agreement to direct specific
activities of Seller;
[b] maintain or cause the Tenant to maintain the Property in its
current condition and perform required and routine maintenance and make
replacements of the Property that are tangible property (whether real or
personal) and perform repairs or make replacements to any broken, defective
or dysfunctional portions of the Property that are tangible property
(whether real or personal) as the relevant conditions require;
[c] pay or cause the Tenant to pay (as applicable) prior to COE,
all sums due for work, materials or services furnished or otherwise
incurred in the ownership, use or operation of the Property up to COE;
[d] comply or cause the Tenant to comply with all governmental
requirements applicable to the Property;
[e] except as required by a governmental agency, not place or
permit to be placed on any portion of the Real Property any new
improvements of any kind or remove or permit any improvements to be removed
from the Real Property without the prior written consent of Buyer.
[f] not restrict, rezone, file or modify any development plan or
zoning plan or establish or participate in the establishment of any
improvement district with respect to all or any portion of the Real
Property without Buyer's prior written consent; and,
[g] without Buyer's prior written consent, Seller shall not, by
voluntary or intentional act or omission to act, further cause or create
any easement, encumbrance, or mechanic's or materialmen's liens, and/or
similar liens or encumbrances to arise or to be imposed upon the Property
or any portion thereof that effects title thereto;
(xviii) Seller has no actual knowledge that there exists or has
existed, and Seller itself has not caused any generation, production, location,
transportation, storage, treatment, discharge, disposal, release or threatened
release upon, under or about the Property of any Hazardous Materials. "Hazardous
Materials" shall mean any flammables, explosives, radioactive materials,
hazardous wastes, hazardous and toxic substances or related materials, asbestos
or any material containing asbestos (including, without limitation, vinyl
asbestos tile), or any other substance or material, defined as a "hazardous
substance" by any federal, state, or local environmental law, ordinance, rule or
regulation including, without limitation, the Federal Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended, the
Federal Hazardous Materials Transportation Act, as amended, the Federal Resource
Conservation and Recovery Act, as amended, and the rules and regulations adopted
and promulgated pursuant to each of the foregoing;
(xix) to Seller's actual knowledge, there is not now, nor has there
ever been, on or in the Property underground storage tanks, any
asbestos-containing materials or any polychlorinated biphenyls, including those
used in hydraulic oils, electric transformers, or other equipment. Seller hereby
assigns to Buyer, effective as of COE, all claims, counterclaims, defenses, or
actions, whether at common law, or pursuant to any other applicable federal or
state or other laws which Seller may have against any third parties relating to
the existence of any Hazardous Materials in, at, on, under or about the Property
(including Hazardous Materials released on the Property prior to COE and
continuing in existence on the Property at COE);
(xx) to the best of Seller's knowledge there are no proceedings
pending for the increase of the assessed valuation of the Real Property;
(xxi) should Seller receive notice or knowledge of any information
regarding any of the matters set forth in this Article 13 after the Effective
Date and prior to COE, Seller shall immediately notify Buyer of the same in
writing; and
(xxii) all representations made in this Agreement by Seller shall
survive the execution and delivery of this Agreement and COE for a period of one
(1) year. Seller shall and does hereby indemnify against and hold Buyer harmless
from any loss, damage, liability and expense, together with all court costs and
attorneys' fees which Buyer may incur, by reason of any material
misrepresentation by Seller or any material breach of any of Seller's warranties
during said one (1) year period. Seller's indemnity and hold harmless
obligations shall survive COE for a period of one (1) year.
14. BUYER'S WARRANTIES. Buyer hereby represents to Seller as of the
Effective Date and again as of COE that:
(i) Buyer has full power and authority to execute, deliver and perform
under this Agreement as well as under the Transfer Documents, specimens of which
are attached hereto as Exhibits;
(ii) there are no actions or proceedings pending or to Buyer's
knowledge, after due inquiry, threatened against Buyer which may in any manner
whatsoever affect the validity or enforceability of this Agreement or any of the
documents, specimens of which are attached hereto as Exhibits;
(iii) the execution, delivery and performance of this Agreement and
the Transfer Documents, specimens of which are attached hereto as Exhibits, have
not and will not constitute a breach or default under any other agreement, law
or court order under which Buyer is a party or may be bound;
(iv) should Buyer receive notice or knowledge of any information
regarding any of the matters set forth in this Article 14 after the Effective
Date and prior to COE, Buyer will immediately notify Seller of the same in
writing; and
(v) all representations made in this Agreement by Buyer shall survive
the execution and delivery of this Agreement and COE for a period of one (1)
year. Buyer shall and does hereby indemnify against and hold Seller harmless
from any loss, damage, liability and expense, together with all court costs and
attorneys' fees, if awarded by a court of law, which Seller may incur, by reason
of any material misrepresentation by Buyer or any material breach of any of
Buyer's warranties during said one (1) year period. Buyer's indemnity and hold
harmless obligations shall survive COE for a period of one (1) year.
