Exhibit 10.01
REAL PROPERTY PURCHASE AGREEMENT
THIS REAL PROPERTY PURCHASE AGREEMENT (this "Agreement") is entered
into as of the 9th day of March, 2005, by and between Diatect International
Corporation, a California corporation, ("Seller") and the Morrell & Associates,
LLC ("Buyer").
WITNESSETH:
Buyer desires to purchase from Seller all of Seller's interest in the
real property described below and Seller is willing to sell such interest in
real property to Buyer, on the terms, conditions, and provisions hereinafter set
forth.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained and for good and valuable consideration, the receipt and sufficiency
of which are acknowledged, Seller and Buyer hereby agree as follows:
1. PURCHASE, SALE, AND AGREEMENTS.
1.1 Description of Real Property. Seller shall sell to Buyer, and Buyer
shall purchase from Seller, on the terms, conditions, and provisions herein
contained, all of Seller's interest in and to certain real property (hereinafter
the "Property") situated at approximately 875 Industrial Parkway, Heber, Utah
84032, and more particularly described as:
Beginning at a point that is South a distance of 4200.91 feet and West
a distance of 2411.87 feet from the witness corner for the Northeast
corner of Section 6, Township 4 South, Range 5 East, Salt Lake Base and
Meridian; thence North 0(Degree) 20' 27" East a distance of 199.93
feet; thence North 89(Degree) 54' 02" East a distance of 400.00 feet;
thence South 0(Degree) 20' 27" West a distance of 210.00 feet; thence
South 89(Degree) 54' 02" West a distance of 389.93 feet to the
beginning of a 10 foot tangent curve to the right; thence along said
curve through a central angle of 90(Degree) 26' 25", chord bearing and
distance of said curve being North 44(Degree) 52' 46" West a distance
of 14.20 feet to the point of beginning.
OHE-1263-A
Subject to the general property taxes for the year 2003 and thereafter,
and any special assessments to become due. Subject to easements and
restrictions of record. Excepting therefrom all oil, gas and/or other
minerals previously reserved.
including the following items if presently attached to the Property: plumbing,
heating, air conditioning fixtures and equipment; water heater; light fixtures
and bulbs; bathroom fixtures; permanently affixed carpets; fencing; and trees
and shrubs.
1.2 Purchase Price. The Buyer shall pay the Seller for the Property,
Nine Hundred Thousand and No/100 Dollars ($900,000), payable to Seller at
Closing.
1.3 Title Report. Immediately after the execution of this Agreement,
Seller shall obtain and deliver to Buyer a current commitment for title
insurance covering the Property (the "Commitment") issued by a real estate title
company licensed to conduct business as such in the state of Utah (the "Escrow
Agent"). Buyer shall, within five days of Buyer's receipt of the Commitment,
notify Seller of any and each title exception contained in the Commitment that
is reasonably objectionable to Buyer. If Buyer timely notifies Seller of any
reasonably objectionable title exception, Seller shall attempt to cause each
such objectionable title exception to be removed or cured prior to the Closing;
provided, however, that if any such objectionable title exception is not or
cannot be removed or cured (in the judgment of Seller), then Buyer shall, within
five days after written notice from Seller that any objectionable title
exception cannot or will not be removed prior to Closing, elect in a written
notice to Seller either:
(a) to waive each objectionable exception and proceed with the
Closing without any adjustment to the Purchase Price and accept such
objectionable title exception as a "Permitted Encumbrance"; or
(b) to terminate this Agreement and all of the rights and
obligations of the parties hereunder.
Failure of Buyer to timely deliver notice to Seller of Buyer's election under
the preceding subsection shall be deemed an election by Buyer to waive each
objectionable title exception and to accept such objectionable title exceptions
as "Permitted Encumbrances."
1.4 Permitted Encumbrances. As used in this Agreement, the term
"Permitted Encumbrances" shall mean:
(a) real property taxes and assessments for the year in which
the Closing takes place and all periods thereafter;
(b) any impositions or assessments resulting from a change in
use or tax status of the Subject Property effected by Buyer, including
without limitation any roll-back taxes payable for periods prior to
Closing;
(c) all conditions, restrictions, easements, rights-of-way,
encroachments, shortages in area, title exceptions, and other matters
of any nature disclosed in the Commitment, other than such title
exceptions as to which Buyer timely objects in writing and does not
thereafter waive such objection;
(d) all conditions, easements, rights-of-way, encroachments,
title exceptions, and other matters that would be disclosed or
discovered by Buyer making a complete and thorough inspection and
survey (conforming to ALTA minimum standard detail requirements for
urban properties) of the Property; and
(e) any other matters or conditions arising as a result of the
acts or omissions of Buyer or its successors-in-interest.
