Exhibit 10.4
PURCHASE AND SALE AGREEMENT
This PURCHASE AND SALE AGREEMENT (the "AGREEMENT") is made and entered
into by and between LJH, LTD., and/or its permitted assigns ("PURCHASER"), and
AVSRE, L.P., a Delaware limited partnership ("SELLER").
1. SALE/LEASEBACK OF PROPERTY.
1.1 DESCRIPTION OF THE PROPERTY. In consideration of the purchase
price and upon the terms and conditions hereinafter set forth, Seller shall
sell to Purchaser and Purchaser shall purchase from Seller (i) that certain
real property containing approximately 3.779 acres of land on which is situated
a single tenant industrial building, and being located at 0000 Xxxx Xxxxx,
Xxxxxx, Xxxxxx Xxxxxx, Xxxxx (the "IMPROVED PROPERTY"), and (ii) that certain
unimproved tract of land containing approximately 1.55 acres of land, and being
located on the east side of Grissom Lane, north of Nova Drive (the "UNIMPROVED
PROPERTY"), and being all of the following described property (collectively,
the "PROPERTY"):
i. The real property located in Dallas County, Texas,
which is described on EXHIBIT "A" attached hereto, together with all
rights and appurtenances pertaining to such real property, including,
without limitation, any and all right, title, and interest of Seller
in and to adjacent road, alleys, easements, streets and ways (the
"LAND");
ii. All improvements, structures and fixtures placed,
constructed or installed on the Land (the "IMPROVEMENTS");
iii. All (i) mechanical systems and related building
equipment attached to the Improvements or located upon the Land,
including, but not limited to, electrical systems, plumbing systems,
heating systems, air conditioning systems, security, alarm and/or
entry systems, but excluding only the Seller's movable trade fixtures
and items of personal property which are used by Seller solely in
connection with the operation of Seller's business upon the Land and
which can be removed without causing material damage to the Land or
Improvements, and (ii) all utilities, waste water capacity and related
utility rights (collectively, the "PERSONAL PROPERTY");
iv. Seller's interest in all warranties, guaranties and
bonds relating to the Land, the Improvements, and the Personal
Property, to the extent the same are assignable;
v. All site plans, surveys, plans and specifications,
and floor plans in Seller's possession for the Property and which
relate to the Land, the Improvements, or the Personal Property; and
vi. All intangible property owned or held by Seller or
in which Seller has an interest, if any, in connection with any of the
Land or the Improvements or the operations
thereon, and the right to the use thereof, including but not limited
to Seller's rights under governmental permits or approvals (the
"INTANGIBLE PROPERTY").
1.2 LEASEBACK. For and in consideration of the sum of Ten and
No/100 Dollars ($10.00), the mutual covenants of the parties hereunder, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Aircraft Interior Design, Inc. ("AID"), an affiliate of
Seller, agrees to lease the Improved Property from Purchaser pursuant to the
terms of that certain Lease Agreement attached hereto as EXHIBIT "B" (the
"LEASE") to be executed and delivered by AID and Purchaser at the Closing (as
hereinafter defined). AID has executed this Agreement to evidence its
obligations hereunder.
2. PURCHASE PRICE.
2.1 AMOUNT. The purchase price (the "PURCHASE PRICE") for the
Property shall be TWO MILLION FOUR HUNDRED FORTY THOUSAND AND NO/100 DOLLARS
($2,440,000.00) payable to Seller at the Closing, by wire transfer or the
delivery of other immediately available funds to the Title Company (as defined
in Section 3.1 hereof). Purchaser and Seller agree that $2,200,000 of the
Purchase Price shall be allocated to the Improved Property and $240,000 of the
Purchase Price shall be allocated to the Unimproved Property.
2.2 DEPOSIT. To secure the performance of its obligations under
this Agreement, Purchaser has delivered to Commonwealth Land Title Company of
Houston, whose address is 0000 Xxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000,
Attn: Xx. Xxxxx Xxxxxx, as escrow agent (the "ESCROW AGENT"), the sum of Ten
Thousand and No/100 Dollars ($10,000.00) (the "DEPOSIT"). The Deposit, subject
to clearance of funds, shall be held as an xxxxxxx money deposit, which shall
be placed in an interest-bearing account. At Closing, all interest earned on
the Deposit shall be applied to the Purchase Price. The Deposit shall serve as
part of the consideration for Purchaser's right and ability to purchase the
Property, and shall be non-refundable to Purchaser except as otherwise provided
to the contrary by the terms of this Agreement. If this transaction does not
close, then whichever party becomes entitled to the Deposit shall also become
entitled to all interest earned thereon.
3. SURVEY; TITLE COMMITMENT AND INSPECTIONS.
3.1 TITLE. Purchaser has caused, at Seller's expense, Lawyers
Title Insurance Corporation, through its agent, Commonwealth Land Title Company
of Houston (the "TITLE COMPANY") to issue and deliver to Purchaser a current
title commitment (the "TITLE COMMITMENT") for an Owner's Title Policy, showing
the state of the title to the Property which would appear in an Owner's Title
Policy, if issued, accompanied by true, correct and legible copies of all
recorded instruments affecting title to the Property, and committing to issue
such Owner's Title Policy to Purchaser in the full amount of the Purchase
Price. If any exceptions appearing in the Title Commitment are unacceptable to
Purchaser, in Purchaser's sole discretion, or if any aspect of the Survey (as
defined in Section 3.2 hereof) is unacceptable to Purchaser, Purchaser shall
notify
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Seller of such fact in writing within five (5) business days after the date of
this Agreement. Seller shall use reasonable efforts to attempt to eliminate or
modify any such exceptions; however, Seller shall not be obligated to bring any
action or proceeding or to incur any expense (other than nominal postage,
delivery, telephone and similar incidental expenses) in that regard. In the
event Seller is unable to modify and/or eliminate any such exceptions to
Purchaser's satisfaction within five (5) days after receipt of such notice, and
Seller and Purchaser have not entered into a written agreement in regard to the
modification or elimination of such exceptions, Purchaser shall be entitled to
terminate this Agreement and receive the return of the Deposit, together with
all interest earned thereon, or proceed to Closing and accept title to the
Property subject to such unacceptable exceptions without offset or deduction
from the Purchase Price. All exceptions appearing in the Title Commitment or
any matters shown on the Survey to which Purchaser does not object within such
five (5) business day period described above, or which are deemed waived and
accepted by Purchaser as set forth herein are herein referred to as the
"PERMITTED EXCEPTIONS"; provided, however, that as to those exceptions to which
Purchaser does object, if Seller modifies any such exception to Purchaser's
satisfaction, which satisfaction must be evidenced by a written notice executed
by Purchaser, then such exception, as so modified, shall be deemed included in
the term "Permitted Exceptions." Notwithstanding the foregoing, Seller shall be
obligated to eliminate at or prior to the Closing all mortgage liens, absolute
and/or collateral assignments, mechanic's liens, judgments and/or other liens
in a liquidated amount and other similar exceptions to the title to the
Property. In the event Seller fails to eliminate any mortgage lien, absolute
and/or collateral assignment, mechanic's liens judgments and/or other liens in
a liquidated amount or other similar objections to the title of the Property at
the Closing, Purchaser shall have the right to apply such portion of the
Purchase Price to the satisfaction of such liens, assignments, or other similar
exceptions as is necessary to fully discharge the same.
3.2 SURVEY. Prior to the execution of this Agreement, Seller has
caused to be delivered to Purchaser five (5) sets of originals of a current or
updated as-built survey of the Land and the Improvements (the "SURVEY"), which
were prepared and certified by a duly licensed land surveyor acceptable to
Purchaser. The Survey shall be certified to the Purchaser, the Purchaser's
lender, and the Title Company. Seller shall be solely responsible for the cost
of the Survey.
3.3 OTHER INFORMATION. Within five (5) business days after the
date of this Agreement, Seller shall, at Seller's sole cost and expense,
deliver to Purchaser true, correct and complete copies of all of the items
described on EXHIBIT "C" ("SELLER'S INFORMATION"), to the extent such Seller's
Information is in Seller's possession or control. Purchaser acknowledges that
Seller's Information is being provided to Purchaser solely as an accommodation
to Purchaser. Purchaser further hereby acknowledges and agrees that, except as
expressly provided herein or in the closing documents, Seller is making
absolutely no representation or warranty whatsoever with respect to the
substance of any third party reports included within Seller's Information, and
Purchaser hereby acknowledges and agrees that Purchaser shall be required to
verify the accuracy and details of such third party reports included within
Seller's Information as Purchaser deems appropriate. In the event of the
termination of this Agreement for any reason, Purchaser shall immediately
return all of Seller's Information to Seller.
