Exhibit 10.1
Purchase and Sale Agreement
And Joint Escrow Instructions

             
TO:
  First American Title Insurance Company   Escrow No.    
 
  2425 E. Camelback Road, Suite 300   Escrow Officer:   Neil Moffett
 
  Phoenix, Arizona 85016   Telephone No.:   602/567-8100
 
      Facsimile No.:   602/567-8101
 
      Email:   nmoffett@firstam.com

     This Purchase and Sale Agreement and Joint Escrow Instructions (this
“Agreement”), dated as of June 29, 2009 (the “Effective Date”), is by and
between AZPRO DEVELOPMENTS, INC., an Arizona corporation (“Seller”), and SHOPOFF
ADVISORS, L.P., a Delaware limited partnership (“Buyer”), and constitutes an
agreement for the purchase and sale of real property and joint escrow
instructions directed to First American Title Insurance Company (as “Escrow
Holder”) to establish an escrow (the “Escrow”) to accommodate the transaction
contemplated hereby.
RECITALS:
     A. Seller owns approximately 200 gross acres of land situated in the Town
of Buckeye (the “Town”), County of Maricopa (the “County”), State of Arizona, as
more particularly described in Exhibit “A” attached hereto and incorporated
herein by this reference (the “Land”).
     B. The term “Appurtenant Rights” shall mean all of Sellers’ right, title
and interest, if any, in and to any rights and appurtenances pertaining to the
Land, development rights (including without limitation, tentative maps, site
plan approvals, permits and authorizations issued by federal and state
regulatory agencies), roads, alleys, easements, streets and ways appurtenant to
the Land, rights of ingress and egress thereto. The Appurtenant Rights also
include the right to use the unregistered name “Desert Moon Estates”. The Land
and the Appurtenant Rights shall sometimes hereinafter be referred to
collectively as the “Property”.
     C. Seller wishes to sell the Property to Buyer, and Buyer wishes to
purchase the Property from Seller, all under the terms and conditions contained
herein.
     NOW THEREFORE, in consideration of the foregoing recitals, and the mutual
covenants contained herein, the receipt and sufficiency of which are hereby
acknowledged, Buyer and Seller hereby agree as follows:
     1. Purchase and Sale. Seller agrees to sell the Property to Buyer and Buyer
agrees to purchase the Property from Seller, on and subject to the terms and
conditions hereinafter set forth.
     2. Purchase Price. The “Purchase Price” for the Property shall be Three
Million Dollars ($3,000,000.00) all cash at Closing (as hereinafter defined).
     3. Payment of Purchase Price. The Purchase Price shall be paid as follows:
     a. Not later than 5:00 PM (Phoenix Time) on the third (3rd) business day
following the Effective Date, Buyer, as a condition precedent to this Agreement
becoming a binding agreement between the parties, shall deposit into the Escrow
by confirmed wire transfer of immediately available federal funds, the amount of
Fifty Thousand Dollars ($50,000.00) (the “First Deposit”).

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     b. If Buyer has elected to proceed with the purchase of the Property prior
to or upon expiration of the Due Diligence Period (defined below), Buyer shall
deposit into Escrow by confirmed wire transfer of immediately available federal
funds, the additional sum of One Hundred Thousand Dollars ($100,000.00) (the
“Second Deposit”). The First Deposit and the Second Deposit shall become
non-refundable to Buyer upon Escrow Holder’s receipt of the Second Deposit,
except upon a termination of this Agreement as a result of (i) Seller’s material
default under this Agreement occurring prior the Close of Escrow, or (ii) the
failure of any material condition precedent to Buyer’s obligation to purchase
the Property expressly stated herein.
     c. If Buyer fails to deposit the First Deposit or the Second Deposit within
the time period provided for above, Seller may at any time prior to Escrow
Holder’s receipt of the First Deposit or Second Deposit, as applicable,
terminate this Agreement and the Escrow by giving written notice to Buyer and
Escrow Holder, in which case this Agreement shall be null and void ab initio and
in such event Escrow Holder will immediately deliver to Seller all copies of
this Agreement in its possession and, thereafter, neither party shall have any
further rights or obligations to the other hereunder, except as otherwise set
forth in this Agreement. The First Deposit, together with the Second Deposit
shall sometimes collectively be referred to herein as the “Deposit”. The Deposit
and all interest on that portion of the Deposit while in Escrow during the term
of this Agreement, shall be credited in favor of Buyer against the Purchase
Price for the Property upon the Close of Escrow, but shall be (i) paid to Seller
if Seller is entitled to receive the Deposit in accordance with this Agreement,
or (ii) returned to Buyer if Buyer is entitled to a return of the Deposit in
accordance with this Agreement.
     d. The balance of the Base Purchase Price for the Property, together with
Buyer’s share of costs to be paid and pro-rations to be made pursuant to
Section 13 and Section 14 of this Agreement, shall be deposited by Buyer into
the Escrow by confirmed wire transfer of immediately available federal funds, no
later than 3:00 P.M. (Phoenix Time) on the last business day before the Close of
Escrow and shall be disbursed to Seller by Escrow Holder upon the Close of
Escrow.
     4. Opening and Close of Escrow.
     a. Opening of Escrow. For the purposes of this Agreement, the “Opening of
Escrow” shall mean the date that Escrow Holder receives the First Deposit and
executed counterpart copies (delivered or by facsimile transmission) of this
Agreement signed by Buyer and Seller. Escrow Holder shall notify Buyer and
Seller, in writing, of the date of Opening of Escrow. Buyer and Seller agree to
execute, deliver and be bound by any reasonable and customary supplemental
instructions that may be reasonably requested by Escrow Holder or that may be
necessary or convenient to consummate the transaction contemplated hereby;
provided, however, that such supplemental instructions shall be consistent with
and shall not supersede this Agreement and in all cases this Agreement shall
control.
     b. Close of Escrow. For purposes of this Agreement, the “Close of Escrow”
with respect to the Property shall mean the date on which a Special Warranty
Deed executed by Seller conveying the title to the Land, substantially in the
form attached hereto as Exhibit “B” (the “Warranty Deed”), is recorded in the
Official Records of the County.
     c. Date of Close of Escrow; Outside Date. The Close of Escrow for the
Property shall occur on July 30, 2009 at the office of Escrow Holder or at such
other location in Phoenix, Arizona, at the parties may mutually agree in
writing.

