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EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
BY AND AMONG
HINES NURSERIES, INC.,
KW MOHAWK VALLEY LLC,
621 EAST MAPLE LLC,
DANVILLE PA LLC,
KW UTICA LLC,
KW NEWARK LLC AND
KW DANVILLE LLC
DATED AS OF
JANUARY 9, 2007
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "AGREEMENT") is made and
entered into as of January 9, 2007 (the "EFFECTIVE DATE"), by and
among Hines
Nurseries, Inc., a California corporation ("SELLER"), and KW Mohawk
Valley LLC
("MOHAWK"), 621 East Maple LLC ("621"), Danville PA LLC ("PA"), KW
Utica LLC
("UTICA"), KW Newark LLC ("NEWARK") and KW Danville LLC
("DANVILLE"), each a New
York limited liability company. Mohawk, 621, PA, Utica, Newark and
Danville are
collectively referred to herein as "BUYER."
RECITALS
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A. Seller owns certain real property located in the Village of
Newark, County of Wayne, State of New York, and more particularly
described in
EXHIBIT A attached hereto and incorporated herein by this reference
(the "NEWARK
PROPERTY").
B. Seller owns certain real property located in the City of
Utica, County of Oneida, State of New York, and more particularly
described in
EXHIBIT B attached hereto and incorporated herein by this reference
(the "UTICA
PROPERTY," and together with the Newark Property, the "FEE
PROPERTIES").
C. Seller is currently a hold over tenant under that certain
Lease Agreement (the "PRIOR LEASE") dated May 6, 1981, as amended
with PPL
Generation, LLC, as landlord ("PPL"), for the premises located in
Danville,
Pennsylvania and more particularly described in the Prior Lease
(the "LEASED
PROPERTY," and collectively with the Fee Properties, the
"PROPERTY").
D. Subject to the terms and conditions set forth in this
Agreement, Buyer desires to purchase from Seller, and Seller
desires to sell,
assign, transfer and deliver to Buyer, all of Seller's right, title
and interest
in and to (i) the Newark Property; (ii) the Utica Property; and
(iii) the
potting machinery, office furnishings and equipment, inventory,
racks, other
assets and greenhouses, as further described below.
NOW, THEREFORE, in consideration of the mutual promises set
forth herein and intending to be bound hereby, the parties hereby
agree as
follows:
AGREEMENT
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1. PURCHASE AND SALE OF ASSETS AT THE CLOSING.
1.1 PURCHASED ASSETS. Subject to the terms and conditions set
forth in this Agreement, at the Closing (as defined herein), Buyer
agrees to
purchase from Seller, and Seller agrees to sell, assign, transfer
and deliver to
Buyer all of Seller's right, title and interest in and to (i) the
potting
machinery, office furnishings and office equipment, inventory,
racks, other
assets and greenhouses described below and listed on Schedules
1.1(a), 1.1(b),
1.1(c), 1.1(d), 1.1(e) and 1.1(f) hereto (collectively, the
"OPERATING ASSETS")
as follows: (A) those Operating Assets located at the Newark
Property shall be
purchased by Newark; (B) those Operating Assets located at the
Utica Property
shall be purchased by Utica; and (C) those Operating Assets located
at the
Leased Property shall be purchased by Danville; (ii) the Newark
Property, which
shall be purchased by 621; and (iii) the Utica Property, which
shall be
purchased by Mohawk. The Operating Assets and the Fee Properties
shall be
collectively referred to herein as the "PURCHASED ASSETS."
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(a) POTTING MACHINERY. The potting machinery listed
and described on SCHEDULE 1.1(A) (the "POTTING Machinery").
(b) OFFICE FURNISHINGS AND OFFICE EQUIPMENT. The
office furnishings and office equipment listed and described on
SCHEDULE 1.1(B)
(the "OFFICE EQUIPMENT").
(c) INVENTORY. Subject to the next sentence, all
inventory items and related materials and supplies (each an
"INVENTORY ITEM")
listed and described on SCHEDULE 1.1(C) and located on the Property
at the
Closing (the "INVENTORY"). Buyer acknowledges that Inventory Items
and other
products may be sold by Seller for Seller's benefit in the ordinary
course of
Seller's business up to and through the close of business on the
Closing Date
(defined below) and that neither such items which have been sold up
to and
through the close of business on the Closing Date nor the resulting
accounts
receivable are being sold to Buyer hereunder. For purposes of this
Agreement,
the terms "Inventory" and "Purchased Assets" shall not include any
Inventory
Items or other products sold by Seller in the ordinary course of
Seller's
business up to and through the close of business on the Closing
Date.
