Motion for Order Approving, 1) Sale of Glen Ivy Golf

Transcription

Case 2:14-cv-02334-JFW-MRW Document 413-1 Filed 02/10/16 Page 1 of 73 Page ID
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1 DAVID R. ZARO (BAR NO. 124334)
TED FATES qB.ARNO. 227809)
2 TIM C. HSU BAR NO. 279208)
ALLEN MAT UNS LECK GAMBLE
MALLORY & NATSIS LLP
3
501 West Broadway,, 15th Floor
4 San Diego, Califorma 92101-3541
Phone: (619) 233-1155
5 Fax: (619) 233-1158
E-Mail: [email protected]
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tfates@_allenmatkins.com
[email protected]
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Attorneys for Temporary Court-appointed
8 Receiver
KRISTAL. FREITAG
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UNITED STATES DISTRICT COURT
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CENTRAL DISTRICT OF CALIFORNIA
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WESTERN DIVISION
Case No. 14-CV-2334-JFW (MRWx)
DECLARATION OF KRJSTAL.
FREITAG IN SUPPORT OF MOTION
FOR ORDER APPROVING: (1) SALE
OF GLEN IVY GOLF COURSE, (2)
OVERBID PROCEDURES, AND (3)
REAL ESTATE BROKER'S
COMMISSION
Date:
Time:
Ctrm:
Judge:
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Allen Matkins Leck Gamble
Mallory & Natsis LLP
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March 14, 2016
1:30 p.m.
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Hon. John F. Walter
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DECLARATION OF KRISTAL. FREITAG
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I, Krista L. Freitag, declare:
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1.
I am the permanent receiver for Defendants World Capital Market Inc.;
4 WCM777 Inc.; WCM777 Ltd. d/b/a WCM777 Enterprises, Inc.; and Relief
5 Defendants Kingdom Capital Market, LLC; Manna Holding Group, LLC; Manna
6 Source International, Inc.; WCM Resources, Inc.; ToPacific Inc.; To Pacific Inc.; and
7 their subsidiaries ahd affiliates (collectively, "Receivership Entities").
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2.
This declaration is made in support of my Motion for Order Approving:
9 (1) Sale of Glen Ivy Golf Course, (2) Overbid Procedures, and (3) Real Estate
10 Broker's Commission ("Motion"). I have personal knowledge of the facts set forth
11 herein and, if called as a witness, could and would testify to such facts under oath.
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3.
Pursuant to the terms of this Court's Temporary Restraining Order and
13 the laws governing federal equity receiverships, immediately upon my appointment
14 on March 27, 2013, I moved to investigate and secure the assets of the Receivership
15 Entities, including the golf course facilities and associated amenities commonly
16 known as the Glen Ivy Golf Club ("Glen Ivy Golf Course") and located at 24400
17 Trilogy Parkway, Corona, California. The Glen Ivy Golf Course is an 18-hole, daily
18 fee golf course, driving range, practice green and other golf-related facility, situated
19 on approximately 226 acres of land (per a boundary survey), and includes all
20 improvements, furniture, fixtures, equipment, and other tangible and intangible
21 property associated therewith (together, the "Property"). The Property was purchased
22 by Defendant Kingdom Capital Market Inc. ("KCM") in August 2013 for
23 $6.5 million, but title to the Property was originally taken in the name of Defendant
24 World Capital Market Inc. and transferred to KCM shortly thereafter. The facilities
25 on the Property include the golf course and golf-related structures and facilities,
26 including a clubhouse/pro shop, restaurant, and maintenance facilities. I am not
27 aware of any valid monetary liens on the Property, which was purchased by KCM
28 with all cash, but there exists a lien recorded by the county which requires certain
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1 repairs to be performed on the restaurant facilities. Such repairs are the responsibility
2 of the lessee of the restaurant facilities, and I am in contact with the lessee and am
3 monitoring the progress thereon. The existing lien has been fully disclosed to the
4 proposed buyer Sunland Properties, Inc. ("Buyer"), arid will also be disclosed to other
5 potential purchasers/overbidders.
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4.
Upon taking control over the Glen Ivy Golf Course, I discovered an
7 overall lack of organizational and management oversight, including but not limited to
8 lack of bank reconciliations, business plans, due diligence materials, operating
9 budgets for the golf course, and the commingling of expenses with properties owned
10 by other Receivership Entities. In addition, although there were existing operations
11 personnel for the facility, these individuals lacked formal qualifications.
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5.
After obtaining Court-approval, I engaged an independent third-party
13 management company to improve operations and performance of the golf course, and
14 to prepare the property and obtain due diligence information necessary for a
15 traditional sale. I also engaged a third-party to improve the agronomy and
16 maintenance operations of the golf course and to improve the maintenance and utility
17 costs of the Property, all while maintaining the playability standards of a highly rated
18 Southern California golf course.
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6.
In anticipation of the sale, in July 2015, I commissioned several broker's
20 opinions of value ("BOV") for the Property, one of which ·was conducted by John
21 Knudson of Insight Land & Investments ("Insight"). In preparing its BOV, Insight
22 considered the specific characteristics of Glen Ivy Golf Course, including its
23 circumstances, market factors and customary valuation methods for golf courses of
24 this nature. The BOV concluded that the Property has a market value of between
25 $4,000,000 and $4,500,000, in line with the $3,900,000 offer submitted by Buyer.
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7.
Based on my review of available information, including the Property's
27 2013 and 2014 assessed values, the $6.5 million paid by KCM for the purchase of the
28 property in 2013 was not likely a market value for the Property at the time. In fact,
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1 supplemental tax bills received following KCM's purchase increased the real property
2 taxes by 37%, and the buyer for the Property preceding KCM's purchase had paid
3 only $4.6 million in November 2011. Meanwhile, the property's revenues decreased
4 from 2012 to 2013. Furthermore, recent market comparables also support the highest
5 and best offer presented by the Buyer, not the $6.5 million.
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8.
There is an ongoing dispute with the neighboring residential
7 development homeowner's association, the Trilogy Glen Ivy Maintenance Association
8 ("Trilogy"), over water rights. Glen Ivy Golf Course receives its irrigation water from
9 the Temescal Valley Water District ("District"); the irrigation water comes into the
10 golf course through the golf courses' water system ("Golf Course Water Lines"). The
11 same water lines provide water to the local neighboring Trilogy residential
12 development, which draws such irrigation water from the Golf Course Water Lines
13 for use on certain common areas as designated in an existing water agreement
14 recorded in the County of Riverside.
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9.
Under the water agreement, usage of water obtained through the Golf
16 Course Water Lines by Trilogy is restricted to certain defined common areas. I was
17 informed by Trilogy and the District that for many years, Trilogy has watered certain
18 avocado groves with potable water from the District. My counsel and I believe the
19 avocado groves are outside of the existing water agreement's defined common areas.
20 I was further informed that the District has now told Trilogy to discontinue this
21 practice and switch to irrigation water, and I understand from my discussions with
22 Trilogy that without putting in new infrastructure, Trilogy has no access to irrigation
23 water other than through the Golf Course Water Lines.
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10.
Trilogy has since requested expanding access to the Golf Course Water
25 Lines to irrigate the avocado groves and certain other areas not specifically designated
26 in the water agreement. Based on water usage data provided by Trilogy, the volume
27 of water for these new areas could nearly double the current use by Trilogy of the
28 Golf Course Water Lines. I have sought to address Trilogy's request over a period of
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. 1 many months, including providing them access to assess the possibility of such
2 expansion, but we have disagreed on one central issue in that I am not willing to allow
3 a large expansion of water service to Trilogy via the Golf Course Water Lines for
4 areas not designated in the water agreement, unless Trilogy agrees that ifthere were
5 water delivery cutbacks in light of the ongoing drought, this expanded water service
6 would be subordinate to the water needs of the golf course. I have also pushed for
7 Trilogy to contribute its pro-rata share of the maintenance and replacement costs
8 attributable to its usage of the Golf Course Water Lines and related pumping
9 equipment. Such equipment is impaired by Trilogy's usage thereof, however, Trilogy
10 does not currently contribute to any maintenance or replacements costs thereof.
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11.
Recently, Trilogy informed my counsel that it intended to come onto the
12 Glen Ivy Golf Course without my authorization to modify the existing Golf Course
13 Water Lines by installing submeters to allow for Trilogy's expanded irrigation use. I
14 instructed my counsel to move ex parte for a temporary restraining order prohibiting
15 Trilogy's unauthorized actions, but upon my counsel giving notice of the ex parte to
16 Trilogy's counsel, Trilogy indicated it would not enter the property until March 31,
17 2016 at the earliest. My Broker and I have, and will continue, to keep all prospective
18 purchasers appraised of this dispute. I wish to prevent further expenditure of
19 administrative expenses on the matter; however, if the sale does not close in March
20 2016, it may become necessary to seek injunctive relief until such time as the sale
21 closes and the buyer can address the issues with Trilogy.
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12.
In addition to the dispute with Trilogy, there may be a dispute regarding
23 certain pumping equipment for the Golf Course Water Lines. Pursuant to an existing
24 easement, the pumping equipment for the Golf Course Water Lines is located offsite
25 on property adjacent to the golf course. The equipment is specifically situated on the
26 boundary between two adjacent properties, which as I understand, one property is
27 used as a junk yard while the other is undeveloped land. My staff and I have been
28 informed by these property owners and their representatives that a dispute may exist
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1 as to exactly where the boundary lies between these properties and the validity and
2 scope of the existing easement for the pumping equipment. My staff, consultants,
3 vendors, management company representatives and/or I have informed these owners
4 (or owner representatives) of the anticipated sale of the Property, but as of the date of
5 this filing, have not received any indication that these parties intend to oppose the
6 proposed sale. My staff and I have further disclosed the potential dispute to the Buyer
7 and other prospective bidders, none of whom have expressed any significant concern,
8 and will continue to keep these parties appraised of the potential dispute through the
9 close of sale. Prospective bids for repair of several water features located throughout
10 the Property have also been provided to prospective buyers.
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13.
In anticipation of a possible sale of the Property, my staff and I
12 interviewed a number of experienced commercial real estate brokers and solicited
13 proposals to act as broker for the marketing and sale of the Property. Specifically, I
14 received responses from five separate commercial real estate brokers, including Mr.
15 Knudson at Insight, who has extensive experience in marketing and selling
16 comparable commercial real properties, notably golf courses. Of the five brokers,
17 Insight agreed to the lowest rate for commission of 4%, regardless of whether the
18 buyer is separately represented by other brokers. Each of the other brokers proposed
19 higher commission rates, and only one other broker offered to accept a commission of
20 4% but required that commission be increased to 6% ifthe ultimate buyer is
21 represented by a separate broker. This broker was also based out of Florida and
22 would be unable to efficiently and personally service the transaction on a day-to-day
23 basis. To properly service California-based buyers, Insight agreed to work with W
24 Realty Group ("Broker"), who is a local, licensed California broker with experience in
25 marketing and selling comparable commercial real properties. Accordingly, I entered
26 into an agreement with Broker as my broker for the proposed sale of the Property.
27 Insight then took the lead on marketing to out-of-state buyers and will be
28 compensated by Broker directly. The agreement limits total broker commissions to
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1 4%, and compensation for cooperating brokers, including Insight, will be paid for by
2 Broker. Based on my experience in real estate transactions, and in light of the
3 challenges presented, the amount of commission requested by Broker is commercially
4 reasonable and consistent with the real estate industry standard for sales of similar
5 commercial property, and was fully negotiated after consideration of the terms
6 proposed by the other brokers. A true and correct copy of an Exclusive Sales Listing
7 Agreement, reflecting my agreement with Broker, dated September 1, 2015, which is
8 subject to Court-approval, is attached hereto as
9 Exhibit 1.
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14.
Following my engagement of Broker, Broker, I and my staff engaged in
11 diligent efforts to market the Property for sale through commercially reasonable and
12 customary channels. Specifically, with assistance from Insight, the Property was
13 introduced by Broker to more than 3,000 prospective purchasers through a national
14 email campaign. Broker also created a list of prospective purchasers from existing
15 golf course owners and investors in Southern California, and reached out to these
16 owners and investors to solicit interest in the Property. Broker followed up with
17 respondents and provided prospective purchasers with due diligence materials after
18 securing customary non-disclosure agreements. A due diligence "war room" was
19 created and was populated with a significant amount of due diligence materials
20 including a form purchase and sale agreement. Prospective, qualified buyers were
21 given more than 90 days to review the same and to inspect the Property. The Property
22 was also placed on Loopnet.com, one of the leading online platforms for marketing
23 commercial real properties, and was also placed on Broker's websites for circulation.
24 Through Loopnet, the Property was also advertised on national and local partner web
25 sites, including the New York Times, Los Angeles Times, Chicago Tribune, Boston
26 Globe, and Washington Post, resulting in up to 815 searches within the last 30 days of
27 such advertising.
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15.
As a result of the marketing and sale efforts, serious inquiries were
2 received from 31 individual groups of investors, 30 of whom signed non-disclosure
3 agreements and 17 of whom were provided access to the due diligence materials for
4 the Property. Ultimately, letters of intent were received in response to the Broker's
5 Call for Offers from several parties, including Buyer. In response to the multiple
6 responses, I directed a request for a highest and best offer from each prospective
7 purchaser. In response, several parties submitted their highest and best offers, one of
8 which was subsequently rescinded. Buyer's offer was the highest and best qualified
9 offer received at $3,900,000. I accepted its offer, subject to Court approval, as
10 reflected in a Purchase and Sale Agreement and Joint Escrow Instructions dated
11 January 4, 2016 ("PSA"). A true and correct, fully executed copy of the PSA is
12 attached hereto as Exhibit 2.
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16.
With the assistance of Broker, I and my staff are continuing to market
14 the Property with the goal of promoting active overbidding in accordance with the
15 overbid procedures described in the Motion. To date, and in addition to the other
16 parties that submitted letters of intent, including the Buyer, two other parties have
17 expressed interest in participating in the overbid process.
18
1.7.
Based on my review of the Property and its circumstances as described
19 herein and in my Motion, I believe in my reasonable business judgment that the
20 proposed sale of the Property to Buyer, subject to overbid, is fair and reasonable, in
21 the best interests of the receivership estate, and will generate the highest and best
22 value for the Property.
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18.
Based on the above, I recommend and respectfully request that this Court
24 grant this Motion and issue an Order approving and authorizing: ( 1) sale of the
25 Property to Buyer or the highest bidder; (2) the proposed overbid procedures; and (3)
26 payment of the proposed 4% commission to Broker from the sale proceeds.
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T declare under penalty of perjury under the laws of the State of California that
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KRISTAL. FREIT
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EXHIBIT 1 ·
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September 1, 201~
Krista L, Freitag
E3 Advisors
355 S. iliand Avenue, Suite 2450
Los Angeles, CA 90071
RE:
THE GoLll CLUB A1' GLEN IVY, CORONA, CA
Dear I.\rista:
~is
lette! will serye as the E~olusive Sal~ Listing A&reeinent between 'fh.e W Realty. Gr<>qp
( 'B~oker?') and Knsta L, Freitag, solely i;n her oapacl!Y ~ receiver appointed for ~n9doin
Capital Market, LLC ("Seller") by the Dinted States District Court for the Central D1:stnct of
California ("Court") in the ,case entitled SEC v. World Capital Market, Inc. ei al. Case No, 14-cv~
02334-JFW-~W. regardmgthe sale of the above referenced property.
The Broker ls hereby appoint.ed as sole and exclusive agent, for the above-named property
located in Corona, California, for a period of time ("the Agency tenn"), commencing September
LJQli and expiring on February 19. 2016, Tne Broker is authorized to seek purchasers. for the
Property at .a sale and purchase pr1ce of Four Million Seven Hunfiled Fifty Thousand
($4,750,000},
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The terms for the abCJve. . refeix:nced listings shall be as follows:
1.
Best Efforts:
It is agreed that the Broker will enlist the best efforts of its
firm and, in particular, Thomas Joseph Williams its
Califqmia Real ES.tate Broker, in an effort to secure a
purchaser satisfacto.ry to the Se11er. Insight Land &
Investments and in partlcular1 Roger Garrett and I on
Knudson. will be engaged as Consultants to Broker.
· Broker will cooperate with other real estate brokers and
may negotiate any commi$ion. -split. 01 referral fees it
deems appropriate.
·
2,
Inqufries and
Negotintions:
All inquiries and offers received' by the Seller shall oo
referred to the Broker, and negotiations shall be conducted
by the Broker or under the Seller's direction,
subject to
Seller's fmal &pproval and subject to Seller1s reservation
of the right to hecome directly involved in negotiations
soould tb.e Seller determine that to be in the Seller's best
interest.
3.
Delivery of Offe~:
All offotsreceivcd by the Broker shall be delivered to the·
4.
Commission Payments1
Subject to Court App.wval, Seller agrees to pay the Broker
a commii;sio11 in the amount ot four percent (4. 0%) of the
accePted ~ales Pric~, ~eller shall ,seek ~ourt Appr~val of
the 4.0o/o cott)J:ll1ss1on m ccmnection with her motion for
Seller within one (1) busine$S day after receipt of same,
Exhibit 1
Page 9
#:8555
approval, of tne s~e. t~~ti0:~ ;aro~~r s1UU.l pay any .
cooperating comruts$1on J)Uf ofthis-4 .{)II/I! ~qmm.1~s1ot1,
The Seller shall pay such. commission out of esorow.,a:t the
closing and the commissfon: shall become due even if the.
closing occurs after the expiration of the ag~cy term,
5,
Price Change:
The Seller shall ~ entit1ed fo ~1).ange the sale pifoe
acceptable tt> Seller at any time \ipon giving written notice
to Broker spec,ifying the change. Broker ncknowtedges
that· it has n0o authority what.'Joevet to bind Seller !(> any
contractual or other obligations.
.
Any to\ltS of the pm~rty by a :pros.pectlve purchaser will
be arranged through Seller; however Brok~r will conduct
the to\tr of the property.
7.
Offering MateriaJs1
The Broker shal{ vncferwiit{! and prepare a marketing
paclmge in connectiort with the property. All oosts and
expenses of preparing the marketing package shall be
borne by the Broker. Broker shall present the marketing:
package to Seller for Seller's review and approval prior to
distributin~ same.
8.
Suooe.s~ra mtd
A~signs:
·
This agency s1w11 be binding uP?n the parties he~fo and
their respective successors, drstributee~. executors and
assigns,. provided, however, that this agell(;y sbnll not be
assigned or transferred by Brcyker wltliont Seller's prior
written c-0nsent,
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9.
Foos and CCtsts:
In the event either party must employ legal
cou~I' to
enforce 'the rights heteunder. then the prevailing party
shall be entitled to reimbursement of all fel;lS and oosts,
includ~ng reasonable attorneys' foes as a result thereor.
In ttddition, subject to Co'm ilPJ~roval, Sell¢r agi-~s. to
reimb~ .Broker for .an.y travel expenses incun'ed by
Brok~r in the execution af his duties Ullder this listing not
to exceed $1.500. Copies of reodpts for expenses wnt be
prtvi<led by Broker upon request. ff.Broker i$ sliC®ssfi.ll
m selling the Property, SeUer w.m receive at closing a
credit against the commission due for the amount. of
ell:pe1llle5 actually paid to the Brpker pursuant to this
paragraph.
10. Dual Agency:
Seller acknoWiedges that the Bmker may represent
pmspeiiive purchasers. Seller desires that the property be
presented to such persons or entities and consents· to th~
dual .representati1Jn created thereby. Broker shall not
disclose the '!.<mf!dentfo.l infonnation of one princitml to
the other and will deal with both parties honestly and
fuirly.
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Exhibit 1
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Seller further agrees tlmt Seller shall pay Broker a
t;Ommission in accordance with the: Schedule if, within
FortywFive (45) calendar days after the expiration or
te.nu:b:iation ofthe Agernsy Ter.tlli tbc property ls sold ~o, or
Seller enttirs int:o a contract <>f sale oftb.e property: with~ or
negotiations continue, resume or <:ommence and tl)ereafter
continue leading to a sale of the J)ti)perty to any person or
entiD' (including his/he1:/ljs sucoessm~ Msigns or
affibates) with whom Br-0ker has negotiated (either
directly or through another broker ·-0r a.gent) or to whom
1he propeey has been subn'l.itted prior to the expiration or
termination of the Agency TeNrt. The Broker is authorized
to continue negotiations with such persons or entities, The
Broker agrees to submit a list of such persons or entities to
Seller no later tltan fifteen (U) calendar <lays following
th~ cxpirntion or termination t>f the Agency Tenn
provided, however? . 1bat . if a written ofter has b~n
submitted during the Agency Tenn, then it shall not~
. necessary to include the. offero:t's name oil the list
11. Sale After Li&ting
Expiratiom
12.
Seller Disclosure-~
Seller agrees .to disclose t\l Broker and to prospective
purchasers any and all l11forma:tion which Seller bas
regllrding present and future Z<'Jnjng and environmental
ma~rs affecting the Property and regarding th cs oondition
of the Property, inclUdlng, but not limite4 to structural,
mechanical and solJs conditfons, th~ pn~senoe and location
of asbestos, PCB transformers. other toxio, bazardous or
oontaminated substances, and underground storage tanks, ·
in, on, or about the Property, Broker is authorized to
disclos\!: any such infonnatiori: to prospeotive pu!ehase1s or
tenants.
13.
Court Approval
As noted above, alt commissions, fees, and costs payable
to l3mker hereunder are conditioood on approval by the
Court and, once so approved, &llall b~ the sole obligation
of the roo::iveniliip estati::.. Krista Freitag.. .in her personal
cava.;:ity., E3 Realty Advisoa>, and their agents, employees,
and rounsel shall have no payment obligatfons. hereunder
whatsoever.
Tftis agreement may be terminated. at Seller's sole
discretion upon 30 days notice to the buyer,
14. 1'erruinafion ·
Very truly yours,
Thomas Joseµh Williams ·
The W Realty Group
CA .BRE LICENSE# 0 l.509747
Approve<l and Accepted this
~..di
.,.,,__..,.~~--
,2015
Exhibit 1
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By:
£_~Jd/~
Its:
Bmker,=rh W !Z&\~6~
day of
, 2015
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By:
!ts:
fu?aL~
-&10. ~~ fuew,(Z_
Exhibit 1
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PURCHASE.AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW
INSTRUCTIONS (the 11 Agreement 11 ) is entered into as of January 04, 2016 (the "Effective
Date''.) by and between Sunland Properties, Inc. ("Buyer") and KINGDOM CAPITAL
MARK.BT LLC, a Delaware limited liability company (' 1Seller 11), by and through Krista L.
Freitag ( 11 Receiver 11 ), solely in her capacity as Receiver in the case entitled Securities and
Exchange Commission v. World Capital Market Inc., et al., United States District Court for the
CentraJ District of California (the 11 Court 11 ), Case No. 14-cv-2334 JFW-MRW (the
"Receivership Action'1).
ARTICLE!
PURCHASE AND SALE
1.1
Agreement of Purchase and Sale. Pursuant to that certain Temporary
Restraining Order and Orders (I) Freezing Assets, (2) Prohibiting Destruction of Documents,
(3) Granting Expedited Discovery, (4) Requiring Accountings, (5) Authorizing Alternative
Shvice, (6) Repatriating Assets and (7) Appointing a Temporary Receiver, and Order to Show
Cause Re: Preliminary Injunction and Appointment of a Permanent Receiver (the "TRO")
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entered on Maich 27, 2014 by the Court with respect to the Receivership Action, Receiver was
appointed temporary receiver for World Capital Market Inc., WCM777 Inc., and WCM777 Ltd.
d/b/a WCM777 Enterprises, Inc., as "Defendants," and Seller, Manna Holding Group, LLC,
Manna Source International, Inc., WCM Resources, Inc., and their subsidiades and affiliates as
"Relief Defendants" (collectively, the "Receivership Entities"). On April 10, 2014, the Court
entered a Preliminary Injunction Order (the "Preliminary Injunction"), which included ·
appointment of the Receiver on a permanent basis. On May 21, 2014, the Court entered a
Preliminary Injunction Order against Vincent Messina, International Market Ventures, ToPacific,
Inc., and To Pacific, Inc. as additional "ReliefDefendants 11 and expressly appointed the Receiver
with respect to ToPacific, Inc. and To Pacific Inc. (the "ToPacific Order"). Hereinafter, the
TRO, the Preliminary Injunction and the ToPacific Order shall be collectively referred to as the
"Orders. 11 Seller, as one of the Receivership Entities, agrees to sell the Property (as defined
below) to Buyer, and Buyer agrees to purchase the Property from Seller, subject to the terms and
conditions set forth in this Agreement.
1.2
For purposes of this Agreement, the "Property" shall mean and include in its
present "AS~IS", "WHERE IS" condition, all of Seller's right, title and interest in and to the
following:
(i)
that certain land improved with an 18-hole, links-style, regulation golf
course, driving range, practice facility, clubhouse and refated,amenities commonly
known as Glen Ivy Golf Club (the "Golf Course") located and addressed at 24400
Trilogy Parkway, Corona, California 92882, and situated on the land more particularly
described in Exhibit 11 A 11 attached hereto and incorporated herein by this reference (the .
"Land'');
837305,0 I/SD
3740 I 0-0000S/l-S-16/jl!Qll
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(ii)
any and all rights, privileges and easements a_P,purtenant to the Land and
·owned by Seller, incli+ding, without limitation, development rights, air rights, water,
water rights, riparian rights and water stock relating to the Land and rights-of-way or
other appurtenances used exclusively in connection with the beneficial use and
enjoyment of the Land (collectively, the "Appurtenances");
(iii)
subject to the rights of any tenants under the Leases and third parties for
Special Events (as defined in Section 6.6(e) below), all improvements and fixtures
located on the Land, including, without limitation, those certain clubhouse facilities
located upon the Land, which includes a pro shop, restaurant and bar, that certain golf
cart storage and maintenance facility also located upon the Land, as well as any other
bui !dings and structures located on the Land and all on-site parking structures or spaces
(collectively, the "Improvements" and together with the Land and the Appurtenances,
the "Real Property");
(iv)
any and all tangible personal property including, by way of example and
not by limitation, all apparatus, equipment, computer equipment, software, furniture,
appliances, food, beverage, Ilnen or other inventory owned by Seller and/or located on or
in and used in any way in connection with or.related to the ownership, use, operation or
maintenance of the Real Property, as such items are described on Exhibit "B" attached
hereto and incorpoi'ated herein by this reference (the 11 Personal Property11 );
(v)
all rights of Seller under any leases, subleases or occupancy agreements
affecting the Real Property (11Leases 11 ) whether or not of record, which provide for the
use or occupancy of space or facilities on or relating to the Real Property and which are
. in force as of the Closing Date (as defined below) for the Real Property, which Leases
shall include, without limitation, (i) that certain Restaurant Concessions and Lease
Agreement dated June 1, 2014 by and between Seller, as "Landlord," and Z Golf Food &
Beverage Services, LLC, a California limited liability.company, as "Tenant" and (ii) that
certain Lease Agreement by and between Global FX Investments, Sellds predecessor-ininterest, as "Landlord," and ValleyCrest Landscape Maintenance, Inc,, a California
corporation, as "Tenant," as amended;
(vi)
all.accounts receivables which become due and payable after the Closing
(defined below) (the "Post-Closing Receivables");
(vii) all rights of Seller under equipment leases, service contracts, utility
contracts, water agreements, maintenance contracts, membership agreements, priority tee
time agreements and other similar agreements affecting the use and operation of the Golf
Course in effect as of the Effective Date that relate in any way to Seller's operation of the
Property~ which contracts are listed on Exhibit 11 C11 attached hereto and incorporated
herein by this reference (the 11 Contracts") and include, without limitation, that certain
Golf Cart Lease Agreement dated March 8, 2013 (the "Golf Cart Lease 11 ) by and
between Dae Yang USA, Inc., Seller's predecessor-in-interest, as "Lessee," and PNC
Equipment Finance, LLC, a Delaware limited liability company ("PNC''), as "Lessor, 11
for the lease of certain "E-Z-00 11 golf ca1ts, as more particularly described in the Golf
Cart Lease;
·
837305.01/SD
3740 I0-00005/l ·5· I 6/jlVjll
·2-
Exhibit 2
Page 14
.. i
. I
#:8561
(viii) all permits, licenses, registrations, certificates, variances, consents,
authorizations, governmental approvals and other entitlements necessary for the
ownership, use; operation or maintenance of the Real Property or otherwise relating in
way to the Real Property (the "Perinits 11), provided that such Permits shall only be
included within the Property and transferred to Buyer to the extent such Permits are
transfenable under applicable law and under the ownership and control of Seller;
any
(ix) any warranty or guaranty rights relating to the Real Property or the
Personal Property (the "Warranties"); and
(x)
all of Seller's trademark and/or trade name rights, rights to the name 11 Glen
Ivy Golf Club" and all other names used, and all title ·and interest in and to any and all
intellectual prope1ty which relate to the Ptoperty", each as they rnlate to the ownership,
use or operation of the Property, to the extent owned by Seller; and any other intangible
personal property owned by Seller and/or used in 0r related to the ownership, use,
operating or maintenance of the Real Property (the "Intangible Property"). As used
herein, "Property" does not include any of Seller's liabilities of any kind whatsoever
(other than those specifically listed) including but not limited to: Seller's liabilities and
obligations arising out of or resulting from the ownership of any of the Property before
the Closing, including without limitation, all trade accounts payable incumd in the
comse of Seller's business prior to the Closing; Seller's liabilities and obligations for
prorated taxes for the period prior to the Closing; Seller's liabilities and obligations to any
of Seller's employees or: coruultants through the close of business on the Closing Date,
whether or not the employee or consultants are hired by Buyer; Seller's liabilities and
obligations to any current or former partner or officer of Seller or of any affiliate of
Seller; Seller's liabilities and obligations under this Agreement; and Seller's liabilities and
obligations arising out of or resulting from any act or omission of Seller after the Closing.
1.3
Opening of Escrow. Buyer and Seller have opened an escrow with Chicago Title
Company, Attention:
(the "Escrow Holder") under Escrow No. _ _ _ _ __
("Escrow"). Escrow Holder shall execute the Escrow Holder Signature Page attached hereto and
return one fully executed original of this Agreement and the Escrow Holder Signature Page and
the Broker Signature Page to each of Seller and Buyer. The purchase and sale of the Property
shall be consummi,tted through the Es~row in accordance with the instructions contained in this
Agreement.
.
'
1.4
Closing Date. The closing of the purchase and sale of the Property (the
"Closing" or "Close of Escrow") shall occur on or before ten (10) business days following the
Court Approval Date (as defined below) (the "Closing Date"). On the Closing Date, TIME
SHALL BE DEEMED OF THE ESSENCE with respect to Buyer's obligation to close. For
purposes hereof, the "Court Approval Date" shall be the date the Court enters the Auction
Confirmation Order, as described in Section 15, below.
837305,0!fSD
374010-00005fl+l6fjllfj!J
-3-
Exhibit2
Page 15
#:8562
ARTICLE2
PURCHASE PRICE
2.1
Purchase Price. The purchase price for the Property shall be Three million nine
hu.n.dred thousand and No/100 Dollars ($3,900,000.00) (the "Purchase Price") which shall be
subject to an Auction (as defined~ Section 15.1, below) pursuant to Section 15 hereof.
2.2
follows:
Payment of the Purchase Price. Buyer shall pay the Purchase Price to Seller as
(a)
No later than three (3) days after the Effective Date, :Buyer shall deposit
.
with Escrow Holder, in cash, certified or bank cashier's check made payable to Escrow Holder,
or by a con.finned Federal Reserve wire transfer of funds (hereinafter referred to as
"Immediately Available Funds"), an amount equal to three percent (3 %) of the Purchase Price
(with all interest earned thereon, the "Earnest Money peposit") .. The Earnest Money Deposit
shall be nonrefundable to Buyer except in the event: (i) of Seller's default under this Agre~ment,
as set forth in Section 6.3(a)(ii), below; or (ii) Seller is not the High Bidder (as defined in
Section 15 .5, below) or the Court otherwise fails to approve the sale of the Property to Buyer,
Escrow Holder shall invest the Earnest Money Deposit in an interest~bearing account pursuant to
the provisions of Section 2.3(a) below.
. (b) · In the event the Closing under this Agreement occurs, then the Eamest
Money Deposit shall be credited against the Purchase Price at Closing. In the event the Closing
under this Agreement shall fail to occur, then the Earnest Money Deposit shall be nonrefundable
except as expressly set. forth in Section 2. 2(11) above.
(c)'
At least one (1) business day prior to the Closing Date, Buyer shall deposit
or cause to be deposited .with Escrow Holder, in Immediately Available Funds, the balance of the
Purchase Price and all other amounts payable by Buyer pursuant to this Agreement into Escrow'.
2.3
Escrow P.rov.isions Regarding Earnest Money Deposit
(a)
Eserow Holder shall hold the Earnest Money DepoSit and make deliyery
of the Earnest Money Deposit to the party entitled thereto under the terms of this Agreement.
Escrow Holder shall invest the Earnest Money Deposit in an interest~bearing account maintained
at a federally insured bank or savings and loan association as approved by Seller and Buyer, and
all interest and income thereon shall become part of the Earnest Money Deposit and shall be
remitted to the party entitled to the Earnest Money Deposit pursuant to this Agreement.
· (b)
Escrow Holder shall hold the Earnest Moµey Deposit until the earlier
occurrence of (i) the Closing Date, at which time the Earnest Money Deposit shall be applied
against the Purchase Price, (ii) Buyer's failure to close the transaction contemplated hereby or
breach of its obligations hereunder, in which event Seller may terminate this Agreement 'and
Escrow Holder shall disburse the Earnest Money Deposit to Seller, plus accrued interest thereon,
upon Escrow Holder's receipt of written notiee from Seller confmning such failure to close or
breach by Buyer, or (iii) in the event Seller is not the Hi~ Bidder. or the Court otherwise fails to
approve the sale of the Property to Buyer. The tax identification numbers of the parties shall be .
furpished to Escrow Holder upon request.
837305.01/SD
374010-0000S/ 1-!S-16/jll/jll
.4.
Exhibit2
Page 16
#:8563
(c)
Intentionally Omitted.
(d)
The parties acknowledge that Escrow Holder is acting solely as a
stakeholder at their request and for their convenience, and that Escrow Holder shall not be
deemed to be the agent of either of the parties for any act or omission on its part unless taken or.
suffered in bad faith in willful disregard of this Agreement or involving gross negligence, Seller
and Buyer jointly and severally release Escrow Holder from any and all liability for costs, claims
and expenses, including reasonable attorney's fees, incutTed in connection with the performance
of Escrow Holder's duties hereunder, except with respect to actions or omissions taken or
suffered by Escrow Holder in bad faith, in willful disregard of this Agreement or involving gross
negligence on the part of the Escrow Holder .
. (e)
The parties shall deliver to Escrow Hold.er an executed copy of this·
Agreement, which shall constitute the sole instructions to Escrow Holder. Escrow Holder shall
execute the signature page for Escrow Holder attached hereto with respect to the provisions of
this Section 2.3; provided, however, that (i) Escrow Holder's signature hereon shall not be a
pterequisite to the binding nature of this Agreement on Buyer and Seller, and the same shall
become fully effective upon execution by Buyer and Seller, and (ii) the signature of Escrow
Holder will not be necessary to amend any provision of this Agreement other than this
Section 2.3.
(f)
Escrow Holder, as the person responsible for closing the transaction
within the meaning of Section 6045(e)(2)(A) of the futernal Revenue Code of 1986, as amended
(the "Code"), shall file all necessary information, reports, retums, and statements regarding the
transaction requited by the Code including, but not limited to, the tax teports required pursuant
to Section 6045 of the Code. Further, Escrow Holder agrees to indemnify and hold Buyer,
Seller, and their respective attorneys and btokers and Broker (as defined in Section 14.1 below)
harmless from and against any losses resulting from Escrow Holder's failure to file the reports
Escrow Holder is i-equired to file pursuant to this section. ·
(g)
The provisions of this Section 2.3 shall survive the termination of this
Agreement, and if not so te1minated, the Closing and delivery of the grant deed to Buyer.
ARTICLE3
CONDITION OF TITLE
3.1
Approval of Title, Buyer hereby acknowledges that Buyer has received the Title
Documents (as hereinafter defined) prior to the Effective Date and. approves of all matters ·
contained therein. As used herein, "Title Documents" shall mean collectively that certain
preliminary title report for the Land dated as of August 28, 2015 and bearing Title No.
12203378"993-USO (the "Title Report") prepared by Chicago Title Company (the "Title
Company") and certain hyperlinked copies of exception documents referred to in Schedule B of
the Title Report.
3;2
Title Policy. Either a CLTA or ALTA Owner's Title Insurance Policy (the '.'Title
Policy") shall be issued by the Title Company as of the Closing Date. The Title Policy shall be a
CLTA Owner's Title Insurance Policy unless Buyer elects, by appropriate escrow instructions to
837305.01/SD
3740I0-00005/1+1 G/jll111
Exhibit 2
Page 17
-- I
#:8564
the Title Company, to cause the Title Company to issue an ALTA Owner1s Title Insurance
Policy in place of the CLTA Title Policy. If Buyer elects to have an ALTA policy issued, Buyer
shall pay the premium for said ALTA Policy in excess of the costs and premium that would have
been incurred for a CLTA Policy, and such election shall in no event extend the Closing Date. In
addition, Buyer shall obtain at its sole cost any survey required in connection with the ALTA
Policy and any endorsements requested by Buyer, and Buyer shall be solely responsible for the
Title Company's acceptance of such survey. The Title Policy shall b'e in the amount of the
Purchase Price and shall insure fee title to the Land in Buyer.
3.3
Disclaimer of Title, Warranty. Nothing in this Agreement shall be construed as
a warranty or representation by Seller, either express or implied, concerning Seller's title to the
Land, and Seller malces no such warranty or representation (and Buyer·aclmowledges that Seller
is only in possession of the Land and does not and have not at any time owned title to the Land).
Buyer is relying solely upon the Title Report, the Title Policy and the grant deed from Seller to
Buyer recorded at closing and Buyer's own Inspections (as defined in Section 4.l(a) below)
respecting title to the Land,
ARTICLE4
BUYER'S DUE DILIGENCE; PRE-CLOSING .OBLIGATIONS
4.1
Due Diligence Investigations.
(a)
Contingency Date. Buyer1s obligations under this Agi·eement are subject
to Buyer's approval or disapproval provided to Seller by written notice on or before January 8,
2016 (the 11 Contingency Date11 ) of the condition of the Prope1ty. In connection with Buyer's
approval or disapproval of the condition of the Property, Buyer and Buyer1s agents, contractors,
engineers, surveyors, attorneys, and employees or any other party in connection with any
inspections conducted by or for Buyer (11 Consultants 11 ) shall have the opportunity, at their sole
cost and risk, to inspect the Property (including the environmental and other aspects of the
physical condition of the Land) and investigate and study the operations of the Property and the
feasibility of acquiring and developing the Property (such investigations collectively hereinafter
referred to as 11 Inspections 11) prior to the Contingency Date. Buyer1s approval or disapproval
pursuant to this Section 4.l(a) may be made at Buyer's sole and absolute discretion. Ill the event
of Buyer's disapproval under this Section 4. l(a), this Agreement shall be and be deemed
terminated and, other than those matters which expressly survive the tennination hereof, neither
party shall have any further rights or obligations hereunder, Buyer1s failure to provide written
notice to Seller pl'ior to the Contingency Date regarding Buyer's approval or disappi;oval of the
Property shall' be deemed Buyer1s approval of the Property. ·
(b)
Mechanic's Liens. Buyer shall not permit any mechanic's 01·
materialmen 1s liens or any other liens to attach to the Property by reason of the perf01mance of
· any work or the purchase of any materials by Buyer and its Consultants. The provisions of this
paragraph shall survive the termination of this Agreement, and if not so terminated, shall survive
the closing of the Agreement and delivery of grant deed for the Property.
Property Contracts. Within three (3) days after the Effective Date,
( c)
Buyer may deliver written notice to Seller (the 11 Property Contracts Notice 11 ) specifying any
837305,01/SD
3740I0-0000511+16/jJ!/jll
-6-
Exhibit 2
Page 18
#:8565
Property Contracts (as hereinafter defined) which Buyer desires to continue at the Closing (the
"Assigned Property Contracts"), to the extent any such Prope1ty Contracts are assignable to
Buyer. For purposes of this Agreement, "Property Contracts" means all contracts, agreements
(including, without limitation, all water agreements and other contracts relating to water rights
and obltgatlons associated with the Property), equipment leases, purchase orders, maintenance,
service and similar contracts, excluding Leases, which relate to the ownership, management,
maintenance, construction or repair and/or operation of the Property, whether or not assignable
by their terms, which current Property Contracts affecting the Property are set forth on
Exhibit "C" attached hereto and incorporated herein by this reference, If Buyer fails to deliver
the Property Contracts Notice in accordance with the tenns herein, there shall be no Assigned
Property Contracts and Seller shail use reasonable efforts to terminate all Property Contracts at
the Closing, To the extent that any Property Contract being assumed by Buyer·is assignable but
requires the applicable vendor to consent to the assignment or assumption of the Prope1ty
Contract by Seller to Buyer, then, prior to the Closing, Buyer shall be responsible for obtaining
from each applicable vendor a consent (each a "Required Assignment Consent") to the
assignment of the Property Contract by Seller to Buyer (and the assumption by Buyer of all
obligations under such Property Contract), Buyer shall indemnify, hold harmless and, if
requested by Seller (in Seller's sole discretion), defend (with coun'sel approved by Seller) Seller
from and against any and all losses arising from or related to Buyer's failure to obtain any
Required Assignment Consent. In addition, notwithstanding anything to the contrary contained
in this Agreement, Buyer hereby acknowledges and agrees that Buyer shall be solely responsible
for any termination fee, penalties or other costs incurred by Buyer and/or Seller in connection
with the termination or modification of any existing Prope1ty Contracts from and after the
·
Effective Date,
4.2
Right of Entry.
(a)
Buyer's Right of Access. Until the Closing Date or, if sooner, the date
this Agreement is terminated, Buyer shall have a limited, non-exclusive license to enter upon the
Land, at Buyer's sole cost and· expense, in order to conduct such Inspections of the Property as
Buyer deems necessary or desirable; provided, however, that Buyer shall restore any damage
done to the Property in connection with any such fuspections 'performed by or on behalf of ·
Buyer, B\,\yer's right of entry shall be subject to Seller's prior written approval, following Seller's
receipt of written notice from Buyer by e-mail or fax (at the e-mail address or facsimile numbers
listed in Section 14.2 below) of any such request giving the proposed time of entry, its
approximate duration and a description of the specific nature of the entry, test, investigation or
other matter, together with the parties that will be present. Seller's written approval may be
evidenced by an e-mail or fax back to Buyer (at the e-mail address or facsimile number listed in
Section 14.2 below) approving the request. Buyer shall permit Seller to have a representative
present during all Inspections conducted with respect to the Property. Buyer shall use best .
eff01ts to minimize disruption to any person or entity entitled to occupy any portion of the Land
and ,4nprovements under a Lease ("Tenants") in connection with Buyer's or its Consultant's
activities pursuant to this Agreement. No consent by Seller to any such activity shall be deemed
to constitute a waiver by Seller or assumption of liability or risk by Seller. Buyer hereby agrees
to restore, at Buyer's sole cost and expense, the Property to the same condition existing
immediately prior to Buyer's exercise of its rights pursuant to this Section 4.2(a), Buyer shall
comply with all applicable laws and governmental regulations applicable to the Property E!11d
837305,0l/SD
3 740 I 0·00005/J ·5-16/jlltjll
-7-
Exhibit 2
Page 19
#:8566
shall indemnify, defend, protect and hold harmless Seller and the Property from any and all
claims (known or unknown), liabilities, damages and costs, including, without limitation,
attorneys' fees and costs, arising out of any entry onto the Land for purposes contemplated herein
by Buyer or its representatives, employees, Consultants or designees; provided, however, that
Buyer shall not pursuant to this Section 4.2Ca) be obligated to indemnify, defend, protect or hold
harmless Seller or the Property from claims, liabilities, damages or costs arising out of any:
(i) acts or omissions of Seller, its agents or representatives; (ii) latent defects in the Land or
Improvements; or (iii) hazardous or toxic substances or industrial hygiene in violation of any and
all applicable environmental laws not brought onto the Land by B4yer or its agent~ or
representatives, except if and to the extent Buyer exacerbates or worsens the condition,
(b)
Insurance Requirements. As a prior condition to any entry onto the
Land (and for purposes hereof, any environmental inspections or soils tests shall not be
considered routine inspections), Buyer shall maintair;t and cause its agents and Consultants to
maintain and keep in effect (a) commercial general liability insurance naming Seller as an
· additional insured, with limits of not less than $3,000,000.00 property damage, bodily injury or
death and (b) worker's compensation insurance for all of its employees in accordance with the
law of the State of California. Prior to Buyer's or its Consultants' entry onto the Property, Buyer
shall deliver to Seller certificates of insurance evidencing s.uch coverage and further evidencing ..
that such coverage may only be titrminated or modified upon not less than thirty (30) days prior
written notice to Seller. The provisions of this paragraph shall survive the termination of this
Agreement, and if not so terminated, shall survive the closing of this Agreement and delivery of
grant deed for the Property.
·
4.3
Documents. In the event this Agreement is terminated for any reason (including
due to either party's default), Buyer shall immediately deliver to Seller, at no cost to Seller, the
originals (or copies if the originals are not available) of all studies, tests, surveys, applications,
maps, agreements, plans and other documents related to the Property in Buyer's possession or
control, whether previously delivered to Buyer by Seller and any rep01ts, studies 01· other
information prepared or compiled for Buyer by any Consultant or other third-party in connection
with Buyer's investigation of the Property ("Third-Party Reports") obtained by Buyer in
connection with its investigation and analysis of the Property, and, upon written request of
Seller, Buyer shall assign to Seller, AS-IS and without representation or warranty as to accuracy
or completeness, and subject to the proprietary rights of any third party consultants and any
limitations imposed by them, all right, title and interest of Buyer in and to all or any portion of
such documents as specified by Seller; provided, however, that this Section 4.3 shall not apply
to: (a) confidential information; (b) any information subject to a legal privilege (including,
without limitation, legal memoranda); or (c) accounting and financial information (including,
without limitation, financial models regarding the Property). The provisions· of this Section 4.3
shall survive any termination of this Agreement.
4.4
Escrow Cancellation Charges'. In the event the Escrow shall fail to close by
reason of a party's default, the defaulting party shall be.liable for all Escrow cancellation charges,
including but not limited to the costs of the title examination, Title Commitment ancl escrow fee.
In the event the Escrow shall fail to close ct'ue to the failure of a Closing condition set forth in
Section 6.3 that is not caused by a default of one of the parties, each party shall pay one-half
(1/2) of any Escrow cancellation charges,
83730S.Ol/SD
37401 O-OOOOS/1·5·16/jll/jll
-8-
Exhibit2
Page 20
#:8567
.
4.5
Pre-Closing Obligations. [n the event that Buyer has approved of the Prope1ty
on or prior to the Contil;igency Date, then the pa1ties shall thereafter be obligated to proceed as
follows:
.
(a)
Golf Cart Lease. Not more than five (5) days after the Contingency Date,
Buyer shall submit to PNC a complete application to assume the Golf Cart Lease in such form
and with such suppotting financial information and such other documents and information a.ii
may be reasonably required by PNC in order to obtain PNC's consent to assignment of the Golf
Cart Lease. Buyer agrees to provide such guarantees or other financial assurances as PNC may
reasonably require for the assumption of the Golf Cart Lease by Buyer. Seller and Buyer shall
use commercially reasonable efforts to obtain PNC's consent to the assumption of the Golf Cart
Lease by Buyer on or before the date which is ten (10) days prior to the Closing Date. Buyer
acknowledges and agrees that an assignment of the Golf Cart Lease without PNC's consent
would be null and void and constitute a default under the Golf Cart Lease. Accordingly, Seller
shall not be required to assign its interest in the Golf Cart Lease unless" PNC has consented to the
assignment.
.
.
(b)
Pro Shop Inventory. All of the inventory of the Golf Course's pro shop
of items held for sale to the public and which are located at the Propeity as of the Closing Date,.
subject to such depletion and -including such resupplies as shall occur and be made in the usual
course of business ("Pro Shop Inventory"), shall be conveyed and assigned to Buyer at the
Closing Date by the Bill of Sale. Seller shall maintain the Pro Shop Inventory at approximately
the same levels as have been maintained ln the normal course of business before as of the date of
this Agreement, which inventory is described on Exhibit B~ 1 attached hereto: A schedule of the
Pro Shop Inventory as of the Closing Date, containing exact quantities, shall be agreed upon by
Buyer and Seller immediately prior to the Closing Date and shall be attached as an exhibit to the
Bill of Sale.
ARTICLES
SELLER'S OBLIGATIONS
5.1
General ·operation of the Property. SeJler shall operate the Property or cau~e
the Property to be operated after the Effective Date in Seller's reasonable discretion in its
capacity as Receiver, subject to normal agronomic practices consistent with the growing season,
reasonable wear and tear excepted. Seller shall continue to operate and maintain the Golf Course
substantially in accordance with the standard of operation and maintenance undertaken by Seller
prior to the date of this Agreement, without substantial deviation from Seller's ordinary and ·
customary operation of same. Seller shall have no obligation to make any major repairs or
capital improvements to the Golf Course.
ARTICLE6
CLOSING
6.1
Escrow. The Closing of the purchase and sale of the Property shall be
consummated through Escrow in accordance with the provisions of this Article 6,
837305,0 I/SD
3740 I ().00005/1-5-16/jll/jll
-9-
Exhibit2
Page 21
#:8568
' 6.2
Escrow Instructions for Closing. This Agreement shall constitute joint
. instructions to Escrow Holder. The parties agree to execute and deliver to the Escrow Holder
reasonable and customary additional escrow instructions in the usual form of Escrow Holder for
the purpose of consummating the purchase and sale contemplated by this Agreement; provided,
however, that standard extension provisions in such escrow instructions shall not apply; and
provided, further, that in the event of any conflict betwepn this Agreement and any escrow
instructions, the provisions of this Agreement shall control. Escrow Holder shall perform all
customary functions of an escrow holdt<r to consummate this transaction, including among othe1·
duties the calculation of the prorations and Closing Costs (as defined in Section 6.7 below)
required by this j\greement, as well as serving as depository for all funds, instruments, and
documents needed for the Close of Escrow. Upon the Closing, Escrow Holder is hereby
instructed to remit all sales proceeds from the sale of the Property to an interest-bearing account
maintained at a federally Insured bank or savings and loan association established by Seller,
which sales proceeds shall be held and distributed in the manner set forth in the Order Approving
the Sale (as defined below). For the sake of clarity, Escrow Holder's remittance of all sales
proceeds from the sale of the Property pursuant to the manner set forth in the foregoing sentence
shall mean that such sales proceeds shall be remitted to Receiver,
6.3
Closing Conditions.
(a)
Buyer's obligation to Close is subject to satisfaction of the following
conditions, which are for the benefit of Buyer and may be waived by Buyer in its sole discretion:
.
(i)
Buyer shall have completed its due diligence investigation of the
Property and approved of the Property, or be deemed to have approved of the Property, on or
prior to the Contingency Date; and
(ii)
Seller shall not, as of the Closing Date, be in material default in the
performarice of its obligations under this Agreement.
(b)
Seller's obligation to Close is subject to satisfaction of the following
conditions, which are for the benefit of Seller and may be waived by Seller in its sole discretion:
(i) .
All representations and warranties made by Buyer in this
Agreement shall be true when made and shall be true as of the Closing Date, without any
material adverse change, except for any material adverse change of which Buyer has notified
Seller and which Seller has accepted;
·
(ii)
All of the documents and funds required to be delivered by Buyer
to Seller or Escrow Holder (as the case may be) at the Closing pursuant to the terms and
conditions hereof shall have been delivered;
(iii)
Seller shall have received all consents, documentation and
approvals necessary to·consummate and facilitate the transactions con~emplated hereby,
including, without limitation; approval of the sale of the Prope1ty to Buyer from the Court and as
may be required by law;
837305.0 I/SD
. 314010·00005/1-5· 16/jll/jll
.
-10-
Exhibit 2
Page 22
--,
'
#:8569
(iv)
Buyer shall not, as of the Closing Date, be in default in the
performance of its obligations under this Agreement; and .
PNC shall have consented to the assignment of the Golf Cati Lease
(v)
to Buyer effective as of the Closing Date and shall have agreed to release Seller from its
obligations under the Golf Cart Lease arising after the Closing Date.
(c)
In addition to tho foregoing, Buyer's and Seller's respective obligations to
Close are subject to the approval of the transaction contemplated herein by the Court, which
approval shall be a condition for the benefit of both Buyer and Seller and may not be unilaterally
waived by either party.
If the purchase and sale fails to Close by the Closing Date due to a failure
(d)
of a condition, the party for whose benefit the condition is set forth may terminate this
Agreement at any time thereafter until the Closing occurs, so long as the failure of condition is
not caused by such party's breach of its obligations under this Agreement. If Buyer so terminates
in connection with the condition set forth in Section 6.3(a)Cii), above (only), then Buyer shall be
entitled as its sole and exclusive remedy to the retum of the Earnest Money Deposit. If Seller so
terminates, Seller shall be entitled to retain the Earnest Money Deposit.
6.4
Buyer's Deliveries. No later than one (1) business day prior to the Closing Date,
Buyer shall deliver to Escrow Holder:
(a)
The difference between the Purchase Price and the Earnest Money
Deposit, and all costs and fees required to be paid by Buyer pursuant to Sections 6.6 and Q;L
below, all in Immediately Available Funds;
(b)
A title affidavit (or at Buyer's option an indemnity) pertaining to Buyer's
activity on the Property prior to Closing, in the customary form reasonably acceptable to Buyer,
to enable Title Company to delete the standard exceptions to the title insurance policy set forth in
this Agreement to be issued pursuant to the Title Report;
Any declaration or other statement which may be required to be submitted
(c)
to the local assessor with respect to the terms of the sale of the Property;
(d)
A closing statement executed by Buyer;
A countersigned counterpart of the Bill of Sale in the fonn attached as
(e)
Exhibit 11 F 11 (the "Bill of Sale");
(f)
A countersigned counterpart of a General Assignment in the form attached
as Exhibit 11 G" (the "General Assignment");
(g)
An Assignment of Leases and Security Deposits in the form attached as
Exhibit "H" (the 11 Leases Assignment");
837305,01/SD
3740 I O-OOOOS/l-S-16/jll/jll
-11-
Exhibit 2
Page 23
#:8570
(h)
An Assignment and Assumption of Contracts in the form attached hereto
as Exhibit 11E 11 (the 11 Assignment of Contracts") and copies of all letters from the relevant
vendors evidencing Buyer's assumption ofthe Assigned Property Contracts;
. (i)
Resolutions, certificates of good standing, and such other organizational
documents, in form acceptable to the Title Company, authorizing the exe·cution, delivery and
performance by Buyer of this Agreement and designating one or more members to execute
documents on Buyer's behalf in connection with this transaction; and
G)
Such other documents and instmments as may be reasonably requested by
Seller or by the Escrow Holder in order to consummate this transaction.
·
6,5
Seller's Deliveries. No later than one (1) business day prior to the Closing Date,
Seller shall deliver to Escrow Holder:
(a)
A fully executed and acknowledged grant deed in the form attached as
Exhibit "I" conveying the Land to Buyer;
(b)
A closing statement executed by Seller;
(c)
A countersigned counterpart of the Bill of Sale;
(d)
A countersigned counterpart of the General Assignment;
(e)
A countersigned counterpart of the Leases Assignment;
(f)
A countersigned counterpart of the Assignment of Contracts; and
(g)
Such other documents and instruments as may be requil'ed herein or
reasonably requested by the Escrow Holder in order to consummate this transaction.
6.6
Pro rations.
(a)
General. All normal and customarily proratable items, including, without
limitation, collected rents, operating expenses, all cunent installments of real estate taxes,
assessments, bonds and personal prope1ty or use taxes, if any, shall be prorated as of the Closing
Date. If, however, subsequent to the Close of Escrow, by reason of any change in assessment or
change in rate or any other reason, the real estate ·taxes for the fiscal year covered by such
apportionment should be detennined to vary from those apportioned, tl!e amount of any refund
received by, or payment due from, Buyer shall be apportioned between Seller and Buyer as of
the Closing Date at the request of either party. Escrow Agent shall prepare and deliver to Seller
and Buyer a pforation schedule (the 11 Proration Schedule") of the adjustments described in this
Section 6.6 no later than two (2) days prior to Closing. Such adjustments shall be paid by Buyer
to Seller (if the prorations result in a net credit to Seller) or by Seller to Buyer (if the prorations
result in a net credit to Buyer), by increasing or reducing the cash to be paid by Buyer at Closing.
Any apportionments and prorations which are not expressly provided for below shall be made in
accordance with customary practice in Riverside County, California.
837305.01/SD
374010-00005/1·5-l6()11/Jll
·12·
Exhibit2
Page 24
--1
#:8571
(b)
Operating Expenses. All of the operating, maintenance, taxes (other than
real estate taxes, such as rental taxes), and other expenses incurred in operating the Property that
Seller customarily pays, and any other costs incurred in the ordinary course of business for the
management and operation of the Property, shall be prorated on an accrual basis. Seller shall pay
all such expenses that accrue prior to Closing and Buyer shall pay all suqh expenses that accrue
from and after the Closing Date.
(c)
Utilities. The final readings arid fmal billings for utilities will be made if
possible as of the Closing Date, in which case Seller shall pay all such bills as of the Closing
Date and no proration shall be made at the Closing ¥(ith respect to utility hills. Otherwise, a
proration shall be niade based upon the parties' reasonable good faith estimate and a
readjustment made within thirty (30) days after the Closing, if necessaty. Seller shall be entitled
to the return of any deposit(s) posted by it with any utility company, and Seller shall notify each
utility company serving the Property to terminate Seller's account, effective as of noon on the
Closing Date.
Real Estate Taxes. Any real estate ad valotem or similar taxes for the
(d)
Property, or any installment of assessments payable in installments which installment is payable
in the calendar year of Closing, shall be prorated to the date of Closing, based upon actual days
involved. The proration of real property° taxes or installments of assessments shall be based upon
the assessed valuation and tax rate figures (assuming payment at the eatliest time to allow for the
maximum possible discount) for the year in which the Closing occurs to the extent the same are·
available; provided, however, that in the event that actual figures (whether for the assessed value
of the Property or fol' the tax rate) for the year of Closing are pot available at the Closing Date,
the proration shall be made using figures from the preceding year (assuming payment at the
earliest time to allow for the maximum possible discount). The proration ofreal property taxes
or installments of assessments shall be final and not subject to re~adjustment after Closing.
(e)
Leases and Special Events,
(i)
All collected rent, income· and expenses from any portion of the
Property shall be prorated as of the Closing Date (prorated for any partial month). Buyer shall
receive all collected rent and income attributable to dates from and after the Closing Date. Seller
shall teceive all collected rent and income attributable to dates prior to the Closing Date.
Notwithstanding the foregoing, no prorations shall be made in relation to either (a) non·
delinquent rents which have not been collected as of the Closing Date, or (b) delinquent rents
existing, if tiny, as of the Closing Date (the foregoing (a) and (b) referred to herein as the
"Uncollected Rents"). In adjusting for Uncollected Rents, no adjustments shall be made in
Seller's favor for rents which have accrued and are unpaid as of the Closing, but Buyer shall pay
Seller such accrued Uncollected Rents as and when collected by Buyer. Buyer agrees to bill
Tenants of the Property for all Uncollected Rents and to take reasonable actions to collect
Uncollected Rents. Aftet the Closing, Seller shall continue to have the right, but not the
obligation, in its own n~me, to demand payment of and to collect Uncollected Rents owed to
Seller by. any Tenant, which tight shall include, without limitation, the right to continue or
commence legal actions ol' proceedings against any Tenant and the delivery of the Leases
Assignment shall not constitute a waivet by Seller of such right. Buyer agrees to cooperate with
Seller in connection with all efforts by Seller to collect such Uncollected Rents and to take all
837305.0 I/SD
374010-00005/1-5-16/jll/jll
• 13-
Exhibit 2
Page 25
-- ···1
#:8572
steps, whether before or after the Closing Date, as may be necessary to c~rry out the intention of
the foregoing, including, without limitation, the delivery to Seller, within seven (7) days after a
written request, of any relevant books and records (including, without limitation, rent statements,
receipted bills and copies of tenant checks used in payment. of such rent), the execution of any
and all consents or other documents, and the unde1taking of any act reasonably necessary for the
collection of such Uncollected Rents by Seller.
(ii)
With respect to operating expenses, taxes, utility charges, other
operating cost pass-throughs, retroactive rental escalations, sums or charges payable by Tenants
under the Tenant Leases, to the extent that Seller has received as of the Closing payments
allocable to periods subsequent to .Closing, the same shall be properly prorated with an
adjustment in favor of Buyer, and Buyer shall receive a credit thet:efor at Closing. With respect
to any payments received by Buyer after the Closing allocable to Seller prior to Closing, Buyer
shall promptly pay the same to Syller.
(iii)
All deposits and prepayments received by Seller for golf
tournaments, prepaid greens fees, small group reservations and special events at the Golf Course
(collectively, the ."Special Events") shall be retained by Seller; provided, however, that at the
Closing Date, Buyer shall be credited with the amount of such deposits and prepayments held by
Seller for all Special Events which have not yet occurred.
(f)
Insurance Premiums. No proration shall be made in relation to insurance
premiums and insurance policies will not be assigned to Buyer.
No Post Closing Adjustments. Buyer and Seller hereby acknowledge
(g)
and agref'. that neither Buyer nor Seller shall have any right to re-adjust any item on the Proration
Schedule (or any item omitted therefrom) after the Closing. The provisions of this Section 6.6
shall survive the Closing and delivery of the grant deed to Buyer.
Closing Costs. Seller shall pay: (a) the premium for a standard CLTA Owner's
6.7
Policy of Title Insurance; (b) all County documentary transfer taxes; and (c) one-half (1/2) of all
Closing Costs. Buyer shall pay: (i) any additional premium for an ALTA Policy of Title
Insurance, if Buyer elects to receive same and the cost of any survey and/or title endorsements
desired by Buyer; and (ii) one-half (1/2) of Closing Costs. Any other costs or expenses of the
Escrow shall be borne by the parties in accordance with customary practice in Riverside County,
California. For purposes ofthls Agreement, "Closing Costs" shall mean escrow fees, city
documentary transfer taxes, document preparation charges and acknowledgment and recording
costs, but shall not include any attorneys' fees or other such costs and expenses incurred
separately by Buyer or Seller.
6.8
Possession Upon Close of Escrow. Seller shall deliver possession of the
Property to Buyer (subject to the Leases and those Assigned Property Contracts identified by
Buyer pursuant to the terms of Section 4.l(c) above) upon the Close of Escrow,
Termination of this Agreement. In the event this Agreement is terminated in
6.9
accordance with the provisions of Sections 6.3(c), 12.l (a)~ 12.2(a), 14.5 or .Ll., (i) any documents
deposited with Escrow Holder shall be returned to the party depositing the same; (ii) Buyer shall
837305.01/SD
3740 l 0·000051 I·S-16/jllljll
-14-
Exhibit 2
Page 26
#:8573
. return to Seller all documents delivered by Seller to Buyer pursuant to t.his Agreement and any
Third-Party Reports; and (iii) unless otherwise specifically provided elsewhere, the Buyer shall
pay all Escrow, title, and other costs, if any, incurred in connection with cancellation of the
Escrow. If this Agreement is not so terminated, Buyer shall go forward with the acquisition of
the Property as provided in this Agreement and the Deposit shall be non-refundable, except in
the event of Seller's default prior to the Close of Escrow.·
6.10 Waiver of "Bulk Sale" Provisions. Buyer and Seller hereby acknowledge and
agree that the sale of the Property shall not be made as a "bulk sale" under Sections 6101 et seq.
of the California Commercial Code, that there shall be no separate escrow or sub-escrow for the
sale of any portion ofthe Property, and that no "bulk sale" notice pursuant to Section 6105 of the
California Commercial Code shall be given by Escrow Holder or the parties in connection with
the transfer of any portion of the Property. Seller represents and warrants to Buyer that Seller's
yrincipal business is not the sale of inventory from stock or that of a restaurant owner.
ARTICLE7
REPRESENTATIONS AND WARRANTIES OF BUYER
7.1
follows:
Representations and Warranties of Buyer. Buyer represents and warrants as
(a)
Authority. The execution and delivery of this Agreement, and the
consummation of the transactions contemp~ated hereby, have been duly authorized and approved
by all requisite action of Buyet·, and no other authorizations or approvals, whether of
governmental bodies or otherwise, will be necessary in order to enable Buyer to enter into or to
comply with the terms of this Agreement.
(b)
Binding Effect of Documents. This Agreement and the other documents
to be executed by Buyer hereunder, upon execution and delivery thereof by Buyer, will have
been duly entered into by Buyer, and will constitute legal, valid and binding obligations of
Buyer. Neither this Agreement nor anything provided to be done under this Agreement violates
or shall violate any contract, document, understanding, agreement or instrument to which Buyer
is a party or by which it is bound.
Represenfation Regarding Broker. The Broker and its affiliates do not,
(c)
and will not at the Closing, have any direct or indirect legal, beneficial, economic or voting
interest in Buyer (or in an assignee of Buyer, which pursuant to Section 14.4, acquires the
Prope1iy at the Closing), nor has Buyer or any affiliate of Buyer granted (as of the Effective Date
or the Closing Date) the Broker or any of its affiliates any right or option to acquire any direct or
indirect legal, beneficial, economic or voting interest in Buyer.
(d)
No Pending or Threatened Litigation. No pending or threatened
litigation exists which if determined adversely would restraln the consummation of the·
transactions contemplated by this Agreement or would declare illegal, invalid or non-binding any
of Buyer's obligations or.covenants to Selkr.
>
( e)
Golf Course Management Experience, Buyer hereby represents and
warrants that Buyer is qualified to own and operate the Golf Course and has substantial prior
837305.01/SD
374010·0000$/I+ 16/jll/jll
-15-
Exhibit 2
Page 27
#:8574
experience with golf course operation and maintenance, Buyer and Seller hereby acknowledge
that this Agreement would not have been entered into by Seller but for the high-quality and firstclass reputation of B1wer in the operation of golf course properties and that the character and
quality of Buyer's operation of the Golf Course are of paramount concern to Seller, Following
the. Closing, Buyer hereby agrees to maintain the Golf Course in first class condition and state of
repair consistent with the standards and customs common in the industry for similar public golf
courses in Southern California.
(f)
Survival of Buyer's Representations and Warranties. All warranties
and representations of Buyer set forth in this Agreement shall survive for a period of six (6)
months following the Closing Date and any claim with respect to a breach of any representation
or warranty made or given by Buyer shall be initiated in accordance with the provisions of
Article 10 within six (6) months of the Closing Date or such claim shall be forever barred.
ARTICLE.8
"ASIS" SALE
8.1
Independent Investigation. Buyer shall have independently investigated,
analyzed and appraised the value, profitability and condition of the Property, including, without
limitation, the geological and· soil condition of the Property, the fitness or suitability of the
Property for Buyer's intended use of the Property and all environmental matters relating to the·
Property (including, but not limited to, the presence or absence of hazardous or toxic substances
or industrial hygiene in violation of any and all applicable environmental laws), without relying
on any representations of any kind (whether oral or' written, express or implied) made by Seller
to Buyer. Buyer is purchasing the Property in its "AS IS, WHERE IS" condition as of the
Effective Date solely in reliance upon Buyer's own investigations and evaluation thereof and
without any representation or warranty by Seller as to the condition of the Property.
8.2
AS-IS Purchase; No Side Agreements Or Representations, Buyer
acknowleqges and agrees that Buyer has independently and personally inspected the Property,
and the improvements, entitlements, plans and specifications related to the Property, Buyer has
elected to go forward with the purchase of the Property on the basis of such persona.I
examinations and inspections as Buyer has deemed appropriate to make, Buyer agrees that AS A
MATERIAL INDUCEMENT TO THE EXECUTION AND DELIVERY OF THIS
AGREEMENT BY SELLER, BUYER lS PURCHASING THE PROPERTY IN AN "AS
IS" AND "WHERE IS" PHYSICAL CONDITiON AND IN AN "AS IS" STATE OF
REPAIR, WITH ALL FAULTS. No perscin acting on behalf of Seller is authorized to make,
and by execution hereof Buyer acknowledges and agrees that, except as specifically provided in
this agreement, Seller has not made, does not make, and specifically negates and disclaims any
representations, warranties, promises, covenants, agreements or guaranties of any kind or
character whatsoever, whether express or implied, oral or wrftten, past, present or future, of and
to, concerning or with respect to:
83730$,01/SD
374010-0000511-5-16/JU/jll
(i)
the value of the Property;
(ii)
the income to be derived from the Property;
-16-
Exhibit2
Page 28
.. I
#:8575
,
(iii) · the suitability of the Property for any and all activities and uses
which Buyer may conduct thereon, including without limitation any development of the
Property;
(iv) the habitability, merchantability, marketability, profitability or
fitness for a particular purpose of the Property;
(v)
the manner, quality, state ofrepair, or lack ofrepair, of the
(vi)
the nature quality, availability or condition of the Property
Propetty;
including without lhnitation, the water, soil and geology;
(vii) the compliance of or by the Property or the operation of the
Property with any laws, rules, easements, ordinances, or regulations of any applicable
governmental authority or body;
·
(viii) the manner, condition, or qualitY of the construction or materials, if
any, incorporated into the Property;
(ix)
compliance with any environmental protection, pollution or land
use laws, rules, regulation, orders or requirements, including but not limited to, the Endangered
Species Act, Title !Hof the Americans With Disabilities Act of 1990, and any other law, rule or
regulation governing access by disabled persons;
(x)
the presence or absence of hazardous or toxic substances at, on,
under, or adjacent to the Land;
(xi)
the content, completeness or accuracy of the due diligence
materials, including any informational package, document list other materials prepared by
Seller;
or
(xii) the conformity of the improvements to any plans or specifications
for the Property, including any plans and specifications that may have been or may be provided
to Buyer;
(xiii) the conformity of the Property to past, current or future applicable
zoning or building requirements;
(xiv)
deficiency of any undershoring;
(xv)
deficiency of any drainage;
(xvi)
the existence ofland use zoning or building entitlements affecting
the Property;
(xvii) deficiency of any access to the Land and/or Improvements; and
837305,01/SD
37401 o-oooo.s11-s-161j111J11
-17-
Exhibit 2
Page 29
#:8576
.
(xviii) with respect to any other matter concerning the Property, except as
may be otherwise expressly stated herein, including any and all such matters referenced
discussed or disclosed in any documents delivered by Seller to Buyer, in any public records of
·any govemmental agency, entity or utility company, or in any other documents available to
Buyer.
Buyer acknowledges that Seller has, in the ordinary course of its ·business, taken
reservations, deposits and prepayments for Special Events. A schedule of those reservations
which hav.e been accepted as of the date of this Agreement, along with a schedule of the deposits
and prepayments received by CSC with respect to such reservations, is attached hereto
as Exhibit 11D" and shall be updated by CSC as of the Closing Date, All such deposits and
prepayments received by CSC shall be retained by CSC; provided, however, that at the Closing,
Buyer shall be credited with the amount of such deposits and prepayments held by CSC for all
Special Events that have not yet occurred. Buyer shall cooperate with Seller. in notifying all
parties with reservations for Special Events of the transfer of the Property and the assumptiqn by
Buyer of the obligation to honor the reservation and hold the Special Event. After the Closing,
Buyer shall honor all such reservations for Special Events and shall credit the applicable
customers for such deposits and prepayments.
Buyer acknowledges and agrees that the opportunity to inspect the Property and review
information and documentation respecting the Property (including that disclosed in the
Aclmowledgment) as provided in this Agreement is sufficient to allow the Buyer to make an
adequate investigation of the Property and that Buyer is relying solely on its own investigation of
the Property and review of such information and documentation, and not, on any infmmation
provided or to, be provided by Seller: Buyer further acknowledges and agrees that any
information made available to Buyer or provided or to be provided by or on behalf of Seller with
respect to the Property was obtained from a variety of sources and that Seller has not made any
independent investigation or verification of such information and make no representations as to
the accuracy or completeness of such information except as may otherwise be prcivided herein.
Buyer agrees to fully and irrevocably release all such sources of information and preparers of
information and documentation to the extent such sour~es or preparers are Seller, or its
employees, members, officers directors, representatives, agents, servants, attorneys, affiliates,
parent companies, subsidiaries, successors or assigns, from any and all claims that it may now
have or hereafter acquire against such sources and preparers of information for any costs, loss,
liability, damage, expense, demand, action or cause of action arising from such information or
documentation. Seller is not liable or bound in any manner by any oral or written statements,
representations or information pertaining to the Property or the operation thereof furnished by
any of the foregoing entities and individuals or any other individual or entity. Buyer further
acknowledges and agrees that to the maximum extent permitted by law, the sale of the Property
as provided for herein is made on an 11 AS-IS 11 condition and basis, with all faults, and that Seller
has no obligations to make repairs, replace~ents or improvements.
8.3
NO LIABILITY TO RECEIVER. WITHOUT LIMITATION OF THE
FOREGOING, AS AN ESSENTIAL INDUCEMENT TO RECENER TO ENTER INTO THIS
AGREEMENT, AND AS PART OP. THE DETERMINATION OF THE CONSIDERATION
GIVEN HEREUNDER, BUYER ACKNOWLEDGES, UNDERSTANDS AND AGREES AS
FOLLOWS:
837305.0l/SD
374010-00005/l·S•l 6/J!Vjll
·18-
Exhibit2
Page 30
-- j
---,
'
#:8577
. (a)
BUYER ACKNOWLEDGES AND AGREES THAT RECEIVER IS
ENTERING INTO THIS AGREEMENT SOLELY IN CONNECTION WITH HIS OR HER
DUTIES AS RECEIVER PURSUANT TO THE ORDERS. INNO EVENT SHALL
RECEIVER, HER AGENTS, SERVANTS, EMPLOYEES, CONSULTANTS,
CONTRACTORS, DIRECTORS, OFFICERS, ATTORNEYS, ACCOUNTANTS,
AFFILIATES, SHAREHOLDERS, MEMBERS, PARTNERS, REPRESENTATIVES,
SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE "RECEIVER PARTIBS") BE
LIABLE FOR ANY ERROR OF JUDGMENT OR ACT DONE BY THE RECEIVER
PARTIES, OR BE OTHERWISE RESPONSIBLE OR ACCOUNTABLE UNDER ANY
CIRCUMSTANCE WHATSOEVER, EXCEPT IF THE RESULT OF THE RECEIVERS
PARTIES' GROSS NEGLIGENCE OR INTENTIONAL MISCONDUCT. THE RECEIVER
PARTIES SHALL NOT HA VE ANY PERSONAL LIABIPTY OR OBLIGATION ARISING
OUT OF THIS AGREEMENT OR THE TRANSACTION CONTEMPLATED HEREBY AND
BUYER HEREBY RELEASES, DISCHARGES AND AGREES TO HOLD HARM.LESS THE ·
RECEIVER PARTIES FOR, FROM, AND AGAINST ANY LIABILITY, DUTY OR
OBLIGATION UNDER OR ARISING OUT OF THIS AGREEMENT AND Tiffi .
TRANSACTION CONTEMPLATED HEREBY; AND THIS AGREEMENT AND ALL OF
SELLER'S DUTIES AND OBLIGATIONS HEREUNDER OR ARISING THEREFROM
SHALL BE AND ARE SUBJECT TO THE ORDERS AND ANY OTHER ORDER ISSUED IN
CONNECTIDN WITH THIS RECEIVERSHIP. IF RECEIVER SHALL DETERMINE IN ITS
REASONABLE DISCRETION THAT THIS AGREEMENT ORA PART OR PORTION
THEREOF DOES NOT COMPLY WITH OR SATISFY ANY PROVISION OR TERM OF
THE ORDERS OR ANY OTHER ORDER ISSUED IN CONNECTION WITH THE
RECEIVERSHIP, THEN RECEIVER SHALL BE ENTITLED TO TERMINATE THIS
AGREEMENT UPON WRITTEN NOTICE TO BUYER.
(b)
NO PROVISION OF THIS AGREEMENT SHALL OPERATE TO
PLACE ANY OBLIGATION OR LIABILITY FOR THE CONTROL, CARE, ·
MANAGEMENT OR REPAIR OF THE PROPERTY UPON ANY OF THE RECEIVER
PARTIES NOR SHALL IT OPERATE TO MAKE ANY OF THE RECEIVER PARTIES
RESPONSIBLE OR LIABLE FOR ANY WASTE COMMITTED ON THE PROPERTY BY
ANY PERSON OR FOR ANY DANGEROUS OR DEFECTIVE CONDITION OF THE
PROPERTY OR FOR ANY NEGLIGENCE IN MANAGEMENT, UPKEEP, REPAiR OR
CONTROL OF THE PROPERTY RES UL TING IN LOSS OR INJURY OR DEATH TO ANY
PERSON.
8.4
Survival. The provisions of this Article 8 shall survive the Close of Escrow.
ARTICLE9
RELEASE AND INDEMNITY
9.1
Release. To the maximum extent permitted by law, Buyer, on behalfbfitself and
its past, present and future agents, representatives, partners, shareholders, principals, attorneys,
affiliates, parent corporations, subsidiaries, officers, directors, employees, predecessors,
successors, heirs and executors and assigns (collectively, "Buyer's Parties"), hereby releases
and forever disch!U'ges Seller, and each of their respective past, present and future agents
(including Receiver and Broker (as defined in Section 14.1)), representatives, partners,
837305.01/SD
3740 I0-00005/1-5-16/jll/jll
-19-
Exhibit 2
Page 31
#:8578
attorneys', shareho1ders, principals, affiliates, parent corporations, subsidiaries, officers,
directors, employees, predecessors, successors, heirs, executors and assigns (collectively,
"Indemnitees"), from and against all claims, rights, remedies; recourse or other basis for
recovery, legal or administrative proceedings, losses, liabilities, damages, penalties, fines, liens,
judgments, costs or expenses whatsoever (including, without limitation, attorneys' fees and costs)
("Claims"), whether direct or indirect, known 01· unknown, foreseen, whether before or after the
·closing Date, including without limitation any loss, damage, injury, illness, death or other claim
attributable to: (a) the use of the Property 01· any part thereof; (b) a defect in the design or
construction of any improvements on or about the Property or the physical condition of the
Property, including without limitation the grading of the Land or land adjacent to the Land,
whether or not pcrfonned by an Indemnitee, and any surface and subsurface conditions; (c) the
presence on the Land of any threatened or endangered species, or any archaeological sites,
artifacts or other matters of archaeological significance, or any hazardous or toxic substances or
industl'ial hygiene in violation of any and al I applicable envil'onmental laws including, without
limitation, all claims in tort or contract and any claim for indemnification or contribution arising
under the Comprehensive Environmental Respon~e, Compensation, and Liability Act (42 U.S.C.
Section 9601, Qt~.) or any similar federal, state or local ~tatute, rule or ordinance relating to
liability of prope1ty owners for environmental matters; (d) any act, omission o.r representation of
Buyer or .any of Buyer's Parties; (e) any accident or casualty on the Property caused by or
attributable to the acts 01· omissions of any Indemnitees, Buyer or Buyer's Parties on or about the
Property; (t) a violation or alleged violation by any Indemnitee, Buyer, or Buyer's.Parties of any
law now or hereinafter enacted, including, without limitation, any requirements of the City,
CDFW and/or ACOE; (g) a slope failure or surface or subsurface geologic or groundwater
condition caused by or attributable to any Indemnitee, Buyer or Buyer's Parties; (h) the design,
construction, engineering or other, work with respect to the Property provided or performed by
or ·caused by or attributable to any Tndemnitee, Buyer or Buyer's Parties, whether before or after
the Closing Date; (i) any other cause whatsoever in connection with Buyer's use of the Property
or Buyer's performance under the Agreement or any of the instruments executed and delivered at
Closing in connection herewith; G) any breach by Buyer in the performance of its obligations
under this Agreement or the other instruments executed and delivered at Closing in connection
herewith; or (k) the application of the principles of strict liability in connection with the Property
(collectively, the "Released Claims"). Notwithstanding the foregoing, the Buyer shap not be
required to or be deemed to have waived any Claims against any particular Indemnitee from an
event which arises from a pre-existin·g relationship or claim between the Buyer and such
Indemnitee.
With respect to this release and discharge, Buyer, on behalf of itself and all of Buyer's
Pi:irties, hereby acknowledges that the Released Claims may include Claims of which Buyer is
presently unaware, or which Buyer does not presently suspect to exist, or which may not yet
have accrued or become manifest, and which, if known by Buyer on the Effective Date or the
Clos·ing Date would materially affect Buyer's release and discharge of Seller and the other
lndemnitees, and Buyer, on behalf of itself and all of Buyer's Parties, hereby waives application
of the California Civil Code Section 1542 which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH CREDITOR DOES NOT KNOW OR SUSPECT EXISTS
IN HIS OR HER FAVOR AT THE TIME OF EXECUT,ING
nm
837305,01/SD
374010-00005fl-5-JG/jll/jll
-20-
Exhibit 2
Page 32
-
i
#:8579
·-···-------
RELEASE, WHICH IF KNOWN BY HIM OR HER MUST
HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR.
Buyer understands and acknowledges that the significance and consequence of this waiver of
California Civil Code Section 1542 is that, even. if Buyer or any of Buyer's Parties suffer future
damages arising out of or resulting from any Released Claims, neither Buyer nor any of Buyer's
Parties will be able tci make any claim for those damages against Seller or any other Indemnitee.
Furthermore, Buyer acknowledges that it intends these consequences for any such Claims which
may exist as of the date of this release but which Buyer does not know exist, and which, if
known, would ·materially affect Buyer's decision to execute this Agreement, regardless of
whether Buyer's lack of knowledge is the result of ignorance, oversight error, negligence orany
other cause.
Buyer's initials
9,2
Survival.
T~e
provisions of this Article 9 shal! survive the Close of Escrow.
ARTICLE 10
DISPUTE RESOLUTION
10.1 Court Trial. Each party to this Agreement hereby expressly waives any right to
trial by jury with respect to any claim, demand, action or cause of action (a) arising under this
Agreement, including, without limitation, any present or future modification thereof, or (b) in
any way connected with or related or incidental to the dealings of the parties hereto or any of
them with respect to this Agreement (as now or hereafter modified) or any other instrument,
document or agreement executed or delivered in connection herewith, or the transactions related
hereto or thereto, in e£ich case whether such claim, demand, action or cause of action is n~w
existing or hereafter arising, and whether sounding in contract or tort or otherwise: and each
p&rty hereby agrees and consents that any such claim. demand or cause of action shall be decided
by court trial without a jury, and that any party to this Agreement 11\ay file an original
counterpart or a copy of this section with any court as written evidence of the consent of the
parties hereto to the waiver of any right they might otherwise have to trial by jury. The parties
shall be entitled to recover only their (1ctual damages, and no party shall be entitled to recover
any consequential damages, punitive damages, or any otner damages that are not actual damages,
10.2 Venue, Any action shall be commenced find maintained in the Court. The parties
irrevocably consent to jurisdiction and _venue in such Court and agree not to seek transfer or
removal of any action commenced in accordance with the terms of this article.
ARTICLE 11
NATURAL H.AZARD DISCLOSURE STATEMENT
11.1 Buyer's Aclmowledgment. Buyer acknowledges that: (a) it is a sophisticated
and experienced purchaser of real property; (b) Buyer and Seller are parties of equal ba!'gaining
strength; (c) this Agreement is not a contract of adhesion but has been expressly negotiated
between the parties; and (d) this Agreement concerns a transaction that is private in nature.
8J7JllS.lll-'SD
374111 O·UllOOSI I·S· I6~ If/JU
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Exhibit 2
Page 33
#:8580
Buyer further acknowledges that it has the opportunity to make, has made or will make its own
independent investigations, as provided in this Agreement, and that the opportunjty for
investigation provided herein allows the Buyer to detem1ine, among other issues, whether the
Land is located in any natural hazard areas.
11.2 Waiver of Natural Hazard Disclosure Statement. Notwithstanding anything to
the contrary in Section 1I .3 below, Buyer hereby knowingly, voluntarily and intentionally
waives its right to disclosure of natural hazards found in the Natural Hazard Disclosure Act,
California Government Code Sections 8589.3, 8589.4, and 51183.5, California Public Resources
Code Sections 2621.9, 2694, and 4136, and California Civil Code Section 1103, and any
successor statutes or laws (the "Act"). This waiver is a material inducement to Seller's decision
to enter into this Agreement and the calculation of the Purchase Price, and Buyer acknowledges
that Seller would not have entered into this Agreement but for this waiver.
'
'
11.3 Natural Hazard Disclosure Statement. Buyer acknowledges that, pri01· to the
Effective Date, Buyer has received and executed the Natural Hazard Disclosure Statement
("Disclosure Statement"). Buyer acknowledges that the Disclosure Statement is being delivered
pursuant to the Act. Buyer acknowledges and agrees that nothing contained in the Disclosure
Statement shall release Buyer from its obligation to fully investigate the condition of the
Prope1ty, including without limitation whether the Property is located, in any natural hazard
areas, and that Buyer has the expertise to perfonn such investigations. Buyer further
acknowledges and agrees that the matte1·s set fo1th in the Disclosure Statement may change on or
prior to the Close of Escrow and that Seller has no obligation to update, modify or supplement
the Disclosure Statement. Buyer shall be solely responsible for preparing and delivering its own
Natural Hazard Disclosure Statement to any subsequent prospective purchasers of the Property.
ARTICLE 12
CONDEMNATION AND DESTRUCTION
12.1 Eminent Dqmain or Taking. If proceedings under a power of eminent domain
relating to the Land or any part thereof are commenced prior to Close of Escrow, Seller shall
promptly notify Buyer in writing and the following terms shall apply:
(a)
If such proceedings involve the taking ohitle to all or a Material (as
defined in Section 12.3 below) portion of the Land, Buyer may elect to terminate this Agreement
by written notice given within ten days of Seller's written notice to Buyer advising of such
proceedings, in which case neither party shall have any further rights or obligations hereunder,
except for those which are expressly stated to survive termination of this Agreement or which are
contained in Section 6.9,
(b)
If the proceedings do not involve the taking of title to all or a Material
portion of the Land, or if Buyer does not elect to terminate this Agreement, this transaction shall
be consummated as described herein.and any award or settlement payable with respect to such
proceeding shall be paid or assigned to Buyer upon Close of Escrow.
(c)
lfthe purchase and sale of the Property is not consummated for any
reason,' any condemnation award or settlement shall belong solely to Seller.
83730S,Ol/SP
3740 JO·OOOOS/l ·S· 16/jJUJU
Exhibit2
Page 34
... I
I
#:8581
12.2 Damage or Destruction. Except as provic(ed in this Section 12.2, prior to the
Glose of Escrow, the entire risk of loss of damage by earthquake, landslide, fire or other casualty .
shall be borne and assumed solely by Seller. If, prior to the Close of Escrow any pa1t of the
Land or improvements thereon is damaged or destroyed by earthquake, landslide, fire or other
casualty, Seller shall promptly inform Buyer of such fact in writing and advise Buyer as to the
extent of the damage and whether it is, in Seller's reasonable opinion, "Material" or "not
Material." The following terms shall apply:
If such damage or destmction is "Material," Buyer shall have the option to
(a)
terminate this Agreement upon written notice to Seller given not later than ten days after receipt
of Seller's written notice to Buyer advising of such dainage 01· destruction.
(b)
If Buyer does not elect to terminate this Agreement, or if the damage or
destruction is not "Material," Seller shall reduce the Purchase Price by the value reasonably
estimated by Seller to repair or ~estore the damaged portion of such Land or improvements, less
any sums expended by Seller to make emergency repairs to such Land or improvements or to
otherwise protect the physical condition of such 'Land or improvements, and this transaction shall
·
close pursuant to the terms of this Agreement.
(c)
If the damage is not "Material," Seller's notice to Buyer of the damage 01•
destruction shall also set forth Seller's reduced Purchase Price and Seller's allocation of value to
the damaged portion of such improvements. If Buyer does not accept Seller's reduced Purchase
Price; Seller may elect to repair or restore the damaged portion of such improvements. If Seller
elects to repair or restore the damage, then Buyer shall proceed to Closing. If Seller does not
elect to repair or restore the damage, and Buyer does not accept Seller's reduced Purchase Price
Buyer's sole remedy shall be to terminate this Agreement. If Buyer elects to terminate the
. ·Agreement pursuant to Section 12.2(c), provisions of Section 6,9 shall apply.
Whether or not the sale of the Property is consummated hereunder, all
(d)
rights to insurance claims or proceeds with respect to any damage to or destruction of any
improvements occurring prior to the Close of Escrow shall belong to Seller.
12.J Definition of Material. As used in this Article 12, "Material" shall mean any
taking, condemnation, damage or destruction to or of the Land, as applicable, which causes the
temporary closing of the Property for a period of five (5) days or more and costs more than Two
Hundred Fifty Thousand and No/100 Dollars ($250,000.00) to repair.
ARTICL~13
DEFAULT BY BUYER
13.1 DEFAULT BY BUYER. UPON DEFAULT BY BUYER, SELLER SHALL
BE ENTITLED TO TERMINATE TffiS AGREEMENT UPON WRITTEN NOTICE TO
BUYER AND TUE ESCROW HOLDER. IN SUCH EVENT, ESCROW HOLDER
SHALL RELEASE THE DEPOSIT TO SELLER, AND SELLER SHALL BE ENTITLED
TO RECEIVE AND' RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES AND,
EXCEPT FOR BUYER'S INDEMNITY AND OTHER SPECIFIC OBLIGATIONS
REFERRED TO HEREIN wmcH MAY BE ENFORCED BY SELLER, NEITHER
837305,01/SD
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Exhibit2
Page 35
#:8582
PARTY SHALL HAVE ANY FURTHER RIGHTS OR OBLIGATIONS HEREUNDER.
IN THE EVENT THE CLOSING DOES NOT OCCUR BECAUSE OF BUYER'S
DEFAULT, BUYER AND SELLER AGREE THAT IT WOULD BE JMPRACTICABLE
AND EXTREMELY DIFFJCUL T TO ESTIMATE THE DAMAGES SUFFERED BY
SELLER AS A RESULT OF BUYER'S FAILURE TO COMPLETE THE PURCHASE
OF THE PROPERTY PURSUANT TO THIS AGREEMENT, AND THAT UNDER THE
CIRCUMSTANCES EXISTING AS OF THE EFFECTIVE DATE, THE LIQUIDATED
DAMAGES PROVIDED FOR IN THIS.SECTION REPRESENT A REASONABLE
ESTIMATE OF THE DAMAGES WHICH SELLER WILL INCUR AS ARE.SULT·OF
SUCH DEFAULT; PROVIDED, HOWEVER, THAT THJS PROVISION SHALL NOT:
(A) LIM CT SELLER'S RIGHT TO RECEIVE REIMBURSEMENT FOR ATTORNEYS'
. FEES; (B) WAIVE OR AFFECT BUYER'S lNDEMNITY OBLIGATIONS AND
SELLER'S RIGHTS TO SUCH lNDEMNITY; OR (C) WAIVE OR AFFECT BUYER'S
OBLIGATIONS TO RETURN OR PROVIDE TO SELLER DOCUMENTS, REPORTS
OR OTHER INFORMATION PROVIDED TO OR PREPARED BY OR FOR BUYER
PURSUANT TO APPLICABLE PROVISIONS OF THIS AGREEMENT. THEREFORE,
BUYER AND SELLER PO HE~EBY AGREE Tl{AT AS OF THE EFFECTJ.VE DA TE. A
REASONAJJLE ESTIMATE OF THE TOTAL NET DETRIMENT THAT SELLER
WOULD SUFF£R IN THE EVENT THAT BUYER DEFAULTS AND FAILS TO
COMPLETE THE PURCHASE OF THE: PROPERTY 1$ AN AMOUNT EQUAL TO
THE DEPOSIT (WHICH INCLUDES ANY ACCRUED INTEREST THEREON). SAID
AMOUNT SHALL BE THE FULL, AGREED AND LIQUIDATED DAMAGES FOR
THE BREACH OF THIS AGREEMENT BY BUYER. THE PAYMENT OF SUCH
AMOUNT AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR
PENAL TY WlTllIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275
OR 3369, BUT 18 INTENDED TO CONSTlTUTE LIQUlOATED DAMAGES TO
SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND
1677. SELLER HEREBY WAIVES THE PROVISIONS OF CALIFORNIA CIVIL CODE
SECTION 3389,
13.2 Default by Seller; Unsuccessful Bidder, Subject to Section 8.3; if the sale of the
Property is not consummated because of~ material defoult by Seller under this Agreement,
Buyer's sole remedy shall be to (i) terminate this Agreement and recover (a) the Earnest Money
Deposit and Interest accrued thereon attd (b) Buyer's actual out of pocket third party costs
incurred (but not to exceed $10,000.00) in conducting its due diligence investigations or
(ii) specifically enforce Seller's obligations to convey the Property and recover professional foes
and costs. Jf Buyer is not the High Bidder at the Auction, Buyer shall be ehtitled tot.he Earnest
Money Deposit ahd lnte1·est accrued thereon. but shall not be, entitled to specifically enforce
Seller's obligation to convey the Property, or recover any out of pocket costs, professional fees
and costs, or other amounts.
HH~t15,0
I ·~Jl
mo IO·lltlOl)j, 1·H6!jlf(ill
"24-'
Exhibit 2
Page 36
-- I
#:8583
ARTICLE14
MISCELLANEOUS PROVISIONS
14.1 Brokerage Commissions. Seller represents and warrants to Buyer that Seller has
not engaged any broker or finder in connection with the transaction contemplated by this
Agreement other than The W Realty Group ("Broker"), whose commission (if the Closing
occurs) shall be paid pursuant to a separnte agreement entered into by Seller and Broker. Buyer
represents and wanants to Seller that Buyer has not engaged any l:)roker or finder in connection
with the transaction contemplated by this Agreement. Buyer shall indemnify, defend and hold
· Seller and Broker hannless from and against any liability, cost or expense arising out of or
connected with any claim for any commission or compensation made by any person or entity
claiming to have been retained or coJ?tacted by Buyer in connection with, this transaction, and
Seller shall indemnify, ~efend and hold Buyer harmless from and against any liability, cost or
expense arising out of or connected with any claim for any commission or compensation made
by any person or entity claiming to have been retained or contacted by Seller in connection with
this transaction. This indemnity provision shall survive the Closing or any earlier tennination of
this Agreement. Broker shall not be deemed a party or third party beneficiary of this Agreement.
As a condition to Seller's obligation to pay the commission pursuant to this Section 14.1, Broker
shall execute the signature page for Broker attached hereto sol.ely for purposes of confirming the
matters set forth therein; provided, however, that (a) Broker's signature hereon shall not be a
prerequisite to 'the binding nature of this Agreement pn Buyer and Seller, and the same shall
become fully effective upon execution by Buyer and Seller, and (b) the signature of Broker will
not be necessary to amend any provision of this Agreement.
·
14.2 Notices. All notices, demands, requests and other communications required or
permitted hereunder shall be in wl'iting, and shall be (a) personally delivered with a written
receipt of delivery; (b) sent by a nationally-recognized overnight delivery service requiring a
written acknowledgement of receipt or providing a certificatiOn of delivery or attempted
delivery; (c) sent by certified or registered mail, return receipt requested; or (d) sent by
confirmed facsimile transmission with an original copy thereof transmitted to the recipient by
one of the means described in subsections (a) through (c) no later than three (3) business days
thereafter_. All notices shall be deemed effective when actually delivered as documented in a
delivery receipt; provided, however, that if the notice was sent by overnight courier or mail as
aforesaid and is affirmatively refused o.r cannot be delivered during cust<?mary business hours by
reason of the absence of a signatory to acknowledge receipt, or by reason of a change of address
with respect to which the addressor did not have either knowledge or written notice delivered in
1
accordance with this paragraph, then the first attempted delivery shall be deemed to constitute
delivery. Bach party shall be entitled to change its address for notices from time to time by
delivering to the other party notice thereof in the manner herein provided for the delivery of
notices. All notices shall be sent to the addressee at its address set forth followi.ng its name
below:
837305.01/SD
3740 I0-0000511-5-16/jllljll
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Exhibit 2
Page 37
---;
I
#:8584
To Seller/Receiver:
Krista L. Freitag
E3 Advisors
355 South Grand Avenue, Suite 2450
Los Angeles, California 90071
E-mail: [email protected]
Facsimile: (213) 943-1374
With a copy to:
Allen Matkins Leck Gamble Mallory & Natsis LLP
501 West Broadway, 15th Floor
San Diego, California 92101
Email: [email protected]
Facsimile: (619) 233-1158.
Attention: Jonathan L. Lorenzen, Esq.
To Buyer:
Sunland Properties, Inc,
8949 Buffalo Ave.
Rancho Cucamonga, CA 91730
Email: Cornerstoi:[email protected]
Facsimile:· 909-980-4024
Attention: Terrance Long
.
14.3 Confidentiality, Unless otherwise agreed to in writing by Seller and Buyer, each
pmty shall keep confidential all documents, contracts, prices, plans specifications, strategies,
marketing prograni.s, financial statements, reports or other information provided to, or generated
by the other party relating to the Property and shall not disclose any such infonnation to any
person other than: (a) employees, agents and attorneys of Seller or Buyer; (b) those who are
actively and directly participating in the t)Valuation of the Property, or the appraisal, investigation
or financing of the purchase or construction of the Property; and (c) governmental,
administrative, regulatory or judicial authorities in the investigation of the compliance of the
Property with applicable legal requirements. Buyer agrees to provide this confidentiality
provision to any consultant, contractor or employee to whom confidential information may be
disclosed and shall require any such consultant, contractor or employee to. be bound by this
confidentiality provision. Buyer expressly covenants and agrees that it shall not disclose any
code compliance, environmental or other regulatory matters to governmental or other authorities
without the express prior written approval by Seller unless required by law, in which case Buyer
shall immediately notify Seller thereof, Upon any termination of this Agreement for any reason,
Buyer shall promptly return to Seller copies of all documents or other information pertaining to
the Property provided to Buyer by Seller. Notwithstanding anything to the contrary contained
herein, Buyer hereby acknowledges that a copy of this Agreement shall be prnvided to
Prospective Bidders (as defined in Section 15.3, below) in connection with the Auction, in ·
accordance with and subject to the terms and conditions of Article 15, below, and that in no
837305.0l/SD
3740 l 0-00005/1-5-16/jllljll
-26-
Exhibit 2
Page 38
#:8585
event shall any such provision of this Agreement to Prospective Bidders be considered a
violation of the confidentiality requirements set f01ih herein. The provisions of this Section 14.3
shall survive the Closing or earlier termination·ofthis Agreement.
14.4 Assignment. Buyer shall not assign this Agreement without obtaining Seller's
prior written consent, which consent may be withheld by Seller in its sole and absolute discretion
for any reason whatsoever.
14.5 Bankruptcy. Buyer agrees that in the event that: (a) all or substantially all of
Buyer's assets are placed in the hands of a receiver or trustee, and such receivership or
trusteeship continues for a period of thirty (30) days; (b) Buyer makes an assignment for the
benefit of creditors; (c) Buyer is adjudicated a bankruptcy; (d) Buyer institutes any proceeding
under any law relating to bankruptcy wherein Buyer seeks to be adjudicated a banlcrupt, or to be
discharged of its debts, or to effect a plan of liquidation, composition ·or reorganization; (e) an
involuntary proceeding is filed against Buyer under any bankruptcy Jaws and Buyer consents
thel'eto or acquiesces therein by pleading or default or such involuntary proceeding is not
dismissed within ninety (90) days; or (f) substantially all of Buyer's assets are attached or seized
by judicial order where such seizure is not dischar(Sed within thirty (30) days then: (i) Buyer
shall be deemed to be in default hereunder, (ii) this Agreement, including without limitation the
rights granted herein, shall not become an asset in any of such proceedings; (iii) in addition to all
other available remedies it shall be lawful for Seller to declare this Agreement terminated; and
(iv) Buyer shall have no further claim on the Propetiy hereunder or otherwise, and no right to
return of its Deposit or an other payments or expenses incurred pursuant to this Agreement.
14.6 Not an Offer; Last Date for Submission. Seller's delivery of unsigned copies of
this Agreement is solely for the purpose of review by the party to whom delivered, and neither
the delivery nor any prior communications between the parties, whether oral or written, shall in
any way be construed as an offer by Seller, nor in any way imply that Selle1' is under any
obligation to enter the transaction which is the subj.ect of this Agreement. The signing of this
Agreement by Buyer constitutes an offer which shall not be deemed accepted by Seller unless
and until Seller has signed this Agreement and delivered a duplicate original to Buyer.
14. 7 Modification. This Agreement may not be modified or amended except by a
written agreement executed by Seller and Buyer, and only to the extent set forth therein.
14.8 Attorneys' Fees. In the event any legal or equitable action ls commenced in
connection with this Agreement or the Propetty, whether in contract or in tort, the prevailing
party (as determined by the court) shall be entitled to recover from the losing pa1ty all reasonable
costs and expenses incurred, including but not limited to reasonable attorneys' fees, in addition tp
all other relief and remedies to which the prevailing party may be entitled.
14.9 Successors and Assigns. Subject to the limitations on Buyer's right to assign, .
this Agreement sha11 be binding on, and shall inure to the benefit of, the successors and assigns
of the parties,
14.10 Duplicate Counterparts. This Agreement may be executed in duplicate
counterparts, all of which together shall constitute a single instrument, and each of which shall
837305.0J/SD
3740 I 0-00005/l-5-! 6/jll/jll
-27-
Exhibit 2
Page 39
#:8586
be deemed an original of this Agreement for all purposes, notwithstanding that less than all
signatures appear on any one counterpart.
14.11 Section Headings. The various section headings in this Agreement are inserted
for convenience ofreference only, and shall not affect the meaning or interpretation of this
Agreement or any provision hereof.
14.12 Survival of Covenants, etc. Except as otherwise expressly provided herein, all
agreements, conditions, acknowledgments, representations, and other obligations set forth in this
Agreement shall merge with the grant deed and shall not survive the Close of Escrow.
14.13 Days/Holidays. All references to days herein shall refer to calendar days unless
otherwise noted. When performance of an obligation or satisfaction of° a condition set forth in
this Agreement is required on or by a date that is a Saturday, Sunday or legal holiday, such
performance or satisfaction shall instead be required on or by the next business day following
that Saturday, Sunday or holiday, notwithstanding any other provisions of this Agreement.
14.14 No Recorded Memorandum. Prior to Close of Escrow, neither this Agreement
nor any memorandum hereof or reference hereto shall be filed in i:iny place ofpublfo record.
Failure of Buyer to comply with this Section shall be a material default by Buyer under this
Agreement and, at the election Seller, shall automatically and immediately terminate all of
Buyer's rights under this Agreement, and thereafter Buyer shall not have any right, title, or
interest in or to the Property whatsoever.
of
14.15 Exhibits. All Exhibits attached to, and to which reference is made in, this
Agreement are incorporated into, and shall be deemed a part of, this Agreement. .
·
14.16 Entire Agreement. This Agreement is tht< entfre ~greement of Seller and Buyer
with respect to the Property, containing all of the terms and conditions to which Seller and Buyer
have agreed. This Agreement supersedes and replaces entirely all previous oral and written
understandings, offers, counter offers, acceptances, if any, of Seller and Buyer respecting the
Property.
14.17 Time. Time is of the essence in this Agreement and each and every provision of
this Agreement.
14.18 Governing Law and Forum. This Agreement shall be governed, construed apd
enforced in accordance with the laws of the State of California. The exclusive forum for .
resolving disputes arising frqm or related to this Agreement, the Auction (defined below) or
closing of the sale shall be the Court in the Case ..
14.19 Severability. If any term, provision, covenant or condition of this Agreement is
found by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of
the Agreement shall continue in full force and effect and shall in no way be affected, impaired,
or invalidated.
14.20 Intentionally Omitted.
837305.01/SD
3740 I 0·00005/l-5-l 6/jll011
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Exhibit2
Page 40
.. I
#:8587
14.21 Joint Venture: It is not intended by this Agreement to, and nothing contained in
this Agreement shall, create any partnership, joint venture or other agreement between Buyer and
Seller. No term or provision of this Agreement is intended to be, or sh.all be, for the benefit of
any person, firm, organization or corporation not a party hereto, and no such other person, firm,
organization or corporation shall have any right or cause of action hereunder.
14.22 Intentionally Omitted.
14.23 Signer's Warranty. Each individual executing and delivering this Agreement on
behalf of a party hereby warrants and represents to the other party that he or she has been du! y
authorized and empowered to do so,
·
14.24 Multiple Buyers. As used in this Agreement, the term 11Buyer11 means all entities
acquiring any interest in the Property at the Closing, including, without limitation, any
assignee(s) of the original Buyer pursuant to Section 14.24 of this Agreement. In the event that
"Buyer" has any obligations or makes any covenants, representations or warranties under this
Agreement, the same shall be made jointly and severally by all entities being a Buyer hereunder.
In the event that Seller receives notice from any entity being a Buyer hereunder, the same shall
be deemed to constitute notice from all entities being a Buyer hereunder. In the event that any
entity being a Buyer hereunder takes any action, breaches any obligation or otherwise acts
pursuant to the terms of this Agreement, the same shall be deemed to be the action of the other
entity(ies) being a Buyer hereunder and the action of"Buyer" under this Agreement. In the event
that Seller is required to give notice or take action with respect to Buyer under this Agreement,
notice to any entity being a Buyer hereunder or action with respect to any entity being a Buyer
hereunder shall be a notice or action to all entities being a Buyer hereunder. In the event that any
entity being a Buyer hereunder desires to bring an action or arbitration against Seller, such action
must be joined by all entities being a Buyer hereunder in order to be effective. In the event that
there is any agreement by Seller to pay any amount pursuant t6 this Agreement to Buyer under
any circumstance, that amount shall be deemed maximum aggregate amount to be paid to all
parties being a Buyer hereunder and not an amount that can be paid to each party being a Buyer
hereunder. In the event that.Seller is required to return the Deposit or other amount to Buyer,
Seller shall return the same to any entity being a Buyer hereunder and, upon such 'return, shall
have no further liability to any other entity being a Buyer hereunder for such amount. The
foregoing provisions also shall apply to any documents to be executed pursuant to the provisions
this Agreement.
. of
ARTICLE15
SALE PROCEDURES FOR AUCTION
15.1 The Auction, The parties acknowledge it is a condition precedent to the Closing
that Receiver obtain the Court Approval and the Receiver shall seek such approval from the
Court. In the event of Buyer's approval, or failure to disapprove thls Agreement, on or prior to
the Contingency Date, as set forth in Section 4.1 (a) aboye, Receiver shall promptly file a motion
seeking Court Approval and set the motion for hearing on the Court's first available hearing date
after the minimum notice required for a noticed motion (the "Hearing Date"). Receiver.will
propose to the Court that the sale of the Property be subject to an auction (the "Auction")
conducted under the Court's supervision, ·
831305,01/SD
3740 l 0-00005/ l-S-I 6/jll/jll
-29-
Exhibit2
Page 41
#:8588
15,2 Overbids and Bid Increments. The minimum overbid for any Qualified Bidder
(as defined below) shall be no less than one hundred and one percent (101 %) of the highest bid
submitted by another party as of the date upon which such Qualified Bidder submits its overbid.
Only Qualified Bidders may make bids at the Auction. ·All bids are subject to overbids in
increments of Ten Thousand and No/100 Dollars ($10,000.00). The Court may reject any and all
bids following conclusion of the Auction,
15.3 Due Diligence Information, All prospective bidders ("Prospective Bidders")
shall have had the opportunity to inspect the Property and any documentation relating thereto
prior to the Auction. Prospective Bidders may also request access to infonnation about the
Prope1ty ("Due Diligence Information") and obtain a form purchase and sale agreement.
15.4 . No Representations and Warranties for Due Diligence Information. Any Due
· Diligence Information provided to Prospective Bidders is for informational purposes only and
provided without any wan·anty, guarnnty or representation by Receiver, or Receiver's Broker,
All Prospective Bidders shall conduct their own independent investigation and analysis regarding
the condition of the Prope1ty and its suitability for Prospective Bidders' intended use. Neither
the Receiver, nor the Receiver's Broker has made any representations, express or implied,
regarding the completeness or accuracy of the Due Diligence Information.
15.5 Qualified Bidder. To be determined a qualified bidder (the '.'Qualified Bidder"),
one must: (i) provide a fully executed purchase and sale agreement for the Property in form
substant\ally similar to. this Agreement ("Qualified Bid PSA"), .acceptable to the Receiver,
(ii) provide an earnest money deposit (the "Bid Deposit") by wire transfer or cashiel''s check iri
an amount equal to three percent (3%) of the purchase price undel' such Qtialified Bid PSA,
which amount shall be payable to the Receiver and shaH be non-refundable to the Qualified
Bidder with the highest bid at the Auction (the "High Bidder") if for any reason (a) the High
Bidder fails to finally close the sale such that title transfers by no later than the Closing Date or
(b) the High Bidder fails to provide the balance of the purchase pl'ice to the Receiver one day
prior to the Closing Date. Each Qualified Bidder must provide the Qualified Bid PSA and Bid
Deposit to the Receiver no later than seven (7) business days prior to the Hearing Date. The
Qualified Bidders shall appear at the Auction in person, or through a duly authorized
representative. The High Bidder's Bid Deposit shall be applied to the purchase price, if the sale
is approved by the Court.
15.6 Consent to Court Jurisdiction and Waiver of Jury Trial. All Qualified
Bidders appearing at the Auction shall have deemed to have consented to the Court's jurisdiction
and waived any right to jury trial in connection with any disputes related to the Auction, or the
closing of the sale. The Coutt shall be the exclusive forum for any such disputes.
to
15,7 Receiver's Right Determine Conduct of Auction. The Receiver reserves the
right to deny any person admittance to the Auction, to postpone or cancel the Auction, to
withdraw the Property from the Auction, and to change any terms or procedures of the Auction
or the particular conditions of sale, as necessary, upon notice to Buyer, and any Qualified
Bidders, prior to or at the Auction, without further Court order,
83730$,01/SD
3740 I0-00005/1-5·16/jll(jll
-30-
Exhibit 2
Page 42
.. I
#:8589
15.8 No Contingencies for Qualified Bidder. The sale to any Qualified Bidder of the
Property shall not be contingent upon the validity, effectiveness, and or binding nature of the
Qualified Bidder's offer, including without limitation, contingencies for :financing, due diligence
or inspection,
15.9 No Conditions Precedent for Qualified Bidder, The sale to any Qualified
Bidder of the Property shall not be subject to any conditions precedent to the Qualified Bidder's
obligation to timely consummate the sale transaction, and to pay the remainder of the purchase
price.
15.10 Auction Confirmation Order. The only authorized condition subsequent to the
Auction for the Qualified Bidder is entry of a Court order confitming the sale ~o the Qualified
·
Bidder (the "Auction Confirmation Order").
15.11 Conditions to Consummation of Sale Transaction Prior to and Following
Auction. The closing of any sale to a Qualified Bidder shall be subject to the following
conditions: (i) Receiver's review a.nd acceptance of the highest bid received from a Qualified
Bidder, (ii) entry of the Auction Confirmation Order, (iii) receipt of full payment on or before the
Closing Date such that the Property transfer can occur on or before such date, and (iv) prior to
Auction, waiver and reJease of all claims against the Receiver. If any of these foregoing
conditions are no~ satisfied, (a) the sale to the Qualified Bidder shall not be consummated, and
(b) any obligations of the Receiver shall also be terminated, including any obligations under the
Qualified Bid PSA.
15.12 Transfer of Title to Property Following Auction. Following the Auction, title
to the Property shall b~ transferred by Grant Deed, "AS~JS", WITHOUT REPRESENTATIONS
AND 'fVARRANTIES, to the High Bidder.
.
837305,01/SD
3740I0..00005/1·5·16ij1Vjll
-31-
Exhibit2
Page 43
#:8590
IN WITNESS WHEREOF, this Purchase and Sale Agreement and Joint Escrow
Instructions is executed and delivered by th.e parties as of the Effective Date.
SELLER:
KINGDOM CAPITAL MARKET LLC1
a Delaw · · ite~ liability comJPnY
Its: Receiver
BUYER:
Sunland Pl'operties, Inc.
::•li~or~
Naml:Slfl111Ywang
Its: President
6J7,Q5.011SO
JNillll·00005/l·~· lli·:lll·Jll
.32.
Exhibit2
Page 44
#:8591
ESCROW HOLDER SIGNATURE PAGE ·
The undersigned Escrow Holder hereby agrees to: (i) accept the foregoing Agreement;
(ii) be Escrow Holder under said Agreement; and (iii) be bound by said Agreement in the
performance of its duties as Escrow Holder, and hereby establishes
, 2016 as
the date of opening of escrow and d e s i g n a t e s - - - - - - - - - - - - - - - - as the escrow number assigned to this escrow
Dated:
Authorized Representative
837305.01/SD
3740 I0-0000511-5-16/jllljll
-33-
Exhibit 2
Page 45
--,
-- i
!
#:8592
BROKER SIGNATURE PAGE
The undersigned Broker hereby executes this Broker Signature Page solely to confirm the
following: (a) Broker represents only the Seller in the transaction described in the Agreement to
which this signature page is attached, (b) Broker aclmowledges that the only compensation due
·to Broker in connection with the Closing ofthe transaction described in the Agreement to which
this signature page is attached is as set forth in a separate agreement between Seller and Broker,
and (c) Broker represents and warrants to Seller that Broker and its affiliates has not and will not
receive any compensation (cash or otherwise) from or on behalf of Buyer or any affiliate thereof
in connection with the transaction, and do not, and will not at the Closing, have any direct or
indirect legal, beneficial, economic or voting interest in Buyer (or in an assignee of Buyer, which
pursuant to Section 14.4 of the Agreement, acquires the Property at the Closing) nor has Buyer
granted (as of the Effective Date or the Closing Date) the Broker or any of its affiliates any right
or option to acquire any direct or indirect legal) beneficial, economic or voting interest in Buyer.
BROKER: .
WREALTYGROUP
Sl 7305.01/SD
~74010·00005112-29·1 $/jll/jll
Exhibit 2
Page 46
#:8593
Exhibit List
Exhibit "A"
Exhibit "B"
Exhibit "B-1"
Exhibit "C
Exhibit "D"
Exhibit "E"
Exhibit "F"
Exhibit "G"
Exhibit HH
Exhibit "I"
Legal Description of the Land
Personal Property
Pro Shop Inventory
Contracts
Special Events
Assignment of Contracts
Bill of Sale
General Assignment
Leases Assignment
Grant Deed
837305,01/SD
3740 I0-00005/l ·5· 16/jll111
-35-
Exhibit2
Page 47
#:8594
Exhibit A
Legal Description
THE LAND NEFERRED ro HERErN BEL9W rs .SITUATF;D IN '.!1IB COt1NIY OF RIVERSIDE, STATE OF
C.l\LIFORNIA, AND IS DESCRIBED AS FOILOWS:
PARCEL I: APN 290--040-D6H, 29M9D-004-0, 290-2$0-002"7, 29Mll.0-003-8, 290-280-004-9, 290-190-013-3 AND 29().:.
190-074-4
.
CO:MMON OPEN SPACE LOT 257 OF TRACT 29416-1. A.$ SHOWN BY MAP ON FILE IN BOOK 306 PAGES 60.
THROUGH 86 OP MAPS. RECORDS o.F RIVERSIDE COUNTY, CALlFORNIA;
.
EXCEPTING THEREFROM THAT PORTION OF SAID LOT257 LY.ING '"W'ITBIN TRACT NO. 30&19, As. SHOWNB\"
lN BOOK 336, PAGES 78 THROUGH 93 OF MAPS, RECORDS OF RIVERSIDE COUNTY,
CALIFOThlJA.
:lvfAP 01'! FILE
ALSO EXCEPTING UIBR:EFROM TffAT PORTION OF SAID LOT 157 LYING WITIIlN TRACT NO. :H742; AS
SHOWN BY MAP ON FILE IN 1300'K 373, PAGES SB WROUGR ito OF lVIAPS, RECORDS OF RIVERSIDE
COUNTY, CAliFORNIA.
. . ..
.
.
ALSO EXCEPTING 'fHPREFROM THAT PORTION OF SAID LOT 2:)7 LYI~(r WlTIIlN TRACT NO. 31662, A~
SHOWN BYM,i\P ONFJLE IN BOOK 384, PAGES '72 THROUGH 7 OF IvfAf>.S, RECORDS' OF RIVERSIDE COUNTY,
CALIFORNJA.
Aiso EXCEPTING TimREFRprvr Aii MINERALf), OIL AW NATURAL
GA~S A$
RESERVED'Il'f nm DEE[)
FROM LEOPOLD H. SMITH, ET AL, JWG6RDEDMAY 19, 19;\l IN'BOOK545 .PAGE436 OF OFFICIAL RECOEJ)$,
RECORDS OF RIVERSIDE C0U:NTY, CALIFORNIA,,
' ....
PARCEL2: APN290..190-078-8
COMMON OPEN SPACE LOT 465 OF TRACI' 29416-1, AS SHOWN BY .MAP ON FILE IN BOOK 306, ;FAGES 60
THROUGF): 86 OF MAPS, RE.CORDS. OF RIVERSIJ)E COUNTY, CALWORNIA.
EXCEPTING THEREFROM ALL MINERALS, OIL AND NATURAL. GAsES AS RESERVED IN' TIIBDEBD FROM
LEoPOID H. S1Y1ITH, ET AL. RECORDED lvIAY 19~ 1921 IN BOOK 54-5. PAGE 436 OF DEEDS.' RECORDS. OF
RfVERSIDE COUNTY, CALlFORNIA.
P AR.CBL 3: APN 290-420-048~1 AND 1.90-420-Q49-2
COMMON OPEN SPACE LOT 389 OF 1'RACT 30819, AS SHOwN )':lY J\.fAF ON FILE IN BOOt{ 336 PAGES 78
TROUGH 93 OFM.APS,RECORDS OF RIVERSIDE COUNTY. CALlROR1'.'Ik
EXCEPTING THEREFROM ALL 1\1INERALS, OIL A1'ID NATURAL GASES AS RESERVED IN nIE .DEED FRO:fy!
LEOPOLD Ii SMITH, ET AL, RECORDED MAY 19, 1921 JN BOOK 545, PAGE 436 OF DEEDS. RECORDS OF
RIVERSIDE COUNTY, ClJ.JPORNIA.
PARCEL 4: APN 290-190-076-6
COJv!MON SPACE LOT 263OFTR,ACT19416-1 AS SHOWN BY MAP ONFILEINBOOK306. PAGES 60 TBROUGR
86 OF MAPS. RECORDS OF RIVERSIDE COUNTY, C'.ALlFORNIA.
EXCEPTING THEREFROM ALL MINERALS, OJLS AND NATURAL GASES, .AS RESERVED lN nIE DEED FROM
LEOPOlDO HS.MITH, Et AL, RECORDED MAY 19, 1921INBOOK545, PAGE 436 OF DEEDS, RECORDS OF
.RIVERSIDE COUNfY, CALIFORNIA.
837305.01/SD
3740 I 0-00005/l-5-16/jll611
Exhibit A
-1-
Exhibit2
Page 48
#:8595
ExhibitB
Personal Prope1iy
[to be provided]
837305.01/SD
3 740 l 0·00005/1-5-16/jll/jl!
Exhibit B
-1-
Exhibit 2
Page 49
#:8596
Exhibit B-1
Pro Shop Inventorv
[to be provided]
837305.01/SD
374010-00005/1-5-16/jll/j!l
ExhibitB-1
-l-
Exhibit2
Page 50
.. i
#:8597
Exhibit C
Contracts
1,
Golf Cart Lease Agreement dated March 8, 2013 by and between Dae Yang USA, Inc.,
Seller's predecessor-in-interest, as "Lessee," and PNC Equipment Finance, LLC, as
"Lessor," for the lease of certain "E-Z-GO" golf carts, as more particularly described in
the Golf Catt Lease
[ADDITIONAL CONTRACTS TO BE PROVIDED]
83730S.Ol/SD
3740 I 0.00005/1+16/jll/jll
Exhibit C
-1-
Exhibit2
Page 51
#:8598
ExhibitD
Special Events
[to be provided; please note that this list will only include tournaments and prepaid greens fees
·
and not any events by Wedgewood]
83730S,0!/SD
3740 I 0-0000S/l-S· !6/jll,lill
ExhibitD
-1-
Exhibit 2
Page 52
--------------
-- 1
#:8599
ExhibitE
Form of Assignment and Assumption of Contracts
THIS ASSIGNMENT AND ASSUMPTION OF CONTRACTS (this "Assignment of
Contracts") is made and entered into as of the_ day of
, 2016 (the "Effective
Date") by and between KINGDOM CAPITAL MARKET LLC, a Delaware limited liability
company, by and through Krista L. Freitag, solely in her capacity as Receiver, appointed by the
United States DistriOt Court for the Central District of California ("Assignor") and
_____________·_("Assignee").
Assignor and Assignee entered into that certain Purchase and Sale Agreement and Joint
Escrow Instructions dated
· , 20_ ("Agreement") with respect to the sale and
purchase of the "Property" described therein. Capitalized terms used herein but not otherwise
defined herein shall have the meanings given. to them in the Agreement.
Assignor desires to assign, transfer and convey to Assignee all of Assignor's right, title
and interest in and to those certain contracts and other agreements relating to the Property listed
on Schedule 1 attached hereto (the "Assigned Property Contracts"), and Assignee desires to
accept s~ch assignment, transfer and conveyance of the Assigned Property Contracts and to
assume and perform all of Assignor's covenants and obligations in and under the Assigned·
Property Contracts.
NOW, THEREFORE, in yonsideration of the foregoing recitals and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor
and Assignee hereby agree as follows:
1.
Assignment of Contracts. Assignor hereby assigns, transfers and conveys to
Assignee all of Assignor's right, title und interest in and to the Assigned Property Contracts from
and after the Effective Date. Assignor hereby agrees to indemnify, defend and hold harmless
Assignee from and against any and all cost, liability, loss, damage or expense including, without
limitation, reasonable attorneys' fees and expenses arising out of or in any way related to
Assignor's actual or purported breach of any Assigned Property Contract prior to the Effective
Date.
2.
Assumption and Acceptance. Assignee hereby accepts the above assignment
and transfer and expressly assumes and covenants to keep, perform, fulfi11 and discharge all of
the tenns, covenants, conditions and obligations required to be kept, perfonned, fulfilled and
discharged by Assignor under the Assigned Property Contracts from and after the Effective Date.
3,
No Warranties. Assignee does hereby acknowledge that (a) Assignor is
assigning, transferring and conveying the Assigned Property Contracts to Assignee without any
warranty of any kind or nature, and (b) such assignment, transfer and conveyance by Assignor
are subject to any limitations and restrictions which the terms of any of the Assigned Prope1ty
Contracts impose on Assignor's right or ability to transfer the same. This Assignment of
Contracts shall not be construed as a representation or warranty by Assignor as to the
837305,01/SD
3740 I 0-00005/J ·S-16/jllQIJ
ExhibitE
-1-
Exhibit 2
Page 53
#:8600
assignability, transferability or enforceability of any or all of the Assigned Property Contracts,
and Assignor shall have no liability to Assignee in the event that any or all of the Assigned
Property Contracts (i) are not assignable or transferable to Assignee or (ii) are cancelled or
terminated by reason of this Assignment of Contracts or any acts of Assignee.
Counterparts. This Assignment of Contracts may.be executed in counterparts,
4.
each of which shall be deemed an original, and both of which together shall constitute one and
the same instrument.
5.
Attorneys' Fees. If any action or proceeding is commenced by either party to
enforce its rights under this· Assignment of Contracts, the prevailing party in such action 01·
proceeding shall be awarded all reasonable costs and expenses incurred in such action or
proceeding, including reasonable attorneys' fees and costs (including the cost of in~house counsel
and appeals), in addition to any other relief awarded by the court.
6.
Applicable Law. This Assignment of Contracts shall be governed by and
interpreted in accordance with the laws of the State of California.
7.
Binding Effect. This Assignment of Contracts shall be binding upon and inure to
·
the benefit of the parties hereto and their respective transferees, succe~sors, and assigns.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
837305.01/SD
3740 I0-00005/J-5-IGljll~ll
ExhibitE
-2-
Exhibit2
Page 54
--------------------- -- l
#:8601
'
I
IN WITNESS WHEREOF, Assignor aµd Assignee have duly executed this Assiirunent
!
of Contracts as of the Effective Date.
Seller:
KINGDOM CAPITAL MARKET LLC,
a Delaware limited liability company
I.
By: ~~~~~~~~~~~~-
Name: KristaL. Freitag
Its: Receiver
:Buyer:
~
837305.01/SD
3740 IO·OOOOS/! ·8·16(111,jll
ExhibitE
+
Exhibit 2
Page 55
#:8602
Schedule 1
ASSIGNED PROPERTY CONTRACTS
[to be attached]
837305,01/SD
37401 O-ODDDSll-S-16/jll/jll .
ExhlbitE
-4·
Exhibit2
Page 56
#:8603
ExhibitF
Form of Bill ofSale
BILL OF SALE
.
I
FOR VALUE RECEIVED, KINGDOM CAPITAL MARKET LLC, a Delaware limited
liability company ("Seller"), by and through Krista L, Freitag, solely in her capacity as Receiver,
appointed by the United States District Court for the Centrnl District of California, hereby sells,
conveys and assigns to
("Buyer"), all of Seller's right, title an~ interest in
and to the following:
That certain personal property described on Schedule 1 attached hereto and incorporated
herein by this reference (collectively, the "Personal Property").
Seller makes no warranties of any kind or nature whatsoever, ex.press or implied,
including without limitation any warranty of merchantability or fitness for a particular purpose,
with respect to any of the Personal Property transferred hereby, any and all such warranties being
hereby expressly disclaimed, Buyer hereby assumes all liabilities and obligations in C?nnection
with or arising under the matters assigned under this agreement to the extent arising after the date
of execution set forth below.
TO HAVE AND TO HOLD unto the.grantee and its successors and assigns forever.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
837305.01/SD
374010·00005/1·5-l6/jll/jll
ExhibitF
-1-
Exhibit 2
Page 57
.. I
#:8604
IN WITNESS WHEREOF, Seller and Buyer have ·executeq this Bill of Sale as of the
_day of
, 2016.
Seller:
KINGDOM CAPITAL MARKET ~LC,
By:~~~~~~~~~~
Name: Krista L. Freitag
Its: Receiver
Buyer:
837305.01/SD
3740 I0-00005/1·8·16/jll(Jll
ExhibitF
-2-
Exhibit 2
Page 58
#:8605
Schedule 1
PERSONAL PROPERTY
[to be attached]
83730$,0l/SD
374010-0000;11-s-16/jll{ill
Exhibit F
-3-
Exhibit 2
Page 59
-- !