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     5. Buyer’s Contingencies. For the benefit of Buyer, Buyer’s obligation to
consummate the transaction contemplated in this Agreement shall be expressly
subject to and contingent upon Buyer’s written approval or written waiver of
each of the following contingencies (“Contingencies”).
     a. Title Matters.
     i. First American Title Insurance Company (the “Title Company”) has been
requested to issue a title commitment (the “Title Commitment”) covering the
Land, together with copies of all exceptions referred to in the Title
Commitment. Prior to the expiration of the Due Diligence Period, Buyer shall
notify Seller in writing (the “Title Objections Notice”) of those title
exceptions, if any, which Buyer is unwilling to accept (such exception[s] being
herein called, collectively, the “Un-permitted Exceptions”); provided, however,
Seller shall remove, and Buyer shall not be required to object to, any and all
monetary liens and encumbrances executed by Seller affecting the Property and
any judgment lien naming Seller as a defendant or mechanics’ liens recorded
against the Property relating to work initiated by Seller (excluding
non-delinquent taxes, bonds and assessments and excluding monetary obligations
arising out of or relating to the Development Agreements (defined below) and the
CC&Rs (defined below)) (collectively, “Seller’s Monetary Liens”).
Notwithstanding anything to the contrary herein, in no event shall the title
review period specified in this Section 5.a, extend the past the date of
expiration the Due Diligence Period (defined below).
          Seller discloses to Buyer that (a) the Land is subject to the
Development Agreements (collectively, the “Development Agreements”) and the
Declaration of Covenants, Conditions and Restrictions regarding membership in
the Central Arizona Groundwater Replenishment District (the “CC&Rs”) described
below, and (b) that the Property will be subject to any and all assessments and
other amounts payable after the Close of Escrow pursuant to the Development
Agreements and/or the CC&Rs, including any assessments imposed upon the Land by
virtue of any assessment districts referred to in the Development Agreements or
by virtue of the CC&Rs:
     (1) Development and Reimbursement Agreement Concerning the Payment of
Engineering and other Professional Fees Pertaining to the Formation of an
Assessment District within a Community Facilities District (Sewer and Effluent
Lines), recorded in the Official Records of Maricopa County, Arizona on May 28,
2004, at Instrument No. 2004-0610172;
     (2) Development and Reimbursement Agreement Concerning the Payment of
Engineering and other Professional Fees Pertaining to the Formation of an
Assessment District within a Community Facilities District (Wastewater Treatment
Plant), recorded in the Official Records of Maricopa County, Arizona on June 25,
2004, at Instrument No. 2004-0726243;
     (3) The Watson Road Community Facilities District (Town of Buckeye,
Arizona) Waiver and Development Agreement Pertaining to Assessment District
No. 1, recorded in the Official

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Records of `Maricopa County, Arizona, on October 19, 2005, at Instrument
No. 2005-1559019, and re-recorded on November 15, 2005, at Instrument
No. 2005-1727787 (the “Waiver Agreement”) and related documents recorded at
Instrument No. 2005-1559020, Instrument No. 2005-1559021, 2005-1570264 and
Instrument No. 2005-1864436;
     (4) Declaration of Covenants, Conditions and Restrictions for Desert Moon
Estates Regarding Membership in the Central Arizona Groundwater Replenishment
District recorded in the Official Records of Maricopa County, Arizona on
April 11, 2006, at Instrument No. 2006-0483225; and
     (5) Water Facilities Offsite Extension Agreement dated January 25, 2008,
between Seller, Buckeye 60, LLC, Armstrong Miller, LLC, CVS 5934 AZ, LLC, Great
American Capital/Miller MarketPlace, LLC, and Buckeye 40, LLC and Valencia Water
Company (the “Company”) (the “Valencia Offsite Agreement”) and related Letter
Agreement dated January 14, 2008 between Seller and the Valencia Water Company
(the “Letter Agreement”).
     ii. Within two (2) days after the Seller receives Buyer’s Title Objection
Notice, Seller shall notify Buyer in writing (a “Title Objection Response”)
whether it is unable or unwilling to remove any Un-permitted Exceptions
identified in Schedule 3 or the Supplemental Title Objection Notice, as
applicable, it being understood and agreed by Buyer that Seller shall have no
obligation to remove any Un-permitted Exceptions. In either event, Buyer shall
have the right, as its sole remedy for such inability or unwillingness of
Seller, by delivery of written notice to Seller within two (2) days following
receipt of notice from Seller of its election not to remove such Un-permitted
Exceptions, to either (1) terminate this Agreement and the Escrow by written
notice delivered to Seller and Escrow Holder (in which event the termination
provisions of Section 12 below shall apply), or (2) accept title to the Property
subject to such Un-permitted Exceptions without an abatement in or credit
against the Purchase Price, in which event such Un-permitted Exceptions shall
then become Permitted Exceptions. The failure of Buyer to deliver any written
notice of election under this Section 5.a.ii within five (5) business days
following receipt of written notice from Seller of its election not to remove
such Un-permitted Exceptions shall conclusively be deemed to be an election
under clause (1) of the preceding sentence. During the term of this Agreement,
Seller shall not record any items against title to the Property or otherwise
enter into any binding agreement encumbering title to the Property except as
expressly permitted by this Agreement, without obtaining the prior written
approval of Buyer, which shall not be unreasonably withheld, conditioned or
delayed.
     iii. If, as of the Close of Escrow, in addition to Seller’s Monetary Liens,
there are any monetary liens or encumbrances affecting the Land that Seller has
agreed (in the exercise of its sole discretion and without any obligation) to
discharge under this Agreement (collectively, the “Un-Permitted Liens”), Seller
shall cause the discharge of the same at Seller’s sole expense, either by way of
payment or by alternative manner

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reasonably satisfactory to Seller and the Title Company, and the same shall not
be deemed to be Un-permitted Exceptions.
     iv. The Property shall be sold and conveyed subject to the following
exceptions to title (collectively, the “Permitted Exceptions”):
     1. those matters specifically set forth in Schedule B to the Title
Commitment that are accepted by Buyer as provided in this Agreement, other than
Seller’s Monetary Liens and any Un-Permitted Liens;
     2. all laws, ordinances, rules and regulations of the United States, the
State of Arizona, the County, the Town or any agency, department, commission,
bureau or instrumentality of any of the foregoing having jurisdiction over the
Property (each, a “Governmental Authority”), as the same may now exist or may be
hereafter modified, supplemented or promulgated;
     3. all presently existing and future liens of real estate taxes or
assessments and water rates, water meter charges, water frontage charges and
sewer taxes, rents and charges, if any; provided that such items are not yet due
and payable and are apportioned as provided in this Agreement;
     4. any Un-permitted Exception which Seller is unwilling or unable to remedy
as provided in this Agreement if this Agreement is not terminated by Buyer as a
result thereof pursuant to Section 5.a.ii above;
     5. Any matter (including any lien, encumbrance or easement) voluntarily
imposed or consented to in writing by Buyer prior to or as of the Close of
Escrow; and
     6. Such state of facts as may be shown on an accurate and accurate survey
or by inspection of the Property.
     v. In the event Buyer requests any endorsements to the Title Policy (“Buyer
Requested Title Endorsements”), the issuance of any such Buyer Requested Title
Endorsements shall not be deemed to be a condition to closing the transaction
contemplated, except to the extent the Title Company, prior to the end of the
Due Diligence Period, commits in writing to issue such Buyer Requested Title
Endorsements and in no event shall Seller be obligated to provide any indemnity
or other document or undertake any obligation in order to cause the Title
Company to issue the same (other than for mechanic’s liens); provided, however,
that Seller will reasonably cooperate, at no cost or liability to Seller, with
Buyer and the Title Company in connection with the issuance of the Title Policy
and Buyer Requested Title Endorsements, as the case may be.
     b. Due Diligence Reviews. Commencing on the Effective Date and ending at
5:00 PM (Phoenix Time) on July 20, 2009 (the “Due Diligence Period”), Buyer
shall have the opportunity to review and investigate the Property, in Buyer’s
sole discretion, which review and investigation may include, without limitation,
the following matters:
     i. The adequacy and condition of the Land and the adequacy of all utilities
to the Property, including, but not limited to, power, water, gas, telephone,
cable and sanitary sewer.

