REAL ESTATE SALE AND PURCHASE
AGREEMENT WITH LEASE
THIS AGREEMENT is entered into this 7th day of June, 1989, by and among
SUMMIT ENTERPRISES, LTD., a Nevada corporation, hereafter referred to as
"Summit", "Buyer" or "Lessor", and XXXXXX LABORATORIES, INC., d/b/a
ALOELABORATORIES, INC., a Texas corporation, hereafter referred to as
"AloeLabs", "Seller" or "Lessee", and X.X. XXXXXX, XXXXXXX X. XXXXXX and XXXX
X. XXXXXX, shareholders of AloeLabs, hereafter referred to as "Shareholders".
WITNESSETH
WHEREAS, Seller is the owner of real property with building
improvements located thereon in Cameron County, Texas;
WHEREAS, Seller desires to sell said real property and improvements to
Buyer as set forth below; and
WHEREAS, Buyer desires to purchase said real property and improvements
from Seller as set forth below; and
WHEREAS, Buyer desires to make additional improvements upon the real
property; and
WHERAS, Seller desires to lease the real property and improvements from
Buyer following the acquitions of title by Buyer; and
WHEREAS, Buyer owns certain equipment, machinery and other personal
property and desires to acquire more of the same, and lease such items to
Seller as provided below; and
WHEREAS, Seller manufactures Aloe Xxxx gel, and other Aloe Xxxx plant
products; and
WHEREAS, as a material part of this Agreement, Buyer desires to obtain
a consistent supply of Aloe Xxxx gel for its own business purposes, as set
forth herein;
NOW, THEREFORE, for and in exchange of the consideration herein set
forth, the parties do covenant, stipulate and agree as follows:
REAL ESTATE SALE AND PURCHASE AGREEMENT WITH LEASE - 1
ARTICLE I -- REAL PROPERTY
For and in consideration of the purchase price set forth in Article II
below, Seller shal sell, transfer and convey to Buyer by good and sufficient
warranty deed, and Buyer shall purchase from Seller the following real
property, with improvements located thereon, located in Cameron County,
Texas, to-wit:
(SEE ATTACHED SCHEDULE 1, WHICH IS INCORPORATED HEREIN BY
THIS REFERENCE AS THOUGH SET FORTH IN FULL.)
Said real property and its improvements shall hereafter be referredc to
as the "real property" and consists of approximately 4.912 acres, more or
less, upon which an aloe plant processing and manufacturing facility and
other improvements are located, and upon which additional improvements may be
constructed. This real property is more commonly referred to as being located
at 0000 Xxxx Xxxxxxxxxx 00, Xxxxxxxxx, Xxxxx 00000. The improvements
currently located thereon consisting of 2,000 square feet, more or less, of
office space, and 10,000 square feet, more or less, of warehouse
manufacturing space. The plan of the existing facility is generally as set
forth in Exhibit "A" which is attached hereto, and incorporated herein by
this reference.
ARTICLE II -- PURCHASE PRICE
The purchase price which Buyer agrees to pay and Seller agrees to
accept for the sale, transfer and conveyance of the real property to Buyer is
Three Hundred Thirty-six Thousand Five Hundred Seventy-five Dollars
($336,575.00), which consists of Two Hundred Ninety-nine Thousand Five
Hundred Seventy-five and No/100 Dollars ($299,575.00) for the building and
improvements located on the real property, as they existed prior to April 30,
1988, the date when AloeLabs first took possession thereof, Twenty Thousand
and No/100 Dollars ($20,000.00) for improvements made or to be made by
AloeLabs after April 30, 1988, and Seventeen Thousand and No/100 Dollars
($17,000.00) as additional consideration, and other consideration.
As partial consideration, Buyer shall pay the foregoing Three Hundred
Thirty-Six Thousand Five Hundred Seventy-five Dollars ($336,575.00) price as
follows:
REAL ESTATE SALE AND PURCHASE AGREEMENT WITH LEASE - 2
(a) Ten Thousand and No/100 Dollars ($10,000.00)
contemporaneously herewith.
