EXHIBIT 10.19
REAL ESTATE LEASE
AND OPTION AGREEMENT
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THIS REAL ESTATE AND OPTION AGREEMENT (this "Lease") is made as of
March 29, 2002 (the "Effective Date"), by and between XXXXX X. XXXXXXX (the
"Lessor") and Excalmergeco, Inc., a Texas corporation (the "Lessee").
RECITALS
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1. Lessor is the owner of certain property located in Magnolia, Texas,
being more fully described as Lots Seventy-Seven (77) and Seventy-Eight (78), in
Block One (1) of WESTWOOD SECTION TWO, an addition in Xxxxxxxxxx County, Texas,
according to the map or plat thereof recorded in Plat Cabinet B, Sheet 103A, Map
Records of Xxxxxxxxxx County, Texas (the "Land") (the Land, together with all
buildings and improvements situated thereon, is hereinafter referred to as the
"Leased Premises").
2. Lessor desires to lease the Leased Premises to Lessee and Lessee
desires to lease the Leased Premises from the Lessor.
NOW, THEREFORE, in consideration of the mutual promises, conditions and
covenants herein contained, and other good and valuable consideration, receipt
of which is hereby acknowledged, Lessor and Lessee agree as follows:
SECTION 1
LEASED PREMISES
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1.01. LEASED PREMISES. In consideration of the rents, covenants and
agreements hereinafter reserved and contained on the part of Lessee to be
observed and performed, Lessor leases to Lessee, and Lessee rents from the
Lessor the Leased Premises.
SECTION 2
TERM
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2.01. COMMENCEMENT AND ENDING DATE OF LEASE TERM. The term of this
Lease ("Lease Term") shall commence on the Effective Date, and shall continue
until March 31, 2003. However, Lessee may terminate this Lease by giving Lessor
at least thirty (30) days written notice of termination, and provided, further,
that (i) the Lease Term shall end automatically upon the occurrence of the
closing under the Purchase Option (hereinafter defined), and (ii) the Lease Term
shall end if the Lease is otherwise terminated as herein permitted.
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SECTION 3
RENT
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Lessee agrees to pay to Lessor at the office of Lessor, or at such
other place designated in writing by Lessor, rent in the amount of $5,000.00 per
month, payable in advance, during each month of the Lease Term of this Lease
(the "Monthly Rent"). The first installment of Monthly Rent shall be payable on
the execution hereof. Each month's Monthly Rent payment thereafter shall be due
on the first (1st) day of each month. For any month in which the Lease is
terminated or for any partial calendar month during the Lease Term, the Monthly
Rent shall be prorated based upon the number of days elapsed in such month.
Lessor agrees to make all payments as and when due under the Prior Note.
SECTION 4
FIXTURES, ALTERATIONS
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4.01. INSTALLATION BY LESSEE. Lessee shall not make or cause to be made
any material structural alterations to the Leased Premises without first
obtaining Lessor's prior written consent, which shall not be unreasonably
withheld, conditioned or delayed. However, Lessee may make interior,
nonstructural alterations, additions, or improvements to the Leased Premises
without Lessor's prior consent, provided the same will not affect the exterior,
structural integrity, or soundness of the Leased Premises, and Lessee may
further install or cause to be installed, without Lessor's prior consent, trade
fixtures, exterior signs, floor covering, interior or exterior lighting,
plumbing fixtures, electrical systems and equipment and the like.
4.02. REMOVAL BY LESSEE. Any installations, alterations, decorations,
additions or improvements made to the Leased Premises by the Lessee may be
removed from the Leased Premises at to the end of the Lease Term hereof,
provided such removal does not cause substantial damages to the Leased Premises.
All such installations, alterations, decorations, additions or improvements made
to the Leased Premises by Lessee and not removed by Lessee upon termination or
expiration of this Lease shall become the property of Lessor.
SECTION 5
MAINTENANCE AND REPAIRS OF LEASED PREMISES
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5.01. OBLIGATIONS FOR MAINTENANCE AND REPAIRS.
(a) Lessor shall keep and maintain all portions of the Leased
Premises, including, without limitation: the foundation; exterior walls and roof
(both the roof membrane and the structural members supporting the roof) of the
buildings and other improvements on the Land; the structural portions and
members of the Leased Premises; the exterior and interior portion of all walls;
doors; door checks; windows; plate glass; all plumbing and sewage facilities
within the Leased Premises including free flow to the main sewer line; fixtures;
heating, air conditioning and electrical systems; mechanical systems; floors;
and ceilings in a good order and state of repair at all times during the Lease
Term. Lessee shall be responsible for the first $1,000.00 of such repairs and
maintenance to the Leased Premises, and Lessor shall be responsible for the
costs of all repairs and maintenance in excess of $1,000.00.
