OPTION AGREEMENT
EXHIBIT 10.10
This Option Agreement is entered into as of the 3rd day of October, 2005 by and among Xxxxxxxx
Properties Continental, L.L.C. (“Continental”) and Xxxxxxx X. Xxxxxxxx.
RECITALS
A. Continental owns a 12.5% undivided interest (the “Interest”) in a Challenger 300, Serial
Number 20036, FAA Registration Number N516FX (the “Aircraft”) through Bombardier Aerospace
Corporation (“FlexJet”), pursuant to that certain Purchase Agreement between FlexJet and
Continental dated March 15, 2005 and Management Agreement between FlexJet and Continental dated
March 15, 2005 (collectively, the “FlexJet Agreements”).
B. Continental desires to grant Xx. Xxxxxxxx an Option (as hereinafter defined), subject to
the terms of this Option Agreement, to purchase the Interest.
NOW, THEREFORE, in consideration of the premises and the covenants and agreements set forth
herein, for good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, Continental and Xx. Xxxxxxxx hereby agree as
follows:
1. Option. Continental hereby grants Xx. Xxxxxxxx a non-transferable and irrevocable
option (the “Option”) to acquire, subject to the terms, conditions and delivery obligations set
forth herein, all right, title and interest in the Interest.
2. Exercise.
a. Xx. Xxxxxxxx may exercise the Option at any time on or before three years after the date of
the earlier to occur of Xx. Xxxxxxxx’ death, disability, or termination of his employment with
Xxxxxxxx Properties Trust as Chairman of the Board without “Cause” or after a “Change of Control”
as such terms are defined in the Third Amended and Restated Employment Agreement, dated as of
January 1, 2004, as amended, between Xxxxxxxx Properties Trust and Xx. Xxxxxxxx. The date when the
Option is exercised is herein called the “Exercise Date.” The Option may be exercised by the
delivery of written notice (the “Exercise Notice”) to Continental prior to the expiration of the
Option.
b. The closing of the transaction contemplated hereby (the “Closing”) shall take place within
ten days after the delivery of the Exercise Notice to Continental. The date of the Closing is
herein referred to as the “Closing Date.”
3. Conditions to Closing.
a. Continental’s obligation to consummate the transactions contemplated to occur on the
Closing Date is subject to the satisfaction or waiver by Continental of each condition precedent
listed below.
i. Delivery of a certificate to Continental, executed by Xx. Xxxxxxxx, dated the Closing Date,
certifying as to the representations and warranties of Xx. Xxxxxxxx under this Option Agreement
being true, complete and correct in all material respects as of the Closing Date
and the performance in all material respects of all agreements and covenants contained herein required to
be performed by Xx. Xxxxxxxx on or prior to the Closing Date;
ii. Receipt by Continental of $100,000 (the “Exercise Price”) from Xx. Xxxxxxxx; and
iii. Receipt by Continental of consent for the transfer of the Interest from FlexJet if
required by Flexjet.
b. Xx. Xxxxxxxx’ obligation to consummate the transactions contemplated to occur on the
Closing Date is subject to the satisfaction or waiver by Xx. Xxxxxxxx of each condition precedent
listed below.
i. Delivery of a certificate to Xx. Xxxxxxxx, executed by an officer of Continental, dated the
Closing Date, certifying as to the representations and warranties of Continental under this Option
Agreement being true, complete and correct in all material respects as of the Exercise Date and the
performance in all material respects of all agreements and covenants contained herein required to
be performed by Continental on or prior to the Closing Date;
ii. Receipt by Xx. Xxxxxxxx of the Interest and all documents, duly authorized, executed and
delivered, necessary to deliver unencumbered title in the Interest to Xx. Xxxxxxxx;
iii. Xx. Xxxxxxxx shall have received consent for the transfer of the Interest from FlexJet;
and
iv. The terms of the FlexJet Agreements have not been materially and adversely amended in
connection with the transfer of the Interest.
c. The obligations of Continental and Xx. Xxxxxxxx are each subject to the satisfaction of
each condition listed below.
i. No governmental body, arbitrator or mediator shall have issued an order, injunction,
judgment, decree, ruling or assessment that shall then be in effect restraining or prohibiting the
completion of the transactions contemplated hereby nor shall any order, injunction, judgment,
decree, ruling or assessment be pending or, to either party’s knowledge, threatened.
ii. The transactions contemplated by this Option Agreement shall not be in contravention of
any applicable law, order or judgment.
iii. All necessary consents, approvals, licenses, permits, orders and authorizations of, or
registrations, declarations and filings with, any governmental authority or of or with any other
person with respect to any of the transactions contemplated hereby shall have been duly obtained or
made to the extent required on or before the date hereof and, when made, shall be in full force and
effect.
