HomeMy WebLinkAboutPURCHASE & SALE AGREEMENT - 05-00108 - Walgreens - Site Plan.L
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Exhibit A — Legal Description of the Property
Exhibit B — Deed
Exhibit C — Owner's Affidavit
Exhibit D — Depiction of Property, Alley and Contract Properties
PURCHASE AND SALE AGREEMENT
This PURCHASE AND SALE AGREEMENT ("Agreement"), dated November jE31
2004, is made by and between The Phillips Edison Group LLC, an Ohio limited liability
company, and assigns ("Purchaser"), and Northwest Holdings, LLP, an Idaho limited liability
partnership ("Seller").
A. Seller owns certain real property located in the City of Rexburg, County of
Madison, State of Idaho.
B. Seller has agrees
Seller such real property as
contained herein.
NOW, THEREFORE, t
Article 1. Definitic
Section 1.1 I
have the meanings set forth be]
;reed to purchase from
terms and conditions
following terms shall
(a) y by Seller pursuant to
the terms hereof to Purchaser c Meridian208.28&,992 KELLER ASSOMaTEs Pocatdb 208-238-2146 rchaser of the Purchase
Price to Seller on the Closing L _.-.
(b) "Closing Date" shall mean that date which is sixty (60) days
following expiration of the Due Diligence Period, as hereinafter defined. TIME SHALL BE
OF THE ESSENCE.
(c) "Due Diligence Period" is defined in Section 1.3.
(d) "Earnest Money Deposit" shall be the sum of Twenty -Five
Thousand Dollars ($25,000);
(e) "Financing Period" (Intentionally Omitted).
(f) "Property" shall mean that certain land owned by Seller and
described in Exhibit A hereto and generally depicted on Exhibit D hereto; .all easements, if any,
benefiting the land; and all rights and appurtenances pertaining to the land, including any right,
title and interest of Seller in and to rights of way; all tenements, hereditaments, buildings,
appurtenances, rights, privileges, licenses, leases, easements, and rights -of -way incident thereto,
such land containing approximately .56 acres more or less and being located at 164 East Main
616824.4
Street, Rexburg, Idaho. Seller acknowledges that Purchaser is acquiring the Property as part of a
larger assemblage of property required for Purchaser's intended development. An integral
portion of such property is an alley (the "Alley") which is currently owned by the City of
Rexburg and is depicted on Exhibit D attached hereto. Seller further acknowledges that if
Purchaser is successful in getting the City of Rexburg to vacate or abandon the Alley, a portion
of the same shall become a part of the Property and shall be conveyed to Purchaser at Closing;
however, there shall be no increase in the Purchase Price, as set forth below, as a result of the
addition of the property included in the Alley.
(g) "Purchase Price" shall mean the following:
(ii) A twenty percent (20%) membership interest in a Utah limited
liability company (the "Company") to be created by Purchaser for the
purpose of acquiring, owning and operating the Property.
Section 1.2 Purchase and Sale. Subject to the terms and conditions of this
Agreement, Seller hereby agrees to sell and convey to Purchaser, and Purchaser hereby agrees to
purchase from Seller, the Property.
Section 1.3 Inspection. Purchaser shall have a period of one hundred eighty
(180) days after execution of this Agreement ("Due Diligence Period") to inspect the Property,
including but not limited to performing environmental studies, soil borings, zoning confirmation,
studies on the feasibility of expansion, studies as to feasibility of the Property for its intended
purpose, utility availability and adequacy, title and title related issues and any other matters
Purchaser deems appropriate to its decision whether to proceed with the purchase of the
Property. Purchaser shall not conduct any drilling or other invasive procedures on the Property
without the prior written approval of Seller, which such approval shall not be unreasonably
withheld or delayed. Seller shall reasonably cooperate with Purchaser during the Due Diligence
Period; provided, however, that Seller shall not be required to incur any costs or expenses in
connection with Purchaser's inspection of the Property.
Seller shall, within fifteen (15) days after execution of this Agreement (the "Initial
Production Date"), provide Purchaser with copies of any information in Seller's possession that
relates to the Property, including but not limited to copies of the following (the "Documents"):
(a) all reports, studies, audits, licenses, permits, correspondence,
documents or other materials relating to the past or present, actual or threatened discharge from,
off -site release of, treatment, storage or disposal of, or existence on the Property, or adjacent
property, of a "Hazardous Substance," as hereinafter defined;
(b) all federal, state or local government reports, orders, audits,
inspections, or correspondence pertaining to the physical condition of the Property, the presence
or location of Hazardous Substances thereon, or compliance of Seller or Property with applicable
building, health, safety, or environmental laws, codes, rules or regulations, including, without
limitation any written notices of violation, performed or required investigations, approved
remediation plans and/or approved remediation activities;
616824.4 2
(c) copies of all drawings, plans, permits, applications, maps,
preliminary or other plats, approvals, surveys, leases, contracts, 'architect's work product,
consultant material and similar documents pertaining to the Property;
(d) copies of any unrecorded covenants, ordinances, conditions and
restrictions affecting the Property;
(e) copies of any soils, water and engineering reports pertaining to the
Property;
(f) copies of any written notices, reports, citations, correspondence, or,
memoranda received by S 11Sr from any governmental agency (federal, state, county or
municipal) concerning the t o ertivIincluding, but not limited to, copies of any governmental
zoning letters);
(g) copies of all agreements, studies,' reports, correspondence and
other documents relating to the presence or absence of any endangered species or
environmentally sensitive areas (including without limitation any areas that were wetlands or that
have been or potentially could be designated wetlands or waters of the United States) on the
Property; and
(h) copies of all other. contracts, documents, agreements, plans,
specifications, drawings, records and information pertaining to or affecting the Property that are
in Seller's possession or under Seller's reasonable control.
Seller agrees to furnish to Purchaser, promptly after receipt of the same by Seller, any
Documents described above and coming into Seller's possession or produced by Seller after the
Initial Production Date and to continue to provide the same during the term of this Agreement.
To the extent any of the foregoing, or the Title Commitment and copies of exceptions thereto, are
delivered after the Initial Production Date, the Due Diligence Period shall be extended one day
for every day of delay in delivering the required documents.
Seller shall provide Purchaser with reasonable access to the Property for inspection
purposes. In the event Purchaser's inspection of the Property and the Documents and/or such
tests, reports, studies or investigations carried out buy Purchaser confirm, in Purchaser's sole
judgment and discretion, that the Property is suitable for Purchaser's intended use, Purchaser
shall send written notice (the "Notice of Suitability") to Seller on or before expiration of the Due
Diligence Period. If Purchaser fails to send Seller the Notice of Suitability on or before the last
day of the Due Diligence Period, this Agreement shall automatically terminate. In the event of
such automatic termination, the Earnest Money Deposit shall be returned to Purchaser, and the
parties shall have no further obligation to each other, except as otherwise provided in this
Agreement with respect to certain indemnities and other obligations that survive the termination
of this Agreement.
Section 1.4 Title Examination and Survey. As soon as possible after the
execution of this Agreement, Seller shall, at Seller's expense, deliver or cause to be delivered to
Purchaser: (i) a title commitment ("Title Commitment") issued by First American Title Insurance
Company, Rexburg, Idaho (the. "Title Company") covering the Property, obligating the Title
616824A 3
Company to issue an ALTA (Form 10-17-92) Owner's Policy of Title Insurance at the Closing in
the amount of the cash component of the Purchase Price; and (ii) true, correct, and legible copies of
any and all instruments referred to in Schedule B-2 of the Title Commitment. The Title
Commitment shall affirmatively provide for the deletion, at Purchaser's sole expense, of all standard
printed exceptions of Schedule B-2 thereof. In addition, Seller shall provide Purchaser with copies,
or notice, of any unrecorded .covenants, conditions, restrictions, contracts, leases, easements,
encroachments, overlaps, boundary line disputes, or claims of easements affecting the Property,
of which Seller has actual knowledge, which are not included in the Title Commitment ("Additional
Encumbrances").
As soon as possible after the execution of this Agreement, Purchaser shall obtain, at
Purchaser's sole expense, a current ALTA survey of the Property (the "Survey"), prepared by a
surveyor licensed in the State of Idaho. The Survey shall be in a form acceptable to the Title
Company in order to allow the Title Company to delete the survey exception from the title policy to
be issued by the Title Company (the "Title Policy"). Purchaser shall have thirty (30) days after the
receipt of the Title Commitment and any Additional Encumbrances, and the Survey (the "Title
Review Deadline") to review them and to deliver in writing to Seller such objections as
Purchaser may have to anything contained therein ("Title Defects"). Any such item to which
Purchaser does not object shall be deemed a "Permitted Exception." If there are objections by
Purchaser, Seller shall have fifteen (15) days from the date any such objections are received by
Seller in which to correct or remove, at Seller's cost, such objected to items. If, Seller is unable
or unwilling to correct or remove such objected to items, to Purchaser's satisfaction within said
fifteen (15) day period, or if, for any reason, Seller is unable to convey title in accordance with
the provisions set forth below, Purchaser may, at its option, either waive such Title Defects and
accept such title to the Property as Seller can convey or terminate this Agreement. If Purchaser
waives any Title Defects then appropriate exception shall be taken therefore in Seller's Deed and
such matters shall be deemed Permitted Exceptions.
Section 1.5 Pre -Closing ghts and Obligations. (a) Purchaser and its agents
shall be permitted to enter onto the Property at any time and from time to time prior to Closing.
Any entry upon and on the Property is at the Purchaser's, and Purchaser's agents, servants and
employees, sole risk,. Purchaser shall indemnify and hold harmless the Sellers from any and all
claims, losses, expenses, including reasonable attorney's fees and expenses on account of
Purchaser's entry onto the Property and shall be obligated to repair, replace or restore the
Property to substantially the same condition as it existed prior to said testing and inspections if
said damage was caused by or as a result of actions by Purchaser or its agents. The foregoing
obligations of Purchaser shall survive the termination of this Agreement. Purchaser shall provide
proof of liability insurance and shall require any of its agents performing testing or inspections
on the Property to have liability insurance. (b) Seller shall not (i) transfer, sell, assign, or
otherwise convey the Property, or any portion thereof, without the written consent of Purchaser,
which may be withheld in Purchaser's sole discretion; (ii) create, assume or permit to exist any
further mortgage, pledge, or lien or encumbrance upon the Property without Purchaser's prior
written consent, which may be withheld in Purchaser's sole discretion, or (iii) enter into any
lease, commitment, or transaction in respect to the Property without the prior written consent of
Purchaser, which may be withheld in Purchaser's sole discretion. The foregoing to the contrary
notwithstanding, Seller may enter into backup agreements for the sale of the Property. Seller
616924.4 4
shall at all times prior to Closing, at its sole cost and expense, maintain the Property in its present
condition and repair and shall not allow waste to be permitted on the Property.
Section 1.6 Earnest Money Deposit. Within' five (5) days of the execution of
this Agreement, Purchaser shall deposit the Earnest Money Deposit with the Title Company, to
be applied in accordance with this Agreement. The Title Company shall deposit all Earnest
Money Deposit received hereunder in a federally insured, interest -bearing account for the benefit
of Purchaser and Seller. All interest which accrues on the Earnest Money Deposit will be taxed
to Purchaser. All interest accruing thereon shall be a part thereof and shall be credited at Closing
or returned to Purchaser as described herein.
Section 1.7 Company Organizational Documents. On or before that date
which is sixty (60) days following execution of this Agreement, Purchaser shall deliver to Seller
copies of draft organizational documents for the Company, including without limitation, Articles
of Organization, an Operating Agreement, and an Assignment and Assumption of Membership
Interest (the "Assignment Agreement") allowing Seller to become a member of the Company.