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(b) Lessee shall keep and maintain the Leased Premises in a
clean, sanitary and safe condition and in accordance with all laws, ordinances,
directions, rules and regulations of all governmental agencies having
jurisdiction over the Leased Premises, and Lessee shall comply with all
requirements of law, by statutes, ordinance or otherwise, affecting the Leased
Premises and all appurtenances thereto. However, Lessee shall NOT be required to
make any repairs or alterations to any portions of the Leased Premises in order
to comply with any such requirements of law, statute, ordinance, rule,
regulation, or other requirement of any governmental authorities, nor shall
Lessee be required to correct or to make any repairs or improvements to any
portion of the Leased Premises in order to bring into compliance with applicable
law any portion of the Leased Premises that is not in compliance with any such
applicable requirements of law, statute, ordinance rule, regulations,
administrative order, decree, court decision, or the like, all of the same being
the responsibility of Lessor, which shall be at Lessor's sole cost and expense,
as set forth below.
(c) Lessor shall, at its sole cost, be required to correct and
to make any repairs and improvements to the Leased Premises necessary to bring
into compliance with applicable law any portion of the Leased Premises that is
not in compliance with any applicable requirements of law, statute, ordinance,
rule, regulations, administrative order, decree, court decision, or the like of
any applicable governmental authorities in effect at any point during the Lease
Term (including both existing laws, statutes, ordinances, rules, regulations,
administrative orders, decrees, court decisions, or the like, as well as any
additions amendments to any of same which take effect during the Lease Term).
Lessor further represents and warrants to Lessee that all improvements
constituting part of the Leased Premises are in compliance with all applicable
requirements of law, statute, ordinance or other governmental authorities in
effect as of the date of this Lease.
5.02. SURRENDER OF LEASED PREMISES. Upon the termination of this Lease,
Lessee shall surrender the Leased Premises in the same condition as the Leased
Premises were on the date this Lease was executed, reasonable wear and tear and
damage from fire and other casualty excepted. Lessee, may remove any and all of
its trade fixtures, equipment, and other property, provided that such occurs by
the end of the Lease Term, as aforesaid and shall promptly repair any damages to
the Leased Premises caused thereby.
5.03. ENVIRONMENTAL LIABILITY Lessee shall indemnify, defend, and hold
Lessor, its employees, agents, officers, and directors, harmless from and
against any claim, action, suit, proceeding, loss, cost, damage, liability,
deficiency, fine, penalty, punitive damage or expense (including, without
limitation, attorneys' and consultant fees), directly or indirectly resulting
from, arising out of or based upon the presence, release, use, manufacture,
generation, discharge, storage or disposal of any Hazardous Materials on, under,
in, or about, or the transportation of any Hazardous Materials to or from the
Leased Premises AFTER the date of this Lease that result from the acts or
omissions of Lessee, or its employees, or agents.
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Lessor agrees to indemnify, defend and hold Lessee, its employees,
agents, officers, and directors, harmless from and against any claim, action,
suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty,
punitive damage or expense (including, without limitation, attorneys' and
consultant fees), directly or indirectly resulting from, arising out of or based
upon (i) the release, use, manufacture, generation, discharge, storage or
disposal of any Hazardous Materials on, under, in, or about, or the
transportation of any Hazardous Materials to or from the Leased Premises prior
to the date of this Lease, or (ii) a violation of any Hazardous Materials Law
affecting the Leased Premises which is caused by or arises out of any fact,
matter, situation, or circumstance that in existence as of the date of this
Lease.
Lessor warrants, represents, covenants and agrees that, as of the
Effective Date, there are no Hazardous Materials on, under or in the Leased
Premises.
"Hazardous Material" shall mean any substance that poses a threat to, or is
regulated to protect, human health, safety, public welfare, or the environment,
including without limitation: (a) any "hazardous substance," "pollutant" or
"contaminant," and any "petroleum" or "natural gas liquids" as those terms are
defined or used under Section 101 of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. ss. 9601, et seq.)
("CERCLA"), (b) "solid waste" as defined by the Federal Solid Waste Disposal Act
(42 U.S.C. ss.6901, et seq.), (c) any substance whose presence on any property
or facility would cause or would threaten to cause a nuisance upon the such
property or facility or to adjacent properties, (d) any substance whose presence
on adjacent properties could constitute a trespass by any party, (e) asbestos or
a material containing asbestos, (f) any material that contains lead or lead
based paint, (g) any radioactive materials, (h) any infectious materials, (i)
toxic microorganisms, including mold, mildew or fungi, (j) oil, other petroleum
products, and their respective by-products, or (k) any substance the presence or
release of which requires reporting, investigation or remediation under any
Environmental Laws.