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3.4 INSPECTIONS. Purchaser may, prior to the Closing Date (as
defined in Section 6.1 hereof), personally, or through others, make such
inspections, tests and investigations of the Property (including, without
limitation, borings and physical samplings) and such examinations of the books,
records, contracts, agreements and other instruments of Seller relating to the
Property as Purchaser deems necessary or advisable, provided said activities
shall not in any way damage the Property and further provided that Purchaser
shall use its good faith efforts to minimize disruption to the ordinary course
of business of Seller operated upon the Property. For purposes of the
inspections, tests and investigations contemplated by this Section 3.4, Seller
shall give those persons inspecting the Property at Purchaser's request
reasonable access to the Property provided that Purchaser gives Seller
reasonable prior notice in requesting such access. The cost of the inspections,
tests and investigations undertaken by Purchaser pursuant to this Section 3.4
shall be borne solely by Purchaser, except only as otherwise expressly set
forth in this Agreement. Purchaser agrees to indemnify and hold Seller harmless
against any liabilities, claims, damages, costs or expenses, including, without
limitation, all attorneys' fees, and including, without limitation, any
property damage or personal injury or claim of lien against the Property,
resulting from the activities permitted by this Section 3.4, which indemnity
shall survive the Closing or the termination, expiration or cancellation of
this Agreement. In the event of the termination of this Agreement for any
reason, Purchaser shall restore the Property to its condition prior to such
inspections, tests and investigations, and Purchaser, at no cost to Seller and
without representation or warranty, shall provide Seller with copies of all
reports, studies, surveys or similar information (other than internally
generated reports) obtained by Purchaser with respect to the Property. The
right of access to the Property granted hereby shall in no way be construed as
giving Purchaser possession of or any legal or suitable title to the Property
prior to the Closing.
3.5 ENVIRONMENTAL REPORTS. In the event Purchaser's Phase I or
Phase II environmental audits reveal the existence of any Hazardous Materials
(as hereinafter defined) beyond legal limits or the violation of any
Governmental Requirement relating to Hazardous Materials, then the Purchaser
shall provide written notice of same to Seller and Seller shall, at its sole
cost and expense, remediate such matters. In the event Seller elects not to
remediate, Purchaser's sole remedies shall be either to (i) proceed to Closing,
or (ii) terminate this Agreement and receive the return of the Deposit together
with a reimbursement by Seller of Purchaser's actual out of pocket expenses
relating to this transaction (including legal fees).
4. REPRESENTATIONS, WARRANTIES AND COVENANTS.
4.1 SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents
and warrants to Purchaser as follows (which representations and warranties
shall be true and correct as of the date hereof and as of the Closing Date):
(a) At the Closing, Seller will convey or cause to be
conveyed to Purchaser good and indefeasible fee simple title to the
Property, subject only to the Permitted Exceptions, in accordance with
Section 3.1 hereof. All Personal Property located on the Land is owned
by Seller.
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(b) Seller is duly organized and legally existing under
the laws of the State of its incorporation and is duly qualified to do
business in the State of Texas. The execution and delivery of, and
Seller's performance under, this Agreement are within Seller's powers
and shall have been duly authorized by all requisite corporate action
prior to the Closing Date. The person executing this Agreement on
behalf of Seller has the authority to do so. This Agreement
constitutes the legal, valid and binding obligation of Seller
enforceable in accordance with its terms. Performance of this
Agreement will not result in any breach of, or constitute any default
under, or result in the imposition of any lien or encumbrance upon the
Property under, any agreement or other instrument to which Seller is a
party or by which Seller or the Property might be bound.
(c) Except as set forth in the Title Commitment, to the
actual knowledge of Seller, there are no existing or pending
litigation actions, or claims, with respect to the Property nor to
Seller's actual knowledge, have any such actions, suits, proceedings
or claims been threatened or asserted. Furthermore, Seller has not
received any notice of any existing, pending or threatened litigation
actions or claims with respect to the Property.
(d) No portion of any other tract of real property is
used by Seller, whether pursuant to a written agreement or otherwise,
which is necessary for the full use and enjoyment of the Property.
(e) Seller and AID are in sole and exclusive possession
of the Property, and there are no leases, licenses, or rental
agreements for the occupancy or use of all or any portion of the
Property.
(f) No person, firm, corporation or other entity (other
than the Purchaser hereunder) has any right or option to acquire the
Property, or any part thereof, from Seller.
(g) There are no maintenance, repair, service, pest
control or other contracts pursuant to which services or goods are
provided to the Property (collectively, the "SERVICE CONTRACTS") which
are delinquent or that are not terminable by Seller without penalty
after no more than thirty (30) days' notice. Seller acknowledges and
agrees that Purchaser shall not be obligated to assume any Service
Contracts at Closing; provided, however, Seller and/or AID may
continue to maintain the Service Contracts following the Closing in
connection with its continued occupancy of the Property under the
Lease.
(h) There are no leases covering the Personal Property.
(i) Seller has not received, with respect to the
Property, any notice from any insurance company, governmental agency
or any other party of, nor, to Seller's actual
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knowledge, are there any facts or circumstances which could give rise
to, (i) any condition, defect, or inadequacy affecting the Property
that, if not corrected, would result in termination of insurance
coverage or increase its cost, (ii) any violation of any restrictive
covenant or deed restriction affecting the Property and any building
codes and/or zoning ordinances or other Governmental Requirements (as
defined in Section 4.1 (n)(i)(5) hereof), (iii) any pending or
threatened condemnation proceedings, and (iv) any proceedings that
could or would cause the change, redefinition, or other modification
of the zoning classification, or of other legal requirements,
applicable to the Property or any part thereof, or any property
adjacent to the Property. To Seller's actual knowledge, there does not
exist any court order, building code provision, deed restriction or
restrictive covenant (recorded or otherwise) or other private or
public limitation, which might in any way impede or adversely affect
the use of the Property by Purchaser as a warehouse, office and
manufacturing complex.
(j) To Seller's actual knowledge, the Improvements and
the Personal Property (including all mechanical systems servicing the
Improvements) are in proper operating condition, free from any
material physical or mechanical defect and fully usable for their
intended purpose.
(k) To Seller's actual knowledge, all water, sewer,
electric, natural gas, telephone, drainage facilities and other
utilities, to the extent available and required for the current use of
the Property, are installed to the Property, are connected with valid
permits, comply with all Governmental Requirements and are adequate to
service the Property for its intended use. To Seller's actual
knowledge, all utilities lines servicing the Property are located
either within the boundaries of the Property or within lands dedicated
to the public use, or within recorded easements for such purpose and
are serviced and maintained by the appropriate public or quasi-public
entity.
(l) Seller is not a "foreign person" within the meaning
of Sections 1445 and 7701 the Internal Revenue Code of 1986, as
amended (hereinafter, the "CODE").
(m) To Seller's actual knowledge, no commitments have
been made to any governmental authority, utility company, school
board, church or other religious body, or any homeowners or
homeowners' association, or any other organization, group or
individual, relating to the Property which would impose an obligation
upon Purchaser or its successors or assigns to make any contribution
or dedications of money or land or to construct, install or maintain
any improvements of a public or private nature on or off the Property.
To Seller's actual knowledge, no governmental authority has imposed
any requirement that any developer of the Property pay directly or
indirectly any special fees or contributions or incur any expenses or
obligations in connection with any development of the Property or any
part thereof. The provisions of this subparagraph shall not apply to
any regular or nondiscriminatory local real estate or school taxes
assessed against the Property.
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(n) ENVIRONMENTAL MATTERS.
(i) DEFINITIONS. Unless the context otherwise
specifies or requires, the following terms shall have the
respective meanings herein specified:
(1) The term "ENVIRONMENTAL LOSSES"
shall mean any liability, loss, cost or expense
including, without limitation, costs of
investigation, cleanup, remedial or response action,
the costs associated with posting financial
assurances for the completion of response, remedial
or corrective actions, the preparation of any
closure or other necessary or required plans or
analyses, or other reports or analyses submitted to
or prepared by regulating agencies, including the
cost of health assessments, epidemiological studies
and the like, retention of engineers and other
expert consultants, legal counsel, capital
improvements, operation and maintenance, testing and
monitoring costs, power and utility costs, taxes or
fees, and administrative costs incurred by any
governmental agency or person, caused by or related
to any Hazardous Materials Contamination at the
Property during, and only during, Seller's ownership
thereof or any other expenses or liability caused by
or related to any Hazardous Materials Contamination
at the Property during, and only during, Seller's
ownership thereof.