The Assignment Agreement, and any other documents that may be reasonably necessary to
evidence Seller's membership interest in the Company, shall be subject to reasonable negotiation
between Purchaser and Seller, but must be agreed to between the parties prior to that date which
is ninety (90) days following execution of this Agreement. As a member of the Company, Seller
shall receive a credit to its capital account in the amount of One Hundred Eighty Seven
Thousand Five Hundred dollars $187,500 and shall be entitled to voting rights and allocations of
profits and losses pro rata according to its membership interest. Seller acknowledges that the
Operating Agreement and/or the Assignment Agreement shall contain provisions allowing the
Company to receive a development fee, in an amount not to exceed one hundred thousand dollars
($100,000), which at the sole discretion of Purchaser, as manager of the Company, may either (i)
remain with the Company for the purpose of covering development costs or operation needs; or
(ii) pass through to Purchaser, but in no event shall it be deemed a "profit" of the Company to
which Seller, as a member of the Company, shall be entitled to any distribution. The Operating
Agreement of the Company shall include restrictions on the ability of the members to transfer
their membership interests in the Company. In the event Purchaser fails to deliver the Company
organization documents in a timely manner as required in above, Seller shall have the right, but
not the obligation to terminate this Agreement, upon ten (10) days prior written notice to
Purchaser. If Purchaser and Seller are unable to agree on the form and content of the
organizational documents of the Company prior to that date which is ninety (90) days following
execution of this Agreement, either party shall have the right to terminate this Agreement upon
ten (10) days written notice to the other party. In the event of any such termination, the Earnest
Money Deposit shall be returned to Purchaser, and the parties shall have no further obligations
one to the other, except as otherwise provided in this Agreement with respect to certain
indemnities and other obligations that survive the termination of this Agreement.
Section 1.8 Contract Milestones. Notwithstanding anything in this Agreement
to the contrary, and without in any way impairing Purchaser's right to terminate this Agreement
in its sole discretion on or before the expiration of the Due Diligence Period, Purchaser and
Seller agree to the following critical dates and deadlines for performance of certain obligations
under this Agreement:
616824.4 5
(a) WalUeen Submittal. It is the intention of Purchaser to obtain
approval from Walgreen Company to develop a Walgreen's retail drug store on the Property and
to execute a lease with Walgreen's for operation of such store. In order to be in a position to
obtain approval from Walgreen Company for the construction of a store on the Property,
Purchaser must assemble additional properties adjacent to the Property to satisfy the minimum
acreage requirements for a Walgreen's and must obtain certain approvals from the City of
Rexburg. Purchaser shall timely make and diligently pursue all contracts, applications and
submittals necessary to allow Purchaser to construct a Walgreen's retail drug store on the
Property as soon as is commercially practicable following Closing. Seller acknowledges that
approval of the Property by Walgreen Company is a critical condition to Purchaser closing on
the acquisition of the Property and Seller covenants to reasonably cooperate with Purchaser, at
no cost to Seller, in providing Walgreen Company with any information necessary to facilitate
such approval, including supporting Purchaser's application for vacation or abandonment of the
Alley by the City of Rexburg.
(b) Specific Deadlines. Without limiting the generality of Purchaser's
obligations under Section 1.8(a), Purchaser must meet the following specific deadlines: (i) have
the properties described on "Exhibit D" attached hereto (the "Contract Properties") under
contract for purchase no later than that date which is sixty (60) days following execution of this
Agreement; (ii) submit an application to the City of Rexburg for vacation or abandonment of the
Alley on or before that date which is seventy (70) days following execution of this Agreement;
and (iii) submit a real estate approval package (including a site plan and proposed rent structure)
to Walgreen Company for approval no later than that date which is one hundred twenty (120)
days following execution of this Agreement and diligently pursue approval of such application
thereafter.
After each of the above specific deadlines, if Seller believes that Purchaser has failed to
meet any of its obligations as required in Section 1.8(b) above, Seller shall have the right, but not
the obligation, to terminate this Agreement, upon ten (10) days prior written notice to Purchaser;
provided, however, that this Agreement shall not terminate if Purchaser is able to provide to
Seller within such ten (10) days evidence showing that Purchaser has complied with the
requirements in Section 1.8(b) or is making commercially reasonable efforts to comply with such
requirements, but has failed to do so for reasons outside of Purchaser's control. In the event of
any such termination, the Earnest Money Deposit shall be returned to Purchaser, and the parties
shall have no further obligations one to the other, except as otherwise provided in this Agreement
with respect to certain indemnities and other obligations that survive the termination of this
Agreement.
Article 2. Closing.
Section 2.1 Time and Place. The transaction contemplated hereby shall close
at such time and place as the parties may mutually agree provided said Closing shall occur on or
before the Closing Date.
Section 2.2 Conditions Precedent to Obligations of Seller. The obligation of
Seller to sell and convey to Purchaser on the Closing Date Seller's interest in the Property is
616824.4 6
subject to the fulfillment of the following conditions to the reasonable satisfaction of Seller prior
to or as of the Closing Date:
(a) the representations and warranties of Purchaser set forth in Section
4 shall be true and correct in all material respects on and as of the Closing Date.
(b) Purchaser shall have paid to Seller, in cash, or by cashier's or
certified check or wire transfer of immediately available Federal funds, the method of payment
to be at Seller's election, the cash component of the Purchase Price.
Date, the following:
(c) Purchaser shall have delivered to Seller, on or prior to the Closing
(i) Incumbency Certificate of Purchaser. An incumbency
certificate executed by an appropriate authority on behalf of Purchaser
dated as of the Closing Date certifying the names and true signatures of
the officers of Purchaser authorized on behalf of Purchaser to sign this
Agreement, and the other documents required to be executed by Purchaser
at Closing in connection with the transactions contemplated hereby.
(ii) Resolutions of Purchaser. A copy of Purchaser's
resolutions authorizing Purchaser to enter into this Agreement and the
other closing documents and to perform its obligations hereunder and
thereunder, certified by an officer of Purchaser.
(iii) Certificate of Good Standing. An original Certificate of
good standing or its equivalent for Purchaser issued by the State of Ohio
(or of the appropriate jurisdiction for the Company), dated within thirty
(30) days of the Closing Date.
(iv) Organizational Documents of the Company. A fully
executed copy of the Articles of Organization, Operating Agreement, and
Assignment and Assumption of Membership Interest for the Company.
Section 2.3 Conditions Precedent to Obligations of Purchaser. The obligation
of Purchaser to purchase the Property on the Closing Date is subject to the fulfillment of the
following conditions to Purchaser's reasonable satisfaction prior to or as of the Closing Date:
(a) the representations and warranties of Seller set forth in Article 3
shall be true and correct in all material respects on and as of the Closing Date.
(b) Purchaser shall be satisfied, in its sole judgment and discretion,
with its findings concerning the Property during the Due Diligence Period and shall have elected
in writing not to terminate this Agreement during the Due Diligence Period.
(c) Seller's actions to facilitate the Closing are not subject to a
referendum or published threat thereof.
616824.4 7
(d) Seller shall have delivered the following documents to Purchaser
on or prior to the Closing Date:
(i) Deed. A grant deed executed by Seller conveying fee
simple title to the Property to Purchaser, in the form attached to this
Agreement as Exhibit B, free, clear and unencumbered except for any
Permitted Exceptions.
(ii) Foreign Person. An affidavit of Seller certifying that Seller
is not a "foreign person," as defined in the Federal Foreign Investments in
Real Property Tax Act of 1980, and the 1984 Tax Reform Act, as
amended.
(ill) Owner's Affidavit. An executed affidavit in the form of
Exhibit C attached hereto or in such other reasonable form as may be
reasonably acceptable to the title insurance company issuing the owner's
policies relating to the Property which affidavit shall provide inter alia, the
basis for the deletion of title insurance as to mechanic's lien coverage.
(e) Evidence that Seller is properly authorized and has approved the
execution of this Agreement and the sale and conveyance of the Property.
Section 2.4 Prorations.
(a) Taxes and Assessments. All non -delinquent real estate taxes and
assessments on the Property shall be prorated as of the Closing Date based on the actual current
tax bill, but if the Closing shall occur before the tax rate or the assessed valuation of all or any
portion of the Property is fixed for the then current tax year, the proration of taxes for such
portion of the Property shall be based upon the tax rate for the preceding year applied to the
latest known assessed valuation.
(b) Method of Proration. All prorations under this Section 2.4 shall be
prorated on the day of Closing on the basis of the most recent ascertainable amounts or other
reliable information in respect to each item. Such adjustments shall be paid by Purchaser to
Seller (if the prorations result in a net credit to Seller) by increasing the cash due from Purchaser
at Closing. Such adjustments shall be paid by Seller to Purchaser (if the prorations result in a net
credit to Purchaser), by reducing the cash due to Seller at Closing. All other costs and expenses
not specifically addressed in this Section 2.4 shall be allocated between Purchaser and Seller in
accordance with the customary practice of Madison County, Idaho.
Section 2.5 Condemnation. In the event of a taking by condemnation or
similar proceedings or actions of any portion of the Property, which is not material to the use of
the remainder, Seller shall assign or pay to Purchaser at Closing Seller's interest in and to any
condemnation awards or proceeds from any such proceedings or actions in lieu thereof and
Purchaser shall pay the full amount of the Purchase Price hereunder to Seller. In the event of a
taking by condemnation or similar proceedings or actions of all of the Property or any portion of
the Property which is material to the use of the remainder, at Purchaser's option, Purchaser may
terminate this Agreement or proceed to Closing. If Purchaser elects to proceed to Closing, Seller
616823.4 8
shall assign or pay to Purchaser at Closing Seller's interest in and to any and all condemnation
awards or proceeds from any such proceedings or actions in lieu thereof and Purchaser shall pay
the full amount of the Purchase Price hereunder to Seller.
Section 2.6 Closing and Post -Closing Deliveries. Purchaser and Seller shall
also deliver at Closing an agreed upon Closing Statement, and such other documentation as is
customarily delivered on a mutual basis in the closing of property similar to the Property in
Madison County, Idaho. After the Closing, Purchaser and Seller shall do such things as may be
reasonably requested by the other in order to more effectively consummate or document the
transactions contemplated by this Agreement, including the execution and delivery of any
additional documents consistent with the terms of this Agreement.
Article 3. Representations and Warranties of Seller.
Section 3.1 Seller Representation. Seller hereby represents and warrants to
Purchaser, its successors and assigns, that:
(a) Seller owns all legal, record and equitable title to the Property,
subject to all real property taxes and assessments, all existing patent reservations, easements,
rights of way, protective covenants and other matters of record, all applicable zoning ordinances,
building codes, laws and regulations, and all encroachments, overlaps, boundary line disputes,
claims of easements and other matters that would be disclosed by an accurate survey or
inspection of the Property.
(b) Seller has all requisite power and authority to own the Property, to
execute, deliver and perform this Agreement and to consummate the transactions contemplated
hereby.
(c) This Agreement has been duly authorized, executed and delivered
by Seller and constitutes the legal, valid and binding agreement of Seller, enforceable against
Seller in accordance with its terms, except as such terms may be limited by (i) bankruptcy,
insolvency, moratorium or other similar laws affecting the rights of creditors generally, and (ii)
general principles of equity (regardless of whether enforceability is considered in a proceeding in
equity or at law).
(d) Neither the execution, delivery and performance of this Agreement
nor the consummation of the transactions contemplated hereby (i) is prohibited by or violates any
law, statute, rule, regulation, judgment, order, writ, injunction or decree which is binding upon
Seller or any of its properties or assets, (ii) will violate any agreement or instrument to which
Seller is a party or by which Seller is bound, or (iii) will require the consent, approval, authority
or order of any party or any court, governmental agency or both that has not been obtained in
writing.
(e) Seller has no actual knowledge of any pending or threatened
condemnation proceeding against all or any portion of the Property and Seller has received no
written notice of any pending or threatened litigation initiated against all or any portion of the
Property or against Seller with respect to the Property.
