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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
- --- OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED August 1, 1997
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
- --- OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ___________ TO ___________
COMMISSION FILE NUMBER 0-19830
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Eagle Hardware & Garden, Inc.
-----------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Washington 91-1465348
---------- ----------
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
981 Powell Ave SW Renton, WA 98055
-------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(425) 227-5740
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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO
--- ---
THE REGISTRANT HAD 29,037,106 SHARES OF COMMON STOCK, WITHOUT PAR VALUE,
OUTSTANDING AT AUGUST 1, 1997.
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EAGLE HARDWARE & GARDEN, INC.
INDEX TO FORM 10-Q
PAGE
PART I - FINANCIAL INFORMATION.......................................... 3
ITEM 1 - FINANCIAL STATEMENTS...................................... 3
Consolidated Balance Sheets.................................... 9
Consolidated Statements of Operations.......................... 10
Consolidated Statements of Cash Flows.......................... 11
Notes to Unaudited Consolidated Financial Statements........... 12
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS............................................. 3
PART II - OTHER INFORMATION............................................. 7
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS.......................................... 7
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K.......................... 7
Exhibit 11.1 - Computation of Net Income Per Share............. 13
2
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PART I - FINANCIAL INFORMATION:
ITEM 1 - FINANCIAL STATEMENTS -
Eagle Hardware & Garden, Inc.'s (the "Company") unaudited consolidated
balance sheet as of August 1, 1997, audited consolidated balance sheet as of
January 31, 1997, unaudited statements of operations for the 13- and 26-week
periods ended August 1, 1997, and July 26, 1996, and unaudited consolidated
statements of cash flows for the 26-week periods then ended are attached. Notes
to the unaudited consolidated financial statements are also attached.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS -
It is suggested that this discussion be read in conjunction with the
"Management's Discussion and Analysis" included in the Company's 1996 Annual
Report to Shareholders, which has previously been filed with the Securities and
Exchange Commission.
The results of operations for the 13- and 26-week periods ended August 1,
1997, are not necessarily indicative of the results to be expected for the full
fiscal year. The Company expects that its gross margin percentage will
generally be lower in the second and third quarters of each fiscal year when
sales of lower margin products are greater. The Company also expects that, in
general, individual stores will experience lower net sales and operating income
and that cash flow from operations will be lower in the fourth quarter of the
fiscal year than in any of the other quarters, due primarily to the effect of
winter weather on home improvement projects and the lack of significant sales of
lawn and garden products during this period. In addition, unusual weather
conditions could have a material adverse effect on seasonal sales.
"Store Weeks in Period" represents the aggregate number of full weeks in
which stores were open during the reporting period. There were 390 store weeks
of operations during the second quarter of fiscal 1997, an increase of 25%
compared to the 312 store weeks during the comparable prior year period. For
the 26 weeks ended August 1, 1997, total store weeks increased 23% from 624 in
1996 to 765 in 1997.
RESULTS OF OPERATIONS -
(a) COMPARISON OF THE 13 WEEKS ENDED AUGUST 1, 1997, AND JULY 26, 1996.
NET INCOME. Net income for the second quarter of fiscal 1997 was $13.0
million, or $0.41 per share, fully diluted, compared to $8.1 million, or $0.32
per share, during the second quarter of fiscal 1996. The Company's 6.25%
convertible subordinated debentures were dilutive during the second quarter of
fiscal 1997 and fiscal 1996 (see Exhibit 11.1). Primary net income per share
for the quarter ended August 1, 1997 was $0.44. The 61% increase in net
income was due to the factors discussed below.
Weighted average common and common equivalent shares outstanding increased
26% from 23,359,000 shares in the second quarter of fiscal 1996 to 29,424,000
shares in the second quarter of fiscal 1997. The primary reason for this
increase was the issuance of 5,750,000 shares of Common Stock in the
Company's September 1996 stock offering.
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NET SALES. Net sales for the second quarter of fiscal 1997 increased 33%
over the comparable prior year period. This increase was due to a 25% increase
in store weeks of operations during the quarter and a 12% increase in same store
sales for the period. Same store sales also increased 12% during the second
quarter of fiscal 1996. Same store sales in the second quarter of fiscal 1997
increased primarily as a result of an 11% increase in the number of
transactions. The increase in the number of customer transactions was due to
several factors, including continued favorable economic conditions in most of
the Company's markets and the liquidation and subsequent closure of a primary
competitor, Ernst Home Center Inc., in the second half of fiscal 1996.
GROSS MARGIN. The Company's gross margin, in dollars, increased 34% over
the second quarter of fiscal 1996. As a percentage of net sales, gross
margin was 28.1% in the second quarter of fiscal 1997 versus 27.9% in the
comparable prior period. Gross margin as a percentage of sales improved
primarily as a result of reductions in realized inventory shrinkage and
continued buying efficiencies that were partially offset by competitive
pricing pressures in the Puget Sound market.
OPERATING EXPENSES. Operating expenses as a percentage of net sales
decreased from 20.8% in the second quarter of fiscal 1996 to 20.3% in the second
quarter of fiscal 1997. Increases in store wages as a percentage of sales were
more than offset by decreases in other operating expenses as a percentage of
sales, including advertising, insurance, rent and corporate overhead. Store
wages increased as a result of higher staffing levels in stores to support
increased customer traffic.
OPERATING INCOME. For the reasons explained above, operating income
increased 47% in the second quarter of fiscal 1997 over the second quarter of
fiscal 1996. Expressed as a percentage of net sales, operating income improved
from 7.1% in the second quarter of fiscal 1996 to 7.9% in the second quarter of
fiscal 1997.
INTEREST EXPENSE. Net interest expense during the second quarter of fiscal
1997 was $1.5 million, compared to $2.2 million during the comparable prior year
period. This decrease resulted primarily from the use of proceeds from the
Company's September 1996 stock offering for repayment of bank borrowings and for
investment. Interest on the Company's convertible subordinated debentures,
which represents the primary source of interest expense, was comparable between
the current and prior year. During both quarters, interest incurred was
partially offset by interest capitalized on construction projects.
INCOME TAXES. The effective tax rate for both the second quarter of fiscal
1997 and fiscal 1996 was 36.5%. The second quarter effective tax rate for 1997
was lower than the combined federal and state statutory tax rates that the
Company expects to pay under normal circumstances because a portion of the
Company's net proceeds from the September 1996 stock offering was invested in
tax-exempt securities.
(b) COMPARISON OF THE 26 WEEKS ENDED AUGUST 1, 1997, AND JULY 26, 1996.
NET INCOME. Net income for the first 26 weeks of fiscal 1997 was $17.6
million, or $0.57 per share, fully diluted, compared to $11.0 million, or
$0.46 per share, during the first 26 weeks of fiscal 1996. The Company's
6.25% convertible subordinated debentures were dilutive during the second
quarters of fiscal 1997 and fiscal 1996 (see Exhibit 11.1). Primary net
income per share for the 26 weeks ended August 1, 1997 was $0.60. The 59%
increase in net income was due to the factors discussed below.
Weighted average common and common equivalent shares outstanding increased
26% from 23,298,000 shares in the first 26 weeks of fiscal 1996 to 29,378,000
shares in the first 26 weeks of
4
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fiscal 1997. The primary reason for this increase was the issuance of 5,750,000
shares of Common Stock in the Company's September 1996 stock offering.
NET SALES. Net sales for the first 26 weeks of fiscal 1997 increased 35%
over the comparable prior year period. This increase in net sales over the
prior 26-week period was due primarily to a 23% increase in store weeks of
operations and a 14% increase in same store sales for the period. Same store
sales increased 7% during the first 26 weeks of fiscal 1996. Same store sales
in the first 26 weeks of fiscal 1997 increased primarily as a result of a 14%
increase in the number of transactions. The increase in the number of customer
transactions was due to several factors, including continued favorable economic
conditions in most of the Company's markets and the liquidation and subsequent
closure of a primary competitor, Ernst Home Center Inc., in the second half of
fiscal 1996.
GROSS MARGIN. The Company's gross margin, in dollars, increased 36% over
the first 26 weeks of fiscal 1996. As a percentage of net sales, gross
margin was 28.2% in the first 26 weeks of fiscal 1997 versus 28.0% in the
comparable prior period. Gross margin as a percentage of sales improved
primarily as a result of reductions in realized inventory shrinkage and
continued buying efficiencies that were partially offset by competitive
pricing pressures in the Puget Sound market.
OPERATING EXPENSES. Operating expenses as a percentage of net sales
decreased from 22.1% in the first 26 weeks of fiscal 1996 to 21.7% in the first
26 weeks of fiscal 1997. Increases in store wages as a percentage of sales were
more than offset by decreases in other operating expenses as a percentage of
sales, including advertising, insurance, rent and corporate overhead. Store
wages increased as a result of higher staffing levels in place to support
increased customer traffic.
PREOPENING EXPENSES. Preopening expenses were 0.4% of sales in the first
26 weeks of fiscal 1997, when the Company opened three stores. In the
comparable prior year period, there were no preopening expenses.
OPERATING INCOME. For the reasons explained above, operating income
increased 40% in the respective 26-week periods. Expressed as a percentage of
net sales, operating income improved from 5.9% in the first 26 weeks of fiscal
1996 to 6.1% in the comparable current year period.
INTEREST EXPENSE. Net interest expense during the first 26 weeks of fiscal
1997 was $3.0 million, compared to $4.6 million during the comparable prior year
period. This decrease resulted primarily from the use of proceeds from the
Company's September 1996 stock offering for repayment of bank borrowings and for
investment. Interest on the Company's convertible subordinated debentures,
which represents the primary source of interest expense, was comparable between
the current and prior year. During both periods, interest incurred was
partially offset by interest capitalized on construction projects.
INCOME TAXES. The effective tax rate for the first 26 weeks of fiscal 1997
and fiscal 1996 was 36.5%. The effective tax rate for the first 26 weeks of
fiscal 1997 was lower than the combined federal and state statutory rates that
the Company expects to pay under normal circumstances because a portion of the
Company's net proceeds from the September 1996 stock offering was invested in
tax-exempt securities.
LIQUIDITY AND CAPITAL RESOURCES -
The Company did not open any stores during the second quarter of fiscal
1997. The Company has signed agreements to purchase four future store sites at
a total cost of
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approximately $16.2 million and a future distribution center at a total cost
(including land) of approximately $26.5 million. In addition, the Company has
signed options to lease property for another future store site. The Company
currently plans to open two additional stores during fiscal 1997 in Coeur
d'Alene, Idaho and La Quinta, California. The Company continues to review
additional sites for future expansion, including numerous sites in Southern
California.
The Company's balance sheet at August 1, 1997, reflects a $49.1 million
(9%) increase in total assets since the fiscal year began on February 1. The
principal components of this change were an increase of $22.3 million (13%) in
inventories, attributed to seasonal inventory fluctuations and the addition of
three new stores and an increase of $21.6 million (8%) in net property and
equipment, primarily related to the continuing store expansion program. Net
income adjusted for noncash items provided $25.9 million during the first 26
weeks of the year to support the Company's expansion. The increase in total
assets was also accompanied by an increase of $5.8 million in accounts payable
and outstanding checks under the Company's integrated cash management program
and a $5.1 million increase in accrued liabilities and income taxes payable, all
primarily related to the continuing store expansion program. In addition, the
Company received $19.0 million in proceeds from mortgages on two owned stores.
The Company's capital requirements are significantly influenced by its
expansion plans and by factors such as real estate costs in the markets which
the Company enters, whether that real estate will be purchased or leased and the
extent of Company-financed remodeling required when existing buildings are
acquired or leased. The Company currently expects to finance its fiscal 1997
expansion program through a combination of current cash, cash generated from
operations, bank borrowings under the existing line of credit and proceeds of
fixed-term capital asset loans and/or sale-leasebacks of owned properties.
The Company reports on a 52/53-week year, consisting of four 13-week
quarters. The fiscal year ends on the last Friday in January.
FORWARD-LOOKING STATEMENTS -
Some of the information in this report constitutes forward-looking
statements. These statements are subject to a number of risks and uncertainties
that might cause actual results to differ materially from stated expectations.
These risks include, among others, the highly competitive environment in the
retail home improvement industry, the effect of general economic conditions and
weather in the Company's markets and the Company's ability to achieve its
expansion plans and successfully manage its growth. These risks are described
in detail in the Company's Annual Report on Form 10-K and other SEC filings.
6
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PART II - OTHER INFORMATION:
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS -
The Company's 1997 Annual Meeting of Shareholders was held on May 29, 1997.
Matters voted upon at the meeting and the results of those votes are set forth
in the following table.
VOTES
--------------------------------- BROKER
MATTER FOR AGAINST WITHHELD ABSTENSIONS NON-VOTES
- ------------------------------------------------------------------------------
Election of
Directors:
Takata 26,013,439 - 286,914 - -
Wight 26,023,581 - 276,772 - -
Ratification
of Indepen-
dent Public
Accountants
(Ernst &
Young) 26,223,703 11,576 - 65,074 -
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K -
(a) Exhibits filed with this Form 10-Q are as follows:
10.112D Termination Agreement dated July 18, 1997, for Agreement for
Purchase and Sale of Real Property between Northglenn Partners,
L.P. and Eagle Hardware & Garden, Inc.
10.120 Real Estate Purchase and Sale Agreement dated June 18, 1997,
between Kent Central, L.L.C. and Eagle Hardware & Garden, Inc.
10.121 Real Estate Purchase and Sale Agreement dated June 24, 1997, by
and between Havana Street Partnership and Frank V. Furstenberg
and Eagle Hardware & Garden, Inc.
10.122 Real Estate Purchase and Sale Agreement dated June 24, 1997, by
and between Opus Northwest LLC and Eagle Hardware & Garden, Inc.
10.123 Promissory Note dated June 30, 1997, by Eagle Hardware & Garden,
Inc. to The Northwestern Mutual Life Insurance Company in the
principal amount of $10,000,000.
10.124 Real Estate Purchase and Sale Agreement dated August 4, 1997, by
and between Johnson Properties, Inc. and Eagle Hardware & Garden,
Inc.
10.125 Real Estate Purchase and Sale Agreement dated August 11, 1997, by
and between Alex Madonna and Phyllis Madonna and Eagle Hardware &
Garden, Inc.
11.1 Statement Regarding Computation of Per Share Earnings.
(b) No reports on Form 8-K were filed during the second quarter of fiscal 1997.
7
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SIGNATURES:
Pursuant to the requirements of the Securities Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
EAGLE HARDWARE & GARDEN, INC.
-----------------------------
Registrant
August 28, 1997 /s/ David J. Heerensperger
- --------------- -----------------------------------------------
Date David J. Heerensperger
Chairman and Chief Executive Officer
(Principal Executive Officer)
August 28, 1997 /s/ Richard T. Takata
- --------------- -----------------------------------------------
Date Richard T. Takata
President and Chief Operating Officer
August 28, 1997 /s/ Ronald P. Maccarone
- --------------- -----------------------------------------------
Date Ronald P. Maccarone
Executive Vice-President-Finance and Chief
Financial Officer (Principal Financial Officer)
8
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EAGLE HARDWARE & GARDEN, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
AUGUST 1, JANUARY 31,
1997 1997
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ASSETS
Current assets:
Cash and cash equivalents $58,189 $20,738
Short-term investments 0 31,330
Trade and other accounts receivable (less allowance
for doubtful accounts of $2,199 and $1,891) 4,384 4,213
Merchandise inventories 196,559 174,299
Prepaid expenses 4,483 4,930
Deferred income taxes 2,852 2,559
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Total current assets 266,467 238,069
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Property and equipment, at cost:
Land and buildings 179,766 140,434
Furniture, fixtures and equipment 100,486 75,823
Leasehold improvements 47,318 45,730
Construction in progress 8,145 44,960
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335,715 306,947
Less accumulated depreciation 36,584 29,454
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Net property and equipment 299,131 277,493
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Preopening costs 24 1,468
Other assets 2,829 2,355
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Total assets $568,451 $519,385
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LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Outstanding checks, not cleared by the bank $13,402 $8,762
Accounts payable 56,450 55,295
Sales taxes payable 7,029 6,029
Accrued payroll and related expenses 13,812 13,951
Other current liabilities 12,850 8,572
Current portion of long-term debt 3,500 2,109
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Total current liabilities 107,043 94,718
Deferred income taxes 9,789 8,314
Other long-term liabilities 3,227 3,094
Long-term debt 124,609 108,416
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Total liabilities 244,668 214,542
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Commitments and contingencies
Shareholders' equity:
Common stock, without par value; 50,000 shares
authorized; 29,037 and 28,890 shares issued and
outstanding 264,595 263,226
Retained earnings 59,188 41,617
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Total shareholders' equity 323,783 304,843
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Total liabilities & shareholders' equity $568,451 $519,385
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See accompanying notes to consolidated financial statements.
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EAGLE HARDWARE & GARDEN, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT STORE WEEK AND PER SHARE DATA)
(UNAUDITED)
13 WEEKS ENDED 26 WEEKS ENDED
---------------------- ----------------------
AUGUST 1, JULY 26, AUGUST 1, JULY 26,
1997 1996 1997 1996
--------- --------- --------- ---------
Store weeks in period [390] [312] [765] [624]
Net sales $278,238 $209,078 $499,345 $370,184
Cost of sales 199,966 150,739 358,503 266,589
--------- --------- --------- ---------
Gross margin 78,272 58,339 140,842 103,595
Operating expenses 56,388 43,471 108,282 81,765
Preopening expenses 0 0 2,089 0
--------- --------- --------- ---------
Operating income 21,884 14,868 30,471 21,830
Other income (expense):
Interest income 657 5 876 5
Interest expense (2,188) (2,197) (3,826) (4,620)
Other income 80 16 138 145
--------- --------- --------- ---------
Income before tax 20,433 12,692 27,659 17,360
Income taxes 7,450 4,627 10,088 6,331
--------- --------- --------- ---------
Net income $12,983 $8,065 $17,571 $11,029
--------- --------- --------- ---------
--------- --------- --------- ---------
Net income per share (see
Exhibit 11.1 for share
computations):
Net income per share,
primary $0.44 $0.35 $0.60 $0.47
Net income per share,
fully diluted $0.41 $0.32 $0.57 $0.46
See accompanying notes to consolidated financial statements.
10
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EAGLE HARDWARE & GARDEN, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
26 WEEKS ENDED
-----------------------
AUGUST 1, JULY 26,
1997 1996
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OPERATING ACTIVITIES:
Net income $17,571 $11,029
---------- -----------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 7,130 5,456
Net gain on sale of assets 0 (47)
Deferred income taxes 1,182 (512)
Changes in operating assets and liabilities:
Trade and other accounts receivable (171) (569)
Merchandise inventories (22,260) (13,202)
Prepaid expenses (1,436) (1,702)
Other assets (474) 785
Preopening costs 1,444 (532)
Accounts payable and outstanding checks 5,796 16,192
Income taxes payable 4,878 1,893
Accrued liabilities 2,144 6,317
Other 133 169
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(1,634) 14,248
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Net cash provided by operating activities 15,937 25,277
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INVESTING ACTIVITIES:
Capital expenditures for property and equipment (28,768) (37,197)
Sales of short-term investments 31,330 0
Proceeds on sale of surplus property 0 3,686
Other 0 583
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Net cash provided by (used in) investing
activities 2,562 (32,928)
---------- -----------
FINANCING ACTIVITIES:
Advances on note payable to bank 6,700 222,700
Payments on note payable to bank (6,700) (220,300)
Proceeds from long-term borrowings 18,823 9,000
Payments on long-term borrowings and capital leases (1,239) (5,402)
Other 1,368 1,004
---------- -----------
Net cash provided by financing activities 18,952 7,002
---------- -----------
Increase (decrease) in cash and cash equivalents 37,451 (649)
Cash and cash equivalents at beginning of period 20,738 6,591
---------- -----------
Cash and cash equivalents at end of period $58,189 $5,942
---------- -----------
---------- -----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for -
Interest $4,326 $5,057
Income taxes $3,508 $4,455
See accompanying notes to consolidated financial statements.
11
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EAGLE HARDWARE & GARDEN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
- ---------------------------------------------
1. The accompanying unaudited consolidated financial statements do not purport
to be full presentations, and do not include all information and disclosures
required for fair presentation by generally accepted accounting principles.
However, in the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of normal recurring
accruals) considered necessary to present fairly the consolidated financial
position of the Company at August 1, 1997, the consolidated results of
operations for the 13-week and 26-week periods ended August 1, 1997, and July
26, 1996, and consolidated cash flows for the 26-week periods then ended. These
financial statements should be read in conjunction with the financial statements
included in the Company's Annual Report on Form 10-K for the fiscal year ended
January 31, 1997, filed with the Securities and Exchange Commission.
2. As of August 27, 1997, the Company had completed the purchase of a site for
a future store location and had signed agreements to purchase sites for four
future store locations at a total cost of approximately $16.2 million. In
addition, the Company has signed options to lease property for one future store
site. Purchases of these sites and these leases will be finalized upon
successful resolution of various contingencies. During the second quarter, the
Company also signed an agreement to purchase a future distribution center for a
total cost (including land) of approximately $26.5 million.