15. RENTS AND DEPOSITS. Seller and Buyer agree that, in addition to all
other conditions and covenants contained herein, Seller shall deposit with Buyer
and Escrow Agent on the day immediately prior to COE Tenant's security deposit
and advance rents paid/abatements, if any, and a statement as to the date to
which all rents have been paid.
16. BROKER'S COMMISSION. Concerning any brokerage commission, the Parties
agree as follows:
(i) the Parties warrant to one another that they have not dealt with
any finder, broker or realtor in connection with this Agreement except The
Lennox/Massell Companies ("Seller's Broker");
(ii) if any person shall assert a claim to a finder's fee or brokerage
commission on account of alleged employment as a finder or broker in connection
with this Agreement (including Seller's Broker), the Party under whom the finder
or broker is claiming shall indemnify and hold the other Party harmless from and
against any such claim and all costs, expenses and liabilities incurred in
connection with such claim or any action or proceeding brought on such claim,
including, but not limited to, counsel and witness fees and court costs in
defending against such claim. The provisions of this Subparagraph 16(ii) shall
survive cancellation of this Agreement or COE; and
(iii) Seller shall be responsible for payment of a commission to
Seller's Broker pursuant to a separate written agreement between Seller and
Seller's Broker, which commission shall be paid at COE.
17. CLOSE OF ESCROW. COE shall be on or before 5:00 p.m. MST on the
fifteenth (15th) day after the commencement of rent under the Lease, or such
earlier date as Buyer may choose by giving not less than five (5) days prior
written notice to Seller and Escrow Agent.
17.1 Buyer may extend the COE date for up to an additional thirty (30)
days upon delivery of written notice to extend the COE date to Escrow Agent
prior to the original COE date and by depositing an additional, non-refundable
Twenty-Five Thousand and no/100 Dollars ($25,000.00) of earnest money with
Escrow Agent. For purposes of this Agreement, any additional earnest money
deposited with Escrow Agent pursuant to this Paragraph 17.1 shall be added to
and become a part of the Earnest Money Deposit.
18. ASSIGNMENT. This Agreement may not be assigned by Seller or Buyer
without the prior written consent of the other Party, which consent shall not be
unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing,
Buyer may assign its rights under this Agreement to an affiliate without seeking
or obtaining Seller's consent.
19. RISK OF LOSS. Seller shall bear all risk of loss, damage or taking of
the Property which may occur prior to COE. In the event of any loss, damage or
taking prior to COE, Buyer may, at Buyer's sole option, by written notice to
Seller and Escrow Agent, cancel this Agreement whereupon the Earnest Money
Deposit plus interest shall be paid immediately by Escrow Agent to Buyer and,
except as otherwise provided in this Agreement, neither of the Parties shall
have any further liability or obligation hereunder. In the alternative, Buyer
may attempt to negotiate an appropriate downward adjustment of the Price. If
Seller and Buyer cannot agree upon such a downward adjustment within a
reasonable period (not to exceed ten (10) days from the date Buyer receives
notice of the loss) Buyer may cancel this Agreement as provided above. If Buyer
waives any such loss or damage to the Property and closes escrow, Seller shall
at COE and as a condition precedent thereto, pay Buyer or credit Buyer against
the Additional Funds the amount of any insurance or condemnation proceeds, or
assign to Buyer, as of COE and in a form acceptable to Buyer, all rights or
claims for relief to the same.
20. REMEDIES.
20.1 Seller's Breach. If Seller breaches this Agreement, Buyer may, at
Buyer's sole option, either: (i) by written notice to Seller and Escrow Agent,
cancel this Agreement whereupon the Earnest Money Deposit plus interest shall be
paid immediately by Escrow Agent to Buyer and, except as otherwise provided in
this Agreement, neither of the Parties shall have any further liability or
obligation hereunder; or, (ii) seek specific performance against Seller in which
event COE shall be automatically extended as necessary. Notwithstanding the
foregoing, if specific performance is unavailable as a remedy to Buyer because
of Seller's affirmative acts, Buyer shall be entitled to pursue all rights and
remedies available at law or in equity.