616824.4 9
(f) There is no action, suit, proceeding or investigation pending or
threatened before any agency, court of governmental authority which relates to Seller or the
Property. Seller is not contemplating the institution of insolvency proceedings.
(g) There are no contracts relating to the Property which are not
terminable with thirty (30) days prior written notice.
(h) Seller is not a foreign person as defined in Section 1445 of the
Internal Revenue Code, as amended.
(i) There are no parties in possession of the Property, and no party has
been granted any licenses, lease or other right relating to the use or possession of the Property
which are not terminable prior to the Closing Date.
0) There are no unpaid -for improvements in, to or about the Property
which might form the basis of a mechanic's lien against the Property.
(k) To Seller's knowledge, there are no off -record or undisclosed legal
or equitable interests in the Property owned or claimed by any person, firm, corporation or other
entity other than Seller.
(1) Seller has not received written notice from any governmental or
quasi -governmental agency requiring the correction of any condition with respect to the
Property.
(m) Seller has not used the Property, and Seller has no actual
knowledge of the use of the Property by any prior owner or any other person, in violation of any
applicable Environmental Law. Seller has no actual knowledge of (i) the Property being on any
"Superfund" list under any applicable Environmental Law, (ii) the discharge of any Hazardous
Substance into the soil or groundwater in, under or around the Property, or (iii) any lien related
to any environmental matter affecting the Property. The foregoing representations and
warranties of Seller are subject to any and all matters disclosed in the following report to be
provided to Purchaser pursuant to Section 1.3(a) above: Phase 2 Environmental Site Assessment,
Rexburg Motor Sports Building, 164 E. Main St., Rexburg, Idaho 83440, dated December 4,
2000, prepared by Rocky Mountain Environmental Associates, Inc. (RMEA #00-0058). As used
in this Contract, "Hazardous Substance" shall mean and include all hazardous or toxic
substances, wastes or materials, any pollutants or contaminates (including, without limitation,
asbestos and raw materials which include hazardous constituents, radon and urea formaldehyde),
and any other similar substances, or materials which are included or regulated by any local, state,
or Federal law, rule or regulation pertaining to environmental regulation, contamination, clean up
or disclosure, including, without limitation, the Comprehensive Environmental Response
Compensation and Liability Act of 1980, the Superfund Amendments and Reauthorization Act
of 1986, the Resource Conservation and Recovery Act, the Toxic Substances Control Act, and
the Federal Insecticide, Fungicide and Rodenticide Act, as amended, (collectively,
"Environmental Laws").
Notwithstanding anything to the contrary contained herein, the representations and
warranties set forth in (a) through (m) above shall be deemed remade as to the Property as of the
616824.4 10
Closing, and such representations and warranties shall survive Closing for a period of one year
and shall not be merged therein.
Article 4. Representations and Warranties of the Purchaser. Purchaser hereby
represents and warrants to Seller that:
(a) Purchaser (i) is an limited liability company duly organized and
validly existing under the laws of Ohio, and (ii) has all requisite power and authority to conduct
its business and to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby.
(b) The signatory hereto for Purchaser has the requisite power and
authority to execute and deliver this Agreement on behalf of Purchaser and, by virtue of such
execution and delivery, this Agreement has been duly authorized, executed and delivered by
Purchaser and constitutes the legal, valid and binding agreement of Purchaser, enforceable
against Purchaser in accordance with its terms, except as such terms may be limited by (i)
bankruptcy, insolvency, moratorium or other similar laws affecting the rights of creditors
generally, and (ii) general principles or equity (regardless of whether enforceability is considered
in a proceeding in equity or at law).
(c) Neither the execution, delivery and performance of this Agreement
nor the consummation of the transactions contemplated hereby (i) is prohibited by or violates any
law, statue, rule or regulation, judgment, order, writ, injunction or decree which is binding upon
Purchaser or any of its properties or assets, (ii) will violate any provision of the articles of
organization, operating agreement or resolutions of Purchaser, (iii) will violate any mortgage,
indenture, agreement, instrument or other contract to which Purchaser is a party, or by which
Purchaser is bound, or (iv) will require the consent, approval, authority or order of any party or
of any court, governmental agency or both that has not been obtained in writing.
(d) Purchaser will be permitted access to the Property and will have
actually inspected the Property prior to Closing. Purchaser's purchase of the Property is based
upon such inspection and not on any representations or warranties of Seller, except those
expressly set forth in this Agreement. Purchaser agrees to accept the Property in an AS IS,
WHERE IS condition, subject only to the express warranties of Seller set forth in this
Agreement. Purchaser hereby acknowledges that neither Seller nor any person acting on behalf
of Seller has made any representation, warranty, guaranty or promise concerning the Property,
whether oral or written, except as set forth in this Agreement.
(e) Notwithstanding anything to the contrary contained herein, (i) the
representations and warranties set forth in (a) through (c) above shall be deemed remade as to the
Property as of the Closing, and such representations and warranties shall survive Closing for a
period of one year and shall not be merged therein, and (ii) the representations and warranties set
forth in (d) above shall be deemed remade as to the Property as of the Closing, and such
representations and warranties shall survive Closing indefinitely and shall not be merged therein.
616824.4 11
Article 5. Termination; Default, Indemnification.
Section 5.1 Termination by Purchaser. Prior to fulfilling all conditions
precedent to this Agreement, Purchaser, at its option, may terminate this Agreement upon written
notice to Seller for the following reasons:
(a) During the Due Diligence Period, as may be extended, if Purchaser
is not satisfied, in its sole discretion, with the condition of the Property or with the results of any
findings, tests or inspections concerning the Property.
(b) If any conditions precedent set forth in Section 2.3 shall not have
been complied with or performed in any material respect on or the dates set forth in such Section
2.3.
In the event of termination for any of the reasons described above, the Earnest Money Deposit
shall be promptly returned to the Purchaser, and the parties shall have no further obligations one
to the other, except as otherwise provided in this Agreement with respect to certain indemnities
and other obligations that survive the termination of this Agreement.
Section 5.2 Default by Seller. In the event Closing and the consummation of
the transaction herein contemplated do not occur by reason of any default by Seller, Purchaser
may seek to have this Agreement specifically performed, and Seller shall reimburse Purchaser
for its costs and expenses, including reasonable attorneys fees, incurred in such a proceeding if
Purchaser prevails in such an action. If specific performance is impractical, or Purchaser does
not desire to pursue specific performance due to a material change in the condition of the
Property after the Due Diligence Period, Purchaser may terminate this Agreement and recover
damages from Seller equal to the amount of actual out-of-pocket expenses incurred by Purchaser
in exercise of Purchaser's due diligence hereunder but not to exceed Twenty -Five Thousand
Dollars ($25,000).
Section 5.3 Default by Purchaser. Upon default by Purchaser of its obligation
to acquire the Property in accordance with this Agreement, 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 receive and retain the Earnest Money Deposit as its sole and exclusive
remedy and except as otherwise provided in this Agreement with respect to certain indemnities
and other obligations that survive the termination of this Agreement. If Seller is required to take
any action to collect the Earnest Money Deposit, Purchaser shall reimburse Seller for its costs
and expenses, including reasonable attorneys fees, incurred in such action if Seller prevails in
such an action.
THE PARTIES ACKNOWLEDGE THAT IN THE EVENT OF ANY DEFAULT BY
PURCHASER UNDER THIS AGREEMENT, SELLER'S DAMAGES WOULD BE
DIFFICULT OR IMPOSSIBLE TO COMPUTE AND THAT THE EARNEST MONEY
DEPOSIT MADE BY PURCHASER UNDER SECTION 1.1(d) REPRESENTS THE
REASONABLE ESTIMATE OF SUCH DAMAGES ESTABLISHED BY THE PARTIES
THROUGH GOOD FAITH CONSIDERATION OF THE FACTS AND CIRCUMSTANCES
SURROUNDING THE TRANSACTION CONTEMPLATED UNDER THIS AGREEMENT
616824.4 12
AS OF THE DATE HEREOF. 1N THE EVENT OF SUCH DEFAULT 13Y PURCHASER
L:tiDER THIS AGREEME_'T . -IRE TITLE CO\LP:��Y SI-L.'.LL RELEASE THE EARNEST
MONEY DEPOSIT TO SELLER, AND SELLER SHALL RETAIN SUCH AMOUNTS AS
LIQUIDATED DAMAGES IN LIEU OF ANY OTHER CLAIM SELLER MAY HAVE AT
LAW OR IN EQUITY (INCLUDING, WITHOUT LIMITATION, SPECIFIC
PERFORMANCE) ARISING BY REASON OF SUCH DEFAULT, EXCEPT AS
OTHERWISE PROVIDED IN THIS AGREEMENT WITH RESPECT TO CERTAIN
INDEMNITIES AND OTHER OBLIGATIONS THAT SURVIVE THE TERMINATION OF
THIS AGREEMENT. THE PARTIES HAVE INITIALED THIS SECTION 5.3 TO
ESTABLISH THEIR INTENT TO LIQUIDATE DAMAGES.
Seller:
Purchaser.
Section 5.4 Seller's Indemnification. Seller shall indemnify and hold
Purchaser harmless from and against all liability, losses, damages, costs and expenses (including
reasonable attorney's fees) (hereinafter "loss" or "losses") incurred or suffered by Purchaser as a
result of or in respect to (i) all suits, claims and other legal action taken or brought against
Purchaser with regard to the Property, arising from action taken by Seller or facts existing prior
to the Closing Date, specifically excluding any losses, damages, costs and expenses associated
with any required cleanup of the Property resulting from violation of any Environmental Laws to
the extent the same do not arise from a breach of a representation or warranty by Seller
hereunder; (ii) any and all other liabilities and obligations of Seller relating to the Property which
are not expressly assumed by Purchaser hereunder, whether presently known or unknown; and
(iii) the breach of any representation or warranty by Seller hereunder which representations and
warranties shall survive Closing for the period specified in this Agreement.
Section 5.5 Purchaser's Indemnification. Purchaser shall indemnify and hold
Seller harmless from and against all liability, losses, damages, costs and expenses (including
reasonable attorney's fees) (hereinafter "loss" or "losses") incurred or suffered by Seller as a
result or in respect to (i) all suits, claims and other legal action taken or brought against Seller
with regard to the Property, arising from actions taken by Purchaser after the Closing Date; (ii)
any and all liabilities and obligations of Seller relating to the Property which are expressly
assumed by Purchaser in writing; and (iii) the breach of any representation or warranty by
Purchaser hereunder which representations and warranties shall survive Closing for the period
specified in this Agreement.
Article 6. Brokerage. Seller hereby represents and warrants to Purchaser that Seller
has not dealt with any broker or finder in respect to the transactions contemplated by this
Agreement and Seller hereby agrees to indemnify Purchaser for any claim for brokerage
commission or finder's fee asserted by a person, firm or corporation claiming to have been
engaged by Seller. Purchaser hereby represents and warrants to Seller that Purchaser has not
dealt with any broker or finder in respect to the transactions contemplated by this Agreement,
other than Judy Hobbs of Realty Quest ("Broker") and Purchaser hereby agrees to indemnify
Seller for any claim for brokerage commission or finder's fee asserted by a person, firm or
616824.4 13
AS OF THE DATE HEREOF. IN THE EVENT OF SUCH DEFAULT BY PURCHASER
UNDER THIS AGREEMENT, THE TITLE COMPANY SHALL RELEASE THE EARNEST
MONEY DEPOSIT TO SELLER, AND SELLER SHALL RETAIN SUCH AMOUNTS AS
LIQUIDATED DAMAGES IN LIEU OF ANY OTHER CLAIM SELLER MAY HAVE AT
LAW OR IN EQUITY (INCLUDING, WITHOUT LIMITATION, SPECIFIC
PERFORMANCE) ARISING BY REASON OF SUCH DEFAULT, EXCEPT AS
OTHERWISE PROVIDED IN THIS AGREEMENT WITH RESPECT TO CERTAIN
INDEMNITIES AND OTHER OBLIGATIONS THAT SURVIVE THE TERMINATION OF
THIS AGREEMENT,THE PARTIES HAVE INITIALED THIS SECTION 5.3 TO
ESTABLISH THEI TO LIQUIDATE DAMAGES.
