Sealed Bid Offering
The Retail Division of New West Petroleum, LLC, New West Petroleum S.D. 1, Inc., New West Petroleum S.D. 2, Inc. and New West Petroleum L.P. (collectively “Seller”) is offering to sell thirty (30) operating convenience stores with gasoline stations including twenty-two (22) fee-owned properties, seven (7) leasehold properties and one (1) fee/leasehold combination. In addition there are two (2) fee owned undeveloped parcels. Twenty-nine properties are located in the San Diego market area and three in Northern California collectively (the “Properties”). Properties are available by sealed-bid sale on Tuesday, July 22, 2008. NRC Realty Advisors, LLC and its subsidiary; NRC Realty Advisors of California, Inc. (“NRC”) is coordinating the offering for the Seller.
Bid Deadline
NRC must receive all bids by Tuesday, July 22, 2008, 5:00 pm Central Time (the “Bid Deadline”). All bids must be sent to:
NRC Realty Advisors, LLC
363 W Erie Street, Suite 300E
Chicago, IL 60610
ATTN: SEALED BID SALE 810
Terms and Conditions of Sale
Sale of the Properties is subject to the terms and conditions outlined herein (the “Terms and Conditions of Sale”), in the Property Specific Package (“PSP”) for each Property and the Purchase and Sale Agreement (collectively referred to herein as the “PSA”) for each Property. In the event of a conflict between the Terms and Conditions of Sale and the PSA, the provisions of the applicable PSA will control.
Confidentiality
All information contained in the PSP and Bid Package is confidential and must be kept confidential by each person and entity receiving that information (each, “Receiving Party”). By ordering a PSP or receiving a Bid Package, these persons and entities agree to this confidentiality. However, the Receiving Party may disclose information obtained from the PSP and Bid Package, on a “need-to-know” basis, to the following persons and entities, as long as those persons and entities agree to keep that information confidential: (a) the employees, officers and directors of the Receiving Party or their affiliates, (b) third parties who are performing investigations and analyzing information to advise the Receiving Party regarding its bids, and (c) third parties providing a Receiving Party with financing for the purchase of a Property. These confidentiality provisions will terminate as to a Receiving Party only if and when it consummates its purchase of the Property.
Site Inspections
Properties may be inspected during normal business hours from 8:00 am to 5:00 pm local time. The store managers and employees have been instructed to refer any questions from a prospective bidder directly to NRC. UNDER NO CIRCUMSTANCES MAY PROSPECTIVE BIDDERS ASK QUESTIONS OF STORE MANAGERS OR STORE EMPLOYEES. BIDDERS VIOLATING THIS REQUIREMENT MAY BE DISQUALIFIED FROM BIDDING.
Bidder's Performance of Due Diligence
Bidders must perform their own independent due diligence before bidding.
Branding and Supply Agreement
These sites are being sold without a fuel brand or fuel supply agreement, and buyers are responsible for obtaining fuel supply.
Currently, most sites are branded Exxon on a month-to-month basis and buyers shall remove Exxon trade dress at closing.
Estimated Inventory Value
Not less than seven (7) days prior to the anticipated Closing Date, Seller or NRC shall deliver by facsimile to Buyer an estimated value of the Inventory (the “Estimated Inventory Value”). Buyer shall deposit with NRC one hundred ten percent (110%) of the Estimated Inventory Value at least five (5) days prior to the Closing Date by wire transfer of immediately available funds (the “Inventory Deposit”). Failure to make the Inventory Deposit as set forth herein shall be considered a default under the PSA and may result in the forfeiture of the Earnest Money Deposit, in Seller’s complete and sole discretion.