3. In February 1997, the Financial Accounting Standards Board issued Statement
No. 128, "Earnings Per Share," which is required to be adopted by the Company on
January 30, 1998. At that time, the Company will be required to change the
method currently used to compute net income per share and to restate all prior
periods. Under the new requirements for calculating primary net income per
share, the dilutive effect of stock options will be excluded. The impact of
Statement 128 on primary and fully diluted earnings per share for the second
quarters ended August 1, 1997 and July 26, 1996, is not expected to be material.
12
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TERMINATION AGREEMENT
NORTHGLENN PARTNERS, L.P. ("Seller") and EAGLE HARDWARE & GARDEN, INC.
("Buyer"), are parties to that certain Agreement for Purchase and Sale of
Real Property in Northglenn, Colorado, dated September 3, 1996 and September
5, 1996, as amended on November 13, 1996, December 17, 1996 and March 31,
1997 (the "Agreement"). A condition of the Agreement is the timely
acquisition of the Northglenn Mall Developer Tract by the NURA has failed to
complete such acquisition and, accordingly, Buyer and Seller hereby agree
that the Agreement is terminated as of the date hereof, that neither party
shall have any further or continuing obligations, duties or liabilities to the
other, and that Chicago Title of Colorado, Inc. (the "Escrow Agent") shall
return Buyer's $100,000 earnest money deposit to it immediately, together
with all accrued interest thereon.
Seller also hereby acknowledges that Buyer still has an interest in acquiring
the subject property and is free to do so with any person and upon any such
terms that Buyer is able to negotiate without incurring any liability to
Seller and that Seller shall not make any claim against Buyer for pursuing
acquisition of the property from someone other than Seller.
Dated this 18th day of July, 1997.
EAGLE HARDWARE & GARDEN, INC.
By: /s/ George Smith
--------------------
George Smith
Its: Vice President
NORTHGLENN PARTNERS, L.P.
By: HRBF NORTHGLENN NO. 3, L.P.,
Its: General Partner
By: /s/ Illegible
-----------------
Its: V.P.
-----------------
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REAL ESTATE PURCHASE AND SALE AGREEMENT
SELLER: KENT CENTRAL, L.L.C.
BUYER: EAGLE HARDWARE & GARDEN, INC.
DATED: June 18, 1997
RECITALS
A. SELLER is the owner of that certain real property described on Exhibit
"A" attached hereto in Kent, Washington consisting of a parcel of land
containing approximately 1,292,000 square feet +/- of land area.
B. SELLER desires to convey to BUYER such real property, and also the
related assets described herein, following completion of construction of the
improvements substantially in accordance with the Site Plan depicted on Exhibit
B and the specifications depicted on Exhibit C and on the schedule depicted on
Exhibit D, and BUYER desires to purchase the same, on the terms and conditions
set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are acknowledged by each of the parties hereto, SELLER and
BUYER agree as follows.
SECTION 1: SUBJECT MATTER
The subject matter of this Agreement is the following assets (herein
collectively the "Assets"):
(a) The Seller's right, title and interest in the real property described
on Exhibit "A" hereto, together with all such right, title and interest in and
to all abutting roads and appurtenant easements (herein the "Real Property").
(b) All buildings, structures, fixtures and other improvements to be built
on the Real Property (herein the "Improvements"). The Real property and the
Improvements are herein sometimes collectively referred to as the "Property".
(c) All personal property, (except personal property owned by construction
contractors of the Improvements) of every kind and nature used by SELLER in
connection with the operation of the Property (herein the "Personal Property").
The Personal Property includes, without limitation, all files, records and plans
related to the Assets.
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(d) All warranties in favor of SELLER, and all permits, licenses, operating
agreements,.reciprocal easement agreements, service contracts related to the
Property and/or the Personal Property, (herein collectively the "Intangible
Assets").
(e) The SELLER's interest as Owner in all construction contracts and
related agreements with respect to the Property and all guarantees related
thereto.
SECTION 2: AGREEMENT TO CONVEY
Subject to the satisfaction of all of the conditions contained herein,
SELLER shall convey and BUYER shall purchase the Assets for the price and on the
terms and conditions set forth herein.
SECTION 3: PURCHASE PRICE FOR THE ASSETS
The purchase price for the Assets depicted on Exhibits A & B is Twenty Six
Million Five Hundred Forty Four Thousand Five Hundred Eighty Seven Dollars
($26,544,587.00) (herein the "Purchase Price").
If BUYER shall request any change, addition or alteration in the plans, the
Building standards or the Construction Drawings presented by SELLER, SELLER
shall promptly give BUYER a written estimate of (a) the cost of engineering and
design services to prepare a change order ("Change Order") in accordance with
such request, (b) the cost of the work to be performed pursuant to such Change
Order (including an administrative fee of 5%), and (c) the time delay expected
because of such requested Change Order. Within three (3) business days following
BUYER's receipt of the foregoing written estimate, BUYER shall notify SELLER in
writing whether it approves such written estimate. If BUYER approves such
written estimate, BUYER shall confirm such approval with a signed change order
and a check payable to SELLER in the amount of the Change Order. The foregoing
shall constitute BUYER'S authorization to SELLER to proceed. If such written
authorization and check are not received by SELLER within such three (3)
business days period, SELLER shall not perform any work in connection therewith.
If the completion of construction of the Building is delayed (i) at the request
of BUYER, (ii) by BUYER's failure to comply with the foregoing provisions, (iii)
by changes in the work requested or ordered by BUYER or by extra work ordered by
BUYER, or (iv) because BUYER chooses to have additional work performed by SELLER
(each, a "Construction Delay"), then BUYER shall be responsible for all costs
and expenses occasioned by such delays.
SECTION 4: PAYMENT
The Purchase Price for the Assets shall be paid as follows:
SECTION 4.1 EARNEST MONEY DEPOSIT. Five working days after SELLER delivers
a fully executed original of this Agreement to BUYER (the date of such delivery
is
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referred to herein as the "Execution Date"), BUYER shall deliver to Chicago
Title Insurance Company (herein the "Title Company"), at its offices in Seattle,
Washington cash in the amount of $ 1,325,000.00 (herein the "Earnest Money
Deposit"). The $1,325,000.00 so paid shall be held by the Title Company in
escrow in an insured interest-bearing account with interest to accrue for the
benefit of BUYER. Such $1,325,000.00, and all interest earned thereon while held
by the Title Company, is herein referred to as the "Earnest Money Deposit". At
Closing, the Earnest Money Deposit shall be paid to SELLER as part of the
Purchase Price. The Earnest Money Deposit shall be held, paid and applied as set
forth in this Agreement.
SECTION 4.2 UNIQUE BUILDING DEPOSIT. BUYER acknowledges that SELLER would
design and construct The Improvements differently from the design depicted on
Exhibit B were it not for BUYER's requirements. The proposed building, as
depicted on Exhibit B reflects BUYER's unique configuration with special
features such as dock levelers, mezzanines, etc. In addition to the Earnest
Money Deposit referred to in Section 4.1 above, and five working days after the
date that SELLER delivers a fully executed original of this Agreement to BUYER
(the date of such delivery is referred to herein as the "Execution Date"), BUYER
shall deliver to Chicago Title Insurance Company (herein the "Title Company"),
at its offices Seattle, Washington cash in the amount of $2,000,000.00 (herein
the "Unique Building Deposit"). The $2,000,000.00 so paid shall be held by the
Title Company in escrow in an insured interest-bearing account with interest to
accrue for the benefit of BUYER. Such $2,000,000.00, and all interest earned
thereon while held by the Title Company, is herein referred to as the "Unique
Building Deposit". At Closing, the Unique Building Deposit shall be paid to
SELLER as part of the Purchase Price. The Unique Building Deposit shall be held,
paid and applied as set forth in this Agreement.
SECTION 4.3 DEPOSITS. The Earnest Money Deposit and The Unique Building
Deposit are herein collectively referred to as the "Deposits".
SECTION 4.4 CASH AT CLOSING. At Closing, BUYER shall pay to SELLER, in cash
through escrow, the entire Purchase Price, less credits to which BUYER is
entitled hereunder including the Deposit.
SECTION 5: CLOSING
SECTION 5.1 PLACE AND TIME. The closing of the sale and purchase of the
Assets (herein the "Closing") shall occur in escrow with the Title Company at
its offices identified above. Closing shall occur on a date designated by BUYER,
such date to be not later than 5 days following the Completion Date (referred to
in Section 6.2 below), which shall be no later than 12/31/98, unless extended by
written agreement of BUYER and SELLER. The date that the Deed referenced below
is recorded and the Title Company is in a position to disburse funds to SELLER
is hereinafter referred to as the "Closing Date".
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SECTION 5.2 PRORATES AND COSTS. SELLER shall be responsible for and shall
pay one-half (1/2) of the escrow fee, the excise tax, any documentary stamps or
fees and the cost of an extended owner's coverage title insurance policy and any
other costs normally payable by SELLER. BUYER shall be responsible for and shall
pay one-half (1/2) of the escrow fee, the additional premium in order to obtain
the extended coverage policy of title insurance (if required by Buyer),
recording fee, and any other normal costs normally payable by BUYER.
SECTION 5.3 TAX PRORATIONS. All real and personal property taxes
attributable to the Property and the Personal Property for the respective tax
years in which Closing occurs shall be prorated in escrow, as of the Closing
Date.
SECTION 5.4 COOPERATION. At Closing, the parties shall execute and deliver
any and all documents and pay any funds necessary to consummate the transaction
contemplated hereby on the terms set forth herein. Without limiting the
foregoing, SELLER shall deliver to BUYER and to the Title Company all documents
necessary to establish the authority of those persons executing documents on
behalf of SELLER to do so and to convey the Assets.
SECTION 5.5 TITLE INSURANCE. At Closing, SELLER shall deliver to BUYER a
commitment from the Title Company to issue to BUYER the extended coverage title
insurance policy referenced herein. As soon as practicable after Closing, SELLER
shall cause the Title Company to deliver to BUYER a buyer's extended
coveragetitle insurance policy of Chicago Title Insurance Company in the amount
of the Purchase price, insuring a fee simple interest in the Property vested in
BUYER, subject only to the Permitted Exceptions (as defined below).
SECTION 5.6 CONVEYANCE AND POSSESSION. At Closing, SELLER shall execute
(and acknowledge, if appropriate) and deliver the following:
(a) a Statutory Warranty Deed conveying the Property to BUYER free and
clear of all liens, easements, restrictions, encumbrances, and exceptions to or
defects in title, except only for the Permitted Exceptions (as defined below);
(b) a Warranty Bill of Sale conveying the Personal Property, if any, to
BUYER;
(c) an Assignment Agreement conveying to BUYER the Owner's Interest and all
related rights, with respect to the Intangible Assets, including all permits,
architect and engineering agreements, construction contracts and any other
agreements related to the Improvements;
(d) such documents as may be necessary to make BUYER the successor
declarant on recorded restrictions which are determined to be Permitted
Exceptions, including the successor declarant on any Reciprocal Easement
Agreement or similar operating agreement, if any;
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(e) such non-foreign person tax affidavits as may be requested by BUYER;
and
(f) restrictions imposed by DOE regarding the Consent Decree described in
section 7.4.
SECTION 5.7 DELIVERIES. At Closing, SELLER shall deliver the following to
BUYER:
(a) all keys to the Property;
(b) copies of all documents related to the Property.
SECTION 5.8 POSSESSION. BUYER shall be entitled to possession of the Assets
from and after the Closing Date.
SECTION 6: CONDITIONS TO BUYERS OBLIGATIONS
The obligation of BUYER hereunder to consummate the transaction
contemplated hereby is subject to the satisfaction of each of the following
conditions, and all other conditions contained herein, any or all of which may
be waived by BUYER, in whole or in part (but only expressly and in writing).
SELLER agrees to use its reasonable best efforts to satisfy such conditions, and
to co-operate with BUYER in the satisfaction of the same. This Agreement is not
contingent on financing.
SECTION 6.1 TITLE TO PROPERTY. At Closing, title to the Property must be
free and clear of all defects, easements, restrictions, liens, security
interests and encumbrances except for those which are deemed to be Permitted
Exceptions pursuant to the provisions of this Section 6.1. No later than Five
days after mutual acceptance of this agreement, SELLER shall obtain and deliver
to BUYER, at SELLER's expense, a preliminary title commitment for extended
coverage covering the Property and all appurtenant easements together with all
legible copies of all documents referenced therein as plats, surveys or
exceptions to title. Within Seven days of BUYER's receipt of preliminary title
report, SELLER and BUYER shall agree upon the legal description of the Real
Property and those exceptions to title shown on such report which shall remain
of record following Closing and shall list the same (herein the "Permitted
Exceptions"); BUYER shall have the right to refuse to agree to list any
exception or to reject the legal description, in BUYER's sole and absolute
discretion. Absent such agreement, BUYER shall have the right to terminate this
Purchase Agreement.
SECTION 6.2 COMPLETION OF CONSTRUCTION. Prior to Closing, and in no event
later than December 31, 1998, SELLER shall complete construction of the
Improvements substantially in accordance with the Site Plan and Schematic
Design depicted on Exhibit B and the specifications depicted on Exhibit C and
on the schedule depicted on Exhibit D. This condition shall be deemed
satisfied when the City of Kent delivers its Certificate of Occupancy and the
Architect has executed a Certificate of Substantial Completion. (The
"Completion Date"). As used herein, the term "Substantial Completion" shall
mean that the Improvements have been completed in substantial accordance with
the Final Plans
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subject only to completion of minor punch list items which do not interfere with
the utilization of the Improvements for the purposes for which they were
intended in any material way and that if a conditional or temporary occupancy
permit is customarily issued for construction of the Improvements before
punchlist items are completed, then such permit has been issued by the
appropriate local governmental authority. Landscaping and other exterior items
shall not prevent the occurrence of Substantial Completion.
SECTION 6.3 ENVIRONMENTAL CLEANUP. Seller shall have completed the required
environmental cleanup of the property required to obtain the anticipated Consent
Decree prior to the Completion Date,
SECTION 7: REPRESENTATIONS AND WARRANTIES OF SELLER (A "WARRANTY")
SECTION 7.1 TITLE AND CONVEYANCE. SELLER owns the Assets free and clear of
any and all liens, claims, encumbrances and adverse interests other than those
shown on the preliminary title report discussed above; at Closing, title to the
Assets shall be free and clear of all liens, claims, encumbrances and adverse
interests except only that the Permitted Exceptions shall apply to the Property.
SELLER has full right, power and authority to convey the Assets in accordance
with this Purchase Agreement. No approval or consent of any person, firm or
other entity is required to be obtained by SELLER to permit SELLER to consummate
the transaction contemplated in this Purchase Agreement.
SECTION 7.2 INFORMATION AND DOCUMENTS. To the best of Seller's actual
knowledge, all information and documents delivered by SELLER in connection with
the transaction contemplated hereby, including all documents and information to
be delivered pursuant to Section 6 above, are and shall be complete, true and
accurate.
SECTION 7.3 EXISTING TENANCIES. To the best of Seller's actual knowledge,
there are no leases or tenancies affecting all or any part of the Property.
There are no written or oral promises, understandings, agreements or other
commitments between SELLER, and any tenant or any other person, affecting the
Assets which have not been disclosed, in writing, to BUYER.
SECTION 7.4 HAZARDOUS MATERIALS
(a) DEFINITION. The term "Hazardous waste or materials or substances" as
used in this Agreement is used in its very broadest sense and includes, but is
not limited to, materials and substances designated as hazardous under any
federal, state or local act or ordinance.
(b) SELLER'S REPRESENTATIONS. Seller represents that the subject site is
the former site of Birmingham Steel. This site contains some materials
designated as hazardous by the DOE. Seller is in the process of cleanup
necessary to obtain a Consent Decree and Covenant Not To Sue from the Department
of Ecology. The Consent Decree will allow the uses of the site including
warehousing. It is anticipated that the Consent Decree will
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prohibit access to the ground water and uses such as residential uses and
schools. The Consent Decree will be assigned to Buyer at closing.
SECTION 7.5 STATUS OF SELLER. SELLER is not a foreign person, foreign
partnership, foreign corporation or foreign trust, as such terms are defined in
Section 1445 of the Internal Revenue Code, as amended, or the regulations
thereunder.
SECTION 7.6 CONTRACTS. All contracts which are a part of the Assets
(including, without limitation, all contracts included in the Intangible
Assets), are valid and enforceable obligations of the signatories thereto.
SELLER has not assigned its interest in or waived any right under any of such
contracts. No consents are necessary for assignment of any contract pursuant
hereto and no such assignment will be a default under any such contract. There
shall not be, at Closing, any contracts affecting the Assets other than those
previously reviewed by BUYER or entered into by BUYER. Each of such contracts
will be free from default and no act, event, occurrence or omission has occurred
or exists which, together with notice, the passage of time, or both, would
constitute such a default.
SECTION 8: REPRESENTATIONS AND WARRANTIES OF BUYER
SECTION 8.1 AUTHORITY. BUYER has full right, power and authority to
purchase the Assets in accordance with this Purchase Agreement. No approval or
consent of any person, firm, lender or other entity is required to be obtained
by BUYER to permit BUYER to consummate the Transaction contemplated in this
Purchase Agreement.
SECTION 9: INDEMNIFICATION
Except as otherwise specifically provided herein, SELLER shall be
responsible for and pay, and shall defend, indemnify and hold BUYER and the
Assets harmless from, any and all liens, liabilities, losses, claims and causes
of action (including related attorney's fees, fines, remediation costs and all
other costs) which are related to the required environmental cleanup described
in Section 6.3 the inaccuracy or alleged inaccuracy of any Warranty and/or are
related to breach of any covenant of SELLER contained herein. BUYER shall hold
harmless and defend SELLER from any action, liabilities, losses, claims and
causes of action (including related attorneys' fees, fines, remediation costs
and all other costs), (a) which are incurred or which arise relating to the
Assets after the Closing Date, and/or (b) are related to the inaccuracy or
alleged inaccuracy of any Warranty and/or are related to breach of any covenant
of BUYER contained herein.
SECTION 10: BROKERS
Each party represents to the other party that it has not had dealings with
any real estate broker or finder which has created the obligation to pay a
commission or fee with respect to this transaction other than Brett
Hartzell/Lane Bockman of CB Commercial and
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Dick Fosness/Chris Corr of Kidder Mathews and Segner (the "Brokers"). A
commission will be paid by SELLER to the Brokers pursuant to a separate
agreement. Each party shall indemnify the other against any claim arising out of
the indemnifying party's conduct with any other brokers or finders.
SECTION 11: TERMINATION; BREACH BY SELLER
SECTION 11.1 RIGHTFUL TERMINATION. In the event that this Agreement is
rightfully terminated by BUYER or SELLER pursuant to the terms hereof, the
Deposit shall be returned to BUYER and, except as provided in Section 11.2 or 12
below, if applicable, neither party shall have any further liability.
SECTION 11.2 BREACH BY SELLER. In the event SELLER shall fail to fully and
timely perform any of its obligations or duties hereunder or shall fail to
consummate the sale of the Assets for any reason, or any of SELLER's Warranties
contained herein are false, BUYER may, without limiting any other rights and
remedies of BUYER, including, without limitation, any rights or remedies set
forth in this Agreement:
(1) Specifically enforce performance of this Agreement or any provision
hereof;
(2) Receive a refund of the Deposits;
(3) Terminate this Agreement and/or be excused from further performance
hereunder.
SECTION 12: BREACH BY BUYER
In the event BUYER should breach its obligations hereunder and as a result
of such breach BUYER shall fail to consummate the purchase of the Assets, SELLER
shall be entitled to retain the Earnest Money Deposit the same being agreed upon
as liquidated damages for the failure of BUYER to consummate the contemplated
transaction; in addition, SELLER shall be entitled to retain the Unique Building
Deposit in order to reimburse SELLER for the specific costs related to the
unique building design; PROVIDED THAT, in the event there is a delay in closing
the sale caused by a third party, the closing date shall be extended for a
reasonable time to complete said closing, but in no event later than 15 days
following the Completion Date. BUYER will pay SELLER $6,636.00 per day if
closing is delayed by a third party working for BUYER. SELLER agrees to accept
and take such amount as its total damages and relief and as SELLER's sole and
exclusive remedy hereunder. The parties acknowledge that such sums constitute a
fair estimate of the actual damages which SELLER would suffer and that such
actual damages would be difficult or impossible to prove with certainty.
SECTION 13: NOTICE
Any notice required or permitted hereunder shall be in writing, and shall
be deemed given and received only when personally delivered (by overnight
courier service
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or facsimilie transmission or otherwise) and actually received by the recipient
at the following addresses or facsimilie numbers:
If to the SELLER:
Benaroya Capital Company, L.L.C.
1001 Fourth Avenue, Suite 4700
Seattle, Washington 98154
Attn: Larry Benaroya, Manager
Fax No. (206) 447-9384
If to the BUYER:
Eagle Hardware & Garden, Inc.
981 Powell Avenue SW
Renton, Washington 98055
Attn: Richard Takata, President
Fax No. (425) 204-5158
With a copy to:
William Moloney
5711 N.E. Tolo Rd.
Bainbridge Island, WA 98110
Fax No. (360) 842-5340
Either party may change its addresses above by written notice given as
aforesaid.