20.2 Buyer's Breach. If Buyer breaches this Agreement, as its sole
remedy Seller shall be entitled to retain the Earnest Money Deposit in
accordance with Subparagraph 5(ii) as Seller's agreed and total liquidated
damages. Seller hereby waives any right to seek any equitable or legal remedies
against Buyer.
21. ATTORNEYS' FEES. If there is any litigation to enforce any provisions
or rights arising herein in accordance with Paragraph 20.1, the unsuccessful
party in such litigation, as determined by the court, agrees to pay the
successful party, as determined by the court, all costs and expenses, including,
but not limited to, reasonable attorneys' fees incurred by the successful party,
such fees to be determined by the court.
22. NOTICES.
22.1 Addresses. Except as otherwise required by law, any notice
required or permitted hereunder shall be in writing and shall be given by
personal delivery, or by deposit in the U.S. Mail, certified or registered,
return receipt requested, postage prepaid, addressed to the Parties at the
addresses set forth below, or at
such other address as a Party may designate in writing pursuant hereto, or
tested telex, or telegram, or telecopies (fax), or any express or overnight
delivery service (e.g., Federal Express), delivery charges prepaid:
if to Seller: NOM ENTERPRISE, LLC
3841 Green Hills Village Drive, Suite 400
Nashville, TN 37215
Attn: Mr. Mark Banks
Tel.: (615) 269-5444
Fax: (615) 383-6866
if to Buyer: Series C, LLC
2555 E. Camelback Road, Suite 400
Phoenix, AZ 85016
Attn: Legal Department
Tel.: (602) 778-8700
Fax: (602) 778-8780
with copies to: Bennett Wheeler Lytle & Cartwright, PLC
3838 North Central Avenue, Suite 1120
Phoenix, AZ 85012
Attn: Kevin T. Lytle, Esq.
Tel.: (602) 445-3434
Fax: (602) 266-9119
If to Escrow Agent: Fidelity National Title Insurance Company
40 North Central Avenue, Suite 2850
Phoenix, AZ 85004
Attn: Ms. Mary Garcia
Tel.: (602) 343-7571-0511
Fax: (602) 343-7564
22.2 Effective Date of Notices. Notice shall be deemed to have been
given on the date on which notice is delivered, if notice is given by personal
delivery, telex, telegrams or telecopies, and on the date of delivery or refusal
of delivery, if mailed or delivered by overnight carrier, if used. Notice shall
be deemed to have been received on the date on which the notice is received, if
notice is given by personal delivery. If escrow has opened, a copy of any notice
given to a party shall also be given to Escrow Agent by regular U.S. Mail or by
any other method provided for herein.
23. CLOSING COSTS. Seller and Buyer agree to pay closing costs as indicated
in this Agreement and in the escrow instructions attached hereto as Exhibit H,
and by this reference incorporated herein (the "Escrow Instructions"). At COE,
Seller shall pay (i) the costs of releasing all liens, judgments, and other
encumbrances that are to be released and of recording such releases, (ii)
one-half of the fees and costs due Escrow Agent for its services, (iii) the
transfer tax associated with the sale of the Property, if any, and (iv) all
other costs to be paid by Seller under this Agreement. Except as otherwise
provided for in this Agreement, Seller and Buyer will each be solely responsible
for and bear all of their own respective expenses, including, without
limitation, expenses of legal counsel, accountants, and other advisors incurred
at any time in connection with pursuing or consummating the transaction
contemplated herein. Real estate taxes shall be prorated based upon the current
valuation and latest available tax rates. All prorations shall be calculated
through escrow as of COE based upon the latest available information, including,
without limitation, a credit to Buyer for any rent prepaid by Tenant for the
period beginning with and including the date on which the closing occurs through
and including the last day of the month in which the closing occurs. All other
credits to Buyer shall be similarly prorated. Any other closing costs not
specifically
designated as the responsibility of either Party in the Escrow Instructions or
in this Agreement shall be paid by Seller and Buyer according to the usual and
customary allocation of the same by Escrow Agent. Seller agrees that all closing
costs payable by Seller shall be deducted from Seller's proceeds otherwise
payable to Seller at COE. Buyer shall deposit with Escrow Agent sufficient cash
to pay all of Buyer's closing costs. Except as provided in this Article 23,
Seller and Buyer shall each bear their own costs in regard to this Agreement.