(d) RACKS. The racks listed and described on SCHEDULE
1.1(D) (the "INITIAL RACKS").
(e) OTHER ASSETS. All other assets listed and
described on SCHEDULE 1.1(E) (the "OTHER ASSETS").
(f) GREENHOUSES. The greenhouses located on the
Leased Property and listed and described on SCHEDULE 1.1(F) (the
"GREENHOUSES").
1.2 EXCLUDED ASSETS. Seller shall not sell, assign, transfer
or convey to Buyer, and Buyer shall not purchase from Seller, any
inventory,
property, item or asset of Seller other than those described or
listed in
Section 1.1 and described or listed on Schedules 1.1(a), 1.1(b),
1.1(c), 1.1(d),
1.1(e) and 1.1(f), including, without limitation, any accounts
receivable of
Seller (the "EXCLUDED ASSETS").
1.3 ASSUMED LIABILITIES.
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(a) Subject to the terms and conditions of this
Agreement, at the Closing, Seller shall assign (to the extent
assignable) all of
its rights, and Buyer shall assume and agree to pay, perform or
otherwise
discharge as the same shall become due in accordance with their
respective
terms, all liabilities and obligations of Seller arising from or
relating to the
contracts, agreements and unfulfilled purchase orders listed on
SCHEDULE 1.3 to
the extent such liabilities and obligations arise on or after the
Closing Date
(the "ASSUMED LIABILITIES"); and
(b) Except for the Assumed Liabilities, Buyer shall
not assume any liabilities or obligations of Seller.
1.4 CONSENTS TO ASSIGNMENTS; Notwithstanding anything in this
Agreement, the Assignment and Assumption Agreement (as defined
below) or any
bill of sale to the contrary, to the extent that any of the Assumed
Liabilities
is not capable of being sold, assigned, transferred or conveyed
without the
approval, consent or waiver of the other party thereto, or any
third person, or
if such sale, assignment transfer or conveyance or attempted
assignment,
transfer or conveyance would constitute a breach thereof or a
violation of any
law, decree, order, regulation or other governmental edict, neither
this
Agreement nor the Assignment and Assumption Agreement nor any bill
of sale shall
constitute a sale, assignment, transfer or conveyance thereof, or
an attempted
assignment, transfer or conveyance thereof. After the Closing,
until any Assumed
Liability has been validly and effectively assigned to Buyer,
Seller shall hold
such Assumed Liability for the benefit of Buyer and Buyer shall be
entitled to
receive all benefits under such Assumed Liability (the "Interests")
and Buyer
shall be solely and unconditionally responsible for all liabilities
and
obligations arising in connection with or related to such Interests
and pay,
perform and otherwise discharge the same as they will become due to
the extent
such liabilities or obligations arise on or after the Closing
Date.
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2. PURCHASE PRICE; PAYMENT TERMS.
2.1 PURCHASE PRICE. The aggregate purchase price (the
"PURCHASE PRICE") shall be an amount equal to the sum of:
(a) Land, Greenhouses, Potting Machinery and Office Equipment,
Furniture
Danville
Buildings, Greenhouses and Other Improvements to
Real Property
$ 1,837,428
Potting Machinery and
Office Equipment
$ 210,870
Furniture
$
14,405
Newark
Land
$ 100,000
Buildings, Greenhouses and Other Improvements to
Real Property
$ 708,890
Potting Machinery and Office Equipment
$ 129,300
Furniture
$
1,810
Utica
Land
$ 100,000
Buildings, Greenhouses and Other Improvements to
Real Property
$ 1,406,807
Potting Machinery and Office Equipment
$ 180,900
Furniture
$
8,293
Subtotal $
4,698,703
(b) Plus the following
Initial Racks
$ 557,750
Other Assets
$ 300,000
Closing Inventory Value (as defined below)
$ 1,193,427
Less Credit for Leighow Contract
$ (41,412)
Subtotal $
2,009,765
Total $
6,708,468
2.2 DEPOSIT. On the Effective Date, Buyer shall deposit by
cashier's check or wire transfer of immediately available federal
funds into the
Escrow provided for in Section 3 the sum of Two Hundred Twenty Five
Thousand and
00/100 Dollars ($225,000.00) (the "DEPOSIT"). Escrow Holder (as
defined below)
shall, without any requirement for further instructions,
immediately release the
Deposit to Seller, which funds shall become non-refundable in all
instances
other than a termination of this Agreement due to Seller's default
hereunder.