SECTION 14: PARTIES BOUND; THIRD PARTIES
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. There are no third
party beneficiaries hereof, this Agreement being solely for the benefit of
SELLER, BUYER, and any assignee of BUYER.
SECTION 15: TIME OF ESSENCE
Time is of the essence of this Agreement.
SECTION 16: RISK OF LOSS
SELLER shall bear the risk of all loss or damage to the Property and the
Personal Property from all causes, through the Closing Date. If, prior to the
Closing Date, all or part of the Property or Personal Property is damaged by
fire or by any other insured casualty, or any portion of the Property is taken
by eminent domain or threatened by such a taking, SELLER shall promptly GIVE TO
BUYER full written notice of the same, and shall keep BUYER fully informed as to
any insurance matters related thereto. SELLER shall
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use its reasonable best efforts to restore and repair the damage and replace
damaged elements of the Property and the Personal Property utilizing the
insurance proceeds or condemnation award such that the same shall be put, to the
extent possible, into at least as good of a quality and condition as immediately
prior to such damage, and shall thereafter proceed to complete construction of
the Improvements as contemplated and within the timeframe required herein.
SECTION 17: INTERPRETATION
This Purchase Agreement is the full and final agreement of SELLER and BUYER
with respect to the purchase and sale of the Assets and supersedes all prior
negotiations, offers, counter offers and letters of intent. This Purchase
Agreement may only be amended by a written instrument, executed by BUYER and
SELLER. No waiver of any right by BUYER shall be established absent proof of a
written document, executed by BUYER, expressly setting forth such waiver. In the
event any provision hereof is unenforceable as written, the parties desire that
such provision be enforced to the fullest extent of the law, and that the
balance of this Agreement remain fully enforceable. This agreement shall be
governed by and construed in accordance with the laws of the State of
Washington.
SECTION 18: SURVIVAL
All Warranties, and BUYER's right to enforce or assert a breach of the
same, shall survive any investigation by BUYER, execution hereof, the Closing of
the transaction contemplated hereby, and the execution and delivery of any
documents at Closing, and shall not be merged into any document delivered by
SELLER and BUYER at Closing. All indemnity, default, and attorneys fees
provisions hereof, together with all provisions hereof which so contemplate,
shall survive termination hereof and/or Closing, and shall not be so merged.
SECTION 19: ATTORNEYS FEES
In the event of litigation between the parties concerning the Assets, this
Agreement, or the rights and duties of either in relation thereto, the
prevailing party in such litigation shall be entitled, in addition to such other
relief as may be granted, to receive from the losing party a reasonable sum as
and for its costs and attorneys fees incurred both at and in preparation for
trial and any appeal or review, such sum to be set by the court(s) before which
the matter is heard. The foregoing provision shall apply to arbitration
proceedings, and also to any proceedings of any nature in bankruptcy court,
including proceedings regarding issues unique to bankruptcy law.
SECTION 20: REPRESENTATION
Each of the parties hereto have been represented by legal counsel of their
choice in respect to this transaction. This Agreement shall not be construed
adversely against either
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party by reason of the attorney for such party having prepared the same for
review by the parties.
SECTION 21: COUNTING OF DAYS
Whenever a time period set forth in this Agreement would otherwise expire
on a Saturday, Sunday, or banking or federally recognized holiday, such time
period shall be deemed extended to the next following business day. Whenever a
time period set forth in this Agreement extends beyond the scheduled Closing
Date, the Closing Date shall be extended to allow BUYER the full benefit of such
time period (for example, the Closing Date shall be extended, if necessary, to
allow BUYER the full benefit of the five day period referenced in Section 5
above).
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.
BUYER:
Eagle Hardware & Garden, Inc.
Date: 6/27/97, 1997 /s/David J Heeremperger
------------------------------
By:
------------------------------
By:
SELLER:
Kent Central, L.L.C.
Date:____________, 1997 /s/Larry R Benaroya
------------------------------
By: Larry R, Benaroya, Manager
EXHIBITS
- --------
A. Description of Real Property (To be attached)
B. Site Plan and Schematic Design
C. Specifications
D. Construction Schedule
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[LOGO]
EXHIBIT "C"
EAGLE HARDWARE
OUTLINE SPECIFICATIONS
December 9, 1996
DIVISION 1 - GENERAL REQUIREMENTS
1.1 SUMMARY OF THE WORK
A. The work includes the construction of a 654,408sf concrete
tilt-up building. The new construction shall include a steel roof
structure with wood decking, a 154,000sf mezzanine, tilt-up
concrete walls, a 4-ply built-up roof with related site work.
1.2 BUILDING FEATURES
A. The gross new building areas are as follows:
Base building: 654,408sf
B. Warehouse Clear Height: 30'
1.3 APPLICABLE CODES
A. The work shall be completed in accordance with these
specifications, the working drawings, and all applicable local
codes.
B. All work shall be completed in accordance with the requirements
of the City of Kent, WA, Building Department.
1519 W. Valley Hwy. N. Suite 103
P.O. Box 899
Auburn, Washington 98071-0899
(206) 833-2400
(206) 575-4283
FAX (206) 939-4805
[SEAL]
<PAGE>
1.6 GENERAL
A. All material shall be new. All work shall be performed in a
professional workmanlike manner in accordance with generally
accepted practices.
B. Contractor shall provide temporary power, water, lighting,
sanitary facilities, temporary field office, temporary fire
protection, safety barriers and trash removal which may be
required during construction and pay for all costs in connection
with same including their removal.
1.7 WARRANTY
A. Contractor shall warrant all work for a period of one year from
the date of substantial completion. All equipment warranties
shall be provided.
1.8 SCHEDULE
A. Contractor shall maintain a CPM progress schedule and hold weekly
construction meetings.
1.9 TESTING
A. A complete geotechnical subsurface soils report shall be provided
by the owner. (Seller)
B. Compaction testing shall be provided by the contractor to ensure
proper compaction of fill material in the building and parking
areas.
C. Concrete testing will be provided by the contractor. Concrete
test cylinders and slump tests shall be made during concrete
placement. An independent technician shall be present part time
during construction of footings and wall panels and full time
during floor slab pours.
1.10 SURVEYS
A. Owner to provide property corners, bench mark, and topographical
survey. - (by Seller)
B. Contractor to provide survey for construction activities
including building layout, earthwork, utility installation, and
paving.
<PAGE>
DIVISION 2 - SITEWORK
2.1 EARTHWORK
A. Erosion control
B. The building pad and parking areas will receive 1'-0" Class "A"
material.
C. The building pad will receive 4'-0" unclassified fill material.
D. The pad will receive a 2'-0" surcharge comprised of the material
to be placed in the site.
2.2 PAVING AND SURFACING
A. All paving shall consist of 3" of Class "B" compacted asphaltic
concrete mix supported by 6" of compacted stone base material.
2.3 CURBS
A. 6" concrete extruded curbs shall be provided at the perimeter of
the car parking and truck maneuvering areas.
2.4 WALKS
A. Sidewalks shall be 4" thick concrete with a broom finish.
2.5 SITE UTILITIES
A. A complete utilities system will be provided.
2.6 LANDSCAPING & IRRIGATION
A. Landscaping shall be per City of Kent standards.
DIVISION 3 - CONCRETE
3.1 MIX DESIGN
A. All concrete shall consist of proper proportions of Portland
Cement, coarse aggregates, fine aggregates and clean water
conforming to application of A.S.T.M. Standard Specifications.
(1) Concrete for footings, foundations and slabs shall be a
minimum of 3,000 psi strength at (28) days, 5 sack mix.
<PAGE>
(2) Concrete for tilt-up panels shall be a minimum of 3,500 psi
strength at (28) days, 5- 1/2 sack mix.
(3) Concrete for exterior sidewalks shall be a minimum of 3,500
psi strength at (28) days, 5 sack mix, air entrained.
3.2 CONCRETE SLABS
A. The warehouse area floor slab shall be 5" thick.
B. The floor slab shall be unreinforced.
C. Construction joints shall consist of greased 1/2" x 24" smooth
dowels, 24" on center.
D. The concrete floor slab shall have construction joints or saw cut
control joints at 20 ft. maximum on center.
3.3 FOOTINGS & FOUNDATIONS
A. The interior columns shall be supported on poured concrete
footings that are reinforced with steel reinforcing bars.
B. The precast panels shall be supported on continuous concrete
footings.
3.4 TILT-UP CONCRETE WALLS
A. The perimeter building walls shall be 7 1/4" tilt-up concrete
wall panels per plan.
DIVISION 5 -METALS
5.1 STRUCTURAL STEEL
A. Structural steel shall be A.S.T.M. A36 fabricated and erected in
accordance with latest American Institute of Steel Construction
Specifications.
B. All steel columns will be tube columns.
5.2 ROOF STRUCTURE
A. Roof structure shall be comprised of Vulcraft type steel girder
trusses, steel purlins with 1 3/4" nailers, 2x6 stiffeners, and
the roof deck will be 15/32" O.S.B.
<PAGE>
5.3 MEZZANINE STRUCTURE
A. The 152,210sf mezzanine structure shall be comprised of Vulcraft
type steel girder trusses with steel trusses at 6'-0" O.C. The
mezzanine deck shall be 22 gage G60 steel deck with a 3" topping
slab.
5.2 MISCELLANEOUS STEEL
A. One roof scuttle ladder and hatch shall be provided at each end
of building.
DIVISION 7 - THERMAL & MOISTURE PROTECTION
7.1 ROOFING & SHEET METAL
A. Roof membrane shall be a 4-ply built-up fiberglass roof with a
mineral cap surface with R-11 batt insulation.
B. Copings, gutters and downspouts shall be preprimed, 24-gauge,
sheet metal fabricated in accordance with SMACNA.
C. A 2-year warranty has been included for the roofing.
D. Flashing and counter-flashing for the rooftop units shall be
provided in accordance with SMACNA.
7.2 CAULKING & SEALANTS
A. All exterior tilt-up concrete joints shall be caulked using a
2-part Dymeric polyurethane. The joints shall also have a backer
rod behind the caulk (exterior only).
DIVISION 8 - DOORS & HARDWARE
8.1 HOLLOW METAL DOORS & FRAMES
A. Hollow metal door frames shall be provided. Frames shall be
welded type.
B. Exterior hollow metal doors shall be 1-3/4" thick seamless flush
foam filled doors. Doors shall be constructed of 18 gauge steel.
C. All materials, construction and installation shall be in
accordance with the specification of the Steel Door Institute.
8.2 HARDWARE
A. All exterior doors shall receive one and one-half (1-1/2) pair
ball bearing
<PAGE>
hinges, closer, lever arms, lock set, weather stripping,
threshold, wipe strip, drip cap and latch guard.
B. All hardware shall have a dull chrome finish (626D) and be of
Series "S" commercial quality as manufactured by Schlage or
equal. All hinges and latches will be steel with a stainless
steel finish and all closers will be aluminum.
8.3 OVERHEAD DOORS
A. (146) - 8'x10' and (4) - 14'x16' overhead doors have been
provided.
B. Doors shall be counterbalanced overhead, with a baked on enamel
prime finish.
B. 24-gauge non-insulated sectional doors with 2" tracks.
C. All overhead doors shall be manual operation. 8'x10' only to
manual. All 14'x16' O.H. doors shall be electrically operated.
8.4 STOREFRONTS & WINDOWS
A. Storefront and windows include the use of clear anodized aluminum
storefronts with narrow stile entrance doors, standard hardware
and 3/16" reflective 1" O.A. insulating glass.
8.5 SKYLIGHTS/SMOKE VENTS
A. Single dome smoke vents.
DIVISION 9 - FINISHES
9.1 PAINTING
A. The exterior tilt-up concrete wall panels shall be painted with
(2) coats of acrylic paint.
9.2 GWB
A. Draft curtains to be provided per building code requirements.
DIVISION 10 - SPECIALTIES
10.1 SIGNS
A. Handicapped parking stall signs shall be provided as required.
<PAGE>
DIVISION 11 - EQUIPMENT
11.1 EDGE OF DOCKS
A. All overhead doors to receive a Model FX 35,000 lb. capacity
mechanical dockleveler manufactured by Kelley.
DIVISION 14 - CONVEYANCE SYSTEMS
14.1 ELEVATOR
A. Dover 2100 Series Hydraulic elevator.
DIVISION 15 - MECHANICAL
15.1 PLUMBING
A. A sanitary sewer line is run to each office module.
B. 2" waterline stubbed into building and capped.
15.2 FIRE PROTECTION
A. A complete wet fire sprinkler system shall be provided
throughout the building.
- An ESFR system shall be provided in all high bay areas.
- The areas below the mezzanine will receive a system to
accommodate storage of Class IV materials to 15' high.
The system will provide .29 gpm over 2000 sf.
- The areas above the mezzanine will receive a system to
accommodate storage of Class IV materials to 12' high.
The system will provide .17 gpm over 2000 sf.
15.3 WAREHOUSE HEATING
A. The warehouse to have gas fired unit heaters for freeze
protection of 8 BTU's per SF per N.R.E.C.
DIVISION 16 - ELECTRICAL
16.1 SERVICE
<PAGE>
A. Electrical service to building to be 1,200 amp, 277/480 volt,
3-phase service. One 100 amp, 277/480 volt, 3-phase service with
a 15 kva transformer and (1) 100 amp, 120/208 volt, 3-phase panel
for house lighting and power. Alternate 1,600 amp service to be
at Eagle's option.
B. The electrical service to the building shall be underground. The
power transformer shall be sized and installed by Puget Power.
16.2 POWER WIRING
A. The power wiring for the unit heaters shall be provided.
B. Power for the phone board shall be provided.
C. Power for the irrigation system shall be provided.
D. Power for the fire alarm system shall be provided.
16.3 LIGHTING
A. The warehouse lighting shall be high bay metal halide fixtures 15
footcandles at 3' above floor.
B. The egress lighting shall be single or double faced with battery
backup and shall be provided as required by code.
C. Emergency lighting will be provided by high bay fixtures power by
an emergency generator and as required by code.
D. Site lighting shall be provided by wall pacs and will provide 0.5
footcandles at the outside edge of paving.
16.4 TELEPHONE/DATA
A. Two (2) 4" conduits with pull string for telephone service shall
be provided.
B. All other telephone and data wiring to be provided by owner or
Buyer (Eagle).
DIVISION 17 - EXCLUSIONS & CLARIFICATIONS
17.1 ITEMS PROVIDED BY OWNER (Seller) (Seller is Kent Central, LLC)
A. Gas and electric company recoupment and/or other utility capacity
charges. The underground electrical fees are not included. - by
Seller
B. Telephone and communications system. - by Eagle (Buyer)
<PAGE>
D. Connection of the fire suppression to a central monitoring
station. - by Seller
E. 8.2% Washington Sales Tax. - by Seller
F. Building permit costs and plan check fees, mitigation costs,
water, storm or sewer assessments. - all by Seller
G. Hose stations. - by Eagle (if required - See Larry Benaroya
letter 6/26/97)
H. Environmental assessment study or any testing for hazardous
materials. - by Seller
I. Removal of underground obstructions, i.e., rock, trash, toxics,
etc., or unsuitable materials. - all by Seller
J. Architectural and engineering fees. - by Seller
K. Bonds. - by Seller
L. Site and building demolition. - by Seller
<PAGE>
[LOGO]
KELLEY FX-REGISTERED TRADEMARK- DOCKLEVELER
[ART]
SUMMARY OF FEATURES
- - High volume, low-pressure airbag lifting mechanism.
- - Lifting bag with polyvinylchloride coated, polyester fibers retains lifting
effectiveness even when punctured; easily repaired with adhesive vinyl
patches.
- - Lifting bag operates under temperature extremes of -65 degrees to +150
degrees F.
- - 60,000 lbs. structural dock levels support legs. Drop tested to the full
rated capacity of the dockleveler.
- - Lifting bag, gaskets,and fittings resistant to chemical exposure and rodent
damage.
- - 10 amp fan with two-stage, single-speed, self-cleaning filters, UL-approved
motor--runs off 115 volt single-phase electrical outlet.
- - Shielded NEMA 4 push-button activation.
- - Automatic lip extension with every cycle.
- - Filtered, self-cleaning fan motor reverses air direction through fan motor
housing.
- - Full operating range toe guards with yellow OSHA required markings (per
ANSI Z535).
- - Self-cleaning lug-type lip hinge with lifetime warranty.
<PAGE>
[LOGO]
SPECIFICATIONS FX-REGISTERED TRADEMARK- Dockleveler
ARCHITECTURAL SPECIFICATIONS (SHORT FORM)
Automatic adjustable dockleveler(s) to be 8' long x 6' wide, (25,000
lbs.-50,000 lbs.) capacity of dockleveler per ANSI MH 14.1-87. To be fully
automatic, air operated with heavy-duty, shielded NEMA 4 Push-button control
box as standard. Electrical requirements to be standard 115v single phase
for ease of installation. Gravity Lip-TM- Automatic Lip Extension ensures
proper lip extension, with descent of dockleveler into trailer. Below Dock
Control Chain supplied to retract dock level support legs for complete
servicing of trailers below dock. Below Dock Control Chain also allows for
lowering of leveler without extending lip. Full operating range toe guards
with OSHA required (per ANSI Z535.1) yellow markings. Dockleveler to be
complete package including motor housing assembly, full operating range toe
guards, integral maintenance strut for deck, and lip lock. Two heavy duty
dock bumpers as standard. To meet ANSI MH 14.1-87 and CS 202-56 standards.
To be Kelley model FX6x8-35 as distributed by Pace Material Handling.
FX dockleveler available in 6, 6.5, and 7 foot widths as well as 6, 8, and 10
foot lengths. Capabilities from 25 to 50,000 lbs. Consult factory.
Actual life of any dockleveler is dependent on gross load weight, weight
distribution, angle of incline, type of forklift truck, number of forklift
truck wheels, type of tire and speed of forklift truck. Proper
application, based on actual operating conditions, can be made by use of an
authorized Kelley Dock Systems Distributor.
OPERATION
- - Dockleveler rises when NEMA 4 shielded push-button is pushed and held.
- - Gravity Lip-TM- automatically extends as deck section descends into trailer
bed.
- - After loading or unloading is complete dock attendant pushes button to
activate air system and raise dockleveler. Gravity Lip-TM- falls pendant
and dockleveler is stored.
- - In stored position, dockleveler is fully supported by docklevel support
legs.
- - Ramp may be lowered to fully supported below dock level position, without
extending lip, to service low trucks in end load situations.
CONSTRUCTION
- - Unitized ramp section.
- - Self cleaning lug-style lip hinge with lifetime warranty.
- - Fully welded, easy-to-clean subframe.
- - Airbag and fan motor subassembly.
- - Fixed rear hinge provides 4" of side-to-side tilt without gap at rear hinge.
WORKING (SERVICE) RANGE
Six and eight foot long models - 24' from 12" above dock to 12" below. Ten
foot long models - 30', from 18" above dock to 12" below.
OPTIONAL FEATURES1
- - Foam insulated ramp.
- - Abrasive skid resistant ramp and lip surface.
- - Spray metalized ramp, lip and frame.
- - Eighteen or twenty inch lip. Recommended for use when servicing
refrigerated trailers.
- - Minimum lip bend to reduce crown between deck and lip for use with
mechanical handling equipment with low underclearance.
- - Smooth plate deck and lip.
- - Custom specified color.
- - Black and yellow striped toe guards.
ACCESSORIES
- - Spacer kit for existing pits and new construction sloped pits--recommended
for food and food service applications.
- - Curb angle sets.
- - Side and rear weatherseal.
- - Self-forming pans.
- - Self-contained frames.
KELLEY RECOMMENDS
- - AUTOCHOCK-TM- truck restraining system.
- - TRUKSTOP-TM- truck restraining system.
- - TRUKALERT-TM- illuminated loading dock communications
package.
- - SENTRY-TM- Safety Gate
SHIPPING WEIGHTS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
25,000 LB. 30,000 LB. 35,000 LB. 40,000 LB. 45,000 LB. 50,000 LB.
MODEL CAPACITY CAPACITY CAPACITY* CAPACITY CAPACITY* CAPACITY
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FX 6 x 6 1360 1460 1460 1612 1612 1669
FX 6 x 8 1648 1761 1761 1943 1943 2028
FX 6 x 10 2007 2132 2132 2345 2345 2456
FX 6.5 x 6 1453 1557 1557 1656 1656 1714
FX 6.5 x 8 1739 1860 1860 1991 1991 2076
FX 6.5 x 10 2154 2293 2293 2461 2461 2572
FX 7 x 6 1549 1657 1657 1793 1793 1851
FX 7 x 8 1843 1972 1972 2143 2143 2227
FX 7 x 10 2300 2454 2454 2666 2666 2777
- -----------------------------------------------------------------------------------------
</TABLE>
* Reinforced.
Consistent with our policy of continuing product improvement, we reserve the
right to change these specifications without notice or obligation.