"Hazardous Materials Law" shall mean all federal, state or local laws, codes,
rules, ordinances, regulations, administrative rulings and decisions,
directives, court decisions, orders, decrees, documents, and guidance relating
to health, safety or the environment, including without limitation CERCLA, the
Hazardous Material Transportation Act (49 U.S.C. 1801 ET SEQ.), RCRA, the Clean
Air Act (42 U.S.C. 7401 ET SEQ.), the Clean Water Act (33 U.S.C. 1251 ET seq.),
the Toxic Substances Control Act, as amended (15 U.S.C. 2601 ET SEQ.), the
National Environmental Policy Act (42 U.S.C. 4321 ET SEQ.), the Oil Pollution
Act (33 U.S.C. 2701 ET SEQ.), and the Occupational Safety and Health Act (29
U.S.C. 651 ET SEQ.), Federal Water Pollution Control Act, the Safe Drinking
Water Act, as these laws have been amended or supplemented, and all other laws,
statutes, ordinances, rules, regulations, orders and determinations of any
Governmental Entity relating to (a) the control of any potential pollutant or
protection of the air, water or land, (b) solid, gaseous or liquid waste
generation, handling, treatment, storage, disposal or transportation and (c)
exposure to hazardous, toxic or other harmful substances. The terms "hazardous
substance", "release" and "threatened release" have the meanings specified in
CERCLA, and the terms "solid waste" and "disposal" (or "disposed") have the
meanings specified in RCRA; provided, however, that, to the extent the laws of
the state in which any Assets are or were located currently provide for a
meaning for "hazardous substance", "release", "solid waste" or "disposal" which
is broader than that specified in either CERCLA or RCRA, such broader meaning
shall apply.
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SECTION 6
TAXES: OBLIGATION OF LESSEE
---------------------------
6.01. TAXES. Lessee shall be responsible for, and agrees to timely pay
prior to delinquency, any and all real property ad valorem taxes and assessments
(including but not limited to assessments and special assessments which may be
levied or assessed, during the Lease Term, against the Land, buildings, and
improvements, comprising the Leased Premises, and any claim, action, suit,
proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive
damage or expense (including, without limitation, attorneys' fees) for any and
all of same (collectively, "Taxes"). Lessee shall provide Lessor with evidence
of the payment of such Taxes within thirty (30) days after the beginning of each
calendar year during the Lease Term.
SECTION 7
INSURANCE
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7.01. INSURANCE COMPANIES. All policies of insurance to be kept and
maintained in force by the respective parties hereto shall be issued by
insurance companies authorized to do business in the State of Texas and approved
by both parties hereto.
7.02. LESSEE TO OBTAIN LIABILITY INSURANCE. Lessee shall, at its sole
expense, at all times during the Lease Term, maintain in full force a commercial
general liability insurance (CGL) policy in an amount not less than
$1,000,000.00 in the aggregate. The policy shall designate Lessor as an
additional insured, and must be maintained at all times during Lease Term.
7.03. LESSEE TO OBTAIN FIRE INSURANCE ON LEASED PREMISES. Lessee shall,
at Lessee's sole cost and expense, maintain in force, at all times during the
Lease Term, a policy or policies of fire and extended coverage casualty
insurance to the extent of the full replacement cost of the Leased Premises,
including, without limitation, all improvements and fixtures thereon, but such
insurance shall not ever be less than amounts reasonably required by Lessor and
Lessor's lender. Any insurance policy or policies maintained shall name as
beneficiaries, Lessor, Lessee and any mortgage holder under a standard mortgage
clause as their interests may appear.
7.04. CERTIFICATE OF INSURANCE. Each of Lessor and Lessee agrees to
submit to the other a copy of the certificate or certificates of or other
evidence of the renewal or extension of any insurance coverage required in this
Section. All such certificates will reflect a minimum of thirty (30) days
written notice of cancellation to be given to the other party.
7.05. MUTUAL WAIVER OF SUBROGATION. If either Lessor or Lessee sustains
a loss by reason of fire or other casualty which is a loss of a type within the
coverage of typical fire and extended coverage insurance policies issued in the
State of Texas, or is within the coverage of the type of insurance policy or
policies actually carried or required to be carried by Lessor or Lessee pursuant
to this Lease, and such fire or casualty is caused in whole or in part by the
acts or omissions of the other party or its agents, servants, contractors, or
employees, then each party does hereby waive and release the other party of and
from any and all claims, demands, causes of action, and rights or recovery which
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such party might otherwise have against the other regardless of the cause of
origin thereof (including the negligence of Lessor or Lessee and their agents,
servants, contractors, or employees) for damage to or loss of any part of the
Leased Premises, or any of the fixtures, equipment, merchandise, alterations or
other property therein belonging to either party, and the party incurring such
loss agrees to look solely to the proceeds (if any) of its previously mentioned
policy or policies of insurance, and such party shall have no right of recovery
against the other party to this Lease or the agents, servants, or employees of
such other party, and, in all events, no party shall have any right by way of
assignment or subrogation; and, that all policies of insurance written to insure
such buildings, improvements and contents shall provide for a waiver of rights
of subrogation against Lessor and Lessee on the part of the insurance carrier.