(2) The term "ENVIRONMENTAL REPORTS"
means any existing environmental reports, or audits
or surveys Seller timely delivers to Purchaser
pursuant to subsection 3.3 above.
(3) The term "HAZARDOUS MATERIALS"
shall mean (i) any "hazardous waste" as defined by
the Resource Conservation and Recovery Act of 1976
(42 U.S.C. Section 6901 et seq.), as amended from
time to time, and regulations promulgated thereunder
("RCRA"); (ii) any "hazardous substance" as defined
by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C.
Section 9601 et seq.), as amended from time to time,
and regulations promulgated thereunder ("CERCLA")
(including petroleum-based products as described
therein); (iii) other petroleum and petroleum-based
products; (iv) asbestos in any quantity or form
which would subject it to regulation under any
applicable Hazardous Materials Law (hereinafter
defined); (v) polychlorinated biphenyls; (vi) any
substance, the presence of which on the Property is
prohibited by any Hazardous Materials Law; and (vii)
any other substance which, by any Hazardous
Materials Law, requires special handling in its
collection, storage, treatment or disposal.
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(4) The term "HAZARDOUS MATERIALS
CONTAMINATION" shall mean the contamination (whether
presently existing or hereafter occurring) of the
Improvements, facilities, soil, groundwater, air or
other elements on or of the Property by Hazardous
Materials, or the contamination of the buildings,
facilities, soil, groundwater, air or other elements
on or of any other property as a result of Hazardous
Materials emanating from the Property.
(5) The term "GOVERNMENTAL
REQUIREMENTS" shall mean all laws, ordinances,
statutes, codes, rules, regulations, orders and
decrees of the United States, the state, the county,
the city, or any other political subdivision in
which the Property is located, and any other
political subdivision, agency or instrumentality
exercising jurisdiction over Seller or the Property.
(6) The term "HAZARDOUS MATERIALS
LAWS" shall mean all Governmental Requirements,
including, without limitation, RCRA and CERCLA,
relating to the handling, storage, existence of or
otherwise regulating any hazardous wastes, hazardous
substances, toxic substances, radioactive materials,
pollutants, chemicals, contaminants or industrial
substances or relating to the removal or remediation
of any of the foregoing.
(ii) REPRESENTATIONS AND WARRANTIES. Seller
hereby represents and warrants to Purchaser that:
(1) Since the date that Seller
acquired an interest in the Property (such date
herein called the "ACQUISITION DATE"), except as
disclosed in the Environmental Reports and except as
have been used by Seller in the Seller's ordinary
course of business and in compliance with all
applicable Hazardous Materials Laws, no Hazardous
Materials have been released into the environment,
or deposited, discharged, placed or disposed of at,
on, from or under the Property by Seller or, to
Seller's actual knowledge and, except as disclosed
in the Environmental Reports, by any third party
(other than routine leakage of gasoline and
antifreeze from automobiles parked from time to time
on the Property), and to Seller's actual knowledge
and, except as disclosed in the Environmental
Reports, there occurred no such release, deposit
discharge, placement or disposal prior to the
Acquisition Date. Except as disclosed in the
Environmental Reports and except as have been used
by Seller in the Seller's ordinary course of
business and in compliance with all applicable
Hazardous Materials Laws, no portion of the Property
is presently being used for the disposal, storage,
treatment, processing or other handling of Hazardous
Materials and, to Seller's actual knowledge and
except as disclosed in the Environmental Reports and
except as have been used by Seller in the Seller's
ordinary course of business and in compliance with
all applicable Hazardous Materials Laws, no
Hazardous Materials have been placed or located on
the Property. To Seller's actual knowledge and
except as disclosed in the Environmental Reports and
except as have been
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used by Seller in the Seller's ordinary course of
business and in compliance with all applicable
Hazardous Materials Laws, no part of the Property
has ever been used for the disposal, storage,
treatment, processing, manufacturing or other
handling of Hazardous Materials (other than those in
insignificant and harmless quantities which do not
violate Hazardous Materials Laws). Since the
Acquisition Date, to Seller's actual knowledge and
except as disclosed in the Environmental Reports, no
Hazardous Materials Contamination has occurred on
the Property. To Seller's actual knowledge and
except as disclosed in the Environmental Reports, no
Hazardous Materials Contamination occurred on the
Property prior to the Acquisition Date.
(2) To Seller's actual knowledge and
except as disclosed in the Environmental Reports, no
property adjoining the Property is or has ever been
used for the disposal, storage, treatment,
processing, manufacturing or other handling of
Hazardous Materials (other than those in
insignificant and harmless quantities which do not
violate any Hazardous Waste Laws), and to Seller's
actual knowledge, and except as disclosed in the
Environmental Reports, no property adjoining the
Property is affected by Hazardous Materials
Contamination.
(3) To Seller's actual knowledge and
except as disclosed in the Environmental Reports, no
asbestos or asbestos-containing materials have been
placed on or in the Property by Seller and to
Seller's actual knowledge and except as disclosed in
the Environmental Reports, no asbestos or
asbestos-containing materials are present on or in
the Property.
(4) To Seller's actual knowledge and
except as disclosed in the Environmental Reports, no
polychlorinated biphenyls have been placed on the
Property by Seller and to Seller's actual knowledge
and except as disclosed in the Environmental
Reports, no polychlorinated biphenyls are present on
the Property.
(5) To Seller's actual knowledge and
except as disclosed in the Environmental Reports, no
underground storage tanks have been placed on or
under the Property by Seller, and to Seller's actual
knowledge and except as disclosed in the
Environmental Reports, no underground storage tanks
are present or were at any time located on or under
the Property.
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(6) To Seller's actual knowledge and
except as disclosed in the Environmental Reports, no
administrative order or notice, consent order and
agreement, litigation or settlement with respect to
Hazardous Materials or Hazardous Materials
Contamination is in existence or, to Seller's actual
knowledge and except as disclosed in the
Environmental Reports, proposed, threatened or
anticipated with respect to the Property, nor has
Seller received notice of any such action regarding
any property adjacent to the Property. To Seller's
actual knowledge and, except as disclosed in the
Environmental Reports, no investigation with respect
to the Hazardous Materials or Hazardous Materials
Contamination is proposed, threatened or anticipated
with respect to the Property. Seller has not
violated any Governmental Requirements relating to
Hazardous Materials with respect to the Property,
and, to Seller's actual knowledge and, except as
disclosed in the Environmental Reports, no third
party has violated any Governmental Requirements
relating to Hazardous Materials with respect to the
Property. To Seller's actual knowledge and except as
disclosed in the Environmental Reports, no condition
occurred on the Property prior to the Acquisition
Date that is or was in violation of any applicable
Governmental Requirements relating to Hazardous
Materials. Seller has received no communication from
or on behalf of any Governmental Authority or any
other person or entity indicating that any
applicable Governmental Requirements relating to
Hazardous Materials have been or may have been
violated with respect to the Property. The Property
is not currently on and, to Seller's actual
knowledge and except as disclosed in the
Environmental Reports, has never been on, any
federal or state "Superfund" or "Superlien" list,
and Seller is not aware that the Property is
anticipated or threatened to be placed on any such
list. Seller has received no notice of any third
party claims regarding damage to property or persons
resulting from any Hazardous Materials Contamination
affecting the Property.
(iii) ENVIRONMENTAL INDEMNIFICATION.
(1) INDEMNITY. Seller hereby agrees to
assume liability for and to pay, indemnify, defend,
and hold harmless Purchaser from and against any and
all Environmental Losses caused by Hazardous
Materials contamination that occurred during
Seller's period of ownership of the Property,
subject only to the provisions of Section
4.1(n)(iii)(3) below.
(2) ASSUMPTION OF DEFENSE.