- -C-1996 Kelley Dock Systems Form No. 10-795 R3
Kelley Dock Systems
6720 N. Teutonia Avenue
Milwaukee, WI 53209-0993 USA
TEL: (414) 352-1000
FAX: (414) 352-2093
<PAGE>
EXHIBIT D
CONSTRUCTION SCHEDULE
Date Completed Duration Event
- -------------- -------- -----
June 25, 1997 Approve Building Footprint
July 7, 1997 10 Days Approve Schematic Design
July 28, 1997 3 weeks Complete Construction Drawings
October 28, 1997 1-3 Months Obtain Construction Permit
May 16, 1998 200 Days Substantial Completion
<PAGE>
EXHIBIT A
ALTERNATIVE 1
EAGLE HARDWARE & GARDEN WAREHOUSE
WITH 50-FOOT ROAD ALONG SOUTH LINE
PARCEL A:
All of Tract 5 and those portions of Tract 1 and the unplatted Tract "A," Kent
Five Acre Tracts, according to the plat thereof, recorded in Volume 10 of Plats,
page 19, in King County, Washington, described as follows:
COMMENCING at the Southeast corner of the Northeast quarter of the Southeast
quarter of Section 12, Township 22 North, Range 4 East, Willamette Meridian, in
King County, Washington;
THENCE West along the South line of said subdivision 30 feet to a point on the
West margin of Primary State Highway No. 5 (84th Avenue South), said point being
the Southeast corner of said unplatted Tract "A" and the TRUE POINT OF
BEGINNING;
THENCE North along the West line of Primary State Highway No. 5, a distance of
30 feet;
THENCE West parallel with the South line of said Tracts 1 and "A," a distance of
320 feet;
THENCE North parallel with the East line of said Tracts 1 and "A," 291.7 feet,
more or less, to the North line of said Tract 1;
THENCE West 328.5 feet, more or less, to the Northwest corner of said Tract 1;
THENCE South 321.7 feet, more or less, to the Southwest corner of said Tract 1;
THENCE East along the South line of said Tracts 1 and "A," 648.5 feet, more or
less, to the TRUE POINT OF BEGINNING;
EXCEPT the East 12 feet of the South 30 feet of Tract "A," conveyed to the City
of Kent for street by deed recorded under Recording No. 7209150092; and
EXCEPT that portion conveyed to the City of Kent for street by deed recorded
under Recording No. 7908130086;
ALSO EXCEPT that portion of Tract 2 of Kent Five Acre Tracts, according the plat
thereof recorded in Volume 10 of Plats, page 19, in King County, Washington,
described as follows:
BEGINNING at the Southeast corner of said Tract 2;
THENCE North 88DEG. 26' 13" West along the South line of said Tract 2, a
distance of 320.00 feet;
THENCE North 01DEG. 14' 06" East parallel with the East line of said Tract 2, a
distance of 288.18 feet to the South line of the North 50 feet of said Tract 2;
THENCE South 88DEG. 25' 58" East along said South line of the North 50 feet of
Tract 2, a distance of 320.00 feet to the East line of said Tract 2;
THENCE South 01DEG. 14' 06" West along said East line, a distance of 288.16 feet
to the POINT OF BEGINNING;
EXCEPT the East 12 feet thereof for 84th Avenue South;
Situate in the County of King, State of Washington.
[SEAL]
MARK S. HARRISON
STATE OF WASHINGTON
21457
REGISTERED
PROFESSIONAL LAND SURVEYOR
EXPIRES 8/4/98
/s/Mark S. Harrison
6-18-97
Project: Kent Warehouse
June 18, 1997
-1-
<PAGE>
PARCEL B:
Tracts 2, 7 and 9, Kent Five Acre Tracts, according to the plat thereof,
recorded in Volume 10 of Plats, page 19, in King County, Washington;
EXCEPT the West 20 feet of said Tract 9, condemned for drainage ditch by
Drainage District No. 1, in King County Superior Court Cause No. 329121; and
EXCEPT the East 12 feet of Tract 2, conveyed to the City of Kent for street by
deed recorded under Recording No. 7209150101; and
EXCEPT that portion conveyed to the City of Kent for street by deed recorded
under Recording No. 7908130086.
PARCEL C:
Unplatted Tract "B," as shown and delineated on the plat of Kent Five Acre
Tracts, according to the plat thereof, recorded in Volume 10 of Plats, page 19,
in King County, Washington;
EXCEPT the West 20 feet thereof condemned for drainage ditch by Drainage
District No. 1, in King County Superior Court Cause No. 329121; and
EXCEPT that portion thereof lying North of the Westerly extension of the
centerline of South 218th Street; and
EXCEPT that portion thereof conveyed to the City of Kent for street by deed
recorded under Recording No. 7908130086.
PARCEL D:
That portion of the South half of the Southeast quarter of Section 12, Township
22 North, Range 4 East, Willamette Meridian, in King County, Washington,
described as follows:
COMMENCING at the Northeast corner of said South half of the Southeast
quarter;
THENCE West along the North line of said South half of the Southeast quarter, 30
feet to an intersection with the West margin of Primary State Highway No. 5
(84th Avenue South) and the TRUE POINT OF BEGINNING;
THENCE CONTINUING West along said North line to the Easterly margin of the
right-of-way of the Northern Pacific Railway Company;
THENCE Southeasterly along said Easterly margin to the Northwest corner of Tract
8, Shinn's Valley Home Addition to Kent, according to the plat thereof, recorded
in Volume 7 of Plats, page 22, in King County, Washington;
THENCE East along the North line of said addition to an intersection with a line
parallel with and 320 feet West of the West margin of Primary State Highway No.
5;
[SEAL]
MARK S. HARRISON
STATE OF WASHINGTON
21457
REGISTERED
PROFESSIONAL LAND SURVEYOR
EXPIRES 8/4/98
/s/Mark S. Harrison
6-18-97
Project: Kent Warehouse
June 18, 1997
-2-
<PAGE>
THENCE North parallel with the West margin of Primary State Highway No. 5 to an
intersection with a line 30 feet South of and parallel with the North line of
the South half of the Southeast quarter of said Section 12;
THENCE East along said parallel line to the West margin of Primary State Highway
No. 5;
THENCE North along said West line 30 feet to the TRUE POINT OF BEGINNING;
EXCEPT the Westerly 20 feet thereof condemned for drainage ditch by Drainage
District No. 1, in King County Superior Court Cause No. 329121; and
EXCEPT the East 12 feet conveyed to the City of Kent for street by deed recorded
under Recording No. 7209150092;
TOGETHER WITH that portion of South 218th Street adjoining as vacated by City
of Kent Ordinance No. 3293 recorded under Recording Nos. 9608080143 and
9701280976 which would attach by operation of law.
[SEAL]
MARK S. HARRISON
STATE OF WASHINGTON
21457
REGISTERED
PROFESSIONAL LAND SURVEYOR
EXPIRES 8/4/98
/s/Mark S. Harrison
6-18-97
Project: Kent Warehouse
June 18,1997
-3-
<PAGE>
[SITE PLAN]
<PAGE>
[SITE PLAN]
<PAGE>
[LETTERHEAD]
June 26, 1997
Mr. Richard Takata
Mr. Peter Gallina
Eagle Hardware & Garden
981 Powell Avenue SW
Renton, Washington 98055
Dear Pete and Rich,
Thank you for your call advising me that Dave has signed the agreement, but as a
final outstanding item, needs clarification/correction of Exhibit C, paragraph
17 - Exclusions and Clarifications.
As we discussed, Poe is not including the items in paragraph 17 in their
contract with us.
In our agreement with you, those items are all included with the exception of
items B and G.
As to item B, we will bring telephone service to the building. You will provide
the telephone and communications systems.
As to item G, when the Kent Fire Department does its inspection of your facility
sometime after you take occupancy of the building, they may determine, based
upon your occupancy, that you need hose stations. If any were required, they
(like the phone system) would be related to your specific use and would be at
your cost. (We don't expect any hose stations will be required since none have
been required in the 3 other buildings we have built in Kent in the past year.)
We will be ready to begin moving dirt from Van Doren's West to Kent Central next
week, and will move as quickly as possible to make the most of the construction
season.
Thanks for your help.
Sincerely,
/s/Larry Benaroya
Larry Benaroya
<PAGE>
REAL ESTATE PURCHASE AND SALE AGREEMENT
This agreement (the "Agreement") dated June 24, 1997 is made by and
between;
(a.) HAVANA STREET PARTNERSHIP, a general partnership, ("Seller
A") for purchase and sale of that certain real property
consisting of approximately 4.0 acres of vacant land shown
as Tract 4 ("Property A") on Exhibit A1 and;
(b.) FRANK V. FURSTENBERG, an individual, ("Seller B") for
purchase and sale of that certain real property consisting
of approximately 7.0 acres of vacant land shown as Tract 3
and the east 182.79 feet of Tract 2 ("Property B") on
Exhibit A1 and;
EAGLE HARDWARE & GARDEN, INC., a Washington corporation, ("Buyer") for purchase
and sale of that certain real property described in (a.) and (b.) above
consisting of an approximate total of 11.0 acres. The 11.0 acres is fronted by
Havana Street on the east, between East Mexico Avenue on the north and East
Colorado Avenue on the south in the city of Aurora, Colorado. The legal
descriptions and tract map for the 11.0 acres are attached hereto as Exhibit A
and Exhibit A1, respectively, and are made a part of this Agreement by this
reference, and any improvements thereon and all rights appurtenant thereto (the
"Property A and B"). The Property and the improvements planned by Buyer are
shown on the proposed site plan dated May 12, 1997 and numbered X329A (the "Site
Plan") to be attached hereto as Exhibit B.
Seller agrees to sell, and Buyer agrees to buy, the Property upon and
subject to the terms and conditions set forth below:
1. PURCHASE PRICE; PAYMENT. The total purchase price for the
Property shall be based on Seven Dollars ($7.00) per square foot of land area.
It is estimated that the total Property contains 479,160 square feet and that
the purchase price will be Three Million Three Hundred Fifty-four Thousand One
Hundred Twenty Dollars ($3,354,120.00). The area of Property A and Property B
and the total purchase price for each shall be determined by a current ALTA/ACSM
survey showing each Property to be provided by its Seller. The purchase price
shall be adjusted to the final certified square footage, which amount, including
the Deposit and interest accrued thereon, shall be paid in cash upon closing.
1.1 ALLOCATION OF PURCHASE PRICE. For purposes of this Contract,
the purchase price payable hereunder shall be allocated and payable as follows:
(a) $2,554,120.00 shall be allocated to Property A and
shall be payable to Seller A.
(b) $800,000.00 shall be allocated to Property B and shall
be payable to Seller B.
1
<PAGE>
2. EARNEST MONEY DEPOSIT. Within ten (10) business days after the
Effective Date, Buyer will deposit earnest money of Forty-five Thousand Dollars
($45,000.00) for Property A and Five Thousand Dollars ($5,000.00) for Property B
(the "Deposits") with Chicago Title Insurance Company in Denver, Colorado (the
"Closing Agent"). The Closing Agent shall place the Deposits in an
interest-bearing account, with interest to accrue to Buyer's benefit. If this
transaction does not close for any reason other than default by Buyer under this
Agreement, the Deposits, and all interest accrued thereon, shall be returned to
Buyer. In the event of Buyer's default under this Agreement, Sellers shall have
as their sole remedy the right to terminate this Agreement and retain their
Deposits, together with accrued interest thereon, as liquidated damages.
3. TITLE INSURANCE AND SURVEY.
3.1 PRELIMINARY TITLE COMMITMENT. Within fifteen (15) days
after the Effective Date, Seller A and Seller B shall provide Buyer with current
preliminary commitments for owner's title insurance with extended coverage (ALTA
Form 1970-B, as revised in 1984, or if unavailable, Form B-1987) issued by
Chicago Title Insurance Company, with copies of all documents listed as
exceptions set forth therein for their respective Properties.
3.2 ALTA/ACSM SURVEY. Within thirty (30) days after the
Effective Date, Seller A and Seller B at their sole cost and expense shall
provide Buyer with one current ALTA/ACSM survey which shows both Property A and
Property B with a land area certification of their respective Properties. Buyer
and Seller agree that the legal descriptions of Property A and Property B shown
on the new ALTA/ACSM survey shall be the legal descriptions used for Exhibit A.
3.3 TITLE AND SURVEY APPROVAL PERIODS. Buyer shall have
fifteen (15) days from the later receipt of either the preliminary commitments
or the survey (and any amendments, supplements and revisions to either in which
new or revised exceptions or items first appear) to notify Sellers of its
disapproval of any exceptions shown in the preliminary commitment or any items
on the survey. If, within twenty (20) days after the receipt of such notice
Sellers have not removed or given reasonable written assurances to Buyer that
such disapproved exceptions or items will be removed on or before closing, Buyer
may, at its option, at any time prior to such removal or receipt of such
reasonable written assurances, terminate this Agreement by giving notice of such
termination to both Sellers. On such termination Closing Agent shall refund the
Deposits and all interest accrued thereon to Buyer and all rights and
obligations of Sellers and Buyer under this Agreement shall terminate and be of
no further force or effect. NOTE LAST SENTENCE ADDED TO SECTION 3.3 TO AGREEMENT
PER LETTER DATED 7/3/97.
4. ADDITIONAL CONTINGENCIES. Buyer's obligation to purchase the
Property is subject to Buyer's satisfaction or waiver, in writing, of the
following conditions precedent, in Buyers sole and absolute discretion, on or
before the dates described below:
4.1 FEASIBILITY. Buyer's sole determination that its proposed
site plan, building plan, parking plan and access plan for the Property are
acceptable; that utilities are available of adequate capacity to serve the
Property; and that the Property is otherwise feasible for Buyer's intended use.
4.2 STUDIES. Buyer's approval of all soils, engineering,
seismic, environmental, topography, hazardous waste, geotechnical, wetlands,
drainage and other studies that may be deemed necessary by Buyer or required by
any governmental agency in connection with the Property and Buyer's planned
development and use of the Property.
2
<PAGE>
4.3 APPROVALS AND PERMITS. Issuance of any and all required or
applicable governmental approvals including but not limited to a PUD and plat of
the Property, subdivision approvals, zoning or rezoning approvals, Colorado
Department of Transportation highway access and traffic signal approvals (if
required), building permits, use permits, design review approvals, site plan
approvals, and approvals of any kind from any and all governmental agencies
having jurisdiction over the Property, necessary for Buyer to develop the
property, construct it's building and site improvements and operate its selected
business on the Property. The timing, conditions and cost of any or all of the
permits and approvals (including any mitigation fees) must be satisfactory to
Buyer in its sole discretion.
4.4 TIME PERIODS. Buyer shall have forty-five (45) days from
the Effective Date (the "Feasibility Period") to satisfy or waive in writing the
contingencies set forth in Sections 4.1 and 4.2 (the "Feasibility Period").
Buyer shall have one hundred fifty (150) days (the "Contingency Period") from
the end of the Effective Date to satisfy or waive in writing the contingencies
set forth in Section 4.3. If Buyer does not satisfy or waive the contingencies
by the applicable dates, the Deposits, with interest, shall be refunded to Buyer
and the Agreement shall terminate.
5. CLOSING.
5.1 TIME FOR CLOSING; TERMINATION DATE. This sale shall be
closed in the office of the Closing Agent within five (5) working days after
all of Buyer's conditions precedent have been satisfied or waived by Buyer. The
actual closing date shall be a date selected by Buyer and agreeable to Sellers.
Buyer and Sellers shall deposit in escrow with Closing Agent all instruments,
documents and monies necessary to complete the sale in accordance with this
Agreement. As used herein, "closing" or "date of closing" means the date on
which all appropriate documents are recorded and proceeds of sale are available
for disbursement to Sellers. If all of Buyer's conditions have been satisfied or
waived and all required instruments have been deposited into escrow with the
Closing Agent, Buyer shall use its best efforts to close the sale prior to
November 15, 1997. Funds held in reserve accounts pursuant to escrow
instructions shall be deemed, for purposes of this definition, as available for
disbursement to Sellers.
5.2 ACCEPTANCE OF EXCEPTIONS. Neither Sellers nor Buyer shall
be required to close, and the Deposit and all interest thereon shall be returned
to Buyer, if any exception or item contained in the preliminary commitments for
owner's title insurance is disapproved by Buyer as herein provided cannot be
removed by the date of closing; provided, however, that Buyer may elect to waive
any disapproved exceptions or items and close on the remaining terms.
Notwithstanding the foregoing, Sellers shall remove any defect or encumbrance
attaching by, through or under Sellers after the Effective Date of this
Agreement. Exceptions to be discharged by Sellers may be paid out of the
purchase price at closing.
5.3 SIMULTANEOUS CLOSINGS. Buyer shall not be required to
close on either Property A or Property B without the simultaneous closing of the
other Property. If this Agreement is terminated for any reason by Buyer and/or
Sellers with regards to Property A or Property B, the Agreement shall be
automatically terminated in its entirety in regards to both Property A and
Property B and all conditions or requirements affected by such termination shall
apply to both Seller A and Seller B as well as Property A and Property B. It is
intended that Closing shall occur simultaneously for both Properties and any
default or termination affecting one property shall automatically apply to the
other and vice versa.
3
<PAGE>
5.4 PRORATIONS; CLOSING COSTS. Taxes and assessments for the
current year and utilities constituting liens shall be prorated as of the date
of closing. Sellers shall pay the premium for the title insurance policy, real
estate excise, transfer and/or conveyance taxes, the cost of conveyance tax
stamps, if any, and one-half of Closing Agent's escrow fee. Buyer shall pay the
cost of recording the statutory warranty deed, one-half of Closing Agent's
escrow fee and the difference in the cost of the premium between standard
owner's and extended coverage.
5.5 POSSESSION. Buyer shall be entitled to possession of both
Properties upon closing.
6. CONVEYANCE OF TITLE. On closing, Sellers shall execute and
deliver to Buyer statutory warranty deeds conveying good and marketable title to
Property A and Property B free and clear of any defects or encumbrances except
for the lien of real estate taxes for the current calendar year not yet due and
payable, those defects or encumbrances appearing on the preliminary commitment
for title insurance that are approved by Buyer (the "Permitted Exceptions"), and
other encumbrances or defects approved by Buyer in writing.
As soon as available after closing, Sellers shall provide to Buyer
policys of title insurance pursuant to the preliminary commitments, dated as of
the closing date and insuring Buyer in the amount of the purchase price of each
Property against loss or damage by reason of defect in Buyer's title to the
Properties subject only to the printed exclusions and general exceptions
appearing in the policy form; any Permitted Exceptions; the exceptions specified
in the preliminary commitments which Buyer has not disapproved of as provided
herein; and real property taxes and assessments that are not delinquent.
7. RISK OF LOSS; CONDEMNATION. Risk of loss of or damage to the
Properties shall be borne by Sellers until the date of closing. Thereafter,
Buyer shall bear the risk of loss. In the event of material loss of or damage to
the Properties prior to the date upon which Buyer assumes the risk, Buyer may
terminate this Agreement by giving notice of such termination to Sellers and
Closing Agent, and such termination shall be effective and the Deposit and
interest thereon shall be refunded ten (10) days thereafter; provided, however,
that such termination shall not be effective if Sellers agree in writing within
such ten (10) day period to restore the affected Property substantially to its
present condition by the closing date.
If either or both Properties are or become the subject of a
condemnation proceeding prior to closing, Buyer may, at its option, terminate
this Agreement by giving notice of such termination to Sellers, and upon such
termination the Deposit and accrued interest shall be returned to Buyer and this
Agreement shall be of no further force or effect; provided, however, that Buyer
may elect to purchase the Properties, in which case the total purchase price
shall be reduced by the total of any condemnation award received by Sellers. On
closing, Sellers shall assign to Buyer all of Sellers' rights in and to any
future condemnation awards or other proceeds payable or to become payable by
reason of any taking. Sellers agree to notify Buyer of eminent domain
proceedings within five (5) days after Sellers learns thereof.
8. SELLERS' REPRESENTATIONS AND WARRANTIES. In addition to other
representations herein, Sellers represent and warrant to Buyer that at the date
of execution hereof and as of the date of closing:
8.1 Sellers, and the persons signing on behalf of Sellers, have
full power and authority to execute this Agreement and perform Sellers'
obligations hereunder, and all necessary actions to authorize this transaction
have been taken;
8.2 The Property is not subject to any leases, tenancies or
rights of persons in possession;
4
<PAGE>
8.3 Neither the Property nor the sale of the Property violates
any applicable statute, ordinance or regulation, nor any order of any court or
any governmental authority or agency, pertaining to the Property or the use
occupancy or condition thereof;
8.4 Sellers are unaware of any material defect in the Property;
8.5 All persons and entities supplying labor, materials and
equipment to the Properties have been paid and there are no claims or liens;
8.6 There are no currently due and payable assessments for
public improvements against the Properties and Sellers are not aware of any
local improvement district or other taxing authority having jurisdiction over
the Properties in the process of formation;
8.7 The Properties have legal access to all streets adjoining
the Property;
8.8 Sellers have good and marketable titles to the Properties;
8.9 Sellers are not "foreign persons" for purposes of Section
1445 of the Internal Revenue Code. Prior to closing, Sellers shall execute and
deliver to Closing Agent affidavits in order to meet the Foreign Investment in
Real Property Tax Act ("FIRPTA") requirements of I.R.C. # 1445; and
8.10 Sellers have not received notification of any kind from any
agency suggesting that the Properties are or may be targeted for a Superfund or
similar type of cleanup. To the best of Sellers' knowledge, neither the
Properties nor any portion thereof are or have been used (i) for the storage,
disposal or discharge of oil, solvents, fuel, chemicals or any type of toxic or
dangerous or hazardous waste or substance, (ii) as a landfill or waste disposal
site, and (iii) does not contain any underground storage tanks. Sellers agree to
indemnify, defend and hold Buyer harmless from and against any and all loss,
damage, claims, penalties, liability, suits, costs and expenses (including,
without limitation, reasonable attorneys' fees) and also including without
limitation, costs of remedial action or cleanup, suffered or incurred by Buyer
arising out of or related to any such use of the Properties, or portions
thereof, occurring prior to the conveyance to Buyer, about which Sellers knew or
reasonably should have known prior to closing.