SECTION 8
SERVICES AND UTILITIES
----------------------
Lessee shall be solely responsible for and promptly pay or reimburse
Lessor for all charges within thirty (30) days of receipt of invoices for water,
electricity, telephone, chilled water for air conditioning purposes, sanitary
sewer, gas, and/or other utilities used or consumed in or on the Leased Premises
during the term hereof. Lessee shall further have the right during the Lease
Term to place all such utilities in Lessee's name.
SECTION 9
ASSIGNMENT AND SUBLETTING
-------------------------
Lessee may assign this Lease or the Purchase Option (hereinafter
defined), and may sublet the Leased Premises, in whole or in part, only with the
prior written consent of Lessor, such consent not to be unreasonably withheld,
conditioned, or delayed.
SECTION 10
DESTRUCTION OF LEASED PREMISES/CONDEMNATION
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10.01. DESTRUCTION OF LEASED PREMISES. If any portion of the building
or buildings on the Land are destroyed or damaged by fire, explosion or any
other casualty (whether with or without the fault or neglect of Lessee) so as to
be rendered untenantable, then Lessor shall promptly repair and reconstruct the
damage to such improvements to the condition in which they existed immediately
prior to such damage or destruction, at Lessor's sole cost and expense. If such
repairs are not completed within sixty (60) days after the date of such damage
or destruction, then, in addition to any and all other remedies to which Lessee
may be entitled, Lessee may terminate this Lease. Lessee's Monthly Rent
hereunder shall be equitably reduced for any time during which any portion of
the building or buildings on the Land cannot be used or occupied due to such
event.
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10.02. CONDEMNATION. If there shall be taken during the Lease Term more
than twenty percent (20%) of: (i) the leasable area of the buildings or other
improvements on the Land or (ii) the parking area of the Leased Premises (or if
a conveyance in lieu thereof should occur), then Lessee may elect to terminate
this Lease by notice to Lessor within thirty (30) days after the date of such
taking (or conveyance in lieu thereof). If Lessee does not elect to terminate
this Lease, or if less than twenty percent (20%) of the leasable area of the
buildings or other improvements or the parking area are taken (or conveyed in
lieu thereof), then Lessor shall promptly restore the remainder of the Leased
Premises to the condition in which they existed prior to such condemnation (or
conveyance), at its sole cost and expense, and the Monthly Rent payable by
Lessee shall be reduced in proportion to the area of the Leased Premises so
taken or conveyed. Additionally, Lessee's Monthly Rent hereunder shall be
equitably reduced for any time during which any portion of the Leased Premises
cannot be used or occupied due to such condemnation or conveyance in lieu
thereof. If such restoration by Lessor is not completed within sixty (60) days
after the date of such taking (or conveyance in lieu thereof), then, in addition
to any and all other remedies to which Lessee may be entitled, Lessee may
terminate this Lease. Lessee shall have the right to participate in any
condemnation proceeding (and/or negotiations) and to prove and recover out of
the award (or negotiated consideration) an amount equal to the value of Lessee's
leasehold estate and trade fixtures so taken.
SECTION 11
DEFAULT OF THE LESSEE OR LESSOR
-------------------------------
11.01. DEFAULT BY LESSEE. In the event (1) Lessee fails to pay any
Monthly Rent when due, which failure has not been cured within ten (10) business
days after receipt by Lessee of written notice of such failure from Lessor, or
(2) Lessee should fail to perform any of the other terms, conditions or
covenants of this Lease to be observed or performed by Lessee for more than
thirty (30) days after written notice of such default shall have been given to
Lessee (provided that if the nature of such default is such that it cannot
reasonably be cured within a thirty (30) day period, then Lessee shall not be in
default so long as Lessee commences the cure of such failure within such thirty
(30) day period and is diligently prosecuting such cure to completion), or (3)
if Lessee shall become bankrupt, or file any debtor proceedings or take or have
taken against Lessee in any court pursuant to any statute either of the United
States or of any State a petition in bankruptcy or insolvency or for
reorganization or for the appointment of a receiver or trustee of all or a
portion of Lessee's property, or (4) if Lessee makes an assignment for the
benefit of creditors, or if Lessee shall abandon the Leased Premises, or (5)
Lessee allows this Lease to be taken under any writ of execution, then Lessor,
in addition to other rights or remedies it may have by law or in equity, shall
have:
(a) the right to treat said Lease granted herein as
terminated; and/or
(b) the right to re-enter the Leased Premises and remove all
persons and property form said Leases Premises; and/or
(c) the right to remove and store all such personal property
of Lessee in a public warehouse, or elsewhere, at the cost of, and for the
account of Lessee.