(a) If Purchaser notifies
Seller of any claim, demand, action,
administrative or legal proceeding,
investigation or allegation as to which the
indemnity provided for in this Section
4.1(n)(iii)
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applies, Seller shall assume on behalf of
Purchaser and conduct with due diligence
and in good faith the investigation and
defense thereof and the response thereto
with counsel reasonably satisfactory to
Purchaser; provided, that Purchaser shall
have the right to be represented by
advisory counsel of its own selection and
at its own expense; and provided further,
that if any such claim, demand, action,
proceeding, investigation or allegation
involves both Seller and Purchaser and
Purchaser shall have reasonably concluded
that there may be legal defenses available
to it which are inconsistent with or in
addition to those available to Seller, then
Purchaser shall have the right to select
separate counsel to participate in the
investigation and defense of and response
to such claim, demand, action, proceeding,
investigation or allegation on its own
behalf at Seller's expense.
(b) If any claim, demand,
action, proceeding, investigation or
allegation arises as to which the indemnity
provided for in this Section 4.1(n)(iii)
applies, and Seller fails to assume
promptly (and in any event within fifteen
(15) days after being notified of the
claim, demand, action, proceeding,
investigation or allegation) the defense of
Purchaser, then Purchaser may contest (or,
with the prior written consent of Seller,
settle) the claim, demand, action,
proceeding, investigation or allegation at
Seller's expense using counsel selected by
Purchaser; provided, that after any such
failure by Seller which continues for
thirty (30) days or more no such contest
need be made by Purchaser and settlement or
full payment of any claim may be made by
Purchaser without Seller's consent and
without releasing Seller from any
obligations to Purchaser under this Section
4.1(n)(iii) if, in the written opinion of
reputable counsel to the Purchaser, the
settlement or payment in full is clearly
advisable.
(3) NOTICE OF ENVIRONMENTAL LOSSES. If
Purchaser receives a written notice of Environmental
Losses that Purchaser believes are covered by this
Section 4.1(n)(iii), then Purchaser shall promptly
furnish a copy of such notice to Seller. The failure
to so provide a copy of the notice to Seller shall
not excuse Seller from its obligations under this
Section 4.1(n)(iii); provided, that if Seller is
unaware of the matters described in the notice and
such failure renders unavailable defenses that
Seller might otherwise assert, or precludes actions
that Seller might otherwise take, to minimize its
obligations hereunder, then Seller shall be excused
from its obligation to indemnify Purchaser against
assessments, fines, costs and expenses, if any,
which would not have been incurred but for such
failure. For example, if Purchaser fails to provide
Seller with a copy of a notice of an obligation
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covered by the indemnity set out in subsection
4.1(n)(iii)(1) and Seller is not otherwise already
aware of such obligation, and if as a result of such
failure Purchaser becomes liable for penalties and
interest covered by the indemnity in excess of the
penalties and interest that would have accrued if
Seller had been promptly provided with a copy of the
notice, then Seller will be excused from any
obligation to Purchaser to pay the excess.
(4) RIGHTS CUMULATIVE. The rights of
Purchaser under this Section 4.1(n)(iii) shall be in
addition to any other rights and remedies of
Purchaser against Seller under the other provisions
of this Agreement or under any other document or
instrument now or hereafter executed by Seller, or
at law or in equity (including, without limitation,
any right of reimbursement or contribution pursuant
to CERCLA).
(o) Valid and final certificates of occupancy
(or the legal equivalent thereof) have been issued for all
Improvements on the Land and there is no unfinished
construction work nor open permits.
(p) All delivery items made by Seller to
Purchaser pursuant to subsection 3.3 above are true and
complete copies in Seller's possession.
(q) Seller is not in default with respect to
any indebtedness secured by any liens upon the Property, or
any part thereof, nor of any such lien document, and no
condition exists that, with notice and/or passage of time,
could if unremedied give rise to a right for the holder of
any such debt to accelerate the maturity date thereof.
(r) Seller has not failed to disclose to
Purchaser any fact or condition known to Seller that would
materially and adversely affect the continued use or
operation of the Property in the manner of its present use
and operation.
(s) The Property has permanently committed and
lawfully connected to it adequate water service, sewer
service and drainage capacity and facilities to service the
Property as presently being operated, and Seller has no
knowledge of any proposed curtailment of utility service,
including water, sewer, electricity, gas, and telephone
service.
(t) The Property has full and unrestricted
legal access to all adjacent roads and streets abutting the
Property, and such roads and streets are dedicated public
rights-of-ways and have been constructed and accepted for
maintenance by the applicable governmental authorities.
In the event that prior to Closing, any representation or warranty shall be
discovered by Purchaser to be materially incorrect, then Purchaser's sole
remedy in such event shall be either (i) to waive such breach and proceed to
consummate the transaction contemplated by this Agreement without
12
reduction of the Purchase Price, or (ii) terminate this Agreement and receive a
full refund of the Deposit, together with the actual out of pocket expenses
incurred by Purchaser in connection with this transaction (including all legal
fees). Seller's representations and warranties as contained herein shall
survive the Closing Date for a period equal to the term of the Lease; provided,
however, (i) Seller's total liability for breach of its representations and
warranties contained herein shall in no event exceed the Purchase Price, and
(ii) Seller shall have no liability whatsoever to Purchaser with respect to a
breach of a representation or warranty herein contained if Purchaser obtains
actual knowledge of a fact or circumstance the existence of which would
constitute a breach of such representation or warranty hereunder prior to the
Closing Date and Purchaser still elects to close.
EXCEPT AS EXPRESSLY REPRESENTED OR WARRANTED IN THIS AGREEMENT OR IN
ANY CLOSING DOCUMENTS DELIVERED PURSUANT TO THIS AGREEMENT, PURCHASER
ACKNOWLEDGES THAT NEITHER SELLER NOR ANY AGENT, OFFICER, EMPLOYEE OR
REPRESENTATIVE OF SELLER HAS MADE ANY STATEMENT OR REPRESENTATION REGARDING THE
SUBJECT MATTER OF THIS TRANSACTION OR ANY FACT THEREOF, INCLUDING, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, ANY STATEMENT OR REPRESENTATION AS TO
THE FISCAL NATURE OR CONDITION OF THE PROPERTY, SOIL AND SUBSOIL CONDITIONS,
SURFACE WATER, UNDERGROUND WATER, THE PROPERTY'S FEASIBILITY FOR ANY PARTICULAR
PURPOSE, DEVELOPMENT, USE, IMPROVEMENT OR OPERATION OR ANY OTHER MATTER OR
THING AFFECTING OR RELATED TO THE PROPERTY. PURCHASER AGREES AND ACKNOWLEDGES
THAT EXCEPT AS PROVIDED IN THIS AGREEMENT OR IN ANY CLOSING DOCUMENTS DELIVERED
PURSUANT TO THIS AGREEMENT, PURCHASER IS MAKING NO EXPRESS OR IMPLIED
WARRANTIES (INCLUDING ANY WARRANTY AS TO THE PROPERTY'S FITNESS FOR A
PARTICULAR USE OR PURPOSE), GUARANTY, PROMISE, REPRESENTATION OR ASSURANCE.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN ANY CLOSING DOCUMENTS
DELIVERED PURSUANT TO THIS AGREEMENT, PURCHASER ACCEPTS THE PROPERTY IN "AS-IS
CONDITION" AND "WITH ALL FAULTS".
4.2 SELLER'S COVENANTS. Seller hereby covenants and agrees with
Purchaser that, after the date of this Agreement and through the earlier of the
Closing or the termination of this Agreement:
(a) Seller shall not enter into any Service Contract, or
otherwise permit AID to enter into any Service Contract, except for
those Service Contracts that Seller and/or AID intend to continue to
utilize following the Closing in connection with AID's occupancy of
the Property pursuant to the Lease. Further, Seller shall not enter
into any lease of all or any portion of the Property.
(b) Seller shall neither, nor permit AID to, transfer
nor remove any Personal Property or fixtures from the Property, except
for any of such Personal Property as is
13
replaced by Seller and/or AID by an article of equal suitability and
value, free and clear of any lien or security interest, and Seller
shall not, nor permit AID to, make any material alterations to any
portion of the Property.