(b) The balance thereof, consisting of Three Hundred Twenty-six
Thousand Five Hundred Seventy-five Dollars ($326,575.00) is due
and payable at closing.
ARTICLE III -- CLOSING, TITLE AND TITLE INSURANCE
Closing shall be on or before July 15, 1989. The closing agent shall be
Xxxxxxx Xxxxxxx, Attorney at Law; and each party shall pay one-half (1/2) of
the closing fees and expenses listed on Schedule 2, which is attached. At
closing, Seller shall convey good and marketable title to the real property
by warranty deed, and shall furnish Buyer standard ATLA form of title
insurance for the full purchase price thereof, insuring marketable title
thereto. Notwithstanding the foregoing, prior to closing a standard form of
title commitment shall contain exceptions to clear and marketable title, if
any. Summit shall have three (3) days from its receipt of the title
commitment in which to object to any such exceptions. Any objections, if any,
shall be delivered to AloeLabs in writing and shall be cleared at or before
closing.
ARTICLE IV -- LEASE BACK
AloeLabs hereby agrees to, and effective from the date of closing, does
and shall, lease from Summit and Summit hereby agrees to, and effective from
the date of closing, does and shall, lease to AloeLabs the real property
together with al buildings and improvements thereon for a period terminating
on July 1, 1999, unless earlier terminated as provided below. Consideration
for this Lease is set forth in Article VII below.
ARTICLE V -- OTHER IMPROVEMENTS
After closing, Summit agrees to, and shall, provide and arrange for
additional building expansion and improvements on and to the existing
improvements or real property, together with additional manufacturing
production equipment. The proposed additional building expansion is generally
described on Exhibit "B" attached hereto. The proposed additional
manufacturing equipment is described on the attached Exhibit "C". Provided,
however, in the event the additional expansion and additional production
equipment cost to Summit shall exceed a combined total of Two Hundred Fifty
Thousand and No/100 Dollars ($250,000.00), any such excess expenditure, and
the additional expansion and production equipment represented by such excess,
shall be made only upon the express written
REAL ESTATE SALE AND PURCHASE AGREEMENT WITH LEASE - 3
consent of both Summit and AloeLabs. Absent such consent, Summit shall not be
required to provide and arrange for such items which are represented by such
excess. Provided, further, neither party shall be required to give such
consent.
ARTICLE VI -- LEASE OF EXISTING AND OTHER EQUIPMENT
In addition to the real property and improvements leased by AloeLabs
above, as a part of this lease for the time periods specified in this
agreement, and for the consideration set forth in Article VII below (which
consideration formula is adjusted as provided therein to reflect Summit's
cost of providing the same), after closing Summit shall lease to AloeLabs all
of the additional building expansion improvements and additional
manufacturing production equipment described in the preceding Article upon
their acquisition by Summit.
Prior to the execution of this Agreement, Summit purchased equipment
valued at $84,123.00, which equipment is now in the possession of, and being
used by AloeLabs. The purchase of said equipment is hereby affirmed by the
parties, and is more fully described in the following letters attached hereto
respectively as Exhibits "D", "E" and "F":
(a) Letter of December 29, 1988, equipment investment
by Summit for $30,100.00;
(b) Letter of February 23, 1989, equipment investment
of $42,000.00.
(c) Letter of April 25, 1989, equipment investment of
$12,023.00.
Said equipment is a part of this lease agreement for the periods
specified herein, the consideration for which is set forth in Article VII
(which consideration formula is adjusted as provided therein to reflect said
$84,123.00 price paid by Summit).