Seller:
Purchaser:
Section 5.4 Seller's Indemnification Seller shall indemnify and hold
Purchaser harmless from and against all Iiability, losses, damages, costs and expenses (including
reasonable attorney's fees) (hereinafter "loss" or "losses') incurred or suffered by Purchaser as a
result of or in respect to (i) all suits, claims and other legal action taken or brought against
Purchaser with regard to the Property, arising from action taken by Seller or facts existing prior
to the Closing Date, specifically excluding any losses, damages, costs and expenses associated
with any required cleanup of the Property resulting from violation of any Environmental Laws to
the extent the same do not arise from a breach of a representation or warranty by Seller
hereunder; (ii) any and all other liabilities and obligations of Seller relating to the Property which
are not expressly assumed by Purchaser. hereunder, whether presently known or unknown; and
(iii) the breach of any representation or warranty by Seller hereunder which representations and
warranties shall survive Closing for the period specified in this Agreement.
Section 5.5 Purchaser's Indemnification. Purchaser shall indemnify and hold
Seller harmless from and against all liability, losses, damages, costs and expenses (including
reasonable attorney's fees) (hereinafter "loss" or "losses") incurred or suffered by Seller as a
result or in respect to (i) all suits, claims and other legal action taken or brought against Seller
with regard to the Property, arising from actions taken by Purchaser after the Closing Date; (ii)
any and all liabilities and obligations of Seller relating to the Property which are expressly
assumed by Purchaser in writing; and (iii) the breach of any representation or warranty by
Purchaser hereunder which representations and warranties shall survive Closing for the period
specified in this Agreement
Article 6. Brokerage. Seller hereby represents and warrants to Purchaser that Seller
has not dealt with any broker or finder in respect to the transactions contemplated by this
Agreement and Seller hereby agrees to indemnify Purchaser for any claim for brokerage
commission or finder's fee asserted by a person, firm or corporation claiming to have been
engaged by Seller. Purchaser hereby represents and warrants to Seller that Purchaser has not
dealt with any broker or finder in respect to the transactions contemplated by this Agreement,
other than Judy Hobbs of Realty Quest ("Broker') and Purchaser hereby agrees to indemnify
Seller for any claim for brokerage commission or finder's fee asserted by a person, firm or
616824.4 13
AS OF THE DATE HEREOF. IN THE EVENT OF SUCH DEFAULT BY PURCHASER
UNDER THIS AGREEMENT, THE TITLE COMPANY SHALL RELEASE THE EARNEST
MONEY DEPOSIT TO SELLER, AND SELLER SHALL RETAIN SUCH AMOUNTS AS
LIQUIDATED DAMAGES IN LIEU OF ANY OTHER CLAIM SELLER MAY HAVE AT
LAW OR IN EQUITY (INCLUDING, WITHOUT LIMITATION, SPECIFIC
PERFORMANCE) ARISING BY REASON OF SUCH DEFAULT, EXCEPT AS
OTHERWISE PROVIDED IN THIS AGREEMENT WITH RESPECT TO CERTAIN
INDEMNITIES AND OTHER OBLIGATIONS THAT SURVIVE THE TERMINATION OF
THIS AGREEMENT. THE PARTIES HAVE INITIALED THIS SECTION 5.3 TO
ESTABLISH THEIR INTENT TO LIQUIDATE DAMAGES.
Seller: CT01
Purchaser:
Section 5.4 Seller's Indemnification. Seller shall indemnify and hold
Purchaser harmless from and against all liability, losses, damages, costs and expenses (including
reasonable attorney's fees) (hereinafter "loss" or "losses") incurred or suffered by Purchaser as a
result of or in respect to (i) all suits, claims and other legal action taken or brought against
Purchaser with regard to the Property, arising from action taken by Seller or facts existing prior
to the Closing Date, specifically excluding any losses, damages, costs and expenses associated
with any required cleanup of the Property resulting from violation of any Environmental Laws to
the extent the same do not arise from a breach of a representation or warranty by Seller
hereunder; (ii) any and all other liabilities and obligations of Seiler relating to the Property which
are not expressly assumed by Purchaser hereunder, whether presently known or unknown; and
(iii) the breach of any representation or warranty by Seller hereunder which representations and
warranties shall survive Closing for the period specified in this Agreement.
Section 5.5 Purchaser's Indemnification. Purchaser shall indemnify and hold
Seller harmless from and against all liability, losses, damages, costs and expenses (including
reasonable attorney's fees) (hereinafter "loss" or "losses") incurred or suffered by Seller as a
result or in respect to (i) all suits, claims and other legal action taken or brought against Seller
with regard to the Property, arising from actions taken by Purchaser after the Closing Date; (ii)
any and all liabilities and obligations of Seller relating to the Property which are expressly
assumed by Purchaser in writing; and (iii) the breach of any representation or warranty by
Purchaser hereunder which representations and warranties shall survive Closing for the period
specified in this Agreement.
Article 6. Brokeralre. Seller hereby represents and warrants to Purchaser that Seller
has not dealt with any broker or finder in respect to the transactions contemplated by this
Agreement and Seller hereby agrees to indemnify Purchaser for any claim for brokerage
commission or finder's fee asserted by a person, firm or corporation claiming to have been
engaged by Seller. Purchaser hereby represents and warrants to Seller that Purchaser has not
dealt with any broker or finder in respect to the transactions contemplated by this Agreement,
other than Judy Hobbs of Realty Quest (`Broker") and Purchaser hereby agrees to indemnify
Seller for any claim for brokerage commission or finder's fee asserted by a person, firm or
616824.4 13
AS OF THE DATE HEREOF. IN THE EVENT OF SUCH DEFAULT BY PURCHASER
UNDER THIS AGREEMENT, THE TITLE COMPANY SHALL RELEASE THE EARNEST
MONEY DEPOSIT TO SELLER, AND SELLER SHALL RETAIN SUCH AMOUNTS AS
LIQUIDATED DAMAGES IN LIEU OF ANY OTHER CLAIM SELLER MAY HAVE AT
LAW OR IN EQUITY (INCLUDING, WITHOUT LIMITATION, SPECIFIC
PERFORMANCE) ARISING BY REASON OF SUCH DEFAULT, EXCEPT AS
OTHERWISE PROVIDED IN THIS AGREEMENT WITH RESPECT TO CERTAIN
INDEMNITIES AND OTHER OBLIGATIONS THAT SURVIVE THE TERMINATION OF
THIS AGREEMENT. THE PARTIES HAVE INITIALED THIS SECTION 5.3 TO
ESTABLISH THEIR INTENT TO LIQUIDATE DAMAGES.
Seller:
Purchaser:
Section 5.4 Seller's Indemnification. Seller shall indemnify and hold
Purchaser harmless from and against all liability, losses, damages, costs and expenses (including
reasonable attorney's fees) (hereinafter "loss" or "losses") incurred or suffered by Purchaser as a
result of or in respect to (i) all suits, claims and other legal action taken or brought against
Purchaser with regard to the Property, arising from action taken by Seller or facts existing prior
to the Closing Date, specifically excluding any losses, damages, costs and expenses associated
with any required cleanup of the Property resulting from violation of any Environmental Laws to
the extent the same do not arise from a breach of a representation or warranty by Seller
hereunder; (ii) any and all other liabilities and obligations of Seller relating to the Property which
are not expressly assumed by Purchaser hereunder, whether presently known or unknown; and
(iii) the breach of any representation or warranty by Seller hereunder which representations and
warranties shall survive Closing for the period specified in this Agreement.
Section 5.5 Purchaser's Indemnification. Purchaser shall indemnify and hold
Seller harmless from and against all liability, losses, damages, costs and expenses (including
reasonable attorney's fees) (hereinafter "loss" or "losses") incurred or suffered by Seller as a
result or in respect to (i) all suits, claims and other legal action taken or brought against Seller
with regard to the Property, arising from actions taken by Purchaser after the Closing Date; (ii)
any and all liabilities and obligations of Seller relating to the Property which are expressly
assumed by Purchaser in writing; and (iii) the breach of any representation or warranty by
Purchaser hereunder which representations and warranties shall survive Closing for the period
specified in this Agreement.
Article 6. Brokeraa_e. Seller hereby represents and warrants to Purchaser that Seller
has not dealt with any broker or finder in respect to the transactions contemplated by this
Agreement and Seller hereby agrees to indemnify Purchaser for any claim for brokerage
commission or finder's fee asserted by a person, firm or corporation claiming to have been
engaged by Seller. Purchaser hereby represents and warrants to Seller that Purchaser has not
dealt with any broker or finder in respect to the transactions contemplated by this Agreement,
other than Judy Hobbs of Realty Quest ("Broker") and Purchaser hereby agrees to indemnify
Seller for any claim for brokerage commission or finder's fee asserted by a person, firm or
616824.4 13
corporation claiming to have been engaged by Purchaser. Purchaser shall compensate Broker
pursuant to the terms of a separate written agreement.
Article 7. Costs and Expenses. Except as expressly provided herein to the contrary,
Seller and Purchaser shall be solely responsible for their respective costs and expenses (including
legal expenses) incurred with respect to the negotiation and preparation of this Agreement and
the consummation of the transactions described herein. Seller shall pay the premium for a
standard coverage title insurance policy associated with the transfer of the Property from Seller
to Purchaser, and the recording fees for any release documents required to release any financing
Seller has maintained on the Property. Purchaser shall pay all recording fees associated with the
grant deed or other conveyance documents for the benefit of Purchaser, and the premiums for
any "extended coverage" title insurance and any endorsements required by Purchaser.
Article 8. Miscellaneous.
Section 8.1 Notices. All notices or other communications required or
permitted hereunder must be in writing and shall be sufficiently given (a) if delivered personally,
(b) when transmitted via confirmed telecopy to the telecopy number set forth below, (c) the day
following the day on which the same has been delivered prepaid to a national overnight courier
service addressed as set forth below, or (d) the third business day following the day on which the
same is sent by registered or certified mail, postage prepaid and return receipt requested,
addressed as set forth below:
(a) if to Purchaser:
The Phillips Edison Group LLC
Attn: Roy Williams
175 East 400 South, City Center 1
Suite 607
Salt Lake City, Utah 84111
Telephone: (801) 521-6970
Telecopier: (801) 521-6952
with a copy to:
Phillips Edison Ltd.
Attn: R. Mark Addy
11690 Grooms Road
Cincinnati, Ohio 45242
Telephone: (513) 554-1110, ext. 240
Telecopier: (513) 956-5656
With an additional copy to:
James P. Shipman
Parsons Behle & Latimer
201 South Main Street, Suite 1800
616874.4 14
Salt Lake City, Utah 84111
Telephone: (801) 536-6648
Telecopier: (801) 536-6111
(b) if to Seller:
Northwest Holdings, LLP
Attn: William Caron
465 W. 3925 N.
Peasant View, Utah 84414
Telephone: (801) 737-4850
Telecopier: (801) 737-4851
With a copy to:
Thel W. Casper
Holden, Kidwell, Hahn & Crapo, P.L.L.C.
PO Box 50130
Idaho Falls, Idaho 83405
1000 Riverwalk Drive, Suite 200
Idaho Falls, Idaho 83402
Telephone: (208) 523-0620
Telecopier: (208) 523-9518
or at such other addresses as Purchaser or Seller may specify in writing to the other parties from
time to time.
Section 8.2 Governing Law. This Agreement and all rights conferred and
obligations imposed hereunder shall be interpreted and construed in accordance with the laws
and internal judicial decisions of the State of Idaho
Section 8.3 Severability. If any provision of this Agreement shall be
determined invalid, illegal or unenforceable, the balance of this Agreement shall remain in full
force and effect and if any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances.