(c) Seller will continue to maintain and operate the
Property in a prudent manner consistent with Seller's previous
standard maintenance and operations and will keep the improvements and
equipment forming a part of the Property in proper operating
condition, causing all necessary repairs, renewals and replacements to
be promptly made and will keep such improvements occupied so as not to
impair the insurance carried thereon. Seller will not cause or permit
any grading, excavation or construction upon the Property or any
addition, alteration or removal of any improvements, fixtures or
equipment forming a part of the Property. Seller will not use or
occupy, or allow the use or occupancy of, the Property in any manner
which violates any Governmental Requirements or which constitutes
waste or a public or private nuisance or which makes void, voidable or
cancelable, or increases the premium of, any insurance then in force
with respect thereto. Seller will not initiate or permit any zoning
reclassification of the Property or seek any variance under existing
zoning ordinances applicable to the Property to use or permit the use
of the Property in such a manner which would result in such use
becoming a nonconforming use under applicable zoning ordinances or
other Governmental Requirements. Seller will not impose any
restrictive covenants or encumbrances on the Property or execute or
file any subdivision plat affecting the Property.
(d) Seller hereby agrees that from the date hereof until
the Closing, it will maintain in full force and effect fire and
extended coverage insurance upon the Property and public liability
insurance with respect to damage or injury to persons or property
occurring on the Property in such amounts as is maintained by Seller
on the date of this Agreement.
(e) Seller, on behalf of itself, its agents, contractors
and representatives, agrees that during the term hereof, it will not
solicit or accept any offers to purchase the Property from any party
other than Purchaser and will not market the Property to any other
parties.
(f) Seller will cause to be paid any unpaid taxes and
assessments heretofore levied or assessed against the Property or any
part thereof, including ad valorem taxes for the year 2001 (to the
extent due and payable).
(g) Immediately upon obtaining knowledge of the
institution (or threatened institution) of any proceedings for the
condemnation of the Property, or any portion thereof, or any other
proceedings arising out of injury or damage to the Property, or any
portion thereof, Seller will notify Purchaser of the pendency of such
proceedings.
(h) Seller will advise Purchaser promptly of any change
in any Governmental Requirements which might affect the value or use
of the Property by Purchaser and of which Seller obtains knowledge.
Seller will also advise Purchaser promptly of any
14
litigation, arbitration or administrative hearing concerning or
affecting the Property of which Seller has actual knowledge or notice.
(i) Seller shall neither grant nor consent to or permit
the filing of any lien or encumbrance against the Property or any
portion thereof subsequent to the date of this Agreement.
(j) Seller will, or shall cause AID to, punctually
perform and discharge each and every obligation or undertaking of
Seller under the Service Contracts.
4.3 PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser
represents and warrants to Seller that Purchaser has duly and validly
authorized and executed this Agreement, and it has full right, title, power and
authority to enter into this Agreement and to carry out all of its terms.
4.4 ESTOPPEL; SNDA. On or before five (5) days before Closing,
Seller will deliver to Purchaser a completed Estoppel Certificate in a form
reasonably acceptable to Seller, Purchaser and Purchaser's lender, and signed
by AID. In addition, on or before five (5) days before Closing, Seller shall
obtain from AID and deliver to Purchaser a fully executed subordination,
non-disturbance and attornment agreement ("SNDA"), in a form reasonably
acceptable to Seller, Purchaser and Purchaser's lender, and signed by AID. If
Seller has not delivered to Purchaser an executed Estoppel Certificate and SNDA
from AID at least five (5) days before the Closing Date, then Purchaser shall,
as its sole remedy except as stated below, be entitled to either (i) waive the
requirement for an executed Estoppel Certificate and SNDA from AID, or (ii)
terminate this Agreement by giving written notice thereof to Seller, and
receive a full refund of the Deposit, whereupon Seller and Purchaser shall be
released from all further obligations under this Agreement. Further, if the
SNDA does not contain non-disturbance language reasonably satisfactory to AID,
then Seller may, at least five (5) days before the Closing Date, terminate this
Agreement by giving written notice thereof to Purchaser, whereupon Seller and
Purchaser shall be released from all further obligations under this Agreement
(provided that the Deposit is returned to Purchaser).
5. CONDITIONS.
5.1 CONDITIONS FOR PURCHASER'S BENEFIT. The obligations of
Purchaser to consummate the transaction contemplated hereby are subject to the
following conditions, any of which, if not fulfilled by the Closing or as
otherwise provided herein, shall entitle Purchaser (at its option) to terminate
this Agreement and receive a full refund of the Deposit, together with the
actual out of pocket expenses incurred by Purchaser in connection with this
transaction (including all legal fees):
(a) The transactions contemplated under this Agreement
to be effected on the Closing Date shall not have been restrained or
prohibited by any injunction or order or judgment rendered by any
court or other governmental agency of competent jurisdiction and no
proceeding shall have been instituted and be pending in which any
creditor of Seller or any other person seeks to restrain such
transactions or otherwise to attach any of the
15
Property, provided that any such proceeding or action contemplated by
this Section 5.1(a) shall not be deemed to include any proceeding or
action brought by, through or under Purchaser.
(b) No change shall have occurred, without Purchaser's
written consent, in the state of title matters disclosed in the Title
Commitment and the Survey, and no material and adverse change shall
have occurred in any of the other matters inspected by Purchaser
pursuant to Section 3.3 hereof.
(c) Seller shall have timely complied with its
obligations and covenants hereunder.
(d) All warranties and representations made by Seller
herein shall have been and remain truthful in all material respects.
If any one of the above conditions is not satisfied, Purchaser may, at its
option, waive such condition or Purchaser may terminate this Agreement by
written notice thereof to Seller, in which the Deposit, together with all
interest earned thereon, shall be returned to Purchaser and the parties shall
have no further rights or obligations hereunder.
5.2 CONDITIONS FOR SELLER'S BENEFIT. The obligations of Seller to
consummate the transaction contemplated hereby are subject to the following
conditions which, if not fulfilled by the Closing or as otherwise provided
herein, shall entitle Seller, at its option, to terminate the Agreement (in
which event the Deposit, together with all interest earned thereon, shall be
returned to Purchaser and the parties shall have no further rights or
obligations hereunder):
(a) Purchaser shall have timely complied with its
obligations and covenants hereunder.
(b) All warranties and representations made by Purchaser
herein shall have been and remain truthful in all material respects.
6. CLOSING.
6.1 CLOSING. The closing of the transaction contemplated herein
shall be held on or before September 30, 2002, or such earlier date as may be
designated by Purchaser in a written notice to Seller given at least five (5)
business days prior to the proposed Closing (the "CLOSING DATE" or the
"CLOSING"). The Closing shall be held at the offices of the Title Company
(which agrees to perform the services of escrow agent for such Closing), or at
such other location as may be acceptable to Seller and Purchaser.
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(a) At Closing, the Seller shall deliver, or cause to be
delivered, to Purchaser the items specified herein and the following
documents and instruments, each duly executed and acknowledged:
(i) A Special Warranty Deed (the "DEED") dated
as of the Closing Date, conveying the Land and the
Improvements to Purchaser or its permitted assignee, subject
only to the Permitted Exceptions, in the form of EXHIBIT "D"
attached hereto.
(ii) An "AS-IS" Xxxx of Sale and Blanket
Assignment conveying and assigning to Purchaser or its
permitted assignee the property described therein, subject
only to the Permitted Exceptions, in the form of EXHIBIT "E"
attached hereto.
(iii) Evidence acceptable to the Title Company
and to Purchaser, authorizing the consummation by Seller of
the purchase and sale transaction contemplated hereby and the
execution and delivery of the closing documents on behalf of
Seller.
(iv) An executed certificate with respect to
Seller's non-foreign status sufficient to comply with the
requirements of Section 1445 of the Code, commonly known as
the Foreign Investment in Real Property Tax Act of 1980, and
regulations applicable thereto.
(v) All other documents or things reasonably
required to be delivered to Purchaser or by the Title Company
to evidence Seller's ability to transfer the Property to
Purchaser.
(vi) An executed copy of Internal Revenue
Service Form 1099 as required by the Tax Reform Act of 1986,
and all regulations applicable thereto.
(vii) The executed Lease.
(viii) To the extent applicable, letters executed
by Seller addressed to each utility company servicing the
Property advising of the change of ownership of the Property.
(b) At the Closing, Purchaser, or its permitted
assignee, shall do the following:
(i) Pay to the Title Company the Purchase Price
set forth in Section 2.1 adjusted as provided herein, by wire
transfer in immediately available funds to a bank account
designated by the Title Company, such funds to be received by
the Title Company prior to 2:00 p.m. (Houston, Texas time) on
the Closing Date.