23.1 Post-Closing Adjustment. If after COE, the parties discover any
errors in adjustments and apportionments or additional information becomes
available which would render the closing prorations materially inaccurate, the
same shall be corrected as soon after their discovery as possible. The
provisions of this Paragraph 23.1 shall survive COE except that no adjustment
shall be made later than two (2) months after COE unless prior to such date the
Party seeking the adjustment shall have delivered a written notice to the other
Party specifying the nature and basis for such claim. In the event that such
claim is valid, the Party against whom the claim is sought shall have ten (10)
days in which to remit any adjustment due. Notwithstanding anything to the
contrary herein, real estate taxes may be adjusted, if necessary, upon receipt
by either party of the final tax bill for the year in which COE occurs.
23.2 Instructions. This Agreement, together with the Escrow
Instructions, shall constitute escrow instructions for the transaction
contemplated herein. Such escrow instructions shall be construed as applying
principally to Escrow Agent's employment.
24. ESCROW CANCELLATION CHARGES. If escrow fails to close because of
Seller's default, Seller shall be liable for any cancellation charges of Escrow
Agent. If escrow fails to close because of Buyer's default, Buyer shall be
liable for any cancellation charges of Escrow Agent. If escrow fails to close
for any other reason, Seller and Buyer shall each be liable for one-half of any
cancellation charges of Escrow Agent. The provisions of this Article 24 shall
survive cancellation of this Agreement.
25. APPROVALS. Concerning all matters in this Agreement requiring the
consent or approval of any Party, the Parties agree that any such consent or
approval shall not be unreasonably withheld unless otherwise provided in this
Agreement.
26. Intentionally Omitted.
27. ADDITIONAL ACTS. The Parties agree to execute promptly such other
documents and to perform such other acts as may be reasonably necessary to carry
out the purpose and intent of this Agreement.
28. GOVERNING LAW/JURISDICTION/VENUE. This Agreement shall be governed by
and construed or enforced in accordance with the laws of the State of Alabama.
29. CONSTRUCTION. The terms and provisions of this Agreement represent the
results of negotiations among the Parties, each of which has been represented by
counsel of its own choosing, and neither of which has acted under any duress or
compulsion, whether legal, economic or otherwise. Consequently, the terms and
provisions of this Agreement shall be interpreted and construed in accordance
with their usual and customary meanings, and the Parties each hereby waive the
application of any rule of law which would otherwise be applicable in connection
with the interpretation and construction of this Agreement that ambiguous or
conflicting terms or provisions contained in this Agreement shall be interpreted
or construed against the Party whose attorney prepared the executed Agreement or
any earlier draft of the same.
30. TIME OF ESSENCE. Time is of the essence of this Agreement. However, if
this Agreement requires any act to be done or action to be taken on a date which
is a Saturday, Sunday or legal holiday, such act or action shall be deemed to
have been validly done or taken if done or taken on the next succeeding day
which is not a Saturday, Sunday or legal holiday, and the successive periods
shall be deemed extended accordingly.
31. INTERPRETATION. If there is any specific and direct conflict between,
or any ambiguity resulting from, the terms and provisions of this Agreement and
the terms and provisions of any document, instrument or other agreement executed
in connection herewith or in furtherance hereof, including any Exhibits
hereto, the same shall be consistently interpreted in such manner as to give
effect to the general purposes and intention as expressed in this Agreement
which shall be deemed to prevail and control.
32. HEADINGS. The headings of this Agreement are for reference only and
shall not limit or define the meaning of any provision of this Agreement.
33. FAX AND COUNTERPARTS. This Agreement may be executed by facsimile
and/or in any number of counterparts. Each party may rely upon any facsimile or
counterpart copy as if it were one original document.
34. INCORPORATION OF EXHIBITS BY REFERENCE. All Exhibits to this Agreement
are fully incorporated herein as though set forth at length herein.
35. SEVERABILITY. If any provision of this Agreement is unenforceable, the
remaining provisions shall nevertheless be kept in effect.
36. ENTIRE AGREEMENT. This Agreement contains the entire agreement between
the Parties and supersedes all prior agreements, oral or written, with respect
to the subject matter hereof. The provisions of this Agreement shall be
construed as a whole and not strictly for or against any Party.