ARTICLE VII -- LEASE CONSIDERATION
As consideration for the lease of the real property, its buildings and
all other improvements and machinery, equipment or other items leased by
AloeLabs from Summit as provided in Articles IV through VI above, AloeLabs
shall pay Summit the amounts set forth below. Provided, however, subject to
Article VIII below, said lease payments are to be paid by AloeLabs in gallons
of One Hundred Percent (100%) undiluted Aloe Xxxx gel (hereafter "gel") which
shall be fully stabilized, suitable for export purposes and packaged in
fifty-five (55) gallon drums. This gel shall also be the same in all material
respects, including, but not necessarily limited to, the ingredients,
chemical components, quality and nature of such gel which was shipped by
AloeLabs to Summit at all times prior to May 1, 1989. Said drums are to be
delivered to Summit FOB the leased premises, and to the extent reasonably
possible for all shipments of gel to Summit, AloeLabs shall credit Summit's
invoice for the monthly shipments of said gel on the second full container of
gel shipped each month.
The monthly amount of gel to be paid to Summit by AloeLabs during the
term of this lease shall be calculated as follows (partial months, if any,
shall be prorated):
The total amount of Summit's principal investment paid for the real
property, all improvements on the real property, and all machinery,
equipment or other assets which Summit has and which are being leased
by AloeLabs, which amount shall include, but is not limited to, Three
Hundred Thirty-six Thousand Five Hundred Seventy-five and No/100
Dollars ($336,575.00), as specified in Article II above, plus Eighty-
four Thousand One Hundred Twenty-three and No/100 Dollars ($84,123.00),
as set forth in Article VI above; however, said amount shall not
include closing costs paid by Summit in connection herewith. The
amount so determined shall be calculated by Summit, and a list thereof
shall be furnished to AloeLabs.
If additional principal investment is incurred during any month, that
amount shall be added to the total amount as of the date incurred, and
additional monthly rent incurred as a result thereof shall be prorated
for the actual number of days after said amount is added.
The first $600,000.00 thereof shall be divided by $539.00. The
resulting figure (rounded to the nearest whole number in the same
manner as described above) shall be the number of gallons of gel which
shall be paid, based upon the first $600,000.00 of the total principal
investment for each month. (For partial months in the period, that
number of gallons shall be adjusted by multiplying that number by a
fraction, the numerator of which equals the number of the days of the
month to be included, and the denominator of which is the total number
of days in the month. The resulting figure shall be rounded off to the
nearest whole gallon.)
With respect to that protion of Summit's total principal investment
which exceeds $600,000.00, the amount of such excess shall be divided
by
REAL ESTATE SALE AND PURCHASE AGREEMENT WITH LEASE - 5
$566.00, the resulting figure (rounded to the nearest whole number in
the same manner as desrcribed above) shall be the number of gallons of
gel which shall be paid based upon that portion of Summit's principal
investment which exceeds $600,000.00. For partial months, the figure
shall be prorated and adjusted in like manner as is described above.
the total gallons of gel to be paid for any applicable month shall be
the sum of the gallons based upon the first $600,000.00 of Summit's
principal investment, plus the number of gallons based upon the
investment in excess of $600,000.00.
By way of example, if Summit's total principal investment from August
1, 1989, through August 20, 1989, is $552,000.00, and if it pays for
additional capital improvements to the real property on August 21,
1989, so that its total principal investment from August 21, 1989,
through August 31, 1989, is $637,000.00, then August's lease payment
from AloeLabs to Summit would be calculated as follows:
August 1 through August 20 = 20 days
$552,000.00 divided by $539 = 1,024.00
1024.00 x 20
___
31 = 1024.00 x .6452 = 661
gallons of gel
August 21 through August 31 = 11 days
$600,000.00 divided by $539.00 = 1113
$37,000.00 divided by $566.00 = 65
_______
1178
1178 x 11
____
31 =
1178 x .3548 = 418 gallons of gel
Total rent for August = 661 + 418 = 1079
gals. of gel
ARTICLE VIII - ALTERNATIVE TO GEL PAYMENTS
If there shall be little or no demand for Aloe Xxxx products, or a
significant and material decline in the market for Aloe Xxxx products in
Japan;