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     ii. The condition of the soils and the geologic, environmental and
engineering conditions of the Property, based on any and all soils, engineering,
environmental or geologic tests, reports and studies which Buyer desires to
perform, which reports, tests and studies shall be performed at Buyer’s sole
cost and expense in compliance with the provisions of Section 18 below.
     iii. Any documents, instruments and agreements in Seller’s possession or
control relating to the currently intended use or development of the Property
but excluding confidential financial data and work product (the “Property
Information Materials”), including without limitation any geo-technical reports,
engineering reports, civil engineering drawings (in electronic PDF or CADD
form), lotting studies, tentative maps, site plans, surveys (including any
existing ALTA surveys in Seller’s possession), a phase I environmental audit,
traffic studies and drainage studies, which items have been delivered by Seller
to Buyer, or made available to Buyer by Seller, prior to the Effective Date.
Such reports, surveys, investigations, audits or studies have been provided or
made available to Buyer as an accommodation only, and Seller makes no
representation as to the accuracy or completeness of any of such reports,
surveys, investigations, audits or studies (except as otherwise may be expressly
stated in Section 7(a) below). Notwithstanding the foregoing, Seller has made
available to Buyer and will continue to make available to Buyer for inspection
during the Due Diligence Period, any and all known information in Seller’s
possession or reasonably available to Seller regarding the physical condition or
legal entitlements with respect to the Property, during the term of this
Agreement. Seller agrees to instruct its consultants and their employees to be
available to Buyer openly discuss the Due Diligence Materials prepared by or
used by such consultants, but Buyer shall not have the right to request that
such consultants perform additional work unless at Buyer’s sole cost and
expense. Seller agrees to provide to Buyer complete copies of all permit
applications submitted by Seller or its consultants and all relevant
correspondence relating to all regulatory permits affecting the Property
promptly following Seller’s receipt of same.
     All of the documents, instruments and agreements identified in Section 5.b.
above and any other information delivered to the Buyer by Seller relating to the
Property shall be referred to herein as the “Due Diligence Materials”.
     c. Buyer’s Election. If, prior to the expiration of the Due Diligence
Period, Buyer deposits into Escrow the Second Deposit, then Buyer shall be
deemed to have unconditionally approved the condition of the Property as
provided in this Agreement (but subject to closing conditions as set forth in
Section 10 below, otherwise, Buyer shall be deemed to have disapproved the
condition of the Property, in which event the termination provisions of
Section 12 of this Agreement shall apply.
     During the term of this Agreement, Seller further agrees to provide to
Buyer, promptly following its receipt of same, copies of any additional Due
Diligence Materials (being documents, reports, etc. which relate in a material
way to the current physical condition of the Land) not available to Seller as of
the Effective Date of this Agreement.
     6. “AS-IS” SALE. Buyer acknowledges and agrees that Buyer is experienced in
the purchase and development of land similar to the Property and that Buyer has
inspected the Property, or will, during the Due Diligence Period, inspect the
Property, to its satisfaction, and is qualified to make such inspections. Except
for Seller’s express representations to Buyer in this Agreement, Buyer
acknowledges that it is fully relying on Buyer’s (or Buyer’s representatives’ or

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consultants’) inspections of the Property and not upon any statements (oral or
written) which may have been made or may be made (or purportedly made) by Seller
or any of its representatives or consultants, including, without limitation, the
Recitals set forth above in this Agreement. No person acting on behalf of Seller
is authorized to make, and by execution hereof Buyer acknowledges no person has
made, any representation, statement, warranty, guaranty, or promise regarding
the Property or the transaction contemplated herein, or the zoning,
construction, physical condition or other status of the Property except as may
be expressly set forth in this Agreement. Buyer acknowledges that Buyer, or
Buyer’s representatives and/or consultants, will have the opportunity to
thoroughly inspect and examine the Property to the extent deemed necessary by
Buyer in order to enable Buyer to evaluate the condition of the Property and all
other aspects of the Property (including, but not limited to, the environmental
condition of the Property), and except to the extent of Seller’s representations
set forth herein, Buyer acknowledges that Buyer will rely solely upon its own
(or its representatives’ or consultants’) inspections, examinations and
evaluations of the Property, as a material part of the consideration of this
Agreement and the purchase of the Property.
          EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, BUYER ACKNOWLEDGES
THAT SELLER IS SELLING THE PROPERTY “AS IS” AND “WITH ALL FAULTS” AND THAT
NEITHER SELLER NOR ITS AGENTS HAVE MADE ANY WARRANTIES OR REPRESENTATIONS,
EXPRESS OR IMPLIED, ORAL OR WRITTEN, REGARDING ANY MATTER PERTAINING TO THE
PROPERTY OR ITS USE INCLUDING: (I) THE PHYSICAL CONDITION, ZONING, USE, VALUE,
INTENDED USE, OR OTHER CONDITION OF THE PROPERTY; (II) ITS MERCHANTABILITY;
(III) ITS FITNESS FOR A PARTICULAR PURPOSE; (IV) THE PHYSICAL CONDITION, ZONING,
USE, VALUE, INTENDED USE, OR OTHER CONDITION OF ANY NEIGHBORING PROPERTY; OR
(V) THE CLASSIFICATION OF THE PROPERTY FOR AD VALOREM PURPOSES. UPON THE
CLOSING, BUYER WAIVES, AND RELEASES SELLER FROM, ALL PRIVATE RIGHTS OF ACTION
UNDER FEDERAL, STATE, LOCAL, AND COMMON LAW, INCLUDING THE COMPREHENSIVE
ENVIRONMENTAL RESPONSE COMPENSATION AND LIABILITY ACT, WHICH BUYER MAY HAVE
AGAINST SELLER ARISING OUT OF THE PAST OR PRESENT (AS OF THE DATE HEREOF)
PRESENCE OF HAZARDOUS WASTE OR SUBSTANCES ON THE PROPERTY OR ARISING OUT OF THE
PHYSICAL CONDITION OF THE PROPERTY OR ANY NEIGHBORING PROPERTY. BUYER FURTHER
ASSUMES THE RISK OF ALL CHANGES IN APPLICABLE LAWS AND REGULATIONS RELATING TO
THE PRESENCE OF HAZARDOUS WASTES OR CONDITIONS WHICH MAY NOT BE REVEALED IN ANY
ENVIRONMENTAL REPORT PROVIDED TO OR OBTAINED BY BUYER UNDER THIS AGREEMENT.
THAT BY INITIALLING BELOW, THE BUYER ACKNOWLEDGES THAT (I) THIS SECTION 6 HAS
BEEN READ AND FULLY UNDERSTOOD, (II) THE BUYER HAS HAD THE CHANCE TO ASK
QUESTIONS OF ITS COUNSEL ABOUT ITS MEANING AND SIGNIFICANCE, AND (III) THE BUYER
HAS ACCEPTED AND AGREED TO THE TERMS SET FORTH IN THIS SECTION 6.