17
(ii) Provide evidence reasonably acceptable to
the Title Company authorizing the consummation by Purchaser
of the purchase and sale transaction contemplated hereby and
the execution and delivery of the closing documents on behalf
of Purchaser.
(iii) Execute an original of the Xxxx of Sale and
Blanket Assignment.
(iv) Execute an original Lease.
(v) Execute a landlord's waiver in favor of
Citibank USA, Inc., as Agent, in substantially the form
attached hereto as EXHIBIT "F".
(c) At the Closing, Seller and Purchaser shall execute
and deliver a closing statement and such other instruments and
documents as may be necessary in order to complete the Closing of the
transactions contemplated hereunder, the form and content of which
shall be acceptable to Seller and Purchaser.
6.2 TITLE ASSURANCE. At the Closing, Seller shall cause the Title
Company, at Seller's expense, to furnish Purchaser with a UCC Search Report
certified by the Secretary of State of Texas, and by the appropriate official
of Dallas County, Texas, indicating that, as of the Closing Date, there are no
filings against any of the Personal Property. The Title Company shall, at
Seller's expense, issue a Texas standard form of Owner's Policy of Title
Insurance as prescribed by the Texas State Board of Insurance (the "Owner's
Policy"), dated as of the Closing Date, insuring Purchaser's fee simple title
to the Property, as well as all appurtenant easements, in the full amount of
the Purchase Price, subject only to the Permitted Exceptions. The Owner's
Policy shall also be subject to the standard printed exceptions provided for in
the standard form of title insurance approved by the State Board of Insurance
in the State of Texas; provided, however, that:
(a) the Owner's Policy shall not contain any exceptions
for the following: (A) any liens, restrictions, easements,
encroachments, encumbrances or exceptions other than Permitted
Exceptions; or (B) rights of parties in possession, except for parties
in possession in accordance with the terms of the Lease;
(b) the standard survey exception (i.e., Item 2 on
Schedule B) shall be modified at Purchaser's cost to read "shortages
in area" only;
(c) the exception for liens for standby fees and taxes
shall be limited to the year of the Closing "not yet due and payable,"
and Seller hereby agrees to pay at the Closing all standby fees and ad
valorem tax assessments due for prior years, whether simply accrued
and delinquent or due to change in land use or ownership;
18
(d) the exception for restrictions shall be deleted
unless there are Permitted Exceptions that constitute restrictions in
which event this exception shall be endorsed "none of record except"
those particular Permitted Exceptions, if any; and
(e) any mandatory arbitration clause shall be deleted.
6.3 DELIVERY OF DOCUMENTS AND POSSESSION AND PROVIDING ACCESS TO
OTHER ITEMS. At the Closing, Seller shall provide Purchaser with the originals
of all available documents, copies of which were provided to Purchaser pursuant
to Section 3.3 hereof and shall deliver possession of the Property to Purchaser
subject only to the rights of AID under the Lease. Seller shall also provide
Purchaser with reasonable access to those portions of Seller's books and
records that relate to the Property.
6.4 CLOSING COSTS. Seller shall pay the cost of the Survey, the
Owner's Policy, one-half (1/2) of any Title Company escrow fees, any ad valorem
tax "roll-backs" and all amounts necessary to clear the Project of liens and
encumbrances that are not Permitted Exceptions. All other escrow and closing
costs shall be allocated between Seller and Purchaser in the customary manner
in the county in which the Property is located, for transactions of the type
contemplated hereby; provided, so long as no breach of this Agreement shall
have occurred, each party shall pay its own attorney's fees incurred in
connection with the transaction which is the subject of this Agreement.
6.5 POSSESSION. Purchaser shall be entitled to full and exclusive
possession of the Property at the Closing, subject only to the Permitted
Exceptions and to the rights of AID under the Lease.
7. PRORATIONS.
7.1 TAXES, INSURANCE PREMIUMS, UTILITY CHARGES AND OTHER INCOME
AND EXPENSES. Purchaser and Seller acknowledge and agree that prorations for
such items as taxes, insurance premiums, utility charges and other items of
income and expense related to the Property shall not be necessary as of the
Closing in light of the continued occupancy of the Property by AID under the
Lease, and AID's obligation to pay for such items pursuant to the Lease
following the Closing, provided, however, that (i) Seller shall be required to
pay all outstanding amounts due for taxes, insurance premiums, utility charges
and other items of expense related to the Property at or prior to Closing, and
(ii) in the event Purchaser requires escrows of the "Impositions" (as defined
in the Lease), Seller shall pay to Purchaser at Closing the Impositions
prorated as of the Closing Date.
7.2 SURVIVAL. This Article 7 shall survive the Closing.
8. SURVIVAL.
All warranties, representations, covenants, obligations, indemnities
and agreements contained in this Agreement shall survive the execution and
delivery of this Agreement and shall
19
survive the Closing. Any right of action for the breach of any representation
or warranty contained herein shall survive the Closing for the term of the
Lease.
9. COMMISSIONS.
9.1 PAYMENT, INDEMNIFICATION BY SELLER. Seller shall indemnify
Purchaser and hold and defend Purchaser harmless from and against any and all
claims, losses, liabilities, damages, demands, costs and expenses (including
actual, reasonable attorneys' fees at or before the trial level and any
appellate proceedings) arising out of any claim made by any realtor, broker,
finder, or any other intermediary who claims to have been engaged, contracted
or utilized by Seller in connection with the transaction which is the subject
matter of this Agreement. This indemnification shall survive the Closing.
9.2 INDEMNIFICATION BY PURCHASER. Purchaser shall indemnify, hold
harmless and defend Seller from and against any and all claims, losses,
liabilities, damages, demands, costs and expenses (including actual, reasonable
attorneys' fees at or before the trial level and any appellate proceedings)
arising out of any claim made by any realtor, broker, finder or any other
intermediary who claims to have been engaged, contracted or utilized by
Purchaser in connection with the transaction which is the subject matter of
this Agreement. This indemnification shall survive the Closing.
10. FURTHER INSTRUMENTS.
Seller will, whenever reasonably requested by Purchaser, and Purchaser
will, whenever reasonably requested by Seller, execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered, all conveyances,
assignments and all other instruments and documents as may be reasonably
necessary in order to complete the transaction herein provided and to carry out
the terms and provisions of this Agreement.
11. TERMINATION AND REMEDIES.
11.1 SELLER'S DEFAULT. If, prior to or at the Closing, Seller
defaults hereunder, or shall have failed to have performed any of the covenants
and/or agreements contained herein which are to be performed by Seller, or if
any warranty or representation made by Seller herein is not true and correct,
except as specifically provided below, Purchaser's sole and exclusive remedies
shall be (i) to seek specific performance of this Agreement, (ii) to waive such
breach and proceed to consummate the transaction contemplated with respect to
the purchase of the Property without reduction of the Purchase Price, or (iii)
to terminate this Agreement and receive a refund of the Deposit, together with
the actual out of pocket expenses incurred by Purchaser with respect to this
transaction (including attorney's fees), provided such expenses do not exceed
$10,000. The foregoing shall be Purchaser's sole and exclusive remedies in the
event of a default by Seller prior to Closing, provided, however, that in the
event that Seller commits a fraudulent act or transfers the Property to a third
party in contravention of this Agreement, in addition to the foregoing
remedies,
20
Purchaser shall be entitled to pursue all available remedies at law and/or
equity. If, after the Closing, Seller defaults hereunder by its failure to have
performed any of the covenants and/or agreements contained herein which are to
be performed after the Closing or defaults hereunder because any warranty or
representation made by Seller herein is not true and correct, Purchaser may
seek to enforce its remedies under applicable law; provided, however, that any
damages recovered by Purchaser shall be limited to the amount of the Purchase
Price, and Purchaser shall not be entitled to consequential damages. The
provisions hereof shall survive Closing.
11.2 PURCHASER'S DEFAULT. If the Purchaser has not terminated this
Agreement pursuant to any of the provisions hereof authorizing such
termination, and Purchaser defaults hereunder and fails to perform any of the
covenants and/or agreements contained herein which are to be performed by
Purchaser, Seller shall be entitled to retain the Deposit, together with all
interest earned thereon, as Seller's sole and exclusive remedy, as liquidated
damages, due to the inconvenience of ascertaining and measuring actual damages,
and the uncertainty thereof. Seller hereby specifically waives any and all
rights which it may have to any other damages or specific performance as a
result of Purchaser's default under this Agreement. Notwithstanding anything in
this Section 11.2 or in this Agreement to the contrary, Purchaser's
indemnification obligations hereunder shall not be limited by this Section
11.2.