37. SEC S-X 3-14 Audit. Seller acknowledges that Buyer may elect to assign
all of its right, title and interest in and to this Agreement to a company that
is subject to the reporting requirements of the Securities Exchange Act of 1934,
as amended ("Registered Company"), promoted by the Buyer or to an affiliate of a
Registered Company (a "Registered Company Affiliate"). In the event Buyer's
assignee under this Agreement is a Registered Company or a Registered Company
Affiliate, the Registered Company will be required to make certain filings with
the U.S. Securities and Exchange Commission required under SEC Rule 3-14 of
Regulation S-X (the "SEC Filings") that relate to the most recent
pre-acquisition fiscal year (the "Audited Year") for the Property. To assist the
Registered Company with the preparation of the SEC Filings, Seller agrees to
provide Buyer and the Registered Company with financial information regarding
the Property for the Audited Year requested by Buyer, the Registered Company,
and/or Buyer's or the Registered Company's auditors. Such information may
include, but is not limited to, bank statements, operating statements, general
ledgers, cash receipts schedules, invoices for expenses and capital
improvements, insurance documentation, and accounts receivable aging related to
the Property ("SEC Filing Information"). Seller shall deliver the SEC Filing
Information requested by Buyer, the Registered Company and/or Buyer's or the
Registered Company's auditors prior to the expiration of the Study Period, and
Seller agrees to cooperate with Buyer, the Registered Company and Buyer's or the
Registered Company's auditors regarding any inquiries by Buyer, the Registered
Company and Buyer's or the Registered Company's auditors following receipt of
such information, including delivery by Seller of an executed representation
letter prior to COE in form and substance requested by Buyer's or the Registered
Company's auditors ("SEC Filings Letter"). A sample SEC Filings Letter is
attached to the Purchase Agreement as Exhibit I; however, Buyer's and/or the
Registered Company's auditors may require additions and/or revisions to such
letter following review of the SEC Filing Information provided by Seller. Seller
consents to the disclosure of the SEC Filing Information in any SEC Filings by
the Registered Company. Buyer shall reimburse Seller for Seller's reasonable
costs associated with providing the SEC Filing Information. The provisions of
this Section 37 shall survive the COE for a period of one (1) year.
IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement as of the
Effective Date.
SELLER: NOM ENTERPRISE, LLC
By: Corporate General, Inc., its Manager
By: /s/ Mark McDonald
------------------------------------
Name: Mark McDonald
Its: Vice President
BUYER: SERIES C, LLC
By: /s/ John M. Pons
------------------------------------
Name: John M. Pons
Its: Authorized Officer
ESCROW AGENT'S ACCEPTANCE
The foregoing fully executed Agreement together with the Earnest Money
Deposit is accepted by the undersigned this 25th day of October, 2005, which for
the purposes of this Agreement shall be deemed to be the date of Opening of
Escrow. Escrow Agent hereby accepts the engagement to handle the escrow
established by this Agreement in accordance with the terms set forth in this
Agreement.
FIDELITY NATIONAL TITLE INSURANCE COMPANY
By /s/ M. Burton
--------------------------------------
Name M. Burton
Its Asst. Commercial Escrow Officer
ASSIGNMENT OF PURCHASE AGREEMENT
NOM ENTERPRISE, LLC, AS SELLER
AND
SERIES C, LLC, AS BUYER
ASSIGNOR, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, does hereby assign all of its right, title and
interest in that certain Purchase Agreement (the "Purchase Agreement") described
herein, to ASSIGNEE and its successors and assigns. The Purchase Agreement is
described as follows:
DATE OF AGREEMENT: October 25, 2005
ORIGINAL BUYER: Series C, LLC
ASSIGNED TO: Cole RA Enterprise AL, LLC
PROPERTY ADDRESS: 901 Rucker Boulevard, Enterprise, AL 36330
ASSIGNOR acknowledges that it is not released from any and all obligations
or liabilities under said Purchase Agreement with the exception of the earnest
money deposit which is currently in escrow.
ASSIGNEE hereby agrees to assume and be responsible for all obligations and
liabilities under said Purchase Agreement. This Assignment shall be in full
force and effect upon its full execution.
Executed this 26th day of January, 2006.
ASSIGNOR: ASSIGNEE:
SERIES C, LLC, COLE RA ENTERPRISE AL, LLC, a Delaware
an Arizona limited liability company limited liability company
By: Cole REIT Advisors II, LLC, a
Delaware limited liability company,
its Manager
By: /s/ John M. Pons By: /s/ John M. Pons
--------------------------------- ------------------------------------
John M. Pons John M. Pons, Senior Vice President
Authorized Officer