Section 8.4 Entire A egrr ement. This Agreement (including all Exhibits
attached hereto) embodies the entire agreement between the parties, supersedes all prior
agreements and understandings between such parties, if any, relating to the subject matter hereof.
This Agreement may be amended only by an instrument in writing executed jointly by an
authorized officer or representation of each party hereto. This Agreement may be executed in
any number of identical counterparts, each of which shall be deemed an original for all purposes
and all of which constitute, collectively, one agreement; but in making proof of this Agreement,
it shall not be necessary to produce or account for more than one such counterpart. The waiver
of any term or provisions of this Agreement shall not constitute a waiver of any other term or
provision of this Agreement, nor shall the right to require any enforcement of any term or
provision of this Agreement be permanently waived if a continuing breach of any such term or
61682 A 15
provision arises. The parties do not intend to confer any benefit hereunder on any person, firm
or corporation other than the parties hereto.
Section 8.5 Assignment. Purchaser may assign, transfer or convey its rights
and obligations under this Agreement or in the Property without the prior written consent of
Seller, provided the assignee agrees to assume the terms and conditions herein and is an entity
which is controlled by, owned by, or related to Purchaser, and provided further that Purchaser
shall remain liable for the performance of its obligations hereunder. Any permitted assignee
shall succeed to all the rights and obligations of Purchaser hereunder. Seller acknowledges that
it is the intention of Purchaser to create the Company for the purpose of acquiring the Property.
Section 8.6 Binding. The terms of this Agreement shall be binding upon, and
shall inure to the benefit of Seller, Purchaser, and their respective permitted successors and
assigns.
Section 8.7 Business Day. All references herein to "business day" shall mean
any day not a Saturday, Sunday or legal holiday on which banking institutions in the State of
Idaho are authorized or required by law to close. If the performance of any obligation or the
giving of any notice is required by the terms of this Agreement to be performed on a day which
is not a business day, the date for performance shall be extended to the next business day.
Section 8.8 Captions. The captions and headings in this Agreement are for
convenience only and shall not affect the interpretation or construction of this Agreement.
Section 8.9 Further Assurances. The parties each agree to do, execute,
acknowledge and deliver all such further acts, instruments and assurances and to take all such
further action before or after the Closing as shall be necessary or desirable to perform this
Agreement and consummate and effect the transactions contemplated hereby.
Agreement.
Section 8.10 Time of the Essence. TIME IS OF THE ESSENCE of this
Section 8.11 Interpretation.
(a) The terms "hereby," "hereof," "herein," "hereunder" and any
similar terms shall refer to this Agreement, and the term "hereafter" shall mean after, and the
term "heretofore" shall mean before, the date of this Agreement.
(b) Words of the masculine, feminine or neuter gender shall mean and
include the correlative words of other genders, and words importing the singular number shall
mean and include the plural number and vice -versa.
(c) Words importing persons shall include firms, associations,
partnerships (including limited partnerships), trusts, corporations and other legal entitles,
including public bodies, as well as natural persons.
(d) The terms "include," "including" and similar terms shall be
construed as if followed by the phrase "without being limited to."
616824.4 16
Section 8.12 Exhibits. The Exhibits attached to this Agreement are hereby
incorporated into this Agreement by reference.
Section 8.13 Non-AssumRtion. Except as specifically set forth herein or in any
of the closing documents, Purchaser assumes no liabilities of Seller.
Section 8.14 1031 ExchanWe. Either Purchaser or Seller may seek to effect a
tax -deferred exchange in connection with the Transaction ("Exchange"). Purchaser or Seller (as
applicable, the "Accommodating Party") agrees to reasonably cooperate with any Exchange at
no cost to the Accommodating Party; provided, however, that the Accommodating Party shall
not be required to take title to any other property or incur any liability or expense whatsoever in
rendering such cooperation; such Exchange shall not delay Closing; and the party effecting such
Exchange shall indemnify and hold the Accommodating Party harmless from and against any
liability or expense, including attorneys' fees and cost, in any way relating to such Exchange,
including but not limited to any liability or expense as a result of such Exchange being a taxable
event.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed under
seal, all on the day and year first above written.
int Name:
PURCHASER:
The Phillips Edison Group LLC
An O ' liability company
Bv:
Print Name: Roy D. Williams
Title: Authorized Representative
616824.4 i7
SELLER:
NORTHWEST HOLDINGS, LLP
An Idaho limited liability partnership
&.., h, A --
By: � Ise to -
Print Name: William Caron
Title: Partner
Bv:
Print Name: Carlos Larraz
Title: Partner
Bv:
Print Name: Jared Burt
Title: Partner
616824.4 18
SELLER:
NORTHWEST HOLDING'S, LLP
An Idaho limited liability PAP
By:
Print Name: illiam Caron
Title: Pwtqbri
By:
_ N
Print Name: Carlos Larraz
Title: Partner
Bv:
Print Name: Jared Burt
Title: Partner
616M.4 18
SELLER:
NORTHWEST HOLDINGS, LLP
An Idaho limited liability partnership
Bv:
Print Name: William Caron
Title: Partner
Bv:
Print Name: Carlos Larraz
Title: Partner
By:
P ' t N e: Jared Burt
Tit : P er
616824.4 18
Exhibit A
Legal Description of the Property
Commencing at the Northeast Corner of Lot 1, Block 37 of the Original Rexberg
Townsite, as per the recorded plat thereof, and running thence West 157 feet; thence South 155
feet; thence East 157 feet; thence North 155 feet to the place of beginning.
6168U.4 19
When Recorded Return To:
Parsons Behle & Latimer
201 South Main Street, Suite 1800
P.O. Box 45898
Salt Lake City, Utah 84145-0898
Attention: James P. Shipman
Please Mail Tax Notice To Grantee
At Its Address Below
Exhibit B
Deed
Space above for County Recorder's Use
GRANT DEED
Tax ID No.
Northwest Holdings, LLP, an Idaho limited liability partnership ("Grantor"), hereby
grants, conveys and warrants to The Phillips Edison Group LLC, an Ohio limited liability
company ("Grantee"), whose mailing address is 175 East 400 South, Salt Lake City, Utah
84111, for the sum of Ten Dollars and other good and valuable consideration, that certain real
property in the County of Madison, State of Idaho, more particularly described as follows:
SEE ATTACHED EXHIBIT "A"
The property described herein is conveyed subject to all real property taxes and
assessments, all existing patent reservations, easements, rights of way, protective covenants and
other matters of record, all applicable zoning ordinances, building codes, laws and regulations,
all encroachments, overlaps, boundary line disputes, claims of easements and other matters that
would be disclosed by an accurate survey or inspection of the property; the foregoing including
but not limited to the following matters:
SEE ATTACHED EXHIBIT "B"
Grantor has executed this Grant Deed as of , 2004.
61687AA 20
GRANTOR:
SELLER:
NORTHWEST HOLDINGS, UP
An Idaho limited liability partnership
By: Do Not. Sign — Exhibit Only
Print Name: William Caron
Title: Partner
By: Do Not Sign — Exhibit Only
Print Name: Carlos Larraz
Title: Partner
By: Do Not Sign — Exhibit Only
Print Name: Jared. Burt
Title: Partner
[insert notary blocks]
616824.4 21
STATE OF
: ss
EXHIBIT C
Owner's Affidavit
COUNTY OF }
Northwest Holdings, LLP, an Idaho limited liability partnership ("Seller"), being
first duly sworn, depose and say that:
1. Seller is the owner of that certain real property located in Madison
County, State of Idaho and more particularly described on Exhibit "A" attached hereto
and by this reference made a part hereof (hereinafter the "Property"). Seller has owned
the Property continually since
3. Seller's possession and enjoyment of the Property has been peaceable and
undisturbed and title to the Property has never been disputed or questioned, nor does
Seller know of any facts by reason of which the title to, or possession of, the Property
might be disputed or questioned, or by reason of which any claim to the Property might
be asserted adversely to Seller.
4. To the knowledge of Seller, no proceedings in bankruptcy have ever been
instituted by, or against Seller and Seller has never made an assignment for the benefit of
creditors.
5. Seller knows of no action or proceeding relating to the Property which is
now pending in any state or federal court in the United States nor does Seller know of
any state or federal judgment or any federal lien of any kind or nature whatever, which
now constitutes a lien or charge upon the Property.
6. With the exception of the leases described on Exhibit "B" attached hereto
any by this reference made a part hereof and the rights of the respective tenants under
those leases, there are no tenancies or leases affecting the Property or any part thereof and
there are no persons in possession of the Property or any part thereof.
7. There are no contracts for construction of improvements on, or making
repairs to, the Property, or any part thereof. There are no unpaid bills or claims for labor
or services performed or material furnished or delivered during the past twelve months
for alteration, repair, nor new construction of the Property.
DATED this day of , 2005
SELLER:
61687AA 22
NORTHWEST HOLDINGS, LLP,
an Idaho limited liability partnership
By: Do Not Sign — Exhibit Only
Print Name: William Caron
Title: Partner
By: Do Not Sip — Exhibit Only
Print Name: Carlos Larraz
Title: Partner
By: Do Not Sign — Exhibit Only
Print Name: Jared Burt
Title: Partner
[insert notary blocks]
616824.4 23
Exhibit D
See Attached Depiction of Property, Allen and Contract ProRertae5
616924.4 24
Y Wk.
t
rl -
Q
r ( t
NJI J[J/ LfJCiJ 10. 10 N141 1UNAL HK 11� 15 VAL*- Me
Signed on the respective dates set forth below, to be effective as of the Effective Date.
Stations West Developments LLC
By:
Its:
Date:
Northwest Holdings, UP
By:
William Caroni, Partner
Date: 3 O 4 .�
By:
Carlos Larraz, Partner
Date:
By. -
Jared Burt, Partner
Date:
M180d.7 19
uai Oui 4uuv cc: OP g1v0%ZZvOZ NMI IUN(4L RK I J.' I ti VAUL bl
Signed on the respective dates set forth below, to be effective as of the )Ef'cctive Date.
Stations West Developments LLC
ay:
Its:
Date:
Northwest Holdings, UP
By:
W miam Caron, Paitm
Date:
By.
Carlos Larraz, P7
i
Date: a�
By. -
Jared Burt, Pafter
Date:
WIM.7 19
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Signed on the respective dates sot forth below, to be effective as of the Effective Date.
Stations West Developments LLC
By;
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Date:
Northwest Holdings, LLP
By,
William Carol, Partner
Date:
By:
Carlos Larraz, Partner
Date:
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Signed on the respective dates set forth below, to be effective as of the Effective Date.
Stations West Developments LLC
By:
Its:
Date:
Northwest Holdings, UP
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William Caron, Partner
Date: 3 0 0 _
By:
Carlos Larraz, Partner
Date:
By. -
Jared Burl, Pm=r
Date:
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Signed on the respective dates set forth below, to be effective as of the Effcctive Date.
Stations Vest Developments LLC
Bar.
Its:
Date:
Northwest Holdings, I LP
By.
William Caron, Partner
Date:
By
Carlos I.arraz, P7
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Date: aS
By:
Jared But, Pafter
Date;
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Signed on the respective dates sot forth below, to be effective as of the Effective Date.
Stations West Developments LLC
By;
Its;
Date.
Northwest HoWns, LLP
By,
William Caron, Partner
Date:
By:
Carlos Larraz, Partner
Date:
661804.1 19
r
Exhibit A - Real Estate Description
Exhibit A-1 — Real Estate Depiction
Exhibit B - Deed
Exhibit C - owner's Affidavit
PURCHASE AND SALE AGREEMENT
This PURCHASE AND SALE AGREEMENT ("Agreement"), dated as of January 5,
2005, is made by and between The Phillips Edison Group, LLC an Ohio limited liability
company ("Purchaser"), and Neibaur Properties, L.L.C. an Idaho limited liability company
("Seller").