The Deposit will be credited against the Purchase Price. If
requested by Buyer,
prior to any disbursement to Seller hereunder, the Deposit shall be
deposited by
Escrow Holder into an interest-bearing account selected by Buyer.
The interest
earned on the Deposit prior to disbursement of the Deposit to
Seller shall, at
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the time of Closing, be paid to Seller and credited against the
Purchase Price
or, in the event that this Agreement is terminated, the interest on
the Deposit
shall be paid to Buyer, unless such termination is a result of
Buyer's default
under the terms hereof in which case the interest on the Deposit
shall be
released to Seller. Buyer shall not be entitled to any interest on
the Deposit
from and after its disbursement hereunder to Seller. In addition to
all of
Seller's rights and remedies under this Agreement and applicable
law, Seller
shall have the right to terminate this Agreement if for any reason
Buyer shall
fail to make the Deposit required to be made by Buyer when due
hereunder.
2.3 PAYMENT OF PURCHASE PRICE. At the Closing, Buyer shall pay
the Purchase Price less the Deposit released to Seller pursuant to
Section 2.2
above into Escrow (as defined below) by wire transfer in
immediately available
funds.
2.4 SALES, USE AND TRANSFER TAXES. Buyer and Seller agree that
any and all excise, deed, documentary, stamp or transfer tax and
similar
conveyance taxes or charges payable in connection with the transfer
of the Fee
Properties shall be paid by Seller (expressly excluding any
mortgage taxes).
Except as provided in the preceding sentence, Buyer shall be
responsible for any
sales, use or other taxes, duties, fees and governmental exactions
imposed by
any reason on the transfer of the Purchased Assets provided for
hereunder and
any deficiency, interest or penalty asserted with respect
thereto.
Notwithstanding the preceding sentence, Buyer shall not be
responsible for any
income, capital gain or other similar tax incurred by Seller in
connection with
the transfer of the Purchased Assets to Buyer.
2.5 PAYMENT OF COSTS AND EXPENSES. Except as provided herein,
all fees and costs of the Escrow Holder in connection with the sale
of the
Purchased Assets shall be paid by Buyer. Buyer shall pay at the
Closing all
costs associated with recording the Deeds (defined below), any
mortgages Buyer
places on the Property and any taxes associated with such mortgages
and any
other document which Buyer chooses to record. Buyer shall also pay
at the
Closing all premiums for the Owner's Title Policies (as defined
below) and the
cost of any surveys prepared in connection herewith. Each party
shall bear the
costs of its agents, attorneys, accountants, investment bankers,
travel, lodging
and entertainment and associated expenses.
2.6 PRORATIONS OF TAXES AND EXPENSES. All real estate taxes,
charges and assessments affecting the Fee Properties ("PROPERTY
TAXES") and all
charges for water, electricity, sewer, gas, telephone and all other
utilities
("OPERATING EXPENSES"), shall be prorated on a per diem basis as of
12:01 a.m.
on the Closing Date. If any Property Taxes have not been finally
assessed as of
the Closing Date for the current fiscal year of the taxing
authority, then the
same shall be adjusted at the Closing based upon the most recently
issued bills
therefore, and shall be re-adjusted when and if final bills are
issued. If any
bills for Operating Expenses for periods prior to the Closing are
not then
available, then the parties shall make a reasonable estimate
thereof for
purposes of adjustments at the Closing, with such amounts to be
re-adjusted
between the parties within thirty (30) days of receipt of said
bills.
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2.7 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be
allocated in relation to the Purchased Assets, as set forth in
Section 2.1
hereto. Each party agrees that it will not, in its tax returns or
elsewhere,
take a position inconsistent with the allocations provided for in
this Section.