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11.02. DEFAULT BY LESSOR. If Lessor shall fail to perform any of its
obligations under this Lease, which failure has not been cured within thirty
(30) days after receipt by Lessor of Lessee' written notice of such failure
together with a written estimate of the cost to cure such failure from Lessee
(except when the nature of Lessor's obligation is such that more than thirty
(30) days are required for its cure, then Lessor shall not be deemed in default
if it commences such cure within such thirty (30) day period and thereafter
diligently pursues the cure to completion), then Lessee, in addition to other
rights or remedies it may have by law or in equity: (i) may terminate this
Lease; or (ii) cure such failure for the account and at the expense of Lessor
and render a xxxx to Lessor for the actual and reasonable expense thereof. If
Lessor fails to pay such xxxx within fifteen (15) days after such xxxx is
rendered, Lessee shall have the right to deduct such expense from Lessee's
payments of Monthly Rent payable hereunder.
11.03. LEGAL EXPENSES. If suit shall be successfully brought for
recovery of possession of the Leased Premises, for the recovery of Monthly Rent
or any other amount due under the provisions of this Lease, or because of the
breach of any other covenant herein contained on the part of Lessee or Lessor to
be kept or performed, then the losing party shall pay to the prevailing party
all expenses incurred therefor, including, without limitation, the Lessor's
reasonable attorney's fee.
SECTION 12
SUCCESSORS
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All rights and liabilities herein given to, or imposed upon, the
respective parties hereto shall extend to and bind the several respective
successors and permitted assigns of the said parties.
SECTION 13
QUIET ENJOYMENT AND
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OTHER COVENANTS AND AGREEMENTS
------------------------------
Upon payment by the Lessee of the Monthly Rent herein provided, and
upon the observance and performance of all the material covenants, terms and
conditions on Lessee's part to be observed and performed, Lessee shall peaceably
and quietly hold and enjoy the Leased Premises for the Lease Term without
hindrance or interruption by Lessor or any other person or persons, subject,
nevertheless, to the terms and conditions of this Lease.
SECTION 14
OPTION TO SELL
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14.01. OPTION TO PURCHASE LEASED PREMISES. Lessor shall have the right
and option at any time during the Lease Term to require Lessee to purchase fee
simple title to the Leased Premises (the "OPTION TO SELL").
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14.02. MANNER OF EXERCISE OF OPTION TO SELL. To exercise the Option to
Sell, Lessor shall deliver written notice of its interest (the "Election
Notice") in exercising such Option to Sell to Lessee at any time prior to the
expiration or termination of the Lease Term (e.g., Lessor may exercise the
Option to Sell at any time prior to the expiration or termination of the Lease
Term, even if Lessee has provided written notice to the other of its election to
terminate this Lease pursuant to Section 2.01).
14.03. PURCHASE PRICE. The purchase price for the Leased Premises (the
"Purchase Price") shall be: (i) TWENTY FIVE THOUSAND AND NO/100THS DOLLARS
($25,000.00); and (ii) TWO HUNDRED THOUSAND (200,000) shares of the common stock
of Excalibur Holdings, Inc., which is the parent of Lessee (the "Shares"),
which, it is agreed, shall be valued by the parties for all purposes at $1.50
per share (the "Per Share Value") (e.g., for the purpose of determining the
premium and face amount of the Owner's Policy [hereinafter defined]).
14.04. TERMS AND PROVISIONS OF THE SALE. If Lessee delivers the
Election Notice, then the following shall apply:
(a) Lessee shall deliver to a local title company designated by Lessee
(the "Title Company") the sum of $5,000 ("Xxxxxxx Money") within twenty (20)
days after delivery of the Election Notice by Lessor, which Xxxxxxx Money shall
be released to Lessor as liquidated damages in the event of a breach by Lessee
of its obligation to purchase the Leased Premises.
(b) Contemporaneously with the delivery of the Election Notice by
Lessor, Lessor shall deliver to Lessee all of the following items: (i) all
available architectural, structural, mechanical, and electrical "as-built" plans
and specifications for the improvements constituting part of the Leased
Premises, together with copies of the building permit and certificate of
occupancy relating to the Leased Premises (ii) a commitment for title insurance
issued by the Title Company together with all instruments referred to in such
commitment, together with a copy of the Seller's existing title policy; (iii) a
copy of all existing surveys of the Leased Premises; (iv) all soil reports,
environmental reports, and engineering reports pertaining to the Leased Premises
in Lessor's possession; (v) copies of all debt instruments, if any, affecting
the Leased Premises; (vi) copies of all tax bills applicable to the Leased
Premises for the immediately preceding three (3) years; and (vii) copies of all
contracts affecting the Leased Premises (including, without limitation,
contracts relating to security, maintenance, repairs, cleaning, etc.) (the
foregoing referred to as the "Required Materials"). Lessee may elect, in its
discretion, to update or re-certify any of Lessor's environmental or other
reports regarding the Leased Premises at the cost of Lessor.