      TJ   WAS SELLER’S INITIALS   BUYER’S INITIALS

     7. Seller’s Representations, Warranties and Covenants.
     a. Seller hereby represents and warrants to Buyer, which representations
and warranties shall be true and correct as of the Effective Date and as of the
date of the Close of Escrow, and which shall survive the Close of Escrow for a
period of six (6) months, as follows:

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     i. Seller is a corporation duly organized, validly existing and in good
standing under Arizona law. Seller has the legal power, right and authority to
enter into this Agreement and the instruments to be executed by Seller pursuant
to this Agreement and to consummate the transactions contemplated hereby. No
consent of any third party is required in order for Seller to perform its
obligations hereunder.
     ii. All requisite action has been taken by Seller in connection with
Seller’s execution of this Agreement and the instruments to be executed by
Seller pursuant to this Agreement and the consummation of the transactions
contemplated hereby.
     iii. The individuals executing this Agreement and the instruments to be
executed by Seller pursuant to this Agreement on behalf of such entity have the
legal power, right and actual authority to bind Seller to the terms and
conditions of this Agreement and such instruments.
     iv. Neither the execution and delivery of this Agreement and the documents
referenced herein, nor the undertaking of the obligations set forth herein, nor
the consummation of the transactions herein contemplated, nor compliance with
the terms of this Agreement or the documents referenced herein conflict with or
result in the material breach of any terms, conditions or provisions of, or
constitute a default under, any bond, note or other evidence of indebtedness or
any contract, indenture, mortgage, deed of trust, loan, partnership agreement,
lease or other agreement or instrument to which Seller is a party.
     v. Except as otherwise provided in Section 32 below, all consultants,
contractors and suppliers who provided materials and/or services/labor with
respect to the Property or its contemplated development have been paid in full.
     vi. To Seller’s knowledge, there is not pending or overtly threatened in
writing, from any federal, state, county or local authority any notice, suit, or
judgment relating to any violation of any statute, ordinance, law or code with
respect to the Property.
     vii. Except as may be disclosed in any environmental assessment or report
provided to or obtained by Buyer, Seller has not caused or knowingly authorized
the presence, placement, generation, transportation, storage, release, treatment
or disposal on the Land of any hazardous substance, and has not received any
notice from any governmental authority stating or indicating the existence or
occurrence of any of the foregoing.
     viii. Seller has not entered into any leases or contracts which will affect
or burden the Land following the Close of Escrow, and to Seller’s knowledge,
there are no leases, contracts or other agreements which will affect or burden
the Land following the Close of Escrow, except for matters disclosed in or
pursuant to this Agreement.
     ix. To Seller’s knowledge, except as otherwise disclosed to Buyer in
writing, the Property Information Materials do not contain any material
inaccuracy or any material omission which would render such Property Information
Materials materially misleading.
     x. To Seller’s knowledge: (i) there presently is not any environmentally
hazardous substances or above- or below-ground storage tanks on the Land; (ii)
Seller

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has not received any notification from any governmental entity or agency
regarding any alleged non-compliance of the Land with applicable laws and/or
regulations relating to environmentally hazardous substances; and (iii) there is
no pending or threatened litigation, proceedings or investigations before any
governmental entity or agency in which the presence, placement, generation,
transportation, storage, release, treatment or disposal of any environmental
hazardous substance on or in the Property has been alleged.
     For purposes of this Section, “Seller’s knowledge” shall refer to the
actual, personal knowledge of Terry Johnson (who Seller represents is the most
knowledge person within Seller’s organization regarding the Property and its
development potential), without any duty of inquiry or investigation and without
imposition of any individual liability on such representative of Seller. In the
event a representation or warranty of Seller as stated above is true as of the
Effective Date, but due to the occurrence of a change in circumstances of which
Seller actually becomes aware between the Effective Date and the Close of
Escrow, cannot be stated truthfully by Seller in all material respects upon the
Close of Escrow, Seller shall not be in breach of this Agreement by reason
thereof, provided Seller promptly after learning of the same and prior to the
Close of Escrow, notifies Buyer in writing of such change in circumstances or
the date of Close of Escrow, whichever is first to occur. In such event, Buyer
shall have the right, by written notice to Seller and Escrow Holder within five
(5) business days of learning of such changed circumstance, to either (x) waive
such changed circumstances (which shall be deemed given if Buyer authorizes
Escrow Holder to close Escrow) and proceed to close Escrow with Seller’s
relevant representation or warranty deemed qualified to exclude the changed
circumstances, or (y) deem such change in circumstances a failure of a condition
precedent to Buyer’s obligation to purchase the Property and terminate this
Agreement and the Escrow, in which event the termination provisions of
Section 12 below shall apply.
     8. Buyer’s Representations, Warranties and Covenants. Buyer hereby
represents, warrants and covenants to Seller, which representations and
warranties shall be true and correct as of the Effective Date and as of the date
of the Close of Escrow, and which shall survive the Close of Escrow for a period
of six (6) months, as follows:
     a. Buyer has the legal power, right and authority to enter into this
Agreement and the instruments to be executed by Buyer pursuant to this Agreement
and to consummate the transactions contemplated hereby.
     b. All requisite action has been taken by Buyer in connection with Buyer’s
execution of this Agreement, the instruments to be executed by Buyer pursuant to
this Agreement, and the consummation of the transactions contemplated hereby.
     c. The individuals executing this Agreement and the instruments to be
executed by Buyer pursuant to this Agreement on behalf of Buyer have the legal
power, right and actual authority to bind Buyer to the terms and conditions of
this Agreement and such instruments.
     d. Neither the execution and delivery of this Agreement and the documents
referenced herein, nor the undertaking of the obligations set forth herein, nor
the consummation of the transactions herein contemplated, nor compliance with
the terms of this Agreement and the documents referenced herein conflict with or
result in the material breach of any terms, conditions or provisions of, or
constitute a default under, any bond, note or other evidence of indebtedness or
any contract, indenture, mortgage, deed of trust, loan, partnership agreement,
lease or other agreement or instrument to which Buyer is a party.

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     9. Title Insurance. It shall be a condition to the Close of Escrow for
Buyer’s benefit that the Title Company shall have unconditionally committed to
issue to Buyer an ALTA standard coverage owner’s policy of title insurance (the
“Title Policy”) in the amount of the Base Purchase Price, showing fee simple
title to the Land to be vested in Buyer free and clear of all liens and
encumbrances other than the Permitted Exceptions. Seller shall pay the premium
for the issuance of the Title Policy. Buyer, at Buyer’s sole option so long as
the Close of Escrow is not thereby delayed, may elect to obtain and require as a
condition to the Close of Escrow an ALTA extended coverage Title Policy,
provided Buyer timely prepares an ALTA survey satisfactory to the Title Company.
In such event, Seller shall pay for the standard coverage portion of the premium
for the Title Policy and Buyer shall pay the portion of the cost of the Title
Policy attributable to extended coverage, including the cost of any Buyer
Requested Title Endorsements.
     10. Conditions to Close of Escrow.
     a. Buyer’s obligation to purchase the Property and close Escrow is subject
to and conditioned upon the satisfaction of the following conditions on or
before the Close of Escrow, as indicated below (Seller agrees to use
commercially reasonable efforts to complete the identified items, but Seller’s
failure to complete the identified items notwithstanding such efforts shall not
constitute a default by Seller under this Agreement):
     i. The Title Company shall be committed to issue the Title Policy for the
Property to Buyer in accordance with the requirements of Section 9 above;
     ii. The physical condition of the Property shall not have changed in any
material, adverse manner;
     iii. The representations and warranties of Seller shall be true and correct
on the Closing Date, and Seller shall not be (or deemed to be) in material
breach of any representation or warranty given by Seller under Section 7.a
above;
     iv. Seller shall not otherwise be in default in the performance of any of
its material obligations under this Agreement.
     v. The requirements of Section 32 below have been satisfied as of the Close
of Escrow.
     b. Seller’s obligation to sell the Property and close the Escrow is subject
to and conditioned upon the satisfaction of the following conditions on or
before the Close of Escrow:
     i. The representations and warranties of Buyer shall be true and correct on
the Closing Date, and Buyer shall not be in material breach of any
representation or warranty given by Buyer under Section 8 above;
     ii. Buyer shall have timely executed and delivered to Escrow Holder the
items described in Section 11.b below;
     iii. Buyer shall have deposited into the Escrow all funds required to pay
the Purchase Price and Buyer’s share of pro-rations and closing costs;
     iv. the Title Company shall be committed to issue the Title Policy to Buyer
in accordance with the requirements of Section 9 above; and