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4. Representations and Warranties.
a. Continental represents and warrants to Xx. Xxxxxxxx as of the date hereof and as of the
Closing Date as follows:
i. Ownership. Continental is the owner of the Interest free and clear of all liens,
security interests, pledges, claims, liabilities and restrictions of any nature whatsoever. On the
Exercise Date, Xx. Xxxxxxxx will acquire good and marketable title to the Interest from Continental
free and clear of any liens, security interests, encumbrances and restrictions of any nature
whatsoever, except for restrictions imposed by the FlexJet Agreements.
ii. Organization. Continental is a limited liability company duly organized and
validly existing under the laws of the State of Delaware and is in good standing. Continental has
all corporate power and authority to execute, deliver and perform its obligations under this Option
Agreement.
iii. Authorization. This Option Agreement has been duly authorized, executed and
delivered by Continental and is a valid and binding obligation of Continental enforceable against
Continental in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and similar laws relating to or affecting
creditors’ rights generally and by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in law or in equity).
iv. No Conflicts. The execution, delivery and performance of this Option Agreement
and the consummation of the transactions contemplated by this Option Agreement do not and will not
conflict with or result in any breach of any of the terms, conditions or provisions of, or
constitute a default under (a) Continental’s certificate of organization or limited liability
company agreement (each as amended to date and presently in effect), (b) any agreement or other
instrument to which Continental is a party or by which it or any of its properties is bound and
which conflict, breach or default would have a material adverse effect upon Continental, its
assets, properties, business or condition (financial or otherwise) or (c) any decree, judgment,
order, statute, rule or regulation applicable to Continental.
v. No Consents. No consent, approval, order, authorization or waiver from, notice to
or declaration, registration or filing with any governmental authority or any other person is
necessary in connection with the execution, delivery and performance by Continental of this Option
Agreement or the consummation of the transactions contemplated hereby other than the consent of
FlexJet.
vi. Condition. To the knowledge of Continental, the Aircraft is in good working order
and repair and have a valid Certificate of Airworthiness issued by the Federal Aviation
Administration with all airworthiness directives and inspections current.
vii. No Defaults. To the knowledge of Continental, no defaults of FlexJet or
conditions which, with the passage of time or giving of notice or both, would constitute defaults
of FlexJet exist under the FlexJet Agreements.
viii. Inspection. To the knowledge of Continental, the Aircraft will have been
inspected and maintained within the preceding 12 month period (or such shorter period to the
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extent the Aircraft is less than 12 months old) in accordance with the provisions of FAR Part 91, with all
applicable requirements for maintenance and inspection thereunder complied with.
b. Xx. Xxxxxxxx represents and warrants to Continental as of the date hereof and as of the
Closing Date as follows:
i. Enforceability. This Option Agreement has been executed and delivered by Xx.
Xxxxxxxx and is a valid and binding obligation of Xx. Xxxxxxxx enforceable against Xx. Xxxxxxxx in
accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally
and by general equitable principles (regardless of whether such enforceability is considered in a
proceeding in law or in equity).
ii. No Conflicts. The execution, delivery and performance of this Option Agreement
and the consummation of the transactions contemplated by this Option Agreement do not and will not
conflict with or result in any breach of any of the terms, conditions or provisions of, or
constitute a default under (a) any agreement or other instrument to which Xx. Xxxxxxxx is a party
or by which he or any of his properties is bound and which conflict, breach or default would have a
material adverse effect upon Xx. Xxxxxxxx, his assets, properties, business or condition (financial
or otherwise) or (c) any decree, judgment, order, statute, rule or regulation applicable to Xx.
Xxxxxxxx.
iii. No Consents. No consent, approval, order, authorization or waiver from, notice
to or declaration, registration or filing with any governmental authority or any other person is
necessary in connection with the execution, delivery and performance by Xx. Xxxxxxxx of this Option
Agreement or the consummation of the transactions contemplated hereby.
5. Miscellaneous.
a. Assignment. Neither this Option Agreement nor the Option may be assigned without
the prior written consent of Xx. Xxxxxxxx.
b. Expenses. Continental and Xx. Xxxxxxxx shall each pay their own fees and expenses
incurred in connection with this Option Agreement and the transactions contemplated hereby.
c. Specific Performance. Each party hereto acknowledges and agrees that the other
party hereto would be irreparably damaged if any provision of this Option Agreement is not
performed in accordance with its specific terms or is otherwise breached. Accordingly, each party
hereto agrees that the other party hereto will be entitled to an injunction or injunctions to
prevent breaches of the provisions of this Option Agreement and to specifically enforce this Option
Agreement and its terms and provisions in any action instituted in any court of the United States
or any state thereof having jurisdiction over the parties in the matter subject to Section
5.e. hereof, in addition to any other remedy to which they may be entitled, at law or in
equity.
d. Further Assurances. Each of Continental and Xx. Xxxxxxxx agrees to take such
actions and execute and deliver such other documents or agreements as may be necessary or desirable
for the implementation of this Option Agreement and the consummation of the transactions
contemplated hereby.