9. BUYER'S AUTHORITY. Buyer represents and warrants to Sellers that
at the date of execution hereof and at the date of closing Buyer, and the person
signing on behalf of Buyer, has full power and authority to execute this
Agreement and to perform Buyer's obligations hereunder.
10. DEFAULT. If either Seller A or Seller B defaults hereunder, Buyer
may seek specific performance of this Agreement, damages or rescission and Buyer
shall be entitled to return of the Deposits with accrued interest, on demand. If
Buyer defaults, the Deposits and accrued interest shall be forfeited to Sellers
as liquidated damages and as Sellers' sole and exclusive remedy and upon payment
thereof to Sellers, Buyer shall have no further obligations or liability
hereunder. In any suit, action or appeal therefrom to enforce this Agreement or
any term or provision hereof, or to interpret this Agreement, the prevailing
party shall be entitled to recover its costs incurred therein, including
reasonable attorneys' fees.
5
<PAGE>
11. NOTICES. All notices, waivers, elections, approvals and demands
required or permitted to be given hereunder shall be in writing and shall be
personally delivered (by overnight courier service or other means of personal
service) or sent by United States certified mail, return receipt requested, to
the addressee's mailing address set forth on the signature page:
and, in the case of Buyer, a copy to: William N. Moloney
5711 NE Tolo Rd.
Bainbridge Island, WA 98110
and, in the case of Seller, a copy to:
PETER J FURSTENBERG
1450 SO. HAVANA SUITE 328
AURORA COLORADO 80012
Either party hereto may, by proper notice to the other, designate any other
address for the giving of notice. Any notice shall be effective when personally
delivered or, if mailed as provided herein, on the date of actual receipt.
12. ASSIGNMENT. Buyer may assign its rights hereunder to any person
or entity provided that an Eagle Hardware & Garden store is constructed and
operated on the site. An assignment for any other use shall require Sellers'
consent which shall not be unreasonably withheld.
13. NO NEGOTIATIONS WITH THIRD PARTY. Sellers shall not negotiate nor
commit to sell, lease or otherwise transfer Property A or Property B or any
portions thereof to any other person or party as long as Buyer is proceeding in
good faith to perform its duties under this Agreement. This covenant shall
remain in full force and be legally binding upon Sellers until termination of
this Agreement.
14. EXCHANGE. Buyer acknowledges that Sellers may elect to sell
Property A and Property B pursuant to a transaction structured to qualify as a
like-kind exchange of real property within the meaning of Section 1031 of the
Internal Revenue Code of 1986, as amended (the "Code"), and any regulations
promulgated thereunder or under successor or similar federal or state statutes
involving exchange of ownership interests in real property, which transaction
contemplates the sale of both Properties in exchange for certain other parcels
of real property. Buyer shall fully (within commercial reasonableness) cooperate
with and accommodate Sellers in effecting a qualifying exchange through a trust,
escrow, multi-party transfer or other means as determined by Sellers, provided
that Buyer shall not be required to incur any obligation or liability to a third
party or take title to any property (other than Property A and Property B) in
connection with such exchange by Sellers nor shall the closing be delayed to
accommodate Sellers. In connection therewith, Sellers shall have the right to
assign their rights (but not their duties) under this Contract, in whole or in
part, to "qualified intermediary," as defined under current Code regulations
governing like-kind exchanges (the "Intermediary") or as otherwise necessary or
appropriate in Sellers' judgment to effectuate one or more like-kind exchanges.
Sellers shall bear any additional transaction costs attributable to exchange
procedures in any exchange transaction requested or implemented by Sellers or
its partners, and shall be solely responsible for assuring the effectiveness of
the exchange for Sellers' purposes.
6
<PAGE>
15. OBLIGATION OF SELLERS. Buyer acknowledges and agrees that Sellers
are comprised of Havana Street Partnership, a general partnership ("Seller A"),
and Frank V. Furstenberg, an individual ("Seller B"), and that Seller A will
convey title to the Property shown on Exhibit A1 as Tract 4 ("Property A") to
Buyer at closing, and that "Seller B" will convey title to the Property shown on
Exhibit A1 as the East 182.79 feet of Tract 2 and all of Tract 3 ("Property B")
to Buyer at closing. Accordingly, any and all obligations, covenants,
agreements, representations and warranties of Sellers with respect to the
Property A and Property B hereunder shall be deemed to be those of Seller A only
with respect to Property A, and to be those of Seller B only with respect to
Property B. The obligations of Seller A and Seller B hereunder shall not be
joint and several, except where the context clearly so indicates.
16. GENERAL. This is the entire agreement of Buyer and Sellers with
respect to the matters covered hereby and supersedes all prior agreements
between them, written or oral. This Agreement may be modified only in writing,
signed by Buyer and Sellers. Any waivers hereunder must be in writing. No waive
of any right or remedy in the event of default hereunder shall constitute a
waiver of such right or remedy in the event of any subsequent default. This
Agreement is for the benefit only of the parties hereto and shall inure to the
benefit of and bind the heirs, personal representatives, successors and assigns
of the parties hereto. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision hereof.
17. SURVIVAL OF WARRANTIES. The terms, covenants, representations and
warranties shall not merge in the deed of conveyance, but shall survive closing.
18. COMMISSIONS. All real estate commissions and/or brokers' fees
shall be payable by Seller at closing to H. C. Properties, Ltd. (the "Broker")
and Frisbie Realty ("Frisbie").. Such commissions and/or fees shall be agreed
upon in separate agreements between Sellers, Broker and Frisbie. Each party
represents to the other that it has engaged no other broker or agent in
connection with the negotiations leading to this Agreement. Sellers agree to
indemnify and hold Buyer harmless from and against all claims and demands of any
and all brokers or agents with respect to the Property.
19. EXHIBITS. Exhibits A and B attached hereto are incorporated
herein as if fully set forth.
Exhibit A - Legal Description
Exhibit B - Site Plan
7
<PAGE>
20. APPLICABLE LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Colorado.
21. EFFECTIVE DATE. The later of the Buyer's signature date and the
Sellers' signature date, set forth below, shall be the "Effective Date" of this
Agreement.
BUYER: EAGLE HARDWARE & GARDEN, INC.
By: /s/ Paul B. Morris
--------------------------------
Typed name: Paul B. Morris
June 02 , 1997 Its: Vice President
-----------------------
Buyer's signature date
Address:
981 Powell Avenue S.W.
Renton, WA 98055
SELLER A: HAVANA STREET PARTNERSHIP,
a General Partnership
By: /s/ Peter J. Furstenberg
--------------------------------
Typed name: Peter J. Furstenberg
June 4 , 1997 It's: Managing General Partner
-----------------------
Seller A signature date
Address:
1450 S. Havana
Suite 328
Aurora, CO 80012
SELLER B: FRANK V. FURSTENBERG,
an Individual
By: /s/ Frank V. Furstenberg
--------------------------------
Typed name: Frank V. Furstenberg
June 4 , 1997 Its: an Individual
-----------------------
Seller B signature date
Address:
c/o Havana Street Partnership
1450 S. Havana
Suite 328
Aurora, CO 80012
Subject to Terms of counter offer PJF
---
FVF
---
As Revised June 24, 1997 PJF
---
FVF
---
8
<PAGE>
EXHIBIT A
LEGAL DESCRIPTION
PROPERTY A (ALL OF TRACT 4)
AND
PROPERTY B (PORTION OF TRACT 2 AND ALL OF
TRACT 3)
(To be provided by Seller upon completion of the ALTA/ACSM Class A survey as set
forth in Section 3).
EXHIBIT "A"
9
<PAGE>
EXHIBIT "A"1
[TRACT MAP]
<PAGE>
EXHIBIT "B"
[SITE PLAN]
<PAGE>
COUNTEROFFER
This is a Counteroffer to that certain Real Estate Purchase and Sale
Agreement between Havana Street Partnership and Frank V. Furstenberg
(collectively as "Sellers") and Eagle Hardware & Garden, Inc., as Buyer
("Buyer") for certain real property described on Exhibit A-1 (the "Agreement").
The Sellers do hereby accept the Agreement subject to the following
modifications and amendments:
PARAGRAPHS 2 AND 4.4. Shall be amended to provide that the Earnest
Money Deposit shall become non-refundable after ninety (90) days from the
Effective Date except in the event Buyer is unable to obtain approval from the
City of Aurora to open an Eagle Hardware & Garden store on the site, or Seller's
are unable to deliver title to either Property A or Property B at closing or
otherwise fail to perform under this Agreement.
PARAGRAPH 3.3.
PARAGRAPH 6. Shall be amended to provide that the Deed shall be by
Special Warranty Deed.
PARAGRAPHS 8.3, 8.5, 8.6, 8.7, AND. These Sections are modified to
provide to the best of Sellers' knowledge and/or except as provided in the
preliminary title report.
PARAGRAPH 15. Shall be amended to add the following language: "Buyer
acknowledges and agrees that Seller B as Buyer has entered into a Vacant
Land/Farm and Ranch Contact to Buy and Sell Real Estate dated as of February 19,
1997 with Mary Louise Smith as Seller as amended providing for the sale to
Seller B of Property B ("Smith Contract"). Seller B shall deliver true and
correct copies of the Smith Contract together with any amendments thereto to
Buyer from time to time. Seller B shall have no obligation to close the
transaction provided for herein if the closing of title under the Smith Contract
fails to occur for any reason pursuant to the terms and conditions of the Smith
Contract, except for Seller's default thereunder."
PARAGRAPH 17. The following language is added to Paragraph 17 "for a
period of one year from closing."
The following additional provisions are added to the Agreement:
(a) "Except as set forth in this Agreement, Buyer acknowledges and
agrees that Buyer is purchasing the Property on a "AS IS" basis without any
warranties or representation express or implied with respect to any aspect,
portion or component of the Property."
<PAGE>
(b)
(c) To the extent not otherwise defined herein, all capitalized terms
used herein shall have the same definition as in the Agreement
This Counteroffer shall expire unless accepted in writing by Buyer as
evidenced by its signature below and delivered to Sellers on or before June 30,
1997.
BUYER: EAGLE HARDWARE & GARDEN, INC.
By: /s/George Smith
June 24, 1997 -------------------------------------
- ------------------------- George Smith, Vice President
Date
SELLER A: HAVANA STREET PARTNERSHIP,
a General Partnership
By: /s/Peter J. Furstenberg
June 4, 1997 -------------------------------------
- ------------------------- Peter J. Furstenberg
Date Managing General Partner
SELLER B: FRANK V. FURSTENBERG,
an Individual
By: /s/Frank V. Furstenberg
June 4, 1997 -------------------------------------
- ------------------------- Frank V. Furstenberg, an Individual
Date
2
<PAGE>
July 3, 1997
VIA FACSIMILE
(206) 842-4044
Peter W. Gallina
Store Development Project Coordinator
981 Powell Avenue Southwest
Retin, Washington 98055
Re: Real Estate Purchase and Sale Agreement for the Approximate Total of
11 Acres of Vacant Land fronting the west side of Havana Street
between East Mexico Avenue on the north and East, Colorado Avenue on
the south
Dear Peter:
Based on the discussion between our respective attorneys, we have agreed on
adding the following language in the last sentence to Section 3.3 of the
Contract as follows:
"In the event Seller has notified Buyer in writing that they do not
intend to remove certain exceptions and/or items, Buyer shall have 30
days after receipt of such notice to either terminate the Agreement or
to waive such exceptions and/or items where upon such exceptions
and/or items shall be deemed to be "Permitted Exceptions" under Section
6 herein."
Please sign on the signature line below to evidence your written agreement
to this paragraph.
Sincerely,
HAVANA STREET PARTNERSHIP
By /s/Peter J. Furstenberg
--------------------------------------
Peter J. Furstenberg,
Managing General Partner
By /s/Frank V. Furstenberg
--------------------------------------
Frank V. Furstenberg, an Individual
ACCEPTED:
EAGLE HARDWARE AND GARDEN, INC
By /s/Paul B. Morris 7/7/97
---------------------------------
Paul B. Morris, Vice President
cc: Richard Sapkin
Richard J. Saul, Esq.
William N. Moloney
<PAGE>
REAL ESTATE PURCHASE AND SALE AGREEMENT
This agreement (the "Agreement") dated June 24, 1997 is made by and between
OPUS NORTHWEST LLC, a limited liability company ("Seller") and EAGLE HARDWARE &
GARDEN, INC., a Washington corporation, or assigns ("Buyer") for purchase and
sale of that certain real property consisting of approximately 11.6 acres of
vacant land located in the west half of the proposed High Desert Village retail
development bounded by Cooley Road on the north, U.S. Highway 97 on the east,
situate in Deschutes County, near the northern city limits of Bend, Oregon, any
improvements thereon and all rights appurtenant thereto (the "Property"). The
Property is shown on the preliminary site plan dated June 12, 1997 and numbered
X413-C (the "Site Plan") and attached hereto as Exhibit "A". The Property is
part of a larger piece of property owned by Seller, the legal description of
which is attached hereto as Exhibit "B".
Seller agrees to sell, and Buyer agrees to buy, the Property upon and
subject to the terms and conditions set forth below:
1. PURCHASE PRICE; PAYMENT. The total purchase price for the Property
shall be based on Five Dollars and Ninety Cents ($5.90) per square foot of land
area which includes the per square foot prorata share of all Seller's costs for
Seller's work set forth in Section 6.1 of this Agreement. It is estimated that
the Property contains 505,296 square feet and that the purchase price will be
Two Million Nine Hundred Eighty-one Thousand Two Hundred Forty-six Dollars
($2,981,246.00). The area of the Property and the total purchase price shall be
determined by a current ALTA/ACSM survey to be provided by Seller. Such survey
shall be used to create the separate legal parcel described in Section 5 below.
The purchase price shall be adjusted to the final certified square footage,
which amount, including the Deposit and interest accrued thereon, shall be paid
in cash upon closing.
2. EARNEST MONEY DEPOSIT. Within ten (10) business days after the
Effective Date, Buyer will deposit earnest money of fifty thousand dollars
($50,000) (the "Deposit") with First American Title Insurance Company, 1700 SW
Fourth Avenue, Suite 102, Portland, OR 97201-5512 (the "Closing Agent"). The
Closing Agent shall place the Deposit in an interest-bearing account, with
interest to accrue to Buyer's benefit. If this transaction does not close for
any reason other than default by Buyer under this Agreement, the Deposit, and
all interest accrued thereon, shall be returned to Buyer. In the event of
Buyer's default under this Agreement, Seller shall have as its sole remedy the
right to terminate this Agreement and retain the Deposit, together with accrued
interest thereon, as liquidated damages.
3. TITLE INSURANCE AND SURVEY.
3.1 PRELIMINARY TITLE COMMITMENT. Within five (5) days after the
Effective Date, Seller shall provide Buyer with a current preliminary commitment
for owner's title insurance with extended coverage (ALTA Form 1970-B, as revised
in 1984, or if unavailable, Form B-1987) issued by First American Title
Insurance Company, with copies of all documents listed as exceptions set forth
therein.
3.2 ALTA/ACSM SURVEY. Within fifteen (15) days after the Effective
Date, Seller at its sole cost and expense shall provide Buyer with a current
ALTA/ACSM survey with land area certification of the Property. Buyer and Seller
agree that the legal description of the entire approximately 11.6 acres Property
shown on the new ALTA/ACSM survey shall replace, supersede and be substituted
for the legal description presently shown on Exhibit "B".
1
<PAGE>
3.3 TITLE AND SURVEY APPROVAL PERIODS. Buyer shall have ten (10)
days from the later receipt of either the preliminary commitment or the survey
(and any amendments, supplements and revisions to either in which new or revised
exceptions or items first appear) to notify Seller of its approval of or
objection to any exceptions shown in the preliminary commitment or any items on
the survey. If, within fifteen (15) days after the receipt of such notice Seller
has not removed or given reasonable written assurances to Buyer that such
disapproved exceptions or items will be removed on or before closing, Buyer may,
at its option, at any time prior to such removal or receipt of such reasonable
written assurances, terminate this Agreement by giving notice of such
termination to Seller. On such termination Closing Agent shall refund the
Deposit and all interest accrued thereon to Buyer and all rights and obligations
of Seller and Buyer under this Agreement shall terminate and be of no further
force or effect.
4. ADDITIONAL CONTINGENCIES. Buyer's obligation to purchase the Property
is subject to Buyer's satisfaction or waiver, in writing, of the following
conditions precedent, in Buyer's sole and absolute discretion, on or before the
dates described below:
4.1 FEASIBILITY. Buyer's sole determination that its proposed site
plan, building plan, parking plan and access plan for the Property are
acceptable; that utilities are available of adequate capacity to serve the
Property; and that the Property is otherwise feasible for Buyer's intended use.
4.2 STUDIES. Buyer's approval of all soils, engineering, seismic,
environmental, topography, hazardous waste, geotechnical, wetlands, drainage and
other studies that may be deemed necessary by Buyer or required by any
governmental agency in connection with the Property and Buyer's planned
development and use of the Property. Seller shall deliver all such studies in
its possession or within its control to Buyer within five (5) days from the
Effective Date.
4.3 APPROVALS AND PERMITS. Issuance of any and all required or
applicable governmental approvals including but not limited to a PUD (if
required) and plat of the Property by the City or County, subdivision approvals,
zoning or rezoning approvals, Oregon Department of Transportation highway access
and traffic signal approvals, City and/or County building permits, use permits,
design review approvals, site plan approvals, parking variances, and approvals
of any kind from any and all governmental agencies having jurisdiction over the
Property, necessary for Buyer to develop and construct it's store building,
drive-through building materials yard, garden yard and greenhouse, parking and
access drives, all as shown on Exhibit "A", and any other improvements that
Buyer deems necessary in its sole determination to conduct and operate its
selected business operations on the Property. All costs of the foregoing permits
and approvals shall be borne by Seller except those having to do with Buyer's
store building, drive-through building materials yard, garden yard and
greenhouse and signs, which shall be borne by Buyer. The timing, conditions and
cost of any or all of the permits and approvals (including any mitigation fees)
must be satisfactory to Buyer in its sole discretion.
4.4 COMPETITION. Buyer shall have no further obligation to perform
under this Agreement if any other home improvement retailer of any type is
granted a building permit or any other related permits for any location in the
City of Bend or Deschutes County within the ninety (90) day Contingency Period
set forth in Section 4.5, TIME PERIODS, below. Buyer's right to terminate this
Agreement based on this condition shall be at Buyer's sole and unfettered
discretion as opposed to any standard of good faith, fairness, or
reasonableness.
2
<PAGE>
4.5 TIME PERIODS. Buyer shall have up to thirty (30) days from the
Effective Date (the "Feasibility Period") to satisfy or waive in writing the
contingencies set forth in Sections 4.1 and 4.2. Buyer shall have up to ninety
(90) days (the "Contingency Period") from the Effective Date to satisfy or waive
in writing the contingencies set forth in Sections 4.3 and 4.4. If Buyer does
not satisfy or waive the contingencies by the applicable dates, or if Buyer
notifies Seller, in writing, on or before the applicable dates that it has
decided not to pursue the project any further and that this Agreement is
terminated, the Deposit with interest, shall be refunded to Buyer and the
Agreement shall terminate without further action.
4.6 SELLER'S CONTINGENCIES.
(a) This Agreement shall be subject to Seller's successful
negotiations with the underlying land owners related to postponing the closings
of the respective underlying parcels. This contingency shall be satisfied or
waived by Seller on or before thirty (30) days from the Effective Date or Seller
may terminate this Agreement by written notice to Buyer if given no later than
five (5) days thereafter whereupon the Deposit, with interest, shall be refunded
to Buyer.
(b) Seller's obligation to consummate closing is conditioned
upon Buyer agreeing to covenants, conditions, restrictions and easements (the
"REA") applicable to High Desert Village Shopping Center, of which the Property
is a part. A preliminary draft of the proposed REA will be delivered to Buyer on
or before thirty (30) days after expiration of the Feasibility Period.
5. SEPARATE LEGAL PARCEL. Seller shall create a separate legal parcel
for the Property (the "Eagle Parcel"), at Seller's sole cost and expense, out of
the property described in Exhibit "B". The remainder of such property shall be
hereinafter referred to as "Seller's Parcel". Seller shall complete such
separation prior to closing and shall use reasonable efforts to complete at the
earliest possible date if and to the extent reasonably requested by Buyer to
enable Buyer to expeditiously comply and proceed with the requirements of any
governmental authority.