2.8 CLOSING INVENTORY; POST-CLOSING INVENTORY ADJUSTMENT. No
later than three (3) days prior to the Closing but no earlier than
five (5) days
prior to the Closing, Seller and Buyer shall conduct a physical
inventory count
(the "CLOSING INVENTORY") of the Inventory Items located on the
Property for the
purpose of determining the value of the Inventory (the "CLOSING
INVENTORY
VALUE"). The Closing Inventory Value shall be an amount equal to
the sum of the
products of (x) the quantity of each Inventory Item on hand during
the Closing
Inventory, multiplied by (y) the price for each such Inventory Item
listed on
SCHEDULE 1.1(C),which amount shall be included in the Purchase
Price as
contemplated by Section 2.1 above. Promptly after the Closing,
Seller shall
provide Buyer a summary, including copies of related invoices and
shipping
documents, setting forth the aggregate effect, calculated on a
basis consistent
with the Closing Inventory Value, of any changes in the Inventory
between the
Closing Inventory and the Closing (the "INVENTORY ADJUSTMENT"). If
the Inventory
Adjustment is a negative number, Seller shall promptly pay the
Inventory
Adjustment to Buyer. If the Inventory Adjustment is a positive
number, Buyer
shall promptly pay the Inventory Adjustment to Seller.
2.9 LEASE. Seller and Buyer acknowledge that Buyer has or will
directly enter into a Lease with PPL for the Leased Property (the
"LEASE").
3. CLOSING.
3.1 CLOSING. Within one (1) business day after the execution
of this Agreement (the "OPENING OF ESCROW") an escrow ("ESCROW")
shall be opened
with Decision 2000 Real Estate Services, Inc., 169 Roanoke Avenue,
Riverhead, NY
11901 Attention: Marijude Messina ("ESCROW HOLDER") for the
consummation of the
purchase and sale transaction contemplated herein by delivery of a
fully
executed copy of this Agreement and an escrow agreement ("ESCROW
AGREEMENT"). As
used herein, "CLOSING" shall mean and refer to the date Escrow
Holder disburses
the funds pursuant to Section 3.4 below. The Closing shall occur on
or before
January 10, 2007 (the "CLOSING DATE"). Except as otherwise provided
in this
Agreement, all proceedings to be taken and all documents to be
executed at the
Closing shall be deemed to have been taken, delivered or
executed
simultaneously, and no action or proceeding shall be deemed taken
nor documents
deemed executed or delivered until all have been taken, executed
and delivered.
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3.2 DELIVERIES OF SELLER. At least one (1) day prior to the
Closing Date, Seller shall deliver or cause to be delivered to
Escrow Holder:
(a) a duly executed and acknowledged Bargain and Sale
Deed in favor of Buyer, conveying all of Seller's right, title and
interest in
and to the Newark Property in the form of EXHIBIT C attached hereto
(the "NEWARK
Deed");
(b) a duly executed and acknowledged Bargain and Sale
Deed in favor of Buyer, conveying all of Seller's right, title and
interest in
and to the Utica Property in the form of EXHIBIT D attached hereto
(the "UTICA
Deed"; collectively with the Newark Deed referred to herein as the
"DEEDS");
(c) an Assignment and Assumption Agreement duly
executed by Seller in the form of EXHIBIT E attached hereto
("ASSIGNMENT AND
ASSUMPTION AGREEMENT")
(d) the Escrow Agreement duly executed by Seller;
(e) a certification of the "non-foreign" status of
Seller ("FIRPTA CERTIFICATE") in the form of EXHIBIT F attached
hereto;
(f) a Bill of Sale duly executed by Seller in
substantially the form of EXHIBIT G attached hereto (the "BILL OF
SALE");
(g) a reconveyance terminating mortgagee's security
interest under that certain Open-End Leasehold Mortgage, Assignment
of Rents,
Security Agreement and Fixture Filing dated January 21, 1998 and
recorded in
Montour County Book 197 page 1072 on February 2, 1998 and any
amendments
thereto;
(h) a copy, certified as of the Closing Date by an
authorized officer of Seller, of the resolutions of the Board of
Directors of
Seller authorizing the execution, delivery and performance of this
Agreement by
Seller;
(i) a certificate, dated the Closing Date, executed
by an authorized officer of Seller to the effect that (i) each of
the
representations and warranties of Seller made herein is true and
correct in all
material respects on the Closing Date as though such
representations and
warranties were made on such date and (ii) Seller has performed and
complied in
all material respects with all covenants, conditions and
obligations under this
Agreement which are required to be performed or complied with by
Seller on or
before the Closing Date; and
(j) such customary documents and certificates as
Escrow Holder and/or the Title Company shall require to consummate
the
transaction contemplated by this Agreement.