2. CONDITIONS OF CLOSING.
2.1 Conditions of Seller's Obligations. The obligations of Seller under
this Agreement to sell the Property are subject to the fulfillment, prior to or
at Closing, of Buyer having performed and complied in all material respects with
its obligations, covenants, and agreements contained in this Agreement on its
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part to be performed and complied with at the appropriate time for such
performance and compliance. In the event each of such conditions shall not have
been satisfied at or prior to the Closing or waived by Seller, then Seller shall
have the right, at Seller's option, to
(a) terminate this Agreement by giving written notice of such
termination to Buyer, in which event this Agreement shall automatically
terminate, and Seller and Buyer shall each be released automatically
from all further obligations and liabilities hereunder, except as set
forth in sections 5.8 and 5.10 hereof, or
(b) pursue any other remedies available to Seller.
2.2 Conditions to Buyer's Obligations. The obligations of Buyer under
this Agreement to purchase the Property are subject to Seller's fulfillment
prior to or at the Closing in all material respects with its obligations,
covenants, and agreements contained in this Agreement on its part to be
performed and complied with at the appropriate times for such performance and
compliance. In the event each of such conditions have not been satisfied at or
prior to Closing or waived by Buyer, then Buyer shall have the right, at Buyer's
option, to terminate this Agreement by giving written notice of such termination
to Seller, in which event this Agreement shall automatically terminate and Buyer
and Seller each shall be released automatically from all further obligations and
liabilities hereunder, except as set forth in sections 5.8 and 5.10 hereof.
2.3 Condemnation. Buyer shall be bound to purchase the Property for the
full purchase price as required by the terms hereof, without regard to the
occurrence or effect of any partial condemnation of the Property occurring after
the date hereof and prior to the Closing, provided, that such partial
condemnation does not result in the taking of more than 5% of the total area of
the Property and does not impair Buyer's intended use of the Property. At
Closing, Buyer shall have credited against the purchase price due hereunder the
amount of any condemnation proceeds collected by Seller prior to Closing as a
result of any such partial condemnation, or such proceeds shall be assigned to
Buyer if not then collected. In the event any partial condemnation of the
Property results in the taking of more than 5% of the total area of the Property
or impairs Buyer's intended use of the Property, Buyer may, by written notice to
Seller within 15 days after Buyer's receipt of such notice of such partial
condemnation of the Property, elect to terminate this Agreement, in which event
this Agreement shall automatically terminate and the Buyer and Seller shall each
be released from all further obligations and liabilities hereunder, except as
set forth in sections 5.8 and 5.10 hereof.
3. CLOSING AND POST-CLOSING.
3.1 Closing. The Closing of the subject transaction shall be held at
the offices of First American Title at 81 South Main Street, Heber City, Utah
84032, on Wednesday, March 9, 2005 ("Closing"), or at such other date or place
as shall be mutually agreed to in writing by Seller and Buyer; provided,
however, that Closing may be accomplished on such date through another escrow
agent approved in writing by both Seller and Buyer. The date on which the
Closing actually takes place or, if more than one day is required to complete
the Closing, the date on which the Closing is actually accomplished, is herein
referred to and designated as the "Closing Date." At the Closing, the following
shall occur, each action being considered a condition precedent to the others
and all being considered as taking place simultaneously and (subject to the
terms and conditions hereof), each party covenanting to perform or cause to be
performed each such action to be performed on its part.
(a) Seller shall execute, acknowledge, and deliver to Buyer a
Special Warranty Deed conveying and warranting to the Buyer against
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those claiming by, through, or under Seller, but not otherwise, title
to the Property, subject only to the Permitted Encumbrances referred to
in section 1.4 hereof.
(b) Buyer shall pay to Seller the purchase price in the sum of
$900,000, in current and immediately available funds as provided in
section 1.2 hereof.
(c) All reasonable and customary proration shall be made as of
the date that possession of the Property is delivered to Buyer and
appropriate credits shall be given for real property taxes (excluding
any real property taxes resulting from any change in the use or tax
status of the Property affected by Buyer or Buyer's
successors-in-interest), assessments, rents, deposits, and other
matters, the nature of which properly require such treatment. If on the
Closing Date either the applicable assessed value or mill levy for the
year in which the Closing occurs cannot be ascertained, real property
taxes relative to the property shall be apportioned on the basis of the
assessed value and mill levy for the year in which the Closing occurs
when such information is available.
(d) Seller shall pay in full the premium for the policy of
title insurance to be issued in connection with the subject
transaction, as set forth in section 3.2 hereof; the Buyer shall pay
all costs and premiums required for issuance of such policy as an
extended coverage policy of insurance.
(e) Buyer shall pay all costs of recording the Special
Warranty Deed and all costs associated with Buyer's loan.
(f) Buyer and Seller shall each pay one-half of the costs of
any escrow established in conjunction with the Closing.