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     v. Buyer shall not be in default of any other obligation of Buyer under
this Agreement.
     11. Deliveries to Escrow Holder.
     a. Seller shall execute and deliver or cause to be delivered to Escrow
Holder by 5:00 P.M. (Phoenix time) on the last business day before the date of
the Close of Escrow the following instruments, and documents (“Seller Closing
Deliveries”):
     i. The Warranty Deed, in recordable form, duly executed and acknowledged by
Seller;
     ii. a General Assignment, substantially in the form attached hereto as
Exhibit “C” (the “Assignment”);
     iii. a Certification of Non-Foreign Status (the “Certification”),
substantially in the form attached hereto as Exhibit “D”, and any Arizona
required certifications; and
     iv. any other instruments and documents which Seller is obligated to
execute and deliver into the Escrow under this Agreement.
     b. Buyer shall execute (and have notarized where appropriate) and deliver
or cause to be delivered to Escrow Holder by 5:00 P.M. (Phoenix time) on the
last business day before the date of the Close of Escrow the following (“Buyer
Closing Deliveries”):
     i. all sums that Buyer is required to deliver to Escrow Holder pursuant to
Section 3.d to close the Escrow;
     ii. A letter to Valencia Water Company in the form attached hereto as
Exhibit “E”; and
     iii. any other instruments and documents which Buyer is obligated to
execute and deliver to Escrow Holder pursuant to this Agreement.
     12. Termination. Whenever (i) a party has the right to terminate this
Agreement pursuant to an express provision of this Agreement, and notifies the
other party and Escrow Holder, in writing, of its election to terminate the
Agreement and the Escrow, or (ii) this Agreement and the Escrow automatically
terminate pursuant to an express provision of this Agreement, then:
     a. This Agreement, the Escrow and the rights and obligations of Buyer and
Seller under this Agreement shall terminate except as otherwise expressly
provided in this Agreement;
     b. If neither Buyer nor Seller are in breach of this Agreement, each party
shall be responsible to pay one-half of any cancellation charges payable to
Escrow Holder and the Title Company; otherwise the breaching party shall be
responsible for all such cancellation charges;
     c. Escrow Holder shall promptly return to Seller and Buyer all documents
deposited by them into the Escrow, respectively;
     d. Buyer and/or Buyer’s Representatives (as hereinafter defined) shall
promptly deliver to Seller all originals and copies of such information and all
third party reports and studies

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obtained by Buyer and/or Buyer’s Representatives (without warranty as to
accuracy or completeness and subject to the rights of third party consultants
preparing such reports), except to that portion of such information already in
the public domain (e.g., title reports, matters of public record, filings with
public agencies);
     e. If Buyer is entitled to the return of the First Deposit (and if made,
the Second Deposit) (i.e., Buyer terminates this transaction due to a breach by
Seller of this Agreement or due to the failure of a condition precedent to
Buyer’s obligation to purchase the Property as specified in Section 10.a above),
then provided the terms of Section 12.d. above have been satisfied, as evidenced
by written notice from Seller to Escrow Holder, Escrow Holder shall release the
Deposit to Buyer; provided, if Escrow Holder shall have already disbursed the
First and/or Second Deposit to Seller, then Seller shall first immediately
return the First and/or Second Deposit, as applicable, to Escrow Holder so as to
enable Escrow Holder to release the entire Deposit to Buyer (less one-half of
any escrow cancellation charges, if applicable); and
     f. If Buyer is not entitled to the return of the First Deposit (and if
made, the Second Deposit), then Escrow Holder shall release the First Deposit
(and if made, the Second Deposit) to Seller.
     13. Costs and Expenses. The premium for the Title Policy shall be paid in
accordance with the provisions of Section 9 above. The escrow fees of Escrow
Holder shall be shared equally by Seller and Buyer. All recording costs shall be
paid by Buyer. Buyer and Seller shall each pay their own legal and professional
fees and fees of other consultants incurred in connection with this transaction.
All other costs and expenses shall be paid according to the custom of real
estate transactions consummated in the County, as determined by Escrow Holder,
allocated equally between Buyer and Seller, except the costs of performing the
obligations of each party to this Agreement, which costs shall be borne solely
by the party incurring such costs. The provisions of this Section 13 shall
survive the Close of Escrow or a termination of this Agreement.
     14. Pro-rations and Credits.
     a. Real property taxes and assessments with respect to the Land based upon
the latest available tax information shall be pro-rated such that Seller shall
be responsible for all such taxes and assessments levied against the portion of
Land owned by such entity to and including the day prior to the Close of Escrow
and Buyer shall be responsible for all such taxes and assessments levied against
the Land from and after the date of the Close of Escrow. If the Land is not as
of the Close of Escrow assessed as separate legal parcels, the parties shall in
good faith fairly allocate a pro-rata share of the property taxes of the larger
tax parcel of which the Land is a part based on previous tax bills.
     b. Within ninety (90) days after the Close of Escrow, (i) if any errors or
omissions are made regarding adjustments and pro-rations as set forth above, the
parties shall make the appropriate corrections promptly upon the discovery
thereof, and (ii) if any estimates are made at the Close of Escrow regarding
adjustments or pro-rations, the parties shall make the appropriate corrections
promptly when accurate information becomes available; provided that neither
party shall have the right to request apportionment or reapportionment of any
items at any time following ninety (90) days after the Close of Escrow. The
provisions of this Section 14.b shall survive the Close of Escrow.