3.3 DELIVERIES OF BUYER. At least one (1) day prior to the
Closing Date, Buyer shall deliver or cause to be delivered to
Escrow Holder:
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(a) the Purchase Price;
(b) the Assignment and Assumption Agreement;
(c) the Escrow Agreement duly executed by Buyer;
(d) a Guaranty duly executed by Kurt Weiss
Greenhouses, Inc. in the form attached hereto as EXHIBIT H;
(e) a copy, certified as of the Closing Date by the
secretary of each Buyer, of the resolutions of the Managing Member
of each Buyer
authorizing the execution, delivery and performance of this
Agreement by each
Buyer;
(f) a certificate, dated the Closing Date, executed
by an authorized officer of Buyer to the effect that (i) each of
the
representations and warranties of Buyer made herein is true and
correct in all
material respects on the Closing Date as though such
representations and
warranties were made on such date and (ii) Buyer has performed and
complied in
all material respects with all covenants, conditions and
obligations under this
Agreement which are required to be performed or complied with by
Buyer on or
before the Closing Date; and
(g) such customary documents and certificates as
Escrow Holder and/or the Title Company (defined below) shall
require to
consummate the transactions contemplated by this Agreement.
3.4 FUNDS. Provided that all conditions to the Closing set
forth in Section 8 have been satisfied or, as to any condition not
satisfied,
waived by the party intended to be benefited thereby, on or before
the Closing
Date, Escrow Holder shall disburse all funds deposited with Escrow
Holder by
Buyer in payment of the Purchase Price as follows: (a) deduct all
items
chargeable to the account of Seller pursuant to the provisions of
this
Agreement; (b) disburse the Purchase Price to Seller promptly upon
the Closing;
and (c) disburse the remaining balance of the funds, if any, to
Buyer promptly
upon the Closing.
3.5 RECORDING. Upon Escrow Holder's disbursement of funds
pursuant to Section 3.4 for the Closing, above, Escrow Holder shall
cause the
Deeds (with documentary transfer tax information to be affixed
after recording)
and any other documents which the parties hereto may mutually
direct, to be
recorded with the recorders office for the counties where the Fee
Properties are
located ("COUNTY CLERK") and Escrow Holder shall obtain conformed
copies thereof
for distribution to Buyer and Seller.
3.6 BUYER'S TITLE INSURANCE POLICY. Upon completion of the
recording provided in Section 3.5, Escrow Holder shall issue the
Owner's Title
Policies to Buyer.
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3.7 DELIVERY OF DOCUMENTS TO BUYER. Promptly following the
Closing, Escrow Holder shall deliver to Buyer: (a) conformed copies
of the
recorded Deeds and any other recorded documents; (b) the original
FIRPTA
Certificate; and (c) a copy of all other documents delivered to
Escrow Holder in
connection with the transactions contemplated hereby.
3.8 DELIVERY OF DOCUMENTS TO SELLER. Promptly following the
Closing, Escrow Holder shall deliver to Seller: (a) conformed
copies of the
recorded Deeds and any other recorded documents; and (b) a copy of
all other
documents delivered to Escrow Holder in connection with the
transactions
contemplated hereby.
4. TITLE AND SURVEY MATTERS.
4.1 RECEIPT. Buyer has been provided with title insurance
commitments covering the Fee Properties, together with complete
copies of all
instruments referred to therein as exceptions to title
(collectively, the "TITLE
COMMITMENTS") prepared by Chicago Title Insurance Company ("TITLE
COMPANY") as
follows: (a) Title Commitment for the Newark Property dated
November 29, 2006,
Order No. 06-Wayne-5657, and (b) Title Commitment for the Utica
Property dated
November 21, 2006, Order No. 06-Oneida-5657.