Actual Inventory Value
A physical inventory and audit of all the Inventory on hand at the Property (the “Audit”) shall be conducted on the Closing Date or substantially contemporaneous therewith, by an auditor designated by Seller. Buyer is required to purchase all of the Inventory. The cost of the Audit shall be divided equally between the parties and shall be paid at the Closing. Any difference between the Estimated Inventory Value and the actual value of Inventory, as determined by the Audit (the “Actual Inventory Value”) may result in additional amounts due from Seller or Buyer. The appropriate party must remit such additional amounts to NRC within five (5) days following the Closing Date.
Point of Sale systems (POS) and Vendor Owned Equipment
All proprietary data from the POS system, the back office, and any vendor owned equipment may be removed by Seller or Vendor at closing.
PSP Information
A Property Specific Package (“PSP”) for each property is available from NRC that contains site specific due diligence information as described below, as available. Prior to receiving a PSP each prospective bidder is required to deliver to NRC a signed Confidentially Agreement. PSP’s can be ordered by calling NRC’s customer service center at 800.747.3342, extension 810. Each PSP is available at a cost of $35 per hard copy and $25 per CD ROM (including 2-day shipping).
Five year Fuel Sales (gallons) and 2008 YTD (displayed monthly)
Five year Retail Sales and 2008 YTD (displayed monthly)
Environmental Information
Tank and line configurations, sizes & type
Remediation reports on sites in remediation; no further action letters
Tank and line tightness reports
Current title reports
Permits and Licenses (where available)
ALTA/ACSM survey (where available)
Bid Package and Bid Deposit
A Bid Package will be included in each PSP. The Bid Package contains the PSA to be signed and returned to NRC, the sealed-bid envelope for the PSA, and instructions on how to complete and return bids to NRC. In order for a bid to be conforming, it must contain (a) a certified or cashiers check or money order in the amount of 2.5% of the bid price made payable to NRC Realty Advisors, LLC, (b) a fully signed and initialed PSA with Exhibit A (Legal Description), and (c) a completed Bidder Qualification Worksheet and Certification.
Bid Format
Bids must be made on the PSA forms provided in the PSP. No other method of bidding is acceptable. Purchase of gasoline, merchandise inventory and Buyers Premium at closing are in addition to the purchase price.
Bid Deposit
An initial bid deposit of 2.5% of the bid price (the “Bid Deposit”) must be included with each bid. Bid Deposits must be in the form of a certified or cashier’s check or money order made payable to NRC Realty Advisors, LLC. Bids that are received without a Bid Deposit will not be considered. Successful bidders will be required to increase the amount of the Bid Deposit to 10% of the purchase price (the “Additional Escrow Deposit”) by certified or cashier’s check or money order within two business days of written notification from NRC of Seller’s acceptance of their bid. The Bid Deposit and the Additional Escrow Deposit shall collectively be referred to herein as the “Earnest Money Deposit”. NRC shall deliver all Earnest Money Deposits to the Escrow Holders identified in the PSA. NRC reserves the right to allocate any excess Bid Deposits toward the Additional Escrow Deposit requirement. NRC will return Bid Deposits for unsuccessful bids by certified mail approximately ten (10) business days after the Bid has been rejected.
Evaluation and Award of Bids
Seller will review all bids received by the Bid Deadline. After consideration of bids, Seller, in its sole and absolute discretion, will select the successful bidders. Seller reserves the right to review additional financial information concerning the Buyer, and information confirming the Buyer’s ability to close the sale. Seller shall use good faith efforts to accept or reject bids within ten (10) business days after the Bid Deadline. All sales will be final, upon Seller’s acceptance of the bid.
Prohibition on Withdrawing Bids
Sealed bids will be considered purchase offers in effect as of the Bid Deadline and will remain in effect for seven (7) business days thereafter, unless amended prior thereto by a BAFO. BAFOs shall be considered purchase offers in effect as of the date the BAFO is received by NRC and for seven (7) business days thereafter. Purchase offers may not be revoked or withdrawn by the bidder during such time periods.