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     15. Disbursements and Other Actions by Escrow Holder. Upon the Close of
Escrow, Escrow Holder shall promptly undertake all of the following in the
manner indicated:
     a. Escrow Holder shall cause the Warranty Deed to be recorded in the
Official Records of the County, together with any other documents that the
parties hereto may mutually direct and then immediately disburse the Purchase
Price proceeds as follows and in the following order: (i) pay all closing costs
to be paid through Escrow (including premium for the Title Policy, escrow fees
and recording charges); (ii) pay in full or the required partial release
relating to all notes secured by existing deeds of trust encumbering the
Property, if any, for the account of Seller, in accordance with separate
instructions or demands approved by Seller, (iii) after deducting closing costs
and other payments chargeable to Seller, and deducting or adding (as
appropriate) pro-rations for the account of Seller, disburse the balance of the
Purchase Price due to Seller at Close of Escrow in accordance with separate
wiring or other payment instructions delivered to Escrow Holder by Seller; and
(iv) disburse any remaining funds to Buyer in accordance with separate wiring or
other payment instructions delivered to Escrow Holder by Buyer.
     b. At Close of Escrow Holder shall (i) direct the Title Company to issue a
Title Policy to Buyer; (ii) deliver to Buyer conformed copies of the Warranty
Deed, originals of the other Seller Closing Deliveries and Buyer’s closing
statement; and (iii) deliver to Seller conformed copies of the Warranty Deed,
originals of the Buyer Closing Deliveries and Seller’s closing statement.
     16. Default.
          16.1 Seller’s Remedies Upon Buyer’s Default. If Buyer defaults under
this Agreement prior to the Close of Escrow, the sole right and remedy of
Seller, if Seller is not in default and has performed all of its obligations
hereunder which are then due, shall be to terminate this Agreement and the
Escrow, by notice to Buyer and Escrow Holder and to be paid the First Deposit,
and if made, the Second Deposit, immediately upon such termination as liquidated
damages. Buyer and Seller hereby acknowledge that actual damages in the event of
such a default by Buyer would be difficult to calculate with certainty and agree
that the First Deposit, and if made, the Second Deposit, is a reasonable
approximation of actual damages. Seller waives and covenants not to assert any
other rights and remedies for a default by Buyer. The provisions of the
preceding sentences shall not limit Seller’s right to reimbursement for its
costs and expenses incurred in enforcing this Agreement pursuant to Section 16.1
or Seller’s right to enforce any of Buyer’s indemnity or other obligations that
expressly survive the Closing or termination of this Agreement.
          16.2 Buyer’s Remedies Upon Seller’s Default. If Seller defaults under
this Agreement prior to the Close of Escrow, or any of Seller’s representations
or warranties provided herein shall prove to be false or materially untrue, the
sole rights and remedies of Buyer under this Agreement, if Buyer is not in
material default and has performed all of its material obligations hereunder
which are then due, shall be as follows:
     (a) Buyer may terminate this Agreement and the Escrow by written notice to
Seller and Escrow Holder, whereupon the Deposit (and any other sums paid by
Buyer on account of the Purchase Price) shall be promptly refunded to Buyer by
Seller or Escrow Holder, as applicable; or

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     (b) Sue for specific performance of Seller’s obligation to perform its
obligations under this Agreement; provided, however, if specific performance is
not available as a remedy for Buyer due to the intentional acts or omissions of
Seller, the Deposit (and any other sums paid by Buyer on account of the Purchase
Price) shall be promptly refunded to Buyer by Escrow Holder and Buyer shall be
entitled to recover from Seller its actual damages, (plus any reasonable
attorneys’ fees and costs incurred by Buyer to collect such damages), but shall
not be entitled to recover special, exemplary, punitive or similar damages.
     17. Right of Entry.
     a. Buyer and Buyer’s agents, representatives, consultants, contractors and
subcontractors (collectively, “Buyer’s Representatives”) shall have the right to
enter upon the Land at all reasonable times during the term of this Agreement,
in order to conduct such further investigations, tests and studies as Buyer
shall reasonably deem necessary (the “Investigations”), so long as such
activities do not unreasonably damage the Land. Prior to entry onto the Land,
Buyer shall deliver to Seller a certificate or certificates evidencing insurance
coverage for the contemplated activities on the Property has been obtained and
is in effect. Buyer shall keep the Land free and clear of any mechanic’s liens
or materialmen’s liens arising out of any such activities (and at Buyer’s sole
expense, Buyer shall immediately discharge of record or bond around any such
liens or encumbrances that are so filed or recorded, including, without
limitation, liens for services, labor or materials furnished in connection with
the activities of Buyer or Buyer’s Representatives on the Property). Further,
Buyer hereby indemnifies and holds Seller harmless from and against any and all
claims, demands, causes of action, losses, costs, liabilities and/or expenses
(including, without limitation, attorneys’ fees and disbursements) to the extent
caused by Buyer or Buyer’s Representatives in connection with any Investigations
or other activities of Buyer or Buyer’s Representatives taken with respect to
the Land and/or any liens or encumbrances filed or recorded against the Property
as a result thereof; provided, however, that notwithstanding the foregoing, in
no event shall Buyer be responsible for any environmental conditions existing on
the Land and discovered by (but not caused or exacerbated by an act or knowing
omission of) Buyer during the course of Buyer’s investigation of the Land, or
any acts of Seller or Seller’s agents. The foregoing obligation shall survive
the Close of Escrow or termination of this Agreement.
     b. During the term of this Agreement, Buyer shall:
     i. conduct any further Investigations of the Property deemed desirable by
Buyer (but the subject transaction shall not be contingent upon the results of
such Investigations);
     ii. promptly repair any damage to the Land resulting from Buyer’s
Investigations and replace, refill and re-grade any holes made by Buyer in, or
Buyer’s excavations of, any portion of the Property used for such Investigations
so that the Land shall be in substantially the same condition that it existed in
prior to such Investigations;
     iii. fully comply with all laws applicable to the Investigations and all
other activities undertaken in connection therewith;
     iv. permit Seller to have a representative present during all
Investigations undertaken hereunder;

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     v. take all actions and implement all protections reasonably necessary to
ensure that the Investigations and the equipment, materials, and substances
generated, used or brought onto the Land in connection with the Investigations
pose no threat to the safety or health of persons or the environment and cause
no damage to the Land or other property of Seller or other persons; and
     vi. furnish to Seller, at no cost or expense to Seller (but without
warranty as to accuracy, completeness or fitness for a particular purpose) and
subject to any disclaimers or limitations on reliance imposed by third party
consultants, copies of all surveys, soil test results, engineering, asbestos,
environmental and other third party studies and reports relating to the
Investigations which Buyer shall obtain with respect to the Land (Buyer shall be
relieved of this obligation if this Agreement terminates due to a breach by
Seller of a material obligation under this Agreement).
     The foregoing obligations shall survive the Close of Escrow or a
termination of this Agreement.
     c. Without limiting the foregoing, in no event shall Buyer, without the
prior written consent of Seller, which shall not be unreasonably withheld,
conditioned or delayed, make any intrusive physical testing (environmental,
geo-technical or otherwise) on the Land.
     18. Brokers. Buyer and Seller each warrant and covenant to the other that
other than Dave Mullard of Nathan & Associates (“Broker”), whose commission
shall be paid by Seller pursuant to a separate agreement, no fees or commissions
are due or owing to any finders or brokers as a result of this transaction. Any
commission payable by Seller to Broker shall be payable if and only if the
Escrow closes. In the event the Close of Escrow fails to occur for any reason,
Seller shall have no obligation to pay, and Broker shall have no right to
receive, all or any portion of the commission or any monies, including, but not
limited to, deposits paid or forfeited by Buyer. Joinder of Broker shall not be
required for any amendment or termination of this Agreement. In the event of any
other claim for brokers’ for finders’ fees or commissions in connection with the
negotiations, execution or consummation of this Agreement or the purchase and
sale of the Property, then Buyer shall indemnify, save harmless and defend
Seller from and against any such claim based upon the alleged statement,
representation or agreement by Buyer, and Seller shall indemnify, save harmless
and defend Buyer from and against any such claim based upon any alleged
statement, representation or agreement by Seller. The provisions of this Section
shall survive the Close of Escrow.
     19. Assignment. Buyer may not assign or transfer its rights or obligations
under this Agreement without the prior written consent of Seller, which consent
shall not be unreasonably withheld or delayed. Notwithstanding the foregoing,
Buyer shall have the right to assign its interest under this Agreement to any
corporation, partnership or limited liability company over which Buyer or its
principals has or have managerial control and in which Buyer or its principals
has or have a material economic interest, provided that in either instance the
assignee unqualifiedly and fully assumes all the obligations of Buyer (including
all post-closing obligations of Buyer as set forth in this Agreement) pursuant
to a fully executed assignment and assumption agreement delivered to Seller not
later than two (2) business days prior the Close of Escrow. Upon such transfer
Shopoff Advisors, L.P. shall be released of any further obligations under this
Agreement. Subject to the foregoing, this Agreement and the terms and provisions
hereof shall inure to the benefit of and be binding upon the successors and
assigns of the parties hereto.
     20. Notices. All notices or other communications required or permitted
hereunder shall be in writing, and shall be personally delivered or sent by
registered or certified mail, postage prepaid, return receipt requested,
telegraphed, delivered or sent by telecopy or reputable overnight courier (such
as