Prior to the execution of this Agreement, Buyer has had an
opportunity to review and approve: (a) the Title Commitments and
all supplements
thereto, and all exceptions to title referred to therein, (b) all
additional
matters, if any, affecting title to the Property disclosed by
Seller to Buyer in
writing, and (c) all matters which would be disclosed by ALTA
surveys of the
Property prepared in accordance with the 2005 Minimum Detail
Requirements for
ALTA/ACSM Land Title Surveys (collectively, "TITLE AND SURVEY
MATTERS"). Buyer
has had the opportunity, at its sole cost and expense, to obtain
surveys of the
Fee Properties and the Leased Property. In no event shall Buyer's
obtaining of
such survey(s) be a condition precedent to Buyer's obligations
hereunder. In the
event that Buyer obtains any survey(s), it shall promptly provide
Seller with a
copy of such survey(s). By its execution of this Agreement, Buyer
has hereby
approved all Title and Survey Matters and Buyer further
acknowledges and agrees
that Buyer shall not have any right to terminate this Agreement
regarding any of
the Title and Survey Matters; provided, however, Seller shall cause
the
following exceptions to title to the Fee Properties to be removed
prior to the
Closing (collectively, the "DISAPPROVED EXCEPTIONS"): (i) monetary
encumbrances
on the Fee Properties caused by or at the direction of Seller but
expressly
excluding (x) real property taxes and assessments constituting a
lien not yet
due and payable and (y) liens and encumbrances caused or permitted
to occur by
Buyer in connection with Buyer's entry upon and inspection of the
Fee Properties
and/or the Leased Property; and (ii) any other exceptions caused by
Seller after
the date hereof and not approved by Buyer as a Title and Survey
Matter which in
the reasonable opinion of Buyer will have a material and adverse
affect on the
use and/or operation of the Fee Properties.
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4.2 EXCEPTIONS TO TITLE. Buyer shall be obligated to accept
title to the Fee Properties subject only to the following
exceptions to title
(collectively, the "PERMITTED EXCEPTIONS"): (a) real estate taxes
and
assessments not then delinquent; (b) the lien of supplemental taxes
assessed
with respect to matters occurring on or after the Closing Date; (c)
the printed
exceptions which appear in the Owner's Title Policies issued by the
Title
Company; (d) all Title and Survey Matters approved or deemed
approved by Buyer
pursuant to this Agreement; and (e) any matters affecting the Fee
Properties
which are created by or with the consent of Buyer, including,
without
limitation, any matters relating to entitlements sought by Buyer
prior to the
Closing. Conclusive evidence of the availability of such title
shall be the
irrevocable commitment of the Title Company to issue to Buyer on
the Closing
Date an ALTA policy of title insurance for each of the Fee
Properties ("OWNER'S
TITLE POLICIES") in the amount of the Purchase Price allocated to
the applicable
Fee Property in Section 2.1, respective, which Owner's Title
Policies shall
reflect that title to the Newark Property and the Utica Property is
vested of
record in Buyer, subject only to the Permitted Exceptions. In the
event that
Buyer desires any endorsements to the Owner's Title Policies, Buyer
shall
separately negotiate such endorsements with the Title Company
and
notwithstanding anything else to the contrary herein, Buyer's
obligations under
this Agreement shall not be conditioned or contingent on Buyer
obtaining the
issuance of any such endorsements, and the Closing shall not be
delayed for
Buyer's failure to obtain the issuance of any such
endorsements.
5. BUYER'S DUE DILIGENCE.
5.1
DELIVERY AND AVAILABILITY OF DUE DILIGENCE MATERIALS.
Buyer acknowledges that it has received and is familiar with the
contents
contained in the due diligence materials described on EXHIBIT I
("DUE DILIGENCE
MATERIALS").
5.2 DUE DILIGENCE. Subject to the express representations,
warranties and indemnities of Seller set forth in this Agreement,
by its
execution of this Agreement, Buyer hereby approves all Due
Diligence Materials,
the physical condition of the Property and all issues in connection
with the
Property in every respect. Buyer acknowledges and agrees that Buyer
shall not
have any right to terminate this Agreement regarding the physical
condition or
feasibility of the Property. In addition, Buyer's obligations under
this
Agreement to be performed in connection with the Closing shall not
be contingent
upon Buyer's approval of the Due Diligence Materials, the physical
condition of
the Property, any issues in connection with the Property or Buyer's
obtaining of
financing in connection with Buyer's proposed acquisition of the
Property
pursuant to the terms and conditions of this Agreement. If this
Agreement is
terminated for any reason, Buyer shall, within five (5) days of
such
termination, provide Seller with full and complete copies of any
Due Diligence
Materials and all entitlement materials, applicants and agreements,
all surveys,
appraisals, investigative reports and other written materials
developed by (or
for the benefit of) Buyer in connection with its due diligence
review ("BUYER
PREPARED DUE DILIGENCE").
