REAL ESTATE SALES
CONTRACT
Hyde Park
Title Agency, LLC, (“Closing Agent”) will receive,
within (3) days of execution of this contract, from Mark D
Ayer, or his assignees (“Buyer”) the sum of
Twenty Five Thousand dollars ($ 25,000
) . This sum is a deposit (“Deposit”) to be applied
to the purchase price of that certain real property and
improvements referred to as Hollywood Video (the
“Property”) generally located at 1479 Main
Street in the City of Hamilton , State of
Ohio and more particularly described on
Exhibit A :
The Property
shall also include Seller’s interests in and assignment to
Buyer of:
1. Any and
all easements and privileges and appurtenances pertaining to the
Property, including any right, title and interest of Seller in or
to adjacent streets, alleys or right(s)-of-way;
2. Any and
all, licenses, occupancy agreements, permits, rents, warranties,
construction warranties or guarantees in favor of Seller and any
indemnities in favor of Seller with respect to the Property, or any
portion thereof;
3. Any and
all mineral and water rights in, under, on or above the Property to
extent they are owned by Seller.
4. That
certain Lease, dated February 28, 1997, as amended,
(“Lease”), between Seller and Hollywood Entertainment
Corporation an Oregon corporation
(“Tenant”).
For the mutual
covenants contained in this Real Estate Sales Contract
(“Agreement”), Seller agrees to convey the Property to
Buyer, and Buyer agrees to purchase the Property from Seller, on
the following terms and conditions:
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1)
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PURCHASE PRICE:
The total purchase price
for the Property is Eight Hundred Seventy-Five
Thousand Dollars ($ 875,000 )
(“Purchase Price”).
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2.)
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DEPOSIT: Buyer will deposit with the Closing
Agent the Deposit, which shall be returned to Buyer, upon
Buyer’s request, if no contract shall have been entered into.
Upon acceptance of this Agreement by both parties, Closing Agent
shall deposit such amount in its non-interest bearing trust account
to be disbursed, subject to collection by Closing Agent’s
depository, as follows: (a) Deposit shall be applied on
Purchase Price or returned to Buyer when transaction is closed;
(b) if Seller fails or refuses to perform, or if the Property
is made unmarketable by Seller, or by Acts of God, or any
contingency is not satisfied or waived, the Deposit shall be
returned to Buyer; however, once the contingencies set forth in
paragraph(s) 7, 8 and 9 are removed, Buyer’s
Deposit shall be nonrefundable so long as Seller does not default
under
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Buyer’s Initials
Seller’s Initials
1 of 15
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this Agreement; (c) if Buyer
fails or refuses to perform, this Deposit shall be paid to Seller
pursuant to Section 17, below. If the parties are unable to
agree upon the disposition of the Deposit, then upon the request of
either Buyer or Seller for the return or payment of the Deposit,
the Closing Agent holding the Deposit shall give written notice to
the other party of such request, and shall advise the other party
that such Deposit shall be returned or paid in accordance with such
request unless the other party delivers written objection thereto
within 20 days after receipt of such notice. If the Closing
Agent does not receive any written objection within such 20-day
period, then the Closing Agent shall return or pay such Deposit in
accordance with such request. If the other party objects in writing
within such 20-day period, Closing Agent shall retain the Deposit
until (i) Buyer and Seller have settled the dispute;
(ii) disposition has been ordered by a final court order; or
(iii) Closing Agent deposits said amount with a court pursuant
to applicable court procedures. The return or payment of such
Deposit shall not in any way prejudice the rights of Buyer in any
action for damages or specific performance. Seller’s remedies
are discussed in Section 17, below.
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3)
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ADDITIONAL CASH DOWN
PAYMENT: Buyer shall make an additional cash
down payment (in addition to the Deposit) sufficient to pay the
balance of the Purchase Price (plus or minus any closing
adjustments, as the case may be) at closing.
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4)
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CLOSING DATE:
The completion of this
Agreement and close of the transaction hereunder shall take place
at the office of Closing Agent located in Cincinnati,
OH , unless otherwise agreed in writing by Buyer and
Seller. Seller and Buyer agree to prepare, execute and cause to be
delivered to the Closing Agent such instructions and other
documents as may be necessary and appropriate to complete this
Agreement and close the transaction. “Closing Date”
shall mean a date mutually acceptable to Buyer and Seller, but in
no event later than October 4th , 2006 . All
escrow fees of the Closing Agent to close this transaction shall be
split equally between Buyer and Seller .
Seller shall pay the transfer tax. All other closing
costs shall be paid in accordance with the custom and practice in
the county in which the Property is located.
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5)
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TAXES AND ASSESSMENTS
: Buyer acknowledges
that the Lease obligates the Tenant to pay the taxes directly to
the taxing authority. Accordingly, the parties shall not prorate
taxes between Buyer and Seller, it being acknowledged that Tenant
shall be responsible for same. In no event shall Seller be
responsible for the payment of any real estate taxes and/or
assessments applicable during its period of ownership in the event
the Tenant has defaulted in the prompt payment of same. However,
Seller has agreed to place in escrow with the Title Company, should
the closing take place, a tax proration in the amount equal to the
number of days the Property was owned by Seller in the year 2006
(“Tax Escrow”). Should the 2006 taxes remain unpaid by
the Tenant for more than fifteen (15) days after they are
considered delinquent with penalty and interest, Seller shall
release the Tax Escrow to the Buyer. If the 2006 taxes are paid
when due by Tenant, the Tax Escrow shall be released to the Seller.
Both Buyer and Seller agree to provide written instructions to the
Title Company to release the Tax Escrow on or before July 15,
2007. With regard to further assessments, to Seller’s
knowledge, as of the acceptance hereof, no improvements or services
to the site or area have been installed or furnished that would
result in the costs being assessed against the Property, and no
written notification has been received by Seller from public
authority or owner’s association of future improvements that
would result in costs being assessed against the real estate.
Real estate taxes and assessments are subject to retroactive
change by governmental authority. The real estate taxes for the
property for the current tax year may change as a result of the
transfer or as a result of a change in the tax rate.
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Buyer’s Initials
Seller’s Initials
2 of 15
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6)
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OTHER PRORATIONS:
Rent actually paid for
the month in which the Closing occurs shall be prorated between
Seller and Buyer as of the close of business on the Closing Date,
with Buyer receiving a credit for amounts attributable to time
periods following such date. To the extent either party hereto
receives rent after the Closing Date to which the other has a
claim, such party shall remit same to the party entitled thereto
within ten (10) days of receipt. To the extent any rent
arrearages exist under the Lease, Seller shall have the right, to
pursue Tenant for such arrearages since there is no security
deposit.
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7)
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TITLE: Within Ten (10)
calendar days after the Effective Date (defined below) of this
Agreement, Buyer shall furnish or cause to be furnished at
Buyer’s expense, which Buyer
shall be responsible for paying, even if Buyer does not purchase
the Property, a title commitment and policy for an owner’s
policy of title insurance (“Commitment”) to be issued
at the Closing Date by Hyde Park Title Agency, LLC
(the “Title Company”) through the Closing Agent for the
Property. The title evidence shall be certified to within thirty
(30) days prior to closing with endorsement not before 8:00 a.
m. on the business day prior to the date of closing, all in
accordance with the standards of the local Bar Association, and
shall show in Seller marketable title in fee simple free and clear
of all liens and encumbrances except: (a) those created by or
assumed by Buyer; (b) those specifically set forth in this
contract; (c) zoning ordinances; (d) legal highway and
(e) covenants, restrictions, conditions and easements of record
that do not unreasonably interfere with present lawful use, (or
Buyer’s intended use which is retail ). Buyer
shall pay any additional costs incurred in connection with mortgage
title insurance issued for the protection of Buyer’s lender.
Within Seven (7) calendar days following receipt
thereof, Buyer shall either approve in writing the exceptions
contained in said Commitment or specify in writing any exceptions
which may interfere with Buyer’s intended use of the
Property. If Buyer objects to any exceptions, Seller shall, within
Seven (7) calendar days after receipt of
Buyer’s objections, deliver to Buyer written notice that
either (i) Seller will, at Seller’s expense, attempt to
remove the exception(s) to which Buyer has objected before the
Closing Date or (ii) Seller is unwilling or unable to
eliminate said exception(s). If Seller fails to so notify Buyer or
is unwilling or unable to remove any such exception by the Closing
Date, Buyer may either (i) elect to terminate this Agreement
and receive back the entire Deposit, in which event Buyer and
Seller shall have no further obligations under this Agreement; or,
alternatively, (ii) Buyer may elect to purchase the Property
hereunder subject to such exception(s). Any survey, as may be
required by any lender or Title Company, shall be paid for by
Buyer .
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Seller shall
convey to Buyer (or to such other person or entity as Buyer may
specify) marketable fee title by General Warranty Deed, the form of
which is attached hereto as Exhibit B to the
Property subject only to the exceptions approved or accepted by
Buyer in accordance with this Agreement. Title shall be insured by
a fee owner’s policy of title insurance acceptable to Buyer
issued by the Title Company in the amount of the purchase price
with the premium paid by Buyer . On the Closing Date,
Seller shall sign an affidavit with respect to off-record title
matters in accordance with the community custom.
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8)
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DUE DILIGENCE ITEMS.
Seller agrees to provide
Buyer with the items listed below, if readily available and in
Seller’s possession, within Five (5) calendar
days following the Effective Date:
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a.
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All
rental agreements, licenses, management agreements, maintenance or
service contracts, insurance policies, commitments, latest tax and
assessment bill(s) and other written agreements or notices which
affect the Property.
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Buyer’s Initials
Seller’s Initials
3 of 15
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b.
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The
Tenant’s financials and operating statements for the
property.
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c.
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All
drawings, specifications, site plans, surveys, engineering studies
or soil reports for the Property in Seller’s possession or
control.
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d.
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A
complete copy of the Lease, as amended..
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Buyer shall
acknowledge receipt of the Due Diligence Items in writing. Within
Fourteen (14) calendar days after the receipt of
documents, buyer shall review and approve each of these items. If
Buyer fails to approve these items and notifies Seller of same in
writing within Fourteen (14) calendar days of the
Effective Date, this Agreement shall be rendered null and void,
Buyer and Seller shall have no further obligations under this
Agreement, except as otherwise noted, and all Deposits shall be
returned to Buyer. Absent such notification to Seller by Buyer,
Buyer shall be presumed to have satisfied this
contingency.
Buyer
acknowledges and agrees that, except for such items which are in
the public records, the Due Diligence Items are proprietary and
confidential in nature and have been and/or will be made available
to Buyer solely to assist Buyer in determining the feasibility of
purchasing the Property. Buyer agrees not to disclose the Due
Diligence Items, or any of the provisions, terms or conditions
thereof to any party outside of Buyer’s organization except:
(i) to Buyer’s accountants, attorneys, lenders,
prospective lenders, environmental consultants, investors and/or
prospective investors (collectively, “Permitted Outside
Parties”) in connection with the transactions contemplated by
this Agreement, or (ii) as may be required by law. Buyer shall
take such actions as are necessary so as to ensure that the
Permitted Outside Parties also protect the confidential nature of
the Due Diligence Items to the same extent as Buyer is obligated to
do so hereunder. In permitting Buyer and the Permitted Outside
Parties to review the Due Diligence Items, Seller has not waived
any privilege or claim of confidentiality with respect thereto and
no third party benefits of any kind, either expressed or implied,
have been offered, intended or created by Seller and any such
claims are expressly rejected by Seller and waived by Buyer on its
own behalf and on behalf of the Permitted Outside
Parties.
Buyer
shall return to Seller all of the Due Diligence Items (including
all copies Buyer has made of the Due Diligence Items) at such time
as this Agreement is terminated for any reason. Buyer’s
obligations under this Section 8 shall survive the termination
of this Agreement.
Buyer
acknowledges that most of the Due Diligence Items were prepared by
third parties and, in some instances, may have been prepared prior
to Seller’s ownership of the Property. Buyer further
acknowledges and agrees that, except as specifically set forth
herein: (i) neither Seller nor any of its directors, officers,
partners, members, agents, employees or contractors have made any
warranty or representation regarding the truth, accuracy or
completeness of the Due Diligence Items or the sources thereof,
(ii) Seller has not undertaken any independent investigation
as to the truth, accuracy and completeness of the Due Diligence
Items, (iii) neither Seller nor any director, partner, member,
officer, employee or agent acting on Seller’s behalf is
authorized to make any representations or warranties of whatsoever
kind or nature regarding either the truth, accuracy or completeness
of the Due Diligence Items or the Property (other than as described
herein) and (iv) Seller is providing the Due Diligence Items to
Buyer (or making the Due Diligence Items available to Buyer) solely
as an accommodation to Buyer. Buyer further acknowledges and agrees
that Buyer shall be solely responsible for reviewing, analyzing and
determining the truth, completeness, accuracy and adequacy of the
Due Diligence Items.
Buyer’s Initials
Seller’s Initials
4 of 15
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9)
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INSPECTION OF PROPERTY:
Within Fourteen
(14) calendar days of the Effective Date, Seller agrees
that Buyer and its agents and representatives shall, subject to
arranging all on-site visits with Seller, be entitled to enter upon
the Property for inspection, soil tests, examination, land-use
planning and for any due diligence investigation relating to the
Buyer’s proposed ownership of the Property, subject to the
rights of the Tenant under the Lease. As to any such investigation,
Buyer shall restore the Property to the same condition as existed
prior to any such investigation, and shall not: (i) perform any
invasive tests without Seller’s prior consent, or
(ii) interfere with the possessory rights of the Tenant. Buyer
shall indemnify and hold harmless Seller from and against, and
shall reimburse Seller with resect to, any and all claims, demands,
causes of action, loss, damage, liabilities, costs and expenses
(including reasonable attorneys’ fees and disbursements)
asserted against or incurred by Seller by reason of or arising out
of any such on-site investigation, it being acknowledge that all
such obligations shall survive the termination of this Agreement.
If Buyer fails to timely approve in writing the condition of the
Property, and notify the Seller of the same within Fourteen
(14) calendar days, this Agreement shall be rendered null
and void and Buyer and Seller shall have no further obligations
under this Agreement, except as otherwise noted, and all Deposits
shall be returned to Buyer.
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10.
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ESTOPPEL CERTIFICATE
. Seller will make a one
time request from Tenant for a curre
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