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Federal Express) and shall be deemed received upon the earlier of (i) if
personally delivered, the date of delivery to the address of the person to
receive such notice, (ii) if mailed, four (4) business days after the date of
posting by the United States post office, (iii) if sent by e-mail, when sent
(except emails delivered after 5:00 PM in the time zone of the recipient’s
office address shall be deemed delivered the next business day), (iv) if given
by fax, when sent (except emails delivered after 5:00 PM in the time zone of the
recipient’s office address shall be deemed delivered the next business day), or
(v) if sent by reputable overnight courier (such as Federal Express, DHL or
Overnight Express), one (1) business day after deposit with the overnight
delivery service. Any notice, request, demand, direction or other communication
sent by fax or e-mail must be confirmed within forty-eight (48) hours by letter
mailed or delivered in accordance with the foregoing. The addresses of Buyer,
Seller and Escrow Holder are as follows:

                  To Seller:   Azpro Developments, Inc.         c/o The Johnson
Group         25455 0 32 Ave,         Aldergrove, British Columbia, V4W 2A2
 
      Canada    
 
      Attention:   Terry Johnson
 
      Telephone:   (604)-309-3443
 
      Facsimile:   (604)-552-0109
 
      Email:   t.r.johnson@shaw.ca
 
                With a copy to:   James F. Byrne, Jr., Esq.         Byrne &
Shaw, PLLC         21111 East Highland Avenue, Suite 215         Phoenix,
Arizona 85016
 
      Telephone:   (602) 522-8147
 
      Facsimile:   (602) 522-8145
 
      Email:   jfb@jbyrnelaw.com
 
                To Buyer:   c/o Shopoff Advisors, L.P.         8951 Research
Drive         Irvine, California 92618
 
      Attention:   Mr. Tim McSunas
 
      Telephone:   (949) 417-9945
 
      Facsimile:   (949) 417-1399         tmcsunas@shopoff.com
 
                With a copy to:   Gromet & Associates         114 Pacifica,
Suite 250         Irvine, California 92618
 
      Attention:   Stevan J. Gromet, Esq.
 
      Telephone:   (949) 261-1110
 
      Facsimile:   (949) 261-1818         sjgromet@grometlaw.com
 
                To Escrow Holder:   to the address given at the top of page 1
hereof

     Notices given by counsel to a party in accordance with the above shall be
deemed given by such party.

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     21. Required Actions of Buyer and Seller. Buyer and Seller shall execute
all instruments and documents and take all other actions that may be reasonably
required in order to consummate the purchase and sale herein contemplated, and
shall use commercially reasonable efforts to accomplish the Close of Escrow in
accordance with the provisions hereof.
     22. Partial Invalidity. If any term or provision of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
such term and provision of this Agreement shall be valid and be enforced to the
fullest extent permitted by law.
     23. Waivers. No failure or delay of either party in the exercise of any
right or remedy given to such party hereunder or the waiver by any party of any
condition hereunder for its benefit (unless the time specified in this Agreement
for exercise of such right or remedy has expired) shall constitute a waiver of
any other or further right or remedy nor shall any single or partial exercise of
any right or remedy preclude other or further exercise thereof or any other
right or remedy. No waiver by either party of any breach hereunder or failure or
refusal by the other party to comply with its obligations hereunder shall be
deemed a waiver of any other or subsequent breach, failure or refusal to so
comply.
     24. Professional Fees. Subject to the provisions of Section 16 hereof, in
the event of the bringing of any action or suit by either party against the
other by reason of any breach of any of the covenants, representations or
warranties of the other party under this Agreement, the prevailing party shall
be entitled to have and recover of and from the other party all costs and
expenses of the action or suit, including, without limitation, actual attorneys’
fees, accounting and engineering fees, and other professional fees resulting
therefrom.
     25. Entire Agreement; Amendment. This Agreement (including all recitals,
exhibits and schedules attached hereto) is the final expression of, and contains
the entire agreement between, the parties with respect to the subject matter
hereof and supersedes all prior understandings with respect thereto. This
Agreement may not be modified, changed, or supplemented, nor may any obligation
hereunder be waived, except by written instrument signed by the party to be
charged or by its agent duly authorized in writing or as otherwise expressly
permitted herein. The parties do not intend to confer any benefit hereunder on
any person, firm or corporation other than the parties hereto. Any standard form
escrow instructions required by Escrow Holder shall be construed as applying
principally to Escrow Holder’s employment, and if there are conflicts between
the terms of this Agreement and the terms of such standard form escrow
instructions, the terms of this Agreement shall control.
     26. Time of the Essence. Time is of the essence with respect to each and
every provision of this Agreement. Whenever any action must be taken (including
the giving of notice or the delivery of documents) under this Agreement during a
certain period of time (or by a particular date) that ends (or occurs) on a
non-business day, then such period (or date) shall be extended until the next
succeeding business day. As used herein, the term “business day” shall mean any
day, other than a Saturday or Sunday, that Escrow Holder is open for business.
     27. Construction of Agreement. Headings at the beginning of each section
and subsection of this Agreement are solely for the convenience of the parties
and are not a part of this Agreement. Whenever required by the context of this
Agreement, the singular shall include the plural and the masculine shall include
the feminine and vice verse. This Agreement shall not be construed as if it had
been prepared by one of the parties, but rather as if both parties had prepared
the same. Unless otherwise indicated, all references to sections and subsections
are to sections and subsections in this Agreement. All recitals, exhibits and
schedules referred to in this Agreement are attached and incorporated by this
reference.