(c) Within twenty (20) days after the delivery of the Election Notice,
Lessor, at Lessor's expense, shall obtain and deliver to Lessee a survey,
(hereinafter called the "Survey") of the Leased Premises to be made by an
engineer or a surveyor acceptable to Lessee and the Title Company prepared in
accordance with the current survey standards adopted by the American Land Title
Association ("ALTA") and the American Congress of Surveying and Mapping
("ACSM"), sufficient to enable the Title Company to issue a Texas (Form T-1)
owner's policy of title insurance (the "Owner's Policy"), and to delete any
standard printed survey exception in the Owner's Policy to be delivered at
closing, and containing such items, features and descriptions as Lessee or the
Title Company shall require (all at Lessor's expense).
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(d) Lessee shall have a period of sixty (60) days after the later to
occur of (i) the delivery of the Election Notice; (ii) receipt of the last of
the Required Materials (such period being referred to as the "Information Review
Period"), within which to review such materials and to undertake an
investigation of the environmental condition of the Leased Premises. If, in the
exercise of Lessee's good faith business judgment, Lessee determines that the
environmental condition of the Leased Premises is not satisfactory, then on or
prior to the expiration of the Information Review Period, Lessee will deliver to
Lessor written notice of such decision (hereinafter called the "Termination
Notice"), and upon the giving of the Termination Notice, this Lease (including
the Purchase Option) shall be deemed terminated, Lessee shall have no further
obligation to purchase the Leased Premises, and the Xxxxxxx Money shall be
immediately returned to Lessee.
(e) The closing of such transaction shall take place on a date
("Closing Date") to be designated by Lessee, which date shall be no later than
ninety (90) days after the delivery by Lessee of the Election Notice. The
closing of this transaction will take place on the Closing Date at the offices
of the Title Company, or such other place as Lessor and Lessee may agree.
(f) Lessee acknowledges and agrees that there is an existing deed of
trust lien on the Leased Premises as of the date of this Lease, pursuant to that
certain Deed of Trust, for the benefit of Xxxxx Fargo Bank, N.A. ("Lender") (the
"Prior Mortgage."), which secures the payment of that certain Promissory Note,
dated of even date therewith, from Lessor, as "Maker," made payable to the order
of Lender, as "Payee," in the original principal amount of $250,000.00 (the
"Prior Note"). Lessee agrees that the Prior Mortgage shall remain as an
encumbrance against the Leased Premises, and Lessor shall not be obligated to
discharge or remove the Prior Mortgage as an encumbrance on the Leased Premises
prior to the Closing Date; provided that Lessor has made all payments under the
Prior Note as and when due from and after the commencement of the Lease Term.
(g) At closing, Lessor shall execute and deliver a special warranty
deed conveying the Leased Premises to Lessee, subject only to: (i) exceptions to
title disclosed by the title commitment issued by the Title Company AND existing
at the commencement of this Lease; (ii) taxes and standby fees for the year of
the closing, and (iii) any restrictions, covenants, easements, mineral
reservations, or other matters of record which Lessee has specifically consented
to in writing, or requested Lessor in writing to create prior to delivery of the
Election Notice (it being agreed that no liens for monetary amounts [other than
the Prior Mortgage] shall be permitted to remain outstanding after such
purchase, and title shall be conveyed free of all such liens).
(h) At closing, (i) Lessee shall execute and deliver (or cause to be
executed and delivered) to Lessor a certificate or certificates (issued in the
name of Lessor) representing the Shares; and (ii) Lessee shall pay the cash
portion of the Purchase Price by cash, cashier's check, or wire transfer to the
account of the Title Company (in accordance with wiring instructions provided by
the Title Company to Lessee).
(i) In addition to the above documents, Lessor and Lessee shall also
execute any other documents that may be necessary, required, or reasonably
requested by the other party or by the Title Company to convey the Leased
Premises to Lessee. At closing, the Title Company shall deliver to Lessee, at
Lessor's expense, the Owner's Policy issued by the Title Company in the amount
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of the Purchase Price insuring that Lessee owns fee simple title to the Leased
Premises, subject to no exceptions other than the exceptions described herein,
and containing such endorsements and other matters as Lessee shall desire (the
cost of which shall be borne by Lessor). All other costs of closing shall be
payable in accordance with local custom for the closing of similar transactions
in Xxxxxxxxxx County, Texas.
(j) If, following Lessee's delivery of the Election Notice, the
conveyance of the Leased Premises is not consummated in whole or in part, by
reason of Lessor's default or failure to act, then in addition to its other
rights and remedies available at law or in equity, Lessee shall be entitled to
fulfill Lessor's obligations, or xxx Xxxxxx for damages equal to the
expenditures incurred by Lessee (including those incurred to remove any
unauthorized liens or encumbrances) and/or be entitled to enforce specific
performance.