Effective Date of Award of Bid
The effective date of the award of the bid will be the date that Seller signs the PSA. Since time is of essence, NRC will notify successful bidders of the award via facsimile. The fully executed PSA will be sent subsequently by mail.
Seller's Reservation of Rights
Seller reserves the right, in its sole discretion, to decline any bid, postpone, extend, or cancel the Bid Deadline, and withdraw any Property from the sealed-bid sale at any time without notice. Seller further reserves the right, in its sole discretion, without notifying any other bidder, giving any other bidder similar opportunity, or re-offering the subject Property, to negotiate with any bidder the terms of its bid; to overlook minor inconsistencies or nonconformance in any bid; to extend any deadlines for any Property; and to accept the bid that Seller considers in its best interest, whether or not it is the highest purchase price. Seller may require verification of funds available to close on offers before accepting any bid.
Closing Dates and Transfer of Possession
Successful bidders for the Properties will be required to close escrow no later than 45 days after the date that escrow was opened, provided that Seller shall have the right to extend the closing date up to an additional 30 days. Seller will set the date and time of closing, in its sole discretion. Possession of the Properties will be transferred upon the escrow closing.
Transfer of Title
All Properties will be conveyed with marketable title. Seller will provide title free and clear of monetary liens, except non-delinquent real estate taxes and subject to permitted exceptions, as outlined in the PSA. The Buyer pays for title insurance coverage. Real estate taxes will be current to the date of closing. All Properties will be conveyed “AS IS, WHERE IS, WITH ALL FAULTS,” regarding any conditions affecting the Properties, with no representations or warranties, except for those stated in the PSA.
Environmental Matters
All Properties are conveyed "AS IS, WHERE IS, WITH ALL FAULTS," regarding environmental conditions affecting the Properties, with no representation or warranties except as those set forth in the PSA. Seller will provide a current Phase 1 Environmental Site Assessment (“ESA”) at each site before the Closing Date. The Buyer will reimburse Seller approximately $3,000 for the cost of the ESA at closing. Environmental matters are addressed in the PSA. Bidders should review these provisions carefully. Buyer or any of their affiliates or representatives will not be permitted to perform any soil or ground water tests prior to closing. The successful buyers shall be responsible for environmental contamination identified after the closing.
INDEMNITIES ON SITES CURRENTLY IN REMEDIATION (EQUILON)
Certain locations are currently being remediated by Equilon (Shell Oil), and those sites are identified in the PSPs. Equilon has indemnified the Seller on those sites, and Equilon’s indemnity and obligation to clean-up those sites are at its sole expense until a No further Action letter is obtained from the State of California. The Equilon Indemnity will be transferred to the buyer at closing. The indemnity relates to specific releases on certain sites identified in the PSP packages, and copies of the Indemnification Agreement are in the PSP packages.
INDEMNITIES ON SITES CURRENTLY IN REMEDIATION OR WITH REPORTED RELEASES (SELLER)
Certain locations have had reported releases or are currently being remediated by the Seller, and those sites are identified in the PSPs. The Seller will indemnify the buyer for those sites, and clean-up those sites at its sole expense until a No further Action letter is obtained from the State of California. These sites have been qualified or being considered for inclusion into the California Underground Storage Tank Clean-up fund, and Seller is currently receiving reimbursements for the clean-up of certain sites. Seller’s post closing Indemnity relates to specific releases for certain sites identified in the PSP packages, and copies of the Indemnification Agreement are in the PSP packages.
OTHER SITES (NO RELEASES-NFA)
Certain sites have had no reported releases, or have a No Further Action letter a copy of which will be in the PSP for those sites. Buyer is purchasing those sites ‘as is-where is’ and will be responsible for any discovered contamination post closing.
EVR Upgrade
A number of the Properties located in California have to comply with the EVR Phase II requirements as specified in CARB certification procedure CP-201 and incorporated by reference under the California Code of Regulations §94011 (the “EVR Upgrade”) by April 2009 at buyer’s sole expense. Seller estimates the range of costs for the performance of the EVR Upgrade to be from Thirty Seven Thousand ($37,000) to Ninety Two Thousand ($92,000) for most properties. Buyers must perform their own independent cost estimates, and should consult with their own contractors prior to bidding.