6. SELLER'S WORK.
6.1 SELLER'S WORK. Seller shall complete all parking areas,
landscaping, access drive aisles and all other on-site improvements (except for
buildings) (shown on the site plan by W & H Pacific, numbered SPR1.0, sheet 1/3,
dated 2/20/97) on Seller's Parcel, at Seller's sole expense. Seller shall
complete all other required on or off site improvements, including but not
limited to, street accesses, curb cuts, access road improvements, paving,
landscaping, traffic signal installations and/or modifications and all required
off-site street, utility, landscaping and any other such work required to
develop High Desert Village shopping center within ninety (90) days of closing,
at Seller's sole expense. The final design and installation of Seller's work
shall coordinate with Buyer's site plan and access points.
6.2 COMMON DRIVE AISLES. Any common drive aisles on either the
Property or Seller's Parcel shall be paid for between Seller and Buyer on a pro
rata basis based on the ratio of the square footage of the land size of the
Property and Seller's Parcel.
3
<PAGE>
6.3 ROUGH GRADING OF PROPERTY. Seller shall deliver the Property
rough graded to Buyer's subgrade design elevations, plus/minus 1/10th and all
required utilities of the size and capacity to meet Buyer's requirements to
within Buyer's Property lines no later than forty-five (45) days after closing.
Buyer shall pay its pro-rata share of the cost of said rough grading only based
on its land area compared to the total land area of the center. Payment of the
rough grading costs, after Buyer's approval, shall be by separate agreement
outside of the Property purchase.
7. CLOSING.
7.1 TIME FOR CLOSING; TERMINATION DATE. This sale shall be closed in
the office of the Closing Agent within ten (10) days after all of Buyer's
conditions precedent have been satisfied or waived by Buyer. The actual closing
date shall be a date selected by Buyer and agreeable to Seller. Buyer and Seller
shall deposit in escrow with Closing Agent all instruments, documents and monies
necessary to complete the sale in accordance with this Agreement. As used
herein, "closing" or "date of closing" means the date on which all appropriate
documents are recorded and proceeds of sale are available for disbursement to
Seller. Funds held in reserve accounts pursuant to escrow instructions shall be
deemed, for purposes of this definition, as available for disbursement to
Seller.
Neither Seller nor Buyer shall be required to close, and the Deposit and
all interest thereon shall be returned to Buyer, if any exception or item
contained in the preliminary commitment for owner's title insurance is
disapproved by Buyer as herein provided and cannot be removed by the date of
closing; provided, however, that Buyer may elect to waive any disapproved
exceptions or items and close on the remaining terms. Notwithstanding the
foregoing, Seller shall remove any defect or encumbrance attaching by, through
or under Seller after the Effective Date of this Agreement. Monetary exceptions
to be discharged by Seller may be paid out of the purchase price at closing.
7.2 PRORATIONS; CLOSING COSTS. Taxes and assessments for the current
year and utilities constituting liens shall be prorated as of the date of
closing. Seller shall pay the standard owner's portion of the premium for the
title insurance policy, real estate excise, transfer and/or conveyance taxes,
the cost of conveyance tax stamps, if any, and one-half of Closing Agent's
escrow fee. Buyer shall pay the cost of recording the statutory warranty deed,
one-half of Closing Agent's escrow fee and the difference in the cost of the
premium between standard owner's and extended coverage, and the cost of all
endorsements to the title insurance policy obtained by Buyer.
7.3 POSSESSION. Buyer shall be entitled to possession upon closing.
8. CONVEYANCE OF TITLE. On closing, Seller shall execute and deliver to
Buyer a statutory warranty deed conveying good and marketable title to the
Property free and clear of any defects or encumbrances except for the lien of
real estate taxes for the current calendar year not yet due and payable, those
defects or encumbrances appearing on the preliminary commitment for title
insurance that are approved by Buyer, the REA, and all easements hereafter
granted either pursuant to the REA or to utility companies or the City of Bend
as a condition of permitting or developing improvements to the Property or the
Seller's Parcel (the "Permitted Exceptions"), and other encumbrances or defects
approved by Buyer in writing.
4
<PAGE>
As soon as available after closing, Seller shall provide to Buyer a policy
of title insurance pursuant to the preliminary commitment, dated as of the
closing date and insuring Buyer in the amount of the purchase price against loss
or damage by reason of defect in Buyer's title to the Property subject only to
the printed exclusions and general exceptions appearing in the policy form; any
Permitted Exceptions; the exceptions specified in the preliminary commitment
which Buyer has not disapproved of as provided herein; and real property taxes
and assessments that are not delinquent.
9. CONDEMNATION. If the Property is or becomes the subject of a
condemnation proceeding prior to closing which would result in any material
impairment of the Buyer to develop and operate the Property for its intended
use, then Buyer may elect either to (i) terminate this Agreement, in which event
the Deposit and interest shall be returned to Buyer and all rights and
obligations of the parties hereunder shall cease, or (ii) proceed to consummate
and close the purchase of the Property hereunder, in which event the purchase
price for the Property shall be reduced by the total of any awards or other
proceeds received by Seller at or prior to closing with respect to any such
condemnation proceeding; whereupon, at closing, Seller shall assign to Buyer all
rights of Seller in and to any awards or other proceeds payable by reason of any
such condemnation proceeding. Seller agrees to notify Buyer of eminent domain
proceedings within five (5) days after Seller learns thereof.
10. SELLER'S REPRESENTATIONS AND WARRANTIES. In addition to other
representations herein, Seller represents and warrants to Buyer that at the date
of execution hereof and as of the date of closing:
10.1 Seller, and the person signing on behalf of Seller, has full
power and authority to execute this Agreement and perform Seller's obligations
hereunder, and all necessary action to authorize this transaction has been
taken;
10.2 As of closing only, the Property is not subject to any leases,
tenancies or rights of persons in possession;
10.3 To Seller's knowledge, neither the Property nor the sale of the
Property violates any applicable statute, ordinance or regulation, nor any order
of any court or any governmental authority or agency, pertaining to the Property
or the use occupancy or condition thereof;
10.4 Seller is unaware of any material defect in the Property;
10.5 All persons and entities supplying labor, materials and equipment
to the Property have been paid and there are no claims or liens;
10.6 There are no currently due and payable assessments for public
improvements against the Property and Seller is not aware of any local
improvement district or other taxing authority having jurisdiction over the
Property in the process of formation;
10.7 As of closing, the Property has legal access to all streets
adjoining the Property;
10.8 Seller has good and marketable title to the Property;
5
<PAGE>
10.9 Seller is not a "foreign person" for purposes of Section 1445 of
the Internal Revenue Code. Prior to closing, Seller shall execute and deliver to
Closing Agent an affidavit in order to meet the Foreign Investment in Real
Property Tax Act ("FIRPTA") requirements of I.R.C. # 1445; and
10.10 Seller has not received notification of any kind from any agency
suggesting that the Property is or may be targeted for a Superfund or similar
type of cleanup. To the best of Seller's knowledge, neither the Property nor any
portion thereof is or has been used (i) for the storage, disposal or discharge
of oil, solvents, fuel, chemicals or any type of toxic or dangerous or hazardous
waste or substance, (ii) as a landfill or waste disposal site, and (iii) does
not contain any underground storage tanks. Seller agrees to indemnify, defend
and hold Buyer harmless from and against any and all loss, damage, claims,
penalties, liability, suits, costs and expenses (including, without limitation,
reasonable attorneys' fees) and also including without limitation, costs of
remedial action or cleanup, suffered or incurred by Buyer arising out of or
related to any such use of the Property, or portion thereof, occurring prior to
the conveyance to Buyer, about which Seller knew or reasonably should have known
prior to closing and did not disclose to Buyer.
11. BUYER'S AUTHORITY. Buyer represents and warrants to Seller that at
the date of execution hereof and at the date of closing Buyer, and the person
signing on behalf of Buyer, has full power and authority to execute this
Agreement and to perform Buyer's obligations hereunder.
12. DEFAULT; ATTORNEYS' FEES. If the transaction fails to close due to
default by Buyer, Seller's sole and exclusive remedy shall be to terminate this
Agreement and collect and retain any Deposit and interest as liquidated damages.
Seller hereby releases any and all right to specific performance of this
Agreement. In the event of any breach of this Agreement by Seller, the Deposit
and interest shall be returned to Buyer and Buyer shall have all rights and
remedies under applicable law, including the right to specific performance,
provided that under no circumstances shall Seller be liable to Buyer for
punitive damages. In the event of litigation between the parties hereto,
declaratory or otherwise, in connection with or arising out of this Agreement,
the prevailing party shall recover from the non-prevailing party all actual
litigation costs, actual damages and actual expenses, including attorneys' fees,
house counsel fees, paralegals' fees and other professional or consultants' fees
expended or incurred in connection therewith, as set by the court, including for
appeals, which shall be determined and fixed by the court as part of the
judgment.
In establishing the Deposit and interest paid to Escrow Company as
liquidated damages, the parties agree that the amount is a reasonable estimate,
as of the time this Agreement is being executed, of the risks and damages Seller
could suffer as a result of buyer's failure to close this transaction,
including, without limitation, the risk of freezing the purchase price or losing
the opportunity to sell for a higher price, the risk that the market for the
Property could drop substantially, the lost time value of Seller's equity
resulting from any delay in receiving payment of its equity, lost opportunities
for other investments, changes in the availability and cost of financing for
Seller's subsequent investments, and costs that Seller could incur as a result
of the Buyer's default. The foregoing provisions represent the agreement of the
parties as to what the Seller's remedy will be if the Buyer defaults by failing
to close this transaction.
BUYER AND SELLER ACKNOWLEDGE THAT THEY HAVE READ AND SPECIFICALLY
NEGOTIATED THE FOREGOING PROVISIONS AND LIMITATIONS ON REMEDIES AFTER
CONSULTATION WITH LEGAL COUNSEL OF THEIR RESPECTIVE CHOICE.
6
<PAGE>
13. NOTICES. All notices, demands, consents, approvals, and other
communications which are required or desired to be given by either party to the
other hereunder shall be in writing and shall be hand delivered, delivered by
nationally recognized private carrier (such as Federal Express), or sent by
United States registered or certified mail, postage prepaid, return address set
forth below, or to such other address as such party shall have last designated
by notice to the other. Notices, demands, consents, approvals, and other
communications shall be deemed given when delivered or, if mailed, three days
after being deposited in the United States mail, provided, the recipient
actually receives it within three days.
If to Seller:
Opus Northwest, L.L.C.
Attn: John Solberg, Vice President
200 - 112th Avenue N.E., Suite 205
Bellevue, WA 98004
with a copy to each of:
Opus U.S. Corporation
Attn: Legal Department
800 Opus Center
9900 Bren Road East
Minnetonka, MN 55343
and
Tousley Brain PLLC
Attn: Russell F. Tousley, P.S.
56th Floor, Key Tower
700 Fifth Avenue
Seattle, WA 98104-5056
If to Buyer:
Eagle Hardware and Garden, Inc.
Attn: Richard T. Takata, President
981 Powell Avenue SW
Renton, WA 98055
with a copy to:
William N. Moloney
5711 NE Tolo Rd.
Bainbridge Island, WA 98110
Either party may change its address for purposes of notices to an address which
is not a post office box, by giving notice to the other in the manner herein
prescribed.
Either party hereto may, by proper notice to the other, designate any other
address, which is not a post office box, for the giving of notice. Any notice
shall be effective when personally delivered or, if mailed as provided herein,
on the date of actual receipt.
7
<PAGE>
14. SATURDAYS, SUNDAYS AND HOLIDAYS. If any payment or any delivery of
any document is required pursuant to any term of this Agreement to be made on a
day which falls on a Saturday, Sunday or legal holiday in the State of Oregon,
or if the expiration of a period of time within which a party has the right to
give notice hereunder falls on a Saturday, Sunday or legal holiday in the State
of Oregon or the State of Washington, such payment, delivery or notice shall be
sufficiently and validly made or given if done so on the first business day
following such Saturday, Sunday or legal holiday.
15. ASSIGNMENT. Buyer may assign its rights hereunder to any person or
entity provided that an Eagle Hardware & Garden store is constructed and
operated on the site. An assignment for any other use shall require Seller's
consent which shall not be unreasonably withheld. No assignment, however, shall
release Buyer from any of its obligations under this Agreement or any agreement
arising out of or in connection with this Agreement, including, without
limitation, agreements arising out of Section 4.3 or Section 6 of this
Agreement.
16. NO NEGOTIATIONS WITH THIRD PARTY. Seller shall not negotiate nor
commit to sell, lease or otherwise transfer the Property or any portion thereof
to any other person or party as long as Buyer is proceeding in good faith to
perform its duties under this Agreement. This covenant shall remain in full
force and be legally binding upon Seller until termination of this Agreement.
17. GENERAL. This is the entire agreement of Buyer and Seller with
respect to the matters covered hereby and supersedes all prior agreements
between them, written or oral. This Agreement may be modified only in writing,
signed by Buyer and Seller. Any waivers hereunder must be in writing. No waive
of any right or remedy in the event of default hereunder shall constitute a
waiver of such right or remedy in the event of any subsequent default. This
Agreement is for the benefit only of the parties hereto and shall inure to the
benefit of and bind the heirs, personal representatives, successors and assigns
of the parties hereto. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision hereof.
18. SURVIVAL OF WARRANTIES. The terms, covenants, representations and
warranties shall not merge in the deed of conveyance, but shall survive closing.
19. COMMISSIONS. All real estate commissions and/or brokers' fees shall
be payable by Seller at closing to Wahl & Associates, Inc. (the "Broker"). Such
commission and/or fee shall be agreed upon in a separate agreement between
Seller and Broker. Each party represents to the other that it has engaged no
other broker in connection with the negotiations leading to this Agreement.
Seller agrees to indemnify and hold Buyer harmless from and against all claims
and demands of any and all brokers or agents with respect to the Property.
20. EXHIBITS. Exhibits A and B attached hereto are incorporated herein as
if fully set forth.
Exhibit A - Site Plan
Exhibit B - Legal Description
21. EFFECTIVE DATE. The later of the Buyer's signature date and the
Seller's signature date, set forth below, shall be the "Effective Date" of this
Agreement.
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<PAGE>
22. OREGON LAW.
22.1. ORS 93.0401. THIS INSTRUMENT WILL NOT ALLOW USE OF THE
PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE LAWS
AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON
ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR
COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED USES AND TO DETERMINE ANY LIMITS
ON LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN ORS 30.930.
22.2 ZONING. THE PROPERTY DESCRIBED IN THIS INSTRUMENT MAY NOT
BE WITHIN A FIRE PROTECTION DISTRICT PROTECTING STRUCTURES. THE PROPERTY IS
SUBJECT TO LAND USE LAWS AND REGULATIONS, WHICH IN FARM OR FOREST ZONES, MAY NOT
AUTHORIZE CONSTRUCTION OR SITING OF A RESIDENCE. BEFORE SIGNING OR ACCEPTING
THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK
WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED USES
AND EXISTENCE OF FIRE PROTECTION FOR STRUCTURES.
BUYER: EAGLE HARDWARE & GARDEN, INC.
By: /s/ Paul B. Morris
--------------------------------
Typed name: Paul B. Morris
June 24 , 1997 It's: Vice President
- ---------------------------
Buyer's signature date
Address:
981 Powell Avenue S.W.
Renton, WA 98055
SELLER: OPUS NORTHWEST LLC
By: /s/ John Solberg
--------------------------------
Typed name: John Solberg
June 23 , 1997 It's: Vice President
- ----------------------------
Seller's signature date
Address:
200 - 112th Avenue N.E.
Suite 205
Bellevue, WA 98004
9
<PAGE>
EXHIBIT "A"
[SITE PLAN]
<PAGE>
EXHIBIT B
LEGAL DESCRIPTION OF SELLER'S ENTIRE PARCEL
TO BE ATTACHED BY SELLER
The legal description of the Eagle Parcel, per Section 5, SEPARATE LEGAL
PARCEL, shall replace, supersede and be substituted for the legal description
of Seller's entire parcel, per Section 3.2, ALTA/ACSM SURVEY.
EXHIBIT "B"
11
<PAGE>
Loan No. C-332059
PROMISSORY NOTE
$10,000,000.00 Seattle, Washington June 30, 1997
For value received, the undersigned, herein called "Borrower," promises to
pay to the order of THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, a Wisconsin
corporation, who, together with any subsequent holder of this note, is
hereinafter referred to as "Lender", at 720 E. Wisconsin Avenue, Milwaukee, WI
53202 or at such other place as Lender shall designate in writing, in coin or
currency which, at the time or times of payment, is legal tender for public and
private debts in the United States, the principal sum of Ten Million And No/100
Dollars ($10,000,000.00) OR so much thereof as shall have been advanced from
time to time plus interest on the outstanding principal balance at the rate and
payable as follows:
Interest shall accrue from the date of advance until maturity at the rate
of seven and ninety-four one-hundredths percent (7.94%) per annum (the "Interest
Rate").
Accrued interest only on the amount advanced shall be paid on the first day
of the month following the date on which the initial advance is made
("Amortization Period Commencement Date"). On the first day of the following
month (the "Initial Amortization Date") and on the first day of each and every
month thereafter, installments of principal and interest shall be paid in an
amount equal to the unpaid principal balance on the Initial Amortization Date
multiplied by 0.012101079.
After each additional advance, the monthly payment shall be increased to an
amount which is sufficient to amortize the unpaid principal balance at the
interest rate set forth herein during the then remaining portion of a period of
ten years commencing with the Amortization Period Commencement Date.
All installments shall be applied first in payment of interest, calculated
monthly on the unpaid principal balance, and the remainder of each installment
shall be applied in payment of principal. The entire unpaid principal balance
plus accrued interest thereon shall be due and payable on July 1, 2007 (the
"Maturity Date").
Borrower shall have the right, upon thirty (30) days advance written
notice, beginning June 1, 2002 of paying this note in full with a prepayment
fee. This fee represents consideration to Lender for loss of yield and
reinvestment costs. The fee shall be the greater of Yield Maintenance or 1.0% of
the outstanding principal balance of this note.
As used herein, "Yield Maintenance" means the amount, if any, by which
(i) the present value of the Then Remaining Payments (as hereinafter
defined) calculated using a periodic discount rate (corresponding to the payment
frequency under this note) which, when compounded for such number of payment
periods in a year, equals the per annum effective yield of the Most Recently
Auctioned United States Treasury Obligation having a
<PAGE>
maturity date equal to the Maturity Date (or, if there is no such equal maturity
date, then the linearly interpolated per annum effective yield of the two Most
Recently Auctioned United States Treasury Obligations having maturity dates most
nearly equivalent to the Maturity Date) as reported by THE WALL STREET JOURNAL
five business days prior to the date of prepayment, exceeds
(ii) the outstanding principal balance of this note (exclusive of all
accrued interest).
If such United States Treasury obligation yields shall not be reported as
of such time or the yields reported as of such time shall not be ascertainable,
then the periodic discount rate shall be equal to the Treasury Constant maturity
series yields reported, for the latest day for which such yields shall have been
so reported, as of five business days preceding the prepayment date, in Federal
Reserve Statistical Release H.15 (519) (or any comparable successor publication)
for actively traded United States Treasury obligations having a constant
maturity most nearly equivalent to the Maturity Date.
As used herein, "Then Remaining Payments" means payments in such amounts
and at such times as would have been payable subsequent to the date of such
prepayment in accordance with the terms of this note.
As used herein, "Most Recently Auctioned United States Treasury
Obligations" means the U. S. Treasury bonds, notes and bills with maturities of
30 years, 10 years, 5 years, 3 years, 2 years and 1 year which, as of the date
the prepayment fee is calculated, were most recently auctioned by the United
States Treasury.
Upon the occurrence of an Event of Default (as defined in the Lien
Instrument) followed by the acceleration of the whole indebtedness evidenced by
this note, or a condemnation or sale under threat of condemnation of all or
substantially all of the Property, the payment of such indebtedness will
constitute an evasion of the prepayment terms hereunder and be deemed to be a
voluntary prepayment hereof and such payment will, therefore, to the extent not
prohibited by law, include the prepayment fee required under the prepayment in
full privilege recited above or, if such prepayment occurs prior to June 1, 2002
and results from an Event of Default followed by an acceleration of the whole
indebtedness, then such payment will, to the extent not prohibited by law,
include a prepayment fee equal to the greater of Yield Maintenance or 6% of the
outstanding principal balance of this note. If such prepayment occurs prior to
June 1, 2002 and results from a condemnation or sale under threat of
condemnation of all or substantially all of the Property, the prepayment fee
shall be the greater of Yield Maintenance or 2% of the outstanding principal
balance of this note.
Notwithstanding the above and provided Borrower is not in default under any
provision contained in the Loan Documents (as defined in the Lien Instrument),
this note may be prepaid in full at any time, without a prepayment fee, during
the last 60 days of the term of this note.
This note is secured by certain property (the "Property") in the City of
Seattle, County of King, State of Washington, described in a Deed of Trust and
Security Agreement (the "Lien Instrument") of even date herewith executed by
Borrower to Washington Administrative Services, Inc., as Trustee for The
Northwestern Mutual Life Insurance Company.