(k) Lessor shall also execute a subscription agreement for the Shares
in form and substance reasonably satisfactory to Lessee, but which, at a
minimum, shall contain a restatement of the representations and warranties by
Lessor in Section 14.04(l) below
(l) Lessor hereby makes the following representations and warranties
regarding the Shares:
(i) The Shares will not be registered under the
Securities Act of 1933, or under the securities laws of any state (the
"Securities Laws"). The Shares are not being so registered in reliance upon
exemptions from the Securities Act and the Securities Laws which are predicated,
in part, on the representations, warranties and agreements of Lessor contained
herein. Lessor represents and warrants that (i) it has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of an investment in the Shares and the suitability thereof
as an investment for them, (ii) Lessor is an "accredited investor" within the
meaning of Regulation D promulgated by the Securities and Exchange Commission
(the "Commission") pursuant to the Securities Act, (iii) the Shares to be
acquired by Lessor in connection with the sale of the Leased Premises will be
acquired solely for investment and not with a view toward resale or
redistribution in violation of the Securities Laws, (iv) its residence and
domicile is in the State of Texas, and (v) in connection with the transactions
contemplated hereby, no assurances have been made concerning the future results
of Holdings or as to the value of the Shares. Lessor understands that Holdings
is not under any obligation to file a registration statement or to take any
other action under the securities laws with respect to the Shares.
(ii) Lessor has consulted with its own counsel in
regard to the Securities Laws and is fully aware: (i) of the circumstances under
which it is required to hold the Shares, (ii) of the limitations on the transfer
or disposition of the Shares, (iii) that the Shares must be held indefinitely
unless the transfer thereof is registered under the Securities Laws or an
exemption from registration is available, and (iv) that no exemption from
registration is likely to become available for at least one (1) year from the
date of acquisition of the Shares. Lessor has been advised by its counsel as to
the provisions of Rules 144 and 145 as promulgated by the Commission under the
Securities Act and has been advised of the applicable limitations thereof.
Lessor acknowledges that Holdings and Lessee will be relying upon the truth and
accuracy of the representations and warranties made by Lessor herein in
consummating the transactions contemplated by the Purchase Option (if it is
exercised and consummated in accordance with the above provisions).
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(iii) Lessor and Holdings have made available to
Lessor the opportunity to ask questions and receive answers concerning the terms
and conditions of the transactions contemplated by the Purchase Option and to
obtain any additional information which they possess or could reasonably acquire
for the purpose of verifying the accuracy of information furnished to Lessor as
set forth herein or for the purpose of considering the transactions contemplated
hereby. Lessor agrees that the certificates representing the Shares will be
imprinted with the following legend, the terms of which are specifically agreed
to:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE, IN
RELIANCE UPON EXEMPTIONS FROM REGISTRATION REQUIREMENTS.
WITHOUT SUCH REGISTRATION, SUCH SHARES MAY NOT BE SOLD,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED, EXCEPT UPON
DELIVERY TO STEEL OF AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE CORPORATION THAT REGISTRATION IS NOT
REQUIRED FOR SUCH SALE, PLEDGE, HYPOTHECATION OR TRANSFER OR
THE SUBMISSION TO STEEL OF SUCH OTHER EVIDENCE AS MAY BE
SATISFACTORY TO STEEL TO THE EFFECT THAT SUCH SALE, PLEDGE,
HYPOTHECATION OR TRANSFER SHALL NOT BE IN VIOLATION OF THE
SECURITIES ACT OF 1933 OR APPLICABLE STATE SECURITIES LAWS OR
ANY RULE OR REGULATION PROMULGATED THEREUNDER. ADDITIONALLY,
THE ARTICLES OF INCORPORATION, AS AMENDED, WHICH ARE ON FILE
IN THE XXXXXX XX XXX XXXXXXXXX XX XXXXX XX XXX XXXXX XX XXXXX
AND A COPY OF WHICH THE CORPORATION WILL FURNISH ANY
SHAREHOLDER WITHOUT CHARGE UPON WRITTEN REQUEST, DENY
PRE-EMPTIVE RIGHTS OF SHAREHOLDERS AND THE RIGHT OF
SHAREHOLDERS TO CUMULATE VOTES IN THE ELECTION OF DIRECTORS,
AND SET FORTH THE DESIGNATIONS, PREFERENCES, LIMITATIONS, AND
RELATIVE RIGHTS OF EACH CLASS OF STOCK THE CORPORATION IS
AUTHORIZED TO ISSUE. FURTHER, NOTICE IS HEREBY GIVEN THAT THE
SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS UNDER CERTAIN CIRCUMSTANCES AS PROVIDED BY THE
BYLAWS OF THE CORPORATION WHICH ARE ON FILE AT THE PRINCIPAL
OFFICE OF THE CORPORATION. A COPY OF THE BYLAWS WILL BE
FURNISHED WITHOUT CHARGE UPON REQUEST BY THE HOLDER OF THIS
CERTIFICATE TO THE CORPORATION AT ITS PRINCIPAL OFFICE OR
REGISTERED OFFICE.