Change of Successful Bidder's Entity and/or Operating Entity
Successful bidders will be accorded a fifteen (15) day grace period to change their buying entity and/or operating entity upon notification of the award of bids. After expiration of the grace period, any change in the buying entity and/or operating entity will require Seller approval, the payment by successful bidder of $1,000 each (“Assignment Processing Fee”) due at the time successful bidder submits the change of entity to NRC, and, at Seller’s sole discretion.
Licenses, Permits, and Authorization
The successful bidder must obtain, at its expense, any licenses, permits and authorizations (collectively, “Licenses”) required to acquire, manage, develop, and operate the Property.
Buyers Premium
The Buyer shall pay, in addition to the purchase price, an amount equal to 5% of the purchase price of the Property at closing.
Broker Cooperation
If a Buyer utilizes a Real Estate Broker other than NRC for this transaction, that Buyer is solely responsible for the payment of any commission due to that Broker.
Amendments
Seller reserves the absolute right, in its sole discretion, to amend the Terms and Conditions of Sale, the PSA, and any other sale documents or closing document.
1031 Tax Deferred Exchange
All successful bidders may be required to execute (in a form acceptable to Seller) before closing.
Disclaimer
Seller and NRC and their respective members, directors, officers, employees, agents, subsidiaries, and affiliates (collectively, “Representatives”), disclose that they may not have complete knowledge of the physical or economic characteristics of the Properties being sold. Accordingly (except as otherwise specifically stated in the PSA), Seller and NRC, and their Representatives disclaim any warranty, guaranty or representation, express or implied, concerning (a) the condition or state of repair of the Properties, including, without limitation, any condition arising in connection with the generation, use, transportation, storage, release, or disposal of petroleum products, toxic or hazardous substances, on and under, above, upon, or in the vicinity of the Properties, and its impact on water, soil and geology, (b) the suitability of the Properties and their water, soil and geology for any activities and use that the Buyer may elect to conduct; (c) the extent of any right of way, lease, possession, lien, encumbrance, easement, license, reservation, or condition in connection with the Properties; (d) the compliance of the Properties or their operation with any applicable laws, ordinances, or regulations of any government or other body, including without limitation, compliance with any land use, Americans with Disabilities Act, wetland, or zoning law or regulation, or applicable environmental or coastal laws, rules, ordinances, and regulations; (e) title to or the boundaries of the Properties; and (f) the physical condition of the Properties, including, without limitation, the structural, mechanical and engineering characteristics of the improvements to the Properties. Except as stated above and as set forth in the PSA, the sale of the Properties is on an “AS IS, WHERE IS, WITH ALL FAULTS,” basis. The Buyers expressly agree that Seller and NRC and their Representatives make no warranty or representation, express or implied, or arising by operation of law, including, without limitation, any warranty of condition, habitability, or merchantability or fitness for a particular purpose, with respect to the Properties. The Buyers will buy the Properties based on their own investigations. By accepting title to any Property, the Buyers acknowledge that they have conducted any investigation that they have considered necessary or advisable and that they are not relying upon any representations of Seller, NRC or either of their Representatives. The materials and information concerning the Properties contained in this sales brochure, postcards, other brochures, the PSP, and the Bid Package, and any other information provided by Seller and NRC or their Representatives, is based in part upon information and materials obtained from sources considered reliable, without independent verification. Bidders must not base their bids upon that information or environmental studies, repair estimates, other studies, or pro-forma and financial information that Seller or NRC provides, but must rely solely on their own estimates and studies. No warranty or representation, express or implied, is made by Seller, NRC, or either of their Representatives, as to the accuracy or completeness of the information provided to bidders.
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