12. RISK OF LOSS.
12.1 CASUALTY PRIOR TO CLOSING. If any time prior to the Closing
any portion of the Property is destroyed or damaged by fire or any other
casualty whatsoever, Seller shall give notice thereof to Purchaser. The rights
and obligations of the parties by reason of such destruction or damage shall be
as follows:
(a) If the "cost of repair and restoration" (as such
term is defined in Section 12.2 below) of such destruction or damage
shall be $100,000 or less, Purchaser shall give notice to Seller of
Purchaser's election to either (1) require Seller to proceed with the
necessary repairs or (2) accept the insurance proceeds payable because
of the destruction or damage. If Purchaser elects to have Seller make
such repairs, Seller shall repair such damage as promptly as is
reasonably possible, restoring the damaged Property at least to its
condition immediately prior to such damage; and in such event, the
Closing shall be deferred until the Property has been restored to at
least its condition prior to such damage or destruction. If Purchaser
elects to accept the insurance proceeds, Seller shall be excused from
making repairs, but shall pay or assign to the Purchaser any and all
claims and insurance proceeds payable for such damage, plus an amount
equal to any deductible payable under any policy of insurance
maintained (or required to be maintained) by Seller and the sale shall
be closed without Seller repairing such damage.
(b) If the "cost of repair and restoration" of such
destruction or damage shall exceed $100,000, Purchaser may elect to
terminate this Agreement; and if Purchaser does not elect to terminate
this Agreement the Closing shall occur as scheduled, but at the
21
Closing, Seller shall pay or assign to the Purchaser any and all
claims and insurance proceeds payable for such damage, plus an amount
equal to any deductible payable under any policy of insurance
maintained (or required to be maintained) by Seller and the sale shall
be closed without Seller repairing such damage.
12.2 DETERMINING COST OF REPAIR. The term "COST OF REPAIR AND
RESTORATION" shall mean an estimate of the actual cost of repair and
restoration obtained by Purchaser (with Seller's cooperation), within twenty
(20) days of receipt of notice from Seller of such destruction or damage, from
a reputable contractor, reasonably acceptable to both Purchaser and Seller,
regularly doing business in the city in which the Property is located. If the
Closing Date is to occur within twenty-five (25) days of the occurrence of the
casualty, the Closing shall be deferred by the amount of time required to
obtain the cost of repair and restoration estimate.
12.3 CONDEMNATION. Immediately upon obtaining knowledge of the
institution of any proceedings for the condemnation of the Property or any
portion thereof, Seller will notify Purchaser of the pendency of such
proceedings. Purchaser may participate in any such proceedings, and Seller
shall from time to time deliver to Purchaser all instruments requested by it to
permit such participation. If (a) the whole or any part of the Property or any
interest in the Property is taken by condemnation or right of eminent domain
prior to the Closing (or if any such taking is threatened), and (b) in
Purchaser's reasonable determination the Property is rendered unsuitable for
Purchaser's intended use (or would be rendered unsuitable if the threatened
taking occurs), at Purchaser's option this Agreement shall terminate. If
Purchaser elects not to terminate this Agreement, the transaction contemplated
by this Agreement shall be closed in accordance with the terms of this
Agreement notwithstanding any such taking, but at the Closing, Seller shall pay
to Purchaser any awards collected in connection with such taking and shall
assign to Purchaser all of Seller's rights to collect any awards which
thereafter may be payable as a result of, or to recover against others for,
such taking.
12.4 CONTROL OVER CONFLICTING STATUTE. The provisions of this
Article 12 shall control the rights and duties of the parties, in lieu of any
contrary provisions of the Uniform Vendor and Purchaser Risk Act or any other
similar statute applicable to the Property and/or this Agreement.
13. [INTENTIONALLY RESERVED]
14. NO ASSUMPTION.
Purchaser is not and is not to be deemed to be, a successor of Seller,
it being understood that Purchaser is acquiring only the Property; and it is
expressly understood and agreed that, except as may otherwise be expressly
agreed to by Purchaser elsewhere in this Agreement and in the documents
delivered at the Closing, Purchaser has not and does not hereby assume or agree
to assume any liability whatsoever of Seller.
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15. NOTICES.
Any notice, request, demand, instruction or other communication to be
given to either party hereunder, except those required to be delivered at the
Closing, shall be in writing, and shall be deemed to be delivered (a) upon
receipt, if delivered by facsimile or if hand delivered, (b) on the first
business day after having been delivered to a national overnight air courier
service, or (c) three (3) business days after deposit in registered or
certified mail, return receipt requested, addressed as follows:
If to Purchaser: LJH, Ltd.
c/o Xx. Xxx Xxxx
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
with additional copies to: Xxxxx & Xxxxxx
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to Seller: AVSRE, L.P.
c/o TIMCO Aviation Services, Inc.
000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx Xxxxxx
Telephone: (000) 000-0000, ext. 3026
Fax: (000) 000-0000
with additional copies to: Akerman, Senterfit
Suntrust International Center
Xxx X.X. Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxx, Xx 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
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16. CHOICE OF LAW.
IN THE EVENT THAT ANY LITIGATION ARISES HEREUNDER, IT IS SPECIFICALLY
STIPULATED THAT THIS AGREEMENT SHALL BE INTERPRETED AND CONSTRUED ACCORDING TO
THE LAWS OF THE STATE OF TEXAS. All of the parties to this Agreement have
participated fully in the negotiation and preparation hereof and accordingly,
this Agreement shall not be more strictly construed against any one of the
parties hereto
17. MISCELLANEOUS.
17.1 ENTIRE AGREEMENT. This Agreement and the exhibits attached
hereto contain the entire agreement between the parties. No modification or
amendment of this Agreement shall be of any force or effect unless made in
writing and executed by Purchaser and Seller.
17.2 COUNTERPARTS. This Agreement maybe executed in any number of
counterparts which together shall constitute the agreement of the parties.
17.3 TIME OF THE ESSENCE. Time is of the essence with respect to
the performance of all obligations provided herein and the consummation of all
transactions contemplated hereby.
17.4 ASSIGNMENT. Purchaser shall have the right to assign all or
any portion of Purchaser's rights and obligations under this Agreement to any
affiliate of Purchaser, without any prior notice to or the prior consent of
Seller; provided, however, that any such assignment shall not release or
relieve Purchaser of any liability hereunder.
17.5 SEVERABILITY. In the event any term or provision of this
Agreement be determined by appropriate judicial authority to be illegal or
otherwise invalid, such provision shall be given its nearest legal meaning or
be construed as deleted as such authority determines, and the remainder of this
Agreement shall be construed to be in full force and effect.
17.6 EXHIBITS. All of the exhibits attached to this Agreement are
incorporated in, and made a part of, this Agreement.
17.7 DATES. Whenever any determination is to be made or action is
to be taken on a date specified in this Agreement, if such date shall fall on
Saturday, Sunday or legal holiday under the laws of the State of Texas, then in
such event said date shall be extended to the next day which is not a Saturday,
Sunday or legal holiday. All references in this Agreement to "THE DATE HEREOF,"
"THE DATE OF THIS AGREEMENT" or similar references shall be deemed to refer to
the later of the two (2) dates on which this Agreement has been signed by the
Seller and Purchaser as indicated by their signatures below, which date shall
be the date of final execution and agreement by the parties hereto.
17.8 BINDING ON SUCCESSORS AND ASSIGNS. This Agreement and the
terms and provisions hereof shall inure to the benefit of and be binding upon
the parties hereto and their
24
respective heirs, executors, personal representative, successors and assigns
whenever the context so requires or admits.
17.9 ATTORNEYS' FEES; VENUE; WAIVER OF JURY TRIAL. Subject to the
other provisions of this Agreement, should either party hereto institute any
action or proceeding in court to enforce any provision hereof or for damages by
reason of any alleged breach of any provision of this Agreement or for any
other judicial remedy, the prevailing party shall be entitled to receive from
the losing party all reasonable attorneys' fees and all court costs in
connection with said proceeding (at trial and all appellate levels). Any
litigation between the parties arising from this Agreement shall only be
brought in Dallas County, Texas, and the parties hereby agree to such
jurisdiction in Dallas County, Texas. Each party hereby waives the right to a
jury trial in any litigation arising from this Agreement.
17.10 TERMINATION. Upon any termination of this Agreement by
Purchaser pursuant to the terms of this Agreement, Purchaser shall be
automatically released and discharged from all further liability and
obligations under and in connection with this Agreement except for those
liabilities and obligations that survive the expiration, cancellation or
termination of this Agreement as provided herein.
17.11 REPORTING PERSON. The Title Company is hereby designated as
the "Reporting Person" pursuant to Section 6045 of the Code and the regulations
promulgated thereunder.
17.12 PARAGRAPH HEADINGS. The paragraph headings contained in this
Agreement are for convenience only and shall in no way enlarge or limit the
scope or meaning of the various and several paragraphs hereof.
17.13 NON-RECOURSE. No officer, directors, shareholder, beneficial
owner, agent or employee of Purchaser shall be personally liable for any
obligation under this Agreement or in any Closing document.
17.14 ESCROW AGENT. The Escrow Agent shall not be liable for any
actions taken by it in good faith, but only for its gross negligence or willful
misconduct. The parties hereby indemnify and agree to hold harmless the Escrow
Agent from and against all liabilities, damages, claims, costs, for and
expenses whatsoever (including reasonable attorneys' fees and court costs at
trial and appellate levels) the Escrow Agent may incur or be exposed to in its
capacity as escrow agent hereunder, except for its gross negligence or willful
misconduct. If there be any dispute as to disposition of any proceeds held by
the Escrow Agent pursuant to the terms of this Agreement, the Escrow Agent is
hereby authorized to interplead the disputed amount or the entire proceeds with
any court of competent jurisdiction and thereby be released from all of its
obligations hereunder. The parties acknowledge that the Escrow Agent is the law
firm representing Purchaser, and hereby agree that such law firm may continue
to represent Purchaser in any litigation pursuant to this Agreement. The Escrow
Agent shall not be liable for any failure of the depository.
25
17.15 NOTICE TO PURCHASER. The Texas Real Estate License Act
requires that Seller notify Purchaser that Purchaser should either (i) have an
attorney examine an abstract of title to the Property, or (ii) obtain a title
insurance policy covering the Property. Notice to that effect is, therefore,
hereby given to and acknowledged by Purchaser.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
26
EXECUTED by Purchaser on the 2nd day of October, 2002.
PURCHASER:
----------
LJH, LTD., a Texas limited partnership
By: DLH Management, L.L.C., its General
Partner
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx, President
EXECUTED by Seller on the 2nd day of October, 2002.
SELLER:
-------
AVSRE, L.P., a Delaware limited partnership
By: Aviation Sales Property Management
Corp., its General Partner
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
-------------------------------------
Title: Treasurer
-------------------------------------
Aircraft Interior Design, Inc., hereby executes this Agreement to acknowledge
its agreement to the terms of this Agreement, including executing the Lease at
Closing.
AIRCRAFT INTERIOR DESIGN, INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
-------------------------------------
Title: Treasurer
-------------------------------------
27
The undersigned hereby accepts this Agreement and agrees to perform
the functions of Title Company and Escrow Agent hereunder. The undersigned
further assumes the duties of the "Reporting Person" as described in Section
6045 of the Code and the regulations promulgated thereunder.
TITLE COMPANY/ESCROW AGENT:
---------------------------
COMMONWEALTH LAND TITLE
COMPANY OF HOUSTON
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
-------------------------------------
Title: Vice President
-------------------------------------
28
EXHIBIT A
LEGAL DESCRIPTION
IMPROVED PROPERTY
BEING a tract of land situated in the Xxxxxxxx Xxxxxx Survey, Abstract Xxxxxx
00, xx xxx Xxxx xx Xxxxxx, Xxxxxx Xxxxxx, Xxxxx; and also being all of Lots 6,
7, 8 and the east 9 feet of Xxx 0, Xxxxx 0/0000 xx XXXXXXX XXXXX XXXXXXXXXX
XXXX, an addition to said City of Dallas as recorded in Volume 895, Page 1363,
Plat Records of Dallas County, Texas, and being more particularly described by
metes and bounds as follows:
BEGINNING, at an "x" cut found for corner situated in the intersection of the
north line of Nova Drive (60' R.O.W.) and the west line of Grissom Lane (60'
R.O.W.);
THENCE, S 89(0)43'49"W, along the north line of said Nova Drive, a distance of
609.00 feet to a 5/8" iron rod found for corner;
THENCE, N 00(0)16'11"W, departing said north line of Nova Drive, a distance of
609.00 feet to a 5/8" iron rod found for corner;
THENCE, N 89(0)43'49"E, a distance of 610.45 feet to a 5/8" iron rod found for
corner situated in the west line of said Grissom Lane;
THENCE, S 00(0)02'19"W, along the west line of said Grissom Lane, a distance of
270.00 feet to the POINT OF BEGINNING and containing 164,623 square feet or
3.779 acres of land.
UNIMPROVED PROPERTY
BEING a 67,500 square foot tract or parcel of land situated in the Xxxxxxxx
Xxxxxx Survey, Abstract Xxxxxx 00, xx xxx Xxxx xx Xxxxxx, Xxxxxx Xxxxxx, Xxxxx;
and also being a part of Xxx 0X, Xxxxx 0/0000 xx xxx XXXXXXX XXX 0 XX XXXXX
3/6593 IN THE FREEWAY NORTH INDUSTRIAL PARK, an addition to said City of Dallas
according to the plat thereof recorded in Volume 67092, Page 1371, Deed Records
of Dallas County, Texas (DRDCT); said 67,500 square foot tract of land being
more particularly described by metes and bounds as follows:
COMMENCING at a point for the common, west corner of the aforesaid Xxx 0X xxx
xx Xxx 0, Xxxxx 3/6593 of the FREEWAY NORTH INDUSTRIAL PARK, an addition to
said City of Dallas according to the plat thereof recorded in Volume 895, Page
1363, DRDCT; said corner also being in the east right-of-way line of Grissom
Lane (a 60-foot right-of-way);
Exhibit A, Page 1
THENCE along said east right-of-way line of Grissom Lane, same being the west
line of the aforesaid Xxx 0X xxx xxx xxxx xxxx xx xxxx Xxxxx 3/6593; South
00(Degree)02'19" West, a distance of 60.00 feet to a 1/2-inch iron rod found
for the northwest corner of the herein described property; said corner also
being the POINT of BEGINNING of this metes and bounds description;
THENCE leaving said east right-of-way line of Grissom Lane, and said west line
of Lot 4A and Block 3/6593; and into and across the aforesaid Lot 4A; North
89(Degree)43'49" East, a distance of 250.00 feet to a 1/2-inch iron rod found
for the northeast corner of the herein described property; said corner being in
the east line of the aforesaid Lot 4A, in the east line of said Block 3/6593,
and in the east line of the aforementioned additions; and also being South
00(Degree)02'19" West, a distance of 60.00 feet from a point for the common,
east corner of the aforementioned Lot 4A and Lot 3;
THENCE along the aforesaid east line of Lot 4A, same being the aforesaid east
line of Block 3/6593 and the east line of said additions; South
00(Degree)02'19" West, a distance of 270.01 feet to a 1/2-inch iron rod with
cap stamped "LONE STAR" set for the southeast corner of said Lot 4A; said
corner being the northeast corner of Xxx 0X, Xxxxx 0/0000 of said revised plat;
being the centerline of a 38-foot easement and right-of-way to the Missouri,
Kansas and Texas Railroad Company; and also being the southeast corner of the
herein described property;
THENCE leaving last described line and along the common line between the
aforesaid Lot 4A and Lot 4B, same line being the aforesaid easement centerline;
South 89(Degree)43'49" West, a distance of 250.00 feet to a 1/2-inch iron rod
with cap stamped "LONE STAR" set for the common, west corner of the aforesaid
Lots 4A and 4B; said corner being in the aforesaid west line of Block 3/6593;
being in the aforementioned east right-of-way line of Grissom Lane; and also
being the southwest corner of the herein described property;
THENCE leaving last said common line between Lots 4A and 4B, and along the
aforesaid east right-of-way line of Grissom Lane, same being the west line of
Xxx 0X xxx xxx xxxx xxxx xx Xxxxx 3/6593; North 00(Degree)02'19" East, a
distance of 270.01 feet to the POINT of BEGINNING;
CONTAINING a computed area of 67,500 square feet or 1.550 acres of land.
Exhibit A, Page 2