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14.05. RECORDATION OF OPTION AGREEMENT. Lessor and Lessee agree to
execute a recordable memorandum outlining the relevant terms of the Purchase
Option, which memorandum shall be filed in the Official Public Records of Real
Property in Xxxxxxxxxx County, Texas.
14.06 POSSIBLE MERGER TRANSACTION. Lessee acknowledges that Lessor may
contribute the Leased Premises into a corporation of which Lessor is the sole or
partial owner, and to structure the purchase of the Leased Premises as a merger
or similar corporate reorganization. Lessee agrees to reasonably cooperate with
Lessor in implementing and structuring the sale and purchase of the Leased
Premises as a merger or similar corporate reorganization.
SECTION 15
MISCELLANEOUS
-------------
15.01. WAIVER. The waiver by either party of any breach of any term,
covenant or condition herein contained shall not be deemed to be a waiver of
such term, covenant or condition or any subsequent breach of the same or any
other term, covenant or condition herein contained. No covenant, term or
conditions of this Lease shall be deemed to have been waived by either party,
unless such waiver be in writing by said party.
15.02. ENTIRE AGREEMENT. This Lease sets forth all the covenants,
promises, agreements, conditions and understandings between Lessor and Lessee
concerning the subject matter hereof and there are no covenants, promises,
agreements, conditions or understandings, either oral or written, between them
other than as are herein set forth. Except as herein otherwise provided, no
subsequent alteration, amendment, change or addition to this Lease shall be
binding upon Lessor or Lessee unless reduced to writing and signed by them.
15.03. NOTICES. Any notice, demand, request or other instrument which
may be or are required to be given under this Lease shall be delivered
personally or sent by United States certified mail postage prepaid and shall be
addressed (a) if to Lessor, at the address provided below or at such other
address as Lessor may designate by written notice, and (b) if to Lessee, at the
address provided below or at such other address as Lessee shall designate by
written notice:
(a) To Lessor:
Xxxxx X. Xxxxxxx
00000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
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(b) To Lessee:
Excalmergeco, Inc.
00000 Xxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X.X. Xxxxxx
With a copy (which shall not constitute notice) to:
Xxxxxx and Xxxxx, L.L.P.
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. XxXxxxxxx
15.04. CAPTIONS AND SECTION NUMBERS. The captions, section numbers and
article numbers appearing in this Lease are inserted only as a matter of
convenience and in no way define, limit, construe, or describe the scope or
intent of such sections or articles of this Lease nor in any way affect this
Lease.
15.05. PARTIAL INVALIDITY. If any term, covenant or condition of this
Lease or the application thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such term, covenant or condition to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby and each term, covenant or condition of this Lease shall be
valid and be enforced to the fullest extent permitted by law.
15.06. APPLICABLE LAW. The laws of the State of Texas shall govern the
validity, performance and enforcement of this Lease.
15.07. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall constitute the same instrument. In making proof of this
Agreement, it shall not be necessary to produce or account for more than one
such counterpart. A telecopied facsimile of an executed counterpart of this
Agreement shall be sufficient to evidence the binding agreement of each party to
the terms hereof. However, each party agrees to promptly deliver to the other
parties an original, duly executed counterpart of this Agreement.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Lease to
be executed on its behalf as of the date first above written.
LESSOR:
XXXXX X. XXXXXXX
LESSEE:
EXCALMERGECO, INC., a Texas corporation
By: /S/ Xxxxxxx X.X. Xxxxxx
-----------------------------------------
Xxxxxxx X.X. Xxxxxx
President and Chief Executive Officer
15
STATE OF TEXAS )
) ss.
COUNTY OF XXXXXXXXXX )
Before me, the undersigned, a Notary Public in and for said
county and state, on this __________ day of __________________, 2002, personally
appeared XXXXX X. XXXXXXX, to me known to be the identical person who subscribed
his name to the within and foregoing instrument, and acknowledged to me that he
executed the same as his free and voluntary act and deed and for the uses and
purposes therein set forth.
Given under my hand and seal the day and year last above written.
----------------------------------
Notary Public, State of Texas
My Commission Expires:
---------------------
STATE OF TEXAS )
) ss.
COUNTY OF XXXXXX )
Before me, the undersigned, a Notary Public in and for said county and
state, on this _____ day of _________________, 2002, personally appeared Xxxxxxx
X.X. Xxxxxx, to me known to be the identical person who subscribed the name of
EXCALMERGECO, INC. to the within and foregoing instrument as its President and
Chief Executive Officer, and acknowledged to me that he executed the same as his
free and voluntary act and deed and as the free and voluntary act and deed of
such corporation for the uses and purposes therein set forth.
Given under my hand and seal the day and year last above written.
----------------------------------
Notary Public, State of Texas
My Commission Expires:
----------------------
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