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     28. Third Parties. Nothing in this Agreement, whether expressed or implied,
is intended to confer any rights or remedies under or by reason of this
Agreement upon any other person other than the parties hereto and their
respective permitted successors and assigns, nor is anything in this Agreement
intended to relieve or discharge the obligation or liability of any third
persons to any party to this Agreement, nor shall any provision give any third
parties any right of subrogation or action over or against any party to this
Agreement. This Agreement is not intended to and does not create any third party
beneficiary rights whatsoever.
     29. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document.
     30. Survival of Obligations. All of Buyer’s and Seller’s representations
and warranties in this Agreement shall survive the Close of Escrow for a period
of one (1) year; covenants of the parties expressly stated to survive the Close
of Escrow shall survive until the obligations in question are discharged. All
other obligations of Seller or Buyer not expressly stated to survive the Close
of Escrow or not stated in the exhibit documents to be delivered upon the Close
of Escrow shall be deemed discharged upon the Close of Escrow and the
recordation of the Warranty Deed.
     31. Governing Law. The parties expressly agree that this Agreement shall be
governed by, interpreted under, and construed and enforced in accordance with
the laws of the State of Arizona, without resort to conflict of law principles.
     32. Venue. Buyer and Seller hereby agree that the proper venue for any
legal proceedings arising out of this Agreement shall be Maricopa County,
Arizona.
     33. Satisfaction of Fees Due Core Group Engineering Consultants. The
parties acknowledge that Core Group Engineering Consultants (“Core”) performed
engineering and related consulting services to Seller in connection with the
planned development of the Property and that Core is owed $100,000 for such
services (the “Core Receivable”). Seller shall cause Core to submit into Escrow
(and to concurrently provide a copy to Buyer), prior to the Close of Escrow, a
written demand (with a copy of the unpaid invoices attached) by which Core shall
represent to Buyer that the Core Receivable constitutes the entire amount owed
by Seller to Core in connection with services rendered by Core to Seller with
respect to the Property. Seller hereby instructs Escrow Holder to pay, out of
Seller’s proceeds of sale, the amount of the Core Receivable to Core It is
agreed that Buyer shall have no obligation or responsibility for the payment of
the Core Receivable, and that Seller’s payment of the Core Receivable in full
prior to or upon the Close of Escrow is a material consideration to Buyer to
purchase the Property.
     34. Valencia Water Company Offsite Extension Agreement — Reimbursement. As
of the Close of Escrow, Seller will have paid the Valencia Water Company the
amount of Two Million Five Hundred Eighty Six Thousand Five Hundred Dollars
($2,586,500.00) pursuant to the Valencia Offsite Agreement and the Letter
Agreement. To obtain water service to the Property the ultimate developer(s) of
the Property will be required to enter into a Water Facilities Onsite Extension
Agreement (the “Valencia Onsite Agreement”) with the Valencia Water Company, or
its successors and assigns.
          Pursuant to the Valencia Offsite Agreement and the Letter Agreement,
the payments made by Seller towards offsite facilities pursuant to the Valencia
Offsite Agreement

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shall be subject to the same refunding terms described within the Valencia
Onsite Agreement. Essentially, once all such facilities are conveyed to the
Valencia Water Company, refunds to Participants, including Seller, under the
Valencia Offsite Agreement and the Valencia Onsite Agreement shall begin in Year
4 from the date of such conveyance and shall continue annually for 22 years.
Seller discloses to Buyer that Seller is entitled to a refund from the Valencia
Water Company the entire amount of Two Million Five Hundred Eighty Six Thousand
Five Hundred Dollars ($2,586,500.00) paid by Seller pursuant to the Valencia
Offsite Agreement and the Letter Agreement (the “Refund Amount”), in accordance
with the refunding terms described in the Valencia Offsite Agreement, the Letter
Agreement and the Valencia Onsite Agreement, notwithstanding that Seller will
not be the ultimate developer of the Property. At the Closing Buyer and Seller
shall execute a letter to the Valencia Water Company, substantially in the form
attached hereto as Exhibit “E”, confirming Seller’s entitlement to the entire
Refund Amount, which letter shall be delivered to the Valencia Water Company by
Escrow Holder immediately following the Close of Escrow.
          Buyer will give Seller (and cause its successor-in-interest to give
Seller) written notice of execution of the Valencia Onsite Agreement within ten
(10) days of execution of such agreement by Buyer (or its
successor-in-interest).
          Buyer’s obligations under and the provisions of this Section 34 shall
survive the Closing.
     35. IRS Real Estate Sales Reporting. Buyer and Seller hereby appoint Escrow
Agent as, and Escrow Holder agrees to act as, “the person responsible for
closing” the transaction which is the subject of this Agreement pursuant to
Internal Revenue Code Section 6045(e). Escrow Holder shall prepare and file all
informational returns, including without limitation, IRS Form 1099-S and shall
otherwise comply with the provisions of Internal Revenue Code Section 6045(e).
Escrow Holder agrees to comply with the provisions of Executive Order 13224
regarding the Specially Designated Nationals Blocked Persons list. Escrow Holder
shall indemnify, protect, hold harmless and defend Seller, Buyer and their
respective attorneys for, from and against any and all claims, actions, costs,
loss, liability or expense arising out of or in connection with the failure of
Escrow Holder to comply with the provisions of this Section 35.
     36. 1031 Exchange(s). Buyer agrees to cooperate with Seller if Seller
elects to consummate the transaction set forth in this Agreement as a “like-kind
exchange” within the purview and meaning of section 1031 of the Internal Revenue
Code of 1986, as amended (a “1031 Exchange”), including, without limitation,
executing documents reasonably requested by such entity or entities to
effectuate such 1031 Exchange which are in form and content acceptable to Buyer;
provided, however, that:
     a. Buyer’s right to purchase the Property shall not be conditioned upon the
consummation of the 1031 Exchange;
     b. In no event shall Seller be relieved from liability under this Agreement
or any other escrow instructions, exhibits or documents to be executed in
connection herewith;

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     c. The consummation of the 1031 Exchange shall be at no liability, risk or
expense to Buyer;
     d. The consummation of the 1031 Exchange shall not delay or extend the
Close of Escrow; and
     e. Buyer shall not be obligated to take title to any real or personal
property other than the Property.
     37. Interstate Land Sales Full Disclosure Act. To assure that Seller’s
operations qualify for exemption from the Interstate Land Sales Full Disclosure
Act (the “Land Sales Act”), Buyer represents and warrants that (i) Buyer is a
duly organized and validly existing business entity; (ii) Buyer is purchasing
the Land for its own use and development in the ordinary course of its business;
(iii) Buyer has been represented in the negotiations regarding the subject
purchase by a representative of its own choosing; (iv) Buyer does not intend for
this transaction to be subject to the Land Sales Act; and (v) Buyer has
personally inspected the Land prior to the execution of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Purchase and Sale Agreement
and Joint Escrow Instructions as of the date first above written.

          SELLER: AZPRO DEVELOPMENTS, INC., an Arizona corporation
      By:   /s/ Terry Johnson         Name:   Terry Johnson        Title:  
President      BUYER: SHOPOFF ADVISORS, L.P., a Delaware limited partnership    
          By:   The Shopoff Corporation, a Delaware corporation, its        
General Partner   

            By:   /s/ William A. Shopoff         Name:   William A. Shopoff     
  Title:   President and CEO   

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ESCROW HOLDER APPROVES THE ESCROW PROVISIONS AND SPECIFIC INSTRUCTIONS TO ESCROW
HOLDER SET FORTH IN THE FOREGOING AGREEMENT AND AGREES TO ACT IN ACCORDANCE
THEREWITH. SPECIFICALLY, ESCROW HOLDER UNDERSTANDS, ACKNOWLEDGES AND AGREES TO
THE PROVISIONS OF SECTION 35 ABOVE.

              FIRST AMERICAN TITLE INSURANCE COMPANY    
 
           
By:
  /s/ Neil Moffett       Date: June 29, 2009
 
           
 
  Neil Moffett, Escrow Officer        

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