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e. Submission to Jurisdiction; Consent to Service of Process.
i. The parties hereto hereby irrevocably submit to the exclusive jurisdiction of any federal
or state court located within the County of Dallas, State of Texas, over any dispute arising out of
or relating to this Option Agreement or any of the transactions contemplated hereby and each party
hereby irrevocably agrees that all claims in respect of such dispute or any suit, action or
proceeding related thereto shall be heard and determined in such courts. The parties hereby
irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may
now or hereafter have to the laying of venue of any such dispute brought in such court or any
defense of inconvenient forum for the maintenance of such dispute. Each of the parties hereto
agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.
ii. Each of the parties hereto hereby consents to process being served by any party to this
Option Agreement in any suit, action or proceeding by the mailing of a copy thereof in accordance
with the provisions of Section 5.f. hereof.
f. Notices. Any notice, request, demand or other communication required or permitted
to be given to a party pursuant to the provisions of this Option Agreement will be in writing and
will be effective and deemed given under this Option Agreement on the earliest of: (a) the date of
personal delivery, (b) the date of transmission by facsimile, with confirmed transmission and
receipt, (c) two (2) days after deposit with a nationally-recognized courier or overnight service
such as Federal Express, or (d) five (5) days after mailing via certified mail, return receipt
requested. All notices not delivered personally or by facsimile will be sent with postage and
other charges prepaid and properly addressed to the party to be notified at the address set forth
for such party:
If to Xxxxxxx X. Xxxxxxxx
0000 Xxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Phone: (000) 000-0000
Xxxxxx, Xxxxx 00000
Phone: (000) 000-0000
If to Continental:
0000 Xxxx Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Phone: (000) 000-0000
Xxxxxx, Xxxxx 00000
Phone: (000) 000-0000
Any party hereto (and such party’s permitted assigns) may change such party’s address for
receipt of future notices hereunder by giving written notice to the other parties hereto.
g. Governing Law. This Option Agreement and the performance of the transactions and
the obligations of the parties hereunder will be governed by and construed and enforced in
accordance with the laws of the State of Texas, without giving effect to any choice of law
principles.
h. Entire Agreement. This Option Agreement, the certificates, documents, instruments
and writings that are delivered pursuant hereto, constitutes the entire agreement and
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understanding of the parties hereto in respect of its subject matters and supersedes all prior understandings,
agreements, or representations by or among the parties hereto, written or oral, to the extent they
relate in any way to the subject matter hereof or the transactions contemplated hereby.
i. Counterparts. This Option Agreement may be executed in two or more counterparts or
facsimiles thereof, each of which will be deemed an original but all of which together will
constitute one and the same instrument.
j. Amendments and Waivers. This Option Agreement may not be amended or modified, and
no provisions hereof may be waived, without the written consent of Xx. Xxxxxxxx and Continental.
No action taken pursuant to this Option Agreement, including without limitation, any investigation
by or on behalf of any party, shall be deemed to constitute a waiver by the party taking such
action of compliance with any representation, warranty, covenant or agreement contained herein.
The waiver by any party hereto of a breach of any provision of this Option Agreement shall not
operate or be construed as a further or continuing waiver of such breach or as a waiver of any
other or subsequent breach. No failure on the part of any party to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of such right, power or remedy by such party preclude any other or
further exercise thereof or the exercise of any other right, power or remedy. All remedies
hereunder are cumulative and are not exclusive of any other remedies provided by law.
k. Successors and Assigns. This Option Agreement and the rights and obligations of
the parties hereunder shall inure to the benefit of, and be binding upon, their respective
successors, assigns and legal representatives.
l. Severability. The provisions of this Option Agreement will be deemed severable and
the invalidity or unenforceability of any provision hereof will not affect the validity or
enforceability of the other provisions hereof; provided that if any provision of this Option
Agreement, as applied to any party or to any circumstance, is adjudged by a court, governmental
body not to be enforceable in accordance with its terms, the parties hereto agree that the court,
governmental body, making such determination will have the power to modify the provision in a
manner consistent with its objectives such that it is enforceable, and/or to delete specific words
or phrases, and in its reduced form, such provision will then be enforceable and will be enforced.
m. Remedies. The parties hereto shall have all remedies for breach of this Option
Agreement available to them as provided by law or equity.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Option Agreement as of the date
first written above.
| Xxxxxxxx Properties Continental, LLC a Delaware limited liability company |
||||
| By: | Xxxxxxxx Properties Acquisition Partners, L.P. | |||
| By: Xxxxxxxx Properties I, Inc. | ||||
| its General Partner | ||||
| By: | /s/ Xxxxxx X. August | |||
| Xxxxxx X. August | ||||
| President and Chief Executive Officer | ||||
| /s/ Xxxxxxx X. Xxxxxxxx | ||||
| Xxxxxxx X. Xxxxxxxx | ||||
Option
Agreement Dated October 3, 2005