A. Seller owns certain real property located in Rexburg, Idaho.
B. Seller has agreed to sell to Purchaser and Purchaser has agreed to purchase from
Seller such real property as defined in Section 1.1(f) below on the terms and conditions
contained herein.
NOW, THEREFORE, the parties agree as follows:
Article I. Definitions; Sale.
Section 1.1 Defined Terms. For the purposes hereof, the following terms shall
have the meanings set forth below:
(a) "Closing" shall mean the sale of the Property by Seller pursuant to
the terms hereof to Purchaser on the Closing Date and the payment by Purchaser of the Purchase
Price to Seller on the Closing Date.
(b) "Closing Date" shall mean that date mutually agreed to by the
parties, which shall not be more than sixty (60) days after the expiration of the Due Diligence
Period. TIME SHALL BE OF THE ESSENCE.
(c) "Due Diligence Period" is defined in Section 1.3.
(d) "Earnest Money Deposit" which shall be the sum of Three
Thousand Dollars ($3,000);
(e) "Financing Period" (Intentionally Omitted).
(f) "Land" shall mean that certain land owned, by Seller and described
in Exhibit A and depicted on Exhibit A-1 attached hereto; all easements, if any, benefiting the
Land; and all rights and appurtenances pertaining to the Land, including any right, title and
interest of Seller in and to rights of way; all
620014.2 1
tenements, hereditaments, buildings, appurtenances, rights, privileges, licenses, leases,
easements, and rights -of -way incident thereto.
(g) "Property" shall mean the Land.
h "Purchase Pri e" shall mean the sum o
plus or minus the prorations in accordance with
Section 2.4. Seller acknowledges that Purchaser is acquiring the Property as part of a larger
assemblage of property required for Purchaser's intended development. An integral portion of
such property is an alley (the "Alley") which is currently owned by the City of Rexburg. Seller
further acknowledges that if Purchaser is successful in getting the City of Rexburg to vacate or
abandon the Alley, a portion of the same shall become a part of the Property and shall be
conveyed to Purchaser at Closing; however, there shall be no increase in the Purchase Price, as
set forth below, as a result of the addition of the property included in the Alley.
Section 1.2 Purchase and Sale. Subject to the terms and conditions of this
Agreement, Seller hereby agrees to sell and convey to Purchaser, and Purchaser hereby agrees to
purchase from Seller, the Property.
Section 1.3 Inspection. Purchaser shall have from the date of execution of this
Agreement until May 23, 2005 ("Due Diligence Period") to inspect the Property, including but
not limited to performing environmental studies, soil borings, zoning confirmation, studies on
the feasibility of expansion, studies as to feasibility of the Property for its intended purpose,
utility availability and adequacy, title and title related issues and any other matters Purchaser
deems appropriate to its decision whether to proceed with the purchase of the Property. Seller
shall cooperate fully with Purchaser during the Due Diligence Period, and shall, on or before
January 14, 2005 (the "Initial Production Date"), provide Purchaser with copies of any
information in Seller's possession that relate to the Property, including but not limited to copies
of the following (the "Documents"):
(a) all reports, studies, audits, licenses, permits, correspondence,
documents or other materials relating to the past or present, actual or threatened discharge from,
off -site release of, treatment, storage or disposal of, or existence on the Property, or adjacent
property, of a "Hazardous Substance," as hereinafter defined;
(b) all federal, state or local government reports, orders, audits,
inspections, or correspondence pertaining to the physical condition of the Property, the presence
or location of Hazardous Substances thereon, or compliance of Seller or Property with applicable
building, health, safety, or environmental laws, codes, rules or regulations, including, without
limitation any written notices of violation, performed or required investigations, approved
remediation plans and/or approved remediation activities;
(c) copies of all drawings, plans, permits, applications, maps,
preliminary or other plats, approvals, surveys, leases, contracts, architect's work product,
consultant material and similar documents pertaining to the Property;
(d) copies of any covenants, ordinances, conditions and restrictions
affecting the Property;
620014.2 2
(e) copies of any soils, water and engineering reports pertaining to the
Property;
(f) copies of any written notices, reports, citations, correspondence, or
memoranda received by Seller from any governmental agency (federal, state, county or
municipal) concerning the Property (including, but not limited to, copits V any governmenfal
zoning letters);
(g) copies of all agreements, studies, reports, correspondence and
other documents relating to the presence or absence of any endangered species or
environmentally sensitive areas (including without limitation any areas that were wetlands or that
have been or potentially could be designated wetlands or waters of the United States) on the
Property;
(h) copies of all other contracts, documents, agreements, plans,
specifications, drawings, records and information pertaining to or affecting the Property that are
in Seller's possession or under Seller's control.
Seller agrees to furnish immediately to Buyer any Documents described above and
coming into Seller's possession or produced by Seller after the Initial Production Date and to
continue to provide the same during the pendency of this Agreement. To the extent any of the
foregoing, or the Title Commitment and copies of exceptions thereto, are delivered after the
Initial Production Date, the Due Diligence Period shall be extended one day for every day of
delay in delivering the required documents.
.Seller shall provide Purchaser with reasonable access to the Property for inspection
purposes.
Section 1.4 Title Examination and Survey. On or before the Initial Production
Date„ Seller shall, at Seller's expense, deliver or cause to be delivered to Purchaser: (i) a title
commitment ("Title Commitment") issued by First American Title Insurance Company, Rexburg,
Idaho (the "Title Company") covering the Property, obligating the Title Company to issue an
ALTA Owner's Policy (10-17-92) of Title Insurance at the Closing in the full amount of the
Purchase Price; and (ii) true, correct, and legible copies of any and all instruments referred to in
Schedule B-2 of the Title Commitment. The Title Commitment shall affirmatively provide for the
deletion, at Seller's sole expense, of all standard printed exceptions of Schedule B-2 thereof, with
the exception of the survey exceptions, in the event Purchaser chooses not to obtain the Survey, as
provided for below. In addition, Seller shall provide Purchaser with copies of any covenants,
conditions, restrictions, contracts, leases and easements affecting the Property, of which Seller has
knowledge, which are not included in the Title Commitment ("Additional Encumbrances").
On or before the Initial Production Date, Seller shall provide Purchaser with copies of any
existing surveys of the Property in Seller's possession or control. Purchaser may, at Purchaser's
expense, cause to be prepared a current on -the -ground survey (the "Survey") of the Property made
by a duly -licensed surveyor reasonably acceptable to the Purchaser. At Purchaser's option, the
Survey shall be in a form acceptable to the Title Company in order to allow the Title Company to
delete the survey exception from the title policy to be issued by the Title Company (the "Title
620014.2 3
Policy"). To the extent an updated survey reflects a legal description for the Property different from
the one attached hereto as Exhibit A, then the legal description included in such survey shall control.
Purchaser shall have ninety (90) days after the receipt of the Title Commitment and any
Additional Encumbrances to review them and to deliver in writing to Seller such objections as .
Purchaser may have to anything contained therein ("Title Defects"). Any such item to which
Purchaser does not object shall be deemed a "Permitted Exception." If there are objections by
Purchaser, Seller shall have fifteen (15) days from the date of any such objections in which to
correct or remove, at Seller's cost, such objected to items. If, Seller fails to correct or remove
such objected to items, to Purchaser's satisfaction within said fifteen (15) day period, or if, for
any reason, Seller is unable to convey title in accordance with the provisions set forth below,
Purchaser may, at its option, either waive such Title Defects and accept such title to the Property
as Seller can convey, terminate this Agreement, seek specific performance of this Agreement or
otherwise seek to enforce its rights under this Agreement. If Purchaser waives any Title Defects
then appropriate exception shall be taken therefor in Seller's Deed and such matters shall be
deemed Permitted Exceptions.
Section 1.5 Pre -Closing Rights and Obligations. Purchaser and its agents shall
be permitted to enter onto the Property at any time and from time to time prior to Closing. Any .
entry upon and on the Property is at the Purchaser's sole risk, and Purchaser's agents, servants
and employees; that the Purchaser shall indemnify and hold harmless the Sellers from any and all
claims, losses, expenses, including reasonable attorney's fees and expenses on account of
Purchaser's entry onto the Property. Purchaser shall be obligated to repair, replace or restore the
Property to substantially the same condition as it existed prior to said testing and inspections if
said damage was caused by or as a result of actions by Purchaser or its agents. Purchaser shall
provide proof of liability insurance and shall require any of its agents performing testing or
inspections on the Property to have Iiability insurance.
Section 1.6 Earnest Money. Within five (5) business days of the execution of
this Agreement, Purchaser shall deposit the Earnest Money Deposit with the Title Company, to
be applied in accordance with this Agreement. The Title Company shall deposit all Earnest
Money Deposit received hereunder in a federally insured, interest -bearing account for the benefit
of Purchaser and Seller. All interest which accrues on the Earnest Money Deposit will be taxed
to Purchaser. All interest accruing thereon shall be a part thereof and shall be credited at Closing
or returned to Purchaser as described herein.
Article 2. Closing.
Section 2.1 Time and Place. The transaction contemplated hereby shall close
at such time and place as the parties may mutually agree provided said Closing shall occur on or
before the Closing Date.
Section 2.2 Conditions Precedent to Obligations of Seller. The obligation of
Seller to sell and convey to Purchaser on the Closing Date Seller's interest in the Property is
subject to the fulfillment of the following conditions to the reasonable satisfaction of Seller prior
to or as of the Closing Date:
620014.2 4
s
(a) the representations and warranties of Purchaser set forth in Section
4 shall be true and correct in all material respects on and as of the Closing Date.
(b) Purchaser shall have paid to Seller, in cash, or by cashier's or
certified check or wire transfer of immediately available Federal funds, the method of payment
to be at Seller's election, the Purchase Price.
(c) Purchaser shall have delivered to Seller the following on or prior to
the Closing Date the following:
(i) Incumbency Certificate of Purchaser. An incumbency
certificate executed by an appropriate authority on behalf of Purchaser
dated as of the Closing Date certifying the names and true signatures of
the officers of Purchaser authorized on behalf of Purchaser to sign this
Agreement, and the other documents required to be executed by Purchaser
at Closing in connection with the transactions contemplated hereby.
(ii) Resolutions of Purchaser. A copy of Purchaser's
resolutions authorizing Purchaser to enter into this Agreement and the
other- closing documents and to perform its obligations hereunder and
thereunder, certified by an officer of Purchaser.
(iii) Certificate of Good Standing. An original Certificate of
good standing or its equivalent for Purchaser issued by the State of Ohio,
dated within thirty (30) days of the Closing Date.
Section 2.3 Conditions Precedent to Obligations of Purchaser. The obligation
of Purchaser to purchase the Property on the Closing Date is subject to the fulfillment of the
following conditions to Purchaser's reasonable satisfaction prior to or as of the Closing Date:
(a) the representations and warranties of Seller set forth in Article 3
shall be true and correct in all material respects on and as of the Closing Date.
(b) Purchaser shall be satisfied, in its sole judgment and discretion,
with its findings concerning the Property during the Due Diligence Period and shall have elected
in writing not to terminate this Agreement during the Due Diligence Period.
(c) Seller's actions to facilitate the Closing are not subject to a
referendum or published threat thereof.
(d) Seller shall have delivered the following documents to Purchaser
on or prior to the Closing Date:
(i) Deed. A general warranty deed executed by Seller
conveying good record, marketable fee simple title to the Land to
Purchaser, in the form attached to this Agreement as Exhibit B, free, clear
and unencumbered except for the Permitted Exceptions.
620014.2
G
(ii) Foreign Person. An affidavit of Seller certifying that Seller
is not a "foreign person," as defined in the Federal Foreign Investments in
Real Property Tax Act of 1980, and the 1984 Tax Reform Act, as
amended.