5.3 PHYSICAL INSPECTIONS.
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(a) Intentionally Deleted.
(b) Notwithstanding any provision of this Agreement
to the contrary, in no case shall Buyer or any and Buyer's agents,
employees and
contractors (collectively, the "BUYER PARTIES") conduct any
physical, soils,
groundwater, environmental or other sampling, drilling or coring or
any other
form of work or investigation which may physically invade, alter,
damage or
disturb any portion of the Property (or the soils or groundwater
thereunder) or
any improvements (the "IMPROVEMENTS") thereon or thereunder
(collectively,
"PHYSICAL TESTING") without first (i) submitting to Seller a
written description
of the general nature and scope of the Physical Testing proposed,
the protective
measures to be utilized by Buyer to avoid or minimize any damage to
the Property
or the Improvements, the restoration activities proposed to be
performed by
Buyer to restore any anticipated damage, the contractor(s) to be
conducting such
Physical Testing (and a description of their qualifications and
licensing),
those portions of the Property to be affected by such Physical
Testing and
Buyer's proposed schedule for conducting such Physical Testing
(collectively, a
"REQUEST FOR PHYSICAL TESTING") and (ii) obtaining the prior
written approval of
Seller to Buyer's Request for Physical Testing with respect
thereto, which
approval may be withheld in Seller's reasonable discretion.
(c) Buyer shall indemnify, protect, defend (with
counsel satisfactory to Seller) and hold Seller, the Property and
each of
Seller's members, partners, employees, directors, officers,
shareholders,
parents, subsidiaries, accountants, agents and affiliates
(collectively, "SELLER
RELATED PARTIES") harmless from and against all claims, demands,
actions,
liabilities, damages, losses, obligations, fines, penalties, costs
and expenses,
including, without limitation, attorneys' fees and all court costs
asserted
against or incurred by Seller, the Property, any plants, equipment
or
improvements related to the nursery operations thereon
(collectively, the
"PLANTS AND EQUIPMENT") or any Seller Related Party in connection
with any
exercise by Buyer or any Buyer Party of the Inspection rights
granted to Buyer
under this Agreement, except to the extent such claims are
determined by a court
of competent jurisdiction to have been caused by Seller or any
Seller Related
Party. The foregoing indemnity shall survive the Closing and the
termination or
cancellation of this Agreement. Prior to any Inspection of or entry
onto the
Property by Buyer or any Buyer Party, Buyer shall (i) at its sole
cost and
expense, procure and maintain in full force and effect at all times
prior to the
Closing a customary commercial general liability insurance policy
with combined
single limit coverage in an amount not less than $1,000,000 and
property damage
limits of at least $2,000,000, issued by an insurance company
qualified to do
business in the State of New York, and having a Best's rating of
not less than
A-/VII, naming Seller and any other party reasonably designated by
Seller as
additional insureds with respect to all of Buyer's and the Buyer
Parties'
activities in, on and about the Property and including customary
insurance
against any assumed contractual liability under this Agreement, and
(ii) provide
Seller with a certificate of insurance evidencing the existence of
such policy
and coverage. The insurer under such policy shall agree not to
cancel,
materially change or fail to renew the coverage provided by such
policy without
giving Seller ten (10) business days advance written notice, which
agreement
shall be reflected in Buyer's certificate of insurance.
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<PAGE>
6. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby makes
the
following representations and warranties to Buyer, each of which is
true and
correct as of the date hereof and will be true and correct as of
the Closing
Date, except as set forth on the disclosure schedules attached
hereto ("SELLER'S
DISCLOSURE Schedules"):
6.1 GENERAL REPRESENTATIONS AND WARRANTIES.
(a)
EXISTENCE. Seller validly exists as a corporation
in good standing under the laws of the State of California.
(b) AUTHORITY TO SELL OPERATING ASSETS. Seller has
all requisite corporate power and authority to sell the Operating
Assets and the
Fee Properties to Buyer as contemplated hereby, and such sale of
the Operating
Assets and the Fee Properties has been duly and valid