(g) Seller shall deliver to Buyer possession of the Property,
subject to the Permitted Encumbrances referred to in section 1.4
hereof.
(h) Seller and Buyer shall execute and deliver to each other
closing statements reflecting the adjustment, payments, and credits
described in this section 3.1.
(i) Each party shall execute, acknowledge, and deliver such
other documents and instruments and take such other action as the
either party or its legal counsel may reasonably require in order to
document and carry out the transactions contemplated by this Agreement.
3.2 Owner's Title Insurance. In conjunction with the Closing, Seller
shall, at Seller's sole cost and expense, cause to be issued and delivered to
Buyer, as the named insured, an ALTA standard form owner's policy of title
insurance in the amount of the purchase price of the Property, ensuring that fee
simple title to the Property is vested in the Buyer subject only to the
Permitted Encumbrances referred to in section 1.4 hereof standard items and
exceptions. In the event Buyer desires to obtain an extended coverage policy of
title insurance or any requested endorsements or easements to such policy of
title insurance, Buyer shall pay the additional costs and premiums necessary for
issuance of an extended coverage policy of title insurance and/or any requested
endorsement to such policy of title insurance.
4. DEFAULT AND REMEDIES.
4.1 Buyer's Remedies on Default. In the event of a default by Seller in
the performance of its obligations hereunder, Buyer shall give written notice to
Seller designating such default. Seller shall have a period of 10 days following
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the effective date of said notice within which to correct the default of which
Seller has received notice. In the event that Seller shall fail to correct such
default within said 10-day period, the Buyer shall have the right, at his
option, to:
(a) terminate this Agreement and all rights, duties, and
obligations of the parties hereunder by giving written notice thereof
to Seller; or
(b) recover damages from Seller resulting from said default.
4.2 Seller's Remedies on Default. In the event of a default by Buyer in
the performance of its obligations hereunder, Seller shall give written notice
to Buyer designating such default. Buyer shall have a period of 10 days
following the effective date of said notice within which to correct the default
of which Buyer has received notice. In the event that Buyer shall fail to
correct such default within said 10-day period, Seller have the right, at its
option, to:
(a) terminate this Agreement and all rights, duties, and
obligations of the parties hereunder by giving written notice thereof
to Buyer; or
(b) recover damages from Buyer resulting from said default.
5. GENERAL PROVISIONS.
5.1 Broker or Finder. Seller represents and warrants to Buyer that
Seller has not engaged any broker or finder. Buyer represents and warrants to
Seller that Buyer has not engaged any broker or finder.
5.2 Notices. Any notice, demand, request, or other communication
permitted or required under this Agreement shall be in writing and shall be
deemed to have been given as of the date so delivered, if personally served; as
of the date so sent, if transmitted by facsimile and receipt is confirmed by the
facsimile operator of the recipient; as of the date so sent, if sent by
electronic mail and receipt is acknowledged by the recipient; one day after the
date so sent, if delivered by overnight courier service; or three days after the
date so mailed, if mailed by certified mail, return receipt requested, addressed
as follows:
If to Buyer, to: Morrell & Associates, LLC
Phil Morrell, Member
617 North Desoto Street
Salt Lake City, Utah
If to Seller, to: Diatect International Corporation
875 South Industrial Parkway
Heber City, Utah 84032
Facsimile: (435) 657-9794
or such other addresses and facsimile numbers as shall be furnished in writing
by any party in the manner for giving notices hereunder.
5.3 Costs. Except as otherwise specifically provided in this Agreement,
Seller and Buyer shall each pay its own costs and expenses incurred in
preparation and execution of and performance under this Agreement.
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5.4 Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto relative to the subject matter hereof. Any prior
negotiations, correspondence, or understandings relative to the subject matter
hereof shall be deemed to be merged into this Agreement and shall be of no
further force or effect. This Agreement may not be amended or modified except in
writing executed by both parties hereto.
5.5 Interpretation. This Agreement shall be interpreted and construed
only by the contents hereof, and there shall be no presumption or standard of
construction in favor of or against either Seller or Buyer. This Agreement shall
be governed by and construed under and in accordance with the internal laws of
the state of Utah. Whenever the context requires, the singular shall include the
plural, the plural shall include the singular, the whole shall include any part
thereof, any gender shall include both other genders, and the term "Buyer" shall
include the Buyer herein named and any permitted assignee of such Buyer. The
section headings contained in this Agreement are for purposes of reference only
and shall not limit, expand, or otherwise affect the construction of any
provision of this Agreement. Time is of the essence. The provisions of this
Agreement shall be construed both as covenants and conditions in the same manner
as though the words importing such covenants and conditions were used in each
separate provision hereof.
5.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to be an
original and all of which shall together constitute one and the same instrument.
5.7 No Waiver. Acceptance by either party of any performance less than
required hereby shall not be deemed to be a waiver of the rights of such party
to enforce all of the terms and conditions hereof. Except as otherwise expressly
provided herein, no waiver of any such right hereunder shall be binding unless
reduced to writing and signed by the party to be charged therewith.
5.8 Right of Access. Until the date scheduled for Closing, Buyer and
his authorized representatives shall, at all reasonable times, have the right to
enter upon and examine the Property for the purpose of examining the condition
thereof, conducting soils test, and preparing surveys. Buyer shall not conduct
any invasive drilling or testing without the prior consent of Seller; the Seller
may withhold any such consent if the proposed drilling or testing will damage
the Property. Buyer agrees to indemnify, defend, and hold Seller harmless from
all claims or liens for soils tests, surveys, or other reports or examination of
the Property ordered by Buyer or his agents or representatives. Buyer also
agrees to and hereby does indemnify and hold Seller harmless from and against
all claims, obligations, liabilities, and damages resulting from such testing,
drilling, investigations, inspections, or entry upon the Property by Buyer or
his agents, representatives, or contractors. The provisions of this section 5.8
shall survive the Closing or any termination of this Agreement.
5.9 Invalidity of Provision. If any of the provisions of this Agreement
as applied to either party or to any circumstance shall be adjudged by a court
of competent jurisdiction to be void or unenforceable for any reason, the same
shall in no way affect (to the maximum extent permitted by applicable law) any
other provision of this Agreement, the application of any such provision under
circumstances different from those adjudicated by the court, or the validity or
enforceability of this Agreement as a whole.
5.10 Quit-Claim Deed. If for any reason, other than a breach by Seller
of its obligations hereunder, the Closing does not occur, Buyer shall execute,
acknowledge, and deliver to Seller a quit-claim deed to the Property or such
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other instrument as Seller may reasonably request for purpose of eliminating any
cloud on the title to the Property that might result from this Agreement. The
provisions of this section 5.10 shall survive any termination of this Agreement.
5.11 No Recordation. Buyer covenants and agrees that neither this
Agreement nor any memorandum or other notice of this Agreement shall be recorded
in the real property records of the county in which the Property is located
without the prior written consent of Seller.
5.12 Disclaimer of Warranties. Buyer acknowledges that Buyer will,
prior to closing, have the opportunity to conduct all tests and inspections of
the property that it deems necessary or advisable. Accordingly, Seller makes no
representation or warranty, express or implied (except as may be set forth in
the deed delivered at Closing), and specifically disclaims any implied
representation or warranty including representations or warranties as to the
condition, quality, freedom from defects (whether or not detectable by
inspection), fitness for Buyer's intended use, freedom from contamination by
hazardous wastes or substances (whether or not detectable), zoning or other
legal requirements, size, acreage, or boundaries of the property. Accordingly,
Buyer assumes as of the date of Closing all risks relating to the Property
including the risks described above and/or associated with conditions that may
or may not be discoverable by inspection.
5.13 Attorneys' Fees. In the event a party commences a legal proceeding
to enforce any of the terms of this Agreement, the prevailing party in such
action shall have the right to recover reasonable attorneys' fees and costs from
the other party to be fixed by the court in the same action. The term "legal
proceedings" as used above shall be deemed to include appeals from a lower court
judgment and it shall include proceedings in the Federal Bankruptcy Court,
whether or not they are adversary proceedings or contested matters. The term
"prevailing party" as used above in reference to proceedings in the Federal
Bankruptcy Court shall be deemed to mean the prevailing party in any adversary
proceeding or contested matter, or any other actions taken by the nonbankrupt
party that are reasonably necessary to protect its rights in the subject
Property and the terms of this Agreement.
5.14 Survival. The provisions of the indemnity agreement contained in
section 5.8 shall survive any expiration or termination of this Agreement and
shall not merge into any deed delivered and accepted upon the Closing of the
transaction herein contemplated.
5.15 Successors and Assigns. The terms, covenants and conditions herein
contained shall be binding upon and inure to the benefit of the heirs,
successors, transferees and assigns of the parties hereto. Neither Buyer nor
Seller shall assign this Agreement or any rights hereunder to anyone except with
the prior written consent of the other party; provided, Seller may assign this
Agreement or its rights hereunder to any entity that is wholly-owned or
ultimately owned (i.e., through various subsidiaries) by Seller or to any third
party for purposes of effectuating a tax-tree exchange.
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IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written by the undersigned, hereunto duly authorized.
SELLER
Diatect International Corporation
/s/ Dave Andrus
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By: Dave Andrus Its CEO
BUYER
Morrell & Associates, LLC
Phil Morrell, Member
/s/ Philip Morrell
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By: Philip Morrell Its CEO
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