(iii) Owner's Affidavit. An executed affidavit in the form of
Exhibit C attached hereto or in such other reasonable form as may be
reasonably acceptable to the title insurance company issuing the owner's
policies relating to the Property which affidavit shall provide inter alia, the
basis for the deletion of title insurance as to mechanic's lien coverage.
(e) Evidence that Seller is properly authorized and has approved the
execution of this Agreement and the sale and conveyance of the Property.
Section 2.4 Prorations.
(a) Taxes and Assessments. All non -delinquent real estate taxes and
assessments on the Property shall be prorated based on the actual current tax bill, but if the
Closing shall occur before the tax rate or the assessed valuation of all or any portion of the
Property is fixed for the then current tax year, the proration of taxes for such portion of the
Property shall be based upon the tax rate for the preceding year applied to the latest known
assessed valuation.
(b) Method of Proration. All prorations under this Section 2.4 shall be
prorated on the day of Closing on the basis of the most recent ascertainable amounts or other
reliable information in respect to each item. Such adjustments shall be paid by Purchaser to
Seller (if the prorations result in a net credit to Seller) by increasing the Purchase Price
accordingly. Such adjustments shall be paid by Seller to Purchaser (if the prorations result in a
net credit to Purchaser), by reducing the Purchase Price accordingly. All other costs and
expenses not specifically addressed in this Section 2.4 shall be allocated between Purchaser and
Seller in accordance with the customary practice of Madison County, Idaho.
Section 2.5 Condemnation. In the event of a taking by condemnation or
similar proceedings or actions of any portion of the Property, which is not material to the use of
the remainder, Seller shall assign or pay to Purchaser at Closing Seller's interest in and to any
condemnation awards or proceeds from any such proceedings or actions in lieu thereof and
Purchaser shall pay the full amount of the Purchase Price hereunder to Seller. In the event of a
taking by condemnation or similar proceedings or actions of all of the Land or any portion of the
Land which is material to the use of the remainder, at Purchaser's option, Purchaser may
terminate this Agreement or proceed to Closing. If Purchaser elects to proceed to Closing, Seller
shall assign or pay to Purchaser at Closing Seller's interest in and to any and all condemnation
awards or proceeds from any such proceedings.or actions in lieu thereof and Purchaser shall pay
the full amount of the Purchase Price hereunder to Seller.
Section 2.6 Closing and Post -Closing Deliveries. Purchaser and Seller shall .
also deliver at Closing an agreed upon Closing Statement, any required transfer declarations or
other tax returns required for the transfer of the Property, and such other documentation as is
620014.2 6
customarily delivered on a mutual basis in the closing of property similar to the Property in
Madison County, Idaho. After the Closing, Purchaser and Seller shall do such things as may be
reasonably requested by the other in order to more effectively consummate or document the
transactions contemplated by this Agreement, including the execution and delivery of any
additional documents consistent with the terms of this Agreement.
Article 3. Representations and Warranties of Seller.
Section 3.1 Seller Representation. Seller hereby represents and warrants to
Purchaser, its successors and assigns, that:
(a) Seiler has all requisite power and authority to own the Property, to
execute, deliver and perform this Agreement and to consummate the transactions contemplated
hereby.
(b) this Agreement has been duly authorized, executed and delivered
by Seller and constitutes the legal, valid and binding agreement of Seiler, enforceable against
Seller in accordance with its terms, except as such terms may be limited by (i) bankruptcy,
insolvency, moratorium or other similar laws affecting the rights of creditors generally, and (ii)
general principles of equity (regardless of whether enforceability is considered in a proceeding in
equity or at law).
(c) neither the execution, delivery and performance of this Agreement
nor the consummation of the transactions contemplated hereby (i) is prohibited by or violates any
law, statute, rule, regulation, judgment, order, writ, injunction or decree which is binding upon
Seller or any of its properties or assets, (ii) will violate any agreement or instrument to which
Seller is a party or by which Seller is bound, or (iii) will require the consent, approval, authority
or order of any party or any court, governmental agency or both that has not been obtained in
writing.
(d) Seller has no actual knowledge of any pending or threatened
condemnation proceeding against all or any portion of the Property, and Seller has received no
written notice of any pending or threatened litigation initiated against all or any portion of the .
Property or against Seller with respect to the Property.
(e) There is no action, suit, proceeding or investigation pending or
threatened before any agency, court of governmental authority which relates to Seller or the
Property. Seller is not contemplating the institution of insolvency proceedings.
(f) Other than the Lease, as hereinafter defined, there are no contracts
relating to the Property which are not terminable with thirty (30) days prior written notice.
(g) Seller is not a foreign person as defined in Section 1445 of the
Internal Revenue Code, as amended.
(h) Other than the Tenant, as hereinafter defined, there are no parties
in possession of the Property, and no party has been granted any licenses, lease or other right
relating to the use or possession of the Property.
620014.2 7
(i) There are no unpaid -for improvements in, to or about the Property
which might form the basis of a mechanic's lien against the Property.
(j) There are no off -record or undisclosed legal or equitable interests
in the Property owned or claimed by any person, firm, corporation or other entity other than
Seller.
(k) Seller has not received written notice from any governmental or
quasi -governmental agency requiring the correction of any condition with respect to the
Property.
(1) Neither Seller nor, to the best of Seller's knowledge, any previous
owner of the Property or any other person or entity has ever used, generated, processed, stored,
disposed of, released, or discharged any Hazardous Substance on, under, about or in the vicinity
of the Property or transported it to or from the Property, nor, to the Seller's knowledge, has any
party ever alleged that any such activities have occurred; and no use by Seller, nor to the best of
Seller's knowledge, any prior owner of the Property, or any other person has occurred which
violates or has been alleged by any party to violate any applicable Environmental Law, and the
Property is not on any "Superfund" list under any applicable Environmental Law, nor is it subject
to any lien related to any environmental matter. As used in this Contract, "Hazardous Substance"
shall mean and include all hazardous or toxic substances, wastes or materials, any pollutants or
contaminates (including, without limitation, asbestos and raw materials which include hazardous
constituents, radon and urea formaldehyde), and any other similar substances, or materials which
are included or regulated by any local, state, or Federal law, rule or regulation pertaining to
environmental regulation, contamination, clean up or disclosure, including, without limitation,
the Comprehensive Environmental Response Compensation and Liability Act of 1980, the
Superfund Amendments and Reauthorization Act of 1986, the Resource Conservation and
Recovery Act, the Toxic Substances Control Act, and the Federal Insecticide, Fungicide and
Rodenticide Act, as amended, (collectively, "Environmental Laws").
Notwithstanding anything to the contrary contained herein, the representations and
warranties set forth in (a) through (1) above shall be deemed remade as to the Property as of the
Closing, and such representations and warranties shall survive Closing and shall not be merged
therein.
Article 4. Representations and Warranties of the Purchaser. Purchaser hereby
represents and warrants to Seller that:
(a) Purchaser (i) is a limited liability company duly organized and
validly existing under the laws of Ohio, and (ii) has all requisite power and authority to conduct
its business and to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby.
(b) the signatory hereto for Purchaser has the requisite power and
authority to execute and deliver this Agreement on behalf of Purchaser and, by virtue of such
execution and delivery, this Agreement has been duly authorized, executed and delivered by
Purchaser and constitutes the legal, valid and binding agreement of Purchaser, enforceable
620014.2 8
against Purchaser in accordance with its terms, except as such terms may be limited by (i)
bankruptcy, insolvency, moratorium or other similar laws affecting the rights of creditors
generally, and (ii) general principles or equity (regardless of whether enforceability is considered
in a proceeding in equity or at law).
(c) neither the execution, delivery and performance of this Agreement
nor the consummation of the transactions contemplated hereby (i) is prohibited by or violates any
law, statue, rule or regulation, judgment, order, writ, injunction or decree which is binding upon
Purchaser or any of its properties or assets, (ii) will violate any provision of the articles of
organization, operating agreement or resolutions of Purchaser, (iii) will violate any mortgage,
indenture, agreement, instrument or other contract to which Purchaser is a party, or by which
Purchaser is bound, or (iv) will require the consent, approval, authority or order of any party or
of any court, governmental agency or both that has not been obtained in writing.
Notwithstanding anything to the contrary contained herein, the representations and
warranties set forth in (a) through (c) above shall be deemed remade as to the Property as of the
Closing, and such representations and warranties shall survive Closing and shall not be merged
therein.
Article 5. Lease Termination. Purchaser acknowledges that Seller has disclosed the
existence of a lease (the "Lease") encumbering the Property in favor of the State of Idaho
("Tenant"). Seller covenants and agrees to exercise its best efforts to relocate Tenant to other
property, and to terminate the Lease, on or before Closing. In the event Seller is unable to
relocate Tenant and terminate the Lease on or before Closing, Seller shall assign the Lease to
Purchaser at Closing; however, Seller shall retain the right, for a period of ninety (90) days
following Closing to negotiate with tenant to relocate Tenant and, in the event seller is able to .
relocate Tenant during such ninety (90) day period, Purchaser shall execute such documentation
as is necessary to terminate the Lease effective as of the date of such relocation.
Article 6. Termination; Default; Indemnification.
Section 6.1 Termination by Purchaser. Prior to fulfilling all conditions
precedent to this Agreement, Purchaser, at its option, may terminate this Agreement upon written
notice to Seller for the following reasons:
(a) During the Due Diligence Period, if Purchaser is not satisfied, in
its sole discretion, with the condition of the Property or with the results of any findings, tests or
inspections concerning the Property.
(b) If any conditions precedent set forth in Section 2.3 shall not have
been complied with or performed in any material respect on or the dates set forth in such Section
2.3.
In the event of termination for any of the reasons described above, the Earnest Money Deposit
shall be promptly returned to the Purchaser.
Section 6.2 Default by Seller. In the event Closing and the consummation of
the transaction herein contemplated do not occur by reason of any default by Seller, Purchaser
620014.2 9
may seek to have this Agreement specifically performed, and Seller shall reimburse Purchaser
for its costs and expenses, including reasonable attorneys fees, incurred in such a proceeding
provided Purchaser prevails in such an action. If specific performance is impractical, or
Purchaser does not desire to pursue specific performance, Purchaser may pursue any other action
available at law or equity. If the Seller is successful in any such action, Purchaser shall
reimburse Seller for its costs and expenses including reasonable attorney's fees incurred in such
a proceeding.
Section 6.3 Default by Purchaser. Upon default by Purchaser of its obligation
to acquire the Property in accordance with this Agreement, this Agreement shall be terminated
and neither party shall have any further rights or obligations hereunder, each to the other except
as otherwise provided in this Agreement and except for the right of Seller to collect as its sole
and exclusive remedy, the Earnest Money Deposit.
THE PARTIES ACKNOWLEDGE THAT IN THE EVENT OF ANY MATERIAL
DEFAULT BY PURCHASER UNDER THIS AGREEMENT, SELLER'S DAMAGES
WOULD BE DIFFICULT OR IMPOSSIBLE TO COMPUTE AND THAT THE EARNEST
MONEY DEPOSIT MADE BY PURCHASER UNDER SECTION 1.1(d) REPRESENTS THE
REASONABLE ESTIMATE OF SUCH DAMAGES ESTABLISHED BY THE PARTIES
THROUGH GOOD FAITH CONSIDERATION OF THE FACTS AND CIRCUMSTANCES
SURROUNDING THE TRANSACTION CONTEMPLATED UNDER THIS AGREEMENT
AS OF THE DATE HEREOF. IN THE EVENT OF SUCH DEFAULT BY PURCHASER
UNDER THIS AGREEMENT, SELLER SHALL RETAIN SUCH AMOUNTS AS
LIQUIDATED DAMAGES IN LIEU OF ANY OTHER CLAIM SELLER MAY HAVE AT
LAW OR IN EQUITY (INCLUDING, WITHOUT LIMITATION, SPECIFIC
PERFORMANCE) ARISING BY REASON OF SUCH DEFAULT. THE PARTIES HAVE
INITIALED THIS SECTION 6.3 TO ESTABLISH THEIR INTENT TO LIQUIDATE
DAMAGES.