-2-
<PAGE>
Upon the occurrence of an Event of Default (as defined in the Lien
Instrument), the whole unpaid principal hereof and accrued interest shall, at
the option of Lender, to be exercised at any time thereafter, become due and
payable at once without notice, notice of the exercise of, and the intent to
exercise, such option being hereby expressly waived.
All parties at any time liable, whether primarily or secondarily, for
payment of indebtedness evidenced hereby, for themselves, their heirs, legal
representatives, successors and assigns, respectively, expressly waive
presentment for payment, notice of dishonor, protest, notice of protest, and
diligence in collection; consent to the extension by Lender of the time of said
payments or any part thereof; further consent that the real or collateral
security or any part thereof may be released by Lender, without in any way
modifying, altering, releasing, affecting, or limiting their respective
liability or the lien of the Lien Instrument; and agree to pay reasonable
attorneys' fees and expenses of collection in case this note is placed in the
hands of an attorney for collection or suit is brought hereon and any attorneys'
fees and expenses incurred by Lender to enforce or preserve its rights under any
of the Loan Documents in any bankruptcy or insolvency proceeding.
Any principal, interest or other amounts payable under any of the Loan
Documents (as defined in the Lien Instrument), not paid when due (without regard
to any notice and/or cure provisions contained in any of the Loan Documents),
including principal becoming due by reason of acceleration by Lender of the
entire unpaid balance of this note, shall bear interest from the due date
thereof until paid at the Default Rate. As used herein, "Default Rate" means the
lower of a rate equal to the interest rate in effect at the time of the default
as herein provided plus 5% per annum or the maximum rate permitted by law.
No provision of this note shall require the payment or permit the
collection of interest, including any fees paid which are construed under
applicable law to be interest, in excess of the maximum permitted by law. If any
such excess interest is collected or herein provided for, or shall be
adjudicated to have been collected or be so provided for herein, the provisions
of this paragraph shall govern, and Borrower shall not be obligated to pay the
amount of such interest to the extent that it is in excess of the amount
permitted by law. Any such excess collected shall, at the option of Lender,
unless otherwise required by applicable law, be immediately refunded to Borrower
or credited on the principal of this note immediately upon Lender's awareness of
the collection of such excess.
This note shall be governed by and construed in accordance with the laws of
Washington.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, MODIFY
LOAN TERMS, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE
UNDER WASHINGTON LAW.
-3-
<PAGE>
IN WITNESS WHEREOF, this note has been executed by the undersigned as of the day
and year first above written.
EAGLE HARDWARE & GARDEN, INC.,
a Washington corporation
By /s/Ronald (ILLEGIBLE)
---------------------------------
------------------------------
Its EVP/CFO
--------------------------
-4-
<PAGE>
REAL ESTATE PURCHASE AND SALE AGREEMENT
This agreement (the "Agreement") dated August 4, 1997 by and between
JOHNSON PROPERTIES, INC., a Washington corporation ("Seller") and EAGLE HARDWARE
& GARDEN, INC., a Washington corporation or assigns ("Buyer") for purchase and
sale of that certain real property consisting of approximately 15.4 acres of
unimproved real property located in the southeast quadrant of the Smokey Point
Interchange (Interchange No. 206) on I-5 at 172nd Street N.E., in Snohomish
County, Washington, the legal description of which is described on Exhibit "A"
and any improvements thereon and all rights appurtenant thereto (the
"Property"). The Property is identified as Tax Parcel #4828-000-009-0003 and
Tax Parcel #4828-000-010-0000 shown on the reduced partial copy of an assessor's
map which is attached hereto as Exhibit "B.
Seller agrees to sell, and Buyer agrees to buy, the Property upon and
subject to the terms and conditions set forth below:
1. PURCHASE PRICE; PAYMENT. The total purchase price for the Property
shall be five dollars and seventy-five cents ($5.75) per square foot. It is
estimated that the Property contains 670,824 square feet and that the purchase
price will be Three Million Eight Hundred Fifty-seven Thousand Two Hundred
Thirty-eight Dollars ($3,857,238). The area of the Property and the total
purchase price shall be determined by a current ALTA/ACSM survey to be provided
by Buyer. The purchase price shall be adjusted to the final certified square
footage, which amount, including the Deposit and interest accrued thereon, shall
be paid in cash upon closing.
2. EARNEST MONEY DEPOSIT. Within ten (10) business days after the
Effective Date, Buyer will deposit earnest money of fifty thousand dollars
($50,000) (the "Deposit") with First American Title Insurance Company in
Everett, Washington (the "Closing Agent"). The Closing Agent shall place the
Deposit in an interest-bearing account, with interest to accrue to Buyer's
benefit. if this transaction does not close for any reason other than default
by Buyer under this Agreement, the Deposit, and all interest accrued thereon,
shall be returned to Buyer. In the event of Buyer's default under this
Agreement, Seller shall have as its sole remedy the right to terminate this
Agreement and retain the Deposit, together with accrued interest thereon, as
liquidated damages.
3. TITLE INSURANCE AND SURVEY.
3.1 PRELIMINARY TITLE INSURANCE COMMITMENT. Within fifteen (15) days
after the Effective Date, Seller shall provide Buyer with a current preliminary
commitment for owner's title insurance with extended coverage (ALTA Form 1970-B,
as revised in 1984, or if unavailable, Form B-1987) issued by First American
Title Insurance Company, with copies of all documents listed as exceptions set
forth therein.
3.2 ALTA/ACSM SURVEY. As soon as possible after the Effective Date,
Buyer shall obtain a current ALTA/ACSM survey with land area certification of
the Property. The survey costs shall be borne by Buyer regardless of whether
this transaction closes.
1
<PAGE>
3.3 TITLE AND SURVEY APPROVAL PERIODS. Buyer shall have fifteen (15)
days from the later receipt of either the preliminary title insurance commitment
or the ALTA/ACSM survey (and any amendments, supplements and revisions to either
in which new or revised exceptions or items first appear) to notify Seller of
its disapproval of any exceptions shown in the preliminary title insurance
commitment or any items shown on the survey. If, within twenty (20) days after
the receipt of such notice Seller has not removed or given reasonable written
assurances to Buyer that such disapproved title report exceptions will be
removed or such disapproved survey items will be resolved and/or corrected on
or before closing, Buyer may, at its option, at any time prior to such
removal, resolution and/or correction or receipt of such reasonable written
assurances, terminate this Agreement by giving notice of such termination to
Seller. On such termination Closing Agent shall refund the Deposit and all
interest accrued thereon to Buyer and all rights and obligations of Seller
and Buyer under this Agreement shall terminate and be of no further force or
effect.
4. CONTINGENCIES. Buyer's obligation to purchase the Property is subject
to Buyer's satisfaction or waiver, in writing, of the following conditions
precedent, in Buyer's sole and absolute discretion, on or before the dates
described below,
4.1 FEASIBILITY. Buyer's sole determination that its proposed site
plan, building plan, parking plan and access plan for the Property are
acceptable; that utilities are available of adequate capacity to serve the
Property; and that the Property is otherwise feasible for its intended use.
4.2 STUDIES. Buyer's approval of all soils, engineering, seismic,
environmental, topography, hazardous waste, geotechnical, wetlands, drainage and
other studies that may be deemed necessary by Buyer or required by and
governmental agency in connection with the Property and Buyer's planned
development and use of the Property. All such studies, reports or other data
shall be acquired at Buyer's expense.
4.3 APPROVAL AND PERMITS. Issuance of any and all required or
applicable governmental approvals including but not limited to the following: a
PUD (if required), replat of the Property, lot line adjustments, subdivision
approvals, rezoning approvals, Washington Department of Transportation highway
access and traffic signal approvals, building permits, use permits, sign
permits, design review approvals, site plan approvals, parking variances, street
vacancies and approval of any kind from any and all governmental agencies
having jurisdiction over the Property, necessary for Buyer to develop, construct
its site improvements, store building, drive through building materials yard,
garden yard and greenhouse and any other improvements that Buyer deems necessary
in its sole determination to conduct and operate its selected business
operations on the Property. The timing, conditions and cost of any or all of
the permits and approvals (including any mitigation fees) must be satisfactory
to Buyer in its sole discretion. All approvals and permits shall be at Buyer's
expense.
4.4 TIME PERIODS. Buyer shall have forty-five (45) days from the
Effective Date (the "Feasibility Period") to satisfy or waive the contingencies
set forth in Sections 4.1 and 4.2 (the "Feasibility Period"). Buyer shall have
one hundred eighty (180) days (the "Contingency Period") from the Effective Date
to satisfy or waive the contingencies set forth in Section 4.3. If Buyer does
not satisfy or waive the contingencies in writing by the applicable dates, or
if Buyer notifies Seller in writing at any time prior to the end of the
Contingency Period that it has decided not to pursue the project any further and
that this Agreement is terminated, the Deposit, with interest, shall be refunded
to Buyer and the Agreement shall terminate without further action and be of no
further force or effect.
2
<PAGE>
4.5 EXTENSION PERIODS. If Buyer has satisfied or waived the
contingencies set forth in Sections 4.1 and 4.2 and is diligently pursuing the
applicable required approvals and permits set forth in Section 4.3, Buyer shall
be allowed two (2) separate thirty (30) day extensions of the Contingency
Period. Notice of the exercising of each of the extension periods shall be
given at least ten (10) days prior to the end of the Contingency Period or
extension period. Buyer shall pay a non-refundable (but applicable to the
purchase price if the sale closes) extension fee (the "Extension Fee") of
$38,572.00 for each thirty (30) day extension period. Buyer shall deposit each
Extension Fee into escrow at the time each extension period is exercised.
5. CLOSING.
5.1 TIME FOR CLOSING; TERMINATION DATE. This sale shall be closed in
the office of the Closing Agent within five (5) working days after all of
Buyer's conditions precedent have been satisfied or waived by Buyer on a date
selected by Buyer and agreeable to Seller. Buyer and Seller shall deposit in
escrow with Closing Agent within 24 hours of the Closing date all instruments,
documents and monies necessary to complete the sale in accordance with this
Agreement. As used herein, "closing" or "date of closing" means the date on
which all appropriate documents are recorded and proceeds of sale are available
for disbursement to Seller. Funds held in reserve accounts pursuant to escrow
instructions shall be deemed, for purposes of this definition, as available for
disbursement to Seller.
5.2 ACCEPTANCE OF EXCEPTIONS. Neither Seller nor Buyer shall be
required to close, and the Deposit and all interest thereon shall be returned to
Buyer, if any exception or item disapproved by Buyer as herein provided cannot
be removed by the date of closing; provided, however, that Buyer may elect to
waive in writing any disapproved exceptions or items and close on the remaining
terms. Notwithstanding the foregoing, Seller shall remove any defect or
encumbrance attaching by, through or under Seller after the Effective Date of
this Agreement. Exceptions to be discharged by Seller may be paid out of the
purchase price at closing.
5.3 PRORATIONS; CLOSING COSTS. Taxes and assessments for the current
year and utilities constituting liens shall be prorated as of the date of
Closing. Seller and Buyer acknowledge that an assessment of $211,352.64 for
Road Improvement District (RID) 24A has been made against the Property. The
first installment on the RID is due in February 1998. Seller shall pay the
first installment of the RID due in February 1998. If the Closing occurs before
the first installment is due, Seller shall be responsible for and pay the
installment at the time of Closing. Seller and Buyer agree that Buyer shall be
responsible for the balance of the RID 24A assessment and all annual payments or
installments due after the Closing date. Seller shall pay the premium for the
standard owner's title insurance policy, real estate excise, transfer and/or
conveyance taxes, the cost of conveyance tax stamps, if any, and one-half of
Closing Agent's escrow fee. Buyer shall pay the cost of recording the statutory
warranty deed, the cost of the ALTA/ACSM survey, one-half of Closing Agent's
escrow fee and the difference in the cost of the premium between standard
owner's and extended coverage.
5.4 POSSESSION. BUYER SHALL BE ENTITLED TO POSSESSION UPON CLOSING.
6. CONVEYANCE OF TITLE. On closing, Seller shall execute and deliver to
Buyer a statutory warranty deed conveying good and marketable title to the
Property free and clear of any defects or encumbrances except for the lien of
real estate taxes for the current calendar year not yet due and payable, those
defects or encumbrances appearing on the preliminary commitment for title
insurance that are approved by Buyer (the "Permitted Exceptions"), and other
encumbrances or defects approved by Buyer in writing.
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As soon as available after closing, Seller shall direct the title
company to provide to Buyer a policy of title insurance pursuant to the
preliminary commitment, dated as of the closing date and insuring Buyer in the
amount of the purchase price against loss or damage by reason of defect in
Buyer's title to the Property subject only to the printed exclusions and general
exceptions appearing in the policy form: any Permitted Exceptions; the
exceptions specified in the preliminary commitment which Buyer has not
disapproved of as provided herein; and real property taxes and assessments that
are not delinquent.
7. RISK OF LOSS; CONDEMNATION. Risk of loss of or damage to the Property
shall be borne by Seller until the date of closing. Thereafter, Buyer shall
bear the risk of loss. In the event of material loss of or damage to the
Property prior to the date upon which Buyer assumes the risk, Buyer may
terminate this Agreement by giving notice of such termination to Seller and
Closing Agent, and such termination shall be effective and the Deposit and
interest thereon shall be refunded ten (10) days thereafter; provided, however,
that such termination shall not be effective if Seller agrees in writing within
such ten (10) day period to restore the Property substantially to its present
condition by the closing date.
If the Property is or becomes the subject of a condemnation proceeding
prior to closing, Buyer may, at its option, terminate this Agreement by giving
notice of such termination to Seller, and upon such termination the Deposit and
accrued interest shall be returned to Buyer and this Agreement shall be of no
further force or effect: provided, however, that Buyer may elect to purchase the
Property, in which case the total purchase price shall be reduced by the total
of any condemnation award received by Seller. On closing, Seller shall assign
to Buyer all of Seller's rights in and to any future condemnation awards or
other proceeds payable or to become payable by reason of any taking. Seller
agrees to notify Buyer of eminent domain proceedings within five (5) days after
Seller learns thereof.
8. SELLER'S REPRESENTATIONS AND WARRANTIES. In addition to other
representations herein, Seller represents and warrants to Buyer as of the date
of closing that:
8.1 Seller, and the person signing on behalf of Seller, has full
power and authority to execute this Agreement and perform Seller's obligations
and duties hereunder, and all necessary corporate action to authorize this
transaction has been taken;
8.2 The Property is not subject to any leases, tenancies or rights of
persons in possession;
8.3 To the best of Sellers knowledge, neither the Property nor the
sale of the Property violates any applicable statute, ordinance or regulation,
nor any order of any court or any governmental authority or agency, pertaining
to the Property or the use occupancy or condition thereof;
8.4 All persons and entities supplying labor, materials and equipment
to the Property have been paid and there are no claims or liens;
8.5 Except as previously disclosed to Buyer as to Road Improvement
District 24A, there are no currently due and payable assessments for public
improvements against the Property and Seller is not aware of any local
improvement district or other taxing authority having jurisdiction over the
Property in the process of formation:
8.6 The Property has legal access to all streets adjoining the
Property;
8.7 Seller has good and marketable title to the Property;
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8.8 Seller is not a "foreign person" for purposes of Section 1445 of
the Internal Revenue Code. Prior to closing, Seller shall execute and deliver
to Closing Agent an affidavit in order to meet the Foreign Investment in Real
Property Tax Act ("FIRPTA") requirements of I.R.C. # 1445; and
8.9 Seller has not received notification of any kind from any agency
suggesting that the Property is or may be targeted for a Superfund or similar
type of cleanup. To the best of Seller's knowledge, neither the Property nor
any portion thereof is or has been used (i) for the storage, disposal or
discharge of oil, solvents, fuel, chemicals or any type of toxic or dangerous or
hazardous waste or substance, (ii) as a landfill or waste disposal site, and
(iii) does not contain any underground storage tanks.
9. BUYER'S AUTHORITY AND REPRESENTATIONS. Buyer represents and warrants
to Seller that:
9.1 At the date of execution hereof and at the date of closing
Buyer, and the person signing on behalf of Buyer, has full power and
authority to execute this Agreement and to perform Buyer's obligations
hereunder.
9.2 Buyer has adequate funds to acquire the Property.
9.3 Buyer shall diligently pursue during the Contingency Period all
approvals and permits Buyer determines to be necessary pursuant to Section 4.3
above subject to Buyer's right not to pursue the project any further in
accordance with Section 4.4 above.
10. DEFAULT. If Seller defaults hereunder, Buyer may seek specific
performance of this Agreement, damages or rescission and Buyer shall be entitled
to return of the Deposit with accrued interest, on demand. If Buyer defaults,
the Deposit and accrued interest shall be forfeited to Seller as liquidated
damages and as Seller's sole and exclusive remedy and upon payment thereof to
Seller, Buyer shall have no further obligations or liability hereunder. In any
suit, action or appeal therefrom to enforce this Agreement or any term or
provision hereof, or to interpret this Agreement, the prevailing party shall be
entitled to recover its costs incurred therein, including reasonable attorneys'
fees.
11. NOTICES. All notices, waivers, elections, approvals and demands
required or permitted to be given hereunder shall be in writing and shall be
personally delivered (by overnight courier service or other means of personal
service) or sent by United States certified mail, return receipt requested, to
the addressee's mailing address set forth on the signature page:
and, in the case of Buyer, a copy to: William N. Moloney
5711 NE Tolo Rd.
Bainbridge Island, WA 98110
and, in the case of Seller, a copy to: H. Lane Johnson
JOHNSON PROPERTIES
1207 N. Shore Drive
Camano Island, WA 98290
Campbell Mathewson
CENTURY PACIFIC
2250 Century Square
1501 Fourth Avenue
Seattle, WA 98101
(206) 689-7203
fax (206) 689-7210
Either party hereto may, by proper notice to the other, designate any other
address for the giving of notice. Any notice shall be effective when personally
delivered or, if mailed as provided herein, on the date of actual receipt.
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<PAGE>
12. NO NEGOTIATIONS WITH THIRD PARTY. Seller shall not negotiate nor
commit to sell, lease or otherwise transfer the Property of any portion thereof
to any other person or party as long as Buyer is proceeding in good faith to
perform its duties under this Agreement. This covenant shall remain in full
force and effect and be legally binding upon Seller until termination of this
Agreement.
13. GENERAL. This is the entire agreement of Buyer and Seller with
respect to the matters covered hereby and supersedes all prior agreements
between them, written or oral. This Agreement may be modified only in writing,
signed by Buyer and Seller. Any waivers hereunder must be in writing. No waive
of any right or remedy in the event of default hereunder shall constitute a
waiver of such right or remedy in the event of any subsequent default. This
Agreement is for the benefit only of the parties hereto and shall inure to the
benefit of and bind the heirs, personal representatives, successors and assigns
of the parties hereto. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any
other provision hereof.
14. SURVIVAL OF WARRANTIES. The terms, covenants, representations and
warranties shall not merge in the deed of conveyance, but shall survive closing.
15. COMMISSIONS. All real estate commissions and/or brokers' fees shall
be payable by Seller at closing to Century Pacific, L.P. (the "Broker"). Such
commission and/or fee shall be agreed upon in a separate agreement between
Seller and Broker. Each party represents to the other that it has engaged no
other broker in connection with the negotiations leading to this Agreement.
Seller agrees to indemnify and hold Buyer harmless from and against all claims
and demands of any and all brokers or agents with respect to the Property.
Buyer agrees to indemnify and hold Seller harmless from and against all claims
and demands of any and all brokers or agents with respect to the Property,
except the Broker.
16. EXHIBITS. Exhibits "A" and "B" are attached hereto and incorporated
herein as if fully set forth.
Exhibit "A" - Legal Description
Exhibit "B" - Assessor's Tax Map
17. EFFECTIVE DATE. The later of the Buyer's signature date and the
Seller's signature date, set forth below, shall be the "Effective Date" of this
Agreement.
BUYER: EAGLE HARDWARE & GARDEN, INC.
By: /s/ Paul B. Morris
--------------------------
Typed name: Paul B. Morris
August 1, 1997, 1997 Its: Vice President
- --------------------------
Buyer's signature date
Address: 981 Powell Avenue S.W.
Renton, WA 98055
SELLER: JOHNSON PROPERTIES, INC.
By: /s/ H. Lane Johnson
--------------------------
Typed name: H. Lane Johnson
August 4, 1997, 1997 Its: President
- --------------------------
Seller's signature date
Address: 1207 N. Shore Drive
Camano Island, WA 98292
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EXHIBIT "A"
LEGAL DESCRIPTION OF THE PROPERTY
(To be inserted by Buyer upon completion of the ALTA/ACSM Class A survey
as set forth in Section 6).
EXHIBIT "A"
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EXHIBIT "B"
[Map]
<PAGE>
REAL ESTATE PURCHASE AND SALE AGREEMENT
This agreement (the "Agreement") is dated AUGUST 11, 1997 and entered into
by and between ALEX MADONNA and PHYLLIS MADONNA, husband and wife ("Seller") and
EAGLE HARDWARE & GARDEN, INC., a Washington corporation, or assigns ("Buyer")
for purchase and sale of a portion of a larger tract of real property situate in
San Luis Obispo County, California, consisting of approximately 15.11 acres of
unimproved real property located on the westerly side of Los Osos Valley Road
commencing approximately 204 feet north of the Froom Ranch access road and
generally located between Garcia Drive to the north and Auto Park Way to the
south, both on the easterly side of Los Osos Valley Road, together with any
improvements thereon and all rights appurtenant thereto (the "Property"). The
Property is shown on the proposed site plan dated August 1, 1997 and numbered
X489D (the "Site Plan") and attached hereto as Exhibit A. The legal description
of Seller's entire tract is set forth in Exhibit B attached hereto. Following
completion of the ALTA/ACSM survey and parcel map described in Section 3.2
below, the legal description and parcel map of the Property shall be attached to
this Agreement as Exhibit C and made a part hereof.
Seller agrees to sell, and Buyer agrees to buy, the Property upon and
subject to the terms and conditions set forth below:
1. PURCHASE PRICE; PAYMENT. The total purchase price for the Property
shall be nine dollars ($9.00) per square foot of land. It is estimated that the
Property contains 658,280 square feet and that the purchase price will be Five
Million Nine Hundred Twenty-four Thousand Five Hundred Twenty Dollars
($5,924,520). The area of Property and the total purchase price shall be
determined by the new ALTA/ACSM survey described below. The purchase price
shall be adjusted to the final certified square footage, which amount, including
the Deposit and interest accrued thereon, shall be paid in cash upon closing.
2. EARNEST MONEY DEPOSIT. Within ten (10) business days after the
Effective Date, Buyer will deposit earnest money of fifty thousand dollars
($50,000) (the "Deposit") with a title insurance company selected by Seller and
located in San Luis Obispo (the "Closing Agent"). The Closing Agent shall place
the Deposit in an interest-bearing account, with interest to accrue to Buyer's
benefit. If this transaction does not close for any reason other than default
by Buyer under this Agreement, the Deposit, and all interest accrued thereon,
shall be returned to Buyer. In the event of Buyer's default under this
Agreement, Seller shall have as its sole remedy the right to terminate this
Agreement and retain the Deposit, together with accrued interest thereon, as
liquidated damages.
3. TITLE INSURANCE AND SURVEY.
3.1 PRELIMINARY TITLE INSURANCE COMMITMENT. Within ten (10) days
after the Effective Date, Seller shall provide Buyer with a current preliminary
commitment for owner's title insurance with extended coverage (ALTA Form 1970-B,
as revised in 1984 or if unavailable, Form B-1987) issued by the Closing Agent,
with copies of all documents listed as exceptions set forth therein.
3.2 ALTA/ACSM SURVEY. As soon as possible after the Effective Date,
Buyer shall initiate a new ALTA/ACSM survey with land area certification of the
Property and a parcel map, at Buyer's cost.
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3.3 TITLE AND SURVEY APPROVAL PERIODS. Buyer shall have fifteen (15)
days from the later receipt of either the preliminary commitment or the
completed survey (and any amendments, supplements and revisions to either in
which new or revised exceptions or items first appear) to notify Seller of
its disapproval of any exceptions shown in the preliminary commitment or any
items on the survey. If, within twenty (20) days after the receipt of such
notice Seller has not removed or given reasonable written assurances to Buyer
that such disapproved exceptions or items will be removed on or before
closing, Buyer may, at its option, at any time prior to such removal or
receipt of such reasonable written assurances, terminate this Agreement by
giving notice of such termination to Seller. On such termination Closing
Agent shall refund the Deposit and all interest accrued thereon to Buyer and
all rights and obligations of Seller and Buyer under this Agreement shall
terminate and be of no further force or effect.
4. CONTINGENCIES. Buyer's obligation to purchase the Property is subject
to Buyer's satisfaction or waiver, in writing, of the following conditions
precedent, in Buyer's sole and absolute discretion, on or before the dates
described below:
4.1 FEASIBILITY. Buyer's sole determination that its proposed site
plan, building plan, parking plan and access plan for the Property are
acceptable; that approved sources for utilities are available of adequate
capacity to serve the Property; and that the Property is otherwise feasible for
Buyer's intended use.
4.2 STUDIES. Buyer's approval of all soils, engineering, seismic,
environmental, topography, hazardous waste, geotechnical, wetlands, drainage and
other studies that may be deemed necessary by Buyer or required by any
governmental agency in connection with the Property and Buyer's planned
development and use of the Property.
4.3 APPROVALS AND PERMITS. Issuance of any and all required or
applicable governmental approvals including but not limited to an environmental
impact report (EIR)(if required) and replat or lot line adjustment of the
Property, subdivision approvals, rezoning approvals, annexations (if
applicable), California Department of Transportation approvals (if
applicable), County highway access and traffic signal approvals, County, (or
the City, if applicable) building permits, use permits, sign permits, design
review approvals, site plan approvals, parking variances, street vacancies,
environmental certifications, and approvals of any kind from any and all
governmental agencies having jurisdiction over the Property, necessary for
Buyer to develop, construct its store building, site improvements, building
materials center, garden yard and greenhouse and any other improvements that
Buyer deems necessary in its sole determination to conduct and operate its
selected business operations on the Property. The timing, conditions and cost
of any or all of the permits and approvals (including any mitigation fees)
must be satisfactory to Buyer in its sole discretion. The cost and fees of
all of the above shall be at Buyer's sole expense but Seller agrees to
cooperate fully in creating a separate legal parcel containing only the
Property (the "Eagle Parcel") prior to closing, or sooner, if needed, to
enable Buyer to expeditiously comply and proceed with the requirements of any
governmental authority to obtain any and all permits and approvals.
4.4 TIME PERIODS. Buyer shall have sixty (60) days from the Effective
Date (the "Feasibility Period") to satisfy or waive the contingencies set forth
in Sections 4.1 and 4.2. Buyer shall have one hundred eighty (180) days (the
"Contingency Period") from the end of the Feasibility Period to satisfy or waive
the contingencies set forth in Sections 4.3 and 4.6. If Buyer does not satisfy
or waive the contingencies in writing by the applicable dates, or if Buyer
notifies Seller in writing at any time prior to the end of the Contingency
Period that it has decided not to pursue the project any further and that this
Agreement is terminated, the Deposit, with interest, shall be refunded to Buyer
and the Agreement shall terminate without further action and be of no further
force or effect.
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4.5 EXTENSION PERIODS. If Buyer has satisfied or waived the
contingencies set forth in Sections 4.1 and 4.2 above and is diligently pursuing
the applicable required approvals and permits described in Section 4.3 above,
Buyer shall be entitled to two (2) separate thirty (30) day extensions of the
Contingency Period. Notice of the exercise of each of the extension periods
shall be given by Buyer to Seller at least ten (10) days prior to the end of the
initial Contingency Period or the first extension period, whichever is
applicable.
4.6 ENVIRONMENTALLY CLEAN SITE. Buyer's sole determination that it
will be able to acquire an environmentally clean site with the Property.
Although it will be Buyer's responsibility, at its own cost and expense, to
obtain certifications and other approvals by and from the applicable local,
state and federal agencies that the Property is an environmentally clean site,
including but not limited to the removal of all underground storage tanks,
pipelines, all contaminated soils and any other toxic or contaminated materials,
wastes and other related items. Buyer shall have no duty to incur any such
responsibility or costs and expenses unless it decides to waive all of the other
contingencies in this Agreement and acquires the Property at closing.
5. CLOSING
5.1 TIME FOR CLOSING; TERMINATION DATE. This sale shall be closed in
the office of the Closing Agent within fifteen (15) working days after all of
Buyer's conditions precedent have been satisfied or waived by Buyer on a date
mutually agreeable to Buyer and Seller. Buyer and Seller shall deposit in escrow
with Closing Agent all instruments, documents and monies necessary to complete
the sale in accordance with this Agreement. As used herein, "closing" or "date
of closing" means the date on which all appropriate documents are recorded and
proceeds of sale are available for disbursement to Seller. Funds held in reserve
accounts pursuant to escrow instructions shall be deemed, for purposes of this
definition, as available for disbursement to Seller.
5.2 ACCEPTANCE OF EXCEPTIONS. Neither Seller nor Buyer shall be
required to close, and the Deposit and all interest thereon shall be returned to
Buyer, if any exception or item disapproved by Buyer as herein provided cannot
be removed by the date of closing; provided, however, that Buyer may elect to
waive any disapproved exceptions or items and close on the remaining terms.
Notwithstanding the foregoing, Seller shall remove any defect or encumbrance
attaching by, through or under Seller after the Effective Date of this
Agreement. Exceptions to be discharged by Seller may be paid out of the purchase
price at closing.
5.3 PRORATIONS; CLOSING COSTS. Taxes and assessments for the current
year and utilities constituting liens shall be prorated as of the date of
closing. Seller shall pay the premium for the title insurance policy, real
estate excise, transfer and/or conveyance taxes, the cost of conveyance tax
stamps, if any, and one-half of Closing Agent's escrow fee. Buyer shall pay
the cost of recording the statutory warranty deed, and one-half of Closing
Agent's escrow fee and the difference in the cost of the premium between
standard owner's and extended coverage.
5.4 POSSESSION. Buyer shall be entitled to possession upon closing.
6. CONVEYANCE OF TITLE. On closing, Seller shall execute and deliver to
Buyer a statutory warranty deed conveying good and marketable title to the
Property free and clear of any defects or encumbrances except for the lien of
real estate taxes for the current calendar year not yet due and payable, those
defects or encumbrances appearing on the preliminary commitment for title
insurance that are approved by Buyer (the "Permitted Exceptions"), and other
encumbrances or defects approved by Buyer in writing.
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As soon as available after closing, Seller shall provide to Buyer a
policy of title insurance pursuant to the preliminary commitment, dated as of
the closing date and insuring Buyer in the amount of the purchase price
against loss or damage by reason of defect in Buyer's title to the Property
subject only to the printed exclusions and general exceptions appearing in
the policy form; any Permitted Exceptions; the exceptions specified in the
preliminary commitment which Buyer has not disapproved of as provided herein;
and real property taxes and assessments that are not delinquent.
7. RISK OF LOSS; CONDEMNATION. Risk of loss of or damage to the Property
shall be borne by Seller until the date of closing. Thereafter, Buyer shall
bear the risk of loss. In the event of material loss of or damage to the
Property prior to the date upon which Buyer assumes the risk, Buyer may
terminate this Agreement by giving notice of such termination to Seller and
Closing Agent, and such termination shall be effective and the Deposit and
interest thereon shall be refunded ten (10) days thereafter; provided, however,
that such termination shall not be effective if Seller agrees in writing within
such ten (10) day period to restore the Property substantially to its present
condition by the closing date.
If the Property is or becomes the subject of a condemnation proceeding
prior to closing, Buyer may, at its option, terminate this Agreement by giving
notice of such termination to Seller, and upon such termination the Deposit and
accrued interest shall be returned to Buyer and this Agreement shall be of no
further force or effect; provided, however, that Buyer may elect to purchase the
Property, in which case the total purchase price shall be reduced by the total
of any condemnation award received by Seller. On closing, Seller shall assign
to Buyer all of Seller's rights in and to any future condemnation awards or
other proceeds payable or to become payable by reason of any taking. Seller
agrees to notify Buyer of eminent domain proceedings within five (5) days after
Seller learns thereof.
8. SELLER'S REPRESENTATIONS AND WARRANTIES. In addition to other
representations herein, Seller represents and warrants to Buyer as of the date
of closing that:
8.1 Seller has full power and authority to execute this Agreement and
perform Seller's obligations and duties hereunder:
8.2 The Property is not subject to any leases, tenancies or rights of
persons in possession;
8.3 Neither the Property nor the sale of the Property violates any
applicable statute, ordinance or regulation, nor any order of any court or any
governmental authority or agency, pertaining to the Property or the use
occupancy or condition thereof;
8.4 Seller is unaware of any material defect in the Property;
8.5 All persons and entities supplying labor, materials and
equipment to the Property have been paid and there are no claims or liens;
8.6 There are no currently due and payable assessments for public
improvements against the Property and Seller is not aware of any local
improvement district or other taxing authority having jurisdiction over the
Property in the process of formation;
8.7 The Property has legal access to all streets adjoining the
Property;
8.8 Seller has good and marketable title to the Property;
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8.9 Seller is not a "foreign person" for purposes of Section 1445 of
the Internal Revenue Code. Prior to closing, Seller shall execute and deliver to
Closing Agent an affidavit in order to meet the Foreign Investment in Real
Property Tax Act ("FIRPTA") requirements of I.R.C. # 1445; and
8.10 Seller has not received notification of any kind from any agency
suggesting that the Property is or may be targeted for a Superfund or similar
type of cleanup. To the best of Seller's knowledge, neither the Property nor
any portion thereof is or has been used (i) for the storage, disposal or
discharge of oil, solvents, fuel, chemicals or any type of toxic or dangerous or
hazardous waste or substance, (ii) as a landfill or waste disposal site, and
(iii) does not contain any underground storage tanks. Seller agrees to
indemnify, defend and hold Buyer harmless from and against any and all loss,
damage, claims, penalties, liability, suits, costs and expenses (including,
without limitation, reasonable attorneys' fees) and also including without
limitation, costs of remedial action or cleanup, suffered or incurred by Buyer
arising out of or related to any such use of the Property, or portion thereof,
occurring prior to the conveyance to Buyer, about which Seller knew or
reasonably should have known prior to Closing and did not disclose to Buyer.
9. BUYER'S AUTHORITY. Buyer represents and warrants to Seller that at
the date of execution hereof and at the date of closing Buyer, and the person
signing on behalf of Buyer, has full power and authority to execute this
Agreement and to perform Buyer's obligations hereunder.
10. DEFAULT. If Seller defaults hereunder, Buyer may seek specific
performance of this Agreement, damages or rescission and Buyer shall be entitled
to return of the Deposit with accrued interest, on demand. If Buyer defaults,
the Deposit and accrued interest shall be forfeited to Seller as liquidated
damages and as Seller's sole and exclusive remedy and upon payment thereof to
Seller, Buyer shall have no further obligations or liability hereunder. In any
suit, action or appeal therefrom to enforce this Agreement or any term or
provision hereof, or to interpret this Agreement, the prevailing party shall be
entitled to recover its costs incurred therein, including reasonable attorneys'
fees.
11. NOTICES. All notices, waivers, elections, approvals and demands
required or permitted to be given hereunder shall be in writing and shall be
personally delivered (by overnight courier service or other means of personal
service) or sent by United States certified mail, return receipt requested, to
the addressee's mailing address set forth on the signature page:
and, in the case of Buyer, a copy to: William N. Moloney
5711 NE Tolo Rd.
Bainbridge Island, WA 98110
and, in the case of Seller, a copy to: Alex Madonna
----------------------------
P.O. Box 3910
----------------------------
San Luis Obispo, Ca 93403
----------------------------
----------------------------
Either party hereto may, by proper notice to the other, designate any other
address for the giving of notice. Any notice shall be effective when personally
delivered or, if mailed as provided herein, on the date of actual receipt.
12. RECIPROCAL ACCESS EASEMENT AGREEMENT. Buyer and Seller agree to enter
into a reciprocal access easement agreement (the "R.E.A.") for ingress and
egress of Future Development Sites A and B, as depicted on Exhibit A, and for
customer only ingress and egress to any future retail development of Seller's
additional property adjoining either side of the Property. The R.E.A. shall be
prepared and executed during the first sixty (60) days of the Contingency Period
and recorded at the closing.
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13. NO NEGOTIATIONS WITH THIRD PARTY. Seller shall not negotiate nor
commit to sell, lease or otherwise transfer the Property on any portion thereof
to any other person or party as long as Buyer is proceeding in good faith to
perform its duties under this Agreement. This covenant shall remain in full
force and effect and be legally binding upon Seller until termination of this
Agreement.
14. GENERAL. This is the entire agreement of Buyer and Seller with
respect to the matters covered hereby and supersedes all prior agreements
between them, written or oral. This Agreement may be modified only in writing,
signed by Buyer and Seller. Any waivers hereunder must be in writing. No waive
or any right or remedy in the event of default hereunder shall constitute a
waiver of such right or remedy in the event of any subsequent default. This
Agreement is for the benefit only of the parties hereto and shall inure to the
benefit of and bind the heirs, personal representatives, successors and assigns
of the parties hereto. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision hereof.
15. SURVIVAL OF WARRANTIES. The terms, covenants, representations and
warranties shall not merge in the deed of conveyance, but shall survive closing.
16. COMMISSIONS. Each party represents to the other that it has not
engaged any broker or other agent in connection with the negotiations leading to
this Agreement or the sale of the Property and that there are no commissions or
fees of any kind involved in this transaction. Each party agrees to indemnify
and hold the other party harmless from and against all claims and demands of any
and all brokers or agents with respect to the Property.
17. EXHIBITS. Exhibits A, B and C attached hereto are incorporated herein
as if fully set forth.
EXHIBIT A - SITE PLAN
EXHIBIT B - LEGAL DESCRIPTION OF SELLER'S ENTIRE TRACT
EXHIBIT C - LEGAL DESCRIPTION OF THE PROPERTY AND PARCEL MAP
18. EFFECTIVE DATE. The later of the Buyer's signature date and the
Seller's signature date, set forth below, shall be the "Effective Date" of this
Agreement.
BUYER: EAGLE HARDWARE & GARDEN, INC.
By: /s/ Paul B. Morris
--------------------------------
Typed Name:
August 11 , 1997
- -------------------------
Buyer's signature date Its:
Address:
981 Powell Avenue S.W.
Renton, WA 98055
SELLER: ALEX MADONNA AND PHYLLIS MADONNA
By: /s/ Alex Madonna
--------------------------------
Typed Name: ALEX MADONNA
August 7 , 1997
- -------------------------
Seller's signature date
By: /s/ Phyllis Madonna
--------------------------------
Typed Name: PHYLLIS MADONNA
August 7 , 1997
- -------------------------
Seller's signature date
Address:
6
<PAGE>
EXHIBIT "A"
[MAP]
EXHIBIT "A"
<PAGE>
EXHIBIT "B"
LEGAL DESCRIPTION OF SELLER'S ENTIRE TRACT
(To be provided by Seller at time of execution of this Agreement)
EXHIBIT "B"
7
<PAGE>
EXHIBIT "C"
LEGAL DESCRIPTION OF THE PROPERTY
(To be provided by Seller upon completion of the ALTA/ACSM Class A survey as set
forth in Section 6).
EXHIBIT "C"
8
<PAGE>
EAGLE HARDWARE & GARDEN, INC.
COMPUTATION OF NET INCOME PER SHARE - EXHIBIT 11.1
(IN THOUSANDS)
(UNAUDITED) (UNAUDITED)
13 WEEKS ENDED 26 WEEKS ENDED
---------------------- ----------------------
AUGUST 1, JULY 26, AUGUST 1, JULY 26,
1997 1996 1997 1996
--------- --------- --------- ---------
Net income as reported $12,983 $8,065 $17,571 $11,029
--------- --------- --------- ---------
--------- --------- --------- ---------
Net income used for primary
computation $12,983 $8,065 $17,571 $11,029
Add (where dilutive):
Tax effected interest and
amortization of debt expense
on convertible debt 919 922 1,838 1,844
--------- --------- --------- ---------
Net income used for fully
diluted computation $13,902 $8,987 $19,409 $12,873
--------- --------- --------- ---------
--------- --------- --------- ---------
Weighted average number of
common shares outstanding 28,987 22,942 28,942 22,922
Add (where dilutive):
Assumed exercise of those
options that are common
stock equivalents net of
treasury shares deemed to
have been repurchased 437 417 436 376
--------- --------- --------- ---------
Weighted average number of
common and common equivalent
shares outstanding, used for
primary computation 29,424 23,359 29,378 23,298
Add (where dilutive):
Shares applicable to stock
options in addition to those
used in primary computation
due to the use of period-end
market price when higher than
average price 0 62 0 31
Assumed exercise of
convertible debt 4,785 4,792 4,785 4,792
--------- --------- --------- ---------
Adjusted shares outstanding
used for fully diluted
computation 34,209 28,213 34,163 28,121
--------- --------- --------- ---------
--------- --------- --------- ---------
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-30-1998
<PERIOD-END> AUG-01-1997
<CASH> 58,189
<SECURITIES> 0
<RECEIVABLES> 6,583
<ALLOWANCES> 2,199
<INVENTORY> 196,559
<CURRENT-ASSETS> 266,467
<PP&E> 335,775
<DEPRECIATION> 36,584
<TOTAL-ASSETS> 568,451
<CURRENT-LIABILITIES> 107,043
<BONDS> 0
0
0
<COMMON> 264,595
<OTHER-SE> 59,188
<TOTAL-LIABILITY-AND-EQUITY> 568,451
<SALES> 278,238
<TOTAL-REVENUES> 278,238
<CGS> 199,966
<TOTAL-COSTS> 199,966
<OTHER-EXPENSES> 56,388
<LOSS-PROVISION> 461
<INTEREST-EXPENSE> 2,188
<INCOME-PRETAX> 20,433
<INCOME-TAX> 7,450
<INCOME-CONTINUING> 12,983
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,983
<EPS-PRIMARY> 0.44
<EPS-DILUTED> 0.41
</TABLE>