#:8606
ExhibitG
Form of General Assignment
GENERAL ASSIGNMENT AND ASSUMPTION
This General Assignment and Assumption (this "Assignment") is executed by
KINGDOM CAPITAL MARKET LLC, a Delaware limited liability company ("Seller"), by and
through Krista L. Ft'eitag, solely in her capacity as Receiver, appointed by the United States
District Court for the Central District of California, in favor of
,a
_ _ _ _ _ _ ("Buyer") as of
, 2016 (the "Effective Date''.).
Seller and Buyer have entered into that. certain Purchase and Sale Agreement and Joint
Escrow Instructions dated as of
____, 2016 ("Agreement"),, in which Seller has
agreed to sell and Buyer has agreed to purchase tl:ie real property described in Exhibit A attached
thereto and the improvements located thereon (collectively, the "Project"). Capitalized terms
not otherwise defined herein shall have the meaning a,scribed to them in the Agreement.
Pursuant to the Agreement, Seller has agreed to assign, without recourse or watTanty, to
Buyer all of Seller's right, title and iqterest, if any, in and to the Warranties, the Intangible
Property and the Permits.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency.of
which are hereby aclmowledged, Seller and Buyer agree as follows:
1.
Assignment. As of the Effective Date,, Seller hereby assigns, sells and transfers,
without recourse or warranty, to Buyer all of Seller's right, title and interest, if any, in and to the
Warranties, the Intangible Prope1ty and the Permits.
2.
Assumption, As of the Effective Date, Buyer expressly agrnes to assume and
hereby assumes all liabilities and obligations of the Seller in connection with the Warranties, the
Intangible Propyrty and the Permits.
Counterparts. This Assignment may be executed in'counterparts, each of which
3.
shall be deemed an original, and both of which together shall' constitute one and the same
instrument.
Attorneys' Fees. If any action or proceeding is commenced by either party to
4.
enforce its rights under this Assignment, the prevailing party in such action or proceeding shall
be awarded all reasonable costs and expenses incun-ed in such action or proceeding, including
reasonable attorneys' fees and costs (including the cost of in-house counsel and appeals), in
addition to any other relief awarded by the co mt.
5.
Applicable Law. This Assignment shall be governed by and interpreted in
accordance with the laws of the State of California.
837305,0l/SD
374010·00005/1·5·l6~11/jll
Exhibit G
-1-
Exhibit 2
Page 60
#:8607
6.
Binding Effect. This Assignment shall be binding upon and inure to the benefit
of the patties hereto and their respective transferees, successors, and assigns,
WITH RESPECT TO ALL MATIERS TRANSFERRED, WHETHER TANGIBLE OR
INTANG IBLE, PERSONAL OR REAL, SELLER EXPRESSLY DISCLAIMS AWARRANTY
OF MERCHANTABILITY AND WARRANTYFORFITNESS FORA PARTICULAR USE
OR ANY OTHER WARRANTY EXPRESSED OR IMPLIED THAT MAY ARTSE BY
OPERATION OF LAW OR UNDER THE. UNJFORM COMMERCIAL CODE FOR THE
STA TE IN WHICH THE PROPERTY IS LOCATED (OR ANY OTHER STATE).
[SIGNATURES APPEAR ON FOLLOWING PAGE]
837305.01/SD
3740 IO-OOOOS/1-S-!6/jll~ll
Exhibit G
-2-
Exhibit2
Page 61
--
···1
#:8608
IN W11NESS WHEREOF, Seller and Buyer have duly executed this Assignment as of
the day and year first above written..
Dated: - - - - - ' · 2016
Seller:
KINGDOM CAPIT~ MARKET LLC,
a De.laware limited liability. company
By: _ _ _ _ _ _ _ _ _ __
Its: Receiver
Buyer:
837305.0 l/SP
374010.00005'.1-8-16-0llljll
Exhibit G
-3-
Exhibit 2
Page 62
.. I
#:8609
E:xhibitH
Form of Leases Assignment
ASSIGNMENT AND ASSUMPTION OF LEASES
This Assignment and Assumption of Leases (this "Assignmenf') is executed by and
between KINGDOM CAPITAL MARKET LLC, a Delaware limited liability company
("Assignor"), by and through Krista. L. Freitag, solely in he1· capacity as Receiver, appointed by
the United States District Court for the Central District of California, and
·
------------·'a
("Assignee"), as of
- - - - · ' 2016 (the "Effective Date'').
Assignee and Assignor have entered into that ce1tain Purchase and Sale Agreement and
Joint Escrow Instructions, dated
, 20_ ("Agreement"), in which Assignor
has agreed to sell and Assignee has agreed to purchase the real property described on Exhibit A
attached hereto and the improvements located thereon (collectively, the "Project").
Assignor, as landlord, has entered intO certain leases for the use of the Project by tenants
(collectively, together with all amendments, modifications, supplements, restatements and
guarantees thereof, the "Leases") for the Project.
The Agreement requires Assignor and Assignee to execute this Assignment.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Assignor and Assignee hereby agree.as follows:
1.
Capitalized Terms. Un less the context otherwise requires, all capitalized terms
J.Jsed, but not othernise defined herein, shall have the meanings set forth for the same in the
Agreement.
2.
Assignment and Assumption. As of the Effective Date, Assignor hereby
· irrevocably assigns, sets over, transfers and conveys to Assignee all of Assignor's right, title and
interest in and to the Leases. Assignee hereby accepts this Assignment and the rights granted
herein, and Assignee hereby expressly assumes, for itself and its successors, assigns and legal
representatives, the Leases and all of the obligations and liabilities, fixed and, contingent, of
Assignor thereunder accruing from and after the date hereof with respect to the Leases and
agrees to (i) be fully bound by allofthe terms, covenants, agreements, provisions, conditions,
obligations and liability of Assignor thereunder, which accrue from and after the date hereof, and
(ii) keep, perform and observe all of the covenants and conditions contained therein on the part
of Assignor to be kept, performed and observed, from and after the date hereof,
3.
Indemnification. Assignee shall indemnify, protect, defend and hold harmless
Assignor from and against any and. all claims incm1·ed by Assignor with respect to the Leases
assigned herein,
83730;5.0 I/SD
374010·0000;5/J-S-l6~11l~ll
. ExhibitH
-1-
Exhibit2
Page 63
.. i
.. I
#:8610
4.
General Provisions,·
a. · Successors. This Assignment shall inure to the benefit of, and be binding
upon, the parties hereto and their respective successors and assigns. ·
Counterparts. This Assignment may·be executed in as many
· b.
counterparts as may be deemed necessary and convenient, and by the different parties hereto on
separate counterparts, each of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute one and the same instrument.
c.
Governing Law. This Assignment and the legal relations between the
parties hereto shall be go.vemed by and construed and enforced in accordance with the laws of
the State wherein the Project is located, without reference to the conflict of law provisions
thereof.
d.
Attorneys' Fees. If any action or proceeding is commenced by either
party to enforce its rights undeF this Assignment, the prevailing party in such action or
proceeding shall be awarded all reasonable costs and expenses incum'.ld in such action or
proceeding, including reasonable attorneys' fees and costs (including the cost of in-house
counsel and appeal~), in addition to any other relief awarded by the court.
[SIGNATURES ON FOLLOWTNG PAGE]
837305,01/SD
3740l0·00005/1 ·5-16/jll/jll
ExhjbitH
-2-
Exhibit 2
Page 64
i
--1
-
#:8611
. WITNESS the signatures of the undersigned.
Dated:_ _ _ _ _ , 2016
Seller:
By: ~~~~~~~~~~~~~
Its: Receiver
Buyer:
837305,01/SD
3740 I0-00005/J -8-l 6/jllijll
ExhibitH
+·
Exhibit 2
Page 65
#:8612
Exhibit A
To Assignment And Assumption Of Leases
LEGAL DESCRIPTION FOR TIIE PROJECT
TBE LAND REFERRED T0 HEREIN BELOW IS SITUATED IN THB ·COUNTY OF RMRSIDE,. STATE OF
CALIFO~ AND IS DESCRIBED As. FOLLOWS:
.
.
.
.
.
PARCEL 1: APN2.90..()40-064.:.I, 290-290-004-0, 290-280-002-7,290-280-003-8, 290-280-004--9, 290-190-073-3.AND 290190.074-4
COMMON OPEN SPACE LOT 257 OF TRACT 29416-1, AS SHOV.IN BY MAP ON FJLE IN BOOK 306 PAGES 60
THROUGH 86 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CAlJFQRNIA;
.
EXCEPTING THEREFROM THAT PORTION OF SAID LOT 257'LYJNG VlITIDN TRACT NO; 30819, AS sHoWNBY
MAP ON FILE IN BOOK 336, PAGES 7S THROUGH. 93 OF MAPS, RECORDS OF RIVERSIDE COUNTY,
CALlFORNLJ\..
ALSO EXCEPTING THEREFROM IBAT PORTION OF SAID LOT 257 LYING WITIIIN TRACT NO. 31742, AS
SHOW'N BY MAP ON FJiE IN BOOK 373. PAGES SS THROUGH 11-0 OF MAPS. RECORDS OF RIVERSIDE
COUNTY, CAL)FORNIA.
.ALSO EXCEPTING THEREFROM THAT PORTION OF SAID LOT 2'17 LYING WITH1N TRACT NO. 31662, AS
SHO'WNBYM.AP OJ:fFILE Il';rBOOK 384, PAGE$ 72 THROUGH 7 OF lvfAPS, RECORDS OF .\liVEiIB!DE COUNTY,
C~l\.LIFORNJA.
~~1~g~~~i=~%,~c~JA~Y9..~~ :~4~~~EA~~~~~~g~~
RECORDS OF .IUVERSIDE COUNTY, CALIFORNIA,
PARCEL 2: APN 290-190-078-8
COMMON OPEN SPACE LOT 265 Ol"TRAGT 29416-1, AS SHOWN BY MAP O:~ FILE IN BOOK306, PAGES 60
·THROUGH So OF MAPS, RECORDS OF RIVERSIDE COUITT'Y, CALJFORNIA.
EXC.'EPTING THEREFROM ALL MINERALS, OlL AND NATURAL GASES AS RESER\IED IN THE.DEED FR6M
LEOPOLD H. SNlIIH, ET AL, RECORDED 'MAY 19~ ·1921 IN BOOK 545_ PAGt.436 OF DEEDS, RECORDS OF
RIVERSIDE COUNTY, CALIFORNIA..
PARCEL 3: APN 290-420--048-1 AND 290-420'049-2
COMMON OPEN SPACE LOT 389 ·op TRACT 30iH9~AS· SHOWN BY MAP O'I'f FILE JN BOOK 336. PAGES 78.
TROUGH 93 OFM:APS, RECORDS OF RIVERSIDE COUNT¥, CAUFOJh.rrA;
.
BXCEPTI~'lG
TIIBREFROM ALL MINERALS, OIL AND NA'iURAL GASES AS RESERVED IN 'I'HE.Dl)Eb ;FROM
LEOPOLD H . s1v:rrrn; ET AL, RECO.RiiED MAY 19, 1921 IN' BOOK 545, PAGE 436 OF DEEDS, RECORDS OF
RIVERSIDE COUNTY, CALIFORNIA.
.
PARC'BL 4:APN290-190-076-6
COMMON SPACE LOT 263 OF TRACT 29416-1 AS (IBOWNBYMAP O:N'FILE INBOOK 3Q6, PAGES 60 THROUGH
86 OF 'MAPS RECORDS OF filV'E.Rsli:>E cotimY, CALlFORNIA
.
EXCEPTING TIIBREFROM ALL Mll\1ERALS,' OILS AND NATURAL GASE!.>. AS .RESERVED IN THE DEED FROM
LEOPOLDO H SMTIH, .E'i''AL, R.ECORDED MAY 19, 1921INBOOK54{.PAGE 436 OF DEEDS, RECORQS OF
RIVERSIDE COUNTY, CAi.IFORNIA.
.
837305,01/SD
374010·0000511-5-16/jll/jll
ExhibitH
-4-
Exhibit2
Page 66
.. I
.. I
#:8613
Exhibit I
Grant Deed
Re'cording Requested by,
When Recorded Return to and
Mail Tax Statements to:
SPACE ABOVE THIS LINE FOR RECORDING USE
GRANT DEED
THE DOCUMENTARY TRANSFER TAX rs NOT FOR PUBLIC RECORD.
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, KINGDOM
CAPITAL MARKET LLC, a Delaware limited liability company (''Gran tor"), by and through
Krista L. Freitag, solely in her capacity as Receiver, appointed by the United States District
Court for the Central District of California, hereby grants t o - - - - - - - - - - that certain real property located in the County of Riverside, State of California, more
particularly described in Exhibit "A" attached hereto (the "Land"), together with all right, title
and interest in and to all buildings and improvements now located or hereaft.er constructed on the
Land, subject to the following:
1. nondelinquent general, special and supplemental real property taxes and assessments, and
2. all other covenants, agreements, conditions, restrictions, reservations, rights, rights-ofway, dedications, offe1·s of dedication and easements ofrecord,
[Signatures on following page]
837305,01/SD
3740 I0-000-05/1-5-16/jllljll
Exhibit I
Exhibit 2
Page 67
. i
#:8614
IN WITNESS WHEREOF, Grantor has executed this Grant Deed as of _ _ __
'2016.
GRANTOR:
By: ~~~~~~-~~~~
Its: Receiver
837305.01/SD
374010-00005/l-S-16/jll/jll
Exhibit I
-2-
Exhibit2
Page 68
--,
'
#:8615
EXHIBIT "A" TO GRANT DEED
LEGAL DESCRIPTION
THE LAND REFERREJ:) 'TO HEREIN BELOW IS SITUATED. IN' 'IRE CQUNTY OF ~E. STATE OF
CALIFORNIA, AND IS DESCRIBED A.S-FOI:.LOWS;
PARCEL 1: APN 290-040-06+1, 290-290-004-0, 290--280--002..."1; 290-280~00:3-8, 290-2S0-004~9. 290-190-013-3 AND 290~
190-074-4
COMMOJ:.f OPEN SPACE LOT 257 OF TRACT 19416•1, As SHOWN BY MAP ON FJLE IN BOOK306. PAGES 60
IBROUGH a6 OF IyfAPS, RECORDS-OF .RIVERSIDE COUNTY, CALIFORNIA;
EXCEPTING THEREFROM IBAT PO'.RTION OF SAID LOT 257 LYlNG\.VITHlN T.R:ActNO. $0B19, AS SHOWN BY
MAP ON FlLE IN BOOK 3315, PAGES 7B THROUGH 93 OF lvfAPS, RECORDS OF R!VERSIDE CODNTY.
CALIFO'.RNIA.
.
ALSO EXCEPTING THEREFROM THAT PORTION OF SAID LOT 157 LYING WITHIN TRACT NO. 31742, AS
SHOWN BY MAP ON FILE IN' BOOK 373, PAGES 88 T.HROUGR 110 OF MAPS. R'.ECORDS OF ruvERBIDE
COUNTY, CALIFORNIA. .
.
.
'
ALSO EXCEPTING THEREFROM 1HAT PORTION OF SAID LOT 257 LYING WITiillf TRACT NO_ 31662, AS
SHOWN BY 1\1AP ON FILE IN BOOK 384. PAGES 72 THROUGH 7 OF lv.IAPS, RECORDS OF RIVERSIDE COUNTY.
CALIFORNIA.
ALSO EXCEPTING THEREFROM AU :MINERALS, OJI, AND NA'tURAt GA~S AS RESERVED ·IN' tBE DEED
FR.OM LEOPOLD H. SlvfiTH, ET AL, RECORDED MAY 19, 1921IN'BOOK545; PAGE 4-36 OF OFEICIAL RECORDS,
RECORDS OF lliVERSIDE CODNTY, CALIFORNIA.
.
;?ARCl3L2: A1W290-190-07S-8
COMMON OPEN SPACE LOT 265 OF TRACT 294l6-l, AS SHOWN BY ?v!AP ON FITE )NBOOK 306, PAGES 60
TI:IROUGH 86 OF l\1APS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA,.
EXCEPTING THEREFROM ALL lvfINERALS, OIL AND NATURAL GASES ·AS RE-SERVED IN TiiE D:QED FR.OM
LEOPOLD R SMI'IH, ET AL. RECORDED MAY 19, 1921 IN BOOK 54~ PAGE 436 OF DEEDS, RECORDS OF
.RIVERSIDE COUNTY, CALIFORNIA
PARCEL3: APN29o.420-()48-.1AND2.90420--04-9-2
COMMON OPEN SPACE LOT 389 OF
TRACT 30Si9, .AS- Sl:i:OWlf BY MAP ON FILE IN BOOK 330.
PAGES 7&
1ROUGH 93 OFlyLl\PS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA;
EXCEPTING THEREFROM ALL MJNERALS, OIL AND NATURAL GASES AS ·RESERVED IN THE DEED .FROM
LllOPOLD H, SMITH, E·'J;' AL, RECORDEP MAY 19, 1921 JN' BOOK 545.. PAGE '436 OF DEEDS, RECGRDS OF
Rl:V:BRSIDE COUNTY, CALIFORNIA.
.
..
PARCEL4: APN290-190-076-6
COMMON SPACE LOT 263 OF TRACT 29416-1 AS SHOWN'BYlvl,AP O:l'l'ELE IN1300K306. PAGES 60 TEROUGH
86 OF MAPS. RECORDS OF RIVERSIDE COUNTY, cALiFom
.
EXCEPTING THEREFROM ALL :MINERAL,S, OILS AND NATIJRAL GASES, AS RESERVED m. TirE DEED FROM
LEOPOLDO Ii Sl'vll'IH; ET AL. RECORDED JvfAY 1,9, 1921 IN BOOK 545, PAGE 436 OF. DEEDS; RECORDS OF'
RIVERSIDE COUNTY, CALIFORNIA,
.
837305.01/SD
3 740 I 0-0000~/1-5-16/JILjll
Exhibit I
-3-
Exhibit 2
Page 69
- -- i
#:8616
On
, 20 , before me, _ _ _ _ _ _ _ _ _ _ _, the_ undersigned, a
Notary Public in and for said State, personally appeared:
Name ofSigner(s)"
Who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalfofwhich the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
·
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature _ _ _ _ _ _ _ _ _ _ _ _ __
837305,01/SD
374010-00005/J -~- 16/jll/jll
Exhibit I
-4-
Exhibit 2
Page 70

Motion for Order Approving, 1) Sale of Glen Ivy Golf

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