Seller:
r
Purchaser:
Section 6.4 Seller's Indemnification. Seller- shall indemnify and hold
Purchaser harmless from and against all liability, losses, damages, costs and expenses (including
reasonable attorney's fees) (hereinafter "loss" or "losses") incurred or suffered by Purchaser as a
result or in respect to (i) all suits, claims and other legal action taken or brought against Seller
with regard to the Property, arising from action taken or facts existing prior to the Closing Date;
and (ii) any and all liabilities and obligations of Seller relating to the Property which are not
expressly assumed by Purchaser hereunder, whether presently known or unknown; and (iii) the
breach of any representation or warranty by Seller hereunder which representations and
warranties shall survive Closing and not merge with the Special Warranty Deed for the Property.
Section 6.5 Purchaser's Indemnification. Purchaser shall indemnify and hold
Seller harmless from and against all liability, losses, damages, costs and expenses (including
reasonable attorney's fees) (hereinafter "loss" or "Iosses") incurred or suffered by Seller- as a
result or in respect to (i) all suits, claims and other legal action taken or brought against Seller
620014.2 10
with regard to the Property, arising from actions taken by Purchaser after the Closing Date; (ii)
any and all liabilities and obligations of Seller relating to the Property which are expressly
assumed by Purchaser in writing; and (iii) the breach of any representation or warranty by
Purchaser hereunder which representations and warranties shall survive Closing and not merge
with the Special Warranty Deed for the Property.
Section 6.6 Cross Default. Purchaser and Seller acknowledge that,
concurrently with the execution of this Agreement, they have executed two separate purchase
and sale agreements of even date herewith (the "Other Contracts") pertaining to certain other
properties owned by Purchaser and depicted on Exhibit A-1 attached hereto. The parties agree
that a default under either of the Other Contracts shall constitute a default under the Agreement.
Article 7. Brokerage. Seller hereby represents and warrants to Purchaser that Seller
has not dealt with any broker or finder in respect to the transactions contemplated by this
Agreement, and Seller hereby agrees to indemnify Purchaser for any claim for brokerage
commission or finder's fee asserted by a person, firm or corporation claiming to have been
engaged by Seller. Purchaser hereby represents and warrants to Seller that Purchaser has not
dealt with any broker or finder in respect to the transactions contemplated by this Agreement,
except Judy Hobbs of Realty Quest ("Broker"), and Purchaser hereby agrees to indemnify Seller
for any claim for brokerage commission or finder's fee asserted by a person, firm or corporation
claiming to have been engaged by Purchaser. Purchaser shall pay a commission to Broker
pursuant to the terms and provisions of a separate written agreement.
Article 8. Costs and Expenses. Except as expressly provided herein to the contrary,
Seller and Purchaser shall be solely responsible for their respective costs and expenses (including
legal expenses) incurred with respect to the negotiation and preparation of this Agreement and
the consummation of the transactions described herein. Seller shall pay any and all transfer and
conveyance fee taxes payable to any governmental authority with respect to the sale of the
Property to Purchaser. Purchaser shall pay when due all recordation taxes, and the costs of all
title insurance policies associated with the transfer of the Property from Seller to Purchaser. The
parties agree that if feasible and if such structure will not require additional cost or liability
exposure, to attempt to structure the transaction proposed hereunder- in a manner to minimize the
impact of transfer, recordation and other taxes.
Article 9. Miscellaneous.
Section 9.1 Notices. All notices or other communications required or
permitted hereunder must be in writing and shall be sufficiently given (a) if delivered personally,
(b) when transmitted via telecopy to the telecopy number set forth below, (c) the day following
the day on which the same has been delivered prepaid to a national overnight courier- service
addressed as set forth below, or (d) the third business day following the day on which the same is
sent by registered or certified mail, postage prepaid, addressed as set forth below:
620014.2 11
(a) if to Purchaser:
The Phillips Edison Group, LLC
c/o Roy Williams
175 East 400 South, Suite 402
Salt Lake City, UT 84111
with a copy to:
James P. Shipman
Parsons Behle & Latimer
201 South Main Street, Suite 1800
Salt Lake City, UT 84111
(b) if to Seller:
Mitchel C. Neibaur
Chase Manhattan Mortgage Corporation
5926 Fashion Pointe Drive
South Ogden, UT 84403
or at such other addresses as Purchaser or Seller may specify in writing to the other parties from
time to time.
Section 9.2 Governing Law. This Agreement and all rights conferred and
obligations imposed hereunder shall be interpreted and construed in accordance with the laws
and internal judicial decisions of the State of Idaho.
Section 9.3 Severability. If any provision of this Agreement shall be
determined invalid, illegal or unenforceable, the balance of this Agreement shall remain in full
force and effect, and if any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances.
Section 9.4 Entire Agreement. This Agreement (including all Exhibits
attached hereto) embodies the entire agreement between the parties and supersedes all prior
agreements and understandings between such parties, if any, relating to the subject matter hereof.
This Agreement may be amended only by an instrument in writing executed jointly by an
authorized officer or representation of each party hereto. This Agreement may be executed in
any number of identical counterparts, each of which shall be deemed an original for all purposes
and all of which constitute, collectively, one agreement; but in making proof of this Agreement,
it shall not be necessary to produce or account for more than one such counterpart. The waiver
of any term or provisions of this Agreement shall not constitute a waiver of any other term or
provision of this Agreement, nor shall the right to require enforcement of any term or provision
of this Agreement be permanently waived if a continuing breach of any such term or provision
arises. The parties do not intend to confer any benefit hereunder on any person, firm or
corporation other than the parties hereto.
620014.2 12
Section 9.5 Assignment. ment. Purchaser may assign, transfer or convey its rights
and obligations under this Agreement or in the Property without the prior written consent of
Seller, provided the assignee agrees to assume the terms and conditions herein and is an entity
which is controlled by, owned by, or related to Purchaser. Any permitted assignee shall succeed
to all the rights and obligations of Purchaser hereunder.
Section 9.6 Binding. The terms of this Agreement shall be binding upon, and
shall inure to the benefit of Seller, Purchaser, and their respective permitted successors and
assigns.
Section 9.7 Business Day. All references herein to "business day" shall mean
any day not a Saturday, Sunday or legal holiday on which banking institutions in the State of .
Utah are authorized or required by law to close. If the performance of any obligation or the
giving of any notice is required by the terms of this Agreement to be performed on a day which
is not a business day, the date for performance shall be extended to the next business day.
Section 9.8 Captions. The captions and headings in this Agreement are for
convenience only and shall not affect the interpretation or construction of this Agreement.
Section 9.9 Further Assurances. The parties each agree to do, execute, .
acknowledge and deliver all such further acts, instruments and assurances and to take all such
further action before or after the Closing as shall be necessary or desirable to perform this
Agreement and consummate and effect the transactions contemplated hereby.
Section 9.10 Time of the Essence. TIME IS OF THE ESSENCE of this
Agreement.
Section 9.11 Interpretation.
(a) The terms "hereby," "hereof," "herein," "hereunder" and any
similar terms shall refer to this Agreement, and the term "hereafter" shall mean after, and the
term "heretofore" shall mean before, the date of this Agreement.
(b) Words of the masculine, feminine or neuter gender shall mean and
include the correlative words of other genders, and words importing the singular number shall
mean and include the plural number and vice -versa.
(c) Words importing persons shall include firms, associations,
partnerships (including limited partnerships), trusts, corporations and other legal entitles,
including public bodies, as well as natural persons.
(d) The terms "include," "including" and similar terms shall be
construed as if followed by the phrase "without being limited to."
Section 9.12 Exhibits. The Exhibits attached to this Agreement are hereby
incorporated into this Agreement by reference.
620014.2 13
Section 9.13 Non -Assumption. Except as specifically set forth herein or in any
of the closing documents, Purchaser assumes no liabilities of Seller.
Section 9.14 Like Kind Exchange. The parties acknowledge that either may sell
or purchase the Property in connection with the completion of a like -kind exchange pursuant to
1031 of the Internal Revenue Code. The Parties agrees to fully cooperate with one another in the
completion of an exchange, including consenting to the assignment of the other's interest in this
Agreement to a "qualified intermediary", provided the party not involved in the exchange does
not incur any type of out -of —pocket expense as a result of such cooperation or any additional
liability.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed the
day and year first above written.
PURCHASER:
The Phillips Edison Group, LLC
an Ohio limited liability company
r
By:C.t.�
Print Name: o ? lltd-i"
Title:2ia� �� n
SELLER:
Neibaur Properties, L.L.C.
an Idaho limite li ilit YJ
By.
Print'Name: l•' Q�l 0�1�,Y'
Its: Alt 4
620014.2 14
Exhibit A
Legal Description of the Property
(To be attached following completion of survey.) .
620014.2 A-1
_ . w
o
Exhibit A-1
Depiction of Property
(See attached)
620014.2
Exhibit B
Deed
When Recorded Return To:
Parsons Behle & Latimer
201 South Main Street, Suite 1800
P.O. Box 45898
Salt Lake City, Utah 84145-0898
Attention: James P. Shipman
Please Mail Tax Notice To Grantee
At Its Address Below
Space above for County Recorder's Use
Tax ID No.
GENERAL WARRANTY DEED
, a ("Grantor")
hereby conveys and warrants to The Phillips Edison Group LLC, an Ohio limited liability
company ("Grantee"), of 175 East 400 South, Suite 402 Salt Lake City, Utah 84111, for the
sum of Ten Dollars, that certain real property in the County of Salt Lake, State of Utah, more
particularly described as follows:
SEE ATTACHED EXHIBIT "A."
Grantor has executed this General Warranty Deed as of , 2004.
GRANTOR:
SELLER:
a
DO NOT SIGN — EXHIBIT ONLY
By:
Print Name:
Title:
620014.2
In
s
STATE OF )
ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this
2004, by
My Commission Expires:
day of ,
NOTARY PUBLIC
Residing at:
620014.2
a
STATE OF UTAH }
:ss
COUNTY OF SALT LAKE )
a
that:
EXHIBIT C
Owner's Affidavit
, as
, of
being first duly sworn, depose and say
1. ("Seller") is the owner
of that certain real property located in County, State of
and more particularly described on Exhibit "A" attached hereto and by
this reference made a part hereof (hereinafter the "Property"). Seller has owned the
Property continually since
3. Seller's possession and enjoyment of the Property has been peaceable and
undisturbed and title to the Property has never been disputed or questioned, nor does
Seller know of any facts by reason of which the title to, or possession of, the Property
might be disputed or questioned, or by reason of which any claim to the Property might
be asserted adversely to Seller.
4. To the knowledge of Seller, no proceedings in bankruptcy have ever been
instituted by, or against Seller and Seller has never made an assignment for the benefit of
creditors.
5. Seller knows of no action or proceeding relating to the Property which is
now pending in any state or federal court in the United States nor does Seller know of
any state or federal judgment or any federal lien of any kind or nature whatever, which
now constitutes a lien or charge upon the Property.
6. With the exception of the leases described on Exhibit "B" attached hereto
any by this reference made a part hereof and the rights of the respective tenants under
those leases, there are no tenancies or leases affecting the Property or any part thereof and
there are no persons in possession of the Property or any part thereof.
7. There are no contracts for construction of improvements on, or making
repairs to, the Property, or any part thereof. There are no unpaid bills or claims for labor
620014.2 C-1
a
or services performed or material furnished or delivered during the past twelve months
for alteration, repair, nor new construction of the Property.
DATED this day of , 200_
SELLER:
a
DO NOT SIGN — EXHIBIT ONLY
Rv_
Print Name:
Title:
The foregoing instrument was acknowledged before me this day of
2004, by , as of
My commission expires:
Notary Public
620